WillScot Holdings Corp 10-K

wsc-20211231 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31 , 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission File Number: 001-37552 WILLSCOT MOBILE MINI HOLDINGS CORP. (Exact name of registrant as specified in its charter) Delaware 82-3430194 (State or other jurisdiction of incorporation) (I.R.S. Employer Identification No.) 4646 E Van Buren St. , Suite 400 Phoenix , Arizona 85008 (Address of principal executive offices) ( 480 ) 894-6311 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Trading Symbol(s) Name of Each Exchange on Which Registered Common Stock, par value $0.0001 per share WSC The Nasdaq Capital Market Warrants to purchase Common Stock (1) WSCTW OTC Markets Group Inc. (1) Issued in connection with the registrant's acquisition of Modular Space Holdings, Inc. in August 2018, which are exercisable for one share of the registrant's common stock at an exercise price of $15.50 per share. Securities registered pursuant to Section 12(g) of the Act: None. Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ 1 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ The aggregate market value of the common shares held by non-affiliates of the registrant, co mputed as of June 30, 2021 (t he last business day of the registrant’s most recently completed second quarter), was app roximate ly $ 5.5 billion . Shares of Common Stock, par value $0.0001 per sha re, outstan ding: 223,277,733 shares at February 21, 2022 . Documents Incorporated by Reference The information required by Part III of this Report, to the extent not set forth herein, is incorporated herein by reference from the registrant's definitive proxy statement for the 2022 annual meeting of stockholders, which definitive proxy statement will be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this Report relates. 2 WillScot Mobile Mini Holdings Corp. Annual Report on Form 10-K Table of Contents PART I Item 1 Business Item 1A Risk Factors Item 1B Unresolved Staff Comments Item 2 Properties Item 3 Legal Proceedings Item 4 Mine Safety Disclosures PART II Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Item 6 [Reserved] Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations Item 7A Quantitative and Qualitative Disclosures About Market Risk Item 8 Financial Statements and Supplementary Data Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Item 9A Controls and Procedures Item 9B Other Information PART III Item 10 Directors, Executive Officers and Corporate Governance Item 11 Executive Compensation Item 12 Security Ownership of Certain Beneficial Owners and Management Related Stockholder Matters Item 13 Certain Relationships and Related Transactions, and Director Independence Item 14 Principal Accountant Fees and Services PART IV Item 15 Exhibits and Financial Statement Schedules SIGNATURES 3 Cautionary Note Regarding Forward Looking Statements This Annual Report on Form 10-K contains forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act. The words “estimates,” “expects,” “anticipates,” “believes,” “forecasts,” “plans,” “intends,” “may,” “will,” “should,” “shall,” “outlook,” “guidance” and variations of these words and similar expressions identify forward-looking statements, which are generally not historical in nature and relate to expectations for future financial performance or business strategies or objectives. Forward-looking statements are subject to a number of risks, uncertainties, assumptions and other important factors, many of which are outside our control, which could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Although we believe that these forward-looking statements are based on reasonable assumptions, we can give no assurance that any such forward-looking statement will materialize. Important factors that may affect actual results or outcomes include, among others: • our ability to successfully acquire and integrate new operations; • the effect of global or local economic conditions in the industries and markets in which the Company operates and any changes therein, including financial market conditions and levels of end market demand; • operational, economic, political and regulatory risks; • the impact of public health crises, such as the global pandemic related to COVID-19, including the financial condition of the Company’s customers and suppliers and employee health and safety; • risks associated with cybersecurity and IT systems disruptions, including our ability to manage the business in the event a disaster shuts down our management information systems; • effective management of our rental equipment; • trade policies and changes in trade policies, including the imposition of tariffs, their enforcement and downstream consequences; • our ability to effectively compete in the modular space, portable storage and tank and pump industries; • our ability to effectively manage our credit risk, collect on our accounts receivable, or recover our rental equipment; • the effect of changes in state building codes on our ability to remarket our buildings; • foreign currency exchange rate exposure; • fluctuations in interest rates and commodity prices; • significant increases in the costs and restrictions on the availability of raw materials and labor; • fluctuations in fuel costs or oil prices, a reduction in fuel supplies, or a sustained decline in oil prices; • our reliance on third party manufacturers and suppliers; • risks associated with labor relations, labor costs and labor disruptions; • impairment of our goodwill, intangible assets and indefinite-life intangible assets; • various laws and regulations, including those governing government contracts, corruption and the environment; • changes in the competitive environment of our customer base as a result of the global, national or local economic climate in which they operate and/or economic or financial disruptions to their industry; • our ability to adequately protect our intellectual property and other proprietary rights that are material to our business; • natural disasters and other business disruptions such as pandemics, fires, floods, hurricanes, earthquakes and terrorism; • our ability to establish and maintain the appropriate physical presence in our markets; • property, casualty or other losses not covered by our insurance; • our ability to close our unit sales transactions; • our ability to maintain an effective system of internal controls and accurately report our financial results; • evolving public disclosure, financial reporting and corporate governance expectations; • our ability to achieve our environmental, social and governance goals; • our ability to use our net operating loss carryforwards and other tax attributes; • our ability to recognize deferred tax assets such as those related to our tax loss carryforwards and, as a result, utilize future tax savings; • unanticipated changes in tax obligations, adoption of a new tax legislation, or exposure to additional income tax liabilities; • our ability to access the capital and credit markets or the ability of key counterparties to perform their obligations to us: 4 • our ability to service our debt and operate our business; • our ability to incur significant additional amounts of debt, which could further exacerbate the risks associated with our substantial indebtedness; • covenants that limit our operating and financial flexibility; • uncertainty regarding the phase-out of LIBOR; • our stock price volatility; and • other factors detailed under the section entitled "Risk Factors." Any forward-looking statement speaks only at the date which it is made, and we undertake no obligation, and disclaim any obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. PART I ITEM 1. Business Unless the context otherwise requires, “we,” “us,” “our” and the “Company” refers to WillScot Mobile Mini Holdings Corp. ("WillScot Mobile Mini") and its subsidiaries. Our Company Headquartered in Phoenix, Arizona, we are a leading business services provider specializing in innovative flexible work space and portable storage solutions. We service diverse end markets across all sectors of the economy from a network of approximately 275 branch locations and additional drop lots throughout the United States (“US”), Canada, Mexico, and the United Kingdom ("UK"). We are also a leading provider of specialty containment solutions in the US. With roots dating back more than 60 years, we lease modular space and portable storage units (our “lease fleet”) to customers in the commercial and industrial, construction, education, energy and natural resources, government, and other end markets. We offer our customers an extensive selection of “Ready to Work” solutions. As part of our "Ready to Work" solutions, we offer value-added products and services, such as the rental of steps, ramps, and furniture packages, damage waivers, and other amenities to improve the overall customer experience. These turnkey solutions offer customers flexible, low-cost, and timely solutions to meet their flexible work space and storage needs on an outsourced basis. On July 1, 2020, WillScot Corporation ("WillScot") combined with Mobile Mini, Inc. ("Mobile Mini") in a stock-for-stock merger (the "Merger"), and WillScot changed its name to WillScot Mobile Mini Holdings Corp. WillScot Mobile Mini is the holding company for the Williams Scotsman and Mobile Mini families of companies. The Company operates in four reportable segments as follows: North America Modular Solutions ("NA Modular"), North America Storage Solutions ("NA Storage"), United Kingdom Storage Solutions ("UK Storage"), and Tank and Pump Solutions ("Tank and Pump"). Prior to the third quarter of 2021, the NA Modular segment aligned with the WillScot legacy business prior to the Merger, and the NA Storage, UK Storage, and Tank and Pump segments aligned with the Mobile Mini segments prior to the Merger. During the third quarter of 2021, the majority of the portable storage product business within the NA Modular segment was transitioned to the NA Storage segment, and associated revenues, expenses, and operating metrics beginning in the third quarter of 2021 were transferred to the NA Storage segment. Within this Annual Report on Form 10-K, we have presented certain financial information on a pro forma basis and supplemental pro forma financial statements within Management’s Discussion and Analysis of Financial Condition and Results of Operations to include Mobile Mini's results as if the Merger and related financing transactions had occurred on January 1, 2019, as we believe this is a better representation of the go-forward operations of the combined company, and we believe this information is useful to investors in order for them to better understand the combined historical financial results of the legacy businesses for comparative purposes. Products and Services Modular Space Solutions Our modular space units meet a broad range of customer needs. Our modular units are typically made of steel and aluminum frames, as well as traditional building materials, and range from standalone portable units as small as 24 square feet to large complex units that can be coupled together or stacked to create versatile work spaces in excess of 10,000 square feet. In all cases, we deploy modular units to customers rapidly from our extensive branch network using our hybrid in-house and outsourced logistics and service infrastructure. We specialize in turnkey ‘Ready to Work’ solutions, which means our units can arrive fully equipped with air conditioning, heating, and filtration units, electrical and Ethernet ports, plumbing and utility hookups, as well as our proprietary line of furnishings and appliances, which we together refer to as Value-Added Products and Services (“VAPS”). Our units are transported by truck, either towed (if fitted with axles and hitches) or mounted on flat-bed trailers. Modular space units have attractive economic characteristics, and our ability to lease and maintain our assets’ 5 profitability over economic lives, which often exceed 20 years, is a unique capability and competitive advantage. We utilize standard fleet maintenance procedures across the branch network, monitor fleet condition and allocate capital expenditures centrally, and ensure all units meet consistent quality and condition requirements, regardless of unit age, prior to delivery to a customer. Modular leasing is complemented by new unit sales and sales of rental units. In connection with our leasing and sales activities, we provide services including delivery and installation, maintenance and ad hoc services, and removal services at the end of lease transactions. Panelized and Stackable Offices. O ur Flex TM p anelized and stackable offices are the next generation of modular space technology and offer maximum flexibility and design configurations. These units provide a modern, innovative design, smaller footprint, ground level access, and interchangeable panels, including all glass panels that allow customers to configure the space to their precise requirements. These units have the ability to expand upwards (up to three stories) and outwards, providing maximum versatility. Single-Wide Modular Space Units. Single-wide modular space units include mobile offices and sales offices. These units offer maximum ease of installation and removal and are deployed across the broadest range of applications in our fleet. These units typically have “open interiors,” which can be modified using movable partitions, and include tile floors, air conditioning, heating, and filtration units, partitions and toilet facilities. Section Modulars and Redi-Plex. Section modulars are two or more units combined into one structure. Redi-Plex complexes offer advanced versatility for large, open floor plans or custom layouts with private offices. Redi-Plex is built with clearspan construction, which eliminates interference from support columns and allows for up to sixty feet of open building width and building lengths that increase in twelve-foot increments based on the number of units coupled together. Our proprietary design meets a wide range of national and state building, electrical, mechanical, and plumbing codes, which creates versatility in fleet management. Examples of section modular units include hospital diagnostic annexes, special events headquarters, temporary data centers, and larger general commercial offices. Classrooms. Classroom units are generally double-wide units or Flex panelized units adapted specifically for use by school systems or universities. Classroom units usually feature teaching aids, air conditioning, heating, and filtration units, windows and, if requested, toilet facilities. Ground Level Offices and Container Offices. We also offer steel ground level offices from 10 to 40 feet in length and 8 or 10 feet in width. Many of these units are converted to office use from International Organization for Standardization ("ISO") certified shipping containers. These offices are available in various configurations, including all-office floor plans or office and storage combination units that provide a 10‑ or 15‑foot office with the remaining area available for storage. Ground level offices provide the advantage of ground accessibility for ease of access and high security in an all‑steel design. These office units are equipped with electrical wiring, air conditioning, heating, filtration units, phone jacks, carpet or tile, high security doors, and windows with security bars or shutters. Some of these offices are also equipped with sinks, hot water heaters, cabinets, and toilet facilities . Other Modular Space. We offer a range of other specialty products that vary across regions and provide flexibility to serve demands for local markets. Examples include workforce accommodation units with dining facilities used to house workers, often in remote locations, blast-resistant units, and toilet facilities to complement office and classroom units. Portable Storage Solutions Portable Storage Containers. Our portable storage containers offer an assortment of differentiated features such as patented locking systems, premium and multiple door options, optional climate control, and numerous configuration options. Standard portable storage containers are made from weather‑resistant corrugated steel and are available in lengths ranging from 5 to 48 feet, widths of either 8 feet or 10 feet, and a variety of configuration options. Doors can be placed at the front, front and back, or the sides of containers. Other options include partitions and shelving. Storage containers can be equipped with our patented Tri‑Cam Locking System®, which features a waist‑level opening lever and interlocking bars to provide easy access for the owner without sacrificing security. We also offer ContainerGuardLock®, an optional security device, which features a hidden six‑pin tumbler system and is made from drill‑resistant hardened steel. We believe these steel storage containers are a cost‑effective alternative to mass warehouse storage, with a high level of security to protect our customers' goods. Steel containers have a long useful life with no technical obsolescence. Our portable storage containers generally have estimated useful lives of 30 years from the date we build or acquire and remanufacture them, with average residual values in excess of 50%. We maintain our steel containers on a regular basis by removing rust, painting them with rust inhibiting paint, plug‑welding holes, and occasionally replacing the wooden floor or a rusted steel panel. Repainting the outside of storage units is the most common maintenance item. A properly maintained container is essentially in the same condition as when it was initially remanufactured. The remanufacturing process begins with the purchase of used ISO containers from leasing companies, shipping lines, and brokers. These containers were originally built to ISO standards and are 8 feet wide, up to 9.5 feet high and 20, 40 or 45 feet long. After acquisition, we remanufacture and modify these ISO containers. Remanufacturing typically involves cleaning, removing rust and dents, repairing floors and sidewalls, painting, adding our signs, and further customizing units by adding our proprietary easy opening door system and our patented locking system. Modification typically involves splitting some containers into differing lengths. 6 VAPS We offer a thoughtfully curated portfolio of VAPS that make modular space and portable storage units more productive, comfortable, secure, and “Ready to Work” for our customers. We lease furniture, steps, ramps, basic appliances, internet connectivity devices, and other items to our customers for use in connection with our products. We also offer our lease customers a damage waiver program that protects them in case the leased unit is damaged. For customers who do not select the damage waiver program, we bill them for the cost of repairs above and beyond normal wear and tear. Importantly, management believes that our scale, branch network, supply chain, and sales performance management tools give us a significant advantage in delivering “Ready to Work” solutions and growing VAPS revenue relative to our competitors. Delivery, Installation and Removal We operate a hybrid in-house and outsourced logistics and service infrastructure that provides delivery, site work, installation, disassembly, unhooking and removal, and other services to our customers for an additional fee as part of our leasing and sales operations. Revenue from delivery, site work, and installation results from the transportation of units to a customer's location, as well as site work required prior to installation, and installation of the units which have been leased or sold. Typically, modular units are placed on temporary foundations constructed by our in‑house service technicians or subcontractors. These in‑house service technicians or subcontractors also generally install any ancillary products and VAPS. We also derive revenue from disassembling, unhooking, and removing units once a lease expires. We believe that our logistics and service capabilities are unrivaled in the industry, differentiate us from competitors, and enhance our value proposition to our customers. Tank and Pump Solutions Our Tank and Pump Solutions business offers a broad range of liquid and solid specialty containment equipment and services complemented by an assortment of pumps, filtration units, and waste hauling services. In addition, ancillary products for rental and for sale are available, such as hoses, pipes, filters, and spill containment. Our principal products and services within our Tank and Pump Solutions business include steel tanks, stainless steel tank trailers, roll‑off boxes, vacuum boxes, dewatering boxes, pumps and filtration equipment, and value‑added services. Our fleet of steel tanks offers flexible sizes and other options such as weir, gas buster, and open top steel tanks for applications ranging from temporary storage of chemicals, water, and other liquids, thorough mixing, agitation, and circulation of stored liquids with other products, and removal of gas from fluids circulated in the wellbore—such as mud used during drilling operations and settling of solids in liquids prior to filtration or discharge. Our stainless-steel tankers meet Department of Transportation specifications for use in the storage and transportation of chemical, caustics, and other liquids and are offered insulated or non‑insulated with level indication and vapor recovery capability. Roll‑off boxes provide simple, leak‑proof storage and transportation of solid industrial byproducts and are utilized for a variety of containment applications where it is necessary to maintain the homogeneity of the contents. Roll-tarps or rolling metal lids are available to protect the contents from the elements during transport or storage. Vacuum roll‑off boxes are also offered to pair with a vacuum truck for containment, storage, or transportation of pressurized contents. Dewatering boxes are configured to provide for the draining of excess liquid from slurry or sludge which reduces storage, transportation, and disposal costs. Upon completion of dewatering, the container is generally picked up by a roll‑off truck for content disposal. Vacuum dewatering boxes are also offered. In addition, we offer a variety of pumps and filtration equipment that can be used primarily for liquid circulation and filtration in municipal and industrial applications. Additional services performed by our specialty containment employees include transportation of containers for waste management between multiple locations or in-plant, waste management oversight and service provision by an on-site dedicated team, system design including assessment of pumping, filtration and temporary storage needs, and field services to correctly install and connect customer containment equipment. Product Leases We primarily lease, rather than sell, our modular and portable storage units to customers, which results in a highly diversified and predictable recurring revenue stream. For the year ended December 31, 2021, over 90% of new lease orders were on our standard lease agreement, pre-negotiated master lease, or national account agreements. The initial lease periods vary, and our leases are customarily renewable on a month-to-month basis after their initial term. For the year ended December 31, 2021, the average effective duration of our consolidated lease portfolio for modular space and portable storage units was over 31 months. As a result, our lease revenue is highly predictable due to its recurring nature and the underlying stability and diversification of our lease portfolio. For the year ended December 31, 2021, our average minimum contractual lease term at the time of delivery in our NA Modular segment for modular space units was 11 months. However, given that our customers value flexibility, they consistently extend their leases or renew on a month-to-month basis such that the average effective duration of our NA Modular segment lease portfolio was over 35 months. Customers are responsible for the costs of delivery and set-up, dismantling and pick-up, customer-specified modifications, costs to return custom modifications back to standard configuration at end of lease, and any loss or damage beyond normal wear and tear. Our leases generally require customers to maintain liability and property insurance covering the units during the lease term and to indemnify us from losses caused by the negligence of the customer or their employees. 7 Rental contracts with customers within our NA Storage and UK Storage segments are generally based on a 28‑day rate and billing cycle. The rental continues until cancelled by the customer or us. On average, steel storage containers on rent in our NA Storage and UK Storage segments for the year ended December 31, 2021 had been in place for over 31 months, and the steel ground level offices on rent for the year ended December 31, 2021 had been in place for over 15 months. Rental contracts provide that the customer is responsible for the cost of delivery and pickup and specify that the customer is liable for any damage done to the unit beyond ordinary wear and tear. Customers may purchase a damage waiver to avoid damage liability in certain circumstances, which provides an additional source of recurring revenue. Customer possessions stored within a portable storage unit are the responsibility of that customer. Rental contracts with Tank and Pump Solutions customers typically offer daily, weekly, or monthly rates. Certain larger customers have multi-year agreements that limit rate increases during the term of the contract. The rental duration varies widely by application, and the rental continues until the unit is returned in clean condition to us. On average, contracts in our Tank and Pump Solutions segments for the year ended December 31, 2021 had been in place for over 8 months. Rental contracts specify that the customer is responsible for carrying commercial general liability insurance, is liable for any damage to the unit beyond ordinary wear and tear, and for all materials the customer contains in rented equipment. The customer is contractually responsible for the cost of delivery and pickup, as well as thoroughly emptying and cleaning the equipment before return. Demand for our products varies by end market. Construction customers typically reflect higher demand during months with more temperate weather, while demand from large retailers is stronger from September through December, when more space is needed to store holiday inventories. Retail customers usually return these rented units in December and early in the following year, but also undertake ongoing rolling store renovations which present consistent recurring demand throughout the year. In our Tank and Pump Solutions business, demand from customers is typically higher in the middle of the year from March to October, driven by the timing of customer maintenance projects. As of December 31, 2021, we had approximately 390,000 total units including over 162,000 modular space units, over 213,000 portable storage units, over 13,000 tank and pump units, and other value-added products representing fleet net book value of $3.1 billion. Approximately 111,000 of our modular space units, or 68% and 180,000 of our portable storage units, or 84% were on rent as of December 31, 2021, and tank and pump Original Equipment Cost ("OEC") utilization was 73.5% as of December 31, 2021. Product Sales We complement our core leasing business by selling both new and used units, allowing us to leverage our scale, achieve purchasing benefits, and redeploy capital employed in our lease fleet. Generally, we purchase new units from a broad network of third-party manufacturers. We only purchase new modular space units for resale when we have obtained firm purchase orders (which normally are non-cancelable and include up-front deposits) for such units. Buying units directly for resale adds scale to our purchasing, which is beneficial to our overall supplier relationships and purchasing terms. New unit sales are a natural extension of our leasing operations in situations where customers have long-lived or permanent projects, making it more cost-effective to purchase rather than to lease a standard unit, and our customers benefit from our product expertise and delivery and installation capabilities. In the normal course of managing our business, we also sell idle, used rental units at fair market value and units that are already on rent if the customer expresses interest in owning, rather than continuing to rent, the unit. The sale of units from our rental equipment has historically been both a profitable and cost-effective method to finance the replenishment and upgrade of our lease fleet, as well as to generate free cash flow during periods of lower rental demand and utilization. Our sales business may include modifying or customizing units to meet customer requirements. We also offer delivery, installation, and removal-related services for an additional fee as part of our sales operations. Customers Our customers operate in a diversified set of end markets, including construction, commercial and industrial, retail and wholesale trade, energy and natural resources, education, government and institutions, and healthcare. Core to our operating model is the ability to redeploy standardized assets across end markets, as we did in 2020 and 2021 to service emerging demand in the healthcare and government sectors related to COVID‑19, as well as expanded space requirements related to social distancing. We track several market leading indicators in order to predict demand, including those related to our two largest end markets, the commercial and industrial segment and the construction segment, which collectively accounted for approximately 47% and 40% of our revenues, respectively, for the year ended December 31, 2021. In order to optimize the use of fleet assets across our branch network, we centrally manage fleet rebalancing across our end markets. This allows us to serve 15 distinct end markets in which no one customer accounted for more than 2% of revenues for the year ended December 31, 2021. For the year ended December 31, 2021, our top 10 customers accounted for approximately 5% of revenues, and our top 50 customers accounted for less than 13% of revenues, reflecting low customer concentration and significant project diversification within our portfolio. Our logistics and service infrastructure is designed to meet or exceed our customers’ expectations by reacting quickly, efficiently, and with consistent service levels. As a result, we have established strong relationships with a diverse customer 8 base, ranging from large multinational companies to local sole proprietors. We served over 85,000 unique customers in 2021. We believe that our customers prefer our modular space and portable storage products over fixed, on-site built space because they are a quick, flexible, cost-effective, and low-risk solution for temporary or permanent expansion or storage. Our strategy involves operating standardized rental equipment and "Ready to Work" solutions that can be redeployed across our diversified customer base and branch network in 15 discrete end markets. Key customer end markets include: Construction and Infrastructure We provide office and storage space to a broad array of contractors associated with non-residential buildings and non-building infrastructure. Our client portfolio includes many of the largest general contractors and engineering, architecture, procurement, and construction companies in North America, as well as home builders, developers, and subcontractors. Examples include highway, street, bridge, and tunnel contractors; water, sewer, communication, and power line contractors; and special construction trades, including glass, glazing, and demolition. Our construction and infrastructure customer base is characterized by a wide variety of contractors that are associated with original construction as well as capital improvements in the private, institutional, and municipal arenas. Units are used as offices, break rooms, accommodations, security offices, and other applications. Commercial and Industrial Customers in this category use our products as their primary office or retail space, to expand their existing commercial workspace, to increase their storage capabilities, or as temporary space for festivals, sporting, and other events. Customers in this category span a variety of industries ranging from commercial offices; chemicals and other manufacturing; agriculture, forestry and fishing; arts, media, hotels, and entertainment; and other industrial end markets. The commercial and industrial segment also includes customers in retail and wholesale trade. These include department, drug, grocery, and strip mall stores, logistics, warehousing and distribution services, as well as restaurants, service stations, and dry cleaners. Our customers in retail and wholesale trade include big‑box retailers who have storage needs during renovations or other large on-site projects. On a stand‑alone basis, retail and wholesale trade customers comprised approximately 11% of fiscal year 2021 rental revenue. Energy and Natural Resources Our products are leased to companies involved in electricity generation and transmission, utilities, up- mid- and down-stream oil and gas, mining exploration and extraction, and other related sectors. Units are used as temporary offices, break rooms, accommodations, security offices, and other applications. Education Rapid shifts in populations within regions, as well as recent needs to expand square footage per student in in-person education settings, often necessitate quick expansion of education facilities, particularly in elementary and secondary schools and universities and colleges. Regional and local governmental budgetary pressures, classroom size reduction legislation, refurbishment of existing facilities, and the expansion of charter schools have made modular classrooms a convenient and cost-effective way to expand capacity in education settings. In addition, our products are used as classrooms when schools are undergoing large scale modernization, which allows continuous operation of a school while modernization progresses. Government and Institutions Government customers consist of national, state, provincial, and local public sector organizations. Modular space and portable storage solutions are particularly attractive to focused niches such as healthcare facilities, small municipal buildings, courthouses, military installations, national security buildings, and offices during building modernization, as well as disaster relief. Competitive Strengths We believe that the following competitive strengths have been instrumental to our success and position us for future growth: North American Leader in Turnkey Modular Space and Portable Storage Solutions The Mobile Mini Merger brought together WillScot’s leading modular space capabilities and Mobile Mini’s leading portable storage solutions to create an industry-leading business services provider specializing in innovative flexible work space and portable storage solutions. We benefit from complementary capabilities, a diverse customer base with over 85,000 customers across different end markets, and a geographic footprint of approximately 275 branch locations and additional drop lots. Our broad and complementary network serves the largest North American metropolitan areas with local teams who are experts in their respective markets. Our cost‑effective coverage model serves smaller customers at the local and regional level, while also addressing the needs of larger national customers looking for a full suite of high-quality services that can be provided on a consistent basis throughout North America. Since geographic proximity to customers is a competitive advantage in the modular space and portable storage industry, we believe that our extensive branch network allows us to better serve existing customers and attract new customers. 9 We believe our extensive scale results in significant operational benefits, such as optimization of fleet yield and utilization, efficient capital allocation, superior service capabilities, and the ability to offer consistent "Ready to Work" solutions across all of our branch locations. VAPS We deliver "Ready to Work" solutions through our growing offering of VAPS, such as the rental of steps, ramps, furniture packages, damage waivers, and other amenities. This thoughtfully curated portfolio of VAPS makes modular space and portable storage units more productive, comfortable, and secure for our customers and allows us to generate higher revenue per transaction and return on capital, and differentiates us from our competitors. These turnkey solutions offer customers flexible, low‑cost, capital efficient, and timely solutions to meet their space needs on an outsourced basis. VAPS have been a substantial source of revenue growth in our NA Modular segment. We have been able to successfully drive a material increase in customer VAPS spend into our recently acquired businesses, which generates highly tangible revenue synergies. We believe our ability to drive VAPS growth following our historical acquisitions highlights the value proposition our VAPS provide to our customers. During 2021, we introduced a similar cross-selling opportunity within ground level offices in the NA Storage segment. We are also introducing an innovative "Ready to Work" storage solution with VAPS such as integral tool racking, storage desks and charging stations, shelving, lighting and locks. Sophisticated Logistics and Service Capabilities Building from the largest branch network in the industry, we operate a sophisticated hybrid in-house and outsourced logistics and service infrastructure that we believe is highly differentiated from our competitors and enhances the value proposition we provide to customers. Precise scheduling of installations and removals, same-day delivery capabilities on certain products, and ability to mobilize large volumes of equipment in any geography serviced by our branch network are all unique capabilities that differentiate WillScot Mobile Mini, particularly among more demanding customer segments. We believe that continuing to further optimize our logistics and service capabilities through the deployment of technology and in-sourcing our services is an opportunity for further cost efficiency and differentiation with our customers. Investments in Technology We believe our technology serves as a primary differentiator relative to our competition and is a key component of our customer value proposition. Initiatives underway to further leverage our state of the art SAP enterprise resource planning platform will result in further operating efficiencies and enhance the overall customer experience. Effective use of real‑time information allows us to monitor and optimize the utilization of our fleet, allocate our fleet to the highest demand markets, optimize pricing, and determine the best allocation of our capital to invest in fleet and branches. We are able to dynamically price and approach customer accounts in a strategic and statistically informed manner. We also believe our ability to leverage this data helps us to increase our market share and effectively manage supply and demand dynamics in our fleet in order to maximize cash flow in all phases of the economic cycle, including identifying opportunities where underutilized lease fleet can be sold to generate cash. Similarly, technology is continuing to develop related to our fleet to offer an enhanced experience for our customers. Unit tracking, customer service portals, and other customer‑facing technological benefits differentiate our offering from competitors who have not invested in these capabilities. We believe we possess superior technology infrastructure relative to our competition and we intend to extend this advantage further by leveraging our infrastructure investments. Diversified Revenue Base by End Market, Product, Service and Geography We have established strong relationships with a diverse customer base, ranging from large national accounts to small local businesses. Our customers operate in a diversified set of end markets, including commercial and industrial, construction, education, energy and natural resources, government, and other end markets. For the year ended December 31, 2021, the top 50 customers for WillScot Mobile Mini accounted for less than 13% of total revenues. We believe that the diversity of our customer end markets reduces our exposure to changes related to a given customer, shifts within an industry or geographic region, and end market industry seasonality, while also providing significant opportunities to grow our business. Furthermore, the nature of our products is such that their use is generally agnostic to industry. This flexibility insulates utilization from exposure to industry‑specific shocks, provided there are other needs and applications for these products within a reasonable distance. Accordingly, our business has been able to support front‑line workers and other essential businesses during the COVID‑19 crisis by providing temporary testing sites, treatment centers, exam rooms, hospital swing space, temperature screening checkpoints, office space to support social distancing, and storage for related supplies. 10 The following chart illustrates the breakdown of our customers and revenue by end markets as of December 31, 2021. In order to optimize the use of fleet assets across our branch network, we centrally manage fleet rebalancing across our end markets. This allows us to serve 15 distinct end markets in which no customer accounted for more than 2% of revenue for the year ended December 31, 2021. REVENUE MIX BY END MARKET CUSTOMER CONCENTRATION Proven Track Record Realizing Acquisition Synergies and Deploying Best Practices We have a strong track record of integrations generating significant synergies with our acquisitions of Mobile Mini, Modular Space Holdings, Inc. ("ModSpace"), Onsite Space LLC ("Tyson"), and Acton Mobile Holdings LLC ("Acton"). During the year ended December 31, 2021, the Company acquired certain assets and liabilities of seven regional modular space and storage businesses and quickly integrated these assets into our leasing portfolio and branch network. Opportunities such as these allow us to reach new customers, expand our product and service offering, and provide further opportunities for revenue and cost synergies. See “Risk Factors—We may be unable to successfully acquire and integrate new operations, which could cause our business to suffer." Our Asset Base Provides Highly Attractive Asset-Level Returns with Long Useful Lives The combination of long, predictable lease durations, long asset lives, and attractive unit economics underpins the compelling cash generation capability in our business model. As such, we have made significant investments in our lease fleet and consolidated several competitors. For the year ended December 31, 2021, our modular space and portable storage lease fleet consisted of over 129 million square feet of relocatable space, comprising over 162,000 office units and over 213,000 steel container units. We generate an attractive internal rate of return ("IRR") in our modular space portfolio driven by the long economic life of our fleet, exceeding 20 years on average, inclusive of any capital expenditure ("capex") required to maintain the fleet to its value maximizing earning potential. On average, the IRR for a modular unit, including VAPS, is over 25%. Similarly, portable storage containers are able to generate an IRR of approximately 30%. These units require minimal maintenance capex. The stability of cash flows combined with strong economic returns make both modular space and portable storage containers highly attractive specialty rental asset classes, and our logistics and service capabilities and investments in technology further enhance the returns we can generate from these assets. 11 The following chart illustrates the breakdown of the net book value ("NBV") of our rental equipment between the various modular space product types, portable storage and VAPS as of December 31, 2021. Our Business Generates Predictable Recurring Cash Flow Due to Our Long-Term Leases and Flexible Capex Requirements Our recurring revenue, combined with our flexible capex requirements and efficient use of working capital has allowed us to generate substantial free cash flow, both in periods of growth and economic downturn. The long term nature of our leases, with average lease durations in excess of 31 months as of December 31, 2021, produces strong operating income and predictable cash flow. We exercise control and discretion over capex, due to the longevity and relative simplicity of our products, the ability to invest only where needed and when needed to meet demand, and the ability to sell excess fleet during lower utilization periods. During periods of economic stress, we have the ability to substantially reduce capex throughout the portfolio in order to maximize cash flow, resulting in a counter‑cyclical free cash flow profile. See discussion of “COVID‑19 impact on business" within our "Recent Developments" section below. Our Industry We primarily operate within the modular space, portable storage, and specialty containment markets. Our services also span across a variety of related sectors, including furniture rental, transportation and logistics, facilities rental services, job site services and commercial real estate. Modular Space Market The modular space market is fragmented. Modular space units are non-residential structures designed to meet federal, provincial, state, and local building codes and, in most cases, are designed to be relocatable. Modular space units are constructed offsite, utilizing manufacturing techniques to prefabricate single or multi-story whole building solutions in deliverable modular sections. Units are typically constructed of steel, wood and conventional building materials and can be permanent or relocatable. The modular space market has evolved in recent years as businesses and other potential customers increasingly recognize the value of modular space. The key growth drivers in this market are similar to portable storage and include: Growing need and demand for space: driven by general economic activity, including gross domestic product growth, industrial production, mining and natural resources activity, non-residential construction, urbanization, public and education spending, and the scale and frequency of special events. Shift from traditional fixed, on-site built space to modular space solutions: driven by several advantages as compared with fixed, on-site built space, including: • Quick to install: the pre-fabrication of modular space units allows them to be put in place rapidly, providing potential long-term solutions to needs that may have materialized quickly. • Flexibility: flexible assembly design allows modular space units to be built to suit a customer’s needs while offering customers the ability to adjust their space as their needs change. • Cost effectiveness: modular space units provide a cost-effective solution for temporary and permanent space requirements and allow customers to improve returns on capital in their core business. 12 • Quality: the pre-fabrication of modular space units is based on a repeatable process in a controlled environment, resulting in more consistent quality. • Mobility: modular space units can easily be disassembled, transported to a new location and re-assembled. • Environmentally friendly: relocatable buildings promote the reuse of facilities, on an as-needed basis, by the occupants. Portable Storage Market The portable storage market, like the modular space market, is highly fragmented and remains primarily local in nature. Portable storage units are typically ground‑level entry, windowless storage containers made of heavy exterior metals for secure storage and water tightness. Portable storage units can be built to specification or can be remanufactured from existing storage products, such as ISO shipping containers. Remanufacturing typically involves cleaning, removing rust and dents, repairing floors and sidewalls, painting, and adding company logos or signs as well as our patented Tri‑Cam Locking System®. Portable storage units continue to find new applications as business needs change and develop. Demand for portable storage is driven by a number of factors, including: • Versatility: portable storage units can be easily customized to suit customer specifications. While standard applications include locking double‑door systems to facilitate loading. However, custom entrances, such as rolling or sliding doors, can be added for personnel access. • Affordability: portable storage provides customers with a flexible and low‑cost storage alternative to permanent warehouse space and fixed‑site self‑storage. • Safety: units can be easily outfitted with fire and water‑resistant surfaces and materials. ISO containers are often wind and leak‑proof by virtue of their uses in logistics and shipping. Nearly all units are made from steel, which is a low‑cost, durable material. • Security: a variety of enhanced locking mechanisms are available for portable storage units, including our patented Tri‑Cam Locking System® and ContainerGuardLock®. These features offer additional protection for high‑value goods and inventory. • Convenience: portable storage units provide immediate ground‑level access for consumers and can be easily transported in large quantities via truck, rail, or cargo ship. • Aesthetics: portable storage units can be easily painted and decorated with company colors and logos and are less conspicuous than other portable storage alternatives. Specialty Containment Market This market is served by our Tank and Pump Solutions business. In the specialty containment sector, we service different markets: the industrial market, comprised mainly of chemical facilities and refineries, also known as the “downstream” market and, to a lesser extent, companies engaged in the exploration and production of oil and natural gas, or the “upstream” market. Additionally, we serve a diversified group of customers engaged in projects in the construction, pipeline, and mining markets. Downstream customers utilize tank and pump equipment and services to manage and remove liquid and solid waste generated by ongoing operating activities as well as turn‑around projects and large‑scale expansion projects. Upstream customers, who we estimate represent approximately 2% of tank and pump revenues for the year ended December 31, 2021, tend to rent steel tanks to store and transport water and propellant used in well hydraulic fracturing. Other customers utilize a wide variety of our products differentiated by the type of project in which they are engaged. Other Related Markets In the normal course of providing our “Ready to Work” solutions, we perform services that are characteristic of activities in other industries. For example, we coordinate a broad network of third-party and in-house transportation and service resources to support the timely movement of our products to, as well as maintenance on, customer sites. Additionally, we design, source, lease, and maintain a broad offering of ancillary products, including furniture, which render our modular units immediately functional in support of our customers’ needs. We have developed networks of third‑party service providers that we coordinate to expand the breadth of capabilities that our customers can source through us. These third‑party‑managed services represent incremental revenue and margin opportunities for us and simplify the number of vendor touchpoints for our customers. We also provide technical expertise and oversight for customers regarding building design and permitting, site preparation, and expansion or contraction of installed space based on changes in project requirements. Further, we have the capability to compete in adjacent markets, such as commercial and institutional housing, which have received less focus historically in the modular space market. We believe that this broad service capability differentiates us from other rental and business services providers and clearly differentiates us in the marketplace. Competition Although our competition varies significantly by local market, the modular space and portable storage industry is highly competitive and fragmented as a whole. We believe that participants in our industry compete on the basis of customer 13 relationships, product quality and availability, delivery speed, VAPS and service capabilities, pricing, and overall ease of doing business. We typically compete with one or more local providers in all of our markets, as well as with a limited number of national and regional companies. Our competitors include lessors of storage units, mobile offices, van trailers, and other structures used for portable storage, as well as traditional commercial office space and conventional fixed self-storage facilities. Some of our competitors may have greater market share in certain geographic regions. Significant modular space and portable storage competitors include McGrath RentCorp, PODS, United Rentals, ATCO Structures & Logistics, BOXX Modular, and 1-800-PACK-RAT in North America, and Wernick Hire and Elliott in the UK. Numerous other regional and local companies compete in individual markets. Our Tank and Pump Solutions business offers liquid and solid containment products. The liquid and solid containment industry is also highly fragmented, consisting principally of local providers, with a handful of regional and national providers. We compete based on factors including quality and breadth of equipment, technical applications expertise, knowledgeable and experienced sales and service personnel, on‑time delivery and proactive logistics management, geographic areas serviced, rental rates, and customer service. Our competitors include United Rentals, Rain For Rent, Adler Tanks, Sprint/Republic Services, and numerous other smaller competitors. Our Business and Growth Strategies We intend to maintain a leading market position and increase our revenue and profitability by pursuing the following strategies, all of which we have demonstrated in our historical operating performance: Expand Penetration of Value-Added Products and Services As of December 31, 2021, we estimate that we have an organic revenue growth opportunity of over $150 million as the average VAPS rate of our units on rent in our NA Modular segment converges over time to the VAPS price and penetration levels achieved on our most recently delivered units. We believe this growth opportunity could be substantially larger if we successfully penetrate more of our modular space orders, and expand our VAPS offering for portable storage units. Optimize Rate Across Fleet We continue to advance multiple pricing strategies across our fleet to drive revenue growth. Leveraging our expertise developed in NA Modular, we plan to implement dynamic pricing, customer segmentation, and contract standardization in our other segments. Our long history of success, demonstrated by 17 consecutive quarters of double-digit rate growth as of December 31, 2021 in the US within our NA Modular segment, gives us confidence that we can successfully deploy this strategy. The turnover of our fleet, with average lease durations of nearly three years, creates natural and recurring opportunities to capture incremental price increases. As the market leader in our industry, we offer the broadest fleet portfolio, the most differentiated turnkey VAPS, and the most consistent service capabilities across the largest branch network to help our customers be 'Ready to Work'. Enhance Market Penetration Between Segments The combination of WillScot and Mobile Mini created a leading business services provider specializing in innovative flexible work space and portable storage solutions. At the outset of the Merger, we recognized that there was 80% end-market overlap and 40% customer overlap, a clear strategic opportunity for our complementary product lines. By offering a combined product suite, we simplify our customers' procurement needs and enable productivity from start to finish for projects. We believe cross-selling will also increase utilization and yield of our combined fleet. Our sales force is optimally positioned to improve efficiency by leveraging our management information systems and using real-time information to monitor and optimize conversion of customer opportunities across our core segments. In turn, we expect that our broadened and enhanced fleet will attract new customers, increase customer retention, and increase margins and return on invested capital. Generate Cash Flow Through Operational Efficiencies, Cost Reductions, and Technology We are implementing many initiatives designed to improve operations and increase profitability. We continually assess our branch operating footprint, vendor base, and operating structure to maximize revenue generation while minimizing costs. The Merger provides us with increased scale, numerous operational best practices from both the legacy WillScot and legacy Mobile Mini businesses, and a state-of-the-art SAP ERP platform, all of which we believe will significantly improve our operating efficiency over time. We have a proven track record of efficiently integrating acquisitions and quickly eliminating operational redundancies while maintaining acquired customer relationships. Deploy Capital to Strategically Support Organic Growth and Optimize Returns We maintain a disciplined focus on our return on capital and invest opportunistically across multiple uniquely attractive asset classes, prioritizing our investments to where we see the strongest potential returns. We continually assess both our existing lease fleet and customer demand for opportunities to deploy capital more efficiently. We manage our maintenance capex and growth capex to align with the economic conditions in which we operate. Within our existing lease fleet, we examine the potential cash and earnings generation of an asset sale versus continuing to lease the asset. In addition, we examine the relative benefits of organic expansion opportunities versus expansion through acquisition to obtain a favorable return on capital. 14 Leverage Scale and Organic Initiatives with Accretive Acquisitions Our markets for modular space and portable storage solutions are fragmented. We estimate that approximately 55% of the modular market and approximately 70% of the portable storage market in North America are supplied by regional and local competitors. We have the broadest network of operating branches in North America, as well as a scalable corporate center and information technology systems, which position us to continue to acquire and integrate other companies while expanding the products and services available and offered to acquired customers. During 2021, the Company acquired certain assets and liabilities of several smaller entities, which consisted primarily of 15,700 storage units and 5,800 modular units. We expect to pursue acquisitions opportunistically that will provide further scale efficiencies and allow us to improve returns generated by the acquired assets. Use Free Cash Flow to Drive Value Creation Our free cash flow generation has accelerated rapidly in recent years, and we expect this trend to continue as we execute our strategy. While we see numerous organic and inorganic opportunities to re-invest in our core businesses, we believe we can generate surplus free cash flow with which we can both reduce leverage and return capital to shareholders over time. We view this as an additional powerful value creation lever, and we are committed to deploying this capital as productively as possible in the interests of our shareholders. Human Capital Management As of December 31, 2021, we employed approximately 4,700 people worldwide, the majority of which are full time. Of these employees, approximately 4,320 are employed in North America (the US, Canada and Mexico), and approximately 380 are employed in the UK. We have collective bargaining agreements in portions of our Mexico-based operations representing approximately 1% of our worldwide employees. Approximately 87% of employees work in our approximately 275 branch locations and additional drop lots, while 13% of employees serve in various corporate functions. We have not experienced a strike or significant work stoppage, and we consider our relations with the labor unions and employees to be good. Our Chief Human Resources Officer ("CHRO") along with other members of our executive leadership team, and with guidance from our board of directors, develops and executes our human capital strategy. This includes attracting, hiring, developing, retaining and engaging talent to deliver our strategy, designing employee compensation and benefits programs, and developing and integrating our inclusion and diversity ("I&D") initiatives. Whether at a branch location or onsite with our customer s, our people give us a competitive advantage versus our peers and competitors in the industry. That differentiation begins with o ur values. Our values are lived through our employees, acknowledged by our vendors and aligned to the needs of our customers and communities. Our values provide the basis for our approach to human capital management as well as how we treat our stakeholders. Company Values • Dedicated to Health & Safety: We are subject to certain environmental, health and safety regulations as well as other laws and regulations in countries, states or provinces, and localities in which we operate. Our health and safety programs are designed around global standards with appropriate variations addressing the multiple jurisdictions and regulations, specific hazards and unique working environments of our operations. We take responsibility for our own well being and for those around us. • Committed to Inclusion & Diversity: We are stronger together when we celebrate our differences and strive for inclusiveness. We believe that a rich culture of inclusion and diversity enables us to create, develop and fully leverage the strengths of our workforce to exceed customer expectations and meet our growth objectives. We encourage collaboration and support the diverse voices and thoughts of our employees and communities. • Driven to Excellence: We measure success through our results and achievement of our goals. We continuously improve ourselves and our products and services in pursuit of maximizing shareholder value. • Trustworthy & Reliable: We hold ourselves accountable to do the right thing. • Devoted to Our Customers: We anticipate the growing needs of our customers and strive to exceed their expectations and make it easy to do business with us. • Community Focused: We actively engage in the communities we serve and deliver sustainable solutions. Elements of Our Human Capital Strategy The disruption in the labor force in 2020 continued into 2021. Many of our industry competitors have met these changes with little more than short-term compensation increases. We have taken a more holistic approach designed to meet our employees where they are at any stage within their lives. Our employee value proposition is simple: every day our employees deliver excellent service to our customers, and we are committed to delivering an employee experience that creates opportunity and ensures dignity for every employee. Our involuntary turn over remains manageable at 23%, and the average tenure of our drivers remains strong at five years, during a period where demand for drivers is increasingly high. We believe that our strategy with the cornerstones of opportunity and personal dignity gives us an advantage over other companies. Our offerings are designed to benefit employees and their families, and we continue to develop best in class programs and services that are aligned to deliver 15 targeted business outcomes that best fuel our growth trajectory. Through our acquisitions, we believe that we have extended these benefits to a broader employee population while raising the operating standards in our industry. The following highlights a few of our programs. Employee Engagement We are committed to keeping our employees informed and engaged in Company news and events, while helping them connect to our strategy and values. We share information through a range of channels including direct email and text capabilities, an employee intranet, televisions in our branches and quarterly all-employee town halls. We actively engage with our employees in topics that impact their experiences at work. We work with an outside vendor to administer an annual employee engagement survey along with regular pulse surveys to give our teams an active voice on topics that impact them directly. Their feedback is leveraged to shape policies, processes and other aspects of our workplace. Learning and Development Human capital development underpins our efforts to execute our strategy and continue to develop our people, products and services. We continually invest in our employees’ career growth and provide all employees with a wide range of personal and professional development experiences, both formal and informal, for all stages of their career journey. Our formal offerings include tuition reimbursement, a diverse curriculum of over 6,000 learning courses, vocational training, and leadership development experiences. We have organized a proprietary foundational leadership development program, which combines skill building with an opportunity to put skills into practice. Since 2015, over 500 of our team members have participated in this program. In 2019, we partnered with a leading graduate business school to launch a targeted executive education program. And in 2021, we launched our new driver apprentice program to provide development opportunities to employees interested in becoming a Commercial Driver's License ("CDL") Class A driver for the Company. This new program also created internal development opportunity for current employees to become trainers. Continual learning and career development is advanced through our in-depth succession planning process where we look across the organization to ensure diversity and inclusion are at the forefront of our human capital management. We then transition into goal planning and development conversations with employees that are supported by our library of personal and professional development courses, customized training engagements and seminars, conferences, and other training events where employees are encouraged to attend in connection with their job duties and developmental goals. Inclusion and Diversity We encourage and empower the diverse voices and contributions of our stakeholders to drive increased market share and global value. In 2021, we established and held the first meeting of our Inclusion & Diversity Council and launched five Inclusiveness Resource Teams ("IRTs"): Women of WSMM ("WOW"), Black Organization for Leadership & Direction ("BOLD"), Veterans United, Hispanos, and People Respecting that Identity and Sexuality Matters ("PRISM"). IRTs are voluntary, employee-led groups that foster an inclusive and diverse workplace aligned with our values and strategy. These groups were established to support our employees and provide opportunities for exposure, development and contribution to the organization. The tone for I&D in our Company starts at the top with our executives and is bolstered with support from our board of directors. The Inclusion & Diversity Council is a cross-functional team of leaders, including our CEO, CHRO, and divisional senior vice presidents, that acts as a steering committee to help guide our I&D efforts globally. We expect to achieve the Company’s aspirations by (i) having regular board oversight of the Company’s I&D efforts, and (ii) improving I&D initiatives throughout the complete lifecycle of employee engagement (from recruitment, through development and advancement). We have trained hundreds of leaders in our organization on unconscious bias and provided I&D e-learning opportunities to our employees. Our CEO and CFO have I&D metrics as part of their compensation and performance targets. Rewards, Health & Well Being We crafted our total rewards strategy with a strategic focus on the health and well being of our employees. We do this, in part, by ensuring competitive pay at every level of the organization. We employ human capital consultant data to set and maintain pay ranges and pay levels across the organization. Incentives are designed to reward eligible employees commensurate with Company performance. Depending on the position, incentives may be either individually based (sales commissions), group-based (regional performance bonuses), or Company-based (corporate and executive employees). Executive compensation is reviewed and analyzed via an independent third-party consultant and approved by the compensation committee of our board of directors. The consultant takes peer group data and general market data into account, when providing pay guidance, to ensure executive pay is both competitive and reasonable, based on the prevailing market standards. Our approach to our benefits begins with a centralized focus on the employee. We use high deductible healthcare plans to promote positive consumer behaviors and pay approximately 70% of the cost of the employee premiums. We mitigate the burden to the employee from these plans by seeding their health savings accounts (“HSA”) at the beginning of each year, covering between 35% and 50% of employee deductibles. We also provide a biometric screening incentive in the form of an additional HSA contribution. HSA incentives are used to promote behaviors as needed, such as compliance with federal, state and local COVID-19 requirements and guidance. We have an employee assistance program to provide counseling sessions for every employee as they are needed. 16 Wellness does not end with physical and mental health. We also offer several ways for our employees to feel prepared financially. Along with our 401(k) matching, we offer several educational services employees can use to strengthen their financial acumen. Additionally, we provide short-term disability pay at 100% of annualized wages for approved cases, and support can last up to 26 weeks. We offer paid parental leave for those employees who expand their families, as well. Regardless of the hurdles our employees face we are prepared to support them through their major life events and times of need. Our employees are doing their part to support each other as well. The Minions of Kindness Fund is an employee-led 501(c)(3) organization that uses employee donations to support WillScot Mobile Mini employees in times of distress. Our Approach to Environmental, Social and Governance We are committed to upholding high standards when it comes to our environmental, social and governance ("ESG") responsibilities, as well as the safety of our employees and our business partners. The principal products we provide to our customers are long-lived, reusable and relocatable assets that produce minimal waste. For decades, we have committed ourselves to circular economic practices to reuse as many of the assets as possible. Our board of directors, at the direction of its nominating and corporate governance committee, is actively involved in the development of our ESG strategy and approach. Over the next several years, we will focus on numerous goals in the areas of ESG: Focus Areas • Environmental - Our commitment to environmentally sound business practices includes three key areas of focus: ◦ reducing greenhouse gas emissions as part of our operations; ◦ reducing the amount of waste we deliver to landfills; and ◦ improving the energy efficiency of our products. • Social - We are committed to socially responsible business practices throughout our operations. We have focused especially on improving diversity, equity, and inclusion throughout our organization, and on improving the communities in which we work. Our five areas of focus in this regard are to: ◦ improve inclusion and diversity across the organization (as described above); ◦ focus on community partnering across all of our locations; ◦ remain diligent in placing safety first, always; ◦ improve health and wellness opportunities for all our employees (as described above); and ◦ improve customer engagement and relations. • Governance ◦ Continue to align our corporate governance structure with our ESG strategy ◦ Improve the diversity of our Board and management In the near term, we are pursuing the following five key strategic initiatives to drive increased benefits for our stakeholders. • Materials: Reduce, reuse, recycle with our modular and storage units and VAPS • Climate: Reducing greenhouse gas emissions from our owned trucking and yard fleet • Health & Safety: Health & Safety First at our branches, on the road and at our customer sites • Inclusion: Ensuring every employee has the opportunity to thrive and seek upward mobility • Community: Leveraging our scale to lift up all 275+ of our communities and amplify our impact Environmental Circular Business Model (Materials) We lease commercial grade office and storage units that are designed to be reused, relocated and reconfigured and have refurbishment capabilities for our office units. These assets are cycled to different customers seven times over their 20-year lifetime with a minimal refresh or get ready before each new cycle. We then layer on refurbishment, which can extend the asset life by another 10 years. With the cost of refurbishment at only 20-30% of the cost of a new unit, it’s more capital efficient to refurbish our units and it extends the life significantly. Our newest office space, called FLEX, is a panelized product which means that the panels, or walls, can be reconfigured and reused, thus eliminating wood waste. We also have modernization facilities to put our storage assets, which we acquire used, into service as a storage unit. Value Added Products (“VAPs”) adds another dimension to our circular story because we are able to reuse, repair, and maintain VAPs that come off rent, which helps drive better margins and growth. In addition, putting VAPs into our circular business model significantly reduces material usage both for us and for our customers, who otherwise buy and dispose of their VAPs at the end of the project. 17 Circular by design, our lease and renew business model helps us to reduce material usage, emissions and costs, while helping our customers with their ESG goals. GHG Emissions (Climate) Compared to other industrial companies, our greenhouse gas footprint and risk is small, but we can still produce positive impacts that directly align with cost efficiency and customer benefits. To reduce greenhouse gas emissions and other air quality impacts from our diesel-fueled delivery and setup fleet, we have begun replacing older diesel truck engines with modern, efficient engines, and are working to test delivery trucks fueled by renewable natural gas. Over time, these efforts will help to reduce our fuel costs and risks, while also helping us secure contracts with like-minded customers. Social Safety Protection of people and the environment is a core value at WillScot Mobile Mini. It is a key component of our Sales, People and Operational Excellence priorities. These priorities are the driving force that shapes who we are and what we do. WillScot Mobile Mini fosters an environment in which our employees feel empowered and choose to make the safest and best decisions possible. Safety extends beyond our branches and yards and includes travel on roads and highways and our activities at customer sites. Today, we are operating at high levels of safety and low levels of injury. Our Total Recordable Incident Rate (“TRIR”) is 0.82 incidents per labor hour, compared to the 2.5 incidents per labor hour rate for the construction industry as reported by the Bureau of Labor Statistics. We are using technology to assist our drivers and other team members in the safety arena. In 2020, we created an assessment tool, our “Safety Save” application, that tracks leadership safety engagement and measures the number of safety engagements as our team members complete them. Any employee is encouraged to complete a safety assessment on an observation of a task, tool, behavior or other condition during working duties. Use of the Safety Save application is just one manner we use to manage safety leadership at all levels. Further, we use and are expanding a vehicle/truck-based camera system used to improve driving behaviors. Lastly, we maintain a safety assessment program that drives increased focus to our Health & Safety core value, by providing increased visibility. Our goal is to help each team member succeed and enjoy a safe working experience. We know no business can exist without people. Who we are as people ultimately defines what we are as a business, and safety is everyone’s responsibility. COVID-19 Safety Protocols We remain dedicated to protecting the health and safety of our employees and customers and have adjusted our business to meet various country, state, and local requirements. We are considered an “essential business” and our employees are considered “essential workers.” We have continued to service our customers throughout the pandemic, while implementing robust health and safety protocols to protect our visitors, employees and customers. We follow US Centers for Disease Control and Prevention, OSHA and/or applicable country, state and local guidelines at the locations where we operate. To comply with public health guidance and reduce the risk of COVID-19 transmission, unvaccinated visitors, customers and employees are required, prior to commencing work at our facilities and offices each day, to check their temperature and complete a daily symptom certification that is documented and reviewed by our COVID team members. We provide masks and hand sanitizer to our visitors, customers, and employees, as well as require adherence to appropriate social distancing practices. We have also enhanced cleaning/sanitization protocols at our locations. COVID-19 testing for employees is covered by our health insurance and we actively track key COVID metrics. Additionally, we are providing an incentive to our employees that choose to get vaccinated, as well as paid time off for vaccination and any side effects. We also meet all client requirements for site access or general compliance with their required COVID protocols. We remain flexible to the situation, and keep our employees informed of the current best guidance, as provided by professionals and experts. Community Community engagement is at the heart of our business. Due to our scale, we bring new engagement opportunities to our entire workforce in two ways. We recently launched our giving platform called "Give Where You Live" where employees can partner with the local charity of their choice across all 275 of our locations in the way that is most meaningful to them. We encourage our employees to give their time, talent and/or treasure locally to our core four causes of Shelter, Hunger, Education, and Health & Wellness. We have expanded our existing Company match program and have created a volunteer rewards program to encourage increased volunteerism globally. Our IRTs support our community-focused values through volunteer opportunities that are meaningful to the populations that they represent. We also have Company-wide partnerships like Habitat for Humanity, where we are able to provide giving opportunities in the normal course of business, like the temporary use of our storage containers at Habitat build sites. We know that when we give where we live, we can make a difference. 18 Governance Good governance enables everything we do. After the WillScot Mobile Mini merger, our combined board of directors created a roadmap to transition the company’s governance practices. We modified our charter to establish an ESG initiative, and to provide oversight for that initiative. Our audit committee and enterprise risk management committee each review the board of directors’ and the Company’s activities to assess risks and develop plans to mitigate those risks. These committees consider a variety of potential risks that may affect the Company over the next three years, including climate change, truck fleet emissions, labor law changes, diversity, and zoning laws. Intellectual Property We operate primarily under the WillScot and Mobile Mini brands. We protect our products and services through the use of trademarks and patents, none of which are individually material to our business. Our trademarks and patents are registered or pending applications for registrations in the US Patent and Trademark Office and various non‑US jurisdictions. On our Modular fleet, we maintain a patent for the design of our Flex units in the US and other patents in the US and non-US jurisdictions concerning various assembly and panel components. We believe that Flex represents innovative and versatile purpose built modular space solutions in the industry, which has helped us expand commercially into new end markets. On our Storage fleet, we have patented our proprietary Tri‑Cam Locking System®, ContainerGuardLock® and other continued improvements in locking technology in the markets in which we operate, as well as in Europe and China. We believe that continued innovation differentiates WillScot Mobile Mini with our customers and represents a source of long-term competitive advantage. Significant Developments Mobile Mini Merger On July 1, 2020, we closed the Merger at which time Mobile Mini became a wholly-owned subsidiary of WillScot. Concurrent with the closing of the Merger, we changed our name to WillScot Mobile Mini Holdings Corp. We believe that the Merger is resulting in strategic and financial benefits by combining the two industry leaders in the complementary modular space and portable storage solutions markets. During the second quarter of 2021, we executed the successful integration of the two companies' enterprise resource planning ("ERP") operating and financial systems. Reportable Segments We operate in four reportable segments as follows: North America Modular Solutions ("NA Modular"), North America Storage Solutions ("NA Storage"), United Kingdom Storage Solutions ("UK Storage") and Tank and Pump Solutions ("Tank and Pump"). The reporting segments are aligned with how we operate and analyze our business results. Prior to the third quarter of 2021, the NA Modular segment represented the activities of WillScot historical segments prior to the Merger, and the NA Storage, UK Storage and Tank and Pump segments represented the segments reported by Mobile Mini prior to the Merger. During the third quarter of 2021, the majority of the portable storage product business within the NA Modular segment was transitioned to the NA Storage segment, and associated revenues, expenses, and operating metrics were transferred to the NA Storage segment beginning in the third quarter of 2021. Asset Acquisitions During the third and fourth quarters of 2021, we acquired the assets and liabilities of seven regional storage and modular companies, which consisted primarily of 15,700 storage units and 5,800 modular units for $ 147.2 million in cash. We recorded rental equipment of $ 142.1 million as a result of these acquisitions. Financing Activities On March 26, 2021, we redeemed $ 65.0 million of our 6.125% senior secured notes due 2025 (the "2025 Secured Notes") at a redemption price of 103.0%, plus accrued and unpaid interest. This repayment was funded by internally generated cash flow and lower cost borrowings under the ABL Credit Agreement, dated July 1, 2020, by and among Williams Scotsman Holdings Corp. (“Holdings”), Williams Scotsman International, Inc. (“WSII”), the guarantors party thereto, the lenders party thereto, and Bank of America, N.A., as administrative agent and collateral agent (as amended from time to time, the “2020 ABL Facility”). Upon redemption in the first quarter of 2021, we recorded a loss on extinguishment of debt in the consolidated statement of operations of $ 3.2 million comprised of a redemption premium of $ 1.9 million and write off of unamortized deferred financing fees of $ 1.3 million. On June 16, 2021, we redeemed an additional $ 58.5 million of our 2025 Secured Notes at a redemption price of 103.0%, plus accrued and unpaid interest. This repayment was funded by internally generated cash flow and lower cost borrowings under the 2020 ABL Facility. Upon redemption in the second quarter of 2021, we recorded a loss on extinguishment of debt in the consolidated statement of operations of $ 2.8 million comprised of a redemption premium of $ 1.8 million and write off of unamortized deferred financing fees of $ 1.0 million. Share and Warrant Repurchases On March 1, 2021, in connection with an underwritten secondary offering of shares of our Common Stock offered by Sapphire Holding S.à r.l. (“Sapphire Holdings”), our largest shareholder at that time and an entity controlled by TDR Capital 19 LLP (“TDR Capital”), we repurchased and cancelled 2,750,000 shares of our Common Stock directly from Sapphire Holdings for $73.7 million at a per share price equal to the per share price paid by the underwriters in the concurrent offering. On June 29, 2021, in connection with a second underwritten secondary offering of shares of our Common Stock offered by Sapphire Holdings, we repurchased and cancelled an additional 3,900,000 shares of our Common Stock directly from Sapphire Holdings for $108.2 million at a per share price equal to the per share price paid by the underwriters in the concurrent offering. On September 9, 2021, in connection with a third underwritten secondary offering of shares of our Common Stock offered by Sapphire Holdings, we repurchased and cancelled an additional 2,379,839 shares of our Common Stock directly from Sapphire Holdings for $67.1 million at a per share price equal to the per share price paid by the underwriters in the concurrent offering. During the year ended December 31, 2021, we repurchased and cancelled 3,055,000 of the 2015 Private Warrants (as defined below) for $25.5 million. In addition, during the year ended December 31, 2021, 9,655,000 of the 2015 Private Warrants were exercised on a cashless basis, resulting in the issuance of 2,939,898 shares of Common Stock. As a result of these transactions, no 2015 Private Warrants were outstanding as of December 31, 2021. During the year ended December 31, 2021, we repurchased and cancelled 254,373 of the 2018 Warrants for $ 2.9 million. In addition, during the year ended December 31, 2021, 5,397,695 of the 2018 Warrants were exercised on a cashless basis, resulting in the issuance of 2,835,968 shares of Common Stock. At December 31, 2021, 4,078,173 of the 2018 Warrants were outstanding. During the year ended December 31, 2021, we repurchased and cancelled 12,878,490 shares of Common Stock and stock equivalents for $ 365.9 million, including the shares repurchased from Sapphire Holdings and all repurchased warrants. In October 2021, our Board of Directors replaced the existing share repurchase program with a new share repurchase program that authorizes us to repurchase up to $ 1.0 billion of our outstanding shares of Common Stock and stock equivalents. As of December 31, 2021, we had $ 956.7 million of the $1.0 billion share repurchase authorization remaining. Given the predictability of our free cash flow, we believe that repurchases will be a reoccurring capital allocation priority. Amendment to 2020 ABL Facility and Supplemental Indentures In connection with an internal tax-related reorganization (the "Reorganization") involving indirect wholly-owned subsidiaries of the Company, on December 23, 2021, WSII merged with and into its direct wholly-owned subsidiary, Williams Scotsman, Inc., a Maryland corporation (“WSI”), with WSI as the surviving entity of such merger. The purpose of the Reorganization was to simplify the Company's legal entity structure following numerous acquisitions and to reduce related franchise taxes and other administrative costs and had no impact on our underlying business operations. In connection with the Reorganization, on December 23, 2021, WSI, the guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee and as collateral agent (in such capacities, the “Trustee”), entered into (i) a Supplemental Indenture (the “2025 Notes Supplemental Indenture”) in relation to that certain Indenture, dated as of June 15, 2020, (as amended, amended and restated, supplemented or otherwise modified from time to time, the “2025 Notes Indenture”), by and among WSII (as successor to Picasso Finance Sub, Inc.), as issuer, the guarantors from time to time party thereto and the Trustee in respect of WSII’s 6.125% Senior Secured Notes due 2025 and (ii) a Supplemental Indenture (the “2028 Notes Supplemental Indenture” and together with the 2025 Notes Supplemental Indenture, the “Supplemental Indentures”) in relation to that certain Indenture, dated as of August 25, 2020, (as amended, amended and restated, supplemented or otherwise modified from time to time, the “2028 Notes Indenture” and together with the 2025 Notes Indenture, the “Indentures”), by and among WSII (as successor to Picasso Finance Sub, Inc.), as issuer, the guarantors from time to time party thereto and the Trustee in respect of WSII’s 4.625% Senior Secured Notes due 2028, pursuant to which WSI assumed all of WSII’s obligations and rights under each Indenture, and the guarantors party to each Supplemental Indenture confirmed their respective guarantees under each Indenture. Prior to its entry into the Supplemental Indentures, WSI was a guarantor under each Indenture and jointly and severally liable for WSII’s obligations under each Indenture. Additionally, in connection with the Reorganization, on December 16, 2021, WSII and certain other subsidiaries of the Company entered into a third amendment (the “Third Amendment”) to the 2020 ABL Facility which, among other things, permits (i) the merger of WSII with and into WSI, and (ii) WSI to assume the duties and obligations of the Administrative Borrower (as defined in the 2020 ABL Facility) under the Loan Documents (as defined in the 2020 ABL Facility) in connection with the Reorganization. Following the Reorganization and the entry into the Supplemental Indentures and the Third Amendment, there is no change to the consolidated operating cash flows of the obligors under the Indentures and the 2020 ABL Facility or the consolidated assets of such obligors pledged as collateral under the Indentures and the 2020 ABL Facility. COVID-19 impact on business Since the outbreak of COVID‑19 was designated as a global pandemic by the World Health Organization (the “WHO”) in March 2020, our operations have generally continued to operate normally with additional safety protocols in place as we have been considered an essential business in most jurisdictions. The global macroeconomic backdrop and impact on our end markets has evolved rapidly since the beginning of 2020. However, overall our lease portfolio and financial results have proven to be durable and consistent despite the severity of the economic contraction in 2020 and the current expansion in 2021. Importantly, because of the long durations of our leases, the majority of our gross profit in any given period is from units already out on rent. This gives us significant visibility into our future cash flows, which allows us to plan ahead and adjust 20 our capital expenditures and cost structure for varying demand levels. Our portfolio of units already out on rent at the onset of the pandemic was resilient and largely not impacted, despite the unprecedented swings in economic activity in 2020. Activity levels in the fourth quarter of 2020 and the first half of 2021 stabilized, and our volume of new lease activations grew significantly in the second quarter of 2021 as economic activity rebounded sharply with modular deliveries across our NA Modular and NA Storage segments up a combined 9% over pro forma 2020 levels and storage product deliveries across these two segments up a combined 39% over pro forma 2020 levels and on par with 2019 pro forma activity levels. This recovery continued in the third quarter of 2021 and for the three months ended September 30, 2021, both modular and storage product deliveries across our NA Modular and NA Storage segments were up a combined 6% over 2020 levels. Economic activity for the three months ended December 31, 2021 remained strong against a more stable fourth quarter of 2020 with storage product deliveries across our NA Modular and NA Storage segments up a combined 6% over 2020 levels and modular product deliveries essentially flat with 2020 levels. Overall, while new lease activation volumes over the past eight quarters were impacted in line with the swings in economic activity, our lease revenue streams were stable and remain on an attractive upward long-term trajectory, a result of the diversification in our end markets, our long lease durations, and the success of the organic growth initiatives that we are executing. Available Information Our website address is www.willscotmobilemini.com. We make available, free of charge through our website, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) as soon as reasonably practicable after such documents are electronically filed with, or furnished to, the United States Securities and Exchange Commission (the “SEC”). The SEC maintains an internet website at www.sec.gov that contains reports, proxy and information statements and other information regarding WillScot Mobile Mini. Regulatory and Environmental Compliance We are subject to certain environmental, transportation, anti-corruption, import control, health and safety, and other laws and regulations in countries, states or provinces, and localities in which we operate. We incur significant costs in our business to comply with these laws and regulations. However, from time to time we may be subject to additional costs and penalties as a result of non-compliance. The discovery of currently unknown matters or conditions, new laws and regulations, or different enforcement or interpretation of existing laws and regulations could materially harm our business or operations in the future. We are subject to laws and regulations that govern and impose liability for activities that may have adverse environmental effects, including discharges into air and water and handling and disposal of hazardous substances and waste. As of the date of this filing, no environmental matter has been material to our operations. Based on our management’s assessment, we believe that any environmental matters relating to us of which we are currently aware will not be material to our overall business or financial condition. The jurisdictions in which we operate are also subject to anti-bribery laws and regulations, such as the US Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”). These regulations prevent companies and their officers, employees, and agents from making payments to officials and public entities of foreign countries to facilitate obtaining new contracts. Violations of these laws and regulations may result in criminal sanctions and significant monetary penalties. Certain of our units are subject to regulation in certain states under motor vehicle and similar registrations and certificate of title statutes. Management believes that the Company has complied, in all material respects, with all motor vehicle registration and similar certificate of title statutes in states where such statutes clearly apply to modular space units. We have not taken actions under such statutes in states where we have determined that such statutes do not apply to modular space units. However, in certain states, the applicability of such statutes to modular space units is not clear beyond doubt. If additional registration and related requirements are deemed to be necessary in such states or if the laws in such states or other states were to change to require us to comply with such requirements, we could be subject to additional costs, fees, and taxes as well as administrative burdens in order to comply with such statutes and requirements. Management does not believe that the effect of such compliance will be material to our business or financial condition. 21 ITEM 1A. Risk Factors Risks Relating to Our Business We may be unable to successfully acquire and integrate new operations, which could cause our business to suffer. We have historically achieved a significant portion of our growth through acquisitions, and we will continue to consider potential acquisitions on a selective basis. There can be no assurance that we will be able to identify suitable acquisition opportunities in the future or that we will be able to consummate any such transactions on terms and conditions acceptable to us. Additionally, we cannot predict if or when acquisitions will be completed, and we may face significant competition for acquisition targets. Acquisitions involve numerous risks, including (a) difficulties in integrating the operations, technologies, management information systems, products and personnel of the acquired companies; (b) diversion of management’s attention from normal daily operations of the business; (c) loss of key employees; (d) difficulties in entering markets in which we have no or limited prior experience and where our competitors in such markets have stronger market positions; (e) difficulties in complying with regulations, such as antitrust and environmental regulations, and managing risks related to an acquired business; (f) an inability to timely obtain financing, including any amendments required to existing financing agreements; (g) an inability to implement uniform standards, controls, procedures and policies; (h) undiscovered and unknown problems, defects, liabilities or other issues related to any acquisition that become known to us only after the acquisition, particularly relating to rental equipment on lease that are unavailable for inspection during the diligence process; and (i) loss of key customers or suppliers. In connection with acquisitions, we may assume liabilities or acquire damaged assets, some of which may be unknown to us at the time of such acquisitions. We assess the condition and regulatory certification of an acquired fleet as part of our acquisition due diligence. In some cases, fleet condition or regulatory certification may be difficult to determine due to the fleet being on lease at the time of acquisition and/or inadequate certification records. Fleet acquisitions may therefore result in a rectification cost that we may not have factored into the acquisition price, impacting our ability to deploy units and the profitability of the fleet we acquired. We must continue to take actions to realize the combined cost synergies that we forecast for the acquisition. We may incur more costs than we anticipated to achieve the forecast synergies (thus reducing the net benefit of the cost synergies), realize synergies later than we expected or fail altogether to achieve a portion of the cost savings we anticipated. Any of these events could cause reductions in our earnings per share, impact our ability to borrow funds under our credit facility, decrease or delay the accretive effect of the acquisitions that we anticipated and negatively impact our stock price. Acquisitions are inherently risky, and we cannot provide assurance that any future acquisitions will be successful or will not materially adversely affect our business, results of operations and financial condition. If we do not manage new markets effectively, some of our new branches and acquisitions may lose money or fail, and we may have to close unprofitable branches. Closing a branch in such circumstances would likely result in additional expenses that would cause our operating results to suffer. To manage growth successfully, we will need to continue to identify additional qualified managers and employees to integrate acquisitions within our established operating, financial and other internal procedures and controls. The efficient integration of any acquired operations will also require the integration of technology infrastructure systems and a transition to new systems when required. An inability to integrate these systems following an acquisition, or an inability to scale our existing infrastructure or systems to support such acquired operations, might impact our ability to respond effectively to changing customer expectations, manage our business, scale our solutions effectively or impact our customer service levels, which could put us at a competitive disadvantage and negatively impact our financial results. We will also need to effectively motivate, train and manage our employees. Failure to successfully integrate recent and future acquisitions and new branches into existing operations could materially adversely affect our results of operations and financial condition. Global or local economic movements could have a material adverse effect on our business. Our business, which operates in the US, Canada, Mexico and the UK, may be negatively impacted by economic movements or downturns in the local markets in which we operate or global markets generally. These adverse economic conditions may reduce commercial activity, cause disruption and extreme volatility in global financial markets and increase rates of default and bankruptcy. Reduced commercial activity has historically resulted in reduced demand for our products and services. For example, reduced commercial activity in the construction, energy and natural resources sectors in certain markets in which we operate, particularly the US and Canada, has negatively impacted our business in the past. Disruptions in financial markets could negatively impact the ability of our customers to pay their obligations to us in a timely manner and increase our counterparty risk. If economic conditions worsen, we may face reduced demand and an increase, relative to historical levels, in the time it takes to receive customer payments. If we are not able to adjust our business in a timely and effective manner to changing economic conditions, our business, results of operations and financial condition may be materially adversely affected. Moreover, the level of demand for our products and services is sensitive to the level of demand within various sectors, particularly the commercial and industrial, construction, education, energy and natural resources, and government end 22 markets. Each of these sectors is influenced not only by the state of the general global economy, but also by a number of more specific factors as well. For example, a decline in global or local energy prices may materially adversely affect demand for modular buildings within the energy and resources sector. The levels of activity in these sectors and geographic regions may also be cyclical, and we may not be able to predict the timing, extent or duration of the activity cycles in the markets in which we or our key customers operate. A decline or slowed growth in any of these sectors or geographic regions could result in reduced demand for our products and services, which may materially adversely affect our business, results of operations and financial condition. Our operations are exposed to operational, economic, political and regulatory risks. We operate in the US, Canada, Mexico and the UK. For the year ended December 31, 2021, approximately 87.2%, 6.1%, 0.8%, and 5.9% of our revenue was generated in the US, Canada, Mexico and the UK, respectively. For the year ended December 31, 2021, approximately 61.4%, 26.8%, 5.9%, and 5.9% of our revenue was derived from our NA Modular Solutions business, NA Storage Solutions business, UK Storage Solutions business and Tank and Pump Solutions business, respectively. Our operations in any of these countries could be affected by foreign and domestic economic, political and regulatory risks, including (a) regulatory requirements tha t are subject to change and that could restrict our ability to assemble, lease or sell products; (b) inflation, recession, and fluctuations in foreign currency exchange and interest rates; (c) trade protection measures, including increased duties and taxes and import or export licensing requirements; (d) compliance with applicable antitrust and other regulatory rules and regulations relating to potential acquisitions; (e) different local product preferences and product requirements; (f) pressures on management time and attention due to the complexities of overseeing multi-national operations; (g) challenges in maintaining staffing; (h) different labor regulations and the potential impact of collective bargaining; (i) potentially adverse consequences from changes in, or interpretations of, tax laws; (j) potentially adverse consequences from change in, or interpretation of, securities laws and other financial reporting regulations; (k) political and economic instability; (l) enforcement of remedies in various jurisdictions; (m) the risk that the business partners upon whom we depend for technical assistance will not perform as expected; (n) compliance with applicable export control laws and economic sanctions laws and regulations; (o) price controls and ownership regulations; (p) obstacles to the repatriation of earnings and cash; (q ) differences in business practices that may result in violation of Company policies, including, but not limited to, bribery and collusive practices; and (r) reduced protection for intellectual property in some countries. Additionally, any sustained international conflict may have a negative economic or other impact on the markets we serve, our operations and financial results. These a nd other risks may materially adversely affect our business, results of operations and financial condition. Our operations may be adversely impacted by public health crises such as the global pandemic associated with COVID-19. We are subject to risks related to public health crises, such as the global pandemic associated with COVID-19, which could significantly impact general commercial activity related to our supply chain and customer base and which could have a material adverse effect on our business, financial condition, or result of operations. To the extent that the COVID-19 pandemic continues or worsens, or any future public health crisis emerges, governments may impose additional restrictions, including work restrictions, and supply chains may be interrupted, slowed, or rendered inoperable. As a result, it may be challenging to obtain and process raw materials and labor resources necessary to support our business needs. We may need to recognize material charges in future periods for impairments of our rental equipment, property, plant, and equipment and/or intangible assets. Furthermore, our employees, suppliers or customers could become ill, quarantined or otherwise unable to work and/or travel due to health reasons or governmental restrictions. The COVID-19 global pandemic has affected and may continue to affect our industry and the industries in which our customers operate, and there may be an adverse impact on customer demand for our rentals. We also have been, and will be, adversely impacted by project delays, early returns of equipment on rent with customers and payment delay, or non-payment, by customers who are significantly impacted by COVID-19. If our customers’ businesses continue to be affected, they might delay or reduce purchases from or payments to us, which could adversely affect our business, financial condition or results of operations. In addition, increased volatility and diminished expectations for the global economy, coupled with the prospect of decreased business and consumer confidence and increased unemployment resulting from the COVID-19 pandemic or any future public health crises may precipitate an economic slowdown and recession. If the economic climate deteriorates, our ability to continue to grow our business organically or through additional acquisitions and integration of acquired businesses, as well as the financial condition of customers, suppliers and lenders, could be adversely affected, resulting in a negative impact on the business, financial condition, results of operations and cash flows of our Company. The situation surrounding COVID-19 remains fluid. A lack of public acceptance of vaccines could lead people to continue to self-isolate and not participate in the economy at pre-pandemic levels for a prolonged period of time. Further, even if vaccines are widely accepted, there can be no assurance that the vaccine will ultimately be successful in limiting or stopping the spread of COVID-19 and its variants. Therefore, it remains difficult to predict the potential impact of the virus on our results of operations and financial position. The potential effects of COVID-19 also could impact many of our risk factors, as discussed herein, including, but not limited to our exposure to operational, economic, political and regulatory risks; risks related to global or local economic movements; changes in trade policies; and labor disruptions. However, given the evolving health, economic, social, and governmental environments, the potential impact that COVID-19 could have on our risk factors that are further 23 described herein remains uncertain. Any future pandemics could similarly negatively impact our operations and financial results. Several governmental entities have enacted or may enact enforceable government mandates with respect to employee vaccinations against COVID-19. Any requirement to mandate COVID-19 vaccination of our workforce or require our unvaccinated employees to be tested weekly could result in employee attrition and difficulty securing future labor needs, which could adversely affect our business, financial condition or results of operations. Any failure of our management information systems could disrupt our business operations both in the field and back office, which could result in decreased lease or sale revenue and increase overhead costs. We rely heavily on information systems across our operations. We also utilize third-party cloud providers to host certain of our applications and to store data. Our ability to effectively manage our business depends significantly on the reliability and capacity of these systems. The failure of our management information systems to perform as anticipated could damage our reputation with our customers, disrupt our business or result in, among other things, decreased lease and sales revenue and increased overhead costs. Any such failure could harm our business, results of operations and financial condition. In addition, the delay or failure to implement information system upgrades and new systems effectively could disrupt our business, distract management’s focus and attention from business operations and growth initiatives and increase our implementation and operating costs, any of which could materially adversely affect our operations and operating results. Moreover, the integration of any acquisition may create unforeseen challenges for our management information systems which could result in unforeseen expenditures and other risks, including difficulties in managing facilities and employees in different geographic areas. We believe we have implemented appropriate measures to mitigate potential risks; however, like other companies, our information technology systems may be vulnerable to a variety of interruptions due to our own error or events beyond our control. The measures that we employ to protect our systems may not detect or prevent cybersecurity breaches, natural disasters, terrorist attacks, telecommunication failures, computer viruses, hackers, phishing attacks, and other security issues. We have previously been the target of an attempted cyber-attack and have from time to time experienced threats to our data and systems, computer virus attacks and phishing attempts, and we may be subject to breaches of the information systems that we use. We have not experienced a material cybersecurity breach. We have programs in place that are intended to detect, contain and respond to data security incidents and that provide employee awareness training regarding phishing, malware, and other cyber risks to protect against cyber risks and security breaches. However, because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may be difficult to detect for long periods of time, we may be unable to anticipate these techniques or implement adequate preventative measures. In addition, because our systems contain information about individuals and other businesses, the failure to maintain the security of the data we hold, whether the result of our own error or the malfeasance or errors of others, could harm our reputation or give rise to legal liabilities leading to lower revenue, increased costs, regulatory sanctions and other potential material adverse effects on our business, results of operations and financial condition. Effective management of our fleet is vital to our business, and our failure to properly safeguard, design, manufacture, repair, maintain and manage our fleet could harm our business and reduce our operating results and cash flows. Our modular space and portable storage units have long economic lives and managing our fleet is a critical element to our leasing business. Rental equipment asset management requires designing and building long-lived products that anticipate customer needs and changes in legislation, regulations, building codes and local permitting in the various markets in which we operate. In addition, we must cost-effectively maintain and repair our fleet to maximize the economic life of the products and the proceeds we receive from product sales. As the needs of our customers change, we may incur costs to relocate or retrofit our assets to better meet shifts in demand. If the distribution of our assets is not aligned with regional demand, we may be unable to take advantage of sales and leasing opportunities in certain regions, despite excess inventory in other regions. If we are not able to successfully manage our lease assets, our business, results of operations and financial condition may be materially adversely affected. If we do not appropriately manage the design, manufacture, repair and maintenance of our product fleet, or if we delay or defer such repair or maintenance or suffer unexpected losses of rental equipment due to theft or obsolescence, we may be required to incur impairment charges for equipment that is beyond economic repair or incur significant capital expenditures to acquire new rental equipment to serve demand. These failures may also result in personal injury or property damage claims, including claims based on poor indoor air quality and termination of leases or contracts by customers. Costs of contract performance, potential litigation and profits lost from termination could materially adversely affect our future operating results and cash flows. If a significant number of leased units are returned in a short period of time, a large supply of units would need to be remarketed. Our failure to effectively remarket a large influx of units returning from leases could materially adversely affect our financial performance. 24 Trade policies and changes in trade policies, including the imposition of tariffs, their enforcement and downstream consequences, may materially adversely affect our business, results of operations, and outlook. Tariffs and/or other developments with respect to trade policies, trade agreements and government regulations may materially, adversely affect our business, financial condition and results of operations. For example, the US government has imposed tariffs on steel, aluminum and lumber imports from certain countries, which could result in increased costs to us for these materials. Without limitation, (i) tariffs currently in place and (ii) the imposition by the federal government of new tariffs on imports to the US could materially increase (a) the cost of our products that we are offering for sale or lease, (b) the cost of certain products that we source from foreign manufacturers, and (c) the cost of certain raw materials or products that we utilize. We may not be able to pass such increased costs on to our customers, and we may not be able to secure sources of certain products and materials that are not subject to tariffs on a timely basis. Although we actively monitor our procurement policies and practices to avoid undue reliance on foreign-sourced goods subject to tariffs, when practicable, such developments may materially adversely affect our business, financial condition and results of operations. We face significant competition in the modular space, portable storage and tank and pump industries. Such competition may result in pricing pressure or an inability to maintain or grow our market share. If we are unable to compete successfully, we could lose customers and our revenue and profitability could decline. Although our competition varies significantly by market, the modular space, portable storage, and the tank and pump solutions industries are highly competitive, in general, and the portable storage and tank and pump solutions industries are highly fragmented. We compete on the basis of a number of factors, including customer relationships, product quality and availability, delivery speed, VAPS and service capabilities, pricing, and overall ease of doing business. We may experience pricing pressures in our operations as some of our competitors seek to obtain market share by reducing prices, and we may face reduced demand for our products and services if our competitors are able to provide new or innovative products or services that better appeal to customers. In most of our end markets, we face competition from national, regional and local companies who have an established market position in the specific service area, and we expect to encounter similar competition in any new markets that we may enter. In certain markets, some of our competitors may have greater market share, less debt, greater pricing flexibility, more attractive product or service offerings, better brand recognition or superior marketing and financial resources. Increased competition could result in lower profit margins, substantial pricing pressure and reduced market share. Price competition, together with other forms of competition, may materially adversely affect our business, results of operations and financial condition. If we do not manage our credit risk effectively, collect on our accounts receivable, or recover our rental equipment from our customers, it could materially adversely affect our business, financial condition and results of operations. We perform credit evaluation procedures on our customers on each transaction and require security deposits or other forms of security from our customers when we identify a significant credit risk. Failure to manage our credit risk and receive timely payments on our customer accounts receivable may result in the write-off of customer receivables and loss of units if we are unable to recover our rental equipment from our customers’ sites. If we are not able to manage credit risk, or if a large number of customers should have financial difficulties at the same time, our credit and rental equipment losses would increase above historical levels. If this should occur, our business, financial condition, results of operations and cash flows may be materially adversely affected. Changes in state building codes could adversely impact our ability to remarket our buildings, which could have a material adverse impact on our business, financial condition and results of operations. Building codes are generally reviewed, debated and, in certain cases, modified on a national level every three years as an ongoing effort to keep the regulations current and improve the life, safety and welfare of the buildings' occupants. All aspects of a given code are subject to change, including, but not limited to, such items as structural specifications for earthquake safety, energy efficiency and environmental standards, fire and life safety, transportation, lighting and noise limits. On occasion, state agencies have undertaken studies of indoor air quality and noise levels with a focus on permanent and modular classrooms. This process leads to a systematic change that requires engagement in the process and recognition that past methods will not always be accepted. New modular construction is very similar to conventional construction where newer codes and regulations generally increase cost. New governmental regulations may increase our costs to acquire new rental equipment, as well as increase our costs to refurbish existing equipment. Compliance with building codes and regulations entails risk as state and local government authorities do not necessarily interpret building codes and regulations in a consistent manner, particularly where applicable regulations may be unclear and subject to interpretation. These regulations often provide broad discretion to governmental authorities that oversee these matters, which can result in unanticipated delays or increases in the cost of compliance in particular markets. The construction and modular industries have developed many “best practices” which are constantly evolving. Some of our peers and competitors may adopt practices that are more or less stringent than ours. When, and if, regulators clarify regulatory standards, the effect of the clarification may be to impose rules on our business and practices retroactively, at which time we may not be in compliance with such regulations and we may be required to incur costly remediation. If we are unable to pass 25 these increased costs on to our customers, our business, financial condition, operating cash flows and results of operations could be negatively impacted. Our operations face foreign currency exchange rate exposure, which may materially adversely affect our business, results of operations and financial condition. We hold assets, incur liabilities, earn revenue and pay expenses in certain currencies other than the US Dollar, primarily the Canadian Dollar, the Mexican Peso and the British Pound. Our consolidated financial results are denominated in US Dollars, and therefore, during times of a strengthening US Dollar, our reported revenue in non-US Dollar jurisdictions will be reduced because the local currency will translate into fewer US Dollars. Revenue and expenses are translated into US Dollars at the average exchange rate for the period. In addition, the assets and liabilities of our non-US Dollar subsidiaries are translated into US Dollars at the exchange rates in effect on the balance sheet date. Foreign currency exchange adjustments arising from certain intercompany obligations with and between our domestic companies and our foreign subsidiaries are marked-to-market and recorded as a non-cash loss or gain in each of our financial periods in our consolidated statements of operations. Accordingly, changes in currency exchange rates will cause our foreign currency translation adjustment in the consolidated statements of comprehensive income (loss) to fluctuate. In addition, fluctuations in foreign currency exchange rates will impact the amount of US Dollars we receive when we repatriate funds from our non-US Dollar operations. Fluctuations in interest rates and commodity prices may also materially adversely affect our revenues, results of operations and cash flows. Although we have converted a portion of our senior secured revolving credit facility borrowings into fixed-rate debt through interest rate swaps, a significant portion of our borrowings under the facility remain variable rate debt. Fluctuations in interest rates may negatively impact the amount of interest payments, as well as our ability to refinance portions of our existing debt in the future at attractive interest rates. In addition, certain of our end markets, as well as portions of our cost structure, such as transportation costs, are sensitive to changes in commodity prices, which can impact both demand for and profitability of our services. These changes could impact our future earnings and cash flows, assuming other factors are held constant. Significant increases in the costs and restrictions on the availability of raw materials and labor could increase our operating costs significantly and harm our profitability. We incur labor costs and purchase raw materials, including steel, lumber, siding and roofing, paint, glass, fuel and other parts and materials to perform periodic repairs, modifications and refurbishments to maintain physical conditions of our units and in connection with get-ready, delivery and installation of our units. The volume, timing and mix of such work may vary quarter-to-quarter and year-to-year. Generally, increases in labor and raw material costs will increase the acquisition costs of new units and also increase the repair and maintenance costs of our fleet. We also maintain a truck fleet to deliver units to and return units from our customers, the cost of which is sensitive to maintenance and fuel costs and rental rates on leased equipment. During periods of rising prices for labor or raw materials, and in particular, when the prices increase rapidly or to levels significantly higher than normal, we may incur significant increases in our acquisition costs for new units and higher operating costs that we may not be able to recoup from customers through changes in pricing, which could materially adversely affect our business, results of operations and financial condition. If raw material prices decline significantly, we may have to write down our raw materials inventory values. If this happens, our results of operations and financial condition could decline. In addition, the availability of raw materials components fluctuates from time to time due to factors outside of our control, including trade laws and tariffs, natural disasters, global pandemics like COVID-19 and resulting supply chain disruptions, and may impact our ability to meet the production demands of our customers. If the costs of raw materials increase or the availability thereof is restricted, it could adversely affect our financial condition, operating results and cash flows. Fluctuations in fuel costs or oil prices, a reduction in fuel supplies, or a sustained decline in oil prices may have a material adverse effect on our business and results of operations. In connection with our business, to better serve our customers and limit our capital expenditures, we often move our fleet from branch to branch. In addition, the majority of our customers arrange for delivery and pickup of our units through us. Accordingly, we could be materially adversely affected by significant increases in fuel prices that result in higher costs to us for transporting equipment. In the event of fuel and trucking cost increases, we may not be able to promptly raise our prices to make up for increased costs. A significant or prolonged price fluctuation or disruption of fuel supplies could have a material adverse effect on our financial condition and results of operations. Additionally, oil prices can be volatile and are subject to fluctuations in supply and demand, market uncertainty and a variety of additional factors that are beyond our control. If oil prices remain volatile for an extended period of time or there is a sustained decline in demand for oil, demand for our Tank and Pump Solutions products from refineries and companies engaged in the exploration and production of oil and natural gas could be adversely impacted, which would in turn have an adverse effect on our results of operations and financial condition. 26 Third parties may fail to manufacture or provide necessary components for our products properly or in a timely manner. We are often dependent on third parties to manufacture or supply components for our products. We typically do not enter into long-term contracts with third-party suppliers. We may experience supply problems as a result of financial or operating difficulties or the failure or consolidation of our suppliers. We may also experience supply problems as a result of shortages and discontinuations resulting from product obsolescence or other shortages or allocations by suppliers. Unfavorable economic conditions may also adversely affect our suppliers or the terms on which we purchase products. In the future, we may not be able to negotiate arrangements with third parties to secure products that we require in sufficient quantities or on reasonable terms. If we cannot negotiate arrangements with third parties to produce our products or if the third parties fail to produce our products to our specifications or in a timely manner, our business, results of operations and financial condition may be materially adversely affected. We are subject to risks associated with labor relations, labor costs and labor disruptions. We are subject to the costs and risks generally associated with labor disputes and organizing activities related to unionized labor. It is possible that strikes, public demonstrations or other coordinated actions and publicity may disrupt our operations. We may incur increased legal costs and indirect labor costs as a result of contractual disputes, negotiations or other labor-related disruptions. We hav e collective bargaining agreements with employees in portions of our Mexico-based operations, which accounted for approximately 1% of our total employees as of December 31, 2021. These operations may be more highly affected by labor force activities than others, and all collective bargaining agreements must be renegotiated annually. Other locations may also face organizing activities or effects. Labor organizing activities could result in additional employees becoming unionized. Furthermore, collective bargaining agreements may limit our ability to reduce the size of work forces during an economic downturn, which could put us at a competitive disadvantage. We believe a unionized workforce outside of Mexico would generally increase our operating costs, divert attention of management from servicing customers and increase the risk of work stoppages, all of which could have a material adverse effect on our business, results of operations or financial condition. Our ability to profitably execute our business plan depends on our ability to attract, develop and retain qualified personnel. Certain of our key executives, managers and employees have knowledge and an understanding of our business and our industry, and/or have developed meaningful customer relationships, that cannot be duplicated readily. Our ability to attract and retain qualified personnel is dependent on, among other things, the availability of qualified personnel and our ability to provide a competitive compensation package, including the implementation of adequate drivers of retention and rewards based on performance, and work environment. Failure to retain qualified key personnel may materially adversely affect our business, results of operations and financial condition. The departure of any key personnel and our inability to enforce non-competition agreements could have a negative impact on our business. Moreover, labor shortages, the inability to hire or retain qualified employees and increased labor costs could have a material adverse effect on our ability to control expenses and efficiently conduct our operations. We may not be able to continue to hire and retain the sufficiently skilled labor force necessary to operate efficiently and to support our operating strategies. Labor expenses could also increase as a result of continuing shortages in the supply of personnel. If we determine that our goodwill, intangible assets, and indefinite-life intangible assets have become impaired, we may incur impairment charges, which may adversely impact our operating results. We have a substantial amount of goodwill and indefinite-life intangible assets (trade names), which represents the excess of the total purchase price of our acquisitions over the fair value of the assets acquired, and other intangible assets. As of December 31, 2021, we had approximately $1,178.8 million and $460.7 million of goodwill and intangible assets, net, respectively, in our consolidated balance sheet, which represented approximately 20.4% and 8.0% of total assets, respectively, and primarily arose through our acquisition of Mobile Mini. We evaluate goodwill and indefinite-lived intangible assets for impairment on an annual basis and when events occur or circumstances change that indicate that the fair value of the reporting unit or intangible asset may be below its carrying amount. Fair value determinations require considerable judgment and are sensitive to inherent uncertainties and changes in estimates and assumptions regarding revenue growth rates, EBIT margins, capital expenditures, working capital requirements, tax rates, terminal growth rates, discount rates, exchange rates, royalty rates, benefits associated with a taxable transaction and synergistic benefits available to market participants. Impairment may result from, among other things, deterioration in the performance of the business, adverse market conditions, stock price and adverse changes in applicable laws and regulations, including changes that restrict our activities. Declines in market conditions, a trend of weaker than anticipated financial performance for our reporting units or declines in projected revenue, a decline in our share price for a sustained period of time, an increase in the market-based weighted average cost of capital or a decrease in royalty rates, among other factors, are indicators that the carrying value of our goodwill or indefinite-life intangible assets may not be recoverable. These risks may be heightened by the COVID-19 pandemic. In the event impairment is identified, a charge to earnings would be recorded which may materially adversely affect our financial condition and results of operations. 27 We are subject to various laws and regulations, including those governing government contracts, corruption and the environment. Obligations and liabilities under these laws and regulations may materially harm our business. Our operations are subject to an array of governmental regulations in each of the jurisdictions in which we operate. For example, our activities in the US are subject to regulation by several federal and state government agencies, including the Occupational Safety and Health Administration, and by federal and state laws. Our operations and activities in other jurisdictions are subject to similar governmental regulations. Similar to conventionally constructed buildings, the modular business industry is also subject to regulations by multiple governmental agencies in each jurisdiction relating to, among others, environmental, zoning and building standards, and health, safety and transportation matters. These regulations affect our Storage Solutions and Tank and Pump Solutions customers, most of whom use our storage units to store their goods on their own properties for various lengths of time. If local zoning laws or planning permission regulations in one or more of our markets no longer allow our units to be stored on customers' sites, our business in that market will suffer. Noncompliance with applicable regulations, implementation of new regulations or modifications to existing regulations may increase costs of compliance, require a termination of certain activities or otherwise materially adversely affect our business, results of operations and financial condition. US Government Contract Laws and Regulations Our government customers include the US government, which means we are subject to various statutes and regulations applicable to doing business with the US government. These types of contracts customarily contain provisions that give the US government substantial rights and remedies, many of which are not typically found in commercial contracts and which are unfavorable to contractors, including provisions that allow the government to unilaterally terminate or modify our federal government contracts, in whole or in part, at the government’s convenience. Under general principles of US government contracting law, if the government terminates a contract for convenience, the terminated company may generally recover only its incurred or committed costs and settlement expenses and profit on work completed prior to the termination. If the government terminates a contract for default, the defaulting company may be liable for any extra costs incurred by the government in procuring undelivered items from another source. In addition, US government contracts and grants normally contain additional requirements that may increase our costs of doing business, reduce our profits, and expose us to liability for failure to comply with these terms and conditions. These requirements include, for example: (a) specialized disclosure and accounting requirements unique to US government contracts; (b) financial and compliance audits that may result in potential liability for price adjustments, recoupment of government funds after such funds have been spent, civil and criminal penalties, or administrative sanctions such as suspension or debarment from doing business with the US government; (c) public disclosures of certain contract and company information; and (d) mandatory socioeconomic compliance requirements, including labor requirements, non-discrimination and affirmative action programs and environmental compliance requirements. If we fail to comply with these requirements, our contracts may be subject to termination, and we may be subject to financial and/or other liability under our contracts or under the Federal Civil False Claims Act (the "False Claims Act"). The False Claims Act’s “whistleblower” provisions allow private individuals, including present and former employees, to sue on behalf of the US government. The False Claims Act statute provides for treble damages and other penalties, and if our operations are found to be in violation of the False Claims Act, we could face other adverse action, including suspension or prohibition from doing business with the US government. Any penalties, damages, fines, suspension or damages could adversely affect our ability to operate our business and our financial results. Department of Transportation and Titling Regulations We operate in the US pursuant to operating authority granted by the US Department of Transportation (the “DOT”). Our drivers must comply with the safety and fitness regulations of the DOT, including those relating to drug and alcohol testing and hours of service. Such matters as equipment weight and dimensions are also subject to government regulations. Our safety record could be ranked poorly compared to peer firms. A poor safety ranking may result in the loss of customers or difficulty attracting and retaining qualified drivers which could affect our results of operations. Should additional rules be enacted in the future, compliance with such rules could result in additional costs. Additionally, we are subject to, and may be required to expend funds to ensure compliance with a variety of laws, regulations, and ordinances related to unit titling, stamping, and registration rules and procedures, and notification requirements to agencies and law enforcement relating to unit transfers, particularly when acquiring new assets and operations. Many of these laws and regulations are frequently complex and subject to interpretation, and failure to comply with present or future regulations or changes in interpretations of existing laws or regulations may result in impairment or suspension of our operations and the imposition of penalties and other liabilities. At various times, we may be involved in disputes with local governmental officials regarding the development and/or operation of our units. We may be subject to similar types of regulations by governmental agencies in new markets. In addition, new legal or regulatory requirements or changes in existing requirements may delay or increase the cost of acquiring and integrating new units, which may adversely impact our ability to conduct business. 28 Anti-Corruption Laws and Regulations We are subject to various anti-corruption laws that prohibit improper payments or offers of payments to foreign governments and their officials by a US person for the purpose of obtaining or retaining business. We operate in countries that may present a more corruptible business environment than the US. Such activities create the risk of unauthorized payments or offers of payments by one of our employees or agents that could be in violation of various laws, including the FCPA. We have implemented safeguards and policies to discourage these practices by our employees and agents. However, existing safeguards and any future improvements may prove to be ineffective and employees or agents may engage in conduct for which we might be held responsible. If employees violate our policies or we fail to maintain adequate record-keeping and internal accounting practices to accurately record our transactions, we may be subject to regulatory sanctions. Violations of the FCPA or other anti-corruption laws may result in severe criminal or civil sanctions and penalties, including suspension or debarment from US government contracting, and we may be subject to other liabilities which could materially adversely affect our business, results of operations and financial condition. We are also subject to similar anti-corruption laws in other jurisdictions. Environmental Laws and Regulations We are subject to a variety of national, state, regional and local environmental laws and regulations. Among other things, these laws and regulations impose limitations and prohibitions on the discharge and emission of, and establish standards for the use, disposal and management of, regulated materials and waste and impose liabilities for the costs of investigating and cleaning up, and damages resulting from, present and past spills, disposals or other releases of hazardous substances or materials. In the ordinary course of business, we use and generate substances that are regulated or may be hazardous under environmental laws. We have an inherent risk of liability under environmental laws and regulations, both with respect to ongoing operations and with respect to contamination that may have occurred in the past on our properties or as a result of our operations. For example, we own, transport and rent tanks and boxes in which waste materials are placed by our customers. Although we have a policy which, with certain limited exceptions, requires customers to return tanks and containers clean of any substances, they may fail to comply with these obligations. Additionally, we may provide waste hauling services, which involves environmental risks during transport. While we endeavor to comply with all regulatory requirements, from time to time, our operations or conditions on properties that we have acquired have resulted in liabilities under these environmental laws. We may in the future incur material costs to comply with environmental laws or sustain material liabilities from claims concerning noncompliance or contamination. Under certain environmental laws, we could be held responsible for all of the costs relating to any contamination at, or migration to or from, our or our predecessors' past or present facilities. These laws often impose liability even if the owner, operator or lessor did not know of, or was not responsible for, the release of such hazardous substances. We have no reserves for any such liabilities. We are also required to obtain environmental permits from governmental authorities for certain of our operations. If we violate or fail to obtain or comply with these laws, regulations, or permits, we could be fined or otherwise sanctioned by regulators. We could also become liable if employees or other parties are improperly exposed to hazardous materials. In addit ion, ongoing governmental review of hydraulic fracturing (“fracking”) and its environmental impact could lead to changes to this activity or its substantial curtailment, which could adversely affect our revenue and results of operations. Approximately 2% of our consolidated rental revenue for the year ended December 31, 2021 was related to customers involved in the upstream exploration and production of oil and natural gas. A portion of this revenue involves rentals to customers that use the fracking method to extract natural gas. The US Environmental Protection Agency has issued regulations or guidance regarding certain aspects of the process. Other federal, state and local governments and governmental agencies also investigate and/or regulate fracking. Additional governmental regulation could result in increased costs of compliance or the curtailment of fracking in the future, which would adversely affect our revenue and results of operations. We cannot predict what environmental legislation or regulations will be enacted in the future, how existing or future laws or regulations will be administered or interpreted, or what environmental conditions may be found to exist at our facilities or at third party sites for which we may be liable. Enactment of stricter laws or regulations, stricter interpretations of existing laws and regulations or the requirement to undertake the investigation or remediation of currently unknown environmental contamination at sites we own or third-party sites may require us to make additional expenditures, some of which could be material. Responding to governmental investigations or other actions may be both time-consuming and disruptive to our operations and could divert the attention of our management and key personnel from our business operations. The impact of these and other investigations and lawsuits could have a material adverse effect on our financial statements. Our customer base includes customers operating in a variety of industries which may be subject to changes in their competitive environment as a result of the global, national or local economic climate in which they operate and/or economic or financial disruptions to their industry. Our customer base includes customers operating in a variety of industries, including commercial and industrial, construction, education, energy and natural resources, government, retail and other end markets. Many of these customers, across this wide range of industries, are facing economic and/or financial pressure from changes to their industry resulting from the global, national and local economic climate in which they operate and industry-specific economic and financial disruptions, including, in some cases, consolidation and lower sales revenue from physical locations, resulting from the impact of the COVID-19 pandemic and the related changes in political, social and economic conditions. These and any future 29 changes to any of the industries in which our customers operate could cause them to rent fewer units from us or otherwise be unable to satisfy their obligations to us. In addition, certain of our customers are facing financial pressure and such pressure, from COVID-19 or other factors, may result in consolidation in some industries and/or an increase in bankruptcy filings by certain customers. Each of these facts and industry impacts, individually or in the aggregate, could have a materially adverse effect on our operating results. We may not be able to adequately protect our intellectual property and other proprietary rights that are material to our business. Our ability to compete effectively depends in part upon protection of our rights in trademarks, copyrights and other intellectual property rights we own or license, including patents to the Mobile Mini locking system. Our use of contractual provisions, confidentiality procedures and agreements, and trademark, copyright, unfair competition, trade secret and other laws to protect our intellectual property and other proprietary rights may not be adequate. Litigation may be necessary to enforce our intellectual property rights and protect our proprietary information and patents, or to defend against claims by third parties that our services or our use of intellectual property infringe their intellectual property rights. Any litigation or claims brought by or against us could result in substantial costs and diversion of resources. A successful claim of trademark, copyright or other intellectual property infringement against us could prevent us from providing services, which could harm our business, financial condition or results of operations. In addition, a breakdown in our internal policies and procedures may lead to an unintentional disclosure of our proprietary, confidential or material non-public information, which could in turn harm our business, financial condition or results of operations. Our operations could be subject to natural disasters and other business disruptions, which could materially adversely affect our information systems, future revenue, financial condition, cash flows and increase our costs and expenses. Our operations could be subject to natural disasters and other business disruptions such as pandemics, fires, floods, hurricanes, earthquakes and terrorism, which could adversely affect our information systems, future revenue, financial condition, and cash flows and increase our costs and expenses. See "Our operations may be adversely impacted as a result of COVID-19." In addition, the occurrence and threat of terrorist attacks may directly or indirectly affect economic conditions, which could adversely affect demand for our products and services. In the event of a major natural or man-made disaster, we could experience loss of life of our employees, destruction of facilities or business interruptions, any of which may materially adversely affect our business. If any of our facilities or a significant amount of our rental equipment were to experience a catastrophic loss, it could disrupt our operations, delay orders, shipments and revenue recognition and result in expenses to repair or replace the damaged rental equipment and facility not covered by asset, liability, business continuity or other insurance contracts. Also, we could face significant increases in premiums or losses of coverage due to the loss experienced during and associated with these and potential future natural or man-made disasters that may materially adversely affect our business. In addition, attacks or armed conflicts that directly impact one or more of our properties could significantly affect our ability to operate those properties and thereby impair our results of operations. In general, any of these events could cause consumer confidence and spending to decrease or result in increased volatility in the global economy and worldwide financial markets. Any such occurrence could materially adversely affect our business, results of operations and financial condition. Our operations are dependent, in part, on our ability to establish and profitably maintain the appropriate physical presence in the markets we serve. Our operations depend, in part, on our ability to develop and optimize our branch network and market coverage while maintaining profitability. Our ability to optimize our branch network and market coverage requires active management of our real estate portfolio in a manner that permits locations and offerings to evolve over time, which to the extent it involves the relocation of existing branch locations or the opening of additional branch locations will depend on a number of factors, including our identification and availability of suitable locations; our success in negotiating leases on acceptable terms; and our timely development of new branch locations, including the availability of construction materials and labor and the absence of significant construction and other delays based on weather or other events. These factors could potentially increase the cost of doing business and the risk that our business practices could result in liabilities that may adversely affect our business, results of operations and financial condition. We have in the past, and we intend in the future, to expand our operations into new geographic markets. This expansion could require financial resources that would not therefore be available for other aspects of our business. In addition, this expansion could require the time and attention of management, leaving less time to focus on existing business. If we fail to manage the risks inherent in our geographic expansion, we could incur capital and operating costs without any related increase in revenue, which would harm our operating results. 30 We may incur property, casualty or other losses not covered by our insurance. We are partly self-insured for a number of different risk categories, such as property, general liability (including product liability), workers' compensation, automobile claims, crime, and cyber liability, with insurance coverage for certain catastrophic risks. The types and amounts of insurance may vary from time to time based on our decisions with respect to risk retention and regulatory requirements. The occurrence of significant claims, a substantial rise in costs to maintain our insurance, or the failure to maintain adequate insurance coverage could have an adverse impact on our financial condition and results of operations. Failure to close our unit sales transactions as we project could cause our actual revenue or cash flow for a particular fiscal period to differ from expectations. Sales of new and used modular space and portable storage units to customers represented approximately 5.7% of WillScot Mobile Mini's revenue during the year ended December 31, 2021. Sale transactions are subject to certain factors that are beyond our control, including permit requirements, the timely completion of prerequisite work by others and weather conditions. Accordingly, the actual timing of the completion of these transactions may take longer than we expect. As a result, our actual revenue and cash flow in a particular fiscal period may not consistently correlate to our internal operational plans and budgets. If we are unable to accurately predict the timing of these sal es, we may fail to take advantage of business and growth opportunities otherwise available, and our business, results of operations, financial condition and cash flows may be materially adversely affected. If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results, which could lead to a loss of investor confidence in our financial statements and have an adverse effect on our stock price. Effective internal controls are necessary for us to provide reliable and accurate financial statements and to effectively prevent fraud. We devote significant resources and time to comply with the internal control over financial reporting requirements of the Sarbanes-Oxley Act of 2002 as amended (the "Sarbanes-Oxley Act"). There is no assurance that material weaknesses or significant deficiencies will not occur or that we will be successful in adequately remediating any such material weaknesses and significant deficiencies. We may in the future discover areas of our internal controls that need improvement. We cannot be certain that we will be successful in maintaining adequate internal control over our financial reporting and financial processes. Furthermore, as we grow our business, including through acquisition, our internal controls will become more complex, and we will require significantly more resources to ensure our internal controls remain effective. Additionally, the existence of any material weakness or significant deficiency would require management to devote significant time and incur significant expense to remediate any such material weaknesses or significant deficiencies, and management may not be able to remediate any such material weaknesses or significant deficiencies in a timely manner. The existence of any material weakness in our internal control over financial reporting could also result in errors in our financial statements that could require us to restate our financial statements, cause us to fail to meet our reporting obligations, subject us to investigations from regulatory authorities or cause stockholders to lose confidence in our reported financial information, all of which could materially and adversely affect us. We are subject to evolving public disclosure, financial reporting and corporate governance expectations and regulations that impact compliance costs and risks of noncompliance. We are subject to changing rules and regulations promulgated by a number of governmental and self-regulatory organizations, including the SEC and Nasdaq, as well as evolving investor expectations around disclosures, financial reporting, corporate governance and environmental and social practices. These rules and regulations continue to evolve in scope and complexity, and many new requirements have been created in response to laws enacted by the US and foreign governments, making compliance more difficult and uncertain. The increase in costs to comply with such evolving expectations, rules and regulations, as well as any risk of noncompliance, could adversely impact us. We may be unable to achieve our environmental, social and governance goals. We are dedicated to corporate social responsibility and sustainability and face pressures from our employees, customers, and stockholders to make significant advancements in environmental, social and governance matters. In part to address these concerns, we established certain goals as part of our ESG strategy. Achievement of our goals is subject to risks and uncertainties, many of which are outside of our control, and it is possible that we may fail to achieve these goals or that our colleagues, customers, or stockholders might not be satisfied with our efforts. These risks and uncertainties include, but are not limited to: our ability to execute our operational strategies and achieve our goals within the currently projected costs and the expected timeframes; the availability and cost of renewable energy and other materials; compliance with, and changes or additions to, global and regional regulations, taxes, charges, mandates or requirements relating to climate-related goals; labor-related regulations and requirements that restrict or prohibit our ability to impose requirements on third-party contractors; the actions of competitors and competitive pressures; an acquisition of or merger with another company that has not adopted similar goals or whose progress towards reaching its goals is not as advanced as ours; and the pace of regional and global recovery from the COVID-19 pandemic. A failure to meet our goals could adversely affect public perception of our business, employee morale or customer or stockholder support. 31 Further, an increasing percentage of employees, customers, and stockholders considers sustainability factors in making employment, business and investment decisions. If we are unable to meet our goals, we may lose employees, and have difficulty recruiting new employees, investors, customers, or partners, our stock price may be negatively impacted, our reputation may be negatively affected, and it may be more difficult for us to compete effectively, all of which would have an adverse effect on our business, operating results, and financial condition. Risks Relating to Income Tax Our ability to use our net operating loss carryforwards and other tax attributes may be limited. A s of December 31, 2021, we had US net operating loss (“NOL”) carryforwards of approximately $1,232.7 million and $632.9 million for US federal income tax and state tax purposes, respectively, available to offset future taxable income, prior to consideration of annual limitations that Section 382 of the Internal Revenue Code of 1986 may impose. The US NOL carryforwards begin to expire in 2022 for state and federal if not utilized. In addition, we had foreign NOLs of $3.9 million as a result of operations in Canada and Mexico. Our Mexico and Canada NOL carryforwards begin to expire in 2026 and 2032, respectively, if not utilized. Our US NOL and tax credit carryforwards could expire unused and be unavailable to offset future income tax liabilities. Under Section 382 of the Internal Revenue Code and corresponding provisions of US state law, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation’s ability to use its US NOLs and other applicable tax attributes before the ownership change, such as research and development tax credits, to offset its income after the ownership change may be limited. Similar provisions apply with respect to certain state and non-US jurisdictions which could limit our ability to offset taxable income. In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed. We have tax attributes subject to the foregoing provisions primarily from the Merger. Lastly, we may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which may be outside of our control. If we determine that an ownership change has occurred and our ability to use our historical NOL and tax credit carryforwards is materially limited, it may result in increased future tax obligations and income tax expense. Some of the tax loss carryforwards could expire, and if we do not have sufficient taxable income in future years to use the tax benefits before they expire, the benefit may be permanently lost. In addition, the taxing authorities could challenge our calculation of the amount of our tax attributes, which could reduce certain of our recognized tax benefits. Further, tax laws in certain jurisdictions may limit the ability to use carryforwards upon a change in control. We may be unable to recognize deferred tax assets such as those related to our tax loss carryforwards and, as a result, lose future tax savings, which could have a negative impact on our liquidity and financial position. We recognize deferred tax assets primarily related to deductible temporary differences based on our assessment that the item will be utilized against future taxable income and the benefit will be sustained upon ultimate settlement with the applicable taxing authority. Such deductible temporary differences primarily relate to tax loss carryforwards and business interest expense limitations. Tax loss carryforwards arising in a given tax jurisdiction may be carried forward to offset taxable income in future years from such tax jurisdiction and reduce or eliminate income taxes otherwise payable on such taxable income, subject to certain limitations. Deferred interest expense exists primarily within our US operating companies, where interest expense was not previously deductible as incurred but may become deductible in the future subject to certain limitations. We may have to write down, through income tax expense, the carrying amount of certain deferred tax assets to the extent we determine it is not more likely than not that we will realize such deferred tax assets under US Generally Accepted Accounting Principles ("GAAP"). Unanticipated changes in our tax obligations, the adoption of a new tax legislation, or exposure to additional income tax liabilities could affect profitability. We are subject to income taxes in the US, Canada, Mexico and the UK. Our tax liabilities are affected by the amounts we charged for inventory, services, funding and other transactions on an intercompany basis. We are subject to potential tax examinations in these jurisdictions. Tax authorities may disagree with our intercompany charges, cross-jurisdictional transfer pricing or other tax positions and assess additional taxes. We regularly assess the appropriateness of our tax positions based on all the facts including on-going tax examinations and the applicable tax laws. However, there can be no assurance that we will accurately predict the outcomes of our tax positions or the challenges of applicable taxing authorities during tax examinations, and the amounts that we ultimately pay upon resolution of examinations could be materially different from the amounts we previously included in our income tax provision and, therefore, could have a material impact on our results of operations and cash flows. In addition, our future effective tax rate could be adversely affected by changes to our operating structure, changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation allowance of deferred tax assets, changes in tax laws and the discovery of new information in the course of our tax return preparation process. Changes in tax laws or regulations, including changes in the US related to the treatment of accelerated depreciation 32 expense, carry-forwards of net operating losses, and taxation of foreign income and expenses may increase tax uncertainty and adversely affect our results of operations. Risks Relating to Our Capital Structure Global capital and credit market conditions could materially and adversely affect our ability to access the capital and credit markets or the ability of key counterparties to perform their obligations to us. In the future we may need to raise additional funds to, among other things, refinance existing indebtedness, fund existing operations, improve or expand our operations, respond to competitive pressures or make acquisitions. If adequate funds are not available on acceptable terms, we may be unable to achieve our business or strategic objectives or compete effectively. Our ability to pursue certain future opportunities may depend in part on our ongoing access to debt and equity capital markets. We cannot assure you that any such financing will be available on terms satisfactory to us or at all. If we are unable to obtain financing on acceptable terms, we may have to curtail our growth by, among other things, curtailing the expansion of our fleet of units or our acquisition strategy. Additionally, future credit market conditions could increase the likelihood that one or more of our lenders may be unable to honor their commitments under our credit facility, which could have an adverse effect on our financial condition and results of operations. Economic disruptions affecting key counterparties could also materially adversely affect our business. We monitor the financial strength of our larger customers, derivative counterparties, lenders, vendors, service providers and insurance carriers on a periodic basis using publicly-available information to evaluate our exposure to those who have or who we believe may likely experience significant threats to their ability to adequately perform their obligations to us. The information available will differ from counterparty to counterparty and may be insufficient for us to adequately interpret or evaluate our exposure and/or determine appropriate or timely responses. Our leverage may make it difficult for us to service our debt and operate our business. As of December 31, 2021, we had $2,760.1 million of total indebtedness, excluding deferred financing fees, consisting of $1,644.5 million of borrowings under our 2020 ABL Facility, $526.50 million of our 2025 Secured Notes, $500.0 million of our 2028 Secured Notes and $89.1 million of finance leases. Our leverage could have important consequences, including (a) making it more difficult to satisfy our obligations with respect to our various debt and liabilities; (b) requiring us to dedicate a substantial portion of our cash flow from operations to debt payments, thus reducing the availability of cash flow to fund internal growth through working capital and capital expenditure on our existing fleet or a new fleet and for other general corporate p urposes; (c) increasing our vulnerability to a downturn in our business or adverse economic or industry conditions; (d) placing us at a competitive disadvantage compared to our competitors that have less debt in relation to cash flow and that, therefore, may be able to take advantage of opportunities that our leverage would prevent us from pursuing; (e) limiting our flexibility in planning for or reacting to changes in our business and industry; (f) restricting us from pursuing strategic acquisitions or exploiting certain business opportunities or causing us to make non-strategic divestitures; restricting us from pursuing strategic acquisitions or exploiting certain business opportunities or causing us to make non-strategic divestitures; (g) requiring additional monitoring, reporting and borrowing base requirements under our 2020 ABL Facility if borrowings significantly increase or if certain liquidity thresholds are not satisfied; and (h) limiting our ability to borrow additional funds or raise equity capital in the future and increasing the costs of such additional financings. Our ability to meet our debt service obligations or to refinance our debt depends on our future operating and financial performance, which will be affected by our ability to successfully implement our business strategy as well as general economic, financial, competitive, regulatory and other factors beyond our control. If our business does not generate sufficient cash flow from operations, or if future borrowings are not available to us in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs, we may need to refinance all or a portion of our indebtedness on or before its maturity, sell assets, reduce or delay capital investments or seek to raise additional capital, any of which could have a material adverse effect on our operations. In addition, we may not be able to affect any of these actions, if necessary, on commercially reasonable terms or at all. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. The terms of our existing or future debt instruments may limit or prevent us from taking any of these actions . If we default on the payments required under the terms of certain of our indebtedness, that indebtedness, together with debt incurred pursuant to other debt agreements or instruments that contain cross-default or cross-acceleration provisions, may become payable on demand, and we may not have sufficient funds to repay all of our debts. As a result, our inability to generate sufficient cash flow to satisfy our debt service obligations, or to refinance or restructure our obligations on commercially reasonable terms or at all, would have an adverse effect, which could be material, on our business, financial condition and results of operations, as well as on our ability to satisfy our debt obligations . Despite our current level of indebtedness, we and our subsidiaries will still be able to incur significant additional amounts of debt, which could further exacerbate the risks associated with our substantial indebtedness. We and our subsidiaries may be able to incur substantial additional debt in the future, including in connection with capital leases. Although the credit agreement that governs our credit facility and the indentures that govern our outstanding notes contain restrictions on the incurrence of additional debt, these restrictions are subject to a number of significant qualifications and exceptions, and under certain circumstances, the amount of debt that we could incur in compliance with 33 these restrictions could be substantial. In addition, the credit agreement that governs our credit facility and the indentures do not prevent us from incurring other obligations that do not constitute indebtedness under those agreements. If we add debt to our and our subsidiaries’ existing debt levels, the risks associated with our substantial indebtedness described above, including our possible inability to service our debt, will increase. We are subject to and may, in the future become subject to, covenants that limit our operating and financial flexibility and, if we default under our debt covenants, we may not be able to meet our payment obligations. The credit agreement that governs our credit facility and the indentures that govern our outstanding notes, as well as any instruments that govern any future debt obligations, contain covenants that impose significant restrictions on the way our subsidiaries can operate, including restrictions on the ability to (a) incur or guarantee additional debt and issue certain types of stock; (b) create or incur certain liens; (c) make certain payments, including dividends or other distributions, with respect to our equity securities; (d) prepay or redeem junior debt; (e) make certain investments or acquisitions, including participating in joint ventures; (f) engage in certain transactions with affiliates; (g) create unrestricted subsidiaries; (h) create encumbrances or restrictions on the payment of dividends or other distributions, loans or advances to, and on the transfer of, assets to the issuer or any restricted subsidiary; (i) sell assets, consolidate or merge with or into other companies; (j) sell or transfer all or substantially all our assets or those of our subsidiaries on a consolidated basis; and (k) issue or sell share capital of certain subsidiaries. Although these limitations are subject to significant exceptions and qualifications, these covenants could limit our ability to finance future operations and capital needs and our ability to pursue acquisitions and other business activities that may be in our interest. Our subsidiaries’ ability to comply with these covenants and restrictions may be affected by events beyond our control. These include prevailing economic, financial and industry conditions. If any of our subsidiaries default on their obligations under our credit facility or our secured notes, then the relevant lenders or holders could elect to declare the debt, together with accrued and unpaid interest and other fees, if any, immediately due and payable and proceed against any collateral securing that debt. If the debt under our credit facility, the indentures or any other material financing arrangement that we enter into were to be accelerated, our assets may be insufficient to repay in full such indebtedness. The credit agreement that governs our credit facility also requires our subsidiaries to satisfy specified financial maintenance tests in the event that we do not satisfy certain excess liquidity requirements. Deterioration in our operating results, as well as events beyond our control, including increases in raw materials prices and unfavorable economic conditions, could affect the ability to meet these tests, and we cannot assure that we will meet these tests. If an event of default occurs under our credit facility, the lenders could terminate their commitments and declare all amounts borrowed, together with accrued and unpaid interest and other fees, to be immediately due and payable. Borrowings under other debt instruments that contain cross-acceleration or cross-default provisions also may be accelerated or become payable on demand. In these circumstances, our assets may not be sufficient to repay in full that indebtedness and our other indebtedness then outstanding. The amount of borrowings permitted at any time under our credit facility is subject to compliance with limits based on a periodic borrowing base valuation of the collateral thereunder. As a result, our access to credit under the credit facility is subject to potential fluctuations depending on the value of the borrowing base of eligible assets as of any measurement date, as well as certain discretionary rights of the agent in respect of the calculation of such borrowing base value. As a result of any change in valuation, the availability under the credit facility may be reduced, or we may be required to make a repayment of the credit facility, which may be significant. The inability to borrow under the credit facility or the use of available cash to repay the credit facility as a result of a valuation change may adversely affect our liquidity, results of operations and financial position. The uncertainty regarding the phase-out of LIBOR may negatively impact our operating results. LIBOR, the interest rate benchmark used as a reference rate on our variable rate debt, including our credit facility and interest rate swaps, is expected to be phased out after 2021, when private-sector banks are no longer required to report the information used to set the rate. Without this data, LIBOR may no longer be published, or the lack of quality and quantity of data may cause the rate to no longer be representative of the market, though the ICE Benchmark Administration, in its capacity as administrator of US dollar LIBOR, announced that it intends to extend publication of USD LIBOR (other than one-week and two-month tenors) until June 30, 2023. At this time, no consensus exists as to what rate or rates may become accepted alternatives to LIBOR, and it is impossible to predict whether and to what extent banks will continue to provide LIBOR submissions to the administrator of LIBOR and whether one-month, three-month, six‑month, and twelve-month USD LIBOR rates will continue to be published until June 2023. The US Federal Reserve, in connection with the Alternative Reference Rates Committee ("ARRC"), a steering committee comprised of large US financial institutions, is considering replacing US dollar LIBOR with the Secured Overnight Financing Rate ("SOFR"). SOFR is a more generic measure than LIBOR and considers the cost of borrowing cash overnight collateralized by US Treasury securities. Given the inherent differences between LIBOR and SOFR or any other alternative benchmark rate that may be established, there are many uncertainties regarding a transition from LIBOR, including but not limited to the need to amend all contracts with LIBOR as the referenced rate and how this will impact our cost of variable rate debt and derivative financial instruments. We will also need to consider new contracts and if they should reference an alternative benchmark rate or include suggested fallback language, as published by the ARRC. The consequences of these developments with respect to LIBOR cannot be entirely predicted and 34 span multiple future periods but could result in an increase in the cost of our variable rate debt or derivative financial instruments which may be detrimental to our financial position or operating results. On December 6, 2021, our indirect subsidiary entered into a LIBOR Transition Amendment to our credit facility for the application of a successor rate for borrowings denominated in Pounds Sterling from a LIBOR-based rate to a SONIA (Sterling Overnight Index Average)-based rate and borrowings denominated in Euros from a LIBOR-based rate to a EURIBOR (Euro Interbank Offered Rate)-based rate, subject to certain adjustments specified in our credit facility. It is not currently possible to predict the effect of any establishment of alternative reference rates or any other reforms to LIBOR that may be enacted. The historical market price of WillScot Mobile Mini’s Common Stock has been volatile and the market price of our Common Stock may continue to be volatile and the value of your investment may decline. The historical market price of our Common Stock has been volatile and the market price of our Common Stock may continue to be volatile moving forward. Volatility may cause wide fluctuations in the price of our Common Stock on Nasdaq. The market price of our Common Stock is likely to be affected by (a) changes in general conditions in the economy, geopolitical events or the financial markets; (b) variations in our quarterly operating results; (c) changes in financial estimates by securities analysts; (d) our share repurchase or dividend policies; (e) other developments affecting us, our industry, customers or competitors; (f) changes in demand for our products or the prices we charge due to changes in economic conditions, competition or other factors; (g) general economic conditions in the markets where we operate; (h) the cyclical nature of our customers’ businesses and certain end markets that we service; (i) rental rate changes in response to competitive factors; (j) bankruptcy or insolvency of our customers, thereby reducing demand for our used units; (k) seasonal rental patterns; (l) acquisitions or divestitures and related costs; (m) labor shortages, work stoppages or other labor difficulties; (n) possible unrecorded liabilities of acquired companies; (o) possible write-offs or exceptional charges due to changes in applicable accounting standards, goodwill impairment, or divestiture or impairment of assets; (p) the operating and stock price performance of companies that investors deem comparable to us; (q) the number of shares available for resale in the public markets under applicable securities laws; (r) the composition of our shareholder base; and (s) other unspecified circumstances that may be company specific circumstances or overall industry and market driven. ITEM 1B. Unresolved Staff Comments None. ITEM 2. Properties Our primary corporate headquarters is located in Phoenix, Arizona. We operate approximately 275 branch locations and additional drop lots across the US, Canada, Mexico, and the UK. Collectively, we lease approximately 85% of our branch properties and own the remaining balance. Our management believes that none of our properties, on an individual basis, is material to our operations, and that our properties are well maintained and suitable for their intended use. We further believe that these locations generally have adequate capacity and can accommodate seasonal demands, changing product mixes and additional growth. Subject to certain exceptions, substantially all of our owned real and personal property in the US and Canada is encumbered under our credit facility and our secured notes. We do not believe that the encumbrances will materially detract from the value of our properties, or materially interfere with their use in the operation of our business. ITEM 3. Legal Proceedings The Company is involved in various lawsuits, claims and legal proceedings that arise in the ordinary course of business. The Company assesses these matters on a case-by-case basis as they arise and establishes reserves as required. As of December 31, 2021, with respect to these outstanding matters, the Company believes that the amount or range of reasonably possible loss will not, either individually or in the aggregate, have a material adverse effect on the consolidated financial position, results of operations, or cash flows. However, the outcome of such matters is inherently unpredictable and subject to significant uncertainties. ITEM 4. Mine Safety Disclosures Not applicable. 35 PART II ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock Our Common Stock is listed on the Nasdaq Capital Market under the symbol “WSC.” Our certificate of incorporation authorizes the issuance of 500,000,000 shares of Common Stock with a par value of $0.0001 per share. The Company had 223,939,527 shares of Common Stock issued and outstanding as of December 31, 2021. The outstanding shares of the Company's Common Stock are duly authorized, validly issued, fully paid and non-assessable. Preferred Stock Our certificate of incorporation authorizes the issuance of 1,000,000 shares of Preferred Stock with a par value of $0.0001 per share. As of December 31, 2021, no shares of Preferred Stock were issued and outstanding, and no designation of rights and preferences of preferred stock had been adopted. 2018 Warrants On August 15, 2018, WillScot issued warrants (the "2018 Warrants") to the former ModSpace shareholders as part of the acquisition of ModSpace . Our 2018 Warrants are listed on an OTC Markets Group, Inc. Pink Open Market under the symbol "WSCTW." Over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions. Each 2018 Warrant entitles the holder thereof to purchase one share of our Common Stock at an exercise price of $15.50 per share, subject to potential adjustment. The 2018 Warrants were not exercisable or transferable until February 11, 2019 and expire on November 29, 2022. As of December 31, 2021, 4,078,173 of the 2018 Warrants were outstanding. Holders As of December 31, 2021, there were 44 holders of record of our Common Stock, no holders of record of our Preferred Stock, and 23 holders of record of our 2018 Warrants. The number of holders of record does not include a substantially greater number of “street name” holders or beneficial holders whose Common Stock or warrants are held of record by banks, brokers and other financial institutions. Dividend Policy To date, we have not declared or paid dividends on our Common Stock. We have strong recurring cash flows, which gives us flexibility in how we allocate capital, and we review the appropriate mix of growth investments, debt reduction, and returns to shareholders on an ongoing basis. Declaration or payment of dividends, if any, in the future, will be at the discretion of our Board of Directors and will depend on our then current financial condition, results of operations, capital requirements and other factors deemed relevant by the Board of Directors. Securities Authorized for Issuance under Equity Compensation Plans On February 5, 2018, we filed a registration statement on Form S-8, registering 4,000,000 shares of Common Stock, relati ng to awards to be undertaken in the future, with such vesting conditions, as applicable, to be determined in accordance with the WillScot Corporation 2017 Incentive Award Plan (the "2017 Incentive Award Plan"). On July 2, 2020, we filed a registration statement on Form S-8 registering 6,488,988 shares of Common Stock (including 1,488,988 shares that remained available under the 2017 Incentive Award Plan), relating to awards to be undertaken in the future, with such vesting conditions, as applicable, to be determined in accordance with the WillScot Mobile Mini 2020 Incentive Award Plan (the "2020 Incentive Plan"). The following types of awards can be issued under the 2020 Incentive Plan: non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance compensation awards and stock bonus awards. See Note 16 in Part II, Item 8 herein for additional information. 36 The following table sets forth information as of December 31, 2021 with respect to compensation plans under which equity securities are authorized for issuance: Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants, and rights Number of securities remaining available for issuance under equity compensation plans (excluding securities reflected the first column) Equity compensation plans approved by security holders 3,195,304 (1) $ 13.60 (2) 4,627,837 Equity compensation plans not approved by security holders N/A N/A N/A Total 3,195,304 $ 13.60 4,627,837 (1) Includes (a) 0.5 million stock options, (b) 1.0 million restricted stock units and 1.8 million performance-based restricted stock units based on relative total stockholder return ("TSR") attainment levels at December 31, 2021, and (c) 0.04 million restricted stock awards issued to non-employee directors. (2) The weighted-average exercise price is reported for the outstanding stock options reported in the first column. There are no exercise prices for the restricted stock units, performance-based restricted stock units or restricted stock awards in the first column. In connection with the Merger, on July 2, 2020, we converted Mobile Mini's outstanding fully vested stock options to 7,361,516 WillScot Mobile Mini stock options using a conversion ratio of 2.405 as contemplated by the Agreement and Plan of Merger, dated as of March 1, 2020, as amended on May 28, 2020 (as so amended, the “Merger Agreement”), by and among WillScot, Mobile Mini, and Picasso Merger Sub, Inc. As of December 31, 2021, 1,527,643 options were outstanding and exercisable; each option is exercisable for one share of Common Stock. The weighted average exercise price of the outstanding options was $14.66 as of December 31, 2021. These options are not included in the table above as they were not issued under the incentive award plans. Repurchases In October 2021, our Board of Directors replaced the existing share repurchase program with a new share repurchase program that authorizes us to repurchase up to $1.0 billion of our outstanding shares of Common Stock and equivalents. The stock repurchase program does not obligate us to purchase any particular number of shares, and the timing and exact amount of any repurchases will depend on various factors, including market pricing and conditions, business, legal, accounting, and other considerations. As of December 31, 2021, $956.7 million of the $1.0 billion share repurchase authorization remained available for use. The following table summarizes our purchase of Common Stock and equivalents during the fourth quarter of 2021: Period Total Number of Shares and Equivalents Purchased (in thousands) Average Price Paid per Share Total Numbers of Shares and Equivalents Purchased as part of Publicly Announced Plan (in thousands) Maximum Dollar Value of Shares and Equivalents that May Yet Be Purchased Under the Plan (in thousands) October 1, 2021 - October 31, 2021 Common Stock - 638.7 $ 32.82 638.7 $ 978,663 2018 Warrants - 11.3 $ 31.91 11.3 November 1, 2021 - November 30, 2021 Common Stock - 224.0 $ 35.66 224.0 $ 970,468 2018 Warrants - 5.3 $ 37.83 5.3 December 1, 2021 - December 31, 2021 Common Stock - 342.6 $ 40.23 342.6 $ 956,679 2018 Warrants - 0 N/A N/A Total 1,221.9 $ 29.98 1,221.9 37 Performance Graph The following stock price performance graph should not be deemed incorporated by reference by any general statement incorporating by reference this Annual Report on Form 10-K into any filing under the Exchange Act or the Securities Act of 1933, as amended, except to the extent that we specifically incorporate this information by reference and shall not otherwise be deemed filed under such acts. The graph below compares the cumulative total return of our Common Stock from January 1, 2017 through December 31, 2021, with the comparable cumulative return of four indices, the Russell 2000 Index, the Nasdaq US Benchmark TR Index, the S&P 400 Index and the Russell 3000 Index. We began showing the cumulative return of the S&P 400 Index and Russell 3000 Index in 2021, as the S&P 400 Index includes companies with comparable market capitalization and the Russell 3000 Index includes our peer group of issuers. The graph plots the growth in value of an initial investment in each of our common shares, the Russell 2000 Index, the Nasdaq US Benchmark Index, the S&P 400 Index and the Russell 3000 Index over the indicated time periods, and as sumes reinvestment of all dividends, if any, paid on the securities. We have not paid any cash dividends and, therefore, the cumulative total return calculation for us is based solely upon share price appreciation and not upon reinvestment of cash dividends. The share price performance shown on the graph is not necessarily indicative of future price performance. ITEM 6. [Reserved] 38 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand WillScot Mobile Mini Holdings Corp. ("WillScot Mobile Mini"), formerly known as WillScot Corporation ("WillScot"), our operations and our present business environment. MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying notes thereto, contained in Part II, Item 8 of this report. The discussion of results of operations in this MD&A is presented on a historical basis, as of or for the year ended December 31, 2021 or prior periods. On July 1, 2020, in connection with the closing of the Merger, Mobile Mini, Inc. ("Mobile Mini") became a wholly-owned subsidiary of WillScot and the Company changed it's name to WillScot Mobile Mini Holdings Corp. As the Merger was completed on July 1, 2020, unless the context otherwise requires, the terms “we”, “us”, “our” “Company” and “WillScot Mobile Mini” as used in these financial statements mean WillScot and its subsidiaries when referring to periods prior to July 1, 2020 (prior to the Merger) and to WillScot Mobile Mini and its subsidiaries when referring to periods on or after July 1, 2020 (after the Merger). The consolidated financial statements were prepared in conformity with accounting principles generally accepted in the US (“GAAP”). We use certain pro forma calculations as non-GAAP financial information that we believe is important for purposes of comparison to the prior period due to the addition of significant acquisitions during the reported financial reporting periods. This information is also used by management to measure the performance of our ongoing operations and analyze our business performance and trends. This information is used by investors for the purposes of development of future projections and earnings growth prospects. In addition, we use certain non-GAAP financial metrics to supplement the GAAP reported results in order to highlight key operational metrics that are used by management to evaluate Company performance. Reconciliations of GAAP financial information to the disclosed non-GAAP measures are provided in the Reconciliation of Non-GAAP Financial Measures section. Executive Summary We are a leading business services provider specializing in innovative flexible work space and portable storage solutions. We service diverse end markets across all sectors of the economy throughout the United States ("US"), Canada, Mexico, and the United Kingdom ("UK"). We are also a leading provider of specialty containment solutions in the US with over 13,000 tank and pump units in our fleet. As of December 31, 2021, our branch network included approximately 275 branch locations and additional drop lots to service our over 85,000 customers. We offer our customers an extensive selection of “Ready to Work” modular space and portable storage solutions with over 162,000 modular space units and over 213,000 portable storage units in our fleet. We primarily lease, rather than sell, our modular and portable storage units to customers, which results in a highly diversified and predictable recurring revenue stream. Over 90% of new lease orders are on our standard lease agreement, pre-negotiated master lease or national account agreements. The initial lease periods vary, and our leases are customarily renewable on a month-to-month basis after their initial term. Our lease revenue is highly predictable due to its recurring nature and the underlying stability and diversification of our lease portfolio. Furthermore, given that our customers value flexibility, they consistently extend their leases or renew on a month-to-month basis such that the average effective duration of our lease portfolio, excluding seasonal portable storage units, is nearly 31 months. We complement our core leasing business by selling both new and used units, allowing us to leverage scale, achieve purchasing benefits and redeploy capital employed in our lease fleet. We remain focused on our core priorities of growing leasing revenues by increasing units on rent, both organically and through our consolidation strategy, delivering “Ready to Work” solutions to our customers with value added products and services ("VAPS"), and on continually improving the overall customer experience. During 2021, the Company acquired certain assets and liabilities of seven regional and local modular space and storage businesses, which consisted primarily of 15,700 storage units and 5,800 modular units. We also achieved a significant milestone in our integration of the WillScot and Mobile Mini businesses, consolidating onto a single ERP system in the second quarter of 2021. This full integration to SAP enabled an expedited integration of the acquisitions. For the year ended December 31, 2021, key drivers of our financial performance included: • Total revenues increased by $527.3 million, or 38.6%, attributable to the addition of Mobile Mini's revenues to our consolidated results once the Merger closed on July 1, 2020 and due to organic revenue growth levers in the business. Leasing revenue increased $410.7 million, or 41.0%, delivery and installation revenue increased $100.5 million, or 36.7%, rental unit sales increased $16.3 million, or 41.9%, and new unit sales revenue decreased $0.2 million, or 0.4%. 39 Key leasing revenue drivers included: – Average modular space units on rent increased 10,876 units, or 10.9%, and average portable storage units on rent increased 77,318 units, or 91.9%. Both increases were primarily driven by the Mobile Mini Merger. Average portable storage units on rent also grew as a result of organic increases in average portable storage units driven by increased economic activity in 2021 and due to units on rent acquired during 2021 from several smaller entities. – Average modular space monthly rental rate increased $86, or 13.1%, to $744 driven by a $124, or 18.1% increase in the NA Modular segment, offset partially by the dilutive impact of lower rates due to mix on the Mobile Mini modular space units. – Average portable storage monthly rental rate increased $12, or 9.1%, to $144 driven primarily by the accretive impact of higher rates from the Mobile Mini portable storage fleet and price increases achieved throughout 2021. – Average utilization for modular space units decreased 10 basis points ("bps") to 70.1% and average utilization for portable storage units increased to 81.5%, from 75.6% from the same period in 2020, driven by higher utilization of the Mobile Mini portable storage units and increased demand for this product category driven by increased economic activity throughout 2021. • NA Modular segment revenue represented 61.4% of consolidated revenue for the year ended December 31, 2021, and increased $113.0 million, or 10.7%, to $1,164.2 million driven by increased leasing revenue of $94.6 million, or 12.3%, an increased sales volumes of $7.1 million, or 9.8%, and a $11.3 million, or 5.4%, increase in delivery and installation revenues. NA Modular revenue drivers for the year ended December 31, 2021 include: – Modular space average monthly rental rate of $809 for the year, increased 18.1% representing a continuation of the long-term price optimization initiative and VAPS penetration opportunities across our portfolio. – Average modular space units on rent for the year decreased 2,350 units, or 2.7% driven by increased returns during 2021 and by lower, although improving, delivery demand as compared to historical levels seen pre-pandemic. However, average modular space units on rent increased 0.1% sequentially from Q3 into Q4 to 84,328, which compares to a 0.5% drop from Q3 to Q4 in 2020. – Average modular space monthly utilization decreased 130 basis points to 67.6% for the year ended December 31, 2021, but only dropped 10 basis points sequentially from Q3 into Q4. • Generated consolidated net income of $160.1 million for the year ended December 31, 2021, representing an increase of $84.8 million versus the year ended December 31, 2020. Net Income Excluding Gain/Loss from Warrants of $186.7 million for the year ended December 31, 2021, represented an increase of $114.8 million, or 159.7%, versus the year ended December 31, 2020, and included a $6.0 million loss on extinguishment of debt related to our financing activities in the first and second quarter of 2021 and $44.6 million of discrete costs expensed in the period related to transaction and integration activities. Discrete costs in the period included $1.4 million of transaction costs, $28.4 million of integration costs, and $14.8 million of restructuring costs, lease impairment expense and other related charges. • Generated Adjusted EBITDA of $740.4 million for the year ended December 31, 2021, representing an increase of $210.1 million, or 39.6%, as compared to 2020. Of this increase, $181.9 million was driven by including a full year of Mobile Mini in our consolidated results, including strong year over year organic growth within the NA Storage, UK, and Tank and Pump segments, and the remainder was driven by strong organic growth across all of our segments. – Adjusted EBITDA in our NA Modular segment, which represents the activities of WillScot prior to the Merger, increased $28.2 million, or 7.1% primarily driven by increases in leasing gross profit driven by increased pricing, including VAPS, partially offset by increased variable costs as a result of higher activity levels in the current year as compared to 2020. – Consolidated Adjusted EBITDA Margin was 39.1% and increased 30 b ps versus prior year driven by the addition of the higher margin Mobile Mini operations. This was partially offset by a 130 bps decrease in the NA Modular segment, driven by an expected higher proportion of delivery and installation revenues to total revenues and increased variable costs. • Generated Free Cash Flow of $303.0 million for the year ended December 31, 2021, representing an increase of $140.7 million as compared to 2020. Net cash provided by operating activities increased $235.1 million to $539.9 million. Net cash used in investing activities, excluding cash acquired or used as part of acquisitions, increased $94.3 million as a result of increased capital spending to support growing demand for new project deliveries across all segments. The referenced Free Cash Flow along with additional net borrowings under the ABL was deployed to acquire storage and modular units of several smaller entities for a total of $147.2 million and to repurchase $363.6 million of our common stock and warrants. This was possible due to our resilient lease revenues and strong margin expansion, reduced interest costs due to our financing activities during the year and our strong financial position. 40 In addition to using GAAP financial measurements, we use Adjusted EBITDA and Free Cash Flow, which are non-GAAP financial measures, to evaluate our operating results. As such, we include in this Annual Report on Form 10-K reconciliations to their most directly comparable GAAP financial measures. These reconciliations and descriptions of why we believe these measures provide useful information to investors as well as a description of the limitations of these measures are included in "Reconciliation of non-GAAP Financial Measures." Significant Developments Refer to the Significant Developments section in Part I, Item 1, Business, herein for further information about the Mobile Mini Merger, other acquisitions, financing activities, share and warrant repurchases, and the impact of COVID-19 on our business. Business Environment and Outlook Our customers operate in a diversified set of end markets, including construction, commercial and industrial, retail and wholesale trade, education, energy and natural resources, government and healthcare. We track several market leading indicators in order to predict demand, including those related to our two largest end markets, the commercial and industrial sector and the construction sector, which collectively accounted for approximately 85% of our revenues in the year ended December 31, 2021. Market fundamentals underlying these end markets were impacted in 2020 as a result of the COVID-19 pandemic which resulted in delivery volume declines, primarily in the second and third quarters, in response to shelter-in-place orders and other market restrictions. During 2021, market fundamentals recovered to varying degrees across our product offerings with portable storage demand back above pre-pandemic levels. Demand for modular space products as measured by new project deliveries have partially recovered from the lower demand seen in 2020, but still remained approximately 4% below pre-pandemic delivery levels in 2021. Real Gross Domestic Product ("real GDP") in the US, where the majority of our revenues are generated, is estimated to have increased by over 5.6% in 2021, and estimates from Dodge Data & Analytics suggest that non-residential construction square footage starts in the US increased by 17% as compared to 2020. Based on our analyses of industry forecasts and macroeconomic indications, we expect continued market recovery in 2022 as we saw during 2021, and expect both real GDP and non-residential construction square footage starts in the US to grow 4-7% in 2022, which would also exceed pre-pandemic levels seen in 2019. Core to our operating model is the ability to redeploy standardized assets across end markets, and we have recently serviced emerging demand in the healthcare and government sectors related to COVID-19, as well as expanded space requirements related to social distancing. Current improving market conditions, potential market catalysts such as increased infrastructure spending, and idiosyncratic growth levers such as continued penetration of our customer base with our VAPS offering, long-term pricing tailwinds, cross-selling between our Modular and Storage segment customers, and other commercial best practice sharing between our segments provide us confidence in our continued organic growth outlook. Components of Our Consolidated Historical Results of Operations Revenue Our revenue consists mainly of leasing, services and sales revenue. We derive our leasing and services revenue primarily from the leasing of modular space and portable storage units. Included in leasing revenue are VAPS, such as furniture, steps, ramps, basic appliances, internet connectivity devices, and other items our customers use in connection with our products. Delivery and installation revenue includes fees that we charge for the delivery, site work, installation, disassembly, unhooking and removal, and other services to our customers for an additional fee as part of our leasing and sales operations. The key drivers of changes in our leasing revenue are: • the number of units in our lease fleet; • the average utilization rate of our lease units; and • the average monthly rental rate per unit, including VAPS. The average utilization rate of our lease units is the ratio of (i) the average number of units in use during a period (which includes units from the time they are leased to a customer until the time they are returned to us) to (ii) the average total number of units available for lease in our fleet during a period. Our average monthly rental rate per unit for a period is equal to the ratio of (i) our rental income for that period including VAPS but excluding delivery and installation services and other leasing-related revenues, to (ii) the average number of lease units rented to our customers during that period. 41 The table below sets forth the average number of units on rent in our lease fleet, the average utilization of our lease units, and the average monthly rental rate per unit, including VAPS: Year Ended December 31, (in thousands, except unit numbers and rates) 2021 2020 2019 Modular space units on rent (average during the period) 110,402 99,526 91,682 Average modular space utilization rate 70.1 % 70.2 % 72.0 % Average modular space monthly rental rate $ 744 $ 658 $ 614 Portable storage units on rent (average during the period) 161,466 84,148 16,878 Average portable storage utilization rate 81.5 % 75.9 % 65.8 % Average portable storage monthly rental rate $ 144 $ 132 $ 120 Average tank and pump solutions rental fleet utilization based on original equipment cost 72.3 % 61.7 % N/A In addition to leasing revenue, we also generate revenue from sales of new and used modular space and portable storage units to our customers, as well as delivery, installation, maintenance, removal services and other incidental items related to accommodation services for our customers. Included in our sales revenue are charges for modifying or customizing sales equipment to customers’ specifications. Gross Profit We define gross profit as the difference between total revenues and cost of revenues. Cost of revenues associated with our leasing business includes payroll and payroll-related costs for branch operations personnel, material and other costs related to the repair, maintenance, storage and transportation of rental equipment. Cost of revenue also includes depreciation expense associated with our rental equipment. Cost of revenues associated with our new unit sales business includes the cost to purchase , assemble, transport and customize units that are sold. Cost of revenues for our rental unit sales consist primarily of the net book value of the unit at date of sale. Selling, General and Administrative Expense Our selling, general and administrative (“SG&A”) expense includes all costs associated with our selling efforts, including marketing costs, marketing salaries and benefits, as well as the salary and commissions of sales personnel. It also includes the leasing of facilities we occupy, professional fees and information systems, our overhead costs, such as salaries of management, administrative and corporate personnel, and integration costs associated with acquisitions and business combinations. Transaction Costs Transaction costs include discrete expenses incurred related to the Merger and other acquisitions. Other Depreciation and Amortization Other depreciation and amortization includes depreciation of our property, plant and equipment, as well as the amortization of our intangible assets. Impairment Losses on Long-Lived Assets We recognize property, plant, and equipment impairment charges when an indicator of impairment is present and the carrying value of assets exceeds the estimated undiscounted cash flows and fair value of the assets. Lease Impairment Expense and Other Related Charges Lease impairment expense and other related charges include impairment of right-of-use ("ROU") assets, gain or loss on the exit of a leased property generally associated with lease termination payments and rent expense for locations which have been closed but have not been abandoned or impaired. Restructuring Costs Restructuring costs include charges associated with exit or disposal activities that meet the definition of restructuring under Financial Accounting Standards Board ("FASB") ASC Topic 420, Exit or Disposal Cost Obligations (“ASC 420”). Our restructuring plans are generally country or region specific and are typically completed within a one-year period. Restructuring costs include one-time termination benefits related to employee separation costs. The restructuring costs incurred in 2021, 2020, and 2019 primarily generally relate to the integration of our acquisitions. Costs related to the integration of acquired businesses that do not meet the definition of restructuring under ASC 420, such as employee training costs, duplicate facility costs, and professional services expenses, are included within SG&A expense. Currency (Gains) Losses, Net Currency (gains) losses, net include unrealized and realized gains and losses on monetary assets and liabilities denominated in foreign currencies other than our functional currency at the reporting date. 42 Other (Income) Expense, Net Other (income) expense, net primarily consists of the gain (loss) on disposal of non-operational property, plant and equipment, other financing related costs and other non-recurring charges. Interest Expense Interest expense consists of the costs of external debt including the Company’s ABL credit facility, 2022 Secured Notes, 2023 Secured Notes, 2025 Secured Notes, 2028 Secured Notes, and the senior unsecured notes due November 15, 2023 (the "Unsecured Notes") and interest on obligations under finance leases. Fair Value (Gain) Loss on Common Stock Warrant Liabilities Fair value (gain) loss on common stock warrant liabilities consists of non-cash gains and losses recorded related to changes in the fair value of common stock warrant liabilities as the common stock warrant liabilities are marked-to-market liabilities. It also includes gains and losses recorded related to the settlement of common stock warrant liabilities. Loss on Extinguishment of Debt In 2021, using cash on hand and borrowings on the 2020 ABL Facility, we redeemed $123.5 million of our 2025 Secured Notes and recorded loss on extinguishment of debt. In 2020, in connection with the Merger and related financing transactions, using proceeds from the 2025 Secured Notes, we redeemed all of our 2022 Secured Notes. We also completed a private offering of our 2028 Secured Notes in August 2020 and used the offering proceeds to repay our 2023 Secured Notes. As a result of these transactions, we recorded losses on extinguishment of debt. Income Tax Expense (Benefit) We are subject to income taxes in the US, Canada, Mexico and the UK. Our overall effective tax rate is affected by a number of factors, such as the relative amounts of income we earn in differing tax jurisdictions, tax law changes, and certain non-deductible expenses such as compensation disallowance. The rate is also affected by discrete items that may occur in any given year, such as legislative enactments. These discrete items may not be consistent from year to year. Income tax expense (benefit), deferred tax assets and liabilities and liabilities for unrecognized tax benefits reflect our best estimate of current and future taxes to be paid. Consolidated Results of Operations Our consolidated statements of net income (los s) for the years ended December 31, 2021, 2020, and 2019 are presented below. The below results only include results from Mobile Mini for the periods subsequent to the Merger and do not include any incremental unrealized cost savings, revenue growth, or pro forma adjustments that management expects to result from the integration of the acquired business. Years Ended December 31, 2021 vs. 2020 Change 2020 vs 2019 Change 2021 2020 2019 Revenues: Leasing and services revenue: Leasing $ 1,412,123 $ 1,001,447 $ 744,185 $ 410,676 $ 257,262 Delivery and installation 374,682 274,156 220,057 100,526 54,099 Sales revenue: New units 52,882 53,093 59,085 (211) (5,992) Rental units 55,210 38,949 40,338 16,261 (1,389) Total revenues 1,894,897 1,367,645 1,063,665 527,252 303,980 Costs: Costs of leasing and services: Leasing 317,061 227,376 213,151 89,685 14,225 Delivery and installation 306,861 220,102 194,107 86,759 25,995 Costs of sales: New units 35,377 34,841 42,160 536 (7,319) Rental units 29,853 24,772 26,255 5,081 (1,483) Depreciation of rental equipment 237,537 200,581 174,679 36,956 25,902 Gross profit 968,208 659,973 413,313 308,235 246,660 43 Expenses: Selling, general and administrative 511,446 360,626 271,004 150,820 89,622 Transaction costs 1,375 64,053 — (62,678) 64,053 Other depreciation and amortization 78,030 43,249 12,395 34,781 30,854 Impairment losses on long-lived assets — — 2,848 — (2,848) Lease impairment expense and other related charges 2,888 4,876 8,674 (1,988) (3,798) Restructuring costs 11,868 6,527 3,755 5,341 2,772 Currency losses (gains), net 548 (355) (688) 903 333 Other expense (income), net 1,780 (1,718) (2,200) 3,498 482 Operating income 360,273 182,715 117,525 177,558 65,190 Interest expense 117,987 119,886 122,504 (1,899) (2,618) Fair value loss (gain) on common stock warrant liabilities 26,597 (3,461) 109,622 30,058 (113,083) Loss on extinguishment of debt 5,999 42,401 8,755 (36,402) 33,646 Income (loss) before income tax 209,690 23,889 (123,356) 185,801 147,245 Income tax expense (benefit) 49,546 (51,451) (2,191) 100,997 (49,260) Net income (loss) 160,144 75,340 (121,165) 84,804 196,505 Net income (loss) attributable to non-controlling interest, net of tax — 1,213 (421) (1,213) 1,634 Net income (loss) attributable to WillScot common shareholders $ 160,144 $ 74,127 $ (120,744) $ 86,017 $ 194,871 Cash Flow Data: Net cash from operating activities $ 539,902 $ 304,812 $ 172,566 $ 235,090 $ 132,246 Net cash from investing activities $ (384,047) $ (125,360) $ (152,582) $ (258,687) $ 27,222 Net cash from financing activities $ (167,887) $ (158,958) $ (26,063) $ (8,929) $ (132,895) Other Financial Data: Consolidated Adjusted EBITDA(a) $ 740,393 $ 530,307 $ 356,548 $ 210,086 $ 173,759 Free Cash Flow(a) $ 303,027 $ 162,279 $ 19,984 $ 140,748 $ 142,295 Adjusted Gross Profit(a) $ 1,205,745 $ 860,554 $ 587,992 $ 345,191 $ 272,562 Net CAPEX(a) $ 236,875 $ 142,533 $ 152,582 $ 94,342 $ (10,049) Balance Sheet Data (end of year): Cash and cash equivalents $ 12,699 $ 24,937 $ 3,045 $ (12,238) $ 21,892 Rental equipment, net $ 3,080,981 $ 2,931,646 $ 1,944,436 $ 149,335 $ 987,210 Total assets $ 5,773,599 $ 5,572,205 $ 2,897,649 $ 201,394 $ 2,674,556 Total debt, excluding current portion $ 2,694,319 $ 2,453,809 $ 1,632,589 $ 240,510 $ 821,220 Total shareholders’ equity $ 1,996,763 $ 2,063,873 $ 490,609 $ (67,110) $ 1,573,264 (a) WillScot Mobile Mini presents Adjusted EBITDA, Free Cash Flow, Adjusted Gross Profit and Net CAPEX, which are measurements not calculated in accordance with GAAP and are defined below in the section "Reconciliation of non-GAAP Financial Measures," because they are key metrics used by management to assess financial performance. Our business is capital intensive, and these additional metrics allow management to further evaluate its operating performance. See below for reconciliations of non-GAAP financial measures. 44 Quarterly Consolidated Results for the Year Ende d December 31, 2021 (in thousands, except for units on rent and monthly rental rate) Q1 Q2 Q3 Q4 Full Year Revenue $ 425,323 $ 461,102 $ 490,552 $ 517,920 $ 1,894,897 Gross profit $ 213,380 $ 222,810 $ 253,549 $ 278,469 $ 968,208 Adjusted EBITDA $ 163,585 $ 175,495 $ 190,149 $ 211,164 $ 740,393 Net income $ 4,447 $ 20,371 $ 61,103 $ 74,223 $ 160,144 Net CAPEX $ 30,911 $ 57,481 $ 51,954 $ 96,529 $ 236,875 Modular space units on rent (average during the period) 110,349 110,468 109,832 110,961 110,402 Average modular space utilization rate 70.3 % 70.3 % 70.1 % 69.8 % 70.1 % Average modular space monthly rental rate $ 679 $ 736 $ 767 $ 792 $ 744 Portable storage units on rent (average during the period) 145,360 151,736 163,248 185,518 161,466 Average portable storage utilization rate 74.4 % 77.7 % 83.9 % 88.4 % 81.5 % Average portable storage monthly rental rate $ 135 $ 139 $ 145 $ 153 $ 144 Average tank and pump solutions rental fleet utilization based on original equipment cost 67.4 % 71.2 % 74.8 % 75.5 % 72.3 % Earnings per share - basic $ 0.02 $ 0.09 $ 0.27 $ 0.33 $ 0.71 Earnings per share - diluted $ 0.02 $ 0.08 $ 0.26 $ 0.32 $ 0.69 Weighted average shares - basic 228,293,197 228,406,812 225,998,202 223,436,603 226,518,931 Weighted average shares - diluted 234,720,295 236,536,713 231,868,397 229,965,703 232,793,902 Quarterly Consolidated Results for the Year Ended December 31, 2020 (in thousands, except for units on rent and monthly rental rate) Q1 Q2 Q3 Q4 Full Year Revenue $ 255,821 $ 256,862 $ 417,315 $ 437,647 $ 1,367,645 Gross profit $ 106,190 $ 109,964 $ 209,564 $ 234,255 $ 659,973 Adjusted EBITDA $ 89,544 $ 97,520 $ 163,559 $ 179,684 $ 530,307 Net income (loss) $ 91,655 $ (14,130) $ (6,051) $ 3,866 $ 75,340 Net income (loss) attributable to Willscot Mobile Mini $ 91,785 $ (15,473) $ (6,051) $ 3,866 $ 74,127 Net CAPEX $ 30,540 $ 36,383 $ 33,323 $ 42,287 $ 142,533 Modular space units on rent (average during the period) 87,989 87,096 111,227 111,793 99,526 Average modular space utilization rate 69.2 % 68.5 % 70.6 % 70.9 % 70.2 % Average modular space monthly rental rate $ 653 $ 669 $ 640 $ 670 $ 658 Portable storage units on rent (average during the period) 16,346 15,869 143,840 160,538 84,148 Average portable storage utilization rate 64.1 % 62.5 % 73.2 % 81.2 % 75.9 % Average portable storage monthly rental rate $ 119 $ 120 $ 131 $ 136 $ 132 Average tank and pump solutions rental fleet utilization based on original equipment cost N/A N/A 58.2 % 65.2 % 61.7 % Earnings (loss) per share - basic $ 0.84 $ (0.14) $ (0.03) $ 0.02 $ 0.44 Earnings (loss) per share - diluted $ 0.05 $ (0.14) $ (0.03) $ 0.02 $ 0.25 Weighted average shares - basic 109,656,646 110,692,426 226,649,993 228,637,826 169,230,177 Weighted average shares - diluted 112,672,997 110,692,426 226,649,993 233,625,946 177,268,383 45 Quarterly Consolidated Results for the Year Ended December 31, 2019 (in thousands, except for units on rent and monthly rental rate) Q1 Q2 Q3 Q4 Full Year Revenue $ 253,685 $ 263,713 $ 268,222 $ 278,045 $ 1,063,655 Gross profit $ 103,331 $ 101,484 $ 99,308 $ 109,190 $ 413,313 Adjusted EBITDA $ 83,354 $ 87,554 $ 87,424 $ 98,216 $ 356,548 Net loss $ (27,574) $ (56,836) $ (1,197) $ (35,558) $ (121,165) Net loss attributable to Willscot Mobile Mini $ (26,816) $ (56,004) $ (1,492) $ (36,432) $ (120,744) Net CAPEX $ 41,814 $ 43,199 $ 37,761 $ 29,808 $ 152,582 Modular space units on rent (average during the period) 93,309 92,300 91,233 90,013 91,682 Average modular space utilization rate 72.4 % 71.9 % 71.2 % 70.7 % 72.0 % Average modular space monthly rental rate $ 575 $ 611 $ 630 $ 641 $ 614 Portable storage units on rent (average during the period) 17,419 16,544 16,416 16,944 16,878 Average portable storage utilization rate 66.1 % 63.3 % 63.0 % 66.1 % 65.8 % Average portable storage monthly rental rate $ 119 $ 121 $ 123 $ 118 $ 120 Loss per share - basic $ (0.25) $ (0.52) $ (0.01) $ (0.33) $ (1.11) Loss per share - diluted $ (0.25) $ (0.52) $ (0.02) $ (0.33) $ (1.11) Weighted average shares - basic 108,523,269 108,693,924 108,720,857 108,793,847 108,683,820 Weighted average shares - diluted 108,523,269 108,693,924 109,508,360 108,793,847 108,683,820 Comparison of Years Ended December 31, 2021 and 2020 Revenue: Total revenue increased $527.3 million, or 38.6%, to $1,894.9 million for the year ended December 31, 2021 from $1,367.6 million for the year ended December 31, 2020. Leasing revenue increased $410.7 million, or 41.0%, as compared to the same period in 2020 driven by an increase of 88,194, or 48.0%, total average modular space and portable storage units on rent and improved pricing and value-added products in our NA Modular segment. Delivery and installation revenues increased $100.5 million, or 36.7%, due to increased overall activity. New unit sales decreased $0.2 million, or 0.4%, and rental unit sales increased $16.3 million, or 41.9%. Total average modular space and portable storage units on rent for the years ended December 31, 2021 and 2020 were 271,868 and 183,674, respectively. The increase was due primarily to the units acquired as part of the Merger with Mobile Mini, which closed on July 1, 2020. In total, modular space average units on rent increased 10,876 units, or 10.9%, for the year ended December 31, 2021 as compared to the year ended December 31, 2020. Modular space average monthly rental rates increased 13.1% to $744 for the year ended December 31, 2021. Improved pricing was driven by a continuation of the long-term price optimization and VAPS penetration opportunities across our portfolio, partially offset by the dilutive impact of lower rates on the Mobile Mini modular space units due to product mix. Portable storage average units on rent increased by 77,318 units, or 91.9%, for the year ended December 31, 2021. Average portable storage monthly rental rates of $144 represented an increase of $12, or 9.1%, compared to the year ended December 31, 2020. This increase was driven by the accretive impact of higher rates from the Mobile Mini portable storage fleet. The average modular space unit utilization rate during the year ended December 31, 2021 was 70.1%, as compared to 70.2% during the same period in 2020. The average portable storage unit utilization rate during the year ended December 31, 2021 was 81.5%, as compared to 75.9% during the same period in 2020. The increase in average portable storage utilization rate was driven by higher utilization on the acquired Mobile Mini units. Gross Profit: Our gross profit percentage was 51.1% and 48.3% for the years ended December 31, 2021 and 2020, respectively. Our gross profit percentage, excluding the effects of depreciation ("adjusted gross profit percentage"), was 63.6% and 62.9% for the years ended December 31, 2021 and 2020, respectively. Gross profit increased $308.2 million, or 46.7%, to $968.2 million for the year ended December 31, 2021 from $660.0 million for the year ended December 31, 2020. The increase in gross profit is a result of a $321.0 million increase in leasing gross profit, increased delivery and installation gross profit of $13.7 million, and increased new and rental unit sale margins of $10.4 million. These increases were primarily a result of increased average monthly rental rates in the NA Modular segment on modular space units as well as recent acquisitions. These increases were offset partially by increased depreciation of $36.9 million as a result of acquired fleet and capital investments made over the past twelve months in our existing rental equipment. SG&A Expense: SG&A expense increased $150.8 million, or 41.8%, to $511.4 million for the year ended December 31, 2021, compared to $360.6 million for the year ended December 31, 2020. The primary driver of the increase is related to 46 additional SG&A exp ense as a result of operating a larger business due to the Merger. SG&A expense for the NA Storage, UK Storage, and Tank and Pump segments totaled $197.4 million for the year ended December 31, 2021. Transaction Costs: Transaction costs decreased $62.7 million to $1.4 million for the year ended December 31, 2021. Transaction costs were primarily related to the Merger. Other Depreciation and Amortization: Other depreciation and amortization increased $34.8 million, or 80.6%, to $78.0 million for the year ended December 31, 2021, compared to $43.2 million for the year ended December 31, 2020. The increase was driven by a $21.9 million increase in other depreciation and an $12.9 million increase in amortization of intangible assets primarily as a result of Mobile Mini being included in the 2021 results for a full year as compared to two quarters in 2020. Lease Impairment Expense and Other Related Charges: Lease impairment expense and other related charges were $2.9 million for the year ended December 31, 2021 as compared to $4.9 million for the year ended December 31, 2020. The decrease in lease impairment expense and other related charges of $2.0 million is a result of fewer closed locations in 2021 as compared to 2020. Restructuring Costs: Restructuring costs were $11.9 million for the year ended December 31, 2021 as compared to $6.5 million for the year ended December 31, 2020. The restructuring charges in the year ended December 31, 2021 were primarily due to employee terminations costs as a result of the elimination of positions due to the Merger. The restructuring charges in the year ended December 31, 2020 were primarily due to employee terminations costs as a result of the Merger and, to a lesser extent, reductions in force across our branch network in response to COVID-19 economic conditions. Currency (Gains) Losses, net: Currency (gains) losses, net decreased by $0.9 million to a $0.5 million loss for the year ended December 31, 2021 compared to a $0.4 million gain for the year ended December 31, 2020. The decrease in currency (gains) losses, net, are primarily attributable to the impact of foreign currency exchange rate changes on loans and borrowings and intercompany receivables and payables denominated in a currency other than the subsidiaries’ functional currency. Other (Income) Expense, Net: Other (income) expense, net was $1.8 million of expense for the year ended December 31, 2021 and $1.7 million of income for the year ended December 31, 2020, primarily related to the reversal of non-operating liabilities of $2.5 million for the year ended December 31, 2020. Interest Expense: Interest expense decreased $1.9 million, or 1.6%, to $118.0 million for the year ended December 31, 2021 from $119.9 million for the year ended December 31, 2020. The decrease was driven by the redemption of the 2022 Secured Notes and the 2023 Secured Notes in the third quarter of 2020 and the redemption of $123.5 million of our 2025 Secured Notes during 2021. Fair Value (Gain) Loss on Common Stock Warrant Liabilities: The fair value of common stock warrant liabilities decreased $30.1 million to a loss of $26.6 million for the year ended December 31, 2021. The decrease was primarily attributable to the change in estimated fair value of common stock warrant liabilities. Loss on Extinguishment of Debt: We recorded a loss on extinguishment of debt of $6.0 million for the year ended December 31, 2021 related to the redemption premium and write off of unamortized deferred financing costs associated with the redemption of $123.5 million of our 2025 Secured Notes. For the year ended December 31, 2020, as a result of the Merger and the related financing transactions, we recorded a loss on extinguishment of debt of $42.4 million. This loss on extinguishment of debt was comprised of the redemption premium and write off of unamortized deferred financing costs associated with the following: (i) $15.2 million due to the redemption of the 2022 Secured Notes, (ii) $22.7 million due to the redemption of the 2023 Secured Notes, and (iii) $4.4 million associated with the 2017 ABL Facility. Income Tax Expense: Income tax expense increased $101.0 million to a $49.5 million expense for the year ended December 31, 2021 compared to a $51.5 million benefit for the year ended December 31, 2020. The increase in income tax expense was a result of higher pre-tax income partially offset by a reduction of reserves for uncertain tax positions of $11.7 million and increased by nondeductible permanent adjustments and a remeasurement of deferred tax liabilities in the UK resulting from the tax rate change in the UK enacted during the year ended December 31, 2021. The income tax benefit recognized in December 31, 2020 was primarily a result of the reversal of our valuation allowance of $56.5 million based on our assessment of deferred tax assets. 47 Comparison of Years Ended December 31, 2020 and 2019 Revenue: Total revenue increased $303.9 million, or 28.6%, to $1,367.6 million for the year ended December 31, 2020 from $1,063.7 million for the year ended December 31, 2019. The increase was primarily driven by the addition of Mobile Mini's revenues to our consolidated results. The Merger closed on July 1, 2020 and drove $316.5 million of the year over year increase. Leasing revenue increased $257.2 million, or 34.6%, as compared to the same period in 2019 driven by an increase of 75,114 average modular space and portable storage units on rent as a result of the Merger, and improved pricing and value-added products in our NA Modular segment. Delivery and installation revenues increased $54.1 million, or 24.6%, due to increased overall activity as a result of the Merger, but was partially offset by lower delivery volumes due to the impact of new project cancellations and delays in the second and third quarter of 2020 as a result of the COVID-19 pandemic. reduced new unit sales which decreased $6.0 million, or 10.2%, and rental unit sales which decreased $1.4 million, or 3.5%, as a result of lower demand in 2020. Total average modular space and portable storage units on rent for the years ended December 31, 2020 and 2019 were 183,674 and 108,560, respectively. The increase was due primarily to the units acquired as part of the Merger, partially offset by lower delivery volumes in the NA Modular segment, including reduced demand for new projects as a result of the COVID-19 global pandemic disruption on social and business activities. In total, modular space average units on rent increased 7,844 units, or 8.6%, for the year ended December 31, 2020 as compared to the year ended December 31, 2019. Modular space average monthly rental rates increased 7.2% to $658 for the year ended December 31, 2020. Improved pricing was driven by a continuation of the long-term price optimization and VAPS penetration opportunities across our portfolio, partially offset by the dilutive impact of lower rates on the Mobile Mini modular space units due to product mix. Portable storage average units on rent increased by 67,270 units, or 398.6%, for the year ended December 31, 2020. Average portable storage monthly rental rates of $132 represented an increase of $12, or 10.0%, compared to the year ended December 31, 2019. This increase was driven by the accretive impact of higher rates from the Mobile Mini portable storage fleet. The average modular space unit utilization rate during the year ended December 31, 2020 was 70.2%, as compared to 72.0% during the same period in 2019. This decrease was driven by lower demand as a result of the COVID-19 pandemic, partially offset by higher utilization on units acquired as part of the Merger. The average portable storage unit utilization rate during the year ended December 31, 2020 was 75.9%, as compared to 65.8% during the same period in 2019. The increase in average portable storage utilization rate was driven by higher utilization on the acquired Mobile Mini units. Gross Profit: Our gross profit percentage was 48.3% and 38.9% for the years ended December 31, 2020 and 2019, respectively. Our gross profit percentage, excluding the effects of depreciation ("adjusted gross profit percentage"), was 62.9% and 55.3% for the years ended December 31, 2020 and 2019, respectively. Gross profit increased $246.7 million, or 59.7%, to $660.0 million for the year ended December 31, 2020 from $413.3 million for the year ended December 31, 2019. The increase in gross profit is a result of a $243.0 million increase in leasing gross profit, increased delivery and installation gross profit of $28.1 million, and increased new and rental unit sale margins of $1.5 million. These increases were primarily a result of increased revenues due to the Merger and to favorable average monthly rental rates in the NA Modular segment on modular space units, as well as modular leasing cost savings due to lower delivery volumes that were achieved as a result of actions we took to scale back variable labor and material costs in response to lower demand for new project deliveries. These increases were offset partially by lower delivery and installation activity volumes in the NA Modular segment in the second and third quarters of 2020 due to reduced delivery demand and by increased depreciation of $25.9 million as a result of fleet acquired in the Merger and capital investments made over the past twelve months in our existing rental equipment. SG&A Expense: SG&A expense increased $89.6 million, or 33.1%, to $360.6 million for the year ended December 31, 2020, compared to $271.0 million for the year ended December 31, 2019. The primary driver of the increase is related to additional SG&A expense as a result of operating a larger business due to the Merger. SG&A expense for the NA Storage, UK Storage, and Tank and Pump segments totaled $90.8 million for the year ended December 31, 2020. Transaction Costs: Transaction costs increased $64.1 million for the year ended December 31, 2020. Transaction costs were related to the Merger. Other Depreciation and Amortization: Other depreciation and amortization increased $30.8 million, or 248.4%, to $43.2 million for the year ended December 31, 2020, compared to $12.4 million for the year ended December 31, 2019. $18.2 million of the increase was driven by increased Other depreciation as a result of the inclusion of Mobile Mini beginning in the third quarter of 2020 and $13.4 million was driven by the amortization of the customer relationship intangible asset acquired in the Merger. Impairment losses on Long-Lived Assets: Impairment losses on long-lived assets were $2.8 million for the year ended December 31, 2019 related to the valuation of properties classified as assets held for sale as a result of the ModSpace acquisition. No similar impairments occurred during the year ended December 31, 2020. Lease Impairment Expense and Other Related Charges: Lease impairment expense and other related charges were $4.9 million for the year ended December 31, 2020 as compared to $8.7 million for the year ended December 31, 2019. The decrease in Lease impairment expense and other related charges of $3.8 million in 2020 is a result of fewer remaining closed locations in 2020 due to successful lease exits related to the ModSpace acquisition. 48 Restructuring Costs: Restructuring costs were $6.5 million for the year ended December 31, 2020 as compared to $3.8 million for the year ended December 31, 2019. The restructuring charges in the year ended December 31, 2020 were primarily due to employee terminations costs as a result of the Merger and, to a lesser extent, reductions in force across our branch network in response to COVID-19 economic conditions. The restructuring charges in the year ended December 31, 2019 related primarily to employee termination costs related to the ModSpace and Acton acquisitions and integrations. Currency (Gains) Losses, net: Currency (gains) losses, net decreased by $0.3 million to a $0.4 million gain for the year ended December 31, 2020 compared to a $0.7 million gain for the year ended December 31, 2019. The decrease in currency (gains) losses, net, are primarily attributable to the impact of foreign currency exchange rate changes on loans and borrowings and intercompany receivables and payables denominated in a currency other than the subsidiaries’ functional currency. Other Income, Net: Other income, net was $1.7 million and $2.2 million for the year ended December 31, 2020 and 2019, respectively. Other income, net of $1.7 million for the year ended December 31, 2020 was primarily related to the reversal of non-operating liabilities of $2.5 million. Other income, net of $2.2 million for the year ended December 31, 2019 was driven primarily by the receipt of $3.2 million of insurance proceeds related to assets damaged during Hurricane Harvey. Interest Expense: Interest expense decreased $2.6 million, or 2.1%, to $119.9 million for the year ended December 31, 2020 from $122.5 million for the year ended December 31, 2019. The decrease was driven by lower interest rates on our ABL facilities, the repayment of our 10% Unsecured Notes in 2019 and the lower interest rates on our 2025 Secured Notes and 2028 Secured Notes, partially offset by an $800 million increase in debt outstanding as a result of the Merger. Fair Value (Gain) Loss on Common Stock Warrant Liabilities: The fair value of common stock warrant liabilities increased $113.1 million, to a $3.5 million gain for the year ended December 31, 2020 from a $109.6 million loss for the year ended December 31, 2019. The increase was primarily attributable to the change in estimated fair value of common stock warrant liabilities. Loss on Extinguishment of Debt: As a result of the Merger and the related financing transactions, we recorded a loss on extinguishment of debt of $42.4 million in the year ended December 31, 2020. This loss on extinguishment of debt was comprised of the redemption premium and write off of unamortized deferred financing costs associated with the following: (i) $15.2 million due to the redemption of the 2022 Secured Notes, (ii) $22.7 million due to the redemption of the 2023 Secured Notes, and (iii) $4.4 million associated with the 2017 ABL Facility. For the year ended December 31, 2019, we recorded $8.8 million of losses on extinguishment of debt consisting of $1.5 million related to the $30 million redemption of the 2022 Secured Notes at a redemption price of 103% and $7.2 million related to the redemption of the 2023 senior unsecured notes at a redemption price of 102.0%, plus a make-whole premium of 1.1%, for total premiums of 3.1%. Income Tax Benefit: Income tax benefit increased $49.3 million to a $51.5 million benefit for the year ended December 31, 2020 compared to a $2.2 million benefit for the year ended December 31, 2019. The increase in income tax benefit was driven by a reversal of our valuation allowance of $56.5 million based on our assessment of deferred tax assets, a reduction of reserves for uncertain tax positions of $11.2 million, partially offset by tax expense from pre-tax income and non-deductible expense in the year ended December 31, 2020 as compared to discrete benefits recorded in the year ended December 31, 2019. Business Segments The Company operates in four reportable segments as follows: NA Modular, NA Storage, UK Storage and Tank and Pump. The NA Modular segment represents the activities of the North America modular business. NA Storage represents the activities of the North America portable storage business. The UK Storage business represents the results of all modular and portable storage operations in the UK. The Tank and Pump segment represents the results of all operations for Tank and Pump services. Prior to the third quarter of 2021, the NA Modular segment represented the activities of WillScot historical segments prior to the Merger and the NA Storage, UK Storage and Tank and Pump segments represented the segments reported by Mobile Mini prior to the Merger. During the third quarter of 2021, the majority of the portable storage product business within the NA Modular segment was transitioned to the NA Storage segment, and associated revenues, expenses, and operating metrics beginning in the third quarter of 2021 were transferred to the NA Storage segment, representing a shift of approximately $5.0 million of revenue and gross margin per quarter from the NA Modular segment to the NA Storage segment. This adjustment was not made to the historical segment results of prior periods, as we believe such adjustments to be immaterial. The following tables and discussion summarize our reportable segment financial information for the years ended December 31, 2021, 2020 and 2019 . Consistent with the presentation of our consolidated financial statements, the below segment results only include results from Mobile Mini for the periods subsequent to the Merger and do not include any unrealized incremental cost savings, revenue growth or pro forma adjustments that management expects to result from the integration of the merged business. A Summary Business Segment Supplemental Unaudited Pro Forma Financial Information section has been included in this MD&A in order to provide period over period comparable financial information for the NA Storage, UK Storage and Tank and Pump reporting segments as these segments were not included in our reported results for the first six months of 2020. 49 Business Segment Results Years Ended December 31, 2021, 2020 and 2019 Year Ended December 31, 2021 (in thousands, except for units on rent and rates) NA Modular NA Storage UK Storage Tank and Pump Total Revenue $ 1,164,179 $ 508,802 $ 111,025 $ 110,891 $ 1,894,897 Gross profit $ 496,445 $ 348,259 $ 71,242 $ 52,262 $ 968,208 Adjusted EBITDA $ 423,004 $ 226,600 $ 49,039 $ 41,750 $ 740,393 Capex for rental equipment $ 187,495 $ 45,426 $ 27,830 $ 17,747 $ 278,498 Average modular space units on rent 84,524 16,780 9,098 — 110,402 Average modular space utilization rate 67.6 % 78.5 % 82.0 % — % 70.1 % Average modular space monthly rental rate $ 809 $ 582 $ 434 $ — $ 744 Average portable storage units on rent 7,312 128,463 25,691 — 161,466 Average portable storage utilization rate 68.8 % 80.9 % 90.2 % — % 81.5 % Average portable storage monthly rental rate $ 131 $ 155 $ 88 $ — $ 144 Average tank and pump solutions rental fleet utilization based on original equipment cost N/A N/A N/A 72.3 % 72.3 % Year Ended December 31, 2020 (in thousands, except for units on rent and rates) NA Modular NA Storage UK Storage Tank and Pump Total Revenue $ 1,051,162 $ 221,829 $ 46,361 $ 48,293 $ 1,367,645 Gross profit $ 451,642 $ 156,785 $ 27,642 $ 23,904 $ 659,973 Adjusted EBITDA $ 394,805 $ 99,837 $ 17,822 $ 17,843 $ 530,307 Capex for rental equipment $ 153,327 $ 14,969 $ 1,693 $ 2,394 $ 172,383 Average modular space units on rent 86,874 8,333 4,319 — 99,526 Average modular space utilization rate 68.9 % 80.6 % 80.8 % — % 70.2 % Average modular space monthly rental rate $ 685 $ 526 $ 367 $ — $ 658 Average portable storage units on rent 15,823 56,415 11,910 — 84,148 Average portable storage utilization rate 63.5 % 78.2 % 85.9 % — % 75.9 % Average portable storage monthly rental rate $ 122 $ 147 $ 76 $ — $ 132 Average tank and pump solutions rental fleet utilization based on original equipment cost N/A N/A N/A 61.7 % 61.7 % Year Ended December 31, 2019 (in thousands, except for units on rent and rates) NA Modular NA Storage UK Storage Tank and Pump Total Revenue $ 1,063,665 $ — $ — $ — $ 1,063,665 Gross profit $ 413,313 $ — $ — $ — $ 413,313 Adjusted EBITDA $ 356,548 $ — $ — $ — $ 356,548 Capex for rental equipment $ 205,106 $ — $ — $ — $ 205,106 Average modular space units on rent 91,682 — — — 91,682 Average modular space utilization rate 72.0 % — % — % — % 72.0 % Average modular space monthly rental rate $ 614 $ — $ — $ — $ 614 Average portable storage units on rent 16,878 — — — 16,878 Average portable storage utilization rate 65.8 % — % — % — % 65.8 % Average portable storage monthly rental rate $ 120 $ — $ — $ — $ 120 Average tank and pump solutions rental fleet utilization based on original equipment cost N/A N/A N/A — % — % 50 NA Modular Segment Comparison of Years Ended December 31, 2021 and 2020 Revenue: Total revenue increased $113.0 million, or 10.7%, to $1,164.2 million for the year ended December 31, 2021 from $1,051.2 million for the year ended December 31, 2020. The increase was primarily driven by increased leasing revenue of $94.6 million, or 12.3%, compared to 2020, increased delivery and installation revenue of $11.3 million, or 5.4% compared to 2020 and increased sales revenue of $7.1 million, or 9.8% compared to 2020. Average modular space monthly rental rates increased 18.1% for the year ended December 31, 2021 to $809 driven by continuation of the long-term price optimization and VAPS penetration opportunities across our portfolio. Improved pricing was partially offset by lower volumes as average modular space units on rent decreased by 2,350 units, or 2.7%, year over year. The decrease was driven primarily by lower delivery volumes in the first half of the year. Gross Profit: Gross profit increased $44.8 million, or 9.9%, to $496.4 million for the year ended December 31, 2021 from $451.6 million for the year ended December 31, 2020. The increase in gross profit was driven by a $59.9 million increase in leasing gross profit driven by improved pricing and VAPS. The increase in gross profit from leasing revenues was partially offset by an $11.9 million increase in depreciation of rental equipment primarily as a result of capital investments made over the past twelve months in our existing rental equipment for the year ended December 31, 2021. Adjusted EBITDA: Adjusted EBITDA increased $28.2 million, or 7.1%, to $423.0 million for the year ended December 31, 2021 from $394.8 mil lion for the year ended December 31, 2020. The increase was driven by higher leasing gross profits discussed above, partially offset by increases in SG&A, excluding discrete and other items of $24.2 million. SG&A increases were primarily related to increases in variable compensation of $8.5 million, occupancy costs of $4.3 million and office costs of $4.0 million. Capex for rental equipment: Capex for rental equipment increased $34.2 million, or 22.3%, to $187.5 million for the year ended December 31, 2021 from $153.3 million for the year ended December 31, 2020. Net CAPEX increased $21.1 million, or 17.4%, to $142.4 million. The increase was mainly driven by fleet and VAPS purchases, as well as refurbishments. Comparison of Years Ended December 31, 2020 and 2019 Revenue: Total revenue decreased $12.5 million, or 1.2%, to $1,051.2 million for the year ended December 31, 2020 from $1,063.7 million for the year ended December 31, 2019. The decrease was primarily driven by declines in new unit sales revenue, which decreased $17.2 million, or 29.1%, compared to 2019, and by declines in rental unit sales revenue, which decreased $9.4 million, or 23.3%. Additionally, delivery and installation revenues declined $12.0 million, or 5.5%, driven by lower delivery volumes related to the impact of new project cancellations and delays as a result of COVID-19 global pandemic disruption on social and business activities. These declines were partially offset by an increase in leasing revenue of $26.1 million, or 3.5%. Average modular space monthly rental rates increased 11.6% for the year ended December 31, 2020 to $685 driven by continuation of the long-term price optimization and VAPS penetration opportunities across our portfolio. Improved pricing was partially offset by lower volumes as average modular space units on rent decreased by 4,808 units, or 5.2% year over year. The decrease was driven primarily by lower delivery volumes, including reduced demand for new projects since mid- March of 2020 as a result of COVID-19. Gross Profit: Gross profit increased $38.3 million, or 9.3%, to $451.6 million for the year ended December 31, 2020 from $413.3 million for the year ended December 31, 2019. The increase in gross profit was driven by a $44.9 million increase in leasing gross profit driven by improved pricing and VAPS, as well as by lower modular leasing cost due to lower delivery demand in the second and third quarter of 2020 and reduced variable costs. The increase in gross profit from leasing revenues was partially offset by a $7.9 million increase in depreciation of rental equipment primarily as a result of capital investments made over the past twelve months in our existing rental equipment for the year ended December 31, 2020. Adjusted EBITDA: Adjusted EBITDA increased $38.3 million, or 10.7%, to $394.8 million for the year ended December 31, 2020 from $356.5 million for the year ended December 31, 2019. The increase was driven by higher leasing gross profits discussed above, partially offset by increases in SG&A, excluding discrete and other items, of $6.8 million. SG&A increases were primarily related to increases in occupancy and office costs, insurance costs, and increased bad debt expense, partially offset by decreased travel and entertainment costs due to the COVID-19 pandemic. Capex for rental equipment: Capex for rental equipment decreased $51.8 million, or 25.3%, to $153.3 million for the year ended December 31, 2020 from $205.1 million for the year ended December 31, 2019. Net CAPEX also decreased $31.3 million, or 20.5%, to $121.3 million. The decreases for both were driven by decreased spend for refurbishments and VAPS due to less constrained fleet and reduced demand as a result of the COVID-19 pandemic, and cost improvements experienced over the prior year related to better unit selection and scoping on refurbishments. Decrease to Net CAPEX was also partially driven by lower demand for sales of rental units. 51 Reconciliation of non-GAAP Financial Measures In addition to using GAAP financial measurements, we use certain non-GAAP financial measures to evaluate our operating results. As such, we include in this Annual Report on Form 10-K reconciliations to their most directly comparable GAAP financial measures. Set forth below are definitions and reconciliations to the nearest comparable GAAP measure of certain non-GAAP financial measures used in this Annual Report on Form 10-K along with descriptions of why we believe these measures provide useful information to investors as well as a description of the limitations of these measures. Each of these non-GAAP financial measures has limitations as an analytical tool and should not be considered in isolation from, or as a substitute for analysis of, results reported under GAAP. Our measurements of these metrics may not be comparable to similarly titled measures of other companies. Adjusted EBITDA We define EBITDA as net income (loss) plus interest (income) expense, income tax expense (benefit), depreciation and amortization. Our adjusted EBITDA ("Adjusted EBITDA") reflects the following further adjustments to EBITDA to exclude certain non-cash items and the effect of what we consider transactions or events not related to our core business operations: • Currency (gains) losses, net: on monetary assets and liabilities denominated in foreign currencies other than the subsidiaries’ functional currency. Substantially all such currency gains (losses) are unrealized and attributable to financings due to and from affiliated companies. • Goodwill and other impairment charges related to non-cash costs associated with impairment charges to goodwill, other intangibles, rental fleet and property, plant and equipment. • Restructuring costs, lease impairment expense, and other related charges associated with restructuring plans designed to streamline operations and reduce costs including employee and lease termination costs. • Transaction costs including legal and professional fees and other transaction specific related costs. • Costs to integrate acquired companies, including outside professional fees, non-capitalized costs associated with system integrations, non-lease branch and fleet relocation expenses, employee training costs, and other costs required to realize cost or revenue synergies. • Non-cash charges for stock compensation plans. • Gains and losses resulting from changes in fair value and extinguishment of common stock warrant liabilities. • Other expense, including consulting expenses related to certain one-time projects, financing costs not classified as interest expense, and gains and losses on disposals of property, plant, and equipment. Our Chief Operating Decision Maker ("CODM") evaluates business segment performance utilizing Adjusted EBITDA as shown in the reconciliation of the Company’s consolidated net income (loss) to Adjusted EBITDA below. Management believes that evaluating segment performance excluding such items is meaningful because it provides insight with respect to the intrinsic and ongoing operating results of the Company and captures the business performance of the segments, inclusive of indirect costs. Adjusted EBITDA has limitations as an analytical tool, and you should not consider the measure in isolation or as a substitute for net income (loss), cash flow from operations or other methods of analyzing WillScot Mobile Mini’s results as reported under US GAAP. Some of these limitations are: • Adjusted EBITDA does not reflect changes in, or cash requirements for our working capital needs; • Adjusted EBITDA does not reflect our interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness; • Adjusted EBITDA does not reflect our tax expense or the cash requirements to pay our taxes; • Adjusted EBITDA does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments; • Adjusted EBITDA does not reflect the impact on earnings or changes resulting from matters that we consider not to be indicative of our future operations; • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements; and • other companies in our industry may calculate Adjusted EBITDA differently, limiting its usefulness as a comparative measure. Because of these limitations, Adjusted EBITDA should not be considered as discretionary cash available to reinvest in the growth of our business or as measures of cash that will be available to meet our obligations. 52 The following tables provide an unaudited reconciliation of Net income (loss) to Adjusted EBITDA: 2021 (in thousands) Q1 Q2 Q3 Q4 Full Year Net income $ 4,447 $ 20,371 $ 61,103 $ 74,223 $ 160,144 Income tax expense 10,481 18,828 6,644 13,593 49,546 Income before income tax 14,928 39,199 67,747 87,816 209,690 Loss on extinguishment of debt 3,185 2,814 — — 5,999 Interest expense 29,964 29,212 29,201 29,610 117,987 Fair value loss (gain) on common stock warrant liabilities 27,207 (610) — — 26,597 Depreciation and amortization 74,022 84,515 75,276 81,754 315,567 Currency losses, net 36 33 127 352 548 Restructuring costs, lease impairment expense and other related charges 4,395 7,434 2,457 470 14,756 Transaction costs 844 — 303 228 1,375 Integration costs 7,342 7,622 8,247 5,213 28,424 Stock compensation expense 3,514 4,707 6,259 4,509 18,989 Other (1,852) 569 532 1,212 461 Adjusted EBITDA $ 163,585 $ 175,495 $ 190,149 $ 211,164 $ 740,393 2020 (in thousands) Q1 Q2 Q3 Q4 Full Year Net income (loss) $ 91,655 $ (14,130) $ (6,051) $ 3,866 $ 75,340 Income tax expense (benefit) 790 (285) (66,675) 14,719 (51,451) Income (loss) before income tax 92,445 (14,415) (72,726) 18,585 23,889 Loss on extinguishment of debt — — 42,401 — 42,401 Interest expense 28,257 28,519 33,034 30,076 119,886 Fair value (gain) loss on common stock warrant liabilities (95,329) 26,963 22,303 42,602 (3,461) Depreciation and amortization 49,022 48,377 71,704 74,727 243,830 Currency losses (gains), net 898 (380) (371) (502) (355) Restructuring costs, lease impairment expense and other related charges 1,601 2,143 4,798 2,861 11,403 Transaction costs 9,431 1,619 52,191 812 64,053 Integration costs 1,685 2,153 7,083 7,417 18,338 Stock compensation expense 1,787 2,227 2,944 2,921 9,879 Other (253) 314 198 185 444 Adjusted EBITDA $ 89,544 $ 97,520 $ 163,559 $ 179,684 $ 530,307 Adjusted Gross Profit and Adjusted Gross Profit Percentage We define Adjusted Gross Profit as gross profit plus depreciation on rental equipment. Adjusted Gross Profit Percentage is defined as Adjusted Gross Profit divided by revenue. Adjusted Gross Profit and Adjusted Gross Profit Percentage are not measurements of our financial performance under GAAP and should not be considered as an alternative to gross profit, gross profit percentage, or other performance measures derived in accordance with GAAP. In addition, our measurement of Adjusted Gross Profit and Adjusted Gross Profit Percentage may not be comparable to similarly titled measures of other companies. Management believes that the presentation of Adjusted Gross Profit and Adjusted Gross Profit Percentage provides useful information regarding our results of operations and assists in analyzing the underlying performance of our business. 53 The following table provides an unaudited reconciliation of gross profit to Adjusted Gross Profit and Adjusted Gross Profit Percentage: Year Ended December 31, (in thousands) 2021 2020 Revenue (A) $ 1,894,897 $ 1,367,645 Gross profit (B) $ 968,208 $ 659,973 Depreciation of rental equipment 237,537 200,581 Adjusted Gross Profit (C) $ 1,205,745 $ 860,554 Gross Profit Percentage (B/A) 51.1 % 48.3 % Adjusted Gross Profit Percentage (C/A) 63.6 % 62.9 % Net Income Excluding Gain/Loss from Warrants We define Net Income Excluding Gain/Loss from Warran ts as net income plus or minus the impact of the change in the fair value of the common stock warrant liability. Management believes that the presentation of our financial statements excluding the impact of the mark-to-market adjustment provides useful information regarding our results of operations and assists in the review of our actual operating performance. The following tables provide an unaudited reconciliation of Net income (loss) to Net Income (Loss) Excluding Gain Loss from Warrants: 2021 (in thousands) Q1 Q2 Q3 Q4 Full Year Net income $ 4,447 $ 20,371 $ 61,103 $ 74,223 $ 160,144 Fair value loss (gain) on common stock warrant liabilities 27,207 (610) — — 26,597 Net Income Excluding Gain/Loss from Warrants $ 31,654 $ 19,761 $ 61,103 $ 74,223 $ 186,741 2020 (in thousands) Q1 Q2 Q3 Q4 Full Year Net income (loss) $ 91,655 $ (14,130) $ (6,051) $ 3,866 $ 75,340 Fair value (gain) loss on common stock warrant liabilities (95,329) 26,963 22,303 42,602 (3,461) Net (Loss) Income Excluding Gain/Loss from Warrants $ (3,674) $ 12,833 $ 16,252 $ 46,468 $ 71,879 Net CAPEX We define N et CAPEX as purchases of rental equipment and refurbishments and purchases of property, plant and equipment (collectively, "Total Capital Expenditures"), less proceeds from the sale of rental equipment and proceeds from the sale of property, plant and equipment (collectively, "Total Proceeds"), which are all included in cash flows from investing activities. Management believes that the presentation of Net CAPEX provides useful information regarding the net capital invested into our rental fleet and property, plant and equipment each year to assist in analyzing the performance of our business. The following tables provide unaudited reconciliations of Net CAPEX on a historical quarterly basis: Quarterly Consolidated Results for the Year Ended December 31, 2021 (in thousands) Q1 Q2 Q3 Q4 Full Year Total Capital Expenditures $ 59,842 $ 75,425 $ 63,760 $ 109,969 $ 308,996 Total Proceeds 28,931 17,944 11,806 13,440 72,121 Net CAPEX $ 30,911 $ 57,481 $ 51,954 $ 96,529 $ 236,875 54 Quarterly Consolidated Results for the Year Ended December 31, 2020 (in thousands) Q1 Q2 Q3 Q4 Full Year Total Capital Expenditures $ 41,166 $ 41,702 $ 48,484 $ 57,485 $ 188,837 Total Proceeds 10,626 5,319 15,161 15,198 46,304 Net CAPEX $ 30,540 $ 36,383 $ 33,323 $ 42,287 $ 142,533 Free Cash Flow We define Free Cash Flow as net cash provided by operating activities, less purchases of, and proceeds from, rental equipment and property, plant and equipment, which are all included in cash flows from investing activities. Management believes that the presentation of Free Cash Flow provides useful additional information concerning cash flow available to fund our capital allocation alternatives. The following tables provide a reconciliation of net cash provided by operating activities to Free Cash Flow: Quarterly Consolidated Results for the Year Ended December 31, 2021 (in thousands) Q1 Q2 Q3 Q4 Full Year Net cash provided by operating activities $ 122,071 $ 139,537 $ 130,447 $ 147,847 $ 539,902 Purchase of rental equipment and refurbishments (52,535) (65,282) (60,374) (100,307) (278,498) Proceeds from sale of rental equipment 15,202 15,235 11,597 13,176 55,210 Purchase of property, plant and equipment (7,307) (10,143) (3,386) (9,662) (30,498) Proceeds from the sale of property, plant and equipment 13,729 2,709 209 264 16,911 Free Cash Flow $ 91,160 $ 82,056 $ 78,493 $ 51,318 $ 303,027 Quarterly Consolidated Results for the Year Ended December 31, 2020 (in thousands) Q1 Q2 Q3 Q4 Full Year Net cash provided by operating activities $ 38,348 $ 75,379 $ 61,368 $ 129,717 $ 304,812 Purchase of rental equipment and refurbishments (39,648) (40,034) (42,591) (50,110) (172,383) Proceeds from sale of rental equipment 6,786 5,316 13,179 13,668 38,949 Purchase of property, plant and equipment (1,518) (1,668) (5,893) (7,375) (16,454) Proceeds from the sale of property, plant and equipment 3,840 3 1,982 1,530 7,355 Free Cash Flow $ 7,808 $ 38,996 $ 28,045 $ 87,430 $ 162,279 Supplemental Pro Forma Information The following pro forma financial information has been prepared for WillScot Mobile Mini, for the year ended December 31, 2020. This pro forma statement of operations presents the historical consolidated statement of operations of WillScot Mobile Mini, giving effect to the following items as if they had occurred on January 1, 2019: (i) the Merger with Mobile Mini; (ii) borrowings under the Company’s 2025 Secured Notes and the 2020 ABL Facility; (iii) extinguishment of the Mobile Mini line of credit and senior notes assumed in the Merger and subsequently repaid; (iv) repayment of the 2017 ABL Facility and the 2022 Secured Notes repaid contemporaneously with the Merger; (v) the transaction costs incurred in connection with the Merger; and (vi) elimination of non-controlling interest in connection with the Sapphire Exchange as contemplated by the Merger. The adjustments presented on the pro forma financial statement have been identified and presented to provide relevant information necessary for an accurate understanding of the combined company following the transactions and events described above. We believe this pro forma financial statement is important for purposes of comparison to the prior period due to the addition of a significant acquisition during the reported financial reporting periods. This information is used by management to measure the performance of ongoing operations and analyze our business performance and trends. This 55 information is also useful to investors in order for them to better understand the combined historical financial results of the legacy businesses for comparative purposes and for the purposes of development of future projections and earnings growth prospects. The pro forma financial information set forth below is based upon available information and assumptions that we believe are reasonable and is for illustrative purposes only. The financial results may have been different if the transactions described above had been completed sooner. You should not rely on the pro forma financial information as being indicative of the historical results that would have been achieved if these transactions and events had been completed as of January 1, 2019. The pro forma combined financial information below should be read in conjunction with the consolidated financial statements and related notes of the Company included elsewhere in this Annual Report on Form 10-K. All pro forma adjustments and their underlying assumptions are described more fully in the notes below. Accounting Policies During the preparation of this pro forma combined financial statement, we assessed whether there were any material differences between the Company’s accounting policies and Mobile Mini’s accounting policies. The assessment performed did not identify any material differences and, as such, this pro forma combined financial statement does not adjust for or assume any differences in accounting policies between WillScot and Mobile Mini. Pro forma Presentation The following pro forma combined financial information and associated notes are based on the historical financial statement of WillScot and Mobile Mini as described below. In preparing the pro forma combined statement of operations for the year ended December 31, 2020, certain historical financial information for Mobile Mini was reclassified to align to the reporting classifications of WillScot. The pro forma combined statement of operations for the year ended December 31, 2020 is based on, derived from, and should be read in conjunction with, WillScot’s historical financial statement. The aforementioned pro forma financial statement is also based on, derived from, and should be read in conjunction with Mobile Mini's historical financial statement. Year Ended December 31, 2020 (in thousands) WillScot Mobile Mini Holdings Corp. Historical Mobile Mini (as reclassified) Pro Forma Adjustments Pro Forma Combined Revenues: Leasing and services revenue: Leasing $ 1,001,447 $ 208,374 $ — $ 1,209,821 Delivery and installation 274,156 59,999 — 334,155 Sales revenue: New units 53,093 8,402 — 61,495 Rental units 38,949 7,465 — 46,414 Total revenues 1,367,645 284,240 — 1,651,885 Costs: Costs of leasing and services: Leasing 227,376 28,584 — 255,960 Delivery and installation 220,102 42,476 — 262,578 Costs of sales: New units 34,841 5,457 — 40,298 Rental units 24,772 4,625 — 29,397 Depreciation of rental equipment (b) 200,581 15,360 2,334 218,275 Gross profit 659,973 187,738 (2,334) 845,377 Expenses: Selling, general and administrative 360,626 96,170 456,796 Transaction costs (a) 64,053 16,799 (80,852) — Other depreciation and amortization (c) 43,249 19,695 11,397 74,341 Lease impairment expense and other related charges 4,876 — — 4,876 Restructuring costs 6,527 — — 6,527 56 Currency (gains) losses, net (355) 39 — (316) Other (income) expense, net (1,718) 186 — (1,532) Operating income 182,715 54,849 67,121 304,685 Interest expense (d) 119,886 16,974 (9,808) 127,052 Fair value gain on common stock warrant liabilities (3,461) — — (3,461) Loss on extinguishment of debt (e) 42,401 — (19,682) 22,719 Income before income tax 23,889 37,875 96,611 158,375 Income tax (benefit) expense (f) (51,451) 12,330 73,670 34,549 Net income 75,340 25,545 22,941 123,826 Net income attributable to non-controlling interest, net of tax (g) 1,213 — (1,213) — Net income attributable to WillScot Mobile Mini $ 74,127 $ 25,545 $ 24,154 $ 123,826 Notes to Pro Forma Statement (a) Represents the elimination of non-recurring transaction costs incurred as a result of the Merger. (b) Represents the adjustment for depreciation of rental fleet relating to the increase in fair value purchase accounting adjustments as a result of the Merger. (c) Represents the differential in other depreciation and amortization expense related to the fair value purchase accounting adjustments as a result of the Merger. (d) Reflects the adjustment for interest expense related to our debt structure after the Merger as though the following had occurred on January 1, 2019 (i) borrowings under the 2020 ABL Facility, (ii) borrowings under the 2025 Secured Notes, (iii) repayment of the 2017 ABL Facility, (iv) repayment of the 2022 Secured Notes and repayment of the Mobile Mini debt assumed at the Merger. (e) Represents the elimination of the one-time loss on extinguishment of debt in connection with the repayment of the 2022 Secured Notes and the 2017 ABL Facility. (f) Reflects the adjustment to recognize the income tax impacts of the unaudited pro forma adjustments for which a tax expense is recognized using a US federal and state statutory tax rate of 25.5%. This rate may vary from the effective tax rates of the historical and combined businesses. In addition, the year ended December 31, 2020 included an adjustment of $56.8 million to eliminate the reversal of valuation allowance as a result of reassessment of the realizability of deferred tax assets as a result of the Merger. (g) Reflects the adjustment for the extinguishment of non-controlling interest as a result of the Sapphire Exchange on June 30, 2020. The pro forma adjustment to interest expense consists of the following: Year Ended December 31, (in thousands) 2020 ABL Facility interest $ (2,561) 2022 Secured Notes interest (10,631) 2025 Secured Notes interest 18,247 Mobile Mini debt interest (15,921) Deferred financing fee amortization 1,058 Net pro forma adjustment $ (9,808) 57 Reconciliation of Pro Forma Adjusted EBITDA The following unaudited table provides a reconciliation of proforma Net income to pro forma unaudited Adjusted EBITDA: Year Ended December 31, (in thousands) 2020 Net income $ 123,826 Income tax expense 34,549 Loss on extinguishment of debt 22,719 Fair value gain on common stock warrant liabilities (3,461) Interest expense 127,052 Depreciation and amortization 292,616 Currency gains, net (316) Restructuring costs, lease impairment expense, other related charges 11,403 Integration costs 18,338 Stock compensation expense 15,280 Other 4,459 Adjusted EBITDA $ 646,465 Summary Business Segment Supplemental Pro Forma Financial Information As a result of the Merger and the significant related financing transactions, we believe presenting supplemental pro forma financial information is beneficial to the readers of the financial statements as we believe this is a better representation of the go-forward operations of the combined company, and we believe this information is useful to investors in order for them to better understand the combined historical financial results of the legacy businesses for comparative purposes. The following table sets forth key metrics used by management to run the business on a pro forma basis as if the Merger and related financing transactions had occurred on January 1, 2019. Refer to the Supplemental Pro Forma Financial Information section above for the full reconciliation of the statement of operations. Following the Merger, we modified our management structure and expanded from two reporting segments to four segments: NA Modular, NA Storage, UK Storage and Tank and Pump. Prior to the Merger, WillScot had two reportable segments, US Modular and Other North America Modular. These two segments were combined to create the NA Modular segment, which represented the legacy WillScot operations prior to the third quarter of 2021. Prior to the third quarter of 2021, the other segments, NA Storage, UK Storage, and Tank and Pump aligned to the legacy operations and segments reported by Mobile Mini. During the third quarter of 2021, the majority of the portable storage product business within the NA Modular segment was transitioned to the NA Storage segment, and associated revenues, expenses, and operating metrics beginning in the third quarter of 2021 were transferred to the NA Storage segment. The reporting segments are aligned with how we operate and analyze our business results. 58 Pro Forma Comparison of Years ended December 31, 2021 and 2020: Pro Forma Combined Year Ended December 31, 2021 vs. 2020 (in thousands) 2021 2020 $ Change % Change Revenue $ 1,894,897 $ 1,651,885 $ 243,012 14.7 % Selling, general and administrative expenses $ 511,446 $ 456,796 $ 54,650 12.0 % Net income $ 160,144 $ 123,826 $ 36,318 29.3 % Adjusted EBITDA $ 740,393 $ 646,465 $ 93,928 14.5 % Other Financial Data: Adjusted EBITDA - NA Modular $ 423,004 $ 394,805 $ 28,199 7.1 % Adjusted EBITDA - NA Storage 226,600 184,601 41,999 22.8 % Adjusted EBITDA - UK Storage 49,039 31,080 17,959 57.8 % Adjusted EBITDA - Tank and Pump 41,750 35,979 5,771 16.0 % Combined Adjusted EBITDA $ 740,393 $ 646,465 $ 93,928 14.5 % NA Modular - Quarterly Results Pro Forma Quarterly Results for the year ended December 31, 2021: (in thousands, except for units on rent and monthly rental rate) Q1 Q2 Q3 Q4 Total Revenue $ 266,224 $ 289,382 $ 299,051 $ 309,522 $ 1,164,179 Gross profit $ 113,002 $ 116,136 $ 127,854 $ 139,453 $ 496,445 Adjusted EBITDA $ 97,371 $ 103,545 $ 106,825 $ 115,263 $ 423,004 Capex for rental equipment $ 39,135 $ 49,364 $ 31,789 $ 67,207 $ 187,495 Average modular space units on rent 84,795 84,754 84,218 84,328 84,524 Average modular space utilization rate 67.6 % 67.7 % 67.6 % 67.5 % 67.6 % Average modular space monthly rental rate $ 737 $ 801 $ 834 $ 866 $ 809 Average portable storage units on rent 14,903 13,301 493 552 7,312 Average portable storage utilization rate 60.3 % 69.8 % 48.0 % 62.7 % 68.8 % Average portable storage monthly rental rate $ 124 $ 133 $ 179 $ 228 $ 131 Pro Forma Quarterly Results for the year ended December 31, 2020: (in thousands, except for units on rent and monthly rental rate) Q1 Q2 Q3 Q4 Total Revenue $ 255,821 $ 256,862 $ 267,867 $ 270,612 $ 1,051,162 Gross profit $ 106,190 $ 109,964 $ 112,079 $ 123,409 $ 451,642 Adjusted EBITDA $ 89,544 $ 97,520 $ 100,281 $ 107,460 $ 394,805 Capex for rental equipment $ 39,648 $ 40,034 $ 34,249 $ 39,396 $ 153,327 Average modular space units on rent 87,988 87,096 86,400 86,011 86,874 Average modular space utilization rate 69.2 % 68.5 % 68.3 % 68.2 % 68.9 % Average modular space monthly rental rate $ 653 $ 669 $ 693 $ 724 $ 685 Average portable storage units on rent 16,346 15,869 15,473 15,603 15,823 Average portable storage utilization rate 64.1 % 62.5 % 61.3 % 62.6 % 63.5 % Average portable storage monthly rental rate $ 119 $ 120 $ 124 $ 124 $ 122 The NA Modular segment represents the activities of WillScot prior to the Merger. As a result, there are no differences between pro forma results and actual results on a reported basis. Please see comparison of results for the years ended December 31, 2021 and 2020 within "Business Segment Results" above. 59 NA Storage - Quarterly Results Pro Forma Quarterly Results for the year ended December 31, 2021 (in thousands, except for units on rent and monthly rental rate) Q1 Q2 Q3 Q4 Total Revenue $ 107,748 $ 115,794 $ 133,897 $ 151,363 $ 508,802 Gross profit $ 72,619 $ 75,721 $ 92,496 $ 107,423 $ 348,259 Adjusted EBITDA $ 46,322 $ 49,526 $ 59,123 $ 71,629 $ 226,600 Capex for rental equipment $ 3,472 $ 8,773 $ 11,920 $ 21,261 $ 45,426 Average modular space units on rent 16,439 16,360 16,316 18,006 16,780 Average modular space utilization rate 79.4 % 78.4 % 77.6 % 78.8 % 78.5 % Average modular space monthly rental rate $ 535 $ 573 $ 602 $ 617 $ 582 Average portable storage units on rent 105,810 112,862 137,123 158,055 128,463 Average portable storage utilization rate 73.9 % 76.1 % 83.2 % 88.1 % 80.9 % Average portable storage monthly rental rate $ 148 $ 151 $ 155 $ 163 $ 155 Pro Forma Quarterly Results for the Year ended December 31, 2020: (in thousands, except for units on rent and monthly rental rate) Q1 Q2 Q3 Q4 Total Revenue $ 103,495 $ 92,826 $ 104,493 $ 117,336 $ 418,150 Gross profit $ 71,400 $ 66,639 $ 73,384 $ 83,401 $ 294,824 Adjusted EBITDA $ 43,994 $ 40,770 $ 46,465 $ 53,372 $ 184,601 Capex for rental equipment $ 5,200 $ 7,272 $ 7,234 $ 7,735 $ 27,441 Average modular space units on rent 15,509 15,757 16,383 16,948 16,152 Average modular space utilization rate 77.8 % 78.6 % 80.4 % 80.9 % 79.4 % Average modular space monthly rental rate $ 497 $ 463 $ 505 $ 547 $ 504 Average portable storage units on rent 105,441 101,463 105,221 120,439 108,167 Average portable storage utilization rate 73.1 % 70.6 % 73.4 % 83.0 % 75.1 % Average portable storage monthly rental rate $ 146 $ 143 $ 145 $ 150 $ 146 Pro Forma Comparison of Years ended December 31, 2021 and 2020 NA Storage Revenue: Total revenu e increased $90.6 million, or 21.7%, to $508.8 million for the year ended December 31, 2021 from $418.2 million for the year ended December 31, 2020. Leasing revenues for the year ended December 31, increased year-over-year by $73.7 million, or 23.5% to $387.6 million. The average number of portable storage units on rent increased 20,296 units, or 18.8% to 128,463 compared to 108,167 units in 2020. The increase is associated with year over year growth in the broader construction segment and continuous pricing optimization, as well as due to the impact of acquisitions closed in the third and fourth quarter of 2021. Gross Profit: Gross profit increased $53.5 million, or 18.1%, for the year ended December 31, 2021 to $348.3 million from $294.8 million for the year ended December 31, 2020. This gross profit increase was driven primarily by a $56.7 million, or 20.4%, year-over-year increase within leasing and an increase in delivery and installation gross profit of $2.3 million partially offset by a decrease of $0.3 million in sales. Adjusted EBITDA: Adjusted EBITDA increased $42.0 million, or 22.8%, to $226.6 million for the year ended December 31, 2021 from $184.6 million for the year ended December 31, 2020 and the margin expanded to 44.5% from 44.1%. Excluding integration and stock-based compensation, SG&A expense increased due to increased costs for personnel of approximately $6.9 million and $1.0 million due to increased travel. Capex for Rental Equipment: Purchases of rental equipment and refurbishments of $45.4 million for the year ended December 31, 2021 were $18.0 million higher than for the year ended December 31, 2020. Rental fleet expenditures were reduced significantly during the year ended December 31, 2020 in response to COVID-19, especially after the first quarter of 2020, and were primarily to meet demand for specific products, largely ground level offices. 60 UK Storage - Quarterly Results Pro Forma Quarterly Results for the year ended December 31, 2021: (in thousands, except for units on rent and monthly rental rate) Q1 Q2 Q3 Q4 Total Revenue $ 27,007 $ 28,432 $ 28,099 $ 27,487 $ 111,025 Gross profit $ 16,493 $ 17,937 $ 18,876 $ 17,936 $ 71,242 Adjusted EBITDA $ 11,064 $ 12,328 $ 13,255 $ 12,392 $ 49,039 Capex for rental equipment $ 6,770 $ 4,226 $ 11,649 $ 5,185 $ 27,830 Average modular space units on rent 9,115 9,354 9,298 8,627 9,098 Average modular space utilization rate 83.8 % 84.3 % 83.4 % 76.7 % 82.0 % Average modular space monthly rental rate $ 404 $ 438 $ 454 $ 439 $ 434 Average portable storage units on rent 24,647 25,573 25,632 26,911 25,691 Average portable storage utilization rate 89.2 % 91.8 % 89.1 % 90.6 % 90.2 % Average portable storage monthly rental rate $ 82 $ 88 $ 90 $ 91 $ 88 Pro Forma Quarterly Results for the year ended December 31, 2020: (in thousands, except for units on rent and monthly rental rate) Q1 Q2 Q3 Q4 Total Revenue $ 20,197 $ 17,154 $ 21,653 $ 24,708 $ 83,712 Gross profit $ 11,372 $ 10,991 $ 12,671 $ 14,971 $ 50,005 Adjusted EBITDA $ 6,405 $ 6,853 $ 8,306 $ 9,516 $ 31,080 Capex for rental equipment $ 337 $ 522 $ 677 $ 1,016 $ 2,552 Average modular space units on rent 7,850 7,912 8,444 8,834 8,262 Average modular space utilization rate 74.2 % 74.6 % 79.1 % 82.4 % 77.6 % Average modular space monthly rental rate $ 326 $ 313 $ 356 $ 377 $ 344 Average portable storage units on rent 23,328 22,870 23,146 24,496 23,462 Average portable storage utilization rate 83.7 % 82.2 % 83.2 % 88.6 % 84.4 % Average portable storage monthly rental rate $ 73 $ 70 $ 75 $ 78 $ 74 Pro Forma Comparison of Years ended December 31, 2021 and 2020 UK Storage Revenue: Total revenue increased $27.3 million, or 32.6%, to $111.0 million for the year ended December 31, 2021 from $83.7 million for the year ended December 31, 2020. Total Revenue in GBP increased $15.7 million, or 24.1% to $80.7 million for the year ended December 31, 2021 from $65.0 million for the year ended December 31, 2020 . Leasing revenues increased 37.5% and delivery and installation revenues increased 44.6%, while sales revenue decreased 33.8%. Within leasing activity, average monthly rental rates for modular space units and portable storage units increased 26.2% and 18.9% year-over-year, respectively. These increases were supplemented by a 10.1% increase in modular space average units on rent and a 9.5% increase in average portable storage units on rent. Gross Profit: Gross profit increased $21.2 million, or 42.4%, to $71.2 million for the year ended December 31, 2021 from $50 million for the year ended December 31, 2020. Gross profit on leasing increased 39.4% year-over-year. Depreciation on rental equipment also increased by $3.5 million. Adjusted EBITDA: Adjusted EBITDA increased $17.9 million, or 57.7%, to $49.0 million for the year ended December 31, 2021 from $31.1 million for the year ended December 31, 2020. a nd the margin increased to 44.2% from 37.1% . The increase resulted primarily from the favorable gross profit discussed above. Capex for Rental Equipment: Purchases of rental equipment and refurbishments of $27.8 million for the year ended December 31, 2021 were $25.2 million higher than for the year ended December 31, 2020. Rental fleet expenditures were reduced in 2020 in response to COVID-19. 61 Tank and Pump - Quarterly Results Pro Forma Quarterly Results for the year ended December 31, 2021: (in thousands, except for units on rent and monthly rental rate) Q1 Q2 Q3 Q4 Total Revenue $ 24,344 $ 27,494 $ 29,505 $ 29,548 $ 110,891 Gross profit $ 11,266 $ 13,016 $ 14,323 $ 13,657 $ 52,262 Adjusted EBITDA $ 8,828 $ 10,096 $ 10,946 $ 11,880 $ 41,750 Capex for rental equipment $ 3,158 $ 2,919 $ 5,016 $ 6,654 $ 17,747 Average tank and pump solutions rental fleet utilization based on original equipment cost 67.4 % 71.2 % 74.8 % 75.5 % 72.3 % Pro Forma Quarterly Results for the year ended December 31, 2020: (in thousands, except for units on rent and monthly rental rate) Q1 Q2 Q3 Q4 Total Revenue $ 26,884 $ 23,684 $ 23,302 $ 24,991 $ 98,861 Gross profit $ 13,279 $ 11,723 $ 11,430 $ 12,474 $ 48,906 Adjusted EBITDA $ 9,477 $ 8,659 $ 8,507 $ 9,336 $ 35,979 Capex for rental equipment $ 4,514 $ 941 $ 431 $ 1,963 $ 7,849 Average tank and pump solutions rental fleet utilization based on original equipment cost 66.4 % 60.5 % 58.2 % 65.2 % 62.6 % Pro Forma Comparison of Years ended December 31, 2021 and 2020: Tank and Pump Revenue: Total revenue increased $12.0 million, or 12.2%, to $110.9 milli on for the year ended December 31, 2021 fro m $98.9 million for the year ended December 31, 2020. Utilization based on OEC increased from 62.6% for the year ended December 31, 2020 to 72.3% for year ended December 31, 2021 and experienced an increase in average rental rates compared to the prior-year period. In addition, utilization levels grew sequentially in each quarter, finishing the fourth quarter of 2021 at an average OEC utilization rate of 75.5%. Year-over-year leasing revenue increased $11.7 million, or 17.9%, while delivery and installation revenue increased $1.0 million, or 3.5%. Sales revenues decreased $0.7 million compared to the prior-year period. Gross Profit: Gross profit increased $3.4 million, or 6.9%, for the year ended December 31, 2021 to $52.3 million from $48.9 million for the year ended December 31, 2020. Gross profit for leasing activity increased $ 6.4 million driven by the increased revenue as discussed above offset by increased costs of $ 5.3 million, including increased repairs and maintenance of $8.1 million . Gross profit for delivery and installation activity decreased $1.7 million reflecting higher revenues offset by a $2.8 million increase in expense, including $0.7 million higher expense for fuel. Depreciation of rental equipment decreased $1.2 million. Adjusted EBITDA: Adjusted EBITDA increased $5.8 million, or 16.0%, to $41.8 million for the year ended December 31, 2021 from $36.0 million for the year ended December 31, 2020 and the margin expanded to 37.6% from 36.4%. The increase in Adjusted EBITDA was driven by the higher gross profit discussed above, offset by a $1.6 million reduction SG&A expense including $1.7 million in decreased employee costs. Capex for rental equipment: Purchases of rental equipment and refurbishments were reduced significantly during 2020 due to the unfavorable environment for this segment. For the year ended December 31, 2021, expenditures of $17.7 million were $9.9 million higher than for the year ended December 31, 2020. Liquidity and Capital Resources Overview WillScot Mobile Mini is a holding company that derives its operating cash flow from its operating subsidiaries. Our principal sources of liquidity include cash generated by operating activities from our subsidiaries, borrowings under the 2020 ABL Facility, and sales of equity and debt securities. We believe that our liquidity sources and operating cash flows are sufficient to address our operating, debt service and capital requirements over the next twelve months. We have consistently accessed the debt and equity capital markets both opportunistically and as necessary to support the growth of our business, desired leverage levels, and other capital allocation priorities. Subsequent to the Merger, 62 we believe we have ample liquidity in the 2020 ABL Facility and are generating substantial free cash flow, which together support both organic operations and other capital allocation priorities as they arise. We continue to review available acquisition opportunities with the awareness that any such acquisition may require us to incur additional debt to finance the acquisition and/or to issue shares of our Common Stock or other equity securities as acquisition consideration or as part of an overall financing plan. In addition, we will continue to evaluate alternatives to optimize our capital structure, which could include the issuance or repurchase of additional unsecured and secured debt, equity securities and/or equity-linked securities. There can be no assurance as to the timing of any such issuance. If we obtain additional capital by issuing equity, the interests of our existing stockholders will be diluted. If we incur additional indebtedness, that indebtedness may contain significant financial and other covenants that may significantly restrict our operations. Availability of financing and the associated terms are inherently dependent on the debt and equity capital markets and subject to change. From time to time, we may also seek to streamline our capital structure and improve our financial position through refinancing or restructuring our existing debt or retiring certain of our securities for cash or other consideration. In anticipation of the Merger, on June 15, 2020, we completed a private offering of $650.0 million in aggregate principal amount of the 2025 Secured Notes. The proceeds from the 2025 Secured Notes of $650.0 million were used to consummate the Merger and the related financing transactions, which included repayment of the 2022 Secured Notes, repayment of the Mobile Mini senior notes, and payment of certain fees and expenses related to the Merger and the related financing transactions. The 2025 Secured Notes mature on June 15, 2025 and bear interest at a rate of 6.125% per annum. Interest is payable semi-annually on June 15 and December 15 of each year, beginning December 15, 2020. During 2021, we redeemed $123.5 million of the 2025 Secured Notes. This repayment was funded by internally generated cash flow and lower cost borrowings under the 2020 ABL facility. On July 1, 2020, in connection with the completion of the Merger, we entered into the 2020 ABL Facility, which provides for revolving credit facilities in the aggregate principal amount of up to $2.4 billion, consisting of: (i) a senior secured asset-based US dollar revolving credit facility in the aggregate principal amount of $2.0 billion (the “US Facility”) and (ii) a $400 million senior secured asset-based multicurrency revolving credit facility (the "Multicurrency Facility," and together with the US Facility, the “2020 ABL Facility”). Borrowing availability under the 2020 ABL Facility is equal to the lesser of $2.4 billion and the applicable borrowing bases. The borrowing bases are a function of, among other things, the value of the assets in the relevant collateral pool of which our rental equipment represents the largest component. On July 1, 2020, in connection with the completion of the Merger, approximately $1.47 billion of proceeds from the 2020 ABL Facility were used to repay the 2017 ABL Facility, repay Mobile Mini's asset-backed lending facility, and pay fees and expenses related to the Merger and the related financing transactions. On August 11, 2020, we redeemed $49.0 million of our 2023 Secured Notes at a redemption price of 103.0% plus accrued and unpaid interest using proceeds from the 2020 ABL Facility. At December 31, 2021, we had $0.7 billion of available borrowing capacity under the 2020 ABL Facility. On August 25, 2020, we completed a private offering of $500.0 million in aggregate principal amount of the 2028 Secured Notes. Proceeds from the 2028 Secured notes were used to repay the $441.0 million remaining outstanding principal of the 2023 Secured Notes at a redemption price of 103.438% plus accrued and unpaid interest. The 2028 Secured Notes mature on August 15, 2028 and bear interest at a rate of 4.625% per annum. Interest is payable semi-annually on August 15 and February 15 of each year, beginning February 25, 2021. Cash Flows Significant factors driving our liquidity include cash flows generated from operating activities and capital expenditures. Our ability to fund our capital needs will be affected by our ongoing ability to generate cash from operations and access to capital markets. The following summarizes our change in cash and cash equivalents for the periods presented: Year Ended December 31, (in thousands) 2021 2020 2019 Net cash from operating activities $ 539,902 $ 304,812 $ 172,566 Net cash from investing activities (384,047) (125,360) (152,582) Net cash from financing activities (167,887) (158,958) (26,063) Effect of exchange rate changes on cash and cash equivalents (206) 1,398 166 Net change in cash and cash equivalents $ (12,238) $ 21,892 $ (5,913) 63 Co mparison of the Years Ended December 31, 2021 and 2020 and December 31, 2020 and 2019 Cash Flows from operating activities Cash provided by operating activities for the year ended December 31, 2021 was $539.9 million as compared to $304.8 million for the year ended December 31, 2020, an increase of $235.1 million. The increase in cash provided by operating activities was driven by an increase of $252.1 million of net income, adjusted for non-cash items. This was partially offset by a decrease of $17.2 million in the net movements of the operating assets and liabilities, which was primarily attributable to an increase in cash used from accounts receivable of $78.4 million compared to the same period in 2020, an increase in accounts payable and other accrued liabilities of $43.3 million, an increase in accrued interest of $12.1 million, and an increase of $10.2 million in deferred revenue compared to the same period in 2020. Cash provided by operating activities for the year ended December 31, 2020 was $304.8 million as compared to $172.6 million for the year ended December 31, 2019, an increase of $132.2 million. The increase in cash provided by operating activities was driven by an increase of $136.7 million of net income, adjusted for non-cash items, primarily due to the impact of the Merger on revenues and gross profit. This was partially offset by a decrease of $4.4 million in the net movements of the operating assets and liabilities which was primarily attributable to a decrease in accounts payable and other accrued liabilities of $20.9 million, an increase in prepaid and other assets of $12.7 million, and a decrease in accrued interest of $7.7 million, compared to the same period in 2019. This was partially offset by a decrease in cash used from accounts receivable of $36.9 million compared to the same period in 2019. Cash flows from investing activities Cash used in investing activities for the year ended December 31, 2021 was $384.0 million as compared to $125.4 million for the year ended December 31, 2020, an increase of $258.6 million. The increase in cash used in investing activities was driven by a $164.3 million increase in cash used in acquisitions, net of cash acquired. During 2021, the Company acquired certain assets and liabilities of several smaller entities for $147.2 million in cash. During 2020, $17.2 million of cash was acquired as part of the Merger. The increase in cash used in investing activities was also driven by a $106.1 million increase in cash used for the purchase of rental equipment and refurbishments to support growing demand for new project deliveries across all segments, and a $14.0 million increase in cash used for the purchase of property, plant, and equipment. These increases were partially offset by a $9.5 million increase in proceeds from sale of property, plant and equipment and a $16.3 million increase in proceeds from the sale of rental equipment. Proceeds from sale of rental equipment increased compared to the prior year due to higher sales demand. Cash used in investing activities for the year ended December 31, 2020 was $125.4 million as compared to $152.6 million for the year ended December 31, 2019, a decrease of $27.2 million. The decrease in cash used in investing activities was driven by a $32.7 million decrease in cash used for purchase of rental equipment and refurbishments. Cash used for purchase of rental equipment and refurbishments decreased compared to 2019 as fleet was less constrained due to reduced utilization and reduced demand for new project deliveries as a result of the COVID-19 pandemic and the current period impact of prior year spend. Additionally, $17.2 million of cash was acquired as part of the Merger. This increase was partially offset by an $11.4 million decrease in proceeds from sale of property, plant and equipment, an increase of $8.2 million on purchases of property, plant and equipment and a $3.2 million decrease in proceeds from the sale of rental equipment. Proceeds from sale of rental equipment decreased compared to the prior year due to lower sales demand. Cash flows from financing activities Cash used in financing activities for the year ended December 31, 2021 was $167.9 million as compared to $159.0 million for the year ended December 31, 2020, an increase of $8.9 million cash used. The increase in cash used in financing activities was driven by an increase of $341.8 million in repurchases of common stock and warrants as well as a $2,058.1 million decrease in receipts from borrowings. This was partially offset by a decrease of $2,296.2 million in repayment of borrowings, a decrease of $65.5 million in payment of financing costs, and a decrease of $30.9 million in payment of debt extinguishment premium costs. Cash used in financing activities for the year ended December 31, 2020 was $159.0 million as compared to $26.1 million cash provided by financing activities for the year ended December 31, 2019, an increase of $132.9 million cash used. The increase in cash used in financing activities was driven by an increase of $62.9 million for payment of financing costs, an increase of $27.4 million for payment of debt extinguishment costs, payment of $21.8 million for the repurchase and cancellation of warrants, payment of $4.2 million for Common Stock issuance costs, an increase of $12.8 million of taxes paid on employee stock awards, and an increase of $8.4 million of principal payments on finance lease obligations. Additionally, there was a net increase of $5.1 million of payments on borrowings, comprised of an increase in repayments of borrowings of $2,239.7 million that was partially offset by an increase receipts from borrowings of $2,234.6 million. The cash used in financing activities was partially offset by an increase in receipts from the issuance of Common Stock from the exercise of options and warrants of $9.7 million. 64 Material cash requirements The Company’s material cash requirements include the following contractual and other obligations: Debt The Company has outstanding debt related to its 2020 ABL Facility, 2025 Secured Notes, 2028 Secured Notes, and finance leases, including interest, totaling $3.2 billion as of December 31, 2021, $21.8 million of which is obligated to be repaid within the next twelve months. Refer to Note 9 for further information regarding outstanding debt. Operating leases The Company has commitments for future minimum rental payments relating to operating leases, which are primarily for equipment and office space. As of December 31, 2021, the Company had lease obligations of $290.3 million, with $63.7 million payable within the next twelve months. In addition to the aforementioned cash requirements, the Company has a Share Repurchase program authorized by the Board of Directors in October 2021 which allows the Company to repurchase up to $1.0 billion of outstanding shares of Common Stock and equivalents. This program does not obligate the Company to repurchase any specific amount of shares. The company believes its cash, cash flows generated from ongoing operations, and continued access to its revolving credit facility as well access to debt markets are sufficient to satisfy its currently anticipated cash requirements for the foreseeable future. Critical Accounting Policies and Estimates Our discussion and analysis of our financial condition, results of operations, liquidity and capital resources is based on our consolidated financial statements, which have been prepared in accordance with GAAP. GAAP requires that we make estimates and judgments that affect the reported amount of assets, liabilities, revenue, expenses and the related disclosure of contingent assets and liabilities. We base these estimates on historical experience and on various other assumptions that we consider reasonable under the circumstances and reevaluate our estimates and judgments as appropriate. The actual results exp erienced by us may differ materially and adversely from our estimates. We believe that the following critical accounting policies involve a higher degree of judgment or complexity in the preparation of financial statements: Revenue Recognition Leasing and Services Revenue The majority of revenue is generated by rental income subject to the guidance of Accounting Standard Update ("ASU") 2016-2, Leases (Topic 842) ("ASC 842"). The remaining revenue is generated by performance obligations in contracts with customers for services or sale of units subject to the guidance in ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASC 606"). Leasing Revenue Income from operating leases is recognized on a straight-line basis over the lease term. The Company's lease arrangements can include multiple lease and non-lease components. Examples of lease components include, but are not limited to, the lease of modular space, portable storage units and VAPS. Examples of non-lease components include, but are not limited to, the delivery, installation, maintenance, and removal services commonly provided in a bundled transaction with the lease components. Arrangement consideration is allocated between lease deliverables and non-lease components based on the relative estimated selling (leasing) price of each deliverable. Estimated selling (leasing) price of the lease deliverables is based upon the estimated stand-alone selling price of the related performance obligations using an adjusted market approach. When leases and services are billed in advance, recognition of revenue is deferred until services are rendered. If equipment is returned prior to the contractually obligated period, the excess, if any, between the amount the customer is contractually required to pay over the cumulative amount of revenue recognized to date is recognized as incremental revenue upon return. Rental equipment is leased primarily under operating leases. Operating lease minimum contractual terms within the NA Modular segment generally range from 1 month to 60 months and averaged approximately 10 months across this segment's rental fleet for the year ended December 31, 2021.Rental contracts with customers within the NA Storage, UK Storage, and Tank & Pump segments are generally based on a 28-day rate and billing cycle. The rental continues until cancelled by the Company or the customer. The Company records changes in estimated collectability directly against leasing revenue. The Company may use third parties to satisfy its performance obligations, including both the provision of VAPS and other services. To determine whether it is the principal or agent in the arrangement, the Company reviews each third-party relationship on a contract-by-contract basis. The Company is considered an agent when its role is to arrange for another entity to provide the VAPS and other services to the customer. In these instances, the Company does not control the rental unit or service before it is provided and the risk of performance is held by the third party. The Company is considered the principal when it controls the VAPS or other services prior to transferring control to the customer and retains the risk of performance. WillScot Mobile Mini may be a principal in the fulfillment of some leasing contracts and services elements and an agent for 65 other elements within the same contract. Revenue is recognized on a gross basis when the Company is the principal in the arrangement and on a net basis when it is the agent. Services Revenue The Company generally has three non-lease service-related performance obligations in its contracts with customers: • Delivery and installation of the modular or portable storage unit; • Maintenance and other ad hoc services performed during the lease term; and • Removal services that occur at the end of the lease term. Consideration is allocated to each of these performance obligations within the contract based upon their estimated relative standalone selling prices using the estimated cost plus a margin approach. Revenue from these activities is recognized as the services are performed. Sales Revenue Sales revenue is generated by the sale of new and rental units. Revenue from the sale of new and rental units is generally recognized at a point in time upon the transfer of control to the customer, which occurs when the unit is delivered and installed in accordance with the contract. Sales transactions constitute a single performance obligation. Other Matters The Company's non-lease revenues do not include material amounts of variable consideration, other than the variability noted for services arrangements expected to be performed beyond a twelve-month period. The Company's payment terms vary by the type and location of its customer and the product or services offered. The time between invoicing and when payment is due is not significant. While the Company may bill certain customers in advance, its contracts do not contain a significant financing component based on the short length of time between upfront billings and the performance of contracted services. For certain products, services, or customer types, the Company requires payment before the products or services are delivered to the customer. Revenue is recognized net of sales tax billed to customers, which is subsequently remitted to governmental authorities. Goodwill and Annual Goodwill Impairment Test For acquired businesses, the Company records assets acquired and liabilities assumed at their estimated fair values on the respective acquisition dates. Based on these values, the excess purchase price over the fair value of the net assets acquired is recorded as goodwill. Generally, reporting units are at the operating segment level or one level below the operating segment (the component level), if discrete financial information is prepared and regularly reviewed by segment management. Goodwill acquired in a business combination is assigned to each of the Company’s reporting units that are expected to benefit from the combination. The Company performs its annual impairment test of goodwill as of October 1 at the reporting unit level, as well as during any reporting period in which events or changes in circumstances occur that, in management’s judgment, may constitute triggering events under ASC 350-20, Intangibles – Goodwill and Other, Testing Goodwill for Impairment . The Company performs its assessment of goodwill utilizing either a qualitative or quantitative impairment test. The qualitative impairment test assesses company-specific, industry, market and general economic factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If the Company concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, or elects not to use the qualitative impairment test, a quantitative impairment test is performed. The quantitative impairment test involves a comparison of the estimated fair value of a reporting unit to its carrying amount. The Company uses an independent valuation specialist for its quantitative impairment tests to assist in the valuation. Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, value of net operating losses, future economic and market conditions and determination of appropriate market comparables. Management bases fair value estimates on assumptions it believes to be reasonable but that are unpredictable and inherently uncertain. Actual future results may differ from these estimates and the estimate is inherently sensitive to any material changes to the inputs noted above; these changes could potentially impact the fair value of reporting units. If the carrying amount of the reporting unit exceeds the calculated fair value of the reporting unit, an impairment charge would be recognized for the excess, not to exceed the amount of goodwill allocated to that reporting unit. Intangible Assets Other than Goodwill Intangible assets that are acquired by the Company and determined to have an indefinite useful life are not amortized but are tested for impairment at least annually. The Company’s indefinite-lived intangible assets consist of the Williams Scotsman and Mobile Mini trade names. The Company performs its assessment of indefinite-lived intangible assets utilizing either a qualitative or quantitative impairment test. When utilizing a quantitative impairment test, the Company calculates fair value using a relief-from-royalty method. This method is used to estimate the cost savings that accrue to the owner of an 66 intangible asset who would otherwise have to pay royalties or license fees on revenues earned through the use of the asset. If the carrying amount of the indefinite-lived intangible asset exceeds its fair value, an impairment charge would be recorded to the extent the recorded indefinite-lived intangible asset exceeds the fair value. The relief-from-royalty method requires the Company to make assumptions regarding future revenue and the appropriate selection of royalty and discount rates. Any material deviation in actual results could affect the calculated fair value of the intangible asset. Other intangible assets that have finite useful lives are measured at cost less accumulated amortization and impairment losses, if any. Amortization is recognized in profit or loss over the estimated useful lives of the intangible asset. Rental Equipment Rental equipment is comprised of modular space and portable storage units held for rent or on rent to customers, tank and pump solutions products, which consist primarily of liquid and solid containment units, pumps and filtration equipment, and value-added products and services (“VAPS”) which are in use or available to be used by customers. Rental equipment is measured at cost less accumulated depreciation and impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. Costs of improvements and conversions of rental equipment are capitalized when such costs extend the useful life of the equipment or increase the rental value of the unit. Costs incurred for equipment to meet a particular customer specification are capitalized and depreciated over the lease term taking in consideration the residual value of the asset. Maintenance and repair costs are expensed as incurred. Depreciation is generally computed using the straight-line method over estimated useful lives, as follows: Estimated Useful Life Residual Value Modular space units 10 - 30 years 20 - 55% Portable storage units 30 years 55% Tank and pump equipment 7 - 25 years —% VAPS and other related rental equipment 1 - 8 years —% Trade Receivables and Allowance for Credit Losses . The Company is exposed to credit losses from trade receivables. The Company assesses each customer’s ability to pay for the products it leases or sells by conducting a credit review. The credit review considers expected billing exposure and timing for payment and the customer’s established credit rating. The Company performs its credit review of new customers at inception of the customer relationship and for existing customers when the customer transacts after a defined period of dormancy. The Company also considers contract terms and conditions, country risk and business strategy in the evaluation. The Company monitors ongoing credit exposure through an active review of customer balances against contract terms and due dates. The Company may employ collection agencies and legal counsel to pursue recovery of defaulted receivables. The allowances for credit losses reflect the estimate of the amount of receivables that the Company will be unable to collect based on historical write-off experience and, as applicable, current conditions and reasonable and supportable forecasts that affect collectability. This estimate is sensitive to changing circumstances, including changes in the economy or in the particular circumstances of individual customers. Accordingly, the Company may be required to increase or decrease its allowances. In accordance with the adoption of ASC 842, effective January 1, 2019, and the adoption of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) ("ASC 326"), effective January 1, 2020, specifically identifiable lease revenue receivables and sales receivables not deemed probable of collection are recorded as a reduction of revenue. The remaining provision for credit losses is recorded as selling, general and administrative expenses. Warrants The Company accounts for warrants in accordance with applicable accounting guidance provided in ASC 815-40, Contracts in Entity's Own Equity , as either derivative liabilities or as equity instruments depending on the specific terms of the warrant agreements. In periods subsequent to issuance, warrants classified as liabilities are subject to remeasurement at each balance sheet date and transaction date with changes in the estimated fair values of the common stock warrant liabilities and gains and losses on extinguishment of common stock warrant liabilities reported in the consolidated statements of operations. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company records deferred tax assets to the extent it believes that it is more likely than not that these assets will be realized. In making such determination, the Company considers all available positive and negative evidence, including 67 scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent results of operations. Valuation allowances are recorded to reduce the deferred tax assets to an amount that will more likely than not be realized. The Company assesses the likelihood that each of the deferred tax assets will be realized. To the extent management concludes the realization of any deferred tax assets is not more likely than not, the Company establishes a valuation allowance. When a valuation allowance is established or there is an increase in an allowance in a reporting period, tax expense is generally recorded in the Company’s consolidated statement of operations. Conversely, to the extent circumstances indicate that a valuation allowance is no longer necessary, that portion of the valuation allowance is reversed, which generally reduces the Company’s income tax expense. Deferred tax liabilities are recognized for the income taxes on the undistributed earnings of wholly-owned foreign subsidiaries unless such earnings are indefinitely reinvested, or will only be repatriated when possible to do so at minimal additional tax cost. Current income tax relating to items recognized directly in equity is recognized in equity and not in profit (loss) for the year. In accordance with applicable authoritative guidance, the Company accounts for uncertain income tax positions using a benefit recognition model with a two-step approach; a more-likely-than-not recognition criterion; and a measurement approach that measures the position as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement. If it is not more-likely-than-not that the benefit of the tax position will be sustained on its technical merits, no benefit is recorded. Uncertain tax positions that relate only to timing of when an item is included on a tax return are considered to have met the recognition threshold. The Company classifies interest on tax deficiencies and income tax penalties within income tax expense. The evaluation of uncertain tax positions involves judgment in the application of GAAP and complex tax laws. None of the critical accounting policies and estimates noted above have changed materially since the prior year. ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk We are exposed to certain market risks from changes in foreign currency exchange rates and interest rates. Changes in these factors cause fluctuations in our earnings and cash flows. We evaluate and manage exposure to these market risks as follows: Interest Rate Risk We are primarily exposed to interest rate risk through our ABL Facility. As amended by the LIBOR Transition Amendment, borrowings under our ABL Facility bear interest at variable rates based on (i) the US Prime Rate or the Federal Funds Rate for borrowings denominated in USD, (ii) the Canadian Dollar Bankers' Acceptances average rate or the rate of interest publicly announced by the Bank of America (Canada) as its base rate or the Federal Funds Rate for borrowings denominated in Canadian dollars, (iii) SONIA for borrowings denominated in British Pounds Sterling and (iv) EURIBOR for borrowings denominated in Euros. See “Risk Factors— The uncertainty regarding the potential phase-out of LIBOR may negatively impact our operating results." We had $1.6 billion in outstanding principal under the ABL Facility at December 31, 2021. In order to manage this risk, we maintain an interest rate swap agreement that effectively converts $400.0 million in aggregate notional amount of variable-rate debt under our ABL Facility into fixed-rate debt. The swap agreement provides for us to pay a fixed rate of 3.06% per annum on the outstanding debt in exchange for receiving a variable interest rate based on 1-month LIBOR. The effect is a synthetically fixed rate of 4.94% on the $400.0 million notional amount, when including the current applicable margin. An increase in interest rates by 100 basis points on our ABL Facility, inclusive of the impact of our interest rate swaps, would increase annual interest expense by approximately $9.5 million based on current outstanding borrowings. Foreign Currency Risk We currently generate the majority of our consolidated net revenues in the US, and the reporting currency for our consolidated financial statements is the US dollar. However, we are exposed to currency risk through our operations in Canada, Mexico, and the UK. For the operations outside the US we bill customers primarily in their local currency, which is subject to foreign currency rate changes. As our net revenues and expenses generated outside of the US increase, our results of operations could be adversely impacted by changes in foreign currency exchange rates. Since we recognize foreign revenues in local foreign currencies, if the US dollar strengthens, it could have a negative impact on our foreign revenues upon translation of those results into the US dollar for consolidation into our financial statements. In addition, we are exposed to gains and losses resulting from fluctuations in foreign currency exchange rates on transactions generated by our foreign subsidiaries in currencies other than their local currencies. These gains and losses are primarily driven by intercompany transactions and rental equipment purchases denominated in currencies other than the functional currency of the purchasing entity. These exposures are included in currency (gains) losses, net, on the consolidated statements of operations. To date, we have not entered into any hedging arrangements with respect to foreign currency risk. 68 Seasonality Although demand from certain of our customers is seasonal, our operations as a whole are not impacted in any material respect by seasonality. Impact of Inflation Inflationary factors such as increases in the cost of our product and overhead costs may adversely affect our operating results if we are unsuccessful in passing such inflationary increases on to our customers in the form of higher prices. We do not believe that inflation has had a material effect on our results of operations. 69 Item 8. Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of WillScot Mobile Mini Holdings Corp. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of WillScot Mobile Mini Holdings Corp. (the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss) , changes in equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 25, 2021 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 70 Allowance for Credit Losses Description of the Matter As described in Note 1 to the consolidated financial statements, the Company maintains an allowance for credit losses on trade receivables. At December 31, 2021 the allowance for credit losses was $47.7 million, or 10.6% of gross trade receivables. The allowance for credit losses is estimated based on historical write-off experience and, as applicable, current conditions and reasonable and supportable forecasts that affect collectability. Auditing the Company's estimation of the allowance for credit losses was judgmental due to the subjectivity in assessing the appropriateness of the assumptions made by management. The assumptions include an expectation that the Company’s collection of receivables will be consistent with historical write-off experience and the consideration of current or forecasted conditions that may affect the Company’s customers' ability to pay outstanding trade receivables. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company's controls over its estimation of the allowance for credit losses, including internal controls over the Company’s process to develop the assumptions used to estimate credit losses. To test the allowance for credit losses, we performed audit procedures that included, among others, testing management's process for developing the allowance for credit losses, testing the completeness, accuracy, and relevance of the data used; and evaluating significant assumptions used by management, including assessing the Company’s expectation that the collection of receivables will be consistent with historical write-off experience. For example, we compared the days sales outstanding, customer concentration, and days past due as of December 31, 2021, to the Company’s historical experience to evaluate the relevancy of the historical data utilized to estimate the allowance for credit losses. We also performed a sensitivity analysis of the significant assumptions to evaluate the change in the allowance that would result from changes in assumptions. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2017 Baltimore, Maryland February 25, 2022 71 WillScot Mobile Mini Holdings Corp. Consolidated Balance Sheets (in thousands, except share data) December 31, 2021 2020 Assets Cash and cash equivalents $ 12,699 $ 24,937 Trade receivables, net of allowance for credit losses at December 31, 2021 and December 31, 2020 of $ 47,629 and $ 29,258 , respectively 399,887 330,942 Inventories 32,739 23,731 Prepaid expenses and other current assets 36,761 29,954 Assets held for sale 954 12,004 Total current assets 483,040 421,568 Rental equipment, net 3,080,981 2,931,646 Property, plant and equipment, net 312,178 303,650 Operating lease assets 247,064 232,094 Goodwill 1,178,806 1,171,219 Intangible assets, net 460,678 495,947 Other non-current assets 10,852 16,081 Total long-term assets 5,290,559 5,150,637 Total assets $ 5,773,599 $ 5,572,205 Liabilities and equity Accounts payable $ 118,271 $ 106,926 Accrued expenses 100,195 91,381 Accrued employee benefits 68,414 50,291 Deferred revenue and customer deposits 159,639 135,485 Operating lease liabilities - current 53,005 48,063 Current portion of long-term debt 18,121 16,521 Total current liabilities 517,645 448,667 Long-term debt 2,694,319 2,453,809 Deferred tax liabilities 354,879 307,541 Operating lease liabilities - non-current 194,256 183,761 Common stock warrant liabilities — 77,404 Other non-current liabilities 15,737 37,150 Long-term liabilities 3,259,191 3,059,665 Total liabilities 3,776,836 3,508,332 Commitments and contingencies (see Note 17) Preferred Stock: $ 0.0001 par, 1,000,000 shares authorized and zero shares issued and outstanding at December 31, 2021 and 2020 — — Common Stock: $ 0.0001 par, 500,000,000 shares authorized and 223,939,527 and 229,038,158 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively 22 23 Additional paid-in-capital 3,616,902 3,852,291 Accumulated other comprehensive loss ( 29,071 ) ( 37,207 ) Accumulated deficit ( 1,591,090 ) ( 1,751,234 ) Total shareholders' equity 1,996,763 2,063,873 Total liabilities and shareholders' equity $ 5,773,599 $ 5,572,205 See the accompanying notes which are an integral part of these consolidated financial statements. 72 WillScot Mobile Mini Holdings Corp. Consolidated Statements of Operations (in thousands, except share and per share data) Years Ended December 31, 2021 2020 2019 Revenues: Leasing and services revenue: Leasing $ 1,412,123 $ 1,001,447 $ 744,185 Delivery and installation 374,682 274,156 220,057 Sales revenue: New units 52,882 53,093 59,085 Rental units 55,210 38,949 40,338 Total revenues 1,894,897 1,367,645 1,063,665 Costs: Costs of leasing and services: Leasing 317,061 227,376 213,151 Delivery and installation 306,861 220,102 194,107 Costs of sales: New units 35,377 34,841 42,160 Rental units 29,853 24,772 26,255 Depreciation of rental equipment 237,537 200,581 174,679 Gross profit 968,208 659,973 413,313 Expenses: Selling, general and administrative 511,446 360,626 271,004 Transaction costs 1,375 64,053 — Other depreciation and amortization 78,030 43,249 12,395 Impairment losses on long-lived assets — — 2,848 Lease impairment expense and other related charges 2,888 4,876 8,674 Restructuring costs 11,868 6,527 3,755 Currency losses (gains), net 548 ( 355 ) ( 688 ) Other expense (income), net 1,780 ( 1,718 ) ( 2,200 ) Operating income 360,273 182,715 117,525 Interest expense 117,987 119,886 122,504 Fair value loss (gain) on common stock warrant liabilities 26,597 ( 3,461 ) 109,622 Loss on extinguishment of debt 5,999 42,401 8,755 Income (loss) before income tax 209,690 23,889 ( 123,356 ) Income tax expense (benefit) 49,546 ( 51,451 ) ( 2,191 ) Net income (loss) 160,144 75,340 ( 121,165 ) Net income (loss) attributable to non-controlling interest, net of tax — 1,213 ( 421 ) Net income (loss) attributable to WillScot Mobile Mini common shareholders $ 160,144 $ 74,127 $ ( 120,744 ) Earnings (loss) per share attributable to WillScot Mobile Mini common shareholders: Basic $ 0.71 $ 0.44 $ ( 1.11 ) Diluted $ 0.69 $ 0.25 $ ( 1.11 ) Weighted average shares: Basic 226,518,931 169,230,177 108,683,620 Diluted 232,793,902 177,268,383 108,683,620 See the accompanying notes which are an integral part of these consolidated financial statements. 73 WillScot Mobile Mini Holdings Corp. Consolidated Statements of Comprehensive Income (Loss) (in thousands) Years Ended December 31, 2021 2020 2019 Net income (loss) $ 160,144 $ 75,340 $ ( 121,165 ) Other comprehensive income: Foreign currency translation adjustment, net of income tax (benefit) of $( 60 ), $( 685 ) and $ 0 for the years ended December 31, 2021, 2020 and 2019, respectively ( 880 ) 28,404 10,586 Net gain (loss) on derivatives, net of income tax expense (benefit) of $ 2,661 , $( 539 ) and $( 1,471 ) for the years ended December 31, 2021, 2020 and 2019, respectively 9,016 ( 1,749 ) ( 4,809 ) Total other comprehensive income 8,136 26,655 5,777 Comprehensive income (loss) 168,280 101,995 ( 115,388 ) Comprehensive (loss) income attributable to non-controlling interest — ( 672 ) 105 Total comprehensive income (loss) attributable to WillScot Mobile Mini $ 168,280 $ 102,667 $ ( 115,493 ) See the accompanying notes which are an integral part of these consolidated financial statements. 74 WillScot Mobile Mini Holdings Corp. Consolidated Statements of Changes in Equity (in thousands) Common Stock(1) Class B Common Stock Shares Amount Shares Amount Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Shareholders' Equity Non-Controlling Interest Total Equity Balance at December 31, 2018 108,509 $ 11 8,024 $ 1 $ 2,371,363 $ ( 68,026 ) $ ( 1,709,684 ) $ 593,665 $ 63,982 $ 657,647 Net loss — — — — — — ( 120,744 ) ( 120,744 ) ( 421 ) ( 121,165 ) Other comprehensive income — — — — — 5,251 — 5,251 526 5,777 Adoption of new accounting standards — — — — — — 5,067 5,067 503 5,570 Stock-based compensation and issuance of Common Stock from vesting 229 — — — 6,032 — — 6,032 — 6,032 Issuance of Common Stock from the exercise of options and warrants 81 — — — 1,338 — — 1,338 — 1,338 Balance at December 31, 2019 108,819 $ 11 8,024 $ 1 $ 2,378,733 $ ( 62,775 ) $ ( 1,825,361 ) $ 490,609 $ 64,590 $ 555,199 Net income — — — — — — 74,127 74,127 1,213 75,340 Other comprehensive income — — — — — 28,540 — 28,540 ( 1,885 ) 26,655 Mobile Mini Merger 106,427 11 — — 1,348,619 — — 1,348,630 — 1,348,630 Sapphire Exchange - See Note 10 10,641 1 ( 8,024 ) ( 1 ) 66,890 ( 2,972 ) — 63,918 ( 63,918 ) — Stock-based compensation and issuance of common stock from vesting 315 — — — 9,879 — — 9,879 — 9,879 Repurchase and cancellation of options and warrants — — — — ( 300 ) — — ( 300 ) — ( 300 ) Issuance of Common Stock from the exercise of options and warrants 2,836 — — — 35,727 — — 35,727 — 35,727 Withholding taxes on net share settlement of stock-based compensation and option exercises — — — — ( 13,473 ) — — ( 13,473 ) — ( 13,473 ) Reclassification of 2018 Warrants 26,216 26,216 26,216 Balance at December 31, 2020 229,038 $ 23 — $ — $ 3,852,291 $ ( 37,207 ) $ ( 1,751,234 ) $ 2,063,873 $ — $ 2,063,873 Net Income — — — — — — 160,144 160,144 — 160,144 Other Comprehensive Income — — — — — 8,136 — 8,136 — 8,136 Stock-based compensation and issuance of Common Stock from vesting 485 — — — 26,184 — — 26,184 — 26,184 Repurchase and cancellation of Common Stock and warrants ( 11,851 ) ( 1 ) — — ( 340,375 ) — — ( 340,376 ) — ( 340,376 ) Issuance of Common Stock from the exercise of options and warrants 6,268 — — — 85,979 — — 85,979 — 85,979 Withholding taxes on net share settlement of stock-based compensation and option exercises — — — — ( 7,177 ) — — ( 7,177 ) — ( 7,177 ) Balance at December 31, 2021 223,940 $ 22 — $ — $ 3,616,902 $ ( 29,071 ) $ ( 1,591,090 ) $ 1,996,763 $ — $ 1,996,763 (1) See Note 1 for information regarding the Company's conversion of Class A Common Stock to Common Stock on July 1, 2020 concurrent with the Merger . See the accompanying notes which are an integral part of these consolidated financial statements. 75 WillScot Mobile Mini Holdings Corp. Consolidated Statements of Cash Flows (in thousands) Years Ended December 31, 2021 2020 2019 Operating activities: Net income (loss) $ 160,144 $ 75,340 $ ( 121,165 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 318,202 246,948 189,436 Provision for credit losses 38,191 32,593 14,496 Impairment losses on long-lived assets — — 2,848 Impairment losses on right of use assets — 57 4,160 Gain on sale of rental equipment and other property, plant and equipment ( 26,175 ) ( 14,124 ) ( 11,660 ) Amortization of debt discounts and debt issuance costs 14,033 13,085 11,450 Fair value loss (gain) on common stock warrant liabilities 26,597 ( 3,461 ) 109,622 Loss on extinguishment of debt 5,999 42,401 8,755 Stock-based compensation expense 26,184 9,879 6,686 Deferred income tax expense (benefit) 36,563 ( 55,155 ) ( 2,624 ) Unrealized currency losses (gains), net 295 424 ( 745 ) Changes in operating assets and liabilities, net of effect of businesses acquired: Trade receivables ( 105,053 ) ( 26,723 ) ( 63,648 ) Inventories ( 9,083 ) 2,775 869 Prepaid expenses and other assets 3,324 ( 4,547 ) 8,237 Operating lease assets and liabilities 473 789 ( 438 ) Accrued interest 217 ( 11,877 ) ( 4,217 ) Accounts payable and other accrued expenses 27,308 ( 16,046 ) 4,865 Deferred revenue and customer deposits 22,683 12,454 15,639 Net cash provided by operating activities 539,902 304,812 172,566 Investing activities: Acquisitions, net of cash acquired ( 147,172 ) 17,173 — Proceeds from sale of rental equipment 55,210 38,949 42,101 Purchase of rental equipment and refurbishments ( 278,498 ) ( 172,383 ) ( 205,106 ) Proceeds from the sale of property, plant and equipment 16,911 7,355 18,763 Purchase of property, plant and equipment ( 30,498 ) ( 16,454 ) ( 8,340 ) Net cash used in investing activities ( 384,047 ) ( 125,360 ) ( 152,582 ) Financing activities: Receipts from issuance of Common Stock from the exercise of options 7,484 10,616 921 Repurchase and cancellation of Common Stock and warrants ( 363,586 ) ( 21,777 ) — Payment of Common Stock issuance costs — ( 4,222 ) — Receipts from borrowings 728,677 2,786,793 552,230 Payment of financing costs — ( 65,475 ) ( 2,623 ) Repayment of borrowings ( 512,181 ) ( 2,808,370 ) ( 568,686 ) Payment of debt extinguishment premium costs ( 3,705 ) ( 34,610 ) ( 7,152 ) 76 Principal payments on finance lease obligations ( 17,399 ) ( 8,440 ) ( 99 ) Taxes paid on employee stock awards ( 7,177 ) ( 13,473 ) ( 654 ) Net cash used in financing activities ( 167,887 ) ( 158,958 ) ( 26,063 ) Effect of exchange rate changes on cash and cash equivalents ( 206 ) 1,398 166 Net change in cash and cash equivalents ( 12,238 ) 21,892 ( 5,913 ) Cash and cash equivalents at the beginning of the period 24,937 3,045 8,958 Cash and cash equivalents at the end of the period $ 12,699 $ 24,937 $ 3,045 Supplemental cash flow information: Interest paid 1 $ 103,795 $ 118,519 $ 118,726 Income taxes paid (refunded), net $ 9,855 $ 4,234 $ ( 1,148 ) Capital expenditures accrued or payable $ 27,667 $ 23,553 $ 23,946 1 Includes $ 11,992 , $ 9,779 and $ 3,143 of payments related to the interest rate swap for the years ended December 31, 2021, 2020 and 2019, respectively. See the accompanying notes which are an integral part of these consolidated financial statements. 77 WillScot Mobile Mini Holdings Corp. Notes to the Consolidated Financial Statements NOTE 1 - Summary of Significant Accounting Policies Organization and Nature of Operations WillScot Mobile Mini Holdings Corp. (“WillScot Mobile Mini” and, together with its subsidiaries, the “Company”) is a leading business services provider specializing in innovative flexible work space and portable storage solutions in the United States (“US”), Canada, Mexico and the United Kingdom ("UK"). The Company also maintains a fleet of specialty containment products, including liquid and solid containment solutions. The Company leases, sells, delivers and installs mobile solutions and storage products through an integrated network of branch locations that spans North America and the UK. WillScot Corporation, a Delaware corporation (“WillScot”), entered into an Agreement and Plan of Merger, dated as of March 1, 2020, as amended on May 28, 2020 (as so amended, the “Merger Agreement”), by and among WillScot, Mobile Mini, Inc. (“Mobile Mini”), and Picasso Merger Sub, Inc., a wholly-owned subsidiary of WillScot (“Merger Sub”). On July 1, 2020, Merger Sub merged with and into Mobile Mini (the “Merger”). At the effective time of the Merger, the separate corporate existence of Merger Sub ceased, and Mobile Mini continued its existence as the surviving corporation in the Merger and a wholly-owned subsidiary of WillScot. As a result of the Merger, each issued and outstanding share of Mobile Mini Common Stock, par value $ 0.01 per share (other than treasury shares held by Mobile Mini), was converted automatically into the right to receive 2.405 shares of WillScot’s Class A Common Stock, par value $ 0.0001 per share (the “WillScot Class A Common Stock”), and cash in lieu of any fractional shares. Immediately following the Merger, WillScot changed its name to “WillScot Mobile Mini Holdings Corp.” and filed an amended and restated certificate of incorporation (the “A&R Charter”), which reclassified all outstanding shares of WillScot Class A Common Stock and converted such shares into shares of Common Stock, par value $ 0.0001 per share, of WillScot Mobile Mini (“WillScot Mobile Mini Common Stock”). The WillScot Class A Common Stock was listed on the Nasdaq Capital Market (Nasdaq: WSC) up until the Merger, and the WillScot Mobile Mini Common Stock has been listed on the Nasdaq Capital Market (Nasdaq: WSC) since the Merger. As used herein, the term “Common Stock” or “the Company’s Common Stock” refers to WillScot Class A Common Stock prior to filing of the A&R Charter on July 1, 2020 and to WillScot Mobile Mini Common Stock as of and following the filing of the A&R Charter on July 1, 2020. As the Merger closed on July 1, 2020 the preparation of financial statements in accordance with US Generally Accepted Accounting Principles (“GAAP”) requires that our consolidated financial statements and most of the disclosures in these Notes be presented on a historical basis. Unless the context otherwise requires, the terms “Company” and “WillScot Mobile Mini” as used in these financial statements mean WillScot and its subsidiaries when referring to periods prior to July 1, 2020 (prior to the Merger) and to WillScot Mobile Mini, when referring to periods on or after July 1, 2020 (after the Merger). Basis of Presentation The consolidated financial statements were prepared in conformity with GAAP. Principles of Consolidation The consolidated financial statements comprise the financial statements of WillScot Mobile Mini and its subsidiaries that it controls due to ownership of a majority voting interest. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as WillScot Mobile Mini. All intercompany balances and transactions are eliminated. Reclassifications Certain reclassifications have been made to prior year financial statements to conform to the current year presentation. Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid instruments with a maturity of three months or less when purchased to be cash equivalents. Trade Receivables and Allowance for Credit Losses The Company is exposed to credit losses from trade receivables. The Company assesses each customer’s ability to pay for the products it leases or sells by conducting a credit review. The credit review considers expected billing exposure and 78 timing for payment and the customer’s established credit rating. The Company performs its credit review of new customers at inception of the customer relationship and for existing customers when the customer transacts after a defined period of dormancy. The Company also considers contract terms and conditions, country risk and business strategy in the evaluation. The Company monitors ongoing credit exposure through an active review of customer balances against contract terms and due dates. The Company may employ collection agencies and legal counsel to pursue recovery of defaulted receivables. The allowances for credit losses reflect the estimate of the amount of receivables that the Company will be unable to collect based on historical write-off experience and, as applicable, current conditions and reasonable and supportable forecasts that affect collectability. This estimate is sensitive to changing circumstances, including changes in the economy or in the particular circumstances of individual customers. Accordingly, the Company may be required to increase or decrease its allowances. In accordance with the adoption of ASC 842, effective January 1, 2019, and the adoption of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) ("ASC 326"), effective January 1, 2020, specifically identifiable lease revenue receivables and sales receivables not deemed probable of collection are recorded as a reduction of revenue. The remaining provision for credit losses is recorded as selling, general and administrative expenses. Activity in the allowance for credit losses for the years ended December 31 was as follows: (in thousands) 2021 2020 2019 Balance at beginning of period $ 29,258 $ 15,828 $ 9,340 Provision for credit losses, net of recoveries (a) 38,191 31,386 14,496 Write-offs ( 19,791 ) ( 18,034 ) ( 7,945 ) Foreign currency translation and other ( 29 ) 78 ( 63 ) Balance at end of period $ 47,629 $ 29,258 $ 15,828 (a) For the years ended December 31, 2021, 2020 and 2019, the provision for credit losses includes $ 19.8 million, $ 18.0 million and $ 10.0 million, respectively, recorded as a reduction to revenue for the provision of specific receivables whose collection is not considered probable. The Company’s trade accounts receivable subject the Company to potential concentrations of credit risk. The Company performs on-going credit evaluations of its customers. Receivables related to sales are generally secured by the product sold to the customer. The Company generally has the right to repossess its rental units in the event of non-payment of receivables relating to the Company’s leasing operations. Inventories Inventories consist of raw materials, supplies, and finished units for sale. Inventories are measured at the lower of cost or net realizable value based on the weighted-average cost. The cost includes expenditures incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their existing location and condition. Rental Equipment Rental equipment is comprised of modular space and portable storage units held for rent or on rent to customers, tank and pump solutions products, which consist primarily of liquid and solid containment units, pumps and filtration equipment, and value-added products and services (“VAPS”) which are in use or available to be used by customers. Rental equipment is measured at cost less accumulated depreciation and impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. Costs of improvements and conversions of rental equipment are capitalized when such costs extend the useful life of the equipment or increase the rental value of the unit. Costs incurred for equipment to meet a particular customer specification are capitalized and depreciated over the lease term taking in consideration the residual value of the asset. Maintenance and repair costs are expensed as incurred. Depreciation is generally computed using the straight-line method over estimated useful lives, as follows: Estimated Useful Life Residual Value Modular space units 10 - 30 years 20 - 55 % Portable storage units 30 years 55 % Tank and pump equipment 7 - 25 years — % VAPS and other related rental equipment 1 - 8 years — % Property, Plant and Equipment Property, plant and equipment is measured at cost less accumulated depreciation and impairment losses. The Company capitalizes external costs and directly attributable internal costs to acquire or create internal use software incurred subsequent to the completion of the preliminary project stage. Costs associated with post-implementation activities are expensed as incurred. The Company evaluates implementation costs incurred in a cloud computing arrangement that is a service contract as described in Cloud Computing Arrangements below. 79 Land is not depreciated. Leasehold improvements are amortized over the lease term. Assets leased under capital leases are depreciated over the shorter of the lease term or their useful life, unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Maintenance and repair costs are expensed as incurred. Depreciation is generally computed using the straight-line method over estimated useful lives as follows: Estimated Useful Life Buildings and leasehold improvements 10 - 40 years Vehicles, machinery, and equipment 3 - 30 years Furniture and fixtures 3 - 10 years Software 3 - 10 years Impairment of Long-Lived Assets When circumstances indicate the carrying amount of long-lived assets in a held-for-use asset group may not be recoverable, the Company evaluates the assets for potential impairment using internal projections of undiscounted cash flows resulting from the use and eventual disposal of the assets. Events or changes in circumstances that may necessitate a recoverability evaluation include, but are not limited to, adverse changes in the regulatory environment or an expectation it is more likely than not that the asset will be disposed of before the end of its previously estimated useful life. If the carrying amount of the assets exceeds the undiscounted cash flows, an impairment expense is recognized for the amount by which the carrying amount of the asset group exceeds its fair value (subject to the carrying amount not being reduced below fair value for any individual long-lived asset that is determinable without undue cost and effort). Consistent with the provisions of ASC 842, the Company assesses whether any operating lease as set impairment exists in accordance with the measurement guidance in Accounting Standard Codification ("ASC") 360, Property Plant and Equipment . Cloud Computing Arrangements In accordance with ASU 2018-15, Goodwill and Other – Internal-Use Software (Subtopic 350-40) (“ASC 350-40"), t he Company evaluates implementation costs incurred in a cloud computing arrangement that is a service contract under the internal-use software framework. Costs related to preliminary project activities and post implementation activities are expensed as incurred. Costs incurred in the development stage are generally capitalized as other assets. Amortization expense is calculated on a straight-line basis over the contractual term of the cloud computing arrangement and recorded as selling, general and administrative expense. Goodwill and Annual Goodwill Impairment Test For acquired businesses, the Company records assets acquired and liabilities assumed at their estimated fair values on the respective acquisition dates. Based on these values, the excess purchase price over the fair value of the net assets acquired is recorded as goodwill. Generally, reporting units are at the operating segment level or one level below the operating segment (the component level), if discrete financial information is prepared and regularly reviewed by segment management. Goodwill acquired in a business combination is assigned to each of the Company’s reporting units that are expected to benefit from the combination. The Company performs its annual impairment test of goodwill as of October 1 at the reporting unit level, as well as during any reporting period in which events or changes in circumstances occur that, in management’s judgment, may constitute triggering events under ASC 350-20, Intangibles – Goodwill and Other, Testing Goodwill for Impairment . The Company performs its assessment of goodwill utilizing either a qualitative or quantitative impairment test. The qualitative impairment test assesses company-specific, industry, market and general economic factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If the Company concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, or elects not to use the qualitative impairment test, a quantitative impairment test is performed. The quantitative impairment test involves a comparison of the estimated fair value of a reporting unit to its carrying amount. The Company uses an independent valuation specialist for its quantitative impairment tests to assist in the valuation. Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, value of net operating losses, future economic and market conditions and determination of appropriate market comparables. Management bases fair value estimates on assumptions it believes to be reasonable but that are unpredictable and inherently uncertain. Actual future results may differ from these estimates. If the carrying amount of the reporting unit exceeds the calculated fair value of the reporting unit, an impairment charge would be recognized for the excess, not to exceed the amount of goodwill allocated to that reporting unit. Intangible Assets Other than Goodwill Intangible assets that are acquired by the Company and determined to have an indefinite useful life are not amortized but are tested for impairment at least annually. The Company’s indefinite-lived intangible assets consist of the Williams Scotsman and Mobile Mini trade names. The Company performs its assessment of indefinite-lived intangible assets utilizing 80 either a qualitative or quantitative impairment test. When utilizing a quantitative impairment test, the Company calculates fair value using a relief-from-royalty method. This method is used to estimate the cost savings that accrue to the owner of an intangible asset who would otherwise have to pay royalties or license fees on revenues earned through the use of the asset. If the carrying amount of the indefinite-lived intangible asset exceeds its fair value, an impairment charge would be recorded to the extent the recorded indefinite-lived intangible asset exceeds the fair value. Other intangible assets that have finite useful lives are measured at cost less accumulated amortization and impairment losses, if any. Amortization is recognized in profit or loss over the estimated useful lives of the intangible asset. Purchase Accounting The Company accounts for acquisitions of businesses under the acquisition method. Under the acquisition method of accounting, the Company records assets acquired and liabilities assumed at their estimated fair value on the date of acquisition. Goodwill is measured as the excess of the fair value of the consideration transferred over the fair value of the identifiable net assets. When appropriate, our estimates of the fair values of assets and liabilities acquired include assistance from independent third-party valuation firms. Valuations are finalized as soon as practicable, but not later than one year from the acquisition date. Any subsequent changes to purchase price allocations result in a corresponding adjustment to goodwill. Transaction costs are expensed in the acquisition of a business. Long-lived assets (principally rental equipment), goodwill and other intangible assets generally represent the largest components of our acquisitions. Rental equipment is valued utilizing a replacement cost approach. Intangible assets are recognized at their estimated fair values as of the date of acquisition and generally consist of customer relationships and trade names. Determination of the estimated fair value of intangible assets requires judgment. The estimated fair value of customer relationships is determined based on estimates and judgments regarding discounted future after-tax earnings and cash flows arising from lease renewals and new lease arrangements expected from customer relationships. The fair value of trade name intangible assets is determined utilizing the relief from royalty method. Under this form of the income approach, a royalty rate based on observed market royalties is applied to projected revenue supporting the trade name and discounted to present value. Acquisitions that do not meet the definition of a business are accounted for as asset acquisitions. An asset acquisition is accounted for by allocating the cost of the acquisition to the individual assets acquired and liabilities assumed on a relative fair value basis. Goodwill is not recognized in an asset acquisition. Any consideration in excess of net assets acquired is allocated to acquired assets on a relative fair value basis. The Company measures the fair value of assets acquired utilizing observable market transaction data for comparable assets or recent purchase prices. Transaction costs are considered a component of the cost of the acquisition in an asset acquisition. Retirement Benefit Obligation The Company provides benefits to certain of its employees under defined contribution benefit plans. The Company’s contributions to these plans are generally based on a percentage of employee compensation or employee contributions. These plans are funded on a current basis. For its US and Canada employees, the Company sponsors defined contribution benefit plans that have discretionary matching contribution and profit-sharing features. Fo r the years ended December 31, 2021, 2020 and 2019, the Company made matc hing contributions of $ 11.7 million, $ 7.1 million and $ 5.4 million to these plans, respectively. Stock-Based Compensation Prior to the Merger, stock awards were granted under the WillScot Corporation 2017 Incentive Award Plan (the "2017 Incentive Plan"), which included Restricted Stock Awards ("RSAs") and Restricted Stock Units ("RSUs"). On June 24, 2020, WillScot's stockholders approved the WillScot Mobile Mini 2020 Incentive Award Plan ("2020 Incentive Plan") to take effect pending completion of the Merger and, as a result, all future incentive awards are granted under the 2020 Incentive Plan. The 2020 Incentive Plan is administered by the Compensation Committee. Under the 2020 Incentive Plan, the Compensation Committee may grant an aggreg ate of 6,488,988 shares of Common Stock in the form of non-qualified stock options, incentive stock options, stock appreciation rights, RSAs, RSUs, performance compensation awards and stock bonus awards. Stock-based payments, including the grant of stock options, RSAs and RSUs, are subject to service-based vesting requirements, and expense is recognized on a straight-line basis over the vesting period. Forfeitures are accounted for as they occur. Stock-based compensation expense includes grants of stock options, time-based RSUs ("Time-Based RSUs") and performance-based RSUs ("Performance-Based RSUs", together with Time-Based RSUs, the "RSUs"). RSUs are recognized in the financial statements based on their fair value. In addition, stock-based payments to non-executive directors include grants of RSAs. Time-Based RSUs and RSAs are valued based on the intrinsic value of the difference between the exercise price, if any, of the award and the fair market value of WillScot Mobile Mini's Common Stock on the grant date. Performance-Based RSUs are valued based on a Monte Carlo simulation model to reflect the impact of the Performance-Based RSUs market condition. The probability of satisfying a market condition is considered in the estimation of the grant-date fair value for Performance-Based RSUs and the compensation cost is not reversed if the market condition is not achieved, provided the requisite service has been provided. RSAs cliff vest in a one year period. Time-Based RSUs vest ratably over a period of four years . Certain Performance-Based RSUs cliff vest based on achievement of the relative total stockholder return ("TSR") of the Company's Common Stock as compared to the TSR of the constituents in an Index at the grant date over the performance period of three years . For 81 certain 2021 grants, the TSR of the Company's Common Stock is compared to the TSR of the constituents in the S&P 400 index. The target number of RSUs may be adjusted from 0 % to 200 % based on the TSR attainment levels defined by the Compensation Committee. The 100 % target payout is tied to performance at the 50 % percentile, with a payout curve ranging from 0 % (for performance less than the 25 % percentile) to 200 % (for performance at or above the 85 % percentile). For grants in 2020 and prior, the TSR of the Company's Common Stock is compared to the TSR of constituents in the Russell 3000 index. The target number of RSUs may be adjusted from 0 % to 150 % based on the TSR attainment levels defined by the Compensation Committee. The 100 % target payout is tied to performance at the 50 % percentile, with a payout curve ranging from 0 % (for performance less than the 25 % percentile) to 150 % (for performance at or above the 75 % percentile). Vesting is also subject to continued service requirements through the vesting date. For 555,790 Performance-Based RSUs granted in 2021, the awards cliff vest based on achievement of specified share prices of the Company's Common Stock at annual measurement dates over performance periods of 4.5 years to 4.8 years. The target number of RSUs may be adjusted from 0 to 1,333,334 based on the stock price attainment levels defined by the Company's Compensation Committee. The 555,790 RSU target payout is tied to a stock price of $ 47.50 , with a payout ranging from 0 RSUs (for a stock price less than $ 42.50 ) to 1,333,334 RSUs (for a stock price of $ 60.00 or greater). Stock options vest in tranches over a period of four years and expire ten years from the grant date. The fair value of each stock option award on the grant date is estimated using the Black-Scholes option-pricing model with the following assumptions: expected dividend yield, expected stock price volatility, weighted-average risk-free interest rate and weighted-average expected term of the options. The volatility assumption used in the Black-Scholes option-pricing model was based on a blend of peer group volatility and Company trading history as the Company did not have a sufficient trading history as a stand-alone public company to rely exclusively on its own trading history. Future calculations may use the Company trading history. Additionally, due to an insufficient history with respect to stock option activity and post-vesting cancellations, the expected term assumption is based on the simplified method under GAAP, which is based on the vesting period and contractual term for each tranche of awards. The mid-point between the weighted-average vesting term and the expiration date is used as the expected term under this method. The risk-free interest rate used in the Black-Scholes model is based on the implied US Treasury bill yield curve at the date of grant with a remaining term equal to the Company’s expected term assumption. WillScot Mobile Mini has never declared or paid a cash dividend on common shares. Foreign Currency Translation and Transactions The Company’s reporting currency is the US Dollar (“USD”). Exchange rate adjustments resulting from foreign currency transactions are recognized in profit or loss, whereas effects resulting from the translation of financial statements are reflected as a component of accumulated other comprehensive loss, which is a component of shareholders’ equity. The assets and liabilities of subsidiaries whose functional currency is different from the USD are translated into USD at exchange rates at the reporting date and income and expenses are translated using average exchange rates for the respective period. Exchange rate adjustments resulting from transactions in foreign currencies (currencies other than the Company entities’ functional currencies) are remeasured to the respective functional currencies using exchange rates at the dates of the transactions and are recognized in currency (gains) losses on the consolidated statements of operations. Foreign exchange gains and losses arising from a receivable or payable to a consolidated Company entity, the settlement of which is neither planned nor anticipated in the foreseeable future, are considered to form part of a net investment in the Company entity and are included within accumulated other comprehensive loss. Derivative Instruments and Hedging Activities The Company utilizes derivative financial instruments, specifically interest rate swaps, to manage its exposure to fluctuations in interest rates on variable rate debt. The Company does not use derivatives for trading or speculative purposes. The Company records derivatives on the balance sheet at fair value within prepaid expenses and other current assets and other non-current assets (if in an unrealized gain position) or within accrued liabilities and other non-current liabilities (if in an unrealized loss position). If a derivative is designated as a cash flow hedge and meets the highly effective threshold, the changes in the fair value of derivatives are recorded in accumulated other comprehensive income (loss). Amounts reported in accumulated other comprehensive income (loss) related to the cash flow hedges are reclassified to earnings within interest expense when the hedged item impacts earnings. For any derivative instruments not designated as hedging instruments, changes in fair value would be recognized in earnings within interest expense in the period that the change occurs. Cash flows from derivative instruments are presented within net cash provided by operating activities in the consolidated statements of cash flows. The Company assesses, both at the inception of the hedge and on an ongoing quarterly basis, whether the derivatives designated as cash flow hedges are highly effective in offsetting the changes in cash flows of the hedged items. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company enters into derivative financial ins truments only with counterparties with high credit ratings and with major financial institutions. The Company does not anticipate that any of the counterparties will fail to meet their obligations. 82 Revenue Recognition A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Leasing and Services Revenue The majority of revenue is generated by rental income subject to the guidance of Accounting Standard Update ("ASU") 2016-2, Leases (Topic 842) ("ASC 842"). The remaining revenue is generated by performance obligations in contracts with customers for services or sale of units subject to the guidance in Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASC 606"). Leasing Revenue Income from operating leases is recognized on a straight-line basis over the lease term. The Company's lease arrangements can include multiple lease and non-lease components. Examples of lease components include, but are not limited to, the lease of modular space, portable storage units and VAPS. Examples of non-lease components include, but are not limited to, the delivery, install ation, maintenance, and removal services commonly provided in a bundled transaction with the lease components. Arrangement consideration is allocated between lease deliverables and non-lease components based on the relative estimated selling (leasing) price of each deliverable. Estimated selling (leasing) price of the lease deliverables is based upon the estimated stand-alone selling price of the related performance obligations using an adjusted market approach. When leases and services are billed in advance, recognition of revenue is deferred until services are rendered. If equipment is returned prior to the contractually obligated period, the excess, if any, between the amount the customer is contractually required to pay over the cumulative amount of revenue recognized to date is recognized as incremental revenue upon return. Rental equipment is leased primarily under operating leases. Operating lease minimum contractual terms within the NA Modular segment, as defined in Note 18, generally range from 1 month to 60 months and averaged approximately 10 months across this segment's rental fleet for the year ended December 31, 2021. Rental contracts with customers within the NA Storage, UK Storage, and Tank & Pump segments are generally based on a 28 -day rate and billing cycle. The rental continues until cancelled by the Company or the customer. The Company records changes in estimated collectability directly against leasing revenue. The Company may use third parties to satisfy its performance obligations, including both the provision of VAPS and other services. To determine whether it is the principal or agent in the arrangement, the Company reviews each third-party relationship on a contract-by-contract basis. The Company is considered an agent when its role is to arrange for another entity to provide the VAPS and other services to the customer. In these instances, the Company does not control the rental unit or service before it is provided and the risk of performance is held by the third party. The Company is considered the principal when it controls the VAPS or other services prior to transferring control to the customer and retains the risk of performance. WillScot Mobile Mini may be a principal in the fulfillment of some leasing contracts and services elements and an agent for other elements within the same contract. Revenue is recognized on a gross basis when the Company is the principal in the arrangement and on a net basis when it is the agent. Services Revenue The Company generally has three non-lease service-related performance obligations in its contracts with customers: • Delivery and installation of the modular or portable storage unit; • Maintenance and other ad hoc services performed during the lease term; and • Removal services that occur at the end of the lease term. Consideration is allocated to each of these performance obligations within the contract based upon their estimated relative standalone selling prices using the estimated cost plus a margin approach. Revenue from these activities is recognized as the services are performed. Sales Revenue Sales revenue is generated by the sale of new and rental units. Revenue from the sale of new and rental units is generally recognized at a point in time upon the transfer of control to the customer, which occurs when the unit is delivered and installed in accordance with the contract. Sales transactions constitute a single performance obligation. Other Matters The Company's non-lease revenues do not include material amounts of variable consideration, other than the variability noted for services arrangements expected to be performed beyond a twelve-month period. The Company's payment terms vary by the type and location of its customer and the product or services offered. The time between invoicing and when payment is due is not significant. While the Company may bill certain customers in advance, its contracts do not contain a significant financing component based on the short length of time between upfront billings and the performance of contracted services. For certain products, services, or customer types, the Company requires payment before the products or services are delivered to the customer. At December 31, 2021, current deferred revenue and customer 83 deposits included deferred revenue of $ 156.9 million and customer deposits of $ 2.7 million, respectively. At December 31, 2020, current deferred revenue and customer deposits included deferred revenue of $ 133.2 million and customer deposits of $ 2.3 million, respectively. Revenue is recognized net of sales tax billed to customers, which is subsequently remitted to governmental authorities. Leases as Lessee The Company leases real estate for certain of its branch offices, administrative offices, rental equipment storage properties, vehicles and equipment, and administrative operations. The Company determines if an arrangement is or contains a lease at inception. Leases are classified as either finance or operating at inception of the lease, with classification affecting the pattern of expense recognition in the income statement. Short-term leases, defined as leases with an initial term of 12 months or less, are not recorded on the balance sheet. Lease expense for short-term leases is recognized on a straight-line basis over the lease term. The Company has leases that contain both lease and non-lease components and has elected, as an accounting policy, to not separate lease components and non-lease components. Operating and finance lease right of use ("ROU") assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The lease liability is calculated as the present value of the remaining minimum rental payments for existing leases using either the rate implicit in the lease or, if none exists, the Company's incremental borrowing rate, as the discount rate. The Company uses its incremental borrowing rate at commencement date in determining the present value of lease payments for those leases where the implicit rate is not known. The Company's incremental borrowing rate is a hypothetical rate based on its understanding of what would be the Company's secured credit rating. Variable lease payments are expensed in the period in which the obligation for those payments is incurred. Variable lease payments include payments for common area maintenance, real estate taxes, management fees and insurance. Many of the Company’s real estate lease agreements include options to extend the lease, which are not included in the minimum lease terms unless the Company is reasonably certain it will exercise the option. Many of these leases include one or more options to renew. Additionally, the Comp any’s leases do not generally include options to terminate the lease prior to the end of the lease term. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Advertising and Promotion Advertising and promotion costs, which are expensed as incurred, were $ 8.1 million , $ 7.3 million and $ 4.0 million for the years ended December 31, 2021, 2020 and 2019, respectively. Shipping Costs The Company includes third-party costs to deliver rental equipment to customers in costs of leasing and services, and cost of sales. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company records deferred tax assets to the extent it believes that it is more likely than not that these assets will be realized. In making such determination, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent results of operations. Valuation allowances are recorded to reduce the deferred tax assets to an amount that will more likely than not be realized. The Company assesses the likelihood that each of the deferred tax assets will be realized. To the extent management concludes the realization of any deferred tax assets is not more likely than not, the Company establishes a valuation allowance. When a valuation allowance is established or there is an increase in an allowance in a reporting period, tax expense is generally recorded in the Company’s consolidated statement of operations. Conversely, to the extent circumstances indicate that a valuation allowance is no longer necessary, that portion of the valuation allowance is reversed, which generally reduces the Company’s income tax expense. Deferred tax liabilities are recognized for the income taxes on the undistributed earnings of wholly-owned foreign subsidiaries unless such earnings are indefinitely reinvested, or will only be repatriated when possible to do so at minimal additional tax cost. Current income tax relating to items recognized directly in equity is recognized in equity and not in profit (loss) for the year. In accordance with applicable authoritative guidance, the Company accounts for uncertain income tax positions using a benefit recognition model with a two-step approach; a more-likely-than-not recognition criterion; and a measurement 84 approach that measures the position as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement. If it is not more-likely-than-not that the benefit of the tax position will be sustained on its technical merits, no benefit is recorded. Uncertain tax positions that relate only to timing of when an item is included on a tax return are considered to have met the recognition threshold. The Company classifies interest on tax deficiencies and income tax penalties within income tax expense. The Company accounts for any impacts of the Global Intangible Low-Taxed Income ("GILTI") in the period in which they are incurred. Fair Value Measurements The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair va lue measurement. The inputs are prioritized into three levels that may be used to measure fair value. See further discussion of the levels in Note 14. Warrants The Company accounts for warrants in accordance with applicable accounting guidance provided in ASC 815-40, Contracts in Entity's Own Equity , as either derivative liabilities or as equity instruments depending on the specific terms of the warrant agreements. In periods subsequent to issuance, warrants classified as liabilities are subject to remeasurement at each balance sheet date and transaction date with changes in the estimated fair values of the common stock warrant liabilities and gains and losses on extinguishment of common stock warrant liabilities reported in the consolidated statements of operations. Recently Issued and Adopted Accounting Standards Recently Issued Accounting Standards ASU 2020-04. Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This update is intended to ease the potential burden in accounting for and recognizing the effects of reference rate reform. It provides optional practical expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform, if certain criteria are met. This update became effective on March 12, 2020 and is available for use through December 31, 2022. The Company is currently evaluating the impact of reference rate reform and potential impact of adoption of these elective practical expedients on its consolidated financial statements and does not expect the impact to be material. ASU 2021-08. Business Combinations (Topic 815): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. ASU 2021-08 requires that an acquirer recognize and measure contract assets and liabilities acquired in a business combination in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This standard is effective for annual periods beginning after December 15, 2022, including interim periods therein, with early adoption permitted. The guidance will be applied prospectively to acquisitions occurring on or after the effective date. The Company will continue to evaluate the impact of this guidance, which will depend on the contract assets and liabilities acquired in future business combinations. Recently Adopted Accounting Standards From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which removes certain exceptions to the general principles for income taxes and also improves consistent application of accounting by clarifying or amending existing guidance. On January 1, 2021, the Company adopted ASU 2019-12 and the impact of adoption was not material to the Company's consolidated financial statements. The Company applied the standard prospectively for intraperiod tax allocation, year-to-date losses that exceed anticipated annual losses and enacted changes in tax laws. 85 NOTE 2 - Business Combination and Acquisitions Mobile Mini Merger On March 1, 2020, the Company, along with its newly formed subsidiary, Merger Sub, entered into the Merger Agreement with Mobile Mini, hereby referred to as the “Merger.” The Merger was completed on July 1, 2020 and Merger Sub merged with and into Mobile Mini and the separate corporate existence of Merger Sub ceased, and Mobile Mini continued its existence as the surviving corporation in the Merger and a wholly-owned subsidiary of the Company. Mobile Mini is a leading provider of portable storage solutions in North America and the UK and a leading provider of specialty containment solutions in the US. Purchase Price Upon completion of the Merger, each issued and outstanding share of Mobile Mini Common Stock, par value $ 0.01 per share, converted to 2.405 shares of WillScot Class A Common Stock, par value $ 0.0001 per share, and cash in lieu of any fractional shares. The Company issued 106,426,721 shares of Class A Common Stock to Mobile Mini stockholders as consideration for the Merger. The trading price of the Class A Common Stock was $ 12.53 per share on the closing date. In addition, Mobile Mini stock options converted into WillScot Mobile Mini stock options. The purchase price has been determined to be as follows: (in thousands, except share and per share data) Mobile Mini Common Stock outstanding 44,252,275 Share conversion ratio 2.405 Common Stock issued 106,426,721 Common Stock per share price as of July 1, 2020 $ 12.53 Fair value of shares of WillScot Class A Common Stock issued $ 1,333,527 Cash paid for fractional shares 30 Fair value of Mobile Mini Options converted to WillScot Mobile Mini Options 19,279 Total purchase price $ 1,352,836 The Merger was accounted for using the acquisition method of accounting, and WillScot is considered the accounting acquirer. Under the acquisition method of accounting, the Company assigned the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their fair values at the closing date. The excess of the purchase price over those fair values is recorded as goodwill. The Company's acquisition of Mobile Mini represented a non-cash investing outflow activity of $ 1,352,836 and the related issuance of equity including stock options represented a non-cash financing inflow activity of $ 1,352,836 . The Company recorded the fair values based on independent valuations, discounted cash flow analyses, quoted market prices, contributory asset charges, and estimates made by management. The following table summarizes the July 1, 2020 fair values of the assets acquired and liabilities assumed. 86 Opening Balance Sheet (in thousands) July 1, 2020 Cash and cash equivalents $ 17,203 Trade receivables 87,492 Inventories 8,987 Prepaid expenses and other current assets 13,717 Rental equipment 1,032,672 Property, plant and equipment, net 160,729 Operating lease assets 92,054 Intangible assets 374,500 Goodwill identified 937,135 Other non-current assets 2,520 Total identifiable assets acquired 2,727,009 Accounts payable ( 29,797 ) Accrued liabilities and interest ( 40,335 ) Deferred revenue and customer deposits ( 38,846 ) Operating lease liabilities ( 89,968 ) Debt and finance lease liabilities ( 897,244 ) Deferred tax liabilities ( 276,555 ) Other long-term liabilities ( 1,428 ) Total liabilities assumed ( 1,374,173 ) Net assets acquired (purchase price) $ 1,352,836 The goodwill is reflective of Mobile Mini's going concern value and operational synergies that would not be available to other market participants. Goodwill from the Mobile Mini acquisition is not deductible for income tax purposes. Mobile Mini generated $ 730.7 million of revenue and $ 147.3 million of pre-tax income in the year ended December 31, 2021, which is included in the consolidated statement of operations. Mobile Mini generated $ 316.5 million of revenue and $ 23.1 million of pre-tax income from the acquisition date to December 31, 2020, which is included in the consolidated statement of operations for the year ended December 31, 2020. Pro Forma Information The below pro forma results give effect to the following as if they occurred on January 1, 2019, (i) the Merger, (ii) borrowings under the Company's 2025 Secured Notes and 2020 ABL Facility (terms as defined in Note 9) used to repay certain debt in connection with the Merger, (iii) extinguishment of the Mobile Mini revolving credit facility and senior notes assumed in the Merger and immediately repaid, (iv) extinguishment of WillScot's 2017 ABL Facility and WillScot's 2022 Secured Notes (terms as defined in Note 9) repaid in connection with the Merger and (v) elimination of WillScot's non-controlling interest and WillScot's Class B Common Stock in connection with the Merger. See Note 10 for further details. The pro forma information is not necessarily indicative of the Company’s results of operations had the Merger been completed on January 1, 2019, nor is it necessarily indicative of the Company’s future results. The pro forma information does not reflect any cost savings from operating efficiencies, synergies, or revenue opportunities that could result from the Merger. 87 The tables below present unaudited pro forma combined statements of operations information for the years ended December 31, 2020 and 2019: (unaudited, in thousands) Year Ended December 31, 2020 Year Ended December 31, 2019 WillScot revenues $ 1,367,645 $ 1,063,665 Mobile Mini revenues 284,240 620,018 Pro forma revenues $ 1,651,885 $ 1,683,683 WillScot Mobile Mini pretax income (loss) $ 23,889 $ ( 123,356 ) (a) Mobile Mini pretax income 37,875 111,705 Pro forma pretax income (loss) 61,764 ( 11,651 ) Pro forma adjustments to combined pretax income (loss): Elimination of Merger transaction costs 80,852 — (b) Impact of fair value mark-ups on rental fleet depreciation ( 2,334 ) ( 4,667 ) (c) Other depreciation expense and intangible asset amortization ( 11,397 ) ( 22,399 ) (d) Interest expense ( 6,113 ) ( 1,916 ) (e) Elimination of Mobile Mini interest 15,921 39,672 (f) Elimination of loss on extinguishment of debt 19,682 1,512 (g) Pro forma pretax income 158,375 551 Income tax expense ( 34,549 ) ( 28,892 ) (h) Pro forma net income $ 123,826 $ ( 28,341 ) (a) Excludes impact of non-controlling interest which was eliminated as part of the Sapphire Exchange. See Note 10. (b) Eliminates discrete Merger transaction costs incurred as a result of the Mobile Mini Merger. (c) Depreciation on rental equipment and property, plant and equipment were adjusted for the determination of the fair value of equipment acquired in the Mobile Mini Merger. (d) Represents the differential in other depreciation and amortization expense related to the fair value purchase accounting adjustments as a result of the Merger, principally the amortization of the Mobile Mini customer relationship valued at $ 209.0 million. (e) In connection with the Merger, the Company entered into a new ABL Facility and drew $ 1.47 billion at close with an estimated interest rate of 2.046 %, issued the 2025 Secured Notes at 6.125 %, repaid the 2022 Secured Notes and repaid the 2017 ABL Facility. Interest and amortization of deferred financing fees for the 2020 ABL Facility and the 2025 Secured Notes has been included offset by the removal of interest and amortization of deferred fina