WSC filing — read by section

Item 8. Financial Statements and Supplementary Data

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 financing fees attributable to the 2022 Secured Notes and the 2017 ABL Facility. See Note 9 for definitions of terms. 
 
 (f) Interest and amortization of deferred financing fees on the senior notes and line of credit maintained by Mobile Mini which were assumed at acquisition and repaid immediately using proceeds from the 2020 ABL Facility and 2025 Secured Notes was eliminated. See Note 9 for definition of terms. 
 (g) Elimination of loss on extinguishment of debt in connection with the redemption premium on the 2022 Secured Notes and unamortized deferred financing costs on the 2022 Secured Notes and 2017 ABL Facility. See Note 9 for definitions of terms. 
 
 (h) Reflects the recorded income tax provision plus 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, eliminates the 2020 reversal of $ 54.6 million of valuation allowance as a result of reassessment of the realizability of deferred tax assets as a result of the Merger. See Note 12. 
 

 Asset Acquisitions 
 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 for $ 147.2 million in cash. The accompanying consolidated financial statements include $ 142.1 million of rental equipment as a result of these acquisitions. 
 Transaction and Integration Costs 
 The Company recorded $ 1.4 million and $ 64.1 million in transaction costs in the years ended December 31, 2021 and 2020, respectively. The Company records integration costs within selling, general and administrative ("SG&A") expense. The Company incurred $ 28.4 million and $ 16.6 million in integration costs related to the other acquisitions and the Merger for the years ended December 31, 2021 and 2020, respectively. The Company incurred $ 26.6 million in integration costs related to the ModSpace acquisition for the year ended December 31, 2019. 
 
 
 88 

 
 
 

 NOTE 3 - Revenue 
 Revenue Disaggregation 
 Geographic Areas 
 The Company had total revenue in the following geographic areas for the years ended December 31, as follows: 
 
 Year Ended December 31, 
 (in thousands) 2021 2020 2019 
 US $ 1,652,967 $ 1,227,465 $ 966,766 
 Canada 116,070 79,630 80,514 
 Mexico 14,834 14,190 16,385 
 UK 111,026 46,360 — 
 Total revenues $ 1,894,897 $ 1,367,645 $ 1,063,665 

 Major Product and Service Lines 
 Equipment leasing is the Company's core business and the primary driver of the Company's revenue and cash flows. This includes rental modular space, portable space and tank and pump units along with VAPS, which include furniture, steps, ramps, basic appliances, internet connectivity devices, and other items used by customers in connection with the Company's products. Leasing is complemented by new unit sales and sales of rental units. In connection with its leasing and sales activities, the Company provides services including delivery and installation, maintenance and ad hoc services and removal services at the end of lease transactions. The Company’s revenue by major product and service line for the years ended December 31, was as follows: 
 
 Year Ended December 31, 
 (in thousands) 2021 2020 2019 
 Modular space leasing revenue $ 736,066 $ 596,880 $ 516,299 
 Portable storage leasing revenue 259,308 125,216 24,277 
 Tank and pump leasing revenue 71,404 29,798 — 
 VAPS and third party leasing revenues (a) 
 284,901 202,938 159,327 
 Other leasing-related revenue (b) 
 60,444 46,615 44,282 
 Leasing revenue 1,412,123 1,001,447 744,185 
 Delivery and installation revenue 374,682 274,156 220,057 
 Total leasing and services revenue 1,786,805 1,275,603 964,242 
 New unit sales revenue 52,882 53,093 59,085 
 Rental unit sales revenue 55,210 38,949 40,338 
 Total revenues $ 1,894,897 $ 1,367,645 $ 1,063,665 

 (a) Includes $ 28.5 million , $ 18.8 million, and $ 15.9 million of VAPS service revenue for the years ended December 31, 2021, 2020 and 2019, respectively. 
 (b) Includes primarily damage billings, delinquent payment charges, and other processing fees. 
 Leasing and Services Revenue 
 The majority of revenu e ( 73 %, 72 %, and 68 % for the years ended December 31, 2021, 2020 and 2019, respectively ) is generated by lease income subject to the guidance 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 ASC 606. 
 89 

 
 

 Future committed leasing revenues under non-cancelable operating leases with the Company’s customers at December 31, 2021 for the years ended December 31, 2022 through 2026 and thereafter were as follows: 
 
 (in thousands) Operating Leases 
 2022 $ 284,137 
 2023 117,363 
 2024 42,646 
 2025 16,778 
 2026 8,260 
 Thereafter 5,431 
 Total $ 474,615 

 Receivables 
 The Company manages credit risk associated with its accounts receivables at the customer level. Because the same customers generate the revenues that are accounted for under both ASC 606 and ASC 842, the discussions below on credit risk and the Company's allowance for credit losses address the Company's total revenues. 
 Concentration of credit risk with respect to the Company's receivables is limited because of a large number of geographically diverse customers who operate in a variety of end user markets. No single customer accounted for more than 1.5% and 1.2% of the Company’s receivables at December 31, 2021 and 2020, respectively. The Company's top five customers with the largest open receivables balances represent ed 5.0 % and 4.9 % of the total receivables balance as of December 31, 2021 and 2020, respectively. The Company manages credit risk through credit approvals, credit limits, and other monitoring procedures. 
 The Company's allowance for credit losses reflects its estimate of the amount of receivables that it will be unable to collect . The estimated losses are calculated using the loss rate method based upon a review of outstanding receivables, related aging, and historical collection experience. T he Company's estimates reflect changing circumstances, and the Company may be required to increase or decrease its allowance. During the years ended December 31, 2021, 2020, and 2019, the Company recognized bad debt expense to reflect changes in the allowance for credit losses of $ 17.5 million, $ 13.4 million , and $ 4.5 million, respectively, within SG&A expense in its consolidated statements of operations. 
 Contract Assets and Liabilities 
 When customers are billed in advance for services, the Company defers recognition of revenue until the related services are performed, which generally occurs at the end of the contract. The balance sheet classification of deferred revenue is determined based on the contractual lease term. For contracts that continue beyond their initial contractual lease term, revenue continues to be deferred until the services are performed. During the years ended December 31, 2021 and 2020, $ 40.8 million and $ 37.5 million, respectively, of deferred revenue relating to these services, was recognized as revenue. At December 31, 2021 and 2020, the Company had approximately $ 79.4 million and $ 74.1 million, respectively, of deferred revenue related to these services. 
 The Company does not have material contract assets, and it did not recognize any material impairments of any contract assets. 
 The Company's uncompleted contracts with customers have unsatisfied (or partially satisfied) performance obligations. For the future services revenues that are expected to be recognized within twelve months, the Company has elected to utilize the optional disclosure exemption made available regarding transaction price allocated to unsatisfied (or partially unsatisfied) performance obligations. The transaction price for performance obligations that will be completed in greater than twelve months is variable based on the costs ultimately incurred to provide those services and therefore the Company is applying the optional exemption to omit disclosure of such amounts. 
 The primary costs to obtain contracts for new and rental unit sales with the Company's customers are commissions. The Company pays its sales force commissions on the sale of new and rental units. For new and rental unit sales, the period benefited by each commission is less than one year. As a result, the Company has applied the practical expedient for incremental costs of obtaining a sales contract and expenses commissions as incurred. 
 
 
 90 

 
 
 

 NOTE 4 - Leases 
 As of December 31, 2021, the undiscounted future lease payments for operating and finance lease liabilities were as follows: 
 
 (in thousands) Operating Finance 
 2022 $ 63,679 $ 21,842 
 2023 52,893 17,665 
 2024 44,859 14,743 
 2025 37,850 14,851 
 2026 27,853 12,839 
 Thereafter 63,181 14,202 
 Total lease payments 290,315 96,142 
 Less: interest ( 43,054 ) ( 7,092 ) 
 Present value of lease liabilities $ 247,261 $ 89,050 

 As of December 31, 2020 , the undiscounted future lease payments for operating and finance lease liabilities were as follows: 
 
 ( in thousands) 
 Operating Finance 
 2021 $ 60,120 $ 18,252 
 2022 51,184 17,158 
 2023 41,074 13,707 
 2024 33,336 10,786 
 2025 26,542 10,893 
 Thereafter 67,421 13,410 
 Total lease payments 279,677 84,206 
 Less: interest ( 47,853 ) ( 6,332 ) 
 Present value of lease liabilities $ 231,824 $ 77,874 

 Finance lease liabilities are included within long-term debt and current portion of long-term debt on the consolidated balance sheets. 
 
 91 

 
 

 The Company’s lease activity during the years ended December 31, 2021 and 2020 was as follows: 
 
 Year Ended December 31, 
 Financial Statement Line (in thousands) 
 2021 2020 
 Finance Lease Expense 
 Amortization of finance lease assets $ 19,102 $ 9,556 
 Interest on obligations under finance leases 2,283 1,081 
 Total finance lease expense $ 21,385 $ 10,637 
 
 Operating Lease Expense 
 Fixed lease expense 
 Cost of leasing and services $ 3,979 $ 5,723 
 Selling, general and administrative 60,253 43,482 
 Lease impairment expense and other related charges 2,028 2,800 
 Short-term lease expense 
 Cost of leasing and services 22,335 25,576 
 Selling, general and administrative 894 2,067 
 Lease impairment expense and other related charges — 471 
 Variable lease expense 
 Cost of leasing and services 7,794 6,981 
 Selling, general and administrative 6,355 5,436 
 Lease impairment expense and other related charges 492 855 
 Total operating lease expense $ 104,130 $ 93,391 

 The Company initiated certain restructuring plans associated with the 2018 acquisition of Modular Space Holdings, Inc. ("ModSpace") and the Merger in order to capture operating synergies as a result of integrating these entities. The restructuring activities primarily included the termination of leases for duplicative branches, equipment, and other facilities. As part of these plans, certain of its leased locations were vacated and leases were terminated or impaired. 
 During the year ended December 31, 2021 , the Company recorded $ 2.9 million in lease impairment expense and other related charges which is comprised of $ 0.3 million loss on lease exit and impairment charges and $ 2.6 million in close d location rent expense. During the year ended December 31, 2020, the Company recorded $ 4.9 million in lease i mpairment expense and other relat ed charges which is comprised of $ 0.7 million loss on lease exit and $ 4.2 million in closed location rent expense. During the year ended December 31, 2019, the Company recorded $ 8.7 million in lease impairment expense and other related charges which is comprised of $ 4.2 million in ROU asset impairment on l eased locations no longer used in operations, $ 1.9 million loss on lease exit and $ 2.6 million in closed location rent expense. 
 Supplemental cash flow information related to leases for the years ended December 31, 2021 and 2020 were as follows: 
 Year Ended December 31, 
 Supplemental Cash Flow Information (in thousands) 
 2021 2020 
 Cash paid for the amounts included in the measurement of lease liabilities: 
 Operating cash outflows from operating leases $ 65,101 $ 45,883 
 Operating cash outflows from finance leases $ 2,309 $ 1,058 
 Financing cash outflows from finance leases $ 17,399 $ 8,510 
 
 Right of use assets obtained in exchange for lease obligations $ 70,439 $ 33,576 
 Assets obtained in exchange for finance leases $ 27,835 $ 9,089 

 
 
 
 92 

 
 

 Weighted-average remaining operating lease terms and the weighted average discount rates as of December 31 were as follows: 
 
 Lease Terms and Discount Rates 2021 2020 
 Weighted-average remaining lease term - operating leases 6.1 years 6.4 years 
 Weighted-average discount rate - operating leases 5.0 % 5.7 % 
 Weighted-average remaining lease term - finance leases 4.5 years 4.6 years 
 Weighted-average discount rate - finance leases 2.9 % 2.9 % 

 
 
 
 NOTE 5 - Inventories 
 Inv entories at December 31, consisted of the following: 
 (in thousands) 2021 2020 
 Raw materials $ 26,854 $ 19,560 
 Finished units 5,885 4,171 
 Inventories $ 32,739 $ 23,731 

 
 
 
 
 NOTE 6 - Rental Equipment, net 
 Rental equipment, net at December 31 consisted of the following: 
 
 (in thousands) 2021 2020 
 Modular space units $ 3,005,195 $ 2,796,284 
 Portable storage units 758,619 653,707 
 Tank and pump products 156,112 132,071 
 Value added products 168,419 143,652 
 Total rental equipment 4,088,345 3,725,714 
 Less: accumulated depreciation ( 1,007,364 ) ( 794,068 ) 
 Rental equipment, net $ 3,080,981 $ 2,931,646 

 In 2021, certain of the Company’s rental equipment in Louisiana was adversely impacted by Hurricane Ida. The Company maintains insurance on its rental equipment, generally in the form of replacement cost policies. Such policies are subject to varying deductibles and other conditions. Based on management’s preliminary estimates of potential losses net of insurance recoveries, the estimated impact to our consolidated financial statements will be immaterial. 
 
 
 
 NOTE 7 – Property, Plant and Equipment, net 
 Property, plant and equipment, net at December 31 consisted of the following: 
 
 (in thousands) 2021 2020 
 Land, buildings, and leasehold improvements $ 167,132 $ 154,210 
 Vehicles and equipment 185,918 171,881 
 Office furniture, fixtures and software 87,613 75,928 
 Total property, plant and equipment 440,663 402,019 
 Less: accumulated depreciation ( 128,485 ) ( 98,369 ) 
 Property, plant and equipment, net $ 312,178 $ 303,650 

 Depreciation expense related to property, plant and equipment was $ 50.8 million, $ 28.9 million, and $ 11.4 million for the years ended December 31, 2021, 2020 and 2019, respectively. 
 As of December 31, 2021 and 2020, the gross cost of property, plant and equipment assets under finance leases was $ 98.6 million and $ 78.7 million, respectively , with related accumulated depreciation of $ 27.4 million and $ 9.5 million, respectively . The depreciation expense for these assets is presented in other depreciation and amortization in the consolidated statements of operations. 
 
 
 93 

 
 
 

 NOTE 8 - Goodwill and Intangible Assets 
 Goodwill 
 Changes in the carrying amount of goodwill were as follows: 
 (in thousands) NA Modular NA Storage UK Storage Tank and Pump Total 
 Balance at December 31, 2019 $ 235,177 $ — $ — $ — $ 235,177 
 Acquisition of Mobile Mini — 726,529 59,183 143,262 928,974 
 Effects of movements in foreign exchange rates 651 — 6,417 — 7,068 
 Balance at December 31, 2020 235,828 726,529 65,600 143,262 1,171,219 
 Changes to Mobile Mini purchase accounting 285,000 ( 233,666 ) — ( 43,173 ) 8,161 
 Effects of movements in foreign exchange rates 221 ( 311 ) ( 502 ) 18 ( 574 ) 
 Balance at December 31, 2021 $ 521,049 $ 492,552 $ 65,098 $ 100,107 $ 1,178,806 

 
 The Company conducted its annual impairment test of goodwill as of October 1, 2021 and determined that there was no impairment of goodwill identified as a result of the annual impairment analysis. Accumulated historical goodwill impairment losses wer e $ 792.8 million and pertain to the NA Modular segment prior to Double Eagle Acquisition Corporation's ("DEAC") acquisition of Williams Scotsman International, Inc. ("WSII") from Algeco Scotsman Global S.à r.l. in 2017. There were no goodwill impairments recorded for the years ended December 31, 2021, 2020 and 2019. 
 Changes to Mobile Mini purchase accounting are largely the result of the finalization of the assignment of goodwill to the reporting units during the measurement period. 
 Intangible Assets 
 Intangible assets other than goodwill at December 31, consisted of the following: 
 
 December 31, 2021 
 (in thousands) Weighted average remaining life (in years) Gross carrying amount Accumulated amortization Net book value 
 Intangible assets subject to amortization: 
 Mobile Mini customer relationships 6.6 $ 209,000 $ ( 38,447 ) $ 170,553 
 Technology 4.5 1,500 ( 375 ) 1,125 
 Indefinite-lived intangible assets: 
 Trade name - Mobile Mini 164,000 — 164,000 
 Trade name - WillScot 125,000 — 125,000 
 Total intangible assets other than goodwill $ 499,500 $ ( 38,822 ) $ 460,678 

 
 December 31, 2020 
 (in thousands) Weighted average remaining life (in years) Gross carrying amount Accumulated amortization Net book value 
 Intangible assets subject to amortization: 
 Trade name - ModSpace 0.7 $ 3,000 $ ( 2,375 ) $ 625 
 Mobile Mini customer relationships 8.0 217,000 ( 12,053 ) 204,947 
 Technology 5.5 1,500 ( 125 ) 1,375 
 Indefinite-lived intangible assets: 
 Trade name - Mobile Mini 164,000 — 164,000 
 Trade name - WillScot 125,000 — 125,000 
 Total intangible assets other than goodwill $ 510,500 $ ( 14,553 ) $ 495,947 

 As discussed further in Note 2, the Company acquired Mobile Mini on July 1, 2020. The Company recorded $ 164.0 million of indefinite-lived intangible assets and $ 210.5 million of intangibles subject to amortization, related to Mobile Mini customer relationships and technology. 
 94 

 
 

 For the years ended December 31, 2021 and 2020, the aggregate amount recorded to depreciation and amortization expense for intangible assets subject to amortization was $ 27.3 million and $ 14.4 million, respectively. 
 As of December 31, 2021, the expected future amortization expense for intangible assets is as follows: 
 
 (in thousands) Amortization Expense 
 2022 $ 26,416 
 2023 26,416 
 2024 26,416 
 2025 26,416 
 2026 26,179 
 Thereafter 39,835 
 Total $ 171,678 

 
 
 
 
 NOTE 9 - Debt 
 The carrying value of debt outstanding at December 31 consisted of the following: 
 
 (in thousands, except rates) Interest rate Year of maturity 2021 2020 
 
 
 2025 Secured Notes 6.125 % 2025 $ 518,117 $ 637,068 
 ABL Facility (a) 
 Varies 2025 1,612,783 1,263,833 
 2028 Secured Notes 4.625 % 2028 492,490 491,555 
 Finance Leases Varies Varies 89,050 77,874 
 Total debt 2,712,440 2,470,330 
 Less: current portion of long-term debt 18,121 16,521 
 Total long-term debt $ 2,694,319 $ 2,453,809 

 (a) As of December 31, 2021 and 2020, the Company had no outstanding principal borrowings on the Multicurrency Facility (defined below) and $ 6.2 million and $ 7.9 million, respectively, of related debt issuance costs. No related debt issuance costs were recorded as a direct offset against the principal borrow ings on the Multicurrency Facility, and the $ 6.2 million and $ 7.9 million i n excess of principal was included in other non-current assets on the consolidated balance sheets as of December 31, 2021 and 2020, respectively. 
 Maturities of debt, including finance leases, during the years subsequent to December 31, 2021 are as follows: 
 
 (in thousands) 
 2022 $ 21,842 
 2023 17,665 
 2024 14,743 
 2025 2,185,851 
 2026 12,839 
 Thereafter 514,202 
 Total $ 2,767,142 

 
 
 95 

 
 

 The Company has de bt issuance costs recorded as offsets against the carrying value of the related debt . These debt costs will be amortized and included as part of interest expense over the remaining contractual terms of those debt instruments for each of the next five years as follows: 
 
 (in thousands) Debt issuance cost amortization 
 2022 $ 14,012 
 2023 $ 14,214 
 2024 $ 14,429 
 2025 $ 7,753 
 2026 $ 1,193 
 Thereafter $ 2,173 

 
 2020 Asset Backed Lending Facility 
 On July 1, 2020, in connection with the completion of the Merger, Williams Scotsman Holdings Corp ("Holdings"), WSII, and certain of its subsidiaries, entered into a new asset-based credit agreement that 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"), available to WSII and certain of its subsidiaries (collectively, the "US Borrowers"), and (ii) a $ 400.0 million senior secured asset-based multicurrency revolving credit facility (the "Multicurrency Facility," together with the US Facility, the "2020 ABL Facility"), available to be drawn in US Dollars, Canadian Dollars, British Pounds Sterling or Euros by the US Borrowers and certain of WSII's wholly-owned subsidiaries organized in Canada and in the UK. 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 an ABL credit agreement entered into by the Company in 2017 (the "2017 ABL Facility") and the asset-backed lending facility assumed in the transaction with Mobile Mini, as well as, to pay fees and expense related to the Merger and the related financing transactions. In connection with the repayment of the 2017 ABL facility, the Company wrote off $ 4.4 million of deferred financing costs to loss on extinguishment of debt. The 2020 ABL Facility matures on July 1, 2025. 
 Borrowings under the 2020 ABL Facility initially bore interest at (i) in the case of US Dollars, at WSII's option, either an adjusted LIBOR rate plus 1.875 % or an alternative base rate plus 0.875 %, (ii) in the case of Canadian Dollars, at WSII's option, either a Canadian BA rate plus 1.875 % or Canadian prime rate plus 0.875 %, and (iii) in the case of Euros and British Pounds Sterling, an adjusted LIBOR rate plus 1.875 %. 
 On December 13, 2021, due to the upcoming transition of LIBOR, the 2020 ABL Facility was amended to adjust the rate for borrowings denominated in Euros from a LIBOR-based rate to the EURIBOR (Euro Interbank Offered Rate) rate plus 1.875 % and to adjust the rate of borrowings denominated in British Pounds Sterling from a LIBOR-based rate to the SONIA (Sterling Overnight Index Average) r ate plus 1.9076 %. 
 On December 16, 2021, the 2020 ABL Facility was amended to permit (i) the merger of WSII with and into Williams Scotsman, Inc. ("WSI") and (ii) WSI to assume the duties and obligations of WSII, the administrative borrower of the 2020 ABL Facility. 
 At December 31, 2021, the weighted average interest rate for borrowings under the 2020 ABL Facility was 1.99 % . T he weighted average interest rate on the balance outstanding at December 31, 2021, as adjusted for the effects of the interest rate swap agreements wa s 2.71 % . Refer to Note 13 for a more detailed discussion on interest rate management. 
 Borrowing availability under the US Facility and the Multicurrency Facility is equal to the lesser of (i) the aggregate Revolver Commitments and (ii) the Borrowing Base ("Line Cap"). At December 31, 2021, the Line Cap was $ 2.4 billion and the Borrowers had $ 743.6 million of available borrowing capacity under the 2020 ABL Facility, including $ 343.6 million under the US ABL Facility and $ 400.0 million under the Multicurrency Facility. Borrowing capacity under the 2020 ABL Facility is made available for up to $ 208.1 million of letters of credit and up to $ 168.5 million of swingline loans. At December 31, 2021, letters of credit and bank guarantees carried fees of 2.0 %. The Company had issued $ 11.9 million of standby letters of credit under the 2020 ABL Facility at December 31, 2021. The 2020 ABL Facility requires the payment of an annual commitment fee on the unused available borrowings of 0.225 % per annum . 
 The Company had $ 1.6 billion outstanding principal under the 2020 ABL Facility at December 31, 2021. Debt issuance costs of $ 31.7 million were included in the carrying value of the 2020 ABL Facility at December 31, 2021. 
 The obligations of the US Borrowers are unconditionally guaranteed by Holdings and each existing and subsequently acquired or organized direct or indirect wholly-owned US organized restricted subsidiary of Holdings, other than excluded subsidiaries (together with Holdings, the "US Guarantors"). The obligations of the Multicurrency Borrowers are unconditionally guaranteed by the US Borrowers and the US Guarantors, and each existing and subsequently acquired or organized direct or indirect wholly-owned Canadian organized restricted subsidiary of Holdings other than certain excluded subsidiaries (together with the US Guarantors, the "ABL Guarantors"). 
 96 

 
 

 2022 Senior Secured Notes 
 In 2017, WSII issued $ 300.0 million aggregate principal amount of 7.875 % senior secured notes due December 15, 2022 (the “2022 Secured Notes”) under an indenture dated November 29, 2017. Interest was payable semi-annually on June 15 and December 15 beginning June 15, 2018. 
 On December 13, 2019, the Company completed a partial redemption of $ 30.0 million of the 2022 Secured Notes at a redemption price of 103 % using proceeds from its 2017 ABL Facility. The Company recorded a loss on extinguishment of debt of $ 1.5 million, which included $ 0.9 million of an early redemption premium and $ 0.6 million related to the write-off of unamortized deferred financing fees. 
 In connection with the Merger and related financing transactions in the third quarter of 2020, using proceeds from the 2025 Secured Notes discussed below, the Company redeemed all of its 2022 Secured Notes and recorded a loss on extinguishment of debt in the consolidated statements of operations of $ 15.2 million comprised of a redemption premium of $ 10.6 million and write off of unamortized deferred financing fees of $ 4.6 million. 
 2023 Senior Secured Notes 
 In 2018, WSII issued $ 300.0 million in aggregate principal amount of 6.875 % senior secured notes due August 15, 2023 (the “2023 Secured Notes”). Interest was payable semi-annually on February 15 and August 15 of each year, beginning February 15, 2019. 
 On May 14, 2019, a tack-on offering of $ 190.0 million in aggregate principal amount to the initial 2023 Secured Notes (the "Tack-On Notes") was completed. The Tack-On Notes were issued as additional securities under the 2023 Secured Notes indenture. The Tack-On Notes had identical terms to the initial 2023 Secured Notes, other than with respect to the issue date and issue price. WSII incurred a total of $ 3.0 million in debt issuance costs in connection with the tack-on offering, which were deferred and were being amortized through the August 15, 2023 maturity date. Subsequent to the Tack-On Notes, the Company had $ 490.0 million of 6.875 % 2023 Secured Notes. On August 11, 2020, using borrowings under the Company's 2020 ABL Facility, 10 % of the outstanding principal amount of the 2023 Secured Notes, $ 49.0 million, at a redemption price of 103 % plus accrued interest and unpaid interest was redeemed. 
 On August 25, 2020, the Company completed a private offering of its 2028 Secured Notes, discussed below, and used the offering proceeds to repay, along with expenses, the $ 441.0 million outstanding principal amount of its 2023 Secured Notes at a redemption price of 103.438 % plus accrued interest and unpaid interest. The Company recorded a loss on extinguishment of debt in the consolidated statements of operations of $ 22.7 million comprised of a redemption premium of $ 16.6 million and a write off of unamortized deferred financing fees of $ 6.1 million. 
 2025 Senior Secured Notes 
 In anticipation of the Merger, on June 15, 2020, Picasso Finance Sub, Inc., a newly-formed indirect finance subsidiary (the "Finance Sub") of the Company completed a private offering of $ 650.0 million in aggregate principal amount of its 6.125 % senior secured notes due 2025 (the "2025 Secured Notes") to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as amended ("Rule 144A"). The 2025 Secured Notes contained provisions requiring repayment, without penalty, in the event the Merger was not consummated. The offering proceeds from the 2025 Secured Notes of $ 650.0 million and $ 5.1 million of interest due through August 1, 2020 were deposited into an escrow account, pending the closing of the Merger. In connection with the completion of the Merger, on July 1, 2020, the offering proceeds were released and the proceeds were used to repay the 2022 Secured Notes, repay Mobile Mini senior notes assumed in the acquisition and pay certain fees and expenses related to the Merger and the related financing transactions. In addition, Finance Sub was merged into WSII on July 1, 2020. The Company recorded $ 14.3 million in deferred financing fees related to the 2025 Secured Notes. 
 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. Unamortized deferred financing costs pertaining to the 2025 Secured Notes were $ 8.4 million as of December 31, 2021. 
 The Company may redeem the 2025 Secured Notes at any time before June 15, 2022 at a redemption price equal to 100 % of the principal amount thereof, plus a customary make whole premium for the 2025 Secured Notes being redeemed, plus accrued and unpaid interest, if any, to but not including the redemption date. Before June 15, 2022, the Company may redeem up to 40 % of the aggregate principal amount of the 2025 Secured Notes at a price equal to 106.125 % of the principal amount of the 2025 Secured Notes being redeemed, plus accrued and unpaid interest, if any, to but not including the redemption date with the net proceeds of certain equity offerings. At any time prior to June 15, 2022, the Company may also redeem up to 10 % of the aggregate principal amount of the 2025 Secured Notes at a redemption price equal to 103 % of the principal amount of the 2025 Secured Notes being redeemed during each twelve-month period commencing with the issue date, plus accrued and unpaid interest, if any, to but not including the redemption date. If the Company undergoes a change of control or sells certain of its assets, the Company may be required to offer to repurchase the 2025 Secured Notes. 
 On March 26, 2021, using cash on hand and borrowings on the 2020 ABL Facility, the Company redeemed 10 % of the outstanding principal, or $ 65.0 million, of its 2025 Secured Notes and 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 in the first quarter of 2021. 
 On June 16, 2021, using cash on hand and borrowings on the 2020 ABL Facility, the Company redeemed 10 % of the outstanding principal, or $ 58.5 million, of its 2025 Secured Notes and recorded a loss on extinguishment of debt in the 
 97 

 
 

 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 in the second quarter of 2021. 
 On and after June 15, 2022, the Company may redeem the 2025 Secured Notes, in whole or in part, at the redemption prices expressed as percentages of principal amount set forth below plus accrued and unpaid interest to but not including the applicable redemption date, subject to the holders' right to receive interest due on an interest payment date falling on or prior to the redemption date, if redeemed during the twelve-month period beginning on June 15 of each of the years set forth below. 
 
 Year Redemption Price 
 2022 103.063 % 
 2023 101.531 % 
 2024 and thereafter 100.000 % 

 
 
 The 2025 Secured Notes are unconditionally guaranteed by each of WSII's direct and indirect domestic subsidiaries and WSII's parent, Holdings (collectively, "the Note Guarantors"). WillScot Mobile Mini is not a guarantor of the 2025 Secured Notes. The Note Guarantors, as well as certain of the Company’s non-US subsidiaries, are guarantors or borrowers under the 2020 ABL Facility. To the extent lenders under the 2020 ABL Facility release the guarantee of any Note Guarantor, such Note Guarantor will also be released from obligations under the 2025 Secured Notes. These guarantees are secured by a second priority security interest in substantially all of the assets of WSII and the Note Guarantors, subject to customary exclusions. The guarantees of the 2025 Secured Notes by WillScot Equipment II, LLC, a Delaware limited liability company which holds certain of WSII’s assets in the US, will be subordinated to its obligations under the 2020 ABL Facility. On December 23, 2021, in connection with the merger of WSII with and into WSI, WSI entered into the 2025 Notes Supplemental Indenture, pursuant to which WSI assumed all of WSII's obligations and rights related to the 2025 Secured Notes. 
 2028 Senior Secured Notes 
 On August 25, 2020, the Company completed a private offering of $ 500.0 million in aggregate principal amount of 4.625 % senior secured notes due 2028 (the "2028 Secur ed Notes") to qualified institutional buyers pursuant to Rule 144A . The 2028 Secured Notes mature on August 15, 2028. They 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 15, 2021. Unamortized deferred financing costs pertaining to the 2028 Secured Notes were $ 7.5 million as of December 31, 2021. 
 The Company may redeem the 2028 Secured Notes at any time before August 15, 2023 at a redemption price equal to 100 % of the principal amount thereof, plus a customary make whole premium for the 2028 Secured Notes being redeemed, plus accrued and unpaid interest, if any, to but not including the redemption date. Before August 15, 2023, the Company may redeem up to 40 % of the aggregate principal amount of the 2028 Secured Notes at a price equal to 104.625 % of the principal amount of the 2028 Secured Notes being redeemed, plus accrued and unpaid interest, if any, to but not including the redemption date with the net proceeds of certain equity offerings. At any time prior to August 15, 2023, the Company may also redeem up to 10 % of the aggregate principal amount at a redemption price equal to 103 % of the principal amount of the 2028 Secured Notes being redeemed during each twelve-month period commencing with the issue date, plus accrued and unpaid interest, if any, to but not including the redemption date. If the Company undergoes a change of control or sells certain of its assets, the Company may be required to offer to repurchase the 2028 Secured Notes. 
 On and after August 15, 2023, the Company may redeem the 2028 Secured Notes, in whole or in part, at the redemption prices expressed as percentages of principal amount set forth below plus accrued and unpaid interest to but not including the applicable redemption date, subject to the holders' right to receive interest due on an interest payment date falling on or prior to the redemption date, if redeemed during the twelve-month period beginning on August 15 of each of the years set forth below. 
 
 Year Redemption Price 
 2023 102.313 % 
 2024 101.156 % 
 2025 and thereafter 100.000 % 

 The 2028 Secured Notes are unconditionally guaranteed by the Note Guarantors. WillScot Mobile Mini is not a guarantor of the 2028 Secured Notes. The Note Guarantors, as well as certain of the Company’s non-US subsidiaries, are guarantors or borrowers under the 2020 ABL Facility. To the extent lenders under the 2020 ABL Facility release the guarantee of any Note Guarantor, such Note Guarantor will also be released from obligations under the 2025 Secured Notes. These guarantees are secured by a second priority security interest in substantially all of the assets of WSII and the Note Guarantors, subject to customary exclusions. The guarantees of the 2028 Secured Notes by WillScot Equipment II, LLC, a Delaware limited liability company which holds certain of WSII’s assets in the US, will be subordinated to its obligations under the 2020 ABL Facility. On December 23, 2021, in connection with the merger of WSII with and into WSI, WSI entered into the 2028 
 98 

 
 

 Notes Supplemental Indenture, pursuant to which WSI assumed all of WSII's obligations and rights related to the 2028 Secured Notes. 
 2023 Senior Unsecured Notes 
 The Company had $ 200.0 million in aggregate principal amount of senior unsecured notes due November 15, 2023. On June 19, 2019 (the "Redemption Date"), WSII used proceeds from its US ABL Facility to redeem all $ 200.0 million in aggregate outstanding principal amount of the unsecured notes at a redemption price of 102.0 %, plus a make-whole premium of 1.126 % and any accrued and unpaid interest to, but not including, the Redemption Date. The Company recorded a loss on extinguishment of $ 7.2 million, which included $ 6.2 million of make-whole premiums and $ 1.0 million related to the write-off of unamortized deferred financing fees. 
 Finance Leases 
 The Company maintains finance leases primarily related to transportation equipment. At December 31, 2021 and December 31, 2020, obligations under the finance leases for certain real property and transportation related equipment were $ 89.1 million and $ 77.9 million, respectively. 
 The Company is in compliance with all debt covenants and restrictions for the aforementioned debt instruments for the year ended December 31, 2021. 
 Mobile Mini Debt 
 Mobile Mini had $ 250.0 million in aggregate principal amount of 5.875 % senior notes outstanding prior to the Merger. In connection with the Merger, these notes were assumed by WillScot Mobile Mini and subsequently redeemed using proceeds from the 2025 Secured Notes discussed above. 
 Mobile Mini had a $ 1.0 billion first lien senior secured revolving credit facility. At June 30, 2020, Mobile Mini had $ 563.2 million of outstanding principal on the credit facility. In connection with the Merger, this line of credit was assumed by WillScot Mobile Mini and subsequently repaid in full using proceeds from the 2020 ABL Facility discussed above. 
 
 
 
 NOTE 10 - Equity 
 Preferred Stock 
 WillScot Mobile Mini's 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, the Company has zero shares of Preferred Stock issued and outstanding. 
 Common Stock 
 WillScot Mobile Mini's 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 has 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. 
 On June 30, 2020, as contemplated by the Merger Agreement, Sapphire Holdings exchanged each of its shares of common stock of Holdings for 1.3261 shares of newly issued WillScot Class A Common Stock (the "Sapphire Exchange"). As a result of the Sapphire Exchange, all issued and outstanding shares of WillScot's Class B Common Stock, par value $ 0.0001 per share, were automatically canceled for no consideration and the existing exchange agreement was automatically terminated. As a result of the Sapphire Exchange, Sapphire Holdings became a wholly-owned subsidiary of WillScot. Sapphire Holdings received 10,641,182 shares of Common Stock of WillScot in the Sapphire Exchange. Prior to the Sapphire Exchange, Sapphire Holdings' ownership of Holdings was recorded as a non-controlling interest in the consolidated financial statements. Subsequent to the Sapphire Exchange, the Company's subsidiaries are each wholly owned and there is no non-controlling interest. As a result of the Sapphire Exchange, non-controlling interest of $ 63.9 million was reclassified to $ 66.9 million of additional paid-in-capital and $ 3.0 million to accumulated other comprehensive loss, on the consolidated balance sheet. 
 In connection with the Merger on July 1, 2020, the Company issued 106,426,722 shares of Class A Common Stock in exchange for Mobile Mini Common Stock outstanding and subsequently filed an amended and restated certificate of incorporation, which reclassified all outstanding shares of the Class A Common Stock and converted such shares into shares of Common Stock, par value of $ 0.0001 per share, of WillScot Mobile Mini. 
 In connection with the Sapphire Exchange described above, stock compensation vesting and stock option exercises described in Note 16, and the warrant exercises described below, the Company issued 6,752,647 and 13,792,582 shares of Common Stock during the years ended December 31, 2021 and 2020, respectively. 
 Stock Repurchase Program 
 On August 7, 2020, the Company's Board of Directors approved a stock repurchase program that authorizes the Company to repurchase up to $ 250 million of its outstanding shares of Common Stock and equivalents. On April 29, 2021, the Board of Directors approved an increase in repurchase authority to $ 500 million. Subsequently, in October of 2021, the Company's Board of Directors replaced the existing share repurchase program with a new share repurchase program that 
 99 

 
 

 authorizes the Company to repurchase up to $ 1.0 billion of its outstanding shares of Common Stock and equivalents. The stock repurchase program does not obligate the Company to purchase any particular number of shares, and the timing and exact amount of any repurchases will depend on various factors, including market pricing, business, legal, accounting, and other considerations. The Company may repurchase its shares in open market transactions or through privately negotiated transactions in accordance with federal securities laws, at the Company's discretion. The repurchase program, which has no expiration date, may be increased, suspended, or terminated at any time. The program is expected to be implemented over the course of several years and will be conducted subject to the covenants in the agreements governing indebtedness. 
 During the year ended December 31, 2021, the Company repurchased 12,878,490 shares of Common Stock and stock equivalents for $ 365.9 million. During the year ended December 31, 2020, no shares of Common Stock were repurchased, and 1,728,177 shares of stock equivalents were repurchased for $ 35.3 million. As of December 31, 2021, $ 956.7 million of the approved repurchase pool remained available. 
 Accumulated Other Comprehen sive Loss 
 The changes in accumulated other comprehensive loss ("AOCI"), net of tax, for the years ended December 31, 2021, 2020 and 2019, were as follows: 
 
 (in thousands) Foreign Currency Translation Unrealized losses on hedging activities Total 
 Balance at December 31, 2018 $ ( 62,608 ) $ ( 5,418 ) $ ( 68,026 ) 
 Other comprehensive income (loss) before reclassifications 10,586 ( 7,930 ) 2,656 
 Reclassifications from AOCI to income (a) 
 — 3,121 3,121 
 Less other comprehensive (loss) income attributable to non-controlling interest ( 960 ) 434 ( 526 ) 
 Balance at December 31, 2019 ( 52,982 ) ( 9,793 ) ( 62,775 ) 
 Other comprehensive income (loss) before reclassifications 28,404 ( 11,874 ) 16,530 
 Reclassifications from AOCI to income (a) 
 — 10,125 10,125 
 Less other comprehensive income attributable to non-controlling interest 1,183 702 1,885 
 Impact of elimination of non-controlling interest on accumulated other comprehensive income ( 1,299 ) ( 1,673 ) ( 2,972 ) 
 Balance at December 31, 2020 ( 24,694 ) ( 12,513 ) ( 37,207 ) 
 Other comprehensive loss before reclassifications ( 880 ) ( 2,985 ) ( 3,865 ) 
 Reclassifications from AOCI to income (a) 
 — 12,001 12,001 
 Balance at December 31, 2021 $ ( 25,574 ) $ ( 3,497 ) $ ( 29,071 ) 

 (a) For the years ended December 31, 2021, 2020 and 2019, $ 12.0 million, $ 10.1 million and $ 3.3 million, respectively, was reclassified from AOCI into the consolidated statements of operations within interest expe nse related to the interest rate swaps discussed in Note 13. For the years ended December 31, 2021, 2020 and 2019 , the Company recorded tax bene fits of $ 3.0 million, $ 2.4 million and $ 0.8 million, respectively, associated with this reclassification. 
 
 
 
 NOTE 11 - Warrants 
 Warrants 
 2015 Public Warrants 
 WillScot was incorporated under the name DEAC on June 26, 2015. On November 29, 2017, DEAC acquired WSII from Algeco Scotsman Global S.à r.l., which was majority owned by an investment fund managed by TDR Capital. DEAC domesticated to Delaware and changed its name to WillScot Corporation. 
 As part of its initial public offering, the Company issued warrants (the “2015 Public Warrants”). Each 2015 Public Warrant entitled the holder to purchase one-half of one share of WillScot Class A Common Stock at a price of $ 5.75 per half share (or $ 11.50 per whole share), subject to adjustment. The Company was able to redeem the 2015 Public Warrants for $ 0.01 per warrant if the closing price of WillScot’s Class A shares equaled or exceeded $ 18.00 per share for any 20 trading days within a 30 -trading day period ending on the third trading day prior to the date the Company sent a notice of redemption to the warrant holders, providing for a 30 -day notice period. 
 100 

 
 

 The Company's share price performance target was achieved on January 21, 2020 and, on January 24, 2020, the Company delivered a notice (the "Redemption Notice") to redeem all of its 2015 Public Warrants that remained unexercised on February 24, 2020. As further described in the Redemption Notice and permitted under the warrant agreement, holders of these warrants who exercised them following the date of the Redemption Notice were required to do so on a cashless basis. From January 1, 2020 through January 24, 2020, 796,610 warrants were exercised for cash, resulting in the Company receiving cash proceeds of $ 4.6 million and the Company issuing 398,305 shares of the Company's Class A Common Stock. After January 24, 2020 through February 24, 2020, 5,836,048 warrants were exercised on a cashless basis. An aggregate of 1,097,162 shares of the Company's Class A Common Stock was issued in connection with these cashless exercises. On February 24, 2020, the Company completed the redemption of 38,509 remaining warrants under the Redemption Notice for $ 0.01 per warrant. At December 31, 2021, no 2015 Public Warrants were outstanding. 
 2015 Private Warrants 
 DEAC also issued warrants to purchase its Common Stock in a private placement concurrently with its initial public offering (the “2015 Private Warrants,” and together with the 2015 Public Warrants, the "2015 Warrants"). The 2015 Private Warrants were purchased at a price of $ 0.50 per unit for an aggregate purchase price of $ 9.75 million. The 2015 Private Warrants were identical to the 2015 Public Warrants, except that, if held by certain original investors (or their permitted assignees), the 2015 Private Warrants could be exercised on a cashless basis and were not subject to redemption. 
 During the year ended December 31, 2020, 4,781,700 of the 2015 Private Warrants were repurchased for $ 21.6 million and cancelled. Additionally, 70,000 of the 2015 Private Warrants were exercised, resulting in the Company receiving cash proceeds of $ 0.4 million and issuing 35,000 shares of Common Stock. During the year ended December 31, 2021, 3,055,000 of the 2015 Private Warrants were repurchased for $ 25.5 million and cancelled. In addition, during the year ended December 31, 2021, 9,655,000 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, at December 31, 2021 no 2015 Private Warrants were outstanding. 
 2018 Warrants 
 In connection with the ModSpace acquisition in 2018, WillScot issued warrants to purchase approximately 10.0 million shares of WillScot Class A Common Stock (the "2018 Warrants") to former shareholders of ModSpace. Each 2018 Warrant entitles the holder thereof to purchase one share of WillScot Class A Common Stock at an exercise price of $ 15.50 per share, subject to potential adjustment. The 2018 Warrants expire on November 29, 2022. 
 During the year ended December 31, 2020, 195,410 of the 2018 warrants were exercised, on a cashless basis, and 38,802 shares of the Company's Common Stock were issued. Also, during the year ended December 31, 2020, the Company repurchased and subsequently cancelled 51,865 of the 2018 warrants for approximately $ 0.3 million. 
 During the year ended December 31, 2021, 254,373 of the 2018 Warrants were repurchased for $ 2.9 million and cancelled. 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. 
 The Company accounted for its warrants in the following ways: (i) the 2015 Public Warrants as liabilities through their final redemption in February 2020, (ii) the 2015 Private Warrants as liabilities through their final repurchase or exercise in May 2021, and (iii) the 2018 Warrants as liabilities until June 30, 2020, the date all issued and outstanding shares of the Company's Class B Common Stock were cancelled. Subsequent to June 30, 2020, the 2018 Warrants were equity classified. 
 The Company determined the following fair values for outstanding warrants recorded as liabilities at December 31: 
 
 (in thousands) 
 December 31, 2021 December 31, 2020 
 2015 Private Warrants N/A $ 77,404 

 
 
 101 

 
 
 

 NOTE 12 – Income Taxes 
 The components of income tax expense (benefit) for the years ended December 31, 2021, 2020 and 2019 are comprised of the following: 
 
 (in thousands) 2021 2020 2019 
 Current 
 Federal $ — $ — $ — 
 State 4,645 1,601 827 
 Foreign 8,338 2,104 ( 395 ) 
 Deferred 
 Federal 31,255 ( 52,822 ) 242 
 State ( 4,144 ) ( 5,204 ) 1,662 
 Foreign 9,452 2,870 ( 4,527 ) 
 Total income tax expense (benefit) $ 49,546 $ ( 51,451 ) $ ( 2,191 ) 

 Income tax results differed from the amount computed by applying the US statutory income tax rate of 21% to the income (loss) before income taxes for the following reasons for the years ended December 31, 2021 , 2020 and 2019: 
 
 (in thousands) 2021 2020 2019 
 Income (loss) before income tax 
 US $ 161,040 $ 6,597 $ ( 119,099 ) 
 Foreign 48,650 17,292 ( 4,257 ) 
 Total income (loss) before income tax $ 209,690 $ 23,889 $ ( 123,356 ) 
 
 US Federal statutory income tax expense (benefit) $ 44,035 $ 5,017 $ ( 25,905 ) 
 Effect of tax rates in foreign jurisdictions 40 128 ( 207 ) 
 State income tax expense, net of federal benefit 2,602 3,962 1,829 
 
 Valuation allowances ( 3,089 ) ( 56,479 ) 961 
 (Non-taxable) non-deductible items ( 269 ) 187 ( 233 ) 
 Non-deductible executive compensation 2,309 1,449 490 
 Non-deductible transaction costs 33 4,425 ( 12 ) 
 Non-deductible (non-taxable) remeasurement of common stock warrant liabilities 5,585 ( 727 ) 23,021 
 Uncertain tax positions ( 11,748 ) ( 11,166 ) — 
 Tax law changes (excluding valuation allowance) (a) 8,410 2,523 ( 2,785 ) 
 Other 1,638 ( 770 ) 650 
 Reported income tax expense (benefit) $ 49,546 $ ( 51,451 ) $ ( 2,191 ) 
 Effective income tax rate 23.63 % ( 215.38 ) % 1.78 % 

 
 (a) Tax law changes primarily represents changes in tax law in foreign jurisdictions. 
 

 
 
 102 

 
 

 Deferred Income Taxes 
 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases, as well as from net operating loss and carryforwards. Significant components of the Company’s deferred tax assets and liabilities are as follows: 
 
 (in thousands) 2021 2020 
 Deferred tax assets 
 Deferred interest expense $ 116,339 $ 128,346 
 Employee benefit plans 4,167 3,532 
 Accrued liabilities 9,362 10,692 
 Deferred revenue 37,852 32,412 
 Operating lease liability 62,502 58,044 
 Other 18,315 13,628 
 Tax loss carryforwards 286,470 295,326 
 Deferred tax assets, gross 535,007 541,980 
 Valuation allowance ( 10,323 ) ( 25,158 ) 
 Net deferred income tax asset $ 524,684 $ 516,822 
 
 Deferred tax liabilities 
 Rental equipment and other property, plant and equipment $ ( 710,372 ) $ ( 648,966 ) 
 Intangible assets ( 107,033 ) ( 117,403 ) 
 ROU asset ( 62,158 ) ( 57,820 ) 
 Deferred tax liability ( 879,563 ) ( 824,189 ) 
 Net deferred income tax liability $ ( 354,879 ) $ ( 307,367 ) 

 
 In general, FASB ASC Topic 740, “Income Taxes” (“ASC 740”) requires us to evaluate the realizability of our deferred tax assets and reduce the deferred tax assets by valuation allowances to the extent we determine some or all of our deferred tax assets are not more likely than not realizable. To determine the realizability, ASC 740 requires consideration of sources of available taxable income of the proper character and within the time period before which our deferred tax assets, if any, expire due to the passage of time. 
 The Company's valuation allowance decreased by $ 14.8 million from 2020. An increase of $ 0.1 million was recorded in purchase accounting for the Merger in relation to state net operating losses deemed not more likely than not to be realized and a decrease of $ 14.7 million is primarily related to unused capital losse s with a corresponding reduction of the related deferred tax asset of $ 12.3 million. The net tax benefit of $ 2.2 million is reflected in the rate reconciliation table above under valuation allowances. 
 Tax loss carryforwards as of December 31, 2021 are outlined in the table below and include US Federal, US State and foreign (Canada and Mexico). The availability of these tax losses to offset future income varies by jurisdiction. Furthermore, the ability to utilize the tax losses may be subject to additional limitations upon the occurrence of certain events, such as a change in the ownership of the Company. Some of the Company’s tax attributes are subject to annual limitations due to historical changes in ownership from acquisitions, mergers or other related ownership shift events; however, the Company anticipates that our remaining available net operating losses will be consumed prior to their expiration. 
 The Company’s tax loss carryforwards are as follows at December 31, 2021: 
 
 (in thousands) Loss
Carryforward Deferred Tax Expiration 
 Jurisdiction: 
 US - Federal $ 1,232,717 $ 250,920 2022 – 2037, Indefinite 
 US - State 632,922 34,332 2022 –2041, Indefinite 
 Foreign - Canada and Mexico 3,892 1,218 2026 – 2037 
 Total $ 1,869,531 $ 286,470 

 As of December 31, 2021, the total amount of the basis difference in investments outside the US, which are indefinitely reinvested and for which deferred taxes have not been provided, is approximately $ 357.9 million. The tax, if any, associated with the recovery of the basis difference is dependent on the manner in which it is recovered and is not readily determinable. 
 103 

 
 

 Unrecognized Tax Positions 
 The Company is subject to taxation in US, Canada, Mexico, UK, and state jurisdictions. The Company’s tax returns are subject to examination by the applicable tax authorities prior to the expiration of statute of limitations for assessing additional taxes, which generally ranges from two to five years after the end of the applicable tax year. As of December 31, 2021, generally, tax years for 2014 through 2021 remain subject to examination by the tax authorities. In addition, in certain taxing jurisdictions, in the case of carryover tax attributes to years open for assessment, such attributes may be subject to reduction by taxing authorities. 
 A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: 
 
 (in thousands) 2021 2020 2019 
 Unrecognized tax benefits – January 1, $ 54,494 $ 63,747 $ 64,444 
 Increases based on tax positions related to current period — 1,211 — 
 Increases based on tax positions related to prior period 9 — 268 
 Decreases based on tax positions related to prior period — — ( 287 ) 
 Decrease from expiration of statute of limitations ( 10,189 ) ( 10,464 ) ( 678 ) 
 Unrecognized tax benefits – December 31, $ 44,314 $ 54,494 $ 63,747 

 At December 31, 2021, 2020 and 2019, respectively, there were $ 43.3 million, $ 53.2 million and $ 59.3 million of unrecognized tax benefits that, if recognized, would affect the annual effective tax rate. 
 The Company classifies interest on tax deficiencies and income tax penalties within income tax expense. During the years ended December 31, 2021, 2020 and 2019, the Company recognized approximately $( 1.0 ) million, $( 0.9 ) million, and $ 0.8 million in interest and penalties, respectively. The Company accrued approximately $ 0.6 million and $ 1.5 million for the payment of interest and penalties at December 31, 2021 and 2020, respectively. 
 Future tax settlements or statute of limitation expirations could result in a change to the Company’s uncertain tax positions. The Company believes that it is reasonably possible that approximately $ 0.9 million of unrecognized tax benefits, as of December 31, 2021, could decrease in the next twelve months as a result of the expiration of statutes of limitation, audit settlements or resolution of tax uncertainties. 
 
 
 
 NOTE 13 - Derivatives 
 On November 6, 2018, the Company entered into an interest rate swap agreement (the “Swap Agreement”) with a financial counterparty that effectively converts $ 400.0 million in aggregate notional amount of variable-rate debt under the Company’s ABL Facility into fixed-rate debt. The Swap Agreement will terminate on May 29, 2022. Under the terms of the Swap Agreement, the Company receives a floating rate equal to one-month LIBOR and makes payments based on a fixed rate of 3.06 % on the notional amount. The receive rate under the terms of the Swap Agreement was 0.11 % and 0.15 % at December 31, 2021 and 2020, respectively. 
 The Swap Agreement was designated and qualified as a hedge of the Company’s exposure to changes in interest payment cash flows created by fluctuations in variable interest rates on the ABL Facility. 
 The location and the fair value of derivative instruments designated as hedges in the consolidated balance sheets as of December 31 was as follows: 
 
 (in thousands) Balance Sheet Location 2021 2020 
 Cash Flow Hedges: 
 Interest rate swap Accrued liabilities $ 5,259 $ 11,619 
 Interest rate swap Other non-current liabilities $ — $ 5,308 

 
 
 The fair value of the interest rate swap is based on dealer quotes of market forward rates, a Level 2 input on the fair value hierarchy, and reflects the amount that the Company would receive or pay as of December 31, 2021 for contracts involving the same attributes and maturity dates. 
 The following table discloses the impact of the interest rate swap, excluding the impact of income taxes, on other comprehensive income (“OCI”), AOCI and the Company’s statement of operations for the years ended December 31: 
 
 (in thousands) 2021 2020 2019 
 Gain (loss) recognized in OCI $ 11,677 $ ( 2,288 ) $ ( 6,280 ) 
 Location of loss recognized in income Interest expense, net Interest expense, net Interest expense, net 
 Loss reclassified from AOCI into income (effective portion) $ ( 12,001 ) $ ( 10,125 ) $ ( 3,254 ) 

 104 

 
 

 
 
 
 NOTE 14 - Fair Value Measures 
 The fair value of financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. 
 The Company utilizes the suggested accounting guidance for the three levels of inputs that may be used to measure fair value: 
 
 Level 1 - Observable inputs such as quoted prices in active markets for identical assets or liabilities; 
 Level 2 - Observable inputs, other than Level 1 inputs in active markets, that are observable either directly or indirectly; and 
 Level 3 - Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions 

 The Company has assessed that the fair value of cash and short-term deposits, trade receivables, trade payables, capital lease and other financing obligations, and other current liabilities approximate their carrying amounts. 
 The following table shows the carrying amounts and fair values of financial assets and liabilities, including their levels in the fair value hierarchy: 
 
 December 31, 2021 December 31, 2020 
 Carrying Amount Fair Value Carrying Amount Fair Value 
 (in thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 
 US ABL Facility (a) 
 $ 1,612,783 $ — $ 1,644,500 $ — $ 1,263,833 $ — $ 1,304,612 $ — 
 
 
 
 2025 Secured Notes (a) 
 518,117 — 551,835 — 637,068 — 694,876 — 
 2028 Secured Notes (a) 
 492,490 — 515,635 — 491,555 — 518,820 — 
 Total $ 2,623,390 $ — $ 2,711,970 $ — $ 2,392,456 $ — $ 2,518,308 $ — 

 (a) The carrying values of the US ABL Facility, the 2025 Secured Notes, and the 2028 Secured Notes included $ 31.7 million, $ 8.4 million, and $ 7.5 million of unamortized debt issuance costs as of December 31, 2021, which were presented as a direct reduction of the corresponding liability. As of December 31, 2020, t he carrying values of the US ABL Facility, the 2025 Secured Notes, and the 2028 Secured Notes included $ 40.8 million, $ 12.9 million, and $ 8.4 million of unamortized debt issuance which were presented as a direct reduction of the corresponding liability. 
 There were no transfers of financial instruments between the three levels of the fair value hierarchy during the years ended December 31, 2021 a nd 2020. The carrying value of the ABL Facility, excluding debt issuance costs, approximates fair value as the interest rates are variable and reflective of market rates. The fair value of the 2025 Secured Notes and the 2028 Secured Notes is based on their last trading price at the end of each period obtained from a third party. The loca tion and the fair value of derivative assets and liabilities designated as hedges in the consolidated balance sheet are disclosed in Note 13. 
 As part of the Merger, on July 2, 2020, the Company 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 set by the Merger Agreement. The fair value of these options was valued at $ 19.3 million and is part of the purchase consideration. The value of the Mobile Mini stock options converted to WillScot Mobile Mini stock options in connection with the Merger, was determined utilizing the Black-Scholes option-pricing model and is affected by several variables, the most significant of which are the expected life of the equity award, the exercise price of the stock option as compared to the fair market value of the Common Stock on the Merger date, and the estimated volatility of the Common Stock over the term of the equity award. The volatility assumption 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. The risk-free interest rate is based on the US Treasury yield curve in effect at the time of the Merger. The key inputs utilized to determine the fair value of the stock options converted included within the purchase price were expected volatility of 51.92 %, risk free rate of interest 0.17 %, dividend yield of zero and expected life of 2 years. 
 Prior to their redemption, the Company's 2015 Public Warrants traded in active markets. When classified as liabilities, warrants traded in active markets with sufficient trading volume represent Level 1 financial instruments as they were publicly traded in active markets and thus had observable market prices which were used to estimate the fair value adjustments for the related common stock warrant liabilities. When classified as liabilities, warrants not traded in active markets, or traded with insufficient volume, represent Level 3 financial instruments that are valued using a Black-Scholes option-pricing model to estimate the fair value adjustments for the related common stock warrant liabilities. 
 105 

 
 

 The following table shows the carrying amounts and fair values of financial liabilities for which are measured at fair value: 
 
 December 31, 2021 December 31, 2020 
 Carrying Amount Fair Value Carrying Amount Fair Value 
 (in thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 
 2015 Private Warrants N/A N/A N/A N/A $ 77,404 $ — $ — $ 77,404 

 Level 3 Disclosures 
 When the 2015 Private Warrants and 2018 Warrants were classified as liabilities, the Company utilized a Black Scholes option-pricing model to value the warrants at each reporting period and transaction date, with changes in fair value recognized in the statements of operations. The estimated fair value of the common stock warrant liability was determined using Level 3 inputs. Inherent in the pricing model were assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The volatility assumption was based on a blend of peer group volatility and Company trading history that matched the expected remaining life of the warrants as the Company did not have a sufficient trading history as a stand-alone public company to rely exclusively on its own trading history. The risk-free interest rate was based on the US Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants was assumed to be equivalent to their remaining contractual term. The dividend rate was based on the historical rate, which the Company anticipated to remain at zero. 
 The 2018 Warrants were reclassified to equity at June 30, 2020, the date all issued and outstanding shares of the Company's Class B Common Stock were cancelled. 
 The following table provides quantitative information regarding Level 3 fair value measurements: 
 
 December 31, 2020 
 (in thousands) 2015 Private Warrants 
 Stock Price $ 23.17 
 Strike Price $ 11.50 
 Expected Life 1.91 
 Volatility 41.2 % 
 Risk Free rate 0.13 % 
 Dividend yield — 
 Fair value of warrants $ 12.17 

 The following table presents changes in Level 3 liabilities measured at fair value for the year ended December 31, 2021: 
 
 (in thousands) 2015 Private Warrants 
 Balance - beginning of year $ 77,404 
 Exercise or conversion ( 78,495 ) 
 Measurement adjustment 25,486 
 Repurchases ( 24,395 ) 
 Balance - end of year $ — 

 The following table presents changes in Level 3 liabilities measured at fair value for the year ended December 31, 2020: 
 
 (in thousands) 2015 Private Warrants 2018 Warrants 
 Balance- beginning of year $ 72,705 $ 58,369 
 Exercise or conversion ( 359 ) ( 416 ) 
 Repurchase ( 24,970 ) — 
 Measurement adjustment 30,028 ( 31,737 ) 
 Reclassification to equity at June 30, 2020 — ( 26,216 ) 
 Balance- end of year $ 77,404 $ — 

 
 
 106 

 
 
 

 NOTE 15 - Restructuring 
 Restructuring costs include charges associated with exit or disposal activities that meet the definition of restructuring under FASB ASC Topic 420, Exit or Disposal Cost Obligations (“ASC 420”). The Company's restructuring plans are generally country or region specific and are typically completed within a one-year period. Restructuring costs incurred under these plans include (i) one-time termination benefits related to employee separations, (ii) contract termination costs, and (iii) other non-lease related costs associated with exit or disposal activities. Lease exit costs related to the termination of leases for duplicative branches and corporate facilities are recorded in operating lease liabilities and are not part of the restructuring liabilities. 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. 
 The Company incurred costs associated with restructuring plans designed to streamline operations and reduce costs of $ 11.9 million , $ 6.5 million, and $ 3.8 million net of reversals, during the years ended December 31, 2021 , 2020 and 2019, respectively. The following is a summary of the activity in the Company’s restructuring accruals for years ended December 31: 
 
 (in thousands) Year Ended December 31, 
 2021 2020 2019 
 Employee Costs Total Employee Costs Facility Exit Costs Total Employee Costs Facility Exit Costs Total 
 Beginning balance $ 1,750 $ 1,750 $ 447 $ — $ 447 $ 4,544 $ 972 $ 5,516 
 Reclassification of liability to operating lease asset at the adoption of ASC 842 (a) 
 — — — — — — ( 972 ) ( 972 ) 
 Charges 11,868 11,868 6,510 17 6,527 1,955 1,800 3,755 
 Cash payments ( 5,943 ) ( 5,943 ) ( 5,356 ) — ( 5,356 ) ( 5,694 ) — ( 5,694 ) 
 Foreign currency translation — — 30 — 30 ( 136 ) — ( 136 ) 
 Non-cash movements ( 7,200 ) ( 7,200 ) 119 ( 17 ) 102 ( 222 ) ( 1,800 ) ( 2,022 ) 
 Ending balance $ 475 $ 475 $ 1,750 $ — $ 1,750 $ 447 $ — $ 447 

 (a) As a result of the adoption of ASC 842, the January 1, 2019 restructuring liability attributable to “cease-use” locations was reclassified to operating lease assets and 2019 costs related to the termination of leases for duplicative branches and corporate facilities are now recorded in lease impairment charges and other related costs. 
 The restructuring charges for the year ended December 31, 2021 are driven by employee termination costs as a result of the elimination of positions due to the Merger. Th e restructuring charges for the year ended December 31, 2020, are driven by termination costs as a result of elimination of positions due to the Merger and reductions in force as a result of COVID-19. The restructuring charges in 2019 relate to the Company initiating certain restructuring plans associated with previous acquisitions in order to capture operating synergies as a result of integrating the acquirees into WillScot. The restructuring activities primarily include the termination of employees in connection with the consolidation of overlapping facilities and functions within our existing business. 
 The restructuring non-cash movements for the year ended December 31, 2021 primarily represent stock compensation costs recognized as a result of the modification of certain equity awards associated with the Transition, Separation and Release Agreement entered into on February 25, 2021 with the Company's former President and Chief Operating Officer. 
 Segments (as defined in Note 18) 
 The $ 11.9 million of restructuring charges for the year ended December 31, 2021 included: $ 1.4 million of charges pertaining to the NA Modular segment; $ 3.3 million of charges related to the NA Storage segment; and $ 7.2 million of unallocated charges. 
 The $ 6.5 million of restructuring charges for the year ended December 31, 2020 included: $ 2.1 million of charges pertaining to the NA Modular Segment; $ 4.0 million of charges related to the NA Storage Segment; and $ 0.4 million of charges related to the UK Storage Segment. 
 The $ 3.8 million of restructuring charges for the year ended December 31, 2019 included charges pertaining to the NA Modular segment. 
 
 
 107 

 
 
 

 NOTE 16 - Stock-Based Compensation 
 Restricted Stock Awards 
 The following table summarizes the Company's RSA activity during the years ended December 31, 2021, 2020 and 2019 : 
 Number of Shares Weighted-Average Grant Date Fair Value 
 Balance, December 31, 2018 72,053 $ 15.57 
 Granted 52,755 $ 14.69 
 Vested ( 72,053 ) $ 15.57 
 Balance December 31, 2019 52,755 $ 14.69 
 Granted 65,959 $ 11.75 
 Vested ( 61,266 ) $ 14.28 
 Balance December 31, 2020 57,448 $ 11.75 
 Granted 44,708 $ 29.30 
 Forfeited ( 8,532 ) $ 29.30 
 Vested ( 57,448 ) $ 11.75 
 Balance December 31, 2021 36,176 $ 29.30 
 
 
 
 

 
 Compensation expense for RSAs recognized in SG&A expense in the consolidated statements of operations was $ 0.8 million , $ 0.9 million, and $ 1.0 million for the years ended December 31, 2021, 2020, and 2019, respectively. At December 31, 2021, there was $ 0.5 million of unrecognized compensation cost related to RSAs that was expected to be recognized over the remaining weighted average vesting period of 0.4 years . The total fair value of RSA's vested in 2021, 2020, and 2019 was $ 1.6 million, $ 0.9 million, and $ 0.9 million, respectively. 
 Time-Based RSUs 
 The following table summarizes the Company's Time-Based RSU activity during the years ended December 31, 2021, 2020 and 2019 : 
 
 Number of Shares Weighted-Average Grant Date Fair Value 
 Balance, December 31, 2018 852,733 $ 13.60 
 Granted 478,400 $ 11.69 
 Forfeited ( 52,648 ) $ 12.78 
 Vested ( 213,180 ) $ 12.78 
 Balance December 31, 2019 1,065,305 $ 12.78 
 Granted 632,864 $ 14.37 
 Forfeited ( 33,558 ) $ 13.28 
 Vested ( 338,749 ) $ 13.02 
 Balance December 31, 2020 1,325,862 $ 13.46 
 Granted 415,737 $ 27.25 
 Forfeited ( 72,505 ) $ 17.80 
 Vested ( 671,643 ) $ 13.99 
 Balance December 31, 2021 997,451 $ 18.54 
 
 
 
 

 Compensation expense for Time-Based RSUs recognized in SG&A expense in the consolidated statements of operati ons was $ 9.0 million , $ 5.6 million, and $ 3.9 million for the years ended December 31, 2021, 2020, and 2019, resp ectively. At December 31, 2021, unrecognized compensation cost related to Time-Based RSUs totaled $ 11.7 million and was expected to be recognized over the remaining weighted average vesting period of 2.0 years . The total fair value of RSU's vested in 2021, 2020, and 2019 was $ 18.5 million , $ 2.9 million , and $ 2.5 million , respectively. 
 Included in restructuring costs for the year ended December 31, 2021, was expense of approximately $ 5.9 million recognized as a result of the modification of certain RSUs with the Transition, Separation and Release Agreement entered into on February 25, 2021, with the Company's former President and Chief Operating Officer. 
 108 

 
 

 Performance-Based RSUs 
 The following table summarizes the Company's Performance-Based RSU award activity during the years ended December 31, 2021 and 2020 and 2019: 
 
 Number of Shares Weighted-Average Grant Date Fair Value 
 Balance December 31, 2018 — $ — 
 Granted 302,182 $ 13.22 
 Forfeited ( 13,901 ) $ 13.22 
 Balance December 31, 2019 288,281 $ 13.22 
 Granted 325,256 $ 16.35 
 Forfeited ( 12,700 ) $ 14.70 
 Vested ( 7,449 ) $ 16.82 
 Balance December 31, 2020 593,388 $ 14.88 
 Granted 977,645 $ 33.21 
 Forfeited ( 23,753 ) $ 27.92 
 Vested ( 10,886 ) $ 14.70 
 Balance December 31, 2021 1,536,394 $ 26.34 
 
 
 
 

 Compensation expense for Performance-Based RSUs recognized in SG&A expense in the consolidated statements of operations wa s $ 8.3 million , $ 2.5 million and $ 1.0 million for the years ended December 31, 2021, 2020, and 2019, respectively. At December 31, 2021, unrecognized compensation cost related to Performance-Based RSUs totaled $ 27.6 million and was expected to be recognized over the remaining vesting period of 2.5 years . 
 The total fair value of Performance-Based RSU's vested in 2021 and 2020 was $ 0.3 million and $ 0.2 million , respectively. No Performance-Based RSUs vested in 2019. Refer to Note 1 for the details of conditions required for the performance-based RSUs to vest. 
 Included in restructuring costs for the year ended December 31, 2021, was expense of approximately $ 1.3 million recognized as a result of the modification of certain Performance-Based RSUs with the Transition, Separation and Release Agreement entered into on February 25, 2021, with the Company's former President and Chief Operating Officer. 
 Stock Options 
 The following table summarizes the Company's stock option activity during the years ended December 31, 2021, 2020 and 2019 : 
 
 WillScot Options Weighted-Average Exercise Price per Share Converted
Mobile Mini Options Weighted-Average Exercise Price per Share 
 Balance December 31, 2018 589,257 $ 13.60 — $ — 
 Forfeited ( 41,302 ) $ 13.60 — $ — 
 Exercised ( 13,767 ) $ 13.60 — $ — 
 Balance December 31, 2019 534,188 $ 13.60 — $ — 
 Converted at Merger — $ — 7,361,516 $ 13.52 
 Exercised — $ — ( 428,653 ) $ 13.07 
 Cancelled in settlement, net of taxes — $ — ( 4,901,408 ) $ 13.04 
 Balance December 31, 2020 534,188 $ 13.60 2,031,455 $ 14.78 
 Forfeited — $ — ( 6,240 ) $ 12.19 
 Exercised — $ — ( 497,572 ) $ 15.21 
 Balance at December 31, 2021 534,188 $ 13.60 1,527,643 $ 14.66 
 
 
 
 
 
 Fully vested and exercisable options, December 31, 2021 
 400,641 $ 13.60 1,527,643 $ 14.66 

 109 

 
 

 Under our stock option plans, the Company may issue shares on a net basis at the request of the option holder. This occurs by netting the option costs in shares from the shares exercised. No options were granted in the years ended December 31, 2021, 2020, or 2019. 
 At December 31, 2021, the intrinsic value of stock options outstanding and stock options fully vested and currently exercisable was $ 54.5 million and $ 50.9 million , respectively. At December 31, 2021, the weighted-average remaining contractual term of options outstanding was 6.2 years for WillScot options and 4.3 years for converted Mobile Mini options. The total pre-tax intrinsic value of stock options exercised during the years ended December 31, 2021, 2020, and 2019 were $ 6.2 million, $ 30.7 million and less than $ 0.1 million, respectively. 
 Com pensation expense for stock option awards, recognized in SG&A expense in the consolidated statements of operations was $ 0.7 million, $ 0.7 million, and $ 0.8 million for the years ended December 31, 2021 , 2020, and 2019, respective ly. At December 31, 2021, unrecognized compensation cost related to stock option awards totaled $ 0.2 million and is expected to be recognized over the remaining vesting period of 0.2 years . 
 
 
 
 NOTE 17 - Commitments and Contingencies 
 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. 
 
 
 
 NOTE 18 - Segment Reporting 
 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"). In connection with the Merger, the Company determined its reportable segments and retrospectively adjusted prior year's presentation to conform to the current presentation of reportable segments. 
 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 the Company believes such adjustments to be immaterial. 
 Total assets for each reportable segment are not available because the Company utilizes a centralized approach to working capital management. 
 The Company defines EBITDA as net income (loss) plus interest (income) expense, income tax (benefit) expense, depreciation and amortization. The Company reflects the further adjustments to EBITDA (“Adjusted EBITDA”) to exclude certain non-cash items and the effect of what the Company considers transactions or events not related to its core and ongoing business operations. In addition, the 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. The Company also regularly evaluates gross profit by segment to assist in the assessment of its operational performance. The Company considers Adjusted EBITDA to be the more important metric because it more fully captures the business performance of the segments, inclusive of indirect costs. 
 Reportable Segments 
 The following tables set forth certain information regarding each of the Company’s reportable segments fo r the years ended December 31, 2021, 2020, and 2019, respectively. Consistent with the financial statements, the segment results only include results from Mobile Mini's operations after July 1, 2020, the Merger date. Please refer to the Management Discussion and Analysis of Financial Condition and Results of Operations included in this document, for pro forma results inclusive of Mobile Mini's financial results for periods prior to the Merger date. 
 110 

 
 

 
 Year Ended December 31, 2021 
 (in thousands) NA Modular NA Storage UK Storage Tank and Pump Unallocated Costs Total 
 Revenues: 
 Leasing and services revenue: 
 Leasing $ 864,923 $ 387,567 $ 82,106 $ 77,527 $ 1,412,123 
 Delivery and installation 219,385 101,744 24,023 29,530 374,682 
 Sales revenue: 
 New units 40,366 6,628 3,533 2,355 52,882 
 Rental units 39,505 12,863 1,363 1,479 55,210 
 Total revenues 1,164,179 508,802 111,025 110,891 1,894,897 
 
 Costs: 
 Cost of leasing and services: 
 Leasing 
 229,129 53,447 17,440 17,045 317,061 
 Delivery and installation 
 196,137 71,396 14,271 25,057 306,861 
 Cost of sales: 
 New units 27,415 3,933 2,357 1,672 35,377 
 Rental units 20,592 7,438 1,287 536 29,853 
 Depreciation of rental equipment 194,461 24,329 4,428 14,319 237,537 
 Gross profit $ 496,445 $ 348,259 $ 71,242 $ 52,262 $ 968,208 
 Other selected data: 
 Adjusted EBITDA $ 423,004 $ 226,600 $ 49,039 $ 41,750 $ — $ 740,393 
 Selling, general and administrative expense (a) $ 266,187 $ 145,988 $ 26,630 $ 24,831 $ 49,185 $ 512,821 
 Purchases of rental equipment and refurbishments $ 187,495 $ 45,426 $ 27,830 $ 17,747 $ — $ 278,498 

 (a) Includes both SG&A expense and Transaction costs from the consolidated statement of operations. 
 Year Ended December 31, 2020 
 (in thousands) NA Modular NA Storage UK Storage Tank and Pump Unallocated Costs Total 
 Revenues: 
 Leasing and services revenue: 
 Leasing $ 770,330 $ 166,128 $ 32,633 $ 32,356 $ 1,001,447 
 Delivery and installation 208,079 42,655 9,409 14,013 274,156 
 Sales revenue: 
 New units 41,858 6,976 3,124 1,135 53,093 
 Rental units 30,895 6,070 1,195 789 38,949 
 Total Revenues 1,051,162 221,829 46,361 48,293 1,367,645 
 
 Costs: 
 Cost of leasing and services: 
 Leasing 194,442 19,925 7,391 5,618 227,376 
 Delivery and installation 175,705 27,029 6,353 11,015 220,102 
 Cost of sales: 
 New units 27,555 4,244 2,301 741 34,841 
 Rental units 19,213 4,261 1,026 272 24,772 
 Depreciation of rental equipment 182,605 9,585 1,648 6,743 200,581 
 Gross profit $ 451,642 $ 156,785 $ 27,642 $ 23,904 $ 659,973 
 Other selected data: 
 Adjusted EBITDA $ 394,805 $ 99,837 $ 17,822 $ 17,843 $ — $ 530,307 
 Selling, general and administrative expense $ 242,010 $ 66,533 $ 11,468 $ 12,804 $ 91,864 $ 424,679 
 Purchases of rental equipment and refurbishments $ 153,327 $ 14,969 $ 1,693 $ 2,394 $ — $ 172,383 

 (a) Includes both SG&A expense and Transaction costs from the consolidated statement of operations. 
 
 
 
 
 
 
 111 

 
 

 
 Year Ended December 31, 2019 
 (in thousands) NA Modular NA Storage UK Storage Tank and Pump Unallocated Costs Total 
 Revenues: 
 Leasing and services revenue: 
 Leasing $ 744,185 $ — $ — $ — $ 744,185 
 Delivery and installation 220,057 — — — 220,057 
 Sales revenue: 
 New units 59,085 — — — 59,085 
 Rental units 40,338 — — — 40,338 
 Total revenues 1,063,665 — — — 1,063,665 
 
 Costs: 
 Cost of leasing and services: 
 Leasing 213,151 — — — 213,151 
 Delivery and installation 194,107 — — — 194,107 
 Cost of sales: 
 New units 42,160 — — — 42,160 
 Rental units 26,255 — — — 26,255 
 Depreciation of rental equipment 174,679 — — — 174,679 
 Gross profit $ 413,313 $ — $ — $ — $ 413,313 
 Other selected data: 
 Adjusted EBITDA $ 356,548 $ — $ — $ — $ — $ 356,548 
 Selling, general and administrative expense $ 235,228 $ — $ — $ — $ 35,776 $ 271,004 
 Purchase of rental equipment and refurbishments $ 205,106 $ — $ — $ — $ — $ 205,106 

 
 
 
 
 
 112 

 
 

 The following tables present a reconciliation of the Company’s Net Income (Loss) to Adjusted EBITDA for the years ended December 31, 2021, 2020, and 2019, respectively: 
 
 Year Ended December 31, 
 (in thousands) 2021 2020 2019 
 Net income (loss) attributable to WillScot Mobile Mini $ 160,144 $ 74,127 $ ( 120,744 ) 
 Net income (loss) attributable to non-controlling interest, net of tax — 1,213 ( 421 ) 
 Loss on extinguishment of debt 5,999 42,401 8,755 
 Income tax expense (benefit) 49,546 ( 51,451 ) ( 2,191 ) 
 Interest expense 117,987 119,886 122,504 
 Depreciation and amortization 315,567 243,830 187,074 
 Fair value loss (gain) on common stock warrant liabilities 26,597 ( 3,461 ) 109,622 
 Currency losses (gains), net 548 ( 355 ) ( 688 ) 
 Impairment losses on long-lived assets — — 2,848 
 Restructuring costs, lease impairment expense and other related charges 14,756 11,403 12,429 
 Transaction costs 1,375 64,053 — 
 Integration costs 28,424 18,338 26,607 
 Stock compensation expense 18,989 9,879 6,686 
 Other 461 444 4,067 
 Adjusted EBITDA $ 740,393 $ 530,307 $ 356,548 

 
 
 Included in restructuring costs for the year ended December 31, 2021 was expense of approximately $ 7.2 million recognized as a result of the modification of certain equity awards associated with the Transition, Separation and Release Agreement entered into on February 25, 2021 with the Company's former President and Chief Operating Officer. For the year ended December 31, 2021, stock-based compensation expense reported in the Statement of Cash Flows included these charges. 
 Assets 
 As discussed further in Note 2, the Company acquired Mobile Mini on July 1, 2020. Assets related to the Company’s reportable segments include the following: 
 
 (in thousands) NA Modular NA Storage UK Storage Tank and Pump Total 
 As of December 31, 2021: 
 
 Goodwill $ 521,049 $ 492,552 $ 65,098 $ 100,107 $ 1,178,806 
 Intangible assets, net $ 125,000 $ 317,875 $ 9,053 $ 8,750 $ 460,678 
 Rental equipment, net $ 1,877,978 $ 899,881 $ 168,208 $ 134,914 $ 3,080,981 
 As of December 31, 2020: 
 
 Goodwill $ 235,828 $ 726,529 $ 65,600 $ 143,262 $ 1,171,219 
 Intangible assets, net $ 125,625 $ 329,437 $ 11,177 $ 29,708 $ 495,947 
 Rental equipment, net $ 1,886,211 $ 772,356 $ 147,720 $ 125,359 $ 2,931,646 

 
 
 
 113 

 
 
 

 NOTE 19 - Related Parties 
 Related party balances included in the Company’s consolidated balance sheets at December 31, consisted of the following: 
 
 (in thousands) Financial statement line Item 2021 2020 
 Receivables due from affiliates Trade receivables, net of allowances for credit losses $ 10 $ 30 
 Amounts due to affiliates Accrued liabilities ( 49 ) ( 461 ) 
 Total related party liabilities, net $ ( 39 ) $ ( 431 ) 

 Related party transactions included in the Company’s consolidated statements of operations for the years ended December 31, consisted of the following: 
 
 (in thousands) Financial statement line item 2021 2020 2019 
 Leasing revenue from related parties Leasing revenue $ 737 $ 1,066 $ 316 
 Rental unit sales to related parties Rental unit sales — 380 — 
 Consulting expense to related party (a) Selling, general & administrative expense ( 4,187 ) ( 5,194 ) ( 1,029 ) 
 Total related party expense, net $ ( 3,450 ) $ ( 3,748 ) $ ( 713 ) 

 (a) Two of the Company's directors also serve on the Board of Directors of a consulting firm from which the Company incurs professional fees. 
 On June 30, 2020, the Company completed the Sapphire Exchange, whereby Sapphire Holdings, an affiliate of TDR Capital, exchanged shares of Class B Common Stock for 10,641,182 shares of Class A Common Stock. As a result of the Sapphire Exchange, all issued and outstanding shares of WillScot’s Class B Common Stock were automatically canceled for no consideration and the existing exchange agreement was automatically terminated. 
 On August 22, 2018, WillScot’s principal stockholder, Sapphire Holdings, entered into a margin loan (the "Margin Loan") under which all of its shares of WillScot Mobile Mini Common Stock were pledged to secure borrowings of up to $ 125.0 million under the loan agreement. WillScot Mobile Mini was not a party to the loan agreement and had no obligations thereunder . On June 29, 2021, Sapphire Holdings repaid all outstanding amounts under the Margin Loan with proceeds from the sale of certain shares of WillScot Mobile Mini and no WillScot Mobile Mini shares remain pledged thereunder. 
 On March 1, 2021, the Company repurchased from Sapphire Holdings and cancelled 2,750,000 shares of its Common Stock. On June 29, 2021, the Company repurchased from Sapphire Holdings and cancelled an additional 3,900,000 shares of its Common Stock. Following the reduction in Sapphire Holdings’ beneficial ownership of Common Stock resulting from the foregoing repurchases and the underwritten secondary offering by Sapphire Holdings of 16,100,000 shares of Common Stock on June 25, 2021, Gary Lindsay resigned his position as a member of the WillScot Mobile Mini board of directors pursuant to the terms of that certain Shareholders Agreement dated July 1, 2020 between Sapphire Holdings, TDR Capital II Holdings L.P., TDR Capital, L.L.P. and WillScot Mobile Mini (the "Shareholders Agreement"). 
 On September 9, 2021, the Company repurchased from Sapphire Holdings and cancelled an additional 2,379,839 shares of its common stock, and Sapphire Holdings sold its remaining 21,410,019 shares through an underwritten secondary offering. Following the reduction in Sapphire Holdings' beneficial ownership of Common Stock resulting from the foregoing repurchase and secondary offering, Stephen Robertson resigned his position as a member of the Willscot Mobile Mini board of directors pursuant to the terms of the Shareholder Agreement. 
 The Company purchased rental equipment from related party affiliates of $ 2.5 million , $ 3.1 million, and $ 4.7 million for the years ended December 31, 2021, 2020, and 2019, respectively. 
 
 
 
 NOTE 20 - Earnings (Loss) Per Share 
 Basic earnings (loss) per share (“EPS”) is calculated by dividing net income (loss) attributable to WillScot Mobile Mini by the weighted average number of shares of Common Stock outstanding during the period. The shares of Common Stock issued as a result of the vesting of RSUs and RSAs as well as the exercise of stock options or redemption of warrants are included in EPS based on the weighted average number of days in which they were outstanding during the period. 
 Prior to June 30, 2020, the Company had shares of Class B Common Stock which had no rights to dividends or distributions made by the Company and, in turn, were excluded from the EPS calculation. On June 30, 2020, the Sapphire Exchange was completed, and all shares of Class B Common Stock were cancelled, and Sapphire Holdings received 10,641,182 shares of Common Stock. 
 Diluted EPS is computed similarly to basic EPS, except that it includes the potential dilution that could occur if dilutive securities were exercised. Effects of potentially dilutive securities are present ed only in periods in which they are dilutive. When liability-classified warrants are in the money and the impact of their inclusion on diluted EPS is dilutive, diluted EPS also assumes share settlement of such instruments through an adjustment to net income available to common stockholders for the fair value (gain) loss on common stock warrant liabilities and inclusion of the number of dilutive shares in the denominator. 
 114 

 
 

 The following table reconciles net income (loss) attributable to WillScot Mobile Mini common shareholders and the weighted average shares outstanding for the basic calculation to the weighted average shares outstanding for the diluted calculation for the years ended December 31: 
 
 
 
 (in thousands) 2021 2020 2019 
 Numerator: 
 Net income (loss) attributable to common shareholders - basic $ 160,144 $ 74,127 $ ( 120,744 ) 
 Fair value gain on common stock warrant liabilities — ( 30,524 ) — 
 Net income (loss) attributable to common shareholders - dilutive $ 160,144 $ 43,603 $ ( 120,744 ) 
 
 Denominator: 
 Weighted average Common Shares outstanding - basic 226,519 169,230 108,684 
 Dilutive effect of outstanding securities: 
 Warrants 3,589 752 — 
 RSAs 24 39 — 
 Time-Based RSUs 594 778 — 
 Performance-Based and Market-Based RSUs 955 544 — 
 Stock Options 1,113 634 — 
 Class B common shares N/A 5,291 — 
 Weighted average Common Shares outstanding - dilutive 232,794 177,268 108,684 

 The following potential common shares were excluded from the computation of dilutive EPS because their effect would have been anti-dilutive: 
 
 (in thousands) 2021 2020 2019 
 Warrants — 2,366 2,320 
 RSAs — — 12 
 Time-based RSUs — — 323 
 Performance-based RSUs 375 — 274 
 Stock Options — — 534 
 Class B common shares N/A — 10,641 
 

 
 
 
 
 
 
 
 
 
 
 115 

 
 

 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 
 None.
WillScot Holdings Corp 10-K

Item 8. Financial Statements and Supplementary Data
