WillScot Holdings Corp 10-Q

ITEM 1. Financial Statements WillScot Mobile Mini Holdings Corp. Condensed Consolidated Balance Sheets (in thousands, except share data) March 31, 2022 (unaudited) December 31, 2021 Assets Cash and cash equivalents $ 11,321 $ 12,699 Trade receivables, net of allowances for credit losses at March 31, 2022 and December 31, 2021 of $ 49,258 and $ 47,629 , respectively 403,153 399,887 Inventories 39,885 32,739 Prepaid expenses and other current assets 40,283 36,761 Assets held for sale 954 954 Total current assets 495,596 483,040 Rental equipment, net 3,164,084 3,080,981 Property, plant and equipment, net 315,402 312,178 Operating lease assets 241,132 247,064 Goodwill 1,177,288 1,178,806 Intangible assets, net 453,785 460,678 Other non-current assets 10,486 10,852 Total long-term assets 5,362,177 5,290,559 Total assets $ 5,857,773 $ 5,773,599 Liabilities and equity Accounts payable $ 135,355 $ 118,271 Accrued expenses 102,938 100,195 Accrued employee benefits 44,634 68,414 Deferred revenue and customer deposits 172,907 159,639 Operating lease liabilities - current 53,646 53,005 Current portion of long-term debt 19,792 18,121 Total current liabilities 529,272 517,645 Long-term debt 2,790,842 2,694,319 Deferred tax liabilities 367,480 354,879 Operating lease liabilities - non-current 187,930 194,256 Other non-current liabilities 16,064 15,737 Long-term liabilities 3,362,316 3,259,191 Total liabilities 3,891,588 3,776,836 Commitments and contingencies (see Note 16) Preferred Stock: $ 0.0001 par, 1,000,000 shares authorized and zero shares issued and outstanding at March 31, 2022 and December 31, 2021 — — Common Stock: $ 0.0001 par, 500,000,000 shares authorized and 223,174,389 and 223,939,527 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively 22 22 Additional paid-in-capital 3,536,906 3,616,902 Accumulated other comprehensive loss ( 30,824 ) ( 29,071 ) Accumulated deficit ( 1,539,919 ) ( 1,591,090 ) Total shareholders' equity 1,966,185 1,996,763 Total liabilities and shareholders' equity $ 5,857,773 $ 5,773,599 See the accompanying notes which are an integral part of these condensed consolidated financial statements. 3 WillScot Mobile Mini Holdings Corp. Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended March 31, (in thousands, except share and per share data) 2022 2021 Revenues: Leasing and services revenue: Leasing $ 393,192 $ 315,662 Delivery and installation 100,331 83,504 Sales revenue: New units 6,597 10,955 Rental units 8,774 15,202 Total revenues 508,894 425,323 Costs: Costs of leasing and services: Leasing 88,878 69,895 Delivery and installation 81,515 70,136 Costs of sales: New units 4,326 7,109 Rental units 5,144 9,105 Depreciation of rental equipment 62,216 55,698 Gross profit 266,815 213,380 Expenses: Selling, general and administrative 150,210 117,329 Other depreciation and amortization 19,604 18,324 Lease impairment expense and other related charges 263 1,253 Restructuring costs — 3,142 Currency losses, net 138 36 Other income, net ( 1,309 ) ( 1,988 ) Operating income 97,909 75,284 Interest expense 30,990 29,964 Fair value loss on common stock warrant liabilities — 27,207 Loss on extinguishment of debt — 3,185 Income before income tax 66,919 14,928 Income tax expense 15,748 10,481 Net income $ 51,171 $ 4,447 Earnings per share: Basic $ 0.23 $ 0.02 Diluted $ 0.22 $ 0.02 Weighted average shares: Basic 223,490,912 228,293,197 Diluted 228,955,504 234,720,295 See the accompanying notes which are an integral part of these condensed consolidated financial statements. 4 WillScot Mobile Mini Holdings Corp. Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three Months Ended March 31, (in thousands) 2022 2021 Net income $ 51,171 $ 4,447 Other comprehensive (loss) income: Foreign currency translation adjustment, net of income tax expense of $ 0 for both the three months ended March 31, 2022 and 2021 ( 4,074 ) 5,034 Net gain on derivatives, net of income tax expense of $ 777 and $ 667 for the three months ended March 31, 2022 and 2021, respectively 2,321 2,177 Total other comprehensive (loss) income ( 1,753 ) 7,211 Total comprehensive income $ 49,418 $ 11,658 See the accompanying notes which are an integral part of these condensed consolidated financial statements. 5 WillScot Mobile Mini Holdings Corp. Condensed Consolidated Statements of Changes in Equity (Unaudited) Three Months Ended March 31, 2022 Common Stock Additional Paid-in-Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Shareholders' Equity (in thousands) Shares Amount Balance at December 31, 2021 223,940 $ 22 $ 3,616,902 $ ( 29,071 ) $ ( 1,591,090 ) $ 1,996,763 Net income — — — — 51,171 51,171 Other comprehensive loss — — — ( 1,753 ) — ( 1,753 ) Stock-based compensation and issuance of Common Stock from vesting 498 — 6,395 — — 6,395 Repurchase and cancellation of Common Stock and warrants ( 2,064 ) — ( 77,409 ) — — ( 77,409 ) Issuance of Common Stock from the exercise of options and warrants 800 — 3,313 — — 3,313 Withholding taxes on net share settlement of stock-based compensation — — ( 12,295 ) — — ( 12,295 ) Balance at March 31, 2022 223,174 $ 22 $ 3,536,906 $ ( 30,824 ) $ ( 1,539,919 ) $ 1,966,185 Three Months Ended March 31, 2021 Common Stock Additional Paid-in-Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Shareholders' Equity (in thousands) Shares Amount Balance at December 31, 2020 229,038 $ 23 $ 3,852,291 $ ( 37,207 ) $ ( 1,751,234 ) $ 2,063,873 Net income — — — — 4,447 4,447 Other comprehensive income — — — 7,211 — 7,211 Stock-based compensation and issuance of Common Stock from vesting 229 — 4,951 — — 4,951 Repurchase and cancellation of Common Stock and warrants ( 2,793 ) — ( 76,788 ) — — ( 76,788 ) Issuance of Common Stock from the exercise of options and warrants 341 — 5,414 — — 5,414 Withholding taxes on net share settlement of stock-based compensation — — ( 3,219 ) — — ( 3,219 ) Balance at March 31, 2021 226,815 $ 23 $ 3,782,649 $ ( 29,996 ) $ ( 1,746,787 ) $ 2,005,889 See the accompanying notes which are an integral part of these condensed consolidated financial statements. 6 WillScot Mobile Mini Holdings Corp. Condensed Consolidated Statements of Cash Flows (Unaudited) Three Months Ended March 31, (in thousands) 2022 2021 Operating activities: Net income $ 51,171 $ 4,447 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 81,820 74,855 Provision for credit losses 8,601 8,516 Gain on sale of rental equipment and other property, plant and equipment ( 3,232 ) ( 8,128 ) Amortization of debt discounts and debt issuance costs 3,489 3,565 Fair value loss on common stock warrant liabilities — 27,207 Loss on extinguishment of debt — 3,185 Stock-based compensation expense 6,395 4,951 Deferred income tax expense 12,362 8,057 Unrealized currency losses (gains), net 86 ( 64 ) Other 914 — Changes in operating assets and liabilities: Trade receivables ( 12,064 ) 341 Inventories ( 7,122 ) ( 2,452 ) Prepaid expenses and other assets ( 9,042 ) 2,995 Operating lease assets and liabilities 268 3,577 Accounts payable and other accrued expenses ( 1,239 ) ( 13,096 ) Deferred revenue and customer deposits 13,120 4,115 Net cash provided by operating activities 145,527 122,071 Investing activities: Acquisition ( 57,457 ) — Proceeds from sale of rental equipment 14,554 15,202 Purchase of rental equipment and refurbishments ( 95,236 ) ( 52,535 ) Proceeds from sale of property, plant and equipment 260 13,729 Purchase of property, plant and equipment ( 10,481 ) ( 7,307 ) Net cash used in investing activities ( 148,360 ) ( 30,911 ) Financing activities: Receipts from issuance of Common Stock from the exercise of options 3,313 5,414 Repurchase and cancellation of Common Stock and warrants ( 77,708 ) ( 81,618 ) Receipts from borrowings 152,500 162,000 Repayment of borrowings ( 59,000 ) ( 166,112 ) Payment of debt extinguishment premium costs — ( 1,950 ) Principal payments on finance lease obligations ( 5,224 ) ( 3,735 ) Taxes paid on employee stock awards ( 12,295 ) ( 3,219 ) Net cash provided by (used in) financing activities 1,586 ( 89,220 ) Effect of exchange rate changes on cash and cash equivalents ( 131 ) 57 Net change in cash and cash equivalents ( 1,378 ) 1,997 Cash and cash equivalents at the beginning of the period 12,699 24,937 Cash and cash equivalents at the end of the period $ 11,321 $ 26,934 Supplemental cash flow information: Interest paid 1 $ 22,197 $ 23,050 Income taxes paid, net $ 2,606 $ 588 Capital expenditures accrued or payable $ 28,433 $ 25,975 1 Includes $ 2,961 of payments related to the interest rate swap for the three months ended March 31, 2021. See the accompanying notes which are an integral part of these condensed consolidated financial statements. 7 WillScot Mobile Mini Holdings Corp. Notes to the Condensed Consolidated Financial Statements (Unaudited) 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. Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and notes required by US Generally Accepted Accounting Principles ("GAAP") for complete financial statements. The accompanying unaudited condensed 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 and contain all adjustments, which are of a normal and recurring nature, considered necessary by management to present fairly the financial position, results of operations and cash flows for the interim periods presented. Subsidiaries are fully consolidated from the dat e 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 the Company. All intercompany balances and transactions are eliminated. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the full year. For further information, refer to the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021. Reclassifications Certain reclassifications have been made to prior year financial statements to conform to the current year presentation. Recently Issued Accounting Standards In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This update was intended to ease the potential burden in accounting for and recognizing the effects of reference rate reform. It provided 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 the potential impact of adoption of these elective practical expedients on its condensed consolidated financial statements and does not expect the impact to be material. 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"). 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) ("ASC 606"). ASU 2021-08 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. NOTE 2 - Acquisitions On July 1, 2020, WillScot Corporation, a Delaware corporation (“WillScot”), and Mobile Mini, Inc. (“Mobile Mini”) merged (the “Merger”). Immediately following the Merger, WillScot changed its name to “WillScot Mobile Mini Holdings Corp.” Asset Acquisition On March 18, 2022, the Company acquired certain assets and liabilities, which consisted primarily of approximately 400 blast resistant modular units. Integration Costs The Company recorded $ 4.1 million and $ 7.3 million in integration costs related to acquisitions and the Merger within selling, general and administrative ("SG&A") expense during the three months ended March 31, 2022 and 2021, respectively. 8 NOTE 3 - Revenue Revenue Disaggregation Geographic Areas The Company had total revenue in the following geographic areas for the three months ended March 31, as follows: Three Months Ended March 31, (in thousands) 2022 2021 US $ 451,968 $ 371,269 Canada 25,273 23,584 Mexico 4,214 3,463 UK 27,439 27,007 Total revenues $ 508,894 $ 425,323 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 value-added products and services ("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 three months ended March 31, was as follows: Three Months Ended March 31, (in thousands) 2022 2021 Modular space leasing revenue $ 199,078 $ 169,952 Portable storage leasing revenue 77,988 54,613 Tank and pump leasing revenue 19,230 15,760 VAPS and third party leasing revenues (a) 80,926 62,426 Other leasing-related revenue (b) 15,970 12,911 Leasing revenue 393,192 315,662 Delivery and installation revenue 100,331 83,504 Total leasing and services revenue 493,523 399,166 New unit sales revenue 6,597 10,955 Rental unit sales revenue 8,774 15,202 Total revenues $ 508,894 $ 425,323 (a) Includes $ 7.5 million and $ 6.2 million of service revenue for the three months ended March 31, 2022 and 2021, respectively. (b) Includes primarily damage billings, delinquent payment charges, and other processing fees. Leasing and Services Revenue The majority of r evenue ( 76 % and 73 % for the three months ended March 31, 2022 and 2021, respectively) was generated by rental income subject to the guidance of ASU 2018-11, Leases (Topic 842) ("ASC 842"). The remaining revenue was generated by performance obligations in contracts with customers for services or sale of units subject to the guidance in ASC 606. Receivables and Credit Losses 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. 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 9 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 allowance for credit losses reflects the estimate of the amount of receivables that the Company will be unable to collect based on historical collection experience and, as applicable, current conditions and reasonable and supportable forecasts that affect collectability. The Company's estimate reflects 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 allowance. Activity in the allowance for credit losses was as follows: Three Months Ended March 31, (in thousands) 2022 2021 Balance at beginning of period $ 47,629 $ 29,258 Provision for credit losses, net of recoveries 8,601 8,516 Write-offs ( 7,010 ) ( 5,813 ) Foreign currency translation and other 38 ( 331 ) Balance at end of period $ 49,258 $ 31,630 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 three months ended March 31, 2022, $ 20.3 million of deferred revenue relating to these services was recognized as revenue. As of March 31, 2022 and December 31, 2021, the Company had approximately $ 84.4 million and $ 79.4 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 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 expedient 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; therefore, the commissions are expensed as incurred. NOTE 4 - Leases As of March 31, 2022, the undiscounted future lease payments for operating and finance lease liabilities were as follows: (in thousands) Operating Finance 2022 (remaining) $ 48,135 $ 16,756 2023 55,336 18,638 2024 46,826 15,717 2025 39,301 15,825 2026 28,736 13,815 Thereafter 63,915 17,416 Total lease payments 282,249 98,167 Less: interest ( 40,673 ) ( 7,474 ) Present value of lease liabilities $ 241,576 $ 90,693 10 Finance lease liabilities are included within long-term debt and current portion of long-term debt on the condensed consolidated balance sheets. The Company’s lease activity during the three months ended March 31, 2022 and 2021 was as follows: (in thousands) Three Months Ended March 31, Financial Statement Line 2022 2021 Finance Lease Expense Amortization of finance lease assets $ 5,224 $ 4,378 Interest on obligations under finance leases 654 547 Total finance lease expense $ 5,878 $ 4,925 Operating Lease Expense Fixed lease expense Cost of leasing and services $ 825 $ 1,106 Selling, general and administrative 16,289 14,472 Lease impairment expense and other related charges 213 596 Short-term lease expense Cost of leasing and services 9,042 6,379 Selling, general and administrative 715 552 Variable lease expense Cost of leasing and services 1,287 1,802 Selling, general and administrative 2,169 1,838 Lease impairment expense and other related charges 50 176 Total operating lease expense $ 30,590 $ 26,921 Lease impairment expense and other related charges relate to closed locations that are no longer used in operations as a result of consolidation activities within the Company. During the three months ended March 31, 2022, the Company recorded $ 0.3 million in lease impairment expense and other related charges which is comprised of closed location rent expense. During the three months ended March 31, 2021, the Company recorded $ 1.3 million in lease impairment expense and other related charges which is comprised of $ 0.5 million loss on lease exit and impairment charges and $ 0.8 million in closed location rent expense. Supplemental cash flow information related to leases for the three months ended March 31, 2022 and 2021 was as follows: (in thousands) Three Months Ended March 31, Supplemental Cash Flow Information 2022 2021 Cash paid for the amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 17,334 $ 16,458 Operating cash outflows from finance leases $ 636 $ 549 Financing cash outflows from finance leases $ 5,263 $ 3,771 Right of use assets obtained in exchange for lease obligations $ 8,810 $ 10,878 Assets obtained in exchange for finance leases $ 7,011 $ 3,366 11 Weighted-average remaining operating lease terms and the weighted average discount rates as of March 31, 2022 and December 31, 2021 were as follows: Lease Terms and Discount Rates March 31, 2022 December 31, 2021 Weighted-average remaining lease term - operating leases 6.0 years 6.1 years Weighted-average discount rate - operating leases 4.9 % 5.0 % Weighted-average remaining lease term - finance leases 4.5 years 4.5 years Weighted-average discount rate - finance leases 2.9 % 2.9 % NOTE 5 - Inventories Inventories at the respective balance sheet dates consisted of the following: (in thousands) March 31, 2022 December 31, 2021 Raw materials $ 32,600 $ 26,854 Finished units 7,285 5,885 Inventories $ 39,885 $ 32,739 NOTE 6 - Rental Equipment, net Rental equipment, net at the respective balance sheet dates consisted of the following: (in thousands) March 31, 2022 December 31, 2021 Modular space units $ 3,115,582 $ 3,005,195 Portable storage units 765,792 758,619 Tank and pump products 163,814 156,112 Value added products 178,994 168,419 Total rental equipment 4,224,182 4,088,345 Less: accumulated depreciation ( 1,060,098 ) ( 1,007,364 ) Rental equipment, net $ 3,164,084 $ 3,080,981 NOTE 7 - 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, 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 Effects of movements in foreign exchange rates 396 ( 56 ) ( 1,858 ) — ( 1,518 ) Balance at March 31, 2022 $ 521,445 $ 492,496 $ 63,240 $ 100,107 $ 1,177,288 The Company had no goodwill impairment during the three months ended March 31, 2022 or the year ended December 31, 2021. 12 NOTE 8 - Intangibles Intangible assets other than goodwill at the respective balance sheet dates consisted of the following: March 31, 2022 (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 6.4 $ 209,000 $ ( 45,277 ) $ 163,723 Technology 4.3 1,500 ( 438 ) 1,062 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 $ ( 45,715 ) $ 453,785 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 Amortization expense related to intangible assets was $ 6.6 million and $ 7.0 million for the three months ended March 31, 2022 and 2021, respectively. Based on the carrying value at March 31, 2022, future amortization of intangible assets is expected to be as follows for the years ended December 31: (in thousands) 2022 (remaining) $ 19,812 2023 26,416 2024 26,416 2025 26,416 2026 25,432 Thereafter 40,293 Total $ 164,785 13 NOTE 9 - Debt The carrying value of debt outstanding at the respective balance sheet dates consisted of the following: (in thousands, except rates) Interest rate Year of maturity March 31, 2022 December 31, 2021 2025 Secured Notes 6.125 % 2025 $ 518,662 $ 518,117 ABL Facility (a) Varies 2025 1,708,549 1,612,783 2028 Secured Notes 4.625 % 2028 492,730 492,490 Finance Leases Varies Varies 90,693 89,050 Total debt 2,810,634 2,712,440 Less: current portion of long-term debt 19,792 18,121 Total long-term debt $ 2,790,842 $ 2,694,319 (a) As of both March 31, 2022 and December 31, 2021, the Company had no outstanding principal borrowings on the Multicurrency Facility (defined below) and $ 5.7 million and $ 6.2 million, respectively, of related debt issuance costs. No related debt issuance costs were recorded as a direct offset against the principal borrowings on the Multicurrency Facility, and the $ 5.7 million and $ 6.2 million in excess of principal was included in other non-current assets on the condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021, respectively. Asset Backed Lending Facility On July 1, 2020, certain subsidiaries of the Company entered into an 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”) and (ii) a $ 400.0 million senior secured asset-based multicurrency revolving credit facility (the "Multicurrency Facility" together with the US Facility, the “ABL Facility”), available to be drawn in US Dollars, Canadian Dollars, British Pounds Sterling or Euros. The ABL Facility matures July 1, 2025. Borrowings under the ABL Facility bear interest at a base rate plus an applicable margin determined quarterly by reference to the Company's excess availability for the most recently completed quarter. Effective January 7, 2022, borrowings under the ABL Facility are subject to the highest applicable margin and bear interest at (i) in the case of US Dollars, at the borrower's option, either an adjusted LIBOR rate plus 2.125 % or an alternative base rate plus 1.125 %, (ii) in the case of Canadian Dollars, at the borrower's option, either a Canadian BA rate plus 2.125 % or Canadian prime rate plus 1.125 %, (iii) in the case of Euros, the EURIBOR rate plus 2.125 %, and (iv) in the case of British Pounds Sterling, the SONIA rate plus 2.125 %. At March 31, 2022, the weighted average interest rate for borrowings under the ABL Facility was 2.54 % . T he weighted average interest rate on the balance outstanding at March 31, 2022, as adjusted for the effects of the interest rate swap agreements wa s 3.16 % . Refer to Note 15 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 Line Cap. At March 31, 2022, the Line Cap was $ 2.4 billion and the Company had $ 646.9 million of available borrowing capacity under the ABL Facility, including $ 246.9 million under the US Facility and $ 400.0 million under the Multicurrency Facility. At March 31, 2022, borrowing capacity under the ABL Facility allowed for up to $ 204.9 million of letters of credit and up to $ 170.0 million of swingline loans. At March 31, 2022, letters of credit and bank guarantees carried fees of 2.25 %. The Company had issued $ 15.1 million of standby letters of credit under the ABL Facility at March 31, 2022. The Company had $ 1.7 billion outstanding principal under the ABL Facility at March 31, 2022. Debt issuance costs of $ 29.5 million were included in the carrying value of the ABL Facility at March 31, 2022. Finance Leases The Company maintains finance leases primarily related to transportation equipment. At March 31, 2022 and December 31, 2021, obligations under finance leases for certain real property and transportation related equipment were $ 90.7 million and $ 89.1 million, respectively. Refer to Note 4 for further information. The Company is in compliance with all debt covenants and restrictions for the aforementioned debt instruments as of March 31, 2022. NOTE 10 – Equity Common Stock In connection with the stock compensation vesting events and stock option exercises described in Note 14, and the warrant exercises described in Note 11, the Company issued 1,298,799 shares of Common Stock during the three months ended March 31, 2022. 14 Stock Repurchase Program A share repurchase program 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 and conditions, business, legal, accounting, and other considerations. During the three months ended March 31, 2022, the Company repurchased 2,070,054 shares of Common Stock and stock equivalents for $ 77.4 million . As of March 31, 2022, $ 879.3 million of the approved repurchase pool remained available. Accumulated Other Comprehensive Loss The changes in accumulated other comprehensive income (loss) ("AOCI"), net of tax, for the three months ended March 31, 2022 and 2021 were as follows: Three Months Ended March 31, 2022 (in thousands) Foreign currency translation Unrealized losses on hedging activities Total Balance at December 31, 2021 $ ( 25,574 ) $ ( 3,497 ) $ ( 29,071 ) Other comprehensive loss before reclassifications ( 4,074 ) ( 569 ) ( 4,643 ) Reclassifications from AOCI to income — 2,890 2,890 Balance at March 31, 2022 $ ( 29,648 ) $ ( 1,176 ) $ ( 30,824 ) Three Months Ended March 31, 2021 (in thousands) Foreign currency translation Unrealized losses on hedging activities Total Balance at December 31, 2020 $ ( 24,694 ) $ ( 12,513 ) $ ( 37,207 ) Other comprehensive loss before reclassifications 5,034 ( 760 ) 4,274 Reclassifications from AOCI to income — 2,937 2,937 Balance at March 31, 2021 $ ( 19,660 ) $ ( 10,336 ) $ ( 29,996 ) For both the three months ended March 31, 2022 and 2021 , $ 2.9 million, was reclassified from AOCI into interest expense in the condensed consolidated statements of operations related to the interest rate swap discussed in Note 15. Associated with these reclassifications, t he Company recorded tax expense of $ 0.7 million for both the three months ended March 31, 2022 and 2021. NOTE 11 – Warrants 2015 Warrants WillScot was incorporated under the name Double Eagle Acquisition Corporation ("DEAC") on June 26, 2015. As part of its initial public offering, DEAC issued warrants (the “2015 Public Warrants”) each of which entitled the holder to purchase one-half of one share of Common Stock. As of March 31, 2022, no 2015 Public Warrants remain outstanding. DEAC also issued warrants to purchase its Common Stock in a private placement concurrently with its initial public offering (the “2015 Private Warrants”) each of which entitled the holder to purchase one-half of one share of Common Stock. During the three months ended March 31, 2021, 630,000 of the 2015 Private Warrants were repurchased for $ 4.8 million and cancelled. As of March 31, 2022, no 2015 Private Warrants remain outstanding. 2018 Warrants In connection with the Modular Space Holdings ("ModSpace") acquisition in 2018, WillScot issued warrants to purchase approximately 10.0 million shares of Common Stock (the "2018 Warrants") to former shareholders of ModSpace. Each 2018 Warrant entitles the holder to purchase one share of Common Stock at an exercise price of $ 15.50 per share, subject to adjustment. The 2018 Warrants expire on November 29, 2022 . During the three months ended March 31, 2022, 11,032 of the 2018 Warrants were repurchased for $ 0.2 million and cancelled . In addition, during the three months ended March 31, 2022, 929,379 of the 2018 Warrants were exercised on a cashless basis, resulting in the issuance of 573,483 shares of common stock. At March 31, 2022, 3,137,762 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. 15 NOTE 12 – Income Taxes The Company recorded $ 15.7 million and $ 10.5 million of income tax expense for the three months ended March 31, 2022 and 2021, respectively. The Company’s effective tax rate for the three months ended March 31, 2022 and 2021 was 23.5 % and 70.2 %, respectively. The effective tax rate for the three months ended March 31, 2022 differed from the US federal statutory rate of 21% primarily due to state and provincial taxes offset by a discrete tax benefit related to employee stock vesting. The effective t ax rate for the three months ended March 31, 2021 differed from the US statutory rate of 21% due to the permanent add-back related to the mark to market accounting on the Company's warrants. NOTE 13 - 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 cash equivalents, trade receivables, trade payables, and other current liabilities approximate their carrying amounts. Based on the borrowing rates currently available for bank loans with similar terms and average maturities, the fair value of finance leases at March 31, 2022 approximate their respective book values. The following table shows the carrying amounts and fair values of financial liabilities which are disclosed, but not measured, at fair value, including their levels in the fair value hierarchy: March 31, 2022 December 31, 2021 Carrying Amount Fair Value Carrying Amount Fair Value (in thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 ABL Facility $ 1,708,549 $ — $ 1,738,000 $ — $ 1,612,783 $ — $ 1,644,500 $ — 2025 Secured Notes 518,662 — 537,593 — 518,117 — 551,835 — 2028 Secured Notes 492,730 — 488,880 — 492,490 — 515,635 — Total $ 2,719,941 $ — $ 2,764,473 $ — $ 2,623,390 $ — $ 2,711,970 $ — As of March 31, 2022, the carrying values of the ABL Facility, the 2025 Secured Notes, and the 2028 Secured Notes included $ 29.5 million, $ 7.8 million, and $ 7.3 million , respectively, of unamortized debt issuance costs, which were presented as a direct reduction of the corresponding liability. As of December 31, 2021, the carrying value of the ABL Facility, the 2025 Secured Notes, and the 2028 Secured Notes included $ 31.7 million, $ 8.4 million, and $ 7.5 million, respectively, of unamortized debt issuance costs, which were presented as a direct reduction of the corresponding liability. The carrying value of the ABL Facility, excluding debt issuance costs, approximates fair value as the interest rates are variable and reflective of current 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 classification and the fair value of derivative assets and liabilities designated as hedges in the condensed consolidated balance sheets are disclosed in Note 15. Level 3 Disclosures When the 2015 Private 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. 16 The following table presents changes in Level 3 liabilities measured at fair value for the three months ended March 31, 2021: (in thousands) 2015 Private Warrants Balance - December 31, 2020 $ 77,404 Measurement adjustment 27,056 Repurchases ( 4,679 ) Balance - March 31, 2021 $ 99,781 NOTE 14 - Stock-Based Compensation Stock-based compensation expense includes grants of stock options, time-based restricted stock units ("Time-Based RSUs") and performance-based restricted stock units ("Performance-Based RSUs," together with Time-Based RSUs, the "RSUs"). In addition, stock-based payments to non-executive directors include grants of restricted stock awards ("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. Restricted Stock Awards The following table summarizes the Company's RSA activity : 2022 2021 Number of Shares Weighted-Average Grant Date Fair Value Number of Shares Weighted-Average Grant Date Fair Value Balance December 31, 36,176 $ 29.30 57,448 $ 11.75 Balance March 31, 36,176 $ 29.30 57,448 $ 11.75 Compensation expense for RSAs recognized in SG&A expense on the condensed consolidated statements of operations was $ 0.3 million and $ 0.2 million for the three months ended March 31, 2022 and 2021, respectively. At March 31, 2022, there was $ 0.2 million of unrecognized compensation cost related to RSAs that is expected to be recognized over the remaining weighted average vesting period of 0.2 years. Time-Based RSUs The following table summarizes the Company's Time-Based RSU activity : 2022 2021 Number of Shares Weighted-Average Grant Date Fair Value Number of Shares Weighted-Average Grant Date Fair Value Balance December 31, 997,451 $ 18.54 1,325,862 $ 13.46 Granted 357,639 $ 35.53 405,505 $ 27.20 Forfeited ( 9,299 ) $ 27.20 ( 33,238 ) $ 13.62 Vested ( 420,184 ) $ 16.21 ( 344,300 ) $ 13.31 Balance March 31, 925,607 $ 26.08 1,353,829 $ 17.61 Compensation expense for Time-Based RSUs recognized in SG&A expense on the condensed consolidated statements of operations was $ 2.2 million and $ 2.1 million for the three months ended March 31, 2022 and 2021, respectively. At March 31, 2022, unrecognized compensation cost related to Time-Based RSUs totaled $ 22.1 million and is expected to be recognized over the remaining weighted average vesting period of 2.9 years . 17 Performance-Based RSUs The following table summarizes the Company's Performance-Based RSU award activity : 2022 2021 Number of Shares Weighted-Average Grant Date Fair Value Number of Shares Weighted-Average Grant Date Fair Value Balance December 31, 1,536,394 $ 26.34 593,388 $ 14.88 Granted 745,079 $ 42.34 397,981 $ 39.10 Forfeited ( 5,046 ) $ 39.10 ( 10,886 ) $ 14.70 Vested ( 267,964 ) $ 13.22 — $ — Balance March 31, 2,008,463 $ 33.99 980,483 $ 24.70 Compensation expense for Performance-Based RSUs recognized in SG&A expense on the condensed consolidated statements of operations was $ 3.8 million and $ 1.0 million for the three months ended March 31, 2022 and 2021, respectively. At March 31, 2022, unrecognized compensation cost related to Performance-Based RSUs totaled $ 55.1 million and is expected to be recognized over the remaining vesting period of 2.8 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 2022 grants, the TSR of the Company's Common Stock is compared to the TSR of the constituents in the S&P MidCap 400 Index. The target number of RSUs may be adjusted from 0 % to 200 % based on the TSR attainment levels defined by the Company's 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 above the 85 % percentile). Stock Options The following tables summarize the Company's stock option activity : WillScot Options Weighted-Average Exercise Price per Share Converted Mobile Mini Options Weighted-Average Exercise Price per Share Balance December 31 , 2021 534,188 $ 13.60 1,527,643 $ 14.66 Exercised — $ — ( 227,258 ) $ 14.58 Balance March 31, 2022 534,188 $ 13.60 1,300,385 $ 14.67 Fully vested and exercisable options, March 31, 2022 534,188 $ 13.60 1,300,385 $ 14.67 WillScot Options Weighted-Average Exercise Price per Share Converted Mobile Mini Options Weighted-Average Exercise Price per Share Balance December 31, 2020 534,188 $ 13.60 2,031,455 $ 14.78 Forfeited — $ — ( 6,240 ) $ 12.19 Exercised — $ — ( 346,247 ) $ 15.89 Balance March 31, 2021 534,188 $ 13.60 1,678,968 $ 14.57 Fully vested and exercisable options, March 31, 2021 400,641 $ 13.60 1,678,968 $ — WillScot Options Compensation expense for stock option awards, recognized in SG&A expense on the condensed consolidated statements of operations, was $ 0.2 million for each of the three months ended March 31, 2022 and 2021. 18 NOTE 15 - 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 0.39 % and 0.11 % at March 31, 2022 and December 31, 2021, 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, at the respective balance sheet dates, were as follows: (in thousands) Balance Sheet Account March 31, 2022 December 31, 2021 Cash Flow Hedges: Interest rate swap Accrued expenses $ 2,105 $ 5,259 The fair value of the interest rate swap was based on dealer quotes of market forward rates, a Level 2 input on the fair value hierarchy, and reflected the amount that the Company would receive or pay as of March 31, 2022 and December 31, 2021, respectively, 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 combined consolidated statements of operations for the three months ended March 31,: (in thousands) 2022 2021 Gain recognized in OCI $ 3,098 $ 2,844 Location of gain recognized in income Interest expense, net Interest expense, net Loss reclassified from AOCI into income (effective portion) $ 2,890 $ 2,937 NOTE 16 - 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 March 31, 2022, 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 17 - 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"). Total assets for each reportable segment are not available because the Company utilizes a centralized approach to working capital management. Transactions between reportable segments are not significant. 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 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. 19 Reportable Segments The following tables set forth certain information regarding each of the Company’s reportable segments fo r the three months ended March 31, 2022 and 2021, respectively. Three Months Ended March 31, 2022 (in thousands) NA Modular NA Storage UK Storage Tank and Pump Unallocated Costs Total Revenues: Leasing and services revenue: Leasing $ 232,978 $ 118,581 $ 20,571 $ 21,062 $ 393,192 Delivery and installation 55,634 29,904 6,467 8,326 100,331 Sales revenue: New units 4,845 942 128 682 6,597 Rental units 6,229 2,057 274 214 8,774 Total revenues 299,686 151,484 27,440 30,284 508,894 Costs: Cost of leasing and services: Leasing 63,989 16,346 4,237 4,306 88,878 Delivery and installation 49,054 21,526 3,923 7,012 81,515 Cost of sales: New units 3,257 498 64 507 4,326 Rental units 3,538 1,353 157 96 5,144 Depreciation of rental equipment 50,917 6,631 1,138 3,530 62,216 Gross profit $ 128,931 $ 105,130 $ 17,921 $ 14,833 $ 266,815 Other selected data: Adjusted EBITDA $ 103,948 $ 63,825 $ 12,544 $ 11,506 $ — $ 191,823 Selling, general and administrative expense $ 77,520 $ 47,938 $ 6,514 $ 6,857 $ 11,381 $ 150,210 Purchases of rental equipment and refurbishments $ 57,577 $ 20,171 $ 9,615 $ 7,873 $ — $ 95,236 20 Three Months Ended March 31, 2021 (in thousands) NA Modular NA Storage UK Storage Tank and Pump Unallocated Costs Total Revenues: Leasing and services revenue: Leasing $ 199,608 $ 80,351 $ 18,721 $ 16,982 $ 315,662 Delivery and installation 48,680 21,365 6,750 6,709 83,504 Sales revenue: New units 7,460 2,184 871 440 10,955 Rental units 10,476 3,848 665 213 15,202 Total revenues 266,224 107,748 27,007 24,344 425,323 Costs: Cost of leasing and services: Leasing 51,075 10,733 4,296 3,791 69,895 Delivery and installation 44,705 15,740 4,091 5,600 70,136 Cost of sales: New units 4,874 1,341 589 305 7,109 Rental units 5,848 2,522 624 111 9,105 Depreciation of rental equipment 46,720 4,793 914 3,271 55,698 Gross profit $ 113,002 $ 72,619 $ 16,493 $ 11,266 $ 213,380 Other selected data: Adjusted EBITDA $ 97,371 $ 46,322 $ 11,064 $ 8,828 $ — $ 163,585 Selling, general and administrative expense $ 62,350 $ 31,089 $ 6,343 $ 5,710 $ 11,837 $ 117,329 Purchases of rental equipment and refurbishments $ 39,135 $ 3,472 $ 6,770 $ 3,158 $ — $ 52,535 21 The following table presents a reconciliation of the Company’s Net income to Adjusted EBITDA for the three months ended March 31, 2022 and 2021, respectively: Three Months Ended March 31, (in thousands) 2022 2021 Net income $ 51,171 $ 4,447 Income tax expense 15,748 10,481 Loss on extinguishment of debt — 3,185 Fair value loss on common stock warrant liabilities — 27,207 Interest expense 30,990 29,964 Depreciation and amortization 81,820 74,022 Currency losses, net 138 36 Restructuring costs, lease impairment expense and other related charges 263 4,395 Transaction costs 20 844 Integration costs 4,087 7,342 Stock compensation expense 6,395 3,514 Other 1,191 ( 1,852 ) Adjusted EBITDA $ 191,823 $ 163,585 Included in restructuring costs for the three months ended March 31, 2021 was expense of approximately $ 1.4 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. NOTE 18 - Earnings Per Share The following table reconciles the weighted average shares outstanding for the basic calculation to the weighted average shares outstanding for the diluted calculation: Three Months Ended March 31 (in thousands) 2022 2021 Weighted average Common Shares outstanding - basic 223,491 228,293 Dilutive effect of shares outstanding Warrants 1,889 3,927 RSAs 27 51 Time-based RSUs 483 645 Performance-based RSUs 1,819 737 Stock Options 1,246 1,067 Weighted average Common Shares outstanding - dilutive 228,956 234,720 For the three months ended March 31, 2022, 555,790 shares of Performance-Based RSUs were excluded from the computation of diluted EPS because their effect would have been anti-dilutive. For the three months ended March 31, 2021, warrants representing 3,513,763 shares of Common Stock were excluded from the computation of diluted EPS because their effect would have been anti-dilutive. 22 NOTE 19 - Related Parties Related party balances included in the Company’s condensed consolidated balance sheets at March 31, 2022 and December 31, 2021, consisted of the following: (in thousands) Financial Statement Line Item March 31, 2022 December 31, 2021 Receivables due from affiliates Trade receivables, net of allowances for credit losses $ 50 $ 10 Amounts due to affiliates Accrued expenses ( 111 ) ( 49 ) Total related party liabilities, net $ ( 61 ) $ ( 39 ) Related party transactions included in the Company’s condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021, respectively, consisted of the following: Three Months Ended March 31, (in thousands) Financial Statement Line Item 2022 2021 Leasing revenue from related parties Leasing revenue $ 212 $ 106 Consulting expense to related party (a) SG&A expense ( 138 ) ( 1,901 ) Total related party expense, net $ 74 $ ( 1,795 ) (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. The Company purchased rental equipment from former related party affiliates for $ 1.8 million for the three months ended March 31, 2021. 23