What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-08-04 compared with 2022-04-28 · 371 added, 167 removed, 325 unchanged (62% of the section changed)

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MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying notes thereto, contained in Part I, Item 1 of this report.

The discussion of results of operations in this MD&A is presented on a historical basis, as of or for the three months ended March 31, 2022 or prior periods.

The discussion of results of operations in this MD&A is presented on a historical basis, as of or for the three and six months ended June 30, 2022 or prior periods.

The consolidated financial statements were prepared in conformity with accounting principles generally accepted in the US (“GAAP”).

We use certain non-GAAP financial metrics to supplement the GAAP reported results in order to highlight key operational metrics that are used by management to evaluate Company performance.

We use certain non-GAAP financial metrics to supplement the GAAP reported results to highlight key operational metrics that are used by management to evaluate Company performance.

Reconciliations of GAAP financial information to the disclosed non-GAAP measures are provided in the Reconciliation of Non-GAAP Financial Measures section.

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We are also a leading provider of specialty containment solutions in the US with approximately 13,500 tank and pump units in our fleet.

As of March 31, 2022, our branch network included approximately 280 branch locations and additional drop lots to service over 85,000 customers.

As of June 30, 2022, our branch network included approximately 280 branch locations and additional drop lots to service over 85,000 customers.

We offer our customers an extensive selection of “Ready to Work” modular space and portable storage solutions with over 164,000 modular space units and over 218,000 portable storage units in our fleet.

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Our lease revenue is highly predictable due to its recurring nature and the underlying stability and diversification of our lease portfolio.

Furthermore, given that our customers value flexibility, they consistently extend their leases or renew on a month-to-month basis such that the average effective duration of our modular space and portable storage lease portfolio, excluding seasonal portable storage units, is nearly 31 months.

We complement our core leasing business by selling both new and used units, allowing us to leverage scale, achieve purchasing benefits and redeploy capital employed in our lease fleet.

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Core to our operating model is the ability to redeploy standardized assets across end markets, as we did in 2020 and 2021 to service emerging demand in the healthcare and government sectors related to COVID-19, as well as expanded space requirements related to social distancing.

We track several market leading indicators in order to predict demand, including those related to our two largest end markets, the commercial and industrial segment and the construction segment, which collectively accounted for approximately 46% and 41% of our revenues, respectively, for the three months ended March 31, 2022.

We track several market leading indicators to predict demand, including those related to our two largest end markets, the commercial and industrial segment and the construction segment, which collectively accounted for approximately 47% and 40% of our revenues, respectively, for the three months ended June 30, 2022.

We remain focused on our core priorities of growing leasing revenues by increasing units on rent, both organically and through our consolidation strategy, delivering “Ready to Work” solutions to our customers with value added products and services ("VAPS"), and on continually improving the overall customer experience.

Significant Developments

Amendment to the ABL Facility

On June 30, 2022, the Company amended its ABL Facility to, among other things, extend the expiration date until June 30, 2027 and increase the aggregate principal amount of revolving credit facilities from $2.4 billion to $3.7 billion.

The amendment also converted the interest rate for borrowings denominated in US dollars from a LIBOR-based rate to a Term SOFR-based rate with an interest period of one month and adjusted the applicable margins.

The applicable margin for Canadian BA rate, Term SOFR, British Pounds Sterling and Euros loans decreased to 1.50%.

The applicable margin for base rate and Canadian Prime Rate loans decreased to 0.50%.

The applicable margins are subject to one step down of 0.25% based on excess availability or one step up of 0.25% based on the Company's leverage ratio.

Asset Acquisitions

During the first quarter of 2022, we acquired certain assets and liabilities, which consisted primarily of approximately 400 blast resistant modular units.

When combined with other recent acquisitions over the past three quarters, we have acquired assets and liabilities from eight regional and local storage and modular companies, consisting primarily of 15,700 storage units and 6,200 modular units.

During the second quarter of 2022, the Company acquired certain assets and liabilities of several entities, which consisted primarily of approximately 4,100 storage units and 1,000 modular un its for $46.4 million in cash, net of cash acquired.

When combined with other recent acquisitions over the past four quarters, we have acquired assets and liabilities from 12 regional and local storage and modular companies, consisting primarily of 22,300 storage units and 4,700 modular units.

Share and Warrant Repurchases

During the three months ended March 31, 2022, we repurchased and cancelled 11,032 of the 2018 Warrants for $0.2 million.

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.

During the three months ended March 31, 2022, we repurchased a total of 2,070,054 shares of Common Stock and stock equivalents for $77.4 million , including the repurchased warrants.

As of March 31, 2022, we had $879.3 million remaining of a $1 billion share repurchase authorization under our stock repurchase program.

Given the predictability of our free cash flow, we believe that repurchases will be a reoccurring capital allocation priority.

First Quarter Highlights

For the three months ended March 31, 2022, as compared to the three months ended March 31, 2021 unless otherwise noted, key drivers of our financial performance included:

During the six months ended June 30, 2022, we repurchased and cancelled 33,965 of the 2018 Warrants for $0.6 million.

In addition, for the six months ended June 30, 2022, 1,037,379 of the 2018 Warrants were exercised on a cashless basis, resulting in the issuance of 631,863 shares of common stock.

At June 30, 2022, 3,006,829 of the 2018 Warrants were outstanding.

During the six months ended June 30, 2022, we repurchased a total of 9,304,626 shares of Common Stock and stock equivalents for $326.9 million, including the repurchased warrants.

As of June 30, 2022, we had $629.8 million remaining of a $1 billion share repurchase authorization under our stock repurchase program.

In July 2022, the Company's Board of Directors approved an increase to the share repurchase program that authorizes the Company to repurchase up to $1.0 billion of its outstanding shares of Common Stock and equivalents.

Given our growth strategy and the predictability of our free cash flow, we believe that repurchases will be a reoccurring capital allocation priority.

Second Quarter Highlights

For the three months ended June 30, 2022, as compared to the three months ended June 30, 2021 unless otherwise noted, key drivers of our financial performance included:

• Total revenues increased by $120.5 million, or 26.1%, attributable to organic revenue growth levers in the business and due to the impact of acquisitions.

Leasing revenue increased $85.4 million, or 24.9%, and delivery and installation revenue increased $33.7 million, or 36.8%.

These increases were offset by decreased sales;

rental unit sales decreased $6.4 million, or 42.1%, and new unit sales revenue decreased $4.4 million, or 40.0%.

We estimate that recent acquisitions contributed approximately $12.0 million to total revenues for three months ended March 31, 2022.

Additionally, rental unit sales increased $1.3 million, or 8.6%, and new unit sales revenue increased $0.1 million, or 0.9%.

We estimate that recent acquisitions completed over the past four quarters contributed approximately $19.0 million to total revenues for the three months ended June 30, 2022.

Key leasing revenue drivers include:

– Average portable storage units on rent increased 34,877 units, or 24.0%, and average modular space units on rent increased 1,670 units, or 1.5%.

Approximately 50% of the increase in total average units on rent was driven by increases in organic delivery activity and lower return activity during 2021 and into the first quarter of 2022 as economic activity rebounded versus 2020 and the other 50% was driven by units on rent acquired as a result of recent acquisitions.

– Average modular space monthly rental rate increased $123, or 18.1%, to $802 driven by strong pricing performance across all relevant segments.

Average modular space monthly rental rates increased by $147, or 19.9%, in the NA Modular segment, by $59, or 11.0%, in the NA Storage segment, and by $24, or 5.9% in the UK Storage segment.

– Average portable storage monthly rental rate increased $20, or 14.8%, to $155 driven by increased pricing as a result of our price management tools and processes, further supported by tight supply on portable storage containers in the markets in which we operate.

– Average portable storage units on rent increased 32,056 units, or 21.1%, and average modular space units on rent increased 2,534 units, or 2.3%, across all segments.

Approximately 35% of the increase in total average units on rent was driven by increases in organic delivery activity and lower return activity during 2021 and into the first half of 2022 as economic activity rebounded versus 2020 and the other 65% was driven by units on rent added through recent acquisitions.

– Average modular space monthly rental rate increased $117, or 15.9%, to $853 driven by strong pricing performance across NA Modular and NA Storage segments.

Average modular space monthly rental rates increased by $130, or 16.2%, in the NA Modular segment and by $110, or 19.2%, in the NA Storage segment.

Average modular space monthly rental rates decreased by $29, or 6.6%, in the UK Storage segment due to the weakening of the British Pound and were up £12 or 3.8% in local currency.

– Average portable storage monthly rental rate increased $33, or 23.7%, to $172 driven by increased pricing as a result of our price management tools and processes, further supported by tight supply of portable storage containers in the markets in which we operate.

– Average utilization for portable storage units increased to 86.0% from 77.7% for the same period in 2021 driven by increased demand in 2022 as compared to the same period in 2021.

Average utilization for modular space units decreased 150 basis points ("bps") to 68.8%.

• NA Modular segment revenue, which represents 58.9% of consolidated revenue for the three months ended March 31, 2022, increased $33.5 million, or 12.6%, to $299.7 million.

• NA Modular segment revenue, which represented 59.8% of consolidated revenue for the three months ended June 30, 2022, increased $58.3 million, or 20.1%, to $347.7 million.

The increase was driven by our core leasing revenue, which grew $34.4 million, or 15.8%, due to continued growth of pricing and value added products.

Delivery and installation revenues increased $6.9 million, or 14.2%, driven by increased pricing on new deliveries and returns as compared to 2021.

The increases to leasing revenue and delivery and installation revenues were partially offset by declines in revenues for portable storage units as the result of transitioning the majority of the portable storage product business within the NA Modular segment to the NA Storage segment.

Rental unit sales decreased $4.2 million, or 40.4%, and new unit sales decreased $2.7 million, or 36.0%.

NA Modular revenue drivers for the three months ended March 31, 2022 included:

– Modular space average monthly rental rate of $884, increased 19.9% year over year representing a continuation of the long-term price optimization and VAPS penetration opportunities across our portfolio.

– Average modular space units on rent increased 212, or 0.3%, year over year driven primarily by units on rent acquired as a result of recent acquisitions.

Sequentially from December 31, 2021, modular space units on rent increased by approximately 1,800 units, or 2.1%.

Excluding units acquired from acquisitions during the quarter, sequential modular space units on rent from December 31, 2021 increased by approximately 1,400 units, or 1.7%.

– Average modular space monthly utilization decreased 60 bps to 67.0% for the three months ended March 31, 2022, as compared to the three months ended March 31, 2021.

Sequentially from the fourth quarter 2021, average modular utilization decreased 50 bps, however end of period utilization increased over 100 bps from December 31, 2021 to March 31, 2022.

• NA Storage segment revenue, which represents 29.8% of consolidated revenue for the three months ended March 31, 2022, increased $43.7 million, or 40.5%, to $151.5 million.

The increase was driven by our core leasing revenue, which grew $38.2 million, or 47.5%, due to increased units on rent driven by significant increases in delivery activity during 2021 and into the first quarter of 2022 as economic activity rebounded versus 2020, recent acquisition activity, and increased pricing.

Delivery and installation revenues increased $18.8 million, or 34.2%, driven by increased pricing on new deliveries and returns and increased volumes as compared to 2021.

Rental unit sales increased $3.4 million, or 34.0%, and new unit sales increased $1.6 million, or 23.2%, due to higher activity levels.

NA Modular revenue drivers for the three months ended June 30, 2022 included:

– Modular space average monthly rental rate of $931 increased 16.2% year over year representing a continuation of our long-term price optimization initiative and VAPS penetration opportunities across our portfolio.

– Average modular space units on rent increased 1,804, or 2.1%, year over year driven primarily by units on rent added through recent acquisitions.

– Average modular space monthly utilization decreased 10 bps to 67.6% for the three months ended June 30, 2022, as compared to the three months ended June 30, 2021 due to lower utilized fleet added through acquisitions.

• NA Storage segment revenue, which represented 30.1% of consolidated revenue for the three months ended June 30, 2022, increased $59.4 million, or 51.3%, to $175.2 million.

The increase was driven by our core leasing revenue, which grew $48.3 million, or 56.2%, due to increased units on rent driven by significant increases in delivery activity during 2021 and into the first half of 2022 as economic activity rebounded versus 2020, recent acquisition activity, and increased pricing.

Delivery and installation revenues increased $13.7 million, or 58.3%, driven by increased demand for new project deliveries, and by increased pricing on new deliveries and returns as compared to 2021.

The increases to leasing revenue and delivery and installation revenues in the NA Storage segment were also impacted

as the result of transitioning the majority of the portable storage product business within the NA Modular segment to the NA Storage segment.

Rental unit sales decreased $1.7 million, or 44.7%, and new unit sales decreased $1.3 million, or 59.1%.

NA Storage revenue drivers for the three months ended March 31, 2022 included:

• Portable storage average monthly rental rate of $166, increased 12.2% year over year as a result of our price management tools and processes, further supported by tight supply on portable storage containers in the markets in which we operate.

The increases to leasing revenue and delivery and installation revenues in the NA Storage segment were also impacted as a result of transitioning the majority of the portable storage product business within the NA Modular segment to the NA Storage segment in the third quarter of 2021.

Rental unit sales decreased $2.1 million, or 47.7%, and new unit sales decreased $0.5 million, or 26.3% given constrained container supply.

NA Storage revenue drivers for the three months ended June 30, 2022 included:

• Portable storage average monthly rental rate of $186, increased 23.2% year over year as a result of our price management tools and processes, further supported by tight supply of portable storage containers in the markets in which we operate.

Modular space average monthly rental rate of $683 increased 19.2% year over year as a result of price optimization and early benefits from increased VAPS penetration opportunities.

• Average portable storage units on rent increased 42,859, or 38.0%, year over year.

Increases in organic activity in 2021 and the first quarter of 2022 drove an increase to average portable storage units on rent of approximately 18% or 19,000 units on rent.

Of the remaining increase, approximately 15,500 units on rent was driven by units acquired from recent acquisitions, and approximately 12,000 units on rent was driven by transitioning the portable storage product business within the NA Modular segment to the NA Storage segment, which occurred in the third quarter of 2021.

Increases in organic activity in 2021 and the first half of 2022 drove an increase in average portable storage units on rent of approximately 11% or 12,000 units on rent.

Of the remaining increase, approximately 18,700 units on rent were driven by units added in recent acquisitions, and approximately 12,000 units on rent were driven by transitioning the portable storage product business within the NA Modular segment to the NA Storage segment, which occurred in the third quarter of 2021.

Combined, average portable storage units on rent for the NA Storage and NA Modular segments increased approximately 30,034 units, or 23.8%.

Average modular space units on rent increased 1,697, or 10.4%, year over year driven by increases in organic delivery activity as well as due to units on rent acquired.

• Average portable storage monthly utilization increased 930 bps to 83.2% for the three months ended March 31, 2022, as compared to the three months ended March 31, 2021.

Average modular space monthly utilization decreased 310 bps to 76.3% for three months ended March 31, 2022, as compared to the three months ended March 31, 2021.

• Generated consolidated net income of $51.2 million for the three months ended March 31, 2022 representing an increase of $46.7 million versus the three months ended March 31, 2021, and included $4.4 million of discrete costs expensed in the period related to integration activities.

Discrete costs in the period included $4.1 million of integration costs and $0.3 million of restructuring costs, lease impairment expense and other related charges.

Net Income Excluding Gain/Loss from Warrants of $51.2 million three months ended March 31, 2022 represented an increase of $19.5 million, or 61.5% as compared to the three months ended March 31, 2021.

• Generated Adjusted EBITDA of $191.8 million for the three months ended March 31, 2022, representing an increase of $28.2 million, or 17.2%, as compared to the same period in 2021.

• Average portable storage monthly utilization increased 940 bps to 85.5% for the three months ended June 30, 2022, as compared to the three months ended June 30, 2021.

Average modular space monthly utilization decreased 420 bps to 74.2% for three months ended June 30, 2022, as compared to the three months ended June 30, 2021.

• Generated consolidated net income of $73.4 million for the three months ended June 30, 2022 representing an increase of $53.0 million, or 259.8%, versus the three months ended June 30, 2021, and included $5.2 million of discrete costs expensed in the period related to integration costs.

• Generated Adjusted EBITDA of $233.3 million for the three months ended June 30, 2022, representing an increase of $57.8 million, or 32.9%, as compared to the same period in 2021.

This increase was driven primarily by increased leasing gross profit.

▪ Consolidated Adjusted EBITDA Margin was 37.7% in the first quarter of 2022 and decreased 80 bps versus prior year driven by increased variable costs as a result of higher activity levels in the current quarter and inflationary pressures across many of our cost categories.

• Generated Free Cash Flow of $54.6 million for the three months ended March 31, 2022 representing a decrease of $36.6 million as compared to the same period in 2021.

▪ Consolidated Adjusted EBITDA Margin was 40.1% in the second quarter of 2022 and increased 200 bps versus prior year driven by increased leasing and delivery and installation margins as a result of increased volumes and pricing, partially offset by increased selling, general and administrative expense.

• Generated Free Cash Flow of $69.4 million for the three months ended June 30, 2022 representing a decrease of $12.7 million as compared to the same period in 2021.

Net cash provided by operating activities increased $48.8 million to $188.3 million.

Net cash used in investing activities increased by $117.5 million to $148.4 million to support increases in delivery activity during 2022 as economic activity rebounded versus 2021, to support unit on rent growth and to support a 2022 acquisition.

• Returned $77.4 million to shareholders through stock and warrant repurchases and closed one acquisition totaling approximately 400 modular units for $57.5 million in cash during the three months ended March 31, 2022.

The predictability of our free cash flow allows us to pursue multiple capital allocation priorities opportunistically, including investing in organic opportunities we see in the market, continuing our deleveraging trajectory, opportunistically executing accretive acquisitions, and returning capital to shareholders.

Net cash used in investing activities excluding acquisitions increased by $61.4 million to $118.9 million to support increases in delivery activity during 2022 as economic activity rebounded versus 2021, and the related unit on rent growth.

• Returned $249.5 million to shareholders through stock and warrant repurchases and closed four acquisitions totaling approximately 4,100 storage units and 1,000 modular un its for $46.4 million in cash, net of cash acquired, during the three months ended June 30, 2022.

We believe the predictability of our free cash flow allows us to pursue multiple capital allocation priorities opportunistically, including investing in organic opportunities we see in the market, continuing our deleveraging trajectory, opportunistically executing accretive acquisitions, and returning capital to shareholders.

Consolidated Results of Operations

Three Months Ended March 31, 2022 Compared to the Three Months Ended March 31, 2021

Our condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021 are presented below.

Three Months Ended March 31, 2022 vs.

Three Months Ended June 30, 2022 Compared to the Three Months Ended June 30, 2021

Our condensed consolidated statements of operations for the three months ended June 30, 2022 and 2021 are presented below.

Three Months Ended June 30, 2022 vs.

2021 $ Change

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Restructuring costs (86) 6,960 (7,046)

Currency losses, net 138 36 102

Other income, net (1,309) (1,988) 679

Currency (gains) losses, net (127) 33 (160)

Other (income) expense, net (3,784) 719 (4,503)

Operating income 131,661 70,615 61,046

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Net income $ 73,376 $ 20,371 $ 53,005

Comparison of Three Months Ended March 31, 2022 and 2021

Total revenue increased $83.6 million, or 19.7%, to $508.9 million for the three months ended March 31, 2022 from $425.3 million for the three months ended March 31, 2021.

Leasing revenue increased $77.5 million, or 24.5%, as compared to the same period in 2021 driven by improved pricing and value added products, and an increase of 34,877 average portable storage units on rent driven by significant increases in delivery activity during 2021 and into the first quarter of 2022 as economic activity rebounded versus 2020 and recent acquisition activity.

Delivery and installation revenues increased $16.8 million, or 20.1%, due to increased overall activity across all of our segments.

Rental unit sales decreased $6.4 million, or 42.1%, and new unit sales decreased $4.4 million, or 40.0%.

We estimate that recent acquisitions contributed approximately $12.0 million to total revenues for three months ended March 31, 2022.

Total average units on rent for the three months ended March 31, 2022 and 2021 were 292,256 and 255,709, respectively, representing an increase of 36,547, or 14.3%.

Portable storage average units on rent increased by 34,877 units, or 24.0%, for the three months ended March 31, 2022 driven by strong demand.

Comparison of Three Months Ended June 30, 2022 and 2021

Total revenue increased $120.5 million, or 26.1%, to $581.6 million for the three months ended June 30, 2022 from $461.1 million for the three months ended June 30, 2021.

Leasing revenue increased $85.4 million, or 24.9%, as compared to the same period in 2021 driven by improved pricing and value added products, and an increase of 32,056 average portable storage units on rent driven by significant increases in delivery activity during 2021 and into the first half of 2022 as economic activity rebounded versus 2020 and recent acquisition activity.

Delivery and installation revenues increased $33.7 million, or 36.8%, due to increased overall activity.

Rental unit sales increased $1.3 million, or 8.6%, and new unit sales increased $0.1 million, or 0.9%.

We estimate that recent acquisitions completed over the past four quarters contributed approximately $19.0 million to total revenues for three months ended June 30, 2022.

Total average units on rent for the three months ended June 30, 2022 and 2021 were 296,794 and 262,204, respectively, representing an increase of 34,590, or 13.2%.

Portable storage average units on rent increased by 32,056 units, or 21.1%, for the three months ended June 30, 2022 driven by strong demand.

The average portable storage unit utilization

rate during the three months ended March 31, 2022 was 84.0%, as compared to 74.4% during the same period in 2021.

Modular space average units on rent increased 1,670 units, or 1.5%, for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021 driven primarily by acquisitions.

The average modular space unit utilization rate during the three months ended March 31, 2022 was 68.9%, as compared to 70.3% during the same period in 2021.

In total, approximately 50% of the increase in total average units on rent was driven by increases in organic delivery activity and lower return activity during 2021 and into the first quarter of 2022 and the other 50% of the growth was driven by units on rent acquired as a result of recent acquisitions.

Modular space average monthly rental rates increased 18.1% to $802 for the three months ended March 31, 2022.

rate during the three months ended June 30, 2022 was 86.0%, as compared to 77.7% during the same period in 2021.

Modular space average units on rent increased 2,534 units, or 2.3%, for the three months ended June 30, 2022 as compared to the three months ended June 30, 2021 driven primarily by acquisitions.

The average modular space unit utilization rate during the three months ended June 30, 2022 was 68.8%, as compared to 70.3% during the same period in 2021.

Modular space average monthly rental rates increased 15.9% to $853 for the three months ended June 30, 2022.

Improved pricing was achieved across all relevant segments.

Average modular space monthly rental rates increased by $147, or 19.9%, to $884 in the NA Modular segment, by $59, or 11.0%, in the NA Storage segment, and by $24, or 5.9% in the UK Storage segment.

Increases were driven by a continuation of the long-term price optimization and VAPS penetration opportunities across our NA Modular segment as well as by some early application of these same price management tools and processes across the NA Storage and UK Storage segments.

NA Storage also is beginning to see early benefits from increased VAPS penetration opportunities.

Average portable storage monthly rental rates increased 14.8% to $155 for the three months ended March 31, 2022 driven by our price management tools and processes, further supported by tight supply on portable storage containers in the markets in which we operate.

Average modular space monthly rental rates increased by $130, or 16.2%, to $931 in the NA Modular segment and by $110, or 19.2%, in the NA Storage segment.

Increases were driven by a continuation of our long-term price optimization initiative and VAPS penetration opportunities across our NA Modular segment as well as by some early application of these same price management tools and processes across the NA Storage segment.

NA Storage also began to see early benefits from increased VAPS penetration opportunities.

Average portable storage monthly rental rates increased 23.7% to $172 for the three months ended June 30, 2022 driven by our price management tools and processes, further supported by tight supply of portable storage containers in the markets in which we operate.

Gross Profit:

Our gross profit percentage was 52.4% and 50.2% for the three months ended March 31, 2022 and 2021, respectively.

Our gross profit percentage, excluding the effects of depreciation, was 64.7% and 63.3% for the three months ended March 31, 2022 and 2021, respectively.

Gross profit increased $53.5 million, or 25.1%, to $266.8 million for the three months ended March 31, 2022 from $213.4 million for the three months ended March 31, 2021.

The increase in gross profit is a result of a $58.5 million increase in leasing gross profit and increased delivery and installation gross profit of $5.4 million, partially offset by decreased new and rental unit sale margins of $4.0 million.

Increases were primarily a result of increased revenues due to favorable average monthly rental rates across both portable storage and modular space units, as well as due to increased units on rent, partially offset by increased variable costs during the period as a result of higher activity levels in the current year quarter and inflationary pressures across many of our cost categories.

Our gross profit percentage was 53.1% and 48.3% for the three months ended June 30, 2022 and 2021, respectively.

Our adjusted gross profit percentage, which excludes the effects of depreciation, was 64.7% and 62.0% for the three months ended June 30, 2022 and 2021, respectively.

Gross profit increased $86.1 million, or 38.6%, to $308.9 million for the three months ended June 30, 2022 from $222.8 million for the three months ended June 30, 2021.

The increase in gross profit was a result of a $71.5 million increase in leasing gross profit, increased delivery and installation gross profit of $17.3 million and increased new and rental unit sale margins of $1.6 million.

These increases were primarily a result of increased revenues due to favorable average monthly rental rates across both portable storage and modular space units, increased pricing on delivery and installation, as well as due to higher units on rent and increased activity levels driving higher delivery and installation revenues, partially offset by increased variable costs during the period as a result of higher activity levels in the current quarter and inflationary pressures across many of our cost categories.

Depreciation increased $4.3 million as a result of capital investments made over the past twelve months in our existing rental equipment, including the impact of recent acquisitions.

Selling, general and administrative ("SG&A") expense increased $32.9 million, or 28.0%, to $150.2 million for the three months ended March 31, 2022, compared to $117.3 million for the three months ended March 31, 2021.

Selling, general and administrative expense ("SG&A") increased $39.8 million, or 32.5%, to $162.2 million for the three months ended June 30, 2022, compared to $122.4 million for the three months ended June 30, 2021.

Employee costs excluding stock compensation increased $15.3 million, or 28.2%, driven by a 16% increase in SG&A headcount to support both organic and inorganic growth, and increased variable compensation as a result of the growth achieved.

Stock compensation expense increased $4.6 million to $9.3 million for the three months ended June 30, 2022, compared to $4.7 million for the three months ended June 30, 2021.

Integration costs decreased $2.4 million to $5.2 million for the three months ended June 30, 2022, compared to $7.6 million for the three months ended June 30, 2021.

The remaining increases were primarily driven by increased economic activity, including increased occupancy and office costs, legal and professional fees, travel expenses, and marketing cost increases.

Other Depreciation and Amortization:

Other depreciation and amortization decreased $2.5 million to $19.1 million for the three months ended June 30, 2022 compared to $21.6 million for the three months ended June 30, 2021.

The decrease was driven by a reduction in depreciation of buildings and office equipment.

Lease Impairment Expense and Other Related Charges:

Lease impairment expense and other related charges were $0 for the three months ended June 30, 2022 as compared to $0.5 million for the three months ended June 30, 2021.

The decrease resulted from fewer closed locations during the three months ended June 30, 2022 as compared to the three months ended June 30, 2021.

Restructuring Costs:

Restructuring costs were $7.0 million for the three months ended June 30, 2021 primarily driven by employee termination costs resulting from the elimination of positions due to the Merger.

Currency (Gains) Losses, net:

Currency (gains) losses, net changed by $0.1 million to a $0.1 million gain for the three months ended June 30, 2022 from $0 for the three months ended June 30, 2021.

This change was primarily attributable to the impact of foreign currency exchanges rate changes on intercompany receivables and payables denominated in a currency other than the subsidiary's functional currency.

Other (Income) Expense, net:

Other (income) expense, net was $3.8 million of income for the three months ended June 30, 2022 compared to $0.7 million of expense for the three months ended June 30, 2021.

Other income, net of $3.8 million for the three months ended June 30, 2022 was primarily related to insurance proceeds received related to Hurricane Ida in the Gulf Coast area of the United States.

Interest Expense:

Interest expense increased $4.4 million, or 15.1%, to $33.6 million for the three months ended June 30, 2022 from $29.2 million for the three months ended June 30, 2021 due to both an increase in outstanding borrowings and an increase in the weighted average interest rate for borrowings under the ABL Facility prior to the June 30, 2022 amendment to the credit facility.

See Note 9 to the condensed consolidated financial statements for further discussion of our debt.

Fair Value Loss on Common Stock Warrant Liabilities:

The fair value loss on common stock warrant liabilities was $0.6 million for the three months ended June 30, 2021, primarily due to the change in estimated fair value of common stock

warrant liabilities.

Subsequent to May 2021, no 2015 Private Warrants were outstanding, and as a result, there was no fair value loss on common stock warrant liabilities recorded for the three months ended June 30, 2022.

Loss on Extinguishment of Debt:

During the three months ended June 30, 2021, the Company redeemed 10% of the outstanding principal, $58.5 million, of its 2025 Secured Notes and recorded a loss on extinguishment of debt 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.

There was no similar transaction in the three months ended June 30, 2022.

Income Tax Expense:

Income tax expense increased $5.9 million to $24.7 million for the three months ended June 30, 2022 compared to $18.8 million for the three months ended June 30, 2021.

The increase in expense was driven by the pre-tax income increase for the three months ended June 30, 2022.

The tax expense for the three months ended June 30, 2021 included the impact of the UK statutory rate increase enactment.

Six Months Ended June 30, 2022 Compared to the Six Months Ended June 30, 2021

Our condensed consolidated statements of operations for the six months ended June 30, 2022 and 2021 are presented below.

Six Months Ended June 30, 2022 vs.

2021 $ Change

(in thousands)

Leasing and services revenue:

Leasing $ 821,812 $ 658,841 $ 162,971

Delivery and installation 225,734 175,184 50,550

Sales revenue:

New units 17,691 21,963 (4,272)

Rental units 25,299 30,437 (5,138)

Total revenues 1,090,536 886,425 204,111

Costs of leasing and services:

Leasing 185,790 152,927 32,863

Delivery and installation 175,102 147,289 27,813

Costs of sales:

New units 10,465 14,161 (3,696)

Rental units 14,099 17,267 (3,168)

Depreciation of rental equipment 129,392 118,591 10,801

Gross profit 575,688 436,190 139,498

Selling, general and administrative 312,374 239,716 72,658

Other depreciation and amortization 38,658 39,946 (1,288)

Lease impairment expense and other related charges 254 1,727 (1,473)

Restructuring costs (86) 10,102 (10,188)

Currency losses, net 11 69 (58)

Other income, net (5,093) (1,269) (3,824)

Operating income 229,570 145,899 83,671

Interest expense 64,564 59,176 5,388

Fair value loss on common stock warrant liabilities — 26,597 (26,597)

Loss on extinguishment of debt — 5,999 (5,999)

Income before income tax 165,006 54,127 110,879

Income tax expense 40,459 29,309 11,150

Net income $ 124,547 $ 24,818 $ 99,729

Comparison of Six Months Ended June 30, 2022 and 2021

Total revenue increased $204.1 million, or 23.0%, to $1,090.5 million for the six months ended June 30, 2022 from $886.4 million for the six months ended June 30, 2021.

Leasing revenue increased $163.0 million, or 24.7%, as compared to the same period in 2021 driven by an increase of 35,501 average modular space and portable storage units on rent as a result of increased economic activity, acquisitions, and improved pricing and value added products.

Delivery and installation revenues increased $50.5 million, or 28.8%, due to increased overall activity and increased pricing.

Rental unit sales decreased $5.1 million, or 16.8%, and new unit sales decreased $4.3 million, or 19.5%.

Total average units on rent for the six months ended June 30, 2022 and 2021 were 294,525 and 259,024, respectively.

Modular space average units on rent increased 2,140 units, or 1.9%, for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021.

Modular space average monthly rental rates increased 18.9% to $836 for the six months ended June 30, 2022.

Portable storage average units on rent increased by 33,361 units, or 22.4%, for the six months ended June 30, 2022.

Average portable storage monthly rental rates increased 19.7% to $164 for the six months ended June 30, 2022.

The average modular space unit utilization rate during the six months ended June 30, 2022 was 68.9%, as compared to 70.3% during the same period in 2021.

The average portable storage unit utilization rate during the six months ended June 30, 2022 was 85.0%, as compared to 76.1% during the same period in 2021.

Gross Profit:

Our gross profit percentage was 52.8% and 49.2% for the six months ended June 30, 2022 and 2021, respectively.

Our adjusted gross profit percentage, which excludes the effects of depreciation, was 64.7% and 62.6% for the six months ended June 30, 2022 and 2021, respectively.

Gross profit increased $139.5 million, or 32.0%, to $575.7 million for the six months ended June 30, 2022 from $436.2 million for the six months ended June 30, 2021.

The increase in gross profit was a result of a $130.1 million increase in leasing gross profit and increased delivery and installation gross profit of $22.7 million, partially offset by decreased new and rental unit sale margins of $2.5 million.

The increases in leasing gross profit and delivery and installation gross profit were driven by favorable average monthly rental rates on modular space and portable storage units, increased pricing on delivery and installation, as well as due to higher units on rent and increased activity levels driving higher delivery and installation revenues.

Depreciation increased to $129.4 million as a result of fleet acquired through acquisitions and capital investments made in our existing rental equipment.

SG&A increased $72.7 million, or 30.3%, to $312.4 million for the six months ended June 30, 2022, compared to $239.7 million for the six months ended June 30, 2021.

Employee costs excluding stock compensation increased $32.0 million, or 29.5%, driven by recent investments in new roles to fund both organic and inorganic growth, and increased variable compensation as a result of the growth achieved.

Integration costs decreased $3.2 million to $4.1 million for the three months ended March 31, 2022, compared to $7.3 million for the three months ended March 31, 2021, and stock compensation expense increased $2.9 million to $6.4 million for the three months ended March 31, 2022, compared to $3.5 million for the three months ended March 31, 2021.

The remaining increases were driven primarily by occupancy and office costs, legal and professional fees, travel expenses, and marketing cost increases.

Stock compensation expense increased $7.5 million to $15.7 million for the six months ended June 30, 2022, compared to $8.2 million for the six months ended June 30, 2021.

Integration costs decreased $5.7 million to $9.3 million for the six months ended June 30, 2022, compared to $15.0 million for the six months ended June 30, 2021.

The remaining increases were primarily driven by increased economic activity, including increased occupancy and office costs, legal and professional fees, travel expenses and marketing cost increases.

Other Depreciation and Amortization:

Other depreciation and amortization increased $1.3 million to $19.6 million for the three months ended March 31, 2022 compared to $18.3 million for the three months ended March 31, 2021.

The increase was driven by increased depreciation as a result of our 2021 investments in our enterprise resource planning system and other infrastructure investments across our branch network.

Other depreciation and amortization decreased $1.2 million to $38.7 million for the six months ended June 30, 2022 compared to $39.9 million for the six months ended June 30, 2021.

Lease Impairment Expense and Other Related Charges:

Lease impairment expense and other related charges was $0.3 million for the three months ended March 31, 2022 as compared to $1.3 million for the three months ended March 31, 2021.

The decrease resulted from fewer closed locations during the three months ended March 31, 2022 as compared to the three months ended March 31, 2021.

Lease impairment expense and other related charges was $0.3 million for the six months ended June 30, 2022 as compared to $1.7 million for the six months ended June 30, 2021.

Restructuring Costs:

Restructuring costs were $3.1 million for the three months ended March 31, 2021 primarily driven by employee termination costs resulting from the elimination of positions due to the Merger.

In the six months ended June 30, 2021, the Company recorded $10.1 million of restructuring costs primarily as a result of employee termination costs from the elimination of positions due to the Merger.

Employee termination costs of $5.8 million were settled in stock, which is non-cash, non-recurring and not included in stock compensation expense.

Currency Losses, Net:

Currency losses, net changed by $0.1 million to a $0.1 million loss for the three months ended March 31, 2022 from $0 for the three months ended March 31, 2021.

Currency losses, net decreased by $0.1 million to $0 for the six months ended June 30, 2022 from $0.1 million for the six months ended June 30, 2021.

This decrease was primarily attributable to the impact of foreign currency exchanges rate changes on intercompany receivables and payables denominated in a currency other than the subsidiary's functional currency.

Other Income, Net:

Other income, net was $1.3 million for the three months ended March 31, 2022 compared to $2.0 million for the three months ended March 31, 2021.

Other income, net of $1.3 million for the three months ended March 31, 2022 is primarily related to gains incurred related to Hurricane Ida in the Gulf Coast area of the United States, and other income, net of $2.0 million for the three months ended March 31, 2021 was primarily the result of gains recorded on the sale of real estate during the period.

Other income, net was $5.1 million for the six months ended June 30, 2022 compared to $1.3 million for the six months ended June 30, 2021.

The increase was primarily attributable to insurance proceeds received related to Hurricane Ida in the Gulf Coast area of the United States.

Interest Expense:

Interest expense increased $1.0 million, or 3.3%, to $31.0 million for the three months ended March 31, 2022 from $30.0 million for the three months ended March 31, 2021.

Interest expense increased $5.4 million to $64.6 million for the six months ended June 30, 2022 from $59.2 million for the six months ended June 30, 2021 due to both an increase in outstanding borrowings and an increase in the weighted average interest rate for borrowings under the ABL Facility prior to the June 30, 2022 amendment to the credit facility.

See Note 9 to the condensed consolidated financial statements for further discussion of our debt.

Fair Value Loss on Common Stock Warrant Liabilities:

The fair value loss on common stock warrant liabilities was $27.2 million for the three months ended March 31, 2021, primarily due to the change in estimated fair value of common stock warrant liabilities.

At March 31, 2022, no 2015 Public or Private Warrants were outstanding, and as a result, there was no fair value loss on common stock warrant liabilities recorded for the three months ended March 31, 2022.

The fair value loss on common stock warrant liabilities was $26.6 million for the six months ended June 30, 2021, primarily due to the change in estimated fair value of common stock warrant liabilities.

Subsequent to May 2021, no 2015 Private Warrants were outstanding, and as a result, there was no fair value loss on common stock warrant liabilities recorded for the six months ended June 30, 2022.

Loss on Extinguishment of Debt:

During the three months ended March 31, 2021, using cash on hand and borrowings on the ABL Facility, the Company redeemed 10% of the outstanding principal, $65.0 million, of its 2025 Secured Notes and recorded a loss on extinguishment of debt 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.

During the six months ended June 30, 2021, the Company redeemed $123.5 million of the outstanding principal of its 2025 Secured Notes and recorded a loss on extinguishment of debt of $6.0 million.

There was no similar transaction in the six months ended June 30, 2022.

Income Tax Expense:

Income tax expense increased $5.2 million to $15.7 million for the three months ended March 31, 2022 compared to $10.5 million for the three months ended March 31, 2021.

The increase in expense was driven by the pre-tax income increase for the three months ended March 31, 2022.

Income tax expense increased $11.2 million to expense of $40.5 million for the six months ended June 30, 2022 compared to $29.3 million for the six months ended June 30, 2021.

The increase in expense was driven by the pre-tax income increase for the six months ended June 30, 2022.

The tax expense for the six months ended June 30, 2021 included the impact of the UK statutory rate increase enactment.

Business Segment Results

7 unchanged sentences

This adjustment was not made to the historical segment results of prior periods, given its relative immateriality.

The following tables and discussion summarize our reportable segment financial information for the three months ended March 31, 2022 and 2021.

Comparison of Three Months Ended March 31, 2022 and 2021

Three Months Ended March 31, 2022

The following tables and discussion summarize our reportable segment financial information for the three and six months ended June 30, 2022 and 2021.

Comparison of Three Months Ended June 30, 2022 and 2021

Three Months Ended June 30, 2022

(in thousands, except for units on rent and rates)

11 unchanged sentences

Average tank and pump solutions rental fleet utilization based on original equipment cost N/A N/A N/A 75.7 % 75.7 %

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

(in thousands, except for units on rent and rates) NA Modular NA Storage UK Storage Tank and Pump Total

10 unchanged sentences

Average tank and pump solutions rental fleet utilization based on original equipment cost N/A N/A N/A 71.2 % 71.2 %

Total revenue increased $33.5 million, or 12.6%, to $299.7 million for the three months ended March 31, 2022 from $266.2 million for the three months ended March 31, 2021.

The increase was primarily the result of a $33.4 million, or 16.7%, increase in leasing revenue, and a $6.9 million, or 14.2% increase in modular delivery and installation revenue.

The increases to leasing revenue and delivery and installation revenues were partially offset by a decrease of $4.2 million, or 40.4%, in rental unit sales revenue and a $2.7 million, or 36.0%, decrease in new unit sales.

Average modular space monthly rental rates increased 19.9% for the three months ended March 31, 2022 to $884 driven by the continuation of the long-term price optimization and VAPS penetration opportunities across our portfolio.

Total revenue increased $58.3 million, or 20.1%, to $347.7 million for the three months ended June 30, 2022 from $289.4 million for the three months ended June 30, 2021.

The increase was primarily the result of a $34.4 million, or 15.8%, increase in leasing revenue, an $18.8 million, or 34.2%, increase in modular delivery and installation revenue, a $3.4 million, or 34.0%, increase in rental unit sales revenue and a $1.6 million, or 23.2%, increase in new unit sales.

The increases to leasing revenue and delivery and installation revenues were partially offset by declines in revenues for portable storage units as a result of transitioning the majority of the portable storage product business within the NA Modular segment to the NA

Storage segment during the third quarter of 2021.

Approximately 12,000 units were transferred during the third quarter of 2021 to the NA Storage segment, reallocating approximately $5.0 million of revenue from the NA Modular segment to the NA Storage segment relative to the three months ended June 30, 2021.

Average modular space monthly rental rates increased 16.2% for the three months ended June 30, 2022 to $931 driven by the continuation of our long-term price optimization initiative and VAPS penetration opportunities across our portfolio.

Average modular space units on rent increased by 1,804 units, or 2.1%, year over year.

Gross Profit:

Gross profit increased $15.9 million, or 14.1%, to $128.9 million for the three months ended March 31, 2022 from $113.0 million for the three months ended March 31, 2021.

The increase in gross profit was driven by higher leasing gross profit, which increased $20.5 million, or 13.8%, driven from improved pricing including VAPS.

The increase in gross profit from leasing for the three months ended March 31, 2022 was further complemented by a $2.5 million increase in delivery and installation gross profit.

These increases were partially offset by a $2.0 million decrease in rental unit sales gross profit, a $1.1 million decrease in new unit sales gross profit, and a $4.2 million increase in depreciation of rental equipment related to capital investments made in our existing rental equipment and additional depreciation from recent acquisitions.

Gross profit increased $37.7 million, or 32.5%, to $153.8 million for the three months ended June 30, 2022 from $116.1 million for the three months ended June 30, 2021.

Gross profit percentage increased 410 bps to 44.2%.

The increase in gross profit was driven by higher leasing gross profit, which increased $27.9 million, or 17.9%, driven by improved pricing including VAPS.

The increase in gross profit from leasing for the three months ended June 30, 2022 was further complemented by an $11.0 million increase in delivery and installation gross profit, a $1.6 million increase in rental unit sales gross profit, and a $1.8 million increase in new unit sales gross profit.

These increases were partially offset by a $4.6 million increase in depreciation of rental equipment related to capital investments made in our existing rental equipment and additional depreciation from recent acquisitions.

Adjusted EBITDA:

Adjusted EBITDA increased $6.5 million, or 6.7%, to $103.9 million for the three months ended March 31, 2022 from $97.4 million for the three months ended March 31, 2021.

Adjusted EBITDA increased $24.4 million, or 23.6%, to $127.9 million for the three months ended June 30, 2022 from $103.5 million for the three months ended June 30, 2021.

Adjusted EBITDA margin percentage increased 100 bps to 36.8%.

The increase was driven by higher leasing gross profit discussed above.

SG&A, excluding discrete items, increased $15.1 million, or 24.2%, for the three months ended March 31, 2022, as compared to the three months ended March 31, 2021 driven primarily by increased costs for personnel, including commissions and other variable compensation, the return of more normal travel expenses, and increased subscription and professional fees.

SG&A, excluding discrete items, increased $22.0 million, or 34.7%, for the three months ended June 30, 2022, as compared to the three months ended June 30, 2021 driven primarily by increased costs for personnel, including commissions and other variable compensation, the return of more normal travel expenses, and increased subscription, legal and professional fees.

Capital Expenditures for Rental Equipment:

Purchases of rental equipment and refurbishments increased $18.5 million, or 47.3%, to $57.6 million for the three months ended March 31, 2022 from $39.1 million for the three months ended March 31, 2021.

Purchases of rental equipment and refurbishments increased $33.1 million, or 67.0%, to $82.5 million for the three months ended June 30, 2022 from $49.4 million for the three months ended June 30, 2021.

Net CAPEX increased $34.5 million, or 90.1%, to $72.8 million.

These increases were driven by increased refurbishments and VAPS purchases as well as by an $11.8 million reduction in proceeds from the sale of property, plant and equipment primarily related to real estate sales that occurred during the three months ended March 31, 2021.

Total revenue increased $43.7 million, or 40.5%, to $151.5 million for the three months ended March 31, 2022 from $107.8 million for the three months ended March 31, 2021.

These increases were driven by increased refurbishments, and increased new fleet and VAPS purchases.

Total revenue increased $59.4 million, or 51.3%, to $175.2 million for the three months ended June 30, 2022 from $115.8 million for the three months ended June 30, 2021.

Leasing revenues increased $48.3 million in the current quarter compared to the prior-year quarter.

Modular space average units on rent increased 10.4% and average modular space monthly rental rates increased 19.2% year-over-year driven primarily by increased pricing on new deliveries.

Portable storage units on rent increased 46,516, or 44.0%, driven by increased organic economic activity (approximately 19,000 units on rent increase), acquisitions (approximately 15,500 units on rent increase), and due to the transfer of approximately 12,000 portable storage units on rent from the NA Modular segment, which occurred in the third quarter of 2021.

Portable storage units on rent increased 42,859, or 38.0%, driven by increased organic economic activity (approximately 12,000 units on rent increase) and acquisitions (approximately 18,700 units on rent increase), and due to the transfer of approximately 12,000 portable storage units on rent from the NA Modular segment, which occurred in the third quarter of 2021.

Combined, average portable storage units on rent for the NA Storage and NA Modular segments increased approximately 30,034 units, or 23.8%.

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Gross Profit:

Gross profit increased by $32.5 million, or 44.8%, to $105.1 million for the three months ended March 31, 2022 compared to $72.6 million for the three months ended March 31, 2021.

Gross profit increased by $45.7 million, or 60.4%, to $121.4 million for the three months ended June 30, 2022 compared to $75.7 million for the three months ended June 30, 2021.

Gross profit percentage increased 390 bps to 69.3%.

Gross profit on leasing activity increased by $40.7 million year-over-year driven both by increased volume and pricing as described above.

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Adjusted EBITDA:

Adjusted EBITDA increased $17.5 million, or 37.8%, to $63.8 million for the three months ended March 31, 2022 from $46.3 million for the three months ended March 31, 2021 and the margin contracted to 42.1% from 43.0%.

Adjusted EBITDA increased $31.3 million, or 63.2%, to $80.8 million for the three months ended June 30, 2022 from $49.5 million for the three months ended June 30, 2021.

Adjusted EBITDA margin percentage increased 332 bps to 46.1%.

The increase in Adjusted EBITDA was driven primarily by increased leasing gross profit as described above, partially offset by increased SG&A.

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Capital Expenditures for Rental Equipment:

Purchases of rental equipment and refurbishments increased $16.7 million, or 477.1%, to $20.2 million for the three months ended March 31, 2022 from $3.5 million for the three months ended March 31, 2021.

Net CAPEX increased $19.3 million, or 393.9%, to $24.2 million.

These increases were driven primarily by increased purchases of portable storage containers during the period to support organic growth, as well as by reduced proceeds from sales of rental fleet given high utilization.

Total revenue increased $0.4 million, or 1.5%, to $27.4 million for the three months ended March 31, 2022 from $27.0 million for the three months ended March 31, 2021.

Purchases of rental equipment and refurbishments increased $25.5 million, or 289.8%, to $34.3 million for the three months ended June 30, 2022 from $8.8 million for the three months ended June 30, 2021.

Net CAPEX decreased $1.8 million, or 6.5%, to $25.7 million.

The increase in purchases of rental equipment and refurbishments was driven primarily by increased purchases of portable storage containers during the period to support organic growth.

Total revenue decreased $1.7 million, or 6.0%, to $26.7 million for the three months ended June 30, 2022 from $28.4 million for the three months ended June 30, 2021.

In local currency total revenues increased 4.4%.

Leasing revenues increased $1.9 million in the current quarter compared to the prior-year quarter.

Modular space average units on rent decreased 7.3%, while portable storage units on rent increased 11.4%.

Average monthly rental rates for modular space units and portable storage units increased 5.9% and 14.6% year-over-year, respectively, including the impacts of currency fluctuations.

Leasing revenues decreased $0.8 million in the current quarter compared to the prior-year quarter.

Modular space average units on

rent decreased 10.3%, while portable storage units on rent increased 7.9%.

Average monthly rental rates for modular space units decreased 6.6% and average monthly rental rates for portable storage units increased 5.7% year-over-year, including the impacts of currency fluctuations.

In local currency, average monthly rental rates for modular space units increased 3.8% and average monthly rental rates for portable storage increased 17.5% year-over-year.

Delivery and installation revenues decreased $0.5 million year-over-year.

1 unchanged sentence

Gross Profit:

Gross profit increased $1.4 million, or 8.5%, for the three months ended March 31, 2022 to $17.9 million from $16.5 million for the three months ended March 31, 2021.

In local currency, gross profit increased 11.7%.

This increase was driven by rental rate growth and strategic cost management.

Gross profit decreased $0.8 million, or 4.5%, for the three months ended June 30, 2022 to $17.1 million from $17.9 million for the three months ended June 30, 2021.

In local currency, gross profit increased $0.8 million, or 6.0%.

Adjusted EBITDA:

Adjusted EBITDA increased $1.4 million, or 12.6%, to $12.5 million for three months ended March 31, 2022 from $11.1 million for the three months ended March 31, 2021 and the margin expanded to 45.7% from 41.0%.

The increase results primarily from the favorable gross profit discussed above, partially offset by increased SG&A of $0.2 million driven by increased costs for personnel, including commissions and other variable compensation.

Adjusted EBITDA decreased $0.1 million, or 0.8%, to $12.2 million for three months ended June 30, 2022 from $12.3 million for the three months ended June 30, 2021 and the Adjusted EBITDA margin percentage expanded to 45.7% from 41.0%.

The decrease results primarily from the unfavorable gross profit discussed above, partially offset by decreased SG&A of $0.9 million.

In local currency, Adjusted EBITDA increased $0.9 million, or 10.4%.

Capital Expenditures for Rental Equipment:

Purchases of rental equipment and refurbishments increased $2.8 million, or 41.2%, to $9.6 million for the three months ended March 31, 2022 from $6.8 million for the three months ended March 31, 2021.

Net CAPEX increased $6.8 million, or 147.8%, to $11.4 million.

Total revenue increased $6.0 million, or 24.7%, to $30.3 million for the three months ended March 31, 2022 from $24.3 million for the three months ended March 31, 2021.

These increases were driven by increased average original rental cost ("OEC") rental fleet utilization, which increased 840 bps to 75.8% for the three months ended March 31, 2022 from 67.4% for the three months ended March 31, 2021.

Purchases of rental equipment and refurbishments increased $3.4 million, or 81.0%, to $7.6 million for the three months ended June 30, 2022 from $4.2 million for the three months ended June 30, 2021.

Net CAPEX decreased $1.7 million, or 27.9%, to $4.4 million.

The increase in purchases of rental equipment and refurbishments was driven primarily by increased purchases of portable storage containers during the period to support organic growth.

Total revenue increased $4.6 million, or 16.7%, to $32.1 million for the three months ended June 30, 2022 from $27.5 million for the three months ended June 30, 2021.

This increase was driven by increased average original equipment cost ("OEC") rental fleet utilization, which increased 450 bps to 75.7% for the three months ended June 30, 2022 from 71.2% for the three months ended June 30, 2021.

Gross Profit:

Gross profit increased $3.5 million, or 31.0%, for the three months ended March 31, 2022 to $14.8 million from $11.3 million for the three months ended March 31, 2021.

Gross profit increased $3.6 million, or 27.7%, for the three months ended June 30, 2022 to $16.6 million from $13.0 million for the three months ended June 30, 2021.

This increase was driven by increased gross profit for leasing activity, which increased $3.3 million driven by the increased revenue as discussed above.

Adjusted EBITDA:

Adjusted EBITDA increased $2.7 million, or 30.7%, to $11.5 million for the three months ended March 31, 2022 from $8.8 million for the three months ended March 31, 2021 and the margin expanded to 38.0% from 36.3%.

The increase in Adjusted EBITDA was driven by the increased gross profit discussed above, partially offset by a $1.2 million increase in SG&A expense driven primarily by increased personnel costs, including commissions and other variable compensation.

Adjusted EBITDA increased $2.4 million, or 23.8%, to $12.5 million for the three months ended June 30, 2022 from $10.1 million for the three months ended June 30, 2021 and the Adjusted EBITDA margin percentage expanded to 38.8% from 36.7%.

The increase in Adjusted EBITDA was driven by the increased gross profit discussed above, partially offset by a $0.7 million increase in SG&A driven primarily by increased personnel costs, including commissions and other variable compensation.

Capital Expenditures for Rental Equipment:

Purchases of rental equipment and refurbishments increased $4.7 million, or 146.9%, to $7.9 million for the three months ended March 31, 2022 from $3.2 million for the three months ended March 31, 2021.

Purchases of rental equipment and refurbishments increased $2.9 million, or 100.0%, to $5.8 million for the three months ended June 30, 2022 from $2.9 million for the three months ended June 30, 2021.

Net CAPEX increased $2.6 million, or 86.7%, to $5.6 million.

These increases were driven primarily by increased purchases of rental fleet during the period to support organic growth given high utilization, as well as by reduced proceeds from sales of rental fleet given high utilization.

Comparison of Six Months Ended June 30, 2022 and 2021

Six Months Ended June 30, 2022

(in thousands, except for units on rent and rates)

NA Modular NA Storage UK Storage Tank and Pump Total

Revenue $ 647,356 $ 326,704 $ 54,106 $ 62,370 $ 1,090,536

Gross profit $ 282,739 $ 226,534 $ 35,010 $ 31,405 $ 575,688

Adjusted EBITDA $ 231,829 $ 144,587 $ 24,774 $ 23,968 $ 425,158

Capital expenditures for rental equipment $ 140,059 $ 54,453 $ 17,219 $ 13,658 $ 225,389

Average modular space units on rent 85,783 18,308 8,420 — — 112,511

Average modular space utilization rate 67.3 % 75.3 % 72.3 % — % 68.9 %

Average modular space monthly rental rate $ 908 $ 638 $ 418 $ — $ 836

Average portable storage units on rent 469 154,023 27,522 — 182,014

Average portable storage utilization rate 53.1 % 84.4 % 89.8 % — % 85.0 %

Average portable storage monthly rental rate $ 186 $ 176 $ 93 $ — $ 164

Average tank and pump solutions rental fleet utilization based on original equipment cost N/A N/A N/A 75.8 % 75.8 %

Six Months Ended June 30, 2021

(in thousands, except for units on rent and rates)

NA Modular NA Storage UK Storage Tank and Pump Total

Revenue $ 555,606 $ 223,542 $ 55,439 $ 51,838 $ 886,425

Gross profit $ 229,138 $ 148,340 $ 34,430 $ 24,282 $ 436,190

Adjusted EBITDA $ 200,916 $ 95,848 $ 23,392 $ 18,924 $ 339,080

Capital expenditures for rental equipment $ 88,499 $ 12,245 $ 10,996 $ 6,077 $ 117,817

Average modular space units on rent 84,737 16,399 9,235 — 110,371

Average modular space utilization rate 67.6 % 78.9 % 84.1 % — % 70.3 %

Average modular space monthly rental rate $ 769 $ 554 $ 420 $ — $ 703

Average portable storage units on rent 14,186 109,355 25,112 — 148,653

Average portable storage utilization rate 64.8 % 75.0 % 90.5 % — % 76.1 %

Average portable storage monthly rental rate $ 128 $ 150 $ 85 $ — $ 137

Average tank and pump solutions rental fleet utilization based on original equipment cost N/A N/A N/A 69.3 % 69.3 %

Total revenue increased $91.8 million, or 16.5%, to $647.4 million for the six months ended June 30, 2022 from $555.6 million for the six months ended June 30, 2021.

The increase was primarily the result of a $67.8 million, or 16.3%, increase in leasing revenue, a $25.8 million, or 24.9% increase in delivery and installation revenues, offset by a $0.8 million, or 3.9%, decrease in rental unit sales revenue.

Approximately 12,000 units were transferred during the third quarter to the NA Storage segment, reallocating approximately $5.0 million of revenue from NA Modular segment to the NA Storage segment relative to the first six months of 2021.

Average modular space monthly rental rates increased 18.1% for the six months ended June 30, 2022 to $908 driven by the continuation of our long-term price optimization initiative and VAPS penetration opportunities across our portfolio.

In addition to improved pricing, average modular space units on rent increased by 1,046 units, or 1.2%, year over year.

Gross Profit:

Gross profit increased $53.6 million, or 23.4%, to $282.7 million for the six months ended June 30, 2022 from $229.1 million for the six months ended June 30, 2021.

The increase in gross profit was driven by higher leasing gross profit, which increased $48.3 million, or 15.9%, driven by improved pricing including VAPS and increased modular unit on rent volumes, partially offset by the transfer of portable storage units to the NA Storage segment discussed above, and a $13.7 million increase in delivery and installation gross profit driven by volumes and improved pricing.

These increases were further complemented by a $0.9 million increase in new sales gross profit.

These increases were partially offset by a $0.3 million decrease in rental unit sales gross profit and an $8.8 million increase in depreciation of rental equipment related to capital investments made in our existing rental equipment.

Adjusted EBITDA:

Adjusted EBITDA increased $30.9 million, or 15.4%, to $231.8 million for the six months ended June 30, 2022 from $200.9 million for the six months ended June 30, 2021.

The increase was driven by higher leasing gross profit discussed above.

SG&A, excluding discrete items, increased $37.1 million, or 29.5%, for the six months ended June 30, 2022, as compared to the six months ended June 30, 2021 primarily driven by employee and occupancy costs.

Capital Expenditures for Rental Equipment:

Purchases of rental equipment and refurbishments increased $51.6 million, or 58.3%, to $140.1 million for the six months ended June 30, 2022 from $88.5 million for the six months ended June 30, 2021

Total revenue increased $103.2 million, or 46.2%, to $326.7 million for the six months ended June 30, 2022 from $223.5 million for the six months ended June 30, 2021.

The increase was primarily the result of a $86.6 million, or 52.1%, increase in leasing revenue, a $22.2 million, or 49.4% increase in delivery and installation revenues, and a $3.9 million, or 47.0%, decrease in rental unit sales revenue.

Average portable storage monthly rental rates increased 17.3% for the six months ended June 30, 2022 to $176.

Average portable storage units on rent increased by 44,668 units, or 40.8%, year over year, driven by increased organic economic activity (approximately average 15,600 units on rent increase) and acquisitions (approximately average 17,100 units on rent increase), and due to the transfer of approximately 12,000 portable storage units on rent from the NA Modular segment, which occurred in the third quarter of 2021.

Average modular space monthly rental rates increased 15.2% for the six months ended June 30, 2022 to $638 driven by the continuation of our long-term price

optimization initiative and VAPS penetration opportunities across our portfolio.

Average modular space units on rent increased by 1,909 units, or 11.6%, year over year.

Gross Profit:

Gross profit increased $78.2 million, or 52.7%, to $226.5 million for the six months ended June 30, 2022 from $148.3 million for the six months ended June 30, 2021.

Gross profit on leasing activity increased by $73.4 million year-over-year driven both by increased volume and pricing as described above.

For delivery and installation, gross profit increased $9.6 million.

Sales gross profit decreased by $2.5 million to $2.3 million.

Adjusted EBITDA:

Adjusted EBITDA increased $48.8 million, or 50.9%, to $144.6 million for the six months ended June 30, 2022 from $95.8 million for the six months ended June 30, 2021.

The increase was driven by higher leasing gross profit discussed above.

SG&A, excluding discrete items, increased $31.6 million, or 48.8%, for the six months ended June 30, 2022, as compared to the June 30, 2021 primarily driven by employee and occupancy costs.

Capital Expenditures for Rental Equipment:

Purchases of rental equipment and refurbishments increased $42.3 million, or 346.7%, to $54.5 million for the six months ended June 30, 2022 from $12.2 million for the six months ended June 30, 2021.

The increase in purchases of rental equipment and refurbishments was driven primarily by increased purchases of portable storage containers during the period to support organic growth.

Total revenue decreased $1.3 million, or 2.3%, to $54.1 million for the six months ended June 30, 2022 from $55.4 million for the six months ended June 30, 2021.

The decrease was primarily the result of a $0.8 million, or 6.3%, decrease in delivery and installation revenues and a $1.6 million, or 72.7%, decrease in new unit sales revenue, partially offset by a $1.0 million, or 2.5%, increase in leasing revenue.

Average portable storage monthly rental rates increased 9.4% for the six months ended June 30, 2022 to $93.

Average portable storage units on rent increased by 2,410 units, or 9.6%, year over year.

Average modular space monthly rental rates decreased 0.5% for the six months ended June 30, 2022 to $418.

Average modular space units on rent decreased by 815 units, or 8.8%, year over year.

In local currency, average portable storage monthly rental rates increased 17.5% for the six months ended June 30, 2022 to £74, and average modular space monthly rental rates increased 3.8% for the six months ended June 30, 2022 to £325.

Gross Profit:

Gross profit increased $0.6 million, or 1.7%, to $35.0 million for the six months ended June 30, 2022 from $34.4 million for the six months ended June 30, 2021.

Gross profit on leasing activity increased by $1.6 million year-over-year driven both by increased volume and pricing as described above.

For delivery and installation, gross profit decreased $0.7 million.

Sales gross profit decreased by $0.3 million to $0.5 million.

Adjusted EBITDA:

Adjusted EBITDA increased $1.4 million, or 6.0%, to $24.8 million for the six months ended June 30, 2022 from $23.4 million for the six months ended June 30, 2021.

The increase was driven by higher leasing gross profit discussed above.

SG&A, excluding discrete items, decreased $0.8 million, or 6.0%, for the six months ended June 30, 2022, as compared to the June 30, 2021 primarily driven by employee and occupancy costs.

Capital Expenditures for Rental Equipment:

Purchases of rental equipment and refurbishments increased $6.2 million, or 56.4%, to $17.2 million for the six months ended June 30, 2022 from $11.0 million for the six months ended June 30, 2021.

Total revenue increased $10.6 million, or 20.5%, to $62.4 million for the six months ended June 30, 2022 from $51.8 million for the six months ended June 30, 2021.

This increase was driven by increased average original equipment cost ("OEC") rental fleet utilization, which increased 650 bps to 75.8% for the six months ended June 30, 2022 from 69.3% for the six months ended June 30, 2021.

Gross Profit:

Gross profit increased $7.1 million, or 29.2%, to $31.4 million for the six months ended June 30, 2022 from $24.3 million for the six months ended June 30, 2021.

Gross profit on leasing activity increased by $6.8 million year-over-year driven by both increased volume and pricing.

For delivery and installation, gross profit increased $0.3 million.

Sales gross profit decreased by $0.2 million to $0.6 million.

Adjusted EBITDA:

Adjusted EBITDA increased $5.0 million, or 26.2%, to $24.0 million for the six months ended June 30, 2022 from $19.0 million for the six months ended June 30, 2021.

The increase in Adjusted EBITDA was driven by the increased gross profit discussed above, partially offset by a $1.9 million increase in SG&A expense driven primarily by increased personnel costs, including commissions and other variable compensation.

Capital Expenditures for Rental Equipment:

Purchases of rental equipment and refurbishments increased $7.6 million, or 124.6%, to $13.7 million for the six months ended June 30, 2022 from $6.1 million for the six months ended June 30, 2021.

Reconciliation of Non-GAAP Financial Measures

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The following table provides unaudited reconciliations of Net income to Adjusted EBITDA:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in thousands) 2022 2021 2022 2021

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Loss on extinguishment of debt — 2,814 — 5,999

Fair value loss on common stock warrant liabilities — 27,207

Fair value (gain) loss on common stock warrant liabilities — (610) — 26,597

Interest expense 33,574 29,212 64,564 59,176

Depreciation and amortization 86,230 84,515 168,050 158,537

Currency losses, net 138 36

Currency (gains) losses, net (127) 33 11 69

Restructuring costs, lease impairment expense and other related charges (95) 7,434 168 11,829

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The following table provides unaudited reconciliations of Net income to Net Income Excluding Gain/Loss from Warrants:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2022 2021 2022 2021

Net income $ 73,376 $ 20,371 $ 124,547 $ 24,818

Fair value loss on common stock warrant liabilities — 27,207

Fair value (gain) loss on common stock warrant liabilities — (610) — 26,597

Net Income Excluding Gain/Loss from Warrants $ 73,376 $ 19,761 $ 124,547 $ 51,415

Adjusted EBITDA Margin

We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue.

Management believes that the presentation of Adjusted EBITDA Margin provides useful information to investors regarding the performance of our business.

The following table provides an unaudited reconciliation of Adjusted EBITDA Margin:

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2022 2021 2022 2021

Adjusted EBITDA (A) $ 233,335 $ 175,495 $ 425,158 $ 339,080

Revenue (B) 581,642 461,102 1,090,536 886,425

Adjusted EBITDA Margin (A/B) 40.1 % 38.1 % 39.0 % 38.3 %

Net Income (C) $ 73,376 $ 20,371 $ 124,547 $ 24,818

Net Income Margin % (C/B) 12.6 % 4.4 % 11.4 % 2.8 %

Adjusted Gross Profit and Adjusted Gross Profit Percentage

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The following table provides unaudited reconciliations of gross profit to Adjusted Gross Profit and Adjusted Gross Profit Percentage:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in thousands) 2022 2021 2022 2021

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The following table provides unaudited reconciliations of Net CAPEX:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in thousands) 2022 2021 2022 2021

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WillScot Mobile Mini is a holding company that derives its operating cash flow from its operating subsidiaries.

Our principal sources of liquidity include cash generated by operating activities from our subsidiaries, borrowings under the ABL Facility, and sales of equity and debt securities.

Our principal sources of liquidity include cash generated by operating activities from our subsidiaries, borrowings under the ABL Facility (as defined below), and sales of equity and debt securities.

We believe that our liquidity sources and operating cash flows are sufficient to address our operating, debt service and capital requirements over the next twelve months.

We have consistently accessed the debt and equity capital markets both opportunistically and as necessary to support the growth of our business, desired leverage levels, and other capital allocation priorities.

We believe we have ample liquidity in the ABL Facility and are generating substantial free cash flow, which together support both organic operations and other capital allocation priorities as they arise.

We believe we have ample

liquidity in the ABL Facility and are generating substantial free cash flow, which together support both organic operations and other capital allocation priorities as they arise.

We continue to review available acquisition opportunities with the awareness that any such acquisition may require us to incur additional debt to finance the acquisition and/or to issue shares of our Common Stock or other equity securities as acquisition consideration or as part of an overall financing plan.

In addition, we will continue to evaluate alternatives to optimize our capital structure, which could include the issuance or repurchase of additional unsecured and secured debt, equity securities and/or equity-linked securities.

There can be no assurance as to the timing of any such issuance.

There can be no assurance as to the timing of any such issuance or repurchase.

If we obtain additional capital by issuing equity, the interests of our existing stockholders will be diluted.

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The borrowing bases are a function of, among other things, the value of the assets in the relevant collateral pool.

At March 31, 2022, we had $646.9 million of available borrowing capacity under the ABL Facility.

Cash Flow Comparison of the Three Months Ended March 31, 2022 and 2021

At June 30, 2022, we had $2.0 billion outstanding principal and $1.0 billion of available borrowing capacity under the ABL Facility.

Cash Flow Comparison for the Six Months Ended June 30, 2022 and 2021

Significant factors driving our liquidity include cash flows generated from operating activities and capital expenditures.

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The following summarizes our change in cash and cash equivalents for the periods presented:

Three Months Ended

Six Months Ended

(in thousands)

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Cash Flows from Operating Activities

Cash provided by operating activities for the three months ended March 31, 2022 was $145.5 million as compared to $122.1 million for the three months ended March 31, 2021, an increase of $23.4 million.

The increase was due to an increase of $34.2 million of net income, adjusted for non-cash items, partially offset by a decrease of $11.7 million in the net movements of the operating assets and liabilities.

Cash provided by operating activities for the six months ended June 30, 2022 was $333.9 million as compared to $261.6 million for the six months ended June 30, 2021, an increase of $72.3 million, or 27.6%.

The increase was due to an increase of $87.6 million of net income, adjusted for non-cash items, partially offset by a decrease of $15.3 million in the net changes in operating assets and liabilities.

Cash Flows from Investing Activities

Cash used in investing activities for the three months ended March 31, 2022 was $148.4 million as compared to $30.9 million for the three months ended March 31, 2021, an increase of $117.5 million.

The increase in cash used in investing activities was driven by a $57.5 million increase in cash used in an acquisition, a $42.7 million increase in cash used for the purchase of rental equipment and refurbishments, and a $3.2 million increase in cash used for the purchase of property, plant and equipment, a $0.6 million decrease in proceeds from the sale of rental equipment and a $13.5 million decrease in proceeds from sale of property, plant and equipment.

Cash used in investing activities for the six months ended June 30, 2022 was $313.7 million as compared to $88.4 million for the six months ended June 30, 2021, an increase of $225.3 million.

The increase in cash used in investing activities was driven by a $107.6 million increase in cash used for the purchase of rental equipment and refurbishments, a $103.9 million increase in cash used in acquisitions, net of cash acquired, a $15.7 million decrease in proceeds from sale of property, plant and equipment, and a $2.8 million increase in cash used for the purchase of property, plant and equipment, partially offset by a $4.7 million increase in proceeds from the sale of rental equipment.

Cash Flows from Financing Activities

Cash provided by financing activities for the three months ended March 31, 2022 was $1.6 million as compared to $89.2 million cash used in financing activities for the three months ended March 31, 2021, an increase of $90.8 million.

The increase is primarily due to a decrease of $107.1 million in repayment of borrowings, partially offset by a $9.5 million decrease in receipts from borrowing.

Cash used in financing activities for the six months ended June 30, 2022 was $20.8 million as compared to $182.9 million for the six months ended June 30, 2021, a decrease of $162.1 million.

The decrease was primarily due to a $219.6 million decrease in repayment of borrowings and a $66.7 million increase in receipts from borrowings, partially offset by a $104.9 million increase in the repurchase and cancellation of common stock and warrants.

Free Cash Flow

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Three Months Ended

June 30, Six Months Ended

(in thousands) 2022 2021 2022 2021

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Free Cash Flow $ 69,418 $ 82,056 $ 124,042 $ 173,216

Free Cash Flow for the three months ended March 31, 2022 was an inflow of $54.6 million as compared to an inflow of $91.2 million for the three months ended March 31, 2021, a decrease in Free Cash Flow of $36.6 million.

Free Cash Flow decreased year over year principally as a result of a $42.7 million increase in cash used in the purchase of rental equipment and refurbishments, a $13.4 million decrease in the proceeds from the sale of property, plant and equipment and a $0.6 million decrease in the proceeds from the sale of rental equipment.

These were partially offset by a $23.4 million increase in cash provided by operating activities driven by increased profitability in the business.

The $145.5 million in cash provided by operating activities for the three months ended March 31, 2022 was returned to shareholders through stock and warrant repurchases and cancellations and reinvested into the business to support the purchase of rental equipment, including VAPS, and refurbishments, as well as inorganic growth through mergers and acquisitions.

Cash flow from operations increased by $72.3 million or 27.6% for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021.

Cash used in investing activities excluding acquisitions increased by $121.4 million to support unit on rent and VAPS growth with leasing revenues up 24.7% year-over-year.

Free cash flow of $124.0 million for the six months ended June 30, 2022 was down $49.2 million as compared to the six months ended June 30, 2021 which is consistent with the countercyclicality of free cash flow in our business.

Material cash requirements

The Company’s material cash requirements include the following contractual and other obligations:

The Company has outstanding debt related to its ABL Facility, 2025 Secured Notes, 2028 Secured Notes, and finance leases, totaling $2.9 billion as of March 31, 2022, $19.8 million of which is obligated to be repaid within the next twelve months.

The Company has outstanding debt related to its ABL Facility, 2025 Secured Notes, 2028 Secured Notes, and finance leases, totaling $3.1 billion as of June 30, 2022, $20.7 million of which is obligated to be repaid within the next twelve months.

Refer to Note 9 for further information regarding outstanding debt.

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The Company has commitments for future minimum rental payments relating to operating leases, which are primarily for equipment and office space.

As of March 31, 2022, the Company had lease obligations of $282.2 million, with $62.0 million payable within the next twelve months.

As of June 30, 2022, the Company had lease obligations of $275.9 million, with $60.4 million payable within the next twelve months.

In addition to the aforementioned cash requirements, the Company has a Share Repurchase Program authorized by the Board of Directors which allows the Company to repurchase up to $1.0 billion of outstanding shares of Common Stock and equivalents.

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For a complete discussion of our significant critical accounting policies, see the “Critical Accounting Policies and Estimates” section in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2021 (the "2021 Annual Report on Form 10-K").

There were no significant changes to our critical accounting policies during the three months ended March 31, 2022.

There were no significant changes to our critical accounting policies during the six months ended June 30, 2022.

Recently Issued Accounting Standards

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis