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Item 1A. Risk Factors

2023-02-22 compared with 2022-02-25 · 192 added, 249 removed, 240 unchanged (65% of the section changed)

Risks Relating to Our Business

We are subject to various laws and regulations, including recent pronouncements related to laws and regulations governing antitrust, climate related disclosures, cybersecurity, privacy, government contracts, anti-corruption and the environment.

Obligations and liabilities under these laws and regulations may materially harm our business.

Our operations are subject to an array of governmental regulations in each of the jurisdictions in which we operate.

For example, our activities in the US are subject to regulation by several federal and state government agencies, including the Occupational Safety and Health Administration, and by federal and state laws.

Our operations and activities in other jurisdictions are subject to similar governmental regulations.

Similar to conventionally constructed buildings, the modular business industry is also subject to regulations by multiple governmental agencies in each jurisdiction relating to, among others, environmental, zoning and building standards, and health, safety and transportation matters.

These regulations affect our Storage Solutions customers, most of whom use our storage units to store their goods on their own properties for various lengths of time.

If local zoning laws or planning permission regulations in one or more of our markets no longer allow our units to be stored on customers' sites, our business in that market will suffer.

Noncompliance with applicable regulations, implementation of new regulations or modifications to existing regulations may increase costs of compliance, require a termination of certain activities or otherwise materially adversely affect our business, results of operations and financial condition.

Recent Pronouncements

Recent pronouncements by the SEC, Federal Trade Commission, Department of Justice, and from the state of California, among others, related to antitrust, climate related disclosures, cybersecurity and privacy could have the impact of increasing Company compliance costs, increasing potential liability to the Company as a result of frivolous lawsuits, or place the Company in a position of not knowing when or if the laws are settled in a particular area in order for the Company to effectively comply.

US Government Contract Laws and Regulations

Our government customers include the US government, which means we are subject to various statutes and regulations applicable to doing business with the US government.

These types of contracts customarily contain provisions that give the US government substantial rights and remedies, many of which are not typically found in commercial contracts and which are unfavorable to contractors, including provisions that allow the government to unilaterally terminate or modify our federal government contracts, in whole or in part, at the government’s convenience.

Under general principles of US government contracting law, if the government terminates a contract for convenience, the terminated company may generally recover only its incurred or committed costs and settlement expenses and profit on work completed prior to the termination.

If the government terminates a contract for default, the defaulting company may be liable for any extra costs incurred by the government in procuring undelivered items from another source.

In addition, US government contracts and grants normally contain additional requirements that may increase our costs of doing business, reduce our profits, and expose us to liability for failure to comply with these terms and conditions.

These requirements include, for example:

(a) specialized disclosure and accounting requirements unique to US government contracts;

(b) financial and compliance audits that may result in potential liability for price adjustments, recoupment of government funds after such funds have been spent, civil and criminal penalties, or administrative sanctions such as suspension or debarment from doing business with the US government;

and (d) mandatory socioeconomic compliance requirements, including labor requirements, non-discrimination and affirmative action programs and environmental compliance requirements.

If we fail to comply with these requirements, our contracts may be subject to termination, and we may be subject to financial and/or other liability under our contracts or under the Federal Civil False Claims Act (the "False Claims Act").

The False Claims Act’s “whistleblower” provisions allow private individuals, including present and former employees, to sue on behalf of the US government.

The False Claims Act statute provides for treble damages and other penalties, and if our operations are found to be in violation of the False Claims Act, we could face other adverse action, including suspension or prohibition from doing business with the US government.

Any penalties, damages, fines, suspension or damages could adversely affect our ability to operate our business and our financial results.

Department of Transportation and Titling Regulations

We operate in the US pursuant to operating authority granted by the US Department of Transportation (the “DOT”).

Our drivers must comply with the safety and fitness regulations of the DOT, including those relating to drug and alcohol testing and hours of service.

Such matters as equipment weight and dimensions are also subject to government regulations.

Our safety record could be ranked poorly compared to peer firms.

A poor safety ranking may result in the loss of customers or

difficulty attracting and retaining qualified drivers which could affect our results of operations.

Should additional rules be enacted in the future, compliance with such rules could result in additional costs.

Additionally, we are subject to, and may be required to expend funds to ensure compliance with a variety of laws, regulations, and ordinances related to unit titling, stamping, and registration rules and procedures, and notification requirements to agencies and law enforcement relating to unit transfers, particularly when acquiring new assets and operations.

Many of these laws and regulations are frequently complex and subject to interpretation, and failure to comply with present or future regulations or changes in interpretations of existing laws or regulations may result in impairment or suspension of our operations and the imposition of penalties and other liabilities.

At various times, we may be involved in disputes with local governmental officials regarding the development and/or operation of our units.

We may be subject to similar types of regulations by governmental agencies in new markets.

In addition, new legal or regulatory requirements or changes in existing requirements may delay or increase the cost of acquiring and integrating new units, which may adversely impact our ability to conduct business.

Anti-Corruption Laws and Regulations

We are subject to various anti-corruption laws that prohibit improper payments or offers of payments to foreign governments and their officials by a US person for the purpose of obtaining or retaining business.

We operate in countries that may present a more corruptible business environment than the US.

Such activities create the risk of unauthorized payments or offers of payments by one of our employees or agents that could be in violation of various laws, including the FCPA.

We have implemented safeguards and policies to discourage these practices by our employees and agents.

However, existing safeguards and any future improvements may prove to be ineffective and employees or agents may engage in conduct for which we might be held responsible.

If employees violate our policies or we fail to maintain adequate record-keeping and internal accounting practices to accurately record our transactions, we may be subject to regulatory sanctions.

Violations of the FCPA or other anti-corruption laws may result in severe criminal or civil sanctions and penalties, including suspension or debarment from US government contracting, and we may be subject to other liabilities which could materially adversely affect our business, results of operations and financial condition.

We are also subject to similar anti-corruption laws in other jurisdictions.

Environmental Laws and Regulations

We are subject to a variety of national, state, regional and local environmental laws and regulations.

Among other things, these laws and regulations impose limitations and prohibitions on the discharge and emission of, and establish standards for the use, disposal and management of, regulated materials and waste and impose liabilities for the costs of investigating and cleaning up, and damages resulting from, present and past spills, disposals or other releases of hazardous substances or materials.

In the ordinary course of business, we use and generate substances that are regulated or may be hazardous under environmental laws.

We have an inherent risk of liability under environmental laws and regulations, both with respect to ongoing operations and with respect to contamination that may have occurred in the past on our properties or as a result of our operations.

While we endeavor to comply with all regulatory requirements, from time to time, our operations or conditions on properties that we have acquired have resulted in liabilities under these environmental laws.

We may in the future incur material costs to comply with environmental laws or sustain material liabilities from claims concerning noncompliance or contamination.

Under certain environmental laws, we could be held responsible for all of the costs relating to any contamination at, or migration to or from, our or our predecessors' past or present facilities.

These laws often impose liability even if the owner, operator or lessor did not know of, or was not responsible for, the release of such hazardous substances.

While we maintain certain related insurance coverages, we have no reserves for any such liabilities.

We are also required to obtain environmental permits from governmental authorities for certain of our operations.

If we violate or fail to obtain or comply with these laws, regulations, or permits, we could be fined or otherwise sanctioned by regulators.

We could also become liable if employees or other parties are improperly exposed to hazardous materials.

We cannot predict what environmental legislation or regulations will be enacted in the future, how existing or future laws or regulations will be administered or interpreted, or what environmental conditions may be found to exist at our facilities or at third party sites for which we may be liable.

Enactment of stricter laws or regulations, stricter interpretations of existing laws and regulations or the requirement to undertake the investigation or remediation of currently unknown environmental contamination at sites we own or third-party sites may require us to make additional expenditures, some of which could be material.

Responding to governmental investigations or other actions may be both time-consuming and disruptive to our operations and could divert the attention of our management and key personnel from our business operations.

The impact of these and other investigations and lawsuits could have a material adverse effect on our financial statements.

We may be unable to successfully acquire and integrate new operations, which could cause our business to suffer.

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Additionally, we cannot predict if or when acquisitions will be completed, and we may face significant competition for acquisition targets.

Acquisitions involve numerous risks, including (a) difficulties in integrating the operations, technologies, management information systems, products and personnel of the acquired companies;

Acquisitions involve numerous risks, including (a) difficulties in integrating the operations, technologies,

management information systems, products and personnel of the acquired companies;

(b) diversion of management’s attention from normal daily operations of the business;

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and (i) loss of key customers or suppliers.

In connection with acquisitions, we may assume liabilities or acquire damaged assets, some of which may be unknown to us at the time of such acquisitions.

We assess the condition and regulatory certification of an acquired fleet as part of our acquisition due diligence.

In some cases, fleet condition or regulatory certification may be difficult to determine due to the fleet being on lease at the time of acquisition and/or inadequate certification records.

Fleet acquisitions may therefore result in a rectification cost that we may not have factored into the acquisition price, impacting our ability to deploy units and the profitability of the fleet we acquired.

Acquisitions are inherently risky, and we cannot provide assurance that any future acquisitions will be successful or will not materially adversely affect our business, results of operations and financial condition.

If we do not manage new markets effectively, some of our new branches and acquisitions may lose money or fail, and we may have to close unprofitable branches.

We must continue to take actions to realize the combined cost synergies that we forecast for the acquisition.

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Any of these events could cause reductions in our earnings per share, impact our ability to borrow funds under our credit facility, decrease or delay the accretive effect of the acquisitions that we anticipated and negatively impact our stock price.

If we do not manage new markets effectively, some of our new branches and acquisitions may lose money or fail, and we may have to close unprofitable branches.

Closing a branch in such circumstances would likely result in additional expenses that would cause our operating results to suffer.

To manage growth successfully, we will need to continue to identify additional qualified managers and employees to integrate acquisitions within our established operating, financial and other internal procedures and controls.

The efficient integration of any acquired operations will also require the integration of technology infrastructure systems and a transition to new systems when required.

An inability to integrate these systems following an acquisition, or an inability to scale our existing infrastructure or systems to support such acquired operations, might impact our ability to respond effectively to changing customer expectations, manage our business, scale our solutions effectively or impact our customer service levels, which could put us at a competitive disadvantage and negatively impact our financial results.

We will also need to effectively motivate, train and manage our employees.

Failure to successfully integrate recent and future acquisitions and new branches into existing operations could materially adversely affect our results of operations and financial condition.

Global or local economic movements could have a material adverse effect on our business.

Our business, which operates in the US, Canada, Mexico and the UK, may be negatively impacted by economic movements or downturns in the local markets in which we operate or global markets generally.

Our business, which operates in the US, Canada, and Mexico, may be negatively impacted by economic movements or downturns in the local markets in which we operate or global markets generally.

These adverse economic conditions may reduce commercial activity, cause disruption and extreme volatility in global financial markets and increase rates of default and bankruptcy.

Reduced commercial activity has historically resulted in reduced demand for our products and services.

For example, reduced commercial activity in the construction, energy and natural resources sectors in certain markets in which we operate, particularly the US and Canada, has negatively impacted our business in the past.

Reduced economic activity has at times historically resulted in reduced demand for our products and services.

Disruptions in financial markets could negatively impact the ability of our customers to pay their obligations to us in a timely manner and increase our counterparty risk.

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If we are not able to adjust our business in a timely and effective manner to changing economic conditions, our business, results of operations and financial condition may be materially adversely affected.

Moreover, the level of demand for our products and services is sensitive to the level of demand within various sectors, particularly the commercial and industrial, construction, education, energy and natural resources, and government end

Each of these sectors is influenced not only by the state of the general global economy, but also by a number of more specific factors as well.

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A decline or slowed growth in any of these sectors or geographic regions could result in reduced demand for our products and services, which may materially adversely affect our business, results of operations and financial condition.

Our operations are exposed to operational, economic, political and regulatory risks.

We operate in the US, Canada, Mexico and the UK.

For the year ended December 31, 2021, approximately 87.2%, 6.1%, 0.8%, and 5.9% of our revenue was generated in the US, Canada, Mexico and the UK, respectively.

For the year ended December 31, 2021, approximately 61.4%, 26.8%, 5.9%, and 5.9% of our revenue was derived from our NA Modular Solutions business, NA Storage Solutions business, UK Storage Solutions business and Tank and Pump Solutions business, respectively.

Our operations in any of these countries could be affected by foreign and domestic economic, political and regulatory risks, including (a) regulatory requirements tha t are subject to change and that could restrict our ability to assemble, lease or sell products;

(b) inflation, recession, and fluctuations in foreign currency exchange and interest rates;

(d) compliance with applicable antitrust and other regulatory rules and regulations relating to potential acquisitions;

(e) different local product preferences and product requirements;

(f) pressures on management time and attention due to the complexities of overseeing multi-national operations;

(g) challenges in maintaining staffing;

(h) different labor regulations and the potential impact of collective bargaining;

(i) potentially adverse consequences from changes in, or interpretations of, tax laws;

(j) potentially adverse consequences from change in, or interpretation of, securities laws and other financial reporting regulations;

(k) political and economic instability;

(l) enforcement of remedies in various jurisdictions;

(m) the risk that the business partners upon whom we depend for technical assistance will not perform as expected;

(n) compliance with applicable export control laws and economic sanctions laws and regulations;

(o) price controls and ownership regulations;

(p) obstacles to the repatriation of earnings and cash;

(q ) differences in business practices that may result in violation of Company policies, including, but not limited to, bribery and collusive practices;

and (r) reduced protection for intellectual property in some countries.

Additionally, any sustained international conflict may have a negative economic or other impact on the markets we serve, our operations and financial results.

These a nd other risks may materially adversely affect our business, results of operations and financial condition.

Our operations may be adversely impacted by public health crises such as the global pandemic associated with COVID-19.

We are subject to risks related to public health crises, such as the global pandemic associated with COVID-19, which could significantly impact general commercial activity related to our supply chain and customer base and which could have a material adverse effect on our business, financial condition, or result of operations.

To the extent that the COVID-19 pandemic continues or worsens, or any future public health crisis emerges, governments may impose additional restrictions, including work restrictions, and supply chains may be interrupted, slowed, or rendered inoperable.

As a result, it may be challenging to obtain and process raw materials and labor resources necessary to support our business needs.

We may need to recognize material charges in future periods for impairments of our rental equipment, property, plant, and equipment and/or intangible assets.

Furthermore, our employees, suppliers or customers could become ill, quarantined or otherwise unable to work and/or travel due to health reasons or governmental restrictions.

The COVID-19 global pandemic has affected and may continue to affect our industry and the industries in which our customers operate, and there may be an adverse impact on customer demand for our rentals.

We also have been, and will be, adversely impacted by project delays, early returns of equipment on rent with customers and payment delay, or non-payment, by customers who are significantly impacted by COVID-19.

If our customers’ businesses continue to be affected, they might delay or reduce purchases from or payments to us, which could adversely affect our business, financial condition or results of operations.

In addition, increased volatility and diminished expectations for the global economy, coupled with the prospect of decreased business and consumer confidence and increased unemployment resulting from the COVID-19 pandemic or any future public health crises may precipitate an economic slowdown and recession.

If the economic climate deteriorates, our ability to continue to grow our business organically or through additional acquisitions and integration of acquired businesses, as well as the financial condition of customers, suppliers and lenders, could be adversely affected, resulting in a negative impact on the business, financial condition, results of operations and cash flows of our Company.

The situation surrounding COVID-19 remains fluid.

A lack of public acceptance of vaccines could lead people to continue to self-isolate and not participate in the economy at pre-pandemic levels for a prolonged period of time.

Further, even if vaccines are widely accepted, there can be no assurance that the vaccine will ultimately be successful in limiting or stopping the spread of COVID-19 and its variants.

Therefore, it remains difficult to predict the potential impact of the virus on our results of operations and financial position.

The potential effects of COVID-19 also could impact many of our risk factors, as discussed herein, including, but not limited to our exposure to operational, economic, political and regulatory risks;

risks related to global or local economic movements;

changes in trade policies;

and labor disruptions.

However, given the evolving health, economic, social, and governmental environments, the potential impact that COVID-19 could have on our risk factors that are further

described herein remains uncertain.

Any future pandemics could similarly negatively impact our operations and financial results.

Several governmental entities have enacted or may enact enforceable government mandates with respect to employee vaccinations against COVID-19.

Any requirement to mandate COVID-19 vaccination of our workforce or require our unvaccinated employees to be tested weekly could result in employee attrition and difficulty securing future labor needs, which could adversely affect our business, financial condition or results of operations.

Any failure of our management information systems could disrupt our business operations both in the field and back office, which could result in decreased lease or sale revenue and increase overhead costs.

Any failure of our management information systems could disrupt our business operations, which could result in decreased lease or sale revenue and increase overhead costs.

We rely heavily on information systems across our operations.

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However, because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may be difficult to detect for long periods of time, we may be unable to anticipate these techniques or implement adequate preventative measures.

In addition, because our systems contain information about individuals and other businesses, the failure to maintain the security of the data we hold, whether the result of our own error or the malfeasance or errors of others, could harm our reputation or give rise to legal liabilities leading to lower revenue, increased costs, regulatory sanctions and other potential material adverse effects on our business, results of operations and financial condition.

Effective management of our fleet is vital to our business, and our failure to properly safeguard, design, manufacture, repair, maintain and manage our fleet could harm our business and reduce our operating results and cash flows.

Our modular space and portable storage units have long economic lives and managing our fleet is a critical element to our leasing business.

Rental equipment asset management requires designing and building long-lived products that anticipate customer needs and changes in legislation, regulations, building codes and local permitting in the various markets in which we operate.

In addition, we must cost-effectively maintain and repair our fleet to maximize the economic life of the products and the proceeds we receive from product sales.

As the needs of our customers change, we may incur costs to relocate or retrofit our assets to better meet shifts in demand.

If the distribution of our assets is not aligned with regional demand, we may be unable to take advantage of sales and leasing opportunities in certain regions, despite excess inventory in other regions.

If we are not able to successfully manage our lease assets, our business, results of operations and financial condition may be materially adversely affected.

If we do not appropriately manage the design, manufacture, repair and maintenance of our product fleet, or if we delay or defer such repair or maintenance or suffer unexpected losses of rental equipment due to theft or obsolescence, we may be required to incur impairment charges for equipment that is beyond economic repair or incur significant capital expenditures to acquire new rental equipment to serve demand.

These failures may also result in personal injury or property damage claims, including claims based on poor indoor air quality and termination of leases or contracts by customers.

Costs of contract performance, potential litigation and profits lost from termination could materially adversely affect our future operating results and cash flows.

If a significant number of leased units are returned in a short period of time, a large supply of units would need to be remarketed.

Our failure to effectively remarket a large influx of units returning from leases could materially adversely affect our financial performance.

addition, because our systems contain information about individuals and other businesses, the failure to maintain the security of the data we hold, whether the result of our own error or the malfeasance or errors of others, could harm our reputation or give rise to legal liabilities leading to lower revenue, increased costs, regulatory sanctions and other potential material adverse effects on our business, results of operations and financial condition.

Trade policies and changes in trade policies, including the imposition of tariffs, their enforcement and downstream consequences, may materially adversely affect our business, results of operations, and outlook.

Tariffs and/or other developments with respect to trade policies, trade agreements and government regulations may materially, adversely affect our business, financial condition and results of operations.

For example, the US government has imposed tariffs on steel, aluminum and lumber imports from certain countries, which could result in increased costs to us for these materials.

From time to time, the US government has historically imposed and may in the future impose tariffs on steel, aluminum and lumber imports from certain countries, which could result in increased costs to us for these materials.

Without limitation, (i) tariffs currently in place and (ii) the imposition by the federal government of new tariffs on imports to the US could materially increase (a) the cost of our products that we are offering for sale or lease, (b) the cost of certain products that we source from foreign manufacturers, and (c) the cost of certain raw materials or products that we utilize.

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Although we actively monitor our procurement policies and practices to avoid undue reliance on foreign-sourced goods subject to tariffs, when practicable, such developments may materially adversely affect our business, financial condition and results of operations.

We face significant competition in the modular space, portable storage and tank and pump industries.

We face significant competition in the modular space and portable storage industries.

Such competition may result in pricing pressure or an inability to maintain or grow our market share.

If we are unable to compete successfully, we could lose customers and our revenue and profitability could decline.

Although our competition varies significantly by market, the modular space, portable storage, and the tank and pump solutions industries are highly competitive, in general, and the portable storage and tank and pump solutions industries are highly fragmented.

Although our competition varies significantly by market, the modular space and portable storage industries are highly competitive and highly fragmented.

We compete on the basis of a number of factors, including customer relationships, product quality and availability, delivery speed, VAPS and service capabilities, pricing, and overall ease of doing business.

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If this should occur, our business, financial condition, results of operations and cash flows may be materially adversely affected.

Changes in state building codes could adversely impact our ability to remarket our buildings, which could have a material adverse impact on our business, financial condition and results of operations.

Building codes are generally reviewed, debated and, in certain cases, modified on a national level every three years as an ongoing effort to keep the regulations current and improve the life, safety and welfare of the buildings' occupants.

All aspects of a given code are subject to change, including, but not limited to, such items as structural specifications for earthquake safety, energy efficiency and environmental standards, fire and life safety, transportation, lighting and noise limits.

On occasion, state agencies have undertaken studies of indoor air quality and noise levels with a focus on permanent and modular classrooms.

This process leads to a systematic change that requires engagement in the process and recognition that past methods will not always be accepted.

New modular construction is very similar to conventional construction where newer codes and regulations generally increase cost.

New governmental regulations may increase our costs to acquire new rental equipment, as well as increase our costs to refurbish existing equipment.

Compliance with building codes and regulations entails risk as state and local government authorities do not necessarily interpret building codes and regulations in a consistent manner, particularly where applicable regulations may be unclear and subject to interpretation.

These regulations often provide broad discretion to governmental authorities that oversee these matters, which can result in unanticipated delays or increases in the cost of compliance in particular markets.

The construction and modular industries have developed many “best practices” which are constantly evolving.

Some of our peers and competitors may adopt practices that are more or less stringent than ours.

When, and if, regulators clarify regulatory standards, the effect of the clarification may be to impose rules on our business and practices retroactively, at which time we may not be in compliance with such regulations and we may be required to incur costly remediation.

If we are unable to pass

these increased costs on to our customers, our business, financial condition, operating cash flows and results of operations could be negatively impacted.

Our operations face foreign currency exchange rate exposure, which may materially adversely affect our business, results of operations and financial condition.

We hold assets, incur liabilities, earn revenue and pay expenses in certain currencies other than the US Dollar, primarily the Canadian Dollar, the Mexican Peso and the British Pound.

Our consolidated financial results are denominated in US Dollars, and therefore, during times of a strengthening US Dollar, our reported revenue in non-US Dollar jurisdictions will be reduced because the local currency will translate into fewer US Dollars.

Revenue and expenses are translated into US Dollars at the average exchange rate for the period.

In addition, the assets and liabilities of our non-US Dollar subsidiaries are translated into US Dollars at the exchange rates in effect on the balance sheet date.

Foreign currency exchange adjustments arising from certain intercompany obligations with and between our domestic companies and our foreign subsidiaries are marked-to-market and recorded as a non-cash loss or gain in each of our financial periods in our consolidated statements of operations.

Accordingly, changes in currency exchange rates will cause our foreign currency translation adjustment in the consolidated statements of comprehensive income (loss) to fluctuate.

In addition, fluctuations in foreign currency exchange rates will impact the amount of US Dollars we receive when we repatriate funds from our non-US Dollar operations.

Fluctuations in interest rates and commodity prices may also materially adversely affect our revenues, results of operations and cash flows.

Although we have converted a portion of our senior secured revolving credit facility borrowings into fixed-rate debt through interest rate swaps, a significant portion of our borrowings under the facility remain variable rate debt.

Although we have fixed-rate debt through our Senior Secured Notes, our borrowings under our senior secured revolving credit facility remain variable rate debt.

Fluctuations in interest rates may negatively impact the amount of interest payments, as well as our ability to refinance portions of our existing debt in the future at attractive interest rates.

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These changes could impact our future earnings and cash flows, assuming other factors are held constant.

Significant increases in the costs and restrictions on the availability of raw materials and labor could increase our operating costs significantly and harm our profitability.

We incur labor costs and purchase raw materials, including steel, lumber, siding and roofing, paint, glass, fuel and other parts and materials to perform periodic repairs, modifications and refurbishments to maintain physical conditions of our units and in connection with get-ready, delivery and installation of our units.

The volume, timing and mix of such work may vary quarter-to-quarter and year-to-year.

Generally, increases in labor and raw material costs will increase the acquisition costs of new units and also increase the repair and maintenance costs of our fleet.

We also maintain a truck fleet to deliver units to and return units from our customers, the cost of which is sensitive to maintenance and fuel costs and rental rates on leased equipment.

During periods of rising prices for labor or raw materials, and in particular, when the prices increase rapidly or to levels significantly higher than normal, we may incur significant increases in our acquisition costs for new units and higher operating costs that we may not be able to recoup from customers through changes in pricing, which could materially adversely affect our business, results of operations and financial condition.

If raw material prices decline significantly, we may have to write down our raw materials inventory values.

If this happens, our results of operations and financial condition could decline.

In addition, the availability of raw materials components fluctuates from time to time due to factors outside of our control, including trade laws and tariffs, natural disasters, global pandemics like COVID-19 and resulting supply chain disruptions, and may impact our ability to meet the production demands of our customers.

If the costs of raw materials increase or the availability thereof is restricted, it could adversely affect our financial condition, operating results and cash flows.

Fluctuations in fuel costs or oil prices, a reduction in fuel supplies, or a sustained decline in oil prices may have a material adverse effect on our business and results of operations.

In connection with our business, to better serve our customers and limit our capital expenditures, we often move our fleet from branch to branch.

In addition, the majority of our customers arrange for delivery and pickup of our units through us.

Accordingly, we could be materially adversely affected by significant increases in fuel prices that result in higher costs to us for transporting equipment.

In the event of fuel and trucking cost increases, we may not be able to promptly raise our prices to make up for increased costs.

A significant or prolonged price fluctuation or disruption of fuel supplies could have a material adverse effect on our financial condition and results of operations.

Additionally, oil prices can be volatile and are subject to fluctuations in supply and demand, market uncertainty and a variety of additional factors that are beyond our control.

If oil prices remain volatile for an extended period of time or there is a sustained decline in demand for oil, demand for our Tank and Pump Solutions products from refineries and companies engaged in the exploration and production of oil and natural gas could be adversely impacted, which would in turn have an adverse effect on our results of operations and financial condition.

Third parties may fail to manufacture or provide necessary components for our products properly or in a timely manner.

We are often dependent on third parties to manufacture or supply components for our products.

We typically do not enter into long-term contracts with third-party suppliers.

We may experience supply problems as a result of financial or operating difficulties or the failure or consolidation of our suppliers.

We may also experience supply problems as a result of shortages and discontinuations resulting from product obsolescence or other shortages or allocations by suppliers.

Unfavorable economic conditions may also adversely affect our suppliers or the terms on which we purchase products.

In the future, we may not be able to negotiate arrangements with third parties to secure products that we require in sufficient quantities or on reasonable terms.

If we cannot negotiate arrangements with third parties to produce our products or if the third parties fail to produce our products to our specifications or in a timely manner, our business, results of operations and financial condition may be materially adversely affected.

We are subject to risks associated with labor relations, labor costs and labor disruptions.

We are subject to risks as sociated with labor relations, labor costs and labor disruptions.

We are subject to the costs and risks generally associated with labor disputes and organizing activities related to unionized labor.

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We may incur increased legal costs and indirect labor costs as a result of contractual disputes, negotiations or other labor-related disruptions.

We hav e collective bargaining agreements with employees in portions of our Mexico-based operations, which accounted for approximately 1% of our total employees as of December 31, 2021.

These operations may be more highly affected by labor force activities than others, and all collective bargaining agreements must be renegotiated annually.

We have collective bargaining agreements with employees in portions of our Mexico-based operations, which accounted for approximately 1% of our total employees as of December 31, 2022.

These operations may be more highly affected by labor force activities than others, and all collective bargaining agreements must be renegotiated

Other locations may also face organizing activities or effects.

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Labor expenses could also increase as a result of continuing shortages in the supply of personnel.

If we determine that our goodwill, intangible assets, and indefinite-life intangible assets have become impaired, we may incur impairment charges, which may adversely impact our operating results.

We have a substantial amount of goodwill and indefinite-life intangible assets (trade names), which represents the excess of the total purchase price of our acquisitions over the fair value of the assets acquired, and other intangible assets.

As of December 31, 2021, we had approximately $1,178.8 million and $460.7 million of goodwill and intangible assets, net, respectively, in our consolidated balance sheet, which represented approximately 20.4% and 8.0% of total assets, respectively, and primarily arose through our acquisition of Mobile Mini.

We evaluate goodwill and indefinite-lived intangible assets for impairment on an annual basis and when events occur or circumstances change that indicate that the fair value of the reporting unit or intangible asset may be below its carrying amount.

Fair value determinations require considerable judgment and are sensitive to inherent uncertainties and changes in estimates and assumptions regarding revenue growth rates, EBIT margins, capital expenditures, working capital requirements, tax rates, terminal growth rates, discount rates, exchange rates, royalty rates, benefits associated with a taxable transaction and synergistic benefits available to market participants.

Impairment may result from, among other things, deterioration in the performance of the business, adverse market conditions, stock price and adverse changes in applicable laws and regulations, including changes that restrict our activities.

Declines in market conditions, a trend of weaker than anticipated financial performance for our reporting units or declines in projected revenue, a decline in our share price for a sustained period of time, an increase in the market-based weighted average cost of capital or a decrease in royalty rates, among other factors, are indicators that the carrying value of our goodwill or indefinite-life intangible assets may not be recoverable.

These risks may be heightened by the COVID-19 pandemic.

In the event impairment is identified, a charge to earnings would be recorded which may materially adversely affect our financial condition and results of operations.

We are subject to various laws and regulations, including those governing government contracts, corruption and the environment.

Obligations and liabilities under these laws and regulations may materially harm our business.

Our operations are subject to an array of governmental regulations in each of the jurisdictions in which we operate.

Our operations and activities in other jurisdictions are subject to similar governmental regulations.

These regulations affect our Storage Solutions and Tank and Pump Solutions customers, most of whom use our storage units to store their goods on their own properties for various lengths of time.

If local zoning laws or planning permission regulations in one or more of our markets no longer allow our units to be stored on customers' sites, our business in that market will suffer.

US Government Contract Laws and Regulations

Our government customers include the US government, which means we are subject to various statutes and regulations applicable to doing business with the US government.

If the government terminates a contract for default, the defaulting company may be liable for any extra costs incurred by the government in procuring undelivered items from another source.

These requirements include, for example:

(a) specialized disclosure and accounting requirements unique to US government contracts;

and (d) mandatory socioeconomic compliance requirements, including labor requirements, non-discrimination and affirmative action programs and environmental compliance requirements.

The False Claims Act’s “whistleblower” provisions allow private individuals, including present and former employees, to sue on behalf of the US government.

Any penalties, damages, fines, suspension or damages could adversely affect our ability to operate our business and our financial results.

Department of Transportation and Titling Regulations

We operate in the US pursuant to operating authority granted by the US Department of Transportation (the “DOT”).

Our drivers must comply with the safety and fitness regulations of the DOT, including those relating to drug and alcohol testing and hours of service.

Such matters as equipment weight and dimensions are also subject to government regulations.

Our safety record could be ranked poorly compared to peer firms.

A poor safety ranking may result in the loss of customers or difficulty attracting and retaining qualified drivers which could affect our results of operations.

Should additional rules be enacted in the future, compliance with such rules could result in additional costs.

At various times, we may be involved in disputes with local governmental officials regarding the development and/or operation of our units.

We may be subject to similar types of regulations by governmental agencies in new markets.

Anti-Corruption Laws and Regulations

We operate in countries that may present a more corruptible business environment than the US.

Such activities create the risk of unauthorized payments or offers of payments by one of our employees or agents that could be in violation of various laws, including the FCPA.

We have implemented safeguards and policies to discourage these practices by our employees and agents.

However, existing safeguards and any future improvements may prove to be ineffective and employees or agents may engage in conduct for which we might be held responsible.

If employees violate our policies or we fail to maintain adequate record-keeping and internal accounting practices to accurately record our transactions, we may be subject to regulatory sanctions.

We are also subject to similar anti-corruption laws in other jurisdictions.

Environmental Laws and Regulations

We are subject to a variety of national, state, regional and local environmental laws and regulations.

In the ordinary course of business, we use and generate substances that are regulated or may be hazardous under environmental laws.

For example, we own, transport and rent tanks and boxes in which waste materials are placed by our customers.

Although we have a policy which, with certain limited exceptions, requires customers to return tanks and containers clean of any substances, they may fail to comply with these obligations.

Additionally, we may provide waste hauling services, which involves environmental risks during transport.

We may in the future incur material costs to comply with environmental laws or sustain material liabilities from claims concerning noncompliance or contamination.

Under certain environmental laws, we could be held responsible for all of the costs relating to any contamination at, or migration to or from, our or our predecessors' past or present facilities.

These laws often impose liability even if the owner, operator or lessor did not know of, or was not responsible for, the release of such hazardous substances.

We have no reserves for any such liabilities.

We are also required to obtain environmental permits from governmental authorities for certain of our operations.

If we violate or fail to obtain or comply with these laws, regulations, or permits, we could be fined or otherwise sanctioned by regulators.

We could also become liable if employees or other parties are improperly exposed to hazardous materials.

In addit ion, ongoing governmental review of hydraulic fracturing (“fracking”) and its environmental impact could lead to changes to this activity or its substantial curtailment, which could adversely affect our revenue and results of operations.

Approximately 2% of our consolidated rental revenue for the year ended December 31, 2021 was related to customers involved in the upstream exploration and production of oil and natural gas.

A portion of this revenue involves rentals to customers that use the fracking method to extract natural gas.

The US Environmental Protection Agency has issued regulations or guidance regarding certain aspects of the process.

Other federal, state and local governments and governmental agencies also investigate and/or regulate fracking.

Additional governmental regulation could result in increased costs of compliance or the curtailment of fracking in the future, which would adversely affect our revenue and results of operations.

The impact of these and other investigations and lawsuits could have a material adverse effect on our financial statements.

Our customer base includes customers operating in a variety of industries which may be subject to changes in their competitive environment as a result of the global, national or local economic climate in which they operate and/or economic or financial disruptions to their industry.

Our customer base includes customers operating in a variety of industries, including commercial and industrial, construction, education, energy and natural resources, government, retail and other end markets.

Many of these customers, across this wide range of industries, are facing economic and/or financial pressure from changes to their industry resulting from the global, national and local economic climate in which they operate and industry-specific economic and financial disruptions, including, in some cases, consolidation and lower sales revenue from physical locations, resulting from the impact of the COVID-19 pandemic and the related changes in political, social and economic conditions.

These and any future

changes to any of the industries in which our customers operate could cause them to rent fewer units from us or otherwise be unable to satisfy their obligations to us.

In addition, certain of our customers are facing financial pressure and such pressure, from COVID-19 or other factors, may result in consolidation in some industries and/or an increase in bankruptcy filings by certain customers.

Many of these customers, across this wide range of industries, are facing economic and/or financial pressure from changes to their industry resulting from the global, national and local economic climate in which they operate and industry-specific economic and financial disruptions, including, in some cases, consolidation and lower sales revenue from physical locations, resulting from changes in political, social and economic conditions.

These and any future changes to any of the industries in which our customers operate could cause them to rent fewer units from us or otherwise be unable to satisfy their obligations to us.

In addition, certain of our customers are facing financial pressure and such pressure, or other factors, may result in consolidation in some industries and/or an increase in bankruptcy filings by certain customers.

Each of these facts and industry impacts, individually or in the aggregate, could have a materially adverse effect on our operating results.

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Our operations could be subject to natural disasters and other business disruptions such as pandemics, fires, floods, hurricanes, earthquakes and terrorism, which could adversely affect our information systems, future revenue, financial condition, and cash flows and increase our costs and expenses.

See "Our operations may be adversely impacted as a result of COVID-19." In addition, the occurrence and threat of terrorist attacks may directly or indirectly affect economic conditions, which could adversely affect demand for our products and services.

In addition, the occurrence and threat of terrorist attacks may directly or indirectly affect economic conditions, which could adversely affect demand for our products and services.

In the event of a major natural or man-made disaster, we could experience loss of life of our employees, destruction of facilities or business interruptions, any of which may materially adversely affect our business.

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We may be unable to achieve our environmental, social and governance goals.

We are dedicated to corporate social responsibility and sustainability and face pressures from our employees, customers, and stockholders to make significant advancements in environmental, social and governance matters.

We are dedicated to corporate social responsibility and sustainability and our employees, customers, and stockholders expect us to make significant advancements in environmental, social and governance matters.

In part to address these concerns, we established certain goals as part of our ESG strategy.

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the actions of competitors and competitive pressures;

an acquisition of or merger with another company that has not adopted similar goals or whose progress towards reaching its goals is not as advanced as ours;

and the pace of regional and global recovery from the COVID-19 pandemic.

and an acquisition of or merger with another company that has not adopted similar goals or whose progress towards reaching its goals is not as advanced as ours.

A failure to meet our goals could adversely affect public perception of our business, employee morale or customer or stockholder support.

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If we are unable to meet our goals, we may lose employees, and have difficulty recruiting new employees, investors, customers, or partners, our stock price may be negatively impacted, our reputation may be negatively affected, and it may be more difficult for us to compete effectively, all of which would have an adverse effect on our business, operating results, and financial condition.

Our operations are exposed to operational, economic, political and regulatory risks.

We operate in the US, Canada, and Mexico.

For the year ended December 31, 2022, approximately 93%, 6%, and 1% of our revenue was generated in the US, Canada, and Mexico, respectively.

For the year ended December 31, 2022, approximately 65.0% and 35.0%, of our revenue was derived from our Modular Solutions business and Storage Solutions business, respectively.

Our operations in any of these countries could be affected by foreign and domestic economic, political and regulatory risks, including (a) regulatory requirements that are subject to change and that could restrict our ability to assemble, lease or sell products;

(b) inflation, recession, and fluctuations in foreign currency exchange and interest rates;

(d) compliance with applicable antitrust and other regulatory rules and regulations relating to potential acquisitions;

(e) different local product preferences and product requirements;

(f) pressures on management time and attention due to the complexities of overseeing multi-national operations;

(g) challenges in maintaining staffing;

(h) different labor regulations and the potential impact of collective bargaining;

(i) potentially adverse consequences from changes in, or interpretations of, tax laws;

(j) potentially adverse consequences from change in, or interpretation of, securities laws and other financial reporting regulations;

(k) political and economic instability;

(l) enforcement of remedies in various jurisdictions;

(m) the risk that the business partners upon whom we depend for technical assistance will not perform as expected;

(n) compliance with applicable export control laws and economic sanctions laws and regulations;

(o) price controls and ownership regulations;

(p) obstacles to the repatriation of earnings and cash;

(q) differences in business practices that may result in violation of Company policies, including, but not limited to, bribery and collusive practices;

and (r) reduced protection for intellectual property in some countries.

Additionally, any sustained international conflict may have a negative economic or other impact on the markets we serve, our operations and financial results.

These and other risks may materially adversely affect our business, results of operations and financial condition.