What changed in this filing

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Item 1. Financial Statements

2023-08-03 compared with 2023-04-27 · 238 added, 122 removed, 672 unchanged (35% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

(in thousands, except share data) March 31, 2023 (unaudited)

(in thousands, except share data) June 30, 2023 (unaudited)

December 31, 2022

Cash and cash equivalents $ 7,660 $ 7,390

Trade receivables, net of allowances for credit losses at March 31, 2023 and December 31, 2022 of $ 61,402 and $ 57,048 , respectively

Trade receivables, net of allowances for credit losses at June 30, 2023 and December 31, 2022 of $ 68,096 and $ 57,048 , respectively

441,643 409,766

29 unchanged sentences

Preferred Stock:

$ 0.0001 par, 1,000,000 shares authorized and zero shares issued and outstanding at March 31, 2023 and December 31, 2022

$ 0.0001 par, 1,000,000 shares authorized and zero shares issued and outstanding at June 30, 2023 and December 31, 2022

Common Stock:

$ 0.0001 par, 500,000,000 shares authorized and 203,723,099 and 207,951,682 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively

$ 0.0001 par, 500,000,000 shares authorized and 198,375,893 and 207,951,682 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively

Additional paid-in-capital 2,435,571 2,886,951

6 unchanged sentences

Condensed Consolidated Statements of Operations

Three Months Ended March 31,

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

(in thousands, except share and per share data)

2023 2022 2023 2022

Leasing and services revenue:

15 unchanged sentences

Other depreciation and amortization 17,346 14,951 34,519 30,313

Currency losses, net 6,775 137

Currency losses (gains), net 14 ( 173 ) 6,789 ( 36 )

Other income, net ( 2,838 ) ( 3,794 ) ( 6,197 ) ( 5,077 )

26 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in thousands)

2023 2022 2023 2022

Net income $ 87,729 $ 73,376 $ 298,613 $ 124,547

Other comprehensive income (loss):

Foreign currency translation adjustment, net of income tax expense of $ 0 for each of the three months ended March 31, 2023 and 2022

Foreign currency translation adjustment, net of income tax expense of $ 0 for both the three and six months ended June 30, 2023 and 2022

5,915 ( 25,628 ) 13,849 ( 29,702 )

Net (loss) gain on derivatives, net of income tax (benefit) expense of $( 222 ) and $ 777 for the three months ended March 31, 2023 and 2022, respectively

Net gain on derivatives, net of income tax expense of $ 4,268 and $ 394 for the three months ended June 30, 2023 and 2022, respectively, and $ 4,046 and $ 1,171 for the six months ended June 30, 2023 and 2022, respectively.

12,831 1,176 12,164 3,497

4 unchanged sentences

Condensed Consolidated Statements of Changes in Equity

Three Months Ended March 31, 2023

Common Stock Additional Paid-in-Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Shareholders' Equity

Six Months Ended June 30, 2023

Common Stock Additional Paid-in-Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Shareholders' Equity

(in thousands) Shares Amount

7 unchanged sentences

Balance at March 31, 2023 203,723 21 2,667,424 ( 62,855 ) ( 1,040,666 ) 1,563,924

Three Months Ended March 31, 2022

Common Stock Additional Paid-in-Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Shareholders' Equity

Net income — — — — 87,729 87,729

Other comprehensive income — — — 18,746 — 18,746

Stock-based compensation and issuance of Common Stock from vesting 35 — 9,348 — — 9,348

Repurchase and cancellation of Common Stock ( 5,406 ) ( 1 ) ( 241,545 ) — — ( 241,546 )

Issuance of Common Stock from the exercise of options 24 — 344 — — 344

Balance at June 30, 2023 198,376 $ 20 $ 2,435,571 $ ( 44,109 ) $ ( 952,937 ) $ 1,438,545

Six Months Ended June 30, 2022

Common Stock Additional Paid-in-Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Shareholders' Equity

(in thousands) Shares Amount

7 unchanged sentences

Balance at March 31, 2022 223,174 22 3,536,906 ( 30,824 ) ( 1,539,919 ) 1,966,185

Net income — — — — 73,376 73,376

Other comprehensive loss — — — ( 24,452 ) — ( 24,452 )

Withholding taxes on net share settlement of stock-based compensation — — ( 1,075 ) — — ( 1,075 )

Stock-based compensation and issuance of Common Stock from vesting 70 — 9,292 — — 9,292

Repurchase and cancellation of Common Stock and warrants ( 7,222 ) — ( 249,515 ) — — ( 249,515 )

Issuance of Common Stock from the exercise of options and warrants 69 — 139 — — 139

Balance at June 30, 2022 216,091 $ 22 $ 3,295,747 $ ( 55,276 ) $ ( 1,466,543 ) $ 1,773,950

See the accompanying notes which are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

33 unchanged sentences

Receipts from borrowings 628,538 454,322

Payment of financing costs — ( 8,021 )

Repayment of borrowings ( 674,719 ) ( 127,607 )

1 unchanged sentence

Taxes paid on employee stock awards ( 10,058 ) ( 13,370 )

Net cash (used in) provided by financing activities ( 423,087 ) 1,586

Net cash used in financing activities ( 520,257 ) ( 20,802 )

Effect of exchange rate changes on cash and cash equivalents 746 ( 306 )

21 unchanged sentences

All intercompany balances and transactions are eliminated.

The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the full year.

The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the full year.

For further information, refer to the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

3 unchanged sentences

In October 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No.

2021-08, B usiness Combinations (Topic 805):

2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08").

6 unchanged sentences

Asset Acquisitions

During the first quarter of 2023, the Company acquired certain assets and liabilities of two regional and local storage and modular companies, which consisted primarily of approximately 300 storage units and 500 modular units for $ 79.6 million in cash.

The accompanying consolidated financial statements include $ 70.4 million of rental equipment and $ 4.5 million of land held for sale as of March 31, 2023 as a result of these acquisitions.

During the six months ended June 30, 2023, the Company acquired certain assets and liabilities of five regional and local storage and modular companies, which consisted primarily of approximately 1,800 storage units and 700 modular units, for $ 149.4 million in cash, net of cash acquired.

The accompanying consolidated financial statements include $ 147.9 million of rental equipment and $ 4.5 million of land held for sale as of June 30, 2023 as a result of these acquisitions.

A sale of the acquired land is expected to close before the end of the year.

Integration Costs

The Company recorded $ 3.9 million and $ 4.1 million in integration costs related to asset acquisitions and the Merger within selling, general and administrative ("SG&A") expense during the three months ended March 31, 2023 and 2022, respectively.

The Company recorded $ 2.2 million and $ 5.2 million in integration costs related to asset acquisitions and the Merger within selling, general and administrative expense ("SG&A") during the three months ended June 30, 2023 and 2022, respectively, and $ 6.1 million and $ 9.3 million in integration costs related to acquisitions and the Merger during the six months ended June 30, 2023 and 2022, respectively.

NOTE 3 - Discontinued Operations

11 unchanged sentences

The following tables present the results of the former Tank and Pump segment and the former UK Storage Solutions segment as reported in income from discontinued operations within the consolidated statements of operations, and the carrying value of the former UK Storage Solutions segment's assets and liabilities as presented within assets and liabilities held for sale on the consolidated balance sheet.

Three Months Ended March 31, 2023

Six Months Ended June 30, 2023

(in thousands) UK Storage Solutions

22 unchanged sentences

In January 2023, a $ 0.4 million adjustment was made to the gain on sale of the former Tank and Pump segment due to the final contractual working capital adjustment.

Including this adjustment, the total gain on sale of discontinued operations was $ 176.1 million for the three months ended March 31, 2023.

Three Months Ended March 31, 2022

Including this adjustment, the total gain on sale of discontinued operations was $ 176.1 million for the six months ended June 30, 2023 .

Three Months Ended June 30, 2022

(in thousands) Tank and Pump UK Storage Solutions Total

17 unchanged sentences

Currency losses, net — 46 46

Other expense, net 1 5 6

Operating income 7,868 9,694 17,562

Interest expense 190 232 422

Income from discontinued operations before income tax 7,678 9,462 17,140

Income tax expense from discontinued operations 1,997 1,866 3,863

Income from discontinued operations $ 5,681 $ 7,596 $ 13,277

Other selected data:

Adjusted EBITDA from discontinued operations $ 12,462 $ 12,230 $ 24,692

Six Months Ended June 30, 2022

(in thousands) Tank and Pump UK Storage Solutions Total

Leasing and services revenue:

Leasing $ 43,140 $ 40,727 $ 83,867

Delivery and installation 17,544 11,809 29,353

Sales revenue:

New units 1,360 617 1,977

Rental units 324 953 1,277

Total revenues 62,368 54,106 116,474

Costs of leasing and services:

Leasing 8,915 8,430 17,345

Delivery and installation 14,651 7,334 21,985

Costs of sales:

New units 1,003 385 1,388

Rental units 72 657 729

Depreciation of rental equipment 6,323 2,292 8,615

Gross profit 31,404 35,008 66,412

Selling, general and administrative 12,501 11,769 24,270

Other depreciation and amortization 4,829 3,515 8,344

Currency losses, net — 47 47

Other expense (income), net 20 ( 40 ) ( 20 )

27 unchanged sentences

Total liabilities held for sale $ 66,854

For the three months ended March 31, 2022 , significant operating and investing items related to the former Tank and Pump segment were as follows:

Three Months Ended March 31,

For the six months ended June 30, 2022 , significant operating and investing items related to the former Tank and Pump segment were as follows:

(in thousands)

Six Months Ended June 30, 2022

Operating activities of discontinued operations:

4 unchanged sentences

Purchases of property, plant and equipment $ ( 170 )

The following table presents a reconciliation of Income from discontinued operations before income tax to Adjusted EBITDA from discontinued operations for the former Tank and Pump segment for the three months ended March 31, 2022.

See Note 16 for further information regarding Adjusted EBITDA.

Three Months Ended March 31,

(in thousands) 2022

(in thousands) Three Months Ended June 30, 2022 Six Months Ended June 30, 2022

Income from discontinued operations $ 5,681 $ 10,176

6 unchanged sentences

Adjusted EBITDA from discontinued operations $ 12,462 $ 23,968

For the three months ended March 31, 2023 and 2022 , significant operating and investing items related to the former UK Storage Solutions segment were as follows:

Three Months Ended March 31,

For the six months ended June 30, 2023 and 2022 , significant operating and investing items related to the former UK Storage Solutions segment were as follows:

Six Months Ended June 30,

(in thousands)

6 unchanged sentences

Purchases of property, plant and equipment $ ( 64 ) $ ( 3,188 )

The following table presents reconciliations of Income from discontinued operations before income tax to Adjusted EBITDA from discontinued operations for the former UK Storage Solutions segment for the three months ended March 31, 2023 and 2022, respectively.

The following table presents reconciliations of Income from discontinued operations before income tax to Adjusted EBITDA from discontinued operations for the former UK Storage Solutions segment for the three and six months ended June 30, 2023 and 2022, respectively.

See Note 16 for further information regarding Adjusted EBITDA.

Three Months Ended March 31,

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

(in thousands) 2023 2022 2023 2022

12 unchanged sentences

Geographic Areas

The Company had total revenue in the following geographic areas for the three months ended March 31, as follows:

The Company had total revenue in the following geographic areas for the three and six months ended June 30, 2023 and 2022 as follows:

Three Months Ended

June 30, Six Months Ended

(in thousands) 2023 2022 2023 2022

9 unchanged sentences

In connection with its leasing and sales activities, the Company provides services including delivery and installation, maintenance and ad hoc services and removal services at the end of lease transactions.

The Company’s revenue by major product and service line for the three months ended March 31, was as follows:

The Company’s revenue by major product and service line for the three and six months ended June 30, 2023 and 2022 was as follows:

Three Months Ended

June 30, Six Months Ended

(in thousands) 2023 2022 2023 2022

11 unchanged sentences

Total revenues $ 582,089 $ 522,890 $ 1,147,557 $ 974,061

(a) Includes $ 5.6 million and $ 5.9 million of service revenue for the three months ended March 31, 2023 and 2022, respectively.

(a) Includes $ 6.1 million and $ 5.6 million of service revenue for the three months ended June 30, 2023 and 2022, respectively, and $ 11.7 million and $ 11.5 million of service revenue for the six months ended June 30, 2023 and 2022, respectively.

(b) Includes primarily damage billings, delinquent payment charges, and other processing fees.

Leasing and Services Revenue

The majority of r evenue ( 77 % for the both the three months ended March 31, 2023 and March 31, 2022 ) was generated by rental income subject to the guidance of ASU 2018-11, Leases (Topic 842) ("ASC 842").

The majority of revenue ( 76 % for both the three and six months ended June 30, 2023, and 73 % and 75 % for the three and six months ended June 30, 2022, respectively) was generated by rental income subject to the guidance of ASU 2018-11, Leases (Topic 842 ) ("ASC 842").

The remaining revenue was generated by performance obligations in contracts with customers for services or sale of units subject to the guidance in ASC 606.

4 unchanged sentences

The Company assesses each customer’s ability to pay for the products it leases or sells by conducting a credit review that considers expected billing exposure, timing for payment and the customer’s established credit rating.

The Company performs its credit review of new customers at inception of the customer relationship and for existing customers when the

customer transacts after a defined period of dormancy.

The Company performs its credit review of new customers at inception of the customer relationship and for existing customers when the customer transacts after a defined period of dormancy.

The Company also considers contract terms and conditions, country risk and business strategy in the evaluation.

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in thousands) 2023 2022 2023 2022

6 unchanged sentences

When customers are billed in advance for services, the Company defers recognition of revenue until the related services are performed, which generally occurs at the end of the contract.

The balance sheet classification of deferred revenue is determined based on the contractual lease term.

The balance sheet classification of deferred revenue

is determined based on the contractual lease term.

For contracts that continue beyond their initial contractual lease term, revenue continues to be deferred until the services are performed.

During the three months ended March 31, 2023, deferred revenue relating to services billed in advance of $ 27.7 million was recognized as revenue.

As of March 31, 2023 and December 31, 2022, the Company had approximately $ 99.0 million and $ 102.2 million , respectively, of deferred revenue related to these services.

During the three months ended June 30, 2023, deferred revenue relating to services billed in advance of $ 26.2 million was recognized as revenue.

As of June 30, 2023 and December 31, 2022, the Company had approximately $ 104.8 million and $ 102.2 million , respectively, of deferred revenue related to these services.

The Company does not have material contract assets, and the Company's uncompleted contracts with customers have unsatisfied (or partially satisfied) performance obligations.

6 unchanged sentences

NOTE 5 - Leases

As of March 31, 2023, the undiscounted future lease payments for operating and finance lease liabilities were as follows:

As of June 30, 2023, the undiscounted future lease payments for operating and finance lease liabilities were as follows:

(in thousands) Operating Finance

9 unchanged sentences

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

The Company’s lease activity during the three months ended March 31, 2023 and 2022 was as follows:

(in thousands) Three Months Ended March 31,

The Company’s lease activity during the six months ended June 30, 2023 and 2022 was as follows:

(in thousands) Six Months Ended June 30,

Financial Statement Line 2023 2022

14 unchanged sentences

Total operating lease expense $ 52,560 $ 55,249

Supplemental cash flow information related to leases for the three months ended March 31, 2023 and 2022 was as follows:

(in thousands) Three Months Ended March 31,

Supplemental cash flow information related to leases for the six months ended June 30, 2023 and 2022 was as follows:

(in thousands) Six Months Ended June 30,

Supplemental Cash Flow Information 2023 2022

5 unchanged sentences

Assets obtained in exchange for finance leases $ 24,382 $ 14,576

Weighted average remaining operating lease terms and the weighted average discount rates as of March 31, 2023 and December 31, 2022 were as follows:

Lease Terms and Discount Rates March 31, 2023 December 31, 2022

Weighted average remaining operating lease terms and the weighted average discount rates as of June 30, 2023 and December 31, 2022 were as follows:

Lease Terms and Discount Rates June 30, 2023 December 31, 2022

Weighted average remaining lease term - operating leases 5.6 years 5.8 years

6 unchanged sentences

(in thousands)

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Raw materials $ 40,971 $ 38,611

4 unchanged sentences

(in thousands)

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Modular space units $ 3,406,542 $ 3,197,779

11 unchanged sentences

Effects of movements in foreign exchange rates 706 — 706

Balance at March 31, 2023 $ 518,961 $ 492,552 $ 1,011,513

The Company had no goodwill impairment during the three months ended March 31, 2023 or the year ended December 31, 2022.

Balance at June 30, 2023 $ 519,583 $ 492,552 $ 1,012,135

The Company had no goodwill impairment during the six months ended June 30, 2023 or the year ended December 31, 2022.

Intangible Assets

Intangible assets other than goodwill at the respective balance sheet dates consisted of the following:

March 31, 2023

June 30, 2023

(in thousands) Weighted average remaining life (in years) Gross carrying amount Accumulated amortization Net book value

17 unchanged sentences

Total intangible assets other than goodwill $ 478,500 $ ( 59,375 ) $ 419,125

Amortization expense related to intangible assets was $ 5.9 million for the each of the three months ended March 31, 2023 and 2022.

Based on the carrying value at March 31, 2023, future amortization of intangible assets is expected to be as follows for the years ended December 31:

Amortization expense related to intangible assets was $ 6.0 million and $ 5.9 million for the three months ended June 30, 2023 and 2022, respectively, and $ 11.9 million and $ 11.8 million for the six months ended June 30, 2023 and 2022, respectively.

Based on the carrying value at June 30, 2023, future amortization of intangible assets is expected to be as follows for the years ended December 31:

(in thousands)

4 unchanged sentences

The carrying value of debt outstanding at the respective balance sheet dates consisted of the following:

(in thousands, except rates) Interest rate Year of maturity March 31, 2023 December 31, 2022

(in thousands, except rates) Interest rate Year of maturity June 30, 2023 December 31, 2022

2025 Secured Notes 6.125 % 2025 $ 521,523 $ 520,350

6 unchanged sentences

Total long-term debt $ 3,035,521 $ 3,063,042

(a) As of both March 31, 2023 and December 31, 2022, the Company had no outstanding principal borrowings on the Multicurrency Facility and $ 2.4 million and $ 2.5 million , respectively, of related debt issuance costs.

No related debt issuance costs were recorded as a direct offset against the principal borrowings on the Multicurrency Facility, and the $ 2.4 million and $ 2.5 million in excess of principal was included in other non-current assets on the condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022, respectively.

(a) As of June 30, 2023, the Company had $ 28.3 million of outstanding principal borrowings on the Multicurrency Facility and $ 2.3 million of related debt issuance costs recorded as a direct offset against the principal borrowings on the Multicurrency Facility.

As of December 31, 2022, the Company had no outstanding principal borrowings on the Multicurrency Facility and $ 2.5 million of related debt issuance costs, which were recorded in other non-current assets on the condensed consolidated balance sheets.

Asset Backed Lending Facility

10 unchanged sentences

The ABL Facility requires the payment of a commitment fee on the unused available borrowings of 0.20 % annually.

The weighted average interest rate on the balance outstanding as of March 31, 2023, as adjusted for the effects of the interest rate swap agreements, was 6.52 %.

The weighted average interest rate on the balance outstanding as of June 30, 2023, as adjusted for the effects of the interest rate swap agreements, was 6.11 %.

Refer to Note 12 for a more detailed discussion on interest rate management.

Borrowing availability under the US Facility and the Multicurrency Facility is equal to the lesser of (i) the aggregate Revolver Commitments and (ii) the Borrowing Base ("Line Cap").

At March 31, 2023, the Line Cap was $ 3.0 billion and the Borrowers had $ 1.1 billion of available borrowing capacity under the ABL Facility, including $ 972.5 million under the US Facility and $ 162.0 million under the Multicurrency Facility.

Borrowing capacity under the ABL Facility is made available for up to $ 205.6 million of letters of credit and up to $ 200.5 million of swingline loans.

At March 31, 2023, letters of credit and bank guarantees carried fees of 1.625 %.

The Company had issued $ 14.4 million of standby letters of credit under the ABL Facility at March 31, 2023.

The Company had approximately $ 1.8 billion outstanding principal under the ABL Facility at March 31, 2023.

Debt issuance costs of $ 30.1 million were included in the carrying value of the ABL Facility at March 31, 2023.

At June 30, 2023, the Line Cap was $ 3.0 billion and the Borrowers had $ 1.0 billion of available borrowing capacity under the ABL Facility, including $ 829.4 million under the US Facility and $ 209.6 million under the Multicurrency Facility.

Borrowing capacity under the ABL Facility is made available for up to $ 220.0 million letters of credit and $ 220.0 million of swingline loans.

At June 30, 2023, the available capacity was $ 205.6 million of letters of credit and $ 212.0 million of swingline loans.

At June 30, 2023, letters of credit and bank guarantees carried fees of 1.625 %.

The Company had issued $ 14.4 million of standby letters of credit under the ABL Facility at June 30, 2023.

The Company had approximately $ 2.0 billion outstanding principal under the ABL Facility at June 30, 2023.

Debt issuance costs of $ 30.6 million were included in the carrying value of the ABL Facility at June 30, 2023.

Finance Leases

The Company maintains finance leases primarily related to transportation equipment.

At March 31, 2023 and December 31, 2022, obligations under finance leases for certain real property and transportation related equipment were $ 79.9 million and $ 74.4 million, respectively.

At June 30, 2023 and December 31, 2022, obligations under finance leases for certain real property and transportation related equipment were $ 90.7 million and $ 74.4 million, respectively.

Refer to Note 5 for further information.

The Company was in compliance with all debt covenants and restrictions associated with its debt instruments as of March 31, 2023.

The Company was in compliance with all debt covenants and restrictions associated with its debt instruments as of June 30, 2023.

NOTE 10 – Equity

In connection with the stock compensation vesting events and stock option exercises described in Note 14, the Company issued 360,725 shares of Common Stock during the three months ended March 31, 2023 .

In connection with the stock compensation vesting events and stock option exercises described in Note 14, the Company issued 419,530 shares of Common Stock during the six months ended June 30, 2023 .

Stock Repurchase Program

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

In May 2023, the Board of Directors approved an increase to the share repurchase program authorizing the Company to repurchase up to $ 1.0 billion of its outstanding shares of Common Stock and equivalents.

The stock repurchase program does not obligate the Company to purchase any particular number of shares, and the timing and exact amount of any repurchases will depend on various factors, including market pricing, business, legal, accounting, and other considerations.

In August 2022, the Inflation Reduction Act of 2022 was enacted into law and imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022.

In the first quarter of 2023, the Company reflected the applicable excise tax in equity as part of the cost basis of the stock repurchased and recorded a corresponding liability for the excise taxes payable in accrued expenses on the consolidated balance sheet.

During the three months ended March 31, 2023 , the Company repurchased 4,589,308 shares of Common Stock for $ 215.7 million, excluding excise tax.

As of March 31, 2023, $ 415.1 million of the approved share repurchase pool remained available.

The Company reflected the applicable excise tax in equity as part of the cost basis of the stock repurchased and recorded a corresponding liability for the excise taxes payable in accrued expenses on the consolidated balance sheet.

During the six months ended June 30, 2023 , the Company repurchased 9,995,319 shares of Common Stock for $ 454.9 million, excluding excise tax.

As of June 30, 2023, $ 854.1 million of the approved share repurchase pool remained available.

Accumulated Other Comprehensive Loss

The changes in accumulated other comprehensive income (loss) ("AOCI"), net of tax, for the three months ended March 31, 2023 and 2022 were as follows:

Three Months Ended March 31, 2023

(in thousands) Foreign currency translation Unrealized losses on hedging activities Total

The changes in accumulated other comprehensive income (loss) ("AOCI"), net of tax, for the six months ended June 30, 2023 and 2022 were as follows:

Six Months Ended June 30, 2023

(in thousands) Foreign currency translation Unrealized gains on hedging activities Total

Balance at December 31, 2022 $ ( 70,122 ) $ — $ ( 70,122 )

Other comprehensive income (loss) before reclassifications 7,934 859 8,793

Other comprehensive income before reclassifications 7,934 859 8,793

Reclassifications from AOCI to income — ( 1,526 ) ( 1,526 )

Balance at March 31, 2023 ( 62,188 ) ( 667 ) ( 62,855 )

Three Months Ended March 31, 2022

Other comprehensive income before reclassifications 5,915 15,761 21,676

Reclassifications from AOCI to income — ( 2,930 ) ( 2,930 )

Balance at June 30, 2023 $ ( 56,273 ) $ 12,164 $ ( 44,109 )

Six Months Ended June 30, 2022

(in thousands) Foreign currency translation Unrealized losses on hedging activities Total

3 unchanged sentences

Balance at March 31, 2022 ( 29,648 ) ( 1,176 ) ( 30,824 )

For the three months ended March 31, 2023 and 2022 , a gain of $ 1.5 million an d a loss of $ 2.9 million , respectively, were reclassified from AOCI into the condensed consolidated statements of operations within interest expense related to the interest rate swaps discussed in Note 12.

T he Company recorded tax benefit of $ 0.4 million and tax expense $ 0.7 million for the three months ended March 31, 2023 and 2022 , respectively, associated with these reclassifications.

Other comprehensive loss before reclassifications ( 25,628 ) ( 464 ) ( 26,092 )

Reclassifications from AOCI to income — 1,640 1,640

Balance at June 30, 2022 $ ( 55,276 ) $ — $ ( 55,276 )

For the three months ended June 30, 2023 and 2022, a gain of $ 2.9 million and a loss of $ 1.6 million , respectively, were reclassified from AOCI into the condensed consolidated statements of operations within interest expense related to the interest rate swaps.

For the six months ended June 30, 2023 and 2022 , a gain of $ 4.5 million an d a loss of $ 4.5 million , respectively, were reclassified from AOCI into the condensed consolidated statements of operations within interest expense related to the interest rate swaps.

The interest rate swaps are discussed in Note 12.

Associated with these reclassifications, t he Company recorded tax expense of $ 0.7 million and a tax benefit of $ 0.4 million for the three months ended June 30, 2023 and 2022 , respectively, and tax expense of $ 1.1 million and a tax benefit of $ 1.1 million for the six months ended June 30, 2023 and 2022, respectively.

NOTE 11 – Income Taxes

The Company recorded $ 30.5 million and $ 12.1 million of income tax expense from continuing operations for the three months ended March 31, 2023 and 2022, respectively.

The Company’s effective tax rate for the three months ended March 31, 2023 and 2022 was 28.6 % and 23.7 %, respectively.

The effective tax rate for the three months ended March 31, 2023 differs from the US federal statutory rate of 21% primarily due to state and provincial taxes and an add-back for non-deductible executive compensation.

The effective tax rate for the three months ended March 31, 2022 differs from the US statutory rate of 21% primarily due to state and provincial taxes offset by a discrete tax benefit related to employee stock vesting.

The Company recorded $ 31.6 million and $ 62.1 million of income tax expense for the three and six months ended June 30, 2023, respectively, and $ 20.8 million and $ 32.9 million of income tax benefit for the three and six months ended June 30, 2022, respectively.

The Company’s effective tax rate for the three and six months ended June 30, 2023 was 26.5 % and 27.5 %, respectively.

The Company's effective tax rate for the three and six months ended June 30, 2022 was 25.8 % and 24.9 %, respectively.

The effective tax rate for the three and six months ended June 30, 2023 differs from the US federal statutory rate of 21% primarily due to state and provincial taxes and an add-back for non-deductible executive compensation.

The effective tax rate for the three and six months ended June 30, 2022 differed from the US federal statutory rate of 21% primarily due to state and provincial taxes offset by a discrete tax benefit related to employee stock vesting.

NOTE 12 - Derivatives

6 unchanged sentences

The swap agreements terminate on June 30, 2027.

The floating rate that the Company receives under the terms of these swap agreements was 4.79 % at March 31, 2023.

The floating rate that the Company receives under the terms of these swap agreements was 5.08 % at June 30, 2023.

The location and the fair value of derivative instruments designated as hedges were as follows:

(in thousands) Balance Sheet Location March 31, 2023

(in thousands) Balance Sheet Location June 30, 2023

Cash Flow Hedges:

Interest rate swap Prepaid expenses and other current assets $ 13,215

Interest rate swap Other non-current liabilities $ ( 9,394 )

The fair values of the interest rate swaps are based on dealer quotes of market forward rates, Level 2 inputs on the fair value hierarchy, and reflect the amounts that the Company would receive or pay as of March 31, 2023 for contracts involving the same attributes and maturity dates.

The following table discloses the impact of the interest rate swaps, excluding the impact of income taxes, on other comprehensive income (“OCI”), AOCI and the Company’s statements of operations for the three months ended March 31,:

Interest rate swap Other non-current assets $ 3,134

The fair values of the interest rate swaps are based on dealer quotes of market forward rates, Level 2 inputs on the fair value hierarchy, and reflect the amounts that the Company would receive or pay as of June 30, 2023 for contracts involving the same attributes and maturity dates.

(in thousands) 2023 2022

(Loss) gain recognized in OCI $ ( 641 ) $ 3,098

Gain recognized in OCI $ 20,666 $ 4,669

Location of gain (loss) recognized in income Interest expense, net Interest expense, net

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The fair value of the foreign currency contract was based on dealer quotes of market forward rates, a Level 2 input on the fair value hierarchy, and reflected the amount that the Company would receive or pay for contracts involving the same attributes and maturity dates.

The location and the impact of the foreign currency contract, excluding the impact of income taxes, on the Company’s statement of operations for the three months ended March 31, 2023 was as follows :

(in thousands) Income Statement Location Three Months Ended March 31, 2023

The location and the impact of the foreign currency contract, excluding the impact of income taxes, on the Company’s statement of operations for the six months ended June 30, 2023 was as follows :

(in thousands) Income Statement Location Six Months Ended June 30, 2023

Loss recognized in income Currency losses, net $ 7,715

6 unchanged sentences

The Company has assessed that the fair value of cash and cash equivalents, trade receivables, trade payables, and other current liabilities approximate their carrying amounts.

Based on the borrowing rates currently available for bank loans with similar terms and average maturities, the fair value of finance leases at March 31, 2023 approximate their respective book values.

Based on the borrowing rates currently available for bank loans with similar terms and average maturities, the fair value of finance leases at June 30, 2023 approximate their respective book values.

The following table shows the carrying amounts and fair values of financial liabilities which are disclosed, but not measured, at fair value, including their levels in the fair value hierarchy:

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Carrying Amount

5 unchanged sentences

Total $ 2,958,745 $ — $ 2,958,598 $ — $ 3,001,996 $ — $ 2,996,935 $ —

As of March 31, 2023, the carrying values of the ABL Facility, the 2025 Secured Notes, and the 2028 Secured Notes included $ 30.1 million, $ 5.6 million, and $ 6.3 million, respectively, of unamortized debt issuance costs, which were presented as a direct reduction of the corresponding liability.

As of June 30, 2023, the carrying values of the ABL Facility, the 2025 Secured Notes, and the 2028 Secured Notes included $ 30.6 million, $ 5.0 million, and $ 6.0 million , respectively, of unamortized debt issuance costs, which were presented as a direct reduction of the corresponding liability.

As of December 31, 2022, the carrying value of the ABL Facility, the 2025 Secured Notes, and the 2028 Secured Notes included $ 31.8 million, $ 6.2 million, and $ 6.5 million, respectively, of unamortized debt issuance costs, which were presented as a direct reduction of the corresponding liability.

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Restricted Stock Awards

The following table summarizes the Company's RSA activity for the three months ended March 31, 2023 and 2022 :

The following table summarizes the Company's RSA activity for the six months ended June 30, 2023 and 2022 :

Number of Shares Weighted-Average Grant Date Fair Value Number of Shares Weighted-Average Grant Date Fair Value

Outstanding at beginning of period 35,244 $ 37.17 36,176 $ 29.30

Granted 25,483 $ 44.59 35,244 $ 37.17

Vested ( 35,244 ) $ 37.17 ( 36,176 ) $ 29.30

Outstanding at end of period 25,483 $ 44.59 35,244 $ 37.17

Compensation expense for RSAs recognized in SG&A on the condensed consolidated statements of operations was $ 0.3 million for each of the three months ended March 31, 2023 and 2022.

At March 31, 2023, there was $ 0.2 million of unrecognized compensation cost related to RSAs that is expected to be recognized over the remaining weighted average vesting period of 0.2 years.

Compensation expense for RSAs recognized in SG&A on the condensed consolidated statements of operations was $ 0.3 million and $ 0.3 million for the three months ended June 30, 2023 and 2022, respectively.

Compensation expense for RSAs recognized in SG&A on the condensed consolidated statements of operations was $ 0.6 million and $ 0.6 million for the six months ended June 30, 2023 and 2022, respectively.

At June 30, 2023, there was $ 1.0 million of unrecognized compensation cost related to RSAs that is expected to be recognized over the remaining weighted average vesting period of 0.9 years.

Time-Based RSUs

The following table summarizes the Company's Time-Based RSU activity for the three months ended March 31, 2023 and 2022 :

The following table summarizes the Company's Time-Based RSU activity for the six months ended June 30, 2023 and 2022 :

Number of Shares Weighted-Average Grant Date Fair Value Number of Shares Weighted-Average Grant Date Fair Value

4 unchanged sentences

Outstanding at end of period 678,528 $ 34.91 885,807 $ 25.93

Compensation expense for Time-Based RSUs recognized in SG&A on the condensed consolidated statements of operations was $ 1.8 million and $ 2.2 million for the three months ended March 31, 2023 and 2022, respectively.

At March 31, 2023, unrecognized compensation cost related to Time-Based RSUs totaled $ 21.6 million and is expected to be recognized over the remaining weighted average vesting period of 2.7 years.

Compensation expense for Time-Based RSUs recognized in SG&A on the condensed consolidated statements of operations was $ 2.2 million and $ 2.5 million for the three months ended June 30, 2023 and 2022, respectively.

Compensation expense for RSUs recognized in SG&A on the condensed consolidated statements of operations was $ 4.0 million and $ 4.7 million for the six months ended June 30, 2023 and 2022, respectively.

At June 30, 2023, unrecognized compensation cost related to Time-Based RSUs totaled $ 19.0 million and is expected to be recognized over the remaining weighted average vesting period of 2.5 years.

Performance-Based RSUs

The following table summarizes the Company's Performance-Based RSU award activity for the three months ended March 31, 2023 and 2022 :

The following table summarizes the Company's Performance-Based RSU award activity for the six months ended June 30, 2023 and 2022 :

Number of Shares Weighted-Average Grant Date Fair Value Number of Shares Weighted-Average Grant Date Fair Value

4 unchanged sentences

Outstanding at end of period 2,088,772 $ 41.54 1,937,609 $ 33.84

Compensation expense for Performance-Based RSUs recognized in SG&A on the condensed consolidated statements of operations was $ 5.8 million and $ 3.8 million for the three months ended March 31, 2023 and 2022, respectively.

At March 31, 2023, unrecognized compensation cost related to Performance-Based RSUs totaled $ 56.2 million and is expected to be recognized over the remaining vesting period of 2.1 years.

Compensation expense for Performance-Based RSUs recognized in SG&A on the condensed consolidated statements of operations was $ 6.9 million and $ 6.5 million for the three months ended June 30, 2023 and 2022, respectively.

Compensation expense for Performance-Based RSUs recognized in SG&A on the condensed consolidated statements of o perations was $ 12.7 million and $ 10.3 million for the six months ended June 30, 2023 and 2022, respectively.

At June 30, 2023, unrecognized compensation cost related to Performance-Based RSUs totaled $ 49.2 million and is expected to be recognized over the remaining vesting period of 1.9 years.

Certain Performance-Based RSUs cliff vest based on achievement of the relative total stockholder return ("TSR") of the Company's Common Stock as compared to the TSR of the constituents in an index at the grant date over the performance period of three years .

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Stock Options

The following table summarizes the Company's stock option activity for the three months ended March 31, 2023 :

The following table summarizes the Company's stock option activity for the six months ended June 30, 2023 :

WillScot Options Weighted-Average Exercise Price per Share Converted

3 unchanged sentences

Outstanding at end of period 534,188 $ 13.60 834,941 $ 12.87

Fully vested and exercisable options, March 31, 2023

Fully vested and exercisable options, June 30, 2023

534,188 $ 13.60 834,941 $ 12.87

The following table summarizes the Company's stock option activity for the three months ended March 31, 2022:

The following table summarizes the Company's stock option activity for the six months ended June 30, 2022:

WillScot Options Weighted-Average Exercise Price per Share Converted Mobile Mini Options Weighted-Average Exercise Price per Share

2 unchanged sentences

Outstanding at end of period 534,188 $ 13.60 1,289,824 $ 14.68

Fully vested and exercisable options, March 31, 2022

Fully vested and exercisable options, June 30, 2022

534,188 $ 13.60 1,289,824 $ 14.68

WillScot Options

Compensation expense for stock option awards, recognized in SG&A on the condensed consolidated statements of operations, was $ 0.2 million for the three months ended March 31, 2022.

Compensation expense for stock option awards, recognized in SG&A on the condensed consolidated statements of operations, was $ 0.2 million for the six months ended June 30, 2022.

NOTE 15 - Commitments and Contingencies

1 unchanged sentence

The Company assesses these matters on a case-by-case basis as they arise and establishes reserves as required.

As of March 31, 2023, with respect to these outstanding matters, the Company believes that the amount or range of reasonably possible loss will not, either individually or in the aggregate, have a material adverse effect on the consolidated financial position, results of operations, or cash flows.

As of June 30, 2023, with respect to these outstanding matters, the Company believes that the amount or range of reasonably possible loss will not, either individually or in the aggregate, have a material adverse effect on the consolidated financial position, results of operations, or cash flows.

However, the outcome of such matters is inherently unpredictable and subject to significant uncertainties.

6 unchanged sentences

All periods presented have been retrospectively revised to reflect this change within the Modular and Storage segments.

For the three months ended March 31, 2022, this resulted in approximately $ 11.1 million of revenue and $ 6.3 million of gross profit being transferred from the Modular segment to the Storage segment.

For the three months ended June 30, 2022, this resulted in approximately $ 12.4 million of revenue and $ 7.2 million of gross profit being transferred from the Modular segment to the Storage segment.

For the six months ended June 30, 2022, $ 23.6 million of revenue and $ 13.5 million of gross profit were transferred from the Modular segment to the Storage segment.

The Company defines EBITDA as net income (loss) plus interest (income) expense, income tax (benefit) expense, depreciation and amortization.

The Company reflects further adjustments to EBITDA (“Adjusted EBITDA”) to exclude certain non-cash items and the effect of what the Company considers transactions or events not related to its core and ongoing business operations.

In addition, the Chief Operating Decision Maker ("CODM") evaluates business segment performance utilizing Adjusted EBITDA as shown in the reconciliation of the Company’s consolidated income from continuing operations to Adjusted EBITDA below.

The Chief Operating Decision Maker ("CODM") evaluates business segment performance utilizing Adjusted EBITDA as shown in the reconciliation of the Company’s consolidated income from continuing operations to Adjusted EBITDA below.

Management believes that evaluating segment performance excluding such items is meaningful because it provides insight with respect to the intrinsic and ongoing operating results of the Company.

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Reportable Segments

The following tables set forth certain information regarding each of the Company’s reportable segments fo r the three months ended March 31, 2023 and 2022, respectively.

Three Months Ended March 31, 2023

The following tables set forth certain information regarding each of the Company’s reportable segments fo r the three and six months ended June 30, 2023 and 2022, respectively.

Three Months Ended June 30, 2023

(in thousands) Modular Storage Unallocated Costs Total

18 unchanged sentences

Other selected data:

Adjusted EBITDA $ 136,964 $ 109,878 $ — $ 246,842

Adjusted EBITDA from continuing operations $ 151,443 $ 109,898 $ — $ 261,341

Selling, general and administrative expense $ 79,397 $ 54,710 $ 12,703 $ 146,810

Purchases of rental equipment and refurbishments $ 50,371 $ 5,210 $ — $ 55,581

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

(in thousands) Modular Storage Unallocated Costs Total

15 unchanged sentences

Other selected data:

Adjusted EBITDA $ 99,586 $ 68,187 $ — $ 167,773

Adjusted EBITDA from continuing operations $ 122,824 $ 85,819 $ — $ 208,643

Selling, general and administrative expense $ 82,366 $ 52,492 $ 15,271 $ 150,129

Purchases of rental equipment and refurbishments $ 82,482 $ 34,282 $ — $ 116,764

The following table presents reconciliations of the Company’s income from continuing operations to Adjusted EBITDA for the three months ended March 31, 2023 and 2022, respectively:

Three Months Ended March 31,

Six Months Ended June 30, 2023

(in thousands) Modular Storage Unallocated Costs Total

Leasing and services revenue:

$ 550,366 $ 338,905 $ 889,271

Delivery and installation

139,989 79,395 219,384

Sales revenue:

16,092 3,569 19,661

13,898 5,343 19,241

Total revenues

720,345 427,212 1,147,557

Cost of leasing and services:

150,924 45,147 196,071

Delivery and installation

110,046 46,310 156,356

Cost of sales:

9,520 1,483 11,003

6,561 2,960 9,521

Depreciation of rental equipment 105,219 18,387 123,606

$ 338,075 $ 312,925 $ 651,000

Other selected data:

Adjusted EBITDA from continuing operations $ 288,407 $ 219,776 $ — $ 508,183

Selling, general and administrative expense $ 161,213 $ 112,385 $ 24,104 $ 297,702

Purchases of rental equipment and refurbishments $ 89,783 $ 12,555 $ — $ 102,338

Six Months Ended June 30, 2022

(in thousands) Modular Storage Unallocated Costs Total

Leasing and services revenue:

Leasing $ 464,823 $ 273,122 $ 737,945

Delivery and installation 126,320 70,060 196,380

Sales revenue:

New units 13,294 2,420 15,714

Rental units 19,364 4,658 24,022

Total revenues 623,801 350,260 974,061

Cost of leasing and services:

Leasing 126,776 41,669 168,445

Delivery and installation 105,521 47,596 153,117

Cost of sales:

New units 7,465 1,612 9,077

Rental units 10,327 3,043 13,370

Depreciation of rental equipment 104,503 16,275 120,778

Gross profit $ 269,209 $ 240,065 $ 509,274

Other selected data:

Adjusted EBITDA from continuing operations $ 222,410 $ 154,006 $ — $ 376,416

Selling, general and administrative expense $ 157,004 $ 104,354 $ 26,915 $ 288,273

Purchases of rental equipment and refurbishments $ 140,059 $ 54,453 $ — $ 194,512

The following table presents reconciliations of the Company’s income from continuing operations to Adjusted EBITDA for the three and six months ended June 30, 2023 and 2022, respectively:

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

(in thousands) 2023 2022 2023 2022

3 unchanged sentences

Depreciation and amortization 81,796 78,181 158,125 151,091

Currency losses, net 6,775 137

Restructuring costs, lease impairment expense and other related charges 22 263

Currency losses (gains), net 14 ( 173 ) 6,789 ( 36 )

Restructuring costs, lease impairment expense and other related charges (income) — ( 95 ) 22 168

Transaction costs — 22 — 35

2 unchanged sentences

Other 1,396 2,287 1,442 4,676

Adjusted EBITDA $ 246,842 $ 167,773

Adjusted EBITDA from continuing operations $ 261,341 $ 208,643 $ 508,183 $ 376,416

NOTE 17 - Earnings Per Share

The following table reconciles the weighted average shares outstanding for the basic calculation to the weighted average shares outstanding for the diluted calculation:

Three Months Ended

Three Months Ended Six Months Ended

June 30 June 30

(in thousands) 2023 2022 2023 2022

5 unchanged sentences

Warrants — 1,746 — 1,818

RSAs 16 18 21 22

Time-based RSUs 242 307 309 395

2 unchanged sentences

Weighted average Common Shares outstanding – dilutive 204,326 227,484 208,233 226,983

For the three months ended March 31, 2022, 555,790 shares of Performance-Based RSUs were excluded from the computation of diluted EPS because their effect would have been anti-dilutive.

The following amounts of common shares that the Company may be obligated to issue were excluded from the computation of dilutive EPS because their effect would have been anti-dilutive:

Three Months Ended Six Months Ended

June 30 June 30

(in thousands) 2023 2022 2023 2022

Time-based RSUs 210 — 211 —

Performance-based RSUs 373 1,253 187 904

Total anti-dilutive shares 583 1,253 398 904

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 1. Financial Statements