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Item 7. Management’s Discussion and Analysis

2025-02-20 compared with 2024-02-20 · 259 added, 511 removed, 258 unchanged (75% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand WillScot Mobile Mini Holdings Corp.

("WillScot Mobile Mini") operations and our present business environment.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand WillScot Holdings Corporation's ("WillScot") operations and our present business environment.

MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying notes thereto, contained in Part II, Item 8 of this report.

The discussion of results of operations in this MD&A is presented on a historical basis, as of or for the year ended December 31, 2024 or prior periods.

In connection with the closing of the merger of WillScot Corporation ("WillScot") and Mobile Mini, Inc.

("Mobile Mini") on July 1, 2020 (the "Merger"), Mobile Mini became a wholly-owned subsidiary of WillScot and the Company changed its name to WillScot Mobile Mini Holdings Corp.

WillScot Mobile Mini is the holding company for the Williams Scotsman and Mobile Mini families of companies.

On September 30, 2022, the Company completed the sale of its former Tank and Pump Solutions ("Tank and Pump") segment.

On January 31, 2023, the Company completed the sale of its UK Storage Solutions segment.

This MD&A presents the historical financial results of the former Tank and Pump segment and the former UK Storage Solutions segment as discontinued operations for all periods presented.

The divestitures of the UK Storage Solutions segment and the former Tank and Pump segment completed the Company's transition of its portfolio to core turnkey temporary space solutions in North America.

Following the completion of these transactions, the Company operates in two reportable segments as follows:

Modular Solutions ("Modular") and Storage Solutions ("Storage").

On January 31, 2023, the Company completed the sale of its United Kingdom Storage Solutions ("UK Storage Solutions") segment.

This MD&A presents the historical financial results of the former UK Storage Solutions segment as discontinued operations for all periods presented.

For further discussion regarding our results of operations for the year ended December 31, 2023, as compared to the year ended December 31, 2022, refer to Part II, Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations , in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

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

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We are a leading business services provider specializing in innovative and flexible turnkey temporary space solutions.

We offer our customers an extensive selection of space solutions with over 152,000 modular space units and over 210,000 portable storage units in our fleet.

Our diverse product offering includes modular space solutions (modular office complexes, mobile offices, classrooms, blast-resistant modules, clearspan structures and sanitation solutions) and portable storage solutions (portable storage containers and climate-controlled containers and trailers).

We also offer our customers a thoughtfully curated selection of solutions with Value-Added Products ("VAPS"), such as workstations, furniture, appliances, media packages, power and solar solutions, telematics, connectivity and data solutions, security and protection products, entrance packages, electrical and lighting products, organization and space optimization assets, perimeter solutions and other items that improve the overall customer experience.

We operate a hybrid in-house and outsourced logistics and service infrastructure that provides delivery, site work, installation, disassembly, removal and other services to our customers for an additional fee as part of our leasing and sales operations.

We service diverse end markets across all sectors of the economy throughout the United States ("US"), Canada, and Mexico.

As of December 31, 2024, our branch network included approximately 260 branch locations and additional drop lots to service our over 85,000 customers.

We offer our customers an extensive selection of “Ready to Work” temporary space solutions with over 156,000 modular space units and over 212,000 portable storage units in our fleet.

We primarily lease, rather than sell, our modular and portable storage units to customers, which results in a highly diversified and predictable recurring revenue stream.

We primarily lease, rather than sell, our space solutions to customers, which results in a highly diversified and predictable recurring revenue stream.

Over 90% of new lease orders are on our standard lease agreement, pre-negotiated master lease or national account agreements.

The initial lease periods vary, and our leases are customarily renewable on a month-to-month basis after their initial term.

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

Furthermore, given that our customers value flexibility, they consistently extend their leases or renew on a month-to-month basis such that the average effective duration of our lease portfolio, excluding seasonal portable storage units, is approximately 37 months.

Rental contracts with customers are generally based on a 28-day or monthly rate and billing cycle.

The initial lease periods vary, and our leases are customarily renewable on a month-to-month basis after their initial term and continue until cancelled by the customer or us.

Given that our customers value flexibility, they consistently extend their leases or renew on a month-to-month basis such that the average effective duration of our consolidated lease portfolio, excluding seasonal portable storage units, is approximately 41 months.

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

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

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

For the year ended December 31, 2023, key drivers of our financial performance included:

• Total revenues increased $222.1 million, or 10.4%, attributable to organic revenue growth levers in the business and due to the impact of acquisitions.

Leasing revenue increased $212.2 million, or 13.1%, delivery and installation revenue increased $8.0 million, or 1.9%, and new unit sales revenue increased $7.8 million, or 19.3%.

These increases were partially offset by a reduction in rental unit sales revenue, which decreased $5.9 million, or 11.5%.

We estimate that recent acquisitions completed in 2023 contributed approximately $59.0 million to total revenues for the year ended December 31, 2023.

Key leasing revenue drivers included:

– Average modular space monthly rental rate increa sed $153, or 16.9%, to $1,058 d riven by strong pricing performance across both segm ents.

Average modular space monthly rental rates increased by $145, or 15.0%, in the Modular segment and by $144, or 21.1%, in the Storage segment.

– Average portable storage mo nthly rental rate increased $46, or 24.0%, to $238 driven by increased pricing as a result of our price management tools and processes as well as due to higher rental rates on the acquired climate-controlled containers and refrigerated storage units, which drove approximately 5% of the 24.0% increase .

– Average utilization for p ortable storage units decreased to 73.2%, from 86.8% in 2022, driven by decreased demand in 2023 as compared to very strong demand in 2022.

Average utilization for modular space units decreased 380 basis points ("bps") to 64.7% in 2023.

– Average modular space units on rent decreased 3,986 units, or 3.8%, and average portable storage units on rent decreased 15,179 units, or 9.0%.

The decreases were mainly driven by lower construction start activity in 2023 versus record demand in 2022, and for portable storage products, also by fewer retail remodels and lower seasonal retail demand versus the prior year.

• Modular segment revenue represented 63.2% of consolidated revenue for the year ended December 31, 2023, and increased $153.6 million , or 11.4%, to $1,495.7 million .

The increase was driven by increased leasing revenue, which increased $145.4 million , or 14.6%, due to continued growth of pricing and VAPS, and increased delivery and installation revenues, which increased $10.7 million , or 3.9%.

These increases were partially offset by a decrease in sales revenue of $2.4 million , or 3.1%, driven by lower rental unit sales.

Modular revenue drivers for the year ended December 31, 2023 included:

– Modular space average monthly rental rate of $1,111 increased $145, or 15.0%, year over year representing a continuation of our long-term price optimization and VAPS penetration opportunities across our portfolio.

– Average modular space units on rent decreased 647 units, or 0.8% , year over year.

– Average modular space monthly utilization decreased 190 basis points to 65.6% for the year ended December 31, 2023, as compared to the year ended December 31, 2022.

• Storage segment revenue, which represented 36.8% of consolidated revenue for the year ended December 31, 2023, increased $68.5 million, or 8.6%, to $869.1 million.

The increase was driven by increased leasing revenue, which grew $66.9 million, or 10.6%, due to increased pricing and contributions from the recently acquired climate-controlled containers and refrigerated storage units, partially offset by lower overall units on rent.

Delivery and installation revenues decreased $2.7 million, or 1.7%, driven by decreased activity.

Rental unit sales increased $4.3 million, or 50.7% given greater fleet availability in the current year.

Storage segment revenue drivers for the year ended December 31, 2023 included:

– Portable storage average monthly rental rate of $238 increased 24.0% year over year as a result of our price management tools and processes and early benefits from increased VAPS penetration opportunities, as well as due to higher rates on the acquired climate-controlled containers and refrigerated storage units.

Excluding the impacts of the acquired climate-controlled containers and refrigerated storage units, portable storage average monthly rental rates increased $37, or 19.3%.

Modular space average monthly rental rate of $826 increased $144, or 21.1%, year over year as a result of price optimization and increased VAPS penetration.

– Average portable storage units on rent decreased 15,159, or 9.0%, year over year driven by lower demand during 2023 versus the high growth achieved in 2022 including the impact of fewer retail remodels and lower seasonal demand versus the prior year.

Average modular space units on rent decreased 3,339, or 15.0%, year over year due to lower demand.

– Average portable storage monthly utilization decreased 13.6% to 73.3% for the year ended December 31, 2023, as compared to the year ended December 31, 2022.

Average modular space monthly utilization decreased 11.3% to 61.1% for the year ended December 31, 2023, as compared to the year ended December 31, 2022.

• Generated income from continuing operations of $341.8 million for the year ended December 31, 2023, representing an increase of $65.5 million ver sus the year ended December 31, 2022.

Net Income including income from discontinued operations was $476.5 million for the year ended December 31, 2023, representing an increase of $136.9 million versus the year ended December 31, 2022 .

We remain focused on safely and frugally growing lease revenue by increasing volumes, driving VAPS penetration, and optimizing rates.

To achieve these objectives, we continue to invest in initiatives to improve customer service and increase the scope of our portfolio of turnkey space solutions.

In 2024, we supported these initiatives by:

• Introducing new VAPS, including solar panels and perimeter solutions,

• Introducing new powerful digital marketing, customer service, and sales tools to enhance the digital experience for customers,

• Launching an enhanced customer portal with expanded customer self-service capabilities, and

• Growing our portfolio of new product solutions for our customers, including climate-controlled storage and clearspan structures.

For the year ended December 31, 2024, as compared to the year ended December 31, 2023, results and key drivers of our financial performance included:

• Total revenues increased $31.0 million, or 1.3%, to $2,395.7 million for the year ended December 31, 2024.

Leasing revenue increased $5.9 million, or 0.3%, driven by increased pricing and VAPS penetration, partially offset by a decrease in total average units on rent of 33,973, or 13.3%.

Lower demand was driven largely by reductions in non-residential construction project start activity over the past two years as a result of higher interest rates.

Lower demand reduced deliveries resulting in a decrease in delivery and installation revenue of $18.3 million, or 4.2%.

New unit sales revenue increased by $26.4 million, or 54.8%, mostly related to sales activity from a modular space manufacturing business acquired in the third quarter of 2023;

and rental unit sales revenue increased $16.9 million, or 37.2%.

• Generated income from continuing operations of $28.1 million for the year ended December 31, 2024, representing a decrease of $313.7 million ver sus the year ended December 31, 2023.

The decrease included the $180.0 million termination fee paid to McGrath RentCorp ("McGrath") related to the terminated acquisition of McGrath (see "Termination of Agreement to Acquire McGrath RentCorp" under "Significant Developments" below);

a $132.5 million impairment loss on intangible asset as a result of our re-branding;

and other discrete costs of $64.8 million, including:

– $42.4 million of legal and professional fees related to the terminated acquisition of McGrath.

– $8.6 million of restructuring expense largely related to employee termination costs as a result of a cost-reduction plan implemented in June 2024 for certain centralized and redundant resources related to task localization and the unification of our go-to market structure.

– $8.2 million of integration costs related to the final systems and field harmonization contemplated under the WillScot and Mobile Mini integration plan, which combined sales and operations teams under a single leadership structure and upgraded our field service and dispatch system to better utilize our operational resources across all product lines.

• Generated Adjusted EBITDA from continuing operations of $1,063.2 million for the year ended December 31, 2024, representing an increase of $1.7 million, or 0.2%, as compared to 2023.

This increase was driven by continued expansion of most product and service line margins.

Most significantly, leasing margins increased 15.3% versus prior year and delivery and installation margins increased 12.7% versus prior year, both driven primarily by increased pricing.

SG&A expenses included in Adjusted EBITDA decreased as a percentage of revenue by 120 bps versus 2022.

• Net cash provided by operating activities increased $16.6 million to $761.2 million for the year ended December 31, 2023.

This increase was limited by the divestitures of the former Tank and Pump and UK Storage Solutions segments which both contributed to operating cash flows for the year ended December 31, 2022.

Net cash used in investing activities, excluding cash used as part of acquisitions and proceeds from the sale of discontinued operations, decreased $229.7 million to $184.7 million as a result of reduced refurbishment spending and decreased purchases

of new fleet as a result of lower utilization and due to the divestitures of the former Tank and Pump and UK Storage Solutions segments.

• Generated Free Cash Flow of $576.6 million for the year ended December 31, 2023, representing an increase of $246.3 million, or 74.5%, as compared to 2022.

This Free Cash Flow, along with the proceeds from the sale of our former UK Storage Solutions segment and additional net borrowings under the asset-based credit agreement (the "ABL Facility") were deployed to:

◦ Acquire five smaller storage and modular portfolios for $150.0 million in 2023;

◦ Acquire a national provider of cold storage solutions, a regional modular space manufacturing and leasing business, and a national provider of premium large clearspan structures for $411.6 million in 2023;

• Net cash provided by operating activities decreased $199.6 million to $561.6 million for the year ended December 31, 2024, primarily due to payments of $225.7 million for the McGrath termination fee and transaction costs from terminated acquisitions.

• Net cash used in investing activities, excluding cash used for acquisitions and proceeds from the sale of discontinued operations, increased $56.5 million to $241.1 million due to an increase in the purchase of rental equipment and refurbishments of $53.9 million as a result of increased new fleet purchases, modular refurbishments, and investments in VAPS for portable storage containers.

Climate-controlled containers represented the majority of new fleet purchases.

• Generated Adjusted Free Cash Flow of $553.9 million for the year ended December 31, 2024, representing a decrease of $22.7 million, or 4.1%, as compared to 2023.

During the year ended December 31, 2024, we deployed Free Cash Flow to:

– Acquire assets from a regional provider of modular solutions, two regional providers of climate-controlled storage units, a US national provider of premium large clearspan structures, and a US regional provider of perimeter solutions for $121.2 million.

– Repurchase $270.4 million of our Common Stock, reducing outstanding Common Stock by 7.1 million shares.

• We believe the predictability of our Free Cash Flow allows us to pursue multiple capital allocation priorities opportunistically, including investing in organic opportunities we see in the market, maintaining leverage in our stated range, opportunistically executing accretive acquisitions, and returning capital to shareholders.

In addition to using GAAP financial measurements, we use Adjusted EBITDA and Free Cash Flow, which are non-GAAP financial measures, to evaluate our operating results.

In addition to using GAAP financial measurements, to evaluate our operating results, we use Adjusted EBITDA, Adjusted Free Cash Flow, and Net Capex, which are non-GAAP financial measures.

As such, we include in this Annual Report on Form 10-K reconciliations to their most directly comparable GAAP financial measures.

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Significant Developments

Entry into an Agreement to Acquire McGrath RentCorp

On January 28, 2024, the Company, along with its newly formed subsidiaries, Brunello Merger Sub I, Inc.

(“Merger Sub I”) and Brunello Merger Sub II, LLC (“Merger Sub II”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with McGrath RentCorp ("McGrath").

Merger Sub I will merge with and into McGrath (the “First-Step Merger”), with McGrath surviving the First-Step Merger and, immediately thereafter, McGrath will merge with and into Merger Sub II (the “Second-Step Merger” and together with the First-Step Merger, the “McGrath Acquisition”), with Merger Sub II surviving the Second-Step Merger as a wholly owned subsidiary of the Company.

At the effective time of the First-Step Merger, and subject to the terms and subject to the conditions set forth in the Merger Agreement, each outstanding share of the common stock of McGrath shall be converted into the right to receive either (i) $123.00 in cash or (ii) 2.8211 shares of validly issued, fully paid and nonassessable shares of the Company’s common stock.

Under the terms of the Merger Agreement, we expect McGrath’s shareholders would own approximately 12.6% of the Company following the McGrath Acquisition.

The McGrath Acquisition has been approved by the Company and McGrath’s respective boards of directors.

The McGrath Acquisition is subject to customary closing conditions, including receipt of regulatory approval and approval by McGrath’s shareholders, and is expected to close in the second quarter of 2024.

In connection with the Merger Agreement, the Company entered into a commitment letter on January 28, 2024, which was further amended and restated on February 12, 2024 (the "Commitment Letter"), pursuant to which certain financial institutions have committed to make available to WSI, in accordance with the terms of the Commitment Letter, (i) an $875 million eight year senior secured bridge credit facility, (ii) an $875 million five year senior secured bridge credit facility and (iii) an upsize to WSI's existing $3.7 billion ABL Facility by $750 million to $4.45 billion to repay McGrath's existing credit facilities and notes, fund the cash portion of the consideration, and pay the fees, costs and expenses incurred in connection with the McGrath Acquisition and the related transactions, subject to customary conditions.

On January 31, 2023, we completed the sale of our former UK Storage Solutions segment for total cash consideration of $418.1 million.

Proceeds from the sale were used to support ongoing reinvestment in our Modular and Storage operating segments in North America and other capital allocation priorities.

Reportable Segments

Following the divestitures of the UK Storage Solutions and Tank and Pump segments, we operate in two reportable segments:

Modular Solutions ("Modular") and Storage Solutions ("Storage").

The reportable segments are aligned with how we operate and analyze our business results.

During the first quarter of 2023, the ground level office business within the Modular segment was transferred to the Storage segment, and associated revenues, expenses, and operating metrics were transferred to the Storage segment.

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

For the year ended December 31, 2022, this resulted in approximately $49.8 million of revenue and $28.5 million of gross profit being transferred from the Modular segment to the Storage segment.

In January 2024, the Company launched a unified go-to market approach to achieve local product unification within each metropolitan statistical area.

In connection with this change in operating model, the Company realigned the composition of its segments to reflect how its Chief Operating Decision Maker reviews information to make operating decisions and assess performance.

As a result, the Company concluded that its divisions represent its operating segments, which are aggregated into one reportable segment as the divisions have similar economic characteristics, offer similar products to similar customers, use similar methods to distribute products and are subject to similar competitive risks.

This change in reportable segments will be reflected in our financial statements beginning in 2024.

Customer Relationship Management ("CRM") System

On February 6, 2023, we successfully completed the harmonization of our separate Modular and Storage CRM systems onto a single unified system.

With this enhanced platform, we have a combined view of our customers and projects across the entire sales team.

Going forward, we will focus on productivity management and building a more targeted and predictive approach to anticipate and service customer demand, with continued improvement in engagement and outreach underpinned by our data warehouse.

Business Combinations

During 2023, we acquired a U.S.

national provider of cold storage solutions, which consisted primarily of approximately 2,200 climate-controlled containers and refrigerated storage trailers, a regional modular space manufacturing and leasing business, which consisted primarily of approximately 1,300 modular leasing units, and a U.S.

national provider of premium large clearspan structures for total cash consideration of $411.6 million, net of cash acquired.

Asset Acquisitions

During 2023, we also 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 $150.0 million in cash, net of cash acquired.

As of the acquisition dates, the fair value of rental equipment acquired was $147.6 million.

Termination of Agreement to Acquire McGrath RentCorp

On January 28, 2024, we entered into an agreement and plan of merger (the “Merger Agreement”) with McGrath.

On September 17, 2024, the Company and McGrath mutually agreed to terminate the Merger Agreement.

In accordance with the terms of the Merger Agreement, the Company paid McGrath a $180.0 million termination fee.

During the year ended December 31, 2024, the Company recorded $42.4 million in legal and professional fees related to terminated transactions within selling, general, and administrative (“SG&A”) expense.

Segment Reporting

In January 2024, we completed the unification of our go-to market structure by integrating our modular and storage divisions under a single leadership team organized by metropolitan statistical area ("MSA"), which enables us to consistently deliver our portfolio of solutions to our entire customer base.

In connection with this change in operating model, we realigned the composition of our operating segments.

As a result, we concluded that we have two operating segments (US and Other North America) that aggregate into one reportable segment.

Restructuring

In June 2024, we implemented a cost-reduction plan for certain centralized and redundant resources related to task localization and the unification of our go-to market structure.

During the year ended December 31, 2024, r estructuring costs incurred under this plan i ncluded employee termination costs of $8.6 million.

Mobile Mini Trade Name Impairment

In 2024, we executed a rebranding under the WillScot brand name and discontinued the use of the Mobile Mini brand name.

T he Mobile Mini indefinite-lived trade name was tested for impairment, and we recorded an impairment loss on intangible asset of $132.5 million on the consolidated statement of operations.

After the impairment charge , t he remaining net book value of the Mobile Mini trade name was $31.5 million, which is amortized over the remaining useful life of the asset.

Financing Activities

On September 25, 2023, Williams Scotsman, Inc.

(“WSI”), a subsidiary of the Company, completed a private offering of $500.0 million in aggregate principal amount of 7.375% senior secured notes due 2031 (the "2031 Secur ed Notes") to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as amended .

On June 28, 2024, we completed a private offering of $500.0 million in aggregate principal amount of 6.625% senior secured notes due 2029 (the "2029 Secur ed Notes") to qualified institutional buyers pursuant to Rule 144A .

P roceeds were used to repay approximately $495.0 million of outstanding indebtedness under the ABL Facility and certain fees and expenses.

Asset Acquisitions and Business Combination

During 2024, we acquired certain assets of three regional storage and modular companies, which consisted primarily of approximately 600 cold storage units and 800 modular units, and certain assets of a national provider of clearspan solutions for $84.5 million in cash.

As of the acquisition dates, the fair value of rental equipment acquired was $80.7 million.

During 2024, we also acquired certain assets from a US regional provider of perimeter solutions for $36.8 million in cash.

As of the acquisition date, goodwill acquired was $25.3 million, intangible assets acquired were $2.5 million, and the fair value of rental equipment acquired was $8.8 million.

The preliminary allocation of purchase price, including the valuation of acquired rental equipment and intangible assets, is based on the best estimates of management and is subject to revision as additional information is obtained.

Share Repurchases

In September 2024, our Board of Directors approved a reset of our share repurchase program authorizing us to repurchase up to $1.0 billion of our outstanding shares of Common Stock and equivalents.

During the year ended December 31, 2024, we repurchased 7,133,446 shares of Common Stock for $270.4 million.

As of December 31, 2024, $821.8 million of the approved share repurchase pool remained available.

Interest Rate Swap Agreements

In January 2023, the Company entered into two interest rate swap agreements with financial counterparties relating to $750.0 million in aggregate notional amount of variable-rate debt under the ABL Facility.

Under the terms of the agreements, the Company receives a floating rate equal to one-month term SOFR and will make payments based on a weighted average effective fixed interest rate of 3.44% on the notional amount.

The swap agreements were designated and qualified as hedges of the Company’s exposure to changes in interest payment cash flows created by fluctuations in variable interest rates on the ABL Facility.

The swap agreements terminate on June 30, 2027.

In January 2024, the Company entered into two interest rate swap agreements with financial counterparties relating to $500.0 million in aggregate notional amount of variable-rate debt under the Company's ABL Facility.

Under the terms of the agreements, the Company receives a floating rate equal to one-month term SOFR and will make payments based on a weighted average fixed interest rate of 3.70% on the notional amount.

Under the terms of the agreements, the Company receives a floating rate equal to one-month term SOFR and makes payments based on a fixed interest rate of 3.70% on the notional amount.

The swap agreements were designated and qualified as hedges of the Company's exposure to changes in interest payment cash flows created by fluctuations in variable interest rates on the ABL Facility.

The swap agreements terminate on June 30, 2027.

Share Repurchases

In May 2023, our Board of Directors approved a reset of our share repurchase program authorizing us to repurchase up to $1.0 billion of our outstanding shares of Common Stock and equivalents.

During the year ended December 31, 2023, we repurchased 18,533,819 shares of Common Stock for $810.8 million.

As of December 31, 2023, $498.2 million of the approved share repurchase pool remained available.

Similar to many other organizations, we have faced inflationary pressures over the past several years across most of our input costs such as building materials, labor, transportation and fuel.

Inflation has contributed to increased capital costs both for new units as well as for refurbishment of our existing units.

However, given our scale and our strong rate performance, we believe we have been able to navigate the inflationary environment well and have consistently driven margin improvements during this period of rising costs.

Economic Conditions

In 2024 and 2023, as a result of the decline in non-residential construction starts in the US due to higher interest rates and the impact of these higher rates on lending availability primarily on smaller projects, we experienced a decline in unit activations resulting in lower units on rent.

Lower demand in the retail and wholesale trade customer segment also negatively impacted portable storage unit demand.

Given the flexibility in our cost structure, we reacted quickly to the lower activity levels and reduced variable costs relative to our forecast.

Business Environment and Outlook

Our customers operate in a diversified set of end markets, including construction, commercial and industrial, retail and wholesale trade, energy and natural resources, education, government and institutions and healthcare.

We track several market leading indicators to predict demand, including those related to our two largest end markets, the commercial and industrial sector and the construction sector, which collectively accounted for approximately 85% of our revenues in the year ended December 31, 2023.

Core to our operating model is the ability to redeploy standardized assets across end markets, as we did over the last few years to service emerging demand in the healthcare and government sectors related to COVID-19.

We remain focused on our core priorities of growing leasing revenues by increasing units on rent, both organically and through mergers and acquisitions, delivering "Ready to Work" solutions to our customers with VAPS, and continually improving the overall customer experience.

Even in an uncertain macro-economic environment, market catalysts such as increased infrastructure spending and onshoring and reshoring, and idiosyncratic growth levers such as continued penetration of our customer base with our VAPS offering, long-term pricing tailwinds, cross-selling between our Modular and Storage segment customers, and other commercial best practice sharing between our segments provide us confidence in our continued organic growth outlook.

Our customers operate in a diversified set of end markets such as construction and infrastructure;

commercial and industrial, including retail and wholesale trade;

energy and natural resources;

and government and institutions, including education and healthcare.

We track several market leading indicators to predict demand, including those related to our two largest end markets, the commercial and industrial sector and the construction and infrastructure sector, which collectively accounted for approximately 85% of our revenues in the year ended December 31, 2024.

Even in an uncertain macro-economic environment, market catalysts such as increased infrastructure spending, onshoring and reshoring, and idiosyncratic growth levers such as continued penetration of our customer base with our VAPS offerings, long-term pricing tailwinds, cross-selling our portfolio of products, and other commercial best practice sharing within WillScot provide us confidence in our continued organic growth outlook.

Components of Our Consolidated Historical Results of Operations

Our revenue consists mainly of leasing, services and sales revenue.

We derive our leasing and services revenue primarily from the leasing of modular space and portable storage units.

Included in leasing revenue are VAPS, such as furniture, steps, ramps, basic appliances, internet connectivity devices, integral tool racking, heavy duty capacity shelving, workstations, electrical and lighting products, and other items our customers use in connection with our products.

Our revenues consist mainly of leasing and services revenue and sales revenue.

We derive our leasing and services revenue primarily from the leasing of space solutions.

Included in leasing revenue are VAPS, such as workstations, furniture, appliances, media packages, power and solar solutions, telematics, connectivity and data solutions, security and protections products, entrance packages, electrical and lighting products, organization and space optimization assets, perimeter solutions, and other items our customers use in connection with our products.

Delivery and installation revenue includes fees that we charge for the delivery, site work, installation, disassembly, unhooking and removal, and other services to our customers for an additional fee as part of our leasing and sales operations.

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The average number of units on rent during a period represents the number of units in use from the time they are leased to a customer until the time they are returned to us.

Our average monthly rental rate per unit for a period is equal to the ratio of (i) our rental income for that period including VAPS but excluding delivery and installation services and other leasing-related revenues, to (ii) the average number of lease units rented to our customers during that period.

Our average monthly rental rate per unit for a period is equal to the ratio of (i) our rental revenue for that period including VAPS but excluding delivery and installation services and other leasing-related revenues, to (ii) the average number of lease units rented to our customers during that period.

We also measure the average utilization rate of our lease units, which is the ratio of (i) the average number of units on rent to (ii) the average total number of units available for lease in our fleet during a period.

In addition to leasing revenue, we also generate revenue from sales of new and used modular space and portable storage units to our customers, as well as delivery, installation, maintenance, removal services and other incidental items related to accommodation services for our customers.

In addition to leasing revenue, we also generate revenue from sales of new and used units to our customers, as well as delivery, installation, maintenance, removal services and other incidental items related to accommodation services for our customers.

Included in our sales revenue are charges for modifying or customizing sales equipment to customers’ specifications.

We define gross profit as the difference between total revenues and cost of revenues.

Cost of Revenues and Gross Profit

Cost of revenues associated with our leasing business includes payroll and payroll-related costs for branch operations personnel, material and other costs related to the repair, maintenance, storage and transportation of rental equipment.

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Cost of revenues for our rental unit sales consist primarily of the net book value of the unit at date of sale.

We define gross profit as the difference between total revenues and cost of revenues.

Selling, General and Administrative Expense

Our selling, general and administrative (“SG&A”) expense includes all costs associated with our selling efforts, including marketing costs, marketing salaries and benefits, as well as the salary and commissions of sales personnel.

It also includes the leasing of facilities we occupy, professional fees and information systems, our overhead costs, such as salaries and other employee costs of management, administrative and corporate personnel, and integration costs associated with acquisitions and business combinations.

Our SG&A expense includes all costs associated with our selling efforts, including marketing costs, marketing salaries and benefits, as well as the salary, benefits, and commissions of sales personnel.

SG&A expense also includes the leasing of facilities we occupy, professional fees and information systems, our overhead costs, such as salaries and other employee costs of management, administrative and corporate personnel, and integration costs associated with acquisitions and business combinations.

Other Depreciation and Amortization

Other depreciation and amortization includes depreciation of our property, plant and equipment, as well as the amortization of our intangible assets.

Currency Losses, Net

Currency losses, net includes unrealized and realized gains and losses on monetary assets and liabilities denominated in foreign currencies other than our functional currency at the reporting date.

Termination Fee

On January 28, 2024, we entered into the Merger Agreement with McGrath.

On September 17, 2024, the Company and McGrath mutually agreed to terminate the Merger Agreement.

In accordance with the terms of the Merger Agreement, we paid McGrath a $180.0 million termination fee during the year ended December 31, 2024.

Impairment Loss on Intangible Asset

In 2024, we executed a rebranding under the WillScot brand name and discontinued the use of the Mobile Mini brand name.

As a result of this rebranding, we recognized an impairment charge of $132.5 million related to the Mobile Mini trade name during the year ended December 31, 2024.

Restructuring Costs

Restructuring costs include one-time termination benefits related to employee separation costs.

Currency (Gains) Losses, Net

Currency (gains) losses, net includes unrealized and realized (gains) losses on monetary assets and liabilities denominated in foreign currencies other than our functional currency at the reporting date.

Other (Income) Expense, Net

Other (income) expense, net primarily consists of the gain (loss) on disposal of non-operational property, plant and equipment, insurance proceeds, other financing related costs and other non-recurring charges.

Interest Expense

Interest expense consists of the costs of external debt including the Company’s ABL credit facility, 2025 Secured Notes, 2028 Secured Notes, 2031 Secured Notes and interest on obligations under finance leases.

Fair Value Loss on Common Stock Warrant Liabilities

In 2021, fair value loss on common stock warrant liabilities consists of non-cash gains and losses recorded related to changes in the fair value of common stock warrant liabilities as the common stock warrant liabilities are marked-to-market liabilities.

It also includes gains and losses recorded related to the settlement of common stock warrant liabilities.

Loss on Extinguishment of Debt

In 2021, using cash on hand and borrowings on the ABL Facility, we redeemed $123.5 million of our 2025 Secured Notes and recorded a loss on extinguishment of debt.

Other (income) expense, net primarily consists of (gain) loss on disposal of non-operational property, plant and equipment, insurance proceeds, (gain) loss on investments, other financing-related costs, and other non-recurring charges.

Interest Expense, Net

Interest expense, net consists of the costs of external debt, including the Company’s ABL credit facility, outstanding notes, and obligations under finance leases, as well as the impact of interest rate swap agreements and interest income from investments.

Income Tax Expense

After the sale of the UK Storage Solutions segment, we are subject to income taxes in the US, Canada, and Mexico.

We are subject to income taxes in the US, Canada, Mexico, and India.

Our overall effective tax rate is affected by a number of factors, such as the relative amounts of income we earn in differing tax jurisdictions, tax law changes, and certain non-deductible expenses such as compensation disallowance.

The rate is also affected by discrete items that may occur in any given year, such as legislative enactments.

The rate is also affected by discrete items that may occur in any given year, such as legislative enactments and tax credits.

These discrete items may not be consistent from year to year.

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Income from Discontinued Operations

Income from discontinued operations was related to the former Tank and Pump and UK Storage Solutions segments which were sold in 2022 and 2023, respectively.

Income from discontinued operations was related to the former UK Storage Solutions segment which was sold in January 2023.

Consolidated Results of Operations

Certain consolidated results of operations for th e years ended December 31, 2023, 2022, and 2021 are presented below.

Certain consolidated results of operations for the years ended December 31, 2024 and 2023 are presented below.

Years Ended December 31, 2024 vs.

2022 vs 2021 Change

2023 2022 2021

(in thousands, except share data)

Leasing and services revenue:

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Gross profit 1,301,839 1,333,870 (32,031)

Other operating expenses:

Selling, general and administrative 630,705 596,090 34,615

Other depreciation and amortization 82,829 72,921 9,908

Termination fee 180,000 — 180,000

Impairment loss on intangible asset 132,540 — 132,540

Restructuring costs 8,559 — 8,559

Currency losses, net 593 6,754 (6,161)

Other (income) expense, net (15,354) (6,673) 1,715 (8,681) (8,388)

Other expense (income), net 2,698 (15,354) 18,052

Operating income 263,915 673,459 (409,544)

Interest expense 205,040 146,278 116,358 58,762 29,920

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

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

Interest expense, net 227,311 205,040 22,271

Income from continuing operations before income tax 36,604 468,419 (431,815)

7 unchanged sentences

Net income $ 28,129 $ 476,457 $ (448,328)

Earnings per share from continuing operations - basic $ 0.15 $ 1.72 $ (1.57)

Earnings per share from continuing operations - diluted $ 0.15 $ 1.69 $ (1.54)

Weighted average shares - basic 188,101,693 198,554,885 (10,453,192)

Weighted average shares - diluted 190,292,256 201,849,836 (11,557,580)

Cash Flow Data:

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$ 1,063,160 $ 1,061,465 $ 1,695

Adjusted EBITDA from discontinued operations (a)

4,124 85,750 90,789 (81,626) (5,039)

Adjusted EBITDA from continuing and discontinued operations (a)

$ 1,065,589 $ 969,624 $ 740,393 $ 95,965 $ 229,231

Free Cash Flow (a)

$ 576,589 $ 330,334 $ 303,027 $ 246,255 $ 27,307

Adjusted Gross Profit (a)

$ 1,599,603 $ 1,392,201 $ 1,063,493 $ 207,402 $ 328,708

Capital expenditures for rental equipment $ (280,857) $ (226,976) $ (53,881)

Net CAPEX (a)

$ (233,428) $ (184,651) $ (48,777)

Adjusted Free Cash Flow (a)

$ 553,937 $ 576,589 $ (22,652)

Balance Sheet Data (end of year):

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Total shareholders’ equity $ 1,018,593 $ 1,261,250 $ (242,657)

(a) WillScot Mobile Mini presen ts Adjusted EBITDA, F ree Cash Flow, Adjusted Gross Profit and Net CAPEX, which are measurements not calculated in accordance with GAAP and are defined below in the section "Reconciliation of non-GAAP Financial Measures," because they are key metrics used by management to assess financial performance.

(a) WillScot presen ts Adjusted EBITDA from continuing operations, Net CAPEX, and Adjusted F ree Cash Flow, which are measurements not calculated in accordance with GAAP and are defined and reconciled below in the section "Reconciliation of Non-GAAP Financial Measures," because they are key metrics used by management to assess financial performance.

Our business is capital intensive, and these additional metrics allow management to further evaluate its operating performance.

See below for reconciliations of non-GAAP financial measures.

Year Ended December 31,

(in thousands, except for units on rent and monthly rental rate) 2023 2022 2021

(in thousands, except for units on rent and monthly rental rate) (a)

Modular space units on rent (average during the period) 94,780 98,650

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Average portable storage monthly rental rate $ 266 $ 235

Earnings per share - basic $ 2.40 $ 1.57 $ 0.71

Earnings per share - diluted $ 2.36 $ 1.53 $ 0.69

Weighted average shares - basic 198,554,885 216,808,577 226,518,931

Weighted average shares - diluted 201,849,836 221,399,162 232,793,902

(a) In 2024, we reclassified approximately 2,000 units that were previously reported as modular space units on rent to portable storage units on rent as these units are generally used in a dry storage application.

Additionally, based on our segment realignment, we have conformed our VAPS presentation to include all VAPS not specific to portable storage orders as modular space VAPS and recalculated average monthly rental rates.

This treatment is consistent with prior treatment in our previous Modular Segment.

All historical product operating key performance indicators have been recast to be presented on a comparable basis for all periods.

Comparison of Years Ended December 31, 2024 and 2023

Total revenue increased $31.0 million, or 1.3%, to $2,395.7 million for the year ended December 31, 2024 from $2,364.8 million for the year ended December 31, 2023.

Leasing revenue increased $212.2 million, or 13.1%, as compared to 2022 driven by improved pricing and value-added products penetration, partially offset by a decrease of 19,165, or 7.0%, in total average modular space and portable storage units on rent.

Delivery and installation revenues increased $8.0 million, or 1.9%, due to increased pricing across both segments.

New unit sales increased $7.8 million, or 19.3%, and rental unit sales decreased $5.9 million, or 11.5%.

Leasing revenue increased $5.9 million, or 0.3%, as compared to 2023 driven by improved pricing and VAPS penetration and the addition of climate-controlled storage containers to our portfolio, partially offset by a decrease in total average units on rent of 33,973, or 13.3%.

Total VAPS revenue, which is included in leasing revenue, increased $5.7 million, or 1.5%, to $397.6 million for the year ended December 31, 2024 from $391.9 million for the year ended December 31, 2023.

New unit sales revenue increased $26.4 million, or 54.8%, mostly related to sales activity from a modular space manufacturing business we acquired in the third quarter of 2023, and rental unit sales revenue increased $16.9 million, or 37.2%, primarily driven by a single large project in the second quarter and increased overall rental unit sales activity.

Partially offsetting these revenue increases, delivery and installation revenue decreased $18.3 million, or 4.2%, due to decreased delivery activity.

Total average units on rent for the years ended December 31, 2024 and 2023 were 221,235 and 255,208, respectively.

Modular space average units on rent decreased 3,986 units, or 3.8%, and portable storage average units on rent decreased by 15,179 units, or 9.0%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022.

The average modular space unit utilization rate during the year ended December 31, 2023 was 64.7%, as compared to

68.5% during 2022.

Modular space average units on rent decreased 3,870 units, or 3.9%, and portable storage average units on rent decreased 30,103 units, or 19.2%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

The average modular space unit utilization rate during the year ended December 31, 2024 was 61.9%, as compared to 64.4% during 2023.

The average portable storage unit utilization rate during the year ended December 31, 2024 was 60.0%, as compared to 73.4% during 2023.

Modular space average monthly rental rates increased 16.9% to $1,058 for the year ended December 31, 2023.

Average portable storage monthly rental rates of $238 represented an increase of $46, or 24.0%, compared to the year ended December 31, 2022.

Increases were driven by a continuation of the long-term price optimization and VAPS penetration opportunities across our Modular segment as well as by application of these same price management tools and processes across the Storage segment and from early benefits from increased VAPS penetration opportunities on our basic VAPS offerings in the Storage segment, which began in the second quarter of 2022.

Lower demand was driven largely by reductions in non-residential construction project start activity over the past two years as a result of higher interest rates.

Lower demand in the retail and wholesale trade customer segment also negatively impacted portable storage unit demand.

Modular space average monthly rental rates increased $86, or 7.8%, to $1,185 for the year ended December 31, 2024.

Increases were driven by a continuation of the long-term price optimization and VAPS penetration opportunities.

Average portable storage monthly rental rates of $266 represented an increase of $31, or 13.2%, compared to the year ended December 31, 2023, as a result of our price management tools and processes, benefits from increased VAPS penetration

opportunities, and higher rental rates on the climate-controlled containers acquired in 2024 and the third and fourth quarters of 2023.

Gross Profit:

Gross profit increased $198.4 million, or 17.5%, to $1,333.9 million for the year ended December 31, 2023 from $1,135.5 million for the year ended December 31, 2022.

The increase in gross profit is a result of a $190.6 million increase in leasing gross profit, a $13.5 million increase in delivery and installation gross profit, and a $3.2 million increase of new and rental unit sale margins.

Increases were primarily a result of increased revenues due to favorable average monthly rental rates and delivery and installation pricing across both portable storage and modular space units, which offset lower unit on rent volumes.

Cost of leasing and services increased by $16.1 million, or 2.3%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, driven by a $23.9 million, or 10.3%, increase in labor costs, a $4.8 million, or 5.1%, increase in vehicle, equipment and other costs, and a $3.2 million, or 3.2%, increase in materials costs, partially offset by a $15.9 million, or 5.8%, decrease in subcontractor costs.

Sales Revenue increased by $1.9 million, or 2.0%, to $93.7 million for the year ended December 31, 2023, while cost of sales decreased by $1.3 million, or 2.6%, resulting in improved sales gross profit margins.

The year over year change was mainly driven by increased new unit sales margin.

Increases in gross profit were partially offset by increased depreciation of $9.0 million, or 3.5%, as a result of capital investments made over the past twelve months.

Gross profit decreased $32.0 million, or 2.4%, to $1,301.8 million for the year ended December 31, 2024 from $1,333.9 million for the year ended December 31, 2023.

The decrease in gross profit was a result of a $36.4 million increase in depreciation of rental equipment and a $30.1 million decrease in delivery and installation gross profit.

These decreases in gross profit were partially offset by a $19.3 million increase in leasing gross profit and increased new and rental unit sale gross profit of $15.1 million.

The increase in leasing gross profit was a result of increased revenues due to favorable average monthly rental rates including VAPS across both portable storage and modular space units, which offset lower units on rent.

Cost of leasing and services decreased by $1.6 million, or 0.2%, for the year ended December 31, 2024 compared to the year ended December 31, 2023, driven by a $12.6 million, or 12.1%, decrease in materials costs and a $8.0 million, or 3.1%, decrease in subcontractor costs.

These decreases were partially offset by an $18.2 million, or 7.1%, increase in labor costs.

Cost of sales increased by $28.2 million, or 56.9%, to $77.8 million, which directionally aligns with increased sales revenue of $43.3 million, or 46.2%, for the year ended December 31, 2024.

Our gross profit percentage was 54.3% and 56.4% for the years ended December 31, 2024 and 2023, respectively.

Our gross profit percentage, excluding the effects of depreciation ("adjusted gross profit percentage"), was 67.6% and 65.0% for the years ended December 31, 2023 and 2022, respectively.

These increases were driven primarily by continued price optimization within leasing and execution of VAPS penetration opportunities that have outpaced increases in cost of leasing and services.

This decrease, as referenced above, was mainly driven by lower utilization rates, specifically on portable storage products.

Gross profit percentage was also impacted by lower delivery and installation margins and an increase in new and rental unit sales, which generated lower margins.

SG&A Expense:

SG&A expense increased $28.7 million, or 5.1%, to $596.1 million for the year ended December 31, 2023, compared to $567.4 million for the year ended December 31, 2022.

Real estate and occupancy costs increased $10.9 million, or 14.6%, travel expenses increased $4.6 million, or 25.1%, due to increased travel and training, service agreements and professional fees increased $3.9 million, or 5.1%, and non-income business taxes increased $3.5 million, or 47.4%.

Our provision for credit losses increased $12.2 million, or 108.7%.

Stock compensation expense increased $4.9 million to $34.5 million for the year ended December 31, 2023, compared to $29.6 million for the year ended December 31, 2022.

Partially offsetting these increases, integration expenses decreased $5.1 million, or 33.1%, to $10.4 million for the year ended December 31, 2023, compared to $15.5 million for the year ended December 31, 2022.

Employee SG&A excluding stock compensation decreased $10.8 million, or 4.0%.

SG&A expense increased $34.6 million, or 5.8%, to $630.7 million for the year ended December 31, 2024, as compared to $596.1 million for the year ended December 31, 2023.

Discrete expenses for certain one-time projects, primarily legal and professional fees related to transaction costs from terminated acquisitions, increased $41.8 million.

Real estate and occupancy costs increased $14.8 million, or 17.2%, and stock compensation expense increased $1.5 million to $36.0 million for the year ended December 31, 2024, as compared to $34.5 million for the year ended December 31, 2023.

These increases were partially offset by a $9.4 million, or 3.7%, decrease in employee costs driven primarily by reduced variable compensation;

a $6.6 million, or 8.3%, decrease in service agreements and professional fees;

a $4.7 million, or 20.1%, decrease in the provision for credit losses, net of write offs;

and a $4.2 million, or 18.3%, decrease in travel costs.

Adjusted EBITDA:

Adjusted EBITDA increased $1.7 million, or 0.2%, to $1,063.2 million for the year ended December 31, 2024, from $1,061.5 million for the year ended December 31, 2023.

The increase was driven by a $19.3 million increase in leasing gross profit, a $15.1 million increase in new and rental unit sales gross profit, and decreased SG&A expense, excluding discrete costs, of $6.3 million, or 1.2%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

The increase in was partially offset by decreased delivery and installation gross profit of $30.1 million for the year ended December 31, 2024 driven by reduced delivery and return volumes and rates, as well as, insurance recoveries received in 2023 related to a 2022 hurricane.

Other Depreciation and Amortization:

Other depreciation and amortization increased $10.5 million, or 16.9%, to $72.9 million for the year ended December 31, 2023, compared to $62.4 million for the year ended December 31, 2022.

The increase was a result of our recent investments in our CRM system and other infrastructure improvements across our branch networks.

Other depreciation and amortization increased $9.9 million, or 13.6%, to $82.8 million for the year ended December 31, 2024, as compared to $72.9 million for the year ended December 31, 2023, primarily related to the amortization of the Mobile Mini trade name in 2024.

Termination Fee:

We paid a termination fee of $180.0 million to McGrath related to the termination of the Merger Agreement during the year ended December 31, 2024.

This fee was treated as an operating expense.

Impairment Loss on Intangible Asset:

Impairment loss on intangible asset was $132.5 million for the year ended December 31, 2024 related to the impairment of the Mobile Mini trade name based on the Company's plan to rebrand under a single WillScot brand name and discontinue the use of the Mobile Mini trade name.

Restructuring Costs:

Restructuring costs of $8.6 million for the year ended December 31, 2024 were primarily due to employee termination costs as a result of a cost-reduction plan implemented in June 2024 for certain centralized and redundant resources related to task localization and the unification of our go-to market structure.

Currency Losses, Net:

Currency losses, net increased by $5.9 million to $6.8 million for the year ended December 31, 2023 compared to $0.9 million for the year ended December 31, 2022.

The increase in currency losses, net, was primarily attributable to a loss on the settlement of the contingent foreign currency forward contract relating to the sale of the former UK Storage Solutions segment.

Other (Income) Expense, Net:

Other income, net was $15.4 million for the year ended December 31, 2023 compared to $6.7 million for the year ended December 31, 2022.

The increase in other income, net was related to the gain on sale of fixed assets related to a real estate sale transaction during the year ended December 31, 2023.

Interest Expense:

Interest expense increased $58.8 million, or 40.2%, to $205.0 million for the year ended December 31, 2023 from $146.3 million for the year ended December 31, 2022.

The increase in interest expense was a result of higher overall weighted average interest rates as a result of increased benchmark rates and higher outstanding debt balances.

Currency losses, net decreased by $6.2 million to $0.6 million for the year ended December 31, 2024 as compared to $6.8 million for the year ended December 31, 2023.

This change was primarily attributable to a $7.7 million loss in 2023 on the settlement of the contingent foreign currency forward contract relating to the sale of the former UK Storage Solutions segment in January 2023.

Other Expense (Income), Net:

Other expense, net was $2.7 million for the year ended December 31, 2024 compared to other income, net of $15.4 million for the year ended December 31, 2023.

This change was primarily attributable to a gain on sale of fixed assets related to a real estate sale transaction during the year ended December 31, 2023 and insurance recoveries received in 2023 related to Hurricane Ian in the Gulf Coast area of the United States in 2022.

Interest Expense, Net:

Interest expense, net increased $22.3 million, or 10.9%, to $227.3 million for the year ended December 31, 2024 from $205.0 million for the year ended December 31, 2023.

The increase in interest expense was a result of higher outstanding debt balances, partially offset by lower overall weighted average interest rates as a result two interest rate swap agreements executed in January 2024.

See Note 10 to the consolidated financial statements for further discussion of our debt.

Income Tax Expense:

Income tax expense increased $37.7 million to $126.6 million for the year ended December 31, 2023 compared to $88.9 million for the year ended December 31, 2022.

The increase in income tax expense was driven by an increase in income from continuing operations before income tax for the year ended December 31, 2023 as compared to the year ended December 31, 2022.

Income Tax Expense from Continuing Operations:

Income tax expense decreased $118.1 million to $8.5 million for the year ended December 31, 2024 as compared to $126.6 million for the year ended December 31, 2023.

The decrease in income tax expense was driven by a decrease in income from continuing operations before income tax for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

Income from Discontinued Operations:

Income from discontinued operations increased $71.4 million to $134.6 million for the year ended December 31, 2023 compared to $63.2 million for the year ended December 31, 2022.

The increase in income from discontinued operations was driven by the increase in gain on sale of discontinued operations of $140.6 million to a total of $176.1 million for the year ended December 31, 2023 compared to $35.5 million for the year ended December 31, 2022, partially offset by having no contribution from the former Tank and Pump segment and only one month of activity for the former UK Storage Solutions segment in 2023 and an increase in income tax expense from discontinued operations.

Comparison of Years Ended December 31, 2022 and 2021

Total revenue increased $469.6 million, or 28.1%, to $2,142.6 million for the year ended December 31, 2022 from $1,673.0 million for the year ended December 31, 2021.

Leasing revenue increased $369.2 million, or 29.5%, as compared to 2021 driven by an increase of 37,294, or 15.7%, total average modular space and portable storage units on rent and improved pricing and value-added products.

Delivery and installation revenues increased $108.0 million, or 33.6%, due to increased overall activity and higher pricing.

New unit sales decreased $6.7 million, or 14.2%, and rental unit sales decreased $0.9 million, or 1.8%.

Total average modular space and portable storage units on rent for the years ended December 31, 2022 and 2021 were 274,373 and 237,079, respectively.

The increase was primarily driven by strong customer demand within the storage segment and due to acquisitions.

In total, modular space average units on rent increased 3,504 units, or 3.5%, for the year ended December 31, 2022 as compared to the year ended December 31, 2021.

Modular space average monthly rental rates increased 18.3% to $905 for the year ended December 31, 2022.

Improved pricing was driven by a continuation of the long-term price optimization and VAPS penetration opportunities across our portfolio.

Portable storage average units on rent increased by 33,790 units, or 24.9%, for the year ended December 31, 2022.

Average portable storage monthly rental rates of $192 represented an increase of $37, or 23.9%, compared to the year ended December 31, 2021.

This increase was driven by the accretive impact of higher rates from the Mobile Mini portable storage fleet.

The average modular space unit utilization rate during the year ended December 31, 2022 was 68.5%, as compared to 69.2% during 2021.

The average portable storage unit utilization rate during the year ended December 31, 2022 was 86.8%, as compared to 80.1% during 2021.

Gross Profit:

Gross profit increased $290.8 million, or 34.4%, to $1,135.5 million for the year ended December 31, 2022 from $844.7 million for the year ended December 31, 2021.

The increase in gross profit is a result of a $274.9 million increase in leasing gross profit, increased delivery and installation gross profit of $52.9 million, and increased new and rental unit sale margins of $0.9 million.

Cost of leasing and services increased by $149.4 million, or 27.2%, to $699.5 million for the year ended December 31, 2022 from $550.1 million the year ended December 31, 2021, driven by a $59.3 million, or 34.9%, increase in labor costs, a $56.1 million, or 26.1%, increase in subcontractor costs, a $23.8 million, or 33.7%, increase in vehicle, equipment and other costs, and a $10.2 million, or 10.8%, increase in material costs.

Cost of sales decreased by $8.5 million, or 14.3%, which is in line with decreased sales revenues of 7.6% for the year ended December 31, 2022, resulting in improved sales gross profit margins.

The year over year changes in each of these cost components was consistent with historical trends and management's expectations given the change in sales volume and inflationary pressures impacting our business.

These increases were partially offset by increased depreciation of $37.9 million as a result of acquired fleet and capital investments made over the past twelve months in our existing rental equipment.

Our gross profit percentage was 53.0% and 50.5% for the years ended December 31, 2022 and 2021, respectively.

Our gross profit percentage, excluding the effects of depreciation ("adjusted gross profit percentage"), was 65.0% and 63.6% for the years ended December 31, 2022 and 2021, respectively.

SG&A Expense:

SG&A expense increased $87.0 million, or 18.1%, to $567.4 million for the year ended December 31, 2022, compared to $480.4 million for the year ended December 31, 2021.

For 2022, SG&A expense for Modular and Storage totaled $304.9 million and $215.7 million respectively.

Employee costs excluding stock compensation increased $57.6 million, or 27.3%, driven by a 12% increase in SG&A headcount to support both organic and inorganic growth.

Legal and professional fees increased $23.8 million, or 45.5%.

Stock compensation expense increased $10.6 million to $29.6 million for the year ended December 31, 2022, compared to $19.0 million for the year ended December 31, 2021.

Integration costs decreased $12.9 million to $15.5 million for the year ended December 31, 2022, compared to $28.4 million for the year ended December 31, 2021.

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

Other Depreciation and Amortization:

Other depreciation and amortization increased $0.6 million, or 1.0%, to $62.4 million for the year ended December 31, 2022, compared to $61.8 million for the year ended December 31, 2021.

Currency Losses, net:

Currency losses, net increased by $0.5 million to a $0.9 million loss for the year ended December 31, 2022 compared to $0.4 million for the year ended December 31, 2021.

The increase in currency losses, net, was primarily attributable to the impact of foreign currency exchange rate changes on intercompany receivables and payables denominated in a currency other than the subsidiaries’ functional currency.

Other (Income) Expense, Net:

Other (income) expense, net was $6.7 million of income for the year ended December 31, 2022 and $1.7 million of expense for the year ended year ended December 31, 2021.

The increase in other

(income) expense, net is primarily related to insurance recoveries received in 2022 related to Hurricane Ida in the Gulf Coast ares of the United States in 2021.

Interest Expense:

Interest expense increased $29.9 million, or 25.7%, to $146.3 million for the year ended December 31, 2022 from $116.4 million for the year ended December 31, 2021.

The increase was driven by increased average borrowings to support our capital allocation priorities, as well as an increase in interest rates during 2022.

Fair Value Loss on Common Stock Warrant Liabilities:

For the year ended year ended December 31, 2021, the fair value loss on common stock warrant liabilities of $26.6 million was primarily attributable to the change in estimated fair value of common stock warrant liabilities.

Loss on Extinguishment of Debt:

For the year ended year ended December 31, 2021, we recorded a loss on extinguishment of debt of $6.0 million related to the redemption premium and write off of unamortized deferred financing costs associated with the redemption of $123.5 million of our 2025 Secured Notes.

Income Tax Expense:

Income tax expense increased $52.3 million to $88.9 million for the year ended December 31, 2022 compared to a $36.5 million for the year ended December 31, 2021.

The increase in income tax expense was a result of higher pre-tax income partially offset with a reduction of the valuation allowance for deferred tax assets.

Business Segments

The Company operates in two reportable segments as follows:

Modular and Storage.

Modular represents the activities of the North America modular business, excluding ground level offices, which were transferred to the Storage segment during the first quarter of 2023.

Storage represents the activities of the North America portable storage and ground level office business.

As part of the transfer of the ground level offices to Storage, we also adjusted the average modular space monthly rental rate in the Storage segment to only include VAPS specifically applicable to ground level offices, which has also been reflected in the total average modular space monthly rental rate.

The following tables and discussion summarize our reportable segment financial information for the years ended December 31, 2023, 2022 and 2021 .

Business Segment Results

Years Ended December 31, 2023, 2022 and 2021

Year Ended December 31, 2023

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

Modular Storage Total

Revenue $ 1,495,666 $ 869,101 $ 2,364,767

Gross profit $ 700,226 $ 633,644 $ 1,333,870

Adjusted EBITDA $ 598,354 $ 463,111 $ 1,061,465

Capex for rental equipment $ 184,993 $ 41,612 $ 226,605

Average modular space units on rent 81,870 18,952 100,822

Average modular space utilization rate 65.6 % 61.1 % 64.7 %

Average modular space monthly rental rate $ 1,111 $ 826 $ 1,058

Average portable storage units on rent 496 153,890 154,386

Average portable storage utilization rate 62.5 % 73.3 % 73.2 %

Average portable storage monthly rental rate $ 251 $ 238 $ 238

Year Ended December 31, 2022

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

Revenue $ 1,342,033 $ 800,590 $ 2,142,623

Gross profit $ 583,837 $ 551,645 $ 1,135,482

Adjusted EBITDA $ 508,343 $ 375,531 $ 883,874

Capex for rental equipment $ 279,079 $ 118,297 $ 397,376

Average modular space units on rent 82,517 22,291 104,808

Average modular space utilization rate 67.5 % 72.4 % 68.5 %

Average modular space monthly rental rate $ 966 $ 682 $ 905

Average portable storage units on rent 516 169,049 169,565

Average portable storage utilization rate 58.7 % 86.9 % 86.8 %

Average portable storage monthly rental rate $ 208 $ 192 $ 192

Year Ended December 31, 2021

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

Revenue $ 1,120,483 $ 552,497 $ 1,672,980

Gross profit $ 471,656 $ 373,047 $ 844,703

Adjusted EBITDA $ 404,577 $ 245,027 $ 649,604

Capex for rental equipment $ 187,495 $ 45,426 $ 232,921

Average modular space units on rent 79,879 21,425 101,304

Average modular space utilization rate 67.1 % 78.2 % 69.2 %

Average modular space monthly rental rate $ 820 $ 561 $ 765

Average portable storage units on rent 7,312 128,463 135,775

Average portable storage utilization rate 68.8 % 80.9 % 80.1 %

Average portable storage monthly rental rate $ 131 $ 156 $ 155

Modular Segment

Comparison of Years Ended December 31, 2023 and 2022

Total revenue increased $153.6 million, or 11.4%, to $1,495.7 million for the year ended December 31, 2023 from $1,342.0 million for the year ended December 31, 2022.

The increase was primarily the result of increased leasing revenue of $145.4 million, or 14.6%, compared to 2022, and increased delivery and installation revenue of $10.7 million, or 3.9%, compared to 2022.

Average modular space monthly rental rates increased 15.0% for the year ended December 31, 2023 to $1,111 driven primarily by increased pricing on new deliveries.

Average modular space units on rent decreased by 647 units, or 0.8%.

Average portable storage monthly rental rates increased 20.7% for the year ended December 31, 2023 to $251 driven by our price management tools, processes and early benefits from increased VAPS penetration opportunities on our basic VAPS offerings, which began in the second quarter of 2022.

Gross Profit:

Gross profit increased $116.4 million, or 19.9%, to $700.2 million for the year ended December 31, 2023 from $583.8 million for the year ended December 31, 2022.

The increase in gross profit was driven higher leasing gross profit, which increased $107.1 million, or 14.9%, driven by improved pricing and by a $7.8 million increase in delivery and installation gross profit.

These increases in gross profit for the year ended December 31, 2023 were further complemented by a $4.7 million increase in new unit sales gross profit, offset by a $4.7 million decrease in rental unit sales gross profit.

Cost of leasing and services increased by $41.2 million, or 8.3%, for the year ended December 31, 2023 versus the year ended December 31, 2022, driven by a $10.2 million, or 13.5%, increase in material costs, a $21.4 million, or 13.5%, increase in labor costs, a $4.6 million, or 2.2%, increase in subcontractor costs, and a $5.0 million, or 9.5%, increase in vehicle, equipment and other costs.

Cost of sales decreased by $2.3 million, or 5.6%, which is in line with decreased sales revenues of 3.1% for the year ended December 31, 2023.

The year over year changes in each of these cost components was consistent with historical trends and management's expectations given the respective changes in sales volume.

The increase in gross profit was also partially driven by a $1.6 million decrease in depreciation of rental equipment as a result of lower capital investments made in refurbishments of rental equipment over the past twelve months

Adjusted EBITDA:

Adjusted EBITDA increased $90.0 million, or 17.7%, to $598.4 million for the year ended December 31, 2023 from $508.3 million for the year ended December 31, 2022.

The increase was driven by higher leasing

gross profit discussed above.

SG&A, excluding discrete costs, increased $14.5 million, or 4.6%, for the year ended December 31, 2023 compared to the year ended December 31, 2022 driven primarily by a $2.4 million, or 5.7%, increase in service agreements and professional fees, a $5.2 million, or 9.8%, increase in real estate costs, a $4.2 million, or 32.7%, increase in travel costs, a $2.2 million, or 43.6%, increase in advertising costs, a $2.1 million, or 30.8%, increase in taxes and fees, a $7.1 million, or 81.9%, increase to the provision for credit losses, a $3.0 million, or 66.3%, increase in employee insurance costs, and a $5.9 million increase in salaries.

These increases were partially offset by a $10.6 million decrease in variable compensation.

Capex for rental equipment:

purchases of rental equipment decreased $94.1 million, or 33.7%, to $185.0 million for the year ended December 31, 2023 from $279.1 million for the year ended December 31, 2022 driven by reduction in fleet purchases and successful efforts to reduce our refurbishment costs through better unit selection and work scope during 2023.

Comparison of Years Ended December 31, 2022 and 2021

Total revenue increased $221.6 million, or 19.8%, to $1,342.0 million for the year ended December 31, 2022 from $1,120.5 million for the year ended December 31, 2021.

The increase was primarily driven by increased leasing revenue of $164.6 million, or 19.9%, compared to 2021, increased delivery and installation revenue of $58.9 million, or 27.6% compared to 2021 and partially offset by decreased sales revenue of $2.0 million, or 2.6%, compared to 2021.

Average modular space monthly rental rates increased 17.8% for the year ended December 31, 2022 to $966 driven by continuation of the long-term price optimization and VAPS penetration opportunities across our portfolio.

Improved pricing was aided by higher volumes as average modular space units on rent increased by 2,638 units, or 3.3%, year over year driven by acquisitions.

Gross Profit:

Gross profit increased $112.2 million, or 23.8%, to $583.8 million for the year ended December 31, 2022 from $471.7 million for the year ended December 31, 2021.

The increase in gross profit was driven by higher leasing gross profit, which increased $110.9 million or 18.2%, driven by improved volume, pricing and VAPS.

The increase in gross profit from leasing for the year ended December 31, 2022 was further complemented by a $28.2 million increase in delivery and installation gross profit primarily driven by increased pricing, a $3.2 million increase in rental unit sales gross profit, and a $0.6 million increase in new unit sales gross profit.

In addition, cost of leasing and services increased by $84.5 million, or 20.6%, for the year ended December 31, 2022 versus the year ended December 31, 2021, driven by a $3.5 million, or 1.7%, increase in subcontractor costs, and a $19.6 million, or 14.1%, increase in labor costs, partially offset by a $9.9 million, or 11.6%, decrease in material cost and a $1.3 million, or 2.4%, decrease in vehicle, equipment and other costs.

Cost of sales decreased by $5.8 million, or 12.2%, which is in line with the decreased sales revenues of 2.6% for year ended December 31, 2022.

The increase in gross profit from leasing revenues was partially offset by a $30.6 million increase in depreciation of rental equipment primarily as a result of capital investments made over the past twelve months in our existing rental equipment for the year ended December 31, 2022.

Adjusted EBITDA:

Adjusted EBITDA increased $103.8 million, or 25.6%, to $508.3 million for the year ended December 31, 2022 from $404.6 million for the year ended December 31, 2021.

The increase was driven by higher leasing gross profits discussed above, partially offset by increases in SG&A, excluding discrete and other items of $48.8 million.

SG&A increases were primarily related to increases in salaries and variable compensation of $12.1 million and $8.9 million, respectively, service agreement and professional fee increases of $13.9 million, real estate and occupancy costs increases of $7.0 million, and increased travel expenses of $6.1 million.

Capex for rental equipment:

Capex for rental equipment increased $91.6 million, or 48.8%, to $279.1 million for the year ended December 31, 2022 from $187.5 million for the year ended December 31, 2021.

The increase was mainly driven by increased spending on refurbishments and fleet and VAPS purchases.

Storage Segment

Comparison of Years Ended December 31, 2023 and 2022

Total revenue increased $68.5 million, or 8.6%, to $869.1 million for the year ended December 31, 2023 from $800.6 million for the year ended December 31, 2022.

The increase was primarily driven by increased leasing revenue of $66.9 million, or 10.6%, compared to 2022, partially offset by decreased delivery and installation revenue of $2.7 million, or 1.7%, compared to 2022.

Average portable storage monthly rental rates increased 24.0% for the year ended December 31, 2023 to $238 as a result of our price management tools.

Average portable storage units on rent decreased by 15,159 units, or 9.0%, year over year mainly driven by lower demand.

Average modular space monthly rental rates increased 21.1% for the year ended December 31, 2023 to $826 driven by the continuation of our long-term price optimization initiative and VAPS penetration opportunities across our portfolio.

Average modular space units on rent decreased by 3,339 units, or 15.0%.

Gross Profit:

Gross profit increased $82.0 million, or 14.9%, to $633.6 million for the year ended December 31, 2023 from $551.6 million for the year ended December 31, 2022.

The increase in gross profit was driven by an $83.5 million increase in leasing gross profit and an increase of $5.7 million in delivery and installation gross profit.

The increase in gross profit from leasing and delivery and installation revenues was partially offset by a $10.6 million increase in depreciation of

rental equipment primarily as a result of capital investments made over the past twelve months of additional rental equipment for the year ended December 31, 2023.

Cost of leasing and services decreased by $25.1 million, or 12.3%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022, driven by a $7.0 million, or 27.7%, decrease in material costs, a $20.4 million, or 32.9%, decrease in subcontractor costs, partially offset by a $2.6 million, or 3.4%, increase in labor costs.

Cost of sales increased by $1.0 million, or 11.0%, as sales revenues increased $4.3 million, or 29.0%, driving improved sales gross profit margins for the year ended December 31, 2023.

The year over year changes in each of these cost components was consistent with historical trends and management's expectations given the respective changes in sales volume and inflationary pressures impacting our business.

These increases were partially offset by increased depreciation of $10.6 million, or 30.0%, as a result of capital investments made over the past twelve months in rental equipment including acquired fleet.

Adjusted EBITDA:

Adjusted EBITDA increased $87.6 million, or 23.3%, to $463.1 million for the year ended December 31, 2023 from $375.5 million for the year ended December 31, 2022.

The increase was driven by higher leasing gross profits discussed above, partially offset by an increase in SG&A costs, excluding discrete and other items of $15.3 million.

The SG&A increase was driven by an increase of $5.8 million in real estate and occupancy costs, an increase of $3.9 million in salaries and wages, and an increase of $1.5 million in service agreements and professional fees.

Capex for rental equipment:

Capex for rental equipment decreased $76.7 million, or 64.8%, to $41.6 million for the year ended December 31, 2023 from $118.3 million for the year ended December 31, 2022 driven by a reduction in container purchases during the year given lower utilization and demand.

Comparison of Years Ended December 31, 2022 and 2021

Total revenue increased $248.1 million, or 44.9%, to $800.6 million for the year ended December 31, 2022 from $552.5 million for the year ended December 31, 2021.

The increase was primarily driven by increased leasing revenue of $204.6 million, or 48.2%, compared to 2021 , and increased delivery and installation revenue of $49.1 million, or 45.7%, compared to 2021 .

Average portable storage monthly rental rates increased 23.1% for the year ended December 31, 2022 to $192 as a result of our price management tools and processes, further supported by high utilization, and by an acceleration earlier into the third quarter of our seasonal retail business.

Average portable storage units on rent increased by 40,586 units, or 31.6%, year over year driven by increases in organic activity of approximately 15%, or 19,500 units on rent, including an acceleration earlier into the third quarter of our seasonal retail business.

The remaining increase was driven by approximately 15,000 units on rent added in recent acquisitions and approximately 6,000 units of the increase was due to the transfer of approximately 12,000 portable storage units on rent from the Modular segment, which occurred in the third quarter of 2021.

Average modular space monthly rental rates increased 21.6% for the year ended December 31, 2022 to $682 driven by the continuation of our long-term price optimization initiative and VAPS penetration opportunities across our portfolio.

Average modular space units on rent increased by 866 units, or 4.0%, year over year, of which approximately 1,100 was acquisition driven.

Gross Profit:

Gross profit increased $178.6 million, or 47.9%, to $551.6 million for the year ended December 31, 2022 from $373.0 million for the year ended December 31, 2021.

The increase in gross profit was driven by a $164.0 million increase in leasing gross profit driven by improved volume, pricing and VAPS.

The increase in gross profit from leasing for the year ended December 31, 2022 was further complemented by an increase of $24.8 million in delivery and installation gross profit primarily driven by increased pricing, and a $0.1 million increase in new unit sales gross profit.

The increase in gross profit from leasing for the year ended December 31, 2022 was partially offset by a $3.0 million decrease in rental unit sales gross profit.

In addition, cost of leasing and services increased by $64.9 million, or 46.4%, for the year ended December 31, 2022 versus the year ended December 31, 2021, driven by a $21.9 million, or 54.7%, increase in subcontractor costs, a $9.7 million, or 61.4%, increase in material costs, a $19.8 million, or 35.8%, increase in labor costs, and a $12.3 million, or 41.3%, increase in vehicle, equipment and other costs.

Cost of sales decreased by $2.7 million, or 22.5%, which is in line with the decreased sales revenues of 27.3% for year ended December 31, 2022.

The increase in gross profit from leasing and delivery and installation revenues was partially offset by a $7.3 million increase in depreciation of rental equipment primarily as a result of capital investments made over the past twelve months of additional rental equipment for the year ended December 31, 2022.

Adjusted EBITDA:

Adjusted EBITDA increased $130.5 million, or 53.3%, to $375.5 million for the year ended December 31, 2022 from $245.0 million for the year ended December 31, 2021.

The increase was driven by higher leasing gross profits discussed above, partially offset by increases in SG&A, excluding discrete and other items of $55.4 million.

SG&A increases were primarily related to increases in salaries and variable compensation of $20.1 million and $14.7 million, respectively, service agreement and professional fee increases of $9.9 million, real estate and occupancy costs increases of $1.9 million, and increased travel expenses of $2.6 million.

Capex for rental equipment:

Capex for rental equipment increased $72.9 million, or 160.4%, to $118.3 million for the year ended December 31, 2022 from $45.4 million for the year ended December 31, 2021 driven by a significant increase

in container purchases during the year given high utilization and strong demand, as well as due to expansion of our VAPS offering in Storage.

Income from discontinued operations of $134.6 million for the year ended December 31, 2023 was related to the sale of the former UK Storage Solutions segment in January 2023.

Capital Expenditures for Rental Equipment:

Capital expenditures for rental equipment increased $53.9 million, or 23.7%, to $280.9 million for the year ended December 31, 2024 from $227.0 million for the year ended December 31, 2023 as a result of increased modular refurbishment spending, investments in VAPS for portable storage, and new fleet purchases, including additional investment in climate-controlled containers.

Net CAPEX increased $48.8 million, or 26.4%, to $233.4 million for the year ended December 31, 2024 from $184.7 million for the year ended December 31, 2023, driven by increased capital expenditures for rental equipment as described above and a $11.4 million decrease in proceeds from the sale of property, plant, and equipment, partially offset by a $12.7 million increase in proceeds from the sale of rental equipment and a $3.8 million decrease in purchases of property, plant and equipment.

Reconciliation of Non-GAAP Financial Measures

In addition to using GAAP financial measurements, we use certain non-GAAP financial measures to evaluate our operating results.

As such, we include in this Annual Report on Form 10-K reconciliations to their most directly comparable GAAP financial measures.

As such, we include in this Annual Report on Form 10-K reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures.

Set forth below are definitions and reconciliations to the nearest comparable GAAP measure of certain non-GAAP financial measures used in this Annual Report on Form 10-K along with descriptions of why we believe these measures provide useful information to investors as well as a description of the limitations of these measures.

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• Currency (gains) losses, net on monetary assets and liabilities denominated in foreign currencies other than the subsidiaries’ functional currency.

Substantially all such currency gains (losses) are unrealized and attributable to financings due to and from affiliated companies.

• Goodwill and other impairment charges related to non-cash costs associated with impairment charges to goodwill, other intangibles, rental fleet and property, plant and equipment.

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• Transaction costs including legal and professional fees and other transaction specific related costs.

• Costs to integrate acquired companies, including outside professional fees, non-capitalized costs associated with system integrations, non-lease branch and fleet relocation expenses, employee training costs, and other costs required to realize cost or revenue synergies.

• Costs to integrate acquired companies, including outside professional fees, non-capitalized costs associated with system integrations, non-lease branch and fleet relocation expenses, employee relocation and training costs, and other costs required to realize cost or revenue synergies.

• Non-cash charges for stock compensation plans.

• Gains and losses resulting from changes in fair value and extinguishment of common stock warrant liabilities.

• Other expense, including consulting expenses related to certain one-time projects, financing costs not classified as interest expense, and gains and losses on disposals of property, plant, and equipment.

Our 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 and captures the business performance of the segments, inclusive of indirect costs.

Adjusted EBITDA has limitations as an analytical tool, and you should not consider the measure in isolation or as a substitute for net income (loss), cash flow from operations or other methods of analyzing WillScot Mobile Mini’s results as reported under US GAAP.

• Other expense, including consulting expenses related to certain one-time projects, financing costs not classified as interest expense, gains and losses on disposals of property, plant, and equipment, and unrealized gains and losses on investments.

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

Management believes that evaluating performance excluding such items is meaningful because it provides insight with respect to the intrinsic and ongoing operating results of the Company and captures the business performance, inclusive of indirect costs.

Some of these limitations are:

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Because of these limitations, Adjusted EBITDA should not be considered as discretionary cash available to reinvest in the growth of our business or as a measure of cash that will be available to meet our obligations.

The following table provides unaudited reconciliations of Income from continuing operations to Adjusted EBITDA:

The following table provides reconciliations of Income from continuing operations to Adjusted EBITDA from continuing operations:

Year Ended December 31,

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Income from continuing operations before income tax 36,604 468,419

Loss on extinguishment of debt — — 5,999

Interest expense 205,040 146,278 116,358

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

Depreciation and amortization 384,972 338,654

Currency losses, net 6,754 886 427

Interest expense, net 227,311 205,040

Impairment loss on intangible asset 132,540 —

Restructuring costs, lease impairment expense and other related charges 9,435 22

Currency losses, net 593 6,754

Transaction costs 651 2,259

Integration costs 7,521 10,366

Impairment loss on long-lived asset 374 —

Stock compensation expense 35,966 34,486

Other (4,535) 7,117 4,966

Termination fee 180,000 —

47,193 (4,535)

Adjusted EBITDA from continuing operations $ 1,063,160 $ 1,061,465

Adjusted EBITDA from discontinued operations 4,124 85,750 90,789

Adjusted EBITDA from continuing and discontinued operations $ 1,065,589 $ 969,624 $ 740,393

The following table provides unaudited reconciliations of Income from discontinued operations to Adjusted EBITDA:

Year Ended December 31,

(in thousands) 2023 2022 2021

Income from discontinued operations $ 134,243 $ 63,199 $ 45,249

Gain on sale of discontinued operations 175,708 35,456 —

Income tax expense from discontinued operations 45,468 35,725 13,018

Income from discontinued operations before income tax and gain on sale 4,003 63,468 58,267

Interest expense 56 1,301 1,629

Depreciation and amortization — 24,408 35,000

Currency losses, net — 138 121

Restructuring costs, lease impairment expense and other related charges — — 2

Integration costs — — 14

Stock compensation expense (196) 215 261

Other 261 (3,780) (4,505)

Adjusted EBITDA from discontinued operations $ 4,124 $ 85,750 $ 90,789

Adjusted EBITDA Margin

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

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

The following table provides unaudited reconciliations of Adjusted EBITDA Margin:

Year Ended December 31,

(in thousands) 2023 2022 2021

Adjusted EBITDA from continuing operations (A) $ 1,061,465 $ 883,874 $ 649,604

Revenue (B) $ 2,364,767 $ 2,142,623 $ 1,672,980

Adjusted EBITDA Margin from Continuing Operations (A/B) 44.9 % 41.3 % 38.8 %

Income from continuing operations (C) $ 341,844 $ 276,341 $ 114,895

Income from Continuing Operations Margin (C/B) 14.5 % 12.9 % 6.9 %

Adjusted Gross Profit and Adjusted Gross Profit Percentage

We define Adjusted Gross Profit as gross profit plus depreciation on rental equipment.

Adjusted Gross Profit Percentage is defined as Adjusted Gross Profit divided by revenue.

Adjusted Gross Profit and Adjusted Gross Profit Percentage are not measurements of our financial performance under GAAP and should not be considered as alternatives to gross profit, gross profit percentage, or other performance measures derived in accordance with GAAP.

In addition, our measurement of Adjusted Gross Profit and Adjusted Gross Profit Percentage may not be comparable to similarly titled measures of other companies.

Management believes that the presentation of Adjusted Gross Profit and Adjusted Gross Profit Percentage provides useful information regarding our results of operations and assists in analyzing the underlying performance of our business.

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

Year Ended December 31,

(in thousands) 2023 2022 2021

Revenue (A) $ 2,364,767 $ 2,142,623 $ 1,672,980

Gross profit (B) $ 1,333,870 $ 1,135,482 $ 844,703

Depreciation of rental equipment 265,733 256,719 218,790

Adjusted Gross Profit (C) $ 1,599,603 $ 1,392,201 $ 1,063,493

Gross Profit Percentage (B/A) 56.4 % 53.0 % 50.5 %

Adjusted Gross Profit Percentage (C/A) 67.6 % 65.0 % 63.6 %

(a) Includes $42.4 million in legal and professional fees related to the terminated McGrath transaction for the year ended December 31, 2024.

We define N et CAPEX as purchases of rental equipment and refurbishments and purchases of property, plant and equipment (collectively, "Total Capital Expenditures"), less proceeds from the sale of rental equipment and proceeds from the sale of property, plant and equipment (collectively, "Total Proceeds"), which are all included in cash flows from investing activities.

Management believes that the presentation of Net CAPEX provides useful information regarding the net capital invested in our rental fleet and property, plant and equipment each year to assist in analyzing the performance of our business.

As presented below, Net CAPEX includes amounts for the former Tank and Pump segment through September 30, 2022 and the UK Storage Solutions segment through January 31, 2023.

The following table provides unaudited reconciliations of Net CAPEX:

As presented below, Net CAPEX includes amounts for the UK Storage Solutions segment through January 31, 2023.

The following table provides reconciliations of Net CAPEX:

Year Ended December 31,

(in thousands) 2024 2023

Total Capital Expenditures $ 249,213 $ 486,802 $ 308,996

Total Proceeds 64,562 72,478 72,121

Purchase of rental equipment and refurbishments $ (280,857) $ (226,976)

Proceeds from sale of rental equipment 63,997 51,290

Net CAPEX for Rental Equipment (216,860) (175,686)

Purchase of property, plant and equipment (18,435) (22,237)

Proceeds from sale of property, plant and equipment 1,867 13,272

Net CAPEX $ (233,428) $ (184,651)

Free Cash Flow

We define Free Cash Flow as net cash provided by operating activities, less purchases of, and proceeds from, rental equipment and property, plant and equipment, which are all included in cash flows from investing activities.

Management believes that the presentation of Free Cash Flow provides useful additional information concerning cash flow available to fund our capital allocation alternatives.

As presented below, Free Cash Flow includes amounts for the former Tank and Pump segment through September 30, 2022 and the UK Storage Solutions segment through January 31, 2023.

The following table provides a reconciliation of net cash provided by operating activities to Free Cash Flow:

Adjusted Free Cash Flow

We define Adjusted Free Cash Flow as net cash provided by operating activities;

less purchases of rental equipment and property, plant and equipment and plus proceeds from sale of rental equipment and property, plant and equipment, which are all included in cash flows from investing activities;

excluding one-time, nonrecurring payments for the McGrath termination fee and transaction costs from terminated acquisitions.

Management believes that the presentation of Adjusted Free Cash Flow provides useful additional information concerning cash flow available to fund our capital allocation alternatives.

presented below, Adjusted Free Cash Flow includes amounts for the UK Storage Solutions segment through January 31, 2023.

The following table provides reconciliations of net cash provided by operating activities to Adjusted Free Cash Flow:

Year Ended December 31,

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Proceeds from the sale of property, plant and equipment 1,867 13,272

Free Cash Flow $ 576,589 $ 330,334 $ 303,027

Cash paid for termination fee 180,000 —

Cash paid for transaction costs from terminated acquisitions 45,721 —

Adjusted Free Cash Flow $ 553,937 $ 576,589

Liquidity and Capital Resources

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

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

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

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

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

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

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

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

We believe that our liquidity sources are sufficient to satisfy our anticipated operating, debt service, and capital requirements over the next twelve months and thereafter for the foreseeable future.

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

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

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

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

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At December 31, 2024, we had $1.6 billion of available borrowing capacity under the ABL Facility.

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

Our ability to fund our capital needs will be affected by our ongoing ability to generate cash from operations and access to capital markets.

The consolidated statements of cash flows include amounts for the former Tank and Pump segment through September 30, 2022 and the UK Storage Solutions segment through January 31, 2023.

See Note 3 to the financial statements for disclosure of significant operating and investing items related to the former Tank and Pump segment and the UK Storage Solutions segment.

The consolidated statements of cash flows include amounts for the UK Storage Solutions segment through January 31, 2023.

See Note 3 to the financial statements for disclosure of significant operating and investing items related to the UK Storage Solutions segment.

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

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(in thousands) 2024 2023

Net cash from operating activities $ 761,240 $ 744,658 $ 539,902

Net cash from investing activities (350,003) (309,333) (384,047)

Net cash from financing activities (418,935) (429,368) (167,887)

Net cash provided by operating activities $ 561,644 $ 761,240

Net cash used in investing activities (362,348) (350,003)

Net cash used in financing activities (200,119) (418,935)

Effect of exchange rate changes on cash and cash equivalents (1,134) 882

Net change in cash and cash equivalents $ (1,957) $ (6,816)

Comparison of the Years Ended December 31, 2023 and 2022 and December 31, 2022 and 2021

Comparison of the Years Ended December 31, 2024 and 2023

Cash flows from operating activities

Cash provided by operating activities for the year ended December 31, 2023 was $761.2 million as compared to $744.7 million for the year ended December 31, 2022, an increase of $16.6 million, or 2%.

The increase in cash provided by operating activities was driven by an increase of $54.5 million of net income, adjusted for non-cash items, and a decrease of $37.9 million in the net movements of the operating assets and liabilities.

Cash provided by operating activities for the year ended December 31, 2022 was $744.7 million as compared to $539.9 million for the year ended December 31, 2021 , an increase of $204.8 million, or 38% .

The increase in cash provided by operating activities was driven by an increase of $198.6 million of net income, adjusted for non-cash items, and an increase of $6.2 million in the net movements of the operating assets and liabilities.

Net cash provided by operating activities for the year ended December 31, 2024 was $561.6 million as compared to $761.2 million for the year ended December 31, 2023, a decrease of $199.6 million.

The decrease in net cash provided by operating activities was primarily due to the payment of $225.7 million for the McGrath termination fee and transaction costs from terminated acquisitions during the year ended December 31, 2024.

Cash flows from investing activities

Cash used in investing activities for the year ended December 31, 2023 was $350.0 million as compared to $309.3 million for the year ended December 31, 2022, an increase of $40.7 million.

The increase in cash used in investing activities was driven by a $341.0 million increase in cash used in acquisitions, net of cash acquired, a $19.4 million decrease in proceeds from the sale of rental equipment, and a $7.7 million increase in payments for the settlement of foreign currency forward contract.

The increase was partially offset by a $216.2 million decrease in cash used for the purchase of rental equipment and refurbishments, a $78.4 million increase in proceeds from the sale of discontinued operations, a $21.4 million decrease in cash used for the purchase of property, plant, and equipment, and an $11.5 million increase in proceeds from sale of property, plant and equipment.

Cash used in investing activities for the year ended December 31, 2022 was $309.3 million as compared to $384.0 million for the year ended December 31, 2021, a decrease of $74.7 million.

The decrease in cash used in investing activities was driven by the proceeds of $325.6 million from the sale of discontinued operations and a $15.5 million increase in proceeds from the sale of rental equipment.

Proceeds from sale of rental equipment increased compared to the prior year due to higher sales demand.

The decrease was partially offset by a $73.4 million increase in cash used in acquisitions, net of cash acquired, a $164.6 million increase in cash used for the purchase of rental equipment and refurbishments to support growing demand for new project deliveries across all segments, a $15.1 million decrease in proceeds from sale of property, plant and equipment and a $13.2 million increase in cash used for the purchase of property, plant, and equipment.

Net cash used in investing activities for the year ended December 31, 2024 was $362.3 million as compared to $350.0 million for the year ended December 31, 2023, an increase of $12.3 million.

The increase in net cash used in investing activities primarily resulted from an increase in the purchase of rental equipment and refurbishments of $53.9 million due to increased refurbishment spending, investments in VAPS for portable storage, and new fleet purchases, including additional investment in climate-controlled containers during the year ended December 31, 2024.

This increase was partially offset by a decrease in net cash used for acquisition and divestiture activity during 2024 of $36.4 million, including a decrease of $440.4 million in cash used in acquisitions, net of cash acquired and a decrease of $404.0 million in proceeds from the sale of the former UK Storage Solutions segment in the year ended December 31, 2023.

Cash flows from financing activities

Cash used in financing activities for the year ended December 31, 2023 was $418.9 million as compared to $429.4 million for the year ended December 31, 2022, a decrease of $10.4 million.

The decrease in cash used in financing activities was driven by a $60.5 million increase in net borrowings, a $25.6 million decrease in principal payments on finance lease obligations, and a $1.7 million decrease in payments of financing costs.

The decrease was partially offset by an increase of $66.4 million in repurchases of common stock and a $10.7 million decrease in receipts from the issuance of common stock.

Cash used in financing activities for the year ended December 31, 2022 was $429.4 million as compared to $167.9 million for the year ended December 31, 2021, an increase of $261.5 million.

The increase in cash used in financing activities was driven by an increase of $388.2 million in repurchases of common stock and warrants as well as an increase of $76.6 million in repayment of borrowings, partially offset by a $235.6 million increase in receipts from borrowings.

Net cash used in financing activities for the year ended December 31, 2024 was $200.1 million as compared to $418.9 million for the year ended December 31, 2023, a decrease of $218.8 million.

The decrease in net cash used in financing activities was driven by a decrease of $547.7 million in cash used for the repurchase of common stock.

The decrease was partially offset by a decrease of $314.8 million in receipts from borrowings, net of repayments of borrowings.

Material cash requirements

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

The Company has outstanding debt related to its ABL Facility, 2025 Secured Notes, 2028 Secured Notes, 2031 Secured Notes and finance leases, including interest, totaling $3.6 billion as of December 31, 2023, $18.8 million of which is obligated to be repaid within the next twelve months.

The Company has outstanding debt related to its ABL Facility, 2025 Secured Notes, 2028 Secured Notes, 2029, Secured Notes, 2031 Secured Notes, and finance leases, including interest, totaling $3.7 billion as of December 31, 2024, $549.9 million of which is obligated to be repaid within the next twelve months.

We have the intent and believe we have the ability to refinance the $526.5 million carrying value of the 2025 Secured Notes on a long-term basis as demonstrated by our forecasted available capacity under the ABL Facility, among other refinancing alternatives to be considered opportunistically.

Refer to Note 10 for further information regarding outstanding debt.

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As of December 31, 2024, the Company had lease obligations of $311.5 million, with $73.8 million payable within the next twelve months.

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

This program does not obligate the Company to repurchase any specific amount of shares.

The Company believes its cash, cash flows generated from ongoing operations, and continued access to its revolving credit facility as well as access to debt markets are sufficient to satisfy its currently anticipated cash requirements over the next twelve months and thereafter for the foreseeable future.

As of December 31, 2024, $821.8 million of the authorization for future repurchases of our common stock remained available.

Critical Accounting Estimates

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Examples of lease components include, but are not limited to, the lease of modular space and portable storage units and VAPS.

Examples of non-lease components include, but are not limited to, the delivery, installation, maintenance, and removal services commonly provided in a bundled transaction with the lease components.

Arrangement consideration is allocated between lease deliverables and non-lease components based on the relative estimated selling (leasing) price of each deliverable.

Estimated selling (leasing) price of the lease deliverables is based upon the estimated stand-alone selling price of the related performance obligations using an adjusted market approach.

Examples of non-lease components include, but are not limited to, the delivery, install ation, and removal services commonly provided in a bundled transaction with the lease components.

Arrangement consideration is allocated between lease components and non-lease components based on the relative estimated selling (leasing) price of each deliverable.

Selling (leasing) price of the

lease component is estimated using an adjusted market approach whereby the Company estimates the price that customers in the market would be willing to pay.

Services Revenue

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• Delivery and installation of the modular or portable storage unit;

• Maintenance and other ad hoc services performed during the lease term;

• Other ad hoc services performed during the lease term;

• Removal services that occur at the end of the lease term.

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Purchase Accounting

The Company accounts for acquisitions of businesses under the acquisition method.

Under the acquisition method of accounting, the Company records assets acquired and liabilities assumed, including intangible assets, at their respective estimated fair values on the date of acquisition.

The Company records assets acquired and liabilities assumed at their respective estimated fair values on the date of acquisition.

Goodwill is measured as the excess of the fair value of the consideration transferred over the fair value of the identifiable net assets and is assigned to the Company's reporting units that are expected to benefit from the acquisition.

Judgment is exercised in the determination of the estimated fair value of intangible assets acquired and their estimated useful lives.

The estimated fair value and useful lives of customer relationships is determined based on estimates and judgments regarding discounted future after-tax earnings and cash flows expected from customer relationships.

The Company exercises judgment in the determination of the estimated fair value of intangible assets acquired and their estimated useful lives.

The fair value of trade name intangible assets is determined utilizing the relief-from-royalty method.

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Actual results may vary from these estimates which may result in adjustments to the fair value of assets acquired and liabilities assumed, including intangibles.

The Company may record adjustments to the fair values and corresponding

adjustment to goodwill during the measurement period, not to exceed one year from the date of acquisition if new information is obtained related to facts and circumstances that existed as of the acquisition date.

The Company may record adjustments to the fair values and corresponding adjustment to goodwill during the measurement period, not to exceed one year from the date of acquisition if new information is obtained related to facts and circumstances that existed as of the acquisition date.

After the measurement period, any subsequent adjustments are reflected in the consolidated statements of operations.

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these changes could potentially impact the fair value of reporting units.

If the carrying amount of the reporting unit exceeds the calculated fair value of the reporting unit, an impairment charge would be recognized for the excess of carrying value over fair value, not to exceed the amount of goodwill allocated to that reporting unit.

The Company's 2023 impairment test indicated that the estimated fair values of the Company's reporting units were in excess of their carrying values.

The Company believes that only significant changes in the cash flow assumptions would result in an impairment of goodwill.

Indefinite-lived Intangible Assets

Intangible assets that are acquired by the Company and determined to have an indefinite useful life are not amortized but are tested for impairment at least annually.

The Company’s indefinite-lived intangible assets consist of the Williams Scotsman and Mobile Mini trade names.

After determining the Mobile Mini trade name was no longer indefinite-lived and recording an impairment during the year ended December 31, 2024, the Company’s only remaining indefinite-lived intangible asset is the WillScot trade name.

The Company performs its assessment of indefinite-lived intangible assets utilizing either a qualitative or quantitative impairment test.

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Any material deviation in actual results could affect the calculated fair value of the intangible asset.

The Company's 2023 impairment test indicated that the estimated fair values of the Company's indefinite lived intangible assets were in excess of their carrying values.

Rental Equipment

Rental equipment is comprised of modular space and portable storage units held for rent or on rent to customers and value-added products and services (“VAPS”) which are in use or available to be used by customers.

Rental equipment is measured at cost less accumulated depreciation and impairment losses.

Rental equipment is comprised of modular space and portable storage units held for rent or on rent to customers and VAPS that are in use or available to be used by customers.

Rental equipment is measured at cost less accumulated depreciation.

Cost includes expenditures that are directly attributable to the acquisition of the asset.

Costs of improvements and conversions of rental equipment are capitalized when such costs extend the useful life of the equipment or increase the rental value of the unit.

Costs of improvements and conversions of rental equipment are capitalized when such costs extend the useful life of the equipment.

Costs incurred for equipment to meet a particular customer specification are either capitalized and depreciated over the lease term taking into consideration the residual value of the asset or charged to the customer at the beginning of the lease and expensed as incurred.

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The Company is exposed to credit losses from trade receivables.

The Company assesses each customer’s ability to pay for the products it leases or sells by conducting a credit review.

The Company assesses each customer’s ability to pay for the products it leases or sells and the services it provides by conducting a credit review.

The credit review considers expected billing exposure and timing for payment and the customer’s established credit rating.

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

The Company monitors ongoing credit exposure through an active review of customer balances against contract terms and due dates.

The Company monitors ongoing credit exposure through an active review of customer balances against established credit limits, contract terms, and due dates.

The Company may employ collection agencies and legal counsel to pursue recovery of defaulted receivables.

The allowance for credit losses reflects the estimate of the amount of receivables that the Company will be unable to collect based on historical write-off experience and, as applicable, current conditions and reasonable and supportable forecasts that affect collectability.

Judgment and uncertainties are present in determining the allowance for credit losses due to the sensitivity of changing circumstances, including changes in the economy or in the particular circumstances of individual customers.

Accordingly, the Company may be required to increase or decrease its allowances.

This estimate is sensitive to changing circumstances.

Accordingly, the Company may be required to increase or decrease its allowances in future periods in response to changing circumstances, including changes in the economy or in the particular circumstances of individual customers.

Changes in estimates are reflected in the period they become known.

If circumstances were to change that required a change in estimates, such as a change in financial condition of customers or unanticipated changes in the economy, additional allowances may be required.

If circumstances change in a way that require a change in estimates, such as a change in financial condition of customers or unanticipated changes in the economy, we may accrue additional allowances.

There were no changes in the Company's estimates or underlying assumptions relating to the determination of the allowance for credit losses for the year ended December 31, 2024 that would have materially impacted the allowance for credit losses.

Refer to Note 1 to the Consolidated Financial Statements included in Item 8 of Part II of this annual report for a summary of activity in the allowance for credit losses.

R efer to Note 1 to the Consolidated Financial Statements included in Item 8 of Part II of this annual report for a summary of activity in the allowance for credit losses.

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.

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Valuation allowances are recorded to reduce the deferred tax assets to an amount that will more likely than not be realized.

The Company assesses the likelihood that each of the deferred tax assets will be realized.

To the extent management believes realization of any deferred tax assets is not likely, the Company establishes a valuation allowance.

When a valuation allowance is established or there is an increase in an allowance in a reporting period, tax expense is generally recorded in the Company’s consolidated statement of operations.

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a more-likely-than-not recognition criterion;

and a measurement approach that measures the position as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement.

and a measurement approach that measures the position as the largest amount of tax benefit that is greater than 50% likely of being realized upon

ultimate settlement.

If it is not more-likely-than-not that the benefit of the tax position will be sustained on its technical merits, no benefit is recorded.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis