WillScot Holdings Corp 10-K

Item 8. Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of WillScot Holdings Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of WillScot Holdings Corporation (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income , changes in equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 20, 2025 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates. 50 Allowance for Credit Losses Description of the Matter As described in Note 1 to the consolidated financial statements, the Company maintains an allowance for credit losses on trade receivables. At December 31, 2024, the allowance for credit losses was $101.7 million. The allowance for credit losses is estimated based on historical write-off experience and, as applicable, current conditions and reasonable and supportable forecasts that affect collectability. Auditing the Company's estimation of the allowance for credit losses was judgmental due to the subjectivity in assessing the appropriateness of the assumptions made by management. The assumptions include an expectation that the Company’s collection of receivables will be consistent with historical write-off experience. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company's controls over its estimation of the allowance for credit losses, including internal controls over the Company’s process to develop the assumptions used to estimate credit losses. To test the allowance for credit losses, we performed audit procedures that included, among others, testing management's process for developing the allowance for credit losses, testing the completeness, accuracy, and relevance of the data used; and evaluating assumptions used by management, including assessing the Company’s expectation that the collection of receivables will be consistent with historical write-off experience. For example, we compared the days sales outstanding, customer concentration, and days past due as of December 31, 2024, to the Company’s historical experience to evaluate the relevance of the historical data utilized to estimate the allowance for credit losses. We also performed sensitivity analyses of various assumptions to evaluate the change in the allowance that would result from changes in assumptions. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2017 Baltimore, Maryland February 20, 2025 51 WillScot Holdings Corporation Consolidated Balance Sheets (in thousands, except share data) December 31, 2024 2023 Assets Cash and cash equivalents $ 9,001 $ 10,958 Trade receivables, net of allowance for credit losses at December 31, 2024 and December 31, 2023 of $ 101,693 and $ 81,656 , respectively 430,381 451,130 Inventories 47,473 47,406 Prepaid expenses and other current assets 67,751 57,492 Assets held for sale 2,904 2,110 Total current assets 557,510 569,096 Rental equipment, net 3,377,939 3,381,315 Property, plant and equipment, net 363,073 340,887 Operating lease assets 266,761 245,647 Goodwill 1,201,353 1,176,635 Intangible assets, net 251,164 419,709 Other non-current assets 17,111 4,626 Total long-term assets 5,477,401 5,568,819 Total assets $ 6,034,911 $ 6,137,915 Liabilities and equity Accounts payable $ 96,597 $ 86,123 Accrued expenses 121,583 129,621 Accrued employee benefits 25,062 45,564 Deferred revenue and customer deposits 250,790 224,518 Operating lease liabilities - current 66,378 57,408 Current portion of long-term debt 24,598 18,786 Total current liabilities 585,008 562,020 Long-term debt 3,683,502 3,538,516 Deferred tax liabilities 505,913 554,268 Operating lease liabilities – non-current 200,875 187,837 Other non-current liabilities 41,020 34,024 Long-term liabilities 4,431,310 4,314,645 Total liabilities 5,016,318 4,876,665 Preferred Stock: $ 0.0001 par, 1,000,000 shares authorized and zero shares issued and outstanding at December 31, 2024 and 2023 — — Common Stock: $ 0.0001 par, 500,000,000 shares authorized and 183,564,899 and 189,967,135 shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively 19 20 Additional paid-in-capital 1,836,165 2,089,091 Accumulated other comprehensive loss ( 70,627 ) ( 52,768 ) Accumulated deficit ( 746,964 ) ( 775,093 ) Total shareholders' equity 1,018,593 1,261,250 Total liabilities and shareholders' equity $ 6,034,911 $ 6,137,915 The accompanying notes are an integral part of these consolidated financial statements. 52 WillScot Holdings Corporation Consolidated Statements of Operations (in thousands, except share and per share data) Years Ended December 31, 2024 2023 2022 Revenues: Leasing and services revenue: Leasing $ 1,839,875 $ 1,833,935 $ 1,621,690 Delivery and installation 418,881 437,179 429,152 Sales revenue: New units 74,499 48,129 40,338 Rental units 62,463 45,524 51,443 Total revenues 2,395,718 2,364,767 2,142,623 Costs: Costs of leasing and services: Leasing 385,078 398,467 376,868 Delivery and installation 328,880 317,117 322,636 Costs of sales: New units 45,554 26,439 24,011 Rental units 32,224 23,141 26,907 Depreciation of rental equipment 302,143 265,733 256,719 Gross profit 1,301,839 1,333,870 1,135,482 Other operating expenses: Selling, general and administrative 630,705 596,090 567,493 Other depreciation and amortization 82,829 72,921 62,380 Termination fee 180,000 — — Impairment loss on intangible asset 132,540 — — Restructuring costs 8,559 — ( 86 ) Currency losses, net 593 6,754 886 Other expense (income), net 2,698 ( 15,354 ) ( 6,673 ) Operating income 263,915 673,459 511,482 Interest expense, net 227,311 205,040 146,278 Income from continuing operations before income tax 36,604 468,419 365,204 Income tax expense from continuing operations 8,475 126,575 88,863 Income from continuing operations 28,129 341,844 276,341 Discontinued operations: Income from discontinued operations before income tax — 4,003 63,468 Gain on sale of discontinued operations — 176,078 35,456 Income tax expense from discontinued operations — 45,468 35,725 Income from discontinued operations — 134,613 63,199 Net income $ 28,129 $ 476,457 $ 339,540 Earnings per share from continuing operations: Basic $ 0.15 $ 1.72 $ 1.27 Diluted $ 0.15 $ 1.69 $ 1.25 Earnings per share from discontinued operations: Basic $ — $ 0.68 $ 0.30 Diluted $ — $ 0.67 $ 0.28 Earnings per share: Basic $ 0.15 $ 2.40 $ 1.57 Diluted $ 0.15 $ 2.36 $ 1.53 Weighted average shares: Basic 188,101,693 198,554,885 216,808,577 Diluted 190,292,256 201,849,836 221,399,162 The accompanying notes are an integral part of these consolidated financial statements. 53 WillScot Holdings Corporation Consolidated Statements of Comprehensive Income (in thousands) Years Ended December 31, 2024 2023 2022 Net income $ 28,129 $ 476,457 $ 339,540 Other comprehensive (loss) income: Foreign currency translation adjustment, net of income tax expense (benefit) of $ 0 for the years ended December 31, 2024, 2023 and 2022, respectively ( 24,689 ) 14,091 ( 44,548 ) Net gain on derivatives, net of income tax expense of $ 2,251 , $ 1,088 and $ 1,171 for the years ended December 31, 2024, 2023 and 2022, respectively 6,830 3,263 3,497 Total other comprehensive (loss) income ( 17,859 ) 17,354 ( 41,051 ) Total comprehensive income $ 10,270 $ 493,811 $ 298,489 The accompanying notes are an integral part of these consolidated financial statements. 54 WillScot Holdings Corporation Consolidated Statements of Changes in Equity (in thousands) Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Shareholders' Equity Shares Amount Balance at December 31, 2021 223,940 $ 22 $ 3,616,902 $ ( 29,071 ) $ ( 1,591,090 ) $ 1,996,763 Net income — — — — 339,540 339,540 Other comprehensive loss — — — ( 41,051 ) — ( 41,051 ) Common stock-based award activity 594 — 29,613 — — 29,613 Repurchase and cancellation of Common Stock and warrants ( 19,836 ) ( 2 ) ( 756,906 ) — — ( 756,908 ) Issuance of Common Stock from the exercise of options and warrants 3,254 1 11,230 — — 11,231 Withholding taxes on net share settlement of stock-based compensation — — ( 13,888 ) — — ( 13,888 ) Balance at December 31, 2022 207,952 21 2,886,951 ( 70,122 ) ( 1,251,550 ) 1,565,300 Net income — — — — 476,457 476,457 Other comprehensive income — — — 17,354 — 17,354 Common stock-based award activity 514 — 34,486 — — 34,486 Repurchase and cancellation of Common Stock ( 18,534 ) ( 1 ) ( 818,673 ) — — ( 818,674 ) Issuance of Common Stock from the exercise of options 35 — 498 — — 498 Withholding taxes on net share settlement of stock-based compensation — — ( 14,171 ) — — ( 14,171 ) Balance at December 31, 2023 189,967 20 2,089,091 ( 52,768 ) ( 775,093 ) 1,261,250 Net income — — — — 28,129 28,129 Other comprehensive loss — — — ( 17,859 ) — ( 17,859 ) Common stock-based award activity 717 — 35,966 — — 35,966 Repurchase and cancellation of Common Stock ( 7,133 ) ( 1 ) ( 272,727 ) — — ( 272,728 ) Issuance of Common Stock from the exercise of options 14 — 253 — — 253 Withholding taxes on net share settlement of stock-based compensation — — ( 16,418 ) — — ( 16,418 ) Balance at December 31, 2024 183,565 $ 19 $ 1,836,165 $ ( 70,627 ) $ ( 746,964 ) $ 1,018,593 The accompanying notes are an integral part of these consolidated financial statements. 55 WillScot Holdings Corporation Consolidated Statements of Cash Flows (in thousands) Years Ended December 31, 2024 2023 2022 Operating activities: Net income $ 28,129 $ 476,457 $ 339,540 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 384,972 338,654 343,507 Provision for credit losses 55,437 49,650 34,835 Gain on sale of discontinued operations — ( 176,078 ) ( 35,456 ) Impairment loss on intangible asset 132,540 — — Gain on sale of rental equipment and other property, plant and equipment ( 27,087 ) ( 32,724 ) ( 31,196 ) Amortization of debt discounts and debt issuance costs 12,571 11,211 12,064 Stock-based compensation expense 35,966 34,486 29,613 Deferred income tax (benefit) expense ( 45,323 ) 141,641 100,849 Loss on settlement of foreign currency forward contract — 7,715 — Unrealized currency gains, net ( 56 ) ( 1,374 ) 753 Other 4,621 3,413 4,081 Changes in operating assets and liabilities Trade receivables ( 34,519 ) ( 76,357 ) ( 94,463 ) Inventories ( 529 ) ( 3,276 ) ( 12,345 ) Prepaid expenses and other assets ( 12,132 ) ( 18,310 ) 149 Operating lease assets and liabilities 939 1,045 856 Accounts payable and other accrued expenses ( 1,272 ) ( 14,836 ) 9,443 Deferred revenue and customer deposits 27,387 19,923 42,428 Net cash provided by operating activities 561,644 761,240 744,658 Investing activities: Acquisitions, net of cash acquired ( 121,221 ) ( 561,629 ) ( 220,620 ) Purchase of rental equipment and refurbishments ( 280,857 ) ( 226,976 ) ( 443,138 ) Proceeds from sale of rental equipment 63,997 51,290 70,703 Purchase of property, plant and equipment ( 18,435 ) ( 22,237 ) ( 43,664 ) Proceeds from sale of property, plant and equipment 1,867 13,272 1,775 Purchase of investments ( 7,699 ) — — Proceeds from sale of discontinued operations — 403,992 325,611 Payment for settlement of foreign currency forward contract — ( 7,715 ) — Net cash used in investing activities ( 362,348 ) ( 350,003 ) ( 309,333 ) Financing activities: Receipts from borrowings 1,317,156 1,911,230 964,308 Repayment of borrowings ( 1,195,932 ) ( 1,475,219 ) ( 588,808 ) Payment of financing costs ( 7,945 ) ( 6,457 ) ( 8,187 ) Payments on finance lease obligations ( 19,429 ) ( 16,634 ) ( 42,228 ) Receipts from issuance of Common Stock from the exercise of options 253 498 11,230 Repurchase and cancellation of Common Stock ( 270,439 ) ( 818,182 ) ( 751,795 ) Excise tax paid on repurchase of Common Stock ( 7,830 ) — — Taxes paid on employee stock awards ( 15,953 ) ( 14,171 ) ( 13,888 ) Net cash used in financing activities ( 200,119 ) ( 418,935 ) ( 429,368 ) Effect of exchange rate changes on cash and cash equivalents ( 1,134 ) 882 ( 882 ) Net change in cash and cash equivalents ( 1,957 ) ( 6,816 ) 5,075 Cash and cash equivalents at the beginning of the period 10,958 17,774 12,699 Cash and cash equivalents at the end of the period $ 9,001 $ 10,958 $ 17,774 56 Supplemental cash flow information: Interest paid, net $ 216,151 $ 184,863 $ 130,463 Income taxes paid, net $ 45,580 $ 32,949 $ 25,092 Capital expenditures accrued or payable $ 20,126 $ 19,557 $ 21,052 Reconciliation of cash and cash equivalents to the consolidated balance sheet: Cash and cash equivalents of continuing operations $ 9,001 $ 10,958 $ 7,390 Cash and cash equivalents included in assets held for sale — — 10,384 Total cash and cash equivalents shown in the consolidated statement of cash flows $ 9,001 $ 10,958 $ 17,774 The accompanying notes are an integral part of these consolidated financial statements. 57 WillScot Holdings Corporation Notes to the Consolidated Financial Statements NOTE 1 - Summary of Significant Accounting Policies Organization and Nature of Operations WillScot Holdings Corporation (“WillScot” and, together with its subsidiaries, the “Company”) is a leading business services provider specializing in innovative and flexible turnkey space solutions in the United States (“US”), Canada and Mexico. The Company leases, sells, delivers and installs modular space solutions and portable storage products through an integrated network of branch locations that spans North America. 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 former United Kingdom Storage Solutions ("UK Storage Solutions") segment. The consolidated financial statements present the historical financial results of the former Tank and Pump and UK Storage Solutions segments as discontinued operations for all periods presented. See Note 3 for further discussion. On July 29, 2024, the Company amended and restated its certificate of incorporation to effect a change of the Company’s name from “WillScot Mobile Mini Holdings Corp.” to “WillScot Holdings Corporation." Basis of Presentation and Principles of Consolidation The consolidated financial statements were prepared in conformity with accounting principles generally accepted in the US (“GAAP”). The consolidated financial statements comprise the financial statements of WillScot and its subsidiaries that it controls due to ownership of a majority voting interest. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as WillScot. All intercompany balances and transactions are eliminated in consolidation. Reclassifications Certain reclassifications have been made to prior year financial statements to conform to the current year presentation. Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid instruments with a maturity of three months or less when purchased to be cash equivalents. Trade Receivables and Allowance for Credit Losses 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 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. The Company performs its credit review of new customers at inception of the customer relationship and for existing customers when the customer transacts after a defined period of dormancy. The Company also considers contract terms and conditions, country risk and business strategy in the evaluation. The Company monitors ongoing credit exposure through an active review of customer balances against 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. 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. Specifically identifiable lease revenue receivables and sales receivables not deemed probable of collection are recorded as a reduction of revenue following the completion of collection efforts. The remaining provision for credit losses is recorded as selling, general and administrative expenses. 58 Activity in the allowance for credit losses for the years ended December 31 was as follows: (in thousands) 2024 2023 2022 Balance at beginning of period $ 81,656 $ 57,048 $ 45,773 Provision for credit losses, net of recoveries 55,437 49,650 34,881 Write-offs recorded as a reduction to revenue ( 35,025 ) ( 25,182 ) ( 23,705 ) Foreign currency translation and other ( 375 ) 140 99 Balance at end of period $ 101,693 $ 81,656 $ 57,048 The Company’s trade accounts receivable subject the Company to potential concentrations of credit risk. The Company performs on-going credit evaluations of its customers. Receivables related to sales are generally secured by the product sold to the customer. The Company generally has the right to repossess its rental units in the event of non-payment of receivables relating to the Company’s leasing operations. Inventories Inventories consist of raw materials and finished units for sale. Inventories are measured at the lower of cost or net realizable value based on the weighted-average cost. The cost includes expenditures incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing inventories to their existing location and condition. 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 (“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. 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. Maintenance and repair costs are expensed as incurred. Depreciation is computed using the straight-line method over estimated useful lives, as follows: Estimated Useful Life Residual Value Modular space units 5 - 30 years 0 - 55 % Portable storage units 7 - 30 years 20 - 55 % VAPS and other related rental equipment 1 - 10 years 0 % Property, Plant and Equipment Property, plant and equipment is measured at cost less accumulated depreciation and impairment losses. The Company capitalizes external costs and directly attributable internal costs to acquire or create internal use software incurred subsequent to the completion of the preliminary project stage. Costs associated with post-implementation activities are expensed as incurred. Land is not depreciated. Leasehold improvements are amortized over the lease term. Assets leased under finance leases are depreciated over the shorter of the lease term or their useful life, unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Maintenance and repair costs are expensed as incurred. Depreciation is computed using the straight-line method over estimated useful lives as follows: Estimated Useful Life Buildings and leasehold improvements 10 - 40 years Vehicles, machinery, and equipment 3 - 30 years Furniture and fixtures 3 - 10 years Software 3 - 10 years Impairment of Long-Lived Assets When circumstances indicate the carrying amount of long-lived assets in a held-for-use asset group may not be recoverable, the Company evaluates the assets for potential impairment using internal projections of undiscounted cash flows resulting from the use and eventual disposal of the assets. Events or changes in circumstances that may necessitate a recoverability evaluation include, but are not limited to, adverse changes in the regulatory environment or an expectation it is more likely than not that the asset will be disposed of before the end of its previously estimated useful life. If the carrying amount of the assets exceeds the undiscounted cash flows, an impairment expense is recognized for the amount by which the carrying amount of the asset group exceeds its fair value (subject to the carrying amount not being reduced below fair value for any individual long-lived asset that is determinable without undue cost and effort). 59 Consistent with the provisions of Leases (Topic 842) ("ASC 842") , the Company assesses whether any operating lease as set impairment exists in accordance with the measurement guidance in Accounting Standard Codification ("ASC") 360, Property Plant and Equipment . Cloud Computing Arrangements The Company evaluates implementation costs incurred in a cloud computing arrangement that is a service contract under the internal-use software framework. Costs related to preliminary project activities and post implementation activities are expensed as incurred. Costs incurred in the development stage are generally capitalized as other assets. Amortization expense is calculated on a straight-line basis over the contractual term of the cloud computing arrangement and recorded as selling, general and administrative expense. Purchase Accounting 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. When appropriate, our estimates of the fair values of assets and liabilities acquired include assistance from independent third-party valuation firms. Valuations are finalized as soon as practicable, but not later than one year from the acquisition date. Any subsequent changes to fair values assigned in purchase accounting result in a corresponding adjustment to goodwill. Transaction costs are expensed in the acquisition of a business. Long-lived assets (principally rental equipment), goodwill and other intangible assets represent the largest components of our acquisitions. Rental equipment is valued utilizing a market approach or a replacement cost approach. Intangible assets are recognized at their estimated fair values as of the date of acquisition and generally consist of customer relationships and trade names. The Company exercises judgment 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 arising from customer relationships. The fair value of trade name intangible assets is determined utilizing the relief-from-royalty method. A royalty rate based on observed market royalties is applied to projected revenue supporting the trade name and discounted to present value. Acquisitions of assets and liabilities that do not meet the definition of a business are accounted for as asset acquisitions. An asset acquisition is accounted for by allocating the cost of the acquisition to the individual assets acquired and liabilities assumed on a relative fair value basis. Goodwill is not recognized in an asset acquisition. Transaction costs are considered a component of the cost of an asset acquisition. Evaluation of Goodwill Impairment The Company performs its annual impairment test of goodwill at the reporting unit level as of October 1, as well as during any reporting period in which events or changes in circumstances occur that, in management’s judgment, may constitute triggering events. The Company performs its assessment of goodwill utilizing either a qualitative or quantitative impairment test. The qualitative impairment test assesses company-specific, industry, market and general economic factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If the Company concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, or elects not to use the qualitative impairment test, a quantitative impairment test is performed. The quantitative impairment test involves a comparison of the estimated fair value of a reporting unit to its carrying amount. The Company estimates the fair value of a reporting unit by using a discounted cash flow model that calculates fair value as the present value of expected cash flows of the reporting units. Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, value of net operating losses, future economic and market conditions and determination of appropriate market comparables. Management bases fair value estimates on assumptions it believes to be reasonable but that are unpredictable and inherently uncertain. Actual future results may differ from these estimates. 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 attributable to that reporting unit. Intangible Assets Other than Goodwill 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. 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. When utilizing a quantitative impairment test, the Company calculates fair value using a relief-from-royalty method. This method is used to estimate the cost savings that accrue to the owner of an intangible asset who would otherwise have to pay royalties or license fees on revenues earned through the use of the asset. If the 60 carrying amount of the indefinite-lived intangible asset exceeds its fair value, an impairment charge would be recorded to the extent the recorded indefinite-lived intangible asset exceeds the fair value. Other intangible assets that have finite useful lives are measured at cost less accumulated amortization and impairment losses, if any. Amortization is recognized in profit or loss over the estimated useful lives of the intangible asset. Retirement Benefit Obligation The Company provides benefits to certain of its employees under defined contribution benefit plans. The Company’s contributions to these plans are generally based on a percentage of employee compensation or employee contributions. These plans are funded on a current basis. For its US and Canada employees, the Company sponsors defined contribution benefit plans that have discretionary matching contribution and profit-sharing features. Fo r the years ended December 31, 2024, 2023 and 2022, the Company made matc hing contributions of $ 15.1 million, $ 14.1 million and $ 13.8 million to these plans, respectively. Stock-Based Compensation On June 24, 2020, WillScot's stockholders approved the WillScot 2020 Incentive Award Plan ("2020 Incentive Plan") and, as a result, all subsequent incentive awards are granted under the 2020 Incentive Plan. The 2020 Incentive Plan is administered by the Compensation Committee. Under the 2020 Incentive Plan, the Compensation Committee may grant an aggreg ate of 6,488,988 shares of Common Stock in the form of non-qualified stock options, incentive stock options, stock appreciation rights, RSAs, RSUs, performance compensation awards and stock bonus awards. Stock-based payments, including the grant of stock options, RSAs and RSUs, are subject to service-based vesting requirements, and expense is recognized on a straight-line basis over the vesting period. Forfeitures are accounted for as they occur. Stock-based compensation expense includes grants of stock options, time-based RSUs ("Time-Based RSUs") and performance-based RSUs ("Performance-Based RSUs", together with Time-Based RSUs, the "RSUs"). RSUs are recognized in the financial statements based on their fair value. In addition, stock-based payments to non-executive directors include grants of RSAs. Time-Based RSUs and RSAs are valued based on the intrinsic value of the difference between the exercise price, if any, of the award and the fair market value of WillScot's Common Stock on the grant date. Performance-Based RSUs are valued based on a Monte Carlo simulation model to reflect the impact of the Performance-Based RSUs market condition. The probability of satisfying a market condition is considered in the estimation of the grant-date fair value for Performance-Based RSUs and the compensation cost is not reversed if the market condition is not achieved, provided the requisite service has been provided. RSAs cliff vest in a one year period. Time-Based RSUs vest ratably over a period of four years . Certain Performance-Based RSUs cliff vest based on achievement of the relative total stockholder return ("TSR") of the Company's Common Stock as compared to the TSR of the constituents in the S&P MidCap 400 Index at the grant date over the performance period of three years . The target number of RSUs may be adjusted from 0 % to 200 % based on the TSR attainment levels defined by the Compensation Committee. The 100 % target payout is tied to performance at the 50 % percentile, with a payout curve ranging from 0 % (for performance less than the 25 % percentile) to 200 % (for performance at or above the 85 % percentile). Vesting is also subject to continued service requirements through the vesting date. For 555,790 Performance-Based RSUs granted in 2021, the awards cliff vest based on achievement of specified share prices of the Company's Common Stock at annual measurement dates over performance periods of 4.5 years to 4.8 years. The target number of RSUs may be adjusted from 0 to 1,333,334 based on the stock price attainment levels defined by the Company's Compensation Committee. The 555,790 RSU target payout is tied to a stock price of $ 47.50 , with a payout ranging from 0 RSUs (for a stock price less than $ 42.50 ) to 1,333,334 RSUs (for a stock price of $ 60.00 or greater). Stock options vest in tranches over a period of four years and expire ten years from the grant date. The fair value of each stock option award on the grant date is estimated using the Black-Scholes option-pricing model with the following assumptions: expected dividend yield, expected stock price volatility, weighted-average risk-free interest rate and weighted-average expected term of the options. The volatility assumption used in the Black-Scholes option-pricing model was based on a blend of peer group volatility and Company trading history as the Company did not have a sufficient trading history as a stand-alone public company to rely exclusively on its own trading history. Future calculations may use the Company trading history. Additionally, due to an insufficient history with respect to stock option activity and post-vesting cancellations, the expected term assumption was based on the simplified method under GAAP, which is based on the vesting period and contractual term for each tranche of awards. The mid-point between the weighted-average vesting term and the expiration date is used as the expected term under this method. The risk-free interest rate used in the Black-Scholes model is based on the implied US Treasury bill yield curve at the date of grant with a remaining term equal to the Company’s expected term assumption. As of December 31, 2024, WillScot had not declared or paid a cash dividend on common shares. Foreign Currency Translation and Transactions The Company’s reporting currency is the US Dollar (“USD”). Exchange rate adjustments resulting from foreign currency transactions are recognized in profit or loss, whereas effects resulting from the translation of financial statements are reflected as a component of accumulated other comprehensive loss, which is a component of shareholders’ equity. The assets and liabilities of subsidiaries whose functional currency is different from the USD are translated into USD at exchange rates at the reporting date and income and expenses are translated using average exchange rates for the respective period. 61 Exchange rate adjustments resulting from transactions in foreign currencies (currencies other than the Company entities’ functional currencies) are remeasured to the respective functional currencies using exchange rates at the dates of the transactions and are recognized in currency (gains) losses on the consolidated statements of operations. Foreign exchange gains and losses arising from a receivable or payable to a consolidated Company entity, the settlement of which is neither planned nor anticipated in the foreseeable future, are considered to form part of a net investment in the Company entity and are included within accumulated other comprehensive loss. Derivative Instruments and Hedging Activities The Company utilizes derivative financial instruments to manage its exposure to fluctuations in interest rates on variable rate debt and currency exchange rates. The Company does not use derivatives for trading or speculative purposes. The Company records derivatives on the balance sheet at fair value within prepaid expenses and other current assets and other non-current assets (if in an unrealized gain position) or within accrued liabilities and other non-current liabilities (if in an unrealized loss position). If a derivative is designated as a cash flow hedge and meets the highly effective threshold, the changes in the fair value of derivatives are recorded in accumulated other comprehensive loss. Amounts reported in accumulated other comprehensive loss related to the cash flow hedges are reclassified to earnings when the hedged item impacts earnings. For any derivative instruments not designated as hedging instruments, changes in fair value would be recognized in earnings in the period that the change occurs. The Company assesses, both at the inception of the hedge and on an ongoing quarterly basis, whether the derivatives designated as cash flow hedges are highly effective in offsetting the changes in cash flows of the hedged items. In the consolidated statements of cash flows, cash inflows and outflows related to derivative instruments are presented based on the underlying nature of the hedged items. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company enters into derivative financial ins truments only with counterparties with high credit ratings and with major financial institutions. Revenue Recognition A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of revenue is generated by rental income subject to the guidance in ASC 842. The remaining revenue is generated by performance obligations in contracts with customers for services or sale of units subject to the guidance in Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASC 606"). Leasing Revenue Income from operating leases is recognized on a straight-line basis over the lease term. The Company's lease arrangements can include multiple lease and non-lease components. 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, 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. When leases and services are billed in advance, recognition of revenue is deferred until services are rendered. If equipment is returned prior to the contractually obligated period, the excess, if any, between the amount the customer is contractually required to pay over the cumulative amount of revenue recognized to date is recognized as incremental revenue upon return. Rental equipment is leased under operating leases. Rental contracts with customers are generally based on a 28‑day or monthly rate and billing cycle. O perating lease minimum contractual terms generally range from 1 month to 60 months and leases are customarily renewable on a month-to-month basis after their initial term. Operating lease minimum contractual terms for modular space products, excluding ground level offices, averaged approximately 10 months for the year ended December 31, 2024 . The rental continues until cancelled by the Company or the customer. Services Revenue The Company generally has three non-lease service-related performance obligations in its contracts with customers: • Delivery and installation of the modular or portable storage unit; • Other ad hoc services performed during the lease term; and • Removal services that occur at the end of the lease term. Consideration is allocated to each of these performance obligations within the contract based upon their estimated relative standalone selling prices using an adjusted market approach. Revenue from these activities is recognized as the services are performed. Sales Revenue Sales revenue is generated by the sale of new and rental units. Revenue from the sale of new and rental units is generally recognized at a point in time upon the transfer of control to the customer, which occurs when the unit is delivered and installed in accordance with the contract. Sales transactions constitute a single performance obligation. 62 Other Matters The Company's non-lease revenues do not include material amounts of variable consideration, other than the variability for service arrangements expected to be performed beyond a twelve-month period. The Company's payment terms vary by the type and location of its customer and the product or services offered. The time between invoicing and when payment is due is not significant. While the Company may bill certain customers in advance, its contracts do not contain a significant financing component based on the short length of time between upfront billings and the performance of contracted services. For certain products, services, or customer types, the Company requires payment before the products or services are delivered to the customer. At December 31, 2024, current deferred revenue and customer deposits included deferred reven ue of $ 249.0 million and customer deposits of $ 1.8 million, respectively. At December 31, 2023, current deferred revenue and customer deposits included deferred revenue of $ 222.5 million and customer deposits of $ 2.0 million , respectively. Revenue is recognized net of sales tax billed to customers, which is subsequently remitted to governmental authorities. Leases as Lessee The Company leases real estate for certain of its branch offices, administrative offices, rental equipment storage properties, vehicles and equipment, and administrative operations. The Company determines if an arrangement is or contains a lease at inception. Leases are classified as either finance or operating at inception of the lease, with classification affecting the pattern of expense recognition in the statement of operations. Short-term leases, defined as leases with an initial term of 12 months or less, are not recorded on the balance sheet. Lease expense for short-term leases is recognized on a straight-line basis over the lease term. The Company has leases that contain both lease and non-lease components and has elected, as an accounting policy, to not separate lease components and non-lease components. Right of use ("ROU") assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The lease liability is calculated as the present value of the remaining minimum rental payments for existing leases using either the rate implicit in the lease or, if none exists, the Company's incremental borrowing rate, as the discount rate. The Company uses its incremental borrowing rate at commencement date in determining the present value of lease payments for those leases where the implicit rate is not known. The Company's incremental borrowing rate is a hypothetical rate based on its understanding of what would be the Company's secured credit rating. Variable lease payments are expensed in the period in which the obligation for those payments is incurred. Variable lease payments include payments for common area maintenance, real estate taxes, management fees and insurance. Many of the Company’s real estate lease agreements include one or more options to extend the lease, which are not included in the minimum lease terms unless the Company is reasonably certain it will exercise the option. Additionally, the Comp any’s leases do not generally include options to terminate the lease prior to the end of the lease term. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Advertising and Promotion Advertising and promotion costs, which are expensed as incurred , were $ 15.9 million , $ 10.5 million and $ 8.5 million for the years ended December 31, 2024, 2023 and 2022, respectively. Shipping Costs The Company includes costs to deliver rental equipment to customers, whether performed by third-parties or by internal employees, in costs of leasing and services and cost of sales. Income Taxes 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. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company records deferred tax assets to the extent it believes that it is more likely than not that these assets will be realized. In making such determination, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent results of operations. Valuation allowances are recorded to reduce the deferred tax assets to an amount that will more likely than not be realized. 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. Conversely, to the extent circumstances indicate that a valuation allowance is no longer necessary, that portion of the valuation allowance is reversed, which generally reduces the Company’s income tax expense. Deferred tax liabilities are recognized for the income taxes on the undistributed earnings of wholly-owned foreign subsidiaries unless such earnings are indefinitely reinvested, or will only be repatriated when possible to do so at minimal 63 additional tax cost. Income tax relating to items recognized directly in equity is recognized in equity and not in profit (loss) for the year. In accordance with applicable authoritative guidance, the Company accounts for uncertain income tax positions using a benefit recognition model with a two-step approach; 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. 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. Uncertain tax positions that relate only to timing of when an item is included on a tax return are considered to have met the recognition threshold. The Company classifies interest on tax deficiencies and income tax penalties within income tax expense. The Company accounts for any impacts of the Global Intangible Low-Taxed Income ("GILTI") in the period in which they are incurred. Fair Value Measurements The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair va lue measurement. The inputs are prioritized into three levels that may be used to measure fair value. See further discussion of the levels in Note 15. Warrants The Company accounted for warrants as either derivative liabilities or as equity instruments depending on the specific terms of the warrant agreements. In periods subsequent to issuance, warrants classified as liabilities were subject to remeasurement at each balance sheet date and transaction date with changes in the estimated fair values of the common stock warrant liabilities and gains and losses on extinguishment of common stock warrant liabilities reported in the consolidated statements of operations. Effective November 29, 2022 , no warrants were outstanding. Recently Issued and Adopted Accounting Standards Recently Issued Accounting Standards ASU 2023-09. Income Taxes (Topic 740): Improvements to Income Tax Disclosures In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). ASU 2023-09 requires entities to disclose more detailed information in their reconciliation of their statutory tax rate to their effective tax rate. The ASU also requires entities to disclose more detailed information about income taxes paid, including by jurisdiction; pretax income (or loss) from continuing operations; and income tax expense (or benefit). ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2023-09 on its income tax disclosures. ASU 2024-03. Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses In November 2024, the FASB issued Accounting Standards Update No. 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"). ASU 2024-03 requires incremental disclosures about specific expense categories, including but not limited to, purchases of inventory, employee compensation, depreciation, amortization, and selling expenses. The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted and the amendments may be applied either prospectively or retrospectively. The Company is currently evaluating this ASU to determine its impact on the Company's disclosures. Recently Adopted Accounting Standards ASU 2023-07. Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures In November 2023, the FASB issued Accounting Standards Update No. 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"). ASU 2023-07 expands the breadth and frequency of segment disclosures, requiring disclosure of (i) significant segment expenses, (ii) other segment items, (iii) the chief operating decision maker's title and position, (iv) how the chief operating decision maker uses the reported measures of a segment's profit or loss and (v) interim disclosure of all segment profit, loss and asset disclosures currently required annually. ASU 2023-07 clarifies that a public entity may report one or more measures of segment profit or loss and requires that single reportable segment entities provide all required segment disclosures. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-07 as of December 31, 2024. Refer to Note 18 - Segment Reporting. 64 NOTE 2 - Business Combination and Acquisitions Business Combination During the year ended December 31, 2024, the Company acquired certain assets and assumed certain liabilities from a US regional provider of perimeter solutions for $ 36.8 million. As of the acquisition date, the goodwill acquired was $ 25.3 million, the intangible assets acquired were $ 2.5 million, and the fair value of rental equipment recognized was $ 8.8 million. The purchase price allocation is preliminary and subject to revision as additional information is obtained. 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 based on the final valuations. Goodwill recognized is attributable to expected operating synergies, assembled workforces, and the going concern value of the acquired businesses. Goodwill recorded for this acquisition is deductible for tax purposes. Asset Acquisitions During 2024, the Company acquired certain assets and assumed certain liabilities of a US national provider of clearspan solutions and three regional storage and modular companies, which consisted primarily of approximately 600 climate-controlled containers and 800 modular units, for $ 84.5 million in cash. As of the acquisition dates, the fair value of rental equipment acquired from these asset acquisitions was $ 80.7 million. Integration Costs The Company records integration costs related to acquisitions within selling, general and administrative ("SG&A") expense. The Company incurred $ 7.5 million, $ 10.4 million and $ 15.5 million in integration costs for the years ended December 31, 2024, 2023 and 2022, respectively. Termination of Agreement to Acquire McGrath RentCorp On January 28, 2024, the Company entered into an agreement and plan of merger (the “Merger Agreement”) with McGrath RentCorp ("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. During the year ended December 31, 2024, the Company recorded $ 42.4 million in legal and professional fees related to the McGrath transaction within SG&A expense. In connection with the Company's proposed acquisition of McGrath, the Company entered into a commitment letter dated January 28, 2024, which was amended and restated on June 13, 2024 and modified by a Notice of Reduction of Bridge Commitments on June 28, 2024 (the "Commitment Letter"), pursuant to which certain financial institutions committed to make available, in accordance with the terms of the Commitment Letter, (i) a senior secured bridge credit facility and (ii) an upsize to the existing ABL Facility (as defined below). As a result of the termination of the Merger Agreement, the Commitment Letter was terminated. NOTE 3 - Discontinued Operations Tank and Pump Divestiture On September 30, 2022, the Company sold its former Tank and Pump segment for $ 321.9 million. Exiting the former Tank and Pump segment represented the Company’s strategic shift to concentrate its operations on its core modular and storage businesses. Results for the former Tank and Pump segment are reported in income from discontinued operations within the consolidated statements of operations for the year ended December 31, 2022. UK Storage Solutions Divestiture On January 31, 2023, the Company sold its former UK Storage Solutions segment for $ 418.1 million. Exiting the UK Storage Solutions segment represented the Company’s strategic shift to concentrate its operations on its core modular and storage businesses in North America. Results for the former UK Storage Solutions segment are reported in income from discontinued operations within the consolidated statements of operations for the years ended December 31, 2023 and 2022. The following tables present the results of the former Tank and Pump segment and the former UK Storage Solutions segment as reported in income from discontinued operations within the consolidated statements of operations. The 2022 results for the former Tank and Pump segment represent results for the nine months ended September 30, 2022 as the Company sold the former Tank and Pump segment on September 30, 2022. The 2023 results for the former UK Storage Solutions segment represent results for one month as the Company sold the former UK Storage Solutions segment on January 31, 2023. Year Ended December 31, 2023 (in thousands) UK Storage Solutions Revenues: Leasing and services revenue: Leasing $ 6,389 Delivery and installation 1,802 Sales revenue: New units 54 Rental units 449 Total revenues 8,694 Costs: Costs of leasing and services: Leasing 1,407 Delivery and installation 1,213 Costs of sales: New units 38 Rental units 492 Gross profit 5,544 Expenses: Selling, general and administrative 1,486 Other income, net ( 1 ) Operating income 4,059 Interest expense 56 Income from discontinued operations before income tax 4,003 Gain on sale of discontinued operations 175,708 Income tax expense from discontinued operations 45,468 Income from discontinued operations $ 134,243 In January 2023, a $ 0.4 million adjustment was made to the gain on sale of the former Tank and Pump segment due to the final contractual working capital adjustment. Including this adjustment, the total gain on sale of discontinued operations was $ 176.1 million for the year ended December 31, 2023 . Year Ended December 31, 2022 (in thousands) Tank and Pump UK Storage Solutions Total Revenues: Leasing and services revenue: Leasing $ 65,572 $ 79,772 $ 145,344 Delivery and installation 27,665 22,876 50,541 Sales revenue: New units 2,202 1,106 3,308 Rental units 917 1,455 2,372 Total revenues 96,356 105,209 201,565 Costs: Costs of leasing and services: Leasing 13,828 16,737 30,565 Delivery and installation 23,285 14,867 38,152 Costs of sales: New units 1,636 738 2,374 Rental units 310 1,012 1,322 Depreciation of rental equipment 8,145 4,254 12,399 Gross profit 49,152 67,601 116,753 Expenses: Selling, general and administrative 18,045 21,795 39,840 Other depreciation and amortization 6,103 5,906 12,009 Currency losses, net — 138 138 Other expense (income), net 4 ( 7 ) ( 3 ) Operating income 25,000 39,769 64,769 Interest expense 512 789 1,301 Income from discontinued operations before income tax 24,488 38,980 63,468 Income tax expense from discontinued operations 843 34,882 35,725 Gain on sale of discontinued operations 35,456 — 35,456 Income from discontinued operations $ 59,101 $ 4,098 $ 63,199 For the year ended December 31, 2022 , significant operating and investing items related to the former Tank and Pump segment were as follows: Years Ended December 31, (in thousands) 2022 Operating activities of discontinued operations: Depreciation and amortization $ 14,248 Investing activities of discontinued operations: Proceeds from sale of rental equipment $ 918 Purchases of rental equipment and refurbishments $ ( 21,831 ) Purchases of property, plant and equipment $ ( 525 ) For the years ended December 31, 2023 and 2022 , significant operating and investing items related to the UK Storage Solutions segment were as follows: Years Ended December 31, (in thousands) 2023 2022 Operating activities of discontinued operations: Depreciation and amortization $ — $ 10,160 Investing activities of discontinued operations: Proceeds from sale of rental equipment $ 514 $ 1,455 Purchases of rental equipment and refurbishments $ ( 371 ) $ ( 23,931 ) Proceeds from sale of property, plant and equipment $ 8 $ 504 Purchases of property, plant and equipment $ ( 64 ) $ ( 3,752 ) NOTE 4 - Revenue Revenue Disaggregation Geographic Areas The Company had total revenue in the following geographic areas for the years ended December 31, as follows: Years Ended December 31, (in thousands) 2024 2023 2022 US $ 2,243,545 $ 2,219,561 $ 1,998,796 Canada 125,154 120,123 125,536 Mexico 27,019 25,083 18,291 Total revenues $ 2,395,718 $ 2,364,767 $ 2,142,623 Major Product and Service Lines Equipment leasing is the Company's core business and the primary driver of the Company's revenue and cash flows. This includes turnkey space solutions along with VAPS, which include 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 used by customers in connection with the Company's products. Leasing is complemented by new unit sales and sales of rental units. In connection with its leasing and sales activities, the Company provides services including delivery and installation, maintenance, removal, and other ad hoc services. The Company’s revenue by major product and service line for the years ended December 31, was as follows: Years Ended December 31, (in thousands) 2024 2023 2022 Modular space leasing revenue (a) $ 1,011,086 $ 953,822 $ 840,926 Portable storage leasing revenue 356,873 396,781 361,197 VAPS and third party leasing revenues (b) 397,640 391,948 343,625 Other leasing-related revenue (c) 74,276 91,384 75,942 Leasing revenue 1,839,875 1,833,935 1,621,690 Delivery and installation revenue 418,881 437,179 429,152 Total leasing and services revenue 2,258,756 2,271,114 2,050,842 New unit sales revenue 74,499 48,129 40,338 Rental unit sales revenue 62,463 45,524 51,443 Total revenues $ 2,395,718 $ 2,364,767 $ 2,142,623 (a) Includes revenue from clearspan structures. (b) Incl udes $ 35.2 million, $ 23.9 million, and $ 25.3 million of service revenue for the years ended December 31, 2024, 2023 and 2022, respectively. (c) Includes primarily damage billings, delinquent payment charges, other processing fees, and is partially offset by provisions for specific uncollectible receivables. 65 Leasing and Services Revenue The majority of revenue ( 75 %, 77 % , and 75 % for the years ended December 31, 2024, 2023 and 2022, respectively) is generated by lease income subject to the guidance of ASC 842. The remaining revenue is generated by performance obligations in contracts with customers for services or sale of units subject to the guidance in ASC 606. At December 31, 2024 and for the years ended December 31, 2025 through 2029 and thereafter, future committed leasing revenues under non-cancelable operating leases with the Company’s customers, excluding revenue from delivery and installation and potential lease extensions, were as follows: (in thousands) Operating Leases 2025 $ 368,440 2026 125,376 2027 45,784 2028 18,164 2029 4,705 Thereafter 3,602 Total $ 566,071 Receivables The Company manages credit risk associated with its accounts receivables at the customer level. Because the same customers generate the revenues that are accounted for under both ASC 606 and ASC 842, the discussions below on credit risk and the Company's allowance for credit losses address the Company's total revenues. Concentration of credit risk with respect to the Company's receivables is limited because of a large number of geographically diverse customers who operate in a variety of end markets. No single customer accounted for more than 1.7 % and 1.0 % of the Company’s receivables at December 31, 2024 and 2023, respectively. The Company's top five customers with the largest open receivables balances represented 5.2 % and 4.3 % of the total receivables balance as of December 31, 2024 and 2023, respectively. The Company manages credit risk through credit approvals, credit limits, and other monitoring procedures. The Company's allowance for credit losses reflects its estimate of the amount of receivables that it will be unable to collect . The estimated losses are calculated using the loss rate method based upon a review of outstanding receivables, related aging, and historical collection experience. T he Company's estimates reflect changing circumstances, and the Company may be required to increase or decrease its allowance. During the years ended December 31, 2024, 2023 and 2022, the Company recognized bad debt expense to reflect changes in the allowance for credit losses of $ 20.4 million, $ 23.4 million, and $ 10.4 million, respectively, within SG&A expense in its consolidated statements of operations. Contract Assets and Liabilities When customers are billed in advance for services, the Company defers recognition of revenue until the related services are performed, which generally occurs at the end of the contract. The balance sheet classification of deferred revenue is determined based on the contractual lease term. For contracts that continue beyond their initial contractual lease term, revenue continues to be deferred until the services are performed. As of December 31, 2024 and 2023, the Company had approximately $ 139.4 million and $ 124.1 million, respectively, of deferred revenue related to service revenue billed in advance. During the years ended December 31, 2024, 2023 and 2022, $ 72.7 million, $ 67.6 million and $ 47.2 million, respectively, of deferred revenue related to service revenue billed in advance was recognized as revenue . The Company does not have material contract assets, and it did not recognize any material impairments of any contract assets. The Company's uncompleted contracts with customers have unsatisfied (or partially satisfied) performance obligations. For the future services revenues that are expected to be recognized within twelve months, the Company has elected to utilize the optional disclosure exemption made available regarding transaction price allocated to unsatisfied (or partially unsatisfied) performance obligations. The transaction price for performance obligations that will be completed in greater than twelve months is variable based on the market rate in place at the time those services are provided, and therefore, the Company is applying the optional exemption to omit disclosure of such amounts. The primary costs to obtain contracts for new and rental unit sales with the Company's customers are commissions. The Company pays its sales force commissions on the sale of new and rental units. For new and rental unit sales, the period benefited by each commission is less than one year. As a result, the Company has applied the practical expedient for incremental costs of obtaining a sales contract and expenses commissions as incurred. 66 NOTE 5 - Leases As of December 31, 2024, the future lease payments for operating and finance lease liabilities were as follows: (in thousands) Operating Leases Finance Leases 2025 $ 73,817 $ 32,006 2026 66,773 30,488 2027 54,144 27,253 2028 41,901 29,735 2029 25,572 21,858 Thereafter 49,285 25,306 Total lease payments 311,492 166,646 Less: interest ( 44,239 ) ( 22,858 ) Present value of lease liabilities $ 267,253 $ 143,788 Lease liabilities as of December 31, 2024 excl uded $ 48.7 million of minimum lease payments related to a lease arrangement that was legally binding but had not yet commenced. The lease is estimated to commence in fiscal year 2025 with an initial lease term of 12 years. Finance lease liabilities are included within long-term debt and current portion of long-term debt on the consolidated balance sheets. The Company’s lease activity during the years ended December 31, 2024, 2023, and 2022 was as follows: Years Ended December 31, Components of lease expense (in thousands) 2024 2023 2022 Finance Lease Expense Amortization of finance lease assets $ 14,159 $ 16,945 $ 13,900 Interest on obligations under finance leases 6,350 3,777 1,899 Total finance lease expense $ 20,509 $ 20,722 $ 15,799 Operating Lease Expense Fixed lease expense Cost of leasing and services $ 1,101 $ 1,396 $ 2,797 Selling, general and administrative 80,199 67,374 60,017 Short-term lease expense Cost of leasing and services 28,758 26,010 32,947 Selling, general and administrative 2,071 1,789 1,792 Variable lease expense Cost of leasing and services 762 2,109 5,388 Selling, general and administrative 10,925 8,380 7,289 Total operating lease expense $ 123,816 $ 107,058 $ 110,230 67 Supplemental cash flow information related to leases for the years ended December 31, 2024, 2023, and 2022 was as follows: Years Ended December 31, Supplemental Cash Flow Information (in thousands) 2024 2023 2022 Cash paid for the amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 81,046 $ 68,889 $ 61,418 Operating cash outflows from finance leases $ 6,087 $ 3,715 $ 1,895 Financing cash outflows from finance leases $ 19,429 $ 16,510 $ 15,159 Right of use assets obtained in exchange for lease obligations $ 92,343 $ 95,897 $ 55,005 Assets obtained in exchange for finance leases $ 46,253 $ 58,737 $ 29,803 Weighted-average remaining operating lease terms and the weighted average discount rates as of December 31 were as follows: Lease Terms and Discount Rates 2024 2023 Weighted-average remaining lease term - operating leases 5.1 years 5.4 years Weighted-average discount rate - operating leases 5.8 % 5.9 % Weighted-average remaining lease term - finance leases 4.8 years 5.0 years Weighted-average discount rate - finance leases 5.1 % 4.8 % NOTE 6 - Inventories Inv entories at December 31, consisted of the following: (in thousands) 2024 2023 Raw materials $ 39,823 $ 43,071 Finished units 7,650 4,335 Inventories $ 47,473 $ 47,406 NOTE 7 - Rental Equipment, net Rental equipment, net at December 31 consisted of the following: (in thousands) 2024 2023 Modular space units $ 3,658,086 $ 3,541,451 Portable storage units 1,070,025 1,009,059 Value-added products 220,205 204,933 Total rental equipment 4,948,316 4,755,443 Less: accumulated depreciation ( 1,570,377 ) ( 1,374,128 ) Rental equipment, net $ 3,377,939 $ 3,381,315 The Company had rental equipment in the following geographic areas at December 31 : (in thousands) 2024 2023 US $ 4,532,692 $ 4,311,256 Canada 374,446 396,127 Mexico 41,178 48,060 Total rental equipment 4,948,316 4,755,443 Less: accumulated depreciation ( 1,570,377 ) ( 1,374,128 ) Rental equipment, net $ 3,377,939 $ 3,381,315 68 NOTE 8 – Property, Plant and Equipment, net Property, plant and equipment, net at December 31 consisted of the following: (in thousands) 2024 2023 Land, buildings, and leasehold improvements $ 184,475 $ 178,117 Vehicles and equipment 272,587 233,793 Office furniture, fixtures and software 119,622 109,460 Total property, plant and equipment 576,684 521,370 Less: accumulated depreciation ( 213,611 ) ( 180,483 ) Property, plant and equipment, net $ 363,073 $ 340,887 Depreciation expense related to property, plant and equipment w as $ 44.3 million, $ 47.1 million, and $ 38.6 million for the years ended December 31, 2024, 2023 and 2022, respectively. The depreciation expense for these assets was presented in other depreciation and amortization in the consolidated statements of operations. As of December 31, 2024 and 2023, the gross cost of property, plant and equipment assets under finance leases was $ 177.6 million and $ 133.3 million, respectively, with related accumulated depreciation of $ 52.5 million and $ 40.8 million, respectively. NOTE 9 - Goodwill and Intangible Assets Goodwill Changes in the carrying amount of goodwill were as follows: (in thousands) Total Balance at December 31, 2022 $ 1,011,429 Additions from acquisitions 164,502 Effects of movements in foreign exchange rates 704 Balance at December 31, 2023 1,176,635 Additions from acquisitions 26,948 Effects of movements in foreign exchange rates ( 2,230 ) Balance at December 31, 2024 $ 1,201,353 The Company conducted its annual impairment test of goodwill as of October 1, 2024 and determined that there was no impairment of goodwill identified. Accumulated historical goodwill impairment losses wer e $ 792.8 million prior to Double Eagle Acquisition Corporation's acquisition of Williams Scotsman International, Inc. in 2017. There were no g oodwill impairments recorded for the years ended December 31, 2024, 2023 and 2022. Intangible Assets Intangible assets other than goodwill at December 31, consisted of the following: December 31, 2024 (in thousands) Weighted average remaining life (in years) Gross carrying amount Impairment Loss Accumulated amortization Net book value Intangible assets subject to amortization: Customer relationships 3.5 $ 215,408 $ — $ ( 113,415 ) $ 101,993 Technology 1.5 1,500 — ( 1,125 ) 375 Trade names 2.7 165,500 ( 132,540 ) ( 9,164 ) 23,796 Indefinite-lived intangible assets: Trade name – WillScot 125,000 — — 125,000 Total intangible assets other than goodwill $ 507,408 $ ( 132,540 ) $ ( 123,704 ) $ 251,164 69 December 31, 2023 (in thousands) Weighted average remaining life (in years) Gross carrying amount Accumulated amortization Net book value Intangible assets subject to amortization: Customer relationships 4.5 $ 214,408 $ ( 84,324 ) $ 130,084 Technology 2.5 1,500 ( 875 ) 625 Indefinite-lived intangible assets: Trade name - Mobile Mini 164,000 — 164,000 Trade name - WillScot 125,000 — 125,000 Total intangible assets other than goodwill $ 504,908 $ ( 85,199 ) $ 419,709 For the years ended December 31, 2024, 2023 and 2022, the aggregate amount recorded to depreciation and amortization expense for intangible assets subject to amortization was $ 38.5 million, $ 25.8 million and $ 23.8 million, respectively. In the second quarter of 2024, the Company determined that a review of the carrying value of the Mobile Mini trade name was necessary based on the Company's plan to rebrand under a single WillScot brand name and discontinue the use of the Mobile Mini trade name. As of June 30, 2024, the Mobile Mini trade name was tested for impairment using the relief from royalty valuation method. The estimate of fair value included a discount rate of 9 %, an unobservable input (Level 3). After determining the estimated fair value, t he Company recorded an impairment charge of $ 132.5 million during the year ended December 31, 2024. This non-cash charge was recorded to impairment loss on intangible asset 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 being amortized over the remaining useful life of the asset. As of December 31, 2024, the expected future amortization expense for intangible assets is as follows: (in thousands) Amortization Expense 2025 $ 43,438 2026 37,093 2027 30,463 2028 14,920 2029 250 Total $ 126,164 NOTE 10 - Debt The carrying value of debt outstanding at December 31 consisted of the following: (in thousands, except rates) Interest rate Year of maturity 2024 2023 2025 Secured Notes 6.125 % 2025 $ 525,283 $ 522,735 ABL Facility Varies 2027 1,556,651 1,929,259 2028 Secured Notes 4.625 % 2028 495,582 494,500 2029 Secured Notes 6.625 % 2029 492,467 — 2031 Secured Notes 7.375 % 2031 494,329 493,709 Finance Leases Varies Varies 143,788 117,099 Total debt 3,708,100 3,557,302 Less: current portion of long-term debt 24,598 18,786 Total long-term debt $ 3,683,502 $ 3,538,516 70 Maturities of debt, including finance leases, during the years subsequent to December 31, 2024 are as follows: (in thousands) 2025 $ 558,506 2026 30,488 2027 1,602,901 2028 529,735 2029 521,858 Thereafter 525,306 Total $ 3,768,794 The Company records de bt issuance costs as offsets against the carrying value of the related debt . These debt costs are amortized and included as part of interest expense over the remaining contractual terms of those debt instruments for each of the next five years as follows: (in thousands) Debt issuance cost amortization 2025 $ 12,069 2026 $ 11,065 2027 $ 7,489 2028 $ 3,454 2029 $ 1,763 Thereafter $ 1,759 Asset Backed Lending Facility On July 1, 2020, certain subsidiaries of the Company, including Williams Scotsman, Inc. ("WSI"), entered into an asset-based credit agreement. As amended on June 30, 2022, the agreement provides for revolving credit facilities in the aggregate principal amount of up to $ 3.7 billion, consisting of: (i) a senior secured asset-based US dollar revolving credit facility in the aggregate principal amount of $ 3.3 billion (the “US Facility”), (ii) a $ 400.0 million senior secured asset-based multicurrency revolving credit facility (the "Multicurrency Facility," and together with the US Facility, the "ABL Facility"), available to be drawn in US Dollars, Canadian Dollars, British Pounds Sterling or Euros, and (iii) an accordion feature that permits the Company to increase the lenders' commitments in an aggregate amount not to exceed the greater of $ 750.0 million and the amount of suppressed availability (as defined in the ABL Facility), plus any voluntary prepayments that are accompanied by permanent commitment reductions under the ABL Facility, subject to the satisfaction of customary conditions including lender approval. The ABL Facility is scheduled to mature on June 30, 2027. The applicable margin for Canadian Bankers' Acceptance Rate, Term Secured Overnight Financing Rate ("SOFR"), British Pounds Sterling and Euro loans is 1.50 %. In addition to the applicable margin, the facility includes a credit spread adjustment of 0.10 %. The applicable margin for base rate and Canadian Prime Rate loans is 0.50 %. The applicable margins are subject to one step down of 0.25 % or one step up of 0.25 % based on the Company's leverage ratio and excess availability from the prior quarter. The ABL Facility requires the payment of a commitment fee on the unused available borrowings of 0.20 % annually. As of December 31, 2024, the weighted average interest rate for borrowings under the ABL Facility, as adjusted for the effects of the interest rate swap agreements, was 5.33 %. Refer to Note 14 for a more detailed discussion on interest rate management. On February 26, 2024, WSI entered into an amendment to the ABL Facility (the "Fifth Amendment") to, among other things, change the rate under the ABL Facility for borrowings denominated in Canadian Dollars from a Canadian Dollar Offered Rate ("CDOR")-based rate to a Canadian Overnight Repo Rate Average ("CORRA")-based rate, subject to certain adjustments specified in the ABL Facility, and to update certain other provisions regarding successor interest rates to CDOR. On February 27, 2024, WSI and certain other subsidiaries of the Company entered into an amendment to the ABL Facility (the "Sixth Amendment"), which was to become effective upon the closing of the Company's proposed acquisition of McGrath. Following the termination of the Merger Agreement on September 17, 2024, the Sixth Amendment was null and void. Borrowing availability under the US Facility and the Multicurrency Facility is equal to the lesser of (i) the aggregate Revolver Commitments and (ii) the Borrowing Base ("Line Cap"). At December 31, 2024, the Line Cap was $ 3.2 billion and the Borrowers had approximately $ 1.6 billion of available borrowing capacity under the ABL Facility, including $ 1.4 billion under the US Facility and $ 183.1 million under the Multicurrency Facility. Borrowing capacity under the ABL Facility is made available for up to $ 220.0 million letters of credit and $ 220.0 million of swingline loans. At December 31, 2024, the available capacity was $ 199.4 million of letters of credit and $ 219.3 million of swingline loans. At December 31, 2024, letters of credit and bank guarantees carried fees of 1.625 %. The Company had issued $ 20.6 million of standby letters of credit under the ABL Facility at December 31, 2024. The Company had approximately $ 1.6 billion outstanding principal under the ABL Facility at December 71 31, 2024. Debt issuance costs of $ 19.0 million and $ 26.8 million were included in the carrying value of the ABL Facility at December 31, 2024 and December 31, 2023, respectively . The obligations of the US Borrowers are unconditionally guaranteed by WSI and each existing and subsequently acquired or organized direct or indirect wholly-owned US organized restricted subsidiary of WSI, other than excluded subsidiaries (together with WSI, the "US Guarantors"). The obligations of the Multicurrency Borrowers are unconditionally guaranteed by the US Borrowers and the US Guarantors, and each existing and subsequently acquired or organized direct or indirect wholly-owned Canadian organized restricted subsidiary of Holdings other than certain excluded subsidiaries (together with the US Guarantors, the "ABL Guarantors"). Senior Secured Notes On June 15, 2020, WSI completed a private offering of $ 650.0 million in aggregate principal amount of its 6.125 % senior secured notes due 2025 (the "2025 Secured Notes") to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as amended ("Rule 144A"). The 2025 Secured Notes mature on June 15, 2025 and bear interest at a rate of 6.125 % per annum. Interest is payable semi-annually on June 15 and December 15 of each year. In 2021, the Company redeemed $ 123.5 million of its 2025 Secured Notes. As of December 31, 2024, the aggregate principal amount outstanding for the 2025 Secured Notes was $ 526.5 million. Unamortized deferred financing costs pertaining to the 2025 Secured Notes were $ 1.2 million as of December 31, 2024. At December 31, 2024, the 2025 Secured Notes were classified as long-term on the Consolidated Balance Sheet as the Company has the intent and believes it has the ability to refinance this obligation on a long-term basis as demonstrated by the forecasted available capacity under the ABL Facility, among other refinancing alternatives to be considered opportunistically. On August 25, 2020, WSI completed a private offering of $ 500.0 million in aggregate principal amount of its 4.625 % senior secured notes due 2028 (the "2028 Secur ed Notes") to qualified institutional buyers pursuant to Rule 144A . T he 2028 Secured Notes mature on August 15, 2028 and bear interest at a rate of 4.625 % per annum. Interest is payable semi-annually on August 15 and February 15 of each year. Unamortized deferred financing costs pertaining to the 2028 Secured Notes were $ 4.4 million as of December 31, 2024. On September 25, 2023, WSI completed a private offering of $ 500.0 million in aggregate principal amount of its 7.375 % senior secured notes due 2031 (the "2031 Secur ed Notes") to qualified institutional buyers pursuant to Rule 144A . P roceeds were used to repay approximately $ 494.0 million of outstanding indebtedness under the ABL Facility and certain fees and expenses. T he 2031 Secured N otes mature on October 1, 2031 and bear interest at a rate of 7.375 % per annum. Interest is payable semi-annually on April 1 and October 1 of each year, beginning April 1, 2024. Unamortized deferred financing costs pertaining to the 2031 Secured Notes were $ 5.7 million as of December 31, 2024. On June 28, 2024, WSI completed a private offering of $ 500.0 million in aggregate principal amount of its 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. T he 2029 Secured N otes mature on June 15, 2029 and bear interest at a rate of 6.625 % per annum. Interest is payable semi-annually on June 15 and December 15 of each year, beginning December 15, 2024. Unamortized deferred financing costs pertaining to the 2029 Secured Notes were $ 7.5 million as of December 31, 2024. The tables below depict the redemption prices (expressed as percentages of the principal amount) of the notes if redeemed during the twelve-month period commencing on the dates below, plus accrued and unpaid interest, if any, to but not including the date of redemption. 2025 Secured Notes Year Redemption Price June 15, 2024 and thereafter 100.000 % 2028 Secured Notes Year Redemption Price August 15, 2024 101.156 % August 15, 2025 and thereafter 100.000 % 2029 Secured Notes The Company may redeem the 2029 Secured Notes at any time before June 15, 2026 at a redemption price equal to 100 % of the principal amount thereof, plus a customary make whole premium for the notes being redeemed, plus accrued and unpaid interest, if any, to but not including the redemption date. Before June 15, 2026, the Company may redeem up to 40 % of the aggregate principal amount of the 2029 Secured Notes at a price equal to 106.625 % of the principal amount of the notes being redeemed, plus accrued and unpaid interest, if any, to but not including the redemption date with the net proceeds of certain equity offerings. At any time prior to June 15, 2026, the Company may also redeem up to 10 % of the aggregate principal amount at a redemption price equal to 103 % of the principal amount of the 2029 Secured Notes being redeemed during each twelve-month period commencing with the issue date, plus accrued and unpaid interest, if any, to but not including the redemption date. The table below depicts the redemption prices (expressed as percentages of the principal amount) of the 72 notes if redeemed during the twelve-month period commencing on the dates below, plus accrued and unpaid interest, if any, to but not including the date of redemption. Year Redemption Price June 15, 2026 103.313 % June 15, 2027 101.656 % June 15, 2028 and thereafter 100.000 % 2031 Secured Notes The Company may redeem the 2031 Secured Notes at any time before October 1, 2026 at a redemption price equal to 100 % of the principal amount thereof, plus a customary make whole premium for the notes being redeemed, plus accrued and unpaid interest, if any, to but not including the redemption date. Before October 1, 2026, the Company may redeem up to 40 % of the aggregate principal amount of the 2031 Secured Notes at a price equal to 107.375 % of the principal amount of the notes being redeemed, plus accrued and unpaid interest, if any, to but not including the redemption date with the net proceeds of certain equity offerings. At any time prior to October 1, 2026, the Company may also redeem up to 10 % of the aggregate principal amount at a redemption price equal to 103 % of the princip al amount of the 2031 Secured Notes being redeemed during each twelve-month period commencing with the issue date, plus accrued and unpaid interest, if any, to but not including the redemption date. The table below depicts the redemption prices (expressed as percentages of the principal amount) of the notes if redeemed during the twelve-month period commencing on the dates below, plus accrued and unpaid interest, if any, to but not including the date of redemption. Year Redemption Price October 1, 2026 103.688 % October 1, 2027 101.844 % October 1, 2028 and thereafter 100.000 % The 2025 Secured Notes, 2028 Secured Notes, 2029 Secured Notes and 2031 Secured Notes (collectively, “the Secured Notes”) are unconditionally guaranteed by certain subsidiaries of the Company (collectively, “the Note Guarantors”). WillScot is not a guarantor of the Secured Notes. The Note Guarantors are guarantors or borrowers under the ABL Facility. To the extent lenders under the ABL Facility release the guarantee of any Note Guarantor, such Note Guarantor will also be released from obligations under the Secured Notes. The Secured Notes and related guarantees are secured by a second priority security interest in substantially the same assets of WSI and the Note Guarantors securing the ABL Facility. Upon the repayment of the 2025 Secured Notes and the 2028 Secured Notes, if the lien associated with the ABL Facility represents the only lien outstanding on the collateral under the 2029 Secured Notes and the 2031 Secured Notes (other than certain permitted), the collateral securing the 2029 Secured Notes and the 2031 Secured Notes will be released and the 2029 Secured Notes and the 2031 Secured Notes will become unsecured subject to satisfaction of customary conditions. Finance Leases The Company maintains finance leases primarily for transportation related equipment. At December 31, 2024 and December 31, 2023, obligations under the finance leases were $ 143.8 million and $ 117.1 million, respectively. The Company is in compliance with all debt covenants and restrictions for the aforementioned debt instruments as of and for the year ended December 31, 2024. NOTE 11 - Equity Preferred Stock WillScot's certificate of incorporation authorizes the issuance of 1,000,000 shares of Preferred Stock with a par value of $ 0.0001 per share. As of December 31, 2024 and 2023, the Company had zero shares of Preferred Stock issued and outstanding. Common Stock WillScot's certificate of incorporation authorizes the issuance of 500,000,000 shares of Common Stock with a par value of $ 0.0001 per share. The Company had 183,564,899 shares of Common Stock issued and outstanding as of December 31, 2024. The outstanding shares of the Company's Common Stock are duly authorized, validly issued, fully paid and non-assessable. In connection with stock compensation vesting and stock option exercises described in Note 16, and the warrant exercises described in Note 12 , the Company issued 731,210 , 549,272 and 3,847,905 shares of Common Stock during the years ended December 31, 2024, 2023 and 2022, respectively. 73 Stock Repurchase Program In September 2024, the Board of Directors approved a reset of the share repurchase program authorizing the Company to repurchase up to $ 1.0 billion of its outstanding shares of Common Stock and equivalents. The stock repurchase program does not obligate the Company to purchase any particular number of shares, and the timing and exact amount of any repurchases will depend on various factors, including market pricing, business, legal, accounting, and other considerations. The Company may repurchase its shares in open market transactions or through privately negotiated transactions in accordance with federal securities laws, at the Company's discretion. The repurchase program, which has no expiration date, may be increased, suspended, or terminated at any time. The program is expected to be implemented over the course of several years and will be conducted subject to the covenants in the agreements governing indebtedness. During the year ended December 31, 2024, the Company repurchased 7,133,446 shares of Common Stock for $ 270.4 million, excluding excise tax. During the year ended December 31, 2023, the Company repurchased 18,533,819 shares of Common Stock and stock equivalents for $ 810.8 million, excluding excise tax. As of December 31, 2024, $ 821.8 million of the authorization for future repurchases of our common stock remained available. Accumulated Other Comprehen sive Loss The changes in accumulated other comprehensive loss ("AOCI"), net of tax, for the years ended December 31, 2024, 2023 and 2022, were as follows: (in thousands) Foreign Currency Translation Unrealized losses on hedging activities Total Balance at December 31, 2021 $ ( 25,574 ) $ ( 3,497 ) $ ( 29,071 ) Other comprehensive loss before reclassifications ( 44,548 ) ( 1,033 ) ( 45,581 ) Reclassifications from AOCI to income (a) — 4,530 4,530 Balance at December 31, 2022 ( 70,122 ) — ( 70,122 ) Other comprehensive income before reclassifications 14,091 14,813 28,904 Reclassifications from AOCI to income (a) — ( 11,550 ) ( 11,550 ) Balance at December 31, 2023 ( 56,031 ) 3,263 ( 52,768 ) Other comprehensive (loss) income before reclassifications ( 24,689 ) 27,005 2,316 Reclassifications from AOCI to income (a) — ( 20,175 ) ( 20,175 ) Balance at December 31, 2024 $ ( 80,720 ) $ 10,093 $ ( 70,627 ) (a) For the years ended December 31, 2024, 2023 and 2022, $( 20.2 ) million, $( 11.6 ) million and $ 4.5 million, respectively, was reclassified from AOCI into the consolidated statements of operations within interest expense related to the interest rate swaps discussed in Note 14. For the years ended December 31, 2024, 2023 and 2022, the Company recorded tax expense (benefit) of $ 5.0 million, $ 2.9 million and $( 1.1 ) million, respectively, associated with this reclassification. NOTE 12 - Warrants In connection with the acquisition of Modular Space Holdings, Inc. ("ModSpace") in 2018, the Company issued warrants to purchase approximately 10.0 million shares of its Common Stock (the "2018 Warrants") to former shareholders of ModSpace. Each 2018 Warrant entitled the holder to purchase one share of Common Stock at an exercise price of $ 15.50 per share, subject to potential adjustment. The 2018 Warrants expired on November 29, 2022. The Company accounted for the 2018 Warrants as liabilities until June 30, 2020, the date all issued and outstanding shares of the Company's Class B Common Stock were cancelled. Subsequent to June 30, 2020, the 2018 Warrants were equity classified through their expiration in November 2022. During the year ended December 31, 2022, 33,965 of the 2018 Warrants were repurchased for $ 0.6 million and cancelled. In addition, during the year ended December 31, 2022, 4,011,665 of the 2018 Warrants were exercised on a cashless basis, resulting in the issuance of 2,590,940 shares of Common Stock. The remaining 32,543 of the 2018 Warrants expired on November 29, 2022 . Effect ive November 29, 2022, no 2018 Warrants were outstanding. 74 NOTE 13 – Income Taxes The components of income tax expense from continuing operations for the years ended December 31, are comprised of the following: (in thousands) 2024 2023 2022 Current Federal $ 29,518 $ — $ — State 17,457 12,250 11,327 Foreign 6,823 7,382 6,204 Deferred Federal ( 23,990 ) 80,698 63,585 State ( 19,197 ) 27,276 8,917 Foreign ( 2,136 ) ( 1,031 ) ( 1,170 ) Total income tax expense from continuing operations $ 8,475 $ 126,575 $ 88,863 Income tax expense from continuing operations differed from the amount computed by applying the US statutory income tax rate of 21% to the income from continuing operations before income taxes as follows for the years ended December 31 : (in thousands) 2024 2023 2022 Income from continuing operations before income tax US $ 18,686 $ 444,557 $ 341,412 Foreign 17,918 23,862 23,792 Total income from continuing operations before income tax $ 36,604 $ 468,419 $ 365,204 US Federal statutory income tax expense $ 7,687 $ 98,368 $ 76,693 Effect of tax rates in foreign jurisdictions 1,175 1,434 1,085 State income tax expense, net of federal benefit 784 25,412 17,078 Valuation allowances 2,776 ( 815 ) ( 6,907 ) Non-deductible (non-taxable) items 677 775 1,147 Non-deductible executive compensation 1,813 2,014 1,258 Tax credits ( 6,988 ) ( 396 ) ( 161 ) Uncertain tax positions ( 791 ) ( 523 ) ( 804 ) Tax law changes (excluding valuation allowance) (a) ( 166 ) ( 50 ) ( 94 ) Other 1,508 356 ( 432 ) Income tax expense from continuing operations $ 8,475 $ 126,575 $ 88,863 Effective income tax rate 23.15 % 27.02 % 24.33 % (a) Tax law changes primarily represent changes in tax law in foreign jurisdictions. 75 Deferred Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases, as well as net operating losses and carryforwards. Significa nt components of the Company’s deferred tax assets and liabilities as of December 31 are as follows: (in thousands) 2024 2023 Deferred tax assets Deferred interest expense $ 118,228 $ 116,982 Employee benefit plans 10,408 9,079 Accrued liabilities 5,011 5,996 Allowance for credit losses 25,828 21,964 Deferred revenue 60,907 57,494 Operating lease liability 66,925 61,849 Other 12,397 5,006 Tax loss carryforwards 75,312 99,676 Deferred tax assets, gross 375,016 378,046 Valuation allowance ( 4,206 ) ( 1,430 ) Net deferred income tax asset $ 370,810 $ 376,616 Deferred tax liabilities Rental equipment and other property, plant and equipment $ ( 791,853 ) $ ( 808,873 ) Intangible assets ( 18,106 ) ( 60,358 ) Right of use asset ( 66,508 ) ( 61,653 ) Deferred tax liability ( 876,467 ) ( 930,884 ) Net deferred income tax liability $ ( 505,657 ) $ ( 554,268 ) The Company's valuation allowance increased by $ 2.8 million from 2023, related to capital loss generated from the McGrath termination fee that is not more likely than not realizable in certain states that do not allow capital loss carryback or carryforward. Tax loss carryforwards as of December 31, 2024 are outlined in the table below and include US Federal and US state. The availability of these tax losses to offset future income varies by jurisdiction. Furthermore, the ability to utilize the tax losses may be subject to additional limitations upon the occurrence of certain events, such as a change in the ownership of the Company. Some of the Company’s tax attributes are subject to annual limitations due to historical changes in ownership from acquisitions, mergers or other related ownership shift events; however, the Company anticipates that our remaining available net operating losses will be consumed prior to their expiration. The Company’s tax loss carryforwards are as follows at December 31, 2024: (in thousands) Loss Carryforward Deferred Tax Expiration Jurisdiction: US - Federal $ 105,115 $ 22,074 2031, Indefinite US - Capital Loss 180,000 44,742 2029 US - State 190,330 8,496 2025 – 2043, Indefinite Total $ 475,445 $ 75,312 As of December 31, 2024, the total amount of the basis difference in investments outside the US, which are indefinitely reinvested and for which deferred taxes have not been provided, is approximately $ 162.0 million . The tax, if any, associated with the recovery of the basis difference is dependent on the manner in which it is recovered and is not readily determinable. Unrecognized Tax Positions The Company is subject to taxation in US, Canada, Mexico, India, and state jurisdictions. The Company’s tax returns are subject to examination by the applicable tax authorities prior to the expiration of statute of limitations for assessing additional taxes, which generally ranges from two to five years after the end of the applicable tax year. As of December 31, 2024, generally, tax years for 2018 through 2023 remain subject to examination by the tax authorities. In addition, in certain taxing jurisdictions, in the case of carryover tax attributes to years open for assessment, such attributes may be subject to reduction by taxing authorities. 76 A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: (in thousands) 2024 2023 2022 Unrecognized tax benefits – January 1, $ 43,134 $ 43,627 $ 44,314 Decrease from expiration of statute of limitations (a) ( 16,624 ) ( 493 ) ( 687 ) Unrecognized tax benefits – December 31, $ 26,510 $ 43,134 $ 43,627 (a) Includes $ 15.8 of presentational adjustments with no effect on amounts presented in the consolidated balance sheet or the annual effective tax rate for the year ended December 31, 2024. At December 31, 2024 there were $ 25.8 million of unrecognized tax benefits that, if recognized, would affect the annual effective tax rate. The Company classifies interest on tax deficiencies and income tax penalties within income tax expense. During the years ended December 31, 2024, 2023, and 2022, the Company recognized approximately $( 0.2 ) million, $ 0.0 million, and $( 0.1 ) million in interest, respectively. The Company accrued approximately $ 0.2 million and $ 0.4 million for the payment of interest at December 31, 2024 and 2023, respectively. Future tax settlements or statute of limitation expirations could result in a change to the Company’s uncertain tax positions. As of December 31, 2024, the Company believes that it is reasonably possible that approximately $ 0.2 million of unrecognized tax benefits could decrease in the next twelve months as a result of the expiration of statutes of limitation, audit settlements or resolution of tax uncertainties. NOTE 14 - Derivatives Interest Rate Swaps 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 ABL Facility. 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 terminate on June 30, 2027. 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 Company’s ABL Facility. 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 3.44 % on the notional amount. The swap agreements terminate on June 30, 2027. In 2018, the Company entered into an interest rate swap agreement with a financial counterparty relating to $ 400.0 million in aggregate notional amount of variable-rate debt under the ABL Facility. Under the terms of the agreement, the Company received a floating rate equal to one-month LIBOR and made payments based on a fixed interest rate of 3.06 % on the notional amount. The swap agreement terminated on May 29, 2022. 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. At December 31, 2024, the floating rate that the Company received under the terms of these swap agreements was 4.34 % for the swap agreements entered in January 2023 and 4.38 % for the swap agreements entered in January 2024. The location and the fair value of derivative instruments designated as hedges were as follows: (in thousands) Balance Sheet Location 2024 2023 Cash Flow Hedges: Interest rate swap Prepaid expenses and other current assets $ 6,990 $ 9,145 Interest rate swap Other non-current assets $ 6,666 $ — Interest rate swap Other non-current liabilities $ — $ ( 4,595 ) The fair value of the interest rate swaps was based on dealer quotes of market forward rates, a Level 2 input on the fair value hierarchy, and reflected the amount that the Company would receive or pay for contracts involving the same attributes and maturity dates. The following table discloses the impact of the interest rate swaps, excluding the impact of income taxes, on other comprehensive income (“OCI”), AOCI and the Company’s statement of operations for the years ended December 31: (in thousands) 2024 2023 2022 Gain recognized in OCI $ 29,256 $ 15,901 $ 4,669 Location of gain (loss) recognized in income Interest expense, net Interest expense, net Interest expense, net (Gain) loss reclassified from AOCI into income $ ( 20,175 ) $ ( 11,550 ) $ 4,530 Over the next twelve months, the Company expects to reclassify $ 6.8 million, net of tax, from accumulated other comprehensive income into the consolidated statement of operations within interest expense related to the interest rate swaps. 77 Foreign Currency Contract In December 2022, the Company executed a contingent forward contract to sell £ 330.0 million upon the closing of the sale of the former UK Storage Solutions segment at a price ranging from 1.20550 to 1.20440 USD to British Pounds Sterling. The price was dependent upon the date of the closing of the sale. This contract, which was to expire on September 11, 2023, mitigated the foreign currency risk of the USD relative to the British Pound Sterling prior to the closing of the sale of the former UK Storage Solutions segment. This contract did not qualify for hedge accounting and was revalued at fair value at the reporting date with unrealized gains and losses reflected in the Company's results of operations. Upon the closing of the sale of the UK Storage Solutions segment on January 31, 2023, the Company settled the contingent forward contract and received cash at an exchange rate of 1.205 USD to British Pounds Sterling. The following table discloses the impact of the foreign currency contract, excluding the impact of income taxes, on the Company’s statement of operations for the years ended December 31: (in thousands) 2023 2022 Loss recognized in income $ 7,715 $ 930 Location of loss recognized in income Currency losses, net Currency losses, net NOTE 15 - Fair Value Measures The fair value of financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The Company utilizes the following accounting guidance for the three levels of inputs that may be used to measure fair value: Level 1 - Observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2 - Observable inputs, other than Level 1 inputs in active markets, that are observable either directly or indirectly; and Level 3 - Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions The Company has assessed that the fair values of cash and short-term deposits, marketable securities, trade receivables, trade payables, and other current liabilities approximate their carrying amounts. The Company's nonfinancial assets, which are measured at fair value on a nonrecurring basis, include rental equipment, property, plant and equipment, goodwill, intangible assets and certain other assets. Based on the borrowing rates currently available for bank loans with similar terms and average maturities, the fair values of finance leases at December 31, 2024 and December 31, 2023 approximate their respective book values. The carrying value of the ABL Facility, excluding debt issuance costs, approximates fair value as the interest rates are variable and reflective of current market rates. The fair values of the 2025 Secured Notes, the 2028 Secured Notes, the 2029 Secured Notes, and the 2031 Secured Notes are based on their last trading price at the end of each period obtained from a third party. The following table shows the carrying amounts and fair values of these financial liabilities measured using Level 2 inputs: December 31, 2024 December 31, 2023 (in thousands) Carrying Amount Fair Value Carrying Amount Fair Value 2025 Secured Notes $ 525,283 $ 527,269 $ 522,735 $ 527,021 2028 Secured Notes 495,582 477,170 494,500 474,285 2029 Secured Notes 492,467 506,235 — — 2031 Secured Notes 494,329 514,310 493,709 528,075 Total $ 2,007,661 $ 2,024,984 $ 1,510,944 $ 1,529,381 As of December 31, 2024, the carrying values of the 2025 Secured Notes, the 2028 Secured Notes, the 2029 Secured Notes, and the 2031 Secured Notes included $ 1.2 million, $ 4.4 million, $ 7.5 million, and $ 5.7 million, respectively, of unamortized debt issuance costs, which were presented as a direct reduction of the corresponding liability. As of December 31, 2023, the carrying values of the 2025 Secured Notes, the 2028 Secured Notes, and the 2031 Secured notes included $ 3.8 million, $ 5.5 million, and $ 6.3 million, respectively, of unamortized debt issuance costs which were presented as a direct reduction of the corresponding liability. The loca tion and the fair value of derivative assets and liabilities in the consolidated balance sheet are disclosed in Note 14. 78 NOTE 16 - Stock-Based Compensation Restricted Stock Awards The following table summarizes the Company's RSA activity during the years ended December 31, 2024, 2023 and 2022 : Number of Shares Weighted-Average Grant Date Fair Value Balance December 31, 2021 36,176 $ 29.30 Granted 35,244 $ 37.17 Vested ( 36,176 ) $ 29.30 Balance December 31, 2022 35,244 $ 37.17 Granted 28,946 $ 44.44 Vested ( 35,244 ) $ 37.17 Balance December 31, 2023 28,946 $ 44.44 Granted 36,346 $ 38.11 Vested ( 28,946 ) $ 44.44 Balance December 31, 2024 36,346 $ 38.11 Compensation expense for RSAs recognized in SG&A expense in the consolidated statements of operations was $ 1.3 million, $ 1.3 million, and $ 1.2 million for the years ended December 31, 2024, 2023, and 2022, respectively. At December 31, 2024, unrecognized compensation cost related to RSAs totaled $ 0.7 million and was expected to be recognized over the remaining weighted average vesting period of 0.5 years. The total fair value of RSA's vested in 2024, 2023, and 2022 was $ 1.1 million, $ 1.6 million, and $ 1.3 million, respectively. Time-Based RSUs The following table summarizes the Company's Time-Based RSU activity during the years ended December 31, 2024, 2023 and 2022 : Number of Shares Weighted-Average Grant Date Fair Value Balance December 31, 2021 997,451 $ 18.54 Granted 377,804 $ 35.40 Forfeited ( 106,570 ) $ 31.35 Vested ( 478,906 ) $ 16.42 Balance December 31, 2022 789,779 $ 26.16 Granted 213,388 $ 50.74 Forfeited ( 61,848 ) $ 36.75 Vested ( 322,483 ) $ 21.38 Balance December 31, 2023 618,836 $ 36.07 Granted 273,524 $ 48.68 Forfeited ( 45,544 ) $ 46.58 Vested ( 270,164 ) $ 30.41 Balance December 31, 2024 576,652 $ 43.87 Compensation expense for Time-Based RSUs recognized in SG&A expense in the consolidated statements of operations was $ 10.2 million, $ 8.1 million, and $ 8.2 million for the years ended December 31, 2024, 2023, and 2022, respectively. At December 31, 2024, unrecognized compensation cost related to Time-Based RSUs totaled $ 15.1 million and was expected to be recognized over the remaining weighted average vesting period of 2.1 years. The total fair value of Time-Based RSU's vested in 2024, 2023, and 2022 was $ 12.4 million, $ 16.2 million, and $ 18.0 million, respectively. 79 Performance-Based RSUs The following table summarizes the Company's Performance-Based RSU award activity during the years ended December 31, 2024 and 2023 and 2022: Number of Shares Weighted-Average Grant Date Fair Value Balance December 31, 2021 1,536,394 $ 26.34 Granted 745,079 $ 42.34 Forfeited ( 74,071 ) $ 41.66 Vested ( 313,152 ) $ 16.45 Balance December 31, 2022 1,894,250 $ 33.67 Granted 376,826 $ 69.52 Forfeited ( 37,451 ) $ 47.52 Vested ( 293,934 ) $ 16.34 Balance December 31, 2023 1,939,691 $ 42.95 Granted 295,833 $ 66.60 Forfeited ( 62,074 ) $ 63.46 Vested ( 404,990 ) $ 39.30 Balance December 31, 2024 1,768,460 $ 47.02 Compensation expense for Performance-Based RSUs recognized in SG&A expense in the consolidated statements of operations was $ 24.5 million, $ 24.9 million and $ 20.2 million for the years ended December 31, 2024, 2023, and 2022, respectively. At December 31, 2024, unrecognized compensation cost related to Performance-Based RSUs totaled $ 25.3 million and was expected to be recognized over the remaining weighted average vesting period of 1.0 year. The total fair value of Performance-Based RSU's vested in 2024, 2023, and 2022 was $ 36.3 million, $ 15.0 million and $ 11.9 million, respectively. Refer to Note 1 for the details of conditions required for the performance-based RSUs to vest. Stock Options The following table summarizes the Company's stock option activity during the years ended December 31, 2024, 2023 and 2022 : WillScot Options Weighted-Average Exercise Price per Share Converted Mobile Mini Options Weighted-Average Exercise Price per Share Balance at December 31, 2021 534,188 $ 13.60 1,527,643 $ 14.66 Exercised — $ — ( 663,367 ) $ 16.93 Balance at December 31, 2022 534,188 $ 13.60 864,276 $ 12.91 Exercised — $ — ( 35,030 ) $ 14.21 Balance at December 31, 2023 534,188 $ 13.60 829,246 $ 12.86 Exercised — $ — ( 14,357 ) $ 17.59 Balance at December 31, 2024 534,188 $ 13.60 814,889 $ 12.77 Fully vested and exercisable options, December 31, 2024 534,188 $ 13.60 814,889 $ 12.77 Under our stock option plans, the Company may issue shares on a net basis at the request of the option holder. This occurs by netting the option costs in shares from the shares exercised. No options were granted in the years ended December 31, 2024, 2023, and 2022 . At December 31, 2024, the intrinsic value of both stock options outstanding and stock options fully vested and currently exercisable was $ 27.5 million. At December 31, 2024, the weighted-average remaining contractual term of options outstanding was 3.2 years for WillScot options and 2.9 years for converted Mobile Mini options. The total pre-tax intrinsic value of stock options exercised during the years ended December 31, 2024, 2023, and 2022 was $ 0.4 million, $ 1.1 million, and $ 16.0 million , respectively. Com pensation expense for stock option awards, recognized in SG&A expense in the consolidated statements of operations, was $ 0.2 million for the year ended December 31, 2022 . At December 31, 2022, all compensation cost related to stock option awards had been recognized. 80 NOTE 17 - Commitments and Contingencies Legal Proceedings The Company is involved in various lawsuits, claims and legal proceedings that arise in the ordinary course of business. The Company assesses these matters on a case-by-case basis as they arise and establishes reserves as required. As of December 31, 2024, with respect to these outstanding matters, the Company believes that the amount or range of reasonably possible loss will not, either individually or in the aggregate, have a material adverse effect on the consolidated financial position, results of operations, or cash flows. However, the outcome of such matters is inherently unpredictable and subject to significant uncertainties. Purchase Commitments In November 2024, the Company entered into a fixed-dollar unconditional purchase obligation with a supplier for rental equipment. Under the terms of the agreement, the Company is obligated to purchase $ 20.0 million of rental equipment at any time prior to November 2027. The Company has no other material outstanding purchase obligations as of December 31, 2024. NOTE 18 - Segment Reporting In January 2024, the Company completed the unification of its go-to market structure by integrating its modular and storage divisions under a single leadership team organized by geography, achieving local product unification within each metropolitan statistical area and the ability to consistently deliver its portfolio of solutions to its entire customer base. In connection with this change in operating model, the Company realigned the composition of its operating and reportable segments to reflect how its Chief Operating Decision Maker ("CODM") reviews financial information to allocate resources to and assess performance of the segments. As a result, the Company concluded that its two operating segments (US and Other North America) are aggregated into one reportable segment as the operating segments share similar economic characteristics (e.g., comparable gross margins and comparable adjusted earnings before interest, taxes, depreciation and amortization margins) and similar qualitative characteristics as the operating segments offer similar products and services to similar customers, use similar methods to distribute products and are subject to similar competitive risks. All historical financial segment information has been recast to conform to this new presentation. The Company's CODM is the Chief Executive Officer ("CEO"), who reviews operating results to make decisions about allocating resources and assessing performance for the entire company. Refer to Note 4 for revenue by geographic area and revenue by major product and service lines. Refer to Note 7 for rental equipment by geographic area. Refer to the Consolidated Balance Sheet for total assets. Refer to the Consolidated Statement of Cash Flows for total expenditures for additions to long-lived assets. The Company defines EBITDA as net income (loss) plus interest (income) expense, income tax (benefit) expense, depreciation and amortization. The Company reflects further adjustments to EBITDA (“Adjusted EBITDA”) to exclude certain non-cash items and the effect of what the Company considers transactions or events not related to its core and ongoing business operations. The measure of profit or loss used by the CODM to evaluate operating segment performance and allocate resources is Adjusted EBITDA. Adjusted EBITDA is used to determine capital allocation between operating segments and certain aspects of management's compensation. Management believes that evaluating operating segment performance excluding such items is meaningful because it provides insight with respect to the intrinsic and ongoing operating results of the Company. The Company considers Adjusted EBITDA to be an important metric because it reflects the business performance of the segments, inclusive of indirect costs. 81 The following tables set forth certain information regarding significant expense categories fo r the years ended December 31, 2024, 2023, and 2022, respectively. Year Ended December 31, (in thousands) 2024 2023 2022 Revenues: Leasing and services revenue: Unit leasing and other rental-related $ 1,442,235 $ 1,441,987 $ 1,278,065 VAPS and third party leasing 397,640 391,948 343,625 Delivery revenue 224,371 273,598 267,320 Installation revenue 194,510 163,581 161,832 Sales revenue: New units 74,499 48,129 40,338 Rental units 62,463 45,524 51,443 Total revenues 2,395,718 2,364,767 2,142,623 Less: (a) Costs of leasing and services: Unit leasing 316,422 328,124 311,441 VAPS and third party leasing 68,656 70,343 65,427 Delivery 176,551 185,639 194,821 Installation 152,329 131,478 127,815 Costs of sales: New units 45,554 26,439 24,011 Rental units 32,224 23,141 26,907 Employee SG&A expense (b) 247,886 257,327 268,136 Other segment items (c) 292,936 280,811 240,191 Adjusted EBITDA from continuing operations $ 1,063,160 $ 1,061,465 $ 883,874 (a) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. (b) Employee SG&A expense consists of salaries and wages, bonus, commissions, payroll taxes, and employee benefits. (c) Other segment items consist of service agreements and professional fees, real estate and occupancy costs, travel, bad debt expense, marketing and advertising, taxes, and other miscellaneous expenses. 82 The following tables present a reconciliation of the Company’s Income from continuing operations to Adjusted EBITDA for the years ended December 31, 2024, 2023, and 2022, respectively: Year Ended December 31, (in thousands) 2024 2023 2022 Income from continuing operations $ 28,129 $ 341,844 $ 276,341 Income tax expense from continuing operations 8,475 126,575 88,863 Depreciation and amortization 384,972 338,654 319,099 Interest expense, net 227,311 205,040 146,278 Impairment loss on intangible asset 132,540 — — Restructuring costs, lease impairment expense and other related charges 9,435 22 168 Currency losses, net 593 6,754 886 Transaction costs 651 2,259 25 Integration costs 7,521 10,366 15,484 Impairment loss on long-lived asset 374 — — Stock compensation expense 35,966 34,486 29,613 Termination fee 180,000 — — Other (a) 47,193 ( 4,535 ) 7,117 Adjusted EBITDA from continuing operations $ 1,063,160 $ 1,061,465 $ 883,874 (a) Includes $ 42.4 million in legal and professional fees related to the terminated McGrath transaction for the year ended December 31, 2024. NOTE 19 - Earnings Per Share Basic earnings per share (“EPS”) is calculated by dividing net income attributable to WillScot common shareholders by the weighted average number of shares of Common Stock outstanding during the period. The shares of Common Stock issued as a result of the vesting of RSUs and RSAs as well as the exercise of stock options or redemption of warrants are included in EPS based on the weighted average number of days in which they were outstanding during the period. Diluted EPS is computed similarly to basic EPS, except that it includes the potential dilution that could occur if dilutive securities were exercised. Effects of potentially dilutive securities are present ed only in periods in which they are dilutive. The following table reconciles income from continuing operations attributable to WillScot common shareholders to net income attributable to common shareholders for the dilutive EPS calculation and the weighted average shares outstanding for the basic calculation to the weighted average shares outstanding for the diluted calculation for the years ended December 31: (in thousands) 2024 2023 2022 Numerator: Income from continuing operations $ 28,129 $ 341,844 $ 276,341 Income from discontinued operations — 134,613 63,199 Net income $ 28,129 $ 476,457 $ 339,540 Denominator: Weighted average Common Shares outstanding - basic 188,102 198,555 216,809 Dilutive effect of outstanding securities: Warrants — — 1,605 RSAs 15 15 18 Time-Based RSUs 152 274 401 Performance-Based RSUs 1,112 2,040 1,471 Stock Options 911 966 1,095 Weighted average Common Shares outstanding - dilutive 190,292 201,850 221,399 83 The following potential common shares were excluded from the computation of dilutive EPS because their effect would have been anti-dilutive: (in thousands) 2024 2023 2022 Time-based RSUs 235 106 — Performance-based RSUs 645 277 591 Note 20 - Restructuring In June 2024, the Company implemented a cost-reduction plan for certain centralized and redundant resources to be completed within a one-year period. During the year ended December 31, 2024, restructuring costs incurred under this plan included employee termination costs of $ 8.6 million. The following is a summary of the activity in the Company’s restructuring accruals for the year ended December 31, 2024: Year Ended December 31, (in thousands) 2024 Beginning balance $ — Charges 8,559 Cash payments ( 7,572 ) Foreign currency translation ( 34 ) Ending balance $ 953 NOTE 21 - Subsequent Events On February 18, 2025, the Company's Board of Directors approved a quarterly dividend program. Under the program, subject to quarterly approval and declaration by the Board of Directors, dividends will be payable on the third Wednesday of the third month of each calendar quarter to stockholders of record as of the first Wednesday of that same month. The Board of Directors has declared a quarterly dividend of $ 0.07 per share, payable on March 19, 2025 to stockholders of record as of the close of business on March 5, 2025. 84 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.