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WillScot Mobile Mini Holdings Corp. - Quarter Report: 2022 September (Form 10-Q)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number:001-37552
wsc-20220930_g1.jpg
WILLSCOT MOBILE MINI HOLDINGS CORP.
(Exact name of registrant as specified in its charter)
Delaware82-3430194
(State or other jurisdiction of incorporation)(I.R.S. Employer Identification No.)
4646 E Van Buren St., Suite 400
Phoenix, Arizona 85008
(Address of principal executive offices, including zip code)

(480) 894-6311
(Registrant’s telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.0001 per shareWSC
The Nasdaq Capital Market
Warrants to purchase Common Stock(1)
WSCTWOTC Markets Group Inc.
(1) Issued in connection with the registrant's acquisition of Modular Space Holding, Inc. in August 2018, which are exercisable for one share of the registrant's common stock at an exercise price of $15.50 per share.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No
Shares of Common Stock, par value $0.0001 per share, outstanding: 208,889,811 shares at November 1, 2022.





WILLSCOT MOBILE MINI HOLDINGS CORP.
Quarterly Report on Form 10-Q
Table of Contents
PART I Financial Information
Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2022 and 2021


2



ITEM 1.    Financial Statements

WillScot Mobile Mini Holdings Corp.
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except share data)
September 30, 2022
December 31, 2021
Assets
Cash and cash equivalents$15,442 $12,699 
Trade receivables, net of allowances for credit losses of $56,127 and $46,160, respectively
439,309 368,856 
Inventories44,873 32,092 
Prepaid expenses and other current assets39,691 36,539 
Assets held for sale - current951 32,854 
Total current assets540,266 483,040 
Rental equipment, net3,227,735 2,946,008 
Property, plant and equipment, net311,526 282,247 
Operating lease assets225,955 235,344 
Goodwill1,064,582 1,078,699 
Intangible assets, net431,291 451,928 
Other non-current assets8,909 10,797 
Assets held for sale - non-current— 285,536 
Total long-term assets5,269,998 5,290,559 
Total assets$5,810,264 $5,773,599 
Liabilities and equity
Accounts payable$160,262 $110,270 
Accrued expenses123,300 95,592 
Accrued employee benefits53,477 65,927 
Deferred revenue and customer deposits212,005 159,612 
Operating lease liabilities - current51,971 51,103 
Current portion of long-term debt13,497 11,968 
Liabilities held for sale - current— 23,173 
Total current liabilities614,512 517,645 
Long-term debt2,935,800 2,676,985 
Deferred tax liabilities385,854 337,784 
Operating lease liabilities - non-current174,777 184,199 
Other non-current liabilities18,182 15,737 
Liabilities held for sale - non-current— 44,486 
Long-term liabilities3,514,613 3,259,191 
Total liabilities4,129,125 3,776,836 
Commitments and contingencies (see Note 17)
Preferred Stock: $0.0001 par, 1,000,000 shares authorized and zero shares issued and outstanding
— — 
Common Stock: $0.0001 par, 500,000,000 shares authorized and 211,243,820 and 223,939,527 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively
22 22 
Additional paid-in capital3,112,076 3,616,902 
Accumulated other comprehensive loss(93,009)(29,071)
Accumulated deficit(1,337,950)(1,591,090)
Total shareholders' equity1,681,139 1,996,763 
Total liabilities and shareholders' equity$5,810,264 $5,773,599 
See the accompanying notes which are an integral part of these condensed consolidated financial statements.
3



WillScot Mobile Mini Holdings Corp.
Condensed Consolidated Statements of Operations (Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands, except share and per share data)
2022202120222021
Revenues:
Leasing and services revenue:
Leasing$447,535 $342,599 $1,226,206 $965,894 
Delivery and installation132,837 91,910 341,027 252,914 
Sales revenue:
New units9,901 15,370 26,232 35,915 
Rental units13,900 11,168 38,874 40,911 
Total revenues604,173 461,047 1,632,339 1,295,634 
Costs:
Costs of leasing and services:
Leasing111,898 77,967 288,774 222,747 
Delivery and installation95,680 74,221 256,130 209,963 
Costs of sales:
New units6,007 11,175 15,469 24,322 
Rental units7,097 5,468 21,123 22,441 
Depreciation of rental equipment69,159 52,990 192,228 165,027 
Gross profit314,332 239,226 858,615 651,134 
Expenses:
Selling, general and administrative145,444 127,346 445,319 356,651 
Other depreciation and amortization17,066 16,459 50,895 51,793 
Lease impairment expense and other related charges— 601 254 2,328 
Restructuring costs— 1,856 (86)11,956 
Currency losses, net236 127 247 196 
Other (income) expense, net(2,526)1,475 (7,642)202 
Operating income154,112 91,362 369,628 228,008 
Interest expense38,165 29,006 102,362 87,793 
Fair value loss on common stock warrant liabilities— — — 26,597 
Loss on extinguishment of debt— — — 5,999 
Income from continuing operations before income tax115,947 62,356 267,266 107,619 
Income tax expense from continuing operations30,219 5,243 67,167 32,341 
Income from continuing operations85,728 57,113 200,099 75,278 
Discontinued operations:
Income from discontinued operations before income tax10,802 5,391 24,488 14,255 
Income tax expense from discontinued operations1,986 1,401 5,496 3,612 
Gain on sale of discontinued operations34,049 — 34,049 — 
Income from discontinued operations42,865 3,990 53,041 10,643 
Net income$128,593 $61,103 $253,140 $85,921 



4


Earnings per share from continuing operations:
Basic$0.40 $0.25 $0.91 $0.33 
Diluted $0.39 $0.24 $0.89 $0.32 
Earnings per share from discontinued operations:
Basic$0.20 $0.02 $0.24 $0.05 
Diluted $0.20 $0.02 $0.24 $0.05 
Earnings per share:
Basic$0.60 $0.27 $1.15 $0.38 
Diluted $0.59 $0.26 $1.13 $0.37 
Weighted average shares:
Basic213,636,876 225,998,202 219,312,260 227,557,664 
Diluted217,927,725 231,868,397 223,933,319 234,084,800 


See the accompanying notes which are an integral part of these condensed consolidated financial statements.
5


WillScot Mobile Mini Holdings Corp.
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
Three Months Ended September 30,Nine Months Ended
September 30,
(in thousands)
2022202120222021
Net income$128,593 $61,103 $253,140 $85,921 
Other comprehensive (loss) income:
Foreign currency translation adjustment, net of income tax expense of $0 for both the three and nine months ended September 30, 2022 and $0 and $60 for the three and nine months ended September 30, 2021, respectively.
(37,733)(11,162)(67,435)(3,035)
Net change in derivatives, net of income tax expense of $676 for the three months ended September 30, 2021, and $1,171 and $1,999 for the nine months ended September 30, 2022 and 2021, respectively.
— 2,206 3,497 6,529 
Total other comprehensive (loss) income(37,733)(8,956)(63,938)3,494 
Total comprehensive income $90,860 $52,147 $189,202 $89,415 


See the accompanying notes which are an integral part of these condensed consolidated financial statements.
6


WillScot Mobile Mini Holdings Corp.
Condensed Consolidated Statements of Changes in Equity (Unaudited)
Nine Months Ended September 30, 2022
 Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive LossAccumulated DeficitTotal Shareholders' Equity
(in thousands)SharesAmount
Balance at December 31, 2021223,940 $22 $3,616,902 $(29,071)$(1,591,090)$1,996,763 
Net income— — — — 51,171 51,171 
Other comprehensive loss— — — (1,753)— (1,753)
Stock-based compensation and issuance of Common Stock from vesting498 — 6,395 — — 6,395 
Repurchase and cancellation of Common Stock and warrants(2,064)— (77,409)— — (77,409)
Issuance of Common Stock from the exercise of options and warrants800 — 3,313 — — 3,313 
Withholding taxes on net share settlement of stock-based compensation— — (12,295)— — (12,295)
Balance at March 31, 2022223,174 22 3,536,906 (30,824)(1,539,919)1,966,185 
Net income— — — — 73,376 73,376 
Other comprehensive loss— — — (24,452)— (24,452)
Stock-based compensation and issuance of Common Stock from vesting70 — 9,292 — — 9,292 
Repurchase and cancellation of Common Stock and warrants(7,222)— (249,515)— — (249,515)
Issuance of Common Stock from the exercise of options and warrants69 — 139 — — 139 
Withholding taxes on net share settlement of stock-based compensation— — (1,075)— — (1,075)
Balance at June 30, 2022216,091 22 3,295,747 (55,276)(1,466,543)1,773,950 
Net income— — — — 128,593 128,593 
Other comprehensive loss— — — (37,733)— (37,733)
Stock-based compensation and issuance of Common Stock from vesting26 — 6,941 — — 6,941 
Repurchase and cancellation of Common Stock(5,271)— (197,457)— — (197,457)
Issuance of Common Stock from the exercise of options398 — 7,363 — — 7,363 
Withholding taxes on net share settlement of stock-based compensation— — (518)— — (518)
Balance at September 30, 2022211,244 $22 $3,112,076 $(93,009)$(1,337,950)$1,681,139 

7



Nine Months Ended September 30, 2021
Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive LossAccumulated DeficitTotal Shareholders' Equity
(in thousands)SharesAmount
Balance at December 31, 2020229,038 $23 $3,852,291 $(37,207)$(1,751,234)$2,063,873 
Net income— — — — 4,447 4,447 
Other comprehensive income— — — 7,211 — 7,211 
Stock-based compensation and issuance of Common Stock from vesting229 — 4,951 — — 4,951 
Repurchase and cancellation of Common Stock and warrants(2,793)— (76,788)— — (76,788)
Issuance of Common Stock from the exercise of options and warrants341 — 5,414 — — 5,414 
Withholding taxes on net share settlement of stock-based compensation— — (3,219)— — (3,219)
Balance at March 31, 2021226,815 23 3,782,649 (29,996)(1,746,787)2,005,889 
Net income— — — — 20,371 20,371 
Other comprehensive income— — — 5,239 — 5,239 
Stock-based compensation and issuance of Common Stock from vesting60 — 9,038 — — 9,038 
Repurchase and cancellation of Common Stock and warrants (4,100)— (35,508)— — (35,508)
Issuance of Common Stock from the exercise of warrants4,058 — 384 — — 384 
Balance at June 30, 2021226,833 23 3,756,563 (24,757)(1,726,416)2,005,413 
Net income— — — — 61,103 61,103 
Other comprehensive income— — — (8,956)— (8,956)
Stock-based compensation and issuance of Common Stock from vesting192 — 7,686 — — 7,686 
Repurchase and cancellation of Common Stock and warrants (3,752)— (106,264)— — (106,264)
Issuance of Common Stock from the exercise of warrants393 — 1,517 — — 1,517 
Withholding taxes on net share settlement of stock-based compensation— — (3,915)— — (3,915)
Balance at September 30, 2021223,666 $23 $3,655,587 $(33,713)$(1,665,313)$1,956,584 


See the accompanying notes which are an integral part of these condensed consolidated financial statements.
8



WillScot Mobile Mini Holdings Corp.
Condensed Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended September 30,
(in thousands)
20222021
Operating activities:
Net income $253,140 $85,921 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization257,371 235,536 
Provision for credit losses26,018 26,661 
Gain on sale of discontinued operations(34,049)— 
Gain on sale of rental equipment and other property, plant and equipment(21,698)(25,327)
Amortization of debt discounts and debt issuance costs9,795 10,554 
Fair value loss on common stock warrant liabilities— 26,597 
Loss on extinguishment of debt— 5,999 
Stock-based compensation expense22,628 21,674 
Deferred income tax expense56,812 28,140 
Unrealized currency losses, net171 34 
Other 2,976 — 
Changes in operating assets and liabilities:
Trade receivables(101,895)(93,592)
Inventories(13,623)(7,311)
Prepaid expenses and other assets(9,446)3,118 
Operating lease assets and liabilities851 59 
Accounts payable and other accrued expenses43,565 48,336 
Deferred revenue and customer deposits51,622 25,656 
Net cash provided by operating activities544,238 392,055 
Investing activities:
Proceeds from sale of discontinued operation319,543 — 
Acquisitions, net of cash acquired (208,663)(56,244)
Proceeds from sale of rental equipment52,263 42,034 
Purchase of rental equipment and refurbishments(360,465)(178,191)
Proceeds from sale of property, plant and equipment1,645 16,647 
Purchase of property, plant and equipment(30,253)(20,836)
Net cash used in investing activities(225,930)(196,590)
Financing activities:
Receipts from issuance of Common Stock from the exercise of options10,815 7,315 
Repurchase and cancellation of Common Stock and warrants(515,684)(320,562)
Receipts from borrowings763,177 551,063 
Repayment of borrowings(510,677)(423,591)
Payment of financing costs(8,130)— 
Payment of debt extinguishment premium costs— (3,705)
Principal payments on finance lease obligations(39,336)(12,321)
Taxes paid on employee stock awards(13,888)(7,134)
Net cash used in financing activities(313,723)(208,935)
Effect of exchange rate changes on cash and cash equivalents (1,842)(150)
Net change in cash and cash equivalents 2,743 (13,620)
Cash and cash equivalents at the beginning of the period12,699 24,937 
Cash and cash equivalents at the end of the period$15,442 $11,317 
Supplemental cash flow information:
Interest paid 1
$88,231 $75,423 
Income taxes paid, net$17,598 $6,124 
Capital expenditures accrued or payable$40,385 $35,819 
1 Includes $8,986 of payments related to the interest rate swap for the nine months ended September 30, 2021.
See the accompanying notes which are an integral part of these condensed consolidated financial statements.
9


WillScot Mobile Mini Holdings Corp.
Notes to the Condensed Consolidated Financial Statements (Unaudited)

NOTE 1 - Summary of Significant Accounting Policies
Organization and Nature of Operations
WillScot Mobile Mini Holdings Corp. (“WillScot Mobile Mini” and, together with its subsidiaries, the “Company”) is a leading business services provider specializing in innovative flexible work space and portable storage solutions in the United States (“US”), Canada, Mexico and the United Kingdom ("UK"). The Company leases, sells, delivers and installs mobile solutions and storage products through an integrated network of branch locations that spans North America and the UK.
Basis of Presentation and Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and notes required by US Generally Accepted Accounting Principles ("GAAP") for complete financial statements. The accompanying unaudited condensed consolidated financial statements comprise the financial statements of WillScot Mobile Mini and its subsidiaries that it controls due to ownership of a majority voting interest and contain all adjustments, which are of a normal and recurring nature, considered necessary by management to present fairly the financial position, results of operations and cash flows for the interim periods presented.
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 the Company. All intercompany balances and transactions are eliminated.
The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the full year. For further information, refer to the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021.
Reclassifications
Certain reclassifications have been made to prior year financial statements to conform to the current year presentation.
Recently Issued Accounting Standards
In October 2021, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08"). ASU 2021-08 requires that an acquirer recognize and measure contract assets and liabilities acquired in a business combination in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASC 606"). ASU 2021-08 is effective for annual periods beginning after December 15, 2022, including interim periods therein, with early adoption permitted. The guidance will be applied prospectively to acquisitions occurring on or after the effective date. The Company will continue to evaluate the impact of this guidance, which will depend on the contract assets and liabilities acquired in future business combinations.

NOTE 2 - Acquisitions
On July 1, 2020, WillScot Corporation (“WillScot”), and Mobile Mini, Inc. (“Mobile Mini”) merged (the “Merger”). Immediately following the Merger, WillScot changed its name to “WillScot Mobile Mini Holdings Corp.”
Asset Acquisitions
During the third quarter of 2022, the Company acquired certain assets and liabilities of several smaller entities, which consisted primarily of approximately 7,600 storage units and 3,000 modular units, for $104.7 million in cash. During the first six months of 2022, the Company acquired certain assets and liabilities of several smaller entities, which consisted primarily of approximately 4,100 storage units and 1,400 modular units, for $103.9 million in cash. The accompanying consolidated financial statements include $202.3 million of rental equipment as a result of 2022 acquisitions.
During the third quarter of 2021, the Company acquired certain assets and liabilities of several smaller entities, which consisted primarily of approximately 11,000 storage units and 400 modular units for $56.3 million in cash. As a result of these acquisitions, the Company recognized $53.0 million of rental equipment and $3.0 million of land in its consolidated balance sheet.
Integration Costs
The Company recorded $3.9 million and $8.2 million in integration costs related to acquisitions and the Merger within selling, general and administrative ("SG&A") expense during the three months ended September 30, 2022 and 2021, respectively, and $13.2 million and $23.2 million in integration costs related to acquisitions and the Merger during the nine months ended September 30, 2022 and 2021, respectively.
10



NOTE 3 - Divestiture
On August 19, 2022, the Company entered into a stock purchase agreement to sell its Tank and Pump Solutions ("Tank and Pump") business for approximately $323 million. The sale transaction was completed on September 30, 2022. Exiting the Tank and Pump business represented the Company’s strategic shift to concentrate its operations on its core modular and storage businesses. In accordance with ASC 360, Property, Plant, and Equipment, the Company ceased recording depreciation and amortization for Tank and Pump rental fleet, property, plant and equipment, and operating lease assets during the third quarter of 2022 when the Tank and Pump business initially qualified as held for sale. In accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations, the Company determined that the criteria for discontinued operations presentation were met during the third quarter of 2022.
As part of the divestiture, the Company entered into a customary transition services agreement with the buyer to assist them in the transition of certain functions, including, but not limited to, information technology, accounting and human resources, for a period of six months with an option for the buyer to extend the agreement for a period of up to twelve months. There will be no significant continuing involvement with the Tank and Pump business after its disposal.
The following tables present the results of Tank and Pump as reported in income from discontinued operations within the condensed consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021 and the carrying value of the divested business' assets and liabilities as presented within assets and liabilities held for sale on the condensed consolidated balance sheet as of December 31, 2021.
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2022202120222021
Revenues:
Leasing and services revenue:
Leasing$22,432 $20,797 $65,572 $56,343 
Delivery and installation10,121 7,789 27,665 21,969 
Sales revenue:
New units842 490 2,202 1,908 
Rental units593 429 917 1,123 
Total revenues33,988 29,505 96,356 81,343 
Costs:
Costs of leasing and services:
Leasing4,913 4,481 13,828 12,628 
Delivery and installation8,634 6,770 23,285 18,317 
Costs of sales:
New units633 324 1,636 1,338 
Rental units238 135 310 429 
Depreciation of rental equipment1,822 3,472 8,145 10,026 
Gross profit17,748 14,323 49,152 38,605 
Expenses:
Selling, general and administrative5,544 6,381 18,045 16,792 
Other depreciation and amortization1,274 2,355 6,103 6,967 
Other (expense) income, net(16)
Operating income10,946 5,586 25,000 14,839 
Interest expense144 195 512 584 
Income from discontinued operations before income tax10,802 5,391 24,488 14,255 
Income tax expense from discontinued operations 1,986 1,401 5,496 3,612 
Income from discontinued operations$8,816 $3,990 $18,992 $10,643 
Other selected data:
Adjusted EBITDA$13,048 $10,946 $37,016 $29,870 
11


(in thousands)December 31, 2021
Assets
Trade receivables, net of allowances for doubtful accounts of $1,469
$31,031 
Inventories647 
Prepaid expenses and other current assets222 
Rental Equipment, net134,973 
Property, plant and equipment, net29,931 
Operating lease assets11,720 
Goodwill100,107 
Intangible assets, net 8,750 
Other non-current assets 55 
Total assets held for sale$317,436 
Liabilities
Accounts payable$8,001 
Accrued expenses4,603 
Accrued employee benefits2,487 
Deferred revenue and customer deposits27 
Deferred tax liabilities17,095 
Operating lease liabilities 11,959 
Other non-current liabilities23,487 
Total liabilities held for sale$67,659 
At December 31, 2021, assets held for sale of $1.0 million were not related to the Tank and Pump business and were excluded from the table above.
For the nine months ended September 30, 2022 and 2021, significant operating and investing items related to the Tank and Pump business were as follows:
Nine Months Ended September 30,
(in thousands)
20222021
Operating activities of discontinued operations:
Depreciation and amortization$14,248 $16,993 
Investing activities of discontinued operations:
Proceeds from sale of rental equipment$917 $1,123 
Purchase of rental equipment and refurbishments$(19,064)$(11,093)
Proceeds from sale of property, plant and equipment$— $170 
Purchase of property, plant and equipment$(403)$(1,220)
12


The following table presents reconciliations of Income from discontinued operations before income tax to Adjusted EBITDA from discontinued operations for the Tank and Pump business for the three and nine months ended September 30, 2022 and 2021, respectively. See Note 18 for further information regarding Adjusted EBITDA.
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2022202120222021
Income from discontinued operations before income tax$10,802 $5,391 $24,488 $14,255 
Interest expense144 195 512 584 
Depreciation and amortization3,096 5,828 14,248 16,993 
Restructuring costs, lease impairment expense and other related charges— — — 
Integration costs— — 
Stock compensation expense(221)102 18 175 
Other(773)(575)(2,250)(2,144)
Adjusted EBITDA from discontinued operations$13,048 $10,946 $37,016 $29,870 

NOTE 4 - Revenue
Revenue Disaggregation
Geographic Areas
The Company had total revenue in the following geographic areas for the three and nine months ended September 30, 2022 and 2021 as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands)2022202120222021
US$538,737 $399,590 $1,445,709 $1,121,627 
Canada34,815 29,692 92,989 79,493 
Mexico4,453 3,666 13,370 10,977 
UK26,168 28,099 80,271 83,537 
Total revenues$604,173 $461,047 $1,632,339 $1,295,634 
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 modular space and portable storage units along with value-added products and services ("VAPS"), which include furniture, steps, ramps, basic appliances, internet connectivity devices, security products, shelving systems 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 and ad hoc services and removal services at the end of lease transactions.
13


The Company’s revenue by major product and service line for the three and nine months ended September 30, 2022 and 2021 was as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands)2022202120222021
Modular space leasing revenue$226,261 $188,507 $638,273 $539,836 
Portable storage leasing revenue103,503 66,184 269,964 179,645 
VAPS and third party leasing revenues(a)
96,220 72,293 261,964 203,493 
Other leasing-related revenue(b)
21,551 15,615 56,005 42,920 
Leasing revenue447,535 342,599 1,226,206 965,894 
Delivery and installation revenue132,837 91,910 341,027 252,914 
Total leasing and services revenue580,372 434,509 1,567,233 1,218,808 
New unit sales revenue9,901 15,370 26,232 35,915 
Rental unit sales revenue13,900 11,168 38,874 40,911 
Total revenues$604,173 $461,047 $1,632,339 $1,295,634 
(a)
Includes $8.8 million and $7.2 million of service revenue for the three months ended September 30, 2022 and 2021, respectively, and $23.1 million and $21.2 million of service revenue for the nine months ended September 30, 2022 and 2021, respectively.
(b)Includes primarily damage billings, delinquent payment charges, and other processing fees.
Leasing and Services Revenue
The majority of revenue (73% and 74% for the three and nine months ended September 30, 2022, respectively, and 73% for both the three and nine months ended September 30, 2021) was generated by rental income subject to the guidance of ASU 2018-11, Leases (Topic 842) ("ASC 842"). The remaining revenue was generated by performance obligations in contracts with customers for services or sale of units subject to the guidance in ASC 606.
Receivables and Credit Losses
The Company is exposed to credit losses from trade receivables and manages credit risk 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 user markets.
The Company assesses each customer’s ability to pay for the products it leases or sells by conducting a credit review that considers expected billing exposure, timing for payment and the customer’s established credit rating. The Company performs its credit review of new customers at inception of the customer relationship and for existing customers when the customer transacts after a defined period of dormancy. The Company also considers contract terms and conditions, country risk and business strategy in the evaluation.
The Company monitors ongoing credit exposure through an active review of customer balances against contract terms and due dates. The Company 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 collection experience and, as applicable, current conditions and reasonable and supportable forecasts that affect collectability. The Company's estimate reflects changing circumstances, including changes in the economy or in the particular circumstances of individual customers. Accordingly, the Company may be required to increase or decrease its allowance.
Activity in the allowance for credit losses was as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2022202120222021
Balance at beginning of period$50,720 $35,608 $46,160 $28,442 
Provision for credit losses, net of recoveries9,977 8,292 27,487 24,839 
Write-offs(4,474)(4,541)(17,384)(14,411)
Foreign currency translation and other(96)(126)(136)363 
Balance at end of period$56,127 $39,233 $56,127 $39,233 
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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. During the three months ended September 30, 2022, deferred revenue relating to services billed in advance of $24.5 million was recognized as revenue. As of September 30, 2022 and December 31, 2021, the Company had approximately $107.9 million and $79.4 million, respectively, of deferred revenue related to these services.
The Company does not have material contract assets, and the Company's uncompleted contracts with customers have unsatisfied (or partially satisfied) performance obligations. 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 costs ultimately incurred to provide those services and therefore the Company is applying the optional expedient 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; therefore, the commissions are expensed as incurred.

NOTE 5 - Leases
As of September 30, 2022, the undiscounted future lease payments for operating and finance lease liabilities were as follows:
(in thousands)OperatingFinance
2022 (remaining)$15,803 $3,501 
202358,926 15,226 
202449,583 13,523 
202541,080 13,197 
202630,330 12,809 
Thereafter69,011 22,052 
Total lease payments264,733 80,308 
Less: interest(37,985)(7,460)
Present value of lease liabilities$226,748 $72,848 
Finance lease liabilities are included within long-term debt and current portion of long-term debt on the condensed consolidated balance sheets.
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The Company’s lease activity during the nine months ended September 30, 2022 and 2021 was as follows:
(in thousands)Nine Months Ended September 30,
Financial Statement Line20222021
Finance Lease Expense
Amortization of finance lease assets$11,034 $9,538 
Interest on obligations under finance leases 1,504 1,072 
Total finance lease expense $12,538 $10,610 
Operating Lease Expense
Fixed lease expense
Costs of leasing and services$2,242 $3,019 
Selling, general and administrative46,580 42,494
Lease impairment expense and other related charges213 1,571
Short-term lease expense
Costs of leasing and services24,122 17,751
Selling, general and administrative1,466 615
Variable lease expense
Costs of leasing and services3,989 5,442
Selling, general and administrative5,951 5,332
Lease impairment expense and other related charges40 402
Total operating lease expense$84,603 $76,626 
Lease impairment expense and other related charges relate to closed locations that are no longer used in operations as a result of consolidation activities within the Company. During the nine months ended September 30, 2022, the Company recorded $0.3 million in lease impairment expense and other related charges which is comprised of closed location rent expense. During the nine months ended September 30, 2021, the Company recorded $2.3 million in lease impairment expense and other related charges which is comprised of $2.0 million in closed location rent expense and $0.3 million loss on lease exit and impairment charges.
Supplemental cash flow information related to leases for the nine months ended September 30, 2022 and 2021 was as follows:
(in thousands)Nine Months Ended September 30,
Supplemental Cash Flow Information20222021
Cash paid for the amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases$48,309 $46,509 
Operating cash outflows from finance leases$1,502 $1,067 
Financing cash outflows from finance leases$12,868 $9,011 
Right of use assets obtained in exchange for lease obligations$37,771 $41,209 
Assets obtained in exchange for finance leases $22,414 $17,184 
Weighted-average remaining operating lease terms and the weighted average discount rates as of September 30, 2022 and December 31, 2021 were as follows:
Lease Terms and Discount RatesSeptember 30, 2022December 31, 2021
Weighted-average remaining lease term - operating leases5.9 years6.1 years
Weighted-average discount rate - operating leases5.1 %5.0 %
Weighted-average remaining lease term - finance leases5.1 years4.9 years
Weighted-average discount rate - finance leases3.2 %2.8 %

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NOTE 6 - Inventories
Inventories at the respective balance sheet dates consisted of the following:
(in thousands)
September 30, 2022December 31, 2021
Raw materials$38,720 $26,340 
Finished units6,153 5,752 
Inventories$44,873 $32,092 

NOTE 7 - Rental Equipment, net
Rental equipment, net at the respective balance sheet dates consisted of the following:
(in thousands)
September 30, 2022December 31, 2021
Modular space units$3,254,022 $3,005,195 
Portable storage units898,275 758,619 
Value added products198,494 168,358 
Total rental equipment4,350,791 3,932,172 
Less: accumulated depreciation(1,123,056)(986,164)
Rental equipment, net$3,227,735 $2,946,008 

NOTE 8 - Goodwill
Changes in the carrying amount of goodwill were as follows:
(in thousands)NA ModularNA StorageUK StorageTotal
Balance at December 31, 2020$235,828 $726,529 $65,600 $1,027,957 
Changes to Mobile Mini purchase accounting285,000 (233,666)— 51,334 
Effects of movements in foreign exchange rates221 (311)(502)(592)
Balance at December 31, 2021521,049 492,552 65,098 1,078,699 
Effects of movements in foreign exchange rates(2,766)— (11,351)(14,117)
Balance at September 30, 2022$518,283 $492,552 $53,747 $1,064,582 
The Company had no goodwill impairment during the nine months ended September 30, 2022 or the year ended December 31, 2021.

NOTE 9 - Intangibles
Intangible assets other than goodwill at the respective balance sheet dates consisted of the following:
September 30, 2022
(in thousands)Weighted average remaining life (in years)Gross carrying amountAccumulated amortizationNet book value
Intangible assets subject to amortization:
Mobile Mini customer relationships
5.7$199,000 $(57,646)$141,354 
Technology 3.81,500 (563)937 
Indefinite-lived intangible assets:
Trade name - Mobile Mini164,000 — 164,000 
Trade name - WillScot125,000 — 125,000 
Total intangible assets other than goodwill$489,500 $(58,209)$431,291 
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December 31, 2021
(in thousands)Weighted average remaining life (in years)Gross carrying amountAccumulated amortizationNet book value
Intangible assets subject to amortization:
Mobile Mini customer relationships
6.6$199,000 $(37,197)$161,803 
Technology4.51,500 (375)1,125 
Indefinite-lived intangible assets:
Trade name - Mobile Mini164,000 — 164,000 
Trade name - WillScot125,000 — 125,000 
Total intangible assets other than goodwill$489,500 $(37,572)$451,928 
Amortization expense related to intangible assets was $6.0 million and $6.6 million for the three months ended September 30, 2022 and 2021, respectively, and $19.2 million and $20.0 million for the nine months ended September 30, 2022 and 2021, respectively.
Based on the carrying value at September 30, 2022, future amortization of intangible assets is expected to be as follows for the years ended December 31:
(in thousands)
2022 (remaining)$6,583 
202325,583 
202425,583 
202525,583 
202623,897 
Thereafter35,062 
Total$142,291 

NOTE 10 - Debt
The carrying value of debt outstanding at the respective balance sheet dates consisted of the following:
(in thousands, except rates)Interest rateYear of maturitySeptember 30, 2022December 31, 2021
2025 Secured Notes6.125%2025$519,778 $518,117 
ABL Facility(a)
Varies20271,863,451 1,612,783 
2028 Secured Notes4.625%2028493,220 492,490 
Finance LeasesVariesVaries72,848 65,563 
Total debt2,949,297 2,688,953 
Less: current portion of long-term debt13,497 11,968 
Total long-term debt$2,935,800 $2,676,985 
(a) As of both September 30, 2022 and December 31, 2021, the Company had no outstanding principal borrowings on the multicurrency revolving credit facility and $4.4 million and $6.2 million, respectively, of related debt issuance costs. No related debt issuance costs were recorded as a direct offset against the principal borrowings on the Multicurrency Facility, and the $4.4 million and $6.2 million in excess of principal was included in other non-current assets on the condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021, respectively.
Asset Backed Lending Facility
On July 1, 2020, certain subsidiaries of the Company entered into an asset-based credit agreement (the "ABL Facility") that initially provided for revolving credit facilities in the aggregate principal amount of up to $2.4 billion, consisting of: (i) a senior secured asset-based US dollar revolving credit facility in the aggregate principal amount of $2.0 billion and (ii) a $400.0 million senior secured asset-based multicurrency revolving credit facility available to be drawn in US Dollars, Canadian Dollars, British Pounds Sterling or Euros. The ABL Facility was initially scheduled to mature on July 1, 2025.
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Borrowings under ABL Facility bear interest at a base rate plus an applicable margin determined quarterly by reference to the Company's excess availability for the most recently completed quarter. Effective January 7, 2022, borrowings were subject to the highest applicable margin and bore interest at (i) in the case of US Dollars, at the borrower's option, either an adjusted LIBOR rate plus 2.125% or an alternative base rate plus 1.125%, (ii) in the case of Canadian Dollars, at the borrower's option, either a Canadian BA rate plus 2.125% or Canadian prime rate plus 1.125%, (iii) in the case of Euros, the EURIBOR rate plus 2.125%, and (iv) in the case of British Pounds Sterling, the SONIA rate plus 2.125%.
On June 30, 2022, certain subsidiaries of the Company entered into an amendment to the ABL Facility to, among other things, extend the expiration date until June 30, 2027 and increase the aggregate principal amount of the revolving credit facilities 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”) and (ii) a $400.0 million senior secured asset-based multicurrency revolving credit facility (the "Multicurrency Facility"), available to be drawn in US Dollars, Canadian Dollars, British Pounds Sterling or Euros.
The amendment also converted the interest rate for borrowings denominated in US dollars from a LIBOR-based rate to a Term SOFR-based rate with an interest period of one month and adjusted the applicable margins. The applicable margin for Canadian BA rate, Term SOFR, British Pounds Sterling and Euros loans is 1.50%. 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% based on excess availability or one step up of 0.25% based on the Company's leverage ratio. The ABL Facility requires the payment of an annual commitment fee on the unused available borrowings of 0.20% annually. At September 30, 2022, the weighted average interest rate for borrowings under the ABL Facility was 4.46%.
Borrowing availability under the US Facility and the Multicurrency Facility is equal to the lesser of (i) the aggregate Revolver Commitments and (ii) the Line Cap. At September 30, 2022, the Company had $1.9 billion outstanding principal under the ABL Facility, the Line Cap was $3.0 billion, and the Company had $1.1 billion of available borrowing capacity under the ABL Facility, including $821.3 million under the US Facility and $292.1 million under the Multicurrency Facility. At September 30, 2022, borrowing capacity under the ABL Facility allowed for up to $204.9 million of letters of credit and up to $220.0 million of swingline loans. The Company had issued $15.1 million of standby letters of credit under the ABL Facility at September 30, 2022. At September 30, 2022, letters of credit and bank guarantees carried fees of 1.625% annually.
Debt issuance costs of $33.6 million were included in the carrying value of the ABL Facility at September 30, 2022.
Finance Leases
The Company maintains finance leases primarily related to transportation equipment. At September 30, 2022 and December 31, 2021, obligations under finance leases for transportation related equipment were $72.8 million and $65.6 million, respectively. Refer to Note 5 for further information.
The Company is in compliance with all debt covenants and restrictions for the aforementioned debt instruments as of September 30, 2022.

NOTE 11 – Equity
Common Stock
In connection with the stock compensation vesting events and stock option exercises described in Note 15, and the warrant exercises described in Note 12, the Company issued 1,860,778 shares of Common Stock during the nine months ended September 30, 2022.
Stock Repurchase Program
In July 2022, the Company's Board of Directors approved an increase to the share repurchase program that authorizes the Company to repurchase up to $1.0 billion of its outstanding shares of Common Stock and equivalents. 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 and conditions, business, legal, accounting, and other considerations. During the nine months ended September 30, 2022, the Company repurchased 14,575,160 shares of Common Stock and stock equivalents for $524.4 million. As of September 30, 2022, $863.3 million of the approved repurchase amount remained available.
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Accumulated Other Comprehensive Loss
The changes in accumulated other comprehensive income (loss) ("AOCI"), net of tax, for the nine months ended September 30, 2022 and 2021 were as follows:
Nine Months Ended September 30, 2022
(in thousands)Foreign currency translationUnrealized losses on hedging activitiesTotal
Balance at December 31, 2021$(25,574)$(3,497)$(29,071)
Other comprehensive loss before reclassifications(4,074)(569)(4,643)
Reclassifications from AOCI to income— 2,890 2,890 
Balance at March 31, 2022(29,648)(1,176)(30,824)
Other comprehensive loss before reclassifications(25,628)(464)(26,092)
Reclassifications from AOCI to income— 1,640 1,640 
Balance at June 30, 2022(55,276)— (55,276)
Other comprehensive loss(37,733)— (37,733)
Balance at September 30, 2022$(93,009)$— $(93,009)
Nine Months Ended September 30, 2021
(in thousands)Foreign currency translationUnrealized losses on hedging activitiesTotal
Balance at December 31, 2020$(24,694)$(12,513)$(37,207)
Other comprehensive income (loss) before reclassifications5,034 (760)4,274 
Reclassifications from AOCI to income— 2,937 2,937 
Balance at March 31, 2021(19,660)(10,336)(29,996)
Other comprehensive income (loss) before reclassifications3,093 (848)2,245 
Reclassifications from AOCI to income— 2,994 2,994 
Balance at June 30, 2021(16,567)(8,190)(24,757)
Other comprehensive income before reclassifications(11,162)(830)(11,992)
Reclassifications from AOCI to income— 3,036 3,036 
Balance at September 30, 2021$(27,729)$(5,984)$(33,713)
For the nine months ended September 30, 2022 and 2021, $4.5 million and $9.0 million, respectively, was reclassified from AOCI into interest expense in the condensed consolidated statements of operations related to the interest rate swap discussed in Note 16. Associated with these reclassifications, the Company recorded tax expense of $0.7 million for the three months ended September 30, 2021, and $1.1 million and $2.0 million for the nine months ended September 30, 2022 and 2021, respectively. The interest rate swap terminated on May 29, 2022.

NOTE 12 – Warrants
2015 Warrants
WillScot was incorporated under the name Double Eagle Acquisition Corporation ("DEAC") on June 26, 2015. DEAC issued warrants to purchase its Common Stock in a private placement concurrently with its initial public offering (the “2015 Private Warrants”) each of which entitled the holder to purchase one-half of one share of Common Stock. During the six months ended June 30, 2021, 3,055,000 of the 2015 Private Warrants were repurchased for $25.5 million and cancelled. In addition, during the six months ended June 30, 2021, 9,655,000 warrants were exercised on a cashless basis, resulting in the issuance of 2,939,898 shares of Common Stock. As of June 30, 2021, no 2015 Private Warrants remained outstanding.
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2018 Warrants
In connection with the Modular Space Holdings acquisition in 2018, WillScot issued warrants to purchase approximately 10.0 million shares of Common Stock (the "2018 Warrants") to former shareholders. Each 2018 Warrant entitles the holder to purchase one share of Common Stock at an exercise price of $15.50 per share, subject to adjustment. The 2018 Warrants expire on November 29, 2022. During the nine months ended September 30, 2022, 33,965 of the 2018 Warrants were repurchased for $0.6 million and cancelled. In addition, during the nine months ended September 30, 2022, 1,037,379 of the 2018 Warrants were exercised on a cashless basis, resulting in the issuance of 631,863 shares of common stock. At September 30, 2022, 3,006,829 of the 2018 Warrants were outstanding.
The Company accounted for its warrants in the following ways: (i) the 2015 Private Warrants as liabilities through their final repurchase or exercise in May 2021, and (ii) the 2018 Warrants as liabilities until June 30, 2020 after which they are accounted for as equity instruments. 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.

NOTE 13 – Income Taxes
The Company recorded $30.2 million and $67.2 million of income tax expense for the three and nine months ended September 30, 2022, respectively, and $5.2 million and $32.4 million of income tax expense for the three and nine months ended September 30, 2021, respectively. The Company’s effective tax rate for the three and nine months ended September 30, 2022 was 26.1% and 25.1%, respectively. The Company's effective tax rate for the three and nine months ended September 30, 2021 was 8.4% and 30.1%, respectively.
The effective tax rate for the three and nine months ended September 30, 2022 differed from the US federal statutory rate of 21% primarily due to state and provincial taxes offset by a discrete tax benefit related to employee stock vesting. The effective tax rate for the three months ended September 30, 2021 differs from the U.S federal statutory rate of 21% primarily due to the reversal of approximately of $12.8 million in reserves for uncertain tax positions ("UTP") due to the expiration of relevant statutes of limitation. The effective tax rate for the nine months ended September 30, 2021 differs from the US federal statutory rate of 21% primarily due to the permanent add-backs related to fair value accounting on the Company's warrants and executive compensation with an offset related to the discrete tax benefit from the reversal of reserves for UTP.

NOTE 14 - 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 suggested 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 value of cash and cash equivalents, trade receivables, trade payables, and other current liabilities approximate their carrying amounts. Based on the borrowing rates currently available for bank loans with similar terms and average maturities, the fair values of finance leases at September 30, 2022 approximate their respective book values.
The following table shows the carrying amounts and fair values of financial liabilities which are disclosed, but not measured, at fair value, including their levels in the fair values hierarchy:
September 30, 2022December 31, 2021
Carrying Amount
Fair Value
Carrying Amount
Fair Value
(in thousands)
Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
ABL Facility$1,863,451 $— $1,897,000 $— $1,612,783 $— $1,644,500 $— 
2025 Secured Notes519,778 — 513,932 — 518,117 — 551,835 — 
2028 Secured Notes493,220 — 435,320 — 492,490 — 515,635 — 
Total$2,876,449 $— $2,846,252 $— $2,623,390 $— $2,711,970 $— 
As of September 30, 2022, the carrying values of the ABL Facility, the 2025 Secured Notes, and the 2028 Secured Notes included $33.6 million, $6.7 million, and $6.8 million, respectively, of unamortized debt issuance costs, which were presented as a direct reduction of the corresponding liability. As of December 31, 2021, the carrying value of the ABL Facility,
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the 2025 Secured Notes, and the 2028 Secured Notes included $31.7 million, $8.4 million, and $7.5 million, respectively, of unamortized debt issuance costs, which were presented as a direct reduction of the corresponding liability.
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 value of the 2025 Secured Notes and the 2028 Secured Notes is based on their last trading price at the end of each period obtained from a third party. The classification and the fair value of derivative assets and liabilities designated as hedges in the condensed consolidated balance sheets are disclosed in Note 16.
Level 3 Disclosures
During the periods the 2015 Private Warrants were classified as liabilities, the Company utilized a Black Scholes option-pricing model to value the warrants at each reporting period and transaction date, with changes in fair value recognized in the statements of operations. The estimated fair value of the common stock warrant liability was determined using Level 3 inputs. Inherent in the pricing model were assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The volatility assumption was based on a blend of peer group volatility and Company trading history that matched the expected remaining life of the warrants as the Company did not have a sufficient trading history as a stand-alone public company to rely exclusively on its own trading history. The risk-free interest rate was based on the US Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants was assumed to be equivalent to their remaining contractual term. The dividend rate was based on the historical rate, which the Company anticipated to remain at zero.
The following table presents changes in Level 3 liabilities measured at fair value for the nine months ended September 30, 2021:
(in thousands)2015 Private Warrants
Balance - December 31, 2020$77,404 
Exercise or conversion(78,495)
Measurement adjustment25,486 
Repurchases(24,395)
Balance- September 30, 2021$— 

NOTE 15 - Stock-Based Compensation
Stock-based compensation expense includes grants of stock options, time-based restricted stock units ("Time-Based RSUs") and performance-based restricted stock units ("Performance-Based RSUs," together with Time-Based RSUs, the "RSUs"). In addition, stock-based payments to non-executive directors include grants of restricted stock awards ("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 Mobile Mini'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.
Restricted Stock Awards
The following table summarizes the Company's RSA activity:
20222021
Number of SharesWeighted-Average Grant Date Fair ValueNumber of SharesWeighted-Average Grant Date Fair Value
Balance December 31,36,176 $29.30 57,448 $11.75 
Granted35,244 $37.17 44,708 $29.30 
Forfeited— $— (8,532)$29.30 
Vested(36,176)$29.30 (57,448)$11.75 
Balance September 30,35,244 $37.17 36,176 $29.30 
Compensation expense for RSAs recognized in SG&A expense on the condensed consolidated statements of operations was $0.3 million for both the three months ended September 30, 2022 and 2021. Compensation expense for RSAs recognized in SG&A expense on the condensed consolidated statements of operations was $0.9 million and $0.6 million for the nine months ended September 30, 2022 and 2021, respectively. At September 30, 2022, there was $0.9 million of unrecognized compensation cost related to RSAs that is expected to be recognized over the remaining weighted average vesting period of 0.7 years.
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Time-Based RSUs
The following table summarizes the Company's Time-Based RSU activity:
20222021
Number of SharesWeighted-Average Grant Date Fair ValueNumber of SharesWeighted-Average Grant Date Fair Value
Balance December 31,997,451 $18.54 1,325,862 $13.46 
Granted377,804 $35.40 415,737 $27.25 
Forfeited(94,841)$31.08 (65,153)$16.74 
Vested(478,906)$16.42 (667,151)$13.98 
Balance September 30,801,508 $26.27 1,009,295 $18.59 
Compensation expense for Time-Based RSUs recognized in SG&A expense on the condensed consolidated statements of operations was $1.7 million and $3.2 million for the three months ended September 30, 2022 and 2021, respectively. Compensation expense for RSUs recognized in SG&A expense on the condensed consolidated statements of operations was $6.4 million and $7.5 million for the nine months ended September 30, 2022 and 2021, respectively. At September 30, 2022, unrecognized compensation cost related to Time-Based RSUs totaled $15.9 million and is expected to be recognized over the remaining weighted average vesting period of 2.4 years.
Performance-Based RSUs
The following table summarizes the Company's Performance-Based RSU award activity:
20222021
Number of SharesWeighted-Average Grant Date Fair ValueNumber of SharesWeighted-Average Grant Date Fair Value
Balance December 31,1,536,394 $26.34 593,388 $14.88 
Granted745,079 $42.34 977,645 $33.21 
Forfeited(61,678)$41.62 (20,077)$25.87 
Vested(313,152)$16.45 — $— 
Balance September 30,1,906,643 $33.72 1,550,956 $26.29 
Compensation expense for Performance-Based RSUs recognized in SG&A expense on the condensed consolidated statements of operations was $4.9 million and $2.7 million for the three months ended September 30, 2022 and 2021, respectively. Compensation expense for Performance-Based RSUs recognized in SG&A expense on the condensed consolidated statements of operations was $15.2 million and $5.8 million for the nine months ended September 30, 2022 and 2021, respectively. At September 30, 2022, unrecognized compensation cost related to Performance-Based RSUs totaled $41.4 million and is expected to be recognized over the remaining vesting period of 2.3 years.
Certain Performance-Based RSUs cliff vest based on achievement of the relative total stockholder return ("TSR") of the Company's Common Stock as compared to the TSR of the constituents in an index at the grant date over the performance period of three years. For 2022 grants, the TSR of the Company's Common Stock is compared to the TSR of the constituents in the S&P MidCap 400 Index. The target number of RSUs may be adjusted from 0% to 200% based on the TSR attainment levels defined by the Company's 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 above the 85% percentile).
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Stock Options
The following tables summarize the Company's stock option activity:
WillScot OptionsWeighted-Average Exercise Price per ShareConverted
Mobile Mini Options
Weighted-Average Exercise Price per Share
Balance December 31, 2021534,188 $13.60 1,527,643 $14.66 
Exercised— $— (635,318)$17.02 
Balance September 30, 2022534,188 $13.60 892,325 $12.97 
Fully vested and exercisable options, September 30, 2022534,188 $13.60 892,325 $12.97 
WillScot OptionsWeighted-Average Exercise Price per ShareConverted Mobile Mini OptionsWeighted-Average Exercise Price per Share
Balance December 31, 2020534,188 $13.60 2,031,455 $14.78 
Forfeited— $— (6,240)$12.19 
Exercised— $— (484,986)$15.26 
Balance September 30, 2021534,188 $13.60 1,540,229 $14.65 
Fully vested and exercisable options, September 30, 2021400,641 $13.60 1,540,229 $14.65 
WillScot Options
Compensation expense for stock option awards, recognized in SG&A expense on the condensed consolidated statements of operations, was $0.2 million for the three months ended September 30, 2021. Compensation expense for stock option awards, recognized in SG&A expense on the condensed consolidated statements of operations, was $0.2 million and $0.6 million for the nine months ended September 30, 2022 and 2021, respectively.

NOTE 16 - Derivatives
In 2018, the Company entered into an interest rate swap agreement (the “Swap Agreement”) with a financial counterparty that effectively converted $400.0 million in aggregate notional amount of variable-rate debt under the Company’s ABL facility into fixed-rate debt. The Swap Agreement terminated on May 29, 2022. Under the terms of the Swap Agreement, the Company received a floating rate equal to one-month LIBOR and made payments based on a fixed rate of 3.06% on the notional amount. The receive rate under the terms of the Swap Agreement was 0.11% at December 31, 2021. The Swap Agreement was designated and qualified as a hedge of the Company’s exposure to changes in interest payment cash flows created by fluctuations in variable interest rates on the ABL facility.
The location and the fair value of derivative instruments designated as hedges, at the balance sheet date, was as follows:
(in thousands)Balance Sheet AccountDecember 31, 2021
Interest rate swapAccrued expenses$5,259 
The fair value of the interest rate swap 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.
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The following table discloses the impact of the interest rate swap, excluding the impact of income taxes, on other comprehensive income (“OCI”), AOCI and the Company’s combined consolidated statements of operations for the nine months ended September 30,:
(in thousands)20222021
Gain recognized in OCI$4,669 $8,528 
Location of gain recognized in incomeInterest expense, netInterest expense, net
Loss reclassified from AOCI into income (effective portion)$(4,530)$(8,967)

NOTE 17 - Commitments and Contingencies
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 September 30, 2022, 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 of the Company. However, the outcome of such matters is inherently unpredictable and subject to significant uncertainties.

NOTE 18 - Segment Reporting
The Company operates in three reportable segments as follows: North America Modular Solutions ("NA Modular"), North America Storage Solutions ("NA Storage") and United Kingdom Storage Solutions ("UK Storage"). Total assets for each reportable segment are not available because the Company utilizes a centralized approach to working capital management. Transactions between reportable segments are not significant.
The Company defines EBITDA as net income (loss) plus interest (income) expense, income tax (benefit) expense, depreciation and amortization. The Company reflects further adjustments to EBITDA (“Adjusted EBITDA”) to exclude certain non-cash items and the effect of what the Company considers transactions or events not related to its core and ongoing business operations. In addition, the Chief Operating Decision Maker ("CODM") evaluates business segment performance utilizing Adjusted EBITDA as shown in the reconciliation of the Company’s consolidated income from continuing operations to Adjusted EBITDA below. Management believes that evaluating segment performance excluding such items is meaningful because it provides insight with respect to the intrinsic and ongoing operating results of the Company. The Company also regularly evaluates gross profit by segment to assist in the assessment of its operational performance. The Company considers Adjusted EBITDA to be an important metric because it reflects the business performance of the segments, inclusive of indirect costs.

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Reportable Segments
The following tables set forth certain information regarding each of the Company’s reportable segments for the three and nine months ended September 30, 2022 and 2021, respectively.
Three Months Ended September 30, 2022
(in thousands)NA ModularNA StorageUK Storage
Unallocated Costs 1
Total
Revenues:
Leasing and services revenue:
Leasing
$271,271 $156,572 $19,692 $447,535 
Delivery and installation
84,373 42,643 5,821 132,837 
Sales revenue:
New units
7,893 1,714 294 9,901 
Rental units
11,827 1,716 357 13,900 
Total revenues
375,364 202,645 26,164 604,173 
Costs:
Cost of leasing and services:
Leasing
81,385 26,334 4,179 111,898 
Delivery and installation
66,464 25,281 3,935 95,680 
Cost of sales:
New units
4,796 1,002 209 6,007 
Rental units
5,639 1,207 251 7,097 
Depreciation of rental equipment60,228 7,786 1,145 69,159 
Gross profit
$156,852 $141,035 $16,445 $314,332 
Other selected data:
Adjusted EBITDA$140,673 $98,695 $11,971 $— $251,339 
Selling, general and administrative expense$79,345 $49,799 $5,622 $10,678 $145,444 
Purchases of rental equipment and refurbishments$81,052 $41,246 $4,605 $— $126,903 
1 Unallocated SG&A expense includes non-cash charges for stock compensation plans and costs to integrate acquired companies.
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Three Months Ended September 30, 2021
(in thousands)NA ModularNA StorageUK StorageUnallocated CostsTotal
Revenues:
Leasing and services revenue:
Leasing$219,736 $101,172 $21,691 $342,599 
Delivery and installation58,017 28,330 5,563 91,910 
Sales revenue:
New units13,483 1,307 580 15,370 
Rental units7,815 3,088 265 11,168 
Total revenues299,051 133,897 28,099 461,047 
Costs:
Cost of leasing and services:
Leasing59,260 14,393 4,314 77,967 
Delivery and installation51,655 19,328 3,238 74,221 
Cost of sales:
New units10,080 727 368 11,175 
Rental units3,636 1,587 245 5,468 
Depreciation of rental equipment46,566 5,366 1,058 52,990 
Gross profit$127,854 $92,496 $18,876 $239,226 
Other selected data:
Adjusted EBITDA$106,825 $59,123 $13,255 $— $179,203 
Selling, general and administrative expense$66,529 $39,314 $6,680 $14,823 $127,346 
Purchases of rental equipment and refurbishments$31,789 $11,920 $11,649 $— $55,358 

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Nine Months Ended September 30, 2022
(in thousands)NA ModularNA StorageUK StorageUnallocated CostsTotal
Revenues:
Leasing and services revenue:
Leasing$756,294 $409,491 $60,421 $1,226,206 
Delivery and installation213,686 109,710 17,631 341,027 
Sales revenue:
New units21,258 4,064 910 26,232 
Rental units31,482 6,082 1,310 38,874 
Total revenues1,022,720 529,347 80,272 1,632,339 
Costs:
Cost of leasing and services:
Leasing213,675 62,489 12,610 288,774 
Delivery and installation174,498 70,364 11,268 256,130 
Cost of sales:
New units12,297 2,578 594 15,469 
Rental units16,125 4,090 908 21,123 
Depreciation of rental equipment166,552 22,241 3,435 192,228 
Gross profit$439,573 $367,585 $51,457 $858,615 
Other selected data:
Adjusted EBITDA$372,502 $243,282 $36,745 $— $652,529 
Selling, general and administrative expense$242,268 $146,189 $18,147 $38,715 $445,319 
Purchases of rental equipment and refurbishments$221,111 $95,699 $21,824 $— $338,634 

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Nine Months Ended September 30, 2021
(in thousands)NA ModularNA StorageUK StorageUnallocated CostsTotal
Revenues:
Leasing and services revenue:
Leasing$636,979 $267,489 $61,426 $965,894 
Delivery and installation161,548 73,214 18,152 252,914 
Sales revenue:
New units27,814 5,355 2,746 35,915 
Rental units28,316 11,381 1,214 40,911 
Total revenues854,657 357,439 83,538 1,295,634 
Costs:
Cost of leasing and services:
Leasing172,108 37,300 13,339 222,747 
Delivery and installation147,514 51,811 10,638 209,963 
Cost of sales:
New units19,330 3,190 1,802 24,322 
Rental units14,611 6,667 1,163 22,441 
Depreciation of rental equipment144,102 17,635 3,290 165,027 
Gross profit$356,992 $240,836 $53,306 $651,134 
Other selected data:
Adjusted EBITDA$307,741 $154,971 $36,647 $— $499,359 
Selling, general and administrative expense$192,285 $105,577 $19,949 $38,840 $356,651 
Purchases of rental equipment and refurbishments$120,288 $24,165 $22,645 $— $167,098 

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The following table presents reconciliations of the Company’s Income from continuing operations to Adjusted EBITDA for the three and nine months ended September 30, 2022 and 2021, respectively:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2022202120222021
Income from continuing operations$85,728 $57,113 $200,099 $75,278 
Income tax expense from continuing operations30,219 5,243 67,167 32,341 
Loss on extinguishment of debt— — — 5,999 
Fair value loss on common stock warrant liabilities— — — 26,597 
Interest expense38,165 29,006 102,362 87,793 
Depreciation and amortization86,225 69,449 243,123 216,820 
Currency losses, net236 127 247 196 
Restructuring costs, lease impairment expense and other related charges— 2,457 168 14,284 
Transaction costs— 303 35 1,147 
Integration costs3,902 8,242 13,182 23,206 
Stock compensation expense7,180 6,157 22,628 14,305 
Other(316)1,106 3,518 1,393 
Adjusted EBITDA$251,339 $179,203 $652,529 $499,359 
Included in restructuring costs for the three and nine months ended September 30, 2021 was expense of approximately $1.4 million and $7.2 million, respectively, recognized as a result of the modification of certain equity awards associated with the Transition, Separation and Release Agreement entered into on February 25, 2021 with the Company's former President and Chief Operating Officer.

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NOTE 19 - Earnings Per Share
The following table reconciles the weighted average shares outstanding for the basic calculation to the weighted average shares outstanding for the diluted calculation:
Three Months EndedNine Months Ended
September 30,September 30,
(in thousands)2022202120222021
Numerator:
Income from continuing operations$85,728 $57,113 $200,099 $75,278 
Income from discontinued operations42,865 3,990 53,041 10,643 
Net income$128,593 $61,103 $253,140 $85,921 
Denominator:
Weighted average Common Shares outstanding - basic213,637 225,998 219,312 227,558 
Dilutive effect of shares outstanding
Warrants1,812 3,722 1,816 4,112 
RSAs17 25 
Time-based RSUs355 476 382 573 
Performance-based RSUs1,067 618 1,279 751 
Stock Options1,049 1,050 1,127 1,066 
Weighted average Common Shares outstanding - dilutive217,928 231,868 223,933 234,085 
For the three and nine months ended September 30, 2022, 555,790 and 788,183 shares of Performance-Based RSUs, respectively, were excluded from the computation of diluted EPS because their effect would have been anti-dilutive. For the three and nine months ended September 30, 2021, no warrants, shares or options were excluded from the computation of diluted EPS.


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ITEM 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand WillScot Mobile Mini Holdings Corp. ("WillScot Mobile Mini"), our operations and our present business environment. MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying notes thereto, contained in Part I, Item 1 of this report. The discussion of results of operations in this MD&A is presented on a historical basis, as of or for the three and nine months ended September 30, 2022 or prior periods.
The consolidated financial statements were prepared in conformity with accounting principles generally accepted in the US (“GAAP”). We use certain non-GAAP financial metrics to supplement the GAAP reported results to highlight key operational metrics that are used by management to evaluate Company performance. Reconciliations of GAAP financial information to the disclosed non-GAAP measures are provided in the Reconciliation of Non-GAAP Financial Measures section.

Executive Summary and Outlook
We are a leading business services provider specializing in innovative flexible work space and portable storage solutions. We service diverse end markets across all sectors of the economy throughout the United States ("US"), Canada, Mexico and the United Kingdom ("UK"). As of September 30, 2022, our branch network included approximately 260 branch locations and additional drop lots to service over 85,000 customers. We offer our customers an extensive selection of “Ready to Work” modular space and portable storage solutions with over 167,000 modular space units and over 239,000 portable storage units in our fleet, representing over 130 million square feet of relocatable space.
We primarily lease, rather than sell, our modular and portable storage units to customers, which results in a highly diversified and predictable recurring revenue stream. Over 90% of new lease orders are on our standard lease agreement, pre-negotiated master lease or national account agreements. The initial lease periods vary, and our leases are customarily renewable on a month-to-month basis after their initial term. Our lease revenue is highly predictable due to its recurring nature and the underlying stability and diversification of our lease portfolio. Furthermore, given that our customers value flexibility, they consistently extend their leases or renew on a month-to-month basis such that the average effective duration of our modular space and portable storage lease portfolio, excluding seasonal portable storage units, is approximately 30 months. We complement our core leasing business by selling both new and used units, allowing us to leverage scale, achieve purchasing benefits and redeploy capital employed in our lease fleet.
Our customers operate in a diversified set of end markets, including construction, commercial and industrial, retail and wholesale trade, energy and natural resources, education, government and institutions, and healthcare. Core to our operating model is the ability to redeploy standardized assets across end markets, as we did in 2020 and 2021 to service emerging demand in the healthcare and government sectors related to COVID-19, as well as expanded space requirements related to social distancing. We track several market leading indicators to predict demand, including those related to our two largest end markets, the commercial and industrial segment and the construction segment, which collectively accounted for approximately 47% and 41% of our revenues, respectively, for the three months ended September 30, 2022.
We remain focused on our core priorities of growing leasing revenues by increasing units on rent, both organically and through mergers and acquisitions, delivering “Ready to Work” solutions to our customers with value added products and services ("VAPS"), and on continually improving the overall customer experience.
Significant Developments
Divestiture
On September 30, 2022, we sold our Tank and Pump Solutions ("Tank and Pump") business for $319.5 million. Proceeds from the sale will be used to support ongoing reinvestment in our core Modular and Storage operating segments and other capital allocation priorities. In accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations, we determined that the criteria for discontinued operations presentation were met during the third quarter of 2022 and results for the three and nine months ended September 30, 2022 and 2021 for Tank and Pump are reported in income from discontinued operations within the condensed consolidated statements of operations and the carrying value of the divested business' assets and liabilities are presented within assets and liabilities held for sale on the condensed consolidated balance sheet as of December 31, 2021. See Note 3 to the Condensed Consolidated Financial Statements for further information.
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As part of the divestiture, the Company entered into a customary transition services agreement with the buyer to assist them in the transition of certain functions, including, but not limited to, information technology, accounting and human resources for a period of six months with an option for the buyer to extend the agreement for a period of up to twelve months. There will be no significant continuing involvement with the Tank and Pump business after its disposal.
Inflation and Supply Chain Issues
Similar to many other organizations, we face inflationary pressures across most of our input costs such as building materials, labor, transportation and fuel. Inflation has contributed to increased capital costs for both new units as well as for refurbishment of our existing units. However, given our scale and our strong rate performance, we believe we have been able to navigate the inflationary environment well and have consistently driven margin improvements during this period of rising costs. Additionally, given the majority of our revenue is derived from leasing our existing lease fleet units to customers and our material purchases to maintain these units consists primarily of general building materials, we have not experienced significant supply chain issues to date.
Asset Acquisitions
During the third quarter of 2022, we acquired certain assets and liabilities of several entities, which consisted primarily of approximately 7,600 storage units and 3,000 modular units for $104.7 million in cash. When combined with other recent acquisitions over the past four quarters, we have acquired assets and liabilities from 13 regional and local storage and modular companies, consisting primarily of 16,800 storage units and 9,700 modular units.
Share and Warrant Repurchases
During the nine months ended September 30, 2022, we repurchased and cancelled 33,965 of the 2018 Warrants for $0.6 million. In addition, for the nine months ended September 30, 2022, 1,037,379 of the 2018 Warrants were exercised on a cashless basis, resulting in the issuance of 631,863 shares of common stock. At September 30, 2022, 3,006,829 of the 2018 Warrants were outstanding.
During the nine months ended September 30, 2022, we repurchased a total of 14,575,160 shares of Common Stock and stock equivalents for $524.4 million, including the repurchased warrants. As of September 30, 2022, we had $863.3 million remaining of a $1.0 billion share repurchase authorization under our stock repurchase program. Given our growth strategy and the predictability of our free cash flow, we believe that repurchases will be a reoccurring capital allocation priority.
Third Quarter Highlights
For the three months ended September 30, 2022, as compared to the three months ended September 30, 2021, unless otherwise noted, key drivers of our financial performance included:
Total revenues from continuing operations increased by $143.2 million, or 31.1%, attributable to organic revenue growth levers in the business and due to the impact of acquisitions. Leasing revenue increased $104.9 million, or 30.6%, and delivery and installation revenue increased $40.9 million, or 44.5%. Additionally, rental unit sales increased $2.7 million, or 24.1%, and new unit sales revenue decreased $5.5 million, or 35.7%. We estimate that recent acquisitions completed over the past four quarters contributed approximately $22.4 million to total revenues for the three months ended September 30, 2022.
Key leasing revenue drivers included:
Average portable storage units on rent increased 41,048 units, or 25.1%, and average modular space units on rent increased 4,153 units, or 3.8%, across all segments. Approximately 53% of the increase in total average units on rent was driven by units on rent added through recent acquisitions and the other 47% was driven by increases in organic delivery activity and lower return activity during 2021 and 2022.
Average modular space monthly rental rate increased $140, or 18.3%, to $907 driven by strong pricing performance across the NA Modular and NA Storage segments. Average modular space monthly rental rates increased by $157, or 18.8%, in the NA Modular segment and by $144, or 23.9%, in the NA Storage segment. Average modular space monthly rental rates decreased by $63, or 13.9%, in the UK Storage segment due to the weakening of the British Pound and were up £1, or 0.3%, in local currency.
Average portable storage monthly rental rate increased $37, or 25.5%, to $182 driven by increased pricing as a result of our price management tools and processes, further supported by high utilization, and by an acceleration earlier into the third quarter of our seasonal retail business.
Average utilization for portable storage units increased 500 basis points ("bps") to 88.9% as compared to the same period in 2021 driven by increased demand in 2022 including the acceleration earlier into the third quarter of our seasonal retail business as compared to the same period in 2021. Average utilization for modular space units decreased 120 bps to 68.9%.
NA Modular segment revenue, which represented 62.1% of consolidated revenue for the three months ended September 30, 2022, increased $76.3 million, or 25.5%, to $375.4 million. The increase was driven by our core
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leasing revenue, which grew $51.6 million, or 23.5%, due to continued growth of pricing and value added products. Delivery and installation revenues increased $26.4 million, or 45.5%, driven by increased pricing on new deliveries and returns and increased delivery volumes as compared to 2021. Rental unit sales increased $4.0 million, or 51.3%, and new unit sales decreased $5.6 million, or 41.5%. NA Modular segment revenue drivers for the three months ended September 30, 2022 included:
Modular space average monthly rental rate of $991 increased 18.8% year over year representing a continuation of our long-term price optimization initiative and VAPS penetration opportunities across our portfolio.
Average modular space units on rent increased 3,146, or 3.7%, year over year driven primarily by units on rent added through recent acquisitions.
Average modular space monthly utilization increased 20 bps to 67.8% for the three months ended September 30, 2022, as compared to the three months ended September 30, 2021.
NA Storage segment revenue, which represented 33.5% of consolidated revenue for the three months ended September 30, 2022, increased $68.7 million, or 51.3%, to $202.6 million. The increase was driven by our core leasing revenue, which grew $55.4 million, or 54.7%, due to increased units on rent driven by significant increases in delivery activity during 2021 and 2022 as economic activity rebounded versus 2020, recent acquisition activity, and increased pricing and value added products. Delivery and installation revenues increased $14.3 million, or 50.5%, driven by increased demand for new project deliveries, and by increased pricing on new deliveries and returns as compared to 2021. Rental unit sales decreased $1.4 million, or 45.2%, and new unit sales increased $0.4 million, or 30.8%.
NA Storage segment revenue drivers for the three months ended September 30, 2022 included:
Portable storage average monthly rental rate of $197 increased 27.1% year over year as a result of our price management tools and processes, further supported by high utilization, and by an acceleration earlier into the third quarter of our seasonal retail business. Modular space average monthly rental rate of $746 increased 23.9% year over year as a result of price optimization and early benefits from increased VAPS penetration opportunities.
Average portable storage units on rent increased 38,823, or 28.3%, year over year. Increases in organic activity drove an increase in average portable storage units on rent of approximately 14%, or 19,000 units on rent, including an acceleration earlier into the third quarter of our seasonal retail business. The remaining increase of approximately 20,000 units on rent was driven by units added in recent acquisitions. Average modular space units on rent increased 1,736, or 10.6%, year over year driven by increases in organic delivery activity as well as due to approximately 600 acquired units on rent.
Average portable storage monthly utilization increased 560 bps to 88.8% for the three months ended September 30, 2022, as compared to the three months ended September 30, 2021. Average modular space monthly utilization decreased 390 bps to 73.7% for the three months ended September 30, 2022, as compared to the three months ended September 30, 2021.
UK Storage segment revenue, which represented 4.3% of consolidated revenue for the three months ended September 30, 2022, decreased $1.9 million, or 6.8%, to $26.2 million and Adjusted EBITDA decreased $1.3 million, or 9.8%, to $12.0 million driven entirely by the weakening of the British Pound relative to the US Dollar. Unfavorable currency fluctuations reduced Adjusted EBITDA by $2.0 million in GBP. In local currency, revenue increased 9.1% year-over-year, driven by a 13.6% increase in portable storage average monthly rental rates and a 8.4% increase in average portable storage units on rent, and Adjusted EBITDA increased by 5.7% year-over-year.
Generated income from continuing operations of $85.7 million for the three months ended September 30, 2022 representing an increase of $28.6 million, or 46.8%, versus the three months ended September 30, 2021. Net income including income from discontinued operations was $128.6 million for the three months ended September 30, 2022.
Generated Adjusted EBITDA from continuing operations of $251.3 million for the three months ended September 30, 2022, representing an increase of $72.1 million, or 40.2%, as compared to the same period in 2021. This increase was driven primarily by increased leasing gross profit. Including results from discontinued operations representing the divestiture of the Tank and Pump segment, Adjusted EBITDA was $264 million.
Consolidated Adjusted EBITDA Margin was 41.6% in the third quarter of 2022 and increased 270 bps versus prior year driven by increased leasing and delivery and installation margins as a result of increased volumes and pricing, partially offset by increased selling, general and administrative expense.
Generated Free Cash Flow of $83.4 million for the three months ended September 30, 2022 representing an increase of $4.9 million as compared to the same period in 2021. Net cash provided by operating activities increased $80.0 million to $210.4 million. Net cash used in investing activities excluding acquisitions and sale of discontinued
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operations increased by $38.6 million to $127.0 million to support increases in delivery activity during 2022 as economic activity rebounded versus 2021, and the related unit on rent growth.
Returned $197.5 million to shareholders by repurchasing 5.3 million shares of Common Stock and stock equivalents during the three months ended September 30, 2022 and closed four acquisitions totaling approximately 7,600 storage units and 3,000 modular units for $104.7 million. We believe the predictability of our free cash flow allows us to pursue multiple capital allocation priorities opportunistically, including investing in organic opportunities we see in the market, continuing our deleveraging trajectory, opportunistically executing accretive acquisitions, and returning capital to shareholders.
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Consolidated Results of Continuing Operations
Three Months Ended September 30, 2022 Compared to the Three Months Ended September 30, 2021
Our condensed consolidated statements of operations for the three months ended September 30, 2022 and 2021 are presented below.
Three Months Ended September 30,
2022 vs. 2021 $ Change
(in thousands)
20222021
Revenues:
Leasing and services revenue:
Leasing$447,535 $342,599 $104,936 
Delivery and installation132,837 91,910 40,927 
Sales revenue:
New units9,901 15,370 (5,469)
Rental units13,900 11,168 2,732 
Total revenues604,173 461,047 143,126 
Costs:
Costs of leasing and services:
Leasing111,898 77,967 33,931 
Delivery and installation95,680 74,221 21,459 
Costs of sales:
New units6,007 11,175 (5,168)
Rental units7,097 5,468 1,629 
Depreciation of rental equipment69,159 52,990 16,169 
Gross profit314,332 239,226 75,106 
Expenses:
Selling, general and administrative145,444 127,346 18,098 
Other depreciation and amortization17,066 16,459 607 
Lease impairment expense and other related charges — 601 (601)
Restructuring costs— 1,856 (1,856)
Currency losses, net236 127 109 
Other (income) expense, net(2,526)1,475 (4,001)
Operating income154,112 91,362 62,750 
Interest expense38,165 29,006 9,159 
Income from continuing operations before income tax115,947 62,356 53,591 
Income tax expense from continuing operations30,219 5,243 24,976 
Income from continuing operations$85,728 $57,113 $28,615 
Comparison of Three Months Ended September 30, 2022 and 2021
Revenue: Total revenue increased $143.2 million, or 31.1%, to $604.2 million for the three months ended September 30, 2022 from $461.0 million for the three months ended September 30, 2021. Leasing revenue increased $104.9 million, or 30.6%, as compared to the same period in 2021 driven by improved pricing and value added products, and an increase of 41,048 average portable storage units on rent driven by significant increases in delivery activity during 2021 and into 2022 as economic activity rebounded versus 2020 and recent acquisition activity. Delivery and installation revenues increased $40.9 million, or 44.5%, due to increased overall activity and increased pricing due to our ability to pass through increasing fuel costs and general price increases. Rental unit sales increased $2.7 million, or 24.1%, and new unit sales decreased $5.5 million, or 35.7%. We estimate that recent acquisitions completed over the past four quarters contributed approximately $22.4 million to total revenues for three months ended September 30, 2022.
Total average units on rent for the three months ended September 30, 2022 and 2021 were 318,281 and 273,080, respectively, representing an increase of 45,201, or 16.6%. Of this increase, approximately 20,000 portable storage units and 4,000 modular space units on rent were added through recent acquisitions. Portable storage average units on rent increased by 41,048 units, or 25.1%, for the three months ended September 30, 2022 driven by strong demand and acquisitions. The average portable storage unit utilization rate during the three months ended September 30, 2022 was 88.9%, as compared to
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83.9% during the same period in 2021. Modular space average units on rent increased 4,153 units, or 3.8%, for the three months ended September 30, 2022 as compared to the three months ended September 30, 2021 driven primarily by acquisitions. The average modular space unit utilization rate during the three months ended September 30, 2022 was 68.9%, as compared to 70.1% during the same period in 2021.
Modular space average monthly rental rates increased 18.3% to $907 for the three months ended September 30, 2022. Improved pricing was achieved across all relevant segments. Average modular space monthly rental rates increased by $157, or 18.8%, to $991 in the NA Modular segment and by $144, or 23.9%, in the NA Storage segment. Increases were driven by a continuation of our long-term price optimization initiative and VAPS penetration opportunities across our NA Modular segment as well as by some early application of these same price management tools and processes across the NA Storage segment. The NA Storage segment also continued to see early benefits from increased VAPS penetration opportunities.
Average portable storage monthly rental rates increased 25.5% to $182 for the three months ended September 30, 2022 driven by our price management tools and processes, further supported by high utilization and by an acceleration earlier into the third quarter of our seasonal retail business at increased rates.
Gross Profit: Our gross profit percentage was 52.0% and 51.9% for the three months ended September 30, 2022 and 2021, respectively. Our adjusted gross profit percentage, which excludes the effects of depreciation, was 63.5% and 63.4% for the three months ended September 30, 2022 and 2021, respectively. Gross profit increased $75.1 million, or 31.4%, to $314.3 million for the three months ended September 30, 2022 from $239.2 million for the three months ended September 30, 2021. The increase in gross profit was a result of a $71.0 million increase in leasing gross profit, increased delivery and installation gross profit of $19.4 million and increased new and rental unit sale margins of $0.8 million. These increases were primarily a result of increased revenues due to favorable average monthly rental rates across both portable storage and modular space units, increased pricing on delivery and installation, as well as due to higher units on rent and increased activity levels driving higher delivery and installation revenues, partially offset by increased variable costs during the period as a result of higher activity levels in the current quarter and inflationary pressures across many of our cost categories. Depreciation increased $16.2 million as a result of capital investments made in our rental equipment, including the impact of recent acquisitions.
SG&A: Selling, general and administrative expense ("SG&A") increased $18.1 million, or 14.2%, to $145.4 million for the three months ended September 30, 2022, compared to $127.3 million for the three months ended September 30, 2021. Employee costs excluding stock compensation increased $12.2 million, or 20.6%, driven by a 12% increase in SG&A headcount to support both organic and inorganic growth, wage increases, and increased variable compensation as a result of the growth achieved. Stock compensation expense increased $1.0 million to $7.2 million for the three months ended September 30, 2022, compared to $6.2 million for the three months ended September 30, 2021. Integration costs decreased $4.3 million to $3.9 million for the three months ended September 30, 2022, compared to $8.2 million for the three months ended September 30, 2021. The remaining increases were primarily driven by increased economic activity and inflationary increases, including increased occupancy and office costs, legal and professional fees, insurance, travel expenses, and marketing cost increases.
Other Depreciation and Amortization: Other depreciation and amortization increased $0.6 million to $17.1 million for the three months ended September 30, 2022 compared to $16.5 million for the three months ended September 30, 2021. The increase was driven by an increase in depreciation of vehicles, buildings and equipment.
Lease Impairment Expense and Other Related Charges: Lease impairment expense and other related charges were $0 for the three months ended September 30, 2022 as compared to $0.6 million for the three months ended September 30, 2021. The decrease resulted from fewer closed locations during the three months ended September 30, 2022 as compared to the three months ended September 30, 2021.
Restructuring Costs: Restructuring costs were $1.9 million for the three months ended September 30, 2021 primarily driven by employee termination costs resulting from the elimination of positions due to the merger.
Currency Losses, net: Currency losses, net changed by $0.1 million to $0.2 million for the three months ended September 30, 2022 from $0.1 million for the three months ended September 30, 2021. This change was primarily attributable to the impact of foreign currency exchanges rate changes on intercompany receivables and payables denominated in a currency other than the subsidiary's functional currency.
Other (Income) Expense, net: Other (income) expense, net was $2.5 million of income for the three months ended September 30, 2022 compared to $1.5 million of expense for the three months ended September 30, 2021. Other income, net of $2.5 million for the three months ended September 30, 2022 was primarily related to insurance recoveries in the quarter related to Hurricane Ida in the Gulf Coast area of the United States in 2021.
Interest Expense: Interest expense increased $9.2 million, or 31.7%, to $38.2 million for the three months ended September 30, 2022 from $29.0 million for the three months ended September 30, 2021 due to both an increase in outstanding borrowings and an increase in the weighted average interest rate for borrowings under the ABL Facility due to increased benchmark interest rates, partially offset by a favorable margin reduction as a result of the June 30, 2022
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amendment to the credit facility. See Note 10 to the condensed consolidated financial statements for further discussion of our debt.
Income Tax Expense: Income tax expense increased $25.0 million to $30.2 million for the three months ended September 30, 2022 compared to $5.2 million for the three months ended September 30, 2021. The increase in expense was driven by the pre-tax income increase for the three months ended September 30, 2022.

Nine Months Ended September 30, 2022 Compared to the Nine Months Ended September 30, 2021
Our condensed consolidated statements of operations for the nine months ended September 30, 2022 and 2021 are presented below.
Nine Months Ended September 30,
2022 vs. 2021 $ Change
(in thousands)
20222021
Revenues:
Leasing and services revenue:
Leasing$1,226,206 $965,894 $260,312 
Delivery and installation341,027 252,914 88,113 
Sales revenue:
New units26,232 35,915 (9,683)
Rental units38,874 40,911 (2,037)
Total revenues1,632,339 1,295,634 336,705 
Costs:
Costs of leasing and services:
Leasing288,774 222,747 66,027 
Delivery and installation256,130 209,963 46,167 
Costs of sales:
New units15,469 24,322 (8,853)
Rental units21,123 22,441 (1,318)
Depreciation of rental equipment192,228 165,027 27,201 
Gross profit858,615 651,134 207,481 
Expenses:
Selling, general and administrative445,319 356,651 88,668 
Other depreciation and amortization50,895 51,793 (898)
Lease impairment expense and other related charges 254 2,328 (2,074)
Restructuring costs(86)11,956 (12,042)
Currency losses, net247 196 51 
Other (income) expense, net(7,642)202 (7,844)
Operating income369,628 228,008 141,620 
Interest expense102,362 87,793 14,569 
Fair value loss on common stock warrant liabilities— 26,597 (26,597)
     Loss on extinguishment of debt— 5,999 (5,999)
Income from continuing operations before income tax267,266 107,619 159,647 
Income tax expense67,167 32,341 34,826 
Income from continuing operations $200,099 $75,278 $124,821 

Comparison of Nine Months Ended September 30, 2022 and 2021
Revenue: Total revenue increased $336.7 million, or 26.0%, to $1,632.3 million for the nine months ended September 30, 2022 from $1,295.6 million for the nine months ended September 30, 2021. Leasing revenue increased $260.3 million, or 26.9%, as compared to the same period in 2021 driven by an increase of 38,780 average modular space and portable storage units on rent as a result of increased economic activity and acquisitions, and improved pricing and value added products. Delivery and installation revenues increased $88.1 million, or 34.8%, due to increased overall activity and increased pricing due to our ability to pass through increasing fuel costs and general price increases. Rental unit sales decreased $2.0 million, or 4.9%, and new unit sales decreased $9.7 million, or 27.0%.
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Total average units on rent for the nine months ended September 30, 2022 and 2021 were 302,444 and 263,664, respectively. Modular space average units on rent increased 2,787 units, or 2.5%, for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021. Modular space average monthly rental rates increased 17.3% to $853 for the nine months ended September 30, 2022. Portable storage average units on rent increased by 35,993 units, or 23.5%, for the nine months ended September 30, 2022. Average portable storage monthly rental rates increased 22.1% to $171 for the nine months ended September 30, 2022. The average modular space unit utilization rate during the nine months ended September 30, 2022 was 68.9%, as compared to 70.2% during the same period in 2021. The average portable storage unit utilization rate during the nine months ended September 30, 2022 was 86.4%, as compared to 78.7% during the same period in 2021.
Gross Profit: Our gross profit percentage was 52.6% and 50.3% for the nine months ended September 30, 2022 and 2021, respectively. Our adjusted gross profit percentage, which excludes the effects of depreciation, was 64.4% and 63.0% for the nine months ended September 30, 2022 and 2021, respectively. Gross profit increased $207.5 million, or 31.9%, to $858.6 million for the nine months ended September 30, 2022 from $651.1 million for the nine months ended September 30, 2021. The increase in gross profit was a result of a $194.2 million increase in leasing gross profit and increased delivery and installation gross profit of $42.0 million, partially offset by decreased new and rental unit sale margins of $1.6 million. The increases in leasing gross profit and delivery and installation gross profit were driven by favorable average monthly rental rates on modular space and portable storage units, increased pricing on delivery and installation, as well as due to higher units on rent and increased activity levels driving higher delivery and installation revenues. Depreciation increased to $192.2 million as a result of fleet acquired through acquisitions and capital investments made in our rental equipment.
SG&A: SG&A increased $88.6 million, or 24.8%, to $445.3 million for the nine months ended September 30, 2022, compared to $356.7 million for the nine months ended September 30, 2021. Employee costs excluding stock compensation increased $45.3 million, or 27.2%, driven by a 13% increase in SG&A headcount to support both organic and inorganic growth, wage increases, and increased variable compensation as a result of the growth achieved. Stock compensation expense increased $8.3 million to $22.6 million for the nine months ended September 30, 2022, compared to $14.3 million for the nine months ended September 30, 2021. Integration costs decreased $10.0 million to $13.2 million for the nine months ended September 30, 2022, compared to $23.2 million for the nine months ended September 30, 2021. The remaining increases were primarily driven by increased economic activity and inflationary increases, including increased occupancy and office costs, legal and professional fees, insurance, travel expenses, and marketing cost increases.
Other Depreciation and Amortization: Other depreciation and amortization decreased $0.9 million to $50.9 million for the nine months ended September 30, 2022 compared to $51.8 million for the nine months ended September 30, 2021.
Lease Impairment Expense and Other Related Charges: Lease impairment expense and other related charges was $0.3 million for the nine months ended September 30, 2022 as compared to $2.3 million for the nine months ended September 30, 2021.
Restructuring Costs: In the nine months ended September 30, 2021, the Company recorded $12.0 million of restructuring costs primarily as a result of employee termination costs from the elimination of positions due to the Merger. Employee termination costs of $7.2 million were settled in stock, which is non-cash, non-recurring and not included in stock compensation expense.
Currency Losses, Net: Currency losses, net of $0.2 million remained flat for the nine months ended September 30, 2022 when compared to the nine months ended September 30, 2021.
Other Income, Net: Other income, net was $7.6 million of income for the nine months ended September 30, 2022 compared to $0.2 million of expense for the nine months ended September 30, 2021. The increase was primarily attributable to insurance recoveries in the current period related to Hurricane Ida in the Gulf Coast area of the United States in 2021.
Interest Expense: Interest expense increased $14.6 million to $102.4 million for the nine months ended September 30, 2022 from $87.8 million for the nine months ended September 30, 2021 due to both an increase in outstanding borrowings and an increase in the weighted average interest rate for borrowings under the ABL Facility due to increased benchmark interest rates, partially offset by a favorable margin reduction as a result of the June 30, 2022 amendment to the credit facility. See Note 10 to the condensed consolidated financial statements for further discussion of our debt.
Fair Value Loss on Common Stock Warrant Liabilities: The fair value loss on common stock warrant liabilities was $26.6 million for the nine months ended September 30, 2021, primarily due to the change in estimated fair value of common stock warrant liabilities. Subsequent to May 2021, no 2015 Private Warrants were outstanding.
Loss on Extinguishment of Debt: During the nine months ended September 30, 2021, the Company redeemed $123.5 million of the outstanding principal of its 2025 Secured Notes and recorded a loss on extinguishment of debt of $6.0 million. There was no similar transaction in the nine months ended September 30, 2022.
Income Tax Expense: Income tax expense increased $34.9 million to $67.2 million for the nine months ended September 30, 2022 compared to $32.3 million for the nine months ended September 30, 2021. The increase in expense was driven by the pre-tax income increase for the nine months ended September 30, 2022.
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Business Segment Results
Following the divestiture of the Tank and Pump segment, the Company operates in three reportable segments as follows: NA Modular, NA Storage and UK Storage. NA Modular represents the activities of the North American modular business. NA Storage represents the activities of the North American portable storage business. UK Storage represents the results of all modular and portable storage operations in the UK. During the third quarter of 2021, the majority of the portable storage product business within the NA Modular segment was transitioned to the NA Storage segment, and associated revenues, expenses, and operating metrics beginning in the third quarter of 2021 were transferred to the NA Storage segment, representing a shift of approximately $5.0 million of revenue and gross margin per quarter from the NA Modular segment to the NA Storage segment. This adjustment was not made to the historical segment results of prior periods, given its relative immateriality.
The following tables and discussion summarize our reportable segment financial information for the three and nine months ended September 30, 2022 and 2021.
Comparison of Three Months Ended September 30, 2022 and 2021
Three Months Ended September 30, 2022
(in thousands, except for units on rent and rates)
NA ModularNA StorageUK StorageTotal
Revenue$375,364 $202,645 $26,164 $604,173 
Gross profit$156,852 $141,035 $16,445 $314,332 
Adjusted EBITDA$140,673 $98,695 $11,971 $251,339 
Capital expenditures for rental equipment$81,052 $41,246 $4,605 $126,903 
Average modular space units on rent87,364 18,052 8,569 113,985 
Average modular space utilization rate67.8 %73.7 %71.5 %68.9 %
Average modular space monthly rental rate$991 $746 $391 $907 
Average portable storage units on rent556 175,946 27,794 204,296 
Average portable storage utilization rate63.1 %88.8 %89.7 %88.9 %
Average portable storage monthly rental rate$227 $197 $88 $182 
Three Months Ended September 30, 2021
(in thousands, except for units on rent and rates)NA ModularNA StorageUK StorageTotal
Revenue$299,051 $133,897 $28,099 $461,047 
Gross profit$127,854 $92,496 $18,876 $239,226 
Adjusted EBITDA$106,825 $59,123 $13,255 $179,203 
Capital expenditures for rental equipment$31,789 $11,920 $11,649 $55,358 
Average modular space units on rent84,218 16,316 9,298 109,832 
Average modular space utilization rate67.6 %77.6 %83.4 %70.1 %
Average modular space monthly rental rate$834 $602 $454 $767 
Average portable storage units on rent493 137,123 25,632 163,248 
Average portable storage utilization rate48.0 %83.2 %89.1 %83.9 %
Average portable storage monthly rental rate$179 $155 $90 $145 
NA Modular
Revenue: Total revenue increased $76.3 million, or 25.5%, to $375.4 million for the three months ended September 30, 2022 from $299.1 million for the three months ended September 30, 2021. The increase was primarily the result of a $51.6 million, or 23.5%, increase in leasing revenue, a $26.4 million, or 45.5%, increase in modular delivery and installation revenue, a $4.0 million, or 51.3%, increase in rental unit sales revenue. These were partially offset by a $5.6 million, or 41.5%, decrease in new unit sales. Average modular space monthly rental rates increased 18.8% for the three months ended September 30, 2022 to $991 driven by the continuation of our long-term price optimization initiative and VAPS penetration opportunities
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across our portfolio. Average modular space units on rent increased by 3,146 units, or 3.7%, year over year primarily due to acquisitions.
Gross Profit: Gross profit increased $29.0 million, or 22.7%, to $156.9 million for the three months ended September 30, 2022 from $127.9 million for the three months ended September 30, 2021. Gross profit percentage contracted 100 bps to 41.8%. The increase in gross profit was driven by higher leasing gross profit, which increased $29.5 million, or 18.4%, driven by improved pricing including VAPS. The increase in gross profit from leasing for the three months ended September 30, 2022 was further complemented by an $11.6 million increase in delivery and installation gross profit, and a $2.0 million increase in rental unit sales gross profit. These increases were partially offset by a $13.6 million increase in depreciation of rental equipment related to capital investments made in our rental equipment and due to fleet acquired as part of acquisitions, and a $0.3 million decrease in new unit sales gross profit.
Adjusted EBITDA: Adjusted EBITDA increased $33.9 million, or 31.8%, to $140.7 million for the three months ended September 30, 2022 from $106.8 million for the three months ended September 30, 2021. Adjusted EBITDA margin percentage increased 176 bps to 37.5%. The increase was driven by higher leasing and delivery and installation gross profits discussed above. SG&A, excluding discrete items, increased $12.8 million, or 19.2%, for the three months ended September 30, 2022, as compared to the three months ended September 30, 2021 to support higher staffing levels for both organic and inorganic growth, wage increases, and increased variable compensation as a result of the growth achieved, increased office and occupancy costs, increased travel expenses, and increased subscription, legal and professional fees.
Capital Expenditures for Rental Equipment: Purchases of rental equipment and refurbishments increased $49.3 million, or 155.0%, to $81.1 million for the three months ended September 30, 2022 from $31.8 million for the three months ended September 30, 2021. Net Fleet CAPEX increased $45.3 million, or 188.8%, to $69.2 million. These increases were driven by increased refurbishments, and increased new fleet and VAPS purchase volumes, further increased by inflationary pressures.
NA Storage
Revenue: Total revenue increased $68.7 million, or 51.3%, to $202.6 million for the three months ended September 30, 2022 from $133.9 million for the three months ended September 30, 2021. Leasing revenues increased $55.4 million in the current quarter compared to the prior-year quarter. Modular space average units on rent increased 10.6% and average modular space monthly rental rates increased 23.9% year-over-year driven primarily by increased pricing on new deliveries. Portable storage units on rent increased 38,823, or 28.3%. Increases in organic activity drove an increase in average portable storage units on rent of approximately 14.0% or 19,000 units on rent, including an acceleration earlier into the third quarter of our seasonal retail business. The remaining increase of approximately 20,000 units on rent was driven by units added in recent acquisitions. Average portable storage monthly rental rates increased 27.1% year-over-year as a result of our price management tools and processes, further supported by high utilization, and by an acceleration earlier into the third quarter of our seasonal retail business. Delivery and installation revenues increased $14.3 million year-over-year driven by increased demand for new project deliveries, and by increased pricing on new deliveries and returns as compared to 2021. Sales revenues decreased $1.0 million compared to the prior-year quarter.
Gross Profit: Gross profit increased by $48.5 million, or 52.4%, to $141.0 million for the three months ended September 30, 2022 compared to $92.5 million for the three months ended September 30, 2021. Gross profit percentage increased 50 bps to 69.6%. Gross profit on leasing activity increased by $43.5 million year-over-year driven by both increased volume and increased pricing as described above. For delivery and installation, gross profit increased $8.4 million. Sales gross profit decreased by $0.9 million to $1.2 million.
Adjusted EBITDA: Adjusted EBITDA increased $39.6 million, or 66.9%, to $98.7 million for the three months ended September 30, 2022 from $59.1 million for the three months ended September 30, 2021. Adjusted EBITDA margin percentage increased 455 bps to 48.7%. The increase in Adjusted EBITDA was driven primarily by increased leasing gross profit as described above, partially offset by increased SG&A. Excluding acquisition-related costs and stock-based compensation, SG&A increased $10.5 million in this segment. The increase was comprised of increased costs for personnel, including commissions and other variable compensation to support increased commercial activity, increased travel expenses, and increased subscription and professional fees.
Capital Expenditures for Rental Equipment: Purchases of rental equipment and refurbishments increased $29.3 million, or 246.2%, to $41.2 million for the three months ended September 30, 2022 from $11.9 million for the three months ended September 30, 2021. Net Fleet CAPEX increased $30.7 million, or 347.6%, to $39.5 million. The increase in purchases of rental equipment and refurbishments was driven primarily by increased purchases of portable storage containers during the period to support organic growth.
UK Storage
Revenue: Total revenue decreased $1.9 million, or 6.8%, to $26.2 million for the three months ended September 30, 2022 from $28.1 million for the three months ended September 30, 2021 due to the strengthening of the U.S. Dollar. In local currency, total revenues increased £1.8 million to £22.2 million. Leasing revenues decreased $2.0 million in the current quarter compared to the prior-year quarter. In local currency, leasing revenues increased £1.0 million to £16.7 million. Modular space
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average units on rent decreased 7.8%, while portable storage units on rent increased 8.4%. Average monthly rental rates for modular space units decreased 13.9% and average monthly rental rates for portable storage units decreased 2.2% year-over-year, including the impacts of currency fluctuations. In local currency, average monthly rental rates for modular space units increased 0.3% and average monthly rental rates for portable storage increased 13.6% year-over-year. Delivery and installation revenues increased $0.2 million year-over-year. In local currency, delivery and installation revenues increased £0.9 million to £5.0 million. Sales revenues decreased $0.1 million compared to the prior-year quarter. In local currency, sales revenues decreased £0.1 million to £0.6 million.
Gross Profit: Gross profit decreased $2.5 million, or 13.2%, for the three months ended September 30, 2022 to $16.4 million from $18.9 million for the three months ended September 30, 2021 due to the strengthening of the U.S. Dollar. In local currency, gross profit increased £0.3 million, or 2.0%.
Adjusted EBITDA: Adjusted EBITDA decreased $1.3 million, or 9.8%, to $12.0 million for three months ended September 30, 2022 from $13.3 million for the three months ended September 30, 2021 and the Adjusted EBITDA margin percentage contracted to 45.8% from 47.2%. The decrease resulted from the unfavorable gross profit discussed above driven by unfavorable currency fluctuations, partially offset by decreased SG&A of $1.1 million. In local currency, Adjusted EBITDA increased £0.6 million, or 5.7%.
Capital Expenditures for Rental Equipment: Purchases of rental equipment and refurbishments decreased $7.0 million, or 60.3%, to $4.6 million for the three months ended September 30, 2022 from $11.6 million for the three months ended September 30, 2021. Net Fleet CAPEX decreased $7.1 million, or 62.7%, to $4.2 million. The decrease in purchases of rental equipment and refurbishments was driven primarily by decreased purchases of portable storage containers as compared to the prior year.
Comparison of Nine Months Ended September 30, 2022 and 2021
Nine Months Ended September 30, 2022
(in thousands, except for units on rent and rates)
NA ModularNA StorageUK StorageTotal
Revenue$1,022,720 $529,347 $80,272 $1,632,339 
Gross profit$439,573 $367,585 $51,457 $858,615 
Adjusted EBITDA$372,502 $243,282 $36,745 $652,529 
Capital expenditures for rental equipment$221,111 $95,699 $21,824 $338,634 
Average modular space units on rent86,310 18,223 8,470 113,003 
Average modular space utilization rate67.5 %74.7 %72.0 %68.9 %
Average modular space monthly rental rate$936 $673 $409 $853 
Average portable storage units on rent498 161,331 27,612 189,441 
Average portable storage utilization rate56.5 %86.0 %89.8 %86.4 %
Average portable storage monthly rental rate$201 $184 $92 $171 
Nine Months Ended September 30, 2021
(in thousands, except for units on rent and rates)
NA ModularNA StorageUK StorageTotal
Revenue$854,657 $357,439 $83,538 $1,295,634 
Gross profit$356,992 $240,836 $53,306 $651,134 
Adjusted EBITDA$307,741 $154,971 $36,647 $499,359 
Capital expenditures for rental equipment$120,288 $24,165 $22,645 $167,098 
Average modular space units on rent84,589 16,371 9,256 110,216 
Average modular space utilization rate67.6 %78.5 %83.8 %70.2 %
Average modular space monthly rental rate$790 $570 $428 $727 
Average portable storage units on rent9,566 118,598 25,284 153,448 
Average portable storage utilization rate64.1 %78.0 %90.0 %78.7 %
Average portable storage monthly rental rate$129 $152 $86 $140 

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NA Modular
Revenue: Total revenue increased $168.1 million, or 19.7%, to $1,022.8 million for the nine months ended September 30, 2022 from $854.7 million for the nine months ended September 30, 2021. The increase was primarily the result of a $119.3 million, or 18.7%, increase in leasing revenue, a $52.2 million, or 32.3%, increase in delivery and installation revenues and a $3.2 million, or 11.3%, increase in rental unit sales revenue. The increases to leasing revenue and delivery and installation revenues were partially offset by declines in revenues for portable storage units in the first and second quarters of 2022 as a result of transitioning the majority of the portable storage product business within the NA Modular segment to the NA Storage segment during the third quarter of 2021. Approximately 12,000 units were transferred during the third quarter of 2021 to the NA Storage segment, reallocating approximately $10.0 million of revenue from NA Modular segment to the NA Storage segment in the first six months of 2022 relative to the first six months of 2021. Average modular space monthly rental rates increased 18.5% for the nine months ended September 30, 2022 to $936 driven by the continuation of our long-term price optimization initiative and VAPS penetration opportunities across our portfolio. In addition to improved pricing, average modular space units on rent increased by 1,721 units, or 2.0%, year over year driven primarily by acquisitions.
Gross Profit: Gross profit increased $82.6 million, or 23.1%, to $439.6 million for the nine months ended September 30, 2022 from $357.0 million for the nine months ended September 30, 2021. The increase in gross profit was driven by higher leasing gross profit, which increased $77.7 million, or 16.7%, driven by improved pricing including VAPS and increased modular unit on rent volumes, partially offset by the transfer of portable storage units to the NA Storage segment discussed above, and a $25.2 million increase in delivery and installation gross profit driven by volumes and improved pricing. These increases were further complemented by a $0.5 million increase in new sales gross profit and $1.7 million increase in rental unit sales gross profit. These increases were partially offset by a $22.5 million increase in depreciation of rental equipment related to capital investments made in our rental equipment and due to fleet acquired as part of acquisitions.
Adjusted EBITDA: Adjusted EBITDA increased $64.8 million, or 21.0%, to $372.5 million for the nine months ended September 30, 2022 from $307.7 million for the nine months ended September 30, 2021. The increase was driven by higher leasing gross profit discussed above. SG&A, excluding discrete items, increased $50.0 million, or 26.0%, for the nine months ended September 30, 2022, as compared to the nine months ended September 30, 2021 to support higher staffing levels for both organic and inorganic growth, wage increases, and increased variable compensation as a result of the growth achieved, increased office and occupancy costs, increased travel expenses, and increased subscription, legal and professional fees.
Capital Expenditures for Rental Equipment: Purchases of rental equipment and refurbishments increased $100.8 million, or 83.8%, to $221.1 million for the nine months ended September 30, 2022 from $120.3 million for the nine months ended September 30, 2021. These increases were driven by increased refurbishments, and increased new fleet and VAPS purchase volumes, further increased by inflationary pressures.

NA Storage
Revenue: Total revenue increased $171.9 million, or 48.1%, to $529.4 million for the nine months ended September 30, 2022 from $357.5 million for the nine months ended September 30, 2021. The increase was primarily the result of a $142.0 million, or 53.1%, increase in leasing revenue, and a $36.5 million, or 49.9%, increase in delivery and installation revenues. These increases were partially offset by a decrease in rental unit sales revenue of $5.3 million, or 46.5%. Average portable storage monthly rental rates increased 21.1% for the nine months ended September 30, 2022 to $184 as a result of our price management tools and processes, further supported by high utilization, and by an acceleration earlier into the third quarter of our seasonal retail business. Average portable storage units on rent increased by 42,733 units, or 36.0%, year over year, driven by increased organic economic activity of approximately 17,500 average units on rent, approximately 17,000 average units on rent acquired from acquisitions, and due to the transfer of approximately 12,000 portable storage units on rent from the NA Modular segment, which occurred in the third quarter of 2021 (8,000 average units on rent impact). Average modular space monthly rental rates increased 18.1% for the nine months ended September 30, 2022 to $673 driven by the continuation of our long-term price optimization initiative and VAPS penetration opportunities across our portfolio. Average modular space units on rent increased by 1,852 units, or 11.3%, year over year, of which approximately 30% was acquisition driven.
Gross Profit: Gross profit increased $126.8 million, or 52.7%, to $367.6 million for the nine months ended September 30, 2022 from $240.8 million for the nine months ended September 30, 2021. Gross profit on leasing activity increased by $116.8 million year-over-year driven by both increased volume and increased pricing as described above. For delivery and installation, gross profit increased $17.9 million. Sales gross profit decreased by $3.5 million to $3.5 million.
Adjusted EBITDA: Adjusted EBITDA increased $88.3 million, or 57.0%, to $243.3 million for the nine months ended September 30, 2022 from $155.0 million for the nine months ended September 30, 2021. The increase was driven by higher leasing gross profit discussed above. SG&A, excluding discrete items, increased $40.6 million, or 38.4%, for the nine months ended September 30, 2022, as compared to the nine months ended September 30, 2021 to support higher staffing levels for both organic and inorganic growth, wage increases, and increased variable compensation as a result of the growth achieved, increased office and occupancy costs, increased travel expenses, and increased subscription, legal and professional fees.
Capital Expenditures for Rental Equipment: Purchases of rental equipment and refurbishments increased $71.5 million, or 295.5%, to $95.7 million for the nine months ended September 30, 2022 from $24.2 million for the nine months
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ended September 30, 2021. The increase in purchases of rental equipment and refurbishments was driven primarily by increased purchases of portable storage containers during the period to support organic growth.

UK Storage
Revenue: Total revenue decreased $3.2 million, or 3.9%, to $80.3 million for the nine months ended September 30, 2022 from $83.5 million for the nine months ended September 30, 2021 due to the strengthening of the U.S. Dollar. The decrease was primarily the result of a $1.8 million, or 66.7%, decrease in new unit sales revenue and a $0.6 million, or 3.3%, decrease in delivery and installation revenues. In local currency, total revenue increased £3.6 million, driven by a £3.8 million increase in leasing revenue, and a £0.9 million increase in delivery and installation revenue, partially offset by a £1.1 million decrease in sales revenue. Average portable storage monthly rental rates increased 7.0% for the nine months ended September 30, 2022 to $92. Average portable storage units on rent increased by 2,328 units, or 9.2%, year over year. Average modular space monthly rental rates decreased 4.4% for the nine months ended September 30, 2022 to $409. Average modular space units on rent decreased by 786 units, or 8.5%, year over year. In local currency, average portable storage monthly rental rates decreased 5.2% for the nine months ended September 30, 2022 to £73, and average modular space monthly rental rates decreased 13.3% for the nine months ended September 30, 2022 to £325.
Gross Profit: Gross profit decreased $1.8 million, or 3.4%, to $51.5 million for the nine months ended September 30, 2022 from $53.3 million for the nine months ended September 30, 2021 due to the strengthening of the U.S. Dollar. Gross profit on leasing activity decreased by $0.3 million year-over-year. For delivery and installation, gross profit decreased $1.2 million. Sales gross profit decreased by $0.2 million to $0.7 million. In local currency, gross profit increased £2.4 million, or 6.4% for the nine months ended September 30, 2022 from £38.5 million. Gross profit on leasing activity increased by £3.3 million. For delivery and installation, gross profit decreased £0.4 million. Sales gross profit decreased by £0.1 million to £0.6 million.
Adjusted EBITDA: Adjusted EBITDA increased $0.1 million, or 0.3%, to $36.7 million for the nine months ended September 30, 2022 from $36.6 million for the nine months ended September 30, 2021. The increase was driven by higher leasing gross profit discussed above. SG&A, excluding discrete items, decreased $1.8 million, or 9.0%, for the nine months ended September 30, 2022, as compared to the nine months ended September 30, 2021. In local currency, Adjusted EBITDA increased £2.8 million, or 10.6%.
Capital Expenditures for Rental Equipment: Purchases of rental equipment and refurbishments decreased $0.8 million, or 3.5%, to $21.8 million for the nine months ended September 30, 2022 from $22.6 million for the nine months ended September 30, 2021.

Reconciliation of Non-GAAP Financial Measures
In addition to using GAAP financial measurements, we use certain non-GAAP financial measures to evaluate our operating results. As such, we include in this Quarterly Report on Form 10-Q reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures. Set forth below are definitions and reconciliations to the nearest comparable GAAP measure of certain non-GAAP financial measures used in this Quarterly Report on Form 10-Q along with descriptions of why we believe these measures provide useful information to investors as well as a description of the limitations of these measures. Each of these non-GAAP financial measures has limitations as an analytical tool and should not be considered in isolation from, or as a substitute for analysis of, results reported under GAAP. Our measurements of these metrics may not be comparable to similarly titled measures of other companies.
Adjusted EBITDA
We define EBITDA as net income (loss) plus net interest (income) expense, income tax expense (benefit), depreciation and amortization. Our adjusted EBITDA ("Adjusted EBITDA") reflects the following further adjustments to EBITDA to exclude certain non-cash items and the effect of what we consider transactions or events not related to our core business operations:
Currency (gains) losses, net: on monetary assets and liabilities denominated in foreign currencies other than the subsidiaries’ functional currency. Substantially all such currency gains (losses) are unrealized and attributable to financings due to and from affiliated companies.
Goodwill and other impairment charges related to non-cash costs associated with impairment charges to goodwill, other intangibles, rental fleet and property, plant and equipment.
Restructuring costs, lease impairment expense, and other related charges associated with restructuring plans designed to streamline operations and reduce costs including employee and lease termination costs.
Transaction costs including legal and professional fees and other transaction specific related costs.
Costs to integrate acquired companies, including outside professional fees, non-capitalized costs associated with system integrations, non-lease branch and fleet relocation expenses, employee training costs and other costs required to realize cost or revenue synergies.
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Non-cash charges for stock compensation plans.
Gains and losses resulting from changes in fair value and extinguishment of common stock warrant liabilities.
Other expense, including consulting expenses related to certain one-time projects, financing costs not classified as interest expense and gains and losses on disposals of property, plant and equipment.
Our Chief Operating Decision Maker ("CODM") evaluates business segment performance utilizing Adjusted EBITDA as shown in the reconciliation of the Company’s consolidated income from continuing operations to Adjusted EBITDA below. Management believes that evaluating segment performance excluding such items is meaningful because it provides insight with respect to the intrinsic and ongoing operating results of the Company and captures the business performance of the segments, inclusive of indirect costs.
Adjusted EBITDA has limitations as an analytical tool, and you should not consider the measure in isolation or as a substitute for net income (loss), cash flow from operations or other methods of analyzing WillScot Mobile Mini’s results as reported under GAAP. Some of these limitations are:
Adjusted EBITDA does not reflect changes in, or cash requirements for our working capital needs;
Adjusted EBITDA does not reflect our interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness;
Adjusted EBITDA does not reflect our tax expense or the cash requirements to pay our taxes;
Adjusted EBITDA does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;
Adjusted EBITDA does not reflect the impact on earnings or changes resulting from matters that we consider not to be indicative of our future operations;
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements; and
other companies in our industry may calculate Adjusted EBITDA differently, limiting its usefulness as a comparative measure.
Because of these limitations, Adjusted EBITDA should not be considered as discretionary cash available to reinvest in the growth of our business or as measures of cash that will be available to meet our obligations.
The following table provides unaudited reconciliations of Income from continuing operations to Adjusted EBITDA:
Three Months Ended Nine Months Ended
September 30,September 30,
(in thousands)2022202120222021
Income from continuing operations$85,728 $57,113 $200,099 $75,278 
Income tax expense from continuing operations30,219 5,243 67,167 32,341 
Loss on extinguishment of debt— — — 5,999 
Fair value loss on common stock warrant liabilities— — — 26,597 
Interest expense38,165 29,006 102,362 87,793 
Depreciation and amortization86,225 69,449 243,123 216,820 
Currency losses, net236 127 247 196 
Restructuring costs, lease impairment expense and other related charges— 2,457 168 14,284 
Transaction costs— 303 35 1,147 
Integration costs3,902 8,242 13,182 23,206 
Stock compensation expense7,180 6,157 22,628 14,305 
Other(316)1,106 3,518 1,393 
Adjusted EBITDA$251,339 $179,203 $652,529 $499,359 

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Income From Continuing Operations Excluding Gain/Loss from Warrants
We define Income from Continuing Operations Excluding Gain/Loss from Warrants as income from continuing operations plus or minus the impact of the change in the fair value of the common stock warrant liability. Management believes that the presentation of our financial statements excluding the impact of the mark-to-market adjustment provides useful information regarding our results of operations and assists in the review of our actual operating performance. The following table provides unaudited reconciliations of Income from Continuing Operations to Income from Continuing Operations Excluding Gain/Loss from Warrants:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2022202120222021
Income from Continuing Operations $85,728 $57,113 $200,099 $75,278 
Fair value loss on common stock warrant liabilities — — — 26,597 
Income from Continuing Operations Excluding Gain/Loss from Warrants$85,728 $57,113 $200,099 $101,875 

Adjusted EBITDA Margin
We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue. Income from Continuing Operations Margin is defined as Income from continuing operations divided by revenue. Management believes that the presentation of Adjusted EBITDA Margin and Income from Continuing Operations Margin provides useful information to investors regarding the performance of our business. The following table provides unaudited reconciliations of Adjusted EBITDA Margin and Income from Continuing Operations Margin:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2022202120222021
Adjusted EBITDA (A)$251,339 $179,203 $652,529 $499,359 
Revenue (B)604,173 461,047 1,632,339 1,295,634 
Adjusted EBITDA Margin (A/B)41.6 %38.9 %40.0 %38.5 %
Income from continuing operations (C)$85,728 $57,113 $200,099 $75,278 
Income from Continuing Operations Margin (C/B)14.2 %12.4 %12.3 %5.8 %

Adjusted Gross Profit and Adjusted Gross Profit Percentage
We define Adjusted Gross Profit as gross profit plus depreciation on rental equipment. Adjusted Gross Profit Percentage is defined as Adjusted Gross Profit divided by revenue. Adjusted Gross Profit and Adjusted Gross Profit Percentage are not measurements of our financial performance under GAAP and should not be considered as an alternative to gross profit, gross profit percentage, or other performance measures derived in accordance with GAAP. In addition, our measurement of Adjusted Gross Profit and Adjusted Gross Profit Percentage may not be comparable to similarly titled measures of other companies. Management believes that the presentation of Adjusted Gross Profit and Adjusted Gross Profit Percentage provides useful information to investors regarding our results of operations and assists in analyzing the performance of our business.
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The following table provides unaudited reconciliations of gross profit to Adjusted Gross Profit and Adjusted Gross Profit Percentage:
Three Months EndedNine Months Ended
September 30,September 30,
(in thousands)2022202120222021
Revenue (A)$604,173 $461,047 $1,632,339 $1,295,634 
Gross profit (B)$314,332 $239,226 $858,615 $651,134 
Depreciation of rental equipment69,159 52,990 192,228 165,027 
Adjusted Gross Profit (C)$383,491 $292,216 $1,050,843 $816,161 
Gross Profit Percentage (B/A)52.0 %51.9 %52.6 %50.3 %
Adjusted Gross Profit Percentage (C/A)63.5 %63.4 %64.4 %63.0 %
Net CAPEX
We define Net CAPEX as purchases of rental equipment and refurbishments and purchases of property, plant and equipment (collectively, "Total Capital Expenditures"), less proceeds from the sale of rental equipment and proceeds from the sale of property, plant and equipment (collectively, "Total Proceeds"), which are all included in cash flows from investing activities. Management believes that the presentation of Net CAPEX provides useful information to investors regarding the net capital invested into our rental fleet and plant, property and equipment each year to assist in analyzing the performance of our business. The following table provides unaudited reconciliations of Net CAPEX:
Three Months EndedNine Months Ended
September 30,September 30,
(in thousands)2022202120222021
Total purchases of rental equipment and refurbishments$(135,076)$(60,374)$(360,465)$(178,191)
Total proceeds from sale of rental equipment 17,183 11,597 52,263 42,034 
Net CAPEX for Rental Equipment(117,893)(48,777)(308,202)(136,157)
Purchases of property, plant and equipment (10,000)(3,386)(30,253)(20,836)
Proceeds from sale of property, plant and equipment894 209 1,645 16,647 
Net CAPEX$(126,999)$(51,954)$(336,810)$(140,346)

Liquidity and Capital Resources
Overview
WillScot Mobile Mini is a holding company that derives its operating cash flow from its operating subsidiaries. Our principal sources of liquidity include cash generated by operating activities from our subsidiaries, borrowings under the ABL Facility (as defined below), and sales of equity and debt securities. We believe that our liquidity sources and operating cash flows are sufficient to address our operating, debt service and capital requirements over the next twelve months.
We have consistently accessed the debt and equity capital markets both opportunistically and as necessary to support the growth of our business, desired leverage levels, and other capital allocation priorities. We believe we have ample liquidity in the ABL Facility and are generating substantial free cash flow, which together support both organic operations and other capital allocation priorities as they arise.
We continue to review available acquisition opportunities with the awareness that any such acquisition may require us to incur additional debt to finance the acquisition and/or to issue shares of our Common Stock or other equity securities as acquisition consideration or as part of an overall financing plan. In addition, we will continue to evaluate alternatives to optimize our capital structure, which could include the issuance or repurchase of additional unsecured and secured debt, equity securities and/or equity-linked securities. There can be no assurance as to the timing of any such issuance or repurchase. If we obtain additional capital by issuing equity, the interests of our existing stockholders will be diluted. If we incur additional indebtedness, that indebtedness may contain significant financial and other covenants that may significantly restrict our operations. Availability of financing and the associated terms are inherently dependent on the debt and equity capital markets and subject to change. From time to time, we may also seek to streamline our capital structure and improve our financial
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position through refinancing or restructuring our existing debt or retiring certain of our securities for cash or other consideration.
Our revolving credit facility provides an 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”), and (ii) a $400.0 million senior secured asset-based multicurrency revolving credit facility (the "Multicurrency Facility") together with the US Facility (collectively, the “ABL Facility”), available to be drawn in US Dollars, Canadian Dollars, British Pounds Sterling or Euros. Borrowing availability under the ABL Facility is equal to the lesser of $3.7 billion and the applicable borrowing bases. The borrowing bases are a function of, among other things, the value of the assets in the relevant collateral pool. At September 30, 2022, we had $1.9 billion outstanding principal and $1.1 billion of available borrowing capacity under the ABL Facility.
Cash Flow Comparison for the Nine Months Ended September 30, 2022 and 2021
Significant factors driving our liquidity include cash flows generated from operating activities and capital expenditures. Our ability to fund our capital needs will be affected by our ongoing ability to generate cash from operations and access to capital markets. The following summarizes our change in cash and cash equivalents for the periods presented:
Nine Months Ended
September 30,
(in thousands)
20222021
Net cash from operating activities
$544,238 $392,055 
Net cash from investing activities
(225,930)(196,590)
Net cash from financing activities
(313,723)(208,935)
Effect of exchange rate changes on cash and cash equivalents
(1,842)(150)
Net change in cash and cash equivalents
$2,743 $(13,620)
Cash Flows from Operating Activities
Cash provided by operating activities for the nine months ended September 30, 2022 was $544.2 million as compared to $392.1 million for the nine months ended September 30, 2021, an increase of $152.2 million, or 38.8%. The increase was due to an increase of $157.5 million of net income, adjusted for non-cash items, partially offset by a decrease of $5.2 million in net changes in operating assets and liabilities.
Cash Flows from Investing Activities
Cash used in investing activities for the nine months ended September 30, 2022 was $225.9 million as compared to $196.6 million for the nine months ended September 30, 2021, an increase of $29.3 million. The increase in cash used in investing activities was driven by a $182.3 million increase in cash used for the purchase of rental equipment and refurbishments, a $152.4 million increase in cash used in acquisitions, net of cash acquired, a $15.0 million decrease in proceeds from sale of property, plant and equipment, and a $9.5 million increase in cash used for the purchase of property, plant and equipment, partially offset by a $319.5 million increase in proceeds from sale of Tank and Pump business and a $10.3 million increase in proceeds from the sale of rental equipment.
Cash Flows from Financing Activities
Cash used in financing activities for the nine months ended September 30, 2022 was $313.7 million as compared to $208.9 million for the nine months ended September 30, 2021, an increase of $104.8 million. The increase was primarily due to a $195.1 million increase in the repurchase and cancellation of common stock and warrants, an $87.1 million increase in repayment of borrowings, and a $27.0 million increase in principal payments on finance lease obligations, partially offset by a $212.1 million increase in receipts from borrowings.
Free Cash Flow
Free Cash Flow is a non-GAAP measure. We define Free Cash Flow as net cash provided by operating activities, less purchases of, and proceeds from, rental equipment and property, plant and equipment, which are all included in cash flows from investing activities. Management believes that the presentation of Free Cash Flow provides useful additional information concerning cash flow available to fund our capital allocation alternatives.
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The following table provides reconciliations of net cash provided by operating activities to Free Cash Flow.
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2022202120222021
Net cash provided by operating activities$210,385 $130,447 $544,238 $392,055 
Purchase of rental equipment and refurbishments(135,076)(60,374)(360,465)(178,191)
Proceeds from sale of rental equipment17,183 11,597 52,263 42,034 
Purchases of property, plant and equipment(10,000)(3,386)(30,253)(20,836)
Proceeds from the sale of property, plant and equipment894 209 1,645 16,647 
Free Cash Flow$83,386 $78,493 $207,428 $251,709 
Cash flow from operations increased by $152.2 million or 38.8% for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021. Cash used in investing activities excluding acquisitions and sale of discontinued operations increased by $196.4 million to support unit on rent and VAPS growth with leasing revenues up 27.0% year-over-year. Cash flow from operations increased by $79.8 million, or 61.1% for the three months ended September 30, 2022 as compared to the three months ended September 30, 2021. This increase was supported by the 30.6% increase in leasing revenue year-over-year. Free cash flow of $207.4 million for the nine months ended September 30, 2022 was down $44.3 million as compared to the nine months ended September 30, 2021 which is consistent with the counter cyclicality of free cash flow in our business.
Material cash requirements
The Company’s material cash requirements include the following contractual and other obligations:
Debt
The Company has outstanding debt related to its ABL Facility, 2025 Secured Notes, 2028 Secured Notes, and finance leases, totaling $3.0 billion as of September 30, 2022, $13.5 million of which is obligated to be repaid within the next twelve months. Refer to Note 10 for further information regarding outstanding debt.
Operating leases
The Company has commitments for future minimum rental payments relating to operating leases, which are primarily for equipment and office space. As of September 30, 2022, the Company had lease obligations of $264.7 million, with $60.0 million payable within the next twelve months.
In addition to the aforementioned cash requirements, the Company has a Share Repurchase Program authorized by the Board of Directors which allows the Company to repurchase up to $1.0 billion of outstanding shares of Common Stock and equivalents. This program does not obligate the Company to repurchase any specific amount of shares.
The Company believes its cash, cash flows generated from ongoing operations, continued access to its revolving credit facility, as well as access to debt markets, are sufficient to satisfy its currently anticipated cash requirements for the foreseeable future.

Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition, results of operations, liquidity and capital resources is based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. GAAP requires that we make estimates and judgments that affect the reported amount of assets, liabilities, revenue, expenses and the related disclosure of contingent assets and liabilities. We base these estimates on historical experience and on various other assumptions that we consider reasonable under the circumstances, and reevaluate our estimates and judgments as appropriate. The actual results experienced by us may differ materially and adversely from our estimates.
The US Securities and Exchange Commission (the “SEC”) suggests companies provide additional disclosure on those accounting policies considered most critical. The SEC considers an accounting policy to be critical if it is important to our financial condition and results of operations and requires significant judgments and estimates on the part of management in its application. For a complete discussion of our significant critical accounting policies, see the “Critical Accounting Policies and Estimates” section in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2021 (the "2021 Annual Report on Form 10-K").
There were no significant changes to our critical accounting policies during the nine months ended September 30, 2022.

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Recently Issued Accounting Standards
Refer to Part I, Item 1, Note 1 of the notes to our financial statements included in this Quarterly Report on Form 10-Q for our assessment of recently issued accounting standards.

Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Act of 1934, as amended. The words “estimates,” “expects,” “anticipates,” “believes,” “forecasts,” “plans,” “intends,” “may,” “will,” “should,” “shall,” “outlook,” “guidance” and variations of these words and similar expressions identify forward-looking statements, which are generally not historical in nature and relate to expectations for future financial performance or business strategies or objectives. Forward-looking statements are subject to a number of risks, uncertainties, assumptions and other important factors, many of which are outside our control, which could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Although we believe that these forward-looking statements are based on reasonable assumptions, we can give no assurance that any such forward-looking statement will materialize. Important factors that may affect actual results or outcomes include, among others:
our ability to successfully acquire and integrate new operations;
the effect of global or local economic conditions in the industries and markets in which the Company operates and any changes therein, including financial market conditions and levels of end market demand;
operational, economic, political and regulatory risks;
the impact of public health crises, such as the global pandemic related to COVID-19, including the financial condition of the Company’s customers and suppliers and employee health and safety;
risks associated with cybersecurity and IT systems disruptions, including our ability to manage the business in the event a disaster shuts down our management information systems;
effective management of our rental equipment;
trade policies and changes in trade policies, including the imposition of tariffs, their enforcement and downstream consequences;
our ability to effectively compete in the modular space and portable storage industries;
our ability to effectively manage our credit risk, collect on our accounts receivable, or recover our rental equipment;
the effect of changes in state building codes on our ability to remarket our buildings;
foreign currency exchange rate exposure;
fluctuations in interest rates and commodity prices;
significant increases in the costs and restrictions on the availability of raw materials and labor;
fluctuations in fuel costs or oil prices, a reduction in fuel supplies, or a sustained decline in oil prices;
our reliance on third party manufacturers and suppliers;
risks associated with labor relations, labor costs and labor disruptions;
impairment of our goodwill, intangible assets and indefinite-life intangible assets;
various laws and regulations, including those governing government contracts, corruption and the environment;
changes in the competitive environment of our customer base as a result of the global, national or local economic climate in which they operate and/or economic or financial disruptions to their industry;
our ability to adequately protect our intellectual property and other proprietary rights that are material to our business;
natural disasters and other business disruptions such as pandemics, fires, floods, hurricanes, earthquakes and terrorism;
our ability to establish and maintain the appropriate physical presence in our markets;
property, casualty or other losses not covered by our insurance;
our ability to close our unit sales transactions;
our ability to maintain an effective system of internal controls and accurately report our financial results;
evolving public disclosure, financial reporting and corporate governance expectations;
our ability to achieve our environmental, social and governance goals;
our ability to use our net operating loss carryforwards and other tax attributes;
our ability to recognize deferred tax assets such as those related to our tax loss carryforwards and, as a result, utilize future tax savings;
unanticipated changes in tax obligations, adoption of a new tax legislation, or exposure to additional income tax liabilities;
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our ability to access the capital and credit markets or the ability of key counterparties to perform their obligations to us:
our ability to service our debt and operate our business;
our ability to incur significant additional amounts of debt, which could further exacerbate the risks associated with our substantial indebtedness;
covenants that limit our operating and financial flexibility;
uncertainty regarding the phase-out of LIBOR;
our stock price volatility; and
such other risks and uncertainties described in the periodic reports we file with the SEC from time to time (including our 2021 Annual Report on Form 10-K), which are available through the SEC’s EDGAR system at www.sec.gov and on our website.
Any forward-looking statement speaks only at the date which it is made, and we undertake no obligation, and disclaims any obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

ITEM 3.    Quantitative and Qualitative Disclosures about Market Risk
We are exposed to certain market risks from changes in foreign currency exchange rates and interest rates. Changes in these factors cause fluctuations in our earnings and cash flows. We evaluate and manage exposure to these market risks as follows:
Interest Rate Risk
We are primarily exposed to interest rate risk through our ABL Facility, which bears interest at variable rates. We had $1.9 billion in outstanding principal under the ABL Facility at September 30, 2022. An increase in interest rates by 100 basis points on our ABL Facility would increase our quarter to date interest expense by approximately $5.3 million based on current outstanding borrowings.
Foreign Currency Risk
We currently generate the majority of our consolidated net revenues in the US, and the reporting currency for our consolidated financial statements is the US dollar. However, we are exposed to currency risk principally through our operations in Canada, Mexico, and the United Kingdom. For the operations outside the US, we bill customers primarily in their local currency, which is subject to foreign currency rate changes. As our net revenues and expenses generated outside of the US increase, our results of operations could be adversely impacted by changes in foreign currency exchange rates. Since we recognize foreign revenues in local foreign currencies, if the US dollar strengthens, it could have a negative impact on our foreign revenues upon translation of those results into the US dollar for consolidation into our financial statements.
In addition, we are exposed to gains and losses resulting from fluctuations in foreign currency exchange rates on transactions generated by our foreign subsidiaries in currencies other than their local currencies. These gains and losses are primarily driven by intercompany transactions and rental equipment purchases denominated in currencies other than the functional currency of the purchasing entity. These exposures are included in currency (gains) losses, net, on the condensed consolidated statements of operations. To date, we have not entered into any hedging arrangements with respect to foreign currency risk.

ITEM 4.    Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 as amended (the "Exchange Act"), as of September 30, 2022. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2022.
Changes in Internal Controls
There were no changes in our internal control over financial reporting that occurred during our quarter ended September 30, 2022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II

ITEM 1.    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 September 30, 2022, 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 of the Company. However, the outcome of such matters is inherently unpredictable and subject to significant uncertainties.

ITEM 1A.    Risk Factors
The Company’s financial position, results of operations and cash flows are subject to various risks, many of which are not exclusively within the Company’s control, which may cause actual performance to differ materially from historical or projected future performance. In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in Item 1A. of our 2021 Annual Report on Form 10-K, which have not materially changed.

ITEM 2.    Unregistered Sales of Equity Securities
The following table summarizes our purchase of Common Stock during the third quarter of 2022. No stock equivalents were purchased by the Company during the third quarter of 2022.
Period
Total Number of Shares and Equivalents Purchased (in thousands)Average Price Paid
per Share
Total Number of Shares and Equivalents Purchased as part of Publicly Announced Plan (in thousands)Maximum Dollar Value of Shares and Equivalents that May Yet Be Purchased Under the Plans (in millions)
July 1, 2022 to July 31, 20222,481.7 $33.45 2,481.7$977.7 
August 1, 2022 to August 31, 20221,025.4 $41.36 1,025.4$935.3 
September 1, 2022 to September 30, 20221,763.4 $40.79 1,763.4$863.3 
Total5,270.5 $37.44 5,270.5 

A share repurchase program authorizes the Company to repurchase its outstanding shares of Common Stock and equivalents. As of September 30, 2022, $863.3 million of the $1.0 billion share repurchase authorization remained available for use.

ITEM 3.    Defaults Upon Senior Securities
None.

ITEM 4.    Mine Safety Disclosures
Not applicable.

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ITEM 5.    Other Information
A proposal to be included in our proxy statement pursuant to Rule 14a-8 under the Exchange Act must be received at the office of the Corporate Secretary on or before December 23, 2022 (rather than February 3, 2023 as indicated in the proxy statement for our 2022 annual meeting of stockholders). Notice of a proposal submitted pursuant to Rule 14a-8 must also comply with requirements set forth in Rule 14a-8.

ITEM 6.    Exhibits
*
*
**
**
101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCHXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LABXBRL Taxonomy Extension Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document
104*Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set.
*Filed herewith
**Furnished (and not filed) herewith pursuant to Item 601(b)(32)(ii) of Regulation S-K under the Exchange Act

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Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
WillScot Mobile Mini Holdings Corp.
By:
/s/ TIMOTHY D. BOSWELL
Dated:
November 3, 2022
Timothy D. Boswell
President & Chief Financial Officer
(Principal Financial Officer and Duly Authorized Signing Officer)



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