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 SeptemberJune 30, 20192020
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-20190930_g1.jpgwsc-20200630_g1.jpg
WILLSCOT CORPORATIONMOBILE 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.)
901 S. Bond Street, #6004646 E Van Buren St., Suite 400
Baltimore, Maryland 21231Phoenix, Arizona 85008
(Address, including zip code, of principal executive offices)
(410) 931-6000
(480) 894-6311
(Registrant’s telephone number, including area code)
(Former Name or Former Address, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stock,Common Stock, par value $0.0001 per shareWSCThe Nasdaq Capital Market
Warrants to purchase Class A common stock(1)WSCWWOTC Markets Group Inc.
Warrants to purchase Class A common stock(2)WSCTWOTC Markets Group Inc.
(1) Issued in connection with the initial public offering of Double Eagle Acquisition Corp., the registrant’s legal predecessor company, in September 2015, which are exercisable for one-half of one share of the registrant’s Class A common stock for an exercise price of $5.75.
(2) Issued in connection with the registrant’s acquisition of Modular Space Holdings, Inc. in August 2018, which are exercisable for one share of the registrant’s Class A 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
1



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 Class A common stock,Common Stock, par value $0.0001 per share, outstanding: 108,751,354227,721,220 shares at OctoberJuly 31, 2019.
Shares of Class B common stock, par value $0.0001 per share, outstanding: 8,024,419 shares at October 31, 2019.2020.



21




WILLSCOT CORPORATION
Quarterly Report on Form 10-Q
Table of Contents

PART I Financial Information
2019


32



PART I
ITEM 1. Financial Statements
WillScot Corporation
Condensed Consolidated Balance Sheets
(in thousands, except share data)(in thousands, except share data)September 30, 2019 (unaudited)December 31, 2018(in thousands, except share data)June 30, 2020 (unaudited)December 31, 2019
(in thousands, except share data)June 30, 2020 (unaudited)December 31, 2019
AssetsAssetsAssets
Cash and cash equivalentsCash and cash equivalents$3,951  $8,958  Cash and cash equivalents$9,061  $3,045  
Trade receivables, net of allowances for doubtful accounts at September 30, 2019 and December 31, 2018 of $15,113 and $9,340, respectively250,488  206,502  
Restricted cashRestricted cash655,087  —  
Trade receivables, net of allowances for credit losses at June 30, 2020 and December 31, 2019 of $19,183 and $15,828, respectivelyTrade receivables, net of allowances for credit losses at June 30, 2020 and December 31, 2019 of $19,183 and $15,828, respectively231,007  247,596  
InventoriesInventories15,956  16,218  Inventories14,800  15,387  
Prepaid expenses and other current assetsPrepaid expenses and other current assets24,684  21,828  Prepaid expenses and other current assets21,392  14,621  
Assets held for saleAssets held for sale9,155  2,841  Assets held for sale9,332  11,939  
Total current assetsTotal current assets304,234  256,347  Total current assets940,679  292,588  
Rental equipment, netRental equipment, net1,952,829  1,929,290  Rental equipment, net1,908,299  1,944,436  
Property, plant and equipment, netProperty, plant and equipment, net186,956  183,750  Property, plant and equipment, net142,454  147,689  
Operating lease assetsOperating lease assets146,721  146,698  
GoodwillGoodwill234,597  247,017  Goodwill233,829  235,177  
Intangible assets, netIntangible assets, net128,103  131,801  Intangible assets, net126,125  126,625  
Other non-current assetsOther non-current assets4,641  4,280  Other non-current assets3,433  4,436  
Total long-term assetsTotal long-term assets2,507,126  2,496,138  Total long-term assets2,560,861  2,605,061  
Total assetsTotal assets$2,811,360  $2,752,485  Total assets$3,501,540  $2,897,649  
Liabilities and equityLiabilities and equityLiabilities and equity
Accounts payableAccounts payable$101,532  $90,353  Accounts payable$87,847  $109,926  
Accrued liabilitiesAccrued liabilities96,395  84,696  Accrued liabilities101,212  82,355  
Accrued interestAccrued interest13,386  20,237  Accrued interest16,772  16,020  
Deferred revenue and customer depositsDeferred revenue and customer deposits87,702  71,778  Deferred revenue and customer deposits89,258  82,978  
Current portion of long-term debtCurrent portion of long-term debt2,025  1,959  Current portion of long-term debt265,398  —  
Operating lease liabilities - currentOperating lease liabilities - current30,438  29,133  
Total current liabilitiesTotal current liabilities301,040  269,023  Total current liabilities590,925  320,412  
Long-term debtLong-term debt1,710,160  1,674,540  Long-term debt1,971,010  1,632,589  
Deferred tax liabilitiesDeferred tax liabilities67,583  67,384  Deferred tax liabilities69,044  70,693  
Deferred revenue and customer depositsDeferred revenue and customer deposits11,265  7,723  Deferred revenue and customer deposits12,284  12,342  
Operating lease liabilities - non-currentOperating lease liabilities - non-current117,159  118,429  
Other non-current liabilitiesOther non-current liabilities37,373  31,618  Other non-current liabilities36,028  34,229  
Long-term liabilitiesLong-term liabilities1,826,381  1,781,265  Long-term liabilities2,205,525  1,868,282  
Total liabilitiesTotal liabilities2,127,421  2,050,288  Total liabilities2,796,450  2,188,694  
Commitments and contingencies (see Note 15)Commitments and contingencies (see Note 15)Commitments and contingencies (see Note 15)
Class A common stock: $0.0001 par, 400,000,000 shares authorized at September 30, 2019 and December 31, 2018; 108,751,354 and 108,508,997 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively11  11  
Class B common stock: $0.0001 par, 100,000,000 shares authorized at September 30, 2019 and December 31, 2018; 8,024,419 shares issued and outstanding at September 30, 2019 and December 31, 2018
  
Class A common stock: $0.0001 par, 400,000,000 shares authorized at June 30, 2020 and December 31, 2019; 121,233,232 and 108,818,854 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectivelyClass A common stock: $0.0001 par, 400,000,000 shares authorized at June 30, 2020 and December 31, 2019; 121,233,232 and 108,818,854 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively12  11  
Class B common stock: 0 shares authorized or outstanding at June 30, 2020 and $0.0001 par, 100,000,000 shares authorized at December 31, 2019; 8,024,419 shares issued and outstanding at December 31, 2019Class B common stock: 0 shares authorized or outstanding at June 30, 2020 and $0.0001 par, 100,000,000 shares authorized at December 31, 2019; 8,024,419 shares issued and outstanding at December 31, 2019—   
Additional paid-in-capitalAdditional paid-in-capital2,394,091  2,389,548  Additional paid-in-capital2,471,312  2,396,501  
Accumulated other comprehensive lossAccumulated other comprehensive loss(68,908) (68,026) Accumulated other comprehensive loss(84,807) (62,775) 
Accumulated deficitAccumulated deficit(1,703,699) (1,683,319) Accumulated deficit(1,681,427) (1,689,373) 
Total shareholders' equityTotal shareholders' equity621,496  638,215  Total shareholders' equity705,090  644,365  
Non-controlling interestNon-controlling interest62,443  63,982  Non-controlling interest—  64,590  
Total equityTotal equity683,939  702,197  Total equity705,090  708,955  
Total liabilities and equityTotal liabilities and equity$2,811,360  $2,752,485  Total liabilities and equity$3,501,540  $2,897,649  
See the accompanying notes which are an integral part of these condensed consolidated financial statements.
43



WillScot Corporation
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended September 30,Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands, except share and per share data)(in thousands, except share and per share data)2019201820192018(in thousands, except share and per share data)2020201920202019
Revenues:Revenues:Revenues:
Leasing and services revenue:Leasing and services revenue:Leasing and services revenue:
Modular leasingModular leasing$191,294  $141,660  $557,025  $340,171  Modular leasing$190,143  $185,818  $378,495  $363,110  
Modular delivery and installationModular delivery and installation61,883  46,777  168,643  104,440  Modular delivery and installation51,640  55,966  102,710  105,966  
Sales revenue:Sales revenue:Sales revenue:
New unitsNew units11,536  20,920  38,064  33,584  New units9,763  11,507  19,376  26,348  
Rental unitsRental units7,627  9,567  29,741  15,813  Rental units5,316  10,422  12,102  21,974  
Total revenuesTotal revenues272,340  218,924  793,473  494,008  Total revenues256,862  263,713  512,683  517,398  
Costs:Costs:Costs:
Costs of leasing and services:Costs of leasing and services:Costs of leasing and services:
Modular leasingModular leasing58,168  39,215  160,476  93,506  Modular leasing47,747  55,073  97,556  102,308  
Modular delivery and installationModular delivery and installation54,364  42,390  146,175  98,038  Modular delivery and installation43,523  48,468  87,388  91,811  
Costs of sales:Costs of sales:Costs of sales:
New unitsNew units7,421  15,089  26,298  23,780  New units6,331  7,999  12,534  18,877  
Rental unitsRental units5,092  5,750  19,608  9,328  Rental units3,803  6,721  7,609  14,516  
Depreciation of rental equipmentDepreciation of rental equipment43,869  35,534  128,940  82,849  Depreciation of rental equipment45,494  43,968  91,442  85,071  
Gross profit103,426  80,946  311,976  186,507  
Gross ProfitGross Profit109,964  101,484  216,154  204,815  
Expenses:Expenses:Expenses:
Selling, general and administrativeSelling, general and administrative68,159  71,897  213,267  164,845  Selling, general and administrative65,272  70,385  140,240  143,704  
Other depreciation and amortizationOther depreciation and amortization3,707  3,720  9,878  7,726  Other depreciation and amortization2,883  2,949  5,957  5,733  
Impairment losses on long-lived assetsImpairment losses on long-lived assets—  —  5,076  —  Impairment losses on long-lived assets—  348  —  2,638  
Lease impairment expense and other related chargesLease impairment expense and other related charges1,394  1,520  3,055  4,605  
Restructuring costsRestructuring costs1,980  6,137  9,083  7,214  Restructuring costs749  1,632  689  3,288  
Currency losses (gains), netCurrency losses (gains), net234  (425) (436) 1,171  Currency losses (gains), net(380) (354) 518  (670) 
Other income, netOther income, net(1,053) (594) (3,293) (5,013) Other income, net(1,021) (1,290) (745) (2,241) 
Operating incomeOperating income30,399  211  78,401  10,564  Operating income41,067  26,294  66,440  47,758  
Interest expenseInterest expense30,857  43,447  95,353  67,321  Interest expense28,519  31,668  56,776  62,783  
Loss on extinguishment of debtLoss on extinguishment of debt—  —  7,244  —  Loss on extinguishment of debt—  7,244  —  7,244  
Loss from operations before income tax(458) (43,236) (24,196) (56,757) 
Income tax benefit(1,220) (6,507) (2,022) (13,572) 
Net income (loss)762  (36,729) (22,174) (43,185) 
Net income (loss) attributable to non-controlling interest, net of tax273  (3,210) (1,449) (3,715) 
Net income (loss) attributable to WillScot$489  $(33,519) $(20,725) $(39,470) 
Income (loss) from operations before income taxIncome (loss) from operations before income tax12,548  (12,618) 9,664  (22,269) 
Income tax (benefit) expenseIncome tax (benefit) expense(285) (1,180) 505  (802) 
Net Income (loss)Net Income (loss)12,833  (11,438) 9,159  (21,467) 
Net Income (loss) attributable to non-controlling interest, net of taxNet Income (loss) attributable to non-controlling interest, net of tax1,343  (832) 1,213  (1,590) 
Net Income (loss) attributable to WillScotNet Income (loss) attributable to WillScot$11,490  $(10,606) $7,946  $(19,877) 
Net income (loss) per share attributable to WillScot - basic$0.00  $(0.37) $(0.19) $(0.48) 
Net income (loss) per share attributable to WillScot - diluted0.00  (0.37) (0.19) (0.48) 
Weighted average shares - basic108,720,857  90,726,920  108,646,741  82,165,909  
Weighted average shares - diluted112,043,866  90,726,920  108,646,741  82,165,909  
Earnings (loss) per share attributable to WillScotEarnings (loss) per share attributable to WillScot
BasicBasic$0.10  $(0.10) $0.07  $(0.18) 
DilutedDiluted$0.10  $(0.10) $0.07  $(0.18) 
Weighted average shares:Weighted average shares:
BasicBasic110,692,426  108,693,924  110,174,536  108,609,068  
DilutedDiluted111,432,963  108,693,924  112,209,212  108,609,068  
See the accompanying notes which are an integral part of these condensed consolidated financial statements.
54



WillScot Corporation
Condensed Consolidated Statements of Comprehensive Loss Income (Loss)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended September 30,
(in thousands)2019201820192018
Net income (loss)$762  $(36,729) $(22,174) $(43,185) 
Other comprehensive (loss) income:
Foreign currency translation adjustment, net of income tax expense (benefit) of $0, $80, $0 and $(161) for the three and nine months ended September 30, 2019 and 2018, respectively(2,799) 2,298  

5,616  (82) 
Net loss on derivatives, net of income tax benefit of $153, $0, $2,016 and $0 for the three and nine months ended September 30, 2019 and 2018, respectively(500) —  (6,588) —  
Comprehensive loss(2,537) (34,431) (23,146) (43,267) 
Comprehensive loss attributable to non-controlling interest(28) (2,967) 

(1,539) (3,741) 
Total comprehensive loss attributable to WillScot$(2,509) $(31,464) $(21,607) $(39,526) 
Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands)2020201920202019
Net income (loss)$12,833  $(11,438) $9,159  $(21,467) 
Other comprehensive income (loss):
Foreign currency translation adjustment, net of income tax expense of $0 for the three and six months ended June 30, 2020 and 20197,982  4,321  

(13,162) 8,436  
Net gain (loss) on derivatives, net of income tax benefit of $0, $1,190 for the three months ended June 30, 2020 and 2019, respectively and $0, and $1,863 for the six months ended June 30, 2020 and 2019, respectively975  (3,887) (7,783) (6,088) 
Comprehensive income (loss)21,790  (11,004) (11,786) (19,119) 
Comprehensive income (loss) attributable to non-controlling interest2,161  (786) 

(672) (1,378) 
Total comprehensive income (loss) attributable to WillScot$19,629  $(10,218) $(11,114) $(17,741) 
See the accompanying notes which are an integral part of these condensed consolidated financial statements.
65



WillScot Corporation
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
Nine Months Ended September 30, 2019
Class A Common Stock  Class B Common Stock  Additional Paid-in-Capital  Accumulated Other Comprehensive Income  Accumulated Deficit  Total Shareholders' Equity  Non-Controlling Interest  Total Equity  
(in thousands)Shares  Amount  Shares  Amount  
Balance at December 31, 2018108,509  $11  8,024  $ $2,389,548  $(68,026) $(1,683,319) $638,215  $63,982  $702,197  
Net loss—  —  —  —  —  —  (10,301) (10,301) (860) (11,161) 
Other comprehensive income—  —  —  —  —  1,748  —  1,748  166  1,914  
Adoption of ASC 606—  —  —  —  —  —  345  345  —  345  
Stock-based compensation184  —  —  —  636  —  —  636  —  636  
Balance at March 31, 2019108,693  11  8,024   2,390,184  (66,278) (1,693,275) 630,643  63,288  693,931  
Net loss—  —  —  —  —  —  (10,913) (10,913) (862) (11,775) 
Other comprehensive income—  —  —  —  —  368  —  368  45  413  
Stock-based compensation —  —  —  1,901  —  —  1,901  —  1,901  
Balance at June 30, 2019108,699  11  8,024   2,392,085  (65,910) (1,704,188) 621,999  62,471  684,470  
Net income—  —  —  —  —  —  489  489  273  762  
Other comprehensive loss—  —  —  —  —  (2,998) —  (2,998) (301) (3,299) 
Issuance of common stock from the exercise of options14  —  —  —  194  —  —  194  —  194  
Stock-based compensation and issuance of common stock from vesting38  —  —  —  1,812  —  —  1,812  —  1,812  
Balance at September 30, 2019108,751  $11  8,024  $ $2,394,091  $(68,908) $(1,703,699) $621,496  $62,443  $683,939  
Six Months Ended June 30, 2020
Class A Common StockClass B Common StockAdditional Paid-in-CapitalAccumulated Other Comprehensive LossAccumulated DeficitTotal Shareholders' EquityNon-Controlling InterestTotal Equity
(in thousands)SharesAmountSharesAmount
Balance at December 31, 2019108,819  $11  8,024  $ $2,396,501  $(62,775) $(1,689,373) $644,365  $64,590  $708,955  
Net loss—  —  —  —  —  —  (3,544) (3,544) (130) (3,674) 
Other comprehensive income—  —  —  —  —  (27,199) —  (27,199) (2,703) (29,902) 
Stock-based compensation239  —  —  —  1,114  —  —  1,114  —  1,114  
Common stock issued in warrant exercises and redemptions1,497  —  —  —  4,580  —  —  4,580  —  4,580  
Balance at March 31, 2020110,555  $11  8,024  $ $2,402,195  $(89,974) $(1,692,917) $619,316  $61,757  $681,073  
Net income—  —  —  —  —  —  11,490  11,490  1,343  12,833  
Other comprehensive income—  —  —  —  —  8,139  —  8,139  818  8,957  
Stock-based compensation—  —  —  —  2,227  —  —  2,227  —  2,227  
Sapphire Exchange - see Note 1010,641   (8,024) (1) 66,890  (2,972) —  63,918  (63,918) —  
Common stock issued in warrant exercises and redemptions37  —  —  —  —  —  —  —  —  —  
Balance at June 30, 2020121,233  $12  —  $—  $2,471,312  $(84,807) $(1,681,427) $705,090  $—  $705,090  

7



Nine Months Ended September 30, 2018
Class A Common Stock  Class B Common Stock  Additional Paid-in-Capital  Accumulated Other Comprehensive Income  Accumulated Deficit  Total Shareholders' Equity  Non-Controlling Interest  Total Equity  
(in thousands)Shares  Amount  Shares  Amount  
Balance at December 31, 201784,645  $ 8,024  $ $2,121,926  $(49,497) $(1,636,819) $435,619  $48,931  $484,550  
Net loss—  —  —  —  —  —  (6,187) (6,187) (648) (6,835) 
Other comprehensive income—  —  —  —  —  239  —  239  24  263  
Adoption of ASU 2018-02—  —  —  —  —  (2,540) 2,540  —  —  —  
Stock-based compensation—  —  —  —  121  —  —  121  —  121  
Balance at March 31, 201884,645   8,024   2,122,047  (51,798) (1,640,466) 429,792  48,307  478,099  
Net income—  —  —  —  —  —  236  236  143  379  
Other comprehensive loss—  —  —  —  —  (2,619) —  (2,619) (293) (2,912) 
Stock-based compensation—  —  —  —  1,054  —  —  1,054  —  1,054  
Balance at June 30, 201884,645   8,024   2,123,101  (54,417) (1,640,230) 428,463  48,157  476,620  
Net loss—  —  —  —  —  —  (33,519) (33,519) (3,210) (36,729) 
Other comprehensive income—  —  —  —  —  2,298  —  2,298  243  2,541  
Stock-based compensation—  —  —  —  1,050  —  —  1,050  —  1,050  
Issuance of common stock and contribution of proceeds to WSII9,200   —  —  131,544  —  —  131,545  7,574  139,119  
Acquisition of ModSpace and the related financing transactions including stock and warrants6,458   —  —  134,493  —  —  134,494  13,614  148,108  
Balance at September 30, 2018100,303  $10  8,024  $ $2,390,188  $(52,119) $(1,673,749) $664,331  $66,378  $730,709  
Six Months Ended June 30, 2019
Class A Common StockClass B Common StockAdditional Paid-in-CapitalAccumulated Other Comprehensive LossAccumulated DeficitTotal Shareholders' EquityNon-Controlling InterestTotal Equity
(in thousands)SharesAmountSharesAmount
Balance at December 31, 2018108,509  $11  8,024  $ $2,389,548  $(68,026) $(1,683,319) $638,215  $63,982  $702,197  
Net loss—  —  —  —  —  —  (9,271) (9,271) (758) (10,029) 
Other comprehensive income—  —  —  —  —  1,748  —  1,748  166  1,914  
Adoption of ASC 842—  —  —  —  —  —  4,723  4,723  503  5,226  
Adoption of ASC 606—  —  —  —  —  —  345  345  —  345  
Stock-based compensation184  —  —  —  636  —  —  636  —  636  
Balance at March 31, 2019108,693  $11  8,024  $ $2,390,184  $(66,278) $(1,687,522) $636,396  $63,893  $700,289  
Net loss—  —  —  —  —  —  (10,606) (10,606) (832) (11,438) 
Other comprehensive income—  —  —  —  —  388  —  388  46  434  
Stock-based compensation —  —  —  1,901  —  —  1,901  —  1,901  
Balance at June 30, 2019108,699  $11  8,024  $ $2,392,085  $(65,890) $(1,698,128) $628,079  $63,107  $691,186  

See the accompanying notes which are an integral part of these condensed consolidated financial statements.
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WillScot Corporation
Condensed Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended
September 30,
Six Months Ended
June 30,
(in thousands)(in thousands)20192018(in thousands)20202019
Operating activities:Operating activities:Operating activities:
Net loss$(22,174) $(43,185) 
Adjustments to reconcile net income to net cash provided by operating activities:
Net income (loss)Net income (loss)$9,159  $(21,467) 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortizationDepreciation and amortization140,712  91,587  Depreciation and amortization98,917  91,808  
Provision for doubtful accountsProvision for doubtful accounts11,817  5,436  Provision for doubtful accounts9,122  6,297  
Impairment losses on long-lived assetsImpairment losses on long-lived assets5,076  —  Impairment losses on long-lived assets—  2,638  
Impairment on right of use assetsImpairment on right of use assets57  2,439  
Gain on sale of rental equipment and other property, plant and equipmentGain on sale of rental equipment and other property, plant and equipment(8,553) (11,194) Gain on sale of rental equipment and other property, plant and equipment(4,366) (5,359) 
Amortization of debt discounts and debt issuance costsAmortization of debt discounts and debt issuance costs8,732  4,801  Amortization of debt discounts and debt issuance costs5,899  5,646  
Loss on extinguishment of debtLoss on extinguishment of debt7,244  —  Loss on extinguishment of debt—  7,244  
Stock-based compensation expenseStock-based compensation expense5,003  2,225  Stock-based compensation expense4,014  3,191  
Deferred income tax benefit(2,456) (14,340) 
Deferred income tax benefit (provision)Deferred income tax benefit (provision)608  (1,190) 
Unrealized currency (gains) lossesUnrealized currency (gains) losses(427) 773  Unrealized currency (gains) losses1,095  (624) 
Changes in operating assets and liabilities, net of effect of businesses acquired:
Changes in operating assets and liabilitiesChanges in operating assets and liabilities
Trade receivablesTrade receivables(64,385) (26,229) Trade receivables5,709  (44,492) 
InventoriesInventories284  (553) Inventories520  1,039  
Prepaid and other assetsPrepaid and other assets(1,734) 173  Prepaid and other assets(6,620) (784) 
Operating lease assets and liabilitiesOperating lease assets and liabilities(64) 935  
Accrued interestAccrued interest(6,851) 12,902  Accrued interest753  (4,092) 
Accounts payable and other accrued liabilitiesAccounts payable and other accrued liabilities7,324  (11,969) Accounts payable and other accrued liabilities(17,767) 3,126  
Deferred revenue and customer depositsDeferred revenue and customer deposits19,464  5,153  Deferred revenue and customer deposits6,691  13,699  
Net cash provided by operating activitiesNet cash provided by operating activities99,076  15,580  Net cash provided by operating activities113,727  60,054  
Investing activities:Investing activities:Investing activities:
Acquisition of a business - ModSpace—  (1,060,140) 
Acquisition of a business - Tyson—  (24,006) 
Proceeds from sale of rental equipmentProceeds from sale of rental equipment31,504  21,593  Proceeds from sale of rental equipment12,102  23,083  
Purchase of rental equipment and refurbishmentsPurchase of rental equipment and refurbishments(160,877) (111,505) Purchase of rental equipment and refurbishments(79,682) (113,088) 
Proceeds from the sale of property, plant and equipmentProceeds from the sale of property, plant and equipment13,199  681  Proceeds from the sale of property, plant and equipment3,843  8,891  
Purchase of property, plant and equipmentPurchase of property, plant and equipment(6,600) (3,091) Purchase of property, plant and equipment(3,186) (3,899) 
Net cash used in investing activitiesNet cash used in investing activities(122,774) (1,176,468) Net cash used in investing activities(66,923) (85,013) 
Financing activities:Financing activities:Financing activities:
Receipts from issuance of common stockReceipts from issuance of common stock194  147,200  Receipts from issuance of common stock4,580  —  
Receipts from borrowingsReceipts from borrowings489,207  1,184,601  Receipts from borrowings704,293  461,203  
Payment of financing costsPayment of financing costs(2,623) (34,770) Payment of financing costs(1,225) (2,686) 
Repayment of borrowingsRepayment of borrowings(461,162) (135,537) Repayment of borrowings(92,282) (430,260) 
Principal payments on capital lease obligations(83) (88) 
Withholding taxes paid on behalf of employees on net settled stock-based awards(654) —  
Payment of make-whole premium on Unsecured Notes redemption(6,252) —  
Other financing activitiesOther financing activities(673) (654) 
Payment of debt extinguishment premium costsPayment of debt extinguishment premium costs—  (6,252) 
Net cash provided by financing activitiesNet cash provided by financing activities18,627  1,161,406  Net cash provided by financing activities614,693  21,351  
Effect of exchange rate changes on cash and cash equivalentsEffect of exchange rate changes on cash and cash equivalents64  68  Effect of exchange rate changes on cash and cash equivalents(394) 140  
Net change in cash and cash equivalents(5,007) 586  
Cash and cash equivalents at the beginning of the period8,958  9,185  
Cash and cash equivalents at the end of the period$3,951  $9,771  
Net change in cash, cash equivalents, and restricted cashNet change in cash, cash equivalents, and restricted cash661,103  (3,468) 
Cash, cash equivalents, and restricted cash at the beginning of the periodCash, cash equivalents, and restricted cash at the beginning of the period3,045  8,958  
Cash, cash equivalents, and restricted cash at the end of the periodCash, cash equivalents, and restricted cash at the end of the period$664,148  $5,490  
Supplemental cash flow information:Supplemental cash flow information:Supplemental cash flow information:
Interest paidInterest paid$94,908  $28,721  Interest paid$46,058  $63,502  
Income taxes paid, net$547  $2,339  
Income taxes (refunded) paid, netIncome taxes (refunded) paid, net$(22) $355  
Capital expenditures accrued or payableCapital expenditures accrued or payable$26,444  $17,478  Capital expenditures accrued or payable$18,742  $24,348  

See the accompanying notes which are an integral part of these condensed consolidated financial statements.
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WillScot Corporation
Notes to the Condensed Consolidated Financial Statements (Unaudited)
NOTE 1 - Summary of Significant Accounting Policies
Organization and Nature of Operations
WillScot Corporation (“WillScot” and, together with its subsidiaries, the “Company”) is a leading provider of modular space and portable storage solutions in the United States (“US”), Canada and Mexico. The Company leases, sells, delivers and installs mobile offices, modular buildings and storage products through an integrated network of branch locations that spans North America.
WillScot, whose Class A common shares are listed on the Nasdaq Capital Market (Nasdaq: WSC), serves as the holding company for the Williams Scotsman family of companies. All of the Company’s assets and operations are owned through Williams Scotsman Holdings Corp. (“WS Holdings”). WillScot operates and owns 91.0% of WS Holdings, and Sapphire Holding S.à r.l. (“Sapphire”), an affiliate of TDR Capital LLP (“TDR Capital”), owns the remaining 9.0%.
WillScot was incorporated as a Cayman Islands exempt company under the nameOn November 29, 2017, Double Eagle Acquisition Corporation ("Double Eagle") on June 26, 2015. Prior to November 29, 2017, Double Eagle was a Nasdaq-listed special purpose acquisition company formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination. On November 29, 2017, Double Eagle indirectly acquired Williams Scotsman International, Inc. (“WSII”) from Algeco Scotsman Global S.à r.l. (together with its subsidiaries, the “Algeco Group”), which iswas majority owned by an investment fund managed by TDR Capital.Capital LLP ("TDR Capital"). As part of the transaction, (the “Business Combination”), Double Eagle domesticated to Delaware and changed its name to WillScot Corporation.
Immediately following the Merger with Mobile Mini Inc. as defined and discussed in Note 2 – Acquisitions and Relating Financing Transactions, on July 1, 2020, WillScot changed its name to “WillScot Mobile Mini Holdings Corp.” (“WillScot Mobile Mini”) and filed an amended and restated certificate of incorporation, which reclassified all outstanding shares of the Class A common stock and converted such shares into shares of common stock, par value $0.0001 per share, of WillScot Mobile Mini (the “Common Stock”). On June 30, 2020, TDR Capital exercised its right to exchange its shares in Williams Scotsman Holding Corp ("Holdings") for 10.6 million of Class A common stock at which point the Company's Class B common stock were automatically canceled. The WillScot Class A common stock was listed on the Nasdaq Capital Market (Nasdaq: WSC) up until the Merger, and the Common Stock has been listed on the Nasdaq Capital Market (Nasdaq: WSC) since the Merger.
As the Merger closed after WillScot’s second quarter 2020, the preparation of financial statements in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) requires that our Condensed Consolidated Financial Statements and most of the disclosure in these Notes be presented on a historical basis, as of or for the three and six months ended June 30, 2020 or prior periods. Unless the context otherwise requires, the terms “Company” and “WillScot Mobile Mini” as used in these financial statements mean WillScot Corporation and its subsidiaries when referring to periods prior to July 1, 2020 (prior to the Merger) and to WillScot Mobile Mini Holdings Corp., when referring to periods on or after July 1, 2020 (after the Merger).

Basis of Presentation and Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Quarterly Report on Form 10-Q and do not include all the information and notes required by accounting principles generally accepted in the US (“GAAP”)GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements comprise the financial statements of WillScot 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, necessary to present fairly the financial position, the results of operations and cash flows for the interim periods presented.
The results of operationsOn December 31, 2019, the 2019 financial statement amounts were adjusted for the threeadoption Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) ("ASC 842"), effective retroactively to January 1, 2019, and nine months ended September 30, 2019 aretherefore may not necessarily indicative ofagree to the results to be expectedQuarterly Reports filed on Form 10-Q for the full year. For further information, refer to the consolidated financial statements and notes included in WillScot's Annual Report on Form 10-K for the year ended December 31, 2018.respective periods of 2019.
Principles of Consolidation
The unaudited condensed consolidated financial statements comprise the financial statements of WillScot and its subsidiaries that it controls due to ownership of a majority voting interest. Subsidiaries are fully consolidated from the datedate 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 six months ended June 30, 2020 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 WillScot's Annual Report on Form 10-K for the year ended December 31, 2019.
Recently Issued and Adopted Accounting Standards
The Company qualifies as an emerging growth company (“EGC”) as defined under the Jumpstart Our Business Startups Act (the “JOBS Act”). Using exemptions provided under the JOBS Act provided to EGCs, the Company has elected to defer compliance with new or revised financial accounting standards until it is required to comply with such standards. WillScot will be deemed to be a large accelerated filer, and cease to qualify as an EGC, as of December 31, 2019.
Recently Issued Accounting Standards
In June 2016,March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, Reference Rate Reform (Topic 848), which is elective, and provides for optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The Company is currently evaluating the impact of reference rate reform and potential impact of adoption of these elective practical expedients on its condensed consolidated financial statements and will consider the impact of adoption during its analysis.
Recently Adopted Accounting Standards Update (“ASU”)
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326)("ASC 326"), which prescribes that financial assets (or a group of financial assets) should be measured at amortized cost basis to be presented at the net amount expected to be collected.collected based on relevant historical information from historical experience, adjusted for current conditions and reasonable and supportable forecasts that affect collectability. Credit losses relating to these financial
8



assets should beare recorded through an allowance for credit losses. The new standard is effective for the Company for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. The Company continues to evaluate the impacts of adopting the standard on the financial statements and will adopt the standardadopted ASC 326 effective January 1, 2020. The effect of this guidance was immaterial to the Company's consolidated results of operations, financial position and cash flows.
In February 2016,Impact of COVID-19
On January 30, 2020, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASC 842")World Health Organization declared an outbreak of a highly contagious form of an upper respiratory infection caused by COVID-19, a novel coronavirus strain commonly referred to as “coronavirus”. This guidance revises existing practice relatedThe Company was deemed an essential infrastructure business and has continued to accounting for leases under ASC Topic 840, Leases (“ASC 840”) for both lesseessupply its customers.
There have been significant changes to the global economic situation and lessors. The new guidance establishesto public securities markets as a right-of-use (“ROU”) modelconsequence of the COVID-19 pandemic. If these conditions persist, it is reasonably likely that requiresthis could cause changes to estimates as a lesseeresult of the markets in which the Company operates, the price of the Company’s publicly traded equity and debt in comparison to record a ROU asset and lease liability on the balance sheet for all leases with terms longer than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This guidance also expands the requirements for lessees to record leases embedded in other arrangementsCompany’s carrying value, and the required quantitative and qualitative disclosures surrounding leases. Accounting guidance for lessors is largely unchanged. This guidance is effective for non-public entities for fiscal years beginning after December 15, 2019 and interim periods within those annual periods using a modified retrospective transition approach. Early adoption is permitted for all entities. However, based on WillScot's expectation that it will cease to be an EGC as of December 31, 2019, the Company will adopt the new standard in the fourth quarter of 2019 with
10



a retroactive adoption to January 1, 2019.
The Company plans to take advantagehealth of the transition package of practical expedients permitted within ASC 842 which allowsglobal economy. Such changes to estimates could potentially result in impacts that would be material to the Company notconsolidated financial statements, particularly with respect to reassess (i) whether any expired or existing lease contracts are or contain leases, (ii) the historical lease classification for any expired or existing leases and (iii) initial direct costs for any existing leases. Upon adoption, the Company currently expects to record ROU assets between $135.0 million and $145.0 million, and operating lease liabilities between $135.0 million and $145.0 million, as of January 1, 2019, primarily related to its real estate and equipment leases.In connection with the adoption of ASC 842, the Company will also reverse the previous accounting for certain sale-leaseback transactions (as discussed in Note 8), and reduce property, plant and equipment by $31.0 million, reduce outstanding debt by $36.0 million and increase January 1, 2019 equity by $5.0 million.
Additionally, as discussed in Note 3, the Company's equipment rental revenues will be accounted for under the current lease accounting standard, ASC 840, until the adoptionfair value of the new lease accounting standard ASC 842. There may be changesCompany’s reporting units in relation to potential goodwill impairment, the timingfair value of recognition underlong-lived assets in relation to potential impairment and the new standard, but the Company does not anticipate a significant change to modular leasing revenue at adoption.allowance for doubtful accounts.

NOTE 2 - Acquisitions and Assets Held for SaleRelated Financing Transactions
ModSpace AcquisitionMobile Mini Merger
On August 15, 2018,March 1, 2020, the Company, acquired Modular Space Holdings,along with its newly formed subsidiary, Picasso Merger Sub, Inc. ("ModSpace"(“Merger Sub”), a privately-owned national providerentered into an Agreement and Plan of office trailers, portable storage units and modular buildings.Merger (the “Merger Agreement”) with Mobile Mini, Inc. (“Mobile Mini”), the (“Merger”). The acquisition was consummated by merging a special purpose subsidiaryclosing of the CompanyMerger was completed on July 1, 2020 and Merger Sub merged with and into ModSpace, with ModSpaceMobile Mini and the separate corporate existence of Merger Sub ceased and Mobile Mini continued its existence, as the surviving corporation in the merger asMerger and a wholly-owned subsidiary of WSII.WillScot.
Purchase Price
The aggregate purchase price for ModSpace was $1.2 billionUpon completion of the Merger, each issued and consistedoutstanding share of (i) $1.1 billion in cash, (ii) 6,458,229 shares of WillScot's Class AMobile Mini common stock, (the "Stock Consideration") with a fair marketpar value of $95.8 million and (iii) warrants$0.01 per share, converted to purchase an aggregate of 10,000,000the right to receive 2.4050 shares of WillScot’s Class A common stock, at an exercisepar value $0.0001 per share, and cash in lieu of any fractional shares.
Approximately 106 million shares of Common Stock were issued to Mobile Mini shareholders following the completion of the Merger and as of July 31, 2020 the Company had 227,721,220 of Common Stock. The trading price of $15.50Common Stock was $12.53 per share (the "2018 Warrants") with aon the closing date. In addition, Mobile Mini stock options converted into WillScot Mobile Mini stock options. The preliminary purchase price is estimated at $1.4 billion subject to adjustment pending the finalization of preliminary valuation estimates.
The Merger will be accounted for using the acquisition method of accounting, and WillScot will be treated as the accounting acquirer. Under the acquisition method of accounting, we are required to assign the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their fair market valuevalues at the closing date. The excess of $52.3the purchase price over those fair values will be recorded as goodwill.
The Company expensed $1.6 million and (iv)$11.0 million in transaction costs related to the Merger within selling, general and administrative ("SG&A") for the three and six months ended June 30, 2020, respectively. The Company expects to expense within SG&A approximately $51 million in transaction expenses related to the Merger in the third quarter of 2020.

Restricted Cash and 2025 Secured Notes

In anticipation of the Merger, on June 15, 2020, Picasso Finance Sub, Inc., a working capital adjustmentnewly-formed indirect finance subsidiary (the “Finance Sub”) of $4.7 million.
The acquisition was funded by the net proceedsCompany, completed a private offering of WillScot's issuance of 9,200,000 shares of Class A common stock, the net proceeds of WSII’s issuance of $300.0$650.0 million in aggregate principal amount of its 6.125% senior secured notes due 2025 (the “2025 Secured Notes”). The 2025 secured notes contained provisions requiring repayment without penalty, in the event the Merger was not consummated.The offering proceeds from the 2025 Secured Notes of $650.0 million and $200.0$5.1 million of interest due through August 1, 2020 were deposited into an escrow account, pending the closing of the Merger. In connection with completion of the Merger on July 1, 2020, the offering proceeds were released and the proceeds were utilized to repay the 2022 Secured Notes (see Note 9 – Debt), repay Mobile Mini secured notes and pay certain fees and expenses related to the Merger and financing transactions. In addition, Finance Sub was merged into WSII on July 1, 2020. At June 30, 2020 the $655.1 million in senior unsecured notes (see Note 8), and borrowings under the ABL Facility (see Note 8).
As of the date of acquisition, August 15, 2018, the fair market values of the Stock Consideration and 2018 Warrants were $14.83 per share and $5.23 per warrant, respectively, with the warrant values determined using a Black-Scholes valuation model. The fair market value of the Class A shares was determined utilizing the $15.78 per share closing price of the Company's shares on August 15, 2018, discounted by 6.0%, to reflect a lack of marketability basedescrow account is reported as restricted cash on the lock-up restrictions contemplated by the merger agreement.
The estimated fair values of the Stock Consideration and 2018 Warrants are Level 3 fair value measurements. The fair value of each share and warrant was estimated using the Black-Scholes model with the following assumptions: expected dividend yield, expected stock price volatility, weighted average risk-free interest rate, the average expected term of the lock up period on the shares, and the weighted average expected term of the warrants. The volatility assumption used in the Black-Scholes model is derived from the historical daily change in the market price of the Company's common stock, as well as the historical daily changes in the market price of its peer group, based on weighting, as determined by the Company, and over a time period equivalent to the lock-up restriction (for the shares) and the warrant term. The risk-free interest rate used in the Black-Scholes model is based on the implied US Treasury bill yield curve at the date of grant with a remaining term equal to the Company’s expected term assumption. The Company has never declared or paid a cash dividend on common shares. The following table summarizes the key inputs utilized to determine the fair value of the Stock Consideration and 2018 Warrants included within the purchase price of ModSpace.
Stock Consideration fair value inputs2018 Warrants fair value inputs
Expected volatility28.6 %35.0 %
Risk-free rate of interest2.2 %2.7 %
Dividend yield— %— %
Expected life (years)0.54.3
condensed consolidated balance sheet.

New ABL Facility

On July 1, 2020, in connection with the completion of the Merger, Williams Scotsman Holdings Corp. (“Holdings”), WSII, and certain of its subsidiaries, including Mobile Mini and certain of its consolidated subsidiaries (the “Mobile Mini Entities”), entered into a new asset-based credit agreement, that provides 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
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Opening Balance Sheet
The purchase priceaggregate principal amount of ModSpace was assigned to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition, August 15, 2018. The Company estimated the fair values based on independent valuations, discounted cash flow analyses, quoted market prices, contributory asset charges, and estimates made by management. The Company completed the final assignment of the fair value of the ModSpace acquisition, including the final assignment of goodwill to the Company's reporting units as of August 15, 2019. The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date, August 15, 2018 and the adjustments made to these balances during the period ended September 30, 2019.
(in thousands)December 31, 2018AdjustmentsAugust 15, 2019
Trade receivables, net (a)$81,320  $(8,175) $73,145  
Prepaid expenses and other current assets17,342  965  18,307  
Inventories4,757  —  4,757  
Rental equipment853,986  (1,210) 852,776  
Property, plant and equipment (b)110,413  27,248  137,661  
Intangible assets:
Favorable leases (c)3,976  —  3,976  
Trade name (c)3,000  —  3,000  
Deferred tax assets, net1,855  (1,855) —  
Total identifiable assets acquired$1,076,649  $16,973  $1,093,622  
Accrued liabilities$31,551  $1,936  $33,487  
Accounts payable37,678  421  38,099  
Deferred revenue and customer deposits15,938  —  15,938  
Deferred tax liabilities—  1,154  1,154  
Total liabilities assumed$85,167  $3,511  $88,678  
Total goodwill (d)$215,764  $(13,462) $202,302  
(a) As of the acquisition date, the fair value of accounts receivable was $73.1 million and the gross contractual amount was $89.0 million. The Company analyzed information available at the time of acquisition in estimating uncollectible receivables and the fair value of remaining receivables. The Company's analysis, as of the acquisition date, included an assessment of the risk of collectability of receivables by analyzing historical payment trends, the status of collection efforts, and any other pertinent customer specific information that existed as of the acquisition date.
(b) Upon completion of the valuation analysis, the Company recorded a net increase in property, plant and equipment of $27.2 million related to the finalization of our acquired land valuations. The fair value of acquired land was determined using valuations from third party specialists which were based on sales prices for comparable assets at the date of acquisition.
(c) The trade name has an estimated useful life of 3 years. The favorable lease assets have an estimated useful life equivalent to the term of the lease.
(d) The goodwill is reflective of ModSpace’s going concern value and operational synergies that the Company expects to achieve that would not be$2 billion (the “US Facility”), available to other market participants. The goodwill presented onWSII and certain of its subsidiaries (collectively, the balance sheet is not deductible for income tax purposes. The goodwill is assigned“US Borrowers”), and (ii) a $400 million senior secured asset-based multicurrency revolving credit facility together with the US Facility, the “New ABL Facility”), available to be drawn in US Dollars, Canadian Dollars, British Pounds Sterling or Euros by the Modular – US Borrowers, and Modular – Other North America segments, definedcertain of WSII’s and Mobile Mini’s wholly-owned subsidiaries organized in Note 16,Canada and in the amounts of $171.3 million and $31.0 million, respectively.

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Pro Forma Information  
The pro forma information below has been prepared using the purchase method of accounting, giving effect to the ModSpace acquisition as if it had been completed on JanuaryUnited Kingdom. On July 1, 2018. The pro forma information is not necessarily indicative of the Company’s results of operations had the acquisition been completed on the above date, nor is it necessarily indicative of the Company’s future results. The pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the acquisition and also does not reflect additional revenue opportunities following the acquisition. The tables below present unaudited pro forma consolidated statements of operations information as if ModSpace had been included in the Company’s consolidated results for the nine months ended September 30, 2018:
(in thousands)Nine Months Ended September 30, 2018
WillScot revenues$494,008 
ModSpace revenues312,609 
Pro forma revenues$806,617 
WillScot loss from operations before income tax$(56,757)
ModSpace loss from operations before income tax(7,456)
Loss from operations before income tax before pro forma adjustments(64,213)
Pro forma adjustments to combined loss from operations before income tax:
Impact of fair value adjustments/useful life changes on depreciation (a)(10,331)
Intangible asset amortization (b)(750)
Interest expense (c)(49,467)
Elimination of ModSpace interest (d)20,279 
Pro forma loss from operations before income tax (e)(104,482)
Income tax benefit (f)(24,971)
Pro forma net loss$(79,511)
(a) Depreciation of rental equipment and non-rental depreciation were adjusted for the fair value adjustments of equipment acquired in the ModSpace acquisition. The useful lives assigned did not change significantly from the useful lives used by ModSpace.
(b) Amortization of the trade name acquired in ModSpace acquisition.
(c) In connection with the ModSpace acquisition, the Company drew an incremental $419.0 million on the ABL Facility, as defined in Note 8, and issued $300.0 million of secured notes and $200.0 million of unsecured notes. The weighted average interest rate for the aforementioned borrowings was 6.54%. Interest expense includes amortization of related deferred financing fees on debt incurred in conjunction with ModSpace acquisition.
(d) Interest on ModSpace historical debt was eliminated.
(e) Pro forma loss from operations before income tax includes $7.2 million of restructuring expense, $14.9 million of integration costs, and $14.8 million of transaction costs incurred by WillScot for the nine months ended September 30, 2018. Additionally, pro forma loss from operations before income tax for the nine months ended September 30, 2018 also includes $20.5 million of interest expense associated with bridge financing fees incurred2020, in connection with the acquisitioncompletion of ModSpace.
(f) The pro forma tax rate appliedthe Merger, approximately $1.47 billion of proceeds from the New ABL Facility were used to finance the ModSpace loss from operations before income tax is the same asrepayment of both the WillScot effective rate forABL facility and the period.
TransactionMobile Mini ABL facility, as well as to pay fees and Integration Costs
The Company incurred $5.5 million and $23.9 million in integration costs within selling, general and administrative ("SG&A") expenses for the three and nine months ended September 30, 2019, respectively, related to the ModSpace acquisition. The Company incurred $7.5 millionMerger and $14.9the financing transactions, including $36 million in integration costs for the three and nine months ended September 30, 2018, respectively,fees related to the acquisitionsNew ABL Facility upfront fees which will be recorded as deferred financing costs in the third quarter of ModSpace, Acton Mobile Holdings LLC (“Acton”)2020. The New ABL Facility matures July 1 2025. Borrowings under the New ABL Facility will initially bear interest at (i) in the case of US Dollars, at WSII’s option, either an adjusted LIBOR rate plus 1.875% or an alternative base rate plus 0.875%, (ii) in the case of Canadian Dollars, at WSII’s option, either a Canadian BA rate plus 1.875% or Canadian prime rate plus 0.875%, and Onsite Space LLC (d/b/a Tyson Onsite (“Tyson”)).
The Company incurred$10.7 million(iii) in the case of Euros and $14.8 million in transaction costs for both the three and nine months ended September 30, 2018 related to the ModSpace acquisition.
Assets Held for Sale
In connection with the integration of ModSpace, during the nine months ended September 30, 2019, the Company reclassified 8 branch facilities from property, plant and equipment to held for sale, in addition to the 3 held for sale properties that were recognized at December 31, 2018. During the nine months ended September 30, 2019,British Pounds Sterling, an impairment of $2.6 million was recorded related to these properties, and 7 of these properties were sold for net cash proceeds of $12.9 million.
The fair value of the assets held for sale was determined using valuations from third party brokers, which were based on current sales prices for comparable assets, a Level 2 measurement.
13adjusted LIBOR rate plus 1.875%.



NOTE 3 - Revenue
Adoption of ASU 2014-09Revenue Disaggregation
On January 1, 2019,Geographic Areas
The Company had total revenue in the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASC 606") as well as subsequent updates using the modified retrospective method applied to those contracts that were not completed as of January 1, 2019. Results for reporting periods beginning after January 1, 2019 are presented under the guidance required by ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historical accounting under ASC 605, Revenue Recognition ("ASC 605"). The implementation of ASC 606 did not have a material impact on the Company’s financial resultsfollowing geographic areas for the period ending Septemberthree and six months ended June 30 2019.as follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands)2020201920202019
US$237,613  $238,087  $472,941  $469,554  
Canada16,279  21,405  32,985  39,599  
Mexico2,970  4,221  6,757  8,245  
Total revenues$256,862  $263,713  $512,683  $517,398  
Major Product and Service Lines
The Company’s revenue by major product and service line for the three and six months ended June 30 was as follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
2020201920202019
(in thousands)TotalTotalTotalTotal
Modular space leasing revenue$132,377  $129,475  $263,775  $253,025  
Portable storage leasing revenue5,716  6,021  11,565  12,262  
VAPS(a)
42,421  39,669  83,423  77,061  
Other leasing-related revenue(b)
9,629  10,653  19,732  20,762  
Modular leasing revenue190,143  185,818  378,495  363,110  
Modular delivery and installation revenue51,640  55,966  102,710  105,966  
Total leasing and services revenue241,783  241,784  481,205  469,076  
New unit sales revenue9,763  11,507  19,376  26,348  
Rental unit sales revenue5,316  10,422  12,102  21,974  
Total revenues$256,862  $263,713  $512,683  $517,398  
(a) Includes $4.3 million and $4.1 million of value added products and services ("VAPS") service revenue for the three months ended June 30, 2020 and 2019, respectively and $8.3 million and $7.9 million of VAPS service revenue for the six months ended June 30 2020, and 2019, respectively.
Revenue Recognition Policy
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation(b) Primarily damage billings, delinquent payment charges, and recognized as revenue when, or as, the performance obligation is satisfied.other processing fees.
Modular Leasing and Services Revenue
The majority of revenue (69%(72% for both the three and ninesix months ended SeptemberJune 30, 20192020 an,d 69% and 63% and 67% forfor the three and ninesix months ended SeptemberJune 30, 2018, respectively2019) is generated by rental income subject to the guidance of ASC 840.842. The remaining revenue for 2019the three and 2018six months ended June 30, 2020 and 2019 is generated by performance obligations in contracts with customers for services or sale of units subject to the guidance in ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASC 606 or ASC 605.
Leasing Revenue (ASC 840)
Income from operating leases is recognized on a straight-line basis over the lease term. The Company's lease arrangements typically include multiple lease and non-lease components. Examples of lease components include, but are not limited to, the lease of modular space or portable storage units, and examples of non-lease components include, but are not limited to, the delivery, installation, maintenance, and removal services commonly provided in a bundled transaction with the lease components. Arrangement consideration is allocated between lease deliverables and non-lease components based on the relative estimated selling (leasing) price of each deliverable. Estimated selling (leasing) price of the lease deliverables is based upon the estimated stand-alone selling price of the related performance obligations using an adjusted market approach.
When leases and services are billed in advance, recognition of revenue is deferred until services are rendered. If equipment is returned prior to the contractually obligated period, the excess, if any, between the amount the customer is contractually required to pay over the cumulative amount of revenue recognized to date is recognized as incremental revenue upon return.
Rental equipment is leased primarily under operating leases and, from time to time, under sales-type lease arrangements. Operating lease minimum contractual terms generally range from 1 month to 60 months and averaged approximately 10 months across the Company's rental fleet for the nine months ended September 30, 2019606").
Services Revenue (ASC 606)
The Company generally has three non-lease service-related performance obligations in its contracts with customers:
DeliveryReceivables, Contract Assets and installation of the modular or portable storage unit;
Maintenance and other ad hoc services performed during the lease term; and
Removal services that occur at the end of the lease term.
Consideration is allocated to each of these performance obligations within the contract based upon their estimated relative standalone selling prices using the estimated cost plus margin approach. Revenue from these activities is recognized as the services are performed.
Sales Revenue (ASC 606)
Sales revenue is generated by the sale of new and used units. Revenue from the sale of new and used units is generally recognized at a point in time upon the transfer of control to the customer, which occurs when the unit is delivered and installed in accordance with the contract. Sales transactions constitute a single performance obligation.
Revenue Disaggregation
Geographic Areas
The Company had total revenue in the following geographic areas for the three and nine months ended September 30, 2019:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands)2019201820192018
US  $249,108  $199,771  $722,322  $450,874  
Canada19,309  14,351  58,982  31,196  
Mexico  3,923  4,802  12,169  11,938  
Total revenues$272,340  $218,924  $793,473  $494,008  
Liabilities
1410



Major Product and Service Lines
Rental equipment leasing is the Company’s core business, which significantly impacts the nature, timing, and uncertainty of the Company’s revenue and cash flows. This includes rental of both modular space and portable storage units along with value added products and services ("VAPS"), which include furniture, steps, ramps, basic appliances, internet connectivity devices, and other items used by customers in connection with the Company's products. Rental equipment leasing is complemented by new product 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.
The Company’s revenue by major product and service line for the three and nine months ended September 30 was as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2019201820192018
(in thousands)TotalTotalTotalTotal
Modular space leasing revenue$131,555  $98,793  $384,580  $235,652  
Portable storage leasing revenue6,033  5,402  18,295  15,169  
VAPS (a)40,944  28,469  118,005  68,478  
Other leasing-related revenue (b)12,762  8,996  36,145  20,872  
Modular leasing revenue191,294  141,660  557,025  340,171  
Modular delivery and installation revenue61,883  46,777  168,643  104,440  
Total leasing and services revenue253,177  188,437  725,668  444,611  
Sale of new units11,536  20,920  38,064  33,584  
Sale of rental units7,627  9,567  29,741  15,813  
Total revenues$272,340  $218,924  $793,473  $494,008  
(a) Includes $4.0 million and $3.0 million of VAPS service revenue for the three months ended September 30, 2019 and 2018, respectively, and $11.9 million and $7.9 million of VAPS service revenue for the nine months ended September 30, 2019 and 2018, respectively.
(b) Primarily damage billings, delinquent payment charges, and other processing fees.
Receivables, Contract Assets and Liabilities
As reflected above, approximately 69%72% of the Company's rental revenue is accounted for undergenerated by lease revenue subject to the guidance of ASC 840 for both the three and nine months ended September 30, 2019.842. The customers that are responsible for the remaining revenue that is accounted for under ASC 606 (and ASC 605 prior to 2019) are generally the same customers that rent the Company's equipment. The Company manages credit risk associated with its accounts receivables at the customer level. BecauseAs the same customers generate the revenues that are accounted for under both ASC 606 and ASC 840,842, the discussions below on credit risk and the Company's allowance for doubtful accounts address the Company'sits 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's top five customers with the largest open receivables balances represented 2.4% 4.7% of the total receivables balance as of SeptemberJune 30, 2019. The Company manages credit risk through credit approvals, credit limits, and other monitoring procedures.2020.
The Company's allowance for doubtful accounts reflects its estimate of the amount of receivables that it will be unable to collect based on specific customer risk and historical write-off experience. The Company's estimates reflect 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. During the three and nine months ended September 30, 2019, the Company recognized bad debt expenses of $5.5 million and $11.8 million, respectively, within SG&A in its condensed consolidated statements of income, which included amounts written-off and changes in its allowances for doubtful accounts. During the three and nine months ended September 30, 2018, the Company recognized bad debt expenses of $3.1 million and $5.4 million, respectively.
When customers are billed in advance, the Company defers recognition of revenue until the related services are performed, which generally occurs at the end of the contract. As of January 1,December 31, 2019, the Company had approximately $32.1$42.6 million of deferred revenue that relates to removal services for lease transactions and advance billings for sale transactions, which are within the scope of ASC 606. As of SeptemberJune 30, 2019,2020, the Company had approximately $46.3$47.1 million of deferred revenue relating to these services which are included in deferred revenue and customer deposits in the condensed consolidated balance sheets. During the ninethree months ended SeptemberJune 30, 2019, $8.22020, $9.2 million of previously deferred revenue relating to removal services for lease transactions and advance billings for sale transactions was recognized as revenue.
The Company does not have material contract assets and it did not recognize any material impairments of any contract assets.
15



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 exemption to omit disclosure of such amounts.services.
The primary costs to obtain contracts for new and rental unit sales with the Company's customers are commissions.commissions paid to our sales force. 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. Asyear, therefore the commissions are be expensed as incurred.
Credit Losses
The Company is exposed to credit losses from trade receivables generated through its leasing and sales business. The Company assesses each customer’s ability to pay for the products it sells by conducting a result,credit review. The credit review considers expected billing exposure and timing for payment and the customer’s established credit rating. The Company performs its credit review of new customers at inception of the customer relationship and for existing customers when the customer transacts new leases 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 Company uses a loss-rate method to assess for credit losses. The allowances for credit losses reflect the estimate of the amount of receivables that the Company has appliedwill be unable to collect based on historical write-off experience and, as applicable, current conditions and reasonable and supportable forecasts that affect collectability. This estimate could require change based on changing circumstances, including changes in the practical expedient for incremental costseconomy or in the particular circumstances of obtaining a sales contract and will expense commissions as incurred.
Other Matters
The Company's ASC 606 revenues do not include material amounts of variable consideration, other than the variability noted for services arrangements expected to be performed beyond a twelve month period.
The Company's payment terms vary by the type and location of its customer and the product or services offered. The time between invoicing and when payment is due is not significant. Whileindividual customers. Accordingly, the Company may bill certain customers in advance, its contracts do not contain a significant financing component based on the short length of time between upfront billings and the performance of contracted services. For certain products, services,be required to increase or customer types, the Company requires payment before the products or services are delivered to the customer.decrease our allowances.
Revenue is recognized net of taxes collected from customers, which are subsequently remitted to governmental authorities.
The most significant estimates and judgments relating to ASC 606 revenues involve the estimation of relative stand-alone selling prices for the purpose of allocating consideration to the performance obligations in the Company's lease transactions.
(in thousands)Six Months Ended
June 30, 2020
Year Ended December 31, 2019
Balance at beginning of year$15,828  $9,340  
Net charges to bad debt expense and revenue9,122  14,496  
Write-offs(5,573) (7,945) 
Foreign currency translation and other(194) (63) 
Balance at end of period$19,183  $15,828  

NOTE 4 - InventoriesLeases
Inventories atAs of June 30, 2020, the respective balance sheet dates consistedundiscounted future lease payments for operating lease liabilities were as follows:
11



(in thousands)
2020$19,748  
202136,770  
202230,487  
202324,353  
202419,141  
Thereafter53,540  
Total lease payments184,039  
Less: interest(36,442) 
Present value of lease liabilities$147,597  

The Company’s lease activity during the six months ended June 30, 2020 and 2019 was as follows:
Six Months Ended June 30,
Financial Statement Line (in thousands)
20202019
Operating Lease Expense
Fixed lease expense
Cost of leasing and services$3,074  $3,559  
Selling, general and administrative16,86616,820
Lease impairment expense and other related charges1,359533
Short-term lease expense
Cost of leasing and services13,60314,708
Selling, general and administrative8511,382
Lease impairment expense and other related charges466  —  
Variable lease expense
Cost of leasing and services3,6571,359
Selling, general and administrative2,1312,085
Lease impairment expense and other related charges511  —  
Total operating lease expense$42,518  $40,446  

The Company initiated certain restructuring plans associated with the ModSpace acquisition in order to capture operating synergies as a result of integrating ModSpace into WillScot. The restructuring activities primarily included the following:termination of leases for duplicative branches, equipment and corporate facilities. As part of these plans, certain of its leased locations were vacated and leases were terminated or impaired.
(in thousands)September 30, 2019December 31, 2018
Raw materials and consumables$15,956  $16,022  
Work in process—  196  
Total inventories$15,956  $16,218  
During the sixmonths ended June 30, 2020, the Company recorded $3.1 million in lease impairment expense and other related charges which is comprised of $0.8 million loss on lease exit and impairment charges and $2.3 million in closed location rent expense. During the six months ended June 30, 2019, the Company recorded $4.6 million in lease impairment expense and other related charges which is comprised of $2.4 million in right-of-use ("ROU") asset impairment on leased locations no longer used in operations, $1.7 million loss on lease exit and $0.5 million in closed location rent expense.
Supplemental cash flow information related to operating leases for the six months ended June 30, 2020 was as follows:
Six Months ended June 30,
Supplemental Cash Flow Information (in thousands)
20202019
Cash paid for the amounts included in the measurement of lease liabilities$20,271  $19,692  
Right of use assets obtained in exchange for lease obligations$19,242  $16,160  




12



Weighted-average remaining operating lease terms and the weighted average discount rates as of June 30, 2020 and December 31, 2019 were as follows:
Lease Terms and Discount RatesJune 30,
2020
December 31, 2019
Weighted-average remaining lease term 6.41 years6.51 years
Weighted-average discount rate6.9 %7.0 %
The Company presents information related to leasing revenues in Note 3.

NOTE 5 - Inventories
Inventories were comprised of raw materials and consumables of $14.8 million and $15.4 million at June 30, 2020 and December 31, 2019, respectively.

NOTE 56 - Rental Equipment, net
Rental equipment, net, at the respective balance sheet dates consisted of the following:
(in thousands)September 30, 2019December 31, 2018
Modular units and portable storage$2,430,505  $2,333,776  
Value added products115,762  90,526  
Total rental equipment2,546,267  2,424,302  
Less: accumulated depreciation(593,438) (495,012) 
Rental equipment, net$1,952,829  $1,929,290  
During the three and nine months ended September 30, 2019, the Company received $1.3 million and $2.4 million, respectively, in insurance proceeds related to assets damaged during Hurricane Harvey and Hurricane Irma. The insurance proceeds exceeded the book value of damaged assets, and the Company recorded gains of $0.4 million and $2.3 million which are reflected in other income, net, on the condensed consolidated statements of operations for three and nine months ended September 30, 2019, respectively.
During the three and nine months ended September 30, 2018, the Company received $0.0 million and $9.3 million, respectively, in insurance proceeds related to assets damaged during Hurricane Harvey. The insurance proceeds exceeded the book value of damaged assets, and the Company recorded gains of $0.0 million and $4.8 million which are reflected in other income, net, on the condensed consolidated statements of operations for three and nine months ended September 30, 2018, respectively.
16
(in thousands)June 30, 2020December 31, 2019
Modular units and portable storage$2,476,963  $2,455,471  
Value added products130,886  121,855  
Total rental equipment2,607,849  2,577,326  
Less: accumulated depreciation(699,550) (632,890) 
Rental equipment, net$1,908,299  $1,944,436  



NOTE 67 - Goodwill
Changes in the carrying amount of goodwill were as follows:
(in thousands)Modular – US
Modular – Other
North America
Total
Balance at January 1, 2018$28,609  $—  $28,609  
Acquisition of a business183,711  35,128  218,839  
Changes to preliminary purchase price accounting944  —  944  
Foreign currency translation—  (1,375) (1,375) 
Balance at December 31, 2018213,264  33,753  247,017  
Changes to preliminary purchase price accounting(9,331) (4,069) (13,400) 
Foreign currency translation—  980  980  
Balance at September 30, 2019$203,933  $30,664  $234,597  
(in thousands)Modular – USModular – Other
North America
Total
Balance at December 31, 2018$213,264  $33,753  $247,017  
Changes to preliminary purchase price accounting(9,331) (4,148) (13,479) 
Effects of movements in foreign exchange rates—  1,639  1,639  
Balance at December 31, 2019203,933  31,244  235,177  
Effects of movements in foreign exchange rates—  (1,348) (1,348) 
Balance at June 30, 2020$203,933  $29,896  $233,829  
As described in Note 2, the Company acquired ModSpace in August 2018. The acquisition of ModSpace resulted in the recognition of $171.3 million and $31.0 million of goodwill in the Modular - US segment and Modular - Other North America segments, as defined in Note 16.
Impairment Indicator Analysis
The Company had no0 goodwill impairment during the ninesix months ended SeptemberJune 30, 2019 and there were no indicators of impairment as of September 30, 2019. There were indicators of impairment as of2020 or the year ended December 31, 2018,2019.
The Company considered the economic environment resulting from the COVID-19 pandemic as detailed below.
In December 2018, there was a significant decline in the debt and equity capital markets, including the Company’s stock price, which constituted an indicatorpart of its review for indicators of potential impairment and reviewed qualitative information currently available in management's judgment. As a result,determining if it was more likely than not that the Company performed an interim goodwill impairment testfair values of the Company’s reporting units were less than the carrying amounts as of December 31, 2018. The interim impairment analysis determined that there was no impairmentJune 30, 2020.Based on the Company’s current long-term projections and the extent of goodwill for either the US or Canadian reporting units as of December 31, 2018. As of December 31, 2018, the US reporting unit continued to have a fair value in excess of carrying value of over 100%. The Canadian reporting unit was determined to have a fair value in excess of carrying value of lessat the Company's October 1, 2019 annual impairment test date, management concluded that it is not more likely than 1% as of December 31, 2018.
The fair value of the reporting units at December 31, 2018 was determined based on the income approach, which requires management to make certain estimates and judgments for estimates of economic and market information in the discounted cash flow analyses.
There are inherent uncertainties and judgments involved when determiningnot that the fair value of the Company's reporting units becausewere less than their carrying amount during the successthree and six months ended June 30, 2020 and there were no impairment indicators that would require an interim impairment test.
Due to the uncertain and rapidly evolving nature of the reporting unit depends onconditions surrounding the achievement of key assumptions developed by management including, but not limited to (i) achieving revenue growth through pricing, increased units on rent, increased penetration of VAPS, and other commercial strategies, (ii) efficient management of the Company's operations and the Company's fleet through maintenance and capital investment, and (iii) achieving margin expectations, including integration synergies with acquired companies.
In addition, some of the estimates and assumptions usedCOVID-19 pandemic, changes in determining fair value of the reporting units utilize inputs that are outside the control of management and are dependent on market and economic conditions, such as the discount rate, foreign currency rates, and growth rates. These assumptions are inherently uncertain and deterioration of market and economic conditions would adversely impact the Company's ability to meet its projected results and would affect the fair value of the reporting units.
Of the key assumptions that impact the goodwill impairment test, the expected future cash flows, discount rate and foreign exchange rates are among the most sensitive and are considered to be critical assumptions. If any one of the above inputs changes, it could reduce or increase the estimated fair value of the affected reporting unit. A reduction in the fair value of a reporting unit could result in an impairment charge up to the full amount of goodwill reported.
Although the Company believes that it has sufficient historical and projected information available to test for goodwill impairment, it is possible that actual results could differ from the estimates used in its impairment tests. As a result, the Company continues to monitor actual results versus forecast results and internal and external factors thatoutlook may impact the enterprise value of the reporting unit.change our long-term projections.


1713



NOTE 78 - Intangibles
Intangible assets other than goodwill at the respective balance sheet dates consisted of the following:
September 30, 2019June 30, 2020
(in thousands)(in thousands)Weighted average remaining life (in years)Gross carrying amountAccumulated amortizationNet book value(in thousands)Remaining life (in years)Gross carrying amountAccumulated amortizationNet book value
Intangible assets subject to amortization:Intangible assets subject to amortization:Intangible assets subject to amortization:
Favorable lease rights4.6$1,738  $(510) $1,228  
ModSpace trade nameModSpace trade name1.93,000  (1,125) 1,875  ModSpace trade name1.2$3,000  $(1,875) $1,125  
Total intangible assets subject to amortization4,738  (1,635) 3,103  
Indefinite-lived intangible assets:Indefinite-lived intangible assets:Indefinite-lived intangible assets:
Trade nameTrade name125,000  —  125,000  Trade name125,000  —  125,000  
Total intangible assets other than goodwillTotal intangible assets other than goodwill$129,738  $(1,635) $128,103  Total intangible assets other than goodwill$128,000  $(1,875) $126,125  

December 31, 2018December 31, 2019
(in thousands)(in thousands)Weighted average remaining life (in years)Gross carrying amountAccumulated amortizationNet book value(in thousands)Remaining life (in years)Gross carrying amountAccumulated amortizationNet book value
Intangible assets subject to amortization:Intangible assets subject to amortization:Intangible assets subject to amortization:
Favorable lease rights6.7$4,523  $(347) $4,176  
ModSpace trade nameModSpace trade name2.73,000  (375) 2,625  ModSpace trade name1.7$3,000  $(1,375) $1,625  
Total intangible assets subject to amortization7,523  (722) 6,801  
Indefinite-lived intangible assets:Indefinite-lived intangible assets:Indefinite-lived intangible assets:
Trade name125,000  —  125,000  
Trade namesTrade names125,000  —  125,000  
Total intangible assets other than goodwillTotal intangible assets other than goodwill$132,523  $(722) $131,801  Total intangible assets other than goodwill$128,000  $(1,375) $126,625  
The Company assigned $3.0 million and $4.0 million to definite-lived intangible assets, related toFor both the ModSpace trade name and favorable lease rights. The Company allocated $3.9 million and $0.1 million of the favorable lease rights to the Modular - US segment and Modular - Other North America segments, as defined in Note 16, respectively. The ModSpace trade name has an estimated useful life of three years and the favorable lease assets are amortized over the life of the leases. These intangibles are non-deductible for income tax purposes.
The aggregate amortization expense for intangible assets subject to amortization was $0.4 million and $1.2 million for the three and ninesix months ended SeptemberJune 30, 2020 and 2019, respectively. For the three months ended September 30, 2019, $0.3 million wasaggregate amount recorded into other depreciation and amortization expense and $0.1 million related to the favorable lease rights was recorded in SG&A. For the nine months ended September 30, 2019, $0.8 million was recorded in other depreciation and amortization expense and $0.4 million related to the favorable lease rights was recorded in SG&A. The aggregate amortization expense for intangible assets subject to amortization was $0.2 million and $0.6 million for the three and nine months ended September 30, 2018, respectively. For the three months ended September 30, 2018, $0.2 millionModSpace trade name was recorded in other depreciation and amortization expense. For the nine months ended September 30, 2018, $0.5 million was recorded in other depreciation and amortization expense and $0.1 million related to the favorable lease rights was recorded in SG&A.million.
The Company recognized a non-cash impairment charge of
$2.4 million in impairment losses on long-lived assets during the nine months ended September 30, 2019 as a result of the closure of a branch location with a favorable lease asset which was acquired in the ModSpace acquisition.
1814



NOTE 89 - Debt
The carrying value of debt outstanding at the respective balance sheet dates consisted of the following:
(in thousands, except rates)(in thousands, except rates)Interest rateYear of maturitySeptember 30, 2019December 31, 2018(in thousands, except rates)Interest rateYear of maturityJune 30, 2020December 31, 2019
2022 Secured Notes2022 Secured Notes7.875%  2022  $293,530  $292,258  2022 Secured Notes7.875%2022265,398  264,576  
2023 Secured Notes6.875%  2023  482,344  293,918  
Unsecured Notes10.000%  2023  —  198,931  
US ABL FacilityUS ABL FacilityVaries2022  897,917  853,409  US ABL FacilityVaries2022850,925  885,245  
Canadian ABL Facility (a)Canadian ABL Facility (a)Varies2022  —  —  Canadian ABL Facility (a)Varies2022—  —  
Capital lease and other financing obligations38,394  37,983  
2023 Secured Notes2023 Secured Notes6.875%2023483,643  482,768  
2025 Senior Notes2025 Senior Notes6.125%2025636,442  —  
Total debtTotal debt1,712,185  1,676,499  Total debt$2,236,408  $1,632,589  
Less: current portion of long-term debt(2,025) (1,959) 
Less: Current portion Less: Current portion265,398  —  
Total long-term debtTotal long-term debt$1,710,160  $1,674,540  Total long-term debt$1,971,010  $1,632,589  
(a) As of SeptemberJune 30, 2020 and December 31, 2019, the CompanyCompany had 0 outstandingoutstanding principal borrowings remaining on the Canadian ABL Facility and $2.3$1.6 million ofand $2.1 million of related debt issuance costs.costs, respectively. As there were 0 principal borrowings outstanding on the Canadian ABL Facility, the $2.3 $1.6 million and $2.1 million of debt issuance costs related to that facility are included in other non-current assets on the condensed consolidated balance sheet. sAsheet as of June 30, 2020 and December 31, 2018, the Company had $0.9 million of outstanding principal borrowings on the Canadian ABL Facility and $2.9 million of related debt issuance costs. $0.9 million of the related debt issuance costs are recorded as a direct offset against the principal of the Canadian ABL Facility and the remaining $2.0 million, in excess of principal, has been included in other non-current assets on the condensed consolidated balance sheet.2019, respectively.
The Company is subject to various covenants and restrictions for the ABL Facility, the 2022 Secured Notes and the 2023 Secured Notes. The Company redeemed the Unsecured Notes on June 19, 2019 and has no remaining obligations related to the Unsecured Notes following the redemption.restrictions. The Company was in compliance with all covenants related to debt as of SeptemberJune 30, 20192020 and December 31, 2018.2019. Subsequent to June 30, 2020, and in connection with the Merger and related refinancing described in Note 2, the Company repaid the 2022 Secured Notes and the ABL Facility as described below.
ABL Facility
On November 29, 2017, WS Holdings, WSII and certain of its subsidiaries entered into an ABL credit agreement (the “ABL Facility”), as amended in July and August 2018, that provides a senior secured revolving credit facility that matures on May 29, 2022.
The ABL Facility consists of (i) a $1.285 billion asset-backed revolving credit facility (the “US ABL Facility”) for WSII and certain of its domestic subsidiaries (the “US Borrowers”), (ii) a $140.0 million asset-based revolving credit facility (the “Canadian ABL Facility”) for certain Canadian subsidiaries of WSII (the “Canadian Borrowers,” and together with the US Borrowers, the “Borrowers”), and (iii) an accordion feature that permits the Borrowers to increase the lenders’ commitments in an aggregate amount not to exceed $375.0 million, subject to the satisfaction of customary conditions and lender approval, plus any voluntary prepayments that are accompanied by permanent commitment reductions under the ABL Facility.
Borrowing availability under the ABL Facility is equal to the lesser of $1.425 billion and the applicable borrowing bases (the “Line Cap”). The borrowing bases are a function of, among other things, the value of the assets in the relevant collateral pool. At June 30, 2020, the Line Cap is $1.416 billion.
The obligations of the US Borrowers are unconditionally guaranteed by WS Holdings and each existing and subsequently acquired or organized direct or indirect wholly-owned US organized restricted subsidiary of WS Holdings, other than excluded subsidiaries (together with WS Holdings, the "US Guarantors"). The obligations of the Canadian Borrowers are unconditionally guaranteed by the US Borrowers and the US Guarantors, and each existing and subsequently acquired or organized direct or indirect wholly-owned Canadian organized restricted subsidiary of WS Holdings other than certain excluded subsidiaries (together with the US Guarantors, the "ABL Guarantors").
At SeptemberJune 30, 2019,2020, the weighted average interest rate for borrowings under the ABL Facility was 4.54%2.70%. The weighted average interest rate on the balance outstanding, as adjusted for the effects of the interest rate swap agreements was 4.99%4.03%. Refer to Note 1415 for a more detailed discussion on interest rate management.
At SeptemberJune 30, 2019,2020, the Borrowers had $489.2$540.5 million of available borrowing capacity under the ABL Facility, including $354.8$409.6 million under the US ABL Facility and $134.4$130.9 million under the Canadian ABL Facility. At December 31, 2018,2019, the Borrowers had $532.6$509.1 million of available borrowing capacity under the ABLABL Facility, including $393.5$369.3 million under the US ABL Facility and $139.1$139.8 million under the Canadian ABL Facility.
The Company had issued $12.7 million and $13.0issued $10.4 million of standby letters of credit under the ABL Facility at SeptemberJune 30, 20192020 and December 31, 2018, respectively.2019. At SeptemberJune 30, 2019,2020, letters of credit and guarantees carried fees of 2.625%.
The Company hahad d $917.5$865.0 million and $879.4 and $903.0 million in outstanding principal under the ABL Facility at SeptemberJune 30, 20192020 and December 31, 2018,2019, respectively.
Debt issuance costs and discounts of $19.6of $14.1 million and $26.0and $17.8 million are included in the carrying value of the US ABL Facility at SeptemberJune 30, 20192020 and December 31, 2018,2019, respectively.
In connection with the Merger and related financing transactions, on July 1, 2020, the Company entered into the New ABL Facility and repaid the ABL Facility as described in Note 2 – Acquisitions and Related Financings.
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2022 Senior Secured Notes
In connection with the closingAs of the Business Combination,June 30, 2020, WSII issued $300.0had $270.0 million aggregate principal amount of 7.875% senior secured notes due December 15, 2022 (the “2022 Secured Notes”) under an indenture dated November 29,
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2017, entered into by and among WSII, the guarantors named therein, and Deutsche Bank Trust Company Americas, as trustee and as collateral agent. Interest is payable semi-annually on June 15 and December 15, beginning June 15, 2018..
Unamortized debt issuance costs pertaining to the 2022 Secured Notes waswere $6.5 million and $7.74.6 million and $5.4 million as of SeptemberJune 30, 20192020 and December 31, 2018,2019, respectively.
In connection with the Merger and related financing transactions, on July 1, 2020, the Company redeemed all of its 2022 Secured Notes and paid a make whole premium of $10.6 million which will be included in the loss from extinguishment expenses recorded in July 2020. The 2022 Secured Notes are classified as current at June 30, 2020 as the Company utilized cash in the escrow account classified as Restricted cash on the condensed consolidated balance sheet to repay these notes.

2023 Senior Secured Notes
On August 6, 2018, a special purposefinance subsidiary of WSII (the "Issuer") completed a private offering of $300.0 million in aggregate principal amount of its 6.875% senior secured notes due August 15, 2023 (the “Initial 2023 Secured Notes”). The Issuer entered into an indenture dated August 6, 2018 with Deutsche Bank Trust Company Americas, as trustee, which governs the terms of the Initial 2023 Secured Notes. In connection with the ModSpace acquisition, the Issuer merged with and into WSII and WSII assumed the Initial 2023 Secured Notes. Interest is payable semi-annually on February 15 and August 15 of each year, beginning February 15, 2019.
On May 14, 2019, WSII completed a tack-on offering of $190.0 million in aggregate principal amount to the Initial 2023 Secured Notes (the "Tack-on Notes"). The Tack-on Notes were issued as additional securities under an indenture, dated August 6, 2018, by and among the Issuer, the guarantors named therein and Deutsche Bank Trust Company Americas, as trustee and collateral agent.original indenture. The Tack-On Notes and the Initial 2023 Secured Notes are treated as a single class of debt securities under the indenture (the "2023 Secured Notes") and together with the 2022 Secured Notes, the "Senior Secured Notes"). The Tack-On Notes have identical terms to the Initial 2023 Secured Notes, other than with respect to the issue date and issue price. WSII incurred a total of $3.0 million in debt issuance costs in connection with the tack-on offering, which were deferred and will beare being amortized through the August 15, 2023 maturity date. The Tack-on Notes were issued at a premium of $0.5 million which will beis being amortized through the August 15, 2023 maturity date. The proceeds of the Tack-On Notes were used to repay a portion of the US ABL Facility.
Unamortized debt issuance costs and discounts, net of premium, pertaining to the 2023 Secured Notes were $7.7 $6.4 million and $6.1$7.2 million as of SeptemberJune 30, 20192020 and December 31, 2018,2019, respectively.

2023 Senior Unsecured Notes
On August 3, 2018, a special purpose subsidiary of WSII completed a private offering ofPrior to June 30, 2019, the Company held $200.0 million in aggregate principal amount of its senior unsecured notes due November 15, 2023 (the “Unsecured Notes”). The Issuer entered into an indenture with Deutsche Bank Trust Company Americas, as trustee, which governs the terms and conditions of the Unsecured Notes. In connection with the ModSpace acquisition, the Issuer merged with and into WSII and WSII assumed the Unsecured Notes.
On June 19, 2019 (the "Redemption Date"), WSII used proceeds from itsthe WillScot US ABL Facility to redeem all $200.0 million in aggregate outstanding principal amount of the Unsecured Notes at a redemption price of 102.0%, plus a make-whole premium of 1.126% and any accrued and unpaid interest to, but not including, the RedemptionRedemption Date. The Company recorded a loss on extinguishment of $7.2 million during the second quarter of 2019, which included $6.2 million of make-whole premiums and $1.0 million related to the write-off of unamortized deferred financing fees.

Prior2025 Senior Secured Notes
As more fully described in Note 2 – Acquisitions and Related Financing Transactions, on June 15, 2020, the Company, completed a private offering of $650.0 million in aggregate principal amount of its 6.125% senior secured notes due 2025. The Company recorded $13.6 million in deferred financing fees related to the redemption, the Unsecured Notes bore2025 secured notes.
The 2025 secured notes mature on June 15, 2025. They bear interest at a rate of 10%6.125% per annum. Interest wasis payable semi-annually on FebruaryJune 15 and AugustDecember 15 of each year, beginning FebruaryDecember 15, 2019.
Unamortized debt issuance costs and discounts pertaining to the Unsecured Notes were $1.1 million as of December 31, 2018.
Capital Lease and Other Financing Obligations
The Company’s capital lease and financing obligations primarily consisted of $38.4 million and $37.9 million under sale-leaseback transactions and $0.0 million and $0.1 million of capital leases at September 30, 2019 and December 31, 2018, respectively. The Company’s capital lease and financing obligations are presented net of $1.4 million and $1.6 million of debt issuance costs at September 30, 2019 and December 31, 2018, respectively. The Company’s capital leases primarily relate to real estate, equipment and vehicles and have interest rates ranging from 1.2% to 11.9%. In connection with the adoption of ASC 842, the financing obligations under sale-leaseback transactions will be reversed and the associated lease liabilities will be recorded as part of the operating lease liabilities.2020.

NOTE 910 – Equity
Common Stock and Warrants
Common Stock
On June 30, 2020, as contemplated by the Merger Agreement, and pursuant to the terms of an exercise notice delivered by Sapphire Holdings, an affiliate of TDR Capital, to WillScot, Sapphire Holdings exchanged each of its shares of common stock, par value $0.0001 per share, of Holdings, pursuant to that certain existing exchange agreement, between WillScot and Sapphire Holdings, for 1.3261 shares of newly issued Class A common stock (the “Sapphire Exchange”). As a result of the Sapphire Exchange, all issued and outstanding shares of WillScot’s Class B common stock, par value $0.0001 per share (the "Class B common stock"), were automatically canceled for no consideration and the existing exchange agreement was automatically terminated. As a result of the Sapphire Exchange, Holdings became a wholly-owned subsidiary of WillScot. Sapphire Holdings received 10,641,182 shares of Class A common stock in the Sapphire Exchange (the “Exchange Shares”).
Prior to the Sapphire Exchange, Sapphire Holdings ownership of Holdings was recorded as a non-controlling interest in the condensed consolidated financial statements. Effective as of June 30, 2020, due to the Sapphire Exchange, the
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Company's subsidiaries are each wholly owned and there is no non-controlling interest. As a result of the Sapphire Exchange, non-controlling interest of $63.9 million was reclassified to $66.9 million of additional paid-in-capital and $(3.0) million to accumulated other comprehensive loss, on the condensed consolidated balance sheet.
In connection with the Sapphire Exchange, stock compensation vesting and stock option exercisesevent described in Note 13,14 and the warrant exercises described below, the Company issued 242,35712,414,378 shares of Class A common stock during the six months ended June 30, 2020.
In conjunction with the Merger on July 1, 2020, the Company issued 106,428,908 shares of Class A common stock in exchange for Mobile Mini common stock outstanding and subsequently filed an amended and restated certificate of incorporation, which reclassified all outstanding shares of the Class A common stock and converted such shares into shares of common stock, duringpar value $0.0001 per share, of WillScot Mobile Mini. As of July 31, 2020, the nine months ended September 30, 2019.Company had 227,721,220 shares of Common Stock.

Warrants
Double Eagle issuedOn January 24, 2020, the Company delivered a notice (the “Redemption Notice”) to redeem all of its outstanding warrants to purchase itsthe Company’s Class A common stock, which were issued under the warrant agreement, dated September 10, 2015, by and between Double Eagle and Continental Stock Transfer & Trust Company, as componentswarrant agent (the “Warrant Agreement”), as part of the units sold in itsDouble Eagle's initial public offering (the “Public Warrants”). Double Eagle alsothat remained unexercised on February 24, 2020. As further described in the Redemption Notice and permitted under the Warrant Agreement, holders of these warrants who exercised them following the date of the Redemption Notice were required to do so on a cashless basis. From January 1, 2020 through January 24, 2020, 796,610 warrants were exercised for cash, resulting in the Company receiving cash proceeds of $4.6 million and the Company issued 398,305 shares of the Company's Class A common stock. After January 24, 2020 through February 24, 2020, 5,836,048 warrants to purchase itswere exercised on a cashless basis. An aggregate of 1,097,162 shares of the Company's Class A common stock was issued in a private placement concurrentlyconnection with its initial public offering (the “Private Warrants,” and together withthese exercises. Thereafter, the Public Warrants,Company completed the "2015 Warrants").redemption of 38,509 remaining warrants under the Redemption Notice for $0.01 per warrant.
At SeptemberJune 30, 20192020, 24,367,867the Company has 9,782,106 warrants each, exercisable for 1 share, with an exercise price of the 2015 Warrants$15.50 and 9,999,57917,561,700 warrants exercisable for one half share with an exercise price of the 2018 Warrants were$5.75 outstanding.

2017



Accumulated Other Comprehensive Loss 
The changes in accumulated other comprehensive loss ("AOCL"), net of tax, for the three and ninesix months ended SeptemberJune 30, 20192020 and 20182019 were as follows:
(in thousands)(in thousands)Foreign Currency TranslationUnrealized losses on hedging activitiesTotal(in thousands)Foreign Currency TranslationUnrealized losses on hedging activitiesTotal
Balance at December 31, 2018$(62,608) $(5,418) $(68,026) 
Total other comprehensive income (loss) prior to reclassifications4,115  (2,636) 1,479  
Reclassifications to the statements of operations—  435  435  
Less other comprehensive (income) loss attributable to non-controlling interest(364) 198  (166) 
Balance at March 31, 2019(58,857) (7,421) (66,278) 
Total other comprehensive income (loss) prior to reclassifications4,300  (4,500) (200) 
Reclassifications to the statements of operations—  613  613  
Less other comprehensive (income) loss attributable to non-controlling interest(396) 351  (45) 
Balance at June 30, 2019(54,953) (10,957) (65,910) 
Balance at December 31, 2019Balance at December 31, 2019$(52,982) $(9,793) $(62,775) 
Total other comprehensive loss prior to reclassificationsTotal other comprehensive loss prior to reclassifications(2,799) (1,337) (4,136) Total other comprehensive loss prior to reclassifications(21,144) (10,330) (31,474) 
Reclassifications to the statements of operationsReclassifications to the statements of operations—  837  837  Reclassifications to the statements of operations—  1,572  1,572  
Less other comprehensive loss attributable to non-controlling interestLess other comprehensive loss attributable to non-controlling interest256  45  301  Less other comprehensive loss attributable to non-controlling interest1,913  790  2,703  
Balance at September 30, 2019$(57,496) $(11,412) $(68,908) 
Balance at March 31, 2020Balance at March 31, 2020(72,213) (17,761) (89,974) 
Total other comprehensive income (loss) prior to reclassificationsTotal other comprehensive income (loss) prior to reclassifications7,982  (1,642) 6,340  
Reclassifications to the statements of operationsReclassifications to the statements of operations—  2,617  2,617  
Less other comprehensive income attributable to non-controlling interestLess other comprehensive income attributable to non-controlling interest(730) (88) (818) 
Impact of elimination of non-controlling interest on accumulated other comprehensive incomeImpact of elimination of non-controlling interest on accumulated other comprehensive income(1,299) (1,673) (2,972) 
Balance at June 30, 2020Balance at June 30, 2020$(66,260) $(18,547) $(84,807) 

(in thousands)Foreign Currency TranslationUnrealized losses on hedging activitiesTotal
Balance at December 31, 2017$(49,497) $—  $(49,497) 
Total other comprehensive income prior to reclassifications263  —  263  
Reclassifications to accumulated deficit(a)
(2,540) —  (2,540) 
Less other comprehensive income attributable to non-controlling interest(24) —  (24) 
Balance at March 31, 2018(51,798) —  (51,798) 
Total other comprehensive loss prior to reclassifications(2,912) —  (2,912) 
Less other comprehensive loss attributable to non-controlling interest293  —  293  
Balance at June 30, 2018(54,417) —  (54,417) 
Total other comprehensive income prior to reclassifications2,541  —  2,541  
Less other comprehensive loss attributable to non-controlling interest(243) —  (243) 
Balance at September 30, 2018$(52,119) $—  $(52,119) 
(a) In the first quarter of 2018, the Company elected to early adopt ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which resulted in a discrete reclassification of $2.5 million from accumulated other comprehensive loss to accumulated deficit effective January 1, 2018.
(in thousands)Foreign Currency TranslationUnrealized losses on hedging activitiesTotal
Balance at December 31, 2018$(62,608) $(5,418) $(68,026) 
Total other comprehensive income (loss) prior to reclassifications4,115  (2,636) 1,479  
Reclassifications to statements of operations—  435  435  
Less other comprehensive loss (income) attributable to non-controlling interest(364) 198  (166) 
Balance at March 31, 2019(58,857) (7,421) (66,278) 
Total other comprehensive income (loss) prior to reclassifications4,321  (4,500) (179) 
Reclassifications from AOCI to income—  613  613  
Less other comprehensive loss (income) attributable to non-controlling interest(397) 351(46) 
Balance at June 30, 2019$(54,933) $(10,957) $(65,890) 
For the three and ninesix months ended SeptemberJune 30, 2020 and 2019, $0.8$4.2 million and $2.0and $1.2 million, respectively, was reclassified from AOCL into the condensed consolidated statement of operations within interest expense related to the interest rate swaps discussed in Note 14.15. The Company did 0t record a tax benefit for the three and six months ended June 30, 2020, associated with this reclassification. For the three and ninesix months ended SeptemberJune 30, 2019, the Company recorded a tax benefit of $0.0$1.2 million and $0.1$1.9 million, respectively, associated with this reclassification.

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NOTE 1011 – Income Taxes
The Company recorded an$(0.3) million and $0.5 million of income tax benefit of $1.2 million and $2.0 million (benefit) expense for the three and ninesix months ended SeptemberJune 30, 2019,2020, respectively and $6.5$(1.2) million and $13.6$(0.8) million for the three and ninesix months ended SeptemberJune 30, 2018,2019 respectively.
The Company’s effective tax rate for the three and ninesix months ended SeptemberJune 30, 20192020 was 266.4%(2.3)%, and 8.4%5.2%, respectively, and 15.0%9.4% and 23.9% for3.6% for the correspondingsame periods in 2018.2019. The Company did not recognize aincome tax benefit on the loss from operations for the three or nine months ended September 30, 2019 as it is not more likely than not that the benefit is realizable. A tax benefit will be recognized only when there is sufficient income to support realizability. The Company’s effective tax rate(benefit) expense for the three and ninesix months ended SeptemberJune 30, 2020 is primarily a result of the benefit from reversal of valuation allowance due to pre-tax income offset by net increase in expense for certain discrete items recorded in the respective quarters, mainly driven by legislative enactments. The income tax benefit for the three and six months ended June 30, 2019 is principally a result ofprimarily from discrete items. The higher effective rate for the three months ended September 30, 2019 is due to a smaller pre-tax loss from operations than the prior two quarters.
During the three and nine months ended September 30, 2019, the Company recognized income tax benefit of $1.2 million and $2.0 million, respectively, primarily attributable to (i) enacted legislative changes and (ii) valuation allowance adjustments generated by changes in provisional ModSpace balancesitems recorded in 2019.
During the threerespective quarters, including state legislative enactments and nine months ended September 30, 2018, the Company recognized incomeuncertain tax benefit of $0.6 million and $5.3 million, respectively, mainly related to enacted legislative changes in the second quarter of 2018.position reversals.

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NOTE 1112 - 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, restricted cash, trade receivables, trade payables, capital lease and other financing obligations, and other current liabilities approximate their carrying amounts.
The following table shows the carrying amounts and fair values of financial assets and liabilities, including their levels in the fair value hierarchy:
September 30, 2019December 31, 2018June 30, 2020December 31, 2019
Carrying AmountFair ValueCarrying AmountFair ValueCarrying AmountFair ValueCarrying AmountFair Value
(in thousands)(in thousands)Level 1Level 2Level 3Level 1Level 2Level 3(in thousands)Carrying AmountLevel 2Level 3Carrying AmountLevel 1Level 3
US ABL FacilityUS ABL Facility$897,917  $—  $917,500  $—  $853,409  $—  $878,500  $—  US ABL Facility$850,925  $—  $—  $885,245  $—  $903,000  $—  
Canadian ABL FacilityCanadian ABL Facility—  —  —  —  —  —  918  —  Canadian ABL Facility—  —  —  —  —  —  —  —  
2022 Secured Notes2022 Secured Notes293,530  —  314,535  —  292,258  —  297,027  —  2022 Secured Notes265,398  —  281,003  —  264,576  —  282,250  —  
2023 Secured Notes2023 Secured Notes482,344  —  514,318  —  293,918  —  288,633  —  2023 Secured Notes483,643  —  505,754  —  482,768  —  517,334  —  
Unsecured Notes—  —  —  —  198,931  —  197,462  —  
2025 Secured Notes2025 Secured Notes636,442  —  664,788  —  —  —  —  —  
TotalTotal$1,673,791  $—  $1,746,353  $—  $1,638,516  $—  $1,662,540  $—  Total$2,236,408  $—  $2,316,545  $—  $1,632,589  $—  $1,702,584  $—  
The carrying value of the US ABL Facility, the Canadian ABL Facility,2022 Secured Notes, the 20222023 Secured Notes, and the 20232025 Secured Notes incluincludesdes $19.6 $14.1 million $0.0, $4.6 million, $6.5$6.4 million, and $7.7$13.6 million respectively,, respectively, of unamortized debt issuance costs as of SeptemberJune 30, 2019,2020, which are presented as a direct reduction of the corresponding liability. The carrying value of the US ABL Facility, the Canadian ABL Facility and the 2022 Secured Notes and the 2023 Secured Notes and the Unsecured Notes includes $25.1$17.8 million, $0.9 million, $7.7 million, $6.1$5.4 million and $1.1$7.2 million, respectively, of unamortized debt issuance costs for the year endedas of December 31, 2018,2019, which are presented as a direct reduction of the corresponding liability.
The carrying value of the US and Canadian ABL Facility,Facilities, excluding debt issuance costs, approximates fair value as the interest rates are variable and reflective of market rates. The fair value of the 2022 Secured Notes, the 2023 Secured Notes, and the Unsecured2025 Secured Notes is based on their last trading price at the end of each period obtained from a third party. The location and the fair value of derivative assets and liabilities designated as hedges in the condensed consolidated balance sheet are disclosed in Note 14.

15.
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NOTE 1213 - Restructuring
Restructuring costs include charges associated with exit or disposal activities that meet the definition of restructuring under FASB ASC Topic 420, “ExitExit or Disposal Cost Obligations”Obligations (“ASC 420”). The Company's restructuring plans are generally country or region specific and are typically completed within a one year period. Restructuring costs incurred under these plans include (i) one-time termination benefits related to employee separations, (ii) contract termination costs, and (iii) other related costs associated with exit or disposal activities including, but not limited to,non lease costs for consolidating or closing facilities. Costs related to the integration of acquired businesses that do not meet the definition of restructuring under ASC 420, such as employee training costs, duplicate facility costs, and professional services expenses, are included within SG&A.&A expense.
The following is a summary of the activity in the Company’s restructuring accruals for the three and ninesix months ended SeptemberJune 30, 20192020 and 2018:2019:
Three Months Ended September 30,
(in thousands)20192018
Employee CostsFacility Exit CostsTotalEmployee CostsFacility Exit CostsTotal
Balance at beginning of the period$1,143  $1,764  $2,907  $967  $—  $967  
Charges321  1,659  1,980  2,715  3,422  6,137  
Cash payments(544) (730) (1,274) (1,161) (2,500) (3,661) 
Foreign currency translation(91) —  (91)  —   
Non-cash movements—  (324) (324) —  —  —  
Balance at end of period$829  $2,369  $3,198  $2,526  $922  $3,448  
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Nine Months Ended September 30,
(in thousands)20192018
Employee CostsFacility Exit CostsTotalEmployee CostsFacility Exit CostsTotal
Balance at beginning of the period$4,544  $971  $5,515  $227  $—  $227  
Charges1,951  7,132  9,083  3,792  3,422  7,214  
Cash payments(5,476) (3,745) (9,221) (1,491) (2,500) (3,991) 
Foreign currency translation(190) —  (190) (2) —  (2) 
Non-cash movements—  (1,989) (1,989) —  —  —  
Balance at end of period$829  $2,369  $3,198  $2,526  $922  $3,448  



Three Months Ended June 30,
(in thousands)20202019
Employee CostsFacility Exit CostsTotalEmployee CostsFacility Exit CostsTotal
Balance at beginning of the period - March 31, 2020$168  $—  $168  $2,847  $38  $2,885  
Reclassification of liability to operating lease asset at the adoption of ASC 842(a)—  —  —  —  (476) (476) 
Charges743   748  123  1,509  1,632  
Cash payments(387) —  (387) (1,704) —  (1,704) 
Foreign currency translation —    —   
Non-cash movements—  (5) (5) (128) (1,071) (1,199) 
Balance at end of period$525  $—  $525  $1,143  $—  $1,143  

Six Months Ended June 30,
(in thousands)20202019
Employee CostsFacility Exit CostsTotalEmployee CostsFacility Exit CostsTotal
Balance at beginning of the period - December 31, 2020$447  $—  $447  $4,544  $972  $5,516  
Reclassification of liability to operating lease asset at the adoption of ASC 842(a)—  —  —  —  (1,415) (1,415) 
Charges671  17  688  1,630  1,658  3,288  
Cash payments(594) —  (594) (4,932) —  (4,932) 
Foreign currency translation —   29  —  29  
Non-cash movements—  (17) (17) (128) (1,215) (1,343) 
Balance at end of period$525  $—  $525  $1,143  $—  $1,143  

The restructuring charges for the three and six months ended June 30, 2020 are primarily driven by termination costs related to reductions in force as a result of COVID-19.
The restructuring charges for the three and ninesix months ended SeptemberJune 30, 2019 primarily relate primarily to employee termination costs and lease exit costs in connection with the integration of ModSpace. The Company initiated certain restructuring plans associated with the ModSpace acquisition in order to capture operating synergies as a result of integrating ModSpace into WillScot. The restructuring activitiesThese costs were primarily include the termination of leases for duplicative branches and corporate facilities and the termination of employees in connection with the consolidation of these overlapping facilities and functions within ourthe existing business. At
SegmentSeptember 30, 2019, the Company is substantially complete with actions related to employee costs. The Company is still in the process of evaluating and closing acquired facilities and anticipates that all actions will be taken by the end of the first half of 2020.s
The restructuring charges for the three and nine months ended September 30, 2018 primarily relate to employee termination costs in connection with the integration$0.7 million of Acton, Tyson and ModSpace. As part of the restructuring plan, certain employees were required to render future service in order to receive their termination benefits. The termination costs associated with these employees was recognized over the period from the commencement of the restructuring plans to the actual date of termination.
Segments
The $2.0 million of restructuring charges for the three months ended SeptemberJune 30, 20192020 includes $1.9$0.6 million of charges related to the Modular - US segment and less than $0.1 million of charges related to the Modular - Other North America segment.
The $1.6 million of restructuring charges for the three months ended June 30, 2019 includes $1.7 million of charges related to the Modular - US segment, offset by a reversal of $(0.1) million of charges related to the Modular - Other North America segment.
The $9.10.7 million of restructuring charges for the ninesix months ended SeptemberJune 30, 20192020 includes $8.5$0.6 million of charges pertaining to the Modular - US segment and $0.6$0.1 million of charges pertaining to the Modular - Other North America segment.
The $6.1 million of restructuring charges for the three months ended September 30, 2018 includes $5.9 million of charges related to the Modular - US segment and $0.2 million of charges related to the Modular - Other North America segment. The $7.2$3.3 million of restructuring charges for the ninesix months ended SeptemberJune 30, 20182019 include $7.0$2.9 million charges pertaining to the Modular - US segment and $0.2$0.4 million of charges related to the Modular - Other North America segment.
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NOTE 1314 - Stock-Based Compensation
During the ninesix months ended SeptemberJune 30, 2019, 478,4002020, 174,020 time-based restricted stock units ("Time-Based RSUs"), 65,959 restricted stock awards ("RSAs"), and 302,182202,923 market-based restricted stock units ("Market-Based RSUs", and together with the Time-Based RSUs, the "RSUs"), and 52,755 restricted stock awards ("RSAs") were granted under the WillScot Corporation 2017 Incentive Award Plan (the "Plan"). NaN stock option awards were granted during the nine months ended September 30, 2019.
During the ninesix months ended SeptemberJune 30, 2019, 72,053 RSAs, 213,1802020, 323,678 Time-Based RSUs, 52,755 RSAs, and 147,313133,547 stock options vested in accordance with their terms, resulting in the issuance of 228,590238,927 shares of Class A common stock to participants, net
20



of 56,64384,751 shares withheld to cover taxes. An additional 13,767 shares were issued as a result ofDuring the exercise of stock options during the ninesix months ended SeptemberJune 30, 2019. NaN RSAs were forfeited during the nine months ended September 30, 2019. During the nine months ended September 30, 2019, 46,2322020, 15,106 Time-Based RSUs 7,485and 12,700 Market-Based RSUs were forfeited.
At June 30, 2020, 65,959 RSAs, 900,541 Time-Based RSUs, 478,504 Market-Based RSUs, and 41,302 stock options were forfeited.
At September 30, 2019, 52,755 RSAs, 1,071,721 Time-Based RSUs, 294,697 Market-Based RSUs, and 386,875253,328 stock options were unvested, with weighted average grant date fair values of $14.69, $12.78, $13.22,$11.75, $13.49, $14.71, and $5.51, respectively.
Restricted Stock AwardsRSAs
Compensation expense for RSAs recognized in SG&A on the condensed consolidated statements of operations waswas $0.3 million and $0.8$0.2 million for the three and nine months ended SeptemberJune 30, 2020 and 2019, respectively. Compensation expense for RSAs on the condensed consolidated statements of operations was $0.5 million and $0.5 million for the six months ended June 30, 2020 and 2019, respectively, with associated tax benefits of $0.0 million and $0.1 million for the three anmillion. d nine months ended September 30, 2019, respectively.
ASeptemberJune 30, 2019,2020, there was $0.6$0.7 million of unrecognized compensation cost related to RSAs that is expected to be recognized over the remaining weighted average vesting perioderiod of 0.7 years.0.9 years.
Time-Based Restricted Stock UnitsRSUs
Compensation expense for Time-Based RSUs recognized in SG&A on the condensed consolidated statements of operations was $1.0$1.2 million and $2.9$1.2 million for the three and nine months ended SeptemberJune 30, 2020 and 2019, respectively. Compensation expense for Time-Based RSUs recognized in SG&A on the condensed consolidated statements of operations was $2.2 million and $1.9 million for the six months ended June 30, 2020 and 2019, respectively, with associated tax benefits of $0.0 million and $0.2 million for the three and nine months ended Septembermillion. At June 30, 2019, respectively.
At September 30, 2019,2020, unrecognized compensation cost related to Time-Based RSUs totaled $11.4$10.8 million and is expected to be recognized over the remaining weighted average vesting periodperiod of 2.9 years.2.5 years.
Market-Based Restricted Stock Units
On March 21, 2019, the Company granted 302,182 Market-Based RSUs which 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 of the Russell 3000 Index at grant date over the three-year period performance period. The target number of Market-Based RSUs may be adjusted from 0% to 150% based on the TSR attainment levels defined by the Compensation Committee. The 100% target payout is tied to performance at the 50% percentile, with a payout curve ranging from 0% (for performance less than the 25% percentile) to 150% (for performance at or above the 75% percentile). Vesting is also subject to continued service requirements through the vesting date. Each Market-Based RSU represents a contingent right to receive one share upon vesting of the Company’s Class A common stock, or its cash equivalent.
The Market-Based RSUs were valued based on a Monte Carlo simulation model to reflect the impact of the Market-Based RSU market condition, resulting in a grant-date fair value per Market-Based RSU of $13.22. The probability of satisfying a market condition is considered in the estimation of the grant-date fair value for Market-Based RSUs and the compensation cost is not reversed if the market condition is not achieved, provided the requisite service has been provided.
Compensation expense for Market-Based RSUs recognized in SG&A on the condensed consolidated statements of operations was $0.3$0.6 million and $0.7$0.3 million for the three and nine months ended SeptemberJune 30, 2020 and 2019, respectively, respectively. Compensation expense for Market-Based RSUs recognized in SG&A on the condensed consolidated statements of operations was $0.9 million and $0.4 million for the six months ended June 30, 2020 and 2019, respectively, withassociated tax benefits of $0.0 million and $0.1 million for the three and nine months ended September. At June 30, 2019, respectively. At September 30, 2019,2020, unrecognized compensation cost related to Market-Based RSUs totaled $3.2$5.1 million and is expected to be recognized over the remaining vesting periodperiod of 2.5 years.2.1 years.
Stock Option Awards
Compensation expense for stock option awards, recognized in SG&A on the condensed consolidated statements of operations, was $0.2 million and $0.6$0.2 million for the three months ended June 30, 2020 and 2019, respectively. Compensation expense for stock option awards, recognized in SG&A on the condensed consolidated statements of operations, was $0.4 million and $0.4 million for the three and ninesix months ended SeptemberJune 30, 2020 and 2019,, respectively, with associated tax benefitsbenefits of $0.0 million and $0.1 million for the three and nine months ended Septemberand $0.1 million. At June 30, 2019, respectively.
At September 30, 2019,2020, unrecognized compensation cost related to stock option awards totaled $1.8$1.3 million and is expected to be recognized over the remaining vesting period of 2.5of 1.7 years.

2020 Incentive Plan

On June 24, 2020, WillScot’s stockholders approved the Company’s 2020 Incentive Award Plan (the “2020 Incentive Plan”), subject to completion of the Merger. The plan amends and restates in its entirety the WillScot Corporation 2017 Incentive Award Plan, as amended. As a result, all future incentive awards to the Company’s executive officers, including as contemplated by such officers’ employment agreements, in connection with the completion of the Merger or otherwise as determined by the Company’s compensation committee and the Board, as applicable, will be granted under the 2020 Incentive Plan. On July 2, 2020, the Company issued 122,332 performance based stock units ("PSUs") and 458,841 RSUs under the 2020 Incentive Plan.
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NOTE 1415 - Derivatives
On November 6, 2018, WSII entered into an interest rate swap agreement (the “Swap Agreement”) with a financial counterparty that effectively converts $400.0 million in aggregate notional amount of variable-rate debt under the Company’s current and new ABL Facility into fixed-rate debt. The Swap Agreement will terminate on May 29, 2022, at2022. Under the same timeterms of the Company’s ABL Facility matures. The Swap Agreement, contains customary representations, warrantiesthe Company receives a floating rate equal to 1 month LIBOR and covenantsmakes payments based on a fixed rate of 3.06% on the notional amount. The receive rate under the terms of the Swap Agreement was 0.18% and may be terminated prior to its expiration.1.74% at June 30, 2020 and December 31, 2019, respectively.
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. Although no significant ineffectiveness is expected with this hedging strategy, the effectiveness of the interest rate swaps is evaluated on a quarterly basis. The Company did not have any derivative financial instruments for the three and nine months ended September 30, 2018.
The following table summarizes the outstanding interest rate swap arrangement as of September 30, 2019:
Aggregate Notional Amount (in millions)Receive RatePay RateReceive Rate as of September 30, 2019Receive Rate as of December 31, 2018
US ABL Facility$400.0  1 month LIBOR3.06 %2.03 %2.44 %

The location and the fair value of derivative instruments designated as hedges, at the respective balance sheet dates, were as follows:
(in thousands)(in thousands)Balance Sheet LocationSeptember 30, 2019December 31, 2018(in thousands)Balance Sheet LocationJune 30, 2020December 31, 2019
Cash Flow Hedges:Cash Flow Hedges:Cash Flow Hedges:
Interest rate swapInterest rate swapAccrued liabilities$4,980  $1,709  Interest rate swapAccrued liabilities$11,181  $5,348  
Interest rate swapInterest rate swapOther long-term liabilities$11,574  $6,192  Interest rate swapOther long-term liabilities$11,170  $8,943  

The fair value of the interest rate swap is based on dealer quotes of market forward rates, a Level 2 input on the fair value hierarchy, and reflects the amount that the Company would receive or pay as of SeptemberJune 30, 20192020 and December 31, 2018,2019, respectively, for contracts involving the same attributes and maturity dates.

The following table discloses the impact of the interest rate swap, excluding the impact of income taxes, resulted in a loss recognized of $0.7 million and $8.6 million inon other comprehensive income ("OCI"(“OCI”), AOCI and the Company’s statement of operations for the three and ninesix months ended September 30, 2019, respectively. The Company reclassified $0.8 million and $2.0 million from AOCL into interest expense on the condensed consolidated income statement for the three and nine months ended September 30, 2019, respectively.ending June 30:
Cash flows from derivative instruments are presented within net cash provided by operating activities in the consolidated statements of cash flows.
(in thousands)20202019
Loss recognized in OCI$(7,783) $(7,951) 
Location of loss recognized in incomeInterest expenseInterest expense
Loss reclassified from AOCI into income (effective portion)$(4,189) $(1,181) 

22



NOTE 1516 - Commitments and Contingencies
Commitments
At June 30, 2020 and December 31, 2019, commitments for the acquisition of rental equipment and property, plant and equipment were $4.7 million and $4.5 million, respectively.
Contingencies
The Company is involved in various lawsuits or claims in the ordinary course of business. Management is of the opinion that there is no pending claim or lawsuit which, if adversely determined, would have a material effect on the Company’s financial condition, results of operations or cash flows.

NOTE 1617 - Segment Reporting
The Company operates in 1 principal line of business: modular leasing and sales.
Modular leasing and sales is comprised of 2 operating segments: US and Other North America. The US modular operating segment (“Modular - US”) consists of the contiguous 48 states and Hawaii. The Other North America operating segment (“Modular - Other North America”) consists of Alaska, Canada and Mexico. 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. As a result of the Merger, the Company will evaluate its operating segments for future reporting.
The Chief Operating Decision Maker ("CODM") evaluates business segment performance onutilizing Adjusted EBITDA, which excludes certain items as shown in the reconciliation of the Company’s consolidated net loss before tax to Adjusted EBITDA below. Management believes that evaluating segment performance excluding such items is meaningful because it provides insight with respect to the intrinsic 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 the more important metric because it more fully captures the business performance of the segments, inclusive of indirect costs.

2523



Reportable Segments
The following tables set forth certain information regarding each of the Company’s reportable segments for the three and ninesix months ended SeptemberJune 30, 20192020 and 2018,2019, respectively.
Three Months Ended September 30, 2019Three Months Ended June 30, 2020
(in thousands)(in thousands)Modular - USModular - Other North AmericaTotal(in thousands)Modular - USModular - Other North AmericaTotal
Revenues:Revenues:Revenues:
Leasing and services revenue:Leasing and services revenue:Leasing and services revenue:
Modular leasingModular leasing$173,423  $17,871  $191,294  Modular leasing$175,285  $14,858  $190,143  
Modular delivery and installationModular delivery and installation56,005  5,878  61,883  Modular delivery and installation47,213  4,427  51,640  
Sales revenue:Sales revenue:Sales revenue:
New unitsNew units10,774  762  11,536  New units9,406  357  9,763  
Rental unitsRental units7,499  128  7,627  Rental units4,144  1,172  5,316  
Total revenuesTotal revenues247,701  24,639  272,340  Total revenues236,048  20,814  256,862  
Costs:Costs:Costs:
Cost of leasing and services:Cost of leasing and services:Cost of leasing and services:
Modular leasingModular leasing53,601  4,567  58,168  Modular leasing44,567  3,180  47,747  
Modular delivery and installationModular delivery and installation49,229  5,135  54,364  Modular delivery and installation39,758  3,765  43,523  
Cost of sales:Cost of sales:Cost of sales:
New unitsNew units7,016  405  7,421  New units6,160  171  6,331  
Rental unitsRental units4,315  777  5,092  Rental units2,961  842  3,803  
Depreciation of rental equipmentDepreciation of rental equipment39,283  4,586  43,869  Depreciation of rental equipment41,651  3,843  45,494  
Gross profitGross profit$94,257  $9,169  $103,426  Gross profit$100,951  $9,013  $109,964  
Other selected data:Other selected data:Other selected data:
Adjusted EBITDAAdjusted EBITDA$80,424  $7,953  $88,377  Adjusted EBITDA$90,613  $6,907  $97,520  
Selling, general and administrative expenseSelling, general and administrative expense$61,484  $6,675  $68,159  Selling, general and administrative expense$59,328  $5,944  $65,272  
Other depreciation and amortizationOther depreciation and amortization$3,415  $292  $3,707  Other depreciation and amortization$2,704  $179  $2,883  
Purchase of rental equipment and refurbishments$44,951  $2,838  $47,789  
Purchases of rental equipment and refurbishmentsPurchases of rental equipment and refurbishments$38,065  $1,969  $40,034  

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Three Months Ended June 30, 2019
(in thousands)Modular - USModular - Other North AmericaTotal
Revenues:
Leasing and services revenue:
Modular leasing$168,826  $16,992  $185,818  
Modular delivery and installation52,495  3,471  55,966  
Sales revenue:
New units10,293  1,214  11,507  
Rental units4,888  5,534  10,422  
Total revenues236,502  27,211  263,713  
Costs:
Cost of leasing and services:
Modular leasing51,083  3,990  55,073  
Modular delivery and installation43,949  4,519  48,468  
Cost of sales:
New units7,138  861  7,999  
Rental units2,661  4,060  6,721  
Depreciation of rental equipment39,200  4,768  43,968  
Gross profit$92,471  $9,013  $101,484  
Other selected data:
Adjusted EBITDA$80,547  $7,007  $87,554  
Selling, general and administrative expense$62,627  $7,758  $70,385  
Other depreciation and amortization$2,743  $206  $2,949  
Purchases of rental equipment and refurbishments$58,241  $2,974  $61,215  


25



Six Months Ended June 30, 2020
(in thousands)Modular - USModular - Other North AmericaTotal
Revenues:
Leasing and services revenue:
Modular leasing$347,860  $30,635  $378,495  
Modular delivery and installation94,830  7,880  102,710  
Sales revenue:
New units18,673  703  19,376  
Rental units8,549  3,553  12,102  
Total revenues469,912  42,771  512,683  
Costs:
Cost of leasing and services:
Modular leasing91,451  6,105  97,556  
Modular delivery and installation80,464  6,924  87,388  
Cost of sales:
New units12,167  367  12,534  
Rental units5,266  2,343  7,609  
Depreciation of rental equipment83,304  8,138  91,442  
Gross profit$197,260  $18,894  $216,154  
Other selected data:
Adjusted EBITDA$172,296  $14,766  $187,062  
Selling, general and administrative expense$127,991  $12,249  $140,240  
Other depreciation and amortization$5,581  $376  $5,957  
Purchase of rental equipment and refurbishments$75,071  $4,611  $79,682  


26



Three Months Ended September 30, 2018Six Months Ended June 30, 2019
(in thousands)(in thousands)Modular - USModular - Other North AmericaTotal(in thousands)Modular - USModular - Other North AmericaTotal
Revenues:
RevenuesRevenues
Leasing and services revenue:Leasing and services revenue:Leasing and services revenue:
Modular leasing$128,007  $13,653  $141,660  
Modular delivery and installation41,830  4,947  46,777  
Sales revenue:
Modular space leasingModular space leasing$330,711  $32,399  $363,110  
Modular space delivery and installationModular space delivery and installation98,501  7,465  105,966  
Sales:Sales:
New unitsNew units19,193  1,727  20,920  New units24,254  2,094  26,348  
Rental unitsRental units8,595  972  9,567  Rental units13,211  8,763  21,974  
Total revenues197,625  21,299  218,924  
Total RevenuesTotal Revenues466,677  50,721  517,398  
Costs:
CostsCosts
Cost of leasing and services:Cost of leasing and services:Cost of leasing and services:
Modular leasing36,204  3,011  39,215  
Modular delivery and installation37,782  4,608  42,390  
Modular space leasingModular space leasing94,966  7,342  102,308  
Modular space delivery and installationModular space delivery and installation83,700  8,111  91,811  
Cost of sales:Cost of sales:Cost of sales:
New unitsNew units13,905  1,184  15,089  New units17,388  1,489  18,877  
Rental unitsRental units5,025  725  5,750  Rental units8,530  5,986  14,516  
Depreciation of rental equipmentDepreciation of rental equipment31,702  3,832  35,534  Depreciation of rental equipment75,674  9,397  85,071  
Gross profitGross profit$73,007  $7,939  $80,946  Gross profit$186,419  $18,396  $204,815  
Other selected data:Other selected data:Other selected data:
Adjusted EBITDAAdjusted EBITDA$58,454  $6,164  $64,618  Adjusted EBITDA$156,490  $14,415  $170,905  
Selling, general and administrative expenseSelling, general and administrative expense$66,102  $5,795  $71,897  Selling, general and administrative expense$128,557  $15,147  $143,704  
Other depreciation and amortizationOther depreciation and amortization$3,403  $317  $3,720  Other depreciation and amortization$5,317  $416  $5,733  
Purchase of rental equipment and refurbishmentsPurchase of rental equipment and refurbishments$43,007  $3,735  $46,742  Purchase of rental equipment and refurbishments$108,162  $4,926  $113,088  


27



Nine Months Ended September 30, 2019
(in thousands)Modular - USModular - Other North AmericaTotal
Revenues:
Leasing and services revenue:
Modular leasing$506,703  $50,322  $557,025  
Modular delivery and installation155,284  13,359  168,643  
Sales revenue:
New units35,204  2,860  38,064  
Rental units20,847  8,894  29,741  
Total revenues718,038  75,435  793,473  
Costs:
Cost of leasing and services:
Modular leasing148,567  11,909  160,476  
Modular delivery and installation132,929  13,246  146,175  
Cost of sales:
New units24,404  1,894  26,298  
Rental units12,845  6,763  19,608  
Depreciation of rental equipment114,957  13,983  128,940  
Gross profit$284,336  $27,640  $311,976  
Other selected data:
Adjusted EBITDA$238,572  $23,040  $261,612  
Selling, general and administrative expense$192,042  $21,225  $213,267  
Other depreciation and amortization$9,033  $845  $9,878  
Purchase of rental equipment and refurbishments$153,113  $7,764  $160,877  
28



Nine Months Ended September 30, 2018
(in thousands)Modular - USModular - Other North AmericaTotal
Revenues:
Leasing and services revenue:
Modular leasing$306,920  $33,251  $340,171  
Modular delivery and installation93,190  11,250  104,440  
Sales revenue:
New units30,157  3,427  33,584  
Rental units14,258  1,555  15,813  
Total revenues444,525  49,483  494,008  
Costs:
Cost of leasing and services:
Modular leasing85,766  7,740  93,506  
Modular delivery and installation87,032  11,006  98,038  
Cost of sales:
New units21,347  2,433  23,780  
Rental units8,218  1,110  9,328  
Depreciation of rental equipment72,606  10,243  82,849  
Gross profit$169,556  $16,951  $186,507  
Other selected data:
Adjusted EBITDA$129,170  $12,856  $142,026  
Selling, general and administrative expense$150,248  $14,597  $164,845  
Other depreciation and amortization$6,962  $764  $7,726  
Purchase of rental equipment and refurbishments$104,462  $7,043  $111,505  
The following tables present a reconciliation of the Company’s income (loss) income from operations before income tax to Adjusted EBITDA by segment for the three and ninesix months ended SeptemberJune 30, 20192020 and 2018,2019, respectively:
Three Months Ended September 30, 2019Three Months Ended June 30, 2020
(in thousands)(in thousands)Modular - USModular - Other North AmericaTotal(in thousands)Modular - USModular - Other North AmericaTotal
(Loss) income from operations before income taxes$(1,768) $1,310  $(458) 
Income (loss) from operations before income taxesIncome (loss) from operations before income taxes$9,950  $2,598  $12,548  
Interest expenseInterest expense30,253  604  30,857  Interest expense28,208  311  28,519  
Depreciation and amortizationDepreciation and amortization42,699  4,877  47,576  Depreciation and amortization44,355  4,022  48,377  
Currency losses, net45  189  234  
Restructuring costs1,886  94  1,980  
Currency (gains) losses, netCurrency (gains) losses, net70  (450) (380) 
Restructuring costs, lease impairment expense and other related chargesRestructuring costs, lease impairment expense and other related charges1,711  432  2,143  
Transaction costsTransaction costs1,619  —  1,619  
Integration costsIntegration costs4,609  874  5,483  Integration costs2,159  (6) 2,153  
Stock compensation expenseStock compensation expense1,813  —  1,813  Stock compensation expense2,227  —  2,227  
Other expense887   892  
Other incomeOther income314  —  314  
Adjusted EBITDAAdjusted EBITDA$80,424  $7,953  $88,377  Adjusted EBITDA$90,613  $6,907  $97,520  

2927



Three Months Ended September 30, 2018Three Months Ended June 30, 2019
(in thousands)(in thousands)Modular - USModular - Other North AmericaTotal(in thousands)Modular - USModular - Other North AmericaTotal
(Loss) income from operations before income taxes$(44,519) $1,283  $(43,236) 
Loss (income) from operations before income taxesLoss (income) from operations before income taxes(13,473) 855  (12,618) 
Loss on extinguishment of debtLoss on extinguishment of debt7,244  —  7,244  
Interest expenseInterest expense42,831  616  43,447  Interest expense31,214  454  31,668  
Depreciation and amortizationDepreciation and amortization35,105  4,149  39,254  Depreciation and amortization41,943  4,974  46,917  
Currency gains, netCurrency gains, net(112) (313) (425) Currency gains, net(75) (279) (354) 
Restructuring costs5,895  242  6,137  
Restructuring costs, lease impairment expense and other related chargesRestructuring costs, lease impairment expense and other related charges3,203  (51) 3,152  
Goodwill and other impairmentsGoodwill and other impairments268  80  348  
Integration costsIntegration costs7,443  10  7,453  Integration costs7,260  982  8,242  
Stock compensation expenseStock compensation expense1,050  —  1,050  Stock compensation expense1,900  —  1,900  
Transaction costs10,490  182  10,672  
Other expense (income)271  (5) 266  
Other incomeOther income1,063  (8) 1,055  
Adjusted EBITDAAdjusted EBITDA$58,454  $6,164  $64,618  Adjusted EBITDA$80,547  $7,007  $87,554  

Nine Months Ended September 30, 2019Six Months Ended June 30, 2020
(in thousands)(in thousands)Modular - USModular - Other North AmericaTotal(in thousands)Modular - USModular - Other North AmericaTotal
(Loss) income from operations before income taxes$(26,866) $2,670  $(24,196) 
Loss on extinguishment of debt7,244  —  7,244  
Income (loss) from operations before income taxesIncome (loss) from operations before income taxes$5,678  $3,986  $9,664  
Interest expenseInterest expense93,354  1,999  95,353  Interest expense56,136  640  56,776  
Depreciation and amortizationDepreciation and amortization123,991  14,827  138,818  Depreciation and amortization88,885  8,514  97,399  
Currency gains, net(160) (276) (436) 
Goodwill and other impairments4,507  569  5,076  
Restructuring costs8,460  623  9,083  
Currency (gains) losses, netCurrency (gains) losses, net(455) 973  518  
Restructuring costs, lease impairment expense and other related chargesRestructuring costs, lease impairment expense and other related charges3,066  678  3,744  
Transaction costsTransaction costs11,050  —  11,050  
Integration costsIntegration costs21,221  2,642  23,863  Integration costs3,855  (16) 3,839  
Stock compensation expenseStock compensation expense5,003  —  5,003  Stock compensation expense4,014  —  4,014  
Other expense (income)1,818  (14) 1,804  
Other incomeOther income67  (9) 58  
Adjusted EBITDAAdjusted EBITDA$238,572  $23,040  $261,612  Adjusted EBITDA$172,296  $14,766  $187,062  

Nine Months Ended September 30, 2018
(in thousands)Modular - USModular - Other North AmericaTotal
Loss from operations before income taxes$(55,360) $(1,397) $(56,757) 
Interest expense65,654  1,667  67,321  
Depreciation and amortization79,568  11,007  90,575  
Currency losses, net159  1,012  1,171  
Restructuring costs6,962  252  7,214  
Integration costs14,858  10  14,868  
Stock compensation expense2,225  —  2,225  
Transaction costs14,539  251  14,790  
Other expense565  54  619  
Adjusted EBITDA$129,170  $12,856  $142,026  

Six Months Ended June 30, 2019
(in thousands)Modular - USModular - Other North AmericaTotal
Loss (income) from operations before income taxes$(23,520) $1,251  $(22,269) 
Loss on extinguishment of debt7,244  —  7,244  
Interest expense61,796  987  62,783  
Depreciation and amortization80,992  9,812  90,804  
Currency gains, net(205) (465) (670) 
Restructuring costs, lease impairment expense and other related charges7,381  512  7,893  
Goodwill and other impairments2,069  569  2,638  
Integration costs16,612  1,768  18,380  
Stock compensation expense3,190  —  3,190  
Other income931  (19) 912  
Adjusted EBITDA$156,490  $14,415  $170,905  


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NOTE 1718 - Income (Loss) Per Share
Basic income (loss) per share (“EPS”) is calculated by dividing net lossincome/(loss) attributable to WillScot by the weighted average number of shares of Class A common sharesstock outstanding during the period. The shares of Class A common sharesstock issued as a result of the vesting of RSUs and RSAs as well asfor warrants exercised or redeemed during the exercise of stock options,three and six months ended June 30, 2020, were included in EPS based on the weighted average number of days in which they were vested and outstanding during the period. Concurrently with the Business Combination, 12,425,000
Shares of WillScot's Class A common shares were placed into escrow by shareholders and became ineligible to vote or participate in the economic rewards available to the other Class A shareholders. Escrowed shares were therefore excluded from the EPS calculation while deposited in the escrow account. 6,212,500 of the escrowed shares were released to shareholders on January 19, 2018, and the remaining escrowed shares were released to shareholders on August 21, 2018.
Class B common sharesstock have no rights to dividends or distributions made by the Company and, in turn, are excluded from the EPS calculation. Pursuant toAs contemplated by the exchange agreement entered into by WS Holding's shareholders,Merger Agreement on June 30, 2020, the Sapphire has the right, but not the obligation, to exchangeExchange was completed and all but not less than all, of its shares of WSClass B common stock were cancelled and Sapphire Holdings into newly issuedreceived 10,641,182 shares of WillScot’s Class A common stock in a private placement transaction.stock.
Diluted EPS is computed similarly to basic EPS, except that it includes the potential dilution that couldwould occur if dilutivedilutive securities were exercised. Effects of potentially dilutive securities are presented only in periods in which they are dilutive.
Stock options and warrants representing 534,188 and 9,999,579 shares of Class A common stock outstanding for the three months ended September 30, 2019 were excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive. Stock options, Time-Based RSUs, RSAs, and warrants representing 386,875, 1,071,721, 52,755, and 22,183,513 shares of Class A common stock outstanding for the nine months ended September 30, 2019 were excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive. Market-Based RSUs representing 294,697 shares of Class A common stock outstanding for the nine months ended September 30, 2019, which can vest at 0% to 150% of the amount granted, were excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive.
Stock options, Time-Based RSU, RSAs and warrants representing 589,257, 886,680, 27,675 and 44,750,000 shares of Class A common stock outstanding for the three and nine months ended September 30, 2018, were excluded from the computation of diluted EPS because their effect would have been anti-dilutive.
The following table is a reconciliation of net income (loss) and weighted-average shares of common stock outstanding for purposes of calculating basic and diluted income (loss) per share for the three and nine months ended September 30, 2019 and 2018:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands, except per share numbers)2019201820192018
Numerator
Net income (loss)$762  $(36,729) $(22,174) $(43,185) 
Net income (loss) attributable to non-controlling interest, net of tax273  (3,210) (1,449) (3,715) 
Net income (loss) attributable to WillScot$489  $(33,519) $(20,725) $(39,470) 
Denominator
Average shares outstanding - basic108,720,857  90,726,920  108,646,741  82,165,909  
Average effect of dilutive securities:
Warrants2,828,202  —  —  —  
RSAs5,614  —  —  —  
Time-Based RSUs272,622  —  —  —  
Market-Based RSUs216,571  —  —  —  
Average shares outstanding - diluted112,043,866  90,726,920  108,646,741  82,165,909  
Income (loss) per share
Net income (loss) per share attributable to WillScot common shareholders - basic$0.00  $(0.37) $(0.19) $(0.48) 
Net income (loss) per share attributable to WillScot common shareholders - diluted$0.00  $(0.37) $(0.19) $(0.48) 

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NOTE 1819 - Related Parties
Related party balances included in the Company’s consolidated balance sheetsheets at SeptemberJune 30, 20192020 and December 31, 2018,2019, consisted of the following:
(in thousands)(in thousands)Financial statement line ItemSeptember 30, 2019December 31, 2018(in thousands)Financial statement line ItemJune 30, 2020December 31, 2019
Receivables due from affiliatesReceivables due from affiliatesPrepaid expenses and other current assets$44  $122  Receivables due from affiliatesAccounts receivable, net$20  $26  
Amounts due to affiliates(a)Amounts due to affiliates(a)Accrued liabilities(147) (1,379) Amounts due to affiliates(a)Accrued liabilities(2,174) (883) 
Total related party liabilities, net$(103) $(1,257) Total related party liabilities, net$(2,154) $(857) 
On November 29, 2017, in connection with the closing of the Business Combination, the Company, WSII, WS Holdings and the Algeco Group entered into a transition services agreement (the “TSA”).(a) The Company had $0.1accrued expenses of $0.0 million in receivables due from affiliates pertaining to the TSAand $0.6 million at June 30, 2020 and December 31, 2018.
The Company was reimbursed $0.4 million by an affiliate for claims paid under an insurance program during the nine months ended September 30, 2019.
The Company accrued expenses of $1.2 million at December 31, 2018,2019, respectively, included in amounts due to affiliates, related to rental equipment purchases from an affiliateentity within the Algeco Group. NaN of the Algeco Group.Company's directors also serve on the board of directors to a consulting firm with which the Company incurs professional fees.
Related party transactions included in the Company’s condensed consolidated statementstatements of operations for the three and ninesix months ended SeptemberJune 30, 20192020 and 2018,2019, respectively, consisted of the following:
Three Months Ended
September 30,
Nine Months Ended
September 30,
Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands)(in thousands)Financial statement line item2019201820192018(in thousands)Financial statement line item2020201920202019
Leasing revenue from related partiesLeasing revenue from related partiesModular leasing revenue$81  $104  $232  $629  Leasing revenue from related partiesModular leasing revenue$294  $76  $827  $150  
Rental unit sales to related partiesRental unit sales—  1,548  —  1,548  
Consulting expense to related party(a)
Consulting expense to related party(a)
Selling, general & administrative expenses(2,158) (229) (2,996) (501) 
Total related party income, net$81  $1,652  $232  $2,177  Total related party expense, net$(1,864) $(153) $(2,169) $(351) 
(a) NaN of the Company's directors also serve on the board of directors to a consulting firm with which the Company incurs professional fees.
On August 22, 2018, WillScot’s majority stockholder, Sapphire Holdings, entered into a margin loan (the "Margin Loan") under which all of its WillScot Class A common stock was pledged to secure $125.0 million of borrowings under the loan agreement. WillScot is not a party to the loan agreement and has no obligations thereunder, but WillScot delivered an issuer agreement to the lenders under which WillScot has agreed to certain obligations relating to the shares pledged by Sapphire Holdings and, subject to applicable law and stock exchange rules, not to take any actions that are intended to materially hinder or delay the exercise of any remedies with respect to the pledged shares. In connection with the Margin Loan, on August 24, 2018, WSII entered into a two-year supply agreement with Target Logistics Management LLC, an affiliate controlled by Sapphire Holdings, under which, subject to limited exceptions, WSII acquired the exclusive right to supply modular units, portable storage units, and other ancillary products ordered by the affiliate in the US. As of June 30, 2020, the 59,708,536 shares of WillScot Class A common stock pledged by Sapphire Holdings represented approximately 49% of WillScot’s issued and outstanding Class A shares. As of July 31, 2020, Sapphire Holdings represented approximately 26% of WIllScot Mobile Mini's issued and outstanding common stock.
On June 30, 2020, as contemplated by the Merger Agreement, and pursuant to the terms of an exercise notice delivered by Sapphire Holdings to WillScot, Sapphire Holdings exchanged each of its shares of common stock, par value $0.0001, of Holdings, pursuant to that certain existing exchange agreement, between WillScot and Sapphire Holdings, for 1.3261 shares of newly issued Class A Common Stock (the “Sapphire Exchange”). As a result of the Sapphire Exchange, all issued and outstanding shares of WillScot’s Class B common stock, par value $0.0001 per share (the “Class B Common Stock”), were automatically canceled for no consideration and the existing exchange agreement was automatically terminated.
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As a result of the Sapphire Exchange, Holdings became a wholly-owned subsidiary of WillScot. Sapphire Holdings received 10,641,182 shares of Class A Common Stock in the Sapphire Exchange (the “Exchange Shares”).
The Company had capital expenditures of rental equipment purchased from related party affiliates of $1.1$1.4 million and $1.2$1.7 million for three months ended SeptemberJune 30, 2020 and 2019, and 2018, respectively, and $4.3respectively. The Company had capital expenditures of rental equipment purchased from related party affiliates of $1.6 million and $3.0$3.2 million during the ninefor six months ended SeptemberJune 30, 20192020 and 2018, respectively.
The Company paid $0.6 million and $0.1 million in professional fees to an entity for which two of the Company’s Directors also served in the same role for that entity, during the three months ended September 30, 2019, and 2018, respectively, and $1.2 million and $1.1 million during the nine months ended September 30, 2019 and 2018, respectively.

NOTE 20 - Subsequent Events
On July 27, 2020, the Company announced the redemption of $49.0 million of its 2023 Senior Notes. The redemption will take place on August 11, 2020, at a redemption price equal to 103% plus accrued and unpaid interest.
On August 7, 2020, the Board approved a stock repurchase program that authorizes the Company, to deploy up to $250 million of its outstanding shares of common stock. 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.
The Company plans to repurchase its shares in open market transactions from time to time or through privately negotiated transactions in accordance with federal securities laws, at the Company’s discretion. The repurchase program, which has no expiration date, may be increased, suspended or terminated at any time. The program is expected to be implemented over the course of several years and will be conducted subject to the covenants in the agreements governing our indebtedness.

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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 Corporation ("WillScot"), our operations and our present business environment. Unless the context otherwise requires, “we,” “us,” “our” and the “Company” refers to WillScot and its subsidiaries. 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 six months ended June 30, 2020 or prior periods. As the Merger with Mobile Mini (hereinafter defined) was completed on July 1, 2020, unless the context otherwise requires, the terms “we”, “us”, “our” “Company” and “WillScot Mobile Mini” as used in these financial statements mean WillScot Corporation and its subsidiaries when referring to periods prior to July 1, 2020 (prior to the Merger) and to the combined company WillScot Mobile Mini Holdings Corp. when referring to periods on or after July 1, 2020 (after the Merger).
The consolidated financial statements were prepared in conformity with accounting principles generally accepted in the US (“GAAP”). We use certain non-GAAP financial information that we believe is important for purposes of comparison to prior periods and development of future projections and earnings growth prospects. This information is also used by management to measure the profitability of our ongoing operations and analyze our business performance and trends. Reconciliations of non-GAAP measures are provided in the Other Non-GAAP Financial Data and Reconciliations section.

On December 31, 2019, the 2019 financial statement amounts were adjusted for the adoption ASU 2016-02, Leases (Topic 842) ("ASC 842"), effective retroactively to January 1, 2019, and therefore may not agree to the Quarterly Reports filed on Form 10-Q for the respective periods of 2019.
Executive Summary and Outlook
We are thea leading provider of modular space and portable storage solutions in the United States (“US”), Canada and Mexico. As of SeptemberJune 30, 2019,2020, our branch network included overapproximately 120 locations and additional storagedrop lots to service our more than 50,000 customers across the US, Canada and Mexico. We offer our customers an extensive selection of “Ready to Work” modular space and portable storage solutions and now manage a fleet of approximately 130,000with over 125,000 modular space units and over 26,00025,000 portable storage units. units in our fleet.
Equipment leasing is our core business. 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 Modular Lease Revenue is highly predictable due to its reoccurring nature and the underlying stability and diversification of our lease portfolio. Our average minimum contractual lease term at the time of delivery is over 11 months. However, given our customers value flexibility, they consistently extend their leases or renew on a month-to-month basis such that the average effective duration of our lease portfolio is 34 months.
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We remain focused on our core priorities of growing modular leasing revenues by increasing modular space units on rent, both organically and through our consolidation strategy, delivering “Ready to Work” solutions to our customers with value added products and services ("VAPS"), and on continually improving the overall customer experience.
SinceOur customers operate in a diversified set of end-markets, including commercial and industrial, construction, education, energy and natural resources, government and other end-markets. We track several market leading indicators including those related to our two largest end markets, the end of 2017, we have complemented our already strong organic growth by acquiringcommercial and integrating regional and national competitors in Acton Mobile Holdings LLC (“Acton”) (acquired in December 2017) and Modular Space Holdings, Inc. ("ModSpace") (acquired in August 2018). The remaining integration activities for these acquisitions as of September 30, 2019 primarily consist of continued real estate exitsindustrial segment and the related fleet relocations required to exit these properties. As of September 30, 2019, we have completedconstruction segment, which collectively accounted for approximately 75%82% of our planned real estate exits, and the remaining exits will continue during the remainder of 2019 and into 2020. Five heldrevenues for sale properties were sold during the three months ended SeptemberJune 30, 20192020.
Significant Developments
Mobile Mini Merger
On March 2, 2020, we announced that we entered into an Agreement and Plan of Merger (the "Merger") with Mobile Mini, Inc. (“Mobile Mini”). During the second quarter, we obtained all required regulatory approvals and stockholder approvals from the Company's and Mobile Mini’s stockholders and we closed the Merger on July 1, 2020 at which time Mobile Mini became a wholly-owned subsidiary of WillScot. Concurrent with the closing of the Merger, WillScot changed its name to WillScot Mobile Mini Holdings Corp ("WillScot Mobile Mini"). We believe that the merger will result in strategic and financial benefits by combining the two industry leaders in the complementary modular space and portable storage solutions markets.
Financing Activities

In anticipation of the Merger, on June 15, 2020, we completed a private offering of $650.0 million in aggregate principal amount of 6.125% senior secured notes due 2025 (the “2025 Secured Notes”). The gross offering proceeds from the 2025 Secured Notes of $650.0 million and $5.1 million of interest due through August 1, 2020 were deposited into an escrow account, pending the closing of the Merger. In connection with completion of the Merger on July 1, 2020, the net offering proceeds were released and the proceeds were utilized to repay the 2022 Secured Notes (see Note 9 – Debt), repay Mobile Mini secured notes and pay certain fees and expenses related to the Merger and financing transactions. At June 30, 2020 the $655.1 million in the escrow account is reported as restricted cash on the condensed consolidated balance sheet.
On July 1, 2020, in connection with the completion of the Merger, Williams Scotsman Holdings Corp. (“Holdings”), WSII, and certain of its subsidiaries, including Mobile Mini and certain of its consolidated subsidiaries (the “Mobile Mini Entities”), entered into a new asset-based credit agreement (the "New ABL Facility"), that provides for netrevolving credit facilities in the aggregate principal amount of up to $2.4 billion. On July 1, 2020, in connection with the completion of the Merger, approximately $1.47 billion of proceeds from the New ABL Facility were used to finance the repayment of $4.3 million. For the nineWillscot ABL facility, the Mobile Mini ABL facility, fees and expenses related to the Merger and the financing transactions, including $36 million related to the New ABL Facility upfront fees which will be recorded as deferred financing costs in the third quarter. The New ABL Facility matures July 1 2025 (see Note 9 – Debt).
Upon completion of the aforementioned transactions, WillScot Mobile Mini Holdings Corp. had approximately $2,683.7 million of gross debt and finance leases outstanding and approximately $915 million of availability under its New ABL Facility, and 227,721,220 shares outstanding as of July 31, 2020. On July 27, 2020 the Company announced an opportunistic redemption of $49 million of its 2023 senior secured notes. The redemption will occur on August 11, 2020 and is expected to further optimize our debt structure and reduce future interest expense.

COVID-19 Impact on Business

During the three and six months ended SeptemberJune 30, 2019, total net sale proceeds2020, financial results for our operations were impacted by the COVID-19 outbreak as we began to experience reduced demand as a portion of new project deliveries from held for sale propertiesour customers were $12.9 million. These exits, along with other integration actions taken, have allowed us to realize approximately $31.2 million of cumulative synergies from these acquisitions. Approximately 70%either cancelled or delayed as a result of the estimated annualized cost synergies fromCOVID-19 pandemic and we expect our financial results may continue to be adversely impacted in the acquisitionsfuture. During the second quarter of $70.0 million2020, our modular space deliveries were down 19% year over year due to reduced demand primarily attributable to the current global economic situation as a consequence of the COVID-19 pandemic. The reduced delivery demand has impacted our modular leasing revenues as well as our delivery and installation revenues. As a result, we have taken significant actions to reduce variable costs and capital spending. Due to the long lease durations in our run ratebusiness, the predictability of our cash inflows, and the fact that the majority of our gross profit is from units already out on rent at the beginning of the period, we believe we have forward visibility into our cash flows and are able to plan ahead to adjust for varying demand levels.
Since the outbreak of COVID-19 was designated as a global pandemic by the World Health Organization in March, our operations have generally continued to operate normally, albeit at lower activity levels, with additional safety protocols in place as we have been considered an essential business in most jurisdictions. However, there have been significant changes to the global economic situation as a consequence of September 30, 2019. These acquisitions, coupledthe COVID-19 pandemic. The global pandemic has resulted in significant global social and business disruption, and in response we have modified the way we communicate and conduct business with WillScot's innovative "Readyour customers, suppliers and employees. The following summarizes many of the key actions we have taken in response to Work" solutionsthe pandemic.
Employee Safety and commitmentHealth
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The Company has implemented various employee safety measures to contain the spread of COVID-19, including domestic and international travel restrictions, the promotion of social distancing and work-from-home practices, extensive cleaning protocols, daily symptom assessments, and enhanced use of personal protective equipment such as masks. We are closely monitoring all guidance provided by public agencies such as the Centers for Disease Control and Prevention in the US or the Public Health Agency of Canada to ensure the safety of our employees, vendors, and customers as our top priority.
Sales and Leasing Operations
The Company is responding to shelter-in-place and similar government orders, which vary significantly across our geographic markets. As a result of the shelter-in-place orders and increased social distancing measures, some of our markets, such as special events and sports and entertainment, have experienced sustained reductions in demand for new projects. Other sectors such as health care have seen increased demand, and other sectors such as construction have remained active but with varying degrees of project disruption, some of which are quite significant. We are also responding to demand across our end markets from customers in need of additional office space to facilitate social distancing. As the Company serves many critical sectors of the economy, the Company will continue to help support customers who remain operational, as well as those who are actively engaged in the COVID-19 response. We believe that our branch locations are considered essential businesses in most jurisdictions and as such have continued to operate normally with the aforementioned safety protocols in place, while our customer service have solidified WillScot's market leading position.and sales teams are working closely with customers to meet current demand. The impact on future demand for new projects will depend greatly on the degree and duration to which governments restrict business and personal activities going forward and when businesses resume normal operations.
Cost Reductions
Early in the second quarter, in anticipation of a potential decline in demand for new projects, the Company implemented a range of actions aimed at temporarily reducing costs and preserving liquidity. These actions include suspending previously planned compensation increases for its corporate and shared services employees until the third quarter of 2020, included putting a temporary freeze on hiring, significant planned reductions to overtime and external variable labor costs, and significant reductions in other discretionary spending including marketing, travel and entertainment, outside professional fees and other aspects of the business. As we saw reduced demand persist through the second quarter, we also implemented several internal labor cost reductions to right-size our operations for these lower demand levels. Lastly, reduced demand for new projects has allowed the Company to reduce or delay capital spending, including new fleet purchases, refurbishments of existing equipment, and improvements to branch infrastructure. The Company continues to monitor new project demand on a daily basis, and given the flexibility in our cost structure, can adjust costs and capital spending rapidly to align with demand levels.
Second Quarter Highlights
For the three months ended SeptemberJune 30, 2019,2020, key drivers of financial performance included:
Total revenuesModular leasing revenue increased by $53.4$4.3 million, or 24.4%2.3%, as compared to the same period in 2018,2019, however total revenues decreased by $6.8 million, or 2.6%, driven by a $64.7$5.1 million, or 34.3% increase49.0% decrease in our core leasing and services revenues from both organic pricing growth, and the impact of an additional 1.5 months of contribution from the ModSpace acquisition in the third quarter of 2019. Increases in our core leasing and services revenues were partially offset by new and rental unit sales which decreased by $9.4revenue, a $4.4 million or 45.0%7.9% decrease in modular delivery and installation revenue primarily driven by $2.0reduced demand for new project deliveries since mid-March of 2020 as a result of new project cancellations and delays as a result of the COVID-19 pandemic, and a $1.7 million or 20.8%, respectively, driven by large sales originating from ModSpace that were completed subsequent to the acquisition14.8% decrease in the third quarter of 2018 that did not reoccur in 2019.new sale revenue. Key modular leasing revenue drivers include:
Consolidated modular space average monthly rental rate increased to $630$669 representing a 12.3%9.5% increase year over year.
Consolidated average modular space units on rent increased 15,820decreased 5,204 or 21.0%5.6% year over year, driven by an additional 1.5 monthslower deliveries, including reduced demand for new project deliveries as a result of contribution from the ModSpace acquisition,COVID-19 pandemic, and average modular space utilization decreased 60340 basis points (“bps”) year over year to 71.2%68.5%.
On a pro forma basis, including results of WillScot and ModSpace for all periods presented,
Modular leasing revenues increased $14.0 million, or 7.9%, driven by a 13.9% year over year increase in modular space average monthly rental rates as a result of our price optimization tools and processes, as well as by continued growth in our “Ready to Work” solutions and increased VAPS penetration across our customer base.
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Sales revenue declined $41.0 million driven primarily by one large new sale recognized in 2018 from ModSpace related to hurricane relief in the amount of $26.3 million in our Modular - US segment.
Total revenues decreased $28.3 million, or 9.4%, as the impact of non-recurring sales in the prior year offset continued strong growth in our core leasing revenues.
Modular space units on rent decreased 5.2% year over year, and utilization decreased 150 bps.
Modular - US segment revenues, which represented 91.0%91.9% of revenue for the three months ended SeptemberJune 30, 2019, increased2020, decreased by $50.1$0.5 million, or 25.4%0.2%, as compared to the same period in 2018,2019 driven primarily by reduced delivery and installation revenues due to reduced demand for new project deliveries, however modular leasing revenues increased $6.5 million, or 3.9% through:
Modular space average monthly rental rate of $632,$681, increased 13.1%11.3% year over year including the dilutive impacts of acquisitions.year. Improved pricing was driven by a combination of our price optimization tools and processes, as well as by continued growth in our “Ready to Work” solutions and increased VAPS penetration across our customer base.
Average modular space units on rent increased 14,075,decreased 4,780, or a 20.7%5.7% year over year increase, due to the impact of an additional 1.5 months of contribution from the ModSpace acquisition in the third quarter of 2019.decrease.
Average modular space monthly utilization decreased 60 bps350 basis points to 73.2%70.6% for the three months ended SeptemberJune 30, 2019,2020, as compared to the three months ended SeptemberJune 30, 2018.
On a pro forma basis, including results of WillScot and ModSpace for all periods presented, average modular space monthly rental rate increased 15.1% year over year, which is the eighth consecutive quarter of double digit growth. Average modular space units on rent and utilization declined 1.5% and 90 bps, respectively, for the three months ended September 30, 2019 versus the second quarter of 2019.
Modular - Other North America segment revenues which represented 9.0%8.1% of revenues for the three months ended SeptemberJune 30, 2019, increased2020, decreased by $3.3$6.4 million, or 15.5%23.5% as compared to the same period in 2018. Increases2019. Decreases were driven primarily by:by decreased new and rental unit sales which decreased by $5.2 million. Modular space leasing revenues decreased by $2.1 million, or 12.4%, driven by lower average units on rent
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and stronger US dollar in Q2 2020 relative to prior year. These decreases were partially offset by net increases in modular delivery and installation revenues, which supported sequential unit on rent growth within the quarter:
Average modular space monthly rental rate increased 5.3%decreased 6.8% to $618.$562, which was significantly impacted by unfavorable foreign currency movements. On a constant currency basis, modular space average rental rate was down 0.8% year over year primarily due to major project timing in Alaska.
Average modular space units on rent increaseddecreased by 1,745424 units, or 23.5%4.7% as compared to the same period in 2018 due2019, however increased 2.9% sequentially from March to the impact of an additional 1.5 months of contribution from the ModSpace acquisition the third quarter of 2019.June 2020.
Average modular space monthly utilization decreased by 10 bps260 basis points as compared to the same period in 20182019 to 57.2%.
On a pro forma53.7%, however increased 170 basis including results of WillScot and ModSpace for all periods presented, average modular space monthly rental rate increased 6.4% year over year. Average modular space units on rent and utilization increased 1.7% and 90 bps, respectively, for the three months ended September 30, 2019 versus the second quarter of 2019.points from March to June 2020.
Generated consolidated net income of $0.8$12.8 million for the three months ended SeptemberJune 30, 2019,2020, which included $7.5$5.9 million of discrete costs expensed in the period related to acquisition and integration activities, including $1.6 million of transaction costs related to the ModSpace integration, including $5.5announced Mobile Mini merger, $2.2 million of integration costs, and $2.0$2.1 million of restructuring cost.costs, lease impairment expense and other related charges.
Generated Adjusted EBITDA of $88.4$97.5 million for the three months ended SeptemberJune 30, 2019,2020, representing an increase of $23.8$10.0 million, or 36.8%11.4%, as compared to the same period in 2018,2019, which includes the impact of an additional 1.5 months of contribution from the ModSpace acquisition in the third quarter of 2019, as well as continued realization of commercial and cost synergies associated with the ModSpace acquisition, and Acton acquisitions.significant cost reductions as a result of actions taken to reduce variable cost in a reduced demand environment as a consequence of the COVID-19 pandemic. Our Adjusted EBITDA forMargin of 38.0% in the Modular - US segment and the Modular - Other North America segment, respectively, was $80.4 million and $8.0 million for the three months ended September 30, 2019.second quarter increased 480 basis points relative to prior year.
Generated Free Cash Flow of $1.3$39.0 million for the three months ended SeptemberJune 30, 2020, representing an increase of $37.4 million as compared to the same period in 2019, as net cash provided by operating activities of $39.0$75.4 million was partially reinvested primarily in value added products and fleet refurbishments to support growth of modular leasing revenues (net cash used in investing activities of $37.8$36.4 million).
Our customers operate in a diversified set of end-markets, including commercial and industrial, construction, education, energy and natural resources, government and other end-markets. We track several market leading indicators including those related to our two largest end markets, the commercial and industrial segment and the construction segment, which collectively accounted for approximately 80% of our revenues in the three months ended September 30, 2019. We believe market fundamentals underlying these markets remain favorable, and we expect continued modest market growth in the next several years. As, however, reinvestment was at lower levels than originally planned as a result of the potential for increasedreduced capital spending due to tax reform in the US, discussions of increased infrastructure spending, and rebuilding in areas impacted by natural disasters in 2017 and 2018 across the US, we are confident that we will continue to seeneeds given reduced demand for our products.new project deliveries.

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Consolidated Results of Operations
Three Months Ended SeptemberJune 30, 20192020 Compared to the Three Months Ended SeptemberJune 30, 20182019
Our consolidated statements of operations for the three months ended SeptemberJune 30, 20192020 and 20182019 are presented below:
Three Months Ended September 30,2019 vs. 2018 $ ChangeThree Months Ended June 30,2020 vs. 2019 $ Change
(in thousands)(in thousands)201920182019 vs. 2018 $ Change(in thousands)202020192020 vs. 2019 $ Change
Revenues:Revenues:
Leasing and services revenue:Leasing and services revenue:Leasing and services revenue:
Modular leasingModular leasing$191,294  $141,660  $49,634  Modular leasing$190,143  $185,818  $4,325  
Modular delivery and installationModular delivery and installation61,883  46,777  15,106  Modular delivery and installation51,640  55,966  (4,326) 
Sales revenue:Sales revenue:Sales revenue:
New unitsNew units11,536  20,920  (9,384) New units9,763  11,507  (1,744) 
Rental unitsRental units7,627  9,567  (1,940) Rental units5,316  10,422  (5,106) 
Total revenuesTotal revenues272,340  218,924  53,416  Total revenues256,862  263,713  (6,851) 
Costs:Costs:Costs:
Costs of leasing and services:Costs of leasing and services:Costs of leasing and services:
Modular leasingModular leasing58,168  39,215  18,953  Modular leasing47,747  55,073  (7,326) 
Modular delivery and installationModular delivery and installation54,364  42,390  11,974  Modular delivery and installation43,523  48,468  (4,945) 
Costs of sales:Costs of sales:Costs of sales:
New unitsNew units7,421  15,089  (7,668) New units6,331  7,999  (1,668) 
Rental unitsRental units5,092  5,750  (658) Rental units3,803  6,721  (2,918) 
Depreciation of rental equipmentDepreciation of rental equipment43,869  35,534  8,335  Depreciation of rental equipment45,494  43,968  1,526  
Gross profit103,426  80,946  22,480  
Gross ProfitGross Profit109,964  101,484  8,480  
Expenses:Expenses:Expenses:
Selling, general and administrativeSelling, general and administrative68,159  71,897  (3,738) Selling, general and administrative65,272  70,385  (5,113) 
Other depreciation and amortizationOther depreciation and amortization3,707  3,720  (13) Other depreciation and amortization2,883  2,949  (66) 
Impairment losses on long-lived assetsImpairment losses on long-lived assets—  —  —  Impairment losses on long-lived assets—  348  (348) 
Lease impairment expense and other related chargesLease impairment expense and other related charges1,394  1,520  (126) 
Restructuring costsRestructuring costs1,980  6,137  (4,157) Restructuring costs749  1,632  (883) 
Currency losses (gains), netCurrency losses (gains), net234  (425) 659  Currency losses (gains), net(380) (354) (26) 
Other income, netOther income, net(1,053) (594) (459) Other income, net(1,021) (1,290) 269  
Operating incomeOperating income30,399  211  30,188  Operating income41,067  26,294  14,773  
Interest expenseInterest expense30,857  43,447  (12,590) Interest expense28,519  31,668  (3,149) 
Loss from operations before income tax(458) (43,236) 42,778  
Loss on extinguishment of debt Loss on extinguishment of debt—  7,244  (7,244) 
Income (loss) from operations before income taxIncome (loss) from operations before income tax12,548  (12,618) 25,166  
Income tax benefitIncome tax benefit(1,220) (6,507) 5,287  Income tax benefit(285) (1,180) 895  
Net income (loss)Net income (loss)762  (36,729) 37,491  Net income (loss)12,833  (11,438) 24,271  
Net income (loss) attributable to non-controlling interest, net of taxNet income (loss) attributable to non-controlling interest, net of tax273  (3,210) 3,483  Net income (loss) attributable to non-controlling interest, net of tax1,343  (832) 2,175  
Net income (loss) attributable to WillScotNet income (loss) attributable to WillScot$489  $(33,519) $34,008  Net income (loss) attributable to WillScot$11,490  $(10,606) $22,096  
Comparison of Three Months Ended SeptemberJune 30, 20192020 and 20182019
Revenue: TotalTotal revenue increased $53.4decreased $6.8 million, or 24.4%2.6%, to $272.3$256.9 million for the three months ended SeptemberJune 30, 20192020 from $218.9$263.7 million for the three months ended SeptemberJune 30, 2018.2019. The increasedecrease was primarily the result of a 34.3% increase$5.1 million, or 49.0%, decrease in leasingrental unit sales, $1.7 million, or 14.8%, decrease in new unit sales, and services revenue driven by increased volumes from acquisitions and improved pricing. Increased volumes were driven by units acquired as part of the ModSpace acquisition, as well as increased$4.4 million, or 7.9%, decrease in modular delivery and installation revenues on the combined rental fleet of 32.3% due to increased transaction volumes and higher revenues per transaction. Average modular space monthly rental rates increased 12.3% to $630revenue for the three months ended SeptemberJune 30, 2019,2020 as compared to the same period in 2019. The decline in modular delivery and average modular space units on rent increased 15,820 units, or 21.0%, dueinstallation revenues was primarily driven by lower delivery volumes during the quarter related to the impact of new project cancellations and delays as a result of the COVID-19 pandemic. These decreases were partially offset by an additional 1.5increase of $4.3 million, or 2.3%, in modular leasing revenue as compared to the same period in 2019 driven by improved pricing and value-added products on modular space units.
Total average units on rent for the three months ended June 30, 2020 and 2019 were 102,965 and 108,844, respectively. The decrease was due primarily to lower delivery volumes, including reduced demand for new projects since mid-March of contribution from2020 as a result of COVID-19, with modular space average units on rent decreasing 5,204 units, or 5.6%, for the ModSpace acquisition inthree months ended June 30, 2020 as compared to the third quarter ofthree months ended June 30, 2019. Modular space average monthly rental rates increased 9.5% to $669 for the three months ended June 30, 2020. Improved pricing was driven by a combination
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of our price optimization tools and processes, as well as by continued growth in our “Ready to Work” solutions and increased VAPS penetration across our customer base, offset partially by lower average modular space monthly rental rates on acquired units for ModSpace. The increase in leasing and services revenue was partially offset by decreases of $9.4 million, or 45.0%, and $2.0 million, or 20.8%, on new unit and rental unit sales, respectively, as compared to the same period in 2018 driven by large sales originating from ModSpace that were completed subsequent to the acquisition in the third quarter of 2018 that did not reoccur in 2019.
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On a pro forma basis, including results of WillScot and ModSpace for all periods presented, total revenues decreased $28.3 million, or 9.4%, year-over-year for the three months ended September 30, 2019. This decline was driven by reduced new sales, which declined $34.7 million, or 75.1%, driven primarily by one large new sale recognized in 2018 in the amount of $26.3 million in our Modular - US segment, and decreased rental unit sales, which declined $6.3 million, or 45.0%. The declines in sales volumes were partially offset by increases in our core modular leasing revenues, which increased $14.0 million, or 7.9%, driven primarily by a 13.9% increase in average modular space monthly rental rates.
Totalbase. Portable storage average units on rent for the three months ended September 30, 2019 and 2018 were 107,649 and 91,194, respectively. The increase is due to the impact of an additional 1.5 months of contribution from the ModSpace acquisition in the third quarter of 2019, with modular space average units on rent increasing 15,820decreased by 675 units, or 21.0%4.1%, for the three months ended SeptemberJune 30, 2019. Modular space average monthly rental rates increased 12.3% for the three months ended September 30, 2019. Portable storage average units on rent increased by 635 units, or 4.0%, for the three months ended September 30, 2019.2020. Average portable storage monthly rental rates increased 2.5%decreased 0.8% to $120 for the three months ended SeptemberJune 30, 2019.2020. The average modular space unit utilization rate during the three months ended SeptemberJune 30, 20192020 was 71.2%68.5%, as compared to 71.8%71.9% during the same period in 2018.2019. This decrease was driven by lower average modular space units on rent, partially offset by a lower total modular space unit fleet size. The average portable storage unit utilization rate during the three months ended SeptemberJune 30, 20192020 was 63.0%62.5%, as compared to 68.0%63.3% during the same period in 2018.2019. The decrease in average portable storage utilization rate was driven by organic declines in the number of portable storage average units on rent.
Gross Profit: Our gross profit percentage was 38.0%42.8% and 37.0%38.5% for the three months ended SeptemberJune 30, 20192020 and 2018,2019, respectively. Our gross profit percentage, excluding the effects of depreciation, was 54.1%was 60.5% and 53.2%55.2% for thethe three months ended SeptemberJune 30, 20192020 and 2018,2019, respectively.
Gross profit increased $22.5$8.5 million, or 27.8%8.4%, to $103.4$110.0 million for the three months ended SeptemberJune 30, 20192020 from $80.9$101.5 million for the three months ended SeptemberJune 30, 2018.2019. The increase in gross profit is a result of a $30.6an $11.7 million increase in modular leasing gross profit and increased delivery and installation gross profit of $3.1$0.6 million. Increases in modular leasing and services gross profit were primarily as a result of increased revenues due to additional activity and units on rent as a result of the ModSpace acquisition as well as increased margins due to favorable average monthly rental rates on modular space units, and increasedmodular leasing cost savings due to lower delivery volumes that were achieved as a result of actions taken by the Company to scale back variable labor and material costs in response to lower demand for new project deliveries. Increased delivery and installation margins were driven primarily by higher pricing per transaction.transaction, offset partially by lower activity volumes due to reduced delivery demand. These increases were partially offset by increased depreciation of $8.4$1.5 million as a result of additional rental equipment acquired as part ofcapital investments made over the ModSpace acquisition, as well as continued capital investmentpast twelve months in our existing rental equipment.equipment and decreased new and rental unit sale margins of $2.2 million due to lower demand.
SG&A: Selling,Selling, general and administrative ("SG&A") decreased $3.7$5.1 million, or 5.1%7.2%, to $68.2$65.3 million for the three months ended SeptemberJune 30, 2019,2020, compared to $71.9$70.4 million for the three months ended SeptemberJune 30, 2018.2019. The primary driver of the decrease is related to lower discrete costs. Discrete items within SG&A decreased for the three months ended SeptemberJune 30, 2019,2020, compared to the three months ended SeptemberJune 30, 2018,2019, by $12.0$4.1 million as transaction and integration costs related to the ModSpace acquisition which closed in the third quarter of 2018 decreased $10.7 million and $2.1 million, respectively, but were partially offset by an increase in stock compensation expense of $0.8 million.
Decreases in discrete items were also offset by increased employee costs of $3.1 million driven by the increased size of the workforce, net of realized employee cost synergies savings to date achieved as a result of the restructuring activities; and increased occupancy costs of $0.6 million largely due to the expansion of our branch network and storage lots, including a portion of the expected cost savings as we have now exited approximately 75% of redundant real estate locations.
The remaining increases of $4.6 million are related to increased professional fees, insurance, computer, travel, office, bad debt, and other expenses related to operating a larger business as a result of our recent acquisitions and our expanded employee base and branch network.
We estimate incremental cost synergies of approximately $10.0 million related to the Acton and ModSpace acquisitions were realized in the three months ended September 30, 2019, which compares to approximately $2.4 million of synergies realized in the three months ended September 30, 2018, bringing cumulative synergies related to the Acton, Tyson, and ModSpace acquisitions from the dates of the acquisitions to September 30, 2019 to approximately $31.2 million. These cost synergies are consistent with our integration plans and we expect these activities to continue through 2019 as we continue our efforts to achieve expected annual recurring cost savings of over $70.0$5.6 million once our integration plans are fully executed and in our results.
Other Depreciation and Amortization:Other depreciation and amortization of $3.7 million remained flat for the three months ended September 30, 2019, as compared to the three months ended SeptemberJune 30, 2018.2019 were only partially offset by transaction costs related to the Merger of $1.6 million. Stock compensation expense increased $0.3 million and other costs decreased $0.4 million as compared to the three months ended June 30, 2019.
Excluding discrete items, SG&A decreased $1.0 million as a result of decreased expenses related to travel and entertainment, which drove a decrease of approximately $1.6 million and professional fees which decreased $1.6 million as compared to the prior year. These decreases were partially offset primarily by increased bad debt expense of $1.7 million compared to the prior year.
Restructuring Costs:Other Depreciation and Amortization: Restructuring costs were $2.0Other depreciation and amortization remained flat at $2.9 million for the three months ended SeptemberJune 30, 2019 as compared to $6.12020 and 2019.
Impairment Losses on Long-lived Assets: Impairment losses on long-lived assets were $0.3 million for the three months ended SeptemberJune 30, 2018. The2019 related to the valuation of properties classified as assets held for sale as a result of the ModSpace acquisition. No similar impairments occurred during the three months ended June 30, 2020.
Lease Impairment expense and Other Related Charges: Lease impairment expense and other related charges was $1.4 million for the three months ended June 30, 2020 as compared to $1.5 million for the three months ended June 30, 2019.
Restructuring Costs: In the three months ended June 30, 2020, the Company had $0.7 million of restructuring charges relatecosts primarily due to reductions in force across our branch network in response to COVID-19 economic conditions. In the three months ended June 30, 2019, $1.6 million of restructuring costs was recorded primarily related to employee termination and lease breakage costs related toas a result of the ModSpace and Acton acquisitions and integration.
Currency Losses (Gains), net: Currency losses (gains), net decreased by $0.6 million to a $0.2 million loss for the three months ended September 30, 2019 compared to aof $0.4 million gain for the three months ended SeptemberJune 30, 2018. The decrease in currency gains in 20192020 was primarily attributableflat compared to the impact of foreign currency exchange rate changes on loans and borrowings and intercompany receivables and payables denominated in a currency other than the subsidiaries’ functional currency.three months ended June 30, 2019.
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Other Income, Net: Other income, net was $1.1 million and $0.6$1.0 million for the three months ended SeptemberJune 30, 2019 and 2018, respectively. Other2020 compared to income net of $1.1$1.3 million for the three months ended SeptemberJune 30, 2019. Other income, net of $1.0 million for the three months ended June 30, 2020 reflects the reversal of a non-income tax liability of $1.3 million. Other income, net of $1.3 million for the three months ended June 30, 2019 was primarily related to $0.9 million of gains on real estate sold during the period anddriven by the receipt of $1.3$1.1 million of insurance proceeds related to assets damaged during Hurricane Irma in the third quarter, which contributed $0.4Harvey.
Interest Expense: Interest expense decreased $3.2 million, or 10.1%, to other income, net. Other income, net of $0.6$28.5 million for the three months ended SeptemberJune 30, 2018 was driven by the receipt of a settlement related to assets damaged during Hurricane Harvey which contributed $0.8 million to other income, net.
Interest Expense: Interest expense decreased $12.5 million, or 28.8%, to $30.92020 from $31.7 million for the three months ended SeptemberJune 30, 2019 from $43.4 million for the three months ended September 30, 2018.2019. The decrease in interest costs incurred during the three months ended September 30, 2018 included $20.5 million of bridge financing fees and upfront commitment fees relatedexpense is primarily attributable to the financingrepayment of the ModSpace acquisition. Interest expense for the three months ended September 30, 2019 includes an additional 1.5 months of expense under our current debt structure as compared to the three months ended September 30, 2018. In the third quarter of 2018, as part of financing the ModSpace acquisition, we upsized our ABL Facility to $1.425 billion, issued $300.0 million of senior secured notes (the "2023 Secured Notes"), and issued $200 million of 10% senior unsecured notes (the "Unsecured Notes"). Further, in the second quarter of 2019, we issued $190.0 millionthe partial redemption of Tack-on Notesour 2022 senior secured notes in aggregate principal amount to the 2023 Secured NotesDecember 2019, and used the proceeds to repay a portion of thelower interest rates and average balances outstanding on our ABL Facility. Subsequent to the issuance of the Tack-on Notes, we redeemed all $200.0 million in aggregate outstanding principal amount of the Unsecured Notes using proceeds from the ABL Facility.facility. See Note 89 to the condensed consolidated financial statements for further discussion of our debt.
Loss on Extinguishment of Debt: We redeemed $200.0 million in aggregate outstanding principal amount of our senior unsecured notes in the second quarter of 2019 at a redemption price of 102.0%, plus a make-whole premium of 1.1%, for total premiums of 3.1%. As a result, we recorded a loss on extinguishment of debt of $7.2 million, which included $6.2
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million of premium and $1.0 million related to the write-off of unamortized deferred financing fees
Income Tax Benefit: Income tax benefit decreased $5.3$0.9 million to $0.3 million for the three months ended June 30, 2020 compared to $1.2 million for the three months ended SeptemberJune 30, 2019 compared to $6.5 million for the three months ended September 30, 2018. 2019. The decrease in income tax benefit was driven by pre-tax income being offset by a tax benefit from a release of valuation allowance and discrete items in the three months ended June 30, 2020 as compared to discrete benefits recorded in the three months ended SeptemberJune 30, 2018 which did2019 that were not occur in the three months ended Septemberrecurring at June 30, 2019.2020.

Six Months Ended June 30, 2020 Compared to the Six Months Ended June 30, 2019
Our consolidated statements of operations for the six months ended June 30, 2020 and 2019 are presented below:
Six Months Ended
June 30,
2020 vs. 2019 $ Change
(in thousands)20202019
Revenues:
Leasing and services revenue:
Modular leasing$378,495  $363,110  $15,385  
Modular delivery and installation102,710  105,966  (3,256) 
Sales revenue:
New units19,376  26,348  (6,972) 
Rental units12,102  21,974  (9,872) 
Total revenues512,683  517,398  (4,715) 
Costs:
Costs of leasing and services:
Modular leasing97,556  102,308  (4,752) 
Modular delivery and installation87,388  91,811  (4,423) 
Costs of sales:
New units12,534  18,877  (6,343) 
Rental units7,609  14,516  (6,907) 
Depreciation of rental equipment91,442  85,071  6,371  
Gross Profit216,154  204,815  11,339  
Expenses:
Selling, general and administrative140,240  143,704  (3,464) 
Other depreciation and amortization5,957  5,733  224  
Impairment losses on long-lived assets—  2,638  (2,638) 
Lease impairment expense and other related charges3,055  4,605  (1,550) 
Restructuring costs689  3,288  (2,599) 
Currency (gains) losses, net518  (670) 1,188  
Other income, net(745) (2,241) 1,496  
Operating income66,440  47,758  18,682  
Interest expense56,776  62,783  (6,007) 
Loss on extinguishment of debt—  7,244  (7,244) 
Income from operations before income tax9,664  (22,269) 31,933  
Income tax expense (benefit)505  (802) 1,307  
Net income (loss)9,159  (21,467) 30,626  
Net income (loss) attributable to non-controlling interest, net of tax1,213  (1,590) 2,803  
Net income (loss) attributable to WillScot$7,946  $(19,877) $27,823  
Comparison of Six Months Ended June 30, 2020 and 2019
Revenue: Total revenue decreased $4.7 million, or 0.9%, to $512.7 million for the six months ended June 30, 2020 from $517.4 million for the six months ended June 30, 2019. The decrease was primarily the result of a $6.9 million, or 26.2%, and $9.9 million, or 45.0%, decrease in new unit and rental unit sales, respectively and a $3.3 million, or 3.1%, decrease in modular delivery and installation revenue. The decline in modular delivery and installation revenues was primarily driven by lower delivery volumes during the second quarter related to the impact of new project cancellations and delays as a result of the COVID-19 pandemic. These decreases were partially offset by an increase of $15.4 million, or 4.2%, in modular leasing revenue for the six months ended June 30, 2020 driven by improved pricing on modular space units.
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Nine Months Ended SeptemberTotal average units on rent for the six months ended June 30, 2020 and 2019 Comparedwere 103,656 and 109,815, respectively. The decrease was due primarily to lower delivery volumes, including reduced demand for new projects since mid-March of 2020 as a result of COVID-19, with modular space average units on rent decreasing 5,267 units, or 5.7%, for the six months ended June 30, 2020 as compared to the Nine Months Ended September 30, 2018
Our consolidated statements of operations for the ninesix months ended SeptemberJune 30, 2019 and 2018 are presented below:
Nine Months Ended
September 30,
2019 vs. 2018 $ Change
(in thousands)20192018
Revenues:
Leasing and services revenue:
Modular leasing$557,025  $340,171  $216,854  
Modular delivery and installation168,643  104,440  64,203  
Sales revenue:
New units38,064  33,584  4,480  
Rental units29,741  15,813  13,928  
Total revenues793,473  494,008  299,465  
Costs:
Costs of leasing and services:
Modular leasing160,476  93,506  66,970  
Modular delivery and installation146,175  98,038  48,137  
Costs of sales:
New units26,298  23,780  2,518  
Rental units19,608  9,328  10,280  
Depreciation of rental equipment128,940  82,849  46,091  
Gross profit311,976  186,507  125,469  
Expenses:
Selling, general and administrative213,267  164,845  48,422  
Other depreciation and amortization9,878  7,726  2,152  
Impairment losses on long-lived assets5,076  —  5,076  
Restructuring costs9,083  7,214  1,869  
Currency (gains) losses, net(436) 1,171  (1,607) 
Other income, net(3,293) (5,013) 1,720  
Operating income78,401  10,564  67,837  
Interest expense95,353  67,321  28,032  
Loss on extinguishment of debt7,244  —  7,244  
Loss from operations before income tax(24,196) (56,757) 32,561  
Income tax benefit(2,022) (13,572) 11,550  
Net loss(22,174) (43,185) 21,011  
Net loss attributable to non-controlling interest, net of tax(1,449) (3,715) 2,266  
Net loss attributable to WillScot$(20,725) $(39,470) $18,745  
Comparison of Nine Months Ended September 30, 2019 and 2018
Revenue: Total revenue increased $299.5 million, or 60.6%, to $793.5 million for the nine months ended September 30, 2019 from $494.0 million for the nine months ended September 30, 2018. The increase was primarily the result of a 63.2% increase in leasing and services revenue driven by increased volumes from acquisitions and improved pricing. Increased volumes were driven by units acquired as part of the ModSpace acquisition, as well as increased modular delivery and installation revenues on the combined rental fleet of 61.5% due to increased transaction volumes and higher revenues per transaction. Average modular2019. Modular space average monthly rental rates increased 9.0%11.5% to $605$661 for the ninesix months ended SeptemberJune 30, 2019, and average modular space units on rent increased 31,563 units, or 52.0%.2020. Improved pricing was driven by a combination of our price optimization tools and processes, as well as by continued growth in our “Ready to Work” solutions and increased VAPS penetration across our customer base, offset partially by the average modular space monthly rental rates on acquired units for ModSpace. The increase in leasing and services revenue was further complemented by increases of $4.5 million, or 13.4%, and $13.9 million, or 88.0%, on new unit and rental unit sales, respectively, as compared to the same period in 2018. Increases in both new and rental unit sales were primarily a result of our increased scale as a result of the ModSpace acquisition and our larger post-acquisition fleet size and sales teams.
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On a pro forma basis, including results of WillScot and ModSpace for all periods presented, total revenues decreased $13.1 million, or 1.6%, year-over-year for the nine months ended September 30, 2019. This decline was driven by reduced new sales, which declined $42.6 million, or 52.8%, driven primarily by one large new sale recognized in 2018 in the amount of $26.3 million in our Modular - US segment, and decreased rental unit sales, which declined $6.7 million, or 18.4%. The declines in sales volumes were partially offset by an increase in our core modular leasing revenues, which increased $44.3 million, or 8.6%, as a result of a 13.5% increase in average modular space monthly rental rates.
Total average units on rent for the nine months ended September 30, 2019 and 2018 were 109,138 and 75,079, respectively. The increase was due to units acquired as part of the ModSpace acquisition, with modular space average units on rent increasing 31,563 units, or 52.0%, for the nine months ended September 30, 2019. Modular space average monthly rental rates increased 9.0% for the nine months ended September 30, 2019.base. Portable storage average units on rent increaseddecreased by 2,496892 units, or 17.4%5.2%, for the ninesix months ended SeptemberJune 30, 2019.2020. Average portable storage monthly rental rates decreased 1.6% forof $120 were flat compared to the ninesix months ended SeptemberJune 30, 2019. The average modular space unit utilization rate during the ninesix months ended SeptemberJune 30, 20192020 was 72.1%68.9%, as compared to 70.1%72.2% during the same period in 2018.2019. This increasedecrease was driven by higher utilizationlower average modular space units on the acquired ModSpacerent, partially offset by a lower total modular space unit fleet as compared to the overall average utilization for the nine months ended September 30, 2018, which included the fleet acquired from Acton and Tyson.size. The average portable storage unit utilization rate during the ninesix months ended SeptemberJune 30, 20192020 was 64.6%63.5%, as compared to 68.3%65.0% during the same period in 2018.2019. The decrease in average portable storage utilization rate was driven by an increasea decline in the number of portable storage average units on rent in the Modular - US segment.rent.
Gross Profit: Our gross profit percentage was 39.3%42.2% and 37.8%39.6% for the ninesix months ended SeptemberJune 30, 20192020 and 2018,2019, respectively. Our gross profit percentage, excluding the effects of depreciation, was 55.6%60.0% and 54.5%56.0% for the ninesix months ended SeptemberJune 30, 20192020 and 2018,2019, respectively.
Gross profit increased $125.5$11.4 million, or 67.3%5.6%, to $312.0$216.2 million for the ninesix months ended SeptemberJune 30, 20192020 from $186.5$204.8 million for the ninesix months ended SeptemberJune 30, 2018.2019. The increase in gross profit is a result of a $165.8$21.2 million increase in modular leasing and services gross profit and increased new unit and rental unit gross profit of $5.6 million.profit. Increases in modular leasing and services gross profit were primarily as a result of increased revenues due to additional units on rent as a result of recent acquisitions as well as increased margins due to favorable average monthly rental rates on modular space units, as well as due to modular leasing cost savings during the second quarter due to lower delivery volumes that were achieved as a result of actions taken by the Company to scale back variable labor and increasedmaterial costs in response to lower demand for new project deliveries. Increased delivery and installation margins were driven primarily by higher pricing per transaction.transaction, offset partially by lower activity volumes primarily in the second quarter due to reduced delivery demand. These increases were partially offset by increased depreciation of $46.1$6.3 million as a result of additional rental equipment acquired as part ofcapital investments made over the ModSpace acquisition, as well as continued capital investmentpast twelve months in our existing rental equipment.equipment and decreased new and rental unit sale margins of $3.5 million due to lower demand.
SG&A: SG&A increased $48.5decreased $3.5 million, or 29.4%2.4%, to $213.3$140.2 million for the ninesix months ended SeptemberJune 30, 2019,2020, compared to $164.8$143.7 million for the ninesix months ended SeptemberJune 30, 2018. Employee costs increased $23.3 million driven by the increased size2019. The primary driver of the workforce, netdecrease is related to decreased discrete costs. Discrete items within SG&A decreased for the six months ended June 30, 2020, compared to the six months ended June 30, 2019, by $3.1 million as integration cost savings of realized employee cost synergies savings$14.1 million as compared to date achievedthe six months ended June 30, 2019 were only partially offset by transaction costs related to the Mobile Mini transaction of $11.1 million. Stock compensation expense increased $0.8 million and other costs decreased $0.9 million as compared to the six months ended June 30, 2019.
Excluding discrete items, SG&A decreased $0.4 million as a result of the restructuring activities; anddecreased expenses related to occupancy costs, increased $8.2which decreased $1.2 million, largely due to the expansion of our branch networktravel and storage lots, including a portion of the expectedentertainment costs, which decreased $1.3 million, professional fees, which decreased $1.3 million, and tax cost savings as we have now exitedof approximately 75% of redundant real estate locations.
Discrete items included in SG&A decreased $3.6 million during the period as integration cost increases of $8.4 million related to the Acton and ModSpace integrations and stock compensation expense increases of $2.8 million were fully offset offset by lower transaction costs, which reduced $14.8$1.0 million as compared to the prior year.
The remaining increases in SG&A of $20.7 These cost savings were partially offset primarily by increased employee costs, which increased $1.3 million, are related to increased professional fees, insurance, computer, travel, office, bad debt expense of $1.0 million, and other expenses related to operating a larger business as a resultapproximately $2.4 million of our recent acquisitions and our expanded employee base and branch network.
We estimate cost synergies of approximately $24.8 millionincurred related to the Acton and ModSpace acquisitions were realizedbi-annual company meeting held in the nine months ended September 30, 2019, which compares to approximately $3.9 million of synergies realized for the nine months ended September 30, 2018, bringing cumulative synergies related to the Acton, Tyson, and ModSpace acquisitions from the dates of the acquisitions to approximately $31.2 million. This is consistent with our integration plans and we expect these activities to continue through 2019 as we continue our efforts to achieve expected annual recurring cost savings of over $70.0 million once our integration plans are fully executed and in our results.January 2020.
Other Depreciation and Amortization: Other depreciation and amortization increased $2.2$0.3 million, or 28.6%5.3%, to $9.9$6.0 million for the ninesix months ended SeptemberJune 30, 2019,2020, compared to $7.7$5.7 million for the ninesix months ended SeptemberJune 30, 2018. The increase was driven primarily by depreciation on property, plant and equipment and amortization of the trade name acquired as part of the ModSpace acquisition in the third quarter of 2018.2019.
Impairment Losses on Long-Lived Assets: Impairment losses on long-lived assets were $5.1$2.6 million for the ninesix months ended SeptemberJune 30, 2019 related to the valuation of properties classified as compared to $0.0 million for the nine months ended September 30, 2018. In the nine months ended September 30, 2019, we reclassified certain branch facilities that we intend to exit from property, plant and equipment toassets held for sale and recognized an impairment on these assets because the carrying value of the facilities exceeded the estimated fair value less cost to sell. Additionally, one of the properties exited during the nine months ended September 30, 2019 was acquired as part of the ModSpace acquisition and had a favorable lease intangible. As a result of the exit of this property,ModSpace acquisition. No similar impairments occurred during the remaining net book value ofsix months ended June 30, 2020.
Lease Impairment expense and Other Related Charges: Lease impairment expense and other related charges were $3.1 million for the favorable lease intangible was deemed impaired, resulting in an impairment charge of $2.4 million.six months ended June 30, 2020 as compared to $4.6 million for the six months ended June 30, 2019.
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Restructuring Costs: Restructuring costs were $9.1$0.7 million for the ninesix months ended SeptemberJune 30, 20192020 as compared to $7.2$3.3 million for the ninesix months ended SeptemberJune 30, 2018.2019. The restructuring charges relatein the six months ended June 30, 2020 were due to reductions in force across our branch network in response to COVID-19 economic conditions. The restructuring charges in the six months ended June 30, 2019 related primarily to employee termination and lease breakage costs related to the ModSpace and Acton acquisitions and integration.integrations.
Currency (Gains) Losses, net: Currency (gains) losses, net increasedfluctuated by $1.6$1.2 million to a $0.4$0.5 million loss for the six months ended June 30, 2020 compared to a $0.7 million gain for the ninesix months ended SeptemberJune 30, 2019 compared to a $1.2 million loss for the nine months ended September 30, 2018.2019. The decreaseincrease in currency (gains) losses, net, in 20192020 was primarily attributable to the impact of foreign currency exchange rate changes on loans and borrowings and intercompany receivables and payables denominated in a currency other than the subsidiaries’ functional currency.
Other Income,Expense (Income), Net: Other income, net was $3.3$0.7 million and $5.0$2.2 million for the ninesix months ended SeptemberJune 30, 20192020 and 2018,2019, respectively. Other income, net of $3.3$0.7 million for the ninesix months ended SeptemberJune 30, 2020 was primarily related to the reversal of a non-income tax liability of $1.3 million. Other income, net of $2.2 million for the six months ended June 30, 2019 was driven primarily related toby the receipt of a $0.9 million settlement in the first quarter of 2019, and the receipt of $1.1 million of insurance proceeds related to assets damaged during Hurricane Harvey in the second quarter $0.9 million of gains on real estate sold during the third quarter, and the receipt of $1.3 million of insurance proceeds related to assets damaged during Hurricane Irma in the third quarter, which contributed $0.4 million to other income, net. Other income, net of $5.0 million for the nine months ended September 30, 2018 was driven by the receipt of insurance proceeds related to assets damaged during Hurricane Harvey which contributed $4.8 million to other income, net.2019.
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Interest Expense: Interest expense increased $28.1decreased $6.0 million, or 41.8%9.6%, to $95.4$56.8 million for the ninesix months ended SeptemberJune 30, 20192020 from $67.3$62.8 million for the ninesix months ended SeptemberJune 30, 2018. The interest costs incurred during the nine months ended September 30, 2018 included $20.5 million of bridge financing fees and upfront commitment fees related to the financing of the ModSpace acquisition.2019. Interest expense for the ninesix months ended SeptemberJune 30, 2020 is lower than the same period in 2019 includes an additional 7.5 months of expense under our current debt structure as compareddue to the nine months ended September 30, 2018. In the third quarter of 2018, as part of financing the ModSpace acquisition, we upsizedlower rates and average balances outstanding on our ABL Facility to $1.425 billion, issued $300.0 millionfacility and the repayment of our 10% senior securedunsecured notes (the "2023 Secured Notes"), and issued the Unsecured Notes. Further, in the second quarter of 2019, we issuedoffset by an increase in borrowings of $190.0 million in the second quarter of Tack-on Notes2019 under our 6.875% senior secured notes, which are outstanding for all six months in aggregate principal amount to the 2023 Secured Notes and used the proceeds to repay a portion of the ABL Facility. Subsequent to the issuance of the Tack-on Notes, we redeemed all $200.0 million in aggregate outstanding principal amount of the Unsecured Notes using proceeds from the ABL Facility. See Note 8 to the condensed consolidated financial statements for further discussion of our debt.2020.
Loss on Extinguishment of Debt: Loss on extinguishment of debt increased $7.2 million for the nine months ended September 30, 2019 from $0.0 million for the nine months ended September 30, 2018. The CompanyWe redeemed $200.0 million in aggregate outstanding principal amount of the Unsecured Notesour senior unsecured notes in the second quarter of 2019 at a redemption price of 102.0%, plus a make-whole premium of 1.1%, for total premiums of 3.1%. As a result, the Companywe recorded a loss on extinguishment of debt of $7.2 million, which included $6.2 million of premium and $1.0 million related to the write-off of unamortized deferred financing fees. This redemption was funded from the use of proceeds from the ABL Facility.fees
Income Tax Benefit:Expense: Income tax benefit decreased $11.6expense increased $1.3 million to $0.5 million expense for the six months ended June 30, 2020 compared to a $2.0$0.8 million benefit for the ninesix months ended SeptemberJune 30, 2019 compared to a $13.6 million benefit for the nine months ended September 30, 2018.2019. The decreaseincrease in income tax benefitexpense was driven by thelegislative enacted discrete benefits recorded in the ninesix months ended SeptemberJune 30, 20182019 which did not reoccur duringoccur in the ninesix months ended SeptemberJune 30, 2019.2020.


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Business Segment Results
Our principal line of business is modular leasing and sales. Modular leasing and sales comprises two reportable segments: Modular - US and Modular - Other North America. The Modular - US reportable segment includes the contiguous 48 states and Hawaii, and the Modular - Other North America reportable segment includes Alaska, Canada and Mexico.
The following tables and discussion summarize our reportable segment financial information for the three and ninesix months ended SeptemberJune 30, 20192020 and 2018.2019. Future changes to our organizational structure, including those that will result from our Merger with Mobile Mini, may result in changes to the segments disclosed.
Comparison of Three Months Ended SeptemberJune 30, 20192020 and 20182019
Three Months Ended September 30, 2019Three Months Ended June 30, 2020
(in thousands, except for units on rent and rates)(in thousands, except for units on rent and rates)Modular - USModular - Other North AmericaTotal(in thousands, except for units on rent and rates)Modular - USModular - Other North AmericaTotal
RevenueRevenue$247,701  $24,639  $272,340  Revenue$236,048  $20,814  $256,862  
Gross profitGross profit$94,257  $9,169  $103,426  Gross profit$100,951  $9,013  $109,964  
Adjusted EBITDAAdjusted EBITDA$80,424  $7,953  $88,377  Adjusted EBITDA$90,613  $6,907  $97,520  
Capital expenditures for rental equipmentCapital expenditures for rental equipment$44,951  $2,838  $47,789  Capital expenditures for rental equipment$38,065  $1,969  $40,034  
Modular space units on rent (average during the period)Modular space units on rent (average during the period)82,053  9,180  91,233  Modular space units on rent (average during the period)78,493  8,603  87,096  
Average modular space utilization rateAverage modular space utilization rate73.2 %57.2 %71.2 %Average modular space utilization rate70.6 %53.7 %68.5 %
Average modular space monthly rental rateAverage modular space monthly rental rate$632  $618  $630  Average modular space monthly rental rate$681  $562  $669  
Portable storage units on rent (average during the period)Portable storage units on rent (average during the period)15,993  423  16,416  Portable storage units on rent (average during the period)15,505  364  15,869  
Average portable storage utilization rateAverage portable storage utilization rate63.3 %54.3 %63.0 %Average portable storage utilization rate63.0 %47.6 %62.5 %
Average portable storage monthly rental rateAverage portable storage monthly rental rate$123  $106  $123  Average portable storage monthly rental rate$121  $98  $120  

Three Months Ended September 30, 2018Three Months Ended June 30, 2019
(in thousands, except for units on rent and rates)(in thousands, except for units on rent and rates)Modular - USModular - Other North AmericaTotal(in thousands, except for units on rent and rates)Modular - USModular - Other North AmericaTotal
RevenueRevenue$197,625  $21,299  $218,924  Revenue$236,502  $27,211  $263,713  
Gross profitGross profit$73,007  $7,939  $80,946  Gross profit$92,471  $9,013  $101,484  
Adjusted EBITDAAdjusted EBITDA$58,454  $6,164  $64,618  Adjusted EBITDA$80,547  $7,007  $87,554  
Capital expenditures for rental equipmentCapital expenditures for rental equipment$43,007  $3,735  $46,742  Capital expenditures for rental equipment$58,241  $2,974  $61,215  
Modular space units on rent (average during the period)Modular space units on rent (average during the period)67,978  7,435  75,413  Modular space units on rent (average during the period)83,273  9,027  92,300  
Average modular space utilization rateAverage modular space utilization rate73.8 %57.3 %71.8 %Average modular space utilization rate74.1 %56.3 %71.9 %
Average modular space monthly rental rateAverage modular space monthly rental rate$559  $587  $561  Average modular space monthly rental rate$612  $603  $611  
Portable storage units on rent (average during the period)Portable storage units on rent (average during the period)15,373  408  15,781  Portable storage units on rent (average during the period)16,146  398  16,544  
Average portable storage utilization rateAverage portable storage utilization rate68.3 %56.4 %68.0 %Average portable storage utilization rate63.6 %50.8 %63.3 %
Average portable storage monthly rental rateAverage portable storage monthly rental rate$120  $101  $120  Average portable storage monthly rental rate$121  $121  $121  
Modular - US Segment
Revenue: Total revenue decreased $0.5 million, or 0.2%, to $236.0 million for the three months ended June 30, 2020 from $236.5 million for the three months ended June 30, 2019. The decrease was primarily the result of a $5.3 million, or 10.1% decrease in modular delivery and installation revenues, $0.9 million, or 8.7%, decrease in new unit sales, and $0.8 million, or 16.3%, decrease in rental unit sales revenue. The decline in modular delivery and installation revenues was primarily driven by lower delivery volumes during the second quarter related to the impact of new project cancellations and delays as a result of the COVID-19 pandemic. The decreases were partially offset by an increase of modular leasing revenue of $6.5 million, or 3.9% driven by improved pricing. Average modular space monthly rental rates increased 11.3% for the three months ended June 30, 2020 to $681 driven by a combination of our price optimization tools and processes, as well as by continued growth in our “Ready to Work” solutions and increased VAPS penetration across our customer base. Improved pricing was partially offset by lower volumes as average modular space units on rent decreased 4,780 units, or 5.7%. The decrease was driven primarily by lower delivery volumes, including reduced demand for new projects since mid-March of 2020 as a result of COVID-19.
Gross Profit: Gross profit increased $8.5 million, or 9.2%, to $101.0 million for the three months ended June 30, 2020 from $92.5 million for the three months ended June 30, 2019. The increase in gross profit was driven by higher modular leasing gross profit, which increased $13.0 million, or 11.0%, driven equally from improved pricing including VAPS and modular leasing cost savings due to lower delivery volumes that were achieved as a result of actions taken by the Company to scale back variable labor and material costs in response to lower demand for new project deliveries. The increase in gross profit
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from modular leasing for the three months ended June 30, 2020 was partially offset by a $1.1 million decrease in sales gross profit, a $1.2 million decrease in modular delivery and installation gross profit due to lower activity volumes due to reduced delivery demand, and a $2.5 million increase in depreciation of rental equipment related to capital investments made in our existing rental equipment over the past twelve months.
Adjusted EBITDA: Adjusted EBITDA increased $10.1 million, or 12.5%, to $90.6 million for the three months ended June 30, 2020 from $80.5 million for the three months ended June 30, 2019. The increase was driven by higher modular leasing gross profit discussed above. SG&A, excluding discrete items, decreased $0.2 million, or 0.3%, for the three months ended June 30, 2020, as compared to the three months ended June 30, 2019. Decreases were related to $1.3 million decrease in travel and entertainment and $1.6 million decrease in professional fees compared to the prior year. Decreases were partially offset by employee costs which increased $0.7 million, occupancy costs which increased $0.4 million, and increased bad debt expense of $1.8 million compared to the prior year.
Capital Expenditures for Rental Equipment: Purchases of rental equipment and refurbishments decreased $20.1 million, or 34.5%, to $38.1 million for the three months ended June 30, 2020 from $58.2 million for the three months ended June 30, 2019. Net CAPEX, as defined below in Item 2. Other Non-GAAP Financial Data and Reconciliations, also decreased $10.1 million, or 22.1%, to $35.5 million. The decreases for both were driven by decreased spending on refurbishments and VAPS due to less constrained fleet and reduced demand as a result of the COVID-19 pandemic, and cost improvements experienced over the prior year related to better unit selection and scoping on refurbishments.
Modular - Other North America Segment
Revenue: Total revenue decreased $6.4 million, or 23.5%, to $20.8 million for the three months ended June 30, 2020 from $27.2 million for the three months ended June 30, 2019. Decreases were driven by rental unit sale decreases of $4.3 million, or 78.2%, reduced modular leasing revenues, which decreased $2.1 million, or 12.4%, and new unit sales decreases of $0.9 million, or 75.0% for the three months ended June 30, 2020. These decreases were partially offset by increased modular delivery and installation revenue, which increased $0.9 million, or 25.7%. Average modular space monthly rental rates decreased 6.8% primarily as a result of unfavorable foreign currency movements (decrease of 0.8% at constant currency) and average modular space units on rent decreased by 424 units, or 4.7%.
Gross Profit: Gross profit of $9.0 million for the three months ended June 30, 2020 was flat compared to the three months ended June 30, 2019. The effects of unfavorable foreign currency movements decreased gross profit by $0.6 million related to changes in the Canadian dollar and Mexican peso in relation to the US dollar. The increase in gross profit, excluding the effects of foreign currency, of $0.6 million was driven primarily by increased modular delivery and installation margins of $1.2 million as a result of higher pricing per transaction and lower variable costs, and lower depreciation of $0.7 million for the three months ended June 30, 2020, partially offset by reduced new and rental unit sales gross profit of $0.7 million and lower modular leasing gross profit of $0.6 million for three months ended June 30, 2020.
Adjusted EBITDA: Adjusted EBITDA decreased $0.1 million, or 1.4%, to $6.9 million for the three months ended June 30, 2020 from $7.0 million for the three months ended June 30, 2019. This decrease was driven by reduced gross profit discussed above, excluding depreciation and including the effects of unfavorable foreign currency movements, partially offset by decreased SG&A, excluding discrete items, which decreased $0.8 million, or 12.2%, for the three months ended June 30, 2020, as compared to the three months ended June 30, 2019. Decreases were primarily related to travel and entertainment decreases of $0.2 million and occupancy costs decreases of $0.4 million as a result of realized cost savings achieved through restructuring activities and by exiting redundant real estate locations over the past year.
Capital Expenditures for Rental Equipment: Purchases of rental equipment and refurbishments decreased $1.0 million, or 33.3%, to $2.0 million for the three months ended June 30, 2020 from $3.0 million for the three months ended June 30, 2019. Net CAPEX, as defined below in Item 2. Other Non-GAAP Financial Data and Reconciliations, increased $3.3 million, or 137.5%, to $0.9 million from negative $2.4 million for the three months ended June 30, 2019 due to reduced rental unit sale activity for the three months ended June 30, 2020.
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Comparison of Six Months Ended June 30, 2020 and 2019
Six Months Ended June 30, 2020
(in thousands, except for units on rent and rates)Modular - USModular - Other North AmericaTotal
Revenue$469,912  $42,771  $512,683  
Gross profit$197,260  $18,894  $216,154  
Adjusted EBITDA$172,296  $14,766  $187,062  
Capital expenditures for rental equipment$75,071  $4,611  $79,682  
Modular space units on rent (average during the period)78,989  8,553  87,542  
Average modular space utilization rate71.1 %53.4 %68.9 %
Average modular space monthly rental rate$670  $580  $661  
Portable storage units on rent (average during the period)15,738  376  16,114  
Average portable storage utilization rate64.0 %49.3 %63.5 %
Average portable storage monthly rental rate$120  $105  $120  

Six Months Ended June 30, 2019
(in thousands, except for units on rent and rates)Modular - USModular - Other North AmericaTotal
Revenue$466,677  $50,721  $517,398  
Gross profit$186,419  $18,396  $204,815  
Adjusted EBITDA$156,490  $14,415  $170,905  
Capital expenditures for rental equipment$108,162  $4,926  $113,088  
Modular space units on rent (average during the period)83,873  8,936  92,809  
Average modular space utilization rate74.6 %55.7 %72.2 %
Average modular space monthly rental rate$594  $578  $593  
Portable storage units on rent (average during the period)16,602  404  17,006  
Average portable storage utilization rate65.4 %51.6 %65.0 %
Average portable storage monthly rental rate$120  $115  $120  
Modular - US Segment
Revenue: Total revenue increased $50.1$3.2 million, or 25.4%0.7%, to $247.7$469.9 million for the threesix months ended SeptemberJune 30, 20192020 from $197.6$466.7 million for the threesix months ended SeptemberJune 30, 2018. Modular2019. The increase was driven by increased modular leasing revenuerevenues, which increased $45.4$17.2 million, or 35.5%5.2%, driven by improved volumes and pricing. Average modular space units on rent increased 14,075 units, or 20.7%. Average modular space monthly rental rates increased 13.1%12.8% for the threesix months ended SeptemberJune 30, 2019. Volumes improved as a result of units acquired as part of the ModSpace acquisition as well as increased modular delivery and installation revenues on the combined rental fleet of 34.0% due to an additional 1.5 months of contribution from the ModSpace acquisition in the third quarter of 2019.2020. Improved pricing was driven by a combination of our price optimization tools and processes, as well as by continued growth in our “Ready to Work” solutions and increased VAPS penetration across our customer base,base. Increases in pricing were partially offset partially by the lowerdecreased average modular space monthly rental ratesunits on acquired units.rent, which decreased 4,884 units, or 5.8%. The increasesdecrease in units on rent was due primarily to lower delivery volumes, including reduced demand for new projects since mid-March of 2020 as a result of new project cancellations and delays as a result of the COVID-19 pandemic. The increase in leasing and services revenue werewas partially offset by decreases in delivery and installation revenues driven by lower delivery volumes during the second quarter and lower sales revenues. NewDelivery and installation revenue decreased $3.7 million, or 3.8%, new unit sales revenue decreased $8.4$5.6 million, or 43.8%,23.0% and rental unit sales revenue decreased $1.1 million, or 12.8%. These decreases were driven by large sales originating from ModSpace that were completed subsequent to the acquisition in the third quarter of 2018 that did not reoccur in 2019.
On a pro forma basis, including results of WillScot and ModSpace for all periods presented, total revenues decreased $25.9 million, or 9.5%, year-over-year for the three months ended September 30, 2019. This decline was driven by reduced new sales, which declined $33.6 million, or 75.8%, driven primarily by one large new unit sale recognized in 2018 in the amount of $26.3 million, and decreased rental unit sales, which declined $4.7 million, or 38.5%35.6%. The declines in sales volumes
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were partially offset by increases in our core modular leasing revenues, which increased $12.9 million, or 8.0%, driven primarily by continued pricing improvement in the third quarter, with increases in pro forma average modular space monthly rental rates of $83, or 15.1%, year over year for the three months ended September 30, 2019. Modular space units on rent decreased 5.6% on a pro forma basis to 82,053 and pro forma utilization for our modular space units decreased to 73.2%, down 170 bps from 74.9% for the three months ended September 30, 2018.
Gross Profit: Gross profit increased $21.2$10.9 million, or 29.0%5.8%, to $94.2$197.3 million for the threesix months ended SeptemberJune 30, 20192020 from $73.0$186.4 million for the threesix months ended SeptemberJune 30, 2018.2019. The increase in gross profit was driven by higher modular leasing and service revenues driven both by organic growth primarily fromimproved pricing and by an additional 1.5 months of contribution from the ModSpace acquisition in the third quarter of 2019,VAPS, as well as by lower modular leasing cost due to increased modular spacelower delivery demand in the second quarter and installation margins. Modular leasing and service gross profit increased $30.8 million, or 32.2%.reduced variable costs. The increase in gross profit from modular leasing and service revenues for the three months ended September 30, 2019 was partially offset by a $1.9 million decrease in sales gross profit and a $7.6 million increase in depreciation of rental equipment primarily related to units acquired inas a result of capital investments made over the ModSpace acquisition, as well as continued capital investmentpast twelve months in our existing rental equipment.equipment for the six months ended June 30, 2020.
Adjusted EBITDA: Adjusted EBITDA increased $22.0$15.8 million, or 37.7%10.1%, to $80.4$172.3 million for the threesix months ended SeptemberJune 30, 20192020 from $58.4$156.5 million for the threesix months ended SeptemberJune 30, 2018.2019. The increase was driven by higher modular leasing and services gross profits discussed above, partially offset by increases in SG&A, excluding discrete and other items, of $6.6$0.8 million. Discrete and other items within SG&A decreased for the three months ended September 30, 2019, compared to the three months ended September 30, 2018, by $11.2 million as decreases in transaction costs and integration cost related to the ModSpace and Acton acquisitions and integrations of $10.5 million and $3.0 million, respectively, were partially offset by an increase in stock compensation expense of $0.8 million and a $1.6 million increase in other costs. Increases in SG&A, excluding discrete items, primarily relatedrelate to increased employee costs of $3.1$1.5 million, drivenincreased bad debt expense of $1.0 million, and approximately $2.3 million of costs related to the bi-annual company meeting held in January. These increases were partially offset by the increased sizedecreased travel and entertainment of the workforce, net$1.1 million, decreased professional fees of realized employee cost synergies savings to date achieved as a result of the restructuring activities; and increased$1.2 million, decreased occupancy costs of $0.4$0.6 million, largely due to the expansionand decreased computer costs of our branch network and storage lots, including a portion of the expected cost savings as we have now exited approximately 75% of redundant real estate locations. The remaining increases in SG&A of $3.1 million were primarily related to increased professional fees, insurance, computer, travel, office costs, bad debt and other expenses related to operating a larger business as a result of our recent acquisitions and our expanded employee base and branch network.$0.7 million.
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Capital Expenditures for Rental Equipment: Capital expenditures for rental equipment increased $2.0decreased $33.1 million, or 4.7%30.6%, to $45.0$75.1 million for the threesix months ended SeptemberJune 30, 20192020 from $43.0 million$108.2 million for the threesix months ended SeptemberJune 30, 2018.2019. Net capital expenditures for rental equipmentCAPEX, as defined below in Item 2. Other Non-GAAP Financial Data and Reconciliations, also increased $2.3decreased $18.4 million, or 6.7%21.0%, to $36.7$69.4 million. The increasesdecreases for both were driven by increaseddecreased spend for refurbishments and VAPS due to drive revenue growthless constrained fleet and for maintenancereduced demand as a result of a larger fleet following our recent acquisitions.the COVID-19 pandemic, and cost improvements experienced over the prior year related to better unit selection and scoping on refurbishments.
Modular - Other North America Segment
Revenue: Total revenue increased $3.3decreased $7.9 million, or 15.5%15.6%, to $24.6$42.8 million for the threesix months ended SeptemberJune 30, 20192020 from $21.3$50.7 million for the threesix months ended SeptemberJune 30, 2018.2019. Decreases were driven primarily by declines in new unit and rental unit sales, which decreased $1.4 million, or 66.7% and $5.2 million, or 59.1%, respectively, compared to the six months ended June 30, 2019. Modular leasing revenue increased $4.1decreased $1.8 million, or 29.9%5.6%, driven by improveddeclined volumes and pricing in the quarter.period. Average modular space units on rent increaseddecreased by 1,745383 units, or 23.5%4.3%, due to an additional 1.5 months of contribution fromfor the ModSpace acquisition in the third quarter of 2019. Averageperiod, and average modular space monthly rental rates increased 5.3% driven by continued growth in our “Ready to Work” solutions and increased VAPS penetration across the combined post-acquisition customer base.0.3%. Modular delivery and installation revenues increased $1.0$0.4 million, or 20.4%5.3%. New unit sales were $0.8 million and $1.7 million, and rental unit sales revenue was $0.1 million and $1.0 million for the three months ended September 30, 2019 and 2018, respectively.
On a pro forma basis, including results of WillScot and ModSpace for all periods presented, total revenues decreased $2.4 million, or 8.9%, year-over-year for the three months ended September 30, 2019. This decline was driven by reduced new and rental unit sales, which declined $1.1 million, or 57.9%, and $1.6 million, or 94.1%, respectively as a result of our focus on the core leasing business. The declines in sales volumes were partially offset by increases in our core modular leasing revenues, which increased $1.1 million, or 6.5%, driven primarily by continued pricing improvement in the third quarter, with increases in pro forma average modular space monthly rental rates of $37, or 6.4%, year-over-year for the three months ended September 30, 2019. Modular space units on rent decreased 0.8% on a pro forma basis to 9,180 and pro forma utilization for our modular space units increased to 57.2%, up 40 bps from 56.8%, for the three months ended September 30, 2018.
Gross Profit: Gross profit increased $1.3$0.5 million, or 16.5%2.7%, to $9.2$18.9 million for the threesix months ended SeptemberJune 30, 20192020 from $7.9$18.4 million for the threesix months ended SeptemberJune 30, 2018.2019. The effects of favorableunfavorable foreign currency movements increaseddecreased gross profit by less than $0.1$0.7 million related to changes in the Canadian dollar and Mexican peso in relation to the US dollar. The increase in gross profit, excluding the effects of foreign currency, of $1.2 million was driven primarily by increased leasing and services revenues and margins of $1.5 million as a result of higher modular space units on rentimproved delivery and installation margins and increased average monthly rental rates (increase of 4.3% at constant currency) and lower variable costs, and lower depreciation of $1.0 million for the six months ended June 30, 2020, partially offset by reduced new and rental unit sales gross profit and by increased depreciation of rental equipment of $0.7$1.3 million for threethe six months ended SeptemberJune 30, 2019.2020.
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Adjusted EBITDA: Adjusted EBITDA increased $1.8$0.4 million, or 29.0%2.8%, to $8.0$14.8 million for the threesix months ended SeptemberJune 30, 20192020 from $6.2$14.4 million for the threesix months ended SeptemberJune 30, 2018.2019. This increase was driven by increased leasingdecreased SG&A, excluding discrete items, which decreased $1.1 million for the six months ended June 30, 2020 compared to the six months ended June 30, 2019. Decreases were related primarily to decreased occupancy costs of $0.6 million, decreased employee costs of $0.1 million, and services gross profit as a resultdecreased travel and entertainment of increased modular space volumes and average monthly rental rates,$0.1 million, among other cost savings. SG&A savings were partially offset by decreased newgross profits as discussed above, excluding depreciation and rental unit sales gross profit. Additionally, SG&A, excluding discrete and other items, increased $0.2 million, also driven byincluding the ModSpace acquisition, consisting primarilyeffects of increased occupancy costs of $0.2 million.unfavorable foreign currency movements.
Capital Expenditures for Rental Equipment: Capital expenditures for rental equipment decreased $0.9$0.3 million, or 24.3%6.1%, to $2.8$4.6 million for the threesix months ended SeptemberJune 30, 20192020 from $3.7$4.9 million for the threesix months ended September 30, 2018. The decrease was driven by reduced spend due to increased unit selection afforded by the larger fleet following the ModSpace acquisition, partially offset by increased spending on VAPS to drive revenue growth. Net capital expenditures of $2.7 million remained flat to the prior year.
Comparison of Nine Months Ended September 30, 2019 and 2018
Nine Months Ended September 30, 2019
(in thousands, except for units on rent and rates)Modular - USModular - Other North AmericaTotal
Revenue$718,038  $75,435  $793,473  
Gross profit$284,336  $27,640  $311,976  
Adjusted EBITDA$238,572  $23,040  $261,612  
Capital expenditures for rental equipment$153,113  $7,764  $160,877  
Modular space units on rent (average during the period)83,285  9,014  92,299  
Average modular space utilization rate74.3 %56.2 %72.1 %
Average modular space monthly rental rate$606  $592  $605  
Portable storage units on rent (average during the period)16,427  412  16,839  
Average portable storage utilization rate65.0 %52.9 %64.6 %
Average portable storage monthly rental rate$121  $111  $121  

Nine Months Ended September 30, 2018
(in thousands, except for units on rent and rates)Modular - USModular - Other North AmericaTotal
Revenue$444,525  $49,483  $494,008  
Gross profit$169,556  $16,951  $186,507  
Adjusted EBITDA$129,170  $12,856  $142,026  
Capital expenditures for rental equipment$104,462  $7,043  $111,505  
Modular space units on rent (average during the period)54,592  6,144  60,736  
Average modular space utilization rate71.9 %57.1 %70.1 %
Average modular space monthly rental rate$553  $568  $555  
Portable storage units on rent (average during the period)13,964  379  14,343  
Average portable storage utilization rate68.6 %56.5 %68.3 %
Average portable storage monthly rental rate$124  $111  $123  
Modular - US Segment
Revenue: Total revenue increased $273.5 million, or 61.5%, to $718.0 million for the nine months ended September 30, 2019 from $444.5 million for the nine months ended September 30, 2018. Modular leasing revenue increased $199.9 million, or 65.2%, driven by improved volumes and pricing. Average modular space units on rent increased 28,693 units, or 52.6%. Average modular space monthly rental rates increased 9.6% for the nine months ended SeptemberJune 30, 2019. Improved volumes were driven by units acquiredNet CAPEX, as part of the ModSpace acquisition, as well as increased modular deliverydefined below in Item 2. Other Non-GAAP Financial Data and installation revenues on the combined rental fleet of 66.6%. Improved pricing was driven by a combination of our price optimization tools and processes, as well as by continued growth in our “Ready to Work” solutions and increased VAPS penetration across our customer base, offset partially by the lower average modular space monthly rental rates on acquired units. The increases in leasing and services revenue were complemented by increases in sales revenues. New unit sales revenue increased $5.0 million, or 16.6% and rental unit sales revenue increased $6.5 million, or 45.5%. Increases in new unit sales and rental unit sales were primarily a result of the ModSpace acquisition and our larger post-acquisition sales team and fleet size.
On a pro forma basis, including results of WillScot and ModSpace for all periods presented, total revenues decreased $8.2 million, or 1.1%, year-over-year for the nine months ended September 30, 2019. This decline was driven by reduced new sales, which declined $40.3 million, or 53.4% driven primarily by one large new sale recognized in the third quarter of 2018 in
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the amount of $26.3 million, and decreased rental unit sales, which declined $10.0 million, or 32.4%. The declines in sales volumes were partially offset by increases in our core modular leasing revenues, which increased $44.3 million, or 9.6%, driven primarily by continued pricing improvement, with increases in pro forma average modular space monthly rental rates of $77, or 14.6%, year over year for the nine months ended September 30, 2019. Modular space units on rent decreased 3.9% on a pro forma basis to 83,285 and pro forma utilization for our modular space units decreased to 74.3%, down 40 bps from 74.7% for the nine months ended September 30, 2018.
Gross Profit: Gross profit increased $114.9 million, or 67.8%, to $284.4 million for the nine months ended September 30, 2019 from $169.5 million for the nine months ended September 30, 2018. The increase in gross profit was driven by higher modular leasing and service revenues driven both by organic growth and through the ModSpace acquisition, as well as due to increased modular space delivery and installation margins. The increase in gross profit from modular leasing and service revenues was partially offset by a $42.4 million increase in depreciation of rental equipment primarily related to units acquired in the ModSpace acquisition for the nine months ended September 30, 2019, as well as continued capital investment in our existing rental equipment.
Adjusted EBITDA: Adjusted EBITDA increased $109.5 million, or 84.8%, to $238.6 million for the nine months ended September 30, 2019 from $129.1 million for the nine months ended September 30, 2018. The increase was driven by higher modular leasing and services gross profits discussed above, partially offset by increases in SG&A, excluding discrete and other items, of $45.9 million. Discrete and other items within SG&A decreased for the nine months ended September 30, 2019, compared to the nine months ended September 30, 2018, by $4.1 million as decreases in transaction costs related to the ModSpace, Acton, and Tyson acquisitions of $14.6 million were partially offset by increases in integration cost of $5.8 million, an increase in stock compensation expense of $2.8 million, and a $2.0 million increase in other costs. Increases in SG&A, excluding discrete items, primarily relate to increased employee costs of $21.5 million driven by the increased size of the workforce, net of realized employee cost synergies savings to date achieved as a result of the restructuring activities; and increased occupancy costs of $6.4 million largely due to the expansion of our branch network and storage lots, including a portion of the expected cost savings as we have now exited approximately 75% of redundant real estate locations. The remaining increases of $18.0 million are primarily related to increased professional fees, insurance, computer, travel, office costs, bad debt and other expenses related to operating a larger business as a result of our recent acquisitions and our expanded employee base and branch network.
Capital Expenditures for Rental Equipment: Capital expenditures for rental equipment increased $48.6 million, or 46.5%, to $153.1 million for the nine months ended September 30, 2019 from $104.5 million for the nine months ended September 30, 2018. Net capital expenditures for rental equipment also increased $46.0 million, or 54.4%, to $130.5 million. The increases for both were driven by increased spend for refurbishments and VAPS to drive revenue growth and for maintenance of a larger fleet following our recent acquisitions.
Modular - Other North America Segment
Revenue: Total revenue increased $25.9 million, or 52.3%, to $75.4 million for the nine months ended September 30, 2019 from $49.5 million for the nine months ended September 30, 2018. Modular leasing revenue increased $17.0 million, or 51.2%, driven by improved volumes and pricing in the quarter. Average modular space units on rent increased by 2,870 units, or 46.7%, for the period, and average modular space monthly rental rates increased 4.2%. Improved volumes were driven by units acquired as part of the ModSpace acquisition and improved pricing was driven primarily through continued growth in our “Ready to Work” solutions and increased VAPS penetration across the combined post-acquisition customer base. Modular delivery and installation revenues increased $2.1 million, or 18.6%. New unit sales were $2.9 million and $3.4 millionReconciliations, and rental unit sales revenue was $8.9 million and $1.6 million for the nine months ended September 30, 2019 and 2018, respectively. The increase in modular delivery and installation revenues was primarily driven by the ModSpace acquisition and our larger post-acquisition sales team and fleet size. The increase in rental unit sales revenue was primarily driven by several large rental unit sale projects in the first half of 2019.
On a pro forma basis, including results of WillScot and ModSpace for all periods presented, total revenues decreased $5.1 million, or 6.3%, year-over-year for the nine months ended September 30, 2019. This decline was driven by reduced modular delivery and installation revenues and reduced new unit sales, which declined $6.3 million, or 32.0%, and $2.3 million, or 44.2%, respectively. The decline in modular delivery and installation revenues was driven by several large projects that began or were completed during the prior year and resulted in large delivery and installation revenues. These declines were partially offset by increases in rental unit sales of $3.3 million, or 58.9%. Core modular leasing revenues increased $0.3 million, or 0.6%, with increases in pro forma average modular space monthly rental rates of $22, or 3.9%, for the nine months ended September 30, 2019, being partially offset by a decrease in modular space units on rent of 2.3% on a pro forma basis to 9,014. Pro forma utilization for our modular space units decreased to 56.2%, down 40 bps from 56.6%, for the nine months ended September 30, 2018.
Gross Profit: Gross profit increased $10.6 million, or 62.4%, to $27.6 million for the nine months ended September 30, 2019 from $17.0 for the nine months ended September 30, 2018. The effects of favorable foreign currency movements increased gross profit by less than $0.2 million related to changes in the Canadian dollar and Mexican peso in relation to the US dollar. The increase in gross profit, excluding the effects of foreign currency, was driven primarily by increased leasing and services revenues and margins as a result of higher modular space units on rent and average monthly rental rates.
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Additionally, rental unit sales gross profit increased due to higher volume. These increases were slightly offset by increased depreciation of rental equipment of $3.7 million for nine months ended September 30, 2019.
Adjusted EBITDA: Adjusted EBITDA increased $10.1 million, or 78.3%, to $23.0 million for the nine months ended September 30, 2019 from $12.9 million for the nine months ended September 30, 2018. This increase was driven by increased leasing and services gross profit as a result of increased modular space volumes and average monthly rental rates and increased rental unit sales gross profit, partially offset by increased SG&A, excluding discrete items, of $4.2 million, also driven by the ModSpace acquisition, consisting primarily of increased employee costs of $1.8 million and increased occupancy costs of $1.8 million.
Capital Expenditures for Rental Equipment: Capital expenditures for rental equipment increased $0.8 million, or 11.4%, to $7.8 million for the nine months ended September 30, 2019 from $7.0 million for the nine months ended September 30, 2018. The increase was driven by increased spend for new fleet and VAPS to drive revenue growth and for maintenance of a larger fleet following the ModSpace acquisition. Net capital expenditures decreased $6.5 million, or 120.4%10.7%, to negative $1.1$2.5 million during the ninesix months ended SeptemberJune 30, 2019,2020, as a result of increased rental unit sales in the period that exceeded capital expenditures for rental equipment. This compared to net capital expenditures of negative $2.8 million for the six months ended June 30, 2019.


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Other Non-GAAP Financial Data and Reconciliations
We use certain non-GAAP financial information that we believe is important for purposes of comparison to prior periods and development of future projections and earnings growth prospects. This information is also used by management to measure the profitability of our ongoing operations and analyze our business performance and trends.
We evaluate business segment performance on Adjusted EBITDA, a non-GAAP measure that excludes certain items as described in the reconciliation of our consolidated net income (loss) to Adjusted EBITDA reconciliation below. We believe that evaluating segment performance excluding such items is meaningful because it provides insight with respect to the intrinsic operating results of the Company.
We also regularly evaluate gross profit by segment to assist in the assessment of the operational performance of each operating segment. We consider Adjusted EBITDA to be the more important metric because it more fully captures the business performance of the segments, inclusive of indirect costs.
Management also evaluates Free Cash Flow as defined in Item 2, Liquidity and Capital Resources, as it provides useful additional information concerning cash flow available to meet future debt service obligations and working capital requirements.
Adjusted EBITDA
We define EBITDA as net income (loss) plus interest expense, income tax benefit,expense (benefit), depreciation and amortization. Our adjusted EBITDA ("Adjusted EBITDAEBITDA") 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 losses (gains), net: on monetary assets and liabilities denominated in foreign currencies other than the subsidiaries’ functional currency. Substantially all such currency losses (gains) are unrealized and attributable to financings due to and from affiliated companies.
Non-cashGoodwill and other impairment charges related to non-cash costs associated with impairment charges to goodwill, other intangibles, rental fleet and other long-lived assets.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, fleet relocation expenses, employee training costs and other costs.
Non-cash charges for stock compensation plans.
Other expense includes 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.
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’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;
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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.

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Because of these limitations, Adjusted EBITDA should not be considered as discretionary cash available to reinvest in the growth of our business or as measures of cash that will be available to meet our obligations. The following table provides an unaudited reconciliation of Net income (loss)net loss to Adjusted EBITDA:
Three Months Ended
September 30,
Nine Months Ended
September 30,
Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands)(in thousands)2019201820192018(in thousands)2020201920202019
Net income (loss)$762  $(36,729) $(22,174) $(43,185) 
Income tax benefit(1,220) (6,507) (2,022) (13,572) 
Net Income (loss)Net Income (loss)$12,833  $(11,438) $9,159  $(21,467) 
Loss on extinguishment of debtLoss on extinguishment of debt—  —  7,244  —  Loss on extinguishment of debt—  7,244  —  7,244  
Income tax (benefit) expenseIncome tax (benefit) expense(285) (1,180) 505  (802) 
Interest expenseInterest expense30,857  43,447  95,353  67,321  Interest expense28,519  31,668  56,776  62,783  
Depreciation and amortizationDepreciation and amortization47,576  39,254  138,818  90,575  Depreciation and amortization48,377  46,917  97,399  90,804  
Currency losses (gains), netCurrency losses (gains), net234  (425) (436) 1,171  Currency losses (gains), net(380) (354) 518  (670) 
Goodwill and other impairmentsGoodwill and other impairments—  —  5,076  —  Goodwill and other impairments—  348  —  2,638  
Restructuring costs1,980  6,137  9,083  7,214  
Restructuring costs, lease impairment expense and other related chargesRestructuring costs, lease impairment expense and other related charges2,143  3,152  3,744  7,893  
Transaction costsTransaction costs—  10,672  —  14,790  Transaction costs1,619  —  11,050  —  
Integration costsIntegration costs5,483  7,453  23,863  14,868  Integration costs2,153  8,242  3,839  18,380  
Stock compensation expenseStock compensation expense1,813  1,050  5,003  2,225  Stock compensation expense2,227  1,900  4,014  3,190  
Other expense892  266  1,804  619  
Other income(a)
Other income(a)
314  1,055  58  912  
Adjusted EBITDAAdjusted EBITDA$88,377  $64,618  $261,612  $142,026  Adjusted EBITDA$97,520  $87,554  $187,062  $170,905  
(a) Other income represents primarily acquisition-related costs such as advisory, legal, valuation and other professional fees in connection with actual or potential business combinations, which are expensed as incurred, but do not reflect ongoing costs of the business.
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 measure 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 because it assists in analyzing the performance of our business.
The following table provides an unaudited reconciliation of gross profit to Adjusted Gross Profit and Adjusted Gross Profit Percentage:
Three Months Ended
September 30,
Nine Months Ended
September 30,
Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands)(in thousands)2019201820192018(in thousands)2020201920202019
Revenue (A)Revenue (A)$272,340  $218,924  $793,473  $494,008  Revenue (A)$256,862  $263,713  $512,683  $517,398  
Gross profit (B)Gross profit (B)$103,426  $80,946  $311,976  $186,507  Gross profit (B)$109,964  $101,484  $216,154  $204,815  
Depreciation of rental equipmentDepreciation of rental equipment43,869  35,534  128,940  82,849  Depreciation of rental equipment45,494  43,968  91,442  85,071  
Adjusted Gross Profit (C)Adjusted Gross Profit (C)$147,295  $116,480  $440,916  $269,356  Adjusted Gross Profit (C)$155,458  $145,452  $307,596  $289,886  
Gross Profit Percentage (B/A)Gross Profit Percentage (B/A)38.0 %37.0 %39.3 %37.8 %Gross Profit Percentage (B/A)42.8 %38.5 %42.2 %39.6 %
Adjusted Gross Profit Percentage (C/A)Adjusted Gross Profit Percentage (C/A)54.1 %53.2 %55.6 %54.5 %Adjusted Gross Profit Percentage (C/A)60.5 %55.2 %60.0 %56.0 %
Net CAPEX and Net CAPEX for Rental Equipment
We define Net Capital ExpendituresCAPEX ("Net CAPEX") and Net CAPEX for Rental Equipment as capital expenditures for purchases and capitalized refurbishments of rental equipment and refurbishments and purchases of property, plant and equipment (collectively, "Total Capital Expenditures"), reduced byless proceeds from sale of rental equipment and proceeds from the sale of rental equipment. Net CAPEX for Rental Equipment is defined as capital expenditures for purchasesproperty, plant and capitalized refurbishments of rental equipment reduced by proceeds(collectively, "Total Proceeds"), which are all included in cash flows from the sale of rental equipment.investing activities. Our management believes that the presentation of Net CAPEX and Net CAPEX for Rental Equipment 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.

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The following table provides an unaudited reconciliationreconciliations of purchase of rental equipment to Net CAPEX for Rental Equipment and to Net CAPEX:
Three Months Ended
September 30,
Nine Months Ended
September 30,
Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands)(in thousands)2019201820192018(in thousands)2020201920202019
Total purchases of rental equipment and refurbishmentsTotal purchases of rental equipment and refurbishments$(47,789) $(46,742) $(160,877) $(111,505) Total purchases of rental equipment and refurbishments$(40,034) $(61,215) $(79,682) $(113,088) 
Total proceeds from sale of rental equipmentTotal proceeds from sale of rental equipment8,421  9,560  31,504  21,593  Total proceeds from sale of rental equipment5,316  11,482  12,102  23,083  
Net CAPEX for Rental EquipmentNet CAPEX for Rental Equipment(39,368) (37,182) (129,373) (89,912) Net CAPEX for Rental Equipment$(34,718) $(49,733) $(67,580) $(90,005) 
Purchase of property, plant and equipmentPurchase of property, plant and equipment(2,701) (1,475) (6,600) (3,091) Purchase of property, plant and equipment(1,668) (2,270) (3,186) (3,899) 
Proceeds from sale of property, plant and equipmentProceeds from sale of property, plant and equipment$ $8,804  $3,843  $8,891  
Net CAPEXNet CAPEX$(42,069) $(38,657) $(135,973) $(93,003) Net CAPEX$(36,383) $(43,199) $(66,923) $(85,013) 

Liquidity and Capital Resources
Overview
WillScot is a holding company that derives all of 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, 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.
Our consolidation strategy includesWe have been consistently engaged in both the pursuitdebt and equity capital markets both opportunistically and as necessary to support the growth of strategic acquisitions thatour business, desired leverage levels, and other capital allocation priorities. Subsequent to the Merger we believe will add valuewe have ample liquidity in the New ABL Facility to our existing business. 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 Class A common stock or other equity securities as acquisition consideration or as part of an overall financing plan. In addition, we will continue to evaluate options to improve our liquidity, such as the issuance 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. 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. We cannot assure you that we could obtain refinancing or additional financing on favorable terms or at all, including as a result of any disruption the COVID-19 pandemic may have on the debt and capital markets. From time to time we may also seek to streamline our capital structure and improve our financial position through refinancing or restructuring our existing debt or retiring certain of our securities for cash or other consideration.
Post-Merger Long-Term Debt
Subsequent to closing of the Merger and related financing transactions, our Company's long term debt is comprised of the following:
(in thousands, except rates)Interest RateYear of maturityPrincipal July 3, 2020 (Post Merger)
2023 Secured Notes6.875 %2023$490,000  
2025 Secured Notes6.125 %2025$650,000  
New ABL FacilityVaries2025$1,467,000  
Finance LeasesVaries2022$76,697  
     Total long-term debt$2,683,697  
After the Merger, we have over $915 million of available borrowing capacity under the New ABL Facility.
ABL Facility 
On November 29, 2017, WS Holdings, WSII and certain of its subsidiaries entered intoBorrowing availability under the ABL Facility with an aggregate principal amount of up to $600.0 million.
In July and August 2018, the Company entered into three amendmentsis equal to the ABL Facility that,lesser of $1.425 billion and the applicable borrowing bases (the "Line Cap"). At June 30, 2020, the Line Cap was $1.416 billion. The borrowing bases are a function of, among other things, (i) permitted the ModSpace acquisition andvalue of the Company’s financing thereof, (ii) increased the ABL Facility limit to $1.425 billionassets in the aggregate, with an accordion feature allowing up to $1.8 billion of capacity, and (iii) increased certain thresholds, basket sizes and default and notice triggers to account for the Company’s increased scale following the ModSpace Acquisition.relevant collateral pool.
At SeptemberJune 30, 2019, the Borrowers2020, we had $489.2$540.5 million of available borrowing capacity under the ABL Facility, including $354.8$409.6 million under the US ABL Facility and $134.4$130.9 million under the Canadian ABL Facility.

COVID-19 Impact on Liquidity
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Although there is uncertainty related to the anticipated impact of the COVID-19 outbreak on the Company’s future results, we believe our predictable lease revenue streams underpinned by long lease durations combined with recent steps we have taken to reduce costs and capital spending will result in a near-term increase in internally generated free cash flow.Further, the approximately $915 million of availability under our New ABL Facility subsequent to the Merger and related financing transactions, provides additional liquidity if internally generated free cash flow becomes insufficient to meet our operating needs. We continue to manage all aspects of our business including, but not limited to, monitoring the financial health of our customers, suppliers and other third-party relationships, actively managing our cost structure, reducing or delaying capital spending, and developing new opportunities for growth. We believe that the actions we have taken in recent years to increase our scale and competitive position and strengthen our balance sheet have positioned us well to manage through this crisis as it continues to unfold.
Cash Flow Comparison of the NineSix Months Ended SeptemberJune 30, 20192020 and 20182019
Significant factors driving our liquidity position 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,
Six Months Ended
June 30,
(in thousands)(in thousands)2019  2018  (in thousands)20202019
Net cash from operating activitiesNet cash from operating activities$99,076  $15,580  Net cash from operating activities$113,727  $60,054  
Net cash from investing activitiesNet cash from investing activities(122,774) (1,176,468) Net cash from investing activities(66,923) (85,013) 
Net cash from financing activitiesNet cash from financing activities18,627  1,161,406  Net cash from financing activities614,693  21,351  
Effect of exchange rate changes on cash and cash equivalentsEffect of exchange rate changes on cash and cash equivalents64  68  Effect of exchange rate changes on cash and cash equivalents(394) 140  
Net change in cash and cash equivalentsNet change in cash and cash equivalents$(5,007) $586  Net change in cash and cash equivalents$661,103  $(3,468) 
Cash Flows from Operating Activities
Cash providedprovided by operating activities for the ninesix months ended SeptemberJune 30, 20192020 was $99.1$113.7 million as compared to $15.6$60.1 million for the ninesix months ended SeptemberJune 30, 2018,2019, an increase of $83.5$53.6 million. The increase was primarily due to an increase of $108.9$33.9 million of net income, adjusted for non-cash items, during 2019 comparedin addition to 2018 due to the impactan increase of the ModSpace acquisition on revenue and gross profit, which is reflected in the first nine months of 2019, but is only included for a month and a half in 2018. The increase in net income, adjusted for non-cash items, was partially offset by a decrease of $25.4$19.8 million in the net movements of the operating assets and liabilities. The decreaseincrease related to the net movements of operating assets and liabilities was attributable to an increase in accounts receivable and an increase in cash interest payments in the
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first ninethree months of 2019,2020, partially offset by an increase in accounts payable and deferred revenue.other accrued liabilities.
Cash Flows from Investing Activities
Cash used in investing activities for the ninesix months ended SeptemberJune 30, 2019 was $122.82020 was $66.9 million as compared to $1,176.5$85.0 million for the ninesix months ended SeptemberJune 30, 2018,2019, a decrease of $1,053.7$18.1 million. The decrease in cash used in investinginvesting activities was driven by a $1,084.1$33.4 million decrease in cash used for business acquisitions,purchase of rental equipment and refurbishments and a $9.9$5.1 million increase in proceeds from sale of property, plant and equipment, offset by an $11.0 million decrease in proceeds from the sale of rental equipment. Cash used for purchase of rental equipment and a $12.5 million increaserefurbishments decreased in proceeds from the sale of property, plant, and equipment. The decrease in cash used in business acquisitionssix months ended June 30, 2020 compared to 2019 as fleet was less constrained due to the acquisition of Actonreduced utilization and ModSpace in the first nine months of 2018 with no business acquisitions during the same period of 2019. Proceeds from the sale of rental equipment increased due to increased sales volumereduced demand for new project deliveries as a result of the acquisitionCOVID-19 pandemic and the current period impact of ModSpace.prior year spend. Proceeds from the sale of property, plant andrental equipment increased primarily as a result ofdecreased compared to the sale of seven held for sale properties during the nine months ended September 30, 2019, as part of the ongoing integration and consolidation process following the acquisition of ModSpace.prior yea
The overall decrease in cash used in investing activities was partially offset by an increase in capital expenditures of $52.9 million in 2019 that was primarily a result of increased refurbishments of existing fleet, following our recent acquisitions, and purchases of VAPSr due to drive revenue growth.lower sales demand.
Cash Flows from Financing Activities
Cash provided by financing activities forfor the ninesix months ended SeptemberJune 30, 20192020 was $18.6$614.7 million as compared to $1,161.4$21.4 million of cash provided by financing activities for the ninesix months ended SeptemberJune 30, 2018, a decrease2019, an increase of $1,142.8$593.3 million. The decreaseincrease is primarily due to a reductiondecrease of $338.0 million in borrowings, netrepayment of repayments of $1,020.1 million, andborrowings, a decrease in receipts from theborrowings of $243.1 million, partially offset by an increase of $4.6 million in receipts from issuance of common stock of $147.0 million primarily related to the financing of the ModSpace acquisition. In connection with the ModSpace acquisition, in the third quarter of 2018, we borrowed an aggregate of $1,079.1 million related to the issuance of the 2023 Secured Notes and the Unsecured Notes, and through the up-sized ABL Facility. We also received proceeds from the issuance of the Company's Class A common stock of $147.2 million.
The decrease in cash provided by financing activities was partially offset by a decrease in financing fees payments of $32.2 million due to the ModSpace financing activities in 2018.stock.
Free Cash Flow
Free Cash Flow is a non-GAAP measure. We define Free Cash Flow is defined 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 information to investors regarding our results of operations because it provides useful additional information concerning cash flow available to meet future debt service obligations and working capital requirements. The following table provides a reconciliation of net cash provided by operating activities to Free Cash Flow.
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Six Months Ended
June 30,
(in thousands)20202019
Net cash provided by operating activities$113,727  $60,054  
Purchase of rental equipment and refurbishments(79,682) (113,088) 
Proceeds from sale of rental equipment12,102  23,083  
Purchase of property, plant and equipment(3,186) (3,899) 
Proceeds from the sale of property, plant and equipment3,843  8,891  
Free Cash Flow$46,804  $(24,959) 
Free Cash FlowsFlow for the threesix months ended SeptemberJune 30, 2019 and 2018, are derived by subtracting the cash flows from operating activities and the relevant line items within financing activities2020 was an inflow of $46.8 million as compared to an outflow of $25.0 million for the six months ended June 30, 2019, and 2018, from corresponding items for the nine months ended September 30, 2019 and 2018, respectively.
Three Months Ended September 30,Nine Months Ended
September 30,
(in thousands)2019201820192018
Net cash provided by operating activities$39,022  $(3,220) $99,076  $15,580  
Purchase of rental equipment and refurbishments(47,789) (46,742) (160,877) (111,505) 
Proceeds from sale of rental equipment8,421  9,560  31,504  21,593  
Purchase of property, plant and equipment(2,701) (1,475) (6,600) (3,091) 
Proceeds from the sale of property, plant and equipment4,308  —  13,199  681  
Free Cash Flow$1,261  $(41,877) $(23,698) $(76,742) 
Free Cash Flow for the nine months ended September 30, 2019 was an outflow of $23.7 million as compared to an outflow of $76.7 million for the nine months ended September 30, 2018, an increase in Free Cash Flow of $53.0$71.8 million. Free Cash Flow increased year over year principally drivenas a result of reinvesting the $53.6 million increase in cash provided by increasesoperating activities and $33.4 million decrease in Adjusted EBITDAcash used in the purchase of $119.6rental equipment and refurbishments. The $75.4 million or 84.2%,in cash provided by operating activities for the ninethree months ended SeptemberJune 30, 20192020 was reinvested into the business to support the purchase of rental equipment, including VAPS, and an increase of $12.5 million inrefurbishments, partially offset by the proceeds from the sale of rental equipment and property, plant and equipment as a result of the sale of surplus real estate in the period. These increases were partially offset by an increase in integration, restructuring, and transaction costs incurred of $3.9 million primarily related to the ModSpace integration, increased interest paid during the period of $66.2 million due to increased debt on the US ABL Facility and as a result of the issuance of the 2023 Secured Notes and the Unsecured Notes which only impacted 1.5 months of the nine months ended September 30, 2018, and a Net CAPEX increase of $43.0 million as a result of the increased fleet size and our investment in refurbishments of rental equipment and VAPS.equipment.

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Contractual Obligations
Other than changes which occur in the normal course of business and those associated with the Merger, there were no significant changes to the contractual obligations reported in our 20182019 Form 10-K for the three and ninesix months ended SeptemberJune 30, 2019.2020.

Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements other than the completion of the Merger that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.


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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 fiscal year ended December 31, 2018.2019.
Other than adoption of recent accounting standards as discussed in Note 1 to the notes to our unaudited condensed consolidated financial statements, thereThere were no significant changes to our critical accounting policies during the ninesix months ended SeptemberJune 30, 2019.2020.

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 and adopted accounting standards.

Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the U.S. 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 WillScot believes that these forward-looking statements are based on reasonable assumptions, it 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 effectively compete in the modular space and portable storage industry;
changes in demand within a number of key industry end-markets and geographic regions;
the effect of economic conditions in the industries and markets in which the Company operates and any changes therein, including financial market conditions, fluctuations in commodity prices, interest rates and foreign currency exchange rates, levels of end market demand in construction, the impact of weather conditions and natural disasters, the impact of the global pandemic related to COVID-19 and the financial condition of the Company’s customers and suppliers;
our ability to manage growth and execute our business plan;
rising costs adversely affecting our profitability (including cost increases resulting from tariffs);
effective management of our rental equipment;
our ability to acquire and successfully integrate new operations including Mobile Mini, and achieve desired synergies;
the effect of changes in state building codes on our ability to remarket our buildings;
our ability to effectively manage our credit risk, collect on our accounts receivable, or recover our rental equipment;
foreign currency exchange rate exposure;
our reliance on third party manufacturers and suppliers;
our ability to realize anticipated synergies from the Merger with Mobile Mini;
risks associated with labor relations, labor costs and labor disruptions;
failure to retain key personnel; and
such other risks and uncertainties described in the periodic reports we file with the SEC from time to time (including our Annual Report on Form 10-K for the year ending December 31, 2018)2019), which are available through the SEC’s EDGAR system at www.sec.gov and on our website.
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Any forward-looking statement speaks only at the date which it is made, and WillScot undertakes 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.

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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 based on LIBOR. We had $917.5865.0 million in outstanding principal under the ABL Facility at SeptemberJune 30, 2019.2020.
In order to manage this risk, Onon November 6, 2018, WSII entered into an interest rate swap agreement that effectively converts $400.0 million in aggregate notional amount of variable-rate debt under our ABL Facility into fixed-rate debt. The swap agreement provides for WillScot to pay a fixed rate of 3.06% per annum on the outstanding debt in exchange for receiving a variable interest rate based on 1-month LIBOR. The effect is a synthetically fixed raterate of 5.56% on the $400.0 million notional amount, when including the current applicable margin.
An increase in interest rates by 100 basis points on our ABL Facility, inclusive of the impact of our interest rate swaps, would increase our quarter to date interest expense by approximately $1.1 million.$1.0 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. 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 SeptemberJune 30, 2019.2020. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of SeptemberJune 30, 2019.2020.
Changes in Internal Controls
There were no changes in our internal control over financial reporting that occurred during our quarter ended SeptemberJune 30, 2019,2020, 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
As of SeptemberJune 30, 2019,2020, there were no material pending legal proceedings in which we or any of our subsidiaries are a party or to which any of our property is subject.


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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 Annual Report on Form 10-K for the year ended December 31, 2018,2019, and Item 1A of our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020, which have not materially changed, other thanexcept as reflected below.noted below, including certain risks applicable to the Company, after giving effect to the completion of the Merger on July 1, 2020, as discussed in Note 2 – Acquisitions and Related Financing Transactions.
Trade policies and changes
Fluctuations in trade policies, including the imposition of tariffs, their enforcement and downstream consequences,fuel costs or oil prices, a reduction in fuel supplies, or a sustained decline in oil prices may have a material adverse impacteffect on our business and results of operations,operations.
In connection with our business, to better serve our customers and outlook.
Tariffs and/limit its capital expenditures, we often move our fleet from branch to branch. In addition, the majority of our customers arrange for delivery and pickup of our units through us. Accordingly, we could be materially adversely affected by significant increases in fuel prices that result in higher costs to us for transporting equipment. In the event of fuel and trucking cost increases, we may not be able to promptly raise our prices to make up for increased costs. A significant or other developments with respect to trade policies, trade agreements, and government regulationsprolonged price fluctuation or disruption of fuel supplies could have a material adverse impacteffect on the Company's business,our financial condition and results of operations. For example,
Additionally, oil prices have been volatile and are subject to fluctuations in response to changes in supply and demand, market uncertainty and a variety of additional factors that are beyond our control. If oil prices remain volatile for an extended period of time or there is a sustained decline in demand for oil, demand for our Tank & Pump Solutions products from refineries and companies engaged in the exploration and production of oil and natural gas could be adversely impacted, which would in turn have an adverse effect on our results of operations and financial condition.

As Department of Transportation regulations change, our operations could be negatively impacted and competition for qualified drivers could increase.
We operate in the United States pursuant to operating authority granted by the U.S. Department of Transportation (the “DOT”). Our drivers must comply with the safety and fitness regulations of the DOT, including those relating to drug and alcohol testing and hours-of-service. Such matters as equipment weight and dimensions are also subject to government has imposed tariffs on steel, aluminumregulations. Our safety record could be ranked poorly compared to its peer firms. A poor safety ranking may result in the loss of customers or difficulty attracting and lumber imports from certain countries,retaining qualified drivers which could affect our results of operations. Should additional rules be enacted in the future, compliance with such rules could result in increased costsadditional costs.

Our customer base includes customers operating in a variety of industries which may be subject to changes in their competitive environment as a result of the Company forglobal, national or local economic climate in which they operate and/or economic or financial disruptions to their industry.
Our customer base includes customers operating in a variety of industries, including commercial and industrial, construction, education, energy and natural resources, government, retail and other end markets. Many of these materials. Without limitation, (i) tariffs currentlycustomers, across this wide range of industries, are facing economic and/or financial pressure from changes to their industry resulting from the global, national and local economic climate in placewhich they operate and (ii)industry-specific economic and financial disruptions, including, in some cases, consolidation and lower sales revenue from physical locations, resulting from the imposition byimpact of the federal governmentCOVID-19 pandemic and the related changes in political, social and economic conditions. These and any future changes to any of new tariffs on importsthe industries in which our customers operate could cause them to the United States could materially increase (a) the costrent fewer units from us or otherwise be unable to satisfy their obligations to us. In addition, certain of our products that wecustomers are offering for salefacing financial pressure and such pressure, from COVID-19 or lease, (b)other factors, may result in consolidation in some industries and/or an increase in bankruptcy filings by certain customers. Each of these facts and industry impacts, individually or in the cost of certain products that we source from foreign manufacturers, and (c) the cost of certain raw materials or products that we utilize. aggregate, could have a materially adverse effect on our operating results.

We may not be able to pass such increased costs onadequately protect our intellectual property and other proprietary rights that are material to our customers,business.
        Our ability to compete effectively depends in part upon protection of our rights in trademarks, copyrights and other intellectual property rights we own or license, including patents to the Mobile Mini locking system. Our use of contractual provisions, confidentiality procedures and agreements, and trademark, copyright, unfair competition, trade secret and other laws to protect our intellectual property and other proprietary rights may not be ableadequate. Litigation may be necessary to secure sourcesenforce our intellectual property rights and protect our proprietary information and patents, or to defend against claims by third parties that our services or our use of certain productsintellectual property infringe their intellectual property rights. Any litigation or claims brought by or against us could result in substantial costs and materials that are not subject to tariffs on a timely basis. Although we actively monitor our procurement policies and practices to avoid undue reliance on foreign-sourced goods subject to tariffs, when practicable, such developmentsdiversion of its resources. A successful claim of trademark, copyright or other intellectual property infringement against us could have a material adverse impact onprevent us from providing services, which could harm our business, financial condition or results of operations. In addition, a breakdown in our internal policies and procedures may lead to an unintentional disclosure of our proprietary, confidential or material non-public information, which could in turn harm our business, financial condition or results of operations.
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Our largest stockholder may have the ability to influence our business and matters requiring approval by our stockholders.
Sapphire Holding S.à r.l. (“Sapphire Holding”), which is controlled by TDR Capital LLP (“TDR Capital”), beneficially owns approximately 26% of the issued and outstanding shares of our Common Stock and warrants giving it the right to buy 2,425,000 additional shares of our Common Stock. Pursuant to a stockholders agreement entered into on July 1, 2020, by and among us and TDR Capital and certain of its affiliates, including Sapphire Holding, TDR Capital has the right to nominate two directors to our board of directors, for so long as TDR Capital beneficially owns at least 15% of our Common Stock and one director for so long as TDR Capital beneficially owns at least 5% of our Common Stock. Two directors nominated by Sapphire Holding currently serve on our board of directors. Sapphire Holding may have the ability to influence matters requiring approval by our stockholders, including the election and removal of directors, amendments to our certificate of incorporation and bylaws, any proposed merger, consolidation or sale of all or substantially all of our assets and certain other corporate transactions. Sapphire Holding may have interests that are different from those of other stockholders.
In August 2018, Sapphire Holding pledged all of the shares of WillScot’s Class A Common Stock that it owned as security for a margin loan under which Sapphire Holding borrowed $125.0 million. An event of default under the margin loan could result in the foreclosure on the pledged securities and another stockholder beneficially owning a significant amount of our Common Stock. The margin loan matures on August 23, 2020, and there can be no assurance that Sapphire will be able to extend, repay or refinance the loan on terms acceptable to it or at all.


ITEM 2. Unregistered Sales of Equity Securities
None.On June 30, 2020, as contemplated by the Merger Agreement, and pursuant to the terms of an exercise notice delivered by Sapphire Holdings to WillScot, Sapphire Holdings exchanged each of its shares of common stock, par value $0.0001, of Holdings, pursuant to that certain existing exchange agreement, between WillScot and Sapphire Holdings, for 1.3261 shares of newly issued Class A Common Stock (the “Sapphire Exchange”). As a result of the Sapphire Exchange, all issued and outstanding shares of WillScot’s Class B common stock, par value $0.0001 per share (the “Class B Common Stock”), were automatically canceled for no consideration and the existing exchange agreement was automatically terminated. As a result of the Sapphire Exchange, Holdings became a wholly-owned subsidiary of WillScot. Sapphire Holdings received 10,641,182 shares of Class A Common Stock in the Sapphire Exchange (the “Exchange Shares”). The Exchange Shares were issued in reliance on an exemption from the registration requirements of the Securities Act, by virtue of Section 4(a)(2) and/or other exemptions therefrom, as promulgated by the SEC under the Securities Act.

ITEM 3. Defaults Upon Senior Securities
None.

ITEM 4. Mine Safety Disclosures
Not applicable.

ITEM 5. Other Information
None.


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ITEM 6. Exhibits
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Exhibit No.Exhibit Description
*Agreement and Plan of Merger, dated as of March 1, 2020, by and among WillScot Corporation, Picasso Merger Sub, Inc. and Mobile Mini, Inc. (incorporated by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K, filed March 5, 2020).
Amendment to Agreement and Plan of Merger, dated as of May 28, 2020, by and among WillScot Corporation, Picasso Merger Sub, Inc. and Mobile Mini, Inc. (incorporated by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K, filed June 2, 2020).
Amendment to Agreement and Plan of Merger, dated as of May 28, 2020, by and among WillScot Corporation, Picasso Merger Sub, Inc. and Mobile Mini, Inc. (incorporated by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K, filed June 2, 2020).
Amended and Restated Certificate of Incorporation of WillScot Mobile Mini Holdings Corp. (incorporated by reference to Exhibit 3.1(b) of the Company's Current Report on Form 8-K, filed July 1, 2020).
Amended and Restated Bylaws of WillScot Mobile Mini Holdings Corp. (incorporated by reference to Exhibit 3.2 of the Company's Current Report on Form 8-K, filed July 1, 2020).
Indenture, dated as of June 15, 2020, by and between Picasso Finance Sub, Inc., and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K, filed June 16, 2020).
Supplemental Indenture, dated July 1, 2020, to the Indenture dated June 15, 2020, by and among Williams Scotsman International, Inc. (“WSII”) (as successor to Picasso Finance Sub, Inc.), the guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K, filed July 1, 2020).
Supplemental Indenture, dated July 1, 2020, to the Indenture dated August 6, 2018, as supplemented by the First Supplemental Indenture dated August 15, 2018, by and among WSII (as successor to Mason Finance Sub, Inc.), the guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference to Exhibit 4.2 of the Company's Current Report on Form 8-K, filed July 1, 2020).
Sixth Amended and Restated Commitment Letter, dated as of May 26, 2020, by and among WillScot Corporation, Bank of America, N.A., BofA Securities, Inc., Deutsche Bank AG New York Branch, Deutsche Bank Securities Inc., JPMorgan Chase Bank, N.A., ING Capital LLC, BBVA USA, Bank of the West, PNC Bank, National Association, PNC Capital Markets LLC, MUFG Union Bank, N.A., Bank of Montreal, BMO Capital Markets Corp. and M&T Bank
Shareholders Agreement, dated July 1, 2020, by and among WillScot Mobile Mini Holdings Corp., Sapphire Holdings, S.á r.l., TDR Capital Holdings L.P. and TDR Capital LLP (incorporated by reference to Exhibit 1.1 of the Company's Current Report on Form 8-K, filed July 1, 2020).
ABL Credit Agreement, dated July 1, 2020, by and among Williams Scotsman Holdings Corp., WSII, the guarantors party thereto, the lenders party thereto, and Bank of America, N.A., as administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K, filed July 1, 2020).
WillScot Mobile Mini Holdings Corp. 2020 Incentive Award Plan (incorporated by reference to Exhibit 10.3 of the Company's Current Report on Form 8-K, filed July 1, 2020).
Form of Indemnification Agreement (incorporated by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K, filed July 1, 2020).
Form of Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.4 of the Company's Current Report on Form 8-K, filed July 1, 2020).
Form of Performance-Based Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.5 of the Company's Current Report on Form 8-K, filed July 1, 2020).
*
*
**
**
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
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*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, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
WillScot Corporation
By:
/s/ TIMOTHY D. BOSWELL
Dated:November 8, 2019August 10, 2020Timothy D. Boswell
Chief Financial Officer (Principal Financial Officer)



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