Condensed Consolidating Financial Information | (17) Condensed Consolidating Financial Information The following tables reflect the condensed consolidating financial information of the Company’s subsidiary guarantors of the Senior Notes and its non-guarantor subsidiaries. Separate financial statements of the subsidiary guarantors are not presented because the guarantee by each 100% owned subsidiary guarantor is full and unconditional, joint and several, subject to customary exceptions, and management has determined that such information is not material to investors. MOBILE MINI, INC. CONDENSED CONSOLIDATING BALANCE SHEETS As of June 30, 2017 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated ASSETS Cash and cash equivalents $ 429 $ 8,845 $ — $ 9,274 Receivables, net 72,431 19,959 — 92,390 Inventories 14,637 1,762 — 16,399 Rental fleet, net 807,230 156,911 — 964,141 Property, plant and equipment, net 130,370 20,266 — 150,636 Other assets 14,117 3,011 — 17,128 Intangibles, net 64,418 786 — 65,204 Goodwill 645,126 61,476 — 706,602 Intercompany receivables 145,954 4,541 (150,495 ) — Total assets $ 1,894,712 $ 277,557 $ (150,495 ) $ 2,021,774 LIABILITIES AND STOCKHOLDERS' Liabilities: Accounts payable $ 22,438 $ 8,270 $ — $ 30,708 Accrued liabilities 56,589 8,367 — 64,956 Lines of credit 637,651 — — 637,651 Obligations under capital leases 49,148 154 — 49,302 Senior Notes, net 245,531 — — 245,531 Deferred income taxes 213,303 18,276 — 231,579 Intercompany payables 838 1,658 (2,496 ) — Total liabilities 1,225,498 36,725 (2,496 ) 1,259,727 Commitments and contingencies Stockholders' equity: Common stock 495 — — 495 Additional paid-in capital 597,658 147,999 (147,999 ) 597,658 Retained earnings 217,844 162,281 — 380,125 Accumulated other comprehensive loss — (69,448 ) — (69,448 ) Treasury stock, at cost (146,783 ) — — (146,783 ) Total stockholders' equity 669,214 240,832 (147,999 ) 762,047 Total liabilities and stockholders' equity $ 1,894,712 $ 277,557 $ (150,495 ) $ 2,021,774 MOBILE MINI, INC. CONDENSED CONSOLIDATING BALANCE SHEETS As of December 31, 2016 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated ASSETS Cash and cash equivalents $ 1,260 $ 2,877 $ — $ 4,137 Receivables, net 80,476 18,699 — 99,175 Inventories 14,526 886 — 15,412 Rental fleet, net 803,553 146,512 — 950,065 Property, plant and equipment, net 129,458 19,739 — 149,197 Other assets 13,189 1,741 — 14,930 Intangibles, net 67,487 933 — 68,420 Goodwill 645,126 58,432 — 703,558 Intercompany receivables 146,016 4,513 (150,529 ) — Total assets $ 1,901,091 $ 254,332 $ (150,529 ) $ 2,004,894 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Accounts payable $ 20,218 $ 7,170 $ — $ 27,388 Accrued liabilities 57,025 7,101 — 64,126 Lines of credit 640,975 185 — 641,160 Obligations under capital leases 50,507 197 — 50,704 Senior Notes, net 245,212 — — 245,212 Deferred income taxes 224,212 16,478 — 240,690 Intercompany payables 384 2,146 (2,530 ) — Total liabilities 1,238,533 33,277 (2,530 ) 1,269,280 Commitments and contingencies Stockholders' equity: Common stock 493 — — 493 Additional paid-in capital 592,071 147,999 (147,999 ) 592,071 Retained earnings 208,793 154,103 — 362,896 Accumulated other comprehensive loss — (81,047 ) — (81,047 ) Treasury stock, at cost (138,799 ) — — (138,799 ) Total stockholders' equity 662,558 221,055 (147,999 ) 735,614 Total liabilities and stockholders' equity $ 1,901,091 $ 254,332 $ (150,529 ) $ 2,004,894 MOBILE MINI, INC. CONDENSED CONSOLIDATING STATEMENTS OF INCOME Three Months Ended June 30, 2017 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Revenues: Rental $ 98,215 $ 19,636 $ — $ 117,851 Sales 6,212 2,189 — 8,401 Other 365 73 — 438 Total revenues 104,792 21,898 — 126,690 Costs and expenses: Rental, selling and general expenses 69,799 13,051 — 82,850 Cost of sales 3,700 1,708 — 5,408 Restructuring expenses 538 — — 538 Depreciation and amortization 13,930 1,812 — 15,742 Total costs and expenses 87,967 16,571 — 104,538 Income from operations 16,825 5,327 — 22,152 Other income (expense): Interest income 2,664 2 (2,650 ) 16 Interest expense (11,328 ) (129 ) 2,650 (8,807 ) Foreign currency exchange — (18 ) — (18 ) Income before income tax provision 8,161 5,182 — 13,343 Income tax provision 3,655 911 — 4,566 Net income $ 4,506 $ 4,271 $ — $ 8,777 MOBILE MINI, INC. CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME Three Months Ended June 30, 2017 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Net income $ 4,506 $ 4,271 $ — $ 8,777 Foreign currency translation adjustment — 9,096 — 9,096 Comprehensive income $ 4,506 $ 13,367 $ — $ 17,873 MOBILE MINI, INC. CONDENSED CONSOLIDATING STATEMENTS OF INCOME Three Months Ended June 30, 2016 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Revenues: Rental $ 95,555 $ 21,218 $ — $ 116,773 Sales 5,865 477 — 6,342 Other 1,687 47 — 1,734 Total revenues 103,107 21,742 — 124,849 Costs and expenses: Rental, selling and general expenses 64,935 13,102 — 78,037 Cost of sales 3,361 317 — 3,678 Restructuring expenses 1,324 — — 1,324 Depreciation and amortization 14,369 1,900 — 16,269 Total costs and expenses 83,989 15,319 — 99,308 Income from operations 19,118 6,423 — 25,541 Other income (expense): Interest income 2,653 — (2,653 ) — Interest expense (10,519 ) (136 ) 2,653 (8,002 ) Debt extinguishment expense (9,192 ) — — (9,192 ) Deferred financing costs write-off (2,271 ) — — (2,271 ) Foreign currency exchange — (4 ) — (4 ) (Loss) income before income tax provision (211 ) 6,283 — 6,072 Income tax provision 924 1,076 — 2,000 Net (loss) income $ (1,135 ) $ 5,207 $ — $ 4,072 MOBILE MINI, INC. CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME Three Months Ended June 30, 2016 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Net (loss) income $ (1,135 ) $ 5,207 $ — $ 4,072 Foreign currency translation adjustment — (15,272 ) — (15,272 ) Comprehensive loss $ (1,135 ) $ (10,065 ) $ — $ (11,200 ) MOBILE MINI, INC. CONDENSED CONSOLIDATING STATEMENTS OF INCOME Six Months Ended June 30, 2017 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Revenues: Rental $ 194,158 $ 38,435 $ — $ 232,593 Sales 12,163 4,216 — 16,379 Other 1,061 184 — 1,245 Total revenues 207,382 42,835 — 250,217 Costs and expenses: Rental, selling and general expenses 135,380 25,829 — 161,209 Cost of sales 7,187 3,333 — 10,520 Restructuring expenses 1,437 — — 1,437 Depreciation and amortization 27,438 3,568 — 31,006 Total costs and expenses 171,442 32,730 — 204,172 Income from operations 35,940 10,105 — 46,045 Other income (expense): Interest income 5,314 2 (5,300 ) 16 Interest expense (22,254 ) (255 ) 5,300 (17,209 ) Foreign currency exchange — (27 ) — (27 ) Income before income tax provision 19,000 9,825 — 28,825 Income tax provision 8,248 1,648 — 9,896 Net income $ 10,752 $ 8,177 $ — $ 18,929 MOBILE MINI, INC. CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME Six Months Ended June 30, 2017 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Net income $ 10,752 $ 8,177 $ — $ 18,929 Foreign currency translation adjustment — 11,599 — 11,599 Comprehensive income $ 10,752 $ 19,776 $ — $ 30,528 MOBILE MINI, INC. CONDENSED CONSOLIDATING STATEMENTS OF INCOME Six Months Ended June 30, 2016 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Revenues: Rental $ 192,445 $ 41,684 $ — $ 234,129 Sales 11,826 1,407 — 13,233 Other 1,915 105 — 2,020 Total revenues 206,186 43,196 — 249,382 Costs and expenses: Rental, selling and general expenses 128,174 26,165 — 154,339 Cost of sales 7,271 1,018 — 8,289 Restructuring expenses 3,572 — — 3,572 Depreciation and amortization 27,746 3,700 — 31,446 Total costs and expenses 166,763 30,883 — 197,646 Income from operations 39,423 12,313 — 51,736 Other income (expense): Interest income 5,307 — (5,307 ) — Interest expense (21,388 ) (405 ) 5,307 (16,486 ) Debt extinguishment expense (9,192 ) — — (9,192 ) Deferred financing costs write-off (2,271 ) — — (2,271 ) Foreign currency exchange — (4 ) — (4 ) Income before income tax provision 11,879 11,904 — 23,783 Income tax provision 6,569 2,144 — 8,713 Net income $ 5,310 $ 9,760 $ — $ 15,070 MOBILE MINI, INC. CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME Six Months Ended June 30, 2016 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Net income $ 5,310 $ 9,760 $ — $ 15,070 Foreign currency translation adjustment — (18,985 ) — (18,985 ) Comprehensive income (loss) $ 5,310 $ (9,225 ) $ — $ (3,915 ) MOBILE MINI, INC. CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS Six Months Ended June 30, 2017 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Cash flows from operating activities: Net income $ 10,752 $ 8,177 $ — $ 18,929 Adjustments to reconcile net income to net cash provided by operating activities: Provision for doubtful accounts 1,996 206 — 2,202 Amortization of deferred financing costs 1,030 — — 1,030 Amortization of long-term liabilities 65 — — 65 Share-based compensation expense 3,672 148 — 3,820 Depreciation and amortization 27,438 3,568 — 31,006 Gain on sale of rental fleet units (2,657 ) (169 ) — (2,826 ) Loss on disposal of property, plant and equipment 62 220 — 282 Deferred income taxes 8,266 885 — 9,151 Foreign currency exchange — 27 — 27 Changes in certain assets and liabilities, net of effect of businesses acquired: Receivables 6,049 (464 ) — 5,585 Inventories (110 ) (794 ) — (904 ) Other assets (1,636 ) (1,158 ) — (2,794 ) Accounts payable (1,881 ) (311 ) — (2,192 ) Accrued liabilities (1,030 ) 870 — (160 ) Intercompany 237 (237 ) — — Net cash provided by operating activities 52,253 10,968 — 63,221 Cash flows from investing activities: Additions to rental fleet, excluding acquisitions (18,391 ) (4,636 ) — (23,027 ) Proceeds from sale of rental fleet 5,709 574 — 6,283 Additions to property, plant and equipment, excluding acquisitions (6,976 ) (1,731 ) — (8,707 ) Proceeds from sale of property, plant and equipment 67 701 — 768 Net cash used in investing activities (19,591 ) (5,092 ) — (24,683 ) Cash flows from financing activities: Net repayments under lines of credit (3,324 ) (185 ) — (3,509 ) Deferred financing costs (12 ) — — (12 ) Principal payments on capital lease obligations (3,694 ) (42 ) — (3,736 ) Issuance of common stock 1,640 — — 1,640 Dividend payments (20,119 ) — — (20,119 ) Purchase of treasury stock (7,984 ) — — (7,984 ) Net cash used in financing activities (33,493 ) (227 ) — (33,720 ) Effect of exchange rate changes on cash — 319 — 319 Net (decrease) increase in cash (831 ) 5,968 — 5,137 Cash and cash equivalents at beginning of period 1,260 2,877 — 4,137 Cash and cash equivalents at end of period $ 429 $ 8,845 $ — $ 9,274 MOBILE MINI, INC. CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS Six Months Ended June 30, 2016 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Cash flows from operating activities: Net income $ 5,310 $ 9,760 $ — $ 15,070 Adjustments to reconcile net income to net cash provided by operating activities: Debt extinguishment expense 9,192 — — 9,192 Deferred financing costs write-off 2,271 — — 2,271 Provision for doubtful accounts 2,434 212 — 2,646 Amortization of deferred financing costs 941 7 — 948 Amortization of long-term liabilities 58 — — 58 Share-based compensation expense 4,106 139 — 4,245 Depreciation and amortization 27,746 3,700 — 31,446 Gain on sale of rental fleet units (2,500 ) (282 ) — (2,782 ) Loss on disposal of property, plant and equipment 521 168 — 689 Deferred income taxes 6,399 2,143 — 8,542 Foreign currency exchange — 4 4 Changes in certain assets and liabilities, net of effect of businesses acquired: Receivables (10,758 ) (1,538 ) — (12,296 ) Inventories (2,173 ) 383 — (1,790 ) Other assets 540 (58 ) — 482 Accounts payable 3,029 2,736 — 5,765 Accrued liabilities 202 18 — 220 Intercompany 764 (764 ) — — Net cash provided by operating activities 48,082 16,628 — 64,710 Cash flows from investing activities: Cash paid for businesses acquired, net of cash acquired (9,206 ) — — (9,206 ) Additions to rental fleet, excluding acquisitions (20,657 ) (7,501 ) — (28,158 ) Proceeds from sale of rental fleet 6,332 1,077 — 7,409 Additions to property, plant and equipment, excluding acquisitions (13,301 ) (5,962 ) — (19,263 ) Proceeds from sale of property, plant and equipment 1,166 449 — 1,615 Net cash used in investing activities (35,666 ) (11,937 ) — (47,603 ) Cash flows from financing activities: Net repayments under lines of credit (19,513 ) (1,448 ) — (20,961 ) Proceeds from issuance of 5.875% senior notes due 2024 250,000 — — 250,000 Redemption of 7.875% senior notes due 2020 (200,000 ) — — (200,000 ) Debt extinguishment expense (9,192 ) — — (9,192 ) Deferred financing costs (4,916 ) — — (4,916 ) Principal payments on capital lease obligations (2,848 ) (72 ) — (2,920 ) Issuance of common stock 92 — — 92 Dividend payments (18,236 ) — — (18,236 ) Purchase of treasury stock (7,096 ) — — (7,096 ) Net cash used in financing activities (11,709 ) (1,520 ) — (13,229 ) Effect of exchange rate changes on cash — (152 ) — (152 ) Net increase in cash 707 3,019 — 3,726 Cash and cash equivalents at beginning of period 1,033 580 — 1,613 Cash and cash equivalents at end of period $ 1,740 $ 3,599 $ — $ 5,339 |