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 September 30, 2017 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated ASSETS Cash and cash equivalents $ 1,456 $ 11,153 $ — $ 12,609 Receivables, net 79,790 21,020 — 100,810 Inventories 14,759 2,254 — 17,013 Rental fleet, net 818,480 164,808 — 983,288 Property, plant and equipment, net 131,644 21,005 — 152,649 Other assets 12,215 3,169 — 15,384 Intangibles, net 62,889 735 — 63,624 Goodwill 645,126 63,415 — 708,541 Intercompany receivables 146,008 4,559 (150,567 ) — Total assets $ 1,912,367 $ 292,118 $ (150,567 ) $ 2,053,918 LIABILITIES AND STOCKHOLDERS' Liabilities: Accounts payable $ 21,956 $ 8,474 $ — $ 30,430 Accrued liabilities 62,594 8,947 — 71,541 Lines of credit 640,879 — — 640,879 Obligations under capital leases 51,637 152 — 51,789 Senior notes, net 245,691 — — 245,691 Deferred income taxes 218,580 19,487 — 238,067 Intercompany payables 1,042 1,526 (2,568 ) — Total liabilities 1,242,379 38,586 (2,568 ) 1,278,397 Commitments and contingencies Stockholders' equity: Common stock 496 — — 496 Additional paid-in capital 602,772 147,999 (147,999 ) 602,772 Retained earnings 213,879 167,415 — 381,294 Accumulated other comprehensive loss — (61,882 ) — (61,882 ) Treasury stock, at cost (147,159 ) — — (147,159 ) Total stockholders' equity 669,988 253,532 (147,999 ) 775,521 Total liabilities and stockholders' equity $ 1,912,367 $ 292,118 $ (150,567 ) $ 2,053,918 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 September 30, 2017 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Revenues: Rental $ 106,593 $ 21,102 $ — $ 127,695 Sales 6,176 2,262 — 8,438 Other 371 132 — 503 Total revenues 113,140 23,496 — 136,636 Costs and expenses: Rental, selling and general expenses 74,194 13,551 — 87,745 Cost of sales 3,686 1,833 — 5,519 Restructuring expenses 625 — — 625 Depreciation and amortization 14,065 1,870 — 15,935 Total costs and expenses 92,570 17,254 — 109,824 Income from operations 20,570 6,242 — 26,812 Other income (expense): Interest income 2,652 2 (2,650 ) 4 Interest expense (11,727 ) (126 ) 2,650 (9,203 ) Foreign currency exchange — (2 ) — (2 ) Income before income tax provision 11,495 6,116 — 17,611 Income tax provision 5,402 981 — 6,383 Net income $ 6,093 $ 5,135 $ — $ 11,228 MOBILE MINI, INC. CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME Three Months Ended September 30, 2017 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Net income $ 6,093 $ 5,135 $ — $ 11,228 Foreign currency translation adjustment — 7,566 — 7,566 Comprehensive income $ 6,093 $ 12,701 $ — $ 18,794 MOBILE MINI, INC. CONDENSED CONSOLIDATING STATEMENTS OF INCOME Three Months Ended September 30, 2016 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Revenues: Rental $ 101,179 $ 20,605 $ — $ 121,784 Sales 6,130 480 — 6,610 Other 322 137 — 459 Total revenues 107,631 21,222 — 128,853 Costs and expenses: Rental, selling and general expenses 67,369 13,088 — 80,457 Cost of sales 3,564 333 — 3,897 Restructuring expenses 1,643 5 — 1,648 Depreciation and amortization 14,377 1,807 — 16,184 Total costs and expenses 86,953 15,233 — 102,186 Income from operations 20,678 5,989 — 26,667 Other income (expense): Interest income 2,654 — (2,654 ) — Interest expense (10,562 ) (139 ) 2,654 (8,047 ) Foreign currency exchange — (5 ) — (5 ) Income before income tax provision 12,770 5,845 — 18,615 Income tax provision 5,827 79 — 5,906 Net income $ 6,943 $ 5,766 $ — $ 12,709 MOBILE MINI, INC. CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME Three Months Ended September 30, 2016 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Net income $ 6,943 $ 5,766 $ — $ 12,709 Foreign currency translation adjustment — (6,435 ) — (6,435 ) Comprehensive income (loss) $ 6,943 $ (669 ) $ — $ 6,274 MOBILE MINI, INC. CONDENSED CONSOLIDATING STATEMENTS OF INCOME Nine Months Ended September 30, 2017 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Revenues: Rental $ 300,751 $ 59,537 $ — $ 360,288 Sales 18,339 6,478 — 24,817 Other 1,432 316 — 1,748 Total revenues 320,522 66,331 — 386,853 Costs and expenses: Rental, selling and general expenses 209,574 39,380 — 248,954 Cost of sales 10,873 5,166 — 16,039 Restructuring expenses 2,062 — — 2,062 Depreciation and amortization 41,503 5,438 — 46,941 Total costs and expenses 264,012 49,984 — 313,996 Income from operations 56,510 16,347 — 72,857 Other income (expense): Interest income 7,966 4 (7,950 ) 20 Interest expense (33,981 ) (381 ) 7,950 (26,412 ) Foreign currency exchange — (29 ) — (29 ) Income before income tax provision 30,495 15,941 — 46,436 Income tax provision 13,650 2,629 — 16,279 Net income $ 16,845 $ 13,312 $ — $ 30,157 MOBILE MINI, INC. CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME Nine Months Ended September 30, 2017 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Net income $ 16,845 $ 13,312 $ — $ 30,157 Foreign currency translation adjustment — 19,165 — 19,165 Comprehensive income $ 16,845 $ 32,477 $ — $ 49,322 MOBILE MINI, INC. CONDENSED CONSOLIDATING STATEMENTS OF INCOME Nine Months Ended September 30, 2016 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Revenues: Rental $ 293,624 $ 62,289 $ — $ 355,913 Sales 17,956 1,887 — 19,843 Other 2,237 242 — 2,479 Total revenues 313,817 64,418 — 378,235 Costs and expenses: Rental, selling and general expenses 195,543 39,253 — 234,796 Cost of sales 10,835 1,351 — 12,186 Restructuring expenses 5,215 5 — 5,220 Depreciation and amortization 42,123 5,507 — 47,630 Total costs and expenses 253,716 46,116 — 299,832 Income from operations 60,101 18,302 — 78,403 Other income (expense): Interest income 7,961 — (7,961 ) — Interest expense (31,950 ) (544 ) 7,961 (24,533 ) Debt extinguishment expense (9,192 ) — — (9,192 ) Deferred financing costs write-off (2,271 ) — — (2,271 ) Foreign currency exchange — (9 ) — (9 ) Income before income tax provision 24,649 17,749 — 42,398 Income tax provision 12,396 2,223 — 14,619 Net income $ 12,253 $ 15,526 $ — $ 27,779 MOBILE MINI, INC. CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME Nine Months Ended September 30, 2016 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Net income $ 12,253 $ 15,526 $ — $ 27,779 Foreign currency translation adjustment — (25,420 ) — (25,420 ) Comprehensive income (loss) $ 12,253 $ (9,894 ) $ — $ 2,359 MOBILE MINI, INC. CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS Nine Months Ended September 30, 2017 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Cash flows from operating activities: Net income $ 16,845 $ 13,312 $ — $ 30,157 Adjustments to reconcile net income to net cash provided by operating activities: Provision for doubtful accounts 2,839 337 — 3,176 Amortization of deferred financing costs 1,545 — — 1,545 Amortization of long-term liabilities 98 — — 98 Share-based compensation expense 5,671 219 — 5,890 Depreciation and amortization 41,503 5,438 — 46,941 Gain on sale of rental fleet units (4,014 ) (259 ) — (4,273 ) Loss on disposal of property, plant and equipment 105 367 — 472 Deferred income taxes 13,649 1,518 — 15,167 Foreign currency exchange — 29 — 29 Changes in certain assets and liabilities, net of effect of businesses acquired: Receivables (2,153 ) (1,030 ) — (3,183 ) Inventories (232 ) (1,211 ) — (1,443 ) Other assets 728 (1,225 ) — (497 ) Accounts payable (2,961 ) (239 ) — (3,200 ) Accrued liabilities 3,772 1,181 — 4,953 Intercompany 274 (274 ) — — Net cash provided by operating activities 77,669 18,163 — 95,832 Cash flows from investing activities: Additions to rental fleet, excluding acquisitions (36,757 ) (9,188 ) — (45,945 ) Proceeds from sale of rental fleet 8,599 1,003 — 9,602 Additions to property, plant and equipment, excluding acquisitions (10,010 ) (2,806 ) — (12,816 ) Proceeds from sale of property, plant and equipment 78 702 — 780 Net cash used in investing activities (38,090 ) (10,289 ) — (48,379 ) Cash flows from financing activities: Net repayments under lines of credit (96 ) (185 ) — (281 ) Deferred financing costs (12 ) — — (12 ) Principal payments on capital lease obligations (5,481 ) (45 ) — (5,526 ) Issuance of common stock 4,685 — — 4,685 Dividend payments (30,120 ) — — (30,120 ) Purchase of treasury stock (8,359 ) — — (8,359 ) Net cash used in financing activities (39,383 ) (230 ) — (39,613 ) Effect of exchange rate changes on cash — 632 — 632 Net increase in cash 196 8,276 — 8,472 Cash and cash equivalents at beginning of period 1,260 2,877 — 4,137 Cash and cash equivalents at end of period $ 1,456 $ 11,153 $ — $ 12,609 MOBILE MINI, INC. CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS Nine Months Ended September 30, 2016 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Cash flows from operating activities: Net income $ 12,253 $ 15,526 $ — $ 27,779 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 3,759 531 — 4,290 Amortization of deferred financing costs 1,449 8 — 1,457 Amortization of long-term liabilities 87 — — 87 Share-based compensation expense 6,314 207 — 6,521 Depreciation and amortization 42,123 5,507 — 47,630 Gain on sale of rental fleet units (3,862 ) (366 ) — (4,228 ) Loss on disposal of property, plant and equipment 942 147 — 1,089 Deferred income taxes 12,226 2,222 — 14,448 Foreign currency exchange — 9 9 Changes in certain assets and liabilities, net of effect of businesses acquired: Receivables (16,432 ) (2,667 ) — (19,099 ) Inventories (3,085 ) 405 — (2,680 ) Other assets 408 154 — 562 Accounts payable 871 3,081 — 3,952 Accrued liabilities 2,740 1 — 2,741 Intercompany 771 (771 ) — — Net cash provided by operating activities 72,027 23,994 — 96,021 Cash flows from investing activities: Cash paid for businesses acquired, net of cash acquired (9,206 ) — — (9,206 ) Additions to rental fleet, excluding acquisitions (37,012 ) (9,468 ) — (46,480 ) Proceeds from sale of rental fleet 9,404 1,366 — 10,770 Additions to property, plant and equipment, excluding acquisitions (18,300 ) (7,450 ) — (25,750 ) Proceeds from sale of property, plant and equipment 1,732 637 — 2,369 Net cash used in investing activities (53,382 ) (14,915 ) — (68,297 ) Cash flows from financing activities: Net repayments under lines of credit (14,300 ) (1,871 ) — (16,171 ) 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 (5,352 ) — — (5,352 ) Principal payments on capital lease obligations (4,592 ) (101 ) — (4,693 ) Issuance of common stock 356 — — 356 Dividend payments (27,327 ) — — (27,327 ) Purchase of treasury stock (7,135 ) — — (7,135 ) Net cash used in financing activities (17,542 ) (1,972 ) — (19,514 ) Effect of exchange rate changes on cash — (301 ) — (301 ) Net increase in cash 1,103 6,806 — 7,909 Cash and cash equivalents at beginning of period 1,033 580 — 1,613 Cash and cash equivalents at end of period $ 2,136 $ 7,386 $ — $ 9,522 |