Condensed Consolidating Financial Information | (19) 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, 2018 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated ASSETS Cash and cash equivalents $ 1,795 $ 3,140 $ — $ 4,935 Receivables, net 100,273 17,828 — 118,101 Inventories 11,449 1,995 — 13,444 Rental fleet, net 773,823 152,133 — 925,956 Property, plant and equipment, net 131,802 23,819 — 155,621 Other assets 14,906 2,680 — 17,586 Intangibles, net 56,734 430 — 57,164 Goodwill 645,126 61,642 — 706,768 Intercompany receivables 148,005 34,508 (182,513 ) — Total assets $ 1,883,913 $ 298,175 $ (182,513 ) $ 1,999,575 LIABILITIES AND STOCKHOLDERS' Liabilities: Accounts payable $ 26,150 $ 6,460 $ — $ 32,610 Accrued liabilities 71,431 8,683 — 80,114 Lines of credit 599,470 10,753 — 610,223 Obligations under capital leases 61,738 115 — 61,853 Senior notes, net 246,329 — — 246,329 Deferred income taxes 139,931 18,827 — 158,758 Intercompany payables 29,583 4,931 (34,514 ) — Total liabilities 1,174,632 49,769 (34,514 ) 1,189,887 Commitments and contingencies Stockholders' equity: Common stock 500 — — 500 Additional paid-in capital 616,850 147,999 (147,999 ) 616,850 Retained earnings 239,765 167,794 — 407,559 Accumulated other comprehensive loss — (67,387 ) — (67,387 ) Treasury stock, at cost (147,834 ) — — (147,834 ) Total stockholders' equity 709,281 248,406 (147,999 ) 809,688 Total liabilities and stockholders' equity $ 1,883,913 $ 298,175 $ (182,513 ) $ 1,999,575 MOBILE MINI, INC. CONDENSED CONSOLIDATING BALANCE SHEETS As of December 31, 2017 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated ASSETS Cash and cash equivalents $ 803 $ 12,648 $ — $ 13,451 Receivables, net 91,624 19,938 — 111,562 Inventories 13,471 2,200 — 15,671 Rental fleet, net 823,997 165,157 — 989,154 Property, plant and equipment, net 133,919 23,385 — 157,304 Other assets 13,324 2,010 — 15,334 Intangibles, net 61,360 664 — 62,024 Goodwill 645,126 63,781 — 708,907 Intercompany receivables 145,855 4,806 (150,661 ) — Total assets $ 1,929,479 $ 294,589 $ (150,661 ) $ 2,073,407 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Accounts payable $ 21,004 $ 5,951 $ — $ 26,955 Accrued liabilities 71,298 6,786 — 78,084 Lines of credit 634,285 — — 634,285 Obligations under capital leases 52,648 143 — 52,791 Senior notes, net 245,850 — — 245,850 Deferred income taxes 153,345 20,409 — 173,754 Intercompany payables 1,437 1,225 (2,662 ) — Total liabilities 1,179,867 34,514 (2,662 ) 1,211,719 Commitments and contingencies Stockholders' equity: Common stock 497 — — 497 Additional paid-in capital 605,369 147,999 (147,999 ) 605,369 Retained earnings 290,912 172,410 — 463,322 Accumulated other comprehensive loss — (60,334 ) — (60,334 ) Treasury stock, at cost (147,166 ) — — (147,166 ) Total stockholders' equity 749,612 260,075 (147,999 ) 861,688 Total liabilities and stockholders' equity $ 1,929,479 $ 294,589 $ (150,661 ) $ 2,073,407 MOBILE MINI, INC. CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS Three Months Ended September 30, 2018 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Revenues: Rental $ 119,697 $ 21,227 $ — $ 140,924 Sales 6,063 2,653 — 8,716 Other 25 42 — 67 Total revenues 125,785 23,922 — 149,707 Costs and expenses: Rental, selling and general expenses 76,522 14,242 — 90,764 Cost of sales 3,681 2,089 — 5,770 Restructuring expenses — — — — Asset impairment charge and loss on divestiture, net 88,822 9,456 — 98,278 Depreciation and amortization 14,241 1,950 — 16,191 Total costs and expenses 183,266 27,737 — 211,003 Loss from operations (57,481 ) (3,815 ) — (61,296 ) Other income (expense): Interest expense (10,287 ) (200 ) (10,487 ) Foreign currency exchange — 24 24 Loss before income tax provision (67,768 ) (3,991 ) — (71,759 ) Income tax benefit (18,864 ) (730 ) — (19,594 ) Net loss $ (48,904 ) $ (3,261 ) $ — $ (52,165 ) MOBILE MINI, INC. CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE (LOSS) INCOME Three Months Ended September 30, 2018 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Net loss $ (48,904 ) $ (3,261 ) $ — $ (52,165 ) Foreign currency translation adjustment — (2,696 ) — (2,696 ) Comprehensive loss $ (48,904 ) $ (5,957 ) $ — $ (54,861 ) 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 OPERATIONS Nine Months Ended September 30, 2018 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Revenues: Rental $ 342,783 $ 63,366 $ — $ 406,149 Sales 18,864 6,836 — 25,700 Other 342 169 — 511 Total revenues 361,989 70,371 — 432,360 Costs and expenses: Rental, selling and general expenses 225,844 43,189 — 269,033 Cost of sales 11,448 5,477 — 16,925 Restructuring expenses 1,306 — — 1,306 Asset impairment charge and loss on divestiture, net 88,822 9,456 — 98,278 Depreciation and amortization 43,902 6,304 — 50,206 Total costs and expenses 371,322 64,426 — 435,748 (Loss) income from operations (9,333 ) 5,945 — (3,388 ) Other income (expense): Interest income 3 3 — 6 Dividend income 8,983 — (8,983 ) — Interest expense (29,545 ) (634 ) — (30,179 ) Foreign currency exchange 48 21 — 69 (Loss) income before income tax provision (29,844 ) 5,335 (8,983 ) (33,492 ) Income tax (benefit) provision (12,152 ) 970 — (11,182 ) Net (loss) income $ (17,692 ) $ 4,365 $ (8,983 ) $ (22,310 ) MOBILE MINI, INC. CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE LOSS Nine Months Ended September 30, 2018 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Net (loss) income $ (17,692 ) $ 4,365 $ (8,983 ) $ (22,310 ) Foreign currency translation adjustment — (7,053 ) — (7,053 ) Comprehensive loss $ (17,692 ) $ (2,688 ) $ (8,983 ) $ (29,363 ) 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 CASH FLOWS Nine Months Ended September 30, 2018 (In thousands) Guarantors Non- Guarantors Eliminations Consolidated Cash flows from operating activities: Net (loss) income $ (17,692 ) $ 4,365 $ (8,983 ) $ (22,310 ) Adjustments to reconcile net (loss) income to net cash provided by operating activities: Asset impairment charge and loss on divestiture, net 88,822 9,456 — 98,278 Provision for doubtful accounts 1,884 96 — 1,980 Amortization of deferred financing costs 1,545 — — 1,545 Amortization of long-term liabilities 109 — — 109 Share-based compensation expense 7,704 162 — 7,866 Depreciation and amortization 43,902 6,304 — 50,206 Gain on sale of rental fleet units (3,949 ) (574 ) — (4,523 ) Loss on disposal of property, plant and equipment 525 23 — 548 Deferred income taxes (12,152 ) (739 ) — (12,891 ) Foreign currency exchange (48 ) (21 ) — (69 ) Changes in certain assets and liabilities, net of effect of businesses acquired: Receivables (10,533 ) 1,504 — (9,029 ) Inventories (605 ) (317 ) — (922 ) Other assets 2,233 (358 ) — 1,875 Accounts payable 2,482 735 — 3,217 Accrued liabilities (1,898 ) 2,238 — 340 Intercompany 26,039 (26,039 ) — — Net cash provided by (used in) operating activities 128,368 (3,165 ) (8,983 ) 116,220 Cash flows from investing activities: Proceeds from sale of assets held for sale 3,416 92 — 3,508 Additions to rental fleet, excluding acquisitions (59,506 ) (6,114 ) — (65,620 ) Proceeds from sale of rental fleet 8,885 2,562 — 11,447 Additions to property, plant and equipment, excluding acquisitions (8,923 ) (5,712 ) — (14,635 ) Proceeds from sale of property, plant and equipment 585 18 — 603 Net cash used in investing activities (55,543 ) (9,154 ) — (64,697 ) Cash flows from financing activities: Net (repayments) borrowings under lines of credit (34,814 ) 10,752 — (24,062 ) Principal payments on capital lease obligations (6,656 ) (27 ) — (6,683 ) Issuance of common stock 3,617 — — 3,617 Dividend payments (33,312 ) — — (33,312 ) Purchase of treasury stock (668 ) — — (668 ) Intercompany — (8,983 ) 8,983 — Net cash (used in) provided by financing activities (71,833 ) 1,742 8,983 (61,108 ) Effect of exchange rate changes on cash — 1,069 — 1,069 Net increase (decrease) in cash 992 (9,508 ) — (8,516 ) Cash and cash equivalents at beginning of period 803 12,648 — 13,451 Cash and cash equivalents at end of period $ 1,795 $ 3,140 $ — $ 4,935 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 |