Mobile Mini 10Q 2019 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

☐	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: 1-12804

(Exact name of registrant as specified in its charter)

Delaware		86-0748362
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

4646 E. Van Buren Street, Suite 400 Phoenix, Arizona		85008
(Address of principal executive offices)		(Zip Code)

(480) 894-6311

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, $.01 par value	MINI	Nasdaq Global Select Market
Preferred Share Purchase Rights

Securities registered pursuant to Section 12(g) of the Act: None

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 Regulation 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, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

At October 25, 2019, there were outstanding 44,122,188 shares of the registrant’s common stock, par value $.01.

MOBILE MINI, INC.

INDEX TO FORM 10-Q FILING

FOR THE QUARTER ENDED SEPTEMBER 30, 2019

		PAGE

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements		3

	Condensed Consolidated Balance Sheets September 30, 2019 (unaudited) and December 31, 2018	3

	Condensed Consolidated Statements of Operations (unaudited) for the Three and Nine Months Ended September 30, 2019 and September 30, 2018	4

	Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the Three and Nine Months Ended September 30, 2019 and September 30, 2018	4

	Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the Nine Months Ended September 30, 2019 and September 30, 2018	5

	Condensed Consolidated Statements of Cash Flows (unaudited) for the Nine Months Ended September 30, 2019 and September 30, 2018	7

	Notes to Condensed Consolidated Financial Statements (unaudited)	9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		37

Item 3. Quantitative and Qualitative Disclosures About Market Risk		52

Item 4. Controls and Procedures		53

PART II. OTHER INFORMATION

Item 1A. Risk Factors		54

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		54

Item 6. Exhibits		55

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MOBILE MINI, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value data)

	September 30, 2019			December 31, 2018
	(unaudited)			(audited)
ASSETS
Cash and cash equivalents	$	7,295		$	5,605
Receivables, net of allowance for doubtful accounts of $5,291 and $4,599 at September 30, 2019 and December 31, 2018, respectively		106,847			130,233
Inventories		9,835			11,725
Rental fleet, net		953,331			929,090
Property, plant and equipment, net		150,479			154,254
Operating lease assets		95,489			—
Other assets		12,809			13,398
Intangibles, net		51,333			55,542
Goodwill		705,769			705,217
Total assets	$	2,093,187		$	2,005,064

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable	$	30,167		$	33,177
Accrued liabilities		74,331			88,136
Operating lease liabilities		97,283			—
Lines of credit		584,000			593,495
Obligations under finance leases		67,648			63,359
Senior notes, net of deferred financing costs of $3,033 and $3,511 at September 30, 2019 and December 31, 2018, respectively		246,967			246,489
Deferred income taxes		186,116			170,139
Total liabilities		1,286,512			1,194,795
Commitments and contingencies
Stockholders' equity:
Preferred stock $.01 par value, 20,000 shares authorized, NaN issued		—			—
Common stock $.01 par value, 95,000 shares authorized, 50,343 issued and 44,115 outstanding at September 30, 2019 and 49,986 issued and 44,690 outstanding at December 31, 2018		503			500
Additional paid-in capital		634,994			619,850
Retained earnings		428,398			410,641
Accumulated other comprehensive loss		(79,814	)		(72,861	)
Treasury stock, at cost, 6,228 and 5,296 shares at September 30, 2019 and December 31, 2018, respectively		(177,406	)		(147,861	)
Total stockholders' equity		806,675			810,269
Total liabilities and stockholders' equity	$	2,093,187		$	2,005,064

See accompanying notes to condensed consolidated financial statements (unaudited).

MOBILE MINI, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Revenues:
Rental	$	145,519		$	140,924		$	429,597		$	406,149
Sales		7,887			8,716			23,245			25,700
Other		111			67			517			511
Total revenues		153,517			149,707			453,359			432,360
Costs and expenses:
Rental, selling and general expenses		91,399			90,764			279,368			269,033
Cost of sales		4,838			5,770			14,484			16,925
Restructuring expenses		—			—			—			1,306
Asset impairment charge and loss on divestiture, net		—			98,278			—			98,278
Depreciation and amortization		17,490			16,191			52,960			50,206
Total costs and expenses		113,727			211,003			346,812			435,748
Income (loss) from operations		39,790			(61,296	)		106,547			(3,388	)
Other income (expense):
Interest income		12			—			12			6
Interest expense		(10,393	)		(10,487	)		(31,745	)		(30,179	)
Deferred financing costs write-off		—			—			(123	)		—
Foreign currency exchange		(13	)		24			(179	)		69
Income (loss) before income tax provision (benefit)		29,396			(71,759	)		74,512			(33,492	)
Income tax provision (benefit)		6,821			(19,594	)		19,794			(11,182	)
Net income (loss)	$	22,575		$	(52,165	)	$	54,718		$	(22,310	)
Earnings (loss) per share:
Basic	$	0.51		$	(1.18	)	$	1.23		$	(0.50	)
Diluted		0.51			(1.18	)		1.23			(0.50	)
Weighted average number of common and common share equivalents outstanding:
Basic		44,072			44,323			44,337			44,275
Diluted		44,316			44,323			44,646			44,275
Cash dividends declared per share	$	0.28		$	0.25		$	0.83		$	0.75

MOBILE MINI, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Net income (loss)	$	22,575		$	(52,165	)	$	54,718		$	(22,310	)
Foreign currency translation adjustment		(6,822	)		(2,696	)		(6,953	)		(7,053	)
Comprehensive income (loss)	$	15,753		$	(54,861	)	$	47,765		$	(29,363	)

See accompanying notes to condensed consolidated financial statements (unaudited).

MOBILE MINI, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)

	Nine Months Ended September 30, 2019
												Accumulated
						Additional						Other								Total
	Common Stock					Paid-In			Retained			Comprehensive			Treasury Stock					Stockholders'
	Shares			Amount		Capital			Earnings			Income (Loss)			Shares		Amount			Equity
Balance at January 1, 2019		44,690		$	500	$	619,850		$	410,641		$	(72,861	)		5,296	$	(147,861	)	$	810,269
Net income		—			—		—			18,085			—			—		—			18,085
Common stock dividends declared		—			—		—			(12,339	)		—			—		—			(12,339	)
Other comprehensive income		—			—		—			—			5,105			—		—			5,105
Exercise of stock options		66			1		1,689			—			—			—		—			1,690
Purchase of treasury stock		(29	)		—		—			—			—			29		(1,057	)		(1,057	)
Restricted stock grants, net		248			2		(2	)		—			—			—		—			—
Share-based compensation		—			—		3,404			—			—			—		—			3,404
Balance at March 31, 2019		44,975			503		624,941			416,387			(67,756	)		5,325		(148,918	)		825,157
Net income		—			—		—			14,058			—			—		—			14,058
Common stock dividends declared		—			—		—			(12,372	)		—			—		—			(12,372	)
Other comprehensive loss		—			—		—			—			(5,236	)		—		—			(5,236	)
Exercise of stock options		5			—		114			—			—			—		—			114
Purchase of treasury stock		(321	)		—		—			—			—			321		(10,006	)		(10,006	)
Restricted stock grants, net		35			—		—			—			—			—		—			—
Share-based compensation		—			—		6,933			—			—			—		—			6,933
Balance at June 30, 2019		44,694			503		631,988			418,073			(72,992	)		5,646		(158,924	)		818,648
Net income		—			—		—			22,575			—			—		—			22,575
Common stock dividends declared		—			—		—			(12,250	)		—			—		—			(12,250	)
Other comprehensive loss		—			—		—			—			(6,822	)		—		—			(6,822	)
Exercise of stock options		16			—		510			—			—			—		—			510
Purchase of treasury stock		(582	)		—		—			—			—			582		(18,482	)		(18,482	)
Restricted stock grants, net		(13	)		—		(1	)		—			—			—		—			(1	)
Share-based compensation		—			—		2,497			—			—			—		—			2,497
Balance at September 30, 2019		44,115		$	503	$	634,994		$	428,398		$	(79,814	)		6,228	$	(177,406	)	$	806,675

See accompanying notes to condensed consolidated financial statements (unaudited).

MOBILE MINI, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - Continued

(In thousands)

(Unaudited)

	Nine Months Ended September 30, 2018
												Accumulated
						Additional						Other								Total
	Common Stock					Paid-In			Retained			Comprehensive			Treasury Stock					Stockholders'
	Shares			Amount		Capital			Earnings			Income (Loss)			Shares		Amount			Equity
Balance at January 1, 2018		44,380		$	497	$	605,369		$	463,322		$	(60,334	)		5,278	$	(147,166	)	$	861,688
Net income		—			—		—			14,855			—			—		—			14,855
Common stock dividends declared		—			—		—			(11,054	)		—			—		—			(11,054	)
Other comprehensive income		—			—		—			—			8,626			—		—			8,626
Exercise of stock options		55			1		1,524			—			—			—		—			1,525
Purchase of treasury stock		(14	)		—		—			—			—			14		(533	)		(533	)
Restricted stock grants, net		195			1		(2	)		—			—			—		—			(1	)
Share-based compensation		—			—		2,229			—			—			—		—			2,229
Balance at March 31, 2018		44,616			499		609,120			467,123			(51,708	)		5,292		(147,699	)		877,335
Net income		—			—		—			15,000			—			—		—			15,000
Common stock dividends declared		—			—		—			(11,249	)		—			—		—			(11,249	)
Other comprehensive loss		—			—		—			—			(12,983	)		—		—			(12,983	)
Exercise of stock options		28			—		969			—			—			—		—			969
Purchase of treasury stock		—			—		—			—			—			—		(7	)		(7	)
Restricted stock grants, net		15			1		—			—			—			—		—			1
Share-based compensation		—			—		3,407			—			—			—		—			3,407
Balance at June 30, 2018		44,659			500		613,496			470,874			(64,691	)		5,292		(147,706	)		872,473
Net loss		—			—		—			(52,165	)		—			—		—			(52,165	)
Common stock dividends declared		—			—		—			(11,150	)		—			—		—			(11,150	)
Other comprehensive loss		—			—		—			—			(2,696	)		—		—			(2,696	)
Exercise of stock options		35			—		1,124			—			—			—		—			1,124
Purchase of treasury stock		(3	)		—		—			—			—			3		(128	)		(128	)
Restricted stock grants, net		1			—		—			—			—			—		—			—
Share-based compensation		—			—		2,230			—			—			—		—			2,230
Balance at September 30, 2018		44,692		$	500	$	616,850		$	407,559		$	(67,387	)		5,295	$	(147,834	)	$	809,688

See accompanying notes to condensed consolidated financial statements (unaudited).

MOBILE MINI, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2019			2018
Cash flows from operating activities:
Net income (loss)	$	54,718		$	(22,310	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Deferred financing costs write-off		123			—
Asset impairment charge and loss on divestiture, net		—			98,278
Provision for doubtful accounts		4,235			1,980
Amortization of deferred financing costs		1,383			1,545
Amortization of long-term liabilities		13			109
Share-based compensation expense		12,834			7,866
Depreciation and amortization		52,960			50,206
Gain on sale of rental fleet		(4,610	)		(4,523	)
Loss on disposal of property, plant and equipment		46			548
Deferred income taxes		15,855			(12,891	)
Foreign currency exchange		179			(69	)
Changes in certain assets and liabilities:
Receivables		18,735			(9,029	)
Inventories		1,822			(922	)
Other assets		1,349			1,875
Accounts payable		2,669			3,217
Accrued liabilities		(10,412	)		340
Net cash provided by operating activities		151,899			116,220
Cash flows from investing activities:
Cash paid for business acquired, net of cash acquired		(4,878	)		—
Proceeds from sale of assets held for sale		—			3,508
Additions to rental fleet, excluding acquisitions		(61,247	)		(65,620	)
Proceeds from sale of rental fleet		10,782			11,447
Additions to property, plant and equipment, excluding acquisitions		(9,917	)		(14,635	)
Proceeds from sale of property, plant and equipment		448			603
Net cash used in investing activities		(64,812	)		(64,697	)
Cash flows from financing activities:
Net repayments under lines of credit		(9,494	)		(24,062	)
Deferred financing costs		(3,491	)		—
Principal payments on finance lease obligations		(8,167	)		(6,683	)
Issuance of common stock		2,314			3,617
Dividend payments		(36,864	)		(33,312	)
Purchase of treasury stock		(29,545	)		(668	)
Net cash used in financing activities		(85,247	)		(61,108	)
Effect of exchange rate changes on cash		(150	)		1,069
Net increase (decrease) in cash		1,690			(8,516	)
Cash and cash equivalents at beginning of period		5,605			13,451
Cash and cash equivalents at end of period	$	7,295		$	4,935

See accompanying notes to condensed consolidated financial statements (unaudited).

MOBILE MINI, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2019		2018
Supplemental disclosure of cash flow information:
Cash paid for interest	$	34,156	$	31,753
Cash paid for income and franchise taxes		5,119		2,346
Equipment and other acquired through finance lease obligations		12,455		15,746
Capital expenditures accrued or payable		5,110		9,774

See accompanying notes to condensed consolidated financial statements (unaudited).

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(1) Mobile Mini, Inc. - Organization and Description of Business

Mobile Mini, Inc., a Delaware corporation, is a leading provider of portable storage solutions and tank and pump solutions. In these notes, the terms “Mobile Mini” the “Company,” “we,” “us,” and “our” refer to Mobile Mini, Inc.

At September 30, 2019, we had a fleet of storage solutions units operating throughout the United States (the “U.S.”), Canada and the United Kingdom (the “U.K.”), serving a diversified customer base, including construction companies, large and small retailers, medical centers, schools, utilities, distributors, the military, hotels, restaurants, entertainment complexes and households. These customers rent our products for a wide variety of applications, including the storage of construction materials and equipment, retail and manufacturing inventory, documents and records and other goods. We also have a fleet of tank and pump solutions products, concentrated in the U.S. Gulf Coast, including liquid and solid containment units, serving a specialty sector in the industry. Our tank and pump products are rented primarily to chemical, refinery, oil and natural gas drilling, mining and environmental service customers.

Basis of Presentation and Consolidation

The consolidated financial statements include the accounts of Mobile Mini and our wholly owned subsidiaries. We do not have any subsidiaries in which we do not own 100% of the outstanding stock. All significant intercompany balances and transactions have been eliminated. The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) applicable to interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management of Mobile Mini, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows for all periods presented have been made. The results of operations for the nine months ended September 30, 2019 and 2018, respectively, are not necessarily indicative of the results to be expected for the full year.

These condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 filed with the Securities and Exchange Commission (“SEC”) on February 5, 2019.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the accompanying condensed consolidated financial statements and the notes to those statements. Actual results could differ from those estimates. Significant estimates affect the calculation of depreciation and amortization, the calculation of the allowance for doubtful accounts, the analysis of goodwill and long-lived assets for potential impairment and certain accrued liabilities.

(2) Impact of Recently Issued Accounting Standards

Intangibles – Goodwill and Other – Internal-Use Software. In August 2018, the Financial Accounting Standards Board (the “FASB”) issued a standard that provides guidance on accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software, and hosting arrangements that include an internal-use software license.

This guidance also requires entities to present the expense related to the capitalized implementation costs in the same line item in the statement of income as the fees associated with the hosting element (service) of the arrangement and classify payments for capitalized implementation costs in the statement of cash flows in the same manner as payments made for fees associated with the hosting element. The entity is also required to present the capitalized implementation costs in the statement of financial position in the same line item that a prepayment for the fees of the associated hosting arrangement would be presented. This standard is effective for annual and interim periods beginning after December 15, 2019. We will adopt this standard on January 1, 2020 and do not expect the adoption of this standard to have a material effect on our consolidated financial statements.

Intangibles – Goodwill and Other. In January 2017, the FASB issued a standard requiring an entity to no longer perform a hypothetical purchase price allocation to measure goodwill impairment. Instead, impairment will be measured using the difference between the carrying amount and the fair value of the reporting unit. This standard is effective for annual and interim periods beginning after December 15, 2019. Entities may early adopt the guidance. We will adopt this standard on January 1, 2020 and do not expect the adoption of this standard to have a material effect on our consolidated financial statements.

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

Leases. In February 2016, the FASB issued a standard on lease accounting requiring a lessee to recognize assets and liabilities on the balance sheet for leases with lease terms greater than 12 months. This standard is effective for annual and interim periods beginning after December 15, 2018. We adopted this standard effective January 1, 2019, utilizing a modified retrospective transition approach. We chose to use the effective date as our date of initial application. Consequently, financial information was not updated, and the disclosures required under the new standard were not provided for dates and periods before January 1, 2019.

The standard includes optional transition practical expedients intended to simplify its adoption. We elected to adopt the package of practical expedients, which allowed us to retain the historical lease classification determined under legacy GAAP as well as a relief from reviewing expired or existing contracts to determine if they contain leases.

Upon adoption, we recognized operating lease liabilities totaling approximately $91 million, with corresponding right of use assets. The liabilities were calculated as the present value of the remaining minimum rental payments for existing operating leases. When we enter contractual arrangements as lessor, we expect the period of each rental to be less than one year. As such, the accounting for contracts in which we are the lessor is not affected. This standard did not materially impact our consolidated net earnings and had no impact on cash flows. See Note 13 for additional information.

(3) Fair Value Measurements

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement determined by assumptions that market participants would use in pricing an asset or liability. We categorize each of our fair value measurements in one of the following three levels based on the lowest level of input that is significant to the fair value measurement:

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.

At September 30, 2019 and December 31, 2018, we did not have any financial instruments required to be recorded at fair value on a recurring basis.

The carrying amounts of cash, cash equivalents, receivables, accounts payable and accrued liabilities approximate fair values based on their short-term nature. The fair values of our revolving credit facility and finance leases are estimated using discounted cash flow analyses, based on our current incremental borrowing rates for similar types of borrowing arrangements. Based on the borrowing rates currently available to us for bank loans with similar terms and average maturities, the fair value of our revolving credit facility debt and finance leases, which are measured using Level 2 inputs, at September 30, 2019 and December 31, 2018, approximated their respective book values.

The fair value of our $250.0 million aggregate principal amount of 5.875% senior notes due July 1, 2024 (the “Senior Notes” or “2024 Notes”) is based on their latest sales price at the end of each period obtained from a third-party institution and is Level 2 in the fair value hierarchy as there is not an active market for the Senior Notes. The Senior Notes are presented on the balance sheet net of deferred financing costs. The gross carrying value and the fair value of our Senior Notes are as follows:

	September 30, 2019		December 31, 2018
	(In thousands)
Carrying value	$	250,000	$	250,000
Fair value		258,750		247,028

(4) Revenues

Revenue Recognition

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 and recognized as revenue when, or as, the performance obligation is satisfied.

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

Rental revenue includes revenues associated with rental contracts with customers and may have multiple performance obligations including the direct rental of fleet to our customers, fleet delivery and pickup. Also included in rental revenues are ancillary fees including late charges and charges for damages. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using the contractually stated price as our best estimate of the standalone selling price of each distinct promise in the contract. Our prices are determined using methods and assumptions developed consistently across similar customers and markets.

We enter into contracts with our customers to rent equipment based on a monthly rate for our Storage Solutions fleet and a daily, weekly or monthly rate for our Tank & Pump Solutions fleet. Revenues from renting are recognized ratably over the rental period, in accordance with lease accounting guidance. The rental continues until cancelled by the customer or the Company. If equipment is returned prior to the end of 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. Customers may utilize our equipment delivery and pick-up services in conjunction with the rental of equipment, but it is not required. Revenue pursuant to the delivery or pick up of a rented unit is recognized upon completion of the service in accordance with revenue recognition guidance and is included in the rental revenues financial statement caption.

Sales revenue is primarily generated by the sale of new and used units, and to a lesser extent, parts and supplies sold to Tank & Pump Solutions customers. Sales contracts generally have a single performance obligation that is satisfied at the time of delivery. Sales revenue is measured based on the consideration specified in the contract and recognized when the customer takes possession of the unit or other sale items.

Our Storage Solutions rental customers are generally billed in advance. Additionally, we may bill our customers in advance for fleet pickup. Tank & Pump Solutions rental customers are typically billed in arrears, a minimum of once per month. Sales transactions are generally billed in advance or upon transfer of the sold items. Payments from customers are generally due upon receipt of the invoice. Certain customers have extended terms for payment, but no terms are greater than one year following the invoice date.

Taxes assessed by a governmental authority that are both imposed and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.

Contract Costs and Liabilities

When customers are billed in advance, we defer recognition of revenue and reflect unearned rental revenue at the end of the period. As of September 30, 2019 and December 31, 2018, we had approximately $40.7 million and $41.0 million, respectively, of unearned rental revenue included in accrued liabilities in the Condensed Consolidated Balance Sheets for September 30, 2019 and December 31, 2018. We expect to perform the remaining performance obligations and recognize the unearned rental revenue within the next twelve months.

Disaggregated Rental Revenue

In the following table, rental revenue is disaggregated by the nature of the underlying service provided and for the periods indicated. The table also includes a reconciliation of the disaggregated rental revenue to our reportable segments.

	For the Three Months Ended September 30, 2019
	Storage Solutions
	North America		United Kingdom		Total		Tank & Pump Solutions		Consolidated
	(In thousands)
Direct rental revenue	$	72,146	$	12,952	$	85,098	$	19,520	$	104,618
Delivery, pickup and similar revenue		22,985		4,654		27,639		8,357		35,996
Ancillary rental revenue		2,903		1,180		4,083		822		4,905
Total rental revenues	$	98,034	$	18,786	$	116,820	$	28,699	$	145,519

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

	For the Three Months Ended September 30, 2018
	Storage Solutions
	North America		United Kingdom		Total		Tank & Pump Solutions		Consolidated
	(In thousands)
Direct rental revenue	$	68,073	$	14,068	$	82,141	$	19,461	$	101,602
Delivery, pickup and similar revenue		21,671		5,118		26,789		8,329		35,118
Ancillary rental revenue		2,497		1,212		3,709		495		4,204
Total rental revenues	$	92,241	$	20,398	$	112,639	$	28,285	$	140,924

	For the Nine Months Ended September 30, 2019
	Storage Solutions
	North America		United Kingdom		Total		Tank & Pump Solutions		Consolidated
	(In thousands)
Direct rental revenue	$	208,647	$	39,525	$	248,172	$	60,902	$	309,074
Delivery, pickup and similar revenue		65,135		13,702		78,837		26,431		105,268
Ancillary rental revenue		9,224		3,697		12,921		2,334		15,255
Total rental revenues	$	283,006	$	56,924	$	339,930	$	89,667	$	429,597

	For the Nine Months Ended September 30, 2018
	Storage Solutions
	North America		United Kingdom		Total		Tank & Pump Solutions		Consolidated
	(In thousands)
Direct rental revenue	$	196,029	$	42,684	$	238,713	$	57,301	$	296,014
Delivery, pickup and similar revenue		59,893		14,822		74,715		21,970		96,685
Ancillary rental revenue		8,305		3,560		11,865		1,585		13,450
Total rental revenues	$	264,227	$	61,066	$	325,293	$	80,856	$	406,149

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

(5) Earnings (Loss) Per Share

Basic earnings per share (“EPS”) is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Restricted stock awards are subject to the risk of forfeiture and are not included in the calculation of basic weighted average number of common shares outstanding until vested. Diluted EPS is calculated under the treasury stock method. Potential common shares include restricted common stock and incremental shares of common stock issuable upon the exercise of stock options.

The following table is a reconciliation of net income and weighted-average shares of common stock outstanding for purposes of calculating basic and diluted EPS:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2019		2018			2019		2018
	(In thousands, except per share data)
Numerator:
Net income (loss)	$	22,575	$	(52,165	)	$	54,718	$	(22,310	)
Denominator:
Weighted average shares outstanding - basic		44,072		44,323			44,337		44,275
Dilutive effect of share-based awards		244		—			309		—
Weighted average shares outstanding - diluted		44,316		44,323			44,646		44,275
Earnings (loss) per share:
Basic	$	0.51	$	(1.18	)	$	1.23	$	(0.50	)
Diluted		0.51		(1.18	)		1.23		(0.50	)

There were approximately 0.8 million and 0.7 million of common stock equivalents that would have been included in the diluted EPS denominator for the three- and nine-month periods ended September 20, 2018, respectively, had there not been a net loss. These common stock equivalents were excluded because their inclusion would reduce the net loss per share. In addition, the following table represents the effect of stock options and restricted share awards that were issued or outstanding but excluded in calculating diluted EPS because their effect would have been anti-dilutive for the period indicated, or the underlying performance criteria had not yet been met:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(In thousands)
Stock options		1,529		691		1,525		724
Restricted share awards		1		42		1		27
Total		1,530		733		1,526		751

(6) Acquisition

During the nine months ended September 30, 2019, we completed 1 acquisition of a portable storage business which further strengthened our business in Tulsa, Oklahoma. The accompanying condensed consolidated financial statements include the operations of the acquired business from the date of acquisition. The aggregate purchase price for the assets acquired were recorded based on their estimated fair values at the date of the acquisition. We have not disclosed the pro-forma impact of the acquisition on operations as it was immaterial to our financial position or results of operations in aggregate.

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

The components of the purchase price and net assets acquired during the nine months ended September 30, 2019 are as follows (in thousands):

Net Assets Acquired
Rental fleet	$	2,599
Intangible assets:
Customer relationships		628
Non-compete agreements		25
Goodwill		2,328
Other assets		37
Liabilities		(739	)
Total purchase price	$	4,878

(7) Asset Impairment Charge and Loss on Divestiture, Net of Proceeds

Consistent with our strategy to focus on high returning assets, during the second quarter of 2018 we initiated an organization-wide project to assess the economic and operational status of our fleet and other assets as well as an in-depth analysis of our fleet management process to identify inefficiencies. The task encompassed an intensive review of underperforming assets throughout North America and the U.K. using our recently implemented enterprise resource planning system and sophisticated work order system that allows specific identification of the status of each unit and facilitates deeper analysis of repair and maintenance costs. The result of this review was the identification of specific assets over which a further determination as to the economics of continued retention and repair could be made.

In July 2018, management presented a proposed plan of sale for certain identified assets to the Board of Directors, and on July 24, 2018 the Board of Directors made the strategic decision to approve the plan and authorized management to begin actively marketing the assets for sale. As a result, we placed these assets as held for sale and recognized a $98.3 million loss on divestiture in the third quarter of 2018. In the fourth quarter of 2018, additional assets were identified and placed as held for sale, resulting in a full-year loss of $102.1 million, which consisted primarily of a non-cash loss of $111.4 million. The majority of the assets were sold as scrap metal. In addition to rental fleet, we also identified and placed for sale, property, plant and equipment and inventory that were not being used efficiently. The assets represent a subset of larger asset groups held by the Company. The sale was completed as of December 31, 2018.

The loss for the twelve months ended December 31, 2018 related to this activity is set forth below:

	Net Book Value			Units
	(In thousands)
North America Storage Solutions Fleet:
Steel storage containers	$	57,579			20,072
Steel ground level offices		30,806			3,543
Other		363			286
United Kingdom Storage Solutions Fleet		8,152			1,525
Tank & Pump Solutions Fleet		1,654			622
Other		12,875		n/a
Total		111,429			26,048
Proceeds, net of disposal costs		(9,289	)
Net loss on impairment and divestiture	$	102,140

Of the $102.1 million loss for the twelve months ended December 31, 2018, $98.3 million was recognized in the quarter ended September 30, 2018.

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

(8) Inventories

Inventories at September 30, 2019 and December 31, 2018 consisted of the following:

	September 30, 2019		December 31, 2018
	(In thousands)
Raw materials and supplies	$	7,427	$	8,078
Finished units		2,408		3,647
Inventories	$	9,835	$	11,725

(9) Rental Fleet

Rental fleet is capitalized at cost and depreciated over the estimated useful life of the unit using the straight-line method. Rental fleet is depreciated whether or not it is out on rent. Capitalized cost of rental fleet includes the price paid to acquire the unit and freight charges to the location when the unit is first placed in service, and when applicable, the cost of manufacturing or remanufacturing, which includes the cost of customizing units. Ordinary repair and maintenance costs are charged to operations as incurred.

We periodically review depreciable lives and residual values against various factors, including the results of our lenders’ independent appraisal of our rental fleet, practices of our competitors in comparable industries and profit margins achieved on sales of depreciated units. Appraisals on our rental fleet are required by our lenders on a regular basis. The appraisal typically reports no difference in the value of the unit due to the age or length of time it has been in our fleet. Based in part upon our lender’s third-party appraiser who evaluated our fleet as of September 30, 2018, management estimates that the net orderly liquidation appraisal value as of September 30, 2019 was approximately $1.1 billion. Our net book value for this fleet as of September 30, 2019 was $1.0 billion.

Depreciation expense related to our rental fleet for both the nine months ended September 30, 2019 and 2018 was $23.9 million. At September 30, 2019, all rental fleet units were pledged as collateral under our Second Amended and Restated ABL Credit Agreement dated as of March 22, 2019 (the “New Credit Agreement”) with Deutsche Bank AG New York Branch (“Deutsche Bank”), as administrative agent, and the other lenders party thereto.

Rental fleet consisted of the following at September 30, 2019 and December 31, 2018:

	Residual Value as Percentage of Original Cost (1)		Estimated Useful Life in Years	September 30, 2019			December 31, 2018
				(In thousands)
Storage Solutions:
Steel storage containers		55%	30	$	618,325		$	601,127
Steel ground level offices	55		30		355,897			341,385
Other					6,219			7,249
Total					980,441			949,761
Accumulated depreciation					(161,020	)		(151,666	)
Total Storage Solutions fleet, net				$	819,421		$	798,095
Tank & Pump Solutions:
Steel tanks			25	$	81,338		$	72,770
Roll-off boxes			15 - 20		35,692			34,205
Stainless steel tank trailers			25		29,127			28,764
Vacuum boxes			20		16,794			17,005
Dewatering boxes			20		9,469			8,429
Pumps and filtration equipment			7		13,997			13,984
Other					9,611			8,475
Total					196,028			183,632
Accumulated depreciation					(62,118	)		(52,637	)
Total Tank & Pump Solutions fleet, net				$	133,910		$	130,995
Total rental fleet, net				$	953,331		$	929,090

(1)	Tank & Pump Solutions fleet has been assigned 0 residual value.

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

(10) Property, Plant and Equipment

Property, plant and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation is recorded using the straight-line method over the assets’ estimated useful lives. Our depreciation expense related to property, plant and equipment for the nine months ended September 30, 2019 and 2018 was $24.2 million and $21.4 million, respectively. Normal repairs and maintenance to property, plant and equipment are expensed as incurred. When property or equipment is retired or sold, the net book value of the asset, reduced by any proceeds, is charged to gain or loss on the disposal of property, plant and equipment and is included in rental, selling and general expenses in the Condensed Consolidated Statements of Operations.

Property, plant and equipment at September 30, 2019 and December 31, 2018 consisted of the following:

	Residual Value as Percentage of Original Cost	Estimated Useful Life in Years	September 30, 2019			December 31, 2018
			(In thousands)
Land			$	1,623		$	1,638
Vehicles and machinery	0 - 55%	5 - 30		163,686			156,195
Buildings and improvements (1)	0 - 25	3 - 30		31,847			27,614
Computer equipment and software	0	3 - 10		75,258			70,903
Furniture and office equipment	0	3 - 10		5,246			6,680
Property, plant and equipment				277,660			263,030
Accumulated depreciation				(127,181	)		(108,776	)
Property, plant and equipment, net			$	150,479		$	154,254

(1)	Improvements made to leased properties are depreciated over the lesser of the estimated remaining life or the remaining term of the respective lease.

(11) Goodwill and Intangibles

For acquired businesses, we record assets acquired and liabilities assumed at their estimated fair values on the respective acquisition dates. Based on these values, the excess purchase prices over the fair value of the net assets acquired is recorded as goodwill. Of the $705.8 million total goodwill at September 30, 2019, $470.9 million related to the North America Storage Solutions segment, $53.7 million related to the U.K. Storage Solutions segment and $181.2 million related to the Tank & Pump Solutions segment.

The following table shows the activity and balances related to goodwill from January 1, 2019 to September 30, 2019 (in thousands):

Balance at January 1, 2019	$	705,217
Acquisition		2,328
Foreign currency		(1,776	)
Balance at September 30, 2019	$	705,769

Intangible assets are amortized over the estimated useful life of the asset utilizing a method which reflects the estimated pattern in which the economic benefits will be consumed. Customer relationships are amortized based on the estimated attrition rates of the underlying customer base. Other intangibles are amortized using the straight-line method.

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

The following table reflects balances related to intangible assets for the periods presented:

		September 30, 2019							December 31, 2018
	Estimated Useful Life in Years	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
		(In thousands)
Customer relationships	15 - 20	$	92,869	$	(42,874	)	$	49,995	$	92,751	$	(39,472	)	$	53,279
Trade names/trademarks	5 - 7		5,200		(3,985	)		1,215		5,913		(4,014	)		1,899
Non-compete agreements	5		1,758		(1,660	)		98		1,886		(1,549	)		337
Other	20		59		(34	)		25		59		(32	)		27
Total		$	99,886	$	(48,553	)	$	51,333	$	100,609	$	(45,067	)	$	55,542

Amortization expense for amortizable intangibles was approximately $4.9 million and $4.8 million for the nine-month periods ended September 30, 2019 and 2018, respectively. Based on the carrying value at September 30, 2019, future amortization of intangible assets is expected to be as follows for the years ended December 31 (in thousands):

2019 (remaining)	$	1,638
2020		5,395
2021		5,126
2022		4,795
2023		4,207
Thereafter		30,172
Total	$	51,333

(12) Debt

Lines of Credit

On March 22, 2019, Mobile Mini and certain of its subsidiaries entered into the New Credit Agreement with Deutsche Bank as administrative agent, and the other lenders party thereto. The New Credit Agreement amended, restated and replaced Mobile Mini’s prior Amended and Restated ABL Credit Agreement dated as of December 14, 2015 (the “Prior Credit Agreement”) with Deutsche Bank, as administrative agent, and the other lenders party thereto.

The New Credit Agreement provides for a five year, $1 billion first lien senior secured revolving credit facility, which is for borrowing in U.S. Dollars (the “U.S. Subfacility”), in British Pounds and Euros (the “U.K. Subfacility”), and in Canadian Dollars (the “Canadian Subfacility”). The U.S. Subfacility is subject to, among other things, the terms of a borrowing base calculated as a discount to the value of certain pledged U.S. collateral; the U.K. Subfacility is subject to a similar borrowing base that includes certain pledged U.K. collateral; and the Canadian Subfacility is subject to a similar borrowing base that includes certain pledged Canadian collateral. Under the terms of the New Credit Agreement, certain real property will require an appraisal before the value can be considered in the borrowing base of the respective subfacilities. All three borrowing bases are subject to certain reserves and caps customary for financings of this type. The New Credit Agreement has an accordion feature that permits, under certain conditions, an increase of up to $500 million of additional commitments. If at any time the aggregate amounts outstanding under the subfacilities exceed the respective borrowing base then in effect, a prepayment of an amount sufficient to eliminate such excess is required to be made. Mobile Mini has the right to prepay loans under the New Credit Agreement in whole or in part at any time. All amounts borrowed under the New Credit Agreement must be repaid on or before March 22, 2024. The New Credit Agreement also provides for the issuance of irrevocable standby letters of credit by U.S. lenders in amounts totaling up to $50 million, by U.K.-based lenders in amounts totaling up to $20 million and by Canadian-based lenders in amounts totaling up to $20 million.

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

Loans made under the U.S. Subfacility bear interest at a rate equal to, at Mobile Mini’s option, either (a) the London interbank offered rate (“LIBOR”) plus an applicable margin (“LIBOR Loans”) or (b) the prime rate plus an applicable margin (“Base Rate Loans”). With some exceptions, Mobile Mini may freely convert LIBOR Loans to Base Rate Loans and vice versa. Loans made under the U.K. Subfacility denominated in British Pounds bear interest at a rate equal to LIBOR plus an applicable margin and loans denominated in Euros bear interest at a rate equal to the Euro interbank offered rate (“EURIBOR”) plus an applicable margin. Loans made under the Canadian Subfacility bear interest at a rate equal to, at Mobile Mini’s option, either (i) the Canadian prime rate plus an applicable margin (“Canadian Prime Rate Loans”) or (ii) the Canadian Dollar bankers’ acceptance rate (“B/A Rate”) plus an applicable margin (“Canadian LIBOR Loans”). With some exceptions, Mobile Mini may freely convert Canadian Prime Rate Loans to Canadian LIBOR Loans and vice versa. The applicable margin for each type of loan is based on an availability-based pricing grid and ranges from 1.25% to 1.75% for LIBOR Loans and 0.25% to 0.75% for Base Rate Loans at each measurement date. As of September 30, 2019, the applicable margins are 1.50% for LIBOR Loans and 0.50% for Base Rate Loans. The applicable margins will be readjusted quarterly based upon Mobile Mini’s daily average total borrowing availability. Mobile Mini is also required to pay an unused line fee in respect of the unutilized commitments under the New Credit Agreement at a fee rate of 0.225% per annum, as well as customary letter of credit fees.

Ongoing extensions of credit under the New Credit Agreement are subject to customary conditions, including sufficient availability under the respective borrowing base. The New Credit Agreement also contains covenants that require Mobile Mini to, among other things, periodically furnish financial and other information to the various lenders. The New Credit Agreement contains customary negative covenants applicable to Mobile Mini and its subsidiaries, including negative covenants that restrict the ability of such entities to, among other things, (i) allow certain liens to attach to Mobile Mini or subsidiary assets, (ii) repurchase or pay dividends or make certain other restricted payments on capital stock and certain other securities, or prepay certain indebtedness, (iii) incur additional indebtedness or engage in certain other types of financing transactions, and (iv) make acquisitions or other investments. In addition, Mobile Mini must comply with a minimum fixed charge coverage ratio of 1.00 to 1.00 as of the last day of each quarter, upon specified excess availability under the New Credit Agreement falling below the greater of (y) $90 million and (z) 10% of the lesser of the then total revolving loan commitment and aggregate borrowing base. As of September 30, 2019, we were in compliance with the minimum borrowing availability threshold set forth in the New Credit Agreement and therefore, are not subject to any financial maintenance covenants.

The U.S. Subfacility is guaranteed by Mobile Mini and certain of its domestic subsidiaries. The U.K. Subfacility and the Canadian Subfacility are guaranteed by Mobile Mini and certain of its domestic and foreign subsidiaries. The U.S. Subfacility is secured by a first priority lien on substantially all assets of Mobile Mini and the guarantors of such subfacility; the U.K. Subfacility is secured by a first priority lien on substantially all of the assets of the borrowers and the guarantors of such subfacility; and the Canadian Subfacility is secured by a first priority lien on substantially all of the borrowers and the guarantors of such subfacility.

The New Credit Agreement also includes other covenants, representations, warranties, indemnities, and events of default that are customary for facilities of this type, including events of default relating to a change of control of Mobile Mini.

Senior Notes

We have outstanding $250.0 million aggregate principal amount of 2024 Notes issued at their face value on May 9, 2016. The 2024 Notes bear interest at a rate of 5.875% per year and mature on July 1, 2024. Interest on the 2024 Notes is payable semiannually in arrears on January 1 and July 1. The 2024 Notes are senior unsecured obligations of the Company and are unconditionally guaranteed on a senior unsecured basis by certain of our existing and future domestic subsidiaries.

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

Obligations Under Finance Leases

At September 30, 2019 and December 31, 2018, obligations under finance leases for certain real property and transportation related equipment were $67.6 million and $63.4 million, respectively. See additional information in Note 13.

Future Debt Obligations

The scheduled maturity for debt obligations for balances outstanding at September 30, 2019 are as follows:

	Lines of Credit		Senior Notes		Finance Lease Obligations		Total
	(In thousands)
2019 (remaining)	$	—	$	—	$	2,986	$	2,986
2020		—		—		12,818		12,818
2021		—		—		12,725		12,725
2022		—		—		11,676		11,676
2023		—		—		10,242		10,242
Thereafter		584,000		250,000		17,201		851,201
Total	$	584,000	$	250,000	$	67,648	$	901,648

(13) Leases

Real Estate

We lease our corporate and administrative offices in Phoenix, Arizona and our U.K. headquarters in Stockton-on-Tees. We also lease field locations throughout the U.S. and the U.K., as well as two in Canada. Many real estate leases include one or more options to renew. The exercise of lease renewal options is generally at our discretion and we assess the initial lease term based on the term that we are reasonably certain to occupy the leased property. None of our real estate leases contain residual value guarantees or purchase options. The majority of our real estate leases are operating leases.

Equipment Leases

Mobile Mini also engages in leases related to ancillary equipment to support our field operations; such as, forklifts, trucks, service vehicles and automobiles. These leases often include an option to purchase the equipment at the end of the lease and are generally finance leases. In addition, we have leases for certain office equipment.

Lease Assets and Liabilities

For leases with an initial term greater than twelve months, we recognize a lease asset and liability at commencement date. Lease assets are initially measured at cost, which includes the initial amount of the lease liability, plus any initial direct costs incurred, less lease incentives received. In our Condensed Consolidated Balance Sheet, finance lease assets are included in property, plant and equipment.

For operating leases, the liability is initially and subsequently measured as the present value of the unpaid lease payments. For finance lease liabilities, the lease liability is also initially measured as the present value of the unpaid lease payments and is subsequently measured at amortized cost using the effective interest method. We are required to use estimates and judgments in the determination of our lease liabilities. Key estimates and judgments include the following:

Lease Discount Rate – We are required to discount our unpaid fixed lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, our incremental borrowing rate. Our finance leases generally have an interest rate implicit in the lease. For operating leases and certain finance leases, we generally cannot determine the interest rate implicit in the lease, in which case we use our incremental borrowing rate as the discount rate for the lease. We estimate our incremental borrowing rate for these leases based on current rates available to us on finance leases, which are collateralized, have a level payments structure and a specified lease term.

Lease Term – Our lease terms include the non-cancellable period of the lease plus any additional periods covered by an extension of the lease that we are reasonably certain to exercise.

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

Fixed Payments – Lease payments included in our measurement of the lease liability include the following: fixed payments owed over the lease term, termination penalties if we expect to exercise a termination option, the price to purchase the underlying asset if we are reasonably certain to exercise the purchase option and residual value guarantees if applicable.

Maturity of Lease Liabilities

The scheduled maturity for lease liabilities for balances outstanding at September 30, 2019 were as follows:

	Operating Leases			Finance Leases
	(In thousands)
2019 (remaining)	$	6,092		$	3,430
2020		20,251			14,419
2021		17,324			13,983
2022		15,274			12,610
2023		12,955			10,880
Thereafter		40,794			17,920
Total liabilities		112,690			73,242
Less: interest		(15,407	)		(5,594	)
Present value of lease liabilities	$	97,283		$	67,648

The scheduled maturity for lease payments at December 31, 2018 were as follows:

	Operating Leases		Finance Leases
	(In thousands)
2019	$	18,827	$	12,055
2020		15,510		12,869
2021		13,324		12,434
2022		12,205		11,060
2023		10,402		9,331
Thereafter		33,440		11,029
Total	$	103,708		68,778
Less: interest				(5,419	)
Present value of minimum lease payments			$	63,359

Assets recorded under capital lease obligations totaled approximately $90.3 million as of December 31, 2018 and the related accumulated amortization totaled approximately $35.7 million.

Lease Expense and Activity

Payments due under lease contracts include fixed payments plus, for many of our leases, variable payments. Fixed payments under our leases are recognized on a straight-line basis over the term of the lease, including any periods of free rent. Variable expenses associated with leases are recognized when they are incurred. For our real estate leases, variable payments include such items as allocable property taxes, local sales and business taxes, and common area maintenance charges. Variable payments associated with equipment leases include such items as maintenance services provided by the lessor and local sales and business taxes. We have elected as an accounting policy to not separate lease components and non-lease components.

In our Condensed Consolidated Statements of Operations, expenses for our operating leases are recognized within rental, selling and general expenses and amortization of assets held under finance leases is included in depreciation and amortization expense.

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

Our lease activity during the three and nine months ended September 30, 2019 was as follows:

	Three Months Ended September 30, 2019			Nine Months Ended September 30, 2019
Expense:
Finance lease expense:
Amortization of finance lease assets	$	3,531		$	10,254
Interest on obligations under finance leases		424			1,246
Total finance lease expense	$	3,955		$	11,500
Operating lease expense:
Short-term lease expense	$	259		$	886
Fixed lease expense		5,574			16,487
Variable lease expense		766			2,316
Sublease income		(25	)		(77	)
Total operating lease expense	$	6,574		$	19,612

Cash paid and new or modified lease information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	452		$	1,271
Operating cash flows from operating leases, fixed payments		5,409			16,215
Financing cash flows from finance leases		3,026			8,167
Net assets obtained in exchange for new or modified finance lease liabilities		6,136			12,455
Net operating lease assets obtained in exchange for new or modified operating lease liabilities		3,368			20,640

Lease Term and Discount Rates

Weighted-average remaining lease terms and discount rates as of September 30, 2019 were as follows:

Lease terms and discount rates:
Weighted-average remaining lease term - finance leases (in years)	4.3
Weighted-average remaining lease term - operating leases (in years)	7.2
Weighted average discount rate - finance leases	2.7	%
Weighted average discount rate - operating leases	3.4	%

(14) Income Taxes

We are subject to taxation in the U.S. federal jurisdiction, as well as various U.S. state and foreign jurisdictions. We have identified our U.S. federal tax return as our “major” tax jurisdiction. As of September 30, 2019, we are no longer subject to examination by U.S. federal tax authorities for years prior to 2015, to examination for any U.S. state taxing authority prior to 2013, or to examination for any foreign jurisdictions prior to 2014. All subsequent periods remain open to examination.

Prior to 2019, we asserted that the unremitted earnings of our U.K. subsidiaries were permanently reinvested. In 2019, we withdrew our permanent reinvestment assertion for one of these subsidiary’s 2019 earnings but maintain our assertion in relation to this subsidiary’s historical earnings prior to 2019. Therefore, 0 deferred tax liability has been recorded on the related historical earnings. The 2019 earnings are not subject to withholding taxes in the U.K. and, due to U.S. tax reform enacted in 2017, are not subject to U.S. federal income taxes when distributed. We may be subject to state income taxes in very limited circumstances and have accordingly accounted for this immaterial impact in the current period.

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

Our effective income tax rate decreased to 26.6% for the nine months ended September 30, 2019, compared to 33.4% for the prior-year period. Our current year rate was affected by non-deductible stock compensation of $3.6 million recorded in the current period, largely offset by a $0.7 million benefit related to a federal tax return true up. See additional information regarding the non-deductible stock compensation in Note 15.

Uncertain tax positions are recognized and measured using a two-step approach. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation process, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement.

As of September 30, 2019, the Company had $0.5 million of unrecognized tax benefits all of which would affect the effective tax rate if recognized. A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows:

	2019
	(In thousands)
Beginning balance	$	—
Additions based on tax positions related to prior years		493
Ending balance	$	493

All of the unrecognized tax benefits outstanding at September 30, 2019 is expected to reverse within the next twelve months.

Our policy for recording interest and penalties associated with audits is to record such items as a component of income before taxes. Penalties and associated interest costs, if any, are recorded in rental, selling and general expenses in our Condensed Consolidated Statements of Operations.

(15) Share-Based Compensation

We have historically awarded stock options and restricted stock awards for employees and non-employee directors as a means of attracting and retaining quality personnel and to align employee performance with stockholder value. Share-based compensation plans are approved by our stockholders and administered by the stock compensation committee of the Company’s Board of Directors (the “Board”). The current plan allows for a variety of equity programs designed to provide flexibility in implementing equity and cash awards, including incentive stock options, nonqualified stock options, restricted stock awards, restricted stock units, stock appreciation rights, performance stock, performance units and other stock-based awards. Participants may be granted any one of the equity awards or any combination. We do not award stock options with an exercise price below the market price of the underlying securities on the date of grant. As of September 30, 2019, 1.2 million shares are available for future grants, assuming performance-based awards vest at their target amount. Generally, stock options have contractual terms of ten years.

Service-based awards. We grant share-based compensation awards that vest over time subject to the employee rendering service over the vesting period. The majority of the service–based awards vest in equal annual installments over a period of three to four years. The expense for service-based awards is expensed ratably over the full service period of the grant.

Performance-based awards. All performance-based awards granted from 2016 through 2019 vest contingently over a three-year period assuming a target number of options or restricted share awards. However, the terms of these awards provide that the number of options or restricted share awards that ultimately vest may vary between 50% and 200% of the target amount or may be 0. The targets were set at the time of grant. For awards granted from 2016 through 2019, performance conditions are related to the Company’s return on capital employed.

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

Expense related to performance-based awards that have multiple vesting dates, is recognized using the accelerated attribution approach, whereby each vesting tranche is treated as a separate award for purposes of determining the implicit service period. The accelerated attribution approach generally results in a higher expense during the earlier years of vesting. Expense related to performance-based awards is recognized based upon anticipated attainment.

The following table summarizes the Company’s share-based compensation for the three and nine months ended September 30:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(In thousands)
Share-based compensation expense included in:
Rental, selling and general expenses	$	2,497	$	2,230	$	12,834	$	7,503
Restructuring expenses		—		—		—		363
Total share-based compensation	$	2,497	$	2,230	$	12,834	$	7,866

During the nine months ended September 30, 2019, Mobile Mini amended the terms of certain share-based compensation agreements with our Chief Executive Officer who retired as an employee of the Company and assumed the position of Chairman of the Board for Mobile Mini as of October 1, 2019. The amended agreements provide that his service period under such agreements will extend to include his status as a Director. In connection with these modifications, we recorded additional share-based compensation during the period of $3.6 million.

As of September 30, 2019, total unrecognized compensation cost related to stock option awards, assuming achievement at target, was approximately $0.1 million and the related weighted-average period over which it is expected to be recognized is approximately 0.4 years. As of September 30, 2019, the unrecognized compensation cost related to restricted stock awards assuming achievement at target was approximately $9.2 million, which is expected to be recognized over a weighted-average period of approximately 1.5 years.

Stock Options. The fair value of each stock option award is estimated on the date of the grant using the Black-Scholes-Merton option pricing model which requires the input of assumptions. We estimate the risk-free interest rate based on the U.S. Treasury security rate in effect at the time of the grant. The expected life of the options, volatility and dividend rates are estimated based on our historical data. NaN new stock options were issued in 2019 or 2018.

The following table summarizes stock option activity for the nine months ended September 30, 2019:

	Number of Options
	Performance- Based Options			Service-Based Options			Total Options			Weighted Average Exercise Price
	(In thousands)
Options outstanding, beginning of period		533			2,421			2,954		$	32.71
Additional options awarded based upon achievement of specified performance criteria		227			—			227			29.54
Canceled/Expired		(19	)		(30	)		(49	)		39.95
Exercised		(45	)		(43	)		(88	)		26.36
Options outstanding, end of period		696			2,348			3,044			32.54
Unvested target options that vest based upon 2019 performance conditions		107

Due to actual performance exceeding targets, shares granted in 2016 and 2017 that contingently vested based upon 2018 performance criteria vested above target at 200% resulting in additional awards.

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

A summary of stock options outstanding as of September 30, 2019 is as follows:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms		Aggregate Intrinsic Value
	(In thousands)				(In years)		(In thousands)
Outstanding		3,044	$	32.54		4.39	$	15,621
Exercisable		2,936		32.54		4.27		15,146

The aggregate intrinsic value of options exercised during the nine months ended September 30, 2019 was approximately $0.7 million.

Restricted Stock Awards. The fair value of restricted stock awards is estimated as the closing price of our common stock on the date of grant. A summary of restricted stock award activity for the nine months ended September 30, 2019 is as follows:

	Number of Shares
	Performance- Based Awards			Service-Based Awards			Total Awards			Weighted Average Grant Date Fair Value
	(In thousands)
Restricted stock awards at beginning of period		94			233			327		$	35.06
Awarded		113			150			263			36.41
Additional shares awarded based upon achievement of specified performance criteria		31			—			31			36.41
Released		(62	)		(113	)		(175	)		35.24
Forfeited		(9	)		(15	)		(24	)		35.97
Restricted stock awards at end of period		167			255			422			35.99
Unvested target stock awards that vest based upon 2019 performance conditions		65
Unvested target stock awards that vest based upon 2020 performance conditions		65
Unvested target stock awards that vest based upon 2021 performance conditions		37

Due to actual performance exceeding targets, shares granted in 2018 that contingently vested based upon 2018 performance criteria vested above target at 200% resulting in additional share awards.

The restricted stock awards that vested during the nine months ended September 30, 2019 had an aggregate grant date fair value of $6.2 million and an aggregate vesting date fair value of $6.3 million.

(16) Restructuring

We have undergone restructuring actions to align our business operations. There were 0 restructuring expenses in 2019. Of the $1.3 million of restructuring expenses recognized in the nine months ended September 30, 2018, $0.9 million related to the restructuring of our corporate service center, including the severance of an executive. The remainder primarily related to projects initiated in years prior to 2018 that were not accruable during such periods.

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

The following table details accrued restructuring obligations (included in accrued liabilities in the Condensed Consolidated Balance Sheets) and related activity for the fiscal year ended December 31, 2018 and the nine-month period ended September 30, 2019:

	Severance and Benefits			Lease Abandonment Costs			Other Costs			Total
	(In thousands)
Accrued obligations as of January 1, 2018	$	539		$	182		$	36		$	757
Restructuring expense		1,338			482			186			2,006
Settlement of obligations		(1,473	)		(578	)		(209	)		(2,260	)
Accrued obligations as of December 31, 2018		404			86			13			503
Settlement of obligations		(271	)		(86	)		(13	)		(370	)
Accrued obligations as of September 30, 2019	$	133		$	—		$	—		$	133

The following amounts were included in restructuring expenses for the nine months ended September 30, 2018 (in thousands):

Severance and benefits	$	948
Lease abandonment costs		125
Other costs		233
Restructuring expenses	$	1,306

(17) Commitments and Contingencies

We are a party to various claims and litigation in the normal course of business. Our current estimated range of liability related to various claims and pending litigation is based on claims for which our management can determine that it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. Because of the uncertainties related to both the probability of incurred and possible range of loss on pending claims and litigation, management must use considerable judgment in making reasonable determination of the liability that could result from an unfavorable outcome. As additional information becomes available, we will assess the potential liability related to our pending litigation and revise our estimates. Such revisions in our estimates of the potential liability could materially impact our results of operation. We do not anticipate the resolution of such matters known at this time will have a material adverse effect on our business or consolidated financial position.

(18) Stockholders’ Equity

Dividends

The Board authorized and declared cash dividends to all of our common stockholders as follows:

Declaration Date	Payment Date	Record Date (close of business)	Dividend Amount Per Share of Common Stock
January 30, 2019	March 13, 2019	February 27, 2019	$	0.275
April 18, 2019	May 29, 2019	May 15, 2019	$	0.275
July 24, 2019	August 28, 2019	August 14, 2019	$	0.275

Treasury Stock

On November 6, 2013, the Board approved a share repurchase program authorizing up to $125.0 million of our outstanding shares of common stock to be repurchased. On April 17, 2015, the Board authorized up to an additional $50.0 million of our outstanding shares of common stock to be repurchased, for a total of $175.0 million under the share repurchase program. The shares may be repurchased from time to time in the open market or in privately negotiated transactions. The share repurchases are subject to prevailing market conditions and other considerations. The share repurchase program does not have an expiration date and may be suspended or terminated at any time by the Board. All shares repurchased are held in treasury.

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

During the nine months ended September 30, 2019, we purchased approximately 902,000 shares of our common stock under the authorized share repurchase program at an average price of $31.53 and a cumulative total of approximately $28.4 million. Approximately $42.4 million is available for repurchase as of September 30, 2019. We withheld approximately 31,000 shares of stock from employees, for an approximate value of $1.1 million, upon vesting of share awards to satisfy tax withholding obligations during the nine months ended September 30, 2019.

(19) Segment Reporting

Our operations are comprised of 3 reportable segments: North American Storage Solutions, U.K. Storage Solutions and Tank & Pump Solutions. Discrete financial data on each of our products is not available and it would be impractical to collect and maintain financial data in such a manner. The results for each segment are reviewed discretely by our chief operating decision maker.

We operate in the U.S., the U.K. and Canada. All of our locations operate in their local currency. Although we are exposed to foreign exchange rate fluctuation in foreign markets where we rent and sell our products, we do not believe such exposure will have a significant impact on our results of operations. Revenues recognized by our U.S. locations were $132.0 million and $125.8 million for the three months ended September 30, 2019 and 2018, respectively, and were $388.4 million and $362.0 million for the nine months ended September 30, 2019 and 2018, respectively.

The following tables set forth certain information regarding each of the Company’s segments for the three-month periods indicated:

	For the Three Months Ended September 30, 2019
	Storage Solutions
	North America		United Kingdom			Total		Tank & Pump Solutions		Consolidated
	(In thousands)
Revenues:
Rental	$	98,034	$	18,786		$	116,820	$	28,699	$	145,519
Sales		4,725		1,714			6,439		1,448		7,887
Other		76		(1	)		75		36		111
Total revenues		102,835		20,499			123,334		30,183		153,517
Costs and expenses:
Rental, selling and general expenses		59,962		12,391			72,353		19,046		91,399
Cost of sales		2,672		1,376			4,048		790		4,838
Depreciation and amortization		8,863		1,713			10,576		6,914		17,490
Total costs and expenses		71,497		15,480			86,977		26,750		113,727
Income from operations	$	31,338	$	5,019		$	36,357	$	3,433	$	39,790
Interest expense, net of interest income	$	7,588	$	114		$	7,702	$	2,679	$	10,381
Income tax provision		5,739		938			6,677		144		6,821
Capital expenditures for additions to rental fleet, excluding acquisitions		11,107		1,546			12,653		2,197		14,850

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

	For the Three Months Ended September 30, 2018
	Storage Solutions
	North America			United Kingdom			Total			Tank & Pump Solutions			Consolidated
	(In thousands)
Revenues:
Rental	$	92,241		$	20,398		$	112,639		$	28,285		$	140,924
Sales		5,103			2,593			7,696			1,020			8,716
Other		—			40			40			27			67
Total revenues		97,344			23,031			120,375			29,332			149,707
Costs and expenses:
Rental, selling and general expenses		57,662			13,459			71,121			19,643			90,764
Cost of sales		3,178			2,048			5,226			544			5,770
Asset impairment charge and loss on divestiture, net		87,658			8,434			96,092			2,186			98,278
Depreciation and amortization		7,892			1,866			9,758			6,433			16,191
Total costs and expenses		156,390			25,807			182,197			28,806			211,003
(Loss) income from operations	$	(59,046	)	$	(2,776	)	$	(61,822	)	$	526		$	(61,296	)
Interest expense, net of interest income	$	7,589		$	200		$	7,789		$	2,698		$	10,487
Income tax benefit		(16,699	)		(454	)		(17,153	)		(2,441	)		(19,594	)
Capital expenditures for additions to rental fleet, excluding acquisitions		18,290			1,243			19,533			7,611			27,144

The following tables set forth certain information regarding each of the Company’s segments for the nine-month periods indicated:

	For the Nine Months Ended September 30, 2019
	Storage Solutions
	North America		United Kingdom		Total		Tank & Pump Solutions		Consolidated
	(In thousands)
Revenues:
Rental	$	283,006	$	56,924	$	339,930	$	89,667	$	429,597
Sales		13,532		5,455		18,987		4,258		23,245
Other		363		—		363		154		517
Total revenues		296,901		62,379		359,280		94,079		453,359
Costs and expenses:
Rental, selling and general expenses		180,855		39,181		220,036		59,332		279,368
Cost of sales		7,863		4,271		12,134		2,350		14,484
Depreciation and amortization		26,974		5,263		32,237		20,723		52,960
Total costs and expenses		215,692		48,715		264,407		82,405		346,812
Income from operations	$	81,209	$	13,664	$	94,873	$	11,674	$	106,547
Interest expense, net of interest income	$	23,300	$	376	$	23,676	$	8,057	$	31,733
Income tax provision		16,262		2,530		18,792		1,002		19,794
Capital expenditures for additions to rental fleet, excluding acquisitions		39,114		3,657		42,771		18,476		61,247

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

	For the Nine Months Ended September 30, 2018
	Storage Solutions
	North America			United Kingdom		Total			Tank & Pump Solutions			Consolidated
	(In thousands)
Revenues:
Rental	$	264,227		$	61,066	$	325,293		$	80,856		$	406,149
Sales		15,211			6,574		21,785			3,915			25,700
Other		238			161		399			112			511
Total revenues		279,676			67,801		347,477			84,883			432,360
Costs and expenses:
Rental, selling and general expenses		171,182			41,066		212,248			56,785			269,033
Cost of sales		9,401			5,294		14,695			2,230			16,925
Restructuring expenses		1,306			—		1,306			—			1,306
Asset impairment charge and loss on divestiture, net		87,658			8,434		96,092			2,186			98,278
Depreciation and amortization		25,349			6,049		31,398			18,808			50,206
Total costs and expenses		294,896			60,843		355,739			80,009			435,748
(Loss) income from operations	$	(15,220	)	$	6,958	$	(8,262	)	$	4,874		$	(3,388	)
Interest expense, net of interest income	$	21,443		$	631	$	22,074		$	8,099		$	30,173
Income tax (benefit) provision		(8,876	)		1,269		(7,607	)		(3,575	)		(11,182	)
Capital expenditures for additions to rental fleet, excluding acquisitions		39,400			5,805		45,205			20,415			65,620

Assets related to the Company’s reportable segments include the following:

	Storage Solutions
	North America		United Kingdom		Total		Tank & Pump Solutions		Consolidated
	(In thousands)
As of September 30, 2019:
Goodwill	$	470,861	$	53,692	$	524,553	$	181,216	$	705,769
Intangibles, net		1,234		261		1,495		49,838		51,333
Rental fleet, net		683,992		135,429		819,421		133,910		953,331
As of December 31, 2018:
Goodwill	$	468,400	$	55,601	$	524,001	$	181,216	$	705,217
Intangibles, net		859		341		1,200		54,342		55,542
Rental fleet, net		657,459		140,636		798,095		130,995		929,090

Included in the table above are assets in the U.S. of $1.5 billion as of both September 30, 2019 and December 31, 2018.

(20) Subsequent Events

Declaration of Quarterly Dividend

On October 29, 2019, the Company’s Board authorized and declared a quarterly dividend to all of our common stockholders of $0.275 per share of common stock, payable on November 27, 2019, to all stockholders of record as of the close of business on November 13, 2019.

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

(21) 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, 2019

(In thousands)

	Guarantors			Non- Guarantors			Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	4,897		$	2,398		$	—		$	7,295
Receivables, net		92,338			14,509			—			106,847
Inventories		7,925			1,910			—			9,835
Rental fleet, net		810,423			142,908			—			953,331
Property, plant and equipment, net		127,187			23,292			—			150,479
Operating lease assets		73,179			22,310			—			95,489
Other assets		11,030			1,779			—			12,809
Intangibles, net		51,063			270			—			51,333
Goodwill		647,456			58,313			—			705,769
Intercompany receivables		145,942			31,982			(177,924	)		—
Total assets	$	1,971,440		$	299,671		$	(177,924	)	$	2,093,187

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable	$	23,182		$	6,985		$	—		$	30,167
Accrued liabilities		66,051			8,280			—			74,331
Operating lease liabilities		75,691			21,592			—			97,283
Lines of credit		584,000			—			—			584,000
Obligations under finance leases		67,567			81			—			67,648
Senior notes, net		246,967			—			—			246,967
Deferred income taxes		167,779			18,337			—			186,116
Intercompany payables		29,703			222			(29,925	)		—
Total liabilities		1,260,940			55,497			(29,925	)		1,286,512
Commitments and contingencies
Stockholders' equity:
Common stock		503			—			—			503
Additional paid-in capital		634,994			147,999			(147,999	)		634,994
Retained earnings		252,409			175,989			—			428,398
Accumulated other comprehensive loss		—			(79,814	)		—			(79,814	)
Treasury stock, at cost		(177,406	)		—			—			(177,406	)
Total stockholders' equity		710,500			244,174			(147,999	)		806,675
Total liabilities and stockholders' equity	$	1,971,440		$	299,671		$	(177,924	)	$	2,093,187

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

MOBILE MINI, INC.

CONDENSED CONSOLIDATING BALANCE SHEETS

As of December 31, 2018

(In thousands)

	Guarantors			Non- Guarantors			Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	1,483		$	4,122		$	—		$	5,605
Receivables, net		114,702			15,531			—			130,233
Inventories		9,811			1,914			—			11,725
Rental fleet, net		781,588			147,502			—			929,090
Property, plant and equipment, net		130,351			23,903			—			154,254
Other assets		11,341			2,057			—			13,398
Intangibles, net		55,189			353			—			55,542
Goodwill		645,126			60,091			—			705,217
Intercompany receivables		148,811			34,449			(183,260	)		—
Total assets	$	1,898,402		$	289,922		$	(183,260	)	$	2,005,064

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable	$	27,271		$	5,906		$	—		$	33,177
Accrued liabilities		79,537			8,599			—			88,136
Lines of credit		589,310			4,185			—			593,495
Obligations under finance leases		63,253			106			—			63,359
Senior notes, net		246,489			—			—			246,489
Deferred income taxes		151,758			18,381			—			170,139
Intercompany payables		29,586			5,675			(35,261	)		—
Total liabilities		1,187,204			42,852			(35,261	)		1,194,795
Commitments and contingencies
Stockholders' equity:
Common stock		500			—			—			500
Additional paid-in capital		619,850			147,999			(147,999	)		619,850
Retained earnings		238,709			171,932			—			410,641
Accumulated other comprehensive loss		—			(72,861	)		—			(72,861	)
Treasury stock, at cost		(147,861	)		—			—			(147,861	)
Total stockholders' equity		711,198			247,070			(147,999	)		810,269
Total liabilities and stockholders' equity	$	1,898,402		$	289,922		$	(183,260	)	$	2,005,064

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

MOBILE MINI, INC.

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

Three months ended September 30, 2019

(In thousands)

	Guarantors			Non- Guarantors			Eliminations			Consolidated
Revenues:
Rental	$	125,807		$	19,712		$	—		$	145,519
Sales		6,108			1,779			—			7,887
Other		111			—			—			111
Total revenues		132,026			21,491			—			153,517
Costs and expenses:
Rental, selling and general expenses		78,313			13,086			—			91,399
Cost of sales		3,422			1,416			—			4,838
Depreciation and amortization		15,700			1,790			—			17,490
Total costs and expenses		97,435			16,292			—			113,727
Income from operations		34,591			5,199			—			39,790
Other income (expense):
Interest income		12			—			—			12
Interest expense		(10,278	)		(115	)		—			(10,393	)
Dividend income		4,963			—			(4,963	)		—
Foreign currency exchange		(42	)		29			—			(13	)
Income before income tax provision		29,246			5,113			(4,963	)		29,396
Income tax provision		5,837			984			—			6,821
Net income	$	23,409		$	4,129		$	(4,963	)	$	22,575

MOBILE MINI, INC

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three months ended September 30, 2019

(In thousands)

	Guarantors		Non- Guarantors			Eliminations			Consolidated
Net income	$	23,409	$	4,129		$	(4,963	)	$	22,575
Foreign currency translation adjustment		—		(6,822	)		—			(6,822	)
Comprehensive income (loss)	$	23,409	$	(2,693	)	$	(4,963	)	$	15,753

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

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
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 benefit		(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

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.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

MOBILE MINI, INC.

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

Nine months ended September 30, 2019

(In thousands)

	Guarantors			Non- Guarantors			Eliminations			Consolidated
Revenues:
Rental	$	370,257		$	59,340		$	—		$	429,597
Sales		17,623			5,622			—			23,245
Other		516			1			—			517
Total revenues		388,396			64,963			—			453,359
Costs and expenses:
Rental, selling and general expenses		238,213			41,155			—			279,368
Cost of sales		10,109			4,375			—			14,484
Depreciation and amortization		47,456			5,504			—			52,960
Total costs and expenses		295,778			51,034			—			346,812
Income from operations		92,618			13,929			—			106,547
Other income (expense):
Interest income		12			—			—			12
Dividend income		4,963			—			(4,963	)		—
Interest expense		(31,369	)		(376	)		—			(31,745	)
Deferred financing costs write-off		(123	)		—			—			(123	)
Foreign currency exchange		(192	)		13			—			(179	)
Income before income tax provision		65,909			13,566			(4,963	)		74,512
Income tax provision		17,194			2,600			—			19,794
Net income	$	48,715		$	10,966		$	(4,963	)	$	54,718

MOBILE MINI, INC.

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

Nine months ended September 30, 2019

(In thousands)

	Guarantors		Non- Guarantors			Eliminations			Consolidated
Net income	$	48,715	$	10,966		$	(4,963	)	$	54,718
Foreign currency translation adjustment		—		(6,953	)		—			(6,953	)
Comprehensive income	$	48,715	$	4,013		$	(4,963	)	$	47,765

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

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.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

MOBILE MINI, INC.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

Nine months ended September 30, 2019

(In thousands)

	Guarantors			Non- Guarantors			Eliminations			Consolidated
Cash flows from operating activities:
Net income	$	48,715		$	10,966		$	(4,963	)	$	54,718
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred financing costs write-off		123			—			—			123
Provision for doubtful accounts		3,881			354			—			4,235
Amortization of deferred financing costs		1,383			—			—			1,383
Amortization of long-term liabilities		13			—			—			13
Share-based compensation expense		12,616			218			—			12,834
Depreciation and amortization		47,456			5,504			—			52,960
Gain on sale of rental fleet units		(4,026	)		(584	)		—			(4,610	)
Loss on disposal of property, plant and equipment		18			28			—			46
Deferred income taxes		15,340			515			—			15,855
Foreign currency exchange		192			(13	)		—			179
Changes in certain assets and liabilities, net of effect of businesses acquired:
Receivables		18,519			216			—			18,735
Inventories		1,886			(64	)		—			1,822
Other assets		2,075			(726	)		—			1,349
Accounts payable		771			1,898			—			2,669
Accrued liabilities		(10,421	)		9			—			(10,412	)
Intercompany		5,748			(5,748	)		—			—
Net cash provided by operating activities		144,289			12,573			(4,963	)		151,899
Cash flows from investing activities:
Cash paid for business acquired, net of cash acquired		(4,878	)		—			—			(4,878	)
Additions to rental fleet, excluding acquisitions		(57,430	)		(3,817	)		—			(61,247	)
Proceeds from sale of rental fleet		8,654			2,128			—			10,782
Additions to property, plant and equipment, excluding acquisitions		(6,586	)		(3,331	)		—			(9,917	)
Proceeds from sale of property, plant and equipment		401			47			—			448
Net cash used in investing activities		(59,839	)		(4,973	)		—			(64,812	)
Cash flows from financing activities:
Net repayments under lines of credit		(5,309	)		(4,185	)		—			(9,494	)
Deferred financing costs		(3,491	)		—			—			(3,491	)
Principal payments on finance lease obligations		(8,141	)		(26	)		—			(8,167	)
Issuance of common stock		2,314			—			—			2,314
Dividend payments		(36,864	)		—			—			(36,864	)
Purchase of treasury stock		(29,545	)		—			—			(29,545	)
Intercompany		—			(4,963	)		4,963			—
Net cash used in financing activities		(81,036	)		(9,174	)		4,963			(85,247	)
Effect of exchange rate changes on cash		—			(150	)		—			(150	)
Net increase (decrease) in cash		3,414			(1,724	)		—			1,690
Cash and cash equivalents at beginning of period		1,483			4,122			—			5,605
Cash and cash equivalents at end of period	$	4,897		$	2,398		$	—		$	7,295

MOBILE MINI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued

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 (used in) 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 finance 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

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read together with our consolidated financial statements and the accompanying notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the SEC. This discussion contains forward-looking statements. Forward-looking statements are based on current expectations and assumptions that involve risks and uncertainties. Our actual results may differ materially from those anticipated in our forward-looking statements. The tables and information in this “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” section were derived from exact numbers and may have immaterial rounding differences.

Overview

Executive Summary

We believe we are the world’s leading provider of portable storage solutions, maintaining a strong leadership position in virtually all markets served. Our mission is to be the leader in portable storage solutions to customers throughout North America and the U.K. and tank and pump solutions in the U.S. We are committed to providing our customers with superior service and access to a high-quality and diverse fleet. In managing our business, we focus on renting rather than selling our units, with rental revenues representing approximately 95% of our total revenues for the nine months ended September 30, 2019. We believe this strategy is highly attractive and provides predictable, recurring revenue. Additionally, our assets have long useful lives and relatively low maintenance costs. We also sell new and used units and provide delivery, and other ancillary products and value-added services.

We operate our portable storage business in North America as “Mobile Mini Storage Solutions” and our tank and pump business as “Mobile Mini Tank + Pump Solutions”. As of September 30, 2019, our network of locations included 118 Storage Solutions locations, 20 Tank & Pump Solutions locations and 17 combined locations. Our Storage Solutions fleet consisted of approximately 199,100 units and our Tank & Pump Solutions fleet consisted of approximately 12,700 units. During the quarter we completed the acquisition of a portable storage business which further strengthened our business in Tulsa, Oklahoma.

ABL Refinancing. In March 2019, we created more capital flexibility and positioned Mobile Mini for future growth by entering into the Second Amended and Restated ABL Credit Agreement dated as of March 22, 2019 (the “New Credit Agreement”) with Deutsche Bank AG New York Branch (“Deutsche Bank”), as administrative agent, and the other lenders party thereto, which replaced our prior Amended and Restated ABL Credit Agreement dated as of December 14, 2015 (the “Prior Credit Agreement”). The New Credit Agreement extends the maturity of our ABL financing to March 2024 and reduces fees associated with unused credit.

Business Environment and Outlook. Approximately 66% of our consolidated rental revenue during the twelve-month period ended September 30, 2019 was derived from our North American Storage Solutions business, 13% was derived from our U.K. Storage Solutions business and 21% was derived from the Tank & Pump Solutions business. Our business is subject to the general health of the economy and we utilize a variety of general economic indicators to assess market trends and determine the direction of our business.

Based on our assessment, we expect that the majority of our North American end markets will continue to drive demand for our products, although some macro-economic indicators are pointing to slower growth. In particular, the construction industry, which represents approximately 35% of our consolidated rental revenue, is forecasted to continue to show growth. Economic indicators related to the industrial and commercial end-segment are mixed. Industrial and commercial customers, which comprise approximately 26% of our rental revenue, generally operate in industries such as: large processing plants for organic and inorganic chemicals, refineries, distributors and trucking and utility companies. Our national retail accounts typically involve seasonal demand in the third and fourth quarter during the holiday season. Retail and consumer service customers comprise approximately 23% of our revenue and include department, drug, grocery and strip mall stores as well as hotels, restaurants, service stations and dry cleaners. Upstream oil and gas customers comprise approximately 2% of our revenue and include companies performing such activities as exploratory well drilling, operation of producing wells and bringing crude oil and/or raw natural gas to the surface using alternative methods.

Accounting and Operating Overview

Our principal operating revenues and expenses are:

Revenues:

•

Rental revenues include all rent and ancillary revenues we receive for our rental fleet.

•

Sales revenues consist primarily of sales of new and used fleet and, to a lesser extent, parts and supplies sold to customers.

Costs and expenses:

•

Rental, selling and general expenses include, among other expenses, payroll and payroll-related costs (including share-based compensation and commissions for our sales team), fleet transportation and fuel costs, repair and maintenance costs for our rental fleet and transportation equipment, real estate lease expense, insurance costs, and general corporate expenses.

•

Cost of sales is the net book value of the units that were sold during the reported period and includes both our cost to buy, transport, remanufacture and modify used containers and our cost to manufacture Storage Solutions units and other structures.

•

Depreciation and amortization includes depreciation on our rental fleet, our property, plant and equipment, and amortization of definite-lived intangible assets.

Our principal asset is our rental fleet, which is capitalized at cost and depreciated over the estimated useful life of the unit using the straight-line method. Rental fleet is depreciated whether or not it is out on rent. Capitalized cost of rental fleet includes the price paid to acquire the unit and freight charges to the location when the unit is first placed in service and, when applicable, the cost of manufacturing or remanufacturing, which includes the cost of customizing units. Ordinary repair and maintenance costs are charged to operations as incurred.

The table below outlines the composition of our Storage Solutions rental fleet at September 30, 2019:

	Rental Fleet			Number of Units		Percentage of Gross Fleet in Dollars			Percentage of Units
	(In thousands)
Steel storage containers	$	618,325			169,754		63	%		85	%
Steel ground level offices		355,897			28,616		36			14
Other		6,219			703		1			1
Storage Solutions rental fleet		980,441			199,073		100	%		100	%
Accumulated depreciation		(161,020	)
Storage Solutions rental fleet, net	$	819,421

The table below outlines the composition of our Tank & Pump Solutions rental fleet at September 30, 2019:

	Rental Fleet			Number of Units		Percentage of Gross Fleet in Dollars			Percentage of Units
	(In thousands)
Steel tanks	$	81,338			3,254		41	%		26	%
Roll-off boxes		35,692			5,721		18			45
Stainless steel tank trailers		29,127			631		15			5
Vacuum boxes		16,794			1,529		9			12
Dewatering boxes		9,469			880		5			7
Pumps and filtration equipment		13,997			721		7			5
Other		9,611		n/a			5
Tank & Pump Solutions rental fleet		196,028			12,736		100	%		100	%
Accumulated depreciation		(62,118	)
Tank & Pump Solutions rental fleet, net	$	133,910

We are a capital-intensive business. Therefore, in addition to focusing on measurements calculated in accordance with GAAP, we focus on EBITDA, adjusted EBITDA and free cash flow to measure our operating results. EBITDA, adjusted EBITDA and the resultant margins, and free cash flow are non-GAAP financial measures. As such, we include in this Quarterly Report on Form 10-Q reconciliations to their most directly comparable GAAP financial measures. We also evaluate our operations on a constant currency basis. These reconciliations and a description of the limitations of these measures are included below.

Non-GAAP Data and Reconciliations

EBITDA and Adjusted EBITDA. EBITDA is defined as net income before discontinued operations, net of tax (if applicable), interest expense, income taxes, depreciation and amortization, and debt restructuring or extinguishment expense (if applicable), including any write-off of deferred financing costs. Adjusted EBITDA further excludes certain non-cash expenses, as well as transactions that management believes are not indicative of our ongoing business. Because EBITDA and adjusted EBITDA, as defined, exclude some but not all items that affect our cash flow from operating activities, they may not be comparable to similarly titled performance measures presented by other companies.

We present EBITDA and adjusted EBITDA because we believe they provide an overall evaluation of our financial condition and useful information regarding our ability to meet our future debt payment requirements, capital expenditures and working capital requirements. EBITDA and adjusted EBITDA have certain limitations as analytical tools and should not be used as substitutes for net income, cash flows, or other consolidated income or cash flow data prepared in accordance with GAAP. EBITDA and adjusted EBITDA margins are calculated as EBITDA and adjusted EBITDA divided by total revenues expressed as a percentage.

Reconciliation of net income, the most directly comparable GAAP measure, to EBITDA and adjusted EBITDA is as follows:

	Three Months Ended September 30,							Nine Months Ended September 30,
	2019			2018				2019			2018
	(In thousands, except percentages)
Net income (loss)	$	22,575		$	(52,165	)		$	54,718		$	(22,310	)
Interest expense		10,393			10,487				31,745			30,179
Income tax provision (benefit)		6,821			(19,594	)			19,794			(11,182	)
Depreciation and amortization		17,490			16,191				52,960			50,206
Deferred financing costs write-off		—			—				123			—
EBITDA		57,279			(45,081	)			159,340			46,893
Share-based compensation expense (1)		2,497			2,230				9,241			7,503
Restructuring expenses (2)		—			—				—			1,306
Asset impairment charge and loss on divestiture, net (3)		—			98,278				—			98,278
Chief Executive Officer transition (4)		—			—				3,593			—
Acquisition-related expenses (5)		1,898			—				2,637			—
Adjusted EBITDA	$	61,674		$	55,427			$	174,811		$	153,980
EBITDA margin		37.3	%		(30.1	)	%		35.1	%		10.8		%
Adjusted EBITDA margin		40.2			37.0				38.6			35.6

Reconciliation of net cash provided by operating activities to EBITDA is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
	(In thousands)
Net cash provided by operating activities	$	51,347		$	46,268		$	151,899		$	116,220
Interest paid		13,961			13,576			34,156			31,753
Income and franchise taxes paid		1,357			939			5,119			2,346
Share-based compensation expense (1)(4)		(2,497	)		(2,230	)		(12,834	)		(7,866	)
Asset impairment charge and loss on divestiture, net		—			(98,278	)		—			(98,278	)
Gain on sale of rental fleet		1,569			1,263			4,610			4,523
Loss on disposal of property, plant and equipment		56			(71	)		(46	)		(548	)
Change in certain assets and liabilities, net of effect of businesses acquired:
Receivables		569			6,034			(22,970	)		7,049
Inventories		(478	)		127			(1,822	)		922
Other assets		(2,155	)		(1,479	)		(1,349	)		(1,875	)
Accounts payable and accrued liabilities		(6,450	)		(11,230	)		2,577			(7,353	)
EBITDA	$	57,279		$	(45,081	)	$	159,340		$	46,893

(1)	Share-based compensation represents non-cash compensation expense associated with the granting of equity instruments. See additional information in Note 15 “Share-Based Compensation” to the accompanying condensed consolidated financial statements.

(2)

The Company has undergone restructuring actions to align its business operations. These activities materially change the scope of the business or the manner in which the business is conducted. For more information, see Note 16 “Restructuring” to the accompanying condensed consolidated financial statements.

(3)	Loss resulting from the impairment of assets placed as held for sale including subsequent adjustments to the loss upon the sale. See Note 7 “Asset Impairment Charge and Loss on Divestiture, Net of Proceeds”.

(4)

Non-cash expense related to the amendment of certain share-based compensation agreements with our Chief Executive Officer who retired as an employee of the Company and assumed the position of Chairman of the Board for Mobile Mini as of October 1, 2019. For more information see Note 15 “Share-Based Compensation” to the accompanying condensed consolidated financial statements.

(5)	Incremental costs associated with actual and potential acquisitions.

Free Cash Flow. Free cash flow is defined as net cash provided by operating activities, minus or plus, net cash used in or provided by investing activities, excluding acquisitions and certain transactions. Free cash flow is a non-GAAP financial measure and is not intended to replace net cash provided by operating activities, the most directly comparable financial measure prepared in accordance with GAAP. We present free cash flow because we believe it provides useful information regarding our liquidity and ability to meet our short-term obligations. In particular, free cash flow indicates the amount of cash available after capital expenditures for, among other things, investments in our existing business, debt service obligations, payment of authorized quarterly dividends, repurchase of our common stock and strategic acquisitions.

Reconciliation of net cash provided by operating activities to free cash flow is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
	(In thousands)						(In thousands)
Net cash provided by operating activities	$	51,347		$	46,268		$	151,899		$	116,220
Additions to rental fleet, excluding acquisitions		(14,850	)		(27,144	)		(61,247	)		(65,620	)
Proceeds from sale of rental fleet		3,728			3,770			10,782			11,447
Additions to property, plant and equipment, excluding acquisitions		(3,482	)		(5,554	)		(9,917	)		(14,635	)
Proceeds from sale of property, plant and equipment		315			136			448			603
Net capital expenditures, excluding acquisitions		(14,289	)		(28,792	)		(59,934	)		(68,205	)
Free cash flow	$	37,058		$	17,476		$	91,965		$	48,015

Constant Currency. We calculate the effect of currency fluctuations on current periods by translating the results for our business in the U.K. during the current period using the average exchange rates from the same period in the prior year. We present constant currency information to provide useful information to assess our underlying business excluding the effect of material foreign currency rate fluctuations. The table below shows certain financial information as calculated on a constant currency basis:

	Three Months Ended September 30, 2019
	Calculated in Constant Currency		As Reported		Difference
	(In thousands)
Rental revenues	$	146,582	$	145,519	$	1,063
Rental, selling and general expenses		92,100		91,399		701
Adjusted EBITDA		62,053		61,674		379

	Nine Months Ended September 30, 2019
	Calculated in Constant Currency		As Reported		Difference
	(In thousands)
Rental revenues	$	433,050	$	429,597	$	3,453
Rental, selling and general expenses		281,714		279,368		2,346
Adjusted EBITDA		175,998		174,811		1,187

RESULTS OF OPERATIONS

Three Months Ended September 30, 2019, Compared to Three Months Ended September 30, 2018

	Three Months Ended September 30,						Percentage of Revenue Three Months Ended September 30,								Increase (Decrease)
	2019			2018			2019				2018				2019 versus 2018
	(In thousands, except percentages)
Revenues:
Rental	$	145,519		$	140,924			94.8		%		94.1		%	$	4,595			3.3		%
Sales		7,887			8,716			5.1				5.8				(829	)		(9.5	)
Other		111			67			0.1				—				44			65.7
Total revenues		153,517			149,707			100.0				100.0				3,810			2.5
Costs and expenses:
Rental, selling and general expenses		91,399			90,764			59.5				60.6				635			0.7
Cost of sales		4,838			5,770			3.2				3.9				(932	)		(16.2	)
Asset impairment charge and loss on divestiture, net		—			98,278			—				65.6				(98,278	)	n/a
Depreciation and amortization		17,490			16,191			11.4				10.8				1,299			8.0
Total costs and expenses		113,727			211,003			74.1				140.9				(97,276	)		(46.1	)
Income (loss) from operations		39,790			(61,296	)		25.9				(40.9	)			101,086			(164.9	)
Other income (expense):
Interest income		12			—			—				—				12		n/a
Interest expense		(10,393	)		(10,487	)		(6.8	)			(7.0	)			94			(0.9	)
Foreign currency exchange		(13	)		24			—				—				(37	)	n/a
Income (loss) before income tax provision (benefit)		29,396			(71,759	)		19.1				(47.9	)			101,155
Income tax provision (benefit)		6,821			(19,594	)		4.4				(13.1	)			26,415
Net income (loss)	$	22,575		$	(52,165	)		14.7		%		(34.8	)	%	$	74,740

	Three Months Ended September 30,					Percentage of Revenue Three Months Ended September 30,							Increase (Decrease)
	2019		2018			2019			2018				2019 versus 2018
	(In thousands, except percentages)
EBITDA	$	57,279	$	(45,081	)		37.3	%		(30.1	)	%	$	102,360	(227.1	)	%
Adjusted EBITDA		61,674		55,427			40.2			37.0				6,247	11.3
Free Cash Flow		37,058		17,476			24.1			11.7				19,582	112.1

Total Revenues. The following table depicts revenues by type of business for the three-month periods ended September 30:

	Storage Solutions
	Three Months Ended September 30,
	2019		2018		Increase (Decrease) 2019 versus 2018
	(In thousands, except percentages)
Revenues:
Rental	$	116,820	$	112,639	$	4,181		3.7		%
Sales		6,439		7,696		(1,257	)	(16.3	)
Other		75		40		35		87.5
Total revenues	$	123,334	$	120,375	$	2,959		2.5

	Tank & Pump Solutions
	Three Months Ended September 30,
	2019		2018		Increase (Decrease) 2019 versus 2018
	(In thousands, except percentages)
Revenues:
Rental	$	28,699	$	28,285	$	414	1.5	%
Sales		1,448		1,020		428	42.0
Other		36		27		9	33.3
Total revenues	$	30,183	$	29,332	$	851	2.9

Of the $153.5 million of total revenues for the three months ended September 30, 2019, $123.3 million, or 80.3%, related to the Storage Solutions business and $30.2 million, or 19.7%, related to the Tank & Pump Solutions business. Of the $149.7 million of total revenues for the three-month period ended September 30, 2018, $120.4 million, or 80.4%, related to the Storage Solutions business and $29.3 million, or 19.6%, related to the Tank & Pump Solutions business.

Rental Revenues. Storage Solutions rental revenues increased 3.7% during the three-month period ended September 30, 2019, as compared to the prior-year period. In constant currency, rental revenues increased 4.7%. This increase was driven by a 3.6% increase in year-over-year rental rates, as well as favorable mix and increases in delivery and pickup revenue, offset by a slight decrease in average units on rent on a consolidated basis. Average units on rent in North America were up slightly during the current-year quarter compared to the prior-year, while average units on rent in the U.K. were down 3.4%.

During 2018, we began to pursue partnerships with other rental companies to provide supplementary product offerings for certain of our Storage Solutions customers. Arranging these comprehensive managed rental services for our customers increases loyalty while generating additional revenue, without additional investment in fleet. While these revenues were not material for the third quarter of 2019 or 2018, we do expect to continue to develop these revenues. During the third quarter of 2019 we recognized $2.5 million of rental revenue related to managed service arrangements, compared to $2.0 million in the third quarter of 2018.

Excluding revenues and units related to managed rental service arrangements, yield for the three months ended September 30, 2019 (calculated as rental revenues divided by average units on rent and adjusted to a 28-day period) increased 4.0%, or 5.0% in constant currency, as compared to the prior-year period. The increase was driven by higher rates overall, and in North America, favorable mix and increased delivery and pickup revenue.

Rental revenues within the Tank & Pump Solutions business increased $0.4 million, or 1.5%, for the three-month period ended September 30, 2019, as compared to the prior-year period. Increased average fleet on rent combined with increased re-rent activity and slight increases in year-over-year rates were largely offset by changes in rental mix. Delivery, pickup and similar revenue was consistent with the prior-year period. Downstream activity continues to be solid overall with increased year-over-year rental revenue driven by the continued growth of business conducted under several large master service agreements signed in late 2017 and early 2018, as well as increased rates. These agreements were still in early stages in the third quarter of 2018 and are now implemented. Increased revenue related to these agreements more than offset decreased activity at certain of our downstream customers due to the completion of large-scale maintenance projects. Rental revenue related to upstream activity decreased compared to the prior-year period, while rental revenues from our diversified customers were up compared to the prior-year quarter as a result of increased project activity.

Sales Revenues. We focus on rental revenues. In general, sales of units from our fleet occur due to a particular customer need, or due to having fleet in excess of demand at a particular location. Storage Solutions sales revenue of $6.4 million for the quarter ended September 30, 2019 decreased $1.3 million, or 16.3%, compared to the prior-year period. Tank & Pump Solutions sales revenue of $1.4 million for the quarter ended September 30, 2019 increased $0.4 million from the prior-year period.

Costs and Expenses. The following table depicts costs and expenses by type of business for the three-month periods ended September 30:

	Storage Solutions
	Three Months Ended September 30,
	2019		2018		Increase (Decrease) 2019 versus 2018
	(In thousands, except percentages)
Costs and expenses:
Rental, selling and general expenses	$	72,353	$	71,121	$	1,232			1.7		%
Cost of sales		4,048		5,226		(1,178	)		(22.5	)
Asset impairment charge and loss on divestiture, net		—		96,092		(96,092	)	n/a
Depreciation and amortization		10,576		9,758		818			8.4
Total costs and expenses	$	86,977	$	182,197	$	(95,220	)		(52.3	)

	Tank & Pump Solutions
	Three Months Ended September 30,
	2019		2018		Increase (Decrease) 2019 versus 2018
	(In thousands, except percentages)
Costs and expenses:
Rental, selling and general expenses		19,046	$	19,643	$	(597	)	(3.0	)	%
Cost of sales		790		544		246		45.2
Asset impairment charge and loss on divestiture, net		—		2,186		(2,186	)	(100.0	)
Depreciation and amortization		6,914		6,433		481		7.5
Total costs and expenses	$	26,750	$	28,806	$	(2,056	)	(7.1	)

Rental, Selling and General Expenses. Rental, selling and general expenses for the three months ended September 30, 2019 of $91.4 million increased $0.6 million, or 0.7%, as compared to the prior-year period. As a percentage of total revenues, rental, selling and general expenses were 59.5% for the three months ended September 30, 2019, which was a decrease from 60.6% in the prior-year period.

Rental, selling and general expenses for the three months ended September 30, 2019 included $1.9 million of expense related to incremental costs associated with actual and potential acquisitions. Excluding these expenses, rental, selling and general expenses decreased $1.3 million, or 1.4% and as a percentage of total revenues decreased to 58.3%. In constant currency, consolidated rental, selling and general expenses decreased $0.6 million, or 0.6%.

Excluding the incremental costs associated with actual and potential acquisitions, Storage Solutions rental, selling and general expenses for the three months ended September 30, 2019 decreased $0.7 million. In constant currency rental, selling and general expense was flat as compared to the prior-year period. An increase in payroll costs, was largely offset by a decrease in short-term variable incentive plan expense. Additionally, decreased transportation costs offset higher administrative costs, including an increase in provision for doubtful accounts.

Rental, selling and general expenses for the Tank & Pump Solutions business decreased $0.6 million, or 3.0%, in the current-year quarter, as compared to the prior-year quarter. Increased payroll costs were more than offset by decreased short-term variable incentive plan expense and decreased third party transportation costs.

Cost of Sales. Cost of sales is the cost related to our sales revenue only. Within the Storage Solutions business, cost of sales was $4.0 million and $5.2 million for the three months ended September 30, 2019 and 2018, respectively. Storage Solutions sales revenue, less cost of sales (sales profit), was $2.4 million and $2.5 million for the three-months ended September 30, 2019 and 2018, respectively. Sales profit expressed as a percentage of sales revenue (sales profit margin) was 37.1% in the quarter ended September 30, 2019 and 32.1% in the prior-year quarter.

Within the Tank & Pump Solutions business, cost of sales was $0.8 million in the quarter ended September 30, 2019 and $0.5 million for the quarter ended September 30, 2018. Tank & Pump Solutions sales profit was $0.7 million and $0.5 million for the three-month periods ended September 30, 2019 and 2018, respectively.

Asset Impairment Charge and Loss on Divestiture, Net. During the prior-year quarter we identified specific underperforming assets to classify as held for sale. As a result, we recognized a loss of $98.3 million in that period. See Note 7 in the accompanying condensed consolidated financial statements for more information.

Depreciation and Amortization Expense. Total depreciation and amortization expense was $17.5 million for the three months ended September 30, 2019, an increase of $1.3 million, or 8.0%, as compared to the prior-year period.

Interest Expense. Interest expense was $10.4 million for the three months ended September 30, 2019 and $10.5 million in the prior-year period. This slight decrease is due primarily to an overall decrease in debt outstanding largely offset by a higher effective interest rate on our lines of credit. Our average debt outstanding in the quarter ended September 30, 2019 was $895.9 million, compared to $923.4 million in the prior-year quarter. The weighted average interest rate on our debt was 4.4% and 4.3% for the three-month periods ended September 30, 2019 and 2018, respectively, excluding the amortization of deferred financing costs. Taking into account the amortization of deferred financing costs, the weighted average interest rate was 4.6% and 4.5% for the three-month periods ended September 30, 2019 and 2018, respectively.

Provision for Income Taxes. During the quarter ended September 30, 2019, we had a $6.8 million provision for income taxes, compared to a benefit of $19.6 million in the prior-year quarter. Our effective income tax rate decreased to 23.2% for the three months ended September 30, 2019, compared to 27.3% for the prior-year quarter.

During the current-period quarter we had a $0.7 million benefit related to the true-up of a prior-year tax return. In the quarter ended September 30, 2018, we recognized a $2.6 million reduction in our provisional tax expense related to the impact of the U.S. federal tax reform enacted in the fourth quarter of 2017. Excluding the tax effect of the $98.3 million asset impairment charge and loss on divestiture discussed in Note 7 in the accompanying condensed consolidated financial statements, as well as the $2.6 million reduction to our provisional tax expense, our income tax provision for the three months ended September 30, 2018 was $7.4 million, and the tax rate was 28.0%.

Net Income. As a result of the income statement activity discussed above, we had net income of $22.6 million for the three months ended September 30, 2019, compared to net loss of $52.2 million for the three months ended September 30, 2018.

Adjusted EBITDA. For the three-month period ended September 30, 2019, we realized adjusted EBITDA of $61.7 million, an increase of $6.2 million. In constant currency, adjusted EBITDA increased $6.6 million, or 12.0%, as compared to adjusted EBITDA of $55.4 million in the prior-year period. The increase was generated by revenue growth in both our Storage Solutions and Tank & Pump Solutions business, combined with reduced rental, selling and general expenses, after adjusting for certain items. Our adjusted EBITDA margins were 40.2% and 37.0% for the quarters ended September 30, 2019 and 2018, respectively.

During the three months ended September 30, 2019, adjusted EBITDA related to the Storage Solutions business increased $5.0 million. In constant currency, adjusted EBITDA increased $5.4 million, or 11.7%, to $51.6 million from $46.2 million in the prior-year period. Increased adjusted EBITDA in North American Storage Solutions was partially offset by decreased Adjusted EBITDA in U.K. Storage Solutions. Adjusted EBITDA related to the Tank & Pump Solutions business increased $1.2 million, or 13.3%, to $10.5 million during the three months ended September 30, 2019 from $9.3 million during the prior-year period. Adjusted EBITDA margins for the quarter ended September 30, 2019 were 41.5% for the Storage Solutions business and 34.7% for the Tank & Pump Solutions business.

Nine Months Ended September 30, 2019, Compared to Nine Months Ended September 30, 2018

	Nine Months Ended September 30,						Percentage of Revenue Nine Months Ended September 30,								Increase (Decrease)
	2019			2018			2019				2018				2019 versus 2018
	(In thousands, except percentages)
Revenues:
Rental	$	429,597		$	406,149			94.8		%		93.9		%	$	23,448			5.8		%
Sales		23,245			25,700			5.1				5.9				(2,455	)		(9.6	)
Other		517			511			0.1				0.1				6			1.2
Total revenues		453,359			432,360			100.0				100.0				20,999			4.9
Costs and expenses:
Rental, selling and general expenses		279,368			269,033			61.6				62.2				10,335			3.8
Cost of sales		14,484			16,925			3.2				3.9				(2,441	)		(14.4	)
Restructuring expenses		—			1,306			—				0.3				(1,306	)	n/a
Asset impairment charge and loss on divestiture, net		—			98,278			—				22.7				(98,278	)		(100.0	)
Depreciation and amortization		52,960			50,206			11.7				11.6				2,754			5.5
Total costs and expenses		346,812			435,748			76.5				100.8				(88,936	)		(20.4	)
Income (loss) from operations		106,547			(3,388	)		23.5				(0.8	)			109,935			(3,244.8	)
Other income (expense):
Interest income		12			6			—				—				6		n/a
Interest expense		(31,745	)		(30,179	)		(7.0	)			(7.0	)			(1,566	)		5.2
Deferred financing costs write-off		(123	)		—			—				—				(123	)	n/a
Foreign currency exchange		(179	)		69			—				—				(248	)	n/a
Income (loss) before income tax provision (benefit)		74,512			(33,492	)		16.4				(7.7	)			108,004
Income tax provision (benefit)		19,794			(11,182	)		4.4				(2.6	)			30,976
Net income (loss)	$	54,718		$	(22,310	)		12.1		%		(5.2	)	%	$	77,028

	Nine Months Ended September 30,				Percentage of Revenue Nine Months Ended September 30,						Increase (Decrease)
	2019		2018		2019			2018			2019 versus 2018
	(In thousands, except percentages)
EBITDA	$	159,340	$	46,893		35.1	%		10.8	%	$	112,447	239.8	%
Adjusted EBITDA		174,811		153,980		38.6			35.6			20,831	13.5
Free Cash Flow		91,965		48,015		20.3			11.1			43,950	91.5

Total Revenues. The following table depicts revenues by type of business for the nine-month periods ended September 30:

	Storage Solutions
	Nine Months Ended September 30,
	2019		2018		Increase (Decrease) 2019 versus 2018
	(In thousands, except percentages)
Revenues:
Rental	$	339,930	$	325,293	$	14,637		4.5		%
Sales		18,987		21,785		(2,798	)	(12.8	)
Other		363		399		(36	)	(9.0	)
Total revenues	$	359,280	$	347,477	$	11,803		3.4

	Tank & Pump Solutions
	Nine Months Ended September 30,
	2019		2018		Increase (Decrease) 2019 versus 2018
	(In thousands, except percentages)
Revenues:
Rental	$	89,667	$	80,856	$	8,811	10.9	%
Sales		4,258		3,915		343	8.8
Other		154		112		42	37.5
Total revenues	$	94,079	$	84,883	$	9,196	10.8

Of the $453.4 million of total revenues for the nine months ended September 30, 2019, $359.3 million, or 79.2%, related to the Storage Solutions business and $94.1 million, or 20.8%, related to the Tank & Pump Solutions business. Of the $432.4 million of total revenues for the nine-month period ended September 30, 2018, $347.5 million, or 80.4%, related to the Storage Solutions business and $84.9 million, or 19.6%, related to the Tank & Pump Solutions business.

Rental Revenues. Storage Solutions rental revenues increased 4.5% during the nine-month period ended September 30, 2019, as compared to the prior-year period. In constant currency, rental revenues increased 5.6%. This increase was driven by a 3.2% increase in year-over-year rental rates and a slight increase in units on rent, as well as favorable mix and increases in delivery and pickup revenue.

During 2018, we began to pursue partnerships with other rental companies to provide supplementary product offerings for certain of our Storage Solutions customers. Arranging these comprehensive managed rental services for our customers increases loyalty while generating additional revenue, without additional investment in fleet. While these revenues were not material for the first nine months of 2019 or 2018, we do expect to continue to develop these revenues. During the nine months ended September 30, 2019 we recognized $6.5 million of rental revenue related to managed service arrangements, compared to $3.2 million in the first nine months of 2018.

Excluding revenues and units related to managed rental service arrangements, yield for the nine months ended September 30, 2019 increased 3.5%, or 4.6% in constant currency as compared to the prior-year period, due primarily to increased rates and increased delivery and pickup revenue.

Rental revenues within the Tank & Pump Solutions business increased $8.8 million, or 10.9%, for the nine-month period ended September 30, 2019, as compared to the prior-year period. This increase was driven by an approximately 10.8% increase in fleet on rent for the current period and increased year-over-year rental rates. Additionally, delivery, pickup and similar revenue increased due to growth in areas such as equipment monitoring and other trucking services. In the downstream segment, increased year-over-year rental revenue for the nine months ended September 30, 2019 was driven by the continued growth of business conducted under several large master service agreements signed in late 2017 and early 2018, as well as increased rates. These agreements were still in early stages in the first nine months of 2018 and are now implemented. Within our upstream segment healthy year-over-year growth in the first six months of 2019 was offset by a year-over-year decrease in rental revenue for the three months ended September 30, 2019, resulting in a slight increase in rental revenue for the nine months ended September 30, 2019 as compared to the same period in the prior year. Rental revenues from our diversified customers were up compared to the prior-year period as a result of increased project activity.

Sales Revenues. We focus on rental revenues. In general, sales of units from our fleet occur due to a particular customer need, or due to having fleet in excess of demand at a particular location. Storage Solutions sales revenue of $19.0 million for the nine months ended September 30, 2019 decreased $2.8 million, or 12.8%, compared to the prior-year period. Tank & Pump Solutions sales revenue of $4.3 million for the nine months ended September 30, 2019 increased $0.3 million from the prior-year period.

Costs and Expenses. The following table depicts costs and expenses by type of business for the nine-month periods ended September 30:

	Storage Solutions
	Nine Months Ended September 30,
	2019		2018		Increase (Decrease) 2019 versus 2018
	(In thousands, except percentages)
Costs and expenses:
Rental, selling and general expenses	$	220,036	$	212,248	$	7,788			3.7		%
Cost of sales		12,134		14,695		(2,561	)		(17.4	)
Restructuring expenses		—		1,306		(1,306	)	n/a
Asset impairment charge and loss on divestiture, net		—		96,092		(96,092	)	n/a
Depreciation and amortization		32,237		31,398		839			2.7
Total costs and expenses	$	264,407	$	355,739	$	(91,332	)		(25.7	)

	Tank & Pump Solutions
	Nine Months Ended September 30,
	2019		2018		Increase (Decrease) 2019 versus 2018
	(In thousands, except percentages)
Costs and expenses:
Rental, selling and general expenses	$	59,332	$	56,785	$	2,547		4.5		%
Cost of sales		2,350		2,230		120		5.4
Asset impairment charge and loss on divestiture, net		—		2,186		(2,186	)	(100.0	)
Depreciation and amortization		20,723		18,808		1,915		10.2
Total costs and expenses	$	82,405	$	80,009	$	2,396		3.0

Rental, Selling and General Expenses. Rental, selling and general expenses for the nine months ended September 30, 2019 of $279.4 million increased $10.3 million, or 3.8%, as compared to the prior-year period. As a percentage of total revenues, rental, selling and general expenses were 61.6% for the nine months ended September 30, 2019, which was a decrease from 62.2% in the prior-year period. In the first nine months of 2019, we realized savings of approximately $4.1 million related to the 2018 fleet divestiture and new strengthened processes around fleet management.

Rental, selling and general expenses for the nine months ended September 30, 2019 included $3.6 million related to the amendment of certain stock award agreements in conjunction with the transition of our Chief Executive Officer (“CEO”) to Chairman of the Board of Directors. In addition, we recognized $2.6 million of expense related to incremental costs associated with actual and potential acquisitions. Excluding these expenses, rental, selling and general expenses increased $4.1 million, or 1.5% and as a percentage of total revenues decreased to 60.2%.

Excluding the CEO transition expenses and the incremental costs associated with actual and potential acquisitions, Storage Solutions rental, selling and general expenses for the nine months ended September 30, 2019 increased $1.6 million. In constant currency rental, selling and general expense increased $3.9 million, or 1.9%, from the prior-year period. The increase was primarily due to higher payroll costs. Decreased short-term variable incentive plan expense was partially offset by increased expense related to our long-term share-based incentive compensation plan, as well as an increase in bad debt expense.

Rental, selling and general expenses for the Tank & Pump Solutions business increased $2.5 million, or 4.5%, in the first nine months of 2019, as compared to the prior-year period. Increased payroll and maintenance costs to support the increased business was partially offset by decreased short-term variable incentive plan expense.

Cost of Sales. Cost of sales is the cost related to our sales revenue only. Within the Storage Solutions business, cost of sales was $12.1 million and $14.7 million for the nine months ended September 30, 2019 and 2018, respectively. Storage Solutions sales profit was $6.9 million and $7.1 million for the nine-month periods ended September 30, 2019 and 2018, respectively. Sales profit margin was 36.1% in the nine months ended September 30, 2019 and 32.5% in the prior-year period.

Within the Tank & Pump Solutions business, cost of sales was $2.4 million compared to $2.2 million in the nine-month periods ended September 30, 2019 and 2018, respectively. Tank & Pump Solutions sales profit was $1.9 million and $1.7 million for the nine-month periods ended September 30, 2019 and 2018, respectively.

Asset Impairment Charge and Loss on Divestiture, Net. During the prior-year period we identified specific underperforming assets to classify as held for sale. As a result, we recognized a loss of $98.3 million in that period. See Note 7 in the accompanying condensed consolidated financial statements for more information.

Depreciation and Amortization Expense. Total depreciation and amortization expense was $53.0 million for the nine months ended September 30, 2019, an increase of $2.8 million, or 5.5%, as compared to the prior-year period.

Interest Expense. Interest expense was $31.7 million for the nine months ended September 30, 2019 and $30.2 million in the prior-year period. This increase is due to a higher effective interest rate on our lines of credit, partially offset by an overall decrease in debt outstanding. Our average debt outstanding in the nine months ended September 30, 2019 was $895.0 million, compared to $921.5 million in the prior-year period. The weighted average interest rate on our debt was 4.5% and 4.1% for the nine-month periods ended September 30, 2019 and 2018, respectively, excluding the amortization of deferred financing costs. Taking into account the amortization of deferred financing costs, the weighted average interest rate was 4.7% and 4.4% for the nine-month periods ended September 30, 2019 and 2018, respectively.

Provision for Income Taxes. During the nine months ended September 30, 2019, we had a $19.8 million provision for income taxes, compared to an $11.2 million benefit in the prior-year period. Our effective income tax rate decreased to 26.6% for the nine months ended September 30, 2019, compared to 33.4% for the prior-year period.

Our current-year rate was affected by non-deductible stock compensation of $3.6 million recorded in the current nine-month period, largely offset by a $0.7 million benefit related to a federal tax return true up. See additional information regarding the non-deductible stock compensation in Note 15.

The prior-year effective tax was impacted by the $98.3 million asset impairment charge and loss on divestiture. Additionally, in the prior-year period, we recognized a $2.9 million benefit resulting from the reduction of provisional tax expense related to the U.S. federal tax reform enacted in 2017, as well as benefits related to state tax rate changes enacted in the third quarter of 2018. These tax benefits had the effect of increasing the effective tax rate due to the $33.5 million pre-tax loss recognized during the nine-month period. Excluding the tax affects of the $98.3 million asset impairment charge and loss on divestiture, $1.3 million of restructuring expenses, as well as the $2.9 million reduction to our provisional tax expense, our income tax provision was $16.2 million, and the tax rate was 24.4%

Net (Loss) Income. As a result of the income statement activity discussed above, we had net income of $54.7 million for the nine months ended September 30, 2019, compared to a net loss of $22.3 million for the nine months ended September 30, 2018.

Adjusted EBITDA. For the nine-month period ended September 30, 2019, we realized adjusted EBITDA of $174.8 million, an increase of $20.8 million. In constant currency, adjusted EBITDA increased $22.0 million, or 14.3%, as compared to adjusted EBITDA of $154.0 million in the prior-year period. The increase was generated by strong revenue growth in both our Storage Solutions and Tank & Pump Solutions business, and was partially offset by overall increased rental, selling and general expenses. Our adjusted EBITDA margins were 38.6% and 35.6% for the nine months ended September 30, 2019 and 2018, respectively.

During the nine months ended September 30, 2019, adjusted EBITDA related to the Storage Solutions business increased $14.1 million. In constant currency, adjusted EBITDA increased $15.3 million, or 12.0%, to $143.1 million from $127.8 million in the prior-year period. Adjusted EBITDA related to the Tank & Pump Solutions business increased $6.7 million, or 25.8%, to $32.9 million during the nine months ended September 30, 2019 from $26.2 million during the prior-year period. Adjusted EBITDA margins for the nine months ended September 30, 2019 were 39.5% for the Storage Solutions business and 35.0% for the Tank & Pump Solutions business.

LIQUIDITY AND CAPITAL RESOURCES

Renting is a capital-intensive business that requires us to acquire assets before they generate revenues, cash flow and earnings. The majority of the assets that we rent have very long useful lives and require relatively little maintenance expenditures. Most of the capital we have deployed in our rental business historically has been used to expand our operations geographically, execute opportunistic acquisitions, increase the number of units available for rent at our existing locations, and add to the mix of products we offer. During recent years, our operations have generated annual cash flow that exceeds our pre-tax earnings, particularly due to cash flow from operations and the deferral of income taxes caused by accelerated depreciation of our fixed assets in our tax return filings. Our strong cash flows from operating activities for the nine-month periods ended September 30, 2019 and 2018 of $151.9 million and $116.2 million, respectively, resulted in free cash flow of $92.0 million and $48.0 million, respectively. In addition to free cash flow, our principal current source of liquidity is our revolving credit facility as described below.

Revolving Credit Facility. On March 22, 2019, Mobile Mini and certain of its subsidiaries entered into the Second Amended and Restated ABL Credit Agreement dated as of March 22, 2019 (the “New Credit Agreement”) with Deutsche Bank AG New York Branch (“Deutsche Bank”), as administrative agent, and the other lenders party thereto. The New Credit Agreement amends, restates and replaces Mobile Mini’s existing Amended and Restated ABL Credit Agreement dated as of December 14, 2015 (the “Prior Credit Agreement”) with Deutsche Bank, as administrative agent, and the other lenders party thereto.

The New Credit Agreement provides for a five year, $1 billion first lien senior secured revolving credit facility, maturing on or before March 22, 2024. The New Credit Agreement also provides for the issuance of irrevocable standby letters of credit by U.S.-based lenders in amounts totaling up to $50.0 million, by U.K.-based lenders in amounts totaling up to $20.0 million, and by Canadian-based lenders in amounts totaling up to $20.0 million.

Our and our subsidiary guarantors’ obligations under the New Credit Agreement are secured by a blanket lien on substantially all of our assets. At September 30, 2019, we had $584.0 million of borrowings outstanding and $412.9 million of additional borrowing availability under the New Credit Agreement. We were in compliance with the terms of the New Credit Agreement as of September 30, 2019 and were above the minimum borrowing availability threshold and, therefore, are not subject to any financial maintenance covenants.

We believe our cash provided by operating activities will provide for our normal capital needs for the next twelve months. If not, we have sufficient borrowings available under our New Credit Agreement to meet any additional funding requirements. We monitor the financial strength of our lenders on an ongoing basis using publicly-available information. Based upon that information, we do not presently believe that there is a likelihood that any of our lenders will be unable to honor their respective commitments under the New Credit Agreement.

Senior Notes. The 2024 Notes, issued on May 9, 2016, bear interest at a rate of 5.875% per year, have an eight-year term and mature on July 1, 2024. Interest on the 2024 Notes is payable semiannually in arrears on January 1 and July 1. The 2024 Notes are senior unsecured obligations of the Company and are unconditionally guaranteed on a senior unsecured basis by certain of our existing and future domestic subsidiaries.

Cash Flow Summary.

	For the Nine Months Ended September 30,
	2019			2018
	(In thousands)
Net income (loss)	$	54,718		$	(22,310	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Asset impairment charge and loss on divestiture, net		—			98,278
Deferred income taxes		15,855			(12,891	)
Other adjustments		67,163			57,662
Total adjustments to reconcile net income (loss) to net cash provided by operating activities		83,018			143,049
Changes in certain assets and liabilities		14,163			(4,519	)
Net cash provided by operating activities		151,899			116,220
Net cash used in investing activities		(64,812	)		(64,697	)
Net cash used in financing activities		(85,247	)		(61,108	)
Effect of exchange rate changes on cash		(150	)		1,069
Net increase (decrease) in cash	$	1,690		$	(8,516	)

Operating Activities. Net cash provided by operating activities was $151.9 million for the nine months ended September 30, 2019, compared to $116.2 million in the prior-year period, an increase of $35.7 million. The increase was driven by growth in our underlying business and changes in certain assets and liabilities. Net cash provided by operating activities was increased by $14.2 million and reduced by $4.5 million related to changes in certain assets and liabilities for the nine months ended September 30, 2019 and 2018, respectively. Decreased accounts receivable resulted in an $18.7 million increase in cash provided by operating activities for the nine months ended September 30, 2019.

Investing Activities. The amount of cash that we use during any period in investing activities is almost entirely within management’s discretion. In addition to our expenditures for our rental fleet, capital expenditures include items such as the cost to buy or replace forklifts, trucks and trailers that we use to move and deliver our products to our customers, and for our computer

information and communication systems. Net cash used in investing activities was $64.8 million in the nine months ended September 30, 2019, compared to $64.7 million in the prior-year period. During the nine months ended September 30, 2019, we made one tuck-in acquisition for $4.9 million. During the nine months ended September 30, 2018, we received $3.5 million related to the sale of assets held for sale.

Rental fleet expenditures were as follows for the periods indicated:

	Additions to Rental Fleet, Excluding Acquisitions for the Nine Months Ended September 30,
	2019			2018
	(In thousands)
North America Storage Solutions	$	39,114		$	39,400
United Kingdom Storage Solutions		3,657			5,805
Tank & Pump Solutions		18,476			20,415
Consolidated additions to rental fleet, excluding acquisitions		61,247			65,620
Proceeds from sale of rental fleet		(10,782	)		(11,447	)
Rental fleet net capital expenditures	$	50,465		$	54,173

Rental fleet expenditures were $61.2 million in the nine months ended September 30, 2019, a decrease of $4.4 million compared to the prior-year period. Expenditures for rental fleet were made to meet overall increases in Tank & Pump Solutions demand as well as for North American Storage Solutions. Proceeds of $10.8 million from the sale of rental fleet units for the first nine months of 2019 were consistent with the first nine months of 2018. In general, sales of units from our fleet occur due to a particular customer need, or due to having fleet in excess of rental demand at a particular location; as such, the proceeds from sale of rental units will normally fluctuate from period to period.

Gross capital expenditures for property, plant and equipment were $9.9 million for the nine months ended September 30, 2019, compared to $14.6 million for the nine-month period ended September 30, 2018. The current and prior-year periods include hardware and software-related costs of approximately $4.0 million and $5.6 million, respectively, largely driven by our ongoing technology innovations.

Financing Activities. Net cash used in financing activities during the nine months ended September 30, 2019 was $85.2 million, compared to $61.1 million for the prior-year period. In the current-year period, we repaid $9.5 million under our lines of credit and paid $3.5 million of deferred financing costs primarily related to the New Credit Agreement. Also, in the nine months ended September 30, 2019, we paid $36.9 million of dividends and purchased $29.5 million of treasury stock, of which $28.4 million were purchased under our authorized share repurchase program. As of September 30, 2019, we have $42.4 million remaining available for stock repurchases under our authorized share repurchase program. In the prior-year period, we repaid $24.1 million under our lines of credit and paid $33.3 million of dividends.

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

Our contractual obligations primarily consist of our outstanding balance under the New Credit Agreement, the principal amount of the 2024 Notes and obligations under finance leases. We also have operating lease liabilities for: (i) real estate properties for the majority of our locations with remaining lease terms typically ranging from one to five years, (ii) delivery, transportation and yard equipment, typically under a seven-year lease with purchase options at the end of the lease term at a stated or fair market value price, and (iii) office related equipment.

At September 30, 2019, primarily in connection with securing our insurance policies, we have provided certain insurance carriers and others with approximately $3.1 million in letters of credit. We currently do not have any material obligations under purchase agreements or commitments.

OFF-BALANCE SHEET TRANSACTIONS

We do not maintain any off-balance sheet transactions, arrangements, obligations or other relationships with unconsolidated entities or others that are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

SEASONALITY

Demand from our Storage Solutions customers is somewhat seasonal. Construction customers typically reflect higher demand during months with more temperate weather, while demand for our Storage Solutions units by large retailers is stronger from September through December because these retailers need to store more inventories for the holiday season. Our retail customers usually return these rented units to us in December and early in the following year. In the Tank & Pump Solutions business, demand from customers is typically higher in the middle of the year from March to October, driven by the timing of customer maintenance projects. The demand for rental of our pumps may also be impacted by weather, specifically when temperatures drop below freezing.

CRITICAL ACCOUNTING POLICIES, ESTIMATES AND JUDGMENTS

A comprehensive discussion of our critical accounting policies and management estimates and significant accounting policies are included in the “Management’s Discussion and Analysis of Financial Conditions and Results of Operations’ section and in Note 2 “Summary of Significant Accounting Policies” to the consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

There have been no significant changes in our critical accounting policies, estimates and judgments during the nine-month period ended September 30, 2019.

RECENT ACCOUNTING PRONOUNCEMENTS

For discussions of the adoption and potential impacts of recently issued accounting standards, refer to Note 2 “Impact of Recently Issued Accounting Standards” to the accompanying condensed consolidated financial statements.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

This section and other sections of this Quarterly Report on Form 10-Q contain forward-looking information about our financial results and estimates and our business prospects that involve substantial risks and uncertainties. From time to time, we also may provide oral or written forward-looking statements in other materials we release to the public. Forward-looking statements are expressions of our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historic or current facts. They include words such as “may,” “plan,” “seek,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “continue,” “project,” “should,” “likely,” “future,” “target,” “forecast,” “goal,” “observe,” and “strategy” or the negative thereof or variations thereon or similar terminology in connection with any discussion of future operating or financial performance. The forward-looking statements in this Quarterly Report on Form 10-Q reflect management’s beliefs, plans, objectives, goals, expectations, anticipations and intentions with respect to our financial condition, results of operations, future performance and business, and include statements regarding, among other things, our future actions; financial position; management forecasts; efficiencies; impacts on our liquidity or free cash flow; planned capital expenditures; cost savings, synergies and opportunities to increase productivity and profitability; our plans and expectations regarding acquisitions; income and margins; liquidity; anticipated growth; the economy; business strategy; budgets; projected costs and plans and objectives of management for future operations; sales efforts; taxes; refinancing of existing debt; and the outcome of contingencies such as legal proceedings and financial results. Factors that could cause actual results to differ materially from projected results include, without limitation:

•

an economic slowdown in the U.S. and/or the U.K. that affects any significant portion of our customer base, or the geographic regions where we operate in those countries;

•

our ability to manage growth at existing or new locations;

•

our ability to obtain borrowings under our revolving credit facility or additional debt or equity financings on acceptable terms;

•

changes in the supply and price of new and used products we lease;

•

our ability to increase revenue and control operating costs;

•

our ability to raise or maintain rental rates;

•

our ability to leverage and protect our information technology systems;

•

our ability to protect our patents and other intellectual property;

•

oil and gas prices;

•

currency exchange and interest rate fluctuations;

•

governmental laws and regulations affecting domestic and foreign operations, including tax obligations, environmental, and labor laws;

•

changes in the supply and cost of the raw materials we use in refurbishing or remanufacturing Storage Solutions units;

•

competitive developments affecting our industry, including pricing pressures or new entrants;

•

the timing, effectiveness and number of new markets we enter;

•

changes impacting our customers in their respective industries;

•

our ability to identify, value and integrate acquisitions;

•

our ability to optimize our scalable ERP system;

•

changes in GAAP;

•

changes in local zoning laws affecting either our ability to operate in certain areas or our customer’s ability to use our products;

•

global economic and financial conditions generally, including the availability of financing, interest and inflation rates, the imposition of tariffs, quotas, trade barriers and other similar restrictions and the pending exit of the U.K. from the E.U.;

•

any changes in business, political and economic conditions due to the threat of future terrorist activity in the U.S. and other parts of the world and related U.S. military action overseas; and

•

our ability to utilize our deferred tax assets.

We cannot guarantee that any forward-looking statement will be realized, although we believe we have been prudent in our plans and assumptions. Achievement of future results is subject to risks, uncertainties and inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from past results and those anticipated, estimated or projected. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise.

In addition to the information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 under the heading “Risk Factors.”

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk. As of September 30, 2019, we had $584.0 million of indebtedness under our New Credit Agreement, which bears interest at variable rates. Our average interest rate applicable to our revolving credit agreements was 4.0% for the nine months ended September 30, 2019. Based upon the average amount of our variable rate debt of $583.8 million outstanding during the nine months ended September 30, 2019, our annual interest expense would increase by approximately $5.8 million for each one percentage point increase in the interest rate of our lines of credit.

Impact of Foreign Currency Rate Changes. We currently have operations outside the U.S., and we bill those customers primarily in their local currency, which is subject to foreign currency rate changes. Our operations in Canada are billed in the Canadian Dollar, and our operations in the U.K. are billed in British Pounds. We are exposed to foreign exchange rate fluctuations as the financial results of our non-U.S. operations are translated into U.S. dollars. The impact of foreign currency rate changes has historically been insignificant with our Canadian operations, but we have more exposure to volatility with our U.K. operations. Based on the level of our U.K. operations during the nine months ended September 30, 2019, a 10% change in the value of the British Pound as compared to the U.S. dollar would have changed net income by approximately $1.1 million for the nine months ended September 30, 2019. We do not currently hedge our currency transaction or translation exposure, nor do we have any current plans to do so.

On June 23, 2016, the U.K. voted to leave the European Union (the “E.U.”) in a referendum vote that continues to have unknown social, geopolitical and economic impacts (“Brexit”). The terms of the U.K.’s withdrawal remain highly uncertain, which has impacted their economy, and the chances of a no-deal Brexit cannot be ruled out. As the Brexit terms and their impact become clear, we may adjust our U.K. strategy and operations accordingly. In order to help minimize our exchange rate gain and loss volatility, we finance our U.K. entities through our revolving credit facility, which allows us, at our option, to borrow funds locally in British Pound denominated debt. In the longer term, any impact from Brexit on us will depend, in part, on the outcome of tariff, trade, regulatory and other negotiations. Although it is unknown what the result of those negotiations will be, it is possible that new terms may adversely affect our operations and financial results.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, the Company’s disclosure controls and procedures were effective such that the information relating to the Company required to be disclosed in our SEC reports (i) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) is accumulated and communicated to the Company’s management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Controls

There were no changes in our internal controls over financial reporting during the quarterly period ended September 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II. OTHER INFORMATION

ITEM 1A. RISK FACTORS

We refer you to documents filed by us with the SEC, specifically “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, which identify important risk factors that could materially affect our business, financial condition and future results. We also refer you to the factors and cautionary language set forth in the section entitled “Cautionary Statements Regarding Forward-looking Statements” in “Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations” of this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q, including the accompanying condensed consolidated financial statements and related notes, should be read in conjunction with such risks and other factors for a full understanding of our operations and financial condition. The risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and herein are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or operating results. There have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10‑K for the fiscal year ended December 31, 2018.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The table below summarizes the information about purchases of our common stock during the quarterly period ended September 30, 2019:

Period	Total Number of Shares Purchased		Average Price Paid per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)		Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs
							(In thousands)
July 2019		83	$	33.36		—	$	60,825
August 2019		304,906		30.69		303,648		51,507
September 2019		277,265		32.86		277,265		42,397
Total		582,254				580,913

(1)	The weighted average price paid per share of common stock does not include the cost of commissions.

(2)

In November 2013, the Board approved a share repurchase program authorizing up to $125.0 million of the Company’s outstanding shares of common stock to be repurchased. In April 2015, the Board approved an increase of $50.0 million to the share repurchase program. The shares may be repurchased from time to time in the open market or in privately negotiated transactions. The share repurchase program does not have an expiration date and may be suspended or terminated at any time by the Board.

ITEM 6. EXHIBITS

Number		Description

31.1*		Certification of Chief Executive Officer pursuant to Item 601(b)(31) of Regulation S-K

31.2*		Certification of Chief Financial Officer pursuant to Item 601(b)(31) of Regulation S-K

32.1**		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Item 601(b)(32) of Regulation S-K

101.INS*		XBRL 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.SCH*		Inline XBRL Taxonomy Extension Schema Document

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

*	Filed herewith.

**	Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		MOBILE MINI, INC.

Date: November 1, 2019		/s/ Van A. Welch
		Van A. Welch
		Chief Financial Officer
		(Principal Financial Officer)

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Mobile Mini (MINI) 10-Q2019 Q3 Quarterly report

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