WillScot Holdings Corp

Previous wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand WillScot Holdings Corporation ("WillScot") operations and our present business environment. MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying notes thereto, contained in Part I, Item 1 of this report. The discussion of results of operations in this MD&A is presented on a historical basis, as of or for the three and nine months ended September 30, 2024 or prior periods.

Current wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand WillScot Holdings Corporation's ("WillScot") operations and our present business environment. MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying notes thereto, contained in Part I, Item 1 of this report. The discussion of results of operations in this MD&A is presented on a historical basis, as of or for the three months ended March 31, 2025 or prior periods.

Previous wording

We are a leading business services provider specializing in innovative and flexible turnkey temporary space solutions. We service diverse end markets across all sectors of the economy throughout the United States ("US"), Canada, and Mexico. As of September 30, 2024, our branch network included approximately 260 branch locations and additional drop lots to service our over 85,000 customers. We offer our customers an extensive selection of “Ready to Work” temporary space solutions with over 152,000 modular space units and over 210,000 portable storage and cold storage units in our fleet.

Current wording

We are a leading business services provider specializing in innovative and flexible turnkey space solutions. We offer our customers an extensive selection of space solutions with over 152,000 modular space units and over 209,000 portable storage units in our fleet. Our diverse product offering includes modular space solutions (modular office complexes, mobile offices, classrooms, blast-resistant modules, clearspan structures and sanitation solutions) and portable storage solutions (portable storage containers and climate-controlled containers and trailers). We also offer our customers a thoughtfully curated selection of solutions with Value-Added Products ("VAPS"), such as workstations, furniture, appliances, media packages, power and solar solutions, telematics, connectivity and data solutions, security and protection products, entrance packages, electrical and lighting products, organization and space optimization assets, perimeter solutions, and other items that improve the customer experience. We operate a hybrid in-house and outsourced logistics and service infrastructure that provides delivery, site work, installation, disassembly, removal and other services to our customers for an additional fee as part of our leasing and sales operations. We service diverse end markets across all sectors of the economy throughout the United States ("US"), Canada, and Mexico. As of March 31, 2025, our branch network included approximately 260 branch locations and additional drop lots to service our over 85,000 customers.

Previous wording

We primarily lease, rather than sell, our modular and portable storage units to customers, which results in a highly diversified and predictable recurring revenue stream. Over 90% of new lease orders are on our standard lease agreement, pre-negotiated master lease or national account agreements. The initial lease periods vary, and our leases are customarily renewable on a month-to-month basis after their initial term. Our lease revenue is highly predictable due to its recurring nature and the underlying stability and diversification of our lease portfolio. Furthermore, given that our customers value flexibility, they consistently extend their leases or renew on a month-to-month basis such that the average effective duration of our lease portfolio, excluding seasonal portable storage leases, is approximately 38 months. We complement our core leasing business by selling both new and used units, allowing us to leverage scale, achieve purchasing benefits and redeploy capital employed in our lease fleet.

Current wording

We primarily lease, rather than sell, our space solutions to customers, which results in a highly diversified and predictable recurring revenue stream. Over 90% of new lease orders are on our standard lease agreement, pre-negotiated master lease or national account agreements. Rental contracts with customers are generally based on a 28-day or monthly rate and billing cycle. The initial lease periods vary, and our leases are customarily renewable on a month-to-month basis after their initial term and continue until cancelled by the customer or us. Given that our customers value flexibility, they consistently extend their leases or renew on a month-to-month basis such that the average effective duration of our consolidated lease portfolio, excluding seasonal portable storage units, is approximately 41 months. We believe our lease revenue is highly predictable due to its recurring nature and the underlying stability and diversification of our lease portfolio. We complement our core leasing business by selling both new and used units, allowing us to leverage scale, achieve purchasing benefits, and redeploy capital employed in our lease fleet.

Previous wording

Our customers operate in a diversified set of end markets, including construction, commercial and industrial, retail and wholesale trade, energy and natural resources, education, government and institutions and healthcare. Core to our operating model is the ability to redeploy standardized assets across end markets. We track several market leading indicators to predict demand, including those related to our two largest end markets, the commercial and industrial sector and the construction sector, which collectively accounted for approximately 85% of our revenues for the nine months ended September 30, 2024.

Current wording

Our customers operate in a diversified set of end markets, including construction and infrastructure, commercial and industrial, energy and natural resources, and government and institutions. Core to our operating model is the ability to redeploy standardized assets across end markets. We track several leading market indicators to predict demand, including Gross Domestic Product in North America, the Architecture Billings Index, and non-residential construction square foot starts. These indicators, among others, support our demand forecast for our two largest end markets, the commercial and industrial sector and the construction and infrastructure market, which collectively accounted for approximately 83% of our revenues for the three months ended March 31, 2025.

Previous wording

On June 28, 2024, Williams Scotsman, Inc. ("WSI") completed a private offering of $500.0 million in aggregate principal amount of 6.625% senior secured notes due 2029 (the "2029 Secured Notes")to qualified institutional buyers pursuant to Rule 144A. Proceeds were used to repay approximately $495.0 million of outstanding indebtedness under the ABL Facility and certain fees and expenses.

Current wording

On March 26, 2025, Williams Scotsman, Inc. ("WSI") completed a private offering of $500.0 million in aggregate principal amount of its 6.625% senior secured notes due 2030 (the "2030 Secured Notes") to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as amended.

Previous wording

During the nine months ended September 30, 2024, we repurchased 3,623,298 shares of Common Stock for $140.4 million, excluding excise tax. As of September 30, 2024, $951.9 million of the authorization for future repurchases of the Common Stock remained available. Given that we believe our free cash flow is predictable (with the exception of isolated events), we believe that repurchases will be a recurring capital allocation priority.

Current wording

During the three months ended March 31, 2025, we repurchased 1,094,932 shares of Common Stock for $32.0 million, excluding excise tax. As of March 31, 2025, $789.8 million of the authorization for future repurchases of the Common Stock remained available. We believe our Adjusted Free Cash Flow is predictable (with the exception of isolated events). As such, we believe that repurchases will be a recurring capital allocation priority.

Previous wording

•Generated Adjusted EBITDA from continuing operations of $266.9 million for the three months ended September 30, 2024, representing an increase of $1.4 million, or 0.5%, as compared to the same period in 2023.

Current wording

•Generated Adjusted EBITDA from operations of $228.8 million for the three months ended March 31, 2025, representing a decrease of $19.2 million, or 7.8%, as compared to the same period in 2024.

Previous wording

•Net cash (used in) provided by operating activities decreased $192.6 million to $1.6 million net cash used in operating activities for the three months ended September 30, 2024 from $191.0 million net cash provided by operating activities for the three months ended September, 30, 2023. Net cash used in investing activities, excluding cash used for acquisitions, increased by $18.2 million. Capital expenditures for rental equipment increased $6.0 million for the three months ended September 30, 2024 as a result of increased new fleet purchases, including additional investment in climate-controlled containers and refrigerated storage units. Purchases of property, plant, and equipment decreased $2.2 million for the three months ended September 30, 2024. Proceeds from the sale of rental equipment increased $0.5 million. Proceeds from the sale of property, plant, and equipment decreased $12.1 million. Net CAPEX increased $15.3 million for the three months ended September 30, 2024.

Current wording

•Net cash used in investing activities, excluding cash used for acquisitions, decreased by $5.7 million. Capital expenditures for rental equipment increased $0.1 million for the three months ended March 31, 2025. Purchases of property, plant, and equipment decreased $1.9 million for the three months ended March 31, 2025. Proceeds from the sale of rental equipment decreased $0.1 million. Proceeds from the sale of property, plant, and equipment increased $1.3 million. Net CAPEX decreased $2.9 million for the three months ended March 31, 2025.

Previous wording

•With the exception of isolated events, we believe the predictability of our Free Cash Flow allows us to pursue multiple capital allocation priorities opportunistically, including investing in organic opportunities we see in the market, maintaining leverage in our stated range, opportunistically executing accretive acquisitions, and returning capital to shareholders.

Current wording

•We believe that the predictability of our Adjusted Free Cash Flow allows us to pursue multiple capital allocation priorities opportunistically, including investing in organic opportunities that we see in the market, maintaining leverage in our stated range, opportunistically executing accretive acquisitions, and returning capital to shareholders via share repurchases and dividend distributions.

Previous wording

In addition to using GAAP financial measurements, we use Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Gross Profit, Adjusted Gross Profit Percentage, Net CAPEX and Free Cash Flow, which are non-GAAP financial measures, to evaluate our operating results. As such, we include in this Form 10-Q reconciliations to their most directly comparable GAAP financial measures. These reconciliations and descriptions of why we believe these measures provide useful information to investors as well as a description of the limitations of these measures are included in "Reconciliation of non-GAAP Financial Measures" and "Liquidity and Capital Resources."

Current wording

In addition to using GAAP financial measurements to evaluate our operating results, we use Adjusted EBITDA, Net CAPEX, and Adjusted Free Cash Flow, which are non-GAAP financial measures. As such, we include in this Form 10-Q reconciliations to their most directly comparable GAAP financial measures. These reconciliations and descriptions of why we believe these measures provide useful information to investors, as well as a description of the limitations of these measures are included in "Reconciliation of non-GAAP Financial Measures."

Previous wording

Our condensed consolidated statements of operations for the three months ended September 30, 2024 and 2023 are presented below.

Current wording

Certain consolidated results of operations for the three months ended March 31, 2025 and 2024 are presented below.

Previous wording

Revenue: Total revenue decreased $3.4 million, or 0.6%, to $601.4 million for the three months ended September 30, 2024 from $604.8 million for the three months ended September 30, 2023. Leasing revenue decreased $11.2 million, or 2.4%, as compared to the same period in 2023, driven by a decrease of 30,821 total average units on rent, which was primarily driven by a decrease in portable storage units on rent. Delivery and installation revenues decreased $0.8 million, or 0.7%, due to decreased deliveries and returns. Rental unit sales increased $0.9 million, or 7.5%, and new unit sales increased $7.7 million, or 75.8%, primarily related to sales activity from a company we acquired in the middle of the third quarter of 2023.

Current wording

Revenue: Total revenue decreased $27.6 million, or 4.7%, to $559.6 million for the three months ended March 31, 2025 from $587.2 million for the three months ended March 31, 2024. Leasing revenue decreased $26.2 million, or 5.7%, as compared to the same period in 2024, driven by a decrease of 26,108 total average units on rent. Delivery and installation revenue decreased $11.7 million, or 11.7%, due to decreased deliveries and returns. Rental unit sales increased $1.3 million, or 10.6%, and new unit sales increased $8.9 million, or 66.2%.

Previous wording

Total average units on rent for the three months ended September 30, 2024 and 2023 were 217,629 and 248,450, respectively, representing a decrease of 30,821 units, or 12.4%. Portable storage average units on rent decreased by 27,551 units, or 18.3%, for the three months ended September 30, 2024 driven by lower demand in 2024. The lower demand was driven largely by decreased new construction project starts over the past two years as compared to higher activity levels experienced during 2021 and 2022 and less demand in the retail and wholesale trade customer segment. The average portable storage unit utilization rate during the three months ended September 30, 2024 was 58.1% as compared to 70.2% during the same period in 2023. Modular space average units on rent decreased 3,270 units, or 3.3%, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, which was also largely driven by decreased new construction project starts over the past two years as compared to higher activity levels experienced during 2021 and 2022. The average modular space utilization rate during the three months ended September 30, 2024 was 62.1% as compared to 63.9% during the same period in 2023.

Current wording

Total average units on rent for the three months ended March 31, 2025 and 2024 were 200,723 and 226,831, respectively, representing a decrease of 26,108 units, or 11.5%. Portable storage average units on rent decreased by 20,839 units, or 15.9%, for the three months ended March 31, 2025 driven by lower demand in 2025. Lower demand was driven by reduced new construction project starts. The average portable storage unit utilization rate during the three months ended March 31, 2025 was 52.6% as compared to 62.1% during the same period in 2024. Modular space average units on rent decreased 5,269 units, or 5.5%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The average modular space utilization rate during the three months ended March 31, 2025 was 59.3% as compared to 62.5% during the same period in 2024.

Previous wording

Modular space average monthly rental rates increased 6.1% year over year to $1,199 for the three months ended September 30, 2024. Increases were driven by a continuation of the long-term price optimization and VAPS penetration opportunities. Average portable storage monthly rental rates increased 9.5% year over year to $265 for the three months ended September 30, 2024 as a result of our price management tools, processes and benefits from increased VAPS penetration opportunities, as well as higher rates on the climate-controlled containers and refrigerated storage units acquired in 2023 and 2024. Total VAPS revenues, which are included in leasing revenues, increased $0.3 million, or 0.3%, to $100.2 million for the three months ended September 30, 2024 from $99.9 million for the three months ended September 30, 2023.

Current wording

Modular space average monthly rental rates increased 5.2% year over year to $1,209 for the three months ended March 31, 2025, driven by our long-term price optimization strategies and VAPS penetration opportunities. Average portable storage monthly rental rates increased 1.9% year over year to $267 for the three months ended March 31, 2025 as a result of our price management tools, VAPS penetration, and mix effects from higher rates on climate-controlled containers and refrigerated storage units. Total VAPS revenues, which are included in leasing revenue, were $96.3 million for both the three months ended March 31, 2025 and 2024.

Previous wording

Gross profit: Gross profit decreased $18.2 million, or 5.4%, to $321.5 million for the three months ended September 30, 2024 from $339.7 million for the three months ended September 30, 2023. The decrease in gross profit was a result of decreased delivery and installation gross profit of $10.5 million, increased depreciation expense of $9.3 million, and a $2.9 million decrease in leasing gross profit. The decrease was partially offset by a $4.5 million increase in new and rental unit sales gross profit. The decrease in leasing gross profit was primarily driven by lower demand in 2024. Cost of leasing and services increased by $1.4 million, or 0.8%, for the three months ended September 30, 2024 versus the three months ended September 30, 2023, driven by an increase in subcontractors costs of $7.7 million, or 11.5%, and an increase in labor costs of $0.8 million, or 1.1%. These increased costs were partially offset by a decrease in materials costs of $6.1 million, or 21.5%. Cost of sales increased by $4.1 million, or 35.1%, which is directionally in line with the 38.4% increase in sales revenues for the three months ended September 30, 2024.

Current wording

Gross profit: Gross profit decreased $16.5 million, or 5.2%, to $300.4 million for the three months ended March 31, 2025 from $316.9 million for the three months ended March 31, 2024. The decrease in gross profit was a result of a $11.9 million decrease in leasing gross profit and decreased delivery and installation gross profit of $7.7 million. The decrease was partially offset by a $2.1 million increase in new and rental unit sales gross profit. The decrease in leasing gross profit was primarily driven by lower demand in 2025. Cost of leasing and services decreased by $18.4 million, or 10.2%, for the three months ended March 31, 2025 versus the three months ended March 31, 2024, driven by a decrease in subcontractors costs of $4.8 million, or 8.5%, a decrease in labor costs of $7.5 million, or 10.3%, and a decrease in materials costs of $4.8 million, or 19.6% as we reduced variable costs to match demand. Cost of sales increased by $8.2 million, or 54.2%, which is directionally in line with the 39.2% increase in sales revenue for the three months ended March 31, 2025. Our resulting gross profit percentage was 53.7% and 54.0% for the three months ended March 31, 2025 and 2024, respectively.

Previous wording

SG&A: SG&A decreased $1.1 million, or 0.7%, to $150.9 million for the three months ended September 30, 2024, as compared to $152.0 million for the three months ended September 30, 2023. Employee SG&A excluding stock compensation decreased $9.7 million, or 15.4%, primarily as a result of decreased variable compensation expense, including management incentives, and lower employee headcount as a result of the cost-reduction plan implemented in June 2024. Service agreements and professional fees, excluding discrete expenses for certain one-time projects, decreased $5.6 million, or 24.4%, and our provision for credit losses, net of write offs, decreased $1.1 million, or 10.6%. These decreased costs were partially offset by a $8.0 million increase in discrete expenses for certain one-time projects, primarily legal and professional fees related to the proposed acquisition of McGrath, a $3.2 million increase in real estate and occupancy costs, a $1.1 million increase in marketing and advertising expense, and a $1.0 million increase in travel costs.

Current wording

Selling, general and administrative expense ("SG&A"): SG&A decreased $11.2 million, or 6.6%, to $157.1 million for the three months ended March 31, 2025, as compared to $168.3 million for the three months ended March 31, 2024. Employee SG&A excluding stock compensation decreased $2.4 million, or 3.4%, due to lower employee headcount. The decrease was further driven by a $9.9 million decrease in discrete expenses for certain one-time projects and a $6.2 million decrease in our provision for credit losses, net of write offs. These decreased costs were partially offset by a $5.2 million increase in travel costs associated with our bi-annual Company meeting, a $2.4 million, or 12.7%, increase in service agreements and professional fees, excluding discrete expenses for certain one-time projects, a $2.0 million increase in real estate and occupancy costs, and a $0.6 million increase in marketing and advertising expense.

Previous wording

Adjusted EBITDA: Adjusted EBITDA increased $1.4 million, or 1%, to $266.9 million for the three months ended September 30, 2024 from $265.5 million for the three months ended September 30, 2023. The increase was driven by a $4.5 million increase in new and used sales gross profit and decreased SG&A, excluding discrete costs, of $10.2 million, or 7.2%, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. The increase was partially offset by a $2.9 million decrease in leasing gross profit and decreased delivery and installation gross profit of $10.5 million.

Current wording

Adjusted EBITDA: Adjusted EBITDA decreased $19.2 million, or 8%, to $228.8 million for the three months ended March 31, 2025 from $248.0 million for the three months ended March 31, 2024. The decrease was driven by a $11.9 million decrease in leasing gross profit, decreased delivery and installation gross profit of $7.7 million, and increased SG&A, excluding discrete costs, of $2.1 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The decrease was partially offset by a $2.1 million increase in new and used sales gross profit.

Previous wording

Other depreciation and amortization: Other depreciation and amortization increased $5.3 million to $23.1 million for the three months ended September 30, 2024 as compared to $17.9 million for the three months ended September 30, 2023, primarily related to the amortization of the Mobile Mini tradename in 2024.

Current wording

Other depreciation and amortization: Other depreciation and amortization increased $5.2 million to $23.1 million for the three months ended March 31, 2025 as compared to $17.9 million for the three months ended March 31, 2024, primarily related to the amortization of the Mobile Mini tradename beginning in the third quarter of 2024.

Previous wording

Other expense (income), net: Other expense, net was $0.4 million for the three months ended September 30, 2024 as compared to other income, net of $8.3 million for the three months ended September 30, 2023. This change was primarily attributable to a gain on sale of fixed assets related to a real estate sale transaction during the three months ended September 30, 2023.

Current wording

Other expense, net: Other expense, net was $0.4 million for the three months ended March 31, 2025 as compared to $0.6 million for the three months ended March 31, 2024.

Previous wording

Interest expense, net: Interest expense, net increased $2.0 million, or 3.8%, to $55.8 million for the three months ended September 30, 2024 from $53.8 million for the three months ended September 30, 2023. The increase in interest expense was a result of higher overall weighted average interest rates as a result of increased benchmark rates and higher outstanding debt balances. See Note 9 to the condensed consolidated financial statements for further discussion of our debt.

Current wording

Interest expense, net: Interest expense, net increased $1.9 million, or 3.3%, to $58.5 million for the three months ended March 31, 2025 from $56.6 million for the three months ended March 31, 2024. The increase in interest expense was a result of higher overall weighted average interest rates as a result of increased benchmark rates. See Note 6 to the condensed consolidated financial statements for further discussion of our debt.

Previous wording

Income tax (benefit) expense: Income tax benefit was $20.6 million for the three months ended September 30, 2024 compared to income tax expense of $32.8 million for the three months ended September 30, 2023, a change of $53.3 million. The change was primarily driven by a decrease in income from continuing operations before income tax for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.

Current wording

Income tax expense: Income tax expense was $17.9 million for the three months ended March 31, 2025 compared to $17.1 million for the three months ended March 31, 2024, a change of $0.8 million. The increase was primarily driven by a discrete tax expense related to equity compensation for the three months ended March 31, 2025 as compared to a discrete tax benefit related to equity compensation for the three months ended March 31, 2024. This was offset by a decrease in income before income tax for the three months ended March 31, 2025.

Previous wording

•Costs to integrate acquired companies, including outside professional fees, non-capitalized costs associated with system integrations, non-lease branch and fleet relocation expenses, employee training costs, and other costs required to realize cost or revenue synergies.

Current wording

•Costs to integrate acquired companies, including outside professional fees, non-capitalized costs associated with system integrations, non-lease branch and fleet relocation expenses, employee relocation and training costs, and other costs required to realize cost or revenue synergies.

Previous wording

•Other expenses, including consulting expenses related to certain one-time projects, financing costs not classified as interest expense, and gains and losses on disposals of property, plant, and equipment.

Current wording

•Other expense, including consulting expenses related to certain one-time projects, financing costs not classified as interest expense, and gains and losses on disposals of property, plant, and equipment, and unrealized gains and losses on investments.

Previous wording

Our Chief Operating Decision Maker ("CODM") evaluates business performance utilizing Adjusted EBITDA as shown in the reconciliation of the Company’s consolidated income from continuing operations to Adjusted EBITDA below. Management believes that evaluating performance excluding such items is meaningful because it provides insight with respect to the intrinsic and ongoing operating results of the Company and captures the business performance inclusive of indirect costs.

Current wording

Our Chief Operating Decision Maker ("CODM") evaluates business performance utilizing Adjusted EBITDA as shown in the reconciliation of the Company’s consolidated net income to Adjusted EBITDA below. Management believes that evaluating performance excluding such items is meaningful because it provides insight with respect to the intrinsic and ongoing operating results of the Company and captures the business performance inclusive of indirect costs.

Previous wording

Because of these limitations, Adjusted EBITDA should not be considered as discretionary cash available to reinvest in the growth of our business or as a measure of cash that will be available to meet our obligations.

Current wording

Because of these limitations, Adjusted EBITDA should not be considered as discretionary cash available to reinvest in the growth of our business or as a measure of cash that will be available to meet our obligations. The following table provides reconciliations of net income to Adjusted EBITDA:

Previous wording

We define Net CAPEX as purchases of rental equipment and refurbishments and purchases of property, plant and equipment (collectively, "Total Capital Expenditures"), less proceeds from the sale of rental equipment and proceeds from the sale of property, plant and equipment (collectively, "Total Proceeds"), which are all included in cash flows from investing activities. Management believes that the presentation of Net CAPEX provides useful information regarding the net capital invested in our rental fleet and property, plant and equipment each year to assist in analyzing the performance of our business. As presented below, Net CAPEX includes amounts for the former UK Storage Solutions segment through January 31, 2023.

Current wording

We define Net CAPEX as purchases of rental equipment and refurbishments and purchases of property, plant and equipment (collectively, "Total Capital Expenditures"), less proceeds from the sale of rental equipment and proceeds from the sale of property, plant and equipment (collectively, "Total Proceeds"), which are all included in cash flows from investing activities. Management believes that the presentation of Net CAPEX provides useful information regarding the net capital invested in our rental fleet and property, plant and equipment each year to assist in analyzing the performance of our business. The following table provides reconciliations of Net CAPEX:

Previous wording

Free Cash Flow and Adjusted Free Cash Flow are non-GAAP measures. We define Free Cash Flow as net cash provided by operating activities, less purchases of, and proceeds from, rental equipment and refurbishments and property, plant and equipment, which are all included in cash flows from investing activities. We define Adjusted Free Cash Flow as Free Cash Flow excludingone-time, nonrecurring payments for the McGrath termination fee and transaction costs from terminated acquisitions. Management believes that the presentation of Free Cash Flow and Adjusted Free Cash Flow provides useful additional information concerning cash flow available to fund our capital allocation alternatives.

Current wording

We define Adjusted Free Cash Flow as net cash provided by operating activities; less purchases of rental equipment and property, plant and equipment and plus proceeds from sale of rental equipment and property, plant and equipment, which are all included in cash flows from investing activities; excluding one-time, nonrecurring payments for the McGrath termination fee and transaction costs from terminated acquisitions. Management believes that the presentation of Adjusted Free Cash Flow provides useful additional information concerning cash flow available to fund our capital allocation alternatives.

Previous wording

The following table provides a reconciliation of net cash (used in) provided by operating activities to Free Cash Flow.

Current wording

The following table provides a reconciliation of net cash provided by operating activities to Adjusted Free Cash Flow.

Previous wording

WillScot is a holding company that derives its operating cash flow from its operating subsidiaries. Our principal sources of liquidity include cash flows generated from operating activities of our subsidiaries, borrowings under our ABL Facility, and sales of debt securities. We have consistently accessed the debt capital markets both opportunistically and as necessary to support the growth of our business, desired leverage levels, and other capital allocation priorities. We believe we have ample liquidity in the ABL Facility and are generating substantial free cash flow, which together support both organic operations and other capital allocation priorities as they arise. We believe that our liquidity sources are sufficient to satisfy our anticipated operating, debt service and capital cash requirements over the next twelve months and thereafter for the foreseeable future.

Current wording

WillScot is a holding company that derives its operating cash flow from its operating subsidiaries. Our principal sources of liquidity include cash flows generated from operating activities of our subsidiaries, borrowings under our ABL Facility, and issuance of debt securities. We have consistently accessed the debt and equity capital markets both opportunistically and as necessary to support the growth of our business, desired leverage levels, and other capital allocation priorities. We believe we have ample liquidity in the ABL Facility and are generating substantial Adjusted Free Cash Flow, which together support both organic operations and other capital allocation priorities. We believe that our liquidity sources are sufficient to satisfy our anticipated operating, debt service, and capital cash requirements over the next twelve months and thereafter for the foreseeable future.

Previous wording

We continue to review available acquisition opportunities with the awareness that any such acquisition may require us to incur additional debt to finance the acquisition and/or to issue shares of our Common Stock or other equity securities as acquisition consideration or as part of an overall financing plan. In addition, we will continue to evaluate alternatives to optimize our capital structure, which could include the issuance or repurchase of additional unsecured and secured debt, equity securities and/or equity-linked securities. There can be no assurance as to the timing of any such issuance or repurchase. If we obtain additional capital by issuing equity, the interests of our existing stockholders will be diluted. If we incur additional indebtedness, that indebtedness may contain significant financial and other covenants that may significantly restrict our operations. Availability of financing and the associated terms are inherently dependent on the debt and equity capital markets and subject to change. From time to time, we may also seek to streamline our capital structure and improve our financial position through refinancing or restructuring our existing debt or retiring certain of our securities for cash or other consideration.

Current wording

We continuously review available acquisition opportunities with the awareness that any such acquisition may require us to incur additional debt to finance the acquisition and/or to issue shares of our Common Stock or other equity securities as acquisition consideration or as part of an overall financing plan. In addition, we continue to evaluate alternatives to optimize our capital structure, which could include the issuance or repurchase of additional unsecured and secured debt, equity securities and/or equity-linked securities. There can be no assurance as to the timing of any such issuance or repurchase. If we obtain additional capital by issuing equity, the interests of our existing stockholders will be diluted. If we incur additional indebtedness, that indebtedness may contain significant financial and other covenants that may significantly restrict our operations. Availability of financing and the associated terms are inherently dependent on the debt and equity capital markets and subject to change. From time to time, we may also seek to streamline our capital structure and improve our financial position through refinancing or restructuring our existing debt or retiring certain of our securities for cash or other consideration.

Previous wording

Our revolving credit facility provides an aggregate principal amount of up to $3.7 billion, consisting of: (i) a senior secured asset-based US dollar revolving credit facility in the aggregate principal amount of $3.3 billion (the “US Facility”) and (ii) a $400.0 million senior secured asset-based multicurrency revolving credit facility (the "Multicurrency Facility," and together with the US Facility, the “ABL Facility”). Borrowing availability under the ABL Facility is equal to the lesser of $3.7 billion and the applicable borrowing bases. The borrowing bases are a function of, among other things, the value of the assets in the relevant collateral pool, of which our rental equipment represents the largest component. At September 30, 2024, wehad $1.7 billionof available borrowing capacity under the ABL Facility.

Current wording

Our revolving credit facility provides an aggregate principal amount of up to $3.7 billion, consisting of: (i) a senior secured asset-based US dollar revolving credit facility in the aggregate principal amount of $3.3 billion (the “US Facility”) and (ii) a $400.0 million senior secured asset-based multicurrency revolving credit facility (the "Multicurrency Facility," and together with the US Facility, the “ABL Facility”). Borrowing availability under the ABL Facility is equal to the lesser of $3.7 billion and the applicable borrowing bases. The borrowing bases are a function of, among other considerations, the value of the assets in the relevant collateral pool, of which our rental equipment represents the largest component. At March 31, 2025, we had $1.6 billion of available borrowing capacity under the ABL Facility.

Previous wording

Cash Flow Comparison of the Nine Months Ended September 30, 2024 and 2023

Current wording

Comparison of the Three Months Ended March 31, 2025 and 2024

Previous wording

Net cash provided by operating activities for the nine months ended September 30, 2024 was $382.7 million as compared to $541.9 million for the nine months ended September 30, 2023, a decrease of $159.2 million. The decrease in net cash provided by operating activities was primarily due to the payment of $212.5 million for the McGrath termination fee and transaction costs from terminated acquisitions during the nine months ended September 30, 2024.

Current wording

Net cash provided by operating activities for the three months ended March 31, 2025 was $206.6 million as compared to $208.7 million for the three months ended March 31, 2024, a decrease of $2.0 million. The decrease in net cash provided by operating activities was primarily due to a $22.2 million decrease in net income, adjusted for non-cash items, partially offset by an increase of $20.1 million in the net movements of the operating assets and liabilities during the three months ended March 31, 2025.

Previous wording

Net cash used in financing activities for the nine months ended September 30, 2024 was $113.2 million as compared to $337.1 million for the nine months ended September 30, 2023, a decrease of $223.8 million. The decrease was primarily due to a $547.8 million decrease in cash used for the repurchase of common stock in the nine months ended September 30, 2024. We paused share repurchases in the fourth quarter of 2023 as acquisition discussions advanced with McGrath and resumed repurchasing shares of our Common Stock in April 2024.

Current wording

Net cash used in financing activities for the three months ended March 31, 2025 was $139.9 million as compared to $95.6 million for the three months ended March 31, 2024, an increase of $44.3 million. The increase was primarily due to a $22.0 million increase in cash used for the repurchase of common stock, a $12.9 million increase in cash used to pay dividends, and a $10.8 million increase in repayments of borrowings, net of receipts from borrowings in the three months ended March 31, 2025.

Previous wording

The Company has outstanding debt related to its ABL Facility, 2025 Secured Notes, 2028 Secured Notes, 2029 Secured Notes, 2031 Secured Notes, and finance leases totaling $3.6 billion as of September 30, 2024, $547.6 million of which is obligated to be repaid within the next twelve months. We have the intent and believe we have the ability to refinance the $526.5 million carrying value of the 2025 Secured Notes on a long-term basis as demonstrated by the forecasted available capacity under the ABL Facility, among other refinancing alternatives to be considered opportunistically. Refer to Note 9 for further information regarding outstanding debt.

Current wording

The Company has outstanding debt related to its ABL Facility, 2028 Secured Notes, 2029 Secured Notes, 2030 Secured Notes, 2031 Secured Notes, and finance leases totaling $3.6 billion as of March 31, 2025, $25.4 million of which is obligated to be repaid within the next twelve months. Refer to Note 6 for further information regarding outstanding debt.

Previous wording

The Company has commitments for future minimum rental payments relating to operating leases, which are primarily for real estate. As of September 30, 2024, the Company had lease obligations of $300.8 million, with $71.5 million payable within the next twelve months.

Current wording

The Company has commitments for future minimum rental payments relating to operating leases, which are primarily for real estate. As of March 31, 2025, the Company had lease obligations of $299.9 million, with $72.8 million payable within the next twelve months.

Previous wording

In addition to the cash requirements described above, the Company has a share repurchase program authorized by the Board of Directors, which allows the Company to repurchase up to $1.0 billion of outstanding shares of Common Stock. This program does not obligate the Company to repurchase any specific amount of shares. As of September 30, 2024, $951.9 million of the approved share repurchase amount remained available.

Current wording

In addition to the cash requirements described above, the Company has a Share Repurchase program authorized by the Board of Directors, which allows the Company to repurchase up to $1.0 billion of outstanding shares of Common Stock. This program does not obligate the Company to repurchase any specific amount of shares. As of March 31, 2025, $789.8 million of the authorization for future repurchases of our common stock remained available.

Previous wording

Our discussion and analysis of our financial condition, results of operations, liquidity and capital resources is based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. GAAP requires that we make estimates and judgments that affect the reported amount of assets, liabilities, revenue, expenses and the related disclosure of contingent assets and liabilities. We base these estimates on historical experience and on various other assumptions that we consider reasonable under the circumstances and reevaluate our estimates and judgments as appropriate. The actual results experienced by us may differ materially and adversely from our estimates. For acomplete discussion of our significant critical accounting estimates, see the “Critical Accounting Estimates” section in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Annual Report on Form 10-K").

Current wording

Our discussion and analysis of our financial condition, results of operations, liquidity and capital resources is based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. GAAP requires that we make estimates and judgments that affect the reported amount of assets, liabilities, revenue, expenses, and the related disclosure of contingent assets and liabilities. We base these estimates on historical experience and on various other assumptions that we consider reasonable under the circumstances and reevaluate our estimates and judgments as appropriate. Our actual results may differ materially and adversely from our estimates. For acomplete discussion of our significant critical accounting estimates, see the “Critical Accounting Estimates” section in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Annual Report on Form 10-K"). There were no significant changes to our critical accounting estimates during the three months ended March 31, 2025.

Previous wording

Refer to Part I, Item 1, Note 1 of the notes to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for our assessment of recently issued and adopted accounting standards.

Current wording

Refer to Part I, Item 1, Note 1 of the notes to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for our assessment of recently issued accounting standards.

Previous wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Act of 1934, as amended. The words “estimates,” “expects,” “anticipates,” “believes,” “forecasts,” “plans,” “intends,” “may,” “will,” “should,” “shall,” “outlook,” “guidance” and variations of these words and similar expressions identify forward-looking statements, which are generally not historical in nature and relate to expectations for future financial performance or business strategies or objectives. Forward-looking statements are subject to a number of risks, uncertainties, assumptions and other important factors, many of which are outside our control, which could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Although WillScot believes that these forward-looking statements are based on reasonable assumptions, it can give no assurance that any such forward-looking statement will materialize. Important factors that may affect actual results or outcomes include, among others:

Current wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Act of 1934, as amended. The words “estimates,” “expects,” “anticipates,” “believes,” “forecasts,” “plans,” “intends,” “may,” “will,” “should,” “shall,” “outlook,” “guidance” and variations of these words and similar expressions identify forward-looking statements, which are generally not historical in nature and relate to expectations for future financial performance or business strategies or objectives. Forward-looking statements are subject to a number of risks, uncertainties, assumptions and other important factors, many of which are outside our control, which could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Although WillScot believes that these forward-looking statements are based on reasonable assumptions, the Company can give no assurance that any such forward-looking statement will materialize. Important factors that may affect actual results or outcomes include, among others: