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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 June 30, 2019
OR
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: 001-37552 
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=13038762&doc=11
WILLSCOT CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 82-3430194 
(State or other jurisdiction of incorporation) (I.R.S. Employer Identification No.) 
901 S. Bond Street, #600
Baltimore, Maryland 21231
(Address, including zip code, of principal executive offices)
(410) 931-6000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stock, par value $0.0001 per shareWSC
The Nasdaq Capital Market
Warrants to purchase Class A common stock(1)WSCWWOTC Markets Group Inc.
Warrants to purchase Class A common stock(2)WSCTWOTC Markets Group Inc.
(1) Issued in connection with the initial public offering of Double Eagle Acquisition Corp., the registrant’s legal predecessor company, in September 2015, which are exercisable for one-half of one share of the registrant’s Class A common stock for an exercise price of $5.75.
(2) Issued in connection with the registrant’s acquisition of Modular Space Holdings, Inc. in August 2018, which are exercisable for one share of the registrant’s Class A common stock at an exercise price of $15.50 per share.
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 and posted pursuant to Rule 405 of Regulations 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, 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
1



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 Act). Yes No
Shares of Class A common stock, par value $0.0001 per share, outstanding: 108,699,126 shares at July 25, 2019.
Shares of Class B common stock, par value $0.0001 per share, outstanding: 8,024,419 shares at July 25, 2019.



2



WILLSCOT CORPORATION
Quarterly Report on Form 10-Q
Table of Contents

PART I Financial Information

3



PART I
ITEM 1. Financial Statements
WillScot Corporation
Condensed Consolidated Balance Sheets
(in thousands, except share data)
June 30, 2019 (unaudited) December 31, 2018
Assets 
Cash and cash equivalents $5,490 $8,958 
Trade receivables, net of allowances for doubtful accounts at June 30, 2019 and December 31, 2018 of $13,125 and $9,340, respectively
242,730 206,502 
Inventories 15,215 16,218 
Prepaid expenses and other current assets 22,678 21,828 
Assets held for sale 12,906 2,841 
Total current assets 299,019 256,347 
Rental equipment, net 1,953,857 1,929,290 
Property, plant and equipment, net 164,759 183,750 
Goodwill 245,828 247,017 
Intangible assets, net 128,456 131,801 
Other non-current assets 4,357 4,280 
Total long-term assets 2,497,257 2,496,138 
Total assets $2,796,276 $2,752,485 
Liabilities and equity 
Accounts payable $96,031 $90,353 
Accrued liabilities 90,612 84,696 
Accrued interest 16,145 20,237 
Deferred revenue and customer deposits 83,081 71,778 
Current portion of long-term debt 2,026 1,959 
Total current liabilities 287,895 269,023 
Long-term debt 1,709,523 1,674,540 
Deferred tax liabilities 66,594 67,384 
Deferred revenue and customer deposits 10,210 7,723 
Other non-current liabilities 37,584 31,618 
Long-term liabilities 1,823,911 1,781,265 
Total liabilities 2,111,806 2,050,288 
Commitments and contingencies (see Note 15) 
Class A common stock: $0.0001 par, 400,000,000 shares authorized at June 30, 2019 and December 31, 2018; 108,699,126 and 108,508,997 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively
11 11 
Class B common stock: $0.0001 par, 100,000,000 shares authorized at June 30, 2019 and December 31, 2018; 8,024,419 shares issued and outstanding at June 30, 2019 and December 31, 2018
1 1 
Additional paid-in-capital 2,392,085 2,389,548 
Accumulated other comprehensive loss (65,910)(68,026)
Accumulated deficit (1,704,188)(1,683,319)
Total shareholders' equity 621,999 638,215 
Non-controlling interest 62,471 63,982 
Total equity 684,470 702,197 
Total liabilities and equity $2,796,276 $2,752,485 
See the accompanying notes which are an integral part of these condensed consolidated financial statements.
4



WillScot Corporation
Condensed Consolidated Statements of Operations (Unaudited)
Three Months Ended June 30, Six Months Ended June 30, 
(in thousands, except share and per share data)
2019201820192018
Revenues: 
Leasing and services revenue: 
Modular leasing $187,509 $101,249 $365,731 $198,511 
Modular delivery and installation 56,479 31,413 106,760 57,663 
Sales revenue: 
New units 11,624 5,236 26,528 12,664 
Rental units 10,513 2,435 22,114 6,246 
Total revenues 266,125 140,333 521,133 275,084 
Costs: 
Costs of leasing and services: 
Modular leasing 55,073 27,129 102,308 54,291 
Modular delivery and installation 48,468 30,127 91,811 55,648 
Costs of sales: 
New units 7,999 3,704 18,877 8,691 
Rental units 6,721 1,263 14,516 3,578 
Depreciation of rental equipment 43,968 23,470 85,071 47,315 
Gross profit 103,896 54,640 208,550 105,561 
Expenses: 
Selling, general and administrative 71,623 47,734 145,108 92,948 
Other depreciation and amortization 3,167 1,570 6,171 4,006 
Impairment losses on long-lived assets 2,786  5,076  
Restructuring costs 1,150 449 7,103 1,077 
Currency (gains) losses, net (354)572 (670)1,596 
Other income, net (1,289)(1,574)(2,240)(4,419)
Operating income 26,813 5,889 48,002 10,353 
Interest expense 32,524 12,155 64,496 23,874 
Loss on extinguishment of debt 7,244  7,244  
Loss from operations before income tax (12,955)(6,266)(23,738)(13,521)
Income tax benefit (1,180)(6,645)(802)(7,065)
Net (loss) income (11,775)379 (22,936)(6,456)
Net (loss) income attributable to non-controlling interest, net of tax (862)143 (1,722)(505)
Net (loss) income attributable to WillScot $(10,913)$236 $(21,214)$(5,951)
Net (loss) income per share attributable to WillScot
Basic $(0.10)$0.00 $(0.20)$(0.08)
Diluted $(0.10)$0.00 $(0.20)$(0.08)
Weighted average shares 
Basic 108,693,924 78,432,274 108,609,068 77,814,456 
Diluted 108,693,924 82,180,086 108,609,068 77,814,456 
See the accompanying notes which are an integral part of these condensed consolidated financial statements.
5



WillScot Corporation
Condensed Consolidated Statements of Comprehensive Loss (Unaudited)
Three Months Ended June 30, Six Months Ended June 30, 
(in thousands)
2019201820192018
Net (loss) income $(11,775)$379 $(22,936)$(6,456)
Other comprehensive income (loss): 
Foreign currency translation adjustment, net of income tax expense (benefit) of $0, $(93), $0 and $(241) for the three and six months ended June 30, 2019 and 2018, respectively
4,300 (2,619)

8,415 (2,380)
Net loss on derivatives, net of income tax benefit of $1,190, $0, $1,863 and $0 for the three and six months ended June 30, 2019 and 2018, respectively
(3,887) (6,088) 
Comprehensive loss (11,362)(2,240)(20,609)(8,836)
Comprehensive loss attributable to non-controlling interest (817)(150)

(1,511)(774)
Total comprehensive loss attributable to WillScot $(10,545)$(2,090)$(19,098)$(8,062)
See the accompanying notes which are an integral part of these condensed consolidated financial statements.
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WillScot Corporation
Condensed Consolidated Statements of Changes in Equity (Unaudited)

Six Months Ended June 30, 2019
Class A Common Stock Class B Common Stock Additional Paid-in-CapitalAccumulated Other Comprehensive Income Accumulated Deficit Total Shareholders' Equity Non-Controlling InterestTotal Equity 
(in thousands)Shares Amount Shares Amount 
Balance at December 31, 2018108,509 $11 8,024 $1 $2,389,548 $(68,026)$(1,683,319)$638,215 $63,982 $702,197 
Net loss— — — — — — (10,301)(10,301)(860)(11,161)
Other comprehensive income— — — — — 1,748 — 1,748 166 1,914 
Adoption of ASC 606—  —    345 345  345 
Stock-based compensation184  — — 636 — — 636 — 636 
Balance at March 31, 2019108,693 11 8,024 1 2,390,184 (66,278)(1,693,275)630,643 63,288 693,931 
Net loss— — — — — — (10,913)(10,913)(862)(11,775)
Other comprehensive income— — — — — 368 — 368 45 413 
Stock-based compensation6  — — 1,901 — — 1,901 — 1,901 
Balance at June 30, 2019108,699 $11 8,024 $1 $2,392,085 $(65,910)$(1,704,188)$621,999 $62,471 $684,470 

Six Months Ended June 30, 2018
Class A Common Stock Class B Common Stock Additional Paid-in-CapitalAccumulated Other Comprehensive Income Accumulated Deficit Total Shareholders' Equity Non-Controlling InterestTotal Equity 
(in thousands)Shares Amount Shares Amount 
Balance at December 31, 201784,645 $8 8,024 $1 $2,121,926 $(49,497)$(1,636,819)$435,619 $48,931 $484,550 
Net loss— — — — — — (6,187)(6,187)(648)(6,835)
Other comprehensive income— — — — — 239 — 239 24 263 
Adoption of ASU 2018-02— — — — — (2,540)2,540  —  
Stock-based compensation  — — 121 — — 121 — 121 
Balance at March 31, 201884,645 8 8,024 1 2,122,047 (51,798)(1,640,466)429,792 48,307 478,099 
Net loss— — — — — — 236 236 143 379 
Other comprehensive loss— — — — — (2,619)— (2,619)(293)(2,912)
Stock-based compensation  — — 1,054 — — 1,054 — 1,054 
Balance at June 30, 201884,645 $8 8,024 $1 $2,123,101 $(54,417)$(1,640,230)$428,463 $48,157 $476,620 

See the accompanying notes which are an integral part of these condensed consolidated financial statements.
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WillScot Corporation
Condensed Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended June 30, 
(in thousands)
20192018
Operating activities: 
Net loss$(22,936)$(6,456)
Adjustments to reconcile net income to net cash provided by operating activities: 
Depreciation and amortization 92,477 51,941 
Provision for doubtful accounts 6,297 2,282 
Impairment losses on long-lived assets 5,076  
Gain on sale of rental equipment and other property, plant and equipment (5,359)(7,429)
Amortization of debt discounts and debt issuance costs 5,767 2,522 
Loss on extinguishment of debt 7,244  
Stock-based compensation expense 3,191 1,175 
Deferred income tax benefit (1,190)(7,066)
Unrealized currency (gains) losses (624)1,378 
Changes in operating assets and liabilities, net of effect of businesses acquired: 
Trade receivables (44,184)(11,624)
Inventories 1,039 442 
Prepaid and other assets (720)(282)
Accrued interest  (4,092)(909)
Accounts payable and other accrued liabilities 4,369 (11,841)
Deferred revenue and customer deposits 13,699 4,667 
Net cash provided by operating activities 60,054 18,800 
Investing activities: 
Acquisition of a business  (24,006)
Proceeds from sale of rental equipment 23,083 12,033 
Purchase of rental equipment and refurbishments (113,088)(64,763)
Proceeds from the sale of property, plant and equipment 8,891 681 
Purchase of property, plant and equipment (3,899)(1,616)
Net cash used in investing activities (85,013)(77,671)
Financing activities: 
Receipts from borrowings 461,203 61,792 
Payment of financing costs (2,686) 
Repayment of borrowings (430,199)(3,770)
Principal payments on capital lease obligations (61)(59)
Withholding taxes paid on behalf of employees on net settled stock-based awards (654) 
Payment of make-whole premium on Unsecured Notes redemption (6,252) 
Net cash provided by financing activities 21,351 57,963 
Effect of exchange rate changes on cash and cash equivalents 140 (96)
Net change in cash and cash equivalents(3,468)(1,004)
Cash and cash equivalents at the beginning of the period8,958 9,185 
Cash and cash equivalents at the end of the period$5,490 $8,181 
Supplemental cash flow information: 
Interest paid $65,023 $22,004 
Income taxes paid, net $355 $1,000 
Capital expenditures accrued or payable $24,348 $16,828 
See the accompanying notes which are an integral part of these condensed consolidated financial statements.
8



WillScot Corporation
Notes to the Condensed Consolidated Financial Statements (Unaudited)
NOTE 1 - Summary of Significant Accounting Policies
Organization and Nature of Operations
WillScot Corporation (“WillScot” and, together with its subsidiaries, the “Company”) is a leading provider of modular space and portable storage solutions in the United States (“US”), Canada and Mexico. The Company leases, sells, delivers and installs mobile offices, modular buildings and storage products through an integrated network of branch locations that spans North America.
WillScot, whose Class A common shares are listed on the Nasdaq Capital Market (Nasdaq: WSC), serves as the holding company for the Williams Scotsman family of companies. All of the Company’s assets and operations are owned through Williams Scotsman Holdings Corp. (“WS Holdings”). WillScot operates and owns 91.0% of WS Holdings, and Sapphire Holding S.à r.l. (“Sapphire”), an affiliate of TDR Capital LLP (“TDR Capital”), owns the remaining 9.0%.
WillScot was incorporated as a Cayman Islands exempt company under the name Double Eagle Acquisition Corporation ("Double Eagle") on June 26, 2015. Prior to November 29, 2017, Double Eagle was a Nasdaq-listed special purpose acquisition company formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination. On November 29, 2017 Double Eagle indirectly acquired Williams Scotsman International, Inc. (“WSII”) from Algeco Scotsman Global S.à r.l. (together with its subsidiaries, the “Algeco Group”), which is majority owned by an investment fund managed by TDR Capital. As part of the transaction (the “Business Combination”), Double Eagle domesticated to Delaware and changed its name to WillScot Corporation.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and notes required by accounting principles generally accepted in the US (“GAAP”) for complete financial statements. The accompanying unaudited condensed consolidated financial statements contain all adjustments, which are of a normal and recurring nature, necessary to present fairly the financial position, the results of operations and cash flows for the interim periods presented.
The results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the full year. For further information, refer to the consolidated financial statements and notes included in WillScot's Annual Report on Form 10-K for the year ended December 31, 2018.
Principles of Consolidation
The unaudited condensed consolidated financial statements comprise the financial statements of WillScot and its subsidiaries that it controls due to ownership of a majority voting interest. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the Company. All intercompany balances and transactions are eliminated.
Recently Issued and Adopted Accounting Standards
The Company qualifies as an emerging growth company (“EGC”) as defined under the Jumpstart Our Business Startups Act (the “JOBS Act”). Using exemptions provided under the JOBS Act provided to EGCs, the Company has elected to defer compliance with new or revised financial accounting standards until it is required to comply with such standards. WillScot will be deemed to be a large accelerated filer as of December 31, 2019.
Recently Issued Accounting Standards
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326), which prescribes that financial assets (or a group of financial assets) should be measured at amortized cost basis to be presented at the net amount expected to be collected. Credit losses relating to these financial assets should be recorded through an allowance for credit losses. The new standard is effective for the Company for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. The Company continues to evaluate the impacts of adopting the standard on the financial statements and will adopt the standard within the required adoption period.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASC 842"). This guidance revises existing practice related to accounting for leases under ASC Topic 840, Leases (“ASC 840”) for both lessees and lessors. The new guidance establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and lease liability on the balance sheet for all leases with terms longer than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This guidance also expands the requirements for lessees to record leases embedded in other arrangements and the required quantitative and qualitative disclosures surrounding leases. Accounting guidance for lessors is largely unchanged. This guidance is effective for non-public entities for fiscal years beginning after December 15, 2019 and interim periods within those annual periods using a modified retrospective transition approach. Early adoption is permitted for all entities. However, based on WillScot's expectation that it
9



will cease to be an EGC as of December 31, 2019, the Company plans to adopt the new standard no later than in the fourth quarter of 2019.
The Company plans to take advantage of the transition package of practical expedients permitted within ASC 842 which allows the Company not to reassess (i) whether any expired or existing lease contracts are or contain leases, (ii) the historical lease classification for any expired or existing leases and (iii) initial direct costs for any existing leases. The Company is in the process of assessing the potential impact this guidance may have on its financial results, including which of its existing lease arrangements will be impacted by the new guidance and whether other arrangements that are not currently classified as leases may become subject to the guidance. Additionally, the Company is finalizing the implementation of a lease management system to assist in the accounting and is implementing additional changes to its processes and internal controls to ensure the new reporting and disclosure requirements are met upon adoption.
Additionally, as discussed in Note 3, most of the Company's equipment rental revenues will be accounted for under the current lease accounting standard, ASC 840, until the adoption of the new lease accounting standard ASC 842. The Company is continuing to evaluate the impact of adopting ASC 842 on the Company's accounting for equipment rental revenue.
Recently Adopted Accounting Standards
From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date.
In August 2018 the FASB issued ASU 2018-13, Fair Value Measurement Topic 820 ("ASU 2018-13"). This guidance modifies the disclosure requirements for fair value measurements by removing the requirements to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for the timing of transfers between levels of the fair value hierarchy, and the valuation processes for Level 3 fair value measurements. ASU 2018-13 also adds requirements to disclose the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period, as well as requires the range and weighted average of significant unobservable inputs used in developing Level 3 fair value measurements. The guidance is effective for the Company for annual reporting periods and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted for all entities. The Company elected to adopt this guidance on a retrospective basis with no material impact to the financial statements as of June 30, 2019.
In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other - Internal-Use Software (Subtopic 350-40) ("ASU 2018-15"). This guidance clarifies the accounting for implementation costs of a hosting arrangement that is a service contract, to align the requirements for capitalizing implementation costs for hosting arrangements, regardless of whether they convey a license to the hosted software. The guidance is effective for the Company for annual reporting periods beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2021. Early adoption is permitted, including adoption in any interim period, for all entities. The Company elected to adopt this guidance on a prospective basis with no material impact to the financial statements as of June 30, 2019.

NOTE 2 - Acquisitions and Assets Held for Sale
ModSpace Acquisition
On August 15, 2018, the Company acquired Modular Space Holdings, Inc. ("ModSpace"), a privately-owned national provider of office trailers, portable storage units and modular buildings (the "Business Combination"). The acquisition was consummated by merging a special purpose subsidiary of the Company with and into ModSpace, with ModSpace surviving the merger as a subsidiary of WSII.
Purchase Price
The aggregate purchase price for ModSpace was $1.2 billion and consisted of (i) $1.1 billion in cash, (ii) 6,458,229 shares of WillScot's Class A common stock (the "Stock Consideration") with a fair market value of $95.8 million and (iii) warrants to purchase an aggregate of 10,000,000 shares of WillScot’s Class A common stock at an exercise price of $15.50 per share (the "2018 Warrants") with a fair market value of $52.3 million, and (iv) a working capital adjustment of $4.7 million.
The acquisition was funded by the net proceeds of WillScot's issuance of 9,200,000 shares of Class A common stock, the net proceeds of WSII’s issuance of $300.0 million in senior secured notes and $200.0 million in senior unsecured notes (see Note 8), and borrowings under the ABL Facility (see Note 8).
As of the date of acquisition, August 15, 2018, the fair market values of the Stock Consideration and 2018 Warrants were $14.83 per share and $5.23 per warrant, respectively, with the warrant values determined using a Black-Scholes valuation model. The fair market value of the Class A shares was determined utilizing the $15.78 per share closing price of the Company's shares on August 15, 2018, discounted by 6.0%, to reflect a lack of marketability based on the lock-up restrictions contemplated by the merger agreement.
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The estimated fair values of the Stock Consideration and 2018 Warrants are Level 3 fair value measurements. The fair value of each share and warrant was estimated using the Black-Scholes model with the following assumptions: expected dividend yield, expected stock price volatility, weighted average risk-free interest rate, the average expected term of the lock up period on the shares, and the weighted average expected term of the warrants. The volatility assumption used in the Black-Scholes model is derived from the historical daily change in the market price of the Company's common stock, as well as the historical daily changes in the market price of its peer group, based on weighting, as determined by the Company, and over a time period equivalent to the lock-up restriction (for the shares) and the warrant term. The risk-free interest rate used in the Black-Scholes model is based on the implied US Treasury bill yield curve at the date of grant with a remaining term equal to the Company’s expected term assumption. The Company has never declared or paid a cash dividend on common shares. The following table summarizes the key inputs utilized to determine the fair value of the Stock Consideration and 2018 Warrants included within the purchase price of ModSpace.
Stock Consideration fair value inputs 2018 Warrants fair value inputs 
Expected volatility 28.6 %35.0 %
Risk-free rate of interest 2.2 %2.7 %
Dividend yield  % %
Expected life (years) 0.5 4.3 
Opening Balance Sheet
The purchase price of ModSpace was assigned to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition, August 15, 2018. The Company estimated the fair values based on independent valuations, discounted cash flow analyses, quoted market prices, contributory asset charges, and estimates made by management. The final assignment of the fair value of the ModSpace acquisition, including the final assignment of goodwill to the Company's reporting units was not complete as of June 30, 2019, but will be finalized within the allowable one year measurement period. The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed as of the acquisition date, August 15, 2018 and the adjustments made to these balances during the six months ended June 30, 2019.
(in thousands)Balance at December 31, 2018AdjustmentsBalance at June 30, 2019
Trade receivables, net (a)$81,320 $(2,296)$79,024 
Prepaid expenses and other current assets17,342 305 17,647 
Inventories4,757  4,757 
Rental equipment853,986 (321)853,665 
Property, plant and equipment110,413 4,388 114,801 
Intangible assets:
 Favorable leases (b)3,976  3,976 
Trade name (b)3,000  3,000 
Deferred tax assets, net1,855  1,855 
Total identifiable assets acquired$1,076,649 $2,076 $1,078,725 
Accrued liabilities$31,551 $(793)$30,758 
Accounts payable37,678 323 38,001 
Deferred revenue and customer deposits15,938  15,938 
Total liabilities assumed$85,167 $(470)$84,697 
Total goodwill (c)$215,764 $(2,547)$213,217 
(a) The fair value of accounts receivable was $79.0 million and the gross contractual amount was $86.5 million. The Company estimated that $7.5 million is uncollectible.
(b) The trade name has an estimated useful life of 3 years. The favorable lease assets have an estimated useful life equivalent to the term of the lease.
(c) The goodwill is reflective of ModSpace’s going concern value and operational synergies that the Company expects to achieve that would not be available to other market participants. The goodwill represented on the balance sheet is not deductible for income tax purposes. The goodwill is assigned to the Modular – US and Modular – Other North America segments, defined in Note 16, in the amounts of $178.3 million and $34.9 million, respectively.

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Pro Forma Information  
The pro forma information below has been prepared using the purchase method of accounting, giving effect to the ModSpace acquisition as if it had been completed on January 1, 2018. The pro forma information is not necessarily indicative of the Company’s results of operations had the acquisition been completed on the above date, nor is it necessarily indicative of the Company’s future results. The pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the acquisition and also does not reflect additional revenue opportunities following the acquisition. The tables below present unaudited pro forma consolidated statements of operations information as if ModSpace had been included in the Company’s consolidated results for the six months ended June 30, 2018:
(in thousands) Six Months Ended
June 30, 2018 
WillScot revenues $275,084 
ModSpace revenues 230,917 
Pro forma revenues $506,001 
WillScot pre-tax loss $(13,521)
ModSpace pre-tax income 4,004 
Pre-tax loss before pro forma adjustments (9,517)
Pro forma adjustments to combined pre-tax loss: 
Impact of fair value mark-ups/useful life changes on depreciation (a) (6,579)
Intangible asset amortization (b) (500)
Interest expense (c) (32,871)
Elimination of ModSpace interest (d) 15,933 
Pro forma pre-tax loss (e) (33,534)
Income tax benefit (f) (17,522)
Pro forma net loss  $(16,012)
(a) Depreciation of rental equipment and non-rental depreciation were adjusted for the fair value mark-ups of equipment acquired in the ModSpace acquisition. The useful lives assigned did not change significantly from the useful lives used by ModSpace.
(b) Amortization of the trade name acquired in ModSpace acquisition.
(c) In connection with the ModSpace acquisition, the Company drew an incremental $419.0 million on the ABL Facility, as defined in Note 8, and issued $300.0 million of secured notes and $200.0 million of unsecured notes. The weighted average interest rate for the aforementioned borrowings was 6.54%. Interest expense includes amortization of related deferred financing fees on debt incurred in conjunction with ModSpace acquisition.
(d) Interest on ModSpace historical debt was eliminated.
(e) Pro forma pre-tax loss includes $1.1 million of restructuring expense and $7.4 million of integration costs incurred by WillScot for the six months ended June 30, 2018.
(f) The pro forma tax rate applied to the ModSpace pre-tax loss is the same as the WillScot effective rate for the period.
Transaction and Integration Costs
The Company incurred $8.2 million and $18.4 million in integration costs within selling, general and administrative ("SG&A") expenses for the three and six months ended June 30, 2019, respectively, related to the ModSpace acquisition. The Company incurred $4.8 million and $7.4 million in integration costs for the three and six months ended June 30, 2018, respectively, related to the acquisitions of Acton Mobile Holdings LLC (“Acton”) and Onsite Space LLC (d/b/a Tyson Onsite (“Tyson”)).
The Company incurred no transaction costs for the three and six months ended June 30, 2019. The Company incurred $4.1 million in transaction costs for both the three and six months ended June 30, 2018.
Assets Held for Sale
In connection with the integration of ModSpace, during the six months ended June 30, 2019, the Company reclassified eight legacy ModSpace branch facilities, from property, plant and equipment to held for sale, in addition to the three held for sale properties that were recognized at December 31, 2018. During the six months ended June 30, 2019, an impairment of $2.6 million was recorded related to these properties and two of these properties were sold for net cash proceeds of $8.6 million with no material gain or loss.
The fair value of the assets held for sale was determined using valuations from third party brokers, which were based on current sales prices for comparable assets in the market, a Level 2 measurement.


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NOTE 3 - Revenue
Adoption of ASU 2014-09
On January 1, 2019, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASC 606") as well as subsequent updates using the modified retrospective method applied to those contracts that were not completed as of January 1, 2019. Results for reporting periods beginning after January 1, 2019 are presented under the guidance required by ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historical accounting under ASC 605, Revenue Recognition ("ASC 605"). The implementation of ASC 606 did not have a material impact on the Company’s financial results for the period ending June 30, 2019.
Revenue Recognition Policy
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.
Modular Leasing and Services Revenue
The majority of revenue (69% for both the three and six months ended June 30, 2019, and 70% for both the three and six months ending June 30, 2018) is generated by rental income subject to the guidance of ASC 840. The remaining revenue is generated by performance obligations in contracts with customers for services or sale of units subject to the guidance in ASC 606 or ASC 605 for 2019 and 2018, respectively.
Leasing Revenue (ASC 840)
Income from operating leases is recognized on a straight-line basis over the lease term. The Company's lease arrangements typically include multiple lease and non-lease components. Examples of lease components include, but are not limited to, the lease of modular space or portable storage units, and examples of non-lease components include, but are not limited to, the delivery, installation, maintenance, and removal services commonly provided in a bundled transaction with the lease components. Arrangement consideration is allocated between lease deliverables and non-lease components based on the relative estimated selling (leasing) price of each deliverable. Estimated selling (leasing) price of the lease deliverables is based upon the estimated stand-alone selling price of the related performance obligations using an adjusted market approach.
When leases and services are billed in advance, recognition of revenue is deferred until services are rendered. If equipment is returned prior to 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.
Rental equipment is leased primarily under operating leases and, from time to time, under sales-type lease arrangements. Operating lease minimum contractual terms generally range from 1 month to 60 months and averaged approximately 10 months across the Company's rental fleet for the six months ended June 30, 2019.
Services Revenue (ASC 606)
The Company generally has three non-lease service-related performance obligations in its contracts with customers:
Delivery and installation of the modular or portable storage unit;
Maintenance and other ad hoc services performed during the lease term; and
Removal services that occur at the end of the lease term.
Consideration is allocated to each of these performance obligations within the contract based upon their estimated relative standalone selling prices using the estimated cost plus margin approach. Revenue from these activities is recognized as the services are performed.
Sales Revenue (ASC 606)
Sales revenue is generated by the sale of new and used units. Revenue from the sale of new and used units is generally recognized at a point in time upon the transfer of control to the customer, which occurs when the unit is delivered and installed in accordance with the contract. Sales transactions constitute a single performance obligation.
Revenue Disaggregation
Geographic Areas
The Company had total revenue in the following geographic areas for the three and six months ended June 30:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2019201820192018
US $240,447 $127,983 473,214 $251,103 
Canada21,456 8,678 39,673 16,845 
Mexico 4,222 3,672 8,246 7,136 
Total revenues$266,125 $140,333 521,133 $275,084 

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Major Product and Service Lines
Rental equipment leasing is the Company’s core business, which significantly impacts the nature, timing, and uncertainty of the Company’s revenue and cash flows. This includes rental of both modular space and portable storage units along with value added products and services ("VAPS"), which include furniture, steps, ramps, basic appliances, internet connectivity devices, and other items used by customers in connection with the Company's products. Rental equipment leasing is complemented by new product sales and sales of rental units. In connection with its leasing and sales activities, the Company provides services including delivery and installation, maintenance and ad hoc services, and removal services at the end of lease transactions.
The Company’s revenue by major product and service line for the three and six months ended June 30 is as follows:
Three Months Ended June 30,Six Months Ended June 30,
2019201820192018
(in thousands)TotalTotalTotalTotal
Modular space leasing revenue$129