##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-K
 Annual
Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 For the fiscal year ended December 31, 2007
 333-84874
333-146157-03
(Commission file number)
    
    Mobile Services Group, Inc.
Mobile Storage Group, Inc.
(Exact name of registrant as
specified in its charter)
    
    Delaware
Delaware
(State or other jurisdiction of

incorporation or organization)
    
    04-3648175
20-0751031
(I.R.S. Employer
 Identification No.)
 700 North Brand Boulevard, Suite 1000
Glendale, California 91203
(818) 253-3200
  Securities registered pursuant to Section 12(b) of the Act:  None
 
 Securities registered pursuant to Section 12(g) of the Act:
 None
 
  o þ
  o þ
  þ o
 þ
 large
accelerated filer,accelerated filer and
smaller reporting company
 Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o
  o þ
  DOCUMENTS INCORPORATED BY REFERENCE:




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##### 



MOBILE SERVICES GROUP, INC
MOBILE STORAGE GROUP, INC
 2007 FORM 10-K ANNUAL REPORT
 TABLE OF CONTENTS
 PagePART IItem 1   Business
    
    
    2Item 1A   Risk Factors
    
    
    14Item 1B   Unresolved Staff Comments
    
    
    26Item 2   Properties
    
    
    26Item 3   Legal Proceedings
    
    
    26Item 4   Submission of Matters to Vote of Security Holders
    
    
    26PART IIItem 5   Market for Registrants Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
    
    
    27Item 6   Selected Financial Data
    
    
    28Item 7   Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    30Item 7A   Quantitative and Qualitative Disclosures about Market Risk
    
    
    43Item 8   Financial Statements and Supplementary Data
    
    
    44Item 9   Changes in and Disagreements with Accountants on Accounting And Financial
Disclosure
    
    
    44Item 9A   Controls and Procedures
    
    
    44Item 9B   Other Information
    
    
    45PART IIIItem 10   Directors, Executive Officers and Corporate Governance
    
    
    46Item 11   Executive Compensation
    
    
    49Item 12   Security Ownership of Certain Beneficial Owners and Management and Related
Stockholders Matters
    
    
    58Item 13   Certain Relationships and Related Transactions, and Director Independence
    
    
    60Item 14   Principal Accountant Fees and Services
    
    
    65PART IVItem 15   Exhibits and Financial Statement Schedules
    
    
    65Exhibit 10.20Exhibit 10.21Exhibit 10.22Exhibit 10.23Exhibit 10.24Exhibit 12.1Exhibit 21.1Exhibit 31.1Exhibit 31.2Exhibit 31.3Exhibit 31.4Exhibit 32.1Exhibit 32.2Exhibit 32.3Exhibit 32.4
   1




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MOBILE SERVICES GROUP, INC
MOBILE STORAGE GROUP, INC
2007 FORM 10-K ANNUAL REPORT
 In this Report, we, us, our, the Company and Mobile Services refer to Mobile
Services Group, Inc. and its subsidiaries as a combined entity, except where it is noted or the
context makes clear that the reference is only to Mobile Services Group, Inc. Mobile Storage
refers only to Mobile Storage Group, Inc, a Delaware corporation (including its predecessor, Mobile
Storage Group, Inc., a California corporation), a wholly-owned subsidiary of Mobile Services, and
not its subsidiaries unless otherwise indicated or the context makes clear that the reference is to
Mobile Storage Group, Inc. and its subsidiaries as a combined entity. Unless otherwise indicated,
all financial data contained in this Report is presented on a consolidated basis for Mobile
Services.
 
 PART I
 
 ITEM 1. BUSINESS
 Corporate Background
   (i)
    
    $200 million of 93/4% Senior Notes due 2014 (the Notes) issued by us and our
wholly-owned subsidiary, Mobile Storage Group, Inc., on the closing date of the
Acquisition; and(ii)
    
    a new $300 million senior secured, asset-based revolving credit facility (the
New Credit Facility), which includes a £85 million U.K. borrowing sublimit. A total
of $162 million was drawn on the New Credit Facility on the closing date, including
£37.7 million drawn under our U.K. borrowing sublimit. The New Credit Facility matures
on August 1, 2011.
 Merger with Mobile Mini
    2




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Business Overview
   Revenue Mix by Type
    
    Revenue Mix by Geography(PIE CHART)
    
    (PIE CHART)
 Revenue Mix by End Markets
 
  3




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
    
    delivers recurring revenues with an average lease duration of more than 15 months
for our core storage container products;
    
    consists primarily of storage containers that have useful lives of approximately 20
years and retain substantial residual value throughout their lives;
    
    features average monthly leasing rates for storage containers that recoup our
average unit investment (excluding variable costs) in approximately 28 months;
    
    benefits from high utilization levels that have averaged in excess of 80% over the
last five years;
    
    produces high incremental unit leasing operating margins on storage containers
estimated to be approximately 50% (based on contribution of a new portable storage unit
on lease after deductions for the cost of leasing, commissions and depreciation);
    
    benefits from a highly diversified customer base; and
    
    features discretionary capital expenditures that can be readily adjusted depending
on market conditions and opportunities.
   Industry Overview
      4




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Our Business Strengths
  Market Leader with Extensive Geographic Coverage and Scale.
 Highly Diversified Customer Base.
 Focus On Customer Service and Support.
 Significant Cash Flow Generation and Discretionary Capital Expenditures.
 Experienced Management Team.
  5




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Our Business Strategy
  Increasing the Utilization and Yield of our Lease Fleet.
 Expanding our Existing Markets and Increasing Market Share.
 
    
    Increasing Market Awareness.Our marketing efforts are designed to raise awareness
of the availability and benefits of our portable storage products and thus expand
product use by existing customers and attract new customers. Our management team has
placed increasing emphasis on our marketing efforts by creating a customer-focused
culture, investing in tools such as our CRM software system and adjusting our
organization to reward growth and increase branch-level accountability. Our marketing
programs include yellow pages advertising and prominent branding of our equipment, as
well as telemarketing, targeted mailings and trade shows.
    
    Growing the Lease Fleet of our Existing Branches.One of our goals is to increase
the size of our lease fleet at existing branches by focusing our branch managers on
delivering same store growth. We plan to achieve this goal by providing branch managers
with specific objectives for adding new customers, increasing the number of units on
hire and adding product lines that have demonstrated strong results. We also intend to
grow by focusing branch managers on targeted industry segments with favorable
characteristics and continuing to introduce new products and services.
    
    Continuing In-Market Acquisitions.We will also continue to selectively pursue
acquisitions of companies in our existing markets. These in-market acquisitions are
attractive because they immediately increase our customer base and the size of our
fleet, add existing revenue-generating relationships, can be fully integrated quickly
(usually in one to three weeks) and are typically consolidated into one of our existing
locations to eliminate operational redundancies. Since January 2002, we have
successfully integrated 38 in-market acquisitions.
 Expanding Into New Markets.
 Growing Our National Accounts.
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Products and Services
  
    
    Storage Containers.Storage containers comprise approximately 79% of our lease
fleet. Storage containers vary in size from 10 feet to 48 feet in length, with 20-foot
and 40-foot length containers being the most common. Standard storage containers
generally are eight feet wide and eight and one-half feet high and are built to the
International Organization for Standardization standards for carrying ocean cargo.
Historically, we have purchased most of our storage containers used from container
leasing companies and brokers. We typically refurbish these containers by removing rust
and dents, repairing floors, painting, adding our branded signage and installing new
locking systems. We are opportunistic in making storage container purchases. Depending
on the prevailing market pricing and supply dynamics, we sometimes purchase new storage
containers from manufacturers and their agents instead of purchasing used storage
containers from container leasing companies and brokers. We also modify many of our
storage containers by splitting them into various sizes and providing customized
features such as storage and office combination units, shelving, windows, vents and
roll-up doors.
    
    Mobile Offices and Accommodation Units.Mobile offices comprise approximately 8% of
our lease fleet. We purchase pre-built mobile offices that are made of steel or timber
and typically require little or no modification for lease as mobile office units.
Mobile office units range from 10 feet to 60 feet in length, and most include air
conditioning and heating, phone jacks, tiled floors, secure doors, windows and
electrical wiring. The configuration of our offices can be customized by stacking and
connecting individual units to make larger offices. In the U.K., where our offices are
also referred to as cabins or accommodation units, we also can provide office furniture
and specialized features such as toilets or showers.
    
    Storage Trailers.Storage trailers comprise approximately 8% of our lease fleet.
Storage trailers, which vary in size from 28 feet to 53 feet in length, are trailers
that are no longer used to move merchandise in interstate commerce. Our storage
trailers, which are used in a manner similar to our storage containers, have wheels and
provide elevated storage. We believe these features provide added benefits to many of
our customers whose operations involve the use of loading docks. Some of our storage
trailers may also be used to transport cargo locally.
    
    Cartage Trailers.Cartage trailers comprise approximately 5% of our lease fleet. Our
cartage trailers range in size from 28 feet to 53 feet in length. Our cartage trailers
are used by customers to transport goods over the road within a 100-mile radius of our
branch location. These trailers are picked up by the customer using their own truck and
returned to the same branch location where the unit was leased.
  
    
    Sales of Portable Storage Products.We sell portable storage products from our
branch locations. The majority of the products sold are used storage containers;
however, we also sell mobile offices and trailers.Generally, we purchase used portable storage products from our vendors directly for
resale. In addition, we occasionally sell new portable storage products that we have
purchased directly from the manufacturer or its agents. Buying portable storage products
directly for resale adds scale to our purchasing, which is beneficial to overall
supplier relationships and purchasing terms. In the normal course of managing our
business, we also sell used portable storage products directly from our lease fleet. The
sale of these in-fleet units has historically been a cost-effective method of
replenishing and upgrading our lease fleet.Our sales business includes modifying or customizing units to meet customer
requirements. Modifications requested by customers range from painting or installing
shelves or lock boxes to more substantive conversions of units into finished, portable,
insulated, air-conditioned mobile office units
that include doors and windows.
    
    Delivery, Pick-up and Repositioning of Portable Storage Products.We deliver
portable storage products directly to our customers premises using specialized
delivery vehicles, and we charge our customers a delivery and pick-up fee. Once our
portable storage products are placed on a customers site, we can also reposition the
units. We subcontract some of this delivery and repositioning work to third parties.
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
    
    Other Ancillary Products and Services.We lease furniture, steps, shelving and other
items to our customers for their use in connection with our portable storage products.
We also offer our lease customers a damage waiver program that protects them in case
the leased unit is damaged. For customers who do not select the damage waiver program,
we bill them for the cost of any repairs.
 Branch Network
    Refurbishment and Maintenance of Fleet
      8




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Customers
    End Markets  U.S. Leasing
    
    End Markets  U.S. Sales(PIE CHART)
    
    (PIE CHART)
  9




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End Markets  U.K. Leasing
    
    End Markets  U.K. Sales(PIE CHART)
    
    (PIE CHART)
  
    
    Construction.Construction customers include a diverse selection of contractors and
subcontractors who work on both residential buildings and commercial projects, such as
office buildings, warehouses, highway and street repair, and plant shutdowns and
refurbishments. We believe our construction customer base is characterized by a wide
variety of contractors and subcontractors, including general contractors, mechanical
contractors, plumbers, electricians and roofers. Contractors typically use storage
containers to securely store construction materials and supplies at construction sites.
They also lease our mobile office units to provide on-site offices and facilities.
Because many of our customers operate in multiple segments of the construction
industry, it is difficult for us to determine exactly to what extent our units are used
in commercial versus residential construction. Nevertheless, we believe the majority of
our lease and lease related revenue is derived from the commercial construction market.
Demand from our construction customers tends to be higher in the second and third
quarters when the weather is warmer, particularly in the U.S.
    
    Services.Service customers include equipment leasing companies that sublease our
equipment, entertainment companies, schools, hospitals, medical offices and theme
parks. These customers typically use our storage containers to store a wide variety of
goods. These customers also lease mobile offices for special events.
    
    Retail.Retail customers include both large national chains and small local stores.
These customers typically lease storage containers and storage trailers to store excess
inventory and supplies. Retail customers also use our storage products during store
remodeling or refurbishment. Demand from these customers can be seasonal and tends to
peak during the winter holidays.
    
    Manufacturing.Manufacturing customers include a broad array of manufacturers,
including oil refineries, petrochemical refineries, carpet manufacturers, textile
manufacturers and bottling companies. They generally lease storage containers and
storage trailers to store both inventory and raw materials.
    
    Transportation, Communication and Utilities.These customers include freight
forwarders, recycling plants, electric utilities and marinas. These customers use
storage containers and storage trailers to store a wide variety of materials and goods.
  10




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
    
    Wholesale.Wholesale customers include food suppliers, furniture wholesalers and
apparel wholesalers. These customers typically lease storage containers and storage
trailers to store their inventories.
    
    Government.Government customers include public schools, correctional institutions,
fire departments as well as the U.S. military. These customers generally lease storage
containers and storage trailers to safeguard materials used in their day-to-day
operations and various government projects.
 Sales and Marketing
     Investment in Lease Fleet
    11




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Management Information and Back Office Systems
   Billing and Lease Terms
    12




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Competition
   Trademarks and Trade Names
 MS®, The Mobile Storage Group®, Tunnel-Tainer ® Mobile Services Group  Ravenstock MSG®,
Ravenstock MSG Ltd® MS The Mobile Storage Group® MS The Mobile Storage Group Ravenstock MSG®
 Properties
 Corporate Headquarters.
 Branch Locations.
 Employees
  Regulatory and Environmental Compliance
   13




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Additional Information
 www.mobilestorage.com
 
 ITEM 1A. RISK FACTORS.
 Cautionary Statement about Forward Looking Statements
   14




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
    
    general economic conditions, either national or in the states in which we, one or
more acquired entities and/or the combined company do business, are less favorable than
expected regarding demand for our portable storage products;
    
    changes in the interest rate environment;
    
    fluctuations in the exchange rate between the U.S. dollar and the British pound and
in the exchange rate between the U.S. dollar and the Chinese yuan;
    
    our ability to identify and consummate acquisitions and to integrate any acquired
businesses;
    
    the potentially dilutive effect of future acquisitions on current shareholders
ownership;
    
    effects of accounting or financial results of one or more acquired entities;
    
    increases in the cost of fuel;
    
    reductions in the supply or increases in costs in obtaining our portable storage
products (particularly steel);
    
    our ability to pass along cost increases to our customers;
    
    continuity of services of members of our senior management team and other key
personnel;
    
    our ability to attract and retain competent branch managers;
    
    competitive factors in the industries in which we operate;
    
    changes in governmental, zoning or environmental regulations;
    
    our ability to generate sufficient cash flow to make interest payments and principal
on our debt obligations;
    
    our ability to comply with covenants contained in our new credit facility and in the
indenture under which our Notes were issued and the effects the restrictions imposed by
those covenants may have on our ability to operate our business; and
    
    conflicts between the interests of our financial sponsor, which has the power to
control our affairs and policies, and the interests of our creditors, such as the
pursuit of acquisitions that could enhance the equity investments of our sponsor but
involve risk to our creditors.
   15




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Risks Relating to Our Business
 An economic downturn could reduce customer demand for our portable storage products, thereby
harming our results of operations.
  
    
    approximately 29% of our total revenues in the U.S. and approximately 40% of our
total revenues in the U.K. from our customers in the construction industry;
    
    approximately 22% of our total revenues in the U.S. and approximately 4% of our
total revenues in the U.K. from our customers in the retail industry;
    
    approximately 17% of our total revenues in the U.S. and approximately 23% of our
total revenues in the U.K. from our customers in the services industry;
    
    approximately 9% of our total revenues in the U.S. and approximately 11% of our
total revenues in the U.K. from our customers in the manufacturing industry; and
    
    approximately 7% of our total revenues in the U.S. and approximately 3% of our total
revenues in the U.K. from our customers in the transportation, communications and
utilities industries.
  We may fail to realize the anticipated benefits of the merger with Mobile Mini, and the integration
process could adversely impact our ongoing operations.
   Competition could reduce our market share and decrease revenues.
  Because our customers lease our portable storage products on a month-to-month basis, we could
rapidly be adversely affected by an economic downturn.
   16




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An inability to obtain additional capital for future growth could harm our results of operations
and growth.
  If we are unable to identify and complete acquisitions, our ability to grow our business will be
limited and our financial condition and results of operations will be negatively impacted.
  
    
    the inability to find appropriate acquisition candidates in the portable storage
industry;
    
    increases in the price of steel and other raw materials, which could increase the
purchase prices of these businesses;
    
    our dependence on continued access to capital;
    
    diversion of managements attention from conducting our operations;
    
    competition for acquisition targets, which could lead to substantial increases in
purchase prices of these businesses; and
    
    expenses, delays and difficulties of integrating acquired businesses into our
existing business structure.
  Fluctuations between the British pound and U.S. dollar could harm our results of operations.
   17




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As a result of the Acquisition, our ability to apply federal income tax net operating loss
carryforwards will be limited.
  Reductions in supply or increases in costs of obtaining our portable storage products could harm
our results of operations.
  
    
    the volume of and trends in international trade;
    
    the extent of competition we face in purchasing new and used portable storage
products;
    
    the availability of new and used portable storage products; and
    
    the prices of steel used to make our portable storage products.
     18




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We may face risks resulting from purchasing storage containers that are made primarily in China.
   
    
    economic, political and financial system instability;
    
    changes in regulatory requirements;
    
    significant fluctuations in interest rates and inflation;
    
    imposition of additional taxes or other payments by the Chinese government;
    
    increases in fuel and other shipping costs;
    
    disruptions in the supply of storage containers, including as a result of work
stoppages in domestic ports; and
    
    other adverse actions or restrictions imposed by the Chinese government.
  Our inability to maintain the quality of our lease fleet could result in the recording of an
impairment charge to appropriately reflect the book value of our fleet assets.
  Our financial performance and operating results may continue to fluctuate.
  If we cannot effectively manage our growth, our business and results of operations could be harmed.
   19




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Our future success depends on the continued service of our executive officers and our ability to
recruit and retain qualified branch managers.
   Increases in the cost of fuel may harm our business.
  Any failure of our management information systems could harm our business and results of
operations.
  We are subject to various environmental laws and regulations. Obligations and liabilities under
these laws and regulations could materially harm our business.
   20




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Compliance with other governmental regulations could increase our operating costs.
  Changes in zoning laws restricting the use of portable storage products may harm our business.
  Our internal controls over financial reporting may not be sufficient to ensure timely and reliable
external financial reporting.
  We are owned by Welsh Carson and their interests as equity holders may conflict with yours as a
creditor.
   21




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Risks
Relating to our Substantial Indebtedness
 Our substantial indebtedness could adversely affect our financial condition and prevent us from
fulfilling our obligations under the Notes.
  
    
    make it more difficult for us to satisfy our obligations with respect to our
indebtedness, including the Notes;
    
    increase our vulnerability to general adverse economic and industry conditions;
    
    require us to dedicate a substantial portion of cash flow from operations to
payments on our indebtedness, thereby reducing the availability of our cash flow to
fund working capital, capital expenditures, future acquisitions and other general
corporate needs;
    
    limit our flexibility in planning for, or reacting to, changes in our business and
the industry in which we operate;
    
    place us at a competitive disadvantage compared to our competitors with less debt;
and
    
    limit our ability to borrow additional funds.
  Despite our current levels of indebtedness, we may incur substantially more debt, which could
further exacerbate the risks associated with our substantial indebtedness.
  Covenants in the New Credit Facility and the indenture governing the Notes restrict our financial
and operating flexibility and, if we are unable to comply with these covenants, our lenders may
declare due and payable all outstanding loan payments, thereby harming our operations and growth.
  
    
    incur additional indebtedness;
    
    pay dividends;
    
    enter into arrangements that restrict the ability of our subsidiaries to pay
dividends to us;
    
    make purchases or redemptions of the Notes;
    
    guarantee other obligations;
    
    incur and pay intercompany debt;
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
    
    make capital expenditures;
    
    make investments or acquisitions;
    
    repurchase or redeem capital stock;
    
    sell assets;
    
    grant or enter into arrangements that restrict our ability to grant liens;
    
    engage in mergers or consolidations; and
    
    engage in transactions with affiliates.
  Because we operate with a significant amount of debt and portions of our indebtedness bear interest
at a variable rate, a general increase in interest rates could increase our operating costs,
decrease profitability, limit our growth and hinder our ability to pay our outstanding
indebtedness.
   23




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We have substantial interest expense and we may not be able to generate sufficient cash to service
all of our indebtedness and may be forced to take other actions to satisfy our obligations under
such indebtedness, which may not be successful.
  Our ability to make payments on our Notes is junior to those lenders who have a security interest
in our assets.
  Our Notes are effectively subordinated to the debts and other obligations of our non-guarantor
subsidiaries.
   To service our indebtedness, we require a significant amount of cash. Our ability to generate or
otherwise obtain cash depends on many factors beyond our control.
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We may not have the ability to raise the funds necessary to finance any change of control offer
required by the indenture governing our Notes.
   A guarantee could be voided if it constitutes a fraudulent transfer under U.S. bankruptcy or
similar state law, which would prevent the holders of our Notes from relying on that guarantor to
satisfy claims.
  
    
    was insolvent or rendered insolvent by reason of such incurrence;
    
    was engaged in a business or transaction for which the guarantors remaining assets
constituted unreasonably small capital; or
    
    intended to incur, or believed that it would incur, debts beyond its ability to pay
those debts as they mature.
    
    
    the sum of its debts, including contingent liabilities, was greater than the fair
saleable value of all its assets;
    
    the present fair saleable value of its assets were less than the amount that would
be required to pay its probable liability on its existing debts, including contingent
liabilities, as they became absolute and mature; or
    
    it could not pay its debts as they became due.
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Our parent company issued subordinated notes in connection with the Acquisition which could result
in us making cash distributions to our parent company.
    
 ITEM 1B. UNRESOLVED STAFF COMMENTS.
  
 ITEM 2. PROPERTIES.
   
 ITEM 3. LEGAL PROCEEDINGS.
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
   26




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PART II
 
 ITEM 5. MARKET FOR COMMON EQUITY, AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES.
    27




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ITEM 6. SELECTED FINANCIAL DATA.
  Period from
    
    
    Period fromJanuary
1, 2006
    
    

August 2, 2006to
    
    
    to
    
    
    Year EndedYear Ended December 31,
    
    
    August 1,
    
    
    December 31,
    
    
    December 31,2003
    
    
    2004
    
    
    2005
    
    
    2006
    
    
    2006
    
    
    2007Predecessor
    
    
    Successor(Dollars in thousands)Statement of Operations Data:Revenues:Lease and lease related
    
    $
    113,975
    
    
    $
    127,040
    
    
    $
    143,417
    
    
    $
    91,088
    
    
    $
    75,596
    
    
    $
    192,318Sales
    
    
    31,064
    
    
    
    29,336
    
    
    
    35,584
    
    
    
    22,410
    
    
    
    14,812
    
    
    
    40,809Total revenues
    
    
    145,039
    
    
    
    156,376
    
    
    
    179,001
    
    
    
    113,498
    
    
    
    90,408
    
    
    
    233,127Costs and expenses:Cost of sales
    
    
    23,064
    
    
    
    21,636
    
    
    
    27,114
    
    
    
    16,223
    
    
    
    10,289
    
    
    
    28,784Trucking and yard costs
    
    
    35,858
    
    
    
    40,811
    
    
    
    44,764
    
    
    
    27,965
    
    
    
    23,053
    
    
    
    58,833Depreciation and amortization
    
    
    13,806
    
    
    
    14,502
    
    
    
    19,471
    
    
    
    12,191
    
    
    
    8,223
    
    
    
    22,216Selling, general and
administrative expenses
    
    
    39,037
    
    
    
    42,129
    
    
    
    46,909
    
    
    
    31,403
    
    
    
    24,135
    
    
    
    67,307Other selling, general and
administrative expensesstock
related compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    700
    
    
    
    1,662
    
    
    
    3,168Restructuring
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Management fees to majority
shareholder
    
    
    445
    
    
    
    422
    
    
    
    400
    
    
    
    329
    
    
    
    29
    
    
    
    Abandoned offering costs
    
    
    (613
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Charge for lease fleet impairment
    
    
    
    
    
    
    9,155
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Acquisition transaction expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,306
    
    
    
    
    
    
    
    Income (loss) from operations
    
    
    33,442
    
    
    
    27,721
    
    
    
    40,343
    
    
    
    (15,619
    )
    
    
    23,017
    
    
    
    52,819Other income (expense)Interest expense, net
    
    
    (20,393
    )
    
    
    (23,096
    )
    
    
    (26,249
    )
    
    
    (15,557
    )
    
    
    (14,832
    )
    
    
    (38,213
    )Foreign currency transaction
gain (loss)
    
    
    7,267
    
    
    
    1,013
    
    
    
    (1,386
    )
    
    
    212
    
    
    
    74
    
    
    
    714Loss on early extinguishment of
debt
    
    
    (1,424
    )
    
    
    
    
    
    
    (780
    )
    
    
    
    
    
    
    
    
    
    
    Other income (expense)
    
    
    (26
    )
    
    
    270
    
    
    
    (241
    )
    
    
    (84
    )
    
    
    (58
    )
    
    
    (141
    )Income (loss) from continuing
operations before provision
(benefit) for income taxes
    
    
    18,866
    
    
    
    5,908
    
    
    
    11,687
    
    
    
    (31,048
    )
    
    
    8,201
    
    
    
    15,179Provision (benefit) for income taxes
    
    
    7,449
    
    
    
    2,539
    
    
    
    4,652
    
    
    
    (9,240
    )
    
    
    3,012
    
    
    
    3,393Income (loss) from continuing
operations
    
    
    11,417
    
    
    
    3,369
    
    
    
    7,035
    
    
    
    (21,808
    )
    
    
    5,189
    
    
    
    11,786Income (loss) from discontinued
operations (net of tax provision
(benefit) of $871, $300, $122,
$225, $125, and $(697) for the
years 2003, 2004, 2005, the periods
from January 1 to August 1, 2006
and August 2 to December 31, 2006,
and the year 2007, respectively)
    
    
    1,307
    
    
    
    451
    
    
    
    184
    
    
    
    337
    
    
    
    188
    
    
    
    (1,110
    )Net income (loss)
    
    $
    12,724
    
    
    $
    3,820
    
    
    $
    7,219
    
    
    $
    (21,471
    )
    
    $
    5,377
    
    
    $
    10,676
  28




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##### Table of Contents



Period fromPeriod from
    
    

August 2, 2006January 1, 2006
    
    
    to
    
    
    Year EndedYear Ended December 31,
    
    
    to
    
    
    December 31,
    
    
    December 31,2003
    
    
    2004
    
    
    2005
    
    
    August 1, 2006
    
    
    2006
    
    
    2007Predecessor
    
    
    Successor(Dollars in thousands)Other Data:Capital expenditures:Acquisitions, net of cash acquired
    
    $
    
    
    
    $
    10,737
    
    
    $
    4,890
    
    
    $
    8,757
    
    
    $
    12,155
    
    
    $
    31,039Purchases of lease equipment
    
    
    7,269
    
    
    
    22,660
    
    
    
    32,466
    
    
    
    17,109
    
    
    
    17,483
    
    
    
    38,931Purchases of property and equipment
    
    
    1,873
    
    
    
    4,802
    
    
    
    6,266
    
    
    
    2,416
    
    
    
    2,198
    
    
    
    7,427Ratio of
earnings to fixed
charges(1)
    
    
    1.9
    x
    
    
    1.3
    x
    
    
    1.4
    x
    
    
    
    
    
    
    1.5
    x
    
    
    1.3
    xCash
flows provided by (used in):Operating activities
    
    
    28,274
    
    
    
    24,967
    
    
    
    35,195
    
    
    
    21,300
    
    
    
    24,602
    
    
    
    42,768Investing activities
    
    
    (8,332
    )
    
    
    (38,199
    )
    
    
    (42,598
    )
    
    
    (28,282
    )
    
    
    (366,136
    )
    
    
    (77,397
    )Financing activities
    
    
    (23,556
    )
    
    
    12,203
    
    
    
    9,349
    
    
    
    7,233
    
    
    
    340,859
    
    
    
    35,547Operating Data:Branch
locations (at period end)(2)
    
    
    67
    
    
    
    73
    
    
    
    76
    
    
    
    76
    
    
    
    81
    
    
    
    87Lease
equipment units (at period
end)
    
    
    84,976
    
    
    
    90,558
    
    
    
    99,414
    
    
    
    104,308
    
    
    
    111,892
    
    
    
    117,417Average
utilization
rate(3)
    
    
    81.8
    %
    
    
    80.3
    %
    
    
    82.2
    %
    
    
    78.7
    %
    
    
    82.2
    %
    
    
    78.3
    %Growth in lease and lease related revenue from
prior comparable period
    
    
    5.5
    %
    
    
    11.5
    %
    
    
    12.9
    %
    
    
    8.9
    %
    
    
    16.2
    %
    
    
    15.4
    %Foreign
currency exchange
rate(4)Average
during each
period(5)
    
    
    1.64
    
    
    
    1.83
    
    
    
    1.82
    
    
    
    1.80
    
    
    
    1.91
    
    
    
    2.00As of the end of each period
    
    
    1.78
    
    
    
    1.93
    
    
    
    1.72
    
    
    
    1.86
    
    
    
    1.96
    
    
    
    2.00
 As ofAs of December 31,

    
    
    December 31,2003
    
    
    2004
    
    
    2005
    
    
    2006
    
    
    2007Predecessor
    
    
    Successor
    
    
    Successor(Dollars in thousands)Balance Sheet:Lease equipment, net
    
    $
    228,893
    
    
    $
    246,492
    
    
    $
    257,498
    
    
    $
    301,630
    
    
    $
    344,415Total assets
    
    
    371,350
    
    
    
    402,934
    
    
    
    415,161
    
    
    
    762,168
    
    
    
    836,020Total debt
    
    
    217,547
    
    
    
    238,987
    
    
    
    250,247
    
    
    
    375,535
    
    
    
    426,340Stockholders equity
    
    
    82,226
    
    
    
    86,838
    
    
    
    80,864
    
    
    
    274,496
    
    
    
    290,615
 
 (1)
    
    For this computation, earnings consist of income before income taxes plus fixed
charges. Fixed charges consist of net interest expense plus the portion of rent expense
representative of the interest factor (deemed to be one-third of rent expense). For the
period from January 1, 2006 to August 1, 2006, our earnings were inadequate to cover fixed
charges in the amount of $30,711.(2)
    
    We define branch locations as locations where we have full-time employees and store our
fleet assets.(3)
    
    We calculate our utilization rate at the end of each month by dividing the number of
units we have on hire to customers plus the number of units pending pick-up by the total
number of units in our fleet as of the end of each month.(4)
    
    Foreign currency exchange rate shown based on the U.S. dollar equivalent of one British
pound.(5)
    
    The average foreign currency exchange rate is calculated by dividing the sum of the
market exchange rates at the end of each day during each period by the total number of days
during each period.  29




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##### Table of Contents



Quarterly Results of Operations
  Three Months EndedMar 31,
    
    
    Jun 30,
    
    
    Sep 30,
    
    
    Dec 31,
    
    
    Mar 30,
    
    
    Jun 30,
    
    
    Sep 30,
    
    
    Dec 31,2006
    
    
    2006
    
    
    2006 (a)
    
    
    2006
    
    
    2007
    
    
    2007
    
    
    2007
    
    
    2007(Predecessor)
    
    
    (Combined)
    
    
    (Successor)(Unaudited, dollars in thousands)Revenues:Lease and lease related
    
    $
    37,710
    
    
    $
    39,561
    
    
    $
    43,031
    
    
    $
    46,382
    
    
    $
    43,201
    
    
    $
    45,561
    
    
    $
    50,085
    
    
    $
    53,471Sales
    
    
    9,478
    
    
    
    10,014
    
    
    
    9,130
    
    
    
    8,600
    
    
    
    10,424
    
    
    
    9,667
    
    
    
    9,926
    
    
    
    10,792Total revenues
    
    $
    47,188
    
    
    $
    49,575
    
    
    $
    52,161
    
    
    $
    54,982
    
    
    $
    53,625
    
    
    $
    55,228
    
    
    $
    60,011
    
    
    $
    64,263Income (loss) from
operations
    
    $
    9,759
    
    
    $
    11,136
    
    
    $
    (27,985
    )
    
    $
    14,488
    
    
    $
    10,407
    
    
    $
    10,765
    
    
    $
    14,535
    
    
    $
    17,112Net income (loss)
    
    $
    2,080
    
    
    $
    2,921
    
    
    $
    (24,673
    )
    
    $
    3,578
    
    
    $
    698
    
    
    $
    (14
    )
    
    $
    3,027
    
    
    $
    6,965
 
 (a)
    
    The amounts from the quarter ended September 30, 2006 represent a combination of the
results for the Predecessor (period from January 1, 2006 to August 1, 2006) and the Successor
(period from August 2, 2006 to September 30, 2006), to facilitate meaningful comparison of the
pre-Acquisition and post-Acquisition periods. 
 ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Mobile Services Group, Inc. (which may be referred to as Mobile Services, we, us, our
or the Company) was acquired on August 1, 2006 and in accordance with Securities and Exchange
Commission rules has applied push down accounting to its post-Acquisition consolidated financial
statements to reflect the new basis of accounting. For more information, see our consolidated
financial statements and the related notes included elsewhere in this Report. All references in
this section to events or activities which occurred prior to the completion of the Acquisition on
August 1, 2006 relate to Mobile Services Group, Inc., as the predecessor company (the
Predecessor). All references in this section to events or activities which occurred after
completion of the Acquisition on August 1, 2006 relate to Mobile Services Group, Inc., as the
successor company (the Successor).
 For purposes of the discussions below, we combined the results of operations of the
Predecessor and Successor during the twelve months ended December 31, 2006 in order to achieve a
meaningful comparison of our results of operations during the periods indicated in 2005, 2006 and
2007.
 This discussion contains forward-looking statements that involve risks and uncertainties. Our
actual results may differ materially from those anticipated in these forward-looking statements as
a result of certain factors, including, but not limited to, those described under Item 1A, Risk
Factors.
 Overview
    30




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##### Table of Contents



Merger with Mobile Mini
   Discontinued Operations
  Key Financial Measures
  Revenues.
  Costs of Operations .
  
    
    cost of sales;
    
    trucking and yard costs;
  31




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##### Table of Contents




    
    selling, general and administrative expenses;
    
    depreciation and amortization expenses; and
    
    interest expense.
  Results of Operations
  Predecessor
    
    
    Successor
    
    
    Combined
    
    
    SuccessorPeriod
    
    
    PeriodYear
    
    
    from
    
    
    from
    
    
    Year
    
    
    YearEnded
    
    
    January 1 to
    
    
    August 2 to
    
    
    Ended
    
    
    EndedDecember 31,
    
    
    August 1,
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,2005
    
    
    2006
    
    
    2006
    
    
    2006
    
    
    2007(Dollars in thousands)Revenues:Lease and lease related
    
    $
    143,417
    
    
    $
    91,088
    
    
    $
    75,596
    
    
    $
    166,684
    
    
    $
    192,318Sales
    
    
    35,584
    
    
    
    22,410
    
    
    
    14,812
    
    
    
    37,222
    
    
    
    40,809Total revenues
    
    
    179,001
    
    
    
    113,498
    
    
    
    90,408
    
    
    
    203,906
    
    
    
    233,127Costs and expenses:Cost of sales
    
    
    27,114
    
    
    
    16,223
    
    
    
    10,289
    
    
    
    26,512
    
    
    
    28,784Trucking and yard costs
    
    
    44,764
    
    
    
    27,965
    
    
    
    23,053
    
    
    
    51,018
    
    
    
    58,833Depreciation and amortization
    
    
    19,471
    
    
    
    12,191
    
    
    
    8,223
    
    
    
    20,414
    
    
    
    22,216Selling, general and administrative expenses
    
    
    46,909
    
    
    
    32,103
    
    
    
    25,797
    
    
    
    57,900
    
    
    
    70,475Management fees
    
    
    400
    
    
    
    329
    
    
    
    29
    
    
    
    358
    
    
    
    Acquisition transaction expenses
    
    
    
    
    
    
    40,306
    
    
    
    
    
    
    
    40,306
    
    
    
    Income (loss) from operations
    
    
    40,343
    
    
    
    (15,619
    )
    
    
    23,017
    
    
    
    7,398
    
    
    
    52,819Other income (expense):Interest expense, net
    
    
    (26,249
    )
    
    
    (15,557
    )
    
    
    (14,832
    )
    
    
    (30,389
    )
    
    
    (38,213
    )Foreign currency translation gain (loss)
    
    
    (1,386
    )
    
    
    212
    
    
    
    74
    
    
    
    286
    
    
    
    714Loss on early extinguishment of debt
    
    
    (780
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other income (expense)
    
    
    (241
    )
    
    
    (84
    )
    
    
    (58
    )
    
    
    (142
    )
    
    
    (141
    )Income (loss) from continuing operations
before provision (benefit) for income taxes
    
    
    11,687
    
    
    
    (31,048
    )
    
    
    8,201
    
    
    
    (22,847
    )
    
    
    15,179Provision (benefit) for income taxes
    
    
    4,652
    
    
    
    (9,240
    )
    
    
    3,012
    
    
    
    (6,228
    )
    
    
    3,393Income (loss) from continuing operations
    
    
    7,035
    
    
    
    (21,808
    )
    
    
    5,189
    
    
    
    (16,619
    )
    
    
    11,786Income (loss) from discontinued
operations, net of tax provision
    
    
    184
    
    
    
    337
    
    
    
    188
    
    
    
    525
    
    
    
    (1,110
    )Net income (loss)
    
    $
    7,219
    
    
    $
    (21,471
    )
    
    $
    5,377
    
    
    $
    (16,094
    )
    
    $
    10,676
  32




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##### Table of Contents



Twelve Months EndedDecember 31,2005
    
    
    2006
    
    
    2007Revenues:Lease and lease related
    
    
    80.1
    %
    
    
    81.7
    %
    
    
    82.5
    %Sales
    
    
    19.9
    
    
    
    18.3
    
    
    
    17.5Total revenues
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0Costs and expenses:Cost of sales
    
    
    15.1
    
    
    
    13.0
    
    
    
    12.3Trucking and yard costs
    
    
    25.0
    
    
    
    25.0
    
    
    
    25.2Depreciation and amortization
    
    
    10.9
    
    
    
    10.0
    
    
    
    9.5Selling, general and administrative expenses
    
    
    26.2
    
    
    
    28.4
    
    
    
    30.2Management fees
    
    
    0.2
    
    
    
    0.2
    
    
    
    Acquisition transaction expenses
    
    
    
    
    
    
    19.8
    
    
    
    Income (loss) from operations
    
    
    22.5
    
    
    
    3.6
    
    
    
    22.7Other income (expense):Interest expense, net
    
    
    (14.7
    )
    
    
    (14.9
    )
    
    
    (16.4
    )Foreign currency translation gain (loss)
    
    
    (0.8
    )
    
    
    0.1
    
    
    
    0.3Loss on early extinguishment of debt
    
    
    (0.4
    )
    
    
    
    
    
    
    Other income (expense)
    
    
    (0.1
    )
    
    
    (0.1
    )
    
    
    (0.1
    )Income (loss) before provision for income
taxes and discontinued operations
    
    
    6.5
    
    
    
    (11.2
    )
    
    
    6.6Provision (benefit) for income taxes
    
    
    (2.6
    )
    
    
    3.1
    
    
    
    (1.5
    )Income (loss) before discontinued operations
    
    
    3.9
    
    
    
    (8.2
    )
    
    
    5.1Income (loss) from discontinued operations
    
    
    0.1
    
    
    
    0.3
    
    
    
    (0.5
    )Net income (loss)
    
    
    4.0
    %
    
    
    (7.9
    )%
    
    
    4.6
    %
 Twelve Months Ended December 31, 2007 Compared to Twelve Months Ended December 31, 2006
 Twelve Months EndedDecember 31,
    
    
    Increase (Decrease)2006
    
    
    2007
    
    
    Dollars
    
    
    Percent(Dollars in thousands)Revenues:Lease and lease related
    
    $
    166,684
    
    
    $
    192,318
    
    
    $
    25,634
    
    
    
    15.4
    %Sales
    
    
    37,222
    
    
    
    40,809
    
    
    
    3,587
    
    
    
    9.6
    %Total revenues
    
    
    203,906
    
    
    
    233,127
    
    
    
    29,221
    
    
    
    14.3
    %Costs and expenses:Costs of sales
    
    
    26,512
    
    
    
    28,784
    
    
    
    2,272
    
    
    
    8.6
    %Trucking and yard costs
    
    
    51,018
    
    
    
    58,833
    
    
    
    7,815
    
    
    
    15.3
    %Depreciation and amortization
    
    
    20,414
    
    
    
    22,216
    
    
    
    1,802
    
    
    
    8.8
    %Selling, general and administrative expenses
    
    
    57,900
    
    
    
    70,475
    
    
    
    12,575
    
    
    
    21.7
    %Management fees
    
    
    358
    
    
    
    
    
    
    
    (358
    )
    
    
    (100.0
    )%Acquisition transaction expenses
    
    
    40,306
    
    
    
    
    
    
    
    (40,306
    )
    
    
    (100.0
    )%Income from operations
    
    
    7,398
    
    
    
    52,819
    
    
    
    45,421
    
    
    
    614.0
    %Interest expense, net
    
    
    (30,389
    )
    
    
    (38,213
    )
    
    
    (7,824
    )
    
    
    25.7
    %Foreign currency translation gain
    
    
    286
    
    
    
    714
    
    
    
    428
    
    
    
    149.7
    %Other income (expense)
    
    
    (142
    )
    
    
    (141
    )
    
    
    1
    
    
    
    (0.7
    )%Income (loss) before provision for income
taxes and discontinued operations
    
    
    (22,847
    )
    
    
    15,179
    
    
    
    38,026
    
    
    
    166.4
    %Provision (benefit) for income taxes
    
    
    (6,228
    )
    
    
    3,393
    
    
    
    9,621
    
    
    
    154.5
    %Income (loss) before discontinued operations
    
    
    (16,619
    )
    
    
    11,786
    
    
    
    28,405
    
    
    
    170.9
    %Income (loss) from discontinued operations
    
    
    525
    
    
    
    (1,110
    )
    
    
    (1,635
    )
    
    
    (311.4
    )%Net income (loss)
    
    $
    (16,094
    )
    
    $
    10,676
    
    
    $
    26,770
    
    
    
    166.3
    %
  33




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##### Table of Contents



Revenues.
   Cost of Sales.
 Trucking and Yard Costs.
 Depreciation and Amortization.
 Selling, General and Administrative Expenses.
 Acquisition Transaction Expenses.
  34




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##### Table of Contents



Interest Expense.
 Income Taxes.
 Net Income.
 Twelve Months Ended December 31, 2006 Compared to Twelve Months Ended December 31, 2005
 Twelve Months EndedDecember 31,
    
    
    Increase (Decrease)2005
    
    
    2006
    
    
    Dollars
    
    
    Percent(Dollars in thousands)Revenues:Lease and lease related
    
    $
    143,417
    
    
    $
    166,684
    
    
    $
    23,267
    
    
    
    16.2
    %Sales
    
    
    35,584
    
    
    
    37,222
    
    
    
    1,638
    
    
    
    4.6
    %Total revenues
    
    
    179,001
    
    
    
    203,906
    
    
    
    24,905
    
    
    
    13.9
    %Costs and expenses:Costs of sales
    
    
    27,114
    
    
    
    26,512
    
    
    
    (602
    )
    
    
    (2.2
    )%Trucking and yard costs
    
    
    44,764
    
    
    
    51,018
    
    
    
    6,254
    
    
    
    14.0
    %Depreciation and amortization
    
    
    19,471
    
    
    
    20,414
    
    
    
    943
    
    
    
    4.8
    %Selling, general and administrative
expenses
    
    
    46,909
    
    
    
    57,900
    
    
    
    10,991
    
    
    
    23.4
    %Management fees
    
    
    400
    
    
    
    358
    
    
    
    (42
    )
    
    
    (10.5
    )%Acquisition transaction expenses
    
    
    
    
    
    
    40,306
    
    
    
    40,306
    
    
    
    100.0
    %Income from operations
    
    
    40,343
    
    
    
    7,398
    
    
    
    (32,945
    )
    
    
    (81.7
    )%Interest expense, net
    
    
    (26,249
    )
    
    
    (30,389
    )
    
    
    (4,140
    )
    
    
    15.8
    %Foreign currency translation gain
(loss)
    
    
    (1,386
    )
    
    
    286
    
    
    
    1,672
    
    
    
    (120.6
    )%Loss on early extinguishment of debt
    
    
    (780
    )
    
    
    
    
    
    
    780
    
    
    
    (100.0
    )%Other income (expense)
    
    
    (241
    )
    
    
    (142
    )
    
    
    99
    
    
    
    (41.1
    )%Income (loss) before provision for
income taxes and discontinued
operations
    
    
    11,687
    
    
    
    (22,847
    )
    
    
    (34,534
    )
    
    
    (295.5
    )%Provision (benefit) for income taxes
    
    
    4,652
    
    
    
    (6,228
    )
    
    
    (10,880
    )
    
    
    (233.9
    )%Income (loss) before discontinued
operations
    
    
    7,035
    
    
    
    (16,619
    )
    
    
    (23,654
    )
    
    
    (336.2
    )%Income from discontinued operations
    
    
    184
    
    
    
    525
    
    
    
    341
    
    
    
    185.3
    %Net income (loss)
    
    $
    7,219
    
    
    $
    (16,094
    )
    
    $
    (23,313
    )
    
    
    (322.9
    )%
 Revenues.
  35




---



##### Table of Contents



Cost of Sales.
 Trucking and Yard Costs.
 Depreciation and Amortization.
 Selling, General and Administrative Expenses.
 Acquisition Transaction Expenses.
 Interest Expense.
  36




---



##### Table of Contents



Foreign Currency Translation.
 Income Taxes.
 Net Income (Loss).
 Non-GAAP Measures
      37




---



##### Table of Contents



Period from
    
    
    Period fromJanuary 1, 2006
    
    
    August 2, 2006
    
    
    Year endedYear Ended December 31,
    
    
    to August 1,
    
    
    to December 31,
    
    
    December 31,2004
    
    
    2005
    
    
    2006
    
    
    2006
    
    
    2007Predecessor
    
    
    Predecessor
    
    
    Predecessor
    
    
    Successor
    
    
    Successor(Dollars in thousands)Net income (loss)
    
    $
    3,820
    
    
    $
    7,219
    
    
    $
    (21,471
    )
    
    $
    5,377
    
    
    $
    10,676(Income) loss from discontinued
operations
    
    
    (451
    )
    
    
    (184
    )
    
    
    (337
    )
    
    
    (188
    )
    
    
    1,110Net income (loss) from continuing
operations
    
    
    3,369
    
    
    
    7,035
    
    
    
    (21,808
    )
    
    
    5,189
    
    
    
    11,786Interest expense, net
    
    
    23,096
    
    
    
    26,249
    
    
    
    15,557
    
    
    
    14,832
    
    
    
    38,213Provision (benefit) for income taxes
    
    
    2,539
    
    
    
    4,652
    
    
    
    (9,240
    )
    
    
    3,012
    
    
    
    3,393Depreciation and amortization
    
    
    14,502
    
    
    
    19,471
    
    
    
    12,191
    
    
    
    8,223
    
    
    
    22,216EBITDA from continuing operations
    
    
    43,506
    
    
    
    57,407
    
    
    
    (3,300
    )
    
    
    31,256
    
    
    
    75,608Foreign currency translation (gain)
loss(a)
    
    
    (1,013
    )
    
    
    1,386
    
    
    
    (212
    )
    
    
    (74
    )
    
    
    (714
    )Loss on early extinguishment of debt(b)
    
    
    
    
    
    
    780
    
    
    
    
    
    
    
    
    
    
    
    Other (income) expense
    
    
    (270
    )
    
    
    241
    
    
    
    84
    
    
    
    58
    
    
    
    141Non-cash stock option expense(c)
    
    
    
    
    
    
    
    
    
    
    700
    
    
    
    1,662
    
    
    
    3,168Management and board fees(d)
    
    
    484
    
    
    
    477
    
    
    
    388
    
    
    
    
    
    
    
    Workers compensation adjustments(e)
    
    
    261
    
    
    
    660
    
    
    
    
    
    
    
    
    
    
    
    Non-cash
asset impairment charge(f)
    
    
    9,155
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Acquisition
transaction expenses(g)
    
    
    
    
    
    
    
    
    
    
    40,306
    
    
    
    
    
    
    
    Adjusted EBITDA from continuing operations
    
    $
    52,123
    
    
    $
    60,951
    
    
    $
    37,966
    
    
    $
    32,902
    
    
    $
    78,203
 
 (a)
    
    Represents adjustments arising from differences in exchange rates from period
to period when U.S. dollar-denominated borrowings of our foreign subsidiaries are
remeasured at each reporting date using the local currency as the functional currency.(b)
    
    Represents the incurrence of loss on early extinguishment of debt for the
write-off of the remaining unamortized deferred loan costs and the payment of
prepayment penalties related to the refinancing of our revolving credit facility in
December 2005.(c)
    
    Represents recognition of the cost of all share-based payments to employees,
including grants of employee stock options, based on fair values as required by SFAS
No. 123(R) adopted by us effective on January 1, 2006. We estimate the fair value of
employee share options using option-pricing models and adjust these estimates
throughout the year.(d)
    
    Represents: (i) management fees paid to our previous equity sponsor which we do
not pay to our new equity sponsor and (ii) board fees paid to our previous Board of
Directors in excess of what we pay our new Board of Directors.(e)
    
    Represents payments of retroactive supplemental insurance premiums for claims
occurring in the period in which the adjustment is made but actually paid in a
subsequent period and deduction of the expense of such premium in the period it was
actually paid.(f)
    
    Represents an impairment charge resulting from the identification of specific
lease fleet and property and equipment to be held for sale. Their value was impaired
using a comparison of estimated fair market value, which was based upon then current
estimates of selling prices or scrap values, less selling costs, compared to the
carrying value.(g)
    
    Represents expenses incurred in connection with the Acquisition. See Note 1 to
our audited consolidated financial statements for additional information regarding
these expenses.  38




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##### Table of Contents



Liquidity and Capital Resources
  Twelve Months Ended December 31,2005
    
    
    2006
    
    
    2007(Dollars in thousands)Net cash provided by operating activities
    
    $
    35,195
    
    
    $
    45,902
    
    
    $
    42,768Net cash used in investing activities
    
    $
    (42,598
    )
    
    $
    (394,418
    )
    
    $
    (77,397
    )Net cash provided by financing activities
    
    $
    9,349
    
    
    $
    348,092
    
    
    $
    35,547
 Operating Activities.
 Investing Activities.
 Financing Activities.
  39




---



##### Table of Contents



December 31,2005
    
    
    2006
    
    
    2007(Dollars in thousands)Cash and cash equivalents
    
    $
    
    
    
    $
    1,469
    
    
    $
    2,331Debt obligations
    
    $
    250,247
    
    
    $
    375,535
    
    
    $
    426,340
   Credit Facilities and Financing
 New Credit Facility
  Senior Notes
 3 4
 Subordinated Notes
   40




---



##### Table of Contents



Contractual Obligations
  Payments Due by PeriodLess than 1
    
    
    
    
    
    
    
    
    
    
    More than 5Total
    
    
    Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    years(Dollars in thousands)Debt (1)
    
    $
    419,683
    
    
    $
    199
    
    
    $
    510
    
    
    $
    218,933
    
    
    $
    200,041Capital lease obligations
    
    
    6,657
    
    
    
    1,310
    
    
    
    2,836
    
    
    
    2,069
    
    
    
    442Interest on debt and
capital lease
obligations (2)
    
    
    129,843
    
    
    
    20,002
    
    
    
    39,687
    
    
    
    39,246
    
    
    
    30,908Operating leases
    
    
    28,228
    
    
    
    7,197
    
    
    
    10,401
    
    
    
    5,270
    
    
    
    5,360Total
    
    $
    584,411
    
    
    $
    28,708
    
    
    $
    53,434
    
    
    $
    265,518
    
    
    $
    236,751
 
 (1)
    
    Principal payments are reflected when contractually required and no early paydowns are
reflected.(2)
    
    Estimated interest for debt for all periods presented is calculated using the interest rate
effective as of December 31, 2007 of (i) 7.52% weighted average interest rate on borrowings
under the new credit facility and (ii) 9.75% on the Senior Notes. Capital lease interest is
based upon contractually agreed upon amounts. Off-Balance Sheet Arrangements
  Seasonality
  Critical Accounting Policies
   Revenue Recognition.
  41




---



##### Table of Contents



Depreciation of Lease Equipment.
 Goodwill and Other Intangible Assets.
  Provision for Doubtful Accounts.
 Commitments and Contingencies.
 Recent Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes Accounting for Income Taxes.
  42




---



##### Table of Contents



Fair Value Measurement
 The Fair Value Option for Financial Assets and
Financial Liabilities
  
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rate Risks
    43




---



##### Table of Contents



Foreign Currency Risks
   
 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
   44




---



##### Table of Contents



Internal
Control over Financial Reporting
  Changes in Internal Controls
  Managements
Annual Report on Internal Control Over Financial Reporting
  
 ITEM 9B . OTHER INFORMATION
   45




---



##### Table of Contents



PART III
 
 ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
  Name
    
    Age
    
    Position(s)Douglas Waugaman
    
    
    49
    
    
    President, Chief Executive Officer and DirectorSanjay Swani
    
    
    41
    
    
    Chairman of the Board of DirectorsJerry Vaughn
    
    
    63
    
    
    Executive Vice PresidentAdministrationAllan Villegas
    
    
    38
    
    
    Chief Financial OfficerWilliam Armstead
    
    
    44
    
    
    Regional Vice PresidentSouthwest Region,
Pacific Northwest Region and Pacific Southwest
Region, Mobile StorageJody Miller
    
    
    40
    
    
    Regional Vice PresidentSoutheast Region and
North Region, Mobile StorageRonald Halchishak
    
    
    60
    
    
    Managing DirectorRavenstock MSGRonald Valenta
    
    
    49
    
    
    DirectorJames Robertson
    
    
    49
    
    
    DirectorAnthony de Nicola
    
    
    43
    
    
    DirectorMichael Donovan
    
    
    31
    
    
    DirectorJames Martell
    
    
    53
    
    
    Director
 Douglas Waugaman
 Sanjay Swani
 Jerry Vaughn
 Allan Villegas
 William Armstead
  46




---



##### Table of Contents



Jody Miller
 Ronald Halchishak
 Ronald Valenta
 James Robertson
 Anthony de Nicola
 Michael Donovan
 James Martell
 Board of Directors
   47




---



##### Table of Contents



Board Committees; Independence
   Audit Committee.
  Compensation Committee.
 Nominating Committee.
 Executive Committee.
 Officers
  Code of Business Conduct and Ethics
 th
  48




---



##### Table of Contents



ITEM
11. EXECUTIVE COMPENSATION
 Compensation Committee Report
   
 Compensation Discussion and Analysis
 Overview
    Compensation Policies and Practices
 The primary objectives of our executive compensation program are to:
    
    attract and retain the best possible executive talent,
    
    achieve accountability for performance by linking annual cash and long-term
incentive awards to achievement of measurable performance objectives, and
    
    align executives incentives with stockholder value creation.
   49




---



##### Table of Contents




    
    base salary,
    
    annual cash-based incentive awards,
    
    long-term incentive awards  stock option grants; and
    
    employee benefits and other perquisites.
 Compensation Setting Process
    Benchmarking and Peer Group
    50




---



##### Table of Contents



Compensation Program Components
 Base Salary
   Cash-Based Incentive Awards
     51




---



##### Table of Contents



Long-Term Equity Compensation
   Types of Awards
 
    
    Performance Shares and Performance Units.Performance shares and performance units
are linked to our performance over a performance cycle designated by our compensation
committee. These awards will be paid only to the extent that we attain the
corresponding performance goals. These awards are payable in cash, common stock or a
combination of both, as determined by our compensation committee. Before the
performance shares or performance units have vested, no dividends are payable, but
participants holding performance shares or performance units may be credited with
dividend equivalents equal to the amount or value of the dividends that would have been
paid on the underlying shares of the unvested awards if they were vested, or as
otherwise outlined in the separate award agreements for the performance shares or
performance units.
    
    Restricted Stock and Restricted Stock Units.Restricted stock and restricted stock
units represent grants of our common stock or stock units that are subject to a risk of
forfeiture or other restrictions that lapse when one or more performance or other
objectives, as determined by our compensation committee, are achieved. Any awards will
be subject to such conditions, restrictions and contingencies as our Compensation
committee determines. Restricted stock units are payable in cash, common stock or a
combination of both, as determined by our compensation committee. During the
restriction period, no dividends are payable on unvested shares, but participants
holding shares of restricted stock may be credited with dividend equivalents equal to
the amount or value of the dividends that would have been paid on the unvested shares
if they were vested, or as otherwise outlined in the separate award agreements for the
restricted stock or restricted stock units.
    
    Stock Options.Each stock option represents the right to purchase a specified number
of shares of our common stock, at a fixed grant price that cannot be less than the fair
market value of the shares on the grant date. Our 2006 Stock Incentive Plan does not
permit re-pricing of any previously granted stock options. The maximum term of a stock
option is ten years from the date of grant. Any option will be exercisable in
accordance with terms established by our compensation committee. The purchase price of
an option may be payable in cash, common stock (valued at fair market on the day of
exercise) or a combination of both. Our 2006 Stock Option Plan authorizes our
compensation committee to grant non-qualified stock options as well as incentive stock
options that comply with the requirements of Section 422(b) of the Internal Revenue
Code.
  52




---



##### Table of Contents



Employee Benefits and Other Perquisites
  Accounting and Tax Treatment
 Deductibility of Executive Compensation.
   Accounting for Stock-Based Compensation.
  53




---



##### Table of Contents



Potential Payments Upon Termination or Change of Control
      2006 Stock Option Plan
   54




---



##### Table of Contents



Summary Compensation Table
  Annual CompensationStock
    
    
    Option
    
    
    All OtherName and Principal Position
    
    Year
    
    
    Salary $
    
    
    Bonus $
    
    
    Awards $
    
    
    Awards (1)$
    
    
    Compensation (2)$
    
    
    Total $Douglas WaugamanChief Executive Officer and
     President
    
    
    2007
    
    
    
    350,000
    
    
    
    175,000
    
    
    
    
    
    
    
    899,765
    
    
    
    22,051
    
    
    
    1,446,816Jerry VaughnExecutive Vice President -
     Administration
    
    
    2007
    
    
    
    303,462
    
    
    
    35,000
    
    
    
    
    
    
    
    276,229
    
    
    
    17,882
    
    
    
    632,573Allan VillegasChief Financial Officer
    
    
    2007
    
    
    
    207,692
    
    
    
    106,250
    
    
    
    
    
    
    
    241,134
    
    
    
    15,544
    
    
    
    570,620Jody MillerRegional Vice President
    
    
    2007
    
    
    
    150,000
    
    
    
    74,959
    
    
    
    
    
    
    
    241,134
    
    
    
    25,535
    
    
    
    491,628Christopher Wilson
(3)General Counsel
    
    
    2007
    
    
    
    170,000
    
    
    
    79,600
    
    
    
    
    
    
    
    241,134
    
    
    
    34,531
    (4)
    
    
    525,265
 (1)
    
    The value of option awards granted to our executive officers is based upon the dollar amount
of option grants by MSG Parent recognized for financial statement reporting purposes in
accordance with SFAS No. 123(R) for 2007. See Note 10 to our audited consolidated financial
statements.(2)
    
    For each Named Executive Officer, represents amount paid by us for (i) an automobile
allowance or the amount of underlying lease payments for an automobile provided by us, (ii)
premiums paid by us for medical, dental and life insurance coverage and (iii) any matching
contributions provided by us to the named executives 401(k) account.(3)
    
    Christopher Wilson resigned as our General Counsel effective December 14, 2007.(4)
    
    Includes $10,027 payment on termination made in lieu of vacation days not taken. Grants of Plan Based Awards
  All OtherAll Other
    
    
    Option Awards:Estimated Future Payouts Under
    
    
    Estimated Future Payouts Under
    
    
    Stock Awards:
    
    
    Number of
    
    
    Exercise orNon-Equity
    
    
    Equity
    
    
    Number of
    
    
    Securities
    
    
    Base PriceIncentive Plan Awards
    
    

Incentive Plan Awards
    
    
    Shares of
    
    
    Underlying
    
    
    of Option
    
    
    OptionGrant
    
    
    
    
    
    
    Target
    
    
    Maximum
    
    
    Threshold
    
    
    Target
    
    
    Maximum
    
    
    Stock or Units
    
    
    Options
    
    
    Awards
    
    
    AwardsName
    
    Date
    
    
    Threshold ($)
    
    
    ($)
    
    
    ($)
    
    
    (#)
    
    
    (#)
    
    
    (#)
    
    
    (#)
    
    
    (#)
    
    
    ($/Sh)
    
    
    ($)(a)
    
    (b)
    
    
    (c)
    
    
    (d)
    
    
    (e)
    
    
    (f)
    
    
    (g)
    
    
    (h)
    
    
    (i)
    
    
    (j)
    
    
    (k)
    
    
    (l)Jerry Vaughn
    
    
    5/8/07
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    250.00
    
    
    
    
    
    
    $
    1,255.59
    
    
    
    Ronald Halchishak
    
    
    8/16/07
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,500.00
    
    
    
    
    
    
    $
    1,255.59
    
    
    
    
  Employment Agreements
   55




---



##### Table of Contents



Non-Competition, Non-Solicitation and Confidentiality Agreements
  2006 Stock Option Plan
  2006 Stock Incentive Plan and 2006 Employee Stock Option Plan
   56




---



##### Table of Contents



Outstanding Equity Awards at Fiscal Year End
  Option Awards
    
    
    
    
    
    
    
    
    
    
    Stock AwardsEquityPerformanceVestingIncentive Plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Equity IncentiveAwards;
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Equity Incentive
    
    
    Plan Awards;Number of
    
    
    Number of
    
    
    Number of
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Plan Awards;
    
    
    Market or PayoutSecurities
    
    
    Securities
    
    
    Securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Number of
    
    
    Value ofUnderlying
    
    
    Underlying
    
    
    Underlying
    
    
    
    
    
    
    
    
    
    
    Number of Shares
    
    
    Market Value of
    
    
    Unearned Shares,
    
    
    Unearned Shares,Unexercised
    
    
    Unexercised
    
    
    Unexercised
    
    
    Option
    
    
    Option
    
    
    or Units of Stock
    
    
    Shares or Units of
    
    
    Units or Other
    
    
    Units or OtherOptions (#)
    
    
    Options (#)
    
    
    Unearned
    
    
    Exercise
    
    
    Expiration
    
    
    That Have Not
    
    
    Stock That Have
    
    
    Rights That Have
    
    
    Rights That HaveName
    
    Exercisable
    
    
    Unexercisable
    
    
    Options (#)
    
    
    Price ($)
    
    
    Date
    
    
    Vested (#)
    
    
    Not Vested ($)
    
    
    Not Vested (#)
    
    
    Not Vested ($)Douglas Waugaman
    
    
    1,746.6
    
    
    
    4,687.4
    
    
    
    
    
    
    $
    1,255.59
    
    
    
    8/1/16
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Jerry Vaughn
    
    
    259.0
    
    
    
    741.0
    
    
    
    
    
    
    $
    1,255.59
    
    
    
    12/31/10
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Allan Villegas
    
    
    782.6
    
    
    
    
    
    
    
    
    
    
    $
    941.42
    
    
    
    10/4/15
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Allan Villegas
    
    
    468.1
    
    
    
    1,256.2
    
    
    
    
    
    
    $
    1,255.59
    
    
    
    8/1/16
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Jody Miller
    
    
    886.9
    
    
    
    
    
    
    
    
    
    
    $
    604.12
    
    
    
    1/12/14
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Jody Miller
    
    
    468.1
    
    
    
    1,256.2
    
    
    
    
    
    
    $
    1,255.59
    
    
    
    8/1/16
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    William Armstead
    
    
    347.6
    
    
    
    
    
    
    
    
    
    
    $
    604.12
    
    
    
    8/2/14
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    William Armstead
    
    
    468.1
    
    
    
    1,256.2
    
    
    
    
    
    
    $
    1,255.59
    
    
    
    8/1/16
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ronald Halchishak
    
    
    150.0
    
    
    
    1,350.0
    
    
    
    
    
    
    $
    1,255.59
    
    
    
    8/1/16
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 Option Exercised and Stock Vested
  Pension Benefits
  Non-Qualified Deferred Compensation Plans
   57




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##### Table of Contents



Director Compensation
   2007 Director Compensation
 Change inPension ValueFees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    and NonqualifiedEarned or
    
    
    
    
    
    
    
    
    
    
    Non-Equity
    
    
    Deferred
    
    
    AllPaid in
    
    
    Stock
    
    
    Option
    
    
    Incentive Plan
    
    
    Compensation
    
    
    OtherCash
    
    
    Awards
    
    
    Awards
    
    
    Compensation
    
    
    Earnings
    
    
    Compensation
    
    
    TotalName
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)(a)
    
    (b)
    
    
    (c)
    
    
    (d)
    
    
    (e)
    
    
    (f)
    
    
    (g)
    
    
    (g)Anthony de Nicola
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Michael Donovan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    James Martell
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,000
    (1)
    
    
    50,000James Robertson
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    68,750
    (2)
    
    
    68,750Sanjay Swani
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ronald Valenta
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    81,933
    (3)
    
    
    81,933
 
 (1)
    
    Represents amounts earned pursuant to a Board retention and Consulting Agreement
between Mobile Storage, MSG Parent and Mr. Martell, which is discussed in more detail under
the heading Certain Relationships and Related Party Transactions.(2)
    
    Represents amounts earned pursuant to a Board retention and Consulting Agreement
between Mobile Storage, MSG Parent and Mr. Robertson, which is discussed in more detail
under the heading Certain Relationships and Related Party Transactions.(3)
    
    Represents amounts earned pursuant to a Board retention and Consulting Agreement
between Mobile Storage, MSG Parent and Mr. Valenta, which is discussed in more detail under
the heading Certain Relationships and Related Party Transactions. Compensation Committee Interlocks and Insider Participation
  
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
    58




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##### Table of Contents



Number ofShares of CommonStock Beneficially
    
    
    PercentName of Beneficial Owner
    
    Owned
    
    
    of Class5% Shareholders:Welsh, Carson, Anderson & Stowe and affiliated entities
320 Park Avenue, Suite 2500
New York, New York 10022
    
    
    115,518
    (1)
    
    
    78.5
    %California State Teachers Retirement System
77667 Folsom Avenue
Sacramento, California 95826
    
    
    11,947
    
    
    
    8.1
    %Lehman Brothers Holdings Inc. and certain of its
affiliates
745 Seventh Avenue
New York, New York 10019
    
    
    7,964
    (2)
    
    
    5.4
    %Named executive officers and directors:(3)Douglas Waugaman
    
    
    2,478
    (4)
    
    
    1.7
    %Sanjay Swani
    
    
    115,518
    (5)
    
    
    78.5
    %Jerry Vaughn
    
    
    250
    (6)
    
    
    *Allan Villegas
    
    
    1,179
    (7)
    
    
    *William Armstead
    
    
    744
    (8)
    
    
    *Jody Miller
    
    
    1,284
    (9)
    
    
    *Ronald Halchishak
    
    
    150
    (10)
    
    
    *Ronald Valenta
    
    
    4,000
    
    
    
    2.7
    %James Robertson
    
    
    1,973
    
    
    
    1.3
    %Anthony de Nicola
    
    
    16
    (11)
    
    
    *Michael Donovan
    
    
    115,518
    (12)
    
    
    78.5
    %James Martell
    
    
    1,309
    (13)
    
    
    *All directors and executive officers as a group (12 persons)
    
    
    128,901
    
    
    
    87.6
    %
 
 *
    
    Represents less than 1%(1)
    
    Consists of 5,325 shares held of record by WCAS Capital Partners IV, L.P., 95 shares held by
WCAS Management Corporation and 110,097 shares held by Welsh, Carson, Anderson and Stowe X,
L.P.(2)
    
    Lehman Brothers Holdings Inc. is the ultimate controlling entity of Lehman Brothers
Co-Investment Partners L.P., Lehman Brothers Co-Investment Capital Partners L.P. and Lehman
Brothers Co-Investment Group L.P. Lehman Brothers Holdings Inc. has the sole power to dispose
of the shares.(3)
    
    Unless otherwise indicated, the address of each of the named individuals is c/o MSG WC
Holdings Corp., 700 North Brand Boulevard, Suite 1000, Glendale, California 91203.(4)
    
    Includes 1,480 shares subject to outstanding options that are exercisable within 60 days.(5)
    
    Mr. Swani is a general partner of Welsh Carson and may be deemed to beneficially own the
shares owned by Welsh Carson and its affiliated entities.(6)
    
    Includes 250 shares subject to outstanding options that are exercisable within 60 days.(7)
    
    Includes 397 shares subject to outstanding options that are exercisable within 60 days.(8)
    
    Includes 397 shares subject to outstanding options that are exercisable within 60 days.(9)
    
    Includes 397 shares subject to outstanding options that are exercisable within 60 days.(10)
    
    Includes 150 shares subject to outstanding options that are exercisable within 60 days.(11)
    
    Mr. de Nicola is a general partner of Welsh Carson and may be deemed to beneficially own the
shares owned by Welsh Carson and its affiliated entities.(12)
    
    Mr. Donovan is a principal at Welsh Carson and may be deemed to beneficially own the shares
owned by Welsh Carson and its affiliated entities.(13)
    
    Includes 1,150 shares subject to outstanding options that are exercisable within 60 days.  59




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##### Table of Contents



ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
 Management Agreement
   Stockholders Agreement
     60




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##### Table of Contents



Registration Rights Agreement
  Indemnification Agreements
  Transactions with CMSI Capital Holdings, Inc.
   61




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##### Table of Contents



Share Issuances to and Purchases from Directors and Executive Officers
  
    
    301 shares of common stock to The Wilson Trust dated August 24, 2000, a
revocable living trust of Christopher Wilson, upon the exercise of an incentive stock
option by Mr. Wilson and the payment of $180,600 in March 2007;
    
    159.29 shares of common stock to James Martell for $200,000 in August 2006;
    
    15.9 shares of common stock to de Nicola Holdings, an entity controlled by
Anthony de Nicola for $20,000 in August 2006;
    
    41 shares of common stock to Gilbert Gomez for $51,479.19 in August 2006;
    
    998 shares of common stock to Douglas Waugaman for $1,253,078.80 in August
2006;
    
    4,000 shares of common stock to Ronald Valenta for $5,022,360 in August 2006;
    
    1,310.13 shares of Series L Preferred Stock to Windward Capital Partners II, LP
for $131,013 in November 2002;
    
    40.90 shares of Series L Preferred Stock to Windward Capital LP II, LLC for
$4,090 in November 2002;
    
    43.16 shares of Series L Preferred Stock to the Robertson Living Trust dated
March 7, 2000, a revocable living trust of James Robertson, for $4,316 in November
2002; and
    
    7.68 shares of Series L Preferred Stock to Kevin Mellifont for $768 in November
2002.
  
    
    80.8064 shares of common stock from Les Quillet for $18,721 in April 2004;
    
    1,310.13 shares of Series L Preferred Stock from Windward Capital Partners II,
LP for $145,001 in December 2003;
    
    40.90 shares of Series L Preferred Stock from Windward Capital LP II, LLC for
$6,269 in December 2003;
    
    43.16 shares of Series L Preferred Stock from the Robertson Living Trust dated
March 7, 2000 for $4,832 in December 2003; and
    
    7.68 shares of Series L Preferred Stock from Kevin Mellifont for $859 in
December 2003.
 Transactions with PV Realty, L.L.C.
   62




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##### Table of Contents



Board Retention and Consulting Agreement with Mr. Valenta
   Board Retention and Consulting Agreement with Mr. Martell
  th th
  63




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##### Table of Contents



Board Retention and Consulting Agreement with Mr. Robertson
  Policies and Procedures for Related Party Transactions
  Corporate Governance
   64




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##### Table of Contents



ITEM
14. PRINCIPAL ACCOUNTING FEES AND SERVICES
  Fees Billed By Ernst & Young LLP
  Year ended December 31,2007
    
    
    2006Audit fees
    
    $
    603,612
    
    
    $
    836,512Audit-related fees
    
    
    15,227
    
    
    
    Tax fees
    
    
    45,825
    
    
    
    27,975All other fees
    
    
    
    
    
    
    43,677Total
    
    $
    664,664
    
    
    $
    908,164
 Audit fees.
 Audit-related fees
 Tax fees
 All other fees
  
 ITEM
15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
 (a)
    
    Exhibits.
 See Exhibit Index.
 (b)
    
    Financial Statements:
 (1)
    
    The financial statements required to be included in this Report
are included at pages F-1 to F-37.(2)
    
    The following financial statement schedule for the years ended
December 31, 2005, 2006 and 2007 is filed with our Annual Report on Form 10-K
for fiscal year ended December 31, 2007:
 Schedule II  Valuation and Qualifying Accounts.All other schedules have been omitted because they are not applicable or
not required.
  65




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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Description2.1
    
    
    Agreement and Plan of Merger, dated May 24, 2006, by and among MSG WC Holdings
Corp., MSG WC Acquisition Corp., Mobile Services Group, Inc. and target
stockholder representative (incorporated by reference to Exhibit 2.1 to the
Registrants Form S-4 filed on September 18, 2007).2.2
    
    
    Amendment to Agreement and Plan of Merger, dated June 7, 2006, by and among
MSG WC Holdings Corp., MSG WC Acquisition Corp., Mobile Services Group, Inc.
and target stockholder representative (incorporated by reference to Exhibit
2.2 to the Registrants Form S-4 filed on September 18, 2007).2.3
    
    
    Agreement and Plan of Merger, dated February 22, 2008, among Mobile Mini,
Inc., MSG WC Holdings Corp., Cactus Merger Sub, Inc., and Welsh, Carson,
Anderson & Stowe X, L.P. (incorporated by reference to Exhibit 2.1 to the
Registrants Form 8-K filed on February 28, 2008).3.1
    
    
    Restated Certificate of Incorporation of Mobile Services Group, Inc.
(incorporated by reference to Exhibit 3.1 to the Registrants Form S-4 filed
on September 18, 2007).3.2
    
    
    By-laws of Mobile Services Group, Inc. (incorporated by reference to Exhibit
3.2 to the Registrants Form S-4 filed on September 18, 2007).3.3
    
    
    Amendment to By-laws of Mobile Services Group, Inc. (incorporated by reference
to Exhibit 3.3 to the Registrants Form S-4 filed on September 18, 2007).3.4
    
    
    Certificate of Incorporation of Mobile Storage Group, Inc. (incorporated by
reference to Exhibit 3.4 to the Registrants Form S-4 filed on September 18,
2007).3.5
    
    
    By-laws of Mobile Storage Group, Inc. (incorporated by reference to Exhibit
3.5 to the Registrants Form S-4 filed on September 18, 2007).3.6
    
    
    Articles of Incorporation of A Better Mobile Storage Company (incorporated by
reference to Exhibit 3.6 to the Registrants Form S-4 filed on September 18,
2007).3.7
    
    
    By-laws of A Better Mobile Storage Company (incorporated by reference to
Exhibit 3.7 to the Registrants Form S-4 filed on September 18, 2007).3.8
    
    
    Certificate of Limited Partnership of Mobile Storage Group (Texas), L.P.
(incorporated by reference to Exhibit 3.8 to the Registrants Form S-4 filed
on September 18, 2007).3.9
    
    
    Amended and Restated Limited Partnership Agreement of Mobile Storage Group
(Texas), L.P. (incorporated by reference to Exhibit 3.9 to the Registrants
Form S-4 filed on September 18, 2007).4.1
    
    
    Indenture, dated August 1, 2006, by and among Mobile Services Group, Inc.,
Mobile Storage Group, Inc., subsidiary guarantors named therein and Wells
Fargo Bank, N.A. (incorporated by reference to Exhibit 4.1 to the Registrants
Form S-4 filed on September 18, 2007).4.2
    
    
    Contractual Rights Agreement, dated August 1, 2006, by and among Foxkirk, LLC
and WCAS Capital Partners IV, L.P. (incorporated by reference to Exhibit 4.2
to the Registrants Form S-4 filed on September 18, 2007).4.4
    
    
    Registration Rights Agreement, dated August 1, 2006, by and among Mobile
Services Group, Inc., Mobile Storage Group, Inc., guarantors named therein,
Lehman Brothers Inc., Goldman, Sachs & Co. and Wachovia Capital Markets, LLC.
(incorporated by reference to Exhibit 4.4 to the Registrants Form S-4 filed
on September 18, 2007).4.5
    
    
    Note Purchase Agreement, dated August 1, 2006, by and among MSG WC Holdings
Corp. and the purchasers named therein (incorporated by reference to Exhibit
4.5 to the Registrants Form S-4 filed on September 18, 2007).4.6
    
    
    Stockholders Agreement, dated August 1, 2006, by and among MSG WC Holdings
Corp, Welsh, Carson, Anderson & Stowe X, L.P., WCAS Capital Partners IV, L.P.,
WCAS Management Corporation, de Nicola Holdings, L.P., certain co-investors
and certain management stockholders (incorporated by reference to Exhibit 4.6
to the Registrants Form S-4 filed on September 18, 2007).10.1
    
    
    Amended and Restated Credit Agreement, dated December 30, 2005, by and among
the Lenders, Bank of America, N.A., Mobile Storage Group, Inc., Mobile
Services Group, Inc. and Banc of America Securities, LLC (incorporated by
reference to Exhibit 10.1 to the Registrants Form S-4 filed on September 18,
2007).
  66




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##### Table of Contents



Exhibit No.
    
    Description10.2
    
    
    Amended and Restated UK Credit Agreement, dated December 30, 2005, by and
among the UK Lenders, Bank of America, N.A., Mobile Storage Group, Inc.,
Mobile Services Group, Inc. and Banc of America Securities, LLC (incorporated
by reference to Exhibit 10.2 to the Registrants Form S-4 filed on September
18, 2007).10.3
    
    
    Credit Agreement, dated August 1, 2006, by and among the Lenders, The CIT
Group/Business Credit, Inc., Mobile Storage Group, Inc., Mobile Services
Group, Inc., MSG WC Holdings Corp., MSG WC Intermediary Co., CIT Capital
Securities LLC, Lehman Brothers Inc., Wachovia Capital Finance Corporation
(Western), Merrill Lynch Capital Corporation and Textron Financial Corporation
(incorporated by reference to Exhibit 2.1 to the Registrants Form 10.3 filed
on September 18, 2007).10.4
    
    
    UK Credit Agreement, dated August 1, 2006, by and among the Lenders, The CIT
Group/Business Credit, Inc., Mobile Storage Group, Inc., Mobile Services
Group, Inc., MSG WC Holdings Corp., MSG WC Intermediary Co., Ravenstock MSG
Limited, CIT Capital Securities LLC, Lehman Brothers Inc., Wachovia Capital
Finance Corporation (Western), Merrill Lynch Capital Corporation and Textron
Financial Corporation (incorporated by reference to Exhibit 10.4 to the
Registrants Form S-4 filed on September 18, 2007).10.5
    
    
    Office Lease Agreement between EOP-700 North Brand, L.L.C. and Mobile Storage
Group, Inc. (incorporated by reference to Exhibit 10.5 to the Registrants
Form S-4 filed on September 18, 2007).10.6
    
    
    MSG WC Holdings Corp. 2006 Stock Option Plan (incorporated by reference to
Exhibit 10.6 to the Registrants Form S-4 filed on September 18, 2007).*10.7
    
    
    MSG WC Holdings Corp. 2006 Stock Incentive Plan (incorporated by reference to
Exhibit 10.7 to the Registrants Form S-4 filed on September 18, 2007).*10.8
    
    
    MSG WC Holdings Corp. 2006 Employee Stock Option Plan (incorporated by
reference to Exhibit 10.8 to the Registrants Form S-4 filed on September 18,
2007).*10.9
    
    
    Amended and Restated Employment Agreement, dated August 1, 2006, by and among
Douglas A. Waugaman, Mobile Storage Group, Inc. and MSG WC Holdings Corp.
(incorporated by reference to Exhibit 10.9 to the Registrants Form S-4 filed
on September 18, 2007).*10.10
    
    
    Employment Agreement, dated October 4, 2005, by and among Allan A. Villegas
and Mobile Storage Group, Inc. (incorporated by reference to Exhibit 10.10 to
the Registrants Form S-4 filed on September 18, 2007).*10.11
    
    
    Employment Agreement, dated November 9, 2005, by and among Christopher A.
Wilson and Mobile Storage Group, Inc. (incorporated by reference to Exhibit
10.11 to the Registrants Form S-4 filed on September 18, 2007).*10.12
    
    
    Employment Agreement, dated August 19, 2004, by and among William Armstead and
Mobile Storage Group, Inc. (incorporated by reference to Exhibit 10.12 to the
Registrants Form S-4 filed on September 18, 2007).*10.13
    
    
    Employment Agreement, dated January 13, 2004, by and among Jody E. Miller and
Mobile Storage Group, Inc. (incorporated by reference to Exhibit 10.13 to the
Registrants Form S-4 filed on September 18, 2007).*10.14
    
    
    Employment Agreement, dated February 12, 2006, by and among Gilbert Gomez and
Mobile Storage Group, Inc. (incorporated by reference to Exhibit 10.14 to the
Registrants Form S-4 filed on September 18, 2007).*10.15
    
    
    Employment Agreement, dated June 1, 2004, by and among Lynn Courville and
Mobile Storage Group, Inc. (incorporated by reference to Exhibit 10.15 to the
Registrants Form S-4 filed on September 18, 2007).*10.16
    
    
    Amended and Restated Employment Agreement, dated November 7, 2006, by and
among Jerry E. Vaughn, Mobile Storage Group, Inc. and MSG WC Holdings Corp.
(incorporated by reference to Exhibit 10.16 to the Registrants Form S-4 filed
on September 18, 2007).*10.17
    
    
    Employment Agreement, dated July 17, 2007, by and among Ron Halchishak, Mobile
Storage Group, Inc. and Mobile Services Group, Inc. (incorporated by reference
to Exhibit 10.17 to the Registrants Form S-4 filed on September 18, 2007).*10.18
    
    
    Offer Letter, dated October 15, 2004, from Mobile Storage Group, Inc. to
Jeffrey A. Kluckman. (incorporated by reference to Exhibit 10.18 to the
Registrants Form S-4 filed on September 18, 2007).*10.19
    
    
    Statement of Particulars of Employment of Ronald Halchishak with Ravenstock
MSG Ltd, dated July 17, 2007 (incorporated by reference to Exhibit 10.19 to
the Registrants Form S-4 filed on September 18, 2007).*
  67




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##### Table of Contents



Exhibit No.
    
    Description10.20
    
    
    Employment Agreement, dated December 31, 2006, by and among Jeffry E. Jones,
Mobile Storage Group, Inc. and Mobile Services Group, Inc.*10.21
    
    
    Amendment to Employment Agreement, dated November 5, 2007, by and among Lynn
Courville and Mobile Storage Group, Inc.*10.22
    
    
    Amendment to Employment Agreement, dated December 2007, by and among Gilbert
Gomez and Mobile Storage Group, Inc.*10.23
    
    
    Amendment to Employment Agreement, dated November 5, 2007, by and among
William Armstead and Mobile Storage Group, Inc.*10.24
    
    
    Employment Agreement, dated November 5, 2007, by and among Jeffrey A. Kluckman
and Mobile Storage Group, Inc.*10.25
    
    
    Management Services Agreement, dated August 1, 2006, by and among Mobile
Services Group, Inc., MSG WC Holdings Corp. and WCAS Management Corporation
(incorporated by reference to Exhibit 10.20 to the Registrants Form S-4 filed
on September 18, 2007).10.26
    
    
    Indemnification Agreement, dated May 10, 2006, by and among Mobile Storage
Group, Inc., Mobile Services Group, Inc. and Christopher A. Wilson
(incorporated by reference to Exhibit 10.21 to the Registrants Form S-4 filed
on September 18, 2007).10.27
    
    
    Indemnification Agreement, dated May 10, 2006, by and among Mobile Storage
Group, Inc., Mobile Services Group, Inc. and Allan A. Villegas (incorporated
by reference to Exhibit 10.22 to the Registrants Form S-4 filed on September
18, 2007).10.28
    
    
    Indemnification Agreement, dated May 10, 2006, by and among Mobile Storage
Group, Inc., Mobile Services Group, Inc. and Douglas A. Waugaman (incorporated
by reference to Exhibit 10.23 to the Registrants Form S-4 filed on September
18, 2007).10.29
    
    
    Board Retention and Consulting Agreement, dated January 31, 2007, by and among
Mobile Storage Group, Inc., MSG WC Holdings Corp. and Ronald F. Valenta
(incorporated by reference to Exhibit 10.24 to the Registrants Form S-4 filed
on September 18, 2007).10.30
    
    
    Board Retention and Consulting Agreement, dated August 28, 2006, by and among
Mobile Storage Group, Inc., MSG WC Holdings Corp. and Jim Martell
(incorporated by reference to Exhibit 10.25 to the Registrants Form S-4 filed
on September 18, 2007).10.31
    
    
    Consulting Agreement, dated May 1, 2003, by and among Mobile Storage Group,
Inc. and Ronald F. Valenta (incorporated by reference to Exhibit 10.26 to the
Registrants Form S-4 filed on September 18, 2007).*10.32
    
    
    Mobile Storage Group, Inc. 2007 Corporate Incentive Plan Executive Plan
(incorporated by reference to Exhibit 10.27 to the Registrants Form S-4/A
filed on October 25, 2007).10.33
    
    
    2007 U.K. Special Incentive Plan (incorporated by reference to Exhibit 10.28
to the Registrants Form S-4/A filed on October 25, 2007).12.1
    
    
    Statement re Calculation of Ratio of Earnings to Fixed Charges21.1
    
    
    Subsidiaries of Registrants.31.1
    
    
    Certification of the Chief Executive Officer of Mobile Services Group, Inc.
required by Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    
    Certification of the Chief Financial Officer of Mobile Services Group, Inc.
required by Section 302 of the Sarbanes-Oxley Act of 200231.3
    
    
    Certification of the Chief Executive Officer of Mobile Storage Group, Inc.
required by Section 302 of the Sarbanes-Oxley Act of 200231.4
    
    
    Certification of the Chief Financial Officer of Mobile Storage Group, Inc.
required by Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    
    Certification of the Chief Executive Officer of Mobile Services Group, Inc.
required by Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    
    Certification of the Chief Financial Officer of Mobile Services Group, Inc.
required by Section 906 of the Sarbanes-Oxley Act of 200232.3
    
    
    Certification of the Chief Executive Officer of Mobile Storage Group, Inc.
required by Section 906 of the Sarbanes-Oxley Act of 2002
  68




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Exhibit No.
    
    Description32.4
    
    
    Certification of the Chief Financial Officer of Mobile Storage Group, Inc.
required by Section 906 of the Sarbanes-Oxley Act of 2002
 
 *
    
    Denotes management contract or compensatory plan or arrangement.  69




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##### Table of Contents



SIGNATURES
  MOBILE SERVICES GROUP, INC.MOBILE STORAGE GROUP, INC.By:
    /s/ Douglas WaugamanName:
    Douglas WaugamanTitle:
    President and Chief Executive Officer  Signature
    
    Title
    
    Date/s/ Douglas WaugamanDouglas Waugaman
    
    President, Chief Executive Officer and Director(Principal Executive Officer)
    
    March 18, 2008/s/ Allan VillegasAllan Villegas
    
    Chief Financial Officer(Principal Financial and Accounting Officer)
    
    March 18, 2008/s/ Sanjay SwaniSanjay Swani
    
    Chairman of the Board of Directors
    
    March 18, 2008/s/ Anthony de NicolaAnthony de Nicola
    
    Director
    
    March 18, 2008/s/ Michael DonovanMichael Donovan
    
    Director
    
    March 18, 2008/s/ James MartellJames Martell
    
    Director
    
    March 18, 2008/s/ James RobertsonJames Robertson
    
    Director
    
    March 18, 2008/s/ Ronald ValentaRonald Valenta
    
    Director
    
    March 18, 2008
  70




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##### Table of Contents



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 MOBILE SERVICES GROUP, INC.
 PageANNUAL CONSOLIDATED FINANCIAL STATEMENTS:Report of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets as of December 31, 2006 and 2007
    
    
    F-3Consolidated Statements of Operations for the year ended December 31, 2005, the
periods from January 1, 2006 to August 1, 2006, and from August 2, 2006 to
December 31, 2006, and the year ended December 31, 2007
    
    
    F-4Consolidated Statements of Stockholders Equity for the year ended December 31, 2005, the
periods from January 1, 2006 to August 1, 2006, and from August 2, 2006 to
December 31, 2006, and the year ended December 31, 2007
    
    
    F-5Consolidated Statements of Cash Flows for the year ended December 31, 2005, the
periods from January 1, 2006 to August 1, 2006, and from August 2, 2006 to
December 31, 2006, and the year ended December 31, 2007
    
    
    F-6Notes to Consolidated Financial Statements
    
    
    F-8
  F-1




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
      /s/ Ernst & Young LLP 
  F-2




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
 
 CONSOLIDATED BALANCE SHEETS
 (Dollars in thousands, except per share data)
 SuccessorDecember 31,2006
    
    
    2007Assets:Cash and cash equivalents
    
    $
    1,469
    
    
    $
    2,331Accounts receivable, net of allowance for doubtful accounts of $701 and
$1,316 at December 31, 2006 and 2007, respectively
    
    
    30,582
    
    
    
    34,595Inventories
    
    
    5,550
    
    
    
    14,492Lease equipment, net of accumulated depreciation of $5,384 and $17,622 at
December 31, 2006 and 2007, respectively
    
    
    301,630
    
    
    
    344,415Property and equipment, net of accumulated depreciation of $1,617 and $6,534
at December 31, 2006 and 2007, respectively
    
    
    19,973
    
    
    
    29,077Goodwill
    
    
    296,854
    
    
    
    313,885Other intangible assets, net
    
    
    77,955
    
    
    
    76,402Deferred financing costs, net
    
    
    15,246
    
    
    
    13,111Prepaid expenses and other assets
    
    
    5,342
    
    
    
    7,648Assets held for sale and discontinued operations
    
    
    7,567
    
    
    
    64Total assets
    
    $
    762,168
    
    
    $
    836,020Liabilities:Accounts payable
    
    $
    11,169
    
    
    $
    13,911Accrued liabilities
    
    
    22,567
    
    
    
    28,945Customer deposits
    
    
    5,998
    
    
    
    6,420Senior revolving credit facility
    
    
    172,267
    
    
    
    218,737Capital leases and other notes payable
    
    
    3,268
    
    
    
    7,6039 3/4% Senior Notes Due 2014
    
    
    200,000
    
    
    
    200,000Deferred income taxes
    
    
    72,403
    
    
    
    69,789Total liabilities
    
    
    487,672
    
    
    
    545,405Commitments and contingenciesStockholders equity:Common stock, $0.001 par value, 1,200,000 shares authorized, 1,000 shares
issued and outstanding at December 31, 2006 and 2007, respectively
    
    
    265,538
    
    
    
    268,706Notes receivable from stockholders
    
    
    (610
    )
    
    
    Accumulated other comprehensive income
    
    
    4,191
    
    
    
    5,856Retained earnings
    
    
    5,377
    
    
    
    16,053Total stockholders equity
    
    
    274,496
    
    
    
    290,615Total liabilities and stockholders equity
    
    $
    762,168
    
    
    $
    836,020
   F-3




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (Dollars in thousands)
 Predecessor
    
    
    SuccessorPeriod from
    
    
    Period fromYear Ended
    
    
    January 1, 2006
    
    
    August 2, 2006
    
    
    Year EndedDecember 31,
    
    
    to August 1,
    
    
    to December 31,
    
    
    December 31,2005
    
    
    2006
    
    
    2006
    
    
    2007Revenues:Lease and lease related
    
    $
    143,417
    
    
    $
    91,088
    
    
    $
    75,596
    
    
    $
    192,318Sales
    
    
    35,584
    
    
    
    22,410
    
    
    
    14,812
    
    
    
    40,809Total revenues
    
    
    179,001
    
    
    
    113,498
    
    
    
    90,408
    
    
    
    233,127Costs and expenses:Cost of sales
    
    
    27,114
    
    
    
    16,223
    
    
    
    10,289
    
    
    
    28,784Trucking and yard costs
    
    
    44,764
    
    
    
    27,965
    
    
    
    23,053
    
    
    
    58,833Depreciation and amortization
    
    
    19,471
    
    
    
    12,191
    
    
    
    8,223
    
    
    
    22,216Selling, general and administrative
expenses
    
    
    46,909
    
    
    
    32,103
    
    
    
    25,797
    
    
    
    70,475Management fees
    
    
    400
    
    
    
    329
    
    
    
    29
    
    
    
    Acquisition transaction expenses
    
    
    
    
    
    
    40,306
    
    
    
    
    
    
    
    Income (loss) from operations
    
    
    40,343
    
    
    
    (15,619
    )
    
    
    23,017
    
    
    
    52,819Other income (expense):Interest expense, net
    
    
    (26,249
    )
    
    
    (15,557
    )
    
    
    (14,832
    )
    
    
    (38,213
    )Foreign currency translation gain (loss)
    
    
    (1,386
    )
    
    
    212
    
    
    
    74
    
    
    
    714Loss on early extinguishment of debt
    
    
    (780
    )
    
    
    
    
    
    
    
    
    
    
    Other income (expense)
    
    
    (241
    )
    
    
    (84
    )
    
    
    (58
    )
    
    
    (141
    )Income (loss) from continuing operations
before provision (benefit) for income
taxes
    
    
    11,687
    
    
    
    (31,048
    )
    
    
    8,201
    
    
    
    15,179Provision (benefit) for income taxes
    
    
    4,652
    
    
    
    (9,240
    )
    
    
    3,012
    
    
    
    3,393Income (loss) from continuing operations
    
    
    7,035
    
    
    
    (21,808
    )
    
    
    5,189
    
    
    
    11,786Income (loss) from discontinued
operations (net of tax provision of
$122, $225 and $125 for the year 2005,
and the periods from January 1 to August
1, 2006 and from August 2 to December
31, 2006 respectively, and net of tax
benefit of $697 for the year 2007)
    
    
    184
    
    
    
    337
    
    
    
    188
    
    
    
    (1,110
    )Net income (loss)
    
    $
    7,219
    
    
    $
    (21,471
    )
    
    $
    5,377
    
    
    $
    10,676
   F-4




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 (Dollars in thousands, except per share data)
 Notes
    
    
    Accumulated
    
    
    RetainedPreferred Stock
    
    
    Common Stock
    
    
    Receivable
    
    
    Other
    
    
    EarningsNumber of
    
    
    
    
    
    
    Number of
    
    
    
    
    
    
    From
    
    
    Comprehensive
    
    
    (AccumulatedShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Stockholders
    
    
    Income (Loss)
    
    
    Deficit)
    
    
    TotalPredecessor:Balances, January 1, 2005
    
    
    4,489,000
    
    
    
    21,621
    
    
    
    220,000
    
    
    
    63,941
    
    
    
    
    
    
    
    18,883
    
    
    
    (17,607
    )
    
    
    86,838Redemption of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (52
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (52
    )Redemption of Series B, H, I and J preferred
stock, including cumulative dividends
    
    
    (210,000
    )
    
    
    (2,096
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (405
    )
    
    
    (2,501
    )Preferred stock dividends, $1.07 per share in
cash
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,468
    )
    
    
    (2,468
    )Comprehensive income (loss):Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,219
    
    
    
    7,219Adjustment for foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,172
    )
    
    
    
    
    
    
    (8,172
    )Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (953
    )Balances, December 31, 2005
    
    
    4,279,000
    
    
    
    19,525
    
    
    
    220,000
    
    
    
    63,889
    
    
    
    
    
    
    
    10,711
    
    
    
    (13,261
    )
    
    
    80,864Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,041
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,041Redemption of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8
    )Redemption of Series G and K preferred stock,
including cumulative dividends
    
    
    (2,360,000
    )
    
    
    (236
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (702
    )
    
    
    (938
    )Preferred stock dividends, $0.54 per share in
cash
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,159
    )
    
    
    (1,159
    )Comprehensive income (loss):Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21,471
    )
    
    
    (21,471
    )Adjustment for foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,495
    
    
    
    
    
    
    
    5,495Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,976
    )Balances, August 1, 2006
    
    
    1,919,000
    
    
    
    19,289
    
    
    
    220,000
    
    
    
    66,922
    
    
    
    
    
    
    
    16,206
    
    
    
    (36,593
    )
    
    
    65,824Elimination of historical stockholders
equity upon consummation of the Acquisition
    
    
    (1,919,000
    )
    
    
    (19,289
    )
    
    
    (220,000
    )
    
    
    (66,922
    )
    
    
    
    
    
    
    (16,206
    )
    
    
    36,593
    
    
    
    (65,824
    )Successor:Balances, August 2, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Equity contributions
    
    
    
    
    
    
    
    
    
    
    1,000
    
    
    
    263,876
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    263,876Notes receivable from stockholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (610
    )
    
    
    
    
    
    
    
    
    
    
    (610
    )Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,662
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,662Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,377
    
    
    
    5,377Adjustment for foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,191
    
    
    
    
    
    
    
    4,191Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,568Balances, December 31, 2006
    
    
    
    
    
    
    
    
    
    
    1,000
    
    
    
    265,538
    
    
    
    (610
    )
    
    
    4,191
    
    
    
    5,377
    
    
    
    274,496Notes paid by stockholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    610
    
    
    
    
    
    
    
    
    
    
    
    610Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,988
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,988Exercise of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    180
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    180Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,676
    
    
    
    10,676Adjustment for foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,665
    
    
    
    
    
    
    
    1,665Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,341Balances, December 31, 2007
    
    
    
    
    
    $
    
    
    
    
    1,000
    
    
    $
    268,706
    
    
    $
    
    
    
    $
    5,856
    
    
    $
    16,053
    
    
    $
    290,615
   F-5




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Dollars in thousands)
 Predecessor
    
    
    SuccessorPeriod from
    
    
    Period fromYear Ended
    
    
    January 1, 2006
    
    
    August 2, 2006
    
    
    Year EndedDecember 31,
    
    
    to August 1,
    
    
    to December 31,
    
    
    December 31,2005
    
    
    2006
    
    
    2006
    
    
    2007Operating activitiesNet income (loss)
    
    $
    7,219
    
    
    $
    (21,471
    )
    
    $
    5,377
    
    
    $
    10,676(Income) Loss from discontinued operations
    
    
    (184
    )
    
    
    (337
    )
    
    
    (188
    )
    
    
    1,110Income (loss) from continuing operations
    
    
    7,035
    
    
    
    (21,808
    )
    
    
    5,189
    
    
    
    11,786Adjustments to reconcile income (loss) from continuing
operations to net cash provided by operating activities:Foreign currency translation loss (gain)
    
    
    1,386
    
    
    
    (212
    )
    
    
    (74
    )
    
    
    (714
    )Loss on early extinguishment of debt
    
    
    780
    
    
    
    
    
    
    
    
    
    
    
    Provision for doubtful accounts
    
    
    768
    
    
    
    744
    
    
    
    147
    
    
    
    1,644Write-off of receivables due from affiliates
    
    
    
    
    
    
    527
    
    
    
    
    
    
    
    Amortization of deferred financing costs and original
issue discount
    
    
    3,180
    
    
    
    2,107
    
    
    
    1,093
    
    
    
    3,311Depreciation
    
    
    17,822
    
    
    
    11,246
    
    
    
    7,001
    
    
    
    18,385Amortization
    
    
    1,649
    
    
    
    945
    
    
    
    1,222
    
    
    
    3,831Acceleration of original issue discount and prepayment
penalty on Subordinated Notes
    
    
    
    
    
    
    11,450
    
    
    
    
    
    
    
    Write-off of deferred financing costs
    
    
    
    
    
    
    8,144
    
    
    
    
    
    
    
    Deferred income taxes
    
    
    3,616
    
    
    
    (10,386
    )
    
    
    2,365
    
    
    
    3,004Stock-based compensation
    
    
    
    
    
    
    3,041
    
    
    
    1,662
    
    
    
    3,168Changes in operating assets and liabilities:Accounts receivable
    
    
    (1,513
    )
    
    
    (1,452
    )
    
    
    (1,575
    )
    
    
    (6,162
    )Inventories
    
    
    (3,944
    )
    
    
    (5,652
    )
    
    
    797
    
    
    
    (9,495
    )Prepaid expenses and other assets
    
    
    (1,071
    )
    
    
    (580
    )
    
    
    (43
    )
    
    
    (2,355
    )Accounts payable and accrued liabilities
    
    
    5,458
    
    
    
    5,969
    
    
    
    6,770
    
    
    
    9,015Accrued Acquisition Transaction Expenses
    
    
    
    
    
    
    17,162
    
    
    
    
    
    
    
    Net cash provided by operating activities  continuing
Operations
    
    
    35,166
    
    
    
    21,245
    
    
    
    24,554
    
    
    
    35,418Net cash provided by operating activities 
discontinued operations
    
    
    29
    
    
    
    55
    
    
    
    48
    
    
    
    7,350Net cash provided by operating activities
    
    
    35,195
    
    
    
    21,300
    
    
    
    24,602
    
    
    
    42,768Investing activitiesAcquisition of Predecessor
    
    
    
    
    
    
    
    
    
    
    (317,138
    )
    
    
    Acquisition payment of Predecessor transaction expenses
    
    
    
    
    
    
    
    
    
    
    (17,162
    )
    
    
    Other acquisitions, net
    
    
    (4,890
    )
    
    
    (8,757
    )
    
    
    (12,155
    )
    
    
    (31,039
    )Purchases of lease equipment
    
    
    (32,466
    )
    
    
    (17,109
    )
    
    
    (17,483
    )
    
    
    (38,931
    )Purchases of property and equipment
    
    
    (6,266
    )
    
    
    (2,416
    )
    
    
    (2,198
    )
    
    
    (7,427
    )Proceeds from assets held for sale
    
    
    1,024
    
    
    
    
    
    
    
    
    
    
    
    Net cash used in investing activities
    
    
    (42,598
    )
    
    
    (28,282
    )
    
    
    (366,136
    )
    
    
    (77,397
    )Financing activitiesBorrowings (payments) under BofA Credit Facility
    
    
    18,590
    
    
    
    11,060
    
    
    
    (192,278
    )
    
    
    Borrowings under New Credit Facility
    
    
    
    
    
    
    
    
    
    
    168,592
    
    
    
    52,717Payments under New Credit Facility
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,784
    )Redemption of Subordinated Notes
    
    
    
    
    
    
    
    
    
    
    (83,200
    )
    
    
    Issuance of 9 3/4% Senior Notes due 2014
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    
    Deferred financing costs
    
    
    (2,600
    )
    
    
    (1,160
    )
    
    
    (15,313
    )
    
    
    Payments on capital leases and notes payable
    
    
    (1,620
    )
    
    
    (562
    )
    
    
    (208
    )
    
    
    (1,176
    )Proceeds on note receivable from stockholder
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    610Proceeds from exercise of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    180Equity contributions
    
    
    
    
    
    
    
    
    
    
    263,266
    
    
    
    Redemption of Predecessor common stock
    
    
    (52
    )
    
    
    (8
    )
    
    
    
    
    
    
    Predecessor preferred stock dividends paid
    
    
    (2,468
    )
    
    
    (1,159
    )
    
    
    
    
    
    
    Predecessor redemptions of preferred stock
    
    
    (2,501
    )
    
    
    (938
    )
    
    
    
    
    
    
    Net cash provided by financing activities
    
    
    9,349
    
    
    
    7,233
    
    
    
    340,859
    
    
    
    35,547Effect of foreign exchange rate changes on cash
    
    
    (1,946
    )
    
    
    (251
    )
    
    
    2,144
    
    
    
    (56
    )Net increase in cash
    
    
    
    
    
    
    
    
    
    
    1,469
    
    
    
    862Cash and cash equivalents at beginning of period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,469Cash and cash equivalents at end of period
    
    $
    
    
    
    $
    
    
    
    $
    1,469
    
    
    $
    2,331
   F-6




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
 (Dollars in thousands)
 Predecessor
    
    
    SuccessorPeriod from
    
    
    Period fromYear Ended
    
    
    January 1, 2006
    
    
    August 2, 2006 to
    
    
    Year EndedDecember 31,
    
    
    to August 1,
    
    
    December 31,
    
    
    December 31,2005
    
    
    2006
    
    
    2006
    
    
    2007Supplemental disclosure of cash flow information:Cash paid during the period:Interest
    
    $
    22,858
    
    
    $
    13,550
    
    
    $
    4,848
    
    
    $
    35,161Income taxes (refunded)
    
    $
    1,618
    
    
    $
    1,715
    
    
    $
    553
    
    
    $
    (1,505
    )Supplemental disclosure of noncash investing and
financing activities:Details of acquisitions:Fair value of assets acquired
    
    $
    5,032
    
    
    $
    8,965
    
    
    $
    12,155
    
    
    $
    31,936Liabilities assumed
    
    
    (142
    )
    
    
    (208
    )
    
    
    
    
    
    
    (897
    )Net cash paid in connection with acquisitions
    
    $
    4,890
    
    
    $
    8,757
    
    
    $
    12,155
    
    
    $
    31,039Capitalized lease obligations incurred
    
    $
    
    
    
    $
    229
    
    
    $
    238
    
    
    $
    5,421Issuance of common stock in exchange for notes
receivable
    
    $
    
    
    
    $
    
    
    
    $
    610
    
    
    $
    Accrued payment to Predecessor stockholders
    
    $
    
    
    
    $
    
    
    
    $
    1,089
    
    
    $
    
     F-7




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 1. Business and Basis of Presentation
 Organization and Business
   Acquisition
   (i)
    
    $200,000 of 9 3/4% Senior Notes issued by the Company and its wholly-owned
subsidiary Mobile Storage Group, Inc. on the closing date of the Acquisition; and(ii)
    
    a New Credit Facility, which includes a £85,000 U.K. borrowing sublimit. A
total of $162,000 was drawn on the New Credit Facility on the closing date, including
£37,716 drawn under the Companys U.K. borrowing sublimit. The New Credit Facility
matures on August 1, 2011.
     F-8




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 1. Business and Basis of Presentation (continued)
 Acquisition (continued)
  Accounts receivable
    
    $
    28,163Inventories
    
    
    13,189Lease equipment
    
    
    274,493Property and equipment
    
    
    18,367Goodwill
    
    
    292,568Other intangible assets
    
    
    75,902Deferred financing costs
    
    
    16,171Prepaid expenses and other assets
    
    
    8,694Total assets acquired
    
    
    727,547Accounts payable and accrued liabilities
    
    
    35,085New Credit Facility
    
    
    162,0009 3/4% Senior Notes due 2014
    
    
    200,000Other debt obligations
    
    
    3,135Deferred income taxes
    
    
    63,451Total liabilities assumed
    
    
    463,671Net assets acquired
    
    $
    263,876
  Write-off of deferred financing costs related to the BofA Credit Facility
    
    $
    8,144Payment of original issue discount upon early redemption of Subordinated Notes
    
    
    8,250Prepayment penalty upon early redemption of Subordinated Notes
    
    
    3,200Compensation costs related to the acceleration of vesting of stock options
    
    
    2,341Write-off of receivables due from CMSI Capital Holdings, Inc.
    
    
    527Professional fees and other transaction expenses
    
    
    17,844Acquisition Transaction Expenses
    
    $
    40,306
   F-9




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 1. Business and Basis of Presentation (continued)
 Acquisition (continued)
  PredecessorPeriod fromYear Ended
    
    
    January 1 toDecember 31,
    
    
    August 1,2005
    
    
    2006(Unaudited)Total revenues
    
    $
    179,001
    
    
    $
    113,498Income (loss) from continuing operations
before provision (benefit) for income
taxes
    
    $
    7,004
    
    
    $
    (34,269
    )Net income (loss)
    
    $
    4,409
    
    
    $
    (23,404
    )
 2. Summary of Significant Accounting Policies
 Revenue Recognition
    Cash and Cash Equivalents
   F-10




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 2. Summary of Significant Accounting Policies (continued)
 Concentration of Credit Risk
  Inventories
  Lease Equipment
   Property and Equipment
  Goodwill and Other Intangible Assets
    F-11




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 2. Summary of Significant Accounting Policies (continued)
 Goodwill and Other Intangible Assets (continued)
   2008
    
    $
    3,8002009
    
    
    2,2862010
    
    
    1,6002011
    
    
    1,1772012 and thereafter
    
    
    6,560$
    15,423
 Impairment of Long-Lived Assets
  Accrued Liabilities
  Fair Value of Financial Instruments
  3 4
 Income Taxes
   F-12




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 2. Summary of Significant Accounting Policies (continued)
 Advertising
   Foreign Currency Translation
   Employee Stock Options
    F-13




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 2. Summary of Significant Accounting Policies (continued)
 Employee Stock Options (continued)
  2005Risk-free interest rate range
    
    3.8%-4.2%Expected holding period
    
    5 yearsDividend rate
    
    0.0%Volatility
    
    34.0%
  PredecessorYear EndedDecember 31,2005Net income as reported
    
    $
    7,219Pro forma stock-based employee compensation (cost)
benefit under fair-value method
    
    
    1,041Pro forma net income
    
    $
    8,260
  Comprehensive Income (Loss)
  Segment Information
  Estimates and Assumptions
   F-14




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 2. Summary of Significant Accounting Policies (continued)
 Reclassifications
  Recent Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes Accounting for Income Taxes.
 Fair Value Measurement
 The Fair Value Option for Financial Assets and
Financial Liabilities
   F-15




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 3. Acquisitions
   Predecessor
    
    
    SuccessorPeriod from
    
    
    Period fromYear Ended
    
    
    January 1 to
    
    
    August 2 to
    
    
    Year EndedDecember 31,
    
    
    August 1,
    
    
    December 31,
    
    
    December 31,2005
    
    
    2006
    
    
    2006
    
    
    2007Accounts receivable
    
    $
    28
    
    
    $
    
    
    
    $
    
    
    
    $
    Lease equipment
    
    
    3,178
    
    
    
    6,948
    
    
    
    7,386
    
    
    
    15,224Property and equipment
    
    
    194
    
    
    
    233
    
    
    
    
    
    
    
    1,378Non-compete agreements
    
    
    25
    
    
    
    100
    
    
    
    
    
    
    
    350Goodwill
    
    
    1,159
    
    
    
    1,009
    
    
    
    3,701
    
    
    
    14,173Customer relationships
    
    
    448
    
    
    
    675
    
    
    
    1,068
    
    
    
    811Accrued liabilities
    
    
    (142
    )
    
    
    (208
    )
    
    
    
    
    
    
    (897
    )$
    4,890
    
    
    $
    8,757
    
    
    $
    12,155
    
    
    $
    31,039
  Predecessor
    
    
    SuccessorPeriod from
    
    
    Period fromYear Ended
    
    
    January 1 to
    
    
    August 2 to
    
    
    Year EndedDecember 31,
    
    
    August 1,
    
    
    December 31,
    
    
    December 31,2005
    
    
    2006
    
    
    2006
    
    
    2007(Unaudited)Revenues
    
    $
    179,816
    
    
    $
    113,672
    
    
    $
    91,693
    
    
    $
    239,779Income(loss) from operations
    
    $
    40,959
    
    
    $
    (15,525
    )
    
    $
    23,530
    
    
    $
    55,924Net income (loss)
    
    $
    7,608
    
    
    $
    (21,415
    )
    
    $
    5,685
    
    
    $
    9,008
 4. Property and Equipment
  SuccessorDecember 31,2006
    
    
    2007Land and building
    
    $
    3,876
    
    
    $
    5,218Transportation equipment
    
    
    13,603
    
    
    
    22,439Furniture, fixtures and office equipment
    
    
    3,465
    
    
    
    6,403Leasehold improvements
    
    
    646
    
    
    
    1,55121,590
    
    
    
    35,611Less accumulated depreciation
    
    
    (1,617
    )
    
    
    (6,534
    )$
    19,973
    
    
    $
    29,077
  F-16




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 5. Financing
 Senior Revolving Credit Facility
       F-17




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 5. Financing (continued)
 Senior Revolving Credit Facility (continued)
 plus plus plus
   Subordinated Notes
     F-18




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 5. Financing (continued)
 Senior Notes
 3 4
 Other Notes Payable
  6. Obligations Under Capital Leases
   2008
    
    $
    1,7782009
    
    
    1,7712010
    
    
    1,7012011
    
    
    1,4272012
    
    
    864Thereafter
    
    
    474Total payments
    
    
    8,015Less amounts representing interest
    
    
    (1,358
    )$
    6,657
  F-19




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 7. Income Taxes
  Predecessor
    
    
    SuccessorPeriod from
    
    
    Period fromYear Ended
    
    
    January 1 to
    
    
    August 2 to
    
    
    Year EndedDecember 31,
    
    
    August 1,
    
    
    December 31,
    
    
    December 31,2005
    
    
    2006
    
    
    2006
    
    
    2007Current:Federal
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    73State
    
    
    220
    
    
    
    193
    
    
    
    46
    
    
    
    82Foreign
    
    
    816
    
    
    
    953
    
    
    
    601
    
    
    
    2341,036
    
    
    
    1,146
    
    
    
    647
    
    
    
    389Deferred:Federal
    
    
    2,770
    
    
    
    (9,336
    )
    
    
    1,962
    
    
    
    2,340State
    
    
    365
    
    
    
    (986
    )
    
    
    217
    
    
    
    1,568Foreign
    
    
    481
    
    
    
    (64
    )
    
    
    186
    
    
    
    (904
    )3,616
    
    
    
    (10,386
    )
    
    
    2,365
    
    
    
    3,004$
    4,652
    
    
    $
    (9,240
    )
    
    $
    3,012
    
    
    $
    3,393
   SuccessorDecember 31,2006
    
    
    2007Deferred tax liabilities:Depreciation
    
    $
    72,971
    
    
    $
    73,178Goodwill and other intangible assets
    
    
    30,771
    
    
    
    27,812Transaction gain
    
    
    2,782
    
    
    
    2,730Other
    
    
    671
    
    
    
    15Total deferred tax liabilities
    
    
    107,195
    
    
    
    103,735Deferred tax assets:Tax loss carryforward
    
    
    30,491
    
    
    
    29,170Stock compensation
    
    
    648
    
    
    
    1,861Intangibles amortization
    
    
    2,664
    
    
    
    Other
    
    
    1,651
    
    
    
    3,712Subtotal deferred tax assets
    
    
    35,454
    
    
    
    34,743Valuation allowance
    
    
    (662
    )
    
    
    (797
    )Total deferred tax assets
    
    
    34,792
    
    
    
    33,946Net deferred tax liability
    
    $
    72,403
    
    
    $
    69,789
  F-20




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 7. Income Taxes (continued)
  Predecessor
    
    
    SuccessorPeriod from
    
    
    Period fromYear Ended
    
    
    January 1 to
    
    
    August 2 to
    
    
    Year EndedDecember 31,
    
    
    August 1,
    
    
    December 31,
    
    
    December 31,2005
    
    
    2006
    
    
    2006
    
    
    2007Statutory federal rate
    
    
    35.0
    %
    
    
    (35.0
    %)
    
    
    35.0
    %
    
    
    34.0
    %Permanent differences
    
    
    0.3
    
    
    
    11.8
    
    
    
    (0.3
    )
    
    
    0.3Foreign permanent and tax rate differences
    
    
    (1.7
    )
    
    
    
    
    
    
    (1.3
    )
    
    
    (13.1
    )State taxes, net of federal benefit
    
    
    4.2
    
    
    
    (2.5
    )
    
    
    3.1
    
    
    
    3.1Valuation allowance
    
    
    
    
    
    
    (4.0
    )
    
    
    
    
    
    
    Other, net
    
    
    2.0
    
    
    
    (0.1
    )
    
    
    0.2
    
    
    
    (1.9
    )39.8
    %
    
    
    (29.8
    %)
    
    
    36.7
    %
    
    
    22.4
    %
    Accounting for
Uncertainty in Income Taxes
 Balance as of January 1, 2007
    
    $
    570Adjustments:Prior year tax positions
    
    
    Current year tax positions
    
    
    Settlements with taxing authorities
    
    
    Lapsing of statute of limitations
    
    
    Balance as of December 31, 2007
    
    $
    570
   F-21




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 8. Related-Party Transactions
 Transactions with MSG WC Holdings Corp. (Holdings)
   Holdings Subordinated Notes
  Consulting Agreement with Board Members
  Transactions with PV Realty LLC
  Fees to Former Majority Stockholder
   F-22




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 9. Redeemable Preferred Stock
   10. Stockholders Equity
 Preferred Stock
   Par Value
    
    
    AnnualSeries
    
    (per share)
    
    
    Dividend %B
    
    $
    10.0
    
    
    
    10.0
    %C
    
    $
    20.0
    
    
    
    8.5
    %G
    
    $
    0.1
    
    
    NoneH
    
    $
    10.0
    
    
    
    10.0
    %I
    
    $
    10.0
    
    
    
    10.0
    %J
    
    $
    10.0
    
    
    
    10.0
    %K
    
    $
    0.1
    
    
    None
  Stock Option Plans
   F-23




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 10. Stockholders Equity (continued)
 Stock Option Plans (continued)
    Weighted-AverageExercise Price
    
    
    Exercise PriceNumber of Shares
    
    
    Per Share
    
    
    Per ShareOptions outstanding, January 1, 2005
    
    
    32,165
    
    
    $
    403.55  1,181.70
    
    
    $
    687.18Options granted
    
    
    4,300
    
    
    $
    750.00  935.00
    
    
    $
    879.07Options forfeited
    
    
    (9,301
    )
    
    $
    403.55  1,181.70
    
    
    $
    824.90Options outstanding, December 31, 2005
    
    
    27,164
    
    
    $
    403.55  1,181.70
    
    
    $
    670.39Options forfeited
    
    
    (572
    )
    
    $
    403.55  1,181.70
    
    
    $
    773.58Options exercised
    
    
    (26,592
    )
    
    $
    403.55  1,181.70
    
    
    $
    668.17Options outstanding, August 1, 2006
    
    
    
  11. Commitments and Contingencies
   2008
    
    $
    7,1972009
    
    
    5,8262010
    
    
    4,5752011
    
    
    2,9752012 and thereafter
    
    
    7,655$
    28,228
   F-24




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 12. Pension Plans
   13. Foreign Operations
  SuccessorDecember 31,2006
    
    
    2007AssetsLease equipment, net
    
    $
    104,949
    
    
    $
    120,654Goodwill
    
    
    32,443
    
    
    
    45,019All other assets
    
    
    47,760
    
    
    
    53,067$
    185,152
    
    
    $
    218,740Liabilities and stockholders equityAccounts payable
    
    $
    5,752
    
    
    $
    7,730Notes payable
    
    
    73,627
    
    
    
    87,752Other liabilities
    
    
    34,240
    
    
    
    35,229Stockholders equity
    
    
    71,533
    
    
    
    88,029$
    185,152
    
    
    $
    218,740
 Predecessor
    
    
    SuccessorPeriod from
    
    
    Period fromYear Ended
    
    
    January 1 to
    
    
    August 2 to
    
    
    Year EndedDecember 31,
    
    
    August 1,
    
    
    December 31,
    
    
    December 31,2005
    
    
    2006
    
    
    2006
    
    
    2007Revenues and Net IncomeTotal revenues
    
    $
    72,750
    
    
    $
    42,342
    
    
    $
    30,799
    
    
    $
    83,474Costs and expenses
    
    
    69,042
    
    
    
    41,773
    
    
    
    28,747
    
    
    
    75,917Net income
    
    $
    3,708
    
    
    $
    569
    
    
    $
    2,052
    
    
    $
    7,557
  F-25




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 14. Discontinued Operations
   Predecessor
    
    
    SuccessorPeriod from
    
    
    Period fromYear Ended
    
    
    January 1 to
    
    
    August 2 to
    
    
    Year EndedDecember 31,
    
    
    August 1,
    
    
    December 31,
    
    
    December 31,2005
    
    
    2006
    
    
    2006
    
    
    2007Revenues
    
    $
    18,059
    
    
    $
    17,019
    
    
    $
    7,336
    
    
    $
    10,411Income before provision for income taxes
    
    
    306
    
    
    
    562
    
    
    
    313
    
    
    
    (1,807
    )Provision (benefit) for income taxes
    
    
    122
    
    
    
    225
    
    
    
    125
    
    
    
    (697
    )Net income
    
    $
    184
    
    
    $
    337
    
    
    $
    188
    
    
    $
    (1,110
    )
   SuccessorDecember 31,
    
    
    December 31,2006
    
    
    2007Accounts receivable, net
    
    $
    901
    
    
    $
    Inventories
    
    
    6,366
    
    
    
    58Other assets
    
    
    300
    
    
    
    6$
    7,567
    
    
    $
    64
  F-26




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 15. Subsequent Event
    16. Condensed Consolidating Financial Information
 3 4 3 4 3 4
  F-27




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
 CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 2007
(Successor)
 (Dollars in thousands)
 SubsidiaryCo-Issuer and
    
    
    Non-GuarantorParent
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAssets:Cash and cash equivalents
    
    $
    
    
    
    $
    1,015
    
    
    $
    1,316
    
    
    $
    
    
    
    $
    2,331Accounts receivable, net
    
    
    
    
    
    
    17,759
    
    
    
    16,836
    
    
    
    
    
    
    
    34,595Inventories
    
    
    
    
    
    
    13,958
    
    
    
    534
    
    
    
    
    
    
    
    14,492Lease equipment, net
    
    
    
    
    
    
    223,761
    
    
    
    120,654
    
    
    
    
    
    
    
    344,415Property and equipment, net
    
    
    
    
    
    
    22,374
    
    
    
    6,703
    
    
    
    
    
    
    
    29,077Investment in subsidiary
    
    
    290,615
    
    
    
    88,029
    
    
    
    
    
    
    
    (378,644
    )
    
    
    Intercompany balances
    
    
    
    
    
    
    3,683
    
    
    
    (3,683
    )
    
    
    
    
    
    
    Goodwill
    
    
    
    
    
    
    268,866
    
    
    
    45,019
    
    
    
    
    
    
    
    313,885Other intangible assets, net
    
    
    
    
    
    
    51,542
    
    
    
    24,860
    
    
    
    
    
    
    
    76,402Other assets
    
    
    
    
    
    
    14,258
    
    
    
    6,501
    
    
    
    
    
    
    
    20,759Assets held for sale and discontinued
operations
    
    
    
    
    
    
    64
    
    
    
    
    
    
    
    
    
    
    
    64Total assets
    
    $
    290,615
    
    
    $
    705,309
    
    
    $
    218,740
    
    
    $
    (378,644
    )
    
    $
    836,020Liabilities:Accounts payable
    
    $
    
    
    
    $
    6,181
    
    
    $
    7,730
    
    
    $
    
    
    
    $
    13,911Total debt
    
    
    
    
    
    
    338,588
    
    
    
    87,752
    
    
    
    
    
    
    
    426,340Other liabilities
    
    
    
    
    
    
    30,291
    
    
    
    5,074
    
    
    
    
    
    
    
    35,365Deferred income taxes
    
    
    
    
    
    
    39,634
    
    
    
    30,155
    
    
    
    
    
    
    
    69,789Total liabilities
    
    
    
    
    
    
    414,694
    
    
    
    130,711
    
    
    
    
    
    
    
    545,405Stockholders equity:Total stockholders equity
    
    
    290,615
    
    
    
    290,615
    
    
    
    88,029
    
    
    
    (378,644
    )
    
    
    290,615Total liabilities and stockholders equity
    
    $
    290,615
    
    
    $
    705,309
    
    
    $
    218,740
    
    
    $
    (378,644
    )
    
    $
    836,020
  F-28




---



##### Table of Contents



MOBILE SERVICES GROUP, INC.
 CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 2006
(Successor)
 (Dollars in thousands)
 SubsidiaryCo-Issuer and
    
    
    Non-GuarantorParent
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAssets:Cash and cash equivalents
    
    $
    
    
    
    $
    1,469
    
    
    $
    
    
    
    $
    
    
    
    $
    1,469Accounts receivable, net
    
    
    
    
    
    
    16,338
    
    
    
    14,244
    
    
    
    
    
    
    
    30,582Inventories
    
    
    
    
    
    
    5,255
    
    
    
    295
    
    
    
    
    
    
    
    5,550Lease equipment, net
    
    
    
    
    
    
    196,681
    
    
    
    104,949
    
    
    
    
    
    
    
    301,630Property and equipment, net
    
    
    
    
    
    
    15,793
    
    
    
    4,180
    
    
    
    
    
    
    
    19,973Investment in subsidiary
    
    
    274,496
    
    
    
    71,533
    
    
    
    
    
    
    
    (346,029
    )
    
    
    Intercompany balances
    
    
    
    
    
    
    (1,745
    )
    
    
    1,745
    
    
    
    
    
    
    
    Goodwill
    
    
    
    
    
    
    264,411
    
    
    
    32,443
    
    
    
    
    
    
    
    296,854Other intangible assets, net
    
    
    
    
    
    
    52,561
    
    
    
    25,394
    
    
    
    
    
    
    
    77,955Other assets
    
    
    
    
    
    
    18,686
    
    
    
    1,902
    
    
    
    
    
    
    
    20,588Assets held for sale and discontinued
operations
    
    
    
    
    
    
    7,567
    
    
    
    
    
    
    
    
    
    
    
    7,567Total assets
    
    $
    274,496
    
    
    $
    648,549
    
    
    $
    185,152
    
    
    $
    (346,029
    )
    
    $
    762,168Liabilities:Accounts payable
    
    $
    
    
    
    $
    5,417
    
    
    $
    5,752
    
    
    $
    
    
    
    $
    11,169Total debt
    
    
    
    
    
    
    301,908
    
    
    
    73,627
    
    
    
    
    
    
    
    375,535Other liabilities
    
    
    
    
    
    
    24,682
    
    
    
    3,883
    
    
    
    
    
    
    
    28,565Deferred income taxes
    
    
    
    
    
    
    42,046
    
    
    
    30,357
    
    
    
    
    
    
    
    72,403Total liabilities
    
    
    
    
    
    
    374,053
    
    
    
    113,619
    
    
    
    
    
    
    
    487,672Stockholders equity:Total stockholders equity
    
    
    274,496
    
    
    
    274,496
    
    
    
    71,533
    
    
    
    (346,029
    )
    
    
    274,496Total liabilities and stockholders equity
    
    $
    274,496
    
    
    $
    648,549
    
    
    $
    185,152
    
    
    $
    (346,029
    )
    
    $
    762,168
  F-29




---



##### Table of Contents



MOBILE SERVICES GROUP, INC.
 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2007
(Successor)
 (Dollars in thousands)
 SubsidiaryCo-Issuer and
    
    
    Non-GuarantorParent
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedRevenues:Lease and lease related
    
    $
    
    
    
    $
    121,288
    
    
    $
    71,030
    
    
    $
    
    
    
    $
    192,318Sales
    
    
    
    
    
    
    28,365
    
    
    
    12,444
    
    
    
    
    
    
    
    40,809Total revenues
    
    
    
    
    
    
    149,653
    
    
    
    83,474
    
    
    
    
    
    
    
    233,127Costs and expenses:Cost of sales
    
    
    
    
    
    
    18,696
    
    
    
    10,088
    
    
    
    
    
    
    
    28,784Trucking and yard costs
    
    
    
    
    
    
    29,352
    
    
    
    29,481
    
    
    
    
    
    
    
    58,833Depreciation and amortization
    
    
    
    
    
    
    13,813
    
    
    
    8,403
    
    
    
    
    
    
    
    22,216Selling, general and administrative expenses
    
    
    
    
    
    
    47,059
    
    
    
    23,416
    
    
    
    
    
    
    
    70,475Interest expense, net
    
    
    
    
    
    
    30,511
    
    
    
    7,702
    
    
    
    
    
    
    
    38,213Other expense (income)net
    
    
    
    
    
    
    180
    
    
    
    (753
    )
    
    
    
    
    
    
    (573
    )Income (loss) before provision for income taxes
and equity in earnings of consolidated
subsidiaries
    
    
    
    
    
    
    10,042
    
    
    
    5,137
    
    
    
    
    
    
    
    15,179Provision for income taxes
    
    
    
    
    
    
    5,813
    
    
    
    (2,420
    )
    
    
    
    
    
    
    3,393Income from discontinued operations
    
    
    
    
    
    
    (1,110
    )
    
    
    
    
    
    
    
    
    
    
    (1,110
    )Equity in earnings of consolidated subsidiaries
    
    
    10,676
    
    
    
    7,557
    
    
    
    
    
    
    
    (18,233
    )
    
    
    Net income (loss)
    
    $
    10,676
    
    
    $
    10,676
    
    
    $
    7,557
    
    
    $
    (18,233
    )
    
    $
    10,676
  F-30




---



##### Table of Contents



MOBILE SERVICES GROUP, INC.
 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Period from August 2, 2006 to December 31, 2006
(Successor)
 (Dollars in thousands)
 SubsidiaryCo-Issuer and
    
    
    Non-GuarantorParent
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedRevenues:Lease and lease related
    
    $
    
    
    
    $
    48,815
    
    
    $
    26,781
    
    
    $
    
    
    
    $
    75,596Sales
    
    
    
    
    
    
    10,794
    
    
    
    4,018
    
    
    
    
    
    
    
    14,812Total revenues
    
    
    
    
    
    
    59,609
    
    
    
    30,799
    
    
    
    
    
    
    
    90,408Costs and expenses:Cost of sales
    
    
    
    
    
    
    7,139
    
    
    
    3,150
    
    
    
    
    
    
    
    10,289Trucking and yard costs
    
    
    
    
    
    
    11,870
    
    
    
    11,183
    
    
    
    
    
    
    
    23,053Depreciation and amortization
    
    
    
    
    
    
    4,914
    
    
    
    3,309
    
    
    
    
    
    
    
    8,223Selling, general and administrative
expenses
    
    
    
    
    
    
    17,647
    
    
    
    8,150
    
    
    
    
    
    
    
    25,797Interest expense, net
    
    
    
    
    
    
    12,693
    
    
    
    2,139
    
    
    
    
    
    
    
    14,832Other expense (income)net
    
    
    29
    
    
    
    103
    
    
    
    (119
    )
    
    
    
    
    
    
    13Income (loss) before provision for
income taxes, discontinued operations
and equity in earnings of consolidated
subsidiaries
    
    
    (29
    )
    
    
    5,243
    
    
    
    2,987
    
    
    
    
    
    
    
    8,201Provision (benefit) for income taxes
    
    
    (9
    )
    
    
    2,086
    
    
    
    935
    
    
    
    
    
    
    
    3,012Income (loss) from discontinued
operations
    
    
    
    
    
    
    188
    
    
    
    
    
    
    
    
    
    
    
    188Equity in earnings of consolidated
subsidiaries
    
    
    5,397
    
    
    
    2,052
    
    
    
    
    
    
    
    (7,449
    )
    
    
    Net income
    
    $
    5,377
    
    
    $
    5,397
    
    
    $
    2,052
    
    
    $
    (7,449
    )
    
    $
    5,377
  F-31




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Period From January 1, 2006 to August 1, 2006
(Predecessor)
 (Dollars in thousands)
 Subsidiary
    
    
    Non-GuarantorParent
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedRevenues:Lease and lease related
    
    $
    
    
    
    $
    56,911
    
    
    $
    34,177
    
    
    $
    
    
    
    $
    91,088Sales
    
    
    
    
    
    
    14,245
    
    
    
    8,165
    
    
    
    
    
    
    
    22,410Total revenues
    
    
    
    
    
    
    71,156
    
    
    
    42,342
    
    
    
    
    
    
    
    113,498Costs and expenses:Cost of sales
    
    
    
    
    
    
    9,701
    
    
    
    6,522
    
    
    
    
    
    
    
    16,223Trucking and yard costs
    
    
    
    
    
    
    13,998
    
    
    
    13,967
    
    
    
    
    
    
    
    27,965Depreciation and amortization
    
    
    
    
    
    
    7,125
    
    
    
    5,066
    
    
    
    
    
    
    
    12,191Selling, general and administrative
expenses
    
    
    
    
    
    
    21,881
    
    
    
    10,222
    
    
    
    
    
    
    
    32,103Acquisition transaction expenses
    
    
    
    
    
    
    37,564
    
    
    
    2,742
    
    
    
    
    
    
    
    40,306Interest expense, net
    
    
    
    
    
    
    12,352
    
    
    
    3,205
    
    
    
    
    
    
    
    15,557Other expense (income)  net
    
    
    329
    
    
    
    78
    
    
    
    (206
    )
    
    
    
    
    
    
    201Income (loss) before provision
(benefit) for income taxes and equity
in earnings of consolidated
subsidiaries
    
    
    (329
    )
    
    
    (31,543
    )
    
    
    824
    
    
    
    
    
    
    
    (31,048
    )Provision (benefit) for income taxes
    
    
    (132
    )
    
    
    (9,363
    )
    
    
    255
    
    
    
    
    
    
    
    (9,240
    )Income from discontinued operations
    
    
    
    
    
    
    337
    
    
    
    
    
    
    
    
    
    
    
    337Equity in earnings of consolidated
subsidiaries
    
    
    (21,274
    )
    
    
    569
    
    
    
    
    
    
    
    20,705
    
    
    
    Net income (loss)
    
    $
    (21,471
    )
    
    $
    (21,274
    )
    
    $
    569
    
    
    $
    20,705
    
    
    $
    (21,471
    )
  F-32




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2005
(Predecessor)
 (Dollars in thousands)
 SubsidiaryCo-Issuer and
    
    
    Non-GuarantorParent
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedRevenues:Lease and lease related
    
    $
    
    
    
    $
    85,739
    
    
    $
    57,678
    
    
    $
    
    
    
    $
    143,417Sales
    
    
    
    
    
    
    20,512
    
    
    
    15,072
    
    
    
    
    
    
    
    35,584Total revenues
    
    
    
    
    
    
    106,251
    
    
    
    72,750
    
    
    
    
    
    
    
    179,001Costs and expenses:Cost of sales
    
    
    
    
    
    
    14,906
    
    
    
    12,208
    
    
    
    
    
    
    
    27,114Trucking and yard costs
    
    
    
    
    
    
    22,296
    
    
    
    22,468
    
    
    
    
    
    
    
    44,764Depreciation and amortization
    
    
    
    
    
    
    11,274
    
    
    
    8,197
    
    
    
    
    
    
    
    19,471Selling, general and administrative
expenses
    
    
    150
    
    
    
    30,167
    
    
    
    16,592
    
    
    
    
    
    
    
    46,909Interest expense, net
    
    
    
    
    
    
    19,938
    
    
    
    6,311
    
    
    
    
    
    
    
    26,249Other expense (income)net
    
    
    400
    
    
    
    (711
    )
    
    
    1,749
    
    
    
    1,369
    
    
    
    2,807Income (loss) before provision for
income taxes and equity in earnings of
consolidated subsidiaries
    
    
    (550
    )
    
    
    8,381
    
    
    
    5,225
    
    
    
    (1,369
    )
    
    
    11,687Provision (benefit) for income taxes
    
    
    (220
    )
    
    
    3,355
    
    
    
    1,517
    
    
    
    
    
    
    
    4,652Income from discontinued operations
    
    
    
    
    
    
    184
    
    
    
    
    
    
    
    
    
    
    
    184Equity in earnings of consolidated
subsidiaries
    
    
    7,549
    
    
    
    3,708
    
    
    
    
    
    
    
    (11,257
    )
    
    
    Net income (loss)
    
    $
    7,219
    
    
    $
    8,918
    
    
    $
    3,708
    
    
    $
    (12,626
    )
    
    $
    7,219
  F-33




---



##### Table of Contents



MOBILE SERVICES GROUP, INC.
 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended December 31, 2007
(Predecessor)
 (Dollars in thousands)
 SubsidiaryCo-Issuer and
    
    
    Non-GuarantorParent
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet cash provided by operating activities
    
    $
    
    
    
    $
    30,691
    
    
    $
    12,077
    
    
    $
    
    
    
    $
    42,768Investing activities:Acquisitions, net of cash acquired
    
    
    
    
    
    
    (31,039
    )
    
    
    
    
    
    
    
    
    
    
    (31,039
    )Purchases of lease equipment, net
    
    
    
    
    
    
    (18,843
    )
    
    
    (20,088
    )
    
    
    
    
    
    
    (38,931
    )Purchases of property and equipment
    
    
    
    
    
    
    (4,040
    )
    
    
    (3,387
    )
    
    
    
    
    
    
    (7,427
    )Net cash used in investing activities
    
    
    
    
    
    
    (53,922
    )
    
    
    (23,475
    )
    
    
    
    
    
    
    (77,397
    )Financing activities:Borrowings under New Credit facility
    
    
    
    
    
    
    40,000
    
    
    
    12,717
    
    
    
    
    
    
    
    52,717Payments under New Credit facility
    
    
    
    
    
    
    (16,784
    )
    
    
    
    
    
    
    
    
    
    
    (16,784
    )Proceeds on notes receivable from stockholder
    
    
    
    
    
    
    610
    
    
    
    
    
    
    
    
    
    
    
    610Proceeds from exercise of stock options
    
    
    
    
    
    
    180
    
    
    
    
    
    
    
    
    
    
    
    180Payments on capital lease obligations and
notes payable
    
    
    
    
    
    
    (1,178
    )
    
    
    2
    
    
    
    
    
    
    
    (1,176
    )Net cash provided by financing activities
    
    
    
    
    
    
    22,828
    
    
    
    12,719
    
    
    
    
    
    
    
    35,547Effect of foreign exchange rate changes on
cash
    
    
    
    
    
    
    
    
    
    
    (56
    )
    
    
    
    
    
    
    (56
    )Net increase (decrease) in cash
    
    
    
    
    
    
    (403
    )
    
    
    1,265
    
    
    
    
    
    
    
    862Cash and cash equivalents at beginning of
year
    
    
    
    
    
    
    1,469
    
    
    
    
    
    
    
    
    
    
    
    1,469Cash and cash equivalents at end of year
    
    $
    
    
    
    $
    1,066
    
    
    $
    1,265
    
    
    $
    
    
    
    $
    2,331
  F-34




---



##### Table of Contents



MOBILE SERVICES GROUP, INC.
 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Period from August 2, 2006 to December 31, 2006
(Successor)
 (Dollars in thousands)
 SubsidiaryCo-Issuer and
    
    
    Non-GuarantorParent
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet cash provided by operating activities
    
    $
    
    
    
    $
    21,986
    
    
    $
    2,616
    
    
    $
    
    
    
    $
    24,602Investing activities:Acquisition of Predecessor
    
    
    
    
    
    
    (317,138
    )
    
    
    
    
    
    
    
    
    
    
    (317,138
    )Acquisition payment of Predecessor
transaction expenses
    
    
    
    
    
    
    (17,162
    )
    
    
    
    
    
    
    
    
    
    
    (17,162
    )Other acquisitions, net
    
    
    
    
    
    
    (12,155
    )
    
    
    
    
    
    
    
    
    
    
    (12,155
    )Purchases of lease equipment, net
    
    
    
    
    
    
    (12,579
    )
    
    
    (4,904
    )
    
    
    
    
    
    
    (17,483
    )(Purchases) sales of property and equipment
    
    
    
    
    
    
    (2,236
    )
    
    
    38
    
    
    
    
    
    
    
    (2,198
    )Net cash used in investing activities
    
    
    
    
    
    
    (361,270
    )
    
    
    (4,866
    )
    
    
    
    
    
    
    (366,136
    )Financing activities:Payments on capital leases and notes payable
    
    
    
    
    
    
    (28
    )
    
    
    (180
    )
    
    
    
    
    
    
    (208
    )Borrowings under New Credit Facility
    
    
    
    
    
    
    98,713
    
    
    
    69,879
    
    
    
    
    
    
    
    168,592Redemption of Subordinated Notes
    
    
    
    
    
    
    (83,200
    )
    
    
    
    
    
    
    
    
    
    
    (83,200
    )Issuance of 9 3/4% Senior Notes due 2014
    
    
    
    
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    200,000Payments under BofA Credit Facility
    
    
    
    
    
    
    (122,929
    )
    
    
    (69,349
    )
    
    
    
    
    
    
    (192,278
    )Equity contributions
    
    
    
    
    
    
    263,266
    
    
    
    
    
    
    
    
    
    
    
    263,266Deferred financing costs
    
    
    
    
    
    
    (15,069
    )
    
    
    (244
    )
    
    
    
    
    
    
    (15,313
    )Net cash provided by financing activities
    
    
    
    
    
    
    340,753
    
    
    
    106
    
    
    
    
    
    
    
    340,859Effect of foreign exchange rate changes on
cash
    
    
    
    
    
    
    
    
    
    
    2,144
    
    
    
    
    
    
    
    2,144Net increase in cash
    
    
    
    
    
    
    1,469
    
    
    
    
    
    
    
    
    
    
    
    1,469Cash and cash equivalents at beginning of
period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cash and cash equivalents at end of period
    
    $
    
    
    
    $
    1,469
    
    
    $
    
    
    
    $
    
    
    
    $
    1,469
  F-35




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Period January 1, 2006 to August 1, 2006
(Predecessor)
 (Dollars in thousands)
 SubsidiaryCo-Issuer and
    
    
    Non-GuarantorParent
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet cash provided by operating activities
    
    $
    
    
    
    $
    16,525
    
    
    $
    4,775
    
    
    $
    
    
    
    $
    21,300Investing activities:Acquisitions, net of cash acquired
    
    
    
    
    
    
    (8,757
    )
    
    
    
    
    
    
    
    
    
    
    (8,757
    )Purchases of lease equipment, net
    
    
    
    
    
    
    (9,018
    )
    
    
    (8,091
    )
    
    
    
    
    
    
    (17,109
    )Purchases of property and equipment
    
    
    
    
    
    
    (1,142
    )
    
    
    (1,274
    )
    
    
    
    
    
    
    (2,416
    )Net cash used in investing activities
    
    
    
    
    
    
    (18,917
    )
    
    
    (9,365
    )
    
    
    
    
    
    
    (28,282
    )Financing activities:Borrowings under BofA Credit Facility
    
    
    
    
    
    
    6,181
    
    
    
    4,879
    
    
    
    
    
    
    
    11,060Payments on capital leases and notes payable
    
    
    
    
    
    
    (524
    )
    
    
    (38
    )
    
    
    
    
    
    
    (562
    )Redemption of Predecessor common stock
    
    
    
    
    
    
    (8
    )
    
    
    
    
    
    
    
    
    
    
    (8
    )Deferred financing costs
    
    
    
    
    
    
    (1,160
    )
    
    
    
    
    
    
    
    
    
    
    (1,160
    )Predecessor redemption of preferred stock
    
    
    
    
    
    
    (938
    )
    
    
    
    
    
    
    
    
    
    
    (938
    )Predecessor preferred stock dividends paid
    
    
    
    
    
    
    (1,159
    )
    
    
    
    
    
    
    
    
    
    
    (1,159
    )Net cash provided by financing activities
    
    
    
    
    
    
    2,392
    
    
    
    4,841
    
    
    
    
    
    
    
    7,233Effect of foreign exchange rate changes on
cash
    
    
    
    
    
    
    
    
    
    
    (251
    )
    
    
    
    
    
    
    (251
    )Net increase in cash
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cash and cash equivalents at beginning of
period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cash and cash equivalents at end of period
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
  F-36




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##### Table of Contents



MOBILE SERVICES GROUP, INC.
 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended December 31, 2005
(Predecessor)
 (Dollars in thousands)
 SubsidiaryCo-Issuer and
    
    
    Non-GuarantorParent
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet cash provided by operating activities
    
    $
    
    
    
    $
    20,418
    
    
    $
    14,777
    
    
    $
    
    
    
    $
    35,195Investing activities:Acquisitions, net of cash acquired
    
    
    
    
    
    
    (4,890
    )
    
    
    
    
    
    
    
    
    
    
    (4,890
    )Purchases of lease equipment, net
    
    
    
    
    
    
    (22,848
    )
    
    
    (9,618
    )
    
    
    
    
    
    
    (32,466
    )Purchases of property and equipment
    
    
    
    
    
    
    (4,717
    )
    
    
    (1,549
    )
    
    
    
    
    
    
    (6,266
    )Proceeds from assets held for sale
    
    
    
    
    
    
    414
    
    
    
    610
    
    
    
    
    
    
    
    1,024Net cash used in investing activities
    
    
    
    
    
    
    (32,041
    )
    
    
    (10,557
    )
    
    
    
    
    
    
    (42,598
    )Financing activities:Deferred financing costs
    
    
    
    
    
    
    (1,309
    )
    
    
    (1,291
    )
    
    
    
    
    
    
    (2,600
    )Borrowings under BofA Credit Facility
    
    
    
    
    
    
    19,495
    
    
    
    (905
    )
    
    
    
    
    
    
    18,590Payments on capital leases and notes payable
    
    
    
    
    
    
    (1,543
    )
    
    
    (77
    )
    
    
    
    
    
    
    (1,620
    )Repurchase of common stock
    
    
    
    
    
    
    (52
    )
    
    
    
    
    
    
    
    
    
    
    (52
    )Issuance of preferred stock, net
    
    
    
    
    
    
    (2,501
    )
    
    
    
    
    
    
    
    
    
    
    (2,501
    )Preferred stock dividends paid
    
    
    
    
    
    
    (2,468
    )
    
    
    
    
    
    
    
    
    
    
    (2,468
    )Net cash provided by (used in) financing
activities
    
    
    
    
    
    
    11,622
    
    
    
    (2,273
    )
    
    
    
    
    
    
    9,349Effect of foreign exchange rate changes on
cash
    
    
    
    
    
    
    
    
    
    
    (1,946
    )
    
    
    
    
    
    
    (1,946
    )Net increase (decrease) in cash
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cash and cash equivalents at beginning of
year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cash and cash equivalents at end of year
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
  F-37




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##### Table of Contents



Schedule II
 MOBILE SERVICES GROUP, INC.
VALUATION AND QUALIFYING ACCOUNTS
 (Dollars in thousands)
 Balance at
    
    
    Charges toBeginning of
    
    
    Cost and
    
    
    
    
    
    
    Balance atPeriod
    
    
    Expenses
    
    
    Deductions (1)
    
    
    End of PeriodYear ended December
31, 2005
(Predecessor)
Allowance for
doubtful accounts
    
    $
    554
    
    
    $
    768
    
    
    $
    (752
    )
    
    $
    570Period from January
1, 2006 to August
1, 2006
(Predecessor)
Allowance for
doubtful accounts
    
    $
    570
    
    
    $
    744
    
    
    $
    (183
    )
    
    $
    1,131Period from August
2, 2006 to December
31, 2006
(Successor)
Allowance for
doubtful accounts
    
    $
    1,131
    
    
    $
    147
    
    
    $
    (577
    )
    
    $
    701Year ended December
31, 2007
(Successor)
Allowance for
doubtful accounts
    
    $
    701
    
    
    $
    1,644
    
    
    $
    (1,029
    )
    
    $
    1,316
 
 (1)
    
    Deductions represent uncollectible accounts written-off, net of recoveries  S-1




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##### Table of Contents



EXHIBIT
INDEX
 Exhibit No.
    
    Description2.1
    
    
    Agreement and Plan of Merger, dated May 24, 2006, by and among MSG WC Holdings
Corp., MSG WC Acquisition Corp., Mobile Services Group, Inc. and target
stockholder representative (incorporated by reference to Exhibit 2.1 to the
Registrants Form S-4 filed on September 18, 2007).2.2
    
    
    Amendment to Agreement and Plan of Merger, dated June 7, 2006, by and among
MSG WC Holdings Corp., MSG WC Acquisition Corp., Mobile Services Group, Inc.
and target stockholder representative (incorporated by reference to Exhibit
2.2 to the Registrants Form S-4 filed on September 18, 2007).2.3
    
    
    Agreement and Plan of Merger, dated February 22, 2008, among Mobile Mini,
Inc., MSG WC Holdings Corp., Cactus Merger Sub, Inc., and Welsh, Carson,
Anderson & Stowe X, L.P. (incorporated by reference to Exhibit 2.1 to the
Registrants Form 8-K filed on February 28, 2008).3.1
    
    
    Restated Certificate of Incorporation of Mobile Services Group, Inc.
(incorporated by reference to Exhibit 3.1 to the Registrants Form S-4 filed
on September 18, 2007).3.2
    
    
    By-laws of Mobile Services Group, Inc. (incorporated by reference to Exhibit
3.2 to the Registrants Form S-4 filed on September 18, 2007).3.3
    
    
    Amendment to By-laws of Mobile Services Group, Inc. (incorporated by reference
to Exhibit 3.3 to the Registrants Form S-4 filed on September 18, 2007).3.4
    
    
    Certificate of Incorporation of Mobile Storage Group, Inc. (incorporated by
reference to Exhibit 3.4 to the Registrants Form S-4 filed on September 18,
2007).3.5
    
    
    By-laws of Mobile Storage Group, Inc. (incorporated by reference to Exhibit
3.5 to the Registrants Form S-4 filed on September 18, 2007).3.6
    
    
    Articles of Incorporation of A Better Mobile Storage Company (incorporated by
reference to Exhibit 3.6 to the Registrants Form S-4 filed on September 18,
2007).3.7
    
    
    By-laws of A Better Mobile Storage Company (incorporated by reference to
Exhibit 3.7 to the Registrants Form S-4 filed on September 18, 2007).3.8
    
    
    Certificate of Limited Partnership of Mobile Storage Group (Texas), L.P.
(incorporated by reference to Exhibit 3.8 to the Registrants Form S-4 filed
on September 18, 2007).3.9
    
    
    Amended and Restated Limited Partnership Agreement of Mobile Storage Group
(Texas), L.P. (incorporated by reference to Exhibit 3.9 to the Registrants
Form S-4 filed on September 18, 2007).4.1
    
    
    Indenture, dated August 1, 2006, by and among Mobile Services Group, Inc.,
Mobile Storage Group, Inc., subsidiary guarantors named therein and Wells
Fargo Bank, N.A. (incorporated by reference to Exhibit 4.1 to the Registrants
Form S-4 filed on September 18, 2007).4.2
    
    
    Contractual Rights Agreement, dated August 1, 2006, by and among Foxkirk, LLC
and WCAS Capital Partners IV, L.P. (incorporated by reference to Exhibit 4.2
to the Registrants Form S-4 filed on September 18, 2007).4.4
    
    
    Registration Rights Agreement, dated August 1, 2006, by and among Mobile
Services Group, Inc., Mobile Storage Group, Inc., guarantors named therein,
Lehman Brothers Inc., Goldman, Sachs & Co. and Wachovia Capital Markets, LLC.
(incorporated by reference to Exhibit 4.4 to the Registrants Form S-4 filed
on September 18, 2007).4.5
    
    
    Note Purchase Agreement, dated August 1, 2006, by and among MSG WC Holdings
Corp. and the purchasers named therein (incorporated by reference to Exhibit
4.5 to the Registrants Form S-4 filed on September 18, 2007).4.6
    
    
    Stockholders Agreement, dated August 1, 2006, by and among MSG WC Holdings
Corp, Welsh, Carson, Anderson & Stowe X, L.P., WCAS Capital Partners IV, L.P.,
WCAS Management Corporation, de Nicola Holdings, L.P., certain co-investors
and certain management stockholders (incorporated by reference to Exhibit 4.6
to the Registrants Form S-4 filed on September 18, 2007).10.1
    
    
    Amended and Restated Credit Agreement, dated December 30, 2005, by and among
the Lenders, Bank of America, N.A., Mobile Storage Group, Inc., Mobile
Services Group, Inc. and Banc of America Securities, LLC (incorporated by
reference to Exhibit 10.1 to the Registrants Form S-4 filed on September 18,
2007).




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##### Table of Contents



Exhibit No.
    
    Description10.2
    
    
    Amended and Restated UK Credit Agreement, dated December 30, 2005, by and
among the UK Lenders, Bank of America, N.A., Mobile Storage Group, Inc.,
Mobile Services Group, Inc. and Banc of America Securities, LLC (incorporated
by reference to Exhibit 10.2 to the Registrants Form S-4 filed on September
18, 2007).10.3
    
    
    Credit Agreement, dated August 1, 2006, by and among the Lenders, The CIT
Group/Business Credit, Inc., Mobile Storage Group, Inc., Mobile Services
Group, Inc., MSG WC Holdings Corp., MSG WC Intermediary Co., CIT Capital
Securities LLC, Lehman Brothers Inc., Wachovia Capital Finance Corporation
(Western), Merrill Lynch Capital Corporation and Textron Financial Corporation
(incorporated by reference to Exhibit 2.1 to the Registrants Form 10.3 filed
on September 18, 2007).10.4
    
    
    UK Credit Agreement, dated August 1, 2006, by and among the Lenders, The CIT
Group/Business Credit, Inc., Mobile Storage Group, Inc., Mobile Services
Group, Inc., MSG WC Holdings Corp., MSG WC Intermediary Co., Ravenstock MSG
Limited, CIT Capital Securities LLC, Lehman Brothers Inc., Wachovia Capital
Finance Corporation (Western), Merrill Lynch Capital Corporation and Textron
Financial Corporation (incorporated by reference to Exhibit 10.4 to the
Registrants Form S-4 filed on September 18, 2007).10.5
    
    
    Office Lease Agreement between EOP-700 North Brand, L.L.C. and Mobile Storage
Group, Inc. (incorporated by reference to Exhibit 10.5 to the Registrants
Form S-4 filed on September 18, 2007).10.6
    
    
    MSG WC Holdings Corp. 2006 Stock Option Plan (incorporated by reference to
Exhibit 10.6 to the Registrants Form S-4 filed on September 18, 2007).*10.7
    
    
    MSG WC Holdings Corp. 2006 Stock Incentive Plan (incorporated by reference to
Exhibit 10.7 to the Registrants Form S-4 filed on September 18, 2007).*10.8
    
    
    MSG WC Holdings Corp. 2006 Employee Stock Option Plan (incorporated by
reference to Exhibit 10.8 to the Registrants Form S-4 filed on September 18,
2007).*10.9
    
    
    Amended and Restated Employment Agreement, dated August 1, 2006, by and among
Douglas A. Waugaman, Mobile Storage Group, Inc. and MSG WC Holdings Corp.
(incorporated by reference to Exhibit 10.9 to the Registrants Form S-4 filed
on September 18, 2007).*10.10
    
    
    Employment Agreement, dated October 4, 2005, by and among Allan A. Villegas
and Mobile Storage Group, Inc. (incorporated by reference to Exhibit 10.10 to
the Registrants Form S-4 filed on September 18, 2007).*10.11
    
    
    Employment Agreement, dated November 9, 2005, by and among Christopher A.
Wilson and Mobile Storage Group, Inc. (incorporated by reference to Exhibit
10.11 to the Registrants Form S-4 filed on September 18, 2007).*10.12
    
    
    Employment Agreement, dated August 19, 2004, by and among William Armstead and
Mobile Storage Group, Inc. (incorporated by reference to Exhibit 10.12 to the
Registrants Form S-4 filed on September 18, 2007).*10.13
    
    
    Employment Agreement, dated January 13, 2004, by and among Jody E. Miller and
Mobile Storage Group, Inc. (incorporated by reference to Exhibit 10.13 to the
Registrants Form S-4 filed on September 18, 2007).*10.14
    
    
    Employment Agreement, dated February 12, 2006, by and among Gilbert Gomez and
Mobile Storage Group, Inc. (incorporated by reference to Exhibit 10.14 to the
Registrants Form S-4 filed on September 18, 2007).*10.15
    
    
    Employment Agreement, dated June 1, 2004, by and among Lynn Courville and
Mobile Storage Group, Inc. (incorporated by reference to Exhibit 10.15 to the
Registrants Form S-4 filed on September 18, 2007).*10.16
    
    
    Amended and Restated Employment Agreement, dated November 7, 2006, by and
among Jerry E. Vaughn, Mobile Storage Group, Inc. and MSG WC Holdings Corp.
(incorporated by reference to Exhibit 10.16 to the Registrants Form S-4 filed
on September 18, 2007).*10.17
    
    
    Employment Agreement, dated July 17, 2007, by and among Ron Halchishak, Mobile
Storage Group, Inc. and Mobile Services Group, Inc. (incorporated by reference
to Exhibit 10.17 to the Registrants Form S-4 filed on September 18, 2007).*10.18
    
    
    Offer Letter, dated October 15, 2004, from Mobile Storage Group, Inc. to
Jeffrey A. Kluckman. (incorporated by reference to Exhibit 10.18 to the
Registrants Form S-4 filed on September 18, 2007).*10.19
    
    
    Statement of Particulars of Employment of Ronald Halchishak with Ravenstock
MSG Ltd, dated July 17, 2007 (incorporated by reference to Exhibit 10.19 to
the Registrants Form S-4 filed on September 18, 2007).*




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##### Table of Contents



Exhibit No.
    
    Description10.20
    
    
    Employment Agreement, dated December 31, 2006, by and among Jeffry E. Jones,
Mobile Storage Group, Inc. and Mobile Services Group, Inc.*10.21
    
    
    Amendment to Employment Agreement, dated November 5, 2007, by and among Lynn
Courville and Mobile Storage Group, Inc.*10.22
    
    
    Amendment to Employment Agreement, dated December 2007, by and among Gilbert
Gomez and Mobile Storage Group, Inc.*10.23
    
    
    Amendment to Employment Agreement, dated November 5, 2007, by and among
William Armstead and Mobile Storage Group, Inc.*10.24
    
    
    Employment Agreement, dated November 5, 2007, by and among Jeffrey A. Kluckman
and Mobile Storage Group, Inc.*10.25
    
    
    Management Services Agreement, dated August 1, 2006, by and among Mobile
Services Group, Inc., MSG WC Holdings Corp. and WCAS Management Corporation
(incorporated by reference to Exhibit 10.20 to the Registrants Form S-4 filed
on September 18, 2007).10.26
    
    
    Indemnification Agreement, dated May 10, 2006, by and among Mobile Storage
Group, Inc., Mobile Services Group, Inc. and Christopher A. Wilson
(incorporated by reference to Exhibit 10.21 to the Registrants Form S-4 filed
on September 18, 2007).10.27
    
    
    Indemnification Agreement, dated May 10, 2006, by and among Mobile Storage
Group, Inc., Mobile Services Group, Inc. and Allan A. Villegas (incorporated
by reference to Exhibit 10.22 to the Registrants Form S-4 filed on September
18, 2007).10.28
    
    
    Indemnification Agreement, dated May 10, 2006, by and among Mobile Storage
Group, Inc., Mobile Services Group, Inc. and Douglas A. Waugaman (incorporated
by reference to Exhibit 10.23 to the Registrants Form S-4 filed on September
18, 2007).10.29
    
    
    Board Retention and Consulting Agreement, dated January 31, 2007, by and among
Mobile Storage Group, Inc., MSG WC Holdings Corp. and Ronald F. Valenta
(incorporated by reference to Exhibit 10.24 to the Registrants Form S-4 filed
on September 18, 2007).10.30
    
    
    Board Retention and Consulting Agreement, dated August 28, 2006, by and among
Mobile Storage Group, Inc., MSG WC Holdings Corp. and Jim Martell
(incorporated by reference to Exhibit 10.25 to the Registrants Form S-4 filed
on September 18, 2007).10.31
    
    
    Consulting Agreement, dated May 1, 2003, by and among Mobile Storage Group,
Inc. and Ronald F. Valenta (incorporated by reference to Exhibit 10.26 to the
Registrants Form S-4 filed on September 18, 2007).*10.32
    
    
    Mobile Storage Group, Inc. 2007 Corporate Incentive Plan Executive Plan
(incorporated by reference to Exhibit 10.27 to the Registrants Form S-4/A
filed on October 25, 2007).10.33
    
    
    2007 U.K. Special Incentive Plan (incorporated by reference to Exhibit 10.28
to the Registrants Form S-4/A filed on October 25, 2007).12.1
    
    
    Statement re Calculation of Ratio of Earnings to Fixed Charges21.1
    
    

Subsidiaries of Registrants.31.1
    
    
    Certification of the Chief Executive Officer of Mobile Services Group, Inc.
required by Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    
    Certification of the Chief Financial Officer of Mobile Services Group, Inc.
required by Section 302 of the Sarbanes-Oxley Act of 200231.3
    
    
    Certification of the Chief Executive Officer of Mobile Storage Group, Inc.
required by Section 302 of the Sarbanes-Oxley Act of 200231.4
    
    
    Certification of the Chief Financial Officer of Mobile Storage Group, Inc.
required by Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    
    Certification of the Chief Executive Officer of Mobile Services Group, Inc.
required by Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    
    Certification of the Chief Financial Officer of Mobile Services Group, Inc.
required by Section 906 of the Sarbanes-Oxley Act of 200232.3
    
    
    Certification of the Chief Executive Officer of Mobile Storage Group, Inc.
required by Section 906 of the Sarbanes-Oxley Act of 200232.4
    
    
    Certification of the Chief Financial Officer of Mobile Storage Group, Inc.
required by Section 906 of the Sarbanes-Oxley Act of 2002
 
 *
    
    Denotes management contract or compensatory plan or arrangement.