The following discussion of our financial condition and results of operations should be read together with the consolidated financial statements and the accompanying notes included elsewhere in this Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in those forward-looking statements as a result of certain factors, including, but not limited to, those described under Item 1A, "Risk Factors".

The following discussion takes into consideration our acquisition of Mobile Storage Group on June 27, 2008. The operations of Mobile Storage Group are included in our operating results for only six months of the twelve months ended December 31, 2008. Additionally, the results of operations for 2007 also include four additional acquisitions and one start up location that we completed in 2007; in 2008, the results of operations include four acquisitions (beyond Mobile Storage Group) we completed during 2008.

Executive Summary

2008 was a transformational year for Mobile Mini as we acquired our largest competitor, Mobile Storage Group, which contributed to increasing total revenues 30.5% to $415.4 million from $318.3 million. In addition, we were cash flow positive (after capital expenditures but excluding acquisitions) for the first time in our operating history. Since closing the acquisition, we believe we have been achieving the economic benefits of the MSG integration sooner than anticipated, particularly through a reduction in overhead and infrastructure costs as previously overlapping locations in both the U.S. and the U.K. have been combined.

In addition, we enacted a selective price increase in the third quarter of 2008, focusing on customers who have had units out on rent for an extended period of time. To date, the attrition rates for the affected customers have been the same or less than other customers. In addition, although fuel costs came down in the fourth quarter of 2008, they were at their highest levels during much of the third quarter. Where possible, we recouped some of those costs by imposing a fuel surcharge in the U.S. in the second quarter of 2008 and in the U.K. in September 2008.

The recession and credit crisis in the U.S. and U.K. have curtailed non-residential construction activity and we expect these factors to continue to negatively affect our revenues in 2009. As a result, in late 2008 and early 2009, we made reductions in non-essential expenses, most notably by reducing headcount. In the fourth quarter of 2008, we restructured our manufacturing operations to reduce costs and implemented two rounds of company-wide reductions, which together resulted in reductions of approximately 430 employees. We continually monitor activity levels through a variety of metrics we use to find efficiencies in the number of drivers, dispatchers, managers, salespeople and corporate staff needed in the evolving business environment. As a result, we may continue to reduce headcount in areas where we believe we can find efficiencies without reducing customer service and sales activity levels.

We believe these efforts, coupled with only nominal fleet purchases and maintenance expense, will allow us to continue to generate free cash flow in 2009 and pay down debt, which remains a top corporate priority. Since the Mobile Storage Group transaction, we have reduced borrowings under our $900.0 million asset based revolving credit facility from $604.0 million at June 27, 2008 to $554.5 million at December 31, 2008, leaving us with $332.8 million of unused borrowing capacity under our facility. Our senior notes do not contain financial maintenance covenants and the financial maintenance covenants under our revolving credit facility are not applicable unless we fall below $100.0 million in borrowing availability.

At the same time we are reducing costs, we are increasing our internal efforts on sales growth to our core customers and have refocused our efforts to gain business through government projects at the federal, state and local levels. We are doing this in part through increasing salesperson accountability through our disciplined sales processes which we believe has traditionally given us a significant competitive advantage.

General

In addition to our leasing business, we also sell portable storage containers and occasionally sell mobile office units. Our sales revenues as a percentage of total revenues represented 9.9% of revenues in 2008.

On June 27, 2008, we acquired the outstanding shares of Mobile Storage Group through a merger of a wholly-owned subsidiary of Mobile Mini into Mobile Storage Group's ultimate parent, MSG WC Holdings Corp. Immediately thereafter, each of MSG WC Holdings Corp. and two of its direct subsidiaries merged with and into Mobile Mini and Mobile Storage Group became a wholly-owned subsidiary of Mobile Mini. We refer to this transaction as "the Merger" throughout this document.

The Merger was the largest acquisition we have completed and it increased the scope of our operations in both the U.S. and the U.K. Our consolidated statements of income for the reporting period ended December 31, 2008, include certain estimated expenses expected to be incurred related to integration of the business acquired in the Merger and a restructuring charge related to restructuring of our manufacturing operations as a result of the Merger. See the Notes to Consolidated Financial Statements included herein for additional information regarding the Merger.

Prior to acquiring MSG, Mobile Mini grew through both organic growth and smaller acquisitions, which we use to gain a presence in new markets. Typically, we enter a new market through the acquisition of the business of a smaller local competitor and then apply our business model, which is usually much more customer service and marketing focused than the business we are buying or its competitors in the market. If we cannot find a desirable acquisition opportunity in a market we wish to enter, we establish a new location from the ground up. As a result, a new branch location will typically have fairly low operating margins during its early years, but as our marketing efforts help us penetrate the new market and we increase the number of units on rent at the new branch, we take advantage of operating efficiencies to improve operating margins at the branch and typically reach company average levels after several years. When we enter a new market, we incur certain costs in developing an infrastructure. For example, advertising and marketing costs will be incurred and certain minimum levels of staffing and delivery equipment will be put in place regardless of the new market's revenue base. Once we have achieved revenues during any period that are sufficient to cover our fixed expenses, we generate high margins on incremental lease revenues. Therefore, each additional unit rented in excess of the break-even level, contributes significantly to profitability. Conversely, additional fixed expenses that we incur require us to achieve additional revenue as compared to the prior period to cover the additional expense.

As a result of the Merger, we have been implementing our business model across the newly acquired MSG branches. While we have been able to realize significant cost reductions as a result of the combination of two companies, there may yet be inefficiencies or additional fixed costs that put pressure on operating margins as we fully integrate the two companies.

Among the external factors we examine to determine the direction of our business is the level of non-residential construction activity. Customers in the construction industry represented approximately 36% and 43% of our units on rent at December 31, 2008 and 2007, respectively, and because of the degree of operating leverage we have, increases or decreases in non-residential construction activity can have a significant effect on our operating margins and net income. In 2007, after three years of very strong growth in non-residential construction activity in the U.S, the growth rate in this sector began to moderate and the level of our construction related business began to slow down and then decline. This decline continues to adversely affect our results of operations into 2009.

In managing our business, we focus on growing leasing revenues, particularly in existing markets where we can take advantage of the operating leverage inherent in our business model. Mobile Mini's goal is to maintain a stable growth rate.

We are a capital-intensive business, so in addition to focusing on earnings per share, we focus on adjusted EBITDA to measure our results. We calculate this number by first calculating EBITDA, which we define as net income before interest expense, debt restructuring or extinguishment expense, provision for income taxes, depreciation and amortization. This measure eliminates the effect of financing transactions that we enter into and this measure provides us with a means to track internally generated cash from which we can fund our interest expense and our lease fleet growth. In comparing EBITDA from year to year, we typically further adjust EBITDA to ignore the effect of what we consider non-recurring events not related to our core business operations to arrive at what we define as adjusted EBITDA. Although not presented in this Annual Report for 2008, adjusted EBITDA does not include the integration, merger and restructuring expenses related to the MSG acquisition and a goodwill impairment charge related to the U.K. and The Netherlands.

In managing our business, we routinely compare our EBITDA margins from year to year and based upon age of branch. As capital is invested in our established branch locations, we achieve higher EBITDA margins on that capital than we achieve on capital invested to establish a new branch, because our fixed costs are already in place in connection with the established branches. The fixed costs are those associated with yard and delivery equipment, as well as advertising, sales, marketing and office expenses. With a new market or branch, we must first fund and absorb the startup costs for setting up the new branch facility, hiring and developing the management and sales team and developing our marketing and advertising programs. A new branch will have low EBITDA margins in its early years until the number of units on rent increases. Because of our high operating margins on incremental lease revenue, which we realize on a branch by branch basis when the branch achieves leasing revenues sufficient to cover the branch's fixed costs, leasing revenues in excess of the break-even amount produce large increases in

profitability. Conversely, absent significant growth in leasing revenues, the EBITDA margin at a branch will remain relatively flat on a period by period comparative basis.

Because EBITDA and EBITDA margin are non-GAAP financial measures, as defined by the SEC, we include in this Annual Report reconciliations of EBITDA to the most directly comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the U.S. These reconciliations are included in Item 6, "Selected Financial Data".

Accounting and Operating Overview

Our leasing revenues include all rent and ancillary revenues we receive for our portable storage, combination storage/office and mobile office units. Our sales revenues include sales of these units to customers. Our other revenues consist principally of charges for the delivery of the units we sell. Our principal operating expenses are: (1) cost of sales; (2) leasing, selling and general expenses; and (3) depreciation and amortization, primarily depreciation of the portable storage units and mobile offices in our lease fleet. Cost of sales is the cost of the units that we sold during the reported period and includes both our cost to buy, transport, remanufacture and modify used ocean-going containers and our cost to manufacture portable storage units and other structures. Leasing, selling and general expenses include among other expenses, advertising and other marketing expenses, real property lease expenses, commissions, repair and maintenance costs of our lease fleet and transportation equipment and corporate expenses for both our leasing and sales activities. Annual repair and maintenance expenses on our leased units over the last three years have averaged approximately 4.0% of lease revenues and are included in leasing, selling and general expenses. We expense our normal repair and maintenance costs as incurred (including the cost of periodically repainting units).

Our principal asset is our lease fleet, which has historically maintained value close to its original cost. The steel units in our lease fleet (other than van trailers) are depreciated on the straight-line method using an estimated useful life of 25 years, after the date the unit is placed in service, with an estimated residual value of 62.5%. The depreciation policy is supported by our historical lease fleet data which shows that we have been able to obtain comparable rental rates and sales prices irrespective of the age of our container lease fleet. Our wood mobile office units are depreciated over 20 years to 50% of original cost. Van trailers, which constitute a small part of our fleet, are depreciated over 7 years to a 20% residual value. Van trailers, which are only added to the fleet as a result of acquisitions of portable storage businesses, are of much lower quality than storage containers and consequently depreciate more rapidly. We also have other non-core products that are added to our fleet as a result of acquisitions that have various other measures of useful lives and residual values. See "Item 1. Business - Product Lives and Durability".

During the last five years, our annual utilization levels averaged 80.2%, and ranged from a low of 75.0% in 2008 to a high of 82.9% in 2005. Our utilization level averaged 75.0% during 2008. Since 1996, we have increased our total lease fleet from 13,600 units to approximately 273,700 units, representing a CAGR of 28.4%.

Results of Operations

The following table shows the percentage of total revenues represented by the key items that make up our statements of income; certain amounts may not add due to rounding:

                                                                     Year Ended December 31,
                                                    2004         2005         2006         2007         2008

Revenues:
Leasing                                               89.0 %       91.0 %       89.7 %       89.4 %       89.5 %
Sales                                                 10.7          8.5          9.8          9.9          9.9
Other                                                  0.3          0.5          0.5          0.7          0.6

Total revenues                                       100.0        100.0        100.0        100.0        100.0

Costs and expenses:
Cost of sales                                          6.7          5.2          6.3          6.8          6.8
Leasing, selling and general expenses                 53.9         52.8         51.2         52.5         51.1
Integration, merger and restructuring expense            -            -            -            -          5.9
Goodwill impairment                                      -            -            -            -          3.3
Depreciation and amortization                          6.8          6.2          6.1          6.6          7.6

Total costs and expenses                              67.4         64.2         63.6         65.9         74.7

Income from operations                                32.6         35.8         36.4         34.1         25.3
Other income (expense):
Interest income                                          -            -          0.2            -            -
Other income                                             -          1.6            -            -            -
Interest expense                                     (12.1 )      (11.2 )       (8.7 )       (7.8 )      (11.6 )
Debt extinguishment expense                              -            -         (2.4 )       (3.5 )          -
Foreign currency exchange gains (loss)                   -            -            -            -            -

Income before provision for income taxes              20.5         26.2         25.5         22.8         13.7
Provision for income taxes                             8.2          9.8          9.9          8.9          6.7

Net income                                            12.3 %       16.4 %       15.6 %       13.9 %        7.0 %

Twelve Months Ended December 31, 2008 Compared to Twelve Months Ended December 31, 2007

Total revenues in 2008 increased $97.1 million, or 30.5%, to $415.4 million from $318.3 million in 2007. Leasing, our primary revenue focus, accounted for approximately 89.5% of total revenues during 2008. Leasing revenues in 2008 increased $86.9 million, or 30.5%, to $371.5 million from $284.6 million in 2007. This increase in revenues resulted from a 32.0% increase in the average number of units on lease, offset by a 1.5% decrease due to unfavorable foreign currency exchange rates and virtually no change in average rental yield per unit
(price). In 2008, our leasing revenue growth rate was 30.5% as compared to 16.1% in 2007. The increased growth rate in 2008 is due to the Merger. This was offset in part by a reduction in business activity in 2008 from its 2007 level due to a decline in non-residential construction activity and the economic recession. Our leasing revenue growth rate in 2008 over the same period in the prior year was 6.0%, 3.5%, 61.3%, and 47.3% for the first, second, third and fourth quarters, respectively. Our leasing revenues would have declined in the third and fourth quarters of 2008 without the MSG Merger. As a result of the Merger, we added 29 new branches in 2008 (18 branches in the U.S. and 11 in the U.K.). We also completed four smaller acquisitions in 2008, three where we combined acquired businesses in cities in which we already had existing operations and one in Hartford, Connecticut. Our sales of units accounted for 9.9% of total revenues in both 2008 and 2007. Our revenues from the sale of units increased $9.7 million, or 30.4%, to $41.3 million in 2008 from $31.6 million in 2007. This increase is related to the higher level of sales activity at our newer locations both in the U.S. and in the U.K. attributable to locations added as a result of the MSG Merger. Other revenues, primarily related to our sales business and principally arising from transportation charges for the delivery

of units sold and the sale of ancillary products, represented approximately 0.6% of total revenues in 2008 and 0.7% in 2007.

Cost of sales are the costs related to our sales revenue only. Cost of sales as a percentage of sales revenue decreased slightly to 68.0% in 2008 from 68.4% in 2007.

Leasing, selling and general expenses increased $45.3 million, or 27.2%, to $212.3 million in 2008 from $167.0 million in 2007. Leasing, selling and general expenses, as a percentage of total revenues, were 51.1% and 52.5% in 2008 and 2007, respectively. This decrease as a percentage of revenues is due to the operating leverage associated with our leasing activities and in part, due to cost saving synergies related to the Merger that we realized during the last two quarters of 2008. The increase in 2008 of $45.3 million is primarily the result of the Merger, as the majority of our leasing, selling and general expenses increase occurred during the third and fourth quarters. In 2007, our expenses included the costs associated with developing infrastructure to support our Europe operations as a result of implementing our leasing business model for the operations we acquired in 2006. These fixed costs, for the most part, continued into 2008. Included in leasing, selling and general expense is approximately $5.1 million and $4.0 million in 2008 and 2007, respectively, of expenses related to share-based compensation in accordance with SFAS No. 123(R). The major increases in leasing, selling and general expenses for 2008 were:
(1) payroll and related payroll costs, which increased by $22.0 million primarily in connection with the additional locations such as staffing for branch managers, sales and office personnel and yard personnel, including drivers, fork lift operators and dispatchers; (2) delivery and freight costs, including fuel, which increased $10.0 million related to picking up and delivery of containers, including the additional trucks we added at the new locations; and (3) building and land lease costs for our locations, which increased $2.5 million, including the assumption of leases utilized by the locations added in the Merger and contractual rate increases at existing and new locations. The increased delivery and freight costs includes the higher cost of fuel, primarily during the first three quarters of 2008, and for more third-party vendors which were used for the delivery of our units, mainly wood modular offices. Part of the increased costs was passed to our customers in the form of higher trucking rates.

Integration, merger and restructuring expenses in 2008 represent estimated costs for exiting targeted Mobile Mini branch operations that overlapped with Mobile Storage Group's properties, repositioning and relocating assets to their intended location, and other costs associated with personnel and office expenses associated with the integration of the companies. Also included in this expense is our estimated cost for restructuring our manufacturing operations and includes severance, related benefit costs and asset impairment charges for the disposal of manufacturing equipment and inventories that will not be used in the restructured environment.

Goodwill impairment in 2008 represents a non-cash charge for a portion of our goodwill related to our U.K. and The Netherlands operations as more fully described in the Notes to Consolidated Financial Statements included in Item 8 in this report.

EBITDA increased $7.1 million, or 5.5%, to $137.0 million in 2008 from $129.9 million in 2007. EBITDA in 2008 includes integration, merger and restructuring expenses of $24.4 million and a charge for goodwill impairment of $13.7 million, both as described above.

Depreciation and amortization expenses increased $10.6 million, or 50.2%, to $31.8 million in 2008 from $21.1 million in 2007. The higher depreciation expense is primarily due to the increase in our lease fleet over the prior year including the depreciation of units acquired through acquisitions. It also includes the lease fleet of additional wood modular offices which have a higher depreciation rate than our steel units. Also, in 2007 and 2008, depreciation expense includes the related depreciation on the additions to property, plant and equipment, primarily trucks, forklifts and trailers, to support the lease fleet, and the customized ERP system to enhance our reporting environment. In 2008, depreciation and amortization expense includes the amortization of customer relationships and trade name valuation that were associated with the MSG Merger. Since December 31, 2007, our lease fleet cost basis for depreciation increased by $292.2 million. See "Critical Accounting Policies, Estimates and Judgments" within this Item 7.

Interest expense increased $23.2 million, or 93.3%, to $48.1 million in 2008 from $24.9 million in 2007. This increase is primarily due to the $540.9 million of debt we assumed in the Merger. Although we assumed Mobile Storage's $200.0 million of 9.75% senior notes and the interest rate spread under our revolving credit facility

increased from LIBOR + 1.25% to LIBOR + 2.50%, our average borrowing rate declined slightly in 2008, due to lower prevailing LIBOR rates. The monthly weighted average interest rate on our debt was 6.8% for 2008 compared to 7.0% for 2007, excluding amortization of debt issuance costs. Taking into account the amortization of debt issuance costs, the monthly weighted average interest rate was 7.2% in 2008 and 7.3% in 2007.

Debt extinguishment expense for 2007 resulted from the write-off of the remaining unamortized deferred loan costs and the redemption premium on $97.5 million aggregate principal amount of outstanding 9.5% Senior Notes redeemed in the second quarter of 2007.

Provision for income taxes was based on an annual effective tax rate of 49.1% for 2008 as compared to an annual effective tax rate of 39.1% for 2007. Our 2008 consolidated tax provision includes the expected tax rates for our operations in the U.S., Canada, U.K. and The Netherlands. At December 31, 2008, we had a federal net operating loss carryforward of approximately $206.1 million, which expires if unused from 2017 to 2028. In addition, we had net operating loss carryforwards in the various states in which we operate. We believe, based on internal projections, that we will generate sufficient taxable income needed to realize the corresponding federal and state deferred tax assets to the extent they are recorded as deferred tax assets in our balance sheet.

Net income in 2008 was $29.0 million, as compared to $44.2 million in 2007. Our 2008 net income results were primarily achieved by our 30.5% increase in revenues and the operating leverage associated with this growth and synergies achieved in the last six months of 2008 as a result of the Merger. The 2008 year was negatively affected by the $24.4 million ($15.3 million after tax), charge related to the integration, merger and restructuring expense in addition to $13.7 million after tax charge for goodwill impairment. In 2007, net income was unfavorably affected by the $11.2 million, ($6.9 million after tax) charge for debt extinguishment expense related to the redemption of our then outstanding 9.5% Senior Notes.

Twelve Months Ended December 31, 2007 Compared to Twelve Months Ended December 31, 2006

Total revenues in 2007 increased $44.9 million, or 16.4%, to $318.3 million from $273.4 million in 2006. Leasing, our primary focus, accounted for approximately 89.4% of total revenues during 2007. Leasing revenues in 2007 increased $39.5 million, or 16.1%, to $284.6 million from $245.1 million in 2006. This increase resulted from a 5.2% increase in the average rental yield per unit, a 10.4% increase in the average number of units on lease and 0.5% increase due to favorable exchange rates, in each case as compared to the same period in 2006. The increase in revenues resulted from an increase in average rental rates over the prior year, an increase in revenue for ancillary rental services, such as delivery charges and continued change in the mix of units being added to our fleet. We have added more premium containers and portable wood offices to the lease fleet in recent periods for which we obtain higher rental rates than basic storage units. The mobile offices we have added to our lease fleet in recent quarters have on average been larger units that command higher rents. These higher lease rates were partially offset by lower rental rates on units added through acquisitions that continue on lease, including Europe, which on the average are smaller, were not remanufactured and were primarily storage containers rather than mobile offices. In 2007, our leasing revenue growth rate was 16.1% as compared to 30.0% in 2006. The leasing revenue growth rate during the four quarters of 2007 was 28.2%, 18.6%, 12.8% and 8.2%, respectively. The . . .