(5) Impairment of North American Wood Mobile Offices

Mobile Mini’s business strategy is to invest in high return, low maintenance, long-lived assets. Wood mobile offices require more maintenance and upkeep than Mobile Mini’s stainless steel ground level offices and containers, resulting in lower margins as compared to other portable storage products, as well as the newly-acquired specialty containment products. During March 2015, the Company entered into discussions regarding the possible sale of Mobile Mini’s wood mobile offices within its North American Portable Storage segment. The discussions indicated that the fleet might be sold at an amount below carrying value. (See additional discussion regarding the divestiture of the wood mobile offices in Note 18.)

Mobile Mini reviews long-lived assets such as rental fleet, property, plant and equipment, and intangibles, for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may be impaired. Based upon the events described above, the Company conducted a review for impairment for these particular long-lived assets as of March 31, 2015. The review included assumptions of cash flows considering the likelihood of possible outcomes that existed as of the date of the review, including assigning probabilities to the outcomes. Management estimated fair market value for the wood mobile offices based upon purchase price discussions. Based on this review, management determined that the assets were impaired as of March 31, 2015 and an impairment loss, was recognized in the amount by which the carrying amount of the asset group exceeded the estimated fair value as follows: