GENERAL FINANCE : Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

The following discussion of our financial condition and results of operations
should be read together with the consolidated financial statements and the
accompanying notes thereto, which are included in our Annual Report on Form 10-K
for the fiscal year ended June 30, 2020 (the "Annual Report") filed with the
Securities and Exchange Commission ("SEC"), as well as the condensed
consolidated financial statements included in this Quarterly Report on
Form 10-Q. This Quarterly Report on Form 10-Q includes forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We
have based these forward-looking statements on our current expectations and
projections about future events. These forward-looking statements are subject to
known and unknown risks, uncertainties and assumptions about us that may cause
our actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by such forward-looking statements. In some
cases, you can identify forward-looking statements by terminology such as "may,"
"should," "could," "would," "expect," "plan," "anticipate," "believe,"
"estimate," "continue" or the negative of such terms or other similar
expressions. Risk factors that might cause or contribute to such discrepancies
include, but are not limited to, those described in our Annual Report and other
SEC filings. We maintain a web site at www.generalfinance.com that makes
available, through a link to the SEC's EDGAR system website, our SEC filings.

References to "we," "us," "our" or the "Company" refer to General Finance
Corporation, a Delaware corporation ("GFN"), and its consolidated subsidiaries.
These subsidiaries include GFN U.S. Australasia Holdings, Inc., a Delaware
corporation ("GFN U.S."); GFN Insurance Corporation, an Arizona corporation
("GFNI"); GFN North America Leasing Corporation, a Delaware corporation ("GFNNA
Leasing"); GFN North America Corp., a Delaware corporation ("GFNNA"); GFN Realty
Company, LLC, a Delaware limited liability company ("GFNRC"); GFN Manufacturing
Corporation, a Delaware corporation ("GFNMC"), and its subsidiary, Southern
Frac, LLC, a Texas limited liability company (collectively "Southern Frac");
Pac-Van, Inc., an Indiana corporation, and its Canadian subsidiary, PV
Acquisition Corp., an Alberta corporation (collectively "Pac-Van"); and Lone
Star Tank Rental Inc., a Delaware corporation ("Lone Star"); GFN Asia Pacific
Holdings Pty Ltd, an Australian corporation ("GFNAPH"), and its subsidiaries,
Royal Wolf Holdings Pty Ltd, an Australian corporation, which was dissolved in
June 2019 ("RWH"), Royal Wolf Trading Australia Pty Limited, an Australian
corporation, and Royalwolf Trading New Zealand Limited, a New Zealand
Corporation (collectively, "Royal Wolf").

Overview

Founded in October 2005, we are a leading specialty rental services company offering portable (or mobile) storage, modular space and liquid containment solutions in these three distinct, but related industries, which we collectively refer to as the "portable services industry."

We have two geographic areas that include four operating segments; the
Asia-Pacific (or Pan-Pacific) area, consisting of Royal Wolf (which leases and
sells storage containers, portable container buildings and freight containers in
Australia and New Zealand) and North America, consisting of Pac-Van (which
leases and sells storage, office and portable liquid storage tank containers,
modular buildings and mobile offices), and Lone Star (which leases portable
liquid storage tank containers and containment products, as well as provides
certain fluid management services, to the oil and gas industry in the Permian
and Eagle Ford basins of Texas), which are combined to form our "North American
Leasing" operations, and Southern Frac (which manufactures portable liquid
storage tank containers and other steel-related products). As of March 31, 2021,
our two geographic leasing operations primarily lease and sell their products
through 24 customer service centers ("CSCs") in Australia, 16 CSCs in New
Zealand, 63 branch locations in the United States and three branch locations in
Canada. At that date, we had 279 and 651 employees and 44,650 and 55,789 lease
fleet units in the Asia-Pacific area and North America, respectively.

Our lease fleet is comprised of three distinct specialty rental equipment categories that possess attractive asset characteristics and serve our customers' on-site temporary needs and applications. These categories match the sectors comprising the portable services industry.

Our portable storage category is segmented into two products: (1) storage
containers, which primarily consist of new and used steel shipping containers
under International Organization for Standardization ("ISO") standards, that
provide a flexible, low cost

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alternative to warehousing, while offering greater security, convenience and immediate accessibility; and (2) freight containers, which are designed for transport of products either by road and rail and are only offered in our Asia-Pacific territory.

Our modular space category is segmented into three products: (1) office
containers, which are referred to as portable container buildings in the
Asia-Pacific, are either modified or specifically manufactured containers that
provide self-contained office space with maximum design flexibility. Office
containers in the United States are oftentimes referred to as ground level
offices ("GLOs"); (2) modular buildings, which provide customers with flexible
space solutions and are often modified to customer specifications and (3) mobile
offices, which are re-locatable units with aluminum or wood exteriors and wood
(or steel) frames on a steel carriage fitted with axles, and which allow for an
assortment of "add-ons" to provide convenient temporary space solutions.

Our liquid containment category includes portable liquid storage tanks that are
manufactured 500-barrel capacity steel containers with fixed axles for
transport. These units are regularly utilized for a variety of applications
across a wide range of industries, including refinery, petrochemical and
industrial plant maintenance, oil and gas services, environmental remediation
and field services, infrastructure building construction, marine services,
pipeline construction and maintenance, tank terminal services, waste management,
wastewater treatment and landfill services.

COVID-19

In December 2019, a novel strain of coronavirus (COVID-19) was reported to have
surfaced in Wuhan, China and has since spread to a number of other countries,
including the United States, Canada, Australia and New Zealand. In March 2020,
the World Health Organization characterized COVID-19 as a pandemic. The COVID-19
pandemic has not had a significant impact on our core mobile storage business,
but has had a significant impact in our liquid containment business in the oil
and gas sector. While conditions in this sector have improved somewhat recently,
at the outset the decrease in demand caused by the COVID-19 pandemic and the
political tensions between several large oil producing countries caused an even
further decline in oil and gas prices in an already soft market. A significant
portion of our leasing revenues of our liquid containment business in North
America are derived from customers in the oil and gas industry, particularly
those doing business in the Permian and Eagle Ford basins in Texas, who are
typically adversely affected when this industry is in a downward economic cycle.
We have also seen reductions in construction activity, including suspensions,
postponements and some cancellations of projects, in both geographic venues.
Efforts to contain the spread of COVID-19 continue, including the commencement
of vaccinations. Many countries, including the United States, Canada, Australia
and New Zealand, still have some level of restrictions on, among other things,
international travel, social gatherings and businesses not considered essential.
The existence of the COVID-19 pandemic, the fear associated with the COVID-19
pandemic and the reactions of governments and private sectors around the world
in response to the COVID-19 pandemic have impeded a great number of businesses
(including ours, our customers and our vendors) to conduct normal business
operations. We believe that our business is essential, which allows us to
continue to serve customers that remain operational. However, if we are required
to close a certain number of our locations or a number of our employees cannot
work because of illness or otherwise, our business could be materially adversely
affected in a rapid manner. Similarly, if our customers experience adverse
business consequences due to the COVID-19 pandemic, including being required to
shut down their operations, demand for our services and products could also be
materially adversely affected in a rapid manner. The situation will likely
become more critical if prolonged. We have curtailed domestic and international
travel, promoted social distancing and work-from-home practices, implemented
restrictions on investing and spending, and laid the groundwork for other
potential cost-cutting measures. We continue to monitor the situation, but the
situation of the COVID-19 pandemic continues to evolve and, therefore, it
remains difficult to reasonably predict the extent to which our results of
operations, liquidity and financial condition will ultimately be impacted.

Results of Operations

Quarter Ended March 31, 2021 ("QE 2021") Compared to Quarter Ended March 31, 2020 ("QE 2020")

Revenues.  Revenues were $90.0 million in both QE FY 2021 and QE FY 2020.  This
consisted of a slight increase of $0.2 million in revenues in our North American
leasing operations, an increase of $1.9 million, or 6%, in revenues in the
Asia-Pacific area and a decrease of $2.2 million, or 88%, in manufacturing
revenues from Southern Frac.  The effect of the average currency exchange rate
of a stronger Australian dollar relative to the U.S. dollar in QE FY 2021 versus
QE FY 2020 increased the translation of revenues from the Asia-Pacific area.

The average currency exchange rate of one Australian dollar during QE FY 2021 was $0.7727 U.S. dollar compared

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to $0.6588 U.S. dollar during QE FY 2020. In Australian dollars, total revenues in the Asia-Pacific area actually decreased by 9% in QE FY 2021 from QE FY 2020.

Excluding Lone Star (doing business solely in the oil and gas sector), total
revenues of our North American leasing operations increased by approximately
$5.3 million, or 11%, in QE FY 2021 from QE FY 2020 as a result of across the
board increases in most sectors; offset somewhat by decreases totaling $1.4
million in the oil and gas and industrial sectors. At Lone Star, revenues
decreased by $5.1 million, or approximately 63%, from $8.1 million in QE FY 2020
to $3.0 million in QE FY 2021. As discussed above, revenues in the Asia-Pacific
area benefited between the periods because of the translation effect of the
stronger Australian dollar. In local Australian dollars, revenue between the
periods decreased by AUS$4.1 million, primarily in the transportation
(intermodal), utilities, construction and consumer sectors.

Sales and leasing revenues represented 36% and 64% of total non-manufacturing revenues in QE FY 2021, as compared to 34% and 66% in QE FY 2020, respectively.

Non-manufacturing sales during QE FY 2021 amounted to $32.6 million, compared to
$29.7 million during QE FY 2020, representing an increase of $2.9 million, or
10%; and comprised of an increase in our North American leasing operations of
$3.2 million and a decrease in the Asia Pacific area of $0.3 million. The
decrease in sales in the Asia-Pacific area was comprised of a decrease of $1.4
 million in the CSC operations ($2.9 million decrease due to lower unit sales,
$0.4 million increase due to higher average prices and a $1.1 million increase
due to foreign exchange movements); offset somewhat by an increase of $1.1
million in the national accounts group ($5.9 million increase due to higher unit
sales, $5.7 million decrease due to lower average prices and a $0.9 million
increase due to foreign exchange movements). The translation of sales in the
Asia-Pacific area was beneficially impacted by the stronger Australian dollar
when comparing QE FY 2021 to QE FY 2020. In Australian dollars, total sales in
the Asia-Pacific area decreased by 16% in QE FY 2021 from QE FY 2020; primarily
in the transportation, utilities, consumer and mining sectors, which decreased
by an aggregate AUS$3.3 million. In QE FY 2021, the transportation sector
included two large sales totaling AUS$7.1 million; whereas in QE FY 2020, the
transportation sector included three large sales totaling AUS$9.2 million and
the utilities sector included one large sale for AUS$1.3 million. In our North
American operations, the increase in non-manufacturing sales between the periods
was across the board in most sectors; offset somewhat by a decrease in the
industrial sector of $1.0 million. The reduction in manufacturing sales at
Southern Frac between the periods was in liquid containment tanks and specialty
trailers, which decreased by $2.2 million.

Leasing revenues totaled $57.1 million in QE FY 2021, a decrease of $0.7
million, or 1%, from $57.8 million in QE FY 2020. This consisted of a decrease
of $2.9 million, or 7%, in North America and an increase of $2.2 million, or
14%, in the Asia-Pacific area. In Australian dollars, leasing revenues actually
decreased by 3% percent in the Asia-Pacific area in QE FY 2021 from QE FY 2020.

In the Asia-Pacific area, average utilization in the retail and the national
accounts group operations was 85% and 88%, respectively, during QE FY 2021; and
82% and 78%, respectively, during QE FY 2020. The overall average utilization
was 85% in QE FY 2021 and 81% in QE FY 2020; and the average monthly lease rate
of containers decreased to AUS$167 in QE FY 2021 from AUS$169 in QE FY 2020,
caused primarily by a proportionately lower average lease rate in freight
containers between the periods. However, the composite average monthly number of
units on lease was over 400 higher in QE FY 2021, as compared to QE FY 2020.
Locally, in Australian dollars, leasing revenue decreased between the periods by
an aggregate AUS$0.6 million, primarily in the construction, special events and
moving (removals) sectors, which decreased by approximately AUS$1.6 million;
offset somewhat by increases totaling AUS$1.1 million in the education,
industrial, mining and rental sectors.

In our North American leasing operations, average utilization rates were 75%,
83%, 37%, 81% and 82% and average monthly lease rates were $119, $411, $485,
$410 and $920 for storage containers, office containers, frac tank containers,
mobile offices and modular units, respectively, during QE FY 2021; as compared
to 69%, 79%, 50%, 81% and 82% and average monthly lease rates were $117, $385,
$838, $378 and $893 for storage containers, office containers, frac tank
containers, mobile offices and modular units, respectively, during QE FY 2020.
The average composite utilization rate was 74% in QE FY 2021 and 71% in QE FY
2020, and the composite average monthly number of units on lease was over 2,250
higher in QE FY 2021 as compared to QE FY 2020. The decrease in leasing revenues
between the periods was primarily in the oil and gas and sector, which in QE FY
2021 was $5.8 million below QE FY 2020, substantially attributable to Lone Star;
partially offset by increases across the board in most of the other sectors.

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Cost of Sales. Cost of sales from our lease inventories and fleet (which is the
cost related to our sales revenues only and exclusive of the line items
discussed below) increased by $1.1 million from $21.4 million during QE FY 2020
to $22.5 million during QE FY 2021, and our gross profit percentage from these
non-manufacturing sales increased to 31% in QE FY 2021 from 28% in QE FY 2020.
Fluctuations in gross profit percentage between periods is not unusual as a
significant amount of our non-manufacturing sales are out of the lease fleet
which, among other things, would have varying sales prices and carrying values.
Cost of sales from our manufactured products totaled $0.4 million in QE FY 2021,
as compared to $2.0 million in QE FY 2020, resulting in a slight gross loss
during QE FY 2021 versus a gross profit of $0.5 million in QE FY 2020. The
decrease in manufacturing gross margin in QE FY 2021 from QE FY 2020 was due to
the reduced sales discussed above and less than optimal production levels.

Direct Costs of Leasing Operations and Selling and General Expenses. The total
of direct costs of leasing operations and selling and general expenses decreased
by $1.0 million from $43.7 million during QE FY 2020 to $42.7 million during QE
FY 2021. As a percentage of revenues, these costs decreased to 47% during QE FY
2021 from 49% in QE FY 2020. Reduced revenues during QE FY 2021 from QE FY 2020,
particularly lower leasing revenues due primarily to the soft oil and gas market
in North America, adversely impacted us during QE FY 2021; but did not result in
reduced margins from our core infrastructure. As discussed above in "COVID-19,"
we are monitoring the situation, including implementing restrictions on
investing and spending. The impact of the COVID-19 pandemic continues to evolve
and, therefore, we cannot reasonably predict at this time the extent to which
our infrastructure will ultimately be impacted.

Depreciation and Amortization. Depreciation and amortization increased by
$0.7 million to $9.3 million in QE FY 2021 from $8.6 million in QE FY 2020. The
increase between the periods was in North America, which made significantly more
investments in its fleet than the Asia Pacific. The Asia-Pacific was enhanced by
the translation effect of a stronger Australian dollar to the U.S. dollar in QE
FY 2021 versus QE FY 2020. In Australian dollars, depreciation and amortization
was AUS$4.0 million in QE FY 2021 versus AUS$4.7 million in QE FY 2020.

Interest Expense. Interest expense in QE FY 2021 was $5.2 million, a decrease of
$0.8 million from $6.0 million in QE FY 2020. In North America, QE FY 2021
interest expense decreased by $0.8 million from QE FY 2020 due to both a lower
weighted-average interest rate and average borrowings between the periods. The
weighted-average interest rate was 4.5% (which does not include the effect of
the accretion of interest and amortization of deferred financing costs) in QE FY
2021 versus 5.4% in QE FY 2020. In the Asia-Pacific area, interest expense was
$2.1 million in both QE FY 2021 and QE FY 2020 as lower average borrowings were
offset by a higher weighted-average interest rate and a stronger Australian
dollar between the periods. The weighted-average interest rate was 7.0% (which
does not include the effect of translation, interest rate swap contracts and
options and the amortization of deferred financing costs) in QE FY 2021 versus
6.2% in QE FY 2020. In Australian dollars, interest expense was AUS$2.8 million
in QE FY 2021 versus AUS$3.2 million in QE FY 2020.

Change in Valuation of Bifurcated Derivatives. QE FY 2021 includes a non-cash
benefit of $3.6 million for the change in the valuation of the stand-alone
bifurcated derivatives (see Note 5 of Notes to Condensed Consolidated Financial
Statements), a $14.9 million increase from the QE FY 2020 non-cash charge of
$11.3 million.

Foreign Currency Exchange and Other. The currency exchange rate of one
Australian dollar to one U.S. dollar was 0.701415 at December 31, 2019, 0.614241
at March 31, 2020, 0.770905 at December 31, 2020 and 0.760824 at March 31, 2021.
In QE FY 2020 and QE FY 2021, net unrealized and realized foreign exchange gains
(losses) totaled $(2,627,000) and $(59,000) and $36,000 and $16,000,
respectively. In addition, in QE FY 2020 and QE FY 2021, net unrealized exchange
gains (losses) on forward exchange contracts totaled $587,000 and $1,246,000,
respectively.

Income Taxes. Our income tax provision for QE FY 2021 and QE FY 2020 derived
effective tax rates differing from the U.S. federal statutory rate of 21%,
primarily as a result of nontaxable or nondeductible items for the change in the
valuation of the bifurcated derivatives in the Convertible Notes. Additionally,
in both periods, the effective tax rate also differs from the U.S. federal tax
rate because of state income taxes from the filing of tax returns in multiple
U.S. states and the effect of doing business and filing income tax returns in
foreign jurisdictions and for equity plan activity that is currently recognized
in the consolidated statements of operations.

Preferred Stock Dividends. In both QE FY 2021 and QE FY 2020, we paid dividends
of $0.9 million primarily on our 9.00% Series C Cumulative Redeemable Perpetual
Preferred Stock.

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Net Income Attributable to Common Stockholders. Net income attributable to
common stockholders was $10.3 million in QE FY 2021 versus a net loss of $9.5
million in QE FY 2020, an increase of $19.8 million. This increase in QE FY 2021
from QE FY 2020 was primarily due to a higher operating profit in the
Asia-Pacific area, the greater non-cash benefit for the change in the valuation
of the stand-alone bifurcated derivatives and a lower interest expense; offset
somewhat by a lower operating profit in North America.

Nine Months Ended March 31, 2021 ("FY 2021") Compared to Nine Months Ended March 31, 2020 ("FY 2020")

Revenues. Revenues decreased by $10.5 million, or 4%, to $261.5 million in FY
2021 from $272.0 million in FY 2020. This consisted of a decrease of
$7.9 million, or 4%, in revenues in our North American leasing operations, an
increase of $2.5 million, or 3%, in revenues in the Asia-Pacific area and a
decrease of $5.1 million, or 81%, in manufacturing revenues from Southern Frac.
The effect of the average currency exchange rate of a stronger Australian dollar
relative to the U.S. dollar in FY 2021 versus FY 2020 increased the translation
of revenues from the Asia-Pacific area. The average currency exchange rate of
one Australian dollar during FY 2021 was $0.7395 U.S. dollar compared to $0.6762
U.S. dollar during FY 2020. In Australian dollars, total revenues in the
Asia-Pacific area actually decreased by 6% in FY 2021 from FY 2020.

Excluding Lone Star (doing business solely in the oil and gas sector), total
revenues of our North American leasing operations increased by 5% in FY 2021
from FY 2020 as a result of across the board increases in most sectors; offset
somewhat by decreases totaling $5.3 million in the oil and gas and industrial
sectors. At Lone Star, revenues decreased by $15.1 million, or approximately
65%, from $23.1 million in FY 2020 to $8.0 million in FY 2021. As discussed
above, revenues in the Asia-Pacific area benefited between the periods because
of the translation effect of the stronger Australian dollar. In local Australian
dollars, revenue between the periods actually decreased by AUS$7.7 million,
primarily in the transportation (intermodal) sector, which decreased by AUS$8.4
million; offset somewhat by an increase of AUS$1.1 million in the mining sector.

Sales and leasing revenues represented 36% and 64% of total non-manufacturing revenues in FY 2021, as compared to 33% and 67% in FY 2020, respectively.

Non-manufacturing sales during FY 2021 amounted to $92.5 million, compared to
$88.2 million during FY 2020, representing an increase of $4.3 million, or 5%;
and comprised of an increase in our North American leasing operations of $5.1
million and a decrease in the Asia Pacific area of $0.8 million. The decrease in
sales in the Asia-Pacific area was comprised of a decrease of $1.7  million in
the CSC operations ($3.2 million decrease due to lower unit sales, $0.7 million
increase due to lower average prices and a $2.2 million increase due to foreign
exchange movements); offset somewhat by an increase of $0.9 million in the
national accounts group ($2.5 million increase due to higher unit sales, $2.7
million decrease due to lower average prices and a $1.1 million increase due to
foreign exchange movements). The translation of sales in the Asia-Pacific area
was beneficially impacted by the stronger Australian dollar when comparing FY
2021 to FY 2020. In Australian dollars, total sales in the Asia-Pacific area
decreased by 10% in FY 2021 from FY 2020, primarily in the transportation,
government and industrial sectors, which decreased by an aggregate AUS$9.5
million; offset somewhat by a total increase of AUS$3.7 million in the
construction, utilities, mining and defense sectors. In FY 2021, the
transportation sector included three large sales totaling AUS$8.7 million and
the utilities sector included one large sale for AUS$2.2 million; whereas in FY
2020, the transportation sector included six large sales totaling AUS$17.4
million and the utilities sector included one large sale for AUS$1.3 million. In
our North American operations, the increase in non-manufacturing sales between
the periods was across the board in most sectors; offset somewhat by a decrease
in the industrial and oil and gas sectors totaling $2.8 million. The reduction
in manufacturing sales at Southern Frac between the periods was due primarily in
liquid containment and specialty tanks, as well miscellaneous parts, which
decreased by $5.4 million; offset somewhat by increased sales of GLOs of $0.3
million.

Leasing revenues totaled $167.8 million in FY 2021, a decrease of $9.7 million,
or 5%, from $177.5 million in FY 2020. This consisted of a decrease of
$13.0 million, or 7%, in North America and an increase of $3.3 million, or 7%,
in the Asia-Pacific area. In Australian dollars, leasing revenues actually
decreased by 2% percent in the Asia-Pacific area in FY 2021 from FY 2020.

In the Asia-Pacific area, average utilization in the retail and the national
accounts group operations was 83% and 78%, respectively, during FY 2021; and 81%
and 73%, respectively, during FY 2020. The overall average utilization was 82%
in FY 2021 and 80% in FY 2020; and the average monthly lease rate of containers
increased to AUS$170 in FY 2021 from AUS$167 in FY 2020, caused primarily by
higher average lease rates in storage and portable building containers between
the periods. However, the

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composite average monthly number of units on lease was over 350 lower in FY
2021, as compared to FY 2020. Locally, in Australian dollars, leasing revenue
decreased between the periods by AUS$1.6 million, primarily in the construction,
special events and moving sectors, which decreased by an aggregate AUS$3.3
million; offset somewhat by increases totaling AUS$1.8 million in the health,
government, rental, mining and industrial sectors.

In our North American leasing operations, average utilization rates were 76%,
83%, 31%, 81% and 82% and average monthly lease rates were $123, $413, $511,
$407 and $928 for storage containers, office containers, frac tank containers,
mobile offices and modular units, respectively, during FY 2021; as compared to
75%, 80%, 56%, 84% and 82% and average monthly lease rates were $123, $387,
$819, $365 and $874 for storage containers, office containers, frac tank
containers, mobile offices and modular units, respectively, during FY 2020,
respectively. The average composite utilization rate was 73% in FY 2021 and 74%
in FY 2020, and the composite average monthly number of units on lease was over
400 higher in FY 2021 as compared to FY 2020. The decrease in leasing revenues
between the periods was primarily in the oil and gas sector, which in FY 2021
was $18.1 million below FY 2020, substantially attributable to Lone Star;
partially offset by increases across the board in most of the other sectors.

Cost of Sales. Cost of sales from our lease inventories and fleet (which is the
cost related to our sales revenues only and exclusive of the line items
discussed below) increased by $1.8 million from $63.3 million during FY 2020 to
$65.1 million during FY 2021, but our gross profit percentage from these
non-manufacturing sales increased to 30% in FY 2021 from 28% in FY 2020.
Fluctuations in gross profit percentage between periods is not unusual as a
significant amount of our non-manufacturing sales are out of the lease fleet
which, among other things, would have varying sales prices and carrying values.
Cost of sales from our manufactured products totaled $1.4 million in FY 2021, as
compared to $5.4 million in FY 2020, resulting in a gross loss of $0.2 million
in FY 2021 versus a gross profit of $0.9 million in FY 2020. The decrease in
manufacturing gross margin in FY 2021 from FY 2020 was due to the reduced sales
discussed above and less than optimal production levels.

Direct Costs of Leasing Operations and Selling and General Expenses. The total
of direct costs of leasing operations and selling and general expenses decreased
by $6.3 million from $130.4 million during FY 2020 to $124.1 million during FY
2021. As a percentage of revenues, these costs decreased to 47% during FY 2021
from 48% in FY 2020. Reduced revenues during FY 2021 from FY 2020, particularly
lower leasing revenues due primarily to the soft oil and gas market in North
America, adversely impacted us during FY 2021; but did not result in reduced
margins from our core infrastructure. We do not make significant infrastructure
changes unless we believe the economic and market conditions causing these
adverse factors are long-term in nature. As discussed above in "COVID-19," we
are monitoring the situation, including implementing restrictions on investing
and spending. The impact of the COVID-19 pandemic continues to evolve and,
therefore, we cannot reasonably predict at this time the extent to which our
infrastructure will ultimately be impacted.

Depreciation and Amortization. Depreciation and amortization increased by
$1.2 million to $27.8 million in FY 2021 from $26.6 million in FY 2020. The
increase between the periods was comprised of a $1.9 million increase in North
America, which made significantly more investments in its fleet than the Asia
Pacific, and a $0.7 million reduction in the Asia-Pacific area. The reduction in
the Asia-Pacific was partially offset by the translation effect of a stronger
Australian dollar to the U.S. dollar in FY 2021 versus FY 2020. In Australian
dollars, depreciation and amortization was AUS$12.7 million in FY 2021 versus
AUS$15.0 million in FY 2020.

Interest Expense. Interest expense in FY 2021 was $17.6 million, a decrease of
$2.6 million from $20.2 million in FY 2020. In North America, FY 2021 interest
expense decreased by $1.9 million from FY 2020 due to both lower average
borrowings and a lower weighted-average interest rate between the periods. The
weighted-average interest rate was 5.0% (which does not include the effect of
the accretion of interest and amortization of deferred financing costs) in FY
2021 versus 5.8% in FY 2020. FY 2021 included an additional $0.6 million of
interest in North America from having both public issuances of Senior Notes
outstanding for a period of time prior to the redemption of the 8.125% Senior
Notes (see Note 5 of Note to Condensed Consolidated Financial Statements).
Further, interest expense includes an additional $0.4 million due primarily to
the write-off of unamortized deferred financing costs as a result of the
redemption of the 8.125% Senior Notes. In the Asia-Pacific area, FY 2021
interest expense was $0.7 million lower from FY 2020 also due to both lower
average borrowings and a lower weighted-average interest rate between the
periods, offset somewhat by the translation effect of a stronger Australian
dollar between the periods. The weighted-average interest rate was 7.1% (which
does not include the effect of translation, interest rate swap contracts and
options and the amortization of deferred financing costs) in FY 2021 versus 7.3%
in FY 2020. In Australian dollars, interest expense was AUS$9.4 million in FY
2021 versus AUS$11.2 million in FY 2020.

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Change in Valuation of Bifurcated Derivatives. FY 2021 includes a non-cash
benefit of $5.5 million for the change in the valuation of the stand-alone
bifurcated derivatives (see Note 5 of Notes to Condensed Consolidated Financial
Statements), an $11.9 million increase from the FY 2020 non-cash charge of $6.4
million.

Foreign Currency Exchange and Other. The currency exchange rate of one
Australian dollar to one U.S. dollar was 0.7029 at June 30, 2019, 0.614241 at
March 31, 2020, 0.687771 at June 30, 2020 and 0.760824 at March 31, 2021. In FY
2020 and FY 2021, net unrealized and realized foreign exchange gains (losses)
totaled $(2,632,000) and $(104,000) and $179,000 and $57,000, respectively. In
addition, in FY 2020 and FY 2021, net unrealized exchange gains (losses) on
forward exchange contracts totaled $331,000 and $304,000, respectively.

Income Taxes. Our income tax provision for FY 2021 and FY 2020 derived effective
tax rates differing from the U.S. federal statutory rate of 21%, primarily as a
result of nontaxable or nondeductible items for the change in the valuation of
the bifurcated derivatives in the Convertible Notes. Additionally, in both
periods, the effective tax rate also differs from the U.S. federal tax rate
because of state income taxes from the filing of tax returns in multiple U.S.
states and the effect of doing business and filing income tax returns in foreign
jurisdictions and for equity plan activity that is currently recognized in the
consolidated statements of operations.

Preferred Stock Dividends. In both FY 2021 and FY 2020, we paid dividends of
$2.8 million primarily on our 9.00% Series C Cumulative Redeemable Perpetual
Preferred Stock.

Net Income Attributable to Common Stockholders. Net income attributable to
common stockholders was $21.8 million in FY 2021 versus $5.0 million in FY 2020,
an increase of $16.8 million. This increase in FY 2021 from FY 2020 was
primarily due to a higher operating profit in the Asia-Pacific area, the greater
non-cash benefit for the change in the valuation of the stand-alone bifurcated
derivatives and a lower interest expense; offset somewhat by a lower operating
profit in North America.

Measures not in Accordance with Generally Accepted Accounting Principles in the United States ("U.S. GAAP")

Earnings before interest, income taxes, impairment, depreciation and
amortization and other non-operating costs and income ("EBITDA") and adjusted
EBITDA are supplemental measures of our performance that are not required by, or
presented in accordance with, U.S. GAAP. These measures are not measurements of
our financial performance under U.S. GAAP and should not be considered as
alternatives to net income, income from operations or any other performance
measures derived in accordance with U.S. GAAP or as an alternative to cash flow
from operating, investing or financing activities as a measure of liquidity.
Adjusted EBITDA is a non-U.S. GAAP measure. We calculate adjusted EBITDA to
eliminate the impact of certain items we do not consider to be indicative of the
performance of our ongoing operations. You are encouraged to evaluate each
adjustment and whether you consider each to be appropriate. In addition, in
evaluating adjusted EBITDA, you should be aware that in the future, we may incur
expenses similar to the expenses excluded from our presentation of adjusted
EBITDA. Our presentation of adjusted EBITDA should not be construed as an
inference that our future results will be unaffected by unusual or non-recurring
items. We present adjusted EBITDA because we consider it to be an important
supplemental measure of our performance and because we believe it is frequently
used by securities analysts, investors and other interested parties in the
evaluation of companies in our industry, many of which present EBITDA and a form
of adjusted EBITDA when reporting their results. Adjusted EBITDA has limitations
as an analytical tool, and should not be considered in isolation, or as a
substitute for analysis of our results as reported under U.S. GAAP. Because of
these limitations, adjusted EBITDA should not be considered as a measure of
discretionary cash available to us to invest in the growth of our business or to
reduce our indebtedness. We compensate for these limitations by relying
primarily on our U.S. GAAP results and

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using adjusted EBITDA only supplementally. The following table shows our adjusted EBITDA and the reconciliation from net income (loss) (in thousands):

                                                    Quarter Ended March 31,          Nine Months Ended March 31,
                                                      2020             2021           2020                2021
Net income (loss)                                 $     (8,625)     $   11,187    $       7,767      $        24,526
Add (deduct) -
Provision for income taxes                                3,715          3,777            9,969                7,474
Change in valuation of bifurcated derivatives
in Convertible Note                                      11,259        (3,622)            6,365              (5,523)
Foreign exchange and other                                2,096        (1,293)            2,405                (549)
Interest expense                                          5,981          5,212           20,235               17,595
Interest income                                           (153)          (150)            (519)                (452)
Depreciation and amortization                             8,712          9,401           26,930               28,061

Share-based compensation expense                            647            477            2,015                1,515
Refinancing costs not capitalized                             -            

 6                -                  303
Adjusted EBITDA                                   $      23,632     $   24,995    $      75,167      $        72,950




Our business is capital intensive, so from an operating level we focus primarily
on EBITDA and adjusted EBITDA to measure our results. These measures provide us
with a means to track internally generated cash from which we can fund our
interest expense and fleet growth objectives. In managing our business, we
regularly compare our adjusted EBITDA margins on a monthly basis. As capital is
invested in our established branch (or CSC) locations, we achieve higher
adjusted 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
start-up 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 adjusted EBITDA margins in its early years until the
number of units on rent increases. Because of our higher 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 and adjusted EBITDA margins. Conversely, absent
significant growth in leasing revenues, the adjusted EBITDA margin at a branch
will remain relatively flat on a period by period comparative basis.

Liquidity and Financial Condition

Though we have raised capital at the corporate level to primarily assist in the
funding of acquisitions and lease fleet expenditures, as well as for general
purposes, our operating units substantially fund their operations through
secured bank credit facilities that require compliance with various covenants.
These covenants require our operating units to, among other things; maintain
certain levels of interest or fixed charge coverage, EBITDA (as defined),
utilization rate and overall leverage.

Asia-Pacific Leasing Senior Credit Facility

Our operations in the Asia-Pacific area had an AUS$150,000,000 secured senior
credit facility, as amended, under a common terms deed arrangement with the
Australia and New Zealand Banking Group Limited ("ANZ") and Commonwealth Bank of
Australia ("CBA") (the "ANZ/CBA Credit Facility"). On October 26, 2017, RWH
(subsequently replaced by GFNAPH) and its subsidiaries and a syndicate led by
Deutsche Bank AG, Sydney Branch ("Deutsche Bank"), entered into a Syndicated
Facility Agreement (the "Syndicated Facility Agreement"). Pursuant to the
Syndicated Facility Agreement, the parties entered into a senior secured credit
facility and repaid the ANZ/CBA Credit Facility on November 3, 2017. The senior
secured credit facility, as amended (the "Deutsche Bank Credit Facility"),
consists of a $32,715,400 (AUS$43,000,000) Facility A that will amortize
semi-annually; a $88,636,000 (AUS$116,500,000) Facility B that has no scheduled
amortization; a $15,216,500 (AUS$20,000,000) revolving Facility C that is used
for working capital, capital expenditures and general corporate purposes; and a
$28,530,900 (AUS$37,500,000) revolving Term Loan Facility D. Borrowings bear
interest at the three-month bank bill swap interest rate in Australia ("BBSW"),
plus a margin of 4.25% to 5.50% per annum, as determined by net leverage, as
defined. The Deutsche Bank Credit Facility is secured by substantially all of
the assets of Royal Wolf and by the pledge of all the capital stock of GFNAPH
and its subsidiaries and matures on November 2, 2023.

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North America Senior Credit Facility

Our North America leasing (Pac-Van and Lone Star) and manufacturing operations
(Southern Frac) have a combined $285,000,000 senior secured revolving credit
facility, as amended, with a syndicate led by Wells Fargo Bank, National
Association ("Wells Fargo") that also includes East West Bank, CIT Bank, N.A.,
the CIBC Bank USA, KeyBank, National Association, Bank Hapoalim, B.M.,
Associated Bank and Bank of the West (the "Wells Fargo Credit Facility"). In
addition, the Wells Fargo Credit Facility provides an accordion feature that may
be exercised by the syndicate, subject to the terms in the credit agreement, to
increase the maximum amount that may be borrowed by an additional $25,000,000.
The Wells Fargo Credit Facility matures on December 14, 2025, assuming our
publicly-traded senior notes due October 31, 2025 (see below) are extended to a
date not earlier than March 14, 2026, or have been repaid in full or refinanced
or replaced on terms satisfactory to the Wells Fargo Credit Facility; otherwise
the Wells Fargo Credit Facility would mature on July 31, 2025.

Borrowings under the Wells Fargo Credit Facility accrue interest, at our option,
either at the base rate, as defined, or the LIBOR rate, as defined, with a
minimum of 0.5%; plus an applicable margin range of 2.50% to 3.00% based on the
average excess availability. The Wells Fargo Credit Facility also specifies the
future conditions under which the current LIBOR-based interest rate could be
replaced in the future with an alternate benchmark interest rate. There is an
unused commitment fee of 0.250% - 0.375%, based on the average revolver usage.

The Wells Fargo Credit Facility is secured by substantially all of the rental
fleet, inventory and other assets of our North American leasing and
manufacturing operations. The Wells Fargo Credit Facility effectively not only
finances our North American operations, but also the funding requirements for
the Series C Preferred Stock and the publicly-traded unsecured senior notes (see
below). The maximum amount of intercompany dividends that Pac-Van and Lone Star
are allowed to pay in each fiscal year to GFN for the funding requirements of
GFN's senior and other debt and the Series C Preferred Stock are (a) the lesser
of $5,000,000 for the Series C Preferred Stock or the amount equal to the
dividend rate of the Series C Preferred Stock and its aggregate liquidation
preference and the actual amount of dividends required to be paid to the
Series C Preferred Stock; and (b) $8,000,000 for the public offering of
unsecured senior notes or the actual amount of annual interest required to be
paid; provided that (i) the payment of such dividends does not cause a default
or event of default; (ii) each of Pac-Van and Lone Star is solvent; (iii) excess
availability, as defined, is $5,000,000 or more under the Wells Fargo Credit
Facility; (iv) the fixed charge coverage ratio, as defined, will be greater than
1.25 to 1.00; and (v) the dividends are paid no earlier than ten business days
prior to the date they are due.

Senior Notes

On June 18, 2014, we completed the sale of unsecured senior notes (the "2021
Senior Notes") in a public offering for an aggregate principal amount of
$72,000,000. On April 24, 2017, we completed the sale of a "tack-on" offering of
our publicly-traded Senior Notes for an aggregate principal amount of $5,390,000
that was priced at $24.95 per denomination. The 2021 Senior Notes bore interest
at the rate of 8.125% per annum and were scheduled to mature on July 31, 2021.
Prior to December 31, 2020, an aggregate principal amount of $65,800,000 of the
2021 Senior Notes were redeemed (see below) and the remaining principal balance
of $11,590,000, plus accrued interest through the redemption date of January 15,
2021, was effectively defeased by the transfer of funds to Wells Fargo, the
trustee. On January 15, 2021, we redeemed the remaining $11,590,000 of the
issued and outstanding principal amount of the 2021 Senior Notes.

On October 27, 2020, we completed the sale of unsecured senior notes (the "2025
Senior Notes") in a public offering for $60,000,000, which represented 100% of
the aggregate principal amount. On November 16, 2020, the underwriters exercised
their full over-allotment option of $9,000,000, which also represented 100% of
the aggregate principal amount. Total net proceeds were $65,853,000, after
deducting underwriting discounts and offering costs of approximately $3,147,000.
We used $65,800,000 of the net proceeds to redeem the majority of the 2021
Senior Notes (see above). The 2025 Senior Notes bear interest at the rate of
7.875% per annum, mature on October 31, 2025 and are not subject to any sinking
fund. Interest on the 2025 Senior Notes is payable quarterly in arrears on
January 31, April 30, July 31 and October 31, commencing on January 31, 2021.
The 2025 Senior Notes rank equally in right of payment with all of our existing
and future unsecured senior debt and senior in right of payment to all of our
existing and future subordinated debt. The 2025 Senior Notes are effectively
subordinated to any of our existing and future secured debt, to the extent of
the value of the assets securing such debt. The 2025 Senior Notes are
structurally subordinated to all existing and future liabilities of the
Company's subsidiaries and are not guaranteed by any of our subsidiaries.



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As of March 31, 2021, our required principal and other obligations payments for
the twelve months ending March 31, 2022 and the subsequent three twelve-month
periods are as follows (in thousands):




                                      Twelve Months Ending March 31,
                                  2022       2023        2024        2025

Deutsche Bank Credit Facility $ 4,538 $ 4,538 $ 110,764 $ - Wells Fargo Credit Facility

            -          -            -          -
2025 Senior Notes                      -          -            -          -
Other                              2,461      2,781        2,261      1,563
                                 $ 6,999    $ 7,319    $ 113,025    $ 1,563

Reference is made above for a discussion on the COVID-19 pandemic and Notes 3
and 5 of Notes to Condensed Consolidated Financial Statements for further
discussion of our equity transactions and senior and other debt, respectively,
and Note 12 for a discussion of subsequent events.

We currently do not pay a dividend on our common stock and do not intend on doing so in the foreseeable future.

Capital Deployment and Cash Management

Our business is capital intensive, and we acquire leasing assets before they
generate revenues, cash flow and earnings. These leasing assets have long useful
lives and require relatively minimal maintenance expenditures. Most of the
capital we deploy into our leasing business historically has been used to expand
our operations geographically, to increase the number of units available for
lease at our branch and CSC locations and to add to the breadth of our product
mix. Our operations have generally generated annual cash flow which would
include, even in profitable periods, the deferral of income taxes caused by
accelerated depreciation that is used for tax accounting.

As we discussed above, our principal source of capital for operations consists
of funds available from the senior secured credit facilities at our operating
units. We also finance a smaller portion of capital requirements through finance
leases and lease-purchase contracts. We intend to continue utilizing our
operating cash flow and net borrowing capacity primarily to expanding our
container sale inventory and lease fleet through both capital expenditures and
accretive acquisitions; as well as paying dividends on the Series C Preferred
Stock and 8.00% Series B Cumulative Preferred Stock ("Series B Preferred
Stock"), if and when declared by our Board of Directors. While we have always
owned a majority interest in Royal Wolf and its results and accounts are
included in our consolidated financial statements, access to its operating cash
flows, cash on hand and other financial assets and the borrowing capacity under
its senior credit facility are limited to us in North America contractually by
its senior lenders.

Supplemental information pertaining to our consolidated sources and uses of cash is presented in the table below (in thousands):

                                                Nine Months Ended March 31,
                                                  2020                2021

Net cash provided by operating activities $ 53,120 $ 33,463

Net cash used in investing activities $ (30,076) $ (12,081)

Net cash used in financing activities $ (20,580) $ (29,627)

Cash Flow for FY 2021 Compared to FY 2020

Operating activities. Our operations provided cash of $33.5 million during FY
2021 versus $53.1 million during FY 2020, a decrease of $19.6 million between
the periods. Net income in FY 2021 of $24.5 million was $16.7 million
significantly more than the net income in FY 2020 of $7.8 million, but the
changes in operating assets and liabilities during FY 2021, when compared to FY
2020, reduced cash by $15.8 million. Historically we have experienced
significant variations in operating assets and liabilities between periods when
conducting our business in due course. In addition, cash from operating
activities between the periods were further

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reduced by $11.9 million between the periods as a result of the non-cash
adjustment relating to the change in the valuation of the stand-alone bifurcated
derivatives in the Convertible Notes (see Note 5 of Notes to Condensed
Consolidated Financial Statements), which decreased cash by $5.5 million in FY
2021 versus increasing cash by $6.4 million in FY 2020. During FY 2021 and FY
2020, the net gain on the sales of lease fleet reduced operating cash flows by
$10.6 million and $7.0 million, respectively, a decrease of $3.6 million between
the periods; and net unrealized gains and losses from foreign exchange and
foreign exchange contracts (see Note 6 of Notes to Condensed Consolidated
Financial Statements), which affect operating results but are non-cash addbacks
for cash flow purposes, also decreased operating cash flow by $2.8 million
between the periods, from a net cash increase of $2.3 million in FY 2020 to a
net cash decrease of $0.5 million in FY 2021. Further, deferred income taxes
decreased cash flows in FY 2021 by $5.1 million as compared to $8.2 million in
FY 2020, a decrease of approximately $3.1 million between the periods; and
non-cash share-based compensation increased operating cash flows by $1.5 million
in FY 2021 versus $2.0 million in FY 2020, a decrease of $0.5 million between
the periods. However, depreciation and amortization and the amortization of
deferred financing costs increased cash between the periods by $1.2 million,
from an aggregate $28.3 million increase in FY 2020 to an aggregate $29.5
million increase in FY 2021.



Investing Activities. Cash used in investing activities was $12.1 million during
FY 2021, as compared to $30.1 million used during FY 2020, resulting in a net
decrease in cash used between the periods of $18.0 million. In both FY 2021 and
FY 2020, we made one acquisition in North America for $1.9 million (see Note 4
of Notes to Condensed Consolidated Financial Statements) and $2.2 million,
respectively. Purchases of property, plant and equipment, or rolling stock
(maintenance capital expenditures), were $6.5 million in FY 2021 as compared to
$7.0 million in FY 2020, a decrease of $0.5 million in primarily our North
American leasing operations. In both periods, proceeds from sales of property,
plant and equipment were approximately $0.4 million. Net capital expenditures of
lease fleet (purchases, net of proceeds from sales of lease fleet) were $4.0
million in FY 2021, as compared to $21.1 million in FY 2020, a decrease of $17.1
million in net fleet investment. In FY 2021, net capital expenditures of lease
fleet were approximately $6.1 million in North America, as compared to $20.7
million in FY 2020, a decrease of $14.6 million; and net capital expenditures of
lease fleet in the Asia Pacific totaled a negative $2.1 million in FY 2021,
versus $0.4 million in FY 2020, a decrease of $2.5 million in net fleet
investment. The amount of cash that we use during any period in investing
activities is almost entirely within management's discretion and we have no
significant long-term contracts or other arrangements pursuant to which we may
be required to purchase at a certain price or a minimum amount of goods or
services.



Financing Activities. Cash used in financing activities was $29.6 million during
FY 2021, as compared to $20.6 million of cash used during FY 2020, an increase
in the cash used between the periods of $9.0 million. In FY 2021, cash provided
from financing activities included gross proceeds of $69.0 million from the
successful public offering of our 7.875% Senior Notes due in October 2025, which
net proceeds of $65.8 million were used to redeem the majority of our 8.125%
Senior Notes with an aggregate principal balance of $77.4 million (see Note 5 of
Notes to Condensed Consolidated Financial Statements). In FY 2021, we repaid a
net $14.7 million on our equipment financing, senior and other debt versus
repaying a net $17.8 million in FY 2020. Included in the net repayment in FY
2021 was $11.6 million that was borrowed on the Wells Fargo Credit Facility to
redeem the remaining principal balance of the 8.125% Senior Notes. We incurred
deferred financing costs aggregating $3.9 million in FY 2021 pertaining to the
public offering of the 7.875% Senior Notes and for the amendment of the Wells
Fargo Credit Facility. Cash of $2.8 million was used during both periods to pay
dividends on primarily our Series C Preferred Stock and we received proceeds of
$193,000 and $100,000 in FY 2021 and FY 2020, respectively, from issuances of
common stock on exercises of stock options. Other than the redemption of the
8.125% Senior Notes, our financing activities were primarily to fund our
investment in the container lease fleet, make business acquisitions, pay
dividends on our preferred stock and manage our operating assets and
liabilities.



Asset Management

Receivables and inventories were $40.5 million and $33.9 million at March 31,
2021 and $44.1 million and $20.9 million at June 30, 2020, respectively. At
March 31, 2021, DSO in trade receivables were 32 days and 36 days in the
Asia-Pacific area and our North American leasing operations, as compared to 43
days and 40 days at June 30, 2020, respectively. Effective asset management is
always a significant focus as we strive to apply appropriate credit and
collection controls and maintain proper inventory levels to enhance cash flow
and profitability. As further discussed above in "COVID-19," if our customers
experience adverse business consequences due to the COVID-19 pandemic, including
being required to shut down their operations, demand for our services and
products could also be materially adversely affected in a rapid manner,
including the increase of DSO in trade receivables.

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The net book value of our total lease fleet was $467.1 million at March 31,
2021, as compared to $458.7 million at June 30, 2020. At March 31, 2021, we had
100,439 units (23,857 units in retail operations in Australia, 8,908 units in
national account group operations in Australia, 11,885 units in New Zealand,
which are considered retail; and 55,789 units in North America) in our lease
fleet, as compared to 100,645 units (24,147 units in retail operations in
Australia, 8,946 units in national account group operations in Australia, 12,370
units in New Zealand, which are considered retail; and 55,182 units in North
America) at June 30, 2020. At those dates, 80,019 units (20,299 units in retail
operations in Australia, 7,298 units in national account group operations in
Australia, 10,243 units in New Zealand, which are considered retail; and 42,179
units in North America); and 72,983 units (19,505 units in retail operations in
Australia, 5,255 units in national account group operations in Australia, 10,149
units in New Zealand, which are considered retail; and 38,074 units in North
America) were on lease, respectively.

In the Asia-Pacific area, the lease fleet was comprised of 37,804 storage and
freight containers and 6,846 portable building containers at March 31, 2021; and
38,317 storage and freight containers and 7,146 portable building containers at
June 30, 2020. At those dates, units on lease were comprised of 33,357 storage
and freight containers and 4,483 portable building containers; and 29,839
storage and freight containers and 5,070 portable building containers,
respectively.

In North America, the lease fleet was comprised of 39,483 storage containers,
6,813 office containers (GLOs), 4,171 portable liquid storage tank containers,
4,156 mobile offices and 1,166 modular units at March 31, 2021; and 39,169
storage containers, 6,355 office containers (GLOs), 4,194 portable liquid
storage tank containers, 4,291 mobile offices and 1,173 modular units at June
30, 2020. At those dates, units on lease were comprised of 30,388 storage
containers, 5,746 office containers (GLOs), 1,632 portable liquid storage tank
containers, 3,456 mobile offices and 957 modular units; and 27,472 storage
containers, 5,184 office containers (GLOs), 1,000 portable liquid storage tank
containers, 3,474 mobile offices and 944 modular units, respectively.

Contractual Obligations and Commitments

Our material contractual obligations and commitments consist of outstanding
borrowings under our credit facilities discussed above and operating leases for
facilities and office equipment. We believe that our contractual obligations
have not changed significantly from those included in the Annual Report.

Off-Balance Sheet Arrangements

We do not maintain any off-balance sheet transactions, arrangements, obligations
or other relationships with unconsolidated entities or others that are
reasonably likely to have a material current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources.

Seasonality

Although demand from certain customer segments can be seasonal, our operations
as a whole are not seasonal to any significant extent. We experience a reduction
in sales volumes at Royal Wolf during Australia's summer holiday break from
mid-December to the end of January, followed by February being a short working
day month. However, this reduction in sales typically is counterbalanced by
increased levels of lease revenues derived from the removals, or moving and
storage industry, which experiences its seasonal peak of personnel relocations
during this same summer holiday break. Demand from some of Pac-Van's customers
can be seasonal, such as in the construction industry, which tends to increase
leasing activity in the first and fourth quarters of our fiscal year; while
customers in the retail industry tend to lease more units in the second quarter.
Our business at Lone Star and Southern Frac, which has been significantly
derived from the oil and gas industry, may decline in our second quarter months
of November and December and our third quarter months of January and February,
particularly if inclement weather delays, or suspends, customer projects.

Environmental and Safety

Our operations, and the operations of many of our customers, are subject to
numerous federal and local laws and regulations governing environmental
protection and transportation. These laws regulate such issues as wastewater,
storm water and the management, storage and disposal of, or exposure to,
hazardous substances. We are not aware of any pending environmental compliance
or remediation matters that are reasonably likely to have a material adverse
effect on our business, financial position or

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results of operations. However, the failure by us to comply with applicable environmental and other requirements could result in fines, penalties, enforcement actions, third party claims, remediation actions, and could negatively impact our reputation with customers. We have a company-wide focus on safety and have implemented a number of measures to promote workplace safety.

Impact of Inflation

We believe that inflation has not had a material effect on our business.
However, during periods of rising prices and, in particular when the prices
increase rapidly or to levels significantly higher than normal, we may incur
significant increases in our operating costs and may not be able to pass price
increases through to our customers in a timely manner, which could harm our
future results of operations.

Critical Accounting Estimates

Our discussion and analysis of our financial condition and results of operations
are based upon our consolidated financial statements, which have been prepared
in accordance with U.S. GAAP. The preparation of these financial statements
requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses. On an ongoing basis, we re-evaluate
all of our estimates. We base our estimates on historical experience and on
various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may materially differ from these estimates under
different assumptions or conditions as additional information becomes available
in future periods. We believe the estimates and assumptions underlying our
consolidated financial statements are reasonable and supportable based on the
information available at the time the financial statements were prepared.
However, uncertainty over the impact COVID-19 will have on the global economy
and our business in particular makes many of the estimates and assumptions
reflected in these consolidated financial statements inherently less certain.
Therefore, actual results may ultimately differ from those estimates to a
greater degree than historically.

A comprehensive discussion of our critical and significant accounting policies
and management estimates are included in Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations and in Note 2 of
Notes to Consolidated Financial Statements in the Annual Report. Reference is
also made to Note 2 of Notes to Condensed Consolidated Financial Statements in
this Quarterly Report on Form 10-Q for a further discussion of our significant
accounting policies. We believe there have been no significant changes in our
critical accounting policies, estimates and judgments since June 30, 2020.

Impact of Recently Issued Accounting Pronouncements

Reference is made to Note 2 of Notes to Condensed Consolidated Financial
Statements for a discussion of the adoption of this accounting standard, as well
as any recently issued accounting pronouncements that could potentially impact
us.

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