(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of ~~October 21, 2016,~~July 20, 2017, there were ~~35,557,785~~35,570,706 shares of H&E Equipment Services, Inc. common stock, $0.01 par value, outstanding.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words “may”, “could”, “would”, “should”, “believe”, “expect”, “anticipate”, “plan”, “estimate”, “target”, “project”, “intend”, “foresee” and similar expressions. These statements include, among others, statements regarding our expected business outlook, anticipated financial and operating results, our business strategy and means to implement the strategy, our objectives, the amount and timing of capital expenditures, the likelihood of our success in expanding our business, financing plans, budgets, working capital needs and sources of liquidity. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future.

Forward-looking statements are only predictions and are not guarantees of performance. These statements are based on our management’s beliefs and assumptions, which in turn are based on currently available information. Important assumptions relating to the forward-looking statements include, among others, assumptions regarding demand for our products, the expansion of product offerings geographically or through new marketing applications, the timing and cost of planned capital expenditures, competitive conditions and general economic conditions. These assumptions could prove inaccurate. Forward-looking statements also involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. In addition, even if our actual results are consistent with the forward-looking statements contained in this Quarterly Report on Form 10-Q, those results may not be indicative of results or developments in subsequent periods. Many of these factors are beyond our ability to control or predict. Such factors include, but are not limited to, the following:

Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the Securities and Exchange Commission (“SEC”), we are under no obligation to publicly update or revise any forward-looking statements after we file this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise. Investors, potential investors and other readers are urged to consider the above mentioned factors carefully in evaluating the

forward‑looking statements and are cautioned not to place undue reliance on such forward‑looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results or performance.

For a more detailed discussion of some of the foregoing risks and uncertainties, see Item 1A — “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2015,~~2016, as well as other reports and registration statements filed by us with the SEC. These factors should not be construed as exhaustive and should be read with other cautionary statements in this Quarterly Report on Form 10-Q and our other public filings. All of our annual, quarterly and current reports, and any amendments thereto, filed with or furnished to the SEC are available on our Internet website under the Investor Relations link. For more information about us and the announcements we make from time to time, visit our Internet website at ~~www.he-equipment.com.~~www.he-equipment.com.

This Quarterly Report on Form 10-Q shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act or an applicable exemption therefrom.

Balances at

September 30,
2016

December 31,
2015

(Unaudited)

ASSETS

Cash

$
7,034

$
7,159

Receivables, net of allowance for doubtful accounts of $4,027
   and $4,729, respectively

138,833

147,328

Inventories, net of reserves for obsolescence of $902 and $934, respectively

73,998

96,818

Prepaid expenses and other assets

8,894

10,054

Rental equipment, net of accumulated depreciation of
    $424,551 and $390,317, respectively

922,486

893,393

Property and equipment, net of accumulated depreciation and
   amortization of $116,658 and $107,170, respectively

107,216

110,785

Deferred financing costs, net of accumulated amortization
   of $11,957 and $11,347, respectively

2,167

2,777

Goodwill

31,197

31,197

Total assets

$
1,291,825

$
1,299,511

LIABILITIES AND STOCKHOLDERS’ EQUITY

Liabilities:

Amounts due on senior secured credit facility

$
209,762

$
184,857

Accounts payable

48,227

66,777

Manufacturer flooring plans payable

38,226

62,433

Accrued expenses payable and other liabilities

51,502

55,551

Dividends payable

56

32

Senior unsecured notes, net of unaccreted discount of $2,391 and $2,694, respectively

627,609

627,306

Capital leases payable

1,756

1,907

Deferred income taxes

173,449

155,886

Deferred compensation payable

1,826

2,174

Total liabilities

1,152,413

1,156,923

Commitments and Contingencies

Stockholders’ equity:

Preferred stock, $0.01 par value, 25,000,000 shares authorized; no shares issued

—

—

Common stock, $0.01 par value, 175,000,000 shares authorized; 39,500,053 and
   39,333,571 shares issued at September 30, 2016 and December 31, 2015, respectively, and 35,558,750 and 35,428,868 shares outstanding at September 30, 2016 and December 31, 2015, respectively

394

392

Additional paid-in capital

222,817

220,879

Treasury stock at cost, 3,941,303 and 3,904,703 shares of common stock
   held at September 30, 2016 and December 31, 2015, respectively

(60,951
)

(60,405
)
Retained deficit

(22,848
)

(18,278
)
Total stockholders’ equity

139,412

142,588

Total liabilities and stockholders’ equity

$
1,291,825

$
1,299,511

~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~

Three Months Ended
September 30,

Nine Months Ended
September 30,

2016

2015

2016

2015

Revenues:

Equipment rentals

$
118,535

$
118,055

$
330,023

$
328,072

New equipment sales

44,764

66,552

151,836

175,465

Used equipment sales

20,630

29,111

71,973

83,113

Parts sales

27,335

28,968

81,958

84,400

Services revenues

16,076

16,727

49,322

47,452

Other

17,346

17,440

48,679

48,121

Total revenues

244,686

276,853

733,791

766,623

Cost of revenues:

Rental depreciation

41,528

40,963

120,700

121,121

Rental expense

18,378

19,210

53,162

52,522

New equipment sales

40,147

60,000

135,152

156,068

Used equipment sales

14,364

20,262

49,751

56,761

Parts sales

19,708

21,098

59,184

61,224

Services revenues

5,445

5,582

16,736

16,017

Other

16,991

16,901

48,129

47,329

Total cost of revenues

156,561

184,016

482,814

511,042

Gross profit

88,125

92,837

250,977

255,581

Selling, general and administrative expenses

55,962

54,704

172,385

162,584

Gain on sales of property and equipment, net

927

339

2,301

1,769

Income from operations

33,090

38,472

80,893

94,766

Other income (expense):

Interest expense

(13,469
)

(13,481
)

(40,229
)

(40,675
)
Other, net

386

501

1,505

1,083

Total other expense, net

(13,083
)

(12,980
)

(38,724
)

(39,592
)
Income before provision for income taxes

20,007

25,492

42,169

55,174

Provision for income taxes

8,342

10,720

17,427

22,836

Net income

$
11,665

$
14,772

$
24,742

$
32,338

Net income per common share:

Basic

$
0.33

$
0.42

$
0.70

$
0.92

Diluted

$
0.33

$
0.42

$
0.70

$
0.92

Weighted average common shares outstanding:

Basic

35,424

35,308

35,373

35,258

Diluted

35,504

35,350

35,461

35,317

Dividends declared per common share outstanding

$
0.275

$
0.275

$
0.825

$
0.775

	Balances at
	June 30, 2017			December 31, 2016
	(Unaudited)
ASSETS
Cash	$	6,995		$	7,683
Receivables, net of allowance for doubtful accounts of $3,432 and $3,769, respectively		141,475			140,037
Inventories, net of reserves for obsolescence of $866 and $900, respectively		94,402			53,909
Prepaid expenses and other assets		9,424			7,513
Rental equipment, net of accumulated depreciation of $465,893 and $437,522, respectively		902,378			893,816
Property and equipment, net of accumulated depreciation and amortization of $123,980 and $118,812, respectively		104,632			105,492
Deferred financing costs, net of accumulated amortization of $12,566 and $12,160, respectively		1,558			1,964
Goodwill		31,197			31,197
Total assets	$	1,292,061		$	1,241,611
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Amounts due on senior secured credit facility	$	164,852		$	162,642
Accounts payable		81,053			39,432
Manufacturer flooring plans payable		25,824			30,780
Accrued expenses payable and other liabilities		60,720			56,833
Dividends payable		89			67
Senior unsecured notes, net of unaccreted discount of $867 and $952 and deferred financing costs of $1,219 and $1,339, respectively		627,914			627,711
Capital leases payable		1,597			1,704
Deferred income taxes		186,922			177,835
Deferred compensation payable		1,869			1,842
Total liabilities		1,150,840			1,098,846
Commitments and Contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value, 25,000,000 shares authorized; no shares issued		—			—
Common stock, $0.01 par value, 175,000,000 shares authorized; 39,512,974 and 39,496,759 shares issued at June 30, 2017 and December 31, 2016, respectively, and 35,570,706 and 35,554,491 shares outstanding at June 30, 2017 and December 31, 2016, respectively		394			394
Additional paid-in capital		225,438			223,544
Treasury stock at cost, 3,942,268 shares of common stock held at June 30, 2017 and December 31, 2016		(60,966	)		(60,966	)
Retained deficit		(23,645	)		(20,207	)
Total stockholders’ equity		141,221			142,765
Total liabilities and stockholders’ equity	$	1,292,061		$	1,241,611

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Revenues:
Equipment rentals	$	118,370		$	108,650		$	225,687		$	211,488
New equipment sales		45,669			49,893			79,943			107,072
Used equipment sales		24,106			23,769			52,969			51,343
Parts sales		27,969			26,654			53,300			54,623
Services revenues		15,944			16,945			31,024			33,246
Other		17,305			16,184			33,268			31,333
Total revenues		249,363			242,095			476,191			489,105
Cost of revenues:
Rental depreciation		41,838			39,675			82,741			79,172
Rental expense		20,162			18,021			38,536			34,784
New equipment sales		40,450			44,531			70,831			95,005
Used equipment sales		17,002			16,875			36,863			35,387
Parts sales		20,358			19,213			38,571			39,476
Services revenues		5,332			5,990			10,331			11,291
Other		16,881			16,082			33,306			31,138
Total cost of revenues		162,023			160,387			311,179			326,253
Gross profit		87,340			81,708			165,012			162,852
Selling, general and administrative expenses		59,807			57,049			117,125			116,423
Gain on sales of property and equipment, net		1,135			712			2,106			1,374
Income from operations		28,668			25,371			49,993			47,803
Other income (expense):
Interest expense		(13,373	)		(13,353	)		(26,605	)		(26,760	)
Other, net		373			689			810			1,119
Total other expense, net		(13,000	)		(12,664	)		(25,795	)		(25,641	)
Income before provision for income taxes		15,668			12,707			24,198			22,162
Provision for income taxes		5,790			5,204			8,930			9,085
Net income	$	9,878		$	7,503		$	15,268		$	13,077
Net income per common share:
Basic	$	0.28		$	0.21		$	0.43		$	0.37
Diluted	$	0.28		$	0.21		$	0.43		$	0.37
Weighted average common shares outstanding:
Basic		35,473			35,354			35,469			35,347
Diluted		35,631			35,480			35,626			35,439
Dividends declared per common share outstanding	$	0.275		$	0.275		$	0.55		$	0.55

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Nine Months Ended September 30,						Six Months Ended June 30,
	2016			2015			2017			2016
Cash flows from operating activities:
Net income	$	24,742		$	32,338		$	15,268		$	13,077
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment		20,321			17,895			12,115			13,464
Depreciation of rental equipment		120,700			121,121			82,741			79,172
Amortization of deferred financing costs		789			774			526			526
Accretion of note discount, net of premium amortization		124			126			84			83
Provision for losses on accounts receivable		2,723			2,446			1,858			2,008
Provision for inventory obsolescence		82			201			71			14
Change in deferred income taxes		17,193			22,514			9,968			9,182
Stock-based compensation expense		2,308			2,036			1,894			1,667
Gain from sales of property and equipment, net		(2,301	)		(1,769	)		(2,106	)		(1,374	)
Gain from sales of rental equipment, net		(21,450	)		(24,962	)		(15,349	)		(15,467	)
Changes in operating assets and liabilities:
Receivables		5,772			15,282			(3,274	)		7,110
Inventories		(15,220	)		(18,673	)		(49,585	)		(52,467	)
Prepaid expenses and other assets		1,160			(3,702	)		(1,911	)		489
Accounts payable		(18,549	)		599			41,621			22,322
Manufacturer flooring plans payable		(24,207	)		(33,696	)		(4,956	)		(16,466	)
Accrued expenses payable and other liabilities		(4,436	)		(11,484	)		3,715			4,600
Deferred compensation payable		(348	)		51			27			(363	)
Net cash provided by operating activities		109,403			121,097			92,707			67,577
Cash flows from investing activities:
Purchases of property and equipment		(16,753	)		(22,317	)		(12,137	)		(11,465	)
Purchases of rental equipment		(152,644	)		(137,184	)		(112,946	)		(69,144	)
Proceeds from sales of property and equipment		2,689			2,582			3,137			1,683
Proceeds from sales of rental equipment		62,259			68,187			46,013			44,501
Net cash used in investing activities		(104,449	)		(88,732	)		(75,933	)		(34,425	)
Cash flows from financing activities:
Purchases of treasury stock		(546	)		(470	)
Borrowings on senior secured credit facility		767,550			768,572			484,252			482,513
Payments on senior secured credit facility		(742,645	)		(778,903	)		(482,042	)		(492,866	)
Payments of deferred financing costs		—			(725	)
Dividends paid		(29,287	)		(27,370	)		(19,565	)		(19,505	)
Payments of capital lease obligations		(151	)		(143	)		(107	)		(100	)
Net cash used in financing activities		(5,079	)		(39,039	)		(17,462	)		(29,958	)
Net decrease in cash		(125	)		(6,674	)
Net increase (decrease) in cash								(688	)		3,194
Cash, beginning of period		7,159			15,861			7,683			7,159
Cash, end of period	$	7,034		$	9,187		$	6,995		$	10,353

	Nine Months Ended					Six Months Ended
	September 30,					June 30,
	2016			2015		2017			2016
Supplemental schedule of noncash investing and financing activities:
Noncash asset purchases:
Assets transferred from new and used inventory to rental fleet	$	37,958		$	49,482	$	9,021		$	34,461
Purchases of property and equipment included in accrued expenses payable and other liabilities	$	(387	)	$	—	$	(173	)	$	222
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	50,180		$	50,787	$	25,992		$	26,215
Income taxes paid, net of refunds received	$	271		$	368	$	446		$	269

The accompanying notes are an integral part of these condensed consolidated financial statements.

Our condensed consolidated financial statements include the financial position and results of operations of H&E Equipment Services, Inc. and its wholly-owned subsidiaries H&E Finance Corp., GNE Investments, Inc., Great Northern Equipment, Inc., H&E California Holding, Inc., H&E Equipment Services (California), LLC and H&E Equipment Services (Mid-Atlantic), Inc., collectively referred to herein as “we” or “us” or “our” or the “Company.”

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such regulations. In the opinion of management, all adjustments (consisting of all normal and recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and ~~nine~~six month periods ended ~~September~~June 30, ~~2016~~2017 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2016,~~2017, and therefore, the results and trends in these interim condensed consolidated financial statements may not be the same for the entire year. These interim condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and related notes in our Annual Report on Form 10-K for the year ended December 31, ~~2015,~~2016, from which the consolidated balance sheet amounts as of December 31, ~~2015~~2016 were derived.

All significant intercompany accounts and transactions have been eliminated in these condensed consolidated financial statements. ~~Business combinations accounted for as purchases are included in the condensed consolidated financial statements from their respective dates of acquisition.~~

The nature of our business is such that short-term obligations are typically met by cash flows generated from long-term assets. Consequently, and consistent with industry practice, the accompanying condensed consolidated balance sheets are presented on an unclassified basis.

As one of the largest integrated equipment services companies in the United States focused on heavy construction and industrial equipment, we rent, sell and provide parts and service support for four core categories of specialized equipment: (1) hi-lift or aerial work platform equipment; (2) cranes; (3) earthmoving equipment; and (4) industrial lift trucks. By providing equipment rental, sales, on-site parts, repair and maintenance functions under one roof, we are a one-stop provider for our customers’ varied equipment needs. This full service approach provides us with multiple points of customer contact, enables us to maintain a high quality rental fleet, as well as an effective distribution channel for fleet disposal and provides cross‑selling opportunities among our new and used equipment sales, rental, parts sales and services operations.

We describe our significant accounting policies in note 2 of the notes to consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, ~~2015.~~2016. During the ~~nine~~six month period ended ~~September~~June 30, ~~2016,~~2017, there were no significant changes to those accounting policies.

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, which requires management to use its judgment to make estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosures at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported period. These assumptions and estimates could have a material effect on our condensed consolidated financial statements. Actual results may differ materially from those estimates. We review our estimates on an ongoing basis based on information currently available, and changes in facts and circumstances may cause us to revise these estimates.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In doing so, entities will need to use more judgment and make more estimates than under current guidance. These judgments and estimates may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 also requires an entity to disclose sufficient qualitative and quantitative information surrounding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. This ASU supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification, and further permits the use of either a retrospective or cumulative effect transition method. The FASB agreed to a one-year deferral of the original effective date of this guidance and, as a result, it will become effective for fiscal years and interim periods after December 15, 2017. ~~However, entities may adopt the new guidance as of the original effective date (for fiscal years and interim periods beginning after December 15, 2016).~~Early adoption is permitted. We ~~expect to~~will adopt ASU 2014-09 as of January 1, ~~2018 and expect~~2018.

Revenues from equipment rentals accounted for 47.4% of our total revenues for the six months ended June 30, 2017. We believe the accounting for equipment rental revenues is outside the scope of ASU 2014-09. Upon adoption of ASU 2014-09, revenues from equipment rentals will be accounted for pursuant to ~~use the modified retrospective application method. While evaluation~~current lease accounting guidance until our adoption of the ~~comprehensive~~new lease accounting standard ~~including several~~as further discussed in the subsequent ~~amendments~~paragraph below. Revenues from new and ~~clarifications~~used equipment sales, parts and services revenues and other revenues are subject to ASU 2014-09 upon adoption. We have reviewed the ~~original standard, is ongoing, we~~accounting for sales of new and used equipment, which accounted for 27.9% of our total revenues for the six months ended June 30, 2017, and do not expect ~~that~~ the adoption of this ~~standard will~~guidance to have a ~~material~~significant impact on ~~the Company’s~~our consolidated financial statements. Parts revenues, services revenues and other revenues comprised the remaining 24.7% of our total revenues for the six months ended June 30, 2017. The impact of ASU 2014-09 on these revenues is not currently estimable. Our review of this standard, including our evaluation of the available transition methods and the impact of the standard on our internal controls over financial reporting, is ongoing.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). The new standard is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet, with the exception of leases with a term of 12 months or less, which permits a lessee to make an accounting policy election by class of underlying asset not to recognize lease assets and liabilities. At inception, lessees must classify leases as either finance or operating based on five criteria. Balance sheet recognition of finance and operating leases is similar, but the pattern of expense recognition in the income statement, as well as the effect on the statement of cash flows, differs depending on the lease classification. Also, certain qualitative and quantitative disclosures are required to enable users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. The new standard requires the recognition and measurement of leases at the beginning of the earliest period presented using a modified retrospective approach, which includes a number of optional practical expedients that entities may elect to apply.

Our operating leases include the real estate where all but 11 of our 78 branch locations are located as of June 30, 2017. Additionally, the Company leases numerous types of non-rental equipment. We have begun accumulating the information related to these leases and expect that the quantification of the amount of the lease assets and lease liabilities that we will recognize on our consolidated balance sheet upon adoption of ASU 2016-02 will take significant time given the size of our lease portfolio. We are ~~currently~~also concurrently evaluating our internal processes and controls over financial reporting with respect to the impact that the new lease standard will have on our lease administration activities. As mentioned in the ASU 2014-09 discussion above, our equipment rental business involves rental agreements with customers whereby we are the lessor in the transaction and therefore, we believe that such transactions are subject to the lessor accounting guidance of ASU 2016-02. Our evaluation of ASU 2016-02 is ongoing and the impact that this new guidance will have on our consolidated financial ~~statements.~~

~~In March 2016, the FASB Issued ASU No. 2016-09,~~ ~~Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting~~ (“ASU 2016-09”). The updated guidance changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements,statements, as well as ~~classification in the statement of cash flows. ASU 2016-09~~our internal controls over financial reporting, is ~~effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods, with early application permitted. We are~~not currently ~~evaluating the effect the guidance will have on our consolidated financial statements.~~estimable.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). This ~~ASU~~standard modifies the impairment model to utilize an expected loss methodology, referred to as the current expected credit loss (“CECL”) model, in place of the currently used incurred loss methodology, which ~~will~~is intended to result in the more timely recognition of losses. Under the CECL model, entities will estimate credit losses over the entire contractual term of the instrument (considering estimated prepayments, but not expected extensions or modifications) from the date of initial recognition of the financial instrument. The scope of financial assets within the CECL methodology is broad and includes trade receivables from revenue transactions and certain off-balance sheet credit exposures (such as standby letters of credit). ASU 2016-13 will be effective for us as of January 1, 2020. We are currently reviewing the effect, if any, the adoption of ASU No. ~~2016-13.~~2016-13 will have on our consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which aims to eliminate diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. ASU 2016-15 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017. ~~The~~Based upon our review of ASU 2016-15, the Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”). ASU 2017-01 clarifies the definition of a business when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017, and interim periods within those annual periods. Based upon our review of ASU 2017-01, the Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

9In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which removes Step 2 of the goodwill impairment test. A goodwill impairment will now be determined by the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2019, with early adoption permitted. We are currently evaluating the effect, if any, the adoption of ASU 2017-04 will have on our consolidated financial statements.

In ~~April~~July 2015, the FASB issued ASU ~~No. 2015-03,~~2015-11, Inventory: Simplifying the ~~Presentation~~Measurement of ~~Debt Issuance Costs~~Inventory (“ASU ~~2015-03”~~2015-11”)~~, which requires debt issuance costs~~. ASU 2015-11 provides guidance on simplifying the measurement of inventory. The previous standard measured inventory at lower of cost or market; where market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. ASU 2015-11 updated this guidance to measure inventory at the lower of cost or net realizable value; where net realizable value is considered to be ~~presented~~the estimated selling price in the ~~balance sheet~~ordinary course of business, less reasonably predictable cost of completion, disposal and transportation. We adopted ASU 2015-11 on January 1, 2017 on a prospective basis. The adoption of ASU 2015-11 did not result in a material impact on our financial position, results of operations, or cash flows for the three and six month periods ended June 30, 2017.

In March 2016, the FASB Issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). The updated guidance changed how companies previously accounted for certain aspects of stock-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as ~~a direct deduction from the carrying value~~well as classification of ~~the associated debt liability, consistent with the presentation of a debt discount. The guidance~~such awards in the ~~new standard is limited to the presentation~~statement of ~~debt issuance costs and does not affect the recognition and measurement of debt issuance costs. In August 2015, the FASB issued~~cash flows. ASU ~~No. 2015-15,~~ Interest-Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements - Amendments to SEC Paragraphs Pursuant to Staff Announcements (“ASU 2015-15”). ASU 2015-15 amends Subtopic 835-30 to include that the SEC would not object to the deferral and presentation of debt issuance costs as an asset and subsequent amortization of debt issuance costs over the term of the line-of-credit arrangement, whether or not there are any outstanding borrowings on the line-of-credit arrangement. This guidance2016-09 became effective for us on January 1, 2017. ASU 2016-09 requires that excess tax benefits and deficiencies resulting from the vesting or exercise of stock-based compensation awards to be recognized in the ~~first quarter~~income statement on a prospective basis. Previously, these amounts were recognized in additional paid-in capital. Accordingly, excess tax benefits of ~~2016~~less than $0.1 million were recognized as a discrete item in our income tax expense in each of the three and six month periods ended March 31, 2017 and June 30, 2017, respectively. In addition, ASU 2016-09 requires excess tax benefits and deficiencies to be excluded from the assumed future proceeds in the calculation of diluted shares. This change did not have a material impact to the calculation of weighted average shares outstanding for the three and six month periods ended June 30, 2017.

ASU 2016-09 eliminates the prior guidance requirement that allowed under certain circumstances the realization of excess tax benefits prior to recognition of those excess tax benefits. Under prior guidance, companies could not recognize excess tax benefits when an option was ~~applied~~exercised or a share vested if the related tax deduction increased a net operating loss carryforward rather than reduced income taxes payable. ASU 2016-09 requires companies to apply this part of the guidance using a modified retrospective transition method and record a cumulative effect adjustment for previously unrecognized excess tax benefits. Accordingly, we recorded a cumulative effect adjustment to accumulated deficit as of January 1, 2017 of approximately $0.9 million for all excess tax benefits that had not been previously recognized because the related tax deduction had not reduced income taxes payable.

ASU 2016-09 also clarifies that an entity should classify excess tax benefits along with other income tax cash flows as an operating activity in the statement of cash flows. This change eliminates the prior practice of grossing up the statement of cash flows for the effect of windfalls, i.e. reporting windfalls as outflows in operating activities and as inflows in financing activities. Under ASU 2016-09, the effect of windfalls will generally be reflected in net income from continuing operations under the indirect method. We have adopted this portion of the guidance on a retrospective basis. ~~As a result~~ASU 2016-09 also clarifies that employee taxes paid when an employer withholds shares of ~~adopting this guidance, total assets and total liabilities~~stock for tax withholding purposes be reported as financing activities in the consolidated statements of ~~December 31, 2015 changed as shown below (amounts~~cash flows, which is how the Company has historically presented such activities in ~~thousands).~~our statement of cash flows.

We have elected to continue to estimate the number of stock-based awards expected to vest, as permitted by ASU 2016-09, rather than electing to account for forfeitures as they occur. Additional amendments to the accounting for statutory withholding tax requirements had no impact on our consolidated financial statements.

Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The FASB fair value measurement guidance established a fair value hierarchy that prioritizes the inputs used to measure fair value. The three broad levels of the fair value hierarchy are as follows:

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2 – Quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly

Level 3 – Unobservable inputs for which little or no market data exists, therefore requiring a company to develop its own assumptions

The carrying value of financial instruments reported in the accompanying condensed consolidated balance sheets for cash, accounts receivable, accounts payable and accrued expenses payable and other liabilities approximate fair value due to the immediate or short-term nature or maturity of these financial instruments. The fair value of our letter of credit is based on fees currently charged for similar agreements. The carrying amounts and fair values of our other financial instruments subject to fair value disclosures as of ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015~~2016 are presented in the table below (amounts in thousands) and have been calculated based upon market quotes and present value calculations based on market rates.

	September 30, 2016				June 30, 2017
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Manufacturer flooring plans payable with interest computed at 4.50% (Level 3)	$	38,226	$	33,497	$	25,824	$	22,149
Senior unsecured notes with interest computed at 7.0% (Level 1)		627,609		648,900		627,914		655,200
Capital leases payable with interest computed at 5.929% to 9.55% (Level 3)		1,756		1,172		1,597		1,160
Letter of credit (Level 3)		—		155		—		155

	December 31, 2015				December 31, 2016
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Manufacturer flooring plans payable with interest computed at 5.00% (Level 3)	$	62,433	$	54,710
Manufacturer flooring plans payable with interest computed at 4.50% (Level 3)					$	30,780	$	26,780
Senior unsecured notes with interest computed at 7.0% (Level 1)		627,306		617,400		627,711		663,075
Capital leases payable with interest computed at 5.929% to 9.55% (Level 3)		1,907		1,329		1,704		1,164
Letter of credit (Level 3)		—		145		—		155

During the three and ~~nine~~six month periods ended ~~September~~June 30, ~~2016~~2017 and ~~2015,~~2016, there were no transfers of financial assets or liabilities in or out of Level 1, Level 2 or Level 3 of the fair value hierarchy.

The following table summarizes the activity in Stockholders’ Equity for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 (amounts in thousands, except share data):

Common Stock

Additional

Total

Shares
Issued

Amount

Paid-in
Capital

Treasury
Stock

Retained Deficit

Stockholders’
Equity

Balances at December 31, 2015

39,333,571

$
392

$
220,879

$
(60,405
)

$
(18,278
)

$
142,588

Stock-based compensation

—

—

2,308

—

—

2,308

Tax deficiency associated with stock-based awards

—

—

(370
)

—

—

(370
)
Cash dividends declared on common
stock ($0.825 per share)

—

—

—

—

(29,312
)

(29,312
)
Issuance of common stock

166,482

2

—

—

—

2

Repurchases of 29,815 shares of restricted common stock

—

—

(546
)

—

(546
)
Net income

—

—

—

—

24,742

24,742

Balances at September 30, 2016

39,500,053

$
394

$
222,817

$
(60,951
)

$
(22,848
)

$
139,412

	Common Stock				Additional					Retained			Total
	Shares Issued		Amount		Paid-in Capital		Treasury Stock			Earnings (Deficit)			Stockholders’ Equity
Balances at December 31, 2016		39,496,759	$	394	$	223,544	$	(60,966	)	$	(20,207	)	$	142,765
Cumulative effect adjustment for previously unrecognized excess tax benefits pursuant to the adoption of ASU 2016-09 (see note (2))		—		—		—		—			881			881
Stock-based compensation		—		—		1,894		—			—			1,894
Cash dividends declared on common stock ($0.275 per share)		—		—		—		—			(19,587	)		(19,587	)
Issuance of common stock		16,215		—		—		—			—			—
Net income		—		—		—		—			15,268			15,268
Balances at June 30, 2017		39,512,974	$	394	$	225,438	$	(60,966	)	$	(23,645	)	$	141,221

We account for our stock-based compensation ~~plan~~plans using the fair value recognition provisions of Accounting Standards Codification (“ASC”) 718, Stock Compensation (“ASC 718”)., as further updated by ASU 2016-09. Under the provisions of ASC 718, stock-based compensation is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the requisite employee service period (generally the vesting period of the grant).

Over the last ten years prior to June 2016, we had been granting awards under our 2006 Stock-Based Incentive Compensation Plan, as amended (the “Prior Stock Plan”). The Prior Stock Plan expired pursuant to its terms in June 2016, and the Company is no longer be able to grant equity awards under the Prior Stock Plan. At our annual meeting of stockholders in May 2016, our stockholders approved our 2016 Stock-Based Incentive Compensation Plan (the “2016 Plan”). Shares available for future stock-based payment awards under our 2016 Stock-Based Incentive Compensation Plan were ~~1,973,495~~1,960,574 shares as of ~~September~~June 30, 2016. To the extent that awards granted under the Prior Stock Plan are forfeited or otherwise terminate for any reason whatsoever without an actual distribution or issuance of shares, the plan limit will be increased by such number of shares.2017.

The following table summarizes our non-vested stock activity for the ~~nine~~six months ended ~~September~~June 30, ~~2016. All awards granted prior to May 16, 2016 were made pursuant to the Prior Stock Plan, and all grants subsequent to May 16, 2016 have been made pursuant to the 2016 Plan.~~2017:

	Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value
Non-vested stock at December 31, 2015		322,355		$	19.90
Non-vested stock at December 31, 2016							400,801		$	18.86
Granted		227,532		$	17.39		21,658		$	25.86
Vested		(133,783	)	$	18.85		(21,658	)	$	25.86
Forfeited		(9,027	)	$	18.99		(5,443	)	$	18.95
Non-vested stock at September 30, 2016		407,077		$	18.87
Non-vested stock at June 30, 2017							395,358		$	18.86

As of ~~September~~June 30, ~~2016,~~2017, we had unrecognized compensation expense of approximately ~~$5.6~~$3.4 million related to non-vested stock that we expect to be recognized over a weighted-average period of approximately ~~2.4~~1.9 years. The following table summarizes compensation expense related to non-vested stock, which is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 and ~~2015~~2016 (amounts in thousands):

At ~~September~~June 30 ~~2016,~~2017, there is no unrecognized compensation expense as all previously issued and outstanding stock option awards have ~~fully vested.~~expired. The following table represents stock option activity for the ~~nine~~six months ended ~~September~~June 30, ~~2016:~~2017:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Contractual Life In Years		Number of Shares			Weighted Average Exercise Price		Weighted Average Contractual Life In Years
Outstanding options at December 31, 2015		51,000		$	17.80
Outstanding options at December 31, 2016									4,500		$	19.27
Granted		—			—				—			—
Exercised		—			—				—			—
Canceled, forfeited or expired		(45,000	)	$	17.60				(4,500	)	$	19.27
Outstanding options at September 30, 2016		6,000		$	19.27		0.8
Options exercisable at September 30, 2016		6,000		$	19.27		0.8
Outstanding options at June 30, 2017									—			—		—
Options exercisable at June 30, 2017									—			—		—

The closing price of our common stock at September 30, 2016 was $16.76. Options outstanding at September 30, 2016, all of which were granted pursuant to the Prior Stock Plan, have grant date fair values that exceed the September 30, 2016 closing stock price.

~~Earnings~~Income per common share for the three and ~~nine~~six months ended ~~September~~June 30, 2017 and 2016 are based on the weighted average number of common shares outstanding during the period. The effects of potentially dilutive securities that are anti-dilutive are not included in the computation of dilutive income per share. We include all common shares granted under our incentive compensation plan which remain unvested (“restricted common shares”) and contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid (“participating securities”), in the number of shares outstanding in our basic and diluted EPS calculations using the two-class method. All of our restricted common shares are currently participating securities.

Under the two-class method, earnings per common share are computed by dividing the sum of distributed earnings allocated to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, distributed and undistributed earnings are allocated to both common shares and restricted common shares based on the total weighted average shares outstanding during the period. The number of restricted common shares outstanding was approximately ~~0.9% and~~ 0.8% of total outstanding shares for each of the three and ~~nine~~

~~months~~six month periods ended ~~September~~June 30, ~~2016~~2017 and ~~2015,~~2016, respectively, and, consequently, was immaterial to the basic and diluted EPS calculations. Therefore, use of the two-class method had no impact on our basic and diluted EPS calculations for the periods presented. The following table sets forth the computation of basic and diluted net income per common share for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 and ~~2015~~2016 (amounts in thousands, except per share amounts):

	Three Months Ended				Nine Months Ended				Three Months Ended				Six Months Ended
	September 30,				September 30,				June 30,				June 30,
	2016		2015		2016		2015		2017		2016		2017		2016
Basic net income per share:
Net income	$	11,665	$	14,772	$	24,742	$	32,338	$	9,878	$	7,503	$	15,268	$	13,077
Weighted average number of common shares outstanding		35,424		35,308		35,373		35,258		35,473		35,354		35,469		35,347
Net income per share of common stock – basic	$	0.33	$	0.42	$	0.70	$	0.92	$	0.28	$	0.21	$	0.43	$	0.37
Diluted net income per share:
Net income	$	11,665	$	14,772	$	24,742	$	32,338	$	9,878	$	7,503	$	15,268	$	13,077
Weighted average number of common shares outstanding		35,424		35,308		35,373		35,258		35,473		35,354		35,469		35,347
Effect of dilutive securities:
Effect of dilutive stock options		—		—		—	13			—		—		—		—
Effect of dilutive non-vested restricted stock		80		42		88	46			158		126		157		92
Weighted average number of common shares outstanding – diluted		35,504		35,350		35,461		35,317		35,631		35,480		35,626		35,439
Net income per share of common stock – diluted	$	0.33	$	0.42	$	0.70	$	0.92	$	0.28	$	0.21	$	0.43	$	0.37
Common shares excluded from the denominator as anti-dilutive:
Stock options		—		51		5		17		—		1		—		7
Non-vested restricted stock		1		17		2		7		—		—		—		4

We and our subsidiaries are parties to a $602.5 million senior secured credit facility (the “Credit Facility”) with Wells Fargo Capital Finance, LLC (“Wells Fargo”), as agent (as successor in such capacity to General Electric Capital Corporation (“GE Capital”)), and the lenders named therein (the “Lenders”).

On May 21, 2014, we amended, extended and restated the Credit Facility by entering into the Fourth Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) by and among the Company, Great Northern Equipment, Inc., H&E Equipment Services (California), LLC, the other credit parties named therein, the lenders named therein, GE Capital, as administrative agent, Bank of America, N.A. as co-syndication agent and documentation agent, Wells Fargo, as co-syndication agent and Deutsche Bank Securities Inc. as joint lead arranger and joint bookrunner. In March 2016, Wells Fargo succeeded and was substituted for GE Capital as the administrative agent under the Amended and Restated Credit Agreement.

The Amended and Restated Credit Agreement, among other things, (i) extends the maturity date of the Credit Facility from February 29, 2017 to May 21, 2019, (ii) increases the uncommitted incremental revolving capacity from $130 million to $150 million, (iii) permits a like-kind exchange program under Section 1031 of the Internal Revenue Code of 1986, as amended, (iv) provides that the unused commitment fee margin will be either 0.50%, 0.375% or 0.25%, depending on the ratio of the average of the daily closing balances of the aggregate revolving loans, swing line loans and letters of credit outstanding during each month to the aggregate commitments for the revolving loans, swing line loans and letters of credit, (v) lowers the interest rate (a) in the case of index rate revolving loans, to the index rate plus an applicable margin of 0.75% to 1.25% depending on the leverage ratio and (b) in the case of LIBOR revolving loans, to LIBOR plus an applicable margin of 1.75% to 2.25%, depending on the leverage ratio, (vi) lowers the margin applicable to the letter of credit fee to between 1.75% and 2.25%, depending on the leverage ratio, and (vii) permits, under certain conditions, for the payment of dividends and/or stock repurchases or redemptions on the capital stock of the Company of up to $75 million per calendar year and further additionally permits the payment of the special cash dividend of $7.00 per share previously declared by the Company on August 20, 2012 to the holders of outstanding restricted stock of the Company following the declared payment date with such permission not tied to the vesting of such restricted stock (which includes the Company’s payment in June 2014 of all amounts that remained payable to the holders of the restricted stock of the Company with respect to such special dividend that was otherwise payable following the applicable vesting dates in May and July 2014 and 2015).

On February 5, 2015, we entered into an amendment of the Credit Facility which, among other things, increased the total amount of revolving loan commitments under the Amended and Restated Credit Agreement from $402.5 million to $602.5 million.

As of ~~September~~June 30, ~~2016,~~2017, we were in compliance with our financial covenants under the Credit Facility. At ~~September~~June 30, ~~2016,~~2017, the Company could borrow up to an additional ~~$385.0~~$429.9 million and remain in compliance with the debt covenants under the Company’s Credit Facility.

At ~~September~~June 30, ~~2016,~~2017, the interest rate on the Credit Facility was based on a ~~3.25%~~4.0% U.S. Prime Rate plus 100 basis points orand LIBOR plus 200 basis points. The weighted average interest rate at ~~September~~June 30, ~~2016~~2017 was approximately ~~2.7%~~3.5%. At ~~October 21, 2016,~~July 20, 2017, we had ~~$391.6~~$424.4 million of available borrowings under our Credit Facility, net of $7.7 million of outstanding letters of credit.

The following table reconciles our Senior Unsecured Notes to our Condensed Consolidated Balance Sheets (amounts in thousands):

We have identified five reportable segments: equipment rentals, new equipment sales, used equipment sales, parts sales and services revenues. These segments are based upon how management of the Company allocates resources and assesses performance. Non-segmented revenues and non-segmented costs relate to equipment support activities including transportation, hauling, parts freight and damage-waiver charges and are not allocated to the other reportable segments. There were no sales between segments for any of the periods presented. Selling, general and administrative expenses as well as all other income and expense items below gross profit are not generally allocated to reportable segments.

We do not compile discrete financial information by segments other than the information presented below. The following table presents information about our reportable segments (amounts in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015		2017		2016		2017			2016
Segment Revenues:
Equipment rentals	$	118,535	$	118,055	$	330,023	$	328,072	$	118,370	$	108,650	$	225,687		$	211,488
New equipment sales		44,764		66,552		151,836		175,465		45,669		49,893		79,943			107,072
Used equipment sales		20,630		29,111		71,973		83,113		24,106		23,769		52,969			51,343
Parts sales		27,335		28,968		81,958		84,400		27,969		26,654		53,300			54,623
Services revenues		16,076		16,727		49,322		47,452		15,944		16,945		31,024			33,246
Total segmented revenues		227,340		259,413		685,112		718,502		232,058		225,911		442,923			457,772
Non-segmented revenues		17,346		17,440		48,679		48,121		17,305		16,184		33,268			31,333
Total revenues	$	244,686	$	276,853	$	733,791	$	766,623	$	249,363	$	242,095	$	476,191		$	489,105
Segment Gross Profit:
Equipment rentals	$	58,629	$	57,882	$	156,161	$	154,429	$	56,370	$	50,954	$	104,410		$	97,532
New equipment sales		4,617		6,552		16,684		19,397		5,219		5,362		9,112			12,067
Used equipment sales		6,266		8,849		22,222		26,352		7,104		6,894		16,106			15,956
Parts sales		7,627		7,870		22,774		23,176		7,611		7,441		14,729			15,147
Services revenues		10,631		11,145		32,586		31,435		10,612		10,955		20,693			21,955
Total segmented gross profit		87,770		92,298		250,427		254,789		86,916		81,606		165,050			162,657
Non-segmented gross profit		355		539		550		792
Non-segmented gross profit (loss)										424		102		(38	)		195
Total gross profit	$	88,125	$	92,837	$	250,977	$	255,581	$	87,340	$	81,708	$	165,012		$	162,852

	Balances at				Balances at
	September 30,		December 31,		June 30,		December 31,
	2016		2015		2017		2016
Segment identified assets:
Equipment sales	$	55,853	$	77,365	$	77,231	$	37,912
Equipment rentals		922,486		893,393		902,378		893,816
Parts and services		18,145		19,453		17,171		15,997
Total segment identified assets		996,484		990,211		996,780		947,725
Non-segment identified assets		295,341		309,300		295,281		293,886
Total assets	$	1,291,825	$	1,299,511	$	1,292,061	$	1,241,611

The Company operates primarily in the United States and our sales to international customers for the three month ~~period~~periods ended ~~September~~June 30, 2017 and 2016 were 0.1% and ~~2015 were~~ 0.3% ~~and 0.5%~~, respectively, of total revenues. Our sales to international customers for the ~~nine~~six month periods ended ~~September~~June 30, ~~2016~~2017 and ~~2015~~2016 were 0.4% and ~~0.6%~~0.5%, respectively, of total revenues. No one customer accounted for more than 10% of our revenues on an overall or segment basis for any of the periods presented.

All of the indebtedness of H&E Equipment Services, Inc. is guaranteed by GNE Investments, Inc. and its wholly‑owned subsidiary Great Northern Equipment, Inc., H&E Equipment Services (California), LLC, H&E California Holding, Inc., H&E Equipment Services (Mid-Atlantic), Inc. and H&E Finance Corp. The guarantor subsidiaries are all wholly‑owned and the guarantees, made on a joint and several basis, are full and unconditional (subject to subordination provisions and subject to a standard limitation which provides that the maximum amount guaranteed by each guarantor will not exceed the maximum amount that can be guaranteed

without making the guarantee void under fraudulent conveyance laws). There are no restrictions on H&E Equipment Services, Inc.’s ability to obtain funds from the guarantor subsidiaries by dividend or loan.

The consolidating financial statements of H&E Equipment Services, Inc. and its subsidiaries are included below. The financial statements for H&E Finance Corp. are not included within the consolidating financial statements because H&E Finance Corp. has no assets or operations.

	As of September 30, 2016										As of June 30, 2017
	H&E Equipment Services		Guarantor Subsidiaries			Elimination			Consolidated		H&E Equipment Services		Guarantor Subsidiaries			Elimination			Consolidated
	(Amounts in thousands)										(Amounts in thousands)
Assets:
Cash	$	7,034	$	—		$	—		$	7,034	$	6,995	$	—		$	—		$	6,995
Receivables, net		112,891		25,942			—			138,833		113,323		28,152			—			141,475
Inventories, net		66,822		7,176			—			73,998		78,733		15,669			—			94,402
Prepaid expenses and other assets		8,721		173			—			8,894		9,203		221			—			9,424
Rental equipment, net		763,627		158,859			—			922,486		746,342		156,036			—			902,378
Property and equipment, net		95,580		11,636			—			107,216		93,476		11,156			—			104,632
Deferred financing costs, net		2,167		—			—			2,167		1,558		—			—			1,558
Investment in guarantor subsidiaries		228,976		—			(228,976	)		—		231,555		—			(231,555	)		—
Goodwill		1,671		29,526			—			31,197		1,671		29,526			—			31,197
Total assets	$	1,287,489	$	233,312		$	(228,976	)	$	1,291,825	$	1,282,856	$	240,760		$	(231,555	)	$	1,292,061
Liabilities and Stockholders’ Equity:
Amounts due on senior secured credit facility	$	209,762	$	—		$	—		$	209,762	$	164,852	$	—		$	—		$	164,852
Accounts payable		45,274		2,953			—			48,227		73,912		7,141			—			81,053
Manufacturer flooring plans payable		38,056		170			—			38,226		24,233		1,591			—			25,824
Accrued expenses payable and other liabilities		52,008		(506	)		—			51,502		61,801		(1,081	)		—			60,720
Dividends payable		93		(37	)		—			56		132		(43	)		—			89
Senior unsecured notes		627,609		—			—			627,609		627,914		—			—			627,914
Capital leases payable		—		1,756			—			1,756		—		1,597			—			1,597
Deferred income taxes		173,449		—			—			173,449		186,922		—			—			186,922
Deferred compensation payable		1,826		—			—			1,826		1,869		—			—			1,869
Total liabilities		1,148,077		4,336			—			1,152,413		1,141,635		9,205			—			1,150,840
Stockholders’ equity		139,412		228,976			(228,976	)		139,412		141,221		231,555			(231,555	)		141,221
Total liabilities and stockholders’ equity	$	1,287,489	$	233,312		$	(228,976	)	$	1,291,825	$	1,282,856	$	240,760		$	(231,555	)	$	1,292,061

	As of December 31, 2015										As of December 31, 2016
	H&E Equipment Services		Guarantor Subsidiaries			Elimination			Consolidated		H&E Equipment Services		Guarantor Subsidiaries			Elimination			Consolidated
	(Amounts in thousands)										(Amounts in thousands)
Assets:
Cash	$	7,159	$	—		$	—		$	7,159	$	7,683	$	—		$	—		$	7,683
Receivables, net		124,157		23,171			—			147,328		112,758		27,279			—			140,037
Inventories, net		88,831		7,987			—			96,818		49,509		4,400			—			53,909
Prepaid expenses and other assets		9,909		145			—			10,054		7,343		170			—			7,513
Rental equipment, net		750,773		142,620			—			893,393		743,759		150,057			—			893,816
Property and equipment, net		99,342		11,443			—			110,785		93,866		11,626			—			105,492
Deferred financing costs, net		2,777		—			—			2,777		1,964		—			—			1,964
Investment in guarantor subsidiaries		211,542		—			(211,542	)		—		220,209		—			(220,209	)		—
Goodwill		1,671		29,526			—			31,197		1,671		29,526			—			31,197
Total assets	$	1,296,161	$	214,892		$	(211,542	)	$	1,299,511	$	1,238,762	$	223,058		$	(220,209	)	$	1,241,611
Liabilities and Stockholders’ Equity:
Amount due on senior secured credit facility	$	184,857	$	—		$	—		$	184,857	$	162,642	$	—		$	—		$	162,642
Accounts payable		63,959		2,818			—			66,777		36,188		3,244			—			39,432
Manufacturer flooring plans payable		62,433		—			—			62,433		30,899		(119	)		—			30,780
Accrued expenses payable and other liabilities												58,774		(1,941	)		—			56,833
Dividends payable		62		(30	)		—			32		106		(39	)		—			67
Accrued expenses payable and other liabilities		56,896		(1,345	)		—			55,551
Senior unsecured notes		627,306		—			—			627,306		627,711		—			—			627,711
Capital leases payable		—		1,907			—			1,907		—		1,704			—			1,704
Deferred income taxes		155,886		—			—			155,886		177,835		—			—			177,835
Deferred compensation payable		2,174		—			—			2,174		1,842		—			—			1,842
Total liabilities		1,153,573		3,350			—			1,156,923		1,095,997		2,849			—			1,098,846
Stockholders’ equity		142,588		211,542			(211,542	)		142,588		142,765		220,209			(220,209	)		142,765
Total liabilities and stockholders’ equity	$	1,296,161	$	214,892		$	(211,542	)	$	1,299,511	$	1,238,762	$	223,058		$	(220,209	)	$	1,241,611

Three Months Ended September 30, 2016

H&E Equipment
Services

Guarantor
Subsidiaries

Elimination

Consolidated

(Amounts in thousands)

Revenues:

Equipment rentals

$
96,310

$
22,225

$
—

$
118,535

New equipment sales

37,110

7,654

—

44,764

Used equipment sales

16,778

3,852

—

20,630

Parts sales

23,807

3,528

—

27,335

Services revenues

13,693

2,383

—

16,076

Other

14,072

3,274

—

17,346

Total revenues

201,770

42,916

—

244,686

Cost of revenues:

Rental depreciation

34,168

7,360

—

41,528

Rental expense

15,127

3,251

—

18,378

New equipment sales

33,206

6,941

—

40,147

Used equipment sales

11,762

2,602

—

14,364

Parts sales

17,221

2,487

—

19,708

Services revenues

4,686

759

—

5,445

Other

13,716

3,275

—

16,991

Total cost of revenues

129,886

26,675

—

156,561

Gross profit (loss):

Equipment rentals

47,015

11,614

—

58,629

New equipment sales

3,904

713

—

4,617

Used equipment sales

5,016

1,250

—

6,266

Parts sales

6,586

1,041

—

7,627

Services revenues

9,007

1,624

—

10,631

Other

356

(1
)

—

355

Gross profit

71,884

16,241

—

88,125

Selling, general and administrative expenses

45,810

10,152

—

55,962

Equity in earnings of guarantor subsidiaries

3,892

—

(3,892
)

—

Gain on sales of property and equipment, net

782

145

—

927

Income from operations

30,748

6,234

(3,892
)

33,090

Other income (expense):

Interest expense

(11,074
)

(2,395
)

—

(13,469
)
Other, net

333

53

—

386

Total other expense, net

(10,741
)

(2,342
)

—

(13,083
)
Income before income taxes

20,007

3,892

(3,892
)

20,007

Income tax expense

8,342

—

—

8,342

Net income

$
11,665

$
3,892

$
(3,892
)

$
11,665

Three Months Ended September 30, 2015

H&E Equipment
Services

Guarantor
Subsidiaries

Elimination

Consolidated

(Amounts in thousands)

Revenues:

Equipment rentals

$
96,768

$
21,287

$
—

$
118,055

New equipment sales

57,311

9,241

—

66,552

Used equipment sales

22,124

6,987

—

29,111

Parts sales

25,429

3,539

—

28,968

Services revenues

14,206

2,521

—

16,727

Other

14,110

3,330

—

17,440

Total revenues

229,948

46,905

—

276,853

Cost of revenues:

Rental depreciation

34,194

6,769

—

40,963

Rental expense

15,705

3,505

—

19,210

New equipment sales

51,569

8,431

—

60,000

Used equipment sales

15,501

4,761

—

20,262

Parts sales

18,547

2,551

—

21,098

Services revenues

4,811

771

—

5,582

Other

13,657

3,244

—

16,901

Total cost of revenues

153,984

30,032

—

184,016

Gross profit:

Equipment rentals

46,869

11,013

—

57,882

New equipment sales

5,742

810

—

6,552

Used equipment sales

6,623

2,226

—

8,849

Parts sales

6,882

988

—

7,870

Services revenues

9,395

1,750

—

11,145

Other

453

86

—

539

Gross profit

75,964

16,873

—

92,837

Selling, general and administrative expenses

44,810

9,894

—

54,704

Equity in earnings of guarantor subsidiaries

3,663

—

(3,663
)

—

Gain on sales of property and equipment, net

232

107

—

339

Income from operations

35,049

7,086

(3,663
)

38,472

Other income (expense):

Interest expense

(10,023
)

(3,458
)

—

(13,481
)
Other, net

466

35

—

501

Total other expense, net

(9,557
)

(3,423
)

—

(12,980
)
Income before income taxes

25,492

3,663

(3,663
)

25,492

Income tax expense

10,720

—

—

10,720

Net income

$
14,772

$
3,663

$
(3,663
)

$
14,772

	Nine Months Ended September 30, 2016												Three Months Ended June 30, 2017
	H&E Equipment Services			Guarantor Subsidiaries			Elimination			Consolidated			H&E Equipment Services			Guarantor Subsidiaries			Elimination			Consolidated
	(Amounts in thousands)												(Amounts in thousands)
Revenues:
Equipment rentals	$	270,927		$	59,096		$	—		$	330,023		$	96,709		$	21,661		$	—		$	118,370
New equipment sales		124,450			27,386			—			151,836			38,819			6,850			—			45,669
Used equipment sales		59,515			12,458			—			71,973			19,333			4,773			—			24,106
Parts sales		71,323			10,635			—			81,958			23,970			3,999			—			27,969
Services revenues		42,140			7,182			—			49,322			13,395			2,549			—			15,944
Other		39,619			9,060			—			48,679			14,078			3,227			—			17,305
Total revenues		607,974			125,817			—			733,791			206,304			43,059			—			249,363
Cost of revenues:
Rental depreciation		100,111			20,589			—			120,700			34,542			7,296			—			41,838
Rental expense		44,135			9,027			—			53,162			16,740			3,422			—			20,162
New equipment sales		110,594			24,558			—			135,152			34,315			6,135			—			40,450
Used equipment sales		41,565			8,186			—			49,751			14,056			2,946			—			17,002
Parts sales		51,660			7,524			—			59,184			17,527			2,831			—			20,358
Services revenues		14,470			2,266			—			16,736			4,479			853			—			5,332
Other		39,069			9,060			—			48,129			13,752			3,129			—			16,881
Total cost of revenues		401,604			81,210			—			482,814			135,411			26,612			—			162,023
Gross profit:
Equipment rentals		126,681			29,480			—			156,161			45,427			10,943			—			56,370
New equipment sales		13,856			2,828			—			16,684			4,504			715			—			5,219
Used equipment sales		17,950			4,272			—			22,222			5,277			1,827			—			7,104
Parts sales		19,663			3,111			—			22,774			6,443			1,168			—			7,611
Services revenues		27,670			4,916			—			32,586			8,916			1,696			—			10,612
Other		550			—			—			550			326			98			—			424
Gross profit		206,370			44,607			—			250,977			70,893			16,447			—			87,340
Selling, general and administrative expenses		142,402			29,983			—			172,385			52,766			7,041			—			59,807
Equity in earnings of guarantor subsidiaries		8,388			—			(8,388	)		—			3,769			—			(3,769	)		—
Gain on sales of property and equipment, net		1,948			353			—			2,301			905			230			—			1,135
Income from operations		74,304			14,977			(8,388	)		80,893			22,801			9,636			(3,769	)		28,668
Other income (expense):
Interest expense		(33,460	)		(6,769	)		—			(40,229	)		(7,407	)		(5,966	)		—			(13,373	)
Other, net		1,325			180			—			1,505			274			99			—			373
Total other expense, net		(32,135	)		(6,589	)		—			(38,724	)		(7,133	)		(5,867	)		—			(13,000	)
Income before income taxes		42,169			8,388			(8,388	)		42,169			15,668			3,769			(3,769	)		15,668
Income tax expense		17,427			—			—			17,427			5,790			—			—			5,790
Net income	$	24,742		$	8,388		$	(8,388	)	$	24,742		$	9,878		$	3,769		$	(3,769	)	$	9,878

	Nine Months Ended September 30, 2015												Three Months Ended June 30, 2016
	H&E Equipment Services			Guarantor Subsidiaries			Elimination			Consolidated			H&E Equipment Services			Guarantor Subsidiaries			Elimination			Consolidated
	(Amounts in thousands)												(Amounts in thousands)
Revenues:
Equipment rentals	$	271,270		$	56,802		$	—		$	328,072		$	88,592		$	20,058		$	—		$	108,650
New equipment sales		156,657			18,808			—			175,465			41,808			8,085			—			49,893
Used equipment sales		66,072			17,041			—			83,113			19,821			3,948			—			23,769
Parts sales		73,516			10,884			—			84,400			23,295			3,359			—			26,654
Services revenues		40,279			7,173			—			47,452			14,468			2,477			—			16,945
Other		39,012			9,109			—			48,121			13,121			3,063			—			16,184
Total revenues		646,806			119,817			—			766,623			201,105			40,990			—			242,095
Cost of revenues:
Rental depreciation		101,237			19,884			—			121,121			32,831			6,844			—			39,675
Rental expense		43,301			9,221			—			52,522			14,960			3,061			—			18,021
New equipment sales		139,121			16,947			—			156,068			37,273			7,258			—			44,531
Used equipment sales		45,672			11,089			—			56,761			14,161			2,714			—			16,875
Parts sales		53,435			7,789			—			61,224			16,833			2,380			—			19,213
Services revenues		13,719			2,298			—			16,017			5,182			808			—			5,990
Other		38,211			9,118			—			47,329			13,106			2,976			—			16,082
Total cost of revenues		434,696			76,346			—			511,042			134,346			26,041			—			160,387
Gross profit (loss):
Gross profit:
Equipment rentals		126,732			27,697			—			154,429			40,801			10,153			—			50,954
New equipment sales		17,536			1,861			—			19,397			4,535			827			—			5,362
Used equipment sales		20,400			5,952			—			26,352			5,660			1,234			—			6,894
Parts sales		20,081			3,095			—			23,176			6,462			979			—			7,441
Services revenues		26,560			4,875			—			31,435			9,286			1,669			—			10,955
Other		801			(9	)		—			792			15			87			—			102
Gross profit		212,110			43,471			—			255,581			66,759			14,949			—			81,708
Selling, general and administrative expenses		135,966			26,618			—			162,584			46,989			10,060			—			57,049
Equity in earnings of guarantor subsidiaries		7,023			—			(7,023	)		—			2,761			—			(2,761	)		—
Gain on sales of property and equipment, net		1,306			463			—			1,769			636			76			—			712
Income from operations		84,473			17,316			(7,023	)		94,766			23,167			4,965			(2,761	)		25,371
Other income (expense):
Interest expense		(30,261	)		(10,414	)		—			(40,675	)		(11,084	)		(2,269	)		—			(13,353	)
Other, net		962			121			—			1,083			624			65			—			689
Total other expense, net		(29,299	)		(10,293	)		—			(39,592	)		(10,460	)		(2,204	)		—			(12,664	)
Income before income taxes		55,174			7,023			(7,023	)		55,174			12,707			2,761			(2,761	)		12,707
Income tax expense		22,836			—			—			22,836			5,204			—			—			5,204
Net income	$	32,338		$	7,023		$	(7,023	)	$	32,338		$	7,503		$	2,761		$	(2,761	)	$	7,503

	Six Months Ended June 30, 2017
	H&E Equipment Services			Guarantor Subsidiaries			Elimination			Consolidated
	(Amounts in thousands)
Revenues:
Equipment rentals	$	184,992		$	40,695		$	—		$	225,687
New equipment sales		68,494			11,449			—			79,943
Used equipment sales		42,474			10,495			—			52,969
Parts sales		45,701			7,599			—			53,300
Services revenues		26,090			4,934			—			31,024
Other		27,240			6,028			—			33,268
Total revenues		394,991			81,200			—			476,191
Cost of revenues:
Rental depreciation		68,290			14,451			—			82,741
Rental expense		31,976			6,560			—			38,536
New equipment sales		60,685			10,146			—			70,831
Used equipment sales		30,155			6,708			—			36,863
Parts sales		33,217			5,354			—			38,571
Services revenues		8,690			1,641			—			10,331
Other		27,040			6,266			—			33,306
Total cost of revenues		260,053			51,126			—			311,179
Gross profit (loss):
Equipment rentals		84,726			19,684			—			104,410
New equipment sales		7,809			1,303			—			9,112
Used equipment sales		12,319			3,787			—			16,106
Parts sales		12,484			2,245			—			14,729
Services revenues		17,400			3,293			—			20,693
Other		200			(238	)		—			(38	)
Gross profit		134,938			30,074			—			165,012
Selling, general and administrative expenses		103,001			14,124			—			117,125
Equity in earnings of guarantor subsidiaries		4,981			—			(4,981	)		—
Gain on sales of property and equipment, net		1,629			477			—			2,106
Income from operations		38,547			16,427			(4,981	)		49,993
Other income (expense):
Interest expense		(14,970	)		(11,635	)		—			(26,605	)
Other, net		621			189			—			810
Total other expense, net		(14,349	)		(11,446	)		—			(25,795	)
Income before income taxes		24,198			4,981			(4,981	)		24,198
Income tax expense		8,930			—			—			8,930
Net income	$	15,268		$	4,981		$	(4,981	)	$	15,268

	Six Months Ended June 30, 2016
	H&E Equipment Services			Guarantor Subsidiaries			Elimination			Consolidated
	(Amounts in thousands)
Revenues:
Equipment rentals	$	174,617		$	36,871		$	—		$	211,488
New equipment sales		87,340			19,732			—			107,072
Used equipment sales		42,737			8,606			—			51,343
Parts sales		47,516			7,107			—			54,623
Services revenues		28,447			4,799			—			33,246
Other		25,547			5,786			—			31,333
Total revenues		406,204			82,901			—			489,105
Cost of revenues:
Rental depreciation		65,944			13,228			—			79,172
Rental expense		29,008			5,776			—			34,784
New equipment sales		77,388			17,617			—			95,005
Used equipment sales		29,803			5,584			—			35,387
Parts sales		34,439			5,037			—			39,476
Services revenues		9,784			1,507			—			11,291
Other		25,353			5,785			—			31,138
Total cost of revenues		271,719			54,534			—			326,253
Gross profit:
Equipment rentals		79,665			17,867			—			97,532
New equipment sales		9,952			2,115			—			12,067
Used equipment sales		12,934			3,022			—			15,956
Parts sales		13,077			2,070			—			15,147
Services revenues		18,663			3,292			—			21,955
Other		194			1			—			195
Gross profit		134,485			28,367			—			162,852
Selling, general and administrative expenses		96,591			19,832			—			116,423
Equity in earnings of guarantor subsidiaries		4,496			—			(4,496	)		—
Gain on sales of property and equipment, net		1,166			208			—			1,374
Income from operations		43,556			8,743			(4,496	)		47,803
Other income (expense):
Interest expense		(22,386	)		(4,374	)		—			(26,760	)
Other, net		992			127			—			1,119
Total other expense, net		(21,394	)		(4,247	)		—			(25,641	)
Income before income taxes		22,162			4,496			(4,496	)		22,162
Income tax expense		9,085			—			—			9,085
Net income	$	13,077		$	4,496		$	(4,496	)	$	13,077

	Nine Months Ended September 30, 2016												Six Months Ended June 30, 2017
	H&E Equipment Services			Guarantor Subsidiaries			Elimination			Consolidated			H&E Equipment Services			Guarantor Subsidiaries			Elimination			Consolidated
	(Amounts in thousands)												(Amounts in thousands)
Cash flows from operating activities:
Net income	$	24,742		$	8,388		$	(8,388	)	$	24,742		$	15,268		$	4,981		$	(4,981	)	$	15,268
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization on property and equipment		18,022			2,299			—			20,321			10,535			1,580			—			12,115
Depreciation of rental equipment		100,111			20,589			—			120,700			68,290			14,451			—			82,741
Amortization of deferred financing costs		789			—			—			789			526			—			—			526
Accretion of note discount, net of premium amortization		124			—			—			124			84			—			—			84
Provision for losses on accounts receivable		2,507			216			—			2,723			1,484			374			—			1,858
Provision for inventory obsolescence		82			—			—			82			71			—			—			71
Change in deferred income taxes		17,193			—			—			17,193			9,968			—			—			9,968
Stock-based compensation expense		2,308			—			—			2,308			1,894			—			—			1,894
Gain from sales of property and equipment, net		(1,948	)		(353	)		—			(2,301	)		(1,629	)		(477	)		—			(2,106	)
Gain from sales of rental equipment, net		(17,219	)		(4,231	)		—			(21,450	)		(11,595	)		(3,754	)		—			(15,349	)
Equity in earnings of guarantor subsidiaries		(8,388	)		—			8,388			—			(4,981	)		—			4,981			—
Changes in operating assets and liabilities:
Receivables		8,759			(2,987	)		—			5,772			(2,027	)		(1,247	)		—			(3,274	)
Inventories		(12,001	)		(3,219	)		—			(15,220	)		(36,815	)		(12,770	)		—			(49,585	)
Prepaid expenses and other assets		1,188			(28	)		—			1,160			(1,860	)		(51	)		—			(1,911	)
Accounts payable		(18,684	)		135			—			(18,549	)		37,724			3,897			—			41,621
Manufacturer flooring plans payable		(24,377	)		170			—			(24,207	)		(6,666	)		1,710			—			(4,956	)
Accrued expenses payable and other liabilities		(5,275	)		839			—			(4,436	)		2,855			860			—			3,715
Deferred compensation payable		(348	)		—			—			(348	)		27			—			—			27
Net cash provided by operating activities		87,585			21,818			—			109,403			83,153			9,554			—			92,707
Cash flows from investing activities:
Purchases of property and equipment		(14,143	)		(2,610	)		—			(16,753	)		(10,915	)		(1,222	)		—			(12,137	)
Purchases of rental equipment		(112,346	)		(40,298	)		—			(152,644	)		(87,518	)		(25,428	)		—			(112,946	)
Proceeds from sales of property and equipment		2,218			471			—			2,689			2,548			589			—			3,137
Proceeds from sales of rental equipment		50,528			11,731			—			62,259			35,760			10,253			—			46,013
Investment in subsidiaries		(9,046	)		—			9,046			—			(6,365	)		—			6,365			—
Net cash used in investing activities.		(82,789	)		(30,706	)		9,046			(104,449	)		(66,490	)		(15,808	)		6,365			(75,933	)
Cash flows from financing activities:
Purchases of treasury stock		(546	)		—			—			(546	)
Borrowings on senior secured credit facility		767,550			—			—			767,550			484,252			—			—			484,252
Payments on senior secured credit facility		(742,645	)		—			—			(742,645	)		(482,042	)		—			—			(482,042	)
Dividends paid		(29,280	)		(7	)		—			(29,287	)		(19,561	)		(4	)		—			(19,565	)
Payments on capital lease obligations		—			(151	)		—			(151	)		—			(107	)		—			(107	)
Capital contributions		—			9,046			(9,046	)		—			—			6,365			(6,365	)		—
Net cash provided by (used in) financing activities		(4,921	)		8,888			(9,046	)		(5,079	)		(17,351	)		6,254			(6,365	)		(17,462	)
Net decrease in cash		(125	)		—			—			(125	)
Net increase (decrease) in cash														(688	)		—			—			(688	)
Cash, beginning of period		7,159			—			—			7,159			7,683			—			—			7,683
Cash, end of period	$	7,034		$	—		$	—		$	7,034		$	6,995		$	—		$	—		$	6,995

	Nine Months Ended September 30, 2015												Six Months Ended June 30, 2016
	H&E Equipment Services			Guarantor Subsidiaries			Elimination			Consolidated			H&E Equipment Services			Guarantor Subsidiaries			Elimination			Consolidated
	(Amounts in thousands)												(Amounts in thousands)
Cash flows from operating activities:
Net income	$	32,338		$	7,023		$	(7,023	)	$	32,338		$	13,077		$	4,496		$	(4,496	)	$	13,077
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization on property and equipment		15,710			2,185			—			17,895			11,952			1,512			—			13,464
Depreciation of rental equipment		101,237			19,884			—			121,121			65,944			13,228			—			79,172
Amortization of deferred financing costs		774			—			—			774			526			—			—			526
Accretion of note discount, net of premium amortization		126			—			—			126			83			—			—			83
Provision for losses on accounts receivable		2,236			210			—			2,446			1,979			29			—			2,008
Provision for inventory obsolescence		201			—			—			201			14			—			—			14
Change in deferred income taxes		22,514			—			—			22,514			9,182			—			—			9,182
Stock-based compensation expense		2,036			—			—			2,036			1,667			—			—			1,667
Gain from sales of property and equipment, net		(1,306	)		(463	)		—			(1,769	)		(1,166	)		(208	)		—			(1,374	)
Gain from sales of rental equipment, net		(19,366	)		(5,596	)		—			(24,962	)		(12,481	)		(2,986	)		—			(15,467	)
Equity in earnings of guarantor subsidiaries		(7,023	)		—			7,023			-			(4,496	)		—			4,496			—
Changes in operating assets and liabilities:
Receivables		8,097			7,185			—			15,282			10,639			(3,529	)		—			7,110
Inventories		(16,696	)		(1,977	)		—			(18,673	)		(38,755	)		(13,712	)		—			(52,467	)
Prepaid expenses and other assets		(3,652	)		(50	)		—			(3,702	)		547			(58	)		—			489
Accounts payable		412			187			—			599			14,511			7,811			—			22,322
Manufacturer flooring plans payable		(33,696	)		—			—			(33,696	)		(16,466	)		—			—			(16,466	)
Accrued expenses payable and other liabilities		(12,276	)		792			—			(11,484	)		3,855			745			—			4,600
Deferred compensation payable		51			—			—			51			(363	)		—			—			(363	)
Net cash provided by operating activities		91,717			29,380			—			121,097			60,249			7,328			—			67,577
Cash flows from investing activities:
Purchases of property and equipment		(19,997	)		(2,320	)		—			(22,317	)		(9,903	)		(1,562	)		—			(11,465	)
Purchases of rental equipment		(104,735	)		(32,449	)		—			(137,184	)		(44,643	)		(24,501	)		—			(69,144	)
Proceeds from sales of property and equipment		2,050			532			—			2,582			1,417			266			—			1,683
Proceeds from sales of rental equipment		53,784			14,403			—			68,187			36,342			8,159			—			44,501
Investment in subsidiaries		9,398			—			(9,398	)		—			(10,414	)		—			10,414			—
Net cash used in investing activities.		(59,500	)		(19,834	)		(9,398	)		(88,732	)		(27,201	)		(17,638	)		10,414			(34,425	)
Cash flows from financing activities:
Purchases of treasury stock		(470	)		—			—			(470	)
Borrowings on senior secured credit facility		768,572			—			—			768,572			482,513			—			—			482,513
Payments on senior secured credit facility		(778,903	)		—			—			(778,903	)		(492,866	)		—			—			(492,866	)
Dividends paid		(27,365	)		(5	)		—			(27,370	)		(19,501	)		(4	)		—			(19,505	)
Payments of deferred financing costs		(725	)		—			—			(725	)
Payments on capital lease obligations		—			(143	)		—			(143	)		—			(100	)		—			(100	)
Capital contributions		—			(9,398	)		9,398			-			—			10,414			(10,414	)		—
Net cash used in financing activities		(38,891	)		(9,546	)		9,398			(39,039	)
Net decrease in cash		(6,674	)		—			—			(6,674	)
Net cash provided by (used in) financing activities														(29,854	)		10,310			(10,414	)		(29,958	)
Net increase in cash														3,194			—			—			3,194
Cash, beginning of period		15,861			—			—			15,861			7,159			—			—			7,159
Cash, end of period	$	9,187		$	—		$	—		$	9,187		$	10,353		$	—		$	—		$	10,353

transaction not being consummated on or prior to January 14, 2018. In addition, each outstanding, unvested stock option and restricted stock unit in respect of Neff’s Class A common stock will be converted into the right to receive Company common stock on substantially similar terms, while each outstanding, vested stock option and restricted stock unit will be entitled to receive an amount in cash based upon the Merger Consideration. In connection with entering into the Merger Agreement, the Company also entered into a support agreement with Neff’s largest stockholders, Wayzata Opportunities Fund II, L.P. and Wayzata Opportunities Fund Offshore II, L.P. (collectively, “Wayzata”), pursuant to which Wayzata delivered a written consent approving and adopting the Merger Agreement concurrently with the parties execution thereof, as well as exchange and termination agreements with each of Wayzata and the other holders of securities of Neff Holdings, LLC, Neff’s wholly-owned subsidiary, in order to collapse Neff’s holding company structure in advance of the consummation of the proposed merger.

The transaction is expected to close in the late third quarter or early fourth quarter of 2017, and is subject to customary closing conditions including Hart-Scott-Rodino Act clearance, as well as a “go-shop” period in favor of Neff Corporation, which period will expire at 11:59 p.m. on August 20, 2017.

The Company intends to fund the consideration to be paid pursuant to the terms of the Merger Agreement, as well as the fees, commissions and expenses related to the transactions contemplated thereby, through a combination of some or all of the following:

The Company also intends to use a portion of the proceeds of the Proposed Financing to refinance certain existing indebtedness of the Company and Neff, including existing senior secured credit facilities. Subject to market conditions, the Company may seek to refinance its existing 7% senior unsecured notes due 2022 in the aggregate principal amount of $630 million. The Proposed Equity Offering and Proposed Notes Offering are each subject to market and other conditions, and the Proposed Financing is contingent on the satisfaction of certain customary conditions.

In connection with its entry into the Merger Agreement, on July 14, 2017, the Company entered into a Commitment Letter (the “Commitment Letter”) with Wells Fargo Bank, National Association (“Wells Fargo Bank”), WF Investment Holdings, LLC (“WFIH”) and Wells Fargo Securities, LLC (collectively with Wells Fargo Bank and WFIH, “Wells Fargo”), pursuant to which Wells Fargo has committed to provide 100% of the ABL Facility and 100% of the principal amount of a senior unsecured bridge facility (the “Bridge Facility”) in an amount up to $825 million. The Commitment Letter contemplates that the Company will undertake the Proposed Notes Offering and the Proposed Equity Offering, and the commitment under the Bridge Facility will be reduced, on a dollar-for-dollar basis, by the amount of aggregate proceeds, if any, from the Proposed Notes Offering and Proposed Equity Offering. Funding of the financing under the Commitment Letter is contingent on the satisfaction or waiver of certain conditions set forth therein.

The ABL Facility is expected to contain a springing minimum fixed charge coverage ratio covenant and other customary negative and affirmative covenants and representations and warranties. The Bridge Facility is also expected to contain customary affirmative and negative covenants and representations and warranties. The respective obligations of Wells Fargo Bank and WFIH to provide the Credit Facilities are subject to customary conditions, including, without limitation, execution and delivery of definitive documentation consistent with the Commitment Letter and the documentation standards specified therein.

Under certain conditions Wells Fargo has the right to exercise a securities demand which requires the Company to accept an issuance, at then current market terms, of up to $825 million in unsecured debt securities in order to close the transaction.

Wells Fargo or its affiliates from time to time have provided in the past and may provide in the future investment banking, commercial lending and financial advisory services to the Company and its affiliates in the ordinary course of business, and has received, and may in the future receive, customary fees for such transactions and services.

For additional information on the Merger Agreement, please see the Company’s Current Report on Form 8-K filed with the Securities & Exchange Commission on July 14, 2017.

ITEM 2. — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion summarizes the financial position of H&E Equipment Services, Inc. and its subsidiaries as of ~~September~~June 30, ~~2016,~~2017, and its results of operations for the three and ~~nine~~six month periods ended ~~September~~June 30, ~~2016,~~2017, and should be read in conjunction with (i) the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q and (ii) the audited consolidated financial statements and accompanying notes to our Annual Report on Form 10-K for the year ended December 31, ~~2015.~~2016. The following discussion contains, in addition to historical information, forward-looking statements that include risks and uncertainties (see discussion of “Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q). Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those factors set forth under Item 1A – “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, ~~2015.~~2016.

As one of the largest integrated equipment services companies in the United States focused on heavy construction and industrial equipment, we rent, sell and provide parts and services support for four core categories of specialized equipment: (1) hi-lift or aerial work platform equipment; (2) cranes; (3) earthmoving equipment; and (4) industrial lift trucks. By providing equipment rental, sales, on-site parts, repair and maintenance functions under one roof, we are a one-stop provider for our customers’ varied equipment needs. This full service approach provides us with multiple points of customer contact, enables us to maintain a high quality rental fleet, as well as an effective distribution channel for fleet disposal and provides cross-selling opportunities among our new and used equipment sales, rental, parts sales and services operations.

As of ~~October 21, 2016,~~July 20, 2017, we operated 7678 full-service facilities throughout the Intermountain, Southwest, Gulf Coast, West Coast, Southeast and Mid-Atlantic regions of the United States. Our work force includes distinct, focused sales forces for our new and used equipment sales and rental operations, highly skilled service technicians, product specialists and regional managers. We focus our sales and rental activities on, and organize our personnel principally by, our four core equipment categories. We believe this allows us to provide specialized equipment knowledge, improve the effectiveness of our rental and sales force and strengthen our customer relationships. In addition, we have branch managers for each location who are responsible for managing their assets and financial results. We believe this fosters accountability in our business and strengthens our local and regional relationships.

Through our predecessor companies, we have been in the equipment services business for approximately 5556 years. H&E Equipment Services L.L.C. (“H&E LLC”) was formed in June 2002 through the business combination of Head & Engquist Equipment, LLC (“Head & Engquist”), a wholly-owned subsidiary of Gulf Wide Industries, L.L.C. (“Gulf Wide”), and ICM Equipment Company L.L.C. (“ICM”). Head & Engquist, founded in 1961, and ICM, founded in 1971, were two leading regional, integrated equipment service companies operating in contiguous geographic markets. In the June 2002 transaction, Head & Engquist and ICM were merged with and into Gulf Wide, which was renamed H&E LLC. Prior to the combination, Head & Engquist operated 25 facilities in the Gulf Coast region, and ICM operated 16 facilities in the Intermountain region of the United States.

Prior to our initial public offering in February 2006, our business was conducted through H&E LLC. In connection with our initial public offering, we converted H&E LLC into H&E Equipment Services, Inc. In order to have an operating Delaware corporation as the issuer for our initial public offering, H&E Equipment Services, Inc. was formed as a Delaware corporation and wholly-owned subsidiary of H&E Holdings L.L.C. (“H&E Holdings”), and immediately prior to the closing of our initial public offering, on February 3, 2006, H&E LLC and H&E Holdings merged with and into H&E Equipment Services, Inc., which survived the reincorporation merger as the operating company. Effective February 3, 2006, H&E LLC and H&E Holdings no longer existed under operation of law pursuant to the reincorporation merger.

Item 7, included in Part II of our Annual Report on Form 10-K for the year ended December 31, ~~2015,~~2016, presents the accounting policies and related estimates that we believe are the most critical to understanding our consolidated financial statements, financial condition, and results of operations and cash flows, and which require complex management judgment and assumptions, or involve uncertainties. There have been no changes to these critical accounting policies and estimates during the ~~nine~~six month period ended ~~September~~June 30, ~~2016.~~2017. These policies include, among others, revenue recognition, the adequacy of the allowance for doubtful accounts, the propriety of our estimated useful life of rental equipment and property and equipment, the potential impairment of long-lived assets including goodwill and intangible assets, obsolescence reserves on inventory, the allocation of purchase price related to business combinations, reserves for claims, including self-insurance reserves, and deferred income taxes, including the valuation of any related deferred tax assets.

Information regarding our other significant accounting policies is included in note 2 to our consolidated financial statements in Item 8 of Part II of our Annual Report on Form 10-K for the year ended December 31, ~~2015~~2016 and in note 2 to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

We have five reportable segments because we derive our revenues from five principal business activities: (1) equipment rentals; (2) new equipment sales; (3) used equipment sales; (4) parts sales; and (5) repair and maintenance services. These segments are based upon how we allocate resources and assess performance. In addition, we also have non-segmented revenues and costs that relate to equipment support activities.

Our non-segmented revenues and costs relate to equipment support activities that we provide, such as transportation, hauling, parts freight and damage waivers, and are not generally allocated to reportable segments.

For additional information about our business segments, see note 9 to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

We generate all of our total revenues from our five business segments and our non-segmented equipment support activities. Equipment rentals and new equipment sales account for more than half of our total revenues. For the ~~nine~~six month period ended ~~September~~June 30, ~~2016,~~2017, approximately ~~45.0%~~47.4% of our total revenues were attributable to equipment rentals, ~~20.7%~~16.8% of our total revenues were attributable to new equipment sales, ~~9.8%~~11.1% were attributable to used equipment sales, 11.2% were attributable to parts sales, ~~6.7%~~6.5% were attributable to our services revenues and ~~6.6%~~7.0% were attributable to non-segmented other revenues.

The equipment that we sell, rent and service is principally used in the construction industry, as well as by companies for commercial and industrial uses such as plant maintenance and turnarounds, as well as in the petrochemical and energy sectors. As a result, our total revenues are affected by several factors including, but not limited to, the demand for and availability of rental equipment, rental rates and other competitive factors, the demand for new and used equipment, the level of construction and industrial activities, spending levels by our customers, adverse weather conditions and general economic conditions. For a discussion of the impact of seasonality on our revenues, see “Seasonality” below.

Equipment Rentals. Our rental operation primarily rents our four core types of construction and industrial equipment. We have a well-maintained rental fleet and our own dedicated sales force, focused by equipment type. We actively manage the size, quality, age and composition of our rental fleet based on our analysis of key measures such as time utilization (which we analyze as equipment usage based on: (1) a percentage of original equipment cost, and (2) the number of rental equipment units available for rent), rental rate trends and targets, rental equipment dollar utilization and maintenance and repair costs, which we closely monitor. We maintain fleet quality through regional quality control managers and our parts and services operations. We recognize revenue from equipment rentals in the period earned on a straight-line basis, over the contract term, regardless of the timing of the billing to customers.

New Equipment Sales. We seek to optimize revenues from new equipment sales by selling equipment through a professional in-house retail sales force focused by product type. While sales of new equipment are impacted by the availability of equipment from the manufacturer, we believe our status as a leading distributor for some of our key suppliers improves our ability to obtain equipment. New equipment sales are an important component of our integrated model due to customer interaction and service contact and new equipment sales also lead to future parts and services revenues. We recognize revenue from the sale of new equipment at the time of delivery to, or pick-up by, the customer and when all obligations under the sales contract have been fulfilled and collectibility is reasonably assured.

Used Equipment Sales. We generate the majority of our used equipment sales revenues by selling equipment from our rental fleet. The remainder of our used equipment sales revenues comes from the sale of inventoried equipment that we acquire through trade-ins from our equipment customers and selective purchases of high‑quality used equipment. Our policy is not to offer specified price trade‑in arrangements on equipment for sale. Sales of our rental fleet equipment allow us to manage the size, quality, composition and age of our rental fleet, and provide us with a profitable distribution channel for the disposal of rental equipment. We recognize revenue for the sale of used equipment at the time of delivery to, or pick-up by, the customer and when all obligations under the sales contract have been fulfilled and collectibility is reasonably assured.

Parts Sales. We generate revenues from the sale of new and used parts for equipment that we rent or sell, as well as for other makes of equipment. Our product support sales representatives are instrumental in generating our parts revenues. They are product specialists and receive performance incentives for achieving certain sales levels. Most of our parts sales come from our extensive in-house parts inventory. Our parts sales provide us with a relatively stable revenue stream that is generally less sensitive to the economic cycles that tend to affect our rental and equipment sales operations. We recognize revenues from parts sales at the time of delivery to, or pick-up by, the customer and when all obligations under the sales contract have been fulfilled and collectibility is reasonably assured.

Services. We derive our services revenues from maintenance and repair services to customers for their owned equipment. In addition to repair and maintenance on an as-needed or scheduled basis, we also provide ongoing preventative maintenance services to industrial customers. Our after‑market service provides a high-margin, relatively stable source of revenue through changing economic cycles. We recognize services revenues at the time services are rendered and collectibility is reasonably assured.

Our non-segmented other revenues relate to equipment support activities that we provide, such as transportation, hauling, parts freight and damage waivers, and are not generally allocated to reportable segments. We recognize non-segmented other revenues at the time of billing and after the related services have been provided.

Our largest expenses are the costs to purchase the new equipment we sell, the costs associated with the used equipment we sell, rental expenses, rental depreciation and costs associated with parts sales and services, all of which are included in cost of revenues. For the ~~nine~~six month period ended ~~September~~June 30, ~~2016,~~2017, our total cost of revenues was ~~$482.8~~$311.2 million. Our operating expenses consist principally of selling, general and administrative expenses. For the ~~nine~~six month period ended ~~September~~June 30, ~~2016,~~2017, our selling, general and administrative expenses were ~~$172.4~~$117.1 million. In addition, we have interest expense related to our debt instruments. Operating expenses and all other income and expense items below the gross profit line of our consolidated statements of income are not generally allocated to our reportable segments.

We are also subject to federal and state income taxes. Future income tax examinations by state and federal agencies could result in additional income tax expense based on probable outcomes of such matters.

Rental Depreciation. Depreciation of rental equipment represents the depreciation costs attributable to rental equipment. Estimated useful lives vary based upon type of equipment. Generally, we depreciate cranes and aerial work platforms over a ten year estimated useful life, earthmoving over a five year estimated useful life with a 25% salvage value, and industrial lift trucks over a seven year estimated useful life. Attachments and other smaller type equipment are depreciated over a three year estimated useful life. We periodically evaluate the appropriateness of remaining depreciable lives assigned to rental equipment.

Rental Expense. Rental expense represents the costs associated with rental equipment, including, among other things, the cost of servicing and maintaining our rental equipment, property taxes on our fleet and other miscellaneous costs of rental equipment.

New Equipment Sales. Cost of new equipment sold primarily consists of the equipment cost of the new equipment that is sold, net of any amount of credit given to the customer towards the equipment for trade-ins.

Used Equipment Sales. Cost of used equipment sold consists of the net book value of rental equipment for used equipment sold from our rental fleet, the equipment costs for used equipment we purchase for sale or the trade-in value of used equipment that we obtain from customers in equipment sales transactions.

Parts Sales. Cost of parts sales represents costs attributable to the sale of parts directly to customers.

Services Support. Cost of services revenues represents costs attributable to service provided for the maintenance and repair of customer-owned equipment and equipment then on-rent by customers.

Non-Segmented Other. These expenses include costs associated with providing transportation, hauling, parts freight, and damage waiver including, among other items, drivers’ wages, fuel costs, shipping costs, and our costs related to damage waiver policies.

Our selling, general and administrative (“SG&A”) expenses include sales and marketing expenses, payroll and related benefit costs, insurance expenses, legal and professional fees, rent and other occupancy costs, property and other taxes, administrative overhead, depreciation associated with property and equipment (other than rental equipment) and amortization expense associated with capital leases and software. These expenses are not generally allocated to our reportable segments.

Interest expense for the periods presented represents the interest on our outstanding debt instruments, including aggregate amounts outstanding under our revolving senior secured credit facility (the “Credit Facility”), ~~our 7.0%~~ senior unsecured notes due 2022 (the ~~“Notes”~~“Senior Notes”) and our capital lease obligations. Interest expense also includes interest on our outstanding manufacturer flooring plans payable which are used to finance inventory and rental equipment purchases. Non-cash interest expense related to the amortization cost of deferred financing costs and accretion (amortization) of debt discount (premium) are also included in interest expense.

We generate cash primarily from our operating activities and, historically, we have used cash flows from operating activities, manufacturer floor plan financings and available borrowings under the Credit Facility as the primary sources of funds to purchase inventory and to fund working capital and capital expenditures, growth and expansion opportunities (see also “Liquidity and Capital Resources” below). Our management of our working capital is closely tied to operating cash flows, as working capital can be significantly impacted by, among other things, our accounts receivable activities, the level of new and used equipment inventories, which may increase or decrease in response to current and expected demand, and the size and timing of our trade accounts payable payment cycles.

A substantial portion of our overall value is in our rental fleet equipment. The net book value of our rental equipment at ~~September~~June 30, ~~2016~~2017 was ~~$922.5~~$902.4 million, or approximately ~~71.4%~~69.8% of our total assets. Our rental fleet as of ~~September~~June 30, ~~2016~~2017 consisted of ~~29,086~~29,874 units having an original acquisition cost (which we define as the cost originally paid to manufacturers or the original amount financed under operating leases) of approximately ~~$1.35~~$1.4 billion. As of ~~September~~June 30, ~~2016,~~2017, our rental fleet composition was as follows (dollars in millions):

	Units		% of Total Units			Original Acquisition Cost		% of Original Acquisition Cost			Average Age in Months		Units		% of Total Units			Original Acquisition Cost		% of Original Acquisition Cost			Average Age in Months
Hi-Lift or Aerial Work Platforms		19,313		66.4	%	$	830.0		61.6	%		34.2		20,476		68.5	%	$	877.6		64.1	%		36.6
Cranes		363		1.2	%		125.1		9.3	%		47.3		310		1.0	%		108.8		8.0	%		49.7
Earthmoving		3,258		11.2	%		289.4		21.5	%		22.1		3,242		10.9	%		282.3		20.6	%		23.8
Industrial Lift Trucks		889		3.1	%		31.5		2.3	%		31.2		897		3.0	%		29.8		2.2	%		28.7
Other		5,263		18.1	%		72.0		5.3	%		26.5		4,949		16.6	%		70.5		5.1	%		29.0
Total		29,086		100.0	%	$	1,348.0		100.0	%		31.5		29,874		100.0	%	$	1,368.9		100.0	%		33.8

Determining the optimal age and mix for our rental fleet equipment is subjective and requires considerable estimates and judgments by management. We constantly evaluate the mix, age and quality of the equipment in our rental fleet in response to current economic and market conditions, competition and customer demand. The mix and age of our rental fleet, as well as our cash flows, are impacted by sales of equipment from the rental fleet, which are influenced by used equipment pricing at the retail and secondary auction market levels, and the capital expenditures to acquire new rental fleet equipment. In making equipment acquisition decisions, we evaluate current economic and market conditions, competition, manufacturers’ availability, pricing and return on investment over the estimated useful life of the specific equipment, among other things. As a result of our in-house service capabilities and extensive maintenance program, we believe our rental fleet is well-maintained.

The original acquisition cost of our gross rental fleet increased by ~~$61.7~~approximately $35.3 million, or ~~4.8%~~2.6%, for the ~~nine~~six month period ended ~~September~~June 30, ~~2016.~~2017. The average age of our rental fleet equipment increased by approximately ~~0.1~~0.8 months for the ~~nine~~six month period ended ~~September~~June 30, ~~2016.~~2017.

Our average rental rates for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 were ~~0.4%~~approximately 0.1% lower than in the ~~nine~~six month period ended ~~September~~June 30, ~~2015~~2016 (see further discussion on rental rates in “Results of Operations” below)~~. Our average~~ and approximately 0.3% higher than in the three month period ended March 31, 2017. Average rental rates for the three month period ended ~~September~~June 30, ~~2016~~2017 were ~~0.7% lower compared to the same period last year, but 1.0%~~0.3% higher than in the ~~previous~~ three month period ended June 30, 2016.

The rental equipment mix among our four core product lines for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 was largely consistent with that of the prior year comparable period as a percentage of total units available for rent and as a percentage of original acquisition cost.

We are subject to a number of external factors that may adversely affect our businesses. These factors, and other factors, are discussed below and under the heading “Forward‑Looking Statements,” and in Item 1A—Risk Factors in this Annual Report on Form 10‑K for the year ended December 31, ~~2015.~~2016.

We believe that our integrated business tempers the effects of downturns in a particular segment. For a discussion of seasonality, see “Seasonality” on page 3640 of this Quarterly Report on Form 10-Q.

The tables included in the period-to-period comparisons below provide summaries of our revenues and gross profits for our business segments and non-segmented revenues for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 and ~~2015.~~2016. The period-to-period comparisons of our financial results are not necessarily indicative of future results.

Three Months Ended ~~September~~June 30, ~~2016~~2017 Compared to the Three Months Ended ~~September~~June 30, ~~2015~~2016

	Three Months Ended				Total			Total			Three Months Ended				Total			Total
	September 30,				Dollar			Percentage			June 30,				Dollar			Percentage
	2016		2015		Increase (Decrease)			Increase (Decrease)			2017		2016		Increase (Decrease)			Increase (Decrease)
	(in thousands, except percentages)										(in thousands, except percentages)
Segment Revenues:
Equipment rentals	$	118,535	$	118,055	$	480			0.4	%	$	118,370	$	108,650	$	9,720			8.9	%
New equipment sales		44,764		66,552		(21,788	)		(32.7	)%		45,669		49,893		(4,224	)		(8.5	)%
Used equipment sales		20,630		29,111		(8,481	)		(29.1	)%		24,106		23,769		337			1.4	%
Parts sales		27,335		28,968		(1,633	)		(5.6	)%		27,969		26,654		1,315			4.9	%
Services revenues		16,076		16,727		(651	)		(3.9	)%		15,944		16,945		(1,001	)		(5.9	)%
Non-Segmented revenues		17,346		17,440		(94	)		(0.5	)%		17,305		16,184		1,121			6.9	%
Total revenues	$	244,686	$	276,853	$	(32,167	)		(11.6	)%	$	249,363	$	242,095	$	7,268			3.0	%

Total Revenues. Our total revenues were ~~$244.7~~$249.4 million for the three month period ended ~~September~~June 30, ~~2016~~2017 compared to ~~$276.9~~$242.1 million for the three month period ended ~~September~~June 30, ~~2015, a decrease~~2016, an increase of ~~$32.2~~$7.3 million, or ~~11.6%~~3.0%. Revenues for all reportable segments and non-segmented other revenues are further discussed below.

Equipment Rental Revenues. Our revenues from equipment rentals for the three month period ended ~~September~~June 30, ~~2016~~2017 increased ~~approximately $0.5~~$9.7 million to ~~$118.5~~$118.4 million from ~~approximately $118.1~~$108.7 million in the three month period ended ~~September~~June 30, ~~2015.~~2016. Rental revenues from aerial work platform equipment increased ~~$1.3~~$7.6 million, while rental revenues from earthmoving equipment and other equipment ~~rentals and earthmoving equipment~~ increased ~~$0.6~~$2.9 million and ~~$0.3~~approximately $0.9 million, respectively. These ~~equipment~~ rental revenues increases were partially offset by a ~~$1.8~~$1.6 million decrease in crane rental revenues and a $0.1 million decrease in lift truck rental revenues. Our average rental rates for the three month period ended ~~September~~June 30, ~~2016 decreased 0.7%~~2017 increased 0.3% compared to the same three month period last year ~~but~~and increased approximately ~~1.0%~~0.3% from the three month period ended ~~June 30, 2016.~~March 31, 2017.

Rental equipment dollar utilization (annual rental revenues divided by the average original rental fleet equipment costs) for the three month period ended ~~September~~June 30, ~~2016~~2017 was ~~35.4%~~34.9% compared to ~~36.4%~~33.9% in the three month period ended ~~September~~June 30, ~~2015, a decrease~~2016, an increase of 1.0%. The ~~decrease~~increase in comparative rental equipment dollar utilization was the result of ~~a decrease~~an increase in rental equipment time utilization combined with a ~~0.7% decrease~~0.3% increase in average rental ~~rates.~~rates, largely reflective of increased rental equipment demand. Rental equipment time utilization as a percentage of original equipment cost was approximately ~~72.1%~~72.2% for the three month period ended ~~September~~June 30, ~~2016~~2017 compared to ~~73.7%~~70.1% in the three month period ended ~~September~~June 30, ~~2015, a decrease~~2016, an increase of ~~1.6%~~2.1%. The decrease in equipment rental time utilization based on original equipment cost is reflective of lower utilization in the Company’s oil and gas markets and the significant flooding event in Louisiana

~~in mid-August.~~ Our rental equipment time utilization based on the number of rental equipment units available for rent was ~~68.0%~~69.9% for the three month period ended ~~September~~June 30, ~~2016,~~2017, compared to approximately ~~70.2%~~67.5% in the same period last year, ~~a decrease~~an increase of ~~2.2%~~2.4%.

New Equipment Sales Revenues. Our new equipment sales for the three month period ended ~~September~~June 30, ~~2016~~2017 decreased ~~$21.8~~$4.2 million, or ~~32.7%~~8.5%, to ~~$44.8~~$45.7 million from ~~$66.6~~$49.9 million for the three month period ended ~~September~~June 30, ~~2015, largely~~2016. New earthmoving equipment sales decreased $8.5 million primarily as a result of certain manufacturer incentives in the comparable 2016 period, while lift truck new equipment sales and aerial work platform equipment new equipment sales decreased $0.9 million and approximately $0.7 million, respectively. These new equipment sales decreases were partially offset by a ~~$17.6~~$3.8 million ~~decrease in sales of new cranes. The decrease~~increase in new crane sales ~~is due primarily to decreased demand for new cranes among the Company’s customers operating in the Company’s oil~~ and gas markets. Sales of new other equipment and new earthmoving equipment decreased $3.4 million and $1.1 million, respectively, while sales of new lift trucks decreased $0.2 million. Partially offsetting these new equipment sales decreases was a ~~$0.5~~$2.1 million increase in new ~~aerial work platform~~other equipment ~~sales.~~sales compared to the prior year period.

Used Equipment Sales Revenues. Our used equipment sales ~~decreased $8.5~~increased $0.3 million, or ~~29.1%~~1.4%, to ~~$20.6~~$24.1 million for the three month period ended ~~September~~June 30, ~~2016,~~2017, from ~~$29.1~~$23.8 million for the same three month period in ~~2015.~~2016. Sales of ~~used cranes and~~ used aerial work platform equipment ~~decreased $4.3~~increased $0.5 million, ~~and $2.6 million, respectively, and~~while sales of used ~~earthmoving equipment~~lift trucks and used other equipment ~~decreased $1.6~~increased $0.3 million and ~~$0.5~~$0.1 million, respectively. Sales of used ~~lift trucks increased $0.5 million. The decrease in used equipment sales revenues is largely due~~cranes decreased $0.6 million compared to ~~a decrease in sales of used equipment from~~ the ~~Company’s rental fleet and the mix of used equipment sold.~~prior year period.

Parts Sales Revenues. Our parts sales for the three month period ended ~~September~~June 30, ~~2016 decreased $1.6~~2017 increased $1.3 million, or ~~5.6%~~4.9%, to ~~$27.3~~approximately $28.0 million from ~~approximately $29.0~~$26.7 million for the same three month period last year. The ~~decrease~~increase in parts sales revenues was driven primarily by ~~lower~~higher crane parts and earthmoving ~~equipment and crane~~ parts sales revenues.

Services Revenues. Our services revenues for the three month period ended ~~September~~June 30, ~~2016~~2017 decreased ~~approximately $0.7~~$1.0 million, or ~~3.9%~~5.9%, to ~~approximately $16.1~~$15.9 million from ~~$16.7~~$16.9 million for the same three month period last year. The decrease in services revenues was due primarily to decreases in services revenues related to cranes and other equipment.

Non-Segmented Other Revenues. Our non-segmented other revenues consisted primarily of equipment support activities including transportation, hauling, parts freight and damage waiver charges. For the three month period ended ~~September~~June 30, ~~2016,~~2017, our other revenues were approximately $17.3 million, ~~a decrease~~an increase of ~~$0.1~~$1.1 million, or ~~0.5%~~6.9%, from ~~$17.4~~$16.2 million in the same three month period in ~~2015.~~2016. The increase in these revenues was primarily driven by higher hauling revenues and damage waiver income.

	Three Months Ended				Total			Total			Three Months Ended				Total			Total
	September 30,				Dollar			Percentage			June 30,				Dollar			Percentage
	2016		2015		Increase (Decrease)			Increase (Decrease)			2017		2016		Increase (Decrease)			Increase (Decrease)
	(in thousands, except percentages)										(in thousands, except percentages)
Segment Gross Profit:
Equipment rentals	$	58,629	$	57,882	$	747			1.3	%	$	56,370	$	50,954	$	5,416			10.6	%
New equipment sales		4,617		6,552		(1,935	)		(29.5	)%		5,219		5,362		(143	)		(2.7	)%
Used equipment sales		6,266		8,849		(2,583	)		(29.2	)%		7,104		6,894		210			3.0	%
Parts sales		7,627		7,870		(243	)		(3.1	)%		7,611		7,441		170			2.3	%
Services revenues		10,631		11,145		(514	)		(4.6	)%		10,612		10,955		(343	)		(3.1	)%
Non-Segmented revenues		355		539		(184	)		(34.1	)%
Non-Segmented revenues gross profit												424		102		322			315.7	%
Total gross profit	$	88,125	$	92,837	$	(4,712	)		(5.1	)%	$	87,340	$	81,708	$	5,632			6.9	%

Total Gross Profit. Our total gross profit was ~~$88.1~~$87.3 million for the three month period ended ~~September~~June 30, ~~2016~~2017 compared to ~~$92.8~~$81.7 million for the same three month period in ~~2015, a decrease~~2016, an increase of ~~4.7~~$5.6 million, or ~~5.1%~~6.9%. Total gross profit margin for the three month period ended ~~September~~June 30, 2016 was approximately ~~36.0%~~35.0%, an increase of ~~2.5%~~approximately 1.2% from the ~~33.5%~~33.8% gross profit margin for the same three month period in ~~2015.~~2016. Gross profit and gross margin for all reportable segments and non-segmented other revenues are further described below:

Equipment Rentals Gross Profit. Our gross profit from equipment rentals for the three month period ended ~~September~~June 30, ~~2016~~2017 increased ~~$0.7~~$5.4 million, or ~~1.3%~~10.6%, to ~~$58.6~~approximately $56.4 million from ~~$57.9~~$51.0 million in the same three month period in ~~2015.~~2016. The increase in equipment rentals gross profit was the net result of a ~~$0.5~~$9.7 million increase in equipment rental revenues, partially offset by a $2.2 million increase in rental ~~revenues combined with~~equipment depreciation expense and a ~~$0.8~~$2.1 million ~~decrease~~increase in rental ~~expenses, which was partially offset by an increase of $0.6 million in rental equipment depreciation expense.~~expenses. Gross profit margin on equipment rentals for the three month period ended ~~September~~June 30, ~~2016~~2017 was ~~49.5%~~approximately 47.6% compared to ~~49.0%~~46.9% for the same period in ~~2015,~~2016, an increase of ~~0.5%~~0.7%. Depreciation expense was 35.3% of equipment rental revenues for the three month period ended June 30, 2017 compared to 36.5% for the same period in 2016, a decrease of 1.2%, primarily as a result of rental fleet mix. As a percentage of equipment rental revenues, rental expenses were ~~15.5%~~17.0% for the three month period ended ~~September~~June 30, ~~2016~~2017 compared to ~~16.3%~~16.6% for the same period last year, ~~a decrease~~an increase of ~~0.8%~~0.4%, resulting primarily from ~~lower~~

~~maintenance and~~higher repair costs on ~~aerial work platform~~rental equipment ~~as a percentage of aerial work platform equipment rental revenues. Depreciation expense was 35.0% of equipment rental revenues for~~in the ~~three month period ended September 30, 2016 compared to 34.7% for the same period in 2015, an increase of 0.3%, primarily as a result of rental fleet mix.~~current year period.

New Equipment Sales Gross Profit. Our new equipment sales gross profit for the three month period ended ~~September~~June 30, ~~2016~~2017 decreased ~~$1.9~~approximately $0.2 million, or ~~29.5%~~2.7%, to ~~$4.6~~$5.2 million compared to approximately ~~$6.5~~$5.4 million for the same three month

period in ~~2015~~2016 on a total new equipment sales decrease of ~~$21.8~~$4.2 million. Gross profit margin on new equipment sales was ~~10.3%~~11.4% for the three month period ended ~~September~~June 30, ~~2016~~2017 compared to ~~9.8%~~10.7% for the same three month period in ~~2015,~~2016, an increase of ~~0.5%~~0.7%, primarily driven by the mix of new equipment sold and higher ~~gross~~ margins on new crane ~~sales, resulting primarily from the mix of new cranes sold.~~sales.

Used Equipment Sales Gross Profit. Our used equipment sales gross profit for the three month period ended ~~September~~June 30, ~~2016 decreased $2.6~~2017 increased $0.2 million, or ~~29.2%~~3.0%, to ~~$6.3~~$7.1 million from ~~approximately $8.8~~$6.9 million in the same period in ~~2015~~2016 on a used equipment sales ~~decrease~~increase of ~~$8.5~~$0.3 million. Gross profit margin on used equipment sales ~~was 30.4% in each of~~for the three month ~~periods~~period ended ~~September~~June 30, ~~2015 and 2014.~~2017 was 29.5%, up 0.5% from 29.0% for the same three month period in 2016, primarily as a result of the mix of used equipment sold. Our used equipment sales from the rental fleet, which comprised approximately ~~86.1%~~88.0% and ~~81.7%~~85.4% of our used equipment sales for the three month periods ended ~~September~~June 30, ~~2016~~2017 and ~~2015,~~2016, respectively, were approximately ~~150.8%~~146.7% and ~~152.5%~~148.0% of net book value for the three month periods ended ~~September~~June 30, ~~2016~~2017 and ~~2015,~~2016, respectively.

Parts Sales Gross Profit. For the three month period ended ~~September~~June 30, ~~2016,~~2017, our parts sales gross profit ~~decreased approximately~~increased $0.2 million, or ~~3.1%~~2.3%, to $7.6 million from ~~$7.9~~$7.4 million for the same three month period in ~~2015~~2016 on a ~~$1.6~~$1.3 million ~~decrease~~increase in parts sales revenues. Gross profit margin for the three month period ended ~~September~~June 30, ~~2016~~2017 was ~~27.9%~~27.2%, ~~an increase~~a decrease of approximately 0.7% from ~~27.2%~~27.9% in the same three month period in ~~2015, as a result of~~2016, resulting from the mix of parts sold.

Services Revenues Gross Profit. For the three month period ended ~~September~~June 30, ~~2016,~~2017, our services revenues gross profit decreased ~~$0.5~~approximately $0.3 million, or ~~4.6%~~3.1%, to approximately $10.6 million from ~~$11.1~~$10.9 million for the same three month period in ~~2015~~2016 on a ~~$0.7~~$1.0 million decrease in services revenues. Gross profit margin for the three month period ended ~~September~~June 30, ~~2016~~2017 was approximately ~~66.1%~~66.7%, ~~a decrease~~an increase of ~~0.5%~~2.0% from ~~66.6%~~64.7% in the same three month period in ~~2015,~~2016, as a result of services revenues mix.

Non-Segmented Other Revenues Gross Profit. Our non-segmented other revenues gross profit ~~decreased $0.2~~increased $0.3 million, or ~~34.1%~~315.7%, to ~~approximately $0.3~~$0.4 million for the three month period ended ~~September~~June 30, ~~2016~~2017 compared to a gross profit of ~~$0.5~~$0.1 million for the same period in ~~2015~~2016 on a ~~$0.1~~$1.1 million ~~decrease~~increase in non-segmented other revenues. Gross margin for the three month period ended ~~September~~June 30, ~~2016~~2017 was ~~2.0%~~2.4% compared to a gross margin of ~~3.1%~~0.6% in the same three month period last year, ~~a decrease~~an increase of ~~1.1%~~1.8%, primarily reflective of ~~higher~~improved margins on hauling ~~costs~~revenues in the current period.

Selling, General and Administrative Expenses (“SG&A”). SG&A expenses increased ~~$1.3~~$2.8 million, or approximately ~~2.3%~~4.8%, to ~~$56.0~~$59.8 million for the three month period ended ~~September~~June 30, ~~2016~~2017 compared to ~~$54.7~~$57.0 million for the three month period ended ~~September~~June 30, ~~2015.~~2016. The net increase in SG&A expenses was attributable to several ~~factors.~~factors, principal among which was $2.2 million of merger and acquisition transaction costs related to our proposed merger with Neff Corporation (see note 11 to the condensed consolidated financial statements in the Quarterly Report on Form 10-Q for further information) incurred in the three month period ended June 30, 2017, recognized pursuant to Accounting Standards Codification 805, Business Combinations, which requires certain acquisition-related costs to be expensed when incurred. Net of these transaction costs, legal and other professional services decreased $0.5 million. Employee salaries, wages, payroll taxes and related employee benefit expenses increased approximately ~~$0.5~~$1.5 million and other employee costs for employee education and travel increased $0.3 million. Facility costs increased $0.6 million, comprised primarily of additional rent expense related to new branches opened since the third quarter of last year. Legal and other professional services increased $0.6 million and non-payroll taxes, primarily property taxes, increased approximately $0.7 million. Promotional expenses increased ~~$0.2~~$0.3 million. Depreciation and amortization expense decreased $1.0 million, ~~and depreciation expense increased $0.2 million. Partially offsetting these increases were decreases in liability insurance costs~~largely as a result of ~~$0.5 million and $0.3 million in bad debt~~lower software amortization expense. ~~Employee education, training and related travel costs decreased $0.7 million.~~ Of the ~~$1.3~~$2.8 million increase in SG&A expenses, approximately ~~$1.2~~$0.8 million was attributable to branches opened since ~~July~~April 1, ~~2015~~2016 with less than three full months of comparable operations in the ~~third~~second quarters of ~~2015~~2016 and ~~2016.~~2017. As a percentage of total revenues, SG&A expenses were ~~22.9%~~24.0% for the three month period ended ~~September~~June 30, ~~2016,~~2017, an increase of ~~3.1%~~0.4% from ~~19.8%~~23.6% for the same three month period in ~~2015,~~2016, primarily as a result of the cost increases noted above.

Other Income (Expense). For the three month period ended ~~September~~June 30, ~~2016,~~2017, our net other expenses increased ~~$0.1~~approximately $0.3 million to ~~$13.1~~$13.0 million compared to ~~$13.0~~$12.7 million for the same three month period in ~~2015.~~2016. Interest expense was approximately ~~$13.5~~$13.4 million infor each of the three month periods ended ~~September~~June 30, ~~2016~~2017 and ~~2015.~~2016. Miscellaneous other income was approximately $0.4 million in the three month period ended ~~September~~June 30, ~~2016~~2017 compared to ~~$0.5~~$0.7 million in the same period last year, a decrease of ~~$0.1~~$0.3 million.

Income Taxes. We recorded income tax expense of ~~approximately $8.3~~$5.8 million for the three month period ended ~~September~~June 30, ~~2016~~2017 compared to income tax expense of ~~$10.7~~$5.2 million for the three month period ended ~~September~~June 30, ~~2015.~~2016. Our effective income tax rate was approximately ~~41.7%~~37.0% for the three month period ended ~~September~~June 30, ~~2016~~2017 compared to ~~42.1%~~41.0% for the same three month period last year, a decrease of ~~0.4%~~4.0%. The decrease in our effective tax rate is primarily ~~related~~due to ~~higher~~an increase in favorable permanent differences and lower state income ~~taxes in the prior year period.~~taxes. Based on available evidence, both positive and negative, we believe it is more likely than not that our deferred tax assets at ~~September~~June 30, ~~2016~~2017 are fully realizable through future reversals of existing taxable temporary differences and future taxable income, and are not subject to any limitations.

~~Nine~~Six Months Ended ~~September~~June 30, ~~2016~~2017 Compared to the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2015~~2016

	Nine Months Ended				Total			Total			Six Months Ended				Total			Total
	September 30,				Dollar			Percentage			June 30,				Dollar			Percentage
	2016		2015		Increase (Decrease)			Increase (Decrease)			2017		2016		Increase (Decrease)			Increase (Decrease)
	(in thousands, except percentages)										(in thousands, except percentages)
Segment Revenues:
Equipment rentals	$	330,023	$	328,072	$	1,951			0.6	%	$	225,687	$	211,488	$	14,199			6.7	%
New equipment sales		151,836		175,465		(23,629	)		(13.5	)%		79,943		107,072		(27,129	)		(25.3	)%
Used equipment sales		71,973		83,113		(11,140	)		(13.4	)%		52,969		51,343		1,626			3.2	%
Parts sales		81,958		84,400		(2,442	)		(2.9	)%		53,300		54,623		(1,323	)		(2.4	)%
Services revenues		49,322		47,452		1,870			3.9	%		31,024		33,246		(2,222	)		(6.7	)%
Non-Segmented revenues		48,679		48,121		558			1.2	%		33,268		31,333		1,935			6.2	%
Total revenues	$	733,791	$	766,623	$	(32,832	)		(4.3	)%	$	476,191	$	489,105	$	(12,914	)		(2.6	)%

Total Revenues. Our total revenues were ~~$733.8~~$476.2 million for the ~~nine month period ended September 30, 2016 compared to $766.6 million for the nine~~six month period ended June 30, ~~2015,~~2017 compared to approximately $489.1 million for the six month period ended June 30, 2016, a decrease of ~~$32.8~~$12.9 million, or ~~4.3%~~2.6%. Revenues for all reportable segments are further discussed below.

Equipment Rental Revenues. Our revenues from equipment rentals for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 increased ~~approximately $1.9~~$14.2 million, or ~~0.6%~~6.7%, to ~~$330.0~~$225.7 million from ~~$328.1~~$211.5 million in the ~~nine~~six month period ended ~~September~~June 30, ~~2015.~~2016. Rental ~~revenues from earthmoving equipment increased $2.6 million and other equipment rental revenues increased $2.2 million. Additionally, rental~~ revenues from aerial work platform equipment ~~and lift trucks~~ increased ~~$1.7~~$12.3 million and ~~$0.5 million, respectively.~~earthmoving equipment rental revenues increased $4.4 million. Other equipment rental revenues increased $0.3 million. Partially offsetting these rental revenue increases ~~was~~were a ~~$5.0~~$2.7 million decrease in crane rental revenues and a $0.1 million decrease in lift truck rental revenues. Our average rental rates for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 decreased approximately ~~0.4%~~0.1% compared to the same ~~nine~~six month period last year.

Rental equipment dollar utilization (annual rental revenues divided by the average original rental fleet equipment costs) for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 was ~~33.9%~~33.7% compared to ~~34.3%~~33.1% in the ~~nine~~six month period ended ~~September~~June 30, ~~2015, a decrease~~2016, an increase of ~~0.4%~~0.6%. The ~~decrease~~increase in comparative rental equipment dollar utilization was the net result of ~~a decrease~~an increase in rental equipment time utilization ~~combined with~~and a ~~0.4%~~slight 0.1% decline in average rental rates. Rental equipment time utilization as a percentage of original equipment cost was ~~69.5%~~70.4% for the ~~nine~~six month period ended ~~September~~June 30, 2016 compared to approximately ~~70.5%~~68.2% in the same ~~nine~~six month period a year ago, ~~a decrease~~an increase of ~~1.0%~~2.2%. The ~~decrease~~increase in equipment rental time utilization based on original equipment cost is largely reflective of ~~multiple significant rain~~increased demand for rental equipment combined with the prior year first quarter negative impact on earthmoving equipment rental activity from heavy rains and associated flooding ~~events~~ in ~~the Company’s~~our Louisiana, Texas and Arkansas ~~markets during the current year period combined with lower utilization in the Company’s oil and gas~~ markets. Rental equipment time utilization based on the number of rental equipment units available for rent was ~~66.8%~~68.0% for the ~~nine~~six month period ended ~~September~~June 30, ~~2016,~~2017, compared to approximately ~~67.4%~~66.1% in the same period last year, ~~a decrease~~an increase of ~~0.6%~~1.9%.

New Equipment Sales Revenues. Our new equipment sales for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 decreased ~~$23.6~~approximately $27.1 million, or ~~13.5%~~25.3%, to ~~$151.8~~$79.9 million from ~~$175.5~~$107.1 million for the ~~nine~~six month period ended ~~September~~June 30, ~~2015,~~2016, largely driven by a ~~$34.1~~$16.1 million decrease in new earthmoving equipment sales and a $13.6 million decrease in new crane sales. The decrease in new earthmoving equipment sales is largely a result of higher earthmoving equipment sales in the prior year period resulting from certain manufacturer incentives. The decrease in new crane sales is due primarily to decreased demand for new cranes among the Company’s customers operating in the ~~Company’s~~ oil and ~~gas markets. Also, sales~~gas-centric markets that the Company serves. Sales of new ~~other equipment~~lift trucks decreased ~~by $4.8~~$0.7 million. Partially offsetting these new equipment sales decreases were a ~~$13.5~~$3.0 million increase in sales of new ~~earthmoving~~other equipment and ~~increases~~a $0.1 million increase in sales of new ~~lift trucks and new~~ aerial work platform ~~equipment of $1.1 million and $0.6 million, respectively.~~equipment.

Used Equipment Sales Revenues. Our used equipment sales ~~decreased $11.1~~increased approximately $1.6 million, or ~~13.4%~~3.2%, to ~~approximately $72.0~~$53.0 million for the ~~nine~~six month period ended ~~September~~June 30, ~~2016,~~2017 from ~~$83.1~~approximately $51.3 million for the same ~~nine~~six month period in ~~2015.~~2016. Sales of used ~~cranes decreased $7.6~~earthmoving equipment increased $3.2 million, while sales of used ~~aerial work platform equipment~~lift trucks and used ~~other equipment decreased $2.9~~cranes increased $0.6 million and ~~$1.0~~$0.4 million, respectively. Partially offsetting these used equipment sales ~~decreases were~~ increases ~~in used lift truck sales and used earthmoving equipment sales of $0.3~~was a $2.6 million ~~and $0.1 million, respectively. The overall~~ decrease in used aerial work platform equipment ~~sales is largely due to a decrease in sales of used equipment from the Company’s rental fleet in the current year period compared to last year.~~sales.

Parts Sales Revenues. Our parts sales decreased ~~$2.4~~$1.3 million, or ~~2.9%~~2.4%, to ~~$82.0~~$53.3 million for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 from ~~$84.4~~$54.6 million for the same ~~nine~~six month period in ~~2015.~~2016. The decrease in parts revenues was driven primarily by lower crane ~~and earthmoving equipment~~ parts sales revenues.

Services Revenues. Our services revenues for the ~~nine~~six month period ended ~~September~~June 30, ~~2016 increased $1.9~~2017 decreased $2.2 million, or ~~3.9%~~6.7%, to ~~$49.3~~$31.0 million from ~~approximately $47.5~~$33.2 million for the same ~~nine~~six month period last year. The ~~increase~~decrease in services revenues was due to ~~higher demand for~~lower crane services ~~in the first~~revenues and ~~second quarters of the current year.~~lower other equipment services revenues.

Non-Segmented Other Revenues. Our non-segmented other revenues consisted primarily of equipment support activities including transportation, hauling, parts freight and damage waiver charges. For the ~~nine~~six month period ended ~~September~~June 30, ~~2016,~~2017, our other revenues were ~~$48.7~~$33.3 million, an increase of approximately ~~$0.6~~$1.9 million, or ~~1.2%~~6.2%, from ~~$48.1~~$31.3 million in the same ~~nine~~six month period in ~~2015.~~2016. The increase was primarily due to an increase in hauling revenues and damage waiver income ~~and hauling revenues.~~associated with our equipment rental activity.

	Nine Months Ended				Total			Total			Six Months Ended					Total			Total
	September 30,				Dollar			Percentage			June 30,					Dollar			Percentage
	2016		2015		Increase (Decrease)			Increase (Decrease)			2017			2016		Increase (Decrease)			Increase (Decrease)
	(in thousands, except percentages)										(in thousands, except percentages)
Segment Gross Profit:
Equipment rentals	$	156,161	$	154,429	$	1,732			1.1	%	$	104,410		$	97,532	$	6,878			7.1	%
New equipment sales		16,684		19,397		(2,713	)		(14.0	)%		9,112			12,067		(2,955	)		(24.5	)%
Used equipment sales		22,222		26,352		(4,130	)		(15.7	)%		16,106			15,956		150			0.9	%
Parts sales		22,774		23,176		(402	)		(1.7	)%		14,729			15,147		(418	)		(2.8	)%
Services revenues		32,586		31,435		1,151			3.7	%		20,693			21,955		(1,262	)		(5.7	)%
Non-Segmented revenues		550		792		(242	)		(30.6	)%
Non-Segmented revenues gross profit (loss)												(38	)		195		(233	)		(119.5	)%
Total gross profit	$	250,977	$	255,581	$	(4,604	)		(1.8	)%	$	165,012		$	162,852	$	2,160			1.3	%

Total Gross Profit. Our total gross profit was approximately ~~$251.0~~$165.0 million for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 compared to ~~$255.6~~approximately $162.8 million for the same ~~nine~~six month period in ~~2015, a decrease~~2016, an increase of ~~$4.6~~approximately $2.2 million, or ~~1.8%~~1.3%. Total gross profit margin for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 was ~~34.2%~~34.7%, an increase of ~~0.9%~~1.4% from the 33.3% gross profit margin for the same ~~nine~~six month period in ~~2015.~~2016. Gross profit and gross margin for all reportable segments and non-segmented other revenues are further described below:

Equipment Rentals Gross Profit. Our gross profit from equipment rentals for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 increased ~~$1.7~~$6.9 million, or ~~1.1%~~7.1%, to ~~approximately $156.2~~$104.4 million from ~~$154.4~~$97.5 million in the same ~~nine~~six month period in ~~2015.~~2016. The increase in equipment rentals gross profit was the net result of a ~~$1.9~~$14.2 million increase in rental revenues for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 and a ~~$0.4~~$3.8 million ~~decrease~~increase in rental expenses and a $3.6 million increase in rental equipment depreciation expense. The increase in rental expenses is primarily due to higher repair costs and increased property taxes resulting from a larger rental fleet size. The increase in rental equipment depreciation expense ~~which was partially offset by~~is largely due also to a ~~$0.6 million increase in~~larger rental ~~expenses.~~fleet size. Gross profit margin on equipment rentals for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 was approximately ~~47.3%~~46.3% compared to ~~47.1%~~46.1% for the same period in ~~2015,~~2016, an increase of 0.2%. Depreciation expense was ~~36.6%~~36.7% of equipment rental revenues for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 compared to ~~36.9%~~37.4% for the same period in ~~2015,~~2016, a decrease of ~~0.3%, primarily as a result of rental fleet mix.~~0.7%. As a percentage of equipment rental revenues, rental expenses were ~~16.1%~~approximately 17.1% for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 compared to ~~16.0%~~16.4% for the same period last year, an increase of ~~0.1%~~0.7%.

New Equipment Sales Gross Profit. Our new equipment sales gross profit for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 decreased ~~$2.7~~$3.0 million, or ~~14.0%~~24.5%, to ~~$16.7~~$9.1 million compared to approximately ~~$19.4~~$12.1 million for the same ~~nine~~six month period in ~~2015~~2016 on a total new equipment sales decrease of ~~$23.6~~$27.1 million. Gross profit margin on new equipment sales for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 was ~~11.0%~~11.4%, ~~a decrease~~an increase of 0.1% from ~~11.1%~~11.3% in the same ~~nine~~six month period in ~~2015.~~2016.

Used Equipment Sales Gross Profit. Our used equipment sales gross profit for the ~~nine~~six month period ended ~~September~~June 30, ~~2016 decreased $4.1~~2017 increased approximately $0.1 million, or ~~15.7%~~0.9%, to ~~$22.2~~approximately $16.1 million from ~~approximately $26.4~~$16.0 million in the same period in ~~2015~~2016 on a used equipment sales ~~decrease~~increase of ~~$11.1~~$1.6 million. Gross profit margin on used equipment sales for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 was ~~30.9%~~30.4%, down ~~0.8%~~0.7% from ~~31.7%~~31.1% for the same ~~nine~~six month period in ~~2015,~~2016, primarily as a result of the mix of used equipment ~~sold.~~sold and lower used aerial work platform equipment margins. Our used equipment sales from the rental fleet, which comprised approximately ~~86.5%~~86.9% and ~~82.0%~~86.7% of our used equipment sales for the ~~nine~~six month periods ended ~~September~~June 30, ~~2016~~2017 and ~~2015,~~2016, respectively, were approximately ~~152.6%~~150.1% and ~~157.8%~~153.3% of net book value for the ~~nine~~six month periods ended ~~September~~June 30, ~~2016~~2017 and ~~2015,~~2016, respectively.

Parts Sales Gross Profit. For the ~~nine~~six month period ended ~~September~~June 30, ~~2016,~~2017, our parts sales revenue gross profit decreased $0.4 million, or ~~1.7%~~2.8%, to ~~$22.8~~$14.7 million from ~~$23.2~~$15.1 million during the same ~~nine~~six month period in ~~2015~~2016 on a ~~$2.4~~$1.3 million decrease in parts sales

revenues. Gross profit margin for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 was ~~27.8%~~27.6%, ~~an increase~~a decrease of ~~0.3%~~0.1% from ~~27.5%~~27.7% in the same ~~nine~~six month period in ~~2015, as a result of the mix of parts sold.~~2016.

Services Revenues Gross Profit. For the ~~nine~~six month period ended ~~September~~June 30, ~~2016,~~2017, our services revenues gross profit ~~increased $1.2~~decreased $1.3 million, or ~~3.7%~~5.7%, to ~~$32.6~~$20.7 million from ~~$31.4~~$22.0 million for the same ~~nine~~six month period in ~~2015~~2016 on a ~~$1.9~~$2.2 million ~~increase~~decrease in services revenues. Gross profit margin for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 was ~~66.1%~~66.7% for the six month period ended June 30, 2017 compared to 66.0% in the same six month period last ~~year.~~year, an increase of 0.7% due to services revenues mix.

Non-Segmented Other Revenues Gross Profit. Our non-segmented other revenues gross profit decreased approximately $0.2 million, or ~~30.6%~~119.5%, to a gross ~~profit~~loss of ~~$0.6 million~~$38,000 for the ~~nine~~six month period ended June 30, ~~2016,~~2017, compared to ~~$0.8~~$0.2 million in gross profit for the same period in ~~2015,~~2016, on a ~~$0.6~~$1.9 million increase in non-segmented other revenues. Gross margin for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 was ~~1.1%~~-0.1% compared to a gross margin of ~~1.6%~~0.6% in the same ~~nine~~six month period last year, a decrease of ~~0.5%~~0.7%, primarily reflective of lower margins on hauling revenues and damage waiver income, compared to last year.

Selling, General and Administrative Expenses. SG&A expenses increased approximately ~~$9.8~~$0.7 million, or ~~6.0%~~0.6%, to ~~$172.4~~$117.1 million for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 compared to ~~$162.6~~$116.4 million for the ~~nine~~six month period ended ~~September~~June 30, ~~2015.~~2016. The net increase in SG&A expenses was attributable to several factors. Employee salaries, wages, payroll taxes and related employee benefit expenses increased approximately ~~$4.6~~$0.7 million. Legal and other professional fees increased $1.9 million, ~~primarily as a result~~inclusive of ~~a larger workforce compared~~$2.2 million in transaction related costs associated with merger and acquisition activity in connection with our proposed merger with Neff Corporation (see note 11 to the ~~same period last year and higher employer health insurance costs.~~condensed consolidated financial statements in this Quarterly Report on Form 10-Q for further information). Facility costs increased ~~$2.4~~$0.6 million, comprised primarily of additional rent expense related to new branches opened since the second quarter of last year. Legal and other professional services increased $1.5 million and depreciation expense increased $0.8 million. Bad debt expense increased $0.2 million and non-payroll taxes (primarily property taxes) increased $1.0 million. Software related costs increased $0.4 million. Partially offsettingOffsetting these increases ~~was~~in SG&A expenses were a ~~$1.2~~$2.0 million decrease in ~~employee education, training~~depreciation and ~~related travel~~amortization expense due to lower software amortization costs. General liability insurance costs decreased $0.5 million. Of the ~~$9.8~~$0.7 million net increase in SG&A expenses, approximately ~~$5.3~~$1.3 million was incrementally attributable to branches opened since January 1, ~~2015~~2016 with less than ~~nine~~six full months of comparable operations in the first ~~three~~two quarters of ~~2015~~2016 and ~~2016.~~2017. As a percentage of total revenues, SG&A expenses were ~~23.4%~~24.6% for the ~~nine~~six month period ended ~~September~~June 30, ~~2016,~~2017, an increase of ~~2.2%~~0.8% from ~~21.2%~~23.8% for the same ~~nine~~six month period in ~~2015,~~2016, primarily as a result of the cost increases as noted above.

Other Income (Expense). For the ~~nine~~six month period ended ~~September~~June 30, ~~2016,~~2017, our net other expenses ~~decreased $0.9~~increased $0.2 million to ~~$38.7~~$25.8 million, compared to ~~$39.6~~$25.6 million for the same ~~nine~~six month period in ~~2015.~~2016. Interest expense was ~~$40.2~~approximately $26.6 million for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 compared to ~~$40.7~~approximately $26.8 million for the ~~nine~~six month period ended ~~September~~June 30, ~~2015,~~2016, a decrease of ~~approximately $0.4~~$0.2 million. The decrease in interest expense is due to lower average ~~borrowings under the Company’s Senior Secured Credit Facility and lower average~~ amounts outstanding on manufacturer flooring plans ~~payable during the current year period compared to last year.~~payable. Miscellaneous other income was ~~$1.5~~$0.8 million in the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 compared to $1.1 million in the same period last year, ~~an increase~~a decrease of ~~$0.4~~$0.3 million.

Income Taxes. We recorded income tax expense of ~~$17.4~~$8.9 million for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 compared to income tax expense of ~~$22.8~~$9.1 million for the ~~nine~~six month period ended ~~September~~June 30, ~~2015.~~2016. Our effective income tax rate was ~~41.3%~~36.9% for the ~~nine~~six month period ended ~~September~~June 30, 2016 compared to ~~41.4%~~41.0% for the same ~~nine~~six month period last year, a decrease of ~~0.1%~~4.1%. The decrease in our effective tax rate is primarily due to an increase in favorable permanent differences and lower state income taxes. Based on available evidence, both positive and negative, we believe it is more likely than not that our deferred tax assets at ~~September~~June 30, ~~2016~~2017 are fully realizable through future reversals of existing taxable temporary differences and future taxable income, and are not subject to any limitations.

Cash flow from operating activities. For the ~~nine~~six month period ended ~~September~~June 30, ~~2016,~~2017, the net cash provided by our operating activities was ~~$109.4~~$92.7 million. Our reported net income of ~~$24.7~~$15.3 million, when adjusted for non-cash income and expense items, such as depreciation and amortization, deferred income taxes, net amortization (accretion) of note discount (premium), provision for losses on accounts receivable, provision for inventory obsolescence, stock-based compensation expense and net gains on the sale of long-lived assets, provided positive cash flows of approximately ~~$165.2~~$107.1 million. These cash flows from operating activities were also positively impacted by a ~~$5.8~~$41.6 million ~~decrease~~increase in ~~receivables~~accounts payable and a ~~$1.2~~$3.7 million ~~decrease~~increase in ~~prepaid~~accrued expenses payable and other ~~assets.~~liabilities. Partially offsetting these positive cash flows were a ~~$24.2~~$49.6 million increase in inventories and a $5.0 million decrease in manufacturing flooring plans payable, while prepaid expenses and ~~an $18.5 million decrease in accounts payable. Also, inventories~~other assets increased ~~$15.2~~$1.9 million and ~~accrued expenses payable and other liabilities decreased $4.4 million. Deferred compensation payable decreased $0.3~~receivables increased approximately $3.3 million.

For the ~~nine~~six month period ended ~~September~~June 30, ~~2015,~~2016, the net cash provided by our operating activities was ~~$121.1~~$67.6 million. Our reported net income of ~~$32.3~~$13.1 million, ~~which,~~ when adjusted for non-cash income and expense items, such as depreciation and amortization, deferred income taxes, net amortization (accretion) of note discount (premium), provision for losses on accounts receivable, provision for inventory obsolescence, stock-based compensation expense and net gains on the sale of long-lived assets, provided positive cash flows of ~~$172.7~~approximately $102.4 million. These cash flows from operating activities were also positively impacted by a ~~$15.3~~$22.3 million ~~decrease in receivables and a $0.6 million~~ increase ~~and a $0.1 million increase~~

in accounts payable and ~~deferred compensation~~a $7.1 million decrease in receivables. Additionally, accrued expenses payable ~~respectively.~~and other liabilities increased $4.6 million and prepaid expenses and other assets decreased $0.5 million. Partially offsetting these positive cash flows were ~~an $18.7~~a $52.5 million increase in inventories and a ~~$33.7~~$16.5 million

decrease in manufacturing flooring plans ~~payable. Also decreasing our operating cash flows were a $11.5 million decrease in accrued expenses~~ payable, ~~and other liabilities and a $3.7 million increase in prepaid expenses~~.while deferred compensation payable decreased approximately $0.4 million.

Cash flow from investing activities. For the ~~nine~~six month period ended ~~September~~June 30, 2017, the cash provided by our investing activities was exceeded by cash used in our investing activities, resulting in net cash used in our investing activities of $75.9 million. This was a result of purchases of rental and non-rental equipment totaling $125.1 million and proceeds from the sale of rental and non-rental equipment of approximately $49.2 million.

For the six month period ended June 30, 2016, the cash provided by our investing activities was exceeded by cash used in our investing activities, resulting in net cash used in our investing activities of ~~approximately $104.4~~$34.4 million. This was a result of purchases of rental and non-rental equipment totaling ~~$169.4~~$80.6 million and proceeds from the sale of rental and non-rental equipment of approximately ~~$64.9 million.~~

For the nine month period ended September 30, 2015, cash provided by our investing activities was exceeded by cash used in our investing activities, resulting in net cash used in our investing activities of $88.7 million. This was a result of purchases of rental and non-rental equipment totaling $159.5 million, which was partially offset by proceeds from the sale of rental and non-rental equipment of approximately $70.8$46.2 million.

Cash flow from financing activities. For the ~~nine~~six month period ended ~~September~~June 30, 2017, the cash provided by our financing activities was exceeded by our cash used in our financing activities, resulting in net cash used in our financing activities of approximately $17.5 million. Dividends totaling approximately $19.6 million, or $0.55 per common share, were paid during the six month period ended June 30, 2017. Payments on capital lease obligations were $0.1 million. Net borrowings under the Credit Facility were $2.2 million.

For the six month period ended June 30, 2016, the cash provided by our financing activities was exceeded by our cash used in our financing activities, resulting in net cash used in our financing activities of approximately $5.1 million. Dividends totaling approximately $29.3 million, or $0.825 per common share, were paid during the nine month period ended September 30, 2016. Payments on capital lease obligations were $0.2 million and we purchased treasury stock totaling approximately $0.5 million. Partially offsetting these uses of cash were net borrowings under the Credit Facility of $24.9 million.

For the nine month period ended September 30, 2015, cash provided by our financing activities was exceeded by our cash used in our financing activities, resulting in net cash used in our financing activities of $39.0$30.0 million. Net payments under the Credit Facility were ~~$10.3~~$10.4 million. ~~Deferred financing costs paid totaled $0.7 million and dividends~~Dividends totaling ~~$27.4~~approximately $19.5 million, or ~~$0.775~~$0.55 per common share, were paid during the ~~nine~~six month period ended ~~September~~June 30, ~~2015. Purchases of treasury stock were approximately $0.5 million and payments of~~2016. Payments on capital lease obligations were $0.1 million.

We and our subsidiaries are parties to a $602.5 million senior secured credit facility (the “Credit Facility”) with Wells Fargo Capital Finance, LLC (“Wells Fargo”), agent (as successor in such capacity to General Electric Capital Corporation (“GE Capital”)) , and the lenders named therein (the “Lenders”).

On February 5, 2015, we entered into an amendment to the Credit Facility which, among other things, increased the total amount of revolving loan commitments under the Amended and Restated Credit Agreement from $402.5 million to $602.5 million.

At ~~September~~June 30, ~~2016,~~2017, the interest rate on the Credit Facility was based on either a ~~3.50%~~4.00% U.S. Prime Rate plus 100 basis points or LIBOR plus 200 basis points, as applicable with respect to the type of revolving loan. The weighted average interest rate at ~~September~~June 30, ~~2016~~2017 was approximately ~~2.7%~~3.5%. At ~~October 21, 2016,~~July 20, 2017, we had ~~$391.6~~$424.4 million of available borrowings under our Credit Facility, net of $7.7 million of outstanding letters of credit.

Our principal sources of liquidity have been from cash provided by operating activities and the sales of new, used and rental fleet equipment, proceeds from the issuance of debt, and borrowings available under the Credit Facility. Our principal uses of cash have been to fund operating activities and working capital (including new and used equipment inventories), purchases of rental fleet equipment and property and equipment, fund payments due under facility operating leases and manufacturer flooring plans payable, and to meet debt service requirements. In the future, we may pursue additional strategic acquisitions, such as our proposed merger with Neff Corporation, and seek to open new start-up locations. We anticipate that the above described uses will be the principal demands on our cash in the future.

The amount of our future capital expenditures will depend on a number of factors including general economic conditions and growth prospects. Our gross rental fleet capital expenditures for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 were approximately ~~$190.6~~$122.0 million, including ~~approximately $38.0~~$9.0 million of non-cash transfers from new and used equipment to rental fleet inventory. Our gross property and equipment capital expenditures for the ~~nine~~six month period ended ~~September~~June 30, ~~2016~~2017 were ~~$16.8~~$12.1 million. In response to changing economic conditions, we believe we have the flexibility to modify our capital expenditures by adjusting them (either up or down) to match our actual performance.

To service our debt, we will require a significant amount of cash. Our ability to pay interest and principal on our indebtedness (including the ~~Notes,~~Credit Facility, the ~~Credit Facility~~Senior Notes and our other indebtedness), will depend upon our future operating performance and the availability of borrowings under the Credit Facility and/or other debt and equity financing alternatives available to us, which will be affected by prevailing economic conditions and conditions in the global credit and capital markets, as well as financial, business and other factors, some of which are beyond our control. Based on our current level of operations and given the current state of the capital markets, we believe our cash flow from operations, available cash and available borrowings under the Credit Facility will be adequate to meet our future liquidity needs for the foreseeable future. As of ~~October 21, 2016,~~July 20, 2017, we had ~~$391.6~~$424.4 million of available borrowings under the Credit Facility, net of $7.7 million of outstanding letters of credit.

We cannot provide absolute assurance that our future cash flow from operating activities will be sufficient to meet our long-term obligations and commitments. If we are unable to generate sufficient cash flow from operating activities in the future to service our indebtedness and to meet our other commitments, we will be required to adopt one or more alternatives, such as refinancing or restructuring our indebtedness, selling material assets or operations or seeking to raise additional debt or equity capital. ~~Given current economic and market conditions, including the significant disruptions in the global capital markets, we~~We cannot assure investors that any of these actions could be effected on a timely basis or on satisfactory terms or at all, or that these actions would enable us to continue to satisfy our capital requirements. In addition, our existing debt agreements, including the Credit Facility and the indenture governing the Senior Notes, as well as any future debt agreements, including the proposed financing for our proposed merger with Neff Corporation, contain or may contain restrictive covenants, which may prohibit us from adopting any of these alternatives. Our failure to comply with these covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all of our debt.

On July 14, 2017, the Company, the Company’s newly-formed, wholly-owned subsidiary Yellow Iron Merger Co. and Neff Corporation (“Neff”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) under which, and upon the terms and subject to the conditions of, the Company will acquire Neff. Under the terms of the Merger Agreement, at the effective time of the merger the Company will pay $21.07 in cash per share of Neff’s Class A common stock (subject to the adjustment described in the subsequent sentence) (the “Merger Consideration”), for a total enterprise value of approximately $1.2 billion, including $690 million of net debt (debt less cash and cash equivalents). The per share merger consideration payable to Neff stockholders is subject to certain downward adjustment, not to exceed $0.44 per share, in the event that the Company incurs certain increased financing costs due to the transaction not being consummated on or prior to January 14, 2018. In addition, each outstanding, unvested stock option and restricted stock unit in respect of Neff’s Class A common stock will be converted into the right to receive Company common stock on substantially similar terms, while each outstanding, vested stock option and restricted stock unit will be entitled to receive an amount in cash based upon the Merger Consideration. In connection with entering into the Merger Agreement, the Company also entered into a support agreement with Neff’s largest stockholders, Wayzata Opportunities Fund II, L.P. and Wayzata Opportunities Fund Offshore II, L.P. (collectively, “Wayzata”), pursuant to which Wayzata delivered a written consent approving and adopting the Merger Agreement concurrently with the parties execution thereof, as well as exchange and termination agreements with each of Wayzata and the other holders of securities of Neff Holdings, LLC, Neff’s wholly-owned subsidiary, in order to collapse Neff’s holding company structure in advance of the consummation of the proposed merger.

For additional information on this transaction, please see note 11 in this Quarterly Report on Form 10-Q. For additional information on the Merger Agreement, please see our Current Report on Form 8-K, filed with the SEC on July 14, 2017.

On ~~August 10, 2016,~~May 22, 2017, the Company announced a quarterly dividend of $0.275 per share to stockholders of record, which was paid on ~~September 9, 2016,~~June 16, 2017, totaling approximately $9.8 million. The Company intends to continue to pay regular quarterly cash dividends; however, the declaration of any subsequent dividends is discretionary and will be subject to a final determination by the Board of Directors each quarter after its review of, among other things, business and market conditions.

Although we believe our business is not materially impacted by seasonality, the demand for our rental equipment tends to be lower in the winter months. The level of equipment rental activities is directly related to commercial and industrial construction and maintenance activities. Therefore, equipment rental performance will be correlated to the levels of current construction activities. The severity of weather conditions can have a temporary impact on the level of construction activities. Adverse weather has a seasonal impact in parts of the markets we serve, including our Intermountain region, particularly in the winter months.

Equipment sales cycles are also subject to some seasonality with the peak selling period during the spring season and extending through the summer. Parts and services activities are typically less affected by changes in demand caused by seasonality.

There have been no material changes from the information included in our Annual Report on Form 10-K for the year ended December 31, ~~2015.~~2016.

Our earnings may be affected by changes in interest rates since interest expense on the Credit Facility is currently calculated based upon the index rate plus an applicable margin of 1.00% to 1.50%, depending on the leverage ratio, in the case of index rate revolving loans and LIBOR plus an applicable margin of 2.00% to 2.50%, depending on the leverage ratio, in the case of LIBOR revolving loans. At ~~September~~June 30, ~~2016,~~2017, we had total borrowings outstanding under the Credit Facility of approximately ~~$209.8~~$164.9 million. A 1.0% increase in the interest rate on the Credit Facility would result in approximately a ~~$2.1~~$1.7 million increase in interest expense on an annualized basis. At ~~October 21, 2016,~~July 20, 2017, we had ~~$391.6~~$424.4 million of available borrowings under the Credit Facility, net of $7.7 million of outstanding letters of credit. We did not have significant exposure to changing interest rates as of ~~September~~June 30, ~~2016~~2017 on the fixed-rate Senior Notes. Historically, we have not engaged in derivatives or other financial instruments for trading, speculative or hedging purposes, though we may do so from time to time if such instruments are available to us on acceptable terms and prevailing market conditions are accommodating.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or furnishes under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required financial disclosure.

Our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively) have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a‑15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Quarterly Report on Form 10‑Q. Based on this evaluation, our principal executive officer and principal financial officer have concluded that, as of ~~September~~June 30, 2016, our current disclosure controls and procedures were effective.

The design of any system of control is based upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated objectives under all future events, no matter how remote, or that the degree of compliance with the policies or procedures may not deteriorate. Because of its inherent limitations, disclosure controls and procedures may not prevent or detect all misstatements. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

There were no changes in the Company’s internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) that occurred during the quarter ended ~~September~~June 30, ~~2016~~2017 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

From time to time, we are involved in various claims and legal actions arising in the ordinary course of our business. In the opinion of management, after consultation with legal counsel, the ultimate disposition of these various matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, Item 1A - “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, ~~2015,~~2016, which could materially affect our business, financial condition or future results.

As of the date of this Quarterly Report on Form 10-Q, there have been no material changes with respect to the Company’s risk factors previously disclosed on Form 10-K for the year ended December 31, ~~2015.~~2016, except as described below with respect to our pending acquisition of Neff Corporation (the “Neff Acquisition”).

The Neff Acquisition is subject to closing conditions, including certain conditions that may not be satisfied, and it may not be completed on a timely basis, or at all. Failure to complete the Neff Acquisition could have material and adverse effects on our business and financial condition.

On July 14, 2017, we entered into the Merger Agreement in connection with the Neff Acquisition. The completion of the Neff Acquisition is subject to a number of conditions, including the receipt of anti-trust clearance under the Hart-Scott-Rodino Act, which make both the completion and the timing of completion of the Neff Acquisition uncertain. Also, either we or Neff may terminate the Merger Agreement if the Neff Acquisition has not been completed by the termination date (subject to extension under certain circumstances), unless the failure of the Neff Acquisition to be completed has resulted from the failure of the party seeking to terminate the Merger Agreement to perform its obligations. The Merger Agreement may also be terminated by us if there is an event or circumstance having a material adverse effect on the business of Neff and its subsidiaries or, under circumstances by us or Neff in the event a competitive proposal is received by Neff that the Neff board determines to be superior. The Merger Agreement provides for a 37 day “go-shop” period, which expires on August 20, 2017, during which Neff is entitled to solicit other offers.

If the Neff Acquisition is not completed on a timely basis, or at all, our ongoing business and financial condition may be adversely affected. Additionally, in the event the Neff Acquisition is not completed, we will be subject to a number of risks without realizing any of the benefits of having completed the Neff Acquisition, including the following:

The Neff Acquisition is subject to the receipt of consents and clearances from regulatory authorities that may impose conditions that could have an adverse effect on us, Neff or the combined company following the Neff Acquisition or, if not obtained, could prevent the completion of the Neff Acquisition.

Before the Neff Acquisition may be completed, applicable waiting periods must expire or terminate under antitrust and competition laws and clearances or approvals must be obtained from various regulatory entities. In deciding whether to grant antitrust or regulatory clearances, the relevant governmental entities will consider the effect of the Neff Acquisition on competition within their relevant jurisdiction. The terms and conditions of the approvals that are granted may impose requirements, limitations or costs or place restrictions on the conduct of the combined company’s business. Despite the parties’ commitments to use their reasonable best efforts to comply with conditions imposed by regulatory entities, under the terms of the Merger Agreement, we will have no obligation to (i) litigate or contest any administrative or judicial action or proceeding or any decree, judgment, injunction or other order, whether temporary, preliminary or permanent; and (ii) make proposals, execute or carry out agreements, enter into consent decrees or submit to orders providing for the sale, divestiture, license or other disposition or holding separate of any of our assets or the imposition of any limitation or regulation on our ability to freely conduct our business or own such assets. In addition we will not be required under the

Merger Agreement to agree to hold separate any of our company, the surviving corporation or any limitation or regulation on our ability to exercise full rights of ownership of the Company or the surviving corporation from the Neff Acquisition.

There can be no assurance that regulators will not impose conditions, terms, obligations or restrictions to the consummation of the Neff Acquisition and that such conditions, terms, obligations or restrictions will not have the effect of delaying the completion of the Neff Acquisition, imposing additional material costs on or materially limiting the revenues of the combined company following the Neff Acquisition or otherwise reduce the anticipated benefits of the Neff Acquisition if the Neff Acquisition were consummated successfully within the expected timeframe. In addition, we cannot provide assurance that any such conditions, terms, obligations or restrictions will not result in the delay or abandonment of the Neff Acquisition. Additionally, the completion of the Neff Acquisition is conditioned on the absence of certain restraining orders or injunctions by judgment, court order or law that would prohibit the completion of the Neff Acquisition.

Uncertainty regarding the completion of the Neff Acquisition may cause Neff’s customers and clients to terminate or not otherwise renew their relationship with Neff and may cause potential Neff customers or clients to delay or defer decisions concerning Neff and may adversely affect Neff’s ability to attract and retain key employees.

The Neff Acquisition will happen only if stated conditions are met, including, among others, the receipt of anti-trust clearance under the Hart-Scott-Rodino Act. Many of the conditions are beyond our control. In addition, both we and Neff have rights to terminate the Merger Agreement under various circumstances. As a result, there may be uncertainty regarding the completion of the Neff Acquisition. This uncertainty, along with potential Neff customer and client uncertainty regarding how the Neff Acquisition could affect the services offered by Neff, may cause Neff’s customers and clients to terminate or not otherwise renew their relationship with Neff and may cause potential Neff customers or clients to delay or defer decisions concerning entering into a relationship with Neff, which could negatively impact revenues and earnings of Neff. Similarly, uncertainty regarding the completion of the Neff Acquisition may foster uncertainty among Neff employees about their future roles. This may adversely affect the ability of Neff to attract and retain key management sales, marketing, and other important personnel, which could have an adverse effect on Neff’s ability to generate revenues at anticipated levels prior or subsequent to the consummation of the Neff Acquisition.

We may not be able to successfully integrate Neff or to realize the anticipated benefits of the Neff Acquisition.

Assuming we are able to consummate the Neff Acquisition, will begin the process of integrating Neff. A successful integration of Neff with our business will depend substantially on our ability to consolidate operations, corporate cultures, systems and procedures and to eliminate redundancies and costs. We may not be able to combine our business with the business of Neff without encountering difficulties, such as:

Additionally, general market and economic conditions or governmental actions generally may inhibit our successful integration of Neff.

Further, we will acquire Neff with the expectation that this acquisition will result in various benefits including, among other things, benefits relating to enhanced revenues, a strengthened market position for the combined company, cross selling opportunities, technological efficiencies, cost savings and operating efficiencies. Achieving the anticipated benefits of this acquisition is subject to a number of uncertainties, including whether we integrate Neff in an efficient and effective manner, and general competitive factors in the marketplace. Failure to achieve these anticipated benefits on the anticipated timeframe, or at all, could result in a reduction in the price of our shares as well as in increased costs, decreases in the amount of expected revenues and diversion of management’s time and energy and could materially and adversely affect our business, financial condition and operating results. Additionally, we will or have made fair value estimates of certain assets and liabilities in recording the Neff Acquisition. Actual values of these assets and liabilities could differ from our estimates, which could result in our not achieving the anticipated benefits of the Neff Acquisition. Finally, any cost savings that are realized may be offset by losses in revenues or other charges to earnings.

Failure to successfully address these and other issues related to the Neff Acquisition could have a material adverse effect on our financial condition and results of operations, and could adversely affect our ability to successfully implement our business strategy. Also, if our growth occurs more slowly than anticipated or declines, our operating results could be materially adversely affected.

Failure to complete the Neff Acquisition could cause our results to be adversely affected, our stock price to decline or have a material and adverse effect on our liquidity and capital resources.

If the Neff Acquisition is not completed for any reason, our stock price may decline because costs incurred related to the Neff Acquisition, such as legal, accounting and financial advisory fees, must be paid even if the merger is not completed. In addition, if the Neff Acquisition is not completed, whether because of our failure to receive required regulatory approvals in a timely fashion or because one of the parties has breached its obligations in a way that permits either us or Neff to terminate the Merger Agreement, or for any other reason, our stock price may decline to the extent that the current market price reflects a market assumption that the merger will be completed.

The incurrence of indebtedness to fund the Neff Acquisition may impact our financial position and subject us to additional financial and operating restrictions.

In connection with the Neff Acquisition, we expect to incur a substantial amount of additional indebtedness, which may result in substantially higher borrowing costs and a shorter maturity date than those from other anticipated financing alternatives. Our ability to make scheduled payments on or refinance our debt obligations depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond our control. Assuming the Neff Acquisition is consummated, the combined company may be unable to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.

The incurrence of indebtedness in connection with the Neff Acquisition will subject us to additional financial and operating covenants, which may limit our flexibility in responding to our business needs. If we are not able to maintain compliance with stated financial covenants or if we breach other covenants in any debt agreement related to any notes we may issue, our revolving credit facility or otherwise, we could be in default under such agreements. Such a default could allow our creditors to accelerate the related indebtedness and may result in the acceleration of any other indebtedness to which a cross-acceleration or cross-default provision applies.

On July 1, 2016, 24,960 shares of non-vested stock that were issued in 2013 vested at $19.12 per share. Certain holders of those vested shares returned an aggregate of 8,011 shares of common stock to the Company during the quarter ended September 30, 2016 as payment for their respective withholding taxes. This resulted in an addition of 8,011 shares to treasury stock.None.

On August 1, 2016, 18,567 shares of non-vested stock that were issued in 2014 vested at $18.28 per share. Certain holders of those vested shares returned an aggregate of 5,897 shares of common stock to the Company during the quarter ended September 30, 2016 as payment for their respective withholding taxes. This resulted in an addition of 5,897 shares to treasury stock.

On August 3, 2016, 50,279 shares of non-vested stock that were issued in 2015 vested at $17.92 per share. Certain holders of those vested shares returned an aggregate of 15,907 shares of common stock to the Company during the quarter ended September 30, 2016 as payment for their respective withholding taxes. This resulted in an addition of 15,907 shares to treasury stock.

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Delaware		81-0553291
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

7500 Pecue Lane,		70809
Baton Rouge, Louisiana		(ZIP Code)
(Address of Principal Executive Offices)

Large Accelerated Filer	☑	Accelerated Filer ☐	~~Accelerated~~Non-Accelerated Filer	☐

~~Non-Accelerated Filer~~	☐		Smaller Reporting Company	☐	Emerging Growth Company ☐

		Page
PART I. FINANCIAL INFORMATION		45

Item 1. Financial Statements:		45
Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2016~~2017 (Unaudited) and December 31, ~~2015~~2016		45
Condensed Consolidated Statements of Income (Unaudited) for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2016~~2017 and ~~2015~~2016		56
Condensed Consolidated Statements of Cash Flows (Unaudited) for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2016~~2017 and ~~2015~~2016		67
Notes to Condensed Consolidated Financial Statements (Unaudited)		89
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		2427
Item 3. Quantitative and Qualitative Disclosures About Market Risk		3741
Item 4. Controls and Procedures		3741

PART II. OTHER INFORMATION		3842

Item 1. Legal Proceedings		3842
Item 1A. Risk Factors		3842
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		3844
Item 3. Defaults upon Senior Securities		3844
Item 4. Mine Safety Disclosures		3844
Item 5. Other Information		3845
Item 6. Exhibits		3845

Signatures		3946

	Deferred Financing Costs			Total Assets			Senior Unsecured Notes			Total Liabilities			Total Liabilities and Stockholders’ Equity
Previously reported	$	4,353		$	1,301,087		$	628,882		$	1,158,499		$	1,301,087
Reclassification of debt issuance costs		(1,576	)		(1,576	)		(1,576	)		(1,576	)		(1,576	)
Current presentation	$	2,777		$	1,299,511		$	627,306		$	1,156,923		$	1,299,511

Balance at December 31, 2014	$	628,714
Accretion of discount through December 31, 2015		1,055
Amortization of note premium through December 31, 2015		(887	)
Reclass of deferred financing costs to debt discount (see footnote 2)		(1,576	)
Balance at December 31, 2015	$	627,306
Accretion of discount through September 30, 2016		791
Amortization of note premium through September 30, 2016		(666	)
Amortization of deferred financing costs through September 30, 2016		178
Balance at September 30, 2016	$	627,609

	Balances at
	September 30, 2016			December 31, 2015
	(Unaudited)
ASSETS
Cash	$	7,034		$	7,159
Receivables, net of allowance for doubtful accounts of $4,027 and $4,729, respectively		138,833			147,328
Inventories, net of reserves for obsolescence of $902 and $934, respectively		73,998			96,818
Prepaid expenses and other assets		8,894			10,054
Rental equipment, net of accumulated depreciation of $424,551 and $390,317, respectively		922,486			893,393
Property and equipment, net of accumulated depreciation and amortization of $116,658 and $107,170, respectively		107,216			110,785
Deferred financing costs, net of accumulated amortization of $11,957 and $11,347, respectively		2,167			2,777
Goodwill		31,197			31,197
Total assets	$	1,291,825		$	1,299,511
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Amounts due on senior secured credit facility	$	209,762		$	184,857
Accounts payable		48,227			66,777
Manufacturer flooring plans payable		38,226			62,433
Accrued expenses payable and other liabilities		51,502			55,551
Dividends payable		56			32
Senior unsecured notes, net of unaccreted discount of $2,391 and $2,694, respectively		627,609			627,306
Capital leases payable		1,756			1,907
Deferred income taxes		173,449			155,886
Deferred compensation payable		1,826			2,174
Total liabilities		1,152,413			1,156,923
Commitments and Contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value, 25,000,000 shares authorized; no shares issued		—			—
Common stock, $0.01 par value, 175,000,000 shares authorized; 39,500,053 and 39,333,571 shares issued at September 30, 2016 and December 31, 2015, respectively, and 35,558,750 and 35,428,868 shares outstanding at September 30, 2016 and December 31, 2015, respectively		394			392
Additional paid-in capital		222,817			220,879
Treasury stock at cost, 3,941,303 and 3,904,703 shares of common stock held at September 30, 2016 and December 31, 2015, respectively		(60,951	)		(60,405	)
Retained deficit		(22,848	)		(18,278	)
Total stockholders’ equity		139,412			142,588
Total liabilities and stockholders’ equity	$	1,291,825		$	1,299,511

	Three Months Ended September 30, 2016
	H&E Equipment Services			Guarantor Subsidiaries			Elimination			Consolidated
	(Amounts in thousands)
Revenues:
Equipment rentals	$	96,310		$	22,225		$	—		$	118,535
New equipment sales		37,110			7,654			—			44,764
Used equipment sales		16,778			3,852			—			20,630
Parts sales		23,807			3,528			—			27,335
Services revenues		13,693			2,383			—			16,076
Other		14,072			3,274			—			17,346
Total revenues		201,770			42,916			—			244,686
Cost of revenues:
Rental depreciation		34,168			7,360			—			41,528
Rental expense		15,127			3,251			—			18,378
New equipment sales		33,206			6,941			—			40,147
Used equipment sales		11,762			2,602			—			14,364
Parts sales		17,221			2,487			—			19,708
Services revenues		4,686			759			—			5,445
Other		13,716			3,275			—			16,991
Total cost of revenues		129,886			26,675			—			156,561
Gross profit (loss):
Equipment rentals		47,015			11,614			—			58,629
New equipment sales		3,904			713			—			4,617
Used equipment sales		5,016			1,250			—			6,266
Parts sales		6,586			1,041			—			7,627
Services revenues		9,007			1,624			—			10,631
Other		356			(1	)		—			355
Gross profit		71,884			16,241			—			88,125
Selling, general and administrative expenses		45,810			10,152			—			55,962
Equity in earnings of guarantor subsidiaries		3,892			—			(3,892	)		—
Gain on sales of property and equipment, net		782			145			—			927
Income from operations		30,748			6,234			(3,892	)		33,090
Other income (expense):
Interest expense		(11,074	)		(2,395	)		—			(13,469	)
Other, net		333			53			—			386
Total other expense, net		(10,741	)		(2,342	)		—			(13,083	)
Income before income taxes		20,007			3,892			(3,892	)		20,007
Income tax expense		8,342			—			—			8,342
Net income	$	11,665		$	3,892		$	(3,892	)	$	11,665

	Three Months Ended September 30, 2015
	H&E Equipment Services			Guarantor Subsidiaries			Elimination			Consolidated
	(Amounts in thousands)
Revenues:
Equipment rentals	$	96,768		$	21,287		$	—		$	118,055
New equipment sales		57,311			9,241			—			66,552
Used equipment sales		22,124			6,987			—			29,111
Parts sales		25,429			3,539			—			28,968
Services revenues		14,206			2,521			—			16,727
Other		14,110			3,330			—			17,440
Total revenues		229,948			46,905			—			276,853
Cost of revenues:
Rental depreciation		34,194			6,769			—			40,963
Rental expense		15,705			3,505			—			19,210
New equipment sales		51,569			8,431			—			60,000
Used equipment sales		15,501			4,761			—			20,262
Parts sales		18,547			2,551			—			21,098
Services revenues		4,811			771			—			5,582
Other		13,657			3,244			—			16,901
Total cost of revenues		153,984			30,032			—			184,016
Gross profit:
Equipment rentals		46,869			11,013			—			57,882
New equipment sales		5,742			810			—			6,552
Used equipment sales		6,623			2,226			—			8,849
Parts sales		6,882			988			—			7,870
Services revenues		9,395			1,750			—			11,145
Other		453			86			—			539
Gross profit		75,964			16,873			—			92,837
Selling, general and administrative expenses		44,810			9,894			—			54,704
Equity in earnings of guarantor subsidiaries		3,663			—			(3,663	)		—
Gain on sales of property and equipment, net		232			107			—			339
Income from operations		35,049			7,086			(3,663	)		38,472
Other income (expense):
Interest expense		(10,023	)		(3,458	)		—			(13,481	)
Other, net		466			35			—			501
Total other expense, net		(9,557	)		(3,423	)		—			(12,980	)
Income before income taxes		25,492			3,663			(3,663	)		25,492
Income tax expense		10,720			—			—			10,720
Net income	$	14,772		$	3,663		$	(3,663	)	$	14,772


2.1		Agreement and Plan of Merger, dated as of July 14, 2017, by and among H&E Equipment Services Inc., Yellow Iron Merger Co. and Neff Corporation (Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 14, 2017).*

10.1		Exchange and Termination Agreement, dated as of July 14, 2017, by and among H&E Equipment Services, Inc., Neff Corporation, Neff Holdings LLC, Wayzata Opportunities Fund II, L.P., and Wayzata Opportunities Fund Offshore II, L.P. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 14, 2017).

10.2		Exchange and Termination Agreement, dated as of July 14, 2017, by and among H&E Equipment Services, Inc., Neff Corporation, Neff Holdings LLC, Mark Irion, as management representative, and the other parties thereto (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 14, 2017).

10.3		Commitment Letter, dated as of July 14, 2017, by and among the Company, Wells Fargo Bank, National Association, WF Investment Holdings, LLC and Wells Fargo Securities, LLC (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 14, 2017).

31.1		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

31.2		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

32.1		Certification pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

99.1		Support Agreement, dated as of July 14, 2017, by and among H&E Equipment Services, Inc., Wayzata Opportunities Fund II, L.P. and Wayzata Opportunities Fund Offshore II, L.P. (Incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 14, 2017).

101.INS		XBRL Instance Document (filed herewith).

101.SCH		XBRL Taxonomy Extension Schema Document (filed herewith).

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document (filed herewith).

101.LAB		XBRL Taxonomy Extension Label Linkbase Document (filed herewith).

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).

	H&E EQUIPMENT SERVICES, INC.

Dated: ~~October~~July 27, ~~2016~~2017	By:	/s/ John M. Engquist
		John M. Engquist Chief Executive Officer (Principal Executive Officer)

Dated: ~~October~~July 27, ~~2016~~2017	By:	/s/ Leslie S. Magee
		Leslie S. Magee Chief Financial Officer and Secretary (Principal Financial and Accounting Officer)