Document and Entity Information

6 Months Ended

Jun. 30, 2016

Jul. 21, 2016

Common Class A

Jul. 21, 2016

Common Class B

Entity Information [Line Items]

Entity Registrant Name

Neff Corp

Entity Central Index Key

0001617667

Current Fiscal Year End Date

--12-31

Entity Filer Category

Non-accelerated Filer

Document Type

10-Q

Document Period End Date

Jun. 30, 2016

Document Fiscal Year Focus

2016

Document Fiscal Period Focus

Q2

Amendment Flag

false

Entity Common Stock, Shares Outstanding

9,025,714

14,951,625

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)

In Thousands, unless otherwise specified

Jun. 30, 2016

Dec. 31, 2015

Jun. 30, 2015

Dec. 31, 2014

ASSETS

Cash and cash equivalents

$ 263

$ 289

$ 225

$ 207

Accounts receivable, net of allowance for doubtful accounts of $1,929 in 2016 and $2,508 in 2015

61,994

70,328

Inventories

2,066

1,766

Rental equipment, net

488,388

457,470

Property and equipment, net

36,825

33,473

Prepaid expenses and other assets

16,213

14,488

Goodwill

60,644

60,599

Intangible assets, net

14,781

15,314

Total assets

681,174

653,727

Liabilities

Accounts payable

23,324

18,948

Accrued expenses and other liabilities

38,692

31,412

Revolving credit facility

269,700

253,600

Second lien loan, net of original issue discount

473,764

476,966

Payable pursuant to tax receivable agreement

29,809

29,133

Deferred tax liability, net

8,957

9,458

Total liabilities

844,246

819,517

Stockholders' deficit

Additional paid-in capital

(118,706)

(112,058)

Retained earnings

19,658

17,190

Total stockholders' deficit

(98,808)

(94,614)

Non-controlling interest

(64,264)

(71,176)

Total stockholders' deficit and non-controlling interest

(163,072)

(165,790)

Total liabilities and stockholders' deficit and non-controlling interest

681,174

653,727

Common Class A

Stockholders' deficit

Common stock

90

104

Common Class B

Stockholders' deficit

Common stock

$ 150

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)

In Thousands, except Share data, unless otherwise specified

Jun. 30, 2016

Dec. 31, 2015

Accounts receivable, allowance for doubtful accounts

$ 1,929

$ 2,125

Common Class A

Common stock, par value (in dollars per share)

$ 0.01

Common stock, shares authorized

100,000,000

Common stock, shares issued

10,476,190

Common stock, shares outstanding

10,476,190

Common Class B

Common stock, par value (in dollars per share)

$ 0.01

Common stock, shares authorized

15,000,000

Common stock, shares issued

14,951,625

Common stock, shares outstanding

14,951,625

Neff Holdings LLC

Common Unit, Issued

23,977,339

25,332,406

Parent Company [Member] |
Neff Holdings LLC |
Common Class A

Common Unit, Issued

9,025,714

10,380,781

Noncontrolling Interest [Member] |
Neff Holdings LLC |
Common Class B

Common Unit, Issued

14,951,625

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)

In Thousands, except Per Share data, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Jun. 30, 2016

Jun. 30, 2015

Revenues

Rental revenues

$ 91,474

$ 84,820

$ 172,651

$ 158,961

Equipment sales

4,941

6,174

10,043

12,961

Parts and service

3,245

3,233

6,550

6,391

Total revenues

99,660

94,227

189,244

178,313

Cost of revenues

Cost of equipment sold

2,963

4,058

6,074

8,390

Depreciation of rental equipment

22,761

21,213

44,926

40,727

Cost of rental revenues

21,675

19,511

41,608

37,370

Cost of parts and service

1,799

1,807

3,604

3,570

Total cost of revenues

49,198

46,589

96,212

90,057

Gross profit

50,462

47,638

93,032

88,256

Other operating expenses

Selling, general and administrative expenses

23,387

22,468

47,909

44,758

Other depreciation and amortization

2,594

2,657

5,335

5,118

Total other operating expenses

25,981

25,125

53,244

49,876

Income from operations

24,481

22,513

39,788

38,380

Other expenses (income)

Interest expense

10,476

10,753

21,125

21,267

Adjustment to Tax Receivable Agreement

262

(3,408)

676

(2,887)

Loss (gain) on interest rate swap

1,828

(1,007)

6,482

(119)

Amortization of debt issue costs

370

381

765

752

Total other expenses (income)

12,936

6,719

29,048

19,013

Income before income taxes

11,545

15,794

10,740

19,367

Provision for income taxes

(1,606)

(1,100)

(1,222)

(1,345)

Net income

9,939

14,694

9,518

18,022

Less: net income attributable to non-controlling interest

7,319

7,275

7,050

9,674

Net income attributable to Neff Corporation

$ 2,620

$ 7,419

$ 2,468

$ 8,348

Common Class A

Net income attributable to Neff Corporation per share of Class A common stock (in dollars per share)

Basic

$ 0.29

$ 0.71

$ 0.25

$ 0.80

Diluted

$ 0.28

$ 0.62

$ 0.25

$ 0.69

Weighted average shares of Class A common stock outstanding (in shares)

Basic

9,158

10,482

9,755

10,479

Diluted

9,481

12,036

9,916

12,033

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)

In Thousands, unless otherwise specified

6 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Cash Flows from Operating Activities

Net income

$ 9,518

$ 18,022

Depreciation

49,726

45,202

Amortization of debt issue costs

765

752

Amortization of intangible assets

535

643

Amortization of original issue discount

147

120

Gain on sale of equipment

(3,969)

(4,571)

Provision for bad debt

862

825

Equity-based compensation

1,098

674

Deferred income taxes

1,222

1,212

Adjustment to Tax Receivable Agreement

676

(2,887)

Unrealized loss (gain) on interest rate swap

6,183

(218)

Changes in operating assets and liabilities:

Accounts receivable

7,472

6,060

Inventories, prepaid expenses and other assets

(1,267)

(955)

Accounts payable

(324)

(2,271)

Accrued expenses and other liabilities

882

(1,905)

Net cash provided by operating activities

73,526

60,703

Cash Flows from Investing Activities

Purchases of rental equipment

(76,557)

(111,095)

Proceeds from sale of equipment

10,043

12,961

Purchases of property and equipment

(8,648)

(10,068)

Net cash used in investing activities

(75,162)

(108,202)

Cash Flows from Financing Activities

Repayments under revolving credit facility

(66,400)

(53,111)

Borrowings under revolving credit facility

82,500

100,911

Debt issue costs

(1,570)

0

Common stock repurchases

(9,433)

0

Second Lien Loan prepayment

(3,349)

0

Distribution to member

(138)

0

Payment of costs directly associated with the issuance of Class A common stock

0

(283)

Net cash provided by financing activities

1,610

47,517

Net (decrease) increase in cash and cash equivalents

(26)

18

Cash and cash equivalents, beginning of period

289

207

Cash and cash equivalents, end of period

263

225

Interest Paid

21,464

21,325

Proceeds from (Payment for) Settlement of Derivatives

299

99

Capital Expenditures Incurred but Not yet Paid

$ 24,368

$ 22,017

BUSINESS AND ORGANIZATION

Neff Corporation was formed as a Delaware corporation on August 18, 2014. On November 26, 2014, Neff Corporation completed an initial public offering (the "IPO") of 10,476,190 shares of Class A common stock at a public offering price of $15.00 per share. A portion of the gross proceeds received by Neff Corporation from the IPO were used to purchase common membership units ("Common Units") in Neff Holdings LLC, ("Neff Holdings") which was wholly owned by private investment funds managed by Wayzata Investment Partners ("Wayzata") prior to the IPO. We refer to these transactions as the “Organizational Transactions”. Neff Corporation's only business is to act as the sole managing member of Neff Holdings. As a result, Neff Corporation consolidates Neff Holdings for all periods presented (see Supplemental Unaudited Condensed Consolidating Financial Statements). Neff Corporation and its consolidated subsidiaries, including Neff Holdings and Neff Holdings' subsidiaries, Neff LLC and Neff Rental LLC, are referred to as the "Company".

The Company owns and operates equipment rental locations in the United States. The Company also sells used equipment, parts and merchandise and provides ongoing repair and maintenance services.

BASIS OF PRESENTATION

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited and have been prepared in conformity with accounting principles generally accepted in the United States (“US GAAP”) and the rules and regulations of the SEC. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with US GAAP have been condensed or omitted. The accompanying unaudited condensed consolidated financial statements are presented on a consolidated basis. All intercompany accounts and transactions have been eliminated. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal and recurring adjustments necessary to present fairly the Company’s balance sheets as of June 30, 2016 and December 31, 2015, the results of its operations for the three and six months ended June 30, 2016 and 2015 and the cash flows for the six months ended June 30, 2016 and 2015. Interim results may not be indicative of full year performance. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto in the 2015 10-K.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company considers critical accounting estimates to be those that require more significant judgments in the preparation of the unaudited condensed consolidated financial statements including those related to depreciation, income taxes, self-insurance reserves, goodwill and intangible assets and amounts payable pursuant to the tax receivable agreement, as amended (Note 3) ("Tax Receivable Agreement"). Management relies on historical experience and other assumptions, believed to be reasonable under the circumstances, in making its judgments and estimates. Actual results could differ from those judgments and estimates.

Goodwill and Intangible Assets

Goodwill and trademarks and tradenames are reviewed at least annually for impairment. The Company conducts annual impairment tests on October 1 of each fiscal year or whenever an indicator of impairment exists. The customer list is amortized over its useful life (Note 5). The Company expenses costs to renew or extend the term of its recognized intangible assets.

Segment Reporting

The Company's operations consist of the rental and sale of equipment, and parts and services in five regions in the United States: Florida, Atlantic, Central, Southeastern and Western. The five regions are the Company's operating segments and are aggregated into one reportable segment because they rent similar products and have similar economic characteristics. The Company operates in the United States and had minimal international sales for each of the periods presented.

NOTE 2—BASIS OF PRESENTATION (Continued)

Comprehensive Income (Loss)

The Company had no items of other comprehensive income (loss) in any of the periods presented.

Recently Issued Accounting Pronouncements

Under the Jumpstart Our Business Startups Act (the "JOBS Act"), the Company meets the definition of an emerging growth company. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has irrevocably elected to avail itself of this exemption from adopting new or revised accounting standards and, therefore, will not be subject to new or revised accounting standards until such time as those standards apply to private companies. There were no significant new accounting pronouncements that the Company adopted during the six months ended June 30, 2016.

In February 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842), ("ASU 2016-02") to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This guidance is effective for private companies for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020 and requires application on a modified retrospective basis. The modified retrospective basis includes a number of optional practical expedients that entities may elect to apply. The Company expects to adopt this guidance when effective for private companies and is currently evaluating the impact of ASU 2016-02 on the Company's financial statements and disclosures.

NON-CONTROLLING INTEREST

Neff Corporation is the sole managing member of Neff Holdings. As a result, Neff Corporation operates and controls all of the business and affairs of Neff Holdings while owning a 37.6% minority economic interest in Neff Holdings. Neff Corporation consolidates the financial results of Neff Holdings and Neff Holdings' subsidiaries, Neff LLC and Neff Rental LLC, and records a non-controlling interest for the remaining 62.4% economic interest in Neff Holdings held by Wayzata. On a stand alone basis, Neff Corporation's only sources of cash flow from operations are distributions from Neff Holdings. Net income attributable to the non-controlling interest on the unaudited condensed consolidated statements of operations represents the portion of earnings attributable to the economic interest in Neff Holdings held by the non-controlling unitholders. The non-controlling interest on the unaudited condensed consolidated balance sheets represents the carryover basis of Wayzata's capital account in Neff Holdings. Non-controlling interest is adjusted to reflect the distributions to and income allocated to the non-controlling unitholders. The ownership of the Common Units is summarized as follows:



	Non-controlling ownership of Common Units in Neff Holdings		Neff Corporation ownership of Common Units in Neff Holdings		Total
As of June 30, 2016	14,951,625		9,025,714		23,977,339
	62.4	%	37.6	%	100.0	%



	Non-controlling ownership of Common Units in Neff Holdings		Neff Corporation ownership of Common Units in Neff Holdings		Total
As of December 31, 2015	14,951,625		10,380,781		25,332,406
	59.0	%	41.0	%	100.0	%

The following table summarizes the activity in non-controlling interest from December 31, 2015 to June 30, 2016 (in thousands):



Balance of non-controlling interest as of December 31, 2015	$	(71,176	)
Net income attributable to non-controlling interest	7,050
Distribution to member	(138		)
Balance of non-controlling interest as of June 30, 2016	$	(64,264	)

NOTE 3—NON-CONTROLLING INTEREST (Continued)

Distributions for Taxes

As a limited liability company (treated as a partnership for income tax purposes), Neff Holdings does not incur significant federal or state and local income taxes, as these taxes are primarily the obligations of the members of Neff Holdings. As authorized by the Neff Holdings LLC agreement, Neff Holdings is required to distribute cash, generally, on a pro rata basis, to its members to the extent necessary to cover the members’ tax liabilities, if any, with respect to their share of Neff Holdings' earnings. During the six months ended June 30, 2016, Neff Holdings' distributed $0.1 million for a tax liability attributable to a Wayzata fund.

Payable Pursuant to the Tax Receivable Agreement

As of June 30, 2016, the Company recorded a liability of $29.8 million, representing the estimated payments due to Wayzata and certain members of management of Neff Holdings and certain non-executive members of its board of managers (collectively, the "Prior LLC Owners") under the Tax Receivable Agreement with the Prior LLC Owners as a result of the special allocation of depreciation and amortization deductions in excess of the pro rata share of such items. The liability as of June 30, 2016 increased by $0.7 million from December 31, 2015, due to changes in estimated future payments as a result of the tax benefit Neff Corporation will obtain as a result of the special allocation of gain, to Wayzata, resulting from the sale of equipment that existed at the date of the IPO, in accordance with Section 704(c) of the Internal Revenue Code. The Company expects these changes from the special allocation of gain will likely occur quarterly.

No amounts were paid pursuant to the terms of the Tax Receivable Agreement during the six months ended June 30, 2016.

Payments are anticipated to be made under the Tax Receivable Agreement when Neff Corporation utilizes a benefit. The payments are to be made in accordance with the terms of the Tax Receivable Agreement. The timing of the payments is subject to certain contingencies including Neff Corporation having sufficient taxable income to utilize the tax benefits defined in the Tax Receivable Agreement.

Obligations pursuant to the Tax Receivable Agreement, are obligations of Neff Corporation and are not obligations of Neff Holdings. They do not impact the balance of non-controlling interest. These obligations are not income tax obligations and have no impact on the tax provision or the allocation of taxes. In general, items of income, gain, loss and deduction are allocated on the basis of members' respective ownership interests pursuant to the Neff Holdings LLC agreement after taking into consideration all relevant sections of the Internal Revenue Code.

EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the period, including vested restricted stock units ("RSUs"). Diluted earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares plus the dilutive effect of potential common shares outstanding during the period. For RSUs with performance-based vesting, no common equivalent shares are included in the computation of diluted earnings per share until the related performance criteria have been met. The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts):

NOTE 4 - EARNINGS PER SHARE (Continued)



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2016		2015		2016		2015
Numerator:
Net income attributable to Neff Corporation	$	2,620	$	7,419	$	2,468	$	8,348
Denominator for basic net income per share of Class A common stock:
Weighted average shares of Class A common stock outstanding	9,158		10,482		9,755		10,479
Denominator for diluted net income per share of Class A common stock:
Weighted average shares of Class A common stock outstanding, diluted	9,481		12,036		9,916		12,033
Earnings per share of Class A common stock:
Net income attributable to Neff Corporation per share of Class A common stock, basic	$	0.29	$	0.71	$	0.25	$	0.80
Net income attributable to Neff Corporation per share of Class A common stock, diluted	$	0.28	$	0.62	$	0.25	$	0.69

Potentially dilutive stock options representing a total of 0.7 million shares of Class A common stock for the three and six months ended June 30, 2016 were excluded from the computation of diluted weighted average shares outstanding due to their anti-dilutive effect.

In November 2015, the Company's board of directors authorized a share repurchase program pursuant to which the Company may purchase shares of its Class A common stock. Under the share repurchase program, the Company may acquire up to $25 million of shares of Class A common stock in open market and privately negotiated purchases from time to time, dependent on market conditions. During the six months ended June 30, 2016, the Company repurchased 1,399,275 shares of Class A common stock for $9.4 million. At June 30, 2016, there were approximately $14.7 million in remaining funds authorized under this program. See Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, for additional information.

The shares of Class B common stock outstanding do not participate in the earnings of Neff Corporation and are therefore not participating securities. Accordingly, basic and diluted net income per share of Class B common stock have not been presented.

INTANGIBLE ASSETS

—INTANGIBLE ASSETS

The carrying amount and accumulated amortization of intangible assets as of June 30, 2016 and December 31, 2015, consisted of the following (in thousands, except as noted):



		June 30, 2016
	Average Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization			Net Book Value
Indefinite life:
Trademarks and tradenames	N/A	$	10,854	$	—		$	10,854
Finite life:
Customer list	12	13,987		(10,060		)	3,927
Total intangible assets		$	24,841	$	(10,060	)	$	14,781

NOTE 5—INTANGIBLE ASSETS (Continued)



		December 31, 2015
	Average Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization			Net Book Value
Indefinite life:
Trademarks and tradenames	N/A	$	10,854	$	—		$	10,854
Finite life:
Customer list	12	13,987		(9,527		)	4,460
Total intangible assets		$	24,841	$	(9,527	)	$	15,314

The customer list is amortized on an accelerated basis, based on estimated cash flows over the useful life of the customer list. Accumulated amortization and expected future annual amortization expense are as follows (in thousands):



Accumulated amortization at June 30, 2016	$	10,060
Estimated amortization expense for:
Remainder of 2016	537
2017	877
2018	719
2019	589
2020	483
2021 through 2022	722
Total	$	13,987

Amortization expense related to the customer list was $0.3 million for the three months ended June 30, 2016 and 2015. Amortization expense related to the customer list was $0.5 million and $0.6 million for the six months ended June 30, 2016 and 2015, respectively.

DEBT

Debt consisted of the following as of June 30, 2016 and December 31, 2015 (in thousands, except percent data):



	June 30, 2016		December 31, 2015
Revolving Credit Facility with interest ranging from the lender's prime rate plus up to 1.0% to LIBOR plus up to 2.0% (2.28% at June 30, 2016)	$	269,700	$	253,600
Second Lien Loan with interest of LIBOR plus 6.25%, with 1.0% LIBOR floor, net of unamortized discount of $1,887 in 2016 and $2,034 in 2015 (7.25% at June 30, 2016)	473,764		476,966
Total indebtedness	$	743,464	$	730,566

On February 25, 2016, Neff Holdings, Neff LLC and Neff Rental LLC (collectively, the “Credit Parties”), amended and restated the revolving credit facility (the “2016 Amendment and Restatement”). The 2016 Amendment and Restatement, among other things, increased total maximum borrowing capacity from $425.0 million to $475.0 million, extended the maturity from November 20, 2018 to February 25, 2021, increased the amount that the Company could request (but the lenders under the revolving credit agreement have no obligation to provide) from $25.0 million to $100.0 million of incremental revolving loan commitments, reduced applicable margins applicable to loans and other credit extensions, modified excess availability requirements relating to cash dominion, and modified certain baskets, thresholds and ratios, including the consolidated total leverage ratio.

As of June 30, 2016, Neff Rental LLC and Neff LLC (subsidiaries of Neff Holdings) had an outstanding balance of $269.7 million under the senior secured revolving credit facility (the "Revolving Credit Facility"). Neff Rental LLC had $475.7 million of the second lien term loans (the "Second Lien Loan") outstanding as of June 30, 2016.

NOTE 6—DEBT (Continued)

Accumulated amortization at June 30, 2016 for debt issue costs was $4.5 million and $1.3 million for the Revolving Credit Facility and Second Lien Loan, respectively. Accumulated amortization at December 31, 2015 for debt issue costs was $4.1 million and $0.9 million for the Revolving Credit Facility and Second Lien Loan, respectively.

The Revolving Credit Facility and the Second Lien Loan credit agreements contain various affirmative, negative and financial reporting covenants. The covenants, among other things, place restrictions on the Company’s ability to acquire and sell assets, incur additional indebtedness and prepay other indebtedness other than the Revolving Credit Facility. The Company is subject to certain financial covenants under its Revolving Credit Facility if availability declines below $47.5 million. The Company was in compliance with all financial covenants under the Revolving Credit Facility and the Second Lien Loan credit agreements as of June 30, 2016.

As of December 31, 2015, our total leverage ratio was 3.90. Under the terms of the Second Lien Loan, if the total leverage ratio is equal to or less than 4.00 to 1.00 but greater than 3.00 to 1.00 at the end of each fiscal year, the Company must make a mandatory prepayment equal to 25% of its excess cash flow. A mandatory prepayment of $3.3 million was made for the year ended December 31, 2015, during March 2016. The Company will determine whether any mandatory prepayments need to be made for the fiscal year ending December 31, 2016, after year end.

The Company had $3.9 million and $3.7 million in outstanding letters of credit at June 30, 2016 and December 31, 2015, respectively, that were primarily associated with its insurance coverage. As of June 30, 2016, total availability under the Revolving Credit Facility was $201.2 million.

EQUITY-BASED COMPENSATION

EQUITY—BASED COMPENSATION

On November 7, 2014, the Company's board of directors adopted the Neff Corporation 2014 Incentive Award Plan (the "2014 Incentive Plan") and reserved 1,500,000 shares of Class A common stock for issuance. The 2014 Incentive Plan became effective on November 7, 2014 and provides for the grant of options, restricted stock awards, performance awards, dividend equivalent awards, deferred stock awards, deferred stock unit awards, stock payment awards or stock appreciation rights to employees, consultants and directors of the Company.

For the three months ended June 30, 2016 and 2015, the Company recognized equity-based compensation expense of $0.3 million. For the six months ended June 30, 2016 and 2015, the Company recognized equity-based compensation expense of $1.1 million and $0.7 million, respectively. Each Common Unit held by Wayzata or acquired by individuals upon exercise of existing options granted by Neff Holdings will be redeemable, at the election of such member, for, at Neff Corporation's option, newly issued shares of Neff Corporation's Class A common stock on a 1-for-1 basis or for a cash payment equal to the market price of one share of Neff Corporation's Class A common stock.

The following table summarizes equity-based compensation activity for the six months ended June 30, 2016 (in thousands):



	Neff Corporation			Neff Holdings
	RSUs		Options	Options
Balance as of January 1, 2016	243		696	1,265
Granted	—		—	—
Exercised	(44	)	—	—
Forfeited	—		—	—
Balance as of June 30, 2016	199		696	1,265

Vested	—		72	1,265
Unvested	199		624	—
Total	199		696	1,265

At June 30, 2016, there were 0.5 million additional shares of Class A common stock available for the Company to grant under the 2014 Incentive Plan.

DERIVATIVE FINANCIAL INSTRUMENTS

On March 24, 2015, the Company entered into an interest rate swap (the "Interest Rate Swap"), effectively converting a portion of its variable rate debt into fixed rate debt. The Interest Rate Swap is not accounted for as a hedge and changes in fair value are included directly in the unaudited condensed consolidated statement of operations. The Company adjusts the accrued swap asset or liability by the amount of the monthly net settlement as settlements are made. Under the terms of the Interest Rate Swap, a monthly net settlement is made on approximately the 8th of each month for the difference between the fixed rate (see the fixed rate schedule below) and the variable rate, based upon the one month LIBOR rate on the notional amount of the Interest Rate Swap. The Interest Rate Swap has a notional amount of $200.0 million through April 8, 2020.

The fixed rate follows the schedule below:



April 8, 2016 to April 9, 2017	1.1570	%
April 10, 2017 to April 8, 2018	1.6810	%
April 9, 2018 to April 7, 2019	1.9610	%
April 8, 2019 to April 8, 2020	2.1430	%

The Company's transactions in derivative financial instruments are authorized and executed pursuant to its regularly reviewed policies and procedures, which prohibit the use of derivative financial instruments for trading or speculative purposes.

For the three months ended June 30, 2016, the Company recognized a loss on the Interest Rate Swap of $1.8 million which consisted of $1.6 million of unrealized losses related to the change in fair value of the Interest Rate Swap and a $0.2 million realized loss for the settlement payments made. For the three months ended June 30, 2015, the Company recognized a gain on the Interest Rate Swap of $1.0 million which consisted of $1.1 million of unrealized gains related to the change in fair value of the Interest Rate Swap and a $0.1 million realized loss for the settlement payments made.

For the six months ended June 30, 2016, the Company recognized a loss on the Interest Rate Swap of $6.5 million which consisted of $6.2 million of unrealized losses related to the change in fair value of the Interest Rate Swap and a $0.3 million related loss for the settlement payments made. For the six months ended June 30, 2015, the Company recognized a gain on the Interest Rate Swap of $0.1 million which consisted of $0.2 million of unrealized gains related to the change in fair value of the Interest Rate Swap and a $0.1 million realized loss for the settlement payments made.

The following tables provide details regarding the Company's derivative financial instruments (in thousands):



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2016		2015		2016		2015
	Loss Recognized in Earnings (a)		Gain Recognized in Earnings(a)		Loss Recognized in Earnings (a)		Gain Recognized in Earnings(a)
Interest Rate Swap	$	1,828	$	1,007	$	6,482	$	119



	June 30, 2016		December 31, 2015
	Fair Value of Derivative(b)		Fair Value of Derivative(b)
Interest Rate Swap (Note 9)	$	8,063	$	1,880


(a)	Classified in Other expenses (income)—Loss (gain) on interest rate swap


(b)	Classified in Liabilities—Accrued expenses and other liabilities

INCOME TAXES

Neff Corporation is required to file federal and applicable state corporate income tax returns and recognizes income taxes on its pre-tax income, which to date has consisted primarily of its share of Neff Holdings' pre-tax income. Neff Holdings is a limited liability company that is treated as a partnership for federal and state income tax purposes. Neff Holdings is not subject to income taxes for federal and state purposes. Rather, taxable income or loss is included in the respective federal and state income tax returns of Neff Holdings' members.

The Company's estimated annual effective tax rate for the year ended December 31, 2016 is expected to be 15.6% before discrete items. The Company's consolidated effective tax rate for the six months ended June 30, 2016, inclusive of discrete items is 11.4%. The 4.2% difference in these rates is primarily attributable to a benefit related to the special allocation of gain, to Wayzata, resulting from the sale of equipment that had a built in gain at the date of the IPO, in accordance with Section 704(c) of the Internal Revenue Code (Note 3) reduced by the deferred tax impact resulting from the reduction of Neff Corporation's interest in Neff Holdings.

FAIR VALUE DISCLOSURES

The carrying amounts for accounts receivable, accounts payable and accrued expenses and other liabilities approximate fair value due to their immediate to short-term maturity. The fair value of the Revolving Credit Facility and the Second Lien Loan approximate carrying value as of June 30, 2016 and December 31, 2015, as variable interest rates approximate market rates. The Company has classified these instruments in Level 2 of the fair value hierarchy as described below.

NOTE 9—FAIR VALUE DISCLOSURES (Continued)

The Company used the following methods to measure the fair value of certain assets and liabilities:

Interest Rate Swap. The Interest Rate Swap is valued utilizing pricing models taking into account inputs such as interest rates and notional amounts.

The FASB has established a framework for measuring fair value and requires that assets and liabilities measured at fair value be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data

Level 3: Unobservable inputs that are not corroborated by market data

The following table provides fair value measurement information of the Company's financial liability measured on a recurring basis as of June 30, 2016 (in thousands):



	Fair Value Measurements Using:
	Quoted Prices in Active Markets		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)
Interest Rate Swap	$	—	$	8,063	$	—

There were no transfers into or out of Level 1, 2 or 3 during the six months ended June 30, 2016 and 2015.

SUPPLEMENTAL CONSOLIDATING STATEMENTS

NEFF CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET

JUNE 30, 2016

(in thousands)



	Neff Rental LLC			Neff LLC		Neff Holdings LLC		Neff Corporation Stand Alone			Eliminations			Neff Corporation
ASSETS

Cash and cash equivalents	$	263		$	—	$	—	$	—		$	—		$	263
Accounts receivable, net	61,994			—		—		—			—			61,994
Inventories	2,066			—		—		—			—			2,066
Rental equipment, net	488,388			—		—		—			—			488,388
Property and equipment, net	36,825			—		—		—			—			36,825
Prepaid expenses and other assets	16,213			—		—		—			—			16,213
Goodwill	60,644			—		—		—			—			60,644
Investment in subsidiary	—			78,793		78,793		162,387			(319,973		)	—
Intercompany	6,488			—		—		(6,488		)	—			—
Intangible assets, net	14,781			—		—		—			—			14,781
Total assets	$	687,662		$	78,793	$	78,793	$	155,899		$	(319,973	)	$	681,174

LIABILITIES AND STOCKHOLDERS' DEFICIT / MEMBERS' DEFICIT

Liabilities
Accounts payable	$	23,324		$	—	$	—	$	—		$	—		$	23,324
Accrued expenses and other liabilities	38,692			—		—		—			—			38,692
Revolving credit facility	269,700			—		—		—			—			269,700
Second lien loan, net	473,764			—		—		—			—			473,764
Payable pursuant to tax receivable agreement	—			—		—		29,809			—			29,809
Deferred tax liability, net	—			—		—		8,957			—			8,957
Total liabilities	$	805,480		$	—	$	—	$	38,766		$	—		$	844,246

Stockholders' deficit / members' deficit
Class A Common Stock	$	—		$	—	$	—	$	90		$	—		$	90
Class B Common Stock	—			—		—		150			—			150
Additional paid-in capital	—			—		—		27,437			(146,143		)	(118,706		)
Retained earnings	—			—		—		19,658			—			19,658
Members' deficit	(196,611		)	—		—		—			196,611			—
Accumulated surplus	78,793			78,793		78,793		—			(236,379		)	—
Total stockholders' deficit / members' deficit	(117,818		)	78,793		78,793		47,335			(185,911		)	(98,808		)
Non-controlling interest	—			—		—		69,798			(134,062		)	(64,264		)
Total stockholders' deficit / members' deficit and non-controlling interest	(117,818		)	78,793		78,793		117,133			(319,973		)	(163,072		)
Total liabilities and stockholders' deficit / members' deficit and non-controlling interest	$	687,662		$	78,793	$	78,793	$	155,899		$	(319,973	)	$	681,174

NEFF CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2015

(in thousands)



	Neff Rental LLC			Neff LLC		Neff Holdings LLC		Neff Corporation Stand Alone			Eliminations			Neff Corporation
ASSETS

Cash and cash equivalents	$	287		$	—	$	—	$	2		$	—		$	289
Accounts receivable, net	70,328			—		—		—			—			70,328
Inventories	1,766			—		—		—			—			1,766
Rental equipment, net	457,470			—		—		—			—			457,470
Property and equipment, net	33,473			—		—		—			—			33,473
Prepaid expenses and other assets	14,488			—		—		—			—			14,488
Goodwill	60,599			—		—		—			—			60,599
Investment in subsidiary	—			67,427		67,427		166,406			(301,260		)	—
Intercompany	6,490			—		—		(6,490		)	—			—
Intangible assets, net	15,314			—		—		—			—			15,314
Total assets	$	660,215		$	67,427	$	67,427	$	159,918		$	(301,260	)	$	653,727

LIABILITIES AND STOCKHOLDERS' DEFICIT / MEMBERS' DEFICIT

Liabilities
Accounts payable	$	18,948		$	—	$	—	$	—		$	—		$	18,948
Accrued expenses and other liabilities	31,412			—		—		—			—			31,412
Revolving credit facility	253,600			—		—		—			—			253,600
Second lien loan, net	476,966			—		—		—			—			476,966
Payable pursuant to tax receivable agreement	—			—		—		29,133			—			29,133
Deferred tax liability, net	—			—		—		9,458			—			9,458
Total liabilities	$	780,926		$	—	$	—	$	38,591		$	—		$	819,517

Stockholders' deficit / members' deficit
Class A Common Stock	$	—		$	—	$	—	$	104		$	—		$	104
Class B Common Stock	—			—		—		150			—			150
Additional paid-in capital	—			—		—		34,085			(146,143		)	(112,058		)
Retained earnings	—			—		—		17,190			—			17,190
Members' deficit	(188,138		)	—		—		—			188,138			—
Accumulated surplus	67,427			67,427		67,427		—			(202,281		)	—
Total stockholders' deficit / members' deficit	(120,711		)	67,427		67,427		51,529			(160,286		)	(94,614		)
Non-controlling interest	—			—		—		69,798			(140,974		)	(71,176		)
Total stockholders' deficit / members' deficit and non-controlling interest	(120,711		)	67,427		67,427		121,327			(301,260		)	(165,790		)
Total liabilities and stockholders' deficit / members' deficit and non-controlling interest	$	660,215		$	67,427	$	67,427	$	159,918		$	(301,260	)	$	653,727

NEFF CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED JUNE 30, 2016

(in thousands)



	Neff Rental LLC			Neff LLC		Neff Holdings LLC		Neff Corporation Stand Alone			Eliminations			Neff Corporation
Revenues
Rental revenues	$	91,474		$	—	$	—	$	—		$	—		$	91,474
Equipment sales	4,941			—		—		—			—			4,941
Parts and service	3,245			—		—		—			—			3,245
Total revenues	99,660			—		—		—			—			99,660
Cost of revenues
Cost of equipment sold	2,963			—		—		—			—			2,963
Depreciation of rental equipment	22,761			—		—		—			—			22,761
Cost of rental revenues	21,675			—		—		—			—			21,675
Cost of parts and service	1,799			—		—		—			—			1,799
Total cost of revenues	49,198			—		—		—			—			49,198
Gross profit	50,462			—		—		—			—			50,462
Other operating expenses
Selling, general and administrative expenses	23,387			—		—		—			—			23,387
Other depreciation and amortization	2,594			—		—		—			—			2,594
Total other operating expenses	25,981			—		—		—			—			25,981
Income from operations	24,481			—		—		—			—			24,481
Other expenses
Interest expense	10,476			—		—		—			—			10,476
Adjustment to tax receivable agreement	—			—		—		262			—			262
Loss on interest rate swap	1,828			—		—		—			—			1,828
Amortization of debt issue costs	370			—		—		—			—			370
Total other expenses	12,674			—		—		262			—			12,936
Income (loss) before income taxes	11,807			—		—		(262		)	—			11,545
Equity earnings in subsidiaries	—			11,757		11,757		4,438			(27,952		)	—
Provision for income taxes	(50		)	—		—		(1,556		)	—			(1,606		)
Net income	11,757			11,757		11,757		2,620			(27,952		)	9,939
Less: net income attributable to non-controlling interest	—			—		7,319		—			—			7,319
Net income attributable to Neff Corporation	$	11,757		$	11,757	$	4,438	$	2,620		$	(27,952	)	$	2,620

NEFF CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED JUNE 30, 2015

(in thousands)



	Neff Rental LLC			Neff LLC		Neff Holdings LLC		Neff Corporation Stand Alone			Eliminations			Neff Corporation
Revenues
Rental revenues	$	84,820		$	—	$	—	$	—		$	—		$	84,820
Equipment sales	6,174			—		—		—			—			6,174
Parts and service	3,233			—		—		—			—			3,233
Total revenues	94,227			—		—		—			—			94,227
Cost of revenues
Cost of equipment sold	4,058			—		—		—			—			4,058
Depreciation of rental equipment	21,213			—		—		—			—			21,213
Cost of rental revenues	19,511			—		—		—			—			19,511
Cost of parts and service	1,807			—		—		—			—			1,807
Total cost of revenues	46,589			—		—		—			—			46,589
Gross profit	47,638			—		—		—			—			47,638
Other operating expenses
Selling, general and administrative expenses	22,468			—		—		—			—			22,468
Other depreciation and amortization	2,657			—		—		—			—			2,657
Total other operating expenses	25,125			—		—		—			—			25,125
Income from operations	22,513			—		—		—			—			22,513
Other expenses (income)
Interest expense	10,753			—		—		—			—			10,753
Adjustment to tax receivable agreement	—			—		—		(3,408		)	—			(3,408		)
Gain on interest rate swap	(1,007		)	—		—		—			—			(1,007		)
Amortization of debt issue costs	381			—		—		—			—			381
Total other expenses (income)	10,127			—		—		(3,408		)	—			6,719
Income before income taxes	12,386			—		—		3,408			—			15,794
Equity earnings in subsidiaries	—			12,373		12,373		5,098			(29,844		)	—
Provision for income taxes	(13		)	—		—		(1,087		)	—			(1,100		)
Net income	12,373			12,373		12,373		7,419			(29,844		)	14,694
Less: net income attributable to non-controlling interest	7,275			7,275		7,275		—			(14,550		)	7,275
Net income attributable to Neff Corporation	$	5,098		$	5,098	$	5,098	$	7,419		$	(15,294	)	$	7,419

NEFF CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2016

(in thousands)



	Neff Rental LLC			Neff LLC		Neff Holdings LLC		Neff Corporation Stand Alone			Eliminations			Neff Corporation
Revenues
Rental revenues	$	172,651		$	—	$	—	$	—		$	—		$	172,651
Equipment sales	10,043			—		—		—			—			10,043
Parts and service	6,550			—		—		—			—			6,550
Total revenues	189,244			—		—		—			—			189,244
Cost of revenues
Cost of equipment sold	6,074			—		—		—			—			6,074
Depreciation of rental equipment	44,926			—		—		—			—			44,926
Cost of rental revenues	41,608			—		—		—			—			41,608
Cost of parts and service	3,604			—		—		—			—			3,604
Total cost of revenues	96,212			—		—		—			—			96,212
Gross profit	93,032			—		—		—			—			93,032
Other operating expenses
Selling, general and administrative expenses	47,909			—		—		—			—			47,909
Other depreciation and amortization	5,335			—		—		—			—			5,335
Total other operating expenses	53,244			—		—		—			—			53,244
Income from operations	39,788			—		—		—			—			39,788
Other expenses
Interest expense	21,125			—		—		—			—			21,125
Adjustment to tax receivable agreement	—			—		—		676			—			676
Loss on interest rate swap	6,482			—		—		—			—			6,482
Amortization of debt issue costs	765			—		—		—			—			765
Total other expenses	28,372			—		—		676			—			29,048
Income (loss) before income taxes	11,416			—		—		(676		)	—			10,740
Equity earnings in subsidiaries	—			11,366		11,366		4,316			(27,048		)	—
Provision for income taxes	(50		)	—		—		(1,172		)	—			(1,222		)
Net income	11,366			11,366		11,366		2,468			(27,048		)	9,518
Less: net income attributable to non-controlling interest	—			—		7,050		—			—			7,050
Net income attributable to Neff Corporation	$	11,366		$	11,366	$	4,316	$	2,468		$	(27,048	)	$	2,468

NEFF CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2015

(in thousands)



	Neff Rental LLC			Neff LLC		Neff Holdings LLC		Neff Corporation Stand Alone			Eliminations			Neff Corporation
Revenues
Rental revenues	$	158,961		$	—	$	—	$	—		$	—		$	158,961
Equipment sales	12,961			—		—		—			—			12,961
Parts and service	6,391			—		—		—			—			6,391
Total revenues	178,313			—		—		—			—			178,313
Cost of revenues
Cost of equipment sold	8,390			—		—		—			—			8,390
Depreciation of rental equipment	40,727			—		—		—			—			40,727
Cost of rental revenues	37,370			—		—		—			—			37,370
Cost of parts and service	3,570			—		—		—			—			3,570
Total cost of revenues	90,057			—		—		—			—			90,057
Gross profit	88,256			—		—		—			—			88,256
Other operating expenses
Selling, general and administrative expenses	44,758			—		—		—			—			44,758
Other depreciation and amortization	5,118			—		—		—			—			5,118
Total other operating expenses	49,876			—		—		—			—			49,876
Income from operations	38,380			—		—		—			—			38,380
Other expenses (income)
Interest expense	21,267			—		—		—			—			21,267
Adjustment to tax receivable agreement	—			—		—		(2,887		)	—			(2,887		)
Gain on interest rate swap	(119		)	—		—		—			—			(119		)
Amortization of debt issue costs	752			—		—		—			—			752
Total other expenses (income)	21,900			—		—		(2,887		)	—			19,013
Income before income taxes	16,480			—		—		2,887			—			19,367
Equity earnings in subsidiaries	—			16,453		16,453		6,779			(39,685		)	—
Provision for income taxes	(27		)	—		—		(1,318		)	—			(1,345		)
Net income	16,453			16,453		16,453		8,348			(39,685		)	18,022
Less: net income attributable to non-controlling interest	9,674			9,674		9,674		—			(19,348		)	9,674
Net income attributable to Neff Corporation	$	6,779		$	6,779	$	6,779	$	8,348		$	(20,337	)	$	8,348

NEFF CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2016

(in thousands)



	Neff Rental LLC			Neff LLC			Neff Holdings LLC			Neff Corporation Stand Alone			Eliminations			Neff Corporation
Cash Flows from Operating Activities
Net income	$	11,366		$	11,366		$	11,366		$	2,468		$	(27,048	)	$	9,518
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	49,726			—			—			—			—			49,726
Amortization of debt issue costs	765			—			—			—			—			765
Amortization of intangible assets	535			—			—			—			—			535
Amortization of original issue discount	147			—			—			—			—			147
Gain on sale of equipment	(3,969		)	—			—			—			—			(3,969		)
Provision for bad debt	862			—			—			—			—			862
Equity-based compensation	1,098			—			—			—			—			1,098
Deferred income taxes	50			—			—			1,172			—			1,222
Adjustment to tax receivable agreement	—			—			—			676			—			676
Unrealized loss on interest rate swap	6,183			—			—			—			—			6,183
Equity earnings in subsidiaries	—			(11,366		)	(11,366		)	(4,316		)	27,048			—
Changes in operating assets and liabilities:
Accounts receivable	7,472			—			—			—			—			7,472
Inventories, prepaid expenses and other assets	(1,267		)	—			—			—			—			(1,267		)
Accounts payable	(324		)	—			—			—			—			(324		)
Accrued expenses and other liabilities	882			—			—			—			—			882
Net cash provided by operating activities	73,526			—			—			—			—			73,526
Cash Flows from Investing Activities
Purchases of rental equipment	(76,557		)	—			—			—			—			(76,557		)
Proceeds from sale of equipment	10,043			—			—			—			—			10,043
Purchases of property and equipment	(8,648		)	—			—			—			—			(8,648		)
Net cash used in investing activities	(75,162		)	—			—			—			—			(75,162		)
Cash Flows from Financing Activities
Repayments under revolving credit facility	(66,400		)	—			—			—			—			(66,400		)
Borrowings under revolving credit facility	82,500			—			—			—			—			82,500
Debt issue costs	(1,570		)	—			—			—			—			(1,570		)
Common stock repurchases	—			—			—			(9,433		)	—			(9,433		)
Common unit sales/repurchases	(9,433		)	—			—			9,433			—			—
Second Lien Loan prepayment	(3,349		)	—			—			—			—			(3,349		)
Distribution to member	(138		)	—			—			—			—			(138		)
Intercompany	2			—			—			(2		)	—			—
Net cash provided by (used in) financing activities	1,612			—			—			(2		)	—			1,610
Net decrease in cash and cash equivalents	(24		)	—			—			(2		)	—			(26		)
Cash and cash equivalents, beginning of period	287			—			—			2			—			289
Cash and cash equivalents, end of period	$	263		$	—		$	—		$	—		$	—		$	263

NEFF CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2015

(in thousands)



	Neff Rental LLC			Neff LLC			Neff Holdings LLC			Neff Corporation Stand Alone			Eliminations			Neff Corporation
Cash Flows from Operating Activities
Net income	$	16,453		$	16,453		$	16,453		$	8,348		$	(39,685	)	$	18,022
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation	45,202			—			—			—			—			45,202
Amortization of debt issue costs	752			—			—			—			—			752
Amortization of intangible assets	643			—			—			—			—			643
Amortization of original issue discount	120			—			—			—			—			120
Gain on sale of equipment	(4,571		)	—			—			—			—			(4,571		)
Provision for bad debt	825			—			—			—			—			825
Equity-based compensation	674			—			—			—			—			674
Deferred income taxes	—			—			—			1,212			—			1,212
Adjustment to tax receivable agreement	—			—			—			(2,887		)	—			(2,887		)
Unrealized gain on interest rate swap	(218		)	—			—			—			—			(218		)
Equity earnings in subsidiaries	—			(16,453		)	(16,453		)	(6,779		)	39,685			—
Changes in operating assets and liabilities:
Accounts receivable	6,060			—			—			—			—			6,060
Inventories, prepaid expenses and other assets	(955		)	—			—			—			—			(955		)
Accounts payable	(2,271		)	—			—			—			—			(2,271		)
Accrued expenses and other liabilities	(2,010		)	—			—			105			—			(1,905		)
Net cash provided by (used in) operating activities	60,704			—			—			(1		)	—			60,703
Cash Flows from Investing Activities
Purchases of rental equipment	(111,095		)	—			—			—			—			(111,095		)
Proceeds from sale of equipment	12,961			—			—			—			—			12,961
Purchases of property and equipment	(10,068		)	—			—			—			—			(10,068		)
Net cash used in investing activities	(108,202		)	—			—			—			—			(108,202		)
Cash Flows from Financing Activities
Repayments under revolving credit facility	(53,111		)	—			—			—			—			(53,111		)
Borrowings under revolving credit facility	100,911			—			—			—			—			100,911
Payment of costs directly associated with the issuance of Class A common stock	—			—			—			(283		)	—			(283		)
Intercompany	(284		)	—			—			284			—			—
Net cash provided by financing activities	47,516			—			—			1			—			47,517
Net increase in cash and cash equivalents	18			—			—			—			—			18
Cash and cash equivalents, beginning of period	205			—			—			2			—			207
Cash and cash equivalents, end of period	$	223		$	—		$	—		$	2		$	—		$	225

BASIS OF PRESENTATION (Policies)

Condensed Consolidated Financial Statements

The accompanying condensed consolidated financial statements are unaudited and have been prepared in conformity with accounting principles generally accepted in the United States (“US GAAP”) and the rules and regulations of the SEC. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with US GAAP have been condensed or omitted. The accompanying unaudited condensed consolidated financial statements are presented on a consolidated basis. All intercompany accounts and transactions have been eliminated. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal and recurring adjustments necessary to present fairly the Company’s balance sheets as of June 30, 2016 and December 31, 2015, the results of its operations for the three and six months ended June 30, 2016 and 2015 and the cash flows for the six months ended June 30, 2016 and 2015. Interim results may not be indicative of full year performance. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto in the 2015 10-K.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company considers critical accounting estimates to be those that require more significant judgments in the preparation of the unaudited condensed consolidated financial statements including those related to depreciation, income taxes, self-insurance reserves, goodwill and intangible assets and amounts payable pursuant to the tax receivable agreement, as amended (Note 3) ("Tax Receivable Agreement"). Management relies on historical experience and other assumptions, believed to be reasonable under the circumstances, in making its judgments and estimates. Actual results could differ from those judgments and estimates.

Goodwill and Intangible Assets

Goodwill and trademarks and tradenames are reviewed at least annually for impairment. The Company conducts annual impairment tests on October 1 of each fiscal year or whenever an indicator of impairment exists. The customer list is amortized over its useful life (Note 5). The Company expenses costs to renew or extend the term of its recognized intangible assets.

Segment Reporting

The Company's operations consist of the rental and sale of equipment, and parts and services in five regions in the United States: Florida, Atlantic, Central, Southeastern and Western. The five regions are the Company's operating segments and are aggregated into one reportable segment because they rent similar products and have similar economic characteristics. The Company operates in the United States and had minimal international sales for each of the periods presented.

Comprehensive Income (Loss)

The Company had no items of other comprehensive income (loss) in any of the periods presented.

Recently Issued Accounting Pronouncements

Under the Jumpstart Our Business Startups Act (the "JOBS Act"), the Company meets the definition of an emerging growth company. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has irrevocably elected to avail itself of this exemption from adopting new or revised accounting standards and, therefore, will not be subject to new or revised accounting standards until such time as those standards apply to private companies. There were no significant new accounting pronouncements that the Company adopted during the six months ended June 30, 2016.

In February 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842), ("ASU 2016-02") to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This guidance is effective for private companies for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020 and requires application on a modified retrospective basis. The modified retrospective basis includes a number of optional practical expedients that entities may elect to apply. The Company expects to adopt this guidance when effective for private companies and is currently evaluating the impact of ASU 2016-02 on the Company's financial statements and disclosures.

NON-CONTROLLING INTEREST - (Tables)

Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net

distributions to and income allocated to the non-controlling unitholders. The ownership of the Common Units is summarized as follows:



	Non-controlling ownership of Common Units in Neff Holdings		Neff Corporation ownership of Common Units in Neff Holdings		Total
As of June 30, 2016	14,951,625		9,025,714		23,977,339
	62.4	%	37.6	%	100.0	%



	Non-controlling ownership of Common Units in Neff Holdings		Neff Corporation ownership of Common Units in Neff Holdings		Total
As of December 31, 2015	14,951,625		10,380,781		25,332,406
	59.0	%	41.0	%	100.0	%

The following table summarizes the activity in non-controlling interest from December 31, 2015 to June 30, 2016 (in thousands):



Balance of non-controlling interest as of December 31, 2015	$	(71,176	)
Net income attributable to non-controlling interest	7,050
Distribution to member	(138		)
Balance of non-controlling interest as of June 30, 2016	$	(64,264	)

EARNINGS PER SHARE - (Tables)

Computation of Basic and Diluted Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts):

NOTE 4 - EARNINGS PER SHARE (Continued)



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2016		2015		2016		2015
Numerator:
Net income attributable to Neff Corporation	$	2,620	$	7,419	$	2,468	$	8,348
Denominator for basic net income per share of Class A common stock:
Weighted average shares of Class A common stock outstanding	9,158		10,482		9,755		10,479
Denominator for diluted net income per share of Class A common stock:
Weighted average shares of Class A common stock outstanding, diluted	9,481		12,036		9,916		12,033
Earnings per share of Class A common stock:
Net income attributable to Neff Corporation per share of Class A common stock, basic	$	0.29	$	0.71	$	0.25	$	0.80
Net income attributable to Neff Corporation per share of Class A common stock, diluted	$	0.28	$	0.62	$	0.25	$	0.69

INTANGIBLE ASSETS - (Tables)

Schedule of Finite-Lived Intangible Assets

NOTE 5—INTANGIBLE ASSETS

The carrying amount and accumulated amortization of intangible assets as of June 30, 2016 and December 31, 2015, consisted of the following (in thousands, except as noted):



		June 30, 2016
	Average Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization			Net Book Value
Indefinite life:
Trademarks and tradenames	N/A	$	10,854	$	—		$	10,854
Finite life:
Customer list	12	13,987		(10,060		)	3,927
Total intangible assets		$	24,841	$	(10,060	)	$	14,781

NOTE 5—INTANGIBLE ASSETS (Continued)



		December 31, 2015
	Average Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization			Net Book Value
Indefinite life:
Trademarks and tradenames	N/A	$	10,854	$	—		$	10,854
Finite life:
Customer list	12	13,987		(9,527		)	4,460
Total intangible assets		$	24,841	$	(9,527	)	$	15,314

Schedule of Indefinite-Lived Intangible Assets

NOTE 5—INTANGIBLE ASSETS

The carrying amount and accumulated amortization of intangible assets as of June 30, 2016 and December 31, 2015, consisted of the following (in thousands, except as noted):



		June 30, 2016
	Average Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization			Net Book Value
Indefinite life:
Trademarks and tradenames	N/A	$	10,854	$	—		$	10,854
Finite life:
Customer list	12	13,987		(10,060		)	3,927
Total intangible assets		$	24,841	$	(10,060	)	$	14,781

NOTE 5—INTANGIBLE ASSETS (Continued)



		December 31, 2015
	Average Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization			Net Book Value
Indefinite life:
Trademarks and tradenames	N/A	$	10,854	$	—		$	10,854
Finite life:
Customer list	12	13,987		(9,527		)	4,460
Total intangible assets		$	24,841	$	(9,527	)	$	15,314

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

Accumulated amortization and expected future annual amortization expense are as follows (in thousands):



Accumulated amortization at June 30, 2016	$	10,060
Estimated amortization expense for:
Remainder of 2016	537
2017	877
2018	719
2019	589
2020	483
2021 through 2022	722
Total	$	13,987

DEBT - (Tables)

Schedule of Long-term Debt Instruments

Debt consisted of the following as of June 30, 2016 and December 31, 2015 (in thousands, except percent data):



	June 30, 2016		December 31, 2015
Revolving Credit Facility with interest ranging from the lender's prime rate plus up to 1.0% to LIBOR plus up to 2.0% (2.28% at June 30, 2016)	$	269,700	$	253,600
Second Lien Loan with interest of LIBOR plus 6.25%, with 1.0% LIBOR floor, net of unamortized discount of $1,887 in 2016 and $2,034 in 2015 (7.25% at June 30, 2016)	473,764		476,966
Total indebtedness	$	743,464	$	730,566

EQUITY-BASED COMPENSATION - (Tables)

Schedule of Share-based Compensation, Stock Options and Restricted Stock Units, Activity

The following table summarizes equity-based compensation activity for the six months ended June 30, 2016 (in thousands):



	Neff Corporation			Neff Holdings
	RSUs		Options	Options
Balance as of January 1, 2016	243		696	1,265
Granted	—		—	—
Exercised	(44	)	—	—
Forfeited	—		—	—
Balance as of June 30, 2016	199		696	1,265

Vested	—		72	1,265
Unvested	199		624	—
Total	199		696	1,265

DERIVATIVE FINANCIAL INSTRUMENTS - (Tables)

Schedule of Interest Rate Derivatives

The fixed rate follows the schedule below:



April 8, 2016 to April 9, 2017	1.1570	%
April 10, 2017 to April 8, 2018	1.6810	%
April 9, 2018 to April 7, 2019	1.9610	%
April 8, 2019 to April 8, 2020	2.1430	%

Reclassification out of Accumulated Other Comprehensive Income

The following tables provide details regarding the Company's derivative financial instruments (in thousands):



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2016		2015		2016		2015
	Loss Recognized in Earnings (a)		Gain Recognized in Earnings(a)		Loss Recognized in Earnings (a)		Gain Recognized in Earnings(a)
Interest Rate Swap	$	1,828	$	1,007	$	6,482	$	119



	June 30, 2016		December 31, 2015
	Fair Value of Derivative(b)		Fair Value of Derivative(b)
Interest Rate Swap (Note 9)	$	8,063	$	1,880


(a)	Classified in Other expenses (income)—Loss (gain) on interest rate swap


(b)	Classified in Liabilities—

FAIR VALUE DISCLOSURES - (Tables)

Schedule of Fair Value, Liabilities Measured on Recurring Basis

The following table provides fair value measurement information of the Company's financial liability measured on a recurring basis as of June 30, 2016 (in thousands):



	Fair Value Measurements Using:
	Quoted Prices in Active Markets		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)
Interest Rate Swap	$	—	$	8,063	$	—

SUPPLEMENTAL CONSOLIDATING STATEMENTS (Tables)

Condensed Consolidating Balance Sheet



	Neff Rental LLC			Neff LLC		Neff Holdings LLC		Neff Corporation Stand Alone			Eliminations			Neff Corporation
ASSETS

Cash and cash equivalents	$	287		$	—	$	—	$	2		$	—		$	289
Accounts receivable, net	70,328			—		—		—			—			70,328
Inventories	1,766			—		—		—			—			1,766
Rental equipment, net	457,470			—		—		—			—			457,470
Property and equipment, net	33,473			—		—		—			—			33,473
Prepaid expenses and other assets	14,488			—		—		—			—			14,488
Goodwill	60,599			—		—		—			—			60,599
Investment in subsidiary	—			67,427		67,427		166,406			(301,260		)	—
Intercompany	6,490			—		—		(6,490		)	—			—
Intangible assets, net	15,314			—		—		—			—			15,314
Total assets	$	660,215		$	67,427	$	67,427	$	159,918		$	(301,260	)	$	653,727

LIABILITIES AND STOCKHOLDERS' DEFICIT / MEMBERS' DEFICIT

Liabilities
Accounts payable	$	18,948		$	—	$	—	$	—		$	—		$	18,948
Accrued expenses and other liabilities	31,412			—		—		—			—			31,412
Revolving credit facility	253,600			—		—		—			—			253,600
Second lien loan, net	476,966			—		—		—			—			476,966
Payable pursuant to tax receivable agreement	—			—		—		29,133			—			29,133
Deferred tax liability, net	—			—		—		9,458			—			9,458
Total liabilities	$	780,926		$	—	$	—	$	38,591		$	—		$	819,517

Stockholders' deficit / members' deficit
Class A Common Stock	$	—		$	—	$	—	$	104		$	—		$	104
Class B Common Stock	—			—		—		150			—			150
Additional paid-in capital	—			—		—		34,085			(146,143		)	(112,058		)
Retained earnings	—			—		—		17,190			—			17,190
Members' deficit	(188,138		)	—		—		—			188,138			—
Accumulated surplus	67,427			67,427		67,427		—			(202,281		)	—
Total stockholders' deficit / members' deficit	(120,711		)	67,427		67,427		51,529			(160,286		)	(94,614		)
Non-controlling interest	—			—		—		69,798			(140,974		)	(71,176		)
Total stockholders' deficit / members' deficit and non-controlling interest	(120,711		)	67,427		67,427		121,327			(301,260		)	(165,790		)
Total liabilities and stockholders' deficit / members' deficit and non-controlling interest	$	660,215		$	67,427	$	67,427	$	159,918		$	(301,260	)	$	653,727

NEFF CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET

JUNE 30, 2016

(in thousands)



	Neff Rental LLC			Neff LLC		Neff Holdings LLC		Neff Corporation Stand Alone			Eliminations			Neff Corporation
ASSETS

Cash and cash equivalents	$	263		$	—	$	—	$	—		$	—		$	263
Accounts receivable, net	61,994			—		—		—			—			61,994
Inventories	2,066			—		—		—			—			2,066
Rental equipment, net	488,388			—		—		—			—			488,388
Property and equipment, net	36,825			—		—		—			—			36,825
Prepaid expenses and other assets	16,213			—		—		—			—			16,213
Goodwill	60,644			—		—		—			—			60,644
Investment in subsidiary	—			78,793		78,793		162,387			(319,973		)	—
Intercompany	6,488			—		—		(6,488		)	—			—
Intangible assets, net	14,781			—		—		—			—			14,781
Total assets	$	687,662		$	78,793	$	78,793	$	155,899		$	(319,973	)	$	681,174

LIABILITIES AND STOCKHOLDERS' DEFICIT / MEMBERS' DEFICIT

Liabilities
Accounts payable	$	23,324		$	—	$	—	$	—		$	—		$	23,324
Accrued expenses and other liabilities	38,692			—		—		—			—			38,692
Revolving credit facility	269,700			—		—		—			—			269,700
Second lien loan, net	473,764			—		—		—			—			473,764
Payable pursuant to tax receivable agreement	—			—		—		29,809			—			29,809
Deferred tax liability, net	—			—		—		8,957			—			8,957
Total liabilities	$	805,480		$	—	$	—	$	38,766		$	—		$	844,246

Stockholders' deficit / members' deficit
Class A Common Stock	$	—		$	—	$	—	$	90		$	—		$	90
Class B Common Stock	—			—		—		150			—			150
Additional paid-in capital	—			—		—		27,437			(146,143		)	(118,706		)
Retained earnings	—			—		—		19,658			—			19,658
Members' deficit	(196,611		)	—		—		—			196,611			—
Accumulated surplus	78,793			78,793		78,793		—			(236,379		)	—
Total stockholders' deficit / members' deficit	(117,818		)	78,793		78,793		47,335			(185,911		)	(98,808		)
Non-controlling interest	—			—		—		69,798			(134,062		)	(64,264		)
Total stockholders' deficit / members' deficit and non-controlling interest	(117,818		)	78,793		78,793		117,133			(319,973		)	(163,072		)
Total liabilities and stockholders' deficit / members' deficit and non-controlling interest	$	687,662		$	78,793	$	78,793	$	155,899		$	(319,973	)	$	681,174

Condensed Consolidating Statement of Operations



	Neff Rental LLC			Neff LLC		Neff Holdings LLC		Neff Corporation Stand Alone			Eliminations			Neff Corporation
Revenues
Rental revenues	$	158,961		$	—	$	—	$	—		$	—		$	158,961
Equipment sales	12,961			—		—		—			—			12,961
Parts and service	6,391			—		—		—			—			6,391
Total revenues	178,313			—		—		—			—			178,313
Cost of revenues
Cost of equipment sold	8,390			—		—		—			—			8,390
Depreciation of rental equipment	40,727			—		—		—			—			40,727
Cost of rental revenues	37,370			—		—		—			—			37,370
Cost of parts and service	3,570			—		—		—			—			3,570
Total cost of revenues	90,057			—		—		—			—			90,057
Gross profit	88,256			—		—		—			—			88,256
Other operating expenses
Selling, general and administrative expenses	44,758			—		—		—			—			44,758
Other depreciation and amortization	5,118			—		—		—			—			5,118
Total other operating expenses	49,876			—		—		—			—			49,876
Income from operations	38,380			—		—		—			—			38,380
Other expenses (income)
Interest expense	21,267			—		—		—			—			21,267
Adjustment to tax receivable agreement	—			—		—		(2,887		)	—			(2,887		)
Gain on interest rate swap	(119		)	—		—		—			—			(119		)
Amortization of debt issue costs	752			—		—		—			—			752
Total other expenses (income)	21,900			—		—		(2,887		)	—			19,013
Income before income taxes	16,480			—		—		2,887			—			19,367
Equity earnings in subsidiaries	—			16,453		16,453		6,779			(39,685		)	—
Provision for income taxes	(27		)	—		—		(1,318		)	—			(1,345		)
Net income	16,453			16,453		16,453		8,348			(39,685		)	18,022
Less: net income attributable to non-controlling interest	9,674			9,674		9,674		—			(19,348		)	9,674
Net income attributable to Neff Corporation	$	6,779		$	6,779	$	6,779	$	8,348		$	(20,337	)	$	8,348



	Neff Rental LLC			Neff LLC		Neff Holdings LLC		Neff Corporation Stand Alone			Eliminations			Neff Corporation
Revenues
Rental revenues	$	91,474		$	—	$	—	$	—		$	—		$	91,474
Equipment sales	4,941			—		—		—			—			4,941
Parts and service	3,245			—		—		—			—			3,245
Total revenues	99,660			—		—		—			—			99,660
Cost of revenues
Cost of equipment sold	2,963			—		—		—			—			2,963
Depreciation of rental equipment	22,761			—		—		—			—			22,761
Cost of rental revenues	21,675			—		—		—			—			21,675
Cost of parts and service	1,799			—		—		—			—			1,799
Total cost of revenues	49,198			—		—		—			—			49,198
Gross profit	50,462			—		—		—			—			50,462
Other operating expenses
Selling, general and administrative expenses	23,387			—		—		—			—			23,387
Other depreciation and amortization	2,594			—		—		—			—			2,594
Total other operating expenses	25,981			—		—		—			—			25,981
Income from operations	24,481			—		—		—			—			24,481
Other expenses
Interest expense	10,476			—		—		—			—			10,476
Adjustment to tax receivable agreement	—			—		—		262			—			262
Loss on interest rate swap	1,828			—		—		—			—			1,828
Amortization of debt issue costs	370			—		—		—			—			370
Total other expenses	12,674			—		—		262			—			12,936
Income (loss) before income taxes	11,807			—		—		(262		)	—			11,545
Equity earnings in subsidiaries	—			11,757		11,757		4,438			(27,952		)	—
Provision for income taxes	(50		)	—		—		(1,556		)	—			(1,606		)
Net income	11,757			11,757		11,757		2,620			(27,952		)	9,939
Less: net income attributable to non-controlling interest	—			—		7,319		—			—			7,319
Net income attributable to Neff Corporation	$	11,757		$	11,757	$	4,438	$	2,620		$	(27,952	)	$	2,620



	Neff Rental LLC			Neff LLC		Neff Holdings LLC		Neff Corporation Stand Alone			Eliminations			Neff Corporation
Revenues
Rental revenues	$	172,651		$	—	$	—	$	—		$	—		$	172,651
Equipment sales	10,043			—		—		—			—			10,043
Parts and service	6,550			—		—		—			—			6,550
Total revenues	189,244			—		—		—			—			189,244
Cost of revenues
Cost of equipment sold	6,074			—		—		—			—			6,074
Depreciation of rental equipment	44,926			—		—		—			—			44,926
Cost of rental revenues	41,608			—		—		—			—			41,608
Cost of parts and service	3,604			—		—		—			—			3,604
Total cost of revenues	96,212			—		—		—			—			96,212
Gross profit	93,032			—		—		—			—			93,032
Other operating expenses
Selling, general and administrative expenses	47,909			—		—		—			—			47,909
Other depreciation and amortization	5,335			—		—		—			—			5,335
Total other operating expenses	53,244			—		—		—			—			53,244
Income from operations	39,788			—		—		—			—			39,788
Other expenses
Interest expense	21,125			—		—		—			—			21,125
Adjustment to tax receivable agreement	—			—		—		676			—			676
Loss on interest rate swap	6,482			—		—		—			—			6,482
Amortization of debt issue costs	765			—		—		—			—			765
Total other expenses	28,372			—		—		676			—			29,048
Income (loss) before income taxes	11,416			—		—		(676		)	—			10,740
Equity earnings in subsidiaries	—			11,366		11,366		4,316			(27,048		)	—
Provision for income taxes	(50		)	—		—		(1,172		)	—			(1,222		)
Net income	11,366			11,366		11,366		2,468			(27,048		)	9,518
Less: net income attributable to non-controlling interest	—			—		7,050		—			—			7,050
Net income attributable to Neff Corporation	$	11,366		$	11,366	$	4,316	$	2,468		$	(27,048	)	$	2,468



	Neff Rental LLC			Neff LLC		Neff Holdings LLC		Neff Corporation Stand Alone			Eliminations			Neff Corporation
Revenues
Rental revenues	$	84,820		$	—	$	—	$	—		$	—		$	84,820
Equipment sales	6,174			—		—		—			—			6,174
Parts and service	3,233			—		—		—			—			3,233
Total revenues	94,227			—		—		—			—			94,227
Cost of revenues
Cost of equipment sold	4,058			—		—		—			—			4,058
Depreciation of rental equipment	21,213			—		—		—			—			21,213
Cost of rental revenues	19,511			—		—		—			—			19,511
Cost of parts and service	1,807			—		—		—			—			1,807
Total cost of revenues	46,589			—		—		—			—			46,589
Gross profit	47,638			—		—		—			—			47,638
Other operating expenses
Selling, general and administrative expenses	22,468			—		—		—			—			22,468
Other depreciation and amortization	2,657			—		—		—			—			2,657
Total other operating expenses	25,125			—		—		—			—			25,125
Income from operations	22,513			—		—		—			—			22,513
Other expenses (income)
Interest expense	10,753			—		—		—			—			10,753
Adjustment to tax receivable agreement	—			—		—		(3,408		)	—			(3,408		)
Gain on interest rate swap	(1,007		)	—		—		—			—			(1,007		)
Amortization of debt issue costs	381			—		—		—			—			381
Total other expenses (income)	10,127			—		—		(3,408		)	—			6,719
Income before income taxes	12,386			—		—		3,408			—			15,794
Equity earnings in subsidiaries	—			12,373		12,373		5,098			(29,844		)	—
Provision for income taxes	(13		)	—		—		(1,087		)	—			(1,100		)
Net income	12,373			12,373		12,373		7,419			(29,844		)	14,694
Less: net income attributable to non-controlling interest	7,275			7,275		7,275		—			(14,550		)	7,275
Net income attributable to Neff Corporation	$	5,098		$	5,098	$	5,098	$	7,419		$	(15,294	)	$	7,419

Condensed Consolidating Statement of Cash Flow

SUPPLEMENTAL UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2016

(in thousands)



	Neff Rental LLC			Neff LLC			Neff Holdings LLC			Neff Corporation Stand Alone			Eliminations			Neff Corporation
Cash Flows from Operating Activities
Net income	$	11,366		$	11,366		$	11,366		$	2,468		$	(27,048	)	$	9,518
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	49,726			—			—			—			—			49,726
Amortization of debt issue costs	765			—			—			—			—			765
Amortization of intangible assets	535			—			—			—			—			535
Amortization of original issue discount	147			—			—			—			—			147
Gain on sale of equipment	(3,969		)	—			—			—			—			(3,969		)
Provision for bad debt	862			—			—			—			—			862
Equity-based compensation	1,098			—			—			—			—			1,098
Deferred income taxes	50			—			—			1,172			—			1,222
Adjustment to tax receivable agreement	—			—			—			676			—			676
Unrealized loss on interest rate swap	6,183			—			—			—			—			6,183
Equity earnings in subsidiaries	—			(11,366		)	(11,366		)	(4,316		)	27,048			—
Changes in operating assets and liabilities:
Accounts receivable	7,472			—			—			—			—			7,472
Inventories, prepaid expenses and other assets	(1,267		)	—			—			—			—			(1,267		)
Accounts payable	(324		)	—			—			—			—			(324		)
Accrued expenses and other liabilities	882			—			—			—			—			882
Net cash provided by operating activities	73,526			—			—			—			—			73,526
Cash Flows from Investing Activities
Purchases of rental equipment	(76,557		)	—			—			—			—			(76,557		)
Proceeds from sale of equipment	10,043			—			—			—			—			10,043
Purchases of property and equipment	(8,648		)	—			—			—			—			(8,648		)
Net cash used in investing activities	(75,162		)	—			—			—			—			(75,162		)
Cash Flows from Financing Activities
Repayments under revolving credit facility	(66,400		)	—			—			—			—			(66,400		)
Borrowings under revolving credit facility	82,500			—			—			—			—			82,500
Debt issue costs	(1,570		)	—			—			—			—			(1,570		)
Common stock repurchases	—			—			—			(9,433		)	—			(9,433		)
Common unit sales/repurchases	(9,433		)	—			—			9,433			—			—
Second Lien Loan prepayment	(3,349		)	—			—			—			—			(3,349		)
Distribution to member	(138		)	—			—			—			—			(138		)
Intercompany	2			—			—			(2		)	—			—
Net cash provided by (used in) financing activities	1,612			—			—			(2		)	—			1,610
Net decrease in cash and cash equivalents	(24		)	—			—			(2		)	—			(26		)
Cash and cash equivalents, beginning of period	287			—			—			2			—			289
Cash and cash equivalents, end of period	$	263		$	—		$	—		$	—		$	—		$	263

BUSINESS AND ORGANIZATION - Additional Information (Details) (USD $)

0 Months Ended

Jun. 30, 2016

Neff Holdings LLC

Dec. 31, 2015

Neff Holdings LLC

Nov. 26, 2014

IPO [Member]

Common Class A

Nov. 26, 2014

IPO [Member]

Common Class A

Class of Stock [Line Items]

Stock issued during period (in shares)

10,476,190

Price of stock for public offering (in dollars per share)

$ 15.00

Ownership percentage by parent

37.60%

41.00%

BASIS OF PRESENTATION - Additional Information (Details)

6 Months Ended

Jun. 30, 2016

segment

Accounting Policies [Abstract]

Number of operating segments corresponding to the number of regions in which entity operates

5

Number of reportable segments

1

NON-CONTROLLING INTEREST - Schedule of Ownership of Common Units (Details)

Jun. 30, 2016

Dec. 31, 2015

Neff Holdings LLC

Noncontrolling Interest [Line Items]

Common Unit, Issued

23,977,339

25,332,406.000

Neff Holdings LLC

Noncontrolling Interest [Line Items]

Ownership percentage by non-controlling interest

62.40%

59.00%

Ownership percentage by parent

37.60%

41.00%

Aggregate Ownership of Noncontrolling Interest

100.00%

Common Class A |
Neff Holdings LLC |
Parent Company [Member]

Noncontrolling Interest [Line Items]

Common Unit, Issued

9,025,714

10,380,781

Common Class B |
Neff Holdings LLC |
Noncontrolling Interest [Member]

Noncontrolling Interest [Line Items]

Common Unit, Issued

14,951,625

NON-CONTROLLING INTEREST - Schedule of Equity by Non-controlling Interest (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Jun. 30, 2016

Jun. 30, 2015

Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]

Beginning balance

$ (71,176)

Net income attributable to non-controlling interest

7,319

7,275

7,050

9,674

Distribution to member

(138)

Ending balance

$ (64,264)

NON-CONTROLLING INTEREST - Additional Information (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Jun. 30, 2016

Jun. 30, 2015

Dec. 31, 2015

Noncontrolling Interest [Line Items]

Distribution to members

$ 138

$ 0

Payable pursuant to tax receivable agreement

29,809

29,133

Adjustment to Tax Receivable Agreement

$ 262

$ (3,408)

$ 676

$ (2,887)

Neff Holdings LLC

Noncontrolling Interest [Line Items]

Ownership percentage by parent

37.60%

41.00%

Ownership percentage by non-controlling interest

62.40%

59.00%

EARNINGS PER SHARE - Computation of Basic and Diluted Earnings Per Share (Details) (USD $)

3 Months Ended

6 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Jun. 30, 2016

Jun. 30, 2015

Nov. 30, 2015

Numerator:

Net income attributable to Neff Corporation

$ 2,620,000

$ 7,419,000

$ 2,468,000

$ 8,348,000

Add dilutive effect of the following (in shares)

Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount

700,000

Common Class A

Denominator for diluted net income per share of Class A common stock:

Weighted average shares of Class A common stock outstanding

9,158,000

10,482,000

9,755,000

10,479,000

Add dilutive effect of the following (in shares)

Weighted average shares of Class A common stock outstanding, diluted

9,481,000

12,036,000

9,916,000

12,033,000

Net income attributable to Neff Corporation per share of Class A common stock, basic (in dollars per share)

$ 0.29

$ 0.71

$ 0.25

$ 0.80

Net income attributable to Neff Corporation per share of Class A common stock, diluted (in dollars per share)

$ 0.28

$ 0.62

$ 0.25

$ 0.69

Stock repurchase program, authorized amount (in dollars)

25,000,000

Stock repurchased and retired during period (in shares)

1,399,275

Stock repurchased and retired during period, value (in dollars)

9,400,000

Stock repurchase program, remaining authorized repurchase amount (in dollars)

14,700,000

Retained Earnings

Numerator:

Net income attributable to Neff Corporation

$ 2,620,000

$ 7,419,000

$ 2,468,000

$ 8,348,000

INTANGIBLE ASSETS - Schedule of Carrying Amount and Accumulated Amortization of Intangible Assets (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

6 Months Ended

12 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Jun. 30, 2016

Jun. 30, 2015

Dec. 31, 2015

Finite-Lived Intangible Assets [Line Items]

Gross Carrying Amount

$ 24,841

Accumulated Amortization

(10,060)

(9,527)

Net Book Value

14,781

15,314

Amortization of intangible assets

535

643

Customer Lists

Finite-Lived Intangible Assets [Line Items]

Average Useful Life (in years)

12 years

Gross Carrying Amount

13,987

Accumulated Amortization

(10,060)

(9,527)

Net Book Value

3,927

4,460

Amortization of intangible assets

300

500

600

Trademarks and Trade Names

Finite-Lived Intangible Assets [Line Items]

Gross Carrying Amount

10,854

Net Book Value

$ 10,854

INTANGIBLE ASSETS - Accumulated Amortization and Expected Future Amortization (Details) (USD $)

In Thousands, unless otherwise specified

Jun. 30, 2016

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Accumulated Amortization

$ 10,060

$ 9,527

Estimated amortization expense for:

Remainder of 2016

537

2016

877

2017

719

2018

589

2019

483

2020 through 2022

722

Total

$ 13,987

DEBT - Schedule of Debt (Details) (USD $)

In Thousands, unless otherwise specified

0 Months Ended

Jun. 30, 2016

Dec. 31, 2015

Jun. 30, 2016

Second Lien Loan

Dec. 31, 2015

Second Lien Loan

Jun. 9, 2014

London Interbank Offered Rate (LIBOR)

Second Lien Loan

Jun. 30, 2016

Revolving Credit Facility

Line of Credit

Dec. 31, 2015

Revolving Credit Facility

Line of Credit

Oct. 1, 2010

Revolving Credit Facility

Prime Rate

Line of Credit

Oct. 1, 2010

Revolving Credit Facility

London Interbank Offered Rate (LIBOR)

Line of Credit

Debt Instrument [Line Items]

Revolving credit facility

$ 269,700

$ 253,600

$ 269,700

Long-term Debt

743,464

730,566

476,966

253,600

Second lien loan, net of original issue discount

473,764

476,966

473,764

Debt instrument, basis spread on variable rate

6.25%

1.50%

2.50%

Debt instrument, interest rate, floor of variable rate

1.00%

Line of credit facility, interest rate at period end

2.50%

Original issue discount

$ 2,102

Debt instrument effective interest rate percentage

7.25%

DEBT - Additional Information (Details) (USD $)

6 Months Ended

12 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Dec. 31, 2015

Jun. 30, 2016

Neff Rental LLC

Second Lien Loan

Dec. 31, 2015

Neff Rental LLC

Second Lien Loan

Jun. 30, 2016

Second Lien Loan

Neff Rental LLC

Dec. 31, 2015

Second Lien Loan

Neff Rental LLC

Jun. 30, 2016

Revolving Credit Facility

Neff Rental LLC and Neff LLC

Feb. 25, 2016

Revolving Credit Facility

Neff Rental LLC and Neff LLC

Dec. 31, 2015

Revolving Credit Facility

Neff Rental LLC and Neff LLC

Jun. 9, 2014

Revolving Credit Facility

Neff Rental LLC and Neff LLC

Nov. 20, 2013

Revolving Credit Facility

Neff Rental LLC and Neff LLC

Dec. 31, 2015

Total Leverage Ratio, Range One [Member]

Second Lien Loan

Neff Rental LLC

Debt Instrument [Line Items]

Line of credit facility, maximum borrowing capacity

$ 475,000,000.0

$ 425,000,000.0

Line of credit facility, accordion feature, increase limit

100,000,000.0

25,000,000.0

Revolving credit facility

269,700,000

253,600,000

269,700,000

Secured Debt

475,700,000

Distribution to members

138,000

0

Current availability

201,200,000

Accumulated amortization of deferred finance costs

1,300,000

900,000

4,500,000

4,100,000

Line of credit facility covenants, trigger, minimum availability

47,500,000.0

Outstanding letters of credit

3,900,000

3,700,000

Debt Instrument, Covenant, Total Leverage Ratio, Actual

3.90

Debt Instrument, Covenant, Total Leverage Ratio Requiring Prepayment, Upper Limit

4.00

Debt Instrument, Covenant, Total Leverage Ratio Requiring Prepayment, Lower Limit

3.00

Debt Instrument, Covenant, Required Prepayment, Percentage of Excess Cash Flow

25.00%

Debt Instrument, Covenant, Future Required Prepayment

$ 3,300,000

EQUITY-BASED COMPENSATION EQUITY-BASED COMPENSATION - Schedule of Stock Option Activity (Details)

In Thousands, unless otherwise specified

6 Months Ended

Jun. 30, 2016

Stock options outstanding (in shares)

Beginning balance

696

Granted

0

Exercised

0

Forfeited

0

Ending balance

696

Number of Vested and Unvested Awards (in shares)

Vested

72

Unvested

624

Neff Holdings LLC

Stock options outstanding (in shares)

Beginning balance

1,265

Granted

0

Exercised

0

Forfeited

0

Ending balance

1,265

Number of Vested and Unvested Awards (in shares)

Vested

1,265

Unvested

0

Restricted Stock Units (RSUs)

Restricted stock outstanding (in shares)

Beginning balance

243

Granted

0

Exercised

(44)

Forfeited

0

Ending balance

199

Number of Vested and Unvested Awards (in shares)

Vested

0

Unvested

199

EQUITY-BASED COMPENSATION - Additional Information (Details) (USD $)

In Thousands, except Share data, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Share-based compensation

$ 1,098

$ 674

Common stock, conversion ratio, common unit to Class A common stock

1

Neff Holdings LLC

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Share-based compensation

$ 300

$ 1,100

$ 700

Incentive Plan 2014

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized

1,500,000

Number of additional shares available

500,000

DERIVIATIVE FINANCIAL INSTRUMENTS - Schedule of Derivative Fixed Interest Rates (Details)

Apr. 8, 2016

Apr. 8, 2019

Scenario, Forecast

Apr. 9, 2018

Scenario, Forecast

Apr. 10, 2017

Scenario, Forecast

Derivative [Line Items]

Derivative, fixed interest rate

1.157%

2.143%

1.961%

1.681%

DERIVATIVE FINANCIAL INSTRUMENTS - Schedule of Derivative Financial Instruments (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Jun. 30, 2016

Jun. 30, 2015

Dec. 31, 2015

Derivative Instruments, Gain (Loss) [Line Items]

Gain Recognized in Earnings(a)

$ (1,828)

$ 1,007

$ (6,482)

$ 119

Interest Rate Swap |
Not Designated as Hedging Instrument [Member]

Derivative Instruments, Gain (Loss) [Line Items]

Gain Recognized in Earnings(a)

(1,828)

1,007

(6,482)

119

Fair Value of Derivative(b)

1,880

Fair Value, Inputs, Level 2 [Member] |
Interest Rate Swap |
Not Designated as Hedging Instrument [Member]

Derivative Instruments, Gain (Loss) [Line Items]

Fair Value of Derivative(b)

$ 8,063

DERIVATIVE FINANCIAL INSTRUMENTS - Additional Information (Details) (USD $)

3 Months Ended

6 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Jun. 30, 2016

Jun. 30, 2015

Dec. 31, 2015

Mar. 24, 2015

Derivative Instruments, Gain (Loss) [Line Items]

Loss Recognized in Earnings

$ 1,828,000

$ (1,007,000)

$ 6,482,000

$ (119,000)

Unrealized gain (loss) on interest rate swap

(6,183,000)

218,000

Interest Rate Swap |
Not Designated as Hedging Instrument [Member]

Derivative Instruments, Gain (Loss) [Line Items]

Derivative liability, notional amount

200,000,000.0

Loss Recognized in Earnings

1,828,000

(1,007,000)

6,482,000

(119,000)

Unrealized gain (loss) on interest rate swap

(1,600,000)

1,100,000

(6,200,000)

200,000

Gain (loss) on settlement payments for derivatives

(200,000)

100,000

(300,000)

100,000

Fair value of derivative liability

$ 1,880,000

INCOME TAXES - Additional Information (Details)

6 Months Ended

12 Months Ended

Jun. 30, 2016

Dec. 31, 2016

Scenario, Forecast

Income Tax Contingency [Line Items]

Effective Income Tax Rate Reconciliation, Percent

11.40%

15.60%

Effective Income Tax Rate Reconciliation,Other Reconciling Items, Percent

4.20%

FAIR VALUE DISCLOSURES - (Details) (Interest Rate Swap, USD $)

In Thousands, unless otherwise specified

Jun. 30, 2016

Fair Value, Measurements, Recurring

Fair Value Inputs, Level 1

Jun. 30, 2016

Fair Value, Measurements, Recurring

Fair Value Inputs, Level 3

Dec. 31, 2015

Not Designated as Hedging Instrument [Member]

Jun. 30, 2016

Not Designated as Hedging Instrument [Member]

Fair Value, Inputs, Level 2 [Member]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Derivative Liability

$ 0

Fair Value of Derivative(b)

$ 1,880

$ 8,063

SUPPLEMENTAL CONSOLIDATING STATEMENTS - Condensed Consolidating Balance Sheet (Details) (USD $)

In Thousands, unless otherwise specified

Jun. 30, 2016

Dec. 31, 2015

Jun. 30, 2015

Dec. 31, 2014

ASSETS

Cash and cash equivalents

$ 263

$ 289

$ 225

$ 207

Accounts receivable, net

61,994

70,328

Inventories

2,066

1,766

Rental equipment, net

488,388

457,470

Property and equipment, net

36,825

33,473

Prepaid expenses and other assets

16,213

14,488

Goodwill

60,644

60,599

Investment in Subsidiary

0

Intercompany

0

Intangible assets, net

14,781

15,314

Total assets

681,174

653,727

Liabilities

Accounts payable

23,324

18,948

Accrued expenses and other liabilities

38,692

31,412

Revolving credit facility

269,700

253,600

Second lien loan, net of original issue discount

473,764

476,966

Payable pursuant to tax receivable agreement

29,809

29,133

Deferred tax liability, net

8,957

9,458

Total liabilities

844,246

819,517

Stockholders' deficit

Additional paid-in capital

(118,706)

(112,058)

Retained earnings

19,658

17,190

Members' deficit

0

Accumulated surplus

0

Total stockholders' deficit

(98,808)

(94,614)

Non-controlling interest

(64,264)

(71,176)

Total stockholders' deficit and non-controlling interest

(163,072)

(165,790)

Total liabilities and stockholders' deficit and non-controlling interest

681,174

653,727

Eliminations

ASSETS

Cash and cash equivalents

0

Accounts receivable, net

0

Inventories

0

Rental equipment, net

0

Property and equipment, net

0

Prepaid expenses and other assets

0

Goodwill

0

Investment in Subsidiary

(319,973)

(301,260)

Intercompany

0

Intangible assets, net

0

Total assets

(319,973)

(301,260)

Liabilities

Accounts payable

0

Accrued expenses and other liabilities

0

Revolving credit facility

0

Second lien loan, net of original issue discount

0

Payable pursuant to tax receivable agreement

0

Deferred tax liability, net

0

Total liabilities

0

Stockholders' deficit

Additional paid-in capital

(146,143)

Retained earnings

0

Members' deficit

196,611

188,138

Accumulated surplus

(236,379)

(202,281)

Total stockholders' deficit

(185,911)

(160,286)

Non-controlling interest

(134,062)

(140,974)

Total stockholders' deficit and non-controlling interest

(319,973)

(301,260)

Total liabilities and stockholders' deficit and non-controlling interest

(319,973)

(301,260)

Neff Rental LLC |
Reportable Legal Entities

ASSETS

Cash and cash equivalents

263

287

223

205

Accounts receivable, net

61,994

70,328

Inventories

2,066

1,766

Rental equipment, net

488,388

457,470

Property and equipment, net

36,825

33,473

Prepaid expenses and other assets

16,213

14,488

Goodwill

60,644

60,599

Investment in Subsidiary

0

Intercompany

6,488

6,490

Intangible assets, net

14,781

15,314

Total assets

687,662

660,215

Liabilities

Accounts payable

23,324

18,948

Accrued expenses and other liabilities

38,692

31,412

Revolving credit facility

269,700

253,600

Second lien loan, net of original issue discount

473,764

476,966

Payable pursuant to tax receivable agreement

0

Deferred tax liability, net

0

Total liabilities

805,480

780,926

Stockholders' deficit

Additional paid-in capital

0

Retained earnings

0

Members' deficit

(196,611)

(188,138)

Accumulated surplus

78,793

67,427

Total stockholders' deficit

(117,818)

(120,711)

Non-controlling interest

0

Total stockholders' deficit and non-controlling interest

(117,818)

(120,711)

Total liabilities and stockholders' deficit and non-controlling interest

687,662

660,215

Neff LLC |
Reportable Legal Entities

ASSETS

Cash and cash equivalents

0

Accounts receivable, net

0

Inventories

0

Rental equipment, net

0

Property and equipment, net

0

Prepaid expenses and other assets

0

Goodwill

0

Investment in Subsidiary

78,793

67,427

Intercompany

0

Intangible assets, net

0

Total assets

78,793

67,427

Liabilities

Accounts payable

0

Accrued expenses and other liabilities

0

Revolving credit facility

0

Second lien loan, net of original issue discount

0

Payable pursuant to tax receivable agreement

0

Deferred tax liability, net

0

Total liabilities

0

Stockholders' deficit

Additional paid-in capital

0

Retained earnings

0

Members' deficit

0

Accumulated surplus

78,793

67,427

Total stockholders' deficit

78,793

67,427

Non-controlling interest

0

Total stockholders' deficit and non-controlling interest

78,793

67,427

Total liabilities and stockholders' deficit and non-controlling interest

78,793

67,427

Neff Holdings LLC |
Reportable Legal Entities

ASSETS

Cash and cash equivalents

0

Accounts receivable, net

0

Inventories

0

Rental equipment, net

0

Property and equipment, net

0

Prepaid expenses and other assets

0

Goodwill

0

Investment in Subsidiary

78,793

67,427

Intercompany

0

Intangible assets, net

0

Total assets

78,793

67,427

Liabilities

Accounts payable

0

Accrued expenses and other liabilities

0

Revolving credit facility

0

Second lien loan, net of original issue discount

0

Payable pursuant to tax receivable agreement

0

Deferred tax liability, net

0

Total liabilities

0

Stockholders' deficit

Additional paid-in capital

0

Retained earnings

0

Members' deficit

0

Accumulated surplus

78,793

67,427

Total stockholders' deficit

78,793

67,427

Non-controlling interest

0

Total stockholders' deficit and non-controlling interest

78,793

67,427

Total liabilities and stockholders' deficit and non-controlling interest

78,793

67,427

Neff Corporation |
Reportable Legal Entities

ASSETS

Cash and cash equivalents

0

2

Accounts receivable, net

0

Inventories

0

Rental equipment, net

0

Property and equipment, net

0

Prepaid expenses and other assets

0

Goodwill

0

Investment in Subsidiary

162,387

166,406

Intercompany

(6,488)

(6,490)

Intangible assets, net

0

Total assets

155,899

159,918

Liabilities

Accounts payable

0

Accrued expenses and other liabilities

0

Revolving credit facility

0

Second lien loan, net of original issue discount

0

Payable pursuant to tax receivable agreement

29,809

29,133

Deferred tax liability, net

8,957

9,458

Total liabilities

38,766

38,591

Stockholders' deficit

Additional paid-in capital

27,437

34,085

Retained earnings

19,658

17,190

Members' deficit

0

Accumulated surplus

0

Total stockholders' deficit

47,335

51,529

Non-controlling interest

69,798

Total stockholders' deficit and non-controlling interest

117,133

121,327

Total liabilities and stockholders' deficit and non-controlling interest

155,899

159,918

Common Class A

Stockholders' deficit

Common stock

90

104

Common Class A |
Eliminations

Stockholders' deficit

Common stock

0

Common Class A |
Neff Rental LLC |
Reportable Legal Entities

Stockholders' deficit

Common stock

0

Common Class A |
Neff LLC |
Reportable Legal Entities

Stockholders' deficit

Common stock

0

Common Class A |
Neff Holdings LLC |
Reportable Legal Entities

Stockholders' deficit

Common stock

0

Common Class A |
Neff Corporation |
Reportable Legal Entities

Stockholders' deficit

Common stock

90

104

Common Class B

Stockholders' deficit

Common stock

150

Common Class B |
Eliminations

Stockholders' deficit

Common stock

0

Common Class B |
Neff Rental LLC |
Reportable Legal Entities

Stockholders' deficit

Common stock

0

Common Class B |
Neff LLC |
Reportable Legal Entities

Stockholders' deficit

Common stock

0

Common Class B |
Neff Holdings LLC |
Reportable Legal Entities

Stockholders' deficit

Common stock

0

Common Class B |
Neff Corporation |
Reportable Legal Entities

Stockholders' deficit

Common stock

$ 150

SUPPLEMENTAL CONSOLIDATING STATEMENTS - Condensed Consolidating Statement of Operations (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Jun. 30, 2016

Jun. 30, 2015

Revenues

Rental revenues

$ 91,474

$ 84,820

$ 172,651

$ 158,961

Equipment sales

4,941

6,174

10,043

12,961

Parts and service

3,245

3,233

6,550

6,391

Total revenues

99,660

94,227

189,244

178,313

Cost of revenues

Cost of equipment sold

2,963

4,058

6,074

8,390

Depreciation of rental equipment

22,761

21,213

44,926

40,727

Cost of rental revenues

21,675

19,511

41,608

37,370

Cost of parts and service

1,799

1,807

3,604

3,570

Total cost of revenues

49,198

46,589

96,212

90,057

Gross profit

50,462

47,638

93,032

88,256

Other operating expenses

Selling, general and administrative expenses

23,387

22,468

47,909

44,758

Other depreciation and amortization

2,594

2,657

5,335

5,118

Total other operating expenses

25,981

25,125

53,244

49,876

Income from operations

24,481

22,513

39,788

38,380

Other expenses (income)

Interest expense

10,476

10,753

21,125

21,267

Adjustment to Tax Receivable Agreement

262

(3,408)

676

(2,887)

Loss (gain) on interest rate swap

1,828

(1,007)

6,482

(119)

Amortization of debt issue costs

370

381

765

752

Total other expenses (income)

12,936

6,719

29,048

19,013

Income before income taxes

11,545

15,794

10,740

19,367

Equity earnings in subsidiaries

0

Provision for income taxes

(1,606)

(1,100)

(1,222)

(1,345)

Net income

9,939

14,694

9,518

18,022

Less: net income attributable to non-controlling interest

7,319

7,275

7,050

9,674

Net income attributable to Neff Corporation

2,620

7,419

2,468

8,348

Eliminations

Revenues

Rental revenues

0

Equipment sales

0

Parts and service

0

Total revenues

0

Cost of revenues

Cost of equipment sold

0

Depreciation of rental equipment

0

Cost of rental revenues

0

Cost of parts and service

0

Total cost of revenues

0

Gross profit

0

Other operating expenses

Selling, general and administrative expenses

0

Other depreciation and amortization

0

Total other operating expenses

0

Income from operations

0

Other expenses (income)

Interest expense

0

Adjustment to Tax Receivable Agreement

0

Loss (gain) on interest rate swap

0

Amortization of debt issue costs

0

Total other expenses (income)

0

Income before income taxes

0

Equity earnings in subsidiaries

(27,952)

(29,844)

(27,048)

(39,685)

Provision for income taxes

0

Net income

(27,952)

(29,844)

(27,048)

(39,685)

Less: net income attributable to non-controlling interest

0

(14,550)

0

(19,348)

Net income attributable to Neff Corporation

(27,952)

(15,294)

(27,048)

(20,337)

Neff Rental LLC |
Reportable Legal Entities

Revenues

Rental revenues

91,474

84,820

172,651

158,961

Equipment sales

4,941

6,174

10,043

12,961

Parts and service

3,245

3,233

6,550

6,391

Total revenues

99,660

94,227

189,244

178,313

Cost of revenues

Cost of equipment sold

2,963

4,058

6,074

8,390

Depreciation of rental equipment

22,761

21,213

44,926

40,727

Cost of rental revenues

21,675

19,511

41,608

37,370

Cost of parts and service

1,799

1,807

3,604

3,570

Total cost of revenues

49,198

46,589

96,212

90,057

Gross profit

50,462

47,638

93,032

88,256

Other operating expenses

Selling, general and administrative expenses

23,387

22,468

47,909

44,758

Other depreciation and amortization

2,594

2,657

5,335

5,118

Total other operating expenses

25,981

25,125

53,244

49,876

Income from operations

24,481

22,513

39,788

38,380

Other expenses (income)

Interest expense

10,476

10,753

21,125

21,267

Adjustment to Tax Receivable Agreement

0

Loss (gain) on interest rate swap

1,828

(1,007)

6,482

(119)

Amortization of debt issue costs

370

381

765

752

Total other expenses (income)

12,674

10,127

28,372

21,900

Income before income taxes

11,807

12,386

11,416

16,480

Equity earnings in subsidiaries

0

Provision for income taxes

(50)

(13)

(50)

(27)

Net income

11,757

12,373

11,366

16,453

Less: net income attributable to non-controlling interest

0

7,275

0

9,674

Net income attributable to Neff Corporation

11,757

5,098

11,366

6,779

Neff LLC |
Reportable Legal Entities

Revenues

Rental revenues

0

Equipment sales

0

Parts and service

0

Total revenues

0

Cost of revenues

Cost of equipment sold

0

Depreciation of rental equipment

0

Cost of rental revenues

0

Cost of parts and service

0

Total cost of revenues

0

Gross profit

0

Other operating expenses

Selling, general and administrative expenses

0

Other depreciation and amortization

0

Total other operating expenses

0

Income from operations

0

Other expenses (income)

Interest expense

0

Adjustment to Tax Receivable Agreement

0

Loss (gain) on interest rate swap

0

Amortization of debt issue costs

0

Total other expenses (income)

0

Income before income taxes

0

Equity earnings in subsidiaries

11,757

12,373

11,366

16,453

Provision for income taxes

0

Net income

11,757

12,373

11,366

16,453

Less: net income attributable to non-controlling interest

0

7,275

0

9,674

Net income attributable to Neff Corporation

11,757

5,098

11,366

6,779

Neff Holdings LLC |
Reportable Legal Entities

Revenues

Rental revenues

0

Equipment sales

0

Parts and service

0

Total revenues

0

Cost of revenues

Cost of equipment sold

0

Depreciation of rental equipment

0

Cost of rental revenues

0

Cost of parts and service

0

Total cost of revenues

0

Gross profit

0

Other operating expenses

Selling, general and administrative expenses

0

Other depreciation and amortization

0

Total other operating expenses

0

Income from operations

0

Other expenses (income)

Interest expense

0

Adjustment to Tax Receivable Agreement

0

Loss (gain) on interest rate swap

0

Amortization of debt issue costs

0

Total other expenses (income)

0

Income before income taxes

0

Equity earnings in subsidiaries

11,757

12,373

11,366

16,453

Provision for income taxes

0

Net income

11,757

12,373

11,366

16,453

Less: net income attributable to non-controlling interest

7,319

7,275

7,050

9,674

Net income attributable to Neff Corporation

4,438

5,098

4,316

6,779

Neff Corporation |
Reportable Legal Entities

Revenues

Rental revenues

0

Equipment sales

0

Parts and service

0

Total revenues

0

Cost of revenues

Cost of equipment sold

0

Depreciation of rental equipment

0

Cost of rental revenues

0

Cost of parts and service

0

Total cost of revenues

0

Gross profit

0

Other operating expenses

Selling, general and administrative expenses

0

Other depreciation and amortization

0

Total other operating expenses

0

Income from operations

0

Other expenses (income)

Interest expense

0

Adjustment to Tax Receivable Agreement

262

(3,408)

676

(2,887)

Loss (gain) on interest rate swap

0

Amortization of debt issue costs

0

Total other expenses (income)

262

(3,408)

676

(2,887)

Income before income taxes

(262)

3,408

(676)

2,887

Equity earnings in subsidiaries

4,438

5,098

4,316

6,779

Provision for income taxes

(1,556)

(1,087)

(1,172)

(1,318)

Net income

2,620

7,419

2,468

8,348

Less: net income attributable to non-controlling interest

0

Net income attributable to Neff Corporation

$ 2,620

$ 7,419

$ 2,468

$ 8,348

SUPPLEMENTAL CONSOLIDATING STATEMENTS - Condensed Consolidating Statement of Cash Flows (Details) (USD $)

In Thousands, unless otherwise specified

6 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Cash Flows from Operating Activities

Net income

$ 9,518

$ 18,022

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

49,726

45,202

Amortization of debt issue costs

765

752

Amortization of intangible assets

535

643

Amortization of original issue discount

147

120

Gain on sale of equipment

(3,969)

(4,571)

Provision for bad debt

862

825

Equity-based compensation

1,098

674

Deferred income taxes

1,222

1,212

Adjustment to Tax Receivable Agreement

676

(2,887)

Unrealized Gain (Loss) on Derivatives and Commodity Contracts

6,183

(218)

Equity earnings in subsidiaries

0

Changes in operating assets and liabilities:

Accounts receivable

7,472

6,060

Inventories, prepaid expenses and other assets

(1,267)

(955)

Accounts payable

(324)

(2,271)

Accrued expenses and other liabilities

882

(1,905)

Net cash provided by operating activities

73,526

60,703

Cash Flows from Investing Activities

Purchases of rental equipment

(76,557)

(111,095)

Proceeds from sale of equipment

10,043

12,961

Purchases of property and equipment

(8,648)

(10,068)

Net cash used in investing activities

(75,162)

(108,202)

Cash Flows from Financing Activities

Repayments under revolving credit facility

(66,400)

(53,111)

Borrowings under revolving credit facility

82,500

100,911

Payment of costs directly associated with the issuance of Class A common stock

0

(283)

Debt issue costs

(1,570)

0

Common stock repurchases

(9,433)

0

Common unit sales/repurchases

0

Second Lien Loan prepayment

(3,349)

0

Distribution to member

(138)

0

Intercompany

0

Net cash provided by financing activities

1,610

47,517

Net (decrease) increase in cash and cash equivalents

(26)

18

Cash and cash equivalents, beginning of period

289

207

Cash and cash equivalents, end of period

263

225

Eliminations

Cash Flows from Operating Activities

Net income

(27,048)

(39,685)

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

0

Amortization of debt issue costs

0

Amortization of intangible assets

0

Amortization of original issue discount

0

Gain on sale of equipment

0

Provision for bad debt

0

Equity-based compensation

0

Deferred income taxes

0

Adjustment to Tax Receivable Agreement

0

Unrealized Gain (Loss) on Derivatives and Commodity Contracts

0

Equity earnings in subsidiaries

27,048

39,685

Changes in operating assets and liabilities:

Accounts receivable

0

Inventories, prepaid expenses and other assets

0

Accounts payable

0

Accrued expenses and other liabilities

0

Net cash provided by operating activities

0

Cash Flows from Investing Activities

Purchases of rental equipment

0

Proceeds from sale of equipment

0

Purchases of property and equipment

0

Net cash used in investing activities

0

Cash Flows from Financing Activities

Repayments under revolving credit facility

0

Borrowings under revolving credit facility

0

Payment of costs directly associated with the issuance of Class A common stock

0

Debt issue costs

0

Common stock repurchases

0

Common unit sales/repurchases

0

Second Lien Loan prepayment

0

Distribution to member

0

Intercompany

0

Net cash provided by financing activities

0

Net (decrease) increase in cash and cash equivalents

0

Cash and cash equivalents, beginning of period

0

Cash and cash equivalents, end of period

0

Neff Rental LLC |
Reportable Legal Entities

Cash Flows from Operating Activities

Net income

11,366

16,453

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

49,726

45,202

Amortization of debt issue costs

765

752

Amortization of intangible assets

535

643

Amortization of original issue discount

147

120

Gain on sale of equipment

(3,969)

(4,571)

Provision for bad debt

862

825

Equity-based compensation

1,098

674

Deferred income taxes

50

0

Adjustment to Tax Receivable Agreement

0

Unrealized Gain (Loss) on Derivatives and Commodity Contracts

6,183

(218)

Equity earnings in subsidiaries

0

Changes in operating assets and liabilities:

Accounts receivable

7,472

6,060

Inventories, prepaid expenses and other assets

(1,267)

(955)

Accounts payable

(324)

(2,271)

Accrued expenses and other liabilities

882

(2,010)

Net cash provided by operating activities

73,526

60,704

Cash Flows from Investing Activities

Purchases of rental equipment

(76,557)

(111,095)

Proceeds from sale of equipment

10,043

12,961

Purchases of property and equipment

(8,648)

(10,068)

Net cash used in investing activities

(75,162)

(108,202)

Cash Flows from Financing Activities

Repayments under revolving credit facility

(66,400)

(53,111)

Borrowings under revolving credit facility

82,500

100,911

Payment of costs directly associated with the issuance of Class A common stock

0

Debt issue costs

(1,570)

Common stock repurchases

0

Common unit sales/repurchases

(9,433)

Second Lien Loan prepayment

(3,349)

Distribution to member

(138)

Intercompany

2

(284)

Net cash provided by financing activities

1,612

47,516

Net (decrease) increase in cash and cash equivalents

(24)

18

Cash and cash equivalents, beginning of period

287

205

Cash and cash equivalents, end of period

263

223

Neff LLC |
Reportable Legal Entities

Cash Flows from Operating Activities

Net income

11,366

16,453

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

0

Amortization of debt issue costs

0

Amortization of intangible assets

0

Amortization of original issue discount

0

Gain on sale of equipment

0

Provision for bad debt

0

Equity-based compensation

0

Deferred income taxes

0

Adjustment to Tax Receivable Agreement

0

Unrealized Gain (Loss) on Derivatives and Commodity Contracts

0

Equity earnings in subsidiaries

(11,366)

(16,453)

Changes in operating assets and liabilities:

Accounts receivable

0

Inventories, prepaid expenses and other assets

0

Accounts payable

0

Accrued expenses and other liabilities

0

Net cash provided by operating activities

0

Cash Flows from Investing Activities

Purchases of rental equipment

0

Proceeds from sale of equipment

0

Purchases of property and equipment

0

Net cash used in investing activities

0

Cash Flows from Financing Activities

Repayments under revolving credit facility

0

Borrowings under revolving credit facility

0

Payment of costs directly associated with the issuance of Class A common stock

0

Debt issue costs

0

Common stock repurchases

0

Common unit sales/repurchases

0

Second Lien Loan prepayment

0

Distribution to member

0

Intercompany

0

Net cash provided by financing activities

0

Net (decrease) increase in cash and cash equivalents

0

Cash and cash equivalents, beginning of period

0

Cash and cash equivalents, end of period

0

Neff Holdings LLC |
Reportable Legal Entities

Cash Flows from Operating Activities

Net income

11,366

16,453

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

0

Amortization of debt issue costs

0

Amortization of intangible assets

0

Amortization of original issue discount

0

Gain on sale of equipment

0

Provision for bad debt

0

Equity-based compensation

0

Deferred income taxes

0

Adjustment to Tax Receivable Agreement

0

Unrealized Gain (Loss) on Derivatives and Commodity Contracts

0

Equity earnings in subsidiaries

(11,366)

(16,453)

Changes in operating assets and liabilities:

Accounts receivable

0

Inventories, prepaid expenses and other assets

0

Accounts payable

0

Accrued expenses and other liabilities

0

Net cash provided by operating activities

0

Cash Flows from Investing Activities

Purchases of rental equipment

0

Proceeds from sale of equipment

0

Purchases of property and equipment

0

Net cash used in investing activities

0

Cash Flows from Financing Activities

Repayments under revolving credit facility

0

Borrowings under revolving credit facility

0

Payment of costs directly associated with the issuance of Class A common stock

0

Debt issue costs

0

Common stock repurchases

0

Common unit sales/repurchases

0

Second Lien Loan prepayment

0

Distribution to member

0

Intercompany

0

Net cash provided by financing activities

0

Net (decrease) increase in cash and cash equivalents

0

Cash and cash equivalents, beginning of period

0

Cash and cash equivalents, end of period

0

Parent Company [Member] |
Reportable Legal Entities

Cash Flows from Operating Activities

Net income

2,468

8,348

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

0

Amortization of debt issue costs

0

Amortization of intangible assets

0

Amortization of original issue discount

0

Gain on sale of equipment

0

Provision for bad debt

0

Equity-based compensation

0

Deferred income taxes

1,172

1,212

Adjustment to Tax Receivable Agreement

676

(2,887)

Unrealized Gain (Loss) on Derivatives and Commodity Contracts

0

Equity earnings in subsidiaries

(4,316)

(6,779)

Changes in operating assets and liabilities:

Accounts receivable

0

Inventories, prepaid expenses and other assets

0

Accounts payable

0

Accrued expenses and other liabilities

0

105

Net cash provided by operating activities

0

(1)

Cash Flows from Investing Activities

Purchases of rental equipment

0

Proceeds from sale of equipment

0

Purchases of property and equipment

0

Net cash used in investing activities

0

Cash Flows from Financing Activities

Repayments under revolving credit facility

0

Borrowings under revolving credit facility

0

Payment of costs directly associated with the issuance of Class A common stock

(283)

Debt issue costs

0

Common stock repurchases

(9,433)

Common unit sales/repurchases

9,433

Second Lien Loan prepayment

0

Distribution to member

0

Intercompany

(2)

284

Net cash provided by financing activities

(2)

1

Net (decrease) increase in cash and cash equivalents

(2)

0

Cash and cash equivalents, beginning of period

2

Cash and cash equivalents, end of period

$ 0

$ 2