S-1 1 a2221239zs-1.htm S-1

Use these links to rapidly review the document
TABLE OF CONTENTS
Index to Financial Statements

Table of Contents

As filed with the Securities and Exchange Commision on September 3, 2014

Registration No. 333-                        


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



Neff Corporation
(Exact name of registrant as specified in its charter)



Delaware
(State or other jurisdiction of
incorporation or organization)
  7359
(Primary Standard Industrial
Classification Code Number)
   
(I.R.S. Employer
Identification No.)



3750 N.W. 87th Avenue, Suite 400
Miami, FL 33178
(305) 513-3350

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)



Mark Irion
Chief Financial Officer
Neff Corporation
3750 N.W. 87th Avenue, Suite 400
Miami, FL 33178
(305) 513-3350

(Name, address, including zip code, and telephone number, including area code, of agent for service)



Copies to:

Kirk A. Davenport II, Esq.
Dennis Lamont, Esq.
Latham & Watkins LLP
885 Third Avenue, Suite 1000
New York, New York 10022
(212) 906-1200

 

Arthur D. Robinson, Esq.
Lesley C. Peng, Esq.
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, NY 10017
(212) 455-2000



Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this registration statement.

          If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the "Securities Act"), check the following box.    o

          If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Securities Exchange Act of 1934 (the "Exchange Act"). (Check one):

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a smaller reporting company)
  Smaller reporting company o



CALCULATION OF REGISTRATION FEE

       
 
Title of Each Class of Securities to be Registered
  Proposed Maximum Aggregate
Offering Price(1)(2)

  Amount of
Registration Fee

 

Class A common stock, par value $0.01 per share

  $100,000,000   $12,880

 

(1)
Includes additional shares of Class A common stock that the underwriters have the option to purchase.

(2)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act.



          The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

   


Table of Contents

PROSPECTUS (Subject to Completion)

Issued September 3, 2014

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

                   Shares

LOGO

Neff Corporation

CLASS A COMMON STOCK



Neff Corporation is offering                             shares of its Class A common stock. This is our initial public offering and no public market currently exists for our Class A common stock. The initial public offering price is expected to be between $               and $               per share.



We will apply to list our Class A common stock on                                             under the symbol "NEFF".



We will have two classes of common stock outstanding after this offering: Class A common stock and Class B common stock. Each share of Class A common stock and Class B common stock entitles its holder to one vote on all matters presented to our stockholders generally. All of our Class B common stock will be held by Wayzata Opportunities Fund II, L.P. and Wayzata Opportunities Fund Offshore II, L.P., private investment funds managed by Wayzata Investment Partners LLC, which we refer to collectively as "Wayzata." Immediately following this offering, the holders of our Class A common stock will collectively hold 100% of the economic interests in us and          % of the voting power in us, and Wayzata, through its ownership of all of the outstanding Class B common stock, will hold the remaining           % of the voting power in us. As a result, we will be a "controlled company" within the meaning of the corporate governance standards of the                             . We will be a holding company, and upon consummation of this offering and the application of proceeds therefrom our sole asset will be the common units of Neff Holdings LLC ("Neff Holdings"), representing a           % economic interest in Neff Holdings. The remaining          % economic interest in Neff Holdings will be owned by Wayzata through its ownership of common units of Neff Holdings.



We are an "emerging growth company" under applicable federal securities laws and, as such, we have elected to comply with certain reduced public company reporting requirements for this prospectus and future filings.



Investing in our Class A common stock involves risks. Please see "Risk Factors" beginning on page 21.



PRICE $                             A SHARE



 
 
Price to
Public
 
Underwriting
Discounts and
Commissions(1)
 
Proceeds to
Company, Before Expenses

Per Share

  $        $            $         

Total

  $        $            $         

(1)
We have agreed to reimburse the underwriters for certain expenses in connection with this offering. See "Underwriters."

We have granted the underwriters the right to purchase up to an additional                           shares of Class A common stock from us.

The Securities and Exchange Commission (the "SEC") and state securities regulators have not approved or disapproved these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares of Class A common stock to purchasers on or about              , 2014.



MORGAN STANLEY   JEFFERIES   PIPER JAFFRAY

BofA MERRILL LYNCH

 

 

 

WELLS FARGO SECURITIES

   

                           , 2014


Table of Contents


TABLE OF CONTENTS

 
  Page  

PROSPECTUS SUMMARY

    1  

RISK FACTORS

    21  

OUR ORGANIZATIONAL STRUCTURE

    41  

FORWARD-LOOKING STATEMENTS

    44  

MARKET DATA

    45  

DIVIDEND POLICY

    46  

USE OF PROCEEDS

    47  

CAPITALIZATION

    48  

DILUTION

    49  

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

    51  

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

    59  

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

    61  

BUSINESS

    80  

MANAGEMENT

    93  

EXECUTIVE COMPENSATION

    96  

PRINCIPAL STOCKHOLDERS

    110  

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

    111  

DESCRIPTION OF CAPITAL STOCK

    118  

SHARES ELIGIBLE FOR FUTURE SALE

    123  

DESCRIPTION OF CERTAIN INDEBTEDNESS

    125  

MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS TO NON-U.S. HOLDERS OF OUR CLASS A COMMON STOCK

    129  

UNDERWRITERS

    133  

LEGAL MATTERS

    139  

EXPERTS

    139  

WHERE YOU CAN FIND MORE INFORMATION

    139  

INDEX TO FINANCIAL STATEMENTS

    F-1  



        You should rely only on the information contained in this prospectus and any free writing prospectus we have prepared. We have not, and the underwriters have not, authorized anyone to provide you with information or make any representations different from or in addition to those contained in this prospectus or any free writing prospectus we have prepared. We and the underwriters take no responsibility for, and can provide no assurance as to, the reliability of any other information that others may give you. We are offering to sell shares of Class A common stock and are seeking offers to buy shares of our Class A common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of the Class A common stock. Our business, financial condition, results of operations and prospects may have changed since that date.

        Until                         , 2014 (25 days after the commencement of the offering), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

        For investors outside the United States: We have not, and the underwriters have not, done anything that would permit this offering or possession or distribution of this prospectus or any free writing prospectus we may provide to you in connection with this offering in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus and any such free writing prospectus outside of the United States.

        We own or have rights to trademarks, service marks or trade names that we use in connection with the operation of our business. In addition, our names, logos and website names and addresses are our service


Table of Contents

marks or trademarks. Other trademarks, service marks and trade names appearing in this prospectus are the property of their respective owners. Some of the trademarks we own or have the right to use include "Neff Rental" and "We Care More." Solely for convenience, the trademarks, service marks, tradenames and copyrights referred to in this prospectus are listed without the ©, ® and TM symbols, but we will assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and tradenames.


Table of Contents

 


PROSPECTUS SUMMARY

        This summary highlights information contained elsewhere in this prospectus. It does not contain all of the information that you may consider important in making your investment decision and is qualified in its entirety by the more detailed information and historical financial statements, including the notes thereto, that are included elsewhere in this prospectus. You should read this entire prospectus carefully and consider, among other things, the matters discussed in the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." Certain statements in this summary are forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from future results contemplated in the forward-looking statements. See "Forward-Looking Statements."

        Except as otherwise stated or required by the context, in this prospectus, the "Company," "we," "our" and "us" refer (1) prior to the consummation of the Organizational Transactions described under "—The Organizational Transactions," to Neff Holdings LLC ("Neff Holdings") and, unless the context otherwise requires, its consolidated subsidiaries, and (2) after the consummation of the Organizational Transactions described under "—The Organizational Transactions," to Neff Corporation and, unless the context otherwise requires, its consolidated subsidiaries, including Neff Holdings.

Our Company

        We are a leading regional equipment rental company in the United States, focused on the fast-growing Sunbelt states. We offer a broad array of equipment rental solutions for our diverse customer base, including non-residential construction, oil and gas and residential construction customers. Our broad fleet of equipment includes earthmoving, material handling, aerial and other rental equipment, which we package together to meet the specific needs of our customers. We consider the earthmoving equipment category to be a core competency of our Company and a key differentiator of our business. We believe that the earthmoving equipment category offers a return on investment and future growth prospects that are among the strongest in the equipment rental industry. For the 12 months ended June 30, 2014, we generated revenues of $346.9 million (87% from equipment rentals) and Adjusted EBITDA (as defined below) of $167.4 million.

Our Branch Network and Fleet

        As of June 30, 2014, we operated 64 branches organized into operating clusters in five regions in the United States: Florida, Atlantic, Central, Southeastern and Western. We are strategically located in markets that we believe feature high levels of population growth as well as high levels of construction activity over the near term. We believe that our clustering approach enables us to establish a strong local presence in targeted markets and meet the needs of our customers that have multiple projects within a specific region. Furthermore, we have invested in and developed a highly successful fleet management capability which allows us to share equipment among our branches in order to improve time utilization (as defined below) and drive a higher return on invested capital.


Revenues by Region for the 12 Months Ended June 30, 2014

GRAPHIC

 

1


Table of Contents


Our Five Regions

GRAPHIC

        We seek to improve returns on our investments in rental equipment by applying a highly-disciplined asset-management approach to acquiring, renting, maintaining and divesting our fleet. This effort is supported by our customized asset tracking software and a rigorous maintenance and repair program, which promotes the extended useful life of our equipment. As of June 30, 2014, our rental fleet consisted of over 13,500 units of equipment with an original equipment cost ("OEC," which we define as the cost originally paid to manufacturers) of approximately $708.3 million and an average age of approximately 45 months. Our earthmoving fleet represented 54% of OEC and had an average age of approximately 33 months. We believe that our focus on earthmoving equipment positions us to take advantage of future growth opportunities in our key end-markets.


Rental Fleet by Equipment Category as a Percentage of OEC as of June 30, 2014

GRAPHIC

Industry Overview

        According to the American Rental Association, the North American rental industry grew from approximately $18 billion in annual rental revenues in 1997 to approximately $38 billion in 2013, representing a compounded annual growth rate ("CAGR") of approximately 5%. The primary

 

2


Table of Contents

end-markets served by the rental industry include the broader industrial and construction markets, which include non-residential construction, oil and gas and residential construction. The American Rental Association projects that the North American rental industry will grow by approximately 9% annually through 2018, resulting in estimated annual rental revenues of $57 billion by 2018.


North America Rental Industry Revenues: 1997 - 2018E

GRAPHIC

Source: American Rental Association Rental Market Monitor.

        We believe that part of this industry growth will be driven by the ongoing secular shift in North America toward reliance on equipment rental instead of ownership, as evidenced by the increasing percentage of new equipment sold to rental companies as a percentage of the total amount of new equipment sold, which we refer to as the penetration rate. According to the American Rental Association'sEquipment Rental Penetration Index, the penetration rate rose from 41% in 2003 to 53% in 2013.


North America Equipment Rental Penetration Rate Index

GRAPHIC

Source: American Rental Association Equipment Rental Penetration Index.

        We believe that the shift from owning to renting equipment in North America will continue as construction and industrial firms recognize the advantages of renting rather than owning equipment, and that this trend will continue to result in increased penetration rates in the future. Renting equipment allows firms to:

    avoid large equipment capital investments;

    access a broad selection of equipment featuring current technology;

    obtain equipment on an as-needed basis;

    reduce costs related to idle equipment;

    reduce storage and maintenance costs; and

    reduce depreciation charges.

 

3


Table of Contents

        Furthermore, the material handling and aerial categories each have higher penetration rates than the earthmoving equipment category. Given the relatively lower penetration rate in the earthmoving equipment category, we expect growth in this category to outpace the overall equipment rental market.


North America Penetration Rates by Category for 2013 Equipment Rental Market

GRAPHIC

Source: Yengst Associates Market Machinery Research Rental Industry Report. Data segmented by the Company to reflect the three primary equipment classes.

        The equipment rental industry in North America is highly fragmented. According to Yengst Associates, the industry is comprised of approximately 4,000 rental business locations that offer construction equipment as a primary source of revenue. In 2013, according to the Rental Equipment Register, revenues of the 15 largest equipment rental companies accounted for approximately 30% of the total market. We believe that larger rental companies will be able to continue to increase their market share and outperform smaller, independent companies by better meeting customer demands to deliver a broad selection of high-quality and reliable equipment in a timely and efficient manner.

Our Business Strengths

        Well Positioned to Capitalize on Key End-Market Growth.    For the 12 months ended June 30, 2014, approximately 87% of our rental revenues were derived from five key end-markets: infrastructure, non-residential construction, oil and gas, municipal and residential construction. The U.S. equipment rental industry has historically benefitted from growth in these end-markets, which are expected to grow at a weighted average CAGR of approximately 7% from 2014 to 2018, as shown below. We believe that our current business is well aligned with these growing end-markets, and that we will continue to benefit from macroeconomic growth.

Our Rental Revenues by End-Market
for the 12 Months Ended June 30, 2014
  Projected End-Market Growth:
2014E - 2018E CAGRs


GRAPHIC

 


GRAPHIC
Source: Company data.   Source: FMI Construction Outlook Q2 2014 data; Oil and Gas from IHS July 2014 data.

        Prominent Position in Fast-Growing Sunbelt States.    60 of our 64 branches are located in the Sunbelt states of Virginia, North Carolina, South Carolina, Florida, Georgia, Alabama, Tennessee, Louisiana,

 

4


Table of Contents

Texas, Arizona, Nevada and California. Our Sunbelt state locations benefit from favorable climate conditions that facilitate year-round construction activity and reduce seasonality in our business. According to the American Rental Association, equipment rental revenue in the states where we have branch locations is expected to grow approximately 10% annually from 2014 to 2018, compared to an average growth rate of approximately 9% for all other states. By clustering our operations and concentrating our branches in these strategic regional markets, we have established a strong local presence and developed significant brand recognition in those markets.

        High-Quality Fleet Focused on Earthmoving Equipment.    We offer our customers a broad array of rental equipment with a focus on the earthmoving category. We believe that we are well positioned to benefit from additional penetration in the earthmoving equipment category, which had a penetration rate of approximately 51% in 2013, compared to approximately 95% for the aerial and 85% for the material handling categories, respectively. As of June 30, 2014, we had over 5,100 units of earthmoving equipment, accounting for 54% of the OEC of our rental fleet. By comparison, as presented below, the earthmoving equipment category represented only 13-22% of the OEC of selected public industry peers.


Percentage of Earthmoving Equipment OEC Among Selected
Public Industry Peers

GRAPHIC

Source: Company data and most recent public filings for selected public industry peers.

        Disciplined Sales Culture Drives Strong Customer Relationships.    We have a diverse base of repeat customers who we believe value our knowledge and expertise. Our customer base includes large and mid-sized construction firms, municipalities, utilities and industrial users. Typically, we serve over 14,000 customers annually. In 2013, no single customer accounted for more than 1% of our total rental revenues and our ten largest customers accounted for approximately 6% of our total rental revenues. Our culture is built around the disciplined use of our customer relationship management system, or "CRM system," at every level of our organization, which we believe provides our employees with the tools and information to efficiently provide customized solutions to our existing and potential customers. In addition, our CRM system automatically notifies our sales force of new construction projects within their territories and provides them with the names and contact information of key contractors. We believe that the consistent and disciplined use of our CRM system is a competitive advantage that has resulted in greater sales coordination, increased corporate control over customer account information, high-quality customer service and higher time utilization.

        Strong Operating Trends.    We have experienced substantial earnings momentum since 2011, driven by the rebound in our end-markets and supported by significant investment in our fleet, which has resulted in an increase in OEC from $471.1 million at December 31, 2011 to $708.3 million at June 30, 2014. In addition, our time utilization has increased from 65% for the year ended December 31, 2011 to 71% for the 12 months ended June 30, 2014, and our rental rates (as defined below) have increased at a CAGR of 8% for that period. We believe that the combination of favorable industry dynamics, significant investments in our fleet and our focus on operating leverage (which has seen our Adjusted EBITDA margin increase from 35% for the year ended December 31, 2011 to 48% for the 12 months ended June 30, 2014) have driven our Adjusted EBITDA from $86.7 million to $167.4 million over this period.

 

5


Table of Contents

        Experienced Management Team.    Our senior management team has significant operating experience in the equipment rental industry and has worked together at our Company for over a decade. Graham Hood, our Chief Executive Officer, has 36 years of rental industry experience and Mark Irion, our Chief Financial Officer, has 16 years of rental industry experience. Our regional Vice Presidents, with an average of 17 years with our Company and 29 years of industry experience, provide us with a stable base of operating management with long-term, local relationships and deep equipment rental industry expertise. This industry expertise, combined with our disciplined sales culture and CRM system, enables our regional management team to respond quickly to changing market conditions.

Our Business Strategy

        Focus on Premium Customer Service to Create Strong Customer Relationships.    We are committed to providing our customers with premium service. We believe that our customers value our strong regional presence, well-established local relationships and full-service branches, which offer 24/7 customer support. Furthermore, our regional presence is supplemented by a national account focus that allows us to differentiate our brand and product offering to our larger customer accounts. We believe that our ability to provide expert advice with respect to earthmoving equipment is an advantage over our competitors. As of June 30, 2014, we have received 98% favorable customer reviews based on our policy of polling a sampling of all customer transactions. We intend to continue to leverage our national account program, our customer service capabilities and our advanced CRM system to retain our existing customers and further penetrate our target customer base.

        Emphasis on Active Asset Management.    We have invested significantly in both customized technologies and the development of our personnel to ensure that we manage our fleet efficiently to increase our returns on invested capital. Our technologies form the basis of our sales force's customer targeting efforts and allow us to improve rental rates and identify equipment demand changes in real time. Our equipment clustering strategy allows us to share and re-deploy equipment among our branches as demand for equipment shifts throughout our branch network. Over time, we have demonstrated our ability to both increase and decrease the age of our fleet in response to changing market conditions. We actively monitor the market environment to determine where investment in fleet assets should be made or when fleet asset divestitures should occur. Our emphasis on active asset management, combined with our rigorous repair and maintenance program, allows us to increase time utilization, extend the useful life of our fleet and results in higher resale value of our equipment.

        Focus on Growing Markets.    We believe that our focus on the non-residential construction, oil and gas and residential construction end-markets positions us to benefit from favorable industry and macroeconomic trends. We believe that all of these end-markets are currently experiencing significant growth and will continue to benefit from investment spending driven by the economic recovery in the United States. FMI Construction Outlook predicts that U.S. infrastructure spending will grow approximately 5% annually through 2018, U.S. non-residential construction spending will grow at 5% annually through 2018, and U.S. residential construction will grow 9% annually through 2018. IHS estimates that oil and gas investment in the United States will grow 9% annually through 2018. We believe that our focus on these end-markets will position us to achieve significant growth in revenues.

        Capitalize on Operating Leverage.    We have a highly scalable business model constructed around our network of 64 full-service branch locations. We believe that our current network can support significant additions to our rental fleet without substantial additional investment in infrastructure, personnel or information technology. We intend to capitalize on anticipated growth opportunities primarily by increasing our fleet size within our existing branch network, using our active asset management capabilities to increase time utilization and improve pricing levels and serving customers who value our equipment mix and service capabilities. We have a proven track record of executing strategic greenfield expansion in our key markets, as evidenced by the successful development of six new branch locations since January 1, 2011. We regularly evaluate greenfield opportunities based on stringent return criteria to identify promising new branch locations, and will continue to monitor opportunities to expand our strategic branch network.

 

6


Table of Contents

 

        Ability to Generate Free Cash Flow.    Our significant rental fleet investment and focus on active asset management provide us the operational flexibility to generate cash flow through different business cycles. We believe that our pro forma liquidity of $         million as of June 30, 2014 and cash flow from operations provide the resources to continue to invest in our rental fleet. Our fleet investments are largely discretionary and we have the ability to temporarily defer capital expenditures or sell used rental equipment to manage cash flows. There is a developed secondary market for used rental equipment, and industry resale values of equipment have averaged approximately 47% of OEC over the past three years. We believe that our focus on cash flow and operating flexibility will allow us to continue to generate strong returns throughout various business cycles.

The Organizational Transactions

        Wayzata Opportunities Fund II, L.P. and Wayzata Opportunities Fund Offshore II, L.P., private investment funds managed by Wayzata Investment Partners LLC (collectively, "Wayzata"), formed Neff Corporation as a Delaware corporation on August 18, 2014 to serve as the issuer of the Class A common stock offered hereby. On or prior to the closing of this offering we will consummate the following organizational transactions:

    we will amend the Neff Holdings LLC Agreement (as defined below) to, among other things, (i) provide for common units, (ii) convert Wayzata's existing membership interest in Neff Holdings and membership interests underlying certain existing options granted by Neff Holdings into common units and (iii) appoint Neff Corporation as the sole managing member of Neff Holdings upon its acquisition of such common units;

    we will amend and restate Neff Corporation's certificate of incorporation to, among other things, (i) provide for Class A common stock and Class B common stock and (ii) convert Wayzata's equity interests in Neff Corporation into shares of Class B common stock;

    we will issue                shares of our Class A common stock to the purchasers in this offering (or                 shares if the underwriters exercise in full their option to purchase additional shares of Class A common stock) in exchange for net proceeds of approximately $         million (or approximately $             million if the underwriters exercise in full their option to purchase additional shares of Class A common stock), after deducting underwriting discounts and commissions but before offering expenses;

    we will use all of the net proceeds from this offering (other than net proceeds received upon exercise of the underwriters' option to purchase additional shares of Class A common stock) to acquire newly-issued common units of Neff Holdings directly from Neff Holdings, at a price equal to the price per share in this offering, less underwriting discounts and commissions, collectively representing        % of Neff Holdings' outstanding membership units;

    we will use all of the net proceeds from this offering received upon exercise of the underwriters' option to purchase additional shares of Class A common stock to purchase directly from Wayzata a number of common units of Neff Holdings at a price equal to the price per share in this offering, less underwriting discounts and commissions and, to the extent the underwriters exercise in full their option to purchase additional shares of Class A common stock, we would acquire a total of        % of Neff Holding's common units then outstanding (and we would cancel a corresponding number of the shares of Class B common stock held by Wayzata);

    Neff Holdings will use the proceeds from the sale of common units to Neff Corporation to (i) repay or prepay certain indebtedness (including any prepayment penalties and accrued interest thereon) and (ii) pay the fees and expenses from this offering. See "Use of Proceeds";

    existing options to purchase membership interests in Neff Holdings will remain outstanding. Upon exercise, each exercising optionholder would execute a joinder to the Tax Receivables Agreement; and

 

7


Table of Contents

    Neff Corporation will enter into a registration rights agreement (the "Registration Rights Agreement") with Wayzata and the individuals who hold existing options granted by Neff Holdings (collectively, our "existing owners") and a tax receivable agreement (the "Tax Receivable Agreement") with our existing owners. For a description of the terms of the Registration Rights Agreement and the Tax Receivable Agreement, see "Certain Relationships and Related Party Transactions."

        We collectively refer to the foregoing transactions as the "Organizational Transactions."

        Immediately following the completion of this offering and the Organizational Transactions:

    Neff Corporation will be a holding company and the sole material asset of Neff Corporation will be common units of Neff Holdings;

    Neff Corporation will be the sole managing member of Neff Holdings and will control the business and affairs of Neff Holdings and its subsidiaries;

    Neff Corporation will own                common units of Neff Holdings representing approximately        % of Neff Holdings' total outstanding membership units (or approximately        %, if the underwriters exercise in full their option to purchase additional shares of Class A common stock);

    Wayzata will own                common units of Neff Holdings representing approximately        % of Neff Holdings' total outstanding membership units (or approximately        %, if the underwriters exercise in full their option to purchase additional shares of Class A common stock). 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 members, for, at Neff Corporation's option, newly-issued shares of Class A common stock on a one-for-one basis or a cash payment equal to a volume weighted average market price of one share of Class A common stock for each common unit redeemed (subject to customary adjustments, including for stock splits, stock dividends and reclassifications) in accordance with the terms of the Neff Holdings LLC Agreement; provided that, at Neff Corporation's election, Neff Corporation may effect a direct exchange of such Class A common stock or such cash for such common units. See "Certain Relationships and Related Party Transactions—Neff Holdings LLC Agreement";

    the purchasers in this offering (i) will own                shares of Neff Corporation's Class A common stock, representing approximately        % of the combined voting power of all of Neff Corporation's common stock (or approximately        % if the underwriters exercise in full their option to purchase additional shares of Class A common stock) and (ii) through Neff Corporation's ownership of Neff Holdings' common units, indirectly will hold approximately         % of the economic interest in the business of Neff Holdings and its subsidiaries (or        % if the underwriters exercise in full their option to purchase additional shares of Class A common stock);

    Wayzata, through (i) its ownership of Neff Corporation's Class B common stock, will have approximately         % of the combined voting power of all of Neff Corporation's common stock (or approximately        % if the underwriters exercise in full their option to purchase additional shares of Class A common stock) and (ii) its ownership of Neff Holdings' common units, will hold approximately        % of the economic interest in the business of Neff Holdings and its subsidiaries (or approximately        % if the underwriters exercise in full their option to purchase additional shares of Class A common stock); and

    certain individuals who hold existing options granted by Neff Holdings will have the right to acquire                         common units of Neff Holdings which, if such existing options were exercised in full, would represent approximately        % of the economic interest in the business of Neff Holdings and its subsidiaries on a fully diluted basis.

        For more information regarding our structure, see "Our Organizational Structure."

 

8


Table of Contents

Ownership Structure

        The following diagram sets forth our ownership structure after giving effect to the Organizational Transactions and this offering:

GRAPHIC

Our Sponsor

        Neff Holdings is owned by Wayzata Opportunities Fund II, L.P. and Wayzata Opportunities Fund Offshore II, L.P., which are investment funds managed by Wayzata Investment Partners LLC ("Wayzata Investment Partners"). Wayzata Investment Partners was formed in May 2004 and is based in Wayzata, Minnesota. The senior management team at Wayzata Investment Partners has significant experience in investing in alternative investments.

        After completion of this offering, Wayzata will continue to control a majority of the voting power of our outstanding common stock. For a discussion of certain risks, potential conflicts and other matters associated with Wayzata's control, see "Risk Factors—Risks Relating to Our Organizational Structure—Wayzata will continue to have substantial control over us after this offering including over decisions that require the approval of stockholders, and its interest in our business may conflict with yours."

Implications of Being an Emerging Growth Company

        As a company with less than $1.0 billion in revenue during our last fiscal year, we qualify as an "emerging growth company" ("EGC") as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), under the rules and regulations of the SEC. An emerging growth company may take

 

9


Table of Contents

advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include:

    a requirement to have only two years of audited financial statements and only two years of related management's discussion and analysis of financial condition and results of operations disclosure;

    reduced disclosure obligations regarding executive compensation in periodic reports;

    no requirement for non-binding advisory votes on executive compensation or golden parachute arrangements; and

    an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act").

        We may take advantage of these provisions for up to five years or such earlier time that we are no longer an emerging growth company. In future years, we will cease to be an emerging growth company if we have more than $1.0 billion in annual revenue, have more than $700 million in market value of our common stock held by non-affiliates, or issue more than $1.0 billion of non-convertible debt securities over a three-year period. We may choose to take advantage of some but not all of these reduced requirements.

        We have elected to take advantage of certain of the reduced disclosure obligations regarding financial statements and executive compensation in this prospectus and may elect to take advantage of other reduced requirements in future filings. As a result, the information we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests.

        The JOBS Act permits an EGC like us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We are choosing to take advantage of this provision and, as a result, we will not be required to comply with new or revised accounting standards until those standards would otherwise apply to private companies. This decision to take advantage of the extended transition period is irrevocable.

Corporate Information

        Neff Corporation is a Delaware corporation. Our principal executive offices are located at 3750 N.W. 87th Avenue, Suite 400, Miami, Florida 33178, and our telephone number is (305) 513-3350. Our website address is www.neffrental.com. The information contained on, or accessible through, our website is not incorporated into this prospectus and is not part of this prospectus.

        After giving effect to the Organizational Transactions, Neff Corporation will be a holding company whose only asset will be        % of the outstanding common units of Neff Holdings, a Delaware limited liability company (or        % if the underwriters exercise in full their option to purchase additional shares of Class A common stock). Neff Holdings was formed by Wayzata to acquire our business in the bankruptcy proceedings of Neff Holdings Corp. pursuant to a plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code. The acquisition was completed on October 1, 2010. We refer to Neff Holdings Corp. and certain of its affiliates as our "Prior Predecessor."

Risk Factors

        Participating in this offering involves substantial risk. Our ability to execute our strategy is also subject to certain risks. The risks described under the heading "Risk Factors" included elsewhere in this prospectus may cause us not to realize the full benefits of our strengths or may cause us to be unable to successfully execute all or part of our strategy. Some of the most significant challenges and risks include the following:

    past economic downturns have had, and future economic downturns could have, a material adverse impact on our business;

 

10


Table of Contents

    our revenues and operating results will fluctuate, which could affect the volatility of the trading of our Class A common stock;

    the equipment rental industry is highly cyclical. Decreases in construction or industrial activities could materially adversely affect our revenues and operating results by decreasing the demand for our equipment or the rental rates or prices we can charge;

    our substantial indebtedness could materially adversely affect our business, financial condition, results of operations and cash flows;

    Wayzata will continue to have substantial control over us after this offering including over decisions that require the approval of stockholders, and its interest in our business may conflict with yours;

    we will depend on distributions from Neff Holdings to pay taxes and expenses, including payments under the Tax Receivable Agreement, but Neff Holdings' ability to make such distributions may be subject to various limitations and restrictions; and

    immediately following the consummation of this offering, Wayzata will directly (through Class B common stock) and indirectly (through ownership of Neff Holdings common units) own interests in us, and Wayzata will have the right to redeem and cause us to redeem, as applicable, such interests pursuant to the terms of the Neff Holdings LLC Agreement.

        Before you invest in our Class A common stock, you should carefully consider all the information in this prospectus, including matters set forth under the heading "Risk Factors."

 

11


Table of Contents

 


THE OFFERING

Issuer

  Neff Corporation.

Shares of Class A common stock offered by us

 

            shares.

Underwriters' option to purchase additional shares of our Class A common stock

 

            shares.

Shares of Class A common stock to be outstanding immediately after this offering

 

            shares, representing a      % voting interest (or          shares, representing a      % voting interest, if the underwriters exercise in full their option to purchase additional shares of Class A common stock).

Shares of Class B common stock to be outstanding immediately after this offering

 

            shares, representing a      % voting interest (or          shares, representing a      % voting interest in us if the underwriters exercise in full their option to purchase additional shares of Class A common stock), all of which will be beneficially owned by Wayzata.

Common units of Neff Holdings to be owned by us immediately after this offering

 

          units representing a      % economic interest in our business (or          units representing a      % economic interest in our business if the underwriters exercise in full their option to purchase additional shares of Class A common stock). Immediately after the offering, Wayzata will own the remaining common units.

Ratio of shares of common stock to common units

 

Our certificate of incorporation and the Neff Holdings LLC Agreement will require that we and Neff Holdings at all times maintain a one-to-one ratio between the number of shares of Class A common stock issued by us and the number of common units owned by us, as well as a one-to-one ratio between the number of shares of Class B common stock owned by Wayzata and the number of common units owned by Wayzata. This construct is intended to result in Wayzata having a voting interest in Neff Corporation that is substantially the same as Wayzata's percentage economic interest in Neff Holdings. Wayzata will own 100% of our outstanding Class B common stock.

Voting rights

 

Holders of our Class A common stock and Class B common stock will vote together as a single class on all matters presented to stockholders for their vote or approval, except as otherwise required by law. Each share of Class A common stock and Class B common stock will entitle its holder to one vote per share on all such matters. See "Description of Capital Stock."

 

12


Table of Contents

Redemption rights of holders of common units

 

The members of Neff Holdings, other than Neff Corporation, from time to time may require Neff Holdings to redeem all or a portion of their common units in exchange for, at Neff Corporation's option, a newly-issued share of our Class A common stock on a one-for-one basis or a cash payment equal to the volume weighted average market price of one share of our Class A common stock for each common unit (subject to customary adjustments, including for stock splits, stock dividends and reclassifications) in accordance with the terms of the Neff Holdings LLC Agreement; provided that, at Neff Corporation's election, Neff Corporation may effect a direct exchange of such Class A common stock or such cash for such common units. See "Certain Relationships and Related Party Transactions—Neff Holdings LLC Agreement."

Registration Rights Agreement

 

Pursuant to the Registration Rights Agreement, we will agree to file registration statements for the sale of the shares of our Class A common stock that are issuable upon redemption or exchange of common units of Neff Holdings upon request and cause those registration statements to be declared effective by the SEC as soon as practicable thereafter. See "Certain Relationships and Related Party Transactions—Registration Rights Agreement."

Use of proceeds

 

We will receive net proceeds from this offering of approximately $        million (or $        million if the underwriters exercise in full their option to purchase additional shares of Class A common stock), after deducting underwriting discounts and commissions but before offering expenses. We will use all of such net proceeds (other than net proceeds received upon exercise of the underwriters' option to purchase additional shares of Class A common stock) to purchase common units directly from Neff Holdings and we will use all net proceeds, if any, received upon exercise of the underwriters' option to purchase additional shares of Class A common stock to purchase common units directly from Wayzata. Neff Holdings will use the proceeds from the sale of common units to Neff Corporation to repay or prepay certain indebtedness (including any prepayment penalties and accrued interest thereon) and to pay the fees and expenses from this offering. See "Use of Proceeds."

 

13


Table of Contents

Dividend policy

 

We do not intend to pay cash dividends on our Class A common stock following this offering. Any declaration and payment of future dividends to holders of our Class A common stock may be limited by restrictive covenants in our debt agreements or the debt agreements of Neff Holdings and its subsidiaries, and will be at the sole discretion of our board of directors and will depend on many factors, including our financial condition, earnings, capital requirements, level of indebtedness, statutory and contractual restrictions applicable to the payment of dividends and other considerations that our board of directors deems relevant. See "Dividend Policy."

Controlled company exemption

 

After completion of this offering, we will be considered a "controlled company" for the purposes of the              listing requirements. As a "controlled company," we are not subject to the requirement that we perform annual performance evaluations of the nominating/corporate governance and compensation committee. As a result, we do not expect to perform annual performance evaluations of the nominating/corporate governance and compensation committee unless and until such time as we are required to do so.

Tax Receivable Agreement

 

We will enter into a Tax Receivable Agreement with Neff Holdings and Wayzata and, if and when the holders of existing options to acquire common units exercise those options and redeem or exchange their common units, with those option holders that will provide for the payment by Neff Corporation to such persons of 85% of the amount of tax benefits, if any, that Neff Corporation actually realizes (or in some circumstances is deemed to realize) as a result of (i) increases in tax basis resulting from any purchase of common units from Wayzata with proceeds from this offering, the use of the proceeds from this offering to repay certain indebtedness of Neff Holdings and any redemptions or exchanges of common units described above under "Redemption rights of holders of common units" and (ii) certain other tax benefits related to our entering into the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement. See "Certain Relationships and Related Party Transactions—Tax Receivable Agreement."

Trading symbol

 

We intend to apply for listing of our Class A common stock on          under the symbol "NEFF".

 

14


Table of Contents

        Unless we indicate otherwise or the context otherwise requires, all information in this prospectus:

    gives effect to the amendment and restatement of the Neff Holdings LLC Agreement that converts all existing membership units into common units, as well as the filing of our amended and restated certificate of incorporation;

    gives effect to the other Organizational Transactions;

    excludes shares of Class A common stock issuable upon exercise of outstanding stock options at an average exercise price of $          per share,            of which are exercisable as of                        , 2014;

    excludes Neff Holdings membership units issuable upon exercise of existing options to acquire membership units in Neff Holdings at an average price (prior to giving effect to the unit split) of $            per unit,            of which are exercisable as of                        , 2014;

    excludes shares of Class A common stock that may be issuable upon exercise of redemption rights of the members of Neff Holdings (or at the election of Neff Corporation, a direct exchange);

    assumes an initial public offering price of $          per share of Class A common stock, which is the midpoint of the range set forth on the cover page of this prospectus; and

    assumes no exercise by the underwriters of their option to purchase          additional shares of Class A common stock from us in this offering. See "Principal Stockholders."

 

15


Table of Contents



SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA

        The following tables present, as of the dates and for the periods indicated, (i) the summary historical consolidated financial and other data for Neff Holdings and its subsidiaries and (ii) the summary unaudited pro forma financial data for Neff Corporation and its subsidiaries, including Neff Holdings. Neff Holdings is the predecessor of the issuer, Neff Corporation, for financial reporting purposes. The historical financial statements of Neff Corporation have not been presented in this "Summary Historical and Pro Forma Consolidated Financial Data" section because it is a newly-incorporated entity, had no assets or liabilities during the periods presented and has had no business transactions or activities to date.

        Neff Holdings is a holding company that conducts no operations and its only material asset as of the consummation of this offering is its membership interests in Neff LLC. Neff LLC is a holding company that conducts no operations and its only material asset is its membership interests in Neff Rental LLC, the principal operating company for our business.

        We have derived the summary historical financial data as of and for the years ended December 31, 2012 and 2013 from the audited consolidated financial statements of Neff Holdings included elsewhere in this prospectus. We have derived the summary historical financial data as of and for the year ended December 31, 2011 from the audited consolidated financial statements of Neff Holdings not included in this prospectus. We have derived the summary historical financial data as of June 30, 2014 and for the six months ended June 30, 2013 and 2014 from the unaudited consolidated financial statements of Neff Holdings included elsewhere in this prospectus. We have derived the summary historical financial data as of June 30, 2013 from the unaudited consolidated financial statements of Neff Holdings not included in this prospectus. In the opinion of management, such unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results for those periods. We have derived the summary historical financial data for the 12 months ended June 30, 2014 by adding the summary historical financial data for the six months ended June 30, 2014 to the summary historical financial data for the year ended December 31, 2013, and then subtracting the summary historical financial data for the six months ended June 30, 2013. This 12-month period has not been audited or reviewed.

        We have derived the summary unaudited pro forma financial data of Neff Corporation presented below from the application of pro forma adjustments to the historical consolidated financial statements of Neff Holdings included elsewhere in this prospectus. See "Unaudited Pro Forma Condensed Consolidated Financial Information." The summary unaudited pro forma financial data for the year ended December 31, 2013 and as of and for the six months ended June 30, 2014 give effect to the Organizational Transactions as described in "Our Organizational Structure" and the consummation of this offering, including the use of the estimated net proceeds of this offering as described in "Use of Proceeds," in each case as if all such transactions had occurred on January 1, 2013, in the case of the unaudited pro forma consolidated statement of operations data, and on June 30, 2014, in the case of the unaudited pro forma consolidated balance sheet data.

        The results of operations for the periods presented below are not necessarily indicative of the results to be expected for any future period and the results for any interim period are not necessarily indicative of the results that may be expected for a full fiscal year. The following summary historical and pro forma consolidated financial data should be read in conjunction with, and is qualified by reference to, "Use of Proceeds," "Capitalization," "Unaudited Pro Forma Condensed Consolidated Financial Information," "Selected Historical Consolidated Financial Data," "Management's Discussion and Analysis of Financial

 

16


Table of Contents

Condition and Results of Operations" and the financial statements and the notes thereto included elsewhere in this prospectus.

 
  Historical Neff Holdings  
 
   
   
   
  Six Months Ended
June 30,
   
 
 
  Year Ended December 31,    
 
 
  12 Months
Ended
June 30, 2014
 
 
  2011   2012   2013   2013   2014  
 
  (in thousands of dollars)
 

Statement of Operations Data:

                                     

Revenues:

                                     

Rental revenues

  $ 197,430   $ 234,609   $ 281,038   $ 130,744   $ 152,626   $ 302,920  

Equipment sales

    36,934     44,828     33,487     13,429     10,794     30,852  

Parts and service

    10,478     11,540     12,682     6,194     6,675     13,163  
                           

Total revenues

    244,842     290,977     327,207     150,367     170,095     346,935  

Cost of revenues:

                                     

Cost of equipment sold

    27,497     25,528     19,204     7,888     6,119     17,435  

Depreciation of rental equipment

    84,438     66,017     70,768     34,667     36,489     72,590  

Cost of rental revenues

    64,824     69,337     74,482     34,819     37,624     77,287  

Cost of parts and service

    6,452     6,982     7,677     3,716     4,094     8,055  
                           

Total cost of revenues

    183,211     167,864     172,131     81,090     84,326     175,367  
                           

Gross profit

    61,631     123,113     155,076     69,277     85,769     171,568  

Other operating expenses:

                                     

Selling, general and administrative expenses

    65,901     71,621     78,617     38,386     40,372     80,603  

Other depreciation and amortization

    11,937     9,041     8,968     4,622     4,708     9,054  

Transaction bonus(1)

                    24,506     24,506  
                           

Total other operating expenses

    77,838     80,662     87,585     43,008     69,586     114,163  
                           

(Loss) income from operations

    (16,207 )   42,451     67,491     26,269     16,183     57,405  

Other Expenses:

   
 
   
 
   
 
   
 
   
 
   
 
 

Interest expense(2)

    16,524     23,221     24,598     12,103     15,119     27,614  

Loss on debt extinguishment(3)

                    15,896     15,896  

Other non-operating expenses, net(4)

    3,267     1,563     1,929     804     2,339     3,464  
                           

Provision for income taxes

    (785 )   (159 )   (471 )   (332 )   (238 )   (377 )
                           

Net (loss) income

  $ (36,783 ) $ 17,508   $ 40,493   $ 13,030   $ (17,409 ) $ 10,054  
                           
                           

Balance Sheet Data (as of period end):

                                     

Cash and cash equivalents

  $ 162   $ 586   $ 190   $ 159   $ 589                   

Rental equipment:

                                     

Rental equipment at cost

    318,855     440,810     516,182     507,691     623,656                   

Accumulated depreciation

    (90,250 )   (124,930 )   (168,926 )   (150,003 )   (197,233 )                 
                             

Rental equipment, net

    228,605     315,880     347,256     357,688     426,423                   

Total assets

    377,052     479,059     526,702     525,632     612,078                   

Total indebtedness(5)

    278,700     342,621     479,200     384,600     896,315                   

Members' surplus (deficiency)

    52,379     71,365     3,082     85,007     (343,684 )                 

Cash Flow Data:

   
 
   
 
   
 
   
 
   
 
   
 
 

Cash flow from operating activities

    44,238     68,331     108,410     50,225     35,576     93,761  

Cash flow from investing activities

    (90,663 )   (131,022 )   (125,332 )   (92,631 )   (106,164 )   (138,865 )

Cash flow from financing activities

    45,684     63,115     16,526     41,979     70,987     45,534  

Other Financial Data:

   
 
   
 
   
 
   
 
   
 
   
 
 

Adjusted EBITDA(6)

    86,663     119,919     150,794     66,589     83,157     167,362  

Capital expenditures:

                                     

Non-rental

    9,592     11,556     11,852     10,626     11,020     12,246  

Rental

    108,606     159,192     144,483     92,950     105,938     157,471  

Proceeds from sales of used equipment

    (36,934 )   (44,828 )   (33,487 )   (13,429 )   (10,794 )   (30,852 )
                           

Net capital expenditures

    81,264     125,920     122,848     90,147     106,164     138,865  
                           
                           

Other Operating Data:

                                     

Average OEC(7)

  $ 470,638   $ 527,266   $ 606,624   $ 587,434   $ 658,764   $ 642,289  

Average fleet age in months (as of period end)

    55     48     46     47     45     45  

Weighted average rate growth(9)

    8.3 %   6.5 %   6.4 %   6.6 %   7.2 %   6.8 %

Time utilization(10)

    65.0 %   68.7 %   70.9 %   70.3 %   70.3 %   70.9 %

 

17


Table of Contents

 

 
  Pro Forma Neff Corporation  
 
  Year Ended December 31,
2013
  Six Months Ended June 30,
2014
 
 
  (in thousands of dollars, except per share data)
 

Statement of Operations Data:

             

Revenues:

             

Rental revenues

  $                $               

Equipment sales

                                   

Parts and service

                                   
           

Total revenues

                                   

Cost of revenues:

             

Cost of equipment sold

                                   

Depreciation of rental equipment

                                   

Cost of rental revenues

                                   

Cost of parts and service

                                   
           

Total cost of revenues

                                   
           

Gross profit

                                   

Other operating expenses:

             

Selling, general and administrative expenses

                                   

Other depreciation and amortization

                                   

Transaction bonus(1)

                                   
           

Total other operating expenses

                                   
           

(Loss) income from operations

                                   

Other Expenses:

   
            
   
            
 

Interest expense(2)

                                   

Loss on debt extinguishment(3)

                                   

Other non-operating expenses, net(4)

                                   
           

Provision for income taxes

                                   
           

Net (loss) income

  $                $               
           
           

Net Income (Loss) Per Share Data(8):

             

Weighted average shares of Class A common stock outstanding:

             

Basic

                                   
           

Diluted

                                   

Net income (loss) available to Class A common stock per share:

             

Basic

                                   
           

Diluted

                                   

Balance Sheet Data (as of period end):

   
 
   
 
 

Cash and cash equivalents

  $                $               

Total assets

                                   

Total indebtedness(5)

                                   

Stockholders' equity (deficiency)

                                   

Other Financial Data:

   
 
   
 
 

Adjusted EBITDA(6)

                                   
           
           

(1)
Represents the transaction bonus paid to certain management and independent members of the board of directors in connection with the Refinancing (as defined below under "Management's Discussion and Analysis of Financial Condition and Results of Operations—Financial Highlights—Refinancing").

(2)
Interest expense excludes the amortization of debt issue costs (see footnote (4)).

(3)
Loss on debt extinguishment includes $8.7 million in unamortized debt issue costs as well as $7.2 million in call premiums.

(4)
Other non-operating expenses, net represents amortization of debt issue costs of $1.2 million, $1.5 million and $1.9 million, for the years ended December 31, 2011, 2012 and 2013, respectively, and $0.8 million and $2.3 million for the six months ended June 30, 2013 and 2014, respectively. Other non-operating expenses, net also includes $1.6 million for reorganizational expenses and $0.5 million for loss on an interest rate swap for the year ended December 31, 2011. Other non-operating expenses, net also includes $0.1 million for loss on an interest rate swap for the year ended December 31, 2012.

(5)
As of June 30, 2014, our outstanding indebtedness consisted of borrowings under the Revolving Credit Facility and the Second Lien Loan. Pro forma Neff Corporation indebtedness reflects the reduction of indebtedness outstanding under the Revolving

 

18


Table of Contents

    Credit Facility and the Second Lien Loan with a portion of with the anticipated net proceeds from this offering, as described under "Use of Proceeds."

(6)
EBITDA is defined as net income (loss) plus interest expense, provision for income taxes, depreciation of rental equipment, other depreciation and amortization and amortization of debt issue costs. Adjusted EBITDA is defined as EBITDA further adjusted to give effect to non-cash and other items that we do not consider to be indicative of our ongoing operations. Adjusted EBITDA is not a measure of performance in accordance with generally accepted accounting principles in the United States, or GAAP, and should not be considered as an alternative to net income (loss) or operating cash flows determined in accordance with GAAP. Additionally, Adjusted EBITDA is not intended to be a measure of cash flow for management's discretionary use, as it excludes certain cash requirements such as interest payments, tax payments and debt service requirements. A similar measure is used in the credit agreements governing our Revolving Credit Facility and the Second Lien Loan. We believe that the inclusion of Adjusted EBITDA in this prospectus is appropriate to provide additional information to investors about our performance. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:


 

    although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements;
     


    it does not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;
     


    it does not reflect changes in, or cash requirements for, our working capital needs;
     


    it does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our significant amount of indebtedness; and
     


    it does not reflect the impact of earnings or charges resulting from matters we do not consider to be indicative of our ongoing operations but may nonetheless have a material impact on our results of operations.

In addition, because not all companies use identical calculations, these presentations of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies, including companies in our industry.


The following table reconciles Adjusted EBITDA to our net (loss) income for the periods indicated:

 
 

Historical Neff Holdings
   
   
   
 
 
   
  Pro Forma Neff Corporation  
 
   
   
   
  Six Months Ended June 30,    
   
 
 
  Year Ended December 31,   12 Months
Ended
June 30,
2014
   
   
   
 
 
   
  Year Ended
December 31,
2013
  Six Months
Ended June 30,
2014
 
 
  2011   2012   2013   2013   2014    
 
 
   
 
 
  (in thousands of dollars)
   
 

Net (loss) income

  $ (36,783 ) $ 17,508   $ 40,493   $ 13,030   $ (17,409 ) $ 10,054       $              $             

Interest expense

    16,524     23,221     24,598     12,103     15,119     27,614                                    

Provision for income taxes

    785     159     471     332     238     377                                    

Depreciation of rental equipment

    84,438     66,017     70,768     34,667     36,489     72,590                                    

Other depreciation and amortization

    11,937     9,041     8,968     4,622     4,708     9,054                                    

Amortization of debt issue costs

          1,461     1,929     804     2,339     3,464                                    
                                       

EBITDA

    78,065     117,407     147,227     65,558     41,484     123,153                                    

Loss on debt extinguishment(a)

                    15,896     15,896                                    

Transaction bonus(b)

                    24,506     24,506                                    

Rental split expense(c)

    1,750     932     2,343     419     745     2,669                                    

Equity compensation expense(d)

    1,891     1,478     1,224     612     526     1,138                                    

Other(e)

    4,957     102                                                    
                                       

Adjusted EBITDA

  $ 86,663   $ 119,919   $ 150,794   $ 66,589   $ 83,157   $ 167,362       $              $             
                                       
                                       

(a)
Represents expenses and realized losses that were incurred in connection with the redemption of our Senior Secured Notes (as defined below under "Management's Discussion and Analysis of Financial Condition and Results of Operations—Financial Highlights—Refinancing").

(b)
Represents the transaction bonus paid to certain management and independent members of the board of directors in connection with the Refinancing. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Financial Highlights—Refinancing."

 

19


Table of Contents

(c)
Represents cash payments made to suppliers of equipment in connection with rental splits, which payments are credited against the purchase price of the applicable equipment if Neff Holdings elects to purchase that equipment. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations" for a discussion of rental splits.

(d)
Represents non-cash equity-based compensation expense recorded in the periods presented in accordance with GAAP.

(e)
Represents (i) certain expenses paid in the period related to the plan of reorganization of our Prior Predecessor, (ii) the adjustment of certain interest rate swaps to fair value, (iii) loss on interest rate swaps and (iv) for the year ended December 31, 2011 only, the impact on the cost of equipment sales of the fair value adjustments made to the book value of our equipment in connection with purchase accounting entries booked in connection with the Acquisition (as defined below under "Management's Discussion and Analysis of Financial Condition and Results of Operations"), eliminating the impact of the increased equipment book values and reflecting the gain on sale of equipment as if they were booked according to our Prior Predecessor's depreciation schedules. See "Management's Discussion and Analysis of Financial Condition and Results of Operations."
(7)
OEC is defined as the cost originally paid to manufacturers. We include the original amount payable to manufacturers in our average OEC as if the piece of equipment was owned from the date of receipt into our rental fleet.

(8)
Pro forma net income (loss) per share is calculated by dividing the pro forma net income (loss) by the weighted average shares outstanding. Because of the losses shown in the six months ended June 30, 2014, the incremental shares resulting from the assumed exercise of options would have been antidilutive and are therefore excluded.

(9)
Weighted average rate growth is calculated as the change in weighted average rental rate over the applicable period.

(10)
Time utilization is defined as the daily average OEC of equipment on rent, divided by the OEC of all equipment in the rental fleet during the relevant period.

 

20


Table of Contents


RISK FACTORS

        In addition to the other information included in this prospectus, you should carefully consider the risks described below before deciding to invest in our Class A common stock. Any of the following risks could materially and adversely affect our business, financial condition, results of operations or cash flows. In such case, you may lose all or part of your original investment in our Class A common stock.

Risks Relating to Our Business

         Past economic downturns have had, and future economic downturns could have, a material adverse impact on our business.

        Economic downturns in the areas we do business adversely affect us as our end-markets are in the highly cyclical construction area. A slowdown in the economic recovery or worsening of economic conditions, in particular with respect to U.S. construction and industrial activities, could have a material adverse effect on our overall business, results of operations and financial condition in a number of ways, including the following:

    decrease in expected levels of infrastructure spending, including lower than expected government funding for economic stimulus projects;

    a decrease in expected levels of capital projects;

    a lack of availability of credit or an increase in interest rates due to further deterioration or volatility of the banking system or financial markets;

    delay or inability to pay for equipment rentals or fulfill other terms of rental agreements by customers;

    a delay or decrease in equipment rentals by existing or potential customers; or

    an increase in our equipment inventory costs.

        During the financial crisis of 2007-2009, there was an abrupt decline in non-residential construction activity that materially adversely affected customer demand and equipment rental volumes. This material adverse effect resulted in rental rate reductions and led to a corresponding decline in revenue of Neff Holdings Corp., our Prior Predecessor, thereby resulting in an adverse impact on its cash flows and liquidity. As a result, our Prior Predecessor initiated proceedings under Chapter 11 of the U.S. Bankruptcy Code in May 2010. Pursuant to the plan of reorganization approved by the bankruptcy court, substantially all of the Prior Predecessor's assets were acquired by Neff Holdings and its subsidiaries (entities formed by Wayzata to acquire our Prior Predecessor's assets in the bankruptcy proceedings) and its subsidiaries in October 2010.

         Our revenues and operating results will fluctuate, which could affect the volatility of the trading of our Class A common stock.

        Our revenues and operating results fluctuate from quarter to quarter due to various factors, including:

    changes in rental rates or changes in demand for our equipment due to economic conditions, competition, weather or other factors;

    seasonal rental and purchasing patterns of our customers, with rental and purchasing activity tending to be lower in the winter due to weather and the holiday season;

    the cyclical nature of the businesses of our construction customers;

    the timing of capital expenditures for rental fleet expansion;

21


Table of Contents

    changes in the cost and availability of equipment we purchase, including changes in manufacturer incentive programs;

    changes in corporate spending for plants and facilities or changes in government spending for infrastructure projects;

    severe weather and seismic conditions temporarily affecting the regions we serve (such as hurricanes and flooding) or the suppliers that supply us with equipment;

    increased costs, including fuel costs and other raw material costs (such as the price of steel);

    other cost fluctuations, such as costs for employee-related compensation and healthcare benefits;

    potential enactment of new legislation affecting our operations, rental equipment or labor relations;

    the timing and cost of opening new rental or customer repair center locations or acquiring new locations; and

    our effectiveness in integrating new or acquired rental or customer repair center locations and branch locations, in integrating acquisitions with existing operations, or in achieving the anticipated benefits of such integrations, expansions and acquisitions.

        Any of these factors could increase the volatility, or materially adversely affect, the trading price of our Class A common stock.

         The equipment rental industry is highly cyclical. Decreases in construction or industrial activities could materially adversely affect our revenues and operating results by decreasing the demand for our equipment or the rental rates or prices we can charge.

        The equipment rental industry is highly cyclical and its revenues are closely tied to general economic conditions and to conditions in the non-residential construction industry in particular. Our products and services are used primarily in non-residential construction and oil and gas end-markets and, to a lesser extent, in industrial activity and residential construction end-markets. These are cyclical businesses that are sensitive to changes in general economic conditions. Weakness in our end-markets, such as a decline in non-residential construction or industrial activity, may in the future lead to a decrease in the demand for our equipment or the rental rates or prices we can charge. For example, in 2009 and 2010, there were significant decreases in non-residential construction activity compared to prior periods, which materially adversely affected our results for those periods. Factors that may cause weakness in our end-markets include:

    weakness in the economy or the onset of a new recession;

    slowdowns in residential construction in the geographic regions in which we operate;

    reductions in spending levels by customers;

    unfavorable credit markets affecting end-user access to capital;

    adverse changes in the federal and local government infrastructure spending;

    an increase in the cost of construction materials;

    adverse weather conditions which may affect a particular region;

    oversupply of available commercial real estate in the markets we serve;

    increases in interest rates; and

    terrorism or hostilities involving the United States.

22


Table of Contents

        Future declines in non-residential construction and industrial activity could materially adversely affect our operating results by decreasing our revenues and gross profit margins. Because of our focus on the earthmoving equipment category, which represented approximately 54% of our OEC as of June 30, 2014, any such declines may affect us more than our competitors.

        In addition, the cyclicality of our industry makes it more difficult for us to forecast trends. Uncertainty regarding future product demand could cause us to maintain excess equipment inventory and increase our equipment inventory costs. Alternatively, during periods of increased demand, we may not have enough rental equipment to satisfy demand, which could result in a loss of market share.

         The equipment rental industry is highly competitive, and competitive pressures could lead to a decrease in our market share or in rental rates and our ability to sell equipment at favorable prices.

        The equipment rental industry is highly fragmented and very competitive. Our competitors include:

    a few large national companies, including public companies and divisions of public companies;

    several regional competitors that operate in multiple states;

    thousands of small, independent businesses with only one or a few rental locations; and

    hundreds of equipment manufacturers and dealers that both sell and rent equipment directly to customers.

        Some of our competitors are significantly larger than we are and have greater financial and marketing resources than we have. In addition, some of our competitors have a more diversified offering than us. Some of our competitors also have greater technical resources, longer operating histories, lower cost structures and better relationships with equipment manufacturers than we have. In addition, certain of our competitors are more geographically diverse than we are and have greater name recognition among customers than we do. As a result, our competitors that have the advantages identified above may be able to provide their products and services at lower costs. We may in the future encounter increased competition in the equipment rental market, equipment sales market or in the equipment repair and services market from existing competitors or from new market entrants.

        We believe that rental rates, fleet size and quality are the primary competitive factors in the equipment rental industry. From time to time, we or our competitors may attempt to compete aggressively by lowering rental rates or prices. Competitive pressures could materially adversely affect our revenues and operating results by decreasing our market share or depressing the rental rates. To the extent we lower rental rates or increase our fleet in order to retain or increase market share, our operating margins would be adversely impacted. In addition, we may not be able to match a larger competitor's price reductions or fleet investment because of its greater financial resources, all of which could adversely impact our operating results through a combination of a decrease in our market share and revenues.

        Additionally, existing or future competitors may compete with us for start-up locations or acquisition candidates, which may increase acquisition prices and reduce the number of suitable acquisition candidates or expansion locations. These risks may intensify as consolidation continues in our industry.

         We are exposed to various risks relating to legal proceedings or claims that could materially adversely affect our operating results. The nature of our business exposes us to various liability claims which may exceed the level of our insurance coverage and thereby not fully protect us, or not be covered by our insurance at all, and this could have a material adverse effect on our operating performance.

        We are a party to lawsuits in the normal course of our business. Litigation in general can be expensive, lengthy and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict. Responding to lawsuits brought against us, or legal actions that we may initiate, can often be expensive and time-consuming. Unfavorable outcomes from these claims and/or lawsuits could

23


Table of Contents

materially adversely affect our business, results of operations and financial condition, and we could incur substantial monetary liability and/or be required to change our business practices.

        Our business exposes us to claims for personal injury, death or property damage resulting from the use of the equipment we rent, sell, service or repair and from injuries caused in motor vehicle accidents in which our personnel are involved and other employee-related matters. Additionally, we could be subject to potential litigation associated with compliance with various laws and governmental regulations at the federal, state or local levels, such as those relating to the protection of persons with disabilities, employment, health, safety, security and other regulations under which we operate.

        We carry comprehensive insurance, subject to deductibles, at levels we believe are sufficient to cover existing and future claims made during the respective policy periods. However, we may be exposed to multiple claims, including workers compensation claims, that do not exceed our deductibles, and, as a result, we could incur significant out-of-pocket costs that could materially adversely affect our business, financial condition and results of operations. In addition, the cost of such insurance policies may increase significantly upon renewal of those policies as a result of general rate increases for the type of insurance we carry as well as our historical experience and experience in our industry. Our existing or future claims may exceed the coverage level of our insurance, and such insurance may not continue to be available on economically reasonable terms, or at all. If we are required to pay significantly higher premiums for insurance, are not able to maintain insurance coverage at affordable rates or if we must pay amounts in excess of claims covered by our insurance, we could experience higher costs that could materially adversely affect our business, financial condition and results of operations. In addition, we may be subject to various legal proceedings and claims, such as claims for punitive damages or damages arising from intentional misconduct, either asserted or unasserted, that may not be covered by our insurance. Any such claims, whether with or without merit, could be time-consuming and expensive to defend and could divert management's attention and resources.

         Our substantial indebtedness could materially adversely affect our business, financial condition, results of operations and cash flows.

        We have a significant amount of indebtedness. As of June 30, 2014, on a pro forma basis after giving effect to this offering and the application of net proceeds therefrom, we would have had total indebtedness of approximately $             million (of which $             million would have consisted of borrowings under the Second Lien Loan and $             million would have consisted of borrowings under our Revolving Credit Facility). As of June 30, 2014, on a pro forma basis after giving effect to this offering and the application of net proceeds therefrom, based on our borrowing base as of such date, we would have had availability under our Revolving Credit Facility, net of approximately $4.7 million in outstanding letters of credit, of $             million. In addition, subject to certain conditions, our Second Lien Loan can be increased by an additional $75.0 million under an uncommitted incremental facility. See "Description of Certain Indebtedness." Under the terms of the agreements governing our indebtedness, we may be able to incur substantial indebtedness in the future.

        Our substantial indebtedness could have important consequences to you. For example, it could:

    make it more difficult for us to satisfy our obligations with respect to our indebtedness;

    increase our vulnerability to general adverse economic and industry conditions;

    require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, strategic growth efforts and other general corporate purposes;

    limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

    limit our ability to attract acquisition candidates or to complete future acquisitions;

24


Table of Contents

    place us at a competitive disadvantage compared to our competitors who have less indebtedness; and

    limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes.

        In addition, the agreements governing our indebtedness contain restrictive covenants that limit our ability to engage in activities that may be in our long-term best interests. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all of our indebtedness. In the past, we have had to seek waivers and amendments to certain covenants from our lenders which we obtained. There can be no assurance that we will not be required to seek waivers and amendments in the future or that, if sought, our lenders would grant such waivers or amendments.

         To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control and any failure to meet our debt service obligations could harm our business, financial condition and results of operations.

        As a result of our significant indebtedness, we have substantial debt service requirements. Our ability to satisfy our debt service requirements and to meet our other capital and liquidity needs will depend on our ability to generate sufficient cash flow. Our ability to generate sufficient cash flow to satisfy our debt service requirements is subject to numerous factors, many of which are beyond our control, such as general economic conditions and changes in our industry. Also, we are dependent on the ability of our subsidiaries to distribute their operating cash flow to the borrower under our indebtedness to satisfy our debt service requirements. If our subsidiaries are restricted from distributing cash, whether by reason of contractual limitations, legal restrictions or otherwise, we may not be able to cause such cash to be distributed.

        We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our Revolving Credit Facility in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. We may need to refinance all or a portion of our indebtedness on or before maturity. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time. Any refinancing of our indebtedness could be at high interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. We cannot assure you that we will be able to refinance any of our indebtedness, including our Revolving Credit Facility and the Second Lien Loan, on commercially reasonable terms or at all.

        Without a refinancing, we could be forced to sell assets to make up for any shortfall in our payment obligations under unfavorable circumstances. The Revolving Credit Facility and the documentation governing the Second Lien Loan limit our ability to sell assets and also restrict the use of proceeds from such a sale. Moreover, the Revolving Credit Facility is secured on a first-priority basis by substantially all of our assets and the Second Lien Loan and the guarantees are secured on a second-priority basis by substantially the same assets. We may not be able to sell assets quickly enough or for sufficient amounts to enable us to meet our obligations.

         Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

        Borrowings under our Revolving Credit Facility and the Second Lien Loan are at variable rates of interest and expose us to interest rate risk. We have generally not entered into hedging arrangements in the ordinary course of our business. As such, our results of operations are sensitive to movements in interest rates. There are many economic factors outside our control that have in the past and may, in the future, impact rates of interest including publicly announced indices that underlie the interest obligations related to a certain portion of our debt. Factors that impact interest rates include governmental monetary

25


Table of Contents

policies, inflation, recession, changes in unemployment, the money supply, international disorder and instability in domestic and foreign financial markets. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same. See "Description of Certain Indebtedness."

         The terms of our Revolving Credit Facility and the Second Lien Loan may restrict our current and future operations, particularly our ability to respond to changes in our business or to take certain actions.

        Our Revolving Credit Facility and the documentation governing the Second Lien Loan contain, and the terms of any future indebtedness of ours would likely contain, a number of restrictive covenants that will impose significant operating and other restrictions on us. These restrictions will affect, and in many respects will limit or prohibit, among other things, our ability to:

    incur additional indebtedness;

    pay dividends and make distributions;

    issue stock of subsidiaries;

    make certain investments, acquisitions or capital expenditures;

    repurchase stock;

    create liens;

    enter into affiliate transactions;

    enter into sale-leaseback transactions;

    merge or consolidate; and

    transfer and sell assets.

        In addition, our Revolving Credit Facility includes other more restrictive covenants and limits us from prepaying our other indebtedness, including the Second Lien Loan, while borrowings under the Revolving Credit Facility are outstanding.

        The operating and financial restrictions and covenants in our existing debt agreements and any future financing agreements may adversely affect our ability to finance future operations or capital needs or to engage in other business activities. In addition, a failure to comply with the covenants contained in the credit agreements governing our Revolving Credit Facility or the Second Lien Loan could result in an event of default under the applicable facility which, if not cured or waived, could have a material adverse effect on our business, financial condition and results of operations. If we default under our Revolving Credit Facility or the Second Lien Loan, the lenders thereunder:

    will not be required to lend any additional amounts to us;

    could elect to declare all of our outstanding borrowings, together with accrued and unpaid interest and fees, to be immediately due and payable; and

    could effectively require us to apply all of our available cash to repay these borrowings even if they do not accelerate the borrowings.

Any of these actions under one of our credit facilities could result in an event of default under the other facility or a future debt facility.

        If the indebtedness under our Revolving Credit Facility or the Second Lien Loan were to be accelerated, there can be no assurance that our assets would be sufficient to repay such indebtedness in full and we could be forced into bankruptcy or liquidation. See "Description of Certain Indebtedness."

26


Table of Contents

         If we are unable to obtain additional capital as required, we may be unable to fund the capital outlays required for the success of our business, including those relating to purchasing equipment, opening new rental locations, making acquisitions and refinancing existing indebtedness.

        Our business has significant capital requirements. Our ability to remain competitive, sustain our growth and expand our operations through start-up locations and acquisitions largely depends on our access to capital. If the cash that we generate from our business, together with cash on hand and borrowings under our Revolving Credit Facility, to the extent available, is not sufficient to meet our capital needs and implement our growth strategy, we will require additional financing. However, we may not succeed in obtaining additional financing on terms that are satisfactory to us or at all. In addition, our ability to obtain additional financing will be restricted by the terms of our Revolving Credit Facility and by the terms of the Second Lien Loan. If we are unable to obtain sufficient additional capital in the future, we may be unable to fund the capital outlays required for the success and growth of our business, including those relating to purchasing equipment, opening new rental locations and completing acquisitions. Any additional indebtedness that we do incur will make us more vulnerable to economic downturns and may limit our ability to withstand competitive pressures.

         We depend on key personnel whom we may not be able to retain.

        Our operations are managed by a small number of key executive officers, and our future performance depends on the continued contributions of those management personnel. A loss of one or more of these key people could harm our business and prevent us from implementing our business strategy. We do not maintain "key man" life insurance on the lives of any members of our senior management. We have existing employment agreements with certain key executives. However, each of the employment agreements is of limited duration. We cannot assure you that these executives will remain employed with us for the full term of their agreements or that the term of their agreements will be extended beyond the current term.

        The success of our operations also depends in part on our ability to attract, hire, train and retain qualified managerial, sales and marketing personnel. Competition for these types of personnel is high. We may be unsuccessful in attracting and retaining the personnel we require to conduct our operations successfully and, in such an event, our business could be materially adversely affected.

         We may recognize significantly higher maintenance costs in connection with increases in the weighted average age of our rental fleet.

        As our fleet of rental equipment ages, the cost of maintaining such equipment, if not replaced, will likely increase. We manage the average age of different types of equipment according to the expected wear and tear that a specific type of equipment is expected to experience over its useful life. As of June 30, 2014, the average age of our rental equipment fleet was approximately 45 months. As of June 30, 2014, approximately 54% (based on OEC) of our rental fleet consisted of earthmoving equipment, which generally has higher maintenance costs than similar-sized aerial or material handling equipment. It is possible that we may allow the average age of our rental equipment fleet to increase, which would require an increase in the amounts we invest in maintenance, parts and repair. We cannot assure you that costs of maintenance, parts or repair will not materially increase in the future. Any material increase in such costs could have a material adverse effect on our business, financial condition and results of operations.

         We are subject to numerous environmental and health and safety laws and regulations that may result in our incurring liabilities, which could have a material adverse effect on our operating performance.

        Our facilities and operations are subject to comprehensive and frequently changing federal, state and local laws and regulations relating to environmental protection and health and safety. These laws and regulations govern, among other things, the discharge of substances into the air, water and land, the handling, storage, transport, use and disposal of hazardous materials and wastes and the cleanup of

27


Table of Contents

properties affected by pollutants. If we violate environmental laws or regulations, we may be required to implement corrective actions and could be subject to civil or criminal fines or penalties or other sanctions. Although expenses related to environmental compliance have not been material to date, we cannot assure you that we will not have to make significant capital or operating expenditures in the future in order to comply with applicable laws and regulations or that we will comply with applicable environmental laws at all times. Such violations or liability could have a material adverse effect on our business, financial condition and results of operations.

        Environmental laws also impose obligations and liability for the investigation and cleanup of properties affected by hazardous substance spills or releases. These liabilities are often joint and several (which could result in an entity paying for more than its fair share), and may be imposed on the parties generating or disposing of such substances or on the owner or operator of affected property, often without regard to whether the owner or operator knew of, or was responsible for, the presence of hazardous substances. We may also have liability for past contamination as successors-in-interest for companies which were acquired or where there was a merger. Accordingly, we may become liable, either contractually or by operation of law, for investigation, remediation, monitoring and other costs even if the contaminated property is not presently owned or operated by us, or if the contamination was caused by third parties during or prior to our ownership or operation of the property. Contamination and exposure to hazardous substances can also result in claims for damages, including personal injury, property damage, and natural resources damage claims.

        All of our properties currently have above ground and/or underground storage tanks and oil-water separators (or equivalent wastewater collection/treatment systems). Given the nature of our operations (which involve the use of diesel and other petroleum products, solvents and other hazardous substances) for fueling, washing and maintaining our rental equipment and vehicles, and the historical operations at some of our properties, we may incur material costs associated with soil or groundwater contamination. Future events, such as changes in existing laws or policies or their enforcement, or the discovery of currently unknown contamination, may give rise to remediation liabilities or other claims or costs that may be material.

        Various U.S. and international authorities continue to consider legislation and regulations related to greenhouse gas emissions. Should legislation or regulations be adopted imposing significant limitations on greenhouse gas emissions or costs on entities deemed to be responsible for such emissions, demand for our services could be affected, our costs could increase, and our business, financial condition and results of operations could be materially adversely affected.

         Termination of one or more of our relationships with any of our equipment manufacturers could have a material adverse effect on our business.

        We purchase most of our rental and sales equipment from a limited number of OEMs. For example, as of June 30, 2014, equipment from JLG Industries, Genie, Komatsu and John Deere represented approximately 12%, 11%, 10% and 9%, respectively, of our total OEC. Termination of one or more of our relationships with any of these or other major suppliers could have a material adverse effect on our business, financial condition and results of operations if we were unable to obtain adequate equipment for rental and sale from other sources in a timely manner, on favorable terms or at all. Because our major suppliers also sell equipment to our competitors, our relationships with our suppliers do not provide us any particular competitive advantage.

         Our rental fleet is subject to residual value risk upon disposition.

        The market value of any given piece of rental equipment could be less than its depreciated value at the time it is sold. The market value of used rental equipment depends on several factors, including:

    the market price for new equipment of a like kind;

28


Table of Contents

    wear and tear on the equipment relative to its age;

    the age of the equipment at the time it is sold;

    the time of year that it is sold (generally prices are higher during the peak construction season for any given area);

    worldwide and domestic supply of and demand for used equipment;

    inventory levels at OEMs; and

    general economic conditions.

        We include in income from operations the difference between the sales price and the depreciated value of an item of equipment sold. Changes in our assumptions regarding depreciation could change our depreciation expense, as well as the gain or loss realized upon disposal of equipment. If prices we are able to obtain for our used rental equipment decline or fall below our projections or if we sell our equipment in lesser quantities as a result of the above or other factors, our operating results may be materially adversely affected.

         The cost of new equipment we use in rental fleet is increasing, which may cause us to spend significantly more for replacement equipment, and in some cases we may not be able to procure equipment at all due to supplier constraints.

        We operate in a capital intensive business. Price increases could materially adversely affect our business, financial condition and results of operations.

        While we can manage the size and aging of our fleet generally over time, eventually we must retire older equipment and either allow our fleet to shrink or replace the older equipment in our fleet with newer models. We anticipate that we will need to purchase additional equipment in 2015 in order to supplement our current fleet. We may be at a competitive disadvantage if the average age of our fleet increases compared to the age of our competitors' fleets.

        In some cases, we may not be able to procure replacement equipment on a timely basis to the extent that manufacturers for the equipment we need are not able to produce sufficient inventory on schedules that meet our timing demands. If demand for new equipment increases significantly, manufacturers may not be able to meet customer orders on a timely basis. As a result, we at times may experience long lead-times for certain types of new equipment and we cannot assure you that we will be able to acquire the types or sufficient numbers of the equipment we need to replace older equipment as quickly as we would like. Consequently, we may have to age our fleet longer than we would consider optimal or shrink our fleet, either of which could restrict our ability to grow our business.

         Disruptions in our information technology and customer relationship management systems could materially adversely affect our operating results by limiting our capacity to effectively monitor and control our operations.

        Our information technology systems facilitate our ability to monitor and control our operations to adjust to changing market conditions, including management of our rental fleet. Our CRM system allows our sales force to access comprehensive information about customer activity relating to specific accounts to assist their sales efforts. The effectiveness of our sales force depends upon the continuous availability and reliability of our CRM system. Consequently, any disruptions in our information technology or customer relationship management systems or the failure of these systems, including our redundant systems, to operate as expected could, depending on the magnitude of the problem, impair our ability to effectively monitor and control our existing operations and improve our future sales efforts, and thereby materially adversely affect our operating results.

29


Table of Contents

         Potential acquisitions and expansions into new markets may result in significant transaction expenses and expose us to risks associated with entering new markets and integrating new or acquired operations.

        We may encounter risks associated with entering new markets in which we have limited or no experience. Start-up rental locations, in particular, require significant capital expenditures and may initially have a negative impact on our short-term cash flow, net income and results of operations. New start-up locations may not become profitable when projected or ever. Acquisitions may impose significant strains on our management, operating systems and financial resources and could experience unanticipated integration issues. The pursuit and integration of acquisitions will require substantial attention from our senior management, which will limit the amount of time they have available to devote to our existing operations. Our ability to realize the expected benefits from any future acquisitions depends in large part on our ability to integrate and consolidate the new operations with our existing operations in a timely and effective manner. Future acquisitions also could result in the incurrence of substantial amounts of indebtedness and contingent liabilities (including potentially environmental, employee benefits and safety and health liabilities), accumulation of goodwill that may become impaired, and an increase in amortization expenses related to intangible assets. Any significant diversion of management's attention from our existing operations, the loss of key employees or customers of any acquired business, any major difficulties encountered in the opening of start-up locations or the integration of acquired operations or any associated increases in indebtedness, liabilities or expenses could have a material adverse effect on our business, financial condition and results of operations, which could decrease our cash flows and make it more difficult for us to make payments on the notes.

         We have operations throughout the United States, which exposes us to multiple state and local regulations. Changes in applicable law, regulations or requirements, or our material failure to comply with any of them, can increase our costs and have other negative impacts on our business.

        Our 64 branch locations are located in 14 states and we must comply with many different state and local regulations. These laws and requirements address multiple aspects of our operations, such as worker safety, consumer rights, privacy, employee benefits and more, and can often have different requirements in different jurisdictions. Changes in these requirements, or any material failure by our branches to comply with them, can increase our costs, affect our reputation, limit our business, drain management time and attention and otherwise impact our operations in adverse ways.

         If we determine that our goodwill has become impaired, we may incur impairment charges, which would negatively impact our operating results.

        At June 30, 2014, we had $58.8 million of goodwill on our consolidated balance sheet. Goodwill represents the excess of cost over the fair value of identifiable net assets of businesses acquired. We assess potential impairment of our goodwill at least annually. Impairment may result from significant changes in the manner of use of the acquired assets, negative industry or economic trends and/or significant underperformance relative to historic or projected operating results. A material impairment charge may occur in a future period. Such a charge could materially adversely affect our financial condition and results of operations.

         Labor disputes could disrupt our ability to serve our customers and/or lead to higher labor costs.

        Although none of our employees are currently represented by unions or covered by collective bargaining agreements, union organizing activity may take place in the future. Union organizing efforts or collective bargaining negotiations could potentially lead to work stoppages and/or slowdowns or strikes by certain of our employees, which could materially adversely affect our ability to serve our customers. Further, settlement of actual or threatened labor disputes or an increase in the number of our employees covered by collective bargaining agreements can have unknown effects on our labor costs, productivity and flexibility.

30


Table of Contents

Risks Relating to Our Organizational Structure

         Wayzata will continue to have substantial control over us after this offering including over decisions that require the approval of stockholders, and its interest in our business may conflict with yours.

        Immediately after the consummation of this offering, Wayzata will hold a majority of the combined voting power of our common stock through its ownership of 100% of our outstanding Class B common stock.

        Accordingly, Wayzata, acting alone, will have the ability to approve or disapprove substantially all transactions and other matters submitted to a vote of our stockholders, such as a merger, consolidation, dissolution or sale of all or substantially all of our assets, the issuance or redemption of certain additional equity interests, and the election of directors. These voting and class approval rights may enable Wayzata to consummate transactions that may not be in the best interests of holders of our Class A common stock or, conversely, prevent the consummation of transactions that may be in the best interests of holders of our Class A common stock. In addition, although Wayzata will have voting control of us, Wayzata's entire economic interest in us will be in the form of its direct interest in Neff Holdings through the ownership of Neff Holdings' common units, the payments it may receive from us under the Tax Receivable Agreement and the proceeds it may receive upon any redemption of its common units in Neff Holdings, including issuance of shares of our Class A common stock upon any such redemption and any subsequent sale of such Class A common stock. As a result, Wayzata's interests may conflict with the interests of our Class A common stockholders. For example, Wayzata may have different tax positions from us which could influence its decisions regarding whether and when to dispose of assets, whether and when to incur new or refinance existing indebtedness, especially in light of the existence of the Tax Receivable Agreement that we will enter in connection with this offering, and whether and when we should terminate the Tax Receivable Agreement and accelerate our obligations thereunder. In addition, the structuring of future transactions may take into consideration tax or other considerations of Wayzata or other existing owners even in situations where no similar considerations are relevant to us. See "Certain Relationships and Related Party Transactions—Tax Receivable Agreement."

        In addition, Wayzata is in the business of making or advising on investments in companies and may hold, and may from time to time in the future acquire interests in or provide advice to businesses that directly or indirectly compete with certain portions of our business or are suppliers or customers of ours. Our amended and restated certificate of incorporation will provide that, to the fullest extent permitted by law, none of Wayzata or any director who is not employed by us or his or her affiliates will have any duty to refrain from engaging in a corporate opportunity in the same or similar lines of business as us. Wayzata may also pursue acquisitions that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us.

         We are a "controlled company" within the meaning of the                listing requirements and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such corporate governance requirements.

        Because of the voting power over our Company held by Wayzata, we are considered a "controlled company" for the purposes of the                 listing requirements. As such, we are exempt from certain corporate governance requirements, including the requirement for an annual performance evaluation of the nominating/corporate governance and compensation committees.

        The corporate governance requirements and specifically the independence standards are intended to ensure that directors who are considered independent are free of any conflicting interest that could influence their actions as directors. Following this offering, we intend to utilize certain exemptions afforded to a "controlled company." As a result, we will not be required to conduct an annual performance evaluation of the nominating/corporate governance and compensation committees. See "Management." Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the                .

31


Table of Contents

         Our only asset after the completion of this offering will be our interest in Neff Holdings, and accordingly we will depend on distributions from Neff Holdings to pay taxes and expenses, including payments under the Tax Receivable Agreement. Neff Holdings' ability to make such distributions may be subject to various limitations and restrictions.

        Upon consummation of this offering, we will be a holding company and will have no material assets other than our ownership of common units of Neff Holdings. We will have no independent means of generating revenue or cash flow, and our ability to pay dividends in the future, if any, will be dependent upon the financial results and cash flows of Neff Holdings and its subsidiaries and distributions we receive from Neff Holdings. There can be no assurance that our subsidiaries will generate sufficient cash flow to dividend or distribute funds to us or that applicable state law and contractual restrictions, including negative covenants in our debt instruments, will permit such dividends or distributions.

        Neff Holdings will be treated as a partnership for U.S. federal income tax purposes and, as such, will not be subject to any entity-level U.S. federal income tax. Instead, taxable income will be allocated to holders of its common units, including us. As a result, we will incur income taxes on our allocable share of any net taxable income of Neff Holdings. Under the terms of Neff Holdings' second amended and restated limited liability company agreement, which will become effective upon the completion of this offering (the "Neff Holdings LLC Agreement"), Neff Holdings will be obligated to make tax distributions to holders of its common units, including us. In addition to tax expenses, we will also incur expenses related to our operations, including expenses under the Tax Receivable Agreement, which could be significant. See "Certain Relationships and Related Party Transactions—Tax Receivable Agreement." We intend, as its managing member, to cause Neff Holdings to make distributions in an amount sufficient to allow us to pay our taxes and operating expenses, including any payments due under the Tax Receivable Agreement. However, Neff Holdings' ability to make such distributions may be subject to various limitations and restrictions including, but not limited to, restrictions on distributions that would either violate any contract or agreement to which Neff Holdings LLC is then a party, including debt agreements, or any applicable law, or that would have the effect of rendering Neff Holdings insolvent. If Neff Holdings does not have sufficient funds to pay tax or other liabilities to fund our operations, we may have to borrow funds, which could materially adversely affect our liquidity and financial condition and subject us to various restrictions imposed by any such lenders. To the extent that we are unable to make payments under the Tax Receivable Agreement for any reason, such payments will be deferred and will accrue interest until paid. If Neff Holdings does not have sufficient funds to make distributions, our ability to declare and pay cash dividends may also be restricted or impaired. See "—Risks Relating to This Offering and Ownership of Our Class A Common Stock."

         Our Tax Receivable Agreement with our existing owners requires us to make cash payments to them in respect of certain tax benefits to which we may become entitled, and the amounts that we may be required to pay could be significant.

        In connection with the consummation of this offering, we will enter into a Tax Receivable Agreement with our existing owners. Pursuant to the Tax Receivable Agreement, we will be required to make cash payments to our existing owners equal to 85% of the tax benefits, if any, that we actually realize, or in some circumstances are deemed to realize as a result of (i) increases in tax basis resulting from any purchase of common units of Neff Holdings from Wayzata with proceeds from this offering, the use of proceeds from this offering to repay certain indebtedness of Neff Holdings and any redemptions or exchanges of common units described under "Certain Relationships and Related Party Transactions—Neff Holdings LLC Agreement—Agreement in Effect Upon Completion of the Offering—Common Unit Redemption Right," and (ii) certain other tax benefits related to our entering into the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement. The amount of the cash payments that we may be required to make under the Tax Receivable Agreement could be significant. Any payments made by us to our existing owners under the Tax Receivable Agreement will generally reduce the amount of overall cash flow that might have otherwise been available to us. To the extent that we are unable to make timely payments under the Tax Receivable Agreement for any reason, the unpaid amounts will be

32


Table of Contents

deferred and will accrue interest until paid by us. Furthermore, our future obligation to make payments under the Tax Receivable Agreement could make us a less attractive target for an acquisition, particularly in the case of an acquirer that cannot use some or all of the tax benefits that may be deemed realized under the Tax Receivable Agreement. The payments under the Tax Receivable Agreement are also not conditioned upon our existing owners maintaining a continued ownership interest in either Neff Holdings or us. See "Certain Relationships and Related Party Transactions—Tax Receivable Agreement."

         The amounts that we may be required to pay to our existing owners under the Tax Receivable Agreement may be accelerated in certain circumstances and may also significantly exceed the actual tax benefits that we ultimately realize.

        The Tax Receivable Agreement will provide that if certain mergers, asset sales, other forms of business combination, or other changes of control were to occur, or that if, at any time, we elect an early termination of the Tax Receivable Agreement, then our obligations, or our successor's obligations, to make payments under the Tax Receivable Agreement would be based on certain assumptions, including an assumption that we would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the Tax Receivable Agreement.

        As a result, (i) we could be required to make cash payments to our existing owners that are greater than the specified percentage of the actual benefits we ultimately realize in respect of the tax benefits that are subject to the Tax Receivable Agreement and (ii) if we elect to terminate the Tax Receivable Agreement early, we would be required to make an immediate cash payment equal to the present value of the anticipated future tax benefits that are the subject of the Tax Receivable Agreement, which payment may be made significantly in advance of the actual realization, if any, of such future tax benefits. In these situations, our obligations under the Tax Receivable Agreement could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combination, or other changes of control. There can be no assurance that we will be able to finance our obligations under the Tax Receivable Agreement.

         We will not be reimbursed for any payments made to our existing investors under the Tax Receivable Agreements in the event that any tax benefits are disallowed.

        We will not be reimbursed for any cash payments previously made to our existing owners pursuant to the Tax Receivable Agreement if any tax benefits initially claimed by us are subsequently challenged by a taxing authority and are ultimately disallowed. Instead, any excess cash payments made by us to an existing owner will be netted against any future cash payments that we might otherwise be required to make under the terms of the Tax Receivable Agreement. However, we might not determine that we have effectively made an excess cash payment to our existing owners for a number of years following the initial time of such payment. As a result, it is possible that we could make cash payments under the Tax Receivable Agreement that are substantially greater than our actual cash tax savings. See "Certain Relationships and Related Party Transactions—Tax Receivable Agreement."

         Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our operating results and financial condition.

        We are subject to income taxes in the United States, and our domestic tax liabilities will be subject to the allocation of expenses in differing jurisdictions. Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including:

    changes in the valuation of our deferred tax assets and liabilities;

    expected timing and amount of the release of any tax valuation allowances;

    expiration of, or detrimental changes in, research and development tax credit laws;

    tax effects of stock-based compensation;

    costs related to intercompany restructurings;

33


Table of Contents

    changes in tax laws, regulations or interpretations thereof; or

    future earnings being lower than anticipated in countries where we have lower statutory tax rates and higher than anticipated earnings in countries where we have higher statutory tax rates.

        In addition, we may be subject to audits of our income, sales and other transaction taxes by U.S. federal and state authorities. Outcomes from these audits could have an adverse effect on our operating results and financial condition.

         If we were deemed to be an investment company under the Investment Company Act of 1940, as amended (the "1940 Act"), as a result of our ownership of Neff Holdings, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.

        Under Sections 3(a)(1)(A) and (C) of the 1940 Act, a company generally will be deemed to be an "investment company" for purposes of the 1940 Act if (i) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities or (ii) it engages, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. We do not believe that we are an "investment company," as such term is defined in either of those sections of the 1940 Act.

        As the sole managing member of Neff Holdings, we will control and operate Neff Holdings. On that basis, we believe that our interest in Neff Holdings is not an "investment security" as that term is used in the 1940 Act. However, if we were to cease participation in the management of Neff Holdings, our interest in Neff Holdings could be deemed an "investment security" for purposes of the 1940 Act.

        We and Neff Holdings intend to conduct our operations so that we will not be deemed an investment company. However, if we were to be deemed an investment company, restrictions imposed by the 1940 Act, including limitations on our capital structure and our ability to transact with affiliates, could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.

Risks Relating to This Offering and Ownership of Our Class A Common Stock

         Immediately following the consummation of this offering, Wayzata will directly (through Class B common stock) and indirectly (through ownership of Neff Holdings common units) own interests in us, and Wayzata will have the right to redeem and cause us to redeem, as applicable, such interests pursuant to the terms of the Neff Holdings LLC Agreement.

        After this offering, we will have an aggregate of more than                    shares of Class A common stock authorized but unissued, including approximately                    shares of Class A common stock issuable upon redemption of Neff Holdings common units that will be held by Wayzata. Neff Holdings will enter into the Neff Holdings LLC Agreement, and subject to certain restrictions set forth therein and as described elsewhere in this prospectus, Wayzata will be entitled to potentially redeem its common units for an aggregate of up to                shares of our Class A common stock, subject to customary adjustments. We also intend to enter into a Registration Rights Agreement pursuant to which the shares of Class A common stock issued upon such redemption will be eligible for resale, subject to certain limitations set forth therein. See "Certain Relationships and Related Party Transactions—Registration Rights Agreement."

        We cannot predict the size of future issuances of our Class A common stock or the effect, if any, that future issuances and sales of shares of our Class A common stock may have on the market price of our Class A common stock. Sales or distributions of substantial amounts of our Class A common stock, including shares issued in connection with an acquisition, or the perception that such sales or distributions could occur, may cause the market price of our Class A common stock to decline.

34


Table of Contents

         You will suffer immediate and substantial dilution in the net tangible book value of the Class A common stock you purchase.

        The price you pay for shares of our Class A common stock sold in this offering is substantially higher than our pro forma net tangible book value per share. Based on the initial public offering price for our Class A common stock of $            per share (which is the midpoint of the price range set forth on the cover page of this prospectus), you will incur immediate dilution in net tangible book value per share of $            . Dilution is the difference between the offering price per share and the pro forma as adjusted net tangible book value per share of our Class A common stock immediately after the offering. As a result of this dilution, investors purchasing stock in this offering may receive significantly less than the full purchase price that they paid for the stock purchased in this offering in the event of liquidation. See "Dilution."

         You may be diluted by future issuances of additional Class A common stock in connection with our incentive plans, acquisitions or otherwise; future sales of such shares in the public market, or the expectations that such sales may occur, could lower our stock price.

        Our amended and restated certificate of incorporation authorizes us to issue shares of Class A common stock and options, rights, warrants and appreciation rights relating to Class A common stock for the consideration and on the terms and conditions established by our board of directors in its sole discretion, whether in connection with acquisitions or otherwise. In addition, we and our existing owners will be party to the Neff Holdings LLC Agreement under which they (or certain permitted transferees thereof) will have the right (subject to the terms of the Neff Holdings LLC Agreement) to have their common units redeemed by Neff Holdings in exchange for, at Neff Corporation's election, shares of our Class A common stock on a one-for-one basis or a cash payment equal to the volume-weighted average market price of one share of our Class A common stock for each common unit (subject to customary adjustments, including for stock splits, stock dividends and reclassifications); provided that, at Neff Corporation's election, Neff Corporation may effect a direct exchange of such Class A common stock or such cash for such common units. See "Certain Relationships and Related Party Transactions—Neff Holdings LLC Agreement." The market price of shares of our Class A common stock could decline as a result of these redemptions or the perception that a redemption could occur. These redemptions, or the possibility that these redemptions may occur, also might make it more difficult for holders of our Class A common stock to sell such stock in the future at a time and at a price that they deem appropriate.

        We have reserved shares for issuance under our 2014 Incentive Award Plan in an amount equal to                    . We have also reserved                shares issuable upon the exercise of outstanding options. Any Class A common stock that we issue, including under our 2014 Incentive Award Plan or other equity incentive plans that we may adopt in the future, would dilute the percentage ownership held by the investors who purchase Class A common stock in this offering. In addition, each common unit held by our existing owners will be redeemable for, at Neff Corporation's option, newly-issued shares of Class A common stock on a one-for-one basis or a cash payment equal to the market price of one share of Class A common stock (subject to customary adjustments, including for stock splits, stock dividends and reclassifications) in accordance with the terms of the Neff Holdings LLC Agreement; provided that, at Neff Corporation's election, Neff Corporation may effect a direct exchange of such Class A common stock or such cash for such common units. In addition, we may issue equity in future offerings to fund acquisitions and other expenditures, which may further decrease the value for our stockholders' investment in us.

        We and our officers and directors and existing stockholders have agreed, subject to certain exceptions, that, without the prior written consent of Morgan Stanley & Co. LLC and Jefferies LLC on behalf of the underwriters, we and they will not, during the period ending 180 days after the date of this prospectus (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of Class A common stock or any securities convertible into or exercisable or exchangeable for shares of Class A common stock; (ii) file any registration statement with the SEC relating to the offering of any shares of Class A common stock or any securities convertible into or

35


Table of Contents

exercisable or exchangeable for Class A common stock; or (iii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of Class A common stock. Morgan Stanley & Co. LLC and Jefferies LLC, in their sole discretion, may release the Class A common stock and other securities subject to the lock-up agreements described above in whole or in part at any time with or without notice. See "Underwriters."

        The market price of our Class A common stock may decline significantly when the restrictions on resale by our existing stockholders lapse. A decline in the price of our Class A common stock might impede our ability to raise capital through the issuance of additional shares of Class A common stock or other equity securities.

        In connection with the completion of this offering, we intend to enter into a Registration Rights Agreement with our existing owners. Any sales in connection with the Registration Rights Agreement, or the prospect of any such sales, could materially impact the market price of our Class A common stock and could impair our ability to raise capital through future sales of equity securities. For a further description of our Registration Rights Agreement, see "Certain Relationships and Related Party Transactions—Registration Rights Agreement."

         Our Class A common stock price may be volatile or may decline regardless of our operating performance and you may not be able to resell your shares at or above the initial public offering price.

        Prior to this offering, there has not been a public trading market for shares of our Class A common stock. It is possible that after this offering an active trading market will not develop or continue or, if developed, that any market will be sustained, which could make it difficult for you to sell your shares of Class A common stock at an attractive price or at all. The initial public offering price of our Class A common stock will be determined by negotiations between us and the representative of the underwriters based upon a number of factors and may not be indicative of prices that will prevail in the open market following the consummation of this offering. See "Underwriters." Consequently, you may not be able to sell our shares of Class A common stock at prices equal to or greater than the price you paid in this offering.

        Volatility in the market price of our Class A common stock may prevent you from being able to sell your shares at or above the price you paid for them. Many factors, which are outside our control, may cause the market price of our Class A common stock to fluctuate significantly, including those described elsewhere in this "Risk Factors" section and this prospectus, as well as the following:

    our operating and financial performance and prospects;

    our quarterly or annual earnings or those of other companies in our industry compared to market expectations;

    conditions that impact demand for our services;

    future announcements concerning our business or our competitors' businesses;

    the public's reaction to our press releases, other public announcements and filings with the SEC;

    the size of our public float;

    coverage by or changes in financial estimates by securities analysts or failure to meet their expectations;

    market and industry perception of our success, or lack thereof, in pursuing our growth strategy;

    strategic actions by us or our competitors, such as acquisitions or restructurings;

    changes in laws or regulations which adversely affect our industry or us;

    changes in accounting standards, policies, guidance, interpretations or principles;

    changes in senior management or key personnel;

36


Table of Contents

    issuances, exchanges or sales, or expected issuances, exchanges or sales of our capital stock;

    changes in our dividend policy;

    adverse resolution of new or pending litigation against us; and

    changes in general market, economic and political conditions in the United States and global economies or financial markets, including those resulting from natural disasters, terrorist attacks, acts of war and responses to such events.

        As a result, volatility in the market price of our Class A common stock may prevent investors from being able to sell their Class A common stock at or above the initial public offering price or at all. These broad market and industry factors may materially reduce the market price of our Class A common stock, regardless of our operating performance. In addition, price volatility may be greater if the public float and trading volume of our Class A common stock is low. As a result, you may suffer a loss on your investment.

         We do not intend to pay dividends on our Class A common stock for the foreseeable future.

        We currently have no intention to pay dividends on our Class A common stock at any time in the foreseeable future. Any decision to declare and pay dividends in the future will be made at the discretion of our board of directors and will depend on, among other things, our results of operations, financial conditions, cash requirement, contractual restrictions and other factors that our board of directors may deem relevant. Certain of our debt instruments contain covenants that restrict the ability of our subsidiaries to pay dividends to us. See "Description of Certain Indebtedness." In addition, we will be permitted under the terms of our debt instruments to incur additional indebtedness, which may restrict or prevent us from paying dividends on our Class A common stock. Furthermore, our ability to declare and pay dividends may be limited by instruments governing future outstanding indebtedness we may incur.

         Delaware law and certain provisions in our amended and restated certificate of incorporation may prevent efforts by our stockholders to change the direction or management of our Company.

        We are a Delaware corporation, and the anti-takeover provisions of Delaware law impose various impediments to the ability of a third party to acquire control of us, even if a change of control would be beneficial to our existing stockholders. In addition, our amended and restated certificate of incorporation and our amended and restated by-laws contain provisions that may make the acquisition of our company more difficult without the approval of our board of directors, including, but not limited to, the following:

    our board of directors is classified into three classes, each of which serves for a staggered three-year term;

    only our board of directors may call special meetings of our stockholders;

    we have authorized undesignated preferred stock, the terms of which may be established and shares of which may be issued without stockholder approval;

    our stockholders have only limited rights to amend our by-laws; and

    we require advance notice and duration of ownership requirements for stockholder proposals.

        These provisions could discourage, delay or prevent a transaction involving a change in control of our company. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and cause us to take other corporate actions you desire. In addition, because our board of directors is responsible for appointing the members of our management team, these provisions could in turn affect any attempt by our stockholders to replace current members of our management team.

37


Table of Contents

         We may issue shares of preferred stock in the future, which could make it difficult for another company to acquire us or could otherwise adversely affect holders of our Class A common stock, which could depress the price of our Class A common stock.

        Our amended and restated certificate of incorporation will authorize us to issue one or more series of preferred stock. Our board of directors will have the authority to determine the preferences, limitations and relative rights of the shares of preferred stock and to fix the number of shares constituting any series and the designation of such series, without any further vote or action by our stockholders. Our preferred stock could be issued with voting, liquidation, dividend and other rights superior to the rights of our Class A common stock. The potential issuance of preferred stock may delay or prevent a change in control of us, discouraging bids for our Class A common stock at a premium to the market price, and materially and adversely affect the market price and the voting and other rights of the holders of our Class A common stock.

         For as long as we are an emerging growth company, we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies.

        We are an "emerging growth company," as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies," including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and of shareholder approval of any golden parachute payments not previously approved. We have not made a final decision whether to take advantage of certain of these exemptions. If we do take advantage of any of these exemptions, we do not know if some investors will find our Class A common stock less attractive as a result. The result may be a less active trading market for our Class A common stock and our stock price may be more volatile.

        In addition, Section 107 of the JOBS Act also provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an "emerging growth company" can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period. As a result, our financial statements may not be comparable to companies that comply with public company effective dates. We could remain an "emerging growth company" for up to five years or until the earliest of (a) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (b) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter and (c) the date on which we have issued more than $1 billion in non-convertible debt securities during the preceding three-year period.

         The obligations associated with being a public company will require significant resources and management attention, which may divert from our business operations.

        As a result of this offering, we will become subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal controls and procedures for financial reporting. As a result, we will incur significant legal, accounting and other expenses that we did not previously incur.

38


Table of Contents

        In addition, the need to establish the corporate infrastructure demanded of a public company may divert management's attention from implementing our business strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make, changes to our internal controls, including information technology controls, and procedures for financial reporting and accounting systems to meet our reporting obligations as a public company. However, the measures we take may not be sufficient to satisfy our obligations as a public company. If we do not continue to develop and implement the right processes and tools to manage our changing enterprise and maintain our culture, our ability to compete successfully and achieve our business objectives could be impaired, which could negatively impact our business, financial condition and results of operations. In addition, we cannot predict or estimate the amount of additional costs we may incur to comply with these requirements. We anticipate that these costs will materially increase our general and administrative expenses.

        Furthermore, as a public company, we will incur additional legal, accounting and other expenses that have not been reflected in our predecessor's historical financial statements or our pro forma financial statements. In addition, rules implemented by the SEC and the                        have imposed various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. These rules and regulations result in our incurring legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified people to serve on our board of directors, our board committees or as executive officers.

         Our failure to achieve and maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act as a public company could have a material adverse effect on our business and share price.

        Prior to the completion of this offering, we have not operated as a public company and have not had to independently comply with Section 404(a) of the Sarbanes-Oxley Act. Section 404(a) of the Sarbanes-Oxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting, starting with the second annual report that we would expect to file with the SEC. We anticipate being required to meet these standards in the course of preparing our financial statements as of and for the year ended December 31, 2015, and our management will be required to report on the effectiveness of our internal control over financial reporting for such year. Additionally, once we are no longer an emerging growth company, as defined by the JOBS Act, our independent registered public accounting firm will be required pursuant to Section 404(b) of the Sarbanes-Oxley Act to attest to the effectiveness of our internal control over financial reporting on an annual basis. The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation.

        Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles. We are currently in the process of reviewing, documenting and testing our internal control over financial reporting, but we are not currently in compliance with, and we cannot be certain when we will be able to implement the requirements of Section 404(a). We may encounter problems or delays in implementing any changes necessary to make a favorable assessment of our internal control over financial reporting. In addition, we may encounter problems or delays in completing the implementation of any requested improvements and receiving a favorable attestation in connection with the attestation to be provided by our independent registered public accounting firm after

39


Table of Contents

we cease to be an emerging growth company. If we cannot favorably assess the effectiveness of our internal control over financial reporting, or if our independent registered public accounting firm is unable to provide an unqualified attestation report on our internal controls after we cease to be an emerging growth company, investors could lose confidence in our financial information and the price of our Class A common stock could decline.

        Additionally, the existence of any material weakness or significant deficiency would require management to devote significant time and incur significant expense to remediate any such material weaknesses or significant deficiencies and management may not be able to remediate any such material weaknesses or significant deficiencies in a timely manner. The existence of any material weakness in our internal control over financial reporting could also result in errors in our financial statements that could require us to restate our financial statements, cause us to fail to meet our reporting obligations and cause shareholders to lose confidence in our reported financial information, all of which could materially and adversely affect our business and share price.

         An active trading market for our Class A common stock may never develop or be sustained.

        Although the shares of our Class A common stock will be authorized for trading on the                        , an active trading market for our Class A common stock may not develop on that exchange or elsewhere or, if developed, that market may not be sustained. Accordingly, if an active trading market for our Class A common stock does not develop or is not maintained, the liquidity of our Class A common stock, your ability to sell your shares of our Class A common stock when desired and the prices that you may obtain for your shares of Class A common stock will be adversely affected.

         If securities analysts do not publish research or reports about our company, or if they issue unfavorable commentary about us or our industry or downgrade our Class A common stock, the price of our Class A common stock could decline.

        The trading market for our Class A common stock will depend in part on the research and reports that third-party securities analysts publish about our company and our industry. We may be unable or slow to attract research coverage and if one or more analysts cease coverage of our company, we could lose visibility in the market. In addition, one or more of these analysts could downgrade our Class A common stock or issue other negative commentary about our company or our industry. As a result of one or more of these factors, the trading price of our Class A common stock could decline.

40


Table of Contents

OUR ORGANIZATIONAL STRUCTURE

        Wayzata formed Neff Corporation as a Delaware corporation on August 18, 2014 to serve as the issuer of the Class A common stock offered hereby. On or prior to the closing of this offering we will consummate the Organizational Transactions.

Existing Organization

        Neff Holdings is treated as a partnership for U.S. federal income tax purposes and, as such is not subject to any U.S. federal entity-level income taxes. Rather, taxable income or loss is included in the U.S. federal income tax returns of Neff Holdings' members. Prior to the consummation of this offering, the Wayzata funds are the only members of Neff Holdings.

        The following diagram sets forth our ownership structure prior to giving effect to the Organizational Transactions and this offering:

GRAPHIC


*
Management and members of board of managers hold options over Class B units.

41


Table of Contents

Organizational Structure Following this Offering:

        Immediately following the completion of this offering and the Organizational Transactions:

    Neff Corporation will be a holding company and the sole material asset of Neff Corporation will be common units of Neff Holdings;

    Neff Corporation will be the sole managing member of Neff Holdings and will control the business and affairs of Neff Holdings and its subsidiaries;

    Neff Corporation will own                    common units of Neff Holdings representing approximately          % of Neff Holdings' total outstanding membership units (or approximately          %, if the underwriters exercise in full their option to purchase additional shares of Class A common stock);

    Wayzata will own                    common units of Neff Holdings representing approximately          % of Neff Holdings' total outstanding membership units (or approximately          %, if the underwriters exercise in full their option to purchase additional shares of Class A common stock). 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 Class A common stock on a one-for-one basis or a cash payment equal to a volume-weighted average market price of one share of Class A common stock for each common unit redeemed (subject to customary adjustments, including for stock splits, stock dividends and reclassifications) in accordance with the terms of the Neff Holdings LLC Agreement; provided that, at Neff Corporation's election, Neff Corporation may effect a direct exchange of such Class A common stock or such cash for such common units. See "Certain Relationships and Related Party Transactions—Neff Holdings LLC Agreement";

    the purchasers in this offering (i) will own                    shares of Neff Corporation's Class A common stock, representing approximately          % of the combined voting power of all of Neff Corporation's common stock (or approximately          % if the underwriters exercise in full their option to purchase additional shares of Class A common stock) and (ii) through Neff Corporation's ownership of Neff Holdings' common units, indirectly will hold approximately           % of the economic interest in the business of Neff Holdings and its subsidiaries (or          % if the underwriters exercise in full their option to purchase additional shares of Class A common stock);

    Wayzata, through (i) its ownership of Neff Corporation's Class B common stock, will have approximately           % of the combined voting power of all of Neff Corporation's common stock (or approximately          % if the underwriters exercise in full their option to purchase additional shares of Class A common stock) and (ii) its ownership of Neff Holdings' common units, will hold approximately          % of the economic interest in the business of Neff Holdings and its subsidiaries (or approximately          % if the underwriters exercise in full their option to purchase additional shares of Class A common stock); and

    certain individuals who hold existing options granted by Neff Holdings will have the right to acquire                         common units of Neff Holdings which, if such existing options were exercised in full, would represent approximately        % of the economic interest in the business of Neff Holdings and its subsidiaries on a fully diluted basis.

42


Table of Contents

        The following diagram sets forth our ownership structure after giving effect to the Organizational Transactions and this offering:

GRAPHIC

        As the sole managing member of Neff Holdings, we will operate and control all of the business and affairs of Neff Holdings and, through Neff Holdings and its subsidiaries, conduct our business. Following the Organizational Transactions and offering, we will record a significant non-controlling interest in consolidated entity relating to the ownership interest of Wayzata in Neff Holdings. Accordingly, although Neff Corporation will have a minority economic interest in Neff Holdings, it will have a majority voting interest in, and control the management of, Neff Holdings. As a result, Neff Corporation will consolidate Neff Holdings and record a non-controlling interest in consolidated entity for the economic interest in Neff Holdings held by Wayzata.

Incorporation of Neff Corporation

        Neff Corporation was incorporated as a Delaware corporation on August 18, 2014. Neff Corporation has not engaged in any material business or other activities except in connection with its formation. The amended and restated certificate of incorporation of Neff Corporation authorizes two classes of common stock, Class A common stock and Class B common stock, each having the terms described in "Description of Capital Stock."

Reclassification and Amendment and Restatement of Neff Holdings LLC Agreement

        Prior to or substantially concurrently with the completion of this offering, the limited liability company agreement of Neff Holdings will be amended and restated to, among other things, modify its capital structure by creating a single new class of units that we refer to as "common units" and providing for a right of redemption of common units in exchange for our Class A common stock. See "Certain Relationships and Related Party Transactions—Neff Holdings LLC Agreement."

43


Table of Contents


FORWARD-LOOKING STATEMENTS

        This prospectus contains "forward-looking statements." We use words such as "could," "may," "might," "will," "expect," "likely," "believe," "continue," "anticipate," "estimate," "intend," "plan," "project" and other similar expressions to identify some forward-looking statements, but not all forward-looking statements include these words. All of our forward-looking statements involve estimates and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Accordingly, any such statements are qualified in their entirety by reference to the information described under the caption "Risk Factors" and elsewhere in this prospectus.

        The forward-looking statements contained in this prospectus are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. As you read and consider this prospectus, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (many of which are beyond our control) and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual operating and financial performance and cause our performance to differ materially from the performance anticipated in the forward-looking statements. We believe these factors include, but are not limited to, those described under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." Should one or more of these risks or uncertainties materialize, or should any of these assumptions prove incorrect, our actual operating and financial performance may vary in material respects from the performance projected in these forward-looking statements.

        Further, any forward-looking statement speaks only as of the date on which it is made, and except as required by law, we undertake no obligation to update any forward-looking statement contained in this prospectus to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances, except as otherwise required by law. New factors that could cause our business not to develop as we expect emerge from time to time, and it is not possible for us to predict all of them. Further, we cannot assess the impact of each currently known or new factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

44


Table of Contents


MARKET DATA

        This prospectus includes market and industry data and forecasts that we have derived from independent consultant reports, publicly available information, various industry publications, other published industry sources and our internal data and estimates. Independent consultant reports, industry publications and other published industry sources generally indicate that the information contained therein was obtained from sources believed to be reliable.

        Our internal data and estimates are based upon information obtained from trade and business organizations and other contacts in the markets in which we operate and our management's understanding of industry conditions. Although we believe that such information is reliable, we have not had this information verified by any independent sources.

45


Table of Contents


DIVIDEND POLICY

        We do not anticipate declaring or paying in the foreseeable future any cash dividends on our capital stock. Any future determination as to the declaration and payment of dividends, if any, will be at the discretion of our board of directors and will depend on then existing conditions, including our operating results, financial condition, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant. See "Risk Factors—Risks Relating to This Offering and Ownership of Our Class A Common Stock—We do not intend to pay dividends on our Class A common stock for the foreseeable future." In addition, we are a holding company and have no direct operations, and therefore we will only be able to pay dividends from our available cash on hand and any funds we receive from our subsidiaries. The terms of indebtedness of our subsidiaries restrict our subsidiaries from paying dividends to us. See "Description of Capital Stock" and "Description of Certain Indebtedness."

46


Table of Contents


USE OF PROCEEDS

        We estimate that the net proceeds to us from the sale of the shares of Class A common stock by us in this offering will be approximately $             million (or $             million if the underwriters exercise in full their option to purchase additional shares of Class A common stock), assuming an initial public offering price of $            per share (the midpoint of the range set forth on the cover page of this prospectus) and after deducting the estimated underwriting discounts and commissions. A $1.00 increase (decrease) in the assumed initial public offering price of $            per share would increase (decrease) the net proceeds to us from this offering by $             million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions. An increase (decrease) of 1,000,000 shares from the expected number of shares to be sold in this offering, assuming no change in the assumed initial public offering price per share, would increase (decrease) our net proceeds from this offering by $             million, after deducting estimated underwriting discounts and commissions.

        We intend to use the net proceeds of this offering (excluding any net proceeds from any exercise of the underwriters' option to purchase additional shares of Class A common stock) to purchase directly from Neff Holdings a number of common units equal to the number of shares of Class A common stock issued in this offering. The net proceeds from any exercise of the underwriters' option to purchase additional shares of Class A common stock will be used to purchase a corresponding additional number of common units of Neff Holdings directly from Wayzata (and we would cancel a corresponding number of shares of Class B common stock held by Wayzata).

        Neff Holdings anticipates that it will use the $             million in net proceeds it receives from the sale of common units to Neff Corporation as follows:

    approximately $             million to prepay $            of the outstanding principal amount of the Second Lien Loan, which is scheduled to mature in June 2021 and which had an interest rate of approximately 7.25% as of June 30, 2014 and $             million to pay prepayment premiums related thereto;

    approximately $             million to repay a portion of the amounts outstanding under our Revolving Credit Facility, which is scheduled to mature in November 2018 and which had an interest rate of approximately 2.8% as of June 30, 2014; and

    approximately $             million to pay the fees and expenses (other than underwriter discounts and commissions) related to this offering.

        Upon prepayment of approximately $             million of the Second Lien Loan and repayment of approximately $             million under our Revolving Credit Facility, we will recognize a loss of approximately $             million in the quarter when such prepayments occur.

        Certain affiliates of the underwriters hold a portion of the indebtedness being repaid with a portion of the proceeds of this offering as described above. See "Underwriters."

47


Table of Contents


CAPITALIZATION

        The following table sets forth our cash and cash equivalents and capitalization as of June 30, 2014:

    on an actual basis for Neff Holdings and its consolidated subsidiaries; and

    on a pro forma basis for Neff Corporation to give effect to (1) the Organizational Transactions, (2) our sale of        shares of Class A common stock in this offering at an assumed offering price of $        per share, the midpoint of the range set forth on the cover page of this prospectus, after deducting the estimated underwriting discounts and commissions and (3) the application of the net proceeds therefrom as described under "Use of Proceeds."

        You should read this table in conjunction with the consolidated financial statements and the related notes, "Use of Proceeds," "Our Organizational Structure," "Unaudited Pro Forma Condensed Consolidated Financial Information" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus.

 
  As of June 30, 2014  
 
  Neff Holdings
Actual
  Neff Corporation
Pro Forma(1)
 
 
  (in thousands of dollars)
 

Cash and cash equivalents

  $ 589   $             
           

Long-term indebtedness:

             

Revolving Credit Facility(2)

    324,173        

Second Lien Loan(3)

    572,142        
           

Total indebtedness

  $ 896,315   $             
           

Total equity (deficiency):

             

Members' deficit

    (343,684 )    

Class A common stock, par value $0.01 per share,        shares authorized, 0 shares issued and outstanding on an actual basis,        shares issued and outstanding on a pro forma basis

           

Class B common stock, par value $0.01 per share,        shares authorized, 0 shares issued and outstanding on an actual basis,        shares issued and outstanding on a pro forma basis

           

Additional paid-in capital

           
           

Total members' deficit/stockholders' (deficiency)

    (343,684 )      

Non-controlling interests

           
           

Total equity (deficiency)

    (343,684 )      
           

Total capitalization

  $ 552,631   $             
           
           

(1)
A $1.00 increase (decrease) in the assumed initial public offering price of $            per share would increase (decrease) each of cash and cash equivalents, additional paid-in capital, total shareholders' (deficiency) equity and total capitalization by $             million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and the application of the net proceeds from this offering as described under "Use of Proceeds." An increase (decrease) of 1,000,000 shares from the expected number of shares to be sold in this offering, assuming no change in the assumed initial public offering price per share, would increase (decrease) our net proceeds from this offering by $             million, after deducting estimated underwriting discounts and commissions. If a change in the offering price per share or in the number of shares offered causes our cash to increase or decrease from the amount set forth above, we will repay a greater or lesser amount under the Revolving Credit Facility than we currently anticipate, which would correspondingly decrease or increase each of total indebtedness, additional paid-in capital, total stockholders' (deficiency), total equity (deficiency) and total capitalization.

(2)
The Revolving Credit Facility provides for up to $425.0 million of borrowings, subject to a borrowing base availability formula. As of June 30, 2014, borrowings under the Revolving Credit Facility totaled $324.2 million, including $4.7 million in outstanding letters of credit, and $96.1 million was available for additional borrowings based on our borrowing base as of such date. As of June 30, 2014, on a pro forma basis after giving effect to this offering and the application of net proceeds therefrom, based on our borrowing base as of such date, we would have had availability under our Revolving Credit Facility, net of approximately $4.7 million in outstanding letters of credit, of $         million.

(3)
The Second Lien Loan is $575.0 million in aggregate principal amount, net of approximately $2.9 million of unamortized discount for Neff Holdings as of June 30, 2014.

48


Table of Contents


DILUTION

        Because our existing shareholders do not own any Class A common stock or other economic interests in Neff Corporation, we have presented dilution in pro forma net tangible book value per share after this offering assuming that all existing options to acquire units of Neff Holdings that are vested on or within 60 days of June 30, 2014, which we refer to as "vested LLC options," are exercised and that all of the holders of units in Neff Holdings LLC (other than Neff Corporation) had their units redeemed in exchange for newly-issued shares of Class A common stock on a one-for-one basis in order to more meaningfully present the dilutive impact on the investors in this offering. We refer to the assumed exercise of vested LLC options and the assumed redemption of all units for shares of Class A common stock as described in the previous sentence as the "Assumed Redemption."

        Dilution is the amount by which the offering price paid by the purchasers of the Class A common stock in this offering exceeds the pro forma net tangible book value per share of Class A common stock after the offering. Net tangible book value per share is determined at any date by subtracting our total liabilities from the total book value of our tangible assets and dividing the difference by the number of shares of Class A common stock deemed to be outstanding at that date.

        Neff Holdings' net tangible book value as of June 30, 2014 was $536.0 million. After giving effect to the Organizational Transactions and the transactions described under "Unaudited Pro Forma Condensed Consolidated Financial Information," including the application of the proceeds from this offering as described in "Use of Proceeds," our pro forma net tangible book value as of June 30, 2014 would have been approximately $         million, or $        per share, assuming that on the closing date of this offering Wayzata and the holders of vested LLC options all redeemed their units in exchange for shares of our Class A common stock on a one-for-one basis. This represents an immediate dilution of $        per share to new investors purchasing Class A common stock in this offering. The following table illustrates this substantial and immediate dilution to new investors on a per share basis:

Assumed initial public offering price per share

  $           
       

Pro forma net tangible book value per share as of June 30, 2014 before this offering(1)

  $           
       

Increase attributable to investors in this offering

  $           
       

Pro forma net tangible book value after this offering

  $           
       

Dilution per share to new Class A common stock investors

  $           
       
       

(1)
Gives pro forma effect to the Organizational Transactions and the Assumed Redemption.

        Each $1.00 increase (decrease) in the assumed initial public offering price of $         million, or by $        per share would increase (decrease) our pro forma net tangible book value after this offering by $        per share and the dilution in pro forma net tangible book value to new investors in this offering by $        per share, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

        If the underwriters exercise their option to purchase additional shares in full, our pro forma net tangible book value per share after the offering would be $        per share, the increase in pro forma net tangible book value attributable to the offering would be $        per share and the dilution in pro forma net tangible book value to new investors would be $        per share.

        The following table summarizes, as of June 30, 2014 after giving effect to this offering, the differences between our existing owners and our new investors in this offering with regard to:

    the number of shares of Class A common stock purchased from us by investors purchasing shares in this offering and the number of shares issued to Wayzata and the holders of vested LLC options

49


Table of Contents

      assuming those members of Neff Holdings redeemed all of their units in exchange for shares of Class A common stock,

    the total amount paid to us by investors purchasing shares in this offering and by such existing members of Neff Holdings and

    the average price per share of Class A common stock paid by investors purchasing shares in this offering and by such existing members of Neff Holdings,

based upon the assumed initial public offering price of $            per share, the midpoint of the range set forth on the cover of this prospectus, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

 
  Shares Purchased   Total Consideration    
 
 
  Average
Price Per
Share
 
 
  Number   Percent   Amount   Percent  
 
  (in thousands of dollars)
 

Existing shareholders

                          % $                       % $           

New investors

                          % $                       % $           
                         

Total

                          % $                       % $           
                         
                         

        Each $1.00 increase (decrease) in the assumed initial public offering price of $        per share would increase (decrease) the total consideration paid by new investors and the total consideration paid by all shareholders by $         million, assuming the number of shares offered by us remains the same and after deducting estimated underwriting discounts and commissions but before estimated offering expenses.

        Except as otherwise indicated, the discussion and the tables above assume no exercise of the underwriter's option to purchase additional shares of Class A common stock. In addition, the discussion and tables above exclude shares of Class B common stock, which have no economic interest in our business. The number of shares of our Class A common stock outstanding after this offering as shown in the tables above is based on the number of shares outstanding as of June 30, 2014 after giving effect to the Organizational Transactions and the Assumed Redemption, and excludes:


    shares of Class A common stock that may become issuable upon exercise of existing options to acquire units of Neff Holdings, other than vested LLC options, and redemption of such units, which if ultimately exercised and redeemed, would represent approximately        % of the total number of shares of our Class A common stock outstanding immediately following the consummation of this offering and giving effect to the Assumed Redemption;


    shares of Class A common stock issuable upon exercise of options that we expect to grant under our proposed stock incentive plan, which that may become issuable upon exercise of existing options to acquire units of Neff Holdings, other than vested LLC options, and redemption of such units, which if ultimately exercised and redeemed as they become vested, would represent approximately        % of the total number of shares of our Class A common stock outstanding immediately following the consummation of this offering and giving effect to the Assumed Redemption;


    shares of our Class A common stock expected to be available for future grant under our proposed stock incentive plan after the consummation of this offering. See "Executive Compensation—Equity Incentive Plans—2014 Incentive Award Plan."

50


Table of Contents


UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

        We have derived the unaudited pro forma statement of operations for the year ended December 31, 2013 from the audited historical consolidated financial statements of Neff Holdings for the year ended December 31, 2013 set forth elsewhere in this prospectus. We have derived the unaudited pro forma statement of operations for the six months ended June 30, 2014 and the unaudited pro forma balance sheet data as of June 30, 2014 from the unaudited condensed consolidated financial statements of Neff Holdings as of and for the six months ended June 30, 2014 set forth elsewhere in this prospectus. The pro forma financial information is qualified in its entirety by reference to, and should be read in conjunction with, our historical financial statements and the related notes included elsewhere in this prospectus.

        The unaudited pro forma statement of operations for the year ended December 31, 2013 and the six months ended June 30, 2014 give effect to this offering, the Refinancing and the Organizational Transactions as if the same had occurred on January 1, 2013. The unaudited pro forma balance sheet as of June 30, 2014 gives effect to this offering and the Organizational Transactions as if the same had occurred on June 30, 2014.

        The pro forma adjustments are described in the notes to the unaudited pro forma financial information, and principally include the following:

    the Organizational Transactions described under "Our Organizational Structure" and the issuance and sale by us of         shares of Class A common stock to the public representing        % of the economic interests of Neff Corporation at an initial offering price of $        per share, the midpoint of the range set forth on the cover page of this prospectus, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us and the application of the net proceeds from this offering.

    a provision for federal and state income taxes of Neff Corporation as a taxable corporation at an effective rate of         %;

    an increase in interest expense as a result of the Refinancing;

    the use of net proceeds from this offering for the (i) prepayment of $         million of the outstanding principal amount of the Second Lien Loan and $         million of prepayment premiums related thereto and (ii) repayment of $         million of the outstanding borrowings under our Revolving Credit Facility; and

    the transaction bonuses paid to certain management and independent members of the board of directors in connection with this offering. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Financial Highlights—Refinancing."

        The unaudited pro forma condensed consolidated financial information presented assumes no exercise by the underwriters of the option to purchase up to an additional        shares of Class A common stock from us.

        As described in greater detail under "Certain Relationships and Related Party Transactions—Tax Receivable Agreement," prior to the completion of this offering, we will enter into the Tax Receivable Agreement with our existing owners. No increases in tax basis or other tax benefits thereunder have been assumed in the unaudited pro forma financial information and therefore no pro forma adjustment has been made.

        As a public company, we will be implementing additional procedures and processes for the purpose of addressing the standards and requirements applicable to public companies. We expect to incur additional annual expenses related to these steps and, among other things, additional directors' and officers' liability insurance, director fees, reporting requirements of the SEC, transfer agent fees, hiring additional accounting, legal and administrative personnel, increased auditing and legal fees and similar expenses. We have not included any pro forma adjustments relating to these costs.

51


Table of Contents

        We provide this unaudited pro forma condensed consolidated financial information for informational and comparative purposes only. The pro forma adjustments are described in greater detail in the accompanying footnotes, which you should read in conjunction with the unaudited pro forma condensed consolidated financial information. We have made the pro forma adjustments described in the accompanying footnotes based on available information.

        The assumptions used in the preparation of the unaudited pro forma condensed consolidated financial information may not prove to be correct. The pro forma adjustments do not purport to be and should not be considered indicative of what our actual financial position or results of operations would have been if the transactions described had been completed as of the dates indicated or for any future date or for any period. The unaudited pro forma condensed consolidated financial information should be read together with "Use of Proceeds," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Executive Compensation," the consolidated historical financial statements and the related notes thereto, and the other financial information included elsewhere in this prospectus.

52


Table of Contents


Neff Corporation and Subsidiaries

Unaudited Pro Forma Consolidated Balance Sheet as of June 30, 2014

 
  Historical
Neff Holdings
  Offering and
Organizational
Transaction
Adjustments
  Pro Forma
Neff Corporation
 
 
  (in thousands of dollars)
 

ASSETS

                   

Cash and cash equivalents

  $ 589   $   $    

Accounts receivable, net

    55,323            

Inventories

    2,035            

Rental equipment, net

    426,423            

Property and equipment, net

    32,708            

Prepaid expenses and other assets

    18,878       (1)      

Goodwill

    58,765            

Intangible assets, net

    17,357            
               

Total assets

  $ 612,078   $     $    
               
               

LIABILITIES AND MEMBERS' DEFICIT/STOCKHOLDERS' EQUITY

                   

(DEFICIENCY)

                   

Liabilities

                   

Accounts payable

  $ 18,828   $   $    

Accrued expenses and other liabilities

    40,619       (2)      

Revolving Credit Facility

    324,173       (3)      

Second Lien Loans

    572,142       (3)      
               

Total Liabilities

    955,762              
               
               

Members' deficit/stockholders' equity

                   

Members' deficit

    (343,684 )     (7)      

Class A common stock, par value $0.01 per share

          (5)      

Class B common stock, par value $0.01 per share

          (5)      

Additional paid in capital

          (6)      
               

Total members'/stockholders' (deficiency)

    (343,684 )            

Non-controlling interest

          (4)      
               

Total members' equity (deficiency)

    (343,684 )            
               

Total liabilities and members' deficit/stockholders' equity (deficiency)

  $ 612,078   $     $    
               
               

(1)
Represents unamortized debt issuance costs on the Second Lien Loan written off in connection with the partial prepayment of the Second Lien Loan with the proceeds of this offering.

(2)
Represents the transaction bonuses in the aggregate amount of $      paid to certain management and non-employee members of the board of directors in connection with the consummation of this offering. See "Executive Compensation."

(3)
As described under "Use of Proceeds," we will use a portion of the net proceeds from this offering to purchase new common units from Neff Holdings, and Neff Holdings will use those proceeds as follows:

approximately $             million to prepay $            of the outstanding principal amount of the Second Lien Loan together with approximately $           million of prepayment premium and accrued and unpaid interest thereon;

approximately $             million to repay a portion of the amounts outstanding under our Revolving Credit Facility together with fees and accrued and unpaid interest thereon; and

approximately $             million to pay the fees and expenses related to this offering.

53


Table of Contents


Neff Corporation and Subsidiaries

Unaudited Pro Forma Consolidated Balance Sheet as of June 30, 2014

(4)
Following the Organizational Transactions and offering, we will record significant non-controlling interests in consolidated entity relating to the ownership interest of Wayzata in Neff Holdings. As described in "Our Organizational Structure," Neff Corporation will be the sole managing member of Neff Holdings. Accordingly, although Neff Corporation will have a minority economic interest in Neff Holdings, it will have a majority voting interest in, and control the management of, Neff Holdings. As a result, Neff Corporation will consolidate Neff Holdings and record non-controlling interests in consolidated entity for the economic interest in Neff Holdings held by Wayzata.

(5)
Represents an adjustment to stockholders' equity reflecting par value for Class A common stock and Class B common stock to be outstanding following this offering.

(6)
Represents an increase of $       million to additional paid-in capital as a result of the amounts allocable to Neff Holdings of net proceeds from this offering (offering proceeds, net of underwriting discounts, of $       million, less $       million of offering expenses and less par value reflected in note 5 and the elimination of members' capital of $       million upon consolidation).

(7)
Represents an adjustment to members' deficit for the Organizational Transactions.

54


Table of Contents


Neff Corporation and Subsidiaries

Unaudited Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 2013

 
  Historical
Neff Holdings
  Offering and
Organizational
Transaction
Adjustments
  Pro Forma
Neff Corporation
 
 
  (in thousands of dollars, except per share data)
 

Revenues:

                   

Rental revenues

  $ 281,038   $     $    

Equipment sales

    33,487              

Parts and service

    12,682              
               

Total revenues

    327,207              
               

Cost of revenues:

   
 
   
 
   
 
 

Cost of equipment sold

    19,204              

Depreciation of rental equipment

    70,768              

Cost of rental revenues

    74,482              

Cost of parts and service

    7,677              
               

Total cost of revenues

    172,131              
               

Gross profit

    155,076              
               

Other operating expenses:

                   

Selling, general and administrative expenses

    78,617              

Other depreciation and amortization

    8,968              
               

Total other operating expenses

    87,585              
               

Income from operations

    67,491              
               

Other expense:

                   

Interest expense

    24,598       (1)      

Loss on debt extinguishment

                 

Amortization and write-off of debt issue costs

    1,929       (2)      
               

Income before income taxes

    40,964              

Provision for income taxes

    (471 )     (3)      
               

Net income

    40,493              
               

Net income attributable to non-controlling interest

          (4)    
               

Net income attributable to us

  $ 40,493              
               
               

Net income (loss) per share data(5):

                   

Weighted average shares of Class A common stock outstanding:

                 

Basic

                 

Diluted

                 

Net income available to Class A common stock per share:

                   

Basic

              $  

Diluted

              $  

(1)
As a result of the Refinancing, our interest expense increased by $            on an annualized basis. The use of proceeds to repay a portion of our Revolving Credit Facility and the Second Lien Loan will result in a reduction in our interest expense of $            on an annualized basis.

55


Table of Contents

(2)
Represents the write off of debt issue costs in connection with the prepayment of a portion of the Second Lien Loan.

(3)
Following the Organizational Transactions and offering, we will be subject to U.S. federal income taxes, in addition to certain state, local and foreign taxes, with respect to our allocable share of any net taxable income of Neff Holdings, which will result in higher income taxes and an increase in income taxes paid. As a result, this reflects an adjustment to our provision for corporate income taxes to reflect an effective rate of      %, which includes provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each applicable state, local and foreign jurisdiction.

(4)
Following the Reorganizational Transactions and offering, we will record significant non-controlling interests in consolidated entity relating to the ownership interest of Wayzata in Neff Holdings. As described in "Our Organizational Structure," Neff Corporation will be the sole managing member of Neff Holdings. Accordingly, although Neff Corporation will have a minority economic interests in Neff Holdings, it will have a majority voting interest in, and control the management of, Neff Holdings. As a result, Neff Corporation will consolidate Neff Holdings and record non-controlling interest in consolidated entity for the economic interest in Neff Holdings held by Wayzata.

(5)
Pro forma net income (loss) per share is calculated by dividing the pro forma net income (loss) by the weighted average shares outstanding.

56


Table of Contents


Neff Corporation and Subsidiaries

Unaudited Pro Forma Consolidated Statement of Operations for the Six Months Ended June 30, 2014

 
  Historical
Neff Holdings
  Offering and
Organizational
Transaction
Adjustments
  Pro Forma
Neff Corporation
 
 
  (in thousands of dollars, except per share data)
 

Revenues:

                   

Rental revenues

  $ 152,626   $     $    

Equipment sales

    10,794              

Parts and service

    6,675              
               

Total revenues

    170,095              
               

Cost of revenues:

                   

Cost of equipment sold

    6,119              

Depreciation of rental equipment

    36,489              

Cost of rental revenues

    37,624              

Cost of parts and service

    4,094              
               

Total cost of revenues

    84,326              
               

Gross profit

    85,769              
               

Other operating expenses:

                   

Selling, general and administrative expenses

    40,372              

Other depreciation and amortization

    4,708              

Transaction bonus

    24,506              
               

Total other operating expenses

    69,586              
               

Income from operations

    16,183              
               

Other expense:

                   

Interest expense

    15,119       (1)      

Loss on debt extinguishment

    15,896              

Amortization and write-off of debt issue costs

    2,339       (2)      
               

Loss before income taxes

    (17,171 )            

Provision for income taxes

    (238 )     (3)      
               

Net loss

    (17,409 )            
               

Net loss attributable to non-controlling interest

          (4)    
               

Net loss attributable to us

  $ (17,409 ) $     $    
               
               

Net loss per share data(5):

                   

Weighted average shares of Class A common stock outstanding:

                   

Basic

                 

Diluted

                 

Net income available to Class A common stock per share:

                   

Basic

              $  

Diluted

              $  

(1)
As a result of the Refinancing, our interest expense increased by $            on an annualized basis (or $            for a six month period). The use of proceeds to repay a portion of our Revolving Credit

57


Table of Contents

    Facility and the Second Lien Loan will result in a reduction in our interest expense of $            on an annualized basis (or $            for a six month period).

(2)
Represents the write off of debt issue costs in connection with the prepayment of a portion of the Second Lien Loan.

(3)
Following the Organizational Transactions and offering, we will be subject to U.S. federal income taxes, in addition to certain state, local and foreign taxes, with respect to our allocable share of any net taxable income of Neff Holdings, which will result in higher income taxes and an increase in income taxes paid. As a result, this reflects an adjustment to our provision for corporate income taxes to reflect an effective rate of    %, which includes provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each applicable state, local and foreign jurisdiction.

(4)
Following the Reorganizational Transactions and offering, we will record significant non-controlling interests in consolidated entity relating to the ownership interest of Wayzata in Neff Holdings. As described in "Our Organizational Structure," Neff Corporation will be the sole managing member of Neff Holdings. Accordingly, although Neff Corporation will have a minority economic interest in Neff Holdings, it will have a majority voting interest in, and control the management of, Neff Holdings. As a result, Neff Corporation will consolidate Neff Holdings and record non-controlling interests in consolidated entity for the economic interest in Neff Holdings held by Wayzata.

(5)
Pro forma net income (loss) per share is calculated by dividing the pro forma net income (loss) by the weighted average shares outstanding.

58


Table of Contents


SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

        The following tables present, as of the dates and for the periods indicated, the selected historical consolidated financial data for Neff Holdings and its subsidiaries. Neff Holdings is the predecessor of the issuer, Neff Corporation, for financial reporting purposes. The historical financial statements of Neff Corporation have not been presented in this "Selected Historical Consolidated Financial Data" section because it is a newly-incorporated entity, had no assets or liabilities during the periods presented and has had no business transactions or activities to date.

        Neff Holdings is a holding company that conducts no operations and its only material asset as of the consummation of this offering is its membership interests in Neff LLC. Neff LLC is a holding company that conducts no operations and its only material asset is its membership interests in Neff Rental LLC, the principal operating company for our business.

        We have derived the selected historical financial data as of and for the years ended December 31, 2012 and 2013 from the audited consolidated financial statements of Neff Holdings included elsewhere in this prospectus. We have derived the selected historical financial data as of and for the year ended December 31, 2011 from the unaudited consolidated financial statements of Neff Holdings not included in this prospectus. We have derived the selected historical financial data as of June 30, 2014 and for the six months ended June 30, 2013 and 2014 from the unaudited consolidated financial statements of Neff Holdings included elsewhere in this prospectus. We have derived the selected historical financial data as of June 30, 2013 from the unaudited consolidated financial statements of Neff Holdings not included in this prospectus. In the opinion of management, such unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results for those periods.

        The results of operations for the periods presented below are not necessarily indicative of the results to be expected for any future period and the results for any interim period are not necessarily indicative of the results that may be expected for a full fiscal year. The following selected historical consolidated financial data should be read in conjunction with, and is qualified by reference to, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements and the notes thereto included elsewhere in this prospectus.

59


Table of Contents

 
  Historical Neff Holdings  
 
  Year Ended December 31,   Six Months Ended
June 30,
 
 
  2011   2012   2013   2013   2014  
 
  (in thousands of dollars)
 

Statement of Operations Data:

                               

Revenues:

                               

Rental revenues

  $ 197,430   $ 234,609   $ 281,038   $ 130,744   $ 152,626  

Equipment sales

    36,934     44,828     33,487     13,429     10,794  

Parts and service

    10,478     11,540     12,682     6,194     6,675  
                       

Total revenues

    244,842     290,977     327,207     150,367     170,095  

Cost of revenues:

                               

Cost of equipment sold

    27,497     25,528     19,204     7,888     6,119  

Depreciation of rental equipment

    84,438     66,017     70,768     34,667     36,489  

Cost of rental revenues

    64,824     69,337     74,482     34,819     37,624  

Cost of parts and service

    6,452     6,982     7,677     3,716     4,094  
                       

Total cost of revenues

    183,211     167,864     172,131     81,090     84,326  
                       

Gross profit

    61,631     123,113     155,076     69,277     85,769  

Other operating expenses:

                               

Selling, general and administrative expenses

    65,901     71,621     78,617     38,386     40,372  

Other depreciation and amortization

    11,937     9,041     8,968     4,622     4,708  

Transaction bonus(1)

                    24,506  
                       

Total other operating expenses

    77,838     80,662     87,585     43,008     69,586  
                       

(Loss) income from operations

    (16,207 )   42,451     67,491     26,269     16,183  

Other Expenses:

   
 
   
 
   
 
   
 
   
 
 

Interest expense(2)

    16,524     23,221     24,598     12,103     15,119  

Loss on debt extinguishment(3)

                    15,896  

Other non-operating expenses, net(4)

    3,267     1,563     1,929     804     2,339  
                       

Provision for income taxes

    (785 )   (159 )   (471 )   (332 )   (238 )
                       

Net (loss) income

  $ (36,783 ) $ 17,508   $ 40,493   $ 13,030   $ (17,409 )
                       
                       

Balance Sheet Data (as of period end):

                               

Cash and cash equivalents

  $ 162   $ 586   $ 190   $ 159   $ 589  

Rental equipment:

                               

Rental equipment at cost

    318,855     440,810     516,182     507,691     623,656  

Accumulated depreciation

    (90,250 )   (124,930 )   (168,926 )   (150,003 )   (197,233 )
                       

Rental equipment, net

    228,605     315,880     347,256     357,688     426,423  

Total assets

    377,052     479,059     526,702     525,632     612,078  

Total indebtedness(5)

    278,700     342,621     479,200     384,600     896,315  

Members' surplus (deficiency)

    52,379     71,365     3,082     85,007     (343,684 )

Cash Flow Data:

   
 
   
 
   
 
   
 
   
 
 

Cash flow from operating activities

    44,238     68,331     108,410     50,225     35,576  

Cash flow from investing activities

    (90,663 )   (131,022 )   (125,332 )   (92,631 )   (106,164 )

Cash flow from financing activities

    45,684     63,115     16,526     41,979     70,987  

(1)
Represents the transaction bonus paid to certain management and independent members of the board of directors in connection with the Refinancing. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Financial Highlights—Refinancing."

(2)
Interest expense excludes the amortization of debt issue costs (see footnote (4)).

(3)
Loss on debt extinguishment includes $8.7 million in unamortized debt issue costs as well as $7.2 million in call premiums.

(4)
Other non-operating expenses, net represents amortization of debt issue costs of $1.2 million, $1.5 million and $1.9 million, for the years ended December 31, 2011, 2012 and 2013, respectively, and $0.8 million and $2.3 million for the six months ended June 30, 2013 and 2014, respectively. Other non-operating expenses, net also includes $1.6 million for reorganizational expenses and $0.5 million for loss on an interest rate swap for the year ended December 31, 2011. Other non-operating expenses, net also includes $0.1 million for loss on an interest rate swap for the year ended December 31, 2012.

(5)
As of June 30, 2014, our outstanding indebtedness consisted of borrowings under the Revolving Credit Facility and the Second Lien Loan.

60


Table of Contents


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        The following discussion and analysis should be read together with the sections entitled "Risk Factors," "Selected Historical Consolidated Financial Data" and the financial statements and the notes thereto included elsewhere in this prospectus. The historical financial data discussed below reflects the historical results of operations and financial condition of Neff Holdings and its consolidated subsidiaries and does not give effect to the Organizational Transactions. See "Our Organizational Structure" and "Unaudited Pro Forma Condensed Consolidated Financial Information" included elsewhere in this prospectus for a description of the Organizational Transactions and their effect on our historical results of operations. In addition, the statements in this discussion and analysis regarding industry outlook, our expectations regarding the performance of our business and the other non-historical statements are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in "Risk Factors" and "Forward-Looking Statements." Our actual results may differ materially from those contained in or implied by any forward-looking statements.

Overview

        We are a leading regional equipment rental company in the United States, focused on the fast-growing Sunbelt states. We offer a broad array of equipment rental solutions for our diverse customer base, including infrastructure, non-residential construction, oil and gas, municipal and residential construction customers. Our broad fleet of equipment includes earthmoving, material handling, aerial and other related rental equipment, which we package together to meet the specific needs of our customers. We consider the earthmoving equipment category to be a core competency of our Company and a key differentiator of our business.

        Our revenues are affected primarily by the time utilization of the equipment in our rental fleet, the rental rates we can charge for that equipment and the amount of equipment we have in our fleet available for rent. See "—Key Performance Measures" for definitions of time utilization and rental rates. We generate revenues from the following three sources:

    Rental revenues—this consists of rental revenues and related revenues such as the fees we charge for the pickup and delivery of equipment, damage waivers and other surcharges.

    Equipment sales—this consists primarily of revenues from the sale of our used rental equipment and also includes sales of ancillary new equipment to our customers.

    Parts and service—this includes revenues from customers for fuel and the repair of damaged rental equipment as well as from the sale of complementary parts, supplies and merchandise to our customers in conjunction with our equipment rental business.

    Outlook

        We operate in a competitive and capital-intensive environment. The participants in our industry consist of national, regional and local rental companies, certain original equipment manufacturers, or OEMs, and their dealers. The equipment rental industry is highly cyclical and its revenues are closely tied to general economic conditions and to conditions in the construction industry in particular. Time utilization and rental rates are a function of market demand, which in turn is tied to the general economic conditions in the geographic regions in which we operate, particularly conditions affecting the non-residential construction industry.

        Beginning in the second half of 2011 and continuing through the present, the U.S. construction industry has been growing, which in turn has had a positive impact on the equipment rental industry. We believe that the rental industry will continue to benefit from improving macroeconomic and construction industry conditions. Industry research sources have recently provided optimistic outlooks for U.S.

61


Table of Contents

construction spending, including FMI Construction Outlook, which estimates total U.S. construction spending to grow by more than 6.0% each year from 2014 to 2018. We believe that part of this industry growth will be driven by the ongoing secular shift in North America toward reliance on equipment rental instead of ownership, as evidenced by the increasing penetration rate. According to the American Rental Association Equipment Rental Penetration Index, the penetration rate rose from 51% in 2012 to 53% in 2013. We believe that the shift from owning to renting equipment in North America will continue as construction and industrial firms recognize the advantages of renting rather than owning equipment, and that this trend will continue to result in increased penetration rates in the future. We believe that these trends should continue to support increased rental demand and will result in continued improvement in our business. However, these macroeconomic factors are outside of our control, and we cannot assure you that the improvement in our operating results that we have experienced will continue in future periods. See "Risk Factors—Risks Relating to Our Business—The equipment rental industry is highly cyclical. Decreases in construction or industrial activities could materially adversely affect our revenues and operating results by decreasing the demand for our equipment or the rental rates or prices we can charge."

        Overall, the rental industry has benefited from growth in U.S. construction spending over the past two years and a decrease in excess available rental equipment. These factors, along with management initiatives focused on increasing rental rates, have led to strong year-over-year increases in rental rates and rental revenues for approximately the past four years. A large proportion of our costs are fixed and, as a result, there is a strong correlation between an increase or decrease in our rental revenues and an increase or decrease in our profitability. Thus, the recent increases in rental revenues have led to a significant improvement in our income from operations. We believe that we will continue to benefit from the operating leverage afforded us by the fixed cost nature of our business to the extent we are able to continue to grow our revenues in future periods through increases in rental rates and the amount of equipment we are able to support on our existing branch network.

    Seasonality and Other External Factors That Affect Our Business

        Our operating results are subject to annual and seasonal fluctuations resulting from a variety of factors, including:

    the seasonality of rental activity by our customers, with lower activity levels during the winter;

    the cyclicality of the construction industry;

    the number of our significant competitors and the competitive supply of rental equipment; and

    general economic conditions.

        In addition, our operating results may be affected by severe weather events (such as hurricanes and flooding) in the regions we serve. Severe weather events can result in short-term reductions in construction activity levels, but after these periods of reduced construction activity, repair and reconstruction efforts have historically resulted in periods of increased demand for rental equipment.

Financial Highlights

        During the years ended December 31, 2012 and 2013 and the six months ended June 30, 2014, our business has benefitted from the sustained strengthening in the demand for rental equipment in the end-markets and regions we serve for the reasons discussed above. Time utilization of the units in our rental fleet first stabilized in 2010, and since then it has increased and continues to hold at strong levels. With improved time utilization, we have been able to adjust our rental rates in line with customer demand. The increased revenues resulting from the combination of improved time utilization and rental rates gave us the momentum and the liquidity to invest significantly in purchasing additional equipment to add to our rental fleet, and therefore further increase our operating income as we leveraged a larger rental fleet across our existing scalable network of branch locations. As a result, our Adjusted EBITDA increased

62


Table of Contents

25.7% to $150.8 million for the year ended December 31, 2013 as compared to the prior year, and increased 24.9% to $83.2 million for the six months ended June 30, 2014 as compared to the same period in the prior year, as illustrated in the table below:

 
  Year Ended
December 31,
  Six Months Ended
June 30,
 
 
  2012   2013   2013   2014  
 
  (in thousands of dollars)
 

Net income (loss)

  $ 17,508   $ 40,493   $ 13,030   $ (17,409 )

Interest expense

    23,221     24,598     12,103     15,119  

Provision for income taxes

    159     471     332     238  

Depreciation of rental equipment

    66,017     70,768     34,667     36,489  

Other depreciation and amortization

    9,041     8,968     4,622     4,708  

Amortization of debt issue costs

    1,461     1,929     804     2,339  
                   

EBITDA

    117,407     147,227     65,558     41,484  

Loss on debt extinguishment(a)

                15,896  

Transaction bonus(b)

                24,506  

Rental split expense(c)

    932     2,343     419     745  

Equity compensation expense(d)

    1,478     1,224     612     526  

Other(e)

    102              
                   

Adjusted EBITDA

  $ 119,919   $ 150,794   $ 66,589   $ 83,157  
                   
                   

(a)
Represents expenses and realized losses that were incurred in connection with the redemption of our Senior Secured Notes (as defined below under "—Refinancing").

(b)
Represents the transaction bonus paid to certain management and independent members of the board of directors in connection with the Refinancing. See "—Refinancing."

(c)
Represents cash payments made to suppliers of equipment in connection with rental splits, which payments are credited against the purchase price of the applicable equipment if Neff Holdings elects to purchase that equipment. See "—Results of Operations" for a discussion of rental splits.

(d)
Represents non-cash equity-based compensation expense recorded in the periods presented in accordance with GAAP.

(e)
Represents (i) the adjustment of certain interest rate swaps to fair value and (ii) loss on interest rate swaps.

        For more information regarding our calculation and inclusion of Adjusted EBITDA, see "Prospectus Summary—Summary Historical and Pro Forma Consolidated Financial Data."

    Refinancing

        On June 9, 2014, Neff Holdings completed a refinancing, which we refer to as the "Refinancing," in which it refinanced certain of its existing debt, paid a distribution to its members and paid related fees and expenses. Prior to the Refinancing, Neff Holdings and its subsidiaries had a long-term debt capitalization consisting of a $375.0 million senior secured asset-based revolving credit facility, which we refer to as the "Revolving Credit Facility," and $200.0 million in aggregate principal amount of 9.625% Senior Secured Notes due 2016, which we refer to as the "Senior Secured Notes." In the Refinancing, Neff Holdings and its subsidiaries:

    increased the commitments under the Revolving Credit Facility to $425.0 million, increasing liquidity available for purchases of rental equipment, other working capital and other general corporate purposes;

63


Table of Contents

    borrowed $575.0 million of term loans under a second lien credit agreement, which we refer to as the "Second Lien Loan";

    used a portion of the net proceeds of the Second Lien Loan to prepay the Senior Secured Notes in full, together with a prepayment premium and accrued and unpaid interest thereon;

    used a portion of the net proceeds of the Second Lien Loan to make a $354.4 million distribution to the members of Neff Holdings and to pay the transaction bonus to certain management and independent members of the board of directors; and

    used a portion of the net proceeds of the Second Lien Loan to pay fees and expenses related to the above transactions.

        As a result of the Refinancing, the net indebtedness of Neff Holdings and its subsidiaries increased by approximately $375.0 million and we estimate that our effective per annum interest expense increased by approximately $22.4 million per year. We intend to apply approximately $         million of the net proceeds from this offering to prepay a portion of the Second Lien Loan and approximately $         million of the net proceeds from this offering to repay a portion of borrowings outstanding under our Revolving Credit Facility, and we expect that our total per annum interest expense will decline accordingly. Because the Refinancing occurred in June 2014, the net increase in interest expense is not fully reflected in the six months ended June 30, 2014. However, other expenses incurred in connection with the Refinancing adversely affected our results for the six months ended June 30, 2014, including a loss on the extinguishment of debt related to the redemption of the Senior Secured Notes of $15.9 million and an expense for the transaction bonus paid to certain management and independent members of the board of directors in connection with the completion of the Refinancing of $24.5 million.

Company Structure and Effects of the Organizational Transactions

        The historical results of operations discussed in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" are those of Neff Holdings and its consolidated subsidiaries prior to the Organizational Transactions and this offering, and do not reflect certain items that we expect will affect our results of operations and financial condition after giving effect to the Organizational Transactions and the use of proceeds from this offering.

        Neff Holdings is treated as a partnership for U.S. federal income tax purposes and, as such, is not subject to any entity-level U.S. federal income tax. Rather, taxable income or loss is included in the respective U.S. federal income tax returns of Neff Holdings' members. Prior to the consummation of this offering, the Wayzata funds are the only members of Neff Holdings.

        Following the completion of the Organizational Transactions and this offering, Neff Corporation, the issuer in this offering, will become the sole managing member of Neff Holdings and will purchase newly-issued common units of Neff Holdings representing a      % equity interest in Neff Holdings (or      % if the underwriters exercise in full their option to purchase additional shares of our Class A common stock). As the sole managing member of Neff Holdings, we will control its business and affairs and, therefore, we will consolidate its financial results with ours. Immediately after the Organizational Transactions and this offering, Wayzata will retain common units in Neff Holdings representing a collective      % economic interest (or      % if the underwriters exercise in full their option to purchase additional shares of our Class A common stock) and a non-controlling interest in Neff Holdings, and we will reflect Wayzata's collective economic interest as a non-controlling interest in our consolidated financial statements. As a result, our net income, after excluding the non-controlling interest of Wayzata, will represent      % of Neff Holdings' net income (or      % if the underwriters exercise in full their option to purchase additional shares of our Class A common stock) and our only material asset will be our corresponding      % economic interest (or      % if the underwriters exercise in full their option to purchase additional shares of our Class A common stock) and controlling interest in Neff Holdings. Neff Holdings is a holding company

64


Table of Contents

that conducts no operations and, as of the consummation of this offering, its only material asset will be the equity interests of its direct and indirect subsidiaries. Neff Holdings acquired the equity of its subsidiaries, which we refer to as the "Acquisition," from our Prior Predecessor pursuant to our Prior Predecessor's plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code. The Acquisition closed on October 1, 2010.

        After completion of the Organizational Transactions and this offering, we expect that our results of operations and financial condition will be affected by the following additional factors that are not reflected in the historical financial information of Neff Holdings discussed below. For more information on the pro forma impact of the Organizational Transactions and this offering, as well as the other aspects of the Organizational Transactions, see "Our Organizational Structure" and "Unaudited Pro Forma Condensed Consolidated Financial Information."

    Provision For (Benefit From) Income Tax—We will become a taxpayer subject to income taxes at rates generally applicable to C corporations, and therefore our results of operations will be affected by the amount of accruals for tax benefits or payments that Neff Holdings (as a partnership for U.S. federal income tax purposes) historically has not reflected in its results of operations. We expect that our effective combined federal and state income tax rate will be approximately 39% after giving effect to the Organizational Transactions. For more information on the income taxes that will be applicable to us as a C corporation, see "Our Organizational Structure" and "Unaudited Pro Forma Consolidated Financial Information."

    Potential Tax Benefit Due to Step-up In Basis—We expect to obtain an increase in our share of the tax basis of the assets of Neff Holdings as a result of the Organizational Transactions, including any purchase of common units from Wayzata with the proceeds from this offering and the use of proceeds from this offering to repay certain indebtedness of Neff Holdings. We may obtain a similar increase in our share of the tax basis of the assets of Neff Holdings in the future, when (as described below under "Certain Relationships and Related Party Transactions—Neff Holdings LLC Agreement—Agreement in Effect Upon Completion of this Offering—Common Unit Redemption Right") an existing owner receives shares of our Class A common stock or cash at our election in connection with an exercise of such existing owner's right to have common units in Neff Holdings held by such existing owner redeemed by Neff Holdings or, at the election of Neff Corporation, exchanged (which we intend to treat as our direct purchase of common units from such existing owner for U.S. federal income and other applicable tax purposes, regardless of whether such common units are surrendered by an existing owner to Neff Holdings for redemption or sold to us upon the exercise of our election to acquire such common units directly). The step-up may result in a reduction in the amount of taxes that we are required to pay relative to the amount of taxes payable by other members of Neff Holdings who are similarly situated but who do not receive a similar step-up in basis. For more information, see "Certain Relationships and Related Party Transactions—Tax Receivable Agreement."

    Tax Receivable Agreement—We will enter into a Tax Receivable Agreement with our existing owners pursuant to which we will be obligated to pay to our existing owners 85% of the amount of tax benefits, if any, that we actually realize (or in some circumstances are deemed to realize) as a result of the step-up in basis discussed above. The payments by us to our existing owners will be reflected as an expense on our statement of operations and therefore reduce our net income in the applicable periods in the future. For more information on the tax receivable agreement, see "Certain Relationships and Related Party Transactions—Tax Receivable Agreement."

        In addition, we expect that after the consummation of this offering our financial statements also will reflect additional equity incentive compensation expense, certain public company compliance costs and the effects of non-controlling interests in Neff Holdings. See "Risk Factors," "Executive Compensation,"

65


Table of Contents

"Certain Relationships and Related Party Transactions," and "Unaudited Pro Forma Condensed Consolidated Financial Information."

Key Performance Measures

        From time to time we use certain key performance measures in evaluating our business and results of operations and we may refer to one or more of these key performance measures in this "Management's Discussion and Analysis of Financial Condition and Results of Operations." These key performance measures include:

    Adjusted EBITDA—we define Adjusted EBITDA as net income (loss) plus interest expense, provision for income taxes, depreciation of rental equipment, other depreciation and amortization and amortization of debt issue costs, as further adjusted to give effect to various non-cash and other items that we do not consider to be unusual or otherwise not indicative of our ongoing operations. A similar measure is used in the credit agreements governing our Revolving Credit Facility and Second Lien Loan to determine compliance with certain financial and other covenants.

    OEC—we present OEC, defined as the cost originally paid to manufacturers, as the daily average OEC of equipment on rent, divided by the OEC of all equipment in the rental fleet during the relevant period.

    Rental rates—we define rental rates as the rates charged to our customers on rental contracts that typically are for a daily, weekly or monthly term. Rental rates change over time based on a combination of pricing, the mix of equipment on rent and the mix of rental terms with customers. Period over period changes in rental rates are calculated on a weighted average with the weighting based on prior period revenue mix.

    Time utilization—we define time utilization as the daily average OEC of equipment on rent, divided by the OEC of all equipment in the rental fleet during the relevant period.

Results of Operations

        The following summary highlights the key elements of certain line items discussed further below in the period-over-period analysis of our results of operations:

    Total Revenues:

    Rental Revenues:  relates to revenues received from customers under leases for our rental equipment and includes related revenues such as the fees we charge for the pickup and delivery of equipment, damage waivers and other surcharges.

    Equipment Sales:  relates primarily to revenues received from third parties upon the sale of used equipment from our rental fleet, which generally increases in the winter months when customer activity and time utilization are comparatively lower. To a much lesser extent, this line item also includes revenues received upon the sale to customers of ancillary new equipment.

    Parts and Service:  relates primarily to revenues received from sales of complementary parts, supplies and merchandise in conjunction with our equipment rental business, as well as from services provided to repair rental equipment damaged by customers, which is billable to our customers, and fuel costs charged to customers.

    Cost of Equipment Sold:  relates primarily to the net book value of our used rental fleet that is sold in the ordinary course of our active fleet management.

    Depreciation of Rental Equipment:  relates to the depreciation of the cost of equipment in our rental fleet and is generally calculated on a straight-line basis over the estimated service life of the asset (generally two to eight years with a 10% to 20% residual value).

66


Table of Contents

    Cost of Rental Revenues:  relates primarily to the delivery and retrieval of rental equipment (including fuel), maintenance and repairs to our rental equipment fleet (including parts), and labor costs and related payroll expenses (such as insurance, benefits and overtime) for drivers and mechanics. This line item also includes the portion of rental revenues paid over to OEMs under rental splits described below that we may have in place from time to time.

    Cost of Parts and Service:  relates primarily to costs attributable to the sale of parts and fuel directly to customers and service provided for the maintenance and repair of our equipment damaged by customers, which is billable to our customers.

    Selling, General and Administrative Expenses:  relates primarily to general selling, general overhead and administrative costs such as branch management and sales, accounting, finance, legal and marketing expenses. This line item also includes payments under leases for our headquarters and branch locations, expenses associated with software licenses, property taxes payable on our rental equipment and payroll, sales commission, bonus and benefits expenses allocable to executive, regional and branch management. This line item also includes provisions for bad debt expense and any ordinary course litigation expense.

    Other Depreciation and Amortization:  relates primarily to depreciation of non-rental property, plant and equipment—such as trucks and trailers used to transport rental equipment as well as office equipment—and amortization of intangibles such as customer lists.

    Interest Expense:  relates primarily to interest expense incurred in connection with our long-term debt facilities and the amortization of the related original issue discount, in each case for the periods in which those debt obligations were outstanding. See "—Financial Highlights—Refinancing" and "Description of Certain Indebtedness."

        We utilize rental splits in our operations. Rental splits are a consignment arrangement of new equipment by OEMs in which we hold their equipment in our rental fleet for a period of time (typically between three and 12 months) and agree to share with the OEM a percentage of the rental revenue we receive on the rental of that unit. We do not take title to the unit under this arrangement and we can return the unit to the OEM at any time at no additional cost to us. We also can elect to purchase the unit from the OEM from time to time. The revenue we pay to the OEM under rental splits is expensed in cost of rental revenues on our statement of operations, but added back to Adjusted EBITDA in order to maintain comparability to our results from period to period. If we exercise the option to purchase the unit, the unit becomes part of our rental fleet and is depreciated, with depreciation added back to Adjusted EBITDA. Before we exercise the option to purchase a unit, we count the unit as part of our rental fleet for OEC calculations but do not depreciate the unit. As of June 30, 2014, rental splits accounted for approximately 2.1% of our average OEC.

67


Table of Contents

    Six Months Ended June 30, 2014 Compared to Six Months Ended June 30, 2013

        The following table illustrates our operating activity for the six months ended June 30, 2014 and the six months ended June 30, 2013.

 
  For the Six Months
Ended June 30,
   
 
 
  2013   2014   % Change  
 
  (in thousands of dollars)
   
 

Revenues:

                   

Rental revenues

  $ 130,744   $ 152,626     16.7  

Equipment sales

    13,429     10,794     (19.6 )

Parts and service

    6,194     6,675     7.8  
                 

Total revenues

    150,367     170,095     13.1  
                 

Cost of revenues:

                   

Cost of equipment sold

    7,888     6,119     (22.4 )

Depreciation of rental equipment

    34,667     36,489     5.3  

Cost of rental revenues

    34,819     37,624     8.1  

Cost of parts and service

    3,716     4,094     10.2  
                 

Total cost of revenues

    81,090     84,326