NON-CONTROLLING INTEREST

Following the IPO, Neff Corporation became Neff Holdings sole managing member. As a result, Neff Corporation operates and controls all of the business and affairs of Neff Holdings while owning a 41.2% minority economic interest in Neff Holdings. Therefore, on November 26, 2014, Neff Corporation began to consolidate the financial results of Neff Holdings and its subsidiaries and to record a non-controlling interest for the remaining 58.8% economic interest in Neff Holdings held by Wayzata. On a stand alone basis, Neff Corporation's only sources of cash flow from operations are distributions from Neff Holdings. Net income attributable to the non-controlling interest on the unaudited condensed consolidated statements of operations represents the portion of earnings attributable to the economic interest in Neff Holdings held by the non-controlling unitholders. The non-controlling interest on the unaudited condensed consolidated balance sheets represents the carryover basis of Wayzata's capital account in Neff Holdings. Non-controlling interest

NOTE 3—NON-CONTROLLING INTEREST (Continued)

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



	Non-controlling ownership of Common Units in Neff Holdings		Neff Corporation ownership of Common Units in Neff Holdings		Total
As of June 30, 2015 and December 31, 2014	14,951,625		10,476,190		25,427,815
	58.8	%	41.2	%	100.0	%

The following table summarizes the activity in non-controlling interest from December 31, 2014 to June 30, 2015 (in thousands):



Balance of non-controlling interest as of December 31, 2014	$	(95,770	)
Net income attributable to non-controlling interest	9,674
Balance of non-controlling interest as of June 30, 2015	$	(86,096	)

Distributions for Taxes

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

Payable Pursuant to the Tax Receivable Agreement

As of June 30, 2015, the Company recorded a liability of $28.7 million, representing the estimated payments due to Wayzata and certain members of management of Neff Holdings and certain non-executive members of its board of managers (collectively, our "Prior LLC Owners") under the Tax Receivable Agreement with our Prior LLC Owners as a result of the special allocation of depreciation and amortization deductions in excess of our pro rata share of such items. The liability as of June 30, 2015 decreased by $2.9 million from December 31, 2014, due to the Tax Receivable Agreement Amendment (see below) and changes in estimated future payments as a result of the tax benefit Neff Corporation will obtain as a result of the special allocation of gain, to Wayzata, resulting from the sale of equipment that existed at the date of the IPO, in accordance with Section 704(c) of the Internal Revenue Code. The Company expects these changes from the special allocation of gain will likely occur quarterly.

On June 2, 2015, the Company, Wayzata and the Prior LLC Owners entered into an amendment to the Tax Receivable Agreement (the "Tax Receivable Agreement Amendment"), dated as of May 27, 2015. The Tax Receivable Agreement Amendment amended the Tax Receivable Agreement to eliminate any benefit to the Wayzata and the Prior LLC Owners relating to tax adjustments arising from state, local or foreign taxes in order to relieve the substantial burden on the Company to calculate such benefit.

No amounts were paid pursuant to the terms of the Tax Receivable Agreement during the three and six months ended June 30, 2015.

Payments are anticipated to be made under the Tax Receivable Agreement, when Neff Corporation utilizes a benefit, with the first potential payment becoming due on the original due date of Neff Corporation's federal income tax return. The payments are to be made in accordance with the terms of the Tax Receivable Agreement. The timing of the payments is subject to certain contingencies including Neff Corporation having sufficient taxable income to utilize the tax benefits defined in the Tax Receivable Agreement.

NOTE 3—NON-CONTROLLING INTEREST (Continued)

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