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

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

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

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

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

As of ~~October 21, 2020,~~July 27, 2021, there were ~~36,094,654~~36,092,603 shares of H&E Equipment Services, Inc. common stock, $0.01 par value, outstanding.

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

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

Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the Securities and Exchange Commission (“SEC”), we are under no obligation to publicly update or revise any forward-looking statements after we file this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise. Investors, potential investors and other readers are urged to consider the above mentioned factors carefully in evaluating the forward‑looking statements and are cautioned not to place undue reliance on such forward‑looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results or performance.

For a more detailed discussion of some of the foregoing risks and uncertainties, see Item 1A — “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2019 and Item 1A — “Risk Factors” in this Quarterly Report on Form 10-Q for the quarterly period ended September 30,~~ 2020, as well as other reports and registration statements filed by us with the SEC. These factors should not be construed as exhaustive and should be read with other cautionary statements in this Quarterly Report on Form 10-Q and our other public filings. All of our annual, quarterly and current reports, and any amendments thereto, filed with or furnished to the SEC are available on our Internet website under the Investor Relations link. For more information about us and the announcements we make from time to time, visit our Internet website at www.he-equipment.com.

							Balances at
	Balances at						June 30,			December 31,
	September 30, 2020			December 31, 2019			2021			2020
	(Unaudited)						(Unaudited)
ASSETS
Cash	$	11,997		$	14,247		$	202,487		$	310,882
Receivables, net of allowance for doubtful accounts of $4,963 and $5,236, respectively		167,595			192,204
Inventories, net of reserves for obsolescence of $318 and $331, respectively		72,871			85,478
Receivables, net of allowance for doubtful accounts of $4,721 and $4,741, respectively								170,516			178,858
Inventories, net of reserves for obsolescence of $270 and $350, respectively								128,422			72,488
Prepaid expenses and other assets		11,597			10,262			17,381			10,379
Rental equipment, net of accumulated depreciation of $705,944 and $676,376, respectively		1,078,403			1,217,673
Property and equipment, net of accumulated depreciation and amortization of $160,637 and $156,782, respectively		122,173			130,564
Operating lease right-of-use assets, net of accumulated amortization of $20,497 and $11,197, respectively		165,479			156,570
Finance lease right-of-use assets, net of accumulated amortization of $2,173 and $2,051, respectively		244			365
Deferred financing costs, net of accumulated amortization of $14,944 and $14,419, respectively		2,332			2,857
Intangible assets, net of accumulated amortization of $9,747 and $6,952, respectively		29,953			32,948
Rental equipment, net of accumulated depreciation of $708,199 and $701,588, respectively								1,112,959			1,028,745
Property and equipment, net of accumulated depreciation and amortization of $170,781 and $158,803, respectively								118,709			116,740
Operating lease right-of-use assets, net of accumulated amortization of $31,346 and $23,920, respectively								167,661			162,220
Finance lease right-of-use assets, net of accumulated amortization of $2,295 and $2,213, respectively								122			203
Deferred financing costs, net of accumulated amortization of $15,469 and $15,119, respectively								1,807			2,157
Intangible assets, net of accumulated amortization of $12,724 and $10,939, respectively								26,976			28,961
Goodwill		68,851			131,442			68,851			68,851
Total assets	$	1,731,495		$	1,974,610		$	2,015,891		$	1,980,484
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Amounts due on senior secured credit facility	$	17,986		$	216,879
Accounts payable		69,805			58,853			113,099			89,295
Manufacturer flooring plans payable		11,646			25,201			7,326			9,615
Accrued expenses payable and other liabilities		73,764			78,382			66,916			67,290
Dividends payable		135			171			88			155
Senior unsecured notes, net of unaccreted discount of $2,334 and $2,691 and deferred financing costs of $1,511 and $1,743, respectively		946,155			945,566
Senior unsecured notes, net of unaccreted discount of $8,737 and $9,323 and deferred financing costs of $2,018 and $2,017, respectively								1,239,245			1,238,660
Operating lease right-of-use liabilities		168,952			159,265			171,699			165,921
Finance lease right-of-use liabilities		368			550			177			305
Deferred income taxes		178,752			180,126			176,879			171,010
Deferred compensation payable		2,173			2,098
Total liabilities		1,469,736			1,667,091			1,775,429			1,742,251
Commitments and Contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value, 25,000,000 shares authorized; 0 shares issued		—			—			—			—
Common stock, $0.01 par value, 175,000,000 shares authorized; 40,245,706 and 39,921,838 shares issued at September 30, 2020 and December 31, 2019, respectively, and 36,096,814 and 35,848,089 shares outstanding at September 30, 2020 and December 31, 2019, respectively		401			398
Common stock, $0.01 par value, 175,000,000 shares authorized; 40,278,843 and 40,242,711 shares issued at June 30, 2021 and December 31, 2020, respectively, and 36,116,063 and 36,092,555 shares outstanding at June 30, 2021 and December 31, 2020, respectively								402			401
Additional paid-in capital		239,139			235,844			242,749			240,206
Treasury stock at cost, 4,148,892 and 4,073,749 shares of common stock held at September 30, 2020 and December 31, 2019, respectively		(66,159	)		(64,783	)
Treasury stock at cost, 4,162,780 and 4,150,156 shares of common stock held at June 30, 2021 and December 31, 2020, respectively								(66,623	)		(66,188	)
Retained earnings		88,378			136,060			63,934			63,814
Total stockholders’ equity		261,759			307,519			240,462			238,233
Total liabilities and stockholders’ equity	$	1,731,495		$	1,974,610		$	2,015,891		$	1,980,484

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

													Three Months Ended						Six Months Ended
	Three Months Ended September 30,						Nine Months Ended September 30,						June 30,						June 30,
	2020			2019			2020			2019			2021			2020			2021			2020
Revenues:
Equipment rentals	$	165,849		$	204,132		$	496,162		$	572,563		$	179,037		$	155,794		$	335,261		$	330,313
New equipment sales		37,248			65,010			112,068			177,709			49,919			43,947			87,664			74,820
Used equipment sales		40,000			31,180			105,231			96,942			41,358			34,013			83,124			65,231
Parts sales		27,853			31,499			83,842			93,798			27,424			26,220			53,036			55,989
Services revenues		15,637			18,105			48,116			50,398			14,977			15,657			29,487			32,479
Other		2,673			3,071			8,099			8,822			3,048			2,705			5,636			5,426
Total revenues		289,260			352,997			853,518			1,000,232			315,763			278,336			594,208			564,258
Cost of revenues:
Rental depreciation		58,083			63,065			177,225			181,647			58,337			59,156			113,686			119,142
Rental expense		25,628			27,889			74,461			79,676			28,081			23,264			53,769			48,833
Rental other		16,816			18,620			47,847			52,742			18,731			14,226			35,454			31,031
		100,527			109,574			299,533			314,065			105,149			96,646			202,909			199,006
New equipment sales		33,124			57,475			99,809			156,638			44,176			39,259			77,618			66,685
Used equipment sales		27,872			21,409			71,592			63,742			27,008			23,282			55,373			43,720
Parts sales		20,925			23,171			62,180			68,750			20,356			19,352			39,103			41,255
Services revenues		5,198			5,898			15,911			16,261			4,789			5,173			9,486			10,713
Other		2,547			3,342			7,873			10,167			2,920			2,554			5,351			5,326
Total cost of revenues		190,193			220,869			556,898			629,623			204,398			186,266			389,840			366,705
Gross profit		99,067			132,128			296,620			370,609			111,365			92,070			204,368			197,553
Selling, general and administrative expenses		70,040			77,296			217,525			233,783			77,006			67,861			150,959			147,485
Impairment of goodwill		—			—			61,994			—			—			—			—			61,994
Merger costs		150			47			308			314
Merger and other														680			118			1,417			158
Gain on sales of property and equipment, net		2,102			718			9,260			2,339			680			2,894			834			7,158
Income from operations		30,979			55,503			26,053			138,851
Income (loss) from operations														34,359			26,985			52,826			(4,926	)
Other income (expense):
Interest expense		(14,887	)		(17,331	)		(46,489	)		(51,453	)		(13,425	)		(15,572	)		(26,868	)		(31,602	)
Other, net		990			588			2,262			1,609			808			642			1,475			1,272
Total other expense, net		(13,897	)		(16,743	)		(44,227	)		(49,844	)		(12,617	)		(14,930	)		(25,393	)		(30,330	)
Income (loss) before provision (benefit) for income taxes		17,082			38,760			(18,174	)		89,007			21,742			12,055			27,433			(35,256	)
Provision (benefit) for income taxes		6,979			10,329			(124	)		23,719			5,976			3,240			7,516			(7,103	)
Net income (loss)	$	10,103		$	28,431		$	(18,050	)	$	65,288		$	15,766		$	8,815		$	19,917		$	(28,153	)
Net income (loss) per common share:
Basic	$	0.28		$	0.79		$	(0.50	)	$	1.82		$	0.44		$	0.24		$	0.55		$	(0.78	)
Diluted	$	0.28		$	0.79		$	(0.50	)	$	1.81		$	0.43		$	0.24		$	0.55		$	(0.78	)
Weighted average common shares outstanding:
Basic		36,110			35,893			36,035			35,835			36,216			36,031			36,200			35,998
Diluted		36,249			36,046			36,035			36,012			36,437			36,107			36,412			35,998
Dividends declared per common share outstanding	$	0.275		$	0.275		$	0.825		$	0.825		$	0.275		$	0.275		$	0.55		$	0.55

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

							Six Months Ended
	Nine Months Ended September 30,						June 30,
	2020			2019			2021			2020
Cash flows from operating activities:
Net income (loss)	$	(18,050	)	$	65,288		$	19,917		$	(28,153	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization of property and equipment		22,288			20,841			14,001			14,769
Depreciation of rental equipment		177,225			181,647			113,686			119,142
Amortization of finance lease right-of-use assets		121			122			81			81
Amortization of intangible assets		2,996			3,091			1,985			2,002
Amortization of deferred financing costs		755			757			486			504
Accretion of note discount, net of premium amortization		358			357			586			238
Non-cash operating lease expense		10,619			8,021			7,426			5,760
Impairment of goodwill		61,994			—			—			61,994
Provision for losses on accounts receivable		3,340			4,059			787			2,950
Provision for inventory obsolescence		95			152			38			12
Change in deferred income taxes		(1,374	)		22,127			5,869			(7,211	)
Stock-based compensation expense		3,295			3,060			2,543			2,656
Gain from sales of property and equipment, net		(9,260	)		(2,339	)		(834	)		(7,158	)
Gain from sales of rental equipment, net		(33,102	)		(32,780	)		(27,070	)		(21,224	)
Changes in operating assets and liabilities, net of acquisitions:
Receivables		21,269			(2,045	)		7,555			42,764
Inventories		(7,712	)		(39,631	)		(73,651	)		(12,397	)
Prepaid expenses and other assets		(1,355	)		(3,098	)		(7,137	)		(8,540	)
Accounts payable		11,549			(16,871	)		23,804			14,077
Manufacturer flooring plans payable		(13,555	)		2,259			(2,289	)		(8,524	)
Accrued expenses payable and other liabilities		(14,478	)		(7,492	)		(7,324	)		(13,326	)
Deferred compensation payable		75			82			—			50
Net cash provided by operating activities		217,093			207,607			80,459			160,466
Cash flows from investing activities:
Acquisition of businesses, net of cash acquired		—			(106,746	)
Purchases of property and equipment		(17,283	)		(31,451	)		(16,227	)		(13,511	)
Purchases of rental equipment		(81,426	)		(269,150	)		(228,453	)		(55,448	)
Proceeds from sales of property and equipment		12,688			3,085			1,088			10,390
Proceeds from sales of rental equipment		96,797			89,105			75,302			59,756
Net cash provided by (used in) investing activities		10,776			(315,157	)		(168,290	)		1,187
Cash flows from financing activities:
Borrowings on senior secured credit facility		729,810			1,174,120			620,584			496,011
Payments on senior secured credit facility		(928,703	)		(1,040,750	)		(620,584	)		(645,329	)
Dividends paid		(29,668	)		(29,530	)		(19,865	)		(19,741	)
Purchases of treasury stock		(1,376	)		(1,640	)		(435	)		(470	)
Payments of deferred financing costs		—			(559	)		(136	)		—
Payments of finance lease obligations		(182	)		(172	)		(128	)		(120	)
Net cash provided by (used in) financing activities		(230,119	)		101,469
Net cash used in financing activities								(20,564	)		(169,649	)
Net decrease in cash		(2,250	)		(6,081	)		(108,395	)		(7,996	)
Cash, beginning of period		14,247			16,677			310,882			14,247
Cash, end of period	$	11,997		$	10,596		$	202,487		$	6,251

							Six Months Ended
	Nine Months Ended September 30,						June 30,
	2020			2019			2021		2020
Supplemental schedule of noncash investing and financing activities:
Accrued acquisition purchase price consideration	$	—		$	3,432
Noncash asset purchases:
Assets transferred from new and used inventory to rental fleet	$	20,224		$	38,240		$	17,679	$	18,410
Purchases of property and equipment included in accrued expenses payable and other liabilities	$	(42	)	$	(27	)	$	3	$	218
Operating lease right-of-use assets and lease liabilities recorded upon adoption of ASC 842	$	—		$	162,814
Finance lease right-of-use assets and lease liabilities recorded upon adoption of ASC 842	$	—		$	782
Operating lease assets obtained in exchange for new operating lease liabilities	$	18,208		$	9,074		$	12,868	$	15,077
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	59,304		$	63,312		$	25,946	$	31,402
Income taxes paid (refunds received), net	$	(354	)	$	2,658		$	1,545	$	(1,540	)

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

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

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such regulations. In the opinion of management, all adjustments (consisting of all normal and recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and ~~nine~~six month periods ended ~~September~~June 30, ~~2020~~2021 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2020,~~2021, and therefore, the results and trends in these interim condensed consolidated financial statements may not be the same for the entire year. These interim condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and related notes in our Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, from which the consolidated balance sheet amounts as of December 31, ~~2019~~2020 were derived.

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

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

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

The novel coronavirus (“COVID-19”) was first identified in late 2019. COVID-19 spread rapidly throughout the world and, in March 2020, the World Health Organization characterized COVID-19 as a pandemic and recommended containment and mitigation measures worldwide. COVID-19 is a pandemic of respiratory disease spreading from person-to-person that poses a serious public health risk. The subsequent spread of COVID-19 during 2020 and the resulting economic contraction ~~has~~ resulted in increased business uncertainty in our industry. ~~Even as some states have begun~~As the impact of COVID-19 became more widespread, our equipment rental utilization and sales volumes began to ~~partially or completely lift stay-at-home restriction orders~~decline from February 2020 levels through mid-April 2020, where we began to ~~reopen their economies, several areas~~see utilization and sales levels stabilize and improve for the remainder of ~~the country are experiencing increases~~2020. We continue to see overall improvements with utilization levels beginning in ~~infection rates relative~~March 2021 returning to ~~the number of positive COVID-19 cases, thereby limiting the pace~~approximate pre-COVID utilization levels. The timing and extent of any ~~economic recovery that may have otherwise occurred, and certain jurisdictions have begun to re-implement containment restrictions.~~

We began to experience a decline in revenues in March 2020, when rental and sales volumes declined in response to shelter-in-place orders and other end-user market restrictions. Such declines continued into mid-April, when we began to see improvement in rental and sales volumes in response to an easing of the various market restrictions. These sequential improvements continued through the remainder of the second quarter, throughout the third quarter, and into the early fourth quarter. Even with these recent sequential

~~improvements, our total revenues for the nine month period ended September 30, 2020 were~~ ~~14.7% lower than those of the same nine month period last year. The extent of any further recovery, or~~ subsequent contraction in our ~~business~~equipment rental utilization and sales volumes ~~from~~due to COVID-19 will depend on a number of factors, including a widespread resurgence in COVID-19 infections, the rate of vaccinations, the impact ~~of the COVID-19 pandemic, and the resulting impact~~ to~~our financial results and liquidity, will depend largely on future developments, including the duration of the spread of the COVID-19 outbreak within the U.S. and globally, the impact on~~ capital and financial markets and the related impact on our customers.

We ~~have proactively taken,~~remain focused on the safety and ~~will continue to take, the necessary actions to right-size~~well-being of our ~~business in this environment to strengthen cash flow, reduce operating costs,~~employees, customers and ~~further strengthen our balance sheet and liquidity position. These actions include headcount reductions, modified work~~ ~~schedules reducing hours where needed, furloughs in selected branch~~ ~~locations,~~communities as ~~well as appropriate adjustments~~we maintain a high-level of service to our ~~capital and discretionary spending plans.~~ customers.

We describe our significant accounting policies in note 2 of the notes to consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. During the three and ~~nine~~six month periods ended ~~September~~June 30, ~~2020,~~2021, there were no significant changes to those accounting policies.

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

We recognize revenue in accordance with two different accounting standards: 1) Topic 606 and 2) Topic 842.

Under Topic 606, Revenue from Contracts with Customers, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

Under Topic 606, revenue from contracts with customers is measured based on the consideration specified in the contract with the customer, and excludes any sales incentives and amounts collected on behalf of third parties. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer. Our contracts with customers generally do not include multiple performance obligations. We recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer. The amount of revenue recognized reflects the consideration we expect to be entitled to in exchange for such products or services.

Under Topic 842, Leases, we account for equipment rental contracts as operating leases. We recognize revenue from equipment rentals in the period earned, regardless of the timing of billing to customers. A rental contract includes rates for daily, weekly or monthly use, and rental revenues are earned on a daily basis as rental contracts remain outstanding. Because the rental contracts can extend across multiple reporting periods, we record unbilled rental revenues and deferred rental revenues at the end of reporting periods so rental revenues earned is appropriately stated for the periods presented.

For additional information related to our revenue recognition policies pursuant to Topic 606 and Topic 842, please see Significant Accounting Policies in note 2 to our Form 10-K for the year ended December 31, ~~2019.~~2020. In the table below, revenues as presented in our condensed consolidated statements of operations for the three and ~~nine~~six month periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 are summarized by type and by the applicable accounting standard.

	Three Month Period Ended September 30,												Three Months Ended June 30,
	2020						2019						2021						2020
	Topic 842		Topic 606		Total		Topic 842		Topic 606		Total		Topic 842		Topic 606		Total		Topic 842		Topic 606		Total
Revenues:
Rental revenues
Owned equipment rentals	$	142,708	$	168	$	142,876	$	177,287	$	305	$	177,592	$	150,659	$	343	$	151,002	$	135,503	$	204	$	135,707
Re-rent revenue		6,546		—		6,546		7,205		—		7,205		9,297		—		9,297		5,069		—		5,069
Ancillary and other rental revenues:
Delivery and pick-up		—		9,161		9,161		—		10,977		10,977		—		10,087		10,087		—		8,603		8,603
Other		7,266		—		7,266		8,358		—		8,358		8,651		—		8,651		6,415		—		6,415
Total ancillary rental revenues		7,266		9,161		16,427		8,358		10,977		19,335		8,651		10,087		18,738		6,415		8,603		15,018
Total equipment rental revenues		156,520		9,329		165,849		192,850		11,282		204,132		168,607		10,430		179,037		146,987		8,807		155,794
New equipment sales		—		37,248		37,248		—		65,010		65,010		—		49,919		49,919		—		43,947		43,947
Used equipment sales		—		40,000		40,000		—		31,180		31,180		—		41,358		41,358		—		34,013		34,013
Parts sales		—		27,853		27,853		—		31,499		31,499		—		27,424		27,424		—		26,220		26,220
Service revenues		—		15,637		15,637		—		18,105		18,105		—		14,977		14,977		—		15,657		15,657
Other		—		2,673		2,673		—		3,071		3,071		—		3,048		3,048		—		2,705		2,705
Total revenues	$	156,520	$	132,740	$	289,260	$	192,850	$	160,147	$	352,997	$	168,607	$	147,156	$	315,763	$	146,987	$	131,349	$	278,336

	Nine Month Period Ended September 30,												Six Months Ended June 30,
	2020						2019						2021						2020
	Topic 842		Topic 606		Total		Topic 842		Topic 606		Total		Topic 842		Topic 606		Total		Topic 842		Topic 606		Total
Revenues:
Rental revenues
Owned equipment rentals	$	431,881	$	630	$	432,511	$	497,709	$	824	$	498,533	$	282,719	$	530	$	283,249	$	289,173	$	462	$	289,635
Re-rent revenue		16,306		—		16,306		19,761		—		19,761		16,991		—		16,991		9,760		—		9,760
Ancillary and other rental revenues:
Delivery and pick-up		—		26,890		26,890		—		30,272		30,272		—		18,483		18,483		—		17,729		17,729
Other		20,455		—		20,455		23,997		—		23,997		16,538		—		16,538		13,189		—		13,189
Total ancillary rental revenues		20,455		26,890		47,345		23,997		30,272		54,269		16,538		18,483		35,021		13,189		17,729		30,918
Total equipment rental revenues		468,642		27,520		496,162		541,467		31,096		572,563		316,248		19,013		335,261		312,122		18,191		330,313
New equipment sales		—		112,068		112,068		—		177,709		177,709		—		87,664		87,664		—		74,820		74,820
Used equipment sales		—		105,231		105,231		—		96,942		96,942		—		83,124		83,124		—		65,231		65,231
Parts sales		—		83,842		83,842		—		93,798		93,798		—		53,036		53,036		—		55,989		55,989
Service revenues		—		48,116		48,116		—		50,398		50,398		—		29,487		29,487		—		32,479		32,479
Other		—		8,099		8,099		—		8,822		8,822		—		5,636		5,636		—		5,426		5,426
Total revenues	$	468,642	$	384,876	$	853,518	$	541,467	$	458,765	$	1,000,232	$	316,248	$	277,960	$	594,208	$	312,122	$	252,136	$	564,258

Revenues by reporting segment are presented in note 1210 of our condensed consolidated financial statements, using the revenue captions reflected in our consolidated statements of operations. We believe that the disaggregation of our revenues from contracts ~~with~~to customers as reflected above, coupled with further discussion below and the reporting segments in note ~~12,~~10, depict how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by economic factors. For further information related to our accounting for revenues pursuant to Topic 606 and Topic 842, see Significant Accounting Policies in note 2 to our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

We manage credit risk associated with our accounts receivables at the customer level. Because the same customers typically generate the revenues that are accounted for under both Topic 606 and Topic 842, the discussions below on credit risk and our allowance for doubtful accounts address our total revenues from Topic 606 and Topic 842.

We believe concentration of credit risk with respect to our receivables is limited because our customer base is comprised of a large number of geographically diverse customers. NaN single customer accounted for more than 10% of our revenues on an overall or segment basis for any of the periods presented in this Quarterly Report on Form 10-Q. We manage credit risk through credit approvals, credit limits and other monitoring procedures.

Pursuant to Topic 842 and Topic 326 for rental and non-rental receivables, respectively, we maintain an allowance for doubtful accounts that reflects our estimate of our expected credit losses. Our allowance is estimated using a loss rate model based on

delinquency. The estimated loss rate is based on our historical experience with specific customers, our understanding of our current

economic circumstances, reasonable and supportable forecasts, and our own judgment as to the likelihood of ultimate payment based upon available data. Our largest exposure to doubtful accounts is in our rental operations. We perform credit evaluations of customers and establish credit limits based on reviews of our customers’ current credit information and payment histories. We believe our credit risk is somewhat mitigated by our geographically diverse customer base and our credit evaluation procedures. The actual rate of future credit losses, however, may not be similar to past experience. Our estimate of doubtful accounts could change based on changing circumstances, including changes in the economy or in the particular circumstances of individual customers. Accordingly, we may be required to increase or decrease our allowance for doubtful ~~accounts~~.accounts.

We do not have material contract assets, impairment losses associated therewith, or material contract liabilities associated with contracts with customers. Our contracts with customers do not generally result in material amounts billed to customers in excess of recognizable revenue. We did not recognize material revenues during the three and ~~nine~~six month periods ended ~~September~~June 30, 2021 or 2020 ~~or 2019~~ that ~~were~~was included in the contract liability balance as of the beginning of such periods.

Goodwill is recorded as the excess of the consideration transferred plus the fair value of any non-controlling interest in the acquiree at the acquisition date over the fair values of the identifiable net assets acquired.

We evaluate goodwill for impairment at least annually, or more frequently if triggering events occur or other impairment indicators arise which might impair recoverability. Impairment of goodwill is evaluated at the reporting unit level. A reporting unit is defined as an operating segment (i.e. before aggregation or combination), or one level below an operating segment (i.e., a component). A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of that component. We have identified two components within our Rental operating segment (Equipment Rental Component 1 and Equipment Rental Component 2) and have determined that each of our other operating segments (New Equipment Sales, Used Equipment Sales, Parts Sales and Service Revenues) represent a reporting unit, resulting in 6 total reporting units. As further described in our Annual Report on Form 10-K for the year ended December 31, 2019, we recorded in the fourth quarter of 2019 impairment charges of $10.7 million and $1.5 million related to our new equipment sales goodwill reporting unit and our service revenues goodwill reporting unit, respectively. As a result, and as indicated in the goodwill reporting unit carrying values rollforward below, these two reporting units had 0 carrying value at December 31, 2019. As further described below, as of March 31, 2020, we recorded an impairment charge of $62.0 million related to our Equipment Rental Component 2 reporting unit. As a result, and as indicated in the goodwill reporting unit carrying values rollforward below, this reporting unit has no remaining carrying value.

The goodwill impairment test consists of one step, comparing the fair value of a reporting unit with its carrying amount. An entity should recognize a goodwill impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, limited to the total amount of goodwill allocated to the reporting unit.

Based on our evaluation of the impact to our business in the first quarter of 2020 from the COVID-19 pandemic, we identified triggering events requiring an interim impairment test as of March 31, ~~2020. These triggering events included~~2020, resulting in a deterioration in macroeconomic conditions, declines in business volume in our industry, a decline in our actual revenue and earnings compared with our planned revenue and earnings, and a sustained decrease in our stock price.

~~For the interim~~$62.0 million impairment ~~test as of March 31, 2020, we estimated the fair value of our reporting units by equally weighting results from the income approach and the market approach and we compared those fair values~~charge to ~~the carrying values of our four reporting units with carrying values, and determined that~~ our Equipment Rental Component 2 reporting ~~unit had a fair value less than its carrying value, resulting~~unit. For additional information related to our goodwill impairment charge in ~~a $62.0 million impairment charge. The impairment was largely due~~the first quarter of 2020, please see footnote 2 to ~~Equipment Rental Component 2’s forecasted declines~~the Company’s consolidated financial statements included as Item 8 in ~~2020 rental revenues, which was driven by~~ the decrease in equipment rental demand that began in March 2020 as COVID-19’s impact became more widespread across our geographic footprint, combined with our revenue growth rate and cash flow assumptionsCompany’s Annual Report on Form 10-K for the remaining forecast period under the income approach, and the decline in the fair value of Equipment Rental Component 2 based on the market approach from declining business enterprise values of comparable companies in our industry, resulting in a decrease in revenue and EBITDA multiples of those companies. We determined that our Equipment Rental Component 1, Used Equipment Sales and Parts Sales reporting units were not impaired as of the Marchyear ended December 31, ~~2020 interim impairment testing date as their respective fair values exceeded their respective carrying values by approximately 34%, 90%, and 40%, respectively.~~2020.

Significant assumptions inherent in the valuation methodologies for goodwill are employed and include, prospective financial information, growth rates, terminal value, discount rates, and comparable multiples from publicly traded companies in our industry. The inputs and variables used in determining the fair value of a reporting unit require management to make certain assumptions regarding the impact of operating and macroeconomic changes, as well as estimates of future cash flows. Our estimates regarding future cash flows are based on historical experience and projections of future operating performance, including revenues, margins and operating expenses. We also make certain forecasts about future economic conditions, such as the timing and duration of economic expansion or contraction cycles in our business, interest rates, and other market data. Many of the factors used in assessing fair value

are outside the control of management, and these assumptions and estimates may change in future periods. An adverse change in any of the assumptions used in our impairment testing (e.g. projected revenue and profit, discount rates, industry price multiples, etc.), including the uncertainty related to the depth and duration of COVID-19’s impact on our forecasted cash flows, could affect our fair value measurements and result in future impairments. If we are unable to achieve the financial forecasts used in our impairment analysis, we may also be required to record an impairment charge to our goodwill.

The impairment charge is a non-cash item and does not affect our cash flows, liquidity or borrowing capacity under the senior credit facility (the “Credit Facility”), and the charge is excluded from our financial results in evaluating our financial covenant under the Credit Facility.

~~The changes in the carrying amount of goodwill for our reporting units for the periods ended September 30, 2020 and December 31, 2019 were as follows (amounts in thousands):~~

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides optional guidance for a limited time to ease the potential burden in accounting for or recognizing the effects of reference rate reform, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”) on financial reporting. The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments are elective and are effective upon issuance for all entities through December 31, 2022. The amendments of this ASU should be applied on a prospective basis. We intend to continue to monitor the developments with respect to the planned phase-out out of LIBOR and work with our lenders to seek to ensure any transition away from LIBOR will have minimal impact on our financial condition. However, we can provide no assurances regarding the impact of the discontinuation of LIBOR as there can be no assurances as to whether such replacement or alternative base rate will be more or less favorable than LIBOR. Our exposure related to the expected cessation of LIBOR is limited to the interest expense we incur on balances outstanding under our Senior Secured Credit Facility (the “Credit Facility”). The potential impact from the cessation of LIBOR as a reference rate, as well as the applicability of ASU 2020-04, is not currently estimable.

In December 2019, the FASB issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). The guidance removes the following exceptions: 1) exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items, 2) exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment, 3) exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary and 4) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. Additionally, the guidance simplifies the accounting for income taxes by: 1) requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, 2) requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction, 3) specifying that an entity is not required to allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements (although the entity may elect to do so (on an entity-by-entity basis) for a legal entity that is both not subject to tax and disregarded by the taxing authority), 4) requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date and 5) making minor improvements for income tax accounting related to employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method. The Company adopted ASU 2019-12 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2020, and generally requires prospective adoption. While we continue to evaluate the new guidance of ASU 2019-12, we currently do not expect the guidance to have a material impact on ~~our consolidated financial statements.~~

are elective and are effective upon issuance for all entities through December 31, 2022. The amendments of this ASU should be applied on a prospective basis. Our exposure related to the expected cessation of LIBOR is limited to the interest expense we incur on our Credit Facility. The potential impact from the cessation of LIBOR as a reference rate, as well as the applicability of ASU 2020-04, is not currently estimable.

In March 2020, the Securities and Exchange Commission (“SEC”) adopted final rules that amend the financial disclosure requirements for subsidiary issuers and guarantors of registered debt securities in Rule 3-10 of Regulation S-X. The SEC also amended the disclosure requirements for affiliates whose securities are pledged as collateral for registered securities in Rule 3-16 of Regulation S-X. The disclosure requirements, as amended, are now relocated to newly created Rules 13-01 and 13-02 in Regulation S-X, while the amended eligibility requirements remain in Rule 3-10. The SEC amended its financial disclosure requirements for companies that conduct registered debt offerings involving subsidiaries as either issuers or guarantors and affiliates whose securities are pledged as collateral. The SEC also narrowed the circumstances that require separate financial statements of subsidiary issuers and guarantors and streamlined the alternative disclosures required in lieu of those statements. Further, the SEC replaced the requirement for separate financial statements of affiliates whose securities are pledged as collateral for registered securities with requirements similar to those adopted for subsidiary issuers and guarantors. Previously, with limited exceptions, a parent entity was required to provide detailed disclosures with regard to guarantors of registered debt offerings within the footnotes to the consolidated financial statements. Under the new regulations, disclosure exceptions have been expanded and required disclosures may be provided within Management’s Discussion and Analysis of Financial Condition and Results of Operations rather than in the notes to the consolidated financial statements. Further, summarized guarantor balance sheets and income statements are permitted, with the requirement to provide guarantor cash flow statements eliminated. Summarized guarantor financial statements only need be disclosed for the current fiscal year rather than all years presented in the financial statements as was previously required. The rule is effective for periods ending after January 4, 2021, but earlier compliance is permitted. The Company is currently evaluating the impact of the final rules.

On January 1, ~~2020, we adopted Accounting Standards Codification Topic 326,~~ ~~Credit Losses~~ ~~(Topic 326). This standard establishes an impairment model (known as~~2021 and the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, we recognize an allowance for our estimate of expected credit losses over the entire contractual term of our receivables from the date of initial recognition of the financial instrument. Measurement of expected credit losses are based on relevant forecasts that affect collectability. Topic 326 applies to trade receivables from certain revenue transactions including receivables from equipment sales, parts and service sales. Under Topic 606 (Revenue from Contracts with Customers), revenue is recognized when, among other criteria, it is probable that the entity will collect the consideration to which it is entitled for goods or services transferred to a customer. At the point that these trade receivables are recorded, they become subject to the CECL model and estimates of expected credit losses over their contractual life are recorded at inception based on historical information, current conditions, and reasonable and supportable forecasts. The adoption ~~of Topic 326~~ did not have a material impact on our condensed consolidated financial statements and related disclosures or our existing internal controls because our non-rental accounts receivable are of short duration and there is not a material difference between incurred losses and expected losses.presented herein.

On January 1, 2020, we adopted ASU No. 2018-13, Fair Value Measurement - Disclosure Framework. ASU 2018-13 modifies the disclosure requirements for fair value measurements. Entities are no longer required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies are required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The adoption of ASU 2018-13 did not have a material impact on our consolidated financial statements and footnotes.

Effective February 1, 2019, we completed the acquisition of We-Rent-It (“WRI”), an equipment rental company with 6 branches located in central Texas. The acquisition expands our presence in the surrounding markets.

The aggregate consideration paid to the owners of WRI was approximately $107.9 million. The acquisition and related fees and expenses were funded from borrowings under our Credit Facility. The following table summarizes the fair value of the assets acquired and liabilities assumed as of the acquisition date. The final closing statement was settled during the first quarter of 2020, resulting in a $0.6 million decrease in the total consideration paid and is reflected in the amounts presented in the table below.

The level of goodwill that resulted from the WRI acquisition is primarily reflective of WRI’s going-concern value, the value of WRI’s assembled workforce, new customer relationships expected to arise from the acquisition and expected synergies from combining operations. We currently expect the goodwill recognized to be 100% deductible for income tax purposes.

Total WRI acquisition costs were $0.4 million. Since our acquisition of WRI on February 1, 2019, significant amounts of equipment rental fleet have been moved between H&E locations and the acquired WRI locations, as well as branch consolidations among the WRI branches acquired and H&E branches have occurred, and therefore, it is impractical to reasonably estimate the amount of WRI revenues and earnings since the acquisition date.

We completed the We-Rent-It acquisition on February 1, 2019. Therefore, our condensed consolidated statements of operations for the three and nine month periods ended September 30, 2020 and 2019 and included herein, includes We-Rent-It for the period of February 1, 2019 through September 30, 2020. The pro forma information below gives effect to the WRI acquisition as if it had been completed on January 1, 2018 (the WRI pro forma acquisition date).

The pro forma information below is not necessarily indicative of our results of operations had the acquisitions been completed on the above date, nor is it necessarily indicative of our future results. The pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the acquisitions, nor does it reflect additional revenue opportunities following the acquisition. The pro forma adjustments reflected in the tables below are subject to change as additional analysis is performed. Pursuant to ASC 805, ~~Business Combinations,~~ pro forma disclosures should be repeated whenever the year or interim period of the acquisition is presented. Since the WRI acquisition was completed in the first quarter of 2019, the pro forma information below gives effect to the WRI acquisition as if the acquisition occurred on January 1, 2018 (the WRI pro forma acquisition date) for the quarterly periods ended September 30, 2018. The tables below present unaudited pro forma consolidated statements of operations information for the three and nine month periods ended September 30, 2018 as if WRI was included in our consolidated results for the entire period presented.

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

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

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

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

The carrying value of financial instruments reported in the accompanying condensed consolidated balance sheets for cash, accounts receivable, accounts payable and accrued expenses payable and other liabilities approximate fair value due to the immediate or short-term nature or maturity of these financial instruments. The carrying amounts and fair values of our other financial instruments subject to fair value disclosures as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 are presented in the table below (amounts in thousands).

At ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the fair value of our senior unsecured notes due ~~2025~~2028 was based on quoted bond trading market prices for those notes. The carrying amounts and fair values of our other financial instruments subject to fair value disclosures have been calculated based upon market quotes and present value calculations based on market rates.

~~During the three and nine month periods ended September 30, 2020 and 2019, there were 0 transfers of financial assets or liabilities in or out of Level 3 of the fair value hierarchy.~~ For our Level 3 unobservable inputs, we calculate a discount rate for our manufacturing floor plans payable based on the U.S. prime rate plus the applicable margin on our Senior Secured Credit Facility. The discount rate ~~as of September 30, 2020 and December 31, 2019~~ is disclosed in the above table.

During the three and six month periods ended June 30, 2021 and 2020, there were 0 transfers of financial assets or liabilities in or out of Level 3 of the fair value hierarchy.

The following table summarizes the quarterly activity in Stockholders’ Equity for the periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively (amounts in thousands, except share data):

	Common Stock					Additional								Total			Common Stock					Additional								Total
																	Shares Issued			Amount		Paid-in Capital		Treasury Stock			Retained Earnings			Stockholders’ Equity
Balances at December 31, 2020																		40,242,711		$	401	$	240,206	$	(66,188	)	$	63,814		$	238,233
Stock-based compensation																		—			—		1,601		—			—			1,601
Cash dividends declared on common stock ($0.275 per share)																		—			—		—		—			(9,854	)		(9,854	)
Issuance of common stock, net of restricted stock forfeitures																		45,427			—		—		—			—			—
Repurchase of 12,624 shares of restricted common stock																		—			—		—		(435	)		—			(435	)
Net income																		—			—		—		—			4,151			4,151
Balances at March 31, 2021																		40,288,138			401		241,807		(66,623	)		58,111			233,696
Stock-based compensation																		—			—		942		—			—			942
Cash dividends declared on common stock ($0.275 per share)																		—			—		—		—			(9,943	)		(9,943	)
Restricted stock forfeitures																		(9,295	)		1		—		—			—			1
Net income																		—			—		—		—			15,766			15,766
Balances at June 30, 2021																		40,278,843		$	402	$	242,749	$	(66,623	)	$	63,934		$	240,462
	Shares Issued			Amount		Paid-in Capital		Treasury Stock			Retained Earnings			Stockholders’ Equity
Balances at December 31, 2019		39,921,838		$	398	$	235,844	$	(64,783	)	$	136,060		$	307,519			39,921,838		$	398	$	235,844	$	(64,783	)	$	136,060		$	307,519
Stock-based compensation		—			—		1,652		—			—			1,652			—			—		1,652		—			—			1,652
Cash dividends declared on common stock ($0.275 per share)		—			—		—		—			(9,789	)		(9,789	)		—			—		—		—			(9,789	)		(9,789	)
Issuance of common stock, net of restricted stock forfeitures		98,451			1		—		—			—			1			98,451			1		—		—			—			1
Repurchase of 26,392 shares of restricted common stock		—			—		—		(470	)		—			(470	)		—			—		—		(470	)		—			(470	)
Net loss		—			—		—		—			(36,968	)		(36,968	)		—			—		—		—			(36,968	)		(36,968	)
Balances at March 31, 2020		40,020,289			399		237,496		(65,253	)		89,303			261,945			40,020,289			399		237,496		(65,253	)		89,303			261,945
Stock-based compensation		—			—		1,004		—			—			1,004			—			—		1,004		—			—			1,004
Cash dividends declared on common stock ($0.275 per share)		—			—		—		—			(9,896	)		(9,896	)		—			—		—		—			(9,896	)		(9,896	)
Restricted stock forfeitures		(6,732	)		—		—		—			—			—			(6,732	)		—		—		—			—			—
Net income		—			—		—		—			8,815			8,815			—			—		—		—			8,815			8,815
Balances at June 30, 2020		40,013,557			399		238,500		(65,253	)		88,222			261,868			40,013,557		$	399	$	238,500	$	(65,253	)	$	88,222		$	261,868
Stock-based compensation		—			—		639		—			—			639
Cash dividends declared on common stock ($0.275 per share)		—			—		—		—			(9,947	)		(9,947	)
Issuance of common stock, net of restricted stock forfeitures		232,149			2		—		—			—			2
Repurchase of 48,751 shares of restricted common stock		—			—		—		(906	)		—			(906	)
Net income		—			—		—		—			10,103			10,103
Balances at September 30, 2020		40,245,706		$	401	$	239,139	$	(66,159	)	$	88,378		$	261,759

Balances at December 31, 2018		39,748,562		$	396	$	231,174	$	(63,099	)	$	88,332		$	256,803
Stock-based compensation		—			—		1,188		—			—			1,188
Cash dividends declared on common stock ($0.275 per share)		—			—		—		—			(9,793	)		(9,793	)
Issuance of common stock, net of restricted stock forfeitures		59,510			1		—		—			—			1
Repurchase of 14,272 shares of restricted common stock		—			—		—		(387	)		—			(387	)
Cumulative effect adjustment pursuant to the adoption of ASC 842		—			—		—		—			(56	)		(56	)
Net income		—			—		—		—			14,243			14,243
Balances at March 31, 2019		39,808,072			397		232,362		(63,486	)		92,726			261,999
Stock-based compensation		—			—		835		—			—			835
Cash dividends declared on common stock ($0.275 per share)		—			—		—		—			(9,857	)		(9,857	)
Restricted stock forfeitures		(2,666	)		—		—		—			—			—
Net income		—			—		—		—			22,614			22,614
Balances at June 30, 2019		39,805,406			397		233,197		(63,486	)		105,483			275,591
Stock-based compensation		—			—		1,037		—			—			1,037
Cash dividends declared on common stock ($0.275 per share)		—			—		—		—			(9,889	)		(9,889	)
Issuance of common stock, net of restricted stock forfeitures		119,152			1		—		—			—			1
Repurchase of 42,922 shares of restricted common stock		—			—		—		(1,253	)		—			(1,253	)
Net income		—			—		—		—			28,431			28,431
Balances at September 30, 2019		39,924,558		$	398	$	234,234	$	(64,739	)	$	124,025		$	293,918

We account for our stock-based compensation plans using the fair value recognition provisions of ASC 718, Stock Compensation. Under the provisions of ASC 718, stock-based compensation is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the requisite employee service period (generally the vesting period of the grant). Shares available for future stock-based payment awards under our 2016 Stock-Based Incentive Compensation Plan were ~~1,321,546~~1,288,409 shares as of ~~September~~June 30, ~~2020.~~2021.

The following table summarizes our non-vested stock activity for the ~~nine~~six month period ended ~~September~~June 30, ~~2020:~~2021:

	Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value
Non-vested stock at December 31, 2019		377,740		$	29.26
Non-vested stock at December 31, 2020							524,876		$	23.00
Granted		364,981		$	18.21		23,296		$	27.48
Vested		(200,655	)	$	25.74		(55,092	)	$	32.85
Forfeited		(11,212	)	$	29.86		(22,960	)	$	25.14
Non-vested stock at September 30, 2020		530,854		$	22.98
Non-vested stock at June 30, 2021							470,120		$	21.97

As of ~~September~~June 30, ~~2020,~~2021, we had unrecognized compensation expense of approximately ~~$6.1~~$4.0 million related to non-vested stock that we expect to be recognized over a weighted-average period of approximately ~~2.2~~1.7 years. The following table summarizes compensation expense related to non-vested stock, which is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations for the three and ~~nine~~six month periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 (amounts in thousands):

Income (loss) per common share for the three and ~~nine~~six month periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 are based on the weighted average number of common shares outstanding during the periods. The effects of potentially dilutive securities that are anti-dilutive are not included in the computation of dilutive income (loss) per share. We include all common shares granted under our incentive compensation plan which remain unvested (“restricted common shares”) and contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid (“participating securities”), in the number of shares outstanding in our basic and diluted EPS calculations using the two-class method. All of our restricted common shares are currently participating securities.

Under the two-class method, earnings per common share are computed by dividing the sum of distributed earnings allocated to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, distributed and undistributed earnings are allocated to both common shares and restricted common shares based on the total weighted average shares outstanding during the period. The number of restricted common shares outstanding was approximately 0.9% ~~and 0.8%~~ of total outstanding shares for both the three and ~~nine~~six month periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019, respectively,~~2020, and, consequently, was immaterial to the basic and diluted EPS calculations. Therefore, use of the two-class method had no impact on our basic and diluted EPS calculations for the periods presented. The following table sets forth the computation of basic and diluted net income (loss) per common share for the three and ~~nine~~six month periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 (amounts in thousands, except per share amounts):

We and our subsidiaries are parties to a $750.0 million Credit Facility with Wells Fargo Capital Finance, LLC as administrative agent, and the lenders named ~~therein.~~therein (the “Credit Facility”). For further information related to significant terms of the Credit Facility, see ~~the notes~~footnote 10 to the Company’s consolidated financial statements included as Item 8 in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

As of ~~September~~June 30, ~~2020,~~2021, we were in compliance with our financial covenants under the Amended and Restated Credit Agreement. At ~~September~~June 30, ~~2020,~~2021, we had ~~$18.0 million of~~0 borrowings outstanding under the Credit Facility and could borrow up to approximately ~~$724.3~~$741.3 million, net of an $8.7 million outstanding letter of credit, and remain in compliance with the debt covenants under the Credit Facility. ~~At October 21, 2020, we had $742.3 million of available borrowings under our Credit Facility, net of a $7.7 million outstanding letter of credit.~~

On December 14, 2020, we completed an offering of $1,250 million aggregate principal amount of 3.875% senior notes due 2028 (the “New Notes”) and the settlement of a cash tender offer with respect to our previously outstanding 5.625% senior notes due 2025 (the “Old Notes”). For further information related to significant terms of the Senior Unsecured Notes, see ~~the notes~~footnote 9 to the Company’s consolidated financial statements included as Item 8 in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. As of ~~September~~June 30, ~~2020,~~2021, we were in compliance with the covenants governing our notes.

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

We adopted Topic 842 on January 1, 2019. For a discussion ~~of our adoption~~ of Topic 842 and related disclosures, see note 2 and note 11 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

At ~~September~~June 30, ~~2020,~~2021, as disclosed in our condensed consolidated balance sheet, we had net operating lease right-of-use assets of ~~$165.5~~$167.7 million and net finance lease right-of-use assets of ~~$0.2~~$0.1 million. Our operating lease liabilities at ~~September~~June 30, ~~2020~~2021 were ~~$169.0~~$171.7 million and finance lease liabilities were ~~$0.4~~$0.2 million. The weighted average remaining lease term for operating leases was approximately ~~9.8~~9.1 years and the weighted average remaining lease term for finance leases was approximately ~~1.5~~0.8 years. The weighted average discount rate for operating and finance leases was approximately ~~6.6%~~6.3% and 5.9%, respectively.

~~On March 27, 2020, the Coronavirus Aid, Relief,~~The future minimum lease payments of operating leases executed but not commenced as of June 30, 2021 are estimated to be $0.1 million, $0.5 million, $0.5 million, $0.5 million and Economic Security (“CARES”) Act was signed into law and includes certain income tax provisions relevant to businesses. The Company is required to recognize the effect on the consolidated financial statements in the period the law was enacted, which was the quarter ended March 31, 2020. For the nine month period ended September 30, 2020, the CARES Act did not have a material impact on our provision for income taxes. However, certain provisions of the CARES Act did have a favorable cash impact. Specifically, with respect to the elimination of the 80% of taxable income limitation on net operating loss carryforwards that may allow corporate entities to fully utilize net operating loss carryforwards to offset taxable income in 2018, 2019 or 2020, we expect to realize a total reduction of approximately $5.4$0.5 million ~~of cash taxes paid in 2020. Secondly, taxpayers with alternative minimum tax credits may claim a refund~~ for the ~~entire amount of such credit instead of recovering the credit through refunds over a period of multiple~~ years as required by the 2017 Tax Cut and Jobs Act, which resulted in a $1.5 million federal tax refund claim for the Company, which we received in June 2020. Lastly, the non-income tax-based provision allowing an employer to pay its share of Social Security payroll taxes that would otherwise be due from the date of enactment throughended December 31, ~~2020 over the following two years~~2021, 2022, 2023, 2024 and 2025, respectively, and $3.2 million thereafter. It is expected ~~to result in the deferral of approximately $6.7 million of those payroll taxes, half of which we expect to remit by September 15, 2021 and the remaining amounts in 2022.~~that these leases will commence during 2021.

We have identified 5 reportable segments: equipment rentals, new equipment sales, used equipment sales, parts sales and services revenues. These segments are based upon how management of the Company allocates resources and assesses performance. Non-segmented revenues and non-segmented costs relate to equipment support activities including transportation, hauling, parts freight and damage-waiver charges and are not allocated to the other reportable segments. There were no sales between segments for any of the periods presented. Selling, general and administrative expenses as well as all other income and expense items below gross profit are not generally allocated to reportable segments.

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

											Three Months Ended				Six Months Ended
	Three Months Ended September 30,					Nine Months Ended September 30,					June 30,				June 30,
	2020		2019			2020		2019			2021		2020		2021		2020
Segment Revenues:
Equipment rentals	$	165,849	$	204,132		$	496,162	$	572,563		$	179,037	$	155,794	$	335,261	$	330,313
New equipment sales		37,248		65,010			112,068		177,709			49,919		43,947		87,664		74,820
Used equipment sales		40,000		31,180			105,231		96,942			41,358		34,013		83,124		65,231
Parts sales		27,853		31,499			83,842		93,798			27,424		26,220		53,036		55,989
Services revenues		15,637		18,105			48,116		50,398			14,977		15,657		29,487		32,479
Total segmented revenues		286,587		349,926			845,419		991,410			312,715		275,631		588,572		558,832
Non-segmented revenues		2,673		3,071			8,099		8,822			3,048		2,705		5,636		5,426
Total revenues	$	289,260	$	352,997		$	853,518	$	1,000,232		$	315,763	$	278,336	$	594,208	$	564,258
Segment Gross Profit:
Equipment rentals	$	65,322	$	94,558		$	196,629	$	258,498		$	73,888	$	59,148	$	132,352	$	131,307
New equipment sales		4,124		7,535			12,259		21,071			5,743		4,688		10,046		8,135
Used equipment sales		12,128		9,771			33,639		33,200			14,350		10,731		27,751		21,511
Parts sales		6,928		8,328			21,662		25,048			7,068		6,868		13,933		14,734
Services revenues		10,439		12,207			32,205		34,137			10,188		10,484		20,001		21,766
Total segmented gross profit		98,941		132,399			296,394		371,954			111,237		91,919		204,083		197,453
Non-segmented gross profit (loss)		126		(271	)		226		(1,345	)
Non-segmented gross profit												128		151		285		100
Total gross profit	$	99,067	$	132,128		$	296,620	$	370,609		$	111,365	$	92,070	$	204,368	$	197,553

	Balances at				Balances at
	September 30,		December 31,		June 30,		December 31,
	2020		2019		2021		2020
Segment identified assets:
Equipment sales	$	56,462	$	67,542	$	111,222	$	58,414
Equipment rentals		1,078,403		1,217,673		1,112,959		1,028,745
Parts and services		16,409		17,936		17,200		14,074
Total segment identified assets		1,151,274		1,303,151		1,241,381		1,101,233
Non-segment identified assets		580,221		671,459		774,510		879,251
Total assets	$	1,731,495	$	1,974,610	$	2,015,891	$	1,980,484

The Company operates primarily in the United States and our sales to international customers for the three month periods ended ~~September~~June 30, 2021 and 2020 were 0.1% and ~~2019 were~~ 0.2% ~~and 0.1%~~ of total revenues, respectively, and for the six month periods ended June 30, 2021 and 2020 were 0.2% and 0.3% of total revenues, ~~for each of the nine month periods ended September 30, 2020 and 2019.~~respectively. NaN one customer accounted for more than 10% of our revenues on an overall or segment basis for any of the periods presented.

On July 20, 2021, the Company announced that it entered into a definitive agreement to sell its crane business to a wholly-owned subsidiary of ~~Guarantor Subsidiaries~~

~~All~~The Manitowoc Company, Inc. for $130 million in cash, subject to adjustment based on actual amounts of net working capital and crane rental fleet net book value delivered at transaction closing. The Company expects the transaction to close during the fourth quarter of 2021, subject to customary closing conditions, including regulatory approval under the Hart-Scott-Rodino Act. The Company reports financial results of the ~~indebtedness~~crane business within its rental revenues, new equipment sales, used equipment sales, parts and services segments. Total revenues attributable to the crane business were approximately $86.3 million during the first six months of ~~H&E Equipment Services, Inc. is guaranteed by all~~fiscal 2021 and approximately $158.5 million in fiscal 2020. Net assets of ~~its subsidiaries; GNE Investments, Inc.~~the crane business were approximately $100.0 million as of June 30, 2021. The amounts presented above are preliminary and its wholly‑owned subsidiary Great Northern Equipment, Inc., H&E Equipment Services (California), LLC, H&E California Holding, Inc., H&E Equipment Services (Mid-Atlantic), Inc. and H&E Finance Corp. The guarantor subsidiaries are ~~all wholly‑owned and the guarantees, made on a joint and several basis, are full and unconditional (subject to subordination provisions and~~ subject to change.

In connection with the pending sale, we expect to classify the results of operations of the crane business as discontinued operations beginning in the third quarter of 2021. The assets and liabilities associated with the discontinued operations will be reflected as held for sale beginning in the third quarter of 2021. When the transaction is completed, the Company expects to record a ~~standard limitation which provides that~~gain on the maximum amount guaranteed by each guarantor will not exceed the maximum amount that can be guaranteed without making the guarantee void under fraudulent conveyance laws). There are no restrictions on H&E Equipment Services, Inc.’s ability to obtain funds from the guarantor subsidiaries by dividend or loan.

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

As of September 30, 2020

H&E Equipment
Services

Guarantor
Subsidiaries

Elimination

Consolidated

(Amounts in thousands)

Assets:

Cash

$
11,997

$
—

$
—

$
11,997

Receivables, net

146,152

21,443

—

167,595

Inventories, net

69,883

2,988

—

72,871

Prepaid expenses and other assets

11,424

173

—

11,597

Rental equipment, net

943,612

134,791

—

1,078,403

Property and equipment, net

104,671

17,502

—

122,173

Operating lease right-of-use assets, net

144,687

20,792

—

165,479

Finance lease right-of-use assets, net

—

244

—

244

Deferred financing costs, net

2,332

—

—

2,332

Investment in guarantor subsidiaries

188,438

—

(188,438
)

—

Intangible assets, net

29,953

—

—

29,953

Goodwill

57,185

11,666

—

68,851

Total assets

$
1,710,334

$
209,599

$
(188,438
)

$
1,731,495

Liabilities and Stockholders’ Equity:

Amounts due on senior secured credit facility

17,986

$
—

$
—

$
17,986

Accounts payable

66,458

3,347

—

69,805

Manufacturer flooring plans payable

11,646

—

—

11,646

Accrued expenses payable and other liabilities

77,710

(3,946
)

—

73,764

Dividends payable

200

(65
)

—

135

Senior unsecured notes, net

946,155

—

—

946,155

Operating lease right-of-use liabilities

147,495

21,457

—

168,952

Finance lease right-of-use liabilities

—

368

—

368

Deferred income taxes

178,752

—

—

178,752

Deferred compensation payable

2,173

—

—

2,173

Total liabilities

1,448,575

21,161

—

1,469,736

Stockholders’ equity

261,759

188,438

(188,438
)

261,759

Total liabilities and stockholders’ equity

$
1,710,334

$
209,599

$
(188,438
)

$
1,731,495

As of December 31, 2019

H&E Equipment
Services

Guarantor
Subsidiaries

Elimination

Consolidated

(Amounts in thousands)

Assets:

Cash

$
14,247

$
—

$
—

$
14,247

Receivables, net

164,260

27,944

—

192,204

Inventories, net

81,945

3,533

—

85,478

Prepaid expenses and other assets

10,129

133

—

10,262

Rental equipment, net

1,062,154

155,519

—

1,217,673

Property and equipment, net

111,429

19,135

—

130,564

Operating lease right-of-use assets, net

137,625

18,945

—

156,570

Finance lease right-of-use assets, net

—

365

—

365

Deferred financing costs, net

2,857

—

—

2,857

Investment in guarantor subsidiaries

235,749

—

(235,749
)

—

Intangible assets, net

32,948

—

—

32,948

Goodwill

101,916

29,526

—

131,442

Total assets

$
1,955,259

$
255,100

$
(235,749
)

$
1,974,610

Liabilities and Stockholders’ Equity:

Amounts due under senior secured credit facility

$
216,879

$
—

$
—

$
216,879

Accounts payable

56,225

2,628

—

58,853

Manufacturer flooring plans payable

25,201

—

—

25,201

Accrued expenses payable and other liabilities

81,646

(3,264
)

—

78,382

Dividends payable

231

(60
)

—

171

Senior unsecured notes, net

945,566

—

—

945,566

Operating lease right-of-use liabilities, net

139,768

19,497

—

159,265

Finance lease right-of-use liabilities, net

—

550

—

550

Deferred income taxes

180,126

—

—

180,126

Deferred compensation payable

2,098

—

—

2,098

Total liabilities

1,647,740

19,351

—

1,667,091

Stockholders’ equity

307,519

235,749

(235,749
)

307,519

Total liabilities and stockholders’ equity

$
1,955,259

$
255,100

$
(235,749
)

$
1,974,610

Three Months Ended September 30, 2020

H&E Equipment
Services

Guarantor
Subsidiaries

Elimination

Consolidated

(Amounts in thousands)

Revenues:

Equipment rentals

$
142,046

$
23,803

$
—

$
165,849

New equipment sales

36,315

933

—

37,248

Used equipment sales

35,465

4,535

—

40,000

Parts sales

25,336

2,517

—

27,853

Services revenues

14,186

1,451

—

15,637

Other

2,356

317

—

2,673

Total revenues

255,704

33,556

—

289,260

Cost of revenues:

Rental depreciation

50,333

7,750

—

58,083

Rental expense

22,229

3,399

—

25,628

Rental other

14,141

2,675

—

16,816

86,703

13,824

—

100,527

New equipment sales

32,362

762

—

33,124

Used equipment sales

24,952

2,920

—

27,872

Parts sales

19,164

1,761

—

20,925

Services revenues

4,752

446

—

5,198

Other

2,331

216

—

2,547

Total cost of revenues

170,264

19,929

—

190,193

Gross profit:

Equipment rentals

55,343

9,979

—

65,322

New equipment sales

3,953

171

—

4,124

Used equipment sales

10,513

1,615

—

12,128

Parts sales

6,172

756

—

6,928

Services revenues

9,434

1,005

—

10,439

Other

25

101

—

126

Gross profit

85,440

13,627

—

99,067

Selling, general and administrative expenses

61,059

8,981

—

70,040

Merger costs

150

—

—

150

Equity in earnings of guarantor subsidiaries

2,226

—

(2,226
)

—

Gain on sales of property and equipment, net

1,852

250

—

2,102

Income from operations

28,309

4,896

(2,226
)

30,979

Other income (expense):

Interest expense

(12,174
)

(2,713
)

—

(14,887
)
Other, net

947

43

—

990

Total other expense, net

(11,227
)

(2,670
)

—

(13,897
)
Income before income taxes

17,082

2,226

(2,226
)

17,082

Income tax expense

6,979

—

—

6,979

Net income

$
10,103

$
2,226

$
(2,226
)

$
10,103

Three Months Ended September 30, 2019

H&E Equipment
Services

Guarantor
Subsidiaries

Elimination

Consolidated

(Amounts in thousands)

Revenues:

Equipment rentals

$
176,338

$
27,794

$
—

$
204,132

New equipment sales

60,584

4,426

—

65,010

Used equipment sales

25,850

5,330

—

31,180

Parts sales

27,284

4,215

—

31,499

Services revenues

15,614

2,491

—

18,105

Other

2,590

481

—

3,071

Total revenues

308,260

44,737

—

352,997

Cost of revenues:

Rental depreciation

54,757

8,308

—

63,065

Rental expense

23,947

3,942

—

27,889

Rental other

15,505

3,115

—

18,620

94,209

15,365

—

109,574

New equipment sales

53,542

3,933

—

57,475

Used equipment sales

17,958

3,451

—

21,409

Parts sales

20,150

3,021

—

23,171

Services revenues

5,131

767

—

5,898

Other

2,977

365

—

3,342

Total cost of revenues

193,967

26,902

—

220,869

Gross profit (loss):

Equipment rentals

82,129

12,429

—

94,558

New equipment sales

7,042

493

—

7,535

Used equipment sales

7,892

1,879

—

9,771

Parts sales

7,134

1,194

—

8,328

Services revenues

10,483

1,724

—

12,207

Other

(387
)

116

—

(271
)
Gross profit

114,293

17,835

—

132,128

Selling, general and administrative expenses

67,372

9,924

—

77,296

Merger costs

47

—

—

47

Equity in earnings of guarantor subsidiaries

4,701

—

(4,701
)

—

Gain on sales of property and equipment, net

686

32

—

718

Income from operations

52,261

7,943

(4,701
)

55,503

Other income (expense):

Interest expense

(14,013
)

(3,318
)

—

(17,331
)
Other, net

512

76

—

588

Total other expense, net

(13,501
)

(3,242
)

—

(16,743
)
Income before income taxes

38,760

4,701

(4,701
)

38,760

Income tax expense

10,329

—

—

10,329

Net income

$
28,431

$
4,701

$
(4,701
)

$
28,431

Nine Months Ended September 30, 2020

H&E Equipment
Services

Guarantor
Subsidiaries

Elimination

Consolidated

(Amounts in thousands)

Revenues:

Equipment rentals

$
429,040

$
67,122

$
—

$
496,162

New equipment sales

107,813

4,255

—

112,068

Used equipment sales

91,918

13,313

—

105,231

Parts sales

74,847

8,995

—

83,842

Services revenues

42,429

5,687

—

48,116

Other

6,944

1,155

—

8,099

Total revenues

752,991

100,527

—

853,518

Cost of revenues:

Rental depreciation

153,870

23,355

—

177,225

Rental expense

64,733

9,728

—

74,461

Rental other

40,376

7,471

—

47,847

258,979

40,554

—

299,533

New equipment sales

96,184

3,625

—

99,809

Used equipment sales

63,241

8,351

—

71,592

Parts sales

55,836

6,344

—

62,180

Services revenues

14,119

1,792

—

15,911

Other

7,011

862

—

7,873

Total cost of revenues

495,370

61,528

—

556,898

Gross profit (loss):

Equipment rentals

170,061

26,568

—

196,629

New equipment sales

11,629

630

—

12,259

Used equipment sales

28,677

4,962

—

33,639

Parts sales

19,011

2,651

—

21,662

Services revenues

28,310

3,895

—

32,205

Other

(67
)

293

—

226

Gross profit

257,621

38,999

—

296,620

Selling, general and administrative expenses

189,811

27,714

—

217,525

Impairment of goodwill

61,994

—

—

61,994

Merger costs

308

—

—

308

Equity in earnings of guarantor subsidiaries

3,904

—

(3,904
)

—

Gain on sales of property and equipment, net

8,122

1,138

—

9,260

Income from operations

17,534

12,423

(3,904
)

26,053

Other income (expense):

Interest expense

(37,821
)

(8,668
)

—

(46,489
)
Other, net

2,113

149

—

2,262

Total other expense, net

(35,708
)

(8,519
)

—

(44,227
)
Income (loss) before income taxes

(18,174
)

3,904

(3,904
)

(18,174
)
Income tax benefit

(124
)

—

—

(124
)
Net income (loss)

$
(18,050
)

$
3,904

$
(3,904
)

$
(18,050
)

Nine Months Ended September 30, 2019

H&E Equipment
Services

Guarantor
Subsidiaries

Elimination

Consolidated

(Amounts in thousands)

Revenues:

Equipment rentals

$
495,246

$
77,317

$
—

$
572,563

New equipment sales

160,200

17,509

—

177,709

Used equipment sales

81,430

15,512

—

96,942

Parts sales

81,326

12,472

—

93,798

Services revenues

42,922

7,476

—

50,398

Other

7,422

1,400

—

8,822

Total revenues

868,546

131,686

—

1,000,232

Cost of revenues:

Rental depreciation

157,380

24,267

—

181,647

Rental expense

68,242

11,434

—

79,676

Rental other

44,500

8,242

—

52,742

270,122

43,943

—

314,065

New equipment sales

141,181

15,457

—

156,638

Used equipment sales

53,791

9,951

—

63,742

Parts sales

59,962

8,788

—

68,750

Services revenues

13,971

2,290

—

16,261

Other

8,963

1,204

—

10,167

Total cost of revenues

547,990

81,633

—

629,623

Gross profit (loss):

Equipment rentals

225,124

33,374

—

258,498

New equipment sales

19,019

2,052

—

21,071

Used equipment sales

27,639

5,561

—

33,200

Parts sales

21,364

3,684

—

25,048

Services revenues

28,951

5,186

—

34,137

Other

(1,541
)

196

—

(1,345
)
Gross profit

320,556

50,053

—

370,609

Selling, general and administrative expenses

203,785

29,998

—

233,783

Merger costs

314

—

—

314

Equity in earnings of guarantor subsidiaries

10,656

—

(10,656
)

—

Gain on sales of property and equipment, net

1,948

391

—

2,339

Income from operations

129,061

20,446

(10,656
)

138,851

Other income (expense):

Interest expense

(41,461
)

(9,992
)

—

(51,453
)
Other, net

1,407

202

—

1,609

Total other expense, net

(40,054
)

(9,790
)

—

(49,844
)
Income before income taxes

89,007

10,656

(10,656
)

89,007

Income tax expense

23,719

—

—

23,719

Net income

$
65,288

$
10,656

$
(10,656
)

$
65,288

Nine Months Ended September 30, 2020

H&E Equipment
Services

Guarantor
Subsidiaries

Elimination

Consolidated

(Amounts in thousands)

Cash flows from operating activities:

Net income (loss)

$
(18,050
)

$
3,904

$
(3,904
)

$
(18,050
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization on property and equipment

18,672

3,616

—

22,288

Depreciation of rental equipment

153,870

23,355

—

177,225

Amortization of finance lease right-of-use assets

—

121

—

121

Amortization of intangible assets

2,996

—

—

2,996

Amortization of deferred financing costs

755

—

—

755

Accretion of note discount, net of premium amortization

358

—

—

358

Non-cash operating lease expense

8,495

2,124

—

10,619

Impairment of goodwill

61,994

—

—

61,994

Provision for losses on accounts receivable

3,143

197

—

3,340

Provision for inventory obsolescence

95

—

—

95

Change in deferred income taxes

(1,374
)

—

—

(1,374
)
Stock-based compensation expense

3,295

—

—

3,295

Gain from sales of property and equipment, net

(8,122
)

(1,138
)

—

(9,260
)
Gain from sales of rental equipment, net

(28,175
)

(4,927
)

—

(33,102
)
Equity in earnings of guarantor subsidiaries

(3,904
)

—

3,904

—

Changes in operating assets and liabilities:

Receivables

14,965

6,304

—

21,269

Inventories

(7,115
)

(597
)

—

(7,712
)
Prepaid expenses and other assets

(1,315
)

(40
)

—

(1,355
)
Accounts payable

10,830

719

—

11,549

Manufacturer flooring plans payable

(13,555
)

—

—

(13,555
)
Accrued expenses payable and other liabilities

(11,785
)

(2,693
)

—

(14,478
)
Deferred compensation payable

75

—

—

75

Net cash provided by operating activities

186,148

30,945

—

217,093

Cash flows from investing activities:

Purchases of property and equipment

(14,771
)

(2,512
)

—

(17,283
)
Purchases of rental equipment

(71,756
)

(9,670
)

—

(81,426
)
Proceeds from sales of property and equipment

11,021

1,667

—

12,688

Proceeds from sales of rental equipment

83,685

13,112

—

96,797

Investment in subsidiaries

33,355

—

(33,355
)

—

Net cash provided by investing activities

41,534

2,597

(33,355
)

10,776

Cash flows from financing activities:

Borrowings on senior secured credit facility

729,810

—

—

729,810

Payments on senior secured credit facility

(928,703
)

—

—

(928,703
)
Dividends paid

(29,663
)

(5
)

—

(29,668
)
Purchases of treasury stock

(1,376
)

—

—

(1,376
)
Payments on finance lease obligations

—

(182
)

—

(182
)
Capital contributions

—

(33,355
)

33,355

—

Net cash used in financing activities

(229,932
)

(33,542
)

33,355

(230,119
)
Net decrease in cash

(2,250
)

—

—

(2,250
)
Cash, beginning of period

14,247

—

—

14,247

Cash, end of period

$
11,997

$
—

$
—

$
11,997

Nine Months Ended September 30, 2019

H&E Equipment
Services

Guarantor
Subsidiaries

Elimination

Consolidated

(Amounts in thousands)

Cash flows from operating activities:

Net income

$
65,288

$
10,656

$
(10,656
)

$
65,288

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

.

Depreciation and amortization of property and equipment

18,367

2,474

—

20,841

Depreciation of rental equipment

157,380

24,267

—

181,647

Amortization of finance lease right-of-use assets

—

122

—

122

Amortization of intangible assets

3,091

—

—

3,091

Amortization of deferred financing costs

757

—

—

757

Accretion of note discount, net of premium amortization

357

—

—

357

Non-cash operating lease expense

6,417

1,604

—

8,021

Provision for losses on accounts receivable

3,869

190

—

4,059

Provision for inventory obsolescence

152

—

—

152

Change in deferred income taxes

22,127

—

—

22,127

Stock-based compensation expense

3,060

—

—

3,060

Gain from sales of property and equipment, net

(1,948
)

(391
)

—

(2,339
)
Gain from sales of rental equipment, net

(27,234
)

(5,546
)

—

(32,780
)
Equity in earnings of guarantor subsidiaries

(10,656
)

—

10,656

—

Changes in operating assets and liabilities, net of acquisitions:

Receivables

(9,639
)

7,594

—

(2,045
)
Inventories

(40,006
)

375

—

(39,631
)
Prepaid expenses and other assets

(3,052
)

(46
)

—

(3,098
)
Accounts payable

(15,472
)

(1,399
)

—

(16,871
)
Manufacturer flooring plans payable

2,760

(501
)

—

2,259

Accrued expenses payable and other liabilities

(7,914
)

422

—

(7,492
)
Deferred compensation payable

82

—

—

82

     Net cash provided by operating activities

167,786

39,821

—

207,607

Cash flows from investing activities:

Acquisition of businesses, net of cash acquired

(106,746
)

—

—

(106,746
)
Purchases of property and equipment

(27,236
)

(4,215
)

—

(31,451
)
Purchases of rental equipment

(237,436
)

(31,714
)

—

(269,150
)
Proceeds from sales of property and equipment

2,651

434

—

3,085

Proceeds from sales of rental equipment

73,966

15,139

—

89,105

Investment in subsidiaries

19,344

—

(19,344
)

—

     Net cash used in investing activities

(275,457
)

(20,356
)

(19,344
)

(315,157
)
Cash flows from financing activities:

Borrowings on senior secured credit facility

1,174,120

—

—

1,174,120

Payments on senior secured credit facility

(1,040,750
)

—

—

(1,040,750
)
Dividends paid

(29,525
)

(5
)

—

(29,530
)
Purchases of treasury stock

(1,640
)

—

—

(1,640
)
Payments of deferred financing costs

(559
)

—

—

(559
)
Payments of finance lease obligations

(56
)

(116
)

—

(172
)
Capital contributions

—

(19,344
)

19,344

—

     Net cash provided by (used in) financing activities

101,590

(19,465
)

19,344

101,469

Net decrease in cash

(6,081
)

—

—

(6,081
)
Cash, beginning of period

16,677

—

—

16,677

Cash, end of period

10,596

—

—

10,596

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

The following discussion summarizes the financial position of H&E Equipment Services, Inc. and its subsidiaries as of ~~September~~June 30, ~~2020,~~2021, and its results of operations for the three and ~~nine~~six month periods ended ~~September~~June 30, ~~2020,~~2021, and should be read in conjunction with (i) the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q and (ii) the audited consolidated financial statements and accompanying notes to our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. The following discussion contains, in addition to historical information, forward-looking statements that include risks and uncertainties (see discussion of “Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q). Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those factors set forth under Item 1A — “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, ~~2019 and in Item 1A — “Risk Factors” in this Quarterly Report on Form 10-Q for the quarterly period ended September 30,~~ 2020.

The outbreak of the COVID-19 pandemic continues to affect certain regions of the United States of America and the world, including in the primary regions we operate. Many State Governors have issued temporary Executive Orders that, among other stipulations, effectively prohibit in-person work activities for most industries and businesses, having the effect of suspending or severely curtailing operations. While we are considered an essential business pursuant to the various Executive Orders, if repercussions of the outbreak are prolonged, it could have a significant adverse impact to the underlying industries of some of our customers or in some or all of the primary markets in which we operate, including our customers in the oil and gas industry. To date, our branch locations remain operational and we have not incurred any significant interruptions to our day-to-day operations or supply chain, except most of our corporate employees are working remotely.world. In response to the COVID-19 pandemic, we proactively implemented certain measures to strengthen cash flow, manage costs, strengthen liquidity and enhance employee safety. These measures included the reduction of payroll costs, a reduction in capital expenditures and other discretionary spending, the elimination of most business travel and restriction of visitors to our corporate office, enhanced cleaning and disinfection procedures and the promotion of social distancing at our corporate office and branch ~~locations, promotion~~locations. We remain focused on the safety and well-being of ~~social distancing~~our employees, customers and ~~the wearing~~communities as we maintain a high-level of ~~face coverings (masks) at~~service to our ~~corporate office and branch locations, and requirements for employees to work from home where possible.~~customers.

As the impact of COVID-19 became more widespread, ~~in March 2020,~~ our equipment rental utilization and sales volumes began to decline from February 2020 levels ~~and this decline continued~~ through mid-April 2020, where we began to see utilization and sales levels ~~stabilize~~improve and ~~improve~~stabilize for the remainder of ~~the second quarter, throughout the third quarter and into early October. Even~~2020. We continue to see improvements with ~~these recent sequential improvements, our total revenues for the nine month period ended September 30, 2020, were 14.7% lower than those of the same nine month period last year.~~utilization levels beginning in March 2021 returning to approximate pre-COVID utilization levels. The timing and ~~the~~ extent of any ~~continued recovery, or~~ subsequent contraction in our equipment rental utilization and sales volumes ~~cannot be reasonably estimated at this time. As such, the extent of the ultimate impact of the pandemic on the Company's operational and financial performance~~due to COVID-19 will depend on ~~various developments,~~a number of factors, including a widespread resurgence in COVID-19 infections, the ~~duration and spread~~rate of ~~the outbreak,~~vaccinations, the impact onto capital and financial markets ~~governmental limitations on business operations generally,~~ and ~~its and their~~the related impact on ~~potential customers, employees, vendors and distribution partners, all of which cannot be reasonably predicted at this time.~~our customers. For a discussion of liquidity, see Liquidity and Capital Resources below.

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

As of ~~October 21, 2020,~~July 27, 2021, we operated 97106 full-service facilities throughout the Intermountain, Southwest, Gulf Coast, West Coast, Southeast and Mid-Atlantic regions of the United States. Our work force includes distinct, focused sales forces for our new and used equipment sales and rental operations, highly skilled service technicians, product specialists and regional and district managers. We focus our sales and rental activities on, and organize our personnel principally by, our four core equipment categories. We believe this allows us to provide specialized equipment knowledge, improve the effectiveness of our rental and sales force and strengthen our customer relationships. In addition, we have branch managers for each location who are responsible for managing their assets and financial results. We believe this fosters accountability in our business and strengthens our local and regional relationships.

Through our predecessor companies, we have been in the equipment services business for approximately 5960 years. H&E ~~Equipment Services~~ L.L.C. ~~(“H&E LLC”)~~ was formed in June 2002 through the business combination of Head & Engquist,

~~Equipment, LLC (“Head & Engquist”),~~ a wholly-owned subsidiary of Gulf Wide, ~~Industries, L.L.C. (“Gulf Wide”),~~ and ~~ICM Equipment Company L.L.C. (“ICM”).~~ICM. Head & Engquist, founded in 1961, and ICM, founded in 1971, were two leading regional, integrated equipment service companies operating in contiguous geographic markets. In ~~the June 2002 transaction, Head & Engquist and ICM were merged~~connection with and into Gulf Wide, which was renamed H&E LLC. Prior to the combination, Head & Engquist operated 25 facilities in the Gulf Coast region, and ICM operated 16 facilities in the Intermountain region of the United States.

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

~~Effective February 1, 2019, we completed the acquisition of We-Rent-It, a privately-held equipment rental company with six branch locations in Central Texas.~~

Item 7, included in Part II of our Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, presents the accounting policies and related estimates that we believe are the most critical to understanding our consolidated financial statements, financial condition, and results of operations and cash flows, and which require complex management judgment and assumptions, or involve uncertainties. There have been no significant changes to these critical accounting policies and estimates during the three and ~~nine~~six month

periods ended ~~September~~June 30, ~~2020.~~2021. Our critical accounting policies include, among others, useful lives of rental equipment and property and equipment, acquisition and disposition accounting, goodwill, long-lived assets and income taxes.

Information regarding our other significant accounting policies is included in note 2 to our consolidated financial statements in Item 8 of Part II of our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 and in note 2 to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

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

Our non-segmented revenues and costs relate primarily to ancillary charges associated with equipment ~~support activities that we provide to customers in connection with new~~maintenance and ~~used equipment sales and parts and~~repair services, ~~revenues~~ and are not generally allocated to reportable segments.

For additional information about our business segments, see note 1210 to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

We generate all of our total revenues from our five business segments and our non-segmented equipment support activities. Equipment rentals ~~for the periods presented in this Quarterly Report on Form 10-Q~~ account for more than half of our total revenues. For the ~~nine~~six month period ended ~~September~~June 30, ~~2020,~~2021, approximately ~~58.1%~~56.4% of our total revenues were attributable to equipment rentals, ~~13.1%~~14.8% of our total revenues were attributable to new equipment sales, ~~12.3%~~14.0% were attributable to used equipment sales, ~~9.8%~~8.9% were attributable to parts sales, ~~5.6%~~5.0% were attributable to our services revenues and ~~1.1%~~0.9% were attributable to non-segmented other revenues.

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

Equipment Rentals. Our rental operation primarily rents our four core types of construction and industrial equipment. We have a well-maintained rental fleet and our own dedicated sales force, focused by equipment type. We actively manage the size, quality,

age and composition of our rental fleet based on our analysis of key measures such as time utilization (which we analyze as equipment usage based on: (1) a percentage of original equipment ~~cost,~~cost; and (2) the number of rental equipment units available for rent), rental rate trends and targets, rental equipment dollar utilization, and maintenance and repair costs, which we closely monitor. We maintain fleet quality through regional ~~and district~~ quality control managers and our parts and services operations.

New Equipment Sales. We seek to optimize revenues from new equipment sales by selling equipment through a professional in-house retail sales force focused by product type. While sales of new equipment are impacted by the availability of equipment from the manufacturer, we believe our status as a leading distributor for some of our key suppliers improves our ability to obtain equipment. New equipment sales are an important component of our integrated model due to customer interaction and service ~~contact and new~~contact. New equipment sales also lead to future parts and services revenues.

Used Equipment Sales. We generate the majority of our used equipment sales revenues by selling equipment from our rental fleet. The remainder of our used equipment sales revenues comes from the sale of inventoried equipment that we acquire through trade-ins from our equipment customers and selective purchases of high-quality used equipment. Our policy is not to offer specified price trade-in arrangements on equipment for sale. Sales of our rental fleet equipment allow us to manage the size, quality, composition and age of our rental fleet, and provide us with a profitable distribution channel for the disposal of rental equipment.

Parts Sales. We generate revenues from the sale of new and used parts for equipment that we rent or sell, as well as for other makes of equipment. Our product support sales representatives are instrumental in generating our parts revenues. They are product specialists and receive performance incentives for achieving certain sales levels. Most of our parts sales come from our extensive in-house parts inventory. Our parts sales provide us with a relatively stable revenue stream that is generally less sensitive to the economic cycles that tend to affect our rental and equipment sales operations.

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

Our non-segmented revenues relate to equipment support activities that we provide to customers in connection with new and used equipment sales and parts and services revenues and are not generally allocated to reportable segments.

Our largest expenses are the costs to purchase the new equipment we sell, the costs associated with the used equipment we sell, rental expenses, rental depreciation and costs associated with parts sales and services, all of which are included in cost of revenues. For the ~~nine~~six month period ended ~~September~~June 30, ~~2020,~~2021, our total cost of revenues was approximately ~~$556.9~~$389.8 million. Our operating

expenses consist principally of selling, general and administrative expenses. For the ~~nine~~six month period ended ~~September~~June 30, ~~2020,~~2021, our selling, general and administrative expenses were ~~$217.5~~$151.0 million. In addition, we have interest expense related to our debt instruments. Operating expenses and all other income and expense items below the gross profit line of our consolidated statements of operations are not generally allocated to our reportable segments.

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

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

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

Rental Other. Rental other expenses consist primarily of equipment support activities that we provide our customers in connection with renting equipment, such as hauling services, damage waiver policies, environmental fees and other recovery fees.

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

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

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

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

Our non-segmented other expenses include costs ~~relate to~~associated with ancillary charges associated with equipment ~~support activities that we provide to customers in connection with new~~maintenance and ~~used equipment sales and parts and services revenues and are not generally allocated to reportable segments.~~repair services.

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

Interest expense for the periods presented represents the interest on our outstanding debt instruments, including aggregate amounts outstanding under our revolving Credit Facility, senior unsecured notes due ~~2025~~2028 and our finance lease obligations. Interest expense also includes interest on our outstanding manufacturer flooring plans payable, which are used to finance inventory and rental equipment purchases. Non-cash interest expense related to the amortization cost of deferred financing costs and the accretion/amortization of note discount/premium are also included in interest expense.

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

A substantial portion of our overall value is in our rental fleet equipment. The net book value of our rental equipment at ~~September~~June 30, ~~2020~~2021 was $1.1 billion, or approximately ~~62.3%~~55.2% of our total assets. Our rental fleet as of ~~September~~June 30, ~~2020~~2021 consisted of ~~40,775~~41,136 units having an original acquisition cost (which we define as the cost originally paid to ~~manufacturers or the original amount financed under operating leases)~~manufacturers) of approximately $1.8 billion. As of ~~September~~June 30, ~~2020,~~2021, our rental fleet composition was as follows (dollars in millions):

Determining the optimal age and mix for our rental fleet equipment is subjective and requires considerable estimates and judgments by management. We constantly evaluate the mix, age and quality of the equipment in our rental fleet in response to current economic and market conditions, competition and customer demand. The mix and age of our rental fleet, as well as our cash flows, are impacted by sales of equipment from the rental fleet, which are influenced by used equipment pricing at the retail and secondary auction market levels, and the capital expenditures to acquire new rental fleet equipment. In making equipment acquisition decisions, we evaluate current economic and market conditions, competition, manufacturers’ availability, pricing and return on investment over

the estimated useful life of the specific equipment, among other things. As a result of our in-house service capabilities and extensive maintenance program, we believe our rental fleet is well-maintained.

The original acquisition cost of our gross rental fleet ~~decreased~~increased by approximately ~~$122.6~~$82.7 million, or ~~6.3%~~4.7%, for the ~~nine~~six month period ended ~~September~~June 30, ~~2020,~~2021, largely reflective of ~~a decrease~~an increase in rental fleet capital expenditures. The average age of our rental fleet equipment ~~increased~~decreased by approximately ~~3.7~~1.2 months for the ~~nine~~six month period ended ~~September~~June 30, ~~2020.~~2021. Our average rental rates ~~based on the American Rental Association’s calculation methodology,~~ for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 were ~~2.2%~~2.3% lower than the same period last year. See further discussion on rental rates in “Results of Operations” below.

The rental equipment mix among our four core product lines for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 was largely consistent with that of the prior year comparable period as a percentage of original acquisition cost.

We are subject to a number of external factors that may adversely affect our businesses. These factors, and other factors, are discussed below and under the heading “Forward-Looking Statements,” and in Item 1A — “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2019 and in this Quarterly Report on Form 10-Q for the quarterly period ended September 30,~~ 2020.

~~Regional and Industry-Specific Activity and Trends.~~ Expenditures by our customers may be impacted by the overall level of construction activity in the markets and regions in which they operate, the price of oil and other commodities and other general economic trends impacting the industries in which our customers and end users operate. As our customers adjust their activity and spending levels in response to these external factors, our rentals and sales of equipment to those customers will be impacted. For example, high levels of industrial activity in our Gulf Coast and Intermountain regions in recent years

The tables included in the period-to-period comparisons below provide summaries of our revenues and gross profits for our business segments and non-segmented revenues for the three and ~~nine~~six month periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019.~~2020. The period-to-period comparisons of our financial results are not necessarily indicative of future results.

Three Months Ended ~~September~~June 30, ~~2020~~2021 Compared to the Three Months Ended ~~September~~June 30, ~~2019~~2020

	Three Months Ended				Total			Total			Three Months Ended					Total			Total
	September 30,				Dollar			Percentage			June 30,					Dollar			Percentage
	2020		2019		Increase (Decrease)			Increase (Decrease)			2021			2020		Increase (Decrease)			Increase (Decrease)
	(in thousands, except percentages)										(in thousands, except percentages)
Segment Revenues:
Equipment rentals
Rentals	$	149,423	$	184,797	$	(35,374	)		(19.1	)%	$	160,299		$	140,776	$	19,523			13.9	%
Rentals other		16,426		19,335		(2,909	)		(15.0	)%		18,738			15,018		3,720			24.8	%
Total equipment rentals		165,849		204,132		(38,283	)		(18.8	)%		179,037			155,794		23,243			14.9	%
New equipment sales		37,248		65,010		(27,762	)		(42.7	)%		49,919			43,947		5,972			13.6	%
Used equipment sales		40,000		31,180		8,820			28.3	%		41,358	��		34,013		7,345			21.6	%
Parts sales		27,853		31,499		(3,646	)		(11.6	)%		27,424			26,220		1,204			4.6	%
Services revenues		15,637		18,105		(2,468	)		(13.6	)%		14,977			15,657		(680	)		(4.3	)%
Non-Segmented revenues		2,673		3,071		(398	)		(13.0	)%		3,048			2,705		343			12.7	%
Total revenues	$	289,260	$	352,997	$	(63,737	)		(18.1	)%	$	315,763		$	278,336	$	37,427			13.4	%

Total Revenues. Our total revenues were approximately ~~$289.3~~$315.8 million for the three month period ended ~~September~~June 30, ~~2020~~2021 compared to ~~$353.0~~$278.3 million for the three month period ended ~~September~~June 30, ~~2019, a decrease~~2020, an increase of ~~$63.7~~$37.4 million, or ~~18.1%~~13.4%. Revenues for all reportable segments and non-segmented other revenues are further discussed below.

Equipment Rental Revenues. Our total revenues from equipment rentals for the three month period ended ~~September~~June 30, ~~2020 decreased~~2021 increased approximately ~~$38.3~~$23.2 million, or ~~18.8%~~14.9%, to ~~$165.8~~$179.0 million from ~~$204.1~~$155.8 million in the three month period ended ~~September~~June 30, ~~2019.~~2020. The ~~decrease~~increase in equipment rental revenues was largely due to ~~decreased~~increased demand ~~from~~compared to the ~~impact of the~~prior year COVID-19 economic downturn.

Rentals:. Rental revenues ~~decreased $35.4~~increased $19.5 million, or ~~19.1%~~13.9%, to ~~$149.4~~$160.3 million for the three month period ended ~~September~~June 30, ~~2020~~2021 compared to ~~$184.8~~$140.8 million for the three month period ended ~~September~~June 30, ~~2019.~~2020. Rental revenues from aerial work platform

equipment ~~decreased $11.4~~increased $6.5 million, earthmoving equipment ~~decreased $9.6~~increased $6.4 million, material handling equipment ~~decreased $7.9~~increased $5.0 million and other equipment ~~rental revenues decreased $4.9 million and~~increased $3.2 million. Partially offsetting these increases, crane rental revenues decreased $1.6 million.

Our average rental rates ~~based on the American Rental Association’s calculation methodology,~~ for the three month period ended ~~September~~June 30, ~~2020~~2021 decreased ~~4.0%~~0.3% compared to the same three month period last year and ~~decreased~~increased approximately ~~0.4%~~1.0% from the three month period ended ~~June 30, 2020.~~ March 31, 2021.

Rental equipment dollar utilization (annual rental revenues divided by the average original rental fleet equipment costs) for the three month period ended ~~September~~June 30, ~~2020~~2021 was ~~32.4%~~35.2% compared to ~~37.5%~~29.6% in the three month period ended ~~September~~June 30, ~~2019, a decrease~~2020, an increase of ~~5.1%~~5.6%. The ~~decrease~~increase in comparative rental equipment dollar utilization was the net result of ~~the~~an increase in rental equipment time utilization, combined with a decrease in equipment rental rates as noted ~~above, combined with a decrease in rental equipment time utilization.~~above. Rental equipment time utilization as a percentage of original equipment cost was approximately ~~63.8%~~68.3% for the three month period ended ~~September~~June 30, ~~2020~~2021 compared to ~~71.4%~~59.5% in the three month period ended ~~September~~June 30, ~~2019, a decrease~~2020, an increase of ~~7.6%~~8.8%. The ~~decrease~~increase in rental equipment time utilization as a percentage of original equipment cost was largely due to increased demand during the ~~effects of the COVID-19 pandemic~~current year compared to COVID-19’s impact on economic ~~activity.~~activity during the prior year.

Rentals ~~Other:~~Other. Our rentals other ~~revenues~~revenue consists primarily of equipment support activities that we provide to customers in connection with renting equipment, such as hauling charges, damage waiver policies, environmental and other recovery fees. Rental other revenues for the three month period ended ~~September~~June 30, ~~2020~~2021 were ~~$16.4~~$18.7 million compared to ~~$19.3~~$15.0 million for the three month period ended ~~September~~June 30, ~~2019, a decrease~~2020, an increase of ~~$2.9~~$3.7 million, or ~~15.0%~~24.8%, primarily due to the ~~decrease~~increase in equipment rental revenues as described above.

New Equipment Sales Revenues. Our new equipment sales for the three month period ended ~~September~~June 30, ~~2020 decreased $27.8~~2021 increased $6.0 million, or ~~42.7%~~13.6%, to ~~$37.2~~$49.9 million from ~~$65.0~~$43.9 million for the three month period ended ~~September~~June 30, ~~2019.~~2020. This ~~decrease~~increase was largely due to ~~a $21.6~~an $8.2 million ~~decrease~~increase in new crane sales ~~reflecting continuing uncertainty related to oil and gas prices, a $5.4 million decrease in material handling equipment sales~~ and a ~~$4.3~~$3.7 million increase in other new equipment sales. These increases were partially offset by a $4.6 million decrease in new earthmoving equipment sales ~~reflecting the uncertainty surrounding the COVID-19 pandemic. These decreases were partially offset by~~and a ~~$4.0~~$0.9 million ~~increase~~decrease in new ~~other~~aerial work platform equipment sales.

Used Equipment Sales Revenues. Our used equipment sales increased ~~$8.8~~$7.3 million, or ~~28.3%~~21.6%, to ~~$40.0~~$41.4 million for the three month period ended ~~September~~June 30, ~~2020,~~2021, from ~~$31.2~~$34.0 million for the same three month period in ~~2019. This increase in used equipment sales reflects some downsizing of our rental fleet in response to COVID-19's impact on rental demand combined with improved customer demand for used equipment.~~2020. This increase was driven by a ~~$3.9 million increase in used earthmoving equipment sales, a $1.7 million increase in used crane sales, a $1.5~~$4.0 million increase in used material handling equipment sales, a ~~$0.9 million increase in used other equipment sales and a $0.8~~$3.4 million increase in used aerial work platform equipment sales and a $2.0 million increase in used crane equipment sales, which was partially offset by a $2.0 million decrease in used earthmoving equipment sales.

Parts Sales Revenues. Our parts sales revenues for the three month period ended ~~September~~June 30, ~~2020 decreased $3.6~~2021 increased $1.2 million, or ~~11.6%~~4.6%, to ~~$27.9~~$27.4 million from approximately ~~$31.5~~$26.2 million for the same three month period last year. The ~~decrease~~increase in parts sales was attributable to ~~decreases~~increases across all equipment parts ~~sales.~~sales, with the exception of aerial work platform parts sales which decreased.

Services Revenues. Our services revenues for the three month period ended ~~September~~June 30, ~~2020~~2021 decreased ~~$2.5~~$0.7 million, or ~~13.6%~~4.3%, to ~~$15.6~~$15.0 million from ~~$18.1~~$15.7 million for the same three month period last year. The decrease ~~in service revenues was attributable~~is primarily due to decreases ~~across all equipment~~in aerial work platform and other services revenues.

Non-Segmented Other Revenues. Our non-segmented other revenues relate to equipment support activities that we provide to customers in connection with new and used equipment sales and parts and services revenues and are not generally allocated to reportable segments. For the three month period ended ~~September~~June 30, ~~2020,~~2021, our other revenues were approximately ~~$2.7~~$3.0 million, ~~a decrease~~an increase of ~~$0.4~~$0.3 million, or ~~13.0%~~12.7%, from ~~$3.1~~$2.7 million in the same three month period in ~~2019.~~2020.

	Three Months Ended						Total			Total			Three Months Ended				Total			Total
	September 30,						Dollar			Percentage			June 30,				Dollar			Percentage
	2020			2019			Increase (Decrease)			Increase (Decrease)			2021		2020		Increase (Decrease)			Increase (Decrease)
	(in thousands, except percentages)												(in thousands, except percentages)
Segment Gross Profit:
Equipment rentals
Rentals	$	65,712		$	93,843		$	(28,131	)		(30.0	)%	$	73,881	$	58,356	$	15,525			26.6	%
Rentals other		(390	)		715			(1,105	)		(154.5	)%		7		792		(785	)		(99.1	)%
Total equipment rentals		65,322			94,558			(29,236	)		(30.9	)%		73,888		59,148		14,740			24.9	%
New equipment sales		4,124			7,535			(3,411	)		(45.3	)%		5,743		4,688		1,055			22.5	%
Used equipment sales		12,128			9,771			2,357			24.1	%		14,350		10,731		3,619			33.7	%
Parts sales		6,928			8,328			(1,400	)		(16.8	)%		7,068		6,868		200			2.9	%
Services revenues		10,439			12,207			(1,768	)		(14.5	)%		10,188		10,484		(296	)		(2.8	)%
Non-Segmented revenues gross profit (loss)		126			(271	)		397			146.5	%
Non-segmented revenues gross profit														128		151		(23	)		(15.2	)%
Total gross profit	$	99,067		$	132,128		$	(33,061	)		(25.0	)%	$	111,365	$	92,070	$	19,295			21.0	%

Total Gross Profit. Our total gross profit was ~~$99.1~~$111.4 million for the three month period ended ~~September~~June 30, ~~2020~~2021 compared to ~~$132.1~~$92.1 million for the same three month period in ~~2019, a decrease~~2020, an increase of ~~$33.1~~$19.3 million, or ~~25.0%~~21.0%. Total gross profit margin for the three month period ended ~~September~~June 30, ~~2020~~2021 was approximately ~~34.2%~~35.3%, ~~a decrease~~an increase of ~~3.2%~~2.2% from the ~~37.4%~~33.1% gross profit margin for the same three month period in ~~2019.~~2020. Gross profit and gross margin for all reportable segments and non-segmented other revenues are further described below:

Equipment Rentals Gross Profit. Our total gross profit from equipment rentals for the three month period ended ~~September~~June 30, ~~2020 decreased~~2021 increased approximately ~~$29.2~~$14.7 million, or ~~30.9%~~24.9%, to ~~$65.3~~$73.9 million from ~~$94.6~~$59.1 million in the same three month period in ~~2019.~~2020. Total gross profit margin from equipment rentals for the three month periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 was approximately ~~39.4%~~41.3% and ~~46.3%~~38.0%, respectively, ~~a decrease~~an increase of ~~6.9%~~3.3%. See Rentals and Rentals Other below for additional information.

Rentals: Rental revenues gross profit ~~decreased $28.1~~increased $15.5 million, or ~~30.0%~~26.6%, to ~~$65.7~~$73.9 million for the three month period ended ~~September~~June 30, ~~2020~~2021 compared to ~~$93.8~~$58.4 million for the same three month period in ~~2019.~~2020. The gross profit ~~decrease~~increase was the result of a ~~$35.4~~$19.5 million ~~decrease~~increase in ~~equipment~~ rental revenues for the three month period ended ~~September~~June 30, ~~2020~~2021 compared to the same period last year ~~which was partially offset by~~and a ~~$5.0~~$0.8 million decrease in rental equipment depreciation expense, ~~and~~which was partially offset by a ~~$2.3~~$4.8 million ~~decrease~~increase in rental expenses. ~~The decreases in both depreciation expense and rental expenses are primarily due to a smaller fleet size in 2020 compared to 2019.~~ The original acquisition cost of our rental fleet at ~~September~~June 30, ~~2020~~2021 decreased ~~$154.5~~$40.7 million, or ~~7.8%~~2.2%, from ~~September~~June 30, ~~2019.~~2020.

Gross profit margin on ~~equipment~~ rentals for the three month periods ended ~~September~~June 30, 2021 and June 30, 2020 ~~and 2019~~ was approximately ~~44.0%~~46.1% and ~~50.8%~~41.5%, respectively. Depreciation expense was ~~38.9%~~36.4% of ~~equipment~~ rental revenues for the three month period ended ~~September~~June 30, ~~2020~~2021 compared to ~~34.1%~~42.0% for the same period in ~~2019, an~~2020, a decrease of 5.6%. The decrease in depreciation expense as a percentage of rental revenues are largely due to the increase ~~of 4.7%.~~in revenues in 2021 as compared to the same period in 2020. As a percentage of revenues, rental expenses were ~~17.2%~~17.5% for the three month period ended ~~September~~June 30, ~~2020~~2021 compared to ~~15.1%~~16.5% for the same period last year, an increase of ~~2.1%~~1.0%. These increases in depreciation expense and rental expenses as a percentage of equipment rental revenues are largely due to the current period decline in rental revenues as compared to the same period last year.

Rentals Other: Our rentals other ~~revenues~~revenue consists primarily of equipment support activities that we provide to customers in connection with renting equipment, such as hauling charges, damage waiver policies, environmental and other recovery fees. Rental other revenues gross ~~loss~~profit for the three month period ended ~~September~~June 30, ~~2020~~2021 was ~~$0.4~~less than $0.1 million compared to ~~a gross profit of $0.7~~$0.8 million for the same period in ~~2019,~~2020, a decrease of ~~$1.1~~$0.8 million. ~~Gross loss~~There was no gross profit margin ~~was 2.4%~~ for the three month period ended ~~September~~June 30, ~~2020~~2021 compared to ~~a gross profit margin of 3.7%~~5.3% for the same period last ~~year, a decrease of 6.1%.~~year.

New Equipment Sales Gross Profit. Our new equipment sales gross profit for the three month period ended ~~September~~June 30, ~~2020 decreased $3.4~~2021 increased $1.1 million, or ~~45.3%~~22.5%, to ~~$4.1~~$5.7 million compared to ~~$7.5~~$4.7 million for the same three month period in ~~2019~~2020 on a total new equipment sales ~~decrease~~increase of ~~$27.8~~$6.0 million. Gross profit margin on new equipment sales was ~~11.1%~~11.5% for the three month period ended ~~September~~June 30, ~~2020,~~2021, compared to ~~11.6%~~10.7% for the same period last year, ~~a decrease~~an increase of ~~0.5%~~0.8%. The ~~decrease~~increase in gross profit margin was primarily due to the mix of new equipment sold and ~~lower~~improving gross margins on new ~~aerial work platform~~ equipment ~~and new crane~~ sales.

Used Equipment Sales Gross Profit. Our used equipment sales gross profit for the three month period ended ~~September~~June 30, ~~2020~~2021 increased ~~$2.4~~$3.6 million, or ~~24.1%~~33.7%, to ~~$12.1~~$14.4 million from ~~$9.8~~$10.7 million in the same period in ~~2019~~2020 on a used equipment sales increase of ~~$8.8~~$7.3 million. Gross profit margin on used equipment sales for the three month period ended ~~September~~June 30, ~~2020~~2021 was approximately ~~30.3%~~34.7%, ~~down 1.0%~~up 3.1% from ~~31.3%~~31.6% for the same three month period in ~~2019,~~2020. This increase was primarily as a result of the mix of used equipment ~~sold.~~sold combined with the improved gross margins on the sale of used aerial work platforms, earthmoving and material handling equipment. Our used equipment sales from the rental fleet, which comprised ~~92.6%~~88.3% and ~~88.0%~~90.3% of our used equipment sales for the three month periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively, were approximately ~~147.2%~~161.3% and ~~153.3%~~153.2% of net book value for the three month periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

Parts Sales Gross Profit. Our parts sales gross profit for the three month period ended ~~September~~June 30, ~~2020~~2021 was approximately ~~$6.9~~$7.1 million, ~~a decrease~~an increase of ~~$1.4~~$0.2 million, or ~~16.8%~~2.9%, from gross profit of ~~$8.3~~$6.9 million for the same period last year on a parts sales ~~decrease~~increase of ~~$3.6~~$1.2 million. Gross profit margin for the three month period ended ~~September~~June 30, ~~2020~~2021 was ~~24.9%~~25.8%, a decrease of ~~1.5%~~0.4%, compared to a gross margin of ~~26.4%~~26.2% for the three month period ended ~~September~~June 30, ~~2019.~~2020. The decrease in parts sales gross margin is due to the mix of parts sold.

Services Revenues Gross Profit. For the three month period ended ~~September~~June 30, ~~2020,~~2021, our services revenues gross profit decreased ~~$1.8~~$0.3 million, or ~~14.5%~~2.8%, to approximately ~~$10.4~~$10.2 million from ~~$12.2~~$10.5 million for the same three month period in ~~2019~~2020 on a ~~$2.5~~$0.7 million decrease in services revenues. Gross profit margin for the three month period ended ~~September~~June 30, ~~2020~~2021 was ~~66.8%~~68.0%, a decrease of ~~0.6%~~1.0% from approximately ~~67.4%~~67.0% in the same three month period in ~~2019,~~2020, as a result of services revenues mix.

Non-Segmented Other Revenues Gross ~~Profit (Loss).~~Profit. Our non-segmented other revenues relate to equipment support activities that we provide to customers in connection with new and used equipment sales and parts and services revenues and are not generally allocated to reportable segments. For the three month period ended ~~September~~June 30, ~~2020,~~2021, our other revenues gross profit was approximately $0.1 million compared to a gross ~~loss~~profit of ~~$0.3~~$0.2 million in the same period in ~~2019, an increase~~2020, a decrease of ~~$0.4~~$0.1 million.

Selling, General and Administrative Expenses (“SG&A”). SG&A expenses ~~decreased $7.3~~increased $9.1 million, or ~~9.4%~~13.5%, to ~~$70.0~~$77.0 million for the three month period ended ~~September~~June 30, ~~2020~~2021 compared to ~~$77.3~~$67.9 million for the three month period ended ~~September~~June 30, ~~2019.~~2020. Employee salaries, wages, payroll taxes and related employee benefit and other employee related expenses ~~decreased $5.6~~increased $9.0 million, primarily as a result of ~~lower~~higher commissions and incentive pay combined with headcount ~~reductions~~increases and ~~reduced~~increased employee hours in ~~response to COVID-19’s~~rebounding from the impact toof the COVID-19 pandemic on our business. ~~Bad debt expense decreased $1.0 million. Legal and professional fees, promotional~~Facility rent expenses and ~~supplies~~repairs and maintenance costs ~~decreased $0.3 million, $0.3 million and $0.7 million, respectively, due to additional cost-saving measures. Non-facility rental expenses decreased $0.5~~increased $0.9 million. Partially offsetting these ~~decreases~~increases was a ~~$1.0~~$1.1 million ~~increase~~and $0.9 million decrease in liability insurance ~~costs.~~costs and bad debt expense, respectively.

Approximately ~~$1.3~~$3.2 million of the total increase in SG&A expenses was attributable to branches opened since ~~July~~January 1, ~~2019~~2020 with less than three months of comparable operations in either or both of the three month periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019.~~2020. SG&A expenses as a percentage of total revenues for both the three month periods ended ~~September~~June 30, 2021 and 2020 ~~and 2019~~ were ~~24.2% and 21.9%, respectively.~~24.4%.

Gain on Sales of Property & Equipment (Net). We had net gains on sales of property and equipment of ~~$2.1~~$0.7 million for the three month period ended ~~September~~June 30, ~~2020~~2021 compared to ~~$0.7~~$2.9 million for the same period last year, ~~an increase~~a decrease of ~~$1.4~~$2.2 million. This ~~increase~~decrease is primarily due to ~~gains~~a prior year gain on ~~the sale of~~a company-owned closed property ~~and equipment~~ in the normal course of business.

Other Income (Expense). For the three month period ended ~~September~~June 30, ~~2020,~~2021, our net other expenses decreased approximately ~~$2.8~~$2.3 million to ~~$13.9~~$12.6 million compared to ~~$16.8~~$14.9 million for the same three month period in ~~2019,~~2020, primarily as a result of lower interest expense. Interest expense decreased ~~$2.4~~$2.1 million to ~~$14.9~~$13.4 million for the three month period ended ~~September~~June 30, ~~2020~~2021 compared to ~~$17.3~~$15.6 million for the same period last year. ~~The~~This decrease inwas the result of lower interest expense ~~was due primarily to a decrease in~~on our ~~average~~Credit Facility as we had no borrowings under the Credit Facility ~~for~~during the ~~three month period ended September 30, 2020 compared to~~second quarter of 2021 and lower interest expense on our senior unsecured notes, resulting from the ~~same period last year.~~Company’s refinancing of its senior unsecured notes in the fourth quarter of 2020.

Income Taxes. We recorded income tax expense of ~~$7.0~~$6.0 million for the three month period ended ~~September~~June 30, ~~2020~~2021 compared to income tax expense of ~~$10.3~~$3.2 million for the three month period ended ~~September~~June 30, ~~2019.~~2020. Our effective income tax rate for the three month period ended ~~September~~June 30, ~~2020~~2021 was ~~40.9%~~27.5% compared to ~~26.7%~~26.9% for the same period in ~~2019. The increase in the effective tax rate was primarily due to unfavorable permanent differences in the current year period in relation to profit before tax.~~

On March 27, 2020, President Trump signed into law the “Coronavirus Aid, Relief, and Economic Security Act” (“CARES Act”). The income tax related provisions of the CARES Act did not have a material impact to our recorded income tax expense for the three month period ended September 30, 2020. See note 11 in this Quarterly Report on Form 10-Q for a discussion of the CARES Act’s favorable cash impact to our liquidity. We are continuing to evaluate any further impact that the CARES Act may have on the Company's future operations, financial position, and liquidity.

~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 Compared to the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020

	Nine Months Ended				Total			Total			Six Months Ended				Total			Total
	September 30,				Dollar			Percentage			June 30,				Dollar			Percentage
	2020		2019		Increase (Decrease)			Increase (Decrease)			2021		2020		Increase (Decrease)			Increase (Decrease)
	(in thousands, except percentages)										(in thousands, except percentages)
Segment Revenues:
Equipment rentals
Rentals	$	448,817	$	518,294	$	(69,477	)		(13.4	)%	$	300,240	$	299,394	$	846			0.3	%
Rentals other		47,345		54,269		(6,924	)		(12.8	)%		35,021		30,919		4,102			13.3	%
Total equipment rentals		496,162		572,563		(76,401	)		(13.3	)%		335,261		330,313		4,948			1.5	%
New equipment sales		112,068		177,709		(65,641	)		(36.9	)%		87,664		74,820		12,844			17.2	%
Used equipment sales		105,231		96,942		8,289			8.6	%		83,124		65,231		17,893			27.4	%
Parts sales		83,842		93,798		(9,956	)		(10.6	)%		53,036		55,989		(2,953	)		(5.3	)%
Services revenues		48,116		50,398		(2,282	)		(4.5	)%		29,487		32,479		(2,992	)		(9.2	)%
Non-Segmented revenues		8,099		8,822		(723	)		(8.2	)%		5,636		5,426		210			3.9	%
Total revenues	$	853,518	$	1,000,232	$	(146,714	)		(14.7	)%	$	594,208	$	564,258	$	29,950			5.3	%

Total Revenues. Our total revenues were approximately ~~$853.5~~$594.2 million for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 compared to ~~$1.0 billion~~$564.3 million for the ~~nine~~six month period ended ~~September~~June 30, ~~2019, a decrease~~2020, an increase of ~~$146.7~~30.0 million, or ~~14.7%~~5.3%. Our total revenues in 2021 were adversely impacted by inclement weather during February 2021 and decreased comparative demand from the impact of the COVID-19 economic downturn in the first half of the first quarter of 2021. Revenues for all reportable segments and non-segmented other revenues are further discussed below.

Equipment Rental Revenues. Our total revenues from equipment rentals for the ~~nine~~six month period ended ~~September~~June 30, ~~2020 decreased $76.4~~2021 increased $4.9 million, or ~~13.3%~~1.5%, to ~~$496.2~~$335.3 million from ~~$572.6~~$330.3 million in the ~~nine~~six month period ended ~~September~~June 30, ~~2019.~~2020. The ~~decrease~~increase in equipment rental revenues was largely due to ~~decreased~~increased demand ~~from~~compared to the prior year impact ~~from~~of the COVID-19 economic downturn.

~~Rentals~~Rentals.: Rental revenues ~~decreased $69.5~~increased $0.8 million, or ~~13.4%~~0.3%, to ~~$448.8~~$300.2 million for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 compared to ~~$518.3~~$299.4 million for the ~~nine~~six month period ended ~~September~~June 30, ~~2019.~~2020. Rental revenues from ~~aerial work platform~~earthmoving equipment ~~decreased $27.8~~increased $3.5 million and other equipment increased $1.3 million. Partially offsetting these rental revenues increases were decreases on crane equipment of $3.8 million and material handling equipment ~~decreased $14.7 million, earthmoving equipment decreased $9.2 million, other rental equipment decreased $9.4 million and crane equipment decreased $3.7~~of $0.3 million. ~~These product line equipment rental revenue fluctuations do not include the impact of legacy WRI equipment rental revenues of approximately $4.7 million for the prior year period.~~

Our average rental rates ~~based on the American Rental Association’s calculation methodology,~~ for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 decreased ~~2.2%~~2.3% compared to the same period last year. ~~Our average rental rates do not include the impact~~As noted above, extreme winter weather in February 2021 resulted in temporary branch closures in approximately 40% of ~~legacy WRI equipment rental revenues~~our locations for ~~February through April 2019.~~ up to one week.

Rental equipment dollar utilization (annual rental revenues divided by the average original rental fleet equipment costs) for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 was ~~31.7%~~33.6% compared to ~~36.4%~~31.4% in the ~~nine~~six month period ended ~~September~~June 30, ~~2019, a decrease~~2020, an increase of ~~4.7%~~2.2%. The ~~decrease~~increase in comparative rental equipment dollar utilization was the net result of an increase in rental equipment time utilization and the decrease in equipment rental rates as noted ~~above and a decrease in rental equipment time utilization.~~above. Rental equipment time utilization as a percentage of original equipment cost was approximately ~~62.5%~~65.9% for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 compared to ~~70.9%~~61.9% in the ~~nine~~six month period ended ~~September~~June 30, ~~2019, a decrease~~2020, an increase of ~~8.4%~~4.0%. The ~~decrease~~increase in rental equipment time utilization as a percentage of original equipment cost was largely due to the ~~decrease~~increase in demand ~~due~~as opposed to the economic downturn surrounding the COVID-19 ~~pandemic.~~pandemic in the prior year.

Rentals ~~Other:~~Other. Our rentals other ~~revenues~~revenue consists primarily of equipment support activities that we provide to customers in connection with renting equipment, such as hauling charges, damage waiver policies, environmental and other recovery fees. Rental other revenues for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 were ~~$47.3~~$35.0 million compared to ~~$54.3~~$30.9 million for the ~~nine~~six month period ended ~~September~~June 30, ~~2019, a decrease~~2020, an increase of ~~$6.9~~$4.1 million, or ~~12.8%, primarily due to the decreases in equipment rental revenues as described above.~~13.3%.

New Equipment Sales Revenues. Our new equipment sales for the ~~nine~~six month period ended ~~September~~June 30, ~~2020 decreased $65.6~~2021 increased $12.8 million, or ~~36.9%~~17.2%, to ~~$112.1~~$87.7 million from ~~$177.7~~$74.8 million for the ~~nine~~six month period ended ~~September~~June 30, 2019. This decrease, as noted below, was driven primarily by decreased sales of new cranes from continuing uncertainty related to oil and gas prices, and decreases in sales of our other product lines as customers have delayed, and in some cases, canceled large capital purchases due to the uncertainty surrounding the COVID-19 pandemic.2020. Sales of new cranes ~~decreased $44.6~~increased $14.2 million and other equipment increased $4.8 million. Sales of new earthmoving equipment, new material handling equipment ~~decreased $10.6 million~~ and ~~new earth moving equipment sales decreased $7.7 million. Sales of~~ new aerial work platform equipment ~~sales and new other equipment sales~~ decreased ~~$1.8~~$4.6 million, $0.9 million and ~~$0.9~~$0.6 million, respectively.

Used Equipment Sales Revenues. Our used equipment sales increased ~~$8.3~~$17.9 million, or ~~8.6%~~27.4%, to ~~$105.2~~$83.1 million for the ~~nine~~six month period ended ~~September~~June 30, ~~2020,~~2021, from approximately ~~$96.9~~$65.2 million for the same ~~nine~~six month period in ~~2019. This increase in used equipment sales reflects some downsizing of our rental fleet in response to COVID-19's impact on rental demand combined with improved customer demand for used equipment.~~2020. Sales of used ~~earth moving equipment and used other~~material handling equipment increased ~~$9.9~~$8.4 million and ~~$2.5 million, respectively. Partially offsetting these increases were decreases~~sales of ~~sales in~~ used aerial work platform equipment ~~of $3.1 million and sales~~increased $6.3 million. Sales of used cranes, used other and used ~~material handling~~earthmoving equipment ~~decreased $0.5~~increased $1.9 million, $0.9 million and ~~$0.4~~$0.5 million, respectively.

Parts Sales Revenues. Our parts sales revenues for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 decreased ~~$10.0~~$3.0 million, or ~~10.6%~~5.3%, to ~~$83.8~~$53.0 million from ~~$93.8~~$56.0 million for the same ~~nine~~six month period last year. The decrease in parts sales was primarily attributable to decreases in crane and aerial work platform equipment parts ~~sales across all~~ product lines, reflecting ~~the COVID-19 impacts~~COVID-19’s remaining impact on our parts ~~business.~~business.

Services Revenues. Our services revenues for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 decreased ~~$2.3~~$3.0 million, or ~~4.5%~~9.2%, to approximately ~~$48.1~~$29.5 million from ~~$50.4~~$32.5 million for the same ~~nine~~six month period last ~~year,~~year. The decrease in service revenues was primarily ~~due~~attributable to ~~lower services revenues related to earthmoving equipment, aerial work platform equipment and material handling equipment.~~decreases across all product lines, which was partially offset by an increase in crane service revenues.

Non-Segmented Other Revenues. Our non-segmented other revenues relate to equipment support activities that we provide to customers in connection with new and used equipment sales and parts and services revenues and are not generally allocated to reportable segments. ~~Our~~For the six month periods ended June 30, 2021 and 2020, our non-segmented other revenues ~~decreased~~were approximately ~~$0.7~~$5.6 million ~~for the nine months period ended September 30, 2020 to $8.1~~and $5.4 million, ~~from $8.8~~respectively, an increase of $0.2 million, ~~for the same nine month period last year.~~or 3.9%.

	Nine Months Ended						Total			Total			Six Months Ended						Total			Total
	September 30,						Dollar			Percentage			June 30,						Dollar			Percentage
	2020			2019			Increase (Decrease)			Increase (Decrease)			2021			2020			Increase (Decrease)			Increase (Decrease)
	(in thousands, except percentages)												(in thousands, except percentages)
Segment Gross Profit:
Segment Gross Profit (Loss):
Equipment rentals
Rentals	$	197,131		$	256,971		$	(59,840	)		(23.3	)%	$	132,785		$	131,419		$	1,366			1.0	%
Rentals other		(502	)		1,527			(2,029	)		(132.9	)%		(433	)		(112	)		(321	)		(286.6	)%
Total equipment rentals		196,629			258,498			(61,869	)		(23.9	)%		132,352			131,307			1,045			0.8	%
New equipment sales		12,259			21,071			(8,812	)		(41.8	)%		10,046			8,135			1,911			23.5	%
Used equipment sales		33,639			33,200			439			1.3	%		27,751			21,511			6,240			29.0	%
Parts sales		21,662			25,048			(3,386	)		(13.5	)%		13,933			14,734			(801	)		(5.4	)%
Services revenues		32,205			34,137			(1,932	)		(5.7	)%		20,001			21,766			(1,765	)		(8.1	)%
Non-Segmented revenues gross profit (loss)		226			(1,345	)		1,571			116.8	%
Non-segmented revenues gross profit														285			100			185			185.0	%
Total gross profit	$	296,620		$	370,609		$	(73,989	)		(20.0	)%	$	204,368		$	197,553		$	6,815			3.4	%

Total Gross Profit. Our total gross profit was ~~$296.6~~$204.4 million for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 compared to ~~$370.6~~$197.6 million for the same ~~nine~~six month period in ~~2019, a decrease~~2020, an increase of ~~$74.0~~$6.8 million, or ~~20.0%~~3.4%. Total gross profit margin for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 was approximately ~~34.8%~~34.4%, a decrease of ~~2.3%~~0.6% from the ~~37.1%~~35.0% gross profit margin for the same ~~nine~~six month period in ~~2019.~~2020. Gross profit and gross margin for all reportable segments and non-segmented other revenues are further described below:

Equipment Rentals Gross Profit. Our total gross profit from equipment rentals for the ~~nine~~six month period ended ~~September~~June 30, ~~2020 decreased $61.9~~2021 increased $1.0 million, or ~~23.9%~~0.8%, to ~~$196.6~~$132.4 million from ~~$258.5~~$131.3 million in the same ~~nine~~six month period in ~~2019.~~2020. Total gross profit margin from equipment rentals for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 was approximately ~~39.6%~~39.5% compared to ~~45.1%~~39.8% for the same period in ~~2019,~~2020, a decrease of ~~5.5%~~0.3%. ~~See Rentals and Rentals Other below for additional information.~~

Rentals: Rental revenues gross profit ~~decreased $59.8~~increased $1.4 million, or ~~23.3%~~1.0%, to ~~$197.1~~$132.8 million for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 compared to ~~$257.0~~$131.4 million for the same ~~nine~~six month period in ~~2019.~~2020. The gross profit ~~decrease~~increase was the result of a ~~$69.5~~$0.8 million ~~decrease~~increase in ~~equipment~~ rental revenues for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 compared to the same period last year and a $5.5 million decrease in rental depreciation, which was partially offset by a ~~$4.4~~$4.9 million ~~decrease~~increase in rental ~~depreciation and a $5.2 million decrease in rental expenses~~expenses.

Gross profit margin on ~~equipment~~ rentals for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 was approximately ~~43.9%~~44.2% compared to ~~49.6%~~43.9% for the same period in ~~2019, a decrease~~2020, an increase of ~~5.7%~~0.3%. Depreciation expense was ~~39.5%~~37.9% of ~~equipment~~ rental revenues for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 compared to ~~35.0%~~39.8% for the same period in ~~2019, an increase~~2020, a decrease of approximately ~~4.5%~~1.9%. As a percentage of revenues, rental expenses were ~~16.6%~~17.9% for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 compared to ~~15.4%~~16.3% for the same period last year, an increase of approximately ~~1.2%~~1.6%. ~~These increases are primarily the result of decreases in rental revenues.~~

Rentals Other: Our rentals other ~~revenues~~revenue consists primarily of equipment support activities that we provide to customers in connection with renting equipment, such as hauling charges, damage waiver policies, environmental and other recovery fees. Rental other revenues gross loss for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 was ~~$0.5~~$0.4 million compared to gross ~~profit~~loss of ~~$1.5~~$0.1 million for the same period in ~~2019,~~2020, a decrease of ~~$2.0~~$0.3 million. Gross loss margin was ~~1.1%~~1.2% for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 compared to a gross ~~profit~~loss margin of ~~2.8%~~0.4% for the same period last year, a decrease of ~~3.9%~~0.8%.

New Equipment Sales Gross Profit. Our new equipment sales gross profit for the ~~nine~~six month period ended ~~September~~June 30, ~~2020 decreased $8.8~~2021 increased $1.9 million, or ~~41.8%~~23.5%, to ~~$12.3~~$10.0 million compared to approximately ~~$21.1~~$8.1 million for the same ~~nine~~six month period in ~~2019~~2020 on a total new equipment sales ~~decrease~~increase of ~~$65.6~~$12.8 million. Gross profit margin on new equipment sales was ~~10.9%~~11.5% for the ~~nine~~six month period ended ~~September~~June 30, ~~2020,~~2021, compared to ~~11.9%~~10.9% for the same period last year, ~~a decrease~~an increase of ~~1.0%~~0.6%. The ~~decrease~~increase in gross profit margin was primarily due to the mix of new equipment ~~sold combined with lower gross margins on new crane sales and new earthmoving equipment sales.~~sold.

Used Equipment Sales Gross Profit. Our used equipment sales gross profit for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 increased ~~$0.4~~$6.2 million, or ~~1.3%~~29.0%, to ~~$33.6~~$27.8 million from ~~$33.2~~$21.5 million in the same period in ~~2019~~2020 on a used equipment sales increase of ~~$8.3~~$17.9 million. Gross profit margin on used equipment sales for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 was approximately ~~32.0%~~33.4%, ~~down 2.2%~~up 0.4% from ~~34.2%~~33.0% for the same ~~nine~~six month period in ~~2019,~~2020, primarily as a result of the mix of used equipment sold and ~~lower~~higher used material handling equipment and used aerial work platform equipment ~~and used crane sales~~ gross margins. Our used equipment sales from the rental fleet, which comprised ~~92.0%~~90.6% and ~~91.9%~~91.6% of our used equipment sales for the ~~nine~~six month periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively, were approximately ~~152.0%~~156.1% and ~~158.2%~~155.1% of net book value for the ~~nine~~six month periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

Parts Sales Gross Profit. Our parts sales gross profit for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 was ~~$21.7~~$13.9 million, a decrease of ~~$3.4~~$0.8 million, or ~~13.5%~~5.4%, from gross profit of ~~$25.0~~$14.7 million for the same period last year on a parts sales decrease of ~~$10.0~~$3.0 million. Gross profit margin for both the ~~nine~~six month period ended ~~September~~June 30, 2021 and 2020 was ~~25.8% compared to 26.7% for the same period in 2019, a decrease of 0.9%, resulting from the mix of parts sold.~~26.3%.

Services Revenues Gross Profit. For the ~~nine~~six month period ended ~~September~~June 30, ~~2020,~~2021, our services revenues gross profit decreased ~~$1.9~~$1.8 million, or ~~5.7%~~8.1%, to ~~$32.2~~$20.0 million from ~~$34.1~~$21.8 million for the same ~~nine~~six month period in ~~2019~~2020 on a ~~$2.3~~$3.0 million decrease in services revenues. Gross profit margin for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 was ~~66.9%~~67.8%, ~~a decrease~~an increase of 0.8% from approximately ~~67.7%~~67.0% in the same ~~nine~~six month period in ~~2019,~~2020, as a result of services revenues mix.

Non-Segmented Other Revenues Gross ~~Loss.~~Profit. Our non-segmented other revenues relate to equipment support activities that we provide to customers in connection with new and used equipment sales and parts and services revenues and are not generally allocated to reportable segments. For the ~~nine~~six month period ended ~~September~~June 30, ~~2020,~~2021, our other revenues gross profit was ~~$0.2~~$0.3 million compared to a gross ~~loss~~profit of ~~$1.3~~$0.1 million in the same period in ~~2019.~~2020, an increase of $0.2 million.

Selling, General and Administrative Expenses (“SG&A”). SG&A expenses ~~decreased $16.3~~increased $3.5 million, or ~~7.0%~~2.4%, to ~~$217.5~~$151.0 million for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 compared to ~~$233.8~~$147.5 million for the ~~nine~~six month period ended ~~September~~June 30, ~~2019.~~2020. Employee salaries, wages, payroll taxes and related employee benefit and other employee related expenses ~~decreased $17.2~~increased $5.6 million, primarily as a result of ~~lower commissions and~~higher incentive pay combined with increased headcount ~~reductions~~ and ~~reduced~~increased employee hours in ~~response to COVID-19’s~~rebounding from the impact toof the COVID-19 pandemic on our business. ~~Supplies cost decreased $1.8 million~~Facility rent expenses and ~~promotional expenses decreased $1.1 million. Non-facility rental expenses decreased $1.0 million. Facility~~repairs and maintenance costs ~~including fuel and utilities costs, decreased $0.3 million and bad debt expense decreased $0.5~~increased $1.2 million. These ~~decreases~~increases were partially offset by a ~~$4.6~~$2.3 million decrease in bad debt expense and a $1.9 million decrease in liability insurance costs. Legal and professional fees decreased $0.3 million, offset by a $1.0 million increase in ~~liability insurance costs, a $0.8 million increase in legal and professional fees and a $0.8 million increase in depreciation and amortization expense.~~our litigation accrual.

Approximately ~~$2.8~~$5.5 million of the total increase in SG&A expenses was attributable to branches opened since January 1, ~~2019~~2020 with less than ~~nine~~six months of comparable operations in either or both of the ~~nine~~six month periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019.~~2020. SG&A expenses as a percentage of total revenues for the ~~nine~~six month periods ended ~~September~~June 30, 2021 and 2020 were 25.4% and ~~2019 were 25.5% and 23.4%~~26.1%, respectively.

Impairment of Goodwill. Impairment of goodwill incurred in the ~~nine~~six month period ended ~~September~~June 30, 2020 was $62.0 million. The impairment was related to one of our six reporting units, Equipment Rental Component 2, during the first quarter of 2020. There was no impairment of goodwill for the ~~nine~~six month period ended ~~September~~June 30, ~~2019.~~2021. See note 2 to the consolidated financial statements for additional information.

Gain on Sales of Property & Equipment (Net). We had net gains on sales of property and equipment of ~~$9.3~~$0.8 million for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 compared to ~~approximately $2.3~~$7.2 million for the same period last year, ~~an increase~~a decrease of ~~$6.9~~$6.3 million. This ~~increase~~decrease is primarily due to a prior year gain on a sale-leaseback transaction in the first quarter of 2020 and a prior year gain on a company-owned closed branch location in the second quarter of ~~2020 and gains on sales during the normal course of business in the third quarter of~~ 2020.

Other Income (Expense). For the ~~nine~~six month period ended ~~September~~June 30, ~~2020,~~2021, our net other expenses decreased approximately ~~$5.6~~$4.9 million to ~~$44.2~~$25.4 million compared to ~~$49.8~~$30.3 million for the same ~~nine~~six month period in ~~2019,~~2020, primarily as a result of lower interest expense. Interest expense decreased approximately ~~$5.0~~$4.7 million to ~~$46.5~~$26.9 million for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 compared to ~~$51.5~~$31.6 million for the same period last year. ~~The~~This decrease inwas the result of lower interest expense ~~was due primarily to a decrease in~~on our ~~average~~Credit Facility as we had no borrowings under the Credit Facility ~~for~~during the ~~nine month period ended September 30, 2020 compared to~~first quarter of 2021 and lower interest expense on our senior unsecured notes, resulting from the ~~same period last year.~~Company’s refinancing of its senior unsecured notes in the fourth quarter of 2020.

Income Taxes. We recorded an income tax ~~benefit~~expense of ~~$0.1~~$7.5 million for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 compared to an income tax ~~expense~~benefit of ~~$23.7~~$7.1 million for the ~~nine~~six month period ended ~~September~~June 30, ~~2019.~~2020. Our effective income tax rate for the ~~nine~~six month period ended ~~September~~June 30, ~~2020~~2021 was ~~0.7%~~27.4% compared to ~~26.7%~~20.1% for the same period in ~~2019.~~2021. The ~~decrease~~increase in our effective tax rate is primarily due to the net change in permanent differences in relation to profit before tax. Our rate for the ~~nine~~six month period ended ~~September 20,~~June 30, 2020 includes the impact of ~~22.8%~~1.6% related to nondeductible goodwill impairment.

On March 27, 2020, President Trump signed into law the CARES Act. The income tax related provisions of the CARES Act did not have a material impact to our recorded income tax benefit for the nine month period ended September 30, 2020. See note 11 to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for a discussion of the CARES Act’s favorable cash impact to our liquidity. We are continuing to evaluate any further impact that the CARES Act may have on the Company's future operations, financial position, and liquidity.

Based on available evidence, both positive and negative, we believe it is more likely than not that our federal deferred tax assets at ~~September~~June 30, ~~2020~~2021 are fully realizable through future reversals of existing taxable temporary differences and future taxable ~~income, and are~~income. For the six months ended June 30, 2021, we have a valuation allowance of $6.4 million for certain state tax credits that may not ~~subject to any limitations.~~be realized.

Cash flow from operating activities. For the ~~nine~~six month period ended ~~September~~June 30, ~~2020,~~2021, the net cash provided by our operating activities was approximately ~~$217.1~~$80.5 million. Our reported net ~~loss~~income of ~~$18.1~~$19.9 million, when adjusted for non-cash income and expense items, such as depreciation and amortization, deferred income taxes, net amortization (accretion) of note discount, ~~(premium),~~ provision for losses on accounts receivable, ~~impairment of goodwill,~~ provision for inventory obsolescence, stock-based compensation expense and net gains on the sale of long-lived assets, provided positive cash flows of ~~$221.3~~$139.5 million. These cash flows from operating activities were also positively impacted by a ~~$21.3~~$7.6 million decrease in ~~receivables~~accounts receivable and ~~an $11.5~~a $23.8 million increase in accounts payable. Partially offsetting these positive cash flows were a ~~$7.7~~$73.7 million increase in inventories, a ~~$13.6 million decrease in manufacturing flooring plans payable, a $1.4~~$7.1 million increase in prepaid expenses and other assets, a $2.3 million decrease in manufacturing flooring plans payable, and a ~~$14.5~~$7.3 million decrease in accrued ~~expenses~~expense payable and other liabilities.

For the ~~nine~~six month period ended ~~September~~June 30, ~~2019,~~2020, the net cash provided by our operating activities was approximately ~~$207.6~~$160.5 million. Our reported net ~~income~~loss of ~~$65.3~~$28.2 million, when adjusted for non-cash income and expense items, such as depreciation and amortization, deferred income taxes, net amortization (accretion) of note discount (premium), provision for losses on accounts receivable, provision for inventory obsolescence, stock-based compensation expense, impairment of goodwill and net gains on the sale of long-lived assets, provided positive cash flows of ~~$274.4~~$146.3 million. These cash flows from operating activities were also positively impacted by a ~~$2.3~~$42.8 million decrease in accounts receivable and a $14.1 million increase in ~~manufacturing flooring plans~~accounts payable. Partially offsetting these positive cash flows were a ~~$39.6~~$12.4 million increase in inventories, ~~a $16.9 million decrease in accounts payable, a $3.1~~an $8.5 million increase in prepaid expenses and other assets, ~~$7.5~~an $8.5 million decrease in manufacturing flooring plans payable, and a $13.3 million decrease in accrued ~~expenses~~expense payable and other ~~liabilities and a $2.0 increase in receivables.~~liabilities.

Cash flow from investing activities. For the ~~nine~~six month period ended ~~September~~June 30, 2021, our net cash used in our investing activities was approximately $168.3 million. Purchases of rental and non-rental equipment were $244.7 million and proceeds from the sale of rental and non-rental equipment were $76.4 million.

For the six month period ended June 30, 2020, our net cash provided by our investing activities was approximately ~~$10.8~~$1.2 million. Purchases of rental and non-rental equipment were ~~$98.7~~$69.0 million and proceeds from the sale of rental and non-rental equipment were ~~$109.5~~$70.1 million.

Cash flow from financing activities. For the ~~nine~~six month period ended ~~September~~June 30, ~~2019,~~2021, our net cash provided by our ~~investing~~financing activities was exceeded by our cash used in our ~~investing~~financing activities, resulting in net cash used in our ~~investing~~financing activities of ~~approximately $315.2~~$20.6 million. ~~The acquisition of WRI totaled $106.7 million (net of cash acquired). Purchases of rental~~We netted borrowings and ~~non-rental equipment were $300.6 million and proceeds from~~payments under our Credit Facility for the ~~sale of rental and non-rental equipment were $92.2 million.~~

~~Cash flow from financing activities.~~ ~~For the nine~~six month period ended ~~September~~June 30, 2021. Dividends paid totaled $19.9 million, or $0.55 per common share. Treasury stock purchases totaled $0.4 million, payments of deferred financing costs were $0.1 million and finance lease principal payments were $0.1 million.

For the six month period ended June 30, 2020, our net cash provided by our financing activities was exceeded by our cash used in our financing activities, resulting in net cash used in our financing activities of ~~$230.1~~$169.6 million. Net payments under our Credit Facility for the ~~nine~~six month period ended ~~September~~June 30, 2020 were ~~$198.9~~$149.3 million and dividends paid totaled ~~$29.7~~$19.7 million, or ~~$0.825~~$0.55 per common share. Treasury stock purchases totaled ~~$1.4~~$0.5 million and finance lease principal payments were ~~$0.2~~$0.1 million.

On December 14, 2020, we completed the ~~nine month period ended September 30, 2019, net~~offering of our $1.25 billion, 3.875% senior unsecured notes due 2028 (the “New Notes”), and the settlement of a cash ~~provided by~~tender offer and redemption notice to repurchase or redeem all of our ~~financing activities was $101.5 million. Net borrowings under our Credit Facility for the three month period ended September 30, 2019 were $133.4~~previously outstanding $950 million, which was partially offset by dividends paid totaling $29.5 million, or $0.825 per common share. Payments of deferred financing costs were $0.6 million. Treasury stock purchases totaled $1.6 million and finance lease5.625% senior unsecured notes due 2025 (the “Old Notes”). No principal payments on the New Notes are due until their scheduled maturity date (December 15, 2028).

The New Notes were ~~$0.2 million.~~ issued by H&E Equipment Services, Inc. (the parent company) and are guaranteed by GNE Investments, Inc. and its wholly-owned subsidiaries Great Northern Equipment, Inc., H&E Equipment Services (California), LLC, H&E California Holding, Inc., H&E Equipment Services (Mid-Atlantic), Inc. and H&E Finance Corp (collectively, the guarantor subsidiaries). The guarantees, made on a joint and several basis, are full and unconditional (subject to subordination provisions and subject to a standard limitation which provides that the maximum amount guaranteed by each guarantor will not exceed the maximum amount that can be guaranteed without making the guarantee void under fraudulent conveyance laws). There are no restrictions on our ability to obtain funds from the guarantor subsidiaries by dividend or loan. There are no registration rights associated with the New Notes or the subsidiary guarantees.

We and our subsidiaries are parties to a $750.0 million Credit Facility with Wells Fargo Capital Finance, LLC as administrative agent, and the lenders named therein. At ~~September~~June 30, ~~2020,~~2021, we had ~~total~~no outstanding borrowings under the Credit Facility ~~of $18.0 million~~ and we could borrow up to ~~$724.3 million and remain in compliance with the debt covenants under the Credit Facility.~~$741.3 million. At ~~October 21, 2020,~~July 27, 2021, we had ~~$742.3~~$741.3 million of available borrowings under our Credit Facility, net of ~~a $7.7~~an $8.7 million outstanding letter of credit. We do not anticipate any near-term impacts to our liquidity under the Credit Facility as a result of the COVID-19 pandemic, nor do we anticipate any covenant violations related to the Credit ~~Facility. See also Cash Requirements Related to Operations below~~Facility.

Our principal sources of liquidity have been from cash provided by operating activities and the sales of new, used and rental fleet equipment, proceeds from the issuance of debt, and borrowings available under the Credit Facility. Our principal uses of cash historically have been to fund operating activities and working capital (including new and used equipment inventories), purchases of rental fleet equipment and property and equipment, fund payments due under facility operating leases and manufacturer flooring plans payable, and to meet debt service requirements. In the future, we may pursue additional strategic acquisitions and seek to open new start-up ~~locations, the frequency of which could be tempered depending on the depth and duration of the current COVID-19 pandemic.~~locations.

The amount of our future capital expenditures will depend on a number of factors including general economic conditions and growth prospects. In response to changing economic conditions, we believe we have the flexibility to modify our capital expenditures by adjusting them (either up or down) to match our actual performance. Our gross rental fleet capital expenditures for the ~~nine~~six month ~~periods~~period ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 were approximately ~~$101.7~~$246.1 million and ~~$307.4~~$73.9 million, respectively, including ~~$20.2~~$17.7 million and ~~$38.2~~$18.4 million, respectively, of non-cash transfers from new and used equipment to rental fleet ~~inventory, respectively.~~inventory. This increase in rental fleet capital expenditures reflects our response to improved rental demand in 2021 compared to the decrease in our rental fleet capital expenditures in response to COVID-19. Our gross property and equipment capital expenditures for the ~~nine~~six month ~~periods~~period ended ~~September~~June 30, 2021 and 2020 ~~and 2019~~ were ~~$17.3~~$16.2 million and ~~$31.5~~$13.5 million, respectively. The above comparative capital expenditures are reflective of the significant decreases in our capital expenditures as a result of the downturn in our business and continuing economic uncertainty related to COVID-19.

To service our debt, we will require a significant amount of cash. Our ability to pay interest and principal on our indebtedness (including the Credit Facility, the ~~Senior~~New Notes and our other indebtedness), will depend upon our future operating performance and the availability of borrowings under the Credit Facility and/or other debt and equity financing alternatives available to us, which will be affected by prevailing economic conditions and conditions in the global credit and capital markets, as well as financial, business and other factors, some of which are beyond our control. Based on our current level of operations and given the current state of the capital markets, we believe our cash flow from operations, available cash and available borrowings under the Credit Facility will be adequate to meet our future liquidity needs for the foreseeable future. At ~~December 31, 2019, March 31, 2020,~~ June 30, ~~2020 and September~~2021, we have cash on hand of approximately $202.5 million. At June 30, ~~2020,~~2021, we had available borrowings of ~~$525.4~~$741.3 million, ~~$557.3~~net of $8.7 million of outstanding letters of credit, compared to $674.7 million ~~and $724.3 million, respectively,~~at June 30, 2020, net of $7.7 million of outstanding letters of credit. ~~At October 21, 2020, we had $742.3 million of available borrowings under the Credit Facility, net of $7.7 million of outstanding letters of credit. These sequential improvements~~This improvement in the amounts we have available for borrowing under the Credit Facility ~~since December 31, 2019 are~~is substantially due to ~~the decrease in capital expenditures as noted~~increased cash management. At July 27, 2021, we had $741.3

inmillion of available borrowings under the ~~preceding paragraph.~~Credit Facility, net of an $8.7 million of outstanding letters of credit. We ~~expect to maintain capital expenditure discipline for the remainder of 2020, and as a result, we~~ do not expect our liquidity to be materially negatively impacted by the current COVID-19 pandemic.

On ~~August 11, 2020,~~May 14, 2021, the Company announced a quarterly dividend of $0.275 per share to stockholders of record, which was paid on ~~September 11, 2020,~~June 18, 2021, totaling approximately $9.9 million. The Company intends to continue to pay regular quarterly cash dividends; however, the declaration of any subsequent dividends is discretionary and will be subject to a final determination by the Board of Directors each quarter after its review of, among other things, business and market conditions.

There have been no material changes from the information included in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

~~Our earnings may be affected by~~There has been no significant changes in interest rates since interest expense on the Credit Facility is currently calculated based upon the index rate plus an applicable margin of 0.50% to 1.00%, depending on the Average Availability (as defined in the Credit Facility), in the case of index rate revolving loans and LIBOR plus an applicable margin of 1.25% to 1.75%, depending on the Average Availability (as defined in the Credit Facility), in the case of LIBOR revolving loans. At September 30, 2020, we had outstanding borrowings under the Credit Facility totaling $18.0 million. A 1.0% increase in the interest rate on the Credit Facility would result in an increase of approximately $0.2 million in interest expense on an annualized basis. At October 21, 2020, we had no borrowings outstanding, with $742.3 million of available borrowings, net of $7.7 million of outstanding letters of credit. We did not have significantour exposure to ~~changing interest rates as~~market risk during the three months ended June 30, 2021. For a discussion of ~~September 30, 2020~~our exposure to market risk, refer to Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” contained in our Annual Report on Form 10-K for the fixed-rate senior unsecured notes. Historically, we have not engaged in derivatives or other financial instruments for trading, speculative or hedging purposes, though we may do so from time to time if such instruments are available to us on acceptable terms and prevailing market conditions are accommodating.fiscal year ended December 31, 2020.

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

Our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively) have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a‑15(e) and 15d-15(e) promulgated under the ~~Securities~~ Exchange ~~Act of 1934, as amended)~~Act) as of the end of the period covered by this Quarterly Report on Form 10‑Q. Based on this evaluation, our principal executive officer and principal financial officer have concluded that, as of ~~September~~June 30, ~~2020,~~2021, our current disclosure controls and procedures were effective.

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

There were no changes in the Company’s internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) that occurred during the three month period ended ~~September~~June 30, ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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

We are exposed to various claims relating to our business, including those for which we retain portions of the losses through the application of deductibles and self-insured retentions, or self-insurance. Losses that exceed our deductibles and self-insured retentions are insured through various commercial lines of insurance policies. ~~On July 29, 2020, our excess insurance carrier agreed~~

We are involved in ~~principle to settle a contingent liability for $6.0 million related to a Company automobile liability claim, subject to Probate Court approval~~various other claims and legal actions arising in the ~~execution~~ordinary course of ~~a settlement agreement by~~business. In the ~~claimant and our excess insurance carrier. Our loss exposure related to this claim is limited to our insurance policy deductible per claim, which is immaterial to our consolidated statement~~opinion of ~~operations. As~~management, after consultation with legal counsel, the ultimate disposition of ~~the date of this Quarterly Report on Form 10-Q, the expected funding of the claim settlement has~~these various matters will not yet occurred. Pursuant to ASC 450, Contingencies, and other relevant guidance, when the contingency become both probable and estimable, our consolidated balance sheets should reflect a liability for the total amount of estimated claim and an asset for the portion of the claim recoverable through insurance. The gross-up presentation requirement for this claim, net of our insurance policy deductible per claim, is reflected in our condensed consolidated balance sheet and our condensed consolidated statement of cash flows in this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020.

We have a ~~contingent liability related to a wage and hour lawsuit in~~material adverse effect on the state of California. While the plaintiff’s counsel has not yet made a settlement demand in the matter, the parties have agreed to a mediation hearing in March 2021 in an attempt to reach an agreed-upon settlement in the matter. The claim is not subject to any insurance recoveries on our behalf. While it appears that a loss is probable in this matter, we cannot reasonably estimate the ultimate loss, or a range of ultimate losses, at this time. However, we do not currently expect that the ultimate loss in this matter will be material to ourCompany��s consolidated financial ~~statements.~~position, results of operations or liquidity.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, Item 1A — “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, which could materially affect our business, financial condition or future results.

As of the date of this Quarterly Report on Form 10-Q, ~~and other than the risk factors set forth below,~~ there have been no material changes ~~with respect to~~from the Company’s risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~

~~The COVID-19 pandemic has significantly impacted worldwide economic conditions and could have a material adverse effect on our operations and business.~~

The recent outbreak of coronavirus in China is spreading globally and has adversely affected economic conditions throughout the United States of America and the world, including in the primary regions we operate. Many State Governors have issued temporary Executive Orders that, among other stipulations, effectively prohibit in-person work activities for most industries and businesses, having the effect of suspending or severely curtailing operations. While we are considered an essential business pursuant to the various Executive Orders and our branch locations generally remain operational, if repercussions of the outbreak are prolonged, it could have a significant adverse impact to the underlying industries of some of our customers or in some or all of the primary markets in which we operate, including our customers in the oil and natural gas industry. The extent of the ultimate impact of the pandemic on the Company's operational and financial performance and liquidity will depend on various developments, including the duration and spread of the outbreak, governmental limitations on business operations generally, and its and their impact on potential customers, employees, and suppliers vendors and distribution partners, all of which are uncertain and cannot be reasonably predicted at this time. As we cannot predict the duration or scope of the COVID-19 pandemic, any resulting financial impact cannot be reasonably estimated at this time, but is anticipated to have a material adverse impact on our business, results of operations, financial condition and liquidity.

Our business could be adversely affected by declines in construction and industrial activities, or a downturn in the economy in general, which could lead to decreased demand for equipment, depressed equipment rental rates and lower sales prices, resulting in a decline in our revenues, gross margins and operating results.

Our equipment is principally used in connection with construction and industrial activities. Consequently, a downturn in construction or industrial activities, or the economy in general, may lead to a decrease in the demand for equipment or depress rental rates and the sales prices for our equipment. Our business may also be negatively impacted, either temporarily or long-term, by:

Weakness or deterioration in the non-residential construction and industrial sectors caused by these or other factors could have a material adverse effect on our financial position, results of operations and cash flows in the future and may also have a material adverse effect on residual values realized on the disposition of our rental fleet. Recently, in early 2020, oil prices and consumption decreased significantly and we believe the uncertainty regarding future oil prices and consumption may negatively impact customer capital expenditure decisions.

On August 1, 2020, 38,274 shares of non-vested stock that were issued in 2019 vested at $17.59 per share. Certain holders of those vested shares returned an aggregate of 13,915 shares of common stock to the Company during the quarter ended September 30, 2020 as payment for their respective withholding taxes. This resulted in an addition of 13,915 shares to treasury stock.

On August 1, 2020, 26,401 shares of non-vested stock that were issued in 2018 vested at $17.59 per share. Certain holders of those vested shares returned an aggregate of 9,665 shares of common stock to the Company during the quarter ended September 30, 2020 as payment for their respective withholding taxes. This resulted in an addition of 9,665 shares to treasury stock.

On August 1, 2020, 33,397 shares of non-vested stock that were issued in 2017 vested at $17.59 per share. Certain holders of those vested shares returned an aggregate of 12,301 shares of common stock to the Company during the quarter ended September 30, 2020 as payment for their respective withholding taxes. This resulted in an addition of 12,301 shares to treasury stock.

On August 14, 2020, 29,019 shares of non-vested stock that were issued in 2015 vested at $21.33 per share. The holder of these shares returned an aggregate of 12,870 shares of common stock to the Company during the quarter ended September 30, 2020 as payment for their respective withholding taxes. This resulted in an addition of 12,870 shares to treasury stock.None.

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

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

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


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share	HEES	Nasdaq Global Market

		Page
PART I. FINANCIAL INFORMATION		54

Item 1. Financial Statements:		54
Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2020~~2021 (Unaudited) and December 31, ~~2019~~2020		4
Condensed Consolidated Statements of Operations (Unaudited) for the Three and Six Months Ended June 30, 2021 and 2020		5
Condensed Consolidated Statements of ~~Operations~~Cash Flows (Unaudited) for the ~~Three and Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020		6
~~Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2020 and 2019~~		7
Notes to Condensed Consolidated Financial Statements (Unaudited)		98
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		3118
Item 3. Quantitative and Qualitative Disclosures About Market Risk		4531
Item 4. Controls and Procedures		4531

PART II. OTHER INFORMATION		4632

Item 1. Legal Proceedings		4632
Item 1A. Risk Factors		4632
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		4732
Item 3. Defaults upon Senior Securities		4732
Item 4. Mine Safety Disclosures		4732
Item 5. Other Information		4732
Item 6. Exhibits		4833

Signatures		4934

	Eq. Rental Comp. 1			Eq. Rental Comp. 2			New Eq. Sales			Used Eq. Sales			Parts Sales			Service Revenues			Total
Balance at December 31, 2018	$	34,297		$	42,536		$	10,434		$	8,461		$	8,910		$	1,205		$	105,843
Increases (1)		14,918			19,775			254			500			2,045			291			37,783
Decreases (2)		—			—			(10,688	)		—			—			(1,496	)		(12,184	)
Balance at December 31, 2019		49,215			62,311			—			8,961			10,955			—			131,442
Decreases (3)		(239	)		(317	)		—			(8	)		(33	)		—			(597	)
Decreases (4)		—			(61,994	)		—			—			—			—			(61,994	)
Balance at September 30, 2020	$	48,976		$	—		$	—		$	8,953		$	10,922		$	—		$	68,851

	$’s in thousands
Cash	$	1,745
Accounts receivable		5,119
Inventory		731
Prepaid expenses and other assets		544
Rental equipment		51,747
Property and equipment		3,207
Other assets		21
Intangible assets (1)		8,700
Total identifiable assets acquired		71,814
Accounts payable		(115	)
Accrued expenses payable and other liabilities		(991	)
Total liabilities assumed		(1,106	)
Net identifiable assets acquired		70,708
Goodwill (2)		37,186
Net assets acquired	$	107,894

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

Smaller Reporting Company	☐	Emerging Growth Company	☐

	Fair Value (amounts in thousands)		Life (years)
Customer relationships	$	8,500		10
Tradenames		200		1
	$	8,700

Rental Component 1	$	14,679
Rental Component 2		19,458
New Equipment		254
Used Equipment		492
Parts		2,012
Service		291
	$	37,186

	(amounts in thousands, except per share data)
	Three Month Period Ended September 30, 2018
	H&E(1)		We-Rent-It			Total
Total revenues	$	322,141	$	9,809		$	331,950
Pretax income		28,971		2,406			31,377
Pro forma adjustments to pretax income:
Impact of fair value mark-ups/useful life changes on depreciation (2)		—		(1,113	)		(1,113	)
Intangible asset amortization (3)		—		(353	)		(353	)
Interest expense (4)		—		(1,416	)		(1,416	)
Elimination of historic interest expense (5)		—		154			154
Pro forma pretax income (loss)		28,971		(322	)		28,649
Income tax expense (benefit)		7,657		(83	)		7,574
Net income (loss)	$	21,314	$	(239	)	$	21,075
Net income (loss) per share – basic (6)	$	0.60	$	(0.01	)	$	0.59
Net income (loss) per share – diluted (6)	$	0.59	$	(0.01	)	$	0.59

	(amounts in thousands, except per share data)
	Nine Month Period Ended September 30, 2018
	H&E(1)		Rental Inc.(7)			We-Rent-It			Total
Total revenues	$	892,987	$	7,408		$	27,036		$	927,431
Pretax income		69,908		1,020			5,622			76,550
Pro forma adjustments to pretax income:
Impact of fair value mark-ups/useful life changes on depreciation (2)		—		(749	)		(3,339	)		(4,088	)
Intangible asset amortization (3)		—		(250	)		(788	)		(1,038	)
Interest expense (4)		—		(480	)		(4,248	)		(4,728	)
Elimination of historic interest expense (5)		—		82			360			442
Pro forma pretax income (loss)		69,908		(377	)		(2,393	)		67,138
Income tax expense (benefit)		18,345		(100	)		(620	)		17,625
Net income (loss)	$	51,563	$	(277	)	$	(1,773	)	$	49,513
Net income (loss) per share – basic (6)	$	1.45	$	(0.01	)	$	(0.05	)	$	1.39
Net income (loss) per share – diluted (6)	$	1.44	$	(0.01	)	$	(0.05	)	$	1.38

	September 30, 2020
	Carrying Amount		Fair Value
Manufacturer flooring plans payable with interest computed at 3.50% (Level 3)	$	11,646	$	10,504
Senior unsecured notes due 2025 with interest computed at 5.625% (Level 2)		946,155		990,375

	June 30, 2021
	Carrying Amount		Fair Value
Manufacturer flooring plans payable with interest computed at 3.5% (Level 3)	$	7,326	$	6,608
Senior unsecured notes due 2028 with interest computed at 3.875% (Level 2)		1,239,245		1,231,338

	December 31, 2019
	Carrying Amount		Fair Value
Manufacturer flooring plans payable with interest computed at 5.25% (Level 3)	$	25,201	$	21,615
Senior unsecured notes due 2025 with interest computed at 5.625% (Level 2)		945,566		995,125

	December 31, 2020
	Carrying Amount		Fair Value
Manufacturer flooring plans payable with interest computed at 3.5% (Level 3)	$	9,615	$	8,976
Senior unsecured notes due 2028 with interest computed at 3.875% (Level 2)		1,238,660		1,259,413

Balance at December 31, 2018	$	944,780
Accretion of discount through December 31, 2019		1,539
Amortization of note premium through December 31, 2019		(1,062	)
Amortization of deferred financing costs through December 31, 2019		309
Balance at December 31, 2019	$	945,566
Accretion of discount through September 30, 2020		1,155
Amortization of note premium through September 30, 2020		(797	)
Amortization of deferred financing costs through September 30, 2020		231
Balance at September 30, 2020	$	946,155

Balance at December 31, 2019	$	945,566
Accretion of discount on Old Notes through December 14, 2020		1,466
Amortization of note premium on Old Notes through December 14, 2020		(1,011	)
Amortization of deferred financing costs on Old Notes through December 14, 2020		293
Aggregate principal amount paid on Old Notes		(950,000	)
Writeoff of unaccreted discount on Old Notes		7,225
Writeoff of unamortized premium on Old Notes		(4,988	)
Writeoff of deferred financing costs on Old Notes		1,449
Aggregate principal amount issued on New Notes		1,250,000
Notes discount and deferred transaction costs on New Notes		(11,404	)
Accretion of discount on New Notes from December 14, 2020 through December 31, 2020		53
Amortization of deferred financing costs on New Notes from December 14, 2020 through December 31, 2020		11
Balance at December 31, 2020	$	1,238,660
Accretion of discount on New Notes through June 30, 2021		586
Additional deferred financing costs on New Notes through June 30, 2021		(136	)
Amortization of deferred financing costs on New Notes through June 30, 2021		135
Balance at June 30, 2021	$	1,239,245

	As of September 30, 2020
	H&E Equipment Services		Guarantor Subsidiaries			Elimination			Consolidated
	(Amounts in thousands)
Assets:
Cash	$	11,997	$	—		$	—		$	11,997
Receivables, net		146,152		21,443			—			167,595
Inventories, net		69,883		2,988			—			72,871
Prepaid expenses and other assets		11,424		173			—			11,597
Rental equipment, net		943,612		134,791			—			1,078,403
Property and equipment, net		104,671		17,502			—			122,173
Operating lease right-of-use assets, net		144,687		20,792			—			165,479
Finance lease right-of-use assets, net		—		244			—			244
Deferred financing costs, net		2,332		—			—			2,332
Investment in guarantor subsidiaries		188,438		—			(188,438	)		—
Intangible assets, net		29,953		—			—			29,953
Goodwill		57,185		11,666			—			68,851
Total assets	$	1,710,334	$	209,599		$	(188,438	)	$	1,731,495
Liabilities and Stockholders’ Equity:
Amounts due on senior secured credit facility		17,986	$	—		$	—		$	17,986
Accounts payable		66,458		3,347			—			69,805
Manufacturer flooring plans payable		11,646		—			—			11,646
Accrued expenses payable and other liabilities		77,710		(3,946	)		—			73,764
Dividends payable		200		(65	)		—			135
Senior unsecured notes, net		946,155		—			—			946,155
Operating lease right-of-use liabilities		147,495		21,457			—			168,952
Finance lease right-of-use liabilities		—		368			—			368
Deferred income taxes		178,752		—			—			178,752
Deferred compensation payable		2,173		—			—			2,173
Total liabilities		1,448,575		21,161			—			1,469,736
Stockholders’ equity		261,759		188,438			(188,438	)		261,759
Total liabilities and stockholders’ equity	$	1,710,334	$	209,599		$	(188,438	)	$	1,731,495

	As of December 31, 2019
	H&E Equipment Services		Guarantor Subsidiaries			Elimination			Consolidated
	(Amounts in thousands)
Assets:
Cash	$	14,247	$	—		$	—		$	14,247
Receivables, net		164,260		27,944			—			192,204
Inventories, net		81,945		3,533			—			85,478
Prepaid expenses and other assets		10,129		133			—			10,262
Rental equipment, net		1,062,154		155,519			—			1,217,673
Property and equipment, net		111,429		19,135			—			130,564
Operating lease right-of-use assets, net		137,625		18,945			—			156,570
Finance lease right-of-use assets, net		—		365			—			365
Deferred financing costs, net		2,857		—			—			2,857
Investment in guarantor subsidiaries		235,749		—			(235,749	)		—
Intangible assets, net		32,948		—			—			32,948
Goodwill		101,916		29,526			—			131,442
Total assets	$	1,955,259	$	255,100		$	(235,749	)	$	1,974,610
Liabilities and Stockholders’ Equity:
Amounts due under senior secured credit facility	$	216,879	$	—		$	—		$	216,879
Accounts payable		56,225		2,628			—			58,853
Manufacturer flooring plans payable		25,201		—			—			25,201
Accrued expenses payable and other liabilities		81,646		(3,264	)		—			78,382
Dividends payable		231		(60	)		—			171
Senior unsecured notes, net		945,566		—			—			945,566
Operating lease right-of-use liabilities, net		139,768		19,497			—			159,265
Finance lease right-of-use liabilities, net		—		550			—			550
Deferred income taxes		180,126		—			—			180,126
Deferred compensation payable		2,098		—			—			2,098
Total liabilities		1,647,740		19,351			—			1,667,091
Stockholders’ equity		307,519		235,749			(235,749	)		307,519
Total liabilities and stockholders’ equity	$	1,955,259	$	255,100		$	(235,749	)	$	1,974,610

	Three Months Ended September 30, 2020
	H&E Equipment Services			Guarantor Subsidiaries			Elimination			Consolidated
	(Amounts in thousands)
Revenues:
Equipment rentals	$	142,046		$	23,803		$	—		$	165,849
New equipment sales		36,315			933			—			37,248
Used equipment sales		35,465			4,535			—			40,000
Parts sales		25,336			2,517			—			27,853
Services revenues		14,186			1,451			—			15,637
Other		2,356			317			—			2,673
Total revenues		255,704			33,556			—			289,260
Cost of revenues:
Rental depreciation		50,333			7,750			—			58,083
Rental expense		22,229			3,399			—			25,628
Rental other		14,141			2,675			—			16,816
		86,703			13,824			—			100,527
New equipment sales		32,362			762			—			33,124
Used equipment sales		24,952			2,920			—			27,872
Parts sales		19,164			1,761			—			20,925
Services revenues		4,752			446			—			5,198
Other		2,331			216			—			2,547
Total cost of revenues		170,264			19,929			—			190,193
Gross profit:
Equipment rentals		55,343			9,979			—			65,322
New equipment sales		3,953			171			—			4,124
Used equipment sales		10,513			1,615			—			12,128
Parts sales		6,172			756			—			6,928
Services revenues		9,434			1,005			—			10,439
Other		25			101			—			126
Gross profit		85,440			13,627			—			99,067
Selling, general and administrative expenses		61,059			8,981			—			70,040
Merger costs		150			—			—			150
Equity in earnings of guarantor subsidiaries		2,226			—			(2,226	)		—
Gain on sales of property and equipment, net		1,852			250			—			2,102
Income from operations		28,309			4,896			(2,226	)		30,979
Other income (expense):
Interest expense		(12,174	)		(2,713	)		—			(14,887	)
Other, net		947			43			—			990
Total other expense, net		(11,227	)		(2,670	)		—			(13,897	)
Income before income taxes		17,082			2,226			(2,226	)		17,082
Income tax expense		6,979			—			—			6,979
Net income	$	10,103		$	2,226		$	(2,226	)	$	10,103

	Three Months Ended September 30, 2019
	H&E Equipment Services			Guarantor Subsidiaries			Elimination			Consolidated
	(Amounts in thousands)
Revenues:
Equipment rentals	$	176,338		$	27,794		$	—		$	204,132
New equipment sales		60,584			4,426			—			65,010
Used equipment sales		25,850			5,330			—			31,180
Parts sales		27,284			4,215			—			31,499
Services revenues		15,614			2,491			—			18,105
Other		2,590			481			—			3,071
Total revenues		308,260			44,737			—			352,997
Cost of revenues:
Rental depreciation		54,757			8,308			—			63,065
Rental expense		23,947			3,942			—			27,889
Rental other		15,505			3,115			—			18,620
		94,209			15,365			—			109,574
New equipment sales		53,542			3,933			—			57,475
Used equipment sales		17,958			3,451			—			21,409
Parts sales		20,150			3,021			—			23,171
Services revenues		5,131			767			—			5,898
Other		2,977			365			—			3,342
Total cost of revenues		193,967			26,902			—			220,869
Gross profit (loss):
Equipment rentals		82,129			12,429			—			94,558
New equipment sales		7,042			493			—			7,535
Used equipment sales		7,892			1,879			—			9,771
Parts sales		7,134			1,194			—			8,328
Services revenues		10,483			1,724			—			12,207
Other		(387	)		116			—			(271	)
Gross profit		114,293			17,835			—			132,128
Selling, general and administrative expenses		67,372			9,924			—			77,296
Merger costs		47			—			—			47
Equity in earnings of guarantor subsidiaries		4,701			—			(4,701	)		—
Gain on sales of property and equipment, net		686			32			—			718
Income from operations		52,261			7,943			(4,701	)		55,503
Other income (expense):
Interest expense		(14,013	)		(3,318	)		—			(17,331	)
Other, net		512			76			—			588
Total other expense, net		(13,501	)		(3,242	)		—			(16,743	)
Income before income taxes		38,760			4,701			(4,701	)		38,760
Income tax expense		10,329			—			—			10,329
Net income	$	28,431		$	4,701		$	(4,701	)	$	28,431

	Nine Months Ended September 30, 2020
	H&E Equipment Services			Guarantor Subsidiaries			Elimination			Consolidated
	(Amounts in thousands)
Revenues:
Equipment rentals	$	429,040		$	67,122		$	—		$	496,162
New equipment sales		107,813			4,255			—			112,068
Used equipment sales		91,918			13,313			—			105,231
Parts sales		74,847			8,995			—			83,842
Services revenues		42,429			5,687			—			48,116
Other		6,944			1,155			—			8,099
Total revenues		752,991			100,527			—			853,518
Cost of revenues:
Rental depreciation		153,870			23,355			—			177,225
Rental expense		64,733			9,728			—			74,461
Rental other		40,376			7,471			—			47,847
		258,979			40,554			—			299,533
New equipment sales		96,184			3,625			—			99,809
Used equipment sales		63,241			8,351			—			71,592
Parts sales		55,836			6,344			—			62,180
Services revenues		14,119			1,792			—			15,911
Other		7,011			862			—			7,873
Total cost of revenues		495,370			61,528			—			556,898
Gross profit (loss):
Equipment rentals		170,061			26,568			—			196,629
New equipment sales		11,629			630			—			12,259
Used equipment sales		28,677			4,962			—			33,639
Parts sales		19,011			2,651			—			21,662
Services revenues		28,310			3,895			—			32,205
Other		(67	)		293			—			226
Gross profit		257,621			38,999			—			296,620
Selling, general and administrative expenses		189,811			27,714			—			217,525
Impairment of goodwill		61,994			—			—			61,994
Merger costs		308			—			—			308
Equity in earnings of guarantor subsidiaries		3,904			—			(3,904	)		—
Gain on sales of property and equipment, net		8,122			1,138			—			9,260
Income from operations		17,534			12,423			(3,904	)		26,053
Other income (expense):
Interest expense		(37,821	)		(8,668	)		—			(46,489	)
Other, net		2,113			149			—			2,262
Total other expense, net		(35,708	)		(8,519	)		—			(44,227	)
Income (loss) before income taxes		(18,174	)		3,904			(3,904	)		(18,174	)
Income tax benefit		(124	)		—			—			(124	)
Net income (loss)	$	(18,050	)	$	3,904		$	(3,904	)	$	(18,050	)

	Nine Months Ended September 30, 2019
	H&E Equipment Services			Guarantor Subsidiaries			Elimination			Consolidated
	(Amounts in thousands)
Revenues:
Equipment rentals	$	495,246		$	77,317		$	—		$	572,563
New equipment sales		160,200			17,509			—			177,709
Used equipment sales		81,430			15,512			—			96,942
Parts sales		81,326			12,472			—			93,798
Services revenues		42,922			7,476			—			50,398
Other		7,422			1,400			—			8,822
Total revenues		868,546			131,686			—			1,000,232
Cost of revenues:
Rental depreciation		157,380			24,267			—			181,647
Rental expense		68,242			11,434			—			79,676
Rental other		44,500			8,242			—			52,742
		270,122			43,943			—			314,065
New equipment sales		141,181			15,457			—			156,638
Used equipment sales		53,791			9,951			—			63,742
Parts sales		59,962			8,788			—			68,750
Services revenues		13,971			2,290			—			16,261
Other		8,963			1,204			—			10,167
Total cost of revenues		547,990			81,633			—			629,623
Gross profit (loss):
Equipment rentals		225,124			33,374			—			258,498
New equipment sales		19,019			2,052			—			21,071
Used equipment sales		27,639			5,561			—			33,200
Parts sales		21,364			3,684			—			25,048
Services revenues		28,951			5,186			—			34,137
Other		(1,541	)		196			—			(1,345	)
Gross profit		320,556			50,053			—			370,609
Selling, general and administrative expenses		203,785			29,998			—			233,783
Merger costs		314			—			—			314
Equity in earnings of guarantor subsidiaries		10,656			—			(10,656	)		—
Gain on sales of property and equipment, net		1,948			391			—			2,339
Income from operations		129,061			20,446			(10,656	)		138,851
Other income (expense):
Interest expense		(41,461	)		(9,992	)		—			(51,453	)
Other, net		1,407			202			—			1,609
Total other expense, net		(40,054	)		(9,790	)		—			(49,844	)
Income before income taxes		89,007			10,656			(10,656	)		89,007
Income tax expense		23,719			—			—			23,719
Net income	$	65,288		$	10,656		$	(10,656	)	$	65,288

	Units		% of Total Units			Original Acquisition Cost		% of Original Acquisition Cost			Average Age in Months
Hi-Lift or Aerial Work Platforms		21,654		53.1	%	$	693.8		38.1	%		47.3
Cranes		195		0.5	%		76.3		4.2	%		54.8
Earthmoving		4,605		11.3	%		415.4		22.8	%		25.4
Material Handling(1)		6,657		16.3	%		512.1		28.1	%		41.1
Other		7,664		18.8	%		122.6		6.8	%		26.7
Total		40,775		100.0	%	$	1,820.2		100.0	%		40.0


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

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

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

101.INS		Inline XBRL Instance Document ~~- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.~~(filed herewith).

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

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

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

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

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

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

	H&E EQUIPMENT SERVICES, INC.

Dated: ~~October 28, 2020~~August 3, 2021	By:	/s/ Bradley W. Barber
		Bradley W. Barber Chief Executive Officer & ~~President~~Director (Principal Executive Officer)

Dated: ~~October 28, 2020~~August 3, 2021	By:	/s/ Leslie S. Magee
		Leslie S. Magee Chief Financial Officer ~~and~~& Secretary (Principal Financial and Accounting Officer)