H&E Equipment Services
Annual Report 2023

Plain-text annual report

PERFORMANCE, GROWTH, VALUE 2023 ANNUAL REPORT FINANCIAL METRICS 2023 KEY FINANCIAL HIGHLIGHTS Revenue $1,469.2M, up 18.1% from 2022 Gross Profit $684.5M, up 23.3% from 2022 and representing 46.6% of revenue Income from Operations $276.7M, up 21.3% from 2022 Net Income $169.3M, up 26.6% from 2022 Adjusted EBITDA(2) $688.2M, or 46.8% of revenue, up 320 basis points from 2022 Increase in Fleet Original Equipment Cost 18.3% Increase in Rental Rates 5.6% Financial Results(1) ($ in millions) Revenue Gross Profit Adjusted EBITDA(2) $1,007.0 $1,062.8 $357.1 $359.4 $415.3 $393.6 $1,469.2 $1,244.5 $684.5 $688.2 $555.2 $543.0 2020 2021 2022 2023 RECORD FINANCIAL PERFORMANCE (cid:57)(cid:76)(cid:90)(cid:80)(cid:83)(cid:80)(cid:76)(cid:85)(cid:91)(cid:3)(cid:80)(cid:85)(cid:75)(cid:92)(cid:90)(cid:91)(cid:89)(cid:96)(cid:3)(cid:77)(cid:92)(cid:85)(cid:75)(cid:72)(cid:84)(cid:76)(cid:85)(cid:91)(cid:72)(cid:83)(cid:90)(cid:19)(cid:3)(cid:80)(cid:84)(cid:87)(cid:89)(cid:76)(cid:90)(cid:90)(cid:80)(cid:93)(cid:76)(cid:3)(cid:197)(cid:76)(cid:76)(cid:91)(cid:3)(cid:78)(cid:89)(cid:86)(cid:94)(cid:91)(cid:79) and strong branch expansion contributed to another year of (cid:89)(cid:86)(cid:73)(cid:92)(cid:90)(cid:91)(cid:3)(cid:196)(cid:85)(cid:72)(cid:85)(cid:74)(cid:80)(cid:72)(cid:83)(cid:3)(cid:87)(cid:76)(cid:89)(cid:77)(cid:86)(cid:89)(cid:84)(cid:72)(cid:85)(cid:74)(cid:76)(cid:21)(cid:3)(cid:57)(cid:76)(cid:74)(cid:86)(cid:89)(cid:75)(cid:3)(cid:89)(cid:76)(cid:90)(cid:92)(cid:83)(cid:91)(cid:90)(cid:3)(cid:94)(cid:76)(cid:89)(cid:76)(cid:3)(cid:89)(cid:76)(cid:87)(cid:86)(cid:89)(cid:91)(cid:76)(cid:75)(cid:3) (cid:77)(cid:86)(cid:89)(cid:3)(cid:91)(cid:86)(cid:91)(cid:72)(cid:83)(cid:3)(cid:89)(cid:76)(cid:93)(cid:76)(cid:85)(cid:92)(cid:76)(cid:90)(cid:19)(cid:3)(cid:78)(cid:89)(cid:86)(cid:90)(cid:90)(cid:3)(cid:87)(cid:89)(cid:86)(cid:196)(cid:91)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:40)(cid:75)(cid:81)(cid:92)(cid:90)(cid:91)(cid:76)(cid:75)(cid:3)(cid:44)(cid:41)(cid:48)(cid:59)(cid:43)(cid:40)(cid:21)(cid:3)(cid:40)(cid:83)(cid:90)(cid:86)(cid:19)(cid:3) (cid:77)(cid:86)(cid:89)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:196)(cid:89)(cid:90)(cid:91)(cid:3)(cid:91)(cid:80)(cid:84)(cid:76)(cid:3)(cid:80)(cid:85)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:42)(cid:86)(cid:84)(cid:87)(cid:72)(cid:85)(cid:96)(cid:187)(cid:90)(cid:3)(cid:29)(cid:25)(cid:20)(cid:96)(cid:76)(cid:72)(cid:89)(cid:3)(cid:79)(cid:80)(cid:90)(cid:91)(cid:86)(cid:89)(cid:96)(cid:19)(cid:3)(cid:89)(cid:76)(cid:93)(cid:76)(cid:85)(cid:92)(cid:76)(cid:90)(cid:3) from rental equipment exceeded $1.0 billion following the transition to a pure rental focus. INDUSTRY LEADING EXPANSION The Company added a record 17 new locations in 2023, combining the success of its accelerated branch expansion strategy with an acquisition. Since 2020, on a continuing operations basis, the Company has grown its branch network by 48.9%, establishing greater branch density throughout its geographic footprint and increased opportunities for customer engagement. 137 BRANCHES IN 30 STATES 137 120 92 102 2020(1) 2021 2022 2023 150 120 90 60 30 0 (1) On a continuing operations basis. (cid:15)(cid:25)(cid:16)(cid:3)(cid:40)(cid:75)(cid:81)(cid:92)(cid:90)(cid:91)(cid:76)(cid:75)(cid:3)(cid:44)(cid:41)(cid:48)(cid:59)(cid:43)(cid:40)(cid:3)(cid:77)(cid:89)(cid:86)(cid:84)(cid:3)(cid:74)(cid:86)(cid:85)(cid:91)(cid:80)(cid:85)(cid:92)(cid:80)(cid:85)(cid:78)(cid:3)(cid:86)(cid:87)(cid:76)(cid:89)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:90)(cid:3)(cid:80)(cid:90)(cid:3)(cid:72)(cid:3)(cid:85)(cid:86)(cid:85)(cid:20)(cid:46)(cid:40)(cid:40)(cid:55)(cid:3)(cid:196)(cid:85)(cid:72)(cid:85)(cid:74)(cid:80)(cid:72)(cid:83)(cid:3)(cid:84)(cid:76)(cid:72)(cid:90)(cid:92)(cid:89)(cid:76)(cid:21)(cid:3)(cid:58)(cid:76)(cid:76)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:58)(cid:92)(cid:87)(cid:87)(cid:83)(cid:76)(cid:84)(cid:76)(cid:85)(cid:91)(cid:72)(cid:83)(cid:3)(cid:58)(cid:74)(cid:79)(cid:76)(cid:75)(cid:92)(cid:83)(cid:76) (cid:77)(cid:86)(cid:83)(cid:83)(cid:86)(cid:94)(cid:80)(cid:85)(cid:78)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:42)(cid:86)(cid:84)(cid:87)(cid:72)(cid:85)(cid:96)(cid:187)(cid:90)(cid:3)(cid:45)(cid:86)(cid:89)(cid:84)(cid:3)(cid:24)(cid:23)(cid:20)(cid:50)(cid:3)(cid:77)(cid:86)(cid:89)(cid:3)(cid:72)(cid:3)(cid:89)(cid:76)(cid:74)(cid:86)(cid:85)(cid:74)(cid:80)(cid:83)(cid:80)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:91)(cid:86)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:74)(cid:86)(cid:84)(cid:87)(cid:72)(cid:89)(cid:72)(cid:73)(cid:83)(cid:76)(cid:3)(cid:46)(cid:40)(cid:40)(cid:55)(cid:3)(cid:84)(cid:76)(cid:72)(cid:90)(cid:92)(cid:89)(cid:76)(cid:21) A LETTER FROM OUR CEO ANOTHER YEAR OF RECORD PERFORMANCE STRATEGIC INITIATIVES SERVE AS A STRONG GROWTH CATALYST (cid:54)(cid:92)(cid:89)(cid:3)(cid:89)(cid:76)(cid:74)(cid:86)(cid:89)(cid:75)(cid:3)(cid:196)(cid:85)(cid:72)(cid:85)(cid:74)(cid:80)(cid:72)(cid:83)(cid:3)(cid:87)(cid:76)(cid:89)(cid:77)(cid:86)(cid:89)(cid:84)(cid:72)(cid:85)(cid:74)(cid:76)(cid:3)(cid:94)(cid:72)(cid:90)(cid:3)(cid:90)(cid:92)(cid:87)(cid:87)(cid:86)(cid:89)(cid:91)(cid:76)(cid:75)(cid:3)(cid:73)(cid:96)(cid:3)(cid:72)(cid:3) (cid:90)(cid:92)(cid:90)(cid:91)(cid:72)(cid:80)(cid:85)(cid:76)(cid:75)(cid:3)(cid:77)(cid:86)(cid:74)(cid:92)(cid:90)(cid:3)(cid:86)(cid:85)(cid:3)(cid:82)(cid:76)(cid:96)(cid:3)(cid:90)(cid:91)(cid:89)(cid:72)(cid:91)(cid:76)(cid:78)(cid:80)(cid:74)(cid:3)(cid:80)(cid:85)(cid:80)(cid:91)(cid:80)(cid:72)(cid:91)(cid:80)(cid:93)(cid:76)(cid:90)(cid:19)(cid:3)(cid:80)(cid:85)(cid:74)(cid:83)(cid:92)(cid:75)(cid:80)(cid:85)(cid:78)(cid:3)(cid:197)(cid:76)(cid:76)(cid:91)(cid:3) (cid:78)(cid:89)(cid:86)(cid:94)(cid:91)(cid:79)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:90)(cid:91)(cid:76)(cid:72)(cid:75)(cid:96)(cid:3)(cid:76)(cid:95)(cid:87)(cid:72)(cid:85)(cid:90)(cid:80)(cid:86)(cid:85)(cid:3)(cid:86)(cid:77)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:73)(cid:89)(cid:72)(cid:85)(cid:74)(cid:79)(cid:3)(cid:85)(cid:76)(cid:91)(cid:94)(cid:86)(cid:89)(cid:82)(cid:21) (cid:62)(cid:76)(cid:3)(cid:74)(cid:86)(cid:84)(cid:87)(cid:83)(cid:76)(cid:91)(cid:76)(cid:75)(cid:3)(cid:25)(cid:23)(cid:25)(cid:26)(cid:3)(cid:94)(cid:80)(cid:91)(cid:79)(cid:3)(cid:11)(cid:30)(cid:26)(cid:30)(cid:3)(cid:84)(cid:80)(cid:83)(cid:83)(cid:80)(cid:86)(cid:85)(cid:3)(cid:86)(cid:77)(cid:3)(cid:78)(cid:89)(cid:86)(cid:90)(cid:90)(cid:3)(cid:74)(cid:72)(cid:87)(cid:80)(cid:91)(cid:72)(cid:83) (cid:76)(cid:95)(cid:87)(cid:76)(cid:85)(cid:75)(cid:80)(cid:91)(cid:92)(cid:89)(cid:76)(cid:90)(cid:3)(cid:80)(cid:85)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:76)(cid:88)(cid:92)(cid:80)(cid:87)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3)(cid:89)(cid:76)(cid:85)(cid:91)(cid:72)(cid:83)(cid:3)(cid:197)(cid:76)(cid:76)(cid:91)(cid:19)(cid:3)(cid:89)(cid:76)(cid:87)(cid:89)(cid:76)(cid:90)(cid:76)(cid:85)(cid:91)(cid:80)(cid:85)(cid:78)(cid:3) (cid:91)(cid:79)(cid:76)(cid:3)(cid:83)(cid:72)(cid:89)(cid:78)(cid:76)(cid:90)(cid:91)(cid:3)(cid:72)(cid:85)(cid:85)(cid:92)(cid:72)(cid:83)(cid:3)(cid:80)(cid:85)(cid:93)(cid:76)(cid:90)(cid:91)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3)(cid:80)(cid:85)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:42)(cid:86)(cid:84)(cid:87)(cid:72)(cid:85)(cid:96)(cid:187)(cid:90)(cid:3)(cid:79)(cid:80)(cid:90)(cid:91)(cid:86)(cid:89)(cid:96)(cid:21)(cid:3) (cid:59)(cid:79)(cid:76)(cid:3)(cid:89)(cid:76)(cid:74)(cid:86)(cid:89)(cid:75)(cid:3)(cid:80)(cid:85)(cid:93)(cid:76)(cid:90)(cid:91)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3)(cid:89)(cid:76)(cid:90)(cid:92)(cid:83)(cid:91)(cid:76)(cid:75)(cid:3)(cid:80)(cid:85)(cid:3)(cid:72)(cid:3)(cid:197)(cid:76)(cid:76)(cid:91)(cid:3)(cid:86)(cid:89)(cid:80)(cid:78)(cid:80)(cid:85)(cid:72)(cid:83)(cid:3) (cid:76)(cid:88)(cid:92)(cid:80)(cid:87)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3)(cid:74)(cid:86)(cid:90)(cid:91)(cid:3)(cid:15)(cid:54)(cid:44)(cid:42)(cid:16)(cid:3)(cid:72)(cid:91)(cid:3)(cid:96)(cid:76)(cid:72)(cid:89)(cid:20)(cid:76)(cid:85)(cid:75)(cid:3)(cid:86)(cid:77)(cid:3)(cid:11)(cid:25)(cid:21)(cid:31)(cid:3)(cid:73)(cid:80)(cid:83)(cid:83)(cid:80)(cid:86)(cid:85)(cid:19)(cid:3)(cid:72)(cid:85)(cid:3) (cid:80)(cid:85)(cid:74)(cid:89)(cid:76)(cid:72)(cid:90)(cid:76)(cid:3)(cid:86)(cid:77)(cid:3)(cid:11)(cid:27)(cid:26)(cid:25)(cid:21)(cid:29)(cid:3)(cid:84)(cid:80)(cid:83)(cid:83)(cid:80)(cid:86)(cid:85)(cid:19)(cid:3)(cid:76)(cid:95)(cid:74)(cid:76)(cid:76)(cid:75)(cid:80)(cid:85)(cid:78)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:87)(cid:89)(cid:76)(cid:93)(cid:80)(cid:86)(cid:92)(cid:90)(cid:3) (cid:96)(cid:76)(cid:72)(cid:89)(cid:187)(cid:90)(cid:3)(cid:89)(cid:76)(cid:74)(cid:86)(cid:89)(cid:75)(cid:3)(cid:54)(cid:44)(cid:42)(cid:3)(cid:73)(cid:96)(cid:3)(cid:24)(cid:31)(cid:21)(cid:26)(cid:12)(cid:21)(cid:3)(cid:45)(cid:86)(cid:83)(cid:83)(cid:86)(cid:94)(cid:80)(cid:85)(cid:78)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:25)(cid:23)(cid:25)(cid:26)(cid:3)(cid:197)(cid:76)(cid:76)(cid:91)(cid:3) (cid:80)(cid:85)(cid:93)(cid:76)(cid:90)(cid:91)(cid:84)(cid:76)(cid:85)(cid:91)(cid:19)(cid:3)(cid:94)(cid:76)(cid:3)(cid:79)(cid:72)(cid:93)(cid:76)(cid:3)(cid:85)(cid:86)(cid:94)(cid:3)(cid:78)(cid:89)(cid:86)(cid:94)(cid:85)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:197)(cid:76)(cid:76)(cid:91)(cid:3)(cid:54)(cid:44)(cid:42)(cid:19)(cid:3)(cid:94)(cid:79)(cid:76)(cid:85)(cid:3) (cid:90)(cid:79)(cid:86)(cid:94)(cid:85)(cid:3)(cid:86)(cid:85)(cid:3)(cid:72)(cid:3)(cid:74)(cid:86)(cid:85)(cid:91)(cid:80)(cid:85)(cid:92)(cid:80)(cid:85)(cid:78)(cid:3)(cid:86)(cid:87)(cid:76)(cid:89)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:90)(cid:3)(cid:73)(cid:72)(cid:90)(cid:80)(cid:90)(cid:19)(cid:3)(cid:72)(cid:85)(cid:3)(cid:76)(cid:90)(cid:91)(cid:80)(cid:84)(cid:72)(cid:91)(cid:76)(cid:75)(cid:3) (cid:29)(cid:28)(cid:12)(cid:3)(cid:86)(cid:93)(cid:76)(cid:89)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:91)(cid:89)(cid:72)(cid:80)(cid:83)(cid:80)(cid:85)(cid:78)(cid:3)(cid:26)(cid:29)(cid:3)(cid:84)(cid:86)(cid:85)(cid:91)(cid:79)(cid:90)(cid:3)(cid:76)(cid:85)(cid:75)(cid:80)(cid:85)(cid:78)(cid:3)(cid:43)(cid:76)(cid:74)(cid:76)(cid:84)(cid:73)(cid:76)(cid:89)(cid:3) (cid:26)(cid:24)(cid:19)(cid:3)(cid:25)(cid:23)(cid:25)(cid:26)(cid:21)(cid:3)(cid:43)(cid:92)(cid:89)(cid:80)(cid:85)(cid:78)(cid:3)(cid:91)(cid:79)(cid:80)(cid:90)(cid:3)(cid:91)(cid:80)(cid:84)(cid:76)(cid:19)(cid:3)(cid:94)(cid:76)(cid:3)(cid:79)(cid:72)(cid:93)(cid:76)(cid:3)(cid:94)(cid:86)(cid:89)(cid:82)(cid:76)(cid:75)(cid:3)(cid:91)(cid:86)(cid:94)(cid:72)(cid:89)(cid:75)(cid:3)(cid:72)(cid:85)(cid:3) (cid:86)(cid:87)(cid:91)(cid:80)(cid:84)(cid:72)(cid:83)(cid:3)(cid:197)(cid:76)(cid:76)(cid:91)(cid:3)(cid:84)(cid:80)(cid:95)(cid:3)(cid:91)(cid:79)(cid:72)(cid:91)(cid:3)(cid:74)(cid:86)(cid:84)(cid:87)(cid:83)(cid:76)(cid:84)(cid:76)(cid:85)(cid:91)(cid:90)(cid:3)(cid:73)(cid:86)(cid:91)(cid:79)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:78)(cid:76)(cid:86)(cid:78)(cid:89)(cid:72)(cid:87)(cid:79)(cid:80)(cid:74)(cid:3) (cid:76)(cid:95)(cid:87)(cid:72)(cid:85)(cid:90)(cid:80)(cid:86)(cid:85)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:89)(cid:80)(cid:90)(cid:80)(cid:85)(cid:78)(cid:3)(cid:85)(cid:76)(cid:76)(cid:75)(cid:90)(cid:3)(cid:86)(cid:77)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:74)(cid:92)(cid:90)(cid:91)(cid:86)(cid:84)(cid:76)(cid:89)(cid:90)(cid:19)(cid:3)(cid:94)(cid:79)(cid:80)(cid:83)(cid:76)(cid:3) (cid:84)(cid:72)(cid:80)(cid:85)(cid:91)(cid:72)(cid:80)(cid:85)(cid:80)(cid:85)(cid:78)(cid:3)(cid:86)(cid:85)(cid:76)(cid:3)(cid:86)(cid:77)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:80)(cid:85)(cid:75)(cid:92)(cid:90)(cid:91)(cid:89)(cid:96)(cid:187)(cid:90)(cid:3)(cid:96)(cid:86)(cid:92)(cid:85)(cid:78)(cid:76)(cid:90)(cid:91)(cid:3)(cid:89)(cid:76)(cid:85)(cid:91)(cid:72)(cid:83)(cid:3)(cid:197)(cid:76)(cid:76)(cid:91)(cid:90)(cid:21)(cid:3)(cid:3)(cid:3)(cid:3) (cid:40)(cid:83)(cid:90)(cid:86)(cid:19)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:87)(cid:72)(cid:74)(cid:76)(cid:3)(cid:86)(cid:77)(cid:3)(cid:73)(cid:89)(cid:72)(cid:85)(cid:74)(cid:79)(cid:3)(cid:76)(cid:95)(cid:87)(cid:72)(cid:85)(cid:90)(cid:80)(cid:86)(cid:85)(cid:3)(cid:80)(cid:85)(cid:3)(cid:25)(cid:23)(cid:25)(cid:26)(cid:3)(cid:94)(cid:72)(cid:90)(cid:3) (cid:80)(cid:84)(cid:87)(cid:89)(cid:76)(cid:90)(cid:90)(cid:80)(cid:93)(cid:76)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:74)(cid:89)(cid:76)(cid:72)(cid:91)(cid:76)(cid:75)(cid:3)(cid:72)(cid:85)(cid:3)(cid:86)(cid:92)(cid:91)(cid:83)(cid:76)(cid:91)(cid:3)(cid:77)(cid:86)(cid:89)(cid:3)(cid:80)(cid:85)(cid:74)(cid:89)(cid:76)(cid:72)(cid:90)(cid:76)(cid:75)(cid:3)(cid:93)(cid:86)(cid:83)(cid:92)(cid:84)(cid:76)(cid:3) (cid:72)(cid:85)(cid:75)(cid:3)(cid:90)(cid:91)(cid:89)(cid:86)(cid:85)(cid:78)(cid:3)(cid:89)(cid:76)(cid:93)(cid:76)(cid:85)(cid:92)(cid:76)(cid:3)(cid:78)(cid:89)(cid:86)(cid:94)(cid:91)(cid:79)(cid:21)(cid:3)(cid:60)(cid:85)(cid:75)(cid:76)(cid:89)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:72)(cid:74)(cid:74)(cid:76)(cid:83)(cid:76)(cid:89)(cid:72)(cid:91)(cid:76)(cid:75)(cid:3)(cid:73)(cid:89)(cid:72)(cid:85)(cid:74)(cid:79)(cid:3) (cid:76)(cid:95)(cid:87)(cid:72)(cid:85)(cid:90)(cid:80)(cid:86)(cid:85)(cid:3)(cid:87)(cid:89)(cid:86)(cid:78)(cid:89)(cid:72)(cid:84)(cid:19)(cid:3)(cid:94)(cid:79)(cid:80)(cid:74)(cid:79)(cid:3)(cid:74)(cid:86)(cid:84)(cid:84)(cid:76)(cid:85)(cid:74)(cid:76)(cid:75)(cid:3)(cid:80)(cid:85)(cid:3)(cid:25)(cid:23)(cid:25)(cid:24)(cid:19)(cid:3)(cid:94)(cid:76)(cid:3) (cid:72)(cid:75)(cid:75)(cid:76)(cid:75)(cid:3)(cid:72)(cid:3)(cid:89)(cid:76)(cid:74)(cid:86)(cid:89)(cid:75)(cid:3)(cid:24)(cid:27)(cid:3)(cid:73)(cid:89)(cid:72)(cid:85)(cid:74)(cid:79)(cid:76)(cid:90)(cid:3)(cid:80)(cid:85)(cid:3)(cid:25)(cid:23)(cid:25)(cid:26)(cid:19)(cid:3)(cid:83)(cid:76)(cid:72)(cid:75)(cid:80)(cid:85)(cid:78)(cid:3)(cid:91)(cid:86)(cid:3)(cid:78)(cid:89)(cid:76)(cid:72)(cid:91)(cid:76)(cid:89)(cid:3) (cid:75)(cid:76)(cid:85)(cid:90)(cid:80)(cid:91)(cid:96)(cid:3)(cid:91)(cid:79)(cid:89)(cid:86)(cid:92)(cid:78)(cid:79)(cid:86)(cid:92)(cid:91)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:78)(cid:76)(cid:86)(cid:78)(cid:89)(cid:72)(cid:87)(cid:79)(cid:80)(cid:74)(cid:3)(cid:77)(cid:86)(cid:86)(cid:91)(cid:87)(cid:89)(cid:80)(cid:85)(cid:91)(cid:19)(cid:3)(cid:80)(cid:85)(cid:74)(cid:83)(cid:92)(cid:75)(cid:80)(cid:85)(cid:78)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3) (cid:46)(cid:92)(cid:83)(cid:77)(cid:3)(cid:42)(cid:86)(cid:72)(cid:90)(cid:91)(cid:19)(cid:3)(cid:52)(cid:80)(cid:75)(cid:20)(cid:40)(cid:91)(cid:83)(cid:72)(cid:85)(cid:91)(cid:80)(cid:74)(cid:19)(cid:3)(cid:58)(cid:86)(cid:92)(cid:91)(cid:79)(cid:76)(cid:72)(cid:90)(cid:91)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:52)(cid:80)(cid:75)(cid:94)(cid:76)(cid:90)(cid:91)(cid:3)(cid:89)(cid:76)(cid:78)(cid:80)(cid:86)(cid:85)(cid:90)(cid:21) (cid:48)(cid:85)(cid:3)(cid:72)(cid:75)(cid:75)(cid:80)(cid:91)(cid:80)(cid:86)(cid:85)(cid:19)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:73)(cid:89)(cid:72)(cid:85)(cid:74)(cid:79)(cid:3)(cid:76)(cid:95)(cid:87)(cid:72)(cid:85)(cid:90)(cid:80)(cid:86)(cid:85)(cid:3)(cid:94)(cid:72)(cid:90)(cid:3)(cid:86)(cid:87)(cid:91)(cid:80)(cid:84)(cid:80)(cid:97)(cid:76)(cid:75)(cid:3)(cid:91)(cid:79)(cid:89)(cid:86)(cid:92)(cid:78)(cid:79)(cid:3) (cid:91)(cid:79)(cid:76)(cid:3)(cid:72)(cid:74)(cid:88)(cid:92)(cid:80)(cid:90)(cid:80)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:86)(cid:77)(cid:3)(cid:72)(cid:91)(cid:91)(cid:89)(cid:72)(cid:74)(cid:91)(cid:80)(cid:93)(cid:76)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:94)(cid:76)(cid:83)(cid:83)(cid:20)(cid:84)(cid:72)(cid:85)(cid:72)(cid:78)(cid:76)(cid:75)(cid:3)(cid:78)(cid:76)(cid:85)(cid:76)(cid:89)(cid:72)(cid:83)(cid:3) (cid:89)(cid:76)(cid:85)(cid:91)(cid:72)(cid:83)(cid:3)(cid:86)(cid:87)(cid:76)(cid:89)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:90)(cid:3)(cid:94)(cid:80)(cid:91)(cid:79)(cid:3)(cid:83)(cid:86)(cid:74)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:90)(cid:3)(cid:80)(cid:85)(cid:3)(cid:74)(cid:86)(cid:89)(cid:76)(cid:3)(cid:60)(cid:21)(cid:58)(cid:21)(cid:3)(cid:84)(cid:76)(cid:91)(cid:89)(cid:86)(cid:87)(cid:86)(cid:83)(cid:80)(cid:91)(cid:72)(cid:85) (cid:90)(cid:91)(cid:72)(cid:91)(cid:80)(cid:90)(cid:91)(cid:80)(cid:74)(cid:72)(cid:83)(cid:3)(cid:72)(cid:89)(cid:76)(cid:72)(cid:90)(cid:3)(cid:15)(cid:52)(cid:58)(cid:40)(cid:90)(cid:16)(cid:21)(cid:3)(cid:54)(cid:85)(cid:76)(cid:3)(cid:90)(cid:92)(cid:74)(cid:79)(cid:3)(cid:72)(cid:74)(cid:88)(cid:92)(cid:80)(cid:90)(cid:80)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:94)(cid:72)(cid:90)(cid:3)(cid:74)(cid:83)(cid:86)(cid:90)(cid:76)(cid:75)(cid:3) (cid:80)(cid:85)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:77)(cid:86)(cid:92)(cid:89)(cid:91)(cid:79)(cid:3)(cid:88)(cid:92)(cid:72)(cid:89)(cid:91)(cid:76)(cid:89)(cid:3)(cid:86)(cid:77)(cid:3)(cid:25)(cid:23)(cid:25)(cid:26)(cid:19)(cid:3)(cid:72)(cid:75)(cid:75)(cid:80)(cid:85)(cid:78)(cid:3)(cid:91)(cid:79)(cid:89)(cid:76)(cid:76)(cid:3)(cid:83)(cid:86)(cid:74)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:90)(cid:3)(cid:80)(cid:85)(cid:3) (cid:42)(cid:76)(cid:85)(cid:91)(cid:89)(cid:72)(cid:83)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:58)(cid:86)(cid:92)(cid:91)(cid:79)(cid:76)(cid:89)(cid:85)(cid:3)(cid:42)(cid:72)(cid:83)(cid:80)(cid:77)(cid:86)(cid:89)(cid:85)(cid:80)(cid:72)(cid:21)(cid:3)(cid:59)(cid:79)(cid:76)(cid:3)(cid:72)(cid:74)(cid:88)(cid:92)(cid:80)(cid:90)(cid:80)(cid:91)(cid:80)(cid:86)(cid:85)(cid:19)(cid:3)(cid:94)(cid:79)(cid:80)(cid:74)(cid:79)(cid:3) (cid:79)(cid:76)(cid:83)(cid:87)(cid:76)(cid:75)(cid:3)(cid:91)(cid:86)(cid:3)(cid:73)(cid:89)(cid:80)(cid:75)(cid:78)(cid:76)(cid:3)(cid:90)(cid:86)(cid:84)(cid:76)(cid:3)(cid:86)(cid:77)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:76)(cid:95)(cid:80)(cid:90)(cid:91)(cid:80)(cid:85)(cid:78)(cid:3)(cid:83)(cid:86)(cid:74)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:90)(cid:3)(cid:80)(cid:85)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3) (cid:90)(cid:91)(cid:72)(cid:91)(cid:76)(cid:19)(cid:3)(cid:80)(cid:85)(cid:74)(cid:89)(cid:76)(cid:72)(cid:90)(cid:76)(cid:75)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:91)(cid:86)(cid:91)(cid:72)(cid:83)(cid:3)(cid:85)(cid:92)(cid:84)(cid:73)(cid:76)(cid:89)(cid:3)(cid:86)(cid:77)(cid:3)(cid:73)(cid:89)(cid:72)(cid:85)(cid:74)(cid:79)(cid:3)(cid:72)(cid:75)(cid:75)(cid:80)(cid:91)(cid:80)(cid:86)(cid:85)(cid:90)(cid:3)(cid:80)(cid:85)(cid:3) (cid:25)(cid:23)(cid:25)(cid:26)(cid:3)(cid:91)(cid:86)(cid:3)(cid:24)(cid:30)(cid:19)(cid:3)(cid:89)(cid:76)(cid:87)(cid:89)(cid:76)(cid:90)(cid:76)(cid:85)(cid:91)(cid:80)(cid:85)(cid:78)(cid:3)(cid:72)(cid:3)(cid:24)(cid:27)(cid:21)(cid:25)(cid:12)(cid:3)(cid:80)(cid:85)(cid:74)(cid:89)(cid:76)(cid:72)(cid:90)(cid:76)(cid:3)(cid:72)(cid:74)(cid:89)(cid:86)(cid:90)(cid:90)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3) (cid:73)(cid:89)(cid:72)(cid:85)(cid:74)(cid:79)(cid:3)(cid:85)(cid:76)(cid:91)(cid:94)(cid:86)(cid:89)(cid:82)(cid:3)(cid:94)(cid:79)(cid:76)(cid:85)(cid:3)(cid:74)(cid:86)(cid:84)(cid:87)(cid:72)(cid:89)(cid:76)(cid:75)(cid:3)(cid:91)(cid:86)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:73)(cid:89)(cid:72)(cid:85)(cid:74)(cid:79)(cid:3)(cid:74)(cid:86)(cid:92)(cid:85)(cid:91)(cid:3)(cid:72)(cid:91)(cid:3) (cid:91)(cid:79)(cid:76)(cid:3)(cid:76)(cid:85)(cid:75)(cid:3)(cid:86)(cid:77)(cid:3)(cid:25)(cid:23)(cid:25)(cid:25)(cid:21)(cid:3)(cid:58)(cid:80)(cid:85)(cid:74)(cid:76)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:73)(cid:76)(cid:78)(cid:80)(cid:85)(cid:85)(cid:80)(cid:85)(cid:78)(cid:3)(cid:86)(cid:77)(cid:3)(cid:25)(cid:23)(cid:25)(cid:24)(cid:19)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:86)(cid:85)(cid:3)(cid:72)(cid:3) (cid:74)(cid:86)(cid:85)(cid:91)(cid:80)(cid:85)(cid:92)(cid:80)(cid:85)(cid:78)(cid:3)(cid:86)(cid:87)(cid:76)(cid:89)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:90)(cid:3)(cid:73)(cid:72)(cid:90)(cid:80)(cid:90)(cid:19)(cid:3)(cid:94)(cid:76)(cid:3)(cid:79)(cid:72)(cid:93)(cid:76)(cid:3)(cid:72)(cid:74)(cid:79)(cid:80)(cid:76)(cid:93)(cid:76)(cid:75)(cid:3)(cid:72)(cid:3)(cid:27)(cid:31)(cid:21)(cid:32)(cid:12)(cid:3) (cid:80)(cid:85)(cid:74)(cid:89)(cid:76)(cid:72)(cid:90)(cid:76)(cid:3)(cid:80)(cid:85)(cid:3)(cid:73)(cid:89)(cid:72)(cid:85)(cid:74)(cid:79)(cid:3)(cid:74)(cid:86)(cid:92)(cid:85)(cid:91)(cid:19)(cid:3)(cid:72)(cid:84)(cid:86)(cid:85)(cid:78)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:73)(cid:76)(cid:90)(cid:91)(cid:3)(cid:80)(cid:85)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:80)(cid:85)(cid:75)(cid:92)(cid:90)(cid:91)(cid:89)(cid:96)(cid:21)(cid:3)(cid:3) Bradley W. Barber, CEO, pictured with John M. Engquist, Executive Chairman DEAR SHAREHOLDERS, H&E Equipment Services, Inc. (“H&E”) continued to (cid:75)(cid:76)(cid:84)(cid:86)(cid:85)(cid:90)(cid:91)(cid:89)(cid:72)(cid:91)(cid:76)(cid:3)(cid:80)(cid:91)(cid:90)(cid:3)(cid:196)(cid:85)(cid:72)(cid:85)(cid:74)(cid:80)(cid:72)(cid:83)(cid:3)(cid:87)(cid:86)(cid:91)(cid:76)(cid:85)(cid:91)(cid:80)(cid:72)(cid:83)(cid:3)(cid:80)(cid:85)(cid:3)(cid:25)(cid:23)(cid:25)(cid:26)(cid:21)(cid:3)(cid:45)(cid:86)(cid:83)(cid:83)(cid:86)(cid:94)(cid:80)(cid:85)(cid:78)(cid:3) (cid:86)(cid:92)(cid:89)(cid:3)(cid:80)(cid:84)(cid:87)(cid:89)(cid:76)(cid:90)(cid:90)(cid:80)(cid:93)(cid:76)(cid:3)(cid:72)(cid:74)(cid:74)(cid:86)(cid:84)(cid:87)(cid:83)(cid:80)(cid:90)(cid:79)(cid:84)(cid:76)(cid:85)(cid:91)(cid:90)(cid:3)(cid:80)(cid:85)(cid:3)(cid:25)(cid:23)(cid:25)(cid:25)(cid:19)(cid:3)(cid:94)(cid:76)(cid:3)(cid:74)(cid:86)(cid:84)(cid:87)(cid:83)(cid:76)(cid:91)(cid:76)(cid:75) (cid:72)(cid:85)(cid:86)(cid:91)(cid:79)(cid:76)(cid:89)(cid:3)(cid:96)(cid:76)(cid:72)(cid:89)(cid:3)(cid:86)(cid:77)(cid:3)(cid:89)(cid:76)(cid:74)(cid:86)(cid:89)(cid:75)(cid:3)(cid:196)(cid:85)(cid:72)(cid:85)(cid:74)(cid:80)(cid:72)(cid:83)(cid:3)(cid:87)(cid:76)(cid:89)(cid:77)(cid:86)(cid:89)(cid:84)(cid:72)(cid:85)(cid:74)(cid:76)(cid:19)(cid:3)(cid:72)(cid:85)(cid:74)(cid:79)(cid:86)(cid:89)(cid:76)(cid:75) (cid:73)(cid:96)(cid:3)(cid:90)(cid:91)(cid:89)(cid:86)(cid:85)(cid:78)(cid:3)(cid:86)(cid:87)(cid:76)(cid:89)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:72)(cid:83)(cid:3)(cid:76)(cid:95)(cid:76)(cid:74)(cid:92)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:86)(cid:92)(cid:91)(cid:90)(cid:91)(cid:72)(cid:85)(cid:75)(cid:80)(cid:85)(cid:78) (cid:87)(cid:89)(cid:86)(cid:78)(cid:89)(cid:76)(cid:90)(cid:90)(cid:3)(cid:91)(cid:86)(cid:94)(cid:72)(cid:89)(cid:75)(cid:3)(cid:90)(cid:91)(cid:89)(cid:72)(cid:91)(cid:76)(cid:78)(cid:80)(cid:74)(cid:3)(cid:78)(cid:89)(cid:86)(cid:94)(cid:91)(cid:79)(cid:3)(cid:80)(cid:85)(cid:80)(cid:91)(cid:80)(cid:72)(cid:91)(cid:80)(cid:93)(cid:76)(cid:90)(cid:21)(cid:3)(cid:57)(cid:76)(cid:74)(cid:86)(cid:89)(cid:75) (cid:89)(cid:76)(cid:90)(cid:92)(cid:83)(cid:91)(cid:90)(cid:3)(cid:94)(cid:76)(cid:89)(cid:76)(cid:3)(cid:72)(cid:74)(cid:79)(cid:80)(cid:76)(cid:93)(cid:76)(cid:75)(cid:3)(cid:77)(cid:86)(cid:89)(cid:3)(cid:91)(cid:86)(cid:91)(cid:72)(cid:83)(cid:3)(cid:89)(cid:76)(cid:93)(cid:76)(cid:85)(cid:92)(cid:76)(cid:90)(cid:19)(cid:3)(cid:78)(cid:89)(cid:86)(cid:90)(cid:90)(cid:3)(cid:87)(cid:89)(cid:86)(cid:196)(cid:91)(cid:19)(cid:3) (cid:78)(cid:89)(cid:86)(cid:90)(cid:90)(cid:3)(cid:84)(cid:72)(cid:89)(cid:78)(cid:80)(cid:85)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:72)(cid:75)(cid:81)(cid:92)(cid:90)(cid:91)(cid:76)(cid:75)(cid:3)(cid:76)(cid:72)(cid:89)(cid:85)(cid:80)(cid:85)(cid:78)(cid:90)(cid:3)(cid:73)(cid:76)(cid:77)(cid:86)(cid:89)(cid:76)(cid:3)(cid:80)(cid:85)(cid:91)(cid:76)(cid:89)(cid:76)(cid:90)(cid:91)(cid:19) (cid:91)(cid:72)(cid:95)(cid:76)(cid:90)(cid:19)(cid:3)(cid:75)(cid:76)(cid:87)(cid:89)(cid:76)(cid:74)(cid:80)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:72)(cid:84)(cid:86)(cid:89)(cid:91)(cid:80)(cid:97)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:19)(cid:3)(cid:86)(cid:89)(cid:3)(cid:44)(cid:41)(cid:48)(cid:59)(cid:43)(cid:40)(cid:21)(cid:3)(cid:40)(cid:83)(cid:90)(cid:86)(cid:19)(cid:3) (cid:89)(cid:76)(cid:93)(cid:76)(cid:85)(cid:92)(cid:76)(cid:90)(cid:3)(cid:77)(cid:89)(cid:86)(cid:84)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:76)(cid:88)(cid:92)(cid:80)(cid:87)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3)(cid:89)(cid:76)(cid:85)(cid:91)(cid:72)(cid:83)(cid:3)(cid:73)(cid:92)(cid:90)(cid:80)(cid:85)(cid:76)(cid:90)(cid:90)(cid:3)(cid:90)(cid:76)(cid:78)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3) (cid:76)(cid:95)(cid:74)(cid:76)(cid:76)(cid:75)(cid:76)(cid:75)(cid:3)(cid:11)(cid:24)(cid:21)(cid:23)(cid:3)(cid:73)(cid:80)(cid:83)(cid:83)(cid:80)(cid:86)(cid:85)(cid:3)(cid:77)(cid:86)(cid:89)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:196)(cid:89)(cid:90)(cid:91)(cid:3)(cid:91)(cid:80)(cid:84)(cid:76)(cid:3)(cid:80)(cid:85)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:42)(cid:86)(cid:84)(cid:87)(cid:72)(cid:85)(cid:96)(cid:187)(cid:90)(cid:3) (cid:29)(cid:25)(cid:20)(cid:96)(cid:76)(cid:72)(cid:89)(cid:3)(cid:79)(cid:80)(cid:90)(cid:91)(cid:86)(cid:89)(cid:96)(cid:19)(cid:3)(cid:72)(cid:90)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:91)(cid:89)(cid:72)(cid:85)(cid:90)(cid:80)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:91)(cid:86)(cid:3)(cid:72)(cid:3)(cid:87)(cid:92)(cid:89)(cid:76)(cid:20)(cid:87)(cid:83)(cid:72)(cid:96)(cid:3)(cid:89)(cid:76)(cid:85)(cid:91)(cid:72)(cid:83) (cid:86)(cid:87)(cid:76)(cid:89)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:19)(cid:3)(cid:94)(cid:79)(cid:80)(cid:74)(cid:79)(cid:3)(cid:94)(cid:72)(cid:90)(cid:3)(cid:196)(cid:85)(cid:72)(cid:83)(cid:80)(cid:97)(cid:76)(cid:75)(cid:3)(cid:80)(cid:85)(cid:3)(cid:83)(cid:72)(cid:91)(cid:76)(cid:3)(cid:25)(cid:23)(cid:25)(cid:25)(cid:19)(cid:3)(cid:74)(cid:86)(cid:85)(cid:91)(cid:80)(cid:85)(cid:92)(cid:76)(cid:75)(cid:3)(cid:91)(cid:86) (cid:87)(cid:89)(cid:86)(cid:75)(cid:92)(cid:74)(cid:76)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:196)(cid:85)(cid:72)(cid:85)(cid:74)(cid:80)(cid:72)(cid:83)(cid:3)(cid:78)(cid:72)(cid:80)(cid:85)(cid:90)(cid:3)(cid:76)(cid:95)(cid:87)(cid:76)(cid:74)(cid:91)(cid:76)(cid:75)(cid:3)(cid:77)(cid:89)(cid:86)(cid:84)(cid:3)(cid:91)(cid:79)(cid:80)(cid:90)(cid:3)(cid:80)(cid:84)(cid:87)(cid:86)(cid:89)(cid:91)(cid:72)(cid:85)(cid:91) (cid:74)(cid:79)(cid:72)(cid:85)(cid:78)(cid:76)(cid:3)(cid:80)(cid:85)(cid:3)(cid:90)(cid:91)(cid:89)(cid:72)(cid:91)(cid:76)(cid:78)(cid:96)(cid:21)(cid:3)(cid:59)(cid:79)(cid:76)(cid:90)(cid:76)(cid:3)(cid:78)(cid:72)(cid:80)(cid:85)(cid:90)(cid:3)(cid:80)(cid:85)(cid:74)(cid:83)(cid:92)(cid:75)(cid:76)(cid:3)(cid:79)(cid:80)(cid:78)(cid:79)(cid:76)(cid:89)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:84)(cid:86)(cid:89)(cid:76)(cid:3) (cid:90)(cid:91)(cid:72)(cid:73)(cid:83)(cid:76)(cid:3)(cid:89)(cid:76)(cid:93)(cid:76)(cid:85)(cid:92)(cid:76)(cid:90)(cid:3)(cid:91)(cid:79)(cid:89)(cid:86)(cid:92)(cid:78)(cid:79)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:73)(cid:92)(cid:90)(cid:80)(cid:85)(cid:76)(cid:90)(cid:90)(cid:3)(cid:74)(cid:96)(cid:74)(cid:83)(cid:76)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:90)(cid:91)(cid:76)(cid:72)(cid:75)(cid:96)(cid:3) (cid:84)(cid:72)(cid:89)(cid:78)(cid:80)(cid:85)(cid:3)(cid:72)(cid:87)(cid:87)(cid:89)(cid:76)(cid:74)(cid:80)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:21) H&E EQUIPMENT SERVICES, INC. 2 2023 ANNUAL REPORT SOUND INDUSTRY FUNDAMENTALS COMPLEMENT STRATEGIC INITIATIVES CONTINUING OUR FOCUS ON GROWTH AND EXPANSION (cid:59)(cid:79)(cid:76)(cid:3)(cid:90)(cid:92)(cid:74)(cid:74)(cid:76)(cid:90)(cid:90)(cid:3)(cid:86)(cid:77)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:78)(cid:89)(cid:86)(cid:94)(cid:91)(cid:79)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:76)(cid:95)(cid:87)(cid:72)(cid:85)(cid:90)(cid:80)(cid:86)(cid:85)(cid:3)(cid:90)(cid:91)(cid:89)(cid:72)(cid:91)(cid:76)(cid:78)(cid:96)(cid:3) (cid:79)(cid:72)(cid:90)(cid:3)(cid:74)(cid:89)(cid:76)(cid:72)(cid:91)(cid:76)(cid:75)(cid:3)(cid:78)(cid:89)(cid:76)(cid:72)(cid:91)(cid:76)(cid:89)(cid:3)(cid:86)(cid:87)(cid:87)(cid:86)(cid:89)(cid:91)(cid:92)(cid:85)(cid:80)(cid:91)(cid:80)(cid:76)(cid:90)(cid:3)(cid:77)(cid:86)(cid:89)(cid:3)(cid:47)(cid:13)(cid:44)(cid:21)(cid:3)(cid:54)(cid:92)(cid:89)(cid:3)(cid:83)(cid:72)(cid:89)(cid:78)(cid:76)(cid:89)(cid:3) (cid:78)(cid:76)(cid:86)(cid:78)(cid:89)(cid:72)(cid:87)(cid:79)(cid:80)(cid:74)(cid:3)(cid:77)(cid:86)(cid:86)(cid:91)(cid:87)(cid:89)(cid:80)(cid:85)(cid:91)(cid:3)(cid:79)(cid:72)(cid:90)(cid:3)(cid:75)(cid:89)(cid:80)(cid:93)(cid:76)(cid:85)(cid:3)(cid:80)(cid:85)(cid:74)(cid:89)(cid:76)(cid:72)(cid:90)(cid:76)(cid:75)(cid:3)(cid:74)(cid:92)(cid:90)(cid:91)(cid:86)(cid:84)(cid:76)(cid:89) (cid:76)(cid:85)(cid:78)(cid:72)(cid:78)(cid:76)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:72)(cid:74)(cid:74)(cid:76)(cid:90)(cid:90)(cid:3)(cid:91)(cid:86)(cid:3)(cid:85)(cid:76)(cid:94)(cid:3)(cid:74)(cid:86)(cid:85)(cid:90)(cid:91)(cid:89)(cid:92)(cid:74)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:87)(cid:89)(cid:86)(cid:81)(cid:76)(cid:74)(cid:91)(cid:90)(cid:19) (cid:80)(cid:85)(cid:74)(cid:83)(cid:92)(cid:75)(cid:80)(cid:85)(cid:78)(cid:3)(cid:72)(cid:3)(cid:78)(cid:89)(cid:86)(cid:94)(cid:80)(cid:85)(cid:78)(cid:3)(cid:87)(cid:72)(cid:89)(cid:91)(cid:80)(cid:74)(cid:80)(cid:87)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:80)(cid:85)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:80)(cid:85)(cid:75)(cid:92)(cid:90)(cid:91)(cid:89)(cid:96)(cid:187)(cid:90)(cid:3)(cid:83)(cid:72)(cid:89)(cid:78)(cid:76)(cid:90)(cid:91)(cid:3) (cid:93)(cid:76)(cid:85)(cid:91)(cid:92)(cid:89)(cid:76)(cid:90)(cid:21)(cid:3)(cid:54)(cid:92)(cid:89)(cid:3)(cid:74)(cid:86)(cid:85)(cid:91)(cid:80)(cid:85)(cid:92)(cid:76)(cid:75)(cid:3)(cid:77)(cid:86)(cid:74)(cid:92)(cid:90)(cid:3)(cid:86)(cid:85)(cid:3)(cid:78)(cid:89)(cid:86)(cid:94)(cid:91)(cid:79)(cid:3)(cid:80)(cid:85)(cid:3)(cid:25)(cid:23)(cid:25)(cid:27)(cid:3)(cid:80)(cid:90) (cid:76)(cid:95)(cid:87)(cid:76)(cid:74)(cid:91)(cid:76)(cid:75)(cid:3)(cid:91)(cid:86)(cid:3)(cid:75)(cid:89)(cid:80)(cid:93)(cid:76)(cid:3)(cid:77)(cid:92)(cid:89)(cid:91)(cid:79)(cid:76)(cid:89)(cid:3)(cid:80)(cid:84)(cid:87)(cid:89)(cid:86)(cid:93)(cid:76)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3)(cid:80)(cid:85)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:74)(cid:86)(cid:84)(cid:87)(cid:76)(cid:91)(cid:80)(cid:91)(cid:80)(cid:93)(cid:76)(cid:3) (cid:87)(cid:86)(cid:90)(cid:80)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:72)(cid:74)(cid:89)(cid:86)(cid:90)(cid:90)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:73)(cid:89)(cid:72)(cid:85)(cid:74)(cid:79)(cid:3)(cid:85)(cid:76)(cid:91)(cid:94)(cid:86)(cid:89)(cid:82)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:80)(cid:85)(cid:74)(cid:83)(cid:92)(cid:75)(cid:76)(cid:90)(cid:3)(cid:72)(cid:85)(cid:3) (cid:76)(cid:95)(cid:87)(cid:76)(cid:74)(cid:91)(cid:76)(cid:75)(cid:3)(cid:78)(cid:89)(cid:86)(cid:90)(cid:90)(cid:3)(cid:197)(cid:76)(cid:76)(cid:91)(cid:3)(cid:76)(cid:95)(cid:87)(cid:76)(cid:85)(cid:75)(cid:80)(cid:91)(cid:92)(cid:89)(cid:76)(cid:3)(cid:86)(cid:77)(cid:3)(cid:11)(cid:27)(cid:28)(cid:23)(cid:3)(cid:84)(cid:80)(cid:83)(cid:83)(cid:80)(cid:86)(cid:85)(cid:3)(cid:91)(cid:86)(cid:3)(cid:11)(cid:28)(cid:23)(cid:23) (cid:84)(cid:80)(cid:83)(cid:83)(cid:80)(cid:86)(cid:85)(cid:21)(cid:3)(cid:59)(cid:79)(cid:76)(cid:3)(cid:83)(cid:86)(cid:94)(cid:76)(cid:89)(cid:3)(cid:89)(cid:72)(cid:85)(cid:78)(cid:76)(cid:3)(cid:86)(cid:77)(cid:3)(cid:90)(cid:87)(cid:76)(cid:85)(cid:75)(cid:80)(cid:85)(cid:78)(cid:3)(cid:74)(cid:86)(cid:84)(cid:87)(cid:72)(cid:89)(cid:76)(cid:75)(cid:3)(cid:91)(cid:86)(cid:3)(cid:91)(cid:79)(cid:76) (cid:96)(cid:76)(cid:72)(cid:89)(cid:20)(cid:72)(cid:78)(cid:86)(cid:3)(cid:86)(cid:92)(cid:91)(cid:74)(cid:86)(cid:84)(cid:76)(cid:3)(cid:77)(cid:86)(cid:83)(cid:83)(cid:86)(cid:94)(cid:90)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:89)(cid:76)(cid:74)(cid:86)(cid:89)(cid:75)(cid:3)(cid:76)(cid:95)(cid:87)(cid:76)(cid:85)(cid:75)(cid:80)(cid:91)(cid:92)(cid:89)(cid:76)(cid:90)(cid:3)(cid:80)(cid:85)(cid:3) (cid:25)(cid:23)(cid:25)(cid:26)(cid:3)(cid:94)(cid:79)(cid:80)(cid:74)(cid:79)(cid:3)(cid:80)(cid:85)(cid:74)(cid:83)(cid:92)(cid:75)(cid:76)(cid:75)(cid:3)(cid:72)(cid:74)(cid:74)(cid:76)(cid:83)(cid:76)(cid:89)(cid:72)(cid:91)(cid:76)(cid:75)(cid:3)(cid:74)(cid:72)(cid:87)(cid:80)(cid:91)(cid:72)(cid:83)(cid:3)(cid:86)(cid:92)(cid:91)(cid:83)(cid:72)(cid:96)(cid:90)(cid:3)(cid:86)(cid:93)(cid:76)(cid:89)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3) (cid:90)(cid:76)(cid:74)(cid:86)(cid:85)(cid:75)(cid:3)(cid:79)(cid:72)(cid:83)(cid:77)(cid:3)(cid:86)(cid:77)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:96)(cid:76)(cid:72)(cid:89)(cid:19)(cid:3)(cid:72)(cid:90)(cid:3)(cid:94)(cid:76)(cid:3)(cid:76)(cid:83)(cid:76)(cid:74)(cid:91)(cid:76)(cid:75)(cid:3)(cid:91)(cid:86)(cid:3)(cid:74)(cid:72)(cid:87)(cid:80)(cid:91)(cid:72)(cid:83)(cid:80)(cid:97)(cid:76)(cid:3)(cid:86)(cid:85)(cid:3) (cid:80)(cid:84)(cid:87)(cid:89)(cid:86)(cid:93)(cid:76)(cid:84)(cid:76)(cid:85)(cid:91)(cid:90)(cid:3)(cid:80)(cid:85)(cid:3)(cid:76)(cid:88)(cid:92)(cid:80)(cid:87)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3)(cid:72)(cid:93)(cid:72)(cid:80)(cid:83)(cid:72)(cid:73)(cid:80)(cid:83)(cid:80)(cid:91)(cid:96)(cid:21)(cid:3)(cid:62)(cid:76)(cid:3)(cid:73)(cid:76)(cid:83)(cid:80)(cid:76)(cid:93)(cid:76)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3) (cid:72)(cid:87)(cid:87)(cid:89)(cid:86)(cid:72)(cid:74)(cid:79)(cid:3)(cid:91)(cid:86)(cid:3)(cid:86)(cid:87)(cid:87)(cid:86)(cid:89)(cid:91)(cid:92)(cid:85)(cid:80)(cid:90)(cid:91)(cid:80)(cid:74)(cid:3)(cid:90)(cid:87)(cid:76)(cid:85)(cid:75)(cid:80)(cid:85)(cid:78)(cid:3)(cid:80)(cid:85)(cid:3)(cid:25)(cid:23)(cid:25)(cid:26)(cid:19)(cid:3)(cid:91)(cid:86)(cid:78)(cid:76)(cid:91)(cid:79)(cid:76)(cid:89)(cid:3)(cid:94)(cid:80)(cid:91)(cid:79)(cid:3) (cid:86)(cid:92)(cid:89)(cid:3)(cid:96)(cid:86)(cid:92)(cid:85)(cid:78)(cid:3)(cid:197)(cid:76)(cid:76)(cid:91)(cid:3)(cid:72)(cid:78)(cid:76)(cid:19)(cid:3)(cid:87)(cid:86)(cid:90)(cid:80)(cid:91)(cid:80)(cid:86)(cid:85)(cid:90)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:42)(cid:86)(cid:84)(cid:87)(cid:72)(cid:85)(cid:96)(cid:3)(cid:77)(cid:86)(cid:89)(cid:3)(cid:72)(cid:91)(cid:91)(cid:89)(cid:72)(cid:74)(cid:91)(cid:80)(cid:93)(cid:76)(cid:3) (cid:87)(cid:89)(cid:86)(cid:81)(cid:76)(cid:74)(cid:91)(cid:90)(cid:3)(cid:80)(cid:85)(cid:3)(cid:25)(cid:23)(cid:25)(cid:27)(cid:3)(cid:72)(cid:90)(cid:3)(cid:94)(cid:76)(cid:3)(cid:73)(cid:76)(cid:85)(cid:76)(cid:196)(cid:91)(cid:3)(cid:77)(cid:89)(cid:86)(cid:84)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:74)(cid:86)(cid:85)(cid:91)(cid:80)(cid:85)(cid:92)(cid:80)(cid:85)(cid:78)(cid:3)(cid:78)(cid:89)(cid:86)(cid:94)(cid:91)(cid:79)(cid:3) (cid:80)(cid:85)(cid:3)(cid:74)(cid:86)(cid:85)(cid:90)(cid:91)(cid:89)(cid:92)(cid:74)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:84)(cid:72)(cid:89)(cid:82)(cid:76)(cid:91)(cid:90)(cid:21)(cid:3)(cid:3) (cid:59)(cid:79)(cid:76)(cid:3)(cid:90)(cid:82)(cid:80)(cid:83)(cid:83)(cid:77)(cid:92)(cid:83)(cid:3)(cid:76)(cid:95)(cid:76)(cid:74)(cid:92)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:86)(cid:77)(cid:3)(cid:90)(cid:91)(cid:89)(cid:72)(cid:91)(cid:76)(cid:78)(cid:80)(cid:74)(cid:3)(cid:80)(cid:85)(cid:80)(cid:91)(cid:80)(cid:72)(cid:91)(cid:80)(cid:93)(cid:76)(cid:90)(cid:3)(cid:94)(cid:72)(cid:90)(cid:3)(cid:72)(cid:85)(cid:3)(cid:80)(cid:85)(cid:197)(cid:92)(cid:76)(cid:85)(cid:91)(cid:80)(cid:72)(cid:83)(cid:3) (cid:74)(cid:72)(cid:91)(cid:72)(cid:83)(cid:96)(cid:90)(cid:91)(cid:3)(cid:77)(cid:86)(cid:89)(cid:3)(cid:87)(cid:76)(cid:89)(cid:77)(cid:86)(cid:89)(cid:84)(cid:72)(cid:85)(cid:74)(cid:76)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:78)(cid:89)(cid:86)(cid:94)(cid:91)(cid:79)(cid:3)(cid:80)(cid:85)(cid:3)(cid:25)(cid:23)(cid:25)(cid:26)(cid:21)(cid:3)(cid:49)(cid:92)(cid:90)(cid:91)(cid:3)(cid:72)(cid:90)(cid:3) (cid:80)(cid:85)(cid:197)(cid:92)(cid:76)(cid:85)(cid:91)(cid:80)(cid:72)(cid:83)(cid:3)(cid:94)(cid:72)(cid:90)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:89)(cid:76)(cid:90)(cid:80)(cid:83)(cid:80)(cid:76)(cid:85)(cid:91)(cid:3)(cid:85)(cid:72)(cid:91)(cid:92)(cid:89)(cid:76)(cid:3)(cid:86)(cid:77)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:80)(cid:85)(cid:75)(cid:92)(cid:90)(cid:91)(cid:89)(cid:96)(cid:19)(cid:3)(cid:94)(cid:80)(cid:91)(cid:79)(cid:3)(cid:90)(cid:86)(cid:92)(cid:85)(cid:75)(cid:3) (cid:77)(cid:92)(cid:85)(cid:75)(cid:72)(cid:84)(cid:76)(cid:85)(cid:91)(cid:72)(cid:83)(cid:90)(cid:3)(cid:87)(cid:89)(cid:76)(cid:93)(cid:72)(cid:80)(cid:83)(cid:80)(cid:85)(cid:78)(cid:3)(cid:91)(cid:79)(cid:89)(cid:86)(cid:92)(cid:78)(cid:79)(cid:86)(cid:92)(cid:91)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:96)(cid:76)(cid:72)(cid:89)(cid:3)(cid:75)(cid:76)(cid:90)(cid:87)(cid:80)(cid:91)(cid:76)(cid:3)(cid:72)(cid:3) (cid:74)(cid:79)(cid:72)(cid:83)(cid:83)(cid:76)(cid:85)(cid:78)(cid:80)(cid:85)(cid:78)(cid:3)(cid:84)(cid:72)(cid:74)(cid:89)(cid:86)(cid:76)(cid:74)(cid:86)(cid:85)(cid:86)(cid:84)(cid:80)(cid:74)(cid:3)(cid:76)(cid:85)(cid:93)(cid:80)(cid:89)(cid:86)(cid:85)(cid:84)(cid:76)(cid:85)(cid:91)(cid:19)(cid:3)(cid:94)(cid:79)(cid:80)(cid:74)(cid:79)(cid:3)(cid:80)(cid:85)(cid:74)(cid:83)(cid:92)(cid:75)(cid:76)(cid:75)(cid:3)(cid:72)(cid:3) (cid:90)(cid:91)(cid:76)(cid:72)(cid:75)(cid:96)(cid:3)(cid:89)(cid:80)(cid:90)(cid:76)(cid:3)(cid:80)(cid:85)(cid:3)(cid:80)(cid:85)(cid:91)(cid:76)(cid:89)(cid:76)(cid:90)(cid:91)(cid:3)(cid:89)(cid:72)(cid:91)(cid:76)(cid:90)(cid:21)(cid:3)(cid:40)(cid:74)(cid:74)(cid:86)(cid:89)(cid:75)(cid:80)(cid:85)(cid:78)(cid:3)(cid:91)(cid:86)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)U.S. Census Bureau(cid:19)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:93)(cid:72)(cid:83)(cid:92)(cid:76)(cid:3)(cid:86)(cid:77)(cid:3)(cid:74)(cid:86)(cid:85)(cid:90)(cid:91)(cid:89)(cid:92)(cid:74)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:90)(cid:87)(cid:76)(cid:85)(cid:75)(cid:80)(cid:85)(cid:78)(cid:3)(cid:80)(cid:85)(cid:3)(cid:25)(cid:23)(cid:25)(cid:26)(cid:3)(cid:89)(cid:86)(cid:90)(cid:76)(cid:3) (cid:30)(cid:21)(cid:23)(cid:12)(cid:3)(cid:74)(cid:86)(cid:84)(cid:87)(cid:72)(cid:89)(cid:76)(cid:75)(cid:3)(cid:91)(cid:86)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:87)(cid:89)(cid:76)(cid:93)(cid:80)(cid:86)(cid:92)(cid:90)(cid:3)(cid:96)(cid:76)(cid:72)(cid:89)(cid:187)(cid:90)(cid:3)(cid:91)(cid:86)(cid:91)(cid:72)(cid:83)(cid:21)(cid:3)(cid:59)(cid:79)(cid:76)(cid:3)(cid:84)(cid:76)(cid:72)(cid:90)(cid:92)(cid:89)(cid:76) (cid:80)(cid:85)(cid:74)(cid:83)(cid:92)(cid:75)(cid:76)(cid:75)(cid:3)(cid:78)(cid:89)(cid:86)(cid:94)(cid:91)(cid:79)(cid:3)(cid:86)(cid:77)(cid:3)(cid:24)(cid:32)(cid:21)(cid:31)(cid:12)(cid:3)(cid:80)(cid:85)(cid:3)(cid:85)(cid:86)(cid:85)(cid:20)(cid:89)(cid:76)(cid:90)(cid:80)(cid:75)(cid:76)(cid:85)(cid:91)(cid:80)(cid:72)(cid:83)(cid:3)(cid:74)(cid:86)(cid:85)(cid:90)(cid:91)(cid:89)(cid:92)(cid:74)(cid:91)(cid:80)(cid:86)(cid:85) (cid:90)(cid:87)(cid:76)(cid:85)(cid:75)(cid:80)(cid:85)(cid:78)(cid:3)(cid:91)(cid:79)(cid:72)(cid:91)(cid:3)(cid:83)(cid:76)(cid:75)(cid:3)(cid:91)(cid:86)(cid:3)(cid:79)(cid:76)(cid:72)(cid:83)(cid:91)(cid:79)(cid:96)(cid:3)(cid:74)(cid:86)(cid:85)(cid:90)(cid:91)(cid:89)(cid:92)(cid:74)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:87)(cid:89)(cid:86)(cid:81)(cid:76)(cid:74)(cid:91)(cid:3)(cid:73)(cid:72)(cid:74)(cid:82)(cid:83)(cid:86)(cid:78)(cid:90) (cid:80)(cid:85)(cid:3)(cid:73)(cid:86)(cid:91)(cid:79)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:85)(cid:86)(cid:85)(cid:20)(cid:89)(cid:76)(cid:90)(cid:80)(cid:75)(cid:76)(cid:85)(cid:91)(cid:80)(cid:72)(cid:83)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:80)(cid:85)(cid:75)(cid:92)(cid:90)(cid:91)(cid:89)(cid:80)(cid:72)(cid:83)(cid:3)(cid:90)(cid:76)(cid:74)(cid:91)(cid:86)(cid:89)(cid:90)(cid:19)(cid:3)(cid:91)(cid:94)(cid:86)(cid:3) (cid:76)(cid:90)(cid:90)(cid:76)(cid:85)(cid:91)(cid:80)(cid:72)(cid:83)(cid:3)(cid:76)(cid:85)(cid:75)(cid:3)(cid:84)(cid:72)(cid:89)(cid:82)(cid:76)(cid:91)(cid:90)(cid:3)(cid:89)(cid:76)(cid:87)(cid:89)(cid:76)(cid:90)(cid:76)(cid:85)(cid:91)(cid:80)(cid:85)(cid:78)(cid:3)(cid:72)(cid:83)(cid:84)(cid:86)(cid:90)(cid:91)(cid:3)(cid:31)(cid:23)(cid:12)(cid:3)(cid:86)(cid:77)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:91)(cid:86)(cid:91)(cid:72)(cid:83) (cid:89)(cid:76)(cid:93)(cid:76)(cid:85)(cid:92)(cid:76)(cid:90)(cid:3)(cid:80)(cid:85)(cid:3)(cid:25)(cid:23)(cid:25)(cid:26)(cid:21)(cid:3)(cid:40)(cid:83)(cid:90)(cid:86)(cid:19)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)American Rental Association (cid:93)(cid:72)(cid:83)(cid:80)(cid:75)(cid:72)(cid:91)(cid:76)(cid:75)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:80)(cid:85)(cid:75)(cid:92)(cid:90)(cid:91)(cid:89)(cid:96)(cid:187)(cid:90)(cid:3)(cid:90)(cid:86)(cid:92)(cid:85)(cid:75)(cid:3)(cid:77)(cid:92)(cid:85)(cid:75)(cid:72)(cid:84)(cid:76)(cid:85)(cid:91)(cid:72)(cid:83)(cid:90)(cid:19)(cid:3)(cid:89)(cid:76)(cid:87)(cid:86)(cid:89)(cid:91)(cid:80)(cid:85)(cid:78)(cid:3)(cid:91)(cid:79)(cid:72)(cid:91)(cid:3) (cid:60)(cid:21)(cid:58)(cid:21)(cid:3)(cid:74)(cid:86)(cid:85)(cid:90)(cid:91)(cid:89)(cid:92)(cid:74)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:80)(cid:85)(cid:75)(cid:92)(cid:90)(cid:91)(cid:89)(cid:80)(cid:72)(cid:83)(cid:3)(cid:76)(cid:88)(cid:92)(cid:80)(cid:87)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3)(cid:89)(cid:76)(cid:93)(cid:76)(cid:85)(cid:92)(cid:76)(cid:90)(cid:3)(cid:80)(cid:85)(cid:3)(cid:25)(cid:23)(cid:25)(cid:26)(cid:3) (cid:91)(cid:86)(cid:91)(cid:72)(cid:83)(cid:76)(cid:75)(cid:3)(cid:11)(cid:28)(cid:29)(cid:21)(cid:30)(cid:3)(cid:73)(cid:80)(cid:83)(cid:83)(cid:80)(cid:86)(cid:85)(cid:19)(cid:3)(cid:86)(cid:89)(cid:3)(cid:72)(cid:3)(cid:24)(cid:26)(cid:21)(cid:32)(cid:12)(cid:3)(cid:96)(cid:76)(cid:72)(cid:89)(cid:20)(cid:86)(cid:93)(cid:76)(cid:89)(cid:20)(cid:96)(cid:76)(cid:72)(cid:89)(cid:3)(cid:80)(cid:85)(cid:74)(cid:89)(cid:76)(cid:72)(cid:90)(cid:76)(cid:21) (cid:59)(cid:79)(cid:76)(cid:3)(cid:90)(cid:91)(cid:89)(cid:86)(cid:85)(cid:78)(cid:3)(cid:78)(cid:89)(cid:86)(cid:94)(cid:91)(cid:79)(cid:3)(cid:94)(cid:72)(cid:90)(cid:3)(cid:90)(cid:92)(cid:87)(cid:87)(cid:86)(cid:89)(cid:91)(cid:76)(cid:75)(cid:3)(cid:73)(cid:96)(cid:3)(cid:80)(cid:84)(cid:87)(cid:89)(cid:86)(cid:93)(cid:76)(cid:84)(cid:76)(cid:85)(cid:91)(cid:90)(cid:3)(cid:80)(cid:85)(cid:3)(cid:89)(cid:76)(cid:85)(cid:91)(cid:72)(cid:83) (cid:89)(cid:72)(cid:91)(cid:76)(cid:90)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:79)(cid:76)(cid:72)(cid:83)(cid:91)(cid:79)(cid:96)(cid:3)(cid:92)(cid:91)(cid:80)(cid:83)(cid:80)(cid:97)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:86)(cid:77)(cid:3)(cid:76)(cid:88)(cid:92)(cid:80)(cid:87)(cid:84)(cid:76)(cid:85)(cid:91)(cid:21)(cid:3)(cid:54)(cid:92)(cid:89)(cid:3)(cid:89)(cid:76)(cid:85)(cid:91)(cid:72)(cid:83)(cid:3)(cid:89)(cid:72)(cid:91)(cid:76)(cid:90)(cid:3) (cid:74)(cid:83)(cid:86)(cid:90)(cid:76)(cid:75)(cid:3)(cid:25)(cid:23)(cid:25)(cid:26)(cid:3)(cid:92)(cid:87)(cid:3)(cid:72)(cid:85)(cid:3)(cid:72)(cid:93)(cid:76)(cid:89)(cid:72)(cid:78)(cid:76)(cid:3)(cid:86)(cid:77)(cid:3)(cid:28)(cid:21)(cid:29)(cid:12)(cid:19)(cid:3)(cid:72)(cid:75)(cid:75)(cid:80)(cid:85)(cid:78)(cid:3)(cid:91)(cid:86)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:72)(cid:93)(cid:76)(cid:89)(cid:72)(cid:78)(cid:76)(cid:3) (cid:80)(cid:84)(cid:87)(cid:89)(cid:86)(cid:93)(cid:76)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3)(cid:86)(cid:77)(cid:3)(cid:32)(cid:21)(cid:26)(cid:12)(cid:3)(cid:80)(cid:85)(cid:3)(cid:25)(cid:23)(cid:25)(cid:25)(cid:21)(cid:3)(cid:58)(cid:80)(cid:85)(cid:74)(cid:76)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:73)(cid:76)(cid:78)(cid:80)(cid:85)(cid:85)(cid:80)(cid:85)(cid:78)(cid:3)(cid:86)(cid:77)(cid:3)(cid:25)(cid:23)(cid:25)(cid:24)(cid:19) (cid:94)(cid:76)(cid:3)(cid:79)(cid:72)(cid:93)(cid:76)(cid:3)(cid:76)(cid:85)(cid:81)(cid:86)(cid:96)(cid:76)(cid:75)(cid:3)(cid:72)(cid:85)(cid:3)(cid:76)(cid:90)(cid:91)(cid:80)(cid:84)(cid:72)(cid:91)(cid:76)(cid:75)(cid:3)(cid:24)(cid:28)(cid:21)(cid:31)(cid:12)(cid:3)(cid:80)(cid:84)(cid:87)(cid:89)(cid:86)(cid:93)(cid:76)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3)(cid:80)(cid:85)(cid:3)(cid:89)(cid:72)(cid:91)(cid:76)(cid:90)(cid:19) (cid:94)(cid:79)(cid:80)(cid:74)(cid:79)(cid:3)(cid:94)(cid:76)(cid:3)(cid:93)(cid:80)(cid:76)(cid:94)(cid:3)(cid:72)(cid:90)(cid:3)(cid:73)(cid:76)(cid:90)(cid:91)(cid:3)(cid:80)(cid:85)(cid:3)(cid:74)(cid:83)(cid:72)(cid:90)(cid:90)(cid:21)(cid:3)(cid:40)(cid:93)(cid:76)(cid:89)(cid:72)(cid:78)(cid:76)(cid:3)(cid:197)(cid:76)(cid:76)(cid:91)(cid:3)(cid:92)(cid:91)(cid:80)(cid:83)(cid:80)(cid:97)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:80)(cid:85) (cid:25)(cid:23)(cid:25)(cid:26)(cid:3)(cid:86)(cid:77)(cid:3)(cid:29)(cid:31)(cid:21)(cid:31)(cid:12)(cid:3)(cid:89)(cid:76)(cid:87)(cid:89)(cid:76)(cid:90)(cid:76)(cid:85)(cid:91)(cid:76)(cid:75)(cid:3)(cid:72)(cid:3)(cid:85)(cid:86)(cid:89)(cid:84)(cid:72)(cid:83)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:79)(cid:76)(cid:72)(cid:83)(cid:91)(cid:79)(cid:96)(cid:3)(cid:86)(cid:92)(cid:91)(cid:74)(cid:86)(cid:84)(cid:76)(cid:3) (cid:74)(cid:86)(cid:84)(cid:87)(cid:72)(cid:89)(cid:76)(cid:75)(cid:3)(cid:91)(cid:86)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:92)(cid:85)(cid:90)(cid:92)(cid:90)(cid:91)(cid:72)(cid:80)(cid:85)(cid:72)(cid:73)(cid:83)(cid:76)(cid:3)(cid:84)(cid:76)(cid:72)(cid:90)(cid:92)(cid:89)(cid:76)(cid:3)(cid:76)(cid:95)(cid:87)(cid:76)(cid:89)(cid:80)(cid:76)(cid:85)(cid:74)(cid:76)(cid:75)(cid:3)(cid:80)(cid:85) (cid:25)(cid:23)(cid:25)(cid:25)(cid:19)(cid:3)(cid:94)(cid:79)(cid:80)(cid:74)(cid:79)(cid:3)(cid:94)(cid:72)(cid:90)(cid:3)(cid:90)(cid:80)(cid:78)(cid:85)(cid:80)(cid:196)(cid:74)(cid:72)(cid:85)(cid:91)(cid:83)(cid:96)(cid:3)(cid:76)(cid:83)(cid:76)(cid:93)(cid:72)(cid:91)(cid:76)(cid:75)(cid:3)(cid:73)(cid:96)(cid:3)(cid:76)(cid:88)(cid:92)(cid:80)(cid:87)(cid:84)(cid:76)(cid:85)(cid:91) (cid:90)(cid:92)(cid:87)(cid:87)(cid:83)(cid:96)(cid:3)(cid:75)(cid:80)(cid:90)(cid:89)(cid:92)(cid:87)(cid:91)(cid:80)(cid:86)(cid:85)(cid:90)(cid:21) (cid:57)(cid:86)(cid:73)(cid:92)(cid:90)(cid:91)(cid:3)(cid:197)(cid:76)(cid:76)(cid:91)(cid:3)(cid:80)(cid:85)(cid:93)(cid:76)(cid:90)(cid:91)(cid:84)(cid:76)(cid:85)(cid:91)(cid:19)(cid:3)(cid:91)(cid:86)(cid:78)(cid:76)(cid:91)(cid:79)(cid:76)(cid:89)(cid:3)(cid:94)(cid:80)(cid:91)(cid:79)(cid:3)(cid:77)(cid:92)(cid:89)(cid:91)(cid:79)(cid:76)(cid:89)(cid:3)(cid:73)(cid:89)(cid:72)(cid:85)(cid:74)(cid:79)(cid:3) (cid:76)(cid:95)(cid:87)(cid:72)(cid:85)(cid:90)(cid:80)(cid:86)(cid:85)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:77)(cid:92)(cid:85)(cid:75)(cid:72)(cid:84)(cid:76)(cid:85)(cid:91)(cid:72)(cid:83)(cid:3)(cid:75)(cid:92)(cid:89)(cid:72)(cid:73)(cid:80)(cid:83)(cid:80)(cid:91)(cid:96)(cid:3)(cid:86)(cid:77)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:80)(cid:85)(cid:75)(cid:92)(cid:90)(cid:91)(cid:89)(cid:96)(cid:3) (cid:90)(cid:91)(cid:86)(cid:86)(cid:75)(cid:3)(cid:86)(cid:92)(cid:91)(cid:3)(cid:72)(cid:90)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:82)(cid:76)(cid:96)(cid:3)(cid:74)(cid:86)(cid:85)(cid:91)(cid:89)(cid:80)(cid:73)(cid:92)(cid:91)(cid:86)(cid:89)(cid:90)(cid:3)(cid:80)(cid:85)(cid:3)(cid:72)(cid:74)(cid:79)(cid:80)(cid:76)(cid:93)(cid:80)(cid:85)(cid:78)(cid:3)(cid:72)(cid:85)(cid:86)(cid:91)(cid:79)(cid:76)(cid:89)(cid:3) (cid:96)(cid:76)(cid:72)(cid:89)(cid:3)(cid:86)(cid:77)(cid:3)(cid:90)(cid:91)(cid:76)(cid:83)(cid:83)(cid:72)(cid:89)(cid:3)(cid:196)(cid:85)(cid:72)(cid:85)(cid:74)(cid:80)(cid:72)(cid:83)(cid:3)(cid:87)(cid:76)(cid:89)(cid:77)(cid:86)(cid:89)(cid:84)(cid:72)(cid:85)(cid:74)(cid:76)(cid:21)(cid:3)(cid:59)(cid:79)(cid:76)(cid:3)(cid:77)(cid:86)(cid:83)(cid:83)(cid:86)(cid:94)(cid:80)(cid:85)(cid:78)(cid:3) (cid:90)(cid:92)(cid:84)(cid:84)(cid:72)(cid:89)(cid:96)(cid:3)(cid:90)(cid:76)(cid:89)(cid:93)(cid:76)(cid:90)(cid:3)(cid:91)(cid:86)(cid:3)(cid:79)(cid:80)(cid:78)(cid:79)(cid:83)(cid:80)(cid:78)(cid:79)(cid:91)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:80)(cid:84)(cid:87)(cid:89)(cid:86)(cid:93)(cid:76)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3)(cid:80)(cid:85)(cid:3)(cid:74)(cid:76)(cid:89)(cid:91)(cid:72)(cid:80)(cid:85)(cid:3) (cid:25)(cid:23)(cid:25)(cid:26)(cid:3)(cid:82)(cid:76)(cid:96)(cid:3)(cid:196)(cid:85)(cid:72)(cid:85)(cid:74)(cid:80)(cid:72)(cid:83)(cid:3)(cid:84)(cid:76)(cid:91)(cid:89)(cid:80)(cid:74)(cid:90)(cid:3)(cid:74)(cid:86)(cid:84)(cid:87)(cid:72)(cid:89)(cid:76)(cid:75)(cid:3)(cid:91)(cid:86)(cid:3)(cid:89)(cid:76)(cid:90)(cid:92)(cid:83)(cid:91)(cid:90)(cid:3)(cid:80)(cid:85)(cid:3)(cid:25)(cid:23)(cid:25)(cid:25)(cid:33) • Total revenues improved 18.1% to a record $1.5 billion. • Total equipment rental revenue grew 24.1% to a record $1.2 billion. • Consolidated gross profit improved 23.3% to a record $684.5 million, resulting in a record gross profit margin of 46.6%. • Adjusted EBITDA(1) grew 26.7% to a record $688.2 million. ) • Income from operations improved 21.3% to $276.7 million. • Net income from continuing operations rose 26.6% to $169.3 million. • Net cash provided by operating activities improved 29.4% to $405.5 million. (cid:15)(cid:24)(cid:16) (cid:40)(cid:75)(cid:81)(cid:92)(cid:90)(cid:91)(cid:76)(cid:75)(cid:3)(cid:44)(cid:41)(cid:48)(cid:59)(cid:43)(cid:40)(cid:3)(cid:77)(cid:89)(cid:86)(cid:84)(cid:3)(cid:74)(cid:86)(cid:85)(cid:91)(cid:80)(cid:85)(cid:92)(cid:80)(cid:85)(cid:78)(cid:3)(cid:86)(cid:87)(cid:76)(cid:89)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:90)(cid:3)(cid:80)(cid:90)(cid:3)(cid:72)(cid:3)(cid:85)(cid:86)(cid:85)(cid:20)(cid:46)(cid:40)(cid:40)(cid:55)(cid:3)(cid:196)(cid:85)(cid:72)(cid:85)(cid:74)(cid:80)(cid:72)(cid:83)(cid:3)(cid:84)(cid:76)(cid:72)(cid:90)(cid:92)(cid:89)(cid:76)(cid:21)(cid:3)(cid:58)(cid:76)(cid:76)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:58)(cid:92)(cid:87)(cid:87)(cid:83)(cid:76)(cid:84)(cid:76)(cid:85)(cid:91)(cid:72)(cid:83)(cid:3)(cid:58)(cid:74)(cid:79)(cid:76)(cid:75)(cid:92)(cid:83)(cid:76)(cid:3)(cid:77)(cid:86)(cid:83)(cid:83)(cid:86)(cid:94)(cid:80)(cid:85)(cid:78)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:42)(cid:86)(cid:84)(cid:87)(cid:72)(cid:85)(cid:96)(cid:187)(cid:90)(cid:3)(cid:45)(cid:86)(cid:89)(cid:84)(cid:3)(cid:24)(cid:23)(cid:20)(cid:50)(cid:3)(cid:77)(cid:86)(cid:89)(cid:3)(cid:72) (cid:89)(cid:76)(cid:74)(cid:86)(cid:85)(cid:74)(cid:80)(cid:83)(cid:80)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:91)(cid:86)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:74)(cid:86)(cid:84)(cid:87)(cid:72)(cid:89)(cid:72)(cid:73)(cid:83)(cid:76)(cid:3)(cid:46)(cid:40)(cid:40)(cid:55)(cid:3)(cid:84)(cid:76)(cid:72)(cid:90)(cid:92)(cid:89)(cid:76)(cid:21) H&E EQUIPMENT SERVICES, INC. 3 2023 ANNUAL REPORT (cid:57)(cid:76)(cid:78)(cid:72)(cid:89)(cid:75)(cid:80)(cid:85)(cid:78)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:73)(cid:89)(cid:72)(cid:85)(cid:74)(cid:79)(cid:3)(cid:85)(cid:76)(cid:91)(cid:94)(cid:86)(cid:89)(cid:82)(cid:19)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:90)(cid:91)(cid:89)(cid:72)(cid:91)(cid:76)(cid:78)(cid:80)(cid:74)(cid:3)(cid:87)(cid:83)(cid:72)(cid:85)(cid:90)(cid:3)(cid:80)(cid:85)(cid:3)(cid:25)(cid:23)(cid:25)(cid:27)(cid:3) (cid:94)(cid:80)(cid:83)(cid:83)(cid:3)(cid:72)(cid:78)(cid:72)(cid:80)(cid:85)(cid:3)(cid:80)(cid:85)(cid:74)(cid:83)(cid:92)(cid:75)(cid:76)(cid:3)(cid:24)(cid:25)(cid:3)(cid:91)(cid:86)(cid:3)(cid:24)(cid:28)(cid:3)(cid:85)(cid:76)(cid:94)(cid:3)(cid:83)(cid:86)(cid:74)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:86)(cid:87)(cid:76)(cid:85)(cid:80)(cid:85)(cid:78)(cid:90)(cid:3)(cid:77)(cid:89)(cid:86)(cid:84)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3) (cid:73)(cid:89)(cid:72)(cid:85)(cid:74)(cid:79)(cid:3)(cid:76)(cid:95)(cid:87)(cid:72)(cid:85)(cid:90)(cid:80)(cid:86)(cid:85)(cid:3)(cid:87)(cid:89)(cid:86)(cid:78)(cid:89)(cid:72)(cid:84)(cid:3)(cid:72)(cid:90)(cid:3)(cid:94)(cid:76)(cid:3)(cid:74)(cid:86)(cid:85)(cid:91)(cid:80)(cid:85)(cid:92)(cid:76)(cid:3)(cid:72)(cid:3)(cid:87)(cid:89)(cid:86)(cid:74)(cid:76)(cid:90)(cid:90)(cid:3)(cid:86)(cid:77)(cid:3) (cid:78)(cid:89)(cid:72)(cid:75)(cid:92)(cid:72)(cid:83)(cid:3)(cid:78)(cid:89)(cid:86)(cid:94)(cid:91)(cid:79)(cid:3)(cid:80)(cid:85)(cid:3)(cid:73)(cid:89)(cid:72)(cid:85)(cid:74)(cid:79)(cid:3)(cid:75)(cid:76)(cid:85)(cid:90)(cid:80)(cid:91)(cid:96)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:86)(cid:87)(cid:76)(cid:89)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:72)(cid:83)(cid:3)(cid:90)(cid:74)(cid:72)(cid:83)(cid:76)(cid:21)(cid:3) (cid:48)(cid:85)(cid:3)(cid:72)(cid:75)(cid:75)(cid:80)(cid:91)(cid:80)(cid:86)(cid:85)(cid:19)(cid:3)(cid:73)(cid:89)(cid:72)(cid:85)(cid:74)(cid:79)(cid:3)(cid:76)(cid:95)(cid:87)(cid:72)(cid:85)(cid:90)(cid:80)(cid:86)(cid:85)(cid:3)(cid:74)(cid:86)(cid:92)(cid:83)(cid:75)(cid:3)(cid:73)(cid:76)(cid:3)(cid:76)(cid:85)(cid:79)(cid:72)(cid:85)(cid:74)(cid:76)(cid:75)(cid:3)(cid:91)(cid:79)(cid:89)(cid:86)(cid:92)(cid:78)(cid:79)(cid:3) (cid:72)(cid:91)(cid:91)(cid:89)(cid:72)(cid:74)(cid:91)(cid:80)(cid:93)(cid:76)(cid:3)(cid:72)(cid:74)(cid:88)(cid:92)(cid:80)(cid:90)(cid:80)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:86)(cid:87)(cid:87)(cid:86)(cid:89)(cid:91)(cid:92)(cid:85)(cid:80)(cid:91)(cid:80)(cid:76)(cid:90)(cid:3)(cid:91)(cid:79)(cid:72)(cid:91)(cid:3)(cid:86)(cid:584)(cid:76)(cid:89)(cid:3)(cid:72)(cid:74)(cid:74)(cid:76)(cid:90)(cid:90)(cid:3)(cid:91)(cid:86)(cid:3) (cid:93)(cid:80)(cid:73)(cid:89)(cid:72)(cid:85)(cid:91)(cid:3)(cid:74)(cid:86)(cid:85)(cid:90)(cid:91)(cid:89)(cid:92)(cid:74)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:84)(cid:72)(cid:89)(cid:82)(cid:76)(cid:91)(cid:90)(cid:3)(cid:80)(cid:85)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:60)(cid:21)(cid:58)(cid:21)(cid:19)(cid:3)(cid:72)(cid:90)(cid:3)(cid:75)(cid:76)(cid:84)(cid:86)(cid:85)(cid:90)(cid:91)(cid:89)(cid:72)(cid:91)(cid:76)(cid:75)(cid:3) (cid:73)(cid:96)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:83)(cid:72)(cid:91)(cid:76)(cid:90)(cid:91)(cid:3)(cid:72)(cid:74)(cid:88)(cid:92)(cid:80)(cid:90)(cid:80)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:94)(cid:79)(cid:80)(cid:74)(cid:79)(cid:3)(cid:74)(cid:83)(cid:86)(cid:90)(cid:76)(cid:75)(cid:3)(cid:80)(cid:85)(cid:3)(cid:49)(cid:72)(cid:85)(cid:92)(cid:72)(cid:89)(cid:96)(cid:3)(cid:25)(cid:23)(cid:25)(cid:27)(cid:19)(cid:3) (cid:72)(cid:75)(cid:75)(cid:80)(cid:85)(cid:78)(cid:3)(cid:86)(cid:85)(cid:76)(cid:3)(cid:83)(cid:86)(cid:74)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:76)(cid:72)(cid:74)(cid:79)(cid:3)(cid:80)(cid:85)(cid:3)(cid:55)(cid:79)(cid:86)(cid:76)(cid:85)(cid:80)(cid:95)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:43)(cid:76)(cid:85)(cid:93)(cid:76)(cid:89)(cid:21)(cid:3) CONFIDENCE IN INDUSTRY FUNDAMENTALS CONTINUES INTO 2024 k (cid:48)(cid:85)(cid:75)(cid:92)(cid:90)(cid:91)(cid:89)(cid:96)(cid:3)(cid:77)(cid:92)(cid:85)(cid:75)(cid:72)(cid:84)(cid:76)(cid:85)(cid:91)(cid:72)(cid:83)(cid:90)(cid:3)(cid:80)(cid:85)(cid:3)(cid:25)(cid:23)(cid:25)(cid:27)(cid:3)(cid:72)(cid:89)(cid:76)(cid:3)(cid:76)(cid:95)(cid:87)(cid:76)(cid:74)(cid:91)(cid:76)(cid:75)(cid:3)(cid:91)(cid:86)(cid:3)(cid:89)(cid:76)(cid:84)(cid:72)(cid:80)(cid:85) (cid:90)(cid:86)(cid:83)(cid:80)(cid:75)(cid:19)(cid:3)(cid:94)(cid:80)(cid:91)(cid:79)(cid:3)(cid:89)(cid:76)(cid:80)(cid:85)(cid:77)(cid:86)(cid:89)(cid:74)(cid:76)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3)(cid:77)(cid:89)(cid:86)(cid:84)(cid:3)(cid:90)(cid:76)(cid:93)(cid:76)(cid:89)(cid:72)(cid:83)(cid:3)(cid:90)(cid:80)(cid:78)(cid:85)(cid:80)(cid:196)(cid:74)(cid:72)(cid:85)(cid:91)(cid:3)(cid:77)(cid:72)(cid:74)(cid:91)(cid:86)(cid:89)(cid:90)(cid:21)(cid:3) (cid:59)(cid:79)(cid:76)(cid:90)(cid:76)(cid:3)(cid:77)(cid:72)(cid:74)(cid:91)(cid:86)(cid:89)(cid:90)(cid:3)(cid:80)(cid:85)(cid:74)(cid:83)(cid:92)(cid:75)(cid:76)(cid:3)(cid:72)(cid:3)(cid:77)(cid:86)(cid:89)(cid:76)(cid:74)(cid:72)(cid:90)(cid:91)(cid:3)(cid:73)(cid:96)(cid:3)Dodge Construction Network(cid:3)(cid:87)(cid:89)(cid:86)(cid:81)(cid:76)(cid:74)(cid:91)(cid:80)(cid:85)(cid:78)(cid:3)(cid:72)(cid:3)(cid:30)(cid:12)(cid:3)(cid:96)(cid:76)(cid:72)(cid:89)(cid:20)(cid:86)(cid:93)(cid:76)(cid:89)(cid:20)(cid:96)(cid:76)(cid:72)(cid:89)(cid:3)(cid:80)(cid:84)(cid:87)(cid:89)(cid:86)(cid:93)(cid:76)(cid:84)(cid:76)(cid:85)(cid:91) (cid:80)(cid:85)(cid:3)(cid:74)(cid:86)(cid:85)(cid:90)(cid:91)(cid:89)(cid:92)(cid:74)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:90)(cid:91)(cid:72)(cid:89)(cid:91)(cid:90)(cid:19)(cid:3)(cid:83)(cid:76)(cid:75)(cid:3)(cid:73)(cid:96)(cid:3)(cid:74)(cid:86)(cid:85)(cid:91)(cid:80)(cid:85)(cid:92)(cid:76)(cid:75)(cid:3)(cid:78)(cid:89)(cid:86)(cid:94)(cid:91)(cid:79)(cid:3)(cid:80)(cid:85)(cid:3) (cid:84)(cid:72)(cid:85)(cid:92)(cid:77)(cid:72)(cid:74)(cid:91)(cid:92)(cid:89)(cid:80)(cid:85)(cid:78)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:80)(cid:85)(cid:90)(cid:91)(cid:80)(cid:91)(cid:92)(cid:91)(cid:80)(cid:86)(cid:85)(cid:72)(cid:83)(cid:3)(cid:87)(cid:89)(cid:86)(cid:81)(cid:76)(cid:74)(cid:91)(cid:90)(cid:19)(cid:3)(cid:94)(cid:79)(cid:80)(cid:74)(cid:79)(cid:3)(cid:80)(cid:85)(cid:74)(cid:83)(cid:92)(cid:75)(cid:76)(cid:3) (cid:89)(cid:76)(cid:90)(cid:79)(cid:86)(cid:89)(cid:80)(cid:85)(cid:78)(cid:3)(cid:72)(cid:74)(cid:91)(cid:80)(cid:93)(cid:80)(cid:91)(cid:96)(cid:19)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:78)(cid:89)(cid:76)(cid:72)(cid:91)(cid:76)(cid:89)(cid:3)(cid:90)(cid:87)(cid:76)(cid:85)(cid:75)(cid:80)(cid:85)(cid:78)(cid:3)(cid:86)(cid:85)(cid:3)(cid:80)(cid:85)(cid:77)(cid:89)(cid:72)(cid:90)(cid:91)(cid:89)(cid:92)(cid:74)(cid:91)(cid:92)(cid:89)(cid:76)(cid:3) (cid:87)(cid:89)(cid:86)(cid:78)(cid:89)(cid:72)(cid:84)(cid:90)(cid:21)(cid:3)(cid:40)(cid:83)(cid:90)(cid:86)(cid:19)(cid:3)(cid:74)(cid:92)(cid:90)(cid:91)(cid:86)(cid:84)(cid:76)(cid:89)(cid:90)(cid:3)(cid:74)(cid:86)(cid:85)(cid:91)(cid:80)(cid:85)(cid:92)(cid:76)(cid:3)(cid:91)(cid:86)(cid:3)(cid:74)(cid:86)(cid:85)(cid:93)(cid:76)(cid:96)(cid:3)(cid:72)(cid:85) (cid:76)(cid:85)(cid:74)(cid:86)(cid:92)(cid:89)(cid:72)(cid:78)(cid:80)(cid:85)(cid:78)(cid:3)(cid:77)(cid:86)(cid:89)(cid:76)(cid:74)(cid:72)(cid:90)(cid:91)(cid:3)(cid:86)(cid:77)(cid:3)(cid:85)(cid:86)(cid:85)(cid:20)(cid:89)(cid:76)(cid:90)(cid:80)(cid:75)(cid:76)(cid:85)(cid:91)(cid:80)(cid:72)(cid:83)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:80)(cid:85)(cid:75)(cid:92)(cid:90)(cid:91)(cid:89)(cid:80)(cid:72)(cid:83) (cid:87)(cid:89)(cid:86)(cid:81)(cid:76)(cid:74)(cid:91)(cid:3)(cid:72)(cid:74)(cid:91)(cid:80)(cid:93)(cid:80)(cid:91)(cid:96)(cid:19)(cid:3)(cid:94)(cid:80)(cid:91)(cid:79)(cid:3)(cid:90)(cid:91)(cid:72)(cid:73)(cid:83)(cid:76)(cid:3)(cid:91)(cid:86)(cid:3)(cid:89)(cid:80)(cid:90)(cid:80)(cid:85)(cid:78)(cid:3)(cid:73)(cid:72)(cid:74)(cid:82)(cid:83)(cid:86)(cid:78)(cid:90)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:80)(cid:85)(cid:74)(cid:89)(cid:76)(cid:72)(cid:90)(cid:76)(cid:75) (cid:87)(cid:89)(cid:86)(cid:81)(cid:76)(cid:74)(cid:91)(cid:3)(cid:87)(cid:83)(cid:72)(cid:85)(cid:85)(cid:80)(cid:85)(cid:78)(cid:21)(cid:3)(cid:59)(cid:79)(cid:76)(cid:3)(cid:79)(cid:76)(cid:72)(cid:83)(cid:91)(cid:79)(cid:96)(cid:3)(cid:73)(cid:72)(cid:74)(cid:82)(cid:83)(cid:86)(cid:78)(cid:90)(cid:3)(cid:72)(cid:89)(cid:76)(cid:3)(cid:76)(cid:95)(cid:87)(cid:76)(cid:74)(cid:91)(cid:76)(cid:75)(cid:3)(cid:91)(cid:86) (cid:90)(cid:92)(cid:87)(cid:87)(cid:86)(cid:89)(cid:91)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:93)(cid:80)(cid:76)(cid:94)(cid:3)(cid:86)(cid:77)(cid:3)(cid:79)(cid:80)(cid:78)(cid:79)(cid:76)(cid:89)(cid:3)(cid:76)(cid:88)(cid:92)(cid:80)(cid:87)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3)(cid:75)(cid:76)(cid:84)(cid:72)(cid:85)(cid:75)(cid:3)(cid:72)(cid:90)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3) (cid:96)(cid:76)(cid:72)(cid:89)(cid:3)(cid:87)(cid:89)(cid:86)(cid:78)(cid:89)(cid:76)(cid:90)(cid:90)(cid:76)(cid:90)(cid:21)(cid:3) (cid:48)(cid:85)(cid:3)(cid:72)(cid:75)(cid:75)(cid:80)(cid:91)(cid:80)(cid:86)(cid:85)(cid:19)(cid:3)(cid:84)(cid:76)(cid:78)(cid:72)(cid:3)(cid:87)(cid:89)(cid:86)(cid:81)(cid:76)(cid:74)(cid:91)(cid:90)(cid:3)(cid:72)(cid:89)(cid:76)(cid:3)(cid:80)(cid:85)(cid:74)(cid:89)(cid:76)(cid:72)(cid:90)(cid:80)(cid:85)(cid:78)(cid:83)(cid:96)(cid:3)(cid:89)(cid:76)(cid:90)(cid:87)(cid:86)(cid:85)(cid:90)(cid:80)(cid:73)(cid:83)(cid:76)(cid:3)(cid:77)(cid:86)(cid:89) (cid:91)(cid:79)(cid:76)(cid:3)(cid:76)(cid:95)(cid:87)(cid:76)(cid:74)(cid:91)(cid:76)(cid:75)(cid:3)(cid:87)(cid:89)(cid:86)(cid:78)(cid:89)(cid:76)(cid:90)(cid:90)(cid:80)(cid:86)(cid:85)(cid:3)(cid:86)(cid:77)(cid:3)(cid:75)(cid:76)(cid:84)(cid:72)(cid:85)(cid:75)(cid:3)(cid:80)(cid:85)(cid:3)(cid:25)(cid:23)(cid:25)(cid:27)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:73)(cid:76)(cid:96)(cid:86)(cid:85)(cid:75)(cid:21)(cid:3) (cid:59)(cid:79)(cid:76)(cid:90)(cid:76)(cid:3)(cid:72)(cid:74)(cid:91)(cid:80)(cid:93)(cid:76)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:87)(cid:83)(cid:72)(cid:85)(cid:85)(cid:76)(cid:75)(cid:3)(cid:87)(cid:89)(cid:86)(cid:81)(cid:76)(cid:74)(cid:91)(cid:90)(cid:3)(cid:89)(cid:76)(cid:87)(cid:89)(cid:76)(cid:90)(cid:76)(cid:85)(cid:91)(cid:3)(cid:72)(cid:3)(cid:90)(cid:80)(cid:78)(cid:85)(cid:80)(cid:196)(cid:74)(cid:72)(cid:85)(cid:91) (cid:74)(cid:72)(cid:91)(cid:72)(cid:83)(cid:96)(cid:90)(cid:91)(cid:3)(cid:86)(cid:77)(cid:3)(cid:74)(cid:86)(cid:85)(cid:90)(cid:91)(cid:89)(cid:92)(cid:74)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:72)(cid:74)(cid:91)(cid:80)(cid:93)(cid:80)(cid:91)(cid:96)(cid:3)(cid:72)(cid:74)(cid:89)(cid:86)(cid:90)(cid:90)(cid:3)(cid:72)(cid:3)(cid:83)(cid:72)(cid:89)(cid:78)(cid:76)(cid:3)(cid:76)(cid:95)(cid:87)(cid:72)(cid:85)(cid:90)(cid:76)(cid:3) (cid:86)(cid:77)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:78)(cid:76)(cid:86)(cid:78)(cid:89)(cid:72)(cid:87)(cid:79)(cid:96)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:92)(cid:85)(cid:75)(cid:76)(cid:89)(cid:90)(cid:74)(cid:86)(cid:89)(cid:76)(cid:90)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:80)(cid:84)(cid:87)(cid:86)(cid:89)(cid:91)(cid:72)(cid:85)(cid:74)(cid:76)(cid:3)(cid:86)(cid:77)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3) (cid:73)(cid:89)(cid:72)(cid:85)(cid:74)(cid:79)(cid:3)(cid:76)(cid:95)(cid:87)(cid:72)(cid:85)(cid:90)(cid:80)(cid:86)(cid:85)(cid:3)(cid:76)(cid:584)(cid:86)(cid:89)(cid:91)(cid:21)(cid:3)(cid:47)(cid:13)(cid:44)(cid:3)(cid:79)(cid:72)(cid:90)(cid:3)(cid:76)(cid:95)(cid:74)(cid:76)(cid:83)(cid:83)(cid:76)(cid:85)(cid:91)(cid:3)(cid:76)(cid:95)(cid:87)(cid:86)(cid:90)(cid:92)(cid:89)(cid:76)(cid:3) (cid:72)(cid:74)(cid:89)(cid:86)(cid:90)(cid:90)(cid:3)(cid:80)(cid:91)(cid:90)(cid:3)(cid:26)(cid:23)(cid:20)(cid:90)(cid:91)(cid:72)(cid:91)(cid:76)(cid:3)(cid:78)(cid:76)(cid:86)(cid:78)(cid:89)(cid:72)(cid:87)(cid:79)(cid:80)(cid:74)(cid:3)(cid:77)(cid:86)(cid:86)(cid:91)(cid:87)(cid:89)(cid:80)(cid:85)(cid:91)(cid:3)(cid:94)(cid:80)(cid:91)(cid:79)(cid:3)(cid:84)(cid:72)(cid:85)(cid:96)(cid:3)(cid:86)(cid:77)(cid:3)(cid:91)(cid:79)(cid:76)(cid:90)(cid:76)(cid:3) (cid:87)(cid:89)(cid:86)(cid:81)(cid:76)(cid:74)(cid:91)(cid:90)(cid:3)(cid:89)(cid:76)(cid:90)(cid:80)(cid:75)(cid:80)(cid:85)(cid:78)(cid:3)(cid:80)(cid:85)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:46)(cid:92)(cid:83)(cid:77)(cid:3)(cid:42)(cid:86)(cid:72)(cid:90)(cid:91)(cid:19)(cid:3)(cid:52)(cid:80)(cid:75)(cid:20)(cid:40)(cid:91)(cid:83)(cid:72)(cid:85)(cid:91)(cid:80)(cid:74)(cid:19)(cid:3)(cid:52)(cid:80)(cid:75)(cid:94)(cid:76)(cid:90)(cid:91)(cid:3) (cid:72)(cid:85)(cid:75)(cid:3)(cid:58)(cid:86)(cid:92)(cid:91)(cid:79)(cid:76)(cid:72)(cid:90)(cid:91)(cid:3)(cid:89)(cid:76)(cid:78)(cid:80)(cid:86)(cid:85)(cid:90)(cid:21)(cid:3)(cid:59)(cid:79)(cid:76)(cid:90)(cid:76)(cid:3)(cid:77)(cid:86)(cid:92)(cid:89)(cid:3)(cid:89)(cid:76)(cid:78)(cid:80)(cid:86)(cid:85)(cid:90)(cid:3)(cid:74)(cid:86)(cid:83)(cid:83)(cid:76)(cid:74)(cid:91)(cid:80)(cid:93)(cid:76)(cid:83)(cid:96) (cid:72)(cid:74)(cid:74)(cid:86)(cid:92)(cid:85)(cid:91)(cid:3)(cid:77)(cid:86)(cid:89)(cid:3)(cid:30)(cid:24)(cid:12)(cid:3)(cid:86)(cid:77)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:74)(cid:92)(cid:89)(cid:89)(cid:76)(cid:85)(cid:91)(cid:3)(cid:73)(cid:89)(cid:72)(cid:85)(cid:74)(cid:79)(cid:3)(cid:85)(cid:76)(cid:91)(cid:94)(cid:86)(cid:89)(cid:82)(cid:21)(cid:3)(cid:40)(cid:90)(cid:3)(cid:94)(cid:76)(cid:3) (cid:79)(cid:72)(cid:93)(cid:76)(cid:3)(cid:85)(cid:86)(cid:91)(cid:76)(cid:75)(cid:3)(cid:87)(cid:89)(cid:76)(cid:93)(cid:80)(cid:86)(cid:92)(cid:90)(cid:83)(cid:96)(cid:19)(cid:3)(cid:84)(cid:76)(cid:78)(cid:72)(cid:3)(cid:87)(cid:89)(cid:86)(cid:81)(cid:76)(cid:74)(cid:91)(cid:90)(cid:3)(cid:91)(cid:96)(cid:87)(cid:80)(cid:74)(cid:72)(cid:83)(cid:83)(cid:96)(cid:3)(cid:89)(cid:76)(cid:88)(cid:92)(cid:80)(cid:89)(cid:76) (cid:84)(cid:92)(cid:83)(cid:91)(cid:80)(cid:87)(cid:83)(cid:76)(cid:3)(cid:96)(cid:76)(cid:72)(cid:89)(cid:90)(cid:3)(cid:91)(cid:86)(cid:3)(cid:74)(cid:86)(cid:84)(cid:87)(cid:83)(cid:76)(cid:91)(cid:76)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:74)(cid:86)(cid:85)(cid:90)(cid:92)(cid:84)(cid:76)(cid:3)(cid:83)(cid:72)(cid:89)(cid:78)(cid:76)(cid:3)(cid:88)(cid:92)(cid:72)(cid:85)(cid:91)(cid:80)(cid:91)(cid:80)(cid:76)(cid:90)(cid:3)(cid:86)(cid:77)(cid:3) (cid:76)(cid:88)(cid:92)(cid:80)(cid:87)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3)(cid:77)(cid:86)(cid:89)(cid:3)(cid:76)(cid:95)(cid:91)(cid:76)(cid:85)(cid:75)(cid:76)(cid:75)(cid:3)(cid:87)(cid:76)(cid:89)(cid:80)(cid:86)(cid:75)(cid:90)(cid:3)(cid:86)(cid:77)(cid:3)(cid:91)(cid:80)(cid:84)(cid:76)(cid:21)(cid:3) (cid:45)(cid:80)(cid:85)(cid:72)(cid:83)(cid:83)(cid:96)(cid:19)(cid:3)(cid:94)(cid:76)(cid:3)(cid:89)(cid:76)(cid:84)(cid:72)(cid:80)(cid:85)(cid:3)(cid:74)(cid:86)(cid:85)(cid:196)(cid:75)(cid:76)(cid:85)(cid:91)(cid:3)(cid:91)(cid:79)(cid:72)(cid:91)(cid:3)(cid:78)(cid:89)(cid:86)(cid:94)(cid:80)(cid:85)(cid:78)(cid:3)(cid:89)(cid:76)(cid:85)(cid:91)(cid:72)(cid:83) (cid:87)(cid:76)(cid:85)(cid:76)(cid:91)(cid:89)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:94)(cid:80)(cid:83)(cid:83)(cid:3)(cid:73)(cid:76)(cid:3)(cid:72)(cid:3)(cid:90)(cid:91)(cid:76)(cid:72)(cid:75)(cid:96)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:84)(cid:76)(cid:72)(cid:85)(cid:80)(cid:85)(cid:78)(cid:77)(cid:92)(cid:83)(cid:3)(cid:74)(cid:72)(cid:91)(cid:72)(cid:83)(cid:96)(cid:90)(cid:91)(cid:3) (cid:77)(cid:86)(cid:89)(cid:3)(cid:80)(cid:85)(cid:74)(cid:89)(cid:76)(cid:72)(cid:90)(cid:76)(cid:75)(cid:3)(cid:80)(cid:85)(cid:75)(cid:92)(cid:90)(cid:91)(cid:89)(cid:96)(cid:3)(cid:78)(cid:89)(cid:86)(cid:94)(cid:91)(cid:79)(cid:3)(cid:72)(cid:90)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:72)(cid:91)(cid:91)(cid:89)(cid:72)(cid:74)(cid:91)(cid:80)(cid:93)(cid:76)(cid:85)(cid:76)(cid:90)(cid:90)(cid:3)(cid:86)(cid:77)(cid:3) (cid:76)(cid:88)(cid:92)(cid:80)(cid:87)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3)(cid:89)(cid:76)(cid:85)(cid:91)(cid:72)(cid:83)(cid:3)(cid:86)(cid:93)(cid:76)(cid:89)(cid:3)(cid:86)(cid:94)(cid:85)(cid:76)(cid:89)(cid:90)(cid:79)(cid:80)(cid:87)(cid:3)(cid:74)(cid:86)(cid:85)(cid:91)(cid:80)(cid:85)(cid:92)(cid:76)(cid:90)(cid:3)(cid:91)(cid:86)(cid:3)(cid:76)(cid:93)(cid:86)(cid:83)(cid:93)(cid:76)(cid:21)(cid:3) (cid:59)(cid:79)(cid:76)(cid:3)American Rental Association(cid:3)(cid:89)(cid:76)(cid:74)(cid:76)(cid:85)(cid:91)(cid:83)(cid:96)(cid:3)(cid:72)(cid:85)(cid:85)(cid:86)(cid:92)(cid:85)(cid:74)(cid:76)(cid:75)(cid:3)(cid:91)(cid:79)(cid:72)(cid:91)(cid:3) (cid:89)(cid:76)(cid:85)(cid:91)(cid:72)(cid:83)(cid:3)(cid:87)(cid:76)(cid:85)(cid:76)(cid:91)(cid:89)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:80)(cid:84)(cid:87)(cid:89)(cid:86)(cid:93)(cid:76)(cid:75)(cid:3)(cid:91)(cid:86)(cid:3)(cid:28)(cid:29)(cid:21)(cid:27)(cid:12)(cid:3)(cid:80)(cid:85)(cid:3)(cid:25)(cid:23)(cid:25)(cid:26)(cid:19)(cid:3)(cid:92)(cid:87)(cid:3)(cid:77)(cid:89)(cid:86)(cid:84)(cid:3) (cid:28)(cid:26)(cid:21)(cid:28)(cid:12)(cid:3)(cid:80)(cid:85)(cid:3)(cid:25)(cid:23)(cid:25)(cid:25)(cid:21)(cid:3)(cid:59)(cid:79)(cid:76)(cid:3)(cid:84)(cid:76)(cid:72)(cid:90)(cid:92)(cid:89)(cid:76)(cid:3)(cid:80)(cid:90)(cid:3)(cid:85)(cid:86)(cid:94)(cid:3)(cid:86)(cid:85)(cid:83)(cid:96)(cid:3)(cid:26)(cid:23)(cid:3)(cid:73)(cid:72)(cid:90)(cid:80)(cid:90)(cid:3)(cid:87)(cid:86)(cid:80)(cid:85)(cid:91)(cid:90)(cid:3) (cid:73)(cid:76)(cid:83)(cid:86)(cid:94)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:87)(cid:89)(cid:76)(cid:20)(cid:87)(cid:72)(cid:85)(cid:75)(cid:76)(cid:84)(cid:80)(cid:74)(cid:3)(cid:79)(cid:80)(cid:78)(cid:79)(cid:3)(cid:86)(cid:77)(cid:3)(cid:28)(cid:29)(cid:21)(cid:30)(cid:12)(cid:21)(cid:3) (cid:54)(cid:92)(cid:89)(cid:3)(cid:196)(cid:85)(cid:72)(cid:85)(cid:74)(cid:80)(cid:72)(cid:83)(cid:3)(cid:87)(cid:76)(cid:89)(cid:77)(cid:86)(cid:89)(cid:84)(cid:72)(cid:85)(cid:74)(cid:76)(cid:3)(cid:80)(cid:85)(cid:3)(cid:25)(cid:23)(cid:25)(cid:26)(cid:3)(cid:94)(cid:72)(cid:90)(cid:3)(cid:72)(cid:3)(cid:74)(cid:83)(cid:76)(cid:72)(cid:89)(cid:3)(cid:80)(cid:85)(cid:75)(cid:80)(cid:74)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3) (cid:86)(cid:77)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:78)(cid:89)(cid:86)(cid:94)(cid:80)(cid:85)(cid:78)(cid:3)(cid:196)(cid:85)(cid:72)(cid:85)(cid:74)(cid:80)(cid:72)(cid:83)(cid:3)(cid:87)(cid:86)(cid:91)(cid:76)(cid:85)(cid:91)(cid:80)(cid:72)(cid:83)(cid:3)(cid:72)(cid:91)(cid:3)(cid:47)(cid:13)(cid:44)(cid:21)(cid:3)(cid:54)(cid:92)(cid:89)(cid:3)(cid:91)(cid:89)(cid:72)(cid:85)(cid:90)(cid:80)(cid:91)(cid:80)(cid:86)(cid:85) (cid:91)(cid:86)(cid:3)(cid:72)(cid:3)(cid:87)(cid:92)(cid:89)(cid:76)(cid:20)(cid:87)(cid:83)(cid:72)(cid:96)(cid:3)(cid:89)(cid:76)(cid:85)(cid:91)(cid:72)(cid:83)(cid:3)(cid:77)(cid:86)(cid:74)(cid:92)(cid:90)(cid:3)(cid:79)(cid:72)(cid:90)(cid:3)(cid:73)(cid:76)(cid:76)(cid:85)(cid:3)(cid:72)(cid:3)(cid:89)(cid:76)(cid:90)(cid:86)(cid:92)(cid:85)(cid:75)(cid:80)(cid:85)(cid:78)(cid:3) (cid:94)(cid:80)(cid:85)(cid:85)(cid:80)(cid:85)(cid:78)(cid:3)(cid:90)(cid:91)(cid:89)(cid:72)(cid:91)(cid:76)(cid:78)(cid:96)(cid:19)(cid:3)(cid:72)(cid:83)(cid:86)(cid:85)(cid:78)(cid:3)(cid:94)(cid:80)(cid:91)(cid:79)(cid:3)(cid:72)(cid:3)(cid:74)(cid:86)(cid:85)(cid:91)(cid:80)(cid:85)(cid:92)(cid:86)(cid:92)(cid:90)(cid:3)(cid:74)(cid:86)(cid:84)(cid:84)(cid:80)(cid:91)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3)(cid:91)(cid:86)(cid:3) (cid:78)(cid:89)(cid:86)(cid:94)(cid:91)(cid:79)(cid:21)(cid:3)(cid:41)(cid:86)(cid:91)(cid:79)(cid:3)(cid:79)(cid:72)(cid:93)(cid:76)(cid:3)(cid:73)(cid:76)(cid:76)(cid:85)(cid:3)(cid:80)(cid:85)(cid:90)(cid:91)(cid:89)(cid:92)(cid:84)(cid:76)(cid:85)(cid:91)(cid:72)(cid:83)(cid:3)(cid:74)(cid:86)(cid:84)(cid:87)(cid:86)(cid:85)(cid:76)(cid:85)(cid:91)(cid:90)(cid:3)(cid:86)(cid:77)(cid:3)(cid:86)(cid:92)(cid:89) (cid:80)(cid:84)(cid:87)(cid:89)(cid:76)(cid:90)(cid:90)(cid:80)(cid:93)(cid:76)(cid:3)(cid:196)(cid:85)(cid:72)(cid:85)(cid:74)(cid:80)(cid:72)(cid:83)(cid:3)(cid:76)(cid:95)(cid:76)(cid:74)(cid:92)(cid:91)(cid:80)(cid:86)(cid:85)(cid:19)(cid:3)(cid:76)(cid:85)(cid:72)(cid:73)(cid:83)(cid:80)(cid:85)(cid:78)(cid:3)(cid:47)(cid:13)(cid:44)(cid:19)(cid:3)(cid:80)(cid:85)(cid:3)(cid:76)(cid:72)(cid:74)(cid:79)(cid:3)(cid:86)(cid:77)(cid:3) (cid:91)(cid:79)(cid:76)(cid:3)(cid:87)(cid:72)(cid:90)(cid:91)(cid:3)(cid:91)(cid:94)(cid:86)(cid:3)(cid:96)(cid:76)(cid:72)(cid:89)(cid:90)(cid:19)(cid:3)(cid:91)(cid:86)(cid:3)(cid:78)(cid:89)(cid:86)(cid:94)(cid:3)(cid:89)(cid:76)(cid:93)(cid:76)(cid:85)(cid:92)(cid:76)(cid:90)(cid:3)(cid:77)(cid:89)(cid:86)(cid:84)(cid:3)(cid:80)(cid:91)(cid:90)(cid:3)(cid:76)(cid:88)(cid:92)(cid:80)(cid:87)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3) (cid:89)(cid:76)(cid:85)(cid:91)(cid:72)(cid:83)(cid:90)(cid:3)(cid:90)(cid:76)(cid:78)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3)(cid:72)(cid:91)(cid:3)(cid:85)(cid:76)(cid:72)(cid:89)(cid:83)(cid:96)(cid:3)(cid:91)(cid:94)(cid:80)(cid:74)(cid:76)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:89)(cid:72)(cid:91)(cid:76)(cid:3)(cid:86)(cid:77)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:84)(cid:72)(cid:89)(cid:82)(cid:76)(cid:91)(cid:19)(cid:3)(cid:72)(cid:90) (cid:89)(cid:76)(cid:87)(cid:86)(cid:89)(cid:91)(cid:76)(cid:75)(cid:3)(cid:73)(cid:96)(cid:3)(cid:91)(cid:79)(cid:76) American Rental Association(cid:187)(cid:90)(cid:3)(cid:84)(cid:76)(cid:72)(cid:90)(cid:92)(cid:89)(cid:76)(cid:3) (cid:86)(cid:77)(cid:3)(cid:91)(cid:86)(cid:91)(cid:72)(cid:83)(cid:3)(cid:60)(cid:21)(cid:58)(cid:21)(cid:3)(cid:76)(cid:88)(cid:92)(cid:80)(cid:87)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3)(cid:89)(cid:76)(cid:85)(cid:91)(cid:72)(cid:83)(cid:3)(cid:89)(cid:76)(cid:93)(cid:76)(cid:85)(cid:92)(cid:76)(cid:21)(cid:3)(cid:54)(cid:92)(cid:89)(cid:3)(cid:90)(cid:91)(cid:76)(cid:72)(cid:75)(cid:77)(cid:72)(cid:90)(cid:91)(cid:3) (cid:72)(cid:85)(cid:75)(cid:3)(cid:75)(cid:80)(cid:90)(cid:74)(cid:80)(cid:87)(cid:83)(cid:80)(cid:85)(cid:76)(cid:75)(cid:3)(cid:72)(cid:87)(cid:87)(cid:89)(cid:86)(cid:72)(cid:74)(cid:79)(cid:3)(cid:91)(cid:86)(cid:3)(cid:78)(cid:89)(cid:86)(cid:94)(cid:91)(cid:79)(cid:3)(cid:94)(cid:80)(cid:83)(cid:83)(cid:3)(cid:74)(cid:86)(cid:85)(cid:91)(cid:80)(cid:85)(cid:92)(cid:76)(cid:3)(cid:80)(cid:85)(cid:3)(cid:25)(cid:23)(cid:25)(cid:27)(cid:3) (cid:72)(cid:85)(cid:75)(cid:3)(cid:94)(cid:80)(cid:83)(cid:83)(cid:3)(cid:73)(cid:76)(cid:3)(cid:72)(cid:74)(cid:74)(cid:86)(cid:84)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:75)(cid:3)(cid:73)(cid:96)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:87)(cid:76)(cid:89)(cid:90)(cid:80)(cid:90)(cid:91)(cid:76)(cid:85)(cid:91)(cid:3)(cid:76)(cid:584)(cid:86)(cid:89)(cid:91)(cid:90)(cid:3)(cid:91)(cid:86)(cid:94)(cid:72)(cid:89)(cid:75)(cid:3) (cid:90)(cid:91)(cid:89)(cid:86)(cid:85)(cid:78)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:89)(cid:76)(cid:83)(cid:80)(cid:72)(cid:73)(cid:83)(cid:76)(cid:3)(cid:86)(cid:87)(cid:76)(cid:89)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:72)(cid:83)(cid:3)(cid:76)(cid:95)(cid:74)(cid:76)(cid:83)(cid:83)(cid:76)(cid:85)(cid:74)(cid:76)(cid:19)(cid:3)(cid:80)(cid:85)(cid:74)(cid:83)(cid:92)(cid:75)(cid:80)(cid:85)(cid:78)(cid:3) (cid:90)(cid:92)(cid:87)(cid:76)(cid:89)(cid:80)(cid:86)(cid:89)(cid:3)(cid:75)(cid:80)(cid:78)(cid:80)(cid:91)(cid:72)(cid:83)(cid:3)(cid:90)(cid:86)(cid:83)(cid:92)(cid:91)(cid:80)(cid:86)(cid:85)(cid:90)(cid:19)(cid:3)(cid:80)(cid:84)(cid:87)(cid:89)(cid:86)(cid:93)(cid:76)(cid:75)(cid:3)(cid:76)(cid:585)(cid:74)(cid:80)(cid:76)(cid:85)(cid:74)(cid:80)(cid:76)(cid:90)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:72)(cid:3) (cid:90)(cid:72)(cid:77)(cid:76)(cid:3)(cid:94)(cid:86)(cid:89)(cid:82)(cid:3)(cid:76)(cid:85)(cid:93)(cid:80)(cid:89)(cid:86)(cid:85)(cid:84)(cid:76)(cid:85)(cid:91)(cid:21)(cid:3)(cid:48)(cid:85)(cid:3)(cid:91)(cid:86)(cid:91)(cid:72)(cid:83)(cid:19)(cid:3)(cid:91)(cid:79)(cid:76)(cid:90)(cid:76)(cid:3)(cid:75)(cid:89)(cid:80)(cid:93)(cid:76)(cid:89)(cid:90)(cid:3)(cid:86)(cid:77)(cid:3)(cid:90)(cid:92)(cid:74)(cid:74)(cid:76)(cid:90)(cid:90)(cid:3) (cid:90)(cid:79)(cid:86)(cid:92)(cid:83)(cid:75)(cid:3)(cid:83)(cid:76)(cid:72)(cid:75)(cid:3)(cid:91)(cid:86)(cid:3)(cid:77)(cid:92)(cid:89)(cid:91)(cid:79)(cid:76)(cid:89)(cid:3)(cid:90)(cid:91)(cid:89)(cid:76)(cid:85)(cid:78)(cid:91)(cid:79)(cid:76)(cid:85)(cid:80)(cid:85)(cid:78)(cid:3)(cid:86)(cid:77)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:74)(cid:86)(cid:84)(cid:87)(cid:76)(cid:91)(cid:80)(cid:91)(cid:80)(cid:93)(cid:76)(cid:3) (cid:87)(cid:86)(cid:90)(cid:80)(cid:91)(cid:80)(cid:86)(cid:85)(cid:19)(cid:3)(cid:94)(cid:79)(cid:80)(cid:83)(cid:76)(cid:3)(cid:75)(cid:89)(cid:80)(cid:93)(cid:80)(cid:85)(cid:78)(cid:3)(cid:78)(cid:89)(cid:76)(cid:72)(cid:91)(cid:76)(cid:89)(cid:3)(cid:74)(cid:92)(cid:90)(cid:91)(cid:86)(cid:84)(cid:76)(cid:89)(cid:3)(cid:90)(cid:72)(cid:91)(cid:80)(cid:90)(cid:77)(cid:72)(cid:74)(cid:91)(cid:80)(cid:86)(cid:85)(cid:19) (cid:76)(cid:95)(cid:87)(cid:72)(cid:85)(cid:75)(cid:80)(cid:85)(cid:78)(cid:3)(cid:86)(cid:87)(cid:87)(cid:86)(cid:89)(cid:91)(cid:92)(cid:85)(cid:80)(cid:91)(cid:80)(cid:76)(cid:90)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:80)(cid:85)(cid:74)(cid:89)(cid:76)(cid:72)(cid:90)(cid:76)(cid:75)(cid:3)(cid:90)(cid:79)(cid:72)(cid:89)(cid:76)(cid:79)(cid:86)(cid:83)(cid:75)(cid:76)(cid:89)(cid:3)(cid:93)(cid:72)(cid:83)(cid:92)(cid:76)(cid:21)(cid:3) (cid:55)(cid:76)(cid:89)(cid:77)(cid:86)(cid:89)(cid:84)(cid:72)(cid:85)(cid:74)(cid:76)(cid:19)(cid:3)(cid:78)(cid:89)(cid:86)(cid:94)(cid:91)(cid:79)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:93)(cid:72)(cid:83)(cid:92)(cid:76)(cid:3)(cid:72)(cid:89)(cid:76)(cid:3)(cid:77)(cid:92)(cid:85)(cid:75)(cid:72)(cid:84)(cid:76)(cid:85)(cid:91)(cid:72)(cid:83)(cid:3) (cid:72)(cid:90)(cid:87)(cid:80)(cid:89)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:90)(cid:3)(cid:72)(cid:91)(cid:3)(cid:47)(cid:13)(cid:44)(cid:21)(cid:3)(cid:59)(cid:86)(cid:3)(cid:74)(cid:86)(cid:85)(cid:90)(cid:80)(cid:90)(cid:91)(cid:76)(cid:85)(cid:91)(cid:83)(cid:96)(cid:3)(cid:84)(cid:76)(cid:76)(cid:91)(cid:3)(cid:86)(cid:89)(cid:3)(cid:76)(cid:95)(cid:74)(cid:76)(cid:76)(cid:75)(cid:3)(cid:91)(cid:79)(cid:76)(cid:90)(cid:76)(cid:3) (cid:76)(cid:85)(cid:75)(cid:76)(cid:72)(cid:93)(cid:86)(cid:89)(cid:90)(cid:3)(cid:89)(cid:76)(cid:88)(cid:92)(cid:80)(cid:89)(cid:76)(cid:90)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:74)(cid:86)(cid:84)(cid:84)(cid:80)(cid:91)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:75)(cid:76)(cid:75)(cid:80)(cid:74)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:86)(cid:77)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3) (cid:76)(cid:85)(cid:91)(cid:80)(cid:89)(cid:76)(cid:3)(cid:86)(cid:89)(cid:78)(cid:72)(cid:85)(cid:80)(cid:97)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:21)(cid:3)(cid:48)(cid:85)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:77)(cid:72)(cid:74)(cid:76)(cid:3)(cid:86)(cid:77)(cid:3)(cid:84)(cid:76)(cid:72)(cid:85)(cid:80)(cid:85)(cid:78)(cid:77)(cid:92)(cid:83)(cid:3)(cid:197)(cid:76)(cid:76)(cid:91)(cid:3)(cid:78)(cid:89)(cid:86)(cid:94)(cid:91)(cid:79) (cid:72)(cid:85)(cid:75)(cid:3)(cid:73)(cid:89)(cid:72)(cid:85)(cid:74)(cid:79)(cid:3)(cid:76)(cid:95)(cid:87)(cid:72)(cid:85)(cid:90)(cid:80)(cid:86)(cid:85)(cid:19)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:86)(cid:89)(cid:78)(cid:72)(cid:85)(cid:80)(cid:97)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:84)(cid:72)(cid:80)(cid:85)(cid:91)(cid:72)(cid:80)(cid:85)(cid:76)(cid:75)(cid:3)(cid:72)(cid:3) (cid:77)(cid:86)(cid:74)(cid:92)(cid:90)(cid:3)(cid:86)(cid:85)(cid:3)(cid:89)(cid:76)(cid:90)(cid:92)(cid:83)(cid:91)(cid:90)(cid:19)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:48)(cid:3)(cid:94)(cid:80)(cid:90)(cid:79)(cid:3)(cid:91)(cid:86)(cid:3)(cid:91)(cid:79)(cid:72)(cid:85)(cid:82)(cid:3)(cid:72)(cid:83)(cid:83)(cid:3)(cid:25)(cid:19)(cid:30)(cid:28)(cid:23)(cid:3)(cid:76)(cid:84)(cid:87)(cid:83)(cid:86)(cid:96)(cid:76)(cid:76)(cid:90)(cid:3) (cid:77)(cid:86)(cid:89)(cid:3)(cid:91)(cid:79)(cid:76)(cid:80)(cid:89)(cid:3)(cid:74)(cid:86)(cid:84)(cid:84)(cid:80)(cid:91)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3)(cid:91)(cid:86)(cid:3)(cid:80)(cid:85)(cid:85)(cid:86)(cid:93)(cid:72)(cid:91)(cid:80)(cid:86)(cid:85)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:87)(cid:89)(cid:86)(cid:74)(cid:76)(cid:90)(cid:90)(cid:3) (cid:80)(cid:84)(cid:87)(cid:89)(cid:86)(cid:93)(cid:76)(cid:84)(cid:76)(cid:85)(cid:91)(cid:21)(cid:3)(cid:40)(cid:83)(cid:90)(cid:86)(cid:19)(cid:3)(cid:84)(cid:96)(cid:3)(cid:90)(cid:80)(cid:85)(cid:74)(cid:76)(cid:89)(cid:76)(cid:3)(cid:91)(cid:79)(cid:72)(cid:85)(cid:82)(cid:90)(cid:3)(cid:91)(cid:86)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:76)(cid:95)(cid:87)(cid:72)(cid:85)(cid:75)(cid:80)(cid:85)(cid:78)(cid:3) (cid:74)(cid:92)(cid:90)(cid:91)(cid:86)(cid:84)(cid:76)(cid:89)(cid:3)(cid:73)(cid:72)(cid:90)(cid:76)(cid:3)(cid:77)(cid:86)(cid:89)(cid:3)(cid:76)(cid:85)(cid:91)(cid:89)(cid:92)(cid:90)(cid:91)(cid:80)(cid:85)(cid:78)(cid:3)(cid:47)(cid:13)(cid:44)(cid:3)(cid:94)(cid:80)(cid:91)(cid:79)(cid:3)(cid:91)(cid:79)(cid:76)(cid:80)(cid:89)(cid:3)(cid:76)(cid:88)(cid:92)(cid:80)(cid:87)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3) (cid:85)(cid:76)(cid:76)(cid:75)(cid:90)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:91)(cid:86)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:90)(cid:79)(cid:72)(cid:89)(cid:76)(cid:79)(cid:86)(cid:83)(cid:75)(cid:76)(cid:89)(cid:90)(cid:3)(cid:77)(cid:86)(cid:89)(cid:3)(cid:91)(cid:79)(cid:76)(cid:80)(cid:89)(cid:3)(cid:74)(cid:86)(cid:85)(cid:91)(cid:80)(cid:85)(cid:92)(cid:76)(cid:75)(cid:3)(cid:80)(cid:85)(cid:91)(cid:76)(cid:89)(cid:76)(cid:90)(cid:91)(cid:3) (cid:80)(cid:85)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:42)(cid:86)(cid:84)(cid:87)(cid:72)(cid:85)(cid:96)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:72)(cid:85)(cid:3)(cid:92)(cid:85)(cid:75)(cid:76)(cid:89)(cid:90)(cid:91)(cid:72)(cid:85)(cid:75)(cid:80)(cid:85)(cid:78)(cid:3)(cid:86)(cid:77)(cid:3)(cid:94)(cid:79)(cid:72)(cid:91)(cid:3)(cid:80)(cid:90)(cid:3)(cid:87)(cid:86)(cid:90)(cid:90)(cid:80)(cid:73)(cid:83)(cid:76)(cid:21)(cid:3) (cid:45)(cid:80)(cid:85)(cid:72)(cid:83)(cid:83)(cid:96)(cid:19)(cid:3)(cid:48)(cid:3)(cid:94)(cid:80)(cid:90)(cid:79)(cid:3)(cid:91)(cid:86)(cid:3)(cid:91)(cid:79)(cid:72)(cid:85)(cid:82)(cid:3)(cid:86)(cid:92)(cid:89)(cid:3)(cid:41)(cid:86)(cid:72)(cid:89)(cid:75)(cid:3)(cid:86)(cid:77)(cid:3)(cid:43)(cid:80)(cid:89)(cid:76)(cid:74)(cid:91)(cid:86)(cid:89)(cid:90)(cid:3)(cid:77)(cid:86)(cid:89)(cid:3)(cid:91)(cid:79)(cid:76)(cid:80)(cid:89)(cid:3) (cid:90)(cid:91)(cid:76)(cid:72)(cid:75)(cid:77)(cid:72)(cid:90)(cid:91)(cid:3)(cid:74)(cid:86)(cid:92)(cid:85)(cid:90)(cid:76)(cid:83)(cid:19)(cid:3)(cid:83)(cid:76)(cid:72)(cid:75)(cid:76)(cid:89)(cid:90)(cid:79)(cid:80)(cid:87)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:78)(cid:86)(cid:93)(cid:76)(cid:89)(cid:85)(cid:72)(cid:85)(cid:74)(cid:76)(cid:21)(cid:3) (cid:58)(cid:80)(cid:85)(cid:74)(cid:76)(cid:89)(cid:76)(cid:83)(cid:96)(cid:19) Bradley W. Barber (cid:42)(cid:79)(cid:80)(cid:76)(cid:77)(cid:3)(cid:44)(cid:95)(cid:76)(cid:74)(cid:92)(cid:91)(cid:80)(cid:93)(cid:76)(cid:3)(cid:54)(cid:585)(cid:74)(cid:76)(cid:89) (cid:72)(cid:85)(cid:75)(cid:3)(cid:43)(cid:80)(cid:89)(cid:76)(cid:74)(cid:91)(cid:86)(cid:89) H&E EQUIPMENT SERVICES, INC. 4 2023 ANNUAL REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K (Mark One) ☒☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 or ☐☐ TRANSRR ITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 000-51759 H&E EQUIPMENT SERVICES, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware (State or Other Jurisdiction of Incorporation or Organization) 7500 Pecue Lane, Baton Rouge, Louisiana 70809 (Address of Principal Executive Offiff ces, including Zip Code) 81-0553291 (IRS Employer Identification No.) (225) 298-5200 (Registrant’s Telephone Number, Including Area Code) 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 Securities registered pursuant to Section 12(b) of the Act: Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ 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 forff days. Yes ☒ No ☐ such shorter period that the registrant was required to file such reports), and (2) has been subju ect to such filing requirements for the past 90 Indicate by check mark whether the registrant has submu (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submu Interactive Data File required to be submu itted electronically everyrr itted pursuant to Rule 405 of Regulation S-T it 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: Large Accelerated Filer Non-Accelerated Filer Emerging Growth Company ☒ ☐ ☐ Accelerated Filer Smaller Reporting Company ☐ ☐ 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 has filed a report on and attestation to its management’s assessment of the effeff ctiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive offiff cers during the relevant recovery period pursuant to §240.10D-1(b). ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ The aggregate market value of the common stock held by non-affiff liates of the registrant was approximately $1,664,306,676 (computed by reference to the closing sale price of the registrant’s common stock on the Nasdaq Global Market on June 30, 2023, the last business day of the registrant’s most recently completed second fiscal quarter). As of Februarr ry 15, 2024, there were 36,464,701 shares of common stock, par value $0.01 per share, of the registrant outstanding. DOCUMENTS INCORPORATRR ED BY REFERENCE Portions of the document listed below have been incorporated by reference into the indicated parts of this Form 10-K, as specifieff d in the responses to the item numbers involved. Part III The registrant’s definitive proxy statement, for use in connection with the Annual Meeting of Stockholders, to be filed within 120 days afteff fiscal year ended December 31, 2023. r the registrant’s Auditor Firm Id: 243 Auditor Name: BDO USA, P.C. Auditor Location: Dallas, Texas, USA PART I Item 1. Item 1A. Item 1B. Item 1C. Item 2. Item 3. Item 4. PART II Item 5. Item 6. Item 7. Item 7A. Item 8. Item 9. Item 9A. Item 9B. Item 9C. PART III Item 10. Item 11. Item 12. Item 13. Item 14. Business.............................................................................................................................................................. Risk Factors........................................................................................................................................................ Unresolved Staffff Comments .............................................................................................................................. Cybersecurity...................................................................................................................................................... Properties............................................................................................................................................................ Legal Proceedings .............................................................................................................................................. Mine Safety Disclosures..................................................................................................................................... Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ............................................................................................................................................................ [Reserved] .......................................................................................................................................................... Management’s Discussion and Analysis of Financial Condition and Results of Operations ............................ Quantitative and Qualitative Disclosures About Market Risk ........................................................................... Financial Statements and Suppl ementary Data .................................................................................................. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ............................ Controls and Procedurd es..................................................................................................................................... Other Information............................................................................................................................................... Disclosure Regarding Foreign Jurisdictions that Prevent Inspections ............................................................... u Directors, Executive Offiff cers and Corporate Governance ................................................................................. Executive Compensation.................................................................................................................................... Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters .......... Certain Relationships and Related Transactions, and Director Independence................................................... Principal Accountant Fees and Services ............................................................................................................ PART IV Exhibits and Financial Statement Schedules...................................................................................................... Item 15. Item 16. Form 10-K Summary.......................................................................................................................................... SIGNATURES ................................................................................................................................................................................. 5 11 23 23 24 25 25 25 26 26 40 40 74 74 77 77 77 77 77 77 77 78 81 82 3 FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about H&E Equipment Services, Inc.’s (“H&E”, the “Company”, “our”, “we” and “us”) 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,” “projeo ct,” “intend,” “forff esee” 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 capia tal expenditures, the likelihood of success in expanding our business, financing plans, budgets, working capia tal 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. We believe that these risks and uncertainties include, but are not limited to, those described in the “Risk Factors” section of this Annual Report on Form 10-K. These factors should not be construerr d as exhaustive and should be read with the other cautionary statements in this Annual Report on Form 10-K. 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 availabla e information. Important assumptions relating to the forward-looking statements include, among others, assumptions regarding demand for our products, the expansion of product offeff rings 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 actuat looking statement. In addition, even if our actual results are consistent with the forward-looking statements contained in this Annual Report on Form 10-K, those results may not be indicative of results or developments in subsu equent periods. Many of these factors are beyond our ability to control or predict. Such factors include, but are not limited to, the following: l results to differ materially from those contained in any forward- • • • • • • • • • • • • • • • • general economic and geopolitical conditions in North America and elsewhere throughout the globe and construcr industrial activity in the markets where we operate in North America; tion and our ability to forecast trends in our business accurately, and the impact of economic downturt ns and economic uncertainty on the markets we serve (including as a result of current uncertainty due to inflation and increasing interest rates); the impact of conditions in the global credit and commodity markets and their effeff ct on construcr economy in general; tion spending and the trends in oil and natural gas which could adversely affeff ct the demand for our services and products; our inability to obtain equipment and other suppl as a result of suppl y chain disrupt u u r ies for our business from our key suppl u iers on acceptabla e terms or at all, ions, insolvency, financial difficulties, suppl u ier relationships or other factors; increased maintenance and repair costs as our fleet ages and decreases in our equipment’s residual value; risks related to a global pandemic and similar health concerns, such as the scope and duration of the outbrt eak, government actions and restrictive measures implemented in response to the pandemic, material delays and cancellations of construcr ions and other impacts to the business; tion or infrastructurt e projects, labor shortages, suppl y chain disrupt u a rr our indebtedness; risks associated with the expansion of our business and any potential acquisitions we may make, including any related capital expenditures, or our ability to consummate such acquisitions; our ability to integrate any businesses or assets we acquire; competitive pressures; security breaches, cybersecurity attacks, increased adoption of artificff personal information, compliance with data protection laws and other disrupt rr ial intelligence technologies, failure to protect ions in our information technology systems; adverse weather events or natural disasters; risks related to climate change and climate change regulation; compliance with laws and regulations, including those relating to environmental matters, corporate governance matters and tax matters, as well as any future changes to such laws and regulations; and other factors discussed under Item 1A – Risk Factors or elsewhere in this Annual Report on Form 10-K. Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the r we file this Annual Report on Form 10-K, whether as a result of any new information, future events or otherwise. Securities and Exchange Commission (“SEC”), we are under no obligation to publicly update or revise any forward-looking statements afteff Investors, potential investors and other readers are urged to consider the above mentioned factors carefulff 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 reasonabla e, we cannot guarantee future results or performance. ly in evaluating the 4 Item 1. Business Our Company PART I Founded in 1961 through our predecessor companies, we have been in the equipment services business for approximately 62 years. H&E Equipment Services L.L.C. (“H&E LLC”) was formed in June 2002 through the combination of Head & Engquist Equipment, LLC, a wholly-owned subsu idiary of Gulf Wide Industries, L.L.C., and ICM Equipment Company L.L.C. In connection with our initial public offeff corporation. ry 2006, we converted H&E LLC into H&E Equipment Services, Inc., a Delaware ring in Februar We have built an extensive infrastructurt e that as of December 31, 2023 includes 137 branch facilities located in 30 states throughout the United States. H&E serves a diverse set of end markets in many high-growth geographies including branches throughout the Pacific Northwest, West Coast, Intermountain, Southwest, Gulf Coast, Southeast, Midwest and Mid-Atlantic regions. The Company’s construcrr earthmoving, material handling, and other general and specialty lines. s youngest with an equipment mix comprised of aerial work platforms, tion rental fleet is among the industry’rr While we primarily focus on providing rental equipment to our customers, we additionally sell rental and new equipment, parts, repair and maintenance functions to our customers. This approach provides us with multiple points of customer contact, an effeff ctive method to manage our rental fleet through effiff cient maintenance and the profitff able distribution of fleet. Our management, from the corporate level down to the branch store level, has extensive industryrr experience. We believe that the operating experience and extensive infrastructurt e we developed throughout our historyrr as an integrated equipment services company provides us with a ly transition to operate as a pure-play rental company. competitive advantage to broaden our industryrr expansion and successfulff Industry Background Although there has been some consolidation within the industryrr over a number of years, including the acquisitions of NES tion equipment distribution and rental remains highly fragmented and consists mainly of a small number of multi-location regional or national operators and a large Rentals, Neff Corporation and Ahern Rentals by United Rentals, Inc. (“URI”), the U.S. construcr industryrr number of relatively small, independent businesses serving discrete local markets. The industryrr economic factors including total U.S. non-residential construcr equipment and additional, region-specific factors. Construcr equipment rental companies and equipment dealers. Examples of equipment rental companies include URI, Sunbelt Rentals, and Herc Rentals. Examples of equipment dealers include Finning and Toromont. Historically, we operated subsu tantially in both channels, but in recent years we have transitioned to operate purely as an equipment rental company. Many pure equipment rental companies also provide parts and service suppor is driven by a broad range of tion machineryrr demand, demand for rental tion equipment is largely distributed to end users through two channels: tion trends, construcrr t to customers. u Products and Services Equipmi ent Rentals.ll We rent our construcr tion equipment to our customers on a daily, weekly and monthly basis. We have a well- maintained rental fleet that, at December 31, 2023, consisted of approximately 61,044 pieces of equipment having an original acquisition cost (which we define as the cost originally paid to manufact approximately 39.7 months. urt ers) of approximately $2.8 billion and an average age of ff Sales of Rental Equipmi ent. We sell used equipment primarily from our rental fleet. For the year ended December 31, 2023, approximately 99.3% of our used sales revenues were derived from sales of rental fleet. Sales of New Equipmi ent. We sell new construcr tion equipment and are a U.S. distributor for nationally recognized suppl u iers including Takeuchi, JLG Industries, Gehl, and Genie Industries (Terex). Partstt Sales. We provide parts to our own rental fleet and sell parts to customers for the equipment we sell. We maintain a parts inventoryrr operations enable us to maintain a high-quality rental fleet and provide additional product suppor in order to provide timely parts and service suppor u u t to our own rental fleet as well as to our customers. In addition, our parts t to our end users. Service Support. We provide maintenance and repair services to our own rental fleet and for our customers’ owned equipment. We devote resources to training our technical service employees and over time, we have built a service infrastructurt e that we believe would be difficult for companies without the requisite resources and lead time to effeff ctively replicate. In addition to our principal business activities mentioned above, we provide ancillaryrr equipment suppor u t activities including transportation, hauling, parts shipping and loss damage waivers. 5 Sales and Marketing We have a sales force which specializes in equipment rentals and sales. To further develop knowledge and experience, we provide our sales force with extensive training, including frequent factoryrr and in-house training by manufact urt er representatives regarding the operational featurt es, operator safety training and maintenance of the equipment that we rent and sell. This training is essential, as our sales personnel regularly call on customers’ job sites, ofteff n assisting customers in assessing their immediate and ongoing equipment needs. In addition, we have a commission-based compensation program for our sales force team. ff We maintain a proprietary customer relationship management system. We believe that this comprehensive customer and sales management tool enhances our regional territory operations by increasing the productivity and effiff ciency of our sales representatives and sales managers as they are provided real-time access to critical jobsite information. We are partnered with some of the world’s most advanced data information companies to assure our industryrr data is complete. We have developed strategies to identify target customers for equipment rentals in all markets. These strategies allow our sales force to identifyff new operations. frequent rental users, function as advisors and problem solvers for our customers, and accelerate the sales process in While our specialized, well-trained sales force strengthens our customer relationships and fosters customer loyalty, we also promote our business through marketing and advertising, including digital marketing, direct mail campaigns, select industryrr publications and associations, and our Company website at www.he-equipment.com. q p Our Competitive Strengths Integre ated Platfot rm of Equipmi ent, Products and Services. We believe that our operating experience and the extensive infrastructurt e we have developed through years of operating as both an equipment rental company and equipment distributor provides us with a competitive advantage to broaden our industryrr expansion and successfulff ly transition to a primarily rental-focused company. Key strengths of ours include: • • • • • • the ability to provide premium brands and a comprehensive line of equipment and services; the ability to track utilization and facilitate the transferff demand; of our fleet across multiple locations to adjud st to local customer high quality rental fleet suppor u ted by our strong product suppor u t capabilities; establa ished retail sales network resulting in the profitaff bla e disposal of our used equipment; purchasing power gained through purchases for our rental operations fleet; and operational cost effiff ciencies across our organization, including with respect to purchasing, information technology, back-office suppor t and marketing. u High- i Quality,yy Multipurpos rr e Fleet. Our equipment fleet represents a significant investment and reflects our commitment to providing an array of rental equipment to our customers in a variety of industries. Our focus on our core types of construcr equipment allows us to better provide the specialized knowledge and suppor equipment. These core types of equipment are attractive because they have a long usefulff industryrr demand. t that our customers demand when renting and purchasing life,ff high residual value and generally strong tion u Diverserr Customer Marketkk s.tt We provide equipment rental services to customers in a wide variety of markets, including non- residential construcrr reduces our end-market exposure to any one particular market. tion, industrial, infrastructurt e, and other industries. We believe that the diversificff ation of our customer base Complementaryr Partstt and Services Segme ents. Our parts and services businesses allow us to maintain our rental fleet in excellent condition and to offeff r our customers high-quality rental equipment. Well-Developeo d Infrn astructure. We have built an infrastructurt e that as of December 31, 2023 included a network of 137 branch facilities in 30 states. Our workforce included, as of December 31, 2023, a highly-skilled group of approximately 613 service technicians and an aggregate of 332 sales people in our sales force. We believe that our well-developed infrastructurt e helps us to better serve large multi-regional customers and provides an advantage when competing for lucrative fleet and project management business as well as the ability to quickly capitalize on new opportunities. 6 Strong Supplier Relationshipsi . We have longstanding relationships with nationally-recognized equipment suppl u iers, including JLG Industries, Gehl, Genie Industries (Terex), Komatsu, Takeuchi, JCB, John Deere, Yanmar, Skyjkk ack, Sany and Case. These relationships improve our ability to negotiate equipment acquisition pricing and allow us to purchase parts at wholesale costs. Customized Infon rmation Technology Systyy ems. Our information systems allow us to actively manage our business and our rental fleet. We have a customer relationship management system that provides our sales force with real-time access to critical jobsite information. This comprehensive sales management tool enhances our regional territory operations by increasing the productivity and effiff ciency of our sales representatives and managers. We are expanding our proprietary, automated digital customer platform, CONNECT, which offeff payments, manage contracts, utilize telematics, customize reports, make service requests and access customer suppor enterprise resource planning system enhances our ability to provide more timely and meaningfulff rs comprehensive self-sff ervice capaa bia lities allowing customers to reserve equipment, schedule delivery, make t. In addition, our information to manage our business. u Strong Customer Relationshipsi . We have a diverse base of approximately 44,200 customers as of December 31, 2023 who we believe value our high level of service, knowledge and expertise. Our customer base includes a wide range of industrial and commercial companies, construcrr tion contractors, manufacturt ers, public utilities, municipalities, maintenance contractors and numerous and diverse other large industrial accounts. Our branches enable us to closely service local and regional customers, while our infrastructurt e enables us to effeff ctively service multi-regional and national accounts. We believe that our expansive presence and commitment to supeu rior service at all levels of the organization is a key differentiator to many of our competitors. As a result, we spend a significant amount of time and resources to train all key personnel to be responsive and deliver high quality customer service and well-maintained equipment so that we can maintain and grow our customer relationships. Expex rienced Management Team. Our senior management team is led by Bradley W. Barber, our Chief Executive Offiff cer, who has over 29 years of industryrr experience. Our senior and regional management team have approximately 26 years on average of industryrr experience. Our branch managers have extensive knowledge and industryrr experience as well. Our Business Strategy Our business strategy includes, among other things, managing the life cycle of our rental equipment, expanding our rental product rings through branch expansion and pursuing selective acquisitions. However, rings, increasing the availabia lity of our product offeff offeff the timing and extent to which we implement these various aspects of our strategy depend on a variety of factors, many of which are outside our control, such as general economic and geopolitical conditions and construcr tion activity in the U.S. Managing the Lifei Cycle of Our Rental Equipmi ent. We actively manage the size, quality, age and composition of our rental fleet, employing a “cradle through grave” approach. During the lifeff of our rental equipment, we (1) aggressively negotiate on purchase price; (2) use our customized information technology systems to closely monitor and analyze, among other things, time utilization (equipment usage based on customer demand and calculated as our fleet’s original equipment cost on-rent divided by our fleet’s total original equipment cost, averaged over the time period), rental rate trends and pricing optimization and equipment demand; (3) continuously adjud st our fleet mix and pricing; (4) maintain fleet quality through quality control inspections and our on-site parts and services suppor competitive prices, optimally utilize our fleet, cost-effecff equipment at the end of its usefulff t; and (5) dispose of fleet through sales of rental equipment. This allows us to purchase our rental equipment at tively maintain our equipment quality and maximize the value of our life. u Expandi x ng our Rental Product Offeff rings. We intend to expand our product offeff rings to customers by offeff ring specialty rental product solutions. Recently, we introduced trench safety product solutions and pump and power equipment in selected markets. It is our intention to expand these specialty rental offeff typically provide higher margin opportunities than general rental products. rings throughout our geographic footprt int. Specialty rental product offeff rings Increasing the Availability of our Product Offeff rings through Branch Expans x ion. We intend to expand our network of branch locations, thereby increasing the availabia lity of rental products to our customers to meet their specific needs. Our branch expansion strategy focuses on expanding in markets where we have a presence and benefit from name and brand recognition. Expanding our branch network allows us to grow our margins and improve profitff ability through revenue mix and by leveraging our fixed costs. Executing Strategie c Divestitures. We are now a pure-play rental company transitioning over the past few years from our historical operations as an integrated equipment services company by completing strategic divestiturt es of our distribution channels. We completed one divesturt e during the year ended December 31, 2022 and two divestitures during the year ended December 31, 2021. On December 15, 2022, we sold our Komatsu distribution rights in Louisiana to Waukesha-Pearce Industries, LLC. On September 17, 2021, we sold our Little Rock, Arkansas and Springdale, Arkansas owned-branches to Bramco, Inc. and relinquished our related territory distribution rights with equipment manufact our crane business to a wholly-owned subsu idiary of The Manitowoc Company, Inc. The crane business sale represents our strategic shiftff to a pure-play rental business and qualifieff d for discontinued operations accounting treatment. urt ers Komatsu, Wirtgen Group and Takeuchi. Effeff ctive October 1, 2021, we sold ff 7 Pursuing Selective Acquisiii tions. We intend to continue to evaluate and pursue, on an opportunistic basis, acquisitions that meet bia lity. We have completed five acquisitions over the last six years. Effeff ctive January 1, 2018, we completed the acquisition of our selection criteria with the objective of increasing our revenues, improving our profitaff bia lity, and strengthening our competitive position. We are focused on identifying and acquiring rental companies, including general rental and specialty rental companies, to complement our existing business, broaden our geographic footprt int, and increase our density in existing markets, as well enter new markets where feasible expansion opportunities may exist. Growth through acquisitions allows us to leverage our fixed costs and grow profitaff Contractors Equipment Center, LLC. Effeff ctive April 1, 2018, we completed the acquisition of Rental Inc. Effeff ctive Februar we completed the acquisition of Cobra Equipment Rentals, LLC, dba We-Rent-It. Effeff ctive October 1, 2022, we completed the acquisition of One Source Equipment Rentals, Inc. (“OSR”), a privately-held equipment rentals company with 10 branch locations primarily in the Midwest. Effeff ctive November 1, 2023, we completed the acquisition of Giffin Equipment Rentals, a privately-held equipment rentals company with three branch locations in Califorff nia. ry 1, 2019, Customers We have a wide range of customers across diverse markets. We serve approximately 44,200 customers in the United States, primarily in the Pacific Northwest, West Coast, Intermountain, Southwest, Gulf Coast, Southeast, Midwest and Mid-Atlantic regions. Our customers include industrial and commercial companies, construcrr contractors, municipalities and numerous and diverse other large industrial accounts. They range from individuals to large contractors and industrial and commercial companies who typically operate under equipment and maintenance budgets. Our branches enable us to closely service local and regional customers, while our infrastructurt e enables us to effeff ctively service multi-regional and national accounts. Our contracts with customers vary in duration, but subsu tantially all of our rental contracts include rates for daily, weekly or monthly use and typically include cancellation clauses without termination penalties. In 2023, our largest customer accounted for less than 4% of total revenues. No single customer accounted for more than 10% of our total revenue in 2023. Our top ten customers combined accounted for approximately 7.6% of our total revenues in 2023. urt ers, public utilities, maintenance tion contractors, manufact ff Suppliers We purchase a significant amount of equipment from leading, nationally-known original equipment manufacff turers. We purchased approximately 52.8% of our equipment from five manufact ended December 31, 2023. These relationships improve our ability to negotiate equipment acquisition pricing. Additionally, we also purchase equipment from nationally-recognized equipment suppl iers including JLG Industries, Gehl, Komatsu, Case and Takeuchi. While we believe that we have alternative sources of supplu categories, termination of one or more of our relationships with any of our majoa r suppl effeff ct on our business, financial condition or results of operations if we were unabla e to obtain adequate or timely equipment. y for the equipment we purchase in each of our principal product urt ers (JCB, Skyjkk ack, Sany, John Deere, and SkyTkk iers of equipment could have a material adverse rak) during the year u u ff Competition The equipment industryrr t. Although there has been some consolidation within the equipment industryrr istributorship is generally comprised of either pure rental equipment companies or manufact companies. We historically operated as an integrated equipment services company by renting, selling and providing parts and services suppor u highly fragmented and consists mainly of a small number of multi-location regional or national operators and a large number of relatively small, independent businesses serving discrete local markets. Many of the markets in which we operate are served by numerous competitors, ranging from national and multi-regional equipment rental companies (for example, URI, Sunbelt Rentals and Herc Rentals) to small, independent businesses with a limited number of locations. in recent years, the equipment industryrr urt er dealer/drr remains ff We believe that participants in the equipment rental industryrr generally compete on the basis of availabia lity, quality, reliability, deliveryrr and price. In general, large operators enjon y subsu tantial competitive advantages over small, independent rental businesses due to a distinct price advantage. Many rental equipment companies’ parts and services offeff expand due to the training, infrastructurt e and management resources necessary to develop the breadth of service offeff knowledge our service technicians are able to provide. Some of our competitors have significantly greater financial, marketing and other resources than we do. rings are limited and may prove difficult to rings and depth of Traditionally, equipment manufacff turers distributed their equipment and parts through a network of independent dealers with distribution agreements. As a result of consolidation and competition, both manufacff turers and distributors sought to streamline their operations, improve their costs and gain market share. Our establa ished, integrated infrastructurt e enables us to compete directly with our competitors on either a local, regional or national basis. We believe customers place greater emphasis on value-added services, teaming with equipment rental and sales companies who can meet all of their equipment, parts and services needs. 8 Seasonality Although our business is not significantly impacted by seasonality, the demand for our rental equipment tends to be lower in the winter months. The level of equipment rental activities is directly related to non-residential and industrial construcr maintenance activities. Thereforff e, equipment rental performance will be correlated to the levels of current construcrr severity of weather conditions can have a temporaryrr impact on the level of construcr tion activities. tion and tion activities. The Equipment cycles are also subju ect to some seasonality with the peak rental periods occurring during the spring and summer seasons and peak selling periods occurring during the fourth quarter. Environmental and Safety Regulations Our facilities and operations are subju ect to comprehensive and frequently changing federal, state and local environmental and occupau tional health and safety laws. These laws regulate (1) the handling, storage, use and disposal of hazardous materials and wastes and, if any, the associated cleanupu of properties affeff cted by pollutants; (2) air quality (emissions); and (3) wastewater. While our operations generally do not raise significant environmental risks, we use petroleum products, solvents and other hazardous subsu tances for fueling and maintaining our equipment and vehicles. We have made, and will continue to make, capia tal and other expenditures to comply with environmental requirements. We do not currently anticipate any material adverse effeff ct on our business, financial condition or competitive position as a result of our effoff rts to comply with such requirements. In the future, federal, state or local governments could enact new or more stringent laws or issue new or more stringent regulations concerning environmental and worker health and safety matters, reporting and disclosure obligations, or effeff ct a change in their enforcement of existing laws or regulations, that could affeff ct our operations and increase our operational and compliance expenditures. Also, in the future, contamination may be found to exist at our facilities or off-sff There can be no assurance that we, or various environmental regulatoryrr agencies, will not discover previously unknown environmental non-compliance or contamination. We could be held liabla e for such newly-discovered non-compliance or contamination. It is possible that changes in environmental and worker health and safety laws or liabia lities from newly-discovered non-compliance or contamination could have a material adverse effeff ct on our business, financial condition and results of operations. ite locations where we have sent wastes. Human Capital We believe our employees are our greatest asset. As of December 31, 2023, we had approximately 2,765 employees, of which 977 are salaried personnel and 1,788 are hourly personnel. A collective bargaining agreement relating to two branch locations covers approximately 75 of our employees. We believe our relations with our employees are favorable and we have never experienced a work stoppage. Generally, the total number of employees remains relatively consistent throughout the year. Acquisition activity or the opening of new branches may increase the number of our employees or fluctuations in the level of our business activity could require some staffiff ng level adjud stments in response to align with customer demand. H&E employees drive our business growth and success. Likewise, we strive to drive their own profesff sional growth, success and wellbeing. We do so by providing a workplkk ace in which safety, diversity, inclusion, talent development, training, competitive pay and quality benefits are prioritized. As an equipment company run by equipment people, our culture is one built on integrity, cooperation and teamwork. H&E workplkk ace policies and initiatives aim to create a workplkk ace of choice that attracts and retains the talent needed to achieve our business objectives. Health and Safetff y.tt The health and safety of our employees is an unwavering core value and is prioritized through our LIVESAFE program, which focuses on employee safety at work, home, and play. Senior operational leaders play a vital role in the communication, implementation, and follow-through of our safety program and we require accountability, commitment and compliance from all employees. Behavioral safety is the foundation of our safety culture, which incorporates elements such as job safety observations, near miss reporting, safety meetings and ride-along programs, among others. We also require all new hires to perform job specificff training. Additionally, we require all employees to participate in annual safety training. These proactive measures in conjunction with the full implementation of stop-work authority at all levels helps to set a culture of safety at branch locations. Assessments and standard safety performance metrics provide for transparency and accountability at all levels of our organization while incentive programs focus on accident prevention and behavior safety improvements to reward employee safety performance. Utilizing Occupau tional Safety and Health Administration (“OSHA”) standard metrics, in 2023 our lost time incident rate was 0.10 and our total reportable incident rate was 0.98. and regulatoryrr Emplm oyee Wellness and Benefie ts. We equip our employees with the benefits and tools they need to lead healthy, secure and balanced lives to help them perform at their best. We offeff plans, medical insurance, prescription drugr disabia lity insurance, accident and critical illness insurance and dependent care programs. We additionally provide paid time off,ff bereavement leave, wellness credits and employee assistance programs. r an array of comprehensive benefit options including retirement savings benefits, dental insurance, vision insurance, flexible medical spending accounts, lifeff and 9 Inclusion and Diversity.tt We strive to build a team that reflects the wide diversity of customers and communities that we serve across the country. Moreover, we want to create a work environment in which everyrr employee feels welcome, included and valued for their unique perspectives and experiences. The Company is committed to a full spectrum of diversity inclusive of gender, ethnicity, race, sexual orientation, age, disabia lity, veteran statust suppor ting all groups, including historically underrepresented groups. As of December 31, 2023, approximately 29% of our u workforce were people of color and 14% of our workforce are female. During 2023, we partnered with the Department of Defense’s SkillBridge Program, which provides service members with the opportunity to participate in industryrr transitioning out of their military careers. We intend to continue these and other effoff more inclusive workplk ace. , religion, culturt e, background, and experiences. Our effoff rts to further diversifyff our team as we build a training programs while rts focus on hiring and Training and Development. Development and advancement opportunities are one of the most important factors in retaining our employees. Programs to develop and enhance skills improve our business performance and provide employees with meaningfulff opportunities. We offeff technology and vehicle operations. Our talent development program includes a variety of training methodologies including field experiences, on-the-jo- b training, online/system suppor full-time employees average 54 hours of training and development per year. r training in an array of categories such as management and leadership, rentals, sales, parts and service, safety, ted training, classroom training and helpdesk suppor t. On an annual basis, our u u career Social Responsibility. We believe strong businesses and strong communities depend upon one another. We share our success by giving back to communities and, in turn, they provide us with the talent required to drive our business success. We encourage our branches to pursue outreach opportunities that best meet the needs of their respective communities and interests of their employees. At the corporate level, we focus on the educd ation of disadvantaged youth, outreach programs and community awareness to aid individuals and families seeking treatment and recovery services and mental health resources in our headquarters community of Baton Rouge, Louisiana. In recent years, we have provided philanthropic and volunteer suppor t to two innovative local high schools where children of low-income parents can receive a college preparatoryrr educd ation and assisted to fund an outreach program providing community awareness for mental health and recovery services. We also administer a business and employee assistance fund that u suppor ts small businesses and employees in emergency situations and disaster recovery. u Sustainability H&E recognizes the importance of environmental stewardship, social responsibility and transparent governance. We are committed to advancing each of these through our business conduct and operations. A cross-functional environmental, social and governance (“ESG”) task force of senior management leads this work with oversight from the ESG Committee of the Company’s Board of Directors. During 2022, we engaged an external resource to begin initial development of an ESG strategy and ESG programs and policies that will serve as a blueprint to guide our progress going forward, and during 2023 we continued to work with them on building our ESG framework. Additionally in 2023, we published an ESG page on our Company’s web page as part of our commitment to advancing our ESG reporting and disclosures to customers, manufact urt ers, and investors alike. ff We are working to identifyff and understand areas of the business in which we can reduce the environmental impact, including our footprt carbon int. As an example, we have deployed telematics tracking and strategies to improve the management of our r transportation fleet, which has resulted in our ability to reduce the idle time of our transportation vehicles, saving fuel consumption. While to date we have not completed an inventoryrr of our greenhouse gas emissions, we realize that use of rental equipment by customers is a significant component. To address this, we are committed to evaluating alternative fuel and electric products for our rental fleet as these technologies become availabla e, are successfully tested in the field of operation and as customer demand for them increases. Our batteryrr and electricity powered equipment currently comprise 34% of the units we rent as of December 31, 2023. Our environmentally friendly fleet includes a range of battery-powered and hybrid equipment such as scissor lifts, boom lifts and material handling equipment. Available Information We file electronically with the SEC annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. The SEC maintains an Internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Copies of these reports, proxy and information statements and other information may be obtained by electronic request at the following e-mail address: publu icinfo@sec.gov. Copies of our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, ownership reports for insiders and any exhibits to and amendments to these reports filed with or furnished to the SEC are availabla e free of charge through our internet website (www.he-equipment.com) as soon as reasonabla y practicable afteff r filing with the SEC. We use the Investor Relations section of our website as a means of disclosing material non-public inforff mation and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investor Relations section of our website, in addition to following press releases, SEC filings and public conferff ence calls and webcasts. q p 10 Additionally, we make availabla e free of charge on our internet website: • • • • • our Code of Conduct and Ethics; the charter of our Corporate Governance and Nominating Committee; the charter of our Compensation Committee; the charter of our Environmental, Social and Governance (ESG) Committee; and the charter of our Audit Committee. Item 1A. Risk Factors Investing in our securities involves a high degree of risk. You should consider carefully the following risk factors and the other information in this Annual Report on Form 10-K, including our consolidated financial statements and related notes, before making any investment decisions regarding our securities. If any of the following risks actuat operating results could be adversely affeff cted. As a result, the trading price of our securities could decline and you may lose part or all of your investment. lly occur, our business, financial condition and skk Operational and Competitive Riskii p p ss couldll be adverserr Our busineii geopolitll ictt al conditidd ons in general, which couldll ent, depree lower sales prices,s resultintt g in a declinll e in our revenues, gross margins and operating results. by declinll es in construction and industritt al activities, or a downturn in the economy or rates and lead to decreased demand for equipmii essed equipmii ly affeff ctedtt ent rentaltt Our equipment is principally used in connection with construcrr tion and industrial activities. Consequently, a downturt n in tion or industrial activities, or the economy in general, may lead to a decrease in the demand for equipment or depress rental construcr rates and the sales prices for our equipment. Our business may also be negatively impacted, either temporarily or long-term, by: • • • • • • • • • • • • • a reduction in spending levels by customers; unfavff orable credit markets affeff cting end-user access to capital, as well as our access to capital when or if needed; adverse changes in federal, state and local government infrastructurt e spending or the related regulatoryrr regime; an increase in costs, including the cost of construcrr tion materials, as a result of inflation or other factors; excess fleet in the equipment rental industry;rr adverse weather conditions or natural disasters which may affeff ct a particular region; a decrease in the level of exploration, development, production activity and capia tal spending by oil and natural gas companies; a prolonged shutdown of the U.S. government; an increase in interest rates; u suppl y chain disrupt r ions; geopolitical conditions, including the war in Ukraine and escalation of conflicff Israel/Hamas war; ts in the Middle East, including the public health crises and epidemics and similar health concerns; or terrorism or hostilities involving the United States. These factors have in the past, and could in the future, among other things, cause weakness in our end-markets and impact customer demand for equipment rentals, reduce the availabia lity and productivity of our employees, increase our costs, result in delayed payments from our customers and uncollectible accounts, impact previously announced strategic plans or impact our ability to access funds from financial institutt residential construcrr position, results of operations and cash flows in the future and may also have a material adverse effeff ct on residual values realized on the disposition of our rental fleet. tion and industrial sectors caused by these or other factors could have a material adverse effeff ct on our financial ions and capia tal markets on terms favorable to us, or at all. Weakness or deterioration in the non- 11 We face riskii skk related to heightgg entt ed infln atll iott n, recession, finaii ncial and creditdd market disruii ptu iott ns and othett r economic conditdd iott ns. Our financial results, operations and forecasts depend significantly on worldwide economic and geopolitical conditions, the u u ions in demand, suppl demand for our products, and the financial condition of our customers and suppl have in the past resulted, and may result in the future, in reduced demand for products resulting in decreased sales, margins and earnings. In 2022, the U.S. experienced significantly heightened inflationary pressures and subsu equent economic recovery, causing markets. The general economy in 2022 was also affeff cted by the war in Ukraine and r disrupt associated increase in energy costs. While the global inflation rate began to stabilize and, in some cases decline, in 2023 as a result of central bank policy tightening, core inflation has proved persistent as a result of the preceding factors, in addition to others such as the escalating number of significant confliff cts throughout the globe. We may not be able to fully mitigate the impact of inflation through price increases, productivity initiatives and cost savings, which could have an adverse effeff ct on our results of operations. In addition, if the U.S. economy enters a recession, we may experience sales declines which could have an adverse effeff ct on our business, operating results and financial condition. iers. Economic weakness and geopolitical uncertainty y chains, and labor a rr u ions in financial and/or credit markets may impact our ability to manage normal commercial relationships with iers and creditors. For instance, in the event of a recession or threat of a recession, our customers and suppl Similarly, disrupt our customers, suppl may suffer their own financial and economic challenges and as a result they may demand pricing accommodations, delay payment, or become insolvent, which could harm our ability to meet our customer demands or collect revenue or otherwise could harm our business. An economic or credit crisis could occur and impair credit availabia lity and our ability to raise capia tal when needed. A disrupt r addition, changes in tax or interest rates in the U.S. or other nations, whether due to recession, economic disrupt could have an adverse effeff ct on our operating results. ion in the financial markets could impair our banking or other business partners, on whom we rely for access to capital. In ions or other reasons, iers u rr Economic weakness and geopolitical uncertainty may also lead us to impair assets, take restructurt ing actions or adjud st our operating strategy and reduce expenses in response to decreased sales or margins. We may not be able to adequately adjud st our cost structurt e in a timely fashion, which could have an adverse effeff ct on our operating results and financial condition. Uncertainty about economic conditions may increase foreign currency volatility in markets in which we transact business, which could have an adverse effeff ct on our operating results. The inabiliii tyii to forecast trends accurately maya have an adverserr impact on our busineii ss and finaii ncial conditiodd n. An economic downturt n or economic uncertainty makes it difficult for us to forecast trends, our future operating performance, cash flows and financial position, which could have an adverse impact on our business and financial condition. Additionally, uncertainty regarding future oil and natural gas prices have negatively impacted the exploration, production and construcrr of our customers in those markets. Uncertainty regarding future equipment product demand could cause us to maintain excess equipment inventoryrr and increase our equipment inventoryrr carryirr ng costs. Failure to accurately forecast these trends could cause us to change or re-evaluate certain of our strategies, including as it relates to acquisitions or opening of new branch locations. Alternatively, this forecasting difficulty in addition to laboa rental that could result in an inability to satisfyff demand for our products and a loss of market shares. ions could cause a shortage of equipment for sale or r shortages and suppl y chain disrupt tion activity u rr Our revenue and operatingii us to grow our busineii ss. resultstt maya fluctuate,tt which couldll result in a declinll e in our profitaff ii ytt and make it more diffi bilit i cult for Our revenue and operating results have historically varied from quarter to quarter. Periods of decline could result in an overall decline in profitaff quarterly results to continue to fluctuate in the future due to a number of factors, including: bia lity and make it more difficult for us to make payments on our indebtedness and grow our business. We expect our • • • • • • • • general economic conditions in the markets where we operate; the cyclical nature of our customers’ business, particularly our construcr industry;rr tion customers and customers in the oil and gas sales and rental patterns of our construcr months; tion customers, with sales and rental activity tending to be lower in the winter changes in the size of our rental fleet and/or in the rate at which we sell used equipment from our fleet; changes in customer, fleet, geographic and segment mix; an overcapacity of fleet in the equipment rental industry;rr changes to technological requirements in our equipment or in our rental platforms; severe weather and seismic conditions temporarily affeff cting the regions where we operate; 12 • • • • • • • suppl y chain or other disrupr u u key suppl iers on acceptabla e terms or at all; tions that impact our ability to obtain equipment and other suppl u ies for our business from our cost increases as a result of inflation; changes in corporate spending for plants and facilities or changes in government spending for infrastructurt e projects; changes in interest rates and related changes in our interest expense and our debt service obligations; the possible need, from time to time, to record goodwill impairment charges or other write-offs or charges due to a variety of occurrences, such as the impairment of assets, rental location divestitures, dislocation in the equity and/or credit markets, consolidations or closings, restructurt ings, or the refinancing of existing indebtedness; the effeff ctiveness of integrating acquired businesses, or acquired assets, and new start-up locations; and timing of acquisitions and new location openings and related costs. In addition, we incur various costs when integrating newly acquired businesses or opening new start-up locations, and the bia lity of a new location is generally expected to be lower in the initial months of operation. profitaff The impacm ts of a global and couldll have a material adverserr ll pandemic and simi ii laii r healthll concerns,s couldll have a signi effeff ct on our operations and finaii ncial results. ificff ant impacm t on worldwll idedd economic conditiodd ns u u A significant outbrt eak of epidemic, pandemic, or contagious diseases, could cause a widespread health crisis that could result in ions shortages or other disrupt y and/or demand for our equipment. Any quarantines, labor iers, or our customers would likely adversely impact our sales and operating results. The extent of any additional an economic downturt n, affeff cting the suppl to us, our suppl impact from a pandemic on the Company’s operational and financial performance and liquidity will depend on various developments, including the duration and spread of the outbrt eak, governmental limitations on business operations generally, and its and their impact on potential customers, employees, and suppl iers, vendors and distribution partners. As we cannot predict the potential future impact of the duration or scope of a global pandemic or similar health concerns, any resulting future financial impact cannot be reasonabla y estimated. In addition, to the extent that a global pandemic or similar health concerns adversely affeff ct our results of operations or financial position, it may also heighten the other risks described in this Item 1A-Risk Factors. u a r We are subject to competiti maintain revenues or profitaff .yy bilityii tt on, which maya have a material adverserr effeff ct on our busineii ss by reducingii our abiliii tyii to increase or The equipment rental industryrr is highly competitive and highly fragmented. Many of the markets in which we operate are served by numerous competitors, ranging from global, national and multi-regional equipment rental companies to small, independent businesses with a limited number of locations. We generally compete on the basis of availabia lity, quality, reliabia lity, delivery,rr price, technology and environmental friendliness. Some of our competitors have significantly greater financial, marketing and other resources than we do, and may be able to reduce rental rates. We may encounter increased competition from existing competitors or new market entrants in the future, which could have a material adverse effeff ct on our business, financial condition and results of operations. Furthermore, competition may begin to emerge on the basis of information technology infrastructurt e. We expect our competitors ial intelligence (“AI”) and machine learning to continue to improve their information technology systems, including the use of artificff solutions, to further enhance operations and their rental platforms. Our ability to innovate our own technology infrastructure and appropriately address user experience will affeff ct our ability to compete. We purchase a signi relationshipsii withii equipmii ent in an adequatett or timeii ly manner.rr ififf cant amount of our equipmii anyn of those manufau cturersrr couldll have a material adverserr ent from a limite ii d number of manufacff turers. Terminatiott n of one or more of our to obtaitt nii ss, as we maya be unablell effeff ct on our busineii We purchase most of our equipment from leading, nationally-known original equipment manufact ff ended December 31, 2023, we purchased approximately 52.8% of our equipment from five manufact Deere, and SkyTkk rak). Although we believe that we have alternative sources of suppl core product categories, termination of one or more of our relationships with any of these majoa r suppl adverse effeff ct on our business, financial condition or results of operations if we were unabla e to obtain equipment in an adequate or urt ers shuts down or if two or more of them consolidate operations, this could timely manner. Additionally, if one of these manufact have a significant effeff ct on suppu ly and pricing of equipment and thus could have a material adverse effeff ct on our business, financial condition or results of operations. y for the equipment we purchase in each of our iers could have a material u u ff ff urt ers (“OEMs”). For the year urt ers (JCB, Skyjkk ack, Sany, John 13 Disruii ptu iott ns in our supplu yll chainii couldll result in adverserr effeff ctstt on our resultstt of operations and finaii ncial perforff marr nce. u Suppl y chain disrupt r ions could impact our ability to obtain equipment and other suppl r ies for our business from our key suppl ions related to the timing of receiving equipment orders, which have on acceptable terms or at all. To date, our suppl y chain disrupt been moderate and did not extend beyond a significant period of time. We may experience more severe suppl future or one or more suppl ies from other sources u suppl in a timely manner or at all, could impair our ability to meet customer demand and thereforff e could have a material adverse effeff ct on our business, financial condition or results of operations. urt e or deliver equipment or parts. Any suspension or delay in any of our iers’ ability to provide us adequate equipment or supplu ies, or in our ability to procure equipment or suppl ier’s inability to manufact y chain disrupt u u u u u u ff rr iers ions in the The cost of new equipmii equipmii ent. In some cases, we maya not be ablell ent that we purchase for use in our rentaltt to procure equipmii fleet ll maya increase and thereforff ent on a timely basis due to supplu e we maya spend more for such s.tt iell r constraintii ff The cost of new equipment from manufact urt ers that we purchase for use in our rental fleet may increase as a result of increased r raw material costs, including increases in the cost of steel, which is a primary material used in most of the equipment we use, laboa shortages, inflation, suppl rr climate change. In addition, in an effoff standards. If we are unabla e to meet such standards, then the expectations of our customers, business and results of operations could be materially adversely affeff cted. These increases could materially impact our financial condition or results of operations in future periods if we are not able to pass such cost increases through to our customers. rt to combat climate change, our customers may require our rental equipment to meet certain requirements, such as those related to emissions and ions or due to increased regulatoryrr y chain disrupt u Our rentaltt ll fleet is subject to residual value riskii upon dispii ositiott n. The market value of any given piece of rental equipment could be less than its depreciated value at the time it is sold. The market value of used rental equipment depends on several factors, including: • • • • • • • the market price for new equipment of a like kind; wear and tear on the equipment relative to its age; the time of year that it is sold (prices are generally higher during the construcr tion season); worldwide and domestic demands for used equipment; advances in equipment technology and emission controls that may not be availabla e for older equipment; u the suppl y of used equipment on the market; and general economic conditions. We include in operating income the difference between the sales price and the depreciated value of an item of equipment sold. Although for the year ended December 31, 2023, we sold used equipment from our rental fleet at an average selling price of approximately 255.0% of net book value, we cannot assure you that used equipment selling prices will not decline. Any significant decline in the selling prices for used equipment could have a material adverse effeff ct on our business, financial condition, results of operations or cash flows. ll fleet If our rentaltt decrease.ee The coststt of new equipmii preventing us from procuring equipmii ent we use in our fleet ent on a timelyll basis. ages, our operating coststt maya increase,e we maya be unablell to pass alonll ll maya increase,e requiring us to spend more for replee acll g such costs,tt and our earnings maya ement equipmii ent or If our rental equipment ages, the costs of maintaining such equipment, if not replaced within a certain period of time, will likely increase. The costs of maintenance may materially increase in the future and could lead to material adverse effeff cts on our results of operations. In addition, older equipment may not be as attractive to our customers. The cost of new equipment for use in our rental fleet could also increase due to increased material costs for our suppl u iers (including tariffsff on raw materials) or other factors beyond our control. Such increases could materially adversely impact our financial condition and results of operations in future periods. Furthermore, changes in customer demand could cause certain of our existing equipment to become obsolete and require us to purchase new equipment at increased costs. We incur maintenance and repaee busineii ir coststt associatedtt withii ii ss in the event these coststt are greater than anticipat our rentaltt .dd edtt ll fleet equipmii ent that couldll have a material adverserr effeff ct on our As our fleet of rental equipment ages, the cost of maintaining such equipment, if not replaced within a certain period of time, generally increases. Determining the optimal age for our rental fleet equipment is subju ective and requires considerable estimates by 14 management. We have made estimates regarding the relationship between the age of our rental fleet equipment, maintenance and repair costs, and the market value of used equipment. Our future operating results could be adversely affeff cted because our maintenance and repair costs may be higher than estimated and market values of used equipment may fluctuate. Labor dispii utestt couldll disruii ptu our abilityii to serve our customtt ersrr and/or// lead to highi er labor costs.tt As of December 31, 2023, we have approximately 75 employees in Utah, a significant territory in our Intermountain region, who are covered by a collective bargaining agreement and approximately 2,690 employees who are not represented by unions or covered by collective bargaining agreements. Various unions periodically seek to organize certain of our nonunion employees. Union organizing effoff certain of our employees, which could adversely affeff ct our ability to serve our customers. Further, settlement of actuat a labor on our labor l or threatened disputes or an increase in the number of our employees covered by collective bargaining agreements can have unknown effeff cts rts or collective bargaining negotiations could potentially lead to work stoppages and/or slowdowns or strikes by costs, productivity and flexibility. a Increases or fluctuatiott ns in fuel coststt or reduced supplu iell s of fuff el couldll harm our busineii ss. We in the past have been, and in the future could be, adversely affeff cted by limitations on fuel suppl u ies or significant increases in fuel prices that result in higher costs to us for transporting equipment from one branch to another branch or one region to another region. In addition, the cost of fuel could cause our clients to change capital allocation decisions and may even cause them to delay or ies could have an adverse effeff ct on our financial cancel projects. A significant or protracted price fluctuation or disrupt r r condition and results of operations. Additionally, potential climate change regulation, including a potential carbon the overall cost of fuel to us and have a material adverse effeff ct on us; see additional discussion of climate risks below. tax, could increase ion of fuel suppl u Climll atett change,e clima ll te change regue lations and greenhouse effeff ctstt maya materiallyll adverserr ly impacm t our operations and markets.tt Climate change and its association with greenhouse gas emissions is receiving increased attention from the scientificff and political communities. The U.S. federal government, certain U.S. states and certain other countries and regions have adopted or are considering legislation or regulation imposing overall capsa “WeWW could be adverserr change, which could subject us to increased operational coststt results” for a discussion of the Environmental Protection Agency’s (the “EPA”) newly issued final rule to reduce gas emissions. Additionally, the SEC is considering implementing new climate change disclosure rules and other federal or state agencies may do the same. These new reporting rules may be difficult to comply with, increase costs of operation and influence customer behavior and demand. or taxes on greenhouse gas emissions from certain sectors or facility categories. See ly affeff cted by environmental and safea ty requirementstt and regul ly impacm t our liquidity and operating that could materially and adverserr ations, including those regar ding climate e e Such new laws or regulations, or stricter enforff cement of existing laws and regulations, could increase the costs of operating our businesses, reduce the demand for our products and services and impact the prices we charge our customers, any or all of which could adversely affeff ct our results of operations. Failure to comply with any legislation or regulation could potentially result in subsu tantial fines, criminal sanctions or operational changes. Moreover, even without such legislation or regulation, the perspectives of our customers, stockholders, employees and other stakeholders regarding climate change are continuing to evolve, and increased awareness of,ff or any adverse publicity regarding, the effeff cts of greenhouse gases could harm our reputation or reduce customer demand for our products and services. ed, which Additionally, as severe weather events become increasingly common, our or our customers’ operations may be disrupt could result in increased operational costs or reduced demand for our products and services and extended periods of disrupt ions could have an adverse effeff ct on our results of operations. In addition, climate change may also reduce the availabia lity or increase the cost of insurance for weather-related events as well as may impact the global economy, including as a result of disrupt y chains. We anticipate that climate change-related risks will increase over time. ions to supplu r r rr g Strategie c Riskii skk We maya not be able to faciliii taii ii limit candiddd atdd estt and maya involve signi ,s which couldll te our growth stratt our revenues and profitaff by idendd transactiott ns withii ii y.tt Future acquisitions maya result in signi bilit ing or completingii tegye tifyi attrtt active acquisition ificff ant transactiott n expexx nses ificff ant costs.tt We maya expexx rience integre atiott n and consolidll atdd iott n riskii skk associatedtt withii future acquisitions. An element of our growth strategy is to selectively pursue, on an opportunistic basis, acquisitions of additional businesses or assets of businesses, in particular rental companies that complement our existing business and footprt our growth strategy depends, in part, on selecting strategic acquisition candidates at attractive prices and effeff ctively integrating their businesses into our own, including with respect to financial reporting and regulatoryrr matters. We cannot assure you that we will be able to identifyff attractive acquisition candidates or complete the acquisition of any identifieff d candidates at favorable prices and upon advantageous terms and conditions, including financing alternatives. We expect to face competition for acquisition candidates, which may limit the number of acquisition opportunities and lead to higher acquisition costs. We may not have the financial resources int. The success of this element of 15 necessary to consummate any acquisitions or the ability to obtain the necessaryrr terms. Any future acquisitions may result in significant transaction expenses and risks associated with entering new markets. We may also be subju ect to claims by third parties related to the operations of these businesses prior to our acquisition and by sellers under the terms of our acquisition agreements. We also regularly review other potential strategic transactions, including dispositions, which are also subju ect to claims by third parties and by the buyers under the terms of our disposition agreements. funds on satisfact oryrr ff We may not have sufficient management, financial and other resources to integrate or disintegrate any future acquisitions or dispositions. Any significant diversion of management’s and other personnel’s attention, time and resources or any majoa r difficulties encountered in the evaluation, negotiation and integration of the businesses we acquire or sell could have a material adverse effeff ct on our business, financial condition or results of operations, which could decrease our profitff ability and make it more difficult for us to grow our business. Among other things, these risks could include: • • • • • • • • • • • • • • • the loss of key employees; the disrupt r ion of operations and business; the retention of the existing clients and the retention or transition of customers and vendors; systems integration, as well as, the integration of corporate culturt es and maintenance of employee morale; inability to maintain and increase competitive presence; customer loss and revenue loss; possible inconsistencies in standards, control procedurd es and policies; unexpected problems with costs, operations, personnel, technology and credit; problems with the assimilation of new operations, sites or personnel, which could divert resources from our regular operations; unrecorded liabilities of acquired companies and unidentifieff d issues that we fail to discover during our due diligence investigations or that are not subju ect to indemnificff ation or reimbursement by the seller; inherent risk associated with entering a geographic area or line of business in which we have no or limited experience; impairment of goodwill or other acquisition-related intangible assets; failure to achieve anticipated synergies or receiving an inadequate return of capia tal; integration of financial reporting and regulatoryrr Oxley Act of 2002, as amended (“SOX”); and/or reporting functions, including with the SEC and pursuant to the Sarbanes- potential unknown liabia lities. Furthermore, general economic conditions, economic or geopolitical uncertainty, or unfavorable global capital and credit markets could affeff ct the timing and extent to which we successfulff which could limit our revenues and profitaff bia lity. ly acquire and integrate new businesses or dispose of existing businesses, Our failure to address these risks or other problems encountered in connection with any past or future acquisition could cause us to fail to realize the anticipated benefits of the acquisitions, cause us to incur unanticipated liabia lities and harm our business generally. In addition, if we are unabla e to successfulff ly integrate our acquisitions with our existing business, we may not obtain the advantages that the acquisitions were intended to create, which may materially and adversely affeff ct our business, results of operations, financial condition, cash flows, our ability to introduce new services and products and the market price of our stock. We would expect to pay for any future acquisitions using cash or availabla e borrowings, but to the extent that our existing sources of cash or borrowings are not sufficient, we would expect to need additional debt or equity financing, which involves its own risks, such as the dilutive effeff ct on shares held by our stockholders if we financed acquisitions by issuing convertible debt or equity securities, or the risks associated with debt incurrence, such as increase debt service obligations and covenant compliance requirements. We have also spent resources and effoff rts, apart from acquisitions, in attempting to grow and enhance our rental business over the past few years. These effoff continued investment in facilities, personnel and financial and management systems and controls. We may not be successfulff implementing all of the processes that are necessary to suppor increasing disproportionately to our incremental revenues, causing our operating margins and profitaff rts place strains on our management and other personnel time and resources, and require timely and in t any of our growth initiatives, which could result in our expenses bia lity to be adversely affeff cted. u 16 We maya not be able to faciliii taii revenues and profitaff ii y.tt bilit te our growth stratt tegye by idendd tifyi ing and openingii attrtt active startt t-up locations,s which couldll limit our An element of our growth strategy is to selectively identify,ff source and implement start-up locations in order to add new customers. The success of this element of our growth strategy depends, in part, on identifying strategic start-up locations. We also cannot assure you that we will be able to identifyff attractive start-up locations. Opening start-up locations may involve significant costs and limit our ability to expand our operations. Start-up locations may involve risks associated with entering new markets and we may face significant competition. We may not have sufficient labor a , real estate, management, financial and other resources to successfulff ly open and operate new locations. Any significant diversion of management’s attention or any majoa r difficulties encountered in the locations that we open in the future could have a material adverse effeff ct on our business, financial condition or results of operations, which could decrease our profitaff bia lity and make it more difficult for us to grow our business. Furthermore, general economic conditions or unfavff orable global capital and credit markets could affeff ct the timing and extent to which we open new start-up locations, which could limit our revenues and profitff ability. p Liquidity and Capia tal Resource Riskii skk q y Unfan vorablell conditidd ons or disruii of creditdd .tt availaii bilityii ptu iott ns in the capia taii l and creditdd marketstt maya adverserr ly impact busineii ss conditidd ons and the r Disrupt ions in the global capital and credit markets as a result of an economic downturt n, economic or geopolitical uncertainty as ts, including those in Ukraine, the Middle East and China, changing or increased result of escalating and potential global conflicff regulation, reduced alternatives or failures of significant financial institutions could adversely affeff ct our customers’ ability to access capital and could adversely affeff ct our access to liquidity needed for business in the future. Additionally, unfavff orable market conditions may depress demand for our products and services or make it difficult for our customers to obtain financing and credit on reasonabla e terms. Unfavorabla e market conditions also may cause more of our customers to be unabla e to meet their payment obligations to us, increasing delinquencies and credit losses. If we are unabla e to manage credit risk adequately, or if a large number of customers should have financial difficulties at the same time, our credit losses could increase above historical levels and our operating results would be adversely affeff cted. Delinquencies and credit losses generally can be expected to increase during economic slowdowns or recessions. Moreover, our suppl disrupt r and cash flows. ion or delay of product availabia lity. These events could negatively impact our business, financial position, results of operations iers may be adversely impacted by unfavff orable capia tal and credit markets, causing u Our substantiatt l indebtedtt nedd ss couldll adverserr ly affeff ct our finaii ncial conditiodd n. We have a significant amount of indebtedness outstanding. As of December 31, 2023, we had total outstanding indebtedness of approximately $1.4 billion, consisting of the amount outstanding under our senior unsecured notes, our senior secured credit facility (“Credit Facility”) and our finance lease liabia lities. Our subsu tantial indebtedness could have important consequences. For example, it could: • • • • • increase our vulnerabia lity to general adverse economic, industryrr and competitive conditions; require us to dedicate a subsu tantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availabia lity of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purpos es; r limit our flexibility in planning for, or reacting to, changes in our business and the industryrr in which we operate; place us at a competitive disadvantage compared to our competitors that have less debt; and limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate r purpos es. We expect to use cash flow from operations and borrowings under our Credit Facility to meet our current and future financial obligations, including funding our operations, debt service and capital expenditures. Our ability to make these payments depends on our future performance, which will be affeff cted by financial, business, economic and other factors, many of which we cannot control. Our business may not generate sufficient cash flow from operations in the future, which could result in our being unabla e to repay indebtedness, or to fund other liquidity needs. If we do not have enough capital, we may be forced to reduce or delay our business activities and capia tal expenditures, sell assets, obtain additional debt or equity capia tal or restructurt e or refinance all or a portion of our debt, including the senior unsecured notes and our Credit Facility, on or before maturity. We cannot make any assurances that we will 17 be able to accomplish any of these alternatives on terms acceptabla e to us, or at all. In addition, the terms of existing or future indebtedness, including the agreements governing the senior unsecured notes and the Credit Facility, may limit our ability to pursue any of these alternatives. As of Februar us with borrowing availabia lity of $460.3 million, as a result of $12.3 million of letters of credit outstanding under the facility. ry 15, 2024, we had borrowings of $277.3 million outstanding under our Credit Facility leaving We maya not be able to generate suffu icff our indebtedtt nedd our obligll atiott ns underdd ient cash to service allll of our indebtedtt nedd .ll ss, which maya not be successfulff ss and maya be forced to take othett r actions to satisfii yff Our ability to make scheduled payments or to refinance our debt obligations depends on our financial and operating performance, which is subju ect to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. We cannot make assurances that we will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness. In the absence of such operating results and resources, we could face subsu tantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. The Credit Facility and the indenturt e governing the senior unsecured notes restrict our ability to dispose of assets and use the proceeds from the disposition. We may not be able to consummate those dispositions or to obtain the proceeds which we could realize from such dispositions. Any proceeds we do receive from a disposition may not be adequate to meet any debt service obligations then due. If our cash flows and capia tal resources are insufficff ient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets or operations, seek additional capital or restructurt e or refinance our indebtedness. We cannot assure you that we would be able to take any of these actions, that these actions would be successfulff debt service obligations or that these actions would be permitted under the terms of our existing or future debt agreements, including the Credit Facility or the indenturt e governing the senior unsecured notes. and permit us to meet our scheduled If we cannot make scheduled payments on our debt, we will be in default and, as a result: • • • our debt holders could declare all outstanding principal and interest to be due and payabla e; the lenders under our credit facilities, including the Credit Facility, could terminate their commitments to lend us money and foreclose against the assets securing our outstanding borrowings under their facility; and we could be forced into bankrupt r cy or liquidation. Despite current indebtedtt nedd described above. ss levels,ll we maya stiltt lll be ablell to incur more indebtedtt nedd ss, which couldll furthett r exacerbatett skk the riskii Under the terms of the agreements governing the Credit Facility and the senior unsecured notes, we and our subsu idiaries may be able to incur subsu tantial indebtedness in the future. Additionally, our Credit Facility provides revolving commitments of up to $750.0 million in the aggregate. As of Februarr ry 15, 2024, we had $460.3 million of availabia lity under the Credit Facility, as a result of $12.3 million of letters of credit outstanding under the facility. If new debt is added to our current debt levels, the risks that we now face relating to our subsu tantial indebtedness could intensify.ff The agreements governirr ngii certain corporatett and finaii ncial transactiott ns. the Creditdd Faciliii tyii and our senior unsecured notes restritt ct our busineii ss and our abiliii tyii to engage in The agreements governing the Credit Facility and the senior unsecured notes contain certain covenants that, among other things, restrict or limit our and our restricted subsu idiaries’ ability to: • • • • • • • • incur more debt; pay dividends and make distributions; issue preferff red stock of subsu idiaries; make investments; repurchase stock; create liens; enter into transactions with affiff liates; enter into sale and lease-back transactions; 18 • • • execute dispositions; merge or consolidate; and transferff and sell assets. Our ability to borrow under the Credit Facility depends upon compliance with the restrictions contained in the Credit Facility. Events beyond our control could affeff ct our ability to meet these covenants. In addition, the Credit Facility requires us to meet certain financial conditions tests and availabia lity thereunder is subju ect to borrowing base availabia lity. Events beyond our control can affeff ct our ability to meet these financial conditions tests and to comply with other provisions governing the Credit Facility and the senior unsecured notes. Our failure to comply with obligations under the agreements governing the Credit Facility and the senior unsecured notes may result in an event of default under the agreements governing the Credit Facility and the senior unsecured notes, respectively. A default, if not cured or waived, may permit acceleration of this indebtedness and our other indebtedness. We may not be able to remedy these defaults. If our indebtedness is accelerated, we may not have sufficff ient funds availabla e to pay the accelerated indebtedness and may not have the ability to refinance the accelerated indebtedness on terms favorabla e to us or at all. Variablell rate indebtedtt nedd ss subjectstt us to interest rate riskii ,k which couldll cause our debt service obligll atiott ns to increase signi ificff antly.yy Borrowings under the Credit Facility are at variable rates of interest, based on the U.S. prime rate and the Secured Overnight Financing Rate (“SOFR”), and expose us to interest rate risk. As such, our financial results are sensitive to movements in interest rates. There are many economic factors outside our control that have in the past impacted, and may in the future impact, rates of interest, including publicly announced indices that underlie our interest obligations related to borrowings under the Credit Facility based on SOFR. SOFR is a broad measure of the cost of borrowing cash overnight collateralized by Treasuryrr securities. u Factors that also impact interest rates include, among others, governmental monetary policies, inflation, recession, changes in y, international disorder and instability in domestic and foreign financial markets. If interest rates unemployment, the money suppl increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our results of operations would be adversely impacted. Such increases in interest rates could have a material adverse effeff ct on our financial conditions and results of operations. Notabla y, afteff r years of a low interest rate environment, central banks across the globe significantly increased interest rates to stem inflation and as a result, global inflation began to stabilize. However, there is no certainty as to whether interest rates will stabilize, continue to increase or decrease. Our busineii profitaff biliii tyii affeff ct our liquii ss couldll be hurt if we are unablell .yy In additioii n, our inabilityii to obtaitt nii additioii nal capia taii to refie naii nce our indebtedtt nedd l as required,dd resulting in a decrease in our revenues and ly terms, or at all,ll couldll materiallyll and adverserr ss on favorablell iditydd and our ongoingii resultstt of operations. The cash that we generate from our business, together with cash that we may borrow under our Credit Facility, if availabla e, may not be sufficient to fund our capia tal requirements. We may require additional financing to obtain capia tal for, among other purpos purchasing equipment, completing acquisitions, establa ishing new locations and refinancing existing indebtedness. Any additional indebtedness that we incur will make us more vulnerabla e to economic downturt ns and limit our ability to withstand competitive pressures. Moreover, we may not be able to obtain additional capital on acceptabla e terms, if at all. If we are unabla e to obtain sufficff additional financing in the future, our business could be adversely affeff cted by reducing our ability to increase revenues and profitaff bia lity. rr es, ient In addition, our ability to refinance indebtedness will depend in part on our operating and financial performance, which, in turn, is subju ect to prevailing economic conditions and to financial, business, legislative, regulatoryrr and other factors beyond our control. In addition, prevailing interest rates or other factors at the time of refinancing could increase our interest expense. A refinancing of our indebtedness could also require us to comply with more onerous covenants and further restrict our business operations. Our inability to refinance our indebtedness or to do so upon attractive terms could materially and adversely affeff ct our business, prospects, results of operations, financial condition and cash flows, and make us vulnerabla e to adverse industryrr and general economic conditions. If we are unabla e to refinance our indebtedness or obtain additional capital sufficient to fund our capia tal requirements, we may be forced, among other things, to do one or more of the following: (i) sell certain of our assets, which could affeff ct revenue generation and profitaff bia lity; (ii) reduce the size of our rental fleet, which could have a similar impact; (iii) reduce or delay capital expenditures; (iv) reduce or eliminate our dividend; (v) issue additional equity, which could have a dilutive effeff ct on current shareholders; or (vi) forgo business opportunities, including acquisitions and joint venturt es. 19 The contintt ued payment of our quarterlyll dividend is subject to, among othett our board of direii ctortt s.rr r things,s the availaii bilityii of fuff ndsdd and the discii retion of The payment of future dividends and the amount thereof is uncertain, at the sole discretion of our board of directors and considered by the board of directors each quarter. The payment of dividends is dependent upon, among other things, operating cash flow generated by our business, financial requirements for our operations, the execution of our growth strategy, the restrictions and covenants pursuant to our Credit Facility and senior unsecured notes, and the satisfaction of solvency tests imposed by the Delaware General Corporation Law and other applicable law for the declaration and payment of dividends. Governmental Regul g e skk ation Riskii We have operations throughogg ut the Unitedtt applicll ablell e r negat othett law, regue ivtt e impacts on our busineii ss. lations or requirements,s or our material failure to comply withii Stattt estt ,s which expos xx es us to multiptt le federal, stattt ett and local regue lations. Changes in anyn of them, can increase our coststt and have Our 137 branch locations, as of December 31, 2023, in the United States are located in 30 different states, which exposes us to a host of different federal, state and local regulations. These laws and requirements address multiple aspects of our operations, such as worker safety, consumer rights, privacy, employee benefits, gas emissions and more, and can ofteff n have different requirements in different jurisdictions. Changes in these requirements, or any material failure by our branches to comply with them, could increase our costs, affeff ct our reputation, limit our business, drain management’s time and attention or otherwise, generally impact our operations in adverse ways. We couldll be adverserr change,e which couldll subject us to increased operational coststt operating results. ly affeff ctedtt by enviroi nmental and safea ty requirements and regue that couldll materiallyll and adverserr lations, includindd g those regae rdindd g clima ly impact our liquidityii and ll te Our operations, like those of other companies engaged in similar businesses, require the handling, use, storage and disposal of certain regulated materials. As a result, we are subju ect to the requirements of federal, state and local environmental protection and occupau tional health and safety laws and regulations. These laws regulate issues such as wastewater, stormwater, solid and hazardous waste and materials, and air quality. While our operations generally do not raise significant environmental risks, we use petroleum products, solvents and other hazardous subsu tances for fueling and maintaining our equipment and vehicles. Environmental laws also impose obligations and liability for the cleanup of properties affeff cted by hazardous subsu tance spills or releases. These liabia lities can be imposed on the parties generating or disposing of such subsu tances or the operator of the affeff cted property, ofteff n without regard to whether the owner or operator knew of,ff or was responsible for, the presence of hazardous subsu tances. Accordingly, we may become liabla e, either contractuat operated by us, or if the contamination was caused by third parties during or prior to our ownership or operation of the property. As such, there can be no assurance that prior site assessments or investigations have identifieff d all potential instances of soil or groundwater contamination. Future events, such as changes in existing laws or policies or their enforcement, or the discovery of currently unknown contamination, may give rise to additional remediation liabia lities, which may be material. lly or by operation of law, for remediation costs even if a contaminated property is not currently owned or We are subju ect to potentially significant civil or criminal fines or penalties if we fail to comply with any of these requirements. We have made and will continue to make capital and other expenditures in order to comply with these laws and regulations. These include climate change regulation, which could materially affeff ct our operating results through increased compliance costs. The requirements of these laws and regulations are complex, change frequently, and could become more stringent in the future. It is possible that these requirements will change or that liabia lities will arise in the future in a manner that could have a material adverse effeff ct on our business, financial condition and results of operations. In addition, the U.S. Congress and other state and federal legislative and regulatoryrr authorities in the United States have considered, and likely will continue to consider, numerous measures related to climate change, greenhouse gas emissions and other laws and regulations affeff cting some of our end markets, such as oil, gas and other natural resource extraction. Should such laws and regulations become effeff ctive, demand for our services could be affeff cted, our fleet or other costs could increase and our business could be materially adversely affeff cted. For example, the Environmental Protection Agency (the “EPA”) recently issued a final rule that will sharplrr y reduce emissions of methane and other harmful air pollution from oil and natural gas operations, including from existing sources nationwide. The final rule includes New Source Performance Standards, to reduce methane and smog-forming volatile organic compounds from new, modified and reconstrucr they develop plans to limit methane from existing sources, including oil and natural gas operations. While we cannot be certain of this rule’s impact as we wait for states to submu it their plans to the EPA for approval, we anticipate that this could adversely impact the operations of our customers, specifically those in the oil and gas industry,rr which could reduce demand for our services and have an adverse impact on our business. ted sources, and Emissions Guidelines, which set procedurd es for states to follow as 20 Further, investors are placing a greater emphasis on non-financial factors, including climate risk and other ESG issues, when evaluating investment opportunities. If we are unabla e to provide sufficient disclosure about ESG practices or if we fail to achieve ESG goals, investors may not view us as an attractive investment, which could have a negative effeff ct on our stock price and business. Additionally, customers are becoming increasingly focused on ESG and climate related matters and have started considering and incorporating these factors when choosing suppl meet those additional requirements, we could be adversely impacted. iers, along with existing factors such as price and affoff rdability. If we are unabla e to u Our busineii adverserr ss maya be materiallyll affeff ctedtt ly affeff ct our resultstt of operations. by changes to fiscii al and taxaa policll ies. Negat e ivtt e or unexpexx ctedtt taxaa consequences couldll Adverse changes in the underlying profitff ability and financial outlook of our operations or future changes in tax law could lead to changes in the value of tax assets or liabia lities that we currently or in the future may hold, which could materially affeff ct our results of operations. Our busineii developmll ent. ss maya be materiallyll affeff ctedtt by changes to othett r policll ies governingii our products,tt technologyo and technologio cal As we grow through acquisitions and advance our technology platforms, we could be required to comply with additional regulations which, if we fail to comply with, could affeff ct the technological developments, in particular, and our company, as a whole. For instance, it is expected that laws and regulations around the use of AI and machine learning tools will increase over the next few years but it is unknown at this time what these laws and regulations will address and how and whether they will be adopted globally. If we introduce AI or machine learning into our information technology systems (as well as those of our customers through our technology platform), we could become subju ect to these new regulations, which may be difficult to comply with. Some of our competitors may not be required to comply, which would put us at a competitive disadvantage. In addition, we may find we do not have the right employee expertise for the advancement of AI and machine learning initiatives or that we that we haven’t provided the appropriate training to our team. Further, if we fail to adopt these new technologies we may face price pressure from competitors using lower-cost AI systems. skk General Business Riskii Fluctuatiott ns in the stoctt k market,tt as well as general economic and market conditiodd stoctt k. ns,s maya impacm t the market price of our common The market price of our common stock has been and may continue to be subju ect to significant fluctuations in response to general economic changes and other factors including, but not limited to: • • • • • • • variations in our quarterly operating results or results that vary from investor expectations; changes in the strategy and actions taken by our competitors, including pricing changes; securities analysts’ elections to discontinue coverage of our common stock, changes in financial estimates by analysts or a downgrade of our common stock or of our sector by analysts; announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint venturt es or capital commitments; changes in the price of oil and other commodities; investor perceptions of us and the equipment rental and distribution industry;rr and national or regional catastrophes or circumstances and natural disasters, hostilities and acts of terrorism. Broad market and industryrr factors may materially reduce the market price of our common stock, regardless of or in a manner that is disproportionate to any related impact on our operating performance. The stock market historically has experienced price and volume fluctuations that ofteff n have been unrelated or disproportionate to the operating performance of companies. These fluctuations, as well as general economic and market conditions, including those listed above and others, may harm the market price of our common stock. 21 l our operations,s compromise our or our customtt ers’rr and supplpp iell rs’ confidff endd r disrii uptions in our infon rmatiott n technologyo systemtt s couldll Securityii breaches and othett contrott our operating resultstt or busineii ss repuee tation. limit our capac tial infon rmatiott n or othett to effeff ctivtt elyll monitoii rwise adverserr itytt a ly affeff ct r and Our information technology systems, some of which are managed by third parties, facilitate our ability to monitor and control our ting a variety of operations and adjud st to changing market conditions, including processing, transmitting, storing, managing and suppor business processes, activities and information. Further, we are expanding and improving our information technologies, resulting in a larger technological presence and corresponding exposure to cybersecurity risk. Any disrupt customer relationship management system, or the failure of any of these systems to operate as expected, could, depending on the magnitude of the problem, adversely affeff ct our operating results by limiting our capacity to effeff ctively monitor and control our operations and adjud st to changing market conditions. ion in any of these systems, including our u rr Additionally, we collect and store sensitive data, including proprietary business information and the proprietary business u iers, in data centers and on information technology networks, including cloud-based networks. information of our customers and suppl The secure operation of these information technology networks and the processing and maintenance of this information is critical to our business operations and strategy. However, the techniques and sophistication used to conduct cyberattacks and compromise information technology systems, as well as the sources and targets of these attacks, change and are ofteff n not recognized until such attacks are launched or have been in place for some time. In addition, there has been an increase in state sponsored cyberattacks which are ofteff n conducted by capaa bla e, well-funded groups. The rapia d evolution and increased adoption of artificff ial intelligence technologies amplifieff s these concerns. rr r Despite security measures and business continuity plans, our information technology networks and infrastructurt e may be ions or shutdowns due to attacks by cyber criminals or breaches due to employee error or malfeaff ions during the process of upgrading or replacing computer software or hardware, power outages, computer viruses, vulnerabla e to damage, disrupt other disrupt telecommunication or utility failures, terrorist acts or natural disasters or other catastrophic events. Further, the growing use and rapia d evolution of technology, including mobile devices, has heightened the risk of unintentional data breaches or leaks. The occurrence of any of these events could compromise our networks, and the information stored there could be accessed, publicly disclosed, lost or stolen. In addition, as security threats continue to evolve, we may need to invest additional resources to protect the security of our systems or to comply with privacy, data security, cybersecurity and data protection laws applicable to our business. sance or Any failure to effeff ctively prevent, detect and/or recover from any such access, disclosure or other loss of information, or to comply with any such current or future law related thereto, could result in legal claims or proceedings, liabia lity or regulatoryrr penalties under laws protecting the privacy of personal information, disrupt operations, and damage our reputation, which could adversely affeff ct our business. r We are depeee ndendd result in a declinll e in our revenues and profitaff .yy biliii tyii t on keye personnel. A loss of keye personnel couldll have a material adverserr effeff ct on our busineii ss, which couldll Our senior and regional managers have an average of approximately 26 years of industryrr experience. Our branch managers have extensive knowledge and industryrr experience as well. Our success is dependent, in part, on the experience and skills of our management team. Competition for top management talent within our industryrr keep filled all of our senior management positions, or if we lose the services of any key member of our senior management team and are unabla e to find a suitable replacement in a timely manner, we may be challenged to effeff ctively manage our business and execute our strategy. is generally significant. If we are unabla e to fill and If we fail to maintain an effeff ctivtt e systemtt fraud. of internal contrott ls,s we maya not be ablell to accurately repor ee t finaii ncial results or prevent Effeff ctive internal controls are necessaryrr to provide reliable financial reports and to assist in the effeff ctive prevention of fraud. Any inability to provide reliabla e financial reports or prevent fraud could harm our business. We must annually evaluate our internal procedurd es to satisfyff our internal controls. If we fail to remedy or maintain the adequacy of our internal controls, as such standards are modified, suppl u litigation. emented or amended from time to time, we could be subju ect to regulatoryrr scrutiny, civil or criminal penalties or stockholder the requirements of Section 404 of SOX, which requires management and auditors to assess the effeff ctiveness of In addition, failure to maintain effeff ctive internal controls could result in financial statements that do not accurately reflect our financial condition or results of operations. There can be no assurance that we will be able to maintain a system of internal controls that fully complies with the requirements of SOX or that our management and independent registered public accounting firm will continue to conclude that our internal controls are effeff ctive. 22 xx ed to various riskii We are expos ss expos of our busineii xx .dd edtt being fully protect skk related to legae es us to various liabiliii tyii tt l proceedindd gs or claill msii claill msii ,s which maya exceed the level of our insurance coverage resultitt ngii in us not that couldll adverserr ly affeff ct our operating results.tt The nature We are a party to lawsuits in the normal course of our business. Litigation in general can be expensive, lengthy and disrupt normal business operations. Moreover, the results of complex legal proceedings are difficult to predict. Responding to lawsuits brought against us, or legal actions that we may initiate, can ofteff n be expensive and time-consuming. Unfavorable outcomes from these claims and/or lawsuits could adversely affeff ct our business, results of operations, or financial condition, and we could incur subsu tantial monetary liability and/or be required to change our business practices. r ive to Our business exposes us to claims for personal injun ry, death or property damage resulting from the use of the equipment we rent or sell and from injun ries caused in motor vehicle accidents in which our deliveryrr and service personnel are involved and other employee related matters. Additionally, we could be subju ect to potential litigation associated with compliance with various laws and governmental regulations at the federal, state or local levels, such as those relating to the protection of persons with disabia lities, employment, health, safety, security and other regulations under which we operate. We carry comprehensive insurance, subju ect to deductibles, at levels we believe are sufficient to cover existing and future claims made during the respective policy periods. However, we may be exposed to multiple claims, and, as a result, we could incur significant out-of-pocket costs before reaching the deductible amount which could adversely affeff ct our financial condition and results of operations. In addition, the cost of such insurance policies may increase significantly upon renewal of those policies as a result of general rate increases for the type of insurance we carry as well as our historical experience and experience in our industry.rr Although we have not experienced any material losses that were not covered by insurance, our existing or future claims may exceed the coverage level of our insurance, and such insurance may not continue to be availabla e on economically reasonabla e terms, or at all. If we are required to pay significantly higher premiums for insurance, are not able to maintain insurance coverage at affoff rdable rates or if we must pay amounts in excess of claims covered by our insurance, we could experience higher costs that could adversely affeff ct our financial condition and results of operations. Item 1B. Unresolved Staffff Comments None. Item 1C. Cybersecurity We rely on our technology network infrastructurt e and information systems to operate our business, rent our equipment, interact ort and grow our customer base and bill, collect and make payments, among other functions. Our with vendors and customers, suppu internally developed infrastructurt e and systems, as well as those systems and processes provided by third-party vendors, may be susceptible to damage or interruptu ion from cybersecurity threats, which include any unauthorized access to our information systems that may result in adverse effeff cts on the confidff entiality, integrity, or availabia lity of such systems or the related information. Such attacks have become more sophisticated over time, especially as threat actors have become increasingly well-funded by, or themselves include, governmental actors with significant means. We expect that sophistication of cyber-threats will continue to evolve as threat actors increase their use of AI and machine-learning technologies. The Company has robust processes for assessing, identifyiff ng and managing material risks from cybersecurity threats that are integrated into our overall risk management process. The Company utilizes the National Institutt e of Standards and Technology (NIST) framework as the basis for our cybersecurity management approach. Under the supeu rvision of the Chief Information Offiff cer (“CIO”), we review our cybersecurity insurance policy and regularly identify all computing assets including hardware, software, and network infrastructurt e for a comprehensive risk assessment. We consider threats that may originate from both internal and external sources and build in technical security controls based on a defense-in-depth strategy. To identifyff assessments on a recurring basis to proactively identifyff potential weaknesses. We additionally employ third party external and internal penetration testing on an annual basis to assist in identifyiff ng additional vulnerabia lities in our environment. We also perform disaster recovery exercises throughout the organization annually by our in-house team. In connection with our threat management and overall risk management process, we receive recurring threat intelligence from our partners that help us recognize the updated tactics, techniques, and procedurd es being utilized by threat actors and apply the MITRE ATT&CK framework to review defensive coverage against cybersecurity attacks. Employees at H&E receive mandatory recurring cybersecurity training and phishing exercises to reduce the likelihood of success by threat actors. Our managed detection and response partner provides 24/7 monitoring and detection of our cybersecurity environment, which allows us to timely respond to cybersecurity events with the goal of reducing its potential impact. The Company performs an IT security assessment of critical third-party vendors prior to establa ishing a formal relationship and has additional processes in place to continue to oversee and identifyff a formal relationship is establa ished. We additionally have a comprehensive incident response plan that outlines the appropriate procedurd es, communication flow and response for potential cybersecurity incidents as well as categorizations of scope, incident and impact of such incidents. risks associated with the use of our third-party service providers once risks, we complete vulnerabia lity 23 The Company’s information security and cybersecurity program is managed by our CIO whose team includes a VP of Infrastructurt e and Director of IT Security (collectively, “the IT Security Team”), whom all have the necessary expertise, certificff ations and experience to lead our enterprise-wide cybersecurity strategy, policy, architecturt e and processes. The CIO has over 25 years of experience and has been a member and leader of our Company’s information systems and technological advancements for the past 21 years. The Director of IT Security, reporting to our VP of Infrastrucr ture, is responsible for our overall network security and assessing and managing cybersecurity risks and threats. The Director of IT Security has over 15 years of experience working in IT security and holds CISSP and GIAC certificff ations. The VP of Infrastructurt e reports to our CIO, and has principal responsibility for our network infrastructurt e and the operation of our cybersecurity program, network and system administration. The VP of Infrastructurt e has over 29 years of experience in system administration and has specialized in ERP systems and network infrastructurt e. Collectively, the IT Security Team prepares updates and presentations for the Board of Directors, Audit Committee and executive management. The IT Security team reports the detection, mitigation and remediation of cybersecurity incidents to executive management and the Audit Committee of the Board of Directors. If we were to experience a cybersecurity incident, our Director of IT Security will inform the rest of the IT Security Team, which will then evaluate and assess the materiality of the incident to the Company, its information technology infrastructurt e and data integrity, and in accordance with our incident response plan, notifyff executive management and the necessary finance, operations and legal team functions. The CIO would determine whether the cybersecurity incident should be reported to the Audit Committee of the Board in advance of the next scheduled cybersecurity update. Once a cybersecurity incident is reported to the Audit Committee of the Board and potentially the overall Board of Directors, the Audit Committee, with the input of the IT Security Team and executive management, will determine how to address it and whether or not the incident would require external reporting. The Company’s Board of Directors, specificff ally the Audit Committee, is responsible for oversight and governance related to our cybersecurity processes and risk management. The CIO reports the results of the annual comprehensive risk assessment, including the evaluation of cybersecurity risks, the actions we have taken to mitigate these risks and an analysis of cybersecurity threats and incidents across the industryrr Committee on a semi-annual basis, or more frequently should a cybersecurity risk or event emerge requiring additional communication. The Audit Committee will report on the cybersecurity risk updates it receives from the CIO to the Board of Directors or as needed have the CIO report subsu equently to the full Board of Directors. to the Board of Directors on an annual basis and reports cybersecurity risk updates to the Audit Item 2. Properties As of December 31, 2023, we had a network of 137 branch facilities in 30 states in the Pacific Northwest, West Coast, Intermountain, Southwest, Gulf Coast, Southeast, Midwest and Mid-Atlantic regions of the United States. In our facilities, we rent, ies, and provide maintenance and basic repair work. Of the 137 total facilities, we display and sell equipment, including tools and suppl lease 125 and own 12 of our locations. No one location is material to our business as a whole. Our leases typically provide for varying terms and renewal options. The following tabla e provides data on our locations: u State Alabama Arizona Arkansas Califorff nia Colorado Delaware Florida Georgia Idaho Illinois Indiana Kansas Kentuct ky Louisiana Maryland Branch Count 6 3 2 15 6 1 13 6 2 3 3 1 1 9 2 State Mississippi Missouri Montana Nevada New Mexico North Carolina Oklahoma Oregon Pennsylvania South Carolina Tennessee Texas Utah Virginia Washington Branch Count 1 2 2 2 1 10 2 1 1 3 6 25 3 3 2 Each facility location has a branch manager who is responsible for day-to-day operations. In addition, branch operating facilities are typically staffeff d with approximately 10 to over 50 people, who may include technicians, salespeople, rental operations staffff and parts specialists. While facility offiff ces are typically open five days a week, we provide 24 hour, seven day per week service. Our corporate headquarters employs approximately 381 people. Our corporate headquarters facility is on 3.1 acres of company- owned land where we occupyu a total of approximately 42,550 square feet. 24 Item 3. Legal Proceedings For information on Company legal proceedings, see Note 13 to our Consolidated Financial Statements included in Part II, Item 8, of this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures Not applicable. PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock, par value $0.01 per share, trades on the Nasdaq Global Market (“Nasdaq”) under the symbol “HEES.” Holders As of December 31, 2023, there were 53 stockholders of record of our common stock. This does not include beneficial owners of our common stock whose stock is held in nominee or “street name”. Dividends During the years ended December 31, 2023 and 2022, we paid quarterly cash dividends totaling $1.10 per share in each year, or approximately $40.0 million and $39.9 million, respectively. We intend to continue to pay regular quarterly cash dividends; however, the declaration of any subsu equent dividends is discretionary and will be subju ect to a final determination by the Board of Directors each quarter afteff r its review of,ff among other things, business and market conditions. Securities Authorized for Issuance Under Equity Compensation Plans For certain information concerning securities authorized for issuance under our equity compensation plan, see Item 12 — Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, which notes that the information required by this Item is incorporated herein by reference from the Proxy Statement (as defined in Item 1 — Directors, Executive Offiff cers and Corporate Governance). Perforff mance Graph The Performance Graph below compares the cumulative five year total stockholder return on H&E Equipment Services, Inc.’s common stock beginning on December 31, 2018 and for each subsu equent quarter period end through and including December 31, 2023, with the cumulative returns of the Russell 2000 Index and an industryrr peer group selected by us. The Company updated its peer group during the year ended December 31, 2023 to increase the size of its peer group and align with the Company’s recent transition to a pure-play rental business. As such, the peer group we selected for the year ended December 31, 2023 is comprised of the following companies: United Rentals, Inc., Herc Holdings Inc., The Ashtead Group, PLC, GATX Corporation, McGrath RentCorp, WillScot Mobile Mini Holdings Corp., Astec Industries, Inc., Alta Equipment Group Inc., RB Global, Inc., DXP Enterprises, Inc., Arcosa, Inc., and Flowserve Corporation. Our historical peer group we selected for the years prior to the year ended December 31, 2023 is comprised of the following companies: United Rentals, Inc., Herc Holdings Inc., Toromont Industries, Ltd., Finning International, Inc., and The Ashtead Group, PLC. The Performance Graph comparison assumes $100 was invested in our common stock and in each of the other indices described above on December 31, 2018. Dividend reinvestment has been assumed and returns have been weighted to reflect relative stock market capitalization. The stock performance shown on the graph below is not necessarily indicative of future price performance. 25 H&E Equipment Services, Inc...................................... $ Russell 2000 Index........................................................ Peer Group 2023 ........................................................... Peer Group 2022 ........................................................... 100.00 100.00 100.00 100.00 $ 170.37 125.52 151.12 148.58 $ 159.75 150.58 196.57 205.05 $ 244.59 172.90 284.31 319.78 $ 258.13 137.56 256.90 275.92 $ 304.99 160.85 342.99 382.05 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 This stock performance information is “furff nished” and shall not be deemed to be “soliciting material” or subju ect to Rule 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), shall not be deemed “fileff d” for purpos Exchange Act or otherwise subju ect to the liabia lities of that section, and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or afteff r the date of this Annual Report on Form 10-K and irrespective of any general incorporation by reference language in any such filing, except to the extent that we specifically incorporate this information by reference. es of Section 18 of the rr Recent Sales of Unregistered Securities; Use of Proceeds From Registered Securities None. Issuer Purchases of Equity Securities None. Item 6. [Reserved] Not applicable. Item 7. 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 subsu idiaries as of December 31, 2023, and its results of operations for the year ended December 31, 2023, and should be read in conjunction with our consolidated financial statements and the accompanying notes thereto included elsewhere in this Annual Report on Form 10-K. The following discussion contains, in addition to historical information, forward-looking statements that include risks and uncertainties l results may (see discussion of “Forward-Looking Statements” included elsewhere in this Annual Report on Form 10-K). Our actuat 26 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 this Annual Report on Form 10-K. Backgrk ound Founded in 1961 through our predecessor companies, we have been in the equipment services business for approximately 62 years and are one of the largest rental equipment companies in the nation. H&E Equipment Services L.L.C. (“ H&E L.L.C.”) was formed in June 2002 through the business combination of Head & Engquist, a wholly-owned subsu idiary of Gulf Wide Industries, L.L.C., and ICM Equipment Company L.L.C. In connection with our initial public offeff ry 2006, we converted H&E L.L.C. into H&E Equipment Services, Inc., a Delaware corporation. ring in Februar H&E serves a diverse set of end markets in many high-growth geographies including branches throughout the Pacific Northwest, West Coast, Intermountain, Southwest, Gulf Coast, Southeast, Midwest and Mid-Atlantic regions. As of December 31, 2023, we operated 137 branch locations across 30 states throughout the United States. While focusing primarily on equipment rentals, we additionally engage in sales of rental equipment, sales of new equipment, parts tion rental fleet is among the industry’rr sales and repair and maintenance services. The Company’s construcrr equipment mix comprised of aerial work platforms, earthmoving, material handling, and other general and specialty lines. We are confidff ent our operating experience and extensive infrastructurt e developed throughout our historyrr as an integrated equipment services company qualifieff d us to successfulff ly transition to a pure-play rental company. This experience and infrastructurt e continues to provide us with a competitive advantage enabling us to broaden our industryrr expansion. Our workforce includes an outside and inside sales force for our rental operations and equipment sales, highly skilled service technicians, transportation drivers and regional and district managers. Our management, from the corporate level down to the branch store level, has extensive industryrr experience. We believe this allows us to provide specialized equipment knowledge, improve the effeff ctiveness of our sales force and strengthen our customer relationships. In addition, we operate our day-to-day business on a branch basis, which allows us to more closely service our customers, fosters management accountability at local levels and strengthens our local and regional relationships. s youngest with an Effeff ctive September 17, 2021, the Company sold its Little Rock, Arkansas and Springdale, Arkansas owned-branches. The sale included the land, building, furniture and fixturt es, and shop equipment for the two branches and we relinquished the majoa rity of our Arkansas territory distribution rights with equipment manufact urt ers Komatsu, Wirtgen Group and Takeuchi. ff Effeff ctive October 1, 2021, the Company sold its crane business to a wholly-owned subsu idiary of The Manitowoc Company, Inc. (“the Crane Sale”). The Crane Sale met the criteria for discontinued operations presentation and as such, the results of operations of the Crane Sale are reported in discontinued operations in the Consolidated Statements of Income for the years ended December 31, 2022 and 2021. The financial results and information below are presented on a continuing operations basis and exclude the Crane Sale, unless otherwise noted specifically as discontinued operations. Effeff ctive October 1, 2022, the Company completed the acquisition of One Source Equipment Rentals, Inc. (“OSR”), a privately- held equipment rentals company with 10 branch locations primarily in the Midwest. Effeff ctive December 15, 2022, the Company sold its Komatsu distributorship in Louisiana. The sale included a branch location in Kenner, LA, a branch in Shreveport, LA and accompanying new equipment inventory,rr parts and suppl u ies. Effeff ctive November 1, 2023, the Company completed the acquisition of Giffin Equipment (“Giffin”), a privately-held equipment rentals company with three branch locations in California. Busineii ss Segme ents We have five reportabla e segments because we derive our revenues from five business activities: (1) equipment rentals; (2) sales of rental equipment; (3) sales of new equipment; (4) parts sales; and (5) services revenue. Our primary segment is equipment rentals. In addition, we also have non-segmented other revenues and costs that relate to equipment suppor t activities. These segments are based upon how we allocate resources and assess performance. u • ent Rentals.ll Our rental operation is our principal focus and we primarily rent our core types of construcrr Equipmi industrial equipment (aerial work platforms, earthmoving equipment, material handling equipment and other general and specialty lines). We have a well-maintained rental fleet and a dedicated sales team. We actively manage the size, quality, age and composition of our rental fleet based on our analysis of key measures such as time utilization (a refleff ction of equipment usage based on customer demand and calculated as our fleet’s original equipment cost on-rent divided by our fleet’s total original equipment cost, averaged over the time period), rental rate trends and targets, rental equipment dollar utilization, and maintenance and repair costs, which we closely monitor. Given the use of these measures by management, we believe that investors’ understanding of our performance is enhanced by the disclosure of the measures as it allows tion and 27 investors to view performance from management’s perspective. Additionally, we maintain fleet quality through quality control inspections and our parts and services operations. Sales of Rental Equipmi equipment allow us to manage the size, quality, composition and age of our rental fleet, and provide us with a profitaff bla e distribution channel for the disposal of rental equipment. ent. Our used sales are generated primarily from sales from our rental fleet. Sales of our rental fleet Sales of New Equipmi impacted by the availabia lity of equipment from the manufacff supplu iers improves our ability to obtain equipment. ent. We sell equipment through a profesff sional sales force. While sales of new equipment are turer, we believe our relationship with some of our key Partstt Sales. Our parts business provides parts to our own rental fleet and sells parts for the equipment we sell. In order to provide timely parts and services suppor t to our rental fleet as well as our customers, we maintain a parts inventory.rr u Services. Our services operation provides maintenance and repair services to our own rental fleet and for our customers’ equipment at our facilities as well as at our customers’ locations. • • • • Our other revenues are non-segmented and relate to costs primarily related to ancillary charges associated with equipment maintenance and repair services, and are not generally allocated to reportabla e segments. For additional information about our business segments, see Note 16 to our Consolidated Financial Statements in this Annual Report on Form 10-K. Revenue Sources We generate all of our total revenues from our five business activities and our other equipment suppor u t activities. Equipment rentals accounts for the majoa rity of our total revenues. The pie charts below illustrate a breakdown of our revenues and gross profitff for the year ended December 31, 2023 by source: The equipment that we rent, sell and service is principally used in the construcr tion industry,rr as well as by companies for commercial and industrial uses such as plant maintenance and turnarounds, and in the petrochemical and energy sectors. As a result, our total revenues are affeff cted by several factors including, but not limited to, the demand for and availabia lity of rental equipment, rental rates and other competitive factors, the demand for used and new equipment, the level of construcr spending levels by our customers, adverse weather conditions, suppl ions and general economic conditions. tion and industrial activities, y chain disrupt u r ent Rentals.ll Our rental operation primarily represents revenues from renting owned equipment of our core types of tion and industrial equipment (aerial work platforms, earthmoving equipment, material handling equipment and other Equipmi construcr general and specialty lines). We primarily account for these 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. We have a well- maintained rental fleet and we actively manage the size, quality, age and composition of our rental fleet. Sales of Rental Equipmi ent. We generate the majoa rity of our used sales revenues by selling equipment from our rental fleet. Sales of New Equipmi ent. Our sales of new equipment operation sells equipment across all of our core categories of equipment. 28 Parts,tt Service and Othett r. We primarily generate revenues from the sale of parts for equipment that we rent or sell. We primarily derive our services revenues from maintenance and repair services for equipment that we rent or sell and from customers' owned equipment. Our other revenues relate primarily to ancillaryrr charges associated with equipment maintenance and repair services. ii Principal Coststt and Expexx nses Our largest expenses are rental expenses, rental depreciation, rental other expenses, the costs associated with the used equipment we sell, the costs to purchase new equipment and costs associated with parts sales and services, all of which are included in cost of revenues. For the year ended December 31, 2023, our total cost of revenues was approximately $784.8 million. Our operating expenses consist principally of selling, general and administrative expenses (“SG&A”). For year ended December 31, 2023, our SG&A expenses were $405.4 million. In addition, we have interest expense primarily related to our debt instruments. Operating expenses and all other income and expense items below the gross profitff generally allocated to our reportabla e segments. line of our Consolidated Statements of Income are not We are also subju ect to federal and state income taxes. Future income tax examinations by state and federal agencies could result in additional income tax expense based on potential outcomes of such matters. Cost of Revenues: Rental Depre Estimated usefulff estimated usefulff handling equipment over a seven year estimated usefulff three year estimated usefulff equipment. eciation. Depreciation of rental equipment represents the depreciation costs attributable to rental equipment. lives vary based upon type of equipment. Generally, we depreciate aerial work platforms over a ten year life with a 25% salvage value, and material life, earthmoving equipment over a five year estimated usefulff life.ff We periodically evaluate the appropriateness of remaining depreciable lives assigned to rental life. Attachments and other smaller type equipment are depreciated over a Rental Expex nse. Rental expense represents the costs associated with rental equipment, including, among other things, the cost of repairing and maintaining our rental equipment, property taxes on our fleet and other miscellaneous costs of owning rental equipment. Rental Othett with renting equipment, such as hauling services, damage waiver policies, environmental fees and other recovery fees. r. Rental other expenses consist primarily of equipment suppor t activities that we provide our customers in connection u Sales of Rental Equipmi equipment sold from our rental fleet. ent. Cost of used equipment sold primarily consists of the net book value of rental equipment for used Sales of New Equipmi ent. Cost of new equipment sold primarily consists of the equipment cost of the new equipment that is sold. r. Cost of parts sales represents costs attributable to the sale of parts used in the maintenance and repair of Parts,tt Service and Othett equipment on-rent by customers and directly to customers for their owned equipment. Cost of services revenues represents costs attributable to service provided for the maintenance and repair of equipment on-rent by customers and of customer-owned equipment. Our other expenses include costs associated with ancillary charges associated with equipment maintenance and repair services. Sellingii ,gg General and Admidd niii stii ratt tive Expexx nses: Our SG&A expenses include sales and marketing expenses, payroll and related benefit costs, including stock compensation expense, insurance expenses, profesff acquisition costs, depreciation associated with property and equipment (other than rental equipment) and amortization expense associated with intangible assets. These expenses are not generally allocated to our reportabla e segments. sional fees, rent and other occupau ncy costs, property and other taxes, administrative overhead, Interest Expexx nse: Interest expense for the periods presented represents the interest on our outstanding debt instruments, including aggregate amounts outstanding under our revolving $750.0 million senior secured credit facility (the “Credit Facility”), our $1.25 billion, 3.875% senior unsecured notes due 2028 (the “Senior Unsecured Notes”) and finance lease obligations. Non-cash interest expense related to the amortization cost of deferred financing costs and the accretion/amortization of note discount/ptt in interest expense. remium are also included ii Principal Cash Flowll s We generate cash primarily from our operating activities and, historically, we have used cash flows from operating activities and availabla e borrowings under the Credit Facility as the primary sources of funds to purchase new equipment and to fund working capital 29 and capia tal expenditures, growth and expansion opportunities (see also “Liquidity and Capia tal Resources” below). The management of our working capital is closely tied to operating cash flows, as working capital can be impacted by, among other things, our accounts receivabla e activities, the level of equipment inventory,rr which may increase or decrease in response to current and expected demand, and the size and timing of our trade accounts payabla e payment cycles. t Rentaltt Fleell A subsu tantial portion of our overall value is in our rental fleet equipment. The net book value of our rental equipment at December 31, 2023 was $1.8 billion, or approximately 66.5% of our total assets. Our rental fleet as of December 31, 2023 consisted of 61,044 units having an original acquisition cost (which we define as the cost originally paid to manufact billion. As of December 31, 2023, our rental fleet composition was as follows (dollars in millions): urt ers) of approximately $2.8 ff Aerial Work Platforms .......................................................... Earthmoving .......................................................................... Material Handling Equipment ............................................... Other...................................................................................... Total ...................................................................................... % of Total Units Original Acquisition Cost 44.6% $ 14.1% 16.7% 24.6% 100.0% 924.3 744.0 816.7 306.0 2,791.0 % of Original Acquisition Cost Average Age in Months 33.1% 26.7% 29.3% 10.9% 100.0% 51.5 23.7 39.6 27.4 39.7 Units 27,244 8,604 10,212 14,984 61,044 Determining the optimal age and mix for our rental fleet equipment is subju ective 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 as part of our fleet management strategy. The mix and age of our rental fleet, as well as our cash flows, are impacted by sales of rental equipment, which are influenced by used equipment pricing at the retail and secondary auction market levels, the demand for our rental fleet, the availabia lity of new equipment and the capia tal expenditures to acquire fleet. In making equipment acquisition decisions, we evaluate current economic and market conditions, competition, manufacturt ers’ availabia lity, pricing and return on investment over the estimated usefulff among other things. As a result of our in-house service capabilities and extensive maintenance program, our rental fleet is well- maintained. lifeff of the specificff equipment, The original acquisition cost of our gross rental fleet increased by approximately $432.6 million, or 18.3%, for the year ended December 31, 2023, largely reflective of an increase in rental fleet capital expenditures. The average age of our rental fleet equipment decreased by approximately 3.9 months for the year ended December 31, 2023. Our average rental rates for the year ended December 31, 2023 were approximately 5.6% higher than the year ended December 31, 2022 (see further discussion on rental rates in “Results of Operations” below). The rental equipment mix among our core product lines for the year ended December 31, 2023 was largely consistent with that of the prior year as a percentage of total units availabla e for rent and as a percentage of original acquisition cost. ii Principal External Factortt srr that Affeff ct our Busineii sses We are subju ect to a number of external factors that may adversely affeff ct our businesses. These factors, and other factors, are discussed below and under the heading “Forward-Looking Statements,” and in Item 1A—Risk Factors in this Annual Report on Form 10-K. • • tion and industrial markets, as well as adverse credit market conditions, can cause demand for our products to Economic downturns. The demand for our products is dependent on the general economy, which is in turn affeff cted by geopolitical conditions, the stability of the global credit markets, inflationary pressures, increasing interest rates, the industries in which our customers operate or serve, and other factors. Downturns in the general economy or in the construcrr materially decrease. Our operations are also impacted by global economic conditions, including inflation, increased interest rates and suppl ions have been limited and related to the u timing of receiving equipment orders, which have been moderate and did not extend beyond a significant period of time. We have experienced and may continue to experience inflationary pressures, including but not limited to cost increases related to equipment, fuel and hauling expenses that we attempt to mitigate through pricing and productivity initiatives. y chain constraints. To date, our suppl y chain disrupt u rr Spending levels by customers.rr Rentals and sales of equipment to the construcrr constitute a significant portion of our total revenues. As a result, we depend upon customers in these businesses and their ability and willingness to rent or buy equipment. Accordingly, our business is impacted by fluctuations in customers’ spending levels and seasonality, as discussed in Item 1. tion industryrr and to industrial companies 30 • • • serr weathett Adverdd r. Adverse weather in a geographic region in which we operate may depress demand for equipment in that region. Our equipment is primarily used outdoors and, as a result, prolonged adverse weather conditions may prohibit our customers from continuing their work projects. Adverse weather also has a seasonal impact in parts of our Intermountain region, particularly in the winter months. Activity and Trends. Expenditures by our customers may be impacted by the overall level tion activity in the markets and regions in which they operate, the price of oil and other commodities, the price Regie onal and Industry-r Specifici of construcrr of materials, suppl which our customers and end users operate. As our customers adjud st their activity and spending levels in response to these external factors, our rentals and sales of equipment to those customers will be impacted. r shortages and other general economic trends impacting the industries in y chain disruprr tions, laboa u e ations. As discussed in Item 1—Environmental and Safety Regulations and Item 1A— Climate Change and ESG Regul Risk Factors—"We could be adversely affeff cted by environmental and safety requirements and regulations, including those regarding climate change, which could subju ect us to increased operational costs that could materially and adversely impact our liquidity and operating results”, our facilities and operations are subju ect to comprehensive and frequently changing federal, state and local environmental and occupau tional health and safety laws. We have made, and will continue to make, capital and other expenditures to comply with environmental requirements. While we do not currently anticipate any material adverse effeff ct on our business, financial condition or competitive position as a result of our effort s to comply with such requirements, new or more stringent laws or regulations regarding in environmental and worker health and safety laws could affeff ct our operations and increase our operational and compliance expenditures. It is also possible that liabilities from newly-discovered non-compliance or contamination could have a material adverse effeff ct on our business, financial condition and results of operations. ff Critical Accounting Estimates We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. The application of many accounting principles requires us to make assumptions, estimates and/or judgments that affeff ct the reported amounts of assets, liabia lities, revenues and expenses in our consolidated financial statements. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonabla e under the circumstances. These l results may change based on changing assumptions, estimates and/or judgments, however, are ofteff n subju ective and they and our actuat circumstances or changes in our analyses. If actuat l amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts first become known. We believe the following critical accounting estimates could potentially producd e materially different results if we were to change underlying assumptions, estimates and/or judgments. See also Note 2 to our Consolidated Financial Statements for a summary of our significant accounting policies. Usefulff Lives of Rental Equipmi ent and Propertytt and Equipmi lives (generally three to ten years), afteff lifeff of rental equipment is determined based on our estimate of the period the asset will generate revenues, and the their estimated usefulff cost. The usefulff salvage value is determined based on our estimate of the minimum value we could realize from the asset afteff periodically review the assumptions utilized in computing rates of depreciation. We may be required to change these estimates based on changes in our industryrr or other changing circumstances. If these estimates change in the future, we may be required to recognize increased or decreased depreciation expense for these assets. r such period. We ent. We depreciate rental equipment and property and equipment over r giving effeff ct to an estimated salvage value ranging from 0% to 25% of The amount of depreciation expense we record is dependent upon the estimated usefulff lives and the salvage values assigned to each categoryrr of rental equipment. Generally, we assign estimated usefulff year life with a 25% salvage value, seven-year lifeff and a ten-year life.ff None of the usefulff prior or current period. Depreciation expense on our rental fleet as of December 31, 2023 was approximately $347.0 million. As of lives for each categoryrr of equipment by two December 31, 2023, the estimated depreciation assuming a change in estimated usefulff years was as follows: lives to our rental fleet ranging from a three-year life, five- lives assumptions have changed during the Impacm t of 2-ye- ar change in usefulff of December 31, 2023 lifei on results of operations as Aerial Work Platforms Earth- moving Material Handling Equipment ($ in millions) Other Total Depreciation expense for the year ended December 31, 2023........................................................................................ $ ff life . Increase of 2 years in usefulff life .ff Decrease of 2 years in usefulff ........................................... .......................................... $ 101.9 77.0 115.5 $ 112.8 79.7 186.0 $ 82.0 90.7 163.3 $ 50.3 61.2 50.3 347.0 308.7 515.2 31 For purpos r es of the sensitivity analysis above, we elected not to decrease the usefulff lives of other equipment, which are primarily three-year estimated usefulff lifeff assets; rather, we have held the depreciation expense constant at the actuat expense. We believe that decreasing the lifeff of the other equipment by two years is an unreasonabla e estimate and would potentially lead to the decision to expense, rather than capitalize, that portion of the subju ect asset class. In general terms, a one-year increase in the estimated life across all classes of our rental equipment will give rise to an approximate decrease in our annual depreciation expense of approximately $19.2 million. Additionally, a one-year decrease in the estimated lifeff across all classes of our rental equipment (with the exception of other equipment as discussed above) will give rise to an approximate increase in our annual depreciation expense of approximately $84.1 million. l amount of depreciation Another assumption used in our calculation of depreciation expense is the estimated salvage value assigned to our earthmoving equipment. Based on our historical data and recent experience, we have used a 25% factor of the equipment’s original cost to estimate its salvage value. This factor is subju ective and subju ect to change in the future based upon actuat equipment. A change of 5%, either increase or decrease, in the estimated salvage value would result in a change in our annual depreciation expense of approximately $7.4 million. l results at the time we dispose of the Acquisiii tion Accounting. We have made a number of acquisitions in the past and we may continue to make additional acquisitions lly all of the rental equipment that we have acquired through business combinations have been in the future. The assets acquired and liabilities assumed are recorded based on their respective fair values at the date of acquisition. Long-lived assets (principally rental equipment), goodwill and other intangible assets generally represent the largest component of our acquisitions. Historically, virtuat classified as “To be Used,” rather than as “To be Sold.” Rental equipment that we acquire and classify as “To be Used” is recorded at fair value and is valued utilizing either a cost or market approach, or a combination of these methods, depending on the asset being valued and the availabia lity of cost or market data. Goodwill is calculated as the excess of the fair value of consideration transferff red over the net of the fair value of the assets acquired and the liabilities assumed. Such fair market value assessments require judgments and estimates that can be affeff cted by various factors over time, which may cause final amounts to differ materially from original estimates. The identification of assets acquired, inputs utilized for determining the fair value of assets acquired and liabilities assumed and applicable fair value methodologies, discussed more below, all include significant judgment. We have not changed our assumption methodologies during the current or prior period. In addition to long-lived fixed assets, we also acquire other assets and assume liabilities. These other assets and liabilities accounts receivabla e, accounts payabla e and other working capia tal items. typically include, but are not limited to, parts inventory,rr Because of their short-term nature, the fair values of these assets and liabilities generally approximate the carrying values reflected on the acquired entities balance sheets. However, when appropriate, we adjud st these carrying values for factors such as collectability and existence. The intangible assets that we have acquired generally consist primarily of the goodwill recognized. Depending upon the applicable purchase agreement and the particular facts and circumstances of the business acquired, we may identify other intangible assets, such as trade names or trademarks, noncompetition agreements and customer-related intangibles (specifically, customer relationships). A trademark has a fair value equal to the present value of the royalty income attributable to it. The royalty income attributable to a trademark represents the hypothetical cost savings that are derived from owning the trademark instead of paying royalties to license the trademark from another owner. When specificff ally negotiated by the parties in the applicable purchase agreements, we base the value of noncompetition agreements on the amounts assigned to them in the purchase agreements as these amounts represent the amounts negotiated in an arm’s length transaction. When not negotiated by the parties in the applicable purchase agreements, the fair value of noncompetition agreements is estimated based on an income approach since their values are representative of the current and future revenue and profitff erosion protection they provide. Customer relationships are generally valued based on an excess earnings or income approach with consideration to projected cash flows. Evaluation of Goodwill Impaim rment. We evaluate goodwill for impairment annually or more frequently if triggering events occur or other impairment indicators arise that would more likely than not reduce the fair value of a reporting unit below its carryirr ng amount. A triggering event analysis and identification may include judgments. Application of the goodwill impairment test requires judgment, including: the identification of reporting units; assignment of assets and liabilities to reporting units; assignment of goodwill to reporting units; determination of the fair value of each reporting unit; fair value methodologies and assumptions, and an assumption as to the form of the transaction in which the reporting unit would be acquired by a market participant (either a taxabla e or nontaxable transaction). Impairment of goodwill is evaluated at the reporting unit level. A reporting unit is defined as an operating segment or one level below an operating segment (i.e., a component). We have determined that each of our operating segments (Equipment Rentals, Sales of Rental Equipment, Sales of New Equipment, Parts, and Services) represents a reporting unit, resulting in five total reporting units. 32 As of December 31, 2023, our goodwill was comprised of the following carrying values (amounts in thousands): Reporting Unit Equipment Rentals .............................................................................................................................................. Sales of Rental Equipment.................................................................................................................................. Sales of New Equipment..................................................................................................................................... Parts Sales ........................................................................................................................................................... Services Revenues .............................................................................................................................................. Total Goodwill ................................................................................................................................................ $ $ Carrying Value at December 31, 2023 99,708 8,447 — — — 108,155 During 2023, based on our evaluation of our Parts Sales reporting unit and operating segment during the third quarter, we l revenue and earnings compared with our planned revenue and earnings utilized in our most recent quantitative identified a triggering event requiring an interim impairment test. This triggering event related to a sustained parts segment decline in volume and actuat goodwill impairment analysis following our business’s dispositions and strategic shiftff to be rental focused. No triggering event was identified related to our Equipment Rental and Sales of Rental Equipment reporting units. We estimated the fair value of our Parts Sales reporting unit by weighting results from the income approach and the market approach and concluded that our Parts Sales reporting unit had a fair value less than its carryirr ng value, resulting in a $5.7 million impairment charge. The impairment was largely due to a current year decrease in parts revenues as a result of our business’s strategic shiftff and recent dispositions. This revenue decline, combined with our forecasted parts revenues growth rate and operating results assumptions for the forecast period under the income approach, resulted in a fair value determination, that when combined with the weighted fair value of the reporting unit determined under the market approach, was less than the reporting unit’s carrying value. We performed a qualitative assessment of goodwill impairment as of our annual testing date, October 1, 2023. We determined that it was more likely than not that the fair value of each of our reporting units containing goodwill was not less than its carrying value and, thereforff e, did not perform the prescribed quantitative goodwill impairment test. We considered various factors in performing the qualitative test, including macroeconomic conditions, industryrr and market considerations, the overall financial performance of our reporting units, the Company’s stock price and the excess amount between our reporting unit’s fair value and carrying value as indicated on our most recent interim quantitative assessment. During 2022, we performed, as of October 1, our annual impairment testing date, a Step 0 qualitative assessment and determined that it was more likely than not that the fair value of each of our reporting units containing goodwill was not less than its carrying value and, thereforff e, did not perform the prescribed quantitative Step 1 goodwill impairment test. We considered various factors in performing the qualitative test, including macroeconomic conditions, industryrr and market considerations, the overall financial performance of our reporting units, the Company’s stock price and the excess amount between our reporting unit’s fair value and carrying value as indicated on our most recent quantitative assessment. As of October 1, 2021, our annual impairment test date, we performed a Step 1 quantitative assessment of goodwill impairment for all reporting units containing goodwill. For these reporting units, we compared the carrying values of each reporting unit, inclusive of goodwill and definite-lived intangible assets, to its fair value. We estimated the fair value of these reporting units by weighting results from the income approach and the market approach, as further described below. Based on this quantitative test, we determined that our Equipment Rentals, Sales of Rental Equipment and Parts Sales reporting units were not impaired as of the October 1, 2021 annual impairment testing date as their respective fair values exceeded their respective carrying values by approximately 50%, 98% and 9%, respectively. Based on the excess of fair values over the carrying values, a sensitivity analysis completed on the assumptions utilized would not result in a varying conclusion of the goodwill quantitative assessment. For purpos r es of performing the quantitative impairment tests described above, we estimate the fair value of our reporting units by utilizing fair value techniques consistent with the income approach and market approach. When performing the income approach for each reporting unit, we use a discounted cash flow analysis based on our internal projected results of operations, weighted average cost of capia tal (“WACC”) and terminal value assumptions. Our cash flow projections are based on ten-year financial forecasts developed by management that include revenue projections, capital spending trends, and investment in working capia tal to suppor t anticipated revenue growth. The WACC is an estimate of the overall afteff business enterprise and represents the expected cost of new capia tal likely to be used by market participants. The WACC is used to discount our combined future cash flows. 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, 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. Changes in assumptions or estimates could materially affeff ct the estimate of a reporting unit’s fair value, and thereforff e could affeff ct the likelihood and amount of potential impairment. Under the market approach, we compare the reporting units to selected reasonabla y similar (or “guideline”) publicly-traded companies. Under this method, r-tax rate of return required by equity and debt holders of a u 33 valuation multiples are: (i) derived from the operating data of selected guideline companies; (ii) evaluated and adjud sted based on the strengths and weaknesses of our reporting unit relative to the selected guideline companies; and (iii) applied to the operating data of our reporting unit to arrive at an indication of value. The application of the market approach results in an estimate of the price reasonabla y expected to be realized from the sale of the reporting unit. Income Taxesaa . The Company files a consolidated federal income tax return with its wholly-owned subsu idiaries. The Company is a C-Corporation under the provisions of the Internal Revenue Code. We utilize the asset and liabia lity approach to measure deferred tax assets and liabilities based on temporaryrr differences existing at each balance sheet date using currently enacted tax rates. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabia lities are measured using enacted tax rates expected to apply to taxabla e income in the years in which those temporaryrr differences are expected to be recovered or settled. The effeff ct of a change in tax rate is recognized as income or expense in the period that includes the enactment date of that tax rate. The Company recognizes the effeff ct of an income tax position only if it is more likely than not (a likelihood of greater than 50%) that such position will be sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company recognizes both interest and penalties related to uncertain tax positions in net other income (expense). Our deferred tax calculation requires management to make certain estimates about future operations. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. These estimates involve judgment. There has been no change to the assumption methodology during the current or prior period. Our U.S. federal tax returns for 2020 and subsu equent years remain subju ect to examination by tax authorities. We are also subju ect to examination in various state jurisdictions for 2019 and subsu equent years. Results of Operations The tabla es included in the period-to-period comparisons below provide summaries of our revenues and gross profitff s for the years ended December 31, 2023 and 2022. The period-to-period comparisons of our financial results are not necessarily indicative of future results. All financial results and metrics discussed below are on a continuing operations basis. As discussed further in Note 2 and Note 3 to our Consolidated Financial Statements, on October 1, 2021, the Company sold its crane business and during the second quarter of 2022 the Company finalized closing adjud stments. The results of operations of the Crane Sale are reported in discontinued operations in the Consolidated Statements of Income for the years ended December 31, 2022 and 2021. The Consolidated Statements of Cash Flows includes cash flows related to the discontinued operations and accordingly, cash flow amounts for discontinued operations are disclosed in Note 3 “Acquisitions and Dispositions”. Our prior year discussion for the years ended December 31, 2022 and 2021 can be found here, in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022, which is incorporated by reference herein. Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 Revenues. Revenues: Equipment rentals For the Year Ended December 31, 2023 2022 Total Dollar Increase (Decrease) Total Percentage Increase (Decrease) Rentals ...................................................................................... $ 1,051,632 134,520 Rentals other ............................................................................. 1,186,152 Total equipment rentals ....................................................... 165,074 Sales of rental equipment............................................................... 39,099 Sales of new equipment ................................................................. 78,891 Parts, service and other .................................................................. Total revenues............................................................................ $ 1,469,216 $ $ 847,555 108,487 956,042 90,885 92,526 105,065 1,244,518 $ $ 204,077 26,033 230,110 74,189 (53,427) (26,174) 224,698 24.1% 24.0% 24.1% 81.6% (57.7)% (24.9)% 18.1% Total Revenues. Our total revenues were $1.5 billion for the year ended December 31, 2023 compared to $1.2 billion for the year ended December 31, 2022, an increase of $224.7 million, or 18.1%. Revenues of our business activities are further discussed below. 34 Equipmi ent Rental Revenues. Our total revenues from equipment rentals for the year ended December 31, 2023 increased $230.1 million, or 24.1%, to $1.2 billion from $956.0 million in 2022. The increase in equipment rental revenues was primarily due to our larger fleet and increased rental rates as compared to the prior year. See Rentals and Rentals Other below for additional information. Rentals:ll Rental revenues increased $204.1 million, or 24.1%, to $1.1 billion for the year ended December 31, 2023 compared to $847.6 million for the year ended December 31, 2022. Rental revenues from material handling equipment increased $65.4 million, aerial work platform equipment increased $60.0 million, earthmoving equipment increased $49.2 million and other equipment increased $29.5 million as compared to the prior period. Our average rental rates, based on the American Rental Association’s calculation methodology, for the year ended December 31, 2023 increased 5.6% compared to the year ended December 31, 2022. Rental equipment dollar utilization (annual rental revenues divided by the average original rental fleet equipment costs) for the year ended December 31, 2023 decreased 0.6% to 40.3% from 40.9% in 2022. The decrease in comparative rental equipment dollar utilization was the net result of a decrease in rental equipment time utilization and an increase in equipment rental rates. Rental equipment time utilization as a percentage of original equipment cost was approximately 68.8% for the year ended December 31, 2023 compared to 72.3% in the year ended December 31, 2022, a decrease of 3.5%. Rentalsll Othett r: Our rentals other revenues consist primarily of equipment suppor u t 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 year ended December 31, 2023 were $134.5 million compared to $108.5 million for the year ended December 31, 2022, an increase of $26.0 million, or 24.0%, primarily due to the increase in equipment rental revenues as described above. Sales of Rental Equipmi ent Revenues. Our sales of rental equipment for the year ended December 31, 2023 increased $74.2 million, or 81.6%, to $165.1 million from $90.9 million in 2022. This increase is reflective of our fleet management strategy and our decision to capitalize on the high demand for used equipment. Sales of used earthmoving equipment, material handling equipment and aerial work platform equipment increased $32.5 million, $21.1 million and $13.7 million, respectively. Sales of New Equipmi ent Revenues. Our sales of new equipment decreased $53.4 million, or 57.7%, to $39.1 million for the year ended December 31, 2023, from $92.5 million for the same period in 2022. This decrease is primarily reflective of the sale of our Komatsu Earthmoving Distributorship during the fourth quarter of 2022, as a result of which sales of new earthmoving equipment decreased $52.4 million. Additionally, sales of new material handling equipment and other equipment decreased $2.1 million and $1.6 million, respectively. Offsff etting these decreases, sales of new aerial work platform equipment increased $2.7 million. Parts,tt Service and Othett r Revenues. Our parts, service and other revenues decreased $26.2 million, or 24.9%, to $78.9 million for the year ended December 31, 2023 from $105.1 million for the same period in 2022. The decreases in parts and service sales were largely attributable to decreases related to earthmoving equipment following the sale of our Komatsu Earthmoving Distributorship during the fourth quarter of 2022. Gross Profitff .tt Gross Profitff : Equipment rentals For the Year Ended December 31, 2023 Total Dollar Increase (Decrease) (in thousands, except percentages) 2022 Total Percentage Increase (Decrease) Rentals ....................................................................................... $ Rentals other.............................................................................. Total equipment rentals ........................................................ Sales of rental equipment ............................................................... Sales of new equipment.................................................................. Parts, service and other................................................................... Total gross profitff ........................................................................ $ 547,792 5,647 553,439 99,891 5,530 25,601 684,461 $ $ 451,310 8,933 460,243 44,316 13,096 37,508 555,163 $ $ 96,482 (3,286) 93,196 55,575 (7,566) (11,907) 129,298 21.4% (36.8)% 20.2% 125.4% (57.8)% (31.7)% 23.3% Total Gross Profit. ff Our total gross profitff was $684.5 million for the year ended December 31, 2023 compared to $555.2 million for the year ended December 31, 2022, an increase of $129.3 million, or 23.3%. Total gross profitff margin for the year ended December 31, 2023 was approximately 46.6%, an increase of 2.0% from the 44.6% gross profitff margin for the same period in 2022. Gross profitff s and gross margins of our business activities are further described below. Equipmi ent Rentalsll Gross Profit.ff Our total gross profitff from equipment rentals for the year ended December 31, 2023 increased $93.2 million, or 20.2%, to approximately $553.4 million from $460.2 million in 2022. Total gross profitff margin from equipment 35 rentals for the year ended December 31, 2023 was approximately 46.7% compared to 48.1% for the year ended December 31, 2022, a decrease of 1.4%. See Rentals and Rentals Other below for additional information. Rentals:ll Rental revenue gross profitff increased $96.5 million to $547.8 million for the year ended December 31, 2023 compared to $451.3 million for the year ended December 31, 2022. The increase in rentals gross profitff was the result of a $204.1 million increase in rental revenues for the year ended December 31, 2023 compared to last year, which was partially offsff et by a $79.6 million increase in rental depreciation expense and a $28.0 million increase in rental expenses. The increase in both depreciation expense and rental expense is primarily due to a larger fleet size in 2023 compared to 2022. Gross profitff margin on rentals for the year ended December 31, 2023 was approximately 52.1% compared to 53.2% in 2022, a decrease of 1.1%. As a percentage of rental revenues, rental expenses were 14.9% and 15.2% for the years ended December 31, 2023 and 2022, respectively, a decrease of 0.3%. Depreciation expense was 33.0% of rental revenues for the year ended December 31, 2023 compared to 31.5% for the same period in 2022, an increase of 1.5%. Rentalsll Othett r: Our rentals other revenue consists primarily of equipment suppor u t 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 profitff December 31, 2022, a decrease of $3.3 million. Gross profitff margin was 4.2% for the year ended December 31, 2023 compared to 8.2% for the same period last year, a decrease of 4.0%. for the year ended December 31, 2023 was $5.6 million compared to $8.9 million for the year ended ent Gross Profit. Sales of Rental Equipmi ff Our sales of rental equipment gross profitff increased $55.6 million, or 125.4%, to $99.9 million compared to $44.3 million in 2022 on increased sales of rental equipment of $74.2 million. Gross profitff margin on sales of rental equipment for the year ended December 31, 2023 was approximately 60.5%, up 11.7% from 48.8% in 2022, primarily as a result of higher gross margins across all product lines. Our sales from rental fleet comprised approximately 99.3% and 92.1% of our sales of rental equipment for the years ended December 31, 2023 and 2022, respectively, and were approximately 255.0% and 207.7% of net book value for the years ended December 31, 2023 and 2022, respectively. for the year ended December 31, 2023 Sales of New Equipmi ent Gross Profit.ff Our sales of new equipment gross profitff for the year ended December 31, 2023 decreased approximately $7.6 million, or 57.8%, to $5.5 million from $13.1 million in 2022, on decreased sales of new equipment of $53.4 million. Gross profitff margin on sales of new equipment for the year ended December 31, 2023 was 14.1% compared to 14.2% for the year ended December 31, 2022. Parts,tt Service and Othett r Gross Profitff . For the year ended December 31, 2023, our parts, service and other revenues gross profitff decreased $11.9 million, or 31.7%, to $25.6 million from $37.5 million for the same period in 2022, on $26.2 million decreased parts, service and other revenues. Gross profitff margin on parts, service and other revenues for the year ended December 31, 2023 was 32.5%, a decrease of approximately 3.2% from 35.7% in the same period in 2022. Sellingii ,gg General and Admidd niii stii ratt tive Expexx nses. SG&A expenses increased approximately $61.6 million, or 17.9%, to $405.4 million for the year ended December 31, 2023 compared to $343.8 million for the year ended December 31, 2022. The net increase in SG&A expenses was attributable to several factors. Employee salaries, wages, incentive compensation, payroll taxes and related employee benefits increased $34.8 million, primarily as a result of increased wages, commissions, health insurance and incentive pay related to increased revenues. Facility expenses, depreciation and amortization expenses, profesff sional fees, promotional expenses and liabia lity insurance costs increased $6.2 million, $4.7 million, $4.4 million, $2.8 million and $2.3 million, respectively. Approximately $31.0 million of incremental SG&A expenses in 2023 were attributable to branches opened since January 1, 2022 with less than a full year of comparable operations in either or both of the years ended December 31, 2023 and 2022. As a percentage of total revenues, SG&A expenses were 27.6% for both years ended December 31, 2023 and 2022. Gain on Sales of Propertytt and Equipmii ent, Net. During the year ended December 31, 2023, gain on sales of property and equipment, net amounted to $3.4 million for the period, compared to $16.8 million for the year ended December 31, 2022, a decrease of approximately $13.4 million. This decrease is primarily due to the Company's prior year sale of our earthmoving distributorship business during the fourth quarter of 2022. For additional information on the sale, see Note 3 to our Consolidated Financial Statements. Impaim rmii ent of Goodwill.ll Impairment of goodwill incurred in the year ended December 31, 2023 was $5.7 million. The impairment related to one of our five reporting units, Parts Sales. There was no impairment of goodwill for the year ended December 31, 2022. See Note 2 to the Consolidated Financial Statements for additional information. Othett r Income (ExpeEE nse). For the year ended December 31, 2023, our net other expenses increased approximately $6.1 million to $53.5 million compared to $47.4 million for the same period in 2022. Interest expense increased approximately $6.9 million to $60.9 million for the year ended December 31, 2023 compared to $54.0 million for the year ended December 31, 2022. 36 Income Taxeaa s. We recorded an income tax expense of $53.9 million for the year ended December 31, 2023 compared to an income tax expense of approximately $47.0 million for the year ended December 31, 2022. Our effeff ctive income tax rate for the year ended December 31, 2023 was 24.2% compared to 26.0% for the same period last year, a decrease of 1.8%. The decrease in our effeff ctive tax rate is primarily due to the reduction in valuation allowance. Based on availabla e evidence, both positive and negative, we believe it is more likely than not that our federal deferred tax assets at December 31, 2023 are fully realizable through future reversals of existing taxabla e temporaryrr differences and future taxabla e income. For the year ended December 31, 2023, we have a $3.0 million valuation allowance for certain state tax credits that may not be realized. Liquidity and Capital Resources Cash Flow from Operating Activities. For the year ended December 31, 2023, the cash provided by our operating activities was $405.5 million. Our reported net income of $169.3 million, when adjud sted for non-cash income and expense items, such as depreciation and amortization (including net amortization (accretion) of note discount (premium)), deferred income taxes, non-cash operating lease expense, amortization of finance lease right-of-use assets, provision for losses on accounts receivabla e, provision for inventoryrr obsolescence, stock-based compensation expense, impairment of goodwill and net gains on the sale of long-lived assets, provided positive cash flows of $544.3 million. These cash flows from operating activities were positively impacted by a $12.7 million decrease in prepaid expenses and other assets and a $2.3 million increase in manufact offsff etting these positive cash flows were a $76.9 million increase in inventories, a $44.0 million decrease in accounts payabla e, a $26.9 million increase in receivabla es and a $6.0 million decrease in accruerr d expenses and other liabia lities. ing flooring plans payabla e. Partially urt ff For the year ended December 31, 2022, the cash provided by our operating activities was $313.2 million. Our reported net income for both continuing and discontinued operations of $132.2 million, when adjud sted for non-cash income and expense items, such as depreciation and amortization (including net amortization (accretion) of note discount (premium)), deferred income taxes, non-cash operating lease expense, amortization of finance lease right-of-use assets, provision for losses on accounts receivabla e, provision for inventoryrr obsolescence, stock-based compensation expense, loss on sale of discontinued operations and net gains on the sale of long- lived assets, provided positive cash flows of $444.3 million. These cash flows from operating activities were positively impacted by a $30.0 million increase in accounts payabla e. Partially offsff etting these positive cash flows were a $75.4 million increase in inventories, a $59.8 million increase in receivabla es, a $20.5 million decrease in manufact ing flooring plans payabla e and a $5.5 million decrease in accruer d expenses and other liabilities. urt ff Cash Flow from Investing Activities. For the year ended December 31, 2023, net cash used in our investing activities was totaled approximately $31.3 million; see additional information on the approximately $608.8 million. The acquisition of Giffinff acquisition in Note 3 to our Consolidated Financial Statements. The purchases of rental and non-rental equipment totaled approximately $745.8 million and proceeds from the sale of rental and non-rental equipment were approximately $168.3 million. For the year ended December 31, 2022, net cash used in our investing activities was approximately $546.5 million. The acquisition of OSR totaled approximately $135.7 million (net of cash acquired); see additional information on the acquisition in Note 3 to our Consolidated Financial Statements. The purchases of rental and non-rental equipment totaled approximately $515.9 million and proceeds from the sale of rental and non-rental equipment were approximately $107.3 million. A $2.3 million payment related to the sale of discontinued operations was made upon the execution of the final closing statement; see additional information on the Crane Sale in Note 3 to our Consolidated Financial Statements. Cash Flow from Financing Activities. For the year ended December 31, 2023, our net cash provided by our financing activities was $130.4 million. Borrowings on our Credit Facility amounted to $1.8 billion while payments on the facility amounted to $1.6 billion for the year ended December 31, 2023. Dividends paid were $40.0 million, or $1.10 per common share, treasury stock purchases were approximately $6.1 million and payments on finance lease obligations were $0.2 million for the year ended December 31, 2023. Payments on deferred financing costs related to the amended and restated Credit Facility totaled $4.9 million. For the year ended December 31, 2022, our cash provided by our financing activities was exceeded by our cash used in financing activities, resulting in net cash used in our financing activities of $42.7 million. Borrowings and payments offsff et one another under our Credit Facility for the year ended December 31, 2022. Dividends paid were $39.9 million, or $1.10 per common share, treasury stock purchases were approximately $1.7 million and payments on finance lease obligations were $1.1 million for the year ended December 31, 2022. Senior Unsecured Notes On December 14, 2020, we completed the offeff ring of our Senior Unsecured Notes of $1.25 billion. No principal payments on the Senior Unsecured Notes are due until their scheduled maturity date of December 15, 2028. 37 The Senior Unsecured Notes were issued by H&E Equipment Services, Inc. (the parent company) and are guaranteed by GNE Investments, Inc. and its wholly-owned subsu idiaries Great Northern Equipment, Inc., H&E Equipment Services (Califorff nia), LLC, H&E California Holding, Inc., H&E Equipment Services (Midwest), Inc., H&E Equipment Services (Mid-Atlantic), Inc. and H&E Finance Corp (collectively, the guarantor subsu idiaries). The guarantees, made on a joint and several basis, are full and unconditional (subject to subor 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 subsu idiaries by dividend or loan. There are no registration rights associated with the notes or the subsu idiary guarantees. dination provisions and subju ect to a standard limitation which provides that the maximum amount guaranteed by each u For additional information regarding our senior unsecured notes, see Note 9 to our Consolidated Financial Statements. Senior Secured Creditdd Facilityii We and our subsu idiaries are parties to a $750.0 million Credit Facility with Wells Fargo Bank, National Association as administrative agent, and the lenders named therein. At December 31, 2023, we had $181.6 million borrowed under the Credit Facility and we could borrow up to $556.0 million, which with cash and cash equivalents on hand amounted to a liquidity position of $564.5 million. On October 1, 2021, we sold our crane business and the disposition had no impact on our borrowing availabia lity. For further information on the sale of our crane business, see Note 3 to our Consolidated Financial Statements. We did not have any negative impacts to our liquidity position under the Credit Facility as a result of discontinued operations, nor do we have any covenant violations related to the Credit Facility. As of Februar ry 15, 2024, we had borrowings of $277.3 million outstanding under our Credit Facility leaving us with borrowing availabia lity of $460.3 million, as a result of $12.3 million of letters of credit outstanding under the facility. For additional information regarding our senior secured credit facility, see Note 10 to our Consolidated Financial Statements. Cash Requirements Related to Operatiott ns Our principal sources of liquidity have been from cash provided by operating activities and the revenue from our rental operations and sales of rental fleet and new equipment, proceeds from the issuance of debt, and borrowings availabla e under the Credit Facility. As of December 31, 2023, the Company held balances of cash and cash equivalents totaling $8.5 million. As of December 31, 2022, the Company held balances of cash and cash equivalents totaling $81.3 million. Our principal uses of cash and cash equivalents , purchases of rental fleet and historically have been to fund operating activities and working capia tal (including equipment inventory)rr property and equipment, opening new branch locations, fund payments due under facility operating leases and manufact urt er flooring ff plans payabla e, and to meet debt service requirements. In the future, we may pursue additional strategic acquisitions and seek to open new branch 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 capia tal expenditures by adjud sting them (either up or down) to match our actual performance. Our gross rental fleet capia tal expenditures for the years ended December 31, 2023 and 2022 were approximately $736.6 million and $507.8 million, respectively, including $74.7 million and $43.3 million, respectively, of non-cash transferff s from inventoryrr to rental fleet. This increase in rental fleet capia tal expenditures reflects our branch expansion growth strategy. Our gross property and equipment capital expenditures for the years ended December 31, 2023 and 2022 were $83.9 million and $51.5 million, respectively. 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 Unsecured Notes and our other indebtedness), will depend upon our future operating performance and the availabia lity of borrowings under the Credit Facility and/or other debt and equity financing alternatives availabla e to us, which will be affeff cted 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 capia tal markets, we believe our cash flow from operations, availabla e cash and cash equivalents and availabla e borrowings under the Credit Facility will be adequate to meet our future liquidity needs for the foreseeabla e future, both in the short- term (over the next 12 months) and beyond. At December 31, 2023, we have cash and cash equivalents on hand of approximately $8.5 million. At December 31, 2023, we had availabla e borrowings of $556.0 million, net of $12.3 million of outstanding letters of credit and at December 31, 2022, we had availabla e borrowings of $739.4 million, net of $10.6 million of outstanding letters of credit. At Februar ry 15, 2024, we had $460.3 million of availabla e borrowings under the Credit Facility, net of a $12.3 million of outstanding letters of credit. Our contractuat indebtedness and interest payments. We have no off-bff analysis of material cash requirements from known contractuat a l and other obligations as of December 31, 2023. l obligations and commercial commitments principally include obligations associated with our outstanding alance sheet arrangements. In tabul ar format below, we have disclosed our 38 Senior unsecured notes (1) ...................................................... $ 1,250,000 242,188 Interest payments on senior unsecured notes (2)..................... 181,642 Senior secured credit facility (3) ............................................. 61,609 Interest payments on senior secured credit facility (4)............ 234,222 Operating lease liabia lities (5) .................................................. 29,799 Other lease commitments (6) .................................................. 3,871 Finance lease liabia lities (7)...................................................... 2,708 Other long-term obligations (8)............................................... l cash obligations .......................................... $ 2,006,039 Total contractuat $ $ Total 2024 2027-2028 Payments Due by Year 2025-2026 (Amounts in thousands) — $ 48,438 — 15,082 25,875 1,427 423 2,708 93,953 $ — $ 1,250,000 96,875 181,642 16,363 61,690 5,245 915 — $ 1,612,730 96,875 — 30,164 66,454 4,904 874 — 199,271 Thereafter $ $ — — — — 80,203 18,223 1,659 — 100,085 (1) (2) (3) (4) (5) (6) (7) (8) See Note 9 to our Consolidated Financial Statements for additional information regarding our Senior Notes. Future interest payments are calculated based on the assumption that all of the senior unsecured notes remain outstanding until maturity. See Note 10 to our Consolidated Financial Statements for additional information regarding our Credit Facility. This represents future interest payments calculated based on the assumption that all borrowings remain outstanding until maturity, assumes the interest rate in effeff ct at December 31, 2023 and includes unused commitment fees. This includes total minimum operating lease rental payments having initial or remaining non-cancelable lease terms longer than one year, including interest. Represents total minimum operating lease rental payments for leases executed but not commenced as of December 31, 2023. This includes total minimum finance lease rental payments having initial or remaining non-cancelable lease terms longer than one year, including interest. Represents amounts due on manufact equipment inventoryrr and rental equipment. urt er flooring plans payabla e, which are used to finance certain purchases of new ff As of December 31, 2023, we had standby letters of credit issued under our Credit Facility totaling $12.3 million that expire in May 2024. Quarterly Dividend On each of Februar ry 10, 2023, May 12, 2023, August 11, 2023 and November 9, 2023, the Company declared a quarterly dividend of $0.275 per share to stockholders of record, which were paid on March 10, 2023, June 9, 2023, September 15, 2023 and December 15, 2023, respectively, totaling approximately $40.0 million. On Februarr dividend of $0.275 per share to stockholders of record as of the close of business on Februarr 15, 2024. ry 9, 2024, the Company declared a quarterly ry 23, 2024, which is to be paid on March The Company intends to continue to pay regular quarterly cash dividends; however, the declaration of any subsu equent dividends is discretionary and will be subju ect to a final determination by the Board of Directors each quarter afteff things, business and market conditions. r its review of,ff among other Acquisitions and Start-up Facilities We periodically engage in evaluations of potential acquisitions and start-up facilities. We intend to continue to evaluate and pursue, on an opportunistic basis, acquisitions that meet our selection criteria, and we are focused on identifying and acquiring rental companies to complement our existing business, broaden our geographic footprt int, and increase our density in existing markets. Effeff ctive January 1, 2018, we completed the acquisition of CEC, a privately-held company focused on non-residential tion equipment rentals serving the greater Denver, Colorado area out of three branch locations. Effeff ctive April 1, 2018, we construcr completed the acquisition of Rental Inc., an equipment rental and distribution company with five branch locations in Alabama and Florida. Effeff ctive Februarr Central Texas. Effeff ctive October 1, 2022, we completed the acquisition of OSR, an equipment rental company with ten branch locations in the Midwest. Effeff ctive November 1, 2023, we completed the acquisition of Giffin, an equipment rental company with three branches in California. See Note 3 to our Consolidated Financial Statements for additional information on these acquisitions. ry 1, 2019, we completed the acquisition of WRI, an equipment rental company with six branch locations in The success of our growth strategy depends, in part, on selecting strategic acquisition candidates at attractive prices and identifying strategic start-up locations. We expect to face competition for acquisition candidates, which may limit the number of acquisition opportunities and lead to higher acquisition costs. We may not have the financial resources necessary to consummate any 39 acquisitions or to successfulff terms. For further information regarding our risks related to acquisitions, see Item 1A – Risk Factors of this Annual Report on Form 10-K. ly open any new facilities in the future or the ability to obtain the necessary funds on satisfactoryrr Item 7A. Quantitative and Qualitative Disclosures about Market Risk Our earnings may be affeff cted by changes in interest rates since interest expense on the Credit Facility is currently calculated based upon (a) the Base Rate plus an applicable margin of 0.25% to 0.75%, depending on the Average Availabia lity (as defined in the Credit Facility), in the case of index rate revolving loans and (b) SOFR plus a credit spread adjud stment and an applicable margin of 1.25% to 1.75%, depending on the Average Availabia lity (as defined in the Credit Facility), in the case of SOFR revolving loans. At December 31, 2023, we had $181.6 million in borrowings outstanding under the Credit Facility. At Februar ry 15, 2024, we had $277.3 million in borrowings outstanding under the Credit Facility with $460.3 million of availabla e borrowings, net of a $12.3 million of outstanding letters of credit. We did not have significant exposure to changing interest rates as of December 31, 2023 on the fixed- rate senior unsecured notes. Historically, we have not engaged in derivatives or other financial instruments for trading, speculative or hedging purpos market conditions are accommodating. es, though we may do so from time to time if such instruments are availabla e to us on acceptabla e terms and prevailing r Item 8. Financial Statements and Supplementary Data Index to consolidated financial statements of H&E Equipment Services, Inc. and Subsu idiaries Report of Independent Registered Publu ic Accounting Firm .......................................................................................................... Consolidated Balance Sheets as of December 31, 2023 and 2022................................................................................................. Consolidated Statements of Income for the years ended December 31, 2023, 2022 and 2021 ..................................................... Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2023, 2022 and 2021 ............................... Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021 .............................................. Notes to Consolidated Financial Statements .................................................................................................................................. Page 41 43 44 45 46 48 40 Report of Independent Registered Public Accounting Firm Shareholders and Board of Directors H&E Equipment Services, Inc. Baton Rouge, Louisiana Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of H&E Equipment Services, Inc. (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and schedule of valuation and qualifyiff ng accounts for each of the three years in the period ended December 31, 2023 appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conforff mity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Publu ic Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 31, 2023, based on criteria establa ished in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated Februarr ry 22, 2024 expressed an unqualified opinion thereon. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonabla e assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedurd es to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedurd es that respond to those risks. Such procedurd es included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonabla e basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subju ective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Revenue Recogno itiott n for equipmii ent rentaltt ,ll sales of rentaltt equipmii ent, and sales of new equipmii ent As described in Note 2 to the consolidated financial statements, the Company’s revenue is generated from renting equipment, as well as the sale of goods or services, to customers. Revenue from equipment rental transactions is generally accounted for under Topic 842 in the period earned based on contractuat l terms of the rental contract with the customer. A rental contract includes rates for daily, weekly or monthly use, and equipment rental revenues are earned on a daily basis as rental contracts remain outstanding. Revenue from the sale of rental and new equipment is accounted for under Topic 606 and is generally recognized when control of the promised good is transferff l terms with the customer. The processing and recording of the Company’s revenue transactions involves a combination of automated and manual processes. The Company’s consolidated net revenue from equipment rentals, sale of rental equipment and sale of new equipment was $1.4 billion for the fiscal year ended December 31, 2023. red to the customer based on contractuat 41 We identifieff d revenue recognition for equipment rental, sales of rental equipment, and sales of new equipment as a critical audit matter. The principal consideration for our determination was the significant audit effoff rt in performing procedurd es relating to revenue recognition for equipment rental, sales of rental equipment, and sales of new equipment. The primaryrr procedurd es we perforff med to address this critical audit matter included: • • • • Obtaining an understanding of the nature of the revenue recognition process for equipment rental, sales of rental equipment and sales of new equipment, through walkthrough of individual transactions, and review of contracts with the customers. Testing the design, implementation, and operating effeff ctiveness of relevant controls relating to the revenue recognition process for equipment rental, sales of rental equipment and sales of new equipment, including IT general controls for the systems used in the revenue recognition process, as well as manual and automated business process controls. Testing a sample of equipment rental transactions by agreeing the amounts recognized to source documents, such as rental contracts, invoices, and subsu equent cash receipts. Testing a sample of sales of rental equipment and sales of new equipment transactions by agreeing the amounts recognized to source documents, such as sales contracts, invoices, delivery documents, and subsu equent cash receipts. /s/ BDO USA, P.C. We have served as the Company's auditor since 2004. Dallas, Texas Februar ry 22, 2024 42 H&E EQUIPMENT SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, Assets Cash and cash equivalents.................................................................................................. $ Receivabla es, net of allowance for doubtful accounts of $7,126 and $6,637, respectively. Inventories, net of reserves for obsolescence of $207 and $54, respectively .................... Prepaid expenses and other assets ...................................................................................... Rental equipment, net of accumulated depreciation of $990,971 and $884,740, respectively......................................................................................................................... Property and equipment, net of accumulated depreciation and amortization of $193,723 and $177,017, respectively................................................................................. Operating lease right-of-use assets, net of accumulated amortization of $71,021 and $51,419, respectively.......................................................................................................... Finance lease right-of-use assets, net of accumulated amortization of $345 and $105, respectively......................................................................................................................... Deferred financing costs, net of accumulated amortization of $17,606 and $16,518, respectively......................................................................................................................... Intangible assets, net of accumulated amortization of $25,824 and $19,369, respectively......................................................................................................................... Goodwill............................................................................................................................. Total assets ..................................................................................................................... $ Liabilities and Stockholders’ Equity Liabilities: ff Senior secured credit facility.............................................................................................. $ Accounts payabla e ............................................................................................................... Manufact urt er flooring plans payabla e ................................................................................. Accruer d expenses payabla e and other liabia lities.................................................................. Dividends payabla e .............................................................................................................. Senior unsecured notes, net of unaccreted discount of $5,807 and $6,979 and deferred financing costs of $1,341 and $1,612, respectively ........................................................... Operating lease liabia lities ................................................................................................... Finance lease liabia lities ...................................................................................................... Deferred income taxes........................................................................................................ Total liabia lities................................................................................................................ Commitments and Contingencies (Note 13) Stockholders’ equity: 2023 2022 (Amounts in thousands, except share and per share amounts) $ 8,500 247,430 109,931 8,740 81,330 225,294 107,842 21,455 1,756,578 1,418,951 183,773 176,703 2,891 4,609 32,576 108,155 2,639,886 181,642 85,486 2,708 87,929 360 1,242,852 183,775 3,019 317,826 2,105,597 $ $ 134,637 164,566 1,545 758 32,631 102,690 2,291,699 — 129,482 422 77,142 377 1,241,409 169,069 1,594 271,162 1,890,657 red stock, $0.01 par value, 25,000,000 shares authorized; no shares issued............ Preferff Common stock, $0.01 par value, 175,000,000 shares authorized; 40,823,375 and 40,567,876 shares issued at December 31, 2023 and December 31, 2022, respectively, and 36,449,188 and 36,309,321 shares outstanding at December 31, 2023 and December 31, 2022, respectively ....................................................................................... Additional paid-in capia tal................................................................................................... Treasuryrr stock at cost, 4,374,187 and 4,258,555 shares of common stock held at December 31, 2023 and December 31, 2022, respectively ................................................ Retained earnings ............................................................................................................... Total stockholders’ equity .............................................................................................. Total liabia lities and stockholders’ equity ....................................................................... $ — — 408 261,927 (76,017) 347,971 534,289 2,639,886 $ 405 251,901 (69,964) 218,700 401,042 2,291,699 The accompanying notes are an integral part of these consolidated financial statements. 43 H&E EQUIPMENT SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, (Amounts in thousands, except per share amounts) 2023 2022 (Amounts in thousands, except per share amounts) 2021 Revenues: Equipment rentals ................................................................................ Sales of rental equipment ..................................................................... Sales of new equipment ....................................................................... Parts, service and other ........................................................................ Total revenues ................................................................................. $ 1,186,152 165,074 39,099 78,891 1,469,216 $ 956,042 90,885 92,526 105,065 1,244,518 $ 729,700 135,245 92,677 105,175 1,062,797 Cost of revenues: Rental depreciation .............................................................................. Rental expense..................................................................................... Rental other ......................................................................................... Sales of rental equipment ..................................................................... Sales of new equipment ....................................................................... Parts, service and other ........................................................................ Total cost of revenues ...................................................................... Gross profitff ...................................................................................... Selling, general and administrative expenses ............................................ Impairment of goodwill............................................................................ Gain from sales of property and equipment, net........................................ Income from operations ................................................................... Other income (expense): Interest expense ................................................................................... Other, net............................................................................................. Total other expense, net ................................................................... Income from operations before provision for income taxes ....................... Provision for income taxes ....................................................................... Net income from continuing operations............................................ Discontinued Operations: Income (loss) from discontinued operations before provision (benefitff ) for income taxes............................................................................................ Provision (benefitff ) for income taxes ......................................................... Net income (loss) from discontinued operations ............................... Net income ...................................................................................... Net income from continuing operations per common share: Basic ............................................................................................... Diluted ............................................................................................ Net income (loss) from discontinued operations per common share: Basic ............................................................................................... Diluted ............................................................................................ Net income per common share: Basic ............................................................................................... Diluted ............................................................................................ Weighted average common shares outstanding: Basic ............................................................................................... Diluted ............................................................................................ $ $ $ $ $ $ $ $ $ $ 347,022 156,818 128,873 632,713 65,183 33,569 53,290 784,755 684,461 405,432 5,714 3,389 276,704 (60,891) 7,384 (53,507) 223,197 53,904 169,293 — — — 169,293 4.69 4.66 — — 4.69 4.66 36,100 36,329 $ $ $ $ $ $ $ $ $ $ 267,395 128,850 99,554 495,799 46,569 79,430 67,557 689,355 555,163 343,845 — 16,836 228,154 (54,033) 6,609 (47,424) 180,730 47,036 133,694 (2,049) (525) (1,524) 132,170 3.72 3.70 (0.04) (0.04) 3.68 3.66 35,943 36,089 $ $ $ $ $ $ $ $ $ $ 227,772 109,365 76,934 414,071 86,323 80,822 66,218 647,434 415,363 290,791 — 7,748 132,320 (53,758) 3,162 (50,596) 81,724 21,160 60,564 55,948 13,972 41,976 102,540 1.67 1.66 1.16 1.15 2.83 2.81 36,261 36,451 The accompanying notes are an integral part of these consolidated financial statements. 44 H&E EQUIPMENT SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021 (Amounts in thousands, except share and per share amounts) Balances at December 31, 2020 .................................. Stock-based compensation ...................................... Cash dividends declared on common stock ($1.10 per share)................................................................. Issuances of non-vested restricted common stock, net of restricted stock forfeiturt es ............................ Repurchases of 61,476 shares of restricted common stock ......................................................... Net income .............................................................. Balances at December 31, 2021 .................................. Stock-based compensation ...................................... Cash dividends declared on common stock ($1.10 per share)................................................................. Issuances of non-vested restricted common stock, net of restricted stock forfeiturt es ............................ Repurchases of 46,923 shares of restricted common stock ......................................................... Net income .............................................................. Balances at December 31, 2022 .................................. Stock-based compensation ...................................... Cash dividends declared on common stock ($1.10 per share)................................................................. Issuances of non-vested restricted common stock, net of restricted stock forfeiturt es ............................ Repurchases of 115,632 shares of restricted common stock ......................................................... Net income .............................................................. Balances at December 31, 2023 .................................. Common Stock Shares Issued 40,242,711 — $ — 110,588 — — 40,353,299 — — 214,577 — — 40,567,876 — — 255,499 Amount 401 — — 2 — — 403 — — 2 — — 405 — — 3 Additional Paid-in Capital $ 240,206 4,432 Treasury Stock Retained Earnings $ (66,188) $ 63,814 — — Total Stockholders’ Equity $ 238,233 4,432 — — — — 244,638 7,263 — — — — 251,901 10,026 — — — — (39,719) (39,719) — 2 (2,106) — — 102,540 126,635 — (68,294) — (2,106) 102,540 303,382 7,263 — — (40,105) (40,105) — 2 (1,670) — — 132,170 218,700 — (69,964) — (1,670) 132,170 401,042 10,026 — — (40,022) (40,022) — 3 — — 40,823,375 $ — — 408 — — $ 261,927 (6,053) — — 169,293 $ (76,017) $ 347,971 (6,053) 169,293 $ 534,289 The accompanying notes are an integral part of these consolidated financial statements. 45 H&E EQUIPMENT SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, Cash flows from operating activities: Net income......................................................................................................... $ Adjud stments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of property and equipment ........................... Depreciation of rental equipment .................................................................. Amortization of intangible assets .................................................................. Amortization of deferred financing costs ...................................................... Accretion of note discount, net of premium amortization ............................. Non-cash operating lease expense ................................................................. Amortization of finance lease right-of-use assets.......................................... Provision for losses on accounts receivable .................................................. Provision for inventoryrr obsolescence ............................................................ Deferred income taxes ................................................................................... Stock-based compensation expense............................................................... Impairment of goodwill ................................................................................. Loss (gain) on sale of discontinued operations.............................................. Gain from sales of property and equipment, net............................................ Gain from sales of rental equipment, net....................................................... Changes in operating assets and liabilities, net of acquisitions: Receivabla es ................................................................................................ Inventories ................................................................................................. Prepaid expenses and other assets ............................................................. Accounts payabla e....................................................................................... Manufact urt er flooring plans payabla e......................................................... Accruer d expenses payabla e and other liabia lities ......................................... Net cash provided by operating activities.............................................. ff 2023 2022 (Amounts in thousands) 2021 169,293 $ 132,170 $ 102,540 34,697 347,022 6,455 1,359 1,172 19,602 240 4,858 178 46,664 10,026 5,714 — (3,389) (99,629) (26,911) (76,922) 12,724 (43,988) 2,286 (5,968) 405,483 28,810 267,395 4,660 970 1,172 14,535 105 3,264 32 42,278 7,263 — 1,917 (16,836) (43,397) (59,768) (75,375) (1) 29,999 (20,502) (5,453) 313,238 27,347 231,492 3,970 971 1,172 12,964 122 1,892 54 30,221 4,432 — (42,072) (7,797) (50,756) 2,868 (56,535) (10,923) 11,208 11,309 (14,907) 259,572 Cash flows from investing activities: Acquisition of business, net of cash acquired................................................ Closing adjud stment on sale of discontinued operations................................. Proceeds from the sale of discontinued operations........................................ Purchases of property and equipment............................................................ Purchases of rental equipment ....................................................................... Proceeds from sales of property and equipment............................................ Proceeds from sales of rental equipment ....................................................... Net cash used in investing activities .......................................................... Cash flows from financing activities: Purchases of treasuryrr stock............................................................................ Borrowings on senior secured credit facility ................................................. Payments on senior secured credit facility .................................................... Payments of deferred financing costs ............................................................ Dividends paid ............................................................................................... Payments of finance lease obligations ........................................................... Net cash provided by (used in) financing activities................................... Net increase (decrease) in cash and cash equivalents........................................ Cash and cash equivalents, beginning of year ................................................... Cash and cash equivalents, end of year ............................................................. $ (31,265) — — (83,872) (661,960) 4,449 163,886 (608,762) (6,053) 1,790,187 (1,608,545) (4,939) (40,039) (162) 130,449 (72,830) 81,330 8,500 $ (135,710) (2,256) — (51,452) (464,434) 23,626 83,689 (546,537) (1,670) 1,278,182 (1,278,182) — (39,856) (1,141) (42,667) (275,966) 357,296 81,330 $ — — 135,945 (34,622) (418,082) 11,884 133,900 (170,975) (2,106) 1,417,770 (1,417,770) (135) (39,748) (194) (42,183) 46,414 310,882 357,296 46 H&E EQUIPMENT SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) FOR THE YEARS ENDED DECEMBER 31, emental schedule of non-cash investing and financing u Suppl activities: Accruer d acquisition purchase price consideration ........................... $ Non-cash asset purchases: red from inventoryrr to rental fleet.......................... $ Assets transferff Change in purchases of property and equipment included in accruer d expenses payabla e and other liabia lities............................. $ Operating lease assets obtained in exchange for new operating lease liabilities .............................................................................. $ emental disclosures of cash flow information: u Suppl Cash paid during the year for: Interest .......................................................................................... $ Income taxes paid, net of refunds received .................................. $ 2023 2022 (Amounts in thousands) 2021 — $ 803 74,655 (591) 31,739 56,582 5,812 $ $ $ $ $ 43,321 (1,213) 27,880 51,828 5,894 $ $ $ $ $ $ — 18,669 425 13,565 51,748 4,810 The accompanying notes are an integral part of these consolidated financial statements. 47 H&E EQUIPMENT SERVICES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) Organization and Nature of Operations Founded in 1961, H&E Equipment Services, Inc. (or “the Company”, “we”, “us”, or “our”) is one of the largest rental equipment companies in the nation, serving customers across 30 states. The Company’s fleet is versatile with an equipment mix comprised of aerial work platforms, earthmoving, material handling, and other general and specialty lines. H&E serves a diverse set of end markets in many high-growth geographies including branches throughout the Pacific Northwest, West Coast, Intermountain, Southwest, Gulf Coast, Southeast, Midwest and Mid-Atlantic regions. (2) Significant Accounting Policies Principles of Consolidation and Basis of Presentation Our consolidated financial statements include the financial position and results of operations of H&E Equipment Services, Inc. and its wholly-owned subsu idiaries H&E Finance Corp., GNE Investments, Inc., Great Northern Equipment, Inc., H&E Califorff nia Holding, Inc., H&E Equipment Services (Califorff nia), LLC, H&E Equipment Services (Midwest), Inc. and H&E Equipment Services (Mid-Atlantic), Inc., collectively referred to herein as “we”, “us”, “our” or the “Company.” On October 1, 2021, the Company sold its crane business (the “Crane Sale”) and during June 2022, closing adjud stments were finalized. The results of operations of the Crane Sale are reported in discontinued operations in the Consolidated Statements of Operations for the years ended December 31, 2022 and 2021. All results and information in the consolidated financial statements are presented as continuing operations and exclude the Crane Sale unless otherwise noted specifically as discontinued operations. The Consolidated Statements of Cash Flows includes cash flows related to the discontinued operations and accordingly, cash flow amounts for discontinued operations are disclosed in Note 3 “Acquisitions and Dispositions”. For additional information, refer to Note 3. All significant intercompany accounts and transactions have been eliminated in these consolidated financial statements. Business combinations are included in the 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, the accompanying consolidated balance sheets are presented on an unclassified basis. Use of Estimates 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 affeff ct 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 effeff ct on our consolidated financial statements. Actual results may differ materially from those estimates. We review our estimates on an ongoing basis based on information currently availabla e, and changes in facts and circumstances may cause us to revise these estimates. Reclassifications Certain reclassifications have been made to prior period amounts in the Consolidated Statements of Income to conforff m to the current period presentation. These reclassifications did not have a material impact on previously reported amounts. Revenue Recognition We recognize revenue in accordance with two different Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 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 red to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or is transferff services. Revenue is measured based on the consideration specifieff d 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 transferff good or service to a customer. Our contracts with customers generally do not include multiple performance obligations. We recognize revenue when we satisfyff a performance obligation by transferff revenue recognized refleff cts the consideration we expect to be entitled to in exchange for such products or services. ring control over a product or service to a customer. The amount of a distinct 48 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. The tabla es below summarize our revenues as presented in our Consolidated Statements of Income for the years ended December 31, 2023, 2022 and 2021 by revenue type and by the applicable accounting standard (amounts in thousands). Year Ended December 31, 2023 Topic 842 Topic 606 Total Revenues: Rental Revenues: Owned equipment rentals..................................................................... $ Re-rent revenue .................................................................................... 1,017,012 34,122 $ $ 498 — Ancillary and other rental revenues: Deliveryrr and pick-up .u ........................................................................... Other..................................................................................................... Total ancillary rental revenues ................................................................. Total equipment rental revenues .............................................................. Sales of rental equipment ......................................................................... Sales of new equipment............................................................................ Parts, service and other............................................................................. Total revenues .......................................................................................... $ — 63,101 63,101 1,114,235 — — — 1,114,235 $ 71,419 — 71,419 71,917 165,074 39,099 78,891 354,981 $ 1,017,510 34,122 71,419 63,101 134,520 1,186,152 165,074 39,099 78,891 1,469,216 Year Ended December 31, 2022 Topic 842 Topic 606 Total Revenues: Rental Revenues: Owned equipment rentals..................................................................... $ Re-rent revenue .................................................................................... 814,423 32,726 $ $ 406 — Ancillary and other rental revenues: Deliveryrr and pick-up .u ........................................................................... Other..................................................................................................... Total ancillary rental revenues ................................................................. Total equipment rental revenues .............................................................. Sales of rental equipment ......................................................................... Sales of new equipment............................................................................ Parts, service and other............................................................................. Total revenues .......................................................................................... $ — 52,184 52,184 899,333 — — — 899,333 $ 56,303 — 56,303 56,709 90,885 92,526 105,065 345,185 $ 814,829 32,726 56,303 52,184 108,487 956,042 90,885 92,526 105,065 1,244,518 Year Ended December 31, 2021 Topic 606 Total Topic 842 Revenues: Rental Revenues: Owned equipment rentals..................................................................... $ Re-rent revenue .................................................................................... 617,831 34,819 $ $ 354 — Ancillary and other rental revenues: Deliveryrr and pick-up .u ........................................................................... Other..................................................................................................... Total ancillary rental revenues ................................................................. Total equipment rental revenues .............................................................. Sales of rental equipment ......................................................................... Sales of new equipment............................................................................ Parts, service and other............................................................................. Total revenues .......................................................................................... $ — 36,173 36,173 688,823 — — — 688,823 $ 40,523 — 40,523 40,877 135,245 92,677 105,175 373,974 $ 618,185 34,819 40,523 36,173 76,696 729,700 135,245 92,677 105,175 1,062,797 49 Revenues by reporting segment are presented in Note 16, using the revenue capta ions reflected in our Consolidated Statements of Income. We believe that the disaggregation of our revenues from contracts to customers as reflected above, coupled with further discussion below and the reporting segment in Note 16, depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affeff cted by economic factors. Nature of goods and services Lease revenues Topic 842 p Owned equipmi ent rentalsll : Owned equipment rentals represent revenues from renting equipment. We account for these 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. Our equipment is generally rented for short periods of time (less than a year). 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. The lease terms are included in our contracts, and the determination of whether our contracts contain leases generally does not require significant assumptions or judgments. In some cases, a rental contract may contain a rental purchase option, whereby the customer has an option to purchase the rented equipment at the end of the term for a specifieff d price. Revenues related to the rental contract will be accounted for as an operating lease as the option to purchase is not reasonabla y certain to be exercised. Lessees do not provide residual value guarantees on rented equipment. Re-rent revenue: Re-rent revenue reflects revenues from equipment that we rent from vendors and then rent to our customers. We account for such rentals as sublu eases. The accounting for re-rent revenue is the same as the accounting for owned equipment rentals described above. Other equipmi ent rental revenue: Other equipment rental revenue is primarily comprised of (i) revenue from customers who purchase insurance to protect against potential damages or loss to the equipment they rent, (ii) environmental charges associated with the rental of equipment, and (iii) fuel recovery fees charged to customers. Fuel consumption charges are recognized upon return of the rental equipment when fuel consumption by the customer, if any, can be measured. Income from environmental fees and damage waiver insurance policies are recognized when earned over the period the equipment is rented. ) Revenues from contracts with customers (Topic 606) p ( Subsu tantially all of our revenues under Topic 606 are recognized at a point-in-time rather than over time. Owned equipmi ent rentals:ll An insignificant portion of our total equipment rental revenues are recognized pursuant to Topic 606 rather than pursuant to Topic 842. These revenues represent services performed by us in connection with the rental of equipment and are comprised of customer training fees on rented equipment and setupu and configff uration services on rental equipment. Revenues for these services are recognized upon completion of such services. See discussion above regarding rental revenues recognized pursuant to Topic 842. Deliveryr and pick-up: Delivery and pick-upu revenue associated with renting equipment is recognized when the service is performed. Sales of rental equipmi ent: Revenues from the sales of rental equipment are recognized at the time of deliveryrr to, or pick-upu by, the customer, which is when the customer obtains control of the promised good. Sales of new equipmi ent: Revenues from the sales of new equipment are recognized at the time of delivery to, or pick-upu by, the customer, which is when the customer obtains control of the promised good. Parts,tt service, and othett r: Revenues from the sales of equipment parts are recognized at the time of pick-upu by the customer for parts counter sales transactions. For parts that are shipped to a customer, we made an accounting policy election permitted by Topic 606 to treat such shipping activities as fulfilff lment costs, which results in the fees for shipping activities being included in the parts sales transaction price. Service revenues is derived primarily from maintenance and repair services to customers for equipment that we rent or sell and from customers owned equipment. We recognize services revenues at the time such services are completed, which is when the customer obtains control of the promised service. Other revenues relate to equipment suppor u provide to customers in connection with sales of rental and new equipment and parts and services revenues. t activities that we 50 Receivablesll and contratt ct assets and liabilit iett s ii We manage credit risk associated with our accounts receivabla es 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 allowances for doubtful accounts address our total revenues from Topic 606 and Topic 842. We believe concentration of credit risk with respect to our receivabla es is limited because our customer base is comprised of a large number of geographically diverse customers. Our largest customer accounted for less than four percent of total revenues for the years ended December 31, 2023, 2022 and 2021. No single customer accounted for more than 10% of our total revenues for any of the three years ended December 31, 2023. We manage credit risk through credit approvals, credit limits and other monitoring procedurd es. Pursuant to Topic 842 and Topic 326 for rental and non-rental receivabla es, respectively, we maintain an allowance for doubtful tabla e forecasts, and our own judgment as to the likelihood of ultimate payment based 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 specificff economic circumstances, reasonable and suppor u upon availabla e data. Our largest exposure to doubtful accounts is our rental operations, which as discussed above is accounted for under Topic 842 and as of December 31, 2023 represents 81% of our total revenues and an approximate corresponding percentage of our receivabla es, net and associated allowance for doubtful accounts. We perform credit evaluations of customers and establa ish 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 procedurd es. 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. Bad debt expense as a percentage of total revenues for the years ended December 31, 2023, 2022 and 2021 was approximately 0.3%, 0.3% and 0.2%, respectively. customers, our understanding of our current We do not have material contract assets, impairment losses associated therewith, or material contract liabia lities associated with contracts with customers. Our contracts with customers do not generally result in material amounts billed to customers in excess of recognizabla e revenue. We did not recognize material revenues during the years ended December 31, 2023, 2022 or 2021 that was included in the contract liabia lity balance as of the beginning of such periods. Perforff marr nce obligll atiott ns Most of our Topic 606 revenue is recognized at a point-in-time, rather than over time. Accordingly, in any particular period, we do not generally recognize a significff ant amount of revenue from performance obligations satisfieff d (or partially satisfied) in previous periods, and the amount of such revenue recognized during the years ended December 31, 2023, 2022 and 2021 was not material. Payma ent terms Our Topic 606 revenues do not include material amounts of variable consideration. Our payment terms are typically net 30 days, but can vary by the type and location of our customer and the products or services offeff payment is due is not significant. Our contracts do not generally include a significant financing component. Our contracts with customers do not generally result in significant obligations associated with returns, refunds or warranties. See above for a discussion of how we manage credit risk. red. The time between invoicing and when Sales tax amounts collected from customers are recorded on a net basis. Contratt ct coststt We do not recognize any assets associated with the incremental costs of obtaining a contract with a customer (for example, a sales commission) that we expect to recover. Subsu tantially all of our revenue is recognized at a point-in-time or over a period of one year or less, and we use the practical expedient that allows us to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less. Contratt ct estimaii tes and judgmegg ntstt Our revenues accounted for under Topic 606 generally do not require significant estimates or judgments as the transaction price is generally fixed and stated on our contracts. Our contracts generally do not include multiple performance obligations, and accordingly do not generally require estimates of the standalone selling price for each performance obligation. Also, our revenues do not include material amounts of variable consideration. Subsu tantially all of our revenues are recognized at a point-in-time and the timing of the satisfaction of the applicable performance obligations is readily determinable. As noted above, our Topic 606 revenues are generally recognized at the time of delivery to, or pick-upu by, the customer. 51 Discontinued Operations In determining whether a group of assets which has been disposed of (or is to be disposed of)ff should be presented as discontinued operations, the Company analyzes whether the group of assets being disposed of represents a component of the entity. A component typically has historic operations and cash flows that are clearly distinguishable for both operations and financial reporting purpos addition, the Company considers whether the disposal represents a strategic shiftff that has or will have a majoa r effeff ct on the Company’s operations and financial results. This strategic shiftff could include a disposal of a majoa r geographical area, a majoa r line of business, a majoa r equity method investment, or other majoa r parts of an entity. r es. In The Company reports financial results for discontinued operations separately from continuing operations to distinguish the financial impact of disposal transactions from ongoing operations. The assets and liabia lities of a discontinued operation held for sale, other than goodwill, are measured at the lower of its carrying amount or fair value less cost to sell. When a portion of a reporting unit that constitutes a business is to be disposed of,ff the goodwill associated with that business is included in the carrying amount of the business based on the relative fair values of the business to be disposed of and the portion of the reporting unit that will be retained. See Note 3 for additional information. Cash and Cash Equivalents Cash and cash equivalents include cash on hand and highly liquid investments with an original maturity of three months or less. Inventories We measure inventoryrr at the lower of cost or net realizable value; where net realizable value is considered to be estimated selling price in the ordinary course of business, less reasonabla y predictabla e costs of completion, disposal and transportation. For used and new equipment inventories, cost is determined by specificff ies, cost is determined by using average cost. -identificff ation. For inventories of parts and suppl u Rental Equipment The rental equipment we purchase is stated at cost and is depreciated over the estimated usefulff lifeff of the equipment using the straight-line method and is included in rental depreciation within our Consolidated Statements of Income. Estimated usefulff based upon type of equipment. Generally, we depreciate aerial work platforms over a ten year estimated usefulff equipment over a five year estimated usefulff estimated usefulff life. Attachments and other smaller type equipment are depreciated generally over a three year estimated usefulff We periodically evaluate the appropriateness of remaining depreciable lives and any salvage value assigned to rental equipment. Depreciation expense on rental equipment is reflected in rental depreciation in cost of revenues on the Consolidated Statements of Income. lifeff with a 25% salvage value, and material handling equipment over a seven year earthmoving life,ff lives vary life. Ordinary repair and maintenance costs and property taxes are reflected in rental expenses in cost of revenues on the Consolidated Statements of Income. However, expenditures for additions or improvements that significantly extend the usefulff capitalized in the period incurred. When rental equipment is sold or disposed of,ff the related cost and accumulated depreciation are removed from the respective accounts and any gains or losses are included in gross profitff We receive individual offeff The rental equipment is not transferff the equipment is sold. in the Consolidated Statements of Income. rs for fleet on a continual basis, at which time we perform an analysis on whether or not to accept the offeff r. red to inventoryrr under the held for sale model as the equipment is used to generate revenues until lifeff of the asset are Property and Equipment Property and equipment are recorded at cost and are depreciated over the assets’ estimated usefulff lives using the straight-line method. Ordinary repair and maintenance costs are included in selling, general and administrative (“SG&A”) expenses on our Consolidated Statements of Income. However, expenditures for additions or improvements that significantly extend the usefulff the asset are capitalized in the period incurred. At the time assets are sold or disposed of,ff the cost and accumulated depreciation are removed from their respective accounts and the related gains or losses are reflected in the Consolidated Statements of Income in gains from sales of property and equipment, net. We additionally capia talize certain costs associated with internally developed software and cloud computing arrangements. life of We periodically evaluate the appropriateness of remaining depreciable lives assigned to property and equipment. Leasehold improvements are amortized using the straight-line method over their estimated usefulff whichever is shorter. Depreciation expense on property and equipment is included in SG&A expenses on our Consolidated Statements of Income. Generally, we assign the following estimated usefulff lives or the remaining term of the lease, lives to these categories: 52 Category Transportation equipment................................................................ Buildings ......................................................................................... Offiff ce equipment............................................................................. Computer equipment ....................................................................... Machineryrr and equipment ............................................................... Estimated Usefulff Life 5 years 39 years 5 years 3 years 7 years When events or changes in circumstances indicate that the carrying amount of our rental fleet and property and equipment might not be recoverabla e, the expected future undiscounted cash flows from the assets are estimated and compared with the carryirr ng amount of the assets. If the sum of the estimated undiscounted cash flows is less than the carrying amount of the assets, an impairment loss is recorded. The impairment loss is measured by comparing the fair value of the assets with their carrying amounts. Fair value is determined based on discounted cash flows or appraised values, as appropriate. In suppor we perform a review of our long-lived assets at the branch level relative to branch performance and conclude whether indicators of impairment exist. We did not record any impairment losses related to our rental equipment or property and equipment during the years ended December 31, 2023, 2022 or 2021. t of our review for indicators of impairment, u Acquisition Accounting We have made a number of acquisitions in the past and we may continue to make additional acquisitions in the future. The assets lly all of the rental equipment that we have acquired through business combinations have been classified as “To be acquired and liabia lities assumed are recorded based on their respective fair values at the date of acquisition. Long-lived assets (principally rental equipment), goodwill and other intangible assets generally represent the largest component of our acquisitions. Historically, virtuat Used,” rather than as “To be Sold.” Rental equipment that we acquire and classify as “To be Used” is recorded at fair value and is valued utilizing either a cost or market approach, or a combination of these methods, depending on the asset being valued and the availabia lity of cost or market data. Goodwill is calculated as the excess of the fair value of consideration transferff fair value of the assets acquired and the liabilities assumed. Such fair market value assessments require judgments and estimates that can be affeff cted by various factors over time, which may cause final amounts to differ materially from original estimates. The identification of assets acquired, inputs utilized for determining the fair value of assets acquired and liabilities assumed and applicable fair value methodologies all include significant judgment. red over the net of the In addition to long-lived fixed assets, we also acquire other assets and assume liabilities. These other assets and liabilities accounts receivabla e, accounts payabla e and other working capia tal items. typically include, but are not limited to, parts inventory,rr Because of their short-term nature, the fair values of these assets and liabilities generally approximate the carrying values reflected on the acquired entities balance sheets. However, when appropriate, we adjud st these carrying values for factors such as collectability and existence. The intangible assets that we have acquired consist primarily of the goodwill recognized. Depending upon the applicable purchase agreement and the particular facts and circumstances of the business acquired, we may identify other intangible assets, such as trade names or trademarks, noncompetition agreements and customer-related intangibles (specifically, customer relationships). A trademark has a fair value equal to the present value of the royalty income attributable to it. The royalty income attributable to a trademark represents the hypothetical cost savings that are derived from owning the trademark instead of paying royalties to license the trademark from another owner. The fair value of noncompetition agreements is estimated based on an income approach since their values are representative of the current and future revenue and profitff erosion protection they provide. Customer relationships are generally valued based on an excess earnings or income approach with consideration to projected cash flows. Goodwill Goodwill is recorded as the excess of the consideration transferff red 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, as of October 1, or more frequently if triggering events occur or other impairment indicators arise that would more likely than not reduce the fair value of a reporting unit below its carrying amount. 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 availabla e and segment management regularly reviews the operating results of that component. We have identifieff d that our five operating segments (Equipment Rentals, Sales of Rental Equipment, Sales of New Equipment, Parts Sales and Service Revenues) each represent a reporting unit. Topic 350 consists of a one-step assessment to determine whether goodwill is impaired requiring an entity to compare each reporting unit’s carrying value, including goodwill, with its fair value. 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 53 the reporting unit. An entity also has an option to perform a qualitative assessment to determine if the quantitative impairment test is necessary. Considerable judgment is required by management in performing the qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. Based on our evaluation of our Parts Sales reporting unit and operating segment during the third quarter of 2023, we identifieff d a triggering event requiring an interim impairment test. This triggering event related to a sustained parts segment decline in volume and l revenue and earnings compared with our planned revenue and earnings utilized in our most recent quantitative goodwill actuat impairment analysis following our dispositions and strategic shiftff to be rental focused. Additional information on our dispositions is included in Footnote 3. No triggering event was identifieff d related to our Equipment Rental and Sales of Rental Equipment reporting units. We estimated the fair value of our Parts Sales reporting unit by weighting results from the income approach and the market approach and concluded that our Parts Sales reporting unit had a fair value less than its carrying value, resulting in a $5.7 million impairment charge. The impairment was largely due to a current year decrease in parts revenues as a result of our strategic shiftff and recent dispositions. This revenue decline, combined with our forecasted parts revenues growth rate and operating results assumptions for the forecast period under the income approach, resulted in a fair value determination, that when combined with the weighted fair value of the reporting unit determined under the market approach, was less than the reporting unit’s carrying value. We performed a qualitative assessment of goodwill impairment as of our annual testing date, October 1, 2023. We determined that it was more likely than not that the fair value of each of our reporting units containing goodwill was not less than its carrying value and, thereforff e, did not perform the prescribed quantitative goodwill impairment test. We considered various factors in performing the qualitative test, including macroeconomic conditions, industryrr and market considerations, the overall financial performance of our reporting units, the Company’s stock price and the excess amount between our reporting unit’s fair value and carrying value as indicated on our most recent interim quantitative assessment. We performed a qualitative assessment of goodwill impairment as of our annual testing date, October 1, 2022. We determined that it was more likely than not that the fair value of each of our reporting units containing goodwill was not less than its carrying value and, thereforff e, did not perform the prescribed quantitative goodwill impairment test. We considered various factors in performing the qualitative test, including macroeconomic conditions, industryrr and market considerations, the overall financial performance of our reporting units, the Company’s stock price and the excess amount between our reporting unit’s fair value and carrying value as indicated on our most recent quantitative assessment. We performed a quantitative assessment of goodwill impairment as of our annual testing date, October 1, 2021, for all reporting units containing goodwill. For these reporting units, we compared the carrying values of each reporting unit, inclusive of goodwill, if applicable, and definite-lived intangible assets, to its fair value. We estimated the fair value of these reporting units by weighting results from the income approach and the market approach. Based on this quantitative test, we determined that our Equipment Rentals, Sales of Rental Equipment and Parts Sales reporting units were not impaired as of October 1, 2021 as their respective fair values exceeded their respective carrying values by approximately 50%, 98% and 9%, respectively. 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.rr 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,ff could affeff ct our fair value measurements and result in future impairments. If we are unabla e to achieve the financial forecasts used in our impairment analysis, we may also be required to record an impairment charge to our goodwill. discount rates, industryrr price multiples, etc.) The impairment charge described above is a non-cash item and does not affeff ct our cash flows, liquidity or borrowing capaa city under the Credit Facility, and the impairment charge is excluded from our financial results in evaluating our financial covenants under the Credit Facility. The carrying amount of goodwill for our reporting units for the years ended December 31, 2023 and 2022 is as follows (amounts in thousands): 54 Equipment Rentals Sales of Rental Eq. Sales of New Eq. Parts Sales Service Revenues Balance at December 31, 2021 (1)............. $ Increase (2)................................................. Balance at December 31, 2022 (1)............. Increase (3)................................................. Decrease (4) ............................................... Decrease (5) ............................................... Increase (6)................................................. Balance at December 31, 2023 (1)............. $ 48,976 39,553 88,529 29 — (132) 11,282 99,708 $ $ 8,447 — 8,447 — — — — 8,447 $ $ — $ — — — — — — — $ $ 5,714 — 5,714 — (5,714) — — — $ — $ — — — — — — — $ Total 63,137 39,553 102,690 29 (5,714) (132) 11,282 108,155 (2) (1) The total carrying amount of goodwill as of December 31, 2021 and 2022 in the tabla e above is reflected net of $92.7 million of accumulated impairment charges. The total carrying amount of goodwill as of December 31, 2023 in the tabla e above is reflected net of $98.4 million of accumulated impairment charges. Increase due to the One Source Equipment Rentals, Inc. (“OSR”) Acquisition. Increase is related to the closing adjud stments of the OSR Acquisition during the first quarter of 2023. (3) (4) Decrease is related to the Parts Sales goodwill impairment calculated during the third quarter of 2023. (5) Decrease is related to the final closing adjud stment of the OSR Acquisition during the third quarter of 2023. (6) Increase due to the Giffin Equipment (“Giffin”) Acquisition during the fourth quarter of 2023. Intangible assets Our intangible assets include customer relationships, tradenames and leasehold interests that we acquired in recent acquisitions (see Note 3 for further acquisition information). The customer relationships, leasehold interests and noncompetition agreements are amortized on a straight-line basis over estimated usefulff years), respectively, from the date of acquisition, which approximates the period of economic benefit. lives of ten years, ten years and the length of agreement (typically one to five The gross carrying values, accumulated amortization and net carrying amounts of our majoa r classes of intangible assets as of December 31, 2023 and 2022 are as follows (dollar amounts in thousands): Customer relationships ...... $ Noncompetition agreements ......................... Leasehold interests............. Total ............................... $ December 31, 2023 Accumulated Amortization Gross Net Gross December 31, 2022 Accumulated Amortization Net 53,900 $ 23,917 $ 29,983 $ 50,100 $ 18,844 $ 31,256 4,300 200 58,400 $ 1,787 120 25,824 $ 2,513 80 32,576 $ 1,700 200 52,000 $ 425 100 19,369 $ 1,275 100 32,631 Intangible assets are tested for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverabla e. An impairment loss would be recognized when the carrying amount of the asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The impairment loss to be recorded would be the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis or other valuation technique. Total amortization expense for the years ended December 31, 2023, 2022 and 2021 totaled $6.5 million, $4.7 million and $4.0 million, respectively, and is included within SG&A expenses on the Consolidated Statements of Income. The following tabla e presents the expected amortization expense for each of the next five years ending December 31 and thereafteff remaining carrying value as of December 31, 2023 (dollar amounts in thousands): r for those intangible assets with 2024 ................................................................................ 2025 ................................................................................ 2026 ................................................................................ 2027 ................................................................................ 2028 ................................................................................ Thereafter ....................................................................... $ $ Amortization Expense 5,930 5,930 5,930 5,930 2,973 5,883 32,576 55 Manufacff turer Flooring Plans Payable ff urt er flooring plans payabla e are financing arrangements for inventoryrr and rental equipment. The interest cost incurred on Manufact ff the manufact urt er flooring plans ranged from 0% to the prime rate (8.50% at December 31, 2023) plus an applicable margin. Certain manufacff turer flooring plans provide for a one to twelve-month reduced interest rate term or a deferred payment period. We recognize interest expense based on the effeff ctive interest method. We make payments in accordance with the original terms of the financing urt er flooring plans prior to the original maturity date of agreements. However, we may sell equipment that is financed under manufact the financing agreement. The related manufacturt er flooring plan payabla e is then paid at the time the equipment being financed is sold. The manufact urt er flooring plans payabla e are secured by the equipment being financed. ff ff Manufact ff urt er flooring plans payabla e as of December 31, 2023 have maturities (based on original financing terms) during the year ended December 31, 2024. Leases The Company as Lessee We determine whether an arrangement is a lease at the inception of the arrangement based on the terms and conditions in the contract. A contract contains a lease if there is an identifieff d asset and we have the right to control the asset for a period of time in exchange for consideration. Lease arrangements can take several forms. Some arrangements are clearly within the scope of lease accounting, such as a real estate contract that provides an explicit contractuat exchange for consideration. However, the right to use an asset can also be conveyed through arrangements that are not leases in form, such as leases embedded within service and suppl determine if an identified asset is present, if subsu tantive subsu titution rights are present, and if the arrangement provides the customer control of the asset. y contracts. We analyze all arrangements with potential embedded leases to l right to use a building for a specified period of time in u Our lease portfolff io is subsu tantially comprised of operating leases related to leases of real estate and improvements at our branch locations. From time to time, we may also lease various types of small equipment and vehicles. Operating lease right-of-use (“ROU”) assets represent our right to use an individual asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabia lities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide the lessor’s implicit rate, we use our incremental borrowing rate (“IBR”) at the commencement date in determining the present value of lease payments by assuming the rate for a fully collateralized and amortizing loan with the same term as the lease. Lease terms include options to extend the lease when it is reasonably certain those options will be exercised. For leases with terms greater than 12 months, we record the related asset and obligation at the present value of lease payments over the term. Many of our leases include rental escalation clauses, renewal options and/or termination options that are factored into our determination of lease payments when such renewal options and/or termination options are reasonabla y certain of exercise. We do not separate lease and non- lease components of contracts. Variable lease payments, which represent lease payments that vary due to changes in facts or circumstances occurring afteff r the commencement date other than the passage of time, are expensed in the period in which the obligation for these payments was incurred. A ROU asset is subju ect to the same impairment guidance as assets categorized as plant, property, and equipment. As such, any impairment loss on ROU assets is presented in the same manner as an impairment loss recognized on other long-lived assets. A lease modification is a change to the terms and conditions of a contract that change the scope or consideration of a lease. For example, a change to the terms and conditions to the contract that adds or terminates the right to use one or more underlying assets, or extends or shortens the contractuat l lease term, is a modification. Depending on facts and circumstances, a lease modification may be accounted as either: (1) the original lease plus the lease of a separate asset(s) or (2) a modified lease. A lease will be remeasured if there are changes to the lease contract that do not give rise to a separate lease. See Note 11 related to the required lease disclosures. The Company as Lessor Our equipment rental business involves rental contracts with customers whereby we are the lessor in the transaction and thereforff e, such transactions are subju ect to Topic 842. We account for such 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. 56 Deferred Financing Costs and Initial Purchasers’ Discounts Deferred financing costs include legal, accounting and other direct costs incurred in connection with the issuance and amendments thereto, of the Company’s debt. These costs are amortized over the terms of the related debt using the straight-line method which approximates amortization using the effeff ctive interest method. Initial purchasers’ discount and bond premium is the differential between the price paid to an issuer for the new issue and the red to the investing public. The amortization expense of prices (below and above, respectively) at which the securities are initially offeff deferred financing costs and bond premium and accretion of initial purchasers’ discounts are included in interest expense as an overall cost of the related financings. Such costs are presented in the balance sheet as a direct deduction from the carrying value of the associated debt liabia lity, consistent with the presentation of a debt discount. Reserves for Claims We are exposed to various claims relating to our business, including those for which we provide self-iff nsurance. Claims for which we self-iff nsure include: (1) workers compensation claims; (2) general liabia lity claims by third parties for injun ry or property damage caused by our equipment or personnel; (3) automobile liabia lity claims; and (4) employee health insurance claims. Losses that exceed our deductibles and self-iff nsured retentions are insured through various commercial lines of insurance policies. These types of claims may take a subsu tantial amount of time to resolve and, accordingly, the ultimate liabia lity associated with a particular claim, including claims incurred but not reported as of a period-end reporting date, may not be known for an extended period of time. Our methodology for developing self-iff nsurance reserves is based on management estimates. Our estimation process considers, among other matters, the cost of known claims over time, cost inflation and incurred but not reported claims. These estimates may change based on, among other things, changes in our claim historyrr or receipt of additional information relevant to assessing the claims. Further, these estimates may prove to be inaccurate due to factors such as adverse judicial determinations or other claim settlements at higher than estimated amounts. Accordingly, we may be required to increase or decrease our reserve levels. At December 31, 2023, our claims reserves related to workers compensation, general liability and automobile liabia lity, which are included in “Accruer d expenses payabla e and other liabilities” in our consolidated balance sheets, totaled $9.9 million and our health insurance reserves totaled $2.3 million. At December 31, 2022, our claims reserves related to workers compensation, general liability and automobile liabia lity totaled $9.1 million and our health insurance reserves totaled $1.9 million. Advertising Advertising costs are expensed as incurred and totaled $1.1 million, $1.0 million and $1.1 million for the years ended December 31, 2023, 2022 and 2021, respectively. Income Taxes The Company files a consolidated federal income tax return with its wholly-owned subsu idiaries. The Company is a C-Corpor under the provisions of the Internal Revenue Code. We utilize the asset and liabia lity approach to measure deferred tax assets and liabia lities based on temporaryrr differences existing at each balance sheet date using currently enacted tax rates. Deferred tax assets and liabia lities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabia lities and their respective tax bases. Deferred tax assets and liabia lities are measured using enacted tax rates expected to apply to taxabla e income in the years in which those temporaryrr differences are expected to be recovered or settled. The effeff ct of a change in tax rate is recognized as income or expense in the period that includes the enactment date of that rate. ration The Company recognizes the effeff ct of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax provisions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company recognizes both interest and penalties related to uncertain tax positions in net other income (expense). Our deferred tax calculation requires management to make certain estimates about future operations. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Fair Value of Financial Instruments Fair value is defined as the amount that would be received for selling an asset or paid to transferff a liability in an orderly transaction between market participants at the measurement date. The FASB fair value measurement guidance establa ished 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 liabia lities in active markets or inputs that are observabla e for the asset or liabia lity, either directly or indirectly 57 Level 3 – Unobservabla e inputs for which little or no market data exists, thereforff e requiring a company to develop its own assumptions The carrying value of financial instruments reported in the accompanying consolidated balance sheets for cash and cash equivalents, accounts receivable, Credit Facility, accounts payabla e and accruer d expenses payabla e and other liabia lities approximate fair value due to the immediate or short-term nature, maturity or market interest rate of these financial instruments. The Company’s outstanding obligations on its Credit Facility are deemed to be at fair value as the interest rates are variable and consistent with prevailing rates, which are considered Level 2 inputs. The carryirr ng amounts and fair values of our other financial instruments subju ect to fair value disclosures as of December 31, 2023 and 2022 are presented in the tabla e below (amounts in thousands). ff Manufact Senior unsecured notes due 2028 with interest computed at 3.875% (Level 2) .................... urt er flooring plans payabla e with interest computed at 8.75% (Level 3)................. $ ff Manufact Senior unsecured notes due 2028 with interest computed at 3.875% (Level 2) .................... urt er flooring plans payabla e with interest computed at 7.75% (Level 3)................. $ December 31, 2023 Carrying Amount Fair Value 2,708 1,242,852 $ 2,490 1,137,170 December 31, 2022 Carrying Amount Fair Value 422 1,241,409 $ 392 1,070,088 At December 31, 2023 and 2022, the fair value of our senior unsecured notes due 2028 (the “Senior Unsecured Notes”), respectively, were based on quoted bond trading market prices for those notes. For our Level 3 unobservabla e inputs, we calculate a discount rate for our manufacturt er flooring plans payabla e based on the U.S. prime rate plus the applicable margin on our Credit Facility. The discount rate is disclosed in the above tabla e. The assets collateralized against the manufact approximate its carryirr ng value. urt er flooring plans payabla e ff During the years ended December 31, 2023 and 2022, there were no transferff s of financial assets or liabilities in or out of Level 3 of the fair value hierarchy. Fair Value Measurements on a Nonrecurring Basisii Our non-financial assets, such as goodwill, intangible assets and property and equipment, are adjud sted to fair value only when an impairment charge is recognized or the underlying investment is sold. Such fair value measurements are based predominately on Level 3 inputs. The result of our third quarter 2023 goodwill impairment quantitative test indicated that the fair value of the Parts Sales reporting unit was less than the carrying value of the reporting unit, resulting in a goodwill impairment of $5.7 million. Concentrations of Credit and Supplier Risk Financial instruments that potentially subju ect the Company to concentrations of credit risk consist primarily of cash deposits and trade accounts receivabla e. Credit risk can be negatively impacted by adverse changes in the economy or by disrupt markets. r ions in the credit The Company maintains its cash deposits with establa ished commercial banks. At times, balances may exceed federally insured limits. We have not experienced any losses in such accounts and do not believe that we are exposed to any significant credit risk associated with our cash deposits. We believe that credit risk with respect to trade accounts receivable is somewhat mitigated by our large number of geographically diverse customers and our credit evaluation procedurd es. Although generally no collateral is required, when feasible, mechanics’ liens are filed and personal guarantees are signed to protect the Company’s interests. We maintain reserves for potential losses. We record trade accounts receivabla es at sales value and establa ish specific reserves for certain customer accounts identifieff d as known collection problems due to insolvency, disputes or other collection issues. The amounts of the specificff reserves estimated by management are determined by a loss rate model based on delinquency, as further described above in receivabla es and contract assets and liabilities. We purchase a significant amount of equipment from leading, nationally-known original equipment manufacff turers. During the year ended December 31, 2023, we purchased appr John Deere, and SkyTkk principal product categories, termination of one or more of our relationships with any of our majoa r suppl rak). We believe that while there are alternative sources of suppl turers (JCB, Skyjkk ack, Sany, y for the equipment we purchase in each of the iers of equipment could have oximately 52.8% of our equipment from five manufacff u u a 58 a material adverse effeff ct on our business, financial condition or results of operation if we were unabla e to obtain adequate or timely rental equipment. Income (loss) per Share Income (loss) per common share for the years ended December 31, 2023, 2022 and 2021 is based on the weighted average number of common shares outstanding during the period. The effeff cts of potentially dilutive securities that are anti-dilutive are not included in the computation of diluted income (loss) per share. We include all common shares granted under our incentive compensation plan which remain unvested (“restricted common shares”) and contain non-forfeitabla e 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 during the years ended December 31, 2023, 2022 and 2021 were less than 1% of total outstanding shares for each of the years ended December 31, 2023, 2022 and 2021 and consequently, were immaterial to the basic and diluted EPS calculations. Thereforff e, use of the two-class method had no impact on our basic and diluted EPS calculations as presented for the years ended December 31, 2023, 2022 and 2021. The following tabla e sets forth the computation of basic and diluted net income (loss) per common share for the years ended December 31, (amounts in thousands, except per share amounts): 2023 2022 2021 Net income from continuing operations ............................................................ $ Net income (loss) from discontinued operations ............................................... $ Net income......................................................................................................... $ 169,293 $ — $ $ 169,293 133,694 $ (1,524) $ $ 132,170 Weighted average number of common shares outstanding: Basic............................................................................................................... Effeff ct of dilutive non-vested restricted stock ................................................ Diluted ........................................................................................................... 36,100 229 36,329 35,943 146 36,089 Income (loss) per share: (1) Basic: Continuing operations.................................................................................... $ Discontinued operations ................................................................................ Net income per share ..................................................................................... $ Diluted: Continuing operations.................................................................................... $ Discontinued operations ................................................................................ Net income per share ..................................................................................... $ Common shares excluded from the denominator as anti-dilutive: Non-vested restricted stock............................................................................ $ $ $ $ 4.69 — 4.69 4.66 — 4.66 51 $ $ $ $ 3.72 (0.04) 3.68 3.70 (0.04) 3.66 81 Dividends declared per common share outstanding .......................................... $ 1.10 $ 1.10 $ 60,564 41,976 102,540 36,261 190 36,451 1.67 1.16 2.83 1.66 1.15 2.81 23 1.10 (1) Because of the method used in calculating per share data, the summations may not necessarily total to the per share data computed for the total company due to rounding. Segment Reporting We have five reportabla e segments. We derive our revenues from five principal business activities: (1) equipment rentals; (2) sales of rental equipment; (3) sales of new equipment; (4) parts sales; and (5) repair and maintenance services. These segments are based upon how we allocate resources and assess performance. See Note 16 to the consolidated financial statements regarding our segment information. 59 Recent Accounting Pronouncements Pronouncements Not Yet Adopt dd ed Segment Reporting In November 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportabla e Segment Disclosures, which improves the disclosures about a public entity’s reportabla e segments and addresses requests for additional, more detailed information about a reportabla e segment’s expenses. The amendments in this ASU require disclosure of incremental segment information on an annual and interim basis for all public entities. The amendments are effeff ctive for fiscal years beginning afteff 2024. ASU 2023-07 became effeff ctive on January 1, 2024 and are not expected to have an impact on our financial statements, but will result in expanded reportable segment disclosures. r December 15, 2023, and interim periods within fiscal years beginning afteff r December 15, Income Taxes In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, categories in the rate reconciliation, provide additional information for reconciling items that meet a which should improve the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. The ASU requires that public entities on an annual basis disclose specificff quantitative threshold and the following information about income taxes paid: the amount of income taxes paid disaggregated by federal (national), state, and foreign taxes and the amount of income taxes paid disaggregated by individual jurisdictions. Lastly, the amendments in this ASU require that entities disclose income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign and income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign. ASU 2023-09 becomes effeff ctive January 1, 2025 and are not expected to have an impact on our financial statements, but will result in expanded tax disclosures. Recently Adopt dd ed Accounting Pronouncements Reference Rate Reform On January 1, 2023 we adopted Accounting Standards Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effeff cts of Reference Rate Reform on Financial Reporting, which provided optional guidance for a limited time to ease the potential burden in accounting for or recognizing the effeff cts of reference rate reform, particularly, the risk of cessation of the London Interbank Offeff limited to the interest expense and certain fees we incur on balances outstanding under our Senior Secured Credit Facility (the “Credit Facility”). We amended and restated our Credit Facility to transition to Secured Overnight Financing Rate (“SOFR”) as of Februar ry 2, 2023. The impact from the cessation of LIBOR as a reference rate did not have a material impact on our consolidated financial statements. red Rate (“LIBOR”) on financial reporting. Our exposure related to the expected cessation of LIBOR was (3) Acquisitions and Dispositions 2023 Acquisiii tion Giffiff n Equipment Effeff ctive November 1, 2023, we completed the acquisition of Mel Giffinff , Inc. (d/bdd /a Giffin Equipment) (“Giffin”), an equipment rental company with three branches located in California. The acquisition expands our presence in the California market. The aggregate cash consideration paid was approximately $31.3 million. The acquisition and related fees and expenses were funded from availabla e cash and borrowings. The following tabla e summarizes the fair value of the assets acquired and liabia lities assumed as of the acquisition date. The opening balance sheet amounts presented below are preliminary and subju ect to change as we obtain additional information during the acquisition measurement period and finalize customaryrr closing adjud stments with the seller. 60 Accounts receivable............................................................................................................................................ Prepaid expenses and other assets ...................................................................................................................... Rental equipment................................................................................................................................................ Property and equipment...................................................................................................................................... Operating lease right-of-use assets..................................................................................................................... Intangible assets (1)............................................................................................................................................. Total identifiaff bla e assets acquired ................................................................................................................... Accruerr d expenses payabla e and other liabia lities.................................................................................................. Operating lease liabia lities ................................................................................................................................... Total liabia lities assumed ................................................................................................................................. Net identifiaff bla e assets acquired ...................................................................................................................... Goodwill (2) ........................................................................................................................................................ Net assets acquired ......................................................................................................................................... $ $ $’s in thousands 870 10 12,291 431 121 6,400 20,123 (19) (121) (140) 19,983 11,282 31,265 (1) The following tabla e reflects the estimated fair values and usefulff lives of the acquired intangible assets identified based on our purchase accounting assessments: Customer relationships .............................................................. $ Noncompetition agreements ...................................................... $ Fair Value (amounts in thousands) 3,800 2,600 6,400 Life (years) 10 5 (2) The acquired goodwill has been allocated to the equipment rentals reporting unit. The level of goodwill that resulted from the Giffin acquisition is primarily reflective of Giffin’s going-concern value, the value of 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 purpos es. r Total acquisition costs were $0.3 million and included within selling, general and administrative (“SG&A”) expenses on the Consolidated Statement of Income during the year ended December 31, 2023. Since our acquisition of Giffin on November 1, 2023, significant amounts of equipment rental fleet have been moved between H&E locations and the acquired locations, and it is impractical to reasonabla y estimate the amount of Giffin revenues and earnings since the acquisition date. The assets and liabilities were recorded as of November 1, 2023 and the results of operations are included in the Company's consolidated results as of that date. 2022 Acquisiii tion One Source Equipment Rentals, Inc. Effeff ctive October 1, 2022, we acquired 100% of the equity of One Source Equipment Rentals, Inc. (“OSR”), an equipment rental company with ten branches located in the Midwest. The acquisition expands our presence in the surrounding market, including initial locations in Illinois, Indiana, and Kentuct ky. The aggregate cash consideration paid was approximately $136.7 million. The acquisition and related fees and expenses were funded from availabla e cash. Customaryrr closing adjud stments were finalized during the first quarter of 2023 and the update of a tax estimate upon filing the final tax returns concluded during the third quarter of 2023. The following tabla e summarizes the fair value of the assets acquired and liabia lities assumed as of the acquisition date. 61 Cash .................................................................................................................................................................... Accounts receivable............................................................................................................................................ Inventory.rr ............................................................................................................................................................ Prepaid expenses and other assets ...................................................................................................................... Rental equipment................................................................................................................................................ Property and equipment...................................................................................................................................... Operating lease right-of-use assets..................................................................................................................... Intangible assets (1)............................................................................................................................................. Total identifiaff bla e assets acquired ................................................................................................................... Accounts payabla e................................................................................................................................................ Tax payabla e ........................................................................................................................................................ Operating lease liabia lities ................................................................................................................................... Deferred income taxes........................................................................................................................................ Total liabia lities assumed ................................................................................................................................. Net identifiaff bla e assets acquired ...................................................................................................................... Goodwill (2) ........................................................................................................................................................ Net assets acquired ......................................................................................................................................... $ $ $’s in thousands 337 10,406 332 374 102,436 4,216 2,388 12,300 132,789 (4,723) (786) (2,388) (27,653) (35,550) 97,239 39,451 136,690 (1) The following tabla e reflects the estimated fair values and usefulff lives of the acquired intangible assets identified based on our purchase accounting assessments: Customer relationships............................................................... $ Noncompetition agreements ...................................................... $ Fair Value (amounts in thousands) 10,600 1,700 12,300 Life (years) 10 1 (2) The acquired goodwill has been allocated to the equipment rentals reporting unit. Included in the total goodwill amount of $39.5 million is approximately $0.8 million of accruer d purchase price consideration to be paid to the sellers pursuant to the terms of the purchase agreement among the parties named thereto. The level of goodwill that resulted from the OSR acquisition is primarily reflective of OSR’s going-concern value, the value of assembled workforce, new customer relationships expected to arise from the acquisition and expected synergies from combining operations. Total acquisition costs were $0.8 million and included within selling, general and administrative (“SG&A”) expenses on the Consolidated Statement of Income during the year ended December 31, 2022. Since our acquisition of OSR on October 1, 2022, significant amounts of equipment rental fleet have been moved between H&E locations and the acquired locations, and it is impractical to reasonabla y estimate the amount of OSR revenues and earnings since the acquisition date. The assets and liabilities were recorded as of October 1, 2022 and the results of operations are included in the Company's consolidated results as of that date. Pro forma financial infon rmation (unaudited) We completed the OSR acquisition effeff ctive October 1, 2022. Thereforff e, our reported Consolidated Statement of Income for the year ended December 31, 2022 does not include OSR for the period from January 1, 2022 through September 30, 2022. Additionally, we completed the Giffin acquisition effeff ctive November 1, 2023. Thereforff e, our reported Consolidated Statement of Income for the year ended December 31, 2023 does not include Giffin for the period from January 1, 2023 through October 31, 2023. The pro forma information for the years ended December 31, 2023 and 2022 in the tabla e below (amounts in thousands) is for r es only and gives effeff ct to the OSR and Giffinff informational purpos “pro forma acquisition date”). The pro forma information is not necessarily indicative of our results of operations had the acquisition been completed on the pro forma acquisition date, nor is it necessarily indicative of our future results. The pro forma information does not reflect any cost savings from operating effiff ciencies or synergies that could result from the acquisition, nor does it reflect additional revenue opportunities following the acquisition. The unaudited pro forma financial information includes adjud stments primarily related to the incremental depreciation and amortization expense of the rental equipment and intangible assets acquired, the elimination of interest expense related to historical debt as well as other expenses that are not part of the combined entity and transaction expenses. acquisitions as if it had been completed on January 1, 2022 (the 62 Total revenues .......................................................................................................................... $ Net income ............................................................................................................................... $ Year Ended December 31, 2023 1,479,360 $ 171,075 $ 2022 1,299,409 141,516 2022 Dispii osition Komatsu Earthmoving Distributorship On December 15, 2022, we sold our Komatsu earthmoving distribution business to Houston, Texas based Waukesha-Pearce Industries, LLC (“WPI”) for $29.2 million, subju ect to customaryrr closing adjud stments. The WPI sale included the rights to the distribution of Komatsu earthmoving equipment in the state of Louisiana and counties located in southwestern Arkansas, a branch location and its associated property, plant and equipment in Kenner, LA, Komatsu new equipment inventory,rr in Bossier City, LA and certain other equipment, parts and suppl recorded a gain of $12.9 million within gain from sales of property and equipment, net and a gain of $2.5 million within other income on the Consolidated Statement of Income for the year ended December 31, 2022. The WPI sale did not qualifyff operations as the divestiture does not meet the definition of a component. ies with a net book value of approximately $14.7 million. We assets at a leased facility for discontinued u 2021 Dispii ositions Crane Sale On July 19, 2021, the Company entered into a definitive agreement to sell its crane business to a wholly-owned subsu idiary of The Manitowoc Company, Inc. for $130.0 million in cash, which was subju ect to adjud stment based on actual amounts of net working capital and crane rental fleet net book value delivered at transaction closing. The Company executed the transaction closing on October 1, 2021, subju ect to customaryrr closing conditions, including regulatoryrr approval under the Hart-Scott-Rodino Act, resulting in proceeds of $135.9 million, which was subju ect to finalization of adjud stments. Closing adjud stments of $1.9 million were recorded as a loss from discontinued operations on the Consolidated Statement of Income during the second quarter of 2022. This disposition represents the Company’s strategic shiftff to a pure-play rental business. In accordance with ASC 360, Property, Plant, and Equipment, the Company ceased recording depreciation and amortization for Crane Sale related rental fleet, property, plant and equipment, and right of use lease assets upon qualifyiff ng as held for sale. In accordance with ASC 205-20, the Company determined that discontinued operations presentation was met during the third quarter of fiscal year 2021. As part of the divestiturt e, we entered into a transition services agreement with the buyer to assist them in the transition of certain functions, including, but not limited to, information technology, accounting and human resources for a period of sixty days up to six months. Aside from these customaryrr transition services, there will be no continuing involvement with the crane business afteff r its disposal. The Company reported financial results of the crane business within all of our segments: equipment rentals, sales of rental equipment, sales of new equipment, parts sales and service revenues. Additionally, the crane business was included within the equipment rental component 2, sales of rental equipment, sales of new equipment, parts sales and service revenues goodwill reporting units. As a result of the agreement to sell the Company’s crane business, its results are reported separately as discontinued operations in our Consolidated Statements of Income for the years ended December 31, 2022 and 2021. As permitted, the Company elected not to adjud st the Consolidated Statements of Cash Flows to exclude cash flows attributable to discontinued operations. Accordingly, we disclosed the depreciation, capia tal expenditures and significant operating and investing non-cash items related to the Crane Sale below. The following tabla es (amounts in thousands) present the Crane Sale results as reported in income from discontinued operations within our Consolidated Statements of Income. 63 Year Ended December 31, 2022 2021 Revenues: Equipment rentals ........................................................................................ Sales of rental equipment ............................................................................ Sales of new equipment............................................................................... Parts, service and other................................................................................ Total revenues ........................................................................................ $ Cost of revenues: Rental depreciation ...................................................................................... Rental expense............................................................................................. Rental other ................................................................................................. Sales of rental equipment ............................................................................ Sales of new equipment............................................................................... Parts, service and other................................................................................ Total cost of revenues............................................................................ Gross profitff ............................................................................................. Selling, general and administrative expenses .................................................. Gain on sales of property and equipment, net ................................................. (Loss) gain on sale of discontinued operations ............................................... Income (loss) from discontinued operations ............................................... Other, net ......................................................................................................... for income taxes ......................... Provision (benefitff ) for income taxes ............................................................... Net income (loss) from discontinued operations......................................... Income (loss) before provision (benefit)ff $ Cash flows from discontinued operations was as follows (amounts in thousands): — $ — — — — — — — — — — — — — 132 — (1,917) (2,049) — (2,049) (525) (1,524) $ p p g Operating activities of discontinued operations: Depreciation and amortization of property and equipment ....................................... $ Depreciation of rental equipment .............................................................................. Loss (gain) on sale of discontinued operations.......................................................... Gain from sales of property and equipment, net........................................................ Gain from sales of rental equipment, net................................................................... g Investing activities of discontinued operations: Purchases of rental equipment ................................................................................... Proceeds from sales of property and equipment........................................................ Proceeds from sales of rental equipment ................................................................... p Year Ended December 31, 2022 2021 — $ — 1,917 — — — — — 10,321 11,545 52,286 57,878 132,030 3,720 1,947 1,000 6,667 8,713 46,725 35,223 97,328 34,702 20,937 49 42,072 55,886 62 55,948 13,972 41,976 1,083 3,720 (42,072) (49) (2,203) (2,431) 43 5,929 Arkansas Sale On September 17, 2021, the Company sold our Little Rock, Arkansas and Springdale, Arkansas owned-branches to Bramco, Inc. (“Bramco”) for $9.0 million (the “Arkansas Sale”). The Arkansas Sale included the land, building, building improvements, offiff ce equipment, furniture and fixturt es, and shop equipment for the two branches with a net book value of approximately $3.7 million. We recorded a gain of $5.3 million within sales from property and equipment, net on the Consolidated Statement of Income. As a turers Komatsu, Wirtgen Groupu and condition of closing, we relinquished our territory distribution rights with equipment manufacff Takeuchi. Our current distribution territory for these two branches includes the entire state of Arkansas, with the exception of five counties in Arkansas (Miller, Lafayette, Columbia, Union and Little River) as these counties are currently served by our Shreveport, Louisiana branch. The Arkansas Sale did not qualifyff for discontinued operations as the divestiture does not meet the definition of a component. The Company purchased a site in Little Rock, Arkansas to operate a rental-focused branch location in the area. The branch opening coincided with the sale to Bramco. 64 (4) Receivables Receivabla es consisted of the following at December 31, (amounts in thousands): Trade receivabla es........................................................................ $ Unbilled rental revenue .............................................................. Income tax receivabla es ............................................................... Other ........................................................................................... Less allowance for doubtful accounts ........................................ Total receivabla es, net.................................................................. $ 2023 239,277 $ 14,022 1,048 209 254,556 (7,126) 247,430 $ 2022 216,280 12,872 2,577 202 231,931 (6,637) 225,294 (5) Inventories Inventories consisted of the following at December 31, (amounts in thousands): Used equipment .......................................................................... $ New equipment........................................................................... ies and other ............................................................. Parts, suppl Total inventories, net .................................................................. $ u 2023 212 $ 97,833 11,886 109,931 $ 2022 12 94,906 12,924 107,842 The above amounts are presented net of reserves for inventoryrr obsolescence at December 31, 2023 and 2022 totaling approximately $0.2 million and $0.1 million, respectively. (6) Property and Equipment Net property and equipment consisted of the following at December 31, (amounts in thousands): Land ............................................................................................ $ Transportation equipment........................................................... Building and leasehold improvements ....................................... Office and computer equipment ................................................. Machinery and equipment .......................................................... tion in progress............................................................. Construcr Less accumulated depreciation and amortization....................... Total net property and equipment............................................... $ 2023 6,852 $ 184,739 92,561 51,058 22,869 19,417 377,496 (193,723) 183,773 $ 2022 6,852 147,171 67,181 54,099 17,241 19,110 311,654 (177,017) 134,637 Total depreciation and amortization on property and equipment was $34.7 million, $28.8 million and $26.3 million for the years ended December 31, 2023, 2022 and 2021, respectively. (7) Stock-Based Compensation Stock-based compensation is measured at the grant date, based on the calculated fair value of the award, net of an estimated forfeiture rate, and is recognized as an expense over the requisite employee service period (generally the vesting period of the grant). The estimated forfeiturt e rate is based on historical experience and revised, if necessary, in subsu equent periods for actuat l forfeitures. Our 2016 Stock-Based Incentive Compensation Plan (the “2016 Plan”) is administered by the Compensation Committee of our Board of Directors, which selects persons eligible to receive awards and determines the number of shares and/or options subju ect to each award, the terms, conditions, perforff mance measures, if any, and other provisions of the award. Under the 2016 Plan, we may offeff r deferred shares or restricted shares of our common stock and grant options, including both incentive stock options and nonqualifieff d stock options, to purchase shares of our common stock. Shares availabla e for future stock-based payment awards under our 2016 Plan were 743,877 shares of common stock as of December 31, 2023. 65 Non-vested Stoctt k From time to time, we issue shares of non-vested stock typically with vesting terms of three years. The following tabla e summarizes our non-vested stock activity for the years ended December 31, 2023, 2022 and 2021: Number of Shares Weighted Average Grant Date Fair Value Non-vested stock at January 1, 2021.......................................... Granted ....................................................................................... Vested......................................................................................... Forfeited ..................................................................................... Non-vested stock at December 31, 2021.................................... Granted ....................................................................................... Vested......................................................................................... Forfeited ..................................................................................... Non-vested stock at December 31, 2022.................................... Granted ....................................................................................... Vested......................................................................................... Forfeited ..................................................................................... Non-vested stock at December 31, 2023.................................... 524,876 $ 202,687 $ (186,042) $ (61,374) $ 480,147 $ 281,490 $ (160,868) $ (40,313) $ 560,456 $ 235,938 $ (283,332) $ (15,666) $ 497,396 $ 23.00 33.28 26.83 25.31 25.56 36.07 27.46 29.43 30.02 47.00 25.04 35.79 40.73 As of December 31, 2023, we had unrecognized compensation expense of approximately $14.6 million related to non-vested stock award payments that we expect to be recognized over a weighted average period of 1.9 years. Stock compensation expense, which is included in SG&A expenses in the accompanying Consolidated Statements of Income, for the years ended December 31, 2023, 2022 and 2021 was $10.0 million, $7.3 million and $4.4 million, respectively. Purchases of Companyn Common Stoctt k Purchases of our common stock are accounted for as treasuryrr stock in the accompanying consolidated balance sheets using the cost method. Repurchased stock is included in authorized shares, but is not included in shares outstanding. (8) Accrued Expenses Payable and Other Liabilities Accruer d expenses payabla e and other liabia lities consisted of the following at December 31, (amounts in thousands): Payroll and related liabilities ...................................................... $ Sales, use, property and income taxes ........................................ Accruer d interest .......................................................................... Accruer d insurance ...................................................................... Deferred revenue ........................................................................ Other ........................................................................................... Total accruer d expenses payabla e and other liabilities.................. $ 44,885 $ 13,853 3,947 8,740 6,808 9,696 87,929 $ 40,367 13,202 2,290 7,641 6,661 6,981 77,142 2023 2022 (9) Senior Unsecured Notes On December 14, 2020, we completed an offeff ring of $1,250 million aggregate principal amount of 3.875% senior notes due 2028 (the “Senior Notes”). The Senior Notes were sold in a private placement pursuant to a purchase agreement, dated November 30, 2020, by and among the Company, certain subsu idiary guarantors and BofA Securities, Inc. There are no registration rights associated with the Senior Notes or the subsu idiary guarantees. The Senior Notes were issued at par and require semiannual interest payments on June 15th and December 15th of each year, commencing on June 15, 2021. No principal payments are due until maturity (December 15, 2028). The Senior Notes were issued under an indenturt e, dated as of December 14, 2020, by and among the Company, the subsu idiary guarantors named therein, and The Bank of New York Mellon Trusrr December 15, 2023, the Senior Notes may be redeemed pursuant to a declining schedule of redemption prices set forth in the Indenturt e. Transaction costs incurred in connection with the offeff presented as a direct deduction from the face amount of the related liability in our Consolidated Balance Sheets. ring of the Senior Notes totaled approximately $11.4 million and are tee (the “Indenturt e”). Subsu equent to t Company, N.A., as trusr 66 The Senior Notes are senior unsecured obligations of the Company and rank equally in right of payment to all of the Company’s existing and future senior indebtedness and rank senior to any of the Company’s subor unconditionally guaranteed on a senior unsecured basis by all of the Company’s current and future significant domestic subsu idiaries (the “Guarantors”). In addition, the Senior Notes are effeff ctively subor u future secured indebtedness, including the Company’s existing senior secured credit facility, to the extent of the value of the assets securing such indebtedness, and are structurt ally subor red stock of any of the Company’s subsu idiaries that do not guarantee the Senior Notes. There are no restrictions on H&E Equipment Services, Inc.’s ability to obtain funds from the guarantor subsu idiaries by dividend or loan. dinated to all of the Company’s and the guarantors’ existing and dinated indebtedness. The Senior Notes are dinated to all of the liabia lities and preferff u u If we experience a change of control, we will be required to offeff r to purchase the Senior Notes at a repurchase price equal to 101% of the principal amount, plus accruer d and unpaid interest to the date of repurchase. The indenturt e governing the Senior Notes contains certain covenants that, among other things, limit our ability and the ability of our restricted subsu idiaries to: (i) incur additional debt; (ii) pay dividends or make distributions; (iii) make investments; (iv) repurchase stock; (v) create liens; (vi) enter into transactions with affiff liates; (vii) merge or consolidate; and (viii) transferff and sell assets. Each of the covenants is subju ect to exceptions and qualifications. As of December 31, 2023, we were in compliance with these covenants. The following tabla e reconciles our Senior Unsecured Notes to our Consolidated Balance Sheets (amounts in thousands): Balance at December 31, 2021 ........................................................................................ $ Accretion of discount through December 31, 2022 ......................................................... Amortization of deferred financing costs through December 31, 2022........................... Balance at December 31, 2022 ........................................................................................ $ Accretion of discount through December 31, 2023 ......................................................... Amortization of deferred financing costs through December 31, 2023........................... Balance at December 31, 2023 ........................................................................................ $ 1,239,967 1,172 270 1,241,409 1,172 271 1,242,852 (10) Senior Secured Credit Facility We and our subsu idiaries are parties to a $750.0 million asset based revolving Credit Facility with Wells Fargo Capia tal Finance, LLC as administrative agent, and the lenders named therein (the “Credit Facility”). On December 22, 2017, we amended, extended and restated the Credit Facility by entering into the Fifth Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) by and among the Company, Great Northern Equipment, Inc., H&E Equipment Services (Califorff nia), LLC, H&E Equipment Services (Mid-Atlantic), LLC, the other credit parties named therein, the lenders named therein, Wells Fargo Capia tal Finance, LLC, as administrative agent, the other credit parties named therein, the lenders named therein, and the joint lead arrangers, joint book runners, co-syndication agents and documentation agent named therein. The Amended and Restated Credit Agreement, among other things, (i) extended the maturity date of the credit facility to December 22, 2022, (ii) increased the commitments under the senior secured asset based revolver provided for therein to $750 million, (iii) increased the uncommitted incremental revolving capaa city to $250 million, (iv) provided that the unused line fee margin will be either 0.375% or 0.25%, depending on the Average Revolver Usage (as defined in the Amended and Restated Credit Agreement) of the borrowers, (v) lowered the interest rate (a) in the case of base rate revolving loans, to the base rate plus an applicable margin of 0.50% to 1.00% depending on the Average Availabia lity (as defined in the Amended and Restated Credit Agreement) and (b) in the case of LIBOR revolving loans, to LIBOR (as defined in the Amended and Restated Credit Agreement) plus an applicable margin of 1.50% to 2.00%, depending on the Average Availabia lity, (vi) lowered the margin applicable to the letter of credit fee to between 1.50% and 2.00%, depending on the Average Availabia lity, and (vii) permitted, subju ect to certain conditions, an unlimited amount of Permitted Acquisitions, Restricted Payments and prepayments of Indebtedness (in each case, as defined in the Amended and Restated Credit Agreement). On Februar ry 1, 2019, we further amended and extended the Amended and Restated Credit Agreement with the First Amendment to the Fifth Amended and Restated Credit Agreement (the “First Amendment”) by and among the Company, Great Northern Equipment, Inc., H&E Equipment Services (Califorff nia), LLC, H&E Equipment Services (Mid-Atlantic), LLC, the other credit parties named therein, the lenders named therein, Wells Fargo Capia tal Finance, LLC, as administrative agent, the other credit parties named therein, the lenders named therein, and the joint lead arrangers, joint book runners, co-syndication agents and documentation agent named therein. The First Amendment, among other things, (i) extended the maturity date of the credit facility from December 22, 2022 to January 31, 2024, and (ii) lowered the interest rate in the case of LIBOR revolving loans, to LIBOR plus an applicable margin of 1.25% to 1.75%, depending on the Average Availabia lity and (iii) lowered the interest rate in the case of Base Rate loans, to the Base 67 Rate (as defined in the Amended and Restated Credit Agreement) plus an applicable margin of 0.25% to 0.75%, depending on the Average Availabia lity. On September 14, 2021, the Company further amended and extended the Amended and Restated Credit Agreement with the Second Amendment to the Fifth Amended and Restated Credit Agreement (the “Second Amendment”) by and among the Company, Great Northern Equipment, Inc., H&E Equipment Services (Califorff nia), LLC, H&E Equipment Services (Mid-Atlantic), LLC, the other credit parties named therein, the lenders named therein, Wells Fargo Bank National Association, as administrative agent, and the joint lead arrangers, joint book runners, co-syndication agents and documentation agent named therein. The Second Amendment (i) amended the permitted dispositions of the credit facility, specifically the Crane Sale, and (ii) included benchmark language for a transition away from LIBOR. On Februar ry 2, 2023, we amended, extended and restated the $750.0 million Credit Facility by entering into the Sixth Amended and Restated Credit Agreement by and among the Company, Great Northern Equipment, Inc., H&E Equipment Services (Califorff nia), LLC, H&E Equipment Services (Mid-Atlantic), LLC, H&E Equipment Services (Midwest), LLC, the other credit parties named therein, the lenders named therein, Wells Fargo Bank, National Association, as administrative agent, the other credit parties named therein, the lenders named therein, and the joint lead arrangers, joint book runners, co-syndication agents and documentation agent named therein. The Sixth Amended and Restated Credit Agreement, among other things, (i) extended the maturity date of the credit facility to ry 2, 2028 and (ii) amended the interest rate to SOFR plus a credit spread adjud stment plus an applicable margin of 1.25% to Februar 1.75%, depending on the Average Availabia lity (as defined in the Amended and Restated Credit Agreement). As amended, the Amended and Restated Credit Agreement continues to provide for, among other things, a $30.0 million letter of credit sub-u facility, and a guaranty by certain of the Company’s subsu idiaries of the obligations under the Credit Facility. In addition, the Credit Facility remains secured by subsu tantially all of the assets of the Company and certain of its subsu idiaries. At December 31, 2023, we had $181.6 million under the Credit Facility and could borrow up to approximately $556.0 million, net of a $12.3 million outstanding letter of credit. As of December 31, 2023, the weighted average interest rate under the Credit Facility was approximately 7.1%. As of December 31, 2023, we were in compliance with our financial covenant under the Amended and Restated Credit Agreement. The aggregate amounts outstanding as of December 31, 2023 under both the Credit Facility and our Senior Secured Notes (Note 9) of $1,431.6 million mature during 2028. (11) Leases We use the rate implicit in the lease to discount lease payments to present value, when availabla e, however, most of our leases do not provide a readily determinable implicit rate. Thereforff e, we estimate our IBR to discount the lease payments based on information availabla e at lease commencement. Our IBR represents the rate we would expect to pay under a fully collateralized rate and amortizing loan with the same term as the lease. At December 31, 2023, the weighted average remaining lease term for operating leases was approximately 7.5 years and for finance leases was approximately 8.6 years. The weighted average discount rate for operating and finance leases was approximately 6.4% and 5.9%, respectively, at December 31, 2023. At December 31, 2022, the weighted average remaining lease term for operating leases was approximately 8.0 years and for finance leases was approximately 9.5 years. The weighted average discount rate for operating and finance leases was approximately 6.3% and 5.0%, respectively, at December 31, 2022. The tabla e below presents certain information related to lease costs, under Topic 842, for our operating and finance leases for the years ended December 31, 2023, 2022 and 2021. (in thousands). Classification Operating lease cost ............................ SG&A expenses Finance lease costs Amortization of leased assets......... SG&A expenses Interest expense Interest on lease liabia lities.............. Variable lease cost .............................. SG&A expenses Sublu ease income.................................. Other income Total lease cost.................................... $ $ 2023 Year Ended December 31, 2022 2021 31,066 $ 27,153 $ 241 120 2,607 (2,844) 31,190 $ 107 52 1,834 (2,074) 27,072 $ 24,347 122 9 1,046 (1,379) 24,145 68 The tabla e below presents suppl u emental cash flow information related to leases for the years ended December 31, 2023, 2022 and 2021. (in thousands). Cash paid for amounts included in the measurements of lease liabia lities: Operating cash flows for operating leases............................ $ Operating cash flows for finance leases ............................... Finance cash flows for finance leases .................................. 2023 Year Ended December 31, 2022 2021 $ 28,409 120 162 $ 26,407 52 1,141 23,527 9 194 The tabla e below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating and finance lease liabia lities recorded on our consolidated balance sheet as of December 31, 2023 (in thousands). 2024 ........................................................................................................................................ $ 2025 ........................................................................................................................................ 2026 ........................................................................................................................................ 2027 ........................................................................................................................................ 2028 ........................................................................................................................................ Thereafter................................................................................................................................ Total minimum lease payments .............................................................................................. Less: amount of lease payments representing interest............................................................ Present value of future minimum lease payments .................................................................. $ 25,875 33,444 33,010 31,914 29,776 80,203 234,222 (50,447) 183,775 $ $ 423 432 442 452 463 1,659 3,871 (852) 3,019 Operating Leases Finance Leases The future minimum lease payments of operating leases executed but not commenced as of December 31, 2023 are estimated to be $1.4 million, $2.4 million, $2.5 million, $2.6 million and $2.7 million for the years ending December 31, 2024, 2025, 2026, 2027 and 2028, respectively, and $18.2 million thereafter. It is expected that these leases will commence during 2024. (12) Income Taxes Our income tax provision (benefitff ) for the years ended December 31, 2023, 2022 and 2021, consists of the following (amounts in thousands): Year Ended December 31, 2023 U.S. Federal .......................................................................... $ State ...................................................................................... $ Year Ended December 31, 2022 U.S. Federal .......................................................................... $ State ...................................................................................... $ Year ended December 31, 2021: U.S. Federal .......................................................................... $ State ...................................................................................... $ Current ff Deferre d Total 2,238 5,002 7,240 $ $ — $ 4,306 4,306 $ — $ 2,574 2,574 $ 44,581 2,083 46,664 37,680 5,050 42,730 16,513 2,073 18,586 $ $ $ $ $ $ 46,819 7,085 53,904 37,680 9,356 47,036 16,513 4,647 21,160 69 Significant components of our deferred income tax assets and liabia lities as of December 31 are as follows (amounts in thousands): Deferred tax assets: Accounts receivable .............................................................................. $ Inventories............................................................................................. Net operating losses .............................................................................. Tax credits............................................................................................. Sec 263A costs ...................................................................................... Accruer d liabilities ................................................................................. Deferred compensation ......................................................................... Interest expense..................................................................................... Stock-based compensation .................................................................... Goodwill and intangible assets.............................................................. Other assets ........................................................................................... Valuation allowance.................................................................................. Deferred tax liabia lities: Property and equipment ........................................................................ Investments ........................................................................................... Goodwill and intangible assets.............................................................. Net deferred tax liabia lities......................................................................... $ 2023 2022 $ 1,619 52 65,893 8,193 780 4,216 3,225 18,901 182 8,519 92 111,672 (3,003) 108,669 (420,496) (1,126) (4,873) (426,495) (317,826) $ 1,497 13 74,931 7,040 764 3,431 2,794 12,238 242 7,842 86 110,878 (5,930) 104,948 (370,404) (1,109) (4,597) (376,110) (271,162) The reconciliation between income taxes computed using the statutt oryrr federal income tax rate of 21% to the actuat l income tax expense (benefit)ff is below for the years ended December 31 (amounts in thousands): rates ................................................ $ Computed tax at statutt oryrr Permanent items – other ........................................................... Permanent items – impairment of goodwill ............................. State income tax, net of federal tax effeff ct ................................ Change in valuation allowance................................................. Change in uncertain tax positions............................................. $ 2023 2022 2021 46,871 2,300 100 7,624 (2,927) (64) 53,904 $ $ 37,953 1,683 — 9,068 (1,668) — 47,036 $ $ 17,162 406 — 2,390 1,202 — 21,160 At December 31, 2023, we had availabla e federal net operating loss carryrr forwards of approximately $285.9 million that do not expire and state net operating loss carry forwards of approximately $120.2 million, of which $42.3 million expire in varying amounts from 2024 to 2043 and $77.9 million do not expire. We also had state income tax credits of $10.4 million that expire in varying amounts from 2024 to 2033. Management has concluded that it is more likely than not that the federal deferred tax assets are fully realizable through future reversals of existing taxabla e temporaryrr differences and future taxabla e income. Thereforff e, a valuation allowance is not required to reduce those deferred tax assets as of December 31, 2023. However, as of December 31, 2023, we have a valuation allowance of $3.0 million for certain state tax credits that are expected to expire prior to utilization. A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows (in thousands): Gross unrecognized tax benefits at January 1 ........................................... $ Increases in tax positions taken in prior years .......................................... Decreases in tax positions taken in prior years ......................................... Increases in tax positions taken in current years....................................... Decreases in tax positions taken in current years...................................... Settlements with taxing authorities ........................................................... Lapsa e in statutt e of limitations ................................................................... Gross unrecognized tax benefits at December 31 ..................................... $ 1,425 — (972) — — — (81) 372 $ $ — — — 1,425 — — — 1,425 2023 2022 70 The gross amount of unrecognized tax benefits as of December 31, 2023, if recognized, would affeff ct the effeff ctive income tax rate. To the extent we incur interest income, interest expense, or penalties related to unrecognized income tax benefits, it will be recorded within net other income (expense) on the Consolidated Statements of Income. The amount of interest and penalties recorded related to unrecognized income tax benefits is $0.1 million for the years ended December 31, 2023 and 2022. We do not expect our unrecognized tax benefits to change materially in the next twelve months. Our U.S. federal tax returns for 2020 and subsu equent years remain subju ect to examination by tax authorities. We are also subju ect to examination in various state jurisdictions for 2019 and subsu equent years. (13) Commitments and Contingencies Legal Matters From time to time, we are involved in various claims and legal actions arising in the ordinary course of our business, including claims for which we retain portions of the losses through the application of deductibles and self-iff nsured retentions, or self-iff nsurance. Losses that exceed our deductibles and self-iff nsured retentions are insured through various commercial lines of insurance policies. In the opinion of management, afteff material adverse effeff ct on the Company’s consolidated financial position, results of operations or liquidity. r consultation with legal counsel, the ultimate disposition of these various matters will not have a Letters of Credit The Company had outstanding standby letters of credit issued under its Credit Facility totaling $12.3 million as of December 31, 2023 and $10.6 million as of December 31, 2022. The letters of credit expire in May 2024 and are expected to be renewed for similar one-year terms. (14) Employee Retirement Benefit Plans We offeff r subsu tantially all of our non-union employees’ participation in a qualified 401(k)/profit-sharing plan in which we match employee contributions up to predetermined limits for qualifieff d employees as defined by the plan. For the years ended December 31, 2023 and 2022, and for both continuing and discontinued operations for the year ended December 31, 2021, we contributed to the plan, net of employee forfeitures, $5.4 million, $4.6 million and $4.4 million, respectively. We contribute to the Pension Trusrr t Fund Operating Engineers Annuity Plan (EIN: 94-6090764, Plan No. 002), a multi-employer pension plan (“the Plan”), under the terms of a Collective Bargaining Agreement (“CBA”) that expires on October 31, 2025, and covers our union-represented employees and requires contribution amounts as set forth within the CBA. The Company contributed approximately $0.4 million in each of the years ended December 31, 2023, 2022 and 2021 and the Company has paid no surcharges in any period presented. These contributions represent less than five percent of the Plan’s total contributions in 2022. As of the date that our 2023 consolidated financial statements were issued, the Plan’s Form 5500 was not availabla e for the Plan year ended December 31, 2023. The risks of participating in a multi-employer pension plan is different from the risks associated with single-employer plans in the following respects. a) Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers. b) c) If a participating employer stops contributing to the Plan, the unfunde remaining participating employers. ff d obligations of the plan may be borne by the If we choose to stop participating in the Plan, we may be required to pay the Plan an amount based on the unfunde d statust of the plan, referred to as withdrawal liabia lity. ff The Plan has a green zone statust as of December 31, 2022, the most recent date for which a statust determination has been made. The Pension Protection Act of 2006 ranks the funded statust projected funding. A plan is in the Red Zone (Critical) if it has a current funded percentage less than 65 percent. A plan is in the Yellow Zone (Endangered) if it has a current funded percentage of less than 80 percent or projects a credit balance deficit within seven years. A plan is in the Green Zone (Healthy) if it has a current funded percentage greater than 80 percent and does not have a projected credit balance deficit within seven years. The zone statust is based on the Plan’s year-end and is based on information that we received from the Plan and is certified by the Plan’s actuat ry. The Company currently has no intention of withdrawing from the Plan. of multi-employer pension plans depending upon a plan’s current and 71 (15) Related Party Transactions Mr. John M. Engquist, who has served as the Company’s Executive Chairman of the Board for the years ended December 31, 2023, 2022 and 2021, has a 48.0% ownership interest in Perkins-McKenzie Insurance Agency, Inc. (“Perkins-McKenzie”), an insurance brokerage firm. Perkins-McKenzie brokers a subsu tantial portion of our commercial liabia lity insurance. As the broker, Perkins-McKenzie receives from our insurance provider as a commission a portion of the premiums we pay to the insurance provider. Commissions paid to Perkins-McKenzie on our behalf as insurance broker totaled approximately $1.2 million, $1.1 million and $0.9 million for the years ended December 31, 2023, 2022 and 2021, respectively. We purchase products and services from, and sell products and services to, B-C Equipment Sales, Inc., in which Mr. Engquist has a 50% ownership interest. In each of the years ended December 31, 2023, 2022 and 2021, for both continuing and discontinued operations, our purchases totaled less than $20 thousand, less than $10 thousand and $0.1 million, respectively, and our sales to B-C Equipment Sales, Inc. totaled approximately less than $10 thousand, $0.1 million and $0.2 million, respectively. (16) Segment Information We have identifieff d five reportabla e segments: equipment rentals, sales of rental equipment, sales of new equipment, parts sales and service revenues. These segments are based upon revenue streams and how management of the Company allocates resources and assesses performance. Our non-segmented other revenues and costs relate primarily to ancillary charges associated with equipment repair services, and are not generally allocated to the 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 profitff are not generally allocated to our reportabla e segments. We do not compile discrete financial information by our segments other than the information presented below. The following tabla e presents information about our reportable segments (amounts in thousands): Years Ended December 31, 2022 2021 2023 Segment Revenues: Equipment rentals ................................................................. $ 1,186,152 165,074 Sales of rental equipment ..................................................... 39,099 Sales of new equipment........................................................ 47,341 Parts sales ............................................................................. 27,507 Services revenues ................................................................. 1,465,173 Total segmented revenues ................................................ 4,043 Non-Segmented other revenues................................................ Total revenues .............................................................. $ 1,469,216 $ 956,042 90,885 92,526 64,646 34,226 1,238,325 6,193 $ 1,244,518 $ 729,700 135,245 92,677 65,623 33,034 1,056,279 6,518 $ 1,062,797 Segment Gross Profit:ff Equipment rentals ................................................................. $ Sales of rental equipment ..................................................... Sales of new equipment........................................................ Parts sales ............................................................................. Services revenues ................................................................. from segmented revenues .................... Non-Segmented other gross loss .............................................. Total gross profitff Total gross profitff .......................................................... $ 553,439 99,891 5,530 13,142 16,831 688,833 (4,372) 684,461 $ $ 460,243 44,316 13,096 18,035 21,998 557,688 (2,525) 555,163 $ $ 315,629 48,922 11,855 17,277 21,797 415,480 (117) 415,363 December 31, 2023 2022 Segment identifieff d assets: Equipment rentals................................................................... $ 1,756,578 $ 1,418,951 94,918 Equipment sales...................................................................... Parts and service..................................................................... 12,924 1,526,793 Total segment identified assets .......................................... 764,906 Non-Segmented identifieff d assets ............................................... Total assets ..................................................................... $ 2,639,886 $ 2,291,699 98,045 11,886 1,866,509 773,377 72 The Company operates primarily in the United States. Our sales to international customers for the three years ended December 31, 2023 were 0.1% of total revenues. No one customer accounted for more than 10% of our total revenues for any of the periods presented. (17) Subsequent Events Effeff ctive January 1, 2024, afteff r the period covered by this report, we completed the acquisition of Precision Rentals (“Precision”) for a purchase price of $117.6 million in cash, before customaryrr adjud stments. Precision is a provider of non-residential construcr and industrial equipment and expands our presence with two branch locations operating in Arizona and Colorado. The acquisition and related fees and expenses were funded using availabla e cash and borrowings. As of Februarr fair value of the Precision purchase price had yet to be completed and consequently, including such disclosures in this annual report on Form 10-K is impractical. Disclosure of the allocation of the purchase price to the Precision balance sheet line items and the pro forma presentation reflecting the impact of the acquisition will be disclosed in our subsu equent Form 10-Q filing. ry 22, 2024, a preliminaryrr allocation of the tion On Februar business on Februar ry 9, 2024, the Company declared a quarterly dividend of $0.275 per share to stockholders of record as of the close of ry 23, 2024, which is to be paid on March 15, 2024. 73 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. Item 9A. Controls and Procedures Disclosure Controls and Procedures. We maintain disclosure controls and procedurd es that are designed to ensure that information required to be disclosed in the reports that the Company files or furnishes under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specifieff d in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Offiff cer and Chief Financial Offiff cer, as appropriate, to allow timely decisions regarding required financial disclosure. Our Chief Executive Offiff cer and Chief Financial Offiff cer (our principal executive offiff cer and principal financial offiff cer, respectively) have evaluated the effeff ctiveness of our disclosure controls and procedurd es (as defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Annual Report on Form 10-K. Based on this evaluation, our principal executive offiff cer and principal financial offiff cer have concluded that, as of December 31, 2023, our current disclosure controls and procedurd es were effeff ctive. 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 procedurd es may not deteriorate. Because of its inherent limitations, disclosure controls and procedurd es may not prevent or detect all misstatements. Accordingly, even effeff ctive disclosure controls and procedurd es can only provide reasonabla e assurance of achieving their control objectives. Changes in Internal Control Over Financial Reporting There were no changes in the Company’s internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f))ff that occurred during the fourth quarter ended December 31, 2023 that have materially affeff cted, or are reasonabla y likely to materially affeff ct, the Company’s internal control over financial reporting. 74 Management’s Report on Internal Control Over Financial Reporting The management of H&E Equipment Services, Inc. is responsible for establa ishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Our internal control system was designed to provide reasonabla e assurance regarding the reliability of financial reporting and the preparation of financial statements for external rr purpos es in accordance with U.S. generally accepted accounting principles. All internal control systems, no matter how well designed, have inherent limitations. Thereforff e, even those systems determined to be effeff ctive can provide only reasonabla e assurance with respect to financial statement preparation and presentation. Any evaluation or projection of effeff ctiveness to future periods is also subju ect to risk that controls may become inadequate due to changes in conditions, or that the degree of compliance with the policies and procedurd es may deteriorate. Under the supeu rvision and with the participation of management, including our Chief Executive Offiff cer and Chief Financial Offiff cer, we conducted an evaluation of the effeff ctiveness of our internal control over financial reporting as of December 31, 2023, based on the framework in Internal Control – Integre ated Frameworkrr (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on that evaluation, management concluded that, as of December 31, 2023, our internal control over financial reporting was effeff ctive based on these criteria. The effeff ctiveness of our internal control over financial reporting as of December 31, 2023, has been audited by BDO USA, P.C., an independent registered public accounting firm, as stated in their report, which is included herein. Date: Februar ry 22, 2024 /s/ Bradley W. Barber Bradley W. Barber Chief Executive Offiff cer and Director /s/ Leslie S. Magee Leslie S. Magee Chief Financial Offiff cer and Secretaryrr 75 Report of Independent Registered Public Accounting Firm Shareholders and Board of Directors H&E Equipment Services, Inc. Baton Rouge, Louisiana Opinion on Internal Control over Financial Reporting We have audited H&E Equipment Services, Inc.’s (the “Company’s”) internal control over financial reporting as of December 31, 2023, based on criteria establa ished in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”). In our opinion, the Company maintained, in all material respects, effeff ctive internal control over financial reporting as of December 31, 2023, based on the COSO criteria. We also have audited, in accordance with the standards of the Publu ic Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and schedule of valuation and qualifyiff ng accounts and our report dated Februarr ry 22, 2024 expressed an unqualifieff d opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effeff ctive internal control over financial reporting and for its assessment of the effeff ctiveness of internal control over financial reporting, included in the accompanying Item 9A, Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonabla e assurance about whether effeff ctive internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effeff ctiveness of internal control based on the assessed risk. Our audit also included performing such other procedurd es as we considered necessary in the circumstances. We believe that our audit provides a reasonabla e basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonabla e assurance regarding the reliability of financial reporting and the preparation of financial statements for external purpos es in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedurd es that (1) pertain to the maintenance of records that, in reasonabla e detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonabla e assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonabla e assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effeff ct on the financial statements. r Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effeff ctiveness to future periods are subju ect to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedurd es may deteriorate. /s/ BDO USA, P.C. Dallas, Texas Februar ry 22, 2024 76 Item 9B. Other Information During the fiscal quarter ended December 31, 2023, no director or offiff cer of the Company adopted or terminated a "RulRR e 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as the terms are defined in Item 408(a) of Regulation S-K. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. PART III Item 10. Directors, Executive Offiff cers and Corporate Governance The information required by this Item is incorporated herein by reference from the Company’s definitive proxy statement for use r the end of the in connection with the 2024 Annual Meeting of Stockholders (the “Proxy Statement”) to be filed within 120 days afteff Company’s fiscal year ended December 31, 2023. We have adopted a code of conducd t that applies to our Chief Executive Offiff cer and Chief Financial Offiff cer. This code of conduct is availabla e on the Company’s internet website at www.he-equipment.com. The information on our website is not a part of or q p incorporated by reference into this Annual Report on Form 10-K. If the Company makes any amendments to this code other than technical, administrative or other non-subsu tantive amendments, or grants any waivers, including implicit waivers, from a provision of this code to the Company’s Chief Executive Offiff cer or Chief Financial Offiff cer, the Company will disclose the nature of the amendment or waiver, its effeff ctive date and to whom it applies by posting such information on the Company’s internet website at q p www.he-equipment.com. Item 11. Executive Compensation The information required by this Item is incorporated herein by reference from the Proxy Statement. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this Item is incorporated herein by reference from the Proxy Statement. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this Item is incorporated herein by reference from the Proxy Statement. Item 14. Principal Accountant Fees and Services The information required by this Item is incorporated herein by reference from the Proxy Statement. 77 PART IV Item 15. Exhibits and Financial Statement Schedules (a) Documents filed as part of this report: (1) Financial Statements The Company’s Consolidated Financial Statements listed below have been filed as part of this report: Report of Independent Registered Publu ic Accounting Firm—Imm nternal Control over Financial Reporting.................................... Report of Independent Registered Publu ic Accounting Firm—Cmm onsolidated Financial Statements............................................... Consolidated Balance Sheets as of December 31, 2023 and 2022................................................................................................. Consolidated Statements of Income for the years ended December 31, 2023, 2022 and 2021 ..................................................... Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2023, 2022 and 2021 ............................... Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021 .............................................. Notes to Consolidated Financial Statements .................................................................................................................................. Page 76 41 43 44 45 46 48 (2) Financial Statement Schedule for the years ended December 31, 2023, 2022 and 2021: Schedule II—Valuation and Qualifyiff ng Accounts......................................................................................................................... 81 All other schedules are omitted because they are not applicable or not required, or the information appears in the Company’s Consolidated Financial Statements or notes thereto. (3) Exhibits: The exhibits to this report are listed in the exhibit index below. (b) Description of exhibits 78 2.1 2.2 2.3 2.4 3.1 3.2 4.1 4.2 4.3 4.4 4.5 4.6 10.1 10.2 Exhibit Index Agreement and Plan of Merger, dated Februarr reference to Exhibit 2.1 to Current Report on Form 8-K of H&E Equipment Services, Inc. (File No. 000-51759), filed Februar ry 2, 2006, among the Company, H&E LLC and Holdings (incorpor ry 3, 2006). rated by Agreement and Plan of Merger, dated as of May 15, 2007, by and among H&E Equipment Services, Inc., HE-JWB Acquisition, Inc., J.W. Burress, Incorporated, the Burress Shareholders (as defined therein), and Richard S. Dudley, as Burress Shareholders Representative (as defined therein) (incorpor ated by reference to Exhibit 2.1 to Current Report on Form 8-K of H&E Equipment Services, Inc. (File No. 000-51759), filed on May 17, 2007. r Amendment No. 1 to Agreement and Plan of Merger, dated as of August 31, 2007, by and among H&E Equipment Services, Inc., HE-JWB Acquisition, Inc., J.W. Burress, Incorporated, the Burress Shareholders (as defined therein), and Richard S. Dudley, as Burress Shareholders Representative (as defined therein) (incorpor Current Report on Form 8-K of H&E Equipment Services, Inc. (File No. 000-51759), filed on September 4, 2007). ated by reference to Exhibit 2.1 to rr , Eagle Acquisition Agreement, dated as of January 4, 2005, among H&E Equipment Services, L.L.C., Eagle Merger Corp.rr High Reach Equipment, LLC, Eagle High Reach Equipment, Inc., SBN Eagle LLC, SummitBridge National Investments, LLC and the shareholders of Eagle High Reach Equipment, Inc. (incorpor ated by reference to Exhibit 2.1 to Form 8-K of H&E Equipment Services L.L.C. (File Nos. 333-99587 and 333-99589), filed January 5, 2006). r Amended and Restated Certificff ate of Incorporation of H&E Equipment Services, Inc. (incorpor 3.4 to Registration Statement on Form S-1 of H&E Equipment Services, Inc. (File No. 333-128996), filed January 20, 2006). ated by reference to Exhibit rr Amended and Restated Bylaws of the Company, dated as of March 13, 2023 (incorpor the Current Report on Form 8-K of H&E Equipment Services Inc. (File No. 000-51759), filed on March 14, 2023). ated by reference to Exhibit 3.1 to r Amended and Restated Security Holders Agreement, dated as of Februarr parties thereto (incorpor (File No. 000-51759), filed Februar ry 3, 2006, among the Company and certain other ated by reference to Exhibit 4.1 to Current Report on Form 8-K of H&E Equipment Services, Inc. ry 3, 2006). r Amended and Restated Investor Rights Agreement, dated as of Februar parties thereto (incorpor (File No. 000-51759), filed Februar ry 3, 2006). r ated by reference to Exhibit 4.2 to Current Report on Form 8-K of H&E Equipment Services, Inc. ry 3, 2006, among the Company and certain other Amended and Restated Registration Rights Agreement, dated as of Februarr other parties thereto (incorpor Inc. (File No. 000-51759), filed Februarr ry 3, 2006). r ated by reference to Exhibit 4.3 to Current Report on Form 8-K of H&E Equipment Services, ry 3, 2006, among the Company and certain Form of H&E Equipment Services, Inc. common stock certificate (incorpor Statement on Form S-1 of H&E Equipment Services, Inc. (File No. 333-128996), filed January 5, 2006). ated by reference to Exhibit 4.3 to Registration r Indenturt e, dated December 14, 2020, by and among H&E Equipment Services, Inc., the guarantors party thereto and The Bank of New York Mellon Trusr tee, relating to the 3.8750% Senior Notes due 2028 (incorpor by reference to Exhibit 4.1 to the Current Report on Form 8-K of H&E Equipment Services, Inc. (File No. 000-51759), filed December 16, 2020). t Company, N.A, as Trusrr r ated Description of H&E Equipment Services, Inc.’s Common Stock (incorpor Report on Form 10-K of H&E Equipment Services, Inc. (File No. 000-51759), filed Februar r ated by reference to Exhibit 4.6 to Annual ry 22, 2023). Fifth Amended and Restated Credit Agreement, dated December 22, 2017, by and among the Company, Great Northern Equipment, Inc., H&E Equipment Services (Califorff nia), LLC and H&E Equipment Services (Mid-Atlantic), Inc. (collectively, the “Borrowers”), Wells Fargo Capia tal Finance, LLC, as administrative agent for each member of the Lender Group and the Bank Product Providers, and the joint lead arrangers, joint book runners, co-syndication agents and documentation agent party thereto (incorpor Equipment Services, Inc. (File No. 000-51759), filed December 27, 2017). ated by reference to Exhibit 10.1 to the Current Report on Form 8-K of H&E rr First Amendment to the Fifth Amended and Restated Credit Agreement, dated Februar Company, Great Northern Equipment, Inc., H&E Equipment Services (Califorff nia), LLC and H&E Equipment Services (Mid-Atlantic), Inc. (collectively, the “Borrowers”), Wells Fargo Capia tal Finance, LLC, as administrative agent for each member of the Lender Group and the Bank Producd t Providers, and the joint lead arrangers, joint book runners, co- syndication agents and documentation agent party thereto (incorpor on Form 8-K of H&E Equipment Services, Inc. (File No. 000-51759, filed Februarr ated by reference to Exhibit 10.1 to the Current Report ry 1, 2019, by and among the ry 4, 2019). r 79 10.3 10.4 10.5 10.6 10.7 10.8 10.9 18.1 21.1 23.1 31.1 31.2 32.1 Second Amendment to the Fifth Amended and Restated Credit Agreement, dated September 14, 2021, by and among the Company, Great Northern Equipment, Inc., H&E Equipment Services (Califorff nia), LLC and H&E Equipment Services (Mid-Atlantic), Inc. (collectively, the “Borrowers”), Wells Fargo Bank National Association, as administrative agent for each member of the Lender Group and the Bank Producd t Providers, and the joint lead arrangers, joint book runners, co- syndication agents and documentation agent party thereto (incorpor ated by reference from Exhibit 10.1 to Form 10-Q of H&E Equipment Services, Inc. (File No. 000-51759), filed November 2, 2021). r Sixth Amended and Restated Credit Agreement, dated Februarr Equipment, Inc., H&E Equipment Services (Califorff nia), LLC, H&E Equipment Services (Midwest), Inc. and H&E Equipment Services (Mid-Atlantic), Inc. (collectively, the “Borrowers”), Wells Fargo Bank, National Association, as administrative agent for each member of the Lender Group and the Bank Product Providers, and the joint lead arrangers, joint book runners, co-syndication agents and documentation agent party thereto (incorpor to Form 10-K of H&E Equipment Services, Inc. (File No. 000-51759), filed Februar ry 2, 2023, by and among the Company, Great Northern ated by reference to Exhibit 10.4 ry 22, 2023). rr H&E Equipment Services, Inc. 2016 Stock-Based Incentive Compensation Plan (incorpor to the Definitive Proxy Statement of H&E Equipment Services, Inc. (File No. 000-51759), filed April 1, 2016.† ated by reference to Appendix A r Form of Restricted Stock Award Agreement for Offiff cers of H&E Equipment Services, Inc. (incorpor ated by reference from Exhibit 10.1 to Form 10-Q of H&E Equipment Services, Inc. (File No. 000-51759), filed November 3, 2011). † r Restrictive Covenant Agreement, dated August 14, 2015, by and between the Company and Bradley W. Barber r (incorpor October 29, 2015). † ated by reference to Exhibit 10.1 to Form 10-Q of H&E Equipment Services, Inc. (File No. 000-51759), filed Restrictive Covenant Agreement, dated October 12, 2015, by and between the Company and Leslie S. Magee r (incorpor Februar ated by reference to Exhibit 10.12 to Form 10-K of H&E Equipment Services, Inc. (File No. 000-51579), filed on ry 25, 2016).† Restrictive Covenant Agreement, dated March 4, 2022, by and between the Company and John McDowell Engquist (incorpor r April 27, 2022).† ated by reference to Exhibit 10.1 to Form 10-Q of H&E Equipment Services, Inc. (File No. 000-51579), filed on BDO Seidman, LLP Preferff ability Letter (incorpor Services, Inc. (File No. 000-51759), filed March 7, 2008). rr ated by reference to Exhibit 18.1 to Form 10-K of H&E Equipment Subsu idiaries of the registrant.* Consent of BDO USA, P.C.* Certificff ation Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* Certificff ation Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* Certificff ations of Chief Executive Offiff cer and Chief Financial Offiff cer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** 97 Clawback policy of H&E Equipment Services, Inc. filed Februar ry 22, 2024.* 101.INS Inline XBRL Instance Document* 101.SCH Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents* 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) * Filed herewith ** Furnished herewith †Management contract or compensatory plan or arrangement 80 Item 16. Form 10-K Summary None. SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021 (Amounts in thousands) Description Year Ended December 31, 2023 Allowance for doubtful accounts receivable ................................ $ Allowance for inventoryrr obsolescence ......................................... $ Year Ended December 31, 2022 Allowance for doubtful accounts receivable ................................ $ Allowance for inventoryrr obsolescence ......................................... $ Year Ended December 31, 2021 Allowance for doubtful accounts receivable (a) ........................... $ Allowance for inventoryrr obsolescence (b) ................................... $ Balance at Beginning of Year Additions Charged to Costs and Expenses Deductions Balance at End of Year 6,637 54 6,691 4,178 73 4,251 4,741 350 5,091 $ $ $ $ $ $ 4,858 178 5,036 3,264 32 3,296 1,892 54 1,946 $ $ $ $ $ $ (4,369) (25) (4,394) (805) (51) (856) (2,455) (331) (2,786) $ $ $ $ $ $ 7,126 207 7,333 6,637 54 6,691 4,178 73 4,251 a) b) Allowance for doubtful accounts receivables includes $252 related to discontinued operations for the balance at the beginning of the year ended December 31, 2021. Allowance for inventoryrr obsolescence includes $120 related to discontinued operations for the balance at the beginning of the year ended December 31, 2021. 81 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on Februar ry 22, 2024. SIGNATURES H&E EQUIPMENT SERVICES, INC. By: /s/ Bradley W. Barber Bradley W. Barber Its: Chief Executive Offiff cer and Director Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated. Signature Capacity Date By: By: By: By: By: By: By: By: By: By: By: By: /s/ Bradley W. Barber Bradley W. Barber /s/ Leslie S. Magee Leslie S. Magee /s/ John M. Engquist John M. Engquist /s/ Paul N. Arnold Paul N. Arnold /s/ Gary W. Bagley Gary W. Bagley Chief Executive Offiff cer and Director (Principal Executive Offiff cer) Chief Financial Offiff cer and Secretaryrr (Principal Financial and Accounting Offiff cer) Februar ry 22, 2024 Februar ry 22, 2024 Executive Chairman of the Board Februaryrr 22, 2024 Director Februar ry 22, 2024 Lead Independent Director Februar ry 22, 2024 /s/ Brucr Brucrr e C. Brucr kmann e C. Brucr kmann /s/ Patrick L. Edsell Patrick L. Edsell /s/ Thomas J. Galligan III Thomas J. Galligan III /s/ Lawrence C. Karlson Lawrence C. Karlson /s/ Mary Pat Thompson Mary Pat Thompson /s/ Jacob Thomas Jacob Thomas /s/ Suzanne H. Wood Suzanne H. Wood Februaryrr 22, 2024 Februaryrr 22, 2024 Februaryrr 22, 2024 Februaryrr 22, 2024 Februar ry 22, 2024 Februar ry 22, 2024 Februar ry 22, 2024 Director Director Director Director Director Director Director 82 H&E Equipment Services, Inc. Supplu emental Schedules Non-GAAP Financial Measures This Annual Report contains certain non-GAAP measures (EBITDA and Adjud sted EBITDA) as defined under the rules of the Securities and Exchange Commission ("SEC"). We define Adjud sted EBITDA for the periods presented as EBITDA adjud sted for non-cash stock-based compensation expense, the impairment of goodwill, merger and other and the loss on early extinguishment of debt. u We use EBITDA and Adjud sted EBITDA in our business operations to, among other things, evaluate the performance of our business, develop budgets and measure our performance against those budgets. We also believe that analysts and investors use EBITDA and Adjud sted EBITDA as suppl emental measures to evaluate a company’s overall operating performance. However, EBITDA and Adjud sted EBITDA have material limitations as analytical tools and you should not consider them in isolation, or as subsu titutes for analysis of our results as reported under GAAP. We consider them usefulff tools to assist us in evaluating performance because it eliminates items related to components of our capital structure, taxes and non-cash charges. The items that we have eliminated in determining EBITDA for the periods presented are interest expense, income taxes, depreciation of fixed assets (which includes rental equipment and property and equipment) and amortization of intangible assets and, in the case of Adjud sted EBITDA, any other non- recurring items described above applicable to the particular period. However, some of these eliminated items are significff ant to our business. For example, (i) interest expense is a necessary element of our costs and ability to generate revenue because we incur a significant amount of interest expense related to our outstanding indebtedness; (ii) payment of income taxes is a necessary element of our costs; and (iii) depreciation is a necessary element of our costs and ability to generate revenue because rental equipment is the single largest component of our total assets and we recognize a significant amount of depreciation expense over the estimated usefulff lifeff of this equipment. Any measure that eliminates components of our capital structure and costs associated with carrying significant amounts of fixed assets on our consolidated balance sheet has material limitations as a performance measure. In light of the foregoing limitations, we do not rely solely on EBITDA and Adjud sted EBITDA as performance measures and also consider our GAAP results. EBITDA and Adjud sted EBITDA are not measurements of our financial performance or liquidity under GAAP and, accordingly, should not be considered alternatives to net income, operating income or any other measures derived in accordance with GAAP. Because EBITDA and Adjud sted EBITDA may not be calculated in the same manner by all companies, these measures may not be comparable to other similarly titled measures used by other companies. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the table below. H&E Equipment Services, Inc. Supplu emental Schedules H&E EQUIPMENT SERVICES, INC. UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Amounts in thousands) Year Ended December 31, 2023 2022 2021 2020 Net Income (Loss) Net Income (Loss) from discontinued operations Net Income (Loss) from continuing operations Interest Expense Provision (benefit)ff Depreciation Amortization of intangibles for income taxes $ $ 169,293 — 169,293 60,891 53,904 381,959 6,455 $ 132,170 (1,524) 133,694 54,033 47,036 296,310 4,660 102,540 41,976 60,564 53,758 21,160 254,158 3,970 $ (32,667) 13,729 (46,396) 61,790 (13,428) 252,681 3,987 EBITDA from continuing operations $ 672,502 $ 535,733 $ 393,610 $ 258,634 Impairment of goodwill Loss on early extinguishment of debt Non-cash stock-based compensation expense Merger and other 5,714 — 10,026 — — — 7,263 — — — — — 55,664 44,630 — 503 Adjud sted EBITDA from continuing operations $ 688,242 $ 542,996 $ 393,610 $ 359,431 CORPORATE INFORMATION Board of Directors John M. Engquist Executive Chairman Bruce C. Bruckmann (cid:43)(cid:80)(cid:89)(cid:76)(cid:74)(cid:91)(cid:86)(cid:89)(cid:3) Bradley W. Barber (cid:42)(cid:79)(cid:80)(cid:76)(cid:77)(cid:3)(cid:44)(cid:95)(cid:76)(cid:74)(cid:92)(cid:91)(cid:80)(cid:93)(cid:76)(cid:3)(cid:54)(cid:585)(cid:74)(cid:76)(cid:89)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:43)(cid:80)(cid:89)(cid:76)(cid:74)(cid:91)(cid:86)(cid:89) Patrick L. Edsell (cid:43)(cid:80)(cid:89)(cid:76)(cid:74)(cid:91)(cid:86)(cid:89) Paul N. Arnold (cid:43)(cid:80)(cid:89)(cid:76)(cid:74)(cid:91)(cid:86)(cid:89) Gary W. Bagley (cid:51)(cid:76)(cid:72)(cid:75)(cid:3)(cid:48)(cid:85)(cid:75)(cid:76)(cid:87)(cid:76)(cid:85)(cid:75)(cid:76)(cid:85)(cid:91)(cid:3)(cid:43)(cid:80)(cid:89)(cid:76)(cid:74)(cid:91)(cid:86)(cid:89) Management John M. Engquist Executive Chairman Thomas J. Galligan III (cid:43)(cid:80)(cid:89)(cid:76)(cid:74)(cid:91)(cid:86)(cid:89) Lawrence C. Karlson (cid:43)(cid:80)(cid:89)(cid:76)(cid:74)(cid:91)(cid:86)(cid:89) John McDowell Engquist President and Chief (cid:54)(cid:87)(cid:76)(cid:89)(cid:72)(cid:91)(cid:80)(cid:85)(cid:78)(cid:3)(cid:54)(cid:585)(cid:74)(cid:76)(cid:89)(cid:3) Bradley W. Barber (cid:42)(cid:79)(cid:80)(cid:76)(cid:77)(cid:3)(cid:44)(cid:95)(cid:76)(cid:74)(cid:92)(cid:91)(cid:80)(cid:93)(cid:76)(cid:3)(cid:54)(cid:585)(cid:74)(cid:76)(cid:89)(cid:3) (cid:72)(cid:85)(cid:75)(cid:3)(cid:43)(cid:80)(cid:89)(cid:76)(cid:74)(cid:91)(cid:86)(cid:89)(cid:3) Leslie S. Magee (cid:42)(cid:79)(cid:80)(cid:76)(cid:77)(cid:3)(cid:45)(cid:80)(cid:85)(cid:72)(cid:85)(cid:74)(cid:80)(cid:72)(cid:83)(cid:3)(cid:54)(cid:585)(cid:74)(cid:76)(cid:89)(cid:3)(cid:72)(cid:85)(cid:75) Secretary Corporate Office Investor Relations Contact H&E Equipment Services, Inc. 7500 Pecue Lane Baton Rouge, Louisiana 70809 (225) 298-5200 www.he-equipment.com Jeffrey L. Chastain Vice President of Investor Relations H&E Equipment Services, Inc. (225) 952-2308 (cid:81)(cid:74)(cid:79)(cid:72)(cid:90)(cid:91)(cid:72)(cid:80)(cid:85)(cid:39)(cid:79)(cid:76)(cid:20)(cid:76)(cid:88)(cid:92)(cid:80)(cid:87)(cid:84)(cid:76)(cid:85)(cid:91)(cid:21)(cid:74)(cid:86)(cid:84) Stock Transfer Agent H&E Equipment Services, Inc. Stock Symbol: HEES (cid:58)(cid:91)(cid:86)(cid:74)(cid:82)(cid:3)(cid:59)(cid:89)(cid:72)(cid:75)(cid:76)(cid:75)(cid:3)(cid:86)(cid:85)(cid:3)(cid:53)(cid:40)(cid:58)(cid:43)(cid:40)(cid:56)(cid:3) (cid:46)(cid:83)(cid:86)(cid:73)(cid:72)(cid:83)(cid:3)(cid:52)(cid:72)(cid:89)(cid:82)(cid:76)(cid:91) Computershare P.O. Box 43006 Providence, RI 02940-3006 (cid:94)(cid:76)(cid:73)(cid:21)(cid:88)(cid:92)(cid:76)(cid:89)(cid:80)(cid:76)(cid:90)(cid:39)(cid:74)(cid:86)(cid:84)(cid:87)(cid:92)(cid:91)(cid:76)(cid:89)(cid:90)(cid:79)(cid:72)(cid:89)(cid:76)(cid:21)(cid:74)(cid:86)(cid:84) www.computershare.com/investor About the cover (cid:47)(cid:13)(cid:44)(cid:187)(cid:90)(cid:3)(cid:79)(cid:76)(cid:72)(cid:93)(cid:96)(cid:3)(cid:76)(cid:72)(cid:89)(cid:91)(cid:79)(cid:84)(cid:86)(cid:93)(cid:80)(cid:85)(cid:78)(cid:3)(cid:76)(cid:88)(cid:92)(cid:80)(cid:87)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3)(cid:80)(cid:90)(cid:3)(cid:75)(cid:76)(cid:87)(cid:83)(cid:86)(cid:96)(cid:76)(cid:75)(cid:3)(cid:86)(cid:85)(cid:3)(cid:72)(cid:3)(cid:89)(cid:86)(cid:72)(cid:75)(cid:3)(cid:76)(cid:95)(cid:87)(cid:72)(cid:85)(cid:90)(cid:80)(cid:86)(cid:85)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:87)(cid:72)(cid:93)(cid:76)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3) (cid:87)(cid:89)(cid:86)(cid:81)(cid:76)(cid:74)(cid:91)(cid:3)(cid:80)(cid:85)(cid:3)(cid:80)(cid:91)(cid:90)(cid:3)(cid:79)(cid:86)(cid:84)(cid:76)(cid:91)(cid:86)(cid:94)(cid:85)(cid:3)(cid:86)(cid:77)(cid:3)(cid:41)(cid:72)(cid:91)(cid:86)(cid:85)(cid:3)(cid:57)(cid:86)(cid:92)(cid:78)(cid:76)(cid:19)(cid:3)(cid:51)(cid:40)(cid:21)(cid:3)(cid:44)(cid:72)(cid:89)(cid:91)(cid:79)(cid:84)(cid:86)(cid:93)(cid:80)(cid:85)(cid:78) (cid:76)(cid:88)(cid:92)(cid:80)(cid:87)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3)(cid:72)(cid:74)(cid:74)(cid:86)(cid:92)(cid:85)(cid:91)(cid:76)(cid:75)(cid:3)(cid:77)(cid:86)(cid:89)(cid:3) (cid:72)(cid:87)(cid:87)(cid:89)(cid:86)(cid:95)(cid:80)(cid:84)(cid:72)(cid:91)(cid:76)(cid:83)(cid:96)(cid:3)(cid:25)(cid:30)(cid:12)(cid:3)(cid:86)(cid:77)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:42)(cid:86)(cid:84)(cid:87)(cid:72)(cid:85)(cid:96)(cid:187)(cid:90)(cid:3)(cid:86)(cid:89)(cid:80)(cid:78)(cid:80)(cid:85)(cid:72)(cid:83)(cid:3)(cid:76)(cid:88)(cid:92)(cid:80)(cid:87)(cid:84)(cid:76)(cid:85)(cid:91)(cid:3)(cid:74)(cid:86)(cid:90)(cid:91)(cid:3)(cid:72)(cid:90)(cid:3)(cid:86)(cid:77)(cid:3)(cid:43)(cid:76)(cid:74)(cid:76)(cid:84)(cid:73)(cid:76)(cid:89)(cid:3)(cid:26)(cid:24)(cid:19)(cid:3)(cid:25)(cid:23)(cid:25)(cid:26)(cid:21) Jacob Thomas (cid:43)(cid:80)(cid:89)(cid:76)(cid:74)(cid:91)(cid:86)(cid:89) Mary P. Thompson (cid:43)(cid:80)(cid:89)(cid:76)(cid:74)(cid:91)(cid:86)(cid:89) Suzanne H. Wood (cid:43)(cid:80)(cid:89)(cid:76)(cid:74)(cid:91)(cid:86)(cid:89) Form 10-K (cid:40)(cid:3)(cid:74)(cid:86)(cid:87)(cid:96)(cid:3)(cid:86)(cid:77)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:40)(cid:85)(cid:85)(cid:92)(cid:72)(cid:83)(cid:3) (cid:57)(cid:76)(cid:87)(cid:86)(cid:89)(cid:91)(cid:3)(cid:86)(cid:85)(cid:3)(cid:45)(cid:86)(cid:89)(cid:84)(cid:3)(cid:24)(cid:23)(cid:20)(cid:50)(cid:3) (cid:77)(cid:86)(cid:89)(cid:3)(cid:196)(cid:90)(cid:74)(cid:72)(cid:83)(cid:3)(cid:96)(cid:76)(cid:72)(cid:89)(cid:3)(cid:76)(cid:85)(cid:75)(cid:76)(cid:75)(cid:3) (cid:43)(cid:76)(cid:74)(cid:76)(cid:84)(cid:73)(cid:76)(cid:89)(cid:3)(cid:26)(cid:24)(cid:19)(cid:3)(cid:25)(cid:23)(cid:25)(cid:26)(cid:19)(cid:3) is included with this (cid:40)(cid:85)(cid:85)(cid:92)(cid:72)(cid:83)(cid:3)(cid:57)(cid:76)(cid:87)(cid:86)(cid:89)(cid:91)(cid:21)(cid:3)(cid:40)(cid:3)(cid:74)(cid:86)(cid:87)(cid:96)(cid:3) (cid:86)(cid:77)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3)(cid:40)(cid:85)(cid:85)(cid:92)(cid:72)(cid:83)(cid:3)(cid:57)(cid:76)(cid:87)(cid:86)(cid:89)(cid:91)(cid:3)(cid:86)(cid:85) (cid:45)(cid:86)(cid:89)(cid:84)(cid:3)(cid:24)(cid:23)(cid:20)(cid:50)(cid:19)(cid:3)(cid:196)(cid:83)(cid:76)(cid:75)(cid:3)(cid:94)(cid:80)(cid:91)(cid:79)(cid:3)(cid:91)(cid:79)(cid:76)(cid:3) Securities and Exchange Commission, is available by contacting H&E Equipment Services, Inc., Investor Relations, 7500 Pecue Lane, (cid:41)(cid:72)(cid:91)(cid:86)(cid:85)(cid:3)(cid:57)(cid:86)(cid:92)(cid:78)(cid:76)(cid:19)(cid:3)(cid:51)(cid:40)(cid:3)(cid:30)(cid:23)(cid:31)(cid:23)(cid:32)(cid:21) (cid:59)(cid:79)(cid:76)(cid:3)(cid:40)(cid:85)(cid:85)(cid:92)(cid:72)(cid:83)(cid:3)(cid:57)(cid:76)(cid:87)(cid:86)(cid:89)(cid:91)(cid:19)(cid:3)(cid:45)(cid:86)(cid:89)(cid:84)(cid:3) (cid:24)(cid:23)(cid:20)(cid:50)(cid:3)(cid:72)(cid:85)(cid:75)(cid:3)(cid:86)(cid:91)(cid:79)(cid:76)(cid:89)(cid:3)(cid:196)(cid:85)(cid:72)(cid:85)(cid:74)(cid:80)(cid:72)(cid:83) information are available at www.he-equipment.com under the “Investor Relations” tab. H&E Equipment Services, Inc. 7500 Pecue Lane Baton Rouge, Louisiana 70809 (225) 298-5200 www.he-equipment.com 

Continue reading text version or see original annual report in PDF format above