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

FORM 10-K

Commission file numbers: 333-99587
                                               333-99589

H&E EQUIPMENT SERVICES L.L.C.
(Exact name of registrant as specified in its charter)

Securities registered pursuant to Section 12(b) of the Act:
NONE

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

        Indicate by check mark if delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ý

        Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes o    No ý

        The aggregate market value of the Registrant's voting stock held by non-affiliates of the Registrant: Not applicable

        H&E Holdings L.L.C. owns 100% of the registrant's limited liability company interests.

DOCUMENTS INCORPORATED BY REFERENCE

        Certain exhibits filed with the Registrant's Registration Statements on Form S-4 (File Nos. 333-99587 and 333-99589, as amended) are incorporated by reference into Part III of the Report on Form 10-K.

TABLE OF CONTENTS

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Forward-Looking Statements

        Certain statements in our Annual Report on Form 10-K for the year ended December 31, 2003 are forward-looking statements, including, without limitation, statements regarding future financial results and performance, potential sales revenue, legal contingencies and tax benefits. These statements are subject to various risks and uncertainties, many of which are outside of our control, including the level of market demand for our products, competitive pressures, the ability to achieve reductions in operating costs, environmental matters, the application of federal and state tax laws and regulations, and other specific factors discussed herein and in other Securities and Exchange Commission (SEC) filings by us. The information contained herein represents our best judgment as of the date hereof based on information currently available; however, we do not intend to update this information except as required by law, to reflect development or information obtained after the date hereof and disclaim any legal obligation to the contrary

        We make available on our internet website free of charge our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and the amendments to such reports as soon as practicable after we electronically file such reports with the SEC. Our website address is www.he-equipment.com. The information contained in our website is not incorporated by reference in the Report.

PART I

Item 1.    Business

Overview

        H&E Equipment Services L.L.C. and its subsidiaries (as used herein, the "Company", "H&E Equipment Services", "we", "us" and "our") is one of the largest integrated equipment rental, sales and service companies in the United States of America (United States). Unlike many of our competitors, which focus primarily on renting equipment, we also sell new and used equipment and provide extensive parts and service support. This integrated model enables us to effectively manage key aspects of our rental fleet through reduced equipment acquisition costs, efficient maintenance and profitable disposition of rental fleet equipment. Over the past 41 years, we have built an infrastructure that includes a network of 41 facilities, most of which have full-service capabilities, and a workforce that includes a highly-skilled group of nearly 500 service technicians and a distinct rental and equipment sales force. We generate a significant portion of our gross profit from our parts and service operations, which we believe, provides us with a more stable operating profile than companies that focus solely on renting equipment.

        Many of our competitors in the equipment rental market follow a generalist approach, renting a wide variety of equipment. We believe that customers prefer our specialized strategy which focuses our rental and sales activities on and organizes our personnel principally by four core types of equipment (i) aerial work platforms (ii) cranes (iii) earthmoving and (iv) lift trucks. We believe this strategy fills an important need in the market for specialized equipment knowledge, improves the effectiveness of our rental sales force and strengthens our customer relationships.

        We formed the Company in June 2002 through the combination of Head & Engquist Equipment, L.L.C. (H&E), a wholly-owned subsidiary of Gulf Wide Industries, L.L.C. (Gulfwide) and ICM Equipment Company L.L.C. (ICM), which were two leading, regional, integrated equipment rental, sales and service companies operating in contiguous geographical markets. In connection with the combination of H&E and ICM, they were merged with and into Gulf Wide Industries, L.L.C., the parent of H&E, which was renamed H&E Equipment Services L.L.C. H&E, founded in 1961, is located in the Gulf Coast region and operated 25 facilities, most of which were full-service, in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina and Texas. ICM, founded in 1971, operated in the fast-growing Intermountain region, and operated 16 facilities, most of which were full-service, in Arizona, Colorado, Idaho, Montana, New Mexico, Nevada, Texas and Utah.

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Industry Background

        The equipment market is comprised primarily of either pure rental equipment companies or manufacturer dealer / distributorship companies. We follow an integrated model renting, selling and servicing new and used equipment. In addition to renting equipment, we believe many of our customers purchase new and used equipment for their own fleets.

        According to Manfredi & Associates, a leading industry consultant, the United States total equipment industry (including rentals, new and used equipment sales, and parts and service) has grown from approximately $43 billion in annual revenues in 1990 to an estimated $71 billion in 2004, representing a compound annual growth rate of approximately 3.9%. In addition, the equipment rental industry alone has grown from approximately $6.5 billion in annual rental revenues in 1990 to approximately $23.5 billion in 2003, representing a compound annual growth rate of approximately 10.4%. As a result of a slowdown in the economy and construction in general, rental revenues have declined approximately $1.3 billion over the last two years. We believe the historical growth in rental revenues was principally due to increased outsourcing by construction and industrial companies as they recognized the economic benefits of renting rather than owning equipment. For example, customers can avoid making a significant capital investment during difficult economic times.

        We believe that despite the historical consolidation in the equipment industry, the equipment market is still 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.

Our Competitive Strengths

        We believe that we benefit from the following competitive strengths:

        Integrated Platform of Products and Services.    We believe that our integrated equipment rental, sales and service model provides us with (i) multiple points of customer contact; (ii) a diversified revenue stream; (iii) an effective method of managing our rental fleet through reduced equipment acquisition costs, efficient maintenance and profitable disposition of used equipment; and (iv) a more consistent performance throughout economic cycles. Key benefits that our integrated product and service offerings provide to our rental activities include:

•

Increasing Purchasing Power through Complementary New Equipment Sales. We have significant purchasing power because of our large volume purchases as both a renter and distributor of equipment.



•

Maintaining the High Quality of Our Large Rental Fleet. We believe that we operate one of the largest rental fleets in the Gulf Coast and Intermountain regions. As a result of our in-house capabilities, we maintain a constant and extensive fleet maintenance program.



•

Disposing of Our Used Rental Equipment through Our Rental Sales Network. We believe we have a strategic advantage by being able to profitably dispose of used equipment from our rental fleet through our own retail sales infrastructure, as compared to selling wholesale or through auctions. Our resale capabilities allow us to control the utilization and the age of our fleet, provide customers with a wider range of equipment options and leverage our equipment sales force infrastructure.

        High-Margin, Stable Parts and Service Business.    Our parts and service business is a key component of the integrated offering we provide to both our customers and our own rental fleet. We believe that our aftermarket parts and service operations are less sensitive to economic and business cycles and thus provide a more stable, recurring, high-margin stream of revenues.

        Well-Developed Infrastructure.    Over the past 41 years, we have built an infrastructure that includes a network of 41 facilities, most of which have full-service capabilities, and a workforce that includes a

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highly-skilled group of nearly 500 service technicians and a distinct and separate rental and equipment sales force. In addition, our well-developed infrastructure helps us to better serve national and multi-regional customers and provides an advantage when competing for fleet and project management business.

        Specialized, Four Core Types of Rental Fleet Equipment.    Our rental fleet includes over 13,000 units and consists of four core types of equipment:

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Aerial work platforms, such as scissor lifts, boom lifts and telescopic forklifts;



•

Cranes, such as rough-terrain cranes and lattice-boom cranes;



•

Earthmoving, such as loaders, backhoes, excavators and skidsteers; and



•

Lift trucks, such as pneumatic, cushion-tired and electric industrial fork lifts.

        Diverse Customer Base.    We serve more than 23,000 customers in the industrial and commercial markets, including construction and maintenance contractors, manufacturers, public utilities and municipalities.

        Experienced Management Team.    Senior management, led by Gary W. Bagley, our Chairman, and John M. Engquist, our President and Chief Executive Officer, have an average of 22 years of experience in the industry and an average of 15 years of experience with H&E or ICM.

Our Business Strategy

        Key components of our business strategy include:

        Leveraging the Integrated Equipment Rental Model.    Because our customers rarely just rent equipment, we believe that they value our integrated approach to addressing their equipment rental, sales and service needs. In addition to renting equipment, many of our customers purchase new and used equipment from us and utilize our extensive parts and service capabilities. We believe this integrated model helps us to develop and strengthen relationships with our customers.

        Specializing in Core Equipment Types.    Many of our competitors in the equipment rental market follow a generalist approach, renting a wide variety of equipment. We believe that customers generally prefer our integrated strategy, which focuses our rental and sales activities on and organize our personnel by our four core types of equipment: aerial work platforms, cranes, earthmoving and lift trucks.

        Leveraging Industry-Leading Parts and Service Operations.    Our parts and service business is an important part of our relationship with our suppliers and customers. Given their decreased project timelines and reliance on fewer pieces of equipment, we believe our customers increasingly place more importance on effective and timely parts and service support for their own fleet of equipment and for equipment they rent.

        Equipment Sharing Among Branches.    Our network of 41 branches gives the ability to transfer equipment to (i) more profitably utilize our equipment to meet demand in a particular geography, (ii) manage our fleet utilization by cross-selling used equipment from our rental fleet across our retail network, and (iii) improve our ability to service national and multi-regional customers. In 2003, we estimate that the sharing of equipment among branches accounted for approximately 7.9% or $12.2 million of our total rental revenue.

        Expanding Fleet Management Capabilities and Project Management Operations.    We intend to grow our revenues from fleet and project management services by leveraging our broad infrastructure, full-service capabilities and strong reputation for reliable service. End users, particularly industrial accounts (e.g. manufacturing, mining and distribution) for fleet management services and contractors

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for project management, increasingly outsource equipment management in order to focus on their core competencies, achieve cost reductions and take advantage or our economies of scale.

Products and Services

        Equipment Rentals.    We focus our rental activities on, and organize our personnel by, four core types of equipment (i) aerial work platforms; (ii) cranes; (iii) earthmoving; and (iv) lift trucks. We offer flexible rental terms, including daily, weekly and monthly rentals. We maintain a constant and extensive fleet maintenance program through our own in-house capabilities.

        Our rental fleet as of December 31, 2003 consists of over 13,000 units having an original acquisition cost (defined as the cost originally paid to manufacturers) of approximately $493.5 million. With our in-house service capabilities and extensive maintenance program, we believe our fleet is the best maintained and one of the newest in the industry with an approximate weighted average age of 41 months as of December 31, 2003.

        New Equipment Sales.    We are one of the leading distributors of new products for nationally-recognized manufacturers in our four core product lines. Typically under distribution agreements with these original equipment manufacturers (OEM), we have exclusive responsibility for particular products in selected markets, although manufacturers retain the right to appoint additional dealers and sell directly to national accounts and governmental agencies and can usually terminate the distribution agreements at any time upon written notice. We maintain an experienced equipment sales force of nearly 70 people. Our new equipment distribution infrastructure facilitates a large, high-quality product support operation, creates a higher level of partnering with manufacturers and adds a significant customer base which often leads to revenue from our rental, parts and service operations. The type of new equipment we sell varies by location.

        Used Equipment Sales.    We routinely sell used rental equipment in order to adjust the size and composition of our rental fleet in response to changing market conditions and to maintain a modern, high-quality fleet. We believe we have a strategic advantage by being able to profitably dispose of used equipment from our rental fleet through our own retail sales infrastructure, as compared to selling it wholesale or through auctions. Our resale capabilities allow us to (i) mange our rental fleet capital expenditures; (ii) control the utilization and the age of our fleet; (iii) provide customers with a wider range of equipment options; and (iv) leverage our equipment sales force infrastructure.

        Parts Sales and Service Revenue.    We sell a wide range of OEM's maintenance and replacement parts and related products as a complement to our core equipment rental and sales businesses. In our facilities, we maintain an extensive parts and merchandise inventory which we believe is important for timely parts and service support and helps minimize downtime for both the customer and us. We are generally able to acquire non-stock or out-of stock parts directly from manufacturers within one to two business days. Not only do we supply parts and general repair and maintenance service for the complete line of equipment we rent and sell, we also supply parts and service for equipment produced by competitive manufacturers whose products we neither rent nor sell.

        We employ nearly 500 highly-skilled service technicians. As part of our commitment to provide customers with knowledgeable parts assistance and high-quality service and repair options, we devote significant resources to training and retaining these technical service employees. A typical service employee will attend approximately 80 hours of training in the first year and 80-120 hours annually in subsequent years. We are able to attract and retain knowledgeable, highly-skilled service technicians due to our strong relationship with our service employees and ties to the communities. Our aftermarket service provides a high-margin, relatively stable source of revenue throughout changing economic cycles.

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Customers

        We serve more than 23,000 customers in the United States, primarily in the Intermountain West and Gulf Coast regions. Our customers include a wide range of industrial and commercial companies and construction contractors, manufacturers, public utilities, municipalities, maintenance contractors and a variety of other large industrial accounts. We believe that our integrated strategy enables us to satisfy customer requirements and increase revenue per customer through cross-selling opportunities presented by the various products and services that we offer. In addition to maintaining our historically strong relationship with local customers, our extensive, high-quality infrastructure allows us to focus on larger multi-regional and national accounts. Our new and used equipment sales customers vary from small, single machine owners to large contractors and industrial and commercial companies who typically operate under equipment and maintenance budgets.

Sales and Marketing

        We have two distinct and separate sales forces; one specializing in equipment rentals and one focused specifically on new and used equipment sales. We believe maintaining separate sales forces for equipment rental and sales is important to our customer service, allowing us to effectively meet the demands of different types of customers.

        Both our rental sales force and equipment sales force, together comprising over 150 people, are divided into smaller, product focused teams which enhances the development of in-depth product application and technical expertise. To further develop knowledge and experience, we provide our sales force with extensive training, including frequent factory and in-house training by manufacturer representatives regarding the operational features, operator safety training and maintenance of new equipment. This training is essential, as our sales personnel regularly call on contractors' job sites often assisting customers in assessing their immediate and ongoing equipment needs.

        While we believe that our specialized, well-trained sales force strengthens our customer relationships and fosters customer loyalty, we also promote our business through marketing and advertising, including industry publications, direct mail campaigns, the Internet and Yellow Pages. In addition, we have a commission-based compensation program for our sales force.

        We have implemented a national accounts program in order to develop national relationships and increase awareness of our extensive offering of industrial and construction equipment, ancillary products, parts and services. Under this program, a portion of our sales force is assigned to call on corporate headquarters of our large customers, particularly those with a national or multi-regional presence.

Suppliers

        We purchase a significant amount of equipment from the same manufacturers with whom we have distribution agreements. While we believe that we have alternative sources of supply for the equipment we purchase in each of our principal product categories, termination of one or more of our relationships with any of our major suppliers of equipment could have a material adverse effect on our business, financial condition or results of operation if we were unable to obtain adequate or timely rental and sales equipment.

Information Technology Systems

        We have developed information systems that track (i) rental inventory utilization statistics; (ii) maintenance and repair costs; (iii) returns on investment for specific equipment types; and (iv) detailed operational and financial information for each piece of equipment. We believe that this provides us with a competitive advantage over smaller independent rental companies which lack such systems. The point-of-sale aspect of the systems enables us to link all of our facilities, permitting

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universal access to real-time data concerning equipment located at the individual facility locations and the rental status and maintenance history for each piece of equipment. These business systems also include on-line contract generation, automated billing, local sales tax computation and automated rental purchase option calculation. In addition, we maintain an extensive customer database which allows us to monitor the status and maintenance history of our customers' owned-equipment and enables us to more effectively provide parts and service to meet their needs.

Competition

        The equipment rental industry is highly fragmented and competitive. Many of the markets in which we operate are served by numerous competitors, ranging from national and multi-regional equipment rental companies to small, independent businesses with a limited number of locations. We believe that participants in the equipment rental industry compete on the basis of availability and quality and breadth of equipment, expertise service, reliability, delivery and price. In general, we believe that large operators enjoy substantial competitive advantages over small, independent rental businesses that cannot afford to maintain the comprehensive rental equipment fleet and high level of maintenance and service we offer.

        The retail sales and distribution industry continues to be redefined through consolidation and competition. Traditionally, equipment manufacturers distributed their equipment and parts through a network of independent dealers with exclusive distribution agreements. As a result of the consolidation and competition, both manufacturers and distributors sought to streamline their operations, improve their costs and gain market share. Our established, integrated infrastructure enables us to compete directly with our competitors on either a local, regional or national basis. We believe customers place a greater emphasis on value-added services, teaming with equipment rental and sales companies who can meet all of their equipment, parts and service needs.

Environmental and Safety Regulations

        Our facilities and operations are subject to comprehensive and frequently changing federal, state and local environmental and occupational health and safety laws. These laws regulate (i) the handling, storage, use and disposal of hazardous materials and wastes and, if any, the associated cleanup of properties affected by pollutants; (ii) air quality; and (iii) wastewater. We do not currently anticipate any material adverse effect on our business or financial condition or competitive position as a result of our efforts to comply with our liability under such requirements. Although we have made and will continue to make capital and other expenditures to comply with environmental requirements, we do not expect to incur material capital expenditures for environmental controls or compliance.

        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, or effect a change in their enforcement of existing laws or regulations, that could effect our operations. Also, in the future, contamination may be found to exist at our facilities or off-site locations where we have sent wastes. There can be no assurance that we will not discover previously unknown environmental non-compliance or contamination. We could be held liable for such newly-discovered non-compliance or contamination. It is possible that changes in environmental and worker health and safety laws or liabilities from newly-discovered non-compliance or contamination could have a material adverse effect on our business, financial condition and results of operations.

Employees

        As of December 31, 2003, we had approximately 1,293 employees. Of these employees, 422 are salaried personnel and 871 are hourly personnel. Our employees perform the following functions: sales operations, parts operations, rental operations, technical service and office and administrative support. Collective bargaining agreements relating to three separate locations cover approximately 80 of our

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employees. We believe our relations with our employees are good and we have never experienced a work stoppage.

Factors That May Influence Future Results and Accuracy of Forward-Looking Statements

        Sensitivity to Changes in Construction and Industrial Risk Factors Activities.    Our equipment is principally used in connection with construction and industrial activities. Consequently, a downturn in construction or industrial activity may lead to a decrease in the demand of our equipment or depress rental rates and the sales prices for the equipment we sell. Below, we have identified certain of the factors which may cause such a downturn, either temporarily or long-term:

•

a continuation or a worsening of the recent slow-down of the economy over the long-term;



•

an increase in interest rates; or



•

adverse weather conditions which may affect a particular region.

        Fluctuating Operating Results.    Our revenue and operating results have historically varied from quarter to quarter or over the longer term. Periods of decline could result in an overall decline in profitability and make it more difficult for us to make payments on our debt. We expect that our quarterly or longer term results may fluctuate in the future due to a number of factors, including:

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seasonal sales and rental patterns of our construction customers, with sales and rental activity tending to be lower in the winter;



•

changes in general economic conditions in the markets where we operate;



•

cyclical nature of our customers' business, particularly our construction customers;



•

price changes in response to economic conditions, competition and other factors;



•

changes in interest rates applicable to our floating rate debt and manufacturer flooring plans payable;



•

increases in costs (including the cost of fuel which tends to fluctuate significantly); and



•

timing of acquisitions, new location openings and related costs, and closing existing locations and related costs.

        Substantial Indebtedness.    We have a substantial amount of debt. As of December 31, 2003, our total indebtedness (consisting of the aggregate amounts outstanding on the amended senior secured credit facility, senior secured notes, senior subordinated notes, and capital leases) was approximately $291.0 million, $44.0 million of which was first-priority secured debt and effectively senior to our senior secured notes and senior subordinated notes. In addition, subject to restrictions in our amended senior secured credit facility and the indentures governing the senior secured notes and the senior subordinated notes, we may incur additional first-priority secured borrowings under the amended senior secured credit facility. There is no limit to the amount of such additional debt. Further, the senior secured notes and senior subordinated notes are effectively subordinated to our obligations under capitalized leases of which $5.4 million existed as of December 31, 2003, to the extent of the balance outstanding. Additionally, as of December 31, 2003, the senior secured notes and senior subordinated notes were effectively subordinated to our obligations under $51.8 million of first-priority secured flooring plan financing to the extent of the value of their collateral, $1.1 million in notes payable and $24.3 million in standby letters of credit.

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        The level of our indebtedness could have important consequences, including:

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a substantial portion of our cash flow from operations will be dedicated to debt service and may not be available for other purposes;



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making it more difficult for us to satisfy our obligations;



•

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



•

obtaining financing in the future for working capital, capital expenditures and general corporate purposes, including acquisitions, and may impede our ability to secure favorable lease terms;



•

making us more vulnerable to economic downturns and may limit our ability to withstand competitive pressures; and



•

placing us at a competitive disadvantage compared to our competitors with less debt.

        To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control. An inability to service our indebtedness could lead to a default under our amended senior secured credit facility and our indentures, which may result in an acceleration of our indebtedness. Our ability to pay interest and principal on our indebtedness and to satisfy our other debt obligations will depend upon our future operating performance and the availability of refinancing indebtedness, which will be affected by prevailing economic conditions and financial, business and other factors, some of which are beyond our control. Based on our current level of operations and anticipated cost savings and operating improvements, we believe our cash flow from operations, available cash and available borrowing under the amended senior secured credit facility will be adequate to meet our future liquidity needs for at least the next twelve months.

        Additional Capital.    The cash that we generate from our business, together with cash that we may borrow under our amended senior secured credit facility, may not be sufficient to fund our capital requirements. As a result, we may require additional capital for, among other purposes, purchasing equipment, completing acquisitions, establishing new locations and refinancing existing indebtedness. We may not be able to obtain additional capital on acceptable terms, if at all. If we are unable to obtain sufficient additional capital in the future, our business could be adversely affected by reducing our ability to increase revenues and profitability.

        Our future cash flow may not be sufficient to meet our obligations and commitments. If we are unable to generate sufficient cash flow from operations in the future to service our indebtedness and to meet our other commitments, we will be required to adopt one or more alternatives, such as refinancing or restructuring our indebtedness (including the senior secured and senior subordinated notes), selling material assets or operations or seeking to raise additional debt or equity capital. These actions may not be effected on a timely basis or on satisfactory terms or at all, and these actions may not enable us to continue to satisfy our capital requirements. In addition, our existing or future debt agreements, including our indentures and the amended senior secured credit facility, may contain restrictive covenants prohibiting us from adopting any of these alternatives. Our failure to comply with these covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all of our debts. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources."

        Restrictive Covenants.    The operating and financial restrictions and covenants in our debt agreements, including the amended senior secured credit facility and the indentures, may adversely effect our ability to finance future operations or capital needs or to engage in other business activities. Our amended senior secured credit facility requires us to maintain specified financial ratios and tests, including fixed-charge coverage and total leverage ratios and maximum capital expenditures, which may require that we take action to reduce debt or to act in a manner contrary to our business objectives. In

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addition, the amended senior secured credit facility and the senior secured and senior subordinated notes restrict our ability to, among other things:

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incur additional indebtedness;



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dispose of assets;



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incur guarantee obligations;



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repay indebtedness or amend debt instruments;



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pay dividends;



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create liens on assets;



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make investments;



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make acquisitions;



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engage in mergers or consolidations; or



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engage in certain transactions with subsidiaries and affiliates and otherwise restrict corporate activities.

        A failure to comply with the restrictions contained in the amended senior secured credit facility could lead to an event of default which could result in an acceleration of the indebtedness. Such an acceleration would constitute an event of default under the indentures governing the senior secured notes. A failure to comply with the restrictions in the senior secured notes and senior subordinated indentures could result in an event of default under these indentures. Our future operating results may not be sufficient to enable compliance with the covenants in the amended senior secured credit facility, the indentures or other indebtedness or to remedy any such default. In addition, in the event of an acceleration, we may not have or be able to obtain sufficient funds to make any accelerated payments, including those under the senior secured and senior subordinated notes.

        We amended our senior secured credit facility in May 2003 and in February 2004 to modify certain restrictive financial covenants and financial ratios. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources."

        Competition.    The equipment rental and retail distribution industries are highly competitive and the equipment rental industry is highly fragmented. Many of the markets in which we operate are served by numerous competitors, ranging from national and multi-regional equipment rental companies to small, independent businesses with a limited number of locations. We generally compete on the basis of, among other things, availability and quality and breadth of equipment, expertise service, reliability, delivery and price. We may in the future encounter increased competition from existing competitors or new market entrants, which could have a material adverse effect on our business, financial condition and results of operations.

        Availability of Equipment.    Our new equipment suppliers may appoint additional distributors, sell directly or unilaterally terminate our distribution agreements, which could have a material adverse effect on our business due to a reduction of, or inability to increase, our revenues.

        We are a distributor of new equipment and parts supplied by leading, nationally-known OEMs. Typically under distribution agreements with these OEMs, we have exclusive responsibility for selected markets, although manufacturers retain the right to appoint additional dealers and sell directly to national accounts and governmental agencies and in most instances may unilaterally terminate the distribution agreements at any time without cause. Our new equipment suppliers may appoint additional dealers or sell directly in regions in which we currently have exclusive responsibility and may terminate our distribution agreements. Any such actions could have a material adverse effect on our

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business, financial condition and results of operations due to a reduction of, or an inability to increase, revenues. See "Business—Products and Services—New Equipment Sales."

        Control.    We are controlled by certain of our equityholders. The interests of our equityholders may conflict with the interests of the holders of our indebtedness. Affiliates of Bruckmann, Rosser, Sherrill & Co., Inc. (BRS) own approximately 48% of the voting common limited liability company interests of H&E Holdings L.L.C. (H&E Holdings), our parent and approximately 65% of the voting preferred limited liability company interests of H&E Holdings and have the ability to elect a majority of the Board of Directors of H&E Holdings and H&E Equipment Services and generally to control the affairs and policies of the Company. Circumstances may occur in which the interests of these investors, in pursuing acquisitions or otherwise, could be in conflict with the interests of the holders of our indebtedness. See "Security Ownership and Certain Beneficial Owners" and "Certain Relationships and Related Transactions."

        Liability and Insurance.    Our business exposes us to claims for personal injury, death or property damage resulting from the use of the equipment we rent or sell and from injuries caused in motor vehicle accidents in which our delivery and service personnel are involved. We carry comprehensive insurance, subject to deductibles, at levels we believe are sufficient to cover existing and future claims. Although we have not experienced any material losses that were not covered by insurance, our existing or future claims may exceed the level of our insurance, and such insurance may not continue to be available on economically reasonable terms, or at all.

        Environmental and Safety Regulations.    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 subject to the laws and requirements of federal, state and local environmental and occupational health and safety laws and regulations. We may not be at all times in complete compliance with all such requirements. We are subject to potentially significant 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. However, the requirements of these laws and regulations are complex, change frequently, and could become more stringent in the future. Based on conditions currently known to us, we do not believe that any pending of likely remediation and compliance costs will have a material adverse effect on our business. However, it is possible that these requirements could change or that liabilities could arise in the future in a manner that could have a material adverse effect on our business, financial condition and results of operations.

        Age of Our Fleet.    Determining the optimal age for our rental fleet equipment is subjective and requires considerable estimates by management. We have made estimates regarding the relationship between the age of our rental fleet equipment, and the maintenance and repair costs, and the market value of used equipment. Our future operating results could be adversely affected because our maintenance and repairs costs may be higher than estimated and market values of used equipment may fluctuate.

Item 2.    Properties

        We currently have a network of 41 facilities. Facility locations typically serve a 25 to 100 mile radius. In our facilities, we rent, display and sell equipment, including tools and supplies, and provide maintenance and basic repair work. We own 4 of our locations and lease 37 locations. Our leases

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provide for varying terms and renewal options. The number of branch locations in each state is shown below:

        Each facility location has a manager who is responsible for day-to-day operations. In addition, facilities are typically staffed with approximately 10 to 50 people, who may include technicians, salesmen, rental operations staff and parts specialists. While facility offices are typically open five days a week, we provide 24 hour, seven day per week service.

        We maintain a fleet of over 430 vehicles that are used for delivery, maintenance and sales functions. We own a portion of this fleet and lease the remainder.

        Our corporate headquarters are located in Baton Rouge, Louisiana, where we occupy approximately 18,400 square feet under a lease that extends until February 28, 2007.

Item 3.    Legal Proceedings

        We are party to various litigation matters, in most cases (except for the legal proceeding referred to below) involving ordinary and routine claims incidental to our business. We cannot estimate with certainty our ultimate legal and financial liability with respect to such pending matters (excluding the legal proceeding referred to below). However, we believe, based on our examination of such matters, that our ultimate liability will not have a material adverse effect on our business or financial condition.

        In July 2000, one of our competitors filed a complaint in the General Court of Justice, Superior Court Division, State of North Carolina, County of Mecklenburg (the Court). On May 2, 2003, the Court handed down an Order and Opinion in favor of the plaintiff. In conjunction therewith, we recorded a $17.0 million loss for estimated damages, plaintiff's attorneys fees and other costs in the first quarter of 2003.

        On August 13, 2003, the Court entered the final judgment in the amount of $17.4 million consisting of damages, plaintiff's attorneys fees and accrued statutory interest. Accordingly, we recorded an additional $0.4 million loss from litigation during the third quarter of 2003. On September 11, 2003, we filed a notice of appeal. In conjunction with the appeal and in accordance with the Court's order, we issued an irrevocable standby letter of credit for $19.0 million, representing the amount of the judgment plus $1.6 million in anticipated statutory interest for the sixteen months while the judgment is being appealed. If, at the end of sixteen months, the appeal is still pending, we will be required to extend the maturity of the irrevocable standby letter of credit for eight additional months and increase the amount by $0.8 million (eight months additional statutory interest at 8.0%). Going forward, we will expense any statutory interest as interest expense in the statement of operations. For the duration of the letter of credit, we pay a 300 basis point fee on the amount available for issuance.

        While we are appealing this judgment, we believe that even if there is a reduction in the amount of damages awarded to the plaintiff on appeal, the judgment could have a material adverse effect on our business or financial condition.

13

        As a result of our recording the estimated loss from litigation, on May 14, 2003, our senior secured credit agreement was amended to modify certain restrictive financial covenants and financial ratios. The credit agreement was amended to:

1.

exclude the loss from litigation from the calculation of Company's earnings before interest, taxes, depreciation and amortization.



2.

adjust the maximum leverage ratio and the maximum adjusted leverage ratio, respectively, to 5.20x from 4.60x for the remaining term of the credit agreement. The minimum adjusted interest coverage ratio was adjusted to 1.25x from 1.45x through 2004. In 2005, the ratio increases to 1.30x with an additional increase to 1.40x in 2006 through the remainder of the agreement.



3.

increase the maximum amount of letters of credit allowed under the senior credit facility to $30.0 million from $10.0 million.



4.

institute a pricing grid such that if excess availability (defined as the total borrowing base assets less total outstanding borrowings):



a.

falls below $90.0 million, the interest rate and letter of credit fee increase by 25 basis points.



b.

falls below $50.0 million, the interest rate and letter of credit fee increase by additional 25 basis points.



5.

institute a $20.0 million block on availability based on the total borrowing base assets.

        On May 14, 2003, we paid a loan amendment fee of $0.4 million that is being amortized over the remaining term of the loan. Consequently, we were not and do not expect to be in default under the amended senior secured credit facility as a result of the estimated loss from litigation. See "Management's Discussion and Analysis of Financial Condition and Result of Operations—Liquidity and Capital Resources."

Item 4.    Submission of Matters to a Vote of Security Holders

        No matter was submitted to a vote of our security holders.

14

PART II

Item 5.    Market for Common Equity and Related Stockholder Matters

        Not Applicable.

Item 6.    Selected Financial Data

        You should read the consolidated historical financial data together with our consolidated financial statements and related notes included elsewhere in this Report and Item 7. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements and the related notes thereto and other financial data included elsewhere in this Report.

15

⁽¹⁾

Includes the results of operations of ICM from June 18, 2002 through December 31, 2002.

⁽²⁾

Excludes amortization of debt issuance costs which is included in interest expense.

Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

        We are an integrated equipment rental, sales and service company located in the United States with a network of 41 facilities, most of which have full service capabilities, and a workforce that includes a group of service technicians and a separate rental and equipment sales force. In addition to renting equipment, we also sell new and used equipment and provide extensive parts and service support. We generate a significant portion of our gross profit from parts sales and service revenue.

        Our integrated approach leads to revenue for each source being partially driven by the activities of the other revenue sources. Our revenues are dependent on several factors, including the demand for rental equipment, rental fleet availability, rental rates, the demand for new and used equipment, the level of industrial and construction activity and general economic conditions.

16

        We derive our revenues primarily from the following sources:

(i)

Rental of Equipment—This category includes revenues from renting equipment. We offer flexible rental terms, including daily, weekly and monthly rentals. We focus our rental activities on, and organize our personnel by, four core types of equipment:



a.

Aerial work platforms;



b.

Cranes;



c.

Earthmoving; and



d.

Lift trucks.

Equipment rental revenue is impacted by time utilization (the equipment usage based on customer demand) and rental rates. Rental rates are significantly impacted by the competition in a specific geographical location.

(ii)

Sales of New Equipment—This category includes revenues from selling new equipment. We are one of the leading distributors of new products for nationally-recognized manufacturers in our four core product lines. Our new equipment distribution infrastructure facilitates a large, high-quality product support operation, creates a higher level of partnering with manufacturers and adds to our customer base which often leads to additional rental, parts and service revenue.



(iii)

Sales of Used Equipment—This category includes revenues from selling used equipment. We routinely sell our used rental fleet equipment in order to adjust the size, composition and age of our rental fleet in response to changing market conditions and to maintain a modern, high-quality fleet.



(iv)

Parts Sales and Service Revenue—This category includes revenues from parts sales and maintenance and repair services to customers for their owned equipment.

        Our cost of revenues includes depreciation, maintenance, property taxes, equipment lease expense, and other miscellaneous costs of rental equipment, cost of equipment sold and cost of parts and service.

        Depreciation of rental equipment represents the deprecation costs attributable to rental equipment and is generally calculated on a straight-line basis over the estimated service life of the asset (generally three to ten years with a 0% to 25% residual value). Maintenance of rental equipment represents the costs of servicing and maintaining our rental equipment on an ongoing basis.

        Our cost of equipment sold consists of the equipment cost for new and used equipment sales or the net book value of rental equipment for used equipment being sold from our rental fleet. Cost of parts sales and service revenue represents costs attributable to the sale of parts directly to customers and service provided for the maintenance and repair of customer-owned equipment.

        Included in our selling, general and administrative expenses are sales and marketing expenses, payroll and related costs, insurance expense, professional fees, property and other taxes, administrative overhead, and depreciation expense associated with property and equipment (other than rental equipment). Due to the difficult, competitive environment in 2003, we implemented cost controlling initiatives, primarily through employee reductions and consolidation of smaller branches. The savings we realized from these cost controlling initiatives were, however, offset by increasing insurance premiums and claims (worker compensation, health, and general liability), professional fees, fuel and other expenses.

        We believe a significant portion of our overall value is in our rental fleet equipment. Our rental fleet as of December 31, 2003 consists of over 13,000 units having an original acquisition cost (defined as the cost originally paid to manufacturers) of approximately $493.5 million. This includes equipment financed with operating leases. Determining the optimal age and mix for our rental fleet equipment is

17

subjective and requires considerable estimates by management. As of December 31, 2003, our rental fleet composition was as follows (dollars in millions):

        We are constantly evaluating the mix, age and quality of the equipment in our rental fleet in response to current economic conditions, competition and customer demand. For example, during 2003 the number of units in our rental fleet declined by over 2,000 units and the total acquisition cost of the rental fleet equipment declined approximately $61.2 million. On average, we aged our rental fleet approximately 6.5 months during 2003. While we reduced the size of our rental fleet, the mix among our four core product lines remained consistent with that of prior years. With our in-house service capabilities and extensive maintenance program, we believe our fleet is the best maintained and one of the newest in the industry.

        Not only is mix and age of our rental fleet impacted by the sales of used equipment from the fleet and the capital expenditures to acquire new rental fleet equipment, but so are our cash flows. During 2003, we monitored and controlled our capital expenditures to acquire new rental fleet equipment. In making acquisition decisions, we evaluated current market conditions, competition, manufacturers' pricing and return on investment over the estimated life of the specific equipment, among other things. During 2003, total proceeds from the sales of rental fleet equipment exceeded the rental fleet capital expenditures by approximately $21.3 million. This, coupled with the $18.8 million of cash provided by operating activities, allowed us to reduce our total debt outstanding by approximately $38 million.

Critical Accounting Policies and Estimates

        We prepare our financial statements in accordance with accounting principles generally accepted in the United States. A summary of our significant accounting policies is in the notes to our consolidated financial statements included elsewhere in this report. In applying many accounting principles, we need to make assumptions, estimates and/or judgments. These assumptions, estimates and/or judgments are often subjective and may change based on changing circumstances or changes in our analysis. Material changes in these assumptions, estimates and/or judgments have the potential to materially alter our results of operations. We have identified below those of our accounting polices that we believe could potentially produce materially different results were we to change underlying assumptions, estimates and/or judgments.

        Revenue Recognition.    Our policy is to recognize revenue from equipment rentals in the period earned, over the contract term, regardless of the timing of the billing to customers. A rental contract term can be daily, weekly or monthly. Because the term of the contracts can extend across financial reporting periods, we record unbilled rental revenue and deferred revenue at the end of reporting periods so rental revenue is appropriately stated in the periods presented. Revenue from the sale of equipment and parts is recognized at the time of delivery to, or pick-up by, the customer and when all obligations under the sales contract have been fulfilled and collectibility is reasonably assured. Service revenue is recognized at the time the services are rendered. Other revenues consist primarily of billings to customers for rental equipment delivery and damage waiver charges.

        Allowance for Doubtful Accounts.    We maintain an allowance for doubtful accounts. This allowance reflects our estimate of the amount of our receivables that we will be unable to collect. Our estimate could require change based on changing circumstances, including changes in the economy or in the

18

particular circumstances of individual customers. Accordingly, we may be required to increase or decrease our allowance.

        Useful Lives of Rental Equipment and Property and Equipment.    We depreciate rental equipment and property and equipment over their estimated useful lives, after giving effect to an estimated salvage value of 0% to 25% of cost. The useful life of an asset is determined based on our estimate of the period the asset will generate revenues, and the salvage value is determined based on our estimate of the minimum value we could realize from the asset after such period. We may be required to change these estimates based on changes in our industry 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.

        Impairment of Long-Lived Assets.    Long-lived assets are recorded at that lower of amortized cost or fair value. We review long-lived assets and certain identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted cash flows expected to be generated by the asset over the remaining useful life. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Results of Operations

        The Company was formed in June 2002 through the combination of H&E and ICM, which were two leading, regional, integrated equipment rental, sales and service companies operating in contiguous geographical markets.

Year Ended December 31, 2003 Compared to the Year Ended December 31, 2002

        The following table sets forth selected statement of operations revenue data for the periods indicated. Included in the table is the impact on operations attributable to the ICM locations acquired in 2002 (dollars in millions):

19

        Total Revenues.    Our 2003 total revenues were $413.7 million compared to $351.7 million in 2002, an increase of $62.0 million or 17.6%. Total revenues attributable to the locations associated with the ICM acquisition were $63.3 million. Our ability to increase revenues was hampered by lower customer demand due to a weak economy. Our revenues are attributable to:

1.

Equipment Rental Revenues.    Our revenues from equipment rentals increased $17.3 million to $153.9 million for 2003 from $136.6 million for 2002. Included in the increase is $26.1 million of equipment rentals revenue generated by locations associated with the acquisition of ICM. Same-store rental revenue declined $8.8 million for the year, primarily due to lower time utilization in the crane segment and both lower time utilization and rental rates for the aerial work platform segment. Other rental revenue declined due to our de-emphasizing smaller rental equipment. Earthmoving equipment rental revenue improved due to improved time utilization.

2.

New Equipment Sales Revenues.    Our new equipment sales increased $9.6 million to $81.7 million for 2003 from $72.1 million for 2002. Included in the increase is $6.9 million of new equipment sales related to the locations associated with the acquisition of ICM. During 2003, our sales of new cranes, earthmoving, and lift truck equipment improved but were offset by lower sales of aerial work platform and other new equipment. Sales of new equipment fluctuate based upon customer demand for their projects.

3.

Used Equipment Sales Revenues.    Our used equipment sales increased $18.4 million to $70.9 million for 2003 from $52.5 million for 2002. Included in the increase is $11.2 million of used equipment sales generated by locations associated with the acquisition of ICM. During 2003, lower sales of both used cranes and used aerial work platform equipment were offset by improvements in sales of used earthmoving, used lift truck and other used equipment. For 2003, we sold our used equipment at approximately 124% of net book value.

4.

Parts Sales and Service Revenue.    In 2003, our parts sales and service revenue increased $12.0 million to $87.0 million from $75.0 million for 2002. Total parts sales and service revenue associated with the acquisition of ICM were $14.2 million. The remaining $2.2 million decrease was attributable to lower customer demand. Customers appear to have excess idle equipment and therefore, have lower demand for parts and repairs.

5.

Other Revenues.    Our other revenues consisted primarily of billings to our customers for equipment support activities including transportation, hauling, parts freight and damage waiver charges. Our other revenues increased $4.7 million during 2003; $4.9 million of the increase was related to the ICM equipment acquisition.

20

        The following table sets forth selected statement of operations gross profit data for the periods indicated. Included in the table is the impact on operations attributable to the ICM locations acquired in 2002 (dollars in millions):

        Total Gross Profit.    Our 2003 total gross profit was $106.3 million compared to $96.5 million in 2002, an increase of $9.8 million or 10.2%. Total gross profit attributable to the locations associated with the ICM acquisition was $16.9 million. Following is information concerning our gross profit:

1.

Equipment Rentals Gross Profit.    Our equipment rentals gross profit decreased $3.1 million or 5.9% for this year compared to last year. Total equipment rentals gross profit generated by locations associated with the acquisition of ICM was $6.3 million. Same-store equipment gross profit declined $9.4 million for the year, primarily due to lower equipment rental revenues as previously discussed.

Depreciation expense on our rental equipment is recorded in equipment rentals cost of revenues. Excluding the $11.6 million related to the ICM acquisition, same-store depreciation expense decreased approximately $3.3 million as a result of a decrease in our rental fleet. For 2003, our maintenance and repair expense increased approximately $3.9 million (excluding the $6.0 million maintenance and repair expense associated with the ICM acquisition), primarily due to our aging the rental fleet.

2.

New Equipment Sales Gross Profit.    Our new equipment sales gross profit increased $1.4 million to $7.5 million for 2003 compared to $6.1 million for 2002. Included in the

21

increase is $1.3 million of new equipment sales gross profit related to the locations associated with the acquisition of ICM. The fluctuation in new equipment sales gross profit is attributable primarily to the mix of new equipment sold.

3.

Used Equipment Sales Gross Profit.    Our used equipment sales gross profit increased $4.2 million to $13.7 million for 2003 from $9.5 million for 2002. Included in the increase is $2.6 million of used equipment sales gross profit related to the locations associated with the acquisition of ICM. The fluctuation in used equipment sales gross profit is attributable primarily to the mix of used equipment sold.



4.

Parts Sales and Service Revenue Gross Profit.    In 2003, our parts sales and service revenue gross profit increased $5.4 million to $34.9 million from $29.5 million for 2002. Total parts sales and service revenue gross profit associated with the acquisition of ICM was $6.2 million. Despite lower parts sales and service revenue, the gross profit margin has remained consistent as a result of our increased pricing and cost controlling initiatives.

        Selling, General and Administrative Expenses.    Our 2003 selling, general and administrative (SG&A) expenses were $99.9 million compared to $82.3 million for 2002. Included in the total $17.6 million increase in SG&A expense was $26.1 million related to the ICM locations. The remaining $8.5 million decrease was primarily the result of our work force reductions made earlier this year, additional cost controlling initiatives implemented by management and continued integration of the merged companies. Depreciation and amortization expense on property and equipment is recorded in SG&A expense and was $3.9 million for 2003 compared to $3.0 million for 2002 (the ICM acquisition accounted for $0.5 million of the increase.)

        Loss from Litigation.    In July 2000, one of our competitors filed a complaint in the General Court of Justice, Superior Court Division, State of North Carolina, County of Mecklenburg (the Court). On May 2, 2003, the Court handed down an Order and Opinion in favor of the plaintiff. In conjunction therewith, we recorded a $17.0 million loss for estimated damages, plaintiff's attorneys fees and other costs in the first quarter of 2003.

        On August 13, 2003, the Court entered the final judgment in the amount of $17.4 million consisting of damages, plaintiff's attorneys fees and accrued statutory interest. Accordingly, we recorded an additional $0.4 million loss from litigation during the third quarter of 2003. On September 11, 2003, we filed a notice of appeal. In conjunction with the appeal and in accordance with the Court's order, we issued an irrevocable standby letter of credit for $19.0 million, representing the amount of the judgment plus $1.6 million in anticipated statutory interest for the sixteen months while the judgment is being appealed. If, at the end of sixteen months, the appeal is still pending, we will be required to extend the maturity of the irrevocable standby letter of credit for eight additional months and increase the amount by $0.8 million (eight months additional statutory interest at 8.0%). Going forward, we will expense any statutory interest as interest expense in the statement of operations. For the duration of the letter of credit, we pay a 300 basis point fee on the amount available for issuance.

        While we are appealing this judgment, we believe that even if there is a reduction in the amount of damages awarded to the plaintiff on appeal, the judgment could have a material adverse effect on our business or financial condition.

        Related Party Expense.    On June 29, 1999, we entered into a $3.0 million consulting and non-competition agreement with Mr. Thomas Engquist, a related party. The agreement provided for total payments over a ten-year term, payable in increments of $25,000 per month. Mr. Engquist was obligated to provide us consulting services and was to comply with the non-competition provision set forth in the Recapitalization Agreement between us and others dated June 19, 1999. The parties specifically acknowledged and agreed that in the event of the death of Mr. Engquist during the term of

22

the agreement, the payments that otherwise would have been payable to Mr. Engquist under the agreement shall be paid to his heirs.

        Due to Mr. Engquist's passing away during 2003, we will not be provided any further consulting services. Therefore, we have recorded a $1.3 million expense for the present value of the remaining future payments.

        Other Income (Expense).    Our 2003 other expense increased by $10.6 million to $39.2 million from $28.6 million for 2002. Our interest expense for 2003 increased $10.4 million this year compared to last year as a result of refinancing our total debt and acquiring ICM during 2002. The annual interest rates on our senior secured credit facility averaged 5.4% in 2003 compared to 5.8% in 2002.

        Provision (Benefit) from Income Taxes.    We are a limited liability company that has elected to be treated as a C Corporation for income tax purposes. For 2003, income taxes increased by $1.3 million to a provision of approximately $24,000 from a benefit $1.3 million for the year ended December 31, 2002. The increase is a result of our losses in 2003 and 2002 and the establishment of a valuation allowance against our net deferred tax assets. At the end of 2003 and 2002, we have recorded a tax valuation allowance for the entire amount of our net deferred income tax assets. The valuation allowance was recorded given the cumulative losses we have incurred and our belief that it is more likely than not that we will be unable to recover the net deferred income tax assets.

Year Ended December 31, 2002 Compared to the Year Ended December 31, 2001

        Total Revenues.    Our total revenues for fiscal year 2002 were $351.7 million compared to $309.5 million for fiscal year ended 2001. Total revenue contributed by the locations associated with the ICM acquisition was $93.8 million. Our revenues during these periods were attributable to the following sources:

1.

Equipment Rental Revenues.    Our total revenues from equipment rentals increased $37.9 million, or 38.4%, to $136.6 million for 2002 from $98.7 million for 2001. Total equipment rental revenues contributed by rental locations associated with the ICM acquisition was $40.1 million. Rental revenues, excluding revenues from the ICM locations, decreased $2.2 million for the year ended December 31, 2002 compared to 2001. Our total crane rental revenue for 2002 declined $3.6 million compared to the same period last year due primarily to the weakening of the industrial construction market. The decline in crane equipment rental revenue was offset by an increase of $2.1 million in aerial work platform equipment rental revenue and a $1.7 million increase in other equipment rental revenue.



2.

New Equipment Sales Revenues.    Our revenues from new equipment sales decreased $12.0 million, or 14.3% to $72.1 million for 2002 from $84.1 million for 2001. Total new equipment sales attributable to the acquisition of ICM were $19.2 million. The remaining $31.2 million decline in our new equipment sales for 2002 compared to 2001 is attributable primarily to a $34.8 million decline in new crane sales. Sales of new earthmoving equipment increased $1.6 million and sales of other miscellaneous new equipment decreased $1.6 million while the sales of new aerial work platform equipment increased $3.6 million. The increase in new aerial work platform equipment sales is primarily from the sales of equipment used by contractors in the building of power plants.



3.

Used Equipment Sales Revenues.    Our used equipment sales revenues decreased $6.9 million, or 11.6% to $52.5 million for the year 2002 from $59.4 million for 2001. Total used equipment sales attributable to the acquisition of ICM were $13.5 million. The remaining $20.4 million decrease was attributable primarily to lower used crane sales, which declined $17.8 million due to lower customer demand. Sales of used aerial work platform equipment increased $2.3 million. Used earthmoving and other used equipment sales also decreased by $4.9 million

23

due to lower customer demand and the completion of the fleet rationalization program that took place during 2001.

4.

Parts and Service Revenue.    Revenues from our parts sales and service revenue increased $18.7 million, or 33.2% to $75.0 million for 2002 from $56.3 million for 2001. Total parts sales and service revenue attributable to the acquisition of ICM were $17.6 million. The remainder of the increase was attributable to growth in revenues from parts sales, which increased $0.9 million or 2.5%, due to increased parts sales related to the aerial work platform operations, and growth in service revenue, which increased $0.2 million, or 1.0%, as a result of an increase in the number of transactions and an increase in charge out rates throughout the year.



5.

Other Revenues.    Our other revenues consisted primarily of billings to customers for equipment support activities including primarily transportation, hauling, parts freight and damage waiver charges. Other revenues for 2002 increased $4.5 million, or 41.3% to $15.5 million from $11.0 million for 2001. The acquisition of ICM accounted for $3.4 million of the total increase. The remaining $1.1 million increase was primarily attributable to related growth in billing transportation activities and damage waiver charges among other things.

        Total Gross Profit.    Our total gross profit for 2002 was $96.5 million compared to $77.9 million for 2001. Total gross profit attributable to the acquisition of ICM was $28.3 million. Following is information concerning our gross profit:

1.

Equipment Rentals Gross Profit.    Gross profit from our equipment rentals increased $7.2 million to $52.7 million for 2002 from $45.5 million for 2001. Included in the increase is $15.2 million of equipment rental gross profit generated by rental locations associated with the ICM acquisition. The remaining equipment rental gross profit decreased $8.0 million, or 17.6% for 2002 to $37.5 million from $45.5 million for 2001. The decline in equipment rental gross profit is primarily a result of downward pressures on aerial work platform rental rates, slower economic activity, and higher total costs of rental operations in support of the growth in the aerial work platform operations.

        Our total rental cost of revenues, excluding the effect of the ICM acquisition, increased $6.2 million to $59.4 million for 2002 from $53.2 million for 2001. The increase is attributable to a $3.2 million increase in depreciation due to the increase in aerial work platform rental fleet equipment and a $3.0 million increase in maintenance and repair costs. Certain aerial work platform equipment is aging, exceeding the manufacturer warranty period and is now incurring repair and maintenance costs.

2.

New Equipment Sales Gross Profit.    Gross profit from our new equipment sales decreased $0.6 million to $6.1 million for 2002 from $6.7 million for 2001. Total new equipment gross profit for 2002 included $2.3 million associated with the acquisition of ICM Equipment. The remaining $2.9 million decline in new equipment sales gross profit is a result of lower new equipment sales volume.



3.

Used Equipment Sales Gross Profit.    Gross profit from our used equipment sales increased $1.4 million to $9.5 million for 2002 from $8.1 million for 2001. Total used equipment gross profit for 2002 included $3.1 million associated with the acquisition of ICM. The remaining $1.7 million decrease in used equipment sales gross profit is a result of lower used equipment sales volume.



4.

Parts Sales and Service Revenue Gross Profit.    Gross profit from our parts sales and service revenue increased $8.4 million to $29.5 million for 2002 from $21.1 million for 2001. Total parts sales and service revenue gross profit for 2002 included $8.3 million associated with the acquisition of ICM. Excluding the effect of the ICM acquisition, gross profit from parts sales

24

increased $0.7 million and gross margin increased to 27.0% in 2002 from 25.9% in 2001. Excluding the effect of the ICM acquisition, gross profit from service revenue remained stable and gross margin from service revenue decreased to 57.8% from 59.0% due to increased costs of internal labor and material related to external service repair orders.

        Depreciation and Amortization.    Depreciation and amortization was $49.5 million and $32.2 million for fiscal years 2002 and 2001, respectively. The increase in depreciation and amortization expense was primarily attributable to the growth in rental fleet assets for the aerial work platform operations and the acquisition of ICM's assets.

        Selling, General and Administrative Expenses.    Selling, general and administrative (SG&A) expenses were $82.3 million, or 23.4% of total revenues for 2002 and $55.4 million, or 17.9% of total revenues for 2001. Included in SG&A expense is $22.1 million relating to the operations of ICM for the period subsequent to the acquisition. The remaining $4.8 million increase in SG&A expense, year-over-year, is primarily due to the increased costs to support the significant expansion of the aerial work platform operations initiated primarily in 2001.

        Other Income (Expense).    Our other expense increased by $10.8 million to $28.6 million for 2002 from $17.8 million for 2001. Interest expense for 2002 increased $11.0 million as a result of the refinancing of our total debt and the acquisition of ICM. Additionally, annual interest rates on our revolving credit facility averaged 5.8% for 2002 compared to 7.3% for 2001.

        Income Tax Provision (Benefit).    We are a limited liability company that has elected to be treated as a C Corporation for income tax purposes. Income taxes decreased by $2.7 million to a benefit of $1.3 million for 2002 from a provision of $1.4 million for 2001. The change is a result of our incurring a $14.3 million loss before income taxes in 2002 compared to income before income taxes in 2001. At the end of 2002, we have recorded a tax valuation allowance for the entire amount of our net deferred income tax assets. The valuation allowance was recorded given the cumulative losses we incurred and our belief that it is more likely than not that we will be unable to recover the net deferred income tax assets.

Liquidity and Capital Resources

Senior Secured Credit Facility Amendments

        On May 14, 2003, we amended the senior secured credit agreement dated June 17, 2002, governing our senior secured credit facility. Among other things, the amendment modified certain restrictive financial covenants and financial ratios. The senior secured credit agreement was amended to:

1.

exclude the loss from litigation from the calculation of Company's earnings before interest, taxes, depreciation and amortization.



2.

adjust the maximum leverage ratio and the maximum adjusted leverage ratio, respectively, to 5.20x from 4.60x for the remaining term of the credit agreement. The minimum adjusted interest coverage ratio was adjusted to 1.25x from 1.45x through 2004. In 2005, the ratio increases to 1.30x with an additional increase to 1.40x in 2006 through the remainder of the agreement.



3.

increase the maximum amount of letters of credit allowed under the senior credit facility to $30.0 million from $10.0 million.



4.

institute a pricing grid such that if excess availability (defined as the total borrowing base assets less total outstanding borrowings):



a.

falls below $90.0 million, the interest rate and letter of credit fee increase by 25 basis points.

25

b.

falls below $50.0 million, the interest rate and letter of credit fee increase by an additional 25 basis points; and



5.

institute a $20.0 million block on availability based on the total borrowing base assets.

        We paid a loan amendment fee of $0.4 million that is being amortized over the remaining term of the loan.

        On February 10, 2004, we amended the senior secured credit agreement dated June 17, 2002, governing our senior secured credit facility. Principally, this amendment:

1.

extends the maturity date of the amended senior secured credit facility to February 2009.



2.

eliminates the maximum leverage ratio covenant.



3.

increases the adjusted maximum leverage ratio covenant from 5.2x to 5.8x for each quarter in the first year; 5.7x for each quarter in the second year; 5.4x for each quarter in the third year; 5.3x for each quarter in the fourth year; and 5.2x for each quarter in the fifth year. The minimum adjusted interest coverage ratio is set at 1.25x for each quarter through 2005; 1.35x for each quarter in 2006 and 2007; and 1.40x for each quarter in 2008 and through the remaining term of the agreement.



4.

increases the block on availability of assets from $20.0 million to $30.0 million based on the total borrowing base assets.



5.

reduces the advance rate on rental fleet assets to 75 percent from 80 percent of the orderly liquidation value.

        We paid a loan amendment fee of $0.8 million that is being amortized over the remaining term of the loan. Based on these covenant changes, our availability under the amended senior secured credit facility would have been approximately $81.7 million as of December 31, 2003. As of December 31, 2003 (and prior to the February 2004 amendment), we were in compliance with the financial covenants in place at that time.

Cash Requirements Related to Operations

        Our principal sources of liquidity have been from cash provided by operations and the sales of used equipment, proceeds from the issuance of debt, and borrowings available under our amended senior secured credit facility. As of February 29, 2004, the total balance outstanding on the amended senior secured credit facility was $47.3 million with $78.2 million available in additional borrowings net of $24.5 million in standby letters of credit. Also on February 29, 2004, our total balance payable on capital lease obligations and notes payable were $2.2 million and $1.0 million, respectively

        Our principal uses of cash have been to fund operating activities and working capital, finance the purchase of rental fleet equipment, fund payments due under operating leases and manufacturer flooring plans payable, and to meet debt service requirements. We anticipate that these uses will continue to be the principal demands on our cash in the future.

        The amount of our future capital expenditures will depend on a number of factors including general economic conditions and growth prospects. We anticipate our 2004 gross rental fleet capital expenditures to be approximately $85 million to $88 million, primarily to replace the rental fleet equipment we anticipate selling during 2004. We anticipate that we will fund these rental fleet capital expenditures with the proceeds from the sales of used equipment, cash from operations and, if required, from borrowings under our amended senior secured credit facility. In response to changing economic conditions, we believe we have the flexibility to modify our capital expenditures by adjusting them (either up or down) to match our actual performance. We anticipate our 2004 gross property and equipment capital expenditures to be approximately $2 million to $3 million.

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        To service our debt, we will require a significant amount of cash. Our ability to pay interest and principal on our indebtedness (including the senior subordinated and senior secured notes and obligations under the amended senior secured credit facility) and to satisfy our other debt obligations will depend upon our future operating performance and the availability of refinancing indebtedness, which will be affected by prevailing economic conditions and financial, business and other factors, some of which are beyond our control. Based on our current level of operations and anticipated cost savings and operating improvements, we believe our cash flow from operations, available cash and available borrowings under the senior secured credit facility will be adequate to meet our future liquidity needs for at least the next twelve months.

        We cannot assure that our future cash flow will be sufficient to meet our long-term obligations and commitments. If we are unable to generate sufficient cash flow from operations in the future to service our indebtedness and to meet our other commitments, we will be required to adopt one or more alternatives, such as refinancing or restructuring our indebtedness, selling material assets or operations or seeking to raise additional debt or equity capital. We cannot assure that any of these actions could be affected on a timely basis or on satisfactory terms or at all, or that these actions would enable us to continue to satisfy our capital requirements. In addition, our existing or future debt agreements, including the indentures and the amended senior secured credit facility, may contain restrictive covenants prohibiting us from adopting any of these alternatives. Our failure to comply with these covenants could result in an event of default which, if not cured or waived, could result in the accelerations of all of our debt.

Certain Information Concerning Off-Balance Sheet Arrangements

        At December 31, 2003, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. We are, therefore, not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.

        In the normal course of our business activities, we lease real estate, rental equipment and non-rental fleet equipment under operating leases. See "Contractual and Commercial Commitments Summary" below.

Sources and Uses of Cash

        Cash flow from operating activities.    For 2003, our cash provided by operating activities was $18.8 million. The significant components of our operating activities that provided cash were total property and equipment and rental fleet depreciation expense of $58.8 million, the $17.4 estimated loss from litigation, a $1.3 million decrease in accounts receivable, and an increase in accounts payable and accrued expenses payable of $5.1 million. Significant components of our operating activities that used cash consisted of a $51.4 million net loss, gain on sale of both rental and non-rental equipment of $11.8 million, and an increase in inventories of $4.4 million. The remaining $3.8 million of cash provided by operating activities related to the change in other assets and other liabilities.

        Cash flow from investing activities.    For 2003, cash provided by our investing activities was $21.5 million. This is a result of proceeds from the sale of rental and non-rental equipment of $54.0 million offset by purchasing $32.5 million in rental and non-rental equipment.

        Cash flow from financing activities.    For 2003, cash used in our financing activities was $39.8 million. For the year, our total borrowings under the amended senior secured credit facility were $385.5 million and total payments under the amended senior secured credit facility were $418.3 million. Financing costs paid in cash for the refinancing totaled $1.1 million. Payments on capital leases and other notes were $5.8 million.

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Contractual and Commercial Commitments Summary

        The following summarizes our contractual obligations at December 31, 2003, and the effect such obligations are expected to have on our liquidity and cash flow in future periods.

⁽¹⁾

This includes total operating lease rental payments (including interest) having initial or remaining non-cancelable lease terms longer than one year.

⁽²⁾

This includes: (i) Bruckmann, Rosser, Sherrill & Co., Inc's annual management fees through 2012 (based upon the lesser of 1.75% of estimated Earnings Before Interest, Taxes, Depreciation, and Amortization excluding operating lease expense or $2.0 million per year) for $12.4 million and (ii) payments for secured floor plan financing for $51.8 million.

        Additionally, as of December 31, 2003, we have standby letters of credit totaling $24.3 million that expire in September 2004 and January 2005.

Recent Accounting Pronouncements

        In November 2002, the Financial Accounting Standards Boards Emerging Issues Task Force issued its consensus concerning "Revenue Arrangements with Multiple Deliverables" (EITF 00-21). EITF 00-21 addresses how to determine whether a revenue arrangement involving multiple deliverables should be divided into separate units of accounting, and, if separation is appropriate, how the arrangement consideration should be measured and allocated to the identified accounting units. The guidance in EITF 00-21 is effective for revenue arrangements entered into in fiscal periods beginning after June 15, 2003. The adoption of EITF 00-21 did not have a material impact on our results of operations and financial position.

        In May 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 150 (SFAS No. 150), "Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity," The new statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both debt and equity. The provisions of SFAS No. 150 apply to the classification and disclosure requirements for the following three types of financial instruments: Mandatorily Redeemable Instruments, Instruments with Repurchase Obligations, and Instruments with Obligations to Issue a Variable Number of Securities. The new reporting and disclosure requirements for SFAS No. 150 become effective for the first interim period beginning after June 15, 2003 or for any covered instruments entered into or modified subsequent to May 31, 2003. The adoption of SFAS No. 150 did not have a material impact on our results of operations and financial position.

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Seasonality

        Our business is seasonal with demand for our rental equipment tending to be lower in the winter months. The equipment rental activities are directly related to commercial and industrial construction and maintenance activities. Therefore, equipment rental operations will be correlated to the levels of current construction activities. The severity of weather conditions can have a temporary impact on the level of construction activities.

        Equipment sales cycles are also subject to seasonality with the peak selling period during the spring season and extending through the summer. Parts and service activities are less effected by changes in demand caused by seasonality.

Inflation

        Although we cannot accurately anticipate the effect of inflation on our operations, we believe that inflation has not had, and is not likely in the foreseeable future to have, a material impact on our results of operations.

Item 7A.    Quantitative and Qualitative Disclosures About Market Risk

        Our earnings are effected by changes in interest rates due to the fact that interest on the amended senior secured credit facility is calculated based upon LIBOR plus 300 basis points. We are also required to pay the lenders a commitment fee equal to 0.5% per annum in respect of undrawn commitments under the amended senior secured credit facility. At December 31, 2003, we had variable rate debt representing 15.1% of total debt. A portion of our indebtedness bears interest at variable rates that are linked to changing market interest rates. Based upon the balances outstanding at December 31, 2003, a one percent increase in market rates would increase our annual interest expense approximately $1.0 million. We do not have significant exposure to the changing interest rates on our fixed-rate senior secured notes, senior subordinated notes or the capital lease obligations, which represented 84.9% of our total debt.

Item 8.    Consolidated Financial Statements and Supplementary Data

        Our consolidated financial statements and supplementary data are listed in the index appearing under Item 15(a).

Item 9.    Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

        None

Item 9A.    Controls and Procedures

(a)

Within the 90 days prior to the date of filing this Form 10-K, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's President and Chief Executive Officer along with the Company's Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the Company's President and Chief Executive Officer along with the Company's Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company's periodic SEC filings.



(b)

There have been no significant changes in the Company's internal controls or in other factors which could significantly affect internal controls subsequent to the date the Company carried out its evaluation.

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PART III

Item 10.    Directors and Executive Officers

        The following table sets forth the names, ages and titles, as well as a brief account of the business experience, of each person who is a director or executive officer of H&E Equipment Services.

        Gary W. Bagley, Chairman and Director, served as President of ICM since 1996 and Chief Executive Officer since 1998 until H&E Equipment Services was formed in June 2002, when he became Chairman of the Company. Prior to 1996, he held various positions at ICM, including Salesman, Sales Manager, and General Manager. Prior to that, Mr. Bagley serviced as Vice President and ICM General Manager of Wheeler Machinery Co. Mr. Bagley serves on a number of dealer advisory boards and industry association boards.

        John M. Engquist, President, Chief Executive Officer and Director, served as President and Chief Executive Officer of H&E since 1995 and as a director of Gulf Wide since 1999. He has held the position of President, Chief Executive Officer and Director of H&E Equipment Services since its formation in June 2002. From 1975 to 1994, he held various operational positions at H&E, starting as a mechanic's helper. Mr. Engquist serves on the Board of Directors of St. Jude's Children's Hospital in Memphis, Tennessee, Cajun Contractors and Engineers, Inc. and Business Bank of Baton Rouge.

        Lindsay C. Jones, Chief Financial Officer and Secretary, joined ICM as Chief Financial Officer in October 1998 and has served as Chief Financial Officer and Secretary of H&E Equipment Services since its formation in June 2002. From 1994 to 1998, Mr. Jones served as Chief Financial Officer and Treasurer for Midwest Office, Inc. Prior to that, Mr. Jones was an Audit Assurance Manager with KPMG serving clients in the retail and financial service markets. Mr. Jones is a Certified Public Accountant and is a member of the American Institute of Certified Public Accountants, the Utah Association of Certified Public Accountants and Financial Executives International.

        Terence L. Eastman, Senior Vice President, Finance, served as Chief Financial Officer of H&E since 1994 and has served as Senior Vice President, Finance of H&E Equipment Services since its formation in June 2002. Prior to joining H&E, Mr. Eastman was the regional controller for Rollins Environmental Services from 1987 to 1994. From 1974 to 1987, Mr. Eastman held various financial positions with CF&I Steel Corporation in Pueblo, Colorado.

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        William W. Fox, Vice President, Cranes and Earthmoving, served as Executive Vice President and General Manager of H&E since 1995 and has served as Vice President, Cranes and Earthmoving of H&E Equipment Services since its formation in June 2002. Mr. Fox served as President of South Texas Equipment Co., a subsidiary of H&E, from 1995 to 1997. Prior to that, Mr. Fox held various executive and managerial positions with the Manitowoc Engineering Company. He was Executive Vice President/General Manager from 1989 to 1995, Vice President Sales from 1988 to 1989, and General Manager of the company for two years, from 1986 to 1988. Before joining Manitowoc, Mr. Fox worked for six years as Executive Vice President/General Manager at North Central Crane, from 1980 to 1986.

        Robert W. Hepler, Vice President, Hi-Lift, served as President of the Hi-Lift Division at H&E since 1999 and has served as Vice President, Hi-Lift of H&E Equipment Services since its formation in June 2002. From 1992 to 1999, he was President of BPS Equipment Division of Rentakil, plc. From 1988 to 1992, he served as President of Booms and Scissors at BET Plant Services, which acquired the company he founded in 1982, Hepler Hi-Lift.

        Kenneth R. Sharp, Jr., Vice President, Lift Trucks, began his career at ICM in 1973 and served as Executive Vice President of ICM since 1996 and has served as Vice President, Lift Trucks of H&E Equipment Services since its formation in June 2002. From 1989 to 1996, Mr. Sharp served as General Manager of the ICM Power Systems Division. From 1983 to 1989, he held various positions at ICM including Salesman, Sales Manager and Product Support Manager.

        John D. Jones, Vice President, Product Support, served as Vice President of Product Support Services at H&E since 1995 and has served as Vice President, Product Support of H&E Equipment Services since its formation in June 2002. From 1991 to 1994, he was General Manager of Product Support at Louisiana Machinery. From 1987 to 1991 he served as General Manager of the Parts Operation at Holt Company of Louisiana. From 1976 to 1987, Mr. Jones worked in Product Support and Marketing for Boyce Machinery.

        Dale W. Roesener, Vice President, Fleet Management, founded Southern Nevada Equipment Company in 1983 and served as its President and Chief Executive Officer until 1998 when he joined ICM as Senior Vice President, Secretary and Fleet Manager. He has served as Vice President, Fleet Management of H&E Equipment Services since its formation in June 2002.

        Bradley W. Barber, Vice President, Rental Operations, was appointed Vice President of Rental Operations in February 2003. Prior to that, Mr. Barber served as Director of Rental Operations for H&E Equipment Services and H&E. Mr. Barber has previous experience in both outside sales and branch management for a regional equipment company.

        Bruce C. Bruckmann, Director, is a Managing Director of BRS. He was an officer of Citicorp Venture Capital Ltd. from 1983 through 1994. Mr. Bruckmann is a director of HealthPlus Corporation, HealthEssentials, Inc., Anvil Knitwear, Inc., California Pizza Kitchen, Inc., Penhall International, Inc., Eurofresh, Inc., Mohawk Industries, Inc. and Town Sports International, Inc.

        Harold O. Rosser, Director, is a Managing Director of BRS. He was an officer of Citicorp Venture Capital from 1987 through 1994. Mr. Rosser is a director of American Paper Group, Inc., Acapulco Restaurants, Inc., Penhall International, Inc., California Pizza Kitchen, Inc., O'Sullivan Industries, Il Fornaio (America) Corporation and McCormick & Schmick Restaurant Corporation.

        J. Rice Edmonds, Director, is a Principal of BRS. Prior to joining BRS in 1996 he worked in the high yield finance group of Bankers Trust. Mr. Edmonds is a director of Acapulco Restaurants, Inc., Il Fornaio (America) Corporation and McCormick & Schmick Restaurant Corporation.

        John T. Sawyer, Director, joined as a Director in September 2002. Mr. Sawyer is President of Penhall. He joined Penhall in 1978 as the Estimating Manager of the Anaheim Division. In 1980, Mr. Sawyer was appointed Manager of Penhall's National Contracting Division, and in 1984, he

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assumed the position of Vice President and became responsible for managing all construction services divisions. Mr. Sawyer has been President of Penhall since 1989.

        Keith E. Alessi, Director, joined as a Director and Chairman of the Audit Committee in November 2002. Mr. Alessi is Chairman and Chief Executive Officer (and owner) of Lifestyles Improvement Centers LLC, a franchiser of hypnosis centers in the US and Canada. Mr. Alessi is also an Adjunct Professor of Law at The Washington and Lee University School of Law and Adjunct Professor at The University of Michigan Graduate School of Business Administration. He is a director and the Chairman of the Audit Committee for both Town Sports International (New York), a chain of health clubs and MWI Veterinary Supply (Boise), a leading veterinary supply wholesaler. He is the former Chairman and CEO of Telespectrum Worldwide and Jackson Hewitt.

        Lawrence C. Karlson, Director, joined as a Director in September 2002. Mr. Karlson has a Masters Degree in Business Administration from the Wharton School of Business. In 1983, Mr. Karlson formed Nobel Electronics, Inc. In 1986, Nobel Electronics was reverse-merged into Pharos AB and Mr. Karlson became President and Chief Executive Officer. In 1990 he was named Chairman. He retired in 1993. Mr. Karlson provides consulting services to a wide variety of business. He currently sits on the Board of Directors of numerous public and private companies.

Code of Ethics

        We have adopted a Standard of Conduct and Ethics for executive officers and directors. A copy of the Standard of Conduct and Ethics is available upon written request, free of charge, by writing to:

H&E Equipment Services, L.L.C.
Attention: Mr. Raymond Jones
Corporate Compliance Officer
4899 West 2100 South
Salt Lake City, Utah 84120

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Item 11.    Executive Compensation

        The following tables summarize, for the periods indicated, the principal components of compensation for our Chief Executive Officer and the four highest compensated executive officers (collectively, the named executive officers) for the years ended December 31, 2003, 2002 and 2001:

Summary Compensation Table

^(a)

Bonus earned upon achievement of performance objectives.

^(b)

Automobile allowances.

^(c)

Company contributions under a non-qualified deferred compensation plan.

^(d)

Includes a $250,000 supplemental bonus, in addition to the bonus provided under Engquist's employment agreement, authorized pursuant to a board resolution of Gulf Wide dated as of August 31, 2001.