UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D. C. 20549

FORM 10-K

|(Mark One)                                                    |                                                                                         
|------------------------------------------------------------- | ----------------------------------------------------------------------------------------
|ý                                                             | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|For the year ended December 31, 2003                         
|OR                                                           
|o                                                             | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|For the transition period
from                             to

Commission file numbers: 333-99587
                                         
     333-99589

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

|Louisiana(State of incorporation)                                                                                    |  | 72-1287046(I.R.S. employer identification no.)                   
|-------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------
|11100 Mead Road, Suite 200,
Baton Rouge, Louisiana 70816(Address of principal executive offices, including zip code) |  | (225) 298-5200Registrant's telephone number, including area code)

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.



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TABLE OF CONTENTS

|PART I   |          | 3 
|-------- | -------- | --
|         | Item 1.  |   
|         | Item 2.  |   
|         | Item 3.  |   
|         | Item 4.  |   
|PART II. |          | 15
|         | Item 5.  |   
|         | Item 6.  |   
|         | Item 7.  |   
|         | Item 7A. |   
|         | Item 8.  |   
|         | Item 9.  |   
|         | Item 9A. |   
|PART III |          | 30
|         | Item 10. |   
|         | Item 11. |   
|         | Item 12. |   
|         | Item 13. |   
|         | Item 14. |   
|         | Item 15. |   

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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:



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:



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:



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:



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:



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:



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:

Alabama(1)

Georgia(1)

New Mexico(2)Arizona(2)

Idaho(2)

Nevada(2)Arkansas(2)

Louisiana(9)

North Carolina(1)Colorado(2)

Mississippi(1)

Texas(7)Florida(3)

Montana(3)

Utah(3)


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

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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:



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

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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.

|                                             |                                | For the Year Ended December 31, |       
|-------------------------------------------- | ------------------------------ | ------------------------------- | ------
|
|
|Statement of operations data:                |                                |                                 |       
|Revenues:                                    |                                |                                 |       
|                                             | Equipment rentals              |                                 | $     
|                                             | New equipment sales            |                                 |       
|                                             | Used equipment sales           |                                 |       
|                                             | Parts sales                    |                                 |       
|                                             | Service revenue                |                                 |       
|                                             | Other                          |                                 |       
|                                             |                                |                                 |       
|                                             |                                | Total revenues                  |       
|                                             |                                |                                 |       
|Cost of revenues:                            |                                |                                 |       
|                                             | Equipment rentals              |                                 |       
|                                             | New equipment sales            |                                 |       
|                                             | Used equipment sales           |                                 |       
|                                             | Parts sales                    |                                 |       
|                                             | Service revenue                |                                 |       
|                                             | Other                          |                                 |       
|                                             |                                |                                 |       
|                                             |                                | Total cost of revenues          |       
|                                             |                                |                                 |       
|Gross profit:                                |                                |                                 |       
|                                             | Equipment rentals              |                                 |       
|                                             | New equipment sales            |                                 |       
|                                             | Used equipment sales           |                                 |       
|                                             | Parts sales                    |                                 |       
|                                             | Service revenue                |                                 |       
|                                             | Other                          |                                 |       
|                                             |                                |                                 |       
|                                             |                                | Total gross profit              |       
|                                             |                                |                                 |       
|Selling, general and administrative expenses |                                |                                 | 35,369
|Loss from litigation                         |                                |                                 |      
|Related party expense                        |                                |                                 |      
|Gain on sale of property and equipment       |                                |                                 | 952   
|                                             |                                |                                 |       
|                                             | Income (loss) from operations  |                                 |       
|                                             |                                |                                 |       
|Other income (expense):                      |                                |                                 |       
|                                             | Interest expense               |                                 |       
|                                             | Other, net                     |                                 |       
|                                             |                                |                                 |       
|                                             |                                | Total other expense, net        |       
|                                             |                                |                                 |       
|                                             | Income (loss) before taxes     |                                 |       
|                                             | Income tax provision (benefit) |                                 |       
|                                             |                                |                                 |       
|                                             |                                | Net income (loss)               |       
|                                             |                                |                                 |       

15

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|                                 |                                                     | For the Year Ended December 31, |       
|-------------------------------- | --------------------------------------------------- | ------------------------------- | ------
|
|
|Other financial data:            |                                                     |                                 |       
|Depreciation and amortization(2) |                                                     | $                               | 28,331
|Statement of cash flows:         |                                                     |                                 |       
|                                 | Net cash (used in) provided by
operating activities |                                 |       
|                                 | Net cash (used in) provided by
investing activities |                                 |       
|                                 | Net cash provided by (used in)
financing activities |                                 |       

|                          |  | As of December 31, |        
|------------------------- |  | ------------------ | -------
|
|
|Balance sheet data:       |  |                    |        
|Cash                      |  | $                  | 2,675  
|Rental equipment, net     |  |                    | 168,018
|Goodwill, net             |  |                    | 3,442  
|Deferred financing costs  |  |                    |       
|Total assets              |  |                    | 260,265
|Total debt                |  |                    | 205,171
|Members' equity (deficit) |  |                    | (8,569 

---

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

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We derive our revenues primarily from the following sources:





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

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

|                      |  | Units  |  | % of
Total
Units |  | Acquisition
Cost |       | % of
Original Acquisition
Cost |      | Average Age in
Months
|--------------------- |  | ------ |  | ---------------- |  | ---------------- | ----- | ------------------------------ | ---- | ---------------------
|Aerial Work Platforms |  | 9,935  |  | 73%              |  | $                | 298.0 |                                | 61%  |                      
|Cranes                |  | 487    |  | 4%               |  |                  | 104.7 |                                | 21%  |                      
|Earthmoving           |  | 674    |  | 5%               |  |                  | 51.5  |                                | 10%  |                      
|Lift Trucks           |  | 1,185  |  | 9%               |  |                  | 28.1  |                                | 6%   |                      
|Other                 |  | 1,325  |  | 9%               |  |                  | 11.2  |                                | 2%   |                      
|                      |  |        |  |                  |  |                  |       |                                |      |                      
|Total                 |  | 13,606 |  | 100%             |  | $                | 493.5 |                                | 100% |                      
|                      |  |        |  |                  |  |                  |       |                                |      |                      

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

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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):

|          |                      | Year Ended December 31, |                           |   |      |       |   | Dollar
Change
Attributable
to ICM
Acquisition |       |   |     
|--------- | -------------------- | ----------------------- | ------------------------- | - | ---- | ----- | - | --------------------------------------------- | ----- | - | ----
|
|
|Revenues: |                      |                         |                           |   |      |       |   |                                               |       |   |     
|          | Equipment rentals:   |                         |                           |   |      |       |   |                                               |       |   |     
|          |                      | Cranes                  |                           | $ | 20.5 |       | $ | 22.0                                          |       | $ | (1.5
|          |                      | Aerial work platforms   |                           |   | 89.2 |       |   | 74.8                                          |       |   | 14.4
|          |                      | Earthmoving             |                           |   | 25.0 |       |   | 22.0                                          |       |   | 3.0 
|          |                      | Lift trucks             |                           |   | 8.4  |       |   | 4.7                                           |       |   | 3.7 
|          |                      | Other                   |                           |   | 10.8 |       |   | 13.1                                          |       |   | (2.3
|          |                      |                         |                           |   |      |       |   |                                               |       |   |     
|          |                      |                         | Total equipment rentals   |   |      | 153.9 |   |                                               | 136.6 |   |     
|          |                      |                         |                           |   |      |       |   |                                               |       |   |     
|          | New equipment sales: |                         |                           |   |      |       |   |                                               |       |   |     
|          |                      | Cranes                  |                           |   | 30.3 |       |   | 29.7                                          |       |   | 0.6 
|          |                      | Aerial work platforms   |                           |   | 9.2  |       |   | 10.5                                          |       |   | (1.3
|          |                      | Earthmoving             |                           |   | 24.7 |       |   | 18.3                                          |       |   | 6.4 
|          |                      | Lift trucks             |                           |   | 12.2 |       |   | 5.8                                           |       |   | 6.4 
|          |                      | Other                   |                           |   | 5.3  |       |   | 7.8                                           |       |   | (2.5
|          |                      |                         |                           |   |      |       |   |                                               |       |   |     
|          |                      |                         | Total new equipment sales |   |      | 81.7  |   |                                               | 72.1  |   |     
|          |                      |                         |                           |   |      |       |   |                                               |       |   |     
|          |                      |                         |                           |   |      |       |   |                                               |       |   |     

19

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| | Used equipment sales: |                       |                            |      |      |       |      |      |       |     |      |      |       |      |     |     |      |      |     
| | --------------------- | --------------------- | -------------------------- | ---- | ---- | ----- | ---- | ---- | ----- | --- | ---- | ---- | ----- | ---- | --- | --- | ---- | ---- | ----
| |                       | Cranes                |                            |      | 22.1 |       |      | 23.3 |       |     | (1.2 | )    | (5.2  | %)   |     | 1.8 |      |      | (3.0
| |                       | Aerial work platforms |                            |      | 9.7  |       |      | 6.4  |       |     | 3.3  |      | 51.6  | %    |     | 4.3 |      |      | (1.0
| |                       | Earthmoving           |                            |      | 26.5 |       |      | 15.3 |       |     | 11.2 |      | 73.2  | %    |     | 1.3 |      |      | 9.9 
| |                       | Lift trucks           |                            |      | 8.0  |       |      | 4.0  |       |     | 4.0  |      | 100.0 | %    |     | 3.7 |      |      | 0.3 
| |                       | Other                 |                            |      | 4.6  |       |      | 3.5  |       |     | 1.1  |      | 31.4  | %    |     | 0.1 |      |      | 1.0 
| |                       |                       |                            |      |      |       |      |      |       |     |      |      |      
| |                       |                       | Total used equipment sales |      |      | 70.9  |      |      | 52.5  |     |      | 18.4 |       | 35.0 | %   |     | 11.2 |      |     
| |                       |                       |                            |      |      |       |      |      |       |     |      |      |      
| | Parts sales           |                       |                            | 53.7 |      |       | 47.2 |      |       | 6.5 |      | 13.8 | %     |      | 7.8 |     |      | (1.3 | )   
| | Service revenue       |                       |                            | 33.3 |      |       | 27.8 |      |       | 5.5 |      | 19.8 | %     |      | 6.4 |     |      | (0.9 | )   
| | Other                 |                       |                            | 20.2 |      |       | 15.5 |      |       | 4.7 |      | 30.3 | %     |      | 4.9 |     |      | (0.2 | )   
| |                       |                       |                            |      |      |       |      |      |       |     |      |      |      
| |                       |                       | Total revenue              |      | $    | 413.7 |      | $    | 351.7 |     | $    | 62.0 |       | 17.6 | %   | $   | 63.3 |      | $   
| |                       |                       |                            |      |      |       |      |      |       |     |      |      |      

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:

20

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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):

|              |                       | Year Ended December 31, |                            |      |      |       |      |      |      |      |     
|------------- | --------------------- | ----------------------- | -------------------------- | ---- | ---- | ----- | ---- | ---- | ---- | ---- | ----
|
|
|
|Gross Profit: |                       |                         |                            |      |      |       |      |      |      |      |     
|              | Equipment rentals     |                         | $                          | 49.6 |      | $     | 52.7 |      | $    | (3.1 | )   
|              | New equipment sales:  |                         |                            |      |      |       |      |      |      |      |     
|              |                       | Cranes                  |                            |      | 3.2  |       |      | 2.4  |      |      | 0.8 
|              |                       | Aerial work platforms   |                            |      | 1.2  |       |      | 1.1  |      |      | 0.1 
|              |                       | Earthmoving             |                            |      | 3.7  |       |      | 2.5  |      |      | 1.2 
|              |                       | Lift trucks             |                            |      | 0.9  |       |      | 0.9  |      |      |    
|              |                       | Other                   |                            |      | (1.5 | )     |      | (0.8 | )    |      | (0.7
|              |                       |                         |                            |      |      |       |      |      |      |      |     
|              |                       |                         | Total new equipment sales  |      |      | 7.5   |      |      | 6.1  |      |     
|              |                       |                         |                            |      |      |       |      |      |      |      |     
|              | Used equipment sales: |                         |                            |      |      |       |      |      |      |      |     
|              |                       | Cranes                  |                            |      | 4.0  |       |      | 3.9  |      |      | 0.1 
|              |                       | Aerial work platforms   |                            |      | 1.9  |       |      | 0.9  |      |      | 1.0 
|              |                       | Earthmoving             |                            |      | 4.4  |       |      | 2.7  |      |      | 1.7 
|              |                       | Lift trucks             |                            |      | 2.2  |       |      | 1.1  |      |      | 1.1 
|              |                       | Other                   |                            |      | 1.2  |       |      | 0.9  |      |      | 0.3 
|              |                       |                         |                            |      |      |       |      |      |      |      |     
|              |                       |                         | Total used equipment sales |      |      | 13.7  |      |      | 9.5  |      |     
|              |                       |                         |                            |      |      |       |      |      |      |      |     
|              | Parts sales           |                         |                            | 14.6 |      |       | 13.2 |      |      | 1.4  |     
|              | Service revenue       |                         |                            | 20.3 |      |       | 16.3 |      |      | 4.0  |     
|              | Other                 |                         |                            | 0.6  |      |       | (1.3 | )    |      | 1.9  |     
|              |                       |                         |                            |      |      |       |      |      |      |      |     
|              |                       |                         | Total gross profit         |      | $    | 106.3 |      | $    | 96.5 |      | $   
|              |                       |                         |                            |      |      |       |      |      |      |      |     

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:





21

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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

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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:



23

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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:





24

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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:



25

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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:



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.

26

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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.

27

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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.

|                                                      |                                    | Payments Due by Year
|----------------------------------------------------- | ---------------------------------- | --------------------
|
|
|Long-term debt (including subordinated notes payable) |                                    | $                   
|Interest payments on senior secured notes             |                                    |                     
|Interest payments on senior subordinated notes        |                                    |                     
|Senior secured credit facility                        |                                    |                     
|Capital lease obligations (including interest)        |                                    |                     
|Related party obligation (including interest)         |                                    |                     
|Operating leases(1)                                   |                                    |                     
|Other long-term obligations(2)                        |                                    |                     
|                                                      |                                    |                     
|                                                      | Total contractual cash obligations |                     
|                                                      |                                    |                     

---

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.

28

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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



29

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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.

|Name                  |  | Age |  | Title                                          
|--------------------- |  | --- |  | -----------------------------------------------
|Gary W. Bagley        |  | 56  |  | Chairman and Director                          
|John M. Engquist      |  | 50  |  | President, Chief Executive Officer and Director
|Lindsay C. Jones      |  | 41  |  | Chief Financial Officer and Secretary          
|Terence L. Eastman    |  | 51  |  | Senior Vice President, Finance                 
|William W. Fox        |  | 59  |  | Vice President, Cranes and Earthmoving         
|Robert W. Hepler      |  | 47  |  | Vice President, Hi-Lift                        
|Kenneth R. Sharp, Jr. |  | 58  |  | Vice President, Lift Trucks                    
|John D. Jones         |  | 46  |  | Vice President, Product Support                
|Dale W. Roesener      |  | 46  |  | Vice President, Fleet Management               
|Bradley W. Barber     |  | 30  |  | Vice President, Rental Operations              
|Bruce C. Bruckmann    |  | 50  |  | Director                                       
|Harold O. Rosser      |  | 55  |  | Director                                       
|J. Rice Edmonds       |  | 33  |  | Director                                       
|John T. Sawyer        |  | 59  |  | Director                                       
|Keith E. Alessi       |  | 49  |  | Director                                       
|Lawrence C. Karlson   |  | 61  |  | Director                                       

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.

30

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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

31

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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

32

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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

|Name and Principal Position                                      |  | Period         |  | Salary |                         | Bonus |    | Other Annual
Compensation |          
|---------------------------------------------------------------- |  | -------------- |  | ------ | ----------------------- | ----- | -- | ------------------------- | ---------
|John M. Engquist
Chief Executive Officer, President and Director |  | 2003
2002
2001 |  | $$$    | 500,000
500,000
377,000 |       |    | 
63,000
750,000          | (a)(a)(d)
|Robert W. Hepler
Vice President                                  |  | 2003
2002
2001 |  | $$$    | 330,000
330,000
307,000 |       | $  | 

120,000               | (a)      
|Gary W. Bagley
Chairman and Director                             |  | 2003
2002
2001 |  | $$$    | 290,000
200,000
200,000 |       |    | 

                     |          
|William W. Fox
Vice President                                    |  | 2003
2002
2001 |  | $$$    | 208,000
193,000
178,000 |       | $$ | 50,000
50,000
           | (a)(a)   
|Lindsay C. Jones
Chief Financial Officer and Secretary           |  | 2003
2002
2001 |  | $$$    | 200,000
156,000
150,000 |       | $  | 
40,000
                | (a)      

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Executive Employment Agreements

H&E assumed an employment agreement with each of Gary W. Bagley and Kenneth R. Sharp, Jr. dated as of February 4, 1998. Such agreements, as amended on
May 26, 1999, as further amended on December 6, 1999 and June 14, 2002, provide for, among other things:



33

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In
connection with the acquisition of ICM, H&E Holdings assumed a liability for subordinated deferred compensation for Mr. Bagley and Mr. Sharp. The deferred compensation
agreements provided for, among other things, deferred signing bonuses in the amount of $3,638,000 and $1,882,000, which are included in deferred compensation accounts for Mr. Bagley and
Mr. Sharp, respectively. As of December 31, 2003, the aggregate deferred compensation (including accrued interest of $1,655,000) was $6,655,000.

H&E
Holdings is obligated to pay Mr. Bagley and Mr. Sharp a cash payment in the amount equal to the then balance in their deferred compensation accounts 11 and
one-half years after June 17, 2002. Payments may also be made upon the occurrence of certain events including, cash distributions on the Series D Preferred Units of H&E
Holdings and an Approved Company Sale (as defined in the security holders agreement).

In
connection with the acquisition of ICM, H&E Equipment Services assumed a nonqualified employee deferred compensation plan under which certain employees had previously elected to defer
a portion of their annual compensation. Participants in the plan can no longer defer compensation. Compensation deferred under the plan is payable upon the termination, disability, or death of the
participants. The plan accumulates interest each year at a bank's prime rate in effect as of the beginning of January. This rate remains constant throughout the year. The effective rate for the 2003
plan year was 4.25 percent. The aggregate deferred compensation (including accrued interest of $2,413,000) at December 31, 2003 was $4,243,000.

On
June 29, 1999, H&E, formerly Gulf Wide, entered into an employment agreement with John M. Engquist. Such agreement, as amended on August 10, 2001, provides for, among
other things:



34

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On
August 3, 2001, the Board of Directors authorized H&E to pay Mr. Engquist supplemental bonuses of $250,000 during calendar year 2001 and $250,000 during calendar year
2002 (which was accrued as of December 31, 2002) which is in addition to any bonus by Mr. Engquist is entitled to receive pursuant to the terms of his employment agreement.

Compensation of Directors

We reimburse directors for any out-of-pocket expenses incurred by them in connection with services provided in such capacity. In addition,
we may compensate directors who are not our employees for services provided in such capacity.

Item 12.    Security Ownership of Certain Beneficial Owners and Management

H&E Holdings owns 100% of our limited liability company interests. The following tables set forth certain information with respect to the beneficial ownership of
H&E Holdings' Common Units and Voting Preferred Units by (1) each person or entity that is the beneficial owner of more than 5% of any class of the voting securities of H&E Holdings;
(2) each named executive officer; (3) each of our directors; and (4) all of our directors and executive officers as a group. These limited liability company interests constituted
5% of each class of the total outstanding limited liability company interests in H&E Holdings.

35

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Common Units Beneficial Ownership Table

|Name                                                         |  | Class A
Common Units
Beneficially
Owned |  | Percentage of
Class A
Common Units
Outstanding |   | Class B
Common Units
Beneficially
Owned |  | Percentage of
Class B
Common Units
Outstanding |   | Percentage of
Combined Voting
Power(1) |  
|------------------------------------------------------------ |  | --------------------------------------- |  | ---------------------------------------------- | - | --------------------------------------- |  | ---------------------------------------------- | - | -------------------------------------- | -
|Bruckmann, Rosser, Sherrill & Co., L.P.(2)                   |  | 731,845                                 |  | 34.2                                           | % |                                        |  |                                               |   | 17.4                                   | %
|Bruckmann, Rosser, Sherrill & Co., Inc.(3)                   |  | 12,674                                  |  | *                                              |   | 8,294.74                                |  | *                                              |   | 5.0                                    | %
|Bruckmann, Rosser, Sherrill & Co. II, L.P.(4)                |  | 1,241,815                               |  | 58.1                                           | % |                                        |  |                                               |   | 29.5                                   | %
|Bruckmann, Rosser, Sherrill & Co. L.L.C.(5)                  |  | 6,876                                   |  | 0.3                                            | % | 6,672.96                                |  | *                                              |   | 3.0                                    | %
|Bruce C. Bruckmann(6)                                        |  | 15,310                                  |  | 95.5                                           | % |                                        |  |                                               |   | 48.8                                   | %
|Harold O. Rosser(7)                                          |  | 2,982                                   |  | 95.5                                           | % |                                        |  |                                               |   | 48.8                                   | %
|J. Rice Edmonds(8)                                           |  | 1,256                                   |  | *                                              |   |                                        |  |                                               |   | *                                      |  
|John M. Engquist(9)                                          |  |                                        |  |                                               |   | 1,170,300.00                            |  | 56.4                                           | % | 27.8                                   | %
|Gary W. Bagley(9)                                            |  |                                        |  |                                               |   | 85,813.71                               |  | 4.1                                            | % | 2.0                                    | %
|Dale W. Roesener(9)                                          |  |                                        |  |                                               |   | 164,325.57                              |  | 7.9                                            | % | 3.9                                    | %
|Kristan Engquist Dunne(10)                                   |  |                                        |  |                                               |   | 74,700.0                                |  | 3.6                                            | % | 1.8                                    | %
|Don M. Wheeler(11)                                           |  |                                        |  |                                               |   | 263,735.75                              |  | 12.7                                           | % | 6.3                                    | %
|Lindsay C. Jones(9)                                          |  |                                        |  |                                               |   |                                        |  |                                               |   |                                       |  
|Robert W. Hepler(9)                                          |  |                                        |  |                                               |   |                                        |  |                                               |   |                                       |  
|William W. Fox(9)                                            |  |                                        |  |                                               |   |                                        |  |                                               |   |                                       |  
|All executive officers and directors as a group (10 persons) |  | 2,042,284                               |  | 95.6                                           | % | 1,271,081.41                            |  | 61.3                                           | % | 78.7                                   | %

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Voting Preferred Units Beneficial Ownership Table

The holders of the Common Units listed in the Common Units Beneficial Ownership Table are also the holders of H&E Holdings' Voting Preferred Units. For ease of
presentation we have not duplicated the names in the Voting Preferred Units Beneficial Ownership Table below and have presented the beneficial ownership information of such holders in the same order
as it appears in the Common Units Beneficial Ownership Table. The numbers presented in the table below reflect the beneficial ownership of H&E Holdings' Voting Preferred Units and have been rounded to
the nearest whole number. These limited liability company interests constituted 5% of each class of the total outstanding limited liability company interests in H&E Holdings as of the closing of the
offering of senior subordinated and senior secured notes.

|Series A
Preferred
Units
Beneficially
Owned |  | Percentage of
Series A
Preferred
Units
Outstanding |   | Series B
Preferred
Units
Beneficially
Owned |  | Percentage of
Series B
Preferred
Units
Outstanding |   | Series C
Preferred
Units
Beneficially
Owned |  | Percentage of
Series C
Preferred
Units
Outstanding |   | Series D
Preferred
Units
Beneficially
Owned |  | Percentage
of Series D
Preferred
Units
Outstanding |   | Percentage of
Combined
Voting Power(12) |  
|------------------------------------------- |  | -------------------------------------------------- | - | ------------------------------------------- |  | -------------------------------------------------- | - | ------------------------------------------- |  | -------------------------------------------------- | - | ------------------------------------------- |  | -------------------------------------------------- | - | --------------------------------------- | -
|9,789                                       |  | 88.6                                               | % | 8,577                                       |  | 29.1                                               | % | 19,405                                      |  | 22.9                                               | % |                                            |  |                                                   |   | 21.9                                    | %
|60                                          |  | *                                                  |   | 158                                         |  | *                                                  |   | 471                                         |  | *                                                  |   | 249                                         |  | *                                                  |   | *                                       |  
|                                           |  |                                                   |   | 10,854                                      |  | 36.8                                               | % | 42,376                                      |  | 50.0                                               | % | 17,156                                      |  | 36.7                                               | % | 40.9                                    | %
|36                                          |  | *                                                  |   | 95                                          |  | *                                                  |   | 273                                         |  | *                                                  |   | 168                                         |  | *                                                  |   | *                                       |  
|205                                         |  | 95.2                                               | % | 179                                         |  | 68.6                                               | % | 406                                         |  | 75.2                                               | % |                                            |  |                                                   |   | 65.2                                    | %
|40                                          |  | 95.2                                               | % | 35                                          |  | 68.6                                               | % | 79                                          |  | 75.2                                               | % |                                            |  |                                                   |   | 65.2                                    | %
|17                                          |  | *                                                  |   | 15                                          |  | *                                                  |   | 33                                          |  | *                                                  |   |                                            |  |                                                   |   |                                        |  
|                                           |  |                                                   |   |                                            |  |                                                   |   | 3,500                                       |  | 4.1                                                | % | 15,714                                      |  | 33.6                                               | % | 11.2                                    | %
|                                           |  |                                                   |   |                                            |  |                                                   |   | 1,250                                       |  | 1.5                                                | % |                                            |  |                                                   |   | *                                       |  
|                                           |  |                                                   |   | 800                                         |  | 2.7                                                | % | 1,607                                       |  | 1.9                                                | % |                                            |  |                                                   |   | 1.4                                     | %
|                                           |  |                                                   |   | 1,756                                       |  | 6.0                                                | % |                                            |  |                                                   |   | 822                                         |  | 1.8                                                | % | 1.5                                     | %
|                                           |  |                                                   |   | 5,400                                       |  | 18.3                                               | % | 8,135                                       |  | 9.6                                                | % | 10,390                                      |  | 22.2                                               | % | 13.9                                    | %
|                                           |  |                                                   |   |                                            |  |                                                   |   | 1,500                                       |  | 1.8                                                | % |                                            |  |                                                   |   | *                                       |  
|                                           |  |                                                   |   |                                            |  |                                                   |   |                                            |  |                                                   |   |                                            |  |                                                   |   |                                        |  
|                                           |  |                                                   |   |                                            |  |                                                   |   |                                            |  |                                                   |   |                                            |  |                                                   |   |                                        |  
|10,538                                      |  | 95.3                                               | % | 20,259                                      |  | 68.6                                               | % | 70,078                                      |  | 82.7                                               | % | 33,291                                      |  | 71.2                                               | % | 78.0                                    | %

---

36

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Item 13. Certain Relationships and Related Transactions

Management Agreements and Transaction Fees

Each of H&E and ICM were acquired by affiliates of BRS in 1999 pursuant to separate recapitalizations. In connection with the recapitalizations of H&E and ICM, we
entered into management agreements with each of BRS and Bruckmann, Rosser, Sherrill & Co., L.L.C. (BRS L.L.C.), pursuant to which BRS and BRS L.L.C. have agreed to provide certain advisory and
consulting services to us, relating to business and organizational strategy, financial and investment management and merchant and investment banking. In exchange for such services we agreed to pay BRS
and BRS L.L.C. (i) $7.2 million of transaction fees in connection with the ICM and H&E recapitalizations, (ii) an annual fee during the term of these agreements equal to the
lesser of $2.0 million or 1.75% of our yearly EBITDA, excluding operating lease expense, plus all reasonable out-of-pocket fees and expenses and (iii) a
transaction fee in connection with each material acquisition, divestiture or financing or refinancing we enter into in an amount equal to 1.25% of the aggregate value of such transaction plus all
reasonable out-of-pocket fees and expenses.

Contribution Agreement

The contribution agreement contains customary provisions for such agreements, including representations and warranties with respect to each of Gulf Wide and ICM
equityholders, covenants with respect to the consummation of the combination of H&E and ICM and various closing conditions, including the execution of a registration rights agreement and
securityholders agreement, and the consummation of this offering.

37

---

Securityholders Agreement

In connection with the offering of senior subordinated and senior secured notes, H&E Holdings entered into a securityholders agreement with BRS
Co-Investment, L.L.C. (BRS Co-Investment), BRSEC Co-Investment II, L.L.C. (BRS Co-Investment II), certain members of management and other members of H&E Holdings. The
securityholders agreement (i) restricts the transfer of the equity interests of H&E Holdings; (ii) grants tag-along rights on certain transfers of the equity interests of H&E
Holdings; (iii) requires the securityholders to consent to a sale of H&E Holdings to an independent third party if such sale is approved by the holders of a majority of the
then-outstanding common equity interests held by BRSEC Co-Investment and BRSEC Co-Investment II; and (iv) grants preemptive rights on certain issuances of
the equity interests of H&E Holdings. The securityholders agreement will terminate upon a sale of H&E Holdings approved by the holders of a majority of the then-outstanding common equity
interests held by BRS Co-Investment and BRSEC Co-Investment II.

Registration Rights Agreements

In connection with the offering of senior subordinated and senior secured notes. H&E Holdings entered into a registration rights agreement with BRS
Co-Investment, BRSEC Co-Investment II, certain members of management and other members of H&E Holdings. Pursuant to the terms of the registration rights agreement, the holders
of a majority of the then-outstanding common equity interest held by BRS Co-Investment and BRSEC Co-Investment II have the right to require H&E Holdings, subject to
certain conditions, to register any or all of their common equity interests under the Securities Act at H&E Holdings' expense. In addition, all holders of the common equity interests of H&E Holdings
are entitled to request the inclusion of any common equity interests subject to the registration rights agreement in any registration statement at the expense of H&E Holdings whenever H&E Holdings
proposes to register any of its common equity interests under the Securities Act. In connection with all such registration, H&E Holdings has agreed to indemnify all holders of its common equity
interests against certain liabilities, including liabilities under the Securities Act.

Limited Liability Company Agreement

In connection with the offering of senior subordinated and senior secured notes, BRS Co-Investment, BRSEC Co-Investment II, certain
members of management and the other members of H&E Holdings entered into a limited liability company agreement of H&E Holdings. This operating agreement governs the relative rights and duties of the
members of H&E Holdings.

Membership Interests.The ownership interests of the members in H&E Holdings consist of Preferred Units and Common Units. The
Common Units represent the common equity of H&E Holdings and consist of Class A Common Units and Class B Common Units. The Preferred Units consist of Series A Preferred Units.
Series B Preferred Units, Series C Preferred Units and Series D Preferred Units (the "Voting Preferred Units"). Each member is entitled to (x) two votes per Class A
Common Unit held by such member, (y) one vote per Class B Common Unit held by such member and (z) one vote for each Voting Preferred Unit held by such member. Holders of the
Preferred Units are entitled to return of capital contributions prior to any distributions made to holders of the Common Units.

Distributions.Subject to any restrictions contained in any agreements involving payments to third parties, the Board of
Directors of H&E Holdings (the "Board") may make distributions, whether in available cash or other assets of H&E Holdings, at any time or from time to time in the following order of priority:



38

---



The
limited liability company agreement places certain restrictions on the ability of H&E Holdings to make distributions attributable to the Preferred Units prior to June 30,
2022.

Board of Directors.Pursuant to the securityholders agreement, the holders of a majority of the common equity units held by
BRS Co-Investment and BRSEC Co-Investment II designate a majority of the directors of the Board. The Board consists of "Class A Directors" and "Class B
Directors." Each Class A Director is entitled to two votes and each Class B Director is entitled to one vote. The initial Board consists of three Class A Directors and two
Class B Directors. The initial Class A Directors are Bruce C. Bruckmann, Harold O. Rosser and J. Rice Edmonds, and the initial Class B Directors are John M. Engquist and Gary W.
Bagley. At no time will the authorized number of Class B Directors exceed that number which would provide all of the then authorized Class B Directors with a number of votes that exceed
50% of the number of votes of the then authorized number of Class A Directors. The Class A Directors are elected by the members who own a majority of the number of votes of all Common
Units then-outstanding. The Class B Directors are elected by the members who own a majority of the number of votes of all the Voting Preferred Units then-outstanding.

The BRS Purchase

In connection with the senior subordinated note offering, BRS was paid $7.2 million by H&E Equipment Services on account of $7.2 million of
obligations payable to BRS and its affiliates in connection with the recapitalizations of H&E and ICM and BRS purchased a portion of the securities issued in the senior subordinated note offering. In
connection with the senior subordinated note offering, BRS purchased notes having an accreted value of $7.2 million and a corresponding pro rata share of the limited liability company interests
included in the securities offered thereby.

Other Related Party Transactions

We lease certain of our real estate facilities, charter an aircraft for business purposes and place a portion of our liability insurance through an agency in
which John M. Engquist, our Chief Executive Officer and President, has an economic interest. In 2003, our payments for such transactions totaled $531,000, $204,000 and $5,694,000, respectively.

We
lease certain of our facilities from entities controlled by Don M. Wheeler, an equityholder. In 2003, our lease payments to such entities totaled $1,437,000.

We
lease certain real estate from an entity controlled by Dale W. Roesener, an executive officer. In 2003, our lease payments to such entity totaled $519,000.

We
lease certain of our facilities from an equity owner and an employee. In 2003, our lease payments for these facilities totaled $256,000.

39

---

We
purchase products and services from and sell products and services to an equipment company in which John M. Engquist, our Chief Executive Officer, has an economic interest. In 2003,
our purchases totaled $573,000 and our sales totaled $194,000. Amounts owed this equipment company were $21,000 and amounts due from this equipment company were $11,000 as of December 31, 2003.

In
connection with the recapitalization of H&E in 1999, we entered into a $3.0 million consulting and non-competition agreement with Thomas R. Engquist, the father of
John M. Engquist, our Chief Executive Officer and President. 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 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
recorded a $1.3 million expense for the present value of the remaining future payments.

We
owed companies related through common ownership $7,000 and $7,000 at December 31, 2003 and 2002, respectively. The Company had no sales transactions with these affiliated
companies during 2003, 2002 and 2001.

We
rented equipment from an officer for $462,000 for the year ended December 31, 2001. The equipment was purchased from the officer for $3,000,000 during 2001.

We
had a management agreement with a company related through common ownership, payable in the greater of $500,000 or 1% of earnings before interest, taxes, depreciation and amortization.
The total paid for the years ended December 31, 2002 and 2001, was $670,000 and $530,000, respectively. The management agreement terminated on June 17, 2002.

In
connection with the acquisition of ICM, we entered into a management agreement with an affiliate payable in the greater of $2.0 million annually of 1.75% of annual earnings
before interest, taxes, depreciation, and amortization, excluding operating lease expense, plus all reasonable out-of-pocket expenses. The total amount paid to the affiliate
under the management agreement for the years ended December 31, 2003 and 2002 was $1,549,000 and $1,085,000, respectively. We had a receivable from this affiliate of $229,000 and $210,000 as of
December 31, 2003 and 2002, respectively.

We
had consulting and noncompetition agreements with two former stockholders of Coastal Equipment, Inc. acquired in 1999 for $1,000,000, payable in four annual installments of
$250,000 beginning March 1, 2000 and ending March 31, 2003.

We
expensed $505,000 and $261,000 in 2003 to the deferred compensation accounts of Gary W. Bagley, our Chairman, and Kenneth R. Sharp, Jr., an executive officer, respectively.

Item 14. Principal Accountant Fees and Services

Aggregate fees incurred to the Company during the years ended December 31, 2003 and 2002 by its principal accounting firm KPMG LLP are set forth below. The
Audit Committee of the Company's

40

---

Board
of Directors has considered whether the provision of the non-audit services described below is compatible with maintaining the principal accountant's independence.

2003

2002Audit fees(1)

$
556,645

$
633,174Audit related fees(2)


15,700


13,270Tax fees(3)


140,075


63,065All other fees(4)





Total aggregate fees billed

$
712,420

$
709,509


---

Item 15. Financial Statement Schedules, Reports on Form 8-K and Exhibits



The
following consolidated financial statements of H&E Equipment Services L.L.C. are included in Part II, Item 8:

PageIndependent Auditors' Report

F-1Consolidated Balance Sheets as of December 31, 2003 and 2002

F-2Consolidated Statements of Operations for the years ended December 31, 2003, 2002 and 2001

F-3Consolidated Statements of Members' Equity (Deficit) for the years ended December 31, 2003, 2002 and 2001

F-4Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001

F-5Notes to Consolidated Financial Statements

F-7




Schedule II Valuation and Qualifying Accounts



|3.1 |  | Articles of Organization of Gulf Wide Industries, L.L.C. (incorporated by reference to Exhibit 3.1 to Registration Statement on Form S-4 (File No. 333-99589)).
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  |                                                                                                                                                                

41

---

|3.2   |  | Amended and Restated Articles of Organization of Gulf Wide Industries, L.L.C. (incorporated by reference to Exhibit 3.2 to Registration Statement on Form S-4 (File No. 333-99589)).                                                                                                                                                                                                                                                      
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.3   |  | Amended Articles of Organization of Gulf Wide Industries, L.L.C., Changing Its Name To H&E Equipment Services L.L.C. (incorporated by reference to Exhibit 3.3 to Registration Statement on Form S-4 (File No. 333-99589)).                                                                                                                                                                                                               
|3.4   |  | Amended and Restated Operating Agreement of H&E Equipment Services L.L.C. (incorporated by reference to Exhibit 3.8 to Registration Statement on Form S-4 (File No.  333-99589)).                                                                                                                                                                                                                                                         
|4.1   |  | Indenture, among H&E Equipment Services L.L.C., H&E Finance Corp., the guarantors party thereto and The Bank of New York, dated as of June 17, 2002 (incorporated by reference to Exhibit 4.1 to Registration Statement on Form S-4
(File No. 333-99589)).                                                                                                                                                                                
|4.2   |  | Registration Rights Agreement, among H&E Equipment Services L.L.C., H&E Finance Corp., the guarantors party thereto and Credit Suisse First Boston Corporation, dated as of June 17, 2002 (incorporated by reference to Exhibit 4.2 to
Registration Statement on Form S-4 (File No. 333-99589)).                                                                                                                                          
|10.1  |  | Credit Agreement among H&E Equipment Services L.L.C., Great No. thern Equipment, Inc., H&E Holdings, L.L.C., GNE Investments, Inc., H&E Finance Corp. General Electric Capital Corporation, and the Lenders party thereto dated as of
June 17, 2002 (incorporated by reference to Exhibit 10.1 to Registration Statement on Form S-4 (File No. 333-99589)).                                                                               
|10.1a |  | Amendment No. 1 to Credit Agreement among H&E Equipment Services L.L.C., Great No. thern Equipment, Inc., H&E Holdings, L.L.C., GNE Investments, Inc., H&E Finance Corp., General Electric Corporation and the Lenders party thereto
dated as of March 31, 2003 (incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q of H&E Equipment Services L.L.C. for the quarter ended March 31, 2003 (File No. 333-999587)). 
|10.1b |  | Amendment No. 2 to Credit Agreement among H&E Equipment Services L.L.C., Great Northern Equipment, Inc., H&E Holdings, L.L.C., GNE Investments, Inc., H&E Finance Corp., General Electric Corporation and the Lenders party thereto dated
as of May 14, 2003 (incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q of H&E Equipment Services L.L.C. for the quarter ended September 30, 2003 (File No. 333-999587)).
|10.2  |  | Contribution Agreement and Plan of Reorganization, dated as of June 14, 2002, by and among H&E Holdings, L.L.C., BRSEC Co-Investment II, LLC (incorporated by reference to Exhibit 10.2 to Registration Statement on Form S-4 (File
No. 333-99589)).                                                                                                                                                                                      
|10.3  |  | Securityholders Agreement, dated as of June 17, 2002 by and among H&E Holdings LLC, BRSEC Co-Investment, LLC, BRSEC Co-Investment II, LLC, certain members of management and other members of H&E Holdings LLC (incorporated by reference to
Exhibit 10.3 to Registration Statement on Form S-4 (File No. 333-99589)).                                                                                                                    
|10.4  |  | Registration Rights Agreement, dated as of June 17, 2002 by and among H&E Holdings LLC, BRSEC Co-Investment, LLC, BRSEC Co-Investment II, LLC, certain members of management and other members of H&E Holdings LLC (incorporated by reference
to Exhibit 10.4 to Registration Statement on Form S-4 (File No. 333-99589)).                                                                                                                
|10.5  |  | Management Agreement, dated May 26, 1999, by and between Bruckman, Rosser, Sherrill & Co., Inc. and ICM Equipment Company, L.L.C. (incorporated by reference to Exhibit 10.5 to Registration Statement on Form S-4 (File
No. 333-99589)).                                                                                                                                                                                                 
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                           

42

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|10.6  |  | Management Agreement, dated as of August 10, 2001, by and among Bruckman, Rosser, Sherrill & Co., Inc., Head & Engquist Equipment, L.L.C. and Gulf Wide Industries, L.L.C. (incorporated by reference to Exhibit 10.6 to Registration
Statement on Form S-4 (File No. 333-99589)). 
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.7  |  | First Amended and Restated Management Agreement, dated as of June 17, 2002, Bruckman, Rosser, Sherrill & Co., Inc., H&E Holdings, L.L.C. and H&E Equipment Services, L.L.C. (incorporated by reference to Exhibit 10.7 to
Registration Statement on Form S-4 (File No. 333-99589)).
|10.8  |  | Employment Agreement, dated as of June 29, 1999, by and between Gulf Wide Industries, L.L.C., and John M. Engquist (incorporated by reference to Exhibit 10.8 to Registration Statement on Form S-4 (File No. 333-99589)).                                                         
|10.9  |  | First Amendment to the Employment Agreement, dated as of August 10, 2001, by and among Gulf Wide Industries, L.L.C. and John M. Engquist (incorporated by reference to Exhibit 10.9 to Registration Statement on Form S-4 (File
No. 333-99589)).                                   
|10.10 |  | Employment Agreement, dated as of February 4, 1998, by and between ICM Equipment Company, L.L.C., and Gary Bagley (incorporated by reference to Exhibit 10.10 to Registration Statement on Form S-4 (File No. 333-99589)).                                                         
|10.11 |  | First Amendment to the Employment Agreement, dated as of May 26, 1999, by and between ICM Equipment Company, L.L.C., and Gary Bagley (incorporated by reference to Exhibit 10.11 to Registration Statement on Form S-4 (File
No. 333-99589)).                                      
|10.12 |  | Second Amendment to the Employment Agreement, dated as of December 6, 1999, by and between ICM Equipment Company, L.L.C., and Gary Bagley (incorporated by reference to Exhibit 10.12 to Registration Statement on Form S-4 (File
No. 333-99589)).                                 
|10.13 |  | Third Amendment to the Employment Agreement, dated as of June 14, 2002, by and between ICM Equipment Company, L.L.C., and Gary Bagley (incorporated by reference to Exhibit 10.13 to Registration Statement on Form S-4 (File
No. 333-99589)).                                     
|10.14 |  | Employment Agreement, dated as of February 4, 1998, between ICM Equipment Company and Kenneth Sharp, Jr. (incorporated by reference to Exhibit 10.14 to Registration Statement on Form S-4 (File No. 333-99589)).                                                                  
|10.15 |  | First Amendment to the Employment Agreement, dated as of May 26, 1999, between ICM Equipment Company, L.L.C. and Kenneth Sharp, Jr. (incorporated by reference to Exhibit 10.15 to Registration Statement on Form S-4 (File
No. 333-99589)).                                       
|10.16 |  | Second Amendment to the Employment Agreement, dated as of December 6, 1999, between ICM Equipment Company, L.L.C. and Kenneth Sharp, Jr. (incorporated by reference to Exhibit 10.16 to Registration Statement on Form S-4 (File
No. 333-99589)).                                  
|10.17 |  | Third Amendment to the Employment Agreement, dated as of June 14, 2002, between ICM Equipment Company, L.L.C. and Kenneth Sharp, Jr. (incorporated by reference to Exhibit 10.17 to Registration Statement on Form S-4 (File
No. 333-99589)).                                      
|10.18 |  | Deferred Compensation Agreement made and entered into as of June 17, 2002. by and between Gary Bagley and H&E Holdings, L.L.C. (incorporated by reference to Exhibit 10.18 to Registration Statement on Form S-4 (File
No. 333-99589)).                                            
|10.19 |  | Deferred Compensation Agreement made and entered into as of June 17, 2002. by and between Kenneth Sharp, Jr. and H&E Holdings, L.L.C. (incorporated by reference to Exhibit 10.19 to Registration Statement on Form S-4 (File
No. 333-99589)).                                     
|      |  |                                                                                                                                                                                                                                                                                    

43

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|10.20  |  | Consulting and Noncompetition Agreement, dated as of June 29, 1999, between Head & Engquist Equipment, L.L.C. and Thomas R. Engquist (incorporated by reference to Exhibit 10.20 to Registration Statement on Form S-4 (File
No. 333-99589)).                                                                                                                 
|------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.21  |  | Purchase Agreement by and among H&E Equipment Services L.L.C., H&E Finance Corp., the guarantors party thereto and Credit Suisse First Boston Corporation, dated June 3, 2003 (incorporated by reference to Exhibit 10.21 to
Registration Statement on Form S4 (File No. 333-99587)).                                                                         
|10.21a |  | Amendment No. 1 to Purchase Agreement, among H&E Equipment Services L.L.C., H&E Finance Corp., the guarantors party thereto, Credit Suisse First Boston Corporation, Bank of America Securities L.L.C. and Fleet Securities, Inc. dated
June 17, 2002 (incorporated by reference to Exhibit 10.21 to Registration Statement on Form S-4 (File No. 333-99589)).
|10.22  |  | Investor Rights Agreement by and among H&E Holdings, L.L.C., BRSEC Co-Investment, LLC, BRSEC Co-Investment II, LLC and Credit Suisse First Boston Corporation, dated as of June 17, 2002 (incorporated by reference to Exhibit 10.22 to
Registration Statement on Form S-4 (File No. 333-99589)).                                                             
|10.24  |  | Security Agreement, dated June 17, 2002, between H&E Equipment Services L.L.C. and The Bank of New York (incorporated by reference to Exhibit 10.24 to Annual Report on Form 10-K of the Equipment Services L.L.C. for the year ended
December 31, 2002 (File No. 333-99587)).                                                                                
|10.25  |  | Pledge Agreement, dated June 17, 2002, between H&E Equipment Services L.L.C. and The Bank of New York (incorporated by reference to Exhibit 10.25 to Annual Report on Form 10-K of the Equipment Services L.L.C. for the year ended
December 31, 2002 (File No. 333-99587)).                                                                                  
|10.26  |  | Trademark Security Agreement, dated June 17, 2002, between H&E Equipment Services L.L.C. and The Bank of New York (incorporated by reference to Exhibit 10.26 to Annual Report on Form 10-K of the Equipment Services L.L.C. for the
year ended December 31, 2002 (File No. 333-99587)).                                                                      
|10.27  |  | Security Agreement, dated June 17, 2002, between H&E Finance Corp. and The Bank of New York (incorporated by reference to Exhibit 10.27 to Annual Report on Form 10-K of the Equipment Services L.L.C. for the year ended
December 31, 2002 (File No. 333-99587)).                                                                                            
|10.28  |  | Security Agreement, dated June 17, 2002, between GNE Investments, Inc. and The Bank of New York (incorporated by reference to Exhibit 10.28 to Annual Report on Form 10-K of the Equipment Services L.L.C. for the year ended
December 31, 2002 (File No. 333-99587)).                                                                                        
|10.29  |  | Pledge Agreement, dated June 17, 2002, between GNE Investments, Inc. and The Bank of New York (incorporated by reference to Exhibit 10.29 to Annual Report on Form 10-K of the Equipment Services L.L.C. for the year ended
December 31, 2002 (File No. 333-99587)).                                                                                          
|10.30  |  | Security Agreement, dated June 17, 2002, between Great Northern Equipment, Inc. and The Bank of New York (incorporated by reference to Exhibit 10.30 to Annual Report on Form 10-K of the Equipment Services L.L.C. for the year ended
December 31, 2002 (File No. 333-99587)).                                                                               
|10.31  |  | Trademark Security Agreement, dated June 17, 2002, between Great Northern Equipment, Inc. and The Bank of New York (incorporated by reference to Exhibit 10.31 to Annual Report on Form 10-K of the Equipment Services L.L.C. for the year
ended December 31, 2002 (File No. 333-99587)).                                                                     
|       |  |                                                                                                                                                                                                                                                                                                                                                               

44

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|10.32 |  | Patent Security Agreement, dated June 17, 2002, between Great Northern Equipment, Inc. and The Bank of New York (incorporated by reference to Exhibit 10.32 to Annual Report on Form 10-K of the Equipment Services L.L.C. for the year
ended December 31, 2002 (File No. 333-99587)).
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1  |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                                                                                                                                                                                             
|31.2  |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                                                                                                                                                                                             

---

45

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Independent Auditors' Report

The
Board of Directors
H&E Equipment Services L.L.C.:

We
have audited the accompanying consolidated balance sheets of H&E Equipment Services L.L.C. and subsidiaries as of December 31, 2003 and 2002, and the related consolidated
statements of operations, members' equity (deficit) and cash flows for each of the years in the three-year period ended December 31, 2003. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We
conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of H&E Equipment Services L.L.C. and subsidiaries
as of December 31, 2003 and 2002, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2003, in
conformity with accounting principles generally accepted in the United States of America.

As
discussed in Note 2 to the consolidated financial statements, the Company adopted Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible
Assets" in the year ended December 31, 2002.

/s/
KPMG LLP

Salt
Lake City, Utah
February 20, 2004

F-1

---



H&E EQUIPMENT SERVICES L.L.C.        CONSOLIDATED BALANCE SHEETS        AS OF DECEMBER 31, 2003 AND 2002        (Dollars in thousands, except share amounts)

|                                                                                                              |                                                 | 2003              |         | 2002   
|------------------------------------------------------------------------------------------------------------- | ----------------------------------------------- | ----------------- | ------- | -------
|Assets                                                                                                        |                                                 |                   |         |        
|Cash                                                                                                          |                                                 | $                 | 3,891   |        
|Receivables, net of allowance for doubtful accounts of $3,188
and $3,609, respectively                        |                                                 |                   | 62,615  |        
|Inventories, net                                                                                              |                                                 |                   | 44,078  |        
|Prepaid expenses and other assets                                                                             |                                                 |                   | 2,521   |        
|Rental equipment, net of accumulated depreciation of $113,546 and $87,064, respectively                       |                                                 |                   | 259,282 |        
|Property and equipment, net of accumulated depreciation and amortization of $13,906 and $13,338, respectively |                                                 |                   | 15,128  |        
|Deferred financing costs, net of accumulated amortization of $2,751 and $854, respectively                    |                                                 |                   | 11,235  |        
|Goodwill, net                                                                                                 |                                                 |                   | 3,204   |        
|                                                                                                              |                                                 |                   |         |        
|                                                                                                              | Total assets                                    |                   | $       | 401,954
|                                                                                                              |                                                 |                   |         |        
|Liabilities and Member's Equity (Deficit)                                                                     |                                                 |                   |         |        
|Liabilities:                                                                                                  |                                                 |                   |         |        
|                                                                                                              | Amount due on senior secured credit facility    |                   | $       | 43,958 
|                                                                                                              | Accounts payable                                |                   |         | 91,446 
|                                                                                                              | Accrued expenses payable and other liabilities  |                   |         | 15,901 
|                                                                                                              | Accrued loss from litigation                    |                   |         | 17,434 
|                                                                                                              | Related party obligation                        |                   |         | 1,235  
|                                                                                                              | Notes payable                                   |                   |         | 1,063  
|                                                                                                              | Senior secured notes, net of discount           |                   |         | 198,660
|                                                                                                              | Senior subordinated notes, net of discount      |                   |         | 43,010 
|                                                                                                              | Capital lease obligations                       |                   |         | 5,351  
|                                                                                                              | Deferred compensation payable                   |                   |         | 10,898 
|                                                                                                              |                                                 |                   |         |        
|                                                                                                              |                                                 | Total liabilities |         |        
|                                                                                                              |                                                 |                   |         |        
|Member's equity (deficit)                                                                                     |                                                 |                   | (27,002 | )      
|                                                                                                              |                                                 |                   |         |        
|                                                                                                              | Total liabilities and member's equity (deficit) |                   | $       | 401,954
|                                                                                                              |                                                 |                   |         |        

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

F-2

---



H&E EQUIPMENT SERVICES L.L.C.        CONSOLIDATED STATEMENTS OF OPERATIONS        FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001        (Dollars in thousands)

|                                             |                      | 2003                          |         | 2002    |         | 2001    |        
|-------------------------------------------- | -------------------- | ----------------------------- | ------- | ------- | ------- | ------- | -------
|Revenues:                                    |                      |                               |         |         |         |         |        
|                                             | Equipment rentals    |                               | $       | 153,851 |         | $       | 136,624
|                                             | New equipment sales  |                               |         | 81,692  |         |         | 72,143 
|                                             | Used equipment sales |                               |         | 70,926  |         |         | 52,487 
|                                             | Parts sales          |                               |         | 53,658  |         |         | 47,218 
|                                             | Service revenue      |                               |         | 33,349  |         |         | 27,755 
|                                             | Other                |                               |         | 20,206  |         |         | 15,473 
|                                             |                      |                               |         |         |         |         |        
|                                             |                      | Total revenues                |         |         | 413,682 |         |        
|                                             |                      |                               |         |         |         |         |        
|Cost of Revenues:                            |                      |                               |         |         |         |         |        
|                                             | Rental depreciation  |                               |         | 54,932  |         |         | 46,471 
|                                             | Rental expense       |                               |         | 49,344  |         |         | 37,408 
|                                             | New equipment sales  |                               |         | 74,166  |         |         | 66,055 
|                                             | Used equipment sales |                               |         | 57,207  |         |         | 43,026 
|                                             | Parts sales          |                               |         | 39,086  |         |         | 34,011 
|                                             | Service revenue      |                               |         | 13,043  |         |         | 11,438 
|                                             | Other                |                               |         | 19,638  |         |         | 16,813 
|                                             |                      |                               |         |         |         |         |        
|                                             |                      | Total cost of revenues        |         |         | 307,416 |         |        
|                                             |                      |                               |         |         |         |         |        
|                                             |                      | Gross profit                  |         |         | 106,266 |         |        
|Selling, general and administrative expenses |                      |                               | 99,872  |         |         | 82,294  |        
|Loss from litigation                         |                      |                               | 17,434  |         |         |        |        
|Related party expense                        |                      |                               | 1,275   |         |         |        |        
|Gain on sale of property and equipment       |                      |                               | 80      |         |         | 59      |        
|                                             |                      |                               |         |         |         |         |        
|                                             |                      | Income (loss) from operations |         |         | (12,235 | )       |        
|                                             |                      |                               |         |         |         |         |        
|Other income (expense):                      |                      |                               |         |         |         |         |        
|                                             | Interest expense     |                               |         | (39,394 | )       |         | (28,955
|                                             | Other, net           |                               |         | 221     |         |         | 372    
|                                             |                      |                               |         |         |         |         |        
|                                             |                      | Total other expense, net      |         |         | (39,173 | )       |        
|                                             |                      |                               |         |         |         |         |        
|Income (loss) before income taxes            |                      |                               | (51,408 | )       |         | (14,340 | )      
|Income tax provision (benefit)               |                      |                               | 24      |         |         | (1,271  | )      
|                                             |                      |                               |         |         |         |         |        
|                                             |                      | Net income (loss)             |         | $       | (51,432 | )       | $      
|                                             |                      |                               |         |         |         |         |        

The
accompanying notes are an integral part of these consolidated statements

F-3

---



H&E EQUIPMENT SERVICES L.L.C.        CONSOLIDATED STATEMENTS OF MEMBERS' EQUITY (DEFICIT)        FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001        (Dollars in
thousands)

|                                                                                                                                                                                    |                  | Series A
Senior
Preferred |        | Junior
Preferred |   | Class A
Common |   | Class B
Common |        | Additional
Paid-in
Capital |   | Accumulated
Deficit |   | Member's
Interest |         | Total
Members'
Equity
(Deficit) |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------- | ------------------------- | ------ | ---------------- | - | -------------- | - | -------------- | ------ | -------------------------- | - | ------------------- | - | ----------------- | ------- | ------------------------------- | -
|December 31, 2000                                                                                                                                                                   |                  | $                         |       |                  | $ |               |   | $              | 1,961  |                            | $ |                    |   | $                 | 3,000   |                                 | $
|Net income                                                                                                                                                                          |                  |                           |       |                  |   |               |   |                |       |                            |   |                    |   |                   |        |                                 |  
|Accretion of liquidation value on Preferred Units outside of equity                                                                                                                 |                  |                           |       |                  |   |               |   |                |       |                            |   |                    |   |                   |        |                                 |  
|Recapitalization and issuance of new securities                                                                                                                                     |                  |                           | 1,235  |                  |   | 5,000          |   |                | (809   | )                          |   | 1,152               |   |                   | 47,090  |                                 |  
|Accretion of liquidation value on Preferred Units outside of equity                                                                                                                 |                  |                           |       |                  |   |               |   |                |       |                            |   |                    |   |                   |        |                                 |  
|                                                                                                                                                                                    |                  |                           |        |                  |   |                |   |                |        |                            |   |                     |   |                   |         |                                 |  
|December 31, 2001                                                                                                                                                                   |                  |                           | 1,235  |                  |   | 5,000          |   |                | 1,152  |                            |   | 1,152               |   |                   | 50,090  |                                 |  
|Net lossJanuary 1, 2002                                                                                                                                                            |                  |                           |        |                  |   |                |   |                |        |                            |   |                     |   |                   |         |                                 |  
|                                                                                                                                                                                    | to June 17, 2002 |                           |        |                 |   |                |  |                |        |                           |   |                     |  |                   |         |                                |  
|Accretion of liquidation value on Preferred Units outside of equity through June 17, 2002                                                                                           |                  |                           |       |                  |   |               |   |                |       |                            |   |                    |   |                   |        |                                 |  
|Members' equity issued with Senior Subordinated Notes at June 17, 2002                                                                                                              |                  |                           |       |                  |   |               |   |                |       |                            |   |                    |   |                   |        |                                 |  
|Conversion of Senior Exchangeable Preferred Units at June 17, 2002                                                                                                                  |                  |                           |       |                  |   |               |   |                |       |                            |   |                    |   |                   |        |                                 |  
|Conversion of Senior Subordinated Preferred Units at June 17, 2002                                                                                                                  |                  |                           |       |                  |   |               |   |                |       |                            |   |                    |   |                   |        |                                 |  
|Conversion of series A Senior Preferred, Junior Preferred, Class A Common, Class B Common, Additional Paid-in Capital and accumulated deficit to member's interest at June 17, 2002 |                  |                           | (1,235 | )                |   | (5,000         | ) |                | (1,152 | )                          |   | (1,152              | ) |                   | (50,090 | )                               |  
|Net lossJune 17, 2002 to December 31, 2002                                                                                                                                         |                  |                           |       |                  |   |               |   |                |       |                            |   |                    |   |                   |        |                                 |  
|                                                                                                                                                                                    |                  |                           |        |                  |   |                |   |                |        |                            |   |                     |   |                   |         |                                 |  
|December 31, 2002                                                                                                                                                                   |                  |                           |       |                  |   |               |   |                |       |                            |   |                    |   |                   |        |                                 |  
|Net loss                                                                                                                                                                            |                  |                           |       |                  |   |               |   |                |       |                            |   |                    |   |                   |        |                                 |  
|                                                                                                                                                                                    |                  |                           |        |                  |   |                |   |                |        |                            |   |                     |   |                   |         |                                 |  
|December 31, 2003                                                                                                                                                                   |                  | $                         |       |                  | $ |               |   | $              |       |                            | $ |                    |   | $                 |        |                                 | $
|                                                                                                                                                                                    |                  |                           |        |                  |   |                |   |                |        |                            |   |                     |   |                   |         |                                 |  

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

F-4

---



H&E EQUIPMENT SERVICES L.L.C.    CONSOLIDATED STATEMENTS OF CASH FLOWS    FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001    (Dollars in thousands)

|                                                                                         |                                                                           | 2003                                                |                                           | 2002     |         | 2001    |         
|---------------------------------------------------------------------------------------- | ------------------------------------------------------------------------- | --------------------------------------------------- | ----------------------------------------- | -------- | ------- | ------- | --------
|Cash flows from operating activities:                                                    |                                                                           |                                                     |                                           |          |         |         |         
|Net income (loss)                                                                        |                                                                           | $                                                   | (51,432                                   | )        | $       | (13,069 | )       
|Adjustments to reconcile net income (loss) to net cash provided by operating activities: |                                                                           |                                                     |                                           |          |         |         |         
|                                                                                         | Depreciation on property and equipment                                    |                                                     |                                           | 3,891    |         |         | 3,020   
|                                                                                         | Depreciation on rental equipment                                          |                                                     |                                           | 54,932   |         |         | 46,471  
|                                                                                         | Amortization of loan discounts and deferred financing costs               |                                                     |                                           | 2,394    |         |         | 1,091   
|                                                                                         | Amortization of goodwill                                                  |                                                     |                                           |         |         |         |        
|                                                                                         | Provision for losses on accounts receivable                               |                                                     |                                           | 1,269    |         |         | 1,517   
|                                                                                         | Gain on sale of property and equipment                                    |                                                     |                                           | (80      | )       |         | (59     
|                                                                                         | Gain on sale of rental equipment                                          |                                                     |                                           | (11,724  | )       |         | (6,326  
|                                                                                         | Deferred income taxes                                                     |                                                     |                                           |         |         |         | (1,306  
|                                                                                         | Changes in operating assets and liabilities, net of business combination: |                                                     |                                           |          |         |         |         
|                                                                                         |                                                                           | Receivables, net                                    |                                           |          | 1,261   |         |         
|                                                                                         |                                                                           | Inventories, net                                    |                                           |          | (4,368  | )       |         
|                                                                                         |                                                                           | Prepaid expenses and other assets                   |                                           |          | (576    | )       |         
|                                                                                         |                                                                           | Accounts payable                                    |                                           |          | 233     |         |         
|                                                                                         |                                                                           | Accrued expenses payable and other liabilities      |                                           |          | 4,882   |         |         
|                                                                                         |                                                                           | Accrued loss from litigation                        |                                           |          | 17,434  |         |         
|                                                                                         |                                                                           | Deferred compensation payable                       |                                           |          | 665     |         |         
|                                                                                         |                                                                           |                                                     |                                           |          |         |         |         
|                                                                                         |                                                                           |                                                     | Net cash provided by operating activities |          |         | 18,781  |         
|                                                                                         |                                                                           |                                                     |                                           |          |         |         |         
|Cash flows from investing activities:                                                    |                                                                           |                                                     |                                           |          |         |         |         
|                                                                                         | Purchases of property and equipment                                       |                                                     |                                           | (2,483   | )       |         | (3,821  
|                                                                                         | Purchases of rental equipment                                             |                                                     |                                           | (30,025  | )       |         | (51,919 
|                                                                                         | Proceeds from sale of property and equipment                              |                                                     |                                           | 2,700    |         |         | 115     
|                                                                                         | Proceeds from sale of rental equipment                                    |                                                     |                                           | 51,279   |         |         | 33,738  
|                                                                                         | Cash acquired in ICM business combination                                 |                                                     |                                           |         |         |         | 3,643   
|                                                                                         |                                                                           |                                                     |                                           |          |         |         |         
|                                                                                         |                                                                           | Net cash provided by (used in) investing activities |                                           |          | 21,471  |         |         
|                                                                                         |                                                                           |                                                     |                                           |          |         |         |         
|Cash flows from financing activities:                                                    |                                                                           |                                                     |                                           |          |         |         |         
|                                                                                         | Net proceeds from issuance of senior secured notes                        |                                                     |                                           |         |         |         | 198,526 
|                                                                                         | Net proceeds from issuance of senior subordinated notes                   |                                                     |                                           |         |         |         | 50,009  
|                                                                                         | Payments of amounts due to members                                        |                                                     |                                           |         |         |         | (13,347 
|                                                                                         | Proceeds from issuance of senior exchangeable preferred units             |                                                     |                                           |         |         |         |        
|                                                                                         | Payment of deferred financing costs                                       |                                                     |                                           | (1,089   | )       |         | (13,466 
|                                                                                         | Borrowings on senior secured credit facility                              |                                                     |                                           | 385,504  |         |         | 436,081 
|                                                                                         | Payments on senior secured credit facitily                                |                                                     |                                           | (418,270 | )       |         | (658,489
|                                                                                         | Payments of related party obligation                                      |                                                     |                                           | (75      | )       |         |        
|                                                                                         | Principal payments on notes payable                                       |                                                     |                                           | (339     | )       |         | (2,022  
|                                                                                         | Payments of capital lease obligations                                     |                                                     |                                           | (5,490   | )       |         | (4,841  
|                                                                                         |                                                                           |                                                     |                                           |          |         |         |         
|                                                                                         |                                                                           | Net cash (used in) provided by financing activities |                                           |          | (39,759 | )       |         
|                                                                                         |                                                                           |                                                     |                                           |          |         |         |         
|Net increase (decrease) in cash                                                          |                                                                           |                                                     | 493                                       |          |         | (924    | )       
|Cash, beginning of year                                                                  |                                                                           |                                                     | 3,398                                     |          |         | 4,322   |         
|                                                                                         |                                                                           |                                                     |                                           |          |         |         |         
|Cash, end of year                                                                        |                                                                           | $                                                   | 3,891                                     |          | $       | 3,398   |         
|                                                                                         |                                                                           |                                                     |                                           |          |         |         |         

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

F-5

---



|                                                                     |                                | 2003                                                            |  | 2002 |        | 2001
|-------------------------------------------------------------------- | ------------------------------ | --------------------------------------------------------------- |  | ---- | ------ | ----
|Supplemental schedule of noncash investing and financing activities: |                                |                                                                 |  |      |        |     
|                                                                     | Noncash asset purchases:       |                                                                 |  |      |        |     
|                                                                     |                                | New and used equipment financed                                 |  | $    |       |     
|                                                                     |                                | Rental equipment financed under capital lease obligations       |  |      |       |     
|                                                                     |                                | Assets transferred from new and used inventory to rental fleet  |  |      | 8,852  |     
|                                                                     |                                | Members' equity issued with the senior subordinated notes       |  |      |       |     
|                                                                     |                                | Conversion of debt to equity under a recapitalization agreement |  |      |       |     
|Supplemental disclosures of cash flow information:                   |                                |                                                                 |  |      |        |     
|                                                                     | Cash paid during the year for: |                                                                 |  |      |        |     
|                                                                     |                                | Interest                                                        |  | $    | 38,961 |     
|                                                                     |                                | Income taxes                                                    |  |      | 98     |     

Supplemental Disclosures of Non-Cash Investing and Financing Activities:

As of December 31, 2003 and 2002, the Company had $51.8 million and $55.1 million, respectively, in manufacturer flooring plans payable
outstanding, which were used to finance purchases of inventory and rental equipment.

On
June 17, 2002, the Company entered into a business combination acquiring substantially all the assets and assuming certain liabilities of ICM Equipment Company L.L.C. The
following table sets forth information relating to the acquisition (in thousands)

Fair value of assets acquired

$
187,781Fair value of liabilities assumed


(187,781
)Excess of liabilities assumed over fair value of assets acquired





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

F-6

---



H&E EQUIPMENT SERVICES L.L.C.        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)    Organization and Nature of Operations

Basis of Presentation

H&E Equipment Services L.L.C. (H&E Equipment Services or the Company) is a wholly-owned subsidiary of H&E Holdings L.L.C. (H&E Holdings). H&E Holdings is
principally a holding company conducting all of its operations through H&E Equipment Services (see Note 3). The consolidated financial statements include the results of operations of H&E
Equipment Services and its wholly-owned subsidiaries H&E Finance Corp., GNE Investments, Inc. and Great Northern Equipment, Inc., collectively referred to herein as the "Company".

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

Nature of Operations

The Company is an integrated equipment rental, sales and service company located in the United States of America (United States), with an integrated network of 41
facilities, most of which have full
service capabilities, and a workforce that includes a group of skilled service technicians and a separate rental and equipment sales force. In addition to renting equipment, the Company also sells new
and used equipment and provides extensive parts and service support. The Company generates a significant portion of its gross profit from parts sales and service revenue.

(2)    Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

The accompanying consolidated financial statements include the accounts of H&E Equipment Services and its subsidiaries. All significant intercompany balances and
transactions have been eliminated in consolidation.

Revenue Recognition

The Company's 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, the Company records 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 collectability 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.

Inventories

New and used equipment is stated at the lower of cost or market by specific-identification. Parts and supplies are stated at the lower of the average cost or
market.

F-7

---

Rental Equipment

Rental equipment purchased by the Company is stated at cost and is depreciated over the estimated useful lives of the equipment using the
straight-line method. The range of estimated useful lives for rental equipment depreciation is three to ten years, after giving effect to an estimated salvage value of 0% to 25% of cost.

Ordinary
repair and maintenance costs and property taxes are charged to operations as incurred. Expenditures for additions or improvements that extend the useful life of the asset are
capitalized in the period incurred. When rental equipment is sold or disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is
included in the Company's consolidated results of operations.

Property and Equipment

Property and equipment are recorded at cost and are depreciated over the estimated useful lives using the straight-line method. The range of estimated
useful lives for property and equipment is three to ten years. Ordinary repair and maintenance costs are charged to operations as incurred. Leasehold improvements are amortized using the
straight-line method over their estimated useful lives or the remaining life of the lease, whichever is shorter.

Long-lived Assets

Long-lived assets are recorded at the lower of amortized cost or fair value. The Company reviews 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.

Deferred Financing Costs and Initial Purchasers' Discounts

Deferred financing costs and initial purchasers' discounts were recorded in 2003 and 2002 in connection with entering into the new senior secured credit facility
and issuing senior secured notes and senior subordinated notes (see Note 13). The Company paid a $0.4 million amendment fee in May 2003 in connection with amending the senior
secured credit facility. The amounts are being amortized over the terms of the related debt, utilizing the effective interest method. The amortization expense of deferred financing costs and initial
purchasers' discounts is included with interest expense as an overall cost of the financing. During the years ended December 31, 2003 and 2002, interest expense related to the amortization of
these costs totaled $2,394,000 and $1,091,000, respectively.

Goodwill

The $3.2 million of goodwill recorded in the accompanying consolidated balance sheets was established in connection with an acquisition in 1999. Prior to
the adoption of Statement of Financial Accounting Standards No. 142,"Goodwill and Other Intangible Assets"(SFAS No. 142) on
January 1, 2002, goodwill was being amortized over 40 years.

F-8

---

The
Company adopted the provisions of SFAS No. 142, effective January 1, 2002. The provisions of SFAS No. 142 eliminate the amortization of goodwill
and certain intangible assets that are deemed to have indefinite lives and require such assets to be tested for impairment and to be written down to fair value, if necessary. Accordingly, the Company
does not have goodwill amortization subsequent to December 31, 2001.

The
Company made an assessment of its goodwill for impairment during the year ended December 31, 2003. Based on the assessment, the Company was not required to adjust the carrying
value of its goodwill. As of December 31, 2003, the Company had goodwill of approximately $3.2 million. If the provisions of SFAS No. 142 were in effect at
January 1, 2001, the following pro forma financial results for the year ended December 31, 2001 would have resulted (in thousands):

2001Selling general and administrative expenses

$
55,132Income from operations


22,832Net income


3,453


For
the year ended December 31, 2001, the Company recorded goodwill amortization of $250,000.

Advertising

Advertising costs are expensed as incurred and totaled $1,046,000, $993,000, and $763,000 for the years ended December 31, 2003, 2002 and 2001,
respectively.

Shipping and Handling Fees and Costs

Shipping and handling fees billed to customers are recorded as revenues while the related shipping and handling costs are included in cost of revenues.

Income Taxes

The Company files a consolidated federal income tax return with its wholly owned subsidiaries. As a Limited Liability Corporation, the Company has elected to be
taxed as a C Corporation under the provisions of the Internal Revenue Code (IRC). Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating
loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income
tax assets are reviewed for recoverability and valuation allowances are provided, when necessary, to reduce deferred tax assets to the amounts expected to be realized.

Fair Value of Financial Instruments

The carrying amounts reported in the accompanying consolidated balance sheets for accounts receivable, accounts payable, accrued liabilities, and deferred
compensation payable approximate fair

F-9

---

value
due to the immediate or short-term maturity of these financial instruments. The carrying amount of the amended senior secured credit facility approximates fair value due to the fact
that the underlying instruments include provisions to adjust interest rates to approximate fair market value. The estimated fair value of the Company's notes payable, senior secured and senior
subordinated notes payable at December 31, 2003 are as follows (in thousands):

|                                                                                    |  | Carrying
Amount |         | Fair
Value
|----------------------------------------------------------------------------------- |  | --------------- | ------- | ----------
|Senior secured notes with interest computed at 111/8%                               |  | $               | 198,660 |           
|Senior subordinated notes with interest computed at 121/2%                          |  |                 | 43,010  |           
|Notes payable to financial institution with interest computed at 41/4%              |  |                 | 838     |           
|Notes payable to suppliers with interest computed at 2.9%                           |  |                 | 175     |           
|Notes payable to finance companies with interest rates ranging from
91/2% to 101/2% |  |                 | 50      |           
|                                                                                    |  |                 |         |           
|                                                                                    |  | $               | 242,733 |           
|                                                                                    |  |                 |         |           

Concentrations of Credit and Supplier Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of trade accounts receivable. Credit risk with
respect to trade accounts receivable is mitigated by the large number of geographically diverse customers and the Company's credit evaluation procedures. Although generally no collateral is required,
when feasible, mechanics' liens are filed and personal guarantees are signed to protect the Company's interests. The Company maintains reserves for potential losses.

The
Company records trade receivables at sales value and establishes specific reserves for certain customer accounts identified as known collection problems due to insolvency, disputes
or other collection issues. The amounts of the specific reserves estimated by management are based on the following assumptions and variables: the customer's financial position, age of the customer's
receivables and changes in payment schedules. In addition to the specific reserves, management establishes a non-specific allowance for doubtful accounts by applying specific percentages
to the different receivable aging categories (excluding the specifically reserved accounts). The percentage applied against the aging categories increases as the accounts become further past due. The
allowance for doubtful accounts is charged with the write-off of uncollectible customer accounts.

The
Company routinely acquires equipment from certain suppliers. Management believes that other suppliers could provide similar equipment with comparable terms.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and
assumptions. The use of estimates and assumptions may affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates include the allowance for
doubtful accounts, useful lives for depreciation, goodwill and other asset impairments, loss contingencies and fair values of financial instruments. Actual results could differ from those estimates.

F-10

---

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 the Company's results of operations and financial position.

In
May 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity"(SFAS No. 150). 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 the Company's results of operations and financial position.

Reclassifications

Certain amounts in the prior-year consolidated financial statements have been reclassified for comparative purposes to conform to the presentation in
the current-year consolidated financial statements.

(3)    Reorganization and Acquisition of ICM Equipment Company L.L.C.

On June 17, 2002, the equity holders of H&E Equipment Services L.L.C. (formerly Gulf Wide Industries L.L.C.) and ICM Equipment Company L.L.C. (ICM) formed
H&E Holdings by executing a Limited Liability Company Agreement of H&E Holdings and by contributing to H&E Holdings all of the outstanding equity securities and certain outstanding subordinated debt
of the two companies to the members of H&E Holdings in exchange for certain equity securities of H&E Holdings. Pursuant to a Contribution Agreement and Plan of Reorganization, H&E Holdings contributed
all of the outstanding equity securities of ICM to H&E Equipment Services, merging ICM out of existence.

Pursuant
to the Contribution Agreement and Plan of Reorganization, H&E Holdings issued a series of preferred and common units in exchange for all the outstanding stock of ICM. The
acquisition was accounted for under the purchase method of accounting. H&E Equipment Services was considered the acquirer for accounting purposes. Under the purchase method of accounting, the acquired
assets and assumed liabilities have been recorded at their fair values at the date of acquisition. There was no goodwill or other intangible assets recorded in connection with the transaction. The
operating results of ICM have been included in the accompanying 2002 consolidated financial statements from the date of the acquisition.

F-11

---

The
following table summarizes the fair value of assets acquired and liabilities assumed as allocated in purchase accounting (in thousands):

Fair value of assets acquired:Cash

$
3,643Accounts receivable


27,020Inventories


12,082Rental equipment


129,554Property and equipment


4,966Deferred tax assets


9,454Other assets


1,062187,781Fair value of liabilities assumed:Outstanding borrowings on senior secured credit facility


117,493Accounts payable and accrued liabilities


50,092Amounts due to members


10,147Deferred compensation payable


9,743Capital lease obligations


306187,781Excess of liabilities assumed over fair value of assets acquired

$



The
consolidated results of operations data shown below is presented on an unaudited pro forma basis and represents the results of H&E Equipment Services had the business combination
occurred at the beginning of the periods presented (in thousands):

Years Ended December 31,2002

2001Revenues

$
431,721

$
515,262Net loss

$
(23,277
)
$
(8,777
)


The
unaudited pro forma financial information is presented for informational purposes only and is based upon certain assumption and estimates, which are subject to change. The results
are not necessarily indicative of the operating results that would have occurred had the transaction been consummated at the beginning of the periods presented, nor are they necessarily indicative of
future operating results.

(4)    August 2001 Recapitalization

On August 10, 2001, the Company entered into a recapitalization agreement with Bruckmann, Rosser, Sherrill & Co., L.L.C. (BRS) and certain minority
shareholders whereby a further investment was made by BRS into the Company.

BRS
contributed $10.0 million in cash in exchange for $10.0 million of newly issued Senior Exchangeable Preferred Units. BRS also contributed its outstanding
Class A, B and C Preferred Units,

F-12

---

with
a cumulative liquidation value of approximately $37.6 million and its $7.0 million par value Convertible Subordinated Note, plus accrued interest in exchange for
$36.3 million of newly issued Senior Subordinated Preferred Units.

The
minority shareholders contributed their outstanding Class A, B, and C Preferred Units, with a cumulative liquidation value of approximately $19.9 million, their
Class A common units of $0.8 million
and their $20.6 million Convertible Subordinated Note in exchange for $1.2 million of newly issued Series A Preferred Units, $5.0 million of Junior Preferred Units and
$1.2 million of Class B common stock. Immediately after these transactions, BRS had 115,152.8 shares of Class A common stock and the minority shareholders had 115,152.8 shares of
Class B common stock. The Class A common stock has 2 for 1 voting rights for every share of Class B common stock. This gave BRS 66.7% voting interest in the Company and the
minority shareholders the remaining 33.3%. The BRS investment and exchanges with the minority shareholders have been accounted for as a recapitalization in the accompanying 2001 consolidated financial
statements.

(5)    Receivables

Receivables consisted of the following at December 31, 2003, and 2002 (in thousands):

2003

2002Trade receivables

$
62,039

$
63,935Unbilled rental revenue


2,756


3,255Sales-type leases


397


657Income tax receivables


149


125Affiliated companies


295


311Advances to employees


115


120Other


52


35165,803


68,754Less allowance for doubtful accounts


(3,188
)

(3,609
)$
62,615

$
65,145


(6)    Inventories

Inventories consisted of the following at December 31, 2003, and 2002 (in thousands):

2003

2002New equipment

$
20,517

$
17,772Used equipment


8,574


13,511Parts, supplies and other


14,987


16,709$
44,078

$
47,992


F-13

---

(7)    Property and Equipment

Property and equipment consisted of the following at December 31, 2003, and 2002 (in thousands):

2003

2002Land

$
1,334

$
3,000Transportation equipment


9,913


9,521Building and leasehold improvements


8,250


8,916Office and computer equipment


6,036


7,837Machinery and equipment


3,501


3,22029,034


32,494Less accumulated depreciation and amortization


(13,906
)

(13,338
)$
15,128

$
19,156


(8)    Accounts Payable

Accounts payable consisted of the following at December 31, 2003, and 2002 (in thousands):

2003

2002Trade accounts payable

$
39,677

$
36,112Manufacturer flooring plans payable


51,769


55,101$
91,446

$
91,213


Manufacturer
flooring plans payable are financing arrangements for inventory and rental equipment. The interest paid on the manufacturer flooring plans ranges between
zero percent and Prime Interest Rate plus 6.9 percent. Certain manufacturer flooring plans provide for a one to twelve-month reduced interest rate term or a deferred payment period. The Company
makes payments in accordance with the original terms of the financing agreements. However, the Company routinely sells equipment that is financed under manufacturer flooring plans and prior to the
original maturity date of the financing agreement. The payable is paid at the time equipment being financed is sold. The manufacturer flooring plans payable are secured by the equipment being
financed.

Maturities
(based on original financing terms) of the manufacturer flooring plans payable for each of the next five years ending December 31 are as follows (in thousands):

2004

$
11,0442005


13,6792006


14,1472007


11,5482008


1,214Thereafter


137$
51,769


F-14

---

(9)    Accrued Expenses Payable and Other Liabilities

Accrued expenses payable and other liabilities consisted of the following at December 31, 2003 and 2002 (in thousands):

2003

2002Payroll and related liabilities

$
7,129

$
5,087Sales, use and property taxes


2,824


2,531Accrued interest


1,862


1,429Deferred revenue


1,616


1,610Accrued insurance


1,560


990Other


910


682$
15,901

$
12,329


(10)    Notes Payable

A summary of notes payable as of December 31, 2003 and 2002 are as follows (in thousands):

2003

2002Notes payable to a financial institution maturing through 2008.Payable in monthly installments of approximately $19. Interest ranges from 4.25% to 7.63%. Notes are collateralized by real estate.

$
838

$
1,018Notes payable to suppliers maturing through 2005.Payable in monthly installments of approximately $11. Interest is at 2.9%. Notes are collateralized by equipment.


175


304Notes payable to finance companies maturing through 2006.Payable in monthly installments of approximately $3. Interest ranges from 9.5% 10.5%. Notes are collateralized by equipment.


50


80$
1,063

$
1,402


Maturities
of notes payable for each of the next five years ending December 31, are as follows (in thousands):

2004

$
3422005


2582006


1852007


1812008


97$
1,063


(11)    Convertible and Preferred Securities

Senior Exchangeable Preferred Units

In connection with the August 10, 2001 recapitalization, BRS purchased for $10.0 million in cash 10,000 units of $1,000 par value Senior
Exchangeable Preferred Units. These units included a 10%

F-15

---

liquidation
value compounded semi-annually from their issuance date. The liquidation value is to include the par value plus any accreted value to be paid. At any time prior to
July 31, 2006, the holders of the Senior Exchangeable Preferred Units could have exchanged any part of the liquidation value of these units into a senior subordinated promissory note of either
the Company or its subsidiary, at the election of the holder. The difference between the carrying value and liquidation value was accreted through periodic charges to accumulated deficit.

Senior Subordinated Preferred Units.

In
connection with the August 10, 2001 recapitalization, the Company issued 36,286,902 shares of $1,000 par value Senior Subordinated Preferred Units. These units included at 8%
liquidation value compounded semi-annually from their issuance date. The liquidation value as of December 31, 2001 included the par value plus any accreted value to be paid under
the terms of the agreement. The Senior Subordinated Preferred Units could be redeemed at the discretion of the Company's Board of Directors. The Company's Board of Directors is subject to voting
control of BRS, who have voting control of the Company. The differences between the carrying value and the liquidation value was accreted through periodic charges to accumulated deficit.

Series A Senior Preferred Units

In connection with the August 10, 2001 recapitalization, the Company issued 1,235,229 shares of $1,000 par value Senior Series A Preferred Units.
These units included a 12% liquidation value compounded semi-annually from their issuance date. The liquidation value was to include the par value plus any accreted value to be paid under
the terms of the agreement. These units could be redeemed at the discretion of the Company's Board of Directors.

Junior Preferred Units

In connection with the August 10, 2001 recapitalization, the Company issued 5,000 shares of $1,000 par value Junior Preferred Units. These units included
an 8% liquidation value compounded semi-annually from their issuance date. The liquidation value was to include the par value plus any accreted value to be paid under the terms of the
agreement. These units could be redeemed at the discretion of the Company's Board of Directors.

In
connection with the Company's reorganization and acquisition of ICM in June 2002 (see Note 3), the Senior Exchangeable Preferred Units, the Senior Subordinated Preferred
Units, the Series A Senior Preferred Units and the Junior Preferred Units were converted to member's interest.

(12)    Capital Lease Obligations

The Company leases various equipment under capital leases expiring in various years through 2005. The assets and liabilities under capital leases are recorded at
the lower of the present value of the future minimum lease payments or the fair value of the assets. The assets are amortized over their estimated useful lives. Amortization of assets under capital
leases is included in depreciation expense.

F-16

---

Following
is a summary of assets held under capital leases at December 31, 2003 and 2002 (in thousands):

2003

2002Rental equipment

$
18,879

$
18,918Data processing equipment





27818,879


19,196Less accumulated amortization


(5,308
)

(3,588
)$
13,571

$
15,608


Future
minimum lease payments under capital leases as of December 31, 2003 are as follows (in thousands):

2004

$
4,3182005


1,288Total minimum lease payments


5,606Less amount representing interest


(255
)Total present value of future minimum payments with interest ranging from 5.0% to 9.5%

$
5,351


(13)    Senior Secured Notes, Senior Subordinated Notes and Senior Secured Credit Facility

In connection with the reorganization of the Company and acquisition of ICM (see Note 3), the Company issued $200.0 million aggregate principal
amount of 111/8% senior secured notes and $53.0 million aggregate principal amount of 121/2% senior subordinated notes and entered into a new senior secured credit
facility. The senior secured credit facility is comprised of a $150.0 million revolving line of credit. The proceeds from the senior secured notes, senior subordinated notes and senior secured
credit facility were used to payoff the existing credit facilities of the two companies which had aggregate outstanding balances of approximately $306.4 million, repay senior subordinated
promissory notes of approximately $13.3 million, and pay for financing costs of approximately $13.5 million. The deferred financing costs are being amortized to interest expense over the
life of the respective related debt using the effective interest rate method.

F-17

---

Senior Secured Notes

On June 17, 2002, the Company issued $200.0 million aggregate principal amount of 111/8% Senior Secured Notes due 2012. The following
table reconciles the $200.0 million Senior Secured Notes to the December 31, 2003 balance (in thousands):

Aggregate principal amount issued

$
200,000Initial purchasers' discount


(1,474
)Initial purchasers' discount amortization (June 17, 2002 through December 31, 2003)


134Senior Secured Notes balance at December 31, 2003

$
198,660


The
net proceeds from the sale of the notes were approximately $190.7 million (after deducting the initial purchasers' discount and related financing costs). Interest on the notes
is paid semi-annually on June 15 and December 15 of each year, commencing on December 15, 2002. The notes mature on June 15, 2012 and are guaranteed by the
Company's domestic subsidiaries (see Note 20). The notes are secured by junior security interests in substantially all of the assets of H&E Equipment Services. The Company, at its option, may
redeem the notes on or after June 15, 2007, at specified redemption prices, which range from 105.563% in 2007 to 100.0% in 2010 and thereafter. In addition, at any time on or prior to
June 15, 2005, the Company may redeem up to 35% of the outstanding notes at a redemption price of 111.125% with the net proceeds of certain equity offerings. The indenture governing the notes
contains certain restrictive covenants including limitations on (i) additional indebtedness, (ii) restricted payments, (iii) liens and guarantees, (iv) dividends and other
payments, (v) preferred stock of subsidiaries, (vi) transactions with affiliates, (vii) sale and leaseback transactions, and (viii) the Company's ability to consolidate,
merge or sell all or substantially all of its assets.

Senior Subordinated Notes

On June 17, 2002, the Company issued $53.0 million aggregate principal amount of 121/2% Senior Subordinated Notes due 2013. The
following table reconciles the $53.0 million Senior Subordinated Notes to the December 31, 2003 balance (in thousands):

Aggregate principal amount issued

$
53,000Initial purchasers' discount


(10,591
)Initial purchasers' discount amortization (June 17, 2002 through December 31, 2003)


601Senior Subordinated Notes balance at December 31, 2003

$
43,010


The
net proceeds from the sale of the notes were approximately $40.7 million (after deducting the initial purchasers' discount and related financing costs). Interest on the notes
is paid semi-annually on June 15 and December 15 of each year, commencing on December 15, 2002. The notes mature on June 15, 2013 and are guaranteed by the
Company's domestic subsidiaries (see Note 20). The notes are senior to all other subordinated debt and are unsecured. The Company, at its option, may redeem the notes on or after
June 15, 2007, at specified redemption prices which range from 106.250% in 2007 to

F-18

---

100.0%
in 2010 and thereafter. In addition, at any time prior to June 15, 2005, the Company may redeem up to 35% of the outstanding notes at a redemption price of 112.50% with the net proceeds
of certain equity offerings. The indenture governing the notes contains certain restrictive covenants including limitations on (i) additional indebtedness, (ii) restricted payments,
(iii) liens and guarantees, (iv) dividends and other payments, (v) preferred stock of subsidiaries, (vi) transactions with affiliates, (vii) sale and leaseback
transactions, and (viii) the Company's ability to consolidate, merge or sell all or substantially all of its assets.

In
connection with and attached to the issuance of the senior subordinated notes, H&E Holdings issued approximately 553 shares of Series A preferred stock, 1,476 shares of
Series B preferred stock, 4,239 shares of Series C preferred stock, 2,613 shares of Series D preferred stock, 106,842 shares of Class A common stock, and 103,684 shares of
Class B common stock, all of which are limited liability company interests in H&E Holdings.

Also
in connection with the issuances of the senior secured notes and the senior subordinated notes, the Company recorded original issue discounts of $1.5 million and
$3.0 million, respectively. Additionally, $7.6 million of value was allocated to the H&E Holdings' limited liability company interest issued as part of the offering of the senior
subordinated notes. The value allocated to these interests has been accounted for as additional original issue discount. The value allocated to the limited liability interests was based on an estimate
of the relative fair values of these interests and the senior subordinated notes at the date of issuance. The original issue discounts are being amortized to interest expense over the lives of the
respective notes using the effective interest rate method.

Senior Secured Credit Facility

In accordance with the amended senior secured credit facility, the Company may borrow up to $150 million depending upon the availability of borrowing base
collateral consisting of eligible trade receivables, inventories, property and equipment, and other assets. The amended senior secured credit facility bears interest at LIBOR plus 300 basis points and
matures February 10, 2009. The credit facility is senior to all other outstanding debt, secured by substantially all the assets of the Company, and is guaranteed by the Company's domestic
subsidiaries (see Note 20). The balance outstanding on the amended senior secured credit facility as of December 31, 2003 was approximately $44.0 million. Additional borrowings
available under the terms of the amended senior secured credit facility as of
December 31, 2003 totaled $81.7 million based on the borrowing base collateral value of assets. However, based on the Company's financial covenants and taking into account the standby
letters of credit outstanding, availability under the amended senior secured credit facility was approximately $22 million as of December 31, 2003. The average interest rate on
outstanding borrowings for the year ended December 31, 2003 was 5.4%.

If
at any time an event of default exists, the interest rate on the amended senior secured credit facility will increase by 2.0% per annum. The Company is also required to pay a
commitment fee equal to 0.5% per annum in respect of undrawn commitments under the revolving credit facility.

In
accordance with the terms of the amended senior secured credit facility, the Company must comply with certain restrictive financial covenants and must maintain certain financial
ratios. The

F-19

---

Company
is required to, among other things, satisfy certain financial tests relating to (a) the maximum senior debt to tangible assets ratio, (b) maximum leverage ratio,
(c) maximum adjusted leverage ratio, (d) minimum utilization rate of equipment inventory ratio, (e) minimum adjusted interest coverage ratio and (f) maximum property and
equipment capital expenditures.

As
a result of the Company recording the estimated loss from litigation (see Note 15), on May 14, 2003, the Company's senior secured credit agreement was amended to modify
certain restrictive financial covenants and financial ratios. The credit agreement was amended to:



On
May 14, 2003, the Company paid a loan amendment fee of $0.4 million that will be amortized over the remaining term of the loan.

On
February 10, 2004, the Company's senior secured credit agreement was further amended to extend the maturity date and to modify certain restrictive financial covenants and
financial ratios, providing additional liquidity. Principally, the amendment:



F-20

---



On
February 10, 2004, the Company paid a loan amendment fee of $0.8 million that is being amortized over the remaining term of the loan.

(14)    Income Taxes

Income tax provision (benefit) for the years ended December 31, 2003, 2002 and 2001, consists of (in thousands):

Current

Deferred

TotalYear ended December 31, 2003:U.S. Federal

$
67

$


$
67State


(43
)




(43
)$
24

$


$
24Year ended December 31, 2002:U.S. Federal

$


$
(1,091
)
$
(1,091
)State


20


(200
)

(180
)$
20

$
(1,291
)
$
(1,271
)Year ended December 31, 2001:U.S. Federal

$


$
1,589

$
1,589State


(356
)

210


(146
)$
(356
)
$
1,799

$
1,443


F-21

---

Significant components of the Company's deferred income tax assets and liabilities as of December 31, 2003 and 2002 are as follows (in thousands):

2003

2002Deferred tax assets:Accounts receivable

$
1,212

$
1,371Inventories


469


433Net operating losses


59,973


42,157AMT credit


832


832Sec 263A costs


489


577Non-deductible accrued liabilities


8,483


1,100Goodwill


14,374


15,957Deferred compensation


2,595


2,661Accrued interest


1,546


1,227Interest expense-high yield debt





1,013Sec 754 adjustment


9,528


10,707Other assets


379


30799,880


78,342Valuation allowance


(39,930
)

(20,453
)59,950


57,889Deferred tax liabilities:Property and equipment


(58,430
)

(56,309
)Investments


(1,520
)

(1,520
)Other





(60
)(59,950
)

(57,889
)Net deferred tax assets

$


$



The
difference between income taxes computed using statutory federal income tax rates and the effective corporate rates are as follows for the years ended December 31, 2003, 2002
and 2001 (in thousands):

2003

2002

2001Computed tax at statutory rates

$
(17,479
)
$
(4,877
)
$
1,605Non-deductible expenses


411


577


240State income taxnet of federal tax effect


(2,079
)

(119
)

(96
)Increase in valuation allowance


19,478


3,107


Other


(307
)

41


(306
)$
24

$
(1,271
)
$
1,443


At
December 31, 2003, the Company had available net operating loss carryforwards of approximately $157.8 million, which expire in varying amounts from 2019 through 2023.
The Company also had federal alternative minimum tax credit carryforwards at December 31, 2003 of approximately

F-22

---

$0.8 million
which do not expire. The utilization of all or some of these loss carryforwards will be limited pursuant to Internal Revenue Code Section 382 as a result of ownership
changes.

Management
has concluded that it is more likely than not that the Company will not have sufficient taxable income within the carryback and carryforward periods permitted by the current
law to allow for the utilization of certain carryforwards and other tax attributes. Therefore, a valuation allowance of $39.9 million has been established to reduce the deferred tax assets as
of December 31, 2003.

(15)    Commitments and Contingencies

Operating Leases

The Company leases certain property and rental equipment under non-cancelable operating lease agreements expiring at various dates through 2018. Rent
expense on property and rental equipment under non-cancelable operating lease agreements for the years ended December 31, 2003, 2002 and 2001 amounted to approximately $24,343,000,
$21,023,000 and $18,340,000, respectively.

Future
minimum operating lease payments, in the aggregate, for each of the next five years ending December 31 are as follows (in thousands):

2004

$
22,4672005


21,3342006


17,5992007


9,0182008


2,827Thereafter


9,060$
82,305


Legal Matters

In July 2000, a complaint was filed by a competitor of the Company 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, the Company 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, the Company recorded an additional $0.4 million loss from litigation during the third quarter of 2003. On September 11, 2003, the Company filed a notice of appeal. In
conjunction with the appeal and in accordance with the Court's order, the Company issued an irrevocable standby letter of credit for $19.0 million, representing the amount of 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, the Company 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, the Company will expense any statutory interest

F-23

---

as
interest expense in the statement of operations. For the duration of the letter of credit, the Company pays the lenders a 300 basis point fee on the amount available for issuance.

While
management is appealing this judgment, management believes 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 the Company's business or financial condition.

The
Company is also involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, after consultation with legal counsel, the
ultimate disposition of these various matters will not have a material adverse effect on the Company's consolidated financial position, results of operations or liquidity.

Employment Contracts

The Company has entered into employment contracts with various officers and members, which provide for annual payments to the officers and members, subject to
their continued employment with the Company. The employment contracts mature on December 31, 2006 and require aggregate annual payments of approximately $885,000 with bonuses at the discretion
of the Board of Directors.

Letters of Credit

The Company had outstanding letters of credit totaling $24,338,000 and $470,000 as of December 31, 2003 and 2002, respectively.

(16)    Employee Benefit Plan

The Company offers its employees participation in a qualified 401(k)/profit-sharing plan which requires the Company to match employee contributions up to
predetermined limits for qualified employees as defined by the plan. For the years ended December 31, 2003, 2002 and 2001, the Company contributed $657,000, $609,000 and $250,000, respectively,
to this plan.

(17)    Deferred Compensation Plans

In connection with the acquisition of ICM, the Company assumed a nonqualified employee deferred compensation plan under which certain employees had previously
elected to defer a portion of their annual compensation. Participants in the plan can no longer defer compensation. Compensation previously deferred under the plan is payable upon the termination,
disability or death of the participants. The plan accumulates interest each year at a bank's prime rate in effect as of the beginning of January. This rate remains constant throughout the year. The
effective rate for the 2003 plan year was 4.25 percent. The aggregate deferred compensation payable (including accrued interest of $2,413,000) at December 31, 2003 was $4,243,000.

The
Company also assumed, in connection with the acquisition of ICM, a liability for subordinated deferred compensation for certain officers and members of the Company. Compensation
deferred is payable in December 2013 and is subordinate to all other debt. Interest is accrued quarterly at a rate of 13 percent per annum. The aggregate deferred compensation payable
(including accrued interest of $1,655,000) at December 31, 2003 was $6,655,000.

F-24

---

(18)    Related Party Transactions

For the three years ended December 31, 2003, the Company leased certain facilities from companies controlled by officers and members. The lease terms range
from 5 to 20 years with expiration dates ranging from 2005 to 2018. Total rent paid during the years ended December 31, 2003, 2002 and 2001 was $2,743,000, $1,740,000 and $471,000,
respectively.

The
Company placed a portion of its liability insurance through an insurance agency, related through common ownership, for $5,694,000, $3,096,000 and $2,017,000 for the years ended
December 31, 2003, 2002 and 2001, respectively.

The
Company purchased products and services from and sold products and services to an equipment company, related through common ownership, for the year ended December 31, 2003 for
$573,000 and $194,000, respectively. Amounts owed this equipment company were $21,000 and amounts due from this equipment company were $11,000 as of December 31, 2003.

The
Company owed companies related through common ownership $7,000 at December 31, 2003 and 2002. The Company had no sales transactions with these affiliated companies during 2003
and 2002.

The
Company rented equipment from an officer for $462,000 for the year ended December 31, 2001. The equipment was purchased from the officer for $3,000,000 during 2001.

The
Company had a management agreement with an affiliate, under which the Company was obligated to pay the greater of $500,000 or 1% of earnings before interest, taxes, depreciation and
amortization. The total paid for the years ended December 31, 2002 and 2001 was $670,000 and $530,000, respectively. The management agreement terminated on June 17, 2002.

In
connection with the acquisition of ICM, the Company entered into a management agreement with an affiliate payable in the greater of $2 million annually or 1.75% of annual
earnings before interest, taxes, depreciation and amortization, excluding operating lease expense, plus all reasonable out-of-pocket expenses. The total amount paid to the
affiliate under the management agreement for the years ended December 31, 2003 and 2002 was $1,549,000 and $1,085,000, respectively. The Company had a receivable from the affiliate of $229,000
and $210,000 as of December 31, 2003 and 2002, respectively.

In
connection with the recapitalization of H&E in 1999, the Company entered into a $3,000,000 consulting and non-competition agreement with a former stockholder of the Company. The
agreement provided for total payments over a ten-year term, payable in increments of $25,000 per month. The stockholder was obligated to provide consulting services to the Company and was to comply
with the non-competition provision set forth in the Recapitalization Agreement among the Company and others dated June 19, 1999. The parties specifically acknowledged and agreed that in the event of
the death of the stockholder during the term of the agreement, the payments that otherwise would have been payable to the stockholder under the agreement shall be paid to his heirs. Due to the
stockholder passing away during 2003, the Company will not be provided any further consulting services. Therefore, the Company recorded a $1.3 million expense for the present value of the remaining
future payments. The total amount paid under this agreement was $300,000 for each of the years ended December 31, 2003, 2002 and 2001.

F-25

---

The
Company had consulting and noncompetition agreements with two former stockholders of Coastal Equipment, Inc., acquired in 1999, for $1,000,000, payable in four annual
installments of $250,000 beginning March 1, 2000 and ending March 31, 2003.

During
the years ended December 31, 2003, 2002 and 2001, the Company paid approximately $204,000, $255,000, and $206,000, respectively, in fees to a charter aircraft company in
which the Chief Executive Officer has ownership. The Company had a receivable from the charter aircraft company of approximately $66,000 and $101,000 as of December 31, 2003 and 2002,
respectively.

During
the years ended December 31, 2003 and 2002, the Company expensed $766,000 and $360,000, respectively, for interest earned under a deferred compensation plan for the
chairman and an executive officer (see Note 17).

(19)    Segment Information

The Company has identified five reportable segments: equipment rentals, new equipment sales, used equipment sales, parts sales and service revenue. These segments
are based upon how management of the Company allocates resources and assesses performance. Non-segmented revenues and non-segmented costs relate to equipment support activities
including transportation, hauling, parts freight and damage-waiver charges and are not allocated to the other reportable segments. There were no sales between segments for any of the periods
presented. Selling, general, and administrative expenses as well as all other income and expense items below gross profit are not generally allocated to reportable segments. The Company does not
compile discrete financial
information by its segments other than the information presented below. The following table presents information about the Company's reportable segments (in thousands):

Years Ended December 31,2003

2002

2001Revenues:Equipment rentals

$
153,851

$
136,624

$
98,696New equipment sales


81,692


72,143


84,138Used equipment sales


70,926


52,487


59,441Parts sales


53,658


47,218


36,524Service revenue


33,349


27,755


19,793Total segmented revenues


393,476


336,227


298,592Non-segmented revenues


20,206


15,473


10,925Total revenues

$
413,682

$
351,700

$
309,517


F-26

---

Gross Profit:Equipment rentals

$
49,575

$
52,745

$
45,538New equipment sales


7,526


6,088


6,696Used equipment sales


13,719


9,461


8,063Parts sales


14,572


13,207


9,448Service revenue


20,306


16,317


11,687Total gross profit from revenues


105,698


97,818


81,432Non-segmented gross profit (loss)


568


(1,340
)

(3,514
)Total gross profit

$
106,266

$
96,478

$
77,918


Years Ended
December 31,2003

2002Segment identified assets:Equipment sales

$
29,091

$
31,283Equipment rentals


259,282


314,892Parts and service


14,987


16,709Total segment identified assets


303,360


362,884Non-segment identified assets


98,594


105,460Total assets

$
401,954

$
468,344


The
Company operates primarily in the United States and had minimal international sales for any of the periods presented. No one customer accounted for more than 10% of the Company's sales on an
overall or segment basis for any of the periods presented.

(20)    Condensed Consolidating Financial Information of Guarantor Subsidiaries

All of the indebtedness of H&E Equipment Services is guaranteed by GNE Investments, Inc. and its wholly-owned subsidiary Great Northern
Equipment, Inc. The guarantor subsidiaries are all wholly-owned and the guarantees, made on a joint and several basis, are full and unconditional (subject to subordination provisions and
subject to a standard limitation which provides that the maximum amount guaranteed by each guarantor will not exceed the maximum amount that can be guaranteed without making the guarantee void under
fraudulent conveyance laws). There are no restrictions on H&E Equipment Services' ability to obtain funds from the guarantor subsidiaries by dividend or loan.

The
condensed consolidating financial statements of H&E Equipment Services and its subsidiaries are included below. The condensed financial statements for H&E Finance Corp., the
subsidiary co-issuer, is not presented because H&E Finance Corp. has no assets or operations.

F-27

---



CONDENSED CONSOLIDATING BALANCE SHEET  (in thousands)

|                                           |                                                | As of December 31, 2003                         |  
|------------------------------------------ | ---------------------------------------------- | ----------------------------------------------- | -
|
|Assets:                                    |                                                |                                                 |  
|                                           | Cash                                           |                                                 | $
|                                           | Receivables, net                               |                                                 |  
|                                           | Inventories, net                               |                                                 |  
|                                           | Prepaid expenses and other assets              |                                                 |  
|                                           | Rental equipment, net                          |                                                 |  
|                                           | Property and equipment, net                    |                                                 |  
|                                           | Deferred financing costs, net                  |                                                 |  
|                                           | Investment in guarantor subsidiaries           |                                                 |  
|                                           | Goodwill, net                                  |                                                 |  
|                                           |                                                |                                                 |  
|                                           |                                                | Total assets                                    |  
|                                           |                                                |                                                 |  
|Liabilities and Member's Equity (Deficit): |                                                |                                                 |  
|                                           | Amount due on senior secured credit facility   |                                                 | $
|                                           | Accounts payable                               |                                                 |  
|                                           | Accrued expenses payable and other liabilities |                                                 |  
|                                           | Intercompany balance                           |                                                 |  
|                                           | Accrued loss from litigation                   |                                                 |  
|                                           | Related party obligation                       |                                                 |  
|                                           | Notes payable                                  |                                                 |  
|                                           | Senior secured notes, net of discount          |                                                 |  
|                                           | Senior subordinated notes, net of discount     |                                                 |  
|                                           | Capital lease obligations                      |                                                 |  
|                                           | Deferred compensation payable                  |                                                 |  
|                                           |                                                |                                                 |  
|                                           |                                                | Total liabilities                               |  
|                                           |                                                |                                                 |  
|                                           | Member's equity (deficit)                      |                                                 |  
|                                           |                                                |                                                 |  
|                                           |                                                | Total liabilities and member's equity (deficit) |  
|                                           |                                                |                                                 |  

F-28

---

CONDENSED CONSOLIDATING BALANCE SHEET  (in thousands)

|                                 |                                                | As of December 31, 2002              
|-------------------------------- | ---------------------------------------------- | -------------------------------------
|
|Assets:                          |                                                |                                      
|                                 | Cash                                           |                                      
|                                 | Receivables, net                               |                                      
|                                 | Inventories                                    |                                      
|                                 | Prepaid expenses and other assets              |                                      
|                                 | Rental equipment, net                          |                                      
|                                 | Property and equipment, net                    |                                      
|                                 | Deferred financing costs, net                  |                                      
|                                 | Investment in guarantor subsidiaries           |                                      
|                                 | Goodwill, net                                  |                                      
|                                 |                                                |                                      
|                                 | Total assets                                   |                                      
|                                 |                                                |                                      
|Liabilities and Member's Equity: |                                                |                                      
|                                 | Amount due on senior secured credit facility   |                                      
|                                 | Accounts payable                               |                                      
|                                 | Accrued expenses payable and other liabilities |                                      
|                                 | Intercompany balance                           |                                      
|                                 | Notes payable                                  |                                      
|                                 | Senior secured notes, net of discount          |                                      
|                                 | Senior subordinated notes, net of discount     |                                      
|                                 | Capital lease obligations                      |                                      
|                                 | Deferred compensation payable                  |                                      
|                                 |                                                |                                      
|                                 |                                                | Total liabilities                    
|                                 |                                                |                                      
|                                 | Member's equity                                |                                      
|                                 |                                                |                                      
|                                 |                                                | Total liabilities and member's equity
|                                 |                                                |                                      

F-29

---



CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS  (in thousands)

|                                             |                          | Year Ended December 31, 2003  |       
|-------------------------------------------- | ------------------------ | ----------------------------- | ------
|
|Revenues:                                    |                          |                               |       
|                                             | Equipment rentals        |                               | $     
|                                             | New equipment sales      |                               |       
|                                             | Used equipment sales     |                               |       
|                                             | Parts sales              |                               |       
|                                             | Service revenue          |                               |       
|                                             | Other                    |                               |       
|                                             |                          |                               |       
|                                             |                          | Total revenues                |       
|                                             |                          |                               |       
|Cost of Revenues:                            |                          |                               |       
|                                             | Rental depreciation      |                               |       
|                                             | Rental expense           |                               |       
|                                             | New equipment sales      |                               |       
|                                             | Used equipment sales     |                               |       
|                                             | Parts sales              |                               |       
|                                             | Service revenue          |                               |       
|                                             | Other                    |                               |       
|                                             |                          |                               |       
|                                             |                          | Total cost of revenues        |       
|                                             |                          |                               |       
|Gross Profit:                                |                          |                               |       
|                                             | Equipment rentals        |                               |       
|                                             | New equipment sales      |                               |       
|                                             | Used equipment sales     |                               |       
|                                             | Parts sales              |                               |       
|                                             | Service revenue          |                               |       
|                                             | Other                    |                               |       
|                                             |                          |                               |       
|                                             |                          | Gross profit                  |       
|                                             |                          |                               |       
|Selling, general and administrative expenses |                          |                               | 96,197
|Loss from litigation                         |                          |                               | 17,434
|Related party expense                        |                          |                               | 1,275 
|Equity in loss of guarantor subsidiaries     |                          |                               | (377  
|Gain on sale of property and equipment       |                          |                               | 42    
|                                             |                          |                               |       
|                                             |                          | Income (loss) from operations |       
|                                             |                          |                               |       
|Other income (expense):                      |                          |                               |       
|                                             | Interest expense         |                               |       
|                                             | Other, net               |                               |       
|                                             |                          |                               |       
|                                             |                          | Total other expense, net      |       
|                                             |                          |                               |       
|                                             | Loss before income taxes |                               |       
|Income tax provision                         |                          |                               | 24    
|                                             |                          |                               |       
|                                             | Net loss                 |                               | $     
|                                             |                          |                               |       

F-30

---

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS  (in thousands)

|                                             |                                   | Year Ended December 31, 2002      |       
|-------------------------------------------- | --------------------------------- | --------------------------------- | ------
|
|Revenues:                                    |                                   |                                   |       
|                                             | Equipment rentals                 |                                   | $     
|                                             | New equipment sales               |                                   |       
|                                             | Used equipment sales              |                                   |       
|                                             | Parts sales                       |                                   |       
|                                             | Service revenue                   |                                   |       
|                                             | Other                             |                                   |       
|                                             |                                   |                                   |       
|                                             |                                   | Total revenues                    |       
|                                             |                                   |                                   |       
|Cost of Revenues:                            |                                   |                                   |       
|                                             | Rental depreciation               |                                   |       
|                                             | Rental expense                    |                                   |       
|                                             | New equipment sales               |                                   |       
|                                             | Used equipment sales              |                                   |       
|                                             | Parts sales                       |                                   |       
|                                             | Service revenue                   |                                   |       
|                                             | Other                             |                                   |       
|                                             |                                   |                                   |       
|                                             |                                   | Total cost of revenues            |       
|                                             |                                   |                                   |       
|Gross Profit:                                |                                   |                                   |       
|                                             | Equipment rentals                 |                                   |       
|                                             | New equipment sales               |                                   |       
|                                             | Used equipment sales              |                                   |       
|                                             | Parts sales                       |                                   |       
|                                             | Service revenue                   |                                   |       
|                                             | Other                             |                                   |       
|                                             |                                   |                                   |       
|                                             |                                   | Total gross profit                |       
|                                             |                                   |                                   |       
|Selling, general and administrative expenses |                                   |                                   | 80,466
|Equity in earnings of guarantor subsidiaries |                                   |                                   | 513   
|Gain on sale of property and equipment       |                                   |                                   | 45    
|                                             |                                   |                                   |       
|                                             | Income from operations            |                                   |       
|                                             |                                   |                                   |       
|Other income (expense):                      |                                   |                                   |       
|                                             | Interest expense                  |                                   |       
|                                             | Other, net                        |                                   |       
|                                             |                                   |                                   |       
|                                             |                                   | Total other income (expense), net |       
|                                             |                                   |                                   |       
|                                             | Income (loss) before income taxes |                                   |       
|Income tax benefit                           |                                   |                                   | (1,243
|                                             |                                   |                                   |       
|                                             | Net income (loss)                 |                                   | $     
|                                             |                                   |                                   |       

F-31

---



CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS  (in thousands)

|                                                                                |                                                             | Year Ended December 31, 2003                        |      
|------------------------------------------------------------------------------- | ----------------------------------------------------------- | --------------------------------------------------- | -----
|
|Cash flows from operating activities:                                           |                                                             |                                                     |      
|                                                                                | Net loss                                                    |                                                     | $    
|Adjustments to reconcile net loss to net cash provided by operating activities: |                                                             |                                                     |      
|                                                                                | Depreciation on property and equipment                      |                                                     |      
|                                                                                | Depreciation on rental equipment                            |                                                     |      
|                                                                                | Amortization of loan discounts and deferred financing costs |                                                     |      
|                                                                                | Provision for losses on accounts receivable                 |                                                     |      
|                                                                                | Gain on sale of property and equipment                      |                                                     |      
|                                                                                | Gain on sale of rental equipment                            |                                                     |      
|                                                                                | Equity in loss of guarantor subsidiaries                    |                                                     |      
|Changes in operating assets and liabilities:                                    |                                                             |                                                     |      
|                                                                                | Receivables, net                                            |                                                     |      
|                                                                                | Inventories, net                                            |                                                     |      
|                                                                                | Prepaid expenses and other assets                           |                                                     |      
|                                                                                | Accounts payable                                            |                                                     |      
|                                                                                | Accrued expenses payable and other liabilities              |                                                     |      
|                                                                                | Intercompany balance                                        |                                                     |      
|                                                                                | Accrued loss from litigation                                |                                                     |      
|                                                                                | Deferred compensation payable                               |                                                     |      
|                                                                                |                                                             |                                                     |      
|                                                                                |                                                             | Net cash provided by operating activities           |      
|                                                                                |                                                             |                                                     |      
|Cash flows from investing activities:                                           |                                                             |                                                     |      
|                                                                                | Purchases of property and equipment                         |                                                     |      
|                                                                                | Purchases of rental equipment                               |                                                     |      
|                                                                                | Proceeds from sale of property and equipment                |                                                     |      
|                                                                                | Proceeds from sale of rental equipment                      |                                                     |      
|                                                                                |                                                             |                                                     |      
|                                                                                |                                                             | Net cash provided by (used in) investing activities |      
|                                                                                |                                                             |                                                     |      
|Cash flows from financing activities:                                           |                                                             |                                                     |      
|                                                                                | Payment of deferred financing costs                         |                                                     |      
|                                                                                | Borrowings on senior secured credit facility                |                                                     |      
|                                                                                | Payments on senior secured credit facility                  |                                                     |      
|                                                                                | Payment of related party obligation                         |                                                     |      
|                                                                                | Principal payments of notes payable                         |                                                     |      
|                                                                                | Payments on capital lease obligations                       |                                                     |      
|                                                                                |                                                             |                                                     |      
|                                                                                |                                                             | Net cash used in financing activities               |      
|                                                                                |                                                             |                                                     |      
|Net increase (decrease) in cash                                                 |                                                             |                                                     | 537  
|Cash, beginning of year                                                         |                                                             |                                                     | 3,331
|                                                                                |                                                             |                                                     |      
|Cash, end of year                                                               |                                                             | $                                                   | 3,868
|                                                                                |                                                             |                                                     |      

F-32

---

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS  (in thousands)

|                                                                                         |                                                             | Year Ended December 31, 2002                        |      
|---------------------------------------------------------------------------------------- | ----------------------------------------------------------- | --------------------------------------------------- | -----
|
|Cash flows from operating activities:                                                    |                                                             |                                                     |      
|                                                                                         | Net income (loss)                                           |                                                     | $    
|Adjustments to reconcile net income (loss) to net cash provided by operating activities: |                                                             |                                                     |      
|                                                                                         | Depreciation on property and equipment                      |                                                     |      
|                                                                                         | Depreciation on rental equipment                            |                                                     |      
|                                                                                         | Amortization of loan discounts and deferred financing costs |                                                     |      
|                                                                                         | Provision for losses on accounts receivable                 |                                                     |      
|                                                                                         | Gain on sale of property and equipment                      |                                                     |      
|                                                                                         | Gain on sale of rental equipment                            |                                                     |      
|                                                                                         | Deferred income taxes                                       |                                                     |      
|                                                                                         | Equity in earnings of guarantor subsidiaries                |                                                     |      
|Changes in operating assets and liabilities, net of business combination:                |                                                             |                                                     |      
|                                                                                         | Receivables, net                                            |                                                     |      
|                                                                                         | Inventories                                                 |                                                     |      
|                                                                                         | Prepaid expenses and other assets                           |                                                     |      
|                                                                                         | Accounts payable                                            |                                                     |      
|                                                                                         | Accrued expenses payable and other liabilities              |                                                     |      
|                                                                                         | Deferred compensation payable                               |                                                     |      
|                                                                                         |                                                             |                                                     |      
|                                                                                         |                                                             | Net cash provided by operating activities           |      
|                                                                                         |                                                             |                                                     |      
|Cash flows from investing activities:                                                    |                                                             |                                                     |      
|                                                                                         | Purchases of property and equipment                         |                                                     |      
|                                                                                         | Purchases of rental equipment                               |                                                     |      
|                                                                                         | Proceeds from sale of property and equipment                |                                                     |      
|                                                                                         | Proceeds from sale of rental equipment                      |                                                     |      
|                                                                                         | Cash acquired in ICM business combination                   |                                                     |      
|                                                                                         |                                                             |                                                     |      
|                                                                                         |                                                             | Net cash (used in) provided by investing activities |      
|                                                                                         |                                                             |                                                     |      
|Cash flows from financing activities:                                                    |                                                             |                                                     |      
|                                                                                         | Net proceeds from issuance of senior secured notes          |                                                     |      
|                                                                                         | Net proceeds from issuance of senior subordinated notes     |                                                     |      
|                                                                                         | Payments of amounts due to members                          |                                                     |      
|                                                                                         | Payment of deferred financing costs                         |                                                     |      
|                                                                                         | Borrowings on senior secured credit facility                |                                                     |      
|                                                                                         | Payments on senior secured credit facility                  |                                                     |      
|                                                                                         | Principal payments of notes payable                         |                                                     |      
|                                                                                         | Payments on capital lease obligations                       |                                                     |      
|                                                                                         |                                                             |                                                     |      
|                                                                                         |                                                             | Net cash used in financing activities               |      
|                                                                                         |                                                             |                                                     |      
|Net decrease in cash                                                                     |                                                             |                                                     | (299 
|Cash, beginning of year                                                                  |                                                             |                                                     | 3,630
|                                                                                         |                                                             |                                                     |      
|Cash, end of year                                                                        |                                                             | $                                                   | 3,331
|                                                                                         |                                                             |                                                     |      

F-33

---

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) or the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized on March 30, 2004.

| |  | H&E EQUIPMENT SERVICES L.L.C.
| |  | -----------------------------
| |  | By:                          

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons in the capacities and on the dates indicated.

|    |  | Signature                                 |  | Capacity                                                                      |  | Date          
|--- |  | ----------------------------------------- |  | ----------------------------------------------------------------------------- |  | --------------
|    |  |                                           |  |                                                                               |  |               
|By: |  | /s/JOHN M. ENGQUISTJohn M. Engquist       |  | President, Chief Executive Officer and Director
(Principal Executive Officer) |  | March 30, 2004
|By: |  | /s/LINDSAY C. JONESLindsay C. Jones       |  | Chief Financial Officer
(Principal Financial and Accounting Officer)          |  | March 30, 2004
|By: |  | /s/GARY W. BAGLEYGary W. Bagley           |  | Chairman and Director                                                         |  | March 30, 2004
|By: |  | /s/BRUCE C. BRUCKMANNBruce C. Bruckmann   |  | Director                                                                      |  | March 30, 2004
|By: |  | /s/HAROLD O. ROSSERHarold O. Rosser       |  | Director                                                                      |  | March 30, 2004
|By: |  | /s/J. RICE EDMONDSJ. Rice Edmonds         |  | Director                                                                      |  | March 30, 2004
|By: |  | /s/JOHN T. SAWYERJohn T. Sawyer           |  | Director                                                                      |  | March 30, 2004
|By: |  | /s/KEITH E. ALESSIKeith E. Alessi         |  | Director                                                                      |  | March 30, 2004
|By: |  | /s/LAWRENCE C. KARLSONLawrence C. Karlson |  | Director                                                                      |  | March 30, 2004

---

Independent Auditors' Report on  Consolidated Financial Statement Schedule

The
Board of Directors
H&E Equipment Services L.L.C.:

Under
date of February 20, 2004, we reported on the consolidated balance sheets of H&E Equipment Services L.L.C. and subsidiaries as of December 31, 2003 and 2002, and the
related consolidated statements of operations, members' equity (deficit) and cash flows for each of the years in the three-year period ended December 31, 2003, which are included in
the H&E Equipment Services L.L.C. Annual Report on Form 10-K. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related
consolidated financial statement schedule in the Form 10-K. This consolidated financial statement schedule is the responsibility of the Company's management. Our responsibility is
to express an opinion on this consolidated financial statement schedule based on our audits.

In
our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects,
the information set forth therein.

As
discussed in Note 2 to the consolidated financial statements, the Company adopted Statement of Financial Accounting Standard No. 142, "Goodwill and Other Intangible
Assets" in the year ended December 31, 2002.

/s/
KPMG LLP

Salt
Lake City, Utah
February 20, 2004

---

SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS  FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001  (Dollars in thousands)

|Description                  |                                            | Balance at
Beginning
of Year |       | Additions
Charged to
Costs and
Expenses |   | Deductions |       | Impact of
Acquisition |        | Balance at
End
of Year
|---------------------------- | ------------------------------------------ | ---------------------------- | ----- | --------------------------------------- | - | ---------- | ----- | --------------------- | ------ | ----------------------
|Year Ended December 31, 2003 |                                            |                              |       |                                         |   |            |       |                       |        |                       
|                             | Allowance for doubtful accounts receivable |                              | $     | 3,609                                   |   | $          | 1,269 |                       | $      | (1,690                
|                             | Allowance for inventory obsolescence       |                              |       | 1,139                                   |   |            | 612   |                       |        | (516                  
|                             |                                            |                              |       |                                         |   |            |       |                       |        |                       
|                             |                                            | $                            | 4,748 |                                         | $ | 1,881      |       | $                     | (2,206 | )                     
|                             |                                            |                              |       |                                         |   |            |       |                       |        |                       
|Year Ended December 31, 2002 |                                            |                              |       |                                         |   |            |       |                       |        |                       
|                             | Allowance for doubtful accounts receivable |                              | $     | 708                                     |   | $          | 1,517 |                       | $      | (1,524                
|                             | Allowance for inventory obsolescence       |                              |       | 533                                     |   |            | 121   |                       |        | (6                    
|                             |                                            |                              |       |                                         |   |            |       |                       |        |                       
|                             |                                            | $                            | 1,241 |                                         | $ | 1,638      |       | $                     | (1,530 | )                     
|                             |                                            |                              |       |                                         |   |            |       |                       |        |                       
|Year Ended December 31, 2001 |                                            |                              |       |                                         |   |            |       |                       |        |                       
|                             | Allowance for doubtful accounts receivable |                              | $     | 708                                     |   | $          | 556   |                       | $      | (556                  
|                             | Allowance for inventory obsolescence       |                              |       | 291                                     |   |            | 271   |                       |        | (29                   
|                             |                                            |                              |       |                                         |   |            |       |                       |        |                       
|                             |                                            | $                            | 999   |                                         | $ | 827        |       | $                     | (585   | )                     
|                             |                                            |                              |       |                                         |   |            |       |                       |        |                       

See
accompanying independent auditors' report.

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