SEC Filing | H&E Rentals

View:

Download DOC

Download PDF

Download XLS

Download XBRL

e10vq

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2011.


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 number: 000-51759

H&E Equipment Services, Inc.

(Exact Name of Registrant as Specified in Its Charter)


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


11100 Mead Road, Suite 200,
Baton Rouge, Louisiana		70816
(Address of Principal Executive Offices)		(ZIP Code)

(225) 298-5200
(Registrant’s Telephone Number, Including Area Code)

None
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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 þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ No o

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


Large Accelerated Filer o		Accelerated Filer þ		Non-Accelerated Filer o		Smaller Reporting Company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

As of October 31, 2011, there were 35,086,534 shares of H&E Equipment Services, Inc. common stock, $0.01 par value, outstanding.

H&E EQUIPMENT SERVICES, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
SEPTEMBER 30, 2011


	Page
PART I. FINANCIAL INFORMATION		4

Item 1. Financial Statements:
Condensed Consolidated Balance Sheets as of September 30, 2011 (Unaudited) and December 31, 2010		4
Condensed Consolidated Statements of Operations (Unaudited) for the Three and Nine Months Ended September 30, 2011 and 2010		5
Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three and Nine Months Ended September 30, 2011 and 2010		6
Notes to Condensed Consolidated Financial Statements (Unaudited)		8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		21
Item 3. Quantitative and Qualitative Disclosures About Market Risk		34
Item 4. Controls and Procedures		34

PART II. OTHER INFORMATION		35

Item 1. Legal Proceedings		35
Item 1A. Risk Factors		35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		35
Item 3. Defaults upon Senior Securities		35
Item 4. (Removed and Reserved)		35
Item 5. Other Information		35
Item 6. Exhibits		36

Signatures		37
EX-10.1
EX-31.1
EX-31.2
EX-32.1
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT

Forward-Looking Statements

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

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

	•		general economic conditions and construction and industrial activity in the markets where we operate in North America, as well as the depth and duration of the recent macroeconomic downturn and related decreases in construction and industrial activities, which may continue to significantly affect our revenues and operating results;

	•		the impact of conditions in the global credit markets and their effect on construction spending and the economy in general;

	•		relationships with new equipment suppliers;

	•		increased maintenance and repair costs as we age our fleet and decreases in our equipment’s residual value;

	•		our indebtedness;

	•		the risks associated with the expansion of our business;

	•		our possible inability to integrate any businesses we acquire;

	•		competitive pressures;

	•		compliance with laws and regulations, including those relating to environmental matters and corporate governance matters; and

	•		other factors discussed under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2010.

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

For a more detailed discussion of some of the foregoing risks and uncertainties, see Item 1A — “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2010, as well as other reports and registration statements filed by us with the SEC. All of our annual, quarterly and current reports, and any amendments thereto, filed with or furnished to the SEC are available on our Internet website under the Investor Relations link. For more information about us and the announcements we make from time to time, visit our Internet website at www.he-equipment.com.

PART I—FINANCIAL INFORMATION


Item 1.		Financial Statements.

H&E EQUIPMENT SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share amounts)


	Balances at
	September 30,			December 31,
	2011			2010
	(Unaudited)
ASSETS
Cash	$	4,894		$	29,149
Receivables, net of allowance for doubtful accounts of $5,512 and $6,004, respectively		99,737			99,139
Inventories, net of reserves for obsolescence of $1,109 and $1,105, respectively		77,272			72,156
Prepaid expenses and other assets		5,501			8,679
Rental equipment, net of accumulated depreciation of $273,269 and $254,662, respectively		447,425			426,637
Property and equipment, net of accumulated depreciation and amortization of $61,107 and $53,941, respectively		59,584			57,186
Deferred financing costs, net of accumulated amortization of $11,497 and $10,456, respectively		5,986			7,027
Intangible assets, net of accumulated amortization of $697 and $3,050, respectively		92			429
Goodwill		34,019			34,019

Total assets	$	734,510		$	734,421


LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Amounts due on senior secured credit facility	$	13,580		$	—
Accounts payable		60,086			58,437
Manufacturer flooring plans payable		62,911			75,058
Accrued expenses payable and other liabilities		31,298			35,999
Senior unsecured notes		250,000			250,000
Capital leases payable		2,643			2,754
Deferred income taxes		55,988			55,919
Deferred compensation payable		1,992			2,004

Total liabilities		478,498			480,171

Commitments and contingent liabilities
Stockholders’ equity:
Preferred stock, $0.01 par value, 25,000,000 shares authorized; no shares issued		—			—
Common stock, $0.01 par value, 175,000,000 shares authorized; 38,808,941 and 38,699,666 shares issued at September 30, 2011 and December 31, 2010, respectively, and 35,086,534 and 35,029,804 shares outstanding at September 30, 2011 and December 31, 2010, respectively		387			386
Additional paid-in capital		210,362			209,111
Treasury stock at cost, 3,722,407 and 3,669,862 shares of common stock held at September 30, 2011 and December 31, 2010, respectively		(56,884	)		(56,330	)
Retained earnings		102,147			101,083

Total stockholders’ equity		256,012			254,250

Total liabilities and stockholders’ equity	$	734,510		$	734,421

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

H&E EQUIPMENT SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Amounts in thousands, except per share amounts)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2011			2010			2011			2010
Revenues:
Equipment rentals	$	61,190		$	48,272		$	165,440		$	126,400
New equipment sales		46,543			47,697			133,629			103,952
Used equipment sales		27,172			14,700			65,655			46,062
Parts sales		24,647			22,599			71,166			65,013
Services revenues		14,191			12,412			40,072			36,466
Other		10,546			8,164			27,570			21,643

Total revenues		184,289			153,844			503,532			399,536

Cost of revenues:
Rental depreciation		22,076			19,628			64,146			58,260
Rental expense		12,176			10,552			34,484			29,171
New equipment sales		41,123			42,979			118,271			93,992
Used equipment sales		20,824			11,083			50,444			35,690
Parts sales		18,073			16,710			52,174			47,804
Services revenues		5,451			5,177			15,499			13,805
Other		10,825			9,795			31,862			26,630

Total cost of revenues		130,548			115,924			366,880			305,352

Gross profit		53,741			37,920			136,652			94,184

Selling, general and administrative expenses		39,042			36,594			114,681			109,233
Gain on sales of property and equipment, net		372			125			521			324

Income (loss) from operations		15,071			1,451			22,492			(14,725	)


Other income (expense):
Interest expense		(7,222	)		(7,287	)		(21,607	)		(21,781	)
Other, net		118			10			626			166

Total other expense, net		(7,104	)		(7,277	)		(20,981	)		(21,615	)


Income (loss) before provision for income taxes		7,967			(5,826	)		1,511			(36,340	)
Provision (benefit) for income taxes		3,119			(2,046	)		447			(13,389	)

Net income (loss)	$	4,848		$	(3,780	)	$	1,064		$	(22,951	)

Net income (loss) per common share:
Basic	$	0.14		$	(0.11	)	$	0.03		$	(0.66	)

Diluted	$	0.14		$	(0.11	)	$	0.03		$	(0.66	)

Weighted average common shares outstanding:
Basic		34,804			34,700			34,743			34,656

Diluted		34,860			34,700			34,884			34,656

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

H&E EQUIPMENT SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Amounts in thousands)


	Nine Months Ended
	September 30,
	2011			2010
Cash flows from operating activities:
Net income (loss)	$	1,064		$	(22,951	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization on property and equipment		9,310			9,946
Depreciation on rental equipment		64,146			58,260
Amortization of loan discounts and deferred financing costs		1,042			1,060
Amortization of intangible assets		337			435
Provision for losses on accounts receivable		2,186			2,425
Provision for inventory obsolescence		170			192
Decrease in deferred income taxes		69			(11,443	)
Stock-based compensation expense		994			741
Gain on sales of property and equipment, net		(521	)		(324	)
Gain on sales of rental equipment, net		(14,103	)		(9,327	)
Changes in operating assets and liabilities:
Receivables, net		(2,784	)		(28,390	)
Inventories, net		(32,985	)		(24,092	)
Prepaid expenses and other assets		3,177			(2,246	)
Accounts payable		1,649			33,076
Manufacturer flooring plans payable		(12,147	)		(17,365	)
Accrued expenses payable and other liabilities		(4,700	)		(4,039	)
Deferred compensation payable		(12	)		47

Net cash provided by (used in) operating activities		16,892			(13,995	)

Cash flows from investing activities:
Purchases of property and equipment		(11,950	)		(3,262	)
Purchases of rental equipment		(90,669	)		(31,942	)
Proceeds from sales of property and equipment		763			434
Proceeds from sales of rental equipment		47,537			34,705

Net cash used in investing activities		(54,319	)		(65	)

Cash flows from financing activities:
Excess tax benefit from stock-based awards		257			—
Purchases of treasury stock		(554	)		(212	)
Borrowings on senior secured credit facility		352,711			—
Payments on senior secured credit facility		(339,131	)		—
Payments on deferred financing costs		—			(2,888	)
Payments of capital lease obligations		(111	)		(1,320	)

Net cash provided by (used in) financing activities		13,172			(4,420	)

Net decrease in cash		(24,255	)		(18,480	)
Cash, beginning of period		29,149			45,336

Cash, end of period	$	4,894		$	26,856

H&E EQUIPMENT SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
(Amounts in thousands)


	Nine Months Ended
	September 30,
	2011			2010
Supplemental schedule of noncash investing and financing activities:
Noncash asset purchases:
Assets transferred from new and used inventory to rental fleet	$	27,699		$	26,415

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	25,793		$	25,925

Income taxes paid, net of refunds received	$	(1,635	)	$	64

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

H&E EQUIPMENT SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) Organization and Nature of Operations

Basis of Presentation

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

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such regulations. In the opinion of management, all adjustments (consisting of all normal and recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011, and therefore, the results and trends in these interim condensed consolidated financial statements may not be the same for the entire year. These interim condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and related notes in our Annual Report on Form 10-K for the year ended December 31, 2010, from which the balance sheet amounts as of December 31, 2010 were derived.

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

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

Nature of Operations

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

(2) Significant Accounting Policies

We describe our significant accounting policies in note 2 of the notes to consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2010. During the three and nine month periods ended September 30, 2011, there were no significant changes to those accounting policies.

Use of Estimates

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

basis based on information currently available, and changes in facts and circumstances may cause us to revise these estimates.

Recent Accounting Pronouncements

In October 2009, the FASB issued ASU 2009-13, Multiple-Deliverable Revenue Arrangements (amendments to ASC 605, Revenue Recognition) (“ASU 2009-13”). ASU 2009-13 addresses how to determine whether an arrangement involving multiple deliverables contains more than one unit of accounting and requires entities to allocate revenue in an arrangement containing more than one unit of accounting using estimated selling prices of the delivered goods and services based on a selling price hierarchy. The amendments eliminate the residual method of revenue allocation and require revenue to be allocated using the relative selling price method. We adopted the provisions of ASU 2009-13 effective January 1, 2011, and such adoption did not have a material impact on our condensed consolidated financial statements.

In December 2010, the FASB issued updated accounting guidance related to the calculation of the carrying amount of a reporting unit when performing the first step of a goodwill impairment test. More specifically, this update requires an entity to use an equity premise when performing the first step of a goodwill impairment test and if a reporting unit has a zero or negative carrying amount, the entity must assess and consider qualitative factors and whether it is more likely than not that a goodwill impairment exists. The new accounting guidance became effective for us on January 1, 2011 for impairment tests performed during fiscal 2011. We plan to adopt the new disclosures in conjunction with our annual impairment test as of October 1, 2011, or sooner if triggering events occurred and indicated that a goodwill impairment test should be performed. However, as we currently do not have any reporting units with a zero or negative carrying amount, we do not expect the application of this guidance to have an impact on our consolidated financial statements.

In September 2011, the FASB issued ASU 2011-08, Intangibles—Goodwill and Other (Topic 350)—Testing Goodwill for Impairment (“ASU 2011-08”), to allow entities to first use a qualitative approach to test goodwill for impairment. ASU 2011-08 permits an entity to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is concluded that this is the case, the currently prescribed two-step goodwill impairment test must be performed. Otherwise, the two-step goodwill impairment test is not required. Entities are not required to perform the qualitative assessment and are permitted to skip the qualitative assessment for any reporting unit in any period and proceed directly to Step 1 of the two-step goodwill impairment test. ASU 2011-08 is effective for us in fiscal 2012 and earlier adoption is permitted. Adoption of this guidance is not expected to have a material effect on the Company’s consolidated financial statements.

(3) Fair Value of Financial Instruments

The carrying value of financial instruments reported in our accompanying condensed consolidated balance sheets for cash, accounts receivable, accounts payable and accrued expenses payable and other liabilities approximate fair value due to the immediate or short-term nature or maturity of these financial instruments. The determination of the fair value of our letters of credit is based on fees currently charged for similar agreements. The carrying amounts and fair values of our other financial instruments subject to fair value disclosures have been calculated based upon market quotes and present value calculations based on our current estimated incremental borrowing rates for similar types of borrowing arrangements, which are presented in the table below (amounts in thousands):


	September 30, 2011
	Carrying		Fair
	Amount		Value
Manufacturer flooring plans payable with interest computed at 7.00%	$	62,911	$	50,941
Senior unsecured notes with interest compounded at 8.375%		250,000		250,000
Capital leases payable with interest computed at 5.929% to 9.55%		2,643		2,251
Letters of credit		—		192


	December 31, 2010
	Carrying		Fair
	Amount		Value
Manufacturer flooring plans payable with interest computed at 7.00%	$	75,058	$	63,105
Senior unsecured notes with interest compounded at 8.375%		250,000		251,250
Capital leases payable with interest computed at 5.929% to 9.55%		2,754		2,199
Letters of credit		—		216

(4) Stockholders’ Equity

The following table summarizes the activity in Stockholders’ Equity for the nine month period ended September 30, 2011 (amounts in thousands, except share data):


					Additional							Total
	Common Stock				Paid-in		Treasury			Retained		Stockholders’
	Shares Issued		Amount		Capital		Stock			Earnings		Equity
Balances at December 31, 2010		38,699,666	$	386	$	209,111	$	(56,330	)	$	101,083	$	254,250
Stock-based compensation		—		—		994		—			—		994
Tax benefits associated with stock-based awards						257							257
Issuance of common stock		109,275		1		—		—			—		1
Repurchase of 42,016 shares of restricted common stock		—		—		—		(554	)		—		(554	)
Net income		—		—		—		—			1,064		1,064

Balances at September 30, 2011		38,808,941	$	387	$	210,362	$	(56,884	)	$	102,147	$	256,012

(5) Stock-Based Compensation

We account for our stock-based compensation plan using the fair value recognition provisions of ASC 718, Stock Compensation (“ASC 718”). Under the provisions of ASC 718, stock-based compensation is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the requisite employee service period (generally the vesting period of the grant). Shares available for future stock-based payment awards under our 2006 Stock-Based Incentive Compensation Plan were 3,829,079 shares as of September 30, 2011.

Non-vested Stock

The following table summarizes our non-vested stock activity for the nine month period ended September 30, 2011:


				Weighted Average
				Grant Date Fair
	Number of Shares			Value
Non-vested stock at December 31, 2010		329,937		$	8.57
Granted		109,275		$	14.46
Vested		(148,252	)	$	8.69
Forfeited		(10,529	)	$	9.37

Non-vested stock at September 30, 2011		280,431		$	10.77

As of September 30, 2011, we had unrecognized compensation expense of approximately $2.4 million related to non-vested stock that we expect to be recognized over a weighted-average period of 2.2 years. The following table summarizes compensation expense related to non-vested stock, which is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2011 and 2010 (amounts in thousands):


	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2011		2010		2011		2010
Compensation expense	$	334	$	301	$	994	$	732

Stock Options

At September 30, 2011, there is no unrecognized compensation expense as all stock option awards have fully vested. The following table summarizes compensation expense included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2011 and 2010 (amounts in thousands):


	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2011		2010		2011		2010
Compensation expense	$	—	$	—	$	—	$	9

The following table represents stock option activity for the nine month period ended September 30, 2011:


					Weighted Average
			Weighted Average		Contractual Life
	Number of Shares		Exercise Price		In Years
Outstanding options at December 31, 2010		51,000	$	24.80
Granted		—		—
Exercised		—		—
Canceled, forfeited or expired		—		—

Outstanding options at September 30, 2011		51,000	$	24.80		4.8

Options exercisable at September 30, 2011		51,000	$	24.80		4.8

The closing price of our common stock on September 30, 2011 was $8.25. All options outstanding at September 30, 2011 have grant date fair values which exceed the September 30, 2011 closing stock price.

(6) Income (Loss) per Share

Income (loss) per common share for the three and nine month periods ended September 30, 2011 and 2010 are based on the weighted average number of common shares outstanding during the period. The effects of potentially dilutive securities that are anti-dilutive are not included in the computation of dilutive income (loss) per share. The following table sets forth the computation of basic and diluted net income (loss) per common share for the three and nine month periods ended September 30, 2011 and 2010 (amounts in thousands, except per share amounts):


	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2011		2010			2011		2010
Basic net income (loss) per share:
Net income (loss)	$	4,848	$	(3,780	)	$	1,064	$	(22,951	)
Weighted average number of shares of common stock outstanding		34,804		34,700			34,743		34,656

Net income (loss) per share of common stock — basic	$	0.14	$	(0.11	)	$	0.03	$	(0.66	)

Diluted net income (loss) per share:
Net income (loss)	$	4,848	$	(3,780	)	$	1,064	$	(22,951	)
Weighted average number of shares of common stock outstanding		34,804		34,700			34,743		34,656
Effect of dilutive securities:
Effect of dilutive stock options		—		—			—		—
Effect of dilutive non-vested restricted stock		56		—			141		—

Weighted average number of shares of common stock outstanding — diluted		34,860		34,700			34,884		34,656

Net income (loss) per share of common stock — diluted	$	0.14	$	(0.11	)	$	0.03	$	(0.66	)

Common shares excluded from the denominator as anti-dilutive:
Stock options		51		51			51		51

Non-vested restricted stock		52		167			—		224

(7) Segment Information

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

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


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2011			2010			2011			2010
Revenues:
Equipment rentals	$	61,190		$	48,272		$	165,440		$	126,400
New equipment sales		46,543			47,697			133,629			103,952
Used equipment sales		27,172			14,700			65,655			46,062
Parts sales		24,647			22,599			71,166			65,013
Services revenues		14,191			12,412			40,072			36,466

Total segmented revenues		173,743			145,680			475,962			377,893
Non-segmented revenues		10,546			8,164			27,570			21,643

Total revenues	$	184,289		$	153,844		$	503,532		$	399,536

Gross Profit (Loss):
Equipment rentals	$	26,938		$	18,092		$	66,810		$	38,969
New equipment sales		5,420			4,718			15,358			9,960
Used equipment sales		6,348			3,617			15,211			10,372
Parts sales		6,574			5,889			18,992			17,209
Services revenues		8,740			7,235			24,573			22,661

Total segmented gross profit		54,020			39,551			140,944			99,171
Non-segmented gross loss		(279	)		(1,631	)		(4,292	)		(4,987	)

Total gross profit	$	53,741		$	37,920		$	136,652		$	94,184


	Balances at
	September 30,		December 31,
	2011		2010
Segment identified assets:
Equipment sales	$	63,142	$	57,540
Equipment rentals		447,425		426,637
Parts and services		14,129		14,617

Total segment identified assets		524,696		498,794
Non-segment identified assets		209,814		235,627

Total assets	$	734,510	$	734,421

The Company operates primarily in the United States and our sales to international customers for the three and nine month periods ended September 30, 2011 were 1.5% and 2.4%, respectively, of total revenues compared to 1.8% and 2.5% for the three and nine month periods ended September 30, 2010. No one customer accounted for more than 10% of our revenues on an overall or segment basis for any of the periods presented.

(8) Condensed Consolidating Financial Information of Guarantor Subsidiaries

All of the indebtedness of H&E Equipment Services, Inc. is guaranteed by GNE Investments, Inc. and its wholly-owned subsidiary Great Northern Equipment, Inc., H&E Finance Corp., H&E Equipment Services (California), LLC, H&E California Holdings, Inc. and H&E Equipment Services (Mid-Atlantic), 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, Inc.’s ability to obtain funds from the guarantor subsidiaries by dividend or loan.

The condensed consolidating financial statements of H&E Equipment Services, Inc. and its subsidiaries are included below. The financial statements for H&E Finance Corp. are not included within the condensed consolidating financial statements because H&E Finance Corp. has no assets or operations. The condensed consolidating balance sheet amounts as of December 31, 2010 included herein were derived from our annual audited consolidated financial statements and related notes in our Annual Report on Form 10-K for the year ended December 31, 2010.

CONDENSED CONSOLIDATING BALANCE SHEET


	As of September 30, 2011
	H&E Equipment			Guarantor
	Services, Inc.			Subsidiaries			Elimination		Consolidated
				(Amounts in thousands)
Assets:
Cash	$	4,894		$	—		$	—	$	4,894
Receivables, net		86,197			13,540			—		99,737
Inventories, net		64,045			13,227			—		77,272
Prepaid expenses and other assets		5,349			152			—		5,501
Rental equipment, net		360,530			86,895			—		447,425
Property and equipment, net		49,097			10,487			—		59,584
Deferred financing costs, net		5,986			—			—		5,986
Intangible assets, net		—			92			—		92
Investment in guarantor subsidiaries		(24,328	)		—			24,328		—
Goodwill		4,493			29,526			—		34,019

Total assets	$	556,263		$	153,919		$	24,328	$	734,510


Liabilities and Stockholders’ Equity:
Amounts due on senior secured credit facility	$	13,580		$	—		$	—	$	13,580
Accounts payable		56,614			3,472			—		60,086
Manufacturer flooring plans payable		62,791			120			—		62,911
Accrued expenses payable and other liabilities		30,397			901			—		31,298
Intercompany balances		(171,111	)		171,111			—		—
Senior unsecured notes		250,000			—			—		250,000
Capital lease payable		—			2,643			—		2,643
Deferred income taxes		55,988			—			—		55,988
Deferred compensation payable		1,992			—			—		1,992

Total liabilities		300,251			178,247			—		478,498
Stockholders’ equity (deficit)		256,012			(24,328	)		24,328		256,012

Total liabilities and stockholders’ equity	$	556,263		$	153,919		$	24,328	$	734,510

CONDENSED CONSOLIDATING BALANCE SHEET


	As of December 31, 2010
	H&E Equipment			Guarantor
	Services, Inc.			Subsidiaries			Elimination		Consolidated
				(Amounts in thousands)
Assets:
Cash	$	29,149		$	—		$	—	$	29,149
Receivables, net		87,629			11,510			—		99,139
Inventories, net		57,698			14,458			—		72,156
Prepaid expenses and other assets		8,479			200			—		8,679
Rental equipment, net		339,644			86,993			—		426,637
Property and equipment, net		47,301			9,885			—		57,186
Deferred financing costs, net		7,027			—			—		7,027
Intangible assets, net		—			429			—		429
Investment in guarantor subsidiaries		(18,509	)		—			18,509		—
Goodwill		4,493			29,526			—		34,019

Total assets	$	526,911		$	153,001		$	18,509	$	734,421

Liabilities and Stockholders’ Equity:
Accounts payable	$	55,482		$	2,955		$	—	$	58,437
Manufacturer flooring plans payable		74,882			176			—		75,058
Accrued expenses payable and other liabilities		34,896			1,103			—		35,999
Intercompany balances		(164,522	)		164,522			—		—
Senior unsecured notes		250,000			—			—		250,000
Capital lease payable		—			2,754			—		2,754
Deferred income taxes		55,919			—			—		55,919
Deferred compensation payable		2,004			—			—		2,004

Total liabilities		308,661			171,510			—		480,171
Stockholders’ equity (deficit)		254,250			(18,509	)		18,509		254,250

Total liabilities and stockholders’ equity	$	562,911		$	153,001		$	18,509	$	734,421

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS


	Three Months Ended September 30, 2011
	H&E Equipment			Guarantor
	Services, Inc.			Subsidiaries			Elimination		Consolidated
				(Amounts in thousands)
Revenues:
Equipment rentals	$	48,565		$	12,625		$	—	$	61,190
New equipment sales		42,175			4,368			—		46,543
Used equipment sales		22,471			4,701			—		27,172
Parts sales		20,935			3,712			—		24,647
Services revenues		12,411			1,780			—		14,191
Other		8,610			1,936			—		10,546

Total revenues		155,167			29,122			—		184,289

Cost of revenues:
Rental depreciation		17,328			4,748			—		22,076
Rental expense		9,520			2,656			—		12,176
New equipment sales		37,193			3,930			—		41,123
Used equipment sales		16,882			3,942			—		20,824
Parts sales		15,416			2,657			—		18,073
Services revenues		4,786			665			—		5,451
Other		8,580			2,245			—		10,825

Total cost of revenues		109,705			20,843			—		130,548

Gross profit (loss):
Equipment rentals		21,717			5,221			—		26,938
New equipment sales		4,982			438			—		5,420
Used equipment sales		5,589			759			—		6,348
Parts sales		5,519			1,055			—		6,574
Services revenues		7,625			1,115			—		8,740
Other		30			(309	)		—		(279	)

Gross profit		45,462			8,279			—		53,741

Selling, general and administrative expenses		32,217			6,825			—		39,042
Equity in loss of guarantor subsidiaries		(759	)		—			759		—
Gain on sales of property and equipment, net		250			122			—		372

Income from operations		12,736			1,576			759		15,071

Other income (expense):
Interest expense		(4,870	)		(2,352	)		—		(7,222	)
Other, net		101			17			—		118

Total other expense, net		(4,769	)		(2,335	)		—		(7,104	)

Income (loss) before income taxes		7,967			(759	)		759		7,967
Income tax expense		3,119			—			—		3,119

Net income (loss)	$	4,848		$	(759	)	$	759	$	4,848

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS


	Three Months Ended September 30, 2010
	H&E Equipment			Guarantor
	Services, Inc.			Subsidiaries			Elimination		Consolidated
				(Amounts in thousands)
Revenues:
Equipment rentals	$	37,617		$	10,655		$	—	$	48,272
New equipment sales		44,125			3,572			—		47,697
Used equipment sales		13,034			1,666			—		14,700
Parts sales		19,055			3,544			—		22,599
Services revenues		10,951			1,461			—		12,412
Other		6,732			1,432			—		8,164

Total revenues		131,514			22,330			—		153,844

Cost of revenues:
Rental depreciation		15,229			4,399			—		19,628
Rental expense		8,371			2,181			—		10,552
New equipment sales		39,841			3,138			—		42,979
Used equipment sales		9,839			1,244			—		11,083
Parts sales		14,115			2,595			—		16,710
Services revenues		4,623			554			—		5,177
Other		7,639			2,156			—		9,795

Total cost of revenues		99,657			16,267			—		115,924

Gross profit (loss):
Equipment rentals		14,017			4,075			—		18,092
New equipment sales		4,284			434			—		4,718
Used equipment sales		3,195			422			—		3,617
Parts sales		4,940			949			—		5,889
Services revenues		6,328			907			—		7,235
Other		(907	)		(724	)		—		(1,631	)

Gross profit		31,857			6,063			—		37,920

Selling, general and administrative expenses		30,331			6,263			—		36,594
Equity in loss of guarantor subsidiaries		(2,620	)		—			2,620		—
Gain on sales of property and equipment, net		108			17			—		125

Loss from operations		(986	)		(183	)		2,620		1,451

Other income (expense):
Interest expense		(4,845	)		(2,442	)		—		(7,287	)
Other, net		5			5			—		10

Total other expense, net		(4,840	)		(2,437	)		—		(7,277	)

Loss before income taxes		(5,826	)		(2,620	)		2,620		(5,826	)
Income tax benefit		(2,046	)		—			—		(2,046	)

Net loss	$	(3,780	)	$	(2,620	)	$	2,620	$	(3,780	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS


	Nine Months Ended September 30, 2011
	H&E Equipment			Guarantor
	Services, Inc.			Subsidiaries			Elimination		Consolidated
				(Amounts in thousands)
Revenues:
Equipment rentals	$	132,313		$	33,127		$	—	$	165,440
New equipment sales		118,099			15,530			—		133,629
Used equipment sales		54,294			11,361			—		65,655
Parts sales		60,234			10,932			—		71,166
Services revenues		35,189			4,883			—		40,072
Other		22,532			5,038			—		27,570

Total revenues		422,661			80,871			—		503,532

Cost of revenues:
Rental depreciation		50,317			13,829			—		64,146
Rental expense		27,595			6,889			—		34,484
New equipment sales		104,488			13,783			—		118,271
Used equipment sales		41,058			9,386			—		50,444
Parts sales		44,250			7,924			—		52,174
Services revenues		13,784			1,715			—		15,499
Other		25,128			6,734			—		31,862

Total cost of revenues		306,620			60,260			—		366,880

Gross profit (loss):
Equipment rentals		54,401			12,409			—		66,810
New equipment sales		13,611			1,747			—		15,358
Used equipment sales		13,236			1,975			—		15,211
Parts sales		15,984			3,008			—		18,992
Services revenues		21,405			3,168			—		24,573
Other		(2,596	)		(1,696	)		—		(4,292	)

Gross profit		116,041			20,611			—		136,652

Selling, general and administrative expenses		95,057			19,624			—		114,681
Equity in loss of guarantor subsidiaries		(5,819	)		—			5,819		—
Gain on sales of property and equipment, net		378			143			—		521

Income from operations		15,543			1,130			5,819		22,492

Other income (expense):
Interest expense		(14,629	)		(6,978	)		—		(21,607	)
Other, net		597			29			—		626

Total other expense, net		(14,032	)		(6,949	)		—		(20,981	)

Income (loss) before income taxes		1,511			(5,819	)		5,819		1,511
Income tax benefit		447			—			—		447

Net income (loss)	$	1,064		$	(5,819	)	$	5,819	$	1,064

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS


	Nine Months Ended September 30, 2010
	H&E Equipment			Guarantor
	Services, Inc.			Subsidiaries			Elimination		Consolidated
				(Amounts in thousands)
Revenues:
Equipment rentals	$	99,849		$	26,551		$	—	$	126,400
New equipment sales		93,221			10,731			—		103,952
Used equipment sales		39,658			6,404			—		46,062
Parts sales		54,942			10,071			—		65,013
Services revenues		32,020			4,446			—		36,466
Other		17,634			4,009			—		21,643

Total revenues		337,324			62,212			—		399,536

Cost of revenues:
Rental depreciation		45,631			12,629			—		58,260
Rental expense		23,458			5,713			—		29,171
New equipment sales		84,247			9,745			—		93,992
Used equipment sales		30,824			4,866			—		35,690
Parts sales		40,420			7,384			—		47,804
Services revenues		12,320			1,485			—		13,805
Other		20,852			5,778			—		26,630

Total cost of revenues		257,752			47,600			—		305,352

Gross profit (loss):
Equipment rentals		30,760			8,209			—		38,969
New equipment sales		8,974			986			—		9,960
Used equipment sales		8,834			1,538			—		10,372
Parts sales		14,522			2,687			—		17,209
Services revenues		19,700			2,961			—		22,661
Other		(3,218	)		(1,769	)		—		(4,987	)

Gross profit		79,572			14,612			—		94,184

Selling, general and administrative expenses		91,114			18,119			—		109,233
Equity in loss of guarantor subsidiaries		(10,726	)		—			10,726		—
Gain on sales of property and equipment, net		264			60			—		324

Loss from operations		(22,004	)		(3,447	)		10,726		(14,725	)

Other income (expense):
Interest expense		(14,494	)		(7,287	)		—		(21,781	)
Other, net		158			8			—		166

Total other expense, net		(14,336	)		(7,279	)		—		(21,615	)

Loss before income taxes		(36,340	)		(10,726	)		10,726		(36,340	)
Income tax benefit		(13,389	)		—			—		(13,389	)

Net loss	$	(22,951	)	$	(10,726	)	$	10,726	$	(22,951	)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS


	Nine Months Ended September 30, 2011
	H&E Equipment			Guarantor
	Services, Inc.			Subsidiaries			Elimination			Consolidated
				(Amounts in thousands)
Cash flows from operating activities:
Net income (loss)	$	1,064		$	(5,819	)	$	5,819		$	1,064
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization on property and equipment		7,948			1,362			—			9,310
Depreciation on rental equipment		50,317			13,829			—			64,146
Amortization of loan discounts and deferred financing costs		1,042			—			—			1,042
Amortization of intangible assets		—			337			—			337
Provision for losses on accounts receivable		2,849			(663	)		—			2,186
Provision for inventory obsolescence		170			—			—			170
Provision for deferred income taxes		69			—			—			69
Stock-based compensation expense		994			—			—			994
Gain on sales of property and equipment, net		(378	)		(143	)		—			(521	)
Gain on sales of rental equipment, net		(12,121	)		(1,982	)		—			(14,103	)
Equity in loss of guarantor subsidiaries		5,819			—			(5,819	)		—
Changes in operating assets and liabilities:
Receivables, net		(1,417	)		(1,367	)		—			(2,784	)
Inventories, net		(29,242	)		(3,743	)		—			(32,985	)
Prepaid expenses and other assets		3,129			48			—			3,177
Accounts payable		1,132			517			—			1,649
Manufacturer flooring plans payable		(12,091	)		(56	)		—			(12,147	)
Accrued expenses payable and other liabilities		(4,498	)		(202	)		—			(4,700	)
Intercompany balances		(6,589	)		6,589			—			—
Deferred compensation payable		(12	)		—			—			(12	)

Net cash provided by operating activities		8,185			8,707			—			16,892

Cash flows from investing activities:
Purchases of property and equipment		(9,982	)		(1,968	)		—			(11,950	)
Purchases of rental equipment		(73,897	)		(16,772	)		—			(90,669	)
Proceeds from sales of property and equipment		616			147			—			763
Proceeds from sales of rental equipment		37,540			9,997			—			47,537

Net cash used in investing activities		(45,723	)		(8,596	)		—			(54,319	)

Cash flows from financing activities:
Excess tax benefit from stock-based awards		257			—			—			257
Purchases of treasury stock		(554	)		—			—			(554	)
Borrowings on senior secured credit facility		352,711			—			—			352,711
Payments on senior secured credit facility		(339,131	)		—			—			(339,131	)
Payments on capital lease obligations		—			(111	)		—			(111	)

Net cash provided by (used in) financing activities		13,283			(111	)		—			13,172

Net decrease in cash		(24,255	)		—			—			(24,255	)
Cash, beginning of period		29,149			—			—			29,149

Cash, end of period	$	4,894		$	—		$	—		$	4,894

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS


	Nine Months Ended September 30, 2010
	H&E Equipment			Guarantor
	Services			Subsidiaries			Elimination			Consolidated
				(Amounts in thousands)
Cash flows from operating activities:
Net loss	$	(22,951	)	$	(10,726	)	$	10,726		$	(22,951	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization on property and equipment		8,385			1,561			—			9,946
Depreciation on rental equipment		45,631			12,629			—			58,260
Amortization of loan discounts and deferred financing costs		1,060			—			—			1,060
Amortization of intangible assets		—			435			—			435
Provision for losses on accounts receivable		2,519			(94	)		—			2,425
Provision for inventory obsolescence		192			—			—			192
Decrease in deferred income taxes		(11,443	)		—			—			(11,443	)
Stock-based compensation expense		741			—			—			741
Gain on sales of property and equipment, net		(264	)		(60	)		—			(324	)
Gain on sales of rental equipment, net		(7,860	)		(1,467	)		—			(9,327	)
Equity in loss of guarantor subsidiaries		10,726			—			(10,726	)		—
Changes in operating assets and liabilities:
Receivables, net		(30,617	)		2,227			—			(28,390	)
Inventories, net		(24,063	)		(29	)		—			(24,092	)
Prepaid expenses and other assets		(2,139	)		(107	)		—			(2,246	)
Accounts payable		28,967			4,109			—			33,076
Manufacturer flooring plans payable		(17,729	)		364			—			(17,365	)
Accrued expenses payable and other liabilities		(4,246	)		207			—			(4,039	)
Intercompany balances		9,545			(9,545	)		—			—
Deferred compensation payable		47			—			—			47

Net cash used in operating activities		(13,499	)		(496	)		—			(13,995	)

Cash flows from investing activities:
Purchases of property and equipment		(2,876	)		(386	)		—			(3,262	)
Purchases of rental equipment		(27,022	)		(4,920	)		—			(31,942	)
Proceeds from sales of property and equipment		359			75			—			434
Proceeds from sales of rental equipment		28,884			5,821			—			34,705

Net cash provided by (used in) investing activities		(655	)		590			—			(65	)

Cash flows from financing activities:
Purchases of treasury stock		(212	)		—			—			(212	)
Payments of deferred financing costs		(2,888	)		—			—			(2,888	)
Payments on capital lease obligations		(1,216	)		(104	)		—			(1,320	)

Net cash used in financing activities		(4,316	)		(104	)		—			(4,420	)

Net decrease in cash		(18,470	)		(10	)		—			(18,480	)
Cash, beginning of period		45,326			10			—			45,336

Cash, end of period	$	26,856		$	—		$	—		$	26,856

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

The following discussion summarizes the financial position of H&E Equipment Services, Inc. and its subsidiaries as of September 30, 2011, and its results of operations for the three and nine month periods ended September 30, 2011, and should be read in conjunction with (i) the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q and (ii) the audited consolidated financial statements and accompanying notes to our Annual Report on Form 10-K for the year ended December 31, 2010. The following discussion contains, in addition to historical information, forward-looking statements that include risks and uncertainties (see discussion of “Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q). Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those factors set forth under Item 1A — “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2010.

Overview

Background

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

As of October 31, 2011, we operated 65 full-service facilities throughout the Intermountain, Southwest, Gulf Coast, West Coast, Southeast and Mid-Atlantic regions of the United States. Our work force includes distinct, focused sales forces for our new and used equipment sales and rental operations, highly skilled service technicians, product specialists and regional managers. We focus our sales and rental activities on, and organize our personnel principally by, our four core equipment categories. We believe this allows us to provide specialized equipment knowledge, improve the effectiveness of our rental and sales force and strengthen our customer relationships. In addition, we have branch managers for each location who are responsible for managing their assets and financial results. We believe this fosters accountability in our business, and strengthens our local and regional relationships.

Through our predecessor companies, we have been in the equipment services business for approximately 50 years. H&E Equipment Services L.L.C. (“H&E LLC”) was formed in June 2002 through the business combination of Head & Engquist, a wholly-owned subsidiary of Gulf Wide, and ICM. Head & Engquist, founded in 1961, and ICM, founded in 1971, were two leading regional, integrated equipment service companies operating in contiguous geographic markets. In the June 2002 transaction, Head & Engquist and ICM were merged with and into Gulf Wide, which was renamed H&E LLC. Prior to the combination, Head & Engquist operated 25 facilities in the Gulf Coast region, and ICM operated 16 facilities in the Intermountain region of the United States.

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

Critical Accounting Policies

Item 7, included in Part II of our Annual Report on Form 10-K for the year ended December 31, 2010, presents the accounting policies and related estimates that we believe are the most critical to understanding our consolidated financial statements, financial condition, and results of operations and cash flows, and which require complex management judgment and assumptions, or involve uncertainties. There have been no changes to these critical accounting policies and estimates during the three and nine month periods ended September 30, 2011. These policies include, among others, revenue recognition, the adequacy of the allowance for doubtful accounts, the propriety of our estimated useful life of rental equipment and property and equipment, the potential impairment of long-lived assets including goodwill and intangible assets, obsolescence reserves on inventory, the allocation of purchase price related to business combinations, reserves for claims, including self-insurance reserves, and deferred income taxes, including the valuation of any related deferred tax assets.

Information regarding our other significant accounting policies is included in note 2 to our consolidated financial statements in Item 8 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2010 and in note 2 to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

Business Segments

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

	•		Equipment Rentals. Our rental operation primarily rents our four core types of construction and industrial equipment. We have a well-maintained rental fleet and our own dedicated sales force, focused by equipment type. We actively manage the size, quality, age and composition of our rental fleet based on our analysis of key measures such as time utilization (which we analyze as equipment usage based on: (1) the number of rental equipment units available for rent, and (2) as a percentage of original equipment cost), rental rate trends and targets, rental equipment dollar utilization and maintenance and repair costs, which we closely monitor. We maintain fleet quality through regional quality control managers and our parts and services operations.

	•		New Equipment Sales. Our new equipment sales operation sells new equipment in all of our four core product categories. We have a retail sales force focused by equipment type that is separate from our rental sales force. Manufacturer purchase terms and pricing are managed by our product specialists.

	•		Used Equipment Sales. Our used equipment sales are generated primarily from sales of used equipment from our rental fleet, as well as from sales of inventoried equipment that we acquire through trade-ins from our equipment customers and through selective purchases of high quality used equipment. Used equipment is sold by our dedicated retail sales force. Our used equipment sales are an effective way for us to manage the size and composition of our rental fleet and provide a profitable distribution channel for disposal of rental equipment.

	•		Parts Sales. Our parts business sells new and used parts for the equipment we sell and also provides parts to our own rental fleet. To a lesser degree, we also sell parts for equipment produced by manufacturers whose products we neither rent nor sell. In order to provide timely parts and service support to our customers as well as our own rental fleet, we maintain an extensive parts inventory.

	•		Services. Our services operation provides maintenance and repair services for our customers’ equipment and to our own rental fleet at our facilities as well as at our customers’ locations. As the authorized distributor for numerous equipment manufacturers, we are able to provide service to that equipment that will be covered under the manufacturer’s warranty.

Our non-segmented revenues and costs relate to equipment support activities that we provide, such as transportation, hauling, parts freight and damage waivers, and are not generally allocated to reportable segments.

For additional information about our business segments, see note 7 to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

Revenue Sources

We generate all of our total revenues from our five business segments and our non-segmented equipment support activities. Equipment rentals and new equipment sales account for more than half of our total revenues. For the nine months ended September 30, 2011, 32.9% of our total revenues were attributable to equipment rentals, 26.5% of our total revenues were attributable to new equipment sales, 13.0% were attributable to used equipment sales, 14.1% were attributable to parts sales, 8.0% were attributable to our services revenues and 5.5% were attributable to non-segmented other revenues.

The equipment that we sell, rent and service is principally used in the construction industry, as well as by companies for commercial and industrial uses such as plant maintenance and turnarounds. As a result, our total revenues are affected by several

factors including, but not limited to, the demand for and availability of rental equipment, rental rates and other competitive factors, the demand for new and used equipment, the level of construction and industrial activities, spending levels by our customers, adverse weather conditions and general economic conditions. For a discussion of the impact of seasonality on our revenues, see “Seasonality” below.

Equipment Rentals. Our rental operation primarily rents our four core types of construction and industrial equipment. We have a well-maintained rental fleet and our own dedicated sales force, focused by equipment type. We actively manage the size, quality, age and composition of our rental fleet based on our analysis of key measures such as time utilization (which we analyze: (1) as equipment usage based on the number of rental equipment units available for rent and (2) as a percentage of original equipment cost), rental rate trends and targets, rental equipment dollar utilization and maintenance and repair costs, which we closely monitor. We maintain fleet quality through regional quality control managers and our parts and services operations. We recognize revenue from equipment rentals in the period earned on a straight-line basis, over the contract term, regardless of the timing of the billing to customers.

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

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

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

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

Non-Segmented Other Revenues. Our non-segmented other revenue consists of billings to customers for equipment support and activities including: transportation, hauling, parts freight, environmental fees and loss damage waiver charges. We recognize non-segmented other revenues at the time of billing and after the related services have been provided.

Principal Costs and Expenses

Our largest expenses are the costs to purchase the new equipment we sell and rent, the costs associated with the used equipment we sell, rental expenses, rental depreciation and costs associated with parts sales and services, all of which are included in cost of revenues. For the nine months ended September 30, 2011, our total cost of revenues was $366.9 million. Our operating expenses consist principally of selling, general and administrative expenses. For the nine months ended September 30, 2011, our selling, general and administrative expenses were $114.7 million. In addition, we have interest expense related to our debt instruments. Operating expenses and all other income and expense items below the gross profit line of our consolidated statements of operations are not generally allocated to our reportable segments.

We are also subject to federal and state income taxes. We have been notified by the Internal Revenue Service (“IRS”) that our Federal Tax Returns for the tax years 2005, 2006, 2007, 2008 and 2009 have been selected for examination. We currently do not expect any material adjustment resulting from the IRS examination.

Cost of Revenues:

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

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

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

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

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

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

Non-Segmented Other. These expenses include costs associated with providing transportation, hauling, parts freight, and damage waiver including, among other items, drivers’ wages, fuel costs, shipping costs, and our costs related to damage waiver policies.

Selling, General and Administrative Expenses:

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

Interest Expense:

Interest expense for the periods presented represents the interest on our outstanding debt instruments. Interest expense also includes interest on our outstanding manufacturer flooring plans payable which are used to finance inventory and rental equipment purchases. Non-cash interest expense related to the amortization cost of deferred financing costs is also included in interest expense.

Principal Cash Flows

We generate cash primarily from our operating activities and historically, we have used cash flows from operating activities, manufacturer floor plan financings and available borrowings under our revolving senior secured credit facility as the primary sources of funds to purchase our inventory and to fund working capital and capital expenditures (see also “Liquidity and Capital Resources” below).

Rental Fleet

A significant portion of our overall value is in our rental fleet equipment. The net book value of rental equipment at September 30, 2011 was $447.4 million, or approximately 60.9% of our total assets. Our rental fleet, as of September 30, 2011, consisted of

approximately 17,233 units having an original acquisition cost (which we define as the cost originally paid to manufacturers or the original amount financed under operating leases) of approximately $726.1 million. As of September 30, 2011, our rental fleet composition was as follows (dollars in millions):


			% of			Original		% of Original			Average
			Total			Acquisition		Acquisition			Age in
	Units		Units			Cost		Cost			Months
Hi-Lift or Aerial Work Platforms		12,187		70.7	%	$	437.0		60.2	%		49.8
Cranes		357		2.1	%		93.1		12.8	%		40.1
Earthmoving		1,788		10.4	%		151.8		20.9	%		27.5
Industrial Lift Trucks		552		3.2	%		19.2		2.6	%		28.7
Other		2,349		13.6	%		25.0		3.5	%		24.7

Total		17,233		100.0	%	$	726.1		100.0	%		43.2

Determining the optimal age and mix for our rental fleet equipment is subjective and requires considerable estimates and judgments by management. We constantly evaluate the mix, age and quality of the equipment in our rental fleet in response to current economic and market conditions, competition and customer demand. The mix and age of our rental fleet, as well as our cash flows, are impacted by sales of equipment from the rental fleet, which are influenced by used equipment pricing at the retail and secondary auction market levels, and the capital expenditures to acquire new rental fleet equipment. In making equipment acquisition decisions, we evaluate current economic and market conditions, competition, manufacturers’ availability, pricing and return on investment over the estimated useful life of the specific equipment, among other things. As a result of our in-house service capabilities and extensive maintenance program, we believe our rental fleet is well-maintained.

The original acquisition cost of our gross rental fleet increased by $41.0 million, or 6.0%, for the nine month period ended September 30, 2011, primarily in response to improved equipment time utilization from the increase in demand. The average age of our rental fleet equipment increased approximately 0.1 months for the nine months ended September 30, 2011.

Our average rental rates for the nine months ended September 30, 2011 were 4.9% higher than the comparative nine month period ended September 30, 2010. On a sequential basis, our average rental rates for the three month period ended September 30, 2011 increased 4.1% compared to the three month period ended June 30, 2011.

The rental equipment mix among our four core product lines for the nine months ended September 30, 2011 was largely consistent with that of the prior year comparable period as a percentage of total units available for rent and as a percentage of original acquisition cost.

Principal External Factors that Affect our Businesses

We are subject to a number of external factors that may adversely affect our businesses. These factors, and other factors, are discussed below and in Item 1A — “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2010:

	•		Economic downturns. The demand for our products is dependent on the general economy, the stability of the global credit markets, the industries in which our customers operate or serve, and other factors. Downturns in the general economy or in the construction and manufacturing industries, as well as adverse credit market conditions, can cause demand for our products to materially decrease. The recent macroeconomic downturn, including current conditions in the global credit markets, is a principal factor currently affecting our business.

	•		Spending levels by customers. Rentals and sales of equipment to the construction industry and to industrial companies constitute a significant portion of our total revenues. As a result, we depend upon customers in these businesses and their ability and willingness to make capital expenditures to rent or buy specialized equipment. Accordingly, our business is impacted by fluctuations in customers’ spending levels on capital expenditures and by the availability of credit to those customers.

	•		Adverse weather conditions. Adverse weather in a geographic region in which we operate may depress demand for equipment in that region. Our equipment is primarily used outdoors and, as a result, prolonged adverse weather conditions may prohibit our customers from continuing their work projects. Adverse weather also has a seasonal impact in parts of our Intermountain region, primarily in the winter months.

We believe that our integrated business tempers the effects of downturns in a particular segment. For a discussion of the impact of seasonality, see “Seasonality” below.

Results of Operations

The tables included in the period-to-period comparisons below provide summaries of our revenues and gross profits for our business segments and non-segmented revenues for the three and nine month periods ended September 30, 2011 and 2010. The period-to-period comparisons of our financial results are not necessarily indicative of future results.

During the years ended December 31, 2010 and 2009, our revenues and gross profits/margins were negatively impacted by lower customer demand resulting from several factors, including: (i) the decline in construction and industrial activities; (ii) the recent macroeconomic downturn; and (iii) unfavorable credit markets affecting end-user access to capital. Although our total gross profit margins have slowly trended downward since the year ended December 31, 2006, the rate of total gross profit margin decline was the most significant during the year ended December 31, 2009 and in the first quarter of 2010, as a result of the above factors. However, during the second, third and fourth quarters of 2010, as well the first three quarters of 2011, our operating segments generally realized either higher gross profit margins or improvements in the rate of gross profit margin decline on a year-over-year comparative quarterly basis. We cannot forecast with certainty whether these gross profit margin improvements during the recent quarters are indicative of a favorable trend in our business, nor can we forecast whether, or to what extent, we may experience any further declines, or whether our responses to ongoing or future unfavorable business conditions will be meaningful in mitigating or reversing the gross profit margin declines for the foreseeable future.

Further deterioration or a continuation of current levels in the non-residential construction industry and the industrial sectors we serve could result in declining revenues and gross profits/margins and may have a material adverse effect on our financial position, results of operations and cash flows in the future. During the recent economic downturn, we proactively responded to these unfavorable business factors through various operational and strategic measures, including closing underperforming branches and redeploying rental fleet assets to existing branches with higher demand or to branches in new markets where demand is higher; minimizing rental fleet capital expenditures; reducing headcount; implementing cost reduction measures throughout the Company; and using some of the excess cash flow resulting from our planned reduction in capital expenditures to repay outstanding debt. We believe that these measures strengthened our balance sheet by improving our cash position. We will continue to evaluate and respond to business conditions as appropriate. While we cannot predict the timing, duration or the impact of an economic recovery and/or improved conditions within the construction and industrial sectors, we believe that our efforts have positioned us to take advantage of future opportunities when a prolonged economic and business recovery occurs.

Three Months Ended September 30, 2011 Compared to the Three Months Ended September 30, 2010

Revenues.


					Total			Total
	Three Months Ended				Dollar			Percentage
	September 30,				Increase			Increase
	2011		2010		(Decrease)			(Decrease)
	(in thousands, except percentages)
Segment Revenues:
Equipment rentals	$	61,190	$	48,272	$	12,918			26.8	%
New equipment sales		46,543		47,697		(1,154	)		(2.4	)%
Used equipment sales		27,172		14,700		12,472			84.8	%
Parts sales		24,647		22,599		2,048			9.1	%
Services revenues		14,191		12,412		1,779			14.3	%
Non-Segmented revenues		10,546		8,164		2,382			29.2	%

Total revenues	$	184,289	$	153,844	$	30,445			19.8	%

Total Revenues. Our total revenues were $184.3 million for the three month period ended September 30, 2011 compared to $153.8 million for the same three month period in 2010, an increase of approximately $30.4 million, or 19.8%. Revenues for our reportable segments and non-segmented revenues are further discussed below.

Equipment Rental Revenues. Our revenues from equipment rentals for the three month period ended September 30, 2011

increased $12.9 million, or 26.8%, to $61.2 million from $48.3 million in the same three month period in 2010. Rental revenues from aerial work platforms and earthmoving equipment increased $8.4 million and $1.2 million, respectively, while rental revenues from cranes and other equipment increased $1.1 million and $1.9 million, respectively. Lift truck rental revenues increased $0.4 million. Our average rental rates for the three month period ended September 30, 2011 increased 8.9% compared to the same three month period in 2010. On a sequential basis, our average rental rates for the three month period ended September 30, 2011 increased 4.1% compared to the three month period ended June 30, 2011.

Rental equipment dollar utilization (annual rental revenues divided by the average original rental fleet equipment costs) for the three month period ended September 30, 2011 improved to approximately 33.7% compared to 29.2% for the same three month period in 2010, an increase of 4.5%. The increase in comparative rental equipment dollar utilization was the result of a 6.6% increase in rental equipment time utilization (equipment usage based on the number of rental equipment units available for rent), combined with an 8.9% increase in average rental rates in the comparative period. On a sequential basis, average rental rates for the three month period ended September 30, 2011 increased 4.1% compared to the prior three month period ended June 30, 2011. Rental equipment time utilization based on the number of rental equipment units available for rent was 68.9% for the three month period ended September 30, 2011 compared to 62.3% for the same three month period in 2010. Rental equipment time utilization as a percentage of original equipment cost was 71.8% for the three months ended September 30, 2011 compared to 65.9% for the same three month period in 2010, an increase of 5.9%.

New Equipment Sales Revenues. Our new equipment sales for the three month period ended September 30, 2011 decreased approximately $1.2 million, or 2.4%, to $46.5 million from approximately $47.7 million for the comparable period in 2010. Sales of new cranes decreased $0.5 million and sales of aerial work platform equipment decreased $1.4 million. Sales of new lift trucks decreased $0.3 million. These decreases were partially offset by an increase in new earthmoving equipment and other equipment of $0.4 million and $0.6 million, respectively.

Used Equipment Sales Revenues. Our used equipment sales increased $12.5 million, or 84.8%, to $27.2 million for the three month period ended September 30, 2011, from $14.7 million for the same three month period in 2010. Sales of used earthmoving equipment and used cranes increased $8.6 million and $1.8 million, respectively, while sales of used aerial work platform equipment increased $1.5 million. Sales of used lift trucks and other equipment each increased approximately $0.3 million.

Parts Sales Revenues. Our parts sales increased $2.0 million, or 9.1%, to $24.6 million for the three month period ended September 30, 2011 from $22.6 million for the same three month period in 2010. The increase in parts revenues was due to higher demand for parts compared to last year.

Services Revenues. Our services revenues for the three month period ended September 30, 2011 increased $1.8 million, or 14.3%, to $14.2 million from $12.4 million for the same three month period last year. The increase in service revenues was largely due to an increase in demand for services in conjunction with the improvements in our rental and sales businesses.

Non-Segmented Other Revenues. Our non-segmented other revenues consisted primarily of equipment support activities including transportation, hauling, parts freight and damage waiver charges. For the three month period ended September 30, 2011, our other revenues were approximately $10.5 million, an increase of $2.4 million, or 29.2%, from $8.2 million in the same three month period in 2010. The increase was primarily due to an increase in the volume of these services in conjunction with the related improvements of our primary business activities.

Gross Profit.


							Total		Total
	Three Months Ended						Dollar		Percentage
	September 30,						Change		Change
	2011			2010			Increase		Increase
	(in thousands, except percentages)
Segment Gross Profit (Loss):
Equipment rentals	$	26,938		$	18,092		$	8,846		48.9	%
New equipment sales		5,420			4,718			702		14.9	%
Used equipment sales		6,348			3,617			2,731		75.5	%
Parts sales		6,574			5,889			685		11.6	%
Services revenues		8,740			7,235			1,505		20.8	%
Non-Segmented revenues		(279	)		(1,631	)		1,352		82.9	%

Total gross profit	$	53,741		$	37,920		$	15,821		41.7	%

Total Gross Profit. Our total gross profit was $53.7 million for the three month period ended September 30, 2011 compared to $37.9 million for the same three month period in 2010, an increase of $15.8 million, or 41.7%. Total gross profit margin for the three month period ended September 30, 2011 was 29.2%, an increase of 4.6% from the 24.6% gross profit margin for the same three month period in 2010. Gross profit (loss) and gross margin for all reportable segments are further described below:

Equipment Rentals Gross Profit. Our gross profit from equipment rentals for the three month period ended September 30, 2011 increased $8.8 million, or 48.9%, to $26.9 million from $18.1 million in the same three month period in 2010. The increase in equipment rentals gross profit was the net result of a $12.9 million increase in rental revenues for the three month period ended September 30, 2011, which was partially offset by a $1.6 million net increase in rental expenses and an approximately $2.5 million increase in rental equipment depreciation expense. The increase in rental expenses and rental equipment depreciation expense was primarily due to a larger fleet size in 2011 compared to 2010. As a percentage of equipment rental revenues, rental expenses were 19.9% for the three month period ended September 30, 2011 compared to 21.9% for the same three month period in 2010 and depreciation expense was 36.1% for the three month period ended September 30, 2011 compared to 40.7% for the same three month period in 2010.

Gross profit margin for the three month period ended September 30, 2011 was approximately 44.0%, up 6.5% from 37.5% in the same three month period in 2010. This gross profit margin improvement was primarily due to the increase in comparative rental revenues resulting from improved utilization and higher average rental rates, combined with the decreases in depreciation expenses and rental expenses as a percentage of equipment rental revenues for the three month period ended September 30, 2011 compared to the same period last year.

New Equipment Sales Gross Profit. Our new equipment sales gross profit for the three month period ended September 30, 2011 increased $0.7 million, or 14.9%, to $5.4 million compared to $4.7 million for the same three month period in 2010 on a total new equipment sales decrease of $1.2 million. Gross profit margin on new equipment sales for the three month period ended September 30, 2011 was 11.6%, an increase of approximately 1.7% from 9.9% in the same three month period in 2010, reflecting primarily improved margins on new crane sales in the current year period.

Used Equipment Sales Gross Profit. Our used equipment sales gross profit for the three month period ended September 30, 2011 increased $2.7 million, or 75.5%, to $6.3 million from $3.6 million for the same three month period in 2010 on a used equipment sales increase of $12.5 million. Gross profit margin for the three month period ended September 30, 2011 was 23.4%, down 1.2% from 24.6% in the same three month period in 2010, primarily as a result of the mix of used equipment sold. Our used equipment sales from the rental fleet, which comprised approximately 76.0% and 79.5% of our used equipment sales for the three month periods ended September 30, 2011 and 2010, respectively, were approximately 140.1% of net book value for the three month period ended September 30, 2011 compared to 140.6% for the same three month period in 2010.

Parts Sales Gross Profit. For the three month period ended September 30, 2011, our parts sales revenue gross profit increased approximately $0.7 million, or 11.6%, to $6.6 million from $5.9 million for the same three month period in 2010 on a $2.0 million increase in parts sales revenues. Gross profit margin for the three month period ended September 30, 2011 was 26.7%, an increase of 0.6% from 26.1% in the same three month period in 2010, as a result of the mix of parts sold.

Services Revenues Gross Profit. For the three month period ended September 30, 2011, our services revenues gross profit increased $1.5 million, or 20.8%, to $8.7 million from $7.2 million for the same three month period in 2010. Gross profit margin for the three month period ended September 30, 2011 was 61.6%, up 3.3% from 58.3% in the same three month period in 2010 as a result of service revenues mix.

Non-Segmented Other Revenues Gross Loss. Our non-segmented other revenues realized a gross loss of $0.3 million for the three month period ended September 30, 2011 compared to a gross loss of $1.6 million for the same three month period in 2010. On a gross margin basis, the margin of gross loss improved to a gross loss margin of 2.6% from 20.0%, primarily reflective of the $2.4 million improvement is non-segmented other revenues.

Selling, General and Administrative Expenses. SG&A expenses increased approximately $2.4 million, or 6.7%, to $39.0 million for the three month period ended September 30, 2011 compared to $36.6 million for the same three month period in 2010. The net increase in SG&A expenses was attributable to several factors. Employee salaries and wages and related employee expenses increased $1.9 million as a result of higher salaries, wages and payroll taxes primarily from an increase from commission and incentive pay that resulted from higher rental and sales revenues. Stock-based compensation expense was $0.3 million each of the three month periods ended September 30, 2011 and 2010. Other outside services costs increased $0.6 million. As a percent of total revenues, SG&A expenses were 21.2% for the three months ended September 30, 2011, a decrease of 2.6% from 23.8% for the same three month

period in 2010, primarily as a result of the current year increase in total revenues.

Other Income (Expense). For the three month period ended September 30, 2011, our net other expenses decreased $0.2 million to $7.1 million compared to $7.3 million for the same three month period in 2010. Interest expense was $7.2 million for the three month period ended September 30, 2011 compared to $7.3 million for the same period in 2010. Miscellaneous other income increased $0.1 million compared to the three month period ended September 30, 2010.

Income Taxes. We recorded income tax expense of $3.1 million for the three month period ended September 30, 2011 compared to an income tax benefit of $2.0 million for the three month period ended September 30, 2010. Our effective income tax rate for the three month period ended September 30, 2011 was 39.1% compared to 35.1% for the same three month period in 2010. The increase in our effective tax rate was primarily the result of an increase to unrecognized tax benefits. The amount of unrecognized tax benefits increased by $0.1 million from $6.5 million to $6.6 million during the three month period ended September 30, 2011. Based on available evidence, both positive and negative, we believe it is more likely than not that our deferred tax assets at September 30, 2011 are fully realizable through future reversals of existing taxable temporary differences and future taxable income, and are not subject to any limitations.

Nine Months Ended September 30, 2011 Compared to the Nine Months Ended September 30, 2010

Revenues.


	Nine Months Ended				Total		Total
	September 30,				Dollar		Percentage
	2011		2010		Increase		Increase
	(in thousands, except percentages)
Segment Revenues:
Equipment rentals	$	165,440	$	126,400	$	39,040		30.9	%
New equipment sales		133,629		103,952		29,677		28.5	%
Used equipment sales		65,655		46,062		19,593		42.5	%
Parts sales		71,166		65,013		6,153		9.5	%
Services revenues		40,072		36,466		3,606		9.9	%
Non-Segmented revenues		27,570		21,643		5,927		27.4	%

Total revenues	$	503,532	$	399,536	$	103,996		26.0	%

Total Revenues. Our total revenues were $503.5 million for the nine month period ended September 30, 2011 compared to $399.5 million for the same nine month period in 2010, an increase of $104.0 million, or 26.0%. Revenues for all reportable segments and non-segmented revenues increased and are further discussed below.

Equipment Rental Revenues. Our revenues from equipment rentals for the nine month period ended September 30, 2011 increased $39.0 million, or 30.9%, to $165.4 million from $126.4 million in the same nine month period in 2010. Rental revenues from aerial work platforms and earthmoving equipment increased $24.5 million and $5.8 million, respectively, while rental revenues from cranes and other equipment increased $3.4 million and $4.1 million, respectively. Lift truck rental revenues increased $1.2 million. Our average rental rates for the nine month period ended September 30, 2011 increased 4.9% compared to the same nine month period in 2010.

Rental equipment dollar utilization (annual rental revenues divided by the average original rental fleet equipment costs) for the nine month period ended September 30, 2011 improved to 30.9% compared to 25.5% for the same nine month period in 2010, an increase of 5.4%. The increase in comparative rental equipment dollar utilization was the net result of a 10.1% increase in rental equipment time utilization (equipment usage based on the number of rental equipment units available for rent), combined with a 4.9% increase in average rental rates in the comparative period. Rental equipment time utilization based on the number of rental equipment units available for rent was 65.7% for the nine month period ended September 30, 2011 compared to 55.6% for the same nine month period in 2010. Rental equipment time utilization as a percentage of original equipment cost was 68.9% for the nine months ended September 30, 2011 compared to 58.4% for the same nine month period in 2010, an increase of 10.5%.

New Equipment Sales Revenues. Our new equipment sales for the nine month period ended September 30, 2011 increased $29.7 million, or 28.5%, to $133.6 million from approximately $104.0 million for the comparable period in 2010. Sales of new cranes and earthmoving equipment increased $14.3 million and $14.6 million, respectively, while sales of new other equipment increased $2.7 million. These increases were partially offset by a decrease in new aerial work platform equipment and new lift truck sales of $0.8 million and $1.2 million, respectively.

Used Equipment Sales Revenues. Our used equipment sales increased $19.6 million, or 42.5%, to $65.7 million for the nine month period ended September 30, 2011, from $46.1 million for the same nine month period in 2010. Sales of used earthmoving equipment and aerial work platform equipment increased $12.9 million and $3.9 million, respectively. Used crane sales increased $2.8 million and used lift truck sales increased $0.2 million. Used other equipment sales decreased $0.2 million.

Parts Sales Revenues. Our parts sales increased approximately $6.2 million, or 9.5%, to $71.2 million for the nine month period ended September 30, 2011 from $65.0 million for the same nine month period in 2010. The increase in parts revenues was due to higher demand for parts compared to last year.

Services Revenues. Our services revenues for the nine month period ended September 30, 2011 increased $3.6 million, or 9.9%, to $40.1 million from approximately $36.5 million for the same nine month period last year. The increase in service revenues was largely due to an increase in demand for services in conjunction with the improvements in our rental and sales businesses.

Non-Segmented Other Revenues. Our non-segmented other revenues consisted primarily of equipment support activities including transportation, hauling, parts freight and damage waiver charges. For the nine month period ended September 30, 2011, our other revenues were $27.6 million, an increase of $5.9 million, or 27.4%, from $21.6 million in the same nine month period in 2010. The increase was primarily due to an increase in the volume of these services in conjunction with the related improvements of our primary business activities.

Gross Profit.


	Nine Months Ended						Total Dollar		Total Percentage
	September 30,						Change		Change
	2011			2010			Increase		Increase
	(in thousands, except percentages)
Segment Gross Profit (Loss):
Equipment rentals	$	66,810		$	38,969		$	27,841		71.4	%
New equipment sales		15,358			9,960			5,398		54.2	%
Used equipment sales		15,211			10,372			4,839		46.7	%
Parts sales		18,992			17,209			1,783		10.4	%
Services revenues		24,573			22,661			1,912		8.4	%
Non-Segmented revenues		(4,292	)		(4,987	)		695		13.9	%

Total gross profit	$	136,652		$	94,184		$	42,468		45.1	%

Total Gross Profit. Our total gross profit was $136.7 million for the nine month period ended September 30, 2011 compared to $94.2 million for the same nine month period in 2010, an increase of $42.5 million, or 45.1%. Total gross profit margin for the nine month period ended September 30, 2011 was 27.1%, an increase of 3.5% from the 23.6% gross profit margin for the same nine month period in 2010. Gross profit (loss) and gross margin for all reportable segments are further described below:

Equipment Rentals Gross Profit. Our gross profit from equipment rentals for the nine month period ended September 30, 2011 increased $27.8 million, or 71.4%, to $66.8 million from $39.0 million in the same nine month period in 2010. The increase in equipment rentals gross profit was the net result of a $39.0 million increase in rental revenues for the nine month period ended September 30, 2011, which was partially offset by a $5.3 million net increase in rental expenses and a $5.9 million increase in rental equipment depreciation expense. The increase in rental expenses and rental equipment depreciation expense was primarily due to a larger fleet size in 2011 compared to 2010. As a percentage of equipment rental revenues, rental expenses were 20.8% for the nine month period ended September 30, 2011 compared to 23.1% for the same nine month period in 2010 and depreciation expense was approximately 38.8% for the nine month period ended September 30, 2011 compared to 46.1% for the same nine month period in 2010. These percentage decreases were primarily attributable to the increase in comparative rental revenues.

Gross profit margin for the nine month period ended September 30, 2011 was 40.4%, up 9.5% from 30.9% in the same nine month period in 2010. This gross profit margin improvement was primarily due to the increase in comparative rental revenues resulting from improved utilization and higher average rental rates, combined with the decreases in depreciation and rental expenses as a percentage of equipment rental revenues for the nine months ended September 30, 2011 compared to the same period last year.

New Equipment Sales Gross Profit. Our new equipment sales gross profit for the nine month period ended September 30, 2011 increased $5.4 million, or 54.2%, to $15.4 million compared to $10.0 million for the same nine month period in 2010 on a total new

equipment sales increase of $29.7 million. Gross profit margin on new equipment sales for the nine month period ended September 30, 2011 was 11.5%, an increase of 2.0% from 9.5% in the same nine month period in 2010, primarily reflecting improved margins on new crane sales in the current year period.

Used Equipment Sales Gross Profit. Our used equipment sales gross profit for the nine month period ended September 30, 2011 increased $4.8 million, or 46.7%, to $15.2 million from approximately $10.4 million for the same nine month period in 2010 on a used equipment sales increase of $19.6 million. Gross profit margin for the nine month period ended September 30, 2011 was 23.2%, up 0.6% from 22.6% in the same nine month period in 2010. Our used equipment sales from the rental fleet, which comprised approximately 72.4% and 75.3% of our used equipment sales for the nine month periods ended September 30, 2011 and 2010, respectively, were approximately 142.2% of net book value for the nine month period ended September 30, 2011 compared to 136.8% for the same nine month period in 2010.

Parts Sales Gross Profit. For the nine month period ended September 30, 2011, our parts sales revenue gross profit increased $1.8 million, or 10.4%, to $19.0 million from $17.2 million for the same nine month period in 2010 on a $6.2 million increase in parts sales revenues. Gross profit margin was 26.7% for both nine month periods ended September 30, 2011 and 2010.

Services Revenues Gross Profit. For the nine month period ended September 30, 2011, our services revenues gross profit increased $1.9 million, or 8.4%, to $24.6 million from $22.7 million for the same nine month period in 2010 on a $3.6 million increase in services revenues. Gross profit margin for the nine month period ended September 30, 2011 was 61.3%, down approximately 0.9% from 62.2% in the same nine month period in 2010 primarily as a result of service revenues mix.

Non-Segmented Other Revenues Gross Loss. Our non-segmented other revenues realized a gross loss of approximately $4.3 million for the nine month period ended September 30, 2011 compared to a gross loss of $5.0 million for the same nine month period in 2010. On a gross margin basis, the margin of gross loss improved to a gross loss margin of 15.6% from 23.0%, primarily reflective of the $5.9 million improvement is non-segmented other revenues.

Selling, General and Administrative Expenses. SG&A expenses increased approximately $5.5 million, or 5.0%, to $114.7 million for the nine month period ended September 30, 2011 compared to $109.2 million for the same nine month period in 2010. The net increase in SG&A expenses was attributable to several factors. Employee salaries and wages and related employee expenses increased $5.2 million as a result higher salaries, wages and payroll taxes from increased employee headcount combined with increased commission and incentive pay that resulted from higher rental and sales revenues, which was partially offset by lower health insurance and workers compensation costs as a result of favorable claims experience in the nine month period ended September 30, 2011 compared to the same prior year period. Stock-based compensation expense was $1.0 million and $0.7 million for the nine month periods ended September 30, 2011 and 2010, respectively. Other outside services costs increased $0.8 million. Fuel and utility costs increased $0.6 million and marketing related costs increased $0.8 million. These increases were partially offset by a $1.2 million decrease in professional fees resulting primarily from data conversion costs and other consulting fees incurred last year related to our enterprise resource planning system implementation. General liability insurance costs decreased $0.4 million. As a percent of total revenues, SG&A expenses were 22.8% for the nine months ended September 30, 2011, a decrease of 4.5% from 27.3% for the same nine month period in 2010, primarily as a result of the nine month period ended September 30, 2011 increase in total revenues compared to the same period last year.

Other Income (Expense). For the nine month period ended September 30, 2011, our net other expenses decreased approximately $0.6 million to $21.0 million compared to $21.6 million for the same nine month period in 2010. The decrease was the result of a $0.2 million decrease in interest expense to $21.6 million for the nine month period ended September 30, 2011 compared to $21.8 million for the same nine month period in 2010. Miscellaneous other income increased approximately $0.5 million compared to the nine month period ended September 30, 2010.

Income Taxes. We recorded income tax expense of $0.4 million for the nine month period ended September 30, 2011 compared to an income tax benefit of approximately $13.4 million for the nine month period ended September 30, 2010. Our effective income tax rate for the nine month period ended September 30, 2011 was 29.6% compared to 36.8% for the same nine month period in 2010. The decrease in our effective tax rate was primarily the result of a favorable increase in permanent differences related to tax deductible goodwill. The amount of unrecognized tax benefits increased by $0.1 million from $6.5 million to $6.6 million for the nine month period ended September 30, 2011. Based on available evidence, both positive and negative, we believe it is more likely than not that our deferred tax assets at September 30, 2011 are fully realizable through future reversals of existing taxable temporary differences and future taxable income, and are not subject to any limitations.

Liquidity and Capital Resources

Cash flow from operating activities. For the nine month period ended September 30, 2011, our cash provided by our operating activities was $16.9 million. Our reported net income of $1.1 million, which, when adjusted for non-cash income and expense items, such as depreciation and amortization, deferred income taxes, provision for losses on accounts receivable, stock-based compensation expense and net gains on the sale of long-lived assets, provided positive cash flows of $64.7 million. These cash flows from operating activities were also positively impacted by a $3.2 million decrease in prepaid expenses and other assets and a $1.6 million decrease in accounts payable. Offsetting these positive cash flows were an increase of $33.0 million in net inventories, a $12.1 million decrease in manufacturing flooring plans payable, a $4.7 million decrease in accrued expenses payable and other liabilities and a $2.8 million decrease in net receivables.

For the nine month period ended September 30, 2010, our cash provided by our operating activities was exceeded by our cash used in our operating activities, resulting in net cash used in our operating activities of $14.0 million. Our reported net loss of approximately $23.0 million, which, when adjusted for non-cash income and expense items, such as depreciation and amortization, deferred income taxes, provision for losses on accounts receivable, stock-based compensation expense and net gains on the sale of long-lived assets, provided positive cash flows of approximately $29.0 million. These cash flows from operating activities were also positively impacted by an increase of $33.1 million in accounts payable. Offsetting these positive cash flows were a $17.4 million decrease in manufacturing flooring plans payable, an $28.4 million increase net accounts receivable, a $24.1 million increase in net inventories, a $2.2 million increase in prepaid expenses and other assets and a $4.0 million decrease in accrued expenses payable and other liabilities.

Cash flow from investing activities. For the nine months ended September 30, 2011, cash provided by our investing activities was exceeded by our cash used in our investing activities, resulting in net cash used in our investing activities of approximately $54.3 million. This was a result of purchases of rental and non-rental equipment totaling $102.6 million, which was partially offset by proceeds from the sale of rental and non-rental equipment of approximately $48.3 million.

For the nine month period ended September 30, 2010, our cash provided by our investing activities was exceeded by our cash used in our investing activities, resulting in net cash used in our investing activities of approximately $0.1 million. This was a net result of purchases of rental and non-rental equipment of $35.2 million and proceeds from the sales of rental and non-rental equipment totaling $35.1 million.

Cash flow from financing activities. For the nine month period ended September 30, 2011, cash provided by our financing activities was approximately $13.2 million, which included net borrowings under our senior secured credit facility of $13.6 million. We purchased approximately $0.6 million of treasury stock for the nine month period ended September 30, 2011 and recognized $0.2 million of excess tax benefits associated with stock-based awards. Payments on capital lease obligations for the nine months ended September 30, 2011 were $0.1 million.

For the nine month period ended September 30, 2010, cash used in our financing activities was approximately $4.4 million, representing payments of our notes payable and capital lease obligation and purchases of treasury stock of $1.2 million, $0.1 million and $0.2 million, respectively, and transactions costs of $2.9 million associated with our amended and restated senior secured credit.

Senior Secured Credit Facility

We and our subsidiaries are parties to a $320.0 million senior secured credit facility with General Electric Capital Corporation as administrative agent, and the lenders named therein. The credit facility matures on July 29, 2015. The revolving loans under the credit facility bear interest, at our option, either at (i) the index rate plus an applicable margin ranging from 1.50% to 2.25% depending on our leverage ratio or (ii) the LIBOR rate plus an applicable margin of 2.50% to 3.25% depending on our leverage ratio. The unused commitment fee under the senior secured credit facility is 0.50%.

Our senior secured credit facility requires us to maintain a minimum fixed charge coverage ratio in the event that our excess borrowing availability is below $40.0 million (as adjusted if the incremental facility is exercised). The credit facility also requires us to maintain a maximum total leverage ratio of 5.0 to 1.0, which is tested if excess availability is less than $40 million (as adjusted if the incremental facility is exercised). As of September 30, 2011, we were in compliance with our financial covenants under the senior secured credit facility.

At September 30, 2011, the interest rate on the senior secured credit facility was based on a 3.25% U.S. Prime Rate plus 175 basis points, or 5.0%. At October 31, 2011, we had $291.6 million of available borrowings under our senior secured credit facility, net of $7.0 million of outstanding letters of credit.

Senior Unsecured Notes

We currently have outstanding $250.0 million aggregate principal amount of 8 3/8% senior unsecured notes due 2016. The senior unsecured notes are guaranteed, jointly and severally, on an unsecured senior basis by all of our existing and future domestic restricted subsidiaries.

We may redeem the senior unsecured notes at specified redemption prices plus accrued and unpaid interest and additional interest. In addition, if we experience a change of control, we will be required to make an offer to repurchase the senior unsecured notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest and additional interest.

The indenture governing our senior secured notes contains certain covenants that, among other things, limit our ability and the ability of our restricted subsidiaries to: (i) incur additional indebtedness, assume a guarantee or issue preferred stock; (ii) pay dividends or make other equity distributions or payments to or affecting our subsidiaries; (iii) purchase or redeem our capital stock; (iv) make certain investments; (v) create liens; (vi) sell or dispose of assets or engage in mergers or consolidation; (vii) engage in certain transactions with subsidiaries or affiliates; (viii) enter into sale leaseback transactions with subsidiaries or affiliates; (viii) enter into sale leaseback transactions; and (ix) engage in certain business activities. Each of the covenants is subject to exceptions and qualifications.

Cash Requirements Related to Operations

Our principal sources of liquidity have been from cash provided by operating activities and the sales of new, used and rental fleet equipment, proceeds from the issuance of debt, and borrowings available under our senior secured credit facility. Our principal uses of cash have been to fund operating activities and working capital, purchases of rental fleet equipment and property and equipment, fund payments due under facility operating leases and manufacturer flooring plans payable, and to meet debt service requirements. In the future, we may pursue additional strategic acquisitions. In addition, we may use cash from working capital and/or borrowings under our senior secured credit facility should we repurchase Company securities. We anticipate that the above described uses will 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. Our gross rental fleet capital expenditures for the nine month period ended September 30, 2011 were approximately $118.4 million, including approximately $27.7 million of non-cash transfers from new and used equipment to rental fleet inventory. Our gross property and equipment capital expenditures for the nine month period ended September 30, 2011 were approximately $12.0 million. 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.

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 unsecured notes, the senior secured credit facility and our other indebtedness), will depend upon our future operating performance and the availability of borrowings under our senior secured credit facility and/or other debt and equity financing alternatives available to us, which will be affected by prevailing economic conditions and conditions in the global credit and capital markets, as well as financial, business and other factors, some of which are beyond our control. Based on our current level of operations and given the current state of the capital markets, we believe our cash flow from operations, available cash and available borrowings under our senior secured credit facility will be adequate to meet our future liquidity needs for the foreseeable future. As of October 31, 2011, we had $291.6 million of available borrowings under our senior secured credit facility, net of $7.0 million of outstanding letters of credit.

We cannot provide absolute assurance that our future cash flow from operating activities will be sufficient to meet our long-term obligations and commitments. If we are unable to generate sufficient cash flow from operating activities 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. Given current economic and market conditions, including the significant disruptions in the global capital markets, we cannot assure investors 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 debt agreements, including the indenture governing our senior unsecured notes, and our senior secured credit facility, as well as any future debt agreements, contain or may contain restrictive covenants, which may prohibit 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 debt.

Seasonality

Although we believe our business is not materially impacted by seasonality, the demand for our rental equipment tends to be lower in the winter months. The level of equipment rental activities are directly related to commercial and industrial construction and maintenance activities. Therefore, equipment rental performance 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 some seasonality with the peak selling period during the spring season and extending through the summer. Typically, parts and service activities are less affected by changes in demand caused by seasonality.

Contractual and Commercial Commitments

There have been no material changes from the information included in our Annual Report on Form 10-K for the year ended December 31, 2010.

Off-Balance Sheet Arrangements

There have been no material changes from the information included in our Annual Report on Form 10-K for the year ended December 31, 2010.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our earnings may be affected by changes in interest rates since interest expense on our senior secured credit facility is currently calculated based upon the index rate plus an applicable margin of 1.50% to 2.25%, depending on the leverage ratio, in the case of index rate revolving loans and LIBOR plus an applicable margin of 2.50% to 3.25%, depending on the leverage ratio, in the case of LIBOR revolving loans. At September 30, 2011, we had total borrowings under our senior secured credit facility of $13.6 million. A 1.0% increase in the interest rate on the senior secured credit facility would result in approximately a $0.1 million increase in interest expense on an annualized basis. At October 31, 2011, we had $291.6 million of available borrowings under our senior secured credit facility, net of $7.0 million of outstanding letters of credit. We did not have significant exposure to changing interest rates as of September 30, 2011 on our fixed-rate senior unsecured notes or on our other notes payable. Historically, we have not engaged in derivatives or other financial instruments for trading, speculative or hedging purposes, though we may do so from time to time if such instruments are available to us on acceptable terms and prevailing market conditions are accommodating.

Item 4. Controls and Procedures

Management’s Quarterly Evaluation of Disclosure Controls and Procedures

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

Our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively) have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15e and 15d-15e promulgated under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our principal executive officer and principal financial officer have concluded that, as of September 30, 2011, our current disclosure controls and procedures were effective.

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

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting that occurred during the quarter ended September 30, 2011 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

We are party to various litigation matters, in most cases involving normal ordinary course and routine claims incidental to our business. We cannot estimate with certainty our ultimate legal and financial liability with respect to such pending matters. However, we believe, based on our examination of such pending matters, that our ultimate liability for such matters will not have a material adverse effect on our business, financial condition and/or operating results.

Item 1A. Risk Factors.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, Item 1A — “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2010, which could materially affect our business, financial condition or future results.

As of the date of this Quarterly Report on Form 10-Q, there have been no material changes with respect to the Company’s risk factors previously disclosed on Form 10-K for the year ended December 31, 2010.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Purchases of Equity Securities

On June 30, 2011, 25,682 shares of non-vested stock that were issued in 2008 vested at $13.99 per share. On July 12, 2011, holders of those vested shares returned 5,290 shares of common stock to the Company as payment for their respective employee withholding taxes. This resulted in an addition of 5,290 shares to Treasury Stock.

Item 3. Defaults upon Senior Securities.

None.

Item 4. (Removed and Reserved).

Item 5. Other Information.

None.

Item 6. Exhibits.


10.1 *		Form of Restricted Stock Award Agreement for Officers of H&E Equipment Services, Inc.

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.

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

101.INS**		XBRL Instance Document

101.SCH**		XBRL Taxonomy Extension Schema Document

101.CAL**		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB**		XBRL Taxonomy Extension Label Linkbase Document

101.PRE**		XBRL Taxonomy Extension Presentation Linkbase Document


*		- Filed herewith.

**		- Furnished herewith.

SIGNATURES

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


	H&E EQUIPMENT SERVICES, INC.
Dated: November 3, 2011	By:	/s/ John M. Engquist
		John M. Engquist
		President and Chief Executive Officer (Principal Executive Officer)


Dated: November 3, 2011	By:	/s/ Leslie S. Magee
		Leslie S. Magee
		Chief Financial Officer and Secretary (Principal Financial and Accounting Officer)

EXHIBIT INDEX


10.1*		Form of Restricted Stock Award Agreement for Officers of H&E Equipment Services, Inc.

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

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

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

101.INS**		XBRL Instance Document

101.SCH**		XBRL Taxonomy Extension Schema Document

101.CAL**		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB**		XBRL Taxonomy Extension Label Linkbase Document

101.PRE**		XBRL Taxonomy Extension Presentation Linkbase Document


*		- Filed herewith.

**		- Furnished herewith.

exv10w1

Exhibit 10.1

FORM OF RESTRICTED STOCK AWARD AGREEMENT

PERSONAL AND CONFIDENTIAL

[Date]

[ ]
[ ]
[ ]

We are pleased to inform you that on [ ] (the “Grant Date”), pursuant to the H&E Equipment Services, Inc. Amended and Restated 2006 Stock-Based Incentive Compensation Plan (as the same may be amended from time to time, the “Plan”), the Committee granted you [ ] shares of the Company’s common stock, par value $0.01, (hereinafter either the “Restricted Stock” or “Award”) subject to the restrictions set forth below. You should be aware that any award granted to you under the Plan is a form of compensation to you and is considered personal and confidential information. The purpose of the Plan is to attract and retain valued employees by offering them a greater stake in the Company’s success and a closer identity with it, and to encourage ownership of the Company’s Stock by such employees. You should be aware that participation of all employees in the Plan is not the purpose of the Plan.

This Award is subject to the applicable terms and conditions of the Plan, which are incorporated herein by reference, and in the event of any contradiction, distinction or difference between this letter and the terms of the Plan, the terms of the Plan will control. Unless otherwise stated, all capitalized terms used herein have the meanings set forth in the Plan. By accepting this Award you (i) acknowledge that you have received and read a copy of the Plan and understand its terms and (ii) acknowledge that with respect to this Award and the Restricted Stock, you are bound by the terms of the Plan.

Subject to your continued employment with the Company the restrictions applicable to your Restricted Stock will lapse in accordance with the following schedule:

[ ] shares will vest on the first anniversary of the Grant Date;

[ ] shares will vest on the second anniversary of the Grant Date; and

[ ] shares will vest on the third anniversary of the Grant Date.

Should your employment with the Company terminate for any reason before any portion of your Award vests, then that portion of your Award shall be forfeited with no further compensation due to you. Finally, if you are terminated by the Company for Cause, your entire Award, regardless of whether any or all of the shares of Restricted Stock that relate to such Award are vested, shall be forfeited with no further compensation due to you.

In the event that during your service with the Company, a Change in Control, as defined in the Plan, occurs, your Award will vest in full.

You will either receive certificate(s) for the shares of Restricted Stock granted to you, which the Company will retain until such shares vest, or such shares will be issued to you in book-entry form in an account with the Company’s transfer agent. In either case, you will be designated as the registered owner of the Restricted Stock granted to you under this Award. You also agree to deliver an original, signed and undated stock power (in the form attached hereto as Exhibit A to the Company or the Company’s designee authorizing the Committee to transfer title to the certificate(s) representing any shares of Restricted Stock that are forfeited under the terms of the Plan and this Award to the Company in the event that your employment with the Company should terminate for any reason prior to the lapse of the restrictions or if your service with the Company is terminated by the Company for Cause at any time.

As described more fully in the attached description of the consequences of making or not making an election pursuant to Section 83(b) of the Code (Exhibit B), your acceptance of this Award will not typically constitute a taxable event. Instead, you will recognize taxable income upon each vesting date described in the schedule above and will recognize capital gain or loss upon your ultimate disposition or forfeiture of the shares.

You may, however, make an election pursuant to Section 83(b) of the Code within 30 days of your receipt of this Award to include in your current year taxable income the grant date Fair Market Value of the Restricted Stock. In such case, you would not recognize taxable income upon each vesting date and would recognize capital gain or loss only upon your ultimate disposition or forfeiture of the shares.

You must make appropriate arrangements with the Company to provide for the withholding of the taxes that will be due with respect to this Award as it vests (or upon grant if you make an election pursuant to Section 83(b) of the Code). As defined in the Plan, the Company shall, at the election of the Participant, have the right to retain the number of shares of Company Stock whose Fair Market Value equals the amount legally required to be withheld in satisfaction of the applicable withholding taxes. As promptly thereafter as possible, the Company will release to you the vested shares of Restricted Stock, whether in book-entry form in a non-restricted account with the Company’s transfer agent or if such certificates were previously issued in your name and held by the Company, the Company will deliver to you certificates for your vested shares of Restricted Stock.

You should also be aware that any transfer of this Restricted Stock is subject to the Company’s Insider Trading Policy which has previously been provided to you and is posted on the Company’s intranet.

The construction and interpretation of any provision of this Award or the Plan shall be final and conclusive when made by the Committee.

Nothing in this letter shall confer on you the right to continue in the service of the Company or interfere in any way with the right of the Company to terminate your service at any time.

You should sign and return a copy of this agreement to the Chief Financial Officer indicating your agreement to the terms of this letter and the Award granted hereby. This acknowledgement must be returned within fifteen (15) days; otherwise, the Award will lapse and become null and void. Your signature will also acknowledge that this letter reflects our final agreement regarding the Award granted hereunder and supersedes any prior written or oral agreement, understanding or communication otherwise regarding your Award and that you have received and reviewed the Plan and that you agree to abide by the applicable terms of these documents as provided herein.


Very truly yours,



Enclosures
	The undersigned hereby agrees to the foregoing:



	[ ]	Date

Exhibit A

STOCK POWER

For Value Received, [ ] hereby sells, assigns and transfers unto H&E Equipment Services, Inc. ______________ Shares of Restricted Stock of H&E Equipment Services, Inc. (the “Company”) standing in his name on the books of said corporation, represented either in book-entry form in an account with the Company’s transfer agent or in certificated form as Certificate No. herewith, and does hereby irrevocably constitute and appoint the Company to transfer the said stock on the books of the within named corporation with full power of substitution in the premises.


By:
	[ ]

Dated:


In the presence of:		______________________(Signature of Witness)

		______________________(Printed Name of Witness)

Exhibit B

Explanation of Election under Section 83(b) of the Code

If you are awarded Restricted Stock of the Company, you may make an election (an “83(b) Election”) under Section 83(b) of the Internal Revenue Code. An Election Form and a Waiver Form have been supplied to you with your Award letter. YOU MUST COMPLETE EITHER THE ELECTION FORM (EXHIBIT D) OR THE WAIVER FORM (EXHIBIT C) NOTIFYING THE COMPANY OF AN 83(b) ELECTION OR DECLINE OF AN 83(b) ELECTION AND RETURN TO LESLIE MAGEE, CHIEF FINANICAL OFFICER, BY FAX AT (225) 298-5382 OR YOU MAY SCAN AND RETURN BY EMAIL TO KCOCHRAN@HE-EQUIPMENT.COM. To help you understand the effect of a Section 83(b) Election, a brief description of the tax consequences of Section 83 of the Code follows.

Overview of Section 83 of the Code

Section 83 of the Code applies to “restricted property” transferred in connection with the performance of services. Section 83 applies to Restricted Stock you acquire under the Company’s Amended and Restated 2006 Stock-Based Incentive Compensation Plan. If you acquire Restricted Stock and do not make the election described below, Section 83 may cause several taxable events to occur while you own restricted property:

	-		There is generally no tax imposed on the transfer of restricted property from an employer to an employee, nor is there any tax if restricted property is sold by an employer to an employee for its then fair market value. Absent an 83(b) Election, you would have no immediate taxable event upon your Award of Restricted Stock.

	-		Absent an 83(b) Election, upon the lapse of the restrictions to which the Restricted Stock is subject, the difference between the amount you originally paid for your stock, if any, and its then fair market value, is subject to tax at ordinary income tax rates.

	-		Finally, the holding period for determining the tax treatment on a sale of your Restricted Stock is determined by reference to the date on which the restrictions lapsed, not the date of purchase. Accordingly, without an 83(b) Election, you would be taxed at unfavorable short-term capital gain rates upon a sale of a portion of your Restricted Stock unless you had held that stock for at least one year following its vesting date.

Section 83(b) Election

As an alternative to the rules above, Section 83(b) provides that you may elect, within 30 days of the receipt of restricted property, to include the fair market value of the property (determined without regard to the restrictions), less the price you paid for it, if any, in your gross income for the taxable year in which you acquired the property. The advantage of making an 83(b) Election in this situation is that any subsequent increase in value will be taxed only when you dispose of your shares, and then will be taxed at favorable long term capital gains rates (assuming you have held the stock for at least one year following its grant date).

The taxable ordinary income upon an 83(b) Election will be the fair market value of the Restricted Stock on the date it was granted, less the price you paid for it, if any.

Procedure for 83(b) Election

In order to achieve the tax treatment provided by an 83(b) Election, you must make a valid, timely election to include in your taxable, ordinary income in the year you are awarded Restricted Stock, the Fair Market Value of the Restricted Stock less the price you paid, if any, for the Restricted Stock. You must complete the 83(b) election form attached to your Award letter and deliver the form, preferably by certified or registered mail, return receipt requested, to the Internal Revenue Service Center where you file your federal income taxes within 30 days of the date you receive the Award. Upon making such election, you shall promptly furnish a copy of the election to the Company. If you decline such election, you shall promptly furnish a copy of the waiver form to the Company within 30 days of the date you receive the Award. PLEASE BE REMINDED THAT YOU MUST COMPLETE EITHER THE ELECTION FORM OR THE WAIVER FORM NOTIFYING THE COMPANY OF AN 83(b) ELECTION OR DECLINE OF AN 83(b) ELECTION. RETURN THE ELECTION OR WAIVER FORM TO LESLIE MAGEE, CHIEF

FINANCIAL OFFICER, BY FAX AT (225) 298-5382 OR YOU MAY SCAN AND RETURN BY EMAIL TO KCOCHRAN@HE-EQUIPMENT.COM.

THE COMPANY SHALL BEAR NO RESPONSIBILITY OR LIABILITY FOR ANY ADVERSE TAX CONSEQUENCES TO YOU RESULTING FROM YOUR SECTION 83(b) ELECTION OR YOUR FAILURE TO MAKE SUCH ELECTION.

Tax Withholding

At the time of your 83(b) Election, or absent such election, when restrictions on your Restricted Stock lapse, you must make appropriate arrangements with the Company concerning withholding of any taxes that may be due with respect to such Common Stock. If you have properly and timely made the required election under Code Section 83(b), no federal income tax withholding will be required under current law when your restricted shares vest. You may tender cash payment to the Company in an amount equal to the required withholding or if you fail to make the required 83(b) Election so that you experience a taxable event when your restricted shares vest, you may request the Company to retain the number of shares of Common Stock whose Fair Market Value equals the amount to be withheld. Please contact Diane Miller in Human Resources for assistance in determining your required withholding. As promptly thereafter as possible, the Company will issue the vested shares to you as certificates or in book-entry form in an account with the Company’s transfer agent.

**************************

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (a) avoiding penalties under the Internal Revenue Code or (b) promoting, marketing or recommending to another party any transaction or matter addressed herein.

**************************

EXHIBIT C

Waiver of 83(b) Election

The undersigned, a recipient of «F12» shares of common stock of H&E Equipment Services, Inc., a Delaware corporation (the “Company”), pursuant to a restricted stock award granted [ ] under the Company’s Amended and Restated 2006 Stock-Based Incentive Compensation Plan (as the same may be amended from time to time, the “Plan”), hereby states as follows:

1. The undersigned acknowledges receipt of the Restricted Stock Award Agreement Letter and the Plan relating to the offering of such shares. The undersigned has carefully reviewed the Plan and the Agreement pursuant to which the award was granted.

2. The undersigned hereby states that the undersigned has decided (check as applicable):

	(a)		to make an election pursuant to Section 83(b) of the Code, and is submitting to the Company an executed form entitled “83(b) Election Form (Exhibit D) within 30 days of receipt of the Award,

			OR

	(b)		not to make an election pursuant to Section 83(b) of the Code, and is submitting to the Company this executed form, Waiver of 83(b) Election, within 30 days of receipt of the Award.



Dated:___________
		[ ]

EXHIBIT D

83(b) Election Form
Election to Include Value of Restricted Property in Gross Income
in Year of Transfer Under Code §83(b)

The undersigned hereby elects under section 83(b) of the Internal Revenue Code with respect to the property described below to include in gross income the excess (if any) of the fair market value of the property at the time of transfer (determined without regard to any lapse restriction) over the amount paid for such property, as compensation for services, and supplies the following information in accordance with Treasury regulation section 1.83-2(e):

1. The name, address and taxpayer identification number of the undersigned is:


Name:		[ ]
Address:		[ ]
		[ ]

Social Security Number:		[ ]

2. The description of the property with respect to which the election is being made is [ ] shares of Restricted Stock (each a “Share”) of H&E Equipment Services, Inc., a Delaware Corporation (the “Company”).

3. The date on which the property was transferred is [ ] and the taxable year for which this election is made is calendar year[ ].

4.The nature of the restrictions to which this property is subject: The Shares will vest over a term of years contingent upon the undersigned’s continued service with the Company.

5.The fair market value at time of transfer (determined without regard to any restrictions other than restrictions which by their terms will never lapse) of the property with respect to which this election is being made is _____ per Share of Common Stock.

6.The amount paid for the property is $0 per Share of Common Stock.

7.A copy of this statement has been furnished to the Company, which is the person for whom services were performed. Also, a copy of this statement will be submitted with the income tax return of the undersigned for the taxable year in which the property was acquired.

Signed: ____________________

Dated: _______________, ____

_______________, 2011

VIA CERTIFIED MAIL

Internal Revenue Service Center

__________________________

Re: Filing of 83(b) Election

To Whom it May Concern:

Enclosed for filing as of _______________, ____ (the postmark of this package) is an 83(b) election for taxpayer [ ]; social security number [ ].

Kindly (i) accept the 83(b) election for filing effective today, (ii) date stamp the enclosed copies of this letter and of the 83(b) election as evidence of such filing and (iii) return the dated stamped copies of the letter and of the 83(b) election to me in the enclosed self-addressed stamped envelope. Thank you.


		Sincerely,

		Name:	[ ]
		Address: [ ] [ ]

Enclosures

EMPLOYEE SUMMARY OF DISTRIBUTION OF FORMS

Award Agreement Letter

•

Sign and return within fifteen (15) days of receipt of the Award to:

Leslie S. Magee
H&E Equipment Services, Inc.
11100 Mead Road, Suite 200
Baton Rouge, LA 70816

Stock Power (Exhibit A)

•

Sign exactly as your name appears on the Stock Power and have witnessed. Leave all other fields blank — DO NOT DATE. The original must be returned with the Award Agreement Letter above within fifteen (15) days of receipt of the Award.

Waiver of 83(b) Election (Exhibit C)

•

You must choose to waive OR select an 83(b) election. Make your appropriate selection, sign and return within thirty (30) days of receipt of Award to:

Leslie S. Magee
H&E Equipment Services, Inc.
FAX: 225.298.5382
EMAIL: kcochran@he-equipment.com

4.		83(b) Election Form (Exhibit D) *Disregard if you have chosen to waive the* *83(b)* *Election in #3 above.*

		If you have made an election pursuant to Section 83(b) of the Code, you must complete this form.

	(a)		File original with the Internal Revenue Service Center where the taxpayer’s income tax return will be filed. Filing must be made within thirty (30) days of receipt of the Award.

	(b)		Attach one copy to the taxpayer’s income tax return for the taxable year in which the property was transferred.

	(c)		Submit one copy within thirty (30) days of receipt of Award to the Company:

Leslie S. Magee
H&E Equipment Services, Inc.
FAX: 225.298.5382
EMAIL: kcochran@he-equipment.com

exv31w1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a)
AS ADOPTED PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

I, John M. Engquist, certify that:

1.		I have reviewed this quarterly report on Form 10-Q of H&E Equipment Services, Inc.;

2.		Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15e and 15d-15e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15f and 15d-15f) for the registrant and have:

	(a)		designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)		designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)		evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)		disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

	(a)		all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)		any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Dated: November 3, 2011	By:	/s/ John M. Engquist
		John M. Engquist
		President and Chief Executive Officer (Principal Executive Officer)

exv31w2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a)
AS ADOPTED PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

I, Leslie S. Magee, certify that:

1.		I have reviewed this quarterly report on Form 10-Q of H&E Equipment Services, Inc.;

2.		Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15e and 15d-15e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15f and 15d-15f) for the registrant and have:

	(a)		designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)		designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)		evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)		disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	(a)		all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)		any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Dated: November 3, 2011	By:	/s/ Leslie S. Magee
		Leslie S. Magee
		Chief Financial Officer and Secretary (Principal Financial Officer)

exv32w1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of H&E Equipment Services, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John M. Engquist, President and Chief Executive Officer of the Company, and Leslie S. Magee, Chief Financial Officer and Secretary of the Company, each certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

	(1)		to my knowledge, the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

	(2)		the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Dated: November 3, 2011	By:	/s/ John M. Engquist
		John M. Engquist
		President and Chief Executive Officer (Principal Executive Officer)


Dated: November 3, 2011	By:	/s/ Leslie S. Magee
		Leslie S. Magee
		Chief Financial Officer and Secretary (Principal Financial Officer)

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents