Propagation of higher order annular Gaussian (HOAG) laser beams in free space is examined. HOAG beams are defined as the difference of two Hermite-Gaussian (HG) beams; thus, they can be produced by subtracting a smaller beam from a larger beam, that are cocentered and both possess HG mode field distributions. Such beams can be considered as a generalization of the well-known annular Gaussian beams. We formulate the source and receiver plane characteristics and kurtosis parameter of HOAG beams propagating in free space and evaluate them numerically. In comparison to HG beams, HOAG beams have a broader beam size with outer lobes of kidney shape. The amount of received power within the same receiver aperture size, that is, power in bucket, is generally lower for higher order beams. The convergence of the kurtosis parameter to an asymptotic value for higher order beams takes much longer propagation distances compared to zero-order beams.