<PAGE>

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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                             ---------------------

                                   FORM 10-Q

(MARK ONE)

   [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
       SECURITIES EXCHANGE ACT OF 1934

       FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001

                                          OR
   [  ] 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 001-14299

                             ---------------------

                               NATIONSRENT, INC.
             (Exact name of registrant as specified in its charter)

<Table>
    <S>                                    <C>
                  DELAWARE                             31-1570069
       (State or other Jurisdiction of              (I.R.S. Employer
       Incorporation or Organization)             Identification No.)

          450 EAST LAS OLAS BLVD.,                       33301
             FORT LAUDERDALE, FL                       (Zip Code)
       (Address of principal executive
                  offices)
</Table>

                                 (954) 760-6550
              (Registrant's telephone number, including area code)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 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 [X]     No [  ]

     The number of shares of Common Stock, par value $0.01 per share,
outstanding on November 7, 2001 was 57,364,437.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

                               NATIONSRENT, INC.

                           INDEX TO QUARTERLY REPORT

                                  ON FORM 10-Q

                    FOR THE QUARTER ENDED SEPTEMBER 30, 2001

                                     PART I
                             FINANCIAL INFORMATION

<Table>
<Caption>
                                                               PAGE
                                                              NUMBER
                                                              ------
<S>                                                           <C>
Item 1. Financial Statements
  Consolidated Balance Sheets as of September 30, 2001
     (Unaudited) and December 31, 2000......................     1
  Unaudited Consolidated Statements of Operations for the
     Three Months and Nine Months Ended September 30, 2001
     and 2000...............................................     2
  Unaudited Consolidated Statements of Cash Flows for the
     Nine Months Ended September 30, 2001 and 2000..........     3
  Notes to Unaudited Consolidated Financial Statements......     4
Item 2. Management's Discussion and Analysis of Financial
  Condition and Results of
  Operations................................................    13
Item 3. Quantitative and Qualitative Disclosures About
  Market Risk...............................................    22

PART II
OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds...........    23
Item 3. Defaults Upon Senior Securities.....................    23
Item 6. Exhibits and Reports on Form 8-K....................    24
Signatures..................................................    27
</Table>
<PAGE>

                        PART I -- FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                               NATIONSRENT, INC.

                          CONSOLIDATED BALANCE SHEETS
                       (IN THOUSANDS, EXCEPT SHARE DATA)

<Table>
<Caption>
                                                              SEPTEMBER 30,   DECEMBER 31,
                                                                  2001            2000
                                                              -------------   ------------
                                                               (UNAUDITED)
<S>                                                           <C>             <C>
                                          ASSETS
Cash and cash equivalents...................................   $   43,038      $   67,813
Accounts receivable, net....................................      122,328         129,389
Inventories.................................................       36,125          33,438
Prepaid expenses and other assets...........................       19,396          20,623
Deferred financing costs, net...............................       16,381          17,221
Rental equipment, net.......................................      475,507         526,958
Assets held for sale........................................        1,150          35,638
Property and equipment, net.................................      101,211         103,977
Intangible assets related to acquired businesses, net.......      770,824         784,939
                                                               ----------      ----------
          Total Assets......................................   $1,585,960      $1,719,996
                                                               ==========      ==========

                           LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Accounts payable..........................................   $   21,099      $   84,069
  Accrued compensation and related taxes....................        5,531           4,466
  Accrued expenses and other liabilities....................       52,376          61,854
  Debt......................................................    1,118,413       1,117,026
  Income taxes payable......................................           17             100
  Deferred income taxes.....................................           --          11,510
                                                               ----------      ----------
          Total liabilities.................................    1,197,436       1,279,025
                                                               ----------      ----------
Commitments and Contingencies (Note 1)
Stockholders' Equity:
  Preferred stock -- $0.01 par value, 5,000,000 shares
     authorized:
     Series A convertible, $100,000 liquidation preference,
     100,000 shares issued and outstanding at September 30,
     2001 and December 31, 2000.............................            1               1
     Series B convertible, $100,000 liquidation preference,
     100,000 shares issued and outstanding at September 30,
     2001 and December 31, 2000.............................            1               1
  Common stock-- $0.01 par value, 250,000,000 shares
     authorized, 57,364,437 shares and 57,505,481 shares
     issued and outstanding at September 30, 2001 and
     December 31, 2000, respectively........................          584             584
  Additional paid-in capital................................      471,172         471,172
  Accumulated deficit.......................................      (80,354)        (28,112)
  Treasury stock, at cost, 1,065,200 shares and 919,000
     shares at September 30, 2001 and December 31, 2000,
     respectively...........................................       (2,880)         (2,675)
                                                               ----------      ----------
          Total stockholders' equity........................      388,524         440,971
                                                               ----------      ----------
          Total Liabilities and Stockholders' Equity........   $1,585,960      $1,719,996
                                                               ==========      ==========
</Table>

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

                                        1
<PAGE>

                               NATIONSRENT, INC.

                UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

<Table>
<Caption>
                                                        THREE MONTHS ENDED     NINE MONTHS ENDED
                                                           SEPTEMBER 30,         SEPTEMBER 30,
                                                        -------------------   -------------------
                                                          2001       2000       2001       2000
                                                        --------   --------   --------   --------
<S>                                                     <C>        <C>        <C>        <C>
Revenue:
  Equipment rentals...................................  $140,309   $155,774   $384,021   $407,625
  Sales of equipment, merchandise, service, parts and
     supplies.........................................    17,547     28,803     80,449     89,636
                                                        --------   --------   --------   --------
          Total revenue...............................   157,856    184,577    464,470    497,261
                                                        --------   --------   --------   --------
Cost of revenue:
  Cost of equipment rentals...........................    56,379     58,884    155,730    145,963
  Rental equipment depreciation and lease expense.....    37,325     36,259     98,828     91,223
  Cost of sales of equipment, merchandise, service,
     parts and supplies...............................    16,590     19,265     72,981     60,911
                                                        --------   --------   --------   --------
          Total cost of revenue.......................   110,294    114,408    327,539    298,097
                                                        --------   --------   --------   --------
Gross profit..........................................    47,562     70,169    136,931    199,164
Operating expenses:
  Selling, general and administrative expenses........    28,925     32,852     77,417     89,267
  Restructuring charge, net...........................        --         --      6,115         --
  Non-rental equipment depreciation and
     amortization.....................................     9,014      7,293     25,482     19,233
                                                        --------   --------   --------   --------
Operating income......................................     9,623     30,024     27,917     90,664
                                                        --------   --------   --------   --------
Other (income)/expense:
  Interest expense....................................    27,004     25,821     89,637     72,117
  Other, net..........................................         3          5     (1,082)       191
                                                        --------   --------   --------   --------
                                                          27,007     25,826     88,555     72,308
                                                        --------   --------   --------   --------
Income (loss) before provision (benefit) for income
 taxes and cumulative effect of change in accounting
 principle............................................   (17,384)     4,198    (60,638)    18,356
  Provision (benefit) for income taxes................     2,375      2,935     (9,755)     8,810
                                                        --------   --------   --------   --------
  Income (loss) before cumulative effect of change in
     accounting principle.............................   (19,759)     1,263    (50,883)     9,546
  Cumulative effect of change in accounting principle,
     net of income tax benefit (see note 1)...........        --         --      1,359         --
                                                        --------   --------   --------   --------
Net income (loss).....................................  $(19,759)  $  1,263   $(52,242)  $  9,546
                                                        ========   ========   ========   ========
Net income (loss) per share:
  Basic...............................................  $  (0.34)  $   0.02   $  (0.91)  $   0.16
                                                        ========   ========   ========   ========
  Diluted.............................................  $  (0.34)  $   0.02   $  (0.91)  $   0.13
                                                        ========   ========   ========   ========
Weighted average common shares outstanding:
  Basic...............................................    57,364     57,935     57,364     58,290
                                                        ========   ========   ========   ========
  Diluted.............................................    57,364     82,376     57,364     76,177
                                                        ========   ========   ========   ========
</Table>

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

                                        2
<PAGE>

                               NATIONSRENT, INC.

                UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                NINE MONTHS ENDED
                                                                  SEPTEMBER 30,
                                                              ---------------------
                                                                2001        2000
                                                              ---------   ---------
<S>                                                           <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)...........................................  $ (52,242)  $   9,546
Adjustments to reconcile net income (loss) to net cash
  provided by (used in) operating activities:
  Depreciation and amortization.............................     71,572      70,345
  Non-cash restructuring charge.............................      6,115          --
  Loss (gain) on disposal of non-rental equipment...........       (120)          6
  Gain on sale of rental equipment..........................     (3,264)    (15,380)
  Gain on sale of businesses................................       (486)         --
  Deferred income tax provision (benefit)...................    (11,200)      7,992
  Changes in operating assets and liabilities:
      Accounts receivable...................................      7,060     (24,520)
      Inventories...........................................     (2,972)     (1,230)
      Prepaid expenses and other assets.....................      4,959     (14,217)
      Accounts payable......................................    (58,600)     47,128
      Accrued expenses and other liabilities................    (12,091)     (2,198)
      Income taxes payable..................................        (83)         49
                                                              ---------   ---------
      Net cash (used in) provided by operating activities...    (51,352)     77,521
                                                              ---------   ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Acquisition of businesses, net of cash acquired.........         --     (21,117)
    Payment of contingent acquisition consideration.........         --     (11,750)
    Purchases of rental equipment...........................    (18,092)   (142,721)
    Purchases of property and equipment.....................     (7,552)    (30,442)
    Proceeds from sale of rental equipment..................     58,453      49,390
    Proceeds from sale of non-rental equipment..............      1,104          --
    Proceeds from sale of businesses........................        900       6,657
    Investment in affiliate.................................         --      (2,000)
                                                              ---------   ---------
      Net cash provided by (used in) investing activities...     34,813    (151,983)
                                                              ---------   ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from debt......................................    182,986     312,240
    Repayments of debt......................................   (185,970)   (325,509)
    Purchase of treasury stock..............................       (205)     (2,002)
    Debt issuance costs.....................................     (5,047)     (4,416)
    Proceeds from issuance of preferred stock, net..........         --      95,317
                                                              ---------   ---------
      Net cash (used in) provided by financing activities...     (8,236)     75,630
                                                              ---------   ---------
Net (decrease) increase in cash and cash equivalents........    (24,775)      1,168
Cash and cash equivalents, beginning of period..............     67,813       5,290
                                                              ---------   ---------
Cash and cash equivalents, end of period....................  $  43,038   $   6,458
                                                              =========   =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
    Cash paid for interest..................................  $  59,076   $  62,985
                                                              =========   =========
    Cash paid for income taxes..............................  $     160   $     645
                                                              =========   =========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING
  ACTIVITIES:
  The Company acquired the net assets and assumed certain
    liabilities of certain businesses as follows:
    Total assets, net of cash acquired......................  $      --   $  38,101
    Total liabilities assumed...............................         --     (12,414)
    Amount paid through the issuance of debt and future
     contractual payments...................................         --      (4,570)
                                                              ---------   ---------
      Net cash paid.........................................  $      --   $  21,117
                                                              =========   =========
    Fixed assets acquired under financial obligations.......  $   4,371   $  32,535
                                                              =========   =========
</Table>

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

                                        3
<PAGE>

                               NATIONSRENT, INC.

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001

NOTE 1 -- BASIS OF PRESENTATION

     The accompanying unaudited interim consolidated financial statements have
been prepared by NationsRent, Inc. (the "Company"), assuming that the Company
will continue as a going concern which contemplates the realization of the
carrying amounts of assets and the satisfaction of liabilities in the normal
course of business. Such statements reflect all adjustments of a normal
recurring nature which are, in the opinion of management, necessary for a fair
presentation of financial results for the three and nine months ended September
30, 2001 and 2000, in accordance with generally accepted accounting principles
for interim financial reporting and pursuant to Article 10 of Regulation S-X.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates. For interim reporting
purposes, certain expenses are charged to earnings in proportion to the
relationship that revenue for such period bears to estimated full year revenue
and related expenses. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. These unaudited interim consolidated financial statements should be
read in conjunction with the consolidated financial statements for the year
ended December 31, 2000 appearing in the Company's Annual Report on Form 10-K
filed with the Securities and Exchange Commission. The results of operations for
the three and nine months ended September 30, 2001 are not necessarily
indicative of the results which may be reported for the year ending December 31,
2001.

     The unaudited interim consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries. All material
intercompany transactions and balances have been eliminated in consolidation.
The comprehensive income (loss) of the Company was equal to net income (loss)
for all periods presented.

LIQUIDITY AND CAPITAL RESOURCES

     The Company is highly leveraged and its ability to meet its financial
obligations is dependent on, among other things, its results of operations and
its ability to maintain compliance with its debt covenants, including financial
ratios regarding debt, cash flows and fixed charge coverage on a quarterly
basis. Over the past four quarters, the Company suffered significant losses from
operations and its accumulated deficit totaled approximately $80,354,000 as of
September 30, 2001. Historically, the Company has funded its cash requirements
primarily with borrowings under its Senior Revolving Credit and Term Loan
Facility (the "Credit Facility"), proceeds from the issuance of debt and equity
securities and cash from operations. During 2001, the Company's primary sources
of cash have been borrowings under the Credit Facility, cash generated from
operations and proceeds from the sale of rental equipment. Despite the Company's
restructuring efforts described in Note 2, principally as a result of the
Company's accumulated operating losses, the Company was not in compliance with
its third quarter financial covenants contained in the Credit Facility, and
therefore, the Company is currently in default of the Credit Facility and is
currently prohibited from borrowing under the Credit Facility. While additional
borrowings under the Credit Facility remain unavailable, the Company will be
required to fund its operations from cash on hand and cash generated from
operations. At November 13, 2001, the Company had approximately $20,300,000 of
cash invested.

     The Company's near term material debt service and lease commitments include
a $53,700,000 term loan principal payment under the Credit Facility due December
1, 2001, interest payments on the Credit Facility of approximately $4,750,000
per month, an $8,100,000 principal payment on purchase money equipment financing
due January 1, 2002, principal and interest payments on purchase money equipment
financing of approximately $2,200,000 per month, interest payments on the
Company's 10.375% Senior Subordinated Notes due 2008 (the "Senior Subordinated
Notes") of approximately $9,100,000 due on December 15, 2001,

                                        4
<PAGE>
                               NATIONSRENT, INC.

      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

principal payments on certain subordinated notes issued in connection with
acquisitions ("Acquisition Notes") of approximately $7,500,000 due October 1,
2001, interest payments on Acquisition Notes of approximately $1,600,000 per
quarter, lease payments pursuant to certain equipment and vehicle operating
leases of approximately $24,400,000 per quarter, and lease payments pursuant to
certain facility leases of approximately $2,300,000 per month.

     Principally as a result of the Company's accumulated operating losses and
the default under the Credit Facility at September 30, 2001, the Company
currently does not have the financial resources to make the $53,700,000 term
loan payment due December 1, 2001. Under the terms of the Credit Facility,
following an event of default, the senior lenders have several rights and
remedies available to them, including declaring all amounts outstanding,
together with accrued interest, to be immediately due and payable. Substantially
all of the Company's assets are pledged as collateral to secure obligations
under the Credit Facility. If the Company is unable to repay all outstanding
amounts under its Credit Facility, the senior lenders could proceed against the
collateral held by them to secure that indebtedness, and any proceeds realized
upon the sale of this collateral would be used to first satisfy all amounts
outstanding under the Credit Facility, and thereafter, any of the Company's
other liabilities. Currently, the Company is actively working with its senior
lenders to address its liquidity position.

     Under the terms of the Credit Facility, during the continuance of an event
of default, the senior lenders may prohibit the Company from making principal
and interest payments on subordinated indebtedness, such as the Senior
Subordinated Notes and Acquisition Notes. If an interest payment on the Senior
Subordinated Notes is not made 30 days after it is due or following any other
default on the Senior Subordinated Notes which is not cured within the
applicable grace period, the trustee or the holders of 25% of the principal
amount of the notes may accelerate all amounts outstanding and declare the
Senior Subordinated Notes immediately due and payable. In addition, the Company
has not made certain principal and interest payments on certain Acquisition
Notes due in October 2001 and certain of the holders of such notes have declared
such notes immediately due and payable. Under the terms of such Acquisition
Notes, so long as an event of default under the Credit Facility continues, the
holders of such notes are required to forbear from taking any action to enforce
the provisions of such notes for periods of either 120 days or 180 days from the
date of the default.

     The Company has certain contractual obligations in connection with certain
acquisitions due December 14, 2001 totaling approximately $12,100,000 based on
the performance of the Company's Common Stock. Principally as a result of the
Company's accumulated operating losses and the default under the Credit Facility
at September 30, 2001, the Company currently does not have the financial
resources to make such payments in cash. The Company is permitted to make such
payments by issuing Common Stock, which would be highly dilutive to existing
stockholders of the Company and constitute a change of control of the Company,
in which event the Company may be required to repay amounts outstanding under
the Credit Facility and the Senior Subordinated Notes, as well as offer to
redeem shares of the Company's Series A and B preferred stock.

     Due to various cross-default provisions contained in certain of the
Company's other debt and lease arrangements, an event of default under the
Credit Facility and/or other debt obligations of the Company, may constitute a
default under such other arrangements giving the parties thereto the right to
accelerate outstanding amounts, terminate agreements and/or foreclose on
collateral underlying such obligations, which may include equipment, vehicles or
facilities.

     So long as the lenders under the Credit Facility do not foreclose on their
collateral and so long as our vendors continue to provide us with trade credit
as they have in the past and assuming the Company does not make additional debt
service payments when due, the Company believes that cash on hand and cash
generated from operations will be adequate to currently fund its operations,
including its employees' salaries and wages, trade vendor payments, equipment
operating leases, facility rents, new store openings and other operating

                                        5
<PAGE>
                               NATIONSRENT, INC.

      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

costs. However, given current economic conditions, there can be no assurance
that the Company will have sufficient cash to fund such activities.

     The Company has retained financial advisors to explore and evaluate
strategic and restructuring alternatives for the Company. Under the terms of the
Credit Facility and the indenture governing the Senior Subordinated Notes, the
Company is prohibited from incurring any additional indebtedness. In addition,
if the Company were to enter into a transaction constituting a change of
control, the Company may be required to repay amounts outstanding under the
Credit Facility and the Indenture, as well as offer to redeem shares of the
Company's Series A and B Preferred Stock.

     If the Company does not effectively resolve its current default under its
Credit Facility, or if adequate funds are not available to retire its debt
obligations as they become due, the Company's ability to continue as a going
concern would be impaired. At this time, the Company is considering all its
available options to address its capital structure, which may include seeking
protection under Chapter 11 of the federal bankruptcy laws.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

     Effective January 1, 2001, the Company adopted Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended ("SFAS No. 133"). This statement establishes accounting
and reporting standards for derivative instruments and hedging activities. Under
SFAS No. 133, all derivatives must be recognized as assets or liabilities and
measured at fair value. If the derivative is designated as a cash flow hedge,
the effective portions of changes in the fair value of the derivative are
recorded in other comprehensive income (loss) and are recognized in the
statement of operations when the hedged item affects earnings. Ineffective
portions of changes in the fair value of cash flow hedges are recognized in
earnings.

     The use of interest rate risk management instruments, such as swaps, is
required under the terms of the Credit Facility. The Company has developed and
implemented a policy to maintain the percentage of fixed and variable debt
within certain parameters. Through the use of swaps, the Company limits its
exposure to and benefits from interest rate fluctuations on variable rate debt
to within a certain range of rates. At September 30, 2001, the amount covered by
swaps was $195,000,000, with effective interest rates between 6.58% and 6.80%.
The Company recognizes its derivatives on the balance sheet at fair value,
representing a liability of approximately $4,245,000 as of September 30, 2001
which is included in other accrued liabilities in the accompanying unaudited
consolidated balance sheet. The Company has determined the interest rate swaps
to be ineffective cash flow hedges, as defined by SFAS No. 133. In accordance
with the transition provisions of SFAS No. 133, the Company recorded a
$1,359,000 charge net of income tax benefits or $0.02 per share, which is
recorded in the unaudited consolidated statement of operations for the nine
months ended September 30, 2001 as a cumulative effect of change in accounting
principle. The impact of the change in value of the Company's swaps for the nine
months ended September 30, 2001 resulted in a charge to interest expense of
$1,917,000.

     In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 141, "Business Combinations" ("SFAS No.
141"), and No. 142, "Goodwill and Other Intangible Assets" ("SFAS No. 142").
SFAS No. 141 requires that the purchase method of accounting be used for all
business combinations initiated after June 30, 2001. SFAS No. 141 also specifies
criteria that intangible assets acquired in a purchase method business
combination must meet to be recognized and reported apart from goodwill, noting
that any purchase price allocable to an assembled workforce may not be accounted
for separately. SFAS No. 142 will require that goodwill and intangible assets
with indefinite useful lives no longer be amortized, but instead be tested for
impairment at least annually in accordance with the provisions of SFAS No. 142.
SFAS No. 142 will also require that intangible assets with definite useful lives
be amortized over their respective estimated useful lives to their estimated
residual values, and be reviewed for

                                        6
<PAGE>
                               NATIONSRENT, INC.

      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

impairment in accordance with SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" ("SFAS No. 121").

     The Company is required to adopt the provisions of SFAS No. 141 immediately
and SFAS No. 142 effective January 1, 2002. Goodwill and intangible assets
acquired in business combinations completed before July 1, 2001 will continue to
be amortized until the adoption of SFAS No. 142.

     Upon adoption of SFAS No. 142, the Company is required to evaluate its
existing intangible assets and goodwill that were acquired in prior purchase
business combinations and to make any necessary reclassifications in order to
conform with the new criteria in SFAS No. 141 for recognition apart from
goodwill. Upon adoption of SFAS No. 142, the Company will be required to
reassess the useful lives and residual values of all intangible assets (other
than goodwill) acquired in purchase business combinations. In addition, to the
extent an intangible asset is identified as having an indefinite useful life,
the Company will be required to test the intangible asset for impairment in
accordance with the provisions of SFAS No. 142 within the first interim period.
Any impairment loss will be measured as of the date of adoption and recognized
as the cumulative effect of a change in accounting principle in the first
interim period.

     In connection with the transitional goodwill impairment evaluation, SFAS
No. 142 will require the Company to perform an assessment of whether there is an
indication that goodwill is impaired as of the date of adoption. To accomplish
this, the Company must identify its reporting units and determine the carrying
value of each reporting unit by assigning the assets and liabilities, including
the existing goodwill and intangible assets, to those reporting units as of the
date of adoption. The Company will then have up to six months from the date of
adoption to determine the fair value of each reporting unit and compare it to
the reporting unit's carrying amount. To the extent a reporting unit's carrying
amount exceeds its fair value, an indication exists that the reporting unit's
goodwill may be impaired and the Company must perform the second step of the
transitional impairment test. In the second step, the Company must compare the
implied fair value to all of its assets (recognized and unrecognized) and
liabilities in a manner similar to a purchase price allocation in accordance
with SFAS No. 141, to its carrying amount, both of which would be measured as of
the date of adoption. Any transitional impairment loss will be recognized as the
cumulative effect of a change in accounting principle in the Company's statement
of operations.

     As of the date of adoption, the Company expects to have unamortized
goodwill in the amount of approximately $766,000,000, which will be subject to
the transition provisions of SFAS No. 142. Amortization expense related to
goodwill was approximately $20,227,000 and $15,495,000 for the twelve months
ended December 31, 2000 and nine months ended September 30, 2001, respectively.

     Because of the extensive effort needed to comply with adopting SFAS No. 142
and because the fair values have to be determined at the date of adoption, it is
not practicable to reasonably estimate the impact of adopting this statement on
the Company's financial statements at the date of this report, however, the
Company anticipates that it will record a significant transitional impairment
loss as a cumulative effect of a change in accounting principle.

     In August 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets" ("SFAS No. 144"). SFAS No. 144 supercedes SFAS
No. 121 and APB Opinion No. 30, "Reporting the Results of Operations --
Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions." SFAS No. 144
establishes an accounting model based on SFAS No. 121 for long-lived assets to
be disposed of by sale, previously accounted for under APB Opinion No. 30. This
statement is effective for fiscal years beginning after December 15, 2001. The
Company is currently assessing the impact of the adoption of this statement, but
believes it will not materially affect the Company's financial position or
results of operations.

                                        7
<PAGE>
                               NATIONSRENT, INC.

      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 2 -- RESTRUCTURING CHARGE

     During the fourth quarter of 2000, the Company implemented a plan to
restructure certain of its operations to address a significant imbalance between
its revenue and costs. During the first quarter of 2001, the Company implemented
additional actions to restructure certain of its operations. The restructuring
plan is comprised of the following major components: (i) the sale of excess
rental equipment, which primarily relates to a portion of the Company's heavy
earthmoving equipment that has the highest unit cost, requires the most
expensive support infrastructure and has the lowest return on investment; (ii)
the abandonment of certain information system projects that were under
development; (iii) the elimination of jobs company-wide and the consolidation of
various departments within the Company's organization; and (iv) the closure of
certain rental and office locations.

     Pursuant to the Company's restructuring plan, during the fourth quarter of
2000, the Company recorded a pre-tax restructuring charge of approximately
$72,005,000 and during the first quarter of 2001, the Company recorded an
additional pre-tax restructuring charge of approximately $6,301,000. The Company
reduced the charge related to employee termination severance costs by
approximately $186,000 during the second quarter of 2001. The components of
these charges, along with the 2001 activity related to these charges, are
presented in the following table (in thousands).

<Table>
<Caption>
                                 RESERVE                                             RESERVE
                                BALANCE AT     AMOUNTS          DEDUCTIONS         BALANCE AT
                               DECEMBER 31,   CHARGED TO    -------------------   SEPTEMBER 30,
                                   2000         INCOME       CASH      NON-CASH       2001
                               ------------   ----------    -------    --------   -------------
<S>                            <C>            <C>           <C>        <C>        <C>
Rental fleet disposition...      $36,491        $5,088      $    --    $(40,838)     $   741
Information systems
  abandonment..............          900            --         (679)         --          221
Employee termination
  severance costs..........        6,636           958       (5,017)         --        2,577
Facility closures..........        1,763            69         (351)        (69)       1,412
                                 -------        ------      -------    --------      -------
                                 $45,790        $6,115      $(6,047)   $(40,907)     $ 4,951
                                 =======        ======      =======    ========      =======
</Table>

     The accrual for rental fleet disposition represents estimated losses on
assets held for sale at September 30, 2001 and losses related to the sale of
leased rental equipment. During the fourth quarter of 2000 and the nine months
ended September 30, 2001, the Company sold approximately 97.8% of the
$155,645,000 of original cost of the rental equipment that has been identified
for sale under the restructuring plan. The Company plans to sell the remaining
rental equipment by the end of the fourth quarter 2001 through sales to
independent third parties through auctions, brokers and retail sales.

     The remaining accrual for the information systems abandonment is for
contractual payments related to certain abandoned software which are expected to
be paid through 2001.

     The restructuring plan includes the termination and payment of related
severance benefits under the Company's existing severance plan and agreements
for approximately 450 employees, all of whom had been terminated as of September
30, 2001. During the second quarter of 2001, the Company modified its
restructuring plan to reduce the number of employees to be terminated under the
plan. Such modification resulted in a net reduction of approximately 80
employees which were to be terminated and was primarily due to changes to the
store closure restructuring plan described below, normal employee attrition and
the retention of certain employees. As a result of the modification, the
previously recorded charge was reduced by approximately $186,000 during the
second quarter of 2001. Payments are expected to be paid through the third
quarter of 2003.

     During the second quarter of 2001, the Company modified its restructuring
plan related to facility closures, primarily as a result of changes to its
planned openings of NationsRent rental centers within select

                                        8
<PAGE>
                               NATIONSRENT, INC.

      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Lowe's home improvement stores (see "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- New Stores"). As a result of
the changes to the restructuring plan, three of the rental facilities originally
identified for closure will remain open and one additional rental facility was
identified for closure. The impact of such changes was not material to the
original restructuring charge recorded for store closures. All 16 stores that
have been identified for closure under the restructuring plan, as modified, have
been closed as of September 30, 2001. Lease payments for the facility closures
extend into 2009. Although the Company intends to aggressively market these
locations for subleases on acceptable terms, the ultimate time required to
obtain acceptable subleases may extend beyond the Company's estimates. The
Company has other rental locations in the geographic markets where the facility
closures are taking place. The Company believes that revenue related to the
closed locations will be substantially retained by these other rental locations
in the same geographic markets.

NOTE 3 -- DEBT

     Debt consists of the following (in thousands):

<Table>
<Caption>
                                                              SEPTEMBER 30,   DECEMBER 31,
                                                                  2001            2000
                                                              -------------   ------------
<S>                                                           <C>             <C>
Notes payable to financial institutions:
  Term loan.................................................   $  396,000      $  400,000
  Revolving credit facility.................................      367,600         339,200
10.375% Senior Subordinated Notes due December 15, 2008 with
  interest due semi-annually each June 15 and December 15...      175,000         175,000
Subordinated promissory notes, bearing interest at 6.0% to
  8.5%, interest payable quarterly and maturities through
  November 2002.............................................          625             625
Subordinated convertible promissory notes, bearing interest
  at 6.0% to 8.5%, interest payable quarterly and maturities
  through December 2006.....................................      100,893         102,293
Rental equipment financing obligations, secured by
  equipment, payable in monthly installments, through
  January 2005, capitalized by the Company..................       22,411          31,107
Note payable, with interest at the commercial paper rate
  plus 2.05% to 2.25%, payable in monthly installments
  through September 2004, secured by equipment..............        7,500           9,167
Note payable, with interest at the London Interbank Offered
  Rate plus 2.75%, payable in monthly installments through
  December 2001, secured by equipment.......................        8,944          11,216
Note payable, with interest at 6.63%, payable in quarterly
  installments through July 2001............................           --             323
Equipment notes, bearing interest at 6.2% to 9.25% or at the
  Prime Rate less 0.25%, payable in various monthly
  installments through April 2003, secured by equipment.....       36,651          48,065
Other.......................................................        2,789              30
                                                               ----------      ----------
          Total debt........................................   $1,118,413      $1,117,026
                                                               ==========      ==========
</Table>

     In March 2001, the Company entered into an amendment to the Credit Facility
(the "First Amendment"), the terms of which included a waiver with respect to
certain financial covenants at December 31, 2000, a reduction in total
commitments and an increase in pricing. The First Amendment also changed certain
financial covenants based on the Company's business plan for 2001. On the
effective date of the First Amendment, the total commitments were reduced from
$925,000,000 to $850,000,000. In August 2001, the Company entered into a further
amendment to the Credit Facility (the "Second Amendment") to amend covenants for
its net worth and fixed charge coverage tests, which were previously set before
the Company finalized its restructuring and other charges and before taking into
account the impact of SFAS No. 133. The Credit Facility now consists of a
$396,000,000 term loan due July 2006 and a $450,000,000 revolving line of credit
due July 2004, with quarterly caps on revolver availability of between
$364,000,000 and $390,000,000

                                        9
<PAGE>
                               NATIONSRENT, INC.

      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

until delivery of financial statements for the fiscal quarter ending March 31,
2002 demonstrating compliance with the financial covenants contained in the
Credit Facility. Pursuant to the Second Amendment, the Company is required to
pay down the term loan by $53,700,000 on December 1, 2001 instead of December
31, 2001. The reductions in the total commitments and the term loan resulted in
the write-off of approximately $3,600,000 in deferred financing costs during the
first quarter of 2001 included in interest expense in the accompanying unaudited
consolidated statement of operations. Borrowings under the revolving line of
credit bear interest at either the Fleet National Bank base rate plus a
percentage ranging from 0.50% to 2.50% or, at the Company's option, the
Eurodollar market rate plus a percentage ranging from 1.75% to 4.50%. The term
loan bears interest at the base rate plus 2.00% to 2.50%, or at the Company's
option, the Eurodollar market rate plus 3.25% to 4.50%. The percentage over the
Eurodollar market rate and base rate is based on the Company's financial
performance as measured by the senior funded debt ratio, the Company's senior
secured debt rating and the total funded debt ratio. As of September 30, 2001,
the percentages over the Eurodollar market rate and base rate for borrowings
under the Credit Facility were 4.50% and 2.50%, respectively. Following an event
of default under the Credit Facility, the Company no longer has the option to
elect a Eurodollar market rate and all borrowings under the Credit Facility will
bear additional interest at a premium of 2.00% over the applicable rate. The
Credit Facility is secured by a security interest in substantially all of the
Company's assets. The Credit Facility also imposes, among other covenants, a
tangible assets to senior debt covenant, a restriction on all of the Company's
retained earnings including the declaration and payment of cash dividends and a
restriction on the ratio of total and senior funded debt to earnings before
interest, income taxes, depreciation and amortization. Until December 31, 2001,
the Company is also subject to a quarterly and cumulative limitation on the
Company's capital expenditures for rental and non-rental equipment and for
growth activities, and a quarterly and cumulative required minimum earnings
before interest, income taxes, depreciation and amortization. For 2001, the
Company is also required to generate proceeds from the sale of used equipment
and other asset sales in excess of its capital expenditures. As of September 30,
2001, the Company was not in compliance with its financial covenants specified
in the Credit Facility and consequently was in default under the terms of the
Credit Facility. See Note 1 for further discussion of liquidity.

NOTE 4 -- GOODWILL

     As disclosed in Accounting Policies in our Annual Report on Form 10-K for
the year ended December 31, 2000, the Company periodically reviews the carrying
value and estimated lives of long-lived assets if facts and circumstances
suggest that the carrying value may be impaired or the useful lives may require
revision using an undiscounted cash flow analysis. At September 30, 2001, based
on the Company's analysis, management believes the net book value of goodwill is
recoverable from future cash flows over the remaining amortization period. The
Company's liquidity situation (see Note 1) and recent actions taken by
management in 2000 and 2001 to restructure the Company (see Note 2) will result
in management continuing to review during 2001 the recoverability of all
long-lived assets, including goodwill. In light of the Company's current
operating environment, future projected cash flows may be subject to significant
variability. As a result, it is possible that the Company will recognize a
significant impairment charge related to goodwill in the fourth quarter of 2001
under the existing accounting standards. See Note 1 -- Impact of Recently Issued
Accounting Standards for a discussion of the new accounting standards for
goodwill and other intangible assets.

NOTE 5 -- ACQUISITIONS

     The Company made no acquisitions during the nine months ended September 30,
2001. The Company made four acquisitions of equipment rental businesses during
the nine months ended September 30, 2000. The aggregate consideration for these
acquisitions was $25,825,000 and consisted of (i) $21,255,000 of cash, (ii)
$3,475,000 of subordinated convertible debt and (iii) $1,095,000 of future
contractual cash payments. In addition, the Company repaid or assumed
outstanding indebtedness of the acquired companies in the aggregate amount of
$9,793,000. These acquisitions have been accounted for using the purchase method
and,
                                        10
<PAGE>
                               NATIONSRENT, INC.

      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

accordingly, the acquired assets and assumed liabilities, including goodwill,
have been recorded at their estimated fair values as of the date of acquisition.

     During the nine months ended September 30, 2000, the Company paid
consideration of $11,750,000 of cash, $1,200,000 of subordinated convertible
debt and 1,721,664 shares of Common Stock to the former owners of previously
acquired businesses related to the achievement of certain operating results. The
Company records amounts paid for contingent consideration as additional purchase
price once they are incurred since the consideration is required regardless of
the former owner's continued association with the Company.

NOTE 6 -- SEASONALITY

     The Company's revenue and income are dependent upon the activity in the
construction industry in the markets served by the Company. Construction
activity is dependent upon weather and the traditional seasons for construction
work. Because of this variability in demand, the Company's quarterly revenue may
fluctuate, and revenue for the first quarter of each year can be expected to be
lower than the remaining quarters. Although the Company believes that the
historical trend in quarterly revenue for the second, third and fourth quarters
of each year is generally higher than the first quarter, there can be no
assurance that this will occur in future periods. Accordingly, quarterly or
other interim results should not be considered indicative of results to be
expected for any quarter or for the full year.

NOTE 7 -- EARNINGS (LOSS) PER SHARE

     The following table sets forth the computation of basic and diluted
earnings (loss) per share (in thousands, except per share data):

<Table>
<Caption>
                                              THREE MONTHS ENDED     NINE MONTHS ENDED
                                                 SEPTEMBER 30,         SEPTEMBER 30,
                                              -------------------   -------------------
                                                2001       2000       2001       2000
                                              --------    -------   --------    -------
<S>                                           <C>         <C>       <C>         <C>
Numerator for diluted earnings (loss) per
  share -- net income (loss)................  $(19,759)   $ 1,263   $(52,242)   $ 9,546
                                              ========    =======   ========    =======
Denominator:
  Denominator for basic earnings (loss) per
     share -- weighted-average shares.......    57,364     57,935     57,364     58,290
  Effect of dilutive securities:
     Preferred stock........................        --     24,247         --     17,630
     Employee stock options.................        --        194         --        257
                                              --------    -------   --------    -------
Denominator for diluted earnings (loss) per
  share -- adjusted weighted-average
  shares....................................    57,364     82,376     57,364     76,177
                                              ========    =======   ========    =======
Basic earnings (loss) per share.............  $  (0.34)   $  0.02   $  (0.91)   $  0.16
                                              ========    =======   ========    =======
Diluted earnings (loss) per share...........  $  (0.34)   $  0.02   $  (0.91)   $  0.13
                                              ========    =======   ========    =======
</Table>

     Options and warrants to purchase 9,118,055 and 7,330,251 shares of Common
Stock were outstanding at September 30, 2001 and 2000, respectively, but were
not included in the computation of diluted earnings per share because the
options' exercise price was greater than the average market value of the shares
of Common Stock for the periods presented and, therefore, the effect would be
anti-dilutive. The convertible subordinated debt was excluded from the diluted
earnings per share calculation for the three and nine months ended September 30,
2001 and 2000, respectively, as such debt was anti-dilutive in such periods.

     Preferred stock and subordinated debt convertible into 36,507,937 and
11,200,621 shares of Common Stock, respectively, were outstanding at September
30, 2001 but were not included in the computation of diluted earnings per share
for the three and nine months ended September 30, 2001 since their effect would
be anti-dilutive.

                                        11
<PAGE>
                               NATIONSRENT, INC.

      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 8 -- CAPITAL STOCK

     In January 2001, the Company purchased 146,200 shares of its Common Stock
in the open market for a cost of approximately $205,000 under its $5,000,000
Board authorized cumulative share repurchase program. Through January 2001, an
aggregate of 1,065,200 shares of Common Stock have been acquired under this
program for an aggregate purchase price of approximately $2,880,000. These
shares have been recorded as treasury stock in the accompanying consolidated
financial statements. Since January 2001, no additional shares have been
purchased.

     In June 2001, the New York Stock Exchange (the "NYSE") notified the Company
that the Company's stock price has been below the NYSE's continued listing
criteria for minimum share price of $1.00 over a 30 day trading period. In
addition, in November 2001, the NYSE notified the Company that the Company's
market capitalization has been below the NYSE's continued listing criteria for
minimum market capitalization of $15,000,000 over a 30 day trading period. The
Company will be subject to de-listing procedures if the Company's stock price
and market capitalization do not reach and maintain the NYSE minimum.

NOTE 9 -- INCOME TAXES

     For the nine months ended September 30, 2001, the Company recognized a tax
benefit only to the extent that it had deferred tax liabilities recorded on the
balance sheet.

                                        12
<PAGE>

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

     The following discussion and analysis of our consolidated results of
operations and financial condition should be read in conjunction with the
unaudited interim consolidated financial statements and the related notes
included herein and the consolidated financial statements for the year ended
December 31, 2000 appearing in our Annual Report on Form 10-K filed with the
Securities and Exchange Commission.

GENERAL

     NationsRent is a leading provider of rental equipment in the United States.
We offer a comprehensive line of equipment for rent primarily to a broad range
of construction and industrial customers including general contractors,
subcontractors, highway contractors, manufacturing plants and distribution
centers. We also sell used and new equipment, spare parts and supplies. We
currently operate 230 equipment rental locations in 27 states. We have become a
leading provider of rental equipment as a result of a combination of having
acquired platform companies in target markets, opened or acquired additional
locations concentrated around those businesses and expanded the selection and
availability of our rental fleet.

LIQUIDITY AND CAPITAL RESOURCES

     We are highly leveraged and our ability to meet our financial obligations
is dependent on, among other things, our results of operations and our ability
to maintain compliance with our debt covenants, including financial ratios
regarding debt, cash flows and fixed charge coverage on a quarterly basis. Over
the past four quarters, we suffered significant losses from operations and our
accumulated deficit totaled approximately $80.4 million as of September 30,
2001. Historically, we have funded our cash requirements primarily with
borrowings under our senior credit facility, proceeds from the issuance of debt
and equity securities and cash from operations. During 2001, our primary sources
of cash have been borrowings under our senior credit facility, cash generated
from operations and proceeds from the sale of rental equipment. Despite our
restructuring efforts described below, principally as a result of our
accumulated operating losses, we were not in compliance with our third quarter
financial covenants contained in our senior credit facility, and therefore, we
are currently in default of the senior credit facility and are currently
prohibited from borrowing under our senior credit facility. While additional
borrowings under the senior credit facility remain unavailable, we will be
required to fund our operations from cash on hand and cash generated from
operations. At November 13, 2001, we had approximately $20.3 million of cash
invested.

     Our near term material debt service and lease commitments include a $53.7
million term loan principal payment under our senior credit facility due
December 1, 2001, interest payments on our senior credit facility of
approximately $4.8 million per month, an $8.1 million principal payment on
purchase money equipment financing due January 1, 2002, principal and interest
payments on purchase money equipment financing of approximately $2.2 million per
month, interest payments on our 10.375% Senior Subordinated Notes due 2008 (the
"Senior Subordinated Notes") of approximately $9.1 million due on December 15,
2001, principal payments on certain subordinated notes issued in connection with
acquisitions ("Acquisition Notes") of approximately $7.5 million due October 1,
2001, interest payments on Acquisition Notes of approximately $1.6 million per
quarter, lease payments pursuant to certain equipment and vehicle operating
leases of approximately $24.4 million per quarter, and lease payments pursuant
to certain facility leases of approximately $2.3 million per month.

     Principally as a result of our accumulated operating losses and the default
under our senior credit facility at September 30, 2001, we currently do not have
the financial resources to make the $53.7 million term loan payment due December
1, 2001. Under the terms of our senior credit facility, following an event of
default, the senior lenders have several rights and remedies available to them,
including declaring all amounts outstanding, together with accrued interest, to
be immediately due and payable. Substantially all of our assets are pledged as
collateral to secure obligations under the senior credit facility. If we are
unable to repay all outstanding amounts under our senior credit facility, the
senior lenders could proceed against the collateral held by them to secure that
indebtedness, and any proceeds realized upon the sale of this collateral would
be used to first

                                        13
<PAGE>

satisfy all amounts outstanding under the senior credit facility, and
thereafter, any of our other liabilities. Currently, we are actively working
with our senior lenders to address our liquidity position.

     Under the terms of the senior credit facility, during the continuance of an
event of default, our senior lenders may prohibit us from making principal and
interest payments on subordinated indebtedness, such as the Senior Subordinated
Notes and Acquisition Notes. If an interest payment on the Senior Subordinated
Notes is not made 30 days after it is due or following any other default on the
Senior Subordinated Notes which is not cured within the applicable grace period,
the trustee or the holders of 25% of the principal amount of the notes may
accelerate all amounts outstanding and declare the Senior Subordinated Notes
immediately due and payable. In addition, we have not made certain principal and
interest payments on certain Acquisition Notes due in October 2001 and certain
of the holders of such notes have declared such notes immediately due and
payable. Under the terms of such Acquisition Notes, so long as an event of
default under the senior credit facility continues, the holders of such notes
are required to forbear from taking any action to enforce the provisions of such
notes for periods of either 120 days or 180 days from the date of the default.

     We have certain contractual obligations in connection with certain
acquisitions due December 14, 2001 totaling approximately $12.1 million based on
the performance of our common stock. Principally as a result of our accumulated
operating losses and the default under the senior credit facility at September
30, 2001, we currently do not have the financial resources to make such payments
in cash. We are permitted to make such payments by issuing common stock, which
would be highly dilutive to our existing stockholders and constitute a change of
control of the Company, in which event we may be required to repay amounts
outstanding under the senior credit facility and the Senior Subordinated Notes,
as well as offer to redeem shares of our Series A and B preferred stock.

     Due to various cross-default provisions contained in certain of our other
debt and lease arrangements, an event of default under the senior credit
facility and/or our other debt obligations, may constitute a default under such
other arrangements giving the parties thereto the right to accelerate
outstanding amounts, terminate agreements and/or foreclose on collateral
underlying such obligations, which may include equipment, vehicles or
facilities.

     So long as the lenders under the senior credit facility do not foreclose on
their collateral and so long as our vendors continue to provide us with trade
credit as they have in the past and assuming we do not make additional debt
service payments when due, we believe that cash generated from operations will
be adequate to fund our operations, including our employees' salaries and wages,
trade vendor payments, equipment operating leases, facility rents, new store
openings and other operating costs. However, given current economic conditions,
there can be no assurance that we will have sufficient cash to fund such
activities.

     We have retained financial advisors to explore and evaluate our strategic
and restructuring alternatives. Under the terms of the senior credit facility
and the indenture governing the Senior Subordinated Notes, we are prohibited
from incurring any additional indebtedness. In addition, if we were to enter
into a transaction constituting a change of control, we may be required to repay
amounts outstanding under the senior credit facility and the Indenture, as well
as offer to redeem shares of our Series A and B preferred stock.

     If we do not effectively resolve our current default under our senior
credit facility, or if adequate funds are not available to retire our debt
obligations as they become due, our ability to continue as a going concern would
be impaired. At this time, we are considering all available options to address
our capital structure, which may include seeking protection under Chapter 11 of
the federal bankruptcy laws.

     In March 2001, we entered into an amendment to our senior credit facility
(the "First Amendment"), the terms of which included a waiver with respect to
certain financial covenants at December 31, 2000, a reduction in total
commitments and an increase in pricing. The First Amendment also changed certain
financial covenants based on our business plan for 2001. On the effective date
of the First Amendment, the total commitments were reduced from $925.0 million
to $850.0 million. In August 2001, we entered into a further amendment to our
senior credit facility (the "Second Amendment") to amend covenants for our net
worth and fixed charge coverage tests, which were previously set before we
finalized our restructuring and other charges and before taking into account the
impact of SFAS No. 133. Our senior credit facility now

                                        14
<PAGE>

consists of a $400.0 million term loan due July 2006 and a $450.0 million
revolving line of credit due July 2004, with quarterly caps on revolver
availability of between $364.0 million and $390.0 million until delivery of
financial statements for the fiscal quarter ending March 31, 2002 demonstrating
compliance with the financial covenants contained in the senior credit facility.
Pursuant to the Second Amendment, we will be required to pay down the term loan
by $53.7 million on December 1, 2001 instead of December 31, 2001. The
reductions in the total commitments and the term loan resulted in the write-off
of approximately $3.6 million in deferred financing costs during the first
quarter of 2001 included in interest expense in the accompanying unaudited
consolidated statement of operations. Borrowings under the revolving line of
credit bear interest at either the Fleet National Bank base rate plus a
percentage ranging from 0.50% to 2.50% or, at our option, the Eurodollar market
rate plus a percentage ranging from 1.75% to 4.50%. The term loan bears interest
at the base rate plus 2.00% to 2.50%, or at our option, the Eurodollar market
rate plus 3.25% to 4.50%. The percentage over the Eurodollar market rate and
base rate is based on our financial performance as measured by the senior funded
debt ratio, our senior secured debt rating and the total funded debt ratio. As
of September 30, 2001, the percentage over the Eurodollar market rate and base
rate for borrowings under our senior credit facility were 4.50% and 2.50%,
respectively. Following an event of default under our senior credit facility, we
no longer have the option to elect a Eurodollar market rate and all borrowings
under the senior credit facility will bear additional interest at a premium of
2.00% over the applicable rate. Our senior credit facility is secured by a
security interest in substantially all of our assets. Our senior credit facility
also imposes, among other covenants, a tangible assets to senior debt covenant,
a restriction on all of our retained earnings including the declaration and
payment of cash dividends and a restriction on the ratio of total and senior
funded debt to earnings before interest, income taxes, depreciation and
amortization. Until December 31, 2001, we are also subject to a quarterly and
cumulative limitation on our capital expenditures for rental and non-rental
equipment and for growth activities, and a quarterly and cumulative required
minimum earnings before interest, income taxes, depreciation and amortization.
For 2001, we are also required to generate proceeds from the sale of used
equipment and other asset sales in excess of our capital expenditures. As of
September 30, 2001, we were not in compliance with our financial covenants
specified in our senior credit facility and consequently were in default under
the terms of the senior credit facility. At September 30, 2001, $367.6 million
and $396.0 million were outstanding under the revolving line of credit and term
loan respectively.

     Our net cash used in operations was $51.4 million for the nine months ended
September 30, 2001 compared to net cash provided by operations of $77.5 million
for the same period in 2000. The decrease in cash provided by operations was
primarily due to a use of cash related to payments of accounts payable related
to prior year purchases of rental fleet. Net cash provided by investing
activities was $34.8 million for the nine months ended September 30, 2001,
primarily reflecting $18.1 million for purchases of rental equipment, $7.6
million for purchases of and improvements to property and equipment and $59.6
million of proceeds from the sale of both rental and non-rental equipment. Cash
used in financing activities was $8.2 million for the nine months ended
September 30, 2001 and was primarily a result of repayments of our senior credit
facility.

     In June 2001, the New York Stock Exchange notified us that our stock price
has been below the New York Stock Exchange's continued listing criteria for
minimum share price of $1.00 over a 30 day trading period. In addition, in
November 2001, the NYSE notified us that our market capitalization has been
below the NYSE's continued listing criteria for minimum market capitalization of
$15.0 million over a 30 day trading period. We will be subject to de-listing
procedures if our stock price and market capitalization do not reach and
maintain the NYSE minimum.

RESTRUCTURING ACTIVITIES

     During the fourth quarter of 2000, we implemented a plan to restructure
certain of our operations to address a significant imbalance between our revenue
and costs. During the first quarter of 2001, we

                                        15
<PAGE>

implemented additional actions to restructure certain of our operations. The
restructuring plan is comprised of the following major components:

     - the sale of excess rental equipment, which primarily relates to a portion
       of our heavy earthmoving equipment that has the highest unit cost,
       requires the most expensive support infrastructure and has the lowest
       return on investment;

     - the abandonment of certain information system projects that were under
       development;

     - the elimination of jobs company-wide and the consolidation of various
       departments within our organization; and

     - the closure of certain rental and office locations.

     Pursuant to our restructuring plan, during the fourth quarter of 2000, we
recorded a pre-tax restructuring charge of approximately $72.0 million and
during the first quarter of 2001, we recorded an additional pre-tax
restructuring charge of approximately $6.3 million. We reduced the charge
related to employee termination severance costs by approximately $0.2 million
during the second quarter of 2001. The components of these charges, along with
the 2001 activity related to these charges, are presented in the following table
(in thousands).

<Table>
<Caption>
                                RESERVE                                             RESERVE
                               BALANCE AT     AMOUNTS          DEDUCTIONS         BALANCE AT
                              DECEMBER 31,   CHARGED TO    -------------------   SEPTEMBER 30,
                                  2000         INCOME       CASH      NON-CASH       2001
                              ------------   ----------    -------    --------   -------------
<S>                           <C>            <C>           <C>        <C>        <C>
Rental fleet
  disposition.............      $36,491        $5,088      $    --    $(40,838)     $   741
Information systems
  abandonment.............          900            --         (679)         --          221
Employee termination
  severance costs.........        6,636           958       (5,017)         --        2,577
Facility closures.........        1,763            69         (351)        (69)       1,412
                                -------        ------      -------    --------      -------
                                $45,790        $6,115      $(6,047)   $(40,907)     $ 4,951
                                =======        ======      =======    ========      =======
</Table>

     The accrual for rental fleet disposition represents estimated losses on
assets held for sale at September 30, 2001 and includes losses related to the
sale of leased rental equipment. During the fourth quarter of 2000 and the nine
months ended September 30, 2001, we sold approximately 97.8% of the $155.6
million of original cost of the rental equipment that has been identified for
sale under the restructuring plan. We plan to sell the remaining rental
equipment by the end of the fourth quarter 2001 through sales to independent
third parties through auctions, brokers and retail sales.

     The remaining accrual for the information systems abandonment is for
contractual payments related to certain abandoned software which are expected to
be paid through 2001.

     The restructuring plan includes the termination and payment of related
severance benefits under our existing severance plan and agreements for
approximately 450 employees, all of whom had been terminated as of September 30,
2001. During the second quarter of 2001, we modified our restructuring plan to
reduce the number of employees to be terminated under the plan. Such
modification resulted in a net reduction of approximately 80 employees which
were to be terminated and was primarily due to changes to the store closure
restructuring plan described below, normal employee attrition and the retention
of certain employees. As a result of the modification, the previously recorded
charge was reduced by approximately $0.2 million during the second quarter of
2001. Payments are expected to be paid through the third quarter of 2003.

     During the second quarter of 2001, we modified our restructuring plan
related to facility closures, primarily as a result of changes to our planned
openings of NationsRent rental centers within select Lowe's home improvement
stores (see -- "New Stores"). As a result of the changes to the restructuring
plan, three of the rental facilities originally identified for closure will
remain open and one additional rental facility was identified for closure. The
impact of such changes was not material to the original restructuring charge
recorded for store closures. All 16 stores that have been identified for closure
under the restructuring plan, as modified, have been closed as of September 30,
2001. Lease payments for the facility closures extend into

                                        16
<PAGE>

2009. Although we intend to aggressively market these locations for subleases on
acceptable terms, the ultimate time required to obtain acceptable subleases may
extend beyond our estimates. We have other rental locations in the geographic
markets where the facility closures are taking place. We believe that revenue
and results of operations related to the closed locations will be retained by
these other rental locations in the same geographic markets.

NEW STORES

     In October 2000, we entered into an exclusive multi-year strategic alliance
with Lowe's Companies, Inc., the world's second largest home improvement
retailer, to operate NationsRent rental centers within select Lowe's home
improvement stores. Operating as a store within a store adjacent to the entrance
of a Lowe's store, the NationsRent stores will rent our full line of
construction tools and equipment to Lowe's customers. We will lease these rental
centers from Lowe's for terms initially expiring in 2008 with two five-year
renewal options. The Lowe's strategic alliance has and will require us to
accelerate investments in systems, training, brand support and other store
start-up costs. As of November 2001, we operated 40 NationsRent rental centers
at Lowe's locations. Our new store growth during the next several years will
concentrate on our strategic alliance with Lowe's to open and operate
NationsRent rental centers in select Lowe's locations. However, given our recent
financial performance, there can be no assurance that our relationship with
Lowe's will not be impaired.

HISTORICAL RESULTS OF OPERATIONS

  Three and Nine Months Ended September 30, 2001 and 2000

     Revenue.  The following table sets forth our revenue by type for the three
and nine months ended September 30, 2001 and 2000 (in thousands, except
percentages):

<Table>
<Caption>
                               THREE MONTHS ENDED SEPTEMBER 30,           NINE MONTHS ENDED SEPTEMBER 30,
                             -------------------------------------     -------------------------------------
                                   2001                 2000                 2001                 2000
                             ----------------     ----------------     ----------------     ----------------
<S>                          <C>        <C>       <C>        <C>       <C>        <C>       <C>        <C>
Equipment rentals..........  $140,309    88.9%    $155,774    84.4%    $384,021    82.7%    $407,625    82.0%
Sales of equipment,
  merchandise, service,
  parts and supplies.......    17,547    11.1       28,803    15.6       80,449    17.3       89,636    18.0
                             --------   -----     --------   -----     --------   -----     --------   -----
                             $157,856   100.0%    $184,577   100.0%    $464,470   100.0%    $497,261   100.0%
                             ========   =====     ========   =====     ========   =====     ========   =====
</Table>

     Total revenue decreased $26.7 million, or 14.5% and $32.8 million, or 6.6%
for the three and nine months ended September 30, 2001, respectively, when
compared to the same periods in 2000. Rental revenue decreased $15.5 million, or
9.9% and $23.6 million, or 5.8% for the three and nine months ended September
30, 2001, respectively, when compared to the same periods in 2000. As discussed
above, during the fourth quarter of 2000, we implemented a plan to significantly
restructure our operations. The restructuring plan resulted in the disposal of
approximately 12% of our rental fleet and the repositioning of approximately 27%
of our remaining rental fleet amongst the markets we serve. In addition, we
terminated approximately 13% of our employees and closed approximately 8% of our
locations. The restructuring of our operations caused a significant amount of
internal disruptions as we disposed of and repositioned our fleet, with certain
markets being severely impacted by the shift in rental fleet mix from heavy
earth moving equipment to general rental equipment. These factors, coupled with
the slowing economy and adverse weather have contributed to the decrease in our
revenue from the prior year. In addition, during 2000 we divested certain
non-core businesses.

     Sales of equipment, merchandise, service, parts and supplies during the
three and nine months ended September 30, 2001 include revenue of $3.5 million
and $41.6 million, respectively, from the sale of rental fleet pursuant to our
restructuring plan discussed above. Such revenue was recorded at no gross
profit.

     Gross Profit.  Gross profit decreased $22.6 million and $62.2 million for
the three and nine months ended September 30, 2001, respectively, when compared
to the same periods in 2000. Gross profit as a

                                        17
<PAGE>

percentage of total revenue was 30.1% and 29.5% for the three and nine months
ended September 30, 2001, respectively, compared to 38.0% and 40.1% for the same
periods in 2000.

     The decrease in gross profit for the three and nine months ended September
30, 2001 when compared to the same periods in 2000 was primarily due to an
increase in costs associated with the new stores opened in 2000, an increase in
insurance expense, additional property taxes, decreased sales of used equipment
in the ordinary course of business, an increase in costs associated with our
delivery fleet and the decrease in rental revenue.

     Operating Expenses.  Selling, general and administrative expenses decreased
$3.9 million and $11.9 million for the three and nine months ended September 30,
2001, respectively, when compared to the same periods in 2000. Selling, general
and administrative expenses were positively impacted by cost reductions made
pursuant to our restructuring plan discussed above, offset by approximately $1.4
million of charges related to the renegotiation of certain contracts and
professional fees and an increase in the allowance for doubtful accounts.
Selling, general and administrative expenses as a percentage of total revenue
were 18.3% and 16.7% for the three and nine months ended September 30, 2001,
respectively, compared to 17.8% and 18.0% for the same periods in 2000. The
increase in selling, general and administrative expenses as a percentage of
total revenue for the three months ended September 30, 2001 was a result of an
increase in the allowance for doubtful accounts. The decrease in selling,
general and administrative expenses as a percentage of total revenue for the
nine months ended September 30, 2001 was primarily a result of the reduction in
expense discussed above.

     Also included in operating expenses for the nine months ended September 30,
2001 is a $6.1 million charge for restructuring discussed above.

     Non-rental equipment depreciation and amortization increased $1.7 million
and $6.2 million for the three and nine months ended September 30, 2001,
respectively, when compared to the same periods in 2000. This increase is
primarily related to an increase in goodwill amortization for businesses
acquired in early 2000 and an increase in depreciation expense related to
improvements made to our rental locations.

     Operating Income.  Operating income decreased $20.4 million and $62.7
million for the three and nine months ended September 30, 2001, respectively,
when compared to the same periods in 2000. The reduction in operating income was
primarily related to the factors discussed above.

     Other Income and Expense.  Interest expense increased $1.2 million and
$17.5 million for the three and nine months ended September 30, 2001 when
compared to the same periods in 2000. This increase was due primarily to a $3.6
million charge for the write-off of deferred financing costs in connection with
the amendment to our senior credit facility entered into in March 2001
(see -- "Liquidity and Capital Resources"), a $1.9 million charge for the change
in value of our interest rate swap agreements (see -- "Impact of Recently Issued
Accounting Standards") and an increase in the interest rates charged on the
variable portion of our bank debt. Interest expense is primarily attributable to
borrowings under our senior credit facility, notes issued to finance the
purchase of equipment, subordinated convertible notes issued to sellers of
businesses we acquired and our senior subordinated notes.

     Income Taxes.  For the nine months ended September 30, 2001, we recognized
a tax benefit only to the extent that we had deferred income tax liabilities
recorded on our balance sheet.

     Cumulative Effect of Change in Accounting Principle.  Effective January 1,
2001, we adopted Statement of Financial Accounting Standard No. 133, "Accounting
for Derivative Instruments and Hedging Activities," as amended ("SFAS No. 133").
The adoption of SFAS No. 133 resulted in an after tax charge of $1.4 million as
a cumulative effect of change in accounting principle for the nine months ended
September 30, 2001. See -- "Impact of Recently Issued Accounting Standards."

     Net Income (Loss).  Net income decreased $21.0 million and $61.8 million
for the three and nine months ended September 30, 2001, respectively, when
compared to the same periods in 2000. The decrease in net income was primarily a
result of the factors discussed above.

                                        18
<PAGE>

SEASONALITY AND FLUCTUATIONS IN OPERATING RESULTS

     Our revenue and income are dependent upon activity in the construction
industry in the markets we serve. Construction activity is dependent upon
weather and other seasonal factors affecting construction in the geographic
areas where we have operations. Because of this variability in demand, our
quarterly revenue may fluctuate, and revenue for the first quarter of each year
can be expected to be lower than the remaining quarters. Although we believe
that the historical trend in quarterly revenue for the second, third and fourth
quarters of each year is generally higher than the first quarter, there can be
no assurance that this will occur in future periods. Accordingly, quarterly or
other interim results should not be considered indicative of results to be
expected for any other quarter or for a full year.

     Operating results may fluctuate due to other factors including, but not
limited to:

     - changes in general economic conditions including changes in national,
       regional or local construction or industrial activities;

     - the timing of acquisitions and opening of new locations;

     - the timing of expenditures for new rental equipment and the disposition
       of used equipment;

     - competitive pricing pressures; and

     - changes in interest rates.

     We will incur significant expenses in opening new locations, such as
employee training, marketing and facility set-up costs. Initially, new locations
may generate lower operating margins than established locations and may operate
at a loss for a period of time. Our new locations have, on average, achieved
profitability within approximately three to six months of their opening. In
addition, when we purchase new rental equipment, the depreciation related to
such equipment may contribute to near-term margin decline, because such
equipment may not initially generate revenue at a rate that is sufficient to
match such increased depreciation expense. As such, the opening of new rental
locations and the purchase of new equipment to expand our current rental
equipment inventory may reduce our operating margins during a start-up period.

INFLATION

     We do not believe that inflation has been a significant factor to the cost
of our operations.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

     Effective January 1, 2001, we adopted SFAS No. 133. This statement
establishes accounting and reporting standards for derivative instruments and
hedging activities. Under SFAS No. 133, all derivatives must be recognized as
assets or liabilities and measured at fair value. If the derivative is
designated as a cash flow hedge, the effective portions of changes in the fair
value of the derivative are recorded in other comprehensive income (loss) and
are recognized in the statement of operations when the hedged item affects
earnings. Ineffective portions of changes in the fair value of cash flow hedges
are recognized in earnings.

     The use of interest rate risk management instruments, such as swaps, is
required under the terms of our senior credit facility. We have developed and
implemented a policy to maintain the percentage of fixed and variable debt
within certain parameters. Through the use of swaps, we limit our exposure to
and benefits from interest rate fluctuations on variable rate debt to within a
certain range of rates. At September 30, 2001, the amount covered by swaps was
$195.0 million, with effective interest rates between 6.58% and 6.80%. We
recognize derivatives on the balance sheet at fair value, representing a
liability of approximately $4.2 million as of September 30, 2001 which is
included in other accrued liabilities in the accompanying unaudited consolidated
balance sheet. We determined the interest rate swaps to be ineffective cash flow
hedges, as defined by SFAS No. 133. In accordance with the transition provisions
of SFAS No. 133, we recorded a $1.4 million charge net of income tax expense or
$0.02 per share, which is recorded in the unaudited consolidated statement of
operations for the nine months ended September 30, 2001 as a cumulative effect
of change in accounting principle. The impact of the change in value of our
swaps for the nine months ended September 30, 2001 resulted in a charge to
interest expense of $1.9 million.

                                        19
<PAGE>

     In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 141, "Business Combinations" ("SFAS No.
141"), and No. 142, "Goodwill and Other Intangible Assets" ("SFAS No. 142").
SFAS No. 141 requires that the purchase method of accounting be used for all
business combinations initiated after June 30, 2001. SFAS No. 141 also specifies
criteria that intangible assets acquired in a purchase method business
combination must meet to be recognized and reported apart from goodwill, noting
that any purchase price allocable to an assembled workforce may not be accounted
for separately. SFAS No. 142 will require that goodwill and intangible assets
with indefinite useful lives no longer be amortized, but instead be tested for
impairment at least annually in accordance with the provisions of SFAS No. 142.
SFAS No. 142 will also require that intangible assets with definite useful lives
be amortized over their respective estimated useful lives to their estimated
residual values, and be reviewed for impairment in accordance with SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of" ("SFAS No. 121").

     We are required to adopt the provisions of SFAS No. 141 immediately and
SFAS No. 142 effective January 1, 2002. Goodwill and intangible assets acquired
in business combinations completed before July 1, 2001 will continue to be
amortized until the adoption of SFAS No. 142.

     Upon adoption of SFAS No. 142, we are required to evaluate our existing
intangible assets and goodwill that were acquired in prior purchase business
combinations and to make any necessary reclassifications in order to conform
with the new criteria in SFAS No. 141 for recognition apart from goodwill. Upon
adoption of SFAS No. 142, we will be required to reassess the useful lives and
residual values of all intangible assets (other than goodwill) acquired in
purchase business combinations. In addition, to the extent an intangible asset
is identified as having an indefinite useful life, we will be required to test
the intangible asset for impairment in accordance with the provisions of SFAS
No. 142 within the first interim period. Any impairment loss will be measured as
of the date of adoption and recognized as the cumulative effect of a change in
accounting principle in the first interim period.

     In connection with the transitional goodwill impairment evaluation, SFAS
No. 142 will require us to perform an assessment of whether there is an
indication that goodwill is impaired as of the date of adoption. To accomplish
this, we must identify our reporting units and determine the carrying value of
each reporting unit by assigning the assets and liabilities, including the
existing goodwill and intangible assets, to those reporting units as of the date
of adoption. We will then have up to six months from the date of adoption to
determine the fair value of each reporting unit and compare it to the reporting
unit's carrying amount. To the extent a reporting unit's carrying amount exceeds
its fair value, an indication exists that the reporting unit's goodwill may be
impaired and we must perform the second step of the transitional impairment
test. In the second step, we must compare the implied fair value to all of our
assets (recognized and unrecognized) and liabilities in a manner similar to a
purchase price allocation in accordance with SFAS No. 141, to its carrying
amount, both of which would be measured as of the date of adoption. Any
transitional impairment loss will be recognized as the cumulative effect of a
change in accounting principle in our statement of operations.

     As of the date of adoption, we expect to have unamortized goodwill in the
amount of approximately $766.0 million, which will be subject to the transition
provisions of SFAS No. 141 and 142. Amortization expense related to goodwill was
approximately $20.2 million and $15.5 million for the twelve months ended
December 31, 2000 and nine months ended September 30, 2001, respectively.

     Because of the extensive effort needed to comply with adopting SFAS No. 142
and because the fair values have to be determined at the date of adoption, it is
not practicable to reasonably estimate the impact of adopting this statement on
our financial statements at the date of this report, however, we anticipate that
we will record a significant transitional impairment loss as the cumulative
effect of a change in accounting principle.

     In August 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets" ("SFAS No. 144"). SFAS No. 144 supercedes SFAS
No. 121 and APB Opinion No. 30, "Reporting the Results of Operations --
Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions." SFAS No. 144
establishes an accounting model based on SFAS No. 121
                                        20
<PAGE>

for long-lived assets to be disposed of by sale, previously accounted for under
APB Opinion No. 30. This statement is effective for fiscal years beginning after
December 15, 2001. We are currently assessing the impact of the adoption of this
statement, but believe it will not materially affect our financial position or
results of operations.

FACTORS THAT MAY AFFECT FUTURE RESULTS

     Certain statements and information in this Quarterly Report on Form 10-Q
may include "forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, including in particular the statements about
our plans, strategies and prospects under the heading "Management's Discussion
and Analysis of Financial Condition and Results of Operations." These statements
are based on our current plans and expectations and involve risks and
uncertainties that could cause actual future activities and results to be
materially different from those set forth in these forward-looking statements.
Important factors that could cause actual results to differ materially from our
forward-looking statements are set forth below and elsewhere in this Quarterly
Report on Form 10-Q. Such factors include, among others:

     - The recent default under our senior credit facility, which may allow our
       senior lenders to accelerate all amounts outstanding under the senior
       credit facility and declare such amounts immediately due and payable.
       Since our senior credit facility is secured by substantially all of our
       assets, if our senior lenders were to foreclose on their collateral, we
       may not be able to continue to operate our business and after satisfying
       all amounts due under the senior credit facility, it is unlikely that
       there would be sufficient amounts remaining to satisfy all of our other
       creditors;

     - The failure to make debt service payments, which may allow the holders of
       our debt to file an involuntary petition against us under the United
       States bankruptcy laws;

     - The availability of additional capital, which affects our ability to
       operate our business while we explore our strategic and restructuring
       alternatives;

     - Our financial condition may affect our ability to retain and motivate our
       employees and to obtain sufficient trade credit to operate our business;.

     - Our financial condition may also cause our customers to curtail their
       business with us and may make it more difficult to collect amounts owed
       to us on a timely basis or at all;

     - The recent restructuring of our business may not improve our results of
       operations or profitability;

     - Our business is dependent on changes in construction and industrial
       activities;

     - A continued downturn in the economy, or construction spending in
       particular, could further decrease demand for our equipment and drive
       down rental rates;

     - The equipment rental industry is highly competitive;

     - Our revenue and operating results are likely to continue to fluctuate
       from quarter to quarter;

     - The price of our common stock is subject to volatility and may be subject
       to delisting from the New York Stock Exchange if we do not meet certain
       continued listing requirements;

     - Actions taken by our senior lenders or us as a result of our liquidity
       issues may adversely impact the recoverability of our asset carrying
       values; and

     - Other risks and uncertainties described in our other filings with the
       Securities and Exchange Commission, including our Annual Report on Form
       10-K for the year ended December 31, 2000.

     We make no commitment to disclose any revisions to forward-looking
statements, or any fact, events or circumstances after the date hereof that may
bear upon forward-looking statements.

                                        21
<PAGE>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Our exposure to market risk is limited primarily to the fluctuating
interest rates associated with our variable rate indebtedness. Our variable
interest rates are subject to interest rate changes in the United States and the
Eurodollar market. At September 30, 2001, we had $806.7 million of variable rate
indebtedness, representing approximately 72.1% of our total debt outstanding, at
an average interest rate of 9.04%. In January 2000, we entered into a two-year
modified interest rate swap contract to hedge the impact of interest rate
fluctuations on certain variable rate debt. In September 2000, we entered into
two additional two-year modified interest rate swap contracts. We do not hold or
issue derivative financial instruments for trading or speculative purposes. The
January 2000 interest rate swap fixes the Eurodollar interest rate at 6.80% on
$165.0 million of variable rate debt through January 30, 2002. The September
2000 interest rate swaps fix the Eurodollar interest rate at 6.59% and 6.58% on
each $15.0 million of variable rate debt, respectively, through October 3, 2002.
The interest differential is paid or received on a monthly basis and recognized
as a component of interest expense. The counterparties to the swaps are major
financial institutions and management believes that the risk of incurring credit
losses is remote.

                                        22
<PAGE>

                          PART II -- OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

(C) RECENT SALES OF UNREGISTERED SECURITIES

     During the period from July 1, 2001 through September 30, 2001, we issued
securities in the transactions set forth below. Each of these transactions was
intended to be exempt from the registration requirements of the Securities Act
of 1933, as amended, by virtue of Section 4(2) thereunder based on being issued
in a transaction not involving a public offering.

     From July 1, 2001 through September 30, 2001, we granted options to certain
of our employees to purchase an aggregate of 265,000 shares of Common Stock at
exercise prices ranging from $0.19 to $0.46 per share. These options generally
vest over a four year period at the rate of 25% per year beginning on the first
anniversary of the date of grant.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     (a) As of September 30, 2001, the Company was not in compliance with its
financial covenants specified in its Senior Revolving Credit and Term Loan
Facility. For a more detailed discussion, see Part I -- Item 2. "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

                                        23
<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(A) EXHIBITS

<Table>
<Caption>
EXHIBIT
NUMBER                                 DESCRIPTION
-------                                -----------
<S>      <C>   <C>
 3.1      --   Amended and Restated Certificate of Incorporation of the
               Company.(2)
 3.2      --   Amended and Restated By-Laws of the Company.(1)
 3.3      --   Certificate of Designation for Series A Convertible
               Preferred Stock.(6)
 3.4      --   Certificate of Amendment to Certificate of Designation for
               Series A Convertible Preferred Stock.(5)
 3.5      --   Certificate of Designation for Series B Convertible
               Preferred Stock.(7)
 4.1      --   Unregistered 10 3/8% Global Senior Subordinated Notes due
               2008.(4)
 4.2      --   Registered 10 3/8% Senior Subordinated Notes due 2008.(4)
 4.3      --   Senior Subordinated Guarantee dated December 11, 1998, of
               the Guarantors as defined therein.(4)
 4.4      --   Indenture, dated December 11, 1998, by and among Company,
               the Guarantors and The Bank of New York.(4)
 4.5      --   Registration Rights Agreement, dated December 11, 1998, by
               and among the Company, the Guarantors and the Initial
               Purchasers as defined therein.(4)
 4.6      --   Fifth Amended and Restated Revolving Credit and Term Loan
               Agreement, dated as of August 2, 2000, by and among the
               Company, certain of its subsidiaries, Fleet National Bank
               (f/k/a BankBoston, N.A.) and the other lending institutions
               party thereto, Fleet National Bank, as administrative agent,
               Bankers Trust Company, as syndication agent, and Scotiabanc
               Inc., as documentation agent.(7)
 4.7      --   Second Amended Restated Security Agreement, dated as of
               August 2, 2000, between the Company, certain of its
               subsidiaries, and Fleet National Bank (f/k/a BankBoston,
               N.A.), as administrative agent.(7)
 4.8      --   First Amendment to the Fifth Amended and Restated Revolving
               Credit and Term Loan Agreement and to the Second Amended and
               Restated Security Agreement, dated as of March 14, 2001, by
               and among the Company, certain of its subsidiaries, Fleet
               National Bank (f/k/a BankBoston, N.A.) and the other lending
               institutions party thereto, Fleet National Bank, as
               administrative agent, Bankers Trust Company, as syndication
               agent, and Scotiabanc Inc., as documentation agent.(8)
 4.9      --   Second Amendment to the Fifth Amended and Restated Revolving
               Credit Agreement and Term Loan Agreement, dated as of August
               10, 2001, by and among the Company, certain of its
               subsidiaries, the lending institutions party thereto, Fleet
               National Bank (f/k/a BankBoston, N.A.), as administrative
               agent, Bankers Trust Company, as syndication agent, and The
               Bank of Nova Scotia, as documentation agent.(9)
10.1      --   Stock Purchase Agreement, dated August 15, 1997, by and
               among the Company, Sam's and the shareholders of Sam's,
               together with Amendment Nos. 1-6.(1)
10.2      --   Form of Unsecured Subordinated Promissory Note -- Sam's.(1)
10.3      --   Form of Unsecured Convertible Promissory Note -- Sam's.(1)
10.4      --   Form of Unsecured Contingent Convertible Subordinated
               Promissory Note -- Sam's.(1)
10.5      --   Agreement, dated September 22, 1997, between the Company and
               Gary L. Gabriel.(1)
10.6      --   Asset Purchase Agreement, dated December 8, 1997, by and
               among NationsRent of Ohio, Inc., R&R Rental, Inc. ("R&R")
               and the sole shareholder of R&R, together with an Amendment
               dated December 10, 1997.(1)
</Table>

                                        24
<PAGE>

<Table>
<Caption>
EXHIBIT
NUMBER                                 DESCRIPTION
-------                                -----------
<S>      <C>   <C>
10.7      --   Form of Unsecured Subordinated Promissory Note -- R&R.(1)
10.8      --   Asset Purchase Agreement, dated December 8, 1997, as
               amended, among NationsRent of Indiana, Inc. and C&E Rental
               and Service, Inc. ("C&E"), together with an Amendment dated
               December 23, 1997.(1)
10.9      --   Form of Unsecured Convertible Subordinated Promissory Note
               C&E.(1)
10.10     --   Stock Purchase Agreement, dated December 20, 1997, as
               amended, among NationsRent of West Virginia, Inc., Titan,
               together with an Amendment dated December 31, 1997.(1)
10.11     --   Form of Unsecured Convertible Subordinated Promissory
               Note -- Titan.(1)
10.12     --   Stock Purchase Agreement, dated March 24, 1998, among the
               Company, Bode-Finn Limited Partnership ("Bode-Finn") and the
               shareholders of Bode-Finn, together with Amendment No. 1,
               dated April 6, 1998, and Amendment No. 2, dated April 17,
               1998.(1)
10.13     --   Form of Unsecured Convertible Subordinated Promissory Note
               -- Bode-Finn.(1)
10.14     --   Form of Warrant -- Bode-Finn.(1)
10.15     --   Registration Rights Agreement, dated May 5, 1998, among the
               Company, Bode-Finn, and Raymond E. Mason Foundation.(1)
10.16     --   Asset Purchase Agreement, dated March 25, 1998, among
               NationsRent of Indiana, Inc., RFL, Enterprises, Inc. and the
               sole shareholder of RFL Enterprises, Inc. ("RFL").(1)
10.17     --   Asset Purchase Agreement, dated April 21, 1998, among
               NationsRent of Florida, Inc. and Naples Rent-All and Sales
               Company, Inc. ("Naples").(1)
10.18     --   Form of Unsecured Convertible Subordinated Promissory
               Note -- Naples.(1)
10.19     --   Stock Purchase Agreement, dated May 7, 1998, among the
               Company, Raymond Equipment Co. ("Raymond Equipment") and the
               shareholders of Raymond Equipment.(1)
10.20     --   Form of Unsecured Subordinated Promissory Notes -- Raymond
               Equipment.(1)
10.21     --   Form of Unsecured Convertible Subordinated Promissory
               Note -- Raymond Equipment.(1)
10.22     --   Asset Purchase Agreement, dated May 14, 1998, among the
               Company and General Rental, Inc.(1)
10.23     --   Stock Purchase Agreement, dated May 30, 1998, among the
               Company, J. Kelly Co., Inc. ("J. Kelly") and the
               shareholders of J. Kelly.(1)
10.24     --   Form of Unsecured convertible Subordinated Promissory
               Note -- J. Kelly.(1)
10.25     --   Form of Registration Rights Agreement among the Company and
               the shareholders of J. Kelly.(1)
10.26     --   Asset Purchase Agreement, dated June 7, 1998, among the
               Company, Associated Rental Equipment Management Company,
               Inc. ("Associated") and the sole shareholder of
               Associated.(1)
10.27     --   Form of Unsecured Convertible Subordinated Promissory
               Note -- Associated.(1)
10.28     --   Form of Registration Rights Agreement -- Associated.(1)
10.29     --   Form of Subscription Agreement, dated May 1998, between the
               Company and certain subscribers.(1)
10.30     --   NationsRent Third Amended and Restated 1998 Stock Option
               Plan.(9)
10.31     --   Form of Stock Option Agreement.(1)
10.32     --   Amended and Restated Purchase Agreement, dated as of
               September 9, 1998, by and among NationsRent, Inc., Ray L.
               O'Neal, Inc., Arenco, L.L.C., Don R. O'Neal, Elizabeth M.
               O'Neal and the O'Neal Revocable Trust dated December 29,
               1987.(3)
</Table>

                                        25
<PAGE>

<Table>
<Caption>
EXHIBIT
NUMBER                                 DESCRIPTION
-------                                -----------
<S>      <C>   <C>
10.33     --   Unsecured Convertible Subordinated Promissory Note, dated as
               of October 23, 1998, from the Company to Ray L. O'Neal,
               Inc.(3)
10.34     --   Preferred Stock Purchase Agreement, dated July 20, 1999, by
               and among the Company, NR Holdings Limited and NR
               Investments Limited.(6)
10.35     --   Registration Rights Agreement, dated as of July 20, 1999, by
               and between the Company, NR Holdings Limited, NR Investments
               Limited, James L. Kirk and H. Wayne Huizenga.(6)
10.36     --   Preferred Stock Purchase Agreement, dated August 2, 2000, by
               and among the Company, NR2 Holdings Limited, DB Capital
               Investors, L.P., J.P. Morgan Capital Corporation and Sixty
               Wall Street Fund, L.P.(7)
10.37     --   Registration Rights Agreement, dated as of August 2, 2000,
               by and among the Company, NR2 Holdings Limited, DB Capital
               Investors, L.P., J.P. Morgan Capital Corporation, Sixty Wall
               Street Fund, L.P., James L. Kirk and H. Wayne Huizenga and
               holders of the Series A Convertible Preferred Stock.(7)
10.38     --   Form of Change in Control Severance Agreement.(8)
</Table>

---------------

(1) Incorporated by reference to the Company's Registration Statement on Form
    S-1, as amended, Commission File No. 333-56233.
(2) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for
    the period ended June 30, 1998.
(3) Incorporated by reference to the Company's Current Report on Form 8-K filed
    on November 9, 1998.
(4) Incorporated by reference to the Company's Registration Statement on Form
    S-4, Commission File No. 333-69691.
(5) Incorporated by reference to the Company's Registration Statement on Form
    S-3, Commission File No. 333-88603.
(6) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for
    the period ended June 30, 1999.
(7) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for
    the period ending June 30, 2000.
(8) Incorporated by reference to the Company's Annual Report on Form 10-K for
    the year ended December 31, 2000.
(9) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for
    the period ending June 30, 2001.

     (B) REPORTS ON FORM 8-K

     The Company filed a Current Report on Form 8-K on August 31, 2001 relating
to an amendment to the Company's Amended and Restated Bylaws.

                                        26
<PAGE>

                                   SIGNATURES

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

                                          NATIONSRENT, INC.

<Table>
<S>                                                      <C>
Date: November 14, 2001                                  By: /s/ JAMES L. KIRK
                                                                            -------------------------------------
                                                                            James L. Kirk
                                                                            Chairman of the Board and Chief
                                                                            Executive Officer
                                                                            (Duly Authorized Officer)

Date: November 14, 2001                                  By: /s/ EZRA SHASHOUA
                                                                           --------------------------------------
                                                                           Ezra Shashoua
                                                                           Executive Vice President and Chief
                                                                           Financial Officer
                                                                           (Principal Financial Officer)

Date: November 14, 2001                                  By: /s/ KRIS E. HANSEL
                                                                           --------------------------------------
                                                                           Kris E. Hansel
                                                                           Vice President and Controller
                                                                           (Principal Accounting Officer)
</Table>

                                        27