##### Table of Contents









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 March 31,
2003

OR

|     |                                                         
|---- | --------------------------------------------------------
|[  ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934


For the transition period from

to
.



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Commission file number 001-14299



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NATIONSRENT, INC.

(Debtor-In-Possession as of December 17,
2001)


(Exact name of registrant as specified in its
charter)


|                                                                                             |  |                                                   
|-------------------------------------------------------------------------------------------- |  | --------------------------------------------------
|Delaware(State or other Jurisdiction of
    Incorporation or Organization)                   |  | 31-1570069(I.R.S. Employer
    Identification No.)
|                                                                                            
|450 East Las Olas Blvd.,
    Fort Lauderdale, FL(Address of principal executive
    offices) |  | 33301(Zip Code)                                   

(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 o

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

The number of shares of Common Stock, par value
$0.01 per share, outstanding on April 30, 2003 was
57,364,437.









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TABLE OF CONTENTS



|                                                  |                                                                                               |                                                      |  |  |  |  |  | 
|------------------------------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION                   
|                                                  | Item 1. Financial Statements                                                                 
|                                                  |                                                                                               | CONSOLIDATED BALANCE SHEETS                         
|                                                  |                                                                                               | UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS     
|                                                  |                                                                                               | UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                                                  |                                                                                               | NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|                                                  | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                  | Item 3.  Quantitative and Qualitative Disclosures About Market Risk                          
|                                                  | Item 4.  Controls and Procedures                                                             
|PART II  OTHER INFORMATION                      
|                                                  | Item 1.  Legal Proceedings                                                                   
|                                                  | Item 3.  Defaults Upon Senior Securities                                                     
|                                                  | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                                       
|                                                  | CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002                     
|EX-2.1 First Amended Joint Plan of Reorganization
|EX-2.2 Modifications to Joint Plan of Reorg.     
|EX-10.5 Term Sheet Re: Equipment Settlement      
|EX-99.3 Certification of C.E.O.                  
|EX-99.4 Certification of C.F.O.                  



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##### Table of Contents



NATIONSRENT, INC.

INDEX TO QUARTERLY REPORT

ON FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2003

PART I

FINANCIAL INFORMATION


|                                                                                                      |                                                                                                        |        |    |   | 
|----------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------ | ------ | -- | - | 
|                                                                                                      |                                                                                                        | Page  
|                                                                                                      |                                                                                                        | Number
|                                                                                                      |                                                                                                        |       
|Item 1. Financial Statements                                                                          |                                                                                                        |        |    |  
|                                                                                                      | Consolidated Balance Sheets as of March 31,
2003 (Unaudited) and December 31, 2002                     |        |    | 1 | 
|                                                                                                      | Unaudited Consolidated Statements of Operations
    for the Three Months Ended March 31, 2003 and 2002 |        |    | 2 | 
|                                                                                                      | Unaudited Consolidated Statements of Cash Flows
    for the Three Months Ended March 31, 2003 and 2002 |        |    | 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                                |                                                                                                        |        | 21 |  
|Item 4. Controls and Procedures                                                                       |                                                                                                        |        | 21 |  
|PART II
    OTHER INFORMATION                                                                        
|Item 1. Legal Proceedings                                                                             |                                                                                                        |        | 22 |  
|Item 3. Defaults Upon Senior Securities                                                               |                                                                                                        |        | 22 |  
|Item 6. Exhibits and Reports on
    Form 8-K                                                          |                                                                                                        |        | 23 |  
|Signatures                                                                                            |                                                                                                        |        | 26 |  
|Certifications Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002                              |                                                                                                        |        | 27 |  



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##### Table of Contents






PART I  FINANCIAL
INFORMATION




Item 1. Financial
Statements

NATIONSRENT, INC.

(Debtor-In-Possession as of December 17,
2001)





CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share Data)


|                                           |                                                                                                                                                                           |                                                                                                                                                            |                                             |              |            |           |           |        |            |           |  
|------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------- | ------------ | ---------- | --------- | --------- | ------ | ---------- | --------- | -
|                                           |                                                                                                                                                                           | March 31,                                                                                                                                                  |                                             | December 31,
|                                           |                                                                                                                                                                           | 2003                                                                                                                                                       |                                             | 2002        
|                                           |                                                                                                                                                                           |                                                                                                                                                            |                                             |             
|                                           |                                                                                                                                                                           | (Unaudited)                                                                                                                                                |                                             |             
|ASSETS                                    
|Cash and cash equivalents                  |                                                                                                                                                                           | $                                                                                                                                                          | 13,697                                      |              |            | $         | 6,940     |       
|Accounts receivable, net                   |                                                                                                                                                                           |                                                                                                                                                            | 62,243                                      |              |            |           | 69,376    |       
|Inventories                                |                                                                                                                                                                           |                                                                                                                                                            | 21,872                                      |              |            |           | 20,196    |       
|Prepaid expenses and other assets          |                                                                                                                                                                           |                                                                                                                                                            | 14,671                                      |              |            |           | 20,577    |       
|Deferred financing costs, net              |                                                                                                                                                                           |                                                                                                                                                            | 15,557                                      |              |            |           | 15,582    |       
|Rental equipment, net                      |                                                                                                                                                                           |                                                                                                                                                            | 368,310                                     |              |            |           | 348,852   |       
|Property and equipment, net                |                                                                                                                                                                           |                                                                                                                                                            | 78,700                                      |              |            |           | 80,146    |       
|                                           |                                                                                                                                                                           |                                                                                                                                                            |                                             |              |            |           |           |       
|                                           |                                                                                                                                                                           |                                                                                                                                                            | Total Assets                                |              | $          | 575,050   |           |        | $          | 561,669   |  
|                                           |                                                                                                                                                                           |                                                                                                                                                            |                                             |              |            |           |           |       
|LIABILITIES AND STOCKHOLDERS
    DEFICIT 
|Liabilities Not Subject to Compromise:     |                                                                                                                                                                           |                                                                                                                                                            |                                             |              |            |           |           |       
|                                           | Accounts payable                                                                                                                                                          |                                                                                                                                                            | $                                           | 18,248       |            |           | $         | 20,853 |           
|                                           | Accrued compensation and related taxes                                                                                                                                    |                                                                                                                                                            |                                             | 7,546        |            |           |           | 5,257  |           
|                                           | Accrued expenses and other liabilities                                                                                                                                    |                                                                                                                                                            |                                             | 31,277       |            |           |           | 36,233 |           
|                                           | Debt (Note 4)                                                                                                                                                             |                                                                                                                                                            |                                             | 77,101       |            |           |           | 14,228 |           
|                                           | Income taxes payable                                                                                                                                                      |                                                                                                                                                            |                                             | 63           |            |           |           | 66     |           
|                                           |                                                                                                                                                                           |                                                                                                                                                            |                                             |              |            |           |           |       
|                                           |                                                                                                                                                                           |                                                                                                                                                            | Total liabilities not subject to compromise |              |            | 134,235   |           |        |            | 76,637    |  
|Liabilities Subject to Compromise (Note 5) |                                                                                                                                                                           |                                                                                                                                                            | 1,125,542                                   |              |            |           | 1,147,292 |       
|                                           |                                                                                                                                                                           |                                                                                                                                                            |                                             |              |            |           |           |       
|                                           |                                                                                                                                                                           |                                                                                                                                                            | Total liabilities                           |              |            | 1,259,777 |           |        |            | 1,223,929 |  
|                                           |                                                                                                                                                                           |                                                                                                                                                            |                                             |              |            |           |           |       
|Commitments and Contingencies (Note 2)     |                                                                                                                                                                           |                                                                                                                                                            |                                             |              |            |           |           |       
|Stockholders Deficit:                     |                                                                                                                                                                           |                                                                                                                                                            |                                             |              |            |           |           |       
|                                           | 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
    March 31, 2003 and December 31, 2002, respectively |                                             |              | 1          |           |           |        | 1          |          
|                                           |                                                                                                                                                                           | Series B convertible, $100,000 liquidation
    preference, 100,000 shares issued and outstanding at
    March 31, 2003 and December 31, 2002, respectively |                                             |              | 1          |           |           |        | 1          |          
|                                           | Common stock  $0.01 par value,
    250,000,000 shares authorized, 57,364,437 shares issued and
    outstanding at March 31, 2003 and December 31, 2002,
    respectively |                                                                                                                                                            |                                             | 584          |            |           |           | 584    |           
|                                           |                                                                                                                                                                           | Additional paid-in capital                                                                                                                                 |                                             |              | 471,172    |           |           |        | 471,172    |          
|                                           |                                                                                                                                                                           | Accumulated deficit                                                                                                                                        |                                             |              | (1,153,605 | )         |           |        | (1,131,138 | )        
|                                           |                                                                                                                                                                           | Treasury stock, at cost, 1,065,200 shares at
    March 31, 2003 and December 31, 2002, respectively                                                        |                                             |              | (2,880     | )         |           |        | (2,880     | )        
|                                           |                                                                                                                                                                           |                                                                                                                                                            |                                             |              |            |           |           |       
|                                           |                                                                                                                                                                           |                                                                                                                                                            | Total stockholders deficit                 |              |            | (684,727  | )         |        |            | (662,260  | )
|                                           |                                                                                                                                                                           |                                                                                                                                                            |                                             |              |            |           |           |       
|                                           |                                                                                                                                                                           |                                                                                                                                                            | Total Liabilities and Stockholders Deficit |              | $          | 575,050   |           |        | $          | 561,669   |  
|                                           |                                                                                                                                                                           |                                                                                                                                                            |                                             |              |            |           |           |       

The accompanying notes are an integral part of
these

consolidated financial statements.


1



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##### Table of Contents



NATIONSRENT, INC.

(Debtor-In-Possession as of December 17,
2001)





UNAUDITED CONSOLIDATED STATEMENTS OF
OPERATIONS

(In Thousands, Except Per Share
Data)


|                                                                  |                                                                          |                       |         |        |        |   |         |        |        | 
|----------------------------------------------------------------- | ------------------------------------------------------------------------ | --------------------- | ------- | ------ | ------ | - | ------- | ------ | ------ | 
|                                                                  |                                                                          |                      
|                                                                  |                                                                          | Three Months Ended   
|                                                                  |                                                                          | March 31,            
|                                                                  |                                                                          |                      
|                                                                  |                                                                          | 2003                  |         | 2002  
|                                                                  |                                                                          |                       |         |       
|Revenue:                                                          |                                                                          |                       |         |        |        |   |         |       
|                                                                  | Equipment rentals                                                        |                       | $       | 85,000 |        |   | $       | 91,307 |       
|                                                                  | Sales of equipment, merchandise, service, parts
    and supplies         |                       |         | 7,568  |        |   |         | 7,331  |       
|                                                                  |                                                                          |                       |         |        |        |   |         |       
|                                                                  |                                                                          | Total revenue         |         |        | 92,568 |   |         |        | 98,638 | 
|                                                                  |                                                                          |                       |         |        |        |   |         |       
|Cost of revenue:                                                  |                                                                          |                       |         |        |        |   |         |       
|                                                                  | Cost of equipment rentals                                                |                       |         | 56,514 |        |   |         | 51,462 |       
|                                                                  | Rental equipment depreciation and lease expense                          |                       |         | 34,139 |        |   |         | 32,294 |       
|                                                                  | Cost of sales of equipment, merchandise, service,
    parts and supplies |                       |         | 5,626  |        |   |         | 5,694  |       
|                                                                  |                                                                          |                       |         |        |        |   |         |       
|                                                                  |                                                                          | Total cost of revenue |         |        | 96,279 |   |         |        | 89,450 | 
|                                                                  |                                                                          |                       |         |        |        |   |         |       
|Gross (loss) profit                                               |                                                                          |                       | (3,711  | )      |        |   | 9,188   |       
|Operating expenses:                                               |                                                                          |                       |         |        |        |   |         |       
|                                                                  | Selling, general and administrative expenses                             |                       |         | 20,925 |        |   |         | 21,073 |       
|                                                                  | Non-rental equipment depreciation and amortization                       |                       |         | 3,663  |        |   |         | 3,346  |       
|                                                                  |                                                                          |                       |         |        |        |   |         |       
|Operating loss                                                    |                                                                          |                       | (28,299 | )      |        |   | (15,231 | )     
|                                                                  |                                                                          |                       |         |        |        |   |         |       
|Other (income)/expense:                                           |                                                                          |                       |         |        |        |   |         |       
|                                                                  | Interest expense                                                         |                       |         | 1,484  |        |   |         | 12,612 |       
|                                                                  | Other, net                                                               |                       |         | (56    | )      |   |         | (55    | )     
|                                                                  |                                                                          |                       |         |        |        |   |         |       
|                                                                  |                                                                          |                       | 1,428   |        |        |   | 12,557  |       
|                                                                  |                                                                          |                       |         |        |        |   |         |       
|Loss before reorganization items and benefit for
    income taxes |                                                                          |                       | (29,727 | )      |        |   | (27,788 | )     
|Reorganization items, net                                         |                                                                          |                       | (7,260  | )      |        |   | 3,217   |       
|                                                                  |                                                                          |                       |         |        |        |   |         |       
|Loss before benefit for income taxes                              |                                                                          |                       | (22,467 | )      |        |   | (31,005 | )     
|Benefit for income taxes                                          |                                                                          |                       |        |        |        |   |        |       
|                                                                  |                                                                          |                       |         |        |        |   |         |       
|Net loss                                                          |                                                                          | $                     | (22,467 | )      |        | $ | (31,005 | )     
|                                                                  |                                                                          |                       |         |        |        |   |         |       
|Net loss per share:                                               |                                                                          |                       |         |        |        |   |         |       
|                                                                  | Basic                                                                    |                       | $       | (0.39  | )      |   | $       | (0.54  | )     
|                                                                  |                                                                          |                       |         |        |        |   |         |       
|                                                                  | Diluted                                                                  |                       | $       | (0.39  | )      |   | $       | (0.54  | )     
|                                                                  |                                                                          |                       |         |        |        |   |         |       
|Weighted average common shares outstanding:                       |                                                                          |                       |         |        |        |   |         |       
|                                                                  | Basic                                                                    |                       |         | 57,364 |        |   |         | 57,364 |       
|                                                                  |                                                                          |                       |         |        |        |   |         |       
|                                                                  | Diluted                                                                  |                       |         | 57,364 |        |   |         | 57,364 |       
|                                                                  |                                                                          |                       |         |        |        |   |         |       

The accompanying notes are an integral part of
these

consolidated financial statements.


2



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##### Table of Contents



NATIONSRENT, INC.

(Debtor-In-Possession as of December 17,
2001)





UNAUDITED CONSOLIDATED STATEMENTS OF CASH
FLOWS

(In Thousands)


|                                                                                    |                                                       |                                               |         |         |        |   |         |        |        |  
|----------------------------------------------------------------------------------- | ----------------------------------------------------- | --------------------------------------------- | ------- | ------- | ------ | - | ------- | ------ | ------ | -
|                                                                                    |                                                       |                                              
|                                                                                    |                                                       | Three Months Ended                           
|                                                                                    |                                                       | March 31,                                    
|                                                                                    |                                                       |                                              
|                                                                                    |                                                       | 2003                                          |         | 2002   
|                                                                                    |                                                       |                                               |         |        
|CASH FLOWS FROM OPERATING
    ACTIVITIES:                                           |                                                       |                                               |         |         |        |   |         |       
|Net loss                                                                            |                                                       | $                                             | (22,467 | )       |        | $ | (31,005 | )     
|Adjustments to reconcile net loss to net cash
    provided by operating activities: |                                                       |                                               |         |         |        |   |         |       
|                                                                                    | Depreciation and amortization                         |                                               |         | 24,293  |        |   |         | 17,962 |       
|                                                                                    | Provision for allowance for doubtful accounts         |                                               |         | 1,700   |        |   |         | 1,370  |       
|                                                                                    | Non-cash reorganization items                         |                                               |         | (10,769 | )      |   |         |       |       
|                                                                                    | Loss (gain) on disposal of non-rental equipment       |                                               |         | 5       |        |   |         | (5     | )     
|                                                                                    | Gain on sale of rental equipment                      |                                               |         | (441    | )      |   |         | (235   | )     
|                                                                                    | Changes in operating assets and liabilities:          |                                               |         |         |        |   |         |        |       
|                                                                                    |                                                       | Accounts receivable                           |         |         | 5,434  |   |         |        | 13,279 |  
|                                                                                    |                                                       | Inventories                                   |         |         | (1,457 | ) |         |        | 1,485  |  
|                                                                                    |                                                       | Prepaid expenses and other assets             |         |         | 5,913  |   |         |        | (830   | )
|                                                                                    |                                                       | Accounts payable                              |         |         | (2,602 | ) |         |        | 5,498  |  
|                                                                                    |                                                       | Accrued expenses and other liabilities        |         |         | 6,826  |   |         |        | 19,177 |  
|                                                                                    |                                                       | Liabilities subject to compromise             |         |         | (111   | ) |         |        | (360   | )
|                                                                                    |                                                       | Income taxes payable                          |         |         | (3     | ) |         |        | (7     | )
|                                                                                    |                                                       |                                               |         |         |        |   |         |       
|                                                                                    |                                                       | Net cash provided by operating
    activities |         |         | 6,321  |   |         |        | 26,329 |  
|                                                                                    |                                                       |                                               |         |         |        |   |         |       
|CASH FLOWS FROM INVESTING ACTIVITIES:                                               |                                                       |                                               |         |         |        |   |         |       
|                                                                                    | Purchases of rental equipment                         |                                               |         | (7,939  | )      |   |         | (5,512 | )     
|                                                                                    | Purchases of property and equipment                   |                                               |         | (2,153  | )      |   |         | (646   | )     
|                                                                                    | Proceeds from sale of rental equipment                |                                               |         | 1,791   |        |   |         | 1,604  |       
|                                                                                    | Proceeds from sale of non-rental equipment            |                                               |         |        |        |   |         | 14     |       
|                                                                                    |                                                       |                                               |         |         |        |   |         |       
|                                                                                    |                                                       | Net cash used in investing
    activities     |         |         | (8,301 | ) |         |        | (4,540 | )
|                                                                                    |                                                       |                                               |         |         |        |   |         |       
|CASH FLOWS FROM FINANCING
    ACTIVITIES:                                           |                                                       |                                               |         |         |        |   |         |       
|                                                                                    | Proceeds from debtor-in-possession financing
facility |                                               |         | 12,608  |        |   |         |       |       
|                                                                                    | Repayments of debt subject to compromise              |                                               |         | (1,594  | )      |   |         |       |       
|                                                                                    | Repayments of debt not subject to compromise          |                                               |         | (2,277  | )      |   |         |       |       
|                                                                                    |                                                       |                                               |         |         |        |   |         |       
|                                                                                    |                                                       | Net cash provided by financing activities     |         |         | 8,737  |   |         |        |       |  
|                                                                                    |                                                       |                                               |         |         |        |   |         |       
|Net increase in cash and cash
    equivalents                                       |                                                       |                                               | 6,757   |         |        |   | 21,789  |       
|Cash and cash equivalents, beginning of period                                      |                                                       |                                               | 6,940   |         |        |   | 23,787  |       
|                                                                                    |                                                       |                                               |         |         |        |   |         |       
|Cash and cash equivalents, end of period                                            |                                                       | $                                             | 13,697  |         |        | $ | 45,576  |       
|                                                                                    |                                                       |                                               |         |         |        |   |         |       
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW
    INFORMATION:                               |                                                       |                                               |         |         |        |   |         |       
|                                                                                    |                                                       | Cash paid for interest                        |         | $       | 485    |   |         | $      | 15,965 |  
|                                                                                    |                                                       |                                               |         |         |        |   |         |       
|                                                                                    |                                                       | Cash paid for income taxes                    |         | $       | 3      |   |         | $      | 3      |  
|                                                                                    |                                                       |                                               |         |         |        |   |         |       
|SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING
    AND FINANCING ACTIVITIES:           |                                                       |                                               |         |         |        |   |         |       
|                                                                                    | Fixed assets acquired under financial obligations     |                                               | $       | 34,964  |        |   | $       |       |       
|                                                                                    |                                                       |                                               |         |         |        |   |         |       

The accompanying notes are an integral part of
these

consolidated financial statements.


3



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##### Table of Contents



NATIONSRENT, INC.

(Debtor-In-Possession as of December 17,
2001)





NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS

March 31, 2003


Note 1  Description of the
Business

NationsRent, Inc. together with its subsidiaries
(the Company or the Debtors) was
incorporated in the state of Delaware on August 14, 1997
for the purpose of creating a nationally branded network of
equipment rental locations offering a broad selection of
equipment primarily to the construction, industrial and
homeowner segments of the equipment rental industry in the
United States. The Company also sells used and new equipment,
parts, merchandise and supplies, and provides maintenance and
repair services.

Note 2  Proceedings Under
Chapter 11 of the Bankruptcy Code

On December 17, 2001 (the Petition
Date), the Debtors filed voluntary petitions for
reorganization under chapter 11 of the United States Bankruptcy
Code (the Bankruptcy Code) in the United States
Bankruptcy Court for the District of Delaware (the
Bankruptcy Court). The chapter 11 cases pending for
the Debtors (the Chapter 11 Cases) are being
jointly administered for procedural purposes.

In conjunction with the commencement of the
Chapter 11 Cases, the Debtors sought and obtained several
orders from the Bankruptcy Court which were intended to enable
the Debtors to continue to operate in the normal course of
business during the Chapter 11 Cases, including orders to
(i) permit the Debtors to operate their consolidated cash
management system during the Chapter 11 Cases in
substantially the same manner as it was operated prior to the
commencement of the Chapter 11 Cases, (ii) authorize
payment of prepetition employee salaries, wages, and benefits
and reimbursement of prepetition employee business expenses,
(iii) authorize payment of prepetition sales, payroll, and use
taxes owed by the Debtors, (iv) authorize payment of
certain prepetition obligations to customers, (v) continue
workers compensation insurance programs and certain
prepetition claims, premiums and related expenses,
(vi) authorize payment of certain mechanics liens and
freight charges, (vii) determine adequate assurance of
payment for future utility services, (viii) authorize
payment of installments under insurance premium finance
agreements, (ix) authorize maintenance and continuation of
insurance programs and related relief, and (x) authorize
payment of certain other prepetition claims.

The Bankruptcy Code provides that the Debtors
have the exclusive right for certain specified periods during
which only they may file and solicit acceptances of a plan of
reorganization. If the Debtors fail to file a plan of reorganization
during this exclusive period or any extensions thereof or, after
such plan has been filed, if the Debtors fail to obtain
acceptance of such plan from the requisite impaired classes of
creditors and equity holders during the exclusive solicitation
period, any party in interest, including a creditor, an equity
holder, a committee of creditors or equity holders, or an
indenture trustee, may file their own plan of reorganization for
the Debtors. The initial exclusive period of the Debtors to file
a plan of reorganization was set to expire on April 15, 2002 and
the initial exclusive period of the Debtors to solicit acceptance of
a plan of reorganization was set to expire on June 15, 2002. The
Debtors have filed successive motions to extend such exclusive
periods. The exclusive period of the Debtors to file a plan of
reorganization is now set to expire on the earlier of June 30,
2003 or 30 days after the entry of an order denying confirmation of
the Debtors proposed plan of reorganization described below, and the exclusive period of the
Debtors to solicit acceptance of a plan of reorganization is now set
to expire 60 days after expiration of the exclusive period to
file a plan of reorganization.

In June 2002, the Debtors filed their proposed Joint
Plan of Reorganization and related disclosure statement with the
Bankruptcy Court. In December 2002, after negotiating with several
parties in interest, the Debtors filed their First Amended Joint Plan
of Reorganization (as modified, the
Proposed Plan) and related
disclosure statement (the Disclosure Statement). The Proposed Plan was jointly proposed by the
Debtors, the official committee of unsecured creditors and the
holders of a majority of the bank debt under the Debtors
prepetition senior secured credit facility. In April 2003, the
Debtors filed a modification (the Plan Modification) to
the First Amended Joint Plan of Reorganization which provides for up to $80 million of
additional junior capital in order to consummate the plan of
reorganization. Under the terms of the
Proposed Plan, on the effective date (i) the holders of allowed claims under the
Debtors prepetition senior secured credit facility shall
receive 63.3% of the new common stock, new preferred stock and new
subordinated notes of the reorganized company, (ii) a
creditor trust for the benefit of the holders of allowed general
unsecured claims shall receive 3.3% of the new securities and $300,000
in cash and (iii) a new investor group shall purchase 33.3% of
the new common stock, new preferred stock and new subordinated notes
of the reorganized company for $80 million. The Proposed Plan does not provide for any value or
distribution to existing equity holders of the Company.

4



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##### Table of Contents



NATIONSRENT, INC.


(Debtor-In-Possession as of December 17,
2001)


NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The confirmation of a plan of reorganization is
one of the Companys primary objectives. In February 2003, the
Bankruptcy Court approved the Disclosure Statement which together
with the Proposed Plan has been sent to all creditors for approval.
The deadline to vote to accept or reject the Proposed Plan was
March 21, 2003. The Proposed Plan was overwhelmingly approved by
the Debtors creditors who voted on such plan.
In April 2003, the Bankruptcy Court found that the Plan Modifications
do not adversely change the treatment of the claim of any creditor or
the interest of any equity security holder of the Debtors who has not
accepted such Plan Modification and therefore, the Proposed Plan as
modified by the Plan Modification, is deemed accepted by all
creditors who have previously accepted the Proposed Plan. The hearing to consider confirmation of the
Proposed Plan is presently scheduled for May 13, 2003 at
10:00 A.M. in the Bankruptcy Court. In order to confirm a
plan of reorganization, the Bankruptcy Court, among other
things, is required to find that (i) with respect to each
impaired class of creditors and equity holders, each holder in
such class has accepted the plan or will, pursuant to the plan,
receive at least as much as such holder would receive in a
liquidation, (ii) each impaired class of creditors and
equity holders has accepted the plan by the requisite vote
(except as described in the following sentence), and
(iii) confirmation of the plan is not likely to be followed
by a liquidation or a need for further financial reorganization
of the Debtors or any successors to the Debtors unless the plan
proposes such liquidation or
reorganization. If any impaired class of
creditors or equity holders does not accept the plan and,
assuming that all of the other requirements of the Bankruptcy
Code are met, the proponents of the plan may invoke the
cram down provisions of the Bankruptcy Code. Under
these provisions, the Bankruptcy Court may confirm a plan
notwithstanding the non-acceptance of the plan by an impaired
class of creditors or equity holders if certain requirements of
the Bankruptcy Code are met. These requirements may, among other
things, necessitate payment in full for senior classes of
creditors before payment to a junior class can be made.

Under bankruptcy law, actions by creditors to
collect prepetition indebtedness owed by the Debtors at the
filing date, as well as most litigation pending against the Company, are
stayed and other prepetition contractual obligations may not be
enforced against the Debtors. In addition, the Debtors have the
right, subject to Bankruptcy Court approval and other
conditions, to assume or reject any prepetition executory
contracts and unexpired leases. Parties affected by these
rejections may file prepetition damage claims with the
Bankruptcy Court. The Company has prepared and submitted the
schedules setting forth the Debtors assets and liabilities
as of the date of the petition as reflected in the
Companys accounting records. The amounts of claims filed
by creditors could be significantly different from their
recorded amounts. Due to material uncertainties, it is not
possible to predict the length of time the Company will operate
under chapter 11 protection, the outcome of the proceedings
in general, whether the Company will continue to operate under
the current organizational structure, or the effect of the
proceedings on the Companys business or the recovery by
creditors and equity holders.

Note 3  Accounting
Policies

Basis of Presentation

The accompanying unaudited interim consolidated
financial statements have been prepared by the Company on a
going concern basis, which contemplates continuity of
operations, realization of assets, and payment of liabilities in
the ordinary course of business, and do not reflect adjustments
that might result if the Debtors are unable to continue as a
going concern. The Debtors history of significant losses,
their stockholders deficit and their Chapter 11 Cases raise
substantial doubt about the Debtors ability to continue as
a going concern. Continuing as a going concern is dependent
upon, among other things, the Debtors formulation of a
plan or plans of reorganization acceptable to the Bankruptcy
Court and creditors, the success of future business operations,
and the generation of sufficient cash from operations and
financing sources to meet the Companys obligations. The
consolidated financial statements do not reflect: (i) the
realizable value of assets on a liquidation basis or their
availability to satisfy liabilities; (ii) aggregate
prepetition liability amounts that may be allowed for unrecorded
claims or contingencies, or their status or priority;
(iii) the effect of any changes to the Debtors
capital structure or in the Debtors business operations as
the result of an approved plan or plans of reorganization; or
(iv) adjustments to the carrying value of assets or
liability amounts that may be necessary as a result of actions
by the Bankruptcy Court. Adjustments necessitated by a plan of
reorganization could materially change the amounts reported in
the accompanying unaudited interim consolidated financial
statements.

These statements have been prepared in accordance
with the American Institute of Certified Public Accountants
(AICPA) Statement of Position
(SOP) 90-7, Financial Reporting by
Entities in

5



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##### Table of Contents



NATIONSRENT, INC.


(Debtor-In-Possession as of December 17,
2001)


NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Reorganization under the Bankruptcy Code.
Pursuant to SOP 90-7, revenues and expenses, realized gains
and losses and provisions for losses resulting from the
reorganization of the business are to be reported in the
unaudited interim consolidated statements of operations
separately as reorganization items. Professional fees are
expensed as incurred. Interest expense is reported only to the
extent that it will be paid during the Chapter 11 Cases or
that it is probable that it will be an allowed claim.
Reorganization items are disclosed in the notes to unaudited
consolidated financial statements. See
 Note 6  Reorganization Items,
Net.

The unaudited consolidated financial 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 months ended March 31, 2003 and 2002,
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. 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, 2002
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 months
ended March 31, 2003 are not necessarily indicative of the
results which may be reported for the year ending
December 31, 2003.

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 loss of the Company was equal to net loss for
all periods presented.

6



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##### Table of Contents



NATIONSRENT, INC.


(Debtor-In-Possession as of December 17,
2001)


NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Note 4 Debt Not Subject to
Compromise

Debt not subject to compromise consists of the debtor
in possession financing facility (the DIP Financing
Facility) and certain postpetition secured purchase money notes as follows:

|                                                                                                                                                   |                                      |                |        |              |  |   |        |        | 
|-------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------ | -------------- | ------ | ------------ |  | - | ------ | ------ | 
|                                                                                                                                                   |                                      | March 31,      |        | December 31,
|                                                                                                                                                   |                                      | 2003           |        | 2002        
|                                                                                                                                                   |                                      |                |        |             
|                                                                                                                                                   |                                      |               
|                                                                                                                                                   |                                      | (in
thousands)
|DIP financing facility                                                                                                                             |                                      | $              | 24,860 |              |  | $ | 12,252 |       
|Postpetition notes payable, bearing interest at
    7.0%, interest payable quarterly and maturities through January
    2007, secured by equipment |                                      |                | 49,991 |              |  |   | 1,976  |       
|Postpetition notes payable, bearing interest at
    prime, interest and principal payable
    in January 2007.                                     |                                      |                | 2,250  |              |  |   |       |       
|                                                                                                                                                   |                                      |                |        |              |  |   |        |       
|                                                                                                                                                   | Total debt not subject to compromise |                | $      | 77,101       |  |   | $      | 14,228 | 
|                                                                                                                                                   |                                      |                |        |              |  |   |        |       

DIP
Financing Facility

In December 2002, the Company amended and restated the DIP
Financing Facility to increase availability up to $75,000,000
(including up to $30,000,000 of letters of credit) and to extend its
term until June 30, 2003. Under the terms of the DIP Financing Facility, availability is subject to
a borrowing base based upon eligible rental equipment and trade accounts receivable. Amounts
borrowed under the DIP Financing Facility bear interest per
annum equal to the agents capital index rate plus 2.00%. In
addition to a $500,000 commitment fee and a $750,000 syndication fee, there is an
unused commitment fee of 0.50%, a letter of credit fee of 3.25%,
and a letter of credit fronting fee of up to 0.25%. The DIP Financing
Facility is secured by super-priority claims and liens on the
real and personal assets of the Company that also secure the
prepetition senior credit facility. The DIP Financing Facility
contains financial covenants requiring a minimum operating cash flow, as well as
other covenants that limit, among other things, indebtedness,
liens, sales of assets, capital expenditures, investments, and
prohibit dividend payments. In connection with the DIP Financing Facility,
the Companys prepetition senior credit facility was
amended to provide for subordination of the liens (to the liens
under the DIP Financing Facility) and use of cash collateral.

As of
March 31, 2003 the Company had $24,860,000 in cash borrowings
and had $19,999,000 in letters of credit outstanding under the DIP
Financing Facility. As of May 8, 2003 the Company had
$36,860,000 in cash
borrowings and had $19,999,000 in letters of credit outstanding under
the DIP Financing Facility.

Postpetition Secured Purchase Money
Notes Payable

The Company is in the process of renegotiating certain
equipment leases as part of the Chapter 11 Cases. The Company
has entered into settlement agreements with respect to certain
equipment leases. As part of such settlements, the Company acquired
the equipment underlying such leases and issued notes
payable as summarized above to the lessors secured by the acquired
equipment.

7



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##### Table of Contents



NATIONSRENT, INC.


(Debtor-In-Possession as of December 17,
2001)


NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Note 5  Liabilities
Subject to Compromise

The principal categories of claims classified as
liabilities subject to compromise under the Chapter 11
Cases are identified below. All amounts may be subject to
adjustment depending on Bankruptcy Court action, further
developments with respect to disputed claims, or other events,
including the reconciliation of claims filed with the Bankruptcy
Court to amounts included in the Companys records.
Additional prepetition claims may arise from a rejection of
additional executory contracts or unexpired leases by the
Debtors. Under a confirmed plan or plans of reorganization, all
prepetition claims may be paid and discharged at amounts
substantially less than their allowed amounts.

As a result of the Chapter 11 Cases, no
principal or interest payments may be made on unsecured
prepetition debt without Bankruptcy Court approval or until a
plan or plans of reorganization providing for the repayment
terms has been confirmed by the Bankruptcy Court and becomes
effective. Therefore, interest on prepetition unsecured
obligations, as well as amortization of deferred financing costs
related to such debt, has not been accrued or recorded after the Petition
Date. In addition, in
September 2002, in connection with the amendment to the DIP
Financing Facility, the Companys prepetition senior secured lenders agreed to
suspend the Companys obligation to continue to pay interest on the
prepetition senior secured credit facility until such lenders and the lenders
under the DIP Financing Facility determine that the Company has sufficient cash
to make such payments. Therefore, interest on the prepetition senior
secured credit facility has not been accrued or recorded after
September 2002. Contractual interest expense not accrued or recorded on
such prepetition debt totaled approximately
$22,286,000 and
$7,491,000 for the three months
ended March 31, 2003 and 2002, respectively.

8



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##### Table of Contents



NATIONSRENT, INC.


(Debtor-In-Possession as of December 17,
2001)


NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Liabilities subject to compromise consists of the
following:

|                                                              |                                         |                |           |              |  |   |           |           | 
|------------------------------------------------------------- | --------------------------------------- | -------------- | --------- | ------------ |  | - | --------- | --------- | 
|                                                              |                                         | March 31,      |           | December 31,
|                                                              |                                         | 2003           |           | 2002        
|                                                              |                                         |                |           |             
|                                                              |                                         |               
|                                                              |                                         | (in thousands)
|Debt subject to compromise                                    |                                         | $              | 1,066,020 |              |  | $ | 1,086,729 |          
|Accounts payable                                              |                                         |                | 16,306    |              |  |   | 16,276    |          
|Accrued expenses                                              |                                         |                | 38,260    |              |  |   | 39,341    |          
|Personal property, real estate and other
    non-income taxes |                                         |                | 4,956     |              |  |   | 4,946     |          
|                                                              |                                         |                |           |              |  |   |           |          
|                                                              | Total liabilities subject to compromise |                | $         | 1,125,542    |  |   | $         | 1,147,292 | 
|                                                              |                                         |                |           |              |  |   |           |          

Debt subject to compromise consists of the
following:

|                                                                                                                                                                             |                                         |                                  |         |              |           |  |         |         |           | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------- | -------------------------------- | ------- | ------------ | --------- |  | ------- | ------- | --------- | 
|                                                                                                                                                                             |                                         | March 31,                        |         | December 31,
|                                                                                                                                                                             |                                         | 2003                             |         | 2002        
|                                                                                                                                                                             |                                         |                                  |         |             
|                                                                                                                                                                             |                                         |                                 
|                                                                                                                                                                             |                                         | (in thousands)                  
|Notes payable to financial institutions:                                                                                                                                     |                                         |                                  |         |              |           |  |         |        
|                                                                                                                                                                             | Term loan due July 2006                 |                                  | $       | 393,798      |           |  | $       | 393,798 |          
|                                                                                                                                                                             | Revolving credit facility due July 2004 |                                  |         | 355,481      |           |  |         | 355,481 |          
|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.                        |                                         |                                  | 98,798  |              |           |  | 98,798  |        
|Rental equipment financing obligations, secured
    by equipment, payable in monthly installments, through January
    2005                                                  |                                         |                                  | 16,784  |              |           |  | 18,965  |        
|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           |                                         |                                  | 6,689   |              |           |  | 6,773   |        
|Note payable, with interest at the London
    Interbank Offered Rate plus 2.75%, payable in monthly
    installments secured by equipment                                    |                                         |                                  | 7,824   |              |           |  | 7,824   |        
|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 |                                         |                                  | 11,010  |              |           |  | 29,454  |        
|Other                                                                                                                                                                        |                                         |                                  | 11      |              |           |  | 11      |        
|                                                                                                                                                                             |                                         |                                  |         |              |           |  |         |        
|                                                                                                                                                                             |                                         | Total debt subject to compromise |         | $            | 1,066,020 |  |         | $       | 1,086,729 | 
|                                                                                                                                                                             |                                         |                                  |         |              |           |  |         |        

The Company is currently in default on
substantially all of its debt subject to compromise. Despite the Companys restructuring efforts in
late 2000 and early 2001 described below, in December 2001, the
Company failed to make a principal payment due on the term loan
portion of its senior credit facility, an interest payment due
on its 10.375% Senior Subordinated Notes due 2008 (the
Subordinated Notes), principal and interest payments
on certain subordinated notes issued in connection with
acquisitions (the Acquisition Notes) and certain
other scheduled payments.

Under the terms of the Companys senior
credit facility, upon an event of default, including the failure
to make a required interest payment, the senior lenders had
several rights and remedies available to them, including
declaring all amounts outstanding, together with accrued
interest, to be immediately due and

9



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##### Table of Contents



NATIONSRENT, INC.


(Debtor-In-Possession as of December 17,
2001)


NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

payable. The senior lenders had the right to
proceed against the collateral securing the facility, which
includes substantially all of the Companys assets.
Similarly, as a result of the Companys failure to make
interest and/or principal payments under the Acquisition Notes
and the Subordinated Notes, subject to the subordination and
cure provisions of such instruments, the trustee or holders of
those notes may have been able to declare those notes and
accrued interest immediately due and payable. The Companys
other debt and lease arrangements also contain cross-default
provisions, which gave the parties thereto various remedies,
including acceleration of all amounts outstanding, foreclosure
on collateral securing such obligations and termination rights.
As a result of filing the Chapter 11 Cases, the
Companys lenders and parties to various contracts and
agreements were prohibited from exercising the remedies that may
have been available to them upon the Companys default.

Note 6  Reorganization Items,
Net

Expenses and income directly incurred as a result of the
Chapter 11 Cases have been segregated from normal
operations and are disclosed separately. The major components
are as follows:

|                                       |                            |                |                    |   |        |   |       |   |      
|-------------------------------------- | -------------------------- | -------------- | ------------------ | - | ------ | - | ----- | - | -----
|                                       |                            |                |                   
|                                       |                            |                | Three Months Ended
|                                       |                            |                | March 31,         
|                                       |                            |                |                   
|                                       |                            |                | 2003               |   | 2002  
|                                       |                            |                |                    |   |       
|                                       |                            |                |                   
|                                       |                            | (In
thousands)
|Gain on settlement of operating leases |                            | $              | (7,532             | ) |        | $ |      |  
|Gain on settlement of debt             |                            |                | (3,237             | ) |        |   |      |  
|Professional fees                      |                            |                | 3,221              |   |        |   | 3,082 |  
|Employee expenses                      |                            |                | 206                |   |        |   | 267   |  
|Facility closures                      |                            |                | 83                 |   |        |   |      |  
|Interest income                        |                            |                | (1                 | ) |        |   | (133  | )
|Other                                  |                            |                |                   |   |        |   | 1     |  
|                                       |                            |                |                    |   |        |   |       |  
|                                       | Total reorganization items |                |                    | $ | (7,260 | ) |       | $ | 3,217
|                                       |                            |                |                    |   |        |   |       |  

Gains on settlement of operating leases and debt
represent the settlement of certain equipment operating leases and
debt for amounts less than the Companys recorded obligations. Professional fees consist of costs for financial
advisors, legal counsel, consulting and other costs related to
professional services incurred. Employee expenses primarily consist
of a severance and retention program approved by the Bankruptcy Court
to ensure the retention of certain key employees. Facility closure
costs relate to miscellaneous charges related to the closing of the stores identified for closure in the
reorganization. Interest income consists of
interest earned on excess cash balances. Reorganization items
excluding the gains on settlement of operating leases and on
settlement of debt for the three months ended March 31, 2003 and
2002 were cash charges.

Note 7  Stock Based Compensation

The Company accounts for stock compensation
arrangements in accordance with Accounting Principles Board
Opinion (APB) No. 25, Accounting for
Stock Issued to Employees, and related interpretations and
accordingly, recognizes no compensation expense for the stock
compensation arrangements with employees or directors since the
stock options are granted at exercise prices at or greater than
the fair market value of the shares at the date of grant and
follows the new disclosure requirements of SFAS No. 148,
Accounting for Stock-Based
Compensation  Transition and Disclosure.

Pro forma information regarding net loss and loss
per share is required by SFAS No. 123, Accounting for
Stock Based Compensation, as amended by SFAS No. 148,
as if the Company had accounted for its granted employee stock
options under the fair value method of SFAS No. 123. The
Company granted no options for the three months ended
March 31, 2003 and 2002. Had compensation cost for all
options granted been determined based on the fair value at the grant
date consistent with SFAS No. 123, the Companys net
loss and loss per share would have been as follows:

|                                                           |  |                                       |         |      |  |   |         |  
|---------------------------------------------------------- |  | ------------------------------------- | ------- | ---- |  | - | ------- | -
|                                                           |  |                                      
|                                                           |  | Three Months Ended                   
|                                                           |  | March 31,                            
|                                                           |  |                                      
|                                                           |  | 2003                                  |         | 2002
|                                                           |  |                                       |         |     
|                                                           |  | (In
thousands, except per share data)
|Reported net loss                                          |  | $                                     | (22,467 | )    |  | $ | (31,005 | )
|Pro forma stock-based compensation expense, net
    of tax |  | $                                     | (371    | )    |  | $ | (1,005  | )
|                                                           |  |                                       |         |      |  |   |         |  
|Pro forma net loss                                         |  | $                                     | (22,838 | )    |  | $ | (32,010 | )
|                                                           |  |                                       |         |      |  |   |         |  
|Reported loss per share, basic and diluted                 |  | $                                     | (0.39   | )    |  | $ | (0.54   | )
|Pro forma loss per share, basic and diluted                |  | $                                     | (0.40   | )    |  | $ | (0.56   | )

Pursuant to the Proposed Plan, no value or other
distribution will be made on account of the Companys equity
securities, including stock options.

Note 8  2000 Restructuring
Plan

During the fourth quarter of 2000, the Company
recorded a pre-tax restructuring charge of approximately
$72,005,000 and during 2001, the Company recorded an additional
net pre-tax restructuring charge of approximately $9,653,000.

The restructuring plan was comprised of the
following major components:



| |   |                                                                                                                                                                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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;
|
| |  | the abandonment of certain information system
    projects that were under development;                                                                                                                                                                           
|
| |  | the elimination of jobs company-wide and the
    consolidation of various departments within the organization; and                                                                                                                                                
|
| |  | the closure of certain rental and office
    locations.                                                                                                                                                                                                           

10



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##### Table of Contents



NATIONSRENT, INC.


(Debtor-In-Possession as of December 17,
2001)


NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The remaining components of these charges, along
with the activity for 2003 related to these charges, are
presented in the following table (in thousands).

|                                     |  |              |       |               |  |            |   |            |  |      |   |  |  |   |   |  |  |   |       | 
|------------------------------------ |  | ------------ | ----- | ------------- |  | ---------- | - | ---------- |  | ---- | - |  |  | - | - |  |  | - | ----- | 
|                                     |  |              |       |               |  |           
|                                     |  |              |       | 2003 Activity |  |           
|                                     |  |              |       |               |  |           
|                                     |  | Reserve      |       |               |  |            |   | Reserve   
|                                     |  | Balance at   |       | Amounts       |  | Deductions |   | Balance at
|                                     |  | December 31, |       | Charged to    |  |            |   | March 31, 
|                                     |  | 2002         |       | Income        |  | Cash       |   | Non-Cash   |  | 2003
|                                     |  |              |       |               |  |            |   |            |  |     
|Employee termination severance costs |  | $            | 1,815 |               |  | $          |  |            |  | $    |  |  |  | $ |  |  |  | $ | 1,815 | 
|Facility closures                    |  |              | 324   |               |  |            |  |            |  |      |  |  |  |   |  |  |  |   | 324   | 
|                                     |  |              |       |               |  |            |   |            |  |      |   |  |  |   |   |  |  |   |       | 
|                                     |  | $            | 2,139 |               |  | $          |  |            |  | $    |  |  |  | $ |  |  |  | $ | 2,139 | 
|                                     |  |              |       |               |  |            |   |            |  |      |   |  |  |   |   |  |  |   |       | 

The remaining reserve balance at March 31,
2003 for employee termination severance costs relates to the
remaining severance payments due to employees terminated under
the 2000 restructuring plan.

The remaining reserve balance at March 31,
2003 for facility closures relates to certain office equipment
leases that the Company has not yet received Bankruptcy Court
approval to reject.

The timing and the amount of any distribution related
to the remaining reserve balances will be
determined by the resolution of the Chapter 11 Cases.

Note 9  Seasonality

The Companys revenue and results of operations are
dependent upon activity in the construction industry in the
markets it serves. Construction activity is dependent upon
weather and other seasonal factors affecting construction in the
geographic areas where the Company operates. Because of this
variability in demand, the Companys quarterly revenue and
results of operations may fluctuate. 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.

Note 10  Loss Per
Share

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

|                                                                              |                                                                            |                               |        |         |   |   |        |         |  
|----------------------------------------------------------------------------- | -------------------------------------------------------------------------- | ----------------------------- | ------ | ------- | - | - | ------ | ------- | -
|                                                                              |                                                                            |                              
|                                                                              |                                                                            | Three Months Ended           
|                                                                              |                                                                            | March 31,                    
|                                                                              |                                                                            |                              
|                                                                              |                                                                            | 2003                          |        | 2002   
|                                                                              |                                                                            |                               |        |        
|Numerator:                                                                    |                                                                            |                               |        |         |   |   |        |        
|                                                                              | Net loss                                                                   |                               | $      | (22,467 | ) |   | $      | (31,005 | )
|                                                                              | Interest expense on convertible subordinated
    debt, net of income taxes |                               |        |        |   |   |        |        |  
|                                                                              |                                                                            |                               |        |         |   |   |        |        
|                                                                              | Number  diluted loss per share                                            |                               | $      | (22,467 | ) |   | $      | (31,005 | )
|                                                                              |                                                                            |                               |        |         |   |   |        |        
|Denominator:                                                                  |                                                                            |                               |        |         |   |   |        |        
|                                                                              | Denominator for basic loss per share 
    weighted-average shares         |                               |        | 57,364  |   |   |        | 57,364  |  
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Effect of dilutive securities:                                             |                               |        |         |   |   |        |         |  
|                                                                              |                                                                            | Convertible subordinated debt |        |         |  |   |        |         | 
|                                                                              |                                                                            | Convertible preferred stock   |        |         |  |   |        |         | 
|                                                                              |                                                                            | Employee stock options        |        |         |  |   |        |         | 
|                                                                              |                                                                            |                               |        |         |   |   |        |        
|Denominator for diluted loss per
    share  adjusted weighted-average shares |                                                                            |                               | 57,364 |         |   |   | 57,364 |        
|                                                                              |                                                                            |                               |        |         |   |   |        |        
|Basic loss per share                                                          |                                                                            | $                             | (0.39  | )       |   | $ | (0.54  | )      
|                                                                              |                                                                            |                               |        |         |   |   |        |        
|Diluted loss per share                                                        |                                                                            | $                             | (0.39  | )       |   | $ | (0.54  | )      
|                                                                              |                                                                            |                               |        |         |   |   |        |        

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##### Table of Contents



NATIONSRENT, INC.


(Debtor-In-Possession as of December 17,
2001)


NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Options and warrants to purchase 5,243,940 and 9,153,792 shares of common stock were outstanding at
March 31, 2003 and 2002, respectively, but were not
included in the computation of diluted loss per share
because the exercise prices of such options and warrants were
greater than the average fair value of the common shares and,
therefore, the effect would be antidilutive.

Weighted average shares of preferred stock convertible into 36,507,937
shares of common stock were outstanding at
March 31, 2003 and 2002 but were not included in the computation of
diluted loss per share since their effect would be
antidilutive.

Weighted average shares of
subordinated debt convertible into 10,841,961 and 10,948,231
shares of common stock, respectively, were outstanding at
March 31, 2003 and 2002 but were not included in the computation of
diluted loss per share since their effect would be
antidilutive.

Note 11  Income
Taxes

The Company did not record a tax benefit for the three
months ended March 31, 2003, due to the uncertainty
of the realizability of the Companys deferred tax assets.

Note 12  Related Party
Transactions

In December 2002, the Company entered into a Term
Sheet Regarding Equipment Settlement Program (the Term
Sheet) with Boston Rental Partners, LLC, a Delaware limited
liability company (Boston Rental), to facilitate
obtaining new and used rental equipment to replace (or acquire)
equipment currently leased by the Company from certain third party
lessors, where the Company has determined that the remaining lease
obligations exceed the fair market value of the underlying equipment. In January 2003,
the Term Sheet was approved by the Bankruptcy Court.
Pursuant to the Term Sheet, Boston Rental may purchase equipment
underlying the Companys leases at fair market value or obtain
similar equipment from third party sources and then rent such
equipment to the Company at substantially less than the
Companys existing lease obligations. As part of Boston
Rentals acquisition of equipment from an equipment lessor, the
equipment lessor will be required to terminate the operating lease
and settle all claims against the Company. In the event an equipment
lessor is not willing to settle its leases at fair market value, the
Company may reject the lease under the Bankruptcy Code and may rent
similar equipment from Boston Rental to replace the equipment
underlying the rejected lease. From and after the effective date of
the Proposed Plan, the Company has the option to acquire all of the
stock or assets of Boston Rental for an amount in cash equal to the
equity capital contributed to Boston Rental, plus assumption of
indebtedness, plus certain costs and expenses as described in the
Term Sheet. During the three months ended March 31, 2003, the Company
recorded $260,000 of rental expense related to equipment rented from
Boston Rental.

Boston Rental was formed exclusively for the purpose
described above and is wholly owned by Phoenix Rental Partners, LLC
(Phoenix) and Baupost Capital LLC (Baupost).
The principal owners of Phoenix are Bryan T. Rich and Douglas M.
Suliman. Pursuant to a merger agreement, dated October 22, 1998, the
Company acquired Logan Equipment Corp. (Logan), an entity
owned by Messrs. Rich and Suliman in exchange for cash, approximately
$8.4 million of unsecured convertible promissory notes and 3.3
million shares of the Companys common stock. Following the
acquisition of Logan, Mr. Rich was employed by NationsRent as the
Senior Vice PresidentNortheast Region through December 2000.
Since the Petition Date, Baupost and Phoenix have acquired a majority
of the Companys prepetition senior secured bank debt. Messrs.
Suliman and Rich also hold certain other prepetition unsecured
claims against the Debtors resulting from the acquisition of Logan.
TREC LLC, an entity affiliated with Mr. Rich, leases three pieces of
real property to the Company. Baupost also owns $2 million in face
amount of the Companys prepetition 10-3/8% senior subordinated
notes due 2008.

12



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##### Table of Contents






|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|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, 2002 appearing in our Annual Report on
Form 10-K filed with the Securities and Exchange Commission.

General

NationsRent, Inc. and all of its subsidiaries
(NationsRent, the Company, the
Debtors, we or us) 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, industrial and homeowner customers
including general contractors, subcontractors, highway
contractors, manufacturing plants, distribution centers and
other commercial businesses. We also sell used and new
equipment, merchandise, spare parts and supplies. As of
April 30, 2003, we operated 249 equipment rental locations in
26 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.

Proceedings Under Chapter 11 of the Bankruptcy
Code

On December 17, 2001 (the Petition
Date), the Debtors filed voluntary petitions for
reorganization under chapter 11 of the United States Bankruptcy
Code (the Bankruptcy Code) in the United States
Bankruptcy Court for the District of Delaware (the
Bankruptcy Court). The chapter 11 cases pending for
the Debtors (the Chapter 11 Cases) are being
jointly administered for procedural purposes.

In conjunction with the commencement of the
Chapter 11 Cases, the Debtors sought and obtained several
orders from the Bankruptcy Court which were intended to enable
the Debtors to continue to operate in the normal course of
business during the Chapter 11 Cases, including orders to
(i) permit the Debtors to operate their consolidated cash
management system during the Chapter 11 Cases in
substantially the same manner as it was operated prior to the
commencement of the Chapter 11 Cases, (ii) authorize
payment of prepetition employee salaries, wages, and benefits
and reimbursement of prepetition employee business expenses,
(iii) authorize payment of prepetition sales, payroll, and use
taxes owed by the Debtors, (iv) authorize payment of
certain prepetition obligations to customers, (v) continue
workers compensation insurance programs and certain
prepetition claims, premiums and related expenses,
(vi) authorize payment of certain mechanics liens and
freight charges, (vii) determine adequate assurance of
payment for future utility services, (viii) authorize
payment of installments under insurance premium finance
agreements, (ix) authorize maintenance and continuation of
insurance programs and related relief, and (x) authorize
payment of certain other prepetition claims.

The Bankruptcy Code provides that the Debtors
have the exclusive right for certain specified periods during
which only they may file and solicit acceptances of a plan of
reorganization. If the Debtors fail to file a plan of reorganization
during this exclusive period or any extensions thereof or, after
such plan has been filed, if the Debtors fail to obtain
acceptance of such plan from the requisite impaired classes of
creditors and equity holders during the exclusive solicitation
period, any party in interest, including a creditor, an equity
holder, a committee of creditors or equity holders, or an
indenture trustee, may file their own plan of reorganization for
the Debtors. The initial exclusive period of the Debtors to file
a plan of reorganization was set to expire on April 15, 2002 and
the initial exclusive period of the Debtors to solicit acceptance of
a plan of reorganization was set to expire on June 15, 2002. The
Debtors have filed successive motions to extend such exclusive
periods. The exclusive period of the Debtors to file a plan of
reorganization is now set to expire on the earlier of June 30,
2003 or 30 days after the entry of an order denying confirmation of
the Debtors proposed plan of reorganization described below,
and the exclusive period of the
Debtors to solicit acceptance of a plan of reorganization is now set
to expire 60 days after expiration of the exclusive period to
file a plan of reorganization.

In June 2002, the Debtors filed their proposed Joint
Plan of Reorganization and related disclosure statement with the
Bankruptcy Court. In December 2002, after negotiating with several
parties in interest, the Debtors filed their First Amended Joint Plan
of Reorganization (as modified, the
Proposed Plan) and related
disclosure statement (the Disclosure Statement). The Proposed Plan was jointly proposed by the
Debtors, the official committee of unsecured creditors and the
holders of a majority of the bank debt under the Debtors
prepetition senior secured credit facility. In April 2003, the
Debtors filed a modification (the Plan Modification) to
the First Amended Joint Plan of Reorganization which provides for up to $80 million of
additional junior capital in order to consummate the plan of
reorganization. Under the terms of the
Proposed Plan, on the effective date (i) the holders of allowed claims under the
Debtors prepetition senior secured credit facility shall
receive 63.3% of the new common stock, new preferred stock and new
subordinated notes of the reorganized company, (ii) a
creditor trust for the benefit of the holders of allowed general
unsecured claims shall receive 3.3% of the new securities and $300,000
in cash and (iii) a new investor group shall purchase 33.3% of
the new common stock, new preferred stock and new subordinated notes
of the reorganized company for $80 million. The Proposed Plan does not provide for any value or
distribution to existing equity holders of the Company.

The confirmation of a plan of reorganization is
one of the Companys primary objectives. In February 2003, the
Bankruptcy Court approved the Disclosure Statement which together
with the Proposed Plan has been sent to all creditors for approval.
The deadline to vote to accept or reject the Proposed Plan was
March 21, 2003. The Proposed Plan was overwhelmingly approved by
the Debtors creditors who voted on such plan.
In April 2003, the Bankruptcy Court found that the Plan Modifications
do not adversely change the treatment of the claim of any creditor or
the interest of any equity security holder of the Debtors who has not
accepted such Plan Modification and therefore, the Proposed Plan as
modified by the Plan Modification, is deemed accepted by all
creditors who have previously accepted the Proposed Plan. The hearing to consider confirmation of the
Proposed Plan is presently scheduled for May 13, 2003 at
10:00 A.M. in the Bankruptcy Court. In order to confirm a
plan of reorganization, the Bankruptcy Court, among other
things, is required to find that (i) with respect to each
impaired class of creditors and equity holders, each holder in
such class has accepted the plan or will, pursuant to the plan,
receive at least as much as such holder would receive in a
liquidation, (ii) each impaired class of creditors and
equity holders has accepted the plan by the requisite vote
(except as described in the following sentence), and
(iii) confirmation of the plan is not likely to be followed
by a liquidation or a need for further financial reorganization
of the Debtors or any successors to the Debtors unless the plan
proposes such liquidation or
reorganization. If any impaired class of
creditors or equity holders does not accept the plan and,
assuming that all of the other requirements of the Bankruptcy
Code are met, the proponents of the plan may invoke the
cram down provisions of the Bankruptcy Code. Under
these provisions, the Bankruptcy Court may confirm a plan
notwithstanding the non-acceptance of the plan by an impaired
class of creditors or equity holders if certain requirements of
the Bankruptcy Code are met. These requirements may, among other
things, necessitate payment in full for senior classes of
creditors before payment to a junior class can be made.

Under bankruptcy law, actions by creditors to
collect prepetition indebtedness owed by the Debtors at the
filing date, as well as most litigation pending against us, are
stayed and other prepetition contractual obligations may not be
enforced against the Debtors. In addition, the Debtors have the
right, subject to Bankruptcy Court approval and other
conditions, to assume or reject any prepetition executory
contracts and unexpired leases. Parties affected by these
rejections may file prepetition damage claims with the
Bankruptcy Court. The Company has prepared and submitted the
schedules setting forth the Debtors assets and liabilities
as of the date of the petition as reflected in the
Companys accounting records. The amounts of claims filed
by creditors could be significantly different from their
recorded amounts. Due to material uncertainties, it is not
possible to predict the length of time the Company will operate
under chapter 11 protection, the outcome of the proceedings
in general, whether the Company will continue to operate under
the current organizational structure, or the effect of the
proceedings on the Companys business or the recovery by
creditors and equity holders.

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Basis of Presentation

The accompanying unaudited interim consolidated
financial statements have been prepared on a going concern
basis, which contemplates continuity of operations, realization
of assets, and payment of liabilities in the ordinary course of
business, and do not reflect adjustments that might result if
the Debtors are unable to continue as a going concern. The
Debtors history of significant losses, their stockholders
deficit and their Chapter 11 Cases raise substantial doubt
regarding the Companys ability to continue as a going
concern. Continuing as a going concern is dependent upon, among
other things, the Debtors formulation of a plan or plans
of reorganization acceptable to the Bankruptcy Court and
creditors, the success of future business operations, and the
generation of sufficient cash from operations and financing
sources to meet the Companys obligations. The unaudited
consolidated financial statements do not reflect: (i) the
realizable value of assets on a liquidation basis or their
availability to satisfy liabilities; (ii) aggregate
prepetition liability amounts that may be allowed for unrecorded
claims or contingencies, or their status or priority;
(iii) the effect of any changes to the Debtors
capital structure or in the Debtors business operations as
the result of an approved plan or plans of reorganization; or
(iv) adjustments to the carrying value of assets or
liability amounts that may be necessary as a result of actions
by the Bankruptcy Court. Adjustments necessitated by a plan of
reorganization could materially change the amounts reported in
the consolidated financial statements included elsewhere herein.

Liquidity and Capital Resources

Prepetition
Capital Resources

Historically, we funded our cash requirements
with borrowings under our senior credit facility, proceeds from
the issuance of debt and equity securities and cash from
operations. As of the Petition Date, our senior credit facility
consisted of a $395.4 million term loan and a revolving credit
facility with an outstanding balance of $355.9 million. The
senior credit facility is secured by substantially all of our
assets.

As a result of our reliance on debt-based
financing facilities, we became highly leveraged. Our ability to
meet our financial obligations under these financing
arrangements was dependent on, among other things, our results
of operations and our ability to maintain compliance with our
debt covenants. Beginning in 2000, we experienced increased
financial stress and liquidity issues, as well as significant
losses from operations. At December 31, 2001, our
accumulated deficit reached approximately $970.5 million.

Despite our restructuring efforts described
below, in December 2001, we failed to make a principal payment
due on the term loan portion of our senior credit facility, an
interest payment due on our 10.375% Senior Subordinated Notes
due 2008 (the Subordinated Notes), principal and
interest payments on certain subordinated notes issued in
connection with acquisitions (the Acquisition Notes)
and certain other scheduled payments.

Under the terms of our senior credit facility,
upon an event of default, including the failure to make a
required interest payment, the senior lenders had several
rights and remedies available to them, including declaring all
amounts outstanding, together with accrued interest, to be
immediately due and payable. The senior lenders had the right to
proceed against the collateral securing the facility, which
includes substantially all of our assets. Similarly, as a result
of our failure to make interest and/or principal payments under
the Acquisition Notes and the Subordinated Notes, subject to the
subordination provisions of such instruments, the trustee or
holders of those notes may have been able to declare those
notes and accrued interest immediately due and payable. Our
other debt and lease arrangements also contain cross-default
provisions, which gave the parties thereto various remedies,
including acceleration of all amounts outstanding, foreclosure
on collateral securing such obligations and termination rights.

Our deteriorating financial condition, combined
with continuing economic weakness, heightened competition in the
construction and rental equipment industries contributed to
significant strain on our liquidity and compounded our
substantial earnings and cash flow pressures. Under these
circumstances, we determined that it was in the best interests
of our stakeholders to file Chapter 11 Cases to allow us
the opportunity to restructure our financial obligations, focus
on our operations and develop and implement a new business plan.

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As a result of filing the Chapter 11 Cases,
our lenders and parties to various contracts and agreements were
prohibited from exercising the remedies that would have been
available to them upon our default.

Pursuant to the Bankruptcy Code, our prepetition
obligations, including obligations under debt instruments,
generally may not be enforced against the Debtors, and any
actions to collect prepetition indebtedness are automatically
stayed, unless the stay is lifted by order of the Bankruptcy
Court. In addition, as debtors-in-possession, the Debtors have
the right, subject to Bankruptcy Court approval and certain
other limitations, to assume or reject executory contracts and
unexpired leases. In this context, assumption means
that the Debtors agree to perform their obligations and cure all
existing defaults under the contract or lease, and
rejection means that the Debtors are relieved from
their obligations to perform further under the contract or
lease, but are subject to a prepetition claim for damages for
the breach thereof. Any damages resulting from rejection of
executory contracts and unexpired leases will be treated as
general unsecured claims in the Chapter 11 Cases unless
such claims had been secured on a prepetition basis prior to the
Petition Date. To
date, the Debtors have rejected certain executory
contracts and unexpired leases of nonresidential real property
and the Debtors continue to review their remaining executory
contracts and unexpired leases to determine which, if any, they
will reject in the future.

Adequacy
of Capital Resources

The Debtors are now operating their businesses as
debtors-in-possession under chapter 11 of the Bankruptcy
Code. In addition to the cash requirements necessary to fund
ongoing operations, the Company has incurred, and anticipates that it
will continue to incur
significant professional fees and other restructuring costs in
connection with the Chapter 11 Cases and the restructuring
of its business operations. As a result of the uncertainty
surrounding NationsRents current circumstances, it is
difficult to predict the Companys actual liquidity needs
or sources at this time. However, based on current and anticipated levels
of operations, and efforts to reduce accounts receivable, the
Company anticipates that its cash flow from operations, together
with amounts available under the DIP Financing Facility, will be
adequate to meet its anticipated cash requirements through the
end of June 2003. In the event that cash flows and available
borrowings under the DIP Financing Facility are not sufficient
to meet future cash requirements, the Company may be required to
reduce planned capital expenditures or seek additional
financing. The Company can provide no assurances that reductions
in planned capital expenditures would be sufficient to cover
shortfalls in available cash or that additional financing would
be available or, if available, offered on acceptable terms. As a
result of the Chapter 11 Cases and the circumstances
leading to the filing thereof, NationsRents access to
additional financing is, and for the foreseeable future will
likely continue to be, very limited. The Companys
long-term liquidity requirements and the adequacy of the
Companys capital resources are difficult to predict at
this time, and ultimately cannot be determined until a plan of
reorganization has been confirmed by the
Bankruptcy Court in connection with the Chapter 11 Cases.

DIP
Financing Facility

In March 2002, the Bankruptcy Court
entered the DIP Financing Order authorizing the Debtors to enter
into the DIP Financing Facility and to grant first
priority primary liens, mortgages, security interests, liens
(including priming liens) and superiority claims on
substantially all of the assets of the Debtors to secure the DIP
Financing Facility. The original DIP Financing Facility provided the
Debtors with a revolving credit facility of up to $55.0 million
and was scheduled to expire in December 2002. In December 2002, the
Debtors amended and restated the DIP Financing Facility to increase availability
up to $75.0 million (including up to $30.0 million for
letters of credit) and to extend its term until June 30, 2003.
Under the terms of the amended and restated DIP Financing Facility,
availability is subject to a borrowing base based upon eligible
rental equipment and trade accounts receivable. Amounts
borrowed under the DIP Financing Facility bear interest per
annum equal to the agents capital index rate plus 2.00%. In
addition to a $500,000 commitment fee and a $750,000 syndication fee, there is an
unused commitment fee of 0.50%, a letter of credit fee of 3.25%,
and a letter of credit fronting fee of up to 0.25%. The DIP Financing
Facility is secured by super-priority claims and liens on the
real and personal assets of the Company that also secure the
prepetition senior credit facility. The DIP Financing Facility
contains financial covenants requiring a minimum operating cash flow, as well as
other covenants that limit,
among other things, indebtedness, liens, sales of
assets, capital expenditures, investments, and prohibit dividend
payments.

In connection with the DIP Financing Facility,
our prepetition senior credit facility was amended to provide
for subordination of the liens (to the liens under the DIP
Financing Facility) and use of cash collateral.

As of May 8, 2003, the Company had
$36.9 million of cash borrowings and had $20.0 million in letters of credit outstanding under the DIP
Financing Facility.

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##### Table of Contents



Liquidity
Requirements

Our net cash provided by operations was
$6.3 million and $26.3 million for the three months ended
March 31, 2003 and 2002, respectively. The
decrease in cash provided by operations was due primarily to
the payment of postpetition accounts payable and of obligations
arising under unexpired leases for the three months ended
March 31, 2003, whereas for the three months ended
March 31, 2002, there was a stay of pre-petition liabilities
subject to compromise and of obligations arising under unexpired
leases of nonresidential property during the 60 day period
following the Petition Date. Net cash used in investing activities
was $8.3 million for the three months ended March 31, 2003,
primarily reflecting $7.9 million for purchases of rental
equipment, $2.2 million for purchases of and improvements to
property and equipment and $1.8 million of proceeds from the sale of
rental equipment. Cash provided by
financing activities was $8.7 million for the three months ended
March 31, 2003 and was primarily a result of net
borrowings under our DIP Financing Facility and repayments of debt.

Our short-term cash requirements for our existing
operations consist primarily of expenditures to repair and
maintain our rental equipment fleet, working capital
requirements and purchase of merchandise inventory and other
operating activities. In addition, a substantial portion of our
cash generated will be used to meet postpetition operating lease
and postpetition secured purchase money note obligations.

16



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##### Table of Contents



We estimate that equipment expenditures over the
next 12 months for our existing locations and for new store
openings will be in the range of $12.0 million to $15.0 million
and proceeds from sales from used equipment will be in the range
of $3.0 million to $10.0 million, without giving
consideration to the Proposed Plan.

During the three months ended March 31,
2003, we opened 8 NationsRent stores within Lowes
stores. As of March 31, 2003, we had opened a total of 78 such
stores within Lowes stores, and expect to open 22
additional stores in 2003. We estimate that the average capital
costs associated with opening a Lowes location to be in
the range of $0.3 million to $0.5 million. See New
Stores for more information about our Lowes alliance.

We believe cash generated from operations and
borrowings under our DIP Financing Facility will be sufficient
to fund our cash requirements for existing operations, equipment
capital expenditures and new store openings through June
2003. In connection with the Proposed Plan, we are currently
negotiating exit financing to refinance the DIP Financing
Facility and provide for liquidity upon emergence from the
Chapter 11 Cases. Our ability to fund existing operations,
equipment capital expenditures and new store openings in 2003 and
beyond will depend on our ability to obtain exit financing
and the outcome of the approval process of our Proposed Plan.

2000 Restructuring Plan

During the fourth quarter of 2000, we recorded a
pre-tax restructuring charge of approximately $72.0 million
and during 2001, we recorded an additional pre-tax restructuring
charge of approximately $9.7 million. The restructuring
plan was 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.                                                                                                                                                                                                 

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##### Table of Contents



The remaining components of these charges, along
with the activity for 2003 related to these charges, are
presented in the following table (in thousands):

|                                     |  |              |       |               |  |            |   |            |  |      |   |  |  |   |   |  |  |   |       | 
|------------------------------------ |  | ------------ | ----- | ------------- |  | ---------- | - | ---------- |  | ---- | - |  |  | - | - |  |  | - | ----- | 
|                                     |  |              |       |               |  |           
|                                     |  |              |       | 2003 Activity |  |           
|                                     |  |              |       |               |  |           
|                                     |  | Reserve      |       |               |  |            |   | Reserve   
|                                     |  | Balance at   |       | Amounts       |  | Deductions |   | Balance at
|                                     |  | December 31, |       | Charged to    |  |            |   | March 31, 
|                                     |  | 2002         |       | Income        |  | Cash       |   | Non-Cash   |  | 2003
|                                     |  |              |       |               |  |            |   |            |  |     
|Employee termination severance costs |  | $            | 1,815 |               |  | $          |  |            |  | $    |  |  |  | $ |  |  |  | $ | 1,815 | 
|Facility closures                    |  |              | 324   |               |  |            |  |            |  |      |  |  |  |   |  |  |  |   | 324   | 
|                                     |  |              |       |               |  |            |   |            |  |      |   |  |  |   |   |  |  |   |       | 
|                                     |  | $            | 2,139 |               |  | $          |  |            |  | $    |  |  |  | $ |  |  |  | $ | 2,139 | 
|                                     |  |              |       |               |  |            |   |            |  |      |   |  |  |   |   |  |  |   |       | 

The remaining reserve balance at March 31,
2003 for employee termination severance costs relates to the
remaining severance payments due to employees terminated under
the 2000 restructuring plan.

The remaining reserve balance at March 31,
2003 for office closures relates to certain office equipment
leases that we have not yet received Bankruptcy Court approval
to reject.

The timing and the amount of any distribution related
to the remaining
reserve balances will be
determined by the resolution of the Chapter 11 Cases.

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 (Lowes), 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
March 31, 2003, we operated 78 NationsRent rental centers at
Lowes locations. In April 2002, the Debtors obtained
approval from the Bankruptcy Court to continue the scheduled
opening of NationsRent rental centers within select Lowes
home improvement stores. Given our recent
financial performance and the uncertainties associated with our
Chapter 11 Cases, there can be no assurance that our
relationship with Lowes will not be impaired.

Historical Results of Operations

Three Months Ended
March 31, 2003 and March 31, 2002

Revenue.Total revenue
decreased $6.1 million, or 6.2% for the three months ended
March 31, 2003 when compared to the same period in 2002. Rental revenue
decreased $6.3 million, or 6.9% for the three months ended
March 31, 2003 when compared to the same
period in 2002. Rental revenue was negatively impacted in 2003 by:
(i) the weak economy in general and particularly the continuing
weakness in non-residential construction activity which has
negatively impacted rental rates and deployment, (ii) severe winter
weather in certain of our regions in 2003 and (iii) a reduction in
average rental fleet size for the three months ended March 31, 2003
when compared to the same period in 2002.

Sales of equipment, merchandise,
service, parts and supplies increased
$0.2 million, or 3.2% for the three months ended March 31,
2003 when compared to the same period in 2002.

Gross Profit.Gross profit decreased $12.9 million, or 140.4% for the three
months ended March 31, 2003 when compared to the same period in 2002.
Gross profit as a percentage of total revenue was (4.0)% for the
three months ended March 31, 2003, compared to 9.3% for the same
period in 2002. Gross profit for the
three months ended March 31, 2003 was negatively impacted when
compared to the same period in 2002 by: (i) the decrease in rental
revenue discussed above, (ii) an increase in repairs and maintenance
expense over the prior period as a result of an increase in the
average age of our fleet, (iii) an increase in fuel expense as a
result of increased fuel prices, (iv) an increase in labor costs due
primarily to NationsRent rental centers at Lowes openings
throughout 2002 and (v) increased insurance costs.

Operating
Expenses.Selling, general and administrative expenses decreased
$0.2 million for the three months ended March 31, 2003 when compared
to the same period in 2002. The decrease in selling, general and
administrative expenses was primarily due to a decrease in salary and
wage expense for the three months ended March 31, 2003 when compared
to the same period in 2002. Selling, general and administrative
expenses as a percentage of total revenue were 22.6% and 21.4% for
the three months ended March 31, 2003 and 2002, respectively. The
1.2% increase in selling, general and administrative expenses as a
percentage of total revenue for the three months ended March 31, 2003
when compared to the same period in 2002 was primarily due to the
decrease in total revenue mentioned above.

Non-rental equipment
depreciation and amortization increased $0.3 million for the three
months ended March 31, 2003 when compared to the same period in 2002.
This increase is primarily related to an increase in depreciation
expense for property and non-rental equipment as a result of new
NationsRent rental centers at Lowes openings in 2002.

Operating Loss.Operating loss was $28.3 million for the three months ended March 31,
2003, as a result of the factors discussed above.

Other Income and
Expense.Interest expense decreased $11.1 million for the three
months ended March 31, 2003 when compared to the same period in 2002.
The decrease was due primarily to the fact that in accordance with
the American Institute of Certified Public Accountants
(AICPA) Statement of Position (SOP) 90-7,
Financial Reporting by Entities in Reorganization under the
Bankruptcy Code, interest expense is reported only to the
extent that it will be paid during the Chapter 11 Cases or that it is
probable that it will be an allowed claim. Interest expense reported
during the three months ended March 31, 2002 is primarily
attributable to pre-petition borrowings under our senior credit
facility. Interest expense reported during the three months ended
March 31, 2003 does not include interest attributable to our
pre-petition senior credit facility as these interest payments were
discontinued in 2002. The decrease in interest expense for the three
months ended March 31, 2003 was partially offset by the recording of
$0.8 million of interest expense related to the settlement of certain
operating leases that have now been recorded as debt. Contractual
interest expense and amortization of deferred financing costs not
accrued or recorded on certain pre-petition debt totaled $22.3 million
and $7.5 million for the three months ended March 31, 2003 and 2002,
respectively.

Reorganization
Items, net.Net (income)/expenses resulting from the
reorganization of our business as a result of our chapter 11 filing
were $(7.3) million and $3.2 million for the three months ended
March 31, 2003 and 2002, respectively. The amounts recorded for the
three months ended March 31, 2003 include a gain of $7.5 million
related to the settlement of operating leases and a gain of $3.2
million related to the settlement of debt. See item 1. -
Financial Statements - Note 6 -
Reorganization Items, Net.

Income Taxes.We did not record a tax benefit for the three months ended
March 31, 2003, due to the uncertainty of the realizability of
our deferred tax assets.

Net Loss.Net loss was $22.5 for the three months ended March 31, 2003, as a
result of the factors discussed above.

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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 and income may fluctuate. 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:



| |   |                                                                                                                                       
| | - | --------------------------------------------------------------------------------------------------------------------------------------
| |  | the impact of the Chapter 11 Cases;                                                                                                   
|
| |  | changes in general economic conditions including
    changes in national, regional or local construction or
    industrial activities;
|
| |  | the timing of opening new rental centers at
    Lowes 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.

19



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##### Table of Contents



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 and in the Companys Annual Report on
Form 10-K for the year ended December 31, 2002 filed with the
Securities and Exchange Commission. Such factors include, among others:



| |   |                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------
| |  | There are significant uncertainties relating to
    our Chapter 11 Cases                                             
|
| |  | We face uncertainty with respect to treatment of
    our liabilities in connection with our Chapter 11 Cases         
|
| |  | Our status as a debtor-in-possession under
    chapter 11 of the Bankruptcy Code raises going
    concern questions
|
| |  | We have substantial debt and are highly leveraged                                                                    
|
| |  | We have experienced losses which are likely to
continue and may increase in future periods                           

20



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| |   |                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------
| |  | Our
    capital resources and access to additional financing
are limited                                                          
|
| |  | We are subject to restrictions on the conduct of
    our business imposed by our financing facilities and the
    Chapter 11 Cases
|
| |  | Our equity holders will not receive
    any value or distribution for their interests under our plan of reorganization            
|
| |  | Our rental fleet is subject to residual value
    risk upon disposition                                                           
|
| |  | Our reorganization will require substantial
    effort by management                                                              
|
| |  | Our business is subject to changes in
    construction and industrial activities                                                  
|
| |  | We may not be able to execute our business
    strategy                                                                           
|
| |  | We may not be able to recover the start-up costs
    of our strategic alliance with Lowes                                        
|
| |  | The equipment rental industry is highly
    competitive and some of our competitors are financially stronger
than we are          
|
| |  | Our revenue and operating results are likely to
    continue to fluctuate                                                         
|
| |  | We must comply with various safety and
    environmental regulations that may increase our expenses and
    liabilities           
|
| |  | Some of our liabilities may not be covered by
    insurance                                                                       
|
| |  | Our operations are dependent on information
    systems                                                                           

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.




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 March 31, 2003, we had $798.6 million of
variable rate contractual indebtedness representing
approximately 69.9% of our total contractual debt outstanding, at an average
interest rate of 6.67%. At March 31, 2003, we had $27.1 million of
variable rate indebtedness not subject to compromise representing
approximately 35.2% of our total debt not subject to compromise
outstanding at an average rate of 6.08%. We do not hold or issue derivative
financial instruments for trading or speculative purposes. As of
April 2002, all of our interest rate swap agreements
had terminated or expired.




Item 4.  Controls and Procedures

NationsRent, Inc. management, including the Chief Executive Officer
and Chief Financial Officer, conducted an evaluation of the
effectiveness of disclosure controls and procedures pursuant to
Exchange Act Rule 13a-14 within 90 days prior to the filing of this report. Based on that evaluation, the Chief Executive Officer
and Chief Financial Officer concluded that the disclosure controls and procedures are effective
in ensuring that all material information required to be filed in this quarterly report has
been made known to them in a timely fashion. There have been no significant changes in internal
controls, or in factors that could significantly affect internal controls, subsequent
to the date the Chief Executive Officer and Chief Financial Officer completed their evaluation.

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##### Table of Contents






PART II  OTHER
INFORMATION




Item 1.  Legal
Proceedings

On December 17, 2001, NationsRent and all of
its subsidiaries filed the Chapter 11 Cases. The cases were consolidated for procedural
purposes and designated as Case No. 01-11628 (PJW). On
May 20, 2002, the Bankruptcy Court approved the
Debtors motion to establish a bar date for filing proofs
of claim. As a result, the Debtors selected August 5, 2002
as the bar date (the Bar Date). In connection with
the Chapter 11 Cases, proofs of claim have been
filed against the Debtors with the Bankruptcy Court or with the
Debtors claims and noticing agent, Logan & Company,
Inc. The Debtors currently are reconciling filed
claims that differ in nature, classification or amount from the
Debtors books and records through negotiations with the
applicable claimants and the filing and prosecution of
objections to such claims.

In December 2002, the Debtors filed the Proposed Plan. In February 2003,
the Bankruptcy Court approved the Disclosure Statement which, together with the
Proposed Plan, was sent to all of the Debtors creditors for approval. Under
the terms of the Proposed Plan, request for payment of administrative claims
must be filed no later than 60 days following the effective date of the
Proposed Plan, or in the cases of an administrative claim that arises in
connection with an executory contract or unexpired lease, within 60 days after
such contract or lease is assumed or rejected. Holders of administrative
claims that are based on liabilities incurred by the Debtors in the ordinary
course of business after the Petition Date are not required to file any request
for payment of such claims. On the effective date of the Proposed Plan, a
creditors trust for the benefit of general unsecured claims will be formed to
receive distributions in respect of general unsecured claims. Pursuant to the
Proposed Plan, the Debtors will assign to the creditors trust their right to
object to all general unsecured claims and to pursue all preference actions and
other claims or causes of action under sections 544 through 550 of the
Bankruptcy Code that have not been resolved or released pursuant to the
Proposed Plan. For a more detailed description of the treatment of claims
under the Proposed Plan, reference is made to the Proposed Plan, which is
incorporated herein by reference and filed as an exhibit hereto. Copies of the
Proposed Plan and Disclosure Statement are available on the Companys website
at www.nationsrent.com.

The Debtors were party to various legal
proceedings arising in the ordinary course of their business
prior to the filing of the Chapter 11 Cases, none of which
were material to the Debtors financial condition or
results of operations. All such proceedings have been stayed as
of the Petition Date, unless the stay has been or will be lifted
by the Bankruptcy Court, and any liabilities related to such
claims are subject to compromise pursuant to a plan of
reorganization in the Chapter 11 Cases.

We have also become party to legal proceedings
arising in the ordinary course of business after the Petition
Date, none of which are material to our financial condition or
results of operations.




Item 3.  Defaults Upon
Senior Securities

(a) For a detailed discussion of defaults on
senior securities, see Part I  Item 2.
Managements Discussion and Analysis of Financial
Condition and Results of Operations  Liquidity and
Capital Resources.

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Item 6.  Exhibits and
Reports on Form 8-K

(a) Exhibits

|        |      |  |  |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------- | ---- |  |  | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |  |  |            
|Number  |      |  |  | Description
|        |      |  |  |            
|        | 2.1  |  |  |            |  | First Amended Joint Plan of Reorganization, dated February 7,
2003, of NationsRent, Inc. and its subsidiaries.(13)                                                                                                                                                                                                                                                                                                                                                                                                
|        | 2.2  |  |  |            |  | Modifications to First Amended Joint Plan of
Reorganization, dated April 16, 2003, of NationsRent and its
subsidiaries.(13)                                                                                                                                                                                                                                                                                                                                                                                       
|        | 3.1  |  |  |            |  | Amended and Restated Certificate of Incorporation
    of the Company.(1)                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        | 3.2  |  |  |            |  | Amended and Restated By-Laws of the Company.(8)                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        | 3.3  |  |  |            |  | Certificate of Designation for Series A
    Convertible Preferred Stock.(4)                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | 3.4  |  |  |            |  | Certificate of Amendment to Certificate of
    Designation for Series A Convertible Preferred Stock.(3)                                                                                                                                                                                                                                                                                                                                                                                                           
|        | 3.5  |  |  |            |  | Certificate of Designation for Series B
    Convertible Preferred Stock.(5)                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | 4.1  |  |  |            |  | Unregistered 10 3/8% Global Senior
    Subordinated Notes due 2008.(2)                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 4.2  |  |  |            |  | Registered 10 3/8% Senior Subordinated Notes
    due 2008.(2)                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        | 4.3  |  |  |            |  | Senior Subordinated Guarantee dated
    December 11, 1998, of the Guarantors as defined therein.(2)                                                                                                                                                                                                                                                                                                                                                                                                               
|        | 4.4  |  |  |            |  | Indenture, dated December 11, 1998, by and
    among Company, the Guarantors and The Bank of New York.(2)                                                                                                                                                                                                                                                                                                                                                                                                         
|        | 4.5  |  |  |            |  | Registration Rights Agreement, dated
    December 11, 1998, by and among the Company, the Guarantors
    and the Initial Purchasers as defined therein.(2)                                                                                                                                                                                                                                                                                                                                                        
|        | 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.(5)                                                                                         
|        | 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.(5)                                                                                                                                                                                                                                                                                               
|        | 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.(6)
|        | 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.(7)                                                                            
|        | 4.10 |  |  |            |  | Third Amendment to the Fifth Amended and Restated
    Revolving Credit and Term Loan Agreement, dated as of
    December 14, 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)                                                                                     
|        | 4.11 |  |  |            |  | Fourth Amendment to the Fifth Amended and Restated
Revolving Credit and Term Loan Agreement, dated as of December 5,
2002, 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.(12)                                                                                                             
|        | 4.12 |  |  |            |  | Debtor In Possession Revolving Credit Agreement,
    dated as of December 18, 2001, among NationsRent, Inc. and its
    subsidiaries party thereto, as debtors and debtors in possession
    and as joint and several Borrowers, and the lending institutions
    referred to therein as Banks and Fleet National Bank, as
    administrative agent, syndication agent, swing lender, and
    issuing bank, and Fleet Securities, Inc. as lead arranger and
    book manager.(9)                                  
|        | 4.13 |  |  |            |  | Security Agreement, dated as of December 18,
    2001, among the Company, certain of its subsidiaries, and Fleet
    National Bank (f/k/a BankBoston, N.A.), as administrative
    agent.(9)                                                                                                                                                                                                                                                                                                                      
|        | 4.14 |  |  |            |  | First Amendment to Debtor In Possession Revolving
    Credit Agreement and to Security Agreement, dated as of
    January 31, 2002, by and among the Company, certain of its
    subsidiaries, the financial institutions party thereto, Fleet
    National Bank (f/k/a BankBoston, N.A.), as administrative agent,
    and First Union National Bank, as syndication agent.(9)                                                                                                                                   

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|        |      |  |  |             |  |                                                                                                                                                                                                                                                                                                                                                                                 
|------- | ---- |  |  | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |  |  |            
|Number  |      |  |  | Description
|        |      |  |  |            
|        | 4.15 |  |  |            |  | Second Amendment to Debtor In Possession
    Revolving Credit Agreement, dated as of June 28, 2002, by
    and among the Company, certain of its subsidiaries, the
    financial institutions party thereto, Fleet National Bank (f/k/a
    BankBoston, N.A.), as administrative agent, and First Union
    National Bank, as syndication agent.(10)                            
|        | 4.16 |  |  |            |  | Third Amendment to Debtor In Possession Revolving
Credit Agreement, dated as of September 27, 2002, by and among
the Company, certain of its subsidiaries, the financial institutions
party thereto, Fleet National Bank (f/k/a Bank Boston, N.A.), as
administrative agent, and First Union National Bank, syndication
agent.(11)                                              
|        | 4.17 |  |  |            |  | Amended and Restated Debtor In Possession Revolving
Credit Agreement, dated as of December 31, 2002, by and among
the Company, certain of its subsidiaries, the financial institutions
party thereto, General Electric Capital Corporation as
administrative agent, syndication
agent, and co-agent and GECC Capital Markets Group, Inc., as Lead
Arranger and Book Manager.(12)

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|        |      |  |  |             |  |                                                                                                                                                 
|------- | ---- |  |  | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |  |  |            
|Number  |      |  |  | Description
|        |      |  |  |            
|        | 10.1 |  |  |            |  | Form of Key Employee Severance Benefit Plan.(9)                                                                                                 
|        | 10.2 |  |  |            |  | Form of Key Employee Retention Bonus Plan.(9)                                                                                                   
|        | 10.3 |  |  |            |  | Executive Transition Agreement dated as of
    December 14, 2001 by and between the Company and James L.
    Kirk.(9)                           
|        | 10.4 |  |  |            |  | Employment Agreement dated as of August 19,
2002 by and between the Company and D. Clark Ogle.(11)                                              
|
|        | 10.5 |  |  |            |  | Term Sheet
Regarding Equipment Settlement Program, dated as of December 23,
2002, between Boston Rental Partners, LLC and NationsRent, Inc. (13)
|        | 99.3 |  |  |            |  | Certification Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002(13).                     
|        | 99.4 |  |  |            |  | Certification Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002(13).                     






|     |                                                                                                                       
|---- | ----------------------------------------------------------------------------------------------------------------------
|(1)  | Incorporated by reference to the Companys
    Quarterly Report on Form 10-Q for the period ended
    June 30, 1998.  
|(2)  | Incorporated by reference to the Companys
    Registration Statement on Form S-4, Commission File
    No. 333-69691. 
|(3)  | Incorporated by reference to the Companys
    Registration Statement on Form S-3, Commission File
    No. 333-88603. 
|(4)  | Incorporated by reference to the Companys
    Quarterly Report on Form 10-Q for the period ended
    June 30, 1999.  
|(5)  | Incorporated by reference to the Companys
    Quarterly Report on Form 10-Q for the period ending
    June 30, 2000. 
|(6)  | Incorporated by reference to the Companys
    Annual Report on Form 10-K for the year ended
    December 31, 2000.   
|(7)  | Incorporated by reference to the Companys
    Quarterly Report on Form 10-Q for the period ending
    June 30, 2001. 
|(8)  | Incorporated by reference to the Companys
    Current Report on Form 8-K filed on August 31, 2001.                   
|(9)  | Incorporated by reference to the Companys
    Annual Report on Form 10-K for the year ended
    December 31, 2001.   
|(10) | Incorporated by reference to the Companys
    Quarterly Report on Form 10-Q for the period ending
    March 31, 2002.
|(11) | Incorporated by reference to the Companys
Quarterly Report on Form 10-Q for the period ending September 30,
2002.    
|(12) | Incorporated by reference to the Companys
Annual Report on Form 10-K for the year ended December 31,
2002.           
|(13) | Filed herewith.                                                                                                       

(b) Reports on Form 8-K

The Company did not file any Current Reports on
Form 8-K during the quarter ending March 31, 2003.

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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.

|                   |  |                                                                                                                              
|------------------ |  | -----------------------------------------------------------------------------------------------------------------------------
|Date:  May 9, 2003 |  | By: /s/ D. CLARK OGLED. Clark Ogle
    Chief Executive Officer
    (Principal Executive Officer)                             
|                  
|Date:  May 9, 2003 |  | By: /s/ EZRA SHASHOUAEzra Shashoua
    Executive Vice President and Chief Financial Officer
    (Principal Financial Officer)
|                  
|Date:  May 9, 2003 |  | By: /s/ BRENT D. HOUSEBrent D. House
    Controller
    (Principal Accounting Officer)                                       

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NATIONSRENT, INC.

CERTIFICATIONS PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, D. Clark Ogle, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of NationsRent, Inc.;

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

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

4.  The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:



| | a)  designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b)  evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and                                                                                                  
|
| | c)  presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;                                                                                                                        

5.  The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):



| | a)  all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data
and have identified for the registrants auditors any material
weaknesses in internal controls; and
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b)  any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        

6.  The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: May 8, 2003

/s/ D. CLARK OGLE

D. Clark Ogle
Chief Executive Officer





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##### Table of Contents



CERTIFICATION

I, Ezra Shashoua, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of NationsRent, Inc.;

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

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

4.  The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:



| | a)  designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is
made known to us by others within those entities, particularly
during the period in which this quarterly report is being
prepared;
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b)  evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and                                                                                                  
|
| | c)  presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;                                                                                                                        

5.  The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):



| | a)  all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data
and have identified for the registrants auditors any material
weaknesses in internal controls; and
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b)  any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        

6.  The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent       to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: May 8, 2003

/s/ EZRA SHASHOUA
Ezra Shashoua
Executive Vice President and
Chief Financial Officer