<PAGE>   1
================================================================================


                       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 JUNE 30, 1999

                                       OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

      FOR THE TRANSITION PERIOD FROM ____________ TO ____________.


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

                        COMMISSION FILE NUMBER 001-14299

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

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

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

        450 EAST LAS OLAS BLVD.,
           FORT LAUDERDALE, FL                                 33301
(Address of principal executive offices)                     (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 [ ]

The number of shares of Common Stock, par value $0.01 per share, outstanding on
August 11, 1999 was 56,453,781.



================================================================================

<PAGE>   2

                                NATIONSRENT, INC.

                            INDEX TO QUARTERLY REPORT

                                  ON FORM 10-Q

                       FOR THE QUARTER ENDED JUNE 30, 1999


<TABLE>
<CAPTION>
                                                                                     Page
                                                                                    Number
                                                                                    ------
<S>                                                                                 <C>
                                     PART I
                              FINANCIAL INFORMATION

Item 1.  Financial Statements

  Consolidated Balance Sheets as of June 30, 1999 and December 31, 1998 ......      1

  Unaudited Consolidated Statements of Income for the Three Months and Six
     Months Ended June 30, 1999 and 1998 .....................................      2

  Unaudited Consolidated Statements of Cash Flows for the Six Months
     Ended June 30, 1999 and 1998 ............................................      3

  Notes to Unaudited Consolidated Financial Statements .......................      4

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations .................................      8

                                     PART II
                                OTHER INFORMATION

Item 1.  Legal Proceedings ...................................................     15

Item 2.  Changes in Securities and Use of Proceeds ...........................     15

Item 6.  Exhibits and Reports on Form 8-K ....................................     16

Signatures ...................................................................     18


</TABLE>


<PAGE>   3



                         PART I -- FINANCIAL INFORMATION

Item 1. Financial Statements

                                NATIONSRENT, INC.
                          CONSOLIDATED BALANCE SHEETS
                        (In Thousands, Except Share Data)


<TABLE>
<CAPTION>
                                                                          June 30,       December 31,
                                                                            1999            1998
                                                                         ----------      ----------
                                                                        (Unaudited)
<S>                                                                      <C>             <C>
                                     ASSETS

Cash and cash equivalents .........................................      $    9,953      $   10,597
Accounts receivable, net ..........................................          83,490          72,951
Inventories .......................................................          27,811          23,147
Prepaid expenses and other assets .................................          32,121          24,451
Rental equipment, net .............................................         425,574         382,573
Property and equipment, net .......................................          56,750          37,839
Intangible assets related to acquired businesses, net .............         536,702         524,254
                                                                         ----------      ----------
          Total Assets ............................................      $1,172,401      $1,075,812
                                                                         ==========      ==========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
  Accounts payable ................................................      $   40,268      $   68,177
  Accrued compensation and related taxes ..........................           5,702           4,901
  Accrued expenses and other liabilities ..........................          30,617          32,970
  Debt ............................................................         787,036         678,035
  Income taxes payable ............................................             593           3,115
  Deferred income taxes ...........................................          11,803           6,384
                                                                         ----------      ----------
          Total liabilities .......................................         876,019         793,582
                                                                         ----------      ----------
Commitments and Contingencies

Stockholders' Equity:
  Preferred stock -- $0.01 par value, 5,000,000 shares
     authorized, no shares issued and outstanding .................              --              --
  Common stock-- $0.01 par value, 250,000,000 shares
     authorized, 56,453,781 shares and 55,618,023 shares
     issued and outstanding at June 30, 1999 and December 31,
     1998, respectively ...........................................             564             556
  Additional paid-in capital ......................................         273,189         268,019
  Retained earnings ...............................................          22,629          13,655
                                                                         ----------      ----------
          Total stockholders' equity ..............................         296,382         282,230
                                                                         ----------      ----------
          Total Liabilities and Stockholders' Equity ..............      $1,172,401      $1,075,812
                                                                         ==========      ==========

</TABLE>


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



                                       1
<PAGE>   4




                                NATIONSRENT, INC.
                   UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
                      (In Thousands, Except Per Share Data)

<TABLE>
<CAPTION>
                                                                               Three Months Ended         Six Months Ended
                                                                                     June 30,                   June 30,
                                                                              --------------------       -------------------
                                                                                1999        1998            1999       1998
                                                                              --------    --------       ---------   -------
<S>                                                                           <C>         <C>            <C>         <C>
Revenue:
  Equipment rentals ....................................................      $ 96,928    $ 18,108       $ 172,028   $24,019
  Sales of equipment, merchandise, service, parts and supplies .........        33,381      17,251          60,596    20,379
                                                                              --------    --------       ---------   -------
          Total revenue ................................................       130,309      35,359         232,624    44,398
                                                                              --------    --------       ---------   -------
Cost of revenue:
  Cost of equipment rentals, excluding depreciation ....................        37,521       6,823          66,833     9,484
  Rental equipment depreciation ........................................        13,383       4,042          25,008     5,118
  Cost of sales of equipment, merchandise, service, parts and supplies .        22,465      12,226          40,631    14,479
                                                                              --------    --------       ---------   -------
          Total cost of revenue ........................................        73,369      23,091         132,472    29,081
                                                                              --------    --------       ---------   -------
Gross profit ...........................................................        56,940      12,268         100,152    15,317
Operating expenses:
  Selling, general and administrative expenses .........................        24,489       7,093          43,496     8,852
  Expenses related to abandoned merger, net ............................         3,932          --           3,932        --
  Non-rental equipment depreciation and amortization ...................         4,985         621           9,550     1,066
                                                                              --------    --------       ---------   -------
Operating income .......................................................        23,534       4,554          43,174     5,399
                                                                              --------    --------       ---------   -------
Other (income)/expense:
  Interest expense, net ................................................        15,986       2,614          30,432     3,401
  Other, net ...........................................................          (413)       (130)         (2,598)     (232)
                                                                              --------    --------       ---------   -------
                                                                                15,573       2,484          27,834     3,169
                                                                              --------    --------       ---------   -------
Income before provision for income taxes ...............................         7,961       2,070          15,340     2,230
  Provision for income taxes ...........................................         3,304         870           6,366       937
                                                                              --------    --------       ---------   -------
Net income .............................................................      $  4,657    $  1,200       $   8,974   $ 1,293
                                                                              ========    ========       =========   =======
Net income per share-- basic and diluted ...............................      $   0.08    $   0.04       $    0.16   $  0.05
                                                                              ========    ========       =========   =======
Weighted average common shares outstanding:
  Basic ................................................................        55,759      26,726          55,733    25,820
                                                                              ========    ========       =========   =======
  Diluted ..............................................................        64,768      29,711          64,714    28,018
                                                                              ========    ========       =========   =======


</TABLE>

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




                                       2
<PAGE>   5



                                NATIONSRENT, INC.
                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                                   Six Months Ended
                                                                                       June 30,
                                                                              -------------------------
                                                                                 1999           1998
                                                                              ---------       ---------
<S>                                                                           <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income .............................................................      $   8,974       $   1,293
Adjustments to reconcile net income to net cash (used in)/provided
  by operating activities:
  Depreciation and amortization ........................................         35,417           6,184
  Gain on sale of rental equipment .....................................         (9,136)         (1,321)
  Gain on sale of lift truck dealership ................................         (1,818)             --
  Deferred income tax provision ........................................          6,089             795
  Changes in operating assets and liabilities:
          Accounts receivable ..........................................        (15,295)         (4,717)
          Inventories ..................................................         (8,402)            (52)
          Prepaid expenses and other assets ............................         (7,640)         (6,654)
          Accounts payable .............................................        (26,157)         15,246
          Accrued expenses and other liabilities .......................         (3,515)           (263)
          Income taxes payable .........................................         (2,600)         (1,308)
                                                                              ---------       ---------
          Net cash (used in)/provided by operating activities ..........        (24,083)          9,203
                                                                              ---------       ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Acquisition of business, net of cash acquired .......................        (14,916)        (75,732)
   Payment of contingent acquisition consideration .....................           (500)             --
   Proceeds from sale of lift truck dealership .........................         23,315              --
   Purchases of rental equipment .......................................        (92,551)        (42,692)
   Purchases of property and equipment .................................        (23,728)         (2,234)
   Proceeds from sale of rental equipment ..............................         29,348           5,685
                                                                              ---------       ---------
          Net cash used in investing activities ........................        (79,032)       (114,973)
                                                                              ---------       ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from issuance of common stock ..............................             --          27,600
   Capital contribution ................................................             --          23,400
   Proceeds from debt ..................................................        179,278         131,918
   Repayments of debt ..................................................        (74,862)        (75,472)
   Debt issuance costs .................................................         (1,945)             --
                                                                              ---------       ---------
          Net cash provided by financing activities ....................        102,471         107,446
                                                                              ---------       ---------
Net (decrease)/increase in cash and cash equivalents ...................           (644)          1,676
Cash and cash equivalents, beginning of period .........................         10,597           1,493
                                                                              ---------       ---------
Cash and cash equivalents, end of period ...............................      $   9,953       $   3,169
                                                                              =========       =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
   Cash paid for interest ..............................................      $  35,574       $   2,050
                                                                              =========       =========
   Cash paid for income taxes ..........................................      $   5,348       $   1,520
                                                                              =========       =========

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
The Company acquired the net assets and assumed certain
   liabilities of certain businesses as follows:
   Total assets, net of cash acquired ..................................      $  24,358       $ 168,982
   Total liabilities assumed ...........................................         (2,267)        (64,491)
   Amount paid through the issuance of debt ............................         (7,175)        (28,759)
                                                                              ---------       ---------
          Net cash paid ................................................      $  14,916       $  75,732
                                                                              =========       =========


</TABLE>


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




                                       3
<PAGE>   6




                                NATIONSRENT, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                                  JUNE 30, 1999

NOTE 1 -- BASIS OF PRESENTATION

    The accompanying unaudited interim consolidated financial statements have
been prepared by NationsRent, Inc. (the "Company") and reflect all adjustments
of a normal recurring nature which are, in the opinion of management, necessary
for a fair presentation of financial results for the three and six months ended
June 30, 1999 and 1998, in accordance with generally accepted accounting
principles for interim financial reporting and pursuant to Article 10 of
Regulation S-X. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates. For
interim reporting purposes, advertising expenses are charged to earnings in
proportion to the relationship that revenue for such period bears to estimated
full year revenue and related advertising expenses. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations. These unaudited interim
consolidated financial statements should be read in conjunction with the
consolidated financial statements for the period ended December 31, 1998
appearing in the Company's Annual Report on Form 10-K/A filed with the
Securities and Exchange Commission. The results of operations for the three and
six months ended June 30, 1999 are not necessarily indicative of the results
which may be reported for the year ending December 31, 1999.

    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.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

    In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position ("SOP") 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use." SOP 98-1 establishes criteria
for determining which costs of developing or obtaining internal-use computer
software should be charged to expense and which should be capitalized. SOP 98-1
is effective for all transactions entered into in fiscal years beginning after
December 15, 1998. The Company adopted SOP 98-1 prospectively effective January
1, 1999. The adoption of SOP 98-1 did not have a material effect on the
Company's financial position or results of operations.

    In April 1998, the American Institute of Certified Public Accountants issued
SOP 98-5, "Reporting on the Costs of Start-Up Activities." SOP 98-5 requires
that all non-governmental entities expense costs of start-up activities,
including pre-operating, pre-opening and organization activities, as those costs
are incurred. The Company adopted SOP 98-5 effective January 1, 1999. The
adoption of SOP 98-5 did not have a material effect on the Company's financial
position or results of operations.

NOTE 2 -- ACQUISITIONS

    The Company made four acquisitions of equipment rental businesses during the
six months ended June 30, 1999. The aggregate consideration for these
acquisitions was $23,106,000 and consisted of (i) $15,931,000 of cash and (ii)
$7,175,000 of subordinated convertible debt. The cash portion of the
consideration was funded through borrowings under the Company's senior credit
facility (the "Credit Facility"). In addition, the Company repaid or assumed
outstanding indebtedness of the acquired companies in the aggregated amount of
$1,980,000. These acquisitions have been accounted for using the purchase method
and, accordingly, the acquired assets and assumed liabilities, including
goodwill, have been recorded at their estimated fair values as of the date of
acquisition. Purchase accounting values for these acquisitions have been
assigned on a preliminary basis, and are subject to adjustment when final
information as to the fair values of the net assets acquired is available. The
Company is awaiting information from third-party appraisers as to the fair value
of certain rental equipment acquired and the final determination of certain
liabilities assumed. The Company does not believe the final assignment of the
fair value of the net assets acquired will have a significant impact on future
operating results. The operations of the acquired businesses have been included
in the Company's consolidated statements of income since the date of
acquisition.

    The following table sets forth the estimated fair value of the assets
acquired and liabilities assumed for the aforementioned acquisition (in
thousands):

          Assets, including cash .....      $ 7,587
          Goodwill ...................       17,786
          Liabilities ................        2,267




                                       4
<PAGE>   7



                                NATIONSRENT, INC.
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                  JUNE 30, 1999

    The following table sets forth the unaudited pro forma consolidated results
of operations for the three and six months ended June 30, 1999 and 1998 giving
effect to the acquisitions completed during 1999 and 1998 as if the acquisitions
had occurred on January 1, 1998 (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                           Three Months Ended           Six Months Ended
                                                                 June 30,                   June 30,
                                                         ----------------------      ----------------------
                                                           1999          1998          1999           1998
                                                         --------      --------      --------      --------
<S>                                                      <C>           <C>           <C>           <C>
          Revenue .................................      $130,932      $121,733      $235,643      $220,746
          Net income ..............................         4,698         5,491         9,086         7,333
          Basic and diluted earnings per share ....          0.08          0.10          0.16          0.13

</TABLE>

    The above unaudited pro forma consolidated results of operations are based
upon certain assumptions and estimates which the Company believes are
reasonable. The unaudited pro forma consolidated results of operations may not
be indicative of the operating results that actually would have been reported
had the acquisitions been consummated on January 1, 1998, nor are they
necessarily indicative of results which will be reported in the future.

    During the six months ended June 30, 1999, the Company paid consideration of
$500,000 of cash and 78,973 shares of common stock to the former owners of a
previously acquired business related to the achievement of certain operating
results. The Company records amounts paid for contingent consideration as
additional purchase price once they are incurred since the consideration is
required regardless of the former owner's continued association with the
Company.

NOTE 3 -- SEASONALITY

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

NOTE 4 -- EARNINGS PER SHARE

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

<TABLE>
<CAPTION>
                                                                                Three Months Ended        Six Months Ended
                                                                                      June 30,                 June 30,
                                                                               --------------------      --------------------
                                                                                 1999         1998         1999        1998
                                                                               -------      -------      -------      -------
<S>                                                                            <C>          <C>          <C>          <C>
          Numerator:
            Numerator for basic earnings per share-- net income .........      $ 4,657      $ 1,200      $ 8,974      $ 1,293
            Interest expense on convertible subordinated debt, net of
               income taxes .............................................          751          229        1,479          329
                                                                               -------      -------      -------      -------
            Numerator-- diluted earnings per share ......................      $ 5,408      $ 1,429      $10,453      $ 1,622
                                                                               =======      =======      =======      =======
          Denominator:
            Denominator for basic earnings per
               share-- weighted-average shares ..........................       55,759       26,726       55,733       25,820
            Effect of dilutive securities:
               Convertible subordinated debt ............................        8,840        2,803        8,748        2,073
               Employee stock options ...................................          169          182          233          125
                                                                               -------      -------      -------      -------
          Denominator for diluted earnings per share -- adjusted
            weighted-average shares .....................................       64,768       29,711       64,714       28,018
                                                                               =======      =======      =======      =======
          Basic and diluted earnings per share ..........................      $  0.08      $  0.04      $  0.16      $  0.05
                                                                               =======      =======      =======      =======

</TABLE>



                                       5
<PAGE>   8


                                NATIONSRENT, INC.
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                  JUNE 30, 1999

NOTE 5 -- DEBT

    In February 1999, the Company amended its Credit Facility to increase the
total aggregate commitment to $500,000,000. At that time the term loan (the
"Term Loan") was increased to $180,000,000 and the aggregate commitment under
the revolving credit facility (the "Revolver") was increased to $320,000,000.
The Revolver has a three-year term scheduled to expire in June 2001 and the Term
Loan has a six-year term scheduled to expire in September 2004. Borrowings under
the Revolver bear interest at either the BankBoston base rate plus a percentage
ranging from 0.00% to 0.50% or, at the Company's option, the Eurodollar market
rate plus a percentage ranging from 2.00% to 2.75%. The Term Loan bears interest
ranging from 3.00% to 3.25% over the Eurodollar market rate. The percentage over
the BankBoston base rate or the Eurodollar market rate is based on the Company's
financial performance as measured by the total funded debt ratio. The Credit
Facility is secured by a security interest in substantially all of the assets of
the Company. The Credit Facility also imposes, among other covenants, a tangible
assets to senior debt covenant, a restriction on all of the Company's retained
earnings including the declaration and payment of cash dividends, consent
requirements on certain acquisitions and a restriction on the ratio of total
funded debt to earnings before interest, income taxes, depreciation and
amortization.

    In February 1999, the Company completed an exchange offer to replace its
privately issued 10.375% Senior Subordinated Notes due 2008 with publicly
registered notes.

NOTE 6 -- COMPREHENSIVE INCOME

    The objective of reporting comprehensive income is to disclose all changes
in equity of an enterprise that result from transactions and other economic
events in a period other than transactions with owners. The comprehensive income
of the Company was equal to net income for all periods presented.

NOTE 7 -- NON-RECURRING ITEMS

    In January of 1999, the Company received net proceeds of $23,315,000 related
to the sale of a lift truck dealership acquired as part of an acquisition made
in April 1998. The carrying value of the tangible assets sold was $14,770,000
resulting in proceeds in excess of carrying value of $8,545,000. The Company
recorded a pre-tax gain of $1,818,000 based on the increase in value of the
dealership since the date of acquisition. The remaining $6,727,000 of proceeds
in excess of carrying value was recorded as a reduction of goodwill. The Company
continues to evaluate the carrying value of its goodwill for impairment in
accordance with SFAS 121.

    In January 1999, the Company entered into an Agreement and Plan of Merger
(the "Merger Agreement") with Rental Service Corporation ("RSC"), a Delaware
corporation, pursuant to which the Company was to be merged with and into RSC
with RSC continuing as the surviving corporation to be named RSC NationsRent. On
May 20, 1999, the Company entered into a Termination and Release Agreement (the
"Termination Agreement"), with RSC, pursuant to which the Company and RSC have
mutually agreed to terminate the Merger Agreement and to abandon the proposed
merger between the parties. As part of the Termination Agreement, RSC paid the
Company $6,000,000 as reimbursement of out-of-pocket costs and expenses incurred
in connection with or relating to the Merger Agreement and the Termination
Agreement and the performance of the Company's obligations thereunder through
the date of termination. The Company recorded a pre-tax charge of $3,932,000 in
the second quarter of 1999 for the unreimbursed portion of expenses incurred
related to the proposed merger.

NOTE 8 -- SUBSEQUENT EVENTS

    The Company has completed two acquisitions of rental equipment businesses
since June 30, 1999 for aggregate consideration of $31,320,000. Such
consideration consisted of an aggregate (i) $28,320,000 of cash and (ii)
$3,000,000 of subordinated convertible debt. The cash portion of the
consideration was funded through borrowings under the Credit Facility. In
addition, the Company repaid or assumed outstanding indebtedness of the acquired
companies in the aggregate amount of $22,005,000. Each of the acquisitions has
been accounted for using the purchase method.

    In July 1999, the Company amended its Credit Facility to increase the total
aggregate commitment to $800,000,000. At that time the Term Loan was increased
to $300,000,000 and the aggregate commitment under the Revolver was increased to
$500,000,000. The Revolver has a five-year term scheduled to expire in July 2004
and the Term Loan has a seven-year term scheduled to expire in July 2006.
Borrowings under the Revolver bear interest at either the BankBoston base rate
or, at the Company's option, the Eurodollar market rate plus a percentage
ranging from 1.50% to 2.50%. The Term Loan bears interest at 3.00% over the
Eurodollar market rate. The percentage over the Eurodollar market rate is based
on the Company's financial performance as measured by the total funded debt
ratio. The Credit Facility is secured by a security interest in substantially
all of the assets of the Company. The Credit Facility also imposes, among other


                                       6
<PAGE>   9


                                NATIONSRENT, INC.
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                  JUNE 30, 1999

covenants, a tangible assets to senior debt covenant, a restriction on all of
the Company's retained earnings including the declaration and payment of cash
dividends, consent requirements on certain acquisitions and a restriction on the
ratio of total funded debt to earnings before interest, income taxes,
depreciation and amortization.

    In July 1999, the Company entered into a Preferred Stock Purchase Agreement
with NR Holdings Limited and NR Investments Limited, affiliates of Investcorp,
S.A., pursuant to which the Company agreed to sell 100,000 shares of its
perpetual Series A Convertible Preferred Stock ("Preferred Stock") for an
aggregate purchase price of $100,000,000. On July 20, 1999, pursuant to the
Purchase Agreement, the Company sold 78,000 shares of Preferred Stock for an
aggregate purchase price of $78,000,000. The proceeds of the initial closing
were used to pay down amounts outstanding under the Credit Facility. The sale of
the additional 22,000 shares of Preferred Stock, for an aggregate purchase price
of $22,000,000, is subject to stockholder approval at a special meeting of the
stockholders scheduled to be held within the next 30 to 60 days. Regardless of
whether the stockholders approve the sale of the additional 22,000 shares of
Preferred Stock, the first closing for the 78,000 shares of Preferred Stock will
remain consummated. The 100,000 shares of Preferred Stock, when issued, will be
convertible into approximately 14,286,000 shares of Common Stock, based on a
liquidation preference of $1,000 per share of Preferred Stock and a conversion
price of $7.00 per share of Common Stock. The holders of the Preferred Stock
were granted certain demand and piggy-back registration rights with respect to
the shares of the Company's Common Stock issuable upon conversion of the
Preferred Stock, pursuant to a Registration Rights Agreement among the Company,
NR Holdings Limited, NR Investments Limited and certain of the Company's
stockholders. The terms of the Preferred Stock are set forth in the Certificate
of Designation filed as an exhibit to this Quarterly Report on Form 10-Q along
with the Preferred Stock Purchase Agreement and the Registration Rights
Agreement.














                                       7
<PAGE>   10
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, 1998 appearing in our Annual Report on Form 10-K/A filed with the
Securities and Exchange Commission.

GENERAL

    NationsRent is one of the fastest growing equipment rental companies in the
United States. We have acquired a platform of equipment rental businesses
concentrated in selected markets and are building a network of nationally
branded locations. As of August 10, 1999, we operated more than 140 equipment
rental locations in 24 states. We have become a leading provider of rental
equipment as a result of our strategy to acquire core businesses, open or
acquire additional locations concentrated around those businesses and expand our
fleet of rental equipment. We believe that this cluster strategy enables us to
increase profitability in our acquired stores and achieve profitability in our
newly opened locations more quickly than our competitors. By implementing the
cluster strategy and expanding our fleet of rental equipment, we are able to
provide a full range of rental equipment to customers with a wide variety of
equipment rental needs.

    NationsRent seeks to acquire businesses that have:

      o     strong positions in their geographic market;

      o     experienced local management teams that will continue to work with
            us following the acquisition;

      o     high quality inventory of rental equipment; and

      o     physical and operating characteristics that are suited to conversion
            to the NationsRent format.

    During the period January 1, 1999 through August 10, 1999, we have acquired
six equipment rental businesses. We paid an aggregate of approximately $54.5
million for these six acquisitions which consisted of approximately:

      o     $44.3 million in cash; and

      o     $10.2 million of convertible subordinated debt.

    We funded the cash portion of the consideration paid for these acquisitions
with borrowings under our senior credit facilities. The acquisitions have been
accounted for using the purchase method and, accordingly, the acquired assets
and assumed liabilities have been recorded at their estimated fair values as of
the date of acquisition. Purchase accounting values for certain acquisitions
have been assigned on a preliminary basis, and are subject to adjustment when
additional information as to the fair values of the net assets acquired is
available. We are awaiting information from third-party appraisers as to the
fair value of certain rental equipment acquired and the final determination of
certain liabilities assumed. We do not believe the final assignment of the fair
value of the net assets acquired will have a significant impact on future
operating results.

    After making an acquisition, we convert acquired locations to the
NationsRent format. Distinguishing characteristics of this format include
drive-through lanes, clearly marked equipment aisles, prominent use of the
NationsRent logo and colors and attractive, well-organized and clean store
facilities. The cost of converting an acquired location to the NationsRent
format varies depending on the physical properties of the acquired location and
the condition, breadth and depth of rental equipment inventory at such location,
which are factors considered in the selection and pricing of acquisition
candidates. Once we have established a presence in a particular market, we may
open new locations in that geographic area or adjacent areas. During the six
months ended June 30, 1999, we opened six of the 12 new locations we plan to
open in 1999. We continue to evaluate the need for new locations as we acquire
equipment rental companies in new markets. The cost of opening our new locations
has varied depending on whether we leased or purchased the underlying real
property, the size of the location and the breadth and depth of inventory at
each location. See "-- Liquidity and Capital Resources."

    We derive our revenue from equipment rental, sales of new and used
equipment, spare parts and supplies and maintenance and repair services. Rental
revenue is dependent on several factors including demand for rental equipment,
the amount and quality of equipment available for rent, rental rates and general
economic conditions. Revenue generated from the sale of used equipment is
affected by price, general economic conditions and the condition of the
equipment. Revenue from the sale of new equipment is affected by price and
general economic conditions. Revenue from the sale of spare parts and supplies
as well as maintenance and repair services is primarily affected by equipment
rental and sales volume.

    The principal components of our cost of revenue include depreciation of
rental equipment, costs of new and used equipment sold, personnel costs,
occupancy costs, the cost of rental equipment under operating leases, repair and
maintenance costs and vehicle operations.

                                       8
<PAGE>   11



Rental equipment depreciation is calculated using the straight-line method over
the estimated useful life of such equipment. The range of useful lives estimated
by management for rental equipment is primarily three to ten years and is
depreciated to a salvage value ranging from zero to ten percent of original
cost. Since the second quarter of 1999, we have financed approximately $210.9
million of rental fleet additions with operating leases. The use of these leases
reduces reported depreciation expense. Rental equipment depreciation expense as
a percent of rental revenue was 13.8% and 14.5% for the three and six months
ended June 30, 1999, respectively, and when adjusted for the impact of the
operating leases, it would have been 19.7% for each of such periods.

    Selling, general and administrative expenses include management salaries,
advertising and marketing, travel, administrative and clerical salaries and data
processing.

    Non-rental equipment depreciation and amortization includes the depreciation
of fixed assets that are not offered for rent, amortization of leasehold
improvements and amortization of intangible assets related to the acquired
businesses.

    On May 20, 1999 we abandoned our merger with Rental Service Corporation
("RSC") and entered into a Termination and Release Agreement (the "Termination
Agreement") with RSC. The Termination Agreement provided that RSC would
reimburse us for $6.0 million of expenses incurred in connection with the
transaction. The $6.0 million was paid by RSC and offset a total of $9.9 million
of expenses incurred in connection with the transaction. The net $3.9 million of
unreimbursed expenses is included in operating expenses in the three months
ended June 30, 1999.

HISTORICAL RESULTS OF OPERATIONS

                THREE AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998

    REVENUE. The following table sets forth our revenue by type for the three
months ended June 30, 1999 and 1998 (in thousands, except percentages):

<TABLE>
<CAPTION>
                                          Three Months Ended June 30,        Six Months Ended June 30,
                                       -------------------------------   -------------------------------
                                              1999           1998               1999           1998
                                       ---------------  --------------   ---------------  --------------
<S>                                    <C>        <C>   <C>       <C>    <C>        <C>   <C>       <C>
     Equipment rentals ............... $ 96,928   74.4% $18,108   51.2%  $172,028   74.0% $24,019   54.1%
     Sales of equipment, merchandise,
         service, parts and supplies .   33,381   25.6%  17,251   48.8%    60,596   26.0%  20,379   45.9%
                                       --------  -----  -------  -----   --------  -----  -------  -----
                                       $130,309  100.0% $35,359  100.0%  $232,624  100.0% $44,398  100.0%
                                       ========  =====  =======  =====   ========  =====  =======  =====


</TABLE>


    Total revenue increased $95.0 million and $188.2 million for the three and
six months ended June 30, 1999, respectively, when compared to the same periods
in 1998. These increases were due primarily to the inclusion of revenue from
businesses acquired during 1998 and 1999. Also contributing to the growth in
revenue was an increase in equipment rental revenue resulting from the expansion
of our rental fleet at existing locations. Equipment rental revenue as a
percentage of total revenue was 74.4% and 74.0% for the three and six months
ended June 30, 1999, respectively, up from 51.2% and 54.1% for the same periods
in 1998. The higher mix of rental revenue in the 1999 periods is due primarily
to the acquisition of companies with a higher percentage of equipment rentals
and the expansion of our rental fleet. It also is the result of a decrease in
the sales of new equipment, parts and service resulting from the sale in January
1999 of a lift truck dealership that derived the majority of its revenue from
sales of new equipment and related parts and service.

    GROSS PROFIT. Gross profit increased $44.7 million and $84.8 million for the
three and six months ended June 30, 1999, respectively, when compared to the
same periods in 1998. These increases in gross profit were primarily due to the
increase in total revenue. Gross profit as a percentage of total revenue was
43.7% and 43.1% for the three and six months ended June 30, 1999, respectively,
compared to 34.7% and 34.5% for the same periods in 1998. The increase in gross
profit as a percentage of total revenue was due to the growth in revenue from
equipment rentals. We derive higher margins from equipment rental revenue than
revenue from sales of equipment, merchandise, service, parts and supplies.

    OPERATING EXPENSES. Selling, general and administrative expenses increased
$17.4 million and $34.6 million for the three and six months ended June 30,
1999, respectively, when compared to the same periods in 1998. These increases
were due primarily to the inclusion of such costs from companies acquired during
1998 and 1999 and additional corporate expenses including costs associated with
our strategic marketing initiatives. Also included in operating expenses for the
three and six months ended June 30, 1999 is the aforementioned $3.9 million of
unreimbursed expenses incurred in connection with the abandoned merger with RSC.
Selling, general and administrative expenses as a percentage of total revenue
were 21.8% and 18.7% for the three and six months ended June 30, 1999,
respectively.

    Non-rental equipment depreciation and amortization increased $4.4 million
and $8.5 million for the three and six months ended June 30, 1999, respectively,
when compared to the same periods in 1998. These increases were due primarily to
the increase in goodwill amortization in connection with acquisitions completed
during 1998 and 1999.

    OPERATING INCOME. Operating income increased $19.0 million and $37.8 million
for the three and six months ended June 30, 1999, respectively, when compared to
the same periods in 1998. Operating income as a percentage of total revenue was
18.1% and 18.6% for the three and six months ended June 30, 1999, respectively,
compared to 12.9% and 12.2% for the same periods in 1998. Theses increases were
due primarily to the higher percentage of revenue from equipment rentals in
1999.


                                       9
<PAGE>   12




    OTHER INCOME AND EXPENSE. Interest expense increased $13.4 million and $27.0
million for the three and six months ended June 30, 1999, respectively, when
compared to the same periods in 1998. These increases were due primarily to the
increase in debt incurred to finance acquisitions and the expansion of our
rental fleet during 1998 and 1999. Interest expense is primarily attributable to
borrowings under our senior credit facilities, notes issued to finance the
purchase of equipment, subordinated notes issued to sellers of businesses we
acquired and our senior subordinated notes issued in December 1998.

    Other income for the six months ended June 30, 1999 included a pre-tax gain
of approximately $1.8 million from the sale in January of a lift truck
dealership. See "Note 7 to the unaudited consolidated financial statements."

    INCOME TAXES. Our effective income tax rate for the three and six months
ended June 30, 1999 was 41.5%. The amount above statutory income tax rates is
attributable primarily to non-deductible goodwill amortization for federal
income tax purposes.

    NET INCOME. Net income increased $3.5 million and $7.7 million for the three
and six months ended June 30, 1999, respectively, when compared to the same
periods in 1999. The increase in net income was due to the factors discussed
above, offset by the aforementioned charge related to the abandoned merger with
RSC. Net income, excluding the charge related to the abandoned merger with RSC,
would have been $6.9 million or $0.12 diluted earnings per share and $11.3
million or $0.20 diluted earnings per share for the three and six months ended
June 30, 1999, respectively.

LIQUIDITY AND CAPITAL RESOURCES

    Our primary uses of cash have been the funding of acquisitions and capital
expenditures. To date, we have funded our cash requirements primarily with
borrowings under our senior credit facilities, proceeds from the issuance of
debt and equity securities, equity contributions from our founding stockholders
and cash provided by operations.

    Our net cash used by operations was $24.1 million for the six months ended
June 30, 1999 compared to net cash provided by operations of $9.2 million for
the same period in 1998. The increase in cash used by operations was due
primarily to an increase in the working capital required as a result of our
acquisitions and to fund our internal growth. Net cash used in investing
activities was $79.0 million for the six months ended June 30, 1999. Cash used
in investing activities in the period was primarily a result of $92.6 million of
purchases of rental equipment, $23.7 million for purchases of and improvements
to property and equipment and cash consideration of $14.9 million for the
acquisition of businesses. Cash provided by financing activities was $102.5
million for the six months ended June 30, 1999 and was primarily a result of net
borrowings under our senior credit facilities.

    In July 1999, we increased our senior credit facilities from $500.0 million
to $800.0 million consisting of a $300.0 million term loan due July 2006 and a
$500.0 million revolving line of credit due July 2004. The credit facilities can
be used to complete permitted acquisitions, make capital expenditures, enter
into standby letters of credit or for working capital and other general
corporate purposes. Borrowings under the revolving line of credit bear interest
at either the BankBoston, N.A. base rate or, at our option, the Eurodollar
market rate plus a percentage ranging from 1.50% to 2.50%. The term loan bears
interest at 3.00% over the Eurodollar market rate. The percentage over the
Eurodollar market rate is based on our financial performance as measured by the
total funded debt ratio. The credit facilities are secured by a security
interest in substantially all of our assets. The credit facilities also impose,
among other covenants, a tangible assets to senior debt covenant, a restriction
on all of our retained earnings including cash dividends, consent requirements
on certain acquisitions and a restriction on the ratio of total funded debt to
earnings before interest, income taxes, depreciation and amortization. On June
30, 1999, $253.6 million and $180.0 million of cash borrowings were outstanding
under the revolving line of credit and term loan, respectively.

    In July 1999, we entered into an agreement to sell 100,000 shares of
perpetual convertible preferred stock for an aggregate purchase price of $100
million to certain affiliates of Investcorp, S.A., a global investment group
with a prior successful investment in the equipment rental industry. The
preferred stock is convertible into approximately 14.3 million shares of our
common stock at any time based on a liquidation preference of $1,000 per share
of preferred stock and a conversion price of $7.00 per share of common stock.
The private placement of $78.0 million was completed in July with the remaining
$22.0 million to be funded following stockholder approval to be sought at a
special meeting over the next 30 to 60 days. Proceeds from the private placement
have been and will be used to repay borrowings under our revolving credit
facility.

    During the six months ended June 30, 1999, we added $95.8 million of new
equipment to our rental equipment fleet using operating leases. These operating
leases have terms expiring over the next seven years.


                                       10
<PAGE>   13


    Our short-term cash requirements for our existing operations consist
primarily of:

      o     capital expenditures to maintain, modernize and expand our rental
            equipment inventory;

      o     working capital requirements; and

      o     repair and maintenance of rental equipment, purchase of merchandise
            inventory and other operating activities.

    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 $175.0
million to $225.0 million, net of proceeds from used equipment sales.
Approximately one-third of the estimated net capital expenditures is to replace
existing rental equipment. We believe that we will be able to finance our
short-term cash needs through borrowings under the senior credit facilities, the
use of equipment leases and cash generated from operations. We estimate that
such sources will be sufficient to fund the cash required for our existing
operations for at least 12 months.

    During the six months ended June 30, 1999, we opened six new locations in
markets where we already have a presence. We estimate that the average aggregate
capital costs associated with each such new location were in the range of $2.0
million to $4.5 million. We expect to open a total of 12 new locations in 1999.
We believe that cash generated from operations and borrowings under our senior
credit facilities will be sufficient to fund these costs without the issuance of
additional debt or equity securities.

    We are developing a management information system that became operational at
certain locations in the fourth quarter of 1998. We estimate the total cost to
complete development and installation of the system at our existing locations
will range from $6.0 million to $8.0 million over the next several years and we
believe cash generated from operations and borrowings under our senior credit
facilities will be sufficient to fund these costs.

    We plan to continue our acquisition strategy and believe that, in connection
with new acquisitions, we will be required to make additional expenditures to
expand and modernize rental equipment of acquired companies. We expect to
finance future acquisitions and related rental equipment expenditures using
cash, capital stock, notes and/or assumption of indebtedness. To fully implement
our growth strategy and meet the resulting capital requirements, we will be
required to increase amounts available under our senior credit facilities or
raise additional capital through issuance of additional debt or equity
securities. There can be no assurance that additional capital, if and when
required, will be available on terms satisfactory to us or at all.

    There may be liabilities that we fail or are unable to discover in the
course of performing due diligence investigations on each company or business we
have acquired or seek to acquire in the future. Such liabilities could include
those arising from employee benefits contribution obligations of a prior owner
or non-compliance with applicable federal, state or local environmental
requirements by prior owners for which we, as a successor owner, may be
responsible. We try to minimize these risks by conducting such due diligence,
including employee benefit and environmental reviews, as we deem appropriate
under the circumstances. However, we cannot assure that we have identified, or
in the case of future acquisitions, will identify, all existing or potential
risks. We also generally require each seller of acquired businesses or
properties to indemnify us against undisclosed liabilities. In some cases this
indemnification obligation may be supported by deferring payment of a portion of
the purchase price or other appropriate security. However, we cannot assure that
the indemnification, even if obtained, will be enforceable, collectible or
sufficient in amount, scope or duration to fully offset the possible liabilities
associated with the business or property acquired. Any such liabilities,
individually or in the aggregate, could have a material adverse effect on our
business, financial condition or results of operations.

SEASONALITY AND FLUCTUATIONS IN OPERATING RESULTS

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

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

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

      o     the timing of acquisitions and opening of new locations;

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


                                       11
<PAGE>   14


      o     competitive pricing pressures; and

      o     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 five months of their opening. In addition,
when we purchase new rental equipment, the depreciation related to such
equipment may contribute to near-term margin decline, because such equipment may
not initially generate revenue at a rate that is sufficient to match such
increased depreciation expense. As such, the opening of new rental locations and
the purchase of new equipment to expand our current rental equipment inventory
may reduce our operating margins during a start-up period.

INFLATION

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

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

    In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position ("SOP") 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use." SOP 98-1 establishes criteria
for determining which costs of developing or obtaining internal-use computer
software should be charged to expense and which should be capitalized. SOP 98-1
is effective for all transactions entered into in fiscal years beginning after
December 15, 1998. The Company adopted SOP 98-1 prospectively effective January
1, 1999. The adoption of SOP 98-1 did not have a material effect on the
Company's financial position or results of operations.

    In April 1998, the American Institute of Certified Public Accountants issued
SOP 98-5, "Reporting on the Costs of Start-Up Activities." SOP 98-5 requires
that all non-governmental entities expense costs of start-up activities,
including pre-operating, pre-opening and organization activities, as those costs
are incurred. The Company adopted SOP 98-5 effective January 1, 1999. The
adoption of SOP 98-5 did not have a material effect on the Company's financial
position or results of operations.

YEAR 2000

    Since many computer systems and other equipment with embedded chips or
microprocessors use only two digits to represent the year, these systems may be
unable to process accurately certain data before, during or after the year 2000.
As a result, business and governmental entities are at risk for possible
miscalculations or systems failures causing disruptions in their business
operations. This is commonly known as the "Year 2000" issue. We may be affected
by Year 2000 issues in our own information technology ("IT") systems or non-IT
systems, as well as by Year 2000 issues related to IT and non-IT systems
operated by third parties.

    STATE OF READINESS

    Our plan to address the Year 2000 issue is structured in five phases:
inventory, assessment, correction, testing and implementation. The inventory
phase is an investigation of all our operations to identify the software and
hardware of all of our systems. The assessment phase is an analysis of each
component of each system to determine date sensitivity to the year 2000. The
correction phase is the effort to correct, replace, upgrade or eliminate
non-compliant hardware and software. The testing phase involves verifying that
corrections to our systems are Year 2000 compliant. Finally, the implementation
phase is the effort to deploy the corrected and verified systems throughout our
current operations.

    IT SYSTEMS. Our current state of progress with our IT systems is as follows:

      o     INVENTORY AND ASSESSMENT. Since our inception, we have acquired 42
            equipment rental companies, each with its own information system for
            rental counter operations, inventory control and financial
            reporting. In assessing the systems of the companies that we
            acquired, we determined that there was no one system that could
            manage our projected growth and that was Year 2000 compliant. We
            determined, therefore, that we needed to develop our own Year 2000
            compliant management information system. We believe the inventory
            and assessment phases of our IT systems are complete.

      o     CORRECTION AND TESTING. During the second quarter of 1998, we began
            developing our own management information system that included
            software modules for rental counter operations, inventory control,
            database and financial reporting to replace the information systems
            of businesses we have acquired. During the development of our
            systems, we tested and validated them for Year 2000 compliance and
            selected our third-party vendors for the software modules and
            hardware components of our new system based on their certification
            of Year 2000 compliance. To date, we have handled our Year 2000 plan
            with our own internal



                                       12
<PAGE>   15



            personnel and have not engaged any third-party consultants. The
            system is functional and we believe we are completed with the
            testing of all of the components. We are not currently aware of any
            Year 2000 problems relating to our new IT system or the systems and
            hardware supplied by third parties which would have a material
            effect on our business, results of operations or financial
            condition.

      o     IMPLEMENTATION. For us, the implementation phase consists of the
            conversion and replacement of the non-Year 2000 compliant systems of
            our acquired businesses with our new management information system.
            During October 1998, we began converting our operations to our new
            management information system. As of August 12, 1999, we operated
            144 locations. We have completely converted 74 of these locations to
            our new system and have converted 24 additional locations to the
            financial reporting component of our system. We expect to have all
            of our current operations fully converted to our new system by
            September 30, 1999.

    NON-IT SYSTEMS. We have completed the inventory and assessment phase for our
non-IT systems (such as chips and microprocessors that may be embedded in our
facilities and equipment) at our corporate offices and we believe we are
approximately 50% complete in the inventory and assessment phase at our store
locations. We believe there is a minimal amount of dependence of our critical
operations on non-IT systems. However, since we have not completed our inventory
and assessment at our store locations, we cannot currently determine if there
are any potential Year 2000 problems that would cause a material adverse effect
on our business, results of operations or financial condition. We expect to
complete all five phases of our Year 2000 plan for our non-IT systems by
September 30, 1999.

    THIRD-PARTY SYSTEMS. We rely on third-party suppliers for operating
supplies, merchandise for sale, utilities, transportation, equipment for rent
and retail sales and other key services. Interruption of any such third-party's
operations due to Year 2000 issues could have a material adverse effect on our
business, results of operations or financial condition. We have begun efforts to
evaluate the progress of our critical third-party suppliers relative to their
Year 2000 issues. Letters and questionnaires are being sent to all essential
third parties with which we do business to assess their Year 2000 readiness. To
the extent necessary, we will seek alternative third-party relationships if
circumstances warrant. We have begun efforts to evaluate the progress of our
critical customers' relative to their Year 2000 issues. We believe we are
approximately 50% complete in the determination of our third-party suppliers and
customers Year 2000 readiness. We expect to complete the applicable phases of
our Year 2000 plan for our third-party systems by September 30, 1999.

    COSTS

    The majority of our costs to address the Year 2000 issue are related to the
development of our new management information system. Such costs principally
consist of licensing and developing software and purchasing hardware. To date,
we have spent a total of approximately $8.8 million for the new system, of which
approximately $6.6 million was related to software development and approximately
$2.2 million was related to purchases of hardware. Such costs have been
capitalized in accordance with generally accepted accounting principles. We
expect to incur in the range of approximately $0.5 million to $1.0 million in
additional software and hardware costs installing the new IT system at the rest
of our current locations in 1999. The aggregate cost of conversion and training
employees to the new IT system, which will be charged to expense in the period
incurred, is expected to range from $0.7 million to $1.0 million. Although we do
not expect to incur significant expenses to address the Year 2000 issue beyond
our capital investment in the new IT system software and hardware, Year 2000
problems may require us to incur unanticipated expenses which could have a
material adverse effect on our business, financial condition or results of
operations. These costs account for approximately 90% of our information
technology budget for 1999. To date, the development of our management
information system has run concurrent with and been a part of our Year 2000
compliance efforts. No other major projects have been deferred as a result of
the system development effort. The source of the funds for our Year 2000
compliance efforts has been cash generated from operations and borrowings under
our senior credit facilities.

    RISKS RELATING TO THE COMPANY'S FAILURE TO BECOME YEAR 2000 COMPLIANT

    Our worst case scenarios resulting from the Year 2000 issue include:

      o     Interruptions in our customers' operations which could prevent them
            from renting our equipment, using our services or paying for
            equipment rented or services rendered.

      o     Disruptions to our utilities and other service providers which could
            prevent our locations from operating in the normal course of
            business.

      o     Failure of our suppliers' operations which could result in our
            inability to obtain rental equipment and other supplies to meet the
            demands of our customers.

      o     Failure to convert all of our locations to our new management
            information system before December 31, 1999 which could prevent such
            locations from processing invoices from our counter systems and
            tracking accounts receivable, equipment



                                       13
<PAGE>   16



             utilization and other critical financial data. This could also
             prevent our locations from sharing equipment and data to service
             our customers in a timely manner.

      o     Failure to convert all of the systems of the businesses we acquire
            during 1999 to our system prior to the year 2000 which could prevent
            these locations from being integrated into the rest of our
            operations.

    Such failures could materially and adversely affect our business, results of
operations and financial condition. Due to the general uncertainty inherent in
the Year 2000 problem, resulting in part from the uncertainty of the Year 2000
readiness of third-party suppliers and customers, we are unable to determine at
this time what our most reasonably likely worst case scenario would be or
whether the consequences of Year 2000 failures will have a material adverse
impact on our results of operations, liquidity or financial condition. As we
complete all of the phases of our Year 2000 compliance plan, we expect to have a
better understanding of our most reasonably likely worst case scenarios and will
tailor our contingency plans accordingly.

    CONTINGENCY PLANS

    Our Year 2000 efforts are ongoing and our overall plan, as well as the
consideration of contingency plans, will continue to evolve as new information
becomes available. Contingency plans for Year 2000-related interruptions are
being developed and will include emergency backup and recovery procedures for
lost data, manual invoicing, billing and collection procedures, identification
of alternate suppliers, acceleration of conversion times to our management
information system and increasing inventory levels of critical supplies and
rental equipment. All plans are expected to be completed by the end of the third
quarter of 1999. These activities are intended to provide a means of managing
risk, but cannot eliminate the potential for disruption due to third-party
failure.

    We are currently considering what our final contingency plans will be in the
event that we are not able to bring all of our existing and acquired systems
into Year 2000 compliance by the end of 1999. We currently plan to complete such
contingency plans by September 30, 1999.

FORWARD LOOKING STATEMENTS

    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." Although we believe that our
plans, intentions and expectations reflected in or suggested by such
forward-looking statements are reasonable, we cannot assure you that such plans,
intentions or expectations will be achieved. Important factors that could cause
actual results to differ materially from our forward-looking statements are set
forth below and elsewhere in this Quarterly Report on Form 10-Q. Such factors
include, among others: the ability to develop and implement operational and
financial systems to manage rapidly growing operations; competition in our
principal businesses; the ability to integrate and successfully operate acquired
businesses and the risks associated with such businesses; the ability to obtain
financing on terms acceptable to us to finance our growth strategy, and for us
to operate within the limitations imposed by financing arrangements; and the
ability to properly assess and capitalize on future business opportunities.





                                       14
<PAGE>   17


                          PART II -- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     In connection with our proposed merger with Rental Service Corporation
(which merger was abandoned in May 1999), in April 1999, United Rentals, Inc.
and UR Acquisition Corporation (collectively, "United Rentals") commenced a
tender offer for all the issued and outstanding shares of Rental Service's
common stock, at a price of $22.75 per share in cash. On April 13, 1999, United
Rentals commenced a consent solicitation of Rental Service's stockholders to
remove the board of directors of Rental Service and replace the board with
nominees of United Rentals. On April 16, 1999, the Rental Service's board of
directors determined that United Rental's tender offer was inadequate and was
not in the best interests of Rental Service or its stockholders. Rental
Service's board of directors recommended that Rental Service's stockholders
reject the tender offer and not tender their shares of Rental Service's common
stock pursuant to the tender offer. In May 1999, we mutually agreed with Rental
Service to terminate our merger agreement and abandoned our proposed merger. In
June 1999, Rental Service announced that it had entered into a definitive
agreement with Atlas Copco North America, Inc., pursuant to which Atlas Copco
agreed to acquire all of the outstanding shares of Rental Service common stock
for $29.00 per share in cash. Following such announcement, United Rentals
announced that it would not compete for Rental Service and withdrew its tender
offer and consent solicitation.

    As part of our agreement with Rental Service to abandon our proposed merger,
in May 1999, we filed a notice of voluntary dismissal with prejudice in the
Company's lawsuit against United Rentals, Bradley S. Jacobs, John N. Milne and
Goldman, Sachs & Co. in the Circuit Court in Broward County, Florida. As a
result of the termination of our merger agreement with Rental Service, in June
1999, United Rentals filed a stipulation of dismissal as to the Company and
James L. Kirk without prejudice in United Rentals' lawsuit against James L.
Kirk, the Company and Rental Service in the United States District Court for the
District of Connecticut. As a result of United Rentals' withdrawal of its tender
offer and consent solicitation, in July 1999, United Rentals, Rental Service and
the Company together filed a stipulation of dismissal without prejudice in
United Rentals' lawsuit against Rental Service, Rental Service's board of
directors and the Company in the Court of Chancery of the State of Delaware. For
a more detailed description of these cases, please see the Company's Quarterly
Report on Form 10-Q for the period ended March 31, 1999.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

    (c) RECENT SALES OF UNREGISTERED SECURITIES

    During the period covered by this report (April 1, 1999 through June 30,
1999), the Company has issued securities in the transactions set forth below.
Each of these transactions was intended to be exempt from the registration
requirements of the Securities Act of 1933, as amended, by virtue of Section
4(2) thereunder based on being issued in a transaction not involving a public
offering.

    In February 1999, in connection with the acquisition of Hudson Rental
Center, Inc., the Company issued promissory notes in the aggregate principal
amount of $600,000, which are convertible into shares of common stock at the
option of the holder at a price of $10.00 per share.

    In April 1999, in connection with the acquisition of the assets of JR.
Equipment, Inc. d/b/a Howe Rental & Sales, the Company issued promissory notes
in the aggregate principal amount of $3,075,000, which are convertible into
shares of common stock at the option of the holder at a price of $10.00 per
share. In June 1999, the Company converted $2,460,000 principal amount of such
notes into 410,000 shares of common stock.

    In April 1999, in connection with the acquisition of the assets of Placer
Equipment Rentals, Inc., the Company issued a promissory note in the principal
amount of $1,500,000, which is convertible into shares of common stock at the
option of the holder at a price of $10.00 per share. In June 1999, the Company
converted $1,000,000 principal amount of such note into 166,666 shares of common
stock.

    In June 1999, the Company converted the $610,000 principal amount of a
convertible promissory note, originally issued in connection with the
acquisition of Advanced Construction Equipment, Inc., into 101,666 shares of
common stock.

    In June 1999, in connection with the acquisition of Gold Coast Ariel Lift,
Inc. and Villella Holding Company, the Company issued an aggregate of 15,952
shares of common stock to the stockholders of such companies.

    From April 1, 1999 to June 30, 1999, the Company granted options to certain
of its employees to purchase an aggregate of 2,025,500 shares of common stock at
exercise prices ranging from $5.50 to $5.625 per share. These options generally
vest over a four year period at the rate of 25% per year beginning on the first
anniversary of the date of grant.


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<PAGE>   18



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) EXHIBITS

     EXHIBIT
     NUMBER                             DESCRIPTION
     --------                           -----------

        2.1     Agreement and Plan of Merger, dated as of January 20, 1999,
                between the Company and Rental Service Corporation. (5)
        2.2     Stock Option Agreement, dated as of January 20, 1999, between
                the Company and Rental Service Corporation.(5)
        2.3     Stock Option Agreement, dated as of January 20, 1999, between
                Rental Service Corporation and the Company.(5)
        2.4     Voting Agreement, dated as of January 20, 1999, between Kirk
                Holdings Limited Partnership, H. Family investments, Inc. and
                Huizenga Investments Limited Partnership, as shareholders, and
                Rental Service Corporation.(5)
        2.5     Termination and Release Agreement, dated May 20, 1999, between
                the Company and Rental Service Corporation.(6)
        2.6     Stock Option Termination Agreement dated May 20, 1999, between
                the Company and Rental Service Corporation.(6)
        3.1     Amended and Restated Certificate of Incorporation of the
                Company.(2)
        3.2     Amended and Restated By-Laws of the Company.(1)
        3.3*    Certificate of Designation for Series A Convertible Preferred
                Stock
        4.1     Unregistered 10 3/8% Global Senior Subordinated Notes due
                2008.(4)
        4.2     Registered 10 3/8% Senior Subordinated Notes due 2008.(4)
        4.3     Senior Subordinated Guarantee dated December 11, 1998, of the
                guarantors.(4)
        4.4     Indenture, dated December 11, 1998, by and among Company, the
                Guarantors and The Bank of New York.(4)
        4.5     Registration Rights Agreement, dated December 11, 1998, by and
                among the Company, the Guarantors and the Initial Purchasers as
                defined therein.(4)
        4.6*    Fourth Amended and Restated Revolving Credit and Term Loan
                Agreement, dated as of July 20, 1999, by and among the Company,
                its subsidiaries, BankBoston N.A., as administrative agent,
                Bankers Trust Company, as syndication agent, BancBoston
                Robertson Stevens Inc. and Deutsche Bank Securities Inc., as
                coarrangers, and the other lending institutions named therein.
        4.7*    Amended and Restated Security Agreement, dated as of July 20,
                1999, between the Company, its subsidiaries and BankBoston, N.A.
        4.8*    Amended and Restated Stock Pledge Agreement, dated as of July
                20, 1999, between the Company, NRGP, Inc. and BankBoston, N.A.
        10.1    Stock Purchase Agreement, dated August 15, 1997, by and among
                the Company, Sam's and the shareholders of Sam's, together with
                Amendment nos.1-6.(1)
        10.2    Form of Unsecured Subordinated Promissory Notes-Sam's.(1)
        10.3    Form of Unsecured Convertible Promissory Notes-Sam's.(1)
        10.4    Form of Unsecured Contingent Convertible Subordinated Promissory
                Notes-Sam's(1)
        10.5    Agreement, dated September 22, 1997, between the Company and
                Gary L. Gabriel.(1)
        10.6    Asset Purchase Agreement, dated December 8, 1997, by and among
                NationsRent of Ohio, Inc., R&R Rental, Inc. ("R&R) and the sole
                shareholder of R&R, together with an Amendment dated December
                10, 1997.(1)
        10.7    Form of Unsecured Subordinated Promissory Note-R&R.(1)
        10.8    Asset Purchase Agreement, dated December 8, 1997, as amended,
                among NationsRent of Indiana, Inc. and C&E Rental and Service,
                Inc. ("C&E"), together with an Amendment dated December 23,
                1997.(1)
        10.9    Form of Unsecured Convertible Subordinated Promissory Note
                C&E.(1)
        10.10   Stock Purchase Agreement, dated December 20, 1997, as amended,
                among NationsRent of West Virginia, Inc., Titan, together with
                an Amendment dated December 31, 1997.(1)
        10.11   Form of Unsecured Convertible Subordinated Promissory Note -
                Titan.(1)
        10.12   Stock Purchase Agreement, dated March 24, 1998, among the
                Company, Bode-Finn Limited Partnership ("Bode- Finn") and the
                shareholders of Bode-Finn, together with Amendment No. 1, dated
                April 6, 1998, and Amendment No. 2, dated April 17, 1998.(1)
        10.13   Form of Unsecured Convertible Subordinated Promissory
                Notes-Bode-Finn.(1)
        10.14   Form of Warrant-Bode-Finn.(1)
        10.15   Registration Rights Agreement, dated May 5, 1998, among the
                Company, Bode-Finn, and Raymond E. Mason Foundation.(1)
        10.16   Asset Purchase Agreement, dated March 25, 1998, among
                NationsRent of Indiana, Inc., RFL, Enterprises, Inc. and the
                sole shareholder of RFL Enterprises, Inc. ("RFL").(1)



                                       16
<PAGE>   19



        10.17   Asset Purchase Agreement, dated April 21, 1998, among
                NationsRent of Florida, Inc. and Naples Rent-All and Sales
                Company, Inc. ("Naples").(1)
        10.18   Form of Unsecured Convertible Subordinated Promissory
                Note-Naples.(1)
        10.19   Stock Purchase Agreement, dated May 7, 1998, among the Company,
                Raymond Equipment Co. ("Raymond Equipment") and the shareholders
                of Raymond Equipment.(1)
        10.20   Form of Unsecured Subordinated Promissory Notes-Raymond
                Equipment.(1)
        10.21   Form of Unsecured Convertible Subordinated Promissory
                Notes-Raymond Equipment.(1)
        10.22   Asset Purchase Agreement, dated May 14, 1998, among the Company
                and General Rental, Inc.(1)
        10.23   Stock Purchase Agreement, dated May 30, 1998, among the Company,
                J. Kelly Co., Inc. ("J. Kelly") and the shareholders of J.
                Kelly.(1)
        10.24   Form of Unsecured convertible Subordinated Promissory Note-J.
                Kelly.(1)
        10.25   Form of Registration Rights Agreement among the Company and the
                shareholders of J. Kelly.(1)
        10.26   Asset Purchase Agreement, dated June 7, 1998, among the Company,
                Associated Rental Equipment Management Company, Inc.
                ("Associated") and the sole shareholder of Associated.(1)
        10.27   Form of Unsecured Convertible Subordinated Promissory
                Note-Associated.(1)
        10.28   Form of Registration Rights Agreement-Associated.(1)
        10.29   Form of Subscription Agreement, dated May 1998, between the
                Company and certain subscribers.(1)
        10.30*  NationsRent Amended and Restated 1998 Stock Option Plan.
        10.31   Form of Stock Option Agreement.(1)
        10.32   Amended and Restated Purchase Agreement, dated as of September
                9, 1998, by and among NationsRent, Inc., Ray L. O'Neal, Inc.,
                Arenco, L.L.C., Don R. O'Neal, Elizabeth M. O'Neal and the
                O'Neal Revocable Trust dated December 29, 1987.(3)
        10.33   Unsecured Convertible Subordinated Promissory Note, dated as of
                October 213, 1998, from the Company to Ray L. O'Neal, Inc.(3)
        10.34*  Preferred Stock Purchase Agreement, dated July 20, 1999, by and
                among the Company, NR Holdings Limited and NR Investments
                Limited.
        10.35*  Registration Rights Agreement, dated as of July 20, 1999, by and
                between the Company, NR Holdings Limited, NR Investments
                Limited, James L. Kirk and H. Wayne Huizenga
        27.1*   Financial Data Schedule (for SEC use only)

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

    *  Filed herewith

(1)   Incorporated by reference to the Company's Registration Statement on Form
      S-1, as amended, Commission File No. 333-56233.
(2)   Incorporated by reference to the Company's Quarterly Report on Form 10-Q
      for the period ended June 30, 1998.
(3)   Incorporated by reference to the Company's Current Report on Form 8-K
      filed on November 9, 1998.
(4)   Incorporated by reference to the Company's Registration Statement on Form
      S-4, Commission File No. 333-69691.
(5)   Incorporated by reference to the Company's Current Report on Form 8-K
      filed on April 8, 1999.
(6)   Incorporated by reference to the Company's Current Report on Form 8-K
      filed on May 21, 1999.

(b) REPORTS ON FORM 8-K

    We filed a Current Report on Form 8-K dated April 4, 1999, as amended on
Form 8-K/A, relating to the Agreement and Plan of Merger, dated as of
January 20, 1999, between the Company and Rental Service Corporation.

    We filed a Current Report on Form 8-K dated May 21, 1999 relating to the
termination of the Agreement and Plan of Merger, dated as of January 20, 1999,
between the Company and Rental Service Corporation.



                                       17
<PAGE>   20





                                   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: August 16, 1999                  By: /s/ James L. Kirk
                                           ----------------------------------
                                           James L. Kirk
                                           Chairman of the Board and
                                           Chief Executive Officer
                                           (Duly Authorized Officer)



Date: August 16, 1999                  By: /s/ Gene J. Ostrow
                                           ----------------------------------
                                           Gene J. Ostrow
                                           Executive Vice President and
                                           Chief Financial Officer
                                           (Principal Financial Officer)



Date: August 16, 1999                  By: /s/ Kris E. Hansel
                                           ----------------------------------
                                           Kris E. Hansel
                                           Vice President and Controller
                                           (Principal Accounting Officer)



                                       18
<PAGE>   21


                                  EXHIBIT INDEX

EXHIBIT
NUMBER                                      DESCRIPTION

            3.3         Certificate of Designation for Series A Convertible
                        Preferred Stock

            4.6         Fourth Amended and Restated Revolving Credit and Term
                        Loan Agreement, dated as of July 20, 1999, by and among
                        the Company, its subsidiaries, BankBoston N.A., as
                        administrative agent, Bankers Trust Company, as
                        syndication agent, BancBoston Robertson Stevens Inc. and
                        Deutsche Bank Securities Inc., as coarrangers, and the
                        other lending institutions named therein.

            4.7         Amended and Restated Security Agreement, dated as of
                        July 20, 1999, between the Company, its subsidiaries and
                        BankBoston, N.A.

            4.8         Amended and Restated Stock Pledge Agreement, dated as of
                        July 20, 1999, between the Company, NRGP, Inc. and
                        BankBoston, N.A.

            10.30       NationsRent Amended and Restated 1998 Stock Option Plan.

            10.34       Preferred Stock Purchase Agreement, dated July 20, 1999,
                        by and among the Company, NR Holdings Limited and NR
                        Investments Limited.

            10.35       Registration Rights Agreement, dated as of July 20,
                        1999, by and between the Company, NR Holdings Limited,
                        NR Investments Limited, James L. Kirk and H. Wayne
                        Huizenga

            27.1        Financial Data Schedule (for SEC use only)



















                                       19