<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                Amendment No. 1
                                      on
                                  FORM 10-K/A

                       FOR ANNUAL AND TRANSITION REPORTS
                    PURSUANT TO SECTIONS 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

(Mark One)

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

   For the fiscal year ended December 31, 2000.

[ ]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 1-14387
                             United Rentals, Inc.
                        Commission File Number 1-13663
                     United Rentals (North America), Inc.
          (Exact Names of Registrants as Specified in Their Charters)

                      Delaware                               06-1522496
                      Delaware                               06-1493538
           State or Other Jurisdiction of                 (I.R.S. Employer
            Incorporation or Organization               Identification Nos.)

             Five Greenwich Office Park,
               Greenwich, Connecticut                          06830
      (Address of Principal Executive Offices)               (Zip code)

    Registrants' telephone number, including area code: (203) 622-3131

    Securities registered pursuant to Section 12(b) of the Act:

                 Title of Each Class                  Name of Each Exchange on
                                                          Which Registered
Common Stock, $.01 par value, of United Rentals, Inc. New York Stock Exchange

    Securities registered pursuant to Section 12(g) of the Act: None

    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
    ng requirements for the past 90 days.                   [X] Yes  [ ] No

    Indicate by check mark if disclosure of delinquent filers pursuant to item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

    As of October 1, 2001, there were 73,295,189 shares of United Rentals, Inc.
common stock outstanding. The aggregate market value of such common stock held
by non-affiliates of the registrant at October 1, 2001 was approximately $797.2
million. Such aggregate market value was calculated by using the closing price
of such common stock as of such date on the New York Stock Exchange of $17.10.
There is no market for the common stock of United Rentals (North America),
Inc., all outstanding shares of which are owned by United Rentals, Inc.

    Documents incorporated by reference: Certain sections of the Proxy
Statement of United Rentals, Inc. to be filed pursuant to Regulation 14A under
the Securities Exchange Act of 1934 within 120 days of the registrant's fiscal
year are incorporated by reference into Part III of this Form 10-K.

    This combined Form 10-K is separately filed by (i) United Rentals, Inc. and
(ii) United Rentals (North America), Inc. (which is a wholly owned subsidiary
of United Rentals, Inc.). United Rentals (North America), Inc. meets the
conditions set forth in general instruction (I)(1) (a) and (b) of Form 10-K and
is therefore filing this form with the reduced disclosure format permitted by
such instruction.

<PAGE>

                           FORM 10-K/A REPORT INDEX

<TABLE>
<CAPTION>
              10-K/A Part
              and Item No.                               Page No.
              ------------                               --------
              <C>          <S>                           <C>

              PART II
              Item 6       Selected Financial Data......     2
              Item 8       Financial Statements and
                           Supplementary Data...........     4

              PART IV
              Item 14      Exhibits, Financial Statement
                           Schedules and Reports on Form
                           8-K..........................    61
</TABLE>

<PAGE>

PART II

Item 6. Selected Financial Data

    The data presented below with respect to the Company should be read in
conjunction with the Consolidated Financial Statements and related Notes
thereto of the Company included elsewhere in this Report and Item
7--"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

    During the periods presented below, the Company completed certain
acquisitions that were accounted for as poolings-of-interests (including a
merger in September 1998 with U.S. Rentals) and others that were accounted for
as purchases. The selected financial data presented below has been restated for
all periods presented to include the accounts of the businesses acquired in
transactions accounted for as poolings-of-interests (excluding one such
transaction which was not material) as if the Company and these businesses
acquired were combined for all periods presented. The accounts of businesses
acquired in transactions accounted for as purchases are included from their
respective acquisition dates. In view of the fact that the Company's operating
results for the periods presented below were impacted by acquisitions that were
accounted for as purchases, the Company believes that its results of operations
for the years presented are not directly comparable. See Note 3 of the Notes to
the Consolidated Financial Statements of the Company included elsewhere in this
Report.

    Our previously outstanding Series A Perpetual Convertible Preferred Stock
and Series B Perpetual Convertible Preferred Stock were exchanged for Series C
Perpetual Convertible Preferred Stock and Series D Perpetual Convertible
Preferred Stock, respectively. This exchange was effected subsequent to June
30, 2001. The balance sheet data under the heading "Pro Forma" adjusts the
historical balance sheet data to give effect to the exchange, as if it had
occurred on December 31, 2000. For additional information concerning the
exchange, see note 2 to the audited consolidated financial statements of our
company included herein.
<TABLE>
<CAPTION>
                                                                                   Year Ended December 31,
                                                                    -----------------------------------------------------
                                                                      1996      1997       1998        1999       2000
                                                                    --------  --------  ----------  ---------- ----------
                                                                        (dollars in thousands, except per share data)
<S>                                                                 <C>       <C>       <C>         <C>        <C>
Income statement data:
Total revenues..................................................... $354,478  $489,838  $1,220,282  $2,233,628 $2,918,861
Total cost of revenues.............................................  241,445   340,546     796,834   1,408,710  1,830,291
                                                                    --------  --------  ----------  ---------- ----------
Gross profit.......................................................  113,033   149,292     423,448     824,918  1,088,570
Selling, general and administrative expenses.......................   54,721    70,835     195,620     352,595    454,330
Merger-related expenses............................................                         47,178
Non-rental depreciation and amortization...........................    9,387    13,424      35,248      62,867     86,301
Termination cost of deferred compensation agreements...............             20,290
                                                                    --------  --------  ----------  ---------- ----------
Operating income...................................................   48,925    44,743     145,402     409,456    547,939
Interest expense...................................................   11,278    11,847      64,157     139,828    228,779
Preferred dividends of a subsidiary trust..........................                          7,854      19,500     19,500
Other (income) expense, net........................................     (499)   (2,021)     (4,906)      8,321     (1,836)
                                                                    --------  --------  ----------  ---------- ----------
Income before provision for income taxes and extraordinary items...   38,146    34,917      78,297     241,807    301,496
Provision for income taxes.........................................      420    29,508      43,499      99,141    125,121
                                                                    --------  --------  ----------  ---------- ----------
Income before extraordinary items..................................   37,726     5,409      34,798     142,666    176,375
Extraordinary items, net (1).......................................              1,511      21,337
                                                                    --------  --------  ----------  ---------- ----------
Net income......................................................... $ 37,726  $  3,898  $   13,461  $  142,666 $  176,375
                                                                    ========  ========  ==========  ========== ==========
Pro forma provision for income taxes before extraordinary items (2) $ 15,487  $ 14,176  $   44,386
Pro forma income before extraordinary items (2)....................   22,659    20,741      33,911
Basic earnings before extraordinary items per share................ $   1.67  $   0.12  $     0.53  $     2.00 $     2.48
Diluted earnings before extraordinary items per share.............. $   1.67  $   0.11  $     0.48  $     1.53 $     1.89
Basic earnings per share (3)....................................... $   1.67  $   0.08  $     0.20  $     2.00 $     2.48
Diluted earnings per share (3)..................................... $   1.67  $   0.08  $     0.18  $     1.53 $     1.89

Other financial data:
EBITDA (4)......................................................... $123,606  $160,554  $  403,738  $  761,230 $  962,371
Depreciation and amortization......................................   74,681    95,521     211,158     343,508    414,432
Dividends on common stock..........................................
</TABLE>

<TABLE>
<CAPTION>
                                                                                       December 31,
                                                               -------------------------------------------------------------
                                                                 1996     1997      1998       1999       2000      2000
                                                               -------- -------- ---------- ---------- ---------- ----------
                                                                                                  Restated        unaudited
                                                                                                                 Pro Forma
                                                                                  (dollars in thousands)
<S>                                                            <C>      <C>      <C>        <C>        <C>        <C>
Balance sheet data:
Cash and cash equivalents..................................... $  2,906 $ 72,411 $   20,410 $   23,811 $   34,384 $   34,384
Rental equipment, net.........................................  235,055  461,026  1,143,006  1,659,733  1,732,835  1,732,835
Total assets..................................................  381,228  826,010  2,634,663  4,497,738  5,123,933  5,123,933
Total debt....................................................  214,337  264,573  1,314,574  2,266,148  2,675,367  2,675,367
Company-obligated mandatorily redeemable convertible preferred
 securities of a subsidiary trust.............................                      300,000    300,000    300,000    300,000
Series A and B preferred stock(5).............................                                 430,800    430,800
Stockholders' equity..........................................  105,420  446,388    726,230    966,686  1,115,143  1,545,943
</TABLE>

                                      2

<PAGE>

--------
(1)The Company recorded an extraordinary item (net of income taxes) of $1.5
   million in 1997 and an extraordinary item (net of income taxes) of $21.3
   million in 1998. Such charge in 1997 resulted from the prepayment of certain
   debt by U.S. Rentals. Such charge in 1998 resulted from the early
   extinguishment of certain debt and primarily reflected prepayment penalties
   on certain debt of U.S. Rentals.
(2)U.S. Rentals was taxed as a Subchapter S Corporation until its initial
   public offering in February 1997, and another company acquired in a
   pooling-of-interests transaction was taxed as a Subchapter S Corporation
   until being acquired by the Company in 1998. In general, the income or loss
   of a Subchapter S Corporation is passed through to its owners rather than
   being subjected to taxes at the entity level. Pro forma provision for income
   taxes before extraordinary items and pro forma income before extraordinary
   items reflect a provision for income taxes as if all such companies were
   liable for federal and state income taxes as taxable corporate entities for
   all periods presented.
(3)The Company's earnings during 1997 were impacted by $20.3 million of
   expenses relating to the termination of certain deferred compensation
   expenses in connection with U.S. Rentals' initial public offering, a $7.5
   million charge to recognize deferred tax liabilities of U.S. Rentals and an
   extraordinary item (net of income taxes) of $1.5 million. The Company's
   earnings during 1998 were impacted by merger-related expenses of $47.2
   million ($33.2 million net of taxes), a $4.8 million charge to recognize
   deferred tax liabilities of a company acquired in a pooling-of-interests
   transaction and an extraordinary item (net of income taxes) of $21.3
   million. The Company's earnings during 1999 were impacted by $18.2 million
   ($10.8 million net of taxes) of expenses incurred related to a terminated
   tender offer. Excluding such amounts, (i) basic earnings per share for the
   years ended 1997, 1998 and 1999 would have been $0.70, $1.10 and $2.15,
   respectively, and (ii) diluted earnings per share for the years ended 1997,
   1998 and 1999 would have been $0.66, $1.00 and $1.65, respectively.
(4)EBITDA is defined as net income (excluding (i) non-operating income and
   expense, (ii) a $20.3 million non-recurring charge incurred by U.S. Rentals
   in 1997 arising from the termination of deferred compensation agreements
   with certain executives, (iii) $47.2 million in merger-related expenses in
   1998 related to the three acquisitions accounted for as
   poolings-of-interests, including the merger with U.S. Rentals, and (iv) $8.3
   million of expenses that are included in selling, general and administrative
   expenses for 1999 and which related to a terminated tender offer), plus
   interest expense, income taxes and depreciation and amortization. EBITDA
   data is presented to provide additional information concerning the Company's
   ability to meet its future debt service obligations and capital expenditure
   and working capital requirements. However, EBITDA is not a measure of
   financial performance under generally accepted accounting principles.
   Accordingly, EBITDA should not be considered an alternative to net income or
   cash flows as indicators of the Company's operating performance or
   liquidity.
(5)We issued series A and B perpetual convertible preferred stock in 1999 and
   included such preferred in stockholders' equity. In July 2001, the SEC
   issued guidance to all public companies as to when redeemable preferred
   stock may be classified as stockholders' equity. Under this guidance, the
   series A and B preferred would not be included in stockholders' equity
   because this stock would be subject to mandatory redemption on a hostile
   change of control. On September 28, 2001, we entered into an agreement
   effecting the exchange of new series C and D perpetual convertible preferred
   for the series A and B preferred. The series C and D preferred stock is not
   subject to mandatory redemption on a hostile change of control, and will be
   included in stockholders' equity under the recent SEC guidance. The effect
   of the foregoing is that our perpetual convertible preferred stock is
   included in stockholders' equity as of September 28, 2001 and thereafter,
   but is outside of stockholders' equity for earlier dates. In all other
   respects, the financial statements remain unchanged, including total assets
   and liabilities, revenues, operating income, net income and earnings per
   share.

                                      3

<PAGE>

Item 8. Financial Statements and Supplementary Data

                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                             Page
                                                                                             ----
<S>                                                                                          <C>
(1) Consolidated Financial Statements:
   Report of Independent Auditors...........................................................   5
   United Rentals, Inc. Consolidated Balance Sheets--December 31, 2000 and 1999.............   6
   United Rentals, Inc. Consolidated Statements of Operations for the years ended
     December 31, 2000, 1999 and 1998.......................................................   7
   United Rentals, Inc. Consolidated Statements of Stockholders' Equity for the years ended
     December 31, 2000, 1999 and 1998.......................................................   8
   United Rentals, Inc. Consolidated Statements of Cash Flows for the years ended
     December 31, 2000, 1999 and 1998.......................................................   9
   Notes to Consolidated Financial Statements...............................................  11
   Report of Independent Auditors...........................................................  41
   United Rentals (North America), Inc. Consolidated Balance Sheets--December 31, 2000
     and 1999...............................................................................  42
   United Rentals (North America), Inc. Consolidated Statements of Operations for the years
     ended December 31, 2000, 1999 and 1998.................................................  43
   United Rentals (North America), Inc. Consolidated Statements of Stockholder's Equity for
     the years ended December 31, 2000, 1999 and 1998.......................................  44
   United Rentals (North America), Inc. Consolidated Statements of Cash Flows for the years
     ended December 31, 2000, 1999 and 1998.................................................  45
   Notes to Consolidated Financial Statements...............................................  46
(2) Financial Statement Schedules:
   Report of Independent Auditors on Financial Statement Schedules..........................  55
   Schedule I Condensed Financial Information of the Registrant.............................  56
   Schedule II Valuation and Qualifying Accounts............................................  60
</TABLE>

    Schedules other than those listed are omitted as they are not applicable or
the required or equivalent information has been included in the financial
statements or notes thereto.

                                      4

<PAGE>

                        REPORT OF INDEPENDENT AUDITORS

Board of Directors
United Rentals, Inc.

    We have audited the accompanying consolidated balance sheets of United
Rentals, Inc. as of December 31, 2000 and 1999 and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
three years in the period ended December 31, 2000. These consolidated financial
statements are the responsibility of the management of United Rentals, Inc. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

    We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

    In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of United Rentals, Inc. at December 31, 2000 and 1999, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 2000 in conformity with accounting principles
generally accepted in the United States.

                                          /s/ ERNST & YOUNG LLP

MetroPark, New Jersey
February 23, 2001,
except for Note 2,
paragraphs 9, 10, and 11,
and Note 17 as to which
the date is September 28, 2001

                                      5

<PAGE>

                             UNITED RENTALS, INC.

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                             December 31
                                                                 -----------------------------------
                                                                     2000        2000        1999
                                                                 ------------ ----------  ----------
                                                                  Unaudited          Restated
                                                                  Pro Forma        (See Note 2)
                                                                 (See Note 2)
                                                                  (In thousands, except share data)
<S>                                                              <C>          <C>         <C>
Assets
Cash and cash equivalents.......................................  $   34,384  $   34,384  $   23,811
Accounts receivable, net of allowance for doubtful accounts of
  $55,624 and $58,376 at 2000 and 1999, respectively............     469,594     469,594     434,985
Inventory.......................................................     133,380     133,380     129,473
Prepaid expenses and other assets...............................     104,493     104,493      81,457
Rental equipment, net...........................................   1,732,835   1,732,835   1,659,733
Property and equipment, net.....................................     422,239     422,239     304,907
Goodwill, net of accumulated amortization of $103,219 and
  $49,556 at 2000 and 1999, respectively........................   2,215,532   2,215,532   1,853,279
Other intangible assets, net....................................      11,476      11,476      10,093
                                                                  ----------  ----------  ----------
                                                                  $5,123,933  $5,123,933  $4,497,738
                                                                  ==========  ==========  ==========
Liabilities and Stockholders' Equity
Liabilities:
   Accounts payable.............................................  $  260,155  $  260,155  $  242,946
   Debt.........................................................   2,675,367   2,675,367   2,266,148
   Deferred taxes...............................................     206,243     206,243      81,229
   Accrued expenses and other liabilities.......................     136,225     136,225     209,929
                                                                  ----------  ----------  ----------
       Total liabilities........................................   3,277,990   3,277,990   2,800,252
Commitments and contingencies
Company-obligated mandatorily redeemable convertible preferred
  securities of a subsidiary trust..............................     300,000     300,000     300,000
Series A and B preferred stock..................................                 430,800     430,800
Stockholders' equity:
   Preferred stock--$.01 par value, 5,000,000 shares
     authorized:
     Series C perpetual convertible preferred stock--$300,000
       liquidation preference, 300,000 shares issued and
       outstanding..............................................           3
     Series D perpetual convertible preferred stock--$150,000
       liquidation preference, 150,000 shares issued and
       outstanding..............................................           2
   Common stock--$.01 par value, 500,000,000 shares authorized,
     71,065,707 shares issued and outstanding in 2000 and
     72,051,095 shares issued and outstanding in 1999...........         711         711         721
   Additional paid-in capital...................................   1,196,324     765,529     786,173
   Retained earnings............................................     355,850     355,850     179,475
   Accumulated other comprehensive (loss) income................      (6,947)     (6,947)        317
                                                                  ----------  ----------  ----------
       Total stockholders' equity...............................   1,545,943   1,115,143     966,686
                                                                  ----------  ----------  ----------
                                                                  $5,123,933  $5,123,933  $4,497,738
                                                                  ==========  ==========  ==========
</TABLE>

                            See accompanying notes.

                                      6

<PAGE>

                             UNITED RENTALS, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                         Year Ended December 31
                                                                ---------------------------------------
                                                                    2000          1999         1998
                                                                 ----------    ----------   ----------
                                                                (in thousands, except per share amounts
<S>                                                             <C>           <C>          <C>
Revenues:
 Equipment rentals............................................. $2,056,683    $1,581,026   $  895,466
 Sales of rental equipment.....................................    347,678       235,678      119,620
 Sales of equipment and merchandise and other revenues.........    514,500       416,924      205,196
                                                                 ----------    ----------   ----------
Total revenues.................................................  2,918,861     2,233,628    1,220,282
Cost of revenues:
 Cost of equipment rentals, excluding depreciation.............    907,477       676,972      394,750
 Depreciation of rental equipment..............................    328,131       280,641      175,910
 Cost of rental equipment sales................................    208,182       136,678       66,136
 Cost of equipment and merchandise sales and other
   operating costs.............................................    386,501       314,419      160,038
                                                                 ----------    ----------   ----------
Total cost of revenues.........................................  1,830,291     1,408,710      796,834
                                                                 ----------    ----------   ----------
Gross profit...................................................  1,088,570       824,918      423,448
Selling, general and administrative expenses...................    454,330       352,595      195,620
Merger-related expenses........................................                                47,178
Non-rental depreciation and amortization.......................     86,301        62,867       35,248
                                                                 ----------    ----------   ----------
Operating income...............................................    547,939       409,456      145,402
Interest expense...............................................    228,779       139,828       64,157
Preferred dividends of a subsidiary trust......................     19,500        19,500        7,854
Other (income) expense, net....................................     (1,836)        8,321       (4,906)
                                                                 ----------    ----------   ----------
Income before provision for income taxes and extraordinary item    301,496       241,807       78,297
Provision for income taxes.....................................    125,121        99,141       43,499
                                                                 ----------    ----------   ----------
Income before extraordinary item...............................    176,375       142,666       34,798
Extraordinary item, net of tax benefit of $14,255..............                                21,337
                                                                 ----------    ----------   ----------
Net income..................................................... $  176,375    $  142,666   $   13,461
                                                                 ==========    ==========   ==========
Earnings per share--basic:
 Income before extraordinary item.............................. $     2.48    $     2.00   $     0.53
 Extraordinary item, net.......................................                                  0.33
                                                                 ----------    ----------   ----------
 Net income.................................................... $     2.48    $     2.00   $     0.20
                                                                 ==========    ==========   ==========
Earnings per share--diluted:
 Income before extraordinary item.............................. $     1.89    $     1.53   $     0.48
 Extraordinary item, net.......................................                                  0.30
                                                                 ----------    ----------   ----------
 Net income.................................................... $     1.89    $     1.53   $     0.18
                                                                 ==========    ==========   ==========
</TABLE>

                            See accompanying notes.

                                      7

<PAGE>

                             UNITED RENTALS, INC.

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                        Common Stock
                                                                     -----------------

                                                                       Number           Additional           Compre-
                                                                         of              Paid-in   Retained  hensive
                                                                       Shares    Amount  Capital   Earnings  Income
                                                                     ----------  ------ ---------- --------  --------
                                                                                  (In thousands, except share amounts)
<S>                                                                  <C>         <C>    <C>        <C>       <C>
Balance, December 31, 1997.......................................... 56,239,375   $562   $401,758  $ 44,068
  Comprehensive income:
   Net income.......................................................                                 13,461  $ 13,461
   Other comprehensive income:
    Foreign currency translation adjustments........................                                             (281)
                                                                                                             --------
  Comprehensive income..............................................                                         $ 13,180
                                                                                                             ========
  Issuance of common stock and warrants............................. 10,813,255    108    267,214
  Conversion of convertible notes...................................     30,947               461
  Cancellation of common stock......................................   (137,600)    (1)         1
  Reclassification of Subchapter S accumulated earnings to paid-in-
   capital..........................................................                       18,979   (18,979)
  Pooling-of-interests..............................................  1,456,997     15        (14)    1,795
  Exercise of common stock options..................................     25,025               619
  Subchapter S distributions of a pooled entity.....................                                 (3,536)
                                                                     ----------   ----   --------  --------
Balance, December 31, 1998.......................................... 68,427,999    684    689,018    36,809
  Comprehensive income:
   Net income.......................................................                                142,666  $142,666
   Other comprehensive income:
    Foreign currency translation adjustments........................                                              598
                                                                                                             --------
  Comprehensive income..............................................                                         $143,264
                                                                                                             ========
  Issuance of common stock..........................................  2,291,568     23     64,678
  Exercise of common stock options..................................  1,331,528     14     32,477
                                                                     ----------   ----   --------  --------
Balance, December 31, 1999.......................................... 72,051,095    721    786,173   179,475
  Comprehensive income:
   Net income.......................................................                                176,375  $176,375
   Other comprehensive income:
    Foreign currency translation adjustments........................                                           (7,264)
                                                                                                             --------
  Comprehensive income..............................................                                         $169,111
                                                                                                             ========
  Issuance of common stock..........................................    773,320      8      9,867
  Exercise of common stock options..................................     26,307               421
  Shares repurchased and retired.................................... (1,785,015)   (18)   (30,932)
                                                                     ----------   ----   --------  --------
Balance, December 31, 2000.......................................... 71,065,707   $711   $765,529  $355,850
                                                                     ==========   ====   ========  ========
</TABLE>
<TABLE>
<CAPTION>


                                                                      Accumulated
                                                                         Other
                                                                     Comprehensive
                                                                     (Loss) Income
                                                                     -------------

<S>                                                                  <C>
Balance, December 31, 1997..........................................
  Comprehensive income:
   Net income.......................................................
   Other comprehensive income:
    Foreign currency translation adjustments........................    $  (281)

  Comprehensive income..............................................

  Issuance of common stock and warrants.............................
  Conversion of convertible notes...................................
  Cancellation of common stock......................................
  Reclassification of Subchapter S accumulated earnings to paid-in-
   capital..........................................................
  Pooling-of-interests..............................................
  Exercise of common stock options..................................
  Subchapter S distributions of a pooled entity.....................
                                                                        -------
Balance, December 31, 1998..........................................       (281)
  Comprehensive income:
   Net income.......................................................
   Other comprehensive income:
    Foreign currency translation adjustments........................        598

  Comprehensive income..............................................

  Issuance of common stock..........................................
  Exercise of common stock options..................................
                                                                        -------
Balance, December 31, 1999..........................................        317
  Comprehensive income:
   Net income.......................................................
   Other comprehensive income:
    Foreign currency translation adjustments........................     (7,264)

  Comprehensive income..............................................

  Issuance of common stock..........................................
  Exercise of common stock options..................................
  Shares repurchased and retired....................................
                                                                        -------
Balance, December 31, 2000..........................................    $(6,947)
                                                                        =======
</TABLE>

                            See accompanying notes.

                                      8

<PAGE>

                             UNITED RENTALS, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                           Year Ended December 31
                                                                                    -----------------------------------
                                                                                      2000        1999         1998
                                                                                    ---------  -----------  -----------
                                                                                               (In thousands)
<S>                                                                                 <C>        <C>          <C>
Cash Flows From Operating Activities:
Net income......................................................................... $ 176,375  $   142,666  $    13,461
Adjustments to reconcile net income to net cash provided by operating activities:
  Depreciation and amortization....................................................   414,432      343,508      212,311
  Gain on sales of rental equipment................................................  (139,496)     (99,000)     (53,484)
  Gain on sales of businesses......................................................    (4,084)      (1,842)      (4,189)
  Write down of assets held for sale...............................................                               4,040
  Extraordinary item...............................................................                              35,592
  Deferred taxes...................................................................   109,280       41,820       27,345
Changes in operating assets and liabilities:
  Accounts receivable..............................................................     8,613      (93,716)     (53,368)
  Inventory........................................................................    69,706       (6,544)      (6,392)
  Prepaid expenses and other assets................................................   (29,848)       7,257       (3,526)
  Accounts payable.................................................................   (16,091)      64,453       39,251
  Accrued expenses and other liabilities...........................................   (76,166)      22,758        5,088
                                                                                    ---------  -----------  -----------
   Net cash provided by operating activities.......................................   512,721      421,360      216,129
                                                                                    ---------  -----------  -----------

Cash Flows From Investing Activities:
Purchases of rental equipment......................................................  (808,204)    (718,112)    (479,534)
Purchases of property and equipment................................................  (153,770)    (123,649)     (84,617)
Proceeds from sales of rental equipment............................................   347,678      235,678      119,620
Proceeds from sales of businesses..................................................    19,246        6,521       10,640
Purchases of other companies.......................................................  (347,337)    (986,790)    (911,837)
Payments of contingent purchase price..............................................   (16,266)      (8,216)      (3,956)
In-process acquisition costs.......................................................    (4,285)      (1,002)        (241)
                                                                                    ---------  -----------  -----------
   Net cash used in investing activities...........................................  (962,938)  (1,595,570)  (1,349,925)
                                                                                    ---------  -----------  -----------

Cash Flows From Financing Activities:
Proceeds from issuance of common stock, net of issuance costs......................                 64,701      207,005
Proceeds from the issuance of Series A and B preferred stock, net of issuance costs                430,800
Proceeds from debt.................................................................   456,202    1,083,616    1,263,637
Payments on debt...................................................................  (134,599)    (497,650)    (685,667)
Proceeds from sale-leaseback.......................................................   193,478       88,000       35,000
Proceeds from the issuance of redeemable convertible preferred securities..........                             300,000
Payments of financing costs........................................................   (16,408)     (19,443)     (34,982)
Proceeds from the exercise of common stock options.................................       331       26,989          619
Subchapter S distributions of a pooled entity......................................                              (3,536)
Shares repurchased and retired.....................................................   (30,950)
                                                                                    ---------  -----------  -----------
   Net cash provided by financing activities.......................................   468,054    1,177,013    1,082,076
Effect of foreign exchange rates...................................................    (7,264)         598         (281)
                                                                                    ---------  -----------  -----------
Net increase (decrease) in cash and cash equivalents...............................    10,573        3,401      (52,001)
Cash and cash equivalents at beginning of year.....................................    23,811       20,410       72,411
                                                                                    ---------  -----------  -----------
Cash and cash equivalents at end of year........................................... $  34,384  $    23,811  $    20,410
                                                                                    =========  ===========  ===========
</TABLE>

                            See accompanying notes.

                                      9

<PAGE>

                             UNITED RENTALS, INC.

              CONSOLIDATED STATEMENTS OF CASH FLOWS--(Continued)

<TABLE>
<CAPTION>
                                                                                   Year Ended December 31
                                                                             ---------------------------------
                                                                               2000        1999        1998
                                                                             ---------  ----------  ----------
                                                                                       (In thousands)
<S>                                                                          <C>        <C>         <C>
Supplemental disclosure of cash flow information:
Cash paid for interest...................................................... $ 248,763  $  124,285  $   43,157
Cash paid for taxes, net of refunds......................................... $  23,746  $   17,509  $   10,224

Supplemental schedule of non-cash investing and financing activities
The Company acquired the net assets and assumed certain liabilities of other
 companies as follows:
  Assets, net of cash acquired.............................................. $ 565,114  $1,468,567  $1,501,467
  Liabilities assumed.......................................................  (142,277)   (472,382)   (518,861)
  Less:
   Amounts paid in common stock and warrants................................   (10,000)                (60,304)
   Amounts paid through issuance of debt....................................   (65,500)     (9,395)    (10,465)
                                                                             ---------  ----------  ----------
Net cash paid............................................................... $ 347,337  $  986,790  $  911,837
                                                                             =========  ==========  ==========
</TABLE>




                            See accompanying notes.

                                      10

<PAGE>

                             UNITED RENTALS, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Basis of Presentation

    United Rentals, Inc. is principally a holding company ("Holdings") and
conducts its operations primarily through its wholly owned subsidiary United
Rentals (North America), Inc. ("URI") and subsidiaries of URI. Holdings was
incorporated in July 1998 and became the parent of URI on August 5, 1998,
pursuant to the reorganization of the legal structure of URI described in Note
9. Prior to such reorganization, the name of URI was United Rentals, Inc.
References herein to the "Company" refer to Holdings and its subsidiaries, with
respect to periods following the reorganization, and to URI and its
subsidiaries, with respect to periods prior to the reorganization. As a result
of the reorganization, Holdings' primary asset is its sole ownership of all
issued and outstanding shares of common stock of URI. URI's various credit
agreements and debt instruments place restrictions on its ability to transfer
funds to its shareholder.

    The Company rents a broad array of equipment to a diverse customer base
that includes construction industry participants, industrial companies,
homeowners and others in the United States, Canada and Mexico. The Company also
engages in related activities such as selling rental equipment, acting as a
distributor for certain new equipment and selling related merchandise and
parts. The nature of the Company's business is such that short-term obligations
are typically met by cash flow generated from long-term assets. Therefore, the
accompanying balance sheets are presented on an unclassified basis.

    The accompanying consolidated financial statements include the accounts of
the Company and its wholly owned subsidiaries, giving retroactive effect for
the reorganization for all periods presented. All significant intercompany
accounts and transactions have been eliminated. The accompanying consolidated
financial statements for the year ended December 31, 1998 include the accounts
of certain acquisitions completed in 1998 that were accounted for as
poolings-of-interests, as described in Note 3.

2. Summary of Significant Accounting Policies

Cash Equivalents

    The Company considers all highly liquid instruments with a maturity of
three months or less when purchased to be cash equivalents.

Inventory

    Inventory consists of equipment, tools, parts, fuel and related supply
items. Inventory is stated at the lower of cost or market and is net of a
reserve for obsolescence and shrinkage of $15.5 million and $16.8 million at
December 31, 2000 and 1999, respectively. Cost is determined on either a
weighted average or first-in, first-out method.

Rental Equipment

    Rental equipment is recorded at cost and depreciated over the estimated
useful lives of the equipment using the straight-line method. The range of
estimated useful lives for rental equipment is two to ten years. Rental
equipment is depreciated to a salvage value of zero to ten percent of cost.
Ordinary repair and maintenance costs are charged to operations as incurred.

                                      11

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Property and Equipment

    Property and equipment are recorded at cost and depreciated over their
estimated useful lives using the straight-line method. The range of estimated
useful lives for property and equipment is two to thirty-nine years. Ordinary
repair and maintenance costs are charged to operations as incurred. Leasehold
improvements are amortized using the straight-line method over their estimated
useful lives or the remaining life of the lease, whichever is shorter.

Intangible Assets

    Intangible assets consist of the excess of cost over the fair value of
identifiable net assets of businesses acquired and non-compete agreements. The
non-compete agreements are being amortized on a straight-line basis for a
period ranging from three to eight years. The remaining intangible assets are
being amortized on a straight-line basis over forty years.

Long-Lived Assets

    Long-lived assets are recorded at the lower of amortized cost or fair
value. As part of an ongoing review of the valuation of long-lived assets, the
Company assesses the carrying value of such assets if facts and circumstances
suggest they may be impaired. If this review indicates that the carrying value
of these assets may not be recoverable, as determined by a nondiscounted cash
flow analysis over the remaining useful life, the carrying value would be
reduced to its estimated fair value. There have been no material impairments
recognized in these financial statements.

Derivative Financial Instruments

    Derivative financial instruments, which are periodically used by the
Company in the management of its interest rate and foreign currency exposures,
are accounted for on an accrual basis. Income and expense are recorded in the
same category as that arising from the related asset or liability. The fair
value of these agreements are not recognized in the financial statements.
Derivative financial instruments are not used for trading purposes.

Fair Value of Financial Instruments

    The carrying amounts reported in the balance sheets for accounts
receivable, accounts payable, accrued expenses and other liabilities
approximate fair value due to the immediate to short-term maturity of these
financial instruments. The fair values of the Credit Facility, Term Loan B,
Term Loan C, Term Loan D, receivables securitization and certain other debt are
determined using current interest rates for similar instruments as of December
31, 2000 and 1999 and approximate the carrying value of these financial
instruments due to the fact that the underlying instruments include provisions
to adjust interest rates to approximate fair market value. The estimated fair
value of the Company's other financial instruments at December 31, 2000 and
1999 are based upon available market information and are as follows:

<TABLE>
<CAPTION>
                                            2000                       1999
                                 -------------------------- --------------------------
                                 Carrying Amount Fair Value Carrying Amount Fair Value
                                 --------------- ---------- --------------- ----------
                                                    (In thousands)
<S>                              <C>             <C>        <C>             <C>
Redeemable convertible preferred
  securities....................    $300,000      $133,125     $300,000      $192,375
Series A and B preferred........     430,800       228,480      430,800       291,210
Senior subordinated notes.......     951,153       702,500      950,653       906,400
Other debt......................      94,086        94,086       73,745        73,745
</TABLE>

                                      12

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Preferred Stock

    The Company issued Series A Perpetual Convertible Preferred Stock ("Series
A Preferred") and Series B Perpetual Convertible Preferred Stock ("Series B
Preferred") in 1999 and included such preferred in stockholders' equity. In
July 2001, the SEC issued guidance to all public companies as to when
redeemable preferred stock may be classified as stockholders' equity. This
guidance indicates that preferred stock that would be subject to redemption on
the occurrence of an event outside the control of the issuer may not be
classified as equity and that the probability of the event occurring is not a
factor to be considered. Under this guidance, the Series A Preferred and Series
B Preferred would not be included in stockholders' equity because this stock
would be subject to mandatory redemption on a hostile change of control. On
September 28, 2001, the Company entered into an agreement effecting the
exchange of new Series C Perpetual Convertible Preferred Stock ("Series C
Preferred") for the Series A Preferred and new Series D Perpetual Convertible
Preferred Stock ("Series D Preferred") for the Series B Preferred (see note
17). The Series C Preferred and Series D Preferred stock is not subject to
mandatory redemption on a hostile change of control, and will be classified as
stockholders' equity under the recently issued SEC guidance.

    The effect of the foregoing is that the Company's perpetual convertible
preferred stock will be classified as stockholders' equity as of September 28,
2001 and thereafter, but will be classified outside of stockholders' equity for
earlier dates. Accordingly, the Company has restated the accompanying balance
sheets to show its $430.8 million of perpetual convertible preferred stock
under "Series A and B Preferred Stock" rather than under "Stockholders'
Equity." The Company has also made a corresponding change to the related
Consolidated Statements of Stockholders' Equity. In all other respects, the
financial statements remain unchanged, including total assets and liabilities,
revenues, operating income, net income and earnings per share. The Company's
balance sheets for dates after September 28, 2001, will include the perpetual
convertible preferred stock in stockholders' equity.

    The pro forma amounts on the accompanying balance sheet gives effect to the
above-referenced exchange, as if it had occurred on December 31, 2000.

Revenue Recognition

    Revenue related to the sale of equipment and merchandise is recognized at
the time of delivery to, or pick-up by, the customer. Revenue related to rental
equipment is recognized over the contract term.

Advertising Expense

    The Company advertises primarily through trade publications and yellow
pages. Advertising costs are expensed as incurred and totaled $23.8 million,
$19.0 million and $13.5 million for the years ended December 31, 2000, 1999 and
1998, respectively.

Income Taxes

    The Company uses the liability method of accounting for income taxes. Under
this method, deferred tax assets and liabilities are determined based on the
differences between financial statement and tax bases of assets and liabilities
and are measured using the enacted tax rates and laws that are expected to be
in effect when the differences are expected to reverse. Recognition of deferred
tax assets is limited to amounts considered by management to be more likely
than not realized in future periods.

Use of Estimates

    The preparation of financial statements in conformity with accounting
principles generally accepted in the United States 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.

                                      13

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Concentrations of Credit Risk

    Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist principally of cash investments and
accounts receivable. The Company maintains cash and cash equivalents with high
quality financial institutions.

    Concentration of credit risk with respect to accounts receivable are
limited because a large number of geographically diverse customers make up the
Company's customer base. No single customer represents greater than 10% of
total accounts receivable. The Company controls credit risk through credit
approvals, credit limits, and monitoring procedures.

Stock-Based Compensation

    The Company accounts for its stock based compensation arrangements under
the provisions of Accounting Principles Board ("APB") Opinion No. 25,
"Accounting for Stock Issued to Employees". Since stock options are granted by
the Company with exercise prices at or greater than the fair value of the
shares at the date of grant, no compensation expense is recognized.

Insurance

    The Company is insured for general liability, workers' compensation, and
group medical claims up to a specified claim and aggregate amounts (subject to
a deductible of one million dollars). Insured losses subject to this deductible
are accrued based upon the aggregate liability for reported claims incurred and
an estimated liability for claims incurred but not reported. These liabilities
are not discounted.

Impact of Recently Issued Accounting Standards

    In June 1999, the Financial Accounting Standards Board ("FASB'') issued
Statement of Financial Accounting Standards ("SFAS'') No. 137, "Accounting for
Derivative Instruments and Hedging Activities--Deferral of the Effective Date
of FASB Statement No. 133". This standard delays the effective date of SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities", for one
year, to fiscal years beginning after June 15, 2000. SFAS No. 133 establishes a
new model for accounting for derivatives and hedging activities. The adoption
of SFAS No. 133 on January 1, 2001 is not expected to have a material effect on
the Company's consolidated financial position or results of operations.

    In June 2000, the FASB issued SFAS No. 138, "Accounting for Certain
Derivative Instruments and Certain Hedging Activities". This standard amends
SFAS No. 133 and addresses a limited number of issues causing implementation
difficulties. The Company will adopt SFAS No. 138 on January 1, 2001 and it is
not expected to have a material effect on the Company's consolidated financial
position or results of operations.

    In September 2000, the FASB issued SFAS No. 140, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities--a
replacement of FASB Statement No. 125". This standard revises the standards for
accounting for securitizations and other transfers of financial assets and
collateral and requires certain disclosures. This standard is effective for
transfers and servicing of financial assets and extinguishments of liabilities
occurring after March 31, 2001 and for disclosures relating to securitization
transactions and collateral for fiscal years ending after December 15, 2000.
The adoption of SFAS No. 140 is not expected to have a material effect on the
Company's consolidated financial position or results of operations.

                                      14

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Reclassifications

    Certain prior year balances have been reclassified to conform to the 2000
presentation.

3. Acquisitions

Acquisitions Accounted for as Poolings-of-Interests

    On August 24, 1998, the Company issued 2,744,368 shares of its common stock
for all of the outstanding shares of common stock of Rental Tools.

    On September 24, 1998, the Company issued 1,456,997 shares of its common
stock for all of the outstanding shares of common stock of Wynne Systems, Inc.
This transaction was accounted for as a pooling-of-interests; however, this
transaction was not material to the Company's consolidated operations and
financial position and, therefore, the Company's financial statements have not
been restated for this transaction but have been combined beginning July 1,
1998.

    On September 29, 1998, a merger (the "Merger") of United Rentals, Inc. and
U.S. Rentals was completed. The Merger was effected by having a wholly owned
subsidiary of United Rentals, Inc. merge with and into U.S. Rentals. Following
the Merger, United Rentals, Inc. contributed the capital stock of U.S. Rentals
to URI, a wholly owned subsidiary of United Rentals, Inc. Pursuant to the
Merger, each outstanding share of common stock of U.S. Rentals was converted
into the right to receive 0.9625 of a share of common stock of United Rentals,
Inc. An aggregate of approximately 29.6 million shares of United Rentals, Inc.
common stock were issued in the Merger in exchange for the outstanding shares
of U.S. Rentals common stock.

    The table below shows the separate revenue and net income (loss) of the
Company prior to the above mergers ("United"), U.S. Rentals and Rental Tools
for periods prior to combination:

<TABLE>
<CAPTION>
                                                         U.S.    Rental
                                               United   Rentals  Tools   Combined
                                              --------  -------- ------- --------
                                                         (In thousands)
<S>                                           <C>       <C>      <C>     <C>
For the nine months ended September 30, 1998:
   Revenues.................................. $311,919  $451,101 $41,242 $804,262
   Net income (loss).........................  (53,178)   43,670   4,695   (4,813)
</TABLE>

Acquisitions Accounted for as Purchases

    The acquisitions completed during the years ended December 31, 2000, 1999
and 1998 include 53, 102 and 81 acquisitions, respectively, that were accounted
for as purchases. The results of operations of the businesses acquired in these
acquisitions have been included in the Company's results of operations from
their respective acquisition dates.

    During 2000, the Company purchased the outstanding stock and certain assets
of (i) Liddell Brothers Inc., in February, (ii) Safety Lites Sales and Leasing,
Inc., in March, (iii) Durante Equipment Corp., Inc., in June, (iv) Horizon High
Reach, Inc., in September, and (v) Wiese Planning & Engineering Inc., in
December. The aggregate initial consideration paid for these five acquisitions
that were accounted for as purchases was approximately $153.1 million and
consisted of $83.8 million in cash and 761,905 shares of common stock and $59.3
million in seller notes. In addition, the Company repaid or assumed outstanding
indebtedness of these companies acquired in the aggregate amount of
approximately $5.5 million.

                                      15

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


    The aggregate initial consideration paid by the Company for other 2000
acquisitions that were accounted for as purchases was $210.2 million and
consisted of approximately $184.6 million in cash and $6.2 million in seller
notes. In addition, the Company repaid or assumed outstanding indebtedness of
the companies acquired in the other 2000 acquisitions in the aggregate amount
of $77.5 million.

    During 1999, the Company purchased the outstanding stock and certain assets
of (i) National Equipment Finance Company, in June, (ii) Mi-Jack Products, Inc.
and related entities, in May, (iii) Elmen Rent All, Inc., in June (iv) Forte,
Inc., in March, and (v) Arayco, Inc. in June. The aggregate initial
consideration paid for these five acquisitions that were accounted for as
purchases was approximately $275.4 million and consisted of $270.4 million in
cash and $5.0 million in seller notes. In addition, the Company repaid or
assumed outstanding indebtedness of these companies acquired in the aggregate
amount of approximately $99.8 million.

    The aggregate initial consideration paid by the Company for other 1999
acquisitions accounted for as purchases was $663.6 million and consisted of
approximately $659.2 million in cash and $4.4 million in seller notes. In
addition, the Company repaid or assumed outstanding indebtedness of the
companies acquired in the other 1999 acquisitions in the aggregate amount of
approximately $239.3 million.

    In January 1998 the Company purchased the outstanding stock and certain
assets of (i) Access Rentals, Inc. and Affiliate, (ii) the BNR Group of
Companies and (iii) Mission Valley Rentals, Inc. The aggregate initial
consideration paid by the Company for these three acquisitions that were
accounted for as purchases was $88.7 million and consisted of approximately
$81.4 million in cash and 370,231 shares of common stock and warrants to
purchase an aggregate of 30,000 shares of the Company's common stock. In
addition, the Company repaid or assumed outstanding indebtedness of these three
companies acquired in the aggregate amount of $64.0 million.

    Also during 1998, the Company purchased the outstanding stock and certain
assets of (i) Power Rental Co., Inc., in June (ii) Equipment Supply Co., Inc.
and Affiliates in June and (iii) McClinch Inc. and Subsidiaries and McClinch
Equipment Services, Inc. in September. The aggregate initial consideration paid
by the Company for these three acquisitions that were accounted for as
purchases was $298.4 million and consisted of approximately $278.0 million in
cash and 496,063 shares of common stock. In addition, the Company repaid or
assumed outstanding indebtedness of these three companies acquired in the
aggregate amount of $155.4 million.

    The aggregate initial consideration paid by the Company for other 1998
acquisitions that were accounted for as purchases was $550.4 million and
consisted of approximately $507.3 million in cash and 1,083,997 shares of
common stock, and seller notes of $10.5 million. In addition, the Company
repaid or assumed outstanding indebtedness of the other companies acquired in
1998 in the aggregate amount of $211.8 million.

    The purchase prices for all acquisitions accounted for as purchases have
been allocated to the assets acquired and liabilities assumed based on their
respective fair values at their respective acquisition dates. However, the
Company has not completed its valuation of all of its purchases and,
accordingly, the purchase price allocations are subject to change when
additional information concerning asset and liability valuations are completed.
The preliminary purchase price allocations that are subject to change primarily
consists of rental and non-rental equipment valuations. These allocations are
finalized within 12 months of the acquisition date and are not expected to
result in significant differences between the preliminary and final
allocations.

                                      16

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


    The following table summarizes, on an unaudited pro forma basis, the
combined results of operations of the Company for the years ended December 31,
2000 and 1999 as though each acquisition described above was made on January 1,
for each of the periods.

<TABLE>
<CAPTION>
                                              2000       1999
                                           ---------- ----------
                                           (In thousands, except
                                              per share data)
                <S>                        <C>        <C>
                Revenues.................. $3,095,872 $2,956,543
                Net income................    182,342    154,084
                Basic earnings per share.. $     2.54 $     2.14
                                           ========== ==========
                Diluted earnings per share $     1.94 $     1.64
                                           ========== ==========
</TABLE>

    The unaudited pro forma results are based upon certain assumptions and
estimates which are subject to change. These results are not necessarily
indicative of the actual results of operations that might have occurred, nor
are they necessarily indicative of expected results in the future.

Merger-Related Expenses, Extraordinary Item and Other Costs

    The results of operations for the year ended December 31, 1999 include
pre-tax expenses related to a terminated tender offer totaling approximately
$18.2 million ($10.8 million after tax), primarily consisting of $8.3 million
in professional fees recorded in selling, general and administrative expense
and $9.9 million in financing commitment fees recorded in other (income)
expense, net.

    The results of operations for the year ended December 31, 1998, include
pre-tax expenses related to three acquisitions accounted for as
poolings-of-interests totaling approximately $47.2 million ($33.2 million
after-tax), consisting of (i) $18.5 million for investment banking, legal,
accounting services and other merger costs, (ii) $14.5 million of expenses
relating to the closing of duplicate facilities, (iii) $8.2 million for
employee severance and related matters, (iv) $2.1 million for the write down of
computer systems acquired through the U.S. Rentals merger and one of the other
acquisitions accounted for as a pooling-of-interests and (v) $3.9 million in
other expenses.

    The Company recorded a pre-tax extraordinary item of $35.6 million ($21.3
million after-tax) in 1998. The charge related to the early extinguishment of
debt primarily related to the Merger with U.S. Rentals.

4. Rental Equipment

    Rental equipment consists of the following:

<TABLE>
<CAPTION>
                                    December 31
                              ----------------------
                                 2000        1999
                              ----------  ----------
                                  (In thousands)
<S>                           <C>         <C>
Rental equipment............. $2,281,994  $2,098,624
Less accumulated depreciation   (549,159)   (438,891)
                              ----------  ----------
Rental equipment, net........ $1,732,835  $1,659,733
                              ----------  ----------
</TABLE>

                                      17

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


5. Property and Equipment

    Property and equipment consist of the following:

<TABLE>
<CAPTION>
                                                   December 31
                                               -------------------
                                                 2000       1999
                                               ---------  --------
                                                  (In thousands)
<S>                                            <C>        <C>
Land.......................................... $  53,612  $ 50,143
Buildings.....................................   104,925    91,934
Transportation equipment......................   228,265   139,944
Machinery and equipment.......................    36,587    31,484
Furniture and fixtures........................    56,109    46,507
Leasehold improvements........................    48,952    26,387
                                               ---------  --------
                                                 528,450   386,399
Less accumulated depreciation and amortization  (106,211)  (81,492)
                                               ---------  --------
Property and equipment, net................... $ 422,239  $304,907
                                               =========  ========
</TABLE>

6. Accrued Expenses and Other Liabilities

    Accrued expenses and other liabilities consist of the following:

<TABLE>
<CAPTION>
                          December 31
                       -----------------
                         2000     1999
                       -------- --------
                        (In thousands)
<S>                    <C>      <C>
Accrued profit sharing $ 39,485 $ 39,052
Accrued insurance.....   15,428   22,738
Accrued interest......   36,993   37,477
Other.................   44,319  110,662
                       -------- --------
                       $136,225 $209,929
                       ======== ========
</TABLE>

                                      18

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


7. Debt

    Debt consists of the following:

<TABLE>
<CAPTION>
                                                                  December 31
                                                             ---------------------
                                                                2000       1999
                                                             ---------- ----------
                                                                (In thousands)
<S>                                                          <C>        <C>
Credit Facility, interest payable at a weighted average rate
  of 7.8% and 6.9% at December 31, 2000 and 1999,
  respectively.............................................. $  337,000 $  243,000
Term Loan B, interest payable at 8.89% and 8.71% at
  December 31, 2000 and 1999, respectively..................    246,875    248,750
Term Loan C, interest payable at 9.26% and 8.96% at
  December 31, 2000 and 1999, respectively..................    748,125    750,000
Term Loan D, interest payable at a weighted average rate of
  9.18% at December 31, 2000................................    198,128
Senior Subordinated Notes, interest payable semi-annually,
  (9 1/2% at December 31, 2000 and 1999)....................    200,000    200,000
Senior Subordinated Notes, interest payable semi-annually,
  (8.80% at December 31, 2000 and 1999).....................    201,153    200,653
Senior Subordinated Notes, interest payable semi-annually,
  (9 1/4% at December 31, 2000 and 1999)....................    300,000    300,000
Senior Subordinated Notes, interest payable semi-annually,
  (9% at December 31, 2000 and 1999)........................    250,000    250,000
Receivables securitization, interest payable at 7.44% at
  December 31, 2000.........................................    100,000
Other debt, interest payable at various rates ranging from
  4% to 11% and 6% to 12.3% at December 31, 2000 and
  1999, respectively, due through 2007......................     94,086     73,745

                                                             ---------- ----------
                                                             $2,675,367 $2,266,148
                                                             ========== ==========
</TABLE>

    Credit Facility. The Company has a credit facility (the "Credit Facility")
which enables URI to borrow up to $827.5 million on a revolving basis and
permits a Canadian subsidiary of URI (the "Canadian Subsidiary") to directly
borrow up to $40.0 million under the Credit Facility (provided that the
aggregate borrowings of URI and the Canadian Subsidiary do not exceed $827.5
million). Up to $50.0 million ($1.4 million outstanding at December 31, 2000)
of the Credit Facility is available in the form of letters of credit. The
agreement governing the Credit Facility requires that the aggregate commitment
shall be reduced on the last day of each calendar quarter, beginning September
30, 2001 and continuing through June 30, 2003, by an amount equal to $20.7
million. The Credit Facility terminates on September 26, 2003, at which time
all outstanding indebtedness is due.

    Borrowings by URI under the Credit Facility accrue interest at URI's
option, at either (a) the Base Rate (which is equal to the greater of (i) the
Federal Funds Rate plus 0.5% or (ii) Bank of America's reference rate) or (b)
the Eurodollar Rate (which for borrowings by URI is equal to Bank of America's
reserve adjusted eurodollar rate) plus a margin ranging from 1.200% to 1.875%
per annum. Borrowings by the Canadian Subsidiary under the Credit Facility
accrue interest, at such subsidiary's option, at either (x) the Prime Rate
(which is equal to Bank of America Canada's prime rate), (y) the BA Rate (which
is equal to Bank of America Canada's BA Rate) plus a margin ranging from 1.200%
to 1.875% per annum or (z) the Eurodollar Rate (which for borrowing by the
Canadian Subsidiary is equal to Bank of America Canada's reserve adjusted
Eurodollar Rate) plus a margin ranging from 1.200% to 1.875% per annum. If at
any time an event of default (as defined in the agreement governing the Credit

                                      19

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Facility) exists, the interest rate applicable to each loan will increase by 2%
per annum. The Company is also required to pay the banks an annual facility fee
equal to 0.375% of the banks' $827.5 million aggregate lending commitment under
the Credit Facility (which fee may be reduced to 0.300% for periods during
which the Company maintains a specified funded debt to cash flow ratio).

    The obligations of URI under the Credit Facility are (i) secured by
substantially all of its assets, the stock of its United States subsidiaries
and a portion of the stock of URI's Canadian subsidiaries and (ii) guaranteed
by Holdings and secured by the stock of URI. The obligations of the Canadian
Subsidiary under the Credit Facility are guaranteed by URI and secured by
substantially all of the assets of the Canadian Subsidiary and the stock of the
subsidiaries of the Canadian Subsidiary.

    The Credit Facility contains certain covenants that require the Company to,
among other things, satisfy certain financial tests relating to: (a) maximum
leverage, (b) the ratio of senior debt to cash flow, (c) minimum interest
coverage ratio, (d) the ratio of funded debt to cash flow, and (e) the ratio of
senior debt to tangible assets. The agreements governing the Credit Facility
also contain various other covenants that restrict the Company's ability to,
among other things, (i) incur additional indebtedness, (ii) permit liens to
attach to its assets, (iii) pay dividends or make other restricted payments on
its common stock and certain other securities and (iv) make acquisitions unless
certain financial conditions are satisfied. In addition, the agreement
governing the Credit Facility (a) requires the Company to maintain certain
financial ratios and (b) provides that failure by any two of certain of the
Company's executive officers to continue to hold executive positions with the
Company for a period of 30 consecutive days constitutes an event of default
unless replacement officers satisfactory to the lenders are appointed.

    Term Loan B. URI obtained a $250.0 million term loan (the "Term Loan B")
from a group of financial institutions. The Term Loan B matures on June 30,
2005. Prior to maturity, quarterly installments of principal in the amount of
$0.6 million are due on the last day of each calendar quarter, commencing
September 30, 1999. The amount due at maturity is $235.6 million. The Term Loan
B accrues interest, at URI's option, at either (a) the Base Rate (as defined
above with respect to the Credit Facility) plus a margin of 0.375% per annum,
or (b) the Eurodollar Rate (as defined above with respect to the Credit
Facility for borrowings by the Company) plus a margin of 2.25% per annum. The
Term Loan B is secured pari passu with the Credit Facility and the agreement
governing the Term Loan B contains restrictive covenants substantially similar
to those provided under the Credit Facility.

    Term Loan C. URI obtained a $750.0 million term loan from a group of
financial institutions (the "Term Loan C"). The Term Loan C matures in June
2006. Prior to maturity, quarterly installments of principal in the amount of
$1.9 million are due on the last day of each calendar quarter, commencing
September 30, 2000. The amount due at maturity is $706.3 million. The Term Loan
C accrues interest, at URI's option, at either (a) the Base Rate (as defined
above with respect to the Credit Facility) plus a margin of 0.625% per annum,
or (b) the Eurodollar Rate (as defined above with respect to the Credit
Facility) plus a margin of 2.50% per annum. The Term Loan C is secured pari
passu with the Credit Facility and the agreement governing the Term Loan C
contains restrictive covenants substantially similar to those provided under
the Credit Facility.

    Term Loan D. URI obtained a $200.0 million term loan from a financial
institution (the "Term Loan D"). The Term Loan D matures in June 2006. Prior to
maturity, quarterly installments of principal are due on the last day of each
calendar quarter, in the amount of $0.25 million on September 30, 2000 and in
the amount of $0.5 million commencing December 31, 2000 to maturity. The amount
due at maturity is $188.5 million. The Term Loan D accrues interest, at URI's
option, at either (a) the Base Rate (as defined above with respect to the
Credit Facility) plus a margin of 0.625% per annum, or (b) the Eurodollar Rate
(as defined above with respect to the Credit Facility) plus a margin of 2.5%
per

                                      20

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

annum. The Term Loan D is secured pari passu with the Credit Facility, and the
agreement governing the Term Loan D contains restrictive covenants
substantially similar to those provided under the Credit Facility.

    At December 31, 2000, the Company had interest rate protection in the form
of swap agreements with an aggregate notional amount of $200.0 million. The
effect of these agreements is to limit the interest rate exposure to 8.75% on
$200.0 million of Term Loan B. The overall weighted average interest rate on
the Term Loan B was 8.80% at December 31, 2000. While it is not the Company's
intention to terminate the interest rate swap agreements, the fair values were
estimated by obtaining quotes from brokers which represented the amounts that
the Company would receive or pay if the agreements were terminated. These fair
values indicated that termination of the agreements at December 31, 2000, would
have resulted in a pretax loss of $4.3 million.

    9 1/2% Senior Subordinated Notes. URI issued $200.0 million aggregate
principal amount of 9 1/2% senior subordinated notes, (the "9 1/2 Notes") which
are due June 1, 2008. The 9 1/2% Notes are unsecured. URI may, at its option,
redeem the 9 1/2% Notes on or after June 1, 2003 at specified redemption prices
which range from 104.75% in 2003 to 100.0% in 2006 and thereafter. In addition,
on or prior to June 1, 2001, URI may, at its option, use the proceeds of a
public equity offering to redeem up to 35% of the outstanding 9 1/2% Notes, at
a redemption price of 109.5%. The indenture governing the 9 1/2% Notes contains
certain restrictive covenants, including (i) limitations on additional
indebtedness, (ii) limitations on restricted payments, (iii) limitations on
liens, (iv) limitations on dividends and other payment restrictions, (v)
limitations on preferred stock of certain subsidiaries, (vi) limitations on
transactions with affiliates, (vii) limitations on the disposition of proceeds
of asset sales and (viii) limitations on the ability of the Company to
consolidate, merge or sell all or substantially all of its assets.

    8.80% Senior Subordinated Notes. URI issued $205.0 million aggregate
principal amount of 8.80% senior subordinated notes, (the "8.80% Notes") which
are due August 15, 2008. The 8.80% Notes are unsecured. URI may, at its option,
redeem the 8.80% Notes on or after August 15, 2003 at specified redemption
prices which range from 104.4% in 2003 to 100.0% in 2006 and thereafter. In
addition, on or prior to August 15, 2001, URI may, at its option, use the
proceeds of a public equity offering to redeem up to 35% of the outstanding
8.80% Notes, at a redemption price of 108.8%. The indenture governing the 8.80%
Notes contains restrictions substantially similar to those applicable to the 9
1/2% Notes.

    9 1/4% Senior Subordinated Notes. URI issued $300.0 million aggregate
principal amount of 9 1/4% senior subordinated notes, (the "9 1/4% Notes")
which are due January 15, 2009. The 9 1/4% Notes are unsecured. URI may, at its
option, redeem the 9 1/4% Notes on or after January 15, 2004 at specified
redemption prices which range from 104.625% in 2004 to 100.0% in 2007 and
thereafter. In addition, on or prior to January 15, 2002, URI may, at its
option, use the proceeds of a public equity offering to redeem up to 35% of the
outstanding 9 1/4% Notes, at a redemption price of 109.25%. The indenture
governing the 9 1/4% Notes contains restrictions substantially similar to those
applicable to the 9 1/2% Notes.

    9% Senior Subordinated Notes. URI issued $250.0 million aggregate principal
amount of 9% senior subordinated notes, (the "9% Notes") which are due April 1,
2009. The 9% Notes are unsecured. URI may, at its option, redeem the 9% Notes
on or after April 1, 2004 at specified redemption prices which range from
104.5% in 2004 to 100.0% in 2007 and thereafter. In addition, on or prior to
April 1, 2002, URI may, at its option, use the proceeds of a public equity
offering to redeem up to 35% of the outstanding 9% Notes, at a redemption price
of 109.0%. The indenture governing the 9% Notes contains restrictions
substantially similar to those applicable to the 9 1/2% Notes.

                                      21

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


    Receivables Securitization. In December 2000, the Company obtained $100.0
million through the securitization of certain of its accounts receivable. In
the securitization, the Company transferred $203.0 million of its accounts
receivable to a special purpose subsidiary (the "SPV") which in turn pledged
those receivables to secure $100.0 million of borrowings that the SPV incurred
to finance its acquisition of those receivables from the Company. These
borrowings accrue interest at Credit Lyonnais' blended commercial paper rate
plus a margin of 0.75% per annum. These borrowings are an obligation of the SPV
and not of Holdings or URI, and the lenders' recourse in respect of the
borrowings is generally limited to collections that the SPV receives on the
receivables. Collections on the receivables are used to service the borrowings.
Subject to certain conditions, collections from the receivables may also be
used by the SPV from time to time until December 2003 to acquire additional
accounts receivables from the Company that the SPV will pledge to the lenders
to secure the borrowings.

    Maturities of the Company's debt for each of the next five years at
December 31, 2000 are as follows (In thousands):

<TABLE>
<S>        <C>
2001...... $   33,787
2002......     29,512
2003......    464,498
2004......     33,984
2005......    250,043
Thereafter  1,863,543
</TABLE>

8. Income Taxes

    The provision for historical federal and state income taxes is as follows:

<TABLE>
<CAPTION>
                                          Year ended December 31
                                         ------------------------
                                           2000    1999    1998
                                         -------- ------- -------
                                              (In thousands)
              <S>                        <C>      <C>     <C>
              Historical:
                 Domestic federal:
                     Current............ $ 10,419 $39,643 $14,291
                     Deferred...........   97,756  37,598  21,047
                                         -------- ------- -------
                                          108,175  77,241  35,338
                 Domestic state:
                     Current............    3,587  10,405   1,067
                     Deferred...........    6,815   3,437   7,020
                                         -------- ------- -------
                                           10,402  13,842   8,087
                                         -------- ------- -------
                     Total domestic.....  118,577  91,083  43,425
                 Foreign federal:
                     Current............    1,061   4,917     519
                     Deferred...........    3,590     465    (492)
                                         -------- ------- -------
                                            4,651   5,382      27
                 Foreign provincial:
                     Current............      774   2,356     277
                     Deferred...........    1,119     320    (230)
                                         -------- ------- -------
                                            1,893   2,676      47
                                         -------- ------- -------
                     Total foreign......    6,544   8,058      74
                                         -------- ------- -------
                                         $125,121 $99,141 $43,499
                                         ======== ======= =======
</TABLE>

                                      22

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


    A reconciliation of the provision for income taxes and the amount computed
by applying the statutory federal income tax rate of 35% to income before
provision for income taxes is as follows:

<TABLE>
<CAPTION>
                                                              Year ended December 31
                                                            -------------------------
                                                              2000    1999     1998
                                                            -------- -------  -------
                                                                  (In thousands)
<S>                                                         <C>      <C>      <C>
Computed tax rate at statutory tax rate.................... $105,524 $84,632  $27,404
State income taxes, net of federal tax benefit.............    6,762   8,997    4,177
Non-deductible expenses....................................    9,992   6,265    7,400
Provision for deferred taxes of Subchapter S Corporation at
  time of pooling..........................................                     4,750
Other......................................................    2,843    (753)    (232)
                                                            -------- -------  -------
                                                            $125,121 $99,141  $43,499
                                                            ======== =======  =======
</TABLE>

    The components of deferred income tax assets (liabilities) are as follows:

<TABLE>
<CAPTION>
                                                 December 31
                                            --------------------
                                              2000       1999
                                            ---------  ---------
                                               (In thousands)
<S>                                         <C>        <C>
Property and equipment..................... $(298,058) $(175,180)
Intangibles................................   (32,518)   (13,188)
Reserves and allowances....................    37,460     48,577
Net operating loss and credit carryforwards    84,257     56,266
Other......................................     2,616      2,296

                                            ---------  ---------
                                            $(206,243) $ (81,229)
                                            =========  =========
</TABLE>

    The current and deferred tax assets and liabilities at December 31, 2000
include the effects of certain reclassifications related to differences between
the income tax provisions and tax returns for prior years. These
reclassifications had no effect on net income.

    For financial reporting purposes, income before income taxes and
extraordinary items for the Company's foreign subsidiaries was $15.6 million
and $19.9 million for the years ended December 31, 2000 and 1999, respectively.
At December 31, 2000 and 1999, unremitted earnings of foreign subsidiaries were
approximately $22.9 million and $13.8 million, respectively. Since it is the
Company's intention to indefinitely reinvest these earnings, no United States
taxes have been provided. Determination of the amount of unrecognized deferred
tax liability on these unremitted taxes is not practicable.

    The Company has net operating loss carryforwards ("NOL's") of $138.2
million for federal income tax purposes that expire through 2018.

9. Holding Company Reorganization

    URI was formerly named United Rentals, Inc. On August 5, 1998, a
reorganization was effected pursuant to which (i) URI became a wholly owned
subsidiary of Holdings, a newly formed holding company, (ii) the name of URI
was changed from United Rentals, Inc. to United Rentals (North America), Inc.,
(iii) the name of the new holding company became United Rentals, Inc., (iv) the
outstanding common stock of URI was automatically converted, on a
share-for-share basis, into common stock of Holdings and (v) the common stock
of Holdings commenced trading on the New York Stock Exchange under the symbol
"URI" instead of the common stock of URI. The purpose of the reorganization was
to facilitate certain financings. The business operations of the Company did
not

                                      23

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

change as a result of the new legal structure. The stockholders of Holdings
have the same rights, privileges and interests with respect to Holdings as they
had with respect to URI immediately prior to the reorganization.

10. Company-Obligated Mandatorily Redeemable Convertible Preferred Securities
    of a Subsidiary Trust and Series A and B Preferred Stock

    Trust Securities. In August 1998, a subsidiary trust (the "Trust") of
Holdings issued and sold in a private offering (the "Preferred Securities
Offering") $300.0 million of 30 year, 6 1/2% Convertible Quarterly Income
Preferred Securities (the "Preferred Securities"). The net proceeds from the
Preferred Securities Offering were approximately $290.0 million. The Trust used
the proceeds from the Preferred Securities Offering to purchase 6 1/2%
convertible subordinated debentures due 2028 (the "Debentures") from Holdings
which resulted in Holdings receiving all of the net proceeds of the Preferred
Securities Offering. Holdings in turn contributed the net proceeds of the
Preferred Securities Offering to URI. The Preferred Securities are non-voting
securities, carry a liquidation value of $50 per security and are convertible
into the Company's common stock at an initial rate of 1.146 shares per security
(equivalent to an initial conversion price of $43.63 per share). They are
convertible at any time at the holders' option and are redeemable, at the
Company's option, after three years, subject to certain conditions.

    Holders of the Preferred Securities are entitled to preferential cumulative
cash distributions from the Trust at an annual rate of 6 1/2% of the
liquidation value, accruing from the original issue date and payable quarterly
in arrears beginning February 1, 1999. The distribution rate and dates
correspond to the interest rate and payments dates on the Debentures. Holdings
may defer interest payments on the Debentures for up to twenty consecutive
quarters, but not beyond the maturity date of the Debentures. If interest
payments on the Debentures are deferred, so are the payments on the Preferred
Securities. Under this circumstance, Holdings will be prohibited from paying
dividends on any of its capital stock or making payments with respect to its
debt that rank pari passu with or junior to the Debentures.

    Holdings has executed a guarantee with regard to payment of the Preferred
Securities to the extent that the Trust has sufficient funds to make the
required payments.

    Series A Preferred. On January 7, 1999, Holdings sold 300,000 shares of its
Series A Preferred. Subject to certain thresholds related to the aggregate
number of shares issuable upon conversion of Series A Preferred, the holders of
the Series A Preferred, voting separately as a single class, have the right, on
an as-converted basis, to elect up to two directors. Currently, holders of the
Series A Preferred may elect two directors. Except for the election of
directors, the holders of the Series A Preferred have the same voting rights as
those belonging to holders of Holdings common stock. The net proceeds from the
sale of the Series A Preferred were approximately $287.0 million. Holdings
contributed such net proceeds to URI. The Series A Preferred is convertible
into 12,000,000 shares of Holdings common stock at $25 per share based upon a
liquidation preference of $1,000 per share of Series A Preferred, subject to
adjustment. The Series A Preferred has no stated dividend. However, in the
event Holdings declares or pays any dividends on, or distributions of, its
common stock, it must (subject to certain exceptions) also declare and pay to
the holders of Series A Preferred the dividends and distributions which would
have been declared and paid upon conversion of the Series A Preferred. See note
2 for additional information on the Series A Preferred.

    Series B Preferred. On September 30, 1999, Holdings sold 150,000 shares of
its Series B Preferred. The Series B Preferred is divided into two classes
designated as Class B-1 and Class B-2. Other than voting rights, the classes
are substantially the same. The holders of the 105,252 shares of Class B-1 are
entitled to the same voting rights, on an as-converted basis, as those
belonging

                                      24

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

to holders of Holdings common stock. The holders of the 44,748 shares of Class
B-2 have no such voting rights. The net proceeds from the sale of the Series B
Preferred were approximately $143.8 million. Holdings contributed such net
proceeds to URI. The Series B Preferred is convertible into 5,000,000 shares of
Holding's common stock at $30 per share based upon a liquidation preference of
$1,000 per share of Series B Preferred, subject to adjustment. The Series B
Preferred has no stated dividend. However, in the event Holdings declares or
pays any dividends on, or distributions of, its common stock, it must (subject
to certain exceptions) also declare and pay to the holders of Series B
Preferred the dividends and distributions which would have been declared and
paid upon conversion of the Series B Preferred. See note 2 for additional
information on the Series B Preferred.

11. Capital Stock

    Warrants. As of December 31, 2000 there are outstanding warrants to
purchase an aggregate of 7,094,296 shares of common stock. The weighted average
exercise price of the warrants is $11.76 per share. All warrants are currently
exercisable and may be exercised at any time through 2009.

    Common Stock. On March 9, 1999, Holdings completed a public offering of
2,290,000 shares of common stock. The net proceeds to the Company from this
offering were approximately $64.7 million (after deducting underwriting
discounts and offering expenses). Holdings contributed such net proceeds to
URI. During 2000, the Company approved a share repurchase program to acquire up
to $200 million of its issued and outstanding common stock. Share repurchases
under the program may be made from time to time, continuing through May 2002.
During 2000, the Company repurchased and retired 1,785,015 shares of common
stock.

    1997 Stock Option Plan. The Company's 1997 Stock Option Plan provides for
the granting of options to purchase not more than an aggregate of 5,000,000
shares of common stock. Some or all of such options may be "incentive stock
options" within the meaning of the Internal Revenue Code. All officers,
directors and employees of the Company and other persons who perform services
on behalf of the Company are eligible to participate in this plan. Each option
granted pursuant to this plan must provide for an exercise price per share that
is at least equal to the fair market value per share of common stock on the
date of grant. No options may be granted under this plan after August 31, 2007.
As of December 31, 2000 and 1999, options to purchase an aggregate of 4,950,536
shares and 4,731,183 shares of common stock, respectively, were outstanding
under this plan. The exercise price of each option, the period during which
each option may be exercised and other terms and conditions of each option are
determined by the Board of Directors (or by a committee appointed by the Board
of Directors).

    1998 Stock Option Plan. The Company's 1998 Stock Option Plan provides for
the granting of options to purchase not more than an aggregate of 4,200,000
shares of common stock. Some or all of the options issued under the 1998 Stock
Option Plan may be "incentive stock options" within the meaning of the Internal
Revenue Code. All officers and directors of the Company and its subsidiaries
are eligible to participate in the 1998 Stock Option Plan. Each option granted
pursuant to the 1998 Stock Option Plan must provide for an exercise price per
share that is at least equal to the fair market value per share of common stock
on the date of grant. No options may be granted under the 1998 Stock Option
Plan after August 20, 2008. As of December 31, 2000 and 1999, options to
purchase an aggregate of 4,200,000 shares of common stock were outstanding
pursuant to this plan to executive officers and directors. The exercise price
of each option, the period during which each option may be exercised and other
terms and conditions of each option are determined by the Board of Directors
(or by a committee appointed by the Board of Directors).

                                      25

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


    1998 Supplemental Stock Option Plan. The Company has adopted a stock option
plan pursuant to which options, for up to an aggregate of 5,600,000 shares of
common stock, may be granted to employees who are not officers or directors and
to consultants and independent contractors who perform services for the Company
or its subsidiaries. As of December 31, 2000 and 1999, options to purchase an
aggregate of 5,373,509 shares and 4,140,384 shares of common stock,
respectively, were outstanding pursuant to this plan. The exercise price of
each option, the period during which each option may be exercised and other
terms and conditions of each option are determined by the Board of Directors
(or by a committee appointed by the Board of Directors).

    1997 Performance Award Plan. Effective February 20, 1997, U.S. Rentals
adopted the 1997 Performance Award Plan under which stock options and other
awards could be granted to key employees and directors at prices and terms
established by U.S. Rentals at the date of grant. The options expire in 2007.
As a result of the Merger, all outstanding options to purchase shares of U.S.
Rentals common stock became fully vested and were converted into options to
purchase the Company's common stock. As of December 31, 2000 and 1999, options
to purchase an aggregate of 2,572,050 shares and 2,581,675 shares of common
stock , respectively, were outstanding pursuant to this plan.

   A summary of the transactions within the Company's stock option plans
follows:

<TABLE>
<CAPTION>
                                             Weighted
                                             Average
                                             Exercise
                                   Shares     Price
                                 ----------  --------
<S>                              <C>         <C>
Outstanding at January 1, 1998..  4,825,699   $19.52
   Granted......................  9,453,718    19.78
   Exercised....................    (25,025)   20.78
   Canceled.....................   (209,578)   22.94
                                 ----------   ------

Outstanding at December 31, 1998 14,044,814    19.60
   Granted......................  3,092,462    26.77
   Exercised.................... (1,331,528)   20.74
   Canceled.....................   (152,506)   26.70
                                 ----------   ------

Outstanding at December 31, 1999 15,653,242    20.86
   Granted......................  1,921,125    16.56
   Exercised....................    (26,307)   16.91
   Canceled.....................   (451,965)   27.03
                                 ----------   ------
Outstanding at December 31, 2000 17,096,095   $20.23
                                 ==========   ======
Exercisable at December 31, 2000 11,906,938   $19.58
                                 ==========   ======
</TABLE>

<TABLE>
<CAPTION>
                               Options Outstanding        Options Exercisable
                         -------------------------------- --------------------
                                      Weighted
                                       Average   Weighted             Weighted
                                      Remaining  Average              Average
                           Amount    Contractual Exercise   Amount    Exercise
Range of Exercise Prices Outstanding    Life      Price   Exercisable  Price
------------------------ ----------- ----------- -------- ----------- --------
<S>                      <C>         <C>         <C>      <C>         <C>
    $10.00 - $15.00.....  4,722,077   7.7 years   $12.38   4,317,980   $12.30
     15.01 -  20.00.....  1,995,359   9.0 years    16.79     293,787    18.72
     20.01 -  25.00.....  7,146,663   7.1 years    21.77   5,543,191    21.64
     25.01 -  30.00.....  1,821,230   8.2 years    27.33     888,666    27.27
     30.01 -  50.00.....  1,410,766   7.4 years    34.67     863,314    35.08
                         ----------                       ----------
                         17,096,095.  7.6 years    20.23  11,906,938    19.58
                         ==========                       ==========
</TABLE>

                                      26

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


    The Company applies APB Opinion No. 25, "Accounting for Stock Issued to
Employees" in accounting for stock-based employee compensation arrangements
whereby no compensation cost related to stock options is deducted in
determining net income. Had compensation cost for the Company's stock option
plans been determined pursuant to SFAS No. 123, "Accounting for Stock-Based
Compensation", the Company's net income and earnings per share would have
differed. The weighted average fair value of options granted was $7.70, $10.99
and $11.94 during 2000, 1999 and 1998, respectively. The fair value is
estimated on the date of grant using the Black-Scholes option pricing model
which uses subjective assumptions which can materially affect fair value
estimates and, therefore, does not necessarily provide a single measure of fair
value of options. Using the Black-Scholes option pricing model and a risk-free
interest rate average of 5.15%, 6.29% and 4.6% in 2000, 1999 and 1998,
respectively, a volatility factor for the market price of the Company's common
stock of 69%, 52% and 85% in 2000, 1999 and 1998, respectively, and a
weighted-average expected life of options of approximately three years in 2000,
1999 and 1998, the Company's net income (loss), basic earnings (loss) per share
and diluted earnings (loss) per share would have been $156.4 million, $2.20 and
$1.69, respectively, for the year ended December 31, 2000, $104.3 million,
$1.46 and $1.12, respectively, for the year ended December 31, 1999, and $(13.3
million), $(0.20) and $(0.20), respectively, for the year ended December 31,
1998. For purposes of these pro forma disclosures, the estimated fair value of
options is amortized over the options' vesting period. Since the number of
options granted and their fair value may vary significantly from year to year,
the pro forma compensation expense in future years may be materially different.

    At December 31, 2000 there are (i) 7,094,296 shares of common stock
reserved for the exercise of warrants, (ii) 17,338,256 shares of common stock
reserved for issuance pursuant to options granted and that may be granted in
the future under the Company's stock option plans, (iii) 6,875,580 shares of
common stock reserved for the issuance of outstanding preferred securities of a
subsidiary trust, (iv) 17,000,000 shares of common stock reserved for the
issuance of Series A and Series B preferred stock and (v) 232,586 shares of
common stock reserved for the conversion of convertible debt.

                                      27

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


12. Earnings Per Share

    The following table sets forth the computation of historical basic and
diluted earnings per share:

<TABLE>
<CAPTION>
                                                    Year Ended December 31
                                              -----------------------------------
                                                 2000        1999        1998
                                              ----------- ----------- -----------
                                                (In thousands, except share and
                                                        per share data)
<S>                                           <C>         <C>         <C>
Numerator:
 Income before extraordinary item............ $   176,375 $   142,666 $    34,798
 Plus: preferred dividends of a subsidiary
   trust, net of taxes.......................      11,406
                                              ----------- ----------- -----------
 Income available to common stockkholders.... $   187,781 $   142,666 $    34,798
                                              =========== =========== ===========
Denominator:
 Denominator for basic earnings per share-
   weighted-average shares...................  71,069,174  71,353,127  66,225,492
 Effect of dilutive securities:
   Employee stock options....................   1,517,015   4,651,237   2,641,194
   Warrants..................................   2,791,387   3,978,536   4,208,434
   Series A Preferred........................  12,000,000  11,802,740
   Series B Preferred........................   5,000,000   1,250,000
   Company-obligated mandatorily
     redeemable convertible preferred
     securities of a subsidiary trust........   6,876,003
                                              ----------- ----------- -----------
 Denominator for dilutive earnings per share-
   adjusted weighted-average shares..........  99,253,579  93,035,640  73,075,120
                                              =========== =========== ===========
Earnings per share-basic:
 Income before extraordinary item............ $      2.48 $      2.00 $      0.53
 Extraordinary item, net.....................                                0.33
                                              ----------- ----------- -----------
 Net income.................................. $      2.48 $      2.00 $      0.20
                                              =========== =========== ===========
Earnings per share-diluted:
 Income before extraordinary item............ $      1.89 $      1.53 $      0.48
 Extraordinary item, net.....................                                0.30
                                              ----------- ----------- -----------
 Net income.................................. $      1.89 $      1.53 $      0.18
                                              =========== =========== ===========
</TABLE>

                                      28

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


13. Commitments and Contingencies

Operating Leases

    The Company leases rental equipment, real estate and certain office
equipment under operating leases. Certain real estate leases require the
Company to pay maintenance, insurance, taxes and certain other expenses in
addition to the stated rentals. Future minimum lease payments, by year and in
the aggregate, for noncancellable operating leases with initial or remaining
terms of one year or more are as follows at December 31, 2000:

<TABLE>
<CAPTION>
             Real    Rental     Other
            Estate  Equipment Equipment
            Leases   Leases    Leases
           -------- --------- ---------
                  (In thousands)
<S>        <C>      <C>       <C>
2001...... $ 51,815 $ 98,158   $17,318
2002......   46,464   93,864    15,372
2003......   42,739   77,597    12,076
2004......   39,706   55,889    10,827
2005......   34,153   43,352     2,487
Thereafter  108,175   34,830
           -------- --------   -------
           $323,052 $403,690   $58,080
           ======== ========   =======
</TABLE>

    The Company was the seller-lessee in sale-leaseback transactions in 2000
where it sold rental equipment for aggregate proceeds of $218.8 million, in
1999 where it sold rental equipment for aggregate proceeds of $88.0 million and
in 1998 where it sold rental equipment for aggregate proceeds of $35.0 million.
For the 2000 transactions, the Company agreed to lease back the rental
equipment over periods ranging from eight months to five years. In connection
with the 2000 transactions, the Company recognized a gain of approximately
$12.5 million with respect to sale-leaseback transactions where the term of the
lease is for a minor portion of the remaining useful life of the equipment sold
and recorded deferred gains of approximately $4.0 million with respect to
sale-leaseback transactions where the term of the lease is for all or more than
a minor part of the remaining useful life of the equipment sold. For the 1999
transaction, the Company agreed to lease back the rental equipment over a five
year period beginning December 1999, which represented more than a minor part
of the remaining useful life, and will recognize a deferred gain of
approximately $6.3 million over the five year period. For the 1998 transaction,
the Company agreed to lease back the rental equipment over a five year period
beginning December 1998, which represented more than a minor part of the
remaining useful life, and will recognize a deferred gain on the sale of
approximately $0.6 million over the five year period. The future payments under
these leases are included in the table above.

    Rent expense under non-cancelable operating leases totaled $137.3 million,
$65.5 million and $20.5 million for the years ended December 31, 2000, 1999 and
1998, respectively. The Company's real estate leases provide for varying terms
and include 24 leases that are on a month-to-month basis and 42 leases that
provide for a remaining term of less than one year and do not provide a renewal
option.

Employee Benefit Plans

    The Company currently sponsors one defined contribution 401(k) retirement
plan which is subject to the provisions of ERISA. The Company also sponsors a
deferred profit sharing plan for the benefit of

                                      29

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

the full time employees of its Canadian subsidiaries. Under these plans, the
Company matches a percentage of the participants contributions up to a
specified amount. Company contributions to the plans were $6.2 million, $4.6
million and $1.0 million for the years ended December 31, 2000, 1999 and 1998,
respectively.

Legal Matters

    The Company is party to legal proceedings and potential claims arising in
the ordinary course of its business. In the opinion of management, the Company
has adequate legal defenses, reserves, or insurance coverage with respect to
these matters so that the ultimate resolution will not have a material adverse
effect on the Company's financial position, results of operations, or cash
flows. The Company had accrued $7.6 million and $13.7 million at December 31,
2000 and 1999, respectively, to cover the uninsured portion of possible costs
arising from these pending claims and other potential unasserted claims.

Environmental Matters

    The Company and its operations are subject to various laws and related
regulations governing environmental matters. Under such laws, an owner or
lessee of real estate may be liable for the costs of removal or remediation of
certain hazardous or toxic substances located on or in, or emanating from, such
property, as well as investigation of property damage. The Company incurs
ongoing expenses associated with the removal of underground storage tanks and
the performance of appropriate remediation at certain of its locations. The
Company believes that such removal and remediation will not have a material
adverse effect on the Company's financial position, results of operations, or
cash flows.

14. Segment Information

    Each of the Company's branch locations is an operating segment which
consists of the rental and sales of equipment and related merchandise and
parts. Certain of the Company's branches also provide speciality traffic
control services as a product line and the amount of revenue attributable to
such services was $245.0 million and $79.3 million during the years ended
December 31, 2000 and 1999, respectively. All of the Company's branches have
been aggregated into one reportable segment because they offer similar products
and services in similar markets and the factors determining strategic decisions
are comparable.

                                      30

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


    The Company operates in the United States, Canada and Mexico. Revenues are
attributable to countries based upon the location of the customers. Geographic
area information for the years ended December 31, 2000, 1999 and 1998 is as
follows:

<TABLE>
<CAPTION>
                                                    Year ended December 31
                                               --------------------------------
                                                  2000       1999       1998
                                               ---------- ---------- ----------
                                                        (In thousands)
<S>                                            <C>        <C>        <C>
Revenues from external customers
 Domestic..................................... $2,753,266 $2,086,808 $1,168,071
 Foreign......................................    165,595    146,820     52,211
                                               ---------- ---------- ----------
Total revenues from external customers........ $2,918,861 $2,233,628 $1,220,282
                                               ========== ========== ==========

Rental equipment, net
 Domestic..................................... $1,604,191 $1,537,199 $1,099,539
 Foreign......................................    128,644    122,534     43,467
                                               ---------- ---------- ----------
Total consolidated rental equipment, net...... $1,732,835 $1,659,733 $1,143,006
                                               ========== ========== ==========

Property and equipment, net
 Domestic..................................... $  405,873 $  285,456 $  180,777
 Foreign......................................     16,366     19,451      4,734
                                               ---------- ---------- ----------
Total consolidated property and equipment, net $  422,239 $  304,907 $  185,511
                                               ========== ========== ==========

Intangible assets, net
 Domestic..................................... $2,092,882 $1,740,326 $  867,090
 Foreign......................................    134,126    123,046     54,975
                                               ---------- ---------- ----------
Total consolidated intangible assets, net..... $2,227,008 $1,863,372 $  922,065
                                               ========== ========== ==========
</TABLE>

15. Quarterly Financial Information (Unaudited)

Selected Financial Data

    The following table of quarterly financial information has been prepared
from unaudited financial statements of the Company, and reflects adjustments
which are, in the opinion of management, necessary for a fair presentation of
the interim periods presented.

<TABLE>
<CAPTION>
                                        First    Second    Third   Fourth
                                       Quarter   Quarter  Quarter  Quarter
                                      --------  --------  -------- --------
                                      (In thousands, except per share data)
<S>                                   <C>       <C>       <C>      <C>
For the year ended December 31, 2000:
 Total revenues...................... $578,962  $729,946  $859,033 $750,920
 Gross profit........................  205,984   271,798   340,704  270,084
 Net income..........................   17,411    47,199    75,391   36,374
 Basic earnings per share............ $   0.24  $   0.66  $   1.07 $   0.51
 Diluted earnings per share..........     0.19      0.51      0.79     0.40

For the year ended December 31, 1999:
 Total revenues...................... $392,309  $503,662  $668,618 $669,039
 Gross profit........................  133,991   184,064   256,979  249,884
 Net income..........................   16,225    25,886    56,208   44,347
 Basic earnings per share............ $   0.24  $   0.36  $   0.78 $   0.62
 Diluted earning per share...........     0.18      0.28      0.60     0.48
</TABLE>

                                      31

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


16. Condensed Consolidating Financial Information of Guarantor Subsidiaries

    Certain indebtedness of URI, a wholly owned subsidiary of Holdings (the
"Parent"), is guaranteed by URI's United States subsidiaries (the "guarantor
subsidiaries") and, in certain cases, also by Parent. However, this
indebtedness is not guaranteed by URI's foreign subsidiaries (the
"non-guarantor subsidiaries"). The guarantor subsidiaries are all wholly-owned
and the guarantees are made on a joint and several basis and are full and
unconditional (subject to subordination provisions and subject to a standard
limitation which provides that the maximum amount guaranteed by each guarantor
will not exceed the maximum amount that can be guaranteed without making the
guarantee void under fraudulent conveyance laws). Separate consolidated
financial statements of the guarantor subsidiaries have not been presented
because management believes that such information would not be material to
investors. However, condensed consolidating financial information as of
December 31, 2000 and 1999, and for each of the three years in the period ended
December 31, 2000, are presented. The condensed consolidating financial
information of the Company and its subsidiaries are as follows:

                     CONDENSED CONSOLIDATING BALANCE SHEET

                               December 31, 2000

<TABLE>
<CAPTION>
                                                          Guarantor   Non-Guarantor  Other and     Consolidated
                                  Parent         URI     Subsidiaries Subsidiaries  Eliminations      Total
                                -----------  ----------- ------------ ------------- -------------  ------------
                                                                (In thousands)
<S>                             <C>          <C>         <C>          <C>           <C>            <C>
Assets
Cash and cash equivalents......                          $    29,733   $    4,651                  $    34,384
Accounts receivable, net.......              $   216,444     143,295      109,855                      469,594
Intercompany receivable
 (payable).....................                  319,423     (55,187)    (264,236)
Inventory......................                   54,022      73,979        5,379                      133,380
Prepaid expenses and other
 assets........................                   28,263      75,633          597                      104,493
Rental equipment, net..........                  837,972     766,219      128,644                    1,732,835
Property and equipment, net.... $    34,807      139,871     231,195       16,366                      422,239
Investment in subsidiaries.....   1,839,952    2,257,692                            $  (4,097,644)
Intangible assets, net.........                  960,444   1,132,438      134,126                    2,227,008
                                -----------  ----------- -----------   ----------   -------------  -----------
                                $ 1,874,759  $ 4,814,131 $ 2,397,305   $  135,382   $  (4,097,644) $ 5,123,933
                                ===========  =========== ===========   ==========   =============  ===========

Liabilities and Stockholder's
 Equity
Liabilities:
   Accounts payable............              $    78,623 $   165,677   $   15,855                  $   260,155
   Debt........................ $   300,000    2,647,144       3,484       24,739   $    (300,000)   2,675,367
   Deferred taxes..............                  186,091      20,702         (550)                     206,243
   Accrued expenses and
    other liabilities..........      28,816       86,560      18,862       13,750         (11,763)     136,225
                                -----------  ----------- -----------   ----------   -------------  -----------
      Total liabilities........     328,816    2,998,418     208,725       53,794        (311,763)   3,277,990

Commitments and contingencies
Company-obligated mandatorily
 redeemable convertible
 preferred securities of a
 subsidiary trust..............                                                           300,000      300,000
Series A and B preferred stock.     430,800                                                            430,800
Stockholder's equity:
   Common stock................         711                                                                711
   Additional paid-in capital..     765,529    1,488,238   1,830,500       65,657      (3,384,395)     765,529
   Retained earnings...........     355,850      327,475     358,080       22,878        (708,433)     355,850
   Accumulated other
    comprehensive
    loss.......................      (6,947)                               (6,947)          6,947       (6,947)
                                -----------  ----------- -----------   ----------   -------------  -----------
      Total stockholder's
       equity..................   1,115,143    1,815,713   2,188,580       81,588   $  (4,085,881)   1,115,143
                                -----------  ----------- -----------   ----------   -------------  -----------
                                $1,874,759   $4,814,131  $2,397,305    $135,382     $(4,097,644)   $5,123,933
                                ===========  =========== ===========   ==========   =============  ===========
</TABLE>

                                      32

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


                     CONDENSED CONSOLIDATING BALANCE SHEET

<TABLE>
<CAPTION>
                                                            December 31, 1999
                                --------------------------------------------------------------------------
                                                       Guarantor   Non-Guarantor  Other and   Consolidated
                                  Parent      URI     Subsidiaries Subsidiaries  Eliminations    Total
                                ---------- ---------- ------------ ------------- ------------ ------------
                                                              (In thousands)
<S>                             <C>        <C>        <C>          <C>           <C>          <C>
Assets
Cash and cash equivalents......            $    3,689  $   16,414    $   3,708                 $   23,811
Accounts receivable, net.......               200,419     199,981       34,585                    434,985
Intercompany receivable
 (payable).....................               142,156      42,906     (185,062)
Inventory......................                56,086      64,253        9,134                    129,473
Prepaid expenses and other
 assets........................ $   31,554      1,020      18,296       17,809   $    12,778       81,457
Rental equipment, net..........               747,232     789,967      122,534                  1,659,733
Property and equipment, net....     28,383    150,841     106,232       19,451                    304,907
Investment in subsidiaries.....  1,702,802  2,072,115                             (3,774,917)
Intangible assets, net.........               792,198     948,128      123,046                  1,863,372
                                ---------- ----------  ----------    ---------   -----------   ----------
                                $1,762,739 $4,165,756  $2,186,177    $ 145,205   $(3,762,139)  $4,497,738
                                ========== ==========  ==========    =========   ===========   ==========

Liabilities and Stockholder's
 Equity
Liabilities:
   Accounts payable............ $   30,381 $   71,995  $  120,511    $  20,059                 $  242,946
   Debt........................    300,000  2,231,923         380       33,845   $  (300,000)   2,266,148
   Deferred income taxes.......                80,476                      753                     81,229
   Accrued expenses and
    other liabilities..........     34,872    107,828      53,177       10,802         3,250      209,929
                                ---------- ----------  ----------    ---------   -----------   ----------
      Total liabilities........    365,253  2,492,222     174,068       65,459      (296,750)   2,800,252
Commitments and
 contingencies
Company-obligated mandatorily
 redeemable convertible
 preferred securities of a
 subsidiary trust..............                                                      300,000      300,000
Series A and B preferred stock.    430,800                                                        430,800
Stockholder's equity:
   Common stock................        721                                                            721
   Additional paid-in capital..    786,173  1,487,907   1,830,182       65,644   $(3,383,733)     786,173
   Retained earnings...........    179,475    185,627     181,927       13,785      (381,339)     179,475
   Accumulated other
    comprehensive income.......        317                                 317          (317)         317
                                ---------- ----------  ----------    ---------   -----------   ----------
      Total stockholder's
       equity..................    966,686  1,673,534   2,012,109       79,746    (3,765,389)     966,686
                                ---------- ----------  ----------    ---------   -----------   ----------
                                $1,762,739 $4,165,756  $2,186,177    $ 145,205   $(3,762,139)  $4,497,738
                                ========== ==========  ==========    =========   ===========   ==========
</TABLE>

                                      33

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                     For the Year Ended December 31, 2000

<TABLE>
<CAPTION>
                                                         Guarantor   Non-Guarantor  Other and   Consolidated
                                    Parent      URI     Subsidiaries Subsidiaries  Eliminations    Total
                                   --------  ---------- ------------ ------------- ------------ ------------
                                                                (In thousands)
<S>                                <C>       <C>        <C>          <C>           <C>          <C>
Revenues:
  Equipment rentals...............           $  851,541  $1,094,613   $  110,529                 $2,056,683
  Sales of rental equipment.......              145,519     178,576       23,583                    347,678
  Sales of equipment and
   merchandise and other
   revenues.......................              253,798     229,219       31,483                    514,500
                                   --------  ----------  ----------   ----------    ----------   ----------
Total revenues....................            1,250,858   1,502,408      165,595                  2,918,861
Cost of revenues:
  Cost of equipment rentals,
   excluding depreciation.........              364,047     494,350       49,080                    907,477
  Depreciation of rental
   equipment......................              152,640     155,239       20,252                    328,131
  Cost of rental equipment sales..               87,161     106,617       14,404                    208,182
  Cost of equipment and
   merchandise sales and other
   operating costs................              197,190     164,186       25,125                    386,501
                                   --------  ----------  ----------   ----------    ----------   ----------
Total cost of revenues............              801,038     920,392      108,861                  1,830,291
                                   --------  ----------  ----------   ----------    ----------   ----------
Gross profit......................              449,820     582,016       56,734                  1,088,570
Selling, general and
 administrative expenses..........              184,135     245,431       24,764                    454,330
Non-rental depreciation and
 amortization..................... $  7,718      33,692      39,618        5,273                     86,301
                                   --------  ----------  ----------   ----------    ----------   ----------
Operating income (loss)...........   (7,718)    231,993     296,967       26,697                    547,939
Interest expense..................   19,500     217,904         135       10,740    $  (19,500)     228,779
Preferred dividends of a
 subsidiary trust.................                                                      19,500       19,500
Other (income) expense, net.......                2,129      (4,285)         320                     (1,836)
                                   --------  ----------  ----------   ----------    ----------   ----------
Income (loss) before provision
 (benefit) for income taxes.......  (27,218)     11,960     301,117       15,637                    301,496
Provision (benefit) for income
 taxes............................  (11,295)      4,908     124,964        6,544                    125,121
                                   --------  ----------  ----------   ----------    ----------   ----------
Income (loss) before equity in net
 earnings of subsidiaries.........  (15,923)      7,052     176,153        9,093                    176,375
Equity in net earnings of
 subsidiaries.....................  192,298     185,246                             $ (377,544)
                                   --------  ----------  ----------   ----------    ----------   ----------
Net income........................ $176,375  $  192,298  $  176,153   $    9,093    $ (377,544)  $  176,375
                                   ========  ==========  ==========   ==========    ==========   ==========
</TABLE>

                                      34

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)



                CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                     For the Year Ended December 31, 1999

<TABLE>
<CAPTION>
                                                              Guarantor   Non-Guarantor  Other and   Consolidated
                                          Parent     URI     Subsidiaries Subsidiaries  Eliminations    Total
                                         --------  --------  ------------ ------------- ------------ ------------
                                                                      (In thousand)
<S>                                      <C>       <C>       <C>          <C>           <C>          <C>
Revenues:
  Equipment rentals.....................           $600,431   $  880,182    $100,413                  $1,581,026
  Sales of rental equipment.............            113,982      106,737      14,959                     235,678
  Sales of equipment and merchandise
   and other revenues...................            195,647      189,829      31,448                     416,924
                                         --------  --------   ----------    --------     ---------    ----------
Total revenues..........................            910,060    1,176,748     146,820                   2,233,628
Cost of revenues:
  Cost of equipment rentals, excluding
   depreciation.........................            250,959      381,718      44,295                     676,972
  Depreciation of rental equipment......            116,385      146,622      17,634                     280,641
  Cost of rental equipment sales........             62,972       64,945       8,761                     136,678
  Cost of equipment and merchandise
   sales and other operating costs......            161,902      128,328      24,189                     314,419
                                         --------  --------   ----------    --------     ---------    ----------
Total cost of revenues..................            592,218      721,613      94,879                   1,408,710
                                         --------  --------   ----------    --------     ---------    ----------
Gross profit............................            317,842      455,135      51,941                     824,918
Selling, general and administrative
 expenses............................... $  8,267   144,341      177,456      22,531                     352,595
Non-rental depreciation and
 amortization...........................    4,926    29,667       24,617       3,657                      62,867
                                         --------  --------   ----------    --------     ---------    ----------
Operating income (loss).................  (13,193)  143,834      253,062      25,753                     409,456
Interest expense........................   19,500   132,929        1,428       5,471     $ (19,500)      139,828
Preferred dividends of a subsidiary
 trust..................................                                                    19,500        19,500
Other (income) expense, net.............    9,689    (1,549)        (524)        427           278         8,321
                                         --------  --------   ----------    --------     ---------    ----------
Income (loss) before provision (benefit)
 for income taxes.......................  (42,382)   12,454      252,158      19,855          (278)      241,807
Provision (benefit) for income taxes....  (17,487)    3,039      105,531       8,058                      99,141
                                         --------  --------   ----------    --------     ---------    ----------
Income (loss) before equity in net
 earnings of subsidiaries...............  (24,895)    9,415      146,627      11,797          (278)      142,666
Equity in net earnings of subsidiaries..  167,561   158,424                               (325,985)
                                         --------  --------   ----------    --------     ---------    ----------
Net income.............................. $142,666  $167,839   $  146,627    $ 11,797     $(326,263)   $  142,666
                                         ========  ========   ==========    ========     =========    ==========
</TABLE>

                                      35

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


                CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                     For the Year Ended December 31, 1998

<TABLE>
<CAPTION>
                                                              Guarantor   Non-Guarantor  Other and   Consolidated
                                          Parent     URI     Subsidiaries Subsidiaries  Eliminations    Total
                                          -------  --------  ------------ ------------- ------------ ------------
                                                                      (In thousands)
<S>                                       <C>      <C>       <C>          <C>           <C>          <C>
Revenues:
   Equipment rentals.....................          $213,823    $649,508      $32,135                  $  895,466
   Sales of rental equipment.............            17,992      96,739        4,889                     119,620
   Sales of equipment and merchandise
    and other revenues...................            58,582     131,427       15,187                     205,196
                                          -------  --------    --------      -------      --------    ----------
Total revenues...........................           290,397     877,674       52,211                   1,220,282
Cost of revenues:
   Cost of equipment rentals,
    excluding depreciation...............            91,100     289,892       13,758                     394,750
   Depreciation of rental equipment......            45,602     125,810        4,498                     175,910
   Cost of rental equipment sales........             8,586      54,805        2,745                      66,136
   Cost of equipment and
    merchandise sales and other
    operating costs......................            49,754      98,332       11,952                     160,038
                                          -------  --------    --------      -------      --------    ----------
Total cost of revenues...................           195,042     568,839       32,953                     796,834
                                          -------  --------    --------      -------      --------    ----------
Gross profit.............................            95,355     308,835       19,258                     423,448
Selling, general and administrative
 expenses................................            31,092     155,512        9,016                     195,620
Merger-related expenses..................                        47,178                                   47,178
Non-rental depreciation and
 amortization............................ $   561     8,682      24,769        1,233      $      3        35,248
                                          -------  --------    --------      -------      --------    ----------
Operating income (loss)..................    (561)   55,581      81,376        9,009            (3)      145,402
Interest expense.........................   7,854    33,006      24,193        6,958        (7,854)       64,157
Preferred dividends of a subsidiary trust                                                    7,854         7,854
Other (income) expense, net..............            (2,481)     (2,605)         (11)          191        (4,906)
                                          -------  --------    --------      -------      --------    ----------
Income (loss) before provision (benefit)
 for income taxes and extraordinary
 item....................................  (8,415)   25,056      59,788        2,062          (194)       78,297
Provision (benefit) for income taxes.....  (3,472)   13,850      33,047           74                      43,499
                                          -------  --------    --------      -------      --------    ----------
Income (loss) before extraordinary item
 and equity in net earnings of
 subsidiaries............................  (4,943)   11,206      26,741        1,988          (194)       34,798
Extraordinary item, net..................                        21,337                                   21,337
                                          -------  --------    --------      -------      --------    ----------
Income (loss) before equity in net
 earnings of subsidiaries................  (4,943)   11,206       5,404        1,988          (194)       13,461
Equity in net earnings of subsidiaries...  18,404     7,392                                (25,796)
                                          -------  --------    --------      -------      --------    ----------
Net income............................... $13,461  $ 18,598    $  5,404      $ 1,988      $(25,990)   $   13,461
                                          =======  ========    ========      =======      ========    ==========
</TABLE>

                                      36

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


                 CONDENSED CONSOLIDATING CASH FLOW INFORMATION
                     For the Year Ended December 31, 2000

<TABLE>
<CAPTION>
                                                                Guarantor   Non-Guarantor  Other and   Consolidated
                                           Parent      URI     Subsidiaries Subsidiaries  Eliminations    Total
                                          --------  ---------  ------------ ------------- ------------ ------------
                                                                       (In thousands)
<S>                                       <C>       <C>        <C>          <C>           <C>          <C>
Net cash provided by (used in) operating
 activities.............................. $(37,379) $ 243,759   $ 227,855     $ 43,066      $ 35,420    $ 512,721
Cash Flows From Investing Activities:
   Purchases of rental equipment.........            (489,259)   (283,488)     (35,457)                  (808,204)
   Purchases of property and equipment...  (13,071)   (34,477)   (102,510)      (3,712)                  (153,770)
   Proceeds from sales of rental
    equipment............................             145,519     178,576       23,583                    347,678
   Proceeds from sale of businesses......              16,246       3,000                                  19,246
   Payments of contingent purchase
    price................................              (3,030)    (13,236)                                (16,266)
   Purchases of other companies..........            (337,257)                 (10,080)                  (347,337)
   Capital contributed to subsidiary.....     (331)                                              331
   In-process acquisition costs..........                                                     (4,285)      (4,285)
                                          --------  ---------   ---------     --------      --------    ---------
      Net cash used in investing
       activities........................  (13,402)  (702,258)   (217,658)     (25,666)       (3,954)    (962,938)
Cash Flows from Financing Activities:
   Shares repurchased and retired........                                                    (30,950)     (30,950)
   Dividend distributions to Parent......             (50,450)                                50,450
   Proceeds from debt....................             452,912       3,290                                 456,202
   Repayments of debt....................            (125,238)       (168)      (9,193)                  (134,599)
   Proceeds from sale-leaseback..........             193,478                                             193,478
   Payments of financing costs...........             (16,223)                                  (185)     (16,408)
   Capital contributions by parent.......                 331                                   (331)
   Proceeds from the exercise of stock
    options..............................      331                                                            331
   Proceeds from dividends from
    subsidiary...........................   50,450                                           (50,450)
                                          --------  ---------   ---------     --------      --------    ---------

      Net cash provided by financing
       activities........................   50,781    454,810       3,122       (9,193)      (31,466)     468,054
   Effect of foreign exchange rates......                                       (7,264)                    (7,264)
                                          --------  ---------   ---------     --------      --------    ---------

Net increase (decrease) in cash and cash
 equivalents.............................              (3,689)     13,319          943                     10,573
Cash and cash equivalents at beginning
 of period...............................               3,689      16,414        3,708                     23,811
                                          --------  ---------   ---------     --------      --------    ---------
Cash and cash equivalents at end of
 period..................................           $           $  29,733     $  4,651                  $  34,384
                                          ========  =========   =========     ========      ========    =========
Supplemental disclosure of cash flow
 information:
Cash paid for interest................... $ 19,500  $ 218,346   $     135     $ 10,782                  $ 248,763
Cash paid for income taxes...............           $  19,833                 $  3,913                  $  23,746
Supplemental disclosure of non-cash
 investing and financing activities:
The Company acquired the net assets
 and assumed certain liabilities of other
 companies as follows:
   Assets, net of cash acquired..........           $ 554,077                 $ 11,037                  $ 565,114
   Liabilities assumed...................            (141,320)                    (957)                  (142,277)
   Less:.................................
   Amounts paid in common stock and
    warrants of Parent...................             (10,000)                                            (10,000)
   Amounts paid through issuance of
    debt.................................             (65,500)                                            (65,500)
                                          --------  ---------   ---------     --------      --------    ---------
   Net cash paid.........................           $ 337,257                 $ 10,080                  $ 347,337
                                          ========  =========   =========     ========      ========    =========
</TABLE>

                                      37

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


                 CONDENSED CONSOLIDATING CASH FLOW INFORMATION
                     For the Year Ended December 31, 1999

<TABLE>
<CAPTION>
                                                                     Guarantor   Non-Guarantor  Other and   Consolidated
                                             Parent        URI      Subsidiaries Subsidiaries  Eliminations    Total
                                            ---------  -----------  ------------ ------------- ------------ ------------
                                                                           (In thousands)
<S>                                         <C>        <C>          <C>          <C>           <C>          <C>
Net cash provided by (used in) operating
 activities................................ $  (4,824) $   292,412    $ 13,185     $ 119,585    $   1,002   $   421,360
Cash Flows From Investing Activities:
   Purchases of rental equipment...........               (539,775)    (99,365)      (78,972)                  (718,112)
   Purchases of property and equipment.....   (14,181)     (74,634)    (20,366)      (14,468)                  (123,649)
   Proceeds from sales of rental
    equipment..............................                113,982     106,737        14,959                    235,678
   Proceeds from sale of
    businesses.............................                  1,040       2,354         3,127                      6,521
   Payments of contingent purchase price...                 (2,387)     (4,265)       (1,564)                    (8,216)
   Purchases of other companies............               (915,937)                  (70,853)                  (986,790)
   Capital contributed to subsidiary.......  (522,985)                                            522,985
   In-process acquisition costs............                                                        (1,002)       (1,002)
                                            ---------  -----------    --------     ---------    ---------   -----------
      Net cash used in investing
       activities..........................  (537,166)  (1,417,711)    (14,905)     (147,771)     521,983    (1,595,570)
Cash Flows from Financing Activities:
   Dividend distributions to Parent........                (19,500)                                19,500
   Proceeds from debt......................              1,025,843      26,524        31,249                  1,083,616
   Repayments of debt......................               (474,808)    (20,958)       (1,884)                  (497,650)
   Proceeds from sale-leaseback............                 88,000                                               88,000
   Payments of financing costs.............                (18,995)                     (448)                   (19,443)
   Capital contributions by parent.........                522,985                               (522,985)
   Proceeds from issuance of common
    stock and warrants, net of issuance
    costs..................................    64,701                                                            64,701
   Proceeds from issuance of Series A and
    B preferred stock, net of issuance
    costs..................................   430,800                                                           430,800
   Proceeds from the exercise of stock
    options................................    26,989                                                            26,989
   Proceeds from dividends from
    subsidiary.............................    19,500                                             (19,500)
                                            ---------  -----------    --------     ---------    ---------   -----------

      Net cash provided by financing
       activities..........................   541,990    1,123,525       5,566        28,917     (522,985)    1,177,013
   Effect of foreign exchange rates........                                              598                        598
                                            ---------  -----------    --------     ---------    ---------   -----------

Net increase (decrease) in cash and cash
 equivalents...............................                 (1,774)      3,846         1,329                      3,401
Cash and cash equivalents at beginning of
 period....................................                  1,774      16,257         2,379                     20,410
                                            ---------  -----------    --------     ---------    ---------   -----------
Cash and cash equivalents at end of period. $          $              $ 20,103     $   3,708                $    23,811
                                            =========  ===========    ========     =========    =========   ===========

Supplemental disclosure of cash flow
 information:
Cash paid for interest..................... $  19,500  $    98,728    $  1,194     $   4,863                $   124,285
Cash paid for income taxes.................            $    16,372                 $   1,137                $    17,509

Supplemental disclosure of non-cash
 investing and financing activities:
The Company acquired the net assets and
 assumed certain liabilities of other
 companies as follows:
   Assets, net of cash acquired............            $ 1,371,807                 $  96,760                $ 1,468,567
   Liabilities assumed.....................               (448,685)                  (23,697)                  (472,382)
   Less:
   Amounts paid through issuance
    of debt................................                 (7,185)                   (2,210)                    (9,395)
                                            ---------  -----------    --------     ---------    ---------   -----------
   Net cash paid...........................            $   915,937                 $  70,853                $   986,790
                                            =========  ===========    ========     =========    =========   ===========
</TABLE>

                                      38

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


                 CONDENSED CONSOLIDATING CASH FLOW INFORMATION
                     For the Year Ended December 31, 1998

<TABLE>
<CAPTION>
                                                                   Guarantor   Non-Guarantor  Other and   Consolidated
                                           Parent        URI      Subsidiaries Subsidiaries  Eliminations    Total
                                          ---------  -----------  ------------ ------------- ------------ ------------
                                                                         (In thousands)
<S>                                       <C>        <C>          <C>          <C>           <C>          <C>
Net cash provided by (used in) operating
 activities.............................. $  (4,157) $   (63,760)  $ 206,996     $ 67,370      $   9,680  $   216,129
Cash Flows From Investing Activities:
   Purchases of rental equipment.........               (415,140)    (50,494)     (13,900)                   (479,534)
   Purchases of property and equipment...   (15,535)     (65,742)     (2,851)      (1,050)           561      (84,617)
   Proceeds from sales of rental
    equipment............................                 17,992      96,739        4,889                     119,620
   Proceeds from sale of businesses......                 10,640                                               10,640
   Payments of contingent purchase
    price................................                             (2,800)      (1,156)                     (3,956)
   Purchases of other companies..........               (840,730)    (12,510)     (58,597)                   (911,837)
   Capital contributed to subsidiary.....  (492,590)                                             492,590
   In-process acquisition costs..........                                                           (241)        (241)
                                          ---------  -----------   ---------     --------     ----------  -----------
      Net cash provided by (used in)
       investing activities..............  (508,125)  (1,292,980)     28,084      (69,814)       492,910   (1,349,925)
Cash Flows from Financing Activities:
   Dividend distributions to Parent......                 (4,658)                                  4,658
   Proceeds from debt....................   300,000    1,225,586      10,187       27,864       (300,000)   1,263,637
   Repayments of debt....................               (432,222)   (230,685)     (22,760)                   (685,667)
   Proceeds from sale-leaseback..........                 35,000                                               35,000
   Payments of financing costs...........                (24,982)                                (10,000)     (34,982)
   Capital contributions by parent.......                492,590                                (492,590)
   Distributions to stockholders.........                             (3,536)                                  (3,536)
   Proceeds from issuance of common
    stock and warrants, net of issuance
    costs................................   207,005                                                           207,005
   Proceeds from the exercise of stock
    options..............................       619                                                               619
   Proceeds from issuance of redeemable
    convertible preferred securities.....                                                        300,000      300,000
   Proceeds from dividends from
    subsidiary...........................     4,658                                               (4,658)
                                          ---------  -----------   ---------     --------     ----------  -----------
      Net cash provided by (used in)
       financing activities..............   512,282    1,291,314    (224,034)       5,104       (502,590)   1,082,076
   Effect of foreign exchange rates......                                            (281)                       (281)
                                          ---------  -----------   ---------     --------     ----------  -----------
Net increase (decrease) in cash and cash
 equivalents.............................                (65,426)     11,046        2,379                     (52,001)
Cash and cash equivalents at beginning of
 period..................................                 67,200       5,211                                   72,411
                                          ---------  -----------   ---------     --------     ----------  -----------
Cash and cash equivalents at end of
 period.................................. $          $     1,774   $  16,257     $  2,379                 $    20,410
                                          =========  ===========   =========     ========     ==========  ===========
Supplemental disclosure of cash flow
 information:
Cash paid for interest................... $   4,658  $    27,085   $  11,098     $    316                 $    43,157
Cash paid for income taxes...............            $     8,034                 $  2,190                 $    10,224

Supplemental disclosure of non-cash
 investing and financing activities:
The Company acquired the net assets and
 assumed certain liabilities of other
 companies as follows:
   Assets, net of cash acquired..........            $ 1,409,516   $  12,510     $ 79,441                 $ 1,501,467
   Liabilities assumed...................               (500,228)                 (18,633)                   (518,861)
   Less:
   Amounts paid in common stock and
    warrants of Parent...................                (58,093)                  (2,211)                    (60,304)
   Amounts paid through issuance of
    debt.................................                (10,465)                                             (10,465)
                                          ---------  -----------   ---------     --------     ----------  -----------
   Net cash paid.........................            $   840,730   $  12,510     $ 58,597                 $   911,837
                                          =========  ===========   =========     ========     ==========  ===========
</TABLE>

                                      39

<PAGE>

                             UNITED RENTALS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


17. Subsequent Events

    New Preferred Stock. On September 28, 2001, the Company entered into an
agreement effecting an exchange of the Company's outstanding Series A Preferred
for an equal number of shares of Series C Preferred and the exchange of the
Company's Series B Preferred for an equal number of shares of Series D
Preferred. Except as described below, the material terms of the new Series C
Preferred are the same as the old Series A Preferred and the material terms of
the new Series D Preferred are the same as the old Series B Preferred.

    The certificates of designation for the Series A Preferred and Series B
Preferred (the "Prior Preferred") provide that, upon the occurrence of a Change
of Control (as defined in these certificates of designation), the Company is
required to redeem the Prior Preferred. The term "Change of Control," as
defined in these certificates of designation, would have included certain
transactions that were disapproved by the Company's board. The certificates of
designation for Series C Preferred and Series D Preferred (the "New Preferred")
change these provisions by excluding from the definition of "Change of Control"
transactions that are defined as "Non-Approved Changes of Control." In general,
a Non-Approved Change of Control transaction is a change of control transaction
that the board has disapproved and which the board has not facilitated by such
actions as weakening or eliminating the Company's Stockholder Rights Plan.

    If a Non-Approved Change of Control occurs, the holders of the New
Preferred obtain the following additional rights, but only if, prior to the
transaction, the board does not elect to offer the holders of the New Preferred
essentially the same redemption rights that apply to an approved Change of
Control transaction:

   .  The holder of the Series C Preferred would elect a majority of the board
      for a specified period and, during such period, the unanimous vote of the
      board would be required to approve any optional redemption of the New
      Preferred or to declare, pay, or change the accrual rate of, any
      dividends on the New Preferred.

   .  Upon liquidation, the holders of the New Preferred would receive, in
      addition to the liquidation preference and accrued dividends, an amount
      equal to 6.25% of the liquidation preference, compounded annually from
      the date the Series A Preferred was issued, in the case of the Series C
      Preferred, or the date the Series B was issued, in the case of the Series
      D Preferred, and ending on the date of the Non Approved Change of
      Control. In addition, after holders of the Common Stock have received the
      equivalent amount, the holders of the New Preferred would participate
      with the holders of the Common Stock in any remaining amounts available
      for distribution (based upon the number of shares of Common Stock into
      which such Preferred shares would then be convertible).

   .  Dividends would begin to accrue on the New Preferred. Accrued dividends
      would not be payable until liquidation or sale of the Company, unless the
      board by unanimous vote approves earlier payment. The dividend rate would
      be 10% per annum of the liquidation preference, compounded annually. If
      these dividends are not paid quarterly, additional dividends would accrue
      at the rate of 8% per annum of the liquidation preference, compounded
      annually. Any regular or additional dividends that are not paid quarterly
      would be added to the liquidation preference.

    Stockholders Rights Plan. The Company adopted a Stockholders Rights Plan on
September 28, 2001 (with a record date of October 19, 2001). This plan and
other provisions of the Company's charter and bylaws may have the effect of
deferring hostile takeovers or delaying or preventing changes in control or
management of the Company, including transactions in which the shareholders of
the Company might otherwise receive a premium for their shares over then
current market prices. The rights expire on September 27, 2011.

                                      40

<PAGE>

                        REPORT OF INDEPENDENT AUDITORS

Board of Directors
United Rentals, Inc. (Parent Company of United Rentals (North America), Inc.)

    We have audited the accompanying consolidated balance sheets of United
Rentals (North America), Inc. as of December 31, 2000 and 1999 and the related
consolidated statements of operations, stockholder's equity, and cash flows for
each of the three years in the period ended December 31, 2000. These
consolidated financial statements are the responsibility of the management of
United Rentals (North America), Inc. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

    We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

    In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of United Rentals (North America), Inc. at December 31, 2000 and 1999, and the
consolidated results of its operations and its cash flows for each of the three
years in the period ended December 31, 2000 in conformity with accounting
principles generally accepted in the United States.

                                          /S/ ERNST & YOUNG LLP

MetroPark, New Jersey
February 23, 2001

                                      41

<PAGE>

                     UNITED RENTALS (NORTH AMERICA), INC.

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                December 31
                                                                           ----------------------
                                                                              2000        1999
                                                                           ----------  ----------
                                                                               (In thousands,
                                                                             except share data)
<S>                                                                        <C>         <C>
Assets
Cash and cash equivalents................................................. $   34,384  $   23,811
Accounts receivable, net of allowance for doubtful accounts of $55,624 and
  $58,376 at 2000 and 1999, respectively..................................    469,594     434,985
Inventory.................................................................    133,380     129,473
Prepaid expenses and other assets.........................................    104,493      37,125
Rental equipment, net.....................................................  1,732,835   1,659,733
Property and equipment, net...............................................    387,432     276,524
Goodwill, net of accumulated amortization of $103,219 and $49,556 at 2000
  and 1999, respectively..................................................  2,215,532   1,853,279
Other intangible assets, net..............................................     11,476      10,093
                                                                           ----------  ----------
                                                                           $5,089,126  $4,425,023
                                                                           ==========  ==========
Liabilities and Stockholder's Equity
Liabilities:
   Accounts payable....................................................... $  260,155  $  212,565
   Debt...................................................................  2,675,367   2,266,148
   Deferred taxes.........................................................    206,243      81,229
   Accrued expenses and other liabilities.................................    119,172     171,807
                                                                           ----------  ----------
       Total liabilities..................................................  3,260,937   2,731,749
Commitments and contingencies
Stockholder's equity:
   Common stock--$.01 par value, 3,000 shares authorized, 1,000
     shares issued and outstanding........................................
   Additional paid-in capital.............................................  1,507,661   1,507,330
   Retained earnings......................................................    327,475     185,627
   Accumulated other comprehensive (loss) income..........................     (6,947)        317
                                                                           ----------  ----------
       Total stockholder's equity.........................................  1,828,189   1,693,274
                                                                           ----------  ----------
                                                                           $5,089,126  $4,425,023
                                                                           ==========  ==========
</TABLE>

                            See accompanying notes.

                                      42

<PAGE>

                     UNITED RENTALS (NORTH AMERICA), INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                             Year Ended December 31
                                                       ----------------------------------
                                                          2000        1999        1998
                                                       ----------  ----------  ----------
                                                                 (In thousands)
<S>                                                    <C>         <C>         <C>
Revenues:
 Equipment rentals.................................... $2,056,683  $1,581,026  $  895,466
 Sales of rental equipment............................    347,678     235,678     119,620
 Sales of equipment and merchandise and other revenues    514,500     416,924     205,196
                                                       ----------  ----------  ----------
Total revenues........................................  2,918,861   2,233,628   1,220,282
Cost of revenues:
 Cost of equipment rentals, excluding depreciation....    907,477     676,972     394,750
 Depreciation of rental equipment.....................    328,131     280,641     175,910
 Cost of rental equipment sales.......................    208,182     136,678      66,136
 Cost of equipment and merchandise sales and other
   operating costs....................................    386,501     314,419     160,038
                                                       ----------  ----------  ----------
Total cost of revenues................................  1,830,291   1,408,710     796,834
                                                       ----------  ----------  ----------
Gross profit..........................................  1,088,570     824,918     423,448
Selling, general and administrative expenses..........    454,330     344,328     195,620
Merger-related expenses...............................                             47,178
Non-rental depreciation and amortization..............     78,583      57,941      34,684
                                                       ----------  ----------  ----------
Operating income......................................    555,657     422,649     145,966
Interest expense......................................    228,779     139,828      64,157
Other (income) expense, net...........................     (1,836)     (1,646)     (5,097)
                                                       ----------  ----------  ----------
Income before provision for income taxes and
  extraordinary item..................................    328,714     284,467      86,906
Provision for income taxes............................    136,416     116,628      46,971
                                                       ----------  ----------  ----------
Income before extraordinary item......................    192,298     167,839      39,935
Extraordinary item, net of tax benefit of $14,255.....                             21,337
                                                       ----------  ----------  ----------
Net income............................................ $  192,298  $  167,839  $   18,598
                                                       ==========  ==========  ==========
</TABLE>

                            See accompanying notes.

                                      43

<PAGE>

                     UNITED RENTALS (NORTH AMERICA), INC.

                CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>
                                          Common Stock                                       Accumulated
                                        ---------------- Additional                             Other
                                         Number           Paid-in   Retained  Comprehensive Comprehensive
                                        of Shares Amount  Capital   Earnings     Income     (Loss) Income
                                        --------- ------ ---------- --------  ------------- -------------
                                                       (In thousands except share amounts)
<S>                                     <C>       <C>    <C>        <C>       <C>           <C>
Balance, December 31, 1997.............   1,000          $  402,320 $ 44,068
   Comprehensive Income:
   Net income..........................                               18,598    $ 18,598
   Other comprehensive income:
      Foreign currency translation
       adjustments-....................                                             (281)      $  (281)
                                                                                --------
   Comprehensive income................                                         $ 18,317
                                                                                ========
   Contributed capital from Parent.....                     563,045
   Reclassification of Subchapter S
    accumulated earnings to
    capital from Parent................                      18,979  (18,979)
   Pooling-of-interests................                           1    1,795
   Subchapter S distributions of a
    pooled entity......................                               (3,536)
   Dividend distribution to Parent.....                               (4,658)
                                          -----    ---   ---------- --------                   -------
Balance, December 31, 1998.............   1,000             984,345   37,288                      (281)
   Comprehensive income:
   Net income..........................                              167,839    $167,839
   Other comprehensive income:
      Foreign currency translation
       adjustments.....................                                              598           598
                                                                                --------
   Comprehensive income................                                         $168,437
                                                                                ========
   Contributed capital from parent.....                     522,985
   Dividend distributions to parent....                              (19,500)
                                          -----    ---   ---------- --------                   -------
Balance, December 31, 1999.............   1,000           1,507,330  185,627                       317
   Comprehensive income:
   Net income..........................                              192,298     192,298
   Other comprehensive income:
      Foreign currency translation
       adjustments.....................                                           (7,264)       (7,264)
                                                                                --------
   Comprehensive income................                                         $185,034
                                                                                ========
   Contributed capital from parent.....                         331
   Dividend distributions to parent....                              (50,450)
                                          -----    ---   ---------- --------                   -------
Balance, December 31, 2000.............   1,000          $1,507,661 $327,475                   $(6,947)
                                          =====    ===   ========== ========                   =======
</TABLE>


                            See accompanying notes.

                                      44

<PAGE>

                     UNITED RENTALS (NORTH AMERICA), INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                         Year Ended December 31
                                                                                  -----------------------------------
                                                                                    2000        1999         1998
                                                                                  ---------  -----------  -----------
                                                                                             (In thousands)
<S>                                                                               <C>        <C>          <C>
Cash Flows From Operating Activities:
Net income....................................................................... $ 192,298  $   167,839  $    18,598
Adjustments to reconcile net income to net cash provided by operating activities:
  Depreciation and amortization..................................................   406,714      342,403      211,747
  Gain on sales of rental equipment..............................................  (139,496)     (99,000)     (53,484)
  Gain on sale of businesses.....................................................    (4,084)      (1,842)      (4,189)
  Write down of assets held for sale.............................................                               4,040
  Extraordinary item.............................................................                              35,592
  Deferred taxes.................................................................   109,280       41,820       27,345
  Changes in operating assets and liabilities:
   Accounts receivable...........................................................     8,613      (93,716)     (53,368)
   Inventory.....................................................................    69,706       (6,544)      (6,392)
   Prepaid expenses and other assets.............................................   (77,579)      34,701       12,693
   Accounts payable..............................................................    14,290       47,586       25,737
   Accrued expenses and other liabilities........................................   (65,062)      (8,065)      (7,713)
                                                                                  ---------  -----------  -----------
      Net cash provided by operating activities..................................   514,680      425,182      210,606
                                                                                  ---------  -----------  -----------
Cash Flows From Investing Activities:
Purchases of rental equipment....................................................  (808,204)    (718,112)    (479,534)
Purchases of property and equipment..............................................  (140,699)    (109,468)     (69,643)
Proceeds from sales of rental equipment..........................................   347,678      235,678      119,620
Proceeds from sale of businesses.................................................    19,246        6,521       10,640
Purchases of other companies.....................................................  (347,337)    (986,790)    (911,837)
Payments of contingent purchase price............................................   (16,266)      (8,216)      (3,956)
                                                                                  ---------  -----------  -----------
      Net cash used in investing activities......................................  (945,582)  (1,580,387)  (1,334,710)
                                                                                  ---------  -----------  -----------
Cash Flows From Financing Activities:
Capital contributions by Parent..................................................       331      522,985      492,590
Proceeds from debt...............................................................   456,202    1,083,616    1,263,637
Payments on debt.................................................................  (134,599)    (497,650)    (685,667)
Proceeds from sale-leaseback.....................................................   193,478       88,000       35,000
Dividend distributions to Parent.................................................   (50,450)     (19,500)      (4,658)
Subchapter S distributions of a pooled entity....................................                              (3,536)
Payments of financing costs......................................................   (16,223)     (19,443)     (24,982)
                                                                                  ---------  -----------  -----------
      Net cash provided by financing activities..................................   448,739    1,158,008    1,072,384
Effect of foreign exchange rates.................................................    (7,264)         598         (281)
                                                                                  ---------  -----------  -----------
Net increase (decrease) in cash and cash equivalents.............................    10,573        3,401      (52,001)
Cash and cash equivalents at beginning of year...................................    23,811       20,410       72,411
                                                                                  ---------  -----------  -----------
Cash and cash equivalents at end of year......................................... $  34,384  $    23,811  $    20,410
                                                                                  =========  ===========  ===========
Supplemental disclosure of cash flow information:
Cash paid for interest........................................................... $ 229,263  $   104,785  $    38,499
Cash paid for taxes, net of refunds.............................................. $  23,746  $    17,509  $    10,224

Supplemental schedule of non cash investing and financing activities:
The Company acquired the net assets and assumed certain liabilities of other
 companies as follows:
  Assets, net of cash acquired................................................... $ 565,114  $ 1,468,567  $ 1,501,467
  Liabilities assumed............................................................  (142,277)    (472,382)    (518,861)
  Less:
   Amounts paid in common stock and warrants of the Parent.......................   (10,000)                  (60,304)
   Amounts paid through issuance of debt.........................................   (65,500)      (9,395)     (10,465)
                                                                                  ---------  -----------  -----------
Net cash paid.................................................................... $ 347,337  $   986,790  $   911,837
                                                                                  =========  ===========  ===========
</TABLE>

                            See accompanying notes.

                                      45

<PAGE>

                     UNITED RENTALS (NORTH AMERICA), INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

    United Rentals (North America), Inc., ("URI") and subsidiaries is a wholly
owned subsidiary of United Rentals, Inc., which is principally a holding
company ("Holdings" or "Parent"). Holdings was incorporated in July 1998 and
became the parent of URI on August 5, 1998, pursuant to the reorganization of
the legal structure of URI. Prior to such reorganization, the name of URI was
United Rentals, Inc. References herein to the "Company" refer to URI and its
subsidiaries.

    Certain footnotes are not provided for the accompanying financial
statements as the information in Notes 1 through 9, 11 and 13 through 15 to the
consolidated financial statements of United Rentals, Inc. included elsewhere in
this report is substantially equivalent to that required for the consolidated
financial statements of URI and its subsidiaries. Earnings per share data is
not provided for the operating results of URI and subsidiaries, as they are
wholly owned subsidiaries of Holdings. URI's various credit agreements and debt
instruments place restrictions on its ability to transfer funds to its
shareholder.

    Holdings provides certain services to URI in connection with its
operations. These services principally include: (i) senior management services,
(ii) finance related services and support, (iii) information technology systems
and support and (iv) acquisition related services. In addition, Holdings leases
certain equipment and real property that are made available for use by URI and
its subsidiaries. URI has made, and expects to continue to make, certain
payments to Holdings in respect of the services provided by Holdings to the
Company. The expenses relating to URI's payments to Holdings are reflected on
URI's financial statements as selling, general and administrative expenses. In
addition, although not legally obligated to do so, URI has in the past, and
expects that it will in the future, make distributions to Holdings for, among
other things, enabling Holdings to pay dividends on its preferred securities.

2. Capital Stock and Contributions

    At December 31, 2000, the Company has authorized 3,000 shares of its $0.01
par value common stock of which 1,000 shares are issued and outstanding. All of
the issued and outstanding common shares are owned by its Parent.

    Pursuant to the reorganization described in Note 1, the net proceeds from
the Company's initial public offering completed in December 1997 and the public
offering completed in March 1998 have been reflected as Contributed Capital
from the Parent in the accompanying statement of stockholder's equity. Holdings
also contributed the net proceeds from the issuance of redeemable convertible
preferred securities in August 1998 to URI. During 1999, Holdings contributed
the net proceeds from the issuance of common stock in a public offering and the
net proceeds from the issuance of perpetual convertible preferred stock to URI.

3. Condensed Consolidating Financial Information of Guarantor Subsidiaries

    Certain indebtedness of URI is guaranteed by URI's United States
subsidiaries (the "guarantor subsidiaries") but is not guaranteed by URI's
foreign subsidiaries (the "non-guarantor subsidiaries"). The guarantor
subsidiaries are all wholly-owned and the guarantees are made on a joint and
several basis and are full and unconditional (subject to subordination
provisions and subject to a standard limitation which provides that the maximum
amount guaranteed by each guarantor will not exceed the maximum amount that can
be guaranteed without making the guarantee void under fraudulent

                                      46

<PAGE>

                     UNITED RENTALS (NORTH AMERICA), INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

conveyance laws). All expenses incurred by URI have been charged by URI to its
guarantor and non-guarantor subsidiaries. Separate consolidated financial
statements of the guarantor subsidiaries have not been presented because
management believes that such information would not be material to investors.
However, condensed consolidating financial information as of December 31, 2000
and 1999, and for each of the three years in the period ended December 31,
2000, are presented. The condensed consolidating financial information of URI
and its subsidiaries are as follows:

                     CONDENSED CONSOLIDATING BALANCE SHEET

                               December 31, 2000

<TABLE>
<CAPTION>
                                                        Guarantor   Non-Guarantor              Consolidated
                                               URI     Subsidiaries Subsidiaries  Eliminations    Total
                                            ---------- ------------ ------------- ------------ ------------
                                                                    (In thousands)
<S>                                         <C>        <C>          <C>           <C>          <C>
Assets
Cash and cash equivalents..................             $   29,733   $    4,651                 $   34,384
Accounts receivable, net................... $  216,444     143,295      109,855                    469,594
Intercompany receivable (payable)..........    319,423     (55,187)    (264,236)
Inventory..................................     54,022      73,979        5,379                    133,380
Prepaid expenses and other assets..........     28,263      75,633          597                    104,493
Rental equipment, net......................    837,972     766,219      128,644                  1,732,835
Property and equipment, net................    139,871     231,195       16,366                    387,432
Investment in subsidiaries.................  2,257,692                            $(2,257,962)
Intangible assets, net.....................    960,444   1,132,438      134,126                  2,227,008
                                            ----------  ----------   ----------   -----------   ----------
                                            $4,814,131  $2,397,305   $  135,382   $(2,257,962)  $5,089,126
                                            ==========  ==========   ==========   ===========   ==========

Liabilities and Stockholder's Equity
Liabilities:
   Accounts payable........................ $   78,623  $  165,677   $   15,855                 $  260,155
   Debt....................................  2,647,144       3,484       24,739                  2,675,367
   Deferred taxes..........................    186,091      20,702         (550)                   206,243
   Accrued expenses and other liabilities..     86,560      18,862       13,750                    119,172
                                            ----------  ----------   ----------   -----------   ----------
      Total liabilities....................  2,998,418     208,725       53,794                  3,260,937

Commitments and contingencies
Stockholder's equity:
   Common stock............................
   Additional paid-in capital..............  1,488,238   1,830,500       65,657    (1,876,734)   1,507,661
   Retained earnings.......................    327,475     358,080       22,878      (380,958)     327,475
   Accumulated other comprehensive
    loss...................................                              (6,947)                    (6,947)
                                            ----------  ----------   ----------   -----------   ----------
      Total stockholder's equity...........  1,815,713   2,188,580       81,588   $(2,257,692)   1,828,189
                                            ----------  ----------   ----------   -----------   ----------
                                            $4,814,131  $2,397,305   $  135,382   $(2,257,692)  $5,089,126
                                            ==========  ==========   ==========   ===========   ==========
</TABLE>

                                      47

<PAGE>

                     UNITED RENTALS (NORTH AMERICA), INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


                     CONDENSED CONSOLIDATING BALANCE SHEET

<TABLE>
<CAPTION>
                                                                   December 31, 1999
                                            ---------------------------------------------------------------
                                                        Guarantor   Non-Guarantor              Consolidated
                                               URI     Subsidiaries Subsidiaries  Eliminations    Total
                                            ---------- ------------ ------------- ------------ ------------
                                                                    (In thousands)
<S>                                         <C>        <C>          <C>           <C>          <C>
Assets
Cash and cash equivalents.................. $    3,689  $   16,414    $   3,708                 $   23,811
Accounts receivable, net...................    200,419     199,981       34,585                    434,985
Intercompany receivable (payable)..........    142,156      42,906     (185,062)
Inventory..................................     56,086      64,253        9,134                    129,473
Prepaid expenses and other assets..........      1,020      18,296       17,809                     37,125
Rental equipment, net......................    747,232     789,967      122,534                  1,659,733
Property and equipment, net................    150,841     106,232       19,451                    276,524
Investment in subsidiaries.................  2,072,115                            $(2,072,115)
Intangible assets, net.....................    792,198     948,128      123,046                  1,863,372
                                            ----------  ----------    ---------   -----------   ----------
                                            $4,165,756  $2,186,177    $ 145,205   $(2,072,115)  $4,425,023
                                            ==========  ==========    =========   ===========   ==========

Liabilities and Stockholder's Equity
Liabilities:
   Accounts payable........................ $   71,995  $  120,511    $  20,059                 $  212,565
   Debt....................................  2,231,923         380       33,845                  2,266,148
   Deferred income taxes...................     80,476                      753                     81,229
   Accrued expenses and other liabilities..    107,828      53,177       10,802                    171,807
                                            ----------  ----------    ---------   -----------   ----------
      Total liabilities....................  2,492,222     174,068       65,459                  2,731,749
Commitments and contingencies
Stockholder's equity:
   Common stock............................
   Additional paid-in capital..............  1,487,907   1,830,182       65,644   $(1,876,403)   1,507,330
   Retained earnings.......................    185,627     181,927       13,785      (195,712)     185,627
   Accumulated other comprehensive
    income.................................                                 317                        317
                                            ----------  ----------    ---------   -----------   ----------
      Total stockholder's equity...........  1,673,534   2,012,109       79,746    (2,072,115)   1,693,274
                                            ----------  ----------    ---------   -----------   ----------
                                            $4,165,756  $2,186,177    $ 145,205   $(2,072,115)  $4,425,023
                                            ==========  ==========    =========   ===========   ==========
</TABLE>

                                      48

<PAGE>

                     UNITED RENTALS (NORTH AMERICA), INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                     For the Year Ended December 31, 2000

<TABLE>
<CAPTION>
                                                         Guarantor   Non-Guarantor              Consolidated
                                                URI     Subsidiaries Subsidiaries  Eliminations    Total
                                             ---------- ------------ ------------- ------------ ------------
                                                                     (In thousands)
<S>                                          <C>        <C>          <C>           <C>          <C>
Revenues:
  Equipment rentals......................... $  851,541  $1,094,613   $  110,529                 $2,056,683
  Sales of rental equipment.................    145,519     178,576       23,583                    347,678
  Sales of equipment and merchandise and
   other revenues...........................    253,798     229,219       31,483                    514,500
                                             ----------  ----------   ----------    ----------   ----------
Total revenues..............................  1,250,858   1,502,408      165,595                  2,918,861
Cost of revenues:
  Cost of equipment rentals, excluding
   depreciation.............................    364,047     494,350       49,080                    907,477
  Depreciation of rental equipment..........    152,640     155,239       20,252                    328,131
  Cost of rental equipment sales............     87,161     106,617       14,404                    208,182
  Cost of equipment and merchandise sales
   and other operating costs................    197,190     164,186       25,125                    386,501
                                             ----------  ----------   ----------    ----------   ----------
Total cost of revenues......................    801,038     920,392      108,861                  1,830,291
                                             ----------  ----------   ----------    ----------   ----------
Gross profit................................    449,820     582,016       56,734                  1,088,570
Selling, general and administrative expenses    184,135     245,431       24,764                    454,330
Non-rental depreciation and amortization....     33,692      39,618        5,273                     78,583
                                             ----------  ----------   ----------    ----------   ----------
Operating income............................    231,993     296,967       26,697                    555,657
Interest expense............................    217,904         135       10,740                    228,779
Other (income) expense, net.................      2,129      (4,285)         320                     (1,836)
                                             ----------  ----------   ----------    ----------   ----------
Income before provision for income taxes....     11,960     301,117       15,637                    328,714
Provision for income taxes..................      4,908     124,964        6,544                    136,416
                                             ----------  ----------   ----------    ----------   ----------
Income before equity in net earnings of
 subsidiaries...............................      7,052     176,153        9,093    $ (185,246)       7,052
Equity in net earnings of subsidiaries......    185,246                                             185,246
                                             ----------  ----------   ----------    ----------   ----------
Net income.................................. $  192,298  $  176,153   $    9,093    $ (185,246)  $  192,298
                                             ==========  ==========   ==========    ==========   ==========
</TABLE>

                                      49

<PAGE>

                     UNITED RENTALS (NORTH AMERICA), INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)



                CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                     For the Year Ended December 31, 1999

<TABLE>
<CAPTION>
                                                        Guarantor   Non-Guarantor              Consolidated
                                               URI     Subsidiaries Subsidiaries  Eliminations    Total
                                             --------  ------------ ------------- ------------ ------------
                                                                     (In thousands)
<S>                                          <C>       <C>          <C>           <C>          <C>
Revenues:
  Equipment rentals......................... $600,431   $  880,182    $100,413                  $1,581,026
  Sales of rental equipment.................  113,982      106,737      14,959                     235,678
  Sales of equipment and merchandise and
   other revenues...........................  195,647      189,829      31,448                     416,924
                                             --------   ----------    --------     ---------    ----------
Total revenues..............................  910,060    1,176,748     146,820                   2,233,628
Cost of revenues:
  Cost of equipment rentals, excluding
   depreciation.............................  250,959      381,718      44,295                     676,972
  Depreciation of rental equipment..........  116,385      146,622      17,634                     280,641
  Cost of rental equipment sales............   62,972       64,945       8,761                     136,678
  Cost of equipment and merchandise sales
   and other operating costs................  161,902      128,328      24,189                     314,419

                                             --------   ----------    --------     ---------    ----------
Total cost of revenues......................  592,218      721,613      94,879                   1,408,710

                                             --------   ----------    --------     ---------    ----------
Gross profit................................  317,842      455,135      51,941                     824,918
Selling, general and administrative expenses  144,341      177,456      22,531                     344,328
Non-rental depreciation and amortization....   29,667       24,617       3,657                      57,941
                                             --------   ----------    --------     ---------    ----------
Operating income............................  143,834      253,062      25,753                     422,649
Interest expense............................  132,929        1,428       5,471                     139,828
Other (income) expense, net.................   (1,549)        (524)        427                      (1,646)
                                             --------   ----------    --------     ---------    ----------
Income before provision for income taxes....   12,454      252,158      19,855                     284,467
Provision for income taxes..................    3,039      105,531       8,058                     116,628
                                             --------   ----------    --------     ---------    ----------
Income before equity in net earnings of
 subsidiaries...............................    9,415      146,627      11,797     $(158,424)        9,415
Equity in net earnings of subsidiaries......  158,424                                              158,424
                                             --------   ----------    --------     ---------    ----------
Net income.................................. $167,839   $  146,627    $ 11,797     $(158,424)   $  167,839
                                             ========   ==========    ========     =========    ==========
</TABLE>

                                      50

<PAGE>

                     UNITED RENTALS (NORTH AMERICA), INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                     For the Year Ended December 31, 1998

<TABLE>
<CAPTION>
                                                          Guarantor   Non-Guarantor              Consolidated
                                                 URI     Subsidiaries Subsidiaries  Eliminations    Total
                                               --------  ------------ ------------- ------------ ------------
                                                                       (In thousands)
<S>                                            <C>       <C>          <C>           <C>          <C>
Revenues:
   Equipment rentals.......................... $213,823    $649,508      $32,135                  $  895,466
   Sales of rental equipment..................   17,992      96,739        4,889                     119,620
   Sales of equipment and merchandise and
    other revenues............................   58.582     131,427       15,187                     205,196
                                               --------    --------      -------      -------     ----------
Total revenues................................  290,397     877,674       52,211                   1,220,282
Cost of revenues:
   Cost of equipment rentals, excluding
    depreciation..............................   91,100     289,892       13,758                     394,750
   Depreciation of rental equipment...........   45,602     125,810        4,498                     175,910
   Cost of rental equipment sales.............    8,586      54,805        2,745                      66,136
   Cost of equipment and merchandise sales
    and other operating costs.................   49,754      98,332       11,952                     160,038
                                               --------    --------      -------      -------     ----------
Total cost of revenues........................  195,042     568,839       32,953                     796,834
                                               --------    --------      -------      -------     ----------
Gross profit..................................   95,355     308,835       19,258                     423,448
Selling, general and administrative expenses..   31,092     155,512        9,016                     195,620
Merger-related expenses.......................               47,178                                   47,178
Non-rental depreciation and amortization......    8,682      24,769        1,233                      34,684
                                               --------    --------      -------      -------     ----------
Operating income..............................   55,581      81,376        9,009                     145,966
Interest expense..............................   33,006      24,193        6,958                      64,157
Other (income) expense, net...................   (2,481)     (2,605)         (11)                     (5,097)
                                               --------    --------      -------      -------     ----------
Income before provision for income taxes and
 extraordinary item...........................   25,056      59,788        2,062                      86,906
Provision for income taxes....................   13,850      33,047           74                      46,971
                                               --------    --------      -------      -------     ----------
Income before extraordinary item and equity in
 net earnings of subsidiaries.................   11,206      26,741        1,988                      39,935
Extraordinary item, net.......................               21,337                                   21,337
                                               --------    --------      -------      -------     ----------
Income before equity in net earnings of
 subsidiaries.................................   11,206       5,404        1,988      $(7,392)        11,206
Equity in net earnings of subsidiaries........    7,392                                                7,392
                                               --------    --------      -------      -------     ----------
Net income.................................... $ 18,598    $  5,404      $ 1,988      $(7,392)    $   18,598
                                               ========    ========      =======      =======     ==========
</TABLE>

                                      51

<PAGE>

                     UNITED RENTALS (NORTH AMERICA), INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


                 CONDENSED CONSOLIDATING CASH FLOW INFORMATION
                     For the Year Ended December 31, 2000

<TABLE>
<CAPTION>
                                                         Guarantor   Non-Guarantor              Consolidated
                                                URI     Subsidiaries Subsidiaries  Eliminations    Total
                                             ---------  ------------ ------------- ------------ ------------
                                                                     (In thousands)
<S>                                          <C>        <C>          <C>           <C>          <C>
Net cash provided by operating activities... $ 243,759   $ 227,855     $ 43,066                  $ 514,680
Cash Flows From Investing Activities:
   Purchases of rental equipment............  (489,259)   (283,488)     (35,457)                  (808,204)
   Purchases of property and equipment......   (34,477)   (102,510)      (3,712)                  (140,699)
   Proceeds from sales of rental equipment..   145,519     178,576       23,583                    347,678
   Proceeds from sale of businesses.........    16,246       3,000                                  19,246
   Payments of contingent purchase price....    (3,030)    (13,236)                                (16,266)
   Purchases of other companies.............  (337,257)                 (10,080)                  (347,337)
                                             ---------   ---------     --------        ----      ---------
      Net cash used in investing
       activities...........................  (702,258)   (217,658)     (25,666)                  (945,582)
Cash Flows from Financing Activities:
   Dividend distributions to Parent.........   (50,450)                                            (50,450)
   Proceeds from debt.......................   452,912       3,290                                 456,202
   Repayments of debt.......................  (125,238)       (168)      (9,193)                  (134,599)
   Proceeds from sale-leaseback.............   193,478                                             193,478
   Payments of financing costs..............   (16,223)                                            (16,223)
   Capital contributions by parent..........       331                                                 331
                                             ---------   ---------     --------        ----      ---------

      Net cash provided by financing
       activities...........................   454,810       3,122       (9,193)                   448,739
   Effect of foreign exchange rates.........                             (7,264)                    (7,264)
                                             ---------   ---------     --------        ----      ---------

Net increase (decrease) in cash and cash
 equivalents................................    (3,689)     13,319          943                     10,573
Cash and cash equivalents at beginning of
 period.....................................     3,689      16,414        3,708                     23,811
                                             ---------   ---------     --------        ----      ---------
Cash and cash equivalents at end of
 period..................................... $           $  29,733     $  4,651                  $  34,384
                                             =========   =========     ========        ====      =========

Supplemental disclosure of cash flow
 information:
Cash paid for interest...................... $ 218,346   $     135     $ 10,782                  $ 229,263
Cash paid for income taxes.................. $  19,833                 $  3,913                  $  23,746

Supplemental disclosure of non-cash
 investing and financing activities:
The Company acquired the net assets and
 assumed certain liabilities of other
 companies as follows:
   Assets, net of cash acquired............. $ 554,077                 $ 11,037                  $ 565,114
   Liabilities assumed......................  (141,320)                    (957)                  (142,277)
   Less:
   Amounts paid in common stock and
    warrants of Parent......................   (10,000)                                            (10,000)
   Amounts paid through issuance
    of debt.................................   (65,500)                                            (65,500)
                                             ---------   ---------     --------        ----      ---------
   Net cash paid............................ $ 337,257                 $ 10,080                  $ 347,337
                                             =========   =========     ========        ====      =========
</TABLE>

                                      52

<PAGE>

                     UNITED RENTALS (NORTH AMERICA), INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


                 CONDENSED CONSOLIDATING CASH FLOW INFORMATION
                     For the Year Ended December 31, 1999

<TABLE>
<CAPTION>
                                                         Guarantor   Non-Guarantor              Consolidated
                                               URI      Subsidiaries Subsidiaries  Eliminations    Total
                                           -----------  ------------ ------------- ------------ ------------
                                                                    (In thousands)
<S>                                        <C>          <C>          <C>           <C>          <C>
Net cash provided by operating activities. $   292,412    $ 13,185     $ 119,585                $   425,182
Cash Flows From Investing Activities:
   Purchases of rental equipment..........    (539,775)    (99,365)      (78,972)                  (718,112)
   Purchases of property and equipment....     (74,634)    (20,366)      (14,468)                  (109,468)
   Proceeds from sales of rental
    equipment.............................     113,982     106,737        14,959                    235,678
   Proceeds from sale of businesses.......       1,040       2,354         3,127                      6,521
   Payments of contingent purchase price..      (2,387)     (4,265)       (1,564)                    (8,216)
   Purchases of other companies...........    (915,937)                  (70,853)                  (986,790)
                                           -----------    --------     ---------      -----     -----------
      Net cash used in investing
       activities.........................  (1,417,711)    (14,905)     (147,771)                (1,580,387)
Cash Flows from Financing Activities:
   Dividend distributions to Parent.......     (19,500)                                             (19,500)
   Proceeds from debt.....................   1,025,843      26,524        31,249                  1,083,616
   Repayments of debt.....................    (474,808)    (20,958)       (1,884)                  (497,650)
   Proceeds from sale-leaseback...........      88,000                                               88,000
   Payments of financing costs............     (18,995)                     (448)                   (19,443)
   Capital contributions by parent........     522,985                                              522,985
                                           -----------    --------     ---------      -----     -----------

      Net cash provided by financing
       activities.........................   1,123,525       5,566        28,917                  1,158,008
   Effect of foreign exchange rates.......                                   598                        598
                                           -----------    --------     ---------      -----     -----------

Net increase (decrease) in cash and cash
 equivalents..............................      (1,774)      3,846         1,329                      3,401
Cash and cash equivalents at beginning of
 period...................................       1,774      16,257         2,379                     20,410
                                           -----------    --------     ---------      -----     -----------
Cash and cash equivalents at end of
 period................................... $              $ 20,103     $   3,708                $    23,811
                                           ===========    ========     =========      =====     ===========

Supplemental disclosure of cash flow
 information:
Cash paid for interest.................... $    98,728    $  1,194     $   4,863                $   104,785
Cash paid for income taxes................ $    16,372                 $   1,137                $    17,509

Supplemental disclosure of non-cash
 investing and financing activities:
The Company acquired the net assets and
 assumed certain liabilities of other
 companies as follows:
   Assets, net of cash acquired........... $ 1,371,807                 $  96,760                $ 1,468,567
   Liabilities assumed....................    (448,685)                  (23,697)                  (472,382)
   Less:
   Amounts paid through issuance of
    debt..................................      (7,185)                   (2,210)                    (9,395)
                                           -----------    --------     ---------      -----     -----------
   Net cash paid.......................... $   915,937                 $  70,853                $   986,790
                                           ===========    ========     =========      =====     ===========
</TABLE>

                                      53

<PAGE>

                     UNITED RENTALS (NORTH AMERICA), INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                 CONDENSED CONSOLIDATING CASH FLOW INFORMATION
                     For the Year Ended December 31, 1998

<TABLE>
<CAPTION>
                                                                              Non-
                                                              Guarantor    Guarantor                Consolidated
                                                    URI      Subsidiaries Subsidiaries Eliminations    Total
                                                -----------  ------------ ------------ ------------ ------------
                                                                         (In thousands)
<S>                                             <C>          <C>          <C>          <C>          <C>
Net cash provided by (used in) operating
 activities.................................... $   (63,760)  $ 206,996     $ 67,370                $   210,606
Cash Flows From Investing Activities:
   Purchases of rental equipment...............    (415,140)    (50,494)     (13,900)                  (479,534)
   Purchases of property and equipment.........     (65,742)     (2,851)      (1,050)                   (69,643)
   Proceeds from sales of rental
    equipment..................................      17,992      96,739        4,889                    119,620
   Proceeds from sale of businesses............      10,640                                              10,640
   Payments of contingent purchase price.......                  (2,800)      (1,156)                    (3,956)
   Purchases of other companies................    (840,730)    (12,510)     (58,597)                  (911,837)
                                                -----------   ---------     --------      -----     -----------
      Net cash used in investing
       activities..............................  (1,292,980)     28,084      (69,814)                (1,334,710)
Cash Flows from Financing Activities:
   Dividend distributions to Parent............      (4,658)                                             (4,658)
   Proceeds from debt..........................   1,225,586      10,187       27,864                  1,263,637
   Repayments of debt..........................    (432,222)   (230,685)     (22,760)                  (685,667)
   Proceeds from sale-leaseback................      35,000                                              35,000
   Payments of financing costs.................     (24,982)                                            (24,982)
   Capital contributions by parent.............     492,590                                             492,590
   Distributions to stockholders...............                  (3,536)                                 (3,536)
                                                -----------   ---------     --------      -----     -----------

      Net cash provided by (used in)
       financing activities....................   1,291,314    (224,034)       5,104                  1,072,384
   Effect of foreign exchange rates............                                 (281)                      (281)
                                                -----------   ---------     --------      -----     -----------

Net increase (decrease) in cash and cash
 equivalents...................................     (65,426)     11,046        2,379                    (52,001)
Cash and cash equivalents at beginning of
 period........................................      67,200       5,211                                  72,411
                                                -----------   ---------     --------      -----     -----------
Cash and cash equivalents at end of period..... $     1,774   $  16,257     $  2,379                $    20,410
                                                ===========   =========     ========      =====     ===========

Supplemental disclosure of cash flow
 information:
Cash paid for interest......................... $    27,085   $  11,098     $    316                $    38,499
Cash paid for income taxes..................... $     8,034                 $  2,190                $    10,224

Supplemental disclosure of non-cash
 investing and financing activities:
The Company acquired the net assets and
 assumed certain liabilities of other companies
 as follows:
   Assets, net of cash acquired................ $ 1,409,516   $  12,510     $ 79,441                $ 1,501,467
   Liabilities assumed.........................    (500,228)                 (18,633)                  (518,861)
   Less:
   Amounts paid in common stock and
    warrants of Parent.........................     (58,093)                  (2,211)                   (60,304)
   Amounts paid through issuance of debt.......     (10,465)                                            (10,465)
                                                -----------   ---------     --------      -----     -----------
   Net cash paid............................... $   840,730   $  12,510     $ 58,597                $   911,837
                                                ===========   =========     ========      =====     ===========
</TABLE>

                                      54

<PAGE>

        REPORT OF INDEPENDENT AUDITORS ON FINANCIAL STATEMENT SCHEDULES

Board of Directors
United Rentals, Inc.

    We have audited the consolidated financial statements of United Rentals,
Inc. as of December 31, 2000 and 1999, and for each of the three years in the
period ended December 31, 2000, and have issued our report thereon dated
February 23, 2001, except for Note 2, paragraphs 9, 10 and 11, and Note 17 as
to which the date is September 28, 2001, included elsewhere in this Amendment
No. 1 on Form 10-K/A. Our audits also included the financial statement
schedules listed in Item 14(a)(2). These schedules are the responsibility of
the Company's management. Our responsibility is to express an opinion based on
our audits.

    In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic consolidated financial statements taken as
a whole, present fairly in all material respects the information set forth
therein.

                                          /s/ ERNST & YOUNG LLP

MetroPark, New Jersey
February 23, 2001, except for
  Note 4 as to which the date
  is September 28, 2001

                                      55

<PAGE>

           SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                             UNITED RENTALS, INC.

                            CONDENSED BALANCE SHEET

<TABLE>
<CAPTION>
                                                       December 31
                                                  ----------------------
                                                     2000        1999
                                                  ----------  ----------
                                                  Restated (see Note 4)
                                                      (In thousands)
<S>                                               <C>         <C>
Assets
Prepaid expenses and other assets................             $   31,554
Property and equipment, net...................... $   34,807      28,383
Investment in and advances to subsidiaries.......  1,839,952   1,702,802
                                                  ----------  ----------
                                                  $1,874,759  $1,762,739
                                                  ==========  ==========

Liabilities and Stockholders' Equity
Liabilities:
   Accounts payable..............................             $   30,381
   Debt.......................................... $  300,000     300,000
   Accrued expenses and other liabilities........     28,816      34,872
                                                  ----------  ----------
       Total liabilities.........................    328,816     365,253

Commitments and contingencies
Series A and B preferred stock...................    430,800     430,800
Stockholders' equity:
   Common stock..................................        711         721
   Additional paid-in capital....................    765,529     786,173
   Retained earnings.............................    355,850     179,475
   Accumulated other comprehensive (loss) income.     (6,947)        317
                                                  ----------  ----------
       Total stockholders' equity................  1,115,143     966,686
                                                  ----------  ----------
                                                  $1,874,759  $1,762,739
                                                  ==========  ==========
</TABLE>


                            See accompanying notes.

                                      56

<PAGE>

           SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                             UNITED RENTALS, INC.

                       CONDENSED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                                      Year Ended December 31
                                                   ---------------------------
                                                     2000      1999     1998
                                                   --------  --------  -------
                                                          (In thousands)
<S>                                                <C>       <C>       <C>
Selling, general and administrative expenses......           $  8,267
Non-rental depreciation and amortization.......... $  7,718     4,926  $   561
                                                   --------  --------  -------
Operating loss....................................   (7,718)  (13,193)    (561)
Interest expense..................................   19,500    19,500    7,854
Other (income) expense, net.......................              9,689
                                                   --------  --------  -------
Loss before benefit for income taxes..............  (27,218)  (42,382)  (8,415)
Benefit for income taxes..........................   11,295    17,487    3,472
                                                   --------  --------  -------
Net loss before equity in earnings of subsidiaries  (15,923)  (24,895)  (4,943)
Equity in earnings of subsidiaries................  192,298   167,561   18,404
                                                   --------  --------  -------
Net income........................................ $176,375  $142,666  $13,461
                                                   ========  ========  =======
</TABLE>



                            See accompanying notes.

                                      57

<PAGE>

           SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                             UNITED RENTALS, INC.

                        CONDENSED CASH FLOW INFORMATION

<TABLE>
<CAPTION>
                                                          Year Ended December 31,
                                                      ------------------------------
                                                        2000      1999       1998
                                                      --------  ---------  ---------
                                                              (In thousands)
<S>                                                   <C>       <C>        <C>
Net cash used in operating activities................ $(37,379) $  (4,824) $  (4,157)
Cash Flows from Investing Activities:
   Purchase of property and equipment................  (13,071)   (14,181)   (15,535)
   Capital contributed to subsidiary.................     (331)  (522,985)  (492,590)
                                                      --------  ---------  ---------
       Net cash used in investing activities.........  (13,402)  (537,166)  (508,125)
Cash Flows from Financing Activities:
   Proceeds from issuance of common stock and
     warrants, net of issuance costs.................              64,701    207,005
   Proceeds from the issuance of Series A and B
     preferred stock, net of issuance costs..........             430,800
   Proceeds from debt................................                        300,000
   Proceeds from the exercise of stock options.......      331     26,989        619
   Proceeds from dividends from subsidiary...........   50,450     19,500      4,658
                                                      --------  ---------  ---------
       Net cash provided by financing activities.....   50,781    541,990    512,282
                                                      --------  ---------  ---------
   Net increase in cash and cash equivalents.........
   Cash and cash equivalents at beginning of
     period..........................................
                                                      --------  ---------  ---------
       Cash and cash equivalents at end of
         period...................................... $         $          $
                                                      ========  =========  =========
</TABLE>



                            See accompanying notes.

                                      58

<PAGE>

           SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                             UNITED RENTALS, INC.

                    NOTES TO CONDENSED FINANCIAL STATEMENTS

1. Basis of Presentation

    United Rentals, Inc. is principally a holding company ("Holdings") and
conducts its operations primarily through its wholly owned subsidiary United
Rentals (North America), Inc. ("URI") and subsidiaries. In the parent
company-only financial statements, Holdings, investment in subsidiaries is
stated at cost plus equity in undistributed earnings of subsidiaries since the
date of acquisition. Holdings share of net income of its unconsolidated
subsidiaries is included in consolidated income using the equity method. The
parent company-only financial statements should be read in conjunction with the
Company's consolidated financial statements.

2. Debt

    See Note 10 to the Consolidated Financial Statements for information
concerning debt.

3. Guarantee

    See Note 10 to the Consolidated Financial Statements for information
concerning the guarantee.

4. Preferred Stock

    See Note 2 to the Consolidated Financial Statements for certain information
concerning the Series A and B preferred stock.

                                      59

<PAGE>

                SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS

                             UNITED RENTALS, INC.
                                (In thousands)

<TABLE>
<CAPTION>
                                                                     Additions
                                                               ------------------
                                                    Balance at Charged to                         Balance
                                                    Beginning  Costs and                          at End
                   Description                      of Period   Expenses   Other     Deductions  of Period
                   -----------                      ---------- ---------- -------    ----------  ---------
<S>                                                 <C>        <C>        <C>        <C>         <C>

Year ended December 31, 2000:
  Allowance for doubtful accounts..................  $58,376    $38,431   $14,791(a)  $55,974(c)  $55,624
  Reserve for inventory obsolescence and shrinkage.   16,782      9,124    11,302(b)   21,747(d)   15,461
  Insurance reserves...............................   22,750     30,027                37,333(e)   15,444
Year ended December 31, 1999:
  Allowance for doubtful accounts..................   43,481     46,121    23,568(a)   54,794(c)   58,376
  Reserve for inventory obsolescence and shrinkage.    9,288      6,857    11,975(b)   11,338(d)   16,782
  Insurance reserves...............................   20,553     49,223                47,026(e)   22,750
Year ended December 31, 1998:
  Allowance for doubtful accounts..................   11,085     24,810    19,079(a)   11,493(c)   43,481
  Reserve for inventory obsolescence and shrinkage.      620      3,254     6,068(b)      654(d)    9,288
  Insurance reserves...............................   11,665     16,456                 7,568(e)   11,665
</TABLE>



--------
(a)Represents allowance for doubtful accounts established through acquisitions.
(b)Represents reserve for inventory obsolescence and shrinkage assumed through
   acquisitions.
(c)Represents write-offs of accounts, net of recoveries.
(d)Represents write-offs of inventory items.
(e)Represents payments.

                                      60

<PAGE>

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

<TABLE>
<S>    <C>
(a)(1) Consolidated Financial Statements:
     Report of Independent Auditors
     United Rentals, Inc. Consolidated Balance Sheets--December 31, 2000 and 1999
     United Rentals, Inc. Consolidated Statements of Operations for the years ended December 31,
       2000, 1999 and 1998
     United Rentals, Inc. Consolidated Statements of Stockholders' Equity for the years ended
       December 31, 2000, 1999 and 1998
     United Rentals, Inc. Consolidated Statements of Cash Flows for the years ended December 31,
       2000, 1999 and 1998
     Notes to Consolidated Financial Statements
     Report of Independent Auditors
     United Rentals (North America), Inc. Consolidated Balance Sheets--December 31, 2000 and
       1999
     United Rentals (North America), Inc. Consolidated Statements of Operations for the years
       ended December 31, 2000, 1999 and 1998
     United Rentals (North America), Inc. Consolidated Statements of Stockholder's Equity for the
       years ended December 31, 2000, 1999 and 1998
     United Rentals (North America), Inc. Consolidated Statements of Cash Flows for the years
       ended December 31, 2000, 1999 and 1998
     Notes to Consolidated Financial Statements
(a)(2) Financial Statement Schedules:
     Report of Independent Auditors on Financial Statement Schedules
     Schedule I Condensed Financial Information of the Registrant
     Schedule II Valuation and Qualifying Accounts
</TABLE>

    Schedules other than those listed are omitted as they are not applicable or
the required or equivalent information has been included in the financial
statements or notes thereto.

(a)(3) Exhibits:

    A revised version of Exhibit 23 is being filed with this amendment.

(b) Reports on Form 8-K:

    1.  Form 8-K dated December 18, 2000 (earliest event reported December 18,
        2000); Item 5 was reported.

    2.  Form 8-K dated December 18, 2000 (earliest event reported December 18,
        2000); Item 5 was reported.

                                      61

<PAGE>

                                  SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this amended report to be
signed on its behalf by the undersigned, thereunto duly authorized.

                                          UNITED RENTALS, INC.

Date: October 9, 2001
                                             /S/ MICHAEL J. NOLAN
                                          By: _________________________________
                                             Michael J. Nolan
                                             Chief Financial Officer


                                      62

<PAGE>

                                  SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this amended report to be
signed on its behalf by the undersigned, thereunto duly authorized.

                                          UNITED RENTALS (NORTH AMERICA), INC.

Date: October 9, 2001                        /s/ MICHAEL J. NOLAN
                                          By: _________________________________
                                             Michael J. Nolan
                                             Chief Financial Officer

                                      63