<PAGE>

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                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

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

                                   FORM 10-Q

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

               For the quarterly period ended September 30, 1999

                                      OR

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

                         Commission File No. 001-14163

                       National Equipment Services, Inc.
            (Exact name of registrant as specified in its charter)

               DELAWARE                              36-4087016
    (State or other Jurisdiction of               (I.R.S. Employer
    Incorporation or Organization)               Identification No.)

                       1603 Orrington Avenue, Suite 1600
                           Evanston, Illinois 60201
                   (Address of principal executive offices)
                                  (Zip code)

                                (847) 733-1000
             (Registrant's telephone number, including area code)

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

  Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [_]

  There were 23,781,187 shares of Common Stock ($.01 par value) outstanding as
of November 15, 1999.
-------------------------------------------------------------------------------
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<PAGE>

                       NATIONAL EQUIPMENT SERVICES, INC.

                         QUARTERLY REPORT ON FORM 10-Q

                             For the Quarter ended
                               September 30, 1999

                                     INDEX
<TABLE>
<CAPTION>
                                                                           Page
                                                                          Number
                                                                          ------
 <C>     <S>                                                              <C>
 PART I. FINANCIAL INFORMATION
 Item 1.  Financial Statements
          Consolidated Balance Sheets at September 30, 1999
          (Unaudited) and December 31, 1998 ..........................       3
          Consolidated Statements of Operations for the three and nine
          months ended September 30, 1999 and 1998 (Unaudited)........       4
          Consolidated Statements of Cash Flows for the nine months
          ended September 30, 1999 and 1998 (Unaudited)...............       5
          Notes to Consolidated Financial Statements (Unaudited)......       6
 Item 2.  Management's Discussion and Analysis of Financial Condition
          and Results of Operations...................................      10
 Item 3.  Quantitative and Qualitative Disclosures About Market Risk..      12
 PART II. OTHER INFORMATION
 Item 1.  Legal Proceedings...........................................      13
 Item 2.  Changes in Securities.......................................      13
 Item 3.  Defaults upon Senior Securities.............................      13
 Item 4.  Submission of Matters to a Vote of Security Holders.........      13
 Item 5.  Other Information...........................................      13
 Item 6.  Exhibits and Reports on Form 8-K............................      13
 SIGNATURE.............................................................     14
</TABLE>

                                       2
<PAGE>

PART I.  FINANCIAL INFORMATION
  ITEM 1.  FINANCIAL STATEMENTS

                       NATIONAL EQUIPMENT SERVICES, INC.
                                AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                     (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                     September 30, December 31,
                                                         1999          1998
                                                     ------------- ------------
                                                      (Unaudited)
<S>                                                  <C>           <C>
Assets:
 Cash and cash equivalents..........................  $    6,241     $    344
 Accounts receivable, net of allowance for doubtful
  accounts of $3,768 and $2,590, respectively.......     101,918       53,323
 Inventory, net.....................................      36,550       15,606
 Rental equipment, net..............................     548,604      378,254
 Property and equipment, net........................      51,214       29,016
 Intangible assets, net.............................     343,091      218,959
 Loan origination costs, net........................      11,313       10,197
 Prepaid and other assets, net......................      20,403       14,784
                                                      ----------     --------
   Total assets.....................................  $1,119,334     $720,483
                                                      ==========     ========
Liabilities and Stockholders' Equity:
 Cash overdraft.....................................  $      --      $  6,331
 Accounts payable...................................      53,479       25,665
 Accrued interest...................................      12,798        2,105
 Accrued expenses and other liabilities.............      58,318       35,680
 Debt...............................................     748,402      513,836
                                                      ----------     --------
   Total liabilities................................     872,997      583,617
                                                      ----------     --------
Convertible preferred stock.........................      95,172          --
                                                      ----------     --------
Stockholders' Equity:
Common stock, $0.01 par, 100,000 shares authorized;
 23,953 and 24,123 shares outstanding...............         240          241
Treasury stock at cost, 170 shares..................      (1,541)         --
Additional paid-in capital..........................     123,607      123,564
Retained earnings...................................      28,961       13,163
Stock subscriptions receivable......................        (102)        (102)
                                                      ----------     --------
   Total stockholders' equity.......................     151,165      136,866
                                                      ----------     --------
   Total liabilities and stockholders' equity.......  $1,119,334     $720,483
                                                      ==========     ========
</TABLE>


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

                                       3
<PAGE>

                       NATIONAL EQUIPMENT SERVICES, INC.
                                AND SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                     (in thousands, except per share data)

<TABLE>
<CAPTION>
                                          For the Three       For the Nine
                                           Months Ended       Months Ended
                                          September 30,       September 30,
                                         -----------------  ------------------
                                           1999     1998      1999      1998
                                         --------  -------  --------  --------
<S>                                      <C>       <C>      <C>       <C>
Revenues:
 Rental revenues........................ $ 98,111  $53,839  $236,940  $100,251
 Rental equipment sales.................    7,128    4,085    20,417     8,197
 New equipment sales and other..........   26,865   13,228    72,122    28,986
                                         --------  -------  --------  --------
   Total revenues.......................  132,104   71,152   329,479   137,434
                                         --------  -------  --------  --------
Cost of Revenues:
 Rental equipment depreciation..........   18,286    9,752    45,946    17,581
 Cost of rental equipment sales.........    4,774    2,769    13,762     5,123
 Cost of new equipment sales............   10,232    6,877    25,939    15,358
 Other operating expenses...............   36,666   17,254    98,584    38,766
                                         --------  -------  --------  --------
   Total cost of revenues...............   69,958   36,652   184,231    76,828
                                         --------  -------  --------  --------
Gross profit............................   62,146   34,500   145,248    60,606
Selling, general and administrative
 expenses...............................   26,229   13,668    64,465    25,619
Non-rental depreciation and
 amortization...........................    4,778    2,485    12,351     4,557
                                         --------  -------  --------  --------
Operating income........................   31,139   18,347    68,432    30,430
Other income, net.......................      269      103       936       255
Interest income (expense), net..........  (15,500)  (7,966)  (41,834)  (16,001)
                                         --------  -------  --------  --------
Income before income taxes and
 extraordinary charge...................   15,908   10,484    27,534    14,684
Income tax expense......................    6,681    4,246    11,564     5,981
                                         --------  -------  --------  --------
Income before extraordinary charge......    9,227    6,238    15,970     8,703
Extraordinary charge-extinguishment of
 debt, net of taxes.....................      --     1,424       --      1,424
                                         --------  -------  --------  --------
Net income.............................. $  9,227  $ 4,814  $ 15,970  $  7,279
                                         ========  =======  ========  ========
Basic earnings per common share
 Earnings before extraordinary charge... $   0.39  $  0.29  $   0.68  $   0.51
 Extraordinary charge...................      --      0.07       --       0.09
                                         --------  -------  --------  --------
Net earnings............................ $   0.39  $  0.22  $   0.68  $   0.42
                                         ========  =======  ========  ========
Average number of common shares used in
 basic calculation......................   23,465   21,562    23,362    17,136
                                         ========  =======  ========  ========
Diluted earnings per common share
 Earnings before extraordinary charge... $   0.29  $  0.28  $   0.56  $   0.48
 Extraordinary charge...................      --      0.07       --       0.08
                                         --------  -------  --------  --------
Net earnings............................ $   0.29  $  0.21  $   0.56  $   0.40
                                         ========  =======  ========  ========
Average number of common shares used in
 diluted calculation....................   31,774   22,818    28,834    18,358
                                         ========  =======  ========  ========
</TABLE>


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

                                       4
<PAGE>

                       NATIONAL EQUIPMENT SERVICES, INC.
                                AND SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                 (in thousands)

<TABLE>
<CAPTION>
                                                             For the Nine
                                                             Months Ended
                                                             September 30,
                                                          --------------------
                                                            1999       1998
                                                          ---------  ---------
<S>                                                       <C>        <C>
Operating Activities:
Net income..............................................  $  15,970  $   7,279
Adjustments to reconcile net income to net cash provided
 by operating activities:
 Depreciation and amortization..........................     58,297     22,138
 Gain on sale of rental equipment.......................     (6,655)    (3,074)
 Gain on sale of property and equipment.................       (144)       (46)
 Loss on extinguishment of long-term debt...............        --       1,424
 Changes in operating assets and liabilities:
  Accounts receivable...................................    (20,966)    (8,526)
  Inventory.............................................    (12,068)      (660)
  Prepaid and other assets..............................    (11,800)      (628)
  Accounts payable......................................     15,291        851
  Accrued expenses and other liabilities................     20,220     17,746
                                                          ---------  ---------
Net cash provided by operating activities...............     58,145     36,504
                                                          ---------  ---------
Investing Activities:
Net cash paid for acquisitions..........................   (217,132)  (389,939)
Purchases of rental equipment...........................   (167,165)  (104,391)
Proceeds from sale of rental equipment..................     20,417      8,197
Purchases of property and equipment.....................    (17,662)    (5,132)
Proceeds from sale of property and equipment............      1,227         67
                                                          ---------  ---------
Net cash used in investing activities...................   (380,315)  (491,198)
                                                          ---------  ---------
Financing Activities:
Proceeds from long-term debt............................    513,476    391,060
Payments on long-term debt..............................   (183,910)   (59,513)
Net proceeds from sale of common stock..................         42     98,087
Purchase of treasury stock..............................     (1,541)       --
Payments of loan origination costs......................        --      (9,960)
                                                          ---------  ---------
Net cash provided by financing activities...............    328,067    419,674
                                                          ---------  ---------
Net increase (decrease) in cash and cash equivalents....      5,897    (35,020)
Cash and cash equivalents at beginning of period........        344     35,682
                                                          ---------  ---------
Cash and cash equivalents at end of period..............  $   6,241  $     662
                                                          =========  =========
</TABLE>


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

                                       5
<PAGE>

                       NATIONAL EQUIPMENT SERVICES, INC.
                               AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (in thousands, except per share data)

1. Organization

  National Equipment Services, Inc. (the "Company") was organized on June 4,
1996 under the laws of Delaware for the purpose of owning and operating
equipment rental facilities by means of acquiring existing businesses. The
Company is primarily involved in the rental of equipment to construction and
industrial users and operates from locations in 32 states.

2. Basis of presentation

  The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. Accordingly, these unaudited financial statements and
related notes should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company annual report on Form 10-
K. In the opinion of management, all adjustments considered necessary for a
fair presentation, consisting only of normal recurring adjustments, have been
included. Results of operations for the interim periods are not necessarily
indicative of the results that may be expected for a full year.

3. Earnings per share

  The Company's earnings per share for the three and nine months ended
September 30, 1999 and 1998 is calculated as follows:
<TABLE>
<CAPTION>
                                      For the Three           For the Nine
                                      Months Ended            Months Ended
                                      September 30,           September 30,
                                 ----------------------- -----------------------
                                    1999        1998        1999        1998
                                 ----------- ----------- ----------- -----------
                                 (unaudited) (unaudited) (unaudited) (unaudited)
   <S>                           <C>         <C>         <C>         <C>
   Net income..................    $ 9,227     $4,814      $15,970     $ 7,279
   Less: accretion on preferred
    stock......................       (172)       --          (172)        --
                                   -------     ------      -------     -------
   Net income available to
    common stockholders
    (basic)....................      9,055      4,814       15,798       7,279
   Plus: interest on
    convertible debenture, net
    of tax.....................        --          26          348          26
                                   -------     ------      -------     -------
   Net income available to
    common stockholders
    (diluted)..................    $ 9,055     $4,840      $16,146     $ 7,305
                                   =======     ======      =======     =======
   Weighted average shares
    outstanding................     24,082     22,671       24,109      18,321
     Less: unvested stock......       (617)    (1,109)        (747)     (1,185)
                                   -------     ------      -------     -------
   Basic weighted average
    shares outstanding.........     23,465     21,562       23,362      17,136

   Plus:
     Unvested stock............        617      1,109          747       1,185
     Convertible debt..........        --         147        1,175          37
     Convertible preferred
      stock....................      7,692        --         3,550         --
                                   -------     ------      -------     -------
   Diluted weighted average
    shares.....................     31,774     22,818       28,834      18,358
                                   =======     ======      =======     =======
   Basic EPS...................    $  0.39     $ 0.22      $  0.68     $  0.42
                                   =======     ======      =======     =======
   Diluted EPS.................    $  0.29     $ 0.21      $  0.56     $  0.40
                                   =======     ======      =======     =======
</TABLE>

                                       6
<PAGE>

                       NATIONAL EQUIPMENT SERVICES, INC.
                               AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                     (in thousands, except per share data)

4. Acquisitions

  As more fully disclosed in the Company's Form 10-K for the year ended
December 31, 1998, the Company completed 12 acquisitions, accounted for as
purchases, at various times during 1998. In the first nine months of 1999, the
Company purchased the following rental equipment companies:

<TABLE>
<CAPTION>
      Acquisition Date   Company                        Location     Purchase Price
      ----------------   ------------------------   ---------------- --------------
      <C>                <S>                        <C>              <C>
                         Barricade Light and
      March 1, 1999      Rental                     Phoenix, AZ         $ 9,000
      March 17, 1999     Mayer-Hammant              New Orleans, LA      26,000
      March 19, 1999     Wellesley Crane Service    Boston, MA           12,000
      April 1, 1999      Advanced Warnings, Inc.    Muskogee, OK          7,000
      April 1, 1999      The Mike Madrid Company,
                         Inc., Latshaw Traffic
                         Services, Inc., and
                         Madrid Leasing Corp.       Lafayette, IN         6,000
      May 13, 1999       The Illinois operations
                         of
                         S&R Equipment Co.          Perrysburg, OH       17,000
      June 1, 1999       Elite Rentals              Mont Belvieu, TX     16,000
      July 6, 1999       Gould & Associates, Inc.   Atlanta, GA           3,000
      August 2, 1999     The Plank Company, LP      Houston, TX          85,000
      August 2, 1999     Interstate Traffic Con-
                         trol, Inc.                 Huntington, WV       12,000
      August 21, 1999    Management Technology
                         America, Ltd.              Scottsdale, AZ       12,000
      August 19, 1999    American Tool Rental
                         Corp.                      Hooksett, NH          4,000
      September 3, 1999  Alternate Construction
                         Controls, Inc.             Romeoville, IL        4,000
      September 17, 1999 L and C Flashing Barri-
                         cades, Inc.                Avon, MA             10,000
</TABLE>

  The following pro forma financial information represents the unaudited pro
forma results of operations as if the aforementioned acquisitions had been
completed on January 1, 1998 and January 1, 1999, respectively, after giving
effect to certain adjustments including increased depreciation and
amortization of property and equipment and other assets, interest expense for
acquisition debt and amortization of related intangibles and goodwill. These
pro forma results have been prepared for comparative purposes only and do not
purport to be indicative of the results of operations which would have been
achieved had these acquisitions been completed as of these dates, nor are the
results indicative of the Company's future results of operations.

<TABLE>
<CAPTION>
                                           For the Three       For the Nine
                                           Months Ended        Months Ended
                                          September  30,       September 30,
                                        ------------------- -------------------
                                          1999      1998      1999      1998
                                        --------- --------- --------- ---------
                                            (Unaudited)         (Unaudited)
      <S>                               <C>       <C>       <C>       <C>
      Revenues......................... $ 144,148 $ 119,298 $ 392,387 $ 312,725
      Operating income.................    33,378    28,412    77,284    57,854
      Net income.......................    11,035     7,882    19,518     7,719
      Basic earnings per share......... $    0.44 $    0.31 $    0.77 $    0.29
      Diluted earnings per share....... $    0.33 $    0.23 $    0.57 $    0.22
</TABLE>

                                       7
<PAGE>

                       NATIONAL EQUIPMENT SERVICES, INC.
                               AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                     (in thousands except per share data)

5. Inventory

  Inventory consists of the following:

<TABLE>
<CAPTION>
                                                      September 30, December 31,
                                                          1999          1998
                                                      ------------- ------------
      <S>                                             <C>           <C>
      New equipment..................................    $22,359      $ 7,431
      Parts..........................................     10,329        7,790
      Other..........................................      5,996        1,546
                                                         -------      -------
                                                          38,684       16,767
      Less: reserve..................................     (2,134)      (1,161)
                                                         -------      -------
                                                         $36,550      $15,606
                                                         =======      =======
</TABLE>

6. Debt

  In conjunction with its initial public offering of Common Stock in July
1998, the Company entered into a new credit facility which provided for a term
facility of $100,000 and a revolving credit facility of $300,000. In August
1999, the Company amended its credit facility to increase the available
borrowings from $400,000 to $700,000.

  On November 20, 1997, the Company issued $100,000 of Senior Subordinated
Notes due 2004, Series A (the "Series A Notes"). On October 20, 1998, the
Company completed its exchange of $100,000 of Senior Subordinated Notes due
2004, Series B (the "Series B Notes"), which have been registered for public
trading, for the Series A Notes.

  On September 17, 1998, the Company issued a $15,000 junior subordinated
convertible note in connection with its acquisition of all of the issued and
outstanding capital stock of Shaughnessy Crane Service, Inc. On July 1, 1999,
the Company repaid the note plus accrued interest of $937.

  On December 11, 1998, the Company issued $125,000 of Senior Subordinated
Notes due 2004, Series C (the "Series C Notes"), and on January 8, 1999, the
Company issued $50,000 of additional Series C Notes.

  On March 16, 1999, the Company completed its exchange of $175,000 of Senior
Subordinated Notes due 2004, Series D (the "Series D Notes"), which have been
registered for public trading, for the Series C Notes.

  The indentures for the Series B Notes and the Series D Notes and the credit
facility contain a number of covenants that, among other things, require the
Company to maintain certain financial ratios and set certain limitations on
the granting of liens, asset sales, additional indebtedness, transactions with
affiliates, restricted payments, investments and issuances of stock. The
Company is currently in compliance with all covenants of the indentures
governing the Series B Notes, the Series D Notes and the credit facility.

  The Company is a holding company with no independent operations, and the
Company's assets (excluding the common stock of its subsidiaries) are
insignificant. All of the Company's subsidiaries make full, unconditional,
joint and several guarantees of the Series B Notes and the Series D Notes, and
all of these subsidiaries are directly or indirectly wholly-owned by the
Company. The separate financial statements of each of these wholly-owned
subsidiaries are not presented as management believes that separate financial
statements and other disclosures concerning these subsidiaries are not
individually meaningful for presentation or material to investors.

7. Convertible Preferred Stock

  On May 14, 1999 and June 18, 1999, the Company issued 60 and 40 shares,
respectively, of Senior Redeemable Convertible Preferred Stock, Series A (the
"Preferred Shares") for proceeds of approximately $100,000, less a 5% facility
fee. Each Preferred Share is convertible at the option of the holder into a
number of

                                       8
<PAGE>

                       NATIONAL EQUIPMENT SERVICES, INC.
                               AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                     (in thousands except per share data)
shares of the Company's Common Stock equal to $1,000 divided by the conversion
price (the "Conversion Price") then in effect. The Conversion Price is $13.00,
subject to adjustment based upon (i) certain issuances of Common Stock at a
price per share below the then current Conversion Price and (ii) standard
anti-dilution adjustments. Each Preferred Share is convertible at the option
of the Company into a number of shares of Common Stock equal to $1,000 divided
by the then current Conversion Price if at any time after one year from the
issue date of the Preferred Shares the average closing market price of the
Common Stock over a 60 consecutive trading day period equals or exceeds
$20.00. The Preferred Shares are voted with the Company's Common Stock on an
as converted basis. The $5,000 facility fee will be accreted over the life of
the Preferred Stock.


  Each holder of Preferred Shares will be entitled to receive dividends and
other distributions on a parity with each holder of Common Stock in an amount
equal to the dividends per share payable on the number of shares of Common
Stock into which such Preferred Shares would be convertible on the record
date. On April 30, 2009, the Company will redeem all of the shares of
Preferred Stock then outstanding, at a price per share equal to $1,000 plus an
amount per share equal to all declared and unpaid dividends thereon.

  If a change of control occurs, the Company will within 5 business days
thereafter offer to purchase from each holder of Preferred Shares all
outstanding Preferred Shares then held by such holder at a purchase price
equal to the greater of: (A) the amount, if any, that each holder of Preferred
Shares would be entitled to receive per share of Common Stock in connection
with the change of control if such holder had converted its Preferred Shares
and (B) $20.00 in cash per share of Common Stock assuming such holder had
converted its Preferred Shares. If a liquidation or winding-up of the Company
(other than a change of control) occurs, no distribution will be made to the
holders of shares of any class of junior stock (including Common Stock)
unless, prior thereto, the holders of Preferred Shares have received an amount
per Preferred Share equal to the greater of: (A) $1,000 plus all declared and
unpaid dividends and (B) the proceeds in liquidation that the holders of
Preferred Shares would have received in respect of all shares of Common Stock
issuable to such holders upon conversion.

8. Common Stock

  On June 4, 1996, in connection with the Company's formation, the Company
authorized 25 shares of Class A Common Stock (24 of which were reserved for
issuance to the Company's majority stockholder), par value $0.01, and 150
shares of Class B Common Stock (75 of which were reserved for issuance to the
Company's majority stockholder), par value $0.01. On October 28, 1997, the
authorized shares of Class A Common Stock were increased to 50.

  In connection with its initial public offering of 7,000 shares of Common
Stock on July 13, 1998, the Company exchanged all of its Class A and Class B
Common Stock for newly established Common Stock. The Class A and Class B
Common Stock was converted into an aggregate of 115 shares of newly
established Common Stock. Each share of newly established Common Stock was
then split into 139 shares of Common Stock. In conjunction with the July 1998
acquisitions of Falconite and R&R Rentals, the Company issued 278 and 296
shares of the Common Stock, respectively. On August 19, 1998, NES sold 375
additional shares of its Common Stock in connection with the underwriters'
exercise of their over-allotment option. In September 1999, the Company's
Board of Directors authorized the repurchase of up to 1,500 Shares of Common
Stock. During the third quarter of 1999, the Company repurchased 170 shares of
Common Stock at a cost of $1,541.

9. Subsequent events

In October 1999, the Company acquired Tropical Ladder & Lifts, Inc., a rental
equipment company based in West Palm Beach, FL, Safety Lights Sales and
Leasing, Inc., a highway safety company based in Houston, TX, and Cantel Inc.,
a Portland, OR based traffic safety and trench shoring company, for an
aggregate purchase price of approximately $47,900. During the fourth quarter
of 1999, the Company repurchased 172 shares of Common Stock at a cost of
$1,558.

                                       9
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
       RESULTS OF OPERATIONS (in thousands)

  The following table sets forth, for the periods indicated, information
derived from the combined and historical consolidated statements of operations
of the Company expressed as a percentage of total revenues.

<TABLE>
<CAPTION>
                              Three Months Ended                Nine Months Ended
                                September 30,                     September 30,
                         -------------------------------  --------------------------------
                              1999            1998             1999             1998
                         ---------------  --------------  ---------------  ---------------
<S>                      <C>       <C>    <C>      <C>    <C>       <C>    <C>       <C>
Rental revenues......... $ 98,111   74.3% $53,839   75.7% $236,940   71.9% $100,251   72.9%
Rental equipment sales..    7,128    5.4    4,085    5.7    20,417    6.2     8,197    6.0
New equipment sales and
 other..................   26,865   20.3   13,228   18.6    72,122   21.9    28,986   21.1
                         --------  -----  -------  -----  --------  -----  --------  -----
Total revenues..........  132,104  100.0   71,152  100.0   329,479  100.0   137,434  100.0
Cost of revenues........   69,958   53.0   36,652   51.5   184,231   55.9    76,828   55.9
                         --------  -----  -------  -----  --------  -----  --------  -----
Gross profit............   62,146   47.0   34,500   48.5   145,248   44.1    60,606   44.1
Selling, general and
 administrative
 expenses...............   26,229   19.9   13,668   19.2    64,465   19.6    25,619   18.6
Non-rental depreciation
 and amortization.......    4,778    3.6    2,485    3.5    12,351    3.7     4,557    3.3
                         --------  -----  -------  -----  --------  -----  --------  -----
Operating income........   31,139   23.5   18,347   25.8    68,432   20.8    30,430   22.2
Other income, net.......      269    0.2      103    0.1       936    0.3       255    0.2
Interest expense, net...  (15,500)  11.7   (7,966)  11.2   (41,834)  12.7   (16,001)  11.6
                         --------  -----  -------  -----  --------  -----  --------  -----
Income before income
 taxes..................   15,908   12.0   10,484   14.7    27,534    8.4    14,684   10.8
Income tax expense......    6,681    5.0    4,246    6.0    11,564    3.5     5,981    4.4
                         --------  -----  -------  -----  --------  -----  --------  -----
Net income before
 extraordinary charge...    9,227    7.0    6,238    8.7    15,970    4.9     8,703    6.4
Extraordinary charge....      --     --     1,424    2.0       --     --      1,424    1.1
                         --------  -----  -------  -----  --------  -----  --------  -----
Net income.............. $  9,227    7.0% $ 4,814    6.7% $ 15,970    4.9% $  7,279    5.3%
                         ========  =====  =======  =====  ========  =====  ========  =====
</TABLE>

Historical Results of Operations

  The following discusses the Company's operations for the three and nine
months ended September 30, 1999 and 1998 and should be read in conjunction
with the unaudited consolidated financial statements and related notes thereto
of the Company included herein and the consolidated financial statements and
related notes thereto included in the Company's 1998 Annual Report on Form 10-
K.

  The Company completed twelve acquisitions during 1998, eleven of which were
completed during the first nine months of the year. Fourteen additional
acquisitions were completed during the first nine months of 1999. The results
of operations of the businesses acquired in these acquisitions are included in
the Company's financial statements only from their respective dates of
acquisition. Due to the seasonality which impacts a significant portion of the
Company's locations, the second and third quarters of the year are typically
the most active quarters for the Company.

Results of Operations for the Three and Nine Months Ended September 30, 1999
and 1998

  Revenues. Total revenues increased from $71,152 to $132,104 from the third
quarter of 1998 to the third quarter of 1999. This represents an 86% increase,
62% approximates the impact of the acquisition of additional businesses after
the second quarter of 1998. The remaining 24% is attributable to increased
volume at rental locations owned for more than one year due primarily to the
increased outsourcing demands of customers. Similarly, total revenues
increased from $137,434 to $329,479 from the nine months ended September 30,
1998 to the comparable period in 1999. This represents a 140% increase, 114%
approximates the impact of the acquisition of additional businesses and 26% is
attributable to increased volume at rental locations owned previously.

                                      10
<PAGE>

  Gross Profit. Gross profit increased from $34,500 to $62,146 and from
$60,606 to $145,248 from the third quarter of 1998 to the third quarter of
1999 and from the first nine months of 1998 to the first nine months of 1999,
respectively. Gross profit as a percentage of total revenues decreased from
48.5% to 47.0% from the third quarter of 1998 to the third quarter of 1999.
Gross margins remained a consistent 44.1% for the respective nine-month
periods.

  Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased from $13,668 to $26,229 from the third
quarter of 1998 to the third quarter of 1999 and from $25,619 to $64,465 from
the nine months ended September 30, 1998 to the nine months ended September
30, 1999. As a percentage of total revenues, selling, general and
administrative expenses increased from 19.2% to 19.9% and from 18.6% to 19.6%
during these respective periods, due to additional expenses incurred in
conjunction with the opening of new branches during the end of 1998 and the
beginning of 1999.

  Non-rental depreciation and amortization. Non-rental depreciation and
amortization increased from $2,485 to $4,778 from the third quarter of 1998 to
the third quarter of 1999 and from $4,557 to $12,351 from the nine months
ended September 30, 1998 to nine months ended September 30, 1999 due primarily
to increased amortization of goodwill attributable to the acquisitions
completed during the last three months of 1998 and the first nine months of
1999.

  Operating income. As a result of the foregoing, operating income increased
from $18,347 to $31,139 and from $30,430 to $68,432 from the third quarter of
1998 to the third quarter of 1999 and from the first nine months of 1998 to
the first nine months of 1999, respectively. Operating income approximated
25.8% and 23.5% of total revenues for the third quarters of 1998 and 1999,
respectively.

  Interest expense. Interest expense increased from $7,966 to $15,500 from the
third quarter of 1998 to the third quarter of 1999 and from $16,001 to $41,834
from the nine months ended September 30, 1998 to the nine months ended
September 30, 1999. This increase was due to additional debt necessary to
complete the Company's strategy of acquiring additional businesses.

  Income tax expense. Income tax expense increased from $4,246 to $6,681 from
the third quarter of 1998 to the third quarter of 1999 and from $5,981 to
$11,564 from the nine months ended September 30, 1998 to the nine months ended
September 30, 1999 due to growth in operations during the corresponding 1999
periods.

Liquidity and Capital Resources

  The Company's primary capital requirements are for the purchase of new
rental equipment fleet and for acquisitions. The Company's other capital
expenditures consist of the purchase of vehicles used for delivery and
maintenance and property, plant and equipment. The Company purchases rental
fleet throughout the year to replace equipment which has been sold as well as
to maintain adequate levels of equipment to meet existing and new customer
needs. Rental fleet purchases for the Company were $157,500 and $168,857 in
1998 and the first nine months of 1999, respectively.

  For the nine months ended September 30, 1999 and 1998, the Company's net
cash provided by operations was $58,145 and $36,504, respectively. For the
nine months ended September 30, 1999 and 1998, the Company's net cash used in
investing activities was $380,315 and $491,198, respectively. For the nine
months ended September 30, 1999 and 1998, the Company's net cash provided by
financing activities was $328,067 and $419,674, respectively. Net cash
provided by financing activities consists primarily of borrowings under the
Company's credit facility, indebtedness under the indentures relating to the
Series B and Series D Notes, proceeds from the sale of the Company's Senior
Redeemable Convertible Preferred Stock, Series A and proceeds from the
Company's initial public offering of common stock.

  In August 1999, the Company amended its credit facility, which currently
provides for a term facility to the Company of $100,000 and a revolving credit
facility to the Company for up to $600,000, subject to availability based on
certain financial tests including a borrowing base, to meet acquisition and
expansion needs as well as seasonal working capital and general corporate
requirements. As of September 30, 1999, $471,500 was outstanding under the
credit facility.

                                      11
<PAGE>

  The Company believes that its credit facility, together with funds generated
by operations, will provide the Company with sufficient liquidity and capital
resources in the near-term to finance its operations and pursue its business
strategy, including acquisitions. Over the long-term, the Company will need
additional financing to continue its acquisition strategy.

Year 2000 Software Issue

  As a part of the Company's strategic information system plan, management
selected one information system to serve as the common system platform for all
operating units. This common system platform is Year 2000 compliant. In
accordance with its plan, the Company has completed the migration of all
entities acquired through the third quarter of 1999 successfully to this new
system. The Company has invested approximately $1,720 to date relating to this
migration, and management estimates only minimal future investments to
complete the conversion to this common platform. Substantially all costs
associated with this migration have been and will be capitalized. As a result
of this conversion, all operating units, transactions processing and operating
systems are expected to be Year 2000 compliant.

  The Company is also in the process of assessing the Year 2000 readiness of
its suppliers and customers. Based on available information, the Company does
not believe it faces any material exposure to significant business
interruption as a result of third party Year 2000 readiness issues. However,
to the extent that these third parties cannot provide the Company with
products, services or systems that meet Year 2000 requirements on a timely
basis, or in the event that Year 2000 issues disrupt such third parties'
demand for the Company's products or services, the Company's business, results
of operations or financial position could be materially adversely affected.

Note: This document contains forward-looking statements as encouraged by the
Private Securities Litigation Reform Act of 1995. All statements contained in
this document, other than historical information, are forward-looking
statements. These statements represent management's current judgement on what
the future holds. A variety of factors could cause business conditions and the
Company's actual results to differ materially from those expected by the
Company or expressed in the Company's forward-looking statements. These
factors include, without limitation, the Company's ability to successfully
integrate acquired businesses; changes in market price or market demand; loss
of business from customers; unanticipated expenses; changes in financial
markets; and other factors discussed in the Company's filings with the
Securities and Exchange Commission.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

  The Company's credit facility, as amended, provides the Company with
available borrowings up to $700,000 provided that certain conditions and
financial tests are met, subject to a borrowing base. Borrowings under the
credit facility bear interest, at the Company's option, at either a specified
base rate plus the applicable borrowing margin or at LIBOR plus the applicable
borrowing margin. At November 11, 1999, the Company had total borrowings under
the credit facility and the term loan of $551,000, $401,000 of which were
subject to interest rate risk. Each 1.0% increase in interest rates on the
unhedged variable rate debt would impact pretax earnings by approximately
$4,010.

  The Company uses interest rate swap contracts to hedge the impact of
interest rate fluctuations on certain variable rate debt. The Company does not
hold or issue derivative financial instruments for trading or speculative
purposes. The interest rate swap fixes the interest rate at 4.51% on $150,000
of variable rate debt through October 23, 2000. The interest differential is
paid or received on a monthly basis and recognized currently as a component of
interest expense. The counterparty to the swap is a major financial
institution and management believes that the risk of incurring credit losses
is remote.

                                      12
<PAGE>

                          PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

  Not applicable.

ITEM 2. CHANGES IN SECURITIES

  Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

  Not applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

  Not applicable.

ITEM 5. OTHER INFORMATION

  Not applicable.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

  See Index of Exhibits. On August 17, 1999, the Company filed a Current
Report on Form 8-K to report its acquisition of the business of The Plank
Companies, L.P. On October 18, 1999, the Company filed an Amendment to such
Current Report on Form 8-K to include certain financial statements of The
Plank Companies, L.P. and certain pro forma information of the Company
pursuant to Items 7(a) and 7(b) of Form 8-K.

                                      13
<PAGE>

                                   SIGNATURE

  Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized on November 15, 1999.


                                          National Equipment Services, Inc.

                                                  /s/ Dennis O'Connor
                                          By: _________________________________
                                                      Dennis O'Connor
                                                  Chief Financial Officer


Form 10-Q: For the quarter ended September 30, 1999.

                                      14
<PAGE>

                               INDEX OF EXHIBITS

<TABLE>
<CAPTION>
      Exhibit
      Number                    Description of Document
      -------                   -----------------------
     <C>       <S>                                                         <C>
        4.1    Amended and Restated Credit Agreement dated as of August
               6, 1999 by and among the Company, as Borrower, NES
               Acquisition Corp., BAT Acquisition Corp., NES East
               Acquisition Corp., NES Michigan Acquisition Corp., Albany
               Ladder Company, Inc., Falconite, Inc., Falconite
               Equipment, Inc., M&M Properties, Inc., Carl's Mid South
               Rent-All Center Incorporated, Falconite Rebuild Center,
               Inc., Falconite Aviation, Inc., McCurry & Falconite
               Equipment Co., Inc., Shaughnessy Crane Service, Inc.,
               Rebel Studio Rentals, Inc., Barricade & Light Rental,
               Inc., Mayer-Hammant Equipment, LLC, Wellesley Crane
               Service, Inc., Gould & Associates, Inc., NES Shoring
               Acquisition, Inc., Plant Management, Inc., The Plank
               Companies, L.P., Richlite, Inc. and Interstate Traffic
               Control, Inc., as Guarantors, certain financial
               institutions, as Lenders, and First Union National Bank,
               as Lender and Agent.
        4.2    Amended and Restated Pledge Agreement dated as of August
               6, 1999 by and among the Company, NES Acquisition Corp.,
               BAT Acquisition Corp., NES East Acquisition Corp., NES
               Michigan Acquisition Corp., Albany Ladder Company, Inc.,
               Falconite, Inc., Falconite Equipment, Inc., M&M
               Properties, Inc., Carl's Mid South Rent-All Center
               Incorporated, Falconite Rebuild Center, Inc., Falconite
               Aviation, Inc., McCurry & Falconite Equipment Co., Inc.,
               Shaughnessy Crane Service, Inc., Rebel Studio Rentals,
               Inc., Barricade & Light Rental, Inc., Mayer-Hammant
               Equipment, LLC, Wellesley Crane Service, Inc., Gould &
               Associates, Inc., NES Shoring Acquisition, Inc., Plank
               Management, Inc., The Plank Companies, L.P., Richlite,
               Inc. and Interstate Traffic Control, Inc. and First Union
               National Bank, as Agent.
        4.3    Amended and Restated Security Agreement dated as of
               August 6, 1999 among the Company, NES Acquisition Corp.,
               BAT Acquisition Corp., NES East Acquisition Corp., NES
               Michigan Acquisition Corp., Albany Ladder Company, Inc.,
               Falconite, Inc., Falconite Equipment, Inc., M&M
               Properties, Inc., Carl's Mid South Rent-All Center
               Incorporated, Falconite Rebuild Center, Inc., Falconite
               Aviation, Inc., McCurry & Falconite Equipment Co., Inc.,
               Shaughnessy Crane Service, Inc., Rebel Studio Rentals,
               Inc., Barricade & Light Rental, Inc., Mayer-Hammant
               Equipment, LLC, Wellesley Crane Service, Inc., Gould &
               Associates, Inc., NES Shoring Acquisition, Inc., Plank
               Management, Inc., The Plank Companies, L.P., Richlite,
               Inc., Interstate Traffic Control, Inc. and First Union
               National Bank, as Agent.
       10.1    Purchase Agreement, dated as of July 31, 1999, by and
               among The Plank Companies, L.P., The Plank Companies,
               Inc., Plank Management, Inc., Michael J. Plank and NES
               Shoring Acquisition, Inc.(1)
       11.1    Statement re Computation of Per Share Earnings. Not
               required because the relevant computations can be clearly
               determined from the material contained in the financial
               statements included herein.
       21.1    Subsidiaries of the Company.
       27.1    Financial Data Schedule.
</TABLE>

--------
(1) Incorporated by reference to the Company's Current Report on Form 8-K
    dated August 2, 1999 (File No. 001-14163).

                                      15