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

## FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
 OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended
December 31, 2002           Commission File Number: 001-14145

## NEFF CORP.

(Exact Name of registrant as specified in its charter)

DELAWARE
(State or other jurisdiction of incorporation or organization)

Internal Revenue Service - Employer No. 65-0626400

3750 N.W. 87th AVENUE, SUITE 400, MIAMI, FLORIDA 33178
                                (Address of principal executive offices) (Zip Code)

Registrant's telephone number: (305) 513-3350

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act:
      (Title of class)

Class A Common Stock par value $.01 per share

Indicate by check mark
whether the registrant has (1) 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. X Yes __ No

Indicate by check mark if the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Act Yes __ No X

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 by reference in Part
III of this Form 10-K or any amendment to this Form 10-K [X].

As of June 30, 2002, the
aggregate market value of the voting stock held by non-affiliates of the
registrant was approximately $2.6 million. As of March 3, 2003, there were
16,065,350 shares of the registrants Class A Common Stock outstanding.

Documents incorporated by reference:

Portions of the
registrant's definitive Proxy Statement  to be filed with the Securities and Exchange Commission
within 120 days after the end of the registrant's fiscal year including
sections entitled Ownership of Shares of
Certain Beneficial Owners, Certain Relationships and Related
Transactions, Executive and Director Compensation, and
Compensation Committee Interlocks and Insider Participation are
incorporated by reference into Part III of this Report.

# Part I

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

The matters discussed in
this Annual Report may include forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Act of 1934, as amended. Statements that are not historical facts,
including statements about our beliefs or expectations are forward-looking
statements that are based on managements expectations given facts as
currently known by management. These statements are based on plans, estimates
and projections at the time we make the statements, and you should not place
undue reliance on them. Actual results may differ materially from those
discussed in these forward-looking statements. Factors that could cause our
future results to differ materially from those in the forward-looking statements
are described in this Annual Report under the section Risk Factors
and include, but are not limited to the success of our efforts to permanently
waive existing events of default under our credit agreement and renegotiate the
restrictive covenants in our credit agreement; our dependence on additional
capital for future growth, the high degree to which we are leveraged, the
restrictions on our operations imposed by our debt instruments, competition in
our industry, and general economic conditions.

Any forward-looking
statements speak only as of the date on which the statement is made and we
undertake no obligation to update any forward-looking statement or statements to
reflect events or circumstances occurring after the date on which the statement
is made. New factors that may affect our operating results emerge from time to
time, and it is not possible for management to predict all new factors. Further,
management cannot assess the impact of each factor on our business or the extent
to which any factor, or combinations of factors, may cause our actual results to
differ materially from those discussed in any forward-looking statements.

## ITEM 1.
BUSINESS

## General

Neff Corp. and subsidiary
(Neff or the Company) is one of the largest equipment
rental companies in the United States, with 72 rental locations in 16 states as
of March 3, 2003. We rent a wide variety of equipment, including backhoes, air
compressors, loaders, lifts and compaction equipment, to construction,
governmental and industrial customers. In addition, we sell new and used
equipment, spare parts and merchandise and provide ongoing repair and
maintenance services. Neff is a Delaware corporation that was formed in 1995.

According to industry
sources, the equipment rental industry grew from approximately $600 million in
revenues in 1982 to over $25 billion in 2002. This growth has been driven
primarily by construction and industrial companies, and other equipment users
such as governmental entities, that have increasingly outsourced their equipment
needs to reduce capital investment in non-core assets, convert costs from fixed
to variable, lower storage and maintenance costs and access a broad selection of
equipment, including the latest technology. The equipment rental industry is
highly fragmented, with an estimated 18,000 equipment rental companies in the
United States. Relative to smaller competitors, we have several advantages,
including increased purchasing power, larger inventories to service larger
accounts and the ability to transfer equipment among our rental locations in
response to changing patterns of customer demand.

-2-

## Competitive
Strengths

We believe that we have several competitive strengths.

Strong Market
Position. Neff is one of the largest construction and industrial equipment
rental companies in the United States, and is a leading competitor with a
significant presence in the Southeast and Gulf Coast regions. We operate 72
rental locations in 16 states, including Florida, Georgia, South Carolina, North
Carolina, Tennessee, Louisiana, Texas, Oklahoma, Arizona, Nevada, Utah,
California, Oregon, Washington, Virginia and Colorado. As of December 31, 2002,
we had a rental fleet with an original cost of $426.7 million and net book value
of $221.1 million. We believe our size gives us an advantage over our smaller
competitors, while our geographic diversity helps insulate us from regional
economic downturns.

High Quality Rental
Fleet. We believe our rental fleet is one of the most comprehensive and
well-maintained rental fleets in the equipment rental industry. We make ongoing
capital investment in new equipment, engage in regular sales of used equipment
and conduct an advanced preventative maintenance program. We believe this
maintenance program increases fleet utilization, extends the useful life of
equipment and produces higher resale values. As of December 31, 2002, the
average age of our rental fleet was approximately 43.8 months.

Excellent Customer
Service. We attempt to differentiate ourselves from our competitors by
providing high quality, responsive service to our customers. Service initiatives
include (1) reliable on-time equipment delivery directly to our customers
job sites; (2) on-site repairs and maintenance of rental equipment by factory
trained mechanics, generally available 24 hours a day, seven days a week; and
(3) ongoing training of an experienced sales force to consult with customers
regarding their equipment needs.

State-of-the-Art
Management Information System. We have developed a customized,
state-of-the-art management information system. We use this system to maximize
fleet utilization and determine the optimal fleet composition by market. The
system links all of our rental locations and allows management to track customer
and sales information, as well as the location, rental status and maintenance
history of every piece of equipment in the rental fleet. Rental location
managers can search our entire rental fleet for needed equipment, quickly
determine the closest location of such equipment, and arrange for delivery to
the customers work site, maximizing equipment utilization.

Experienced Management
Team. Our senior  management team has extensive  experience in the equipment rental  industry.  Our regional  management has, on average,  24
years of experience in the industry and substantial knowledge of the local markets served within their respective regions.

-3-

## Business
Strategy

Our objective is to
increase revenues, cash flow and profitability by strengthening and maintaining a
leading market position in the equipment rental industry. Key elements of our
business strategy include:

Improve Utilization of
Fleet. We will continue our efforts to improve the utilization of our rental
fleet by carefully managing inventory levels at all locations. In order to most
effectively manage our rental fleet we carefully weigh the benefits of each new
investment in rental fleet against the returns expected from that investment at
our locations. In addition, we will continue to adjust the selection of
equipment available at each location in order to provide product lines that are
tailored to most efficiently meet the demands of our customers.

Reduce Outstanding Debt.We intend to decrease our outstanding debt by using all available free cash
flow from operations to pay down the outstanding balance on our $200 million
secured revolving credit facility (the Credit Facility). By reducing
our outstanding debt, we hope to decrease leverage, reduce interest expense and
increase profitability.

Improve Marketing
Efforts.We have implemented various initiatives to increase the
effectiveness of our sales force and educate potential customers about the
benefits and value associated with renting equipment. By marketing our products
more effectively, we believe we can increase revenues, cash flow and
profitability.

Selective Openings of
Start-up Equipment Rental Locations. We will continue to explore the
possibility of expanding our operations by opening additional start-up
locations. We have been successful in opening start-up equipment rental
locations in existing markets and new markets. Our decision to open a start-up
equipment rental location is based upon a review of demographic information,
business growth projections and the level of existing competition.

## Operations

Our operations primarily
consist of renting equipment, and to a lesser extent, selling used equipment and
complementary parts and merchandise to a wide variety of construction,
governmental, and industrial customers. In addition, to service our customer
base more fully, we also sell new equipment and provide ongoing maintenance and
repair services for the equipment we sell and rent.

Our locations are grouped
together by geographic area into five different regions. A regional
vice-president oversees operations within each region.

Equipment Rentals.
We are one of the largest equipment rental companies in the United States, with
72 rental locations in 16 states. Our rental fleet is comprised of a complete
line of light and heavy construction and industrial equipment from a wide
variety of manufacturers, including John Deere, Case, Bomag, Bosch, Sullivan
Industries, Ingersoll-Rand, Gradall, Lull, JLG, Bobcat, MultiQuip, Volvo and
Wacker.

-4-

Major categories of equipment represented the following percentages (based
on original cost) of our total rental fleet as of December 31, 2002:

`Percentage of Total Rental Fleet
           Major Equipment Category               (based on original cost)
           ------------------------           ---------------------------------

Earthmoving...................................               42.8 %
Material Handling.............................               19.6
Aerial........................................               15.0
Trucks........................................                9.1
Compaction....................................                5.0
Compressors...................................                3.6
Welders.......................................                1.3
Generators....................................                1.2
Lighting......................................                0.7
Pumps.........................................                0.7
Other.........................................                1.0`

We attempt to  differentiate  ourselves from our competitors by providing a broad  selection of  well-maintained  rental  equipment and
high-quality,  responsive  service to our  customers.  As of December  31, 2002,  our  equipment  rental fleet had an original  cost of
approximately  $426.7  million and a net book value of $221.1  million.  As of December 31,  2002,  our  equipment  rental fleet had an
average age of 43.8 months,  which  management  believes  compares  favorably with other leading  equipment rental  companies.  We make
ongoing  capital  investments  in new  equipment,  engage in regular  sales of used  equipment  and  conduct an  advanced  preventative
maintenance program. This program increases fleet utilization, extends the useful life of equipment and produces higher resale values.

In addition to providing a
reliable rental fleet, management believes providing high quality customer
service is essential to our success. The equipment rental business is a service
industry requiring quick response times to satisfy customers needs. Though
some activity is arranged with lead-time, much of the rental initiation process
takes place within a 48-hour period. Consequently, equipment availability,
branch location and transportation capabilities play a major role in earning
repeat business. Rental customers prefer a quick selection process and seek
efficient communication when ordering equipment. Punctuality and reliability are
key components of the servicing process, as well as maintenance performance,
timely equipment removal at the end of the rental period and simplified billing.

-5-

Our service initiatives include:

- reliable on-time equipment delivery directly to customers' job sites;
- on-site repairs and
maintenance of rental equipment by factory trained mechanics, which are
generally available 24 hours a day, seven days a week; and
- ongoing training of an
experienced sales force to consult with customers regarding their equipment
needs.

New and Used Equipment
Sales. We maintain a regular program of selling used equipment in order to
adjust the size and composition of our rental fleet in response to changing
market conditions and our business plan. Management attempts to balance the
relative benefits of obtaining acceptable prices from equipment sales against the
revenues obtainable from future rentals of the equipment. We are generally able
to achieve favorable resale prices for our used equipment due to our strong
preventative maintenance program and our practice of selling used equipment
before it becomes obsolete or irreparable. We believe the proactive management
of our rental fleet allows us to adjust the rates of new equipment purchases and
used equipment sales to maximize equipment utilization rates and respond to
changing economic conditions. Such proactive management, together with our broad
geographic diversity, is designed to minimize the impact of regional economic downturns on our
operations. In order to serve our customer base more fully, we also sell new
equipment to customers.

Parts and Service.
We sell a full complement of parts, supplies and merchandise to our customers in
conjunction with our equipment rental and sales business. We believe that
revenues from this line of business are more stable than equipment sales
revenues because of the recurring nature of the parts and service business.

## Management
Information System

We have developed a
state-of-the-art, customized management information system that is capable of
monitoring our operations on a real-time basis. We currently employ five
management information system employees who continually update and refine the
system. This system links all of our rental locations and allows management to
track customer and sales information, as well as the location, rental status and
maintenance history of every piece of equipment in the rental fleet. We use this
system to maximize fleet utilization and determine the optimal fleet composition
by geographic market.

Using this system, branch
managers can search our entire rental fleet for needed equipment, quickly
determine the closest location of such equipment and arrange for delivery to the
customers work site. This practice helps diminish lost rents,
improves utilization and makes equipment available in markets where it can earn
increased revenues. Our communications system can handle multiple protocols and
allows the integration of systems running on different platforms.

## Customers

Our customers include
commercial, industrial and civil construction contractors, manufacturers, public
utilities, municipalities, golf courses, shipyards, commercial farmers, military
bases, offshore platform operators and maintenance contractors, refineries and
petrochemical facilities and a variety of other industrial businesses and
governmental entities.

During 2002 we served over
25,120 customers. Our top 10 customers represented 4.8% of our total revenues in
2002. Our rental equipment customers vary in size from large Fortune 500
companies who have elected to outsource much of their equipment needs to small
construction contractors, subcontractors, and machine operators whose equipment
needs are job-based and not easily determined in advance. Our new and used
equipment sales customers are generally large construction contractors who
regularly purchase wholesale equipment and annually budget for their fleet
maintenance purchases.

-6-

We do not currently provide
our own purchase financing to customers. We rent equipment, sell parts, and
provide repair services on account to customers who are successfully screened
through our credit application process. Customers can finance purchases of large
equipment with a variety of creditors, including manufacturers, banks, finance
companies and other financial institutions.

## Sales and
Marketing

Our Vice President of Sales
and Marketing directs our sales and marketing efforts. We maintain a strong
sales and marketing orientation throughout our organization in order to increase
our customer base and better understand and serve our customers. Managers at
each of our branches are responsible for supervising and training all sales
employees at that location and supervising the sales force by conducting regular
sales meetings and participating in selling activities. Branch managers develop
relationships with local customers and assist them in planning their equipment
requirements. Branch managers are also responsible for managing the mix of
equipment at their locations, keeping abreast of local construction activity and
monitoring competitors in their respective markets.

To stay informed about
their local markets, salespeople track new equipment sales and construction
projects in the area through Equipment Data Reports, FW Dodge Reports and PEC
Reports (Planning, Engineering and Construction), follow up on referrals and
visit construction sites and potential equipment users who are new to the local
area. Our salespeople use targeted marketing strategies to address the specific
needs of local customers.

## Purchasing

We purchase equipment from
vendors with reputations for product quality and reliability. Our Vice President
of Asset Management and Procurement directs fleet purchasing, asset utilization
and fleet maintenance for our rental fleet. We believe the quantity of equipment
we purchase enables us to purchase equipment directly from vendors at lower
prices and on more favorable terms than many of our smaller competitors. We seek
to maintain close relationships with our vendors to ensure the timely delivery
of new equipment. We do not rely on any one vendor exclusively for a particular
type of equipment, and we believe that we have sufficient alternative sources of
supply for the equipment we purchase, in each of our principal product
categories.

-7-

The following table
summarizes our principal categories of equipment and specifies our major
suppliers of such equipment:

`Product Category                                          Primary Vendors
----------------                                          ---------------

Air Compressors and Equipment.........................    Ingersoll-Rand, Sullivan and Sullair
Earthmoving Equipment (such as Backhoes,
  Loaders, Dozers, Excavators and Material
  Handling Equipment).................................    John Deere, Case, JCB, Kobelco, Volvo and Bobcat
Compaction Equipment, Rollers
  and Recyclers.......................................    Bomag, Wacker, MultiQuip and Rammax
Pumps.................................................    MultiQuip, Wacker and Thompson
Generators............................................    MultiQuip, Wacker and Yamaha
Welders...............................................    Miller and Lincoln
Electric Tools........................................    Bosch, Dewalt and Milwaukee
Light Towers..........................................    Specialty Lighting, Coleman and Ingersoll-Rand
Forklifts.............................................    Lull, Gradall, Toyota and Clark
Trucking..............................................    International, Ford and GMC
Aerial................................................    JLG, Genie Industries, and Snorkel
Concrete..............................................    Partner, Edco, Whiteman, Miller,                                                                                                                   MultiQuip, Wacker
                                                          and Stone
Hydraulic Hammers.....................................    Kent, Rammer, Stanley and Tramac`

## Locations

Our locations typically
include (1) offices for sales, administration and management; (2) a customer
showroom displaying equipment and parts; (3) an equipment service area; and (4)
outdoor and indoor storage facilities for equipment. Each location offers a full
range of rental equipment, with the mix of equipment available designed to meet
the anticipated needs of the customers in each location.

Each location is staffed
by, on average, 13 full-time employees, including a branch manager, a rental
coordinator, a service manager, sales representatives, an office administrator,
mechanics and drivers. Additional part-time employees are also used as
necessary.

## Competition

The equipment rental
industry is highly fragmented and very competitive. We compete with independent
third parties in all of the markets in which we operate. Most of our competitors
in the rental business tend to operate in specific, limited geographic areas,
although some larger competitors compete on a national basis. We also compete
with equipment manufacturers that sell and rent equipment directly to customers.
Some of our competitors have greater financial resources and name recognition
than we have. These larger competitors may have the ability to set market rates
for rental equipment in certain geographic areas in which we operate. If
competitive pressure forces us to lower our rental rates, this could reduce our
rental revenues and materially adversely affect our financial condition or
results of operations.

## Employees

As of December 31, 2002 we
had approximately 998 employees. None of our employees are represented by a
union or covered by a collective bargaining agreement. We believe our relations
with our employees are good.

-8-

## REGULATION

## Environmental
and Safety Regulation

Our facilities and
operations are subject to certain federal, state and local laws and regulations
relating to environmental protection and occupational health and safety,
including those governing wastewater discharges, the treatment, storage and
disposal of solid and hazardous wastes and materials, and the remediation of
contamination associated with the release of hazardous substances. We believe
that we are in compliance with such requirements and do not currently anticipate
making any material capital expenditures or incurring material costs for
environmental compliance or remediation for the current or succeeding fiscal
years.

## Sarbanes-Oxley
Act of 2002

On July 30, 2002, the
President of the United States signed into law the Sarbanes-Oxley Act of 2002
(the Act), which implemented legislative reforms intended to address
corporate and accounting fraud. In addition to the establishment of a new
accounting oversight board that will enforce auditing, quality control and
independence standards and will be funded by fees paid by publicly traded
companies, the Act places certain restrictions on the scope of services that may
be provided by accounting firms to their public company audit clients. Any
non-audit services to be provided to a public company by its accounting firm
will require advance approval by the companys audit committee. In
addition, the Act requires that an audit partner and reviewing audit partner of
an accounting firm cannot perform audit services for the same issuer for more
than five consecutive years. The Act requires a public companys chief
executive officer and chief financial officer, or their equivalent, to certify
to the accuracy of periodic reports filed with the Securities and Exchange
Commission (SEC), and provides that such officers will be subject to
civil and criminal penalties for knowing or willful violations of this
certification requirement. In addition, the Act directs the SEC to establish
minimum standards of professional conduct for attorneys, including a requirement
to report evidence of a material violation of the securities laws or a breach of
fiduciary duty by a company to the chief executive officer or chief legal
officer of the company and if such officer does not appropriately respond, to
report such evidence to the companys board or audit committee.

The Act also requires
longer prison terms for corporate executives who violate federal securities
laws; extends the period during which certain types of suits can be brought
against a company or its officers; and requires bonuses issued to top executives
prior to restatement of a companys financial statements be disgorged if
the restatement was due to corporate misconduct. Executives are also prohibited
from trading company equity securities during retirement plan
blackout periods and public companies are restricted from making
loans to company executives (other than loans by financial institutions
permitted by federal rules and regulations). In addition, the Act
directs that civil penalties levied by the SEC as a result of any judicial or
administrative action under the Act be deposited to a fund for the benefit of
harmed investors and requires the SEC to develop methods of improving penalty
collection rates. The legislation accelerates the time frame for periodic and
other disclosures by public companies. New SEC rules adopted under the Act
require directors and executive officers to provide information regarding most
changes in their ownership of a companys securities within two business
days of the change.

The Act also increases the
responsibilities of and codifies certain requirements relating to audit
committees of public companies and how they interact with the companys
registered public accounting firm. The SEC is given the authority to
adopt rules requiring that all audit committee members be independent and
prohibiting audit committee members from accepting consulting, advisory or other
compensatory fees from the company. SEC rules also require companies to disclose
whether at least one member of the audit committee is a financial expert
(as defined by the SEC) and if not, why not. The Company currently has at least
one financial expert on its audit committee.

-9-

Under the Act, a
companys registered public accounting firm is prohibited from performing
statutorily mandated audit services for a company if such companys chief
executive officer, chief financial officer, comptroller, chief accounting
officer or any person serving in equivalent positions has been employed by such
firm and participated in the audit of such company during the one-year period
preceding the audit initiation date. The Act also prohibits any officer or
director of a company or any other person acting under their direction from
taking any action to fraudulently influence, coerce, manipulate or mislead any
independent accountant engaged in the audit of the companys financial
statements for the purpose of rendering the financial statements materially
misleading. The SEC has prescribed rules as directed by the Act requiring a
company to include an internal control report and an assessment by management of
the effectiveness of the companys internal control procedures in the
companys annual report to shareholders. The Act requires the
companys registered public accounting firm that issues the audit report to
attest to and report on managements assessment of the companys
internal controls.

The Company already has,
and anticipates that it will continue to, incur additional expense in complying
with the provisions of the Act and related regulations. Management does not
expect that the costs of such compliance will have a material impact on the
Companys financial condition or results of operations.

## RISK FACTORS

These are not the only
risks and uncertainties we face. The following important factors, among others,
could adversely impact our business, operating results, financial condition and
cash flows. These factors could cause our actual results to differ materially
from those projected in any forward-looking statements made in this Annual
Report on Form 10-K or presented elsewhere by management from time to time.

## We may not be able to continue operating as a going concern.

Several factors exist that
raise significant doubt as to our ability to continue operating as a going concern.
These factors include our history of net losses, as discussed below under
We have experienced losses which may continue in future periods and
our defaults under our Credit Facility.

-10-

We were not in compliance
with the leverage ratio covenant in our Credit Facility on September 30, 2002
and December 31, 2002. Our lenders have agreed not to exercise any default
remedy available to them as a result of such noncompliance for the period from
December 20, 2002 through April 15, 2003 (the Forbearance Period).
The lenders agreement to forbear is conditioned upon our compliance with
certain conditions, including financial covenants relating to our consolidated
EBITDA. We are currently discussing amendments to the Credit Facility with our
lenders to permanently cure the default and amend the financial covenants under
the Credit Facility to be more closely aligned with our projected results of
operations. Management expects to be able to, but we cannot assure you that we
will be able to, amend the financial covenants under the Credit Facility.

If we are unable to
permanently cure the defaults, or to comply with the financial covenants under
the Credit Facility, after the Forbearance Period, then the lenders could
declare all amounts borrowed under the Credit Facility, together with accrued
interest and other fees, to be due and payable. If the debt outstanding under our Credit Facility is accelerated, this would constitute a default under
the indentures governing $155.5 million in senior subordinated notes that we
issued in May and December 1998 (the Indentures), and the trustee or
the noteholders could declare the principal amount of such notes, together with
accrued interest and other fees, to be due and payable. We cannot assure you
that we would be able to repay all amounts due under the Credit Facility or the
Indentures in the event these amounts are declared due upon a breach of the
Credit Facility or of the Indentures.

## We have experienced losses which may continue in future periods.

We anticipate that our net
loss for the first quarter of 2003 will be approximately $9.5 million. We have
experienced net losses of $15.7 million for the year ended December 31, 2002
before the write-off of goodwill, $21.6 million for the year ended December 31,
2001  and $18.4 million for the year ended December 31,
2000. We generated net income of $4.9 million for the year ended December 31,
1999 primarily as a result of the operations of two of our subsidiaries that
were sold in 1999. We can not assure you that we will be able to generate net
income in the future. Continued losses could adversely affect our financial
condition, our ability to obtain additional financing, our ability to service
our outstanding debt and the price of our common stock. Continued losses may
also adversely affect our ability to comply with financial covenants under our
Credit Facility. The potential consequences to us of a default under our Credit
Facility are described in We may not be able to continue operating as a going
concern.

-11-

## We have a substantial amount of debt.

As of January 31, 2003, we
had total indebtedness of approximately $281.8 million. The degree to which Neff
is leveraged could have important consequences to holders of our common stock
including, but not limited to:

- Our leverage may limit
our ability to obtain additional financing in the future for working capital,
capital expenditures, acquisitions or general corporate or other purposes.
- Our debt service
payments, in particular the interest payments on our senior subordinated notes,
place heavy demands on our cash flow from operations. These demands
significantly restrict our liquidity by limiting the cash available for other
purposes, including capital expenditures to expand our rental fleet and replace
rental equipment that has been sold or become obsolete.
- Our substantial leverage
may make us more vulnerable to economic downturns, limit our ability to
withstand competitive pressures and reduce our flexibility to respond to
changing business and economic conditions.

## The terms of our current indebtedness restrict our operations.

Our ability to refinance
our existing debt and finance internal growth, start-up locations and future
acquisitions is limited by the covenants contained in our Credit Facility and in
the Indentures. These covenants also restrict our ability, among other things
to:

- dispose of assets;
- engage in mergers or consolidations;
- incur debt;
- pay dividends;
- repurchase our capital stock and debt securities;
- create liens on our assets;
- make capital expenditures;
- make investments or acquisitions; and
- engage in transactions with our affiliates.

Our Credit Facility also
requires us to maintain specified financial ratios, including minimum cash flow
levels and interest coverage. These covenants may significantly limit our
ability to respond to changing business and economic conditions and to secure
additional financing, and we may be prevented from engaging in transactions,
including acquisitions, that might be considered important to our business
strategy or otherwise beneficial to us.

Our ability to comply with
the restrictive covenants in our Credit Facility and the Indentures may be
affected by events that are beyond our control. The breach of any of these
covenants could result in a default under the Credit Facility or the Indentures.
In the event of a default under the Credit Facility, our lenders could declare
all amounts borrowed under the Credit Facility, together with accrued interest
and other fees, to be due and payable. In the event of a default under the
Indentures, the trustee under each indenture or the holders of our senior
subordinated notes may declare the principal of and accrued interest on the
notes to be due and payable. A default under the Indentures that is not cured would
constitute a default under the Credit Facility and the acceleration of the debt
outstanding under the Credit Facility would constitute a default under the Indentures. We cannot assure you that we would be able to repay all amounts
due under the Credit Facility or the Indentures in the event these amounts are
declared due upon a breach of the Credit Facility or of the Indentures.

-12-

## We are dependent on additional capital for future growth.

Although we believe that we
have sufficient funds for working capital, we may need to raise additional funds
in the future if we need to respond to competitive pressures or decide to
accelerate our growth rate by increasing our rental equipment fleet, opening
more start-up locations or making additional acquisitions. The high degree to
which the Company is leveraged may deter other lenders or investors from making
funds available to the Company on terms acceptable to us or at all. Our ability
to obtain additional financing will also be subject to a number of factors,
including market conditions, our operating performance and the terms of our
existing indebtedness. We cannot assure you that we will be able to raise
additional funds. If we raise additional funds through the sale of equity or
convertible debt securities, your ownership percentage of our common stock will
be reduced. In addition, these transactions may dilute the value of our common
stock. We may have to issue securities that have rights, preferences and
privileges senior to our common stock. The terms of any additional indebtedness
may include restrictive financial and operating covenants that would limit our
ability to compete and expand. Our failure to obtain any required future
financing on terms acceptable to us could materially and adversely effect our
financial condition.

## Our quarterly and annual
operating results may fluctuate and the price of our common stock may change in
response to those fluctuations.

Our quarterly and annual
revenues and operating results have varied in the past and may continue to
fluctuate in the future depending on factors such as:

- general economic conditions in our markets;
- changes in our, and our competitors' pricing;
- rental patterns of our customers;
- increased competition
- the timing of start-up locations and acquisitions and related costs; and
- the effectiveness of efforts to integrate start-up locations and acquired businesses with existing operations.

In addition, equipment
rental businesses often experience a slowdown in demand during the winter months
when adverse weather conditions affect construction activity. Due to these and
other factors, we believe that quarter-to-quarter comparisons of our operating
results may not be meaningful. You should not rely on our results for any one
quarter as an indication of our future performance. In future periods, our
operating results may fall below the expectations of public market analysts or
investors. If this occurs, the price of our common stock is likely to decrease.

## We face intense competition. If we are unable to compete successfully, we will lose market share and our business will suffer.

The equipment rental
industry is highly competitive. Our competitors include large national rental
companies, regional competitors that operate in one or more states, smaller
independent businesses with one or two rental locations, and equipment vendors
and dealers who both sell and rent equipment to customers. Some of our
competitors have greater financial resources, are more geographically diverse,
and have greater name recognition than we do. If existing or future competitors
reduce prices and we must also reduce prices to remain competitive, our
operating results would be adversely affected. In addition, other equipment
rental companies may compete with us for acquisition candidates or start-up
locations, which may increase acquisition prices and reduce the number of
suitable acquisition candidates or expansion locations.

## We depend on
our senior management.

Neff is managed by a small
number of key executive officers. The loss of the services of these key
executives could have a material adverse effect on our business. We do not
maintain any key man life insurance policies on any of our officers. Our success
also depends on our ability to hire and retain qualified management personnel.
We cannot assure you that we will be able to hire and retain the personnel we
need.

## Our operating results
may be adversely affected by declines in construction and industrial activities.

Our equipment is primarily
used in connection with construction and industrial activities. Consequently,
decreases in construction or industrial activity due to a recession or other
reasons may result in lower demand for our equipment or a decrease in the prices
that we can charge. Any such decrease could adversely affect our business,
financial condition or operating results. Due to the current recessionary state
of the U.S. economy and slow down in construction activity, we anticipate that
our rental revenues and pricing will be down on a year-over-year basis until the
economy strengthens.

-13-

## We may incur substantial costs in order to comply with environmental and safety regulations.

We are subject to certain
federal, state and local laws and regulations relating to environmental
protection and occupational health and safety, including those governing:

- wastewater discharges;
- the treatment, storage and disposal of solid and hazardous wastes and materials; and
- the remediation of contamination associated with the release of hazardous substances.

These laws often impose
liability without regard to whether the owner or lessee of real estate knew of,
or was responsible for, the presence of hazardous or toxic substances. Some of
our present and former facilities have used substances and generated or disposed
of wastes which are or may be considered hazardous, and we may incur liability
in connection with these activities. Although we investigate each business or
property that we acquire or lease, these businesses or properties may have
undiscovered potential liabilities relating to non-compliance with environmental
laws and regulations that we will be required to investigate and/or remediate.
Our operations generally do not raise significant environmental risks, but we
use hazardous materials such as solvents to clean and maintain our rental
fleets, and dispose of solid and hazardous waste and wastewater from equipment
washing, and store and dispense petroleum products from above-ground storage
tanks at some of our locations. While we do not currentlyexpect to make
any material capital expenditures for environmental compliance or remediation in
the foreseeable future, we cannot assure you that environmental and safety
requirements will not become more stringent or be interpreted and applied more
stringently in the future, which could cause us to incur additional
environmental compliance or remediation costs. These compliance and remediation
costs could materially adversely affect our financial condition or results of
operations.

## We may be liable for claims that our insurance will not cover.

Our business exposes us to
possible claims for personal injury or death resulting from the use of equipment
that we rented or sold and from injuries caused in motor vehicle accidents in
which our delivery and service personnel are involved. We carry comprehensive
insurance subject to a deductible at a level management believes is sufficient
to cover existing and future claims. We cannot assure you that existing or
future claims will not exceed the level of our insurance or that such insurance
will continue to be available on economically reasonable terms, or at all. In
addition, our insurance may not cover claims for punitive damages or for damages
arising from intentional misconduct.

## The market
price for our common stock may be adversely affected by delisting from the New York Stock
Exchange and may fluctuate widely.

The trading price for our common stock has been and may continue to be highly  volatile.  The New York Stock Exchange (the "NYSE")
     suspended  trading in our Class A common  stock in  November  2001 and, as a result,  the shares of our Class A common  stock have
     traded on the NASD  Over-the-Counter  Bulletin Board (the "OTC") since then. Because the OTC is generally  considered to be a less
     efficient market than the NYSE, our stock price, as well as the liquidity of our Class A common stock,  may be adversely  affected
     by this  delisting  and move.  Trading  on the OTC may also  result in  increased  volatility  in the price for our Class A common
     stock.  In addition,  the decreased  liquidity of our Class A common stock may make it more  difficult for us to raise  additional
     capital, if necessary.
In addition the market price of our common stock could fluctuate  substantially  due to factors,  many of which are beyond our control,
such as:

- actual or anticipated variations in our quarterly results of operations;
- additions or departures of key personnel;
- announcements of acquisitions, new products or new services by us or
         our competitors;
- changes in earnings estimates or recommendations by securities analysts;
- changes in business or regulatory conditions affecting us;
- changes in the market valuations of other equipment rental companies; and
- general market conditions.

-14-

## Our principal
stockholders have substantial control over our affairs

Neff is controlled by
members of the Mas family. Juan Carlos Mas, our Chief Executive Officer, his
brothers Jorge Mas and Jose Ramon Mas, who are also members of our Board of
Directors, and Santos Fund I, L.P. (Santos), a limited partnership
controlled by the Mas family, beneficially own approximately 44.9% of our common
stock. In addition, General Electric Capital Corporation (GE
Capital) owns Class B Special common stock that represents 24.1% of the
outstanding equity of Neff. As the holder of all of the outstanding Class B
Special Common Stock, GE Capital has the right to elect a director to
Neffs Board of Directors. However, an affiliate of GE Capital is one of
the lenders under the Credit Facility and GE Capital has waived its right to
elect a director for as long as any of its affiliates is a lender under the
Credit Facility. Neff, GE Capital, Santos and the Mas family have entered into a
Stockholders Agreement. The agreement provides that if GE Capital
transfers common stock representing 15% or more of the equity of Neff to a third
party, the parties to the agreement will cause Neffs Board of Directors to
increase by one member and will cause the nominee designated by the purchaser of
GE Capitals common stock to be elected as the additional director.

The Mas family has agreed
to act together on all matters submitted to a vote of the stockholders of the Company and therefore
has the ability to exert substantial influence over all such matters. These matters include the election and
removal of directors and any merger, consolidation or sale of all or
substantially all of our assets. In addition, they may dictate the management of
our business and affairs. This concentration of ownership could have the effect
of delaying, deferring or preventing a change in control or impeding a merger or
consolidation, takeover or other business combination which you, as a
stockholder, may otherwise view favorably.

## Future sales of our common stock may adversely affect our common stock price

If our stockholders sell a
large number of shares of common stock or if we issue a large number of shares
in connection with future acquisitions or financings, the market price of our
common stock could decline significantly. In addition, the perception in the
public market that our stockholders might sell a large number of shares of
common stock could cause a decline in the market price of our common stock. An
additional 1.3 million shares of our common stock may be issued upon the
exercise of vested stock options we have previously granted, all of which could
be sold in the public market if issued, subject to compliance with Rule 144 of
the Securities Act in the case of shares held by our affiliates.

-15-

## ITEM 2.
PROPERTIES

We lease approximately
18,000 square feet for our corporate headquarters in an office building in
Miami, Florida. We own the buildings and/or the land at 2 of our locations. All
other sites are leased, generally for terms of five years with renewal options.
Owned and leased sites range from approximately 7,000 to 30,000 square feet on
lots ranging up to 6 acres, and include showrooms, equipment service areas and
storage facilities. These sites are suitable and adequate to meet our current
operating requirements. We do not consider any specific leased location to be
material to our operations. We believe that equally suitable alternative
locations are available in all areas where we currently do business.

## ITEM 3. LEGAL
PROCEEDINGS

On December 17, 1999, we
completed the sale of Neff Machinery, Inc. (Machinery), a
wholly-owned subsidiary of Neff. Neff received $90.5 million and recorded a gain
on the sale of $3.8 million. The Machinery sale agreement provided for a
post-closing purchase price adjustment based on the difference between the net
worth of Machinery as of June 30, 1999 (the date of a pro forma balance sheet
prepared in advance of the execution of the sale agreement) and the closing date
(on the basis of a balance sheet prepared after closing). Following preparation of a
closing date balance sheet, the purchaser told Neff that Neff owed the
purchasers an adjustment payment of $20.3 million. Neff responded by informing
the purchaser that the purchaser owed Neff additional consideration of $8.8
million.

In August 2001, Neff and
the purchaser agreed that all disputes pertaining to the closing balance sheet
and the pro forma balance sheet would be resolved by an arbitrator selected by
the parties (the Arbitrator). In November and December 2001, the
Arbitrator held a hearing at which each side presented testimony. On June 13,
2002, the Arbitrator rendered a decision awarding the purchaser $3.5 million.
The Company recognized a charge during 2002 for $3.9 million for the litigation
settlement, which consists of the $3.5 million award and $0.4 million in related
costs. Neff appealed the Arbitrators decision and on December 31, 2002 a
judgment confirming the award, and providing for interest on the award at the
statutory rate from June 13, 2002, was entered in the Circuit Court of the
11th Judicial Circuit in and for Miami-Dade County, Florida.

On or about June 14, 2001,
the purchaser sent the Company a Notice of Indemnification Claim alleging
indemnifiable damages under the Machinery sale agreement. On or about December
16, 2002, the purchaser filed a Demand for Arbitration with the American
Arbitration Association, seeking $1.2 million under the indemnification provisions
of the sale agreement. The Company and the purchaser are negotiating a settlement
to resolve this indemnification claim.

We are also a party to
other pending legal proceedings arising in the ordinary course of business.
While the results of such proceedings cannot be predicted with certainty, we do
not believe any of these other matters are material to our financial condition
or results of operations.

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

During the fourth quarter
of 2002, no matter was submitted to a vote of the security holders of Neff.

-16-

## PART II

## ITEM 5. MARKET
FOR THE REGISTRANTS COMMON STOCK AND RELATED STOCKHOLDER MATTERS

Price Range of Common Stock

On May 21, 1998, our Class A
common stock began trading on the NYSE under the symbol NFF. In
November 2001, the NYSE suspended trading in our Class A common stock and we
began to trade under the symbol NFFCA on the OTC. The following
table sets forth the high and low sales prices of our Class A common stock as
reported on the NYSE and the OTC market for the periods indicated.

`Year ended December 31, 2002:
                                                       HIGH                LOW
                                                       ----                ---
First Quarter   ...............................    $          0.77      $        0.40
Second Quarter ................................    $          1.23      $        0.40
Third Quarter .................................    $          0.45      $        0.18
Fourth Quarter ................................    $          0.44      $        0.08

Year ended December 31, 2001:
                                                       HIGH                 LOW
                                                       ----                 ---
First Quarter .................................    $          2.66      $        0.40
Second Quarter ................................    $          1.35      $        0.35
Third Quarter .................................    $          1.10      $        0.55
Fourth Quarter ................................    $          0.75      $        0.33`

As of March 3, 2003, we had
97 shareholders of record. We believe the number of beneficial owners of our
Class A common stock is substantially greater than the number of record holders
because a large portion of our Class A common stock is held of record in broker
street names for the benefit of individual investors.

Dividend Policy

We did not pay any cash
dividends on our common stock during the two-year period ended December 31,
2002. We presently intend to retain all earnings for the development of our
business and do not anticipate paying any cash dividends on our common stock in
the foreseeable future. In addition, our Credit Facility precludes us from
purchasing, redeeming or retiring any of our capital stock or from paying
dividends. The payment of dividends is also limited by provisions of the
Indentures governing our senior subordinated notes issued in May and December
1998 and due in 2008.

The declaration and payment
of any future cash dividends will depend on a number of factors including future
earnings, capital requirements, our financial condition and prospects any
restrictions under credit or other agreements existing from time to time, and
any other factors our Board of Directors may deem relevant. We cannot assure you
that we will pay any dividends in the future.

-17-

## ITEM 6.
SELECTED CONSOLIDATED FINANCIAL DATA

The data set forth below
should be read in conjunction with Item 7 - Managements Discussion
and Analysis of Financial Condition and Results of Operations and
Neffs Consolidated Financial Statements and the related Notes included
elsewhere in this Annual Report. Certain amounts in the prior years have been
reclassified to conform with the current year presentation.

`For the Years Ended December 31,
                                               ----------------------------------------------------
                                                 2002       2001       2000       1999       1998
                                               --------   --------   --------   --------   --------
                                                   (Amounts in thousands, except per share data)
Revenues
   Rental revenue ............................$ 165,853  $ 183,360  $ 192,990  $ 222,862  $ 179,014
   Equipment sales ...........................   14,646     33,520     51,179    121,865    108,352
   Parts and service .........................   11,236     14,122     15,923     47,284     36,724
                                               --------   --------   --------   --------   --------
        Total revenues .......................  191,735    231,002    260,092    392,011    324,090
                                               --------   --------   --------   --------   --------
Cost of revenues
   Cost of equipment sold ....................   12,886     29,388     43,660    100,871     83,783
   Depreciation of rental equipment (1) ......   41,157     43,479     44,724     55,159     56,336
   Maintenance of rental equipment ...........   64,590     64,838     64,883     66,763     49,858
   Cost of parts and service .................    7,540      9,569     10,495     30,166     23,690
                                               --------   --------   --------   --------   --------
        Total cost of revenues ...............  126,173    147,274    163,762    252,959    213,667
                                               --------   --------   --------   --------   --------
Gross profit .................................   65,562     83,728     96,330    139,052    110,423
                                               --------   --------   --------   --------   --------
Selling, general and administrative expenses..   54,832     55,497     61,574     74,893     60,347
Other depreciation and amortization  .........    6,697     10,121      9,884     10,731      8,833
Gain on debt extinguishment ..................  (12,296)         -          -          -          -
Write-down of assets held for sale ...........    3,207          -      4,272      1,444          -
Cost incurred in efforts to sell the company .   (1,752)         -      4,282          -          -
Officer stock option compensation (2) ........        -          -          -          -      3,198
Loss on debt restructuring ...................        -      1,449          -          -      2,675
Branch closure and other related costs .......      701      5,702          -          -          -
                                               --------   --------   --------   --------   --------
Income from operations .......................   14,173     10,959     16,318     51,984     35,370
                                               --------   --------   --------   --------   --------
Other expenses ...............................   30,200     32,551     34,763     41,520     35,855
                                               --------   --------   --------   --------   --------
(Loss) income before income taxes, minority
  interest, and cumulative effect
  of change in accounting principle...........  (16,027)   (21,592)   (18,445)    10,464      (485)
Income taxes .................................      370          -          -     (3,877)      134
                                               --------   --------   --------   --------  --------
(Loss) income before minority interest,
  cumulative effect of change
  in accounting principle ....................  (15,657)   (21,592)   (18,445)     6,587      (351)
Minority interest ............................        -          -          -     (1,733)   (1,111)
                                               --------   --------   --------   --------  --------
(Loss) income before cumulative effect of
  change in accounting principle .............  (15,657)   (21,592)   (18,445)     4,854    (1,462)
Cumulative effect of change in
  accounting principle, net ..................  (82,296)         -          -          -         -
                                               --------   --------   --------   --------  --------
Net (loss) income ............................$ (97,953) $ (21,592) $ (18,445)  $  4,854  $ (1,462)
                                               ========   ========   ========   ========   ========
Basic (loss) income per common share:
(Loss) income before cumulative effect of
  change in accounting principle .............$   (0.74) $   (1.02) $   (0.87)  $   0.23  $  (0.38)
Cumulative effect of change in
  accounting principle, net ..................    (3.89)         -          -          -         -
                                               --------   --------   --------   --------  --------
Net (loss) income ............................$   (4.63) $   (1.02) $   (0.87)  $   0.23  $  (0.38)
                                               ========   ========   ========   ========  ========
Diluted (loss) income per common share :
(Loss) income before cumulative effect
  of change in accounting principle ..........$   (0.74) $   (1.02) $   (0.87)   $  0.22  $  (0.38)
Cumulative effective of change in
  accounting principle, net ..................    (3.89)         -         -          -         -
                                               --------   --------   --------   --------  --------
Net (loss) income .............................$  (4.63) $   (1.02) $   (0.87)   $  0.22  $  (0.38)
                                               ========   ========   ========   ========  ========
Weighted average common shares outstanding :
Basic ........................................   21,165     21,165     21,165     21,165    17,213
                                               ========   ========   ========   ========  ========
Diluted ......................................   21,165     21,165     21,165     21,887    17,213
                                               ========   ========   ========   ========  ========`

-18-

## ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA - (continued)

`For the Years Ended December 31,
                                           --------------------------------------------------------
                                              2002        2001       2000        1999        1998
                                           ---------   ---------   ---------   ---------  ---------
Balance Sheet Data (end of period) :        (Amounts in thousands, except percent and location data)

Net book value of rental equipment ....... $ 221,106   $ 258,391   $ 306,265   $ 285,863   $ 321,220
Total assets .............................   281,116     414,457     474,967     471,706     572,369
Total debt ...............................   282,060     317,184     345,939     335,852     406,993
Total stockholders' equity (deficiency)...   (33,782)     64,171      85,763     104,208      99,360
Other Data:
EBITDA(3) ................................ $  51,887    $ 71,710    $ 79,480   $ 119,318   $ 106,412
EBITDA margin(4) .........................      27.1%       31.0%       30.6%       30.4%       32.8%
Rental equipment purchases ............... $  19,965    $ 27,934   $ 109,578   $ 221,671   $ 199,198
Number of locations (end of period) ......        72          74          82          84          86`

1) Depreciation of rental
equipment for 1999 reflects Neffs change in depreciation policy to
recognize extended estimated service lives and increased residual values of our
rental equipment.

2) Officer stock option
compensation expense represents a non-cash charge with respect to the changes in
the difference between the estimated market value of the shares issuable to a
former executive officer under an option agreement, and the exercise price for
the shares.

3) EBITDA represents income
from operations plus depreciation, amortization, and non-cash expenditures,
including gain on debt extinguishment in 2002; branch closure and other related
costs in 2002 and 2001; write-down of assets in 2002, 2000 and 1999; officer
stock option compensation expense in 1998; and costs and reversal of costs
incurred in efforts to sell the Company in 2002 and 2000. EBITDA is not intended
to represent cash flow from operations and should not be considered as an
alternative to operating income or net income (loss) computed in accordance with GAAP, an
indicator of Neffs operating performance, an alternative to cash flows
from operating activities (as determined in accordance with GAAP) or a
measure of liquidity. We believe that EBITDA is a fairly standard measure in our
industry, commonly reported and widely used by analysts and investors as a
measure of profitability for companies with significant depreciation,
amortization and non-cash expenditures. However, not all companies calculate
EBITDA using the same methods; therefore, the EBITDA figures set forth above may
not be comparable to EBITDA reported by other companies.

4)       EBITDA margin represents EBITDA as a percentage of total revenues.

## ITEM 7.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following discussion
and analysis compares the year ended December 31, 2002 to results for the year
ended December 31, 2001 and the year ended December 31, 2001, to the results for
year ended December 31, 2000. This discussion should be read in conjunction with
Neffs Consolidated Financial Statements and the related Notes, appearing
elsewhere in this Annual Report.

-19-

Overview

We derive revenue from (1)
the rental of equipment; (2) sales of new and used equipment and (3) sales of
parts and service. Our primary source of revenue is the rental of equipment to
construction and industrial customers. Growth in rental revenue is dependent
upon several factors, including the demand for rental equipment, the amount of
equipment available for rent, rental rates and the general economic environment.
The level of our new and used equipment sales is primarily a function of the
supply and demand for such equipment, price and general economic conditions. The
age, quality and mix of our rental fleet also affect revenues from the sale of
used equipment. Revenues derived from the sale of parts and service generally
correlates with rental revenues.

As part of our strategy to
improve utilization and return on fleet investments, we plan to maintain our
reduced level of short term capital expenditures on fleet assets during 2003 in order to
apply operating cash flow to pay down debt. The reduction in capital
expenditures has led to a reduction in used equipment sales as we age the fleet
and seek to maximize return on existing fleet investments. We will also continue
to carefully analyze the market potential of each branch and may close
branches that are not generating adequate return on investment or are in a
market that we do not believe has significant future potential.

We own and lease rental
equipment fleet for our operations. As of December 31, 2002 we owned rental
fleet assets with a net book value of $221.1 million. We also lease rental fleet
under operating leases that had an original cost of $53.8 million. Operating
lease expense related to rental fleet under operating leases was $10.2 million
for 2002.

Costs of revenues include
cost of equipment sold, depreciation and maintenance costs of rental equipment
and cost of parts and service. Cost of equipment sold consists of the net book
value of rental equipment at the time of sale and cost for new equipment sales.
Depreciation of rental equipment represents the depreciation costs attributable
to rental equipment. Maintenance of rental equipment represents the costs of
servicing and maintaining rental equipment on an ongoing basis and includes
operating lease payments made on leased fleet. Cost of parts and service
represents costs attributable to the sale of parts directly to customers and
service provided to repair customer owned equipment.

Depreciation of rental
equipment is calculated on a straight-line basis over the estimated service life
of the asset (generally two to eight years with 10-20% residual values). Since
January 1, 1996, we have, from time to time, made certain changes to our
depreciation assumptions to recognize extended estimated service lives and
increased residual values of our rental equipment. We believe that these changes
in estimates will more appropriately reflect our financial results by better
allocating the cost of our rental equipment over the service lives of these
assets. In addition, the new lives and residual values more closely conform to
those prevalent in our industry.

Selling, general and
administrative expenses include sales and marketing expenses, payroll and
related costs, professional fees, property and other taxes and other
administrative overhead. Other depreciation and amortization represents the
depreciation associated with property and equipment (other than rental
equipment) and the amortization of goodwill and intangible assets.

-20-

On March 21, 2001, the
Company adopted a plan to close nine of its branches. Management expected all of
the nine branches to be closed by March 31, 2002. During the first quarter of
2001, the Company recognized a charge of $9.1 million associated with these
branch closings. During the fourth quarter of 2001, management decided not to
close two of the stores it had previously decided to close and to close two
other stores instead. The change in the branch closure plan resulted in a
reduction of expenses associated with the branch closings of $3.4 million which
was recorded in the fourth quarter of 2001. The expense reduction of $3.4
million was the result of reversing $4.7 million associated with the previously
announced closings, of which $3.6 million was goodwill, and new charges of $1.3
million associated with the closure of the two other branches in the fourth
quarter. The change in the branch closure plan caused the Company to recognize a
charge of $5.7 million for the year ended December 31, 2001 that included $1.1
million of goodwill, $3.0 million to write-down equipment held for sale,
employee termination benefits of $0.2 million and other related costs of $1.4
million. The employee termination benefits were paid to 33
administrative, sales and maintenance employees who were terminated in
connection with the branch closings.

During the fourth quarter
of 2002 the Company adopted a plan to close one of its branches and recognized a charge of $0.7 million associated with
this branch closing.

Critical Accounting Policies and Estimates

General

Managements
Discussion and Analysis of Financial Condition and Results of Operations is
based upon our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States of
America. The preparation of these financial statements requires management to
make estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue and expenses, and related disclosure of contingent assets
and liabilities. A summary of our significant accounting policies is contained
in Note 2 to the Notes to our Consolidated Financial Statements included
elsewhere in this Report. Management bases its estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. Senior management has discussed the
development, selection and disclosure of these estimates with the Audit
Committee of Neffs Board of Directors. Actual results may differ from
these estimates under different assumptions or conditions. Management believes
the following critical accounting policies reflect the more significant
estimates and assumptions used in the preparation of its consolidated financial
statements.

Valuation of Long-Lived Assets

We
review property, plant and equipment for impairment whenever events or changes
in circumstances indicate the carrying value of an asset may not be recoverable.
Our asset impairment review assesses the fair value of the assets based on the
future cash flows we believe the assets are expected to generate. An impairment
loss is recognized when these estimated undiscounted future cash flows expected
to result from the use of the asset plus net proceeds expected from disposition
of the asset (if any) are less than the carrying value of the asset. This
approach uses our estimates of future market growth, future revenue and costs,
expected periods the assets will be utilized and appropriate discount rates.
Such evaluations of impairment of long-lived assets are an integral part of, but not
limited to, our strategic reviews of our business and operations. When an
impairment is identified, the carrying amount of the asset is reduced to its
estimated fair value. Deterioration of our business in the future could also
lead to impairment adjustments as such issues are identified.

Revenue Recognition

Rental
agreements are structured as operating leases and the related revenues are
recognized as they are earned over the rental period. Revenues from sales of equipment and
parts are earned at the time of shipment or, if the equipment is out on lease,
at the time a sales contract is finalized. Equipment may be delivered to
customers for a trial period. Revenue on such sales are recognized at the time a
sales contract is finalized. Service revenues are recognized at the time the
services are rendered.

Allowance for Doubtful Accounts

We
evaluate the collectibility of our receivables based on a combination of
factors. We regularly analyze our significant customer accounts. When we
become aware of a specific customers inability to meet its financial
obligations to us, such as in the case of bankruptcy filings or deterioration in
the customers operating results or financial position, we record a
specific reserve for bad debt to reduce the related receivable to the amount we
reasonably believe is collectible. We also record reserves for bad debt for all
other customers based on a variety of factors including the length of time the
receivables are past due, the financial health of the customer, macroeconomic
considerations and historical experience. If circumstances related to specific
customers change, our estimates of the recoverability of receivables could be further adjusted.

-21-

Useful Lives of
Rental Equipment and Property and Equipment.

We depreciate rental
equipment and property and equipment over their estimated useful lives less
salvage value. The useful life of an asset is determined based on our estimate
of the period the asset will generate revenues, and the salvage value is
determined based on our estimate of the minimum value we could realize from the
asset after its useful life has ended. We may be required to change these estimates based on
changes in our industry or other changing circumstances. If these estimates
change in the future, we may be required to recognize increased or decreased
depreciation expense for these assets.

Non-GAAP Financial Measures

We  prepare  and  release
quarterly  unaudited  financial  statements prepared in accordance with GAAP. We
also disclose  EBITDA,  which is our income from  continuing  operations  before
interest, income taxes, depreciation and amortization,  and EBITDA margin, which
represents  EBITDA  as a  percentage  of our  total  revenues.  We  believe  the
disclosure  of EBITDA  and  EBITDA  margin  helps  investors  more  meaningfully
evaluate  and  compare the results of our  ongoing  operations  from  quarter to
quarter and from year to year because these are standard  measures in our industry,
commonly reported and widely used by investors as a measure of profitability for
companies with significant depreciation, amortization and non-cash expenditures.
However,  we urge investors to carefully  review the GAAP financial  information
included as part of our Quarterly Reports on Form 10-Q and our Annual Reports on
Form  10-K  that are  filed  with  the  SEC,  and  compare  the  GAAP  financial
information with the non-GAAP financial measures we disclose.  In addition,  not
all companies  calculate  EBITDA using the same methods;  therefore,  the EBITDA
figures  we  report  may  not  be  comparable   to  EBITDA   reported  by  other
companies.

We believe that income from operations is the most directly comparable GAAP measure to EBITDA. The following table shows EBITDA
reconciled to our GAAP consolidated income from  operations (in thousands of dollars) for the indicated periods:

`For the Years Ended December 31,
                                                --------------------------------------------------------
                                                  2002         2001       2000        1999        1998
                                                ---------   ---------  ---------   ---------   ---------
 EBITDA ........................................ $ 51,887    $ 71,710   $ 79,480   $ 119,318   $ 106,412
     Adjustments:
 Depreciation of rental equipment ..............  (41,157)    (43,479)   (44,724)    (55,159)    (56,336)
 Other depreciation and amortization ...........   (6,697)    (10,121)    (9,884)    (10,731)     (8,833)
 Gain on debt extinguishment ...................   12,296           -          -           -           -
 Write-down of assets held for sale ............   (3,207)          -     (4,272)     (1,444)          -
 Costs incurred in efforts to sell the Company..    1,752           -     (4,282)          -           -
 Loss on debt restructuring ....................        -      (1,449)         -           -      (2,675)
 Branch closure and other related costs ........     (701)     (5,702)         -           -           -
 Officer stock compensation ....................        -           -          -           -      (3,198)
                                                ---------   ---------  ---------   ---------   ---------
 Income from operations ........................ $ 14,173    $ 10,959   $ 16,318   $ 51,984     $ 35,370
                                                =========   =========  =========   =========  ==========`

-22-

Results of Operations

Management believes that
the period-to-period comparisons of Neffs financial results may not
necessarily be meaningful and should not be relied upon as an indication of
future performance. In addition, our results of operations may fluctuate from
period-to-period in the future as a result of the cyclical nature of the
industry in which we operate and we cannot assure you that any trends will
continue in the future.

2002 Compared to 2001 (in thousands, except percent data)

This section compares our
operating results for 2002 with our operating results for 2001.

Total Revenues.
Total revenues for the year ended December 31, 2002 decreased 17.0% to $191,735
from $231,002 for the year ended December 31, 2001. The decrease in total
revenues is primarily due to a decrease of $17,507 or 9.5% in rental revenues
and a $18,874 or 56.3% decrease in sales of rental equipment. The decrease in
rental revenues is primarily due to a decrease in the size of the Companys
rental fleet and in rental rates. For the year ended December 31, 2002 the
Companys average rental fleet valued at original cost decreased by 4.4% to
$432,146 from $452,140 as a result of the sale of fleet from closed
branches and the reduced capital expenditure on the purchase of additional fleet. For the year ended December 31, 2002 it is estimated
that rental rates decreased by 4.2% compared with the year ended December 31,
2001 as a result of the continued competitive environment. Rental revenues at locations open for more than one year decreased 8.7%
for the year ended December 31, 2002 compared with the year ended December 31,
2001.

Gross Profit. Gross
profit for the year ended December 31, 2002 decreased 21.7% to $65,562 or 34.2%
of total revenues from $83,728 or 36.3% of total revenues for the year ended
December 31, 2001. The decrease in gross profit is primarily due to a decrease
in rental revenue profit margins resulting from a decrease in rental rates
during 2002 compared to 2001. The decrease in gross profit was also due to the
reduced profit from the sale of used equipment as equipment sales margin and equipment
sales volume decreased as a result of the Company's focus on minimizing fleet
capital expenditures by reducing used equipment sales volume.

Selling, General and
Administrative Expenses. Selling, general and administrative expenses for
the year ended December 31, 2002 decreased 1.2% to $54,832 or 28.6% of total
revenues from $55,497 or 24.0% of total revenues for the year ended December 31,
2001. The decrease in selling, general and administrative expenses is primarily
attributable to the closure of branches during 2002 and 2001 and our continued
effort to reduce selling, general and administrative expenses in our continuing
operations.

Depreciation of Rental
Equipment. Depreciation of rental equipment for 2002 decreased 5.3% to
$41,157 or 21.5% of total revenues from $43,479 or 18.8% of total revenues in
2001. The decrease in the dollar amount of depreciation is due primarily to
decreased levels of rental fleet due to branch closures.

Other Depreciation and
Amortization. Other depreciation and amortization expense for the year ended
December 31, 2002 decreased 33.8% to $6,697 or 3.5% of total revenues from
$10,121 or 4.4% of total revenues for the year ended December 31, 2001. The
decrease is due to reduced amortization of goodwill as a result of the
write-down of goodwill in the first quarter of 2002.

Interest Expense.
Interest expense for the year ended December 31, 2002 decreased 21.0% to $24,264
from $30,727 for the year ended December 31, 2001. The decrease is primarily
attributable to lower interest rates under Neffs variable rate debt during
2002 and reduced interest payments on our senior subordinated notes due to our
repurchase of notes during the first and second quarters of 2002.

-23-

Write-Down of Assets
Held for Sale. Write-down of assets held for sale of $3,207 represents a
charge to write-down the Companys rental fleet to estimated fair value
during the fourth quarter of 2002.

Cost Incurred in Efforts
to Sell the Company. In 2000 we recorded a charge of $4,282 for expenses
related to consulting and legal fees associated with efforts to sell Neff during
1999 and 2000. During the first quarter of 2002, we negotiated a reduction of
those costs of $1,752.

2001 Compared to 2000 (in thousands, except percent data)

This section compares our
operating results for 2001 with our operating results for 2000.

Total Revenues.
Total revenues for the year ended December 31, 2001 decreased 11.2% to $231,002
from $260,092 for the year ended December 31, 2000. The decrease in total
revenues is primarily due to a decrease of $9,630 or 5.0% in rental revenues and
a $17,659 or 34.5% decrease in sales of rental equipment during the year ended
December 31, 2001 compared with the year ended December 31, 2000. Total revenues
at locations open for more than one year decreased 1.0% for the year ended
December 31, 2001 compared with the year ended December 31, 2000.

Gross Profit. Gross
profit for the year ended December 31, 2001 decreased 13.1% to $83,728 or 36.2%
of total revenues from $96,330 or 37.0% of total revenues for the year ended
December 31, 2000. The decrease in gross profit is partly due to a decrease in
rental revenue profit margins resulting from decreased utilization of the rental
fleet caused by economic conditions and competitive pressures during 2001. The
decrease in gross profits was also due to reduced profits from the sale of used
equipment as equipment sales margins decreased as well as equipment sales
volume.

Selling, General and
Administrative Expenses. Selling, general and administrative expenses for
the year ended December 31, 2001 decreased 9.9% to $55,497 or 24.0% of total
revenues from $61,574 or 23.7% of total revenues for the year ended December 31,
2000. The decrease in selling, general and administrative expenses is primarily
attributable to the closure of branches during 2001 and our continued effort to
reduce selling, general and administrative expenses in our continuing
operations.

Depreciation of Rental
Equipment. Depreciation of rental equipment for 2001 decreased 2.8% to
$43,479 or 18.8% of total revenues from $44,724 or 17.2% of total revenues in
2000. The decrease in the dollar amount of depreciation is due primarily to
decreased levels of rental fleet due to branch closures.

Other Depreciation and
Amortization. Other depreciation and amortization expense for the year ended
December 31, 2001 increased 2.4% to $10,121 or 4.4% of total revenues from
$9,884 or 3.8% of total revenues for the year ended December 31, 2000. The
increase is due to increased amortization of debt issuance costs as a result of
fees paid in connection with various amendments to our former $219 million
credit facility (the  Former Credit Facility).

Interest Expense.
Interest expense for the year ended December 31, 2001 decreased 8.2% to $30,727
from $33,456 for the year ended December 31, 2000. The decrease is primarily
attributable to decreased borrowings under Neffs variable rate debt during
2001.

Write-Down of Assets
Held for Sale. There was no write-down of assets held for sale during 2001,
except for those write-downs included in the branch closure and other related
costs.

-24-

Cost Incurred in Efforts
to Sell the Company. There were no costs incurred in efforts to sell the
Company during 2001. In 2000 we recorded a charge of $4,282 to record expenses
related to consulting and legal fees associated with efforts to sell Neff during
1999 and 2000.

Going Concern

The  Company's  financial
statements have been prepared on a going concern basis,  which  contemplates the
realization of assets and the  satisfaction  of liabilities in the normal course
of business.  The Company has had continuing losses (before the cumulative effect of change in accounting principle in 2002) amounting to
$15.7 million, $21.6 million and $18.4 million for the three years in the period
ended December 31, 2002. These recurring  losses have led to difficulties in meeting certain covenants under the Credit Facility.
These  factors  among  others may  indicate  that the Company  will be unable to
continue  as a going  concern for a  reasonable  period of  time.

The          consolidated
financial   statements   do  not  include  any   adjustments   relating  to  the
recoverability  and  classification of recorded asset amounts or the amounts and
classification  of  liabilities  that might be  necessary  should the Company be
unable to continue as a going  concern.  The Company's  continuation  as a going
concern is dependent upon its ability to generate  sufficient  cash flow to meet
its obligations on a timely basis, to comply with the terms and covenants of its
financing  agreements,  to obtain additional  financing or refinancing as may be
required,  and  ultimately  to  attain  successful  operations.   In connection with the expiration of the Forbearance Agreement on April 15, 2003, the
Company and its senior lenders are discussing amending the Credit Facility to
permanently cure the existing defaults and to reduce the Company's leverage and debt service
payment requirements, including the restructure of the Company's outstanding debt, so that
the Company can meet its obligations.

Liquidity and Capital Resources

During 2002, our operating
activities provided net cash flow of $23.2 million as compared to $30.4 million
for 2001. This decrease is primarily attributable to increased net loss combined
with changes in working capital as a result of our operations.

Net cash used in investing
activities was $5.8 million for 2002 as compared to $4.8 million net cash
provided by investing activities for the same period of the prior year. The
change in cash from investing activities was due primarily to reduced sales of
rental equipment offset partially by reduced purchases of rental equipment in
2002 compared with the prior year.

Net cash used in  financing  activities  was $21.7  million  for 2002 as compared  to $34.1  million for 2001.  The change in cash from
financing  activities is due primarily to the net borrowings of  outstanding  debt of $8.3 million in 2002 compared with net repayments
of $28.9 million in 2001.  During 2002,  the Company paid $30.0 million to repurchase its senior  subordinated  notes with an aggregate
principal  amount of $43.7  million or 21.9% of the aggregate  principal  amounts of senior  subordinated  notes issued by the Company.
The senior  subordinated notes traded at a discount to face value;  therefore the Company  recognized a gain on debt  extinguishment of
$12.3 million, or $0.58 per diluted share for the year ended December 31, 2002.

During the fourth quarter
of 2001, the Company entered into our new $200 million Credit Facility with a
group of lenders led by Fleet Capital. The Company used proceeds from the Credit
Facility to repay the Former Credit Facility. The Companys
maximum availability under the Credit Facility is based upon eligible accounts
receivable, rental fleet and inventory amounts. The interest rates on balances
outstanding under the Credit Facility vary based upon the leverage ratio
maintained by the Company. The Credit Facility expires in December 2005. The
Company is charged a commitment fee on the aggregated daily unused balance of
the Credit Facility which varies between 0.50% and 0.63%.

The Credit Facility is
secured by substantially all of the Companys assets and contains certain
restrictive covenants which, among other things, require the Company to maintain
certain financial coverage ratios and restrict the payment of dividends by the
Company. During 2001 the Company recorded an extraordinary loss of approximately
$1.5 million, net of related income taxes, from the write-off of debt issuance
costs associated with the repayment of the Former Credit Facility.

The Company was not in
compliance with the leverage ratio covenant required by the Credit Facility on September 30, 2002, and
December 31, 2002. On December 20, 2002 the Company entered into
a forbearance agreement and second amendment (the Forbearance
Agreement) to its Credit Facility with its lenders. Under the Forbearance
Agreement, the Companys lenders agreed not to exercise any default remedy
available to them, or charge the default rate of interest, as a result of the
Companys failure to comply with the leverage ratio covenant under the
Credit Facility, for the Forbearance Period. The lenders agreement to forbear is
conditioned upon the Companys compliance with certain conditions,
including financial covenants relating to the Companys consolidated EBITDA
during the Forbearance Period. The Company is currently discussing amendments to
the Credit Facility with its senior lenders to permanently cure the default and
amend the financial covenants under the Credit Facility to be more closely
aligned with the Companys projected results of operations. Although we expect that we will be able to permanently
waive the defaults and amend the Credit Facility, we can not assure you that we will be able to do so. If the Company
is unable to permanently cure the default or to comply with the financial
covenants under the Credit Facility after the Forbearance Period ends, then the
lenders could declare all amounts borrowed under the Credit Facility, together
with accrued interest and other fees, to be due and payable. If the debt outstanding under our Credit Facility
is accelerated, this would constitute a default under the Indentures and the trustee or the noteholders could declare
the principal amount of the notes, together with accrued interest and other fees, to be due and payable. We can not assure you that we
would be able to repay all amounts due under the Credit Facility or the Indentures, if these
amounts are declared due and payable.

-25-

We expect our operations
will continue to produce free cash flow during 2003 and we intend to use all
free cash flow to repay outstanding debt on the Credit Facility during 2003. The
Companys debt service payments, in particular the interest payments on our
senior subordinated notes, place heavy demands on the Companys cash flow.
These demands significantly restrict the Companys liquidity by limiting
the cash available for other purposes, including repayment of debt under the
Credit Facility and capital expenditures to expand the rental fleet and replace
rental equipment that has been sold or become obsolete. Management believes the
Companys financial condition and ability to operate profitably will be
improved if the Company reduces its debt and makes new capital expenditures. If we are not able to amend our
Credit Facility as described above and restructure our outstanding senior
subordinated debt, we may not be able to continue as a going concern. See
Risk Factors - We may not be able to continue operating as a going
concern.

Inflation and General Economic Conditions

Although we cannot
accurately anticipate the effect of inflation on our operations, we do not
believe that inflation has had, or is likely in the foreseeable future to have,
a material impact on our operating results. Neffs operating results may be
adversely affected by events or conditions in a particular region, such as
regional economic, weather and other factors.

In addition, our operating
results may be adversely affected by increases in interest rates that may lead
to a decline in economic activity, while simultaneously resulting in higher
interest payments for us under our variable rate credit facilities.

Although much of our
business is with customers in industries that are cyclical in nature, management
believes that certain characteristics of the equipment rental industry and our
operating strategies should help to mitigate the effects of an economic downturn
on our operations. These factors include (1) the flexibility and low cost
offered to customers by renting equipment, which may be a more attractive
alternative to capital purchases; (2) our ability to redeploy equipment during
regional recessions to other locations; and (3) the diversity of our industry and customer base.

Market Risk

Our financial instruments
consist of cash, accounts receivable and fixed rate debt and variable rate debt.
Cash and accounts receivable are short term, non-interest bearing instruments
and are not subject to market risk.

We are exposed to market
risks related to changes in interest rates. Interest rate changes affect the
fair market value of fixed rate debt instruments but do not impact earnings or
cash flows. Conversely, for variable rate debt instruments, interest rate
changes generally do not affect the fair market value but do impact future
earnings and cash flows.

At December 31, 2002, we
had fixed rate debt of $155.5 million and variable rate debt of $126.6 million.
Holding debt levels constant, a one percentage point increase in interest rates
would decrease the fair market value of our fixed rate debt by approximately
$0.9 million and increase interest expense for our variable rate debt by
approximately $1.3 million.

New Accounting Pronouncements

In July 2001, the Financial
Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standards (SFAS) No. 141, Business
Combinations (SFAS 141). SFAS 141 requires, among other things, that the purchase
method of accounting be used for all business combinations
and applies to all business combinations initiated after June 30, 2001 and all
business combinations accounted for using the purchase method for which the
acquisition date is July 1, 2001 or later. The Company did not enter into any
business combinations during 2002 and 2001.

The Company adopted SFAS
No.142 Goodwill and Other Intangible Assets (SFAS 142)
effective January 1, 2002. SFAS 142 prohibits the amortization of goodwill and
intangible assets with indefinite useful lives. As part of the adoption of SFAS
142, the Company changed its accounting for goodwill and other indefinite-lived
intangible assets from an amortization methodology to an impairment-only
methodology. SFAS 142 provides for a six month transitional period from the
effective date of adoption to June 30, 2002, for the Company to perform an
initial assessment of whether there was an indication that the carrying value of
its goodwill was impaired. The Company completed the initial assessment by
comparing its fair value, as determined in accordance with FASB 142, to its
carrying value and concluded that its goodwill was fully impaired as of January 1,
2002. The determination of the Company's fair value was based on the Company's market
capitalization at January 1, 2002.

The Company, in performing
the second step of the impairment testing, recorded a charge of $82.3 million,
which has been recorded as a cumulative effect of change in accounting principle
in the accompanying consolidated statements of operations for the year ended
December 31, 2002.

In August 2001, the FASB
issued SFAS No. 143, Accounting for Asset Retirement Obligations
(SFAS 143). SFAS 143 addresses financial accounting and reporting
for obligations associated with the retirement of tangible long-lived assets and
the associated asset retirement costs. It applies to legal obligations
associated with the retirement of long-lived assets that result from the
acquisition, construction, development, and (or) the normal operation of a
long-lived asset, except for certain obligations of lessees. The provisions of
SFAS 143 will be effective for fiscal years beginning after June 15, 2002;
however early application is permitted. The Company is currently evaluating the
implications of adoption of SFAS 143 on its financial position or results of
operations.

-26-

In October 2001, the FASB
issued SFAS No. 144 Accounting for the Impairment or Disposal of
Long-Lived Assets (SFAS 144). This statement addresses
financial accounting and reporting for the impairment or disposal of long-lived
assets. This statement supersedes FASB Statement No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of, and the accounting and reporting provisions of Accounting Principles
Board Opinion No. 30, Reporting the Results of Operations  Reporting
the Effects of Disposal of a Segment of a Business, and the Extraordinary,
Unusual and Infrequently Occurring Events and Transactions, for the
disposal of a segment of a business. The provisions of SFAS 144 will be
effective for fiscal years beginning after December 15, 2001. The adoption of
SFAS 144 on January 1, 2002 by the Company did not have a material impact on its
financial position or results of operations.

In April 2002, the FASB issued SFAS No. 145,  "Reporting  Gains and Losses from  Extinguishment  of Debt" ("SFAS 145"),  which
rescinded SFAS No. 4, No. 44, and No. 64 and amended SFAS No. 13. The new standard  addresses the income  statement  classification  of
gains or losses from the extinguishment of debt and criteria for  classification as extraordinary  items. We adopted SFAS 145 effective
as of January 1, 2002 and as such, the gain
recognized on the repurchase of the Companys senior subordinated notes
have been recorded as part of earnings from continuing operations and is
included in other operating expenses in the accompanying consolidated statements
of operations as opposed to an extraordinary item. See Note 5, Notes Payable and Debt for further discussion.

In June 2002, the FASB
issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal
Activities (SFAS 146). This statement requires companies to
recognize costs associated with exit or disposal activities when they are
incurred rather than at the date of a commitment to an exit or disposal plan.
SFAS No. 146 nullifies Emerging Issues Task Force Issue No 94-3, Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring), and will
be applied prospectively to exit or disposal activities initiated after December
31, 2002. We adopted SFAS 146 on January 1, 2003. The impact of such
adoption is not anticipated to have a material effect on our financial position
or results of operations.

In November 2002, the FASB
issued Financial Interpretation (FIN) No. 45, Guarantors Accounting
and Disclosure Requirements for Guarantees of Indebtedness of Others
(FIN 45).FIN 45 clarifies and expands existing disclosure
requirements for guarantees, including product warranties. FIN 45 also requires
recognition of a liability at fair value of a companys obligations under
certain guarantee contracts. The disclosure requirements are effective for
financial statements of interim or annual periods ending after December 15,
2002. The initial recognition and measurement provisions of FIN 45 are applied
only on a prospective basis to guarantees issued after December 31, 2002,
irrespective of the guarantors fiscal year-end. Management does not
believe that the implementation of FIN 45 will have a material impact on the
Companys financial condition, results of operations or cash flows.

In December 2002, the FASB
issued SFAS No. 148, Accounting for Stock-Based Compensation-Transition
and Disclosure-an amendment of Statement of Financial Accounting Standard No.
123 (SFAS 148). This statement provides alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. This statement also amends the disclosure
requirements of SFAS No. 123 and Accounting Principles Board Opinion No. 28,
Interim Financial Reporting, to require prominent disclosure in
both annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. Updated disclosures are included in Note 2, Summary of Significant
Accounting Policies, in the accompanying financial statements. We have not yet
determined whether we will voluntarily change to the fair value based method of
accounting for stock-based employee compensation.

## ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information in response to
this item is set forth under the caption Market Risk in Part II,
Item 7 of this Annual Report.

-27-

## ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

## Index to
Financial Statements and Schedules

`Page
                                                                         Numbers
                                                                         -------

Independent Auditors' Report.............................................  29

Consolidated Balance Sheets as of December 31, 2002 and 2001.............  30

Consolidated Statements of Operations for the years ended
December 31, 2002, 2001 and 2000.........................................  31

Consolidated Statements of Stockholders'  Equity (Deficiency) for
the years ended December 31, 2002, 2001 and 2000.......................... 32

Consolidated Statements of Cash Flows for the years ended
December 31, 2002, 2001 and 2000 ......................................... 33

Notes to Consolidated Financial Statements ............................... 34

SCHEDULES:
----------

Independent Auditors' Report.............................................. 50

Schedule II-Valuation and Qualifying Accounts and Reserves................ 51

All other  schedules are omitted  because they are not applicable or the required
information is shown in the  consolidated  financial statements or notes thereto.`

-28-

## INDEPENDENT
AUDITORS REPORT

To the Board of Directors and Stockholders of
Neff Corp.

We have audited the
accompanying consolidated balance sheets of Neff Corp. and subsidiary (the
Company), as of December 31, 2002 and 2001, and the related
consolidated statements of operations, stockholders equity (deficiency)
and cash flows for each of the three years in the period ended December 31,
2002. These financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in
accordance with auditing standards generally accepted in the United States of
America. 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, such
consolidated financial statements present fairly, in all material respects, the
financial position of Neff Corp. and subsidiary at December 31, 2002 and 2001
and the results of their operations and their cash flows for each of the three
years in the period ended December 31, 2002, in conformity with accounting
principles generally accepted in the United States of America.

The accompanying
consolidated financial statements have been prepared assuming the Company will
continue as a going concern. As discussed in Note 1 to the consolidated financial statements,
at December 31, 2002, the Company was not in compliance with certain covenants
of its revolving credit facility. The Companys lenders have waived the
default through April 15, 2003. The Companys difficulties in meeting its
revolving credit facility covenants and its recurring losses from operations
discussed in Note 1 raise substantial doubt about its ability to continue as a
going concern. Managements plans in regard to these matters are also
described in Note 1. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

As discussed in Note 2 to
the consolidated financial statements, in 2002 the Company changed its method of
accounting for goodwill and other intangible assets to conform to
Statement of Financial Accounting Standards No. 142.

/s/ Deloitte & Touche LLP
Certified Public Accountants

Miami, Florida
March 11, 2003

-29-

## NEFF CORP. AND SUBSIDIARY
        CONSOLIDATED BALANCE SHEETS
   (in thousands, except per share data)

`December 31,   December 31,
                                                                            2002           2001
                                                                       ------------   ------------
       ASSETS
Cash and cash equivalents ..............................................$      32      $    4,305
Accounts receivable, net of allowance for doubtful accounts of
     $2,785 in 2002 and $2,947 in 2001 .................................   29,980          31,458
Inventories ............................................................    2,000           2,415
Rental equipment, net ..................................................  221,106         258,391
Property and equipment, net ............................................   17,221          21,790
Goodwill, net ..........................................................        -          82,296
Prepaid expenses and other assets  .....................................   10,777          13,802
                                                                        ---------       ---------
           Total assets ................................................$ 281,116       $ 414,457
                                                                        =========       =========
       LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Liabilities
      Accounts payable .................................................$   7,568       $  10,067
      Accrued expenses .................................................   25,270          22,997
      Credit facility ..................................................  126,560         118,217
      Senior subordinated notes ........................................  155,500         198,967
      Capitalized lease obligations ....................................        -              38
                                                                        ---------       ---------
           Total liabilities ...........................................  314,898         350,286
                                                                        ---------       ---------
Commitments and contingencies (note 11)

Stockholders' equity (deficiency)
      Class A Common Stock; $.01 par value; 100,000 shares authorized;
        16,065 shares issued and outstanding in 2002 and 2001  .........      161             161
      Class B Special Common Stock; $.01 par value, liquidation
        preference $11.67; 20,000 shares authorized; 5,100 shares
        issued and outstanding in 2002 and 2001 ........................       51              51
      Additional paid-in capital .......................................  127,759         127,759
      Accumulated deficit .............................................. (161,753)        (63,800)
                                                                        ---------       ---------
           Total stockholders' equity (deficiency) .....................  (33,782)         64,171
                                                                        ---------       ---------
           Total liabilities and stockholders' equity (deficiency)......$ 281,116       $ 414,457
                                                                        =========       =========

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

-30-

## NEFF CORP. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share data)

`For the Years Ended December 31,
                                                                       2002         2001         2000
Revenues                                                             --------     --------     --------
      Rental revenue ...............................................$ 165,853    $ 183,360    $ 192,990
      Equipment sales ..............................................   14,646       33,520       51,179
      Parts and service ............................................   11,236       14,122       15,923
                                                                     --------     --------     --------
           Total revenues ..........................................  191,735      231,002      260,092
                                                                     --------     --------     --------
Cost of revenues
      Cost of equipment sold .......................................   12,886       29,388       43,660
      Depreciation of rental equipment .............................   41,157       43,479       44,724
      Maintenance of rental equipment ..............................   64,590       64,838       64,883
      Cost of parts and service ....................................    7,540        9,569       10,495
                                                                     --------     --------     --------
           Total cost of revenues ..................................  126,173      147,274      163,762
                                                                     --------     --------     --------
Gross profit .......................................................   65,562       83,728       96,330
                                                                     --------     --------     --------
Other operating expenses
      Selling, general and administrative expenses .................   54,832       55,497       61,574
      Other depreciation and amortization ..........................    6,697       10,121        9,884
      Gain on debt extinguishment ..................................  (12,296)           -            -
      Write-down of assets held for sale ...........................    3,207            -        4,272
      Costs incurred in efforts to sell the company ................   (1,752)           -        4,282
      Loss on debt restructuring ..................................        -         1,449            -
      Branch closure and other related costs .......................      701        5,702            -
                                                                     --------     --------     --------
           Total other operating expenses ..........................   51,389       72,769       80,012
                                                                     --------     --------     --------
Income from operations  ............................................   14,173       10,959       16,318
                                                                     --------     --------     --------
Other expenses
      Interest expense  ............................................   24,264       30,727       33,456
      Litigation settlement ........................................    3,944            -            -
      Amortization of debt issue costs .............................    1,992        1,824        1,307
                                                                     --------     --------     --------
           Total other expenses  ...................................   30,200       32,551       34,763
                                                                     --------     --------     --------
Loss before income taxes and cumulative effect of change in
      accounting principle .........................................  (16,027)     (21,592)     (18,445)
Income taxes .......................................................      370            -            -
                                                                     --------     --------     --------
Loss before cumulative effect of change in accounting principle ....  (15,657)     (21,592)     (18,445)
Cumulative effect of change in accounting principle, net ...........  (82,296)           -            -
                                                                     --------     --------     --------
Net loss ...........................................................$ (97,953)   $ (21,592)   $ (18,445)
                                                                     ========     ========     ========
Basic and diluted loss per common share:
        Loss before cumulative effect of change
           in accounting principle .................................$   (0.74)   $   (1.02)   $   (0.87)
        Cumulative effect of change in accounting principle, net ...    (3.89)           -            -
                                                                     --------     --------     --------
        Net loss ...................................................$   (4.63)   $   (1.02)   $   (0.87)
                                                                     ========     ========     ========
Basic and diluted weighted average common shares outstanding .......   21,165       21,165       21,165
                                                                     ========     ========     ========
The accompanying notes are an integral part of these consolidated financial statements.`

-31-

## NEFF CORP. AND SUBSIDIARY
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
              For the Years Ended December 31, 2002, 2001, and 2000
                                 (in thousands)

`Common Stock A    Common Stock B   Additional
                                 ----------------- -----------------   Paid-in   Accumulated
                                  Shares   Amount   Shares   Amount    Capital     Deficit      Total
                                 -------- -------- -------- --------   --------   --------    --------
Balance, December 31, 1999 ......  16,065    $ 161    5,100   $   51  $ 127,759  $ (23,763)  $ 104,208
Net loss ........................       -        -        -        -          -    (18,445)    (18,445)
                                 -------- -------- -------- --------   --------   --------    --------
Balance, December 31, 2000 ......  16,065      161    5,100       51    127,759    (42,208)     85,763
Net loss ........................       -        -        -        -          -    (21,592)    (21,592)
                                 -------- -------- -------- --------   --------   --------    --------
Balance, December 31, 2001.......  16,065      161    5,100       51    127,759    (63,800)     64,171
Net loss ........................       -        -        -        -          -    (97,953)    (97,953)
                                 -------- -------- -------- --------   --------   --------    --------
Balance, December 31, 2002 ......  16,065    $ 161    5,100   $   51  $ 127,759  $(161,753)  $ (33,782)
                                 ======== ======== ======== ========   ========   ========    ========
The accompanying notes are an integral part of these consolidated financial statements.`

-32-

## NEFF CORP. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

`For the Years Ended December 31,
                                                                    ----------------------------------
                                                                       2002       2001        2000
                                                                    ---------   ---------   ---------
Cash Flows from Operating Activities
Net loss  ..........................................................$ (97,953)  $ (21,592)  $ (18,445)
Adjustments to reconcile net loss to net cash provided by
  operating activities, net of acquisitions
       Depreciation and amortization ...............................   49,846      55,424      55,915
       Gain on sale of equipment ...................................   (1,760)     (4,132)     (7,519)
       (Gain) loss on debt extinguishment ..........................  (12,296)          -           -
       Deferred income tax benefit .................................        -           -        (643)
       Litigation settlement .......................................    3,944           -           -
       Write-down of assets held for sale ..........................    3,207           -       4,272
       Provision for bad debts......................................    2,450       1,643       2,795
       Loss on debt restructuring...................................        -       1,449           -
       Branch closure and other related costs, non-cash portion ....      681       4,390           -
       Recovery of costs incurred to sell the Company ..............   (1,752)          -           -
       Cumulative effect of change in accounting principle .........   82,296           -           -
       Change in operating assets and liabilities (net of acquisitions
                 and sales)
          Accounts receivable ......................................     (977)      9,240      (3,896)
          Other assets  ............................................     (184)     (6,398)     (1,196)
          Accounts payable and accrued expenses ....................   (4,270)     (9,596)     12,696
                                                                    ---------   ---------   ---------
                 Net cash provided by operating activities .........   23,232      30,428      43,979
                                                                    ---------   ---------   ---------
Cash Flows from Investing Activities
Purchases of rental equipment ......................................  (19,965)    (27,934)   (109,578)
Proceeds from sale of rental equipment .............................   14,646      33,520      51,179
Purchases of property and equipment ................................     (495)       (743)     (8,005)
Collection of receivable from sale of subsidiary ...................        -           -      12,500
                                                                    ---------   ---------   ---------
             Net cash (used in) provided by investing activities....   (5,814)      4,843     (53,904)
                                                                    ---------   ---------   ---------
Cash Flows from Financing Activities
Debt issue costs ...................................................        -      (4,746)          -
Net borrowings (repayments) under credit facility ..................    8,343     (28,904)      9,939
Repayments under capitalized lease obligations .....................      (38)       (418)       (286)
Repurchase of senior subordinated notes  ...........................  (29,996)          -           -
                                                                    ---------   ---------   ---------
             Net cash (used in) provided by financing activities ...  (21,691)    (34,068)      9,653
                                                                    ---------   ---------   ---------
Net (decrease) increase in cash and cash equivalents ...............   (4,273)      1,203        (272)
Cash and cash equivalents, beginning of year .......................    4,305       3,102       3,374
                                                                    ---------   ---------   ---------
Cash and cash equivalents, end of year .............................  $    32   $   4,305   $   3,102
                                                                    =========   =========   =========
The accompanying notes are an integral part of these consolidated financial statements.`

-33-

# NEFF CORP.
AND SUBSIDIARY

NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

## NOTE 1-GENERAL

Description of Business

Neff Corp. and its
wholly-owned subsidiary (Neff or the Company) owns and
operates equipment rental locations throughout the southern and western regions
of the United States. The Company also sells used equipment, parts and
merchandise and provides ongoing repair and maintenance services.

Basis of Presentation

The accompanying
consolidated financial statements include the accounts of the Company. All material intercompany
transactions and balances have been eliminated in consolidation.

Costs Incurred in Efforts to Sell the Company

The Company expensed $4.3
million of costs during the year ended December 31, 2000 related primarily to
consulting and legal fees associated with the efforts to sell the Company during
1999 and 2000. During the first quarter of 2002, the Company negotiated a
reduction of those costs of $1.8 million.

Sale of Subsidiary

On November 18, 1999, the
Company completed the sale of its equity interest in Sullair Argentina Sociedad
Anonima. The Company received $42.5 million in consideration, of which $12.5
million was received in February 2000.

Branch Closure and Other Related Costs

On March 21, 2001, the
Company adopted a plan to close nine of its branches. Management expected all
nine branches to be closed by March 31, 2002. During the first quarter of 2001,
the Company recognized a charge of $9.1 million associated with these branch
closings. During the fourth quarter of 2001, management decided not to close two
of the stores it had previously decided to close and to close two other stores
instead. The change in the branch closure plan resulted in a reduction of
expenses associated with branch closings of $3.4 million which was recorded in
the fourth quarter of 2001. The expense reduction of $3.4 million was the result
of reversing $4.7 million associated with the previously announced closings, of
which $3.6 million was goodwill, and new charges of $1.3 million associated with
the closure of the two otherbranches in the fourth quarter. The change
in the branch closure plan caused the Company to recognize a charge of $5.7
million for the year ended December 31, 2001 that included $1.1 million of
goodwill, $3.0 million to write-down equipment held for sale, employee
termination benefits of $0.2 million and other related costs of $1.4 million.
The employee termination benefits were paid to33 administrative, sales
and maintenance employees who were terminated in connection with the branch
closings.

-34-

# NEFF CORP.
AND SUBSIDIARYNOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

During the fourth quarter
of 2002, the Company adopted a plan to close one of its branches and recognized
a charge $0.7 million associated with this branch closing. The $0.7 million
charge was composed of $0.1 million in termination benefits and $0.6 million in
other related costs.

Liquidity

As disclosed in Note 5,
during December of 2001 the Company entered into a new $200 million revolving
credit facility (the Credit Facility). The proceeds of the Credit Facility were used to
repay the Company's $219.5 million revolving credit facility (the Former Credit
Facility). The Companys maximum availability under the Credit
Facility is based upon eligible accounts receivable, rental fleet and inventory
amounts.

The Credit Facility is
secured by substantially all of the Companys assets and contains certain
restrictive covenants which, among other things, require the Company to maintain
certain financial coverage ratios and restrict the payment of dividends by the
Company.

The  Company  was  not in
compliance  with the leverage  ratio  covenant  under the Credit  Facility as of
September  30, 2002 and  December  31,  2002.  On December  20, 2002 the Company
entered into a forbearance  agreement  and second  amendment  (the  "Forbearance
Agreement")  to the  Credit  Facility.  Under  the  Forbearance  Agreement,  the
Company's  lenders agreed not to exercise any default remedy  available to them,
or charge the default rate of interest,  as a result of the Company's failure to
comply with the leverage  ratio  covenant for the period from  December 20, 2002
through April 15, 2003 (the  "Forbearance  Period").  The lenders'  agreement to
forbear is conditioned  upon the Company's  compliance with certain  conditions,
including  financial  covenants  relating to the Company's  consolidated  income from operations before depreciation, amortization and non-cash
expenditures ("EBITDA")
during the Forbearance Period. The Company is currently discussing amendments to
the Credit Facility with its senior lenders to permanently  cure the default and
amend the  financial  covenants  under the Credit  Facility  to be more  closely
aligned with the Company's  projected  results of operations.  If the Company is
unable  to  permanently  cure the  default,  or to  comply  with  the  financial
covenants  under the Credit  Facility,  after the  Forbearance  Period ends, the
lenders could declare all amounts borrowed under the Credit  Facility,  together
with accrued interest and other fees, to be due and payable. Although management
expects  that the Company  will be able to  permanently  waive the  defaults and
amend the Credit  Facility,  there can be no assurance  that the Company will be
able to do so.  Management  expects the  Company's  operations  will continue to
produce  free cash flow  during  2003 and  intends  to use all free cash flow to
repay outstanding debt on the Credit Facility during 2003.

Going Concern

The accompanying financial
statements have been prepared on a going concern basis, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business. The Company has had continuing net losses (before the cumulative effect of change in accounting principle
in 2002), amounting to
$15.7 million, $21.6 million and $18.4 million for the three years in the period
ended December 31, 2002. These recurring losses
have led to difficulties in meeting certain covenants under the Credit Facility
described above and in Note 5, Notes Payable and Debt. These factors among
others may indicate that the Company will be unable to continue as a going
concern for a reasonable period of time.

-35-

# NEFF CORP.
AND SUBSIDIARY

NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial
statements do not include any adjustments relating to the recoverability and
classification of recorded asset amounts or the amounts and classification of
liabilities that might be necessary should the Company be unable to continue as
a going concern. The Companys continuation as a going concern is dependent
upon its ability to generate sufficient cash flow to meet its obligations on a
timely basis, to comply with the terms and covenants of its financing
agreements, to obtain additional financing or refinancing as may be required,
and ultimately to attain successful operations. In connection with the expiration of the Forbearance Agreement on April 15, 2003, the
Company and its senior lenders are discussing amending the credit facility to
permanently cure the existing defaults and to reduce the Company's leverage and debt service
payment requirements, including the restructure of the Company's outstanding debt so that the Company can meet its obligations.

## NOTE 2-SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of
financial statements in conformity with accounting principles generally accepted in the United
States of America ("U.S. GAAP") requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

Recognition of Revenue

Rental agreements are
structured as operating leases and the related revenues are recognized as they
are earned over the rental period. Sales of equipment and parts are recognized
at the time of shipment or, if the equipment is out on lease, at the time a
sales contract is finalized. Equipment may be delivered to customers for a trial
period. Revenue on such sales is recognized at the time a sales contract is
finalized. Service revenues are recognized at the time the services are
rendered.

Cash Equivalents

The Company considers all
highly liquid investments purchased with an original maturity of three months or
less to be cash equivalents.

Inventories

Inventories, which consist
principally of parts and new equipment held for sale, are stated at the lower of
cost or market, with cost determined on the first-in, first-out basis for parts
and specific identification basis for equipment. Substantially all inventory
represents finished goods held for sale.

Rental Equipment

Rental equipment is stated
at original cost less accumulated depreciation. Depreciation is recorded using
the straight-line method over the estimated useful life of the related equipment
(generally two to eight years with estimated 10-20% residual values). Routine
repairs and maintenance are expensed as incurred; improvements are capitalized
at cost.

The Company routinely
reviews the assumptions utilized in computing rates of depreciation of its
rental equipment. Changes to the assumptions (such as the length of service
lives and/or the amount of residual values) are made when, in the opinion of management, such changes
are necessary to more appropriately allocate asset costs to operations over the
service life of the assets. Management utilizes, among other factors, historical
experience and industry comparisons in determining the propriety of any such
changes.

-36-

# NEFF CORP.
AND SUBSIDIARY
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

Accumulated depreciation at
December 31, 2002 and 2001 for the Companys rental fleet was approximately
$146.9 million and $118.0 million, respectively.

Property and Equipment

Property and equipment is
stated at cost less accumulated depreciation. Depreciation is recorded using the
straight-line method over the estimated useful lives of the related assets.
Significant improvements are capitalized at cost. Repairs and maintenance are
expensed as incurred.

The capitalized cost of
equipment and vehicles under capital leases is amortized over the shorter of the
lease term or the assets estimated useful life, and is included in other
depreciation and amortization expense in the consolidated statements of
operations.

Prepaid Expenses and Other Assets

Prepaid expenses and other
assets primarily include debt issue costs, prepaid expenses and deposits. Debt
issue costs are amortized over the term of the debt on a straight-line basis,
which approximates the interest method. Accumulated amortization at December 31,
2002 and 2001 for debt issue costs was $4.2 million and $2.5 million,
respectively.

Insurance

The Company is insured
against general liability claims, workers compensation claims, and group
medical claims up to specified limits per claim and in the aggregate, subject to
various deductible amounts. 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.

Stock-based Compensation

Neff accounts for stock
based compensation to employees using the intrinsic value method as prescribed
by Accounting Principles Board Opinion No. 25 Accounting for Stock Issued
to Employees, and related interpretations. Accordingly, compensation cost
for stock options issued to employees is measured as the excess, if any, of the
quoted market price of Neffsstock at the date of grant over the
amount an employee must pay for the stock. Compensation cost related to
restricted stock or deferred stock units granted is recognized in the period the
compensation is earned and measured using the quoted market price on the
effective grant date.

No stock-based employee
compensation cost is reflected in the accompanying consolidated statements of operations, as all options granted under these
plans had exercise prices equal to the market value of the underlying common
stock on the date of grant. The following table illustrates the effect on net
loss and loss per share if Neff had applied the fair value recognition
provisions of Statement of Financial Accounting Standards ("SFAS") No. 123, Accounting for Stock-Based Compensation,
to stock-based employee compensation (in thousands, except per share data):

`For the Years Ended
                                                                 December 31,
                                                       ----------------------------------
                                                          2002        2001        2000
                                                       ---------   ---------    ---------
Net loss, as reported .................................$ (97,953)  $ (21,592)   $ (18,445)
Deduct: Total stock-based employee compensation
  expense determined under fair value based method
  for all awards, net of related tax effects ..........     (111)       (249)        (102)
                                                       ---------   ---------    ---------
Pro forma net loss ....................................$ (98,064)  $ (21,841)   $ (18,547)
                                                       =========   =========    =========
Loss per share:
Basic and diluted - as reported .......................$   (4.63)  $   (1.02)   $   (0.87)
                                                       =========   =========    =========
Basic and diluted - pro forma .........................$   (4.63)  $   (1.03)   $   (0.88)
                                                       =========   =========    =========`

-37-

# NEFF CORP.
AND SUBSIDIARY
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

The fair value of options
at each grant date was estimated using the Black-Scholes multiple option model where
each vesting increment is treated as a separate option with its own fair value.
The following weighted average assumptions were used:

``                          For the Years Ended
                                                       December 31,
                                            --------------------------------
                                              2002        2001        2000
                                            --------    --------    --------
Expected life (in years)                          -          8           -
Interest rate  .............................      -        2.5%          -
Volatility  ................................      -      183.0%          -
Expected dividends .........................      -          -           -
Weighted average per share fair value ......      -     $ 0.57           -`

Impairment of Long-lived Assets and Intangibles

The Company reviews
long-lived assets and intangibles for impairment whenever events or changes in
circumstances indicate that the carrying value of an asset may not be
recoverable. Based upon a comprehensive review of the Companys long-lived
assets, the Company recorded a non-cash charge of $3.2 million in the fourth
quarter of 2002 related to a write-down of assets that were held for sale. The
Company recorded a non-cash charge of $4.3 million primarily to write-down
rental assets held for sale to estimated fair value during the second quarter of
2000.

-38-

# NEFF CORP.
AND SUBSIDIARYNOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

New Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 141, Business Combinations (SFAS 141). SFAS 141
requires that the purchase method of accounting be used for all business
combinations, among other things and applies to all business combinations
initiated after June 30, 2001 and all business combinations accounted for using
the purchase method for which the acquisition date is July 1, 2001 or later. The
Company did not enter into any business combinations during 2002 and 2001.

The Company adopted SFAS
No.142 Goodwill and Other Intangible Assets (SFAS 142)
effective January 1, 2002. SFAS 142 prohibits the amortization of goodwill and
intangible assets with indefinite useful lives. As part of the adoption of SFAS
142, the Company changed its accounting for goodwill and other indefinite-lived
intangible assets from an amortization methodology to an impairment-only
methodology. SFAS 142 provides for a six month transitional period from the
effective date of adoption to June 30, 2002, for the Company to perform an
initial assessment of whether there was an indication that the carrying value of
its goodwill was impaired. The Company completed the initial assessment by
comparing its fair value, as determined in accordance with FASB 142, to its
carrying value and concluded that its goodwill was fully impaired as of January 1,
2002. The determination of the Company's fair value was based on the Company's market
capitalization at January 1, 2002.

The Company, in performing
the second step of the impairment testing, recorded a charge of $82.3 million,
which has been recorded as a cumulative effect of change in accounting principle
in the accompanying consolidated statements of operations for the year ended
December 31, 2002. If the Company had accounted for goodwill under SFAS 142
during 2001 and 2000, Neffs net loss would have been $19.3 million ($0.91
per diluted share) and $16.1 million ($0.76 per diluted share) for the years
ended December 31, 2001 and 2000, respectively. Amortization of goodwill was $2.3 million
and $2.3 million for the years ended December 31, 2001 and 2000, respectively.

In August 2001, the FASB
issued SFAS No. 143, Accounting for Asset Retirement Obligations
(SFAS 143). SFAS 143 addresses financial accounting and reporting
for obligations associated with the retirement of tangible long-lived assets and
the associated asset retirement costs. It applies to legal obligations
associated with the retirement of long-lived assets that result from the
acquisition, construction, development, and (or) the normal operation of a
long-lived asset, except for certain obligations of lessees. The provisions of
SFAS 143 will be effective for fiscal years beginning after June 15, 2002;
however early application is permitted. The Company is currently evaluating the
implications of adoption of SFAS 143 on its financial position or results of
operations.

In October 2001, the FASB issued  SFAS No. 144 "Accounting for the Impairment
or Disposal of Long-Lived
Assets (SFAS 144). This statement addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
This statement supersedes FASB Statement No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of, and the accounting and reporting provisions of Accounting Principles
Board Opinion No. 30, Reporting the Results of Operations  Reporting
the Effects of Disposal of a Segment of a Business, and the Extraordinary,
Unusual and Infrequently Occurring Events and Transactions, for the
disposal of a segment of a business. The provisions of SFAS 144 will be
effective for fiscal years beginning after December 15, 2001. The adoption of
SFAS 144 on January 1, 2002 by the Company did not have a material impact on its
financial position or results of operations.

-39-

# NEFF CORP.
AND SUBSIDIARYNOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

In April 2002, the FASB
issued SFAS No. 145, Reporting Gains and Losses from Extinguishment of
Debt (SFAS 145), which rescinded SFAS No. 4, No. 44, and No.
64 and amended SFAS No. 13. The new standard addresses the income statement
classification of gains or losses from the extinguishment of debt and criteria
for classification as extraordinary items. The Company adopted SFAS 145
effective as of January 1, 2002, and as such, the gain
recognized on the repurchase of the Companys senior subordinated notes
have been recorded as part of earnings from continuing operations and is
included in other operating expenses in the accompanying consolidated statements
of operations as opposed to an extraordinary item. See Note 5, Notes Payable and
Debt, for further discussion.

In June 2002, the FASB
issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal
Activities (SFAS 146). This statement requires companies to
recognize costs associated with exit or disposal activities when they are
incurred rather than at the date of a commitment to an exit or disposal plan.
SFAS No. 146 nullifies Emerging Issues Task Force Issue No 94-3, Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring), and will
be applied prospectively to exit or disposal activities initiated after December
31, 2002. The Company adopted SFAS 146 on January 1, 2003. The impact of
such adoption is not anticipated to have a material effect on the Companys
financial position or results of operations.

In November 2002, the FASB
issued Financial Interpretation (FIN) No. 45, Guarantors
Accounting and Disclosure Requirements for Guarantees of Indebtedness of
Others (FIN 45).FIN 45 clarifies and expands
existing disclosure requirements for guarantees, including product warranties.
FIN 45 also requires recognition of a liability at fair value of a
companys obligations under certain guarantee contracts. The disclosure
requirements are effective for financial statements of interim or annual periods
ending after December 15, 2002. The initial recognition and measurement
provisions of FIN 45 are applied only on a prospective basis to guarantees
issued after December 31, 2002, irrespective of the guarantors fiscal
year-end. Management does not believe that FIN 45 will have a material impact on
the Companys financial position or results of operations.

In December 2002, the FASB
issued SFAS No. 148, Accounting for Stock-Based Compensation-Transition
and Disclosure-an amendment of SFAS No. 123 (SFAS 148). This
statement provides alternative methods of transition for a voluntary change to
the fair value based method of accounting for stock-based employee compensation.
This statement also amends the disclosure requirements of SFAS No. 123 and
Accounting Principles Board Opinion No. 28, Interim Financial
Reporting, to require prominent disclosures in both annual and interim
financial statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported results. The Company adopted SFAS 148 effective January 1, 2003 regarding disclosure requirements
for condensed financial statements for interim periods. The Company has not yet
determined whether it will voluntarily change to the fair value based method of
accounting for stock-based employee compensation.

Reclassifications

Certain amounts for the
prior years have been reclassified to conform with the current year
presentation.

-40-

# NEFF CORP.
AND SUBSIDIARYNOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

## NOTE
3-ACCOUNTS RECEIVABLE

The majority of the
Companys customers are engaged in the construction and industrial business
throughout the southern and western regions of the United States. The Company
extends credit to its customers based upon an evaluation of the customers
financial condition and credit history. For sales of certain types of
construction equipment, the Companys policy is to secure its accounts
receivable by obtaining liens on the customers projects and issuing
notices thereof to the projects owners and general contractors. All other
receivables are generally unsecured.

## NOTE
4-PROPERTY AND EQUIPMENT

Property and equipment consists of the following (dollars in thousands):

`December 31,
                                           ---------------------     Estimated
                                                                   Useful Lives
                                             2002         2001      (in Years)
                                           --------     --------  --------------
Land ......................................$    113     $    113        -
Buildings and improvements ................   5,390        4,976      2-30
Office equipment...........................   6,084        6,039       2-7
Service equipment and vehicles ............  31,775       30,644       2-5
Shop equipment ............................   1,864        1,895        7
Capitalized lease equipment ...............       -          898       3-5
                                           --------     --------
                                             45,226       44,565
Less accumulated depreciation ............. (28,005)     (22,775)
                                           --------     --------
                                           $ 17,221     $ 21,790
                                           ========     ========`

Depreciation expense for
property and equipment was $6.7 million and $7.8 million for 2002 and 2001,
respectively.

## NOTE 5- NOTES
PAYABLE AND DEBT

Notes payable and debt consist of the following (in thousands, except percent data):

`December 31,
                                                                    --------------------------
                                                                        2002          2001
$200 million Revolving Credit Facility with interest ranging        ------------   -----------
from the Lender's Prime Rate plus 1.75% to LIBOR plus up to 3.50%.   $   126,560    $  118,217

10.25% Senior Subordinated Notes issued May 1998, due June 2008.          71,575       100,000

10.25% Senior Subordinated Notes issued December 1998, due June
2008, with an effective interest rate of 10.5%, net of unamortized
discount of $885 and $1,033 respectively.                                 83,925        98,967
                                                                    ------------   -----------
                                                                     $   282,060    $  317,184
                                                                    ============   ===========`

During the fourth quarter of 2001, the Company  entered into the Credit  Facility.  The Company used proceeds
from the Credit Facility to repay the Company's Former Credit Facility.  The Company's maximum
availability under the Credit
Facility is based upon eligible accounts receivable, rental fleet and inventory
amounts. The interest rates on balances outstanding under the Credit Facility
vary based upon the leverage ratio maintained by the Company. The Credit
Facility expires in December 2005. The Company is charged a commitment fee on
the aggregated daily unused balance of the Credit Facility which varies between
0.50% and 0.63%. As of December 31, 2002, the Company had $20.0 million available for borrowing under
the Credit Facility.

-41-

# NEFF CORP.
AND SUBSIDIARYNOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

The Credit Facility is
secured by substantially all of the Companys assets and contains certain
restrictive covenants which, among other things, require the Company to maintain
certain financial coverage ratios and restrict the payment of dividends by the
Company. During 2001 the Company recorded a charge of approximately $1.5
million, net of related income taxes, from the write-off of debt issue costs
associated with the repayment of the Former Credit Facility.

The May 1998 and December 1998 senior subordinated notes
(the Senior Subordinated Notes) are senior unsecured obligations of
the Company and are redeemable at the option of the Company, in whole or in
part, on or after June 1, 2003, at pre-established redemption prices together
with accrued and unpaid interest to the redemption date. The Senior Subordinated
Notes contain certain restrictive covenants, which among other things, restrict
the payment of dividends by the Company.

During 2002, the Company
repurchased Senior Subordinated Notes with an aggregate principal amount of
$43.7 million or 21.9% of the aggregate principal amounts of Senior Subordinated
Notes issued by the Company. The Senior Subordinated Notes traded at a discount
to face value; therefore the Company recognized a gain on debt extinguishment of
$12.3 million, or $0.58 per diluted share for the year ended December 31, 2002.

The Company was not in
compliance with the leverage ratio covenant under the Credit Facility on
September 30, 2002 and December 31, 2002. On December 20, 2002 the Company
entered into a forbearance agreement and second amendment to the Credit
Facility. Under the Forbearance Agreement, the Companys lenders agreed not
to exercise any default remedy available to them, or charge the default rate of
interest, as a result of the Companys failure to comply with the leverage
ratio covenant under the Credit Facility, for the Forbearance Period. The lenders
agreement to forbear is conditioned upon the Companys compliance with
certain conditions, including financial covenants relating to the Companys
consolidated EBITDA during the Forbearance Period. The Company is currently
discussing amendments to the Credit Facility with its senior lenders to
permanently cure the default and amend the financial covenants under the Credit
Facility to be more closely aligned with the Companys projected results of
operations. Although  management  expects that the Company will be able to permanently waive the defaults and amend the Credit Facility,  there can
be no  assurance  that the Company  will be able to do so. If the Company is unable to  permanently  cure the default or to comply with
the financial  covenants under the Credit Facility after the  Forbearance  Period ends, the lenders could declare all amounts  borrowed
under the Credit  Facility,  together with accrued  interest and other fees, to be due and payable.  There can be no assurance that the
Company would be able to repay all amounts due under the Credit Facility, if these amounts are declared due and payable.

-42-

# NEFF CORP.
AND SUBSIDIARYNOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

## NOTE
6-STOCK-BASED COMPENSATION

In December 1995, the
Company granted its Chief Executive Officer options to purchase shares of Class
A Common Stock representing 3% (on a fully diluted basis) of the issued and
outstanding common stock of the Company for an aggregate purchase price of $1.6
million. Upon completion of an initial public offering in 1998, the number of
shares granted under this agreement were fixed at 657,220 shares. No further
options can be granted under this agreement. The Company estimated compensation
expense at each reporting date based upon the estimated market value of shares
to be issued until the number of shares was fixed. Compensation expense of $3.2
million and $4.4 million was recognized in 1998 and 1997, respectively. These
options have been fully vested since December 1996. One-third of the options
expire on December 1, 2005, one-third expire on December 31, 2005 and the
remaining one-third expire on December 31, 2006.

In 1998, the Company
adopted an Incentive Stock Option plan (1998 ISO Plan). Under this
plan, designated officers, employees, and consultants of the Company are
eligible to receive awards in the form of options, stock appreciation rights,
restricted stock grants, performance awards, and dividend equivalent rights. An
aggregate of one million shares of Class A Common Stock are reserved for
issuance under the 1998 ISO Plan.

In 1999, the Company
adopted an Incentive Stock Option plan (1999 ISO Plan). Under this
plan, designated officers, employees, and consultants of the Company are
eligible to receive awards in the form of options, stock appreciation rights,
restricted stock grants, performance awards, and dividend equivalent rights. An
aggregate of one million shares of Class A Common Stock are reserved for
issuance under the 1999 ISO Plan.

The exercise price of
incentive stock options granted under the 1999 and 1998 ISO Plans may not be
less than 100% of the fair market value of the Companys Class A Common
Stock on the date of grant. Generally, options vest over a period of three years
and are not exercisable beyond 10 years from date of grant. There have been no
stock appreciation rights, restricted stock grants, performance awards or
dividend equivalent rights awarded under the 1999 and 1998 ISO Plans.

-43-

# NEFF CORP.
AND SUBSIDIARYNOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

The following table
summarizes stock option activity under the 1999 and 1998 ISO Plans, (in
thousands, except per share data):

`ISO Plan Options
                                                     ---------------------------------
                                   Shares Available   Number of     Weighted Average
                                     For Options       Shares     Exercise Price/Share
                                   ----------------  -----------  ---------------------

Balance at December 31, 1999 .....            1,142          858  $              9.38
Authorized .......................                -            -                    -
Granted ..........................                -            -                    -
Forfeited ........................               76          (76)               10.05
Expired ..........................                -           -                     -
                                   ----------------  -----------
Balance at December 31, 2000 .....            1,218          782                 9.31
Authorized .......................                -            -                    -
Granted ..........................             (583)         583                 0.53
Forfeited ........................              323         (323)                9.92
Expired ..........................                -            -                    -
                                   ----------------  -----------
Balance at December 31, 2001 .....              958        1,042                 4.42
Authorized .......................                -            -                    -
Granted ..........................                -            -                    -
Forfeited ........................                2           (2)                6.79
Expired ..........................                -            -                    -
                                   ----------------  -----------
Balance at December 31, 2002 .....              960        1,040  $              4.41
                                   ================  ===========`

The following table summarizes information about fixed stock options as of December 31, 2002 (in thousands, except per share
and year data):

`Number of    Weighted Average   Weighted Average  Number of  Weighted Average
                          Options    Exercise Price Per   Remaining Life    Options    Exercise Price
                        Outstanding         Share            (Years)        Vested       Per Share
                      -------------  ------------------  ---------------  -----------  ---------------
Range of Exercise Prices:
 $0.37  ..............          150    $           0.37              7.0           50   $         0.37
 $0.58  ..............          433                0.58              7.0          144             0.58
 $6.00-6.84 ..........          269                6.18              6.0          269             6.18
 $9.75-14.00 .........          188               13.97              5.4          188            13.97
                      -------------  ------------------  ---------------  -----------  ---------------
                              1,040    $           4.41              6.5          651   $         6.74
                      =============  ==================  ===============  ===========  ===============`

Effective January 1, 1997,
the Company adopted a phantom stock plan (the Phantom Plan). The
Phantom Plan is designed to reward employees for increases in the Companys
performance. The Phantom Plan enables the Company to award employees individual
units representing a hypothetical share of the Companys Class A Common
Stock (the Phantom Share). Each Phantom Share is assigned a share
value on the date granted as determined by the administrator of the Phantom
Plan.

The cash award the
employees are entitled to receive on the redemption date is the difference
between the value assigned on the date of grant and the greater of the fair
market value of the Companys Class A Common Stock or the calculated
Phantom Plan share value. As of December 31, 2002, there were 0.1 million
Phantom Shares granted and outstanding with assigned
per share values ranging from of $9 to $11.25, vesting over three to five years.
Approximately $0.3 million of compensation expense was recorded for the years
ended December 31, 2000. No compensation expense was recorded for the years
ended December 31, 2002 or 2001.

-44-

# NEFF CORP.
AND SUBSIDIARYNOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

## NOTE
7-RETIREMENT PLAN

In February 1996, the
Company adopted a qualified 401(k) profit sharing plan (the 401(k)
Plan). The 401(k) Plan covers substantially all employees of the Company.
Participating employees may contribute to the 401(k) Plan through salary
deductions. The Company may contribute, at its discretion, matching
contributions equal to 50% of the employees contribution not to exceed 3%
of the employees annual salary. The Company contributed approximately $0.5
million, $0.6 million and $0.6 million to the 401(k) Plan for the years ended
December 31, 2002, 2001 and 2000, respectively.

## NOTE 8-INCOME
TAXES

The components of the provision for income taxes are as follows (in thousands):

`For the Years Ended
                                         December 31,
                          --------------------------------------------
                             2002           2001             2000
                          ===========    ============    =============
Current .............     $     (370)    $          -    $        (643)
Deferred ............               -               -              643
                          -----------    ------------    -------------
Total  ..............     $     (370)    $          -    $           -
                          ===========    ============    =============`

The following table summarizes the tax effects comprising the Company's net deferred tax assets and liabilities (in thousands):

`December 31,
                                                               --------------------
                                                                 2002        2001
                                                               --------    --------
Deferred Tax Assets
      Net operating loss carryforwards ........................$ 41,924    $ 34,216
      Alternative minimum tax credits  ........................     515         874
      Deferred stock option compensation  .....................   2,849       2,849
      Intangible assets, allowance for bad debts and other ....  21,396       1,421
                                                               --------    --------
         Total deferred tax assets ............................  66,684      39,360
      Valuation allowance ..................................... (36,514)    (13,163)
Deferred Tax Liabilities 
      Depreciation ............................................ (30,170)    (26,197)
                                                               --------    --------
Net Deferred Tax Liability ....................................$      -    $      -
                                                               ========    ========`

As of December 31, 2002 and
2001, the Company had net operating loss carryforwards for federal and state
income tax purposes of approximately $104.0 million and $84.7 million,
respectively, expiring through 2021 (includes net operating loss carryforwards
for federal and state income tax purposes of approximately $4.8 million and $4.4
million, respectively, acquired in connection with a 1999 acquisition). Such
acquired net operating loss carryforwards may only be utilized by Neff Rental,
Inc., the Companys subsidiary.

-45-

# NEFF CORP.
AND SUBSIDIARYNOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

Current accounting
standards require that deferred income taxes reflect the tax consequences in
future years of differences between the tax bases of assets and liabilities and
their carrying values for financial reporting purposes. In addition, future tax
benefits, such as net operating loss (NOL) carryforwards, are
required to be recognized to the extent that realization of such benefits is
more likely than not. A valuation allowance is established for those benefits
that do not meet the more likely than not criteria. A valuation allowance has
been established for the entire balance of the net deferred tax assets at
December 31, 2002 and 2001 due to the uncertainty regarding the Companys
ability to generate future taxable income sufficient to utilize the net
operating loss carryforwards.

The following table
summarizes the differences between the statutory federal income tax rate and the
Companys effective income tax rate (dollars in thousands, except percent
data):

`For the Years Ended December 31,
                                             ---------------------------------------------
                                                2002             2001             2000
                                             -----------      -----------      -----------
                                             Amt       %      Amt       %      Amt       %
                                             ---      --      ---      --      ---      --
(Provision) benefit at statutory federal
     income tax rate ......................$33,304   34.0  $ 7,341    34.0    $6,263   34.0
State income tax, net of federal income
     tax benefit ..........................      -      -        -       -       471    2.6
Change in valuation allowance .............(23,351) (23.8)  (6,921)  (32.1)   (6,242) (33.9)
Non-deductible expenses.................... (9,953) (10.2)    (420)   (1.9)     (492)  (2.7)
Foreign subsidiary ........................      -      -         -      -         -      -
Other .....................................    370    0.1         -      -         -      -
                                              ----   ----      ----   ----      ----   ----
(Provision for) benefit from income taxes..$   370    0.1    $    -      -    $    -      -
                                              ====   ====      ====   ====      ====   ====`

No deferred tax benefit was
recorded for the years ended December 31, 2002 and 2001, due to uncertainty
regarding the realization of the deferred tax asset. The Company received
$370,000 in income tax refunds during the third quarter of 2002 that relate to
refunds of income taxes previously paid, and has been recorded in the
accompanying statement of operations for the year ended December 31, 2002.

## NOTE
9-EARNINGS PER SHARE

For the years ended
December 31, 2002, 2001 and 2000, the treasury stock method was used to
determine the dilutive effect of options and warrants on earnings per share
data.

Net loss and weighted
average number of shares outstanding used in the computations are summarized as
follows (in thousands, except per share data):

`For the Years Ended December 31,
                                                               ------------------------------------
                                                                  2002         2001          2000
                                                               --------      --------      --------
Net loss - basic and diluted  ................................$ (97,953)    $ (21,592)    $ (18,445)
                                                               ========      ========      ========
Number of common shares:
    Weighted average common shares outstanding-basic  ........   21,165        21,165        21,165
    Employee stock options (1)  ..............................        -             -             -
                                                               --------      --------      --------
Weighted average common shares outstanding-diluted ...........   21,165        21,165        21,165
                                                               ========      ========      ========
Net loss per common share-basic and diluted  .................$   (4.63)     $  (1.02)    $   (0.87)
                                                               ========      ========      ========`

-46-

# NEFF CORP.
AND SUBSIDIARYNOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

(1)      The  incremental  shares  resulting  from the assumed  exercise  of options  for the years ended 2002,  2001 and 2000 would be
          antidilutive and are therefore excluded from the computation of diluted loss per share.

## NOTE 10-FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair market  value of  financial  instruments  held by the Company at December  31, 2002 and 2001 are based on a variety of
factors and  assumptions and may not  necessarily be  representative  of the actual gains or losses that will be realized in the future
and do not include expenses that could be incurred in an actual sale or settlement of such financial instruments.

The fair  value of the  Company's  Credit  Facility  is  assumed  to be equal to its  carrying  value,  as the  interest  rates
approximate  market rates. At December 31, 2002  approximately  $126.6 million was outstanding  under the Credit Facility.  At December
31, 2001, approximately $118.2 million was outstanding under the Credit Facility.

The fair value of the Company's  Senior  Subordinated  Notes was  estimated by obtaining the quoted market price.  The carrying
amount  of the  Company's  Senior  Subordinated  Notes  was  $155.5  million  and  $198.9  million,  at  December  31,  2002 and  2001,
respectively.  The  fair  value  of  the  Company's  Senior  Subordinated  Notes  as of  the  same  dates  was  estimated  to be  $39.7
million  and  $118.0 million at December 31, 2002 and 2001, respectively.

## NOTE 11-COMMITMENTS AND CONTINGENCIES

On December 17, 1999, the Company completed the sale of Neff Machinery,  Inc.  ("Machinery"),  a wholly-owned  subsidiary of
Neff.  Neff received  $90.5  million and recorded a gain on the sale of $3.8  million.  The  Machinery  sale  agreement  provided for a
post-closing  purchase  price adjustment  based  on the  difference  between  the net  worth  of
Machinery  as of June 30, 1999 (the date of a pro forma  balance  sheet  prepared in advance of the  execution  of the  Machinery  sale
agreement)  and the closing date (on the basis of a balance sheet  prepared  after  closing).  Following  preparation of a closing date
balance  sheet,  the purchaser  told Neff that Neff owed the  purchasers  an adjustment  payment of $20.3  million.  Neff  responded by
informing the purchaser that the purchaser owed Neff additional consideration of $8.8 million.

In August 2001,  Neff and the purchaser  agreed that all disputes  pertaining to the closing balance sheet and the pro forma
balance  sheet  would be resolved by an  arbitrator  selected by the parties  (the  "Arbitrator").  On June 13,  2002,  the  Arbitrator
rendered a decision  awarding  the  purchaser  $3.5  million.  The Company  recognized  a charge  during 2002 for $3.9  million,  which
consists  of the $3.5  million  for the  litigation  settlement  award and $0.4  million in related  costs.  On December  31,  2002,  a
judgment  confirming  the award and providing for interest on the award at the  statutory  rate from June 13, 2002,  was entered in the
Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County, Florida.

On or about June 14, 2001, the purchaser sent the Company a Notice of Indemnification  Claim alleging  indemnifiable damages
under the Machinery  sale  agreement.  On or about December 16, 2002, the purchaser  filed a Demand for  Arbitration  with the American
Arbitration  Association,  seeking  $1,204,645 under the  indemnification  provisions of the sale agreement.  The Company and the purchaser
are negotiating a settlement to resolve this indemnification claim.

## NOTE 12-RELATED PARTY TRANSACTIONS AND OTHER COMMITMENTS

During 2002, 2001 and 2000 revenues from affiliated  companies amounted to approximately $1.7 million,  $2.5 million,  and $2.9
million, respectively.

Operating Leases

During 2002, 2001 and 2000 rental expense under operating lease  arrangements  amounted to approximately  $15.6 million,  $15.6
million, and $12.6 million, respectively.

-47-

# NEFF CORP.
AND SUBSIDIARYNOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

The Company  leases real estate,  rental  equipment and other  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 rental amounts.  As of
December 31, 2002,  future minimum rental  payments under  noncancellable  operating  lease  arrangements  are as follows for the years
ending December 31 (in thousands):

`2003 ..................................... $ 14,257
            2004 .....................................    9,296
            2005 .....................................    5,273
            2006 .....................................    3,141
            2007 .....................................    2,964
            Thereafter ...............................    3,755
                                                      ---------
                                                      $  38,686
                                                      =========`

## NOTE
13-SUPPLEMENATAL DISCLOSURE OF CASH FLOW INFORMATION

`For the Years Ended
                                                                    December 31,
                                                           -------------------------------
                                                             2002       2001        2000
                                                           --------   --------    --------
                                                                   (in thousands)
Supplemental Disclosure of Cash Flow Information
    Cash paid for interest ................................$ 24,497   $ 33,260    $ 30,896
                                                           ========   ========    ========
    Cash (received) paid for income taxes .................$   (370)  $      -    $     68
                                                           ========   ========    ========


    Branch closure and other related costs (note 1):
    Total branch closure and other related costs ..........$    701   $ 5,702     $      -
    Non-cash costs ........................................    (681)   (4,390)           -
                                                           --------   -------     --------
    Cash paid for branch closure and other related costs...$     20   $ 1,312     $      -
                                                           ========   =======     ========`

-48-

# NEFF CORP.
AND SUBSIDIARYNOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

## NOTE
14-SUMMARY OF QUARTERLY FINANCIAL INFORMATION

## (UNAUDITED)

A summary of the quarterly
operating results during 2002 (as restated) and 2001 is as follows (in thousands except per
share data):

`2002
                                                      ----------------------------------------------
                                                         1st         2nd         3rd         4th
                                                      ---------   ---------   ---------    ---------
Revenues  ............................................$  43,402   $  48,616   $  50,887    $  48,830
Gross Profit .........................................$  13,955   $  18,207   $  18,349    $  15,051

Net income (loss) as reported ........................$   1,510   $  (2,687)  $  (3,518)   $ (10,962)
Cumulative effect of change in accounting principle...  (82,296)          -           -            -
                                                      ---------   ---------   ---------    ---------
Net loss as restated .................................$ (80,786)  $  (2,687)  $  (3,518)   $ (10,962)
                                                      =========   =========   =========    =========                                      -
Loss per common share data - Basic and diluted:
Net income (loss) as reported ........................$    0.07   $   (0.13)  $   (0.17)   $   (0.51)
Cumulative effect of change in accounting principle...    (3.89)          -           -            -
                                                      ---------   ---------   ---------    ---------
Net loss as restated .................................$   (3.82)  $   (0.13)  $   (0.17)   $   (0.51)
                                                       =========   =========   =========    =========

                                                                           2001
                                                      ----------------------------------------------
                                                         1st         2nd          3rd         4th
                                                      ---------   ---------   ---------    ---------
Revenues  ............................................$  59,195    $ 57,662    $ 56,648     $ 57,497
Gross Profit .........................................$  20,553    $ 22,554    $ 22,066     $ 18,555
Net loss .............................................$ (14,737)   $ (1,793)   $ (2,421)    $ (2,641)
                                                      =========   =========   =========    =========

Loss per common share data -Basic and diluted:
Net loss .............................................$   (0.70)   $  (0.08)   $  (0.11)    $  (0.12)
                                                      =========   =========   =========    =========`

Certain amounts have been
reclassified for comparative purposes. During the first quarter of 2001, the
Company recognized a $9.1 million charge for the branch closure and other
related costs associated with the closure of branches. During the fourth quarter
of 2001, a reversal of $3.4 million in branch closure and other related costs
was recorded to reflect a change in the Companys branch closure plan (see
Note 1). During the first quarter of 2002 the Company wrote-off  its
goodwill and recognized a charge of $82.3 million as a cumulative effect of change in
accounting principle (see Note 2). The Company also recognized a charge of $0.7
million for branch closure costs (see Note 1) and $3.2 million to write-down
assets held for sale (see Note 2), during the fourth quarter of 2002.

-49-

## INDEPENDENT
AUDITORS REPORT

To the Board of Directors and Stockholders of Neff Corp.

We have audited the
consolidated financial statements of Neff Corp. and subsidiary (the
Company) as of December 31, 2002 and 2001 and for each of the three
years in the period ended December 31, 2002, and have issued our report thereon
dated March 11, 2003, which report expresses an unqualified opinion and includes an explanatory paragraph
concerning substantial doubt as to the entity's ability to continue as a going concern; such financial statements and report are included
elsewhere in the Companys 2002 Annual Report on Form 10-K.
Our audits also included the financial statement schedules of the Company listed
in Item 15(a)2. The financial statement schedules are the responsibility of the
Companys management. Our responsibility is to express an opinion based on
our audits. In our opinion, such financial statement schedules, 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/ DELOITTE & TOUCHE LLP
Certified Public Accountants

Miami, Florida
March 11, 2003

-50-

# SCHEDULE II

# NEFF CORP.

VALUATION
AND QUALIFYING ACCOUNTS AND RESERVES (in
thousands)

`Balance      Charged to                            Balance
                                       at Beginning    Costs and                             at End
                                         of Period     Expenses     Other      Deductions   of Period
                                        ----------   -----------   --------   -----------  -----------
Year ended December 31, 2002:
Allowance for doubtful accounts  ........ $ 2,947      $ 2,450      $     -     $(2,612)      $ 2,785
                                         ========     ========     ========    ========      ========
Deferred tax valuation allowance ........ $13,163      $23,351      $     -     $     -        36,514
                                         ========     ========     ========    ========      ========
Year ended December 31, 2001:
Allowance for doubtful accounts ......... $ 3,323      $ 1,643      $     -     $(2,019)      $ 2,947
                                         ========     ========     ========    ========      ========
Deferred tax valuation allowance ........ $ 6,242      $ 6,921      $     -     $     -       $13,163
                                         ========     ========     ========    ========      ========
Year ended December 31, 2000:
Allowance for doubtful accounts ......... $ 2,904      $ 2,795      $     -     $(2,376)      $ 3,323
                                         ========     ========     ========    ========      ========
Deferred tax valuation allowance ........ $     -      $ 6,242      $     -     $     -       $ 6,242
                                         ========     ========     ========    ========      ========`

-51-

## PART III

## ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH  ACCOUNTANTS
                      ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

## ITEM 10.     DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by Item 10 will be contained in our definitive                      proxy materials to
                be filed with the SEC and is incorporated in this Annual Report on Form 10-K by this reference.

## ITEM 11.     EXECUTIVE COMPENSATION

The information  required by Item 11 will be contained in our definitive  proxy materials to be filed with the SEC
                and is incorporated in this Annual Report on Form 10-K by this reference.

## ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                     AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The  information  required by Item 12 will be contained in our definitive  proxy materials to be filed with the SEC
               and is incorporated in this Annual Report on Form 10-K by this reference.

## ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by Item 13 will be contained in our definitive proxy materials to be filed with the SEC
               and is incorporated in this Annual Report on Form 10-K by this reference.

-52-

## ITEM 14.    CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

The Company  maintains  controls  and  procedures  designed to ensure that it is able to collect the  information  it is
               required to disclose in the reports it files with the SEC,  and to process,  summarize  and  disclose  this  information
               within the time periods  specified in the rules of the SEC. The Company's Chief  Executive and Chief Financial  Officer
               are responsible for establishing and maintaining these procedures,  and, as required by the rules of the SEC, evaluating
               their  effectiveness.  Based on their evaluation of the Company's disclosure controls and procedures which took place as
               of a date within 90 days of the filing date of this report,  the Chief  Executive and Chief Financial  Officer  believe
               that these procedures are effective to ensure that the Company is able to collect,  process and disclose the information
               it is required to disclose in the reports it files with the SEC within the required time periods. We note however,  that
               the design of any system of controls is based in part upon certain  assumptions  about the  likelihood of future events,
               and we cannot  assure you that any design will succeed in  achieving  its stated  goals under all  potential  future
               conditions, regardless of how remote.

## INTERNAL CONTROLS

The Company  maintains a system of internal  controls designed to provide  reasonable  assurance that:  transactions are
               executed in accordance with management's  general or specific  authorization;  transactions are recorded as necessary to
               permit preparation of financial  statements in conformity with generally accepted accounting  principles and to maintain
               accountability  for assets;  access to assets is permitted  only in  accordance  with  management's  general or specific
               authorization;  and the recorded  accountability for assets is compared with the existing assets at reasonable intervals
               and appropriate action is taken with respect to any differences.

Since the date of the most  recent  evaluation  of the  Company's  internal  controls by the Chief  Executive  and Chief
               Financial  Officer,  there  have  been  no  significant  changes  in such  controls  or in  other  factors  that  could
               significantly  affect those  controls,  including any  corrective  actions with regard to significant  deficiencies  and
               material weaknesses.

# PART IV

## ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) The following documents are filed with, and as part of, this Annual Report on Form 10-K.

1.  Financial Statements.

For a complete list of the  financial  statements  filed with this Annual Report on Form 10-K,  see the Index to Financial
             Statements and Schedules in Item 8 on Page 28.

2.  Financial Statements Schedules.

The following financial statement schedules are filed with this Annual Report on Form 10-K:

See Index to Financial Statements and Schedules in Item 8 on Page 28.

3. Exhibits

The exhibits listed on the accompanying Exhibit Index are incorporated in the Annual Report
 on Form 10-K by reference and filed as part of this report.

(b)  Reports on Form 8-K

During the last quarter of the period covered by this Annual Report, no reports on Form 8-K were filed.

(c) Exhibits

See Item 15(a)(3) above.

-53-

# SIGNATURES

Pursuant  to the  requirements  of  Section  13 or 15(d)  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.

# NEFF CORP.

Date: March 28, 2003                                                                                                        /s/Mark H. Irion
                                                                                                                                                                   ----------------------
                                                                                                                                                                   MARK H.  IRION
                                                                                                                                                                   Chief Financial Officer
                                                                                                                                                                   On behalf of the Registrant and as
                                                                                                                                                                   Principal Financial and Accounting Officer

KNOW ALL PERSONS BY THESE PRESENTS,  that each individual  whose signature  appears below  constitutes and appoints Juan Carlos Mas and
Mark H. Irion, and each of them individually,  as their true and lawful  attorneys-in-fact and agents, with full power of substitution,
for him and in his name,  place and stead,  in any and all capacities,  to sign any and all amendments to this report,  and to file the
same, with all exhibits thereto and to all documents in connection  therewith,  with the Securities and Exchange  Commission,  granting
unto said  attorneys-in-fact  and agents,  and each of them,  full power and  authority  to do and perform each and every act and thing
requisite  and necessary to be done in  connection  therewith,  as fully to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said  attorneys-in-fact  and agents or any of them, or his or their substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities and Exchange Act of 1934,
this report has been  signed  below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

`Signature                             Title                               Date
          ---------                             -----                               ----


/s/ Juan Carlos Mas                    President, Chief Executive Officer,      March  28, 2003
-------------------------
Juan Carlos Mas                        Director

/s/ Mark H. Irion                      Chief Financial Officer                  March  28, 2003
------------------
Mark H. Irion

/s/ Jorge Mas                          Chairman of the Board                    March  28, 2003
-------------
Jorge Mas

/s/ Steven Scheiwe                     Director                                 March  28, 2003
-----------------------
Steven Scheiwe

/s/ Jose Ramon Mas                     Director                                 March  28, 2003
-------------------
Jose Ramon Mas`

-54-

# CERTIFICATIONS

The undersigned, in his
capacity as Chief Executive Officer of Neff Corp. provides the following
certification required by 18 U.S.C. Section 1350, as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002, and 17 C.F.R.ss.240.13(a)-14.

I, Juan Carlos Mas, certify that:

1. I have reviewed this annual report on Form 10-K of Neff Corp.;

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

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

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

a) designed such disclosure
controls and procedures to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this
annual report is being prepared;

b) evaluated the
effectiveness of the registrants disclosure controls and procedures as of
a date within 90 days prior to the filing date of this annual report (the
Evaluation Date); and

c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based
         on our evaluation as of the Evaluation Date;

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

a) all significant
deficiencies in the design or operation of internal controls which could
adversely affect the registrants ability to record, process, summarize and
report financial data and have identified for the registrants auditors any
material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the
         registrant's internal controls; and

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

Date: March 28, 2003

/s/Juan Carlos Mas Juan Carlos Mas
                                                              Chief Executive Officer

-55-

The undersigned, in his
capacity as Chief Financial Officer of Neff Corp. provides the following
certification required by 18 U.S.C. Section 1350, as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002, and 17 C.F.R.ss.240.13(a)-14.

I, Mark H. Irion, certify that:

1. I have reviewed this annual report on Form 10-K of Neff Corp.;

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

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

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

a) designed such disclosure
controls and procedures to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this
annual report is being prepared;

b) evaluated the
effectiveness of the registrants disclosure controls and procedures as of
a date within 90 days prior to the filing date of this annual report (the
Evaluation Date); and

c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based
         on our evaluation as of the Evaluation Date;

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

a) all significant
deficiencies in the design or operation of internal controls which could
adversely affect the registrants ability to record, process, summarize and
report financial data and have identified for the registrants auditors any
material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the
         registrant's internal controls; and

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

Date: March 28, 2003

/s/ Mark H. Irion
 Mark H. Irion
                                                     Chief Financial Officer

-56-

`INDEX TO EXHIBITS

Exhibit      Description
Number
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

3.1          Certificate of Incorporation of Neff Corp., as amended and restated, filed as Exhibit 3.1
             to Neff Corp.'s Registration Statement on Form S-4 (Registration No. 333-59313), dated
             July 17, 1998, incorporated herein by reference.
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

3.2          By-Laws of Neff Corp., as amended and restated, filed as Exhibit 3.2 to Neff Corp.'s
             Registration Statement on Form S-4 (Registration No. 333-59313), dated July 17, 1998,
             incorporated herein by reference.
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

4.1          Form of Certificate of Class A Common Stock, filed as Exhibit 4.1 to Neff Corp.'s
             Registration Statement on Form S-1 (Registration No. 333-48077), dated March 17, 1998,
             incorporated herein by reference.
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

4.2          Indenture, by and among the Company, the Guarantors and State Street Bank & Trust Company,
             as Trustee, dated as of May 28, 1998, filed as Exhibit 4.1 to Neff Corp.'s Registration
             Statement on Form S-4 (Registration No. 333-59313), dated July 17, 1998, incorporated
             herein by reference.
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

4.3          Indenture, by and among Neff Corp., the Guarantors and State Street Bank & Trust Company,
             as Trustee, dated as of December 9, 1998, filed as Exhibit 4.2 to Neff Corp.'s
             Registration Statement on Form S-4 (Registration No. 333-71027), dated January 22, 1999,
             incorporated herein by reference.
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

4.4          Form of 10 1/4% Senior Subordinated Notes due 2008, issued May 28, 1998 (included in
             Exhibit 4.2).
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

4.5          Form of 10 1/4% Senior Subordinated Notes due 2008, issued December 9, 1998 (included in
             Exhibit 4.3).
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

4.6          Registration Rights Agreement, by and between Neff Corp. and GECFS, Inc., dated as of
             March 25, 1998, filed as Exhibit 4.2 to Neff Corp.'s Registration Statement on Form S-1
             (Registration No. 333-48077), dated March 17, 1998, incorporated herein by reference.
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

4.7          Rights Agreement between Neff Corp. and First Union National Bank, filed as Exhibit 10.13
             to Neff Corp.'s Registration Statement on Form S-1 (Registration No. 333-48077), dated
             March 17, 1998, incorporated herein by reference.
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

4.8          First Amendment to Rights Agreement between Neff Corp. and First Union National Bank,
             filed as Exhibit 10.1 to Neff Corp.'s Quarterly Report on Form 10-Q, dated November 15,
             1999, incorporated herein by reference.
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------
                                                     -57-



4.9          Registration Rights Agreement, by and between Neff Corp. and Santos Fund I, L.P., dated as
             of March 25, 1998, filed as Exhibit 4.3 to Neff Corp.'s Registration Statement on Form S-1
             (Registration No. 333-48077), dated March 17, 1998, incorporated herein by reference.
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

4.10         Registration Rights Agreement, by and between Neff Corp. and Santos Capitol Advisors,
             Inc., dated as of March 25, 1998, filed as Exhibit 4.4 to Neff Corp.'s Registration
             Statement on Form S-1 (Registration No. 333-48077), dated March 17, 1998, incorporated
             herein by reference.
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

4.11         Amended and Restated Stockholders' Agreement by and among Jorge Mas, Juan Carlos Mas, Jose
             Ramon Mas, General Electric Capital Corporation, GECFS, Inc., Kevin P. Fitzgerald, Santos
             Fund I, L.P., Santos Capitol Advisors, Inc. and Neff Corp., dated as of March 25, 1998,
             filed as Exhibit 4.5 to Neff Corp.'s Registration Statement on Form S-1 (Registration No.
             333-48077), dated March 17, 1998, incorporated herein by reference.
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

4.12         First Amendment to Amended and Restated Stockholder's Agreement between Jorge Mas, Juan
             Carlos Mas, Jose Ramon Mas, General  Electric Capital Corporation, GECFS, Inc., Santos
             Fund I.L.P., Santos Capital Advisors, Inc., Kevin Fitzgerald and Neff Corporation., filed
             as Exhibit 4.1 to Neff Corp.'s Annual Report on Form 10-K, dated March 30, 2000,
             incorporated herein by reference.
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

10.1         Stock Option Agreement by and between Neff Corp. and Kevin P. Fitzgerald, filed as Exhibit
             10.6 to Neff Corp.'s Registration Statement on Form S-1 (Registration No. 333-48077),
             dated March 17, 1998, incorporated herein by reference.**
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

10.2         Neff Corp. 1998 Incentive Stock Plan, filed as Exhibit 10.10 to Neff Corp.'s Registration
             Statement on Form S-1 (Registration No. 333-48077), dated March 17, 1998, incorporated
             herein by reference.**
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

10.3         Neff Corp. 1999 Incentive Stock Plan, filed as Exhibit 99.1 to Neff Corp.'s Proxy
             Statement, dated  April 19, 1999, incorporated herein by reference.**
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

10.4         Neff Corp. Phantom Stock Plan, filed as Exhibit 10.12 to Neff Corp.'s Registration
             Statement on Form S-1 (Registration No. 333-48077), dated March 17, 1998, incorporated
             herein by reference.**
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

10.5         Amendment No. 1 to Neff Corp. Phantom Stock Plan, filed as Exhibit 10.15 to Neff Corp.'s
             Registration Statement on Form S-4 (Registration No. 333-71027), dated January 22, 1999,
             incorporated herein by reference.**
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

10.6         Amendment No. 2 to Neff Corp. Phantom Stock Plan, filed as Exhibit 10.16 to Neff Corp.'s
             Registration Statement on Form S-4 (Registration No. 333-71027), dated January 22, 1999,
             incorporated herein by reference.**
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------
                                                    -58-


10.7         Form of Employment Agreement by and between Neff Corp. and Vice President of Neff Rental,
             Inc., filed as Exhibit 10.2 to Neff Corp.'s Quarterly Report on Form 10-Q, dated May 6,
             1999, incorporated herein by reference.**
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

10.8         Employment Agreement by and between Neff Corp. and Mark Irion, Chief Financial Officer,
             Neff Corp., filed as Exhibit 10.1 to Neff Corp.'s Annual Report on Form 10-K, dated March
             30, 2000, incorporated herein by reference.**
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

10.9         Seventh Amendment to Credit Agreement dated as of May 17, 2001 by and between Neff Corp.,
             Neff Rental, Inc., the Lenders, and Bankers Trust Co., as Agent, filed as Exhibit 1 to
             Neff Corp.'s Current Report on Form 8-K, dated May 25, 2001, incorporated herein by
             reference.
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

10.10        Form of Letter Agreement Extending the Term of Senior Management Employment Agreements,
             filed as Exhibit 10.1 to Neff Corp.'s Quarterly Report on Form 10-Q, dated August 14,
             2001, incorporated herein by reference.
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

10.11        Loan and Security Agreement dated as of December 19, 2001, by and among Neff Corp., Neff
             Rental, Inc., the Lenders, and Fleet Capital Corp., as Agent, filed as Exhibit 10.1 to
             Neff Corp.'s Annual Report on Form 10-K, dated March 29, 2002, incorporated herein by
             reference.
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

10.12        First Amendment to Loan and Security Agreement by and among Neff Corp., Neff Rental, Inc.,
             the Lenders, and Fleet Capital Corp., as Agent, filed as Exhibit 10.1 to Neff Corp.'s
             Quarterly Report on Form 10-Q, dated May 15, 2002, incorporated herein by reference.
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

10.13        Forbearance Agreement and Second Amendment to Loan and Security Agreement by and among
             Neff Corp., Neff Rental, Inc., the Lenders, and Fleet Capital Corp., as Agent, dated
             December 20, 2002, filed as Exhibit 99.1 to Neff Corp.'s Current Report on Form 8-K, dated
             January 13, 2003, incorporated herein by reference.
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

10.14        Amended and Restated Employment Agreement dated as of December 31, 2001, by and between
             Neff Corp. and Peter Gladis, filed as Exhibit 10.2 to Neff Corp.'s Annual Report on Form
             10-K, dated March 29, 2002, incorporated herein by reference.
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

21*          Subsidiary of the Registrant
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

23*          Consent of Deloitte & Touche LLP
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

24           Power of Attorney (included on Signature Page of this Annual Report).
------------ --------------------------------------------------------------------------------------------
------------ --------------------------------------------------------------------------------------------

99*          Certifications Required by Section 906 of the Sarbanes-Oxley Act
------------ --------------------------------------------------------------------------------------------
                                                -59-




* Filed herewith
** Indicates a management contract or compensatory plan or arrangement.`

Exhibit 21

Subsidiary of the Registrant

Neff Rental, Inc., a Florida corporation

-60-

Exhibit 23

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Registration Statement No. 333-83263 of Neff Corp. on Form S-8 of our report dated
March 11, 2003 (which report expresses an unqualified opinion and includes an explanatory paragraph concerning substantial doubt as to the entity's ability
to continue as a going concern, appearing
in this Annual Report on Form 10-K of Neff Corp. for the year ended December 31, 2002.

/s/ Deloitte & Touche LLP
Miami, Florida 
March 28, 2003

-61-

Exhibit 99

# CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
                                 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the
Annual Report on Form 10-K of Neff Corp. (the Company) for the year
ended December 31, 2002 as filed with the Securities and Exchange Commission on
the date hereof (the Report), I, Juan Carlos Mas, Chief Executive
Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1). The Report fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2). The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company.

Date: March 28, 2003                                                                                                        /s/Juan Carlos Mas
                                                                                                                                                                   ----------------------
                                                                                                                                                                   JUAN CARLOS MAS
                                                                                                                                                                   Chief Executive Officer

A signed original of this written statement required by Section 906 has been
provided to Neff Corp. and will be retained by Neff Corp. and furnished to the Securities and Exchange Commission or its staff
upon request.

-61-

# CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
                                 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the
Annual Report on Form 10-K of Neff Corp. (the Company) for the year
ended December 31, 2002 as filed with the Securities and Exchange Commission on
the date hereof (the Report), I, Mark H. Irion, Chief Financial
Officer, of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1). The Report fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2). The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company.

Date: March 28, 2003                                                                                                        /s/Mark H. Irion
                                                                                                                                                                   ----------------------
                                                                                                                                                                   MARK H.  IRION
                                                                                                                                                                   Chief Financial Officer

A signed original of this written statement required by Section 906 has been
provided to Neff Corp. and will be retained by Neff Corp. and furnished to the Securities and Exchange Commission or its staff
upon request.

-62-