NEFF CORP, S-1/A, 1998-04-30

NEFF CORP
S-1/A, 1998-04-30
EQUIPMENT RENTAL & LEASING, NEC

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 30, 1998
REGISTRATION STATEMENT NO. 333-48077
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

AMENDMENT NO. 2
TO
FORM S-1

REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
--------------
NEFF CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
DELAWARE 7353 65-0626400
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>

3750 N.W. 87TH AVENUE
MIAMI, FLORIDA 33178
(305) 513-3350
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

KEVIN P. FITZGERALD
CHIEF EXECUTIVE OFFICER AND PRESIDENT
NEFF CORP.
3750 N.W. 87TH AVENUE
MIAMI, FLORIDA 33178
(305) 513-3350
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

COPIES TO:

STEPHEN I. GLOVER, ESQ. WILLIAM M. HARTNETT, ESQ.
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON CAHILL GORDON & REINDEL
1001 PENNSYLVANIA AVENUE, N.W. 80 PINE STREET
WASHINGTON, D.C. 20004 NEW YORK, NEW YORK 10005
(202) 639-7000 (212) 701-3000

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.

--------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]

If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
--------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.

PROSPECTUS (SUBJECT TO COMPLETION)
ISSUED APRIL 30, 1998

6,700,000 SHARES

NEFF CORP.

CLASS A COMMON STOCK
---------------
OF THE 6,700,000 SHARES OF CLASS A COMMON STOCK BEING OFFERED HEREBY, 5,360,000
SHARES ARE BEING OFFERED INITIALLY IN THE UNITED STATES AND CANADA BY THE
U.S. UNDERWRITERS AND 1,340,000 SHARES ARE BEING OFFERED INITIALLY OUTSIDE
THE UNITED STATES AND CANADA BY THE INTERNATIONAL UNDERWRITERS. SEE
"UNDERWRITERS." ALL OF THE SHARES OFFERED HEREBY ARE BEING SOLD BY THE
COMPANY. PRIOR TO THIS OFFERING, THERE HAS BEEN NO PUBLIC MARKET FOR THE
CLASS A COMMON STOCK OF THE COMPANY. IT IS CURRENTLY ESTIMATED THAT THE
INITIAL PUBLIC OFFERING PRICE WILL BE BETWEEN $14 AND $16 PER SHARE. SEE
"UNDERWRITERS" FOR A DISCUSSION OF THE FACTORS TO BE CONSIDERED IN
DETERMINING THE INITIAL PUBLIC OFFERING PRICE.

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

THE CLASS A COMMON STOCK HAS BEEN APPROVED FOR LISTING ON THE NEW YORK STOCK
EXCHANGE UNDER THE SYMBOL "NFF."

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

SEE "RISK FACTORS" BEGINNING ON PAGE 10 FOR INFORMATION THAT
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

---------------
PRICE $ A SHARE
---------------

UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS(1) COMPANY(2)
------------- ---------------- ------------
PER SHARE ......... $ $ $
TOTAL (3) ......... $ $ $

- -------
(1) THE COMPANY HAS AGREED TO INDEMNIFY THE UNDERWRITERS AGAINST CERTAIN
LIABILITIES, INCLUDING LIABILITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
(2) BEFORE DEDUCTING EXPENSES PAYABLE BY THE COMPANY ESTIMATED AT $700,000.
(3) THE COMPANY HAS GRANTED TO THE U.S. UNDERWRITERS AN OPTION, EXERCISABLE
WITHIN 30 DAYS OF THE DATE HEREOF, TO PURCHASE UP TO AN AGGREGATE OF
1,005,000 ADDITIONAL SHARES AT THE PRICE TO PUBLIC LESS UNDERWRITING
DISCOUNTS AND COMMISSIONS FOR THE PURPOSE OF COVERING OVER-ALLOTMENTS, IF
ANY. IF THE U.S. UNDERWRITERS EXERCISE SUCH OPTION IN FULL, THE TOTAL
PRICE TO PUBLIC, UNDERWRITING DISCOUNTS AND COMMISSIONS AND PROCEEDS TO
COMPANY WILL BE $ , $ AND $ , RESPECTIVELY. SEE
"UNDERWRITERS."

---------------
THE SHARES ARE OFFERED, SUBJECT TO PRIOR SALE, WHEN, AS AND IF ACCEPTED BY
THE UNDERWRITERS NAMED HEREIN AND SUBJECT TO APPROVAL OF CERTAIN LEGAL MATTERS
BY CAHILL GORDON & REINDEL, COUNSEL FOR THE UNDERWRITERS. IT IS EXPECTED THAT
DELIVERY OF THE SHARES WILL BE MADE ON OR ABOUT , 1998 AT THE OFFICE OF
MORGAN STANLEY & CO. INCORPORATED, NEW YORK, N.Y., AGAINST PAYMENT THEREFOR IN
IMMEDIATELY AVAILABLE FUNDS.
---------------
MORGAN STANLEY DEAN WITTER

BT ALEX. BROWN

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

, 1998
<PAGE>

PHOTOGRAPHS OF CONSTRUCTION EQUIPMENT

COMPANY LOGO

2
<PAGE>

Certain statements contained in this Prospectus that are not related to
historical results are forward-looking statements. Actual results may differ
materially from those projected or implied in the forward-looking statements.
Factors that could cause or contribute to such differences include, but are not
limited to, those discussed under "Risk Factors," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business."
Further, certain forward-looking statements are based upon assumptions as to
future events that may not prove to be accurate. These forward-looking
statements involve risks and uncertainties including, but not limited to, those
set forth under "Risk Factors."

UNTIL , 1998 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE CLASS A COMMON STOCK, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
---------------
TABLE OF CONTENTS

PAGE
-----
Prospectus Summary ............................. 4
Risk Factors ................................... 10
Use of Proceeds ................................ 17
Dividend Policy ................................ 17
Capitalization ................................. 18
Dilution ....................................... 19
Unaudited Pro Forma Consolidated
Financial Data .............................. 20
Selected Consolidated Financial Data ........... 24
Management's Discussion and Analysis
of Financial Condition and
Results of Operations ....................... 26
Business ....................................... 33

PAGE
-----
Management ..................................... 43
Principal Stockholders ......................... 51
Certain Relationships and Transactions ......... 52
Description of Certain Indebtedness ............ 53
Description of Capital Stock ................... 54
Shares Eligible for Future Sale ................ 62
Underwriters ................................... 64
Certain United States Tax Considerations for
Non-United States Holders ................... 68
Legal Matters .................................. 71
Experts ........................................ 71
Additional Information ......................... 72
Index to Financial Statements .................. F-1

No person is authorized in connection with any offering made hereby to
give any information or to make any representation not contained in this
Prospectus and, if given or made, such information or representation must not
be relied upon as having been authorized by the Company or any Underwriter.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any security other than the shares of Class A Common Stock offered
hereby, nor does it constitute an offer to sell or solicitation of an offer to
buy any of the securities offered hereby to any person in any jurisdiction in
which it is unlawful to make such an offer or solicitation to such person.
Neither the delivery of this Prospectus nor any sale made in the Offering shall
under any circumstances imply that the information contained herein is correct
as of any date subsequent to the date hereof.
---------------
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE MARKET PRICE OF THE CLASS A COMMON
STOCK. SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE
OFFERING AND MAY BID FOR, AND PURCHASE, SHARES OF CLASS A COMMON STOCK IN THE
OPEN MARKET. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITERS."

3
<PAGE>

PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE READ
IN CONJUNCTION WITH, THE MORE DETAILED INFORMATION AND CONSOLIDATED FINANCIAL
STATEMENTS AND THE NOTES THERETO AND THE UNAUDITED PRO FORMA CONSOLIDATED
FINANCIAL DATA APPEARING ELSEWHERE IN THIS PROSPECTUS. UNLESS THE CONTEXT
OTHERWISE REQUIRES, ALL REFERENCES TO "NEFF" OR THE "COMPANY" INCLUDE NEFF
CORP. AND ITS WHOLLY OWNED SUBSIDIARIES, NEFF RENTAL, INC. ("NEFF RENTAL") AND
NEFF MACHINERY, INC. ("NEFF MACHINERY"). UNLESS THE CONTEXT OTHERWISE REQUIRES,
ALL REFERENCES TO GENERAL ELECTRIC CAPITAL CORPORATION ("GE CAPITAL") INCLUDE
ITS AFFILIATE GECFS, INC. UNLESS THE CONTEXT OTHERWISE REQUIRES, ALL REFERENCES
TO "COMMON STOCK" INCLUDE THE COMPANY'S CLASS A COMMON STOCK, PAR VALUE $.01
PER SHARE (THE "CLASS A COMMON STOCK"), AND THE COMPANY'S CLASS B SPECIAL
COMMON STOCK, PAR VALUE $.01 PER SHARE (THE "CLASS B COMMON STOCK"), AND
REFLECT AN 84.65 FOR 1.00 STOCK SPLIT FOR EACH CLASS OF COMMON STOCK TO BE
EFFECTED PRIOR TO THE COMPLETION OF THE OFFERING. UNLESS OTHERWISE INDICATED,
THE INFORMATION IN THIS PROSPECTUS ASSUMES THAT THE U.S. UNDERWRITERS'
OVER-ALLOTMENT OPTION IS NOT EXERCISED.

THE COMPANY

Neff is one of the largest and fastest growing equipment rental companies
in the United States, with 70 rental locations in 15 states. The Company rents
a wide variety of equipment, including backhoes, air compressors, loaders,
lifts and compaction equipment to construction and industrial customers. The
Company also acts as a dealer of new equipment on behalf of several nationally
recognized equipment manufacturers. In addition, the Company sells used
equipment, spare parts and merchandise and provides ongoing repair and
maintenance services. The Company has increased its total revenues from $67.3
million in 1995 to $142.0 million in 1997; pro forma for the Acquisitions (as
defined) and the Argentina Acquisition (as defined), the Company's total
revenues for 1997 were $255.6 million.

According to industry sources, the U.S. equipment rental industry grew
from approximately $600 million in revenues in 1982 to an estimated $18 billion
in 1997. This growth has been driven primarily by construction and industrial
companies that have increasingly outsourced equipment needs to reduce
investment in non-core assets and convert costs from fixed to variable. The
equipment rental industry is highly fragmented, with an estimated 17,000
equipment rental companies in the United States. As a result, the Company
believes that there are substantial consolidation opportunities for
well-capitalized operators such as the Company. According to RENTAL EQUIPMENT
REGISTER and studies prepared by Manfredi & Associates, Inc. on the size of the
equipment rental market, no single company's revenues represented more than 2%
of total market revenues in 1996. Relative to smaller competitors, the Company
has several advantages, including increased purchasing power, larger
inventories to service larger accounts and the ability to transfer equipment
among rental locations in response to changing patterns of customer demand.

COMPETITIVE STRENGTHS

The Company believes it has several competitive strengths which provide it
with the opportunity for continued growth and increased profitability.

4
<PAGE>

Company increased its equipment rental locations from eight to 68 and expanded
its rental fleet from $62 million to $321 million based on original cost. The
Company believes its dealership operations complement its equipment rental
operations by providing it with competitive advantages over competitors which
only rent equipment. These advantages include the ability to achieve favorable
pricing by combining equipment purchases for its dealership and rental fleets;
the reduction of costs in certain locations by sharing service, maintenance and
administrative personnel; and better knowledge of certain local markets by
pooling management information. In addition, management believes the Company's
size and geographic diversity help insulate it from regional economic
downturns. The Company's efforts to improve its market position have caused it
to increase its debt and incur significant operating expenses, and thus have
adversely affected its short-term cash flow and net income. The Company
believes, however, that these efforts are essential to its future performance.
See "Risk Factors--Risks Inherent in Growth Strategy," "Risk
Factors--Dependence on Additional Capital for Future Growth; Restrictions Under
Terms of Indebtedness" and "Risk Factors--Substantial Leverage."

HIGH QUALITY RENTAL FLEET. Management believes the Company has one of the
newest, most comprehensive and well-maintained rental fleets in the equipment
rental industry. As of December 31, 1997, pro forma for the Richbourg
Acquisition, the average age of the Company's rental fleet was approximately 23
months. The Company makes ongoing capital investment in new equipment, engages
in regular sales of new equipment and conducts an advanced preventative
maintenance program. Management believes this maintenance program increases
fleet utilization, extends the useful life of equipment and produces higher
resale values.

EXCELLENT CUSTOMER SERVICE. The Company differentiates itself from its
competitors by providing high quality, responsive service to its customers.
Service initiatives include (i) reliable on-time equipment delivery directly to
customers' job sites, (ii) on-site repairs and maintenance of rental equipment
by factory trained mechanics, generally available 24 hours a day, seven days a
week and (iii) ongoing training of an experienced sales force to consult with
customers regarding their equipment needs.

STATE-OF-THE-ART MANAGEMENT INFORMATION SYSTEM. The Company has developed
a customized, state-of-the-art management information system capable of
monitoring operations at up to 300 sites. The Company uses this system to
maximize fleet utilization and determine the optimal fleet composition by
market. The system links all of the Company's 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 the Company's entire rental fleet
for needed equipment, quickly determine the closest location of such equipment,
and arrange for delivery to the customer's work site, thus maximizing equipment
utilization.

EXPERIENCED MANAGEMENT TEAM. Since 1995, the Company has significantly
increased the quality and depth of its management team to help oversee its
growth strategy. Neff's senior management team has extensive experience in the
equipment rental industry and its seven regional managers have, on average, 17
years of experience and substantial knowledge of the local markets served
within their regions. The Company believes that its management team has the
ability to continue the Company's strong growth as well as manage the Company
on a much larger scale. The Company is not dependent on recruiting additional
operating, acquisition, finance or other personnel to implement its growth
strategy. The Mas family, the majority owner of the Company, is also the
majority owner of MasTec, Inc., a public company engaged in the
telecommunications construction business with operations in South America.
Management believes the Mas family and GE Capital, the Company's other major
stockholder, will be valuable to the Company in identifying and evaluating
acquisitions in both North and South America.

5
<PAGE>

GROWTH STRATEGY

The Company's objective is to increase revenue, cash flow and
profitability by building and maintaining a leading market position in the
equipment rental industry. Key elements of the Company's growth strategy
include:

ACQUIRE EQUIPMENT RENTAL COMPANIES. Management intends to expand the
Company through acquisitions of equipment rental companies and believes there
are a significant number of acquisition opportunities in North and South
America which would complement the Company's existing operations. After
completing an acquisition, the Company generally integrates the operations of
the acquired company into its management information system, consolidates
equipment purchasing and resale functions and centralizes fleet management as
quickly as possible while assuring consistent, high-quality service to the
acquired company's customers. Since July 1997, the Company has made two
strategic acquisitions which have more than doubled the Company's number of
rental locations, significantly enhanced the Company's geographic presence and
further diversified the Company's customer base. The Company has also entered
into a letter of intent to acquire 51% of the outstanding stock of Sullair
Argentina Sociedad Anonima ("S.A. Argentina"), a leading equipment rental
company and dealer of new equipment in South America, and the Company has four
letters of intent outstanding to acquire the assets of additional equipment
rental companies in the United States. See "--Recent Acquisitions." To date,
the Company has financed its acquisitions primarily with debt, which has
resulted in increased interest expense. See "Risk Factors--Substantial
Leverage."

INCREASE PROFITABILITY OF RECENTLY OPENED RENTAL LOCATIONS. Since March 1,
1995, the Company has opened 23 start-up rental equipment locations including
11 locations in 1997. Management believes the Company's financial performance
does not yet fully reflect the benefit of these rental locations. The Company
incurs significant expenses in connection with the opening of new locations.
See "Risk Factors--Risks Inherent in Growth Strategy." Based on the Company's
historical experience, a new equipment rental location tends to realize
significant increases in revenues, cash flow and profitability during the first
three years of operation as more prospective customers become aware of its
operation and as the rental equipment fleet is customized to local market
demand. Because there is relatively little incremental operating expense
associated with such revenues, cash flow and profitability increase
significantly as a rental location matures. Although the Company intends to
expand primarily through acquisitions, management intends to open additional
start-up locations in markets where the Company has not been able to identify
attractive acquisition candidates. The Company plans to open five to seven
additional branches in 1998.

INCREASE FLEET AT EXISTING LOCATIONS. Management believes it can
capitalize on the demand for rental equipment in the markets it serves and
increase revenues by increasing the size of the rental fleet and adding new
product lines at existing locations. Management believes that this strategy
allows the Company to attract new customers and serve as a single source
supplier for its customers. Because the start-up expenditures associated with
increasing the fleet and expanding product lines at existing locations are
relatively modest, these investments typically generate higher and faster
returns than investments in new locations.

SELECTIVE EXPANSION OF DEALERSHIP OPERATIONS. The Company intends to
selectively expand its dealership operations. The Company believes it can
realize significant economies of scale by expanding its dealership operations
in areas where it has already established equipment rental operations. The
Company's distributor relationships and the combined purchasing volume of its
dealership and rental operations allow it to acquire inventory at favorable
prices and terms. The Company's dealership operations also allow it to reduce
overhead costs by sharing service, maintenance and administrative personnel
with its rental operations, as well as generating better knowledge of local
markets through the sharing of information. The Company also intends to expand
its dealership operations to areas where it does not yet have equipment rental
operations.

6
<PAGE>

RECENT ACQUISITIONS

On August 1, 1997, the Company acquired, for a purchase price of $63.6
million, Industrial Equipment Rentals, Inc., the parent company of Buckner
Rental Service, Inc. ("Buckner," such acquisition, the "Buckner Acquisition").
Buckner is a leading provider of rental equipment in the Gulf Coast region with
26 locations in Texas, Louisiana, Mississippi and Alabama. During 1997, Buckner
served over 39,500 customers in the oil and gas, industrial/petrochemical and
construction industries. The Buckner Acquisition gives the Company a greater
presence in the Gulf Coast region and further diversifies the Company's
customer base by significantly increasing its strength in the industrial
sector.

Effective January 1, 1998, the Company acquired, for a purchase price of
$100 million, substantially all of the assets of Richbourg's Sales and Rentals,
Inc. ("Richbourg," such acquisition, the "Richbourg Acquisition" and, together
with the Buckner Acquisition, the "Acquisitions"). Richbourg is a leading
provider of rental equipment in the Southeast region with 15 locations in
Florida, North Carolina, South Carolina and Georgia. During 1997, Richbourg
served over 15,500 customers in the industrial and construction industries. The
Richbourg Acquisition gives the Company a greater presence in the Southeast
region and additional customers in the industrial sector.

In March 1998, the Company entered into a letter of intent to acquire 51%
of the outstanding stock of S.A. Argentina (such acquisition, the "Argentina
Acquisition") for $28 million and earn-out payments equal to 65% of S.A.
Argentina's net income for 1998 and 1999, with such earn-out payments not to
exceed $10 million in the aggregate. S.A. Argentina rents and sells industrial
and construction equipment throughout South America, including Argentina,
Brazil, Uruguay, Paraguay, Chile and Bolivia. S.A. Argentina's revenues for
1997 were approximately $57.3 million. S.A. Argentina's principal operations
are located in Buenos Aires, Argentina; it also has locations in Cordoba and
Rosario, Argentina and an assembly plant in San Luis, Argentina. The current
management of S.A. Argentina will continue to oversee the day-to-day management
of S.A. Argentina. The Argentina Acquisition will enable the Company to expand
internationally and take advantage of the opportunities for equipment rental
businesses in the emerging South American market. The Argentina Acquisition is
subject to a number of closing conditions, including the execution of a
definitive purchase agreement, and there can be no assurance that the Argentina
Acquisition will be consummated. See "Risk Factors--Risks Associated with the
Argentina Acquisition," and "Business--Acquisition Strategy."

In addition, in February and March 1998, the Company entered into letters
of intent to acquire the assets of four equipment rental companies with
aggregate 1997 revenues of approximately $19 million. These businesses have a
total of five equipment rental locations in Florida, California and Texas. Each
of these acquisitions is subject to a number of closing conditions, including
the execution of definitive purchase agreements, and there can be no assurance
that these acquisitions will be consummated.

RECENT OPERATING RESULTS

For the three months ended March 31, 1998, the Company had revenues of
$62.4 million, income from operations of $6.3 million, a net loss of $1.9
million and EBITDA of $19.4 million. For the three month ended March 31, 1997,
the Company had revenues of $24.3 million, income from operations of $1.5
million, a net loss of $0.1 million and EBITDA of $5.7 million. The increase in
the Company's net loss for the first three months of 1998 compared to the same
period in 1997 is primarily attributable to the opening of 15 new locations
between March 31, 1997 and March 31, 1998. The Company incurs significant
start-up costs in advance of realizing the full revenue and profitability
potential of new locations.

7
<PAGE>

COMPANY HISTORY

The Company was founded in 1988 and is owned by the Mas family, GE Capital
and Santos Fund I, L.P., a Texas limited partnership ("Santos") which is owned
by the Mas family and Kevin P. Fitzgerald, the Chief Executive Officer and
President of the Company. The Mas family is also the principal stockholder of
MasTec, Inc., a public company traded on the New York Stock Exchange and one of
the largest providers of telecommunications-related engineering and
construction services in the United States, South America and Europe. In 1995,
the Company entered into a strategic partnership with GE Capital to take
advantage of growth and consolidation opportunities in the equipment rental
industry. See "Certain Relationships and Transactions."

The Company's principal executive offices are located at 3750 N.W. 87th
Avenue, Miami, Florida, 33178 and its telephone number is (305) 513-3350.

THE OFFERING

<TABLE>
<S> <C>
Class A Common Stock Offered by the Company
U.S. Offering ........................... 5,360,000 shares
International Offering .................. 1,340,000 shares
Total .................................. 6,700,000 shares
Common Stock to be outstanding immediately
after the Offering
Class A Common Stock .................... 16,065,350 shares(1)
Class B Common Stock(2) ................. 5,100,000 shares(2)
Total .................................. 21,165,350 shares
Use of Proceeds to the Company ............ The net proceeds of the
Offering will be used for the
repayment of indebtedness. See
"Use of Proceeds".
New York Stock Exchange Symbol ............ NFF
</TABLE>

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

(1) Excludes (i) 240,000 additional shares of Class A Common Stock reserved for
issuance in connection with options granted pursuant to the Company's
Incentive Stock Plan, (ii) 657,220 additional shares of Class A Common
Stock reserved for issuance in connection with options granted to Kevin P.
Fitzgerald, the Chief Executive Officer and President of the Company,
(688,299 shares if the U.S. Underwriters' over-allotment option is
exercised) and (iii) 84,650 additional shares of Class A Common Stock
reserved for issuance in connection with options granted to Robert G.
Warren, Senior Vice President of Neff Machinery. See "Management--Options
Grants and Exercises."

(2) The holders of Class A and Class B Common Stock are entitled to one vote
per share on all matters submitted to a vote of the stockholders. Upon the
liquidation, dissolution or winding up of the Company, after satisfaction
of all of the Company's liabilities and the payment of the liquidation
preference of any preferred stock that may be outstanding, the holder of
each share of Class B Common Stock is entitled to receive before any
distribution or payment is made upon any other capital stock of the
Company, an amount in cash equal to $11.67.

RISK FACTORS

See "Risk Factors" for information concerning certain factors that should
be considered by prospective investors.

8
<PAGE>

SUMMARY CONSOLIDATED FINANCIAL DATA

<TABLE>
<CAPTION>
PRO FORMA AS
YEAR ENDED DECEMBER 31, ADJUSTED(2)
---------------------------------------------------------------------- -------------
1993(1) 1994 1995 1996 1997 1997
------------ ------------ ----------- ----------- ------------ -------------
(IN THOUSANDS, EXCEPT PER SHARE AND LOCATION DATA)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Total revenues ..................... $ 43,834 $ 49,526 $ 67,254 $ 95,013 $ 142,019 $255,633
Gross profit(3) .................... 10,549 14,711 17,972 25,320 43,274 79,529
Selling, general and administrative
expenses ......................... 6,078 8,493 10,956 18,478 30,129 47,541
Officer stock option
compensation(4) .................. -- -- -- -- 4,400 4,400
Income from operations ............. 3,857 5,993 6,100 5,410 6,197 21,193
Income (loss) before extraordinary
items(5) ......................... 1,663 2,712 1,834 (1,388) (6,393) (4,088)
Income (loss) before extraordinary
items per share .................. .20 .32 .22 ( .16) ( .76) ( .19)
Weighted average common shares
outstanding(6) ................... 8,465 8,465 8,465 8,465 8,465 21,165
BALANCE SHEET DATA (END OF PERIOD):
Net book value of rental
equipment ........................ $ 18,418 $ 31,331 $ 47,989 $ 76,794 $ 184,787 $257,132
Total assets ....................... 30,761 47,722 68,816 109,118 280,790 452,334
Total debt ......................... 27,747 38,603 48,345 58,250 226,203 275,071
Redeemable preferred stock ......... -- -- 11,430 46,299 53,747 10,649
Total common stockholders' equity
(deficit) ........................ 571 4,205 (1,931) (7,508) (24,735) 111,279
OTHER DATA:
Adjusted EBITDA(7) ................. $ 10,255 $ 15,129 $ 18,763 $ 26,695 $ 37,635 $ 77,592
Adjusted EBITDA margin(8) .......... 23.4% 30.5% 27.9% 28.1% 26.5% 30.4%
Rental fleet purchases ............. $ 21,353 $ 31,185 $ 52,795 $ 86,886 $ 143,999 N/A
Number of rental locations
(end of period) .................. 5 6 8 16 53 71
</TABLE>

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

(1) The consolidated balance sheet data and statement of operations data for
the year ended December 31, 1993 is derived from financial statements of
the Company's two wholly-owned subsidiaries, Neff Rental and Neff
Machinery, each of which was individually audited by independent certified
public accountants.
(2) The pro forma as adjusted financial data are derived from the Company's
Unaudited Pro Forma Consolidated Financial Data appearing elsewhere in
this Prospectus. The Unaudited Pro Forma Consolidated Financial Data were
prepared by the Company to illustrate the estimated effects of the
Offering, the Argentina Acquisition, the Buckner Acquisition, the
Richbourg Acquisition and related transactions described in the Notes to
the Unaudited Pro Forma Consolidated Financial Data as if they had
occurred as of January 1, 1997 for purposes of the unaudited pro forma
consolidated statements of operations and as of December 31, 1997 for
purposes of the unaudited pro forma consolidated balance sheets.
(3) Gross profit for 1996 and 1997 reflect the Company's change in depreciation
policy to recognize extended estimated service lives and increased
residual values of its rental equipment. See the Consolidated Financial
Statements and the Notes thereto appearing elsewhere in this Prospectus.
(4) Officer stock option compensation expense represents a noncash charge with
respect to the change in estimated market value of the shares to be issued
to Kevin P. Fitzgerald under the Option Agreement (as defined).
(5) Prior to December 26, 1995, the Company operated as a Subchapter S
corporation under the provisions of the Internal Revenue Code. Income
(loss) before extraordinary items for 1993, 1994 and 1995 is restated to
reflect what the data would have been if the Company had Subchapter C
status in these years.
(6) Based on the number of shares of Common Stock which will be outstanding
upon completion of the Offering.
(7) Adjusted EBITDA represents income from operations plus depreciation and
amortization and officer stock option compensation expenses. Adjusted
EBITDA is not intended to represent cash flow from operations and should
not be considered as an alternative to operating or net income computed in
accordance with GAAP, as an indicator of the Company's operating
performance, as an alternative to cash flows from operating activities (as
determined in accordance with GAAP) or as a measure of liquidity. The
Company believes that Adjusted EBITDA is a standard measure commonly
reported and widely used by analysts and investors as a measure of
profitability for companies with significant depreciation and amortization
expense. However, not all companies calculate Adjusted EBITDA using the
same methods; therefore, the Adjusted EBITDA figures set forth above may
not be comparable to Adjusted EBITDA reported by other companies.
(8) Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of total
revenues.

9
<PAGE>

RISK FACTORS

PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK
FACTORS, IN ADDITION TO THE OTHER INFORMATION SET FORTH IN THIS PROSPECTUS, IN
EVALUATING AN INVESTMENT IN THE CLASS A COMMON STOCK OFFERED HEREBY.

RISKS INHERENT IN GROWTH STRATEGY

The Company has recently accelerated its growth, expanding the rental
equipment fleet at existing locations and adding eight locations in 1996 and 37
locations in 1997. The Company intends to continue this rapid growth over the
next five years by continuing to make acquisitions, expand its rental equipment
fleet at existing locations and open several new locations each year. There can
be no assurance that the Company will be able to identify acquisition
candidates and attractive new locations or obtain financing for acquisitions
and internal expansion on satisfactory terms, or at all. The Company's growth
strategy presents the risks inherent in assessing the value, strengths and
weaknesses of growth opportunities, in evaluating the costs and uncertain
returns of expanding the operations of the Company, and in integrating
acquisitions with existing operations. The Company expects that its growth
strategy will affect short-term cash flow and net income as the Company
increases the amount of its indebtedness and incurs expenses to open new
locations, make acquisitions and expand the rental fleet. There can be no
assurance that the Company will successfully expand, that any acquired
businesses will be successfully integrated into the Company's operations or
that any expansion will result in profitability. The Company's anticipated
growth will place significant demands on the Company's management and its
operational, financial and marketing resources. In connection with acquisitions
and the start-up of new branches, the Company anticipates experiencing growth
in the number of its employees, the scope of its operating and financial
systems and the geographic area of its operations. The Company believes this
growth will increase the operating complexity of the Company and the level of
responsibility exercised by both existing and new management personnel. To
manage this expected growth, the Company intends to invest further in its
operating and financial systems and to continue to expand, train and manage its
employee base. There can be no assurance that the Company will be able to
attract and retain qualified management and employees or that the Company's
current operating and financial systems and controls will be adequate as the
Company grows or that any steps taken to improve such systems and controls will
be sufficient. See "Business--Growth Strategy."

DEPENDENCE ON ADDITIONAL CAPITAL FOR FUTURE GROWTH; RESTRICTIONS UNDER TERMS OF
INDEBTEDNESS

The Company's ability to remain competitive, sustain its growth and expand
rental operations through start-up locations and acquisitions largely depends
on its access to capital. The Company must make ongoing capital expenditures to
maintain the age and condition of its rental equipment fleet in order to
provide its customers with high-quality equipment. Historically, the Company
has financed capital expenditures, start-up locations and acquisitions
primarily through the incurrence of indebtedness, cash flow from operations
and, to a lesser extent, the issuance of equity securities. To implement its
growth strategy and meet its capital needs, the Company may in the future issue
additional equity securities or may incur additional indebtedness. Such
additional indebtedness may make the Company more vulnerable to economic
downturns and may limit its ability to withstand competitive pressures. There
can be no assurance that additional capital, if and when required, will be
available on terms acceptable to the Company, or at all. Failure by the Company
to obtain sufficient additional capital in the future could force the Company
to curtail its growth or delay capital expenditures, which could have a
material adverse effect on the Company and the market price of the Class A
Common Stock.

The Company has entered into a commitment letter with Bankers Trust
Company to amend and restate the Company's existing $250 million revolving
credit facility (the "Senior Credit Facility," and, as amended and restated,
the "New Credit Facility"). The Company expects the New Credit Facility will be
in place upon consummation of the Offering.

The Company's ability to finance future acquisitions, start-ups and
internal growth is currently limited by the covenants contained in the Senior
Credit Facility, including a number of covenants that,

10
<PAGE>

among other things, restrict the ability of the Company to dispose of assets or
merge, incur debt, pay dividends, repurchase or redeem capital stock, create
liens, make capital expenditures and make certain investments or acquisitions
and otherwise restrict corporate activities. The Senior Credit Facility also
contains, among other covenants, requirements that the Company maintain
specified financial ratios, including minimum cash flow levels and interest
coverage. The Company expects the New Credit Facility will contain similar
covenants and requirements. At December 31, 1997, the Company was not in
compliance with the minimum EBITDA covenant, as defined in the Senior Credit
Facility. For the year ended December 31, 1997 the minimum EBITDA calculation
was $44.8 million but was required to be $45.9 million. The lenders under the
Senior Credit Facility have waived this non-compliance.

The Company expects to offer approximately $150 million in debt securities
(the "Notes") for sale to qualified investors concurrently with this Offering
(the "Private Debt Offering.") There can be no assurance that the Private Debt
Offering will be consummated. This Offering is not conditioned upon the
consummation of the Private Debt Offering. If the Company were to consummate
the Private Debt Offering, the indenture governing the Notes is likely to
contain certain restrictive covenants that will affect, and in some cases will
significantly limit or prohibit, among other things, the ability of the Company
to pay dividends, make investments, engage in transactions with stockholders
and affiliates, issue capital stock, incur indebtedness, create liens, sell
assets and engage in mergers and consolidations. As a result of these
covenants, the ability of the Company and its subsidiaries to respond to
changing business and economic conditions and to secure additional financing
may be significantly restricted, and the Company may be prevented from engaging
in transactions, including acquisitions, that might be considered important to
the Company's growth strategy or otherwise beneficial to the Company. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources," "Business--Growth Strategy" and
"Description of Certain Indebtedness."

SUBSTANTIAL LEVERAGE

The Company has a substantial amount of indebtedness. As of March 31,
1998, on a pro forma basis after giving effect to the Richbourg Acquisition,
the Argentina Acquisition, the Offering and the Private Debt Offering and the
application of the estimated net proceeds therefrom, the Company would have had
total indebtedness of approximately $314.6 million and would have had
approximately $94.0 million of availability under the Senior Credit Facility.

The degree to which the Company is leveraged could have important
consequences to holders of the Class A Common Stock including, but not limited
to, the following: (i) the Company's ability to obtain additional financing in
the future for working capital, capital expenditures, acquisitions or general
corporate or other purposes may be limited; (ii) a substantial portion of the
Company's cash flow from operations will be dedicated to the payment of the
principal of, and interest on, its indebtedness; (iii) the agreements governing
the Company's long-term indebtedness will contain certain restrictive financial
and operating covenants that could limit the Company's ability to compete and
expand; and (iv) the Company's substantial leverage may make it more vulnerable
to economic downturns, limit its ability to withstand competitive pressures and
reduce its flexibility in responding to changing business and economic
conditions. See "Capitalization," "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources," "Description of Certain Indebtedness" and the Consolidated
Financial Statements and the Notes thereto included elsewhere in this
Prospectus.

GENERAL ECONOMIC CONDITIONS; REGIONAL CONDITIONS AND CYCLICALITY

The Company's business is affected by general economic and competitive
conditions, including national, regional and local slowdowns in construction
activity. The Company currently operates in 15 states located throughout the
southern and western United States. As a result, the Company's operating
results may be adversely affected by events or conditions, such as regional
economic slowdowns, adverse weather conditions and other factors, in the areas
in which it operates.

11
<PAGE>

DEPENDENCE ON EQUIPMENT MANUFACTURERS

The Company sells John Deere, Bomag and Terex Americas construction and
industrial equipment through dealership agreements. The dealership agreements
may be terminated by either party upon 120 days' written notice, or immediately
by the equipment manufacturer for cause, which generally includes, among other
things, default by Neff Machinery under any security agreement between Neff
Machinery and the equipment manufacturer, dissolution or liquidation of Neff
Machinery, or a significant change in the control, ownership or capital
structure of Neff Machinery without the equipment manufacturer's prior written
consent. See "Business--Dealership Agreements." There can be no assurance that
the Company will be able to continue its current, or obtain additional,
dealership agreements with any of the manufacturers.

In April 1998, the Company and John Deere entered into an agreement
providing that John Deere may terminate the John Deere dealership agreements if
the Mas family, Kevin Fitzgerald, Santos and Santos Capital do not own at least
30% of the equity interests in the Company or if GE Capital attempts to obtain
control of or exercise influence over the Company. To resolve issues with John
Deere relating to the size of GE Capital's equity interest in the Company, GE
Capital and the Company have entered into a standstill agreement dated as of
April 29, 1998 (the "Standstill Agreement") providing that, subject to certain
exceptions, GE Capital and its affiliates will maintain their equity interest
in the Company below 25% during the period ending October 29, 1999, and will
maintain their equity interest below 20% during the period from October 29,
1999 until Neff Machinery is no longer a dealer for John Deere or certain other
conditions are satisfied. Santos has agreed to exercise its option to acquire
Company stock from GE Capital if necessary to reduce GE Capital's equity
ownership to these levels. The Company's operating results could be materially
adversely impacted if the John Deere dealership agreements were terminated for
any reason.

RECENT NET LOSSES

The Company incurred net losses of $2.2 million and $6.8 million in 1996
and 1997, respectively. There can be no assurance that the Company will operate
profitably in the future or have earnings or cash flow sufficient to comply
with the financial covenants to which it is subject or to cover its fixed
charges.

COMPETITION

The equipment rental and sales industries are highly competitive. The
Company's competitors include large national rental companies, regional
corporations, smaller independent businesses, and equipment vendors and dealers
who both sell and rent equipment to customers. Some of the Company's
competitors have greater financial resources, are more geographically diverse,
and have greater name recognition than the Company. There can be no assurance
that the Company will not encounter increased competition from existing
competitors or new market entrants, such as manufacturers, that may be
significantly larger and have greater financial and marketing resources than
the Company. If existing or future competitors reduce prices to gain or retain
market share and the Company must also reduce prices to remain competitive, the
Company's operating results would be adversely affected. Additionally, existing
or future competitors may seek to compete with the Company for start-up
locations or acquisition candidates, which may have the effect of increasing
acquisition prices and reducing the number of suitable acquisition candidates
or expansion locations. See "Business-- Competition."

SEASONALITY AND QUARTERLY FLUCTUATIONS IN REVENUES AND OPERATING RESULTS

Historically, the Company's revenues and operating results have varied
throughout the year and are expected to continue to fluctuate in the future.
These fluctuations have been due to a number of factors, including: (i) general
economic conditions in the Company's markets; (ii) the timing of start-up
locations and acquisitions and related costs; (iii) the effectiveness of
integrating start-up locations and acquired businesses; (iv) rental patterns of
the Company's customers; (v) price changes in response to

12
<PAGE>

competitive factors; and (vi) changes in manufacturers' incentive programs. The
Company incurs various costs in establishing or integrating start-ups or newly
acquired locations, and the profitability of a new location is generally
expected to be lower in the initial months of its operation.

Construction equipment sales and rental businesses often experience a
slowdown in demand during the winter months when adverse weather conditions
affect construction activity. To date, seasonal demand fluctuations have not
materially affected the Company's operating results. However, as the Company
expands geographically, seasonal demand fluctuations may lower operating
results in the first and fourth quarters.

RISKS ASSOCIATED WITH THE ARGENTINA ACQUISITION

The letter of intent with respect to the Argentina Acquisition provides
that the existing stockholders of S.A. Argentina will have the option to
require the Company to purchase all of the remaining shares of S.A. Argentina
(the "Put Option"). The Put Option will be exercisable for a period of 30
months commencing 30 months after the consummation of the Argentina Acquisition
(the "Put Period"). The Put Option may also become exercisable before and/or
after the Put Period if the Company makes a decision affecting S.A. Argentina
with respect to certain matters, including, for example, mergers and
acquisitions, strategic alliances or dividends, with which the existing
stockholders of S.A. Argentina disagree. The exercisability of the Put Option
may be subject to certain additional restrictions imposed by the terms of the
Company's indebtedness on the Company's ability to make acquisitions and incur
additional indebtedness. The purchase price for the shares subject to the Put
Option shall be the fair market value of such shares as determined by an
independent appraiser. There can be no assurance that the Put Option will be
exercised at a time when such exercise will not have a material adverse effect
on the Company.

If the Argentina Acquisition is consummated, the Company will be subject
to the risks and uncertainties attendant to doing business in countries which
may be exposed to, or may have recently experienced, economic or governmental
instability. The South American operations, earnings, asset values and
prospects of the Company may be materially adversely affected by developments
with respect to inflation, interest rates, currency fluctuations, governmental
policies, price and wage controls, exchange control regulations, taxation,
expropriation, social instability and other political or economic developments
in or affecting the countries in which the Company may operate.

In addition, there can be no assurance that the Company will be able to
obtain the financing necessary to consummate the Argentina Acquistion on terms
favorable to the Company or at all.

LIABILITY AND INSURANCE

The Company's business exposes it to possible claims for personal injury
or death resulting from the use of equipment rented or sold by the Company and
from injuries caused in motor vehicle accidents in which Company delivery and
service personnel are involved. The Company carries comprehensive insurance
subject to a deductible at a level it believes is sufficient to cover existing
and future claims. There can be no assurance that existing or future claims
will not exceed the level of the Company's insurance or that such insurance
will continue to be available on economically reasonable terms, or at all.

ENVIRONMENTAL AND SAFETY REGULATION

13
<PAGE>

substances and generated or disposed of wastes which are or may be considered
hazardous, and the Company may incur liability in connection therewith.
Moreover, there can be no assurance that environmental and safety requirements
will not become more stringent or be interpreted and applied more stringently
in the future. Such future changes or interpretations, or the identification of
adverse environmental conditions currently unknown to the Company, could result
in additional environmental compliance or remediation costs to the Company.
Such compliance and remediation costs could be material to the Company's
financial condition or results of operations. See "Business--Environmental and
Safety Regulation."

DEPENDENCE ON SENIOR MANAGEMENT

The Company is managed by a small number of key executive officers. The
loss of the services of certain of these key executives could have a material
adverse effect on the Company. The Company presently does not maintain any key
man life insurance policies on any of its officers. The Company's success also
depends on its ability to hire and retain additional qualified management
personnel. There can be no assurance that the Company will be able to hire and
retain such personnel. See "Management."

CONTROLLING STOCKHOLDERS

The Company is controlled by the Mas family and GE Capital. Jorge Mas, the
Company's Chairman, his brothers, Juan Carlos Mas and Jose Ramon Mas, and
Santos, a limited partnership controlled by the Mas family and Mr. Fitzgerald,
beneficially own all of the Company's outstanding Class A Common Stock, which
represents 66% of the fully diluted equity of the Company prior to the Offering
and 46% of the fully diluted equity of the Company upon completion of the
Offering. GE Capital owns Class B Common Stock which is convertible into Class
A Common Stock that represents 34% of the fully diluted equity of the Company
prior to the Offering and 23% of the fully diluted equity of the Company upon
completion of the Offering. The holders of a majority of the Series A
Cumulative Redeemable Preferred Stock, par value $.01 per share, of the
Company, (the "Series A Preferred Stock"), voting separately as a single class
in the election of directors of the Company, with each share of Series A
Preferred Stock entitled to one vote, are entitled to elect one director to
serve on the Company's Board of Directors. Upon the Company's failure to pay
certain dividends on the Series A Preferred Stock, the holders thereof have the
right to elect up to five additional directors to the Company's Board of
Directors. See "Description of Capital Stock--Preferred Stock." GE Capital owns
all of the issued and outstanding Series A Preferred Stock and, therefore, is
entitled to elect one director to the Company's Board of Directors. The Company
expects to redeem the Series A Preferred Stock with the proceeds of the Private
Debt Offering. See "Capitalization." Santos Capital Advisers, Inc. ("Santos
Capital"), a Florida corporation owned by the Mas family and Mr. Fitzgerald,
has an option to acquire 1.5 million shares of Common Stock from GE Capital;
these shares represent 10% of the fully diluted equity of the Company prior to
the Offering and 7% of the fully diluted equity of the Company upon completion
of the Offering. As a result, the Mas family, and Mr. Fitzgerald are able to
exercise a controlling influence over the outcome of matters submitted to the
Company's stockholders for approval and will have the power to delay, defer or
prevent a change in control of the Company. In addition, pursuant to an Amended
and Restated Stockholders' Agreement by and among the Company, GE Capital,
Jorge Mas, Jose Ramon Mas, Juan Carlos Mas, Mr. Fitzgerald, Santos Capital and
Santos, if GE Capital transfers Common Stock representing 15% or more of the
equity of the Company to a third party (the "Transferee"), the Company's Board
of Directors will increase from six to seven members and the Transferee will be
entitled to designate the additional director. At each meeting of the
stockholders of the Company held for the purpose of electing the class of
directors of which the director designated by the Transferee is a member, the
parties to the Stockholders Agreement, in accordance with such agreement, will
cast their votes so as to cause such designee to be elected as a director. In
accordance with the Standstill Agreement, GE Capital and its Affiliates (as
defined in the Standstill Agreement) must not make any attempt to exercise
control over the Company and all investments in

<PAGE>

the Company by such entities must remain solely passive for the duration of
such investments. See "Principal Stockholders" and "Certain Relationships and
Transactions--GE Capital, Santos and Santos Capital."

SHARES ELIGIBLE FOR FUTURE SALE

Immediately following the consummation of the Offering, the Company will
have outstanding 16,065,350 shares of Class A Common Stock (17,070,350 shares
outstanding if the U.S. Underwriters' over-allotment option is exercised in
full), including 9,365,350 outstanding shares of Class A Common Stock
beneficially owned by existing stockholders. The 6,700,000 shares of Class A
Common Stock to be sold pursuant to the Offering (7,705,000 if the U.S.
Underwriters' over-allotment option is exercised in full) will be eligible for
sale without restriction under the Securities Act of 1933, as amended (the
"Securities Act"), in the public market after the consummation of the Offering
by persons other than affiliates of the Company. Sales of shares by
"affiliates" of the Company as the term is defined in Rule 144 under the
Securities Act ("Affiliates") will be subject to Rule 144. The Company and all
existing common stockholders have agreed with the Underwriters not to offer,
sell or otherwise dispose of any shares of Class A Common Stock (other than
issuances by the Company pursuant to the employee stock option plan) for a
period of 180 days after the date of the Prospectus without the prior written
consent of Morgan Stanley & Co. Incorporated.

GE Capital holds 5,100,000 shares of Class B Common Stock which it may
exchange for 5,100,000 shares of Class A Common Stock. Upon such exchange, GE
Capital has the right to demand registration of its shares of Class A Common
Stock under the Securities Act. The Mas family, and Santos have the right to
demand registration of their shares of Class A Common Stock under the
Securities Act. Mr. Fitzgerald and Santos Capital each also have the right to
demand registration of shares he or it may acquire from the exercise of certain
options. Registration of any shares held by the Mas family, Santos, Santos
Capital, Mr. Fitzgerald or GE Capital would permit the sale of these shares
without regard to the restrictions of Rule 144. These parties have agreed to
waive their right to exercise their registration rights in connection with the
Offering and for 180 days thereafter. See "Description of Capital Stock--Common
Stock--Registration Rights."

Based on shares outstanding as of April 27, 1998, following the expiration
or waiver of the foregoing restrictions on dispositions and any applicable
holding periods under Rule 144, 9,365,350 outstanding shares of Class A Common
Stock owned by existing stockholders will be available for sale in the public
market pursuant to Rule 144 (including the volume and other limitations set for
therein). The Company intends to register on Form S-8 1,741,870 shares of Class
A Common Stock reserved for issuance upon exercise of options granted to
certain employees under the Company's Incentive Stock Plan, and shares of Class
A Common Stock reserved for issuance upon the exercise of certain options
granted to Mr. Fitzgerald and Robert G. Warren, the Senior Vice President of
the Company. Options to purchase 741,870 shares granted to Mr. Fitzgerald and
Mr. Warren and other employees are currently exercisable or will be exercisable
upon completion of the Offering.

No prediction can be made as to the effect, if any, that market sales of
shares held by the Mas family, GE Capital, Santos, Santos Capital, Mr.
Fitzgerald, Mr. Warren, other employees, or other stockholders, or the
availability of such shares for future sales, or market sales of shares sold in
the Offering pursuant to this Prospectus or the availability of such shares for
future sales, will have on the market price of shares of Class A Common Stock
prevailing from time to time. Sales of substantial amounts of Class A Common
Stock in the public market could adversely affect the prevailing market price
of the Class A Common Stock and could materially impair the Company's future
ability to realize capital through an offering of equity securities. See
"Shares Eligible for Future Sale."

ANTI-TAKEOVER PROVISIONS

The Company's Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation") and By-Laws and certain provisions of the
Delaware General Corporation Law (the "DGCL") may make it difficult in some
respects to effect a change in control of the Company and

15
<PAGE>

replace incumbent management. The existence of these provisions may have a
negative impact on the price of the Class A Common Stock, may discourage third
party bidders from making a bid for the Company, or may reduce any premiums
paid to stockholders for their Common Stock. For example, the directors may
only be removed for cause and only the directors may fill vacancies that occur
prior to th
e end of a director's term. In addition, the Board of Directors of
the Company has the authority to fix the rights and preferences of, and to
issue shares of, the Company's Preferred Stock. The Company must obtain the
consent of the holders of a majority of the outstanding shares of Series A
Preferred Stock before it may authorize, recommend or enter into an agreement
with any person to effect a Change of Control (as defined in the Certificate of
Incorporation). Moreover, prior to the closing of the Offering, the Company
intends to adopt a Stockholders' Rights Plan (the "Rights Plan"). The Rights
Plan will permit the Board to adjust the number and kind of shares subject to
the Rights Plan so as to prevent dilution or enlargement of rights in the event
of a merger or other events which could affect control of the Company. In
accordance with the Standstill Agreement, GE Capital and its affiliates must
not make any attempt to exercise control over the Company and all investments
in the Company by such entities must remain solely passive for the duration of
such investments. See "Management," "Certain Relationships and Transactions--GE
Capital, Santos and Santos Capital" and "Description of Capital
Stock--Stockholders' Rights Plan."

IMMEDIATE AND SUBSTANTIAL DILUTION

The purchasers of shares of Class A Common Stock pursuant to the Offering
will experience immediate and substantial dilution of approximately $13.73 in
net tangible book value per share of Class A Common Stock from the initial
public offering price. See "Dilution."

NO PRIOR PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to this Offering, there has been no public market for the Company's
Class A Common Stock, and there can be no assurance that an active trading
market will develop or be sustained after this Offering. The initial public
offering price will be determined through negotiations between the Company and
representatives of the Underwriters; however, there can be no assurance that
future market prices for the Class A Common Stock will equal or exceed the
range for the initial public offering price set forth on the cover page of this
Prospectus. After completion of this Offering, the market price of the Class A
Common Stock could be subject to significant variation due to fluctuations in
the Company's operating results, changes in earnings estimates by investment
analysts, the success or failure of the Company's growth strategies, and
changes in business or regulatory conditions affecting the Company. In
addition, the stocks listed on the New York Stock Exchange have experienced
extreme price fluctuations in recent years which have often been unrelated to
the operating performance of the affected companies. Such fluctuations could
adversely affect the market price of the Company's Class A Common Stock.

DIVIDEND RESTRICTIONS

The terms of the Company's Series A Preferred Stock, Senior Credit
Facility or New Credit Facility, as the case may be, and the Private Debt
Offering if consummated, restrict the Company from paying dividends on its
Class A Common Stock. The Company does not expect to pay dividends on its Class
A Common Stock in the foreseeable future. See "Dividend Policy."

FORWARD-LOOKING STATEMENTS

This prospectus contains certain forward-looking statements, including
without limitation, statements concerning the Company's operations, economic
performance and financial condition. The words "believe," "expect,"
"anticipate" and other similar expressions identify forward-looking statements.
Investors are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of their dates. These forward-looking
statements are based largely on the Company's current expectations and are
subject to a number of important risks and uncertainties, including those
identified under "Risk Factors" and elsewhere in this Prospectus. Actual
results could differ materially from the forward-looking statements. In light
of these risks and uncertainties, there can be no assurance that the results
referred to in the forward-looking statements contained in this Prospectus will
in fact occur.

16
<PAGE>

USE OF PROCEEDS

The net proceeds to the Company from the sale of the shares of Class A
Common Stock offered hereby are estimated to be approximately $92.9 million
assuming an initial public offering price of $15.00 per share ($107.0 million if
the U.S. Underwriters' over-allotment option is exercised in full), after
deducting underwriting discounts and commissions and offering expenses payable
by the Company. The Company intends to use the net proceeds from the Offering to
repay a portion of a loan which the Company incurred to finance the Richbourg
Acquisition (the "Term Loan"); the entire Term Loan, as well as a portion of the
Senior Credit Facility or the New Credit Facility, as the case may be, will be
repaid with the net proceeds from the Offering if the U.S. Underwriters'
over-allotment option is exercised in full. The Term Loan carried interest at
LIBOR plus 3.5% for January through March 1998 and at LIBOR plus 4% for April
through June 1998 and matures on January 31, 1999. The interest rate on the
indebtedness under the Senior Credit Facility is variable based on the Company's
leverage and averaged 9.1% for 1997. The Senior Credit Facility terminates on
October 31, 1998. It is expected that the New Credit Facility, if entered into,
will expire on April 30, 2003. See "Description of Certain Indebtedness--Credit
Facilities."

DIVIDEND POLICY

The Company did not pay any cash dividends during 1996 and 1997. The
Company anticipates that, following the completion of the Offering, earnings
will be retained for the development of its business and will not be
distributed to stockholders as dividends. The declaration and payment by the
Company of any future dividends and the amounts thereof will depend upon the
Company's results of operations, financial condition, cash requirements, future
prospects, limitations imposed by the Senior Credit Facility or the New Credit
Facility, as the case may be, the Private Debt Offering (if consummated), the
terms of its Preferred Stock and other factors deemed relevant by the Board of
Directors. See "Description of Capital Stock."

17
<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
December 31, 1997, (i) on an actual basis, (ii) pro forma for the Richbourg
Acquisition, the Argentina Acquisition and related borrowings under the Senior
Credit Facility and Term Loan and (iii) pro forma as adjusted to give effect to
the Offering assuming an initial public offering price per share of $15.00 and
the application of the estimated net proceeds therefrom and the exchange by GE
Capital of the Company's Series B and Series C Cumulative Convertible
Redeemable Preferred Stock for Class B Common Stock. This table should be read
in conjunction with "Use of Proceeds," "Unaudited Pro Forma Consolidated
Financial Data," "Selected Consolidated Financial Data," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Company's Consolidated Financial Statements and the Notes thereto included
elsewhere in this Prospectus.

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997
-------------------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED(1)
----------- --------------- ---------------
Debt: (DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Senior Credit Facility ....................................................... $ 161,825 $ 241,569 $ 248,653
Term Loan .................................................................... 49,916 100,000 --
Notes payable ................................................................ 14,462 26,418(2) 26,418
--------- ----------- ---------
Total debt .................................................................. 226,203 367,987 275,071
--------- ----------- ---------
Redeemable preferred stock:
Series A Cumulative Redeemable Preferred Stock, $.01 par value,
519,503 shares authorized; 340,907 shares issued and outstanding ........... 10,649 10,649 10,649
Series B Cumulative Convertible Redeemable Preferred Stock, $.01 par
value, 800,000 shares authorized; 800,000 shares issued and
outstanding ................................................................ 8,336 8,336 --
Series C Cumulative Convertible Redeemable Preferred Stock, $.01 par
value, 800,000 shares authorized; 800,000 shares issued and outstanding 31,562 31,562 --
Accrued preferred stock dividends payable--Series B and C .................... 3,200 3,200 --
--------- ----------- ---------
Total redeemable preferred stock ............................................ 53,747 53,747 10,649
--------- ----------- ---------
Minority interest ............................................................. -- 15,524 15,524
--------- ----------- ---------
Common stockholders' equity (deficit):
Class A Common Stock, $.01 par value, 100,000,000 shares authorized;
8,465,350 and 16,065,350 shares issued and outstanding(3) .................. 85 85 161
Class B Common Stock, $.01 par value, liquidation preference $11.67,
20,000,000 shares authorized; 5,100,000 shares issued and outstanding ...... -- -- 51
Additional paid-in capital ................................................... -- -- 135,887
Accumulated deficit(4) ....................................................... (24,820) (24,820) (24,820)
--------- ----------- ---------
Total common stockholders' equity (deficit) ................................. (24,735) (24,735) 111,279
--------- ----------- ---------
Total capitalization ....................................................... $ 255,215 $ 412,523 $ 412,523
========= =========== =========
</TABLE>

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

(1) In addition, the Company expects to consummate the Private Debt Offering
for estimated net proceeds of approximately $144.75 million, on or after
consummation of the Offering. It is anticipated that the proceeds of the
Private Debt Offering will be used to reduce outstanding borrowings under
the Senior Credit Facility or the New Credit Facility, as applicable, to
redeem the Series A Preferred Stock, and to repay the note payable on
properties the Company owns in Florida. Amounts repaid under the Senior
Credit Facility or New Credit Facility, as applicable, are available for
reborrowing. This Offering is not conditioned on the completion of the
Private Debt Offering. There can be no assurance that the Private Debt
Offering will be consummated. See "Management's Discussion and Analysis of
Financial Conditions and Results of Operations--Liquidity and Capital
Resources."

(2) This increase is a result of the consolidation of approximately $12 million
of debt incurred by S.A. Argentina, however, this debt is solely the
responsibility of S.A. Argentina without recourse to the Company.

(3) Excludes (i) 240,000 additional shares of Class A Common Stock reserved for
issuance in connection with options granted pursuant to the Company's
Incentive Stock Plan, (ii) 657,220 additional shares of Class A Common
Stock reserved for issuance in connection with options granted to Kevin P.
Fitzgerald, the Chief Executive Officer and President of the Company,
(688,299 shares if the over-allotment option is exercised) and (iii)
84,650 additional shares of Class A Common Stock reserved for issuance in
connection with options granted to Robert G. Warren, Senior Vice President
of Neff Machinery. See "Management--Options Grants and Exercises."
(4) No effect is given to the write-off of deferred debt costs upon the
repayment of the Term Loan and the replacement of the Senior Credit
Facility with the New Credit Facility.

18
<PAGE>

DILUTION

As of December 31, 1997, adjusted for the exchange of Series B and Series
C Preferred Stock for 6,000,000 shares of Class B Common Stock and the
conversion of 900,000 shares of Class B Common Stock into Class A Common Stock,
the Company had an aggregate of 14,465,350 shares of Common Stock outstanding,
including 9,365,350 shares of Class A Common Stock and 5,100,000 shares of
Class B Common Stock. Net tangible book value per share of Class A Common Stock
represents the amount of total tangible assets less the sum of (i) total
liabilities and (ii) the liquidation preference of the Series A Preferred Stock
of the Company and the Class B Common Stock. After giving effect to the sale of
the Class A Common Stock in the Offering at an assumed initial public offering
price of $15.00 per share and the application of the estimated net proceeds
therefrom, the pro forma net tangible book value as of December 31, 1997 would
have been $20.3 million or $1.27 per share. This represents an immediate
increase in net tangible book value of $9.02 per share of Class A Common Stock
to existing stockholders and an immediate dilution in pro forma net tangible
book value of $13.73 per share of Class A Common Stock to new investors
purchasing shares in the Offering. The following table illustrates this per
share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share ...................... $ 15.00
Net tangible book value per share before the Offering ............... $ 7.75)
Increase per share attributable to new investors .................... 9.02
-------
Pro forma net tangible book value per share after the Offering ....... 1.27
--------
Dilution per share to new investors(1) ............................... $ 13.73
========
</TABLE>

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

(1) Assuming the conversion of the remaining shares of Class B Common Stock
into Class A Common Stock, pro forma net tangible book value per share of
Class A Common Stock and dilution per share of Class A Common Stock to new
investors would be $3.77 and $11.23, respectively.

The following table summarizes, as of December 31, 1997, on a pro forma
basis after giving effect to the Offering, and as adjusted for the exchange of
Series B and Series C Preferred Stock and conversion of Class B Common Stock
discussed above, the differences between existing stockholders and new
investors in this Offering with respect to: (i) the number of shares of Class A
and Class B Common Stock purchased from the Company; (ii) the total
consideration paid to the Company; and (iii) the average price paid per share.

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
------------------------ -------------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
------------ --------- -------------- --------- --------------
<S> <C> <C> <C> <C> <C>
Existing Stockholders ......... 14,465,350 68% $ 43,183,000 30% $ 2.99
New Investors ................. 6,700,000 32 100,500,000 70 15.00
Total ......................... 21,165,350 100% $143,683,000 100%
========== === ============ ===
</TABLE>

The tables above exclude (i) 240,000 additional shares of Class A Common
Stock reserved for issuance in connection with options granted pursuant to the
Company's Incentive Stock Plan, (ii) 657,220 additional shares of Class A
Common Stock reserved for issuance in connection with options granted to Kevin
P. Fitzgerald and (iii) 84,650 additional shares of Class A Common Stock
reserved for issuance in connection with an option granted to Robert G. Warren
for an aggregate purchase price of $0.5 million.

19
<PAGE>

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA

The following table sets forth the unaudited pro forma consolidated
balance sheet of the Company as of December 31, 1997, adjusted to give effect
to (i) the Richbourg Acquisition (January 2, 1998) and the financing of such
acquisition, (ii) the Argentina Acquisition and the financing of such
acquisition and (iii) the Offering and the application of the estimated net
proceeds therefrom and the exchange by GE Capital of the Company's Series B and
Series C Cumulative Convertible Redeemable Preferred Stock for Class B Common
Stock; as if these transactions had occurred as of December 31, 1997. The
second following table sets forth the unaudited pro forma consolidated
statement of operations of the Company for the year ended December 31, 1997,
adjusted to give effect to: (i) the Buckner Acquisition (August 1, 1997), the
Richbourg Acquisition (January 2, 1998) (together, "Completed Acquisitions")
and the financing of these acquisitions, (ii) the Argentina Acquisition and the
financing of such acquisition and (iii) the Offering and the application of the
estimated net proceeds therefrom, as if these transactions had occurred on
January 1, 1997. All acquisitions are accounted for using the purchase method
of accounting. The table does not give effect to the consummation of the
Private Debt Offering. It is anticipated that the proceeds of the Private Debt
Offering, if consummated, will be used to reduce outstanding borrowings under
the Senior Credit Facility or the New Credit Facility, as the case may be, to
redeem the Series A Preferred Stock, and to repay the mortgage on properties
the Company owns in Florida. There can be no assurance that the Private Debt
Offering will be consummated. The unaudited pro forma consolidated financial
data are based upon certain assumptions and estimates which are subject to
change. These statements are not necessarily indicative of the actual results
of operations that might have occurred, nor are they necessarily indicative of
expected future results. The unaudited pro forma consolidated financial data
should be read in conjunction with the Company's Consolidated Financial
Statements and the Notes thereto.

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1997
(IN THOUSANDS)

<TABLE>
<CAPTION>
RICHBOURG ACQUISITION(A)
-------------------------------------------
HISTORICAL PRO FORMA
COMPANY(A) HISTORICAL ADJUSTMENTS PRO FORMA
------------ ------------ ------------------ -----------
<S> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents ................. $ 2,885 $ 161 $ 3,046
Marketable securities-trading ............. -- 593 $ (593)(c) --
Accounts receivable, net .................. 25,007 3,126 28,133
Inventories ............................... 6,072 420 6,492
Rental equipment, net ..................... 184,787 57,604 (4,090)(d) 238,301
Property and equipment, net ............... 23,737 3,068 26,805
Goodwill, net ............................. 29,444 -- 40,790 (e) 70,234
Intangible assets, net .................... 622 -- 622
Prepaid expenses and other assets ......... 8,236 12 1,362 (f) 9,610
--------- ------- --------
Total assets ............................ $ 280,790 $64,984 $383,243
========= ======= ========
LIABILITIES AND COMMON
STOCKHOLDERS' EQUITY
(DEFICIT)
Liabilities
Accounts payable ......................... $ 10,871 $ 930 $ (305)(g) $ 11,496
Accrued expenses ......................... 11,248 -- 11,248
Senior Credit Facility ................... 161,825 26,526 25,218 (h) 213,569
Term loan payable ........................ 49,916 -- 50,084 (i) 100,000
Capitalized lease obligations ............ 2,320 -- 2,320
Notes payable ............................ 14,462 -- 14,462
Deferred income taxes .................... 1,136 -- 1,136
--------- ------- --------
Total liabilities ....................... 251,778 27,456 354,231
--------- ------- --------
Redeemable preferred stock ................ 53,747 -- 53,747
--------- ------- --------
Minority interest ......................... -- -- --
--------- ------- --------
Common stockholders'
equity (deficit) ......................... (24,735) 37,528 (37,528)(j) (24,735)
--------- ------- --------
Total liabilities and common
stockholders' equity (deficit) ......... $ 280,790 $64,984 $383,243
========= ======= ========

<CAPTION>
ARGENTINA ACQUISITION(A)
------------------------------
OFFERING
HISTORICAL PRO FORMA AND OTHER PRO FORMA
ARGENTINA ADJUSTMENTS ADJUSTMENTS AS ADJUSTED(B)
------------ ----------------- ------------------------ ---------------
<S> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents ................. $ 306 $ 3,352
Marketable securities-trading ............. 234 234
Accounts receivable, net .................. 16,940 45,073
Inventories ............................... 12,687 19,179
Rental equipment, net ..................... 18,831 257,132
Property and equipment, net ............... 7,647 $ 16(k) 34,468
Goodwill, net ............................. -- 12,363 (l) 82,597
Intangible assets, net .................... -- 622
Prepaid expenses and other assets ......... 67 9,677
------- --------
Total assets ............................ $56,712 $452,334
======= ========
LIABILITIES AND COMMON
STOCKHOLDERS' EQUITY
(DEFICIT)
Liabilities
Accounts payable ......................... $11,738 $ 23,234
Accrued expenses ......................... 392 $ 399(m) 12,039
Senior Credit Facility ................... -- 28,000 (n) $ 7,084(q) 248,653
Term loan payable ........................ -- (100,000)(q) --
Capitalized lease obligations ............ -- 2,320
Notes payable ............................ 11,956 26,418
Deferred income taxes .................... 1,059 79 (o) 2,274
------- --------
Total liabilities ....................... 25,145 314,938
------- --------
Redeemable preferred stock ................ -- (43,098)(r) 10,649
------- --------
Minority interest ......................... -- 15,468 (p) 15,468
------- --------
Common stockholders'
equity (deficit) ......................... 31,567 (31,567)(j) 136,014 (q)(r) 111,279
------- --------
Total liabilities and common
stockholders' equity (deficit) ......... $56,712 $452,334
======= ========
</TABLE>

(FOOTNOTES ON NEXT PAGE)

20
<PAGE>

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

<TABLE>
<S> <C>
(a) The following table presents the allocation of purchase price for each of the companies acquired or proposed to be
acquired:
BUCKNER
-------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Purchase Price .............. $63,605,000 $100,000,000 $28,000,000
----------- ------------ -----------
Net Assets Acquired ......... 33,636,000 63,300,000 15,637,000
Fair Value Adjustments:
Rental Fleet ............... 1,019,000 (4,090,000) --
----------- ------------ -----------
Goodwill .................... $28,950,000 $ 40,790,000 $12,363,000
=========== ============ ===========
</TABLE>

<TABLE>
<S> <C>
(b) In addition, the Company expects to consummate the Private Debt Offering for estimated net proceeds of approximately
$144.75 million, on or after consummation of the Offering. It is anticipated that the proceeds of the Private Debt
Offering
will be used to reduce outstanding borrowings under the Senior Credit Facility or the New Credit Facility, as
applicable, to
redeem the Series A Preferred Stock, and to repay the mortgage on properties the Company owns in Florida. Amounts
repaid under the Senior Credit Facility or New Credit Facility, as applicable, are available for reborrowing. This
Offering is
not conditioned on the completion of the Private Debt Offering. There can be no assurance that the Private Debt
Offering
will be consummated. See "Management's Discussion and Analysis of Financial Conditions and Results of Operations--
Liquidity and Capital Resources."
(c) Eliminates assets not acquired as part of the Richbourg Acquisition.
(d) Adjusts the carrying value of rental equipment acquired from Richbourg to fair market value.
(e) Adjustment reflects the allocation of the Richbourg Acquisition purchase price of $100 million to the fair value of
the net
assets acquired resulting in an increase of $40.8 million in goodwill. Except as outlined in (d) above, the
historical carrying
values of net assets acquired approximate fair value.
(f) Records deferred financing costs related to indebtedness which funded the Richbourg Acquisition.
(g) Eliminates liabilities not assumed as part of the Richbourg Acquisition.
(h) Records the elimination of liabilities not assumed, net of the extinguishment of the $50 million Term Loan related to
the
Buckner Acquisition and other acquisition expenses funded through the Senior Credit Facility.
(i) Records acquisition consideration funded through the Term Loan, net of the extinguishment of the $50 million Term
Loan
related to the Buckner Acquisition.
(j) Records elimination of the stockholders' equity of the respective acquisition.
(k) Adjustment for capitalized interest not recorded under Argentine GAAP.
(l) Adjustment reflects the allocation of the Argentina Acquisition purchase price of $28 million to the fair value of
the net
assets acquired resulting in an increase of $12.4 million to goodwill. The historical carrying values of net assets
acquired
approximate fair value.
(m) Adjustment for vacation accrual not recorded under Argentine GAAP.
(n) Records acquisition consideration funded through the Senior Credit Facility in connection with the Argentina
Acquisition.
(o) Adjustment for deferred income taxes not recorded under Argentine GAAP.
(p) Records minority interest.
(q) Records the Offering and the application of the estimated net proceeds therefrom together with the proceeds from
additional borrowings under the Senior Credit Facility to repay the Term Loan.
(r) Records the exchange by GE Capital of the Company's Series B and C Cumulative Convertible Redeemable Preferred
Stock for Class B Common Stock, liquidation value $11.67.
</TABLE>

21
<PAGE>

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
COMPLETED ACQUISITIONS
---------------------------------------------------------
HISTORICAL
---------------------------
HISTORICAL PRO FORMA
COMPANY INDUSTRIAL(A) RICHBOURG ADJUSTMENTS PRO FORMA
------------ --------------- ----------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Revenues
Rental revenue .................... $ 68,056 $15,710 $28,894 $ 112,660
Equipment sales ................... 50,578 2,468 6,510 59,556
Parts and service ................. 23,385 2,709 -- 26,094
-------- ------- ------- ---------
Total revenues ................... 142,019 20,887 35,404 198,310
-------- ------- ------- ---------
Cost of revenues
Cost of equipment sold ............ 40,766 1,750 1,956 44,472
Depreciation of rental
equipment ........................ 24,490 4,161 10,928 $ (83)(b) 39,496
Maintenance of rental
equipment ........................ 19,748 2,799 10,714 33,261
Cost of parts and service ......... 13,741 1,047 -- 14,788
-------- ------- ------- ---------
Total cost of revenues ........... 98,745 9,757 23,598 132,017
-------- ------- ------- ---------
Gross profit ....................... 43,274 11,130 11,806 66,293
-------- ------- ------- ---------
Other operating expenses
Selling, general and
administrative expenses .......... 30,129 8,616 4,160 42,905
Other depreciation
and amortization ................. 2,548 855 880 1,372 (c) 5,655
Officer stock option
compensation ..................... 4,400 -- -- 4,400
-------- ------- ------- ---------
Total other operating
expenses ........................ 37,077 9,471 5,040 52,960
-------- ------- ------- ---------
Income from operations ............. 6,197 1,659 6,766 13,333
-------- ------- ------- ---------
Other (income) expense
Interest expense .................. 11,976 1,862 2,406 7,357 (d) 23,601
Amortization of debt
issue costs ...................... 2,362 21 -- 1,125 (e) 3,508
Other (income) expense ............ -- 260 (140) 120
-------- ------- ------- ---------
Total other expense, net ......... 14,338 2,143 2,266 27,229
-------- ------- ------- ---------
Income (loss) before (provision
for) benefit from income taxes
and extraordinary item ............ (8,141) (484) 4,500 (13,896)
(Provision for) benefit from
income taxes ...................... 1,748 80 -- 1,976 (f) 3,804
-------- ------- ------- ---------
Income (loss) before
extraordinary item and
minority interest ................. (6,393) (404) 4,500 (10,092)
Minority interest .................. -- -- -- --
-------- ------- ------- ---------
Income (loss) before
extraordinary item ................ $ (6,393) $ (404) $ 4,500 $ (10,092)
======== ======= ======= =========
Basic and Diluted Earnings
Per Share:
Income (loss) before
Extraordinary Item ............... $ (1.19)
Weighted Average Common
Shares Outstanding ................ 8,465
=========

<CAPTION>
ARGENTINA ACQUISITION
-----------------------------
HISTORICAL PRO FORMA OFFERING PRO FORMA
ARGENTINA ADJUSTMENTS ADJUSTMENTS AS ADJUSTED
------------ ---------------- ------------------- ------------
<S> <C> <C> <C> <C>
Revenues
Rental revenue .................... $ 19,919 $132,579
Equipment sales ................... 37,404 96,960
Parts and service ................. -- 26,094
-------- --------
Total revenues ................... 57,323 255,633
-------- --------
Cost of revenues
Cost of equipment sold ............ 31,075 75,547
Depreciation of rental
equipment ........................ 6,108 45,604
Maintenance of rental
equipment ........................ 6,904 40,165
Cost of parts and service ......... -- 14,788
-------- --------
Total cost of revenues ........... 44,087 176,104
-------- --------
Gross profit ....................... 13,236 79,529
-------- --------
Other operating expenses
Selling, general and
administrative expenses .......... 4,606 $ 30(g) 47,541
Other depreciation
and amortization ................. 431 309 (c) 6,395
Officer stock option
compensation ...................... -- 4,400
-------- --------
Total other operating
expenses ........................ 5,037 58,336
-------- --------
Income from operations ............. 8,199 21,193
-------- --------
Other (income) expense
Interest expense .................. 1,118 2,513 (h) (8,362) (k) 18,870
Amortization of debt
issue costs ...................... -- 3,508
Other (income) expense ............ 48 168
-------- --------
Total other expense, net ......... 1,166 22,546
-------- --------
Income (loss) before (provision
for) benefit from income taxes
and extraordinary item ............ 7,033 (1,353)
(Provision for) benefit from
income taxes ...................... (2,013) 1,070 (i) (3,136) (f) (275)
-------- ------ --------
Income (loss) before
extraordinary item and
minority interest ................. 5,020 (1,628)
Minority interest .................. -- (2,460)(j) (2,460)
-------- ---------- --------
Income (loss) before
extraordinary item ................ $ 5,020 $ (4,088)
======== ========
Basic and Diluted Earnings
Per Share:
Income (loss) before
Extraordinary Item ............... $ (.19)
Weighted Average Common
Shares Outstanding ................ 21,165
========
</TABLE>

(FOOTNOTES ON NEXT PAGE)

<PAGE>

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

<TABLE>
<S> <C>
(a) Reflects seven months of operations prior to the Buckner Acquisition in August 1997.
(b) Reflects the adjustment of Buckner's historical depreciation expense to conform to the Company's depreciation policy
adopted on January 1, 1997.
(c) Records the increase in amortization of goodwill, using an estimated life of 40 years, of $0.4 million, $1.0 million
and $0.3
million attributable to the Buckner, Richbourg and Argentina Acquisitions, respectively.
(d) Records interest expense related to the portion of the Acquisitions funded through borrowings under the Term Loan and
Senior Credit Facility, using the Company's historical rate of 9.0% per annum and eliminates interest expense related
to
indebtedness of the acquired companies which was not assumed by the Company.
(e) Records the amortization of debt issue costs related to the Term Loan.
(f) Adjusts historical income taxes expense to reflect an estimated rate of 38%.
(g) Adjustment for vacation accrual not recorded under Argentine GAAP.
(h) Adjustment for capitalized interest not recorded under Argentine GAAP and records interest expense related to the
portion of the Argentina Acquisition funded through borrowings under the Senior Credit Facility, using the Company's
historical rate of 9.0% per annum.
(i) Adjustment for deferred income taxes not recorded under Argentine GAAP and records a provision for income taxes at an
estimated rate of 38%.
(j) Records minority interest.
(k) Eliminates interest expense resulting from a reduction of debt outstanding from the use of proceeds of the Offering.
</TABLE>

23
<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA

The following table sets forth selected consolidated financial data of the
Company for each of the five years ended December 31, 1997. The consolidated
statements of operations data for the years ended December 31, 1995, 1996 and
1997, and the consolidated balance sheet data as of December 31, 1996 and 1997
are derived from financial statements audited by Deloitte & Touche LLP,
independent certified public accountants. The consolidated statement of
operations data for the year ended December 31, 1994 and the consolidated
balance sheet data as of December 31, 1994 and 1995 are derived from audited
financial statements of the Company not included in this Prospectus. The
consolidated statement of operations and balance sheet data for and as of the
year ended December 31, 1993 is derived from financial statements of the
Company's two wholly-owned subsidiaries, Neff Rental and Neff Machinery,
audited by other independent certified public accountants, and, in the opinion
of management, reflect all adjustments (consisting only of normal recurring
adjustments) that the Company considers necessary for a fair presentation of
such information in accordance with generally accepted accounting principles.
The historical results are not necessarily indicative of results to be expected
for any future period. The data set forth below should be read in conjunction
with, and are qualified by reference to, "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and the Company's
Consolidated Financial Statements and the Notes thereto included elsewhere in
this Prospectus.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------
1993 1994 1995 1996 1997
---------- ---------- ---------- --------------- ---------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues
Rental revenue ...................................... $ 11,878 $ 16,226 $ 20,019 $ 35,808 $ 68,056
Equipment sales ..................................... 22,233 22,996 33,943 44,160 50,578
Parts and service ................................... 9,723 10,304 13,292 15,045 23,385
-------- -------- -------- --------- ---------
Total revenues ..................................... 43,834 49,526 67,254 95,013 142,019
Cost of revenues
Cost of equipment sold .............................. 19,101 17,111 26,562 33,605 40,766
Depreciation of rental equipment .................... 5,784 8,911 11,747 19,853(1) 24,490(1)
Maintenance of rental equipment ..................... 1,833 2,806 3,469 8,092 19,748
Cost of parts and service ........................... 6,567 5,987 7,504 8,143 13,741
-------- -------- -------- ----------- -----------
Total cost of revenues ............................. 33,285 34,815 49,282 69,693 98,745
-------- -------- -------- ----------- -----------
Gross profit ......................................... 10,549 14,711 17,972 25,320 43,274
Selling, general and administrative expenses ......... 6,078 8,493 10,956 18,478 30,129
Other depreciation and amortization .................. 614 225 916 1,432 2,548
Officer stock option compensation(2) ................. -- -- -- -- 4,400
-------- -------- -------- ----------- -----------
Income from operations ............................... 3,857 5,993 6,100 5,410 6,197
Other expense ........................................ 1,175 1,669 3,090 6,337 14,338
-------- -------- -------- ----------- -----------
Income (loss) before (provision for) income taxes
and extraordinary items ............................ 2,682 4,324 3,010 (927) (8,141)
(Provision for) benefit from income taxes(3) ......... (1,019) (1,612) (1,176) (461) 1,748
-------- -------- -------- ----------- -----------
Income (loss) before extraordinary items ............. 1,663 2,712 1,834 (1,388) (6,393)
Net income (loss) .................................... $ 1,663 $ 2,712 $ 1,834 $ (2,197) $ (6,844)
======== ======== ======== =========== ===========
Net income (loss) before extraordinary items per
share (basic and diluted) .......................... $ .20 $ .32 $ .22 $ (.66) $ (1.69)
Weighted average shares outstanding .................. 8,465 8,465 8,465 8,465 8,465
</TABLE>

(FOOTNOTES ON NEXT PAGE)

24
<PAGE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------
1993 1994 1995 1996 1997
------------ ------------ ----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA (END OF PERIOD):
Net book value of rental equipment .................. $ 18,418 $ 31,331 $ 47,989 $ 76,794 $ 184,787
Total assets ........................................ 30,761 47,722 68,816 109,118 280,790
Total debt .......................................... 27,747 38,603 48,345 58,250 226,203
Redeemable preferred stock .......................... -- -- 11,430 46,299 53,747
Total common stockholders' equity (deficit) ......... 571 4,205 (1,931) (7,508) (24,735)
OTHER DATA:
Adjusted EBITDA(4) .................................. $ 10,255 $ 15,129 $ 18,763 $ 26,695 $ 37,635
Adjusted EBITDA margin(5) ........................... 23.4% 30.5% 27.9% 28.1% 26.5%
Rental fleet purchases .............................. $ 21,353 $ 31,185 $ 52,795 $ 86,886 $ 143,999
Number of locations (end of period) ................. 5 6 8 16 53
</TABLE>

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

(1) Depreciation of rental equipment for 1996 and 1997 reflect the Company's
change in depreciation policy to recognize extended estimated service
lives and increased residual values of its rental equipment. See the
Consolidated Financial Statements and the Notes thereto included elsewhere
in this Prospectus.
(2) Officer stock option compensation expense represents a noncash charge with
respect to the change in estimated market value of the shares to be issued
to Kevin P. Fitzgerald under an option agreement.
(3) Prior to December 26, 1995, the Company operated as a Subchapter S
corporation under the provisions of the Internal Revenue Code. Income
(loss) before extraordinary items for 1993, 1994 and 1995 is restated to
reflect what the data would have been if the Company had Subchapter C
status in these years.
(4) Adjusted EBITDA represents income from operations plus depreciation and
amortization and officer stock option compensation expenses. Adjusted
EBITDA is not intended to represent cash flow from operations and should
not be considered as an alternative to operating or net income computed in
accordance with GAAP, as an indicator of the Company's operating
performance, as an alternative to cash flows from operating activities (as
determined in accordance with GAAP) or as a measure of liquidity. The
Company believes that Adjusted EBITDA is a standard measure commonly
reported and widely used by analysts and investors as a measure of
profitability for companies with significant depreciation and amortization
expense. However, not all companies calculate Adjusted EBITDA using the
same methods; therefore, the Adjusted EBITDA figures set forth above may
not be comparable to Adjusted EBITDA reported by other companies.
(5) Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of total
revenues.

25
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The matters discussed herein may include forward-looking statements that
involve risks and uncertainties which could result in operating performance
that is materially different from management's projections. The section of this
Prospectus entitled "Risk Factors" should be read in conjunction with this
Management's Discussion and Analysis of Financial Condition and Results of
Operations.

The following discussion and analysis of the Company's consolidated
financial condition and consolidated results of operations should be read in
conjunction with the Company's Consolidated Financial Statements and the Notes
thereto and the Company's Unaudited Pro Forma Consolidated Financial Data and
the Notes thereto, appearing elsewhere in this Prospectus.

OVERVIEW

The Company is one of the largest and fastest growing equipment rental
companies in the United States. In addition to its rental business, the Company
acts as a dealer of new equipment on behalf of several nationally recognized
equipment manufacturers. The Company also sells used equipment, spare parts and
merchandise and provides ongoing repair and maintenance services. Prior to
1995, the Company primarily acted as a dealer of new equipment on behalf of
several nationally recognized equipment manufacturers. During this time, many
of the Company's dealer locations (six locations) also operated as rental
locations. In 1995, the Company, responding to changes in the industry, began
to modify its operating structure to focus resources of the Company on the
rental equipment business. As part of this strategy, in December 1995, the
Company entered into a strategic partnership with GE Capital to take advantage
of the growth and consolidation opportunities in the equipment rental industry.

Since 1995, the Company has pursued an aggressive growth strategy,
increasing its number of equipment rental and sales locations to 68, as of
December 31, 1997, on a pro forma basis for the Richbourg Acquisition. The
Company has achieved this growth through: (i) the addition of 26 equipment
rental locations as a result of the Buckner Acquisition, (ii) the addition of
15 equipment rental locations as a result of the Richbourg Acquisition and
(iii) the opening of 21 new equipment rental locations primarily throughout the
southeast and southwest regions of the United States. The Company intends to
continue to pursue its aggressive growth strategy by: (i) making additional
acquisitions of equipment rental companies; (ii) increasing fleet at its
existing equipment rental locations in both existing and new product lines;
(iii) continuing to open new equipment rental locations; and (iv) expanding its
dealership operations.

Since January 1, 1995, the Company has opened 23 start-up rental equipment
locations. Management believes the Company's recent financial performance does
not fully reflect the benefit of these rental locations. Based on the Company's
historical experience, a new equipment rental location realizes significant
increases in revenues and cash flow during the first three years of operation
as more equipment is added to the rental fleet and as the location matures.
Because there is relatively little incremental operating expense associated
with such revenues, there is a greater proportionate increase in cash flow and
profitability as a rental location matures. The Company believes the revenues,
cash flow and profitability of the 23 start-up locations opened since January
1, 1995 will increase significantly as these locations mature.

The Company primarily derives revenue from (i) the rental of equipment,
(ii) sales of new and used equipment and (iii) sales of parts and service. On a
pro forma basis for the Acquisitions, the Company's 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 new and used equipment sales is
primarily a function of the supply and

26
<PAGE>

demand for such equipment, price and general economic conditions. The age,
quality and mix of the Company's rental fleet also affect revenues from the
sale of used equipment. Revenues derived from the sale of parts and service is
generally correlated with sales of new equipment.

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. Cost of parts and service represents costs
attributable to the sale of parts directly to customers and service provided
for the repair of customer owned equipment.

Depreciation of rental equipment is calculated on a straight-line basis
over the estimated service life of the asset (generally four to seven years
with a 10% residual value). During 1996 and 1997, the Company made certain
changes to its depreciation assumptions to recognize extended estimated service
lives and increased residual values of its rental equipment. The Company
believes that these changes in estimates will more appropriately reflect its
financial results by better allocating the cost of its rental equipment over
the service lives of these assets. In addition, the new lives and residual
values more closely conform to those prevalent in the 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.

Prior to December 26, 1995, the Company had Subchapter S Corporation
status under the provisions of the Internal Revenue Code. As a result, the
stockholders of the Company were responsible for income taxes for the period
prior to December 26, 1995. In 1995, the Company recorded a deferred tax
liability for timing differences which existed at the time the Company changed
its tax status (see the Consolidated Financial Statements and the Notes thereto
included elsewhere in this Prospectus).

RESULTS OF OPERATIONS

In view of the Company's growth, management believes that the
period-to-period comparisons of its financial results are not necessarily
meaningful and should not be relied upon as an indication of future
performance. In addition, the Company's results of operations may fluctuate
from period to period in the future as a result of the cyclical nature of the
industry in which the Company operates. See "Risk Factors--Seasonality and
Quarterly Fluctuations in Revenues and Operating Results."

27
<PAGE>

The following table sets forth, for the periods indicated, information
derived from the consolidated statements of operations of the Company expressed
as a percentage of total revenues. There can be no assurance that the trends in
the table below will continue in the future.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
<S> <C> <C> <C>
1995 1996 1997
---- ---- ----
Revenues:
Rental revenue ....................................... 29.8% 37.7% 47.9%
Equipment sales ...................................... 50.5 46.5 35.6
Parts and service .................................... 19.7 15.8 16.5
----- ----- -----
Total revenues ...................................... 100.0% 100.0% 100.0%
----- ----- -----
Cost of revenues:
Cost of equipment sold ............................... 39.5 35.4 28.7
Depreciation of rental equipment ..................... 17.5 20.9 17.2
Maintenance of rental equipment ...................... 5.2 8.5 13.9
Cost of parts and service ............................ 11.1 8.6 9.7
----- ----- -----
Total cost of revenues .............................. 73.3 73.4 69.5
----- ----- -----
Gross profit .......................................... 26.7 26.6 30.5
Selling, general and administrative expenses ......... 16.3 19.4 21.2
Other depreciation and amortization .................. 1.4 1.5 1.8
Officer stock option compensation .................... -- -- 3.1
----- ----- -----
Income from operations ................................ 9.0% 5.7% 4.3%
</TABLE>

28
<PAGE>

1997 COMPARED TO 1996

REVENUES. Total revenues for 1997 increased 49.5% to $142.0 million from
$95.0 million in 1996. This growth in revenues primarily resulted from an
increase in revenues of (i) approximately $12.3 million attributable to the
continued maturation of existing rental locations, (ii) approximately $16.1
million associated with the Company's acquisition of 26 rental locations in
August 1997 and (iii) approximately $9.2 million from the opening of 11 new
rental locations during the period.

GROSS PROFIT. Gross profit for 1997 increased 70.9% to $43.3 million or
30.5% of total revenues from $25.3 million or 26.6% of total revenues in 1996.
These increases can primarily be attributed to an increase in gross profit of
(i) approximately $9.3 million from the continued growth of revenues from the
10 locations opened during 1995 and 1996; (ii) approximately $4.8 million from
the growth in revenues arising from the acquisition of 26 rental locations in
August 1997; and (iii) approximately $3.2 million from the growth in revenues
associated with the opening of 11 new rental locations during 1997. These
increases in gross profit include approximately $3.3 million related to the
change in the Company's depreciation policy to recognize extended service lives
and increased salvage values of its rental equipment.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses for 1997 increased 63.1% to $30.1 million or 21.2% of
total revenues from $18.5 million or 19.4% of total revenues in 1996. The
increase in selling, general and administrative expenses as a percent of
revenues is primarily attributable to the opening of 11 new rental locations
and the increase in regional and corporate personnel in anticipation of
continued growth through acquisitions and new location openings. Based upon the
Company's historical experience, a new location tends to incur costs during the
early period of operations without the benefit of the revenue stream
representative of a mature location. As new locations mature, selling, general
and administrative expenses as a percentage of revenue are expected to decline.
In 1996, selling, general and administrative expenses included approximately
$0.9 million of expenses related to the investigation of alternative financing
arrangements.

OTHER DEPRECIATION AND AMORTIZATION. Other depreciation and amortization
expense for 1997 increased 77.9% to $2.5 million from $1.4 million in 1996. The
increase in other depreciation and amortization is primarily attributable to
increased expenditures on computer equipment, management information systems
and property and equipment needed to support the Company's expansion.

OFFICER STOCK OPTION COMPENSATION EXPENSE. Officer stock option
compensation expense of $4.4 million represents changes in estimated market
value of the shares to be issued to a key employee under an option agreement.

INTEREST EXPENSE. Interest expense for 1997 increased to $12.0 million
from $6.0 million in 1996. This increase is attributable to additional
borrowings related to the Company's continued investment in rental equipment
and the Company's acquisition of 26 locations in August 1997.

EXTRAORDINARY LOSS. During 1997, as a result of modifications to the
Company's credit facility, the Company recorded extraordinary losses from the
write-off of debt issue costs associated with the early extinguishment of debt
of $0.4 million, net of related income taxes.

1996 COMPARED TO 1995

REVENUES. Total revenues for 1996 increased 41.3% to $95.0 million from
$67.3 million in 1995. This increase was primarily attributable to the increase
in the number of rental locations operated by the Company. The increase in
rental locations resulted from the opening of eight new rental locations during
1996. In addition, several changes were made to the Company's operating
structure to focus resources of the Company on the rental equipment business
which also increased revenues at existing locations.

29
<PAGE>

GROSS PROFIT. Gross profit for 1996 increased 40.9% to $25.3 million, or
26.6% of total revenues from $18.0 million or 26.7% of total revenues in 1995.
The increase in gross profit is primarily attributable to (i) the continued
growth of revenues from the two locations opened during 1995; (ii) the growth
in revenues associated with the opening of eight new rental locations during
1996; and (iii) the change in the Company's depreciation policy to recognize
extended service lives of its rental equipment. The increases were offset by
lower margins at new rental locations. As a result, gross profit as a
percentage of total revenues was relatively consistent year to year.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses for 1996 increased 68.7% to $18.5 million, or 19.4% of
total revenues from $11.0 million or 16.3% of total revenues in 1995. The
increase in selling, general and administrative expenses is primarily
attributable to the opening of eight new rental locations. Based upon the
Company's historical experience, a new location tends to incur costs during the
early period of operations without the benefit of the revenue stream
representative of a mature location. In addition, the Company incurred
approximately $0.9 million of expenses related to the investigation of
alternative financing arrangements during 1996. No such costs were incurred in
1995.

OTHER DEPRECIATION AND AMORTIZATION. Other depreciation and amortization
expense for 1996 increased 56.3% to $1.4 million from $0.9 million in 1995. The
increase in other depreciation and amortization is primarily attributable to
increased expenditures on computer equipment as a result of the Company's new
location expansion.

INTEREST EXPENSE. Interest expense for 1996 increased to $6.0 million from
$3.1 million in 1995. This increase is attributable to additional borrowings
related to the Company's investment in rental equipment for its new locations.

EXTRAORDINARY LOSS. During 1996, as a result of modifications to the
Company's credit facility, the Company recorded extraordinary losses from the
write-off of deferred financing costs associated with the early extinguishment
of debt of $0.8 million, net of related income taxes. There were no such
transactions in 1995.

LIQUIDITY AND CAPITAL RESOURCES

The Company has financed its operations, acquisitions and new rental
locations primarily through cash flow from operations, proceeds received from
the issuance of preferred stock and borrowings under the credit facilities and
term loans.

During 1997, the Company's operating activities provided net cash flow of
$9.4 million as compared to $7.2 million for 1996. This increase is primarily
attributable to the growth in the Company's operations resulting from an
increase in the number of rental locations operated by the Company.

Net cash used in investing activities was $173.7 million for 1997 as
compared to $44.7 million in the same period for the prior year. This increase
is primarily attributable to the Buckner Acquisition, increased expenditures
for fleet, computer equipment and other property and equipment necessary to
support the Company's expansion.

Net cash provided by financing activities was $162.3 million for 1997 as
compared to $37.2 million for 1996. The net cash provided by financing
activities was primarily attributable to borrowings under the Company's Senior
Credit Facility and Term Loan used to finance the Buckner Acquisition and
capital expenditures supporting the Company's expansion.

The Company's $250 million Senior Credit Facility allows borrowings based
upon eligible accounts receivable, rental fleet and inventory amounts. The
interest rates on balances outstanding under the Senior Credit Facility vary
based upon the leverage ratio maintained by the Company and were 10% for prime
and 9.2% for LIBOR-based borrowings at December 31, 1997. All outstanding
balances under

30
<PAGE>

the Senior Credit Facility are due on October 31, 1998 unless the Company
successfully completes the sale of at least $200 million of qualified debt
securities, as defined in the Senior Credit Facility, in which case they become
due in October 2001. The Senior 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 places certain restrictions on the payment of dividends. At December 31,
1997, the Company was not in compliance with the minimum EBITDA covenant, as
defined in the Senior Credit Facility. For the year ended December 31, 1997,
the minimum EBITDA calculation was $44.8 million but was required to be $45.9
million. The lenders under the Senior Credit Facility have waived this
non-compliance.

In January 1998, in connection with the Richbourg Acquisition, the Company
executed the Term Loan, which has terms and requirements similar to the
Company's Senior Credit Facility. The Company's Senior Credit Facility is
expected to be amended and restated in connection with the Offering. Borrowings
under the New Credit Facility will continue to be based upon eligible accounts
receivable, rental fleet and inventory amounts. The interest rates on balances
outstanding under the New Credit Facility will vary based upon the leverage
ratio maintained by the Company and range from prime rate or LIBOR plus 1.00%
to prime plus 1.25% or LIBOR plus 2.25%. Based upon the Company's anticipated
leverage ratio after the completion of the Offering, the interest rate would be
prime plus .875% or LIBOR plus 1.875%. In the event the Company repays the Term
Loan prior to October 31, 1998, the maturity of the New Credit Facility will be
extended to April 30, 2003; otherwise, the New Credit Facility will mature on
October 31, 1998. The Company expects the New Credit Facility to be secured by
substantially all of the Company's assets and will contain various restrictive
covenants which, among other things, will place restrictions on dividends and
indebtedness and require the Company to maintain certain interest coverage
ratios.

The Company plans to use the net proceeds from the Offering to repay a
portion of the Term Loan; the entire Term Loan, as well as a portion of the
Senior Credit Facility or the New Credit Facility, as the case may be, will be
repaid with the net proceeds from the Offering if the U.S. Underwriters'
over-allotment option is exercised in full. As of March 31, 1998, on a pro
forma basis after giving effect to the Offering and the Private Debt Offering
and the application of proceeds therefrom, the Richbourg Acquisition and the
Argentina Acquisition, the Company would have had approximately $94 million
available under the Senior Credit Facility. Based upon current expectations,
the Company believes that cash flow from operations, together with amounts
which may be borrowed under the Senior Credit Facility or the New Credit
Facility, as the case may be, will be adequate for it to meet its capital
requirements and pursue its business strategy for the next twelve months.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1997, the FASB issued SFAS No. 130, REPORTING COMPREHENSIVE
INCOME, which is required to be adopted in the first quarter of 1998. SFAS No.
130 established standards for the reporting and display of comprehensive income
and its components. Comprehensive income includes certain non-owner changes in
equity that are currently excluded from net income.

In June 1997, SFAS No. 131, DISCLOSURE ABOUT SEGMENTS OF AN ENTERPRISE AND
RELATED INFORMATION, was issued. SFAS No. 131 establishes standards for the way
that public companies disclose selected information about operating segments in
annual financial statements and requires that those companies disclose selected
information about segments in interim financial reports issued to stockholders.
It also establishes standards for related disclosures about products and
services, geographic areas, and major customers. SFAS No. 131 is effective for
financial statements for periods beginning after December 15, 1997.
Accordingly, the Company is not required to adopt SFAS No. 131 until the fiscal
year ending December 31, 1998. SFAS No. 131 relates solely to disclosure
provisions, and therefore will not have any effect on the results of
operations, financial position and cash flows of the Company.

31
<PAGE>

YEAR 2000

The Company is aware of the issues associated with the programming code in
existing computer and software systems as the millennium ("Year 2000")
approaches. The Year 2000 problem is pervasive and complex, as virtually every
computer operation could be affected in some way by the rollover of the
two-digit year value to "00". The issue is whether systems will properly
recognize date sensitive information when the year changes to 2000. Systems
that do not properly recognize such information could generate erroneous data
or cause complete system failures. The Company has received confirmation from
all of its current systems' vendors that each of their systems will properly
handle the rollover to the Year 2000. Although there can be no assurance,
management believes the Year 2000 problem will not have a material effect on
the financial position, results of operations or cash flows of the Company.

INFLATION AND GENERAL ECONOMIC CONDITIONS

Although the Company cannot accurately anticipate the effect of inflation
on its operations, it does not believe that inflation has had, or is likely in
the foreseeable future to have, a material impact on its results of operations.
The Company'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, the Company's 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 by the Company under
its variable rate credit facilities.

Although much of the Company's business is with customers in industries
that are cyclical in nature, management believes that certain characteristics
of the equipment rental industry and the Company's operating strategies should
help to mitigate the effects of an economic downturn. These characteristics
include: (i) the flexibility and low cost offered to customers by renting,
which may be a more attractive alternative to capital purchases; (ii) the
Company's ability to redeploy equipment during regional recessions; and (iii)
the diversity of the Company's industry and customer base.

32
<PAGE>

BUSINESS

GENERAL

Neff is one of the largest and fastest growing equipment rental companies
in the United States, with 70 rental locations in 15 states. The Company rents
a wide variety of equipment, including backhoes, air compressors, loaders,
lifts and compaction equipment to construction and industrial customers. The
Company also acts as a dealer of new equipment on behalf of several nationally
recognized equipment manufacturers. In addition, the Company sells used
equipment, spare parts and merchandise and provides ongoing repair and
maintenance services. The Company has increased its total revenues from $67.3
million in 1995 to $142.0 million in 1997; pro forma for the Acquisitions and
the Argentina Acquisition, the Company's total revenues for 1997 were $255.6
million.

According to industry sources, the equipment rental industry grew from
approximately $600 million in revenues in 1982 to an estimated $18 billion in
1997. This growth has been driven primarily by construction and industrial
companies that have increasingly outsourced equipment needs to reduce
investment in non-core assets and convert costs from fixed to variable. The
equipment rental industry is highly fragmented, with an estimated 17,000
equipment rental companies in the United States. As a result, the Company
believes that there are substantial consolidation opportunities for
well-capitalized operators such as the Company. According to RENTAL EQUIPMENT
REGISTER and studies prepared by Manfredi & Associates, Inc. on the size of the
equipment rental market, no single company's revenues represented more than 2%
of total market revenues in 1996. Relative to smaller competitors, the Company
has several advantages, including increased purchasing power, larger
inventories to service larger accounts and the ability to transfer equipment
among rental locations in response to changing patterns of customer demand.

COMPETITIVE STRENGTHS

The Company believes it has several competitive strengths which provide it
with the opportunity for continued growth and increased profitability.

STRONG MARKET POSITION. The Company is one of the largest and fastest
growing 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. The Company operates 70 rental locations in
15 states, including Florida, Georgia, Alabama, Mississippi, South Carolina,
North Carolina, Tennessee, Louisiana, Texas, Oklahoma, Arizona, Nevada, Utah,
California and Colorado. From December 31, 1995 to December 31, 1997, pro forma
for the Richbourg Acquisition, the Company increased its equipment rental
locations from eight to 68 and expanded its rental fleet from $62 million to
$321 million based on original cost. The Company believes its dealership
operations complement its equipment rental operations by providing it with
competitive advantages over competitors which only rent equipment. These
advantages include the ability to achieve favorable pricing by combining
equipment purchases for its dealership and rental fleets; the reduction of
costs in certain locations by sharing service, maintenance and administrative
personnel; and better knowledge of certain local markets by pooling management
information. In addition, management believes the Company's size and geographic
diversity help insulate it from regional economic downturns. The Company's
efforts to improve its market position have caused it to increase its debt and
incur significant operating expenses, and thus have adversely affected its
short-term cash flow and net income. The Company believes, however, that these
efforts are essential to its future performance. See "Risk Factors--Risks
Inherent in Growth Strategy," "Risk Factors--Dependence on Additional Capital
for Future Growth; Restrictions Under Terms of Indebtedness" and "Risk
Factors--Substantial Leverage."

33
<PAGE>

in regular sales of new equipment and conducts an advanced preventative
maintenance program. Management believes this maintenance program increases
fleet utilization, extends the useful life of equipment and produces higher
resale values.

EXPERIENCED MANAGEMENT. Since 1995, the Company has significantly
increased the quality and depth of its management team to help oversee its
growth strategy. Neff's senior management team has extensive experience in the
equipment rental industry and its seven regional managers have, on average, 17
years of experience and substantial knowledge of the local markets served
within their regions. The Company believes that its management team has the
ability to continue the Company's strong growth as well as manage the Company
on a much larger scale. The Company is not dependent on recruiting additional
operating, acquisition, finance or other personnel to implement its growth
strategy. The Mas family, the majority owner of the Company, is also the
majority owner of MasTec, Inc., a public company engaged in the
telecommunications business with operations in South America. Management
believes the Mas family and GE Capital, the Company's other major stockholder,
will be valuable to the Company in identifying and evaluating acquisitions in
both North and South America.

GROWTH STRATEGY

ACQUIRE EQUIPMENT RENTAL COMPANIES. Management intends to expand the
Company through acquisitions of equipment rental companies and believes there
are a significant number of acquisition opportunities in North and South
America which would complement the Company's existing operations. After
completing an acquisition, the Company generally integrates the operations of
the acquired company into its management information system, consolidates
equipment purchasing and resale functions and centralizes fleet management as
quickly as possible while assuring consistent, high-quality service to the
acquired company's customers. Since July 1997, the Company has made two
strategic acquisitions which have more than doubled the Company's number of
rental locations, significantly enhanced the Company's geographic presence and
further diversified the Company's customer base. The Company has also entered
into a letter of intent to acquire 51% of the outstanding stock of S.A.
Argentina, a leading equipment rental company and dealer of new equipment in
South America, and the Company has four letters of intent outstanding to
acquire the assets of additional equipment rental companies in the United
States. To date, the Company has financed its acquisitions primarily with debt,
which has resulted in increased interest expense. See "Risk
Factors--Substantial Leverage."

INCREASE PROFITABILITY OF RECENTLY OPENED RENTAL LOCATIONS. Since March 1,
1995, the Company has opened 23 start-up rental equipment locations including
11 locations in 1997. Management believes the

34
<PAGE>

Company's financial performance does not yet fully reflect the benefit of these
rental locations. The Company incurs significant expenses in connection with
the opening of new locations. See "Risk Factors--Risks Inherent in Growth
Strategy." Based on the Company's historical experience, a new equipment rental
location tends to realize significant increases in revenues, cash flow and
profitability during the first three years of operation as more prospective
customers become aware of its operation and as the rental equipment fleet is
customized to local market demand. Because there is relatively little
incremental operating expense associated with such revenues, cash flow and
profitability increases significantly as a rental location matures. Although
the Company intends to expand primarily through acquisitions, management
intends to open additional start-up locations in markets where the Company has
not been able to identify attractive acquisition candidates. The Company plans
to open five to seven additional branches in 1998.

INCREASE FLEET AT EXISTING LOCATIONS. Management believes it can
capitalize on the demand for rental equipment in the markets it serves and
increase revenues by increasing the size of the rental fleet and adding new
product lines at existing locations. Management believes that this strategy
allows the Company both to attract new customers and serve as a single source
supplier for its customers. Because the startup expenditures associated with
increasing the fleet and expanding product lines at existing locations are
relatively modest, these investments typically generate higher and faster
returns than investments in new locations.

ACQUISITION STRATEGY

The Company believes it can successfully implement its acquisition
strategy because of (i) the Company's access to financial resources, (ii) the
potential for increased profitability due to the centralizing of certain
administrative functions, enhanced systems capabilities, greater purchasing
power and economies of scale and (iii) the potential for owners of the
businesses being acquired to participate in the Company's planned growth while
realizing liquidity. The Company has developed a set of financial, geographic
and management criteria designed to assist management in the evaluation of
acquisition candidates. These criteria are used to evaluate a variety of
factors, including, but not limited to, (i) historical and projected financial
performance, (ii) composition and size of the candidate's customer base, (iii)
relationship of the candidate's geographic location to the Company's market
areas, (iv) potential synergies gained through acquisition of the candidate and
(v) liabilities, contingent or otherwise, of the candidate.

The Company intends to evaluate acquisition candidates in South America as
well as the United States. Management believes it can capitalize on the
business relationships of its major stockholders, GE Capital and the Mas
family, and its affiliate, MasTec Inc., in South America in locating potential
South American acquisition candidates and consummating such acquisitions. Based
on the RENTAL EQUIPMENT REGISTER and the Company's experience evaluating
potential acquisitions in South America, the Company estimates that the
equipment rental market in South America is 20 to 30 years behind the North
American market and will experience significant growth in the next five to ten
years.

The Company recently acted on its plan to expand its operations into South
America by entering into a letter of intent to acquire 51% of the outstanding
stock of S.A. Argentina. S.A. Argentina rents

35
<PAGE>

and sells industrial and construction equipment throughout South America,
including Argentina, Brazil, Uruguay, Paraguay, Chile and Bolivia. S.A.
Argentina's revenues for 1997 were approximately $57.3 million. S.A.
Argentina's principal operations are located in Buenos Aires, Argentina; it
also has locations in Cordoba and Rosario, Argentina and an assembly plant in
San Luis, Argentina. The current management of S.A. Argentina will continue to
oversee the day-to-day management of S.A. Argentina. The letter of intent
provides that the Company will have the option to purchase the remaining 49% of
the outstanding stock of S.A. Argentina from the existing stockholders. This
option will be exercisable for a period of 30 months commencing 30 months after
the consummation of the Argentina Acquisition. In addition, the existing
stockholders of S.A. Argentina will have the option during the same period to
require the Company to purchase the remaining 49% of the outstanding stock of
S.A. Argentina. The exercisability of these options may be subject to certain
additional terms and conditions, including restrictions imposed by the terms of
the Company's indebtedness on the Company's ability to make acquisitions. The
Argentina Acquisition is subject to a number of closing conditions, including
the execution of a definitive purchase agreement, and there can be no assurance
that the Argentina Acquisition will be consummated. See "Risk Factors--Risks
Associated with the Argentina Acquisiton."

OPERATIONS

The Company's operations primarily consist of renting equipment, and, to a
lesser extent, selling used equipment, complementary parts and merchandise to a
wide variety of construction and industrial customers. In addition, to service
its customer base more fully, the Company also acts as a dealer of new
equipment on behalf of several nationally known equipment manufacturers and
provides ongoing maintenance and repair services for the equipment it sells and
rents. The Company's locations are grouped together by geographic area and a
regional manager oversees operations within each region.

EQUIPMENT RENTALS. The Company is one of the largest and fastest growing
equipment rental companies in the United States, with 70 rental locations in 15
states. The Company's 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, Terex Americas, JCB, Sullivan
Industries, Ingersoll-Rand, Gradall, Lull, JLG, Bobcat, MultiQuip and Wacker.
Major categories of equipment represented the following percentages (based on
original cost) of the Company's total rental fleet as of December 31, 1997:

<TABLE>
<CAPTION>
PERCENTAGE OF TOTAL RENTAL FLEET
MAJOR EQUIPMENT CATEGORY (BASED ON ORIGINAL COST)
- ------------------------------ ---------------------------------
<S> <C>
Earthmoving ............... 41.0%
Material Handling ......... 16.1
Aerial .................... 12.7
Compressors ............... 6.2
Compaction ................ 6.1
Trucks .................... 4.2
Cranes .................... 3.8
Welders ................... 2.7
Pumps ..................... 1.3
Generators ................ 1.3
Lighting .................. 1.3
Other ..................... 3.3
</TABLE>

The Company attempts to differentiate itself from its competitors by
providing a broad selection of new and well-maintained rental equipment, and
through high-quality, responsive service to its customers. As of December 31,
1997, on a pro forma basis for the Acquisitions, the Company's equipment rental
fleet had an original cost of approximately $321 million and an average age of
23 months, which management believes compares favorably with other leading
equipment rental companies. The Company makes ongoing capital investments in
new equipment, engages in regular

36
<PAGE>

sales of used equipment and conducts 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 new and reliable equipment rental fleet,
management believes providing high quality customer service is essential to the
Company's future 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
quick, concise communication when ordering equipment. Punctuality and
reliability are key components of the servicing process, as well as maintenance
performance, timely equipment removal at the rental termination, and simplified
billing. The Company's service initiatives include (i) reliable on-time
equipment delivery directly to customers' job sites, (ii) 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 (iii) ongoing
training of an experienced sales force to consult with customers regarding
their equipment needs.

NEW EQUIPMENT SALES. The Company is a distributor of new equipment on
behalf of several nationally known equipment manufacturers. The Company is the
sole authorized distributor of John Deere industrial and construction equipment
in central and southern Florida; it is one of the largest John Deere
construction equipment dealerships in the United States. The Company also has
distributor arrangements with Bomag to sell heavy compaction equipment, and
with Terex Americas to sell off-road trucks, in central and southern Florida.
The Company's sales line consists of nine categories of John Deere, Bomag and
Terex Americas equipment and a total of 58 different machines, including: John
Deere backhoe loaders, forklifts, crawler dozers, four-wheel-drive loaders,
scrapers, skid steers, motor graders and excavators; Bomag vibratory rollers,
static rollers, recyclers and trash compacters; and a complete line of
articulated off-road trucks manufactured by Terex Americas.

The Company's ability to sell new equipment offers flexibility to its
customers and enhances the Company's customer relations. In addition, the
Company's dealership operations provide it with several competitive advantages,
including the opportunity to achieve favorable pricing by combining equipment
purchases for its dealership and rental fleets, the reduction of costs in
certain locations by sharing service, maintenance and administrative personnel
and better knowledge of its local markets by pooling management information.
The Company currently operates new equipment dealerships at six of its
locations.

In addition to standard equipment sales, the Company also offers customers
the option to rent-to-purchase equipment for a period of time. Under this
program, the customer applies a portion of the rental payment to the purchase
price, thus accruing equity over the term of the rental period. The Company's
rent-to-purchase customers generally rent new equipment for a period of six to
18 months with the option to purchase at the end of the rental period. Sales
under the Company's rent-to-purchase program represented approximately 35% of
the Company's new equipment sales in 1997.

The Company effectively competes against other dealers by offering John
Deere and other quality equipment lines for sale, and by providing high quality
service. All personnel, from management to mechanics, are factory trained. The
training of mechanics is continually upgraded as new product lines are
introduced. The Company can transfer equipment from one store to another based
upon a particular customer's needs. Customers also have the opportunity to rent
equipment from the Company's rental fleet if their own equipment is under
repair. The parts department features ample stock to limit customer down time.
Maintenance vehicles are equipped to handle minor repairs in the field to
prevent costly down time.

USED EQUIPMENT SALES. The Company maintains a regular program of selling
used equipment in order to adjust the size and composition of its rental fleet
to changing market conditions and to maintain the quality and low average age
of its rental fleet. Management attempts to balance the

37
<PAGE>

objective of obtaining acceptable prices from equipment sales against the
revenues obtainable from used equipment rentals. The Company is generally able
to achieve favorable resale prices for its used equipment due to its strong
preventative maintenance program and its practice of selling used equipment
before it becomes obsolete or irreparable. The Company believes the proactive
management of its rental fleet allows it 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 the Company's broad geographic diversity, minimizes the impact of regional
economic downturns.

PARTS AND SERVICE. The Company sells a full complement of parts, supplies
and merchandise to its customers in conjunction with its equipment rental and
sales business. The Company also offers maintenance service to its customers
that own equipment and generates revenues from damage waiver charges, delivery
charges and warranty income. Management believes that these revenues are more
stable than equipment sales revenues because of the recurring nature of the
parts and service business. Management also believes that during economic
downturns, the parts and service business may actually increase as customers
postpone new equipment purchases and instead attempt to maintain their existing
equipment.

MANAGEMENT INFORMATION SYSTEM

The Company has developed a state-of-the-art, customized management
information system, capable of monitoring operations on a real-time basis at up
to 300 sites that can be upgraded to support additional locations or terminals.
The Company currently employs six management information system employees who
continually update and refine the system. The Company uses this system to
maximize fleet utilization and determine the optimal fleet composition by
market. This system links all of the Company's 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. Using this system, rental equipment branch managers can search the
Company's 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," improve utilization and
make equipment available in markets where it can earn increased revenues. The
Company's communications system can handle multiple protocols and allows the
integration of systems running on different platforms. This feature allows the
Company to include systems used by locations acquired in an acquisition of an
existing equipment rental company in its central databases while the acquired
locations are integrated into the Company's system. The Company is in the
process of integrating the locations acquired in the Acquisitions into its
management information system.

CUSTOMERS

The Company's customers include commercial, industrial and civil
construction contractors, manufacturers, public utilities, municipalities, golf
courses, shippers, commercial farmers, military bases, offshore platform
operators and maintenance contractors, refineries and petrochemical facilities
and a variety of other industrial accounts. Pro forma for the Acquisitions,
during 1997 the Company served over 75,000 customers. Pro forma for the
Acquisitions, the Company's top ten customers in 1997 represented 7.6% of the
Company's total revenues.

The Company's 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 measured in advance. The Company's
new and used equipment sales customers are generally large construction
contractors who regularly purchase wholesale goods and annually budget for
fleet maintenance purchases.

The Company does not currently provide its own purchase financing to
customers. The Company rents equipment, sells parts, and provides repair
services on account to customers who are screened

38
<PAGE>

through a 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

The Company maintains a strong sales and marketing orientation throughout
its organization in order to increase its customer base and better understand
and serve its customers. Managers at each of the Company's branches are
responsible for supervising and training all sales employees at that location
and directing the salesforce by conducting regular sales meetings and
participating in selling activities. Managers develop relationships with local
customers and assist them in planning their equipment requirements. 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. The Company's
salespeople also use targeted marketing strategies to address the specific
needs of local customers.

PURCHASING

The Company purchases equipment from vendors with reputations for product
quality and reliability. The Company believes its size and the quantity of
equipment it purchases enable it to purchase equipment directly from vendors
pursuant to national purchasing agreements at lower prices and on more
favorable terms than many smaller competitors. The Company seeks to maintain
close relationships with its vendors to ensure the timely delivery of new
equipment.

The Company believes that it has sufficient alternative sources of supply
for the equipment it purchases in each of its principal product categories. The
following table summarizes the Company's principal categories of equipment and
specifies the Company's major suppliers of such equipment:

<TABLE>
<CAPTION>
PRODUCT CATEGORY PRIMARY VENDORS
- ----------------------------------------- ---------------------------------------------------
<S> <C>
Air Compressors and Equipment ........... Sullivan, Ingersoll-Rand and Atlas Copco
Earthmoving Equipment (such as Backhoes,
Loaders, Dozers, Excavators and Material
Handling Equipment) .................... John Deere, Case, JCB, Daewoo and Bobcat
Compaction Equipment, Rollers
and Recyclers .......................... Bomag, Wacker, MultiQuip and Stone
Pumps ................................... MultiQuip, Wacker and Thompson
Generators .............................. MultiQuip, Wacker and Atlas Copco
Welders ................................. MultiQuip and Miller
Electric Tools .......................... Bosch, Kango and Hitachi
Light Towers ............................ Specialty Lighting, Coleman and Amida
Forklifts ............................... JCB, Gradall, Lull and Ingersoll-Rand
Trucking ................................ Terex Americas, Ford and International
Aerial .................................. Skyjack, JLG, Mark Industries and Genie Industries
Concrete ................................ Partner, Edco, Whiteman, Miller, MultiQuip, Wacker
and Stone
Hydraulic Hammers ....................... Kent
</TABLE>

LOCATIONS

The Company's locations typically include: (i) offices for sales,
administration and management, (ii) a customer showroom displaying equipment
and parts, (iii) an equipment service area and (iv) outdoor and indoor storage
facilities for equipment. Each location offers a full range of rental

39
<PAGE>

equipment for rental, with the mix designed to meet the anticipated needs of
the customers in each location. The Company's equipment dealerships typically
operate at the same sites as rental equipment locations.

Each stand-alone rental equipment location is staffed by, on average,
approximately 15 full-time employees, including a branch manager, a rental
coordinator, service manager, sales representatives, an office administrator,
mechanics and drivers. Each dealership has approximately 25 full-time employees
including a branch manager, parts manager, service manager, sales
representatives, departmental personnel, including mechanics, and
administrative staff. These employees are in addition to the full-time
employees used to staff the rental equipment operations located at the same
sites.

DEALERSHIP AGREEMENTS

Neff Machinery has entered into several dealership agreements with each of
John Deere, Bomag and Terex Americas in central and southern Florida. These
dealership agreements appoint Neff Machinery as the equipment manufacturer's
authorized dealer in certain "Areas of Responsibility," which generally
includes 100% of certain counties in southern and central Florida. Under the
dealership agreements, the equipment manufacturers agree to sell equipment to
Neff Machinery for resale in these areas. The dealership agreements typically
do not have a specific term, but may be terminated by either party upon 120
days written notice, or immediately by the equipment manufacturer for cause,
which generally includes, among other things, default by Neff Machinery under
any security agreement between Neff Machinery and the equipment manufacturer,
dissolution or liquidation of Neff Machinery, or a significant change in the
control, ownership or capital structure of Neff Machinery without the equipment
manufacturer's prior written consent.

In April 1998, the Company and John Deere entered into an agreement
providing that John Deere may terminate the John Deere dealership agreements if
the Mas family, Kevin Fitzgerald, Santos and Santos Capital do not own at least
30% of the equity interests in the Company or if GE Capital attempts to obtain
control of or exercise influence over the Company. To resolve issues with John
Deere relating to the size of GE Capital's equity interest in the Company, GE
Capital and the Company entered into the Standstill Agreement which provides
that, subject to certain exceptions, GE Capital and its affiliates will
maintain their equity interest in the Company below 25% during the period
ending October 29, 1999, and will maintain their equity interest below 20%
during the period from October 29, 1999 until Neff Machinery is no longer a
dealer for John Deere or certain other conditions are satisfied. Santos has
agreed to exercise its option to acquire Company stock from GE Capital if
necessary to reduce GE Capital's equity ownership to these levels.

The Company receives cash incentives and volume-related discounts from the
equipment manufacturers which it represents. The Company uses most of these
cash rebates and marketing fund contributions to give customers price
discounts. In addition, John Deere, Bomag and Terex Americas offer the Company
standard dealer cash discounts or limited interest-free financing.

COMPETITION

EQUIPMENT RENTALS. The equipment rental industry is highly fragmented and
very competitive. The Company competes with independent third parties in all of
the markets in which it operates. Most of the Company's competitors in the
rental business tend to operate in specific, limited geographic areas, although
some larger competitors do compete on a national basis. The Company also
competes with equipment manufacturers which sell and rent equipment directly to
customers. Some of the Company's competitors have greater financial resources
and name recognition than the Company.

EQUIPMENT SALES. The equipment distribution market consists of many firms
which operate dealerships representing equipment manufacturers, such as
Caterpillar, John Deere, Case and Komatsu. As the authorized dealer of John
Deere equipment in central and southern Florida, the Company competes with
dealers who sell other manufacturers' equipment in the same area. Key
competitive

40
<PAGE>

factors include fleet quality, pricing and the ability of a particular dealer
to provide satisfactory service and parts. John Deere provides promotional
programs which help the dealerships increase market share against competitors.

ENVIRONMENTAL AND SAFETY REGULATION

The Company's 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. The Company believes that it is in material compliance
with such requirements and does not currently anticipate any material capital
expenditures for environmental compliance or remediation for the current or
succeeding fiscal years. Certain of the Company's present and former facilities
have used substances and generated or disposed of wastes which are or may be
considered hazardous, and the Company may incur liability in connection
therewith. Moreover, there can be no assurance that environmental and safety
requirements will not become more stringent or be interpreted and applied more
stringently in the future. Such future changes or interpretations, or the
identification of adverse environmental conditions currently unknown to the
Company, could result in additional environmental compliance or remediation
costs to the Company. Such compliance and remediation costs could be material
to the Company's financial condition or results of operations.

In particular, at its owned and leased facilities the Company stores and
dispenses petroleum products from aboveground storage tanks and has in the past
stored and dispensed petroleum products from underground storage tanks. The
Company also uses hazardous materials, including solvents, to clean and
maintain equipment, and generates and disposes of solid and hazardous wastes,
including used motor oil, radiator fluid and solvents. In connection with such
activities, the Company has incurred capital expenditures and other compliance
costs which are expensed on a current basis and which, to date, have not been
material to the Company's financial condition. Based on currently available
information, the Company believes that it will not be required to incur
material capital expenditures or other compliance or remediation costs on
environmental and safety matters in the foreseeable future. See "Risk
Factors--Environmental and Safety Regulation."

EMPLOYEES

As of April 27, 1998, the Company had approximately 1,100 employees. None
of the Company's employees is represented by a union or covered by a collective
bargaining agreement. The Company believes its relations with its employees are
good.

RETENTION OF MANAGEMENT OF ACQUIRED COMPANIES

The Company's policy is to retain any available members of an acquired
company's management who have strengths that are beneficial to the Company. In
connection with the Buckner Acquisition, the Company retained all members of
Buckner's senior management. Those management personnel are now responsible for
the day-to-day operation of Neff Rental's Gulf Region. In connection with the
Richbourg Acquisition, the Company retained substantially all management
personnel with the exception of Richbourg's founder, Bruce Richbourg. Those
personnel continue to hold management positions at the Neff Rental branch
locations acquired in the Richbourg Acquisition.

PROPERTIES

The Company leases 13,000 square feet for its corporate headquarters in an
office building in Miami, Florida. The Company owns the buildings and/or the
land at 11 of its locations. In May 1997, the Company purchased the buildings
and land at six of its locations in Florida from Atlantic Real Estate Holdings
Corp., an affiliate of the Company controlled by the Mas family which formerly
leased these locations to the Company. The Company also owns the buildings
and/or the land at its locations in

41
<PAGE>

Phoenix, Arizona; Hardeeville, Georgia; Texas City, Texas; Pasadena, Texas; and
Corpus Christi, Texas. All other sites are leased, generally for terms of five
years. Owned and leased sites range from approximately 10,000 to 25,000 square
feet on lots ranging up to 22 acres, and include showrooms, equipment service
areas and storage facilities. The Company does not consider any specific leased
location to be material to its operations. The Company believes that equally
suitable alternative locations are available in all areas where it currently
does business.

LEGAL PROCEEDINGS

The Company is a party to pending legal proceedings arising in the
ordinary course of business. While the results of such proceedings cannot be
predicted with certainty, the Company does not believe any of these matters are
material to the Company's financial condition or results of operations.

42
<PAGE>

MANAGEMENT

EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES

The table below sets forth the names and ages of the directors, executive
officers and significant employees of the Company and its subsidiaries as well
as the positions and offices held by such persons, as of March 17, 1998. Jorge
Mas, Juan Carlos Mas and Jose Ramon Mas, all of whom are members of the Board
of Directors, are brothers. There are no other family relationships among the
directors or officers of the Company.

<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------ ----- -------------------------------------------------
<S> <C> <C>
Jorge Mas .................... 34 Chairman of the Board of Directors
Kevin P. Fitzgerald .......... 41 Chief Executive Officer, President and Director
Peter A. Gladis .............. 47 Senior Vice President--Neff Rental
Robert G. Warren ............. 40 Senior Vice President--Neff Machinery
Bonnie S. Biumi .............. 35 Chief Financial Officer
William Derenbecker .......... 43 Regional Vice President--Neff Rental--Gulf Coast
Steve Halliwell .............. 39 Regional Vice President--Neff Rental--Florida
Graham Hood .................. 42 Regional Vice President--Neff Rental--Southeast
Wes Parks .................... 35 Regional Vice President--Neff Rental--Atlantic
Bruce Pope ................... 52 Regional Vice President--Neff Rental--Southwest
Thomas Vandever .............. 52 Regional Vice President--Neff Rental--Central
Jon Zier ..................... 42 Regional Vice President--Neff Rental--West
Juan Carlos Mas .............. 31 Director
Jose Ramon Mas ............... 28 Director
</TABLE>

JORGE MAS. Mr. Mas has been Chairman of Neff Corp. and its predecessor, MP
Equipment ("MP") since he founded MP in 1988. Since 1994, Mr. Mas has been the
President and CEO, and a director of MasTec, Inc., a provider of
telecommunications related engineering and construction services. Mr. Mas is a
member of the boards of directors of Supercanal Holdings, S.A., Primera Fila,
S.A. and Santos Capital. Mr. Mas has an M.B.A. and a B.A. in business
administration.

KEVIN P. FITZGERALD. Mr. Fitzgerald joined the Company in 1995 as
President and CEO. From 1991 through July, 1995, he was a Senior Vice President
for the investment banking firm of Houlihan Lokey Howard and Zukin. He is also
a member of the boards of directors of Supercanal Holdings, S.A., Primera Fila,
S.A. and Santos Capital. Mr. Fitzgerald holds an M.B.A. in finance and a B.S.
in electrical engineering.

PETER A. GLADIS. Mr. Gladis joined the Company in 1995 after 20 years of
employment with Hertz Corporation, most recently, as Regional Vice President of
western region operations. Mr. Gladis is the Senior Vice President of Neff
Rental. Mr. Gladis has a B.S. in business administration and marketing and a
total of 25 years of experience in the equipment rental industry.

ROBERT G. WARREN. Mr. Warren joined the Company in 1988 after being
employed by Hertz Corporation as Regional Vice President. Mr. Warren is Senior
Vice President of Neff Machinery. Mr. Warren has a total of 20 years of
experience in the equipment sales and rental industry.

BONNIE S. BIUMI. Ms. Biumi is Chief Financial Officer of the Company. She
joined the Company in 1997 after being employed as Executive Vice President and
Chief Financial Officer of Peoples Telephone Company, Inc., a publicly traded
telecommunication services company, from 1994 to 1997. From 1983 to 1994, Ms.
Biumi was employed by Price Waterhouse LLP in Miami, Florida, most recently as
a Senior Manager. Ms. Biumi is a certified public accountant and holds a B.S.
in Business Administration.

WILLIAM G. DERENBECKER. Mr. Derenbecker joined the Company in August 1997
as Neff Rental's Vice President for the Gulf Coast Region. He previously served
for 11 years in a variety of senior management positions at Buckner.

43
<PAGE>

STEVE HALLIWELL. Mr. Halliwell joined the Company in 1990 after one year
with Wacker as Territory Manager and two years with Hood Equipment as a Sales
Representative. Mr. Halliwell serves as Neff Rental's Vice President for the
Florida Region. Mr. Halliwell has a total of 12 years of experience in the
equipment rental industry.

GRAHAM HOOD. Mr. Hood joined the Company in 1995 after 17 years of
employment with Hertz Corporation, where he most recently served as Regional
Vice President. Mr. Hood serves as Neff Rental's Vice President for the
Southwest Region. Mr. Hood has a total of 20 years of experience in the
equipment rental industry.

WES PARKS. Mr. Parks joined the Company in 1995 after eight years of
employment with Hertz Corporation, where he served as Branch Manager. Mr. Parks
serves as Neff Rental's Vice President for the Atlantic Region. Mr. Parks has a
total of 13 years in the equipment rental industry.

BRUCE POPE. Mr. Pope joined the Company in 1995 after being employed by
Hertz Corporation as Branch Manager. Mr. Pope serves as Neff Rental's Vice
President for the Southwest Region. Mr. Pope has a total of 33 years of
experience in the equipment rental industry.

THOMAS VANDEVER. Mr. Vandever joined the Company in 1997 after being
employed by Hertz Corporation as Regional Manager. Mr. Vandever serves as Neff
Rental's Vice President for the Central Region. Mr. Vandever has a total of 16
years of experience in the equipment rental industry.

JON ZIER. Mr. Zier joined the Company in 1996 after being employed by
Hertz Corporation as Regional Manager. Mr. Zier serves as Neff Rental's Vice
President for the West Region. Mr. Zier has a total of 20 years of experience
in the equipment rental industry.

JUAN CARLOS MAS. Mr. Mas has been a Director of the Company and MP since
1989. He is currently Director and President of the Construction Division of
Church and Tower, a subsidiary of MasTec, Inc., where he has been employed for
the past five years. Mr. Mas holds a B.A. in business administration and a J.D.

JOSE RAMON MAS. Jose Ramon Mas has also been a Director of the Company and
MP since 1989. Mr. Mas is Director and President of the Telecommunications
Division of Church and Tower, a subsidiary of MasTec, Inc., where he has been
employed for the past five years. He has a B.A. in business administration and
an M.B.A.

BOARD OF DIRECTORS

The Company's Board of Directors is currently composed of four directors,
Jorge Mas, Mr. Fitzgerald, Juan Carlos Mas and Jose Ramon Mas. The Company
intends to expand the Board to include two outside directors following the
Offering. The Company's Certificate of Incorporation provides that the Board of
Directors shall be divided into three classes. The members of each class of
directors will serve for staggered three-year terms. Following the consummation
of the Offering, the Board will be composed of two Class I directors, two Class
II directors and three Class III directors. Jorge Mas and Kevin P. Fitzgerald
will serve as Class I directors for an initial term which will expire at the
time of the annual stockholder meeting in June 2000. Juan Carlos Mas and Jose
Ramon Mas will serve as Class II directors for the initial term which will
expire at the time of the annual stockholders meeting in June 1999; and the two
outside directors to be selected will serve as Class III directors for the
initial term which will expire at the time of the annual stockholder meeting in
June 1998. Thereafter, each class will serve three-year terms.

The Company must select one independent director within 90 days after the
date of this Prospectus and an additional independent director within one year
after the date of this Prospectus in order to maintain its New York Stock
Exchange listing. Failure to select such directors within this period could
result in a delisting of the Class A Common Stock from the New York Stock
Exchange.

The holders of a majority of the Series A Preferred Stock, voting
separately as a single class in the election of directors of the Company, with
each share of Series A Preferred Stock entitled to one vote, are entitled to
elect one director to serve on the Company's Board of Directors. See
"Description of

44
<PAGE>

Capital Stock--Preferred Stock." GE Capital owns all of the issued and
outstanding Series A Preferred Stock and, therefore, is entitled to elect one
director to the Company's Board of Directors. The Company expects to redeem the
Series A Preferred Stock with the proceeds of the Private Debt Offering. See
"Capitalization."

Pursuant to an Amended and Restated Stockholders Agreement dated as of
March 25, 1998, if GE Capital transfers Common Stock representing at least 15%
of the equity of the Company to a third party (the "GE Transferee") the Company
will increase the Board of Directors from six to seven members and the parties
to the Stockholders' Agreement, in accordance with such agreement, have agreed
to vote their shares of Common Stock to elect the GE Transferee's nominee as a
director to fill the vacancy.

COMMITTEES OF THE BOARD OF DIRECTORS

After completion of the Offering, the Company intends to establish an
Audit Committee and a Compensation Committee, each composed of two independent
directors. The Audit Committee will recommend the annual appointment of the
Company's auditors, with whom the Audit Committee will review the scope of
audit and non-audit assignments and related fees, accounting principles used by
the Company in financial reporting, internal auditing procedures and the
adequacy of the Company's internal control procedures. The Compensation
Committee will administer the Company's Incentive Stock Plan and make
recommendations to the Board of Directors regarding compensation for the
Company's executive officers.

COMPENSATION OF DIRECTORS

Each of the Company's nonemployee directors will receive an annual
retainer. In addition, nonemployee directors will receive meeting attendance
fees for special board meetings or committee meetings not held in conjunction
with a regular board meeting. Jorge Mas, Jose Ramon Mas and Juan Carlos Mas
will not receive any such retainers or fees, however. All directors will be
reimbursed for expenses incurred in connection with attending board and
committee meetings. Pursuant to the Company's Stock Incentive Plan, the
Company's nonemployee directors will receive options to purchase Common Stock
upon their initial appointment. These options will have an exercise price equal
to 100% of the fair market value on the date of the grant, and will vest over a
five year period (20% each year). The options will expire in ten years, unless:
(a) the director leaves the Board of Directors for any reason other than
disability, death or cause, in which case the director will have three months
after termination to exercise his vested options; (b) the director is dismissed
from the Board of Directors for cause, in which case all options will terminate
immediately; (c) the director's service terminates by reason of disability or
resignation, in which case the director will have one year after the
termination date to exercise vested options; or (d) the director dies, in which
case the director's estate will have one year to exercise vested options.

Jorge Mas, the Chairman of the Board of Directors, will receive an option
to purchase 100,000 shares of Class A Common Stock at the initial public
offering price per share to the public as set forth on the cover of this
Prospectus. These options will be currently exercisable and have a ten year
term.

LIMITATIONS ON LIABILITY AND INDEMNIFICATION MATTERS

The Company's Certificate of Incorporation provides that a director of the
Company will not be personally liable to the Company or its stockholders for
monetary damages for any breach of fiduciary duty as a director, except in
certain cases where liability is mandated by the DGCL. The provision has no
effect on any non-monetary remedies that may be available to the Company or its
stockholders, nor does it relieve the Company or its directors from compliance
with federal or state securities laws. The Certificate of Incorporation of the
Company generally provide that the Company shall indemnify, to the fullest
extent permitted by law, any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit,
investigation, administrative hearing or any other proceeding (each, a
"Proceeding") by reason of the fact that he is or was a director or officer of
the Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another entity, against expenses (including
attorneys' fees) and losses, claims, liabilities, judgments, fines and amounts
paid in settlement actually incurred by such person in connection with such
Proceeding.

45
<PAGE>

The Company has entered into, or intends to enter into, agreements to provide
indemnification for its directors and executive officers in addition to the
indemnification provided for in the Certificate of Incorporation. These
agreements, among other things, will indemnify the Company's directors and
executive officers for certain expenses (including attorneys' fees), and all
losses, claims, liabilities, judgments, fines and settlement amounts incurred
by such persons arising out of or in connection with their service as a
director or officer of the Company to the fullest extent permitted by
applicable law. In addition, the Company has obtained director and officer
liability insurance that insures the Company's directors and officers against
certain liabilities.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During its fiscal year ended December 31, 1997, the Company had no
Compensation Committee or other committee of the Board of Directors performing
similar functions. Decisions concerning compensation of executive officers were
made by certain executive officers of the Company. It is contemplated that the
Board of Directors will establish a Compensation Committee consisting of
nonemployee directors following consummation of the Offering. See "--Board of
Directors."

EXECUTIVE COMPENSATION

The following table sets forth a summary of compensation for services
rendered in all capacities to the Company by the Chief Executive Officer and
President and each of the Company's most highly compensated executive officers
as to whom the total annual base salary, bonus and other compensation for the
fiscal year ended December 31, 1997 exceeded $100,000.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
----------------------- -------------
SECURITIES
UNDERLYING
NAME AND PRINCIPAL POSITIONS YEAR SALARY BONUS OPTIONS/SARS
- ----------------------------------------------- ------ ---------- ---------- -------------
<S> <C> <C> <C> <C>
Kevin P. Fitzgerald 1995 $ 50,000 -- 150,000
President and Chief Executive 1996 150,000 $ 75,000 300,000
Officer(1) .................................... 1997 246,000 150,000 --
Robert G. Warren 1995 $ 90,000 $ 50,000 84,650
Senior Vice President, Neff Machinery ......... 1996 126,000 40,000 --
1997 155,000 25,000 --
Peter A. Gladis 1995 $ 42,000 -- --
Senior Vice President, Neff Rental(2) ......... 1996 145,000 $ 40,000 --
1997 150,000 75,000 --
Bonnie S. Biumi
Chief Financial Officer(3) .................... 1997 -- -- --
</TABLE>

- ----------------
(1) Mr. Fitzgerald commenced work for the Company in August 1995. He was paid
at the rate of $145,000 per year during fiscal year 1995. The salary set
forth above for 1995 represents his salary for the five-month period from
August to December, 1995.
(2) Mr. Gladis commenced work for the Company in September 1995. He was paid at
the rate of $145,000 per year during fiscal year 1995. The salary set
forth above represents his salary for the four-month period from September
to December, 1997.
(3) Ms. Biumi commenced work for the Company on December 29, 1997. Her annual
salary was $175,000.

OPTION GRANTS AND EXERCISES

The Company did not grant any options to purchase any of its capital stock
in 1997 and no options to purchase any of its capital stock were exercised in
1997.

Pursuant to an option agreement, dated December 1, 1997 between the
Company and Mr. Fitzgerald (the "Option Agreement"), options to purchase shares
of Class A Common Stock representing 3% of the issued and outstanding Common
Stock of the Company for an aggregate purchase price of approximately $1.6
million have been granted to Mr. Fitzgerald. Upon consummation of the Offering,
Mr. Fitzgerald will

46
<PAGE>

receive options to purchase an additional 207,220 shares of Class A Common
Stock (238,299 if the over-allotment option is exercised), in order to maintain
Mr. Fitzgerald's 3% ownership interest in the Company. Thereafter no further
options will be granted to Mr. Fitzgerald pursuant to the Option Agreement.
One-third of Mr. Fitzgerald's options expire on December 1, 2005, one-third
expire on December 31, 2005 and the remaining one-third expire on December 31,
2006. These options are not intended to qualify as incentive stock options. In
1998, options to purchase 100,000 shares of Class A Common Stock at the initial
offering price set forth on the front cover of the Prospectus were granted to
Mr. Fitzgerald. These options have a 10 year term. These options are intended
to qualify as incentive stock options. All of Mr. Fitzgerald's options are
exercisable. Options to purchase 84,650 shares of Class A Common Stock for an
aggregate purchase price of $0.5 million have been granted to Mr. Warren. These
options are not intended to qualify as incentive stock options and all of these
options are exercisable. Mr. Warren's options expire on June 28, 2006.

Pursuant to the Stock Incentive Plan, options to purchase 10,000 shares of
Class A Common Stock will be granted to each of Mr. Gladis and Ms. Biumi and
options to purchase 20,000 shares of Class A Common Stock will be granted to
Mr. Warren, at the initial offering price set forth on the front cover of this
Prospectus. These options will have a ten year term and are intended to qualify
as incentive stock options. These options will vest in equal installments over
three years. The Company intends to issue additional options to purchase shares
of Class A Common Stock under the Stock Incentive Plan to other employees.

The following table sets forth information concerning the year-end value
of unexercised options held by Messrs. Fitzgerald and Warren:

FISCAL YEAR END OPTION VALUES

<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS "IN-THE-MONEY"
AT FISCAL YEAR END OPTIONS AT FISCAL YEAR END(1)
------------------------------- ------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------- ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C>
Kevin P. Fitzgerald,
Chief Executive Officer
and President ............. 450,000 -- $5,146,990 --
Robert G. Warren,
Senior Vice President,
Neff Machinery ............ 84,650 -- $ 767,568 --
Peter A. Gladis,
Senior Vice President,
Neff Rental ............... -- -- -- --
Bonnie S. Biumi, Chief
Financial Officer ......... -- -- -- --
</TABLE>

- ----------------
(1) Options are "in-the-money" at the fiscal year end if the fair market value
of the underlying securities on such date exceeds the exercise price of
the option. For the purposes of this calculation, the fair market value of
the Class A Common Stock is $15.00, the mid-point of the range of the
initial public offering price set forth on the cover of this Prospectus.

Mr. Fitzgerald also has certain rights to cause the Company to register
Class A Common Stock issued to him upon exercise of his options. At any time
during the period from December 1, 1995 until December 1, 2010 (the
"Registration Period") Mr. Fitzgerald may make one demand upon the Company and
require it to register any shares of Class A Common Stock issued to him upon
exercise of his options. If the Company files a registration statement to
register Class A Common Stock during the Registration Period, Mr. Fitzgerald
may demand that the Company include any shares of Class A Common Stock issued
to him upon exercise of his options in such registration statement. Mr.
Fitzgerald has agreed to waive any rights he may have to register any shares of
Class A Common Stock prior to the Offering or to demand an offering within 180
days of the closing of the Offering.

LONG-TERM INCENTIVE PLAN AWARDS

Effective January 1, 1997, the Company adopted a phantom stock plan (the
"Phantom Stock Plan"). The Phantom Stock Plan is designed to reward employees
for improvements in the Company's

47
<PAGE>

performance. Pursuant to the terms of this plan, employees are eligible to
receive individual units representing a hypothetical share of the Company's
Common Stock (a "Phantom Share"). Each Phantom Share is assigned a value on the
date granted as determined by the administrator of the Phantom Stock Plan. The
difference between the calculated share value of the Phantom Share on the date
redeemed by the employee as determined pursuant to a formula set forth in the
Phantom Stock Plan and the value assigned on the date of grant represents the
cash award the employee is entitled to receive on the redemption date. The
Phantom Shares generally vest over five years and must be redeemed by the
Company within one year of vesting.

The following table sets forth awards made in 1997 under the Phantom Stock
Plan to the officers named in the Summary Compensation Table above.

LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR

NUMBER OF PERFORMANCES OR
SHARES, UNITS OTHER PERIOD UNTIL
OR OTHER MATURATION OR
NAME RIGHTS PAYOUT
- --------------------------------- --------------- -------------------
Kevin P. Fitzgerald,
Chief Executive Officer
and President ................... -- --
Robert G. Warren,
Senior Vice President,
Neff Machinery .................. -- --
Phantom Shares
Peter A. Gladis,
vest in equal
Senior Vice President, installments
Neff Rental ..................... 25,000(1) over 5 years
Phantom Shares
vest in equal
Bonnie S. Biumi, installments
Chief Financial Officer ......... 25,000(2) over 5 years

- ----------
(1) Phantom Share assigned value as of the date of grant of $9.00.
(2) Phantom Share assigned value as of the date of grant of $10.50.

COMPANY COMPENSATION AND BENEFITS

SALARY AND BENEFITS. It is contemplated that the Company will establish
annual base salaries for Messrs. Warren and Gladis and Ms. Biumi in the amounts
of $160,000, $185,000 and $175,000 respectively, effective upon the closing of
the Offering. The Company will also establish an annual bonus plan for
executive officers and other key employees under which bonuses will be paid
based on sales increases, increases in earnings per share and return on equity.
The Company will provide medical and dental benefits, life and disability
insurance, vacation and holidays, and will implement the other benefit plans
described below.

INCENTIVE STOCK PLAN

Under the Company's Incentive Stock Plan (the "Incentive Stock Plan"),
designated officers, employees and consultants of the Company will be eligible
to receive awards in the form of stock options, stock appreciation rights,
restricted stock grants, performance awards or dividend equivalent rights. The
Incentive Stock Plan is intended to promote the long-term financial interests
of the Company by encouraging employees to acquire an ownership position in the
Company and to provide incentives for employee performance. The Incentive Stock
Plan, which is expected to be approved by the Board of Directors, will be
effective upon consummation of the Offering.

An aggregate of 1,000,000 shares of Class A Common Stock will be reserved
for issuance under the Incentive Stock Plan, subject to adjustment in the event
of a stock split, stock dividend or other change in the Class A Common Stock or
the capital structure of the Company. In the aggregate, not more than one-third
of these shares may be made the subject of restricted Class A Common Stock
awards. In addition, no individual may be granted options or awards in respect
of more than 300,000 shares in one year.

48
<PAGE>

The Incentive Stock Plan will be administered by the Compensation
Committee of the Board of Directors. Subject to the provisions of the Incentive
Stock Plan, the Compensation Committee will be authorized to determine who may
participate in the Incentive Stock Plan, the number and types of awards made to
each participant and the terms, conditions and limitations applicable to each
award. In addition, the Compensation Committee will have the exclusive power to
interpret the Incentive Stock Plan and to adopt such rules and regulations as
it may deem necessary or appropriate for purposes of administering the plan.
Subject to certain limitations, the Board of Directors will be authorized to
amend, modify or terminate the Incentive Stock Plan to meet any changes in
legal requirements or for any other purpose permitted by law.

STOCK OPTIONS. Under the Incentive Stock Plan, the Committee is authorized
to grant options to purchase shares of Class A Common Stock, including options
qualifying as "incentive stock options" ("ISOs") under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), and options that do not
so qualify ("NSOs") to employees as additional compensation for their services
to the Company. Options granted will be subject to adjustment in the event of a
stock split, stock dividend or other change in the Class A Common Stock or the
capital structure of the Company.

Options shall be exercisable over such period as may be determined by the
Compensation Committee, but no stock option may be exercised after ten years
from the date of grant. Options may be exercisable in installments and upon
such other terms as determined by the Compensation Committee. Options will be
evidenced by option agreements. No option may be transferable other than by
will or by the laws of descent and distribution or pursuant to certain domestic
relations orders. The purchase price of such Class A Common Stock subject to an
ISO shall not be less than 100% of the Fair Market Value (as defined in the
Incentive Stock Plan) of such Class A Common Stock on the date of grant, (110%
in the case of an ISO granted to an individual holding more than 10% of the
Company's capital stock). Such purchase price shall be paid in full in cash,
Class A Common Stock or a combination of both.

STOCK APPRECIATION RIGHTS. Under the Incentive Stock Plan, the
Compensation Committee also may grant stock appreciation rights either in
tandem with an option or alone. Stock appreciation rights granted in tandem
with a stock option may be granted at the same time as the stock option or at a
later time. A stock appreciation right shall entitle the participant to receive
from the Company an amount payable in cash, in shares of Class A Common Stock
or in a combination of cash and Class A Common Stock, equal to the positive
difference between the fair market value of a share of Class A Common Stock on
the date of exercise and the grant price, or such lesser amount as the
Compensation Committee may determine.

RESTRICTED STOCK AWARDS. Under the Incentive Stock Plan, the Compensation
Committee may grant shares of restricted Class A Common Stock, which are
subject to forfeiture under such conditions and for such period of time (not
less than one year) as the Compensation Committee may determine. The
Compensation Committee shall determine the conditions or restrictions of any
restricted Class A Common Stock awards, which may include restrictions on
transferability, requirements of continued employment, individual performance
or the Company's financial performance.

PERFORMANCE AWARDS. The Compensation Committee in its discretion may grant
awards of performance units or performance shares to an employee contingent
upon the attainment of a specified objective during a specified period of time.
Performance units may be denominated in shares of Class A Common Stock or a
specified dollar amount and are contingent upon attainment of the specified
performance objectives within the specified period of time. Performance shares
will be awarded in the form of shares of Class A Common Stock. The Compensation
Committee will determine the total number of performance shares subject to an
award, the terms and the time at which the performance shares will be issued.
Performance shares may not be sold, transferred, assigned, pledged or otherwise
encumbered so long as such performance shares remain restricted.

DIVIDEND EQUIVALENT RIGHTS. Dividend equivalent rights, defined as a right
to receive all or some portion of the cash dividends that are or would be
payable with respect to shares of Class A Common Stock, may be awarded in
tandem with stock options or other awards under the Incentive Stock Plan. The
Committee will determine the terms and conditions of these rights. The rights
may be paid in cash or shares or a combination of both.

49
<PAGE>

EFFECT OF CHANGE IN CONTROL. The Incentive Stock Plan provides for the
acceleration of certain benefits in the event of a "Change in Control" of the
Company. A Change in Control will be deemed to have occurred if either (i) any
person or group other than the Mas brothers acquires beneficial ownership
equivalent to 30% of the voting securities of the Company, (ii) individuals who
are directors as of the closing of the Offering, or individuals who became
directors after being approved by two-thirds of such individuals (and other

directors previously so approved) cease to constitute at least two-thirds of
the members of the Board of Directors, (iii) the consummation of certain
mergers, the sale of substantially all of the assets of the Company or a
complete liquidation or dissolution of the Company.

401(K) PLAN

The Company maintains a 401(k) Retirement Savings Plan (the "401(k) Plan")
to provide retirement and other benefits to employees of the Company and to
permit employees a means to save for their retirement. The 401(k) Plan is
intended to be a tax-qualified plan under Section 401(a) of the Code. Subject
to legal limitations, participants may elect, by salary reduction, to have
401(k) contributions of 1% to 15% of their compensation made to their accounts.
The Company may make discretionary profit sharing contributions on behalf of
participants based on the participant's contribution amounts. Participants in
the 401(k) Plan always have a 100% vested and nonforfeitable interest in the
value of their 401(k) contributions. In certain circumstances, participants may
receive loans and hardship withdrawals from their accounts in the 401(k) Plan.

LIMITATION OF DIRECTORS' LIABILITY AND INDEMNIFICATION

The DGCL authorizes corporations to limit or eliminate the personal
liability of directors to corporations and their stockholders for monetary
damages for breach of the directors' fiduciary duty of care. The Company's
Certificate of Incorporation limits the liability of directors of the Company
to the Company or its stockholders to the fullest extent permitted by Delaware
law. Specifically, directors of the Company will not be personally liable for
monetary damages for breach of a director's fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to
the Company or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or knowing violations of law, (iii) for
unlawful payments of dividends or unlawful stock repurchases or redemptions as
provided in Section 174 of the DGCL or (iv) for any transaction from which the
director derived an improper personal benefit. The inclusion of this provision
in the Certificate of Incorporation may have the effect of reducing the
likelihood of derivative litigation against directors, and may discourage or
deter stockholders or management from bringing a lawsuit against directors for
breach of their duty of care, even though such an action, if successful, might
otherwise have benefited the Company and its stockholders.

The Certificate of Incorporation provides mandatory indemnification rights
to any officer or director of the Company who, by reason of the fact that he or
she is an officer or director of the Company, is involved in a legal proceeding
of any nature. Such indemnification rights include reimbursement for expenses
incurred by such officer in advance of the final disposition of such proceeding
in accordance with the applicable provisions of the DGCL.

50
<PAGE>

PRINCIPAL STOCKHOLDERS

The following table sets forth, as of April 27, 1998, information with
respect to the beneficial ownership of the Company's Common Stock by: (i) each
person known to the Company to beneficially own more than 5% of the outstanding
shares of the Company's Class A Common Stock, (ii) each person known to the
Company to beneficially own more than 5% of the outstanding shares of the
Company's Class B Common Stock, (iii) each director of the Company and each
executive officer named in the Summary Compensation Table; and (iv) all
directors and executive officers of the Company as a group. Unless otherwise
indicated, (a) each such stockholder has sole voting and investment power with
respect to the shares beneficially owned by such stockholder and (b) has the
same address as the Company.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
BEFORE THE OFFERING
---------------------------------------------------------------
NUMBER OF NUMBER OF
SHARES OF PERCENT SHARES OF PERCENT
CLASS A OF CLASS B OF
COMMON CLASS COMMON CLASS
STOCK OWNED STOCK OWNED
------------------------ --------- ------------------ ---------
<S> <C> <C> <C> <C>
Jorge Mas .................... 3,802,744(1)(2) 26.1% -- --
Juan Carlos Mas .............. 2,381,303(1) 16.5 -- --
Jose Ramon Mas ............... 2,381,303(1) 16.5 -- --
GE Capital ................... 5,100,000(3) 35.2 5,100,000(3) 100%
Santos ....................... 900,000(4) 6.2 -- --
Santos Capital ............... 1,500,000(5) 10.4 -- --
Kevin P. Fitzgerald .......... 550,000(1)(6) 3.7 -- --
Robert G. Warren ............. 104,650(7) * -- --
Peter A. Gladis .............. 10,000(8) * -- --
Bonnie S. Biumi .............. 10,000(9) * -- --
All executive officers and
directors as a group
(7 persons) ................ 9,240,000 60.6 -- --

<CAPTION>
SHARES BENEFICIALLY OWNED
AFTER THE OFFERING
--------------------------------------------------------------
NUMBER OF NUMBER OF
SHARES OF PERCENT SHARES OF PERCENT
CLASS A OF CLASS B OF
COMMON CLASS COMMON CLASS
STOCK OWNED STOCK OWNED
------------------------ --------- ------------------ --------
<S> <C> <C> <C> <C>
Jorge Mas .................... 3,802,744(1)(2) 17.9% -- --
Juan Carlos Mas .............. 2,381,303(1) 11.3 -- --
Jose Ramon Mas ............... 2,381,303(1) 11.3 -- --
GE Capital ................... 5,100,000(3) 24.1 5,100,000(3) 100%
Santos ....................... 900,000(4) 4.3 -- --
Santos Capital ............... 1,500,000(5) 7.1 -- --
Kevin P. Fitzgerald .......... 757,220(1)(6) 3.5 --
Robert G. Warren ............. 140,650(7) * -- --
Peter A. Gladis .............. 10,000(8) * -- --
Bonnie S. Biumi .............. 10,000(9) * -- --
All executive officers and
directors as a group
(7 persons) ................ 9,447,220 42.7 -- --
</TABLE>

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

* Less than 1%.
(1) Does not include shares beneficially owned through Santos or Santos
Capital.
(2) The amount shown includes shares covered by options the Company intends to
grant to Mr. Mas and which will be immediately exercisable by Mr. Mas.
(3) The amount shown includes shares owned by GECFS, Inc., an affiliate of GE
Capital. All of these shares are convertible into Class A Common Stock.
The amount shown includes 1,500,000 shares of Class B Common Stock subject
to an option held by Santos Capital. Santos Capital has agreed to convert
these shares to Class A Common Stock upon exercise. GE Capital's and
GECFS, Inc.'s address is: 777 Long Ridge Road, Building B, First Floor,
Stamford, CT., 06927.
(4) Santos is beneficially owned by Jorge Mas, Juan Carlos Mas, Jose Ramon Mas
and Kevin P. Fitzgerald.
(5) The amount shown includes an option currently exercisable by Santos
Capital, an affiliate of Santos, to purchase 1,500,000 shares of Common
Stock from GE Capital. Santos Capital is beneficially owned by Jorge Mas,
Juan Carlos Mas, Jose Ramon Mas and Kevin P. Fitzgerald.
(6) The amount shown consists of shares covered by options currently
exercisable by Mr. Fitzgerald.
(7) The amount shown consists of 84,650 shares covered by options currently
exercisable by Mr. Warren and 20,000 shares covered by options which the
Company intends to grant to Mr. Warren and which will not be immediately
exercisable upon grant.
(8) The amount shown consists of 10,000 shares covered by options which the
Company intends to grant to Mr. Gladis. These options will not be
immediately exercisable upon grant.
(9) The amount shown consists of 10,000 shares covered by options which the
Company intends to grant to Ms. Biumi. These options will not be
immediately exercisable upon grant.

51
<PAGE>

CERTAIN RELATIONSHIPS AND TRANSACTIONS

MASTEC, INC.

MasTec, Inc., an affiliate of the Company controlled by the Mas family,
purchases and leases construction equipment from the Company. During the years
ended December 31, 1996 and 1997, revenues from MasTec, Inc. amounted to
approximately $1.5 and $0.7 million, respectively. The Company believes that
these payments were substantially equivalent to the payments that would have
been made between unrelated parties acting at arm's length.

ATLANTIC REAL ESTATE HOLDINGS CORPORATION

In May 1997, the Company acquired six properties that it previously leased
from Atlantic Real Estate Holdings Corp., an affiliate of the Company owned by
Jorge Mas, Juan Carlos Mas and Jose Ramon Mas, for approximately $13.9 million.
The Company operated its Miami, West Palm Beach, Fort Myers, Orlando, Pompano
Beach and Tampa equipment rental and dealership locations at these properties.

GE CAPITAL, SANTOS AND SANTOS CAPITAL

The Company and GE Capital have entered into a registration rights
agreement with respect to the Class B Common Stock held by GE Capital (the "GE
Capital Shares"). The registration rights agreement provides that GE Capital
may, after the earlier of (i) December 29, 1998 or (ii) an initial public
offering of the Company's Common Stock and subject to certain limitations, make
two demand registrations with respect to all or part of the GE Capital Shares.
The GE Capital Shares being registered must be converted to shares of Class A
Common Stock prior to registration. The registration rights agreement also
provides GE Capital with piggyback registration rights with respect to certain
registration statements filed by the Company. In any registration, the Company
must pay the registration expenses of GE Capital, excluding GE Capital's legal
fees, underwriting commissions and discounts. The Company has agreed to
indemnify GE Capital against certain liabilities under the Securities Act in
connection with the registration of the GE Capital Shares.

In 1998, GE Capital and the Company consummated a series of transactions
pursuant to which GE Capital (i) exchanged its 800,000 shares of the Company's
Series B Preferred Stock and 800,000 shares of Series C Preferred Stock for
6,000,000 shares of the Company's Class B Common Stock and (ii) sold 900,000
shares of Class B Common Stock to Santos, which Santos then converted into
Class A Common Stock. Santos Capital purchased an option from GE Capital to
acquire an additional 1,500,000 shares of Common Stock, exercisable for a
period of 18 months. The $16.5 million purchase price for the shares of Class A
Common Stock was paid in part by the delivery by Santos of a promissory note to
GE Capital for $11.5 million. This promissory note is secured by the shares of
Class A Common Stock Santos purchased from GE Capital.

In response to concerns raised by John Deere regarding the size of GE
Capital's equity interest in the Company, GE Capital and the Company have
entered into the Standstill Agreement which provides that, subject to certain
exceptions, GE Capital and its affiliates will maintain their equity interest
in the Company below 25% during the period ending October 29, 1999, and will
maintain their equity interest below 20% during the period from October 29,
1999 until Neff Machinery is no longer a dealer for John Deere or certain other
conditions are satisfied. Santos has agreed to exercise its option to acquire
Company stock from GE Capital if necessary to reduce GE Capital's equity
ownership to these levels. GE Capital has also agreed that it will not seek to
obtain control of or exercise influence over the Company.

Santos, Santos Capital and the Company have entered into a registration
rights agreement with respect to the shares of Class A Common Stock held by
Santos and Santos Capital. The terms of this agreement are substantially
equivalent to the terms of the registration rights agreement for GE Capital and
the Company.

PEP CONSULTING

PEP Consulting receives a consultant fee of $5,663 per month for services
rendered to Neff Rental. The owner of PEP Consulting, Jose Perez, was a
director of Neff Rental from December 1995 until October 1997.

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DESCRIPTION OF CERTAIN INDEBTEDNESS

CREDIT FACILITIES

The Company has established the Senior Credit Facility with a syndicate of
Lenders and GE Capital, as agent, dated December 31, 1997, which consists of a
$250 million revolving line of credit, under which each of Neff, Neff Rental
and Neff Machinery can borrow, repay and reborrow funds for general corporate
purposes. The Senior Credit Facility terminates on October 31, 1998; however,
upon the completion of the Private Debt Offering, this date will be changed to
October 31, 2001. Credit facilities with syndicates of lenders and GE Capital,
as agent, have been the Company's principal source of liquidity since December
1995.

The Company's Senior Credit Facility allows borrowings based upon eligible
accounts receivable, rental fleet and inventory amounts. The interest rates on
balances outstanding under the Senior Credit Facility vary based upon the
leverage ratio maintained by the Company and were 10% for Prime and 9.2% for
LIBOR based borrowings at December 31, 1997. At December 31, 1997, the Company
was not in compliance with the minimum EBITDA covenant, as defined in the
Senior Credit Facility. For the year ended December 31, 1997, the minimum
EBITDA calculation was $44.8 million but was required to be $45.9 million. The
lenders under the Senior Credit Facility have waived this non-compliance.

The Company has also entered into a Term Loan with GE Capital, Bankers
Trust Company and BankAmerica Business Credit, Inc., dated December 31, 1997,
pursuant to which the Company received $100 million for the purpose of: (i)
repaying a July 31, 1997 term loan; and (ii) funding a portion of the Richbourg
Acquisition.

The terms and conditions of the indebtedness of the Company under the
above facilities impose restrictions that prohibit the Company from taking
certain actions without the prior written consent of the members of the
syndicate, including but not limited to merging with another company, incurring
certain kinds of indebtedness, changing the Company's capital structure,
selling assets other than in the ordinary course of business and declaring
dividends other than in connection with the Series A Preferred Stock of the
Company. See "Risk Factors--Dependence on Additional Capital for Future Growth;
Reliance on Credit Facilities."

The Company's Senior Credit Facility is expected to be amended and
restated prior to the consummation of the Offering. Borrowings under the New
Credit Facility will continue to be based upon eligible accounts receivable,
rental fleet and inventory amounts. The interest rates on balances outstanding
under the New Credit Facility will vary based upon the leverage ratio
maintained by the Company and range from Prime rate or LIBOR plus 1.00% to
Prime plus 1.25% to LIBOR plus 2.25%. Based upon the Company's anticipated
leverage ratio upon completion of the Offering, the interest rate would be
Prime plus .875% or LIBOR plus 1.875%. In the event the Company repays the Term
Loan prior to October 31, 1998, the New Credit Facility will be due in April
30, 2003, otherwise, it will become due on October 31, 1998. The Company
expects the New Credit Facility will be secured by substantially all of the
Company's assets and will contain various restrictive covenants which, among
other things, place restrictions on indebtedness and require the Company to
maintain certain interest coverage and leverage ratios.

PRIVATE DEBT OFFERING

The Company expects to consummate the Private Debt Offering for estimated
gross proceeds of approximately $150 million, and estimated net proceeds of
$144.75 million after fees and expenses, on or after the consummation of the
Offering. The notes offered in the Private Debt Offering (the "Notes") are
expected to be general unsecured obligations of the Company and subordinated in
right of payment to all existing and future senior indebtedness of the Company.
The Notes will rank PARI PASSU in right of payment with any future senior
subordinated indebtedness of the Company and will rank senior in right of
payment to all other subordinated indebtedness of the Company. The indenture

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governing the Notes (the "Indenture"), if issued, will contain certain
covenants that, among other things, limit the ability of the Company and its
subsidiaries to incur indebtedness, pay certain payments, create liens securing
certain indebtedness, pay dividends, make certain payments affecting
subsidiaries or sell assets. There can be no assurance that the Private Debt
Offering will be consummated.

DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 100,000,000 shares
of Class A Common Stock, $.01 par value, 20,000,000 shares of Class B Common
Stock, $.01 par value, 519,503 shares of Series A Preferred Stock and 1,000,000
shares of Series B Junior Participating Preferred Stock, $.01 par value (the
"Series B Junior Preferred Stock"). Upon completion of the Offering, there will
be issued and outstanding 16,065,350 shares of Class A Common Stock, 5,100,000
shares of Class B Common Stock, 340,907 shares of Series A Preferred Stock, and
no shares of Series B Junior Participating Preferred Stock. In addition,
1,741,870 shares of Class A Common Stock have been reserved for issuance in
connection with the grant of options to purchase Class A Common Stock, and
5,100,000 shares have been reserved in connection with the conversion of Class
B Common Stock.

COMMON STOCK

The Company's Class A Common Stock and Class B Common Stock are equal in
all respects except for dividend and liquidation rights and conversion rights
of the Class B Common Stock, as discussed more fully below. Immediately upon
consummation of this Offering, all of the then outstanding shares of Common
Stock will be validly issued, fully paid and nonassessable.

VOTING RIGHTS; CONVERSION OF CLASS B COMMON STOCK INTO CLASS A COMMON
STOCK. The holders of Class A and Class B Common Stock are entitled to one vote
per share on all matters submitted to a vote of the stockholders. Holders of
Class A and Class B Common Stock do not have cumulative rights, so that holders
of more than 50% of the shares of Common Stock present at a meeting at which a
quorum is present are able to elect all of the Company's directors eligible for
election in a given year. Shares of Class B Common Stock are convertible into
shares of Class A Common Stock, in whole or part, at any time and from time to
time at the option of the holder, on the basis of one share of Class A Common
Stock for each share of Class B Common Stock converted. In the event of any
increase or reduction in the number of shares of Class A Common Stock, or the
exchange of Class A Common Stock for a different number or kind of securities
of the Company, by reason of a reclassification, recapitalization, merger,
consolidation, reorganization, spin-off, split-up, stock split or reverse stock
split, change in corporate structure or otherwise, the number of shares of
Class B Common Stock and the liquidation preference of each share thereof will
be proportionately increased or reduced, as appropriate. The Company is
obligated to at all times reserve and keep available out of its authorized but
unissued shares of Class A Common Stock, such number of shares of Class A
Common Stock issuable upon the conversion of all outstanding shares of Class B
Common Stock. Class A Common Stock has no conversion rights.

LIQUIDATION RIGHTS. Upon the liquidation, dissolution or winding up of the
Company, after satisfaction of all the Company's liabilities and the payment of
the liquidation preference of any Preferred Stock that may be outstanding, the
holder of each share of Class B Common Stock is entitled to receive before any
distribution or payment is made upon any other capital stock of the Company, an
amount in cash equal to $11.67. The holders of Class B Common Stock shall not
be entitled to any further payment. Upon the liquidation, dissolution or
winding up of the Company, the holders of shares of Class A Common Stock are
entitled to share pro rata in the distribution of all of the Company's assets
remaining available for distribution after satisfaction of all the Company's
liabilities and the payment of the liquidation preference of any Preferred
Stock that may be outstanding and the payment of the liquidation preference to
holders of Class B Common Stock described above.

DIVIDEND RIGHTS. Following consummation of the Offering, holders of the
Class A Common Stock and the Class B Common Stock are entitled to receive
ratably such dividends, if any, as are declared by

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the Company's Board of Directors out of funds legally available for that
purpose, subject to the preferential rights of any holder of Preferred Stock
that may from time to time be outstanding. Prior to the consummation of the
Offering, the holders of Class B Common Stock are entitled to receive, in the
aggregate, 75% of the total amount of any cash dividend paid to the holders of
Common Stock. The terms of the Company's credit facilities, Series A Preferred
Stock and the Private Debt Offering limit the Company's ability to pay
dividends on the Common Stock. See "Dividend Policy" and "--Preferred Stock."

OTHER PROVISIONS. The holders of Class A Common Stock and Class B Common
Stock have no preemptive or other subscription rights to purchase shares of
stock of the Company, and there are no redemptive or sinking fund provisions
applicable to the Class A Common Stock and Class B Common Stock.

REGISTRATION RIGHTS. The Company is a party to agreements pursuant to
which GE Capital, the Mas family, Santos, Santos Capital and Mr. Fitzgerald
have the right, among other matters, to require the Company to register their
shares of Class A Common Stock under the Securities Act under certain
circumstances. These rights cover approximately 15,122,570 shares of Class A
Common Stock. See "Management--Company Compensation and Benefits" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

PREFERRED STOCK

The Certificate of Incorporation, a copy of which is filed as an exhibit
to the Registration Statement of which this Prospectus constitutes a part,
authorizes the Company's Board of Directors to issue Preferred Stock in series
and to establish the number of shares to be included in each such series and to
fix the designations, powers, preferences and rights of the shares of each such
series and any qualifications, limitations or restrictions thereof. Because the
Board of Directors has the power to establish the preferences and rights of the
shares of any such series of Preferred Stock, it may afford the holders of any
Preferred Stock that may be outstanding, preferences, powers and rights
(including voting rights) senior to the rights of the holders of Class A Common
Stock. The issuance of Preferred Stock may have the effect of delaying,
deferring or preventing a change in control of the Company. See "Risk Factors--
Anti-Takeover Provisions."

The Board of Directors has established a class of Preferred Stock
designated Series A Preferred Stock consisting of 519,503 authorized shares,
par value $.01 per share. The Series A Preferred Stock has the dividend,
redemption, liquidation and other rights described below.

DIVIDEND RIGHTS. Dividends on each share of Series A Preferred Stock
accrue on a semi-annual basis at a rate of 5% per annum of the "Liquidation
Value," or $40 per share, thereof, plus all accumulated and unpaid dividends
thereon. Such dividends accrue whether or not they have been declared and
whether or not there are profits, surplus or other funds of the Company legally
available for the payment of dividends. During the period from December 31,
1995 until the earlier of December 31, 1999 or the termination of the Senior
Credit Facility (the "PIK Period"), under certain circumstances, the Company
may pay dividends on the Series A Preferred Stock in kind by issuing additional
shares of Series A Preferred Stock to the holders thereof that have an
aggregate Liquidation Value equal to the amount of the accrued and unpaid
dividend. At the end of the PIK Period, all accrued and unpaid dividends on the
Series A Preferred Stock must be paid in cash.

PRIORITY OF SERIES A PREFERRED STOCK ON DIVIDENDS AND REDEMPTIONS. As long
as any shares of Series A Preferred Stock remain outstanding, the Company must
obtain the prior written consent of the holders of a majority of the
outstanding shares of Series A Preferred Stock before it may redeem, retire,
purchase or otherwise acquire any stock of the Company other than Series A
Preferred Stock ("Junior Securities"), or pay or declare any dividend or make
any distribution (in cash or property) upon any Junior Securities, other than
dividends payable solely in the securities in respect of which such dividends
are paid or such that are payable upon the conversion of convertible preferred
stock into common stock.

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LIQUIDATION RIGHTS. Upon any liquidation, dissolution or winding up of the
Company, holders of Series A Preferred Stock will be entitled to be paid,
before any distribution or payment is made upon any Junior Securities, an
amount in cash equal to the aggregate Liquidation Value (plus all accrued and
unpaid dividends thereon) of all such Series A Preferred Stock outstanding. The
holders of Series A Preferred Stock will not be entitled to receive any further
payment. Prior to the time of any liquidation, dissolution or winding up of the
Company, to the extent permitted by applicable law, the Company shall declare
for payment all accrued and unpaid dividends with respect to the Series A
Preferred Stock.

REDEMPTION RIGHTS. On December 31, 2002 (the "Scheduled Redemption Date")
the Company is obligated to redeem all issued and outstanding shares of Series
A Preferred Stock at a price per share equal to the Liquidation Value thereof
(plus all accrued and unpaid dividends thereon). If the Company's funds which
are legally available for the redemption of the Series A Preferred Stock are
insufficient to redeem the total number of shares to be redeemed, those funds
which are legally available shall be used to redeem the maximum number of
shares of Series A Preferred Stock possible. At any time thereafter when
additional funds of the Company are legally available for the redemption of
shares of Series A Preferred Stock, such funds will immediately be used to
redeem the balance of the shares of Series A Preferred Stock.

ELECTION OF DIRECTORS. The holders of a majority of the Series A Preferred
Stock, voting separately as a single class in the election of directors of the
Company, with each share of Series A Preferred Stock entitled to one vote,
shall be entitled to elect one director to serve on the Company's Board of
Directors until his successor is elected by holders of a majority of the Series
A Preferred Stock or he is removed from office by a majority of the holders of
the Series A Preferred Stock. During the PIK Period, if dividends on the
outstanding shares of Series A Preferred Stock shall have not been paid in an
amount equal to one full semiannual dividend thereon, and if at any time after
the PIK Period, dividends on the outstanding shares of Series A Preferred Stock
shall have not been paid in an amount equal to two full semiannual dividends
thereon, the number of directors on the Company's Board of Directors shall be
increased by five. The holders of all Series A Preferred Stock then outstanding
shall be entitled to elect five directors to fill these five new positions on
the Board of Directors. These directors will serve on the Company's Board of
Directors until it has declared and paid to all holders of the Series A
Preferred Stock then outstanding, all accrued and unpaid dividends and two
consecutive semiannual dividends.

VOTING RIGHTS. So long as any shares of Series A Preferred Stock are
outstanding, the Company shall not, without first obtaining the consent of the
holders of a majority of the outstanding shares of Series A Preferred Stock,
(i) authorize, create or issue any shares of stock of any other class or series
which shall rank in any respect on a parity with the Series A Preferred Stock,
or authorize, create or issue any obligations, bonds, notes, debentures, stock
or other securities by their terms convertible into shares of stock of any
other class or series which shall rank in any respect on a parity with the
Series A Preferred Stock, (ii) increase the authorized number of shares of
Series A Preferred Stock or (iii) authorize, recommend or enter into an
agreement with any person to effect a Change of Control (as defined in the
Certificate). In addition, the Company shall not, without first obtaining the
consent of the holders of at least 80% of the outstanding shares of Series A
Preferred Stock, (i) authorize, create or issue any shares of stock of any
other class or series which shall rank in any respect prior to the Series A
Preferred Stock, or authorize, create or issue any obligations, bonds, notes,
debentures, stock or other securities by their terms convertible into shares of
stock of any other class or series which shall rank in any respect prior to the
Series A Preferred Stock or (ii) amend, alter, change or repeal any of the
express terms and provisions of the Series A Preferred Stock in a manner which
would materially adversely affect the rights or preferences of the Series A
Preferred Stock.

The Board of Directors has established a class of Preferred Stock
designated Series B Junior Preferred Stock, consisting of 1,000,000 shares. The
Series B Junior Preferred is reserved for issuance in connection with the
Stockholder Rights Plan. See "--Stockholder Rights Plan."

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DELAWARE LAW AND CERTAIN PROVISIONS OF CERTIFICATE OF INCORPORATION AND BY-LAWS

The Certificate of Incorporation, the Company's By-Laws and Section 203 of
the DGCL contain certain provisions that may make the acquisition of control of
the Company by means of a tender offer, open market purchase, proxy fight or
otherwise, more difficult.

BUSINESS COMBINATIONS. The Company is a Delaware corporation and is
subject to Section 203 of the DGCL. In general, subject to certain exceptions,
Section 203 of the DGCL prohibits a publicly held Delaware corporation from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless: (i) upon consummation of such
transaction, the interested stockholder owned 85% of the voting stock of the
corporation outstanding at the time the transaction commenced (excluding for
purposes of determining the number of shares outstanding those shares owned by
(x) persons who are directors and also officers and (y) employee stock plans in
which employee participants do not have the right to determine confidentially
whether shares held subject to the plan will be tendered in a tender or
exchange offer); (ii) the business combination is, or the transaction in which
such person became an interested stockholder was, approved by the board of
directors of the corporation before the stockholder became an interested
stockholder; or (iii) the business combination is approved by the board of
directors of the corporation and authorized at an annual or special meeting of
the corporation's stockholders by the affirmative vote of at least 662/3% of
the outstanding voting stock which is not owned by the interested stockholder.
For purposes of Section 203, a "business combination" includes mergers, asset
sales and other transactions resulting in a financial benefit to the interested
stockholder; an "interested stockholder" is a person who, together with
affiliates and associates, owns (or, in the case of affiliates and associates
of the issuer, did own within the last three years) 15% or more of the
corporation's voting stock other than a person who owned such shares on
December 23, 1987. An interested stockholder who became an interested
stockholder at a time when the restrictions of Section 203 did not apply to the
corporation shall not be subject to such restrictions.

BOARD OF DIRECTORS AND RELATED PROVISIONS. The Certificate of
Incorporation provides that the number of directors of the Company shall be
fixed from time to time by a resolution of a majority of the Board of Directors
of the Company. The Certificate of Incorporation provides that the Board of
Directors shall have no less than three and no more than eleven members and
shall be divided into three classes. The members of each class of directors
will serve for staggered three-year terms. Thereafter, the number of directors
may be fixed, from time to time, by the affirmative vote of a majority of the
entire Board of Directors by action of the stockholders of the Company. The
holders of a majority of the Series A Preferred Stock, voting separately as a
single class in the election of directors of the Company, with each share of
Series A Preferred Stock entitled to one vote, have the right to elect one
member of the Board of Directors, as well as certain other rights to elect
directors if the Company does not declare and pay dividends on the Series A
Preferred Stock, as described above. See "Description of Capital
Stock--Preferred Stock." In accordance with the DGCL, directors serving on
classified boards of directors may only be removed from office for cause.
Vacancies on the Board of Directors may be filled by a majority of the
remaining directors, or by the sole remaining director or by the stockholders.
The Certificate provides that stockholders may take action by the written
consent of 662/3% of the stockholders, and that a special meeting of
stockholders may be called only by the Board of Directors. The By-Laws of the
Company provide that stockholders must follow an advance notification procedure
for certain stockholder nominations of candidates for the Board of Directors
and for certain other stockholder business to be conducted at an annual
meeting. These provisions could, under certain circumstances, operate to delay,
defer or prevent a change in control of the Company.

AUTHORIZED AND UNISSUED PREFERRED STOCK. Upon consummation of the
Offering, there will be 18,350,000 authorized and unissued shares of Preferred
Stock. The Company's Certificate of Incorporation authorizes the Board of
Directors to issue one or more series of Preferred Stock and to establish the
designations, powers, preferences and rights of each series of Preferred Stock.
The existence of authorized and unissued Preferred Stock may enable the Board
of Directors to render more difficult or to discourage an attempt to obtain
control of the Company by means of a merger,

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tender offer, proxy contest or otherwise. For example, if in the due exercise
of its fiduciary obligations, the Board of Directors were to determine that a
takeover proposal is not in the Company's best interests, the Board of
Directors could cause shares of Preferred Stock to be issued without
stockholder approval in one or more private offerings or other transactions
that might dilute the voting or other rights of the proposed acquirer or
insurgent stockholder or stockholder group or create a substantial voting block
in institutional or other hands that might undertake to support the position of
the incumbent Board of Directors. See "--Preferred Stock."

SPECIAL MEETINGS OF STOCKHOLDERS. The By-Laws provide that special
meetings of the stockholders of the Company may be called only by the Board of
Directors of the Company, the Chairman of the Board of the Company or the
President of the Company. This provision will render it more difficult for
stockholders to take action opposed by the Board of Directors.

INDEMNIFICATION. The Certificate of Incorporation provides that the
Company shall indemnify each director, officer, employee or agent of the
Company to the fullest extent permitted by law. The Certificate of
Incorporation limits the liability of the Company's directors and stockholders
for monetary damages in certain circumstances. The Certificate of Incorporation
also provides that the Company may purchase insurance on behalf of the
directors, officers, employees and agents of the Company against certain
liabilities they may incur in such capacity, whether or not the Company would
have the power to indemnify against such liabilities.

STOCKHOLDERS' RIGHTS PLAN

The Company intends to declare a dividend distribution of one right (a
"Right") for each outstanding share of Class A Common Stock, without par value
(the "Common Shares"), of the Company. The dividend will be payable to the
stockholders of record on a certain date (the "Record Date"), and with respect
to Common Shares issued thereafter until the Distribution Date (as defined
below) and, in certain circumstances, with respect to Common Shares issued
after the Distribution Date. Except as set forth below, each Right, when it
becomes exercisable, entitles the registered holder to purchase from the
Company one one-thousandth of a share of Series B Junior Preferred Stock,
without par value (the "Preferred Shares"), of the Company (the "Purchase
Price"), subject to adjustment. The description and terms of the Rights will be
set forth in a Rights Agreement (the "Rights Agreement") between the Company
and a Rights Agent (the "Rights Agent").

Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Right Certificates will be
distributed. The Rights will separate from the Common Shares upon the earliest
to occur of (i) the date of a public announcement that, without the prior
consent of a majority of the members of the Board of Directors, a person or
group of affiliated or associated persons having acquired beneficial ownership
of 15% or more of the outstanding Common Shares (except pursuant to a Permitted
Offer (as defined) or except for certain transactions by Grandfathered
Stockholders (as defined in the Rights Agreement) including the Mas Family, Mr.
Fitzgerald, Santos, Santos Capital or GE Capital, and certain of their
affiliates) or (ii) 10 days (or such later date as the Board may determine)
following the commencement or announcement of an intention to make a tender or
exchange offer, the consummation of which would result in a person or group
becoming an Acquiring Person (as defined) (the earliest of such dates being
called the "Distribution Date"). A person or group whose acquisition of Common
Shares causes a Distribution Date pursuant to clause (i) above is an "Acquiring
Person." The date that a person or group announces publicly that it has become
an Acquiring Person is the "Shares Acquisition Date."

The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Shares outstanding as of the Record Date, even without

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such notation or a copy of the Summary of Rights being attached thereto, will
also constitute the transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date (and to each initial record
holder of certain Common Shares issued after the Distribution Date), and such
separate Right Certificates alone will evidence the Rights.

The Rights are not exercisable until the Distribution Date and will expire
on the tenth anniversary of the Record Date unless earlier redeemed by the
Company as described below.

In the event that any person becomes an Acquiring Person (except pursuant
to a tender or exchange offer which is for all outstanding Common Shares at a
price and on terms which a majority of the members of the Board of Directors
determines to be adequate and in the best interests of the Company and its
stockholders, other than such Acquiring Person, its affiliates and associates
(a "Permitted Offer")), each holder of a Right will thereafter have the right
(the "Flip-In Right") to receive upon exercise the number of units of one
one-thousandth of a Preferred Share (or, in certain circumstances, other
securities of the Company) having a value (immediately prior to such triggering
event) equal to two times the exercise price of the Right. Notwithstanding the
foregoing, following the occurrence of the event described above, all Rights
that are, or (under certain circumstances specified in the Rights Agreement)
were, beneficially owned by any Acquiring Person or any affiliate or associate
thereof will be null and void.

In the event that, at any time following the Shares Acquisition Date, (i)
the Company is acquired in a merger or other business combination transaction
in which the holders of all of the outstanding Common Shares immediately prior
to the consummation of the transaction are not the holders of all of the
surviving corporation's voting power, or (ii) more than 50% of the Company's
assets or earning power is sold or transferred, in either case with or to an
Acquiring Person or any Affiliate or Associate thereof, or any other person in
which such Acquiring Person, Affiliate or Associate has an interest, or any
person acting on behalf of or in concert with such Acquiring Person, Affiliate
or Associate, or, if in such transaction all holders of Common Shares are not
treated alike, any other person, then each holder of a Right (except Rights
which previously have been voided as set forth above) shall thereafter have the
right (the "Flip-Over Right") to receive, upon exercise, common shares of the
acquiring company having a value equal to two times the Purchase Price. The
holder of a Right will continue to have the Flip-Over Right whether or not such
holder exercises or surrenders the Flip-In Right.

The Purchase Price payable, and the number of Preferred Shares, Common
Shares or other securities issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares at a
price, or securities convertible into Preferred Shares with a conversion price,
less than the then current market price of the Preferred Shares, or (iii) upon
the distribution to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above).

The number of outstanding Rights and the Purchase Price payable are also
subject to adjustment in the event of a stock split of the Common Shares or a
stock dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such
case, prior to the Distribution Date.

Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1.00 per share but, if greater, will be entitled
to an aggregate dividend per share of 1,000 times the dividend declared per
Common Share. In the event of liquidation, the holders of the Preferred Shares
will be entitled to a minimum preferential liquidation payment of $1,000 per
share; thereafter, and after the holders of the

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Common Shares receive a liquidation payment of $1.00 per share, the holders of
the Preferred Shares and the holders of the Common Shares will share the
remaining assets in the ratio of 1,000 to 1 (as adjusted) for each Preferred
Share and Capital Share so held, respectively. Finally, in the event of any
merger, consolidation or other transaction in which Common Shares are
exchanged, each Preferred Share will be entitled to receive 1,000 times the
amount received per Common Share. These rights are protected by customary
antidilution provisions. In the event that the amount of accrued and unpaid
dividends on the Preferred Shares is equivalent to six full quarterly dividends
or more, the holders of the Preferred Shares shall have the right, voting as a
class, to elect two directors in addition to the directors elected by the
holders of the Common Shares until all cumulative dividends on the Preferred
Shares have been paid through the last quarterly dividend payment date or until
non-cumulative dividends have been paid regularly for at least one year.

With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are one one-thousandth or integral multiples of one one-
thousandth of a Preferred Share, which may, at the election of the Company, be
evidenced by depository receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Shares on the last
trading day prior to the date of exercise.

At any time after a person becomes an Acquiring Person and prior to the
acquisition by such person or group of 50% or more of the Common Shares, the
Board of Directors of the Company may exchange the Rights (other than the
Rights owned by the Acquiring Person or its Associates and Affiliates, which
shall have become void) at an exchange ratio of one Common Share per Right
(subject to adjustment).

At any time prior to the earlier to occur of (i) a person becoming an
Acquiring Person or (ii) the expiration of the Rights the Company may redeem
the Rights in whole, but not in part, at a price of $0.001 per Right (the
"Redemption Price") which redemption shall be effective upon the action of the
Board of Directors. Additionally, following the Shares Acquisition Date, the
Company may redeem the then outstanding Rights in whole, but not in part, at
the Redemption Price, that such redemption is in connection with a merger or
other business combination transaction or series of transactions involving the
Company in which all holders of Common Shares are treated alike but not
involving an Acquiring Person or Transaction Person or any Affiliates or
Associates thereof. Upon the effective date of the redemption of the Rights,
the right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.

All of the provisions of the Rights Agreement may be amended by the Board
of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, defect or inconsistency, to make changes
which do not adversely affect the interests of holders of Rights (excluding the
interests of any Acquiring Person), or, subject to certain limitations, to
shorten or lengthen any time period under the Rights Agreement.

Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to stockholders of the Company, stockholders may, depending
upon the circumstances, recognize taxable income should the Rights become
exercisable or upon the occurrence of certain events thereafter.

Each outstanding Common Share on the Record Date will receive one Right.
As long as the Rights are attached to the Common Shares, the Company will issue
one Right with each new Common Share so that all such shares will have attached
rights. 1,000,000 Preferred Shares will be reserved for issuance upon exercise
of the Rights.

The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on (i) the Rights being

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redeemed, (ii) a substantial number of Rights being acquired or (iii) that the
offer will be deemed a "Permitted Offer" under the Rights Agreement. However,
the Rights should not interfere with any merger or other business combination
in connection with a Permitted Offer or that is approved by the Company because
the Rights are redeemable under certain circumstances.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Class A Common Stock is First
Union National Bank. The Company has not appointed a transfer agent for the
Class B Common Stock.

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<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Immediately following the consummation of the Offering, the Company will
have outstanding 16,065,350 shares of Class A Common Stock (17,070,350 shares
outstanding if the Underwriters' over-allotment option is exercised in full),
including 9,365,350 outstanding shares of Class A Common Stock beneficially
owned by existing stockholders. In addition, immediately following the
consummation of Offering, the Company will have 5,100,000 shares of Class B
Common Stock outstanding, all of which are convertible into shares of Class A
Common Stock. The 6,700,000 shares of Class A Common Stock to be sold pursuant
to the Offering (7,705,000 if the Underwriters' over-allotment option is
exercised in full) will be eligible for sale without restriction under the
Securities Act of 1933, as amended (the "Securities Act") in the public market
after the consummation of the Offering by persons other than affiliates of the
Company. Sales of shares by "affiliates" of the Company as the term is defined
in Rule 144 under the Securities Act ("Affiliates") will be subject to Rule
144. The Company and all existing common stockholders have agreed with the
Underwriters not to offer, sell or otherwise dispose of any shares of Class A
Common Stock (other than issuances by the Company pursuant to the employee
stock option plan) for a period of 180 days after the date of the Prospectus
without the prior written consent of Morgan Stanley & Co. Incorporated.

GE Capital owns all of the outstanding shares of Class B Common Stock. GE
Capital has the right to convert its Class B Common Stock to Class A Common
Stock and demand registration of its shares of Class A Common Stock under the
Securities Act. Registration of any shares held by GE Capital would permit the
sale of these shares without regard to the restrictions of Rule 144. Kevin P.
Fitzgerald, President and Chief Executive Officer of the Company, also has the
right to demand registration of shares he may acquire from the exercise of
certain options. Registration of any shares held by Mr. Fitzgerald would permit
the sale of these shares without regard to the restrictions of Rule 144. The
Mas family and Santos also have the right to demand registration of their
shares of Class A Common Stock under the Securities Act. Registration of any
shares held by the Mas family or Santos would permit the sale of these shares
without regard to the restrictions of Rule 144. Santos Capital has the right to
demand registration of shares it may acquire upon the exercise of certain
options. Registration of these shares would permit their sale without regard to
the restrictions of Rule 144. Mr. Fitzgerald, GE Capital, the Mas family,
Santos and Santos Capital have agreed to waive their right to exercise their
registration rights in connection with the Offering and for 180 days
thereafter. See "Description of Capital Stock-- Registration Rights." Based on
shares outstanding as of April 27, 1998, following the expiration or waiver of
the foregoing restrictions on dispositions and any applicable holding periods
under Rule 144, 9,365,350 shares of Class A Common Stock owned by existing
stockholders will be available for sale in the public market pursuant to Rule
144 (including the volume and other limitations set for therein). See
"Underwriting." The Company intends to register on Form S-8 1,741,870 shares of
Class A Common Stock reserved for issuance upon exercise of options granted to
certain employees under the Company's Incentive Stock Plan, and shares of Class
A Common Stock reserved for issuance upon the exercise of certain options
granted to Mr. Fitzgerald and Mr. Warren. Options to purchase 741,870 shares of
Class A Common Stock are currently exercisable or will be exercisable upon
completion of the Offering.

Prior to the Offering, there has been no market for the Class A Common
Stock of the Company. The Company can make no predictions as to the effect, if
any, that sales of shares or the availability of shares for sale will have on
market prices prevailing from time to time. Nevertheless, sales of substantial
amounts of the Class A Common Stock of the Company in the public market, or the
prospect of such sales, could adversely affect the market price of the Class A
Common Stock.

In general, under Rule 144 as presently in effect, beginning 90 days after
the date of this Prospectus, if a period of at least one year has elapsed since
the later of the date shares of Class A Common Stock that are "restricted
securities" (as that term is defined in Rule 144) were acquired from the
Company or the date they were acquired from an affiliate (as that term is
defined in Rule 144) of the Company, as applicable, then the holder of such
restricted shares (including an Affiliate) is entitled to sell a number of
shares within any three-month period that does not exceed the greater of 1% of
the

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then outstanding shares of Class A Common Stock (approximately 16,065,350
shares immediately after the consummation of the Offering, assuming that the
Underwriters' over-allotment option is not exercised) or the average weekly
trading volume of the Class A Common Stock on the New York Stock Exchange
during the four calendar weeks preceding such sale. The holder may only sell
such shares through unsolicited brokers' transactions. Sales under Rule 144 are
also subject to certain requirements pertaining to the manner of such sales,
notices of such sales and the availability of current public information
concerning the Company. Affiliates may sell shares not constituting restricted
securities in accordance with the foregoing volume limitations and other
requirements but without regard to the two-year holding period requirement.

Under Rule 144(k), if a period of at least two years has elapsed since the
later of the date restricted shares were acquired from the Company or the date
they were acquired from an Affiliate of the Company, as applicable, then a
holder of such restricted shares who is not an Affiliate of the Company at the
time of the sale and who has not been an Affiliate of the Company for at least
three months prior to the sale would be entitled to sell the shares immediately
without regard to the volume limitations and other conditions described above.

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UNDERWRITERS

Under the terms and subject to the conditions contained in an Underwriting
Agreement dated the date hereof (the "Underwriting Agreement"), the U.S.
Underwriters named below for whom Morgan Stanley & Co. Incorporated, BT Alex.
Brown Incorporated and Donaldson, Lufkin & Jenrette Securities Corporation are
acting as U.S. Representatives, and the International Underwriters named below
for whom Morgan Stanley & Co. International Limited, BT Alex. Brown
International, a division of Bankers Trust International PLC, and Donaldson,
Lufkin & Jenrette International are acting as International Representatives,
have severally agreed to purchase, and the Company has agreed to sell to them,
severally, the respective number of shares of Class A Common Stock set forth
opposite the names of such Underwriters below:

<TABLE>
<CAPTION>
NUMBER OF
SHARES
NAME -----------
<S> <C>
U.S. Underwriters:
Morgan Stanley & Co. Incorporated ...........................
BT Alex. Brown Incorporated .................................
Donaldson, Lufkin & Jenrette Securities Corporation .........

Subtotal ................................................... 5,360,000
---------
International Underwriters:
Morgan Stanley & Co. International Limited ..................
BT Alex. Brown International, a division of
Bankers Trust International PLC ...........................
Donaldson, Lufkin & Jenrette International ..................

Subtotal ................................................... 1,340,000
---------
Total ..................................................... 6,700,000
=========
</TABLE>

The U.S. Underwriters and the International Underwriters, and the U.S.
Representatives and the International Representatives, are collectively
referred to as the "Underwriters" and the "Representatives," respectively. The
Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the shares of Class A Common
Stock offered hereby are subject to the approval of certain legal matters by
their counsel and to certain other conditions. The Underwriters are obligated
to take and pay for all of the shares of Class A Common Stock offered hereby
(other than those covered by the U.S. Underwriters' over-allotment option
described below) if any such shares are taken.

Pursuant to the Agreement between U.S. and International Underwriters,
each U.S. Underwriter has represented and agreed that, with certain exceptions:
(i) it is not purchasing any Shares (as defined herein) for the account of
anyone other than a United States or Canadian Person (as defined herein) and
(ii) it has not offered or sold, and will not offer or sell, directly or
indirectly, any Shares or distribute any prospectus relating to the Shares
outside the United States or Canada or to anyone other than a United States or
Canadian Person. Pursuant to the Agreement between U.S. and International
Underwriters, each International Underwriter has represented and agreed that,
with certain exceptions: (i) it is not purchasing any Shares for the account of
any United States or Canadian Person and (ii) it has not offered or sold, and
will not offer or sell, directly or indirectly, any Shares or distribute any
prospectus relating to the Shares in the United States or Canada or to any
United States or Canadian Person. With respect to any Underwriter that is a
U.S. Underwriter and an International Underwriter, the foregoing
representations and agreements (i) made by it in its capacity as a U.S.
Underwriter apply

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<PAGE>

only to it in its capacity as a U.S. Underwriter and (ii) made by it in its
capacity as an International Underwriter apply only to it in its capacity as an
International Underwriter. The foregoing limitations do not apply to
stabilization transactions or to certain other transactions specified in the
Agreement between U.S. and International Underwriters. As used herein, "United
States or Canadian Person" means any national or resident of the United States
or Canada, or any corporation, pension, profit-sharing or other trust or other
entity organized under the laws of the United States or Canada or of any
political subdivision thereof (other than a branch located outside the United
States and Canada of any United States or Canadian Person), and includes any
United States or Canadian branch of a person who is otherwise not a United
States or Canadian Person. All shares of Class A Common Stock to be purchased
by the Underwriters under the Underwriting Agreement are referred to herein as
the "Shares."

Pursuant to the Agreement between U.S. and International Underwriters,
sales may be made between the U.S. Underwriters and International Underwriters
of any number of Shares as may be mutually agreed. The per share price of any
Shares so sold shall be the public offering price set forth on the cover page
hereof, in United States dollars, less an amount not greater than the per share
amount of the concession to dealers set forth below.

Pursuant to the Agreement between U.S. and International Underwriters,
each U.S. Underwriter has represented that it has not offered or sold, and has
agreed not to offer or sell, any Shares, directly or indirectly, in any
province or territory of Canada or to, or for the benefit of, any resident of
any province or territory of Canada in contravention of the securities laws
thereof and has represented that any offer or sale of Shares in Canada will be
made only pursuant to an exemption from the requirement to file a prospectus in
the province or territory of Canada in which such offer or sale is made. Each
U.S. Underwriter has further agreed to send to any dealer who purchases from it
any of the Shares a notice stating in substance that, by purchasing such
Shares, such dealer represents and agrees that it has not offered or sold, and
will not offer or sell, directly or indirectly, any of such Shares in any
province or territory of Canada or to, or for the benefit of, any resident of
any province or territory of Canada in contravention of the securities laws
thereof and that any offer or sale of Shares in Canada will be made only
pursuant to an exemption from the requirement to file a prospectus in the
province or territory of Canada in which such offer or sale is made, and that
such dealer will deliver to any other dealer to whom it sells any of such
Shares a notice containing substantially the same statement as is contained in
this sentence.

Pursuant to the Agreement between U.S. and International Underwriters,
each International Underwriter has represented and agreed that (i) it has not
offered or sold and, prior to the date six months after the closing date for
the sale of the Shares to the International Underwriters, will not offer or
sell, any Shares to persons in the United Kingdom except to persons whose
ordinary activities involve them in acquiring, holding, managing or disposing
of investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995; (ii) it has complied and will comply
with all applicable provisions of the Financial Services Act 1986 with respect
to anything done by it in relation to the Shares in, from or otherwise
involving the United Kingdom; and (iii) it has only issued or passed on and
will only issue or pass on in the United Kingdom any document received by it in
connection with the offering of the Shares to a person who is of a kind
described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such document
may otherwise lawfully be issued or passed on.

Pursuant to the Agreement between U.S. and International Underwriters,
each International Underwriter has further represented that it has not offered
or sold, and has agreed not to offer or sell, directly or indirectly, in Japan
or to or for the account of any resident thereof, any of the Shares acquired in
connection with the distribution contemplated hereby, except for offers or
sales to Japanese International Underwriters or dealers and except pursuant to
any exemption from the registration requirements of the Securities and Exchange
Law and otherwise in compliance with applicable

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<PAGE>

provisions of Japanese law. Each International Underwriter has further agreed
to send to any dealer who purchases from it any of the Shares a notice stating
in substance that, by purchasing such Shares, such dealer represents and agrees
that it has not offered or sold, and will not offer or sell, any of such
Shares, directly or indirectly, in Japan or to or for the account of any
resident thereof except for offers or sales to Japanese International
Underwriters or dealers and except pursuant to any exemption from the
registration requirements of the Securities and Exchange Law and otherwise in
compliance with applicable provisions of Japanese law, and that such dealer
will send to any other dealer to whom it sells any of such Shares a notice
containing substantially the same statement as is contained in this sentence.

The Underwriters initially propose to offer part of the shares of Class A
Common Stock directly to the public at the public offering price set forth on
the cover page hereof and part to certain dealers at a price that represents a
concession not in excess of $ a share under the public offering price. Any
Underwriter may allow, and such dealers may reallow, a concession not in excess
of $ a share to other Underwriters or to certain dealers. After the
initial offering of the shares of Class A Common Stock, the offering price and
other selling terms may from time to time be varied by the Representatives.

The Company has granted to the U.S. Underwriters an option, exercisable
for 30 days from the date of this Prospectus, to purchase up to an aggregate of
1,005,000 additional shares of Class A Common Stock at the public offering
price set forth on the cover page hereof, less underwriting discounts and
commissions. The U.S. Underwriters may exercise such option solely for the
purpose of covering over-allotments, if any, made in connection with the
offering of the shares of Class A Common Stock offered hereby. To the extent
such option is exercised, each U.S. Underwriter will become obligated, subject
to certain conditions, to purchase approximately the same percentage of such
additional shares of Class A Common Stock as the number set forth next to such
U.S. Underwriter's name in the preceding table bears to the total number of
shares of Class A Common Stock set forth next to the names of all U.S.
Underwriters in the preceding table.

The Underwriters have informed the Company that they do not intend sales
to discretionary accounts to exceed five percent of the total number of shares
of Class A Common Stock offered by them.

The Class A Common Stock has been approved for listing on the New York
Stock Exchange under the symbol "NFF."

Each of the Company and the directors, executive officers and certain
other stockholders of the Company has agreed that, without the prior written
consent of Morgan Stanley & Co. Incorporated on behalf of the Underwriters, it
will not, during the period ending 180 days after the date of this Prospectus,
(i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend or otherwise transfer or dispose of, directly or
indirectly, any shares of Class A Common Stock or any securities convertible
into or exercisable or exchangeable for Class A Common Stock or (ii) enter into
any swap or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of the Class A Common Stock,
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of Class A Common Stock or such other securities, in cash
or otherwise. The restrictions described in this paragraph do not apply to (x)
the sale of Shares to the Underwriters, (y) the issuance by the Company of
shares of Class A Common Stock upon the exercise of an option or a warrant or
the conversion of a security outstanding on the date of this Prospectus of
which the Underwriters have been advised in writing or (z) transactions by any
person other than the Company relating to shares of Class A Common Stock or
other securities acquired in open market transactions after the completion of
the offering of the Shares.

In order to facilitate the offering of the Class A Common Stock, the
Underwriters may engage in transactions that stabilize, maintain or otherwise
affect the price of the Class A Common Stock. Specifically, the Underwriters
may overallot in connection with the offering, creating a short position in

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<PAGE>

the Class A Common Stock for their own account. In addition, to cover
over-allotments or to stabilize the price of the Class A Common Stock, the
Underwriters may bid for, and purchase, shares of Class A Common Stock in the
open market. Finally, the underwriting syndicate may reclaim selling
concessions allowed to an Underwriter or a dealer for distributing the Class A
Common Stock in the offering, if the syndicate repurchases previously
distributed Class A Common Stock in transactions to cover syndicate short
positions, in stabilization transactions or otherwise. Any of these activities
may stabilize or maintain the market price of the Class A Common Stock above
independent market levels. The Underwriters are not required to engage in these
activities, and may end any of these activities at any time.

The Company and the Underwriters have agreed to indemnify each other
against certain liabilities, including liabilities under the Securities Act.

Bankers Trust Company, an affiliate of BT Alex. Brown Incorporated, will
act as agent under the New Credit Facility. In addition, Bankers Trust Company
is one of the lenders under the Term Loan. In each case, Bankers Trust Company
receives usual and customary fees. From time to time, Morgan Stanley & Co.
Incorporated has provided, and continues to provide, investment banking
services to the Company and its affiliates, in each case, receiving the usual
and customary fees.

Pursuant to the repayment of the Term Loan, Bankers Trust Company will
receive an amount greater than 10% of the net proceeds of the Offering. Bankers
Trust Company is an affiliate of BT Alex. Brown Incorporated, which is a member
of the National Association of Securities Dealers, Inc. (the "NASD").
Accordingly, the underwriting arrangements for the Offering will be made in
compliance with Rule 2710 (c)(8) and Rule 2720 of the Conduct Rules of the
NASD, which provides that, among other things, when an NASD member is to
receive an amount greater than 10% of the net proceeds of an offering, the
initial public offering price can be no higher than that recommended by a
"qualified independent underwriter" meeting certain standards. In accordance
with this requirement, Morgan Stanley & Co. Incorporated will serve in such
role and will recommend a price in compliance with the requirements of Rule
2720. In connection with the Offering, Morgan Stanley & Co. Incorporated, in
its role as a qualified independent underwriter, has performed due diligence
investigations and reviewed and participated in the preparation of the
Prospectus and the Registration Statement of which this Prospectus forms a
part.

At the request of the Company, the Underwriters have reserved for sale, at
the initial offering price, up to shares offered hereby for directors,
officers, employees, business associates, and related persons of the Company.
The number of shares of Class A Common Stock available for sale to the general
public will be reduced to the extent such persons purchase such reserved
shares. Any reserved shares which are not so purchased will be offered by the
Underwriters to the general public on the same basis as the other shares
offered hereby.

PRICING OF THE OFFERING

Prior to this offering, there has been no public market for the Class A
Common Stock. The initial public offering price will be determined by
negotiations between the Company and the U.S. Representatives. Among the
factors to be considered in determining the initial public offering price will
be the future prospects of the Company and its industry in general, sales,
earnings and certain other financial operating information of the Company in
recent periods, and the price-earnings ratios, price-sales ratios, market
prices of securities and certain financial and operating information of
companies engaged in activities similar to those of the Company. The estimated
initial public offering price range set forth on the cover page of this
Preliminary Prospectus is subject to change as a result of market conditions
and other factors.

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<PAGE>

CERTAIN UNITED STATES TAX CONSIDERATIONS
FOR NON-UNITED STATES HOLDERS

GENERAL

The following is a general discussion of the principal United States
federal income and estate tax consequences of the ownership and disposition of
Class A Common Stock by a Non-U.S. Holder, as defined below. As used herein,
the term "Non-U.S. Holder" means a holder that for United States federal income
tax purposes is an individual or entity other than (i) a citizen or individual
resident of the United States, (ii) a corporation or partnership created or
organized in or under the laws of the United States or of any political
subdivision thereof (other than a partnership treated as foreign under U.S.
Treasury regulations), (iii) an estate the income of which is subject to U.S.
federal income taxation regardless of its source or (iv) a trust if both (A) a
U.S. court is able to exercise primary supervision over the administration of
the trust and (B) one or more U.S. persons have the authority to control all
substantial decisions of the trust.

This discussion does not address all aspects of United States federal
income and estate taxes that may be relevant to Non-U.S. Holders in light of
their personal circumstances (including the fact that in the case of a Non-U.S.
Holder that is a partnership, the U.S. tax consequences of holding and
disposing of shares of Class A Common Stock may be affected by certain
determinations made at the partner level), or to certain types of Non-U.S.
Holders which may be subject to special treatment under United States federal
income tax laws (for example, insurance companies, tax-exempt organizations,
financial institutions, dealers in securities and holders of securities held as
part of a "straddle," "hedge," or "conversion transaction") and does not
address U.S. state or local or foreign tax consequences. Furthermore, this
discussion is based on provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), existing and proposed regulations promulgated thereunder
and administrative and judicial interpretations thereof, all as of the date
hereof, and all of which are subject to change, possibly with retroactive
effect. The following summary is included herein for general information.
ACCORDINGLY, PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR TAX ADVISERS
REGARDING THE UNITED STATES FEDERAL, STATE, LOCAL AND NON-U.S. INCOME AND OTHER
TAX CONSEQUENCES OF ACQUIRING, HOLDING AND DISPOSING OF SHARES OF COMMON STOCK.

An individual may, subject to certain exceptions, be deemed to be a
resident alien (as opposed to a nonresident alien) by virtue of being present
in the United States for at least 31 days in the calendar year and for an
aggregate of at least 183 days during a three-year period ending in the current
calendar year (counting for such purposes all of the days present in the
current year, one-third of the days present in the immediately preceding year
and one-sixth of the days present in the second preceding year). Resident
aliens are subject to U.S. federal tax as if they were U.S. citizens.

DIVIDENDS

The Company does not anticipate paying cash dividends on its capital stock
in the foreseeable future. See "Dividend Policy." In the event, however, that
dividends are paid on shares of Class A Common Stock, dividends paid to a
Non-U.S. Holder of Class A Common Stock generally will be subject to
withholding of United States federal income tax at a 30% rate, or such lower
rate as may be provided by an income tax treaty between the United States and a
foreign country if the Non-U.S. Holder is treated as a resident of such foreign
country within the meaning of the applicable treaty. Non-U.S. Holders should
consult their tax advisors regarding their entitlement to benefits under a
relevant income tax treaty.

Dividends that are effectively connected with: (i) a Non-U.S. Holder's
conduct of a trade or business in the United States (or, if an income tax
treaty applies, attributable to a permanent establishment), or, in the case of
the individual, a "fixed base" in the United States ("U.S. trade or business
income"), are generally subject to U.S. federal income tax on a net income
basis at regular

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<PAGE>

graduated rates, but are not generally subject to the 30% withholding tax if
the Non-U.S. Holder files the appropriate U.S. Internal Revenue Service ("IRS")
form with the payor (which form under U.S. Treasury regulations generally
effective for payments made after December 31, 1998 (the "Final Regulations"),
will require the Non-U.S. Holder to provide a U.S. taxpayer identification
number). Any U.S. trade or business income received by a Non-U.S. Holder that
is a corporation may also, under certain circumstances, be subject to an
additional "branch profits tax" at a 30% rate or such lower rate as may be
specified by an applicable income tax treaty.

Under currently applicable U.S. Treasury regulations, dividends paid to an
address in a foreign country are presumed (absent actual knowledge to the
contrary) to be paid to a resident of such country for purposes of the
withholding discussed above and for purposes of determining the applicability
of a tax treaty rate. Under the Final Regulations, however, a Non-U.S. Holder
of Class A Common Stock who wishes to claim the benefit of an applicable treaty
rate generally will be required to satisfy applicable certification and other
requirements. In addition, under the Final Regulations, in the case of Class A
Common Stock held by a foreign partnership, (i) the certification requirement
will generally be applied to the partners of the partnership and (ii) the
partnership will be required to provide certain information, including a United
States taxpayer identification number. The Final Regulations also provide
look-through rules for tiered partnerships.

A Non-U.S. Holder of Class A Common Stock that is eligible for a reduced
rate of U.S. withholding tax pursuant to an income tax treaty may obtain a
refund of any excess amounts withheld by filing an appropriate claim for a
refund with the IRS.

The Final Regulations also provide special rules for dividend payments
made to foreign intermediaries, U.S. or foreign wholly owned entities that are
disregarded for U.S. federal income tax purposes and entities that are treated
as fiscally transparent in the United States, the applicable income tax treaty
jurisdiction, or both. In addition, recently enacted legislation, effective
August 4, 1997, denies income tax treaty benefits to foreigners receiving
income derived through a partnership (or otherwise fiscally transparent entity)
in certain circumstances. Prospective investors should consult with their own
tax advisers concerning the effect, if any, of these new Treasury regulations
and the recent legislation on an investment in the Class A Common Stock.

GAIN ON DISPOSITION OF CLASS A COMMON STOCK

A Non-U.S. Holder generally will not be subject to U.S. federal income tax
in respect of gain recognized on a disposition of Class A Common Stock unless:
(i) the gain is U.S. trade or business income (in which case, the branch
profits tax described above may also apply to a corporate Non-U.S. Holder),
(ii) the Non-U.S. Holder is an individual who holds the Class A Common Stock as
a capital asset within the meaning of Section 1221 of the Code, is present in
the United States for 183 or more days in the taxable year of the disposition
and meets certain other requirements, (iii) the Non-U.S. Holder is subject to
tax pursuant to the provisions of the U.S. tax law applicable to certain United
States expatriates or (iv) the Company is or has been a "U.S. real property
holding corporation" for federal income tax purposes at any time during the
shorter of the five-year period preceding such disposition or the period that
the Non-U.S. Holder held the Class A Common Stock. Generally, a corporation is
a "U.S. real property holding corporation" if the fair market value of its
"U.S. real property interests" equals or exceeds 50% of the sum of the fair
market value of its worldwide real property interests plus its other assets
used or held for use in a trade or business. The Company believes that it has
not been, is not currently, and does not anticipate becoming, a "U.S. real
property holding corporation" for U.S. federal income tax purposes. The tax
with respect to stock in a "U.S. real property holding corporation" does not
apply to a Non-U.S. Holder whose holdings, direct and indirect, at all times
during the applicable period, constituted 5% or less of the Class A Common
Stock, provided that the Class A Common Stock was regularly traded on an
established securities market. If the Company were, or were to become, a U.S.
real property holding corporation, the Company believes that the Class A Common
Stock would be treated as "regularly traded."

69
<PAGE>

If a Non-U.S. Holder who is an individual is subject to tax under clause
(i) above, such individual generally will be taxed on the net gain derived from
a sale of Class A Common Stock under regular graduated United States federal
income tax rates. If an individual Non-U.S. Holder is subject to tax under
clause (ii) above, such individual generally will be subject to a flat 30% tax
on the gain derived from a sale, which may be offset by certain United States
capital losses (notwithstanding the fact that such individual is not considered
a resident alien of the United States). Thus, individual Non-U.S. Holders who
have spent (or expect to spend) more than a DE MINIMIS period of time in the
United States in the taxable year in which they contemplate a sale of Class A
Common Stock are urged to consult their tax advisers prior to the sale
concerning the U.S. tax consequences of such sale.

If a Non-U.S. Holder that is a foreign corporation is subject to tax under
clause (i) above, it generally will be taxed on its net gain under regular
graduated United States federal income tax rates and, in addition, will be
subject to the branch profits tax equal to 30% of its "effectively connected
earnings and profits," within the meaning of the Code for the taxable year, as
adjusted for certain items, unless it qualifies for a lower rate under an
applicable tax treaty.

FEDERAL ESTATE TAX

Class A Common Stock owned or treated as owned by an individual who is
neither a United States citizen nor a United States resident (as defined for
United States federal estate tax purposes) at the time of death will be
included in the individual's gross estate for United States federal estate tax
purposes, unless an applicable estate tax or other treaty provides otherwise
and, therefore, may be subject to United States federal estate tax.

INFORMATION REPORTING AND BACKUP WITHHOLDING TAX

Under United States Treasury regulations, the Company must report annually
to the IRS and to each Non-U.S. Holder the amount of dividends paid to such
holder and the tax withheld with respect to such dividends. Copies of the
information returns reporting such dividends and withholding may also be made
available to the tax authorities in the country in which the Non-U.S. Holder is
a resident under the provisions of an applicable income tax treaty or
agreement.

Currently, United States backup withholding (which generally is a
withholding tax imposed at the rate of 31% on certain payments to persons that
fail to furnish certain information under the United States information
reporting requirements) generally will not apply (i) to dividends paid to
Non-U.S. Holders that are subject to the 30% withholding discussed above (or
that are not so subject because a tax treaty applies that reduces such 30%
withholding) or (ii) before January 1, 1999, to dividends paid to a Non-U.S.
Holder at an address outside of the United States unless the payor has actual
knowledge that the payee is a U.S. Holder. Backup withholding and information
reporting generally will apply to dividends paid to addresses inside the United
States on shares of Class A Common Stock to beneficial owners that are not
"exempt recipients" and that fail to provide in the manner required certain
identifying information.

The payment of the proceeds of the disposition of Class A Common Stock by
a holder to or through the U.S. office of a broker or through a non-U.S. branch
of a U.S. broker generally will be subject to information reporting and backup
withholding at a rate of 31% unless the holder either certifies its status as a
Non-U.S. Holder under penalties of perjury or otherwise establishes an
exemption. The payment of the proceeds of the disposition by a Non-U.S. Holder
of Class A Common Stock to or through a non-U.S. office of a non-U.S. broker
will not be subject to backup withholding or information reporting unless the
non-U.S. broker has certain U.S. relationships. In the case of the payment of
proceeds from the disposition of Class A Common Stock effected by a foreign
office of a broker that is a U.S. person or a "U.S. related person," existing
regulations require information reporting on the payment unless the broker
receives a statement from the owner, signed under penalty of perjury,
certifying its non-U.S. status or the broker has documentary evidence in its
files as to the Non-U.S. Holder's foreign status and the broker has no actual
knowledge to the contrary. For this

70
<PAGE>

purpose, a "U.S. related person" is (i) a "controlled foreign corporation" for
U.S. federal income tax purposes or (ii) a foreign person 50% or more of whose
gross income from all sources for the three-year period ending with the close
of its taxable year preceding the payment (or for such part of the period that
the broker has been in existence) is derived from activities that are
effectively connected with the conduct of a U.S. trade or business.

The Regulations alter the foregoing rules in certain respects. Among other
things, such regulations provide certain presumptions under which a Non-U.S.
Holder is subject to backup withholding at the rate of 31% and information
reporting unless the Company receives certification from the holder of non-U.S.
status. Depending on the circumstances, this certification will need to be
provided (i) directly by the Non-U.S. Holder, (ii) in the case of a Non-U.S.
Holder that is treated as a partnership or other fiscally transparent entity,
by the partners, shareholders or other beneficiaries of such entity, or (iii)
by certain qualified financial institutions or other qualified entities on
behalf of the Non-U.S. Holder.

Any amounts withheld under the backup withholding rules from a payment to
a Non-U.S. Holder will be refunded (or credited against the holder's U.S.
federal income tax liability, if any) provided that the required information is
furnished to the IRS.

LEGAL MATTERS

The validity of the Common Stock offered hereby will be passed upon for
the Company by Fried, Frank, Harris, Shriver & Jacobson (a partnership
including professional corporations) 1001 Pennsylvania Avenue, N.W.,
Washington, D.C., 20004. Certain legal matters in connection with the Common
Stock offered hereby will be passed upon for the Underwriters by Cahill Gordon
& Reindel (a partnership including a professional corporation), 80 Pine Street,
New York, New York 10005.

EXPERTS

The audited financial statements of Neff Corp. and subsidiaries and of
Richbourg's Sales & Rentals, Inc. as of December 31, 1996 and 1997 and for each
of the three years in the period ended December 31, 1997 included in this
Prospectus and the related financial statement schedule of Neff Corp. and
subsidiaries included elsewhere in the Registration Statement have been audited
by Deloitte & Touche LLP, independent auditors, as stated in their reports
appearing herein and elsewhere in the registration statement, and are included
in reliance upon the reports of such firm given upon their authority as experts
in accounting and auditing.

The consolidated balance sheets as of July 31, 1996 and July 31, 1997 and
the consolidated statements of operations, stockholders' equity and cash flows
for each of the three years in the period ended July 31, 1997 of Industrial
Equipment Rentals, Inc. and subsidiary included in this Registration Statement
have been audited by Arthur Andersen LLP, independent public accountants, as
set forth in their report with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said report.

The consolidated financial statements of Sullair Argentina Sociedad
Anonima and its subsidiaries as of December 31, 1997 and 1996 and for each of
the three years in the period ended December 31, 1997 included in this
Registration Statement have been so included in reliance upon the report of
Price Waterhouse & Co. Buenos Aires, Argentina, independent accountants, given
on the authority of said firm as experts in auditing and accounting.

71
<PAGE>

ADDITIONAL INFORMATION

The Company has filed with the SEC a Registration Statement on Form S-1
under the Securities Act with respect to the shares of Class A Common Stock
offered hereby. This Prospectus, which constitutes part of the Registration
Statement, does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company and the Class A Common Stock, reference
is hereby made to such Registration Statement and the exhibits and schedules
thereto, copies of which may be inspected without charge at the public
reference facilities maintained by the SEC at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at its regional offices at: 75 Park
Place, Room 1228, New York, New York 10007 and 500 West Madison Street, Suite
1400, Chicago, Illinois 60621. Copies of such material may be obtained from the
Public Reference Section of the SEC, 450 Fifth Street, N.W., Washington, D.C.
at prescribed rates. The summaries in this Prospectus of additional information
included in the Registration Statement or any exhibit thereto are qualified in
their entirety by reference to such information or exhibit. The Class A Common
Stock has been approved for listing on the New York Stock Exchange under the
symbol "NFF." Reports and other information concerning the Company will be
available for inspection at the New York Stock Exchange, 70 Broad Street, New
York, NY 10005. In addition, registration statements and certain other filings
are publicly available through the Commission's site on the Internet's World
Wide Web, located at http://www.sec.gov. The Registration Statement, including
all exhibits thereto and amendments thereof, has been filed with the Commission
through EDGAR.

<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
NEFF CORP.
Independent Auditors' Report ................................................... F-2
Consolidated Balance Sheets as of December 31, 1996 and 1997 ................... F-3
Consolidated Statements of Operations for each of the three years
in the period ended December 31, 1997 ........................................ F-4
Consolidated Statements of Redeemable Preferred Stock and Common Stockholders'
Deficit for each of the three years in the period ended December 31, 1997 .... F-5
Consolidated Statements of Cash Flows for each of the three years
in the period ended December 31, 1997 ........................................ F-6
Notes to Consolidated Financial Statements ..................................... F-7
INDUSTRIAL EQUIPMENT RENTALS, INC. AND SUBSIDIARY
Report of Independent Public Accountants ....................................... F-22
Consolidated Balance Sheets as of July 31, 1996 and 1997 ....................... F-23
Consolidated Statements of Operations for each of the three years
in the period ended July 31, 1997 ............................................ F-24
Consolidated Statements of Stockholders' Equity for each of the three years
in the period ended July 31, 1997 ............................................ F-25
Consolidated Statements of Cash Flows for each of the three years
in the period ended July 31, 1997 ............................................ F-26
Notes to Consolidated Financial Statements ..................................... F-27
RICHBOURG'S SALES AND RENTALS, INC.
Independent Auditors' Report ................................................... F-38
Balance Sheets as of December 31, 1996 and 1997 ................................ F-39
Statements of Operations for each of the three years
in the period ended December 31, 1997 ........................................ F-40
Statements of Common Stockholders' Equity for each of the three years
in the period ended December 31, 1997 ........................................ F-41
Statements of Cash Flows for each of the three years
in the period ended December 31, 1997 ........................................ F-42
Notes to Financial Statements .................................................. F-43
SULLAIR ARGENTINA SOCIEDAD ANONIMA AND ITS SUBSIDIARY
SULLAIR SAN LUIS SOCIEDAD ANONIMA
Report of Independent Accountants .............................................. F-47
Consolidated Balance Sheets as of December 31, 1997 and 1996 ................... F-48
Consolidated Statements of Income for the years ended
December 31, 1997, 1996 and 1995 ............................................. F-49
Consolidated Statements of Changes in Shareholders' Equity for the years ended
December 31, 1997, 1996 and 1995 ............................................. F-50
Consolidated Statements of Cash Flows for the years ended
December 31, 1997, 1996 and 1995 ............................................. F-51
Notes to the Consolidated Financial Statements ................................. F-52
</TABLE>

F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

To Neff Corp.:

We have audited the accompanying consolidated balance sheets of Neff Corp.
and subsidiaries (the "Company"), as of December 31, 1996 and 1997, and the
related consolidated statements of operations, common stockholders' deficit and
cash flows for each of the three years in the period ended December 31, 1997.
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 generally accepted auditing
standards. 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 the Company as of December 31,
1996 and 1997, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 1997, in conformity with
generally accepted accounting principles.

Miami, Florida
March 11, 1998, except for the preferred stock exchange
referred to in Note 1 and for the third paragraph of Note 5
as to which the dates are March 25, 1998 and April 23, 1998, respectively
----------------
The accompanying consolidated financial statements reflect the 84.65 for
one stock split of the Company's outstanding common stock which is to be
effected on or about May 4, 1998. The above report is in the form which will be
furnished by Deloitte & Touche LLP upon completion of such stock split, which
is described in Note 1 to the consolidated financial statements and assuming
that from March 11, 1998 to the date of such stock split, no other events shall
have occurred that would affect the accompanying consolidated financial
statements and notes thereto.

DELOITTE & TOUCHE LLP

Miami, Florida
April 28, 1998

F-2
<PAGE>

NEFF CORP.

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS)

<TABLE>
<CAPTION>
PRO FORMA
DECEMBER 31, DECEMBER 31,
------------------------- -------------
1996 1997 1997
----------- ----------- -------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Cash and Cash Equivalents ............................................... $ 4,989 $ 2,885 $ 2,885
Accounts Receivable, net of allowance for doubtful accounts of $375 in
1996 and $1,092 in 1997................................................. 10,313 25,007 25,007
Inventories ............................................................. 7,429 6,072 6,072
Rental Equipment, net ................................................... 76,794 184,787 184,787
Property and Equipment, net ............................................. 4,304 23,737 23,737
Goodwill, net ........................................................... 667 29,444 29,444
Intangible Assets, net .................................................. 200 622 622
Prepaid Expenses and Other Assets ....................................... 4,422 8,236 8,236
-------- --------- ---------
Total Assets ......................................................... $109,118 $ 280,790 $ 280,790
======== ========= =========
LIABILITIES AND COMMON STOCKHOLDERS' DEFICIT
Liabilities
Accounts Payable ....................................................... $ 7,291 $ 10,871 $ 10,871
Accrued Expenses ....................................................... 1,068 11,248 11,248
Senior Credit Facility ................................................. 58,250 161,825 161,825
Term Loan Payable ...................................................... -- 49,916 49,916
Capitalized Lease Obligations .......................................... 1,454 2,320 2,320
Notes Payable .......................................................... -- 14,462 14,462
Deferred Income Taxes .................................................. 2,264 1,136 1,136
-------- --------- ---------
Total Liabilities .................................................... 70,327 251,778 251,778
-------- --------- ---------
Redeemable Preferred Stock
Series A Cumulative Redeemable Preferred Stock, $.01 Par Value, 520
Shares Authorized; 324 and 341 Shares Issued and Outstanding in
1996 and 1997, respectively .......................................... 9,486 10,649 10,649
Series B Cumulative Convertible Redeemable Preferred Stock,
$.01 Par Value, 800 Shares Authorized, Issued and Outstanding......... 5,324 8,336 --
Series C Cumulative Convertible Redeemable Preferred Stock,
$.01 Par Value, 800 Shares Authorized, Issued and Outstanding......... 31,489 31,562 --
Preferred Stock Dividend Payable--Series B and C ....................... -- 3,200 --
-------- --------- ---------
Total Redeemable Preferred Stock ..................................... 46,299 53,747 10,649
-------- --------- ---------
Commitments and Contingencies(Note 12) .................................. -- -- --
Common Stockholders' Deficit
Class A Common Stock; $.01 Par Value, 100,000 Shares Authorized;
8,465 Shares Issued and Outstanding .................................. 85 85 85
Class B Special Common Stock; $.01 Par Value, Liquidation Preference
$11.67, 20,000 Shares Authorized; 6,000 Shares Issued and
Outstanding .......................................................... -- -- 60
Additional Paid-in Capital ............................................. -- -- 43,038
Accumulated Deficit .................................................... (7,593) (24,820) (24,820)
-------- --------- ---------
Total Common Stockholders' Deficit ................................... (7,508) (24,735) 18,363
-------- --------- ---------
Total Liabilities and Common Stockholders' Deficit ................... $109,118 $ 280,790 $ 280,790
======== ========= =========
</TABLE>

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

F-3
<PAGE>

NEFF CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------
1995 1996 1997
---------- ------------ ------------
<S> <C> <C> <C>
Revenues
Rental Revenue ............................................. $ 20,019 $ 35,808 $ 68,056
Equipment Sales ............................................ 33,943 44,160 50,578
Parts and Service .......................................... 13,292 15,045 23,385
-------- -------- --------
Total Revenues ........................................... 67,254 95,013 142,019
-------- -------- --------
Cost of Revenues
Cost of Equipment Sold ..................................... 26,562 33,605 40,766
Depreciation of Rental Equipment ........................... 11,747 19,853 24,490
Maintenance of Rental Equipment ............................ 3,469 8,092 19,748
Cost of Parts and Service .................................. 7,504 8,143 13,741
-------- -------- --------
Total Cost of Revenues ................................... 49,282 69,693 98,745
-------- -------- --------
Gross Profit ................................................ 17,972 25,320 43,274
-------- -------- --------
Other Operating Expenses
Selling, General and Administrative Expenses ............... 10,956 18,478 30,129
Other Depreciation and Amortization ........................ 916 1,432 2,548
Officer Stock Option Compensation .......................... -- -- 4,400
-------- -------- --------
Total Other Operating Expenses ........................... 11,872 19,910 37,077
-------- -------- --------
Income from Operations ...................................... 6,100 5,410 6,197
-------- -------- --------
Other (Income) Expense
Interest Expense ........................................... 3,090 6,012 11,976
Amortization of Debt Issue Costs ........................... -- 325 2,362
-------- -------- --------
Total Other Expense, Net ................................. 3,090 6,337 14,338
-------- -------- --------
Income (Loss) before (Provision for) Benefit from Income
Taxes and Extraordinary Item ............................... 3,010 (927) (8,141)
(Provision for) Benefit from Income Taxes ................... (2,860) (461) 1,748
-------- -------- --------
Income (Loss) before Extraordinary Item ..................... 150 (1,388) (6,393)
Extraordinary Loss, Net of Income Taxes ..................... -- (809) (451)
-------- -------- --------
Net Income (Loss) ........................................... $ 150 $ (2,197) $ (6,844)
======== ======== ========
Unaudited Pro Forma Net Income:
Income Before Pro Forma Provision for Income Taxes ......... $ 3,010
Pro Forma Provision for Income Taxes ....................... (1,176)
--------
Pro Forma Net Income ........................................ $ 1,834
========
Basic and Diluted Earnings Per Share (pro forma for 1995):
Income (loss) before Extraordinary Item ..................... $ .22 $ (.66) $ (1.69)
Extraordinary Loss, net ..................................... -- (.10) ( .05)
-------- -------- --------
Net Income (Loss) ........................................... $ .22 $ (.76) $ (1.74)
======== ======== ========
Weighted Average Common Shares Outstanding
(Basic and Diluted) ........................................ 8,465 8,465 8,465
======== ======== ========
</TABLE>

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

F-4
<PAGE>

NEFF CORP.

CONSOLIDATED STATEMENT OF COMMON
STOCKHOLDERS' DEFICIT FOR EACH OF THE
THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1997

(IN THOUSANDS)

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
----------------- PAID-IN ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT TOTAL
-------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1994 (after giving retroactive effect to the
transaction discussed in Note 1) ................................ 8,465 $85 $2,799 $ 1,321 $ 4,205
Net income ....................................................... -- -- -- 150 150
Distributions to common stockholders ............................. -- -- (2,799) (3,487) (6,286)
----- --- ------ -------- --------
Balance, December 31, 1995 ....................................... 8,465 85 -- (2,016) (1,931)
Net loss ......................................................... -- -- -- (2,198) (2,198)
Preferred stock dividend ......................................... -- -- -- (979) (979)
Accretion of Series A Preferred Stock and
Detachable Stock Purchase Warrant ............................... -- -- -- (2,400) (2,400)
----- --- ------ -------- --------
Balance, December 31, 1996 ....................................... 8,465 85 -- (7,593) (7,508)
Net loss ......................................................... -- -- -- (6,844) (6,844)
Adjustment for acquired property and equipment
(Note 13), net of taxes ......................................... -- -- -- (2,936) (2,936)
Dividends in kind--Series A Preferred Stock ...................... -- -- -- (657) (657)
Preferred stock dividends accrued--Series B and C ................ -- -- -- (3,200) (3,200)
Accretion of Series A, B and C Preferred Stock ................... -- -- -- (3,590) (3,590)
----- --- ------ -------- --------
Balance, December 31, 1997 ....................................... 8,465 $85 $ -- $(24,820) $(24,735)
===== === ====== ======== ========
</TABLE>

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

F-5
<PAGE>

NEFF CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
-----------------------------------------
1995 1996 1997
----------- ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) ................................................ $ 150 $ (2,197) $ (6,844)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization ................................... 12,663 21,610 29,399
Officer stock option compensation ............................... -- -- 4,400
Gain on sale of rental equipment ................................ (8,846) (8,328) (11,856)
Extraordinary loss on debt extinguishment ....................... -- 1,298 722
Provision (benefit) for/(from) deferred income taxes ............ 2,860 (596) (1,748)
Change in operating assets and liabilities:
Accounts receivable ............................................ (1,487) (3,329) (8,341)
Inventories .................................................... 1,465 (2,227) 2,528
Other assets ................................................... (191) 255 (4,093)
Accounts payable and accrued expenses .......................... 866 2,831 5,240
Accrued financing costs ........................................ 2,143 (2,143) --
--------- --------- ----------
Net cash provided by operating activities ..................... 9,623 7,174 9,407
--------- --------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of rental equipment .................................... (52,795) (86,886) (143,999)
Proceeds from sale of rental equipment ........................... 33,943 44,160 50,578
Purchases of property and equipment .............................. (1,483) (1,972) (16,747)
Advances to affiliate under a note receivable .................... -- -- --
Cash paid for acquisitions ....................................... -- -- (63,605)
Other ............................................................ -- -- --
--------- --------- ----------
Net cash used in investing activities ......................... (20,335) (44,698) (173,773)
--------- --------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Debt issue costs ................................................. (1,623) (3,989) (2,425)
Net borrowings (repayments) under Senior Credit Facility ......... (250) -- 103,576
Advances under revolving credit facility ......................... -- 58,250 --
Borrowings under mortgage note ................................... -- -- 13,400
Borrowings under capitalized lease obligations ................... -- -- 866
Net borrowings (repayments) under floor plans payable ............ 10,039 (31,493) --
Borrowings under term loan ....................................... 17,135 -- 49,916
Repayments of notes payable ...................................... (11,285) (16,852) (135)
Repayments of notes payable to stockholders ...................... (4,836) -- --
Repayments under capitalized lease obligations ................... -- (222) --
Issuance of Series A preferred stock with detachable stock
purchase warrant, net of costs ................................. 11,430 -- --
Issuance of Series C preferred stock, net of costs ............... -- 31,489 --
Distributions to stockholders .................................... (6,286) -- (2,936)
--------- --------- ----------
Net cash provided by financing activities ..................... 14,324 37,183 162,262
--------- --------- ----------
Net Increase (Decrease) in Cash and Cash Equivalents ............. 3,612 (341) (2,104)
Cash and Cash Equivalents, Beginning of Year ..................... 1,718 5,330 4,989
--------- --------- ----------
Cash and Cash Equivalents, End of Year ........................... $ 5,330 $ 4,989 $ 2,885
========= ========= ==========
</TABLE>

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

F-6
<PAGE>

NEFF CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1--GENERAL

DESCRIPTION OF BUSINESS

Neff Corp. (the "Company") owns and operates equipment rental locations
throughout the southern and western regions of the United States. In addition
to its rental business, the Company acts as a dealer of new equipment on behalf
of several nationally recognized equipment manufacturers. The Company also
sells used equipment, spare parts and merchandise and provides ongoing repair
and maintenance services.

Neff Corp. was formed in 1995 to serve as a holding company for its
wholly-owned subsidiaries, Neff Machinery, Inc. ("Machinery") and Neff Rental,
Inc. ("Rental"). On December 26, 1995, the stockholders of Machinery and Rental
contributed 100% of their ownership interest in Machinery and Rental to Neff
Corp. in exchange for a 100% ownership interest in Neff Corp. The transaction
was accounted for as a reorganization of entities under common control (similar
to a pooling of interest business combination due to their common ownership).
As a result, the financial statements of Neff Corp. have been presented herein
as if Neff Corp. had conducted Machinery's and Rental's businesses since their
inception.

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries. All significant intercompany
balances and transactions have been eliminated.

STOCK SPLIT

The Company has effected a 84.65 for 1.00 stock split. The accompanying
financial statements reflect the stock split on a retroactive basis from the
beginning of the periods presented.

PREFERRED STOCK EXCHANGE

On March 25, 1998, General Electric Capital Corporation ("GE Capital")
exchanged their Series B and Series C Cumulative Convertible Redeemable
Preferred Stock for Class B Common Stock, liquidation preference $11.67. The
Company's unaudited pro forma balance sheet as of December 31, 1997 reflects
this exchange.

ACQUISITIONS

In August 1997, the Company purchased the common stock of Industrial
Equipment Rentals, Inc. ("IER") for approximately $3.6 million. This purchase
was funded by a $50 million term loan and borrowings under the Company's Senior
Credit Facility (see Note 5). IER has rental equipment operations similar to
the Company's in Alabama, Louisiana, Mississippi and Texas. The transaction was
accounted for under the purchase method. In connection with this purchase,
goodwill of approximately $29.2 million was recorded. Subsequent to the
acquisition, IER was merged into Neff Rental, Inc.

F-7
<PAGE>

NEFF CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 1--GENERAL--(CONTINUED)
UNAUDITED PRO FORMA INFORMATION

The following unaudited pro forma information has been prepared to reflect
the IER acquisition as if it was consummated as of January 1, 1996, after
giving effect to certain pro forma adjustments described below (in thousands).

<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31,
-------------------------
1996 1997
----------- -----------
<S> <C> <C>
Revenues ......................................................... $129,172 $163,799
======== ========
(Loss) income before (provision for) benefit from income taxes and
extraordinary item .............................................. $ (63) $ (8,625)
======== ========
Net (loss) income ................................................ $ (1,895) $ (7,248)
======== ========
Basic and diluted earnings per share
Basic ........................................................... $ (.62) $ (1.74)
======== ========
Diluted ......................................................... $ (.62) $ (1.74)
======== ========
</TABLE>

Pro forma adjustments reflect amortization of intangible assets,
depreciation of property and equipment and increased interest on borrowings to
finance the acquisitions. The unaudited pro forma information is based upon
certain assumptions and estimates and does not necessarily represent operating
results that would have occurred had the acquisitions been consummated as of
the beginning of the periods presented, nor is it necessarily indicative of
expected future operating results.

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles 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 over the rental period. Sales of equipment and parts
are recognized at the time of shipment or, if out on lease, at the time a sales
contract is finalized. Equipment may at times 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.

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.

F-8
<PAGE>

NEFF CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
RENTAL EQUIPMENT

Rental equipment is stated at cost less accumulated depreciation.
Depreciation is recorded using the straight-line method over the estimated
useful life of the related equipment (generally four to seven years with a 10%
residual value). For certain equipment, depreciation is matched against the
related rental income earned by computing depreciation on individual equipment
at the rate of 80% of the rental income earned. Routine repairs and maintenance
are expensed as incurred; improvements are capitalized at cost.

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

During 1996 and 1997, the Company made certain changes to its depreciation
assumptions to recognize extended estimated service lives and increased
residual values of its rental equipment. The Company believes that these
changes in estimates will more appropriately reflect its financial results by
better allocating the cost of its rental equipment over the service life of
these assets.

This change in accounting estimate reduced depreciation of rental
equipment, loss before extraordinary item and net loss by approximately $5.3
million and $3.3 million or $.63 and $.39 per common share, for the years ended
December 31, 1996 and 1997, respectively.

Rental Fleet accumulated depreciation at December 31, 1996 and 1997 was
approximately $20.6 million and $34.8 million, respectively.

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost less accumulated depreciation.
Depreciation is recorded using accelerated and straight-line methods 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 lesser of the lease term or the asset's estimated useful
life, and is included in depreciation and amortization expense in the
consolidated statements of operations.

INTANGIBLE ASSETS

Intangible assets primarily result from business combinations and include
agreements not to compete and other identifiable intangible assets. These
assets are amortized on a straight-line basis over the estimated useful life
(five to 15 years). Accumulated amortization at December 31, 1996 and 1997 was
approximately $0.2 million and $2.5 million, respectively.

Goodwill arising from acquisitions is being amortized over 40 years using
the straight-line method. Accumulated amortization at December 31, 1996 and
1997 was approximately $0.1 million and $0.5 million, respectively.

F-9
<PAGE>

NEFF CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
The carrying value of intangible assets is periodically reviewed by the
Company and impairments, if any, are recognized when the expected future
undiscounted cash flows derived from such intangible assets are less than their
carrying value.

During the first quarter of 1996, the Company adopted Statement No. 121,
("SFAS 121"), ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR
LONG-LIVED ASSETS TO BE DISPOSED OF, which requires impairment losses to be
recorded on long-lived assets used in operations when indicators of impairment
are present and the undiscounted cash flows estimated to be generated by those
assets are less than the assets' carrying amount. SFAS 121 also addresses the
accounting for long-lived assets that are expected to be disposed of. The
adoption of SFAS 121 did not have a material impact on the financial results of
the Company for the year ended December 31, 1996.

PREPAID EXPENSES AND OTHER ASSETS

Prepaid expenses and other assets primarily include debt issue costs,
prepaid expenses and deposits. Debt issue are amortized over the term of the
debt on a straight-line basis. For the years ended December 31, 1996 and 1997,
amortization of debt issue costs was $0.3 million and $2.4 million,
respectively. There was no amortization in 1995.

STOCK OPTIONS

In October 1995, the FASB issued Statement No. 123 ("SFAS 123"),
ACCOUNTING FOR STOCK-BASED COMPENSATION, which requires companies to either
recognize expense for stock-based awards based on their fair value on the date
of grant or provide footnote disclosures regarding the impact of such changes.
The Company adopted the provisions of SFAS 123 on January 1, 1996, but will
continue to account for options issued to employees or directors under the
Company's non-qualified stock option plans in accordance with Accounting
Principles Board Opinion No. 25 ("APB 25"), ACCOUNTING FOR STOCK ISSUED TO
EMPLOYEES.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1997, the FASB issued Statement No. 130 ("SFAS 130"), REPORTING
COMPREHENSIVE INCOME, which is required to be adopted in the first quarter of
1998. SFAS 130 established standards for the reporting and display of
comprehensive income and its components. Comprehensive income includes certain
non-owner changes in equity that are currently excluded from net income.

In June 1997, Statement No. 131 ("SFAS 131"), DISCLOSURES ABOUT SEGMENTS
OF AN ENTERPRISE AND RELATED INFORMATION, was issued. SFAS 131 establishes
standards for the way that public companies disclose selected information about
operating segments in annual financial statements and requires that those
companies disclose selected information about segments in interim financial
reports issued to shareholders. It also establishes standards for related
disclosures about products and services, geographic areas, and major customers.
SFAS 131 is effective for financial statements for periods beginning after
December 15, 1997. Accordingly, the Company is not required to adopt SFAS 131
until the fiscal year ending December 31, 1998. SFAS 131 relates solely to
disclosure provisions, and therefore will not have any effect on the results of
operations, financial position and cash flows of the Company.

RECLASSIFICATIONS

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

F-10
<PAGE>

NEFF CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
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 customer's financial condition and credit history. For sales
of certain 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 consist of the following (dollars in thousands):

<TABLE>
<CAPTION>
DECEMBER 31, ESTIMATED
------------------------- USEFUL LIVES
1996 1997 (IN YEARS)
----------- ----------- -------------
<S> <C> <C> <C>
Land ................................... $ -- $ 5,407 --
Buildings and improvements ............. -- 6,540 2-30
Office equipment ....................... 2,944 2,768 2-7
Service equipment and vehicles ......... 2,784 9,994 2-5
Shop equipment ......................... 1,060 2,075 7
Capitalized lease equipment ............ 1,706 3,230 3-5
-------- --------
8,494 30,014
Less accumulated depreciation .......... (4,190) (6,277)
-------- --------
$ 4,304 $ 23,737
======== ========
</TABLE>

The Company has entered into lease arrangements for certain property and
equipment which are classified as capital leases. Future minimum lease payments
under capitalized lease obligations are as follows (in thousands):

<TABLE>
<CAPTION>
1997
---------
<S> <C>
1998 ......................................................... $ 802
1999 ......................................................... 813
2000 ......................................................... 466
2001 ......................................................... 390
2002 ......................................................... 215
------
Total future minimum lease payments .......................... 2,686
Less amounts representing interest (6.00% to 13.5%) .......... (366)
------
Present value of net future minimum lease payments ........... $2,320
======
</TABLE>

F-11
<PAGE>

NEFF CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
NOTE 5--NOTES PAYABLE AND DEBT

Notes payable and debt consist of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1996 1997
---------- -----------
<S> <C> <C>
$250 million revolving line of credit with interest rates ranging from the
Lender's prime rate plus 1.5% to LIBOR plus 3.5%. At December 31,
1997, the Lender's prime rate was 8.5% and the LIBOR rate was
5.718% ...................................................................... $58,250 $161,825
$50 million Term Loan with an interest rate of LIBOR plus 3.5%................ -- 49,916
Mortgage note payable with an interest rate of LIBOR plus 2% ................. -- 13,400
Various notes payable assumed through acquisition of IER with interest
rates ranging from 7% to 12% and maturity dates through 2001. ............... -- 1,062
------- --------
$58,250 $226,203
======= ========
</TABLE>

In December 1996, the Company and its subsidiaries (collectively referred
to as the "Borrowers") executed a $250 million revolving credit facility (the
"Senior Credit Facility") with a syndicate of lenders (the "Lenders").
Borrowings under the Senior Credit Facility are based upon eligible accounts
receivable, rental fleet and inventory amounts.

During July and December 1997, the Borrowers amended the Senior Credit
Facility (the "Amendments") with the Lenders. The Amendments, among other
things, allowed the Company to complete the IER and Richbourg acquisitions (see
Note 1 and Note 15) and revised certain financial covenants. The interest rates
on balances outstanding under the amended facility vary based upon the leverage
ratio maintained by the Borrowers. All outstanding principal balances are due
in October 1998 unless the Borrowers successfully complete the sale of at least
$200 million of Qualified Debt Securities (as defined in the Amendments) in
which case they become due in October 2001. A commitment fee of 1/2 of 1% is
charged on the aggregate daily unused balance of the Senior Credit Facility.

The Senior Credit Facility is secured by substantially all of the
Borrowers' assets and contains certain restrictive covenants which, among other
things, require the Borrowers to maintain certain financial coverage ratios and
places certain restrictions on the payment of dividends. At December 31, 1997,
the Company was not in compliance with the minimum EBITDA covenant, as defined
in the Senior Credit Facility. For the year ended December 31, 1997, the
minimum EBITDA calculation was $44.8 million of EBITDA but was required to be
$45.9 million. The lenders under the Senior Credit Facility have waived this
non-compliance.

During August 1997, the Company entered into a $50 million term loan (the
"Term Loan") in connection with its acquisition of IER (see Note 1). The Term
Loan is secured by assets acquired and is due in January 1999. During January
1998, the Company repaid all outstanding principal balances due under the Term
Loan with borrowings under its Senior Credit Facility.

In May 1997, the Company purchased land and buildings related to several
of its locations (see Note 13). The purchase was financed with a lender in the
principal amount $13.4 million. The interest rate on the outstanding balance
varies based upon the leverage ratio of the Company. As of December 31, 1997
interest was being charged at an annual rate of LIBOR plus 2%. Five annual
principal payment installments commence in May 2002. The mortgage is secured by
the land and buildings acquired.

F-12
<PAGE>

NEFF CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 5--NOTES PAYABLE AND DEBT--(CONTINUED)
During 1996 and 1997, the Company recorded extraordinary losses of
approximately $1.3 million and $0.7 million from the write-off of debt issue
costs associated with the early extinguishment of debt, before the related
income tax benefit of approximately $0.5 million and $0.3 million,
respectively.

Future maturities of the notes payable and debt, based upon amounts
outstanding as of December 31, 1997, are as follows (in thousands):

<TABLE>
<S> <C>
1998 ............... $212,077
1999 ............... 312
2000 ............... 274
2001 ............... 140
2002 ............... 2,680
Thereafter ......... 10,720
--------
$226,203
========
</TABLE>

NOTE 6--REDEEMABLE PREFERRED STOCK AND DETACHABLE STOCK PURCHASE WARRANT

During December 1995, the Company issued 300,000 shares of Series A
Cumulative Redeemable Preferred Stock ("Series A"), and a detachable stock
purchase warrant (the "Redeemable Warrant") for $12.0 million ($11.4 million
net of certain related costs). Series A provides for the semiannual payment of
preferential dividends at an annual rate of 8% (5% beginning January 1, 1997)
of the liquidation value. The dividends are payable in cash or in additional
shares through the later of December 31, 1999 or the expiration of the
Company's Senior Credit Facility (see Note 5). Series A is scheduled to be
redeemed by the Company in December 2002 and restricts the payment of dividends
or any other distributions to holders of the Company's common stock.

The Redeemable Warrant granted the holder the right to acquire
approximately 20% of the common stock of the Company at a purchase price of
$.01 per share. The Redeemable Warrant was redeemable at the holder's option
during a specified period and at a price equal to its fair market value. The
Company had the option for a specified period of time to redeem the Redeemable
Warrant from the holder at a price equal to its fair market value as defined.
Series A and the Redeemable Warrant were recorded at their pro rata estimated
fair value in relation to the proceeds received on the date of issuance ($8.0
million for the Series A and $3.4 million for the Redeemable Warrant, net of
issue costs). Series A will be accreted to its liquidation value at maturity of
$12.0 million utilizing the effective interest method. The Redeemable Warrant
was being accreted to its fair value on a prospective basis until the mandatory
redemption date in December 2000. Through December 31, 1996, accretion to the
Series A and the Redeemable Warrant amounted to approximately $0.5 million and
$1.9 million, respectively.

During December 1996, in connection with the execution of the Senior
Credit Facility, the Company, and GE Capital, entered into certain agreements,
including an agreement to exercise the Redeemable Warrant for approximately 20%
of the Company's common stock. Simultaneously with this exercise, the Company
and GE Capital agreed to exchange the shares of common stock for 800,000 shares
of Series B Cumulative Convertible Redeemable Preferred Stock ("Series B"). The
accreted balance of the Redeemable Warrant on the date these agreements were
entered into was approximately $5.3 million which represented the carrying
value of Series B as of December 31, 1996. Series B is

F-13
<PAGE>

NEFF CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 6--REDEEMABLE PREFERRED STOCK AND DETACHABLE STOCK PURCHASE
WARRANT--(CONTINUED)
scheduled to be redeemed in December 2003 and provides for the payment of
dividends upon redemption of or upon conversion into common stock at an annual
rate of 5%. For the year ended December 31, 1997, accretion of Series A and
Series B amounted to approximately $0.5 million and $3.0 million, respectively.

In a separate transaction related to the Senior Credit Facility, the
Company issued 800,000 shares of Series C Cumulative Convertible Redeemable
Preferred Stock ("Series C") to GE Capital in exchange for $32.0 million ($31.5
million net of certain related costs). Series C is scheduled to be redeemed in
December 2003 and provides for the payment of dividends upon redemption or upon
conversion into common stock at an annual rate of 5%. For the year ended
December 31, 1997, accretion of Series C amounted to approximately $0.1
million. Series B and C may be converted to common stock for a conversion fee
of $1 per share. The conversion fee shall increase by $1 per share in June and
December of each year until conversion. Similarly to Series A, Series B and
Series C will be accreted to their ultimate total liquidation value of $64
million.

NOTE 7--STOCK OPTION PLANS

In December 1995, the Company granted a key employee the option to
purchase 3% (on a fully-diluted basis) of the common stock of the Company Since
the number of shares ultimately issuable to the key employee is not known at
the grant date, the Company estimates compensation expense at each reporting
date based upon the estimated market value of the shares to be issued. Changes
in the estimated market value of the shares to be issued continue to affect the
amount of compensation expense until the number of shares issuable are known.
No compensation expense was recognized in 1995 and 1996 since the exercise
price approximated the market value of the shares to be issued. Compensation
expense of $4.4 million was recognized in 1997. This option was one-third
vested on December 7, 1995, two-thirds vested on December 31, 1995 and fully
vested on December 31, 1996. The total exercise price for each one-third option
block, determined based upon a multiple of the Company's adjusted earnings, is
approximately $0.4 million, $0.5 million and $0.7 million, respectively. The
portion of the option that vested in 1995 expires in the year 2005 and the
balance of the option expires in the year 2006.

In May 1996, the Company also granted to another key employee an option to
purchase 84,650 shares of the Company's common stock at an exercise price of
approximately $0.5 million, determined based upon a multiple of the Company's
adjusted earnings. Since the number of shares ultimately issuable to the key
employee and the exercise price is known at the date, compensation expense is
measured only at the date of grant. No compensation expense has been recognized
at the date of grant since the exercise price of these options approximated the
estimated market value of the shares to be issued at the date of grant.

F-14
<PAGE>

NEFF CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 7--STOCK OPTION PLANS--(CONTINUED)
The following table sets forth pro forma net loss and earnings per share
as if the stock options were accounted for under the fair value method:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31,
-------------------------
1995 1996
---------- ------------
<S> <C> <C>
Pro forma net loss (in thousands) ......... $ (189) $ (2,439)
====== ========
Pro forma earnings per share
Basic ................................... $ (.02) $ (.69)
====== ========
Diluted ................................. $ (.02) $ (.69)
====== ========
</TABLE>

The fair value of options granted, in accordance with the provisions of
SFAS 123, were determined using the Black-Scholes option pricing model with a
risk-free interest rate of 6.74%, zero volatility and expected life of 10
years.

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
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
difference between the calculated share value, as determined pursuant to a
formula set forth in the Phantom Plan, of the Phantom Share on the date
redeemed by the employee and the value assigned on the date of grant represents
the cash award the employee is entitled to receive on the redemption date. The
Phantom Shares generally vest over five years. As of December 31, 1997, the
Company had granted 155,500 Phantom Shares with an assigned per share value of
$9. No compensation expense had been recorded in the accompanying statements
of operations as the assigned share value on the date of grant exceeds the
calculated share value as of December 31, 1997.

The Company has granted to GE Capital an option to acquire common stock of
the Company in an amount that would equal 51% ownership after conversion of the
Series B and Series C preferred stock. In connection with the conversion of the
Series B and Series C preferred stock, (see Note 15), the Company and GE
Capital plan to cancel this option. The exercise price for this option is based
upon fair market value of the Company determined on the date the option is
exercised. GE Capital may exercise the option at any time from July 1, 1998
until June 30, 1999.

NOTE 8--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 reductions. 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 $0.2
million and $0.3 million to the 401(k) Plan for the years ended December 31,
1996 and 1997, respectively.

F-15
<PAGE>

NEFF CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
NOTE 9--INCOME TAXES

As a result of the contribution by the stockholders of their ownership
interest as described in Note 1, the Company lost its Subchapter S Corporation
status under the provisions of the Internal Revenue Code. The Subchapter S
provisions provide that taxable income be included in the federal income tax
returns of the individual stockholders. As a result, the Company's net income
for the period from January 1, 1994 through December 26, 1995 is included in
the individual tax returns of the stockholders of the Company and therefore a
provision for income taxes related to this period is not included in the
accompanying statements of operations. Additionally, under the provisions of
Statement of Financial Accounting Standards No. 109, ACCOUNTING FOR INCOME
TAXES, the Company recorded a deferred tax liability upon losing Subchapter S
status for existing timing differences in the amount of approximately $2.9
million. The components of the (provision for) benefit from income taxes is as
follows (in thousands):

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
--------------------------------------
1995 1996 1997
=========== ============ =========
<S> <C> <C> <C>
Current .......... $ -- $ (1,057) $ --
Deferred ......... (2,860) 596 1,748
-------- -------- ------
Total ............ $ (2,860) $ (461) $1,748
======== ======== ======
</TABLE>

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

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
1996 1997
----------- -----------
<S> <C> <C>
DEFERRED TAX ASSETS:
Net operating loss carryforwards ............................. $ 809 $ 4,347
Alternative minimum tax credits .............................. 247 874
Deferred stock option compensation ........................... -- 1,672
Intangible assets, allowance for bad debts and other ......... 219 1,037
-------- --------
Total deferred tax assets ................................. 1,275 7,930
Valuation allowance ........................................... (809) (1,368)
DEFERRED TAX LIABILITIES--Depreciation ........................ (2,730) (7,698)
-------- --------
NET DEFERRED TAX LIABILITY .................................... $ (2,264) $ (1,136)
======== ========
</TABLE>

As of December 31, 1997, the Company had net operating loss carryforwards
for federal and state income tax purposes of approximately $11.4 million and
$12.7 million, respectively, expiring in 2012 (includes net operating loss
carryforwards for federal and state income tax purposes of approximately $4.4
million and $5.6 million, respectively, acquired in connection with the
acquisition of IER described in Note 1). IER's net operating loss carryforwards
may only be utilized by Rental. In addition, the Company has reduced the
adjustment to stockholders' equity by $1.8 million related to the tax benefit
of the acquisition of property from a related party (see Note 13).

Current accounting standards require that deferred income taxes reflect
the tax consequences on future years of differences between the tax bases of
assets and liabilities and their bases for financial reporting purposes. In
addition, future tax benefits, such as net operating loss (NOL) carryforwards,
are

F-16
<PAGE>

NEFF CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 9--INCOME TAXES--(CONTINUED)
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.

Even though the Company has incurred tax losses for the past two years,
management believes that it is more likely than not that the Company will
generate taxable income sufficient to realize the majority of the tax benefits
associated with future deductible temporary differences and NOL carryforwards
prior to their expiration. This belief is based upon, among other factors, the
fact that all of the Company's taxable temporary differences will reverse
within the period that the deductible temporary differences will be realized,
the availability of tax planning strategies, and projection of future taxable
income.

The following table summarizes the differences between the statutory
federal income tax rate and the Company's effective income tax rate (in dollars
thousands):

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------------
1995 1996 1997
-------------------------- ------------------------- ------------------------
AMOUNT PERCENTAGE AMOUNT PERCENTAGE AMOUNT PERCENTAGE
----------- ------------ ---------- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Statutory federal income tax
rate ............................... $ -- --% $ 315 34.0% $2,768 34.0%
State income tax, net of
federal income tax benefit ......... -- -- 33 3.5 171 2.1
Change in valuation allowance -- -- (809) (87.3) (559) (6.9)
Non-deductible expenses ............. -- -- -- -- (716) (8.8)
Loss of Subchapter S status on
December 26, 1995 .................. (2,860) (95.0) -- -- --
Other ............................... -- -- -- -- 84 1.1
-------- ----- ------ ----- ------ ----
$ (2,860) (95.0)% $ (461) (49.8)% $1,748 21.5%
======== ===== ====== ===== ====== ====
</TABLE>

Pro forma net income is presented in the accompanying statements of
operations to show the effects of income taxes as if the Company had been
subject to federal and applicable state income taxes based on the tax laws and
rates in effect during the applicable period. In addition, pro forma net income
has been adjusted for the effect of the deferred tax liability recognized by
the Company upon Machinery and Rental losing their Subchapter S Corporation
status in December 1995 as if the entities lost their Subchapter S status at
the beginning of each period presented.

F-17
<PAGE>

NEFF CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
NOTE 10--EARNINGS PER SHARE

For the years ended December 31, 1995, 1996 and 1997, the treasury stock
method was used to determine the dilutive effect of the options and warrants on
earnings per share data. Net loss from continuing operations per share and the
weighted average number of shares outstanding used in the computations are
summarized as follows (in thousands, except per share data):

<TABLE>
<CAPTION>
DECEMBER 31, 1995 DECEMBER 31, 1996 DECEMBER 31, 1997
----------------------- ------------------------- -------------------------
BASIC DILUTED BASIC DILUTED BASIC DILUTED
----------- ----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net income (loss) ...................... $ 1,834 $ 1,834 $ (2,197) $ (2,197) $ (6,844) $ (6,844)
Deduct:
Preferred stock dividend .............. -- -- 979 979 3,857 3,857
Accretion of preferred stock .......... -- -- 2,400 2,400 3,590 3,590
------- ------- -------- -------- --------- ---------
Income (loss) per share
computations .......................... 1,834 1,834 (5,576) (5,576) (14,291) (14,291)
Number of shares:
Weighted average common
shares outstanding .................. 8,465 8,465 8,465 8,465 8,465 8,465
Add:
Net additional shares
issued(1) ........................... -- -- -- -- -- --
------- ------- -------- -------- --------- ---------
Weighted average shares used
in the per share computations ......... 8,465 8,465 8,465 8,465 8,465 8,465
======= ======= ======== ======== ========= =========
Net income (loss) ...................... $ .22 $ .22 $ (.66) $ (.66) $ (1.69) $ (1.69)
======= ======= ======== ======== ========= =========
</TABLE>

- ----------------
(1) Assumes exercise of outstanding Common Stock equivalents (options and
warrants) at the beginning of the period, net of 20% limitation, if
applicable, on the assumed repurchase of stock.

NOTE 11--FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair market value of financial instruments held by the Company at
December 31, 1997 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.

DEBT

The fair value of the Company's credit facility is assumed to be equal to
its carrying value. At December 31, 1996 and 1997 approximately $58.2 million
and $161.8 million was outstanding under the credit facility, respectively.

The Company's Term Loan, mortgage note payable, other notes payable and
capitalized lease obligations are estimated to approximate fair value as
determined based on rates currently available to the Company from other
lenders.

PREFERRED STOCK

Series A, Series B and Series C do not have a quoted market price and the
Company does not believe it is practicable to estimate a fair value different
from each of the security's carrying value because of features unique to these
securities including, but not limited to, the right to appoint two

F-18
<PAGE>

NEFF CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 11--FAIR VALUE OF FINANCIAL INSTRUMENTS--(CONTINUED)
directors and super majority voting requirements. The amounts due upon
redemption of Series A, Series B and Series C is approximately $13.6 million,
$32.0 million and $32.0 million plus accrued and unpaid dividends,
respectively.

NOTE 12--COMMITMENTS AND CONTINGENCIES

The Company has agreements with certain equipment manufacturers which
appoint the Company, through its subsidiary, as the manufacturer's authorized
dealer in certain defined geographic areas. These agreements may be terminated
by dealers at any time. There can be no assurance that the Company will be able
to continue its current, or obtain additional, dealership agreements. The
Company's operating results could be materially adversely impacted if these
dealership agreements were terminated for any reason.

The Company is a party to certain legal actions arising in the normal
course of business. In the opinion of management, the ultimate outcome of such
litigation is not expected to have a material effect on the financial position,
results of operations or cash flows of the Company.

NOTE 13--RELATED PARTY TRANSACTIONS AND OTHER COMMITMENTS

In May 1997, the Company acquired certain land and buildings used in its
Florida operations for approximately $13.9 million from Atlantic Real Estate
Holdings Corp. ("Atlantic"), an affiliate of the Company through common
ownership ("Atlantic Acquisition"). Prior to the acquisition of these assets,
the Company leased these properties from Atlantic. The Company financed
approximately $13.4 million of the purchase price with a mortgage note payable
(see Note 5). The remaining purchase price consisted of the forgiveness of
approximately $0.5 million in notes receivable from Atlantic. The assets have
been recorded at Atlantic's historical carrying value and approximately $2.9
million, net of income tax benefit of approximately $1.8 million, has been
recorded as a distribution to common stockholders in the accompanying statement
of common stockholders' deficit.

During 1995, 1996, and 1997, revenues from affiliated companies amounted
to approximately $1.7 million, $1.5 million and $0.7 million, respectively.

OPERATING LEASES

Prior to the Atlantic Acquisition the Company leased certain office and
operating facilities from Atlantic and from other unaffiliated entities under
noncancellable operating leases expiring from 2000 through 2007. During 1995,
1996, and 1997, rental expense under operating lease arrangements amounted to
approximately $1.7 million, $2.1 million, and $3.4 million, respectively.

F-19
<PAGE>

NEFF CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 13--RELATED PARTY TRANSACTIONS AND OTHER COMMITMENTS--(CONTINUED)
As of December 31, 1997, future minimum rental payments under operating
lease arrangements are as follows for the years ending December 31 (in
thousands):

<TABLE>
<S> <C>
1998 ............... $ 2,400
1999 ............... 2,192
2000 ............... 1,999
2001 ............... 1,549
2002 ............... 957
Thereafter ......... 2,029
-------
$11,126
=======
</TABLE>

NOTE 14--SUPPLEMENTAL STATEMENTS OF CASH FLOWS INFORMATION

<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER31,
----------------------------------
1995 1996 1997
--------- --------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest ............................................ $3,173 $6,012 $10,367
====== ====== =======
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES
Purchase of equipment under capitalized lease obligations ......... $ -- $1,235 $ --
------ ------ -------
</TABLE>

NOTE 15--SUBSEQUENT EVENTS

During January 1998, the Company acquired substantially all of the assets
of Richbourg's Sales and Rentals, Inc. ("Richbourg") for approximately $100
million. Richbourg has rental equipment operations similar to the Company's
with 17 locations in three states. In connection with this acquisition, the
Company amended its Senior Credit Facility (see Note 5) and executed a $100
million term loan (the "Richbourg Term Loan") with terms and requirements
similar to the Company's Senior Credit Facility.

In February 1998, the Company entered into letters of intent to acquire
three equipment rental companies. These businesses have a total of three
equipment rental locations in California and Texas. Each of these acquisitions
is subject to a number of closing conditions, including the execution of
definitive purchase agreements, and there can be no assurance that these
acquisitions will be consummated.

The Company plans to commence an initial public offering of its Class A
Common Stock (the "Public Offering"). The Company expects to receive
approximately $125 million in proceeds from the Public Offering. The Company
intends to use the net proceeds to repay the Richbourg Term Loan and reduce
amounts outstanding under the Senior Credit Facility.

Prior to the Public Offering, the Company's Senior Credit Facility is
expected to be amended (the "New Credit Facility"). Borrowings under the New
Credit Facility will continue to be based upon eligible accounts receivable,
rental fleet and inventory amounts. The interest rates on balances outstanding
under the New Credit Facility will vary based upon the leverage ratio
maintained by the Company and range from prime rate or LIBOR plus 1% to prime
plus 1.25% or LIBOR plus 2.25%. In the event the Company repays the Richbourg
Term Loan prior to October 31, 1998, the maturity of the New Credit Facility
will be due in April 2003, otherwise, the New Credit Facility will mature on
October 31, 1998.

F-20
<PAGE>

NEFF CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 15--SUBSEQUENT EVENTS--(CONTINUED)
In addition, GE Capital is expected to exchange its Series B and Series C
preferred stock for shares of the Company's Class B Common Stock, liquidation
preference $11.67, prior to the Public Offering. It is also contemplated that
the Company will establish an incentive stock plan for officers and employees
concurrent with the Public Offering.

The Company also expects to commence a private debt offering (the "Private
Debt Offering"). Proceeds from the Private Debt Offering will be used to redeem
Series A and reduce amounts outstanding under the New Credit Facility.

There can be no assurance that the Public Offering or Private Debt
Offering will be consummated.

* * * * * *

F-21
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

The independent auditors' report of Deloitte & Touche LLP related to the
consolidated financial statements of Neff Corp. for the three years in the
period ended December 31, 1997 has not been issued. Deloitte & Touche LLP has
indicated the form of report which will be furnished upon completion of a Neff
Corp. stock split and so long as no other events shall have occurred that would
affect the Neff Corp. consolidated financial statements. After Deloitte &
Touche issues their report on Neff Corp., we expect to be in a position to
render the following audit report so long as no other events shall have
occurred that would affect the Industrial Equipment Rentals, Inc. consolidated
financial statements.

Arthur Andersen LLP

Houston, Texas
September 18, 1997

To the Stockholders of
Industrial Equipment Rentals, Inc.

We have audited the accompanying consolidated balance sheets of Industrial
Equipment Rentals, Inc. (a Delaware corporation), and subsidiary (the Company)
as of July 31, 1996 and 1997, and the related consolidated statements of
operations, stockholders' equity and cash flows for each of the three years in
the period ended July 31, 1997. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based upon our audits.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of the Company
as of July 31, 1996 and 1997, and the results of their operations and their
cash flows for each of the three years in the period ended July 31, 1997, in
conformity with generally accepted accounting principles.

The accompanying consolidated financial statements do not reflect any
adjustments associated with the sale of the Company on August 1, 1997 (see Note
2).

Houston, Texas
September 18, 1997

F-22
<PAGE>

INDUSTRIAL EQUIPMENT RENTALS, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARES)

<TABLE>
<CAPTION>
JULY 31,
---------------------------
1996 1997
------------ ------------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents ............................................... $ 2,160 $ 1,582
Accounts receivable, net ................................................ 5,487 6,058
Inventories ............................................................. 1,321 1,247
Prepaid expenses and other .............................................. 1,006 1,100
--------- ---------
Total Current Assets ................................................... 9,974 9,987
Property, Plant and Equipment, at Cost
Rental equipment ........................................................ 37,890 39,812
Other ................................................................... 4,626 5,100
--------- ---------
42,516 44,912
Less: Accumulated depreciation .......................................... (10,729) (16,779)
--------- ---------
31,787 28,133
Other Assets, net ........................................................ 2,306 1,787
--------- ---------
Total Assets ........................................................... $ 44,067 $ 39,907
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable ........................................................ $ 2,345 $ 1,956
Accrued expenses ........................................................ 1,845 1,602
Current portion of subordinated debentures .............................. 0 8,171
Capital lease obligation ................................................ 103 74
Current portion of long-term debt ....................................... 5,809 22,630
--------- ---------
Total Current Liabilities .............................................. 10,102 34,433
Long-Term Liabilities
Long-term debt, less current portion .................................... 21,288 621
Other long-term liabilities ............................................. 454 225
Subordinated debentures, less current portion ........................... 7,811 0
Deferred taxes .......................................................... 831 1,078
--------- ---------
Total Long-Term Liabilities ............................................ 30,384 1,924
--------- ---------
Total Liabilities ...................................................... 40,486 36,357
--------- ---------
Senior mandatorily redeemable convertible preferred stock, Series A $1
par; 107,500 shares outstanding; $20 per share redemption value......... 1,226 1,347
--------- ---------
Stockholders' Equity
Senior redeemable convertible preferred stock, Series B ................. 495 495
Junior preferred stock .................................................. 19 19
Common stock, $.01 par; 876,500 and 881,500 shares
outstanding, respectively ............................................. 9 9
Paid-in capital ......................................................... 2,806 2,806
Retained deficit ........................................................ (974) (1,126)
--------- ---------
Total Stockholders' Equity ............................................. 2,355 2,203
--------- ---------
Total Liabilities and Stockholders' Equity ............................. $ 44,067 $ 39,907
========= =========
</TABLE>

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

F-23
<PAGE>

INDUSTRIAL EQUIPMENT RENTALS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED JULY 31,
------------------------------------
1995 1996 1997
---------- ---------- ----------
<S> <C> <C> <C>
Revenues:
Rentals and related revenues ............................................ $17,522 $26,056 $30,012
Sales revenues .......................................................... 3,841 4,225 3,999
Sales of fixed assets ................................................... 1,798 2,925 1,860
------- ------- -------
Total Revenues ......................................................... 23,161 33,206 35,871
Costs and Expenses:
Rentals and related expenses ............................................ 4,374 6,663 7,019
Cost of sales ........................................................... 2,611 3,353 3,155
Cost of fixed assets disposed ........................................... 748 2,016 1,203
Wages and benefits ...................................................... 6,461 8,671 9,075
Depreciation ............................................................ 3,454 5,961 7,308
Facilities .............................................................. 864 1,400 1,636
Selling and administrative expenses ..................................... 1,446 1,796 1,659
Amortization expense .................................................... 533 596 689
------- ------- -------
Total Costs and Expenses ............................................... 20,491 30,456 31,744
------- ------- -------
Operating Income ......................................................... 2,670 2,750 4,127
Interest expense ........................................................ 2,001 3,057 3,291
Other ................................................................... 97 97 328
------- ------- -------
Income (Loss) Before Taxes ............................................... 572 (404) 508
Income Tax Expense (Benefit) ............................................ 267 (47) 296
------- ------- -------
Net Income (Loss) Before Extraordinary Item .............................. 305 (357) 212
Extraordinary loss on debt refinancing, net of tax benefit of $83........ -- (136) --
------- ------- -------
Net Income (Loss) ........................................................ $ 305 $ (493) $ 212
======= ======= =======
</TABLE>

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

F-24
<PAGE>

INDUSTRIAL EQUIPMENT RENTALS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED JULY 31, 1997

(IN THOUSANDS)

<TABLE>
<CAPTION>
SENIOR
REDEEMABLE
CONVERTIBLE
PREFERRED JUNIOR
STOCK PREFERRED COMMON PAID-IN RETAINED
SERIES B STOCK STOCK CAPITAL DEFICIT TOTAL
------------ ----------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Balance, July 31, 1994 .................... $ -- $19 $ 9 $1,490 $ (58) $1,460
Net Income ................................ -- -- -- -- 305 305
Proceeds from Preferred Stock Issuance .... 495 -- -- 1,318 -- 1,813
Dividends ................................. -- -- -- -- (243) (243)
Accretion of Preferred Stock .............. -- -- -- -- (121) (121)
---- --- --- ------ -------- ------
Balance, July 31, 1995 .................... 495 19 9 2,808 (117) 3,214
Net Loss .................................. -- -- -- -- (493) (493)
Cost of Preferred Stock
Issuance ................................ -- -- -- (2) -- (2)
Dividends ................................. -- -- -- -- (243) (243)
Accretion of Preferred Stock .............. -- -- -- -- (121) (121)
---- --- --- ------- -------- -------
Balance, July 31, 1996 .................... 495 19 9 2,806 (974) 2,355
Net Income ................................ -- -- -- -- 212 212
Dividends ................................. -- -- -- -- (243) (243)
Accretion of Preferred Stock .............. -- -- -- -- (121) (121)
---- --- --- ------- -------- -------
Balance, July 31, 1997 .................... $495 $19 $ 9 $2,806 $ (1,126) $2,203
==== === === ======= ======== =======
</TABLE>

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

F-25
<PAGE>

INDUSTRIAL EQUIPMENT RENTALS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED JULY 31,
----------------------------------------
1995 1996 1997
----------- ------------ -----------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net income (loss) ................................................... $ 305 $ (493) $ 212
Depreciation and amortization expense ............................... 3,987 6,557 7,997
Less: Gain on sale of property and equipment ........................ (966) (909) (657)
Increase (decrease) in deferred tax liability ....................... 259 (192) 247
Increase (decrease) in operating cash flows resulting from:
Accounts receivable ................................................ (1,088) (746) (311)
Inventories ........................................................ (534) 511 73
Prepaid expense and other .......................................... 165 69 151
Accounts payable ................................................... 973 (395) (402)
Accrued expenses ................................................... 309 479 (257)
-------- --------- --------
Net Cash Provided by Operating Activities ............................ 3,410 4,881 7,053
Cash Flows from Investing Activities:
Cost of acquisitions, net ........................................... (96) (3,481) (1,710)
Purchases of property and equipment
Rental equipment ................................................... (4,866) (10,101) (3,376)
Other property and equipment ....................................... (1,070) (1,277) (432)
Proceeds from sale of property and equipment ........................ 1,798 2,925 1,860
-------- --------- --------
Net Cash used for Investing Activities ............................... (4,234) (11,934) (3,658)
Cash Flows from Financing Activities:
Payments of equipment contracts ..................................... (752) (1,924) (2,675)
Retirement of debt on equipment contracts ........................... (397) (1,600) (328)
Payments/principal reductions on term loan .......................... (3,015) (2,166) (995)
Payments of other long-term capital financings ...................... (139) (229) (3,891)
Net borrowings under revolving facility ............................. 1,156 1,818 332
Proceeds from Capex notes ........................................... 4,362 7,151 3,466
Proceeds from issuance of subordinated debentures, including interest
payable ........................................................... 3,666 337 361
Cost relating to issuance of subordinated debentures ................ (42) -- --
Proceeds from issuance of Series B senior redeemable convertible
preferred stock, net .............................................. 1,813 -- --
Cost relating to refinancing of debt agreement ...................... -- 129 --
Dividends paid on preferred stock ................................... (243) (243) (243)
-------- --------- --------
Net Cash Provided by (used for) Financing Activities ................. 6,409 3,273 (3,973)
Net Increase (Decrease) in Cash and cash equivalents ................. 5,585 (3,780) (578)
Cash and cash equivalents at beginning of period .................... 355 5,940 2,160
-------- --------- --------
Cash and cash equivalents at end of period .......................... $ 5,940 $ 2,160 $ 1,582
======== ========= ========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
Vendor financing of equipment purchases ............................. $ 618 $ 8,408 $ 1,430
Business assets acquired through seller financing ................... 90 750 266
Proceeds from capital lease obligations ............................. -- 79 --
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the year for:
Interest ........................................................... $ 1,972 $ 3,010 $ 2,926
Income taxes ....................................................... 25 70 48
</TABLE>

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

F-26
<PAGE>

INDUSTRIAL EQUIPMENT RENTALS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1--ORGANIZATION

The accompanying consolidated financial statements include the accounts of
Industrial Equipment Rentals, Inc. ("IER") and its wholly-owned subsidiary,
Buckner Rental Service, Inc. ("BRS," formerly IER Acquisition Corp.). IER and
BRS (the "Company"), were incorporated in the state of Delaware in May 1993.
The Company is a full service equipment rental company servicing industrial,
commercial and construction customers along the Gulf Coast. The Company rents,
sells and services a broad line of construction and industrial equipment at
each of its rental locations.

NOTE 2--SALE OF BUSINESS AND BASIS OF ACCOUNTING

Effective August 1, 1997, the Company shareholders sold their stock in the
Company to Neff Corp. The accompanying consolidated financial statements
present the Company's financial position as of July 31, 1996 and 1997 and the
results of operations and cash flows for the three years in the period ended
July 31, 1997, prior to the sale. Accordingly, the consolidated financial
statements do not include any of the expected purchase price adjustments
associated with the sale of the Company listed below, among others.

a. A pushdown of the buyer's purchase accounting, (including elimination of
existing goodwill) was made immediately following the sale of the Company.

b. In connection with the above transaction, the Company's corporate
structure has been reorganized. As part of the restructuring, IER was
merged into its wholly-owned subsidiary ("BRS"), which has become the
wholly-owned subsidiary of another corporate entity. Shortly after closing
the transaction, the newly merged entity was merged into its new owner.

c. Due to the redemption of the 107,500 shares of non-voting $1 par Series
A Senior Redeemable Convertible Preferred Stock (the "Senior Series A") on
August 1, 1997, there was a charge to retained earnings of $0.8 million to
accrete the stock to its redemption value (see Note 9). A similar charge
of $0.4 million was made for the redemption of the 18,936 shares of
non-voting, $1 par Junior Preferred Stock (the "Junior Series") along with
adjustments for conversion of the 495,000 shares of voting $1 par Series B
Redeemable Convertible Preferred Stock (the "Senior Series B") into one
share of common stock which were redeemed for $10.2 million immediately
upon sale of the Company (see Note 9).

d. On August 1, 1997, substantially all of the Company's long-term debt was
repaid using proceeds from the sale. As a result, the Company was required
to pay approximately $81,000 in prepayment penalties and write off a total
of $0.1 milion in unamortized debt issue costs immediately after the
long-term debt was paid.

e. The Company incurred $1 million in closing fees, including $0.3 million
in closing bonuses, in conjunction with the sale.

f. Due to the change of control and separate return limitations as a result
of the sale of the Company, the deferred tax assets recorded for federal
and state tax net operating losses and alternative minimum tax
carryforwards of approximately $2.1 million as of July 31, 1997 will be
subject to restrictions on use. No adjustment has been reflected in the
accompanying financial statements to allow for such potential
restrictions.

F-27
<PAGE>

INDUSTRIAL EQUIPMENT RENTALS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 3--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CONSOLIDATION

The accompanying consolidated financial statements include the accounts of
the Company and BRS. All significant intercompany accounts and transactions
have been eliminated.

USE OF ESTIMATES

The preparation of the consolidated financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent 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.

CASH EQUIVALENTS

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

ACCOUNTS RECEIVABLE

The Company recognizes revenue on monthly contracts and other open
contracts based on the number of days of equipment usage occurring prior to the
end of the fiscal year. Accounts receivable are net of allowances for doubtful
accounts of $0.2 million at July 31, 1996 and 1997.

INVENTORIES

The Company maintains inventories of equipment for resale, parts,
merchandise and tools. Inventories are valued at the lower of cost (first-in,
first-out) or market. There was no work-in-process inventory at July 31, 1996
or 1997.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost and depreciated on a
straight-line basis over the estimated useful lives of the assets. Rental
equipment with useful lives of five, seven and ten years is depreciated to a 20
percent salvage value at the end of their useful lives. All other property and
equipment is fully depreciated with no salvage value assumed. Prior to August
1, 1994, no salvage values were assumed on rental equipment with useful lives
of five and seven years. The change in estimate reduced depreciation expense by
approximately $0.6 million in the fiscal year ended July 31, 1995. Expenditures
for major additions and improvements are capitalized while minor replacements,
maintenance and repairs are charged to expense as incurred. Sales of the
Company's rental fleet are common but incidental to the Company's primary
rental business and are typically made to rental customers. When property is
retired, sold or otherwise disposed of, the cost and accumulated depreciation
are removed from the related accounts, and any proceeds are recognized as
revenues and included in the statement of operations.

F-28
<PAGE>

INDUSTRIAL EQUIPMENT RENTALS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 3--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
In March 1995, Statement of Financial Accounting Standards SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to Be Disposed Of," was issued. SFAS No. 121, which became effective for fiscal
years beginning after December 15, 1995, requires that certain long-lived
assets be reviewed for impairment whenever events indicate that the carrying
amount of an asset may not be recoverable and that an impairment loss be
recognized under certain circumstances in the amount by which the carrying
value exceeds the fair market value of the asset. The Company adopted SFAS No.
121 in the fiscal year ended July 31, 1997, as required, and the adoption did
not have a material effect on the Company's results of operations or financial
position.

OTHER ASSETS

Other assets consist of the following at July 31 (in thousands):

<TABLE>
<CAPTION>
AMORTIZATION
PERIOD 1996 1997
------------- ----------- -----------
<S> <C> <C> <C>
Long-term portion of note receivable ......... N/A $ 247 $ --
Debt issue costs ............................. 5 yrs 204 204
Goodwill ..................................... 5,20 yrs 775 990
Non-competition agreements ................... 2,5 yrs 2,572 2,772
Other ........................................ N/A 36 38
-------- --------
3,834 4,004
Less: Accumulated amortization ............... (1,528) (2,217)
-------- --------
$ 2,306 $ 1,787
======== ========
</TABLE>

ACCOUNTING FOR INCOME TAXES

The Company accounts for income taxes in accordance with SFAS No. 109
"Accounting for Income Taxes," which requires that deferred income taxes be
computed using the liability method. Under the liability method, deferred
income taxes are recognized for the tax consequences of "temporary differences"
by applying statutory tax rates to differences between the financial statement
carrying amounts and the tax bases of existing assets and liabilities. Under
SFAS No. 109, the effect on deferred taxes of a change in tax rates is
recognized in the consolidated statement of operations in the period of the
enactment date.

RECLASSIFICATIONS

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

NOTE 4--ACQUISITIONS

A-L RENTAL CENTER

On June 14, 1995, the Company purchased substantially all of the assets of
A-l Rental Center. The acquisition price of $186,000 consisted of $90,000 in
cash, a $90,000 promissory note with 60 equal

F-29
<PAGE>

INDUSTRIAL EQUIPMENT RENTALS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 4--ACQUISITIONS--(CONTINUED)
monthly payments with final payment due June 14, 2000, and directly related
acquisition expenses of $6,000. As part of the transaction, the Company entered
into a noncompetition agreement with the seller for the payment of $1,333 per
month commencing on July 14, 1995, with the last payment due and payable on
June 14, 2000. The Company also entered into an agreement to lease a facility
owned by the seller. The lease is an operating lease and requires payments of
$2,200 a month over a period of five years.

RENTAL WORLD

On August 1, 1995, the Company purchased substantially all of the assets
of Rental World of the Valley, Inc. ("Rental World"). The acquisition price of
$4.3 million consisted of $3.5 million in cash, $1.5 million of which was
funded using proceeds of a term loan, a $0.8 million promissory note dated
August 1, 1995 bearing interest at 7%, along with directly related acquisition
expenses of $55,600, of which $52,800 had been incurred as of July 31, 1995.
The promissory note is payable in twenty-four interest-only monthly
installments of $4,375 beginning September 1, 1995, and is equal to the
interest accrued on the principal, and forty-eight consecutive monthly
installments of principal and interest of $17,960 beginning on September 1,
1997. As part of the transaction, the Company entered into a noncompetition
agreement with the seller for the payment of $8,333 per month commencing on
September 1, 1995 with the last payment due and payable on August 1, 2000.

In conjunction with the acquisition, the Company entered into five year
lease agreements, commencing on the purchase date, to lease four of the rental
properties of the previous owner. The yearly rental expense of the four
payments is $0.2 million and is included in facilities expense.

CAMERON

On October 1, 1996, the Company purchased all of the assets of Cameron
Rental and Tank, Inc. (Cameron). The acquisition price of $1.5 million
consisted of $1.2 million in cash, a $0.3 million non-interest bearing
promissory note dated October 1, 1996 and acquisition expenses of $13,500. A
portion of the cash purchase price was funded using proceeds from the Capex
facility. The promissory note matured on January 28, 1997 and the face amount
was reduced by $6,453 in accordance with the terms of the note which required
an adjustment for the amount of cash collected by the Company 90 days after the
closing from accounts receivable and accrued or unbilled revenue of Cameron
above or below $0.3 million. As part of the transaction, the Company entered
into non-competition agreements for a period of two years with the two officers
of Cameron for the payment of $0.1 million to each payable at closing.

In conjunction with the acquisition, the Company entered into an agreement
to lease a facility owned by one of the officers of Cameron. The lease is an
operating lease and requires payments of $2,250 a month over a period of five
years.

The A-1 Rental Center, Rental World and Cameron acquisitions were
accounted for as purchases and accordingly, the purchase prices were allocated
to assets acquired based on their estimated fair market values. The results of
operations of the acquired assets are included in the accompanying financial
statements since the effective date of each acquisition.

The pro forma operating results for these acquisitions have not been
disclosed either because the effect of the acquisitions was not material (in
the case of A-1 Rental Center) or the acquisitions took place at or near the
beginning of the fiscal year.

F-30
<PAGE>

INDUSTRIAL EQUIPMENT RENTALS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 5--PROPERTY AND EQUIPMENT

Property and equipment consist of the following as of July 31, 1996 and
1997 (in thousands):

<TABLE>
<CAPTION>
USEFUL LIFE 1996 1997
------------- ------------ ------------
<S> <C> <C> <C>
Rental fleet ...................................... 2-10 yrs $ 37,890 $ 39,812
Autos and trucks .................................. 3, 5, 7yrs 621 678
Buildings ......................................... 31.5 yrs 432 432
Furniture, fixtures and office equipment .......... 5 yrs 1,010 1,091
Leasehold improvements ............................ 5, 10 yrs 1,375 1,572
Land .............................................. N/A 322 322
Shop equipment .................................... 5 yrs 866 1,005
--------- ---------
42,516 44,912
Less: Accumulated depreciation .................... (10,729) (16,779)
--------- ---------
$ 31,787 $ 28,133
========= =========
</TABLE>

NOTE 6--LONG-TERM DEBT AND SUBORDINATED DEBT

Substantially all of the Company's debt was repaid subsequent to July 31,
1997 as a result of the sale of the Company and accordingly, is classified as
current liabilities in the accompanying consolidated balance sheet (see Note
2).

Secured and unsecured long-term debt consists of the following at July 31,
1996 and 1997 (in thousands):

<TABLE>
<CAPTION>
1996 1997
---------- ------------
<S> <C> <C>
The Credit Agreement:
Term Loan and Revolving Facility ................ $ 11,227 $ 8,417
Capex Facility .................................. 5,897 6,435
-------- ---------
17,124 14,852
Equipment Contracts .............................. 9,149 7,592
Promissory Notes ................................. 824 807
-------- ---------
Senior Secured Borrowings ........................ 27,097 23,251
Less: Current Portion ............................ (5,809) (22,630)
-------- ---------
Total Long-Term Debt ........................... $ 21,288 $ 621
======== =========
9% Subordinated Debentures plus interest ......... $ 4,011 $ 4,371
12% Subordinated Debentures ...................... 3,800 3,800
-------- ---------
Total Subordinated Debentures .................. $ 7,811 $ 8,171
======== =========
</TABLE>

THE CREDIT AGREEMENT

On July 31, 1997, the Company had in place a credit facility that
originated on June 18, 1993 under a loan and security agreement (the "Credit
Agreement") with a financial institution (the "Lender") that initially provided
BRS with a borrowing base of up to $12 million which was increased to $18
million on July 21, 1994 ("Amendment No. 1") and $27 million on August 18, 1995
("Amendment No. 3"). The

F-31
<PAGE>

INDUSTRIAL EQUIPMENT RENTALS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 6--LONG-TERM DEBT AND SUBORDINATED DEBT--(CONTINUED)
Credit Agreement provides for a term loan (the "Term Loan") as well a revolving
line of credit (the "Revolving Facility") and a capital expenditure facility
(the "Capex Facility").

The Credit Agreement was significantly amended through Amendment No. 3 to
include equipment and other eligible inventory held for resale in the borrowing
base and extend the original term of the Credit Agreement to August 31, 2000.
The existing balances as of August 18, 1995, in the Revolving Facility and the
Capex Facility were converted into the Term Loan and an additional $1 million
was funded by the Lender to increase the principal balance in the Term Loan to
$15 million. Borrowing capacity under the Capex Facility was increased to $12
million. In consideration of Amendment No. 3, the Company agreed to pay the
Lender an amendment fee of $90,000 which was paid upon the execution by
Borrower. As of July 31, 1996, the unamortized amount of this fee was $72,000
of which a total of $18,000 was expensed ratably during fiscal year 1997. Due
to the significant modification of the Credit Agreement, the remaining
unamortized balance of previous debt issue costs related to this Credit
Agreement of $0.2 million was expensed during fiscal year ended July 31, 1996
and have been reflected in the Company's consolidated statement of operations
as an extraordinary item net of income tax benefit of $83,355. During fiscal
1996 and 1997, minor modifications were made to the Credit Agreement covenants
by amendments No. 4, No. 5 and No. 6; the associated costs of these minor
amendments were expensed in the respective periods.

The Lender has a security interest in substantially all of the Company's
assets except for otherwise encumbered equipment financed by creditors other
than the Lender. The Credit Agreement requires the maintenance of certain
covenants. As of July 31, 1997, the Company was in compliance with or obtained
waivers for all such covenants. The Credit Agreement restricts BRS from
advancing or paying dividends to IER if BRS is in default under the Credit
Agreement or if its available borrowings under the Revolving Facility are below
a specified amount. Amounts outstanding under the Credit Agreement bear
interest at a rate equal to prime rate plus 2.0 percent (10.75 percent
effective rate) at July 31, 1995 prior to Amendment No. 3 and prime plus 1.5
percent thereafter or, alternatively, at the Company's option, LIBOR plus 4
percent. The Company elected the LIBOR option and as of July 31, 1996 and 1997,
the effective rates were 9.45 percent and 9.63 percent, respectively.

The Revolving Facility may be used by the Company to meet general working
capital requirements, purchase equipment, finance down payments on certain
third-party financed equipment purchases, and issue letters of credit. The
total borrowings available under the Revolving Facility are approximately equal
to 80 percent of the Company's eligible accounts receivable, 65 percent of
eligible inventory of equipment held for sale, and 50 percent of eligible
inventory comprised of all goods (other than equipment) intended for sale,
rental or lease and all work in process and raw materials not to exceed $0.4
million. Additionally, the Revolving Facility is limited to remaining
borrowings under the $27 million total credit facility after subtraction of the
Term Loan and the Capex Facility. As of July 31, 1996 and 1997, there were no
outstanding balances on the Revolving Facility. As calculated, $3.2 million and
$4.7 million of additional borrowing was available as of July 31, 1996 and
1997, respectively.

In accordance with the Credit Agreement, proceeds from the sale of
collateralized rental equipment sold in the ordinary course of business of $1.3
million during fiscal 1996 and $1 million during fiscal 1997 were applied to
the outstanding principal balance of the Term Loan and, as a result, the
scheduled monthly payments of principal were reduced. The outstanding balance
on the Term Loan and Revolving Facility was $11.2 million and $8.4 million as
of July 31, 1996 and 1997, respectively, and was paid in full on August 1, 1997
in conjunction with the sale of the Company (see Note 2).

F-32
<PAGE>

INDUSTRIAL EQUIPMENT RENTALS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 6--LONG-TERM DEBT AND SUBORDINATED DEBT--(CONTINUED)
The Capex Facility may be used by the Company to finance up to 80 percent
of the purchase price of capital expenditures. At six month intervals, any
outstanding Capex Loan balance is converted into a Capex Note which must be
repaid in sixty ratable monthly payments. During August 1996 and March 1997,
portions of the Capex Loan were converted into Capex Notes in the amount of
$6.1 million and $1.3 million, respectively. During fiscal 1997, $1.2 million
in principal payments were made against these notes. Interest on the Capex Loan
is charged against the Revolving Facility each month.

EQUIPMENT CONTRACTS

The equipment contracts, bearing interest at rates ranging from 7.5
percent to 11 percent, are secured by equipment purchased and are payable in
various monthly principal installments.

SUBORDINATED DEBENTURES

The total amount of subordinated debentures outstanding was $7.8 million
and $8.2 million as of July 31, 1996 and 1997, respectively. These amounts
include $3.8 million as of July 31, 1996 and 1997 of subordinated debentures
that bear interest which is payable quarterly at a rate of 12 percent per annum
(the "12% Subordinated Debentures") and $3.7 million in subordinated debentures
that bear interest at a rate of nine percent per annum (the "9% Subordinated
Debentures") as well as accrued interest payable of $0.3 million at July 31,
1996 and $0.7 million at July 31, 1997 on the 9% Subordinated Debentures. All
debentures are owed to a group of the Company's preferred shareholders and were
paid in full on August 1, 1997 in conjunction with the sale of the Company (see
Note 2). As of July 31, 1996 and 1997, accrued interest payable on the 12%
Subordinated Debentures was $38,000.

DEBT MATURITIES

The aggregate annual maturities of the senior secured subordinated and
unsecured debt as of July 31, 1997 are as follows (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED CREDIT EQUIPMENT CONTRACTS SUBORDINATED
JULY 31 AGREEMENT AND PROMISSORY NOTES DEBENTURES TOTAL
- ----------------------- ----------- ---------------------- ------------- ----------
<S> <C> <C> <C> <C>
1998 ............. $14,852 $7,778 $8,171 $30,801
1999 ............. -- 200 -- 200
2000 ............. -- 213 -- 213
2001 ............. -- 208 -- 208
2002 ............. -- -- -- --
Thereafter ......... -- -- -- --
------- ------ ------ -------
$14,852 $8,399 $8,171 $31,422
======= ====== ====== =======
</TABLE>

F-33
<PAGE>

INDUSTRIAL EQUIPMENT RENTALS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 7--LEASES

At July 31, 1997, the Company had minimum annual lease commitments under
noncancelable operating leases as follows (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED JULY 31 OPERATING LEASES
- -------------------- -----------------
<S> <C>
1998 .......... $ 698
1999 .......... 403
2000 .......... 367
2001 .......... 148
2002 .......... 48
------
$1,664
======
</TABLE>

The Company leases its facilities at various monthly rental terms which
expire at various dates through September 2006. The above amounts include
commitments from the A-l Rental Center, Rental World, and Cameron acquisitions
(see Note 4). Total rent of $0.4 million, $0.7 million and $0.7 million for the
periods ended July 31, 1995, 1996, and 1997 were charged to facilities expense.

At July 31, 1997, the Company had future payments under capital leases as
follows (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED JULY 31 CAPITAL LEASE OBLIGATIONS
- --------------------------------------- --------------------------
<S> <C>
1998 ............................. $ 85
1999 ............................. --
2000 ............................. --
2001 ............................. --
2002 ............................. --
-----
85
Less: Interest ..................... (11)
-----
Capital Lease Obligations .......... $ 74
=====
</TABLE>

The Company is party to several capital leases primarily related to
computers and computer-related equipment. These leases have been capitalized
using interest rates ranging from 7 percent to 12 percent. Amortization on the
capitalized amounts is included in depreciation expense. All of the capitalized
leases were repaid subsequent to July 31, 1997 as a result of the sale of the
Company and accordingly, all capital leases payable were classified as current
liabilities in the accompanying consolidated balance sheets.

F-34
<PAGE>

INDUSTRIAL EQUIPMENT RENTALS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 8--INCOME TAXES

The provision (benefit) for income taxes consists of the following for the
years ended July 31 (in thousands):

<TABLE>
<CAPTION>
1995 1996 1997
------ --------- -------
<S> <C> <C> <C>
Current
Federal ......... $ -- $ -- $ --
State ........... 8 -- --
---- ------ ----
8 -- --
---- ------ ----
Deferred
Federal ......... 233 (117) 266
State ........... 26 (13) 29
---- ------ ----
259 (130) 296
---- ------ ----
$267 $ (130) $296
==== ====== ====
</TABLE>

The reconciliation of the tax provision to the tax provision computed at
statutory rates is as follows for the years ended July 31 (in thousands):

<TABLE>
<CAPTION>
1995 1996 1997
------ ---------- -------
<S> <C> <C> <C>
Federal tax at statutory rate (34%) .......... $195 $ (212) $173
Nondeductible expenses ....................... 42 54 48
State taxes .................................. 22 (25) 20
Valuation allowance and other ................ 8 53 55
---- ------ ----
$267 $ (130) $296
==== ====== ====
</TABLE>

The deferred income tax balances consist of the following (in thousands):

<TABLE>
<CAPTION>
JULY 31,
---------------------
1996 1997
--------- ---------
<S> <C> <C>
DEFERRED TAX LIABILITIES:
Property and equipment basis differences .......... $2,694 $3,336
------ ------
Total deferred tax liabilities .................... 2,694 3,336
------ ------
DEFERRED TAX ASSETS:
Net operating loss carryforwards .................. 1,371 1,721
Alternative minimum tax credit .................... 627 627
Other ............................................. 279 324
------ ------
Total deferred tax assets ......................... 2,277 2,672
Valuation allowance for deferred tax assets ......... (177) (226)
------ ------
Net deferred tax assets ............................. 2,100 2,446
------ ------
Net deferred tax liabilities ........................ $ 594 $ 890
====== ======
</TABLE>

Included in prepaid expense and other are current deferred tax assets of
$237 and $188 at July 31, 1996 and 1997, respectively.

F-35
<PAGE>

INDUSTRIAL EQUIPMENT RENTALS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 8--INCOME TAXES--(CONTINUED)
The Company had net operating loss carryforwards for federal and state
income tax purposes of approximately $0.8 million and $2.2 million,
respectively, at July 31, 1995, $3.5 million and $4.4 million, respectively, at
July 31, 1996 and $4.4 million and $5.7 million, respectively, at July 31,
1997. The Company also has alternative minimum tax credit carryovers of
approximately $627,000 for federal income tax purposes at July 31, 1995, 1996
and 1997. For financial reporting, the loss and credit carryforwards were
recognized as deferred tax assets and an appropriate valuation allowance was
recorded to reflect the uncertainty about ultimate realization.

NOTE 9--PREFERRED STOCK

SERIES A SENIOR MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK

The holders of the 107,500 shares of non-voting, $1 par Senior Series A
are entitled to receive dividends thereon in cash at the rate of 6% per annum
based on a face value of $20 per share when, as and if declared by the
Company's Board of Directors, out of legally available funds. The dividends
compound and accrue quarterly and are cumulative from the date of issuance. As
of July 31, 1996 and 1997, accrued dividends payable for Senior Series A shares
were $10,750. The Senior Series A was recorded at issuance at its estimated
fair market value of $0.9 million ($7.93 per Senior Series A share) and is
being accreted up to its redemption value through charges to retained earnings
over the period from June 18, 1993 to the date it is mandatorily redeemable. As
of July 31, 1996 and 1997, accumulated accretion from June 18, 1993 on Senior
Series A shares were $0.4 million and $0.5 million, respectively. Also,
dividends on the Senior Series A shares are accrued, whether or not declared,
during the period to which they relate since the mandatory redemption amount
includes dividends and are included in accrued expenses in the accompanying
consolidated balance sheets. On August 1, 1997, the holders of the Senior
Series A redeemed their shares upon a change in ownership for $20 per share
(see Note 2).

SERIES B SENIOR REDEEMABLE CONVERTIBLE PREFERRED STOCK

The holders of the 495,000 shares of voting $1 par Senior Series B are not
entitled to receive dividends but have the option to redeem their shares upon a
change in ownership. The Senior Series B is not mandatorily redeemable.
Accretion of the Senior Series B is not necessary as it was recorded at its
redemption value of $3.704 per share not including the share of common stock to
be received upon redemption. The Senior Series B shares were recorded upon
issuance at the amount of net proceeds of $1.8 million which included par value
of $0.5 million with excess proceeds over par recorded as additional paid in
capital. On August 1, 1997 the holders of the Senior Series B converted their
shares into one share of common stock which were redeemed for $10.2 million
immediately upon the sale of the Company (see Note 2).

JUNIOR PREFERRED STOCK

The holders of the 18,936 shares of non-voting, $1 par Junior Series are
entitled to receive dividends in cash at the rate of 6% per annum based on a
face value of $100 per share when, as and if declared by the Board. The
dividends compound and accrue quarterly and are cumulative from the date of
issuance. As of July 31, 1996 and 1997, accrued dividends payable for Junior
Series shares were $9,468. No dividends shall be declared or paid on the Junior
Series unless full cumulative dividends have been declared or paid on the
Senior Series. The Junior Series was recorded at issuance at its

F-36
<PAGE>

INDUSTRIAL EQUIPMENT RENTALS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 9--PREFERRED STOCK--(CONTINUED)
estimated fair market value of $1.5 million ($80.75 per Junior Series share).
Since the Junior Series is not mandatorily redeemable, it is not being accreted
up to its redemption value. Also, dividends on the Junior Series are accrued,
whether or not declared, during the period to which they relate and are
included in accrued expenses in the accompanying consolidated balance sheets.
On August 1, 1997, the holders of the Junior Series redeemed for $1.9 million
their shares upon a change in ownership (see Note 2).

NOTE 10--EMPLOYEE BENEFIT PLAN

The Company has a defined contribution profit sharing plan (the "Plan")
covering substantially all of its employees. All employees who are at least
20.5 years old, perform at least 1,000 hours of service annually and have
satisfied the six month service requirement, are eligible to participate.
Participants accumulate ownership in the Plan assets according to a vesting
schedule over a period of six years. Company contributions to the Plan are made
on an annual basis at the discretion of management, and are allocated to
participants' accounts according to annual compensation. No contribution to the
plan was made for the plan years ended July 31, 1995, 1996 or 1997.

Effective January 1, 1994, an amendment was made to the Plan to allow
401(k) contributions by the employee. The employer matches these contributions
at a rate based on a discretionary formula. Since the amendment, the Company
agreed to match 50 percent of the employee's contribution up to 6 percent of
the participants' gross pay. Such employer contributions vest over a period of
six years and totaled $67,263 during fiscal 1995, $86,318 during fiscal 1996
and $104,451 during fiscal 1997. As of July 31, 1995, 1996 and 1997, no
material amounts were outstanding and payable from the Company to the Plan.

NOTE 11--RELATED PARTY TRANSACTIONS

The Company leases eleven facilities from a corporation owned by a
stockholder, director and officer of the Company. Lease costs totaling
approximately $0.3 million for the years ended July 31, 1995, 1996 and 1997
were incurred under these lease agreements. As of July 31, 1997, these lease
agreements require minimum lease payments of approximately $346,800 per year
and expire at various times during the years from 1998 to 2002. No amendments
or terminations of any of these leases have been made as a result of the sale
of the Company (see Note 2).

The Company held one 5.33 percent interest bearing note receivable as of
July 31, 1996 and two 5.33 percent interest bearing notes receivable as of July
31, 1997 totaling approximately $301,000 and $297,000, respectively, from
certain stockholders and officers of the Company. Both notes receivable were
collected by the Company in full subsequent to July 31, 1997.

The Company paid a related party $120,000 for consulting services in
fiscal years ended July 31, 1995, 1996 and 1997, and subsequently, this
agreement was mutually terminated as of August 1, 1997.

NOTE 12--COMMITMENTS AND CONTINGENCIES

The Company is involved in certain claims and lawsuits arising in the
normal course of business. Management does not believe that uninsured losses,
if any, resulting form the ultimate resolution of these matters will have a
material adverse effect on the financial position, results of operations or
liquidity of the Company.

F-37
<PAGE>

INDEPENDENT AUDITORS' REPORT

Richbourg's Sales & Rentals, Inc.:

We have audited the accompanying balance sheets of Richbourg's Sales &
Rentals, Inc. (the "Company") as of December 31, 1996 and 1997, and the related
statements of income, stockholder's equity and cash flows for each of the three
years in the period ended December 31, 1997. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 1996 and
1997, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 1997 in conformity with generally
accepted accounting principles.

Deloitte & Touche LLP

Charlotte, North Carolina
February 27, 1998

F-38
<PAGE>

RICHBOURG'S SALES & RENTALS, INC.

BALANCE SHEETS

DECEMBER 31, 1996 AND 1997

(IN THOUSANDS, EXCEPT PAR VALUE AND PER SHARE DATA)

<TABLE>
<CAPTION>
1996 1997
---------- ---------
<S> <C> <C>
ASSETS (NOTE 8)
Cash and cash equivalents ...................................................... $ 338 $ 161
Marketable securities--trading (Note 1) ........................................ 670 593
Trade accounts receivable, net of allowance for doubtful accounts of $35 in 1996
and $81 in 1997 .............................................................. 4,214 3,126
Inventories .................................................................... 396 420
Rental fleet, net of accumulated depreciation of $27,856 in 1996 and $34,351 in
1997 (Note 1) ................................................................ 55,029 57,604
Property and equipment, net (Note 2) ........................................... 4,250 3,068
Other assets ................................................................... 171 12
------- -------
TOTAL .......................................................................... $65,068 $64,984
======= =======
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES:
Accounts payable--trade and accrued expenses .................................. $ 2,283 $ 930
Accounts payable--equipment purchases ......................................... 6,468 --
Revolving credit loan (Note 3) ................................................ 16,296 26,526
Notes payable (Note 4) ........................................................ 5,054 --
------- -------
Total liabilities ............................................................ 30,101 27,456
------- -------
COMMITMENTS AND CONTINGENCIES (Notes 5 and 7)
STOCKHOLDER'S EQUITY:
Common stock, $100 par value, 500 shares authorized, 100 shares issued and
outstanding ................................................................. 10 10
Additional paid-in capital .................................................... 20 20
Retained earnings ............................................................. 34,937 37,498
------- -------
Total stockholder's equity ................................................... 34,967 37,528
------- -------
TOTAL .......................................................................... $65,068 $64,984
======= =======
</TABLE>

See notes to financial statements.

F-39
<PAGE>

RICHBOURG'S SALES & RENTALS, INC.

STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(IN THOUSANDS)

<TABLE>
<CAPTION>
1995 1996 1997
---------- ---------- ----------
<S> <C> <C> <C>
REVENUES:
Rental of equipment ............................................. $ 26,507 $ 29,717 $ 28,894
Sales of equipment .............................................. 5,402 5,305 6,510
-------- -------- --------
Total revenues ................................................. 31,909 35,022 35,404
-------- -------- --------
COST OF REVENUES:
Depreciation of rental fleet .................................... 6,366 7,899 10,928
Maintenance of rental fleet ..................................... 10,063 10,284 10,714
Cost of equipment sold .......................................... 2,416 1,851 1,956
-------- -------- --------
Total cost of revenues ......................................... 18,845 20,034 23,598
-------- -------- --------
GROSS MARGIN ..................................................... 13,064 14,988 11,806
-------- -------- --------
OPERATING EXPENSES:
Selling ......................................................... 1,342 1,403 1,445
General and administrative ...................................... 2,193 2,692 2,715
Other depreciation .............................................. 840 1,006 880
-------- -------- --------
Total operating expenses ....................................... 4,375 5,101 5,040
-------- -------- --------
INCOME FROM OPERATIONS ........................................... 8,689 9,887 6,766
OTHER INCOME (EXPENSE):
Interest expense ................................................ (1,726) (1,749) (2,406)
Investment income ............................................... 127 84 11
Realized gain on sale of marketable securities .................. 13 75 41
Unrealized holding gain (loss) on marketable securities ......... 51 (29) 58
Other ........................................................... 150 90 30
-------- -------- --------
Total other expense, net ....................................... (1,385) (1,529) (2,266)
-------- -------- --------
INCOME BEFORE EXTRAORDINARY LOSS ON EARLY
EXTINGUISHMENT OF DEBT ......................................... 7,304 8,358 4,500
EXTRAORDINARY LOSS ON EARLY EXTINGUISHMENT OF
DEBT (Note 3) .................................................. -- (225) --
-------- -------- --------
NET INCOME (Note 1) .............................................. $ 7,304 $ 8,133 $ 4,500
======== ======== ========
</TABLE>

See notes to financial statements.

F-40
<PAGE>

RICHBOURG'S SALES & RENTALS, INC.

STATEMENTS OF STOCKHOLDER'S EQUITY
YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
COMMON STOCK
------------------------ ADDITIONAL
OUTSTANDING PAID-IN RETAINED
SHARES AMOUNT CAPITAL EARNINGS TOTAL
------------- -------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1994 ........... 100 $10 $20 $ 23,484 $ 23,514
Net income .......................... -- -- -- 7,304 7,304
Distribution to stockholder ......... -- -- -- (1,445) (1,445)
--- --- --- -------- --------
BALANCE, DECEMBER 31, 1995 ........... 100 10 20 29,343 29,373
Net income .......................... -- -- -- 8,133 8,133
Distribution to stockholder ......... -- -- -- (2,539) (2,539)
--- --- --- -------- --------
BALANCE, DECEMBER 31, 1996 ........... 100 10 20 34,937 34,967
Net income .......................... -- -- -- 4,500 4,500
Distribution to stockholder ......... -- -- -- (1,939) (1,939)
--- --- --- -------- --------
BALANCE, DECEMBER 31, 1997 ........... 100 $10 $20 $ 37,498 $ 37,528
=== === === ======== ========
</TABLE>

See notes to financial statements.

F-41
<PAGE>

RICHBOURG'S SALES & RENTALS, INC.

STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(IN THOUSANDS)

<TABLE>
<CAPTION>
1995 1996 1997
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ...................................................... $ 7,304 $ 8,133 $ 4,500
Adjustments to reconcile net income to net cash provided by
operating activities:
Extraordinary loss on early extinguishment
of debt .................................................... -- 225 --
Depreciation .................................................. 7,206 8,905 11,808
Gain on sale of rental fleet and equipment .................... (1,385) (1,065) (1,481)
Realized gain on sale of marketable securities ................ (13) (75) (41)
Unrealized (gain) loss on marketable securities ............... (51) 29 (58)
Changes in operating assets and liabilities:
Decrease (increase) in trade accounts
receivable ................................................ (1,143) (121) 1,088
Decrease (increase) in inventories ........................... 807 (287) (24)
(Decrease) increase in accounts payable and accrued
expenses .................................................. 136 1,018 (1,353)
Decrease (increase) in other assets .......................... (663) 543 159
Purchase of trading marketable securities .................... (979) (1,938) (77)
Proceeds from sale of trading marketable securities .......... 1,025 1,711 252
--------- --------- ---------
Net cash provided by operating activities ................... 12,244 17,078 14,773
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of rental fleet and equipment ......................... (19,309) (20,648) (22,123)
Proceeds from sale of rental fleet and equipment ................ 1,538 3,557 3,937
--------- --------- ---------
(17,771) (17,091) (18,186)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net advances under revolving credit facility .................... -- 16,296 10,230
Borrowings under notes payable .................................. 19,069 3,136 2,364
Repayment of notes payable ...................................... (11,378) (18,998) (7,419)
Distributions to stockholder .................................... (1,445) (2,539) (1,939)
--------- --------- ---------
Net cash (used in) provided by financing activities ......... 6,246 (2,105) 3,236
--------- --------- ---------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS .................................................... 719 (2,118) (177)
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR .............................................. 1,737 2,456 338
--------- --------- ---------
CASH AND CASH EQUIVALENTS,
END OF YEAR .................................................... $ 2,456 $ 338 $ 161
========= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION--Cash paid during the year
for interest ................................................... $ 1,599 $ 1,665 $ 2,260
========= ========= =========
</TABLE>

See notes to financial statements.

F-42
<PAGE>

RICHBOURG'S SALES & RENTALS, INC.

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997

NOTE 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS--Richbourg's Sales & Rentals, Inc. (the "Company")
is engaged in the rental and sale of construction and industrial machinery and
equipment. The Company presently operates from sixteen locations in the
southeastern United States.

USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent 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.

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

INVESTMENT IN MARKETABLE SECURITIES--The Company's securities investments
are classified as trading securities and are primarily investments in stocks of
publicly traded companies. Trading securities are recorded at fair value in the
accompanying balance sheets, with the change in fair value during the period
included in earnings. Realized gains or losses in the sale of securities are
based on the specific identification method. The fair value of securities is
based on quoted market prices.

Proceeds from sales of investments for the years ended December 31, 1995,
1996 and 1997 were $1.0 million, $1.7 million and $0.3 million, respectively.
Realized and unrealized gains (losses) on trading securities during 1995, 1996
and 1997 were not significant.

ACCOUNTS RECEIVABLE--The Company carries trade accounts receivable at the
amount it deems to be collectible. Accordingly, the Company provides allowances
for trade accounts receivable it deems to be uncollectible based on
management's best estimates. Recoveries are recognized in the period they are
received. The ultimate amount of accounts receivable that becomes uncollectible
could differ from those estimated. The majority of the Company's customers are
engaged in the construction business. The Company assesses its customers'
credit worthiness prior to extending credit. The collectibility of these
receivables is dependent, in part, on the economic conditions within the
construction industry.

INVENTORIES--Inventories, which consist principally of repair parts and
supplies, are stated at the lower of cost or market (cost is determined on the
first-in, first-out basis).

RENTAL FLEET--Rental fleet is comprised principally of heavy construction
equipment which is leased by the Company to customers under operating leases.
The rental fleet is stated at cost less accumulated depreciation. Depreciation
is computed using the straight-line method over the estimated useful lives of
the related assets, which range from five to seven years, giving effect to an
estimated salvage value of one-tenth of original cost. Routine repairs and
maintenance are expensed as incurred; improvements are capitalized at cost. The
Company sells equipment in its rental fleet as part of its regular operations;
accordingly, a portion of the rental fleet may be sold within one year. The
remaining book value is charged to cost of equipment when sold.

PROPERTY AND EQUIPMENT--Property and equipment, which consists of land,
buildings, service and office equipment utilized in the Company's operations,
is stated at cost less accumulated depreciation.

F-43
<PAGE>

RICHBOURG'S SALES & RENTALS, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997

NOTE 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES--(CONTINUED)
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.

ADVERTISING COSTS--The Company expenses advertising costs as incurred.
Advertising costs for the years ending December 31, 1995, 1996 and 1997
amounted to $0.1 million each year.

REVENUE RECOGNITION--Rental revenues are recognized over the rental period
using the straight-line method. Sales of assets in the rental fleet are
recognized at the time of shipment.

INCOME TAXES--The Company has elected S Corporation status for income tax
purposes. Accordingly, no provision for federal and state income taxes has been
made in these financial statements because any income tax liability is the
responsibility of the stockholder.

LONG-LIVED ASSETS--Effective January 1, 1996, the Company adopted
Statement of Financial Accounting Standards No. 121, ACCOUNTING FOR IMPAIRMENT
OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF. This standard
requires that long-lived assets and certain identifiable intangibles held and
used by an entity be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying value of an asset may not be
recoverable. The adoption of this standard had no effect on the Company's
results of operations or financial position. On an ongoing basis, the Company
will evaluate its long-lived assets. If circumstances suggest that their value
may be impaired, an assessment of recoverability will be performed.

NOTE 2. PROPERTY AND EQUIPMENT

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

<TABLE>
<CAPTION>
DECEMBER 31, ESTIMATED
------------------------- USEFUL LIVES
1996 1997 (IN YEARS)
----------- ----------- -------------
<S> <C> <C> <C>
Land ......................................... $ 428 $ 428 --
Buildings and leasehold improvements ......... 2,529 1,779 7-31
Service equipment ............................ 4,558 4,625 2-5
Office furniture and equipment ............... 583 569 2-5
-------- --------
8,098 7,401
Less accumulated depreciation ................ (3,848) (4,333)
-------- --------
$ 4,250 $ 3,068
======== ========
</TABLE>

NOTE 3. REVOLVING CREDIT LOAN

In September 1996, the Company entered into a revolving credit line
(revolving loan) with a bank. Initial proceeds from this revolving loan were
used to pay off existing notes payable with another bank, as well as to fund
new equipment purchases. In connection with this refinancing, the Company was
charged a penalty of $0.2 million by the former bank lender for early payoff of
the notes payable. This charge is shown as "Extraordinary Loss on Early
Extinguishment of Debt" in the accompanying Statements of Income.

F-44
<PAGE>

RICHBOURG'S SALES & RENTALS, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997

NOTE 3. REVOLVING CREDIT LOAN--(CONTINUED)
The revolving loan provided for maximum borrowings up to $35.0 million
based on qualified machinery and equipment. Outstanding borrowings were due in
September 1999, with interest based on the 90 day LIBOR rate plus 1.85 (7.787%
at December 31, 1997). At December 31, 1996 and 1997, the Company had $16.3
million and $26.5 million, respectively, in outstanding borrowings on the
revolving loan. Subsequent to December 31, 1997, the Company paid off all
borrowings under its revolving credit agreement (see Note 8).

NOTE 4. NOTES PAYABLE

The Company has historically financed a portion of its rental fleet and
other fixed asset purchases through notes payable to banks, equipment vendors,
finance companies and others. In contemplation of sale of the business (see
Note 8), during December 1997 the Company paid off all its outstanding notes
payable.

Notes payable at December 31, 1996 consisted of the following (in
thousands, except payment amounts):

<TABLE>
<S> <C>
Series of 24 installment purchase notes, payable in monthly installments ranging
from $276 to $797, plus interest at 6.9%.............................................. $ 204
6.8% installment purchase note, payable in monthly installments of $7,116, including
interest ............................................................................. 165
7.3% installment purchase note, payable in monthly installments of $9,576, including
interest ............................................................................. 222
6.5% installment purchase note, payable in monthly installments of $4,841, including
interest ............................................................................. 126
6.5% installment purchase note, payable in monthly installments of $4,841, including
interest ............................................................................. 121
7.25%, 10.25% and 10.5% installment purchase notes, payable in monthly
installments ranging from $1,426 to $3,440, including interest........................ 1,755
Installment purchase note, payable in monthly installments of $43,858.................. 570
Series of seven installment purchase notes, payable in monthly installments ranging
from $3,084 to $15,770, including interest (interest rates vary per note from 4.90%
to 7.75%) ............................................................................ 840
Mortgage payable in monthly installments of $5,000 plus interest at prime (81/4% at
December 31, 1996) ................................................................... 445
Mortgage payable in monthly installments of $3,334 plus interest at prime.............. 268
Note payable in monthly installments of $5,000 plus interest at prime.................. 225
Note payable in monthly installments of $1,050 plus interest at prime.................. 113
------
Total notes payable ................................................................... $5,054
======
</TABLE>

NOTE 5. RELATED PARTY TRANSACTIONS

The Company rents certain office and yard space from its sole stockholder
on a month to month basis. During 1995, 1996 and 1997, the Company paid rental
expense to its sole stockholder of approximately $0.4 million, $0.4 million and
$0.5 million, respectively.

F-45
<PAGE>

RICHBOURG'S SALES & RENTALS, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997

NOTE 5. RELATED PARTY TRANSACTIONS--(CONTINUED)
The Company purchases automobiles and receives automotive electric
services from certain companies owned by its sole stockholder. During 1995,
1996 and 1997, the Company paid $0.1 million, $0.1 million and $0.1 million to
these related parties.

NOTE 6. RETIREMENT PLAN

The Company maintains a 401(k) defined contribution plan which covers
substantially all employees. Employees may contribute up to 5% of their
compensation. Employer matching contributions are not mandatory but the Company
is allowed to match employee contributions up to limits specified in the plan.
The Company did not make any contributions in 1995, 1996 or 1997.

NOTE 7. LEGAL MATTERS

The Company is a defendant in legal proceedings arising out of the conduct
of the Company's business. In the opinion of management, the ultimate outcome
of these legal proceedings will not have a material adverse affect on the
financial position or future results of operations and cash flows of the
Company.

NOTE 8. SUBSEQUENT EVENT--SALE OF BUSINESS

Effective January 1, 1998, the Company sold its rental fleet and certain
other tangible and intangible assets to Neff Corp., Miami, Florida, for $100.0
million cash. In addition, the purchaser assumed certain liabilities, as
defined in the purchase agreement, which consist principally of accounts
payable and accrued expenses. After the sale, the Company's assets consist of
cash, marketable securities, land, buildings and leasehold improvements. The
Company or other affiliated entities will rent certain real estate to Neff
Corp. under operating lease agreements.

The sale of net assets resulted in a significant gain, which will be
recorded in 1998. Subsequent to receipt of the sale proceeds the Company paid
off the entire balance of borrowings under its revolving loan agreement with
bank (see Note 3).

********

F-46
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of
Sullair Argentina Sociedad Anonima

1. We have audited the accompanying consolidated balance sheets of Sullair
Argentina Sociedad Anonima and its subsidiary Sullair San Luis Sociedad Anonima
as of December 31, 1997 and 1996, and the related consolidated statements of
income and of changes in shareholders' equity and in financial position (cash
flows) for the years ended December 31, 1997, 1996 and 1995, all expressed in
constant Argentine pesos--P$--through August 31, 1995 and in nominal pesos
thereafter (see Note 1.2.). These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

2. 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 statements presentation. We believe that our
audits provide a reasonable basis for our opinion.

3. Accounting principles generally accepted in Argentina require companies
with controlling financial interest in the other companies to present both
parent company, where investments in subsidiaries are accounted for by the
equity method, and consolidated financial statements, as primary and
supplementary information, respectively. Because of the special purpose of
these financial statements, parent company financial statements are not
included. This procedure has been adopted for the convenience of the reader of
the financial statements.

4. In our opinion, the consolidated financial statements audited by us
present fairly, in all material respects, the financial position of Sullair
Argentina Sociedad Anonima and its subsidiary Sullair San Luis Sociedad Anonima
at December 31, 1997 and 1996, and the results of their operations, the changes
in their shareholders' equity and the changes in their financial position (cash
flows) for the years ended December 31, 1997, 1996 and 1995 in conformity with
accounting principles generally accepted in Argentina.

5. Accounting principles generally accepted in Argentina vary in certain
important respects from accounting principles generally accepted in the United
States of America. The application of the latter would have affected the
determination of consolidated net income expressed in constant Argentine pesos
through August 31, 1995 and in nominal pesos thereafter (see Note 1.2.) for
each of the three mentioned years, and the determination of consolidated
shareholders' equity and financial position also expressed in constant
Argentine pesos through August 31, 1995 and in nominal pesos thereafter (see
Note 1.2.) at December 31, 1997, 1996 and 1995 to the extent summarized in
Notes 10, 11, and 12 to the consolidated financial statements.

6. The accompanying consolidated financial statements expressed in
constant Argentine pesos through August 31, 1995 and in nominal pesos
thereafter include a column that gives effect to the translation into U.S.
dollars of the balances at December 31, 1997, on the basis described in Note
1.2.c). This translation should not be construed as representing that the peso
amounts actually represent or have been, or could be, converted into U.S.
dollars.

<TABLE>
<S> <C>
Buenos Aires, Argentina PRICE WATERHOUSE & CO.
March 25, 1998 Daniel A. Lopez Lado (Partner)
</TABLE>

F-47
<PAGE>

SULLAIR ARGENTINA SOCIEDAD ANONIMA
AND ITS SUBSIDIARY SULLAIR SAN LUIS SOCIEDAD ANONIMA
CONSOLIDATED BALANCE SHEETS

(EXPRESSED IN CONSTANT PESOS--P$--OF AUGUST 31, 1995 AND IN NOMINAL PESOS
THEREAFTER--NOTE 1.2.)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------
1997 1997 1996
------------- ------------- -------------
US$(1) P$
------------- -----------------------------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and banks .......................................... 305,876 305,876 542,989
Accounts receivable (Note 2.a)) ......................... 13,961,371 13,961,371 10,533,229
Other receivables (Note 2.b)) ........................... 2,321,217 2,321,217 4,694,592
Inventories (Note 2.c)) ................................. 12,687,639 12,687,639 11,596,926
---------- ---------- ----------
Total current assets .................................... 29,276,103 29,276,103 27,367,736
---------- ---------- ----------
NON-CURRENT ASSETS
Other receivables (Note 2.d)) ........................... 657,658 657,658 657,658
Long-term investments (Note 2.e)) ....................... 233,756 233,756 266,756
Property and equipment, net (Note 3) .................... 26,477,686 26,477,686 24,702,859
Other ................................................... 67,377 67,377 67,377
---------- ---------- ----------
Total non-current assets ................................ 27,436,477 27,436,477 25,694,650
---------- ---------- ----------
Total assets ............................................ 56,712,580 56,712,580 53,062,386
========== ========== ==========
LIABILITIES
CURRENT LIABILITIES
Accounts payable (Note 2.f)) ............................ 11,737,769 11,737,769 13,138,278
Short-term bank borrowings (Note 2.g)) .................. 6,613,730 6,613,730 8,311,896
Taxes payable ........................................... 1,059,209 1,059,209 181,630
Payroll and social security ............................. 274,995 274,995 238,974
Advances from customers ................................. 116,978 116,978 593,339
Other ................................................... -- -- 490,440
---------- ---------- ----------
Total current liabilities ............................... 19,802,681 19,802,681 22,954,557
---------- ---------- ----------
NON-CURRENT LIABILITIES
Long-term bank borrowings (Note 2.h)) ................... 5,342,376 5,342,376 3,560,501
---------- ---------- ----------
Total non-current liabilities ........................... 5,342,376 5,342,376 3,560,501
---------- ---------- ----------
Total liabilities ....................................... 25,145,057 25,145,057 26,515,058
---------- ---------- ----------
MINORITY INTEREST IN CONSOLIDATED
SUBSIDIARY ............................................. 727 727 450
---------- ---------- ----------
SHAREHOLDERS' EQUITY (as per related statement) ......... 31,566,796 31,566,796 26,546,878
---------- ---------- ----------
Total liabilities and shareholders' equity .............. 56,712,580 56,712,580 53,062,386
========== ========== ==========
</TABLE>

- ----------------
(1) See Note 1.2.c).

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

F-48
<PAGE>

SULLAIR ARGENTINA SOCIEDAD ANONIMA
AND ITS SUBSIDIARY SULLAIR SAN LUIS SOCIEDAD ANONIMA
CONSOLIDATED STATEMENTS OF INCOME

(EXPRESSED IN CONSTANT PESOS--P$--OF AUGUST 31, 1995 AND IN NOMINAL PESOS
THEREAFTER--NOTE 1.2.)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------
1997 1997 1996 1995
---------------- ---------------- ---------------- ----------------
US$(1) P$
---------------- --------------------------------------------------
<S> <C> <C> <C> <C>
Net sales, rentals and services (Note 2.j)) ......... 57,322,289 57,322,289 39,368,237 35,297,551
Operating costs
Cost of sales, rentals and services
(Note 2.k)) ...................................... (44,086,860) (44,086,860) (29,151,402) (28,096,627)
Administrative expenses ............................ (1,830,707) (1,830,707) (1,446,250) (1,222,513)
Selling expenses ................................... (3,205,862) (3,205,862) (2,763,704) (2,707,561)
Other .............................................. (676,674) (676,674) (690,775) (778,873)
----------- ----------- ----------- -----------
Operating income .................................... 7,522,186 7,522,186 5,316,106 2,491,977
Non-operating income (expenses)
Financial expenses (Note 2.l)) ..................... (1,118,454) (1,118,454) (1,545,224) (925,601)
Other non-operating income net
(Note 7.a)) ...................................... 629,000 629,000 681,521 628,734
----------- ----------- ----------- -----------
Income before taxes, minority interest and
extraordinary results .............................. 7,032,732 7,032,732 4,452,403 2,195,110
Income tax .......................................... (2,012,537) (2,012,537) (1,128,499) (300,578)
----------- ----------- ----------- -----------
Income before minority interest and
extraordinary results .............................. 5,020,195 5,020,195 3,323,904 1,894,532
Minority interest in results of
consolidated subsidiaries .......................... (277) (277) (172) (161)
----------- ----------- ----------- -----------
Net income before extraordinary results ............. 5,019,918 5,019,918 3,323,732 1,894,371
----------- ----------- ----------- -----------
Extraordinary results (Note 9)(2) ................... -- -- (709,666) --
----------- ----------- ----------- -----------
Net income for the year ............................. 5,019,918 5,019,918 2,614,066 1,894,371
=========== =========== =========== ===========
</TABLE>

- ----------------
(1) See Note 1.2.c).
(2) This amount includes P$349,537 (Gain) corresponding to the effect of income
taxes.

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

F-49
<PAGE>

SULLAIR ARGENTINA SOCIEDAD ANONIMA
AND ITS SUBSIDIARY SULLAIR SAN LUIS SOCIEDAD ANONIMA

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

(EXPRESSED IN CONSTANT PESOS--P$--OF AUGUST 31, 1995 AND IN NOMINAL PESOS
THEREAFTER--NOTE 1.2.)

<TABLE>
<CAPTION>
EARNINGS
ADJUSTMENTS ---------------------------
TO CAPITAL UNAPPROPRIATED TOTAL
CAPITAL STOCK LEGAL RETAINED SHAREHOLDERS'
STOCK (NOTE 1.5. I)) RESERVE EARNINGS EQUITY
--------- ---------------- --------- --------------- --------------
<S> <C> <C> <C> <C> <C>
At December 31, 1994 ................... 86,000 12,723 26,708 21,913,010 22,038,441
Net income for the year ................ -- -- -- 1,894,371 1,894,371
------ ------ ------ ---------- ----------
At December 31, 1995 ................... 86,000 12,723 26,708 23,807,381 23,932,812
Net income for the year ................ -- -- -- 2,614,066 2,614,066
------ ------ ------ ---------- ----------
At December 31, 1996 ................... 86,000 12,723 26,708 26,421,447 26,546,878
Net income for the year ................ -- -- -- 5,019,918 5,019,918
------ ------ ------ ---------- ----------
At December 31, 1997 ................... 86,000 12,723 26,708 31,441,365 31,566,796
====== ====== ====== ========== ==========
At December 31, 1997 in US$(1) ......... 86,000 12,723 26,708 31,441,365 31,566,796
====== ====== ====== ========== ==========
</TABLE>

- ----------------
(1) See Note 1.2.c).

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

F-50
<PAGE>

SULLAIR ARGENTINA SOCIEDAD ANONIMA
AND ITS SUBSIDIARY SULLAIR SAN LUIS SOCIEDAD ANONIMA

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

(EXPRESSED IN CONSTANT PESOS--P$--OF AUGUST 31, 1995 AND IN NOMINAL PESOS
THEREAFTER--NOTE 1.2.)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------
1997 1997 1996 1995
--------------- --------------- ----------------- ---------------
US$(1) P$
--------------- -------------------------------------------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income for the year ................................ 5,019,918 5,019,918 2,614,066 1,894,371
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation ......................................... 6,360,947 6,360,947 3,272,048 2,281,111
Allowance for doubtful accounts ...................... 300,176 300,176 307,633 527,235
Minority interest .................................... 277 277 172 161
Fixed assets disposals ............................... 1,526,084 1,526,084 658,570 966,698
Taxes on income ...................................... 2,012,537 2,012,537 778,962 300,578
Financial and holding results on assets other than
cash or cash equivalents and on liabilities ........ (163,833) (163,833) 281,219 1,831,085
Decrease (increase) in assets:
Accounts receivable ................................. (3,699,866) (3,699,866) (5,097,293) 106,500
Other receivables ................................... 2,643,375 2,643,375 (556,051) (1,926,963)
Other assets ........................................ -- -- (3) 34
Inventories ......................................... (1,090,713) (1,090,713) (1,337,138) (2,079,787)
Increase (decrease) in liabilities:
Accounts payable .................................... (1,400,509) (1,400,509) 5,554,258 385,394
Payroll and social security ......................... 36,021 36,021 14,062 (56,403)
Other liabilities ................................... (490,440) (490,440) 12,143 452,310
Taxes payable ....................................... 848,287 848,287 (48,074) (1,530,653)
Advances from customers ............................. (476,361) (476,361) (106,140) 413,295
---------- ---------- ------------ ----------
Cash provided by operations ............................ 11,425,900 11,425,900 6,348,434 3,564,966
---------- ---------- ------------ ----------
CASH FLOWS FROM INVESTMENT
ACTIVITIES
Purchases of property and equipment .................... (9,580,339) (9,580,339) (4,524,287) (3,405,256)
Investments other than cash equivalents ................ 33,000 33,000 537,384 --
---------- ---------- ------------ ----------
Cash used in investment activities ..................... (9,547,339) (9,547,339) (3,986,903) (3,405,256)
---------- ---------- ------------ ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bank loans ............................... 39,132,529 39,132,529 13,269,291 6,388,024
Repayments of bank loans ............................... (39,476,652) (39,476,652) (13,838,018) (5,617,809)
Interest and related cost payments ..................... (1,771,551) (1,771,551) (1,632,095) (716,609)
----------- ----------- ------------- ----------
Cash (used in) provided by financing activities ........ (2,115,674) (2,115,674) (2,200,822) 53,606
----------- ----------- ------------- ----------
(DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS ...................................... (237,113) (237,113) 160,709 213,316
Cash and cash equivalents at the beginning of year ..... 542,989 542,989 382,280 168,964
----------- ----------- ------------- ----------
CASH AND CASH EQUIVALENTS AT THE END
OF YEAR ............................................... 305,876 305,876 542,989 382,280
=========== =========== ============= ==========
</TABLE>

- ----------------
(1) See Note 1.2.c).

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

F-51
<PAGE>

SULLAIR ARGENTINA SOCIEDAD ANONIMA
AND ITS SUBSIDIARY SULLAIR SAN LUIS SOCIEDAD ANONIMA

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN CONSTANT PESOS--P$--OF AUGUST 31, 1995 AND IN NOMINAL PESOS
THEREAFTER--
NOTE 1.2.--UNLESS OTHERWISE STATED)

NOTE 1--BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

1.1. BASIS OF PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS

These consolidated financial statements include the accounts of Sullair
Argentina Sociedad Anonima and its subsidiary, Sullair San Luis Sociedad
Anonima. All material intercompany balances, transactions and profits have been
eliminated.

Sullair Argentina Sociedad Anonima holds 99.99% of the shares of Sullair
San Luis Sociedad Anonima. In addition to its participation in Sullair San Luis
Sociedad Anonima, Sullair Argentina Sociedad Anonima holds 100% of the shares
of Bahian S.A., a company located in Uruguay. Bahian S.A. holds 49% of the
shares of Sullair Do Brasil Ltd., a Brazilian company.

The participation in Bahian S.A. has not been consolidated in view of its
low materiality and is shown in the consolidated financial statements under
non-current investments, at its cost value. This situation does not give rise
to any significant distortion that could affect the valuation and disclosure of
the consolidated financial statements.

The preparation of the financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the balance
sheet dates, and the reported amounts of revenues and expenses during the
reporting years. Actual results may differ from these estimates.

1.2. RECOGNITION OF THE EFFECTS OF INFLATION

a) Pursuant to the restatement methodology established under technical
pronouncements issued by the Federacion Argentina de Consejos Profesionales de
Ciencias Economicas (Argentine Federation of Professional Councils in Economic
Sciences, or "FACPCE"), the consolidated financial statements of Sullair
Argentina Sociedad Anonima were stated in constant Argentine pesos through
August 31, 1995. To account for the effects of inflation in Argentina and in
accordance with Argentine GAAP, prior to September 1, 1995, the Company's
financial statements were periodically restated based on the changes in the
Precios Mayoristas Nivel General (General Wholesale Price Index, or "WPI").
However, pursuant to resolutions of the Inspeccion General de Justicia (General
Inspection of Justice or "IGJ"), Argentine companies are not permitted to
reflect the effects of inflation on their financial statements as of any date
or for any period after September 1, 1995.

Accordingly, for fiscal year 1995, Sullair Argentina Sociedad Anonima and
Sullair San Luis Sociedad Anonima are required to reflect the effects of
inflation on their financial statements through August 31, 1995, but are not
permitted to do so for the four-month period ended December 31, 1995 or for
subsequent periods. Except for the portion of the fiscal year ended December
31, 1995 prior to August 31, 1995, which has been restated in constant pesos at
August 31, 1995, financial data at and for such fiscal year has not been
restated in constant pesos. For the years ended December 31, 1997 and 1996, as
the change in the WPI since August 31, 1995 has been less than 8%, financial
statements prepared in accordance with Argentine GAAP need not be adjusted for
inflation after that date. Financial statements that are not restated to
reflect the effects of inflation will not include the

F-52
<PAGE>

SULLAIR ARGENTINA SOCIEDAD ANONIMA
AND ITS SUBSIDIARY SULLAIR SAN LUIS SOCIEDAD ANONIMA

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(EXPRESSED IN CONSTANT PESOS--P$--OF AUGUST 31, 1995 AND IN NOMINAL PESOS
THEREAFTER--
NOTE 1.2.--UNLESS OTHERWISE STATED)

NOTE 1--BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
restatement of non-monetary assets and the net gain or loss (holding gains or
losses) on exposure of monetary assets and liabilities to price level changes.
In March 1992, the monetary correction system was discontinued for tax purposes
in Argentina.

b) On January 1, 1992 the peso replaced the austral as Argentina's
official currency at a convertion rate of 10,000 australes per peso. One peso
currently is, and current Argentine law requires that one peso will continue to
be, exchangeable for not less than one dollar.

The following table shows, for the years indicated, certain information
regarding the exchange rates for U.S. dollars, expressed in nominal pesos per
dollar. The Federal Reserve Bank of New York does not report a non-buying rate
for Argentine pesos.

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, HIGH LOW AVERAGE(1) END OF PERIOD
- ------------------- ----------- ----------- ------------ --------------
<S> <C> <C> <C> <C>
1995 ......... 1.0000 0.9990 0.9995 1.0000
1996 ......... 1.0000 1.0000 1.0000 1.0000
1997 ......... 1.0000 1.0000 1.0000 1.0000
</TABLE>

- ----------------
(1) Average of month-end rates.
SOURCES: CENTRAL BANK--BANCO DE LA NACION ARGENTINA.

c) The consolidated financial statements of Sullair Argentina Sociedad
Anonima at December 31, 1997, as well as the related notes and exhibits, have
been prepared in Argentine pesos on the basis of accounting records carried in
Argentina in that currency. These financial statements include a column that
gives effect to the translation into U.S. dollars of the balances at December
31, 1997. Balances have been translated at the exchange rate at December 31,
1997, indicated in Note 1.2.b).

1.3. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

The consolidated financial statements have been prepared in accordance
with Argentine GAAP and with the requirements of the IGJ, and are presented in
Argentine pesos ("P$").

1.4. CASH AND CASH EQUIVALENTS

In the consolidated statements of cash flows, the Company considers cash
and cash equivalents all its highly liquid investments purchased with an
original maturity at three months or less.

F-53
<PAGE>

SULLAIR ARGENTINA SOCIEDAD ANONIMA
AND ITS SUBSIDIARY SULLAIR SAN LUIS SOCIEDAD ANONIMA

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(EXPRESSED IN CONSTANT PESOS--P$--OF AUGUST 31, 1995 AND IN NOMINAL PESOS
THEREAFTER--
NOTE 1.2.--UNLESS OTHERWISE STATED)

NOTE 1--BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
1.5. VALUATION CRITERIA

The principal valuation criteria used in the preparation of the
consolidated financial statements are as follows:

a) Foreign currency

Assets and liabilities denominated in foreign currency are presented at
the nominal value of the foreign currency converted to local currency at
year-end exchange rates. Exchange differences have been included in the
determination of the net income.

b) Accounts receivable

Accounts receivable are stated at estimated realizable values and an
allowance for doubtful accounts is provided in an amount considered by
management to be sufficient to meet probable future losses related to
uncollectible accounts.

c) Inventories

Inventories are valued at replacement cost which, in the aggregate, is
less than recoverable value on the following basis:

Imported raw materials and supplies: at replacement cost in the currency
of origin converted at the year-end exchange rate plus the percentage of
import duties incurred.

Domestic raw materials and supplies: at replacement cost.

Imports in progress: at their import cost in the currency of origin
converted at the year-end exchange rate plus expenses incurred since the
date of origin through each year end.

d) Property and equipment

Property and equipment are presented at cost restated through August 31,
1995 (Note 1.2.), less accumulated depreciation.

Depreciation commences in the month following acquisition or placement of
the assets in service and is computed on a straight-line basis over the
estimated useful lives of the assets. Aggregate net value does not exceed
recoverable value.

Management considers that there has been no impairment in the carrying
value of property and equipment.

F-54
<PAGE>

SULLAIR ARGENTINA SOCIEDAD ANONIMA
AND ITS SUBSIDIARY SULLAIR SAN LUIS SOCIEDAD ANONIMA

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(EXPRESSED IN CONSTANT PESOS--P$--OF AUGUST 31, 1995 AND IN NOMINAL PESOS
THEREAFTER--
NOTE 1.2.--UNLESS OTHERWISE STATED)

NOTE 1--BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
e) Long-term investments

The government bond of "Argentina Bond" has been valued at its cost,
increased on a exponential basis according to the internal rate of return at
the time of its incorporation to assets and time elapsed thereafter.

Equity investment in Bahian S.A. (Note 1.1.)

f) Administrative and selling expenses

Administrative and selling expenses are charged to income when incurred.

g) Employee severance indemnities

Employee severance indemnities are expensed as paid.

h) Income tax

Income taxes are those estimated to be paid for each year. The income tax
has been estimated by applying the 33% statutory tax rate to taxable income of
the years ended December 31, 1997 and 1996 and the 30% statutory tax rate to
taxable income of the year ended December 31, 1995. The resulting amount was
charged to income tax in the consolidated statement of income.

i) Shareholders' equity

Shareholders' equity accounts have been restated in constant pesos as of
the end of each year (Note 1.2.), except for the capital stock account which is
stated at nominal value. The adjustment required to restate such value into
constant pesos is included in the "Adjustment to capital" account.

j) Sales, rentals and services recognition

Sales, rentals and services are recognized on an accrual basis. The
Company's revenues are presented net of sales discounts.

k) Statement of income

These accounts have been restated on a constant Argentine pesos basis
through August 31, 1995 (Note 1.2.), as follows:

--Accounts accumulating monetary transactions throughout the year
(revenues, direct operating costs and non-operating expenses) have been
restated as from the month when the transaction took place.

F-55
<PAGE>

SULLAIR ARGENTINA SOCIEDAD ANONIMA
AND ITS SUBSIDIARY SULLAIR SAN LUIS SOCIEDAD ANONIMA

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(EXPRESSED IN CONSTANT PESOS--P$--OF AUGUST 31, 1995 AND IN NOMINAL PESOS
THEREAFTER--
NOTE 1.2.--UNLESS OTHERWISE STATED)

NOTE 1--BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
--Charges to income related to non-monetary assets reflect their adjustment
to restated cost (depreciation of property and equipment), and charges
related to materials reflect their adjustment to replacement cost.

NOTE 2--ANALYSIS OF CERTAIN BALANCE SHEETS AND STATEMENTS OF INCOME ACCOUNTS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------
1997 1997 1996
-------------- -------------- ---------------
US$(1) P$
-------------- --------------------------------
<S> <C> <C> <C>
BALANCE SHEETS
CURRENT ASSETS
a) Accounts receivable
Trade receivable ...................................... 11,359,844 11,359,844 7,577,756
Notes receivable ...................................... 2,009,205 2,009,205 3,099,894
Export letters receivable ............................. 864,046 864,046 1,462,404
Less: Allowance for doubtful account (Note 4) ......... (271,724) (271,724) (1,606,825)
---------- ---------- ----------
13,961,371 13,961,371 10,533,229
========== ========== ==========
b) Other receivables
Recoverable taxes ..................................... 1,399,761 1,399,761 2,055,431
Advances to employees ................................. 132,078 132,078 72,173
Prepaid expenses ...................................... 355,698 355,698 225,731
Commissions receivable ................................ 165,228 165,228 73,917
Prepaid insurance ..................................... 196,362 196,362 106,743
Loans to Directors .................................... 34,651 34,651 1,348,933
Others ................................................ 37,439 37,439 688,848
Export credit bonds ................................... -- -- 122,816
---------- ---------- ----------
2,321,217 2,321,217 4,694,592
========== ========== ==========
c) Inventories
Finished goods ........................................ 7,458,646 7,458,646 7,919,539
Manufactured materials ................................ 2,505,660 2,505,660 1,795,516
Supplies in transit ................................... 2,427,091 2,427,091 1,856,765
Advances to suppliers ................................. 296,242 296,242 25,106
---------- ---------- ----------
12,687,639 12,687,639 11,596,926
========== ========== ==========
</TABLE>

F-56
<PAGE>

SULLAIR ARGENTINA SOCIEDAD ANONIMA
AND ITS SUBSIDIARY SULLAIR SAN LUIS SOCIEDAD ANONIMA

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(EXPRESSED IN CONSTANT PESOS--P$--OF AUGUST 31, 1995 AND IN NOMINAL PESOS
THEREAFTER--
NOTE 1.2.--UNLESS OTHERWISE STATED)

NOTE 2--ANALYSIS OF CERTAIN BALANCE SHEETS AND STATEMENTS OF INCOME
ACCOUNTS--(CONTINUED)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------
1997 1997 1996
------------- ------------- -------------
US$(1) P$
------------- -----------------------------
<S> <C> <C> <C>
NON-CURRENT ASSETS
d) Other receivables
Receivables due to the partial suspension of the
tax credit ...................................... 41,396 41,396 41,396
Credits Decree No. 2054/92--VAT Purchases ......... 608,604 608,604 608,604
------- ------- -------
Subtotal (Note 7.b)) .............................. 650,000 650,000 650,000
Other tax credits ................................. 7,658 7,658 7,658
------- ------- -------
657,658 657,658 657,658
======= ======= =======
e) Long-term investments
Bahian S.A. ....................................... 199,756 199,756 199,756
Argentina Bond .................................... 34,000 34,000 67,000
------- ------- -------
233,756 233,756 266,756
======= ======= =======
CURRENT LIABILITIES
f) Accounts payable
Trade
Suppliers ........................................ 10,627,915 10,627,915 12,379,320
Related companies ................................ 1,109,854 1,109,854 758,958
---------- ---------- ----------
11,737,769 11,737,769 13,138,278
========== ========== ==========
g) Short-term bank borrowings (Note 5)
Banks
Overdrafts ....................................... 596,176 596,176 211,165
Unsecured notes .................................. 6,017,554 6,017,554 8,100,731
---------- ---------- ----------
6,613,730 6,613,730 8,311,896
========== ========== ==========
NON-CURRENT LIABILITIES
h) Long-term bank borrowings
Banks
Unsecured notes .................................. 5,342,376 5,342,376 3,560,501
========== ========== ==========
</TABLE>

- ----------------
(1) See Note 1.2.c).

F-57
<PAGE>

SULLAIR ARGENTINA SOCIEDAD ANONIMA
AND ITS SUBSIDIARY SULLAIR SAN LUIS SOCIEDAD ANONIMA

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(EXPRESSED IN CONSTANT PESOS--P$--OF AUGUST 31, 1995 AND IN NOMINAL PESOS
THEREAFTER--
NOTE 1.2.--UNLESS OTHERWISE STATED)

NOTE 2--ANALYSIS OF CERTAIN BALANCE SHEETS AND STATEMENTS OF INCOME
ACCOUNTS--(CONTINUED)
i) Aging breakdown of balance sheet accounts (amounts expressed in P$)

<TABLE>
<CAPTION>
NOT DUE
-------------------------------------------------------------------------
1ST 2ND 3RD 4TH 2ND
ITEMS QUARTER QUARTER QUARTER QUARTER YEAR TOTAL
- -------------------------------------- ----------- ----------- ------------ --------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Accounts receivable ............... 8,697,997 5,202,381 332,717 -- -- 14,233,095
Other receivables ................. 731,402 866,588 670,226 53,001 657,658 2,978,875
--------- --------- ------- ------ ------- ----------
Total assets ...................... 9,429,399 6,068,969 1,002,943 53,001 657,658 17,211,970
========= ========= ========= ====== ======= ==========
LIABILITIES
Accounts payable .................. 5,519,884 6,217,885 -- -- -- 11,737,769
Notes payable to banks(1) ......... 3,181,602 1,771,986 889,308 770,834 5,342,376 11,956,106
Social security charges ........... 274,995 -- -- -- -- 274,995
Accrued taxes ..................... 162,041 897,168 -- -- -- 1,059,209
Advances from customers ........... 116,978 -- -- -- -- 116,978
--------- --------- --------- ------- --------- ----------
Total liabilities ................. 9,255,500 8,887,039 889,308 770,834 5,342,376 25,145,057
========= ========= ========= ======= ========= ==========
</TABLE>

- ----------------
(1) Corresponding to an annual rate of 7.70%.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------
1997 1997 1996 1995
---------------- ---------------- ---------------- ----------------
US$(1) P$
---------------- ------------------------------------------------------
<S> <C> <C> <C> <C>
STATEMENTS OF INCOME
j) Net revenues
Sales, rentals and services
Sales ............................. 37,403,570 37,403,570 25,000,149 25,067,779
Rentals and services .............. 20,673,613 20,673,613 14,927,114 10,433,168
Discounts ......................... (754,894) (754,894) (559,026) (203,396)
---------- ---------- ---------- ----------
57,322,289 57,322,289 39,368,237 35,297,551
========== ========== ========== ==========
k) Cost of sales, rentals and services
Sales .............................. (31,074,571) (31,074,571) (19,739,648) (19,566,701)
Rentals and services ............... (13,012,289) (13,012,289) (9,411,754) (8,529,926)
----------- ----------- ----------- -----------
(44,086,860) (44,086,860) (29,151,402) (28,096,627)
=========== =========== =========== ===========
l) Financial expenses
On assets .......................... 670,402 670,402 998,317 (19,979)
On liabilities ..................... (1,788,856) (1,788,856) (2,543,541) (905,622)
----------- ----------- ----------- -----------
(1,118,454) (1,118,454) (1,545,224) (925,601)
=========== =========== =========== ===========
</TABLE>

- ----------------
(1) See Note 1.2.c).

F-58
<PAGE>

SULLAIR ARGENTINA SOCIEDAD ANONIMA
AND ITS SUBSIDIARY SULLAIR SAN LUIS SOCIEDAD ANONIMA

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(EXPRESSED IN CONSTANT PESOS--P$--OF AUGUST 31, 1995 AND IN NOMINAL PESOS
THEREAFTER--
NOTE 1.2.--UNLESS OTHERWISE STATED)

NOTE 3--PROPERTY AND EQUIPMENT

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
--------------------------------------------------------------
AVERAGE
ANNUAL ORIGINAL ACCUMULATED NET BOOK NET BOOK
RATE VALUE DEPRECIATION VALUE VALUE
-------- ------------ -------------- ------------ ------------
% P$ US$(1)
-------- ---------------------------------------- ------------
<S> <C> <C> <C> <C> <C>
Fixed assets
Land .............................. -- 2,638,964 -- 2,638,964 2,638,964
Buildings ......................... 2 3,740,035 713,284 3,026,751 3,026,751
Fixtures .......................... 2 273,077 38,650 234,427 234,427
Vehicles .......................... 20 1,917,016 1,308,577 608,439 608,439
Machines and equipment ............ 10 1,119,784 771,071 348,713 348,713
Office and equipment .............. 10 1,004,644 558,161 446,483 446,483
Other ............................. 25 1,393,747 1,050,953 342,794 342,794
--------- --------- --------- ---------
Subtotal ............................ 12,087,267 4,440,696 7,646,571 7,646,571
Rental machines and equipment ....... 20 17,838,062 8,161,271 9,676,791 9,676,791
Fixed assets investment Petrolera
Argentina San Jorge S.A. .......... 8 11,908,436 2,754,112 9,154,324 9,154,324
---------- --------- --------- ---------
Total ............................... 41,833,765 15,356,079 26,477,686 26,477,686
========== ========== ========== ==========
</TABLE>

- ----------------
(1) See Note 1.2.c).

Depreciation for 1997 amounted to P$6,360,947 of which P$6,107,952 was
allocated to "Cost of sales, rentals and services"; P$126,497 to
"Administrative expenses" and P$126,498 to "Selling expenses".

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
-------------------------------------------------------
AVERAGE
ANNUAL ORIGINAL ACCUMULATED NET BOOK
RATE VALUE DEPRECIATION VALUE
-------- ------------ -------------- ------------
% P$
-------- --------------------------------------------
<S> <C> <C> <C> <C>
Fixed assets
Land .................................... -- 2,638,964 -- 2,638,964
Buildings ............................... 2 3,348,076 638,484 2,709,592
Fixtures ................................ 2 265,812 33,189 232,623
Vehicles ................................ 20 1,632,683 1,079,824 552,859
Machines and equipment .................. 10 962,189 685,937 276,252
Office and equipment .................... 10 780,130 481,577 298,553
Other ................................... 25 1,212,486 1,010,100 202,386
--------- --------- ---------
Subtotal .................................. 10,840,340 3,929,111 6,911,229
Rental machines and equipment ............. 14 12,178,247 4,675,613 7,502,634
Fixed assets investment Petrolera Argentina
San Jorge S.A. ........................... 8 11,725,018 1,436,022 10,288,996
---------- --------- ----------
Total ..................................... 34,743,605 10,040,746 24,702,859
========== ========== ==========
</TABLE>

F-59
<PAGE>

SULLAIR ARGENTINA SOCIEDAD ANONIMA
AND ITS SUBSIDIARY SULLAIR SAN LUIS SOCIEDAD ANONIMA

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(EXPRESSED IN CONSTANT PESOS--P$--OF AUGUST 31, 1995 AND IN NOMINAL PESOS
THEREAFTER--
NOTE 1.2.--UNLESS OTHERWISE STATED)

NOTE 3--PROPERTY AND EQUIPMENT--(CONTINUED)
Depreciation for 1996 amounted to P$3,272,048; of which P$3,133,470 was
allocated to "Cost of sales, rentals and services"; P$55,491 to "Administrative
expenses" and P$69,140 to "Selling expenses" and P$13,947 to "Other".

NOTE 4--ALLOWANCE FOR DOUBTFUL ACCOUNTS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1997 1997 1996
--------------- ----------------------- ------------
US$(1) P$
--------------- --------------------------------------
<S> <C> <C> <C>
Balance at the beginning of the year ......... 1,606,825 1,606,825 1,309,587
Increase ..................................... 300,176 300,176 307,633
Decrease ..................................... (1,635,277) (1,635,277) (2) (10,395)
---------- ---------- ---------
Balance at the end of the year ............... 271,724 271,724 1,606,825
========== ========== =========
</TABLE>

- ----------------
(1) See Note 1.2.c).
(2) Until the year ended December 31, 1996 the Company held in its accounts
receivable an amount of long-outstanding bad debts which was offset by a
corresponding allowance. During 1997 the Company reduced the bad debt
allowance by P$1,635,277 with a corresponding reduction in the related
accounts receivable. This adjustment has had no impact on results for the
year.

NOTE 5--SHORT-TERM BANK BORROWINGS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------
1997 1997 1996
-------------- -------------- --------------
US$(1) P$
-------------- -------------------------------
<S> <C> <C> <C>
Credit balances with banks ............. 596,176 596,176 211,165
Loans .................................. 6,017,554 6,017,554 8,100,731
--------- --------- ---------
6,613,730 6,613,730 8,311,896
========= ========= =========
Weighted average interest rate ......... 7.70% 7.70% 9.50%
</TABLE>

- ----------------
(1) See Note 1.2.c).

NOTE 6--TRANSACTIONS WITH RELATED PARTIES

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1997 1997 1996
----------- ----------- --------
US$(1) P$
----------- ----------------------
<S> <C> <C> <C>
Sullair Corporation(2)
Accounts payable ......... 1,109,854 1,109,854 758,958
========= ========= =======
</TABLE>

- ----------------
(1) See Note 1.2.c).
(2) Sullair Argentina Sociedad Anonima and Sullair San Luis Sociedad Anonima
buy Sullair Corporation machines and equipment.

F-60
<PAGE>

SULLAIR ARGENTINA SOCIEDAD ANONIMA
AND ITS SUBSIDIARY SULLAIR SAN LUIS SOCIEDAD ANONIMA

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(EXPRESSED IN CONSTANT PESOS--P$--OF AUGUST 31, 1995 AND IN NOMINAL PESOS
THEREAFTER--
NOTE 1.2.--UNLESS OTHERWISE STATED)

NOTE 7--SUBSTITUTION OF THE INDUSTRIAL PROMOTION REGIME IN SULLAIR SAN LUIS
SOCIEDAD ANONIMA

a) The fiscal benefits obtained by Sullair San Luis Sociedad Anonima under
the industrial promotion regime were substituted as established by Decree No.
2054/92 of the National Government. These benefits were replaced by crediting
US$ 5,422,675 to a DGI (tax authorities) computerized current account which can
be applied, up to a maximum per year, to the payment of tax obligations
corresponding to the remaining years of the project.

During the year ended December 31, 1997 Sullair San Luis Sociedad Anonima
has used US$629,000 from the computerized current account, which is shown in
the consolidated statement of income under the "Other non-operating income net"
line, some filings have been made as established by Decree No. 804/96.

b) In accordance with Decree No. 2054/92, the companies which were exempt
from payment of VAT on purchases until Decree No. 435/90 was annulled were
granted a tax credit for an amount equivalent to the tax paid to suppliers of
raw material and semi-manufactured products from April 1, 1990 up to November
30, 1992. Decree No. 2054/92 also established the maximum amount of the tax
credit to be recognized which cannot be exceeded. Despite the total amount of
the VAT credit paid during the abovementioned period by Sullair San Luis
Sociedad Anonima amounted to US$ 1,599,128, the Company management believes
that, although the Company is entitled to file claims, the amount to be
credited by the DGI in accordance with the provisions of the abovementioned
decree will not exceed US$650,000.

During June 1995, in compliance with the terms of DGI Resolutions Nos.
3838 and 3905, Sullair San Luis Sociedad Anonima applied to this authority for
the fiscal credit certificates. The DGI has resolved to grant $232,144.68 as an
anticipated refund without recognizing the origin of the credit requested under
the terms of General Resolution No. 3838, pursuant to the provisions of General
Resolution No. 4182 by virtue of the period of suspension of the promotion
benefits implemented by sections IV and V of Law No. 23697 and complementary
regulations. The DGI has not as yet issued any opinion as regards General
Resolution No. 3905.

NOTE 8--CONTRACT WITH PETROLERA ARGENTINA SAN JORGE S.A.

During March 1995, the Company signed a contract with Petrolera Argentina
San Jorge S.A. for a term of 10 years for the execution of work for the
expansion of the power station located at the "El Trapial" field in the
province of Neuquen, and for the providing of an electricity supply service
that includes the making available of certain turbo-generators and power
plants, as well as their maintenance and commissioning.

In fiscal 1997, income has been generated for approximately US$4,107,113
and costs have been generated for approximately US$1,721,770.

F-61
<PAGE>

SULLAIR ARGENTINA SOCIEDAD ANONIMA
AND ITS SUBSIDIARY SULLAIR SAN LUIS SOCIEDAD ANONIMA

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(EXPRESSED IN CONSTANT PESOS--P$--OF AUGUST 31, 1995 AND IN NOMINAL PESOS
THEREAFTER--
NOTE 1.2.--UNLESS OTHERWISE STATED)

NOTE 9--EXTRAORDINARY RESULTS

In 1996, during the execution of work carried out under the agreement with
Petrolera Argentina San Jorge S.A., the Company incurred in extraordinary costs
in the amount, net of the effect of income taxes, of P$ 709,666, from the
incorporation of equipment of a higher standard than originally planned to
improve service and client attention, as well as in the absorption of unplanned
expenditure during the construction and development stage of this new business.

NOTE 10--SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN ACCOUNTING PRINCIPLES
ADOPTED BY THE COMPANY AND ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN
THE UNITED STATES OF AMERICA

The consolidated financial statements have been prepared in accordance
with Argentine GAAP, which differ in certain significant respects from US GAAP.
The significant differences as at and for the years ended December 31, 1997,
1996 and 1995 are reflected in the reconciliations provided in Note 11 and
principally relate to the items discussed in the following paragraphs:

a) Restatement of financial statements for general price-level changes

The Argentine GAAP consolidated financial statements of the Company were
restated through August 31, 1995 and updated through August 31, 1995
price-levels to reflect the effects of inflation in accordance with specified
rules as more fully explained in Note 1.2.

In most circumstances, US GAAP do not allow for the restatement of
financial statements. Under US GAAP, account balances and transactions are
generally stated in the units of currency of the year when the transactions
originated. This accounting model is commonly known as the historical cost
basis of accounting. However, as the economy of Argentina experienced periods
of significant inflation prior to September 1995, the presentation of the
consolidated financial statements restated for general price-level changes is
substantially similar to the methodology prescribed by Accounting Principles
Board Statement ("APB") No. 3, "Financial Statements Restated for General Price
Level Changes". This statement requires that companies operating in
hyper-inflationary environments in which inflation has exceeded 100% over the
last three years and which report in local currency restate their financial
statements on the basis of a general price-level index. August 1993 was the
first month in which the rate of inflation in Argentina, as measured by the
WPI, was below 100% for the first time in 36 consecutive months since the
release of Statement of Financial Accounting Standards ("SFAS") No. 52 "Foreign
Currency--Translation". The US GAAP reconciliation does not reverse the effects
of the general price-level restatement included in the Argentine GAAP financial
statements through August 31, 1995.

b) Presentation of the parent company financial statements

Argentine GAAP require companies with controlling financial interest in
other companies to present both parent company, where investments in
subsidiaries are accounted for by the equity method, and consolidated financial
statements, as primary and supplementary information, respectively. Because of
the special purpose of these financial statements, parent financial statements
are not included.

F-62
<PAGE>

SULLAIR ARGENTINA SOCIEDAD ANONIMA
AND ITS SUBSIDIARY SULLAIR SAN LUIS SOCIEDAD ANONIMA

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(EXPRESSED IN CONSTANT PESOS--P$--OF AUGUST 31, 1995 AND IN NOMINAL PESOS
THEREAFTER--
NOTE 1.2.--UNLESS OTHERWISE STATED)

NOTE 10--SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN ACCOUNTING PRINCIPLES
ADOPTED BY THE COMPANY AND ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN
THE UNITED STATES OF AMERICA--(CONTINUED)
c) Capitalized interest

Argentine GAAP do not require capitalization of interest on work in
progress. Under US GAAP interest incurred on working progress should be
capitalized as part of the cost of acquiring the assets until placed into
service. Accordingly, the reconciling difference for this item is presented in
the quantitative reconciliation in Note 11.

d) Advances to suppliers

Under Argentine GAAP, funds advanced to suppliers are capitalized and
included under Property and equipment prior to purchase and specific
identification. Under US GAAP these funds are treated as a deposit until the
related assets procured by such funds have been purchased and specifically
identified. Accordingly, such funds are generally classified as "Other assets".

However, due to the nature of such funds and their relative immateriality
to the consolidated financial statements taken as a whole (Note 3), the
quantitative difference between Argentine and US GAAP would be a
reclassification from Property and equipment to Other assets and, accordingly,
it does not affect the reconciliation of net income and shareholders' equity in
Note 11.

e) Recoverability of long-lived assets to be held and used in the business

Management reviews long-lived assets, primarily Property and equipment, to
be held and used in the business, and Long-term investments for the purposes of
determining and measuring impairment. Under US GAAP, SFAS No. 121 "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed of", requires a company to review assets for impairment whenever
events or changes in circumstances indicate the carrying amount of an asset may
not be recoverable.

Management estimates that there is no significant impairment of assets.

f) Vacation accrual

Under Argentine GAAP, there are no specific requirements governing the
recognition of accruals for vacations. The accepted practice in Argentina is to
expense vacation when taken and to accrue only the amount of vacation in excess
of normal remuneration.

Under US GAAP, vacation expense is fully accrued in the year the employee
renders service to earn such vacation. Accordingly, the reconciling difference
for this item is presented in the quantitative reconciliation in Note 11.

F-63
<PAGE>

SULLAIR ARGENTINA SOCIEDAD ANONIMA
AND ITS SUBSIDIARY SULLAIR SAN LUIS SOCIEDAD ANONIMA

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(EXPRESSED IN CONSTANT PESOS--P$--OF AUGUST 31, 1995 AND IN NOMINAL PESOS
THEREAFTER--
NOTE 1.2.--UNLESS OTHERWISE STATED)

Under Argentine GAAP, income tax expense is generally recognized based
upon the estimate of the current income tax liability. When income and expense
recognition for financial statement purposes does not occur in the same period
as income and expense recognition for tax purposes, the resulting temporary
differences are not considered in the computation of income tax expense for the
year.

Under US GAAP, the liability method is used to calculate the income tax
provision. Under the liability method, deferred tax assets or liabilities are
recognized with a corresponding charge or credit to income for differences
between the financial and tax basis of assets and liabilities at each year-end.
Accordingly, the reconciling difference for this item is presented in the
quantitative reconciliation in Note 11.

h) Severance indemnities

US GAAP require the accrual of liability for certain post-employment
benefits if they are related to services already rendered, are related to
rights that accumulate or vest, or are likely to be paid and can be reasonable
estimated.

As described in Note 1.5.g), the Company expenses severance indemnities
when paid. Under Argentine law, the Company is required to pay a minimum
severance indemnity based on years of service and age when an employee is
dismissed without adequate justification. While the Company expects to make
severance payments in the future, it is unable to reasonably estimate the
amount of liability, if any, at the present time. As a result, no adjustment
has been made in the US GAAP reconciliation.

i) Earnings per share

Argentine GAAP do not require disclosure of earnings per share. Under US
GAAP SFAS No. 128, "Earning per share", earnings per share have been calculated
based on the weighted average number of common shares outstanding during the
year. The calculation is presented in Note 11.

j) Inventories

As described in Note 1.5.c) the Company values its inventories at
replacement cost. Under US GAAP inventories are to be valued at the lower of
cost or realizable value. There are no material differences between the
replacement cost and the US GAAP cost. As a result, no adjustment has been made
in the US GAAP reconciliation.

F-64
<PAGE>

SULLAIR ARGENTINA SOCIEDAD ANONIMA
AND ITS SUBSIDIARY SULLAIR SAN LUIS SOCIEDAD ANONIMA

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(EXPRESSED IN CONSTANT PESOS--P$--OF AUGUST 31, 1995 AND IN NOMINAL PESOS
THEREAFTER--
NOTE 1.2.--UNLESS OTHERWISE STATED)

Unplanned expenditures during the construction of the project described in
Note 9 are included as an extraordinary loss under Argentine GAAP.

This concept does not qualify as an extraordinary item under US GAAP.

NOTE 11--RECONCILIATION OF NET INCOME (LOSS) AND SHAREHOLDERS' EQUITY TO US
GAAP

The following is a summary of the significant adjustments to net income
and shareholders' equity for the years ended December 31, 1997, 1996 and 1995,
which would be required if US GAAP were applied instead of Argentine GAAP in
the financial statements.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
1997 1997
----------------------------- -----------------------------
US$(1) P$
----------------------------- -----------------------------
NET SHAREHOLDERS' NET SHAREHOLDERS'
INCOME EQUITY INCOME EQUITY
------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C>
AMOUNTS PER
ACCOMPANYING
FINANCIAL STATEMENTS ......... 5,019,918 31,566,796 5,019,918 31,566,796
US GAAP ADJUSTMENTS
Deferred income tax ............ 74,911 (79,187) 74,911 (79,187)
Vacation accrual ............... (29,738) (399,033) (29,738) (399,033)
Capitalized interest ........... 7,486 16,104 7,486 16,104
--------- ---------- --------- ----------
AMOUNTS UNDER
US GAAP ...................... 5,072,577 31,104,680 5,072,577 31,104,680
========= ========== ========= ==========

<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------
1996 1995
----------------------------- ------------
P$
------------------------------------------
NET SHAREHOLDERS' NET
INCOME EQUITY INCOME
------------- --------------- ------------
<S> <C> <C> <C>
AMOUNTS PER
ACCOMPANYING
FINANCIAL STATEMENTS ......... 2,614,066 26,546,878 1,894,371
US GAAP ADJUSTMENTS
Deferred income tax ............ 134,320 (154,098) 90,063
Vacation accrual ............... 54,092 (369,295) (23,387)
Capitalized interest ........... (11,428) 8,618 20,046
--------- ---------- ---------
AMOUNTS UNDER
US GAAP ...................... 2,791,050 26,032,103 1,981,093
========= ========== =========
</TABLE>

- ----------------
(1) See Note 1.2.c).

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------
1997 1997 1996 1995
---------- ---------- ---------- ----------
US$(1) P$
---------- ------------------------------------
<S> <C> <C> <C> <C>
EARNINGS PER SHARE
US GAAP
Net income per share ......... 58.37 58.37 30.39 22.03
</TABLE>

- ----------------
(1) See Note 1.2.c).

F-65
<PAGE>

SULLAIR ARGENTINA SOCIEDAD ANONIMA
AND ITS SUBSIDIARY SULLAIR SAN LUIS SOCIEDAD ANONIMA

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(EXPRESSED IN CONSTANT PESOS--P$--OF AUGUST 31, 1995 AND IN NOMINAL PESOS
THEREAFTER--
NOTE 1.2.--UNLESS OTHERWISE STATED)

NOTE 12--OTHER SIGNIFICANT US GAAP DISCLOSURE REQUIREMENTS

a) Income taxes

The Company's deferred income taxes under US GAAP are comprised as
follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
1997 1997 1996 1995
------------ ------------ ------------- -------------
US$(1) P$
------------ --------------------------------------------
<S> <C> <C> <C> <C>
Deferred tax assets
Allowance for doubtful accounts ......... -- -- 8,416 --
Other temporary differences ............. 11,686 11,686 11,686 46,870
------ ------ ------ ------
11,686 11,686 20,102 46,870
Deferred tax liabilities
Other ................................... (90,873) (90,873) (174,200) (335,288)
------- ------- -------- --------
(90,873) (90,873) (174,200) (335,288)
------- ------- -------- --------
Net deferred tax assets ................... (79,187) (79,187) (154,098) (288,418)
======= ======= ======== ========
</TABLE>

- ----------------
(1) See Note 1.2.c).

The provision for income taxes computed in accordance with US GAAP differs
from that computed at the statutory tax rate (December 31, 1997 and 1996: 33%;
December 31, 1995: 30%) as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------
1997 1997 1996 1995
------------- ------------- ------------- -------------
US$(1) P$
------------- ---------------------------------------------
<S> <C> <C> <C> <C>
Income tax expense (benefit) at statutory
tax rate on pretax income in accordance
with US GAAP ............................... 2,313,367 2,313,367 1,133,778 657,482
Change of statutory income tax rate ......... -- -- 28,842 --
Restatement in constant currency(2) ......... (168,171) (168,171) (293,076) (259,341)
Permanent differences(3) .................... (207,570) (207,570) (224,902) (187,626)
--------- --------- --------- --------
Income tax expense (benefit) in accordance
with US GAAP ............................... 1,937,626 1,937,626 644,642 210,515
========= ========= ========= ========
</TABLE>

- ----------------
(1) See Note 1.2.c).
(2) Effects of differing price-level adjustments for tax and financial
statement purposes.
(3) Fiscal benefits obtained by Sullair San Luis Sociedad Anonima (see Note
7.a)).

F-66
<PAGE>

SULLAIR ARGENTINA SOCIEDAD ANONIMA
AND ITS SUBSIDIARY SULLAIR SAN LUIS SOCIEDAD ANONIMA

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(EXPRESSED IN CONSTANT PESOS--P$--OF AUGUST 31, 1995 AND IN NOMINAL PESOS
THEREAFTER--
NOTE 1.2.--UNLESS OTHERWISE STATED)

NOTE 12--OTHER SIGNIFICANT US GAAP DISCLOSURE REQUIREMENTS--(CONTINUED)
b) Supplementary cash flow information

Cash and cash equivalents at the end of each year comprises:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------
1997 1997 1996 1995
--------- --------- --------- --------
US$(1) P$
--------- --------------------------------
<S> <C> <C> <C> <C>
Cash and banks .......................... 305,876 305,876 542,989 382,280
------- ------- ------- -------
Total cash and cash equivalents ......... 305,876 305,876 542,989 382,280
======= ======= ======= =======
</TABLE>

- ----------------
(1) See Note 1.2.c).

The Company has included all highly liquid investments, having an original
maturity which does not exceed 3 months as from the year, in cash and cash
equivalents.

The Company has applied the indirect method in order to reconcile net
income of each year with the cash flow provided by operating activities.

Breakdown of amounts paid during the years is as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1997 1997 1996
-------- -------- -------
US$(1) P$
-------- ------------------
<S> <C> <C> <C>
Income tax ......... 14,646 14,646 43,820
====== ====== ======
</TABLE>

Main non-cash transactions

Main non-cash transactions, consequently eliminated in the Statement of
cash flows, are the following:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------
1997 1997 1996 1995
----------- ----------- ----------- ----------
US$(1) P$
----------- --------------------------------------
<S> <C> <C> <C> <C>
Fixed assets acquisitions financed by loans and
accounts payable ............................. -- -- 5,763,979 6,081,494
--------- --------- --------- ---------
-- -- 5,763,979 6,081,494
========= ========= ========= =========
</TABLE>

- ----------------
(1) See Note 1.2.c).

F-67
<PAGE>

SULLAIR ARGENTINA SOCIEDAD ANONIMA
AND ITS SUBSIDIARY SULLAIR SAN LUIS SOCIEDAD ANONIMA

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(EXPRESSED IN CONSTANT PESOS--P$--OF AUGUST 31, 1995 AND IN NOMINAL PESOS
THEREAFTER--
NOTE 1.2.--UNLESS OTHERWISE STATED)

NOTE 12--OTHER SIGNIFICANT US GAAP DISCLOSURE REQUIREMENTS--(CONTINUED)
Main investing activities

Proceeds from investments other than cash equivalents are as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------
1997 1997 1996 1995
-------- --------- --------- --------
US$(1) P$
-------- --------------------------------
<S> <C> <C> <C> <C>
Current investments .......... -- -- 504,387 --
1998 Argentina Bond ......... 33,000 33,000 33,000 --
------ ------ ------- -------
Total ........................ 33,000 33,000 537,387 --
====== ====== ======= =======
</TABLE>

- ----------------
(1) See Note 1.2.c).

The Company has no cash balances in currency other than U.S. dollars.
Since the exchange rates remained unchanged for the years ended December 31,
1997, 1996 and 1995, no foreign exchange gains/losses shall be adjusted for US
GAAP purposes.

c) Fair value of financial instruments

In accordance with SFAS No. 107, "Disclosures about Fair Value of
Financial Instruments", information is provided about the fair value of certain
financial instruments for which it is practicable to estimate that value.

For the purposes of SFAS No. 107, the estimated fair value of a financial
instrument is the amount at which the instrument could be exchanged in a
current transaction between willing parties, other than in a forced or
liquidation sale. The carrying values of the Companies' financial instruments
as of December 31, 1997, 1996 and 1995 approximate management's best estimate
of their fair values. The following methods and assumptions were used to
estimate the fair value of each class of financial instruments for which it is
practicable to estimate that value:

--The fair value of certain financial assets carried at cost, including
cash, short-term investments, trade receivables and other current assets
is considered to approximate their respective carrying value due to their
short-term nature.

--The fair value of accounts payable and accrued liabilities, short-term
bank borrowings, tax payable and other current liabilities is considered to
approximate their respective carrying value due to their short-term nature.

F-68
<PAGE>

SULLAIR ARGENTINA SOCIEDAD ANONIMA
AND ITS SUBSIDIARY SULLAIR SAN LUIS SOCIEDAD ANONIMA

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(EXPRESSED IN CONSTANT PESOS--P$--OF AUGUST 31, 1995 AND IN NOMINAL PESOS
THEREAFTER--
NOTE 1.2.--UNLESS OTHERWISE STATED)

NOTE 12--OTHER SIGNIFICANT US GAAP DISCLOSURE REQUIREMENTS--(CONTINUED)
d) Financial instruments with off-balance sheet risk and concentrations of
credit risk

The Company has not used financial instruments to hedge its exposure to
fluctuations in foreign currency exchange or interest rates and, accordingly,
has not entered into transactions that create off-balance sheet risks
associated with such financial instruments.

Accounts receivable substantially comprise balances with a large number of
clients. Management does not believe significant concentrations of credit risk
exist.

NOTE 13--IMPACT OF NEW ACCOUNTING STANDARD NOT YET ADOPTED

In June 1997, the Financial Accounting Board issued its Statement No. 130,
"Reporting Comprehensive Income". Among other provisions, SFAS No. 130
establishes standards for reporting and display of comprehensive income and its
components in a full set of general-purpose financial statements. It does not
address issues of recognition or measurement for comprehensive income and its
components. Management does not expect the adoption of SFAS No. 130 to have
material impact on its financial statements.

F-69

<PAGE>

INTERNATIONAL PROSPECTUS COVER

PROSPECTUS (SUBJECT TO COMPLETION)
ISSUED APRIL 30, 1998

6,700,000 SHARES

NEFF CORP.

CLASS A COMMON STOCK
---------------
OF THE 6,700,000 SHARES OF CLASS A COMMON STOCK BEING OFFERED HEREBY, 1,340,000
SHARES ARE BEING OFFERED INITIALLY OUTSIDE OF THE UNITED STATES AND CANADA
BY THE INTERNATIONAL UNDERWRITERS AND 5,360,000 SHARES ARE BEING OFFERED
INITIALLY IN THE UNITED STATES AND CANADA BY THE U.S. UNDERWRITERS. SEE
"UNDERWRITERS." ALL OF THE SHARES OFFERED HEREBY ARE BEING SOLD BY THE
COMPANY. PRIOR TO THIS OFFERING, THERE HAS BEEN NO PUBLIC MARKET FOR THE
CLASS A COMMON STOCK OF THE COMPANY. IT IS CURRENTLY ESTIMATED THAT THE
INITIAL PUBLIC OFFERING PRICE WILL BE BETWEEN $14 AND $16 PER SHARE. SEE
"UNDERWRITERS" FOR A DISCUSSION OF THE FACTORS TO BE CONSIDERED IN
DETERMINING THE INITIAL PUBLIC OFFERING PRICE.

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

THE CLASS A COMMON STOCK HAS BEEN APPROVED FOR LISTING ON THE NEW YORK STOCK
EXCHANGE UNDER THE SYMBOL "NFF."

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

SEE "RISK FACTORS" BEGINNING ON PAGE 10 FOR INFORMATION THAT
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.

---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------
PRICE $ A SHARE
---------------

UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS(1) COMPANY(2)
------------- ---------------- ------------
PER SHARE ......... $ $ $
TOTAL (3) ......... $ $ $

- -------
(1) THE COMPANY HAS AGREED TO INDEMNIFY THE UNDERWRITERS AGAINST CERTAIN
LIABILITIES, INCLUDING LIABILITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
(2) BEFORE DEDUCTING EXPENSES PAYABLE BY THE COMPANY ESTIMATED AT $700,000.
(3) THE COMPANY HAS GRANTED U.S. UNDERWRITERS AN OPTION, EXERCISABLE WITHIN
30 DAYS OF THE DATE HEREOF, TO PURCHASE UP TO AN AGGREGATE OF 1,005,000
ADDITIONAL SHARES AT THE PRICE TO PUBLIC LESS UNDERWRITING DISCOUNTS AND
COMMISSIONS FOR THE PURPOSE OF COVERING OVER-ALLOTMENTS, IF ANY. IF THE
U.S. UNDERWRITERS EXERCISE SUCH OPTION IN FULL, THE TOTAL PRICE TO PUBLIC,
UNDERWRITING DISCOUNTS AND COMMISSIONS AND PROCEEDS TO COMPANY WILL BE
$ , $ AND $ RESPECTIVELY. SEE "UNDERWRITERS."

BT ALEX. BROWN INTERNATIONAL

DONALDSON, LUFKIN & JENRETTE
INTERNATIONAL

, 1998

<PAGE>

[NEFF LOGO]

<PAGE>

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following sets forth expenses and costs payable by the Company (other
than underwriting discounts and commissions) expected to be incurred in
connection with the issuance and distribution of the securities described in
this Registration Statement. All amounts are estimated except for the SEC
registration fee and the NASD filing fee.

<TABLE>
<CAPTION>
AMOUNT
--------------
<S> <C>
Registration fee under Securities Act .......... $
NASD filing fee ................................
New York Stock Exchange fees ...................
Legal fees and expenses ........................
Accounting fees and expenses ...................
Blue Sky fees and expenses .....................
Printing and engraving expenses ................
Registrar and transfer agent fees ..............
Miscellaneous expenses .........................
Total ........................................ $
=============
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Company's Certificate of Incorporation provides that the Company shall
indemnify to the fullest extent authorized by the DGCL, each person who is
involved in any litigation or other proceeding because such person is or was a
director or officer of the Company, against all expense, loss or liability
reasonably incurred or suffered in connection therewith. The Company's
Certificate of Incorporation provides that a director or officer may be paid
expenses incurred in defending any proceeding in advance of its final
disposition upon receipt by the Company of an undertaking, by or on behalf of
the director or officer, to repay all amounts so advanced if it is ultimately
determined that such director or officer is not entitled to indemnification.

Section 145 of the DGCL permits a corporation to indemnify any director or
officer of the corporation against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred in connection with any action, suit or proceeding brought by reason of
the fact that such person is or was a director or officer of the corporation,
if such person acted in good faith and in a manner that he reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, if he had no reason to believe
his conduct was unlawful. In a derivative action, (I.E., one brought by or on
behalf of the corporation), indemnification may be made only for expenses,
actually and reasonably incurred by any director or officer in connection with
the defense or settlement of such an action or suit, if such person acted in
good faith and in a manner that he reasonably believed to be in or not opposed
to the best interests of the corporation, except that no indemnification shall
be made if such person shall have been adjudged to be liable to the
corporation, unless and only to the extent that the court in which the action
or suit was brought shall determine that the defendant is fairly and reasonably
entitled to indemnity for such expenses despite such adjudication of liability.

Pursuant to Section 102(b)(7) of the DGCL, the Company's Certificate of
Incorporation eliminates the liability of a director to the corporation or its
stockholders for monetary damages for such breach of fiduciary duty as a
director, except for liabilities arising (i) from any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) from acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) from any
transaction from which the director derived an improper personal benefit.

II-1
<PAGE>

The Company intends to obtain primary and excess insurance policies
insuring the directors and officers of the Company and its subsidiaries against
certain liabilities they may incur in their capacity as directors and officers.
Under such policies, the insurer, on behalf of the Company, may also pay
amounts for which the Company has granted indemnification to the directors or
officers.

Additionally, reference is made to the Underwriting Agreement filed as
Exhibit 1.1 hereto, which provide for indemnification by the Underwriters of
the Company, its directors and officers who sign the Registration Statement and
persons who control the Company, under certain circumstances.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

In the three years preceding the filing of this registration statement,
the Company has issued securities in the following transactions, each of which
was intended to be exempt from the registration requirements of the Securities
Act by virtue of Section 4(2) thereunder.

On December 29, 1995, the Company issued warrants to GE Capital to acquire
2,257,362 shares of Common Stock pursuant to the terms of the Stock Purchase
Warrant dated as of December 29, 1995 between GE Capital and the Company.

On December 22, 1995, the Company issued 300,000 shares of Series A
Preferred Stock to GE Capital in consideration for the receipt of $12,000,000
pursuant to the terms of the Securities Purchase Agreement dated as of December
22, 1995 between GE Capital and the Company.

On December 30, 1996, GE Capital exercised the Stock Purchase Warrant
dated as of December 29, 1995 and acquired 2,257,362 shares of Common Stock,
which it exchanged, pursuant to the terms of the Securities Exchange Agreement
dated as of December 23, 1996 between GE Capital and the Company, for 800,000
shares of Series B Convertible Preferred Stock of the Company. Also, on
December 30, 1996, GE Capital purchased 800,000 shares of Series C Convertible
Preferred Stock of the Company in exchange for consideration of $32,000,000
pursuant to the terms of the Securities Purchase Agreement dated as of December
30, 1996 between GE Capital and the Company.

On March 25, 1998, GE Capital exchanged 800,000 shares of Series B
Preferred Stock and 800,000 shares of Series C Preferred Stock for 6 million
shares of Class B Common Stock, pursuant to the terms of the Securities
Exchange Agreement dated as of March 25, 1998 between GE Capital and the
Company.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

The following documents are filed as exhibits to this registration
statement:

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- --------- --------------------------------------------------------------------------------------------
<S> <C>
1.1 Form of Underwriting Agreement.*
3.1 Certificate of Incorporation of the Company, as amended and restated.*
3.2 By-Laws of the Company, as amended and restated.**
4.1 Form of Certificate of Common Stock.*
4.2 Registration Rights Agreement, by and between Neff Corp. and GECFS, Inc., dated as of
March 25, 1998.**
4.3 Registration Rights Agreement, by and between Neff Corp. and Santos Fund I, L.P., dated as
of March 25, 1998.**
4.4 Registration Rights Agreement, by and between Neff Corp. and Santos Capitol Advisors, Inc.,
dated as of March 25, 1998.**
</TABLE>

II-2
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- --------- -----------------------------------------------------------------------------------------
<S> <C>
4.5 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 Capital Advisors, Inc. and Neff Corp., dated as of March 25,
1998.**
5.1 Opinion of Fried, Frank, Harris, Shriver & Jacobson.*
10.1 Amended and Restated Credit Agreement, by and among Neff Corp., Neff Machinery, Inc.
and Neff Rental, Inc., and General Electric Capital Corporation, as Agent, dated as of
December 31, 1997.*
10.2 Form of John Deere Light Industrial Equipment Dealer Agreement.*
10.3 Form of John Deere Light Industrial Equipment Security Agreement.*
10.4 Stock Purchase and Redemption Agreement by and among Neff Corp., Industrial Equipment
Rentals, Inc. and all of the Shareholders and Holders of Subordinated Debentures, dated
July 14, 1997.**
10.5 The Asset Purchase Agreement by and among Richbourg's Sales & Rentals, Inc., Bruce E.
Richbourg and Neff Corp., dated December 23, 1997.**
10.6 Stock Option Agreement, by and between Neff Corp. and Kevin P. Fitzgerald.*
10.7 Stock Option Agreement, by and between Neff Corp. and Robert G. Warren.**
10.8 Form of Lock-up Agreement.*
21.1 Subsidiaries of the Company.**
23.1 Consents of Deloitte & Touche LLP
23.2 Consent of Arthur Andersen LLP
23.3 Consent of Price Waterhouse & Co.
23.4 Consent of Fried, Frank, Harris, Shriver & Jacobson (included in Exhibit 5.1 above).
24.1 Power of Attorney (included on Signature Page of this Registration Statement).
27.1 Financial data schedule.**
</TABLE>

- ----------------
* To be filed by amendment.

** Previously filed.

ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual reports pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

II-3
<PAGE>

The undersigned registrant hereby undertakes that:

(1) To provide to the Underwriters at the closing specified in the
underwriting agreements certificates in such denominations and registered in
such names as required by the Underwriters to permit prompt delivery to each
purchaser.

(2) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

(3) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

(4) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

II-4
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 2 to this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Miami, State of Florida, on April 30, 1998.

NEFF CORP.

By:

Kevin P. Fitzgerald
President and Chief Executive
Officer

The undersigned directors and officers of Neff Corp. hereby constitute and
appoint Kevin P. Fitzgerald and Bonnie S. Biumi and each of them with full
power to act without the other and with full power of substitution and
resubstitution, our true and lawful attorneys-in-fact with full power to
execute in our name and behalf in the capacities indicated below this
Registration Statement on Form S-1 and any and all amendments thereto and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the SEC and hereby ratify and confirm all that such
attorneys-in-fact, or any of them, or their substitutes shall lawfully do or
cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- --------------------------------------- ---------------
<S> <C> <C>
/s/ JORGE MAS Chairman of the Board April 30, 1998
Jorge Mas
/s/ KEVIN P. FITZGERALD President and Chief Executive Officer April 30, 1998
(Principal Executive Officer)
Kevin P. Fitzgerald
/s/ JOSE RAMON MAS Director April 30, 1998
Jose Ramon Mas
/s/ BONNIE S. BIUMI Chief Financial Officer April 30, 1998
(Principal Financial Officer and
Bonnie S. Biumi
Accounting Officer)
</TABLE>

II-5
<PAGE>

INDEPENDENT AUDITORS' REPORT

To Neff Corp.:

We have audited the financial statements of Neff Corp. and subsidiaries
(the "Company") as of December 31, 1996 and 1997, and for each of the three
years in the period ended December 31, 1997, and have issued our report thereon
dated March 11, 1998, except for the preferred stock exchange referred to in
Note 1 and for the third paragraph of Note 5 as to which the dates are March
25, 1998 and April 23, 1998, respectively (included elsewhere in this
Registration Statement). Our audits also included the financial statement
schedule listed in Item 16 of this Registration Statement. These 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 schedule, when considered in relation to the basic
financial statements taken as a whole, present fairly in all material respects
the information set forth therein.

DELOITTE & TOUCHE LLP

Miami, Florida

March 11, 1998

S-1
<PAGE>

SCHEDULE II

NEFF CORP.

VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(IN THOUSANDS)

<TABLE>
<CAPTION>
BALANCE CHARGED TO BALANCE
AT BEGINNING COSTS AND AT END
OF PERIOD EXPENSES OTHER DEDUCTIONS(1) OF PERIOD
-------------- ------------ ------- --------------- ----------
<S> <C> <C> <C> <C> <C>
Classification
YEAR ENDED 12/31/95:
Allowance for doubtful accounts ......... $246 $270 $ -- $ (219) $ 297
==== ==== ==== ====== ======
YEAR ENDED 12/31/96:
Allowance for doubtful accounts ......... $297 $520 $ -- $ (442) $ 375
==== ==== ==== ====== ======
YEAR ENDED 12/31/97:
Allowance for doubtful accounts ......... $375 $957 $ -- $ (240) $1,092
==== ==== ==== ====== ======
</TABLE>

- ----------------
(1) Deductions represent bad debt write-offs and adjustments to accumulated
amortization for assets sold.

S-2
<PAGE>

INDEX TO EXHIBITS

SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- --------- ---------------------------------- -------------
23.1 Consents of Deloitte & Touche LLP
23.2 Consent of Arthur Andersen LLP
23.3 Consent of Price Waterhouse & Co.

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement No. 333-48077 of Neff
Corp. on this Amendment No. 2 to Form S-1 of our report dated March 11, 1998,
except for the preferred stock exchange referred to in Note 1 and for the third
paragraph of Note 5 as to which the dates are March 25, 1998 and April 23,
1998, respectively, on the financial statements of Neff Corp. and subsidiaries
as of December 31, 1996 and 1997 and for each of the three years in the period
ended December 31, 1997, appearing in the Prospectus, which is part of this
Registration Statement, and of our report also dated March 11, 1998 relating to
the financial statement schedule appearing elsewhere in this Registration
Statement.

We also consent to the reference to us under the headings "Selected
Financial Data" and "Experts" in such Prospectus.

DELOITTE & TOUCHE LLP

Miami, Florida

April 28, 1998

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

The consolidated financial statements reflect the 84.65 for one stock
split of the Company's outstanding common stock which is to be effected on or
about May 4, 1998. The above consent is in the form which will be furnished by
Deloitte & Touche LLP upon completion of such stock split, which is described
in Note 1 to the consolidated financial statements and assuming that from March
11, 1998 to the date of such stock split, no other events shall have occurred
that would affect the accompanying consolidated financial statements and notes
thereto.

DELOITTE & TOUCHE LLP

Miami, Florida
April 28, 1998

<PAGE>

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Amendment No. 2 to Registration Statement
No. 333-48077 of Neff Corp. on Form S-1 of our report dated February 27, 1998
on the financial statements of Richbourg's Sales & Rentals, Inc. as of December
31, 1996 and 1997 and for each of the three years in the period ended December
31, 1997, appearing in the Prospectus, which is part of this Registration
Statement.

We also consent to the reference to us under the heading "Selected
Financial Data" and "Experts" in such Prospectus.

DELOITTE & TOUCHE LLP

Charlotte, North Carolina

April 27, 1998

CONSENT OF INDEPENDENT ACCOUNTANTS

The independent auditors' report of Deloitte & Touche LLP related to the
consolidated financial statements of Neff Corp. for the three years in the
period ended December 31, 1997 has not been issued. Deloitte & Touche LLP has
indicated the form of report which will be furnished upon completion of a Neff
Corp. stock split and so long as no other events shall have occurred that would
affect the Neff Corp. consolidated financial statements. After Deloitte &
Touche issues their report on Neff Corp. we expect to be in a position to
render the following consent so long as no other events shall have occurred
that would affect the Industrial Equipment Rentals, Inc. consolidated financial
statements.

Arthur Andersen LLP

Houston, Texas
April 29, 1998

As independent public accountants, we hereby consent to the use of our
report dated September 18, 1997 on the financial statements of Industrial
Equipment Rentals, Inc. and subsidiary (and to all references to our Firm)
included in or made a part of this Registration Statement No. 333-48077 filed
by Neff Corp.

Houston, Texas
April 29, 1998

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-1 of our report dated April 22, 1998, relating
to the consolidated financial statements of Sullair Argentina Sociedad Anonima
and its subsidiary, which appears in such Prospectus. We also consent to the
reference to us under the headings "Experts" in such Prospectus.

PRICE WATERHOUSE & CO.

Buenos Aires, Argentina
April 29, 1998