-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- FORM 10-Q (Mark One) [X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2000 OR [_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 333-64993 ---------------- ANTHONY CRANE RENTAL, L.P. (Exact Name of Registrant as Specified in Its Charter) Doing Business as Maxim Crane Works Pennsylvania 25-1739175 (State or Other Jurisdiction of (I.R.S. Employer) Incorporation or Organization) Identification No.) 1165 Camp Hollow Road West Mifflin, PA 15122 (Address of Principal Executive Offices) (412) 469-3700 (Registrant's Telephone Number, Including Area Code) ---------------- Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant: (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [_] Aggregate market value of voting partnership interests held by non- affiliates as of November 7, 2000: not applicable. Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 or regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-Q. [X] Number of common partnership interests outstanding as of November 7, 2000: 100 DOCUMENTS INCORPORATED BY REFERENCE: None -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ANTHONY CRANE RENTAL, L.P. QUARTERLY REPORT ON FORM 10-Q For the Quarter Ended September 30, 2000 TABLE OF CONTENTS Part I ITEM 1 Index to Condensed Consolidated Financial Statements................................... 2 ITEM 2 Management's Discussion and Analysis of Financial Condition and Results of Operations.. 17 Part II ITEM 1 Legal Proceedings...................................................................... 21 ITEM 2 Changes in Securities.................................................................. * ITEM 3 Defaults Upon Senior Securities........................................................ * ITEM 4 Submission of Matters to a Vote of Security Holders.................................... * ITEM 5 Other Information...................................................................... * ITEM 6 Index to Exhibits and Reports on Form 8-K.............................................. 21 Signatures............................................................................. 22

-------- * Item not applicable to the Registrant for this filing on Form 10-Q. Unless otherwise indicated, the terms "Anthony Crane Rental", "ACR" and "the Company" refer collectively to Anthony Crane Rental, L.P., and its subsidiaries. Certain statements contained in this report are forward-looking in nature. These statements are generally identified by the inclusion of phrases such as "the Company expects", "the Company anticipates", "the Company believes", "the Company estimates", and other phrases of similar meaning. Whether such statements ultimately prove to be accurate depends upon a variety of factors that may affect the business and operations of the Company. 1 PART I ITEM 1. INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Page ---- Condensed Consolidated Balance Sheets--~~June~~September 30, 2000 (Unaudited) and December 31, 1999....................................................... 3 Condensed Consolidated Statements of Operations for the Three Months Ended ~~June~~September 30, 2000 and 1999 (Unaudited)...........................~~.....~~ 4 Condensed Consolidated Statements of Operations for the ~~Six~~Nine Months Ended ~~June~~September 30, 2000 and 1999 (Unaudited).................................~~.....~~ 5 Condensed Consolidated Statements of Cash Flows for the ~~Six~~Nine Months Ended ~~June~~September 30, 2000 and 1999 (Unaudited).................................~~.....~~ 6 Notes to Condensed Consolidated Financial Statements..................... 7

2 ANTHONY CRANE RENTAL, L.P. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)

~~June~~September 30, December 31, 2000 1999 ------------- ------------ (Unaudited) ASSETS Current ~~assets~~Assets: Cash and cash equivalents........................... $ 137,~~514~~031 $ 8,980 Trade accounts receivable, net of allowance for doubtful accounts of $43,~~040~~960 at ~~June~~September 30 and $3,250 at December 31............................~~.........~~ 6471,~~400~~609 56,910 Other receivables................................... ~~861~~2,095 1,974 Prepaid expenses and deposits....................... 34,~~653~~342 2,165 -------- -------- Total current assets.............................. 8285,~~428~~077 70,029 Rental equipment, net................................. ~~508~~513,~~698~~493 491,424 Property and equipment, net........................... 6971,~~151~~196 69,314 Intangible assets, net................................ 8382,~~955~~174 82,871 Debt issuance costs, net.............................. 2524,~~371~~153 27,808 Other assets.......................................... ~~698~~854 564 -------- -------- Total assets...................................... $~~770~~776,~~301~~947 $742,010 ======== ======== LIABILITIES AND PARTNERS' CAPITAL Current ~~liabilities~~Liabilities: Book overdraft...................................... $ -- $ 4,250 Accounts payable--trade............................. 1821,~~877~~746 17,344 Accrued interest.................................... 1411,~~665~~309 15,250 Accrued wages and employee benefits................. 45,~~463~~307 4,429 Accrued taxes, other than income taxes.............. 12,~~540~~521 3,395 Other accrued liabilities........................... 52,~~128~~833 5,138 Current portion of long-term debt (Note 4).......... 2,500 2,500 Current portion of capital lease obligations........ ~~1,033~~182 1,063 -------- -------- Total current liabilities......................... 4846,~~206~~398 53,369 Long-term debt, less current portion (Note 4)......... ~~707~~716,000 672,875 Long-term obligation under capital leases............. 3,~~593~~749 520 Note payable to Bain.................................. ~~548~~558 526 Other non-current liabilities......................... 54,~~340~~802 2,843 -------- -------- Total liabilities................................. ~~764~~771,~~687~~507 730,133 -------- -------- Partners' capital: ~~Holding~~Holdings capital..................................~~...~~ 76,~~080~~813 13,352 Partners' receivable................................ (1,~~512~~447) (1,524) Accumulated other comprehensive income.............. 4674 49 -------- -------- Total partners' capital........................... 5,~~614~~440 11,877 -------- -------- Total liabilities and partners' capital............... $~~770~~776,~~301~~947 $742,010 ======== ========

The accompanying notes are an integral part of the condensed consolidated financial statements. 3 ANTHONY CRANE RENTAL, L.P. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands)

Three Months Ended ~~June~~September 30, ----------------- 2000 1999 -------- ------- (Unaudited) Revenues: Equipment rentals.......................................... $89 93,~~265~~277 $5381,~~494~~665 Equipment sales............................................ 96,~~898~~793 712,~~879~~629 -------- ------- Total revenues........................................... 99100,~~163~~070 6194,~~373~~294 -------- ------- Cost of revenues: Cost of equipment rentals.................................. 5456,~~720~~029 3353,~~747~~351 Cost of equipment sales.................................... 86,~~363~~048 710,~~094~~085 -------- ------- Total cost of revenues................................... 6362,~~083~~077 4063,~~841~~436 -------- ------- Gross profit................................................. 3637,~~080~~993 2030,~~532~~858 Selling, general and administrative expenses................. 1918,~~241~~922 1117,~~639~~381 -------- ------- Income from operations....................................... 1619,~~839~~071 813,~~893~~477 Interest expense............................................. 1819,~~579~~338 916,~~646~~054 Other expense (income), net.................................~~..........~~ 592 (~~191~~112) -------- ------- Loss before taxes............................................ (~~1,799~~269) (~~562~~2,465) -------- ------- Provision for state taxes.................................... ~~100~~-- 0-- -------- ------- Net loss..................................................... $ (~~1,899~~269) $ (~~562~~2,465) ======== =======

The accompanying notes are an integral part of the condensed consolidated financial statements. 4 ANTHONY CRANE RENTAL, L.P. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands)

~~Six~~Nine Months Ended ~~June~~September 30, ------------------ 2000 1999 -------- -------- (Unaudited) Revenues: Equipment rentals........................................ $~~174~~268,~~736~~013 $ 99181,~~761~~420 Equipment sales.......................................... 2228,~~012~~805 1023,~~513~~142 -------- -------- Total revenues......................................... ~~196~~296,~~748~~818 ~~110~~204,~~274~~562 -------- -------- Cost of revenues: Cost of equipment rentals................................ ~~109~~165,~~629~~659 63116,~~426~~771 Cost of equipment sales.................................. 1824,~~540~~587 818,~~915~~999 -------- -------- Total cost of revenues................................. ~~128~~190,~~169~~246 72135,~~341~~770 -------- -------- Gross profit............................................... 68106,~~579~~572 3768,~~933~~792 Selling, general and administrative expenses............... 3857,~~585~~508 2138,~~269~~650 -------- -------- Income from operations..................................... 2949,~~994~~064 1630,~~664~~142 Interest expense........................................... 3555,~~949~~287 1834,~~475~~530 Other (income) expense, net................................~~.........~~ ~~114~~116 (~~189~~301) -------- -------- Loss before taxes.......................................... (6,~~069~~339) (14,~~622~~087) -------- -------- Provision for state taxes.................................. 200 101 -------- -------- Net loss................................................... $ (6,~~269~~539) $ (14,~~723~~188) ======== ========

The accompanying notes are an integral part of the condensed consolidated financial statements. 5 ANTHONY CRANE RENTAL, L.P. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)

~~Six~~Nine Months Ended ~~June~~September 30, ------------------- 2000 1999 -------- --------- (Unaudited) Net cash provided by operating activities.................. $ 2328,~~660~~328 $ 15,~~107~~054 -------- --------- Cash flows from investing activities: Cash paid for business acquisitions, net of cash acquired................................................ (20,654) (38196,~~140~~245) Proceeds from sale of fixed assets, including rental equipment............................................... 1113,~~574~~558 715,~~932~~163 Capital expenditures..................................... (3859,~~577~~330) (51109,~~749~~585) Other.................................................... ~~203~~(257) -- -------- --------- Net cash used in investing activities.................. (4766,~~454~~683) (81290,~~957~~667) -------- --------- Cash flows from financing activities: Change in book overdraft................................. (4,250) 14,~~594~~467 Proceeds from issuance of debt........................... 4871,~~000~~500 84417,000 Payments on debt......................................... (1328,~~875~~375) (~~273~~102,143) Payments under capital leases............................ (~~111~~806) (~~198~~6,144) Advances to shareholders................................ -- (977) Expenditures for debt issuance costs and other intangibles............................................. (1,~~436~~663) (118,~~160~~365) Partner withdrawals...................................... -- (1,310) -------- --------- Net cash provided by financing activities.............. 2836,~~328~~406 82292,~~653~~528 -------- --------- Net (decrease) increase in cash and cash equivalents......~~............~~ 4(1,~~534~~949) 16,~~803~~915 Cash and cash equivalents, beginning of period............. 8,980 5,633 -------- --------- Cash and cash equivalents, end of period................... $ 137,~~514~~031 $ 712,~~436~~548 ======== ========= Noncash investing and financing activities: Expenditures for rental equipment purchases included in accounts payable........................................ $ 45,~~148~~690 $ 2510,~~032~~726 ======== ========= Noncash rental equipment transfers....................... $ 1,577 $ -- ======== ========= Noncash partner withdrawals.............................. $ -- $ 1,050 ======== =========

The accompanying notes are an integral part of the condensed consolidated financial statements. 6 ANTHONY CRANE RENTAL, L.P. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In thousands) 1. Description of Business Anthony Crane Rental, L.P. (the "Partnership") and its subsidiaries are engaged in the rental of cranes and other heavy equipment primarily for industrial maintenance and construction to a variety of companies in the petrochemical, paper, steel, utility, mining and multiple other industries. The Partnership provides twenty-four hour service, seven days a week to customers principally in the United States. The Partnership also sells new and used equipment to commercial construction, industrial and residential users. Effective April 14, 2000, the Company began doing business as Maxim Crane Works. 2. Basis of Presentation The unaudited condensed consolidated financial statements include the accounts of the Partnership and all of its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements of the Partnership have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. During interim periods, the Partnership follows the accounting policies set forth in its annual report on Form 10-K filed with the Securities and Exchange Commission. Users of financial information produced for interim periods are encouraged to refer to the footnotes contained in the Form 10-K when reviewing interim financial results. In the opinion of management, all adjustments which are of a normal and recurring nature necessary for a fair presentation of the results of operations of these interim periods have been included. The net loss for the three and nine month periods ended September 30, 2000, is not necessarily indicative of the results to be expected for the full fiscal year. The management discussion and analysis, which follows these notes, contains additional information on the results of operations and financial position of the Company. Those comments should be read in conjunction with these financial statements. 3. Cash Flow Statement Supplemental cash flow information with respect to the acquisitions discussed in Note 5 is as follows: Details of Acquisitions: Fair value of assets acquired, net of cash acquired.................. $26,133 Fair value of liabilities assumed.................................... (5,479) ------- Cash paid for acquisition.......................................... $20,654 =======

7 ANTHONY CRANE RENTAL, L.P. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (In thousands) 4. Long-Term Debt Long-term debt consists of the following:

~~June~~September 30, December 31, 2000 1999 ------------- ------------ 10 3/8% Company Senior Notes, due 2008 (A).......~~.........~~ $155,000 $155,000 Senior Credit ~~Facility~~Facilities of the Company (B) Revolving Credit Facility......................~~.........~~ ~~257~~266,000 221,000 Term Loan......................................~~.........~~ 50,000 50,000 First Priority Term Loan.......................~~.........~~ 247,500 249,375 -------- -------- $~~709~~718,500 $675,375 Less current portion of long-term debt...........~~.........~~ 2,500 2,500 -------- -------- $~~707~~716,000 $672,875 ======== ========

(A) The Senior Notes of $155 million were issued in connection with the Company's recapitalization on July 22, 1998, and will mature on August 1, 2008. Interest on the Senior Notes accrues at the rate of 10 3/8% per annum from the issue date and is payable semi-annually. The Senior Notes are not redeemable prior to August 1, 2003. Thereafter, the Senior Notes may be redeemed at any time at the option of the Company at premium percentages ranging between approximately 105% and 102% (based on the year of redemption) if redeemed after August 1, 2003, but before August 1, 2006. Subsequent to August 1, 2006, the Senior Notes may be redeemed at no premium to the Company. Notwithstanding the foregoing, at any time prior to August 1, 2001, the Company may on any one or more occasions redeem a total of up to 35% of the aggregate principal amount of the Senior Notes originally issued under the Senior Note Indenture at a redemption price of approximately 110 3/8% of the principal if that redemption is paid for with the proceeds of an equity offering. The Senior Note Indenture contains certain restrictive covenants that limit, among other things, the ability of the Company to make distributions, incur additional indebtedness, consolidate or sell substantially all of its assets, and enter into transactions with related parties. (B) The Senior Credit Facilities consist of a $425.0 million six-year non- amortizing Revolving Credit Facility, a $50.0 million eight-year non- amortizing Term Loan and a $250.0 million seven-year First Priority Term Loan. The Revolving Credit Facility is available on a revolving basis subject to a borrowing base during the period commencing on the date of the Closing of the recapitalization transaction (July 22, 1998) and ending on the date that is six years after the date of the Closing. At the Company's option, loans made under the Revolving Credit Facility bear interest at either (i) the Base Rate (defined as the highest of the rate of interest announced publicly by Fleet National Bank from time to time as its prime rate or the Federal funds effective rate from time to time plus 0.50%) plus a margin of 1.5%, subject to adjustment based on a leverage test, or (ii) the reserve-adjusted London Interbank Offered Rate ("LIBO") plus a margin of 2.5%, subject to adjustment based on a leverage test. The Term Loan bears interest, at the Company's option, at either (i) the Base Rate plus a margin of 1.75%, or (ii) the reserve-adjusted LIBO Rate plus a margin of 2.75%. The First Priority Term Loan bears interest, at the Company's option, at either (i) the Base Rate plus a margin of 2.25%, subject to adjustment based on a leverage test, or (ii) the reserve- adjusted LIBO Rate plus a margin of 3.25%, subject to adjustment based on a leverage test. 8 ANTHONY CRANE RENTAL, L.P. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (In thousands) 4. Long-Term Debt (continued) Revolving loans may be borrowed, repaid and reborrowed from time to time until six years after the closing of the Senior Credit Facilities. The Term Loan may be repaid at any time but is subject to certain call protections and must be repaid in full eight years after the closing of the Senior Credit Facilities. The First Priority Term Loans will be amortized equal to 1% of the aggregate principal amount thereof with the unpaid balance thereof payable in full on July 20, 2006. The Revolving Credit Facility and First Priority Term Loans are secured by a first-priority perfected lien, and the Term Loan is secured by a second- priority perfected lien, on all partnership interests of the Company and all property and assets (tangible and intangible) of the Company and each of its material subsidiaries, including, without limitation, all intercompany indebtedness, and all capital stock (or similar equity interests owned by the Company) of each of the Company's direct and indirect material subsidiaries, whenever acquired and wherever located; provided, however, that no more than 65% of the capital stock or similar equity interests of non-U.S. subsidiaries, if any, will be required to be pledged as security in the event that a pledge of a greater percentage would result in increased tax or similar liabilities for the Company and its subsidiaries on a consolidated basis or would violate applicable law. The Senior Credit Facilities provide for mandatory repayments, subject to certain exceptions, of the Revolving Credit Facility and the Term Loan based on certain net asset sales outside the ordinary course of business of the Company and its subsidiaries and the net proceeds of certain debt and equity issuances. Outstanding loans under the Revolving Credit Facility and the Term Loan (subject to certain call provisions) are voluntarily pre- payable without penalty; provided, however, that LIBO breakage costs, if any, are borne by the Company. The Senior Credit Facilities contain certain restrictive covenants; the most restrictive of which include financial ratios. The obligations of the Company under the Senior Notes and Senior Credit Facilities are guaranteed on a full, unconditional joint and several basis, by all material existing, direct and indirect domestic subsidiaries of the Company and will be guaranteed by all material future, direct and indirect domestic and foreign subsidiaries of the Company. The aggregate principal debt maturities of long-term debt for the next five years ending December 31, are as follows: 2000................................................................. $ 2,500 2001................................................................. 2,500 2002................................................................. 2,500 2003................................................................. 2,500 2004................................................................. 268,500 Thereafter........................................................... 440,000 -------- $718,500 ========

5. Business Acquisitions On June 30, 2000, the Company acquired substantially all of the assets and assumed certain liabilities of R.E. Coulter Crane, Inc. The aggregate purchase price at closing was approximately $9.4 million in cash plus assumed liabilities of $.1 million, subject to certain post-closing purchase price adjustments. The acquisition was accounted for under the purchase method of accounting and, accordingly, the purchase price has been allocated to the assets acquired, principally consisting of equipment, based on their estimated fair values at the date of acquisition. Goodwill in the amount of $1.8 million was recorded as a result of the acquisition and is being amortized over 15 years. 9 ANTHONY CRANE RENTAL, L.P. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (In thousands) 5. Business Acquisitions (continued) On March 15, 2000, the Company acquired substantially all of the assets of King's Crane Service, Inc. The aggregate purchase price was $4.6 million in cash, subject to certain post-closing purchase price adjustments. The acquisition was accounted for under the purchase method of accounting and, accordingly, the purchase price has been allocated to the assets acquired, principally consisting of equipment, based on their estimated fair values at the date of acquisition. Goodwill in the amount of $1.0 million was recorded as a result of the acquisition and is being amortized over 15 years. On January 27, 2000, the Company acquired all of the outstanding common stock of Sacramento Valley Crane Service, Inc. The aggregate purchase price for the acquisition at closing was approximately $6.6 million in cash plus assumed liabilities of approximately $5.4 million, subject to certain post-closing purchase price adjustments. The acquisition was accounted for under the purchase method of accounting and, accordingly, the purchase price has been allocated to the assets acquired, principally consisting of equipment, based on their estimated fair values at the date of acquisition. Goodwill in the amount of $.7 million was recorded as a result of the acquisition and is being amortized over 15 years. The operating results of these acquisitions are included in the Partnership's consolidated results of operations from the date of acquisition. Certain pro forma financial information related to the above acquisitions have not been presented since the acquisitions were not material to the Partnership's consolidated financial position or its consolidated results of operations. 6. Equity Investment in Joint Venture On February 29, 2000, the Company entered into an agreement with Van Seumeren, USA, to form a joint venture, AVS Services, L.L.C., to engage in heavy lift services. Under the agreement, each partner in the joint venture shares equally in the profit or loss of the joint venture. In connection with the agreement, the Company is obligated to contribute up to $.5 million as its capital contribution to the joint venture. Through September 30, 2000, the Company had made capital contributions totaling $.2 million to the joint venture. The Company's investment in the joint venture has been accounted for using the equity method. On October 31, 2000, the Company contributed $4.5 million to the joint venture. 7. Lease Commitments In connection with the acquisition of Sacramento Valley Crane Service Inc., (See Note 5), and the Carlisle acquisition completed in 1999, the Partnership assumed certain obligations related to capital leases. 10 ANTHONY CRANE RENTAL, L.P. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (In thousands) 7. Lease Commitments (continued) The following is a schedule of future minimum lease payments under the capital lease agreements together with the present value of the net minimum lease payments as of September 30, 2000:

Year ~~Ending~~ending December 31: ------------------------ 2000.................................................................... $~~1,199~~ 260 2001.................................................................... ~~903~~939 2002.................................................................... ~~726~~771 2003.................................................................... ~~618~~705 2004.................................................................... ~~828~~839 Thereafter.............................................................. 1,386 ------ Total minimum lease payments............................................ 54,~~660~~900 Less amount representing interest....................................... ~~1,034~~969 ------ Present value of minimum lease payments................................. 43,~~626~~931 Less current portion.................................................... ~~1,033~~182 ------ $3,~~593~~749 ======

Included in rental equipment is cost and accumulated depreciation for these leased assets of approximately $4,127 and $434, respectively, at September 30, 2000 and $1,716 and $455, respectively, at December 31, 1999. 8. Contingencies The Company was the defendant in a lawsuit by its former insurance carrier, who had asserted a claim for premiums allegedly due on a contract of insurance in the amount of approximately $455. In October 2000, the lawsuit was settled for $300, which was covered by an indemnity from the predecessor partners prior to the Company's recapitalization on July 22, 1998. The Company is also the defendant in a lawsuit resulting from negotiations in connection with a proposed acquisition in which the potential seller is seeking contractual damages in excess of $11 million plus other consequential damages that may be proved at trial for breach of contract and the confidentiality provisions in a letter of intent executed between the parties. The lawsuit was amended to include a claim that the Company committed fraud in connection with the proposed acquisition. The Company has denied any liability and intends to vigorously defend the claims. The Company is a party to a number of other lawsuits and claims arising out of the usual course of business. While the Company cannot predict the outcome of these matters, in the opinion of management upon advice of counsel, any liability resulting thereunder will not have a material adverse effect on the Company's business or financial condition, after giving effect to provisions already recorded. However, there can be no assurance that an adverse outcome in one or more of these matters will not be material to results of operations in any one period. Additionally, certain of these matters are covered by the indemnity from the predecessor partners prior to the Company's recapitalization. 11 ANTHONY CRANE RENTAL, L.P. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (In thousands) 9. Subsidiary Guarantors All of the Company's subsidiaries are wholly owned and all of the outstanding debt under the Company's Senior Notes and Senior Credit Facilities are guaranteed on a full, unconditional and joint and several basis by all of these subsidiaries (the "Guarantor Subsidiaries"). The following summarized financial information presents the financial position for the Company and Guarantor Subsidiaries as of September 30, 2000 and December 31, 1999, the results of operations for the three-month and nine-month periods ended September 30, 2000 and 1999, and cash flows for the nine months ended September 30, 2000 and 1999. Separate financial statements of the Guarantor Subsidiaries have not been presented because management believes they are not material to investors. 12 ANTHONY CRANE RENTAL, L.P. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (In thousands) 9. Subsidiary Guarantors (continued) The following table summarizes the financial position for the Company and its guarantor subsidiaries as of September 30, 2000 and December 31, 1999:

~~June~~September 30, 2000 --------------------------------------------------------- Other Operating Guarantor Intercompany Company Carlisle Subsidiaries Eliminations Consolidated --------- -------- ------------ ------------ ------------ (Unaudited) BALANCE SHEETS Assets: Total current assets.... $ 4859,~~682~~516 $ 3943,~~831~~825 $ 24,~~599~~675 $ (822,~~684~~939) $ 8285,~~428~~077 Investment in subsidiaries........... 3536,~~815~~792 -- -- (3536,~~815~~792) -- Rental equipment, net of accumulated depreciation........... ~~355~~354,~~752~~922 ~~143~~149,~~652~~081 9,~~294~~490 -- ~~508~~513,~~698~~493 Property and equipment, net of accumulated depreciation........... 5759,~~839~~858 9,~~329~~554 1,~~983~~784 -- 6971,~~151~~196 Other assets............ ~~266~~272,~~413~~059 7170,~~716~~200 ~~731~~35 (~~228~~235,~~836~~113) ~~110~~107,~~024~~181 -------- -------- ------- --------- -------- Total assets.......... $~~764~~783,~~501~~147 $~~264~~272,~~528~~660 $1415,~~607~~984 $(~~273~~294,~~335~~844) $~~770~~776,~~301~~947 ======== ======== ======= ========= ======== Liabilities and partners' capital: Total current liabilities............ $ 4354,~~964~~282 $ 1214,~~735~~696 $ ~~191~~359 $ (822,~~684~~939) $ 4846,~~206~~398 Long term debt, less current portion........ ~~707~~716,000 ~~228~~235,~~836~~113 -- (~~228~~235,~~836~~113) ~~707~~716,000 Other non-current liabilities............ 7,~~923~~425 1,~~558~~684 -- -- 9,~~481~~109 -------- -------- ------- --------- -------- Total liabilities..... ~~758~~777,~~887~~707 ~~243~~251,~~129~~493 ~~191~~359 (~~237~~258,~~520~~052) ~~764~~771,~~687~~507 Partners' capital....... 5,~~614~~440 21,~~399~~167 1415,~~416~~625 (3536,~~815~~792) 5,~~614~~440 -------- -------- ------- --------- -------- Total liabilities and partners' capital.... $~~764~~783,~~501~~147 $~~264~~272,~~528~~660 $1415,~~607~~984 $(~~273~~294,~~335~~844) $770,301 ======== ======== ======= ========= ======== December 31, 1999 --------------------------------------------------------- Assets: Total current assets.... $ 53,399 $ 20,000 $ 1,188 $ (4,558) $ 70,029 Investment in subsidiaries........... 34,776 ~~-- -- (34~~,~~776)~~947 -- Rental equipment, net of accumulated depreciation........... 386,898 94,993 9,533 -- 491,424 Property and equipment, net of accumulated depreciation........... 58,619 8,937 1,758 -- 69,314 Other assets............ 210,448 74,002 69 (173,276) 111,243 -------- -------- ------- --------- -------- Total assets.......... $744,140 $197,932 $12,548 $(212,610) $742,010 ======== ======== ======= ========= ======== Liabilities and partners' capital: Total current liabilities............ $ 56,375 $ 1,359 $ 193 $ (4,558) $ 53,369 Long-term debt, less current portion........ 672,875 173,276 -- (173,276) 672,875 Other non-current liabilities............ 3,190 876 -- (177) 3,889 -------- -------- ------- --------- -------- Total liabilities..... 732,440 175,511 193 (178,011) 730,133 Partners' capital....... 11,700 22,421 12,355 (34,599) 11,877 -------- -------- ------- --------- -------- Total liabilities and partners' capital.... $744,140 $197,932 $12,548 $(212,610) $742,010 ======== ======== ======= ========= ========

~~Three~~December ~~Months Ended June 30~~31, ~~2000~~1999 ---------------------------------------------~~--------------~~ ~~Other~~Assets: ~~Operating Guarantor Intercompany Company Carlisle Subsidiaries Eliminations Consolidated --------- -------- ------------ ------------ ------------ (Unaudited) STATEMENTS OF OPERATIONS~~ Total ~~revenues~~current assets............ $ 6553,~~480~~399 $~~31,891~~ $320,~~670~~000 $( 1,~~878)~~188 $ ~~99,163 -------- ------- ------ ------- -------- Total cost of revenues.. 43,022 20,361 1,578~~ (14,~~878~~558) ~~63,083~~$ ~~Selling~~70,029 ~~general~~Investment ~~and~~in ~~administrative~~subsidiaries......~~...~~ 1434,~~033~~776 ~~4,630 578~~ -- ~~19,241~~ --~~------~~ ~~-------~~(34,776) --~~----~~ ~~-------~~Rental ~~-------- Income from operations.. 8~~equipment,~~425~~ ~~6,900~~net ~~1,514~~of --accumulated ~~16,839 Interest expense and other (income) expense, net~~depreciation.......~~.............~~ 12386,~~490~~898 594,~~642~~993 ~~506~~9,533 -- 18491,~~638~~424 ~~--------~~Property ~~-------~~and ~~------~~equipment, ~~-------~~net ~~--------~~of ~~Income~~accumulated ~~(loss) before taxes~~depreciation.......~~...........~~ (458,~~065)~~619 18,~~258~~937 1,~~008~~758 -- (169,~~799)~~314 ~~Provision~~Other ~~for state taxes~~assets.................. ~~100 -- -- -- 100 -------- ------- ------ ------- -------- Net income (loss)~~..~~.....~~ ~~$ (4~~210,~~165)~~448 ~~$ 1~~74,~~258~~002 ~~$1,008~~69 ~~$ -- $~~ (1173,~~899~~276) ~~======== ======= ====== ======= ======== Three Months Ended June 30~~111,243 ~~1999~~ --------~~---------------------------------------------------~~ ~~(Unaudited) Total revenues.......... $ 58,797 $~~ -- ~~$2,576 $~~ -- ~~$ 61,373~~ ----~~----~~ ------- ------ ---~~----~~ -------- Total ~~cost of revenues~~assets.. ~~39,552 -- 1,289 -- 40,841 Selling, general and administrative~~......... ~~11,400 -- 239 -- 11,639 -------- ------- ------ ------- -------- Income from operations~~.. ~~7,845 -- 1,048 -- 8,893 Interest expense and other (income) expense, net~~.....~~...............~~ 9$744,~~153~~140 ~~-- 302 -- 9~~$197,~~455~~932 ~~-------- ------- ------ ------- -------- Income (loss) before taxes.................. (1~~$12,~~308)~~548 ~~-- 746 -- (562) Provision for state taxes.................. -- -- -- -- -- -------- ------- ------ ------- -------- Net income (loss).......~~ $ (1212,~~308~~610) $742,010 ~~-- $ 746 $ -- $ (562)~~ ======== ======== ======= ========= ======== ~~Six~~Liabilities ~~Months~~and ~~Ended~~partners' ~~June~~capital: ~~30, 2000 ----------------------------------------------------------- (Unaudited)~~ Total ~~revenues~~current liabilities.......~~...~~ $~~135,266~~ ~~$58~~56,~~989~~375 $~~6,816~~ ~~$(4~~1,~~323)~~359 $~~196,748~~ ~~--------~~193 ~~-------~~$ ~~------ ------- -------- Total cost of revenues.. 89,295 40,195 3,002~~ (4,~~323~~558) ~~128,169~~$ ~~Selling~~53,369 ~~general~~Long ~~and~~term ~~administrative......... 28~~debt,~~790~~ ~~8,997~~less ~~798~~current ~~-- 38,585 -------- ------- ------ ------- -------- Income from operations~~portion.. ~~17,181 9,797 3,016 -- 29,994 Interest expense and other (income) expense, net~~.................... ~~24,289 10,819 955 -- 36,063 -------- ------- ------ ------- -------- Income (loss) before taxes~~..~~................~~ (7672,~~108)~~875 (1173,~~022)~~276 ~~2,061~~ -- (6173,~~069~~276) ~~Provision~~672,875 ~~for~~Other ~~state taxes.................. 200~~ non--current ~~-- -- 200 -------- ------- ------ ------- -------- Net income (loss)~~liabilities...~~....~~ ~~$ (7~~3,~~308)~~190 ~~$(1,022)~~876 ~~$2,061 $~~ -- $ (~~6,269~~177) ~~======== ======= ====== ======= ======== Six Months Ended June 30~~3,889 ~~1999~~ --------~~---------------------------------------------------~~ ~~(Unaudited) Total revenues.......... $104,734 $~~ -- ~~$5,540 $~~ -- ~~$110,274~~ ----~~----~~ ------- ------ ---~~----~~ -------- Total ~~cost of revenues~~liabilities.. ~~69,670 -- 2,671 -- 72,341 Selling, general and administrative~~......... ~~20,831 -- 438 -- 21,269 -------- ------- ------ ------- -------- Income from operations~~.. 14732,~~233~~440 ~~-- 2~~175,~~431~~511 --193 ~~16,664 Interest expense and other~~ (~~income~~178,011) ~~expense~~730,133 ~~net~~Partners' capital...............~~.....~~ 1711,~~644~~700 --22,421 ~~642~~12,355 --(34,599) 1811,~~286~~877 -------- -------- ------- ------- -- ------ ~~Income (loss) before taxes.................. (3,411)~~ -- ~~1,789~~Total --liabilities ~~(1,622)~~and ~~Provision~~partners' ~~for state taxes~~capital............~~......~~ ~~101 -- -- -- 101 -------- ------- ------ ------- -------- Net income (loss).......~~ $ (3744,~~512)~~140 $197,932 -- $112,~~789~~548 $ ~~-- $~~ (1212,~~723~~610) $742,010 ======== ======== ======= ========= ========

13 ANTHONY CRANE RENTAL, L.P. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (In thousands) 9. Subsidiary Guarantors (continued) The following table summarizes the results of operations for the Company and its guarantor subsidiaries for the three and nine month periods ended September 30, 2000 and 1999.

~~Six~~Three Months Ended ~~June~~September 30, 2000 ----------------------------------------------------------- Other Operating Guarantor Intercompany Company Carlisle Subsidiaries Eliminations Consolidated --------- -------- ------------ ------------ ------------ (Unaudited) STATEMENTS OF ~~CASH~~OPERATIONS ~~FLOWS~~Total ~~Net~~revenues.......... ~~cash~~$ ~~provided~~66,818 by$31,072 ~~operating~~$ ~~activities~~4,056 $(1,876) $100,070 -------- ------- ------- ------- -------- Total cost of revenues.. 41,200 20,878 1,875 (1,876) 62,077 Selling, general and administrative......... $14,110 34,~~264~~385 $427 -- 18,~~146~~922 $-------- 2------- ------- ------- -------- Income from operations.. 11,~~250~~508 $5,809 1,754 -- $19,071 23Interest expense and other (income) expense,~~660~~ net.................... 12,753 6,041 546 -- 19,340 -------- ------- ------- ------- -------- Income (loss) before taxes.................. (1,245) (232) 1,208 -- (269) Provision for state taxes.................. -- -- -- ~~Net~~-- ~~cash~~-- ~~used~~-------- in------- ~~investing~~------- ~~activities~~------- -------- Net income (loss)....... $ (261,~~701~~245) $ (~~19,460~~232) $( 1,~~293)~~208 $ -- $ (47269) ======== ======= ======= ======= ======== Three Months Ended September 30,~~454~~ 1999 ----------------------------------------------------------- (Unaudited) Total revenues.......... $ 64,862 $27,785 $ 2,532 $ (885) $ 94,294 -------- ------- ------- ------- -------- Total cost of revenues.. 45,250 17,928 1,143 (885) 63,436 Selling, general and administrative......... 12,971 4,173 237 -- 17,381 -------- ~~Net~~------- ~~cash~~------- ~~provided~~------- by-------- ~~financing~~Income ~~activities~~from operations.. 6,641 5,684 1,152 -- 13,477 Interest expense and other (income) expense, net.................... $11,738 283,~~214~~816 $388 ~~114~~-- $15,942 -------- $------- ------- $------- 28-------- Income (loss) before taxes.................. (5,~~328~~097) 1,868 764 -- (2,465) Provision for state taxes.................. -- -- -- -- -- -------- ------- ------- ------- -------- ~~Six~~Net income (loss)....... $ (5,097) $ 1,868 $ 764 $ -- $ (2,465) ======== ======= ======= ======= ======== Nine Months Ended ~~June~~September 30, ~~1999~~2000 ----------------------------------------------------------- (Unaudited) ~~Net~~Total ~~cash~~revenues.......... ~~(used~~$202,083 in$90,061 $10,872 $(6,198) ~~provided~~$296,818 by-------- ~~operating~~------- ~~activities~~------- ------- -------- Total cost of revenues.. 130,494 61,073 4,877 (6,198) 190,246 Selling, general and administrative......... 42,901 13,382 1,225 -- 57,508 -------- ------- ------- ------- -------- Income from operations.. $28,688 ~~(107)~~15,606 $4,770 -- $49,064 Interest expense and other (income) expense, net.................... 37,043 16,860 1,~~214~~500 $-- 55,403 -------- $------- ------- ------- -------- Income (loss) before taxes.................. (8,355) (1,~~107~~254) 3,270 -- (6,339) Provision for state taxes.................. 200 -- -- -- 200 -------- ------- ------- ------- -------- Net ~~cash~~income ~~used in investing activities~~(loss)....... $ (808,~~863~~555) $(1,254) $ 3,270 $ -- $ (16,~~094~~539) $======== ======= ======= ======= ======== Nine Months Ended September 30, 1999 ----------------------------------------------------------- $(81Unaudited) Total revenues.......... $169,~~957~~589 $27,785 $ 8,073 $ (885) $204,562 -------- ------- ------- ------- -------- Total cost of revenues.. 114,913 17,928 3,814 (885) 135,770 Selling, general and administrative......... 33,802 4,173 675 -- 38,650 -------- ~~Net~~------- ~~cash~~------- ~~provided~~------- by-------- ~~financing~~Income ~~activities~~from operations.. 20,874 5,684 3,584 -- 30,142 Interest expense and other (income) expense, net.................... $29,382 823,~~653~~816 $1,031 -- $34,229 -------- $------- ------- $------- 82-------- Income (loss) before taxes.................. (8,~~653~~508) 1,868 2,553 -- (4,087) Provision for state taxes.................. 101 -- -- -- 101 -------- ------- ------- ------- -------- Net income (loss)....... $ (8,609) $ 1,868 $ 2,553 $ -- $ (4,188) ======== ======= ======= ======= ========

14 ANTHONY CRANE RENTAL, L.P. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (In thousands) 9. Subsidiary Guarantors (continued) The following table summarizes the cash flows for the Company and its guarantor subsidiaries for the nine months ended September 30, 2000 and 1999.

~~Equipment~~Nine ~~Equipment~~Months ~~Rentals~~Ended ~~Sales~~September ~~Total~~30, 2000 ----------------------------------------------------------- Other Operating Guarantor Intercompany Company Carlisle Subsidiaries Eliminations Consolidated --------- -------- ~~Three~~------------ ~~months~~------------ ~~ended,~~------------ ~~June~~(Unaudited) ~~30,~~STATEMENTS ~~2000:~~OF ~~Revenues~~CASH FLOWS Net cash provided by operating activities... $ (12,446) $ 21,904 $ 3,524 $ 15,346 $ 28,328 --------- -------- ------- -------- --------- Net cash used in investing activities...~~..................................~~ $ 89(24,~~265~~252) $(23,735) 9$(3,~~898~~350) $(15,346) 99$ (66,~~163~~683) ~~EBITDA~~--------- -------- ------- -------- --------- Net cash provided by financing activities...~~.......................................~~ $ 3136,~~247~~213 $ ~~578~~193 $ ~~31,825~~-- ~~Six~~$ ~~months~~-- ~~ended~~$ 36,406 ~~June~~--------- -------- ------- -------- --------- Nine Months Ended September 30, ~~2000:~~1999 ~~Revenues~~----------------------------------------------------------- (Unaudited) Net cash (used in) provided by operating activities............. $ (2,478) $ 1,032 $ 2,415 $ 4,085 $ 5,054 --------- -------- ------- -------- --------- Net cash used in investing activities...~~........................~~ $~~174~~(286,~~736~~274) $22 1,~~012~~401 $~~196~~(1,~~748~~910) ~~EBITDA~~$ (3,884) $(290,667) --------- -------- ------- -------- --------- Net cash provided by financing activities...~~.......................................~~ $ 57294,~~688~~180 $ ~~885~~(1,451) $ 58-- $ (201) $ 292,~~573~~528 --------- -------- ------- -------- ---------

10. Operating Segment Information The Company identifies and manages its business as two operating segments, equipment rentals and equipment sales. The equipment rentals segment is engaged in the rental of cranes and other heavy equipment primarily for industrial maintenance and construction to a variety of companies in the petrochemical, paper, steel, utility, mining and multiple other industries, primarily in the United States. The equipment sales segment sells new and used equipment to commercial construction, industrial and residential users. The accounting policies of the segments are the same as those of the Company. The Company evaluates the performance of its segments and allocates resources to them based on earnings before interest, taxes, depreciation and amortization (EBITDA), as defined to exclude net gains on sales of used equipment. The Company does not maintain information about assets for its reportable segments. Accordingly, the items specified in Paragraph 28 of FAS 131 are not applicable. Additionally, the Company has not disclosed prior years' segment data on a comparative basis, because management found it impracticable to obtain the comparative data for the prior years. 15 ANTHONY CRANE RENTAL, L.P. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (In thousands) 10. Operating Segment Information (continued) The table below presents information about reported segments for the three and nine months ended September 30, 2000:

16 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Three Months Ended September 30, 2000 Compared to the Three Months Ended September 30, 1999 Equipment Rental Revenues: Revenues from equipment rentals increased $11.6 million, or 14.2%, to $93.3 million for the quarter ended September 30, 2000 as compared to $81.7 million for the same period in the prior year. This increase is the result of incremental revenues generated by the acquisitions completed during 1999 and 2000, as well as internal growth of the Company's existing yards. Equipment Sales: Revenues from equipment sales decreased $5.8 million, or 46.0%, to $6.8 million for the quarter ended September 30, 2000, as compared to $12.6 million for the same period in the prior year. This decrease is due to an unusually high level of fleet sales activity during the prior year's quarter to balance the overall fleet mix. Total Revenues: Based on the foregoing, total revenues increased $5.8 million, or 6.1%, to $100.1 million for the quarter ended September 30, 2000, as compared to $94.3 million for the same period in the prior year. Gross Profit: Gross profit from equipment rentals increased $8.9 million, or 31.4%, to $37.2 million for the quarter ended September 30, 2000, as compared to $28.3 million for the same period in the prior year. As a percent of equipment rental revenues, gross profit from equipment rentals improved from 34.6% for the quarter ended September 30, 1999 to 39.9% for the quarter ended September 30, 2000. The increase is due to higher equipment utilization rates, selective price increases and various cost improvement activities, including accelerated integration actions on the 1999 and 2000 acquisitions and consolidation of certain operating locations. Gross profit from equipment sales decreased $1.8 million, or 72.0%, to $.7 million for the quarter ended September 30, 2000, as compared to $2.5 million for the same period in the prior year. As a percent of equipment sales revenues, gross profit from equipment sales declined to 10.3% for the quarter ended September 30, 2000, as compared to 19.8% for the same period in the prior year. The decrease in gross profit margin is primarily due to the mix of equipment sales. Based on the foregoing, total gross profit increased $7.1 million, or 23.0%, to $38.0 million for the quarter ended September 30, 2000, as compared to $30.9 million for the same period in the prior year. Selling, General and Administrative Expenses: Selling, general and administrative expenses increased $1.5 million, or 8.6%, to $18.9 million for the quarter ended September 30, 2000, as compared to $17.4 million for the same period in the prior year. The increase is primarily the result of an increase in employee related costs, depreciation expense on non-rental equipment and amortization resulting from the acquisitions completed in 1999 and early 2000, as well as internal growth. As a percent of total revenues, selling, general and administrative expenses increased slightly to 18.9% for the quarter ended September 30, 2000, as compared to 18.5% for the same period in the prior year. Earnings Before Interest, Taxes, Depreciation and Amortization: EBITDA (as defined to exclude net gains on sales of used equipment) increased $9.4 million, or 37.4%, to $34.5 million for the quarter ended September 30, 2000, as compared to $25.1 million for the same period in the prior year. EBITDA from equipment rentals (as further defined to exclude gains on the sale of new equipment) increased $9.5 million, or 39.1% to $33.8 million for the quarter ended September 30, 2000, as compared to $24.3 million for the same period in the prior year. As a percent of rental revenues, EBITDA from rental operations increased to 36.2% for the quarter ended September 30, 2000, as compared to 29.7% for the same period in the prior year. This increase is due to the factors discussed above. 17 Interest Expense: Interest expense increased $3.3 million, or 20.6%, to $19.3 million for the quarter ended September 30, 2000, as compared to $16.0 million for the same period in the prior year. This increase reflects the higher level of borrowings outstanding attributable to the acquisitions completed in 1999 and early 2000 and the Company's continued investment in rental equipment, as well as an increase in interest rates. Net Loss: Net loss decreased $2.2 million, or 88.0%, to a net loss of $.3 million for the quarter ended September 30, 2000, as compared to a net loss of $2.5 million for the same period in the prior year as a result of the factors discussed above. Nine Months Ended September 30, 2000 Compared to the Nine Months Ended September 30, 1999 Equipment Rental Revenues: Revenues from equipment rentals increased $86.6 million, or 47.7%, to $268.0 million for the nine months ended September 30, 2000, as compared to $181.4 million for the same period in the prior year. This increase was largely due to the acquisitions completed during 1999 and early 2000, as well as internal growth of the Company's existing yards. Additionally, management has noted a recovery in the equipment rental revenues generated from the Company's petrochemical customers. Equipment Sales: Revenues from equipment sales increased $5.7 million, or 24.7%, to $28.8 million for the nine months ended September 30, 2000, as compared to $23.1 million for the same period in the prior year. The increase was mainly due to fleet sales from the acquisitions completed in late 1999 and early 2000. Total Revenues: Based on the foregoing, total revenues increased $92.3 million, or 45.1%, to $296.8 million for the nine months ended September 30, 2000, as compared to $204.5 million for the same period in the prior year. Gross Profit: Gross profit from equipment rentals increased $37.7 million, or 58.4%, to $102.3 million for the nine months ended September 30, 2000, as compared to $64.6 million for the same period in the prior year. As a percent of equipment rental revenues, gross profit from equipment rentals increased from 35.6% for the nine months ended September 30, 1999, to 38.2% for the nine months ended September 30, 2000. The increase is due to higher equipment utilization rates, selective price increases and various cost improvement activities, including accelerated integration of the acquisitions completed in 1999 and early 2000, as well as consolidation of certain operating locations in 2000. Additionally, the recovery of the petrochemical industry has further had a positive impact on the gross margin percentage. Gross profit from equipment sales increased $.1 million, or 2.4%, to $4.2 million for the nine months ended September 30, 2000, as compared to $4.1 million for the same period in the prior year. As a percent of equipment sales revenues, gross profit from equipment sales declined to 14.6% for the nine months ended September 30, 2000, as compared to 17.7% for the same period in the prior year. The decrease is largely due to the mix of equipment sales. Based on the foregoing, total gross profit increased $37.8 million, or 54.9%, to $106.6 million for the nine months ended September 30, 2000, as compared to $68.8 million for the same period in the prior year. Selling, General and Administrative Expenses: Selling, general and administrative expenses increased $18.9 million, or 49.0%, to $57.5 million for the nine months ended September 30, 2000, as compared to $38.6 million for the same period in the prior year. The increase is primarily the result of an increase in employee related costs, depreciation expense on non-rental equipment and amortization resulting from the acquisitions completed in 1999 and early 2000, as well as internal growth. As a percent of total revenues, selling, general and administrative expenses increased to 19.4% for the nine months ended September 30, 2000, as compared to 18.9% for the same period in the prior year. Earnings Before Interest, Taxes, Depreciation and Amortization: EBITDA (as defined to exclude net gains on sales of used equipment) increased $36.4 million, or 64.2%, to $93.1 million for the nine months 18 ended September 30, 2000, as compared to $56.7 million for the same period in the prior year. EBITDA from equipment rentals (as further defined to exclude gains on the sale of new equipment) increased $34.5 million, or 62.2% to $89.9 million for the nine months ended September 30, 2000, as compared to $55.4 million for the same period in the prior year. As a percent of rental revenues, EBITDA from rental operations increased to 33.5% for the nine months ended September 30, 2000, as compared to 30.5% for the same period in the prior year. The improvement in EBITDA margin from rental operations is due to the factors discussed above. Interest Expense: Interest expense increased $20.8 million, or 60.3%, to $55.3 million for the nine months ended September 30, 2000, as compared to $34.5 million for the same period in the prior year. This increase reflects the higher level of borrowings outstanding attributable to the acquisitions completed in 1999 and early 2000 and the Company's continued investment in rental equipment, as well as an increase in interest rates. Net Loss: Net loss increased $2.3 million, or 54.8%, to a net loss of $6.5 million for the nine months ended September 30, 2000, as compared to $4.2 million for the same period in the prior year as a result of the factors discussed above. Liquidity and Capital Resources Net cash provided by operating activities increased by $23.2 million to $28.3 million for the nine months ended September 30, 2000, compared to $5.1 million for the same period in the prior year. This improvement primarily resulted from an increase in non-cash depreciation and amortization expense as well as a decrease in working capital. During the nine months ended September 30, 2000 and 1999, the Company's principal uses of cash for investing activities were for acquisitions and capital expenditures, including expenditures for rental equipment. Total gross capital expenditures for these periods were $59.3 million and $109.6 million, respectively. Included in these totals were expenditures for rental equipment totaling $51.4 million and $102.4 million, respectively. These expenditures were made to increase the Company's total investment in the rental fleet and to replace sold used rental equipment. Additionally, cash expenditures for acquisitions totaled $20.7 million in 2000 and $196.2 million in 1999. Net cash provided by financing activities during the nine months ended September 30, 2000 was $36.4 million, a decrease of $256.1 million compared to $292.5 million for the nine months ended September 30, 1999. The decrease in net cash provided by financing activities was due to a decrease in net borrowings to fund acquisitions and capital expenditures. The Company has no long-term minimum purchase commitments for rental equipment. Management has budgeted $35 million for net fleet capital expenditures for 2000, exclusive of acquisitions, to be used to replace rental equipment sold as well as increase its total investment in the fleet. In addition to the budgeted capital expenditures, the Company is currently considering several potential acquisitions. In the nine months ended September 30, 2000 and 1999, the Company incurred approximately $2.4 million related to a sale/leaseback transaction entered into in December 1996. This transaction will require annual payments of approximately $3.1 million through January 2004. In connection with the Company's recapitalization, the Company and Holdings incurred significant amounts of debt with interest and principal payments on the Discount Debentures, the Senior Notes and under the Senior Credit Facilities representing significant obligations of the Company and Holdings. Holdings' operations are conducted through its subsidiaries and Holdings is, therefore, dependent upon the cash flow of its subsidiaries, including the Company, to meet its debt service obligations. The Company's liquidity needs relate to working capital, debt service, capital expenditures and potential acquisitions. 19 The Company intends to fund its working capital, capital expenditures, acquisitions and debt service requirements through cash flows generated from operations and borrowings under the Senior Credit Facilities. The Senior Credit Facilities consist of a $425.0 million, non-amortizing Revolving Credit Facility of which a net amount of $266.0 million was drawn at September 30, 2000, a $50.0 million non-amortizing Term Loan and a $250.0 million First Priority Term Loan. Amounts under the Revolving Credit Facility will be available on a revolving basis during the period commencing on July 22, 1998 (the date of the closing) and ending on the sixth anniversary of the closing. The Senior Credit Facilities, the Senior Notes and the Discount Debentures contain certain covenants that limit, among other things, the ability of the Company and Holdings to: (i) make distributions, redeem partnership interests or make certain other restricted payments or investments other than distributions to pay taxes; (ii) incur additional indebtedness or issue preferred equity interests; (iii) merge, consolidate or sell all or substantially all of its assets; (iv) create liens on assets; and (v) enter into certain transactions with affiliates or related persons. In addition, the Senior Credit Facilities require the Company to maintain specific financial ratios and tests, among other obligations, including a minimum interest coverage ratio. At September 30, 2000, the Company was in full compliance with the financial covenants and expects to remain in compliance for the foreseeable future, including with respect to the minimum interest coverage ratio. Forward Looking Statements This report may contain forward-looking statements that are based on current expectations, estimates and projections about the industries in which the Company operates, management's beliefs and assumptions made by management. Words such as "expects", "anticipates", "intends", "plans", "believes", "estimates" and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements constitute "forward- looking statements" within the meaning of Section 27A of the Securities Act of 1933, and are subject to the safe harbor created thereby. These statements are based on a number of assumptions that could ultimately prove inaccurate and, therefore, there can be no assurance that such statements will prove to be accurate. Factors which could affect actual future results include the developments relating to the state and local sales and use tax audit and other claims related to investigations or lawsuits. Such factors also include the possibility that increased demand or prices for the Company's services may not occur or continue, changing economic and competitive conditions, technological risks and other risks, changing governmental regulations (including environmental rules and regulations) and other risks and uncertainties, including those detailed in the Company's filings with the Securities and Exchange Commission. The Company does not undertake to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. 20 PART II ITEM 1. Legal Proceedings The Company is a party to a number of lawsuits and claims arising out of the usual course of business. ITEM 6. Exhibits and Reports on Form 8-K A. INDEX TO EXHIBITS B. REPORTS ON FORM 8-K None 21 SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized, in the Borough of West Mifflin, State of Pennsylvania, on November 7, 2000. Anthony Crane Rental, L.P. /s/ Jeffrey J. Fenton By: ---------------------------------- Jeffrey J. Fenton Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following person in the capacity indicated on November 7, 2000. /s/ William F. Fabrizio By: ---------------------------------- William F. Fabrizio Chief Financial Officer 22

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