================================================================================

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

                                   FORM 10-K

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

                     For the fiscal year ended July 31, 2009

                                       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 001-14237

                          FINANCIAL FEDERAL CORPORATION
             (Exact name of Registrant as specified in its charter)

        Nevada                                           88-0244792
(State of incorporation)                    (I.R.S. Employer Identification No.)

                   733 Third Avenue, New York, New York 10017
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (212) 599-8000

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

       Title of each class                  Name of exchange on which registered
-------------------------------------       ------------------------------------
   Common Stock, $0.50 Par Value                  New York Stock Exchange

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.                        Yes [X] No [ ]

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.               Yes [ ] No [X]

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

Indicate by check mark whether each registrant has submitted electronically and
posted on its corporate Web site every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding
12 months (or for such shorter period that the registrant was required to submit
and post such files).                                             Yes [ ] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (229.405 of this Chapter) is not contained in this Form 10-K,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III or any
amendment to this Form 10-K.                                                 [X]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company as
defined in Rule 12b-2 of the Exchange Act. (Check one)

        Large accelerated filer  [X]       Accelerated filer [ ]

        Non-accelerated filer    [ ]       Smaller reporting company  [ ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act).                                           Yes [ ] No [X]

The aggregate market value of common stock held by non-affiliates of the
registrant was $513,744,398 based on the January 31, 2009 closing price of the
registrant's common stock on the New York Stock Exchange. For purposes of
calculating this amount, executive officers and directors of the registrant were
deemed to be affiliates.

The number of shares outstanding of the registrant's common stock at September
15, 2009 was 25,904,128.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's definitive Proxy Statement for the 2009 Annual
Meeting of Stockholders, to be held December 8, 2009, are incorporated by
reference into Part III of this Annual Report on Form 10-K.

================================================================================

<PAGE>


                 FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES

                           Annual Report on Form 10-K
                        for the year ended July 31, 2009

                                TABLE OF CONTENTS

Part I                                                                  Page No.
--------------------------------------------------------------------    --------

Item 1.  Business                                                        1-3

Item 1A. Risk Factors                                                    3-5

Item 1B. Unresolved Staff Comments                                       5

Item 2.  Properties                                                      5

Item 3.  Legal Proceedings                                               6

Item 4.  Submission of Matters to a Vote of Security Holders             6


Part II
--------------------------------------------------------------------

Item 5.  Market for Registrant's Common Equity, Related Stockholder
         Matters and Issuer Purchases of Equity Securities               6-7

Item 6.  Selected Financial Data                                         8

Item 7.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                       8-20

Item 7A. Quantitative and Qualitative Disclosures about Market Risk      20

Item 8.  Financial Statements and Supplementary Data                     21-39

Item 9.  Changes in and Disagreements with Accountants on Accounting
         and Financial Disclosure                                        40

Item 9A. Controls and Procedures                                         40-41

Item 9B. Other Information                                               42


Part III
--------------------------------------------------------------------

Item 10. Directors, Executive Officers and Corporate Governance          42

Item 11. Executive Compensation                                          42

Item 12. Security Ownership of Certain Beneficial Owners and
         Management and Related Stockholder Matters                      42-43

Item 13. Certain Relationships and Related Transactions, and
         Director Independence                                           43

Item 14. Principal Accounting Fees and Services                          43


Part IV
--------------------------------------------------------------------

Item 15. Exhibits and Financial Statement Schedules                      43-44

Signatures                                                               45

<PAGE>

PART I

ITEM 1. BUSINESS

     Financial Federal Corporation incorporated in Nevada in 1989. We are an
independent financial services company with $1.5 billion of assets at July 31,
2009. We provide collateralized lending, financing and leasing services
nationwide to small and medium sized businesses with annual revenues typically
below $25 million in the general construction, road and infrastructure
construction and repair, road transportation and refuse industries. We finance
new and used revenue-producing, essential-use equipment from major manufacturers
that is movable, has an economic life longer than the term financed, is not
subject to rapid technological obsolescence, can be used in more than one type
of business and has broad resale markets. We finance bulldozers, buses, cement
mixers, compactors, concrete pumps, crawler cranes, earthmovers, excavators,
hydraulic truck cranes, loaders, motor graders, pavers, personnel and material
lifts, recycling equipment, resurfacers, rough terrain cranes, sanitation
trucks, scrapers, trucks, truck tractors and trailers. Virtually all of our
finance receivables are secured by a first lien on the equipment financed. We do
not have reportable operating segments.

AVAILABLE INFORMATION

     Our website is http://www.financialfederal.com. The following filings are
available in the Investor Relations section of our website under SEC Filings
after they are filed with or furnished to the Securities and Exchange
Commission: Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K, Definitive Proxy Statements and any amendments. Our
Corporate Governance Guidelines, Code of Business Conduct and Ethics, and the
charters for our Audit Committee, Executive Compensation and Stock Option
Committee, and Corporate Governance and Nominating Committee are available in
the Investor Relations section of our website under Corporate Governance. These
filings and charters are also available free to any stockholder on request to
Financial Federal Corporation, 733 Third Avenue, New York, NY 10017, Attn:
Corporate Secretary. Please address requests for these filings and charters to
730 Third Avenue, New York, New York after October 2009. We will satisfy the
disclosure requirements of Item 5.05 of Form 8-K by posting any amendments or
waivers to our Code of Business Conduct and Ethics on our website.

MARKETING

     Our marketing activities are relationship and service oriented. We focus on
providing prompt, responsive and customized service. Our marketing and
managerial personnel average about twenty years of financing experience in the
industries they serve. They are full-time employees compensated by salary, not
commissions or bonuses, and most are granted equity awards. We believe their
experience, knowledge of equipment values, resale markets and local economic and
industry conditions, and their relationships with current and prospective
customers enable us to compete by providing prompt, responsive and customized
service. Our customer service includes making prompt credit decisions, arranging
financing terms to meet customers' needs (and our underwriting criteria),
providing customers with direct contact to our executives with decision-making
authority, and giving prompt, knowledgeable responses to customers' inquiries
and business issues.

     We have marketing personnel in over twenty locations nationwide, including
eight full-service operations centers in Texas, North Carolina, New Jersey,
Illinois and California. We originate finance receivables through relationships
with equipment dealers and, to a lesser extent, manufacturers (collectively
referred to as "vendors") and by marketing our services direct to equipment
users to acquire equipment or refinance debt. Vendors refer their customers to
us for direct financing and we purchase installment sale contracts, leases and
personal property security agreements from vendors who extended credit to their
customers. We also provide capital loans and we lease equipment typically under
noncancelable full-payout leases. We may also purchase portfolios of finance
receivables from vendors and other lenders.

     We have relationships with over 100 midsized vendors. We are not obligated
to purchase receivables from vendors and vendors are not obligated to sell
receivables to us. Our vendor relationships are nonexclusive and we are not
dependent on any vendor. We analyze and approve all transactions obtained
through vendors.

ORIGINATING, STRUCTURING AND UNDERWRITING FINANCE RECEIVABLES

     We originate finance receivables generally between $50,000 and $1.5 million
primarily with fixed interest rates and terms of two to five years. Finance
receivables require monthly payments and include prepayment premium provisions.
The average transaction size is approximately $250,000. Finance receivables
include installment sales, secured loans and leases.

                                       1
<PAGE>

     Our underwriting policies and procedures are designed to maximize yields
and minimize delinquencies and net charge-offs. We do not use computer credit
scoring. We rely on the hands-on experience of our credit officers and
management to assess creditworthiness and to evaluate collateral. At least two
credit officers approve every transaction.

     Structuring transactions involves determining the repayment schedule, rate
and other fees and charges, evaluating the equipment being financed and
determining the need for (i) liens on additional equipment collateral, accounts
receivable, inventory or real property (ii) guarantees from the customer's
principals or affiliates (iii) security deposits (iv) delayed funding or (v)
full or partial vendor recourse.

     We may require vendors and equipment users to submit a credit application.
The application includes financial and other information of the applicant and
any guarantors, and a description of the equipment. Our credit personnel analyze
the application, investigate the applicant's and potential guarantor's credit,
evaluate the collateral, investigate financial, trade and industry references
and review the applicant's payment history. We may also obtain reports from
credit reporting agencies and conduct lien, UCC, litigation, judgment,
bankruptcy and tax searches. If we approve the application and the terms of the
transaction are agreed to, we purchase an installment sale contract or lease
from the vendor or enter into a finance or lease transaction with the equipment
user. We fund the transaction upon receiving all necessary documents. Our
customers are responsible for maintaining and insuring the equipment financed or
leased and for any sales, use or property taxes.

     The procedures we use to purchase portfolios of finance receivables include
reviewing and analyzing the terms of the receivables, the credit and payment
history of the obligors, the documents, the value of the collateral and the
yield.

COLLECTION AND SERVICING

     We instruct our customers to mail payments to bank lockboxes. Customers may
also choose to pay electronically by automated direct payment, wire transfer or
telephone. We monitor past due accounts closely and we are diligent in
collecting past due payments. Our collection activities are performed by
experienced personnel and managers in each operations center and may involve
senior management or the legal department. Senior management reviews all past
due accounts at least monthly. Decisions regarding collateral repossession and
subsequent sale involve management and the legal department.

COMPETITION

     Our business is competitive. We compete with national and regional banks,
manufacturer-owned and other finance and leasing companies, and other financial
institutions. Some of our competitors may be better positioned to market their
services and financing programs because of their ability to offer more favorable
rates and terms and other services. Many of our competitors provide financing at
rates lower than we may be willing to provide because they are much larger, have
greater financial and other resources and may have lower funding costs. Many of
our competitors have also received substantial financial assistance from the
U.S. government because of the crisis in credit markets. We compete by
emphasizing a high-level of equipment and financial expertise, customer service,
flexibility in structuring transactions, management involvement in customer
relationships and by attracting and retaining experienced managerial and
marketing personnel.

EMPLOYEES

     We had 206 full-time employees at July 31, 2009. All employees and officers
are salaried. We offer group health, life and disability insurance benefits, a
qualified 401(k) plan and Section 125 cafeteria plans. We do not match
employees' 401(k) contributions. None of our employees have collective
bargaining arrangements. We consider our relations with employees to be
satisfactory.

REGULATION

     Our commercial financing, lending and leasing activities are not subject to
the same degree of regulation as consumer finance or banking activities. We are
subject to Federal and State requirements and regulations covering motor vehicle
transactions, licensing, documentation and lien perfection. States also limit
the rates and fees we can charge. Our failure to comply with these regulations
and requirements can result in loss of principal, interest, or finance charges,
the imposition of penalties and restrictions on future business activities.

EXECUTIVE OFFICERS

     PAUL R. SINSHEIMER, 62, has served as Chairman of the Board and Chief
Executive Officer of the Company since December 2000, as President of the
Company since September 1998, as an Executive Vice President of the Company from
its inception in 1989 to September 1998 and as a director of the Company since
its inception. From 1970 to 1989, Mr. Sinsheimer worked for Commercial Alliance
Corporation in several positions including Executive Vice President.

                                       2
<PAGE>

     JOHN V. GOLIO, 48, has served as an Executive Vice President of the Company
since October 2001, as a Senior Vice President of the Company from 1997 to
October 2001, as an Operations Center Manager since joining the Company in
January 1996 to October 2001 and as a Vice President of the Company's major
operating subsidiary from January 1996 to 1997. Before joining the Company, Mr.
Golio worked for Commercial Alliance Corporation and its successors in several
positions including branch operations manager.

     JAMES H. MAYES, JR., 40, has served as an Executive Vice President of the
Company since March 2004 and held several positions including Vice President of
the Company's major operating subsidiary and an Operations Center Manager since
joining the Company in 1992 to March 2004.

     WILLIAM M. GALLAGHER, 60, has served as a Senior Vice President of the
Company since 1990, as Chief Credit Officer since 2002, as an Operations Center
Manager from the Company's inception in 1989 to 1999 and as a Vice President of
the Company from its inception to 1990. From 1973 to 1989, Mr. Gallagher worked
for Commercial Alliance Corporation in several positions including Vice
President and branch manager.

     TROY H. GEISSER, 48, has served as a Senior Vice President and Secretary of
the Company since February 1996, as General Counsel from 1996 to 2000 and held
several positions including Vice President of the Company's major operating
subsidiary and Operations Center Manager since joining the Company in 1990 to
1996. From 1986 to 1990, Mr. Geisser worked for Commercial Alliance Corporation
and its successors in several positions including Northern Division Counsel.

     STEVEN F. GROTH, CFA, 57, has served as a Senior Vice President and Chief
Financial Officer of the Company since joining the Company in September 2000.
Mr. Groth was Senior Banker and Managing Director of Specialty Finance and
Transportation with Fleet Bank from 1997 to 2000 and, from 1985 to 1996, he held
several positions, including Division Head, with Fleet Bank and its predecessor,
NatWest Bank.

     ANGELO G. GARUBO, 49, has served as a Vice President and General Counsel of
the Company since joining the Company in April 2000. From 1990 to 2000, Mr.
Garubo was a partner in the law firm Danzig, Garubo & Kaye where he represented
the Company in various legal matters.

     DAVID H. HAMM, CPA, 44, has served as a Vice President of the Company since
October 2001, as Treasurer since March 2004 and as Controller since joining the
Company in July 1996. From 1985 to 1996, Mr. Hamm was employed in the public
accounting profession, including eight years as an audit manager.


ITEM 1A. RISK FACTORS

     The risks we discuss below are events, conditions and uncertainties we
believe could have a meaningful adverse impact on our growth, asset quality,
liquidity and net interest spread. Growth, asset quality, liquidity and net
interest spread are integral to our business, financial position and
profitability.

     Growth is important for several reasons. Increasing our size could help
reduce our funding costs, retain and attract qualified personnel, finance larger
customers and compete more effectively. If we are unable to grow, our funding
costs could increase, we could lose personnel and it could be harder for us to
compete.

     We consider asset quality the most important aspect of our business. Asset
quality statistics, delinquencies, non-performing assets and net charge-offs,
(i) measure how effectively we collect our receivables (ii) reflect the
effectiveness of our underwriting standards, skills, policies and procedures and
(iii) can indicate the direction of future net charge-offs and non-performing
assets. When asset quality weakens, revenue is reduced, provisions for credit
losses increase and operating expenses increase because we would classify more
receivables as impaired (stop recognizing income), we would incur more
write-downs and we would incur more costs to collect and manage the additional
non-performing accounts. Significantly weaker asset quality could also limit our
ability to obtain or retain needed capital and could cause our credit ratings to
be lowered. We use various strategies to manage credit risk. We discuss asset
quality and how we manage credit risk in detail in the Finance Receivables and
Asset Quality section in Item 7 "Management's Discussion and Analysis of
Financial Condition and Results of Operations" ("MD&A").

     Liquidity (money currently available for us to borrow) and access to
capital (debt and equity) are vital to our operations and growth. We cannot
maintain or grow our finance receivables and we may not be able to repay debt if
our access to capital is limited. We discuss this in detail in the Liquidity and
Capital Resources section of the MD&A.

                                       3
<PAGE>

     Our net interest spread (net yield of finance receivables less cost of
debt) is the key component of our profitability. Decreases in net interest
spread lower net income. Net interest spread is affected by changes in market
interest rates and credit spreads. We discuss this in detail in the Market
Interest Rate Risk and Sensitivity section of the MD&A.

RISKS

A slowdown in the economy could reverse our growth and cause the quality of our
finance receivables to deteriorate

     A recession or less severe economic slowdown would reduce demand for the
equipment we finance. This would limit our ability to obtain new business and
lower or reverse our finance receivables growth. An economic slowdown would also
weaken asset quality because more of our customers would not be able to pay us
timely if at all and the value of the equipment securing our finance receivables
would decline, possibly significantly. This would increase delinquencies,
non-performing assets and net charge-offs.
Therefore, slowing economic conditions would weaken our financial position and
profitability, and depending on the severity of the impact, could make it
difficult for us to maintain our credit ratings and to obtain needed capital.
Most finance companies face this risk, but its effects can be more pronounced on
us because we only have one source of revenue and one line of business,
commercial equipment financing.

Our inability to collect our finance receivables would cause our asset quality
to deteriorate

     It is critical for finance companies to collect all amounts owed from their
customers. Asset quality weakens when customers fail to make their payments or
pay late, or when the value of the equipment securing receivables declines.
Therefore, finance companies must underwrite transactions properly and must be
diligent in collecting past due accounts. Underwriting includes assessing the
customer's creditworthiness, obtaining and assessing the value of collateral and
ensuring transactions are documented properly. Equipment values can decline
because of excess supply, reduced demand, limited availability of parts and
regulatory changes (e.g. higher vehicle emissions standards). We may need to
raise dilutive, expensive capital if our inability to collect receivables causes
significant write-downs.

Our inability to obtain needed capital or maintain adequate liquidity would
reverse our receivables growth

     Our ability to obtain new debt or equity or to renew or refinance credit
facilities (see the Liquidity and Capital Resources section of our MD&A for
information about maturity and expiration dates) could be limited by (i)
conditions in and the availability of funds in capital markets as discussed
further in the Significant Events section of our MD&A (ii) a significant
deterioration in our asset quality (iii) a significant deterioration in our
profitability (iv) reductions of our credit ratings (v) the poor performance of
other finance companies and (vi) economic conditions. Capital markets have been
reluctant to provide capital to finance companies facing these conditions. We
may need to sell receivables, possibly at a loss, to finance our operations if
we are unable to obtain or renew needed financing.

Rising short-term market interest rates would reduce our net interest spread

     Rising short-term market interest rates reduce our net interest spread
because our floating rate debt (includes short-term debt) exceeds our floating
rate finance receivables significantly (by $448.0 million at July 31, 2009 as
adjusted for the $168.6 million August 2009 repayment of fixed rate term notes).
Our net interest spread would also decrease when the differences between long
and short-term rates narrow (resulting in a "flattening yield curve") or when
short-term rates exceed long-term rates (an "inverted yield curve"). Rising
short-term interest rates could also cause an economic slowdown, and an inverted
yield curve has been a precursor to economic downturns. Most finance companies
face this risk, but its effect is more pronounced on us because of the
significant difference between our floating rate debt and floating rate
receivables. Short-term market interest rates are at or near their lowest levels
ever. Therefore, the current risks of rising short-term interest rates are much
greater than usual.

We face increased competition because of our small size

     Most of our competitors are significantly larger than we are. Larger
competitors have many competitive advantages. We compete with large national and
regional banks, manufacturer-owned finance companies (commonly called
"captives") and other finance and leasing companies. Larger competitors have
greater resources, lower-cost funding sources and offer more products and
services. This enables them to offer interest rates lower than ours and to
finance larger customers. Larger competitors could also lower the rates they
offer to levels that we may be unwilling or unable to match because the rates
would not be sufficient to cover the level of risk and because our funding costs
may be higher. This has been occurring in fiscal 2009 and has contributed to the
decrease in finance receivables outstanding, and could reduce our net interest
spread if we see the need to lower the rates we charge.

                                       4
<PAGE>

We may not be able to retain employees key to our operations

     We have 206 employees and we are highly dependent on a small number of key
operating personnel including our CEO. The loss of key operating personnel (i)
could impair our ability to maintain or grow our finance receivables and to
maintain asset quality because they are familiar with our operating methods and
are integral in our customer relationships, and (ii) could impair our ability to
raise capital.

     There is competition for qualified people in the finance industry and our
larger competitors may offer higher salaries and better benefits. We do not have
employment contracts with key employees. Instead, we periodically award shares
of restricted stock to them with extended vesting periods. It would be difficult
for us to replace our key employees.

Our growth and asset quality are highly dependent on conditions in the
construction and road transportation industries

     Over 80% of our finance receivables are with customers in the construction
and road transportation industries. Therefore, a slowdown in or other events or
conditions affecting these industries adversely would have similar, or worse,
negative effects on us as a general economic
slowdown. Many of our construction customers' business depend on State funding.
Therefore, limited availability of State funds for construction projects would
have a negative effect on their business and cash flows. This limited focus of
our business could also limit our ability to grow, could make it difficult for
us to expand our business to other industries and could cause us to be affected
by slowing economic conditions more severely.

Lending to small, privately owned companies exposes us to increased credit risk

     Most of our customers are small to medium sized, privately owned businesses
with significantly less resources than larger companies. Therefore, the effects
of poor local economic conditions, general economic conditions, rising gasoline
and interest costs, loss of key personnel or increased competition on their
operations and ability to pay us could be more pronounced because of their size.

Significantly higher prices and limited availability of gasoline could impact
our customers severely and weaken our asset quality

     Most of the equipment we finance uses gasoline. It is a significant
operating expense for our customers and its cost and availability are critical
to their operations. Higher than normal increases in its price or a disruption
in its supply could hurt our customers' operations and
their ability to pay us, and could cause an economic slowdown.

Our allowance for credit losses may be insufficient to cover future net
charge-offs

     Our allowance for credit losses may be inadequate if our asset quality
unexpectedly weakens significantly. This would cause us to record larger
provisions for credit losses. We discuss this in detail in the Critical
Accounting Policies section of our MD&A.

Our failure to comply with State and Federal lending and leasing regulations
could result in write-offs and litigation

     Our business activities, including amounts we can charge customers,
equipment repossession, lien perfection and documentation, are subject to State
and Federal regulations. Our failure to comply with these regulations or changes
to these regulations could prevent us
from collecting the amounts owed from customers, and could result in lawsuits,
penalties and fines against us and restrictions on our ability to do business.


ITEM 1B. UNRESOLVED STAFF COMMENTS

     None


ITEM 2. PROPERTIES

     All of our property is leased office space. Our executive office is located
at 733 Third Avenue, New York, New York. We also have eight full-service
operations centers (where credit analysis and approval, collection and marketing
functions are performed) in Houston, Texas (two); Lisle (Chicago), Illinois;
Teaneck (New York metropolitan area), New Jersey; Charlotte, North Carolina
(three) and Irvine (Los Angeles), California. The office leases terminate on
various dates through fiscal 2020. We believe our offices are suitable and
adequate for their present and proposed uses, and suitable and adequate offices
should be available on reasonable terms as needed. We are moving our executive
offices to 730 Third Avenue, New York, New York in October 2009.

                                       5
<PAGE>

ITEM 3. LEGAL PROCEEDINGS

     We are not involved in any legal proceedings we believe could have a
material impact on our financial condition or results of operations.


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

     None


PART II


ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
        ISSUER PURCHASES OF EQUITY SECURITIES

     Our common stock trades on the New York Stock Exchange under the symbol
"FIF." The quarterly high and low closing sales prices of our common stock
reported by the New York Stock Exchange and quarterly cash dividends follow:

     ==========================================================================
                                                     Price Range           Cash
                                                 ---------------      Dividends
                                                   High      Low      per Share
     ==========================================================================
     Fiscal 2009
     -------------------------------------
     First Quarter ended October 31, 2008        $26.35   $19.17          $0.15
     Second Quarter ended January 31, 2009       $24.07   $15.01          $0.15
     Third Quarter ended April 30, 2009          $24.61   $17.50          $0.15
     Fourth Quarter ended July 31, 2009          $25.24   $18.89          $0.15

     Fiscal 2008
     -------------------------------------
     First Quarter ended October 31, 2007        $31.60   $26.26          $0.15
     Second Quarter ended January 31, 2008       $25.90   $19.92          $0.15
     Third Quarter ended April 30, 2008          $24.37   $19.18          $0.15
     Fourth Quarter ended July 31, 2008          $25.78   $20.43          $0.15
     ==========================================================================

     We initiated a quarterly cash dividend in December 2004 and raised it by
50% in December 2005 and by 50% again in December 2006. Future cash dividends
will depend on our net income, leverage, liquidity, financial condition, capital
requirements, cash flow, long-range plans, credit market conditions, income tax
laws and other factors the Board of Directors considers relevant.

     We established our $50.0 million common stock and convertible debt
repurchase program in June 2007. We increased the amount authorized by $23.2
million in September 2008 and by an additional $35.3 million in January 2009. We
purchased 0.9 million shares of common stock for $24.0 million and $42.3 million
of convertible debentures for $40.6 million since the inception of the program
through July 31, 2009. The program does not have an expiration date and $43.9
million remained authorized for future repurchases at July 31, 2009.

     The amount of equity we can distribute (dividend payments and common stock
repurchases) is limited indirectly by our major operating subsidiary's debt
agreements as discussed in the Liquidity section in the MD&A.

     There were 68 holders of record of our common stock on September 15, 2009.
This amount includes nominees who hold our common stock for investors in "street
name." We did not sell unregistered shares of our common stock and we did not
repurchase shares of our common stock during the fourth quarter of fiscal 2009.

                                       6
<PAGE>

                             STOCK PERFORMANCE GRAPH

     The following graph compares the percentage change in cumulative total
stockholder return on our common stock during the five-years ended July 31, 2009
with the cumulative total return on the Russell 2000 Index and on the S&P
Financials Index. The comparison assumes $100 was invested on July 31, 2004 in
each index and all dividends were reinvested. Historical returns are not
indicative of future returns.

 [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]

                                   7/04    7/05    7/06    7/07    7/08    7/09
                                  -----   -----   -----   -----   -----   -----
Financial Federal Corporation     100.0   120.7   128.0   137.7   114.8   103.9
Russell 2000                      100.0   124.8   130.1   145.8   136.1    98.4
S&P Financials                    100.0   109.7   124.4   128.4    86.0    53.7

Copyright (C) 2009, Standard & Poor's, a division of The McGraw-Hill Companies,
Inc. All rights reserved.

                                       7
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

     The financial data presented below (dollars in thousands, except per share
amounts) should be read with the information in Item 7, "Management's Discussion
and Analysis of Financial Condition and Results of Operations", and our
Consolidated Financial Statements and accompanying notes in Item 8, "Financial
Statements and Supplementary Data."

<TABLE>
<CAPTION>
===============================================================================================
Years Ended July 31,                   2009         2008         2007         2006         2005
===============================================================================================
<S>                              <C>          <C>          <C>          <C>          <C>
Finance receivables - net        $1,511,391   $1,916,023   $2,104,361   $1,967,588   $1,641,854
Total assets                      1,548,114    1,942,868    2,120,074    1,988,344    1,661,845
Debt                              1,052,000    1,467,000    1,660,600    1,527,661    1,259,700
Stockholders' equity                452,046      414,872      387,753      390,379      342,114
Finance income                      157,488      188,402      191,254      162,475      126,643
Interest expense                     51,407       75,473       84,828       67,402       43,748
Net interest margin                 106,081      112,929      106,426       95,073       82,895
Provision for credit losses           7,900        4,000           --           --        1,500
Salaries and other expenses          29,537       27,323       24,945       23,676       21,477
Net income                           43,148       50,084       50,050       43,619       36,652
Earnings per common share,
   diluted                             1.72         2.01         1.90         1.65         1.41
Earnings per common share,
   basic                               1.75         2.05         1.94         1.68         1.44
Cash dividends per common share        0.60         0.60         0.55         0.37         0.20

Leverage                               2.33         3.54         4.28         3.91         3.68

Available liquidity              $  579,000   $  357,000   $  240,300   $  201,400   $   88,000
Non-performing assets                87,043       46,724       21,159       14,559       25,330
Delinquent receivables               37,998       22,901        9,868        8,619       10,171
Net charge-offs                       7,662        3,223          108          125        1,356

Loss ratio                             0.43%        0.16%        0.01%        0.01%        0.09%
Net interest margin                    5.95         5.48         5.15         5.20         5.37
Net interest spread                    4.86         4.39         3.89         4.04         4.41
Expense ratio                          1.66         1.33         1.21         1.30         1.39
Efficiency ratio                      27.80        24.20        23.40        24.90        25.90
Return on equity                      10.00        12.50        12.90        11.90        11.30
===============================================================================================
</TABLE>


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

OVERVIEW

     Financial Federal Corporation ("FFC") is an independent financial services
holding company operating in the United States primarily through one subsidiary.
We do not have any unconsolidated subsidiaries, partnerships or joint ventures.
We also do not have any off-balance sheet assets or liabilities (other than
commitments to extend credit), goodwill, other intangible assets or pension
obligations, and we are not involved in income tax shelters. We have two fully
consolidated special purpose entities for our on-balance-sheet asset
securitization facilities.

     We have one line of business. We lend money under installment sale
agreements, secured loans and leases (collectively referred to as "finance
receivables") to small and medium sized businesses for their equipment financing
needs. Finance receivable transactions generally range between $50,000 and $1.5
million, have terms between two and five years and require monthly payments. The
average transaction size is approximately $250,000. We earn revenue solely from
interest and other fees and amounts earned on our finance receivables. We need
to borrow most of the money we lend. Therefore, liquidity (money currently
available for us to borrow) is very important. We borrow from banks and
insurance companies and we issue commercial paper to other investors.
Approximately 70% of our finance receivables were funded with debt at July 31,
2009.

     Our main areas of focus are (i) asset quality (ii) liquidity (iii) net
interest spread (the difference between the rates we earn on our receivables and
the rates we incur on our debt) and (iv) interest rate risk. Changes in the
asset quality of our finance receivables can affect our profitability
significantly. Classifying receivables as impaired, incurring write-downs and
incurring costs associated with non-performing assets can have an adverse affect
on our finance income, provisions for credit

                                       8
<PAGE>

losses and operating expenses. Changes in market interest rates can also affect
our profitability significantly because the interest rates on our finance
receivables were 92% fixed and 8% floating, and the interest rates on our debt
were 62% fixed and 38% floating at July 31, 2009. We use various strategies to
manage our credit risk and interest rate risk. These four areas are integral to
our long-term profitability and we discuss them in detail in separate sections
of this discussion.

     Our key operating statistics are net charge-offs, loss ratio,
non-performing assets, delinquencies, leverage, available liquidity, receivables
growth, return on equity, net interest margin and net interest spread, and
expense and efficiency ratios.

Significant events

     We obtained a new $100.0 million asset securitization facility in April
2009. The facility provides for committed revolving financing through April
2010. We also renewed our existing $325.0 million securitization facility for
one year in June 2009. This facility now expires in June 2010. We discuss these
facilities in the Liquidity and Capital Resources section.

     We repaid the entire $175.0 million of 2.0% convertible debentures in
fiscal 2009. We repaid $132.7 million at their principal amount in April 2009
because all holders chose to exercise their first five-year put option as we
expected and we purchased $42.3 million of the debentures in the open market in
the second quarter of fiscal 2009 for $40.6 million. This resulted in a $1.6
million debt retirement gain (net of $0.1 million of unamortized deferred debt
issuance costs).

     In July 2009, we offered to prepay, for their principal amount, (i) the
$25.0 million of seven-year 4.96% term notes maturing in April and June 2010 and
(ii) the $250.0 million of five-year 5.00% term notes maturing in May and August
2010. All holders of the seven-year 4.96% term notes accepted the offer and we
repaid the notes in July 2009, and holders of $168.6 million of the five-year
5.00% term notes accepted the offer and we repaid $168.6 million of the notes in
August 2009. There was no gain or loss on these prepayments. The note holders
accepted our offer to prepay these notes at principal even though they were
entitled to a prepayment premium.

     We decided to prepay these term notes because (i) their rates were
significantly higher than the rates on borrowings available under our unused
bank credit and asset securitization facilities (ii) they had short maturities
of nine and twelve months and (iii) we had over $580.0 million of available
liquidity. Based on this liquidity level, our outlook for the economy and the
level of receivables originations expected for fiscal 2010, and the relatively
small amount of credit facilities expiring in fiscal 2010, we determined we did
not need this debt. We financed the prepayment with borrowings under our
committed bank credit facilities. The interest rates on these bank borrowings
were 425 bps (4.25%) lower than the rates on the term notes.

     It is still difficult and expensive for finance companies to obtain or
renew financing because of the crisis in credit markets that began approximately
two years ago, although conditions appear to be improving. Most banks and other
lenders, including all of our funding sources, are lending selectively and are
charging much higher credit spreads. Credit spread is the percentage amount
lenders charge above a base market interest rate. Our cost of debt will increase
considerably as we obtain or renew financing if credit spreads persist at these
levels. The credit spread on our new and renewed asset securitization facilities
are higher than the credit spread we were previously charged.

     The U.S. government has taken unprecedented, drastic steps to support
credit markets and improve the flow of capital. The Federal Reserve has lowered
its target Federal Funds Rate ten times since September 2007 to between 0.00%
and 0.25%; the lowest level in history. This includes three decreases totaling
175 basis points in fiscal 2009. The government has also injected over $1.0
trillion into the financial system through several programs to prevent it from
failing and to encourage lending.

     Our available liquidity has increased by $339.0 million to $579.0 million
at July 31, 2009 from $240.0 million at July 31, 2007 (the approximate start of
the credit markets crisis). The increase resulted from significantly lower
receivable originations, our ability to obtain and renew financing and strong
operating cash flows. Our liquidity was $410.4 million after the August 2009
repayment of term notes. Based on the amount of our available liquidity, the
maturity and expiration dates of our debt and credit facilities, and receivable
originations and collections continuing at recent levels, we do not anticipate a
need for any new financing until the third quarter of fiscal 2011. We discuss
our liquidity and debt in the Liquidity and Capital Resources section.

     In addition, our cost of debt has decreased during the crisis because (i)
short-term market interest rates decreased significantly (ii) the relatively
small amount and timing of expiring credit facilities and maturing debt have
limited the impact of higher credit spreads and (iii) we have $455.0 million of
low-cost committed bank credit facilities without any restrictions on borrowing
the full amount. Our cost of debt was 4.12% in the fourth quarter of fiscal 2009
compared to 5.35% in the fourth quarter of fiscal 2007 (the quarter before the
crisis started). The repayment of $193.6 million of term notes in July and

                                       9
<PAGE>

August 2009 will lower our cost of debt in fiscal 2010, but we otherwise expect
our cost of debt to increase because short-term market interest rates are at
historic lows and we have been and will be charged higher credit spreads as we
renew or obtain  financing. We discuss our cost of debt in the Market Interest
Rate Risk and Sensitivity section.

     Maintaining conservative leverage and ample liquidity, having multi-year
committed bank credit facilities and term debt with staggered maturities, and
our approach to managing credit risk on our finance receivables (as discussed in
the Finance Receivables and Asset Quality section) have been integral to our
success during this difficult period.


CRITICAL ACCOUNTING POLICIES AND ESTIMATES

     Applying accounting principles generally accepted in the United States
requires judgment, assumptions and estimates to record the amounts in the
Consolidated Financial Statements and accompanying notes. We describe the
significant accounting policies and methods we use to prepare the Consolidated
Financial Statements in Note 1. Accounting policies involving significant
judgment, assumptions and estimates are considered critical accounting policies
and are discussed below.

Allowance for Credit Losses

     The allowance for credit losses on finance receivables is our estimate of
losses inherent in our finance receivables at the balance sheet date. The
allowance is difficult to determine and requires significant judgment. The
allowance is based on total receivables, net charge-off experience, impaired and
delinquent receivables and our current assessment of the risks inherent in our
receivables from national and regional economic conditions, industry conditions,
concentrations, the financial condition of customers and guarantors, collateral
values and other factors. We may need to change the allowance level
significantly if unexpected changes in these conditions or factors occur.
Increases in the allowance would reduce net income through higher provisions for
credit losses. We would need to record a $1.5 million provision for each 0.10%
required increase in the allowance. The allowance was $25.0 million (1.63% of
finance receivables) at July 31, 2009 including $1.1 million specifically
allocated to impaired receivables.

     The allowance includes amounts specifically allocated to impaired
receivables and an amount to provide for losses inherent in finance receivables
not impaired (the "general allowance"). We evaluate the fair values of impaired
receivables and compare them to the carrying amounts. The carrying amount is the
amount receivables are recorded at when we evaluate them and may include prior
write-downs or a specific allowance. If our fair value estimate is lower than
the carrying amount, we record a write-down or establish a specific allowance
depending on (i) how we determined fair value (ii) how certain we are of our
fair value estimate and (iii) the level and type of factors and items other than
the primary collateral supporting our fair value estimate, such as guarantees
and secondary collateral. We do not have a fixed formula or a pre-determined
period of past due status to record write-downs or specific reserves and we do
not write-off our entire net investment because our receivables are secured by
collateral that retains value, and we do not lend to consumers.

     To estimate the general allowance, we analyze historical write-down
activity to develop percentage loss ranges by risk profile. Risk profiles are
assigned to receivables based on past due status and the customers' industry. We
do not use a loan grading system. We then adjust the calculated range of losses
for expected recoveries and differences between current and historical loss
trends and other factors to arrive at the estimated allowance. We record a
provision for credit losses if the recorded allowance differs from our current
estimate. The adjusted calculated range of losses may differ from actual losses
significantly because we use significant estimates.

Non-Performing Assets

     We record impaired finance receivables and repossessed equipment (assets
received to satisfy receivables) at the lower of their current estimated fair
value or their carrying amount. We estimate fair value of these non-performing
assets by evaluating the market value and condition of the collateral or assets
and the expected cash flows of impaired receivables. We evaluate market value
based on recent sales of similar equipment, used equipment publications, our
market knowledge and information from equipment vendors. Unexpected adverse
changes in or incorrect estimates of expected cash flows, market value or the
condition of collateral or assets, or time needed to sell equipment would
require us to record a write-down. This would lower net income. Non-performing
assets were $87.0 million (5.7% of finance receivables) at July 31, 2009.

Residual Values

     We record residual values on direct financing leases at the lowest of (i)
any stated purchase option (ii) the present value at the end of the initial
lease term of rentals due under any renewal options or (iii) our projection of
the equipment's fair value at the end of the lease. We may not realize the full
amount of recorded residual values because of unexpected adverse changes in or
incorrect projections of future equipment values. This would lower net income.
Residual values were $31.5 million (2.0% of finance receivables) at July 31,
2009. Historically, we have realized recorded residual values on disposition.

                                       10
<PAGE>

Income Taxes

     We record a liability for uncertain income tax positions by (i) identifying
the uncertain tax positions we take on our income tax returns (ii) determining
if these positions would more likely than not be allowed by a taxing authority
and (iii) estimating the amount of tax benefit to record if these tax positions
pass the more-likely-than-not test. Therefore, we record a liability for tax
benefits from positions failing the test and from positions we do not expect to
realize all of the tax benefits. Identifying uncertain tax positions,
determining if they pass the test and determining the liability to record
requires significant judgment because tax laws are complicated and subject to
interpretation, and because we have to assess the likely outcome of hypothetical
challenges to these positions by taxing authorities. Actual outcomes of
challenges to these uncertain tax positions differing from our assessments
significantly and taxing authorities examining positions we did not consider
uncertain could require us to record additional income tax expense including
interest and penalties. This would lower net income. The gross liability
recorded for uncertain tax positions was $1.3 million at July 31, 2009 and we do
not expect this amount to change significantly in fiscal 2010.

Stock-Based Compensation

     We record compensation expense only for stock-based awards expected to
vest. Therefore, we must estimate expected forfeitures of stock awards. This
requires significant judgment and an analysis of historical data. We would need
to record more compensation expense for stock awards if expected forfeitures
exceed actual forfeitures. Our average expected annual rate of forfeitures on
all stock awards was 2.3% at July 31, 2009 resulting in 0.2 million stock awards
expected to be forfeited.


RESULTS OF OPERATIONS

COMPARISON OF FISCAL 2009 TO FISCAL 2008

     ==========================================================================
                                     Years Ended July 31,
     ($ in millions, except          --------------------
     per share amounts)                    2009      2008   $ Change   % Change
     ==========================================================================
     Finance income                      $157.5    $188.4    $ (30.9)      (16)%
     Interest expense                      51.4      75.5      (24.1)      (32)
     Net finance income before
       provision for credit losses        106.1     112.9       (6.8)       (6)
     Provision for credit losses            7.9       4.0        3.9        98
     Gain on debt retirement                1.6        --        1.6       100
     Salaries and other expenses           29.6      27.3        2.3         8
     Provision for income taxes            27.1      31.5       (4.4)      (14)
     Net income                            43.1      50.1       (7.0)      (14)

     Diluted earnings per share            1.72      2.01      (0.29)      (14)
     Basic earnings per share              1.75      2.05      (0.30)      (15)

     Return-on-equity                      10.0%     12.5%

     Excluding the debt retirement gain:
     -----------------------------------
        Net income                        $42.1     $50.1     $ (8.0)      (16)%

        Diluted earnings per share         1.68      2.01      (0.33)      (16)
        Basic earnings per share           1.71      2.05      (0.34)      (17)

        Return-on-equity                    9.7%     12.5%
     ==========================================================================

     Net income decreased by 14% to $43.1 million in fiscal 2009 from $50.1
million in fiscal 2008. Without the $1.0 million after-tax debt retirement gain,
net income decreased by 16%. Net income without the after-tax debt retirement
gain decreased because the effects of the 14% decrease in average receivables
and higher non-performing assets exceeded the effects of lower short-term market
interest rates.

     Finance income decreased by 16% to $157.5 million in fiscal 2009 from
$188.4 million in fiscal 2008 because (i) average finance receivables decreased
14% ($280.0 million) to $1.78 billion from $2.06 billion (ii) the yield on
finance receivables decreased to 8.84% from 9.14% mostly due to the prime rate
averaging 270 basis points (2.70%) lower and, to a lesser extent, (iii) higher
impaired receivables.

                                       11
<PAGE>

     Interest expense (incurred on debt used to fund finance receivables)
decreased by 32% to $51.4 million in fiscal 2009 from $75.5 million in fiscal
2008 because our average debt decreased 19% ($300.0 million) and our cost of
debt decreased to 3.98% from 4.75%. Lower short-term market interest rates
caused the decrease in our cost of debt because the interest rates on over 40%
of our debt were indexed to short-term market interest rates. We discuss this
in the Market Interest Rate Risk and Sensitivity section.

     Net finance income before provision for credit losses on finance
receivables decreased by 6% to $106.1 million in fiscal 2009 from $112.9 million
in fiscal 2008. Net interest margin (net finance income before provision for
credit losses expressed as a percentage of average finance receivables)
increased to 5.95% from 5.48% because of lower short-term market interest rates.

     The provision for credit losses on finance receivables was $7.9 million in
fiscal 2009 and $4.0 million in fiscal 2008. Net charge-offs (write-downs of
finance receivables less recoveries) increased to $7.7 million in fiscal 2009
from $3.2 million in fiscal 2008, and the loss ratio (net charge-offs expressed
as a percentage of average finance receivables) increased to 0.43% from 0.16%.
Net charge-offs have been increasing because of higher non-performing assets,
the recession and declining collateral values. We discuss the allowance and net
charge-offs further in the Finance Receivables and Asset Quality section.

     Salaries and other expenses increased by 8% to $29.6 million in fiscal 2009
from $27.3 million in fiscal 2008 because of higher non-performing asset costs
and, to a lesser extent, because we deferred a lower percentage of salary costs
as a result of the decrease in receivables originated. The expense ratio
(salaries and other expenses expressed as a percentage of average finance
receivables) worsened to 1.66% from 1.33% because expenses increased and
receivables decreased. The efficiency ratio (expense ratio expressed as a
percentage of net interest margin) worsened to 27.8% from 24.2% because expenses
increased and net finance income before provision for credit losses decreased.

     The provision for income taxes decreased to $27.1 million in fiscal 2009
from $31.5 million in fiscal 2008 because of the decrease in net income. Our
effective tax rate was 38.6% in fiscal 2009 and 2008.

     Diluted earnings per share decreased by 14% to $1.72 in fiscal 2009 from
$2.01 in fiscal 2008 and basic earnings per share decreased by 15% to $1.75 from
$2.05 because of the decrease in net income. The $1.0 million after-tax debt
retirement gain increased diluted and basic earnings per share by $0.04 in
fiscal 2009. Without this gain, diluted earnings per share decreased by 16%
and basic earnings per share decreased by 17%.

     The amounts of net income, diluted and basic earnings per share and
return-on-equity excluding the $1.0 million after-tax debt retirement gain are
non-GAAP financial measures. We believe presenting these financial measures is
useful to investors because they provide consistency and comparability with our
operating results for the prior period and a better understanding of the changes
and trends in our operating results.


COMPARISON OF FISCAL 2008 TO FISCAL 2007

     ==========================================================================
                                     Years Ended July 31,
     ($ in millions, except          --------------------
     per share amounts)                    2008      2007   $ Change   % Change
     ==========================================================================
     Finance income                      $188.4    $191.2      $(2.8)       (1)%
     Interest expense                      75.5      84.8       (9.3)      (11)
     Net finance income before
       provision for credit losses        112.9     106.4        6.5         6
     Provision for credit losses            4.0        --        4.0       100
     Salaries and other expenses           27.3      24.9        2.4        10
     Provision for income taxes            31.5      31.4        0.1        --
     Net income                            50.1      50.1         --        --

     Diluted earnings per share            2.01      1.90       0.11         6
     Basic earnings per share              2.05      1.94       0.11         6

     Return-on-equity                      12.5%     12.9%
     ==========================================================================

     Net income was $50.1 million in fiscal 2008 and 2007 because the net
positive effects of lower short-term market interest rates and the negative
effects of higher non-performing assets offset.

                                       12
<PAGE>

     Finance income decreased by 1% to $188.4 million in fiscal 2008 from $191.2
million in fiscal 2007 because the net yield on finance receivables declined
slightly to 9.14% in fiscal 2008 from 9.25% in fiscal 2007. The 325 basis point
(3.25%) decrease in the prime rate and higher non-accrual receivables caused the
decline. Decreases in the prime rate lower the net yield because 9% of our
receivables are indexed to the prime rate. The change in average receivables was
not significant.

     Interest expense decreased by 11% to $75.5 million in fiscal 2008 from
$84.8 million in fiscal 2007 because our cost of debt declined to 4.75% in
fiscal 2008 from 5.36% in fiscal 2007. Lower short-term market interest rates
caused the decline because 50% of our debt was indexed to short-term market
interest rates in fiscal 2008. The change in average debt was not significant.

     Net finance income before provision for credit losses on finance
receivables increased by 6% to $112.9 million in fiscal 2008 from $106.4 million
in fiscal 2007. Net interest margin increased to 5.48% in fiscal 2008 from 5.15%
in fiscal 2007 because of lower short-term market interest rates.

     We recorded a $4.0 million provision for credit losses on finance
receivables in fiscal 2008. We did not record a provision in fiscal 2007. The
provision for credit losses is the amount needed to change the allowance for
credit losses to our estimate of losses inherent in finance receivables. Net
charge-offs increased to $3.2 million in fiscal 2008 from $108,000 in fiscal
2007, and the loss ratio increased to 0.16% in fiscal 2008 from less than 0.01%
in fiscal 2007. Net charge-offs have been increasing because of higher
non-performing assets.

     Salaries and other expenses increased by 10% to $27.3 million in fiscal
2008 from $24.9 million in fiscal 2007. The increase resulted from higher
non-performing asset costs and, to a lesser extent, salary increases. The
expense ratio worsened to 1.33% in fiscal 2008 from 1.21% in fiscal 2007 because
of the increase in expenses. The efficiency ratio worsened to 24.2% in fiscal
2008 from 23.4% in fiscal 2007 because the percentage increase in expenses
exceeded the percentage increase in net finance income before provision for
credit losses.

     The provision for income taxes was $31.5 million in fiscal 2008 and $31.4
million in fiscal 2007. The change was not significant because income before
income taxes increased by $0.1 million and our effective tax rate was 38.6% in
fiscal 2008 and 2007.

     Diluted earnings per share increased by 6% to $2.01 per share in fiscal
2008 from $1.90 per share in fiscal 2007, and basic earnings per share increased
by 6% to $2.05 per share in fiscal 2008 from $1.94 per share in fiscal 2007. The
percentage increases in diluted and basic earnings per share were higher than
the percentage increase in net income because we repurchased 2.7 million shares
of our common stock in the last six fiscal quarters.


FINANCE RECEIVABLES AND ASSET QUALITY

     We discuss trends and characteristics of our finance receivables and our
approach to managing credit risk in this section. The key aspect is asset
quality. Asset quality statistics measure our underwriting standards, skills and
policies and procedures and can indicate the direction of future net charge-offs
and non-performing assets.

     ========================================================================
                                     July 31,   July 31,
     ($ in millions)                   2009 *     2008 *   $ Change  % Change
     ========================================================================
     Finance receivables             $1,536.4   $1,940.8    $(404.4)      (21)%
     Allowance for credit losses         25.0       24.8        0.2         1
     Non-performing assets               87.0       46.7       40.3        86
     Delinquent finance receivables      38.0       22.9       15.1        66
     Net charge-offs                      7.7        3.2        4.5       138

     As a percentage of receivables:
     -------------------------------
     Allowance for credit losses         1.63%      1.28%
     Non-performing assets               5.67       2.41
     Delinquent finance receivables      2.47       1.18
     Net charge-offs  (loss ratio)       0.43       0.16
     ========================================================================
     * as of and for the year ended

     Finance receivables comprise installment sale agreements and secured loans
(collectively referred to as loans) and direct financing leases. Loans were 91%
($1.41 billion) of finance receivables and leases were 9% ($131 million) at July
31, 2009. Finance receivables decreased $404.4 million or 21% in fiscal 2009
because of lower originations.

                                       13
<PAGE>

     We originated $487.7 million of finance receivables in fiscal 2009 compared
to $923.8 million in fiscal 2008. Originations decreased because the recession
has reduced equipment financing demand significantly and because we are
approving transactions selectively to preserve asset quality. We collected
$861.9 million of finance receivables and repossessions in fiscal 2009 compared
to $1.08 billion in 2008. Collections decreased because of lower receivables,
fewer prepayments and the increase in delinquent receivables.

     Our primary focus is the credit quality of our receivables. We manage our
credit risk by adhering to disciplined and sound underwriting policies and
procedures, by monitoring our receivables closely, by handling non-performing
accounts effectively and by managing the size of our receivables portfolio. Our
underwriting policies and procedures require a first lien on equipment financed.
We focus on financing equipment with a remaining useful life longer than the
term financed, historically low levels of technological obsolescence, use in
more than one type of business, ease of access and transporting, and broad,
established resale markets. Securing our receivables with equipment possessing
these characteristics can mitigate potential net charge-offs. We may also obtain
additional equipment or other collateral, third-party guarantees, advance
payments or hold back a portion of the amount financed. We do not finance or
lease aircraft or railcars, computer related equipment, telecommunications
equipment or equipment located outside the United States, and we do not lend to
consumers.

     Our underwriting policies also limit our credit exposure with any customer.
The limit was $40.0 million at July 31, 2009. Our ten largest customers
accounted for 8.0% ($125.0 million) of total finance receivables at July 31,
2009 compared to 6.4% ($125.0 million) at July 31, 2008.

     Our allowance for credit losses was $25.0 million at July 31, 2009 compared
to $24.8 million at July 31, 2008, and the allowance level increased to 1.63% of
finance receivables from 1.28%. The allowance is our estimate of losses inherent
in our finance receivables. We determine the allowance quarterly based on our
analysis of historical losses and the past due status of receivables adjusted
for expected recoveries and any differences between current and historical loss
trends and other factors. Our estimates of inherent losses increased during
fiscal 2009 because of higher net charge-offs, delinquencies and non-performing
assets.

     Net charge-offs of finance receivables (write-downs less recoveries) were
$7.7 million in fiscal 2009 compared to $3.2 million in fiscal 2008 and the loss
ratios were 0.43% and 0.16%. Net charge-offs have been increasing because the
recession is having an adverse impact on our customers' cash flows and
collateral values.

     The net investments in impaired finance receivables, repossessed equipment
(assets received to satisfy receivables), total non-performing assets and
delinquent finance receivables (transactions with more than a nominal portion of
a contractual payment 60 or more days past due) follow ($ in millions):

      =========================================================================
      July 31,                                                2009         2008
      =========================================================================
      Impaired receivables *                                $ 64.5       $ 33.5
      Repossessed equipment                                   22.5         13.2
      -------------------------------------------------------------------------
         Total non-performing assets                        $ 87.0       $ 46.7
      =========================================================================
      Delinquent receivables                                $ 38.0       $ 22.9
      =========================================================================
      Impaired receivables not delinquent                       60%          52%
      =========================================================================
      * before specifically allocated allowance of $1.1 million at July 31, 2009
        and $0.9 million at July 31, 2008

     We expect the trend of increases in net charge-offs, impaired and
delinquent receivables and repossessed equipment to continue because of the
recession's worsening impact on our customers. This could require us to record
higher provisions for credit losses.

     Our finance receivables contain industry and geographic concentrations of
credit risk. These concentrations result from customers having similar economic
characteristics that could cause their ability to repay us to be affected by
changes in economic or other conditions similarly. Our industry concentrations
were construction related-44%, road transportation-36% and refuse-13%, and our
U.S. regional geographic concentrations were Southwest-30%, Southeast-25%,
Northeast-19%, Central-13% and West-13% at July 31, 2009.

                                       14
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     We describe our need for raising capital (debt and equity), our need to
maintain a substantial amount of liquidity (money currently available for us to
borrow), how we manage liquidity and our funding sources in this section. Key
indicators are leverage (the number of times debt exceeds equity), available
liquidity, credit ratings and debt maturities. Our leverage is low for a finance
company, we have ample liquidity available, we have been successful in issuing
debt and our debt is diversified with maturities staggered over five years. We
are not dependent on any of our funding sources or providers.

     Liquidity and access to capital are vital to our operations and growth. We
need continued availability of funds to originate or acquire finance receivables
and to repay debt. To ensure we have enough liquidity, we project our financing
needs based on estimated receivables growth and maturing debt, we monitor
capital markets closely, we diversify our funding sources and we stagger our
debt maturities.

     Funding sources usually available to us include operating cash flow,
private and public issuances of term debt, committed unsecured revolving bank
credit facilities, conduit and term securitizations of finance receivables,
secured term financings, dealer placed and direct issued commercial paper and
sales of common and preferred equity. The external funding sources may not be
available to us currently or may only be available at unfavorable terms because
of credit markets conditions. However, we have $410.4 million available to
borrow under our committed revolving bank and asset securitization facilities
(after subtracting commercial paper outstanding) at July 31, 2009 (as adjusted
for the $168.6 million August 2009 repayment of term notes). Therefore, we do
not have a current need for additional financing.

     Changes in our liquidity for fiscal 2009 and 2008 are summarized below:

     ==========================================================================
     July 31,                                                 2009         2008
     ==========================================================================
     Liquidity - beginning of year                         $ 357.0      $ 240.3
       Decrease in receivables (excludes non-cash items)     374.2        158.9
       New financing                                         100.0        100.0
       Operating cash flow                                    54.0         72.8
       Debt repaid and expired credit facilities            (291.3)      (179.3)
       Dividends paid and common stock repurchased           (16.3)       (33.8)
       Other                                                   1.4         (1.9)
     --------------------------------------------------------------------------
     Liquidity - end of year                                 579.0        357.0
       Debt prepaid in August 2009                          (168.6)          --
     --------------------------------------------------------------------------
     Liquidity, as adjusted                                $ 410.4      $ 357.0
     ==========================================================================
     Increase in liquidity, as adjusted                    $  53.4      $ 116.7
     ==========================================================================

     Our term notes are rated 'BBB+' by Fitch Ratings, Inc. ("Fitch", a
Nationally Recognized Statistical Ratings Organization) and our commercial paper
is rated 'F2' by Fitch. Fitch affirmed these investment grade ratings in March
2009 and maintained its stable outlook. As a condition of our 'F2' credit
rating, commercial paper outstanding is limited to the unused amount of our
committed bank and securitization credit facilities. Our ability to obtain or
renew financing and our credit spreads can be dependent on these investment
grade credit ratings.

     We obtained all of our debt and credit facilities through our major
operating subsidiary except for the convertible debentures (issued by FFC). The
subsidiary's debt agreements have restrictive covenants limiting its
indebtedness, encumbrances, investments, sales of assets, mergers and other
business combinations, capital expenditures, interest coverage, net worth and
dividends and other distributions to FFC. The subsidiary has always complied
with all debt covenants and restrictions. None of the agreements or facilities
has a material adverse change clause and all of our debt is senior.

     Our leverage (debt-to-equity ratio) has decreased to 2.3 at July 31, 2009
from 3.5 at July 31, 2008 and from 4.3 at July 31, 2007 because we have remained
profitable while contracting during the credit markets crisis and recession. As
a result, debt decreased by 28% ($415.0 million) to $1.05 billion from $1.47
billion during fiscal 2009 and stockholders' equity increased by 9% ($37.0
million) to $452.0 million from $415.0 million. Our low leverage level allows
for substantial asset growth and equity distributions and repurchases.

                                       15
<PAGE>

     Debt comprised the following ($ in millions):

     ==========================================================================
                                          July 31, 2009           July 31, 2008
                                     ------------------      ------------------
                                       Amount   Percent        Amount   Percent
     ==========================================================================
     Term notes                      $  650.0        62%     $  675.0        46%
     Bank borrowings                    197.0        19         369.0        25
     Commercial paper                   104.0        10          79.0         5
     Asset securitization
        borrowings - term               101.0         9         169.0        12
     Convertible debentures                --        --         175.0        12
     --------------------------------------------------------------------------
          Total debt                 $1,052.0       100%     $1,467.0       100%
     ==========================================================================

Term Notes

     We issued the term notes between fiscal 2005 and 2008. They are five and
seven year fixed rate notes with principal due at maturity between May 2010 and
April 2014. We prepaid $168.6 million of the term notes in August 2009. Interest
is payable semiannually. Maturity information for the notes is in the
Contractual Obligations section below.

Bank Credit Facilities

     We have $455.0 million of committed unsecured revolving credit facilities
from ten banks with original terms between two and five years, and $258.0
million was unused and available for us to borrow at July 31, 2009. The
facilities range from $15.0 million to $110.0 million. Borrowings under the
facilities can mature between 1 and 270 days. We borrow amounts for one day, one
week or one month depending on interest rates, and roll the borrowings over when
they mature depending on our financing needs and whether we issue or repay other
debt. Borrowings outstanding at July 31, 2009 matured in August 2009, were
reborrowed and remain outstanding. The facilities expire as follows
(in millions):

     ==========================================================================
     Fiscal:                    2010          2011           2012          2013
     ==========================================================================
                               $95.0         $85.0         $260.0         $15.0
     ==========================================================================

     These committed facilities are a low-cost source of funds and support our
commercial paper program. We can borrow the full amount under each facility
immediately. None of the facilities are for commercial paper back-up only and
the facilities do not have usage fees. These facilities might be renewed,
extended or increased before they expire. Bank credit facility activity is
summarized below ($ in millions):

     ===========================================================================
     Years Ended July 31,                            2009                   2008
     ===========================================================================
                                                     # of                   # of
                                          Amount    Banks        Amount    Banks
     ===========================================================================
     Total - beginning of year           $ 480.0       10       $ 580.0       11
        Expired not renewed                (25.0)       1         (25.0)       1
        Converted into term notes             --       --         (75.0)       2
     -------------------------------------------                -------
     Total - end of year                 $ 455.0       10       $ 480.0       10
     ===========================================================================
     Renewed at expiration               $  30.0        1       $  25.0        1
     ===========================================================================
     Term extended before expiration     $  15.0        1       $  15.0        1
     ===========================================================================

Asset Securitization Borrowings

     We have $425.0 million of asset securitization facilities that provide for
committed revolving financing during their term and we can convert borrowings
into amortizing term debt if the facilities are not renewed. The amortizing term
debt would be repaid monthly from collections of securitized receivables and
would be repaid substantially within two years. The full amount of the
facilities was unused and available for us to borrow at July 31, 2009.
Borrowings under these facilities and the amortizing term debt are without
recourse.

     We converted $200.0 million of revolving asset securitization borrowings
into amortizing term debt in fiscal 2008 and are repaying the remaining $101.0
million monthly from collections of securitized receivables. The monthly
repayment amounts vary based on the amount of securitized receivables collected
and the amount borrowed under our $325.0 million facility, and would increase if
we borrow under this facility or convert it into amortizing term debt upon
nonrenewal. The term debt would be repaid substantially in two years based on
the amount of securitized receivables at July 31, 2009 and not borrowing under
this facility.

                                       16
<PAGE>

     Finance receivables included $167.0 million of securitized receivables at
July 31, 2009 and $410.0 million at July 31, 2008. The amount of receivables we
can securitize is limited to 50% of our major operating subsidiary's receivables
because of restrictions in its other debt agreements. This limit was $760.0
million at July 31, 2009. Borrowings under these facilities and the amortizing
term debt are limited to 90% of securitized receivables classified as eligible.
Securitized receivables classified as impaired or with terms outside of defined
limits are not eligible.

     These facilities would terminate if net charge-offs of securitized
receivables or if delinquent receivables exceed certain levels. This would
convert borrowings outstanding into amortizing term debt required to be repaid
monthly from collections of securitized receivables.

Commercial Paper

     We issue commercial paper direct and through a $500.0 million dealer
program with maturities between 1 and 270 days. The amount of commercial paper
we could issue is limited to the lower of $500.0 million and the unused amount
of our committed credit facilities ($683.0 million at July 31, 2009).

     There is still reduced demand for and higher credit spreads on our
commercial paper because of credit market conditions. As a result, our
commercial paper was $104.0 million at July 31, 2009 compared to $289.7 million
at July 31, 2007.

     Information on the combined amounts of bank borrowings and commercial paper
follows (in millions):

     ===========================================================================
     Years Ended July 31,                             2009       2008       2007
     ===========================================================================
     Maximum outstanding during the year           $ 446.0    $ 630.0    $ 393.7
     Average outstanding during the year             366.0      469.0      329.6
     Outstanding at end of year                      301.0      448.0      339.7
     ===========================================================================

Contractual Obligations

     Our long-term contractual obligations and other information at July 31,
2009 are summarized below ($ in millions):

<TABLE>
<CAPTION>
     ================================================================================================
                                                                         Payments Due by Fiscal Years
                                                                                     2015 -
                                2010       2011       2012       2013       2014       2020     Total
     ------------------------------------------------------------------------------------------------
<S>                          <C>       <C>        <C>        <C>        <C>        <C>        <C>
     Term notes              $ 225.0   $  185.0   $   75.0   $  115.0   $   50.0   $     --   $ 650.0
     Asset securitization
       borrowings - term        58.0       43.0         --         --         --         --     101.0
     Operating leases            1.4        1.6        1.1        0.6        0.5        2.1       7.3
     ------------------------------------------------------------------------------------------------
          Total payments     $ 284.4   $  229.6   $   76.1   $  115.6   $   50.5   $    2.1   $ 758.3
     ================================================================================================
     Percentage                   38%        30%        10%        15%         7%        --%      100%
     ================================================================================================
     Other debt              $ 301.0   $     --   $     --   $     --   $     --   $     --   $ 301.0
     ================================================================================================
     Cumulative payments     $ 585.4   $  815.0   $  891.1   $1,006.7   $1,057.2   $1,059.3
     ================================================================================================
     Cumulative scheduled
       collections of
       finance receivables   $ 621.4   $1,065.7   $1,352.3   $1,476.8   $1,519.5   $1,536.4
     ================================================================================================
</TABLE>

     The average maturity of our term notes (excluding the $168.6 million of
term notes prepaid in August 2009) was 2.5 years at July 31, 2009 and 2008. The
term notes and term asset securitization borrowings are discussed in Note 3 to
the Consolidated Financial Statements and operating leases in Note 10. Other
debt is bank borrowings and commercial paper that we can refinance under our
long-term committed bank and asset securitization credit facilities expiring on
various dates through fiscal 2013. As shown in the table, cumulative scheduled
collections of finance receivables exceed cumulative payments under contractual
obligations each year.

                                       17
<PAGE>

Stockholders' Equity

     We increased the amount authorized under our common stock and convertible
debt repurchase program by $58.5 million in fiscal 2009. We also purchased $42.3
million of our convertible debentures under the program for $40.6 million and
37,000 shares of our common stock for $0.8 million, leaving $43.9 million
authorized for future repurchases at July 31, 2009. We established the program
in fiscal 2007 and it does not have an expiration date. Repurchases are
discretionary and contingent upon many conditions.

     The amount of equity we can distribute to stockholders is limited,
indirectly, because the amount of funds we can obtain from our major operating
subsidiary is restricted by its debt agreements. As a result, the amount of
stockholders' equity we could distribute at July 31, 2009 was limited to $144.0
million.

     We paid $15.5 million and $15.4 million of cash dividends and we received
$1.3 million and $6.4 million from stock option exercises in fiscal 2009 and
2008, respectively.


MARKET INTEREST RATE RISK AND SENSITIVITY

     We discuss how changes in market interest rates and credit spreads affect
our net interest spread and how we manage interest rate risk in this section.
Net interest spread (net yield of finance receivables less cost of debt) is an
integral part of a finance company's profitability and is calculated below:

     ==========================================================================
     Years Ended July 31,                            2009       2008       2007
     ==========================================================================
     Net yield of finance receivables                8.84%      9.14%      9.25%
     Cost of debt                                    3.98       4.75       5.36
     --------------------------------------------------------------------------
          Net interest spread                        4.86%      4.39%      3.89%
     ==========================================================================

     Our net interest spread was 47 basis points (0.47%) higher in fiscal 2009
compared to fiscal 2008 because decreases in market interest rates lowered our
cost of debt more than they lowered the net yield on our finance receivables as
explained below. Short-term market interest rates have decreased significantly
since July 2007 because the Federal Reserve lowered its target Federal Funds
Rate more than 500 basis points (5.00%) in response to credit market and
economic conditions. Short-term LIBOR rates decreased on average 490 basis
points (4.90%) with overnight LIBOR decreasing more than 500 basis points to
0.23% at July 31, 2009. Interest rates on most of our floating rate debt are
indexed to short-term LIBOR rates. This is the primary reason our cost of debt
decreased in fiscal 2009. Decreases in short-term market interest rates also
lowered the net yield because the rates on our floating rate receivables are
indexed to the prime rate. The prime rate also decreased by 500 basis points
since July 2007. Long-term market interest rates also decreased significantly.
Lower long-term market interest rates normally would decrease the cost of new
fixed-rate term debt and result in lower yields on finance receivable
originations, but these effects have been offset largely by significantly higher
credit spreads.

     Our net interest spread is sensitive to changes in short and long-term
market interest rates (includes LIBOR, rates on U.S. Treasury securities,
money-market rates, swap rates and the prime rate). Increases in short-term
rates reduce our net interest spread and decreases in short-term rates increase
it because our floating rate debt (includes short-term debt) exceeds our
floating rate finance receivables by a significant amount. Interest rates on our
debt change faster than the yield on our receivables because 38% of our debt is
floating rate compared to floating rate receivables of only 8%.

     Credit spreads also affect our net interest spread. Changes in credit
spreads affect the yield on our receivables when originated and the cost of our
debt when issued. Credit spreads have increased significantly since the crisis
in credit markets began. Our cost of debt will increase considerably as we
obtain or renew financing if credit spreads remain high.

     Our net interest spread is also affected when the differences between
short-term and long-term rates change. Long-term rates normally exceed
short-term rates. When this excess narrows (resulting in a "flattening yield
curve") or when short-term rates exceed long-term rates (an "inverted yield
curve"), our net interest spread should decrease and when the yield curve widens
our net interest spread should increase because the rates we charge our
customers are largely determined by long-term market interest rates and rates on
our floating rate debt are largely determined by short-term market interest
rates. We can mitigate the effects of a flat or inverted yield curve by issuing
long-term fixed rate debt.

                                       18
<PAGE>

     Our income is subject to the risk of rising short-term market interest
rates and changes in the yield curve because floating rate debt exceeded
floating rate receivables by $279.8 million at July 31, 2009 as shown in the
table below and by $448.4 million as adjusted for the $168.6 million August 2009
repayment of fixed rate term notes. The terms and prepayment experience of fixed
rate receivables mitigate this risk. We collect receivables monthly over short
periods of two to five years. Fixed rate receivables have an average remaining
life excluding prepayments of approximately eighteen months at July 31, 2009 and
scheduled collections of $570.0 million (40%) in fiscal 2010. Historically,
annual collections have exceeded 50% of average receivables because of
prepayment activity. We do not match the maturities of our debt to our
receivables.

     We monitor our exposure to potential adverse changes in market interest
rates by comparing the fixed and floating rate percentages of our receivables
and debt and by determining the potential impact adverse changes in market
interest rates could have on our net income. We may hedge our exposure to this
interest rate risk by entering into derivatives on existing debt or debt we
expect to issue, and we may change the proportion of our fixed and floating rate
debt. We do not speculate with or trade derivatives. We had no derivatives
outstanding in fiscal 2009.

     We quantify interest rate risk by calculating the effect on net income of a
hypothetical, immediate 100 basis point (1.0%) rise in market interest rates.
This hypothetical change in rates would reduce annual net income by
approximately $1.3 million at July 31, 2009 based on the scheduled repricing of
floating rate debt, fixed rate debt maturing within one year, the expected
effects on the yield of new receivables and including the prepayment of $168.6
million of fixed rate term notes in August 2009. This amount increases to $2.6
million excluding the effects on the yield of new receivables. We believe these
amounts are acceptable considering the cost of floating rate debt is lower than
fixed rate debt. Actual future changes in market interest rates and their effect
on net income may differ from these amounts materially. Other factors that may
accompany an actual immediate 100 basis point rise in market interest rates were
not considered in the calculation. These hypothetical reductions of net income
at July 31, 2008 were $1.5 million with the effects on the yield of new
receivables and $3.0 million without the effects on the yield of new
receivables. The impact of this hypothetical increase in rates was lower at July
31, 2009 because our floating rate debt decreased by 35% to $402.0 million from
$617.0 million at July 31, 2008.

     The fixed and floating rate amounts and percentages of our receivables and
capital at July 31, 2009 follow ($ in millions):

     ===========================================================================
                                    Fixed Rate        Floating Rate
                             -----------------      ---------------
                               Amount  Percent      Amount  Percent        Total
     ===========================================================================
     Finance receivables     $1,414.2       92%     $122.2        8%    $1,536.4
     ===========================================================================
     Debt *                  $  650.0       62%     $402.0       38%    $1,052.0
     Stockholders' equity       452.0      100          --       --        452.0
     ---------------------------------------------------------------------------
        Capital *            $1,102.0       73%     $402.0       27%    $1,504.0
     ===========================================================================
     *  the percentages of fixed and floating rate debt are 46% and 54%,
        respectively, after the August 2009 prepayment of $168.6 million of
        fixed rate term notes, and the percentages of fixed and floating rate
        capital are 62% and 38%, respectively.

     The fixed and floating rate amounts and percentages of our receivables and
capital at July 31, 2008 follow ($ in millions):

     ===========================================================================
                                    Fixed Rate        Floating Rate
                             -----------------      ---------------
                               Amount  Percent      Amount  Percent        Total
     ===========================================================================
     Finance receivables     $1,772.0       91%     $168.8        9%    $1,940.8
     ===========================================================================
     Debt                    $  850.0       58%     $617.0       42%    $1,467.0
     Stockholders' equity       414.9      100          --       --        414.9
     ---------------------------------------------------------------------------
        Capital              $1,264.9       67%     $617.0       33%    $1,881.9
     ===========================================================================

                                       19
<PAGE>

     Floating rate debt comprises bank borrowings, commercial paper and term
asset securitization borrowings, and reprices (interest rates change based on
current short-term market interest rates) after July 31, 2009 as follows: $357.0
million (89%) in one month and $45.0 million (11%) in two to three months.
Floating rate receivables only reprice when the prime rate changes. Repricing
frequencies of floating rate debt follow ($ in millions):

     ===========================================================================
                                  Balance          Repricing Frequency
     ===========================================================================
     Bank borrowings              $ 197.0          1 to 30 days
     Commercial paper               104.0          1 to 90 days (30 day average)
     Asset securitization
       borrowings - term            101.0          1 to 30 days
     ===========================================================================


NEW ACCOUNTING STANDARDS

     Refer to Note 1 (Summary of Significant Accounting Policies) to the
consolidated financial statements.


FORWARD-LOOKING STATEMENTS

     Statements in this report containing the words or phrases "expect,"
"anticipate," "may," "might," "believe," "appears," "intend," "estimate,"
"could," "should," "would," "will," "if," "outlook," "likely," "unlikely" and
other words and phrases expressing our expectations are "forward-looking
statements." Actual results could differ from those contained in the
forward-looking statements materially because they involve various assumptions
and known and unknown risks and uncertainties. Information about risk factors
that could cause actual results to differ materially is discussed in Part I,
Item 1A Risk Factors and other sections of this report. Risk factors include (i)
an economic slowdown (ii) the inability to collect finance receivables and the
sufficiency of the allowance for credit losses (iii) the inability to obtain
capital or maintain liquidity (iv) rising short-term market interest rates,
higher credit spreads, and adverse changes in the yield curve (v) increased
competition (vi) the inability to retain key employees and (vii) adverse
conditions in the construction and road transportation industries.
Forward-looking statements do not guarantee our future performance and apply
only as of the date made. We are not required to update or revise them for
future or unanticipated events or circumstances.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     See Item 7, Market Interest Rate Risk and Sensitivity.

                                       20
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


             Report of Independent Registered Public Accounting Firm
             -------------------------------------------------------


The Board of Directors and Stockholders
Financial Federal Corporation:


We have audited the accompanying consolidated balance sheets of Financial
Federal Corporation and subsidiaries (the "Company" or "Financial Federal") as
of July 31, 2009 and 2008, and the related consolidated statements of income,
changes in stockholders' equity and cash flows for each of the years in the
three-year period ended July 31, 2009. 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.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Financial Federal as
of July 31, 2009 and 2008, and the results of its operations and its cash flows
for each of the years in the three-year period ended July 31, 2009, in
conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), Financial Federal's internal control
over financial reporting as of July 31, 2009, based on criteria established in
Internal Control - Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO), and our report dated September
22, 2009 expressed an unqualified opinion on the effectiveness of the Company's
internal control over financial reporting.



/s/ KPMG LLP

New York, New York
September 22, 2009

                                       21
<PAGE>

                 FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                        (In thousands, except par value)

<TABLE>
<CAPTION>
=========================================================================================
July 31,                                                              2009           2008
=========================================================================================
<S>                                                            <C>            <C>
ASSETS
Finance receivables                                            $ 1,536,398    $ 1,940,792
Allowance for credit losses                                        (25,007)       (24,769)
-----------------------------------------------------------------------------------------
     Finance receivables - net                                   1,511,391      1,916,023
Cash                                                                 8,038          8,232
Other assets                                                        28,685         18,613
-----------------------------------------------------------------------------------------
          TOTAL ASSETS                                         $ 1,548,114    $ 1,942,868
=========================================================================================

LIABILITIES
Debt:
   Long-term ($5,400 at July 31, 2009 and $1,400 at
     July 31, 2008 owed to related parties)                    $   932,000    $ 1,189,000
   Short-term                                                      120,000        278,000
Accrued interest, taxes and other liabilities                       20,768         34,260
Deferred income taxes                                               23,300         26,736
-----------------------------------------------------------------------------------------
     Total liabilities                                           1,096,068      1,527,996
-----------------------------------------------------------------------------------------

STOCKHOLDERS' EQUITY
Preferred stock - $1 par value, authorized 5,000 shares                 --             --
Common stock - $.50 par value, authorized 100,000 shares,
   shares issued and outstanding (net of 1,696 treasury
   shares): 25,889 at July 31, 2009 and 25,673 at
   July 31, 2008                                                    12,945         12,836
Additional paid-in capital                                         148,501        139,490
Retained earnings                                                  292,604        265,026
Accumulated other comprehensive loss                                (2,004)        (2,480)
-----------------------------------------------------------------------------------------
     Total stockholders' equity                                    452,046        414,872
-----------------------------------------------------------------------------------------
          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY           $ 1,548,114    $ 1,942,868
=========================================================================================
</TABLE>

See accompanying notes to consolidated financial statements

                                       22
<PAGE>

                 FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES

                         CONSOLIDATED INCOME STATEMENTS
                    (In thousands, except per share amounts)

<TABLE>
<CAPTION>
=========================================================================================
Years Ended July 31,                                       2009         2008         2007
=========================================================================================
<S>                                                    <C>          <C>          <C>
Finance income                                         $157,488     $188,402     $191,254

Interest expense                                         51,407       75,473       84,828
-----------------------------------------------------------------------------------------

   Net finance income before provision for credit
      losses on finance receivables                     106,081      112,929      106,426

Provision for credit losses on finance receivables        7,900        4,000           --
-----------------------------------------------------------------------------------------

   Net finance income                                    98,181      108,929      106,426

Gain on debt retirement                                   1,588           --           --
Salaries and other expenses                             (29,537)     (27,323)     (24,945)
-----------------------------------------------------------------------------------------

   Income before income taxes                            70,232       81,606       81,481

Provision for income taxes                               27,084       31,522       31,431
-----------------------------------------------------------------------------------------

          NET INCOME                                   $ 43,148     $ 50,084     $ 50,050
=========================================================================================

EARNINGS PER COMMON SHARE:
          Diluted                                      $   1.72     $   2.01     $   1.90
=========================================================================================
          Basic                                        $   1.75     $   2.05     $   1.94
=========================================================================================
</TABLE>

See accompanying notes to consolidated financial statements

                                       23
<PAGE>

                 FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                 (In thousands)

<TABLE>
<CAPTION>
======================================================================================================
                                                                                Accumulated
                                      Common Stock   Additional                       Other
                                 -----------------      Paid-In    Retained   Comprehensive
                                 Shares     Amount      Capital    Earnings   (Loss) Income      Total
======================================================================================================
<S>                              <C>       <C>         <C>         <C>        <C>             <C>
BALANCE - JULY 31, 2006          27,216    $13,608     $123,091    $253,128         $   552   $390,379
Net income                           --         --           --      50,050              --     50,050
Unrealized gain on cash flow
  hedge, after $455 of tax           --         --           --          --             720        720
Reclassification of realized
  gain in net income, after
  $(134) of tax                      --         --           --          --            (212)      (212)
                                                                                              --------
    Comprehensive income                                                                        50,558
                                                                                              --------
Stock repurchased and retired    (2,031)    (1,016)     (10,188)    (43,744)             --    (54,948)
Stock plan activity:
  Shares issued                     584        292        7,869          --              --      8,161
  Shares canceled                    (9)        (4)           4          --              --         --
  Compensation recognized            --         --        6,867          --              --      6,867
  Excess tax benefits                --         --        1,524          --              --      1,524
Common stock cash dividends          --         --           --     (14,788)             --    (14,788)
------------------------------------------------------------------------------------------------------
BALANCE - JULY 31, 2007          25,760     12,880      129,167     244,646           1,060    387,753
Net income                           --         --           --      50,084              --     50,084
Unrealized loss on cash flow
  hedge, after $(2,291) of tax       --         --           --          --          (3,624)    (3,624)
Reclassification of realized
  net loss to net income,
  after $49 of tax                   --         --           --          --              84         84
                                                                                              --------
    Comprehensive income                                                                        46,544
                                                                                              --------
Stock repurchased and retired      (713)      (357)      (3,782)    (14,317)             --    (18,456)
Stock plan activity:
  Shares issued                     626        313        5,634          --              --      5,947
  Compensation recognized            --         --        7,966          --              --      7,966
  Excess tax benefits                --         --          505          --              --        505
Common stock cash dividends          --         --           --     (15,387)             --    (15,387)
------------------------------------------------------------------------------------------------------
BALANCE - JULY 31, 2008          25,673     12,836      139,490     265,026          (2,480)   414,872
Net income                           --         --           --      43,148              --     43,148
Reclassification of realized
  net loss to net income,
  after $300 of tax                  --         --           --          --             476        476
                                                                                              --------
    Comprehensive income                                                                        43,624
                                                                                              --------
Stock repurchased and retired       (37)       (18)        (722)        (36)             --       (776)
Stock plan activity:
  Shares issued                     265        133        1,177          --              --      1,310
  Shares canceled                   (12)        (6)           6          --              --         --
  Compensation recognized            --         --        8,550          --              --      8,550
Common stock cash dividends          --         --           --     (15,534)             --    (15,534)
------------------------------------------------------------------------------------------------------
BALANCE - JULY 31, 2009          25,889    $12,945     $148,501    $292,604         $(2,004)  $452,046
======================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements

                                       24
<PAGE>

                 FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

<TABLE>
<CAPTION>
=============================================================================================
Years Ended July 31,                                           2009         2008         2007
=============================================================================================
<S>                                                       <C>         <C>          <C>
Cash flows from operating activities:
  Net income                                              $  43,148   $   50,084   $   50,050
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Amortization of deferred origination costs and fees      16,601       17,733       15,951
    Provision for credit losses on finance receivables        7,900        4,000           --
    Stock-based compensation                                  5,142        4,839        3,992
    Depreciation and amortization                             1,491          918          437
    Deferred income taxes                                    (3,736)       3,210        5,738
    Gain on debt retirement                                  (1,588)          --           --
    (Increase) decrease in other assets                      (1,502)       1,294        1,976
    Decrease in accrued interest, taxes and other
     liabilities                                            (13,492)      (8,788)        (116)
    Excess tax benefits from stock-based awards                  --         (505)      (1,524)
---------------------------------------------------------------------------------------------
     Net cash provided by operating activities               53,964       72,785       76,504
---------------------------------------------------------------------------------------------
Cash flows from investing activities:
  Finance receivables originated                           (487,685)    (923,809)  (1,208,161)
  Finance receivables collected and repossessed assets
   sales proceeds                                           861,870    1,082,701    1,058,312
---------------------------------------------------------------------------------------------
     Net cash provided by (used in) investing activities    374,185      158,892     (149,849)
---------------------------------------------------------------------------------------------
Cash flows from financing activities:
  Commercial paper, net increase (decrease)                  25,000     (210,700)     170,861
  Repayments of convertible debentures                     (173,343)          --           --
  Bank borrowings, net (decrease) increase                 (172,000)     318,950     (109,672)
  Repayments of term asset securitization borrowings        (68,000)     (31,000)          --
  Asset securitization borrowings - revolving, net
   decrease                                                      --     (225,000)          --
  Proceeds from term notes                                       --       75,000      125,000
  Repayments of term notes                                  (25,000)    (123,250)     (56,250)
  (Payments) proceeds from settlement of interest rate
   locks                                                         --       (5,915)       1,175
  Proceeds from stock option exercises                        1,265        5,902        8,116
  Common stock issued                                            45           45           45
  Common stock cash dividends                               (15,534)     (15,387)     (14,788)
  Common stock repurchased                                     (776)     (18,456)     (54,948)
  Excess tax benefits from stock-based awards                    --          505        1,524
---------------------------------------------------------------------------------------------
     Net cash (used in) provided by financing activities   (428,343)    (229,306)      71,063
---------------------------------------------------------------------------------------------
NET (DECREASE) INCREASE IN CASH                                (194)       2,371       (2,282)
Cash - beginning of year                                      8,232        5,861        8,143
---------------------------------------------------------------------------------------------
CASH - END OF YEAR                                        $   8,038   $    8,232   $    5,861
=============================================================================================
Supplemental disclosures of cash flow information:
   Interest paid                                          $  52,786   $   76,521   $   82,278
   Income taxes paid                                         32,026       27,632       21,654
=============================================================================================
</TABLE>

See accompanying notes to consolidated financial statements

                                       25
<PAGE>

                 FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES

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


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

     Financial Federal Corporation ("FFC") is a holding company operating
primarily through one subsidiary to provide collateralized lending, financing
and leasing services nationwide to small and medium sized businesses in the
general construction, road and infrastructure construction and repair, road
transportation and refuse industries. We lend against, finance and lease a wide
range of new and used revenue-producing, essential-use equipment including
cranes, earthmovers, personnel lifts, trailers and trucks.

Basis of Presentation and Principles of Consolidation

     We prepared the accompanying Consolidated Financial Statements according to
accounting principles generally accepted in the United States of America (GAAP).
We eliminated all significant intercompany accounts and transactions. We do not
have reportable operating segments. We have two fully consolidated special
purpose entities for our on-balance-sheet asset securitization facilities.

     The Financial Accounting Standards Board ("FASB") implemented the FASB
Accounting Standards Codification ("ASC") on July 1, 2009. The FASB ASC is a
major restructuring of accounting standards and is now the only source of GAAP.
It replaced all prior accounting standards previously referred to as FASBs,
EITFs, APBs, FSPs, etc. All public companies will be required to refer to
appropriate FASB ASC sections instead of the original accounting standards
formerly disclosed starting with the first fiscal quarter ending after September
15, 2009. It takes effect for us for the quarter ending October 31, 2009, but we
are providing both references below to ease the transition. The FASB ASC does
not change GAAP.

Use of Estimates

     GAAP requires us to make significant estimates and assumptions to record
the amounts reported in the Consolidated Financial Statements and accompanying
notes for the allowance for credit losses, non-performing assets, residual
values, income taxes and stock-based compensation. Actual results could differ
from these estimates significantly.

Finance Receivables

     Finance receivables comprise loans and other financings and noncancelable
leases. All leases are accounted for as direct financing leases, where total
lease payments, plus any residual values, less the cost of the leased equipment
is recorded as unearned finance income. We record residual values at the lowest
of (i) any stated purchase option (ii) the present value at the end of the
initial lease term of rentals due under any renewal options or (iii) our
projection of the equipment's fair value at the end of the lease.

Income Recognition

     We recognize interest income earned on finance receivables over the term of
receivables using the interest method. Costs incurred to originate receivables
and nonrefundable fees earned on receivables are deferred and recognized in
finance income over the term of receivables using the interest method. We stop
recognizing income and net deferred costs when we classify receivables as
impaired. We classify receivables as impaired when we believe collecting all
principal and interest due is doubtful. This typically occurs when (i) a
contractual payment is 90 days or more past due (unless we expect this to be
temporary) (ii) the customer is subject to a bankruptcy proceeding or (iii) the
collateral is being liquidated, and the value of the collateral does not exceed
our net investment. We resume recognizing income and net deferred costs after we
believe collecting all amounts contractually due is probable.

Allowance for Credit Losses

     The allowance for credit losses on finance receivables is our estimate of
losses inherent in our receivables. We record a provision for credit losses on
finance receivables to adjust the allowance to the estimated amount. The
allowance is a significant estimate we determine based on total receivables, net
charge-off experience, impaired and delinquent receivables and our current
assessment of the risks inherent in our receivables from national and regional
economic conditions, industry conditions, concentrations, the financial
condition of customers and guarantors, collateral values and other factors.
Changes in the allowance level may be necessary based on unexpected changes in
these factors.

                                       26
<PAGE>

     Impaired finance receivables are written-down to our estimate of their fair
value by a charge to (decrease in) the allowance for credit losses. Write-downs
subsequently recovered are credited to (increase) the allowance. Assets received
to satisfy finance receivables (repossessed equipment, included in other assets)
are initially written-down to our estimate of fair value by a charge to the
allowance for credit losses and any subsequent write-downs and recoveries are
recorded in earnings.

     We measure fair value of these non-performing assets by using significant
other observable inputs; primarily quoted prices in active markets for identical
or similar assets adjusted for their condition. These are Level 2 inputs under
the fair value hierarchy of Statement of Financial Accounting Standards ("SFAS")
No. 157, "Fair Value Measurements", (FASB ASC 820-10).

Derivative Financial Instruments

     Derivative financial instruments are used to manage the exposure to the
effects of changes in market interest rates. Derivatives are recorded at fair
value as an asset or liability. Derivatives can be designated as a fair value or
cash flow hedge, or not designated as a hedge. We do not speculate with or trade
derivatives.

     For derivatives designated as a fair value hedge, the hedged asset or
liability is also recorded at its fair value (to the extent of the change in the
fair value due to the hedged risk) and any changes in the fair value of the
derivative and the hedged asset or liability from changes in the hedged risk are
recorded in earnings.

     For derivatives designated as a cash flow hedge, changes in the fair value
of the effective portion of the derivative are recorded in accumulated other
comprehensive (loss) income within stockholders' equity, net of tax, and
reclassified to earnings in the same future periods the hedged transaction
impacts earnings. Any ineffective portion is recorded in earnings immediately.

     Derivatives designated as a hedge must be linked to a specific asset,
liability, forecast transaction or firm commitment depending on the type of
hedge, and the risk management objective and strategy and the method to be used
to determine hedge effectiveness and measure ineffectiveness must be documented
at the hedging relationship's inception. Changes in the fair value of
derivatives not designated as a hedge are recorded in earnings immediately.

Stock-Based Compensation Expense

     We record the fair value of shares of restricted stock and stock units as
compensation expense over the awards' vesting periods using the straight-line
method for awards without a performance condition and the graded-vesting method
for awards with a performance condition and multiple vesting dates. The fair
value of these awards is the market value of our common stock on the date of
award.

     We record the fair value of options as compensation expense over the
options' vesting periods using straight-line or graded-vesting (accelerated)
methods. We use the Black-Scholes option-pricing model to calculate fair value.
We use the straight-line method to recognize compensation expense for options
granted after July 31, 2005 and we used the graded-vesting method for options
unvested on August 1, 2005.

     We only record compensation expense for stock-based awards expected to
vest. Therefore, we estimate how many awards will be forfeited and periodically
review our estimates based on actual forfeitures and revise them cumulatively as
necessary. We also defer a portion of stock-based compensation considered a cost
of originating receivables.

     We record tax benefits (reductions of the provision for income taxes) on
compensation expense for shares of restricted stock, stock units and
non-qualified stock options, and for incentive stock options when employees
exercise and subsequently sell the shares within one year. We realize excess tax
benefits when the compensation expense for stock-based awards deducted in our
income tax returns exceeds the expense recorded in our financial statements, and
we incur tax shortfalls when the financial statement expense exceeds the tax
deduction. We record excess tax benefits by increasing additional paid-in
capital and by reducing income taxes currently payable. We record tax shortfalls
by increasing income taxes currently payable and by (i) reducing additional
paid-in capital for the amount of the shortfall exceeded by any net excess tax
benefits recorded previously and (ii) increasing the provision for income taxes
for the amount of the shortfall exceeding net excess tax benefits recorded
previously.

                                       27
<PAGE>

Earnings Per Common Share

     Basic earnings per share equals net income divided by the weighted-average
number of common shares outstanding during the period. Diluted earnings per
share equals net income divided by the weighted-average number of common shares
plus potential common shares from the assumed conversion of dilutive securities.
Dilutive securities are shares of restricted stock, stock options, stock units
and convertible debt.

Income Taxes

     We record deferred tax assets and liabilities for the estimated future tax
effects of temporary differences between the financial statement and tax return
amounts of assets and liabilities using enacted tax rates. Deferred tax assets
are reduced by a valuation allowance when it is "more likely than not" the
assets will not be realized.

     We record tax benefits for positions we take on our income tax returns that
lower the amount of tax currently due. If we determine a tax position does not
pass a more-likely-than-not test of a taxing authority allowing it, we reverse
the tax benefits by recording a liability for uncertain tax positions. We also
record a liability for the portion of the tax benefits from tax positions
passing this test that we may not realize upon a taxing authority's challenge.
We also record a liability for any interest and penalties we may incur on
uncertain tax positions. The liability we record for uncertain tax positions,
including interest and penalties, increases the provision for income taxes. We
would reduce this liability and the provision for income taxes when we
determine a tax position is no longer uncertain. This would result from an
examination by a taxing authority, a change in tax law or the statute of
limitations elapsing.

New Accounting Standards

     SFAS No. 157, and SFAS No. 159, "The Fair Value Option for Financial Assets
and Financial Liabilities - Including an amendment of FASB Statement No. 115",
(FASB ASC 825-10) became effective for us on August 1, 2008. SFAS No. 157
defines fair value (replacing all prior definitions) and creates a framework to
measure fair value, but did not create any new fair value measurements. SFAS
No. 159 permits companies to choose to measure many financial instruments and
certain other items at fair value at specified election dates and to report
unrealized gains and losses on these items in earnings at each subsequent
reporting date. We did not choose to measure any financial instruments or other
items at fair value. The only items we measure at fair value are impaired
finance receivables and assets received to satisfy finance receivables
(repossessed equipment, included in other assets). We were required to measure
these items at fair value before these FASBs took effect and they did not
change how we determine their fair value materially. Therefore, applying these
FASBs did not have a material impact on our consolidated financial statements.

     The FASB issued Staff Position ("FSP") EITF 03-6-1, "Determining Whether
Instruments Granted in Share-Based Payment Transactions Are Participating
Securities", (FASB ASC 260-10) in June 2008. Securities participating in
dividends with common stock according to a formula are participating securities.
This FSP determined unvested shares of restricted stock and stock units with
nonforfeitable dividend rights meet the definition of participating securities.
Participating securities require the "two-class" method to calculate basic
earnings per share. This method lowers basic earnings per common share. This FSP
takes effect in the first quarter of fiscal years beginning after December 15,
2008 and will be applied retrospectively for all periods presented. It will take
effect for us on August 1, 2009. We have 1,273,000 unvested shares of restricted
stock and stock units with nonforfeitable rights to dividends. Based on this
amount, our current dividend rate and number of shares of common stock
outstanding, we estimate applying this FSP would reduce annual basic earnings
per common share by $0.08. This FSP will not affect diluted earnings per share
or net income.

     The FASB issued FSP APB 14-1, "Accounting for Convertible Debt Instruments
That May Be Settled in Cash upon Conversion (Including Partial Cash
Settlements)", (FASB ASC470-20) in May 2008. This FSP requires a portion of this
type of convertible debt to be recorded as equity and interest expense to be
recorded on the debt portion at a rate that would have been charged on
non-convertible debt with the same terms. This FSP takes effect in the first
quarter of fiscal years beginning after December 15, 2008 and will be applied
retrospectively for all periods presented. It will take effect for us on August
1, 2009. This FSP will apply to our 2.0% convertible debentures retrospectively
for fiscal 2009 and 2008 but will not affect our consolidated financial
statements for periods after April 30, 2009 because we repaid the convertible
debentures in April 2009.

     We determined we would have been charged 4.2% on five-year non-convertible
term debt when we issued the convertible debentures in April 2004. As a result,
$6,200 of the convertible debentures net of $2,200 of deferred income taxes will
be reclassified as equity as of August 1, 2007 (the beginning of the earliest
fiscal period to be presented after the FSP takes effect). We will record the
$6,200 reclassified amount as additional interest expense during the period from
August 1, 2007 to April 14, 2009 (the last day interest was due on the
debentures) using the interest method. Therefore, net income for fiscal 2009 and
2008 presented in future consolidated financial statements will be lower than
the amounts reported previously.

                                       28
<PAGE>

     The FASB issued SFAS No. 165, "Subsequent Events", (FASB ASC 855-10) in May
2009. SFAS No. 165 establishes accounting and disclosure requirements for
subsequent events and requires disclosure of the date subsequent events were
evaluated through. This FASB became effective for us on July 31, 2009 and did
not have a material impact on our consolidated financial statements. We
evaluated subsequent events through September 22, 2009; the date we issued the
consolidated financial statements.

     The FASB issued SFAS No. 166, "Accounting for Transfers of Financial
Assets", (FASB ASC 860) and SFAS No. 167, "Amendments to FASB Interpretation No.
(46R)", (FASB ASC 810-10) in June 2009. SFAS No. 166 requires additional
disclosures for securitization transactions and changes how special purpose
entities are consolidated. SFAS No. 167 changes how companies determine to
consolidate variable interest entities. These FASBs take effect for fiscal years
beginning after November 15, 2009 and will take effect for us on August 1, 2010
(fiscal 2011). These FASBs should not have a material impact on our consolidated
financial statements because we already consolidate our two special purpose
entities and we did not have any interests in variable interest entities at
July 31, 2009.


NOTE 2 - FINANCE RECEIVABLES

     Finance receivables comprise installment sale agreements and secured loans
(including line of credit arrangements), collectively referred to as loans, with
fixed or floating interest rates, and direct financing leases as follows:

     ==========================================================================
     July 31,                                             2009             2008
     ==========================================================================
     Loans:
        Fixed rate                                  $1,283,561       $1,592,839
        Floating rate (indexed to the prime rate)      122,234          168,793
     --------------------------------------------------------------------------
           Total loans                               1,405,795        1,761,632
     Direct financing leases                           130,603          179,160
     --------------------------------------------------------------------------
             Finance receivables                    $1,536,398       $1,940,792
     ==========================================================================

     Direct financing leases comprised the following:

     ==========================================================================
     July 31,                                             2009             2008
     ==========================================================================
     Minimum lease payments receivable              $  120,838       $  163,597
     Residual values                                    31,459           42,275
     Unearned finance income                           (21,694)         (26,712)
     --------------------------------------------------------------------------
             Direct financing leases                $  130,603       $  179,160
     ==========================================================================

     Line of credit arrangements contain off-balance sheet risk and are subject
to the same credit policies and procedures as other finance receivables. The
unused amount of these commitments was $14,200 at July 31, 2009 and $21,600 at
July 31, 2008. The weighted-average interest rate on fixed rate loans was 9.6%
at July 31, 2009 and 9.0% at July 31, 2008.

     Finance receivables generally require monthly installments of equal or
varying amounts over two to five years. Annual contractual maturities at July
31, 2009 follow:

     ==========================================================================
                                                                         Direct
                                               Fixed      Floating    Financing
     Fiscal Year Due:                     Rate Loans    Rate Loans       Leases
     ==========================================================================

     2010                                 $  520,600    $   52,596    $  51,534
     2011                                    374,307        34,256       35,050
     2012                                    234,156        23,933       22,623
     2013                                    103,743         8,012        9,776
     2014                                     34,263         3,101        1,855
     Thereafter                               16,492           336           --
     --------------------------------------------------------------------------
        Total                             $1,283,561    $  122,234    $ 120,838
     ==========================================================================

                                       29
<PAGE>

     Allowance for credit losses activity is summarized below:

     ==========================================================================
     Years Ended July 31,                        2009         2008         2007
     ==========================================================================
     Allowance - beginning of year           $ 24,769     $ 23,992     $ 24,100
        Provision                               7,900        4,000           --
        Write-downs                           (10,321)      (6,010)      (2,778)
        Recoveries                              2,659        2,787        2,670
     --------------------------------------------------------------------------
     Allowance - end of year                 $ 25,007     $ 24,769     $ 23,992
     ==========================================================================
     Allowance - end of year as a
        percentage of finance receivables        1.63%        1.28%        1.13%
     ==========================================================================
     Net charge-offs *                       $  7,662     $  3,223     $    108
     ==========================================================================
     Loss ratio **                               0.43%        0.16%        0.01%
     ==========================================================================
     *   write-downs less recoveries
     ** net charge-offs over average finance receivables

     Non-performing assets comprise impaired finance receivables and assets
received to satisfy finance receivables as follows:

     ==========================================================================
     July 31,                                                 2009         2008
     ==========================================================================
     Impaired finance receivables                         $ 64,507     $ 33,542
     Assets received to satisfy finance receivables         22,536       13,182
     --------------------------------------------------------------------------
        Non-performing assets                             $ 87,043     $ 46,724
     ==========================================================================

     The allowance for credit losses included $1,100 at July 31, 2009 and $900
at July 31, 2008 specifically allocated to $11,900 and $9,400 respectively, of
impaired finance receivables. We did not recognize any income in fiscal 2009,
2008 or 2007 on impaired finance receivables before collecting our net
investment. The net investment in impaired loans was $62,600 at July 31, 2009
and $31,200 at July 31, 2008. The average net investment in impaired loans was
$38,100 in fiscal 2009, $28,300 in fiscal 2008 and $13,800 in fiscal 2007. We
repossessed assets to satisfy $62,900, $46,900 and $12,500 of finance
receivables in fiscal 2009, 2008 and 2007, respectively. We recorded $12,500 of
impaired finance receivables based on the fair value of the collateral and
$7,200 of assets received to satisfy receivables at fair value at July 31, 2009.

     We manage our exposure to the credit risk associated with our finance
receivables by adhering to disciplined and established underwriting policies and
procedures. Our underwriting policies and procedures require obtaining a first
lien on equipment financed. We focus on financing equipment with a remaining
useful life longer than the term financed, historically low levels of
technological obsolescence, use in more than one type of business, ease of
access and transporting, and broad, established resale markets. Securing our
receivables with equipment having these characteristics can mitigate potential
net charge-offs. We may also obtain additional equipment or other collateral,
third-party guarantees, advance payments or hold back a portion of the amount
financed.

     Our finance receivables reflect industry and geographic concentrations of
credit risk. Concentrations of credit risk result when customers have similar
economic characteristics that would cause their ability to meet contractual
obligations to be affected by changes in economic or other conditions similarly.
We do not have a significant concentration of credit risk with any customer. The
major concentrations of credit risk, grouped by industry and U.S. geographic
region, expressed as percentages of finance receivables, follow:

     ====================================       ===============================
     July 31,                2009    2008       July 31,           2009    2008
     ====================================       ===============================
     Industry:                                  Geographic region:
     ---------                                  ------------------
     Construction related      44%     44%      Southwest            30%     30%
     Road transportation       36      38       Southeast            25      26
     Refuse                    13      12       Northeast            19      17
     Other (none more than 3%                   Central              13      13
       in 2009 and 2% 2008)     7       6       West                 13      14
     ====================================       ===============================

                                       30
<PAGE>

NOTE 3 - DEBT

     Debt is summarized below:

     ===========================================================================
     July 31,                                                2009           2008
     ===========================================================================
     Fixed rate term notes:
        4.31% - 4.60% due 2013                         $   75,000     $   75,000
        4.96% - 5.00% due 2010 - 2011                     250,000        275,000
        5.45% - 5.57% due 2011 - 2014                     325,000        325,000
     ---------------------------------------------------------------------------
          Total fixed rate term notes                     650,000        675,000
     Asset securitization borrowings - term               101,000        169,000
     2.0% convertible debentures due 2034                      --        175,000
     ---------------------------------------------------------------------------
            Total term debt                               751,000      1,019,000
     Bank borrowings                                      197,000        369,000
     Commercial paper                                     104,000         79,000
     ---------------------------------------------------------------------------
               Total debt                              $1,052,000     $1,467,000
     ===========================================================================

Term Notes

     In July 2009, we repaid the $25,000 of seven-year 4.96% term notes maturing
in April and June 2010, and in August 2009, we repaid $168,600 of the five-year
5.00% term notes maturing in May and August 2010. There was no gain or loss on
these prepayments. In late September 2009, we also repaid $60,000 of the
five-year 5.45% term notes maturing in March 2011 also at no gain or loss.

     We issued the term notes outstanding at July 31, 2009 between fiscal 2005
and 2008. They are five and seven year fixed rate notes with principal due at
maturity between May 2010 and April 2014. Their average maturity was 2.5 years
at July 31, 2009 (excluding the notes prepaid in August 2009). Interest is
payable semiannually. Prepayments are subject to a premium based on yield
maintenance formulas. The average interest rate on the notes was 5.2% at July
31, 2009 (excluding the notes prepaid in August 2009) and 5.2% at July 31, 2008.

     We converted $75,000 of bank credit facilities scheduled to expire in
February 2008, March 2010 and January 2012 into five-year fixed rate term notes
in fiscal 2008. The notes are due at maturity in February 2013 and the average
interest rate is 4.43%. We repaid $118,250 of fixed rate term notes swapped to
floating rates at maturity in fiscal 2008. The average floating rate on these
notes was 5.90%. We also repaid a 6.80% $5,000 term note at maturity in fiscal
2008.

     We issued $125,000 of fixed rate term notes in fiscal 2007. The notes
comprise $75,000 of five-year, 5.48% notes and $50,000 of seven-year, 5.57%
notes due at maturity in April 2012 and 2014. We also converted a $10,000
floating rate term note due in fiscal 2008 to a $15,000 three-year committed
unsecured revolving bank credit facility in fiscal 2007.

Convertible Debentures

     We purchased $42,300 of the debentures in the open market under our common
stock and convertible debt repurchase program in November 2008 and January 2009
for $40,643 resulting in a $1,588 debt retirement gain (net of $69 of
unamortized deferred debt issuance costs). All holders of the remaining $132,700
of debentures exercised their first five-year put option requiring us to repay
the debentures at their principal amount in April 2009.

     We issued the convertible debentures in fiscal 2004. The debentures had a
2.0% fixed annual interest rate and interest was due semiannually. The
debentures were due at maturity in April 2034, but we had the ability to redeem
them anytime starting in April 2009 by paying the principal amount in cash and
debenture holders had the ability to require us to repurchase them on each
five-year anniversary of issuance or when a specified corporate transaction
occurred paying the principal amount in cash. Debenture holders also had the
ability to convert the debentures before maturity into cash and common stock.

     We irrevocably elected (under the debentures' original terms and without
modifying them) in fiscal 2005 to pay the value of converted debentures, not
exceeding their principal, in cash instead of issuing shares of our common
stock. The value of converted debentures equaled the number of convertible
shares multiplied by the market value of our common stock. We would have only
issued shares if the value of converted debentures exceeded their principal.
Shares of common stock needed to pay any value over principal would have
equaled the difference between the conversion date closing price of our common
stock and the conversion price, divided by the conversion date closing price
and multiplied by the number of convertible shares. There were 4,928,000
convertible (but not issuable) shares, the adjusted conversion price was $26.93
per share and the adjusted conversion rate was 37.14 shares for each $1 (one
thousand) of principal when we repaid the debentures.

                                       31
<PAGE>

     The conversion rate, number of convertible shares and conversion price
changed when specified corporate transactions (including dividend payments and
stock splits) occurred. The conversion rate and number of convertible shares
increased and the conversion price decreased when we declared cash dividends on
our common stock. The conversion rate, conversion price and number of
convertible shares were 36.35, $27.51 and 6,361,000, respectively at July 31,
2008.

Asset Securitization Borrowings

     We obtained a new $100,000 asset securitization facility in April 2009 and
we renewed our $325,000 asset securitization facility in June 2009. The $100,000
facility expires in April 2010 and the $325,000 facility now expires in June
2010. The facilities provide for committed revolving financing during their
one-year term and we can convert borrowings outstanding into amortizing term
debt if they are not renewed. The amortizing term debt would be repaid monthly
from collections of securitized receivables and would be repaid substantially
within two years after being converted. The entire amount of the facilities was
unused and available for us to borrow at July 31, 2009.

     We converted $200,000 of revolving asset securitization borrowings into
amortizing term debt in fiscal 2008. This lowered the amount of the facility
expiring in June 2010 to the current amount of $325,000. We are repaying the
remaining $101,000 of these term borrowings monthly from collections of
securitized receivables. The monthly repayment amounts vary based on the amount
of securitized receivables collected and the amount borrowed under the $325,000
facility, and would increase if we borrow under this facility or convert this
facility into amortizing term debt upon nonrenewal. The term debt will be repaid
substantially in two years based on the amount of securitized receivables at
July 31, 2009 and not borrowing under this facility.

     We structured the facilities to account for securitization proceeds as
secured debt and not as sales of receivables. Therefore, we do not record gains
on sales of securitized receivables and the debt and receivables remain on our
balance sheet. Borrowings under these facilities and the amortizing term debt
are without recourse. Finance receivables included $167,000 of securitized
receivables at July 31, 2009 and $410,000 at July 31, 2008. The amount of
receivables we can securitize is limited to 50% of our major operating
subsidiary's receivables because of restrictions in its other debt agreements.
This limit was $760,000 at July 31, 2009. Borrowings under these facilities and
the amortizing term debt are limited to 90% of securitized receivables
classified as eligible. Securitized receivables classified as impaired or with
terms outside of defined limits are not eligible.

     These facilities would terminate if net charge-offs of securitized
receivables or if delinquent receivables exceed certain levels. This would
convert borrowings outstanding into amortizing term debt required to be repaid
monthly from collections of securitized receivables.

     The average interest rates on borrowings at July 31, 2009 and 2008 were
1.5% and 3.7%, respectively. The average interest rates for the years ended July
31, 2009, 2008 and 2007 were 2.8%, 4.8% and 5.4%, respectively. The interest
rates change daily on borrowings under the facilities and change daily and
monthly on the term debt.

Bank Borrowings

     We have $455,000 of committed unsecured revolving credit facilities from
ten banks with $95,000 expiring within one year and $360,000 expiring between
September 2010 and February 2013, and $258,000 of these facilities was unused
and available for us to borrow at July 31, 2009. Borrowings under these
facilities can mature between 1 and 270 days and their interest rates are based
on domestic money market rates or LIBOR. Borrowings outstanding at July 31, 2009
matured in August 2009, were reborrowed and remain outstanding. We incur a fee
on the unused portion of the facilities. We renewed a $30,000 two-year facility
for another two years in September 2008, and a $25,000 one-year facility expired
in March 2009.

     The average interest rates on borrowings at July 31, 2009 and 2008 were
1.0% and 2.7%, respectively. The average interest rates for the years ended July
31, 2009, 2008 and 2007 were 1.5%, 4.1% and 5.7%, respectively.

Commercial Paper

     We issue commercial paper direct and through a $500,000 dealer program with
maturities between 1 and 270 days. We increased the size of our program in
fiscal 2007 from $350,000. The amount of commercial paper we can issue is
limited to the lower of $500,000 and the unused amount of our committed bank and
securitization credit facilities ($683,000 at July 31, 2009). The average
maturity of commercial paper was 30 days at July 31, 2009 and 50 days at July
31, 2008.

     The average interest rates on commercial paper at July 31, 2009 and 2008
were 2.7% and 2.9%, respectively. The average interest rates for the years ended
July 31, 2009, 2008 and 2007 were 3.1%, 4.5% and 5.5%, respectively.

                                       32
<PAGE>

Other

     We obtained all of our debt and credit facilities through our major
operating subsidiary except for the convertible debentures (issued by FFC). The
subsidiary's debt agreements have restrictive covenants limiting its
indebtedness, encumbrances, investments, sales of assets, mergers and other
business combinations, capital expenditures, interest coverage, net worth and
dividends and other distributions to FFC. The subsidiary complied with all debt
covenants and restrictions at July 31, 2009. None of the agreements or
facilities has a material adverse change clause and all of our debt is senior.

     Long-term debt comprised the following:

     ===========================================================================
     July 31,                                                 2009          2008
     ===========================================================================
     Term notes                                         $  425,000    $  675,000
     Borrowings under bank credit facilities
        expiring after one year                            197,000       369,000
     Term notes refinanced in August 2009
        with borrowings under bank credit
        facilities expiring after one year                 163,000            --
     Commercial paper supported by long-term
        asset securitization facilities
        (July 31, 2009) and by long-term bank
        credit facilities (July 31, 2008)                  104,000        41,000
     Asset securitization borrowings - term                 43,000       104,000
     ---------------------------------------------------------------------------
             Total long-term debt                       $  932,000    $1,189,000
     ===========================================================================

     Long-term debt at July 31, 2009 matures or expires as follows:

     ===========================================================================
     Fiscal:                      2011          2012          2013          2014
     ===========================================================================
                              $363,000      $389,000      $130,000       $50,000
     ===========================================================================


NOTE 4 - DERIVATIVES

     We had no derivatives outstanding at July 31, 2009 and 2008 and we did not
enter into any derivatives in fiscal 2009.

     When we anticipate issuing fixed rate term debt within six months, we
consider entering into interest rate locks to hedge the risk of higher interest
payments on the forecast debt from increases in market interest rates before the
debt is issued. Interest rate locks generally have a six-month term and can be
terminated early. We entered into and terminated the following interest rate
locks and designated them as cash flow hedges of the first five years of
interest payments on forecast fixed rate term debt.

     ===========================================================================
     Years Ended July 31,                                2008               2007
     ===========================================================================
     Type of rate lock                         Treasury locks            Forward
                                                                  starting swaps
     Notional amount                                 $ 75,000           $150,000
     Settlement (payment) proceeds                     (5,915)             1,175
     Effective portion                                 (5,915)             1,075
     Ineffective portion                                   --                100
     Deferred income tax                               (2,291)               455
     ===========================================================================

     We determined these locks were highly effective. We recorded the effective
amounts in stockholders' equity as accumulated other comprehensive (loss) income
net of deferred income tax. We reclassify the after-tax amounts into net income
over five years by increasing or reducing interest expense and deferred income
tax. We reduced interest expense by the ineffective portion in fiscal 2007.
Settlement payments increase interest expense and effectively increase the rate
on the hedged debt and settlement proceeds reduce interest expense and the rate
on the hedged debt.

     We expect to reclassify $476 (net of $300 of deferred income tax) of the
$2,004 unrealized net after-tax loss from rate locks in accumulated other
comprehensive loss at July 31, 2009 into net income in fiscal 2010.

                                       33
<PAGE>

     We also had fixed to floating interest rate swaps with a total notional
amount of $143,250 at July 31, 2007. We terminated $25,000 of these swaps early
and $118,250 expired when the hedged debt matured in fiscal 2008. The swaps had
no value at termination or expiration.


NOTE 5 - STOCKHOLDERS' EQUITY

     We received 37,000 shares of common stock from employees at an average
price of $21.00 per share for the payment of $776 of income tax due on vested
shares of restricted stock in fiscal 2009. We repurchased 707,600 shares of our
common stock in fiscal 2008 under our repurchase program for $18,345 at a $25.92
average price per share and we received 5,700 shares of common stock from
employees at an average price of $19.59 per share for payment of $112 of income
tax due on vested shares of restricted stock. We repurchased 2,014,000 shares of
our common stock in fiscal 2007 under our repurchase programs for $54,480 at a
$27.05 average price per share and we received 17,500 shares of common stock
from employees at an average price of $26.70 per share for the payment of $467
of income tax due on vested shares of restricted stock.

     We established our common stock and convertible debt repurchase program in
fiscal 2007 for an initial amount of $50,000. We increased the program by
$58,533 in fiscal 2009 and $43,862 remained authorized for future repurchases at
July 31, 2009. The program does not have an expiration date.

     We paid quarterly cash dividends on our common stock of $0.60 per share in
fiscal 2009 and 2008 and $0.55 per share in fiscal 2007. We declared a quarterly
cash dividend of $0.15 per share in September 2009 payable in October 2009. The
amount of equity we can distribute to stockholders is limited, indirectly,
because the amount of funds we can obtain from our major operating subsidiary is
restricted by its debt agreements. As a result, the amount of stockholders'
equity we could distribute at July 31, 2009 was limited to $144,000.


NOTE 6 - STOCK PLANS

     We have two stockholder approved stock plans; the 2006 Stock Incentive Plan
(the "2006 Plan") and the Amended and Restated 2001 Management Incentive Plan
(the "Amended MIP"). The 2006 Plan authorizes the issuance of 2,500,000 shares
of restricted stock, non-qualified or incentive stock options, stock
appreciation rights, stock units and common stock to officers, other employees
and directors with annual participant limits, and expires in December 2016.
Awards may be performance-based. The exercise price of stock options cannot be
less than the fair market value of our common stock when granted and their term
is limited to ten years. There were 1,679,000 shares available for future grants
under the 2006 Plan at July 31, 2009. The Amended MIP authorizes the issuance of
1,000,000 shares of restricted stock, with an annual participant limit of
200,000 shares, and awards of performance-based cash or stock bonuses to our CEO
and other selected officers. The Amended MIP expires in December 2011. There
were 625,000 shares available for future grants under the Amended MIP at July
31, 2009.

     We have a Supplemental Retirement Benefit ("SERP") for our CEO. We awarded
150,000 stock units to our CEO in fiscal 2002 vesting annually in equal amounts
over eight years. Subject to forfeiture, our CEO will receive shares of common
stock equal to the number of stock units vested when our CEO retires after
attaining age 62, and 131,000 units were vested at July 31, 2009.

     Restricted stock activity for fiscal 2009 is summarized below (shares in
thousands):

     ==========================================================================
                                                               Weighted-Average
                                             Shares       Grant-Date Fair Value
     ==========================================================================
     Unvested - August 1, 2008                1,176                   $   26.20
        Granted                                 205                       19.14
        Vested                                 (180)                      22.15
        Forfeited                               (12)                      26.62
     ----------------------------------------------
     Unvested - July 31, 2009                 1,189                       25.59
     ==========================================================================

                                       34
<PAGE>

     Information on shares of restricted stock that vested follows (in
thousands, except intrinsic value per share):

     ==========================================================================
     Years Ended July 31,                              2009      2008      2007
     ==========================================================================
     Number of shares vested                            180       167       142
     Total intrinsic value *                        $ 3,700   $ 3,400   $ 3,760
     Intrinsic value per share                        20.56     20.36     26.50
     Excess tax benefits (tax shortfall) realized        10       (39)      329
     ==========================================================================
     * shares vested multiplied by the closing prices of our common stock on
       the dates vested

     In fiscal 2009, we awarded 100,000 shares of performance-based restricted
stock to executive officers under the 2006 Plan vesting 25% after two, three,
four and five years, and 50,000 shares of performance-based restricted stock to
our CEO under the Amended MIP vesting in October 2013. The performance condition
for these shares, based on fiscal 2009 diluted earnings per share, was satisfied
and all of the shares were earned. We also awarded 55,000 shares of restricted
stock to other officers vesting annually in equal amounts over five years.

     We awarded 293,000 and 120,000 shares of restricted stock to employees in
fiscal 2008 and 2007, respectively. Shares of restricted stock unvested at July
31, 2009 and awarded before fiscal 2009 are scheduled to vest as follows:

     o  324,000 shares awarded in fiscal 2002 through fiscal 2008 to executive
        officers and other employees vest annually in equal amounts over
        initial periods of three to eight years (seven year average)

     o  435,000 shares awarded in fiscal 2006 to executive officers vest when
        the officer's service terminates, other than upon a non-qualifying
        termination, after six months (i) after the executive officer attains
        age 62 or (ii) after August 2026 if earlier (twelve year average) and
        a portion based on the percentage of the vesting period elapsed would
        vest upon a qualifying employment termination

     o  225,000 shares awarded in fiscal 2008 to executive officers vest in
        October 2012

     Stock unit activity and related information for fiscal 2009 are summarized
below (stock units in thousands):

     ==========================================================================
                                                               Weighted-Average
                                              Units       Grant-Date Fair Value
     ==========================================================================
     Outstanding - August 1, 2008               207                   $   23.71
        Granted                                  65                       18.47
        Converted into common stock              --                          --
     ----------------------------------------------
     Outstanding - July 31, 2009                272                       22.46
     ==========================================================================
     Vested - July 31, 2009                     188                   $   23.68
     ==========================================================================

     We awarded 55,000 restricted stock units to executive officers under the
2006 Plan in fiscal 2009 vesting six months after the officer's service
terminates after (i) the officer attains age 62 or (ii) August 2026 if earlier
(twelve-year average). Unvested units are subject to forfeiture and a portion
(based on the percentage of the vesting period elapsed) of the units would vest
upon certain qualifying employment terminations. Each unit represents the right
to receive one share of common stock.

     We awarded 10,000 restricted stock units under the 2006 Plan to
non-employee directors in fiscal 2009. These units are subject to forfeiture
until they vest in fiscal 2010. We awarded 11,000 restricted stock units to
non-employee directors in fiscal 2008 and 19,000 in fiscal 2007. These units
were vested at July 31, 2009. Vested units will convert into shares of common
stock when the director's service terminates. We issued 2,000 shares of common
stock under the 2006 Plan in fiscal 2009, 2,000 shares in fiscal 2008 and 1,500
shares in fiscal 2007 as payment of annual director retainer fees at a
director's election. The price of our common stock on the dates we issued these
shares was $22.38, $22.08 and $28.73, respectively.

     All unvested shares of restricted stock and stock units are subject to
forfeiture and would vest immediately upon the sale of the Company or the
employee's or director's death or disability, and 538,000 of the shares of
restricted stock unvested at July 31, 2009 would also vest upon a qualifying
employment termination.

     We pay dividends on all unvested shares of restricted stock and make
dividend equivalent payments on all stock units. Dividends and dividend
equivalents paid are retained and not forfeited regardless of whether the shares
of restricted stock or stock units vest. The restricted stock and stock unit
agreements also allow employees and directors to pay income tax due by
surrendering a portion of the shares or units.

                                       35
<PAGE>

     Stock option activity and related information for fiscal 2009 are
summarized below (options and intrinsic value in thousands):

<TABLE>
<CAPTION>
     ==============================================================================
                                               Weighted-Average
                                            -------------------
                                                      Remaining  Options
                                            Exercise       Term   in the  Intrinsic
                                   Options     Price     (years)   Money    Value *
     ==============================================================================
<S>                                <C>      <C>        <C>       <C>      <C>
     Outstanding - August 1, 2008      892    $24.31
        Granted                         20     19.15
        Exercised                      (58)    21.71
        Expired unexercised            (94)    25.01
        Forfeited                      (27)    22.81
     -------------------------------------
     Outstanding - July 31, 2009       733     24.35        1.6       35       $ 50
     ==============================================================================
     Exercisable - July 31, 2009       543    $24.20        1.1       20       $ 10
     ==============================================================================
</TABLE>
     *  number of in-the-money options (options with an exercise price below
        the market price of our common stock) multiplied by the difference
        between their average exercise price and the $20.28 closing price of
        our common stock on July 31, 2009

     We granted 20,000, 118,000 and 131,000 non-qualified stock options to
employees in fiscal 2009, 2008 and 2007, respectively. Of the 733,000 options
outstanding at July 31, 2009, 366,000 were granted after fiscal 2005 with a
five-year term vesting 25% after one, two, three and four years, and 367,000
were granted through fiscal 2005 with a six-year term vesting 25% after two,
three, four and five years.

     Information on stock option exercises follows (in thousands, except
intrinsic value per option):

     ===========================================================================
     Years Ended July 31,                          2009         2008        2007
     ===========================================================================
     Number of options exercised                     58          331         463
     Total intrinsic value *                     $  160       $2,490      $4,950
     Intrinsic value per option                    2.75         7.50       10.70
     (Tax shortfall) excess tax
        benefits realized                           (10)         544       1,195
     ===========================================================================
     *  options exercised multiplied by the difference between their exercise
        prices and the closing prices of our common stock on the exercise dates

     The average grant date fair value and exercise price of options granted,
and the significant assumptions we used to calculate fair values follow:

     ==========================================================================
     Years Ended July 31,                          2009        2008        2007
     ==========================================================================
     Average grant date fair value              $  4.12     $  3.62     $  4.75
     Average exercise price                       19.15       22.67       26.96
     Average assumptions:
        Expected life of options (years)            3.7         3.7         3.7
        Expected volatility                        35.0%       23.0%       22.0%
        Risk-free interest rate                     1.7%        3.4%        4.5%
        Dividend yield                              2.3%        2.8%        2.8%
     ==========================================================================

     We based our assumptions for the expected life of options granted on our
analysis of historical exercise behavior and the average of their term and
number of years to vest. These two methods produced similar results. We based
our assumptions for expected volatility on historical stock prices for periods
equal to the options' expected life.

     Future compensation expense (before deferral) for stock-based awards
unvested at July 31, 2009 and expected to vest, and the average expense
recognition periods follow:

     ===========================================================================
                                    Expense               Weighted-Average Years
     ===========================================================================
     Restricted stock               $15,700                                  5.3
     Stock units                        800                                  8.0
     Stock options                      600                                  1.8
     --------------------------------------
                 Total              $17,100                                  5.3
     ===========================================================================

                                       36
<PAGE>

     Compensation recorded, deferred, included in salaries and other expenses,
and tax benefits recorded for stock-based awards follow:

     ===========================================================================
     Years Ended July 31,                               2009      2008      2007
     ===========================================================================
     Restricted stock                                 $7,293    $6,340    $5,093
     Stock units                                         712       909       684
     Stock options                                       545       717     1,090
     ---------------------------------------------------------------------------
        Total stock-based compensation                 8,550     7,966     6,867
     Stock-based compensation deferred                 3,408     3,127     2,875
     ---------------------------------------------------------------------------
        Net stock-based compensation in
          salaries and other expenses                 $5,142    $4,839    $3,992
     ===========================================================================
     Tax benefits                                     $1,871    $1,774    $1,418
     ===========================================================================

     Shares of restricted stock, stock units and stock options are the only
incentive compensation we provide (other than a cash bonus for the CEO) and we
believe these stock-based awards further align employees' and directors'
interests with those of our stockholders. We do not have a policy to repurchase
shares in the open market and we issue new shares when we award shares of
restricted stock or when employees exercise stock options.


NOTE 7 - EARNINGS PER COMMON SHARE

     Earnings per common share ("EPS") was calculated as follows (in thousands,
except per share amounts):

     ===========================================================================
     Years Ended July 31,                               2009      2008      2007
     ===========================================================================
     Net income                                      $43,148   $50,084   $50,050
     ===========================================================================
     Weighted-average common shares outstanding
       (used for basic EPS)                           24,655    24,454    25,813
     Effect of dilutive securities:
       Shares of restricted stock and stock units        454       339       293
       Stock options                                      12        81       259
       Shares issuable from convertible debt              --        44        16
     ---------------------------------------------------------------------------
     Adjusted weighted-average common shares
       outstanding (used for diluted EPS)             25,121    24,918    26,381
     ===========================================================================
     Net income per common share:
        Diluted                                      $  1.72   $  2.01   $  1.90
     ===========================================================================
        Basic                                        $  1.75   $  2.05   $  1.94
     ===========================================================================
     Antidilutive shares of restricted stock,
        stock units and stock options *                  805       878       216
     ===========================================================================
     *  excluded from the calculation because they would have increased
        diluted EPS


NOTE 8 - INCOME TAXES

     The provision for income taxes comprised the following:

     ===========================================================================
     Years Ended July 31,                          2009         2008        2007
     ===========================================================================
     Currently payable:
       Federal                                 $ 26,433     $ 23,976    $ 21,977
       State                                      4,387        4,336       3,716
     ---------------------------------------------------------------------------
         Total                                   30,820       28,312      25,693
     Deferred                                    (3,736)       3,210       5,738
     ---------------------------------------------------------------------------
           Provision for income taxes          $ 27,084     $ 31,522    $ 31,431
     ===========================================================================

     Net excess tax benefits from stock-based awards reduced income taxes
currently payable and increased additional paid-in capital by $505 in fiscal
2008 and $1,524 in fiscal 2007.

                                       37
<PAGE>

     Income taxes calculated at statutory federal rates are reconciled to the
provision for income taxes as follows:

     ===========================================================================
     Years Ended July 31,                         2009         2008         2007
     ===========================================================================
     Federal at statutory rates                $24,581      $28,562      $28,518
     State (after federal benefit)               2,393        2,791        2,664
     Nondeductible incentive stock
       options expense                              44           85          175
     Other                                          66           84           74
     ---------------------------------------------------------------------------
         Provision for income taxes            $27,084      $31,522      $31,431
     ===========================================================================

     Deferred income taxes comprised the tax effect of the following temporary
differences:

     ==========================================================================
     July 31,                                                 2009         2008
     ==========================================================================
     Deferred tax liabilities:
       Taxable gain on retirement of
         convertible debentures                           $ 18,722     $     --
       Leasing transactions                                 12,520       16,937
       Original issue discount on
         convertible debentures                                 --       16,516
       Net deferred origination costs
         and nonrefundable fees                              8,362        8,150
       Other                                                 1,226        1,231
     --------------------------------------------------------------------------
          Total                                             40,830       42,834
     --------------------------------------------------------------------------
     Deferred tax assets:
       Allowance for credit losses                          (9,567)      (9,490)
       Cumulative compensation on unvested
         shares of restricted stock and
         unvested stock units                               (6,516)      (4,357)
       Unrealized net loss on cash flow hedges
         in accumulated other comprehensive loss            (1,263)      (1,563)
       Other                                                  (184)        (688)
     --------------------------------------------------------------------------
          Total                                            (17,530)     (16,098)
     --------------------------------------------------------------------------
             Deferred income taxes                        $ 23,300     $ 26,736
     ==========================================================================

     The gross liability recorded for unrecognized tax benefits on uncertain tax
positions was $1,340 at July 31, 2009 and $1,175 at July 31, 2008, and includes
$390 and $311 of interest and penalties, respectively. The entire liability at
July 31, 2009, net of $450 of federal income tax benefits on state income taxes,
would lower our effective tax rate if recognized. We do not expect these amounts
to change significantly in fiscal 2010. We recognized $79 and $116 of interest
and penalties in fiscal 2009 and 2008, respectively. The change in the gross
liability is summarized below:

     ==========================================================================
     Years Ended July 31,                                       2009       2008
     ==========================================================================
     Balance - beginning of year                             $ 1,175    $ 1,163
        Increases from prior year tax positions                  140        127
        Increases from current year tax positions                 70         81
        Decreases from prior year tax positions                   --        (90)
        Reductions from lapsed statute of limitations            (45)      (106)
     --------------------------------------------------------------------------
     Balance - end of year                                   $ 1,340    $ 1,175
     ==========================================================================

     The IRS audited our fiscal 2005 and 2004 tax returns in fiscal 2007 and our
fiscal 1996 and 1995 tax returns in fiscal 1997. These audits resulted in no
changes to the tax we reported. We only take uncertain positions on our income
tax returns when tax law is unclear and subject to interpretation, and we
believe not taking the position would distort our income tax liability unfairly.
We have no foreign operations, we are not involved in any questionable tax
transactions and we file returns in almost every state with a corporate income
tax. We have three open examinations with two states that account for most of
the gross liability at July 31, 2009. The IRS can examine our federal tax
returns for three years and States can audit our state tax returns for three to
five years after we file them.

                                       38
<PAGE>

NOTE 9 - SALARIES AND OTHER EXPENSES

     Salaries and other expenses comprised the following:

     ===========================================================================
     Years Ended July 31,                           2009        2008        2007
     ===========================================================================
     Salaries and employee benefits              $16,196     $15,180     $14,403
     Other expenses                               13,341      12,143      10,542
     ---------------------------------------------------------------------------
           Total                                 $29,537     $27,323     $24,945
     ===========================================================================


NOTE 10 - LEASE COMMITMENTS

     We rent office space under leases expiring through fiscal 2020. Minimum
future annual rentals due under these operating leases at July 31, 2009 are
$1,400 in fiscal 2010, $1,600 in fiscal 2011, $1,100 in fiscal 2012, $600 in
fiscal 2013, $500 in fiscal 2014 and $2,100 after fiscal 2014. Office rent
expense was $1,800 in fiscal 2009, $1,610 in fiscal 2008 and $1,607 in fiscal
2007.


NOTE 11 - FAIR VALUES OF FINANCIAL INSTRUMENTS

     We estimate the fair value of our financial instruments; cash, finance
receivables (excluding leases), commitments to extend credit under line of
credit arrangements and debt, as described below.

     Carrying values of cash, commercial paper, bank borrowings and asset
securitization borrowings approximated their fair values based on their
short-term maturities and floating interest rates. Fair value of the term notes
payable was $637,000 at July 31, 2009 and $652,000 at July 31, 2008, compared
to their carrying amounts of $650,000 at July 31, 2009 and $675,000 at July 31,
2008. We calculated fair value based on the notes' cash flows discounted at
current market interest rates. Fair value of the $175,000 of 2.0% convertible
debentures was $173,700 at July 31, 2008 based on their quoted market price.

     It is not practicable for us to estimate the fair value of our finance
receivables and commitments to extend credit. These financial instruments were
not priced according to any set formulas, were not credit-scored and are not
loan-graded. They are not traded on any market and we hold them to maturity.
They have relatively short maturities that have been accelerated by significant
full and partial prepayment activity. They comprise a large number of
transactions with commercial customers in diverse businesses, are secured by
liens on various types of equipment and may be guaranteed by third parties and
cross-collateralized. Any difference between the carrying value and fair value
of each transaction would be affected by a potential buyer's assessment of the
transaction's credit quality, collateral value, guarantees, payment history,
yield, term, documents and other legal matters, and other subjective
considerations. Value received in a fair market sale of a receivable would be
based on the terms of the sale, our and the buyer's views of economic and
industry conditions, our and the buyer's tax considerations and other factors.
We disclose information relevant to estimating the fair value of our receivables
in Note 2.


NOTE 12 - SELECTED QUARTERLY DATA (UNAUDITED)

     ===========================================================================
                                                              Earnings per Share
                                                              ------------------
                                        Revenue   Net Income    Diluted    Basic
     ===========================================================================
     Fiscal 2009, three months ended:
     --------------------------------
        October 31, 2008                $42,993      $11,679     $ 0.47  $  0.48
        January 31, 2009 *               40,613       12,298       0.49     0.50
        April 30, 2009                   37,587       10,305       0.41     0.42
        July 31, 2009                    36,295        8,866       0.35     0.36

     Fiscal 2008, three months ended:
     --------------------------------
        October 31, 2007                $49,596      $12,666     $ 0.50  $  0.51
        January 31, 2008                 48,708       12,584       0.51     0.52
        April 30, 2008                   46,361       12,692       0.51     0.52
        July 31, 2008                    43,737       12,142       0.49     0.50
     ===========================================================================
     *  net income includes $1,000 and diluted and basic EPS includes $0.04 from
        the gain on retirement of debt

                                       39
<PAGE>

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

     None


ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

     Our management (with our Chief Executive Officer's and Chief Financial
Officer's participation) evaluated our disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934)
at the end of the period covered by this report. Based on this evaluation, our
Chief Executive Officer and Chief Financial Officer concluded our disclosure
controls and procedures are effective to ensure information required to be
disclosed in reports we file or submit under the Securities Exchange Act of 1934
is recorded, processed, summarized and reported timely.

Changes in Internal Control Over Financial Reporting

     There were no changes in our internal control over financial reporting
during the fourth quarter of fiscal 2009 that affected or are reasonably likely
to affect our internal control over financial reporting materially.

Management's Report on Internal Control Over Financial Reporting

     Our management is responsible for establishing and maintaining adequate
internal control over financial reporting. Internal control over financial
reporting is a process designed to provide reasonable assurance of the
reliability of financial reporting and preparing financial statements for
external purposes according to accounting principles generally accepted in the
United States of America ("GAAP"). Internal control over financial reporting
includes policies and procedures used to (i) maintain records in reasonable
detail to reflect our transactions accurately and fairly (ii) reasonably assure
that we record our transactions as necessary to permit us to prepare financial
statements according to GAAP, and that our receipts and expenditures are made
only according to authorizations of our management and directors and (iii)
reasonably assure that the unauthorized acquisition, use, or disposition of our
assets that could affect our financial statements materially is prevented or
detected timely.

     Internal control over financial reporting may not prevent or detect
misstatements because of its inherent limitations. Also, projecting the
effectiveness of internal control over financial reporting to future periods is
subject to the risk of controls becoming inadequate because of changes in
conditions or the deteriorating degree of complying with policies and
procedures.

     Our management evaluated the effectiveness of our internal control over
financial reporting based on the framework in "Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission" (commonly referred to as COSO). Based on its evaluation, our
management concluded our internal control over financial reporting was effective
at July 31, 2009. The effectiveness of our internal control over financial
reporting was audited by KPMG LLP, an independent registered public accounting
firm, as stated in their report on the next page.

                                       40
<PAGE>

             Report of Independent Registered Public Accounting Firm
             -------------------------------------------------------


The Board of Directors and Stockholders
Financial Federal Corporation:


We have audited Financial Federal Corporation and subsidiaries (the "Company" or
"Financial Federal") internal control over financial reporting as of July 31,
2009, based on criteria established in Internal Control - Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). The Company's management is responsible for maintaining effective
internal control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting, included in the
accompanying Management's Report on Internal Control Over Financial Reporting.
Our responsibility is to express an opinion on the Company's internal control
over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal
control based on the assessed risk. Our audit also included performing such
other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company's internal control over
financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company's
assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective
internal control over financial reporting as of July 31, 2009, based on criteria
established in Internal Control - Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated balance sheets of
Financial Federal as of July 31, 2009 and 2008, and the related consolidated
statements of income, changes in stockholders' equity and cash flows for each of
the years in the three-year period ended July 31, 2009, and our report dated
September 22, 2009 expressed an unqualified opinion on those consolidated
financial statements.



/s/ KPMG LLP


New York, New York
September 22, 2009

                                       41
<PAGE>

ITEM 9B. OTHER INFORMATION

     We issued a press release on September 22, 2009 reporting our results for
the quarter and year ended July 31, 2009. The press release is attached as
Exhibit 99.1. Exhibit 99.1 shall not be deemed "filed" for purposes of Section
18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
subject to the liabilities of that section, nor shall it be deemed incorporated
by reference in any filing under the Securities Act of 1933, as amended, or the
Exchange Act, except as shall be expressly set forth by specific reference.

     We issued a press release on September 22, 2009 announcing our Board of
Directors declared a quarterly dividend of $0.15 per share on our common stock.
The press release is attached as Exhibit 99.2. The dividend is payable on
October 23, 2009 to stockholders of record at the close of business on October
9, 2009. The dividend is the same as the previous quarter.


PART III


ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

     The information required by this Item, other than Executive Officers'
biographies in Part I, Item 1 of this report and the information about our code
of conduct discussed below, is incorporated herein by reference to the
information in the "Section 16(a) Beneficial Ownership Reporting Compliance",
"Nominees for Election as Directors", "Corporate Governance and Nominating
Committee" and "Audit Committee" sections of our 2009 Definitive Proxy Statement
to be filed according to Regulation 14A for our Annual Meeting of Stockholders
to be held December 8, 2009.

     We adopted a code of business conduct and ethics for our principal
executive officer, principal financial officer, principal accounting officer and
other employees performing similar functions. The code is posted in the Investor
Relations section of our website, http://www.financialfederal.com, under
Corporate Governance. We will provide a copy of the code free to any stockholder
on request to Financial Federal Corporation, 733 Third Avenue, New York, NY
10017, Attn: Corporate Secretary. We will satisfy the disclosure requirements of
Item 5.05 of Form 8-K by posting any amendments or waivers to this code on our
website.


ITEM 11. EXECUTIVE COMPENSATION

     The information required by this Item is incorporated herein by reference
to the information in the "Compensation of Directors", "Executive Compensation,"
"Compensation Committee Report" and "Compensation Committee Interlocks and
Insider Participation" sections of our 2009 Definitive Proxy Statement.


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

<TABLE>
<CAPTION>
                               Equity Compensation Plan Information

      ====================================================================================
                                                                      Number of securities
                                            Number of                  remaining available
                                           securities      Weighted    for future issuance
                                                to be       average           under equity
                                          issued upon      exercise           compensation
                                          exercise of      price of       plans (excluding
                                          outstanding   outstanding   securities reflected
      Equity compensation plan category   options (a)   options (b)     in column (a)) (c)
      ====================================================================================
<S>                                       <C>           <C>           <C>
      Approved by security holders (1)        854,832        $24.35              2,304,288
      Not approved by security holders (2)    150,000            --                     --
      ------------------------------------------------------------------------------------
         Total                              1,004,832        $24.35              2,304,288
      ====================================================================================
</TABLE>

     (1)  Column (a) comprises 732,832 stock options and 122,000 restricted
          stock units. The stock units do not have an exercise price and were
          excluded in calculating the price in column (b). Column (c) comprises
          1,679,288 shares of common stock issuable under our 2006 Stock
          Incentive Plan and 625,000 shares of common stock issuable under our
          Amended and Restated 2001 Management Incentive Plan.

                                       42
<PAGE>

     (2)  The securities are restricted stock units granted to the CEO in fiscal
          2002 under a Supplemental Retirement Benefit ("SERP") vesting annually
          in equal amounts over eight years. Subject to forfeiture, our CEO will
          receive shares of common stock equal to the number of stock units
          vested when our CEO retires after attaining age 62, and 131,250 units
          were vested at July 31, 2009.

     Other information required under this Item is incorporated herein by
reference to the information in the "Security Ownership of Certain Beneficial
Owners and Management" section of our 2009 Definitive Proxy Statement.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
         INDEPENDENCE

     The information required by this Item is incorporated herein by reference
to the information in the "Related Person Transactions" and "Independent and
Non-Management Directors" sections of our 2009 Definitive Proxy Statement.


ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

     The information required by this Item is incorporated herein by reference
to information in the "Principal Accounting Fees and Services" and "Pre-Approval
Policy and Procedures" sections of our 2009 Definitive Proxy Statement.


PART IV


ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

  (a)  Documents filed in this report:
                                                                            Page
                                                                           -----
      1. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS:
         Report of Independent Registered Public Accounting Firm              21
         Consolidated Balance Sheets at July 31, 2009 and 2008                22
         Consolidated Income Statements for the fiscal years
           ended July 31, 2009, 2008 and 2007                                 23
         Consolidated Statements of Changes in Stockholders' Equity
           for the fiscal years ended July 31, 2009, 2008 and 2007            24
         Consolidated Statements of Cash Flows for the fiscal years
           ended July 31, 2009, 2008 and 2007                                 25
         Notes to Consolidated Financial Statements                        26-39

      2. FINANCIAL STATEMENT SCHEDULES
         Schedule I - Condensed Financial Information of Registrant
             (all other schedules were omitted because the required
             information is included in the Consolidated Financial
             Statements or accompanying notes)                             46-47

      3. EXHIBITS

Exhibit No.    Description of Exhibit
--------------------------------------------------------------------------------
   3.1  (a)    Articles of Incorporation
   3.2  (b)    Certificate of Amendment of Articles of Incorporation dated
               December 9, 1998
   3.3  (c)    Amended and Restated By-laws dated March 5, 2007
   4.1  (d)    Specimen Common Stock Certificate
  10.1  (e)    Form of Commercial Paper Dealer Agreement
 *10.2  (f)    Form of Restricted Stock Agreement dated March 1, 2002 between
               the Registrant and its CEO
 *10.3  (f)    Form of Restricted Stock Agreement between the Registrant and
               certain senior officers
 *10.4  (g)    Agreement to Defer Restricted Stock dated February 26, 2004
               between the Registrant and its CEO
 *10.5  (g)    Agreement to Defer Restricted Stock dated February 26, 2004
               between the Registrant and its CEO
 *10.6  (h)    Restricted Stock Agreement dated October 14, 2004 between the
               Registrant and its CEO

                                       43
<PAGE>

 *10.7  (i)    Restricted Stock Agreement dated September 28, 2005 between the
               Registrant and its CEO
 *10.8  (i)    Restricted Stock Agreement dated November 2, 2005 between the
               Registrant and its CEO
 *10.9  (j)    Amended and Restated Supplemental Retirement Benefit dated
               March 6, 2006 between the Registrant and its CEO (as amended and
               restated March 6, 2006)
*10.10  (j)    Form of Excise Tax Restoration Agreement between the Registrant
               and its directors and named executive officers dated
               March 6, 2006
*10.11  (j)    Form of Indemnity Agreement between the Registrant and its
               directors and named executive officers dated March 6, 2006

*10.12  (j)    Restricted Stock Agreement dated February 22, 2006 between the
               Registrant and its CEO
*10.13  (j)    Form of Restricted Stock Agreement between the Registrant and
               certain senior officers
*10.14  (c)    Amended and Restated 2001 Management Incentive Plan
*10.15  (c)    2006 Stock Incentive Plan
*10.16  (c)    2006 Stock Incentive Plan - Form of Stock Grant Agreement for
               Chief Executive Officer
*10.17  (c)    2006 Stock Incentive Plan - Form of Stock Grant Agreement for
               Executive Officers and Non-Employee Directors
*10.18  (c)    2006 Stock Incentive Plan - Form of Incentive Stock Option
               Agreement for Executive Officers
*10.19  (c)    2006 Stock Incentive Plan - Form of Nonstatutory Stock Option
               Agreement for Executive Officers
*10.20  (c)    Amended and Restated 2001 Management Incentive Plan - Form of
               Restricted Stock Agreement
*10.21  (c)    Amended and Restated 2001 Management Incentive Plan - Form of
               Stock Unit Award Agreement
*10.22  (k)    2006 Stock Incentive Plan - Form of Stock Unit Agreement for
               Non-Employee Directors
*10.23  (l)    Amendment dated December 9, 2008 to Restricted Stock Agreements
               dated March 1, 2002 and October 14, 2004, and to Agreements to
               Defer Restricted Stock dated February 26, 2004 between the
               Registrant and its CEO
*10.24  (l)    Form of Amendment dated December 9, 2008 to Restricted Stock
               Agreement dated March 1, 2002 between the Registrant and certain
               senior officers
*10.25  (l)    Form of Amendment dated December 9, 2008 to 2006 Stock Incentive
               Plan - Stock Unit Agreement for Non-Employee Directors
*10.26  (l)    Form of Amendment dated December 9, 2008 to Excise Tax
               Restoration Agreement between the Registrant and its directors
               and named executive officers dated March 6, 2006
*10.27  (m)    Amendment dated March 3, 2009 to Equity Awards between the
               Registrant and its CEO
*10.28  (m)    Form of Stock Unit Agreement between the Registrant and certain
               senior officers
  12.1  **     Computation of Debt-To-Equity Ratio
  21.1  **     Subsidiaries of the Registrant
  23.1  **     Consent of Independent Registered Public Accounting Firm
  31.1  **     Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
  31.2  **     Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
  32.1  **     Section 1350 Certification of Chief Executive Officer
  32.2  **     Section 1350 Certification of Chief Financial Officer
  99.1  **     Press release dated September 22, 2009
  99.2  **     Press release dated September 22, 2009

Previously filed with the Securities and Exchange Commission as an exhibit to
our:
--------------------------------------------------------------------------------
  (a)     Registration Statement on Form S-1 (Registration No. 33-46662) filed
          May 28, 1992
  (b)     Form 10-Q for the quarter ended January 31, 1999
  (c)     Form 10-Q for the quarter ended January 31, 2007
  (d)     Registration Statement on Form S-3 (Registration No. 333-56651) filed
          June 11, 1998
  (e)     Form 10-K for the fiscal year ended July 31, 1996
  (f)     Form 10-Q for the quarter ended April 30, 2002
  (g)     Form 10-Q for the quarter ended January 31, 2003
  (h)     Form 10-Q for the quarter ended October 31, 2004
  (i)     Form 10-Q for the quarter ended October 31, 2005
  (j)     Form 10-Q for the quarter ended January 31, 2006
  (k)     Form 10-K for the fiscal year ended July 31, 2007
  (l)     Form 10-Q for the quarter ended January 31, 2009
  (m)     Form 10-Q for the quarter ended April 30, 2009

*    management contract or compensatory plan
**   filed with this report

                                       44
<PAGE>

                                   SIGNATURES

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


                              FINANCIAL FEDERAL CORPORATION
                              -----------------------------
                              (Registrant)


                        By:   /s/ Paul R. Sinsheimer
                              --------------------------------------------------
                              Chairman of the Board, Chief Executive Officer and
                              President (Principal Executive Officer)


                              September 22, 2009
                              ------------------
                              Date


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


/s/ Lawrence B. Fisher                                        September 22, 2009
--------------------------------------------------            ------------------
Director                                                      Date


/s/ Michael C. Palitz                                         September 22, 2009
--------------------------------------------------            ------------------
Director                                                      Date


/s/ Leopold Swergold                                          September 22, 2009
--------------------------------------------------            ------------------
Director                                                      Date


/s/ H. E. Timanus, Jr.                                        September 22, 2009
--------------------------------------------------            ------------------
Director                                                      Date


/s/ Michael J. Zimmerman                                      September 22, 2009
--------------------------------------------------            ------------------
Director                                                      Date


/s/ Steven F. Groth                                           September 22, 2009
--------------------------------------------------            ------------------
Senior Vice President and Chief Financial Officer             Date
(Principal Financial Officer)


/s/ David H. Hamm                                             September 22, 2009
--------------------------------------------------            ------------------
Vice President, Controller and Treasurer                      Date
(Principal Accounting Officer)

                                       45

<PAGE>

           SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                          FINANCIAL FEDERAL CORPORATION

                          PARENT COMPANY BALANCE SHEETS
                        (In thousands, except par value)

================================================================================
July 31,                                                         2009       2008
================================================================================
ASSETS
Investments in and loans to consolidated subsidiaries        $467,488   $603,827
Cash and other assets                                           2,349      2,687
Interest receivable from consolidated subsidiaries                623      1,090
--------------------------------------------------------------------------------
          TOTAL ASSETS                                       $470,460   $607,604
================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Deferred income taxes                                        $ 18,092   $ 16,112
Other liabilities                                                 322      1,620
2.0% convertible debentures due 2034                               --    175,000
--------------------------------------------------------------------------------
     Total liabilities                                         18,414    192,732
--------------------------------------------------------------------------------
Stockholders' equity                                          452,046    414,872
--------------------------------------------------------------------------------
          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY         $470,460   $607,604
================================================================================

                                       46
<PAGE>

           SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                                   (continued)

                          FINANCIAL FEDERAL CORPORATION

                        PARENT COMPANY INCOME STATEMENTS
                    (In thousands, except per share amounts)

<TABLE>
<CAPTION>
============================================================================================
Years Ended July 31,                                            2009        2008        2007
============================================================================================
<S>                                                         <C>         <C>         <C>
Equity in after-tax earnings of consolidated subsidiaries   $ 39,913    $ 46,976    $ 44,524
Interest income from loans to consolidated subsidiaries       10,546      13,610      17,705
Gain on debt retirement                                        1,588          --          --
Salaries and other expenses                                   (4,287)     (4,292)     (4,192)
Interest expense                                              (2,835)     (4,539)     (5,009)
--------------------------------------------------------------------------------------------
     Income before income taxes                               44,925      51,755      53,028

Provision for income taxes                                     1,777       1,671       2,978
--------------------------------------------------------------------------------------------
          NET INCOME                                        $ 43,148    $ 50,084    $ 50,050
============================================================================================
</TABLE>

                          FINANCIAL FEDERAL CORPORATION

                     PARENT COMPANY STATEMENTS OF CASH FLOWS
                                 (In thousands)

<TABLE>
<CAPTION>
============================================================================================
Years Ended July 31,                                            2009        2008        2007
============================================================================================
<S>                                                        <C>          <C>         <C>
Cash flows from operating activities:
--------------------------------------------------------------------------------------------
      Net cash provided by operating activities            $   4,203    $  6,697    $ 12,916
--------------------------------------------------------------------------------------------
Cash flows from investing activities:
  Cash dividend received from consolidated subsidiary        100,000          --          --
  Loans to consolidated subsidiaries, net decrease            84,125      29,414      57,996
--------------------------------------------------------------------------------------------
      Net cash provided by investing activities              184,125      29,414      57,996
--------------------------------------------------------------------------------------------
Cash flows from financing activities:
  Repayments of convertible debentures                      (173,343)         --          --
  Commercial paper, net decrease                                  --      (8,200)     (9,340)
  Proceeds from stock option exercises                         1,265       5,902       8,116
  Common stock issued                                             45          45          45
  Common stock cash dividends                                (15,534)    (15,387)    (14,788)
  Common stock repurchased                                      (776)    (18,456)    (54,948)
--------------------------------------------------------------------------------------------
      Net cash used in financing activities                 (188,343)    (36,096)    (70,915)
--------------------------------------------------------------------------------------------
NET (DECREASE) INCREASE IN CASH                                  (15)         15          (3)
Cash - beginning of year                                          19           4           7
--------------------------------------------------------------------------------------------
CASH - END OF YEAR                                         $       4    $     19    $      4
============================================================================================
</TABLE>

                                       47