[LOGO]

                                                       Financial
[GRAPHIC OMITTED]                                       Federal
                                                      Corporation

                                                  2001 annual report

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                               [GRAPHIC OMITTED]

                                Corporate Profile

Financial Federal Corporation specializes in financing industrial, commercial
and professional equipment through installment sales and leasing programs for
manufacturers, dealers and end users nationwide. In addition to its New York
office, the Company has six full-service operations centers in Texas, Illinois,
New Jersey, North Carolina, Georgia and California, and numerous additional
marketing locations throughout the country. For additional information, please
visit us at www.financialfederal.com.

<PAGE>


FINANCIAL HIGHLIGHTS
(In Thousands, Except Per Share Data)

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
For Years Ended July 31,                2001         2000        1999       1998      1997
============================================================================================
<S>                                  <C>          <C>          <C>        <C>       <C>
Finance Receivables, Net             $1,299,288   $1,118,087   $932,525   $759,097  $571,060
Total Assets                          1,313,663    1,127,785    942,185    766,108   574,764
Total Senior Debt                       931,598      791,348    647,652    500,532   439,361
Stockholders' Equity                    206,411      172,423    144,982    123,229   105,604
Revenues                                138,278      111,513     89,118     72,722    55,305
Net Earnings                             31,616       26,722     22,598     17,032    12,909
Earnings Per Common Share, Diluted         1.75         1.52       1.30       1.03      0.80
Earnings Per Common Share, Basic           1.99         1.79       1.52       1.15      0.87
</TABLE>

                              [BAR CHARTS OMITTED]


                                                                               1
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                               [GRAPHIC OMITTED]

        ["We have been able to deliver a strong, consistent performance."]


2
<PAGE>

LETTER TO SHAREHOLDERS

                                    Financial
                                    Strength

                               [GRAPHIC OMITTED]

Dear Fellow Shareholder:

      Fiscal 2001 was our best year ever and was the Company's twelfth
consecutive year of record earnings and receivables outstanding. We continued
our record of uninterrupted growth in earnings and finance receivables even as
the softening economy affected some of the industries we finance.

Industry Overview

      In the first half of calendar 2000, the Federal Reserve raised short-term
interest rates to their highest level in over nine years. This, together with
the effects of a weakening economy, caused the profitability of commercial
finance companies to decline and delinquencies to rise. As a result, access to
capital for most commercial finance companies became difficult as the wholesale
lending community either raised its pricing or, in some cases, abandoned its
support of our industry.

      These conditions prompted several competitors to reevaluate their
strategies. Some relinquished their independence to become part of large
multinational entities; others changed their methodology for acquiring new
business; and some exited the industry. This has created new business
opportunities for the Company.

      Since January 2001, in an effort to stimulate the economy, the Federal
Reserve has lowered short-term interest rates to their lowest level in nearly
forty years. While we benefit from the resulting reduction in our borrowing
costs, the economy has yet to show signs of recovery. We are confident that
lower interest rates and changes in fiscal policy will stimulate the U.S.
economy.

      Notwithstanding the difficulties faced by our industry, we have been able
to deliver a strong, consistent performance in fiscal 2001 by adhering to the
disciplines and principles established when the Company was founded in 1989:

      o     Providing exceptional customer service;

      o     Recognizing and managing the risks associated with the financial
            services we provide;

      o     Focusing on the quality of our portfolio rather than its size; and

      o     Aligning the economic interests of our employees with those of our
            shareholders.


                                                                               3
<PAGE>

                                   Sustained &
                                  Steady Growth

                               [GRAPHIC OMITTED]

Fiscal 2001 Highlights

o     18% GROWTH IN NET EARNINGS--Net earnings increased to $31.6 million from
      $26.7 million for the prior year.

o     15% GROWTH IN DILUTED EARNINGS PER SHARE--Diluted EPS increased to $1.75
      from $1.52 for the prior year.

o     16% RECEIVABLES GROWTH--Finance receivables outstanding increased to
      $1.321 billion at July 31, 2001 from $1.137 billion at July 31, 2000.

o     PRUDENT DEBT LEVERAGE--Total debt relative to stockholders' equity
      decreased to 4.97:1 as of July 31, 2001 from 5.13:1 at July 31, 2000.

o     CONTINUED DIVERSIFICATION OF FUNDING SOURCES--The Company completed its
      first asset securitization transaction, totaling $125 million.

o     LOW CREDIT LOSSES--Net credit losses, at 0.17% of average finance
      receivables, continued to be below the industry average.

Liquidity and Asset Securitization

      Liquidity and access to various capital markets are critical for financial
services companies. Accordingly, we have worked hard to ensure that we have
diverse funding sources available to support our continued growth.

      In September 2000, we established a $200 million Medium Term Note Program,
and borrowed $103 million to date. In July 2001, we completed a $125 million
asset securitization. This facility is conservatively structured as a revolving
financing without gain on sale, and has been treated as debt on the Company's
balance sheet. Entry into this broad-based asset-backed commercial paper market
represents a significant achievement in the Company's ongoing effort to further
diversify its sources of stable, cost-effective funding.

Asset Quality

      The primary assets financed by the Company are construction equipment,
transportation vehicles, machine tools and waste services equipment. These
assets generally share common characteristics, including long economic life; low
technological


4
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                               [GRAPHIC OMITTED]

  ["Fiscal 2001 was the Company's twelfth consecutive year of record earnings
                         and receivables outstanding."]


                                                                               5
<PAGE>

                               [GRAPHIC OMITTED]

["Financial Federal provides a superior level of customized, personal service."]


6
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                                 Building Strong
                                  Relationships

   [The following table was depicted as a pie chart in the printed material.]

                                   Geographic

                              Southeast         32%
                              Northeast         21%
                              Southwest         18%
                              Central           14%
                              West              13%
                              Northwest          2%

obsolescence; substantial resale value; essential role in the customer's
business; applications in various industries; broad established resale market;
and easy transportability. These characteristics have contributed to the
Company's overall performance and its historically low level of net credit
losses. Last year the Company's rate of net credit losses--0.17% of average
finance receivables--was again below the industry average. Our relatively low
level of credit losses also stems from our adherence to the Company's
long-standing underwriting policies and procedures. These include seeking
creditworthy obligors, relying on sound collateral and structuring transactions
to provide an adequate margin of profit.

Sustained Growth

      During the past year we have increased our marketing group by 30% to
promote continued internal growth. These experienced professionals have been
added at all regional operations centers and cover all of the industries
financed by the Company. These dedicated marketing representatives work solely
for Financial Federal.

      In addition to expanding through internal growth, we will continue to seek
opportunistic acquisitions of companies and portfolios of receivables. The
Company approaches such opportunities using the same criteria it employs in all
new business development endeavors--namely, insisting on a strong management
team, quality long-term earnings potential, and pricing that reflects the
inherent risks in the portfolio or company being purchased.

Superior Customer Service--A Key Competitive Advantage

      Financial Federal provides a superior level of customized, personal
service through its regional operations centers strategically located across the
country. The Company has six full-service operations centers located in Texas,
Illinois, New Jersey, North Carolina, Georgia and California. Many financial
services companies have moved further away from their customer base through
centralization of offices, thereby sacrificing customer service in favor of
reduced overhead. Financial Federal believes that locating senior managers close
to equipment vendors and customers fosters


                                                                               7
<PAGE>

                                   Consistent
                                  Performance

   [The following table was depicted as a pie chart in the printed material.]

                                   Equipment

                         Construction Related      39%
                         Road Transportation       28%
                         Waste Services            14%
                         Manufacturing             12%
                         Other                      7%

stronger business relationships and enhances management's understanding of local
and regional economic and industry conditions. Such personalized customer
relationships provide the basis for more knowledgeable underwriting of
transactions and facilitate repeat business.

In Memoriam

      In November of last year, Clarence Y. Palitz, Jr., my mentor and
co-founder of the Company, passed away. Cal, as he was known to many of us,
provided the spirit and vision that have guided the Company since its beginning.
Cal was a unique person of extreme intelligence with an abundance of common
sense. He is missed by all of us who were fortunate to have worked alongside of
him. Our management team is committed to Cal's goal to make Financial Federal
the best commercial finance company in the U.S.

The Future

      The terrorist attacks that took place on September 11, 2001 have
profoundly affected everyone. We join our fellow Americans in condemning those
responsible for such cowardly and reprehensible acts and in saluting those
involved in the valiant rescue and recovery efforts. Free enterprise and the
entrepreneurial spirit define our customers and the U.S. economy. Over the long
term, we are confident that the U.S. economy will recover and prosper, and that
our business methodology will sustain our ability to grow and be profitable.

      On behalf of the Board of Directors, we would like to express our thanks
to our employees, our customers, the banking and investment communities, and our
shareholders for their continued support.


/s/ Paul R. Sinsheimer

Paul R. Sinsheimer
Chairman of the Board, President and
Chief Executive Officer
October 4, 2001


8
<PAGE>

FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION

RESULTS OF OPERATIONS

General

      The Company derives profits to the extent that income earned on its
finance receivables exceeds its cost of borrowed funds, operating and
administrative expenses and provision for possible losses. The Company borrows
funds in the wholesale markets to provide lending, financing and leasing
services to primarily middle-market businesses nationwide. State usury, lending
and lien perfection rules and laws can regulate the Company's business
activities. Certain states also require the Company to obtain licenses in order
to engage in certain business activities.

      The Company's leasing activities are similar in business terms to its
lending and financing activities, differing only in legal and tax treatment. A
transaction is documented as a lease based on management's evaluations of the
customer's credit and the equipment collateral, the customer's preference and
other factors. The types of equipment that the Company lends against, finances
and leases, and the ongoing operational treatment of a transaction, are
generally the same, regardless of the documentation used. The Company accounts
for all transactions as finance receivables.

Comparison of Fiscal 2001 to Fiscal 2000

      Finance income increased by 24% to $138.3 million in fiscal 2001 from
$111.5 million in fiscal 2000. The increase was primarily due to the 20%, or
$207 million, increase in average finance receivables outstanding to $1.235
billion in fiscal 2001 from $1.028 billion in fiscal 2000 and higher yields
obtained on new receivables as a result of increases in market interest rates
during May 2000 through December 2000. Finance receivables originated in fiscal
2001 and in fiscal 2000 were $736 million and $719 million, respectively.

      Interest expense, incurred on borrowings used to fund finance receivables,
increased by 23% to $64.4 million in fiscal 2001 from $52.2 million in fiscal
2000. The increase was primarily due to the 21% increase in average debt
outstanding in fiscal 2001 from fiscal 2000 and, to a lesser extent, higher
interest rates incurred on the $145.0 million increase in fixed rate term debt
since April 30, 2000.

      Net finance income before provision for possible losses on finance
receivables increased by 25% to $73.9 million in fiscal 2001 from $59.3 million
in fiscal 2000. Net finance income before provision for possible losses
expressed as a percentage of average finance receivables outstanding ("net
interest margin") increased to 6.0% in fiscal 2001 from 5.8% in fiscal 2000. The
increase was primarily due to the increase in the yield on the Company's finance
receivables, partially offset by higher rates incurred on the additional $145.0
million of fixed rate term debt.

      The provision for possible losses on finance receivables increased by 44%
to $5.0 million in fiscal 2001 from $3.5 million in fiscal 2000. The provision
for possible losses is determined by the amount required to increase the
allowance for possible losses to a level considered appropriate by management.

      Salaries and other expenses increased by 32% to $17.1 million in fiscal
2001 from $13.0 million in fiscal 2000. The increase was primarily due to the
increase in the number of marketing and administrative employees, salary
increases and, to a lesser extent, additional costs incurred relating to the
increased number of problem accounts. In addition, the Company relocated its
Phoenix, Arizona operations center to Irvine, California in fiscal 2001.

      The provision for income taxes increased to $20.2 million in fiscal 2001
from $16.9 million in fiscal 2000 primarily due to the increase in earnings
before income taxes.

      Net earnings increased by 18% to $31.6 million in fiscal 2001 from $26.7
million in fiscal 2000. Diluted earnings per share increased by 15% to $1.75 per
share in fiscal 2001 from $1.52 per share in fiscal 2000 and basic earnings per
share increased by 11% to $1.99 per share in fiscal 2001 from $1.79 per share in
fiscal 2000. The increase in diluted earnings per share was lower than the
increase in net earnings primarily due to the effect that the convertible
subordinated notes have on the diluted earnings per share calculation and the
23% increase in the average price of the Company's common stock in fiscal 2001
from fiscal 2000. The increase in basic earnings per share was lower than the
increase in net earnings primarily due to the increase in the number of
outstanding shares of the Company's common stock resulting from the exercise of
the Company's 1.6 million warrants in the second quarter of fiscal 2001.

      In fiscal 2000, the Company repurchased $4.3 million principal amount of
its convertible subordinated notes for $3.5 million. Excluding the net after tax
gain on this retirement of debt, net earnings increased by 21%, diluted earnings
per share increased by 17% and basic earnings per share increased by 13% in
fiscal 2001 from fiscal 2000.


                                                                               9
<PAGE>

FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION
(continued)

Comparison of Fiscal 2000 to Fiscal 1999

      Finance income increased by 25% to $111.5 million in fiscal 2000 from
$89.1 million in fiscal 1999. The increase was primarily due to the 21%, or $179
million, increase in average finance receivables outstanding to $1.028 billion
in fiscal 2000 from $849 million in fiscal 1999 and to a lesser extent, higher
yields on new receivables and on variable rate receivables resulting from
increases in market interest rates during 2000. Finance receivables originated
increased 4% to $719 million in fiscal 2000 from $690 million in fiscal 1999.

      Interest expense, incurred on borrowings used to fund finance receivables,
increased by 33% to $52.2 million in fiscal 2000 from $39.2 million in fiscal
1999. The increase was primarily due to the 21% increase in average debt
outstanding in fiscal 2000 from fiscal 1999, higher rates incurred on short-term
and variable rate debt resulting from higher average market interest rates in
fiscal 2000 from fiscal 1999 and recent issuances of additional term debt.

      Net finance income before provision for possible losses on finance
receivables increased by 19% to $59.3 million in fiscal 2000 from $49.9 million
in fiscal 1999. The net interest margin decreased slightly to 5.8% in fiscal
2000 from 5.9% in fiscal 1999 primarily due to increases in market interest
rates during 2000.

      The provision for possible losses on finance receivables increased by 11%
to $3.5 million in fiscal 2000 from $3.1 million in fiscal 1999. The provision
for possible losses is determined by the amount required to increase the
allowance for possible losses to a level considered appropriate by management.

      In fiscal 2000, the Company repurchased $4.3 million principal amount of
its convertible subordinated notes for $3.5 million.

      Salaries and other expenses increased by 21% to $13.0 million in fiscal
2000 from $10.7 million in fiscal 1999. The increase was primarily due to the
increase in the number of marketing and administrative employees, salary
increases and the opening of a new full service operations center in Atlanta, GA
in February 2000.

      The provision for income taxes increased to $16.9 million in fiscal 2000
from $14.2 million in fiscal 1999 primarily due to the increase in earnings
before income taxes.

      Net earnings increased by 18% to $26.7 million in fiscal 2000 from $22.6
million in fiscal 1999. Diluted earnings per share increased by 17% to $1.52 per
share in fiscal 2000 from $1.30 per share in fiscal 1999 and basic earnings per
share increased by 18% to $1.79 per share in fiscal 2000 from $1.52 per share in
fiscal 1999.

RECEIVABLE PORTFOLIO AND ASSET QUALITY

      Finance receivables outstanding increased by $184.1 million, or 16%, to
$1.321 billion at July 31, 2001 from $1.137 billion at July 31, 2000, as the
amount of finance receivables originated exceeded amounts collected. At July 31,
2001, Financial Federal Credit Inc. ("Credit," a wholly-owned subsidiary) had
$1.317 billion, or 99.7%, of total finance receivables and First Federal
Commercial Inc. (a wholly owned subsidiary) had the balance of finance
receivables.

      The allowance for possible losses increased to $21.9 million at July 31,
2001 from $19.0 million at July 31, 2000, and was 1.66% of finance receivables
at July 31, 2001 as compared to 1.68% at July 31, 2000. The allowance is
periodically reviewed by the Company's management and is estimated based on
total finance receivables, net credit losses incurred and management's current
assessments of the risks inherent in the Company's finance receivables from
national and regional economic conditions, industry conditions, concentrations,
the financial condition of counterparties and other factors. An increase in the
level of the allowance may be necessary based on unexpected changes in these
factors.

      The equipment collateral securing the Company's finance receivables
generally possesses certain characteristics that have served to mitigate
potential credit losses. Such characteristics include an economic life that
exceeds the term of the transaction, a low level of technological obsolescence,
applications in multiple industries, ease of accessibility and transporting, and
a broad, established resale market. These characteristics and management's
experience with and knowledge of the equipment collateral, have mitigated the
Company's net credit losses.

      Net credit losses (write-downs of receivables less subsequent recoveries)
incurred on the Company's finance receivables were $2.1 million in fiscal 2001
and $604,000 in fiscal 2000. Net credit losses, expressed as a percentage of
average finance receivables outstanding ("loss ratio"), was 0.17% in fiscal 2001
and 0.06% in fiscal 2000. Non-performing assets were $34.4 million, or 2.6% of
total finance receivables, at July 31, 2001, compared to $16.2 million, or 1.4%
of total finance receivables, at


10
<PAGE>

July 31, 2000. Non-performing assets include finance receivables classified as
non-accrual (income recognition has been suspended) and assets received to
satisfy finance receivables. Delinquent finance receivables (transactions with a
contractual payment more than 60 days past due) were $24.8 million, or 1.9% of
total finance receivables, at July 31, 2001, compared to $17.3 million, or 1.5%
of total finance receivables, at July 31, 2000. At July 31, 2001, approximately
50% of the Company's non-performing assets were not delinquent.

      The Company's non-performing assets, delinquent finance receivables and
net credit losses have increased primarily because of the weakening domestic
economy. A continued economic weakening could cause additional increases in the
levels of the Company's non-performing assets, delinquent finance receivables
and net credit losses. Increases in the Company's net credit losses could have a
negative effect on the Company's earnings through additional increases in the
provision for possible losses and increases in the Company's non-performing
assets could have a negative effect on the Company's earnings through decreased
revenue. Although the Company's non-performing assets, delinquent receivables
and net credit losses have increased and could continue to increase, their
current and expected levels are below historical and current industry standards.

      The Company's finance receivables reflect certain industry and geographic
concentrations of credit risk. These concentrations arise from counterparties
having similar economic characteristics that could cause their ability to meet
their contractual obligations to the Company to be similarly affected by changes
in economic or other conditions. At July 31, 2001, the major industry
concentrations are construction related--39%, road transportation--28%, waste
services--14% and manufacturing--12%. The major regional geographic
concentrations are Southeast--32%, Northeast--21% and Southwest--18%.

LIQUIDITY AND CAPITAL RESOURCES

      The Company is dependent upon the continued availability of funds to
originate or acquire finance receivables and to purchase portfolios of finance
receivables. The Company may obtain required funds from a variety of sources,
including operating cash flow, dealer placed and directly issued commercial
paper, borrowings under committed unsecured revolving credit facilities, private
and public issuances of term debt, conduit and term securitizations of its
finance receivables and sales of common and preferred equity. Management
believes, but cannot assure, that the Company has available sufficient liquidity
to support its future operations.

      The Company has obtained the majority of its senior borrowings through
Credit and has obtained the balance of its borrowings through Financial Federal
Corporation ("Financial," the parent company).

      Credit has received investment grade credit ratings on its commercial
paper and senior term notes. Credit's commercial paper is rated "F-2" by Fitch,
Inc. and Credit's senior term notes are rated "BBB" by Fitch, Inc. These credit
ratings provide Credit with greater access to capital markets.

      Total debt increased by $140.2 million to $1.025 billion at July 31, 2001
from $884.8 million at July 31, 2000 and stockholders' equity increased by $34.0
million to $206.4 million at July 31, 2001 from $172.4 million at July 31, 2000.
These increases, combined with increases in the Company's accrued expenses and
other liabilities, were used primarily to fund the increase in finance
receivables.

      In September 2000, the Company established a $200 million Medium Term Note
Program and issued the following fixed rate term notes thereunder in October
2000 and March 2001, respectively: $38.0 million of 8.5% notes that mature in
May 2003 and $65.0 million of 7.05% notes that mature in April 2004. At July 31,
2001, $97.0 million was available under the program for future issuances of term
notes. During fiscal 2001, the Company also issued $40.0 million of bank term
loans with maturities of two and three years and repaid $35.0 million of senior
term notes at their scheduled maturity.

      Credit established a $125 million on-balance sheet revolving asset
securitization facility in July 2001. Under the facility, outstanding
borrowings, $125.0 million at July 31, 2001, are limited to a minimum level of
securitized receivables. When borrowings exceed the minimum level, Credit has
the option to repay the excess or to securitize additional receivables. Credit
can securitize additional receivables during the one-year term of the facility.
If the facility is not renewed at the end of the one-year term, Credit has the
option to repay borrowings outstanding or to convert them into term debt. The
term debt would be repaid monthly based on amounts collected from securitized
receivables. Credit currently intends to exercise the conversion option. Based
on the expected collections from securitized receivables at July 31, 2001, the
term


                                                                              11
<PAGE>

FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION
(continued)

debt would be fully repaid by July 2004. The interest rate on outstanding
borrowings reprices monthly and was 4.0% at July 31, 2001.

      Financial and Credit are each direct issuers of their own commercial
paper. Credit also issues commercial paper through a $350.0 million program with
recognized dealers. The Company's commercial paper is unsecured and matures
within 270 days. The Company has not obtained commitments from any purchaser of
its commercial paper for additional or future purchases. Increases in commercial
paper are generally offset by decreases in bank and other borrowings, and vice
versa.

      Commercial paper outstanding at July 31, 2001 was $143.8 million, a
decrease of $192.0 million from the $335.8 million outstanding at July 31, 2000.
In fiscal 2001, the Company increased borrowings under its committed unsecured
revolving bank credit facilities and decreased commercial paper borrowings to
vary the maturities and lower the cost of its short-term debt. The Company's
current policy is to maintain committed revolving credit facilities from banks
so that the aggregate amount available thereunder exceeds commercial paper
outstanding.

      At July 31, 2001, Credit had $460.0 million of committed unsecured
revolving credit facilities from fifteen banks; $220.0 million with original
terms ranging from two to five years under which $86.1 million was borrowed and
$240.0 million with an original term of one year or less under which $58.0
million was borrowed. At July 31, 2001, $185.0 million of the long-term
revolving credit facilities expire after one year. At July 31, 2001, Credit also
had $125.0 million of term loans from eight banks with maturities ranging from
January 2002 to June 2004.

      Information on the combined amounts and interest rates of the Company's
commercial paper and bank borrowings follows:

                                               ------
--------------------------------------------------------------------------------
(dollars in millions)                           2001         2000         1999
================================================================================
Maximum amount out-
  standing during the year                     $459.3       $399.3       $370.9
Average amount out-
  standing during the year                      408.0        348.5        340.6
Amount outstanding at
  year end                                      287.9        379.7        349.5
Weighted average interest rate:
    During the year                               6.2%         6.1%         5.4%
    End of the year                               4.3          6.8          5.4
                                               ------

      Credit's debt agreements contain certain restrictive covenants including
limitations on indebtedness, encumbrances, investments, dividends and other
distributions from Credit to Financial, sales of assets, mergers and other
business combinations, capital expenditures, interest coverage and the minimum
adjusted net worth of Credit.

MARKET INTEREST RATE RISK AND SENSITIVITY

      The Company's earnings are sensitive to fluctuations in market interest
rates. Generally, based on the Company's current mix of fixed rate and variable
rate finance receivables and debt, increases in interest rates could have a
negative impact on earnings and decreases in rates could have a positive impact
on earnings. This is primarily due to the Company having more variable rate and
short-term debt than fixed rate term debt and more fixed rate finance
receivables than variable rate finance receivables. Therefore, when market
interest rates rise, the Company's borrowing costs could increase faster than
the yield on its finance receivables. Conversely, when market interest rates
decline, the Company's borrowing costs could decrease faster than the yield on
its finance receivables. These broad statements do not take into account the
effects that market interest rate fluctuations could have on the economy.

      The net yield of the Company's finance receivables less the weighted
average cost of the Company's borrowed funds represents the Company's net
interest spread, an important measure of a finance company's profitability. The
Company's net interest spread for the last three fiscal years follows:

                                                     ----
--------------------------------------------------------------------------------
Year Ended July 31,                                  2001       2000       1999
================================================================================
Net yield of finance receivables                     11.2%      10.8%      10.5%
Weighted average cost
  of borrowed funds                                   6.7%       6.5%       5.9%
--------------------------------------------------------------------------------
Net interest spread                                   4.5%       4.3%       4.6%
================================================================================
                                                     ----

      Market interest rates increased from May 2000 through December 2000 and
then declined rapidly during the rest of fiscal 2001. This resulted in an
increase in the Company's net interest spread in fiscal 2001 because of the mix
of the Company's fixed rate and variable rate receivables and debt.

      The Company monitors and manages its exposure to market interest rate
fluctuations through risk management procedures that may include using certain
derivative financial instruments such as interest rate swaps and changing the
proportion of its term versus short-term debt. The


12
<PAGE>

Company uses derivative financial instruments to hedge its exposure to interest
rate risk on certain debt obligations. The Company does not use derivatives for
speculation and the Company does not trade derivatives. The Company did not have
any derivative positions at July 31, 2001. The Company may enter into interest
rate swaps and locks and other derivative financial instruments in the future.

      At July 31, 2001, fixed rate term debt totaled $538.5 million or 53% of
total debt outstanding. The Company's other debt at July 31, 2001, comprising
commercial paper, bank borrowings, securitization financing and variable rate
term loans, reprices as follows: $444.7 million, or 91%, within one month, $34.4
million, or 7%, within the following two months and the remainder, $7.5 million,
or 2%, within the following six months.

      At July 31, 2001, $1.195 billion, or 90%, of finance receivables provided
for interest at fixed rates and $125.6 million, or 10%, of finance receivables
provided for interest at variable rates indexed to the prime rate. The Company's
finance receivables generally have original maturities ranging from two to five
years and provide for monthly installments. The Company experiences some
prepayments on its finance receivables that accelerate the scheduled maturities.
At July 31, 2001, $408.6 million of fixed rate finance receivables are scheduled
to mature within one year and the weighted average remaining term of fixed rate
finance receivables is 3.3 years.

      The total of fixed rate term debt of $538.5 million and stockholders'
equity of $206.4 million was $744.9 million at July 31, 2001. Due to the
significant excess of the Company's fixed rate finance receivables over this
amount, the Company's net interest spread could be affected by fluctuations in
market interest rates. The Company does not seek to match the maturities of its
debt to its finance receivables.

      The Company periodically calculates the effect on net earnings of a
hypothetical, immediate 100 basis point (1.0%) increase in market interest
rates. At July 31, 2001, such a hypothetical increase in market interest rates
would reduce annual net earnings by approximately $1.0 million and would reduce
the Company's net interest spread by approximately 25 basis points (0.25%). The
100 basis point increase represents a 23% increase over the weighted average
interest rate on the Company's short-term and variable rate borrowings at July
31, 2001.

      The calculated reduction in net earnings assumes the occurrence of an
adverse change in market interest rates. Actual future changes in market
interest rates may differ materially and their effect on the Company's net
earnings may also differ materially due to changes in the Company's finance
receivable and debt repricing structures. The calculation also does not take
into account the complexities that could accompany an actual immediate 100 basis
point increase in market interest rates.

NEW ACCOUNTING STANDARDS

      In August 2000, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging
Activities" and SFAS No. 138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activities." These Statements require the fair value of
derivatives to be recorded as assets or liabilities. Gains or losses resulting
from changes in the fair values of derivatives are accounted for depending on
the purpose of the derivatives and whether they qualify for hedge accounting
treatment. The adoption of SFAS No. 133 and SFAS No. 138 did not have a material
effect on the Company's earnings or financial position.

      In September 2000, the Financial Accounting Standards Board issued SFAS
No. 140, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities--a replacement of FASB Statement No. 125." SFAS
No. 140 revises the standards for accounting for securitizations and other
transfers of financial assets and collateral and requires certain additional
disclosures, but carries over most of the existing provisions of SFAS No. 125,
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities." The Company adopted SFAS No. 140 after March 31, 2001.

CHANGES IN ACCOUNTANTS

      On October 19, 2000, the Board of Directors, on the recommendation of the
Audit Committee, appointed the firm of Arthur Andersen LLP as the Company's
independent public accountants for the fiscal year ending July 31, 2001 and
dismissed Eisner & Lubin LLP ("Eisner & Lubin"). Eisner & Lubin's report on the
financial statements of the Company for the fiscal years 1999 and 2000 did not
contain any adverse opinion or disclaimer of opinion nor was it in any way
qualified or modified as to uncertainty, audit scope or accounting principles.


                                                                              13
<PAGE>

FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION
(continued)

      The decision to change accountants was recommended by management and
approved by the Audit Committee of the Board of Directors as well as the full
Board.

      During fiscal years 1999 and 2000, and the interim period preceding the
dismissal, there have been no disagreements between the Company and Eisner &
Lubin on any matter of accounting principles or practices, financial statement
disclosure or audit scope or procedure. The Company has never been advised by
Eisner & Lubin that internal controls necessary for the Company to develop
reliable financial statements do not exist or that any information has come to
the attention of Eisner & Lubin which would have caused it not to be able to
rely on management's representations or that has made Eisner & Lubin unwilling
to be associated with the financial statements prepared by management. Eisner &
Lubin has not advised the Company of any need to significantly expand the scope
of its audit or that information has come to their attention that upon further
investigation may materially impact on the fairness or reliability of a
previously issued audit report or financial statements issued or to be issued or
which would cause them to be unwilling to rely on management's representations
or be associated with the Company's financial statements.

      Eisner & Lubin has not advised the Company of any information which they
concluded materially impacts upon the fairness or reliability of either a
previously issued audit report, underlying financial statements or the financial
statements issued or to be issued since the last financial statements covered by
an audit report. Nor has Eisner & Lubin advised that they would be prevented
from rendering an unqualified audit report on any such financial statements.

FORWARD-LOOKING STATEMENTS

      Certain statements in this document may include the words or phrases "can
be," "expects," "may affect," "may depend," "believe," "estimate," "intend,"
"could," and similar words and phrases that constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Forward-looking statements
are subject to various known and unknown risks and uncertainties and the Company
cautions you that any forward-looking information provided by or on its behalf
is not a guarantee of future performance. The Company's actual results could
differ materially from those anticipated by such forward-looking statements due
to a number of factors, some of which are beyond the Company's control,
including, without limitation, (i) the ability to obtain funding on acceptable
terms, (ii) changes in the risks inherent in the Company's receivables portfolio
and the adequacy of the Company's reserves, (iii) changes in market interest
rates, (iv) changes in economic, financial, and market conditions, (v) changes
in competitive conditions and (vi) the loss of key executives or personnel.
Forward-looking statements apply only as of the date made and the Company is not
required to update forward-looking statements for subsequent or unanticipated
events or circumstances.


14
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders
Financial Federal Corporation

      We have audited the accompanying consolidated balance sheet of Financial
Federal Corporation and subsidiaries as of July 31, 2001 and the related
consolidated statements of stockholders' equity, operations and cash flows for
the year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit. The consolidated balance sheet of
Financial Federal Corporation as of July 31, 2000 and the related statements of
stockholders' equity, operations and cash flows for each of the two years in the
period ended July 31, 2000 were audited by other auditors whose report dated
August 31, 2000 expressed an unqualified opinion on those statements.

      We conducted our audit in accordance with auditing standards generally
accepted in the 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 audit provides a reasonable basis
for our opinion.

      In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Financial Federal
Corporation and subsidiaries as of July 31, 2001 and the results of its
operations and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States.


/s/ Arthur Andersen LLP

New York, New York
August 31, 2001


                                                                              15
<PAGE>

FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)

<TABLE>
<CAPTION>
                                                                                         -----------
--------------------------------------------------------------------------------------------------------------------
July 31,                                                                                     2001          2000
====================================================================================================================
<S>                                                                                      <C>            <C>
ASSETS
Finance receivables                                                                      $ 1,321,226    $ 1,137,135
Allowance for possible losses                                                                (21,938)       (19,048)
--------------------------------------------------------------------------------------------------------------------
  Finance receivables--net                                                                 1,299,288      1,118,087
Cash                                                                                          10,251          6,068
Other assets                                                                                   4,124          3,630
--------------------------------------------------------------------------------------------------------------------
      TOTAL ASSETS                                                                       $ 1,313,663    $ 1,127,785
====================================================================================================================
LIABILITIES
Senior debt:
  Long-term ($15,622 at July 31, 2001 and $37,073 at July 31, 2000
    due to related parties)                                                              $   703,584    $   608,662
  Short-term                                                                                 228,014        182,686
Subordinated debt ($2,951 at July 31, 2001 and $4,681 at July 31, 2000
  due to related parties)                                                                     93,485         93,490
Accrued interest, taxes and other liabilities                                                 53,082         43,555
Deferred income taxes                                                                         29,087         26,969
--------------------------------------------------------------------------------------------------------------------
    Total liabilities                                                                      1,107,252        955,362
--------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Preferred stock--$1 par value, authorized 5,000,000 shares                                        --             --
Common stock--$.50 par value, authorized 100,000,000 shares, shares issued: 16,540,329
  (net of 136,961 treasury shares) at July 31, 2001 and 14,958,379 at July 31, 2000            8,270          7,479
Additional paid-in capital                                                                    62,921         58,785
Warrants--issued and outstanding 1,606,500 in 2000                                                --             29
Retained earnings                                                                            135,220        106,130
--------------------------------------------------------------------------------------------------------------------
    Total stockholders' equity                                                               206,411        172,423
--------------------------------------------------------------------------------------------------------------------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                         $ 1,313,663    $ 1,127,785
====================================================================================================================
                                                                                         -----------
</TABLE>

The notes to consolidated financial statements are made a part hereof.


16
<PAGE>

FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Dollars and Share Amounts In Thousands)

<TABLE>
<CAPTION>
                                                     Common Stock--$.50 Par Value
                                                ------------------------------------
                                                Number                     Additional
                                                  of                        Paid-in                   Retained
                                                Shares       Par Value      Capital      Warrants     Earnings
================================================================================================================
<S>                                              <C>          <C>           <C>            <C>        <C>
Balance at August 1, 1998                        14,843       $ 7,421       $ 57,869       $ 29       $  57,910
  Repurchases of common stock                       (99)          (49)          (572)                    (1,100)
  Exercise of stock options                         116            58            796
  Tax benefit relating to stock options                                           22
  Net earnings                                                                                           22,598
----------------------------------------------------------------------------------------------------------------
Balance at July 31, 1999                         14,860         7,430         58,115         29          79,408
  Exercise of stock options                          98            49            653
  Other                                                                           17
  Net earnings                                                                                           26,722
----------------------------------------------------------------------------------------------------------------
Balance at July 31, 2000                         14,958         7,479         58,785         29         106,130
  Exercise of warrants                            1,607           803          3,723        (29)
  Exercise of stock options                         112            56          1,003
  Common stock received in connection with
    exercise of warrants (held in treasury)        (137)          (68)          (789)                    (2,526)
  Restricted stock                                                                76
  Other                                                                          123
  Net earnings                                                                                           31,616
----------------------------------------------------------------------------------------------------------------
BALANCE AT JULY 31, 2001                         16,540       $ 8,270       $ 62,921       $  0       $ 135,220
================================================================================================================
</TABLE>

The notes to consolidated financial statements are made a part hereof.


                                                                              17
<PAGE>

FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars In Thousands, Except Per Share Amounts)

<TABLE>
<CAPTION>
                                                            ---------
-----------------------------------------------------------------------------------------------
Years Ended July 31,                                          2001         2000         1999
===============================================================================================
<S>                                                         <C>          <C>          <C>
Finance income                                              $ 138,278    $ 111,513    $ 89,118
Interest expense                                               64,397       52,205      39,169
-----------------------------------------------------------------------------------------------
  Net finance income before provision for possible losses
    on finance receivables                                     73,881       59,308      49,949
Provision for possible losses on finance receivables            4,975        3,450       3,100
-----------------------------------------------------------------------------------------------
  Net finance income                                           68,906       55,858      46,849
Gain on debt retirement                                            --          764         685
Salaries and other expenses                                   (17,139)     (12,990)    (10,705)
-----------------------------------------------------------------------------------------------
  Earnings before income taxes                                 51,767       43,632      36,829
Provision for income taxes                                     20,151       16,910      14,231
-----------------------------------------------------------------------------------------------
  NET EARNINGS                                              $  31,616    $  26,722    $ 22,598
===============================================================================================
EARNINGS PER COMMON SHARE:
  Diluted                                                   $    1.75    $    1.52    $   1.30
===============================================================================================
  Basic                                                     $    1.99    $    1.79    $   1.52
===============================================================================================
                                                            ---------
</TABLE>

The notes to consolidated financial statements are made a part hereof.


18
<PAGE>

FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars In Thousands)

<TABLE>
<CAPTION>
                                                                  ---------
------------------------------------------------------------------------------------------------------
Years Ended July 31,                                                2001         2000         1999
======================================================================================================
<S>                                                               <C>          <C>          <C>
Cash flows from operating activities:
  Net earnings                                                    $  31,616    $  26,722    $  22,598
  Adjustments to reconcile net earnings to net cash provided by
    operating activities:
      Provision for possible losses on finance receivables            4,975        3,450        3,100
      Depreciation and amortization                                   9,487        7,419        6,140
      Deferred income taxes                                           2,118        4,708        6,144
      Gain on debt retirement                                            --         (764)        (685)
      Decrease (increase) in other assets                              (304)         587          187
      Increase in accrued interest, taxes and other liabilities       9,527       14,055        5,560
------------------------------------------------------------------------------------------------------
        Net cash provided by operating activities                    57,419       56,177       43,044
------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
  Finance receivables originated                                   (735,705)    (719,194)    (689,718)
  Finance receivables collected                                     540,533      523,111      507,364
  Other                                                                (605)        (449)        (362)
------------------------------------------------------------------------------------------------------
        Net cash used in investing activities                      (195,777)    (196,532)    (182,716)
------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
  Commercial paper--maturities 90 days or less (net)               (185,479)      62,628      (29,949)
  Commercial paper--maturities greater than 90 days:
    Proceeds                                                        143,330       87,762       96,360
    Repayments                                                     (149,870)     (98,044)     (94,135)
  Bank borrowings--net proceeds (repayments)                        100,210      (22,150)      62,570
  Proceeds from asset securitization financing                      125,000           --           --
  Repurchases of convertible subordinated notes                          --       (3,536)      (3,815)
  Proceeds from senior term notes                                   143,000      132,000      115,000
  Repayments of senior term notes                                   (35,000)     (25,000)          --
  Variable rate senior notes--net proceeds (repayments)                (941)       6,500       (2,726)
  Repurchases of common stock                                            --           --       (1,721)
  Proceeds from exercise of warrants                                  1,114           --           --
  Proceeds from exercise of stock options                             1,059          702          854
  Other                                                                 118           17           22
------------------------------------------------------------------------------------------------------
        Net cash provided by financing activities                   142,541      140,879      142,460
------------------------------------------------------------------------------------------------------
NET INCREASE IN CASH                                                  4,183          524        2,788
Cash--beginning of year                                               6,068        5,544        2,756
-----------------------------------------------------------------------------------------------------
CASH--END OF YEAR                                                 $  10,251    $   6,068    $   5,544
======================================================================================================
Supplemental disclosures of cash flow information:
  Interest paid                                                   $  61,778    $  49,544    $  38,519
======================================================================================================
  Income taxes paid                                               $  19,096    $   9,648    $   6,660
======================================================================================================
                                                                  ---------
</TABLE>

The notes to consolidated financial statements are made a part hereof.


                                                                              19
<PAGE>

FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, Except Per Share Amounts)

NOTE A: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Principles of Consolidation--The consolidated financial statements include
the accounts of Financial Federal Corporation ("Financial") and its
subsidiaries, Financial Federal Credit Inc. ("Credit"), First Federal Commercial
Inc. and Financial Federal Commercial Inc. (collectively the "Company").
Intercompany accounts and transactions have been eliminated.

(2) Description of Business--The Company provides collateralized lending,
financing and leasing services nationwide to primarily middle-market commercial
enterprises in the general construction, road and infrastructure construction
and repair, manufacturing, road transportation and waste disposal industries.
The Company lends against, finances and leases a wide range of revenue-producing
equipment such as cranes, earth movers, machine tools, personnel lifts, trailers
and trucks.

      Finance receivables comprise loans and other financings and noncancelable
leases. All leases are accounted for as direct financing leases, where total
lease payments, plus residual values, less the cost of the leased equipment is
recorded as unearned finance income. Residual values are recorded 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) the
estimated fair value of the equipment at the end of the lease.

(3) Income Recognition--Finance income is recognized over the term of
receivables using the interest method. Income recognition is suspended on
finance receivables that are considered impaired (full collection of principal
and interest being doubtful) by management. This typically occurs when (i) a
contractual payment is more than 120 days past due, (ii) the counterparty
becomes the subject of a bankruptcy proceeding or (iii) the underlying
collateral is being liquidated. Income recognition may be resumed on impaired
receivables when management believes that full collection of all amounts
contractually due is probable. Any collections on impaired receivables are first
applied to the recorded investment.

(4) Allowance for Possible Losses--A general provision for possible losses on
finance receivables is charged against income in an amount to increase the
allowance for possible losses to a level that management considers appropriate.
Management periodically reviews the allowance giving consideration to present
and anticipated national and regional economic conditions, industry conditions,
concentrations, the status of the finance receivables, the financial condition
of counterparties and other factors.

Write-downs are charged against the allowance for possible losses and subsequent
recoveries of write-downs are credited to the allowance. Impaired receivables
are written down to the underlying collateral's current estimated net
liquidation value. Assets received to satisfy finance receivables are also
written down to their current estimated net liquidation value.

(5) Income Taxes--Deferred tax assets and liabilities are recognized for the
estimated future tax effects of temporary differences between the financial
statement and tax return bases of assets and liabilities using enacted tax
rates. Deferred tax expense represents the net change in deferred tax assets and
liabilities during the year.

(6) Earnings Per Common Share--Basic earnings per share is net earnings divided
by the weighted average number of common shares outstanding during the period.
Diluted earnings per share is net earnings plus the after-tax interest cost of
dilutive convertible debt, divided by the weighted average number of common
shares outstanding during the period plus potential common shares from the
assumed conversion of dilutive securities outstanding during the period.
Dilutive securities comprise stock options, warrants and convertible
subordinated notes.

(7) Derivative Financial Instruments--Derivative financial instruments are used
by the Company to hedge its exposure to the effects of fluctuations in market
interest rates on its debt. The Company does not use derivatives for speculation
and the Company does not trade in derivatives. Derivatives used include interest
rate swaps and locks. The net interest differentials on interest rate swaps were
recorded as an adjustment to interest expense as incurred. The cash settlements
on interest rate locks were deferred and are being amortized over the terms of
the underlying hedged debt obligations.  The Company had no derivative financial
instruments at July 31, 2001.


20
<PAGE>

      In August 2000, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging
Activities" and SFAS No. 138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activities." These Statements require the fair value of
derivatives to be recorded as assets or liabilities. Gains or losses resulting
from changes in the fair values of derivatives are accounted for depending on
the purpose of the derivatives and whether they qualify for hedge accounting
treatment. The adoption of SFAS No. 133 and SFAS No. 138 did not have a material
effect on the Company's earnings or financial position.

(8) Use of Estimates--The consolidated financial statements and the notes
thereto were prepared in accordance with generally accepted accounting
principles which require estimates and assumptions to be made by management that
affect the amounts reported therein. Actual results could differ from those
estimates.

(9) In September 2000, the Financial Accounting Standards Board issued SFAS No.
140, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities--a replacement of FASB Statement No. 125." SFAS
No. 140 revises the standards for accounting for securitizations and other
transfers of financial assets and collateral and requires certain additional
disclosures, but carries over most of the existing provisions of SFAS No. 125,
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities." The Company adopted SFAS No. 140 after March 31, 2001.

NOTE B: FINANCE RECEIVABLES

(1) Finance receivables comprise installment sale agreements and secured loans
(including line of credit arrangements), collectively referred to as loans, that
provide for interest at fixed rates, or variable rates generally indexed to the
prime rate (as defined) and investments in direct financing leases, as follows:

                                                  ----------
--------------------------------------------------------------------------------
July 31,                                             2001                2000
================================================================================
Loans:
  Fixed rate                                      $  842,745          $  673,791
  Variable rate                                      118,038             111,019
--------------------------------------------------------------------------------
    Total                                            960,783             784,810
Direct financing leases                              360,443             352,325
--------------------------------------------------------------------------------
      Finance receivables                         $1,321,226          $1,137,135
================================================================================
                                                  ----------

      The approximate weighted average interest rates on fixed rate loans were
10.7% and 10.2% at July 31, 2001 and 2000, respectively.

(2) Direct financing leases comprised the following:

                                                   ---------
--------------------------------------------------------------------------------
July 31,                                              2001               2000
================================================================================
Minimum lease payments receivable                  $ 369,950          $ 362,177
Residual values                                       62,743             61,587
Unearned finance income                              (72,250)           (71,439)
--------------------------------------------------------------------------------
  Direct financing leases                          $ 360,443          $ 352,325
===============================================================================
                                                   ---------

(3) Finance receivables generally provide for monthly installments of equal or
varying amounts for terms of two to five years. Annual contractual maturities of
finance receivables at July 31, 2001 are as follows:

--------------------------------------------------------------------------------
                                                                         Direct
                                   Fixed             Variable          Financing
                                 Rate Loans         Rate Loans           Leases
================================================================================
2002                              $293,088           $ 46,589           $135,285
2003                               237,228             30,072            104,877
2004                               174,643             21,870             73,266
2005                                94,098             12,871             40,002
2006                                30,308              4,729             13,236
Thereafter                          13,380              1,907              3,284
--------------------------------------------------------------------------------
  Total                           $842,745           $118,038           $369,950
================================================================================

(4) The activity of the allowance for possible losses is summarized as follows:

                                   --------
--------------------------------------------------------------------------------
Year Ended July 31,                  2001              2000              1999
================================================================================
Balance--August 1                  $ 19,048          $ 16,202          $ 13,330
  Provision                           4,975             3,450             3,100
  Write-downs                        (4,170)           (2,342)           (1,125)
  Recoveries                          2,085             1,738               897
--------------------------------------------------------------------------------
Balance--July 31                   $ 21,938          $ 19,048          $ 16,202
================================================================================
                                   --------

(5) Non-performing assets were $34,389 (includes $19,420 of impaired loans) at
July 31, 2001 and $16,169 (includes $7,273 of impaired loans) at July 31, 2000.
Non-performing assets include finance receivables classified as non-accrual
(income recognition has been suspended) and assets received to satisfy finance
receivables. The average recorded investment in impaired loans was $12,192 in
2001 and $5,417 in 2000. Impaired loans exclude direct financing leases.


                                                                              21
<PAGE>

FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, Except Per Share Amounts) (continued)

(6) The Company also provides commitments to extend credit. These commitments
contain off-balance sheet risk. The Company uses the same credit policies and
procedures in making these commitments as it does for finance receivables, as
the credit risks are substantially the same. At July 31, 2001 and 2000, the
unused portion of these commitments was $4,086 and $6,792, respectively.

NOTE C: DEBT

      Debt is summarized as follows:

                                                     ----------
--------------------------------------------------------------------------------
July 31,                                                2001              2000
================================================================================
Senior debt:
  Fixed rate term notes:
    5.90%-6.98% due 2002-2008                        $  170,000         $160,000
    7.05%-7.73% due 2003-2004                           170,000          120,000
    8.50%-8.89% due 2003-2005                           105,000           67,000
--------------------------------------------------------------------------------
      Total fixed rate term notes                       445,000          347,000
  Variable rate term notes due
    2002-2003                                            73,721           64,662
--------------------------------------------------------------------------------
      Total term notes                                  518,721          411,662
  Commercial paper                                      143,817          335,836
  Bank borrowings                                       144,060           43,850
  Asset securitization financing                        125,000               --
--------------------------------------------------------------------------------
      Total senior debt                                 931,598          791,348
--------------------------------------------------------------------------------
Subordinated debt:
  4.5% convertible subordinated
    notes due 2005                                       91,195           91,200
  8.0% subordinated debentures
    due 2003                                              2,290            2,290
--------------------------------------------------------------------------------
      Total subordinated debt                            93,485           93,490
--------------------------------------------------------------------------------
        Total debt                                   $1,025,083         $884,838
================================================================================
                                                     ----------

(1) The senior term notes were issued by Credit. Interest on fixed rate term
notes is generally payable semi-annually. Interest rates on variable rate term
notes are indexed to either LIBOR or domestic money market rates and generally
reprice between thirty and ninety days. Prepayments of the fixed rate notes are
generally subject to a premium based on yield maintenance formulas.

      In September 2000, Credit established a $200,000 Medium Term Note Program
and subsequently issued $103,000 of fixed rate term notes thereunder. At July
31, 2001, $97,000 was available for future issuances of term notes.

(2) The Company issues commercial paper with a maximum term of 270 days. The
weighted average interest rates on commercial paper outstanding at July 31, 2001
and 2000 were 4.2% and 6.8%, respectively.

(3) At July 31, 2001, Credit had $460,000 of committed unsecured revolving
credit facilities with various banks expiring as follows: $275,000 within one
year and $185,000 on various dates from December 2002 through May 2006. Credit
generally incurs a fee on the unused portion of these facilities.

      Borrowings under these credit facilities, $144,060 at July 31, 2001,
generally mature between one and ninety days and bear interest based on domestic
money market rates or LIBOR, at Credit's option. The weighted average interest
rates on borrowings outstanding at July 31, 2001 and 2000 were 4.4% and 7.2%,
respectively.

(4) Credit established a $125,000 revolving asset securitization facility in
July 2001. Based on the terms of the facility, proceeds received from
securitized finance receivables are accounted for as secured borrowings, as
opposed to sales of assets, for financial reporting purposes. Therefore,
securitized finance receivables remain on the Company's Consolidated Balance
Sheet.

      Outstanding borrowings are limited to a minimum level of securitized
receivables. When borrowings exceed the minimum level, Credit has the option to
repay the excess or to securitize additional receivables. Credit can securitize
additional receivables during the one-year term of the facility. If the facility
is not renewed at the end of the one-year term, Credit has the option to repay
borrowings outstanding or to convert them into term debt. The term debt would be
repaid monthly based on amounts collected from securitized receivables. Credit
currently intends to exercise the conversion option. Based on the expected
collections from securitized receivables at July 31, 2001, the term debt would
be fully repaid by July 2004.

      At July 31, 2001, finance receivables in the accompanying consolidated
balance sheet included $166,580 of securitized receivables and the interest rate
on outstanding borrowings was 4.0%. The interest rate reprices monthly.


22
<PAGE>

(5) The 4.5% convertible subordinated notes were issued by Financial and are due
May 1, 2005. The notes are convertible into shares of the Company's common
stock, at any time prior to maturity, at a conversion price of $30.15625 per
share. Financial can call the notes at a 2.57% premium that decreases 25%
annually commencing May 1, 2002. Interest on the notes is payable semi-annually.
The notes are subordinated in right of payment to all existing and future senior
indebtedness, as defined. In 2001, a holder converted $5 of these notes into the
Company's common stock. Financial repurchased $4,300 principal amount of these
notes in 2000 for $3,536 and $4,500 principal amount of these notes in 1999 for
$3,815.

(6) The 8.0% subordinated debentures mature March 1, 2003 with interest payable
semi-annually. The debentures are subordinated to senior debt and other debt
designated by the Board of Directors and to certain other liabilities as
provided for in the debentures.

(7) Credit's debt agreements contain certain restrictive covenants including
limitations on indebtedness, encumbrances, dividends to Financial, capital
expenditures, minimum net worth, interest coverage and sales of assets.

(8) At July 31, 2001, long-term senior debt (includes commercial paper and bank
borrowings supported by credit facilities expiring after one year and the
long-term portion of the securitization financing) and subordinated debt are due
as follows: $369,074 in 2003, $236,800 in 2004, $171,195 in 2005, $15,000 in
2006 and $5,000 in 2008.

(9) Related party debt decreased in 2001 because certain holders of the
Company's senior and subordinated debt ceased to be classified as related
parties due to changes in stock ownership and the passing of the Company's then
Chairman of the Board in November 2000. Related parties include officers,
directors and their affiliates.

NOTE D: DERIVATIVE FINANCIAL INSTRUMENTS

      During 2000 and 1999, the Company entered into interest rate swaps and
interest rate lock agreements with other financial institutions as a hedge
against increases in market interest rates on issued term debt in the case of
swaps and planned issues of term debt in the case of locks. The interest rate
swaps allowed the Company to issue variable rate term debt and effectively
convert the debt into fixed rate term debt at rates that were lower than those
otherwise obtainable on direct fixed rate term debt. The Company used interest
rate locks to effectively "lock-in" the then current base rates for term debt
planned to be issued generally within six months.

      The interest rate locks settled in 2000 and 1999 and the interest rate
swaps expired in 2001. At July 31, 2000, the Company had interest rate swaps
with a total notional amount of $25,000, weighted average receive and pay rates
of 7.0% and 5.2%, respectively, and a weighted average remaining term of five
months. The use of derivatives decreased interest expense by $65 in 2001 and
$110 in 2000 and increased interest expense by $73 in 1999.

NOTE E: STOCKHOLDERS' EQUITY

      In December 2000, the Company and the majority of its warrant holders
amended the warrant agreements for the purchase of the Company's common stock.
The amendment permitted the warrant holders to exercise their warrants with
previously owned common stock of the Company in lieu of cash at the holders'
option.

      During the quarter ended January 31, 2001, after the amendment, all of the
Company's 1,607 outstanding warrants were exercised. The total proceeds to the
Company were $4,497 (1,125 warrants at an exercise price of $2.83 per warrant
and 482 warrants at an exercise price of $2.72 per warrant). The Company
received $1,114 and 137 shares of its common stock at an average market value of
$24.70 per share. At July 31, 2001, the Company held the 137 shares in treasury.

      The Company established a common stock repurchase program in August 1996
and expanded the program in August 1998 to include repurchases of its
convertible subordinated notes. Through July 31, 2001, the Company has acquired
360 shares of common stock and $8,800 principal amount of convertible
subordinated notes. At July 31, 2001, $6,617 was available under the program for
future repurchases.

NOTE F: STOCK OPTIONS

      The Company's 1998 stock option plan (the "1998 Plan") was approved by the
Company's stockholders in December 1998. The 1998 Plan provides for 2,500
incentive or non-qualified stock options to be granted to officers, other
employees and directors of the Company and expires


                                                                              23
<PAGE>

FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, Except Per Share Amounts) (continued)

in September 2008. The Company's prior stock option plan expired in September
1999. Under both plans, the exercise price of an incentive stock option may not
be less than the fair market value of the common stock on the date granted and
the maximum term of an option is ten years.

      Options outstanding at July 31, 2001 were generally granted with terms of
five, six or ten years and generally vest (become exercisable) over periods of
four to seven years. At July 31, 2001, 1,815 shares of common stock were
available for future grants of options.

      Stock option activity and related information is summarized as follows:

--------------------------------------------------------------------------------
                                                                        Weighted
                                                                         Average
                                                          Number of     Exercise
                                                           Options        Price
================================================================================
Outstanding at August 1, 1998                                 726        $12.80
  Granted                                                     200         18.63
  Exercised                                                  (116)         7.31
  Canceled                                                     (8)        18.68
-------------------------------------------------------------------
Outstanding at July 31, 1999                                  802         15.00
  Granted                                                     350         18.63
  Exercised                                                   (98)         7.16
  Canceled                                                    (14)        18.32
-------------------------------------------------------------------
Outstanding at July 31, 2000                                1,040         16.92
  Granted                                                     661         23.32
  Exercised                                                  (135)        11.75
  Canceled                                                     (8)        19.46
===================================================================
Outstanding at July 31, 2001                                1,558         20.06
-------------------------------------------------------------------
Exercisable at July 31:
  2001                                                        375        $17.05
  2000                                                        360         15.66
  1999                                                        167          8.19

      The Company adopted the disclosure-only provisions of SFAS 123,
"Accounting for Stock-Based Compensation," and continues to apply Accounting
Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued to
Employees," and related Interpretations in accounting for its stock options.
Under APB 25, compensation expense is not required to be recorded if the
exercise price of stock options granted is at least equal to the market price of
the stock on the grant date.

      The exercise prices of options outstanding at July 31, 2001 ranged from
$7.89 to $25.15. Additional information by price range follows:

--------------------------------------------------------------------------------
                                                             Price Range
--------------------------------------------------------------------------------
                                                       Over $18        Under $12
================================================================================
Outstanding:
  Number                                                   1,384             174
  Weighted average exercise price                         $21.36           $9.77
  Weighted average remaining
    contractual life (in years)                              5.2             1.6
Exercisable:
  Number                                                     274             101
  Weighted average exercise price                         $19.57          $10.22

      Pro forma amounts of net earnings and earnings per share, determined as if
compensation expense attributable to stock options had been recognized using the
fair value method under SFAS 123, follow:

                                                   -------
--------------------------------------------------------------------------------
Year Ended July 31,                                  2001       2000       1999
================================================================================
Net earnings                                       $29,825    $25,394    $21,706
Earnings per share:
  Diluted                                          $  1.67    $  1.46    $  1.26
  Basic                                            $  1.88    $  1.70    $  1.46
                                                   -------

      The Company estimated the following weighted average grant date fair
values for options granted using the Black-Scholes option-pricing model based on
the following assumptions:

                                                    -----
--------------------------------------------------------------------------------
Year Ended July 31,                                 2001       2000       1999
================================================================================
Weighted average grant date
  fair value                                        $8.88      $7.46      $7.08
Assumptions:
  Weighted average risk-free
    interest rate                                     4.8%       5.9%       4.6%
  Expected stock price
    volatility rate                                    37%        35%        29%
  Weighted average expected
    life of options granted
    in years                                          4.5        4.8        6.0
                                                    -----

      In February 2001, the Company awarded 55,500 shares of restricted stock to
certain of its senior officers. The shares vest ratably over four years. The
market value of the shares when awarded was $28.70 per share. Compensation
expense of $166 was recorded in 2001 for the award.


24
<PAGE>

NOTE G: EARNINGS PER COMMON SHARE

      Earnings per common share was calculated as follows:

                                               -------
--------------------------------------------------------------------------------
Year Ended July 31,                              2001         2000        1999
================================================================================
Net earnings (used for basic
  earnings per share)                          $31,616      $26,722      $22,598
Effect of convertible securities                 2,883        2,948        3,066
--------------------------------------------------------------------------------
Adjusted net earnings (used for
  diluted earnings per share)                  $34,499      $29,670      $25,664

Weighted average common
  shares outstanding (used for
basic earnings per share)                       15,895       14,895       14,860
Effect of dilutive securities:
  Convertible notes                              3,024        3,095        3,237
  Warrants                                         542        1,375        1,400
  Stock options                                    302          206          314
--------------------------------------------------------------------------------
Adjusted weighted average
  common shares and assumed
  conversions (used for diluted
  earnings per sha)                             19,763       19,571       19,811
================================================================================
Net earnings per common share:
  Diluted                                      $  1.75      $  1.52      $  1.30
================================================================================
  Basic                                        $  1.99      $  1.79      $  1.52
================================================================================
                                               -------

NOTE H: INCOME TAXES

(1) The provision for income taxes comprised the following:

                                               -------
--------------------------------------------------------------------------------
Year Ended July 31,                              2001         2000         1999
================================================================================
Currently payable:
  Federal                                      $15,223      $10,563      $ 7,044
  State                                          2,810        1,639        1,043
--------------------------------------------------------------------------------
    Total                                       18,033       12,202        8,087
Deferred                                         2,118        4,708        6,144
--------------------------------------------------------------------------------
    Provision for income taxes                 $20,151      $16,910      $14,231
================================================================================
                                               -------

(2) Income taxes computed at statutory federal rates are reconciled to the
provision for income taxes as follows:

                                               -------
--------------------------------------------------------------------------------
Year Ended July 31,                              2001         2000         1999
================================================================================
Federal income tax at
  statutory rates                              $18,118      $15,271      $12,890
State taxes (net of federal
  income tax benefit)                            2,033        1,639        1,341
--------------------------------------------------------------------------------
    Provision for income taxes                 $20,151      $16,910      $14,231
================================================================================
                                               -------

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

                                                    --------
--------------------------------------------------------------------------------
July 31,                                              2001               2000
================================================================================
Deferred tax liabilities:
  Leasing transactions                              $ 34,013           $ 32,209
  Finance income and other                             5,323              3,955
--------------------------------------------------------------------------------
    Total                                             39,336             36,164
--------------------------------------------------------------------------------
Deferred tax assets:
  Allowance for possible losses                       (8,505)            (7,369)
  Other liabilities                                   (1,744)            (1,826)
--------------------------------------------------------------------------------
    Total                                            (10,249)            (9,195)
--------------------------------------------------------------------------------
      Deferred income taxes                         $ 29,087           $ 26,969
================================================================================
                                                    --------

NOTE I: LEASE COMMITMENTS

      The Company occupies office space under leases expiring through 2007. At
July 31, 2001, minimum future annual rentals due under these leases are $933 in
2002, $752 in 2003, $594 in 2004, $415 in 2005, $355 in 2006 and $84 thereafter.
Office rent expense was $1,208 in 2001, $1,012 in 2000 and $836 in 1999.

NOTE J: CONCENTRATION OF CREDIT RISK

      The Company manages its exposure to the credit risk associated with its
finance receivables through established credit policies and procedures that
include obtaining a first lien on equipment collateral on each transaction. The
Company evaluates equipment collateral on an ongoing basis and focuses on
lending against, financing and leasing equipment collateral that has an economic
life exceeding the term of the receivable, is not subject to rapid technological
obsolescence, has applications in multiple industries, is easily accessible and
movable and has a broad resale market. The Company may also obtain additional
equipment or other collateral, third party guarantees and/or hold back a portion
of the amount financed.

      Concentrations of credit risk arise when counterparties have similar
economic characteristics that would cause their ability to meet contractual
obligations to be similarly affected by changes in economic or other conditions.
The Company does not have a significant concentration of credit risk with any
counterparty. The major concentrations


                                                                              25
<PAGE>

FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, Except Per Share Amounts) (continued)

of credit risk, grouped by the industries and geographic regions of
counterparties, expressed as a percentage of finance receivables, follow:

                                                           ----
--------------------------------------------------------------------------------
July 31,                                                   2001             2000
================================================================================
Industry:
  Construction related                                      39%              41%
  Road transportation                                       28               25
  Waste services                                            14               14
  Manufacturing                                             12               13
Geographic region:
  Southeast                                                 32%              29%
  Northeast                                                 21               22
  Southwest                                                 18               19
                                                           ----

NOTE K: FAIR VALUES OF FINANCIAL INSTRUMENTS

      The Company's financial instruments comprise cash, finance receivables
(excluding leases), commitments to extend credit, debt and interest rate swaps.
The following methods were used to estimate the fair value of these financial
instruments.

      The carrying values of cash, commercial paper, bank borrowings, the asset
securitization financing and interest rate swaps approximated their fair values
based on their short-term maturities.

      The fair value of the senior term notes was approximately $524,800 and
$403,300 at July 31, 2001 and 2000, respectively. These fair value computations
were based on the future cash flows of the senior term notes discounted at
current rates for debt with similar terms and maturities.

      The fair value of the 4.5% convertible subordinated notes approximated
their carrying value at July 31, 2001 and was approximately $73,200 at July 31,
2000 based on their quoted market prices. The carrying value of the 8.0%
subordinated debentures was estimated to approximate their fair value at July
31, 2001 and 2000 based on their future cash flows discounted at current rates
for debt with a similar term and maturity.

      It is not practicable for the Company to estimate the fair value of its
finance receivables and commitments to extend credit. These financial
instruments comprise a substantial number of transactions with commercial
obligors in numerous industries, are secured by liens on various types of
equipment and may be guaranteed by third parties. Any difference between the
carrying value and the fair value of each transaction would be affected by a
potential buyer's assessment of the transaction's credit quality, collateral
value, third party guarantee(s), payment history, yield, maturity, documentation
and other legal matters, and many other subjective considerations of the buyer.
In addition, the value received in a fair market sale of a transaction would be
based on the terms of the sale, the documentation governing such sale, the
Company's and the buyer's views of general economic conditions, industry
dynamics, the Company's and the buyer's tax considerations, and numerous other
factors.

NOTE L: SELECTED QUARTERLY DATA (UNAUDITED)

                                       -----------------------------------------
                                                              Earnings per Share
--------------------------------------------------------------------------------
                                       Revenues  Net Earnings  Diluted     Basic
================================================================================
Fiscal 2001, three months ended:
  October 31, 2000                     $33,093      $7,272      $0.41      $0.49
  January 31, 2001                      34,760       7,730       0.43       0.49
  April 30, 2001                        34,825       8,010       0.44       0.49
  July 31, 2001                         35,600       8,604       0.47       0.52

Fiscal 2000, three months ended:
  October 31, 1999                     $25,420      $6,240      $0.36      $0.42
  January 31, 2000                      26,667       6,747       0.38       0.45
  April 30, 2000                        28,194       6,838       0.39       0.46
  July 31, 2000                         31,232       6,897       0.39       0.46


26
<PAGE>

FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES
STOCK PRICE HISTORY AND DIVIDEND POLICY

      The Company's common stock is traded on the New York Stock Exchange under
the symbol "FIF." The quarterly high and low closing sales prices per share of
the common stock as reported by the New York Stock Exchange follow:

                                               ---------------
                                               ---------------------------------
                                                 Fiscal 2001       Fiscal 2000
--------------------------------------------------------------------------------
                                                High      Low     High      Low
================================================================================
First Quarter ended October 31                 $24.19   $18.50   $23.69   $18.38
Second Quarter ended January 31                $27.50   $21.38   $22.94   $17.50
Third Quarter ended April 30                   $29.60   $23.60   $19.38   $16.50
Fourth Quarter ended July 31                   $28.99   $22.49   $21.69   $17.38
                                               ---------------

      The Company presently has no intention of paying cash dividends in the
foreseeable future.


                                                                              27
<PAGE>

FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES
CORPORATE DIRECTORY

OFFICERS

Paul R. Sinsheimer
Chief Executive Officer
and President

John V. Golio
Executive Vice President

Daniel J. McDonough
Executive Vice President

Michael C. Palitz
Executive Vice President
and Treasurer

William M. Gallagher
Senior Vice President

Troy H. Geisser
Senior Vice President and Secretary

Steven F. Groth
Senior Vice President and
Chief Financial Officer

Thomas P. Kehrer
Senior Vice President

Jeanne McDonald
Senior Vice President

Angelo G. Garubo
Vice President and General Counsel

Julian C. Green, Jr.
Vice President

David H. Hamm
Vice President and Controller

Ted Wooldridge
Vice President

OFFICERS OF SUBSIDIARIES ONLY

Senior Vice President

Michael L. Leonard

Vice Presidents

John D. Crum
William J. Flaherty
J. D. Magness
W. J. Mattocks
James H. Mayes, Jr.
Kevin T. McGinn
Michael A. Nelson
Gary L. Pace
Donald G. Pokorny
Nicholas R. Roberto
Rodney S. Sepulvado
Len T. Spragins, III
Lawrence Wyluda

Administrative Vice Presidents

Donna L. Frate
Thomas G. Kassakatis
Kimberly P. Walter

Regional Vice Presidents

Patrick Armbrister
Gary Barnes
Kenneth Blackman
Linda Brown
Johnie E. Christ
Bryan D. Cunningham
M. R. Escamilla
James D. Esposito
Thomas A. Fahl
Gary S. Fisher
Thomas J. Inserno
Howard L. Jester, Jr.
James M. Keesee
Laurence F. Kimmel
Gregory D. Lile
Thomas E. Myers
William R. Pritchett
James R. Scappi
Mark A. Scott
William K. Toon
Thomas L. Tornee

Assistant Vice Presidents

Terrill E. Carter
Harry Cassady
Barbara A. Constantino
James J. Grant
Robert Grawl, Jr.
Chris L. Jones
Edward J. Keller
Vance Neathery, Jr.
Andrew G. Remias
Marc S. Wilder

Assistant Treasurers

Sheri A. Hudson
Randall W. Silver

Assistant Secretaries

Jennifer D. Allman-Schultz
Anthony Cornacchia
James R. Hicks
Julie A. Jones
Brian J. Kerrins
Christopher T. Messer
Steven R. Miller
Geoffrey A. Sprigle
Gregory R. Treichler
James M. Woods

Assistant Controller

Georgia A. Radley

28
<PAGE>


FINANCIAL FEDERAL CORPORATION AND SUBSIDIARIES
CORPORATE DIRECTORY
(continued)

DIRECTORS

Lawrence B. Fisher
Partner
Orrick, Herrington & Sutcliffe LLP
Attorneys

William C. MacMillen, Jr.
President
William C. MacMillen & Co., Inc.
Investment Bankers

Bernard G. Palitz
President
Gregory Capital Corporation
Investments

Michael C. Palitz
Executive Vice President and Treasurer
Financial Federal Corporation

Thomas F. Robards
Chief Financial Officer
Datek Online Holdings Corp.

Paul R. Sinsheimer
Chairman of the Board and
Chief Executive Officer
Financial Federal Corporation

H. E. "Tim" Timanus, Jr.
President and
Chief Operating Officer
Prosperity Bank

LOCATIONS

Headquarters
733 Third Avenue
New York, NY 10017
(212) 599-8000

Full Service Operations Centers
1300 Post Oak Boulevard
Houston, TX 77056
(713) 439-1177

4225 Naperville Road
Lisle, IL 60532
(630) 986-3900

300 Frank W. Burr Boulevard
Teaneck, NJ 07666
(201) 801-0300

201 McCullough Drive
Charlotte, NC 28262
(704) 549-1009

4500 Mall Boulevard
Union City, GA 30291
(770) 774-7060

7 Corporate Park
Irvine, CA 92612
(949) 757-1232

Website
www.financialfederal.com

SECURITIES LISTINGS

Common stock
New York Stock Exchange
Symbol FIF

Convertible subordinated notes
New York Stock Exchange

TRANSFER AGENTS
AND REGISTRARS

Common stock
The Bank of New York
New York, NY

Convertible subordinated notes
Bank One, N.A.
New York, NY

ANNUAL MEETING

The annual meeting of shareholders will be held at 270 Park Avenue, New York, NY
on December 11, 2001 at 10 a.m. Eastern Time.

CORPORATE INFORMATION

For a copy of Form 10-K or other information about the Corporation contact:

Investor Relations
Financial Federal Corporation
733 Third Avenue
New York, NY 10017
(212) 599-8000
investorrelations@financialfederal.com

Designed by Curran & Connors, Inc. / www.curran-connors.com
<PAGE>



Financial Federal Corporation
733 Third Avenue
New York, NY 10017