<PAGE>   1

--------------------------------------------------------------------------------
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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-Q

<TABLE>
<C>               <S>
   (MARK ONE)
      [X]         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                  THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001

                                               OR

      [  ]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                  THE SECURITIES EXCHANGE ACT OF 1934
</TABLE>

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

                         COMMISSION FILE NUMBER 0-30776

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

                             ANC RENTAL CORPORATION
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                       <C>
                DELAWARE                      65-0957875
    (State or other Jurisdiction of        (I.R.S. Employer
     Incorporation or Organization)       Identification No.)

       200 SOUTH ANDREWS AVENUE,                33301
        FORT LAUDERDALE, FLORIDA              (Zip Code)
(Address of principal executive offices)
</TABLE>

                                 (954) 320-4000
              (Registrant's telephone number, including area code)

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

     As of April 30, 2001, the registrant had outstanding 45,190,927 shares of
Common Stock, par value $0.01 per share.

--------------------------------------------------------------------------------
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<PAGE>   2

                             ANC RENTAL CORPORATION

                                     INDEX

<TABLE>
<CAPTION>
                                                                       PAGE
                                                                       ----
<S>      <C>                                                           <C>
                                  PART I.
                           FINANCIAL INFORMATION

Item 1.  Financial Statements

         Condensed Consolidated Balance Sheets as of March 31, 2001
           (Unaudited) and December 31, 2000.........................    1

         Unaudited Condensed Consolidated Statements of Operations
           for the Three Months Ended March 31, 2001 and 2000........    2

         Unaudited Condensed Consolidated Statement of Shareholders'
           Equity for the Three Months Ended March 31, 2001..........    3

         Unaudited Condensed Consolidated Statements of Cash Flows
           for the Three Months Ended March 31, 2001 and 2000........    4

         Notes to Condensed Consolidated Financial Statements........    5

Item 2.  Management's Discussion and Analysis of Financial Condition
           and Results of Operations.................................   13
Item 3.  Quantitative and Qualitative Disclosures About Market
           Risk......................................................   21

                                 PART II.
                             OTHER INFORMATION
Item 1.  Legal Proceedings...........................................   23
Item 2.  Changes in Securities and Use of Proceeds...................   23
Item 3.  Defaults Upon Senior Securities.............................   23
Item 4.  Submission of Matters to a Vote of Security Holders.........   23
Item 5.  Other Information...........................................   23
Item 6.  Exhibits and Reports on Form 8-K............................   23
</TABLE>

                                        i
<PAGE>   3

                        PART I -- FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                             ANC RENTAL CORPORATION

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                (IN MILLIONS EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                               MARCH 31,    DECEMBER 31,
                                                                 2001           2000
                                                              -----------   ------------
                                                              (UNAUDITED)
<S>                                                           <C>           <C>
                                         ASSETS
Cash and cash equivalents...................................    $  104.4      $   21.4
Restricted cash and cash equivalents........................       416.4         321.9
Receivables, net............................................       361.8         681.4
Prepaid expenses............................................        61.6          68.9
Vehicles, net...............................................     4,688.6       4,451.4
Property and equipment, net.................................       506.5         576.0
Intangible assets, net......................................       344.8         347.9
Other assets................................................        82.7          68.7
                                                                --------      --------
          Total assets......................................    $6,566.8      $6,537.6
                                                                ========      ========

                          LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable............................................    $  345.7      $  242.4
Accrued liabilities.........................................       221.8         241.0
Insurance reserves..........................................       281.2         290.5
Vehicle debt................................................     4,261.0       4,228.9
Other debt..................................................       273.2         276.7
Deferred income taxes.......................................       104.3         143.6
Other liabilities...........................................       253.3         221.9
                                                                --------      --------
          Total liabilities.................................     5,740.5       5,645.0
                                                                --------      --------
Commitments and contingencies

Shareholders' equity:
  Preferred stock, par value $.001 per share; 10,000,000
     shares authorized; none issued.........................          --            --
  Common stock, par value $.01 per share; 250,000,000 shares
     authorized; 45,182,550 and 45,158,707 issued and
     outstanding at March 31, 2001 and December 31, 2000,
     respectively...........................................         0.5           0.5
  Additional paid-in capital................................       895.7         895.6
  Retained earnings (deficit)...............................       (26.0)          7.0
  Accumulated other comprehensive loss......................       (43.9)        (10.5)
                                                                --------      --------
                                                                   826.3         892.6
                                                                --------      --------
          Total liabilities and shareholders' equity........    $6,566.8      $6,537.6
                                                                ========      ========
</TABLE>

        The accompanying notes are an integral part of these statements.

                                        1
<PAGE>   4

                             ANC RENTAL CORPORATION

           UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (IN MILLIONS EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                               THREE MONTHS
                                                                   ENDED
                                                                 MARCH 31,
                                                              ---------------
                                                               2001     2000
                                                              ------   ------
<S>                                                           <C>      <C>
Revenue.....................................................  $769.1   $808.8
Direct operating costs......................................   336.3    345.0
Vehicle depreciation, net...................................   241.6    229.5
Selling, general, and administrative........................   159.8    190.4
Amortization of intangible assets...........................     2.5      2.5
Interest income.............................................    (1.3)    (0.1)
Interest expense............................................    89.5     81.4
Fair value adjustment on interest rate hedges...............     3.3       --
Other expense, net..........................................     3.1      0.3
                                                              ------   ------
Loss before income taxes....................................   (65.7)   (40.2)
Benefit for income taxes....................................    25.6     15.7
                                                              ------   ------
Net loss before cumulative effect of change in accounting
  principle.................................................   (40.1)   (24.5)
Cumulative effect of change in accounting principle, net of
  tax.......................................................     7.1       --
                                                              ------   ------
Net loss....................................................  $(33.0)  $(24.5)
                                                              ======   ======
Basic and diluted loss per share before cumulative effect of
  change in accounting principle............................  $(0.89)  $(0.54)
                                                              ======   ======
Basic and diluted loss per share............................  $(0.73)  $(0.54)
                                                              ======   ======
Shares used in computing per share amounts:
  Basic and diluted.........................................    45.2     45.1
</TABLE>

        The accompanying notes are an integral part of these statements.

                                        2
<PAGE>   5

                             ANC RENTAL CORPORATION

       UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                                 (IN MILLIONS)

<TABLE>
<CAPTION>
                                                                                             ACCUMULATED
                                                   COMMON STOCK     ADDITIONAL                  OTHER
                                                  ---------------    PAID-IN     RETAINED   COMPREHENSIVE    SHAREHOLDERS'
                                                  SHARES   AMOUNT    CAPITAL     EARNINGS   INCOME (LOSS)       EQUITY
                                                  ------   ------   ----------   --------   --------------   -------------
<S>                                               <C>      <C>      <C>          <C>        <C>              <C>
BALANCE AT DECEMBER 31, 2000....................   45.2     $0.5      $895.6      $  7.0        $(10.5)         $892.6
  Net loss......................................     --       --          --       (33.0)           --           (33.0)
  Other comprehensive income:
    Foreign currency translation adjustments....     --       --          --          --          (4.8)           (4.8)
    Unrealized loss on interest rate hedges.....     --       --          --          --         (14.0)          (14.0)
    Cumulative effect of change in accounting
      principle, net of tax.....................     --       --          --          --         (14.6)          (14.6)
    Issuance of shares for employee benefit
      plan......................................     --       --         0.1          --            --             0.1
                                                   ----     ----      ------      ------        ------          ------
BALANCE AT MARCH 31, 2001.......................   45.2     $0.5      $895.7      $(26.0)       $(43.9)         $826.3
                                                   ====     ====      ======      ======        ======          ======
</TABLE>

         The accompanying notes are an integral part of this statement.

                                        3
<PAGE>   6

                             ANC RENTAL CORPORATION

           UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN MILLIONS)

<TABLE>
<CAPTION>
                                                                THREE MONTHS ENDED
                                                                    MARCH 31,
                                                              ----------------------
                                                                2001         2000
                                                              ---------   ----------
<S>                                                           <C>         <C>
CASH AND CASH EQUIVALENTS PROVIDED BY (USED IN) OPERATING
  ACTIVITIES:
  Net loss..................................................  $   (33.0)  $    (24.5)
  Adjustments to reconcile net income to net cash and cash
     equivalents provided by (used in) operating activities:
     Cumulative effect of change in accounting principle,
      net of tax............................................       (7.1)          --
     Fair value adjustment on interest rate hedges..........        3.3           --
     Loss on sale and leaseback transactions................        3.7           --
     Depreciation and amortization of property and
      equipment.............................................       20.0         19.3
     Amortization of intangible assets and debt issue
      costs.................................................       11.2          3.9
     Income tax benefit.....................................      (25.6)       (15.7)
     Depreciation of vehicles...............................      241.6        229.5
     Purchases of vehicles..................................   (2,009.3)    (2,144.8)
     Sales of vehicles......................................    1,495.2      1,480.9
     Changes in assets and liabilities, net:
       Receivables..........................................      319.7        144.7
       Prepaid expenses and other assets....................        3.7         (5.8)
       Accounts payable and accrued liabilities.............       83.8        (48.6)
       Other liabilities....................................      (12.5)         9.5
                                                              ---------   ----------
                                                                   94.7       (351.6)
                                                              ---------   ----------
CASH AND CASH EQUIVALENTS PROVIDED BY (USED IN) INVESTING
  ACTIVITIES:
  Purchases of property and equipment.......................      (12.8)       (19.8)
  Proceeds from sale of property and equipment..............       80.4          2.5
                                                              ---------   ----------
                                                                   67.6        (17.3)
                                                              ---------   ----------
CASH AND CASH EQUIVALENTS PROVIDED BY (USED IN) FINANCING
  ACTIVITIES:
  Proceeds from vehicle financing...........................    6,146.3     14,989.6
  Payments on vehicle financing.............................   (6,182.2)   (14,794.7)
  Net proceeds (payments) of other debt.....................       (2.0)         2.0
  Cash transfers from Parent................................         --        152.6
  Subsidiary limited partner contributions..................      (40.4)         9.9
  Debt issue costs..........................................       (6.1)          --
  Other.....................................................        5.1         (0.4)
                                                              ---------   ----------
                                                                  (79.3)       359.0
                                                              ---------   ----------
Increase (decrease) in cash and cash equivalents............       83.0         (9.9)
Cash and cash equivalents at beginning of period............       21.4         17.4
                                                              ---------   ----------
Cash and cash equivalents at end of period..................  $   104.4   $      7.5
                                                              =========   ==========
</TABLE>

        The accompanying notes are an integral part of these statements.

                                        4
<PAGE>   7

                             ANC RENTAL CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                 (IN MILLIONS EXCEPT SHARE AND PER SHARE DATA)

1.  INTERIM FINANCIAL STATEMENTS

     The accompanying Condensed Consolidated Financial Statements include the
accounts of ANC Rental Corporation and its subsidiaries (the "Company") and have
been prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission ("SEC"). All significant intercompany
accounts and transactions have been eliminated. Certain information related to
the Company's organization, significant accounting policies and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted. In
the opinion of management, the Condensed Consolidated Financial Statements
contain all material adjustments, consisting of only normal recurring
adjustments, necessary to fairly state the financial position, the results of
operations and cash flows for the periods presented and the disclosures herein
are adequate to make the information presented not misleading. Income taxes
during these interim periods have been provided based upon the Company's
anticipated annual effective income tax rate.

     Operating results for interim periods are not necessarily indicative of the
results that can be expected for a full year. These interim financial statements
should be read in conjunction with the Company's audited Consolidated Financial
Statements and notes thereto appearing in the Company's Registration Statement
on Form 10, as amended, filed with the SEC on June 6, 2000 (the "Registration
Statement") as well as the Company's annual report on Form 10-K for the year
ended December 31, 2000.

     Prior to June 30, 2000 the Company was a wholly owned subsidiary of
AutoNation, Inc. ("our former Parent" or "AutoNation"). In August 1999,
AutoNation announced its intention to separate its automotive rental business
from its automotive retail business and in September 1999, announced its
intention to distribute its entire interest in the Company to AutoNation's
stockholders on a tax-free basis (the "Distribution"), subject to conditions and
consents described in the Separation and Distribution Agreement. On May 31,
2000, the former Parent's board of directors approved the spin-off and set a
record date of June 16, 2000 and a distribution date of June 30, 2000. The
Distribution occurred June 30, 2000 at which point the Company became an
independent, publicly owned company. The Company entered into agreements with
AutoNation, which provided for the separation of the Company's business from
AutoNation and govern various interim and ongoing relationships between the
companies.

     All historical share and per share data included in the Unaudited Condensed
Consolidated Statements of Operations, has been retroactively adjusted for the
recapitalization of the former Parent's 100 shares of common stock into
45,142,728 shares of Common Stock on June 30, 2000.

     Basic loss per share is calculated based on the weighted average shares of
common stock outstanding during the period. Diluted earnings per share is
calculated based on the weighted average shares of common stock outstanding,
plus the dilutive effect of stock options, calculated using the treasury stock
method. As of March 31, 2001 the Company had 6.5 million options outstanding,
which due to their anti-dilutive nature were not included in the calculation of
dilutive earnings per share. For the period ended March 31, 2000 there was no
dilutive effect from stock options, as there were no stock options outstanding.

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.

     Certain amounts in the prior years financial statements have been
reclassified to conform to current year presentation.

                                        5
<PAGE>   8
                             ANC RENTAL CORPORATION

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2.  RECEIVABLES

     The components of receivables, net of allowance for doubtful accounts, are
as follows:

<TABLE>
<CAPTION>
                                                               MARCH 31,    DECEMBER 31,
                                                                 2001           2000
                                                              -----------   ------------
                                                              (UNAUDITED)
<S>                                                           <C>           <C>
Trade receivables...........................................     $186.6        $207.4
Vehicle manufacturer receivables............................      107.4         423.6
Other.......................................................       94.4          90.9
                                                                 ------        ------
                                                                  388.4         721.9
Less: allowance for doubtful accounts.......................      (26.6)        (40.5)
                                                                 ------        ------
                                                                 $361.8        $681.4
                                                                 ======        ======
</TABLE>

3.  VEHICLES

     A summary of vehicles is as follows:

<TABLE>
<CAPTION>
                                                               MARCH 31,    DECEMBER 31,
                                                                 2001           2000
                                                              -----------   ------------
                                                              (UNAUDITED)
<S>                                                           <C>           <C>
Vehicles....................................................    $5,233.4      $5,030.7
Less: accumulated depreciation..............................      (544.8)       (579.3)
                                                                --------      --------
                                                                $4,688.6      $4,451.4
                                                                ========      ========
</TABLE>

4.  PROPERTY AND EQUIPMENT

     A summary of property and equipment is as follows:

<TABLE>
<CAPTION>
                                                                              DECEMBER
                                                               MARCH 31,        31,
                                                                 2001           2000
                                                              -----------   ------------
                                                              (UNAUDITED)
<S>                                                           <C>           <C>
Land........................................................     $ 70.7        $121.0
Furniture, fixtures and equipment...........................      423.7         420.1
Buildings and improvements..................................      306.4         324.7
                                                                 ------        ------
                                                                  800.8         865.8
Less: accumulated depreciation and amortization.............     (294.3)       (289.8)
                                                                 ------        ------
                                                                 $506.5        $576.0
                                                                 ======        ======
</TABLE>

     As a result of weak operating performance in the fourth quarter of 2000 and
first quarter of 2001 and the resulting declines in operating cash flow, the
Company required additional liquidity to meet projected working capital needs.
During the quarter the Company entered into a series of sale and leaseback
transactions for some of its owned land and buildings. Sales in the first
quarter yielded net proceeds of approximately $79.0 million. During the second
quarter through to May 11, 2001, the Company closed additional sale and
leaseback transactions yielding net proceeds of approximately $20.8 million. The
leases, with terms of not less than 20 years, are treated as operating leases,
and will result in approximately $3.0 million per quarter of incremental rent
expense over and above the amounts incurred during 2000. Any gains realized on
the sale of the properties have been deferred and are being recognized over the
life of the lease, and such gains approximated $23.8 million for the three
months ended March 31, 2001. Any losses will be recognized currently in
earnings, and such losses approximated $3.7 million for the three months ended
March 2001.

                                        6
<PAGE>   9
                             ANC RENTAL CORPORATION

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5.  OTHER ASSETS

     The components of other assets are as follows:

<TABLE>
<CAPTION>
                                                               MARCH 31,    DECEMBER 31,
                                                                 2001           2000
                                                              -----------   ------------
                                                              (UNAUDITED)
<S>                                                           <C>           <C>
Deposits....................................................    $  34.4        $ 33.8
Debt issue cost, net........................................       23.3          25.7
Interest rate hedges, at fair value.........................       14.8            --
Other.......................................................       10.2           9.2
                                                                -------        ------
                                                                $  82.7        $ 68.7
                                                                =======        ======
</TABLE>

6.  ACCOUNTS PAYABLE

     The components of accounts payable are as follows:

<TABLE>
<CAPTION>
                                                               MARCH 31,    DECEMBER 31,
                                                                 2001           2000
                                                              -----------   ------------
                                                              (UNAUDITED)
<S>                                                           <C>           <C>
Trade payables..............................................     $134.2        $123.1
Vehicle payables............................................      211.5         119.3
                                                                 ------        ------
                                                                 $345.7        $242.4
                                                                 ======        ======
</TABLE>

     Vehicle payables represent amounts to be financed after period end for
vehicles acquired under the Company's vehicle financing programs.

7.  OTHER LIABILITIES

     Components of other liabilities are as follows:

<TABLE>
<CAPTION>
                                                               MARCH 31,    DECEMBER 31,
                                                                 2001           2000
                                                              -----------   ------------
                                                              (UNAUDITED)
<S>                                                           <C>           <C>
Minority interest...........................................     $119.1        $159.5
Interest rate hedges, at fair value.........................       50.5            --
Other.......................................................       83.7          62.4
                                                                 ------        ------
                                                                 $253.3        $221.9
                                                                 ======        ======
</TABLE>

     Minority interest represents the limited partnership interest in a
subsidiary of the Company. Minority interest in the subsidiary's income is
included in vehicle interest expense and was $1.7 million and $1.2 million for
the three months ended March 31, 2001 and 2000, respectively.

                                        7
<PAGE>   10
                             ANC RENTAL CORPORATION

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8.  VEHICLE DEBT

     Vehicle debt is as follows:

<TABLE>
<CAPTION>
                                                               MARCH 31,    DECEMBER 31,
                                                                 2001           2000
                                                              -----------   ------------
                                                              (UNAUDITED)
<S>                                                           <C>           <C>
Amounts under various commercial paper programs secured by
  eligible vehicle collateral; interest based on
  market-dictated commercial paper rates; weighted average
  interest rates of 5.20% and 6.77% at March 31, 2001 and
  December 31, 2000, respectively...........................    $  784.8      $  642.7
Amounts under various asset-backed medium-term note programs
  secured by eligible vehicle collateral:
     Fixed rate component; weighted average interest rate of
       6.25% at March 31, 2001 and 6.30% at December 31,
       2000; maturities through 2004........................     1,646.1       1,750.0
     Floating rate component based on a spread over LIBOR;
       weighted average interest rate of 5.25% and 6.93% at
       March 31, 2001 and December 31, 2000, respectively;
       maturities through 2004..............................     1,750.0       1,750.0
Other committed and uncommitted secured vehicle financings
  primarily with financing institutions in the United
  Kingdom; LIBOR based interest rates; weighted average
  interest rates of 5.51% and 5.62% at March 31, 2001 and
  December 31, 2000, respectively...........................        80.1          86.2
                                                                --------      --------
                                                                $4,261.0      $4,228.9
                                                                ========      ========
</TABLE>

     At March 31, 2001, aggregate expected maturities of vehicle debt were as
follows:

<TABLE>
<S>                                                           <C>
2001........................................................  $1,080.1
2002........................................................   1,305.9
2003........................................................     675.0
2004........................................................   1,200.0
2005........................................................        --
Thereafter..................................................        --
                                                              --------
                                                              $4,261.0
                                                              ========
</TABLE>

     The Company finances vehicle purchases for its domestic automotive rental
operations primarily through commercial paper and medium-term note financings.
As of March 31, 2001 the Company's commercial paper program was a $1.14 billion
single-seller commercial paper program. Borrowings under this program are
secured by eligible vehicle collateral and bear interest at market based
commercial paper rates. The $1.14 billion single-seller commercial paper
program, which has been extended for an additional sixty-day period beyond the
May 11, 2001 expiration, is supported by $1.095 billion of bank lines of credit
which provides liquidity backup for the facility, as well as $45.0 million of
restricted cash, which provides credit enhancement and additional liquidity. The
Company has financed $200.0 million of its seasonal fleet capacity with a
variable funding note that will expire October 2001. Also, the Company has
financed maturing capacity with an auction-rate note program that has total
capacity of $531.3 million. During the sixty-day extension period the Company
expects to reduce its single-seller commercial paper program to a smaller
program extending into a 364 day facility and/or other similar asset-backed
financings.

     The Company's medium-term note financings mature at various dates through
2004 and totaled $3.4 billion. In May 2001, as part of its efforts to replace
maturing capacity, the Company issued $600.0 million of rental vehicle
asset-backed medium-term notes at a floating rate based upon a spread over
LIBOR, which as of May 9, 2001 approximated 4.59%. We capped the effective
interest rate on these notes at 7.74% through the use of certain derivative
instruments.

                                        8
<PAGE>   11
                             ANC RENTAL CORPORATION

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The weighted average interest rate on total vehicle debt was 5.63% and
6.62% at March 31, 2001 and December 31, 2000, respectively. Interest expense on
vehicle debt included as a component of total interest expense in the
accompanying Unaudited Condensed Consolidated Statements of Operations
approximated $72.4 million and $77.9 million for the three months ended March
31, 2001 and 2000 respectively.

     The Company is subject to various covenants relative to its vehicle debt,
the most restrictive of which is the maintenance of certain collateral levels.
The Company has complied with its covenants as of, and for, the three months
ended March 31, 2001.

9.  OTHER DEBT

     Other debt is as follows:

<TABLE>
<CAPTION>
                                                               MARCH 31,    DECEMBER 31,
                                                                 2001           2000
                                                              -----------   ------------
                                                              (UNAUDITED)
<S>                                                           <C>           <C>
Secured revolving credit facility weighted average interest
  rate of 11.0% at December 31, 2000........................     $   --        $ 17.0
Interim financing fixed rate note at 13.5% matures through
  June 30, 2007.............................................      200.0         200.0
Notes payable to vehicle manufacturer; weighted average
  interest rates of 7.45% at March 31, 2001 and December 31,
  2000, respectively matures 2002...........................       35.0          35.0
Notes payable to former owners of acquired business;
  interest payable using LIBOR based rates; weighted average
  interest of 7.05% and 5.86% at March 31, 2001 and December
  31, 2000, respectively; redeemable at the option of the
  holder through maturity in 2003...........................        7.9           8.5
Other uncommitted credit facilities and other notes;
  interest ranging from 5.71% to 7.1%; maturing through
  2001......................................................       30.3          16.2
                                                                 ------        ------
                                                                 $273.2        $276.7
                                                                 ======        ======
</TABLE>

     As of March 31, 2001 aggregate expected maturities of other debt are as
follows: $108.2 million in 2001, $35.0 million in 2002 and $130.0 million in
2007.

     The Company has a three-year secured revolving credit facility with
borrowing base capacity of up to $175.0 million at a floating rate, currently
based upon a spread of 1.75% above LIBOR. The Company also has a supplemental
secured revolving credit facility with availability of the lesser of (1) $40.0
million and (2) an amount equal to $175.0 million less the borrowing base of the
$175.0 million secured revolving credit facility. As of March 31, 2001 the
borrowing base under the $175.0 million secured revolving credit facility
approximated $71.4 million, of which approximately $34.5 million was used to
support outstanding letters of credit. The supplemental secured revolving credit
facility has a term of one year, and will be available until no later than May
31, 2001 to the extent there is no availability for borrowings under the $175.0
million secured revolving credit facility. Any amounts outstanding under the
supplemental secured revolving credit facility on its one year maturity date
will be converted into a term loan maturing on May 31, 2003. Interest on the
supplemental secured revolving credit facility will be payable at a floating
rate, initially based upon a spread of 4.5% above LIBOR and increasing by 50
basis points on the first day of each January, April, July and October
commencing October 1, 2000. As of March 31, 2001 no amounts were outstanding
under either the secured revolving credit facility or the supplemental secured
revolving credit facility.

     The Company entered into an agreement with a lender on June 30, 2000 for
interim financing of $225.0 million in connection with its separation from
AutoNation. The initial term of the interim financing is 12 months. The interest
rate on the interim financing is fixed at 13.5% during the term. The interim
financing

                                        9
<PAGE>   12
                             ANC RENTAL CORPORATION

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

requires the Company to pay commitment fees totaling up to $22.0 million, all of
which was paid through March 31, 2001. If the Company does not refinance the
interim financing by June 30, 2001 the interim financing will extend into a six
year term loan and the Company will be obligated to issue warrants representing
up to 7.5% of the Company's fully diluted capital stock and pay a fee
approximating 3.0% of the principal interim financing remaining outstanding. The
term loan would bear interest at an increasing rate starting at 13.5% and
increase by 50 basis points each 90 day period up to a maximum rate of 18.0%.
The term loan may, at the option of the lender, be exchanged into a fixed rate
note with similar maturity. The warrants would have a term of 10 years and would
have an exercise price of $.01 per share. The fair value of the warrants on the
date of issuance would be treated as a note discount and would be amortized as a
component of interest expense over the term of the refinancing.

     In connection with the Company's sale and leaseback transactions, the
Company and its lenders amended the interim financing and the secured revolving
credit facility. As part of our interim facility amendment the Company was
allowed to use the proceeds from the sale and leaseback transactions to be used
for general corporate purposes. The amendment also requires that on September
30, 2001 the Company prepay its interim facility by approximately $70.0 million.

     The Company's governing documents for its credit facilities and interim
financing, entered into during 2000, require it to maintain certain financial
ratios including, but not limited to, financial performance measures and limits
on additional indebtedness. In addition these documents restrict the Company's
ability to: sell assets; grant or incur liens on our assets; repay certain
indebtedness; pay dividends; make certain investments or acquisitions; issue
certain guarantees; enter certain sale and leaseback transactions; repurchase or
redeem capital stock; engage in mergers or consolidations; and engage in certain
transactions with our affiliates. As of and for the four quarters ended March
31, 2001 the Company has complied with these covenants and restrictions.

10.  RESTRUCTURING

     At March 31, 2001, $6.8 million remains accrued relative to the 1999 plan
with most of the remaining severance cost of $2.2 million expected to be
substantially paid by the end of the third quarter of 2001; certain lease
commitments will extend to the remainder of the applicable lease term. The
Company charged $2.0 million to these reserves during the period ended March 31,
2001. The charges were primarily comprised of severance and rent paid during the
period.

     During the first quarter of 2001, as part of a cost reduction plan, the
Company reduced its workforce in excess of 700 people. The severance related to
those terminations approximated $2.0 million and was charged to earnings in the
first quarter.

11.  LEGAL PROCEEDINGS

     The Company is a party to various legal proceedings which have arisen in
the ordinary course of business. While the results of these matters cannot be
predicted with certainty, the Company believes that losses, if any, resulting
from the ultimate resolution of these matters will not have a material adverse
effect on the Company's consolidated results of operations, cash flows or
financial position. However, unfavorable resolution could affect the
consolidated results of operations or cash flows for the quarterly periods in
which they are resolved.

12.  ADOPTION OF NEW ACCOUNTING STANDARD

     In June 1998 the Financial Accounting Standards Board ("FASB") issued SFAS
No. 133 "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
133"). SFAS 133, as amended, became effective for the Company on January 1,
2001.

                                        10
<PAGE>   13
                             ANC RENTAL CORPORATION

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The major market risk hedged by the Company is the changes in LIBOR-based
interest rates. The Company's policy is to manage interest rate risk through a
combination of fixed and floating rate debt. The Company uses interest rate
derivatives to adjust interest rate exposures, when appropriate, based upon
market conditions. As of January 1, 2001 these derivatives consist of
stand-alone interest rate caps and a combination of interest rate caps and
floors to create a synthetic swap. The Company enters into derivatives with a
group of financial institutions with investment grade ratings, thereby
minimizing credit risk. The Company's derivative instruments qualify for hedge
accounting treatment under SFAS 133. In order to qualify for hedge accounting
certain criteria must be met including a requirement that both at inception of
the hedge and on an ongoing basis the hedging relationship is expected to be
highly effective in offsetting cash flows attributable to the hedged risk during
the term of the hedge. Hedge accounting treatment permits certain changes in the
fair value of the Company's qualifying derivatives to be deferred in other
comprehensive income and subsequently reclassified to earnings to offset the
impact of the related hedged interest rate. Changes in fair value of non-
qualifying derivatives and the ineffective portion of changes in fair value of
qualifying derivatives must be recorded immediately through earnings.

     The Company measures effectiveness of its stand-alone caps by comparing the
changes in proceeds expected from the caps to the expected incremental interest
expense incurred on the variable rate debt. Changes in fair value of the caps
due to time value and volatility are excluded from the assessment of
effectiveness and will be recognized currently in earnings as a "fair value
adjustment on interest rate hedges." The Company measures effectiveness of its
synthetic swaps by comparing the changes in fair value of the synthetic swap to
a hypothetical derivative that would be perfectly effective in offsetting
changes in fair value of the hedged cash flows. The Company expects little to no
ineffectiveness relative to its synthetic swap and as such changes in the fair
value of the synthetic swaps are recorded as a component of other comprehensive
income.

     The FASB continues to provide implementation guidance on technical issues
regarding SFAS 133. During April 2001, the FASB has proposed alternative
accounting treatment that would allow changes in the fair value of the Company's
stand alone caps to be recorded as a component of other comprehensive income.
Upon adoption of the proposed alternative treatment the Company will no longer
recognize changes in fair value due to time value currently in earnings.
However, prospectively the expiring portion of time value for the respective
caps will be reflected in earnings of future quarters.

     Based upon the fair values of the caps and the floors at January 1, 2001
the Company recognized assets of $24.7 million and liabilities of $34.0 million.
In addition, the Company de-recognized approximately $3.1 million of net
deferred losses related to the unwinding of certain swaps and floors primarily
due to the separation from its former Parent. The net deferred losses related to
the unwound derivatives will be reflected as a component of accumulated other
comprehensive income and will continue to amortize over the remaining life of
the respective debt that was hedged.

     For the quarter ended March 31, 2001 the Company reclassified proceeds from
its stand-alone caps of approximately $1.1 million to vehicle interest expense,
a component of interest expense. For the quarter ended March 31, 2001 the
Company reclassified payments under the floor component of its synthetic swaps
of approximately $1.2 million to vehicle interest expense a component of
interest expense. Amortization related to deferred losses was reclassified from
other comprehensive income to vehicle interest expense and approximated $0.3
million for the three months ended March 31, 2001.

                                        11
<PAGE>   14
                             ANC RENTAL CORPORATION

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13.  COMPREHENSIVE INCOME

     Comprehensive income includes effects of foreign currency translation and
changes in fair value of certain derivative financial instruments which qualify
for hedge accounting. Comprehensive income for the three months ended March 31,
2001 and 2000 is as follows (unaudited):

<TABLE>
<CAPTION>
                                                              MARCH 31,    MARCH 31,
                                                                2001         2000
                                                              ---------    ---------
<S>                                                           <C>          <C>
Net loss....................................................   $(33.0)      $(24.5)
Other comprehensive income (loss) net of tax:
  Foreign currency translation adjustments..................     (4.8)         1.2
  Unrealized loss on interest rate hedges...................    (14.0)          --
                                                               ------       ------
Other comprehensive income (loss), net of tax before
  cumulative effect of change in accounting principle.......    (51.8)       (23.3)
Cumulative effect of change in accounting principle, net of
  tax.......................................................    (14.6)          --
                                                               ------       ------
Other comprehensive income (loss)...........................   $(66.4)      $(23.3)
                                                               ======       ======
</TABLE>

     The components of accumulated other comprehensive loss are as follows:

<TABLE>
<CAPTION>
                                                               MARCH 31,    DECEMBER 31,
                                                                 2001           2000
                                                              -----------   ------------
                                                              (UNAUDITED)
<S>                                                           <C>           <C>
Foreign currency translation adjustments....................     $(15.3)       $(10.5)
Deferred losses on interest rate hedges.....................      (28.6)           --
                                                                 ------        ------
                                                                 $(43.9)       $(10.5)
                                                                 ======        ======
</TABLE>

                                        12
<PAGE>   15

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     The following should be read in conjunction with the Condensed Consolidated
Financial Statements and notes thereto under Item 1. In addition, reference
should be made to the Company's audited Consolidated Financial Statements and
notes thereto and related Management's Discussion and Analysis of Financial
Condition and Results of Operations included in the Company's annual report on
Form 10-K as filed with the Securities and Exchange Commission on April 2, 2001.

OVERVIEW

     Prior to June 30, 2000, we were a wholly owned subsidiary of AutoNation,
Inc. AutoNation announced its intention to separate its automotive rental
business from its automotive retail business in August 1999, and in September
1999, announced its intention to distribute its entire interest in us to
AutoNation's stockholders on a tax-free basis (the "Distribution"). On May 31,
2000 AutoNation's board of directors approved the spin-off and set a record date
of June 16, 2000 and a distribution date of June 30, 2000. The Distribution
occurred June 30, 2000 at which point we became an independent, publicly owned
company. We entered into agreements with AutoNation, which provide for the
separation of our business from AutoNation's and govern various interim and
ongoing relationships between the companies.

GENERAL

     We rent vehicles on a daily or weekly basis to leisure and business
travelers, principally from on-airport or near-airport locations through our
Alamo and National brands, and to local customers who need replacement vehicles
from locations in suburban areas through our Alamo Local Market Division. We
operate primarily in the United States, Europe and Canada.

     We generate revenue primarily from vehicle rental charges and the sale of
ancillary rental products. For the three months ended March 31, 2001
approximately 87% of our rental revenue was derived from vehicle rental charges
with the remaining 13% derived from the sale of liability and other accident
protection products, fuel usage fees, and customer convenience products
including vehicle upgrades.

     We have re-cast our income statement presentation to provide further detail
of cost drivers, as well as to conform more closely with other industry
participants.

                                        13
<PAGE>   16

CONSOLIDATED RESULTS OF OPERATIONS

     A summary of our operating results is as follows for the periods indicated:

<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED
                                                        --------------------------------------------
                                                         MARCH 31,               MARCH 31,
                                                           2001         %          2000         %
                                                        -----------   ------    -----------   ------
<S>                                                     <C>           <C>       <C>           <C>
Revenue...............................................   $  769.1      100.0%    $  808.8      100.0%
  Direct operating costs..............................      336.3       43.7        345.0       42.7
  Vehicle depreciation, net...........................      241.6       31.4        229.5       28.4
  Selling, general and administrative.................      157.8       20.5        183.0       22.6
  Severance/transition cost...........................        2.0        0.3          7.4        0.9
  Amortization of intangible assets...................        2.5        0.3          2.5        0.3
  Interest income.....................................       (1.3)      (0.2)        (0.1)        --
  Interest expense....................................       89.5       11.7         81.4       10.1
  Fair value adjustment on interest rate hedges.......        3.3        0.4           --         --
  Loss on sale and leaseback transactions.............        3.7        0.5           --         --
  Other (income) expense, net.........................       (0.6)      (0.1)         0.3         --
                                                         --------     ------     --------     ------
  Loss before income taxes............................   $  (65.7)      (8.5)%   $  (40.2)      (5.0)%
                                                         ========     ======     ========     ======
KEY STATISTICS
     Revenue per day..................................   $  35.72                $  36.38
     Charge days (in millions)........................       21.2                    21.9
     Average fleet....................................    304,460                 309,675
     Fleet utilization................................      77.5%                   77.8%
</TABLE>

  Revenue

     Revenue was $769.1 million for the three months ended March 31, 2001, and
$808.8 million for the three months ended March 31, 2000. The decrease in
revenue of $39.7 million or 4.9% is primarily due to lower charge day volume of
3.1% or $24.9 million, lower revenue per day of 0.8% or $6.3 million, the
unfavorable affects of foreign exchange rate movements of 0.9% or $7.7 million
and lower licensee and other revenue of 0.1% or $0.8 million.

     The most significant declines in charge day volume for the quarter were
primarily realized in our Alamo and National brands and our Alamo Local Market
Division. The declines in our Alamo and National brands are primarily in inbound
international tour, commercial and affinity business. During the first quarter
of 2001, we intentionally managed our mix of business away from lower yielding
channels, thereby causing the declines in volume in our affinity business. We
expect declines in our inbound international tour and commercial channels to
continue into the second quarter due to the weakening domestic economic
conditions. Declines in our Alamo Local Market Division were due to overall
lower volumes of insurance replacement business.

     The overall pricing environment in the domestic airport market continued to
be extremely competitive during the first quarter of 2001 and will continue into
the second quarter. Much of the price competition continues to be in the time
and mileage rates, the base daily rate a customer is charged.

  Direct operating costs

     Direct operating costs include costs specifically related to the operation
and maintenance of the fleet such as field personnel, variable transaction costs
including but not limited to insurance, agency fees, and fuel, and facility
costs. Direct operating costs were $336.3 million for the three months ended
March 31, 2001 and $345.0 million for the three months ended March 31, 2000. As
a percent of revenue, direct operating costs were 43.7% for the three months
ended March 31, 2001 and 42.7% for the three months ended March 31, 2000.

     The decrease in direct operating costs in aggregate dollars of $8.7 million
is due to: (1) approximately $7.0 million of lower field personnel costs due to
implementation of cost reduction programs; (2) approxi-

                                        14
<PAGE>   17

mately $5.2 million of lower variable transaction costs the result of overall
lower revenue volumes; and (3) the favorable effects on expenses of foreign
exchange rate movements approximating $3.2 million. These factors were offset by
(1) approximately $5.4 million of higher fleet operating costs including higher
turn-back costs the result of reducing the fleet size to lower levels; and (2)
approximately $1.3 million of increased facility maintenance costs.

  Vehicle depreciation

     Vehicle depreciation includes vehicle depreciation, net of manufacturer
incentives, and gains and losses on vehicle sales in the ordinary course of
business. Vehicle depreciation was $241.6 million for the three months ended
March 31, 2001 and $229.5 million for the three months ended March 31, 2000. As
a percent of revenue vehicle depreciation was 31.4% for the three months ended
March 31, 2001 and 28.4% for the three months ended March 31, 2000.

     The increase in vehicle depreciation of $12.1 million is primarily due to
increased depreciation rates partially offset by lower average fleet size on a
year over year basis. The increase in depreciation rates of approximately $20.7
million is primarily due to higher vehicle acquisition costs coupled with
changes in the mix of our fleet, as well as provisions incurred relative to the
disposition of vehicles. Offsetting these increases were the benefits of a
decreasing fleet size, which lowered our costs by approximately $7.2 million, as
well as the benefits of foreign exchange rate movements, which lowered our costs
by approximately $2.3 million. The balance of the increase is the result of
lower utilization.

  Selling, general and administrative

     Selling, general and administrative expenses were $157.8 million for the
three months ended March 31, 2001 and $183.0 million for the three months ended
March 31, 2000. As a percentage of revenue selling, general and administrative
expenses were 20.5% for the three months ended March 31, 2001 and 22.6% for the
three months ended March 31, 2000. The decline in selling, general and
administrative expenses of $25.2 million is due to lower variable selling cost
and overhead spending approximating $13.5 million, declines in marketing and
advertising expenses approximating $10.2 million and the favorable effects of
foreign exchange rate movements approximating $1.5 million.

  Severance/transition cost

     During the first quarter of 2001, as part of a cost reduction plan, we
reduced our workforce in excess of 700 people with a total annual expense of
approximately $25.0 million. The severance related to those terminations was
$2.0 million. During the first quarter of 2000, we incurred approximately $7.4
million of transition costs relative to our fourth quarter 1999 restructuring
plan. These costs related to the consolidation of headquarter operations to Fort
Lauderdale and were not previously accruable as part of the 1999 charge.

  Interest income

     Interest income was $1.3 million for the three months ended March 31, 2001
and $0.1 million for the three months ended March 31, 2000. The increase in
interest income is due primarily to interest bearing assets contributed as part
of the contributed insurance subsidiary from our former Parent.

  Interest expense

     Interest expense for the three month periods indicated comprised of:

<TABLE>
<CAPTION>
                                                              MARCH 31,   MARCH 31,
                                                                2001        2000
                                                              ---------   ---------
<S>                                                           <C>         <C>
Vehicle interest expense....................................    $72.4     $   77.9
Non-vehicle interest expense................................     17.1          3.5
                                                                -----     --------
                                                                $89.5     $   81.4
                                                                =====     ========
</TABLE>

                                        15
<PAGE>   18

     The decrease in vehicle interest expense is due to lower average vehicle
debt outstanding for the comparative period coupled with lower weighted average
interest rates. The increase in non-vehicle interest expense is due primarily to
interest and debt issue costs related to our interim financing and our revolving
credit facilities. Amortization of debt issue costs relative to these facilities
approximated $5.7 million for the first quarter of 2001.

  Fair value adjustment on interest rate hedges

     Effective January 1, 2001 we adopted Statement of Financial Accounting
Standards No. 133 "Accounting for Derivative Instruments and Hedging Activities"
("SFAS 133"), as amended. For additional information regarding the adoption of
SFAS 133 please refer to Note 12 of our Notes to Condensed Consolidated
Financial Statements. For the three months ended March 31, 2001 we recognized a
non-cash charge of approximately $3.3 million due to the application of these
new accounting principles. The charge related to the changes in fair market
value of the time value component of our stand-alone caps.

  Loss on sale and leaseback transactions

     As a result of weak operating performance in the fourth quarter of 2000 and
the first quarter of 2001 and the resulting declines in operating cash flow we
required additional liquidity to meet projected working capital needs. During
the quarter, we entered into a series of sale and leaseback transactions for
some of our owned land and buildings. Sales completed in the first quarter
yielded net proceeds of approximately $79.0 million. During the second quarter
through May 11, 2001, we closed additional sale and leaseback transactions
yielding net proceeds of $20.8 million. The leases, with terms of not less than
20 years, are treated as operating leases, and will result in approximately $3.0
million per quarter of incremental rent expense over and above the amounts
incurred during 2000. Any gains realized on the sale of the properties have been
deferred and are being recognized over the life of the lease. Any losses will be
recognized currently in earnings. Such losses approximated $3.7 million and
deferred gains approximated $23.8 million for the three months ended March 2001.
For the second quarter we expect that such losses will not exceed $1.0 million.

  Benefit for income taxes

     The benefit for income taxes was $25.6 million for the three months ended
March 31, 2001 and $15.7 million for the three months ended March 31, 2000. The
increase in benefit for income taxes is due to a higher pre-tax loss for the
comparative periods.

  Restructuring and other charges

     During the fourth quarter of 1999, the Company approved and announced plans
to significantly restructure its operations, which resulted in a pre-tax
restructuring charge of $40.5 million. The restructuring plan included
provisions for the consolidation of the North American headquarters, headcount
reductions, and the closure of certain marginally profitable or unprofitable
domestic and international locations, as well as the reduction of fleet. At
March 31, 2001, $6.8 million remained accrued relative to the 1999 plan, with
most of the remaining accruals being for severance and continuing lease
obligations. The remaining severance accrual of $2.2 million is expected to be
substantially paid by the end of the third quarter of 2001. Certain lease
commitments will extend to the remainder of the applicable term of the lease. We
charged $2.0 million to these reserves during the period ended March 31, 2001.
The charges were primarily comprised of severance and rent paid during the
period.

SEASONALITY

     Our business, and particularly the leisure travel market, is highly
seasonal. Our third quarter, which includes the peak summer travel months, has
historically been the strongest quarter of the year. During the peak season, we
increase our rental fleet and workforce to accommodate increased rental
activity. As a result, any occurrence that disrupts travel patterns during the
summer period could result in a significant decrease in customer volume. The
first and fourth quarters for our operations are generally the weakest because
there is

                                        16
<PAGE>   19

limited leisure travel and a greater potential for weather conditions, either
adverse or unseasonable, to impact our business. Many of our operating expenses
such as rent, general insurance and administrative personnel remain fixed
throughout the year and cannot be reduced during periods of decreased rental
demand. Given the seasonality of our operations, our revenue and variable
operating and selling expenses are generally higher in aggregate dollars during
the second and third quarters as compared to the first and fourth quarters. In
addition, in part due to seasonality, our cost of operations as a percentage of
revenue is generally higher during the first and fourth quarters as compared to
the second and third quarters.

FIRST QUARTER 2001 VERSUS FOURTH QUARTER 2000

     A summary of our quarterly operating results is as follows for the periods
indicated:

<TABLE>
<CAPTION>
                                                                       THREE MONTHS ENDED
                                                            ----------------------------------------
                                                            MARCH 31,           DECEMBER 31,
                                                              2001        %         2000         %
                                                            ---------   -----   ------------   -----
<S>                                                         <C>         <C>     <C>            <C>
Revenue...................................................  $  769.1    100.0%    $  803.3     100.0%
Direct operating costs....................................     336.3     43.7        342.5      42.6
Vehicle depreciation, net.................................     241.6     31.4        258.5      32.2
Selling, general and administrative.......................     157.8     20.5        168.4      20.9
Severance/transition cost.................................       2.0      0.3           --        --
Amortization of intangible assets.........................       2.5      0.3          2.5       0.3
Interest income...........................................      (1.3)    (0.2)        (1.9)     (0.2)
Interest expense..........................................      89.5     11.7        100.0      12.5
Fair value adjustment on interest rate hedges.............       3.3      0.4           --        --
Loss on sale and leaseback transactions...................       3.7      0.5           --        --
Other (income) expense, net...............................      (0.6)    (0.1)         0.3        --
                                                            --------    -----     --------     -----
Loss before income taxes..................................  $  (65.7)    (8.5)%   $  (67.0)     (8.3)%
                                                            ========    =====     ========     =====
KEY STATISTICS
  Revenue per day.........................................  $  35.72              $  34.65
  Charge days (in millions)...............................      21.2                  22.8
  Average fleet...........................................   304,460               323,874
  Fleet utilization.......................................      77.5%                 76.6%
</TABLE>

     Revenue declined $34.2 million or 4.3% which was primarily driven by
declines in charge day volume with the declines being realized in inbound
international tour business and affinity business. As previously discussed,
during the first quarter of 2001, we intentionally managed our mix of business
away from lower yielding channels, thereby causing the declines in volume in our
affinity business. We also expect declines in our inbound international tour
business to continue into the second quarter. Offsetting these declines in
volume were increases in revenue per day as compared to the fourth quarter of
2000 due to price increases in North America and other pricing actions.

     Direct operating costs declined $6.2 million primarily due to lower
variable transaction costs due to lower overall volumes as well as lower field
personnel costs.

     Vehicle depreciation decreased $16.9 million primarily due to a lower
overall average fleet as compared to the fourth quarter of 2000.

     Selling, general and administrative costs declined $10.6 million primarily
due to lower marketing and advertising costs, lower variable selling costs due
to lower revenue volume levels and reduced overhead spending.

                                        17
<PAGE>   20

     Interest expense components are as follows for the three month periods
indicated:

<TABLE>
<CAPTION>
                                                              MARCH 31,   DECEMBER 31,
                                                                2001          2000
                                                              ---------   ------------
<S>                                                           <C>         <C>
Vehicle interest expense....................................    $72.4        $ 81.3
Non-vehicle interest expense................................     17.1          18.7
                                                                -----        ------
                                                                $89.5        $100.0
                                                                =====        ======
</TABLE>

     The decrease in vehicle interest expense is due to lower average vehicle
debt outstanding in the current period coupled with lower average interest
rates. The decrease in non-vehicle interest expense is due primarily to lower
amortization of debt issue costs. Amortization of debt issue costs was
approximately $5.7 million for the first quarter of 2001 as compared to $6.7
million for the fourth quarter 2000.

CASH FLOWS

     The following discussion relates to the major components of changes in cash
flows for the three months ended March 31, 2001 and 2000.

  Cash Flows from Operating Activities

     Cash flows provided by operating activities were $94.7 million for the
three months ended March 31, 2001, and cash used in operating activities was
$351.6 million for the three months ended March 31, 2000. The increase in cash
flows provided by operating activities in 2001 as compared to 2000 is primarily
due to changes in working capital including lower vehicle manufacturer
receivables and reduced vehicle purchases. The decrease in amounts due from
manufacturers is primarily the result of the timing of cash receipts from
manufacturers for vehicle dispositions.

  Cash Flows from Investing Activities

     Cash flows provided by investing activities were $67.6 million for the
three months ended March 31, 2001, and cash flows used in investing activities
were $17.3 million for the three months ended March 31, 2000. The increase in
cash provided by investing activities, as previously discussed, is due to
proceeds from our sale and leaseback transactions. Cash flows used in investing
activities for capital additions during the three months ended March 31, 2001
were $12.8 million and during the three months ended March 31, 2000 were $19.8
million.

  Cash Flows from Financing Activities

     Cash flows used in financing activities for the three months ended March
31, 2001 were $79.3 million, and cash flows provided by financing activities
were $359.0 million for the three months ended March 31, 2000. The decrease in
cash flows from financing activities in 2001 as compared to 2000 is primarily
due to lower overall net proceeds from vehicle financings, the result of an
overall smaller average fleet. Additionally, in the first quarter of 2000 we
received a capital contribution from our former Parent of $180.0 million. Please
refer to our discussion on Financial Condition contained within the Management's
Discussion and Analysis of Financial Condition and Results of Operations.

FINANCIAL CONDITION

     Our capital structure consists of vehicle debt, non-vehicle debt (also
referred to on our balance sheet as "other debt"), and equity contributed to us
by our former Parent. Vehicle debt represents the debt programs used to finance
our fleet and consists of: (1) commercial paper programs; (2) asset-backed
medium-term note programs; and (3) various other committed and uncommitted fleet
facilities used to fund our European operations. Our non-vehicle financing
consists of: (1) a three-year secured revolving credit facility; (2) a one-year
supplemental revolving credit facility, which converts to a two-year term note;
(3) an interim loan agreement; (4) notes payable to a vehicle manufacturer used
for working capital; (5) a seller-financed

                                        18
<PAGE>   21

acquisition note payable; and (6) various international working capital
arrangements related to our European and Canadian operations.

  Vehicle Debt

     As of March 31, 2001 our commercial paper program was a $1.14 billion
single-seller commercial paper program. Borrowings under this program are
secured by eligible vehicle collateral and bear interest at market based
commercial paper rates. The program has been extended for an additional
sixty-day period beyond the May 11, 2001 expiration. The program is supported by
$1.095 billion of bank lines of credit which provide liquidity backup for the
facility, as well as $45.0 million of restricted cash, which provides credit
enhancement and additional liquidity.

     We have financed $200.0 million of our seasonal fleet capacity with a
variable funding note that will expire October 2001. Also, we have financed
maturing capacity with an auction-rate note program that has total capacity of
$531.3 million. During the sixty-day extension period for the single-seller
commercial paper program we expect to reduce our program to a smaller one
extending into a 364 day facility and/or other similar asset-backed financings.

     Our medium-term note financings mature at various dates through 2004 and
totaled $3.4 billion. In May 2001, as part of our efforts to replace maturing
capacity, we issued $600.0 million of rental vehicle asset-backed medium-term
notes at a floating rate based upon a spread over LIBOR, which as of May 9, 2001
approximated 4.59%. We capped the effective interest rate on these notes at
7.74% through the use of certain derivative instruments.

  Non-vehicle Debt

     In June 2000, we entered into a three-year secured revolving credit
facility with a borrowing base capacity of up to $175.0 million at a floating
rate, currently based upon a spread of 1.75% above LIBOR. We also have entered
into a supplemental secured revolving credit facility with availability of the
lesser of (1) $40.0 million and (2) an amount equal to $175.0 million less the
borrowing base of the $175.0 million secured revolving credit facility. As of
April 15, 2001, the borrowing base under the $175.0 million secured revolving
credit facility approximated $68.4 million, of which approximately $54.0 million
was used to support outstanding letters of credit. In connection with the
consummation of the sale and leaseback transactions through May 11, 2001 the
borrowing base under the $175.0 million secured revolving credit facility
decreased by approximately $39.3 million from December 31, 2000 levels. The
supplemental secured revolving credit facility has a term of one year, and will
be available until no later than May 31, 2001 to the extent there is no
availability for borrowings under the $175.0 million secured revolving credit
facility. Any amounts outstanding under the supplemental secured revolving
credit facility on its one year maturity date will be converted into a term loan
maturing on May 31, 2003. Interest on the supplemental secured revolving credit
facility will be payable at a floating rate, initially based upon a spread of
4.5% above LIBOR and increasing by 50 basis points on the first day of each
January, April, July and October commencing October 1, 2000. As of March 31,
2001 and April 30, 2001, no amounts were outstanding under either the secured or
supplemental secured revolving credit facilities. We intend to draw on the
supplemental secured revolving credit facility before the May 31, 2001 maturity.
We also expect to allow the indebtedness outstanding under the supplemental
secured revolving credit facility to convert into the term loan.

     We also entered into an agreement with a lender on June 30, 2000 for
interim financing of $225.0 million in connection with our separation from our
former Parent. The initial term of the interim financing is 12 months. The
interest rate on the interim financing is fixed at 13.5% during the term. The
interim financing requires us to pay commitment fees totaling up to $22.0
million, all of which was paid through March 31, 2001. If we do not refinance
the interim financing by June 30, 2001, the interim financing will extend into a
six-year term loan and we will be obligated to issue warrants representing up to
7.5% of our fully diluted capital stock and pay a fee approximating 3.0% of the
principal remaining outstanding under the interim financing. The term loan would
bear interest at an increasing rate starting at 13.5% and increase by 50 basis
points each 90 day period up to a maximum rate of 18.0%. The term loan may, at
the option of the lender, be

                                        19
<PAGE>   22

exchanged into a fixed rate note with a similar maturity. The warrants would
have a term of 10 years and would have an exercise price of $.01 per share. The
fair value of the warrants on the date of issuance would be treated as a note
discount and would be amortized as a component of interest expense over the term
of the refinancing. We are required to file registration statements with the
Securities and Exchange Commission which will register the fixed rate notes
referred to above and the shares of common stock issuable upon the exercise of
the warrants. To the extent we do not file these registration statements or they
are not declared effective within certain time constraints we will be required
to pay penalties. In connection with the consummation of our sale and leaseback
transactions, we would have been obligated to use the proceeds to prepay the
interim financing. As part of an amendment to such facility, the lender agreed
that such proceeds could be used for general corporate purposes and that on
September 30, 2001 we would be required to prepay the interim financing by
approximately $70.0 million. We currently expect that the interim facility will
extend into the term loan previously described and that we will be required to
issue the associated warrants. Had the warrants been issued as of March 31, 2001
we would have increased our fully diluted shares by approximately 3.7 million
shares and recorded a note discount of approximately $11.1 million, which will
amortize to interest expense over the term of the note.

     Our governing documents for our credit facilities and interim financing,
entered into during 2000, require us to maintain certain financial ratios
including, but not limited to financial performance measures and limits on
additional indebtedness. In addition these documents restrict our ability to:
sell assets; grant or incur liens on our assets; repay certain indebtedness; pay
dividends; make certain investments or acquisitions; issue certain guarantees;
enter certain sale and leaseback transactions; repurchase or redeem capital
stock; engage in mergers or consolidations; and engage in certain transactions
with our affiliates. As of and for the four quarters ended March 31, 2001 the
Company has complied with these financial covenants and other restrictions. Any
failure to comply with these restrictions would allow our lenders to accelerate
their indebtedness and seek other remedies available to secured lenders.

     Separately, we use interest rate derivative financial instruments to manage
the impact of interest rate changes on our variable rate debt. These derivative
instruments consist of interest rate caps and floors. The amounts exchanged by
the counterparties are based upon the notional amounts and other terms,
generally related to interest rates. Notional principal amounts related to
interest rate caps and floors as of March 31, 2001 were $1.75 billion and $800.0
million, respectively. The interest rate caps and floors effect a weighted
average interest rate of 6.15% as of March 31, 2001. Variable rates on the
interest rate caps and floors are indexed to LIBOR. Including our interest rate
derivatives, our ratio of fixed interest rate debt to total debt outstanding was
79% as of March 31, 2001.

     In the normal course of business, we are required to post performance and
surety bonds, letters of credit, and/or cash deposits as financial guarantees of
our performance. To date, we have satisfied financial responsibility
requirements for regulatory agencies and insurance companies by making cash
deposits, obtaining surety bonds or by obtaining bank letters of credit. At
March 31, 2001, we had outstanding surety bonds of approximately $130.0 million,
the majority of which expire during 2001. Because of our financial performance
and a difficult surety market we currently expect to provide our principle
surety provider a second priority security interest in certain fleet assets and
a third priority security interest in all corporate assets in the amount of our
outstanding surety bonds. We also expect to agree to certain limits on the
amount of senior secured debt we could incur without obtaining the consent of
our surety. Continued losses in excess of our plan will adversely affect our
financial condition and our ability to maintain or renew these surety bonds. In
addition, we can not assure you that our primary surety provider will continue
to consent to maintaining these surety bonds or provide new bonds or renew
existing bonds as needed, which could have a material adverse effect on our
business, consolidated results of operations and/or our financial condition.

  Financing Requirement

     As previously discussed, we have recently entered into sale and leaseback
transactions for substantially all of our owned land and buildings. As of March
31, 2001 we consummated transactions with approximately $79.0 million of net
proceeds, which during April was used for general corporate purposes. During the
second quarter through May 11, 2001, we consummated additional transactions
approximating $20.8 million of net
                                        20
<PAGE>   23

proceeds. We expect that during the remainder of the second quarter we will
complete additional transactions with $11.1 million of net proceeds. In
connection with our sale and leaseback transactions, we would have been
obligated to use the proceeds to prepay the interim financing. However, as part
of an amendment to such facility, the lender agreed that such proceeds could be
used for general corporate purposes and that on September 30, 2001 we would be
required to prepay the interim financing by approximately $70.0 million. In
part, as consideration for the receipt of these amendments we granted the lender
under our interim financing a lien on the proceeds of such sale, and we agreed
to grant such lender a second priority security interest in certain fleet assets
and a third priority security interest in all corporate assets.

     Continued losses in excess of our plan will adversely affect our financial
condition and may affect our ability to obtain incremental financing or to
comply with certain covenants contained within our loan agreements. There is no
assurance that we will be able to generate sufficient operating cash flows,
secure additional financing facilities to meet our on-going financing needs,
refinance existing indebtedness or comply with covenants in future periods.

FORWARD-LOOKING STATEMENTS

     Certain statements and information included in this Form 10-Q constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements contain or express our
intentions, beliefs, expectations, strategies or predictions for the future. In
addition, from time to time our representatives or we may make forward-looking
statements orally or in writing. Forward-looking statements included in the
report include, among other things, statements regarding our ability to secure
additional financing and refinance existing indebtedness.

     These forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause our actual results, performance
or achievements to be materially different from any future results, performance
or achievements expressed or implied by the forward-looking statements. These
factors include, among others, the effect of our indebtedness on our operations,
the availability and cost of capital, the impact of competition in the
automotive rental industry, costs and other factors related to the acquisition
and disposition of vehicles, including our reliance on repurchase programs and
automobile manufacturers, our reliance on our principal surety provider and
risks that our surety provider will call existing bonds or fail to provide
future bonds, the seasonal nature of our business and the impact of decreases in
air travel, the effects of legal proceedings and regulatory matters on our
business, and the impact of general economic conditions, as well as other
factors discussed in our Annual Report on Form 10-K and other filings which we
make with the Securities and Exchange Commission.

     We undertake no obligation to update or revise publicly any forward-looking
statement, whether as a result of new information, future events or otherwise,
other than as required by law. All subsequent written and oral forward-looking
statements attributable to us or persons acting on our behalf are expressly
qualified in their entirety by the cautionary statements contained in this
filing.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

     The tables below provide information about our market sensitive financial
instruments and constitute "forward-looking statements." All items described are
non-trading.

     Our major market risk exposure is changing interest rates, primarily in the
United States. Due to our limited foreign operations, we do not have material
market risk exposures relative to changes in foreign exchange rates. Our policy
is to manage interest rates through the use of a combination of fixed and
floating rate debt. We use interest rate derivatives to adjust interest rate
exposures when appropriate, based upon market conditions. These derivatives
consist of interest rate caps and floors which we enter into with a group of
financial institutions with investment grade credit ratings, thereby minimizing
the risk of credit loss. We use variable to fixed interest rate caps and floors
to manage the impact of interest rate changes on our variable rate debt.
Maturity dates for variable rate debt and interest rate swaps, caps and floors
are based upon contractual maturity dates. Average pay rates under interest rate
swaps are based upon contractual fixed rates. Average

                                        21
<PAGE>   24

variable receive rates under interest rate swaps are based on implied forward
rates in the yield curve at the reporting date. Average rates under interest
rate caps and floors are based upon contractual rates.

     Fair value estimates are made at a specific point in time, based on
relevant market information about the financial instrument. These estimates are
subjective in nature and involve uncertainties and matters of significant
judgment. The fair value of variable rate debt approximates the carrying value
since interest rates are variable and, thus, approximate current market rates.
The fair value of interest rate caps and floors is determined from valuation
models which are then compared to dealer quotations and represents the
discounted future cash flows through maturity or expiration using current rates,
and is effectively the amount we would pay or receive to terminate the
agreements. The fair value of interest rate swaps is determined from dealer
quotations and represents the discounted future cash flows through maturity or
expiration using current rates, and is effectively the amount we would pay or
receive to terminate the agreements.

<TABLE>
<CAPTION>
                                                     EXPECTED MATURITY DATE                                FAIR VALUE
                                     -------------------------------------------------------               MARCH 31,
MARCH 31, 2001:                       2001     2002     2003     2004     2005    THEREAFTER    TOTAL         2001
---------------                      ------   ------   ------   ------   ------   ----------   --------   ------------
                                                                       (IN MILLIONS)
<S>                                  <C>      <C>      <C>      <C>      <C>      <C>          <C>        <C>
(Asset)/Liability
Variable rate debt.................  $897.2   $590.9   $500.0   $700.0   $   --     $   --     $2,688.1     $2,688.1
  Average interest rates...........    5.28%    5.42%    5.22%    5.26%      --         --           --           --
Interest rate caps.................      --    550.0    500.0    700.0       --         --      1,750.0        (14.8)
  Average rate.....................      --     5.73%    7.30%    6.26%      --         --           --           --
Interest rate floors...............      --       --    500.0    300.0       --         --        800.0         50.5
  Average rate.....................      --       --     7.30%    6.26%      --         --           --           --
</TABLE>

<TABLE>
<CAPTION>
                                                     EXPECTED MATURITY DATE                                FAIR VALUE
                                     -------------------------------------------------------              DECEMBER 31,
DECEMBER 31, 2000:                    2001     2002     2003     2004     2005    THEREAFTER    TOTAL         2000
------------------                   ------   ------   ------   ------   ------   ----------   --------   ------------
                                                                       (IN MILLIONS)
<S>                                  <C>      <C>      <C>      <C>      <C>      <C>          <C>        <C>
(Asset)/Liability
Variable rate debt.................  $760.0   $595.6   $500.0   $700.0   $   --     $   --     $2,555.6     $2,555.6
  Average interest rates...........    6.73%    6.98%    6.90%    6.94%      --         --           --           --
Interest rate caps.................      --    550.0    500.0    700.0       --         --      1,750.0        (24.7)
  Average rate.....................      --     5.73%    7.30%    6.26%      --         --           --           --
Interest rate floors...............      --       --    500.0    300.0       --         --        800.0         34.0
  Average rate.....................      --       --     7.30%    6.26%      --         --           --           --
</TABLE>

                                        22
<PAGE>   25

                          PART II -- OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     Not applicable.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

     Not applicable.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

     Not applicable.

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

     Not applicable.

ITEM 5.  OTHER INFORMATION

     Not applicable.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER   DESCRIPTION
-------  -----------
<S>      <C>
4.1      Second Amendment, dated as of March 29, 2001, to the Amended
         and Restated Senior Loan Agreement, dated as of June 30,
         2000, among ANC Rental Corporation, Lehman Brothers Inc.,
         and Lehman Commercial Paper Inc.
4.2      Second Amendment, dated as of March 29, 2001, to the Amended
         and Restated Credit Agreement, dated as of June 30, 2000,
         among ANC Rental Corporation, Lehman Brothers Inc., Lehman
         Commercial Paper Inc., and Congress Financial Corporation
4.3      Second Amendment, dated as of March 29, 2001, to the Amended
         and Restated Credit Agreement, dated as of June 30, 2000,
         among ANC Rental Corporation, Lehman Brothers Inc., and
         Lehman Commercial Paper Inc.
10.1     ANC Rental Corporation Key Employee Severance Protection
         Plan
</TABLE>

(b) REPORTS ON FORM 8-K.

     Form 8-K, dated January 31, 2001 (filed January 31, 2001), Item 9,
reporting ANC Rental Corporation annual results for the year ended December 31,
2000.

     Form 8-K, dated January 2, 2001 (filed January 2, 2001), Item 5, reporting
ANC Rental Corporation revised fourth quarter expectations and changes in senior
management.

                                        23
<PAGE>   26

                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

<TABLE>
<S>                                             <C>
                                                ANC RENTAL CORPORATION

Dated: May 14, 2001                             By: /s/ KATHLEEN W. HYLE
                                                -----------------------------------------------------
                                                Kathleen W. Hyle
                                                Senior Vice President and Chief Financial Officer
                                                (Principal Financial Officer and
                                                Duly Authorized Officer)
</TABLE>

                                        24