DOLLAR THRIFTY AUTOMOTIVE GROUP INC
10-K, 2000-03-22
AUTO RENTAL & LEASING (NO DRIVERS)
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- --------------------------------------------------------------------------------
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                              --------------------

                                    FORM 10-K

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

For the fiscal year ended December 31, 1999
                                       OR

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

For the transition period from ___________ to ________________

                         Commission file number 1-13647

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

                      DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
             (Exact name of registrant as specified in its charter)

                Delaware                                  73-1356520
      (State or other jurisdiction of                  (I.R.S. Employer
      incorporation or organization)                    Identification No.)

                  5330 East 31st Street, Tulsa, Oklahoma 74135

              (Address of principal executive offices and zip code)

       Registrant's telephone number, including area code: (918) 660-7700

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

       Title of each class:          Name of each exchange on which registered:

  Common Stock, $.01 par value                  New York Stock Exchange

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

     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____

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

         The aggregate  market value of the voting and non-voting  common equity
held  by   non-affiliates  of  the  registrant  as  of  February  29,  2000  was
$272,179,543.

         The number of shares outstanding of the registrant's Common Stock as of
February 29, 2000 was 24,160,598.

                       DOCUMENTS INCORPORATED BY REFERENCE

         Portions of the  definitive  Proxy  Statement for the Annual Meeting of
Stockholders  to be held on May 25, 2000 are  incorporated  by reference in Part
III.

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

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                      DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
                                    FORM 10-K

                                    CONTENTS

PART I

         ITEM 1.   BUSINESS.................................................   4
         ITEM 2.   PROPERTIES...............................................  22
         ITEM 3.   LEGAL PROCEEDINGS........................................  22
         ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS......  22
PART II

         ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY
                   AND RELATED STOCKHOLDER MATTERS..........................  23
         ITEM 6.   SELECTED FINANCIAL DATA..................................  24

         ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                   CONDITION AND RESULTS OF OPERATIONS......................  26

         ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES
                   ABOUT MARKET RISK........................................  35
         ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA .............  36

         ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                   ON ACCOUNTING AND FINANCIAL DISCLOSURE...................  63

PART III

         ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.......  63
         ITEM 11.  EXECUTIVE COMPENSATION...................................  63

         ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                   OWNERS AND MANAGEMENT....................................  63
         ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...........  63


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PART IV

         ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
                  REPORTS ON FORM 8-K.......................................  64

SIGNATURES..................................................................  70
INDEX TO EXHIBITS...........................................................  71


                  FACTORS AFFECTING FORWARD LOOKING STATEMENTS

         Some  of  the  statements   contained   herein  under   "Business"  and
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations" may constitute  forward-looking statements within the meaning of the
Private  Securities  Litigation  Reform  Act of 1995.  Although  Dollar  Thrifty
Automotive  Group, Inc.  believes such  forward-looking  statements are based on
reasonable assumptions, such statements are not guarantees of future performance
and  certain  factors  could cause  results to differ  materially  from  current
expectations.  These factors  include:  economic and  competitive  conditions in
markets and  countries  where our  customers  reside and where our companies and
their franchisees  operate;  changes in capital  availability or cost; costs and
other terms  related to the  acquisition  and  disposition  of  automobiles  and
certain regulatory and environmental matters.  Should one or more of these risks
or  uncertainties,   among  others,  materialize,   actual  results  could  vary
materially  from those  estimated,  anticipated  or  projected.  Dollar  Thrifty
Automotive   Group,   Inc.   undertakes   no  obligation  to  update  or  revise
forward-looking  statements to reflect  changed  assumptions,  the occurrence of
unanticipated events or changes to future operating results over time.


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                                       4


                                     PART I
                                     ------

ITEM 1.     BUSINESS

Company Overview

         Dollar Thrifty  Automotive  Group,  Inc., a Delaware  corporation  (the
"Company"),  owns two vehicle rental companies,  Dollar Rent A Car Systems, Inc.
("Dollar"),  and Thrifty Rent-A-Car System, Inc. Thrifty Rent-A-Car System, Inc.
is an indirect  subsidiary of the Company as it is a wholly owned  subsidiary of
Thrifty,  Inc. (Thrifty,  Inc.,  Thrifty  Rent-A-Car System,  Inc. and all their
respective  subsidiaries  are  individually  or  collectively,  as  the  context
requires,  referred to  hereafter  as  "Thrifty").  Dollar and Thrifty and their
respective independent franchisees operate the Dollar and Thrifty vehicle rental
systems as  separate  businesses.  The Dollar and  Thrifty  brands  represent  a
value-priced  rental  vehicle  generally  appealing  to  leisure  customers  and
tourists,  including foreign  tourists,  and to small businesses and independent
business  travelers.  As of  December  31,  1999,  Dollar  and  Thrifty  had 973
locations in the United States and Canada of which 149 were company-owned stores
and 824 were locations  operated by  franchisees.  While Dollar and Thrifty have
franchisees  in countries  outside the United  States and Canada,  revenues from
these franchisees have not been material to results of operations of the Company
and its consolidated subsidiaries  (collectively,  the "Group").  Dollar's gross
revenues  comprise  approximately  74%  of the  Group's  revenues  with  Thrifty
contributing the remaining 26% of revenues.

         The businesses of Dollar and Thrifty  complement  each other,  although
they have separate and different approaches to the vehicle rental market. In the
United States,  Dollar's main focus is operating company-owned stores located at
major  airports,  and it  derives  substantial  revenues  from tour and  leisure
rentals.  Thrifty operates almost exclusively  through  franchisees serving both
the airport and local markets.  Dollar  derives a majority of its U.S.  revenues
from providing rental vehicles and services directly to rental customers,  while
Thrifty  derives its  revenues  primarily  from  franchising  fees and  services
including  vehicle  leasing.  Thrifty's U.S.  franchisees  provide  vehicles and
services  to the  rental  customer.  Dollar  incurs the costs of  operating  its
company-owned stores and its revenues are directly affected by changes in rental
demand. As Thrifty operates primarily through franchisees, it does not incur the
costs of operating the franchised locations and does not generally deal directly
with rental customers.  Therefore,  changes in levels of customer demand tend to
affect Thrifty's results less quickly than those of Dollar. See Note 15 of Notes
to Consolidated Financial Statements for business segment information.

         The Company was  incorporated  on November 4, 1997. It is the successor
to Pentastar  Transportation Group, Inc. which was formed in 1989 to acquire and
operate  the rental  car  subsidiaries  of  Chrysler  Corporation,  now known as
DaimlerChrysler Corporation ("DaimlerChrysler"). Dollar was incorporated in 1965
and  Thrifty  was  incorporated  in 1950.  Thrifty,  Inc.,  which was  formed in
December 1998,  directly owns Thrifty  Rent-A-Car  System,  Inc. and Thrifty Car
Sales, Inc.  ("Thrifty Car Sales"),  which operates a franchised retail used car
sales network.

         On December 23, 1997, the Company completed its initial public offering
of Common Stock (the  "Offering")  after  registration  with the  Securities and
Exchange  Commission  ("SEC")  on  Form  S-1.  Upon  closing  of  the  Offering,
22,500,000 shares of Common Stock were sold at an initial price to the public of
$20.50 per share.  In addition,  the  underwriters  exercised an over  allotment
option and acquired an additional  1,125,000 shares for the same price, less the
applicable   underwriter's  discount.  Of  the  shares  sold  in  the  Offering,
20,000,000 shares were sold by DaimlerChrysler,  which prior to the Offering was
the parent of the Company,  and  3,625,000  shares were sold by the Company.  On
January 15, 1998, the underwriters exercised a second and final portion of their
over allotment option, purchasing an additional 498,105 shares of Common Stock.

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         In connection  with the Offering,  the Company  completed new financing
arrangements.  On December 23,  1997,  the Company  closed a $900 million  asset
backed  medium term note  program,  together  with a Revolving  Credit  Facility
(hereinafter  defined). In addition, on March 4, 1998, the Company established a
Commercial Paper Program  (hereinafter  defined) backed by a Liquidity  Facility
(hereinafter  defined).  Proceeds of the medium term notes and commercial  paper
are used to finance  vehicles  used by Dollar and Thrifty for their  operations.
The Revolving  Credit  Facility was established to provide letters of credit for
financing and operational  needs and to meet the Group's borrowing needs for its
other  business  operations.   See  "Management's  Discussion  and  Analysis  of
Financial   Condition   and  Results  of  Operations  -  Liquidity  and  Capital
Resources."

Industry Overview

         The U.S. daily vehicle rental industry has two principal  markets:  the
airport market and the local market.  Vehicle rental companies that focus on the
airport market rent primarily to business and leisure travelers. Vehicle rentals
from airport locations account for the largest portion of vehicle rentals in the
United States.  Companies focusing on the local market rent primarily to persons
who need a vehicle  periodically  for  personal or business use or who require a
temporary  replacement  vehicle.  Rental  companies  also sell used vehicles and
ancillary products such as refueling services and loss damage waivers.

         Vehicle rental  companies  typically incur  substantial debt to finance
the ongoing  turnover of their  rental  fleets.  They also  typically  acquire a
majority  of their  fleets  under  manufacturer  residual  value  programs  that
repurchase  or  guarantee  the  resale  value of Program  Vehicles  (hereinafter
defined)  at  particular  times in the future.  This allows a rental  company to
predict this important  element of its cost structure.  The Program Vehicles and
the related  obligations of the  manufacturers  are used as collateral for fleet
financing.

         Most of the major  domestic  vehicle rental car companies were formerly
owned by domestic  automotive  manufacturers.  The industry has seen significant
changes in the last few years.  Cendant  Corporation  purchased Avis Rent A Car,
Inc. and subsequently sold 70% of Avis to the public. AutoNation, Inc. (formerly
Republic Industries,  Inc.), acquired National Car Rental System, Inc. and Alamo
Rent-a-Car,  Inc.,  and Team Rental  Group Inc.  (renamed  Budget  Group,  Inc.)
acquired Budget Rent a Car Corporation  from Ford Motor Company  ("Ford").  Ford
sold a minority  interest in The Hertz  Corporation to the public.  Accordingly,
most of the major companies in the industry are now publicly held, including the
Company. The Company believes these changes have led to increased industry focus
on profitability and shareholder returns.

Seasonality

         The  Company's  business is subject to seasonal  variations in customer
demand, with the summer vacation period representing the peak season for vehicle
rentals.  This general seasonal  variation in demand,  along with more localized
changes  in  demand,  caused the Group to vary its fleet size over the course of
the year. In 1999, the Group's  average  monthly fleet size ranged from a low of
approximately  77,000  vehicles in the first quarter to a high of  approximately
118,000 vehicles in the third quarter.

Dollar

         General

         Dollar's main focus is serving the airport vehicle rental market, which
is composed of business and leisure travelers. The majority of its locations are
on or near airport facilities.  Dollar operates primarily through  company-owned
stores in the United  States,  and also licenses to  independent  franchisees to
operate as a part of the Dollar system in the United  States and abroad.  All of
its Canadian and international operations are franchised.

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                                       6


         Dollar's  services  and  products  include  fleet  leasing,  marketing,
centralized  reservations,   counter  automation,  insurance,  central  billing,
supplies and training and operational support. Dollar's company-owned stores and
franchisees  rent vehicles on a daily,  weekend,  weekly and monthly  basis,  at
varying rates depending on cost and other competitive factors in each location's
market.  In  addition  to  vehicle  rentals,  Dollar  and its  franchisees  sell
ancillary products and rent supplemental  equipment.  To meet seasonal and other
demand changes,  Dollar shifts vehicles among its company-owned  stores and U.S.
franchisees.  Revenues from Dollar's  franchisees  outside the United States and
Canada have not been material to its results of operations.

         As of December 31, 1999,  Dollar's  vehicle rental system  included 289
locations  in the United  States and  Canada,  consisting  of 116  company-owned
stores and 173 that were  operated by  franchisees.  Dollar's  total revenue was
$735 million in 1999, of which $685 million (93%) was generated by company-owned
stores and $50 million  (7%) was revenue  from  Dollar  franchisees  for vehicle
leasing fees and other service and product fees and other revenue.

         Dollar operates  primarily through  company-owned  stores,  and through
franchisees in key U.S. leisure destinations and in other U.S. locations. Dollar
has  company-owned  stores in 39 of the 50  largest  U.S.  airport  markets  and
franchisees in the remaining 11 markets.  When opportunities  arise,  Dollar may
acquire  operations from franchisees and convert them to  company-owned  stores.
Dollar converted two franchised operations to company-owned  operations in 1995,
four in 1996, three in 1997 and two in 1998. On March 13, 2000,  Dollar acquired
the  franchised  operations  of  its  largest  Texas  licensee,  which  includes
operations in San Antonio,  Corpus  Christi,  Midland/Odessa,  and other smaller
markets.  Dollar  generally  has  rights  of  first  refusal  on the  sale  of a
franchised operation.

         Dollar  sold its  company-owned  store in  Colorado  Springs in October
1998,  including  a license to  operate  Aspen,  Grand  Junction  and  Gunnison,
Colorado.  This  transaction  was consistent  with Dollar's  strategy to license
markets of this size in order to grow the Dollar system.

         Company-Owned Stores

         Dollar believes that having  company-owned stores in most of the top 50
airport markets and other key markets enhances its ability to manage its vehicle
rental system and fleet.  Dollar can implement  marketing and pricing strategies
to focus on discretionary  leisure and business travelers,  reduce costs through
bulk  purchasing,  apply  performance  benchmarks and develop and implement best
practice management techniques nationwide.  Its company-owned store network also
allows Dollar to offer customers one-way rentals in certain markets.

         Vehicle  rentals  by  customers  of  foreign  and U.S.  tour  operators
generated  approximately  30% of Dollar's rental revenues in 1999. These rentals
are  usually  part of tour  packages  that also  include  air  travel  and hotel
accommodations.   Rentals  to  tour  customers  have  certain  advantages.  Tour
customers tend to reserve vehicles  earlier than other customers,  rent them for
longer periods and cancel  reservations less frequently.  Dollar has significant
relationships  with foreign and domestic tour  operators that resulted in rental
revenue of $206 million in 1999.

         Dollar is the exclusive  U.S.  vehicle  rental company for three of its
five  largest  tour  operator  accounts.  Its  arrangement  with the other  tour
operator  accounts are  non-exclusive.  The  agreements  for these five accounts
expire from  December  31, 2001 to December 31,  2009.  No single tour  operator
account generated in excess of 5% of the Group's 1999 revenues.

         As of December  31, 1999,  Dollar had vehicle  rental  concessions  for
company-owned stores at 59 airports in the United States. Its payments for these
concessions are usually based upon a specified  percentage of  airport-generated
revenue,  subject to a minimum annual fee, and sometimes  include fixed rent for
terminal counters or other leased properties and facilities.

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                                       7


         Services and Products Provided to Rental Customers

         Worldwide   Reservation   System.   Dollar  has  continuously   staffed
reservation  facilities  at  its  headquarters  in  Tulsa,  Oklahoma  and at its
facility in Tahlequah, Oklahoma. Dollar's reservation facilities, as well as the
major U.S. airline global distribution systems, are linked to Dollar's worldwide
reservation  computer and  telecommunications  system,  which is also located in
Tulsa,  Oklahoma.  Dollar's reservation  facilities  collectively  processed 8.1
million reservation  telephone calls during 1999.  Approximately 40% of Dollar's
1999  non-tour  vehicle  rentals were booked by travel  agents  through  airline
distribution  systems.  Dollar has preferred supplier agreements with many major
travel agency chains and travel consortia. Reservations to Dollar's Internet web
site,  (www.dollar.com),  increased 182% in 1999 to approximately 246,000 booked
reservations.

         Supplemental  Equipment and Optional Products.  Dollar rents ski racks,
mobile telephones,  baby seats and other supplemental  equipment and, subject to
availability  and applicable  local law, makes available loss damage waivers and
insurance products related to the vehicle rental.

         Instant Return.  Dollar offers customers instant return service at most
of its U.S. airport company-owned stores.  When a customer returns a  vehicle at
one of these locations,   a representative  meets the  customer  and  provides a
receipt from a hand-held computer terminal.

         Information Systems

         Dollar depends upon a number of core information systems to operate its
business,  primarily its counter automation and revenue management systems.  The
counter automation system in Dollar's  company-owned stores facilitates the sale
of  additional  products and services and allows Dollar to monitor its fleet and
financial assets.  Dollar introduced its new rental counter  automation  system,
FASTLANE(R),  for company-owned  stores in the continental United States (except
Florida)  in 1998 and  Hawaii  in 1999.  In 1998,  Dollar  developed  a  revenue
management  system with Talus,  a leading  supplier  of such  systems,  which is
utilized  in all of  Dollar's  company-owned  stores.  The system is designed to
enable Dollar to better determine rental demand based on historical  reservation
patterns and adjust its rental rates accordingly.

         Dollar  has  entered  into an  agreement  with The  SABRE  Group,  Inc.
("SABRE"), a leader in electronic  distribution systems for the travel industry,
to  manage  and  monitor  its data  center  network  and its  daily  information
processing. All of Dollar's key systems are housed in a secure underground SABRE
facility in Oklahoma designed to withstand disasters.

         Dollar's core information systems were updated to address the Year 2000
issues as  discussed  in  "Management's  Discussion  and  Analysis of  Financial
Condition and Results of Operations - Year 2000."

         Customer Service and Employee Training

         Dollar has programs at its headquarters and in company-owned  stores to
improve customer service. Customer First!, Dollar's quality improvement program,
involves establishing a team at each vehicle rental location that is accountable
for customer  satisfaction.  Dollar's  customer service center measures customer
satisfaction,  tracks service quality trends,  handles  customer  complaints and
provides  recommendations  to Dollar's  senior  management  and  vehicle  rental
location   supervisors.   Dollar  conducts  initial  and  ongoing  training  for
company-owned  store and franchisee  employees  through education centers in San
Francisco, Tulsa, Newark, Denver, Los Angeles and Cleveland.


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         Orlando Operations

         Central  Florida,  with  its  many  tourist  attractions,  is the  most
important  leisure  destination  for  Dollar.  Dollar's  company-owned  store at
Orlando International Airport has a mix of tour and retail business. Dollar also
operates a facility at the Orlando Sanford International Airport, 25 miles north
of Orlando, which mainly serves charter flights by foreign tour operators.  This
facility,  which was  specifically  designed  to handle tour  customers,  has 42
rental stations and parking for approximately 1,600 vehicles.

         Franchising

         United States and Canada

         Approximately  7% of Dollar's  1999  revenues in the United  States and
Canada  consisted  of leasing  revenue and fees from its  franchisees  and other
revenues.  Dollar sells its U.S.  franchises on an exclusive  basis for specific
geographic areas. Most franchisees are located at or near airports that generate
a lower  volume  of  vehicle  rentals  than  the  airports  served  by  Dollar's
company-owned stores. Dollar also makes a fleet leasing program available to its
U.S. franchisees, which in 1999 accounted for approximately 4% of Dollar's total
revenue. As of December 31, 1999, Dollar had franchised operations located in 26
countries.   In  Canada,   Dollar's  master  franchisee   directly  operates  or
subfranchises  34 airport and suburban  locations.  See "Fleet  Acquisition  and
Management -- Fleet Leasing Programs."

         Dollar  licenses its  franchisees to use Dollar's  service marks in the
vehicle rental and leasing,  parking and used car sales businesses.  Franchisees
pay Dollar an initial franchise fee generally based on the population, number of
airline  passengers,  total airport vehicle rental revenues and the level of any
other vehicle  rental  activity in the  franchised  territory,  as well as other
factors.

         System Fees. In addition to an initial franchise fee, in 1999 each U.S.
franchisee was generally required to pay Dollar a system fee on their rental car
revenue  equal to 8% of gross  rental  revenue  on a monthly  basis for  airport
operations (7% in 1998 and 6% in 1997) and 6% for suburban operations.

         Franchisee  Services  and  Products.  Dollar makes  insurance  coverage
available to its  franchisees  and provides them with  training and  operational
assistance,   site  selection  guidance,  vehicle  damage  recovery  and  claims
management  advice,  sales assistance and image and standards  guidance.  Dollar
also provides them with fleet  planning and customer  satisfaction  programs and
sells them  certain  Dollar-branded  supplies.  In addition,  Dollar  offers its
franchisees rental rate management analysis,  corporate account and tour billing
and travel agent commission  payments.  Dollar franchisees are connected to, and
pay  Dollar  a  fee  for,  each  reservation  made  through  Dollar's  worldwide
reservation system.

         International

         Master  franchisees,  direct  franchisees  and  subfranchisees  operate
Dollar's vehicle rental locations outside the United States.  Master franchisees
are authorized to use Dollar's service marks and business methods in territories
in which they operate  directly or through  subfranchisees,  and are responsible
for  promoting  the Dollar  brand name and its  services  and  products  and for
developing and supporting their direct operations and  subfranchisees.  Dollar's
revenues from international franchise operations were less than 1% of 1999 total
revenue.

         Effective February 29, 2000, Dollar terminated its reservation transfer
agreement with Europcar  International,  S.A., a  European-based  vehicle rental
company ("Europcar") and thereafter began exchanging reservations with Sixt, AG,
a major  European  rental car company,  which operates over 1,500 rental outlets
principally in Europe and North Africa.


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                                       9


         The  number  of  foreign  locations  or  Dollar  system-wide  locations
disclosed in this report do not include the Europcar or Sixt locations.

         Marketing

         National Advertising and Promotion

         Dollar's  primary  marketing  objective is to convey to cost  conscious
leisure  and   business   travelers   that  Dollar  is  committed  to  providing
lower-priced  vehicle rentals than its  competitors.  Dollar also emphasizes its
operations in Florida, California, Hawaii, Nevada and Arizona, which are popular
leisure  destinations.  Dollar's  national  advertising  programs build on these
themes through  weekly  advertisements  in U.S.  newspaper  travel  sections and
advertisements in USA Today.  Dollar also advertises on U.S. broadcast and cable
television networks, promoting its low rates and on-airport convenience.  Dollar
spends  approximately  5% of its  annual  total  U.S.  system-wide  revenues  on
marketing,  advertising,  public  relations  and sales  promotions.  Dollar  has
national  marketing  partnerships  with  major  U.S.  airlines'  frequent  flier
programs in order to attract  customers who value  frequent flier awards as well
as low vehicle rental rates.

         Dollar  encourages   franchisees,   as  well  as  local  management  of
company-owned  stores,  to develop local market  relationships  and retail sales
initiatives that coordinate with Dollar's national advertising programs.  Dollar
makes available print and broadcast advertising materials to franchisees for use
in local markets,  and pays a promotional  allowance for qualifying  advertising
expenditures to the franchisees that participate in Dollar's fleet program.

         Dollar  has  made  filings  under  the  intellectual  property  laws of
jurisdictions in which it or its franchisees operate,  including the U.S. Patent
and Trademark  Office, to protect the names,  logos and designs  identified with
Dollar. These marks are important for customer awareness and selection of Dollar
for vehicle rental.

         Strategic Marketing Efforts

         Travel agencies book  approximately  40% of Dollar's  non-tour  vehicle
rentals through the major U.S. airline global distribution systems. Major travel
agency chains and consortia  operate under  preferred  supplier  agreements with
Dollar and are  supported  by Dollar's  sales  department.  Under its  preferred
supplier  arrangements,  Dollar  provides these travel agency groups  additional
commissions  or lower  prices in  return  for  their  featuring  Dollar in their
advertising  or  giving  Dollar a  priority  in their  reservation  systems.  In
general,  these arrangements are not exclusive to Dollar, and many travel agency
groups have similar arrangements with other vehicle rental companies.

         During 1999,  Dollar  received  approximately  14% of its  reservations
through its www.dollar.com web site and other internet travel sites. Dollar will
continue  to  invest  in its  www.dollar.com  web  site  and  plans  to roll out
additional  improvements  in early 2000.  In January  2000,  Gomez  Advisors,  a
recognized resource in providing consumer and business-based e-commerce research
tools and analysis,  rated  dollar.com as the No. 1 car rental site on the Gomez
Advisors Winter 1999-2000 Internet Car Rentals Scorecard.

         In January 2000, Dollar launched the first full-service travel web site
sponsored  by a car rental  company.  DollarTravel.com  is powered by  TRIP.com,
which offers  consumers  online access to more than 500 airlines,  40,000 hotels
and 45 car rental companies.


<PAGE>
                                       10



Summary Operating Data of Dollar

                                                  Years Ended December 31,
                                            ------------------------------------
                                               1999         1998         1997
                                            ----------   ----------   ----------
                                                       (in thousands)

Revenues:
      U.S. Company-owned stores              $ 682,769    $ 605,187    $ 559,610
      U.S. and Canada franchisees               47,848       50,011       51,256
      International franchisees                  2,547        3,100        3,427
      Other                                      1,847        1,824        1,989
                                            ----------   ----------   ----------
         Total revenues                      $ 735,011    $ 660,122    $ 616,282
                                            ==========   ==========   ==========



                                                     As of December 31,
                                            ------------------------------------
                                               1999         1998         1997
                                            ----------   ----------   ----------

Rental Locations:
      U.S. Company-owned stores                    116          114          103
      U.S. and Canada franchisee locations         173          154          152

Franchisees:
      U.S. and Canada                               77           73           70
      International                                 40           50           49



<PAGE>
                                       11



Thrifty

         General

         Thrifty's main focus is on franchising and franchise  support services.
Thrifty also  operates  company-owned  stores in six cities in the United States
and Canada.  Thrifty's  U.S.  company-owned  stores and its  franchisees  derive
approximately  60% of their combined rental revenues from the airport market and
approximately 40% from the local market.  Thrifty's approach of serving both the
airport and local markets within each territory  allows many of its  franchisees
and company-owned stores to have multiple locations to improve fleet utilization
and  profit  margins  by moving  vehicles  among  locations  to  better  address
differences in demand between their markets. As airports have begun to institute
fees for vehicle rental companies located outside their  properties,  or limited
these companies'  access to airport  travelers,  Thrifty  franchisees have begun
moving to on-airport locations.

         As of December 31, 1999,  Thrifty's  vehicle rental system included 684
rental locations in the United States and Canada, divided between 651 franchisee
locations  and 33  company-owned  stores.  The Thrifty  system also included 610
locations  abroad,  all of which  were  franchisee  locations.  Thrifty's  total
corporate  revenue was $263  million in 1999,  of which $229  million  (87%) was
revenue from franchisees in the form of fleet leasing fees and other service and
product  fees and $34  million  (13%) of which was  generated  by  company-owned
stores. Revenues from Thrifty's franchisees outside the United States and Canada
have not been material to its results of operations.

         Franchising

         United States

         Thrifty's  U.S.  franchisees  are the  core of its  operations  and are
essential  to  its  long-term  profitability  and  growth.  Thrifty  offers  its
franchisees a full line of services and products not easily or  cost-effectively
available from other sources.  Thrifty actively  promotes  franchisee  financial
stability  and growth and seeks  opportunities  to enhance  its  vehicle  rental
system by improving its services to franchisees,  particularly its fleet leasing
programs,  and by  developing  new  franchisee  revenue  opportunities,  such as
airport  parking and truck  rental.  Thrifty  also works  closely  with its U.S.
franchisees in formulating and implementing marketing and operating strategies.

         Thrifty  licenses  its U.S.  franchisees  to use its service  marks and
participate  in its various  services  and systems.  Franchisees  pay Thrifty an
initial  franchise  fee based on such factors as the  population,  the number of
airline  passengers,  and total airport vehicle rental revenues and the level of
any other vehicle rental  activity in the franchised  territory.  Franchises are
sold on an exclusive basis for a specific geographical territory, usually a city
or metropolitan area. Over the past five years,  Thrifty's  franchisee  turnover
has averaged  approximately  9% per year, with an average of 16 terminations and
24 new sales (including new territories added to existing franchise  agreements)
per year.

         Initial  Franchise Fees,  System Fees and Advertising  Fees.  Thrifty's
initial  franchise  fees are  negotiated  on a  case-by-case  basis,  and may be
structured to promote  expansion of an existing  franchisee's  operations into a
contiguous area. In addition to the initial franchise fee, its U.S.  franchisees
pay Thrifty an administrative fee, which is generally 3% of base rental revenue,
excluding ancillary products.

         U.S. franchisees also pay an advertising fee ranging from 2.5% to 5% of
base  rental  revenue  to  a  separate   advertising  fund  managed  jointly  by
franchisees and Thrifty management.  Thrifty has implemented,  and may implement
in the future,  special short-term  reductions in system and advertising fees to
encourage growth.


<PAGE>
                                       12


         For  1999,   Thrifty's   five   largest  U.S.   franchisees   generated
approximately  19% of Thrifty's total  corporate  revenue in the form of system,
fleet leasing, reservation and other fees.

         Marketing to Prospective Franchisees. Thrifty has developed programs to
attract additional franchisees in the vehicle rental industry.  Programs include
attracting   independent  vehicle  rental  companies  with  phased-in  fees  and
competitive fleet leasing terms,  assisting  individuals  experienced in vehicle
rental operations to operate their own franchises through financial  assistance,
start-up  fleet  supply and other  support.  Thrifty  also  encourages  existing
franchisees to acquire and expand into neighboring territories by offering fleet
incentives,  reduced  administrative  and  advertising  fees and  lower  initial
franchise fees for additional territories.

         Fleet  Leasing  Program.  Thrifty  has  a  fleet  leasing  program  for
franchisees  that it believes  provides  them with a  competitive  and  flexible
source of fleet vehicles. In 1999, fleet leasing accounted for approximately 72%
of Thrifty's total revenue.

See "Fleet Acquisition and Management-- Fleet Leasing Programs."

         Training and Support.  Thrifty's  franchisees  receive required initial
orientation and ongoing  training in areas such as customer  service and hiring.
In early 1997,  Thrifty began  implementing its "True Blue Pride  Initiative" to
identify areas  requiring  customer  service  improvements  and to implement new
standards to deliver faster and friendlier service.  This initiative  emphasizes
the role that franchisee  customer service  employees should have in identifying
and resolving customer complaints. New programs that have been developed as part
of the initiative  include Thrifty's  frequent renter program,  Blue Chip, which
provides for preprinted rental contracts and expedited service.

         Thrifty also publishes a comprehensive operating manual for franchisees
and provides operational support in areas such as cost control,  fleet planning,
revenue  management and local  advertising  and marketing.  Thrifty also assists
franchisees  on real  estate  matters,  including  site  selection  and  airport
facility issues.

         Worldwide  Reservation Center and Other Information Systems.  Thrifty's
franchisees benefit from Thrifty's  continuously  staffed worldwide  reservation
centers at its headquarters in Tulsa,  Oklahoma and its reservation  facility in
Okmulgee,  Oklahoma,  which in 1999,  collectively  processed  approximately 4.3
million telephone calls.  Thrifty's reservation  facilities are linked to all of
the major U.S. airline  reservation  systems and through them to travel agencies
in the  United  States,  Canada and  abroad.  These  centers  are a key means of
marketing the Thrifty  system to consumers and travel agents and informing  them
about the system's  vehicle  rental rates,  products,  promotions  and services.
Thrifty  franchisee   payments  for  reservations  made  through  these  centers
accounted for  approximately  4% of Thrifty's 1999 total revenues.  Reservations
through Thrifty's Internet web site (www.thrifty.com)  increased in 1999 by 206%
to approximately 73,000 booked reservations.

         U.S.  franchisees  receiving  a  certain  volume  of  reservations  are
required  to use an  approved  automated  counter  system,  usually  leasing  or
subleasing  the related  hardware  and software  from  Thrifty or a  third-party
leasing agent.  In addition to providing an electronic  data link with Thrifty's
worldwide  reservation  centers,  the  automated  counter  system  prints rental
agreements and provides  Thrifty and its  franchisees  with customer and vehicle
inventory information and financial and operating reports.

         Thrifty  supports its  information  systems  through a  combination  of
internal resources and external technology providers.  Thrifty has engaged SABRE
to  manage  and  monitor  its data  center  network  and its  daily  information
processing.  Reservation  applications  systems continue to be serviced by Perot
Systems  Corporation under a five-year agreement through 2002. Other information
systems are  supported by Thrifty  employees.  All of Thrifty's  key systems are
housed in a secure  underground SABRE facility in Oklahoma designed to withstand
disasters.


<PAGE>
                                       13


         Thrifty's  core  information  systems  were updated to address the Year
2000 issues, as discussed in "Management's  Discussion and Analysis of Financial
Condition and Results of Operations - Year 2000."

         Insurance,  Supplies  and  National  Account  Programs.  Thrifty  makes
available to its  franchisees  for a fee  insurance for death or injury to third
parties, property damage and damage to or theft of franchisee vehicles.

         Thrifty makes bulk purchases of items used by its franchisees, which it
sells to  franchisees  at prices that are often lower than they could  obtain on
their own.  Thrifty  also  negotiates  national  account  programs  to allow its
franchisees to take advantage of volume discounts for many materials or services
used for operations such as tires,  glass  replacement,  long distance telephone
service and overnight mail.

         Parking Services.  Airport parking  operations are a natural complement
to vehicle  rental  operations.  Thrifty  encourages its  franchisees  that have
near-airport  locations  to add this  ancillary  business.  Thrifty  assists its
franchisees in obtaining  additional  property and in planning and  implementing
parking  operations.  Franchisees  benefit  since the Thrifty  service marks are
already on the premises,  shuttle  buses are already  being  operated for rental
customers and parking operations  increase service levels and recognition at the
airports.  Franchisees with parking operations may also offer ancillary services
such as car washes and oil changes to create additional opportunities to service
the vehicle while the traveler is away. Thrifty receives a royalty fee generally
equal to 3% of the total revenue generated from these services.

         Services  and  Products   Provided  to  Rental   Customers.   Thrifty's
franchisees  provide their  customers  with products and services  substantially
similar to those provided to customers by Dollar's company-owned stores.

         International (Except Canada)

         As of December  31,  1999,  Thrifty  master  franchisees  operated  610
vehicle  rental  locations in 63 countries  and  territories  outside the United
States and Canada.  Regions  with Thrifty  franchisees  include  Latin  America,
Europe,  the Middle East and the Asia-Pacific  region.  Thrifty seeks to attract
international   franchisees  by  emphasizing   Thrifty's  uniform  image,  brand
marketing  efforts,  worldwide  reservation system and consistent vehicle rental
system practices and procedures. Thrifty's corporate revenues from international
franchisees were less than 2% of 1999 total revenues.

         Thrifty grants master  franchises on a countrywide  basis.  Each master
franchisee is permitted to use directly and subfranchise others to use Thrifty's
service marks, systems and technologies within its country or territory.

         Company-Owned Stores

         Thrifty  typically  establishes  company-owned  stores  only  upon  the
financial failure of a franchisee. Thrifty uses company-owned stores to preserve
its  presence in key  markets.  As  opportunities  arise,  these  locations  are
refranchised.  During  1999,  Thrifty  reduced  the number of cities in which it
operates  company-owned  stores to one in the United States by selling a company
store to a franchisee.  Thrifty intends to continue to operate its company-owned
store in  Tulsa,  Oklahoma.  The  services  and  products  Thrifty  provides  to
company-owned  stores  and those  provided  by  company-owned  stores to vehicle
rental customers are substantially similar to those provided to and by Thrifty's
U.S. franchisees.

         Thrifty Car Sales

         Thrifty Car Sales,  Inc.,  was formed in December  1998,  to  franchise
retail used car dealerships under the Thrifty Car Sales brand name.  Thrifty Car
Sales provides an opportunity for both independent and  manufacturer  franchised
dealers to enhance or expand their used car operations  under a  well-recognized
national  brand name. In addition to the use of the brand name dealers will have
access to a variety of products and services offered by Thrifty Car Sales. These
products and services include operational and marketing support,  vehicle supply
services, customized retail and wholesale financing programs as well as national
accounts and supplies programs.


<PAGE>
                                       14


         At December 31, 1999,  Thrifty Car Sales had signed  dealer  agreements
for 15 U.S. cities including a corporate operation in Tulsa, Oklahoma.

         Canadian Operations

         Thrifty operates in Canada through its wholly owned subsidiary, Thrifty
Canada,  Ltd.  ("TCL").  TCL operates  company-owned  stores in the five largest
airport  vehicle rental markets in Canada and encourages  franchisees to operate
in the remaining  markets.  As of December 31, 1999, the TCL system included 130
vehicle rental locations,  of which 101 were operated by franchisees and 29 were
operated as company-owned stores.

         Company-Owned Stores

         TCL's  company-owned  store operations include five strategic airports:
Toronto,  Montreal,  Vancouver,  Winnipeg  and  Calgary.  These  operations  are
important to maintaining a national  airport  presence in Canada,  where TCL has
significant  airport  concession  and  lease  commitments.  Historically,  TCL's
operating   results  have  been  adversely   affected  by  losses   incurred  by
company-owned stores.

         Franchising

         TCL  provides  services  and  products  to  its  franchisees  that  are
substantially  similar  to  those  Thrifty  provides  to its  U.S.  franchisees,
including fleet leasing,  insurance services,  advertising and marketing support
and supplies.  Due to the structure of the Canadian vehicle rental market, which
has a greater  proportion of vehicle rental activity from  on-airport  locations
than off-airport locations as compared to the United States,  Thrifty has sought
to  strengthen  its  airport  presence  in Canada by  encouraging  existing  and
prospective  franchisees to locate  on-airport.  Canadian  franchisees pay TCL a
combined monthly administrative and advertising fee fixed in most cases at 8% of
rental revenues.

         Marketing

         Thrifty's  marketing  strategy is to position the Thrifty  system as an
industry leader in delivering value for cost-conscious  consumers. In the United
States it implements this strategy  primarily  through national  advertising and
promotion  assistance to U.S.  franchisees in local  advertising,  promotion and
sales and strategic marketing partnerships.

         Advertising, Promotion and Sales

         Thrifty  employs  national  advertising  on U.S.  broadcast  and  cable
television networks and in newspapers and travel industry and airline magazines.
Thrifty also sponsors sports and other events to increase  national exposure and
promote local  Thrifty  operations.  In the United  States,  Thrifty's  national
advertising and marketing  expenses are paid out of an advertising  fund managed
by a national  advertising  committee  consisting of  representatives of Thrifty
franchisees  and certain  members of Thrifty  management.  U.S.  franchisees and
company-owned  stores  contribute  5% of their base rental  revenue from airport
operations  and 2.5% of their base rental  revenue from local  operations to the
advertising fund.

         U.S. franchisees and company-owned stores are also required to spend an
additional 3% of their base rental revenue on local  advertising  and promotion.
Thrifty has a local sales  department  that assists  franchisees  in  developing
their local  markets.  Thrifty also provides an allowance for  qualifying  local
advertising,   promotion  and  sales  expenditures  to  U.S.   franchisees  that
participate  in  Thrifty's  fleet  leasing  program.  In the  1999  model  year,
franchisees  and   company-owned   stores  earned  an  aggregate   allowance  of
approximately $5.5 million.


<PAGE>
                                       15


         Thrifty  has made  filings  under  the  intellectual  property  laws of
jurisdictions  in which it or its licensees  operate,  including the U.S. Patent
and Trademark  Office, to protect the names,  logos and designs  identified with
Thrifty.  These marks are  important  for customer  awareness  and  selection of
Thrifty for vehicle rental.

         Strategic Marketing Efforts

         Thrifty's  approach of  targeting  value-conscious  consumers  includes
strategic marketing partnerships,  such as those it has with Montgomery Wards in
the United  States,  Canadian  Tire in Canada and Ryder Truck Rental  throughout
North America.  Thrifty also has  frequency-based  marketing  relationships with
numerous  airlines and hotel chains.  Since a  significant  portion of Thrifty's
system-wide  rentals result from travel agency  reservations,  Thrifty maintains
its  relationships  with travel agency chains and  consortia  through  preferred
supplier  agreements,  travel agent  advertising  and other  efforts.  Under its
preferred  supplier  arrangements,  Thrifty  provides these travel agency groups
additional  commissions or lower prices in return for their featuring Thrifty in
their advertising or giving Thrifty a priority in their reservation  systems. In
general, these arrangements are not exclusive to Thrifty, and many travel agency
groups have similar arrangements with other vehicle rental companies.



Summary Operating Data of Thrifty

                                                    Years ended December 31,
                                            ------------------------------------
                                               1999         1998         1997
                                            ----------   ----------   ----------
                                                       (in thousands)

Revenues:
      U.S. and Canada franchisees            $ 225,934    $ 200,505    $ 159,636
      U.S. and Canada company-owned stores      33,981       34,526       63,946
      International franchisees                  3,063        2,888        2,761
                                            ----------   ----------   ----------
         Total revenues                      $ 262,978    $ 237,919    $ 226,343
                                            ==========   ==========   ==========



                                                       As of December 31,
                                            ------------------------------------
                                               1999         1998         1997
                                            ----------   ----------   ----------

Rental Locations:
      U.S. and Canada franchisee locations         651          609          600
      U.S. and Canada company-owned stores          33           25           36

Franchisees:
      U.S. and Canada                              245          232          231
      International                                 63           67           63





<PAGE>
                                       16


Fleet Acquisition and Management

         U.S. Vehicle Supply

         For  the  1999  model  year,   DaimlerChrysler   vehicles   represented
approximately  87% of the Group's total U.S. fleet.  The Group also purchases or
leases vehicles of other automotive  manufacturers,  permitting it to adjust the
composition and overall cost of its fleet. The Company expects that for the 2000
model year, DaimlerChrysler vehicles will represent over 85% of the Group's U.S.
fleet.

         Automotive  manufacturers'  residual  value  programs limit the Group's
residual value risk. Under these programs,  the manufacturer  either  guarantees
the aggregate depreciated value upon resale of covered vehicles of a given model
year, as is generally  the case under  DaimlerChrysler's  program,  or agrees to
repurchase  vehicles at specified prices during established  repurchase periods.
In either case, the  manufacturer's  obligation is subject to certain conditions
relating  to  the  vehicle's  age,  physical  condition  and  mileage.  Vehicles
purchased  by vehicle  rental  companies  under these  programs  are referred to
herein as "Program  Vehicles."  Vehicles not purchased  under these programs and
for which rental  companies  therefore  bear residual value risk are referred to
herein as  "Non-Program  Vehicles."  The  Company  believes  that a majority  of
vehicles owned by other U.S. vehicle rental companies are Program Vehicles.

         The Group's primary  supplier,  DaimlerChrysler,  sets the terms of its
residual  value program  before the start of each model year.  The terms include
monthly  depreciation  rates,  minimum and maximum  holding periods and mileage,
model mix requirements and vehicle condition and other return requirements.  The
residual  value program  enables the Group to limit its residual value risk with
respect to Program Vehicles because  DaimlerChrysler  agrees to reimburse Dollar
and Thrifty for any difference between the aggregate gross auction sale price of
the Program Vehicles for the particular  model year and the vehicles'  aggregate
predetermined  residual value.  Under the program,  Dollar and Thrifty must sell
the Program Vehicles in closed auctions to DaimlerChrysler  dealers.  Dollar and
Thrifty  are  reimbursed  under  the  program  for  certain  transportation  and
auction-related costs.

         The  Group  also  purchases  Non-Program  Vehicles,  when  required  by
manufacturers  in  connection  with the purchase of Program  Vehicles,  or if it
believes  there is an  opportunity to lower its fleet costs or to fill model and
class niches not available  through  residual value  programs.  DaimlerChrysler,
which is the main provider of  Non-Program  Vehicles to the Group,  does not set
any  terms or  conditions  on the  resale of  Non-Program  Vehicles  other  than
required minimum holding periods. For the 1999 model year,  approximately 20% of
the vehicles acquired by the Group were Non-Program Vehicles.

         The  Group's   operating   results  are  materially   affected  by  the
depreciation  rates and other purchase  terms  provided under  DaimlerChrysler's
residual value program, as well as by other purchase incentives  DaimlerChrysler
provides. The percentage of vehicles acquired under  DaimlerChrysler's and other
manufacturers'  residual  value programs in the future will depend upon a number
of factors,  including the  availability  and cost of these  programs.  Residual
value programs enable Dollar and Thrifty to determine their depreciation expense
on Program Vehicles in advance.  Vehicle depreciation is the largest single cost
element in the Group's operations.  The percentage of the Group's vehicle rental
fleets  benefiting from residual value programs could decrease if the automotive
manufacturers  changed the size or terms of these programs.  In that event,  the
Group  would have  increased  residual  value risk that could be material to its
results of  operations  and could  adversely  affect its  ability to finance its
vehicles.  Second,  because it is difficult  to predict  future  vehicle  resale
values,  the Group may not be able to manage effectively the residual value risk
on its  Non-Program  Vehicles.  As recently as 1997,  results for the Group were
adversely affected by lower than anticipated  residual values. See "Management's
Discussion and Analysis of Financial  Condition and Results of Operations - Year
Ended  December  31,  1998  Compared  With Year Ended  December  31,  1997." The
residual  value of Non-Program  Vehicles  depends on such factors as the general
level of  pricing in the  automotive  industry  for both new and used  vehicles.
Prices for used  vehicles  generally  decrease if the  automotive  manufacturers
increase the retail sales  incentives  they offer on new  vehicles.  The Company
cannot predict the level of retail sales incentives DaimlerChrysler or the other
automotive  manufacturers  will  offer in the  future.  The Group  has  received
substantial  payments under residual value programs over the past several years.
See Note 5 of Notes to Consolidated Financial Statements.


<PAGE>
                                       17


         DaimlerChrysler has been the Group's principal supplier of vehicles. In
1996,   DaimlerChrysler   began  operating   under   five-year   vehicle  supply
arrangements  that were  formalized  in 1996 and 1997 in separate  U.S.  vehicle
supply agreements  ("VSAs") with Dollar and Thrifty.  DaimlerChrysler has agreed
to make specified volumes of  DaimlerChrysler  vehicles  available to Dollar and
Thrifty through July 2001.  Negotiations are underway to extend the VSAs. Dollar
and Thrifty may purchase  vehicles for use by company-owned  stores or for their
fleet   leasing   programs.   Dollar  and   Thrifty   have   agreed  to  promote
DaimlerChrysler  vehicles exclusively in their advertising and other promotional
materials.  DaimlerChrysler has agreed to make various  promotional  payments to
Dollar  and  Thrifty,  some of  which  vary  based  on the  volume  of  vehicles
purchased. These payments are material to the Group's results of operations. See
Note 5 of Notes to Consolidated Financial Statements.

         The VSAs provide  that Dollar and Thrifty  will each  purchase at least
80% of their respective  vehicles from  DaimlerChrysler  until a certain minimum
level is reached.  Also,  certain  minimum  numbers of vehicles  must be Program
Vehicles.  While  DaimlerChrysler  has the sole  discretion  to set the specific
terms and  conditions  of its residual  value  program for a model year,  it has
agreed in the VSAs to offer  programs  to Dollar and  Thrifty  that,  taken as a
whole,  are  competitive  with a residual  value program Ford or General  Motors
makes generally available to domestic vehicle rental companies.

         If purchases of  DaimlerChrysler  vehicles by Dollar or Thrifty  during
any model year exceed certain  targets,  DaimlerChrysler  will make available to
Dollar or  Thrifty  additional  Program  Vehicles  up to a maximum of 15% of the
target number of DaimlerChrysler Program Vehicles.

         Vehicle Disposition

         Dollar and Thrifty  generally  hold vehicles in rental service from six
months to 18 months.  The length of service is determined by taking into account
seasonal  rental  demand and the  average  monthly  mileage  accumulation.  Most
vehicles  must be removed from  service  before they reach 30,000 miles to avoid
significant  penalties  under  DaimlerChrysler's  residual value program.  As of
December  31,  1999,  the  average  age of  vehicles  in the  Group's  fleet was
approximately five months. The Group's  flexibility to adjust the holding period
for vehicles, particularly for Program Vehicles, enables the Group to adjust its
fleet  size up or  down  relatively  quickly  in  response  to  changing  market
conditions.  Dollar  or  Thrifty  must bear the risk on the  resale  of  Program
Vehicles that cannot be returned

         Dollar and Thrifty dispose of Non-Program Vehicles through auctions and
directly to used car dealers, wholesalers,  retail and franchisees. During 1999,
Dollar and Thrifty disposed of 72% of their Non-Program  Vehicles through direct
channels  and 28%  through  auctions  compared to 53% direct and 47% to auctions
during 1998.  The Company  believes that  utilizing  sales  channels  other than
auctions avoids  transportation  costs,  interest costs and auction fees and may
provide higher net residual amounts from disposal.

         Maintenance

         Dollar and certain Dollar and Thrifty  franchisees  may have automotive
maintenance  centers at airports and in urban and suburban areas.  Many of these
facilities are accepted by automotive  manufacturers  as eligible to perform and
receive  reimbursement for warranty work. Collision damage and major repairs are
generally performed by independent  contractors.  Dollar and Thrifty franchisees
are responsible for the maintenance of their fleet vehicles.


<PAGE>
                                       18


         Fleet Leasing Programs

         Dollar and Thrifty make fleet leasing programs  available to their U.S.
franchisees  for each new model year. The terms of their fleet leasing  programs
generally  mirror the  requirements  of various  manufacturers'  residual  value
programs with respect to model mix, order and delivery,  vehicle maintenance and
returns, but also include Non-Program  Vehicles.  Dollar and Thrifty monitor the
creditworthiness and operating performance of franchisees participating in their
fleet leasing programs and periodically audit franchisees' leased fleets. Dollar
and Thrifty  design their fleet leasing  programs to offer their  franchisees an
attractive means of obtaining fleet vehicles.  For 1999,  approximately  35% and
70% of the  vehicles in the fleets of Dollar's  and  Thrifty's  respective  U.S.
franchisees  had been provided  through their fleet leasing  programs.  In 1999,
approximately  4% of Dollar's  and 72% of  Thrifty's  (including  Canada)  total
revenue was derived from vehicle leasing programs. During 1999, a limited number
of larger franchisees acquired their vehicles directly from manufacturers.

         The Group sets their  lease  rates after  considering  Program  Vehicle
depreciation rates, estimated Non-Program Vehicle depreciation,  interest costs,
model mix and administrative  costs.  Average monthly lease rates vary depending
on vehicle model,  and the average lease period is between eight and ten months.
Although  Dollar  and  Thrifty  lease  Non-Program  Vehicles  as well as Program
Vehicles  to their  franchisees,  their fleet  leasing  programs  eliminate  the
residual value risk for their  franchisees.  Thrifty  franchisees may,  however,
elect to assume some residual  value risk on certain  Non-Program  Vehicles they
lease in exchange for a lower lease rate.



U.S. Fleet Data

<TABLE>
<CAPTION>

                                                                       Years Ended December 31,
                                                               --------------------------------------
                                                                  1999          1998          1997
                                                               ----------    ----------    ----------

Thrifty:
      <S>                                                          <C>           <C>           <C>
      Average number of vehicles leased to franchisees             31,856        29,595        23,878
                                                               ----------    ----------    ----------

      Average number of vehicles in combined fleets of
        franchisees                                                45,613        39,434        31,854
      Average number of vehicles in combined fleets of
        company-owned stores                                          483           865         3,470
                                                               ----------    ----------    ----------
           Total                                                   46,096        40,299        35,324
                                                               ==========    ==========    ==========

Dollar:
      Average number of vehicles leased to franchisees              4,960         6,151         6,735
                                                               ----------    ----------    ----------

      Average number of vehicles in combined fleets of
        franchisees                                                14,252        13,513        13,523
      Average number of vehicles in combined fleets of
        company-owned stores                                       56,065        50,673        47,813
                                                               ----------    ----------    ----------
           Total                                                   70,317        64,186        61,336
                                                               ==========    ==========    ==========

</TABLE>


<PAGE>
                                       19


Competition

         There is intense  competition  in the  vehicle  rental  industry on the
basis of price,  service  levels,  vehicle  quality,  vehicle  availability  and
convenience and condition of rental  locations.  Dollar and Thrifty's  principal
competitors  have larger market  shares and rental  volumes,  greater  financial
resources and more sophisticated  information systems. Dollar operates mainly in
the U.S.  airport  market,  although  compared to its competitors it relies more
heavily  on  discretionary  leisure,  tour  and  business  customers.   Dollar's
franchisees have a similar customer profile.  In any given location,  Dollar may
compete with  national,  regional and local vehicle  rental  companies,  many of
which  have  greater  financial  resources  than the Group.  Dollar's  principal
competitors for discretionary  business and leisure  travelers are Alamo,  Avis,
Budget, Hertz,  National and Thrifty.  Dollar competes primarily on the basis of
price and customer service.

         Thrifty's  U.S.   franchisees   generally  compete  for  cost-conscious
consumers with Alamo,  Avis,  Budget,  Dollar,  Hertz and National.  Enterprise,
Hertz,  Avis and  CarTemps USA (a division of  AutoNation)  as well as local and
regional  rental  companies  are major  competitors  in the local  market.  They
compete on the basis of price, location,  service and well-established  customer
relationships.  Most Thrifty  franchisees compete in the local market for retail
general  use  business  rather than  insurance  replacement  rentals.  Thrifty's
company-owned store has a similar customer profile.

         The Canadian vehicle rental markets are also intensely competitive. The
vast  majority of the  Canadian  market is operated  either  directly or through
franchisees of the major U.S. vehicle rental companies,  including Budget, Avis,
Hertz and National, as well as Dollar and Thrifty.

Insurance

         The  Group is  subject  to  third-party  bodily  injury  liability  and
property damage liability claims resulting from accidents involving their rental
customers. The Group carries first dollar coverage for third-party bodily injury
and property  damage  liability  claims arising from the use of a vehicle in the
United States. Dollar obtained first dollar coverage during the first quarter of
1999 and Thrifty  obtained  first dollar  coverage  during the second quarter of
1999. Prior to the above coverage levels, the Group retained the risk of loss in
various amounts up to $2 million on a per occurrence  basis. The Group maintains
additional  insurance at certain amounts in excess of its respective  underlying
coverages.

         The Group  retains the risk of loss for  general  and garage  liability
insurance  coverage up to $1 million and maintains  insurance at certain amounts
in excess of $1  million.  They also  maintain  catastrophic  and  comprehensive
coverage  for damage to vehicles  owned by them up to $3 million per  occurrence
with a deductible  amount of $250,000.  In addition,  the Group carries workers'
compensation  coverage with  retentions  up to $100,000.  The Group also carries
excess liability and directors' and officers' liability insurance coverage.

         Provisions for bodily injury liability and property damage liability on
self-insured  claims  are  made  by  charges  to  expense  based  upon  periodic
evaluations  by an  independent  actuary of estimated  ultimate  liabilities  on
reported and unreported claims. As of December 31, 1999, the Group's reserve for
public liability and property damage claims was approximately $58.8 million. The
Group's obligations to pay these losses and indemnify the insurance carriers are
collateralized  by surety  bonds.  As of December 31,  1999,  these surety bonds
totaled approximately $64.5 million.

         The Group also  maintains  various  surety bonds to secure  performance
under airport concession  agreements and other  obligations.  As of December 31,
1999, the total amount of these bonds was approximately $14.5 million.


<PAGE>
                                       20


Regulation

         Loss Damage Waivers and Supplemental Liability Insurance

         Loss damage waivers relieve customers from financial responsibility for
vehicle damage.  Legislation  affecting the sale of loss damage waivers has been
adopted in 25 states.  These laws either  require  disclosure to customers  that
loss damage waivers may not be necessary,  limit customer liability to specified
amounts,  limit the  ability of vehicle  rental  companies  to offer loss damage
waivers for sale or cap the amounts that may be charged for loss damage waivers.
Adoption of national or additional state  legislation  affecting or limiting the
sale, or capping the rates,  of loss damage  waivers could result in the loss of
this revenue and additional  limitations on potential  customer  liability could
increase costs to Dollar, Thrifty and their franchisees.

         Dollar,  Thrifty and other vehicle  rental  companies  offer  customers
supplemental  liability insurance ("SLI") in connection with vehicle rentals. In
1997, the State of Texas  determined that car rental  companies  cannot sell SLI
without  licensing and product  approval.  Some other states  concluded that the
selling of SLI required an insurance  license while other states were unclear on
the issue. During the fourth quarter of 1999, the Financial Services Reform Bill
was passed by Congress to address this issue.  The effect of the  legislation is
to  create a  federal  presumption  for a  three-year  period  that  car  rental
companies  are not  required to have a state  insurance  license to sell certain
insurance  products,  unless state law specifically  requires such a license. In
states where existing law does not require such insurance licensing,  car rental
companies are working to enact  legislation  which either  specifically  exempts
them from licensing  requirements or which grants them a limited license to sell
insurance products related to car rental, such as SLI.

         Franchising Regulation

         As  franchisors,  Dollar and Thrifty are subject to federal,  state and
foreign laws regulating various aspects of franchise operations and sales. These
laws impose registration and disclosure requirements on franchisors in the offer
and sale of franchises and, in certain states, also apply substantive  standards
to the relationship  between the franchisor and the franchisee,  including those
pertaining to default, termination and nonrenewal of franchises.

         Other Matters

         Certain states currently make vehicle owners (including  vehicle rental
companies)  vicariously liable for the actions of any person lawfully driving an
owned vehicle, regardless of fault. Some of these states, primarily New York, do
not limit this liability.  Vehicle rental  companies are also subject to various
federal,  state and local consumer  protection  laws and  regulations  including
those relating to advertising and disclosure of charges to customers.

         Dollar and Thrifty  are  subject to  federal,  state and local laws and
regulations  relating to taxing and  licensing  of  vehicles,  franchise  sales,
franchise  relationships,  vehicle  liability,  used vehicle  sales,  insurance,
telecommunications,  vehicle rental transactions and labor matters.  The Company
believes that Dollar and Thrifty  practices and  procedures  are in  substantial
compliance  with federal,  state and local laws and is not aware of any material
expenditures necessary to meet legal or regulatory  requirements.  Nevertheless,
considering  the nature and scope of Dollar's and  Thrifty's  businesses,  it is
possible that regulatory compliance problems could be encountered in the future.


<PAGE>
                                       21


Environmental Matters

         The  principal  environmental  regulatory  requirements  applicable  to
Dollar  and  Thrifty  operations  relate  to the  ownership,  storage  or use of
petroleum products such as gasoline, diesel fuel and new and used motor oil; the
treatment or discharge of waste waters;  the operation of automotive body shops;
and the generation,  storage,  transportation and off-site treatment or disposal
of waste  materials.  Dollar and  Thrifty  own 10 and lease 87  locations  where
petroleum  products are stored in underground or above-ground  tanks.  For owned
and leased  properties,  Dollar and Thrifty have  programs  designed to maintain
compliance with applicable  technical and  operational  requirements,  including
leak detection  testing of underground  storage tanks, and to provide  financial
assurance for remediation of spills or releases.

         The  historical  and current uses of the Dollar and Thrifty  facilities
may have resulted in spills or releases of various hazardous materials or wastes
or petroleum products ("Hazardous Substances") that now, or in the future, could
require  remediation.  The Group also may be subject to requirements  related to
remediation of Hazardous Substances that have been released into the environment
at  properties  they own or operate,  or owned or  operated  in the past,  or at
properties to which they send, or have sent,  Hazardous Substances for treatment
or disposal. Such remediation  requirements generally are imposed without regard
to fault,  and  liability  for any  required  environmental  remediation  can be
substantial.

         Dollar and  Thrifty  may be eligible  for  reimbursement  or payment of
remediation costs associated with releases from registered  underground  storage
tanks in U.S.  states  that have  established  funds to assist in the payment of
such  remediation  costs.  Subject to certain  deductibles,  the availability of
funds, the compliance  status of the tanks and the nature of the release,  these
tank  funds  may be  available  to Dollar  and  Thrifty  for use in  remediating
releases from their tank systems.

         At certain  facilities,  Dollar and Thrifty presently are investigating
or remediating soil or groundwater  contamination.  Based on currently available
information,  the  Company  does not  believe  that the  costs  associated  with
environmental investigation or remediation will be material. However, additional
contamination could be identified or occur in the future.

         The use of  automobiles  and  other  vehicles  is  subject  to  various
governmental requirements designed to limit environmental damage, including that
caused by emissions  and noise.  Generally,  these  requirements  are met by the
manufacturer  except,  on occasion,  equipment  failure  requiring repair by the
Group.

         Environmental  legislation and  regulations and related  administrative
policies have changed rapidly in recent years. There is a risk that governmental
environmental requirements, or enforcement thereof, may become more stringent in
the future and that the Group may be  subject  to legal  proceedings  brought by
government agencies or private parties with respect to environmental matters. In
addition,  with  respect to cleanup of  contamination,  additional  locations at
which wastes  generated by the Group may have been released or disposed,  and of
which the Group is currently  unaware,  may in the future  become the subject of
cleanup for which the Group may be liable, in whole or part. Accordingly,  while
the  Group  believes  that  it  is in  substantial  compliance  with  applicable
requirements of  environmental  laws, there can be no assurance that the Group's
future   environmental   liabilities   will  not  be  material  to  the  Group's
consolidated financial position or results of operations or cash flows.

Employees

         As of December 31, 1999,  the Group  employed a total of  approximately
5,500  full-time  and  part-time  employees  of whom  approximately  4,400  were
employed  by  Dollar  and 1,100 by  Thrifty.  Approximately  240 of the  Group's
employees  were subject to collective  bargaining  agreements as of December 31,
1999. The Company believes the Group's relationship with its employees is good.


<PAGE>
                                       22


ITEM 2.     PROPERTIES

         The Company  owns its  headquarters  located at 5330 East 31st  Street,
Tulsa,  Oklahoma.  This location is a three building  office complex that houses
the headquarters and reservation centers for Dollar and Thrifty. These buildings
and the related  improvements  were  mortgaged  in December  1997  pursuant to a
mortgage in favor of Credit  Suisse First  Boston  ("CSFB"),  as  administrative
agent for a syndicate of banks. The mortgage was executed in connection with the
Revolving Credit Facility, as described in "Management's Discussion and Analysis
of  Financial  Condition  and  Results of  Operations  -  Liquidity  and Capital
Resources".

         Dollar  and  Thrifty  each  own  or  lease  real   property   used  for
company-owned stores and office facilities,  and in some cases own real property
that is leased to franchisees  or other third parties.  As of December 31, 1999,
the Group's  company-owned  operations  were carried on at 149  locations in the
U.S.  and Canada,  the  majority of which are  leased.  Dollar and Thrifty  each
operate   company-owned   stores  under   concession   agreements  with  various
governmental  authorities  charged with the  operation  of airports.  Concession
agreements for airport  locations,  which are sometimes  competitively  bid, are
important for securing air traveler business.

         In  connection  with the Revolving  Credit  Facility,  Dollar  executed
mortgages in favor of CSFB  encumbering its real property  located in San Diego,
Tampa  and  Las  Vegas.  Thrifty  also  executed  mortgages  in  favor  of  CSFB
encumbering  its real  property  located in Phoenix,  Ft.  Lauderdale,  Orlando,
Dallas, Houston, and Salt Lake City.

ITEM 3.     LEGAL PROCEEDINGS

         On November 2, 1994, the City of San Jose,  California  filed an action
in the Superior Court of California, against Chevron, Dollar and others, seeking
unspecified compensatory and punitive damages and injunctive relief. The City of
San Jose has not served  process on Dollar.  The suit  relates to pollution at a
site currently  occupied by Dollar and formerly occupied by Chevron.  Dollar has
partially  remediated the affected soil, but not the allegedly  affected  ground
water.  Dollar  believes  that prior uses of the site  resulted in any remaining
contamination at the site.

         In  addition  to the  foregoing,  various  legal  actions,  claims  and
governmental  inquiries  and  proceedings  are pending or may be  instituted  or
asserted in the future against the Company and its  subsidiaries.  Litigation is
subject  to many  uncertainties,  and the  outcome of the  individual  litigated
matters is not predictable  with  assurance.  It is possible that certain of the
actions,  claims,  inquiries or proceedings,  including the one discussed above,
could be  decided  unfavorably  to the  Company  or the  subsidiaries  involved.
Although  the  amount of  liability  with  respect  to these  matters  cannot be
ascertained,  potential  liability  is not  expected  to  materially  affect the
consolidated financial position or results of operations of the Company.

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

         No matters  were  submitted  to a vote of security  holders  during the
fourth quarter ended December 31, 1999.


<PAGE>
                                       23


                                     PART II
                                     -------

ITEM 5.     MARKET FOR REGISTRANT'S COMMON EQUITY
            AND RELATED STOCKHOLDER MATTERS

         The  Company's  Common  Stock is listed on the New York Stock  Exchange
("NYSE")  under the trading  symbol "DTG." The high and low sales prices for the
Common Stock for each quarterly period during 1999 and 1998, were as follows:

                      First      Second       Third       Fourth
                     Quarter     Quarter     Quarter      Quarter
                    ----------  ----------  ----------  ----------

        1999
        ----
        High          $ 17.31     $ 23.94     $ 25.44     $ 24.06
        Low           $ 11.31     $ 16.56     $ 18.31     $ 16.88


        1998
        ----
        High          $ 24.25     $ 24.44     $ 16.56     $ 14.63
        Low           $ 18.38     $ 12.00     $  9.88     $  8.69


         The 24,160,598  shares of Common Stock outstanding at February 29, 2000
were held by 3,041 stockholders of record.

         The  Company  intends to reinvest  its  earnings  in its  business  and
therefore  does not  anticipate  paying any cash  dividends  in the  foreseeable
future.  The  Company  has not  paid  cash  dividends  since  completion  of the
Offering.

         Under the terms of the Revolving  Credit  Facility,  restrictions  were
imposed by the lender on the payment of cash dividends to  stockholders.  During
the five-year term of such  agreement,  dividends are permitted at the lesser of
specified monetary levels or percentages of cash flow.


<PAGE>
                                       24



ITEM 6.     SELECTED FINANCIAL DATA


                Selected Consolidated Financial Data of the Group

         The selected  consolidated  statement of  operations  and balance sheet
data were  derived from the audited  consolidated  financial  statements  of the
Group. References to system-wide vehicle rental revenue include revenue received
from the  Group's  company-owned  stores and by  franchisees  from the rental of
vehicles.

<TABLE>
<CAPTION>

                                                                         Years Ended December 31, (b)
                                               ------------------------------------------------------------------
                                                  1999          1998          1997          1996          1995
                                               ----------    ----------    ----------    ----------     ----------
<S>                                            <C>           <C>           <C>           <C>            <C>
Statement of Operations
   (in thousands):

Revenues:
    Vehicle rental                             $  714,407    $  635,600    $  620,045    $  497,239     $  372,508
    Vehicle leasing                               218,614       202,371       164,701       149,713        177,836
    Fees and services                              57,046        51,770        49,143        47,597         49,382
    Other                                           8,685         9,225         9,899         9,342          9,653
                                               ----------    ----------    ----------    ----------     ----------

        Total revenues                            998,752       898,966       843,788       703,891        609,379
                                               ----------    ----------    ----------    ----------     ----------



Costs and expenses:
    Direct vehicle and operating                  289,129       267,504       263,850       225,558        166,473
    Vehicle depreciation and lease
      charges, net                                311,113       305,169       294,911       230,051        220,471
    Selling, general and

      administrative                              190,994       163,256       149,697       140,089        123,439
    Interest expense, net                          95,114        88,726        87,852        72,868         78,817
    Amortization of cost in excess
      of net assets acquired                        5,842         5,417         6,010         8,169         10,456
    Intangible asset impairment losses                  -             -             -       157,758              -
                                               ----------    ----------    ----------    ----------     ----------

        Total costs and expenses                  892,192       830,072       802,320       834,493        599,656
                                               ----------    ----------    ----------    ----------     ----------


Income (loss) before income taxes                 106,560        68,894        41,468      (130,602)         9,723

Income tax expense                                 46,974        31,229        23,427        16,682          9,753
                                               ----------    ----------    ----------    ----------     ----------


Net income (loss) (a)                          $   59,586    $   37,665    $   18,041    $ (147,284)    $      (30)
                                               ==========    ==========    ==========    ==========     ==========



Earnings (loss) per share (a):

    Basic                                      $     2.47    $     1.56    $     0.90    $    (7.36)    $       -
    Diluted                                    $     2.43    $     1.56    $     0.90    $    (7.36)    $       -


Balance Sheet Data:
    (in thousands)

Revenue-earning vehicles, net                  $1,507,692    $1,342,066    $1,319,490    $1,120,346     $  958,799
Total assets                                    2,171,653     1,865,300     1,942,210     1,647,951      1,657,823
Total debt                                      1,555,609     1,313,799     1,418,687     1,241,558      1,128,811
Stockholders' equity                              379,127       315,914       268,426       183,883        331,189

</TABLE>

<PAGE>
                                       25

<TABLE>
<CAPTION>

U. S. and Canada


                                                                  Years Ended December 31, (b)
                                              ------------------------------------------------------------------
                                                 1999          1998          1997          1996          1995
                                              ----------    ----------    ----------    ----------    ----------
<S>                                           <C>           <C>           <C>           <C>           <C>
System-wide Data:
Vehicle rental revenue:
   (in thousands)

    Company-owned stores                      $  714,000    $  636,000    $  620,000    $  497,000    $  373,000
    Franchisee locations                         699,000       620,000       516,000       502,000       556,000
                                              ----------    ----------    ----------    ----------    ----------
       Total vehicle rental revenue           $1,413,000    $1,256,000    $1,136,000    $  999,000    $  929,000
                                              ==========    ==========    ==========    ==========    ==========


Rental locations:

    Company-owned stores                             149           139           139           156           162
    Franchisee locations                             824           763           752           729           720
                                              ----------    ----------    ----------    ----------    ----------
       Total rental locations                        973           902           891           885           882
                                              ==========    ==========    ==========    ==========    ==========


Average number of vehicles operated
during the period by company-owned
stores and franchisees                           123,814       111,652       103,417        94,992        93,989

Peak number of vehicles operated
during the period by company-owned
stores and franchisees                           148,832       134,407       122,286       110,771       108,447

Company-owned Stores Data:

Vehicle Rental Data:

Average number of vehicles operated               59,218        53,983        53,719        45,037        36,246

Number of rental transactions                  3,621,111     3,320,294     3,300,420     2,817,269     2,196,611

Average revenue per transaction               $      197    $      191    $      187    $      176    $      170

Monthly average revenue per vehicle           $    1,005    $      980    $      959    $      917    $      856


Vehicle Leasing Data:

Average number of vehicles leased                 38,690        37,709        32,814        30,583        34,373

Average monthly lease revenue per unit        $      471    $      447    $      420    $      409    $      400

- ----------

</TABLE>

(a)      Management  believes it is important to note that net income (loss) and
         earnings  (loss) per share for the year ended December 31, 1996 include
         intangible  asset  impairment   losses  of  $157,758,000,   related  to
         DaimlerChrysler's  decision in 1996 to dispose of Thrifty as a non-core
         asset   ($155,000,000)   and  an   impairment   loss   related  to  TCL
         ($2,758,000).

(b)      Certain  reclassifications  have been made in the selected consolidated
         financial data to conform to the classifications used in 1999.


<PAGE>
                                       26


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

General

         The Group  owns two  separate  vehicle  rental  companies,  Dollar  and
Thrifty.  They engage in the business of renting vehicles directly to retail and
tour customers and providing  vehicle  leasing and other services to franchisees
that rent to customers. The majority of Dollar's revenue is derived from renting
vehicles to customers from company-owned stores, while the majority of Thrifty's
revenue  is  generated   from  leasing   vehicles  and  providing   services  to
franchisees.

The Group's revenues consist of:

         o   Vehicle  rentals -- revenue  generated  from  renting  vehicles  to
             customers,  including all related  charges,  through  company-owned
             stores,

         o   Vehicle leasing --  revenue  generated  from  leasing  vehicles  to
             franchisees,

         o   Fees and  services -- revenue  generated  from  franchise  fees and
             providing reservations,  insurance, supplies and other products and
             services to franchisees, and

         o   Other -- revenue  generated from franchise  sales,  parking income,
             non-vehicle   lease  income  and  interest   income   derived  from
             franchisees.

The Group's expenses consist of:

         o   Direct  vehicle  and  operating  -- costs  related to the rental of
             revenue-earning  vehicles  to  customers  and  to  the  leasing  of
             vehicles to franchisees, such as leasing expenses,  concessions and
             commissions  paid  to  airport  authorities,  travel  agencies  and
             others,  insurance  and lease  promotion  expenses,  net of certain
             incentives received from vehicle manufacturers,

         o   Vehicle depreciation and lease charges, net -- depreciation expense
             relating to  revenue-earning  vehicles,  net of gains and losses on
             the  disposal of such  vehicles,  and lease  charges  for  vehicles
             leased from third parties,

         o   Selling, general and administrative expenses, including advertising
             and marketing expenses and reservation expenses,

         o   Interest expense,  net -- interest expense,  net of interest earned
             on restricted cash, cash and cash equivalents,  relating  primarily
             to revenue-earning vehicle financing, and

         o   Amortization of cost in excess of net assets acquired.

         The  Group's  profitability  is  primarily a function of the volume and
pricing of rental  transactions,  utilization  of the vehicles and the number of
vehicles leased to franchisees.  Significant changes in the purchase or disposal
price of vehicles or interest  rates can also have a  significant  effect on the
Group's profitability,  depending on the ability of the Group to adjust the size
of the fleet as well as pricing and lease rates for these  changes.  The Group's
business  requires  significant  expenditures  for  vehicles  and  consequently,
requires substantial liquidity to finance such expenditures.

         The  following   discussion  and  analysis  provides  information  that
management  believes to be relevant to understanding the Company's  consolidated
financial condition and results of operations. This discussion should be read in
conjunction with the Group's  consolidated  financial statements and the related
notes thereto included in this report.


<PAGE>
                                       27


Results of Operations

         The following  table sets forth the percentage of total revenues in the
Group's consolidated statement of income:

                                                    Years Ended December 31, (b)
                                                   -----------------------------

                                                     1999      1998        1997
                                                   -------    -------    -------


Revenues:
      Vehicle rentals                                71.5%      70.7%      73.5%
      Vehicle leasing                                21.9%      22.5%      19.5%
      Fees and services                               5.7%       5.8%       5.8%
      Other                                           0.9%       1.0%       1.2%
                                                   -------    -------    -------

          Total revenues                            100.0%     100.0%     100.0%
                                                   -------    -------    -------



Costs and expenses:
      Direct and vehicle operating                   28.9%      29.8%      31.3%
      Vehicle depreciation and lease charges, net    31.2%      33.9%      35.0%
      Selling, general and administrative            19.1%      18.1%      17.7%
      Interest expense, net                           9.5%       9.9%      10.4%
      Amortization of cost in excess of net
        assets acquired                               0.6%       0.6%       0.7%
                                                   -------    -------    -------

          Total costs and expenses                   89.3%      92.3%      95.1%
                                                   -------    -------    -------


Income before income taxes                           10.7%       7.7%       4.9%

Income tax expense                                    4.7%       3.5%       2.8%
                                                   -------    -------    -------


Net income (a)                                        6.0%       4.2%       2.1%
                                                   =======    =======    =======

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

(a) In 1997, the Group  incurred a one-time tax charge of $4,314,000  related to
    its separation from DaimlerChrysler.

(b) Certain  reclassifications  have been made in the 1998 and 1997 consolidated
    financial statements to conform to the classifications used in 1999.


<PAGE>
                                       28


The  following  table sets forth a breakdown of the Group's two major sources of
revenue:

                                           Years Ended December 31, (a)
                              --------------------------------------------------

                                  1999              1998              1997
                              --------------    --------------    --------------
                                                (in thousands)

Vehicle rental revenue:
       Dollar                     $ 681,240         $ 603,331         $ 559,101
       Thrifty                       33,167            32,269            60,944
                              --------------    --------------    --------------

         Total                    $ 714,407         $ 635,600         $ 620,045
                              ==============    ==============    ==============



Leasing revenue:
       Dollar                      $ 28,762          $ 33,224          $ 34,452
       Thrifty                      189,852           169,147           130,249
                              --------------    --------------    --------------

         Total                    $ 218,614         $ 202,371         $ 164,701
                              ==============    ==============    ==============


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

(a)  Certain  reclassifications have been made in the 1998 and 1997 consolidated
     financial statements to conform to the classifications used in 1999.


Year Ended December 31, 1999 Compared with Year Ended December 31, 1998

         Revenues

         Total  revenues for the year ended  December 31, 1999  increased  $99.8
million,  or 11.1%,  to $998.8  million  compared to 1998. The increase in total
revenues was due to an increase in rental  revenue of 12.4% over 1998 and a 8.0%
growth in leasing revenue.  Fees and services revenue increased $5.3 million due
to higher franchise fees and other revenue fees from franchisees. Vehicle rental
revenue and vehicle leasing  revenue were impacted by franchise  acquisitions at
Dollar and re-franchising of company-owned stores at Thrifty.

         The Group's vehicle rental revenue for 1999 was $714.4 million, a 12.4%
increase from 1998. This increase was due primarily to a $77.9 million  increase
for Dollar and a $0.9 million increase at Thrifty.  The growth in vehicle rental
revenue at Dollar was the result of an increase of 9.6% in transactions combined
with a 3.1% increase in revenue per  transaction.  The rental  revenue growth at
Dollar  related  to the  acquisition  of  franchisees  was  $15  million,  which
represented 19.2% of Dollar's total rental revenue growth during 1999.

         Vehicle leasing  revenue for 1999 was $218.6  million,  a $16.2 million
increase  from 1998.  This  increase  in vehicle  leasing  revenue  reflects  an
increase of $20.7 million,  or 12.2%, in Thrifty's leasing revenue due to a 6.9%
increase in the average number of vehicles  leased to  franchisees  along with a
4.9% increase in the vehicle  leasing rates partially due to a change in vehicle
mix. Dollar's leasing revenue declined $4.5 million, or 13.4%, due to a decrease
in the  average  number of  vehicles  leased to  franchisees  as a result of the
acquisition of franchised  locations during 1999 partially offset by an increase
in lease rates.


<PAGE>
                                       29


         Expenses

         Total  expenses  increased  7.5% from $830.1  million in 1998 to $892.2
million in 1999.  This  increase was due primarily to a $45.9  million,  or 7.5%
increase  for Dollar and a $16.3  million,  or 7.5%  increase at Thrifty.  Total
expenses  as a  percentage  of revenue  declined  to 89.3% in 1999 from 92.3% in
1998.

         Direct vehicle and operating expenses for 1999 increased $21.6 million,
or 8.1%, over 1998, primarily due to an increase at Dollar. The overall increase
was  due to  higher  airport  concession  rents,  personnel  and  other  vehicle
operating costs partially offset by lower insurance  costs.  These expenses were
28.9% of revenue for 1999, compared to 29.8% of revenue for 1998.

         Net vehicle  depreciation  expense  and lease  charges  increased  $5.9
million,  or 1.9%,  for 1999 as compared to 1998,  consisting  of a $5.6 million
increase  at  Dollar  and a  $0.3  million  increase  at  Thrifty.  Net  vehicle
depreciation  expense increased $14.8 million,  or 5.2%, due to a 10.4% increase
in depreciable fleet (11.2% at Dollar and 9.0% at Thrifty) partially offset by a
decline of 4.8% in the average  depreciation rate (4.3% decrease at Dollar and a
5.3%  decrease at Thrifty).  The decline in  depreciation  rate  includes  $25.2
million net vehicle gains on the disposal of Non-Program  Vehicles. In 1998, the
disposition  of  Non-Program  Vehicles  resulted in a net  vehicle  gain of $5.5
million.  Lease charges,  for vehicles leased from third parties,  declined $8.9
million due to fewer vehicles leased during the year ended December 31, 1999.

         Selling, general and administrative expenses of $190.9 million for 1999
increased  from $163.3 million in 1998,  comprised  primarily of a $13.9 million
increase at Dollar and a $13.8  million  increase at Thrifty.  The higher  costs
were due primarily to higher information  technology system costs including Year
2000  remediation,  costs  incurred  with the  start-up of Thrifty Car Sales and
other personnel related costs.

         Net interest expense increased $6.4 million,  or 7.2% to $95.1 million.
Net interest  expense  decreased as a percentage of revenue from 9.9% in 1998 to
9.5% in 1999.  The  increase  in expense  for the Group was due to the effect of
higher  average  vehicle debt levels  partially  offset by a decrease in vehicle
interest rates.

         The tax provision  for 1999 was $46.9  million.  The effective  rate of
44.1% and 45.3% in 1999 and 1998, respectively,  differs from the U.S. statutory
rate due  primarily  to  non-deductible  amortization  of costs in excess of net
assets acquired, state and local taxes and losses relating to Thrifty's Canadian
subsidiary for which no benefit was recorded.  The  improvement in the effective
rate as  compared  to 1998 was due to higher U.S.  pre-tax  income and  improved
results in the Canadian operations.

         Operating Results

         The Group had income before income taxes of $106.6  million for 1999 as
compared to $68.9  million in 1998, a 54.7%  increase.  This growth was due to a
$29.0 million increase at Dollar and a $8.7 million increase at Thrifty.


<PAGE>
                                       30


Year Ended December 31, 1998 Compared with Year Ended December 31, 1997

         Revenues

         Total  revenues for the year ended  December 31, 1998  increased  $55.2
million,  or 6.5%,  to $898.9  million  compared to 1997.  The increase in total
revenues was due to an increase in leasing revenue of 22.9% over 1997 and a 2.5%
growth in rental revenue.  Fees and services revenue  increased $2.6 million due
to a final payment received related to Dollar's  terminated  European  franchise
agreement and higher  franchise  fees and other  revenue fees from  franchisees.
Vehicle  rental  revenue  and  vehicle  leasing  revenue  were  impacted  by the
re-franchising of company-owned stores at Thrifty and by franchise  acquisitions
at Dollar.

         The Group's vehicle rental revenue for 1998 was $635.6 million,  a 2.5%
increase from 1997. This increase was due primarily to a $44.2 million  increase
for Dollar offset by a $28.7 million decline at Thrifty. The increase in vehicle
rental  revenue at Dollar was the result of an increase of 6.6% in  transactions
combined with a 1.0%  increase in revenue per  transaction.  The rental  revenue
growth at Dollar related to the  acquisition of franchisees  during 1998 totaled
$21.4 million,  which  represented  48% of Dollar's total rental revenue growth.
The decline at Thrifty  was due to the  re-franchising of several  company-owned
stores during 1997 and early 1998.

         Vehicle leasing  revenue for 1998 was $202.4  million,  a $37.7 million
increase  from 1997.  This  increase  in vehicle  leasing  revenue  reflects  an
increase of $38.9 million,  or 29.9%, in Thrifty's leasing revenue primarily due
to a 23.9%  increase in the average  number of  vehicles  leased to  franchisees
along with a 4.9%  increase  in the  vehicle  leasing  rates.  Dollar's  leasing
revenue  declined $1.2 million,  or 3.6% due to a decrease in the average number
of vehicles  leased to  franchisees  as a result of the  acquisition  of several
franchised locations during 1998.

         Expenses

         Total  expenses  increased  3.5% from $802.3  million in 1997 to $830.1
million in 1998.  This  increase was due primarily to a $28.5  million,  or 4.9%
increase for Dollar offset by a $2.0 million, or 0.9% decline at Thrifty.  Total
expenses  as a  percentage  of revenue  declined  to 92.3% in 1998 from 95.1% in
1997.

         Direct vehicle and operating  expenses for 1998 increased $3.7 million,
or 1.4%, over 1997,  comprised of a $14.6 million increase at Dollar offset by a
$10.9  million  decline  at  Thrifty.  The  overall  increase  was due to higher
personnel costs,  airport concession fees and tour account incentives at Dollar,
partially  offset by a  reduction  of  expenses  at  Thrifty  as a result of the
re-franchising  of several  company-owned  stores.  These expenses were 29.8% of
revenue for 1998, compared to 31.3% of revenue for 1997. These expenses improved
as a percentage  of revenue  partially  due to a decrease in the  proportion  of
total revenue  generated from vehicle  rentals at  company-owned  stores,  which
carry additional costs not associated with vehicle leasing revenue. The shift in
revenue  from  vehicle  rentals  to  vehicle  leasing  resulted  primarily  from
re-franchising several Thrifty company-owned stores in late 1997 and early 1998.

         Net vehicle  depreciation  expense and lease  charges  increased  $10.3
million  or 3.5% for 1998 as  compared  to 1997,  consisting  of a $5.7  million
increase  at  Dollar  and a  $4.6  million  increase  at  Thrifty.  Net  vehicle
depreciation expense increased $11.2 million, or 4.0%, due to a 5.4% increase in
depreciable  fleet  (6.1% at Dollar and 4.3% at Thrifty)  partially  offset by a
decline of 1.5% in the average  depreciation rate (0.4% increase at Dollar and a
4% decrease at Thrifty).  The decline in the  depreciation  rate  includes  $5.5
million net vehicle gains on the disposal of Non-Program  Vehicles. In 1997, the
disposition  of  Non-Program  Vehicles  resulted in a net vehicle  loss of $11.4
million.  Lease charges, for vehicles leased from third parties,  decreased $0.9
million due to fewer vehicles leased during 1998.


<PAGE>
                                       31


         Selling, general and administrative expenses of $163.3 million for 1998
increased  9.1%  from  $149.7  million  in 1997,  comprised  of a $11.0  million
increase  at Dollar,  a $0.7  million  increase  at Thrifty  and a $1.9  million
increase for other  operations.  The higher  costs were due to higher  personnel
costs related to the development of new information  technology  systems,  sales
and marketing and Year 2000 remediation costs. Higher expenses in 1998 were also
the result of one-time cost  reductions  in 1997 related to the  settlement of a
$1.5  million  condemnation  claim and the  reversal of a $1.1  million  reserve
related to resolved  litigation at Dollar and the  elimination of a $1.9 million
reserve related to the sale of Snappy Car Rental in 1994.  Selling,  general and
administrative expenses for the Group were 18.1% of revenue for 1998 compared to
17.7% for 1997.

         Net interest  expense  increased  $0.9 million,  or 1% to $88.7 million
comprised  primarily of a $3.6 million increase at Thrifty partially offset by a
$2.1 million decrease at Dollar.  Net interest expense decreased as a percentage
of revenue  from 10.4% in 1997 to 9.9% in 1998.  The increase in expense for the
Group was due to the effect of higher  average  vehicle  debt  levels  partially
offset by a decrease in vehicle interest rates.

         The tax provision  for 1998 was $31.2  million.  The effective  rate of
45.3%  in  1998  differs  from  the  U.S.   statutory   rate  due  primarily  to
non-deductible  amortization  costs in excess of net assets acquired,  state and
local taxes and losses  relating to Thrifty's  Canadian  subsidiary for which no
benefit was  recorded.  The  effective  rate for 1997 was 56.5% due primarily to
non-deductible  amortization  costs in excess  of net  assets  acquired,  losses
relating to Thrifty's Canadian subsidiary for which no benefit was recorded, and
the  one-time  tax  charge  of  $4.3  million  related  to the  separation  from
DaimlerChrysler.

         Operating Results

         The Group had income  before  income taxes of $68.9 million for 1998 as
compared to $41.5  million in 1997, a 66.1%  increase.  This growth was due to a
$15.3 million increase at Dollar and a $13.6 million increase at Thrifty. Income
before income taxes  declined for other  operations in 1998 due primarily to the
elimination of a $1.9 million  reserve during 1997 related to the sale of Snappy
Car Rental in 1994.

Liquidity and Capital Resources

         The  Group's  primary  cash  requirements  are for the  acquisition  of
revenue-earning  vehicles and to fund its U.S. and Canadian  operations.  During
1999,  cash  provided by operating  activities  was $372.5  million.  Net income
adjusted  for  depreciation,  net of vehicle  gains,  primarily  generated  cash
provided by operating activities.

         Cash used in investing activities was $583.4 million. The principal use
of cash in investing  activities  was the purchase of  revenue-earning  vehicles
which  totaled $2.4 billion ($1.4 billion at Dollar and $1.0 billion at Thrifty)
which was  partially  offset by $1.9  billion  ($1.1  billion at Dollar and $800
million at Thrifty) in proceeds from the sale of used revenue-earning  vehicles.
The Group's need for cash to finance  vehicles is highly  seasonal and typically
peaks in the second and third  quarters of the year when fleet  levels  build to
meet seasonal  rental demand.  Fleet levels are the lowest in the fourth quarter
when rental demand is at a seasonal low. The Company expects to continue to fund
its  revenue-earning  vehicles with cash provided from  operations and increased
secured  vehicle  financing.  Restricted  cash and  investments  increased $82.4
million for the year ended December 31, 1999.  Restricted  cash and  investments
are  restricted  for the  acquisition  of  revenue-earning  vehicles  and  other
specified uses under the asset backed notes discussed below. The Group also used
cash for the purchase of non-vehicle capital expenditures of $23 million.  These
expenditures consist primarily of airport facility  improvements for the Group's
rental  locations  and  investments  in  information  technology  equipment  and
systems.   The  Group   estimates   non-vehicle   capital   expenditures  to  be
approximately  $30  million  in  2000.  In  addition,  Dollar  will  pursue  the
acquisition of certain franchisee operations,  if available.  These expenditures
are expected to be financed with cash provided from operations.


<PAGE>
                                       32


         Cash  provided by financing  activities  was $238.8  million  primarily
provided by the issuance of $250 million in asset backed notes during 1999.

         Asset Backed Notes

         The asset backed note  program is  comprised of $1.34  billion in asset
backed notes with  maturities  ranging from 2000 to 2005.  Borrowings  under the
asset backed notes are secured by eligible vehicle  collateral and bear interest
at fixed rates on $1.3 billion ranging from 5.90% to 7.10% and floating rates on
$37.4  million  ranging from LIBOR plus .95% to LIBOR plus 1.25%.  Proceeds from
the asset backed notes that are  temporarily  unutilized for financing  vehicles
and certain related receivables are maintained in restricted cash and investment
accounts, which were approximately $140.0 million at December 31, 1999.

         Commercial Paper Program and Liquidity Facility

         At December 31,  1999,  the  Company's  commercial  paper  program (the
"Commercial  Paper  Program") had a maximum size of $640 million  supported by a
$575 million, 364-day liquidity facility (the "Liquidity Facility").  Borrowings
under the Commercial  Paper Program are secured by eligible  vehicle  collateral
and bear interest based on  market-dictated  commercial paper rates. At December
31, 1999, the Group had $80.4 million in commercial paper  outstanding under the
Commercial  Paper  Program.  The  Commercial  Paper  Program  and the  Liquidity
Facility are renewable  annually.  The  Commercial  Paper Program peaked in size
during the third quarter of 1999 when it reached  $545.7  million to support the
seasonal increase in vehicle fleet.

         Effective  March 2, 2000, the Commercial  Paper Program was renewed for
another  year at a maximum  size of $780  million,  backed  by a renewal  of the
Liquidity Facility which was increased to $700 million.

         Other Obligations and Vehicle Debt

         Thrifty had financed its Canadian vehicle fleet under a lease agreement
with an unrelated  auto  leasing  trust which  provided  for CND$125  million of
funding,  which was supported by underlying  bank financing that was required to
be renewed  annually.  This  facility  was phased out as the  vehicles  financed
thereunder were taken out of service with all financing arrangements terminated.
On February 18, 1999,  Thrifty  established  new  arrangements  for its Canadian
vehicle financing through a five-year fleet securitization  program.  Under this
program,  Thrifty can obtain  vehicle  financing  up to CND$150  million  funded
through a bank  commercial  paper  conduit.  At December 31,  1999,  Thrifty had
approximately $45.4 million funded under this program.

         On May 20, 1999, a vehicle manufacturer's finance subsidiary extended a
$102 million  revolving line of credit to the Group to purchase  revenue-earning
vehicles.  The line of credit is secured  by the  vehicles  financed  under this
facility. This credit facility expires in August 2000 and is renewable by mutual
agreement. At December 31, 1999, the Company had $67.9 million outstanding under
the line of credit.

         Revolving Credit Facility

         The Company has a $215 million 5-year, senior secured, revolving credit
facility (the  "Revolving  Credit  Facility") that expires in December 2002. The
Revolving  Credit  Facility is used to provide letters of credit with a sublimit
of $190  million  and cash  for  operating  activities  with a  sublimit  of $70
million.  The  availability  of funds  under the  Revolving  Credit  Facility is
subject to the Company's continued compliance with certain covenants,  including
a covenant  that sets the maximum  amount the Company can spend  annually on the
acquisition  of  fixed  or  capital  assets,  and  certain  financial  covenants
including a maximum  leverage  ratio, a minimum fixed charge ratio and a minimum
interest  expense coverage ratio. The Group is in compliance with all covenants.
At December  31,  1999,  the Group had letters of credit  outstanding  under the
Revolving Credit Facility of approximately  $37.8 million and no working capital
borrowings.


<PAGE>
                                       33


         DaimlerChrysler Credit Support

         In connection with the Company's  separation from  DaimlerChrysler  and
completion  of the  Offering,  DaimlerChrysler  provided  $38.2  million  credit
support  for the  Group's  vehicle  fleet  financing  in the form of a letter of
credit facility. The credit support was reduced to $28.6 million due to the sale
of  additional  shares by the  Company  in the  Offering.  The  letter of credit
declines  annually  over five years,  which began  September  30,  1999,  by the
greater of $5.7 million or 50% of the Group's  excess cash flow, as defined.  At
December 31, 1999, the credit support  amount was  approximately  $22.8 million.
The  Company  may need to replace  reductions  in the letter of credit with cash
from  operations  or with  borrowings  or letters of credit under the  Revolving
Credit Facility.  To secure reimbursement  obligations under the DaimlerChrysler
credit support  agreement,  DaimlerChrysler  has liens and security interests on
certain assets of the Group.

         Debt Servicing Requirements

         The Group  will  continue  to have  substantial  debt and debt  service
requirements  under its  financing  arrangements.  As of December 31, 1999,  the
Group's total  consolidated debt and other  obligations was  approximately  $1.6
billion,  substantially  all of  which  was  secured  debt for the  purchase  of
vehicles.  The Group has scheduled  annual  principal  payments of approximately
$475 million in 2000,  $231 million in 2001,  $172 million in 2002, $274 million
in 2003, $269 million in 2004 and $137 million thereafter.

         The  Group  intends  to use cash  generated  from  operations  for debt
service and, subject to restrictions under its debt instruments, to make capital
investments. The Company has historically repaid its debt and funded its capital
investments  (aside from growth in its rental  fleet)  with cash  provided  from
operations  and from the sale of vehicles.  The Company has funded growth in its
vehicle fleet by incurring  additional  secured  vehicle debt and cash generated
from operations. The Group expects to incur additional debt from time to time to
the extent permitted under the terms of its debt instruments.

         The  Group  has  significant  requirements  for  bonds to  support  its
insurance  programs and airport  concession  obligations.  At December 31, 1999,
various insurance  companies had issued  approximately $79.0 million in bonds to
secure these obligations.

         Interest Rate Risk

         The Group's results of operations  depend  significantly  on prevailing
levels  of  interest  rates  because  of the  large  amount of debt it incurs to
purchase  vehicles.  In addition,  the Group is exposed to increases in interest
rates  because a portion of its debt  bears  interest  at  floating  rates.  The
Company estimates that, in 2000, approximately 25% of its average debt will bear
interest at floating  rates.  The amount of the Group's  financing costs affects
the amount Dollar,  Thrifty and their franchisees must charge their customers to
be profitable. See Note 8 of Notes to Consolidated Financial Statements.


<PAGE>
                                       34


Inflation

         The increased  acquisition cost of vehicles is the primary inflationary
factor  affecting the Group.  Many of the Group's other  operating  expenses are
also expected to increase with  inflation.  Management  does not expect that the
effect of inflation on the Group's  overall  operating costs will be greater for
the Group than for its competitors.

Year 2000

         The year 2000 issue ("Y2K") relates to potential problems with computer
systems or any equipment employing technology that uses dates where the date has
been stored as just two digits (e.g. 98 for 1998). Any date recording  mechanism
within a computer system, including date sensitive software, which uses only two
digits to  represent  the year may  recognize  a date  using 00 as the year 1900
rather  than the year 2000  resulting  in  system  failures  or  miscalculations
causing a disruption of operations.

         The Group  experienced  no problems  with its systems or  disruption in
service due to the failure of third parties or their independent  franchisees to
be Y2K compliant.

         Nevertheless, since it is impossible to anticipate all future outcomes,
especially  when third parties are involved,  there can be no assurance that the
Group will not, in the future,  experience  disruptions in operations that could
materially and adversely affect the Group's business, results of operations, and
financial condition in the future.

         The Group's costs to remediate  Y2K issues were $6.6  million.  Certain
information  technology  projects  to  enhance  systems  and  improve  operating
efficiencies were delayed due to Y2K compliance efforts.

New Accounting Standards

         Statement  of   Financial   Accounting   Standard   ("SFAS")  No.  133,
"Accounting  for Derivative  Instruments  and Hedging  Activities,"  establishes
accounting and reporting  standards for derivative  instruments  and for hedging
activities.  It requires that all  derivatives be recognized as either assets or
liabilities  in the  statement  of  financial  position  and be measured at fair
value.  During  1999,  the  Financial  Accounting  Standards  Board  delayed the
effective date of SFAS No. 133 for one year to fiscal years beginning after June
15, 2000. SFAS No. 133 is effective for the Company  beginning  January 1, 2001.
The Company plans to adopt the standard when required.


<PAGE>
                                       35


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The table below provides information about the Group's market sensitive
financial instruments and constitutes a "forward-looking statement." The Group's
primary market risk exposure is changing interest rates, primarily in the United
States.  The  Group's  policy  is to  manage  interest  rates  through  use of a
combination of fixed and floating rate debt. A portion of the Group's borrowings
are  denominated  in  Canadian  dollars  which  exposes the Group to market risk
associated  with  exchange  rate  fluctuations.  The Group has  entered  into no
hedging or derivative transactions.  All items described are non-trading and are
stated in U.S. Dollars.

<TABLE>
<CAPTION>
                                                                                                                    Fair Value
Expected Maturity Dates                                                                                            December 31,
as of December 31, 1999             2000       2001        2002       2003       2004      Thereafter    Total         1999
- -------------------------------   ---------  ---------   ---------  ---------  ---------   ----------  ---------   ------------
(U.S. dollars in thousands)

<S>                               <C>        <C>         <C>        <C>        <C>         <C>         <C>          <C>
Debt

Vehicle obligations and other-
   floating rates                 $162,997   $  5,026    $  1,343   $ 22,417   $    108     $ 11,135   $  203,026   $  201,809

Weighted Average interest rates      6.86%      7.84%       8.30%      7.43%      8.30%        7.52%

Vehicle obligations and other-
  fixed rates                     $264,181   $225,819    $170,386   $251,095   $269,036     $126,079   $1,306,596   $1,270,960

Weighted Average interest rates      6.40%      6.47%       6.45%      6.40%      6.22%        6.67%

Vehicle obligations and other-
  Canadian dollar denominated     $ 47,784   $    -      $    -     $    -     $   -        $    -     $   47,784   $   47,784

Weighted Average interest rates      5.47%





                                                                                                                   Fair Value
Expected Maturity Dates                                                                                            December 31,
as of December 31, 1998             1999       2000        2001       2002       2003      Thereafter   Total         1998
- -------------------------------   ---------  ---------   ---------  ---------  ---------   ---------  ----------   ------------
(U.S. dollars in thousands)

Debt

Vehicle obligations and other-
   floating rates                 $170,006   $    -      $  4,000   $   -      $ 22,269     $ 11,135   $  207,410   $  206,981

Weighted Average interest rates      6.34%                  6.95%                 6.65%        6.75%

Vehicle obligations and other-
  fixed rates                     $  2,282   $265,215    $226,120   $170,699   $207,400     $188,865   $1,060,581   $1,059,912

Weighted Average interest rates      8.50%      6.41%       6.48%      6.45%      6.50%        6.62%

Vehicle obligations and other-
  Canadian dollar denominated     $ 46,906   $    -      $    -     $    -     $   -        $   -      $   46,906   $   46,906

Weighted Average interest rates      5.88%


</TABLE>


<PAGE>
                                       36


ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA




INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of
   Dollar Thrifty Automotive Group, Inc.:

         We have audited the accompanying  consolidated  balance sheet of Dollar
Thrifty  Automotive  Group,  Inc. and  subsidiaries  as of December 31, 1999 and
1998, and the related  consolidated  statements of income,  stockholders' equity
and cash flows for each of the three  years in the  period  ended  December  31,
1999. Our audits also included the financial  statement  schedule  listed in the
Index at Item 14. These financial  statements and financial  statement  schedule
are the  responsibility of the Company's  management.  Our  responsibility is to
express  an  opinion  on these  financial  statements  and  financial  statement
schedule based on our audits.

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

         In our opinion, such consolidated  financial statements present fairly,
in all material  respects,  the financial  position of Dollar Thrifty Automotive
Group,  Inc. and  subsidiaries at December 31, 1999 and 1998, and the results of
their  operations and their cash flows for each of the three years in the period
ended  December 31, 1999, in conformity  with  accounting  principles  generally
accepted in the United States of America.  Also, in our opinion,  such financial
statement  schedule,  when  considered  in  relation  to the basic  consolidated
financial statements taken as a whole,  presents fairly in all material respects
the information set forth therein.


DELOITTE & TOUCHE LLP

Tulsa,  Oklahoma
February 2, 2000, except for
Note 17 as to which the date is
March 2, 2000


<PAGE>
                                       37


<TABLE>
<CAPTION>

DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(In Thousands Except Per Share Data)
- --------------------------------------------------------------------------------------------------------------------------------


                                                                           1999          1998          1997
<S>                                                                      <C>           <C>           <C>
REVENUES:
   Vehicle rentals                                                       $714,407      $635,600      $620,045
   Vehicle leasing                                                        218,614       202,371       164,701
   Fees and services                                                       57,046        51,770        49,143
   Other                                                                    8,685         9,225         9,899
                                                                         --------      --------      --------

           Total revenues                                                 998,752       898,966       843,788
                                                                         --------      --------      --------

COSTS AND EXPENSES:
   Direct vehicle and operating                                           289,129       267,504       263,850
   Vehicle depreciation and lease charges, net                            311,113       305,169       294,911
   Selling, general and administrative                                    190,994       163,256       149,697
   Interest expense, net of interest income of $6,071,
      $6,834 and $4,341                                                    95,114        88,726        87,852
   Amortization of cost in excess of net assets acquired                    5,842         5,417         6,010
                                                                         --------      --------      --------

           Total costs and expenses                                       892,192       830,072       802,320
                                                                         --------      --------      --------

INCOME BEFORE INCOME TAXES                                                106,560        68,894        41,468

INCOME TAX EXPENSE                                                         46,974        31,229        23,427
                                                                         --------      --------      --------

NET INCOME                                                               $ 59,586      $ 37,665      $ 18,041
                                                                         ========      ========      ========

Earnings per share:
   Basic                                                                   $ 2.47        $ 1.56        $ 0.90
                                                                         ========      ========      ========


   Diluted                                                                 $ 2.43        $ 1.56        $ 0.90
                                                                         ========      ========      ========

</TABLE>

See notes to consolidated financial statements.


<PAGE>
                                       38


<TABLE>
<CAPTION>

DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1999 AND 1998
(In Thousands Except Share and Per Share Data)
- ------------------------------------------------------------------------------------------------------------------------------


                                                                                       1999                1998
<S>                                                                                 <C>                 <C>
ASSETS
Cash and cash equivalents                                                           $   77,500          $   49,505
Restricted cash and investments                                                        144,671              62,255
Receivables, net                                                                       140,156             115,423
Prepaid expenses and other assets                                                       43,493              42,186
Revenue-earning vehicles, net                                                        1,507,692           1,342,066
Property and equipment, net                                                             69,941              62,747
Income taxes receivable                                                                 10,573                   -
Deferred income tax asset                                                                    -               8,554
Intangible assets, net                                                                 177,627             182,564
                                                                                   -----------         -----------

                                                                                    $2,171,653          $1,865,300
                                                                                   ===========         ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
  Accounts payable                                                                  $   57,242          $   60,862
  Accrued liabilities                                                                  115,232              87,945
  Income taxes payable                                                                       -               9,161
  Deferred income tax liability                                                          5,660                   -
  Public liability and property damage                                                  58,783              77,619
  Debt and other obligations                                                         1,555,609           1,313,799
                                                                                   -----------         -----------
          Total liabilities                                                          1,792,526           1,549,386

COMMITMENTS AND CONTINGENCIES (Note 14)

STOCKHOLDERS' EQUITY:
  Preferred stock, $.01 par value:
    Authorized 10,000,000 shares; none outstanding                                           -                   -
  Common stock, $.01 par value:
    Authorized 50,000,000 shares; issued and outstanding 24,158,429
     and 24,125,055, respectively                                                          242                 241
  Additional capital                                                                   709,040             705,880
  Accumulated deficit                                                                 (329,464)           (389,050)
  Foreign currency translation adjustment                                                 (691)             (1,157)
                                                                                   -----------         -----------

                                                                                       379,127             315,914
                                                                                   -----------         -----------

                                                                                    $2,171,653          $1,865,300
                                                                                   ===========         ===========
</TABLE>

See notes to consolidated financial statements.


<PAGE>
                                       39


<TABLE>
<CAPTION>

DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(In Thousands Except Share and Per Share Data)
- ------------------------------------------------------------------------------------------------------------------------------------




                                                Common Stock                                              Foreign
                                               $.01 Par Value                                             Currency        Total
                                           -----------------------     Additional      Accumulated      Translation    Stockholders'
                                             Shares         Amount        Capital         Deficit        Adjustment      Equity

<S>                                        <C>               <C>         <C>             <C>                <C>           <C>
BALANCE, JANUARY 1, 1997                   20,000,000        $ 200       $ 628,916       $(444,756)         $ (477)       $183,883

   Issuance of common shares in
      public offering                       3,625,000           36          66,800               -               -          66,836

   Comprehensive income:
      Net income                                    -            -               -          18,041               -          18,041
      Foreign currency translation                  -            -               -               -            (334)           (334)
                                           ----------        -----       ---------       ---------         -------        --------
   Total comprehensive income                       -            -               -          18,041            (334)         17,707
                                           ----------        -----       ---------       ---------         -------        --------

BALANCE, DECEMBER 31, 1997                 23,625,000          236         695,716        (426,715)           (811)        268,426

   Issuance of common shares in
      public offering                         498,105            5           9,643               -               -           9,648

   Issuance of common shares for
      director compensation                     1,950            -              40               -               -              40

   Performance share incentive plan                 -            -             481               -               -             481

   Comprehensive income:
      Net income                                    -            -               -          37,665               -          37,665
      Foreign currency translation                  -            -               -               -            (346)           (346)
                                           ----------        -----       ---------       ---------         -------        --------
   Total comprehensive income                       -            -               -          37,665            (346)         37,319
                                           ----------        -----       ---------       ---------         -------        --------

BALANCE, DECEMBER 31, 1998                 24,125,055          241         705,880        (389,050)         (1,157)        315,914

   Issuance of common shares for
      director compensation                     2,798            -              52               -               -              52

   Stock option transactions                   30,576            1             866               -               -             867

   Performance share incentive plan                 -            -           2,242               -               -           2,242

   Comprehensive income:
      Net income                                    -            -               -          59,586               -          59,586
      Foreign currency translation                  -            -               -               -             466             466
                                           ----------        -----       ---------       ---------         -------        --------
   Total comprehensive income                       -            -               -          59,586             466          60,052
                                           ----------        -----       ---------       ---------         -------        --------

BALANCE, DECEMBER 31, 1999                 24,158,429        $ 242       $ 709,040       $(329,464)         $ (691)       $379,127
                                           ==========        =====       =========       =========          ======        ========

</TABLE>


See notes to consolidated financial statements.


<PAGE>
                                       40

<TABLE>
<CAPTION>

DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(In Thousands)
- ------------------------------------------------------------------------------------------------------------------------------------

                                                                                            1999            1998           1997
<S>                                                                                    <C>             <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                                          $    59,586     $    37,665    $    18,041
   Adjustments to reconcile net income to net cash provided
      by operating activities:
      Depreciation                                                                         338,702         303,888        274,641
      Amortization                                                                           8,927           7,708          8,239
      Common stock option transactions                                                         323               -              -
      Performance share incentive plan                                                       2,242             481              -
      Net losses (gains) from disposition of revenue-earning vehicles                      (25,248)         (5,538)        11,431
      Impairment losses                                                                          -           1,305              -
      Provision for losses on receivables                                                    9,682           6,891          2,942
      Deferred income taxes                                                                 14,214          (2,126)         9,251
      Change in assets and liabilities, net of acquisitions:
         Receivables                                                                       (19,045)         26,654        (59,199)
         Prepaid expenses, intangibles and other assets                                     (2,304)        (10,147)        (8,463)
         Accounts payable, accrued liabilities and income taxes payable/receivable           3,748         (21,363)        26,862
         Public liability and property damage                                              (18,836)          1,932         12,452
         Other                                                                                 548             311           (334)
                                                                                       -----------     -----------    -----------

           Net cash provided by operating activities                                       372,539         347,661        295,863

CASH FLOWS FROM INVESTING ACTIVITIES:
   Revenue-earning vehicles:
      Purchases                                                                         (2,410,739)     (2,093,581)    (1,847,957)
      Proceeds from sales                                                                1,927,007       1,782,562      1,371,496
   Restricted cash and investments, net                                                    (82,416)         75,725        (34,047)
   Property and equipment:
      Purchases                                                                            (18,266)        (15,785)       (11,232)
      Proceeds from sales                                                                    1,031             691          2,656
   Acquisition of businesses, net of cash acquired                                               -          (4,617)          (397)
                                                                                       -----------     -----------    -----------

           Net cash used in investing activities                                          (583,383)       (255,005)      (519,481)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Debt and other obligations:
      Proceeds                                                                           3,699,487       1,603,678      2,206,482
      Payments                                                                          (3,457,971)     (1,708,819)    (2,029,353)
   Cash management/working capital - DaimlerChrysler, net                                        -               -         38,267
   Issuance of common shares in public offering                                                  -           9,648         66,836
   Issuance of common shares                                                                   544               -              -
   Vehicle financing issue costs                                                            (3,221)         (3,732)        (5,965)
                                                                                       -----------     -----------    -----------

           Net cash provided by (used in) financing activities                             238,839         (99,225)       276,267
                                                                                       -----------     -----------    -----------

CHANGE IN CASH AND CASH EQUIVALENTS                                                         27,995          (6,569)        52,649

CASH AND CASH EQUIVALENTS:
   Beginning of year                                                                        49,505          56,074          3,425
                                                                                       -----------     -----------    -----------
   End of year                                                                         $    77,500     $    49,505    $    56,074
                                                                                       ===========     ===========    ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid for:
      Income taxes to taxing authorities                                               $    52,343     $    30,112    $     3,235
                                                                                       ===========     ===========    ===========
      Interest                                                                         $    95,038     $    92,288    $    95,253
                                                                                       ===========     ===========    ===========

SUPPLEMENTAL DISCLOSURES OF NONCASH OPERATING ACTIVITIES:
   Reversal of valuation allowance on pre-acquisition net operating loss carryforwards $         -     $         -    $    22,400
                                                                                       ===========     ===========    ===========
   Issuance of common stock for director compensation                                  $        52     $        40    $         -
                                                                                       ===========     ===========    ===========
   Direct financing leases of vehicles to franchisees                                  $    14,780     $         -    $         -
                                                                                       ===========     ===========    ===========
   Notes receivables issued for franchise sales                                        $       590     $         -    $         -
                                                                                       ===========     ===========    ===========

</TABLE>

See notes to consolidated financial statements.

<PAGE>
                                       41


DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
- --------------------------------------------------------------------------------


 1.    BASIS OF PRESENTATION

                  Dollar Thrifty Automotive Group,Inc.("Dollar Thrifty Group" or
       the "Company") is the successor to Pentastar  Transportation  Group, Inc.
       and  subsidiaries.  Prior to December 23, 1997,  the Company was a wholly
       owned subsidiary of Chrysler  Corporation,  now known as  DaimlerChrysler
       Corporation  ("DaimlerChrysler").  On  December  23,  1997,  the  Company
       completed an initial public offering of all its outstanding  common stock
       owned by  DaimlerChrysler  together with additional  shares issued by the
       Company (Note 9).

                  The Company's  significant  wholly owned  subsidiaries include
       Dollar Rent A Car Systems,  Inc.  ("Dollar"),  Thrifty,  Inc., Rental Car
       Finance Corp.("RCFC") and Dollar Thrifty Funding Corp. ("DTFC"). Thrifty,
       Inc.is the parent company to Thrifty Rent-A-Car System, Inc. which is the
       parent  company  to  Thrifty  Canada   Ltd.  ("TCL")  (individually   and
       collectively referred to as  "Thrifty"). Dollar and Thrifty were acquired
       in 1990 and 1989, respectively. The acquisitions were accounted for using
       the purchase method of accounting and the purchase  prices were allocated
       to the assets acquired and liabilities assumed  based on their  estimated
       fair  values,  which  are  reflected  in  the  accompanying  consolidated
       financial  statements.  RCFC and  DTFC  are  special   purpose  financing
       entities  for  the Dollar Thrifty  Group, which  were formed  in 1995 and
       1998, respectively.  The term the "Company"  is used to refer  to  Dollar
       Thrifty  Group  and  subsidiaries,  collectively,  and to  the individual
       subsidiaries  of  Dollar  Thrifty  Group.   Intercompany   accounts   and
       transactions have  been eliminated  in consolidation.

 2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

                  Nature of  Business - Dollar and  Thrifty  are  engaged in the
       business  of the  daily  rental  of  vehicles  to  business  and  leisure
       customers  through  company-owned  stores and in the  business of leasing
       vehicles  to  their  franchisees  for  use in the  daily  vehicle  rental
       business throughout the United States and Canada.  Dollar and Thrifty are
       also  involved  in  selling  vehicle  rental  franchises   worldwide  and
       providing sales and marketing,  reservations,  data  processing  systems,
       insurance and other services to their franchisees.  RCFC and DTFC provide
       financing services to Dollar and Thrifty.

                  Estimates  - The  preparation  of the  Company's  consolidated
       financial  statements in conformity  with generally  accepted  accounting
       principles  requires  management to make estimates and  assumptions  that
       affect the reported  amounts of assets and liabilities and disclosures of
       contingent  assets  and  liabilities  at the  date  of  the  consolidated
       financial  statements  and the reported  amounts of revenues and expenses
       during the  reporting  period.  Actual  results  could  differ from those
       estimates.

                  Cash and Cash Equivalents - Cash and cash equivalents  include
       cash on hand and on deposit,  including  highly liquid  investments  with
       initial maturities of three months or less.

                  Restricted   Cash  and   Investments  -  Restricted  cash  and
       investments  are  restricted  for the  acquisition  of vehicles and other
       specified uses under the rental car asset backed note indenture and other
       agreements  (Note 8).  These funds are  primarily  held in a highly rated
       money market fund with investments  primarily in government and corporate
       obligations  with a  dollar-weighted  average  maturity  not to exceed 60
       days, as permitted by the indenture.  Restricted cash and investments are
       excluded from cash and cash  equivalents.  Interest  earned on restricted
       cash and investments was $2,379,000,  $4,706,000 and $2,382,000 for 1999,
       1998 and 1997, respectively.


<PAGE>
                                       42


                Allowance  for  Doubtful  Accounts - An  allowance  for doubtful
       accounts is generally  established during the period in which receivables
       are recorded.  The allowance is maintained at a level deemed  appropriate
       based on loss experience and other factors affecting collectibility.

                Revenue-Earning  Vehicles - Revenue-earning  vehicles are stated
       at cost net of related discounts and are depreciated over their estimated
       economic lives, or at rates  corresponding to  manufacturers'  guaranteed
       residual  values,   where  applicable.   Depreciation  rates  range  from
       approximately  0.9% to 2.4% per month. Net gains and losses from sales of
       revenue-earning  vehicles  are  recorded  as  an  adjustment  to  vehicle
       depreciation.

                Property and  Equipment - Property and equipment are recorded at
       cost and are depreciated or amortized using principally the straight-line
       basis over the estimated  useful lives of the related  assets.  Estimated
       useful  lives  range  from  ten  to  thirty  years  for   buildings   and
       improvements  and  three to seven  years  for  furniture  and  equipment.
       Leasehold improvements are amortized over the shorter of ten years or the
       lives of the related leases.

                Intangible  Assets - Intangible  assets are amortized  using the
       straight-line  basis.  Cost in excess of net assets acquired is amortized
       over forty and twenty-year periods. Other intangible assets are amortized
       over  primarily  five  years.  The  Company   continually   assesses  the
       recoverability  of the cost in excess of net assets acquired based on its
       estimates of the expected  future cash flows of the  operations  to which
       such amounts relate.

                Long-Lived  Assets - The Company reviews the value of long-lived
       assets and  certain  identifiable  intangibles  for  impairment  whenever
       events or changes in  circumstances  indicate that the carrying amount of
       an asset may not be recoverable based upon estimated future cash flows.

                Accounts  Payable - Disbursements  in excess of bank balances of
       $42,277,000 and $42,393,000 are included in accounts  payable at December
       31, 1999 and 1998, respectively.

                Public  Liability  and Property  Damage - Provisions  for public
       liability and property damage on self-insured  claims are made by charges
       primarily  to direct  vehicle and  operating  expense.  Accruals for such
       charges are based upon  actuarially  determined  evaluations of estimated
       ultimate  liabilities on reported and unreported  claims,  prepared on at
       least an annual basis by an independent actuary.  Historical data related
       to the amount and timing of payments for self-insured claims are utilized
       in preparing the actuarial evaluations.  The accrual for public liability
       and property  damage  claims is discounted  based upon the  independently
       prepared,  actuarially determined estimated timing of payments to be made
       in the  future.  Management  reviews  the actual  timing of  payments  as
       compared with the annual actuarial estimate of timing of payments and has
       determined that there have been no material  differences in the timing of
       payments  for each of the three years in the period  ended  December  31,
       1999.

                Foreign  Currency  Translation - Foreign assets and  liabilities
       are  translated  using the exchange  rate in effect at the balance  sheet
       date, and results of operations are translated  using an average rate for
       the period.  Translation  adjustments  are  accumulated and reported as a
       component of stockholders' equity and comprehensive income.

                Revenue Recognition - The Company rents revenue-earning vehicles
       under  short-term  rental  contracts.  Revenues are  recognized as earned
       under  the  terms  of the  rental  contracts.  The  Company  also  leases
       revenue-earning vehicles to franchisees primarily under operating leases.
       Revenues are recognized as earned over the lease term.


<PAGE>
                                       43


                Initial franchise fees are recognized at the date of sale of the
       franchise,  which  coincides  with  commencement  of  operations  by  the
       franchisee. Continuing franchise fees are reported as revenue as the fees
       are earned.

                Advertising Costs - Advertising costs are primarily  expensed as
       incurred.  The  Company  incurred  advertising  expense  of  $34,142,000,
       $35,863,000 and $37,000,000 for 1999, 1998 and 1997, respectively.

                Thrifty's primary  advertising is conducted by an unconsolidated
       affiliated entity,  Thrifty Rent-A-Car System, Inc. National  Advertising
       Committee  ("Thrifty  National Ad"). Thrifty made payments of $2,865,000,
       $3,073,000  and  $4,222,000  in 1999,  1998 and  1997,  respectively,  to
       Thrifty  National Ad to support funding of advertising  campaigns,  which
       are included in advertising  costs.  Thrifty also received  reimbursement
       from  Thrifty  National  Ad  for  administrative  services  performed  of
       $2,392,000,  $1,790,000  and  $1,741,000  during  1999,  1998  and  1997,
       respectively,  which are  recorded  as offsets to  selling,  general  and
       administrative expense.

                Environmental  Costs  - The  Company's  operations  include  the
       storage of gasoline in underground storage tanks at certain company-owned
       stores.  Liabilities  incurred  in  connection  with the  remediation  of
       accidental  fuel  discharges  are  recorded  when  it  is  probable  that
       obligations  have  been  incurred  and  the  amounts  can  be  reasonably
       estimated.

                Income Taxes - Prior to December 23, 1997,  the  Company's  U.S.
       operations were included in the  consolidated  U.S. income tax returns of
       DaimlerChrysler.  U.S.  operating  results  subsequent  to that  date are
       included in the  Company's  U.S.  consolidated  returns.  The Company has
       provided  for income  taxes on its  separate  taxable  income or loss and
       other  tax  attributes.  Deferred  income  taxes  are  provided  for  the
       temporary  differences  between the financial reporting basis and the tax
       basis of the Company's assets and liabilities.  A valuation  allowance is
       recorded for deferred income tax assets when management  determines it is
       more likely than not that such assets will not be realized.

                Earnings  Per  Share -  Basic  earnings  per  share  ("EPS")  is
       computed by dividing net income by the weighted  average number of common
       shares  outstanding  during  the  period.  Diluted  EPS is  based  on the
       combined  weighted  average  number of common  shares  and  common  share
       equivalents  outstanding which include,  where  appropriate,  the assumed
       exercise of options.  In computing  diluted EPS, the Company has utilized
       the treasury stock method.

                Stock-Based  Compensation - The Company accounts for stock-based
       compensation  using the intrinsic  value method  prescribed in Accounting
       Principles Board ("APB") Opinion No. 25,  "Accounting for Stock Issued to
       Employees."  Compensation cost for stock options,  if any, is measured as
       the excess of the quoted market price of the Company's  stock at the date
       of grant  over the  amount an  employee  must pay to  acquire  the stock.
       Compensation  cost for shares  issued  under  performance  share plans is
       recorded  based upon the current  market value of the Company's  stock at
       the  end  of  each  period.   The  Company  has  adopted  the  disclosure
       requirements of Statement of Financial  Accounting Standards ("SFAS") No.
       123, "Accounting for Stock-Based Compensation."

                New  Accounting  Standards  -  Effective  January 1,  1999,  the
       Company adopted  Statement of Position ("SOP") 98-1,  "Accounting for the
       Costs of Computer Software  Developed or Obtained for Internal Use." This
       SOP provides  guidance on accounting  for the costs of computer  software
       developed  or  obtained  for  internal  use and  requires  that  entities
       capitalize certain internal-use  software costs once certain criteria are
       met. Adoption of SOP 98-1 did not have a material impact on the Company's
       consolidated financial statements.

                SFAS No. 133, "Accounting for Derivative Instruments and Hedging
       Activities,"   establishes   accounting   and  reporting   standards  for
       derivative  instruments and for hedging activities.  It requires that all
       derivatives  be  recognized  as  either  assets  or  liabilities  in  the
       statement  of financial  position  and be measured at fair value.  During
       1999,  the  effective  date of SFAS No. 133 was  delayed  for one year to
       fiscal years  beginning  after June 15, 2000.  The Company plans to adopt
       the standard when required.


<PAGE>
                                       44


                Reclassifications - Certain  reclassifications have been made in
       the 1998 and 1997  consolidated  financial  statements  to conform to the
       classifications used in 1999.

 3.    ACQUISITIONS

                During 1998,  Dollar acquired certain assets and assumed certain
       liabilities of its former San Diego and Phoenix  franchisees.  Total cash
       paid for these two  acquisitions  was  $4,617,000,  net of cash acquired.
       These  transactions  have been accounted for using the purchase method of
       accounting  and  operating  results  of the  acquirees  from the dates of
       acquisition,  which  are not  material  to the year of  acquisition,  are
       included  in the  consolidated  statement  of income of the  Company.  At
       December  31,  1999,  cost in excess of net assets of Dollar  franchisees
       acquired of $31,635,000  is being  amortized on the  straight-line  basis
       over twenty years.

 4.    RECEIVABLES

       Receivables consist of the following:

                                                            December 31,
                                                   -----------------------------
                                                        1999         1998
                                                           (In Thousands)
        Trade accounts receivable                     $ 85,955      $ 75,943
        Notes receivable                                 7,152         8,684
        Financing receivables, net                      14,090             -
        Due from DaimlerChrysler                        50,727        45,706
                                                      --------      --------
                                                       157,924       130,333
        Less allowance for doubtful accounts           (17,768)      (14,910)
                                                      --------      --------

                                                      $140,156      $115,423
                                                      ========      ========


                Trade accounts and notes receivable  include  primarily  amounts
       due from  franchisees  and tour  operators  arising from  billings  under
       standard  credit  terms for  services  provided  in the normal  course of
       business  and  amounts  due from the  sale of  revenue-earning  vehicles.
       Included in trade  accounts  receivable  at December 31, 1999 and 1998 is
       approximately  $1,106,000  and  $903,000,  respectively,  due from a tour
       operator,  which is owned by a director of the Company.  Notes receivable
       are generally  issued to certain  franchisees at current market  interest
       rates  with  varying   maturities   and  are   generally   guaranteed  by
       franchisees.

                Financing  receivables  arise from  direct  financing  leases of
       vehicles with franchisees.  These receivables have terms up to a year and
       are collateralized by the vehicles.  Financing  receivables are presented
       net of unearned income of $285,000 at December 31, 1999.

                Due from  DaimlerChrysler is comprised  primarily of amounts due
       under  various  incentive and promotion  programs.  In 1997,  the Company
       recorded net interest income of $1,873,000 on working capital amounts due
       from  DaimlerChrysler.  A director of the Company is an executive officer
       of DaimlerChrysler.


<PAGE>
                                       45


 5.    REVENUE-EARNING VEHICLES

       Revenue-earning vehicles consist of the following:

                                                         December 31,
                                                 -------------------------------
                                                     1999            1998
                                                        (In Thousands)

        Revenue-earning vehicles                  $1,659,926       $1,477,506
        Less accumulated depreciation               (152,234)        (135,440)
                                                  ----------       ----------

                                                  $1,507,692       $1,342,066
                                                  ==========       ==========


                Dollar and Thrifty entered into U.S.  Vehicle Supply  Agreements
       ("VSAs") with  DaimlerChrysler,  which commenced with the 1997 model year
       and expire in July 2001.  Under the VSAs,  DaimlerChrysler  has agreed to
       supply  certain  specified  volumes of vehicles,  which are  comprised of
       approximately  80% guaranteed  depreciation  program  vehicles  ("Program
       Vehicles").  Dollar and Thrifty are  required to purchase at least 80% of
       their  vehicles from  DaimlerChrysler,  up to specified  volumes of which
       minimum  amounts must be Program  Vehicles.  Under the terms of the VSAs,
       Dollar and Thrifty have agreed to advertise  and promote  DaimlerChrysler
       products   exclusively,   and  will  receive  promotional  payments  from
       DaimlerChrysler  for  each  model  year.   Purchases  of  revenue-earning
       vehicles   from   DaimlerChrysler   and   DaimlerChrysler   Canada   Inc.
       ("DaimlerChrysler   Canada")  were  $2,101,537,000,   $2,007,406,000  and
       $1,765,825,000 during 1999, 1998 and 1997, respectively.

                Rent   expense   for   vehicles   leased   from  other   vehicle
       manufacturers  and third parties under  operating  leases was $7,787,000,
       $16,664,000 and $17,635,000 for 1999, 1998 and 1997, respectively, and is
       included in vehicle depreciation and lease charges, net. Amounts due over
       the next three  years for  vehicles  under  operating  leases  with terms
       greater than one year total $1,120,000.

                Vehicle acquisition terms provide for guaranteed residual values
       in the U.S.  or buybacks in Canada of the  majority  of  vehicles,  under
       specified  conditions.  Guaranteed residual and buyback payments received
       are  included  in  proceeds  from  sales  of  revenue-earning   vehicles.
       Additionally,   the  Company  receives  promotional  payments  and  other
       incentives primarily related to the disposal of revenue-earning vehicles,
       which  amounts are  reflected as offsets to direct  vehicle and operating
       expense.   Promotional   payments   are   primarily   amortized   on  the
       straight-line   basis  over  the  respective  model  year  to  which  the
       promotional   payments  relate.   The  Company  also  receives   interest
       reimbursement  for  Program  Vehicles  while at auction  and for  certain
       delivery related interest costs,  which amounts are reflected in interest
       expense,  net. Amounts recorded from  DaimlerChrysler and DaimlerChrysler
       Canada  for  guaranteed  residual  value  program  payments,  promotional
       payments,   interest   reimbursement   and   other   incentives   totaled
       $312,932,000,  $339,575,000  and  $269,070,000  in 1999,  1998 and  1997,
       respectively.  Buyback payments received from DaimlerChrysler Canada were
       $69,545,000,   $64,413,000  and  $78,385,000  in  1999,  1998  and  1997,
       respectively.

                The Company acquires some vehicles from other manufacturers, the
       majority of which are subject to guaranteed buyback at established values
       by the manufacturers.


<PAGE>
                                       46


 6.    PROPERTY AND EQUIPMENT

       Major classes of property and equipment consist of the following:

                                                              December 31,
                                                        ------------------------
                                                            1999         1998
                                                              (In Thousands)

        Land                                               $ 14,325    $ 14,275
        Buildings and improvements                           15,563      14,380
        Furniture and equipment                              41,556      35,510
        Leasehold improvements                               43,986      36,743
        Construction in progress                              9,006       7,571
                                                            -------    --------
                                                            124,436     108,479
        Less accumulated depreciation and amortization      (54,495)    (45,732)
                                                           --------    --------

                                                           $ 69,941    $ 62,747
                                                           ========    ========


7.     INTANGIBLE ASSETS

       Intangible assets consist of the following:

                                                             December 31,
                                                     ---------------------------
                                                          1999         1998
                                                            (In Thousands)

        Cost in excess of net assets acquired           $ 257,248     $257,232
        Other                                              24,723       30,576
                                                        ---------     --------
                                                          281,971      287,808
        Less accumulated amortization                    (104,344)    (105,244)
                                                        ---------     --------

                                                        $ 177,627     $182,564
                                                        =========     ========


<PAGE>
                                       47


8.     DEBT AND OTHER OBLIGATIONS

<TABLE>
<CAPTION>

       Debt and other obligations consist of the following (in thousands):

                                                                           December 31,
                                                                   ---------------------------
                                                                        1999           1998
                                                                          (In Thousands)
        <S>                                                         <C>             <C>
        Vehicle Debt and Other Financing:
           Asset backed notes:
              1999 Series notes                                     $  250,000      $        -
              1997 Series notes                                        900,000         900,000
              1995 Series notes                                        194,000         283,667
                                                                    ----------      ----------
                                                                     1,344,000       1,183,667
                   Discounts on asset backed notes                        (689)           (669)
                                                                    ----------      ----------
                   Asset backed notes, net of discount               1,343,311       1,182,998
           Commercial paper, net of discount of $1,217 and $429         80,376          79,786
           Other vehicle debt                                           86,452           3,884
           Limited partner interest in limited partnership              45,361               -
           Deferred vehicle rent                                             -          46,906
                                                                    ----------      ----------
                    Total vehicle debt and other financing           1,555,500       1,313,574

           Other notes payable                                             109             225
                                                                    ----------      ----------

        Total debt and other obligations                            $1,555,609      $1,313,799
                                                                    ==========      ==========
</TABLE>


       Vehicle Debt and Other Financing

                Asset  Backed  Notes are  comprised  of rental car asset  backed
       notes  issued by RCFC in April 1999 (the "1999 Series  notes"),  December
       1997 (the "1997  Series  notes")  and  December  1995 (the  "1995  Series
       notes").

                The 1999 Series notes are  comprised  of fixed rate notes,  with
       rates ranging from 5.9% to 7.1%.

                The 1997 Series  notes are  comprised of  $866,596,000  of fixed
       rate notes,  with rates  ranging  from 6.25% to 6.8% and  $33,404,000  of
       floating  rate notes with  interest at rates ranging from LIBOR plus .95%
       to LIBOR plus 1.05%  (7.42% to 7.52% at  December  31,  1999 and 6.61% to
       6.71% at December 31, 1998).

                The 1995 Series notes are  comprised of  $190,000,000  (1999 and
       1998) of 6.6%  fixed  rate notes and  $4,000,000  (1999) and  $93,667,000
       (1998)  floating rate notes,  with an interest rate of LIBOR plus .70% to
       LIBOR plus 1.25% (7.72% and 6.36% to 6.91% at December 31, 1999 and 1998,
       respectively).

                The assets of RCFC, including  revenue-earning  vehicles related
       to the asset backed notes,  restricted cash and investments,  and certain
       receivables related to revenue-earning  vehicles,  are available first to
       satisfy  the claims of its  creditors.  At  December  31,  1999 and 1998,
       letters of credit  totaling  $22,848,000 and  $28,560,000,  respectively,
       issued on behalf of  DaimlerChrysler,  also serve as  collateral  for the
       asset backed notes. These letters of credit will continue to decline over
       the next four years. DaimlerChrysler has liens on and collateral interest
       in certain assets of the Company.  Dollar and Thrifty lease vehicles from
       RCFC under the terms of a master lease and servicing agreement. The asset
       backed note  indentures  also provide for additional  credit  enhancement
       through  overcollateralization  of the vehicle  fleet or other letters of
       credit and maintenance of a liquidity reserve. RCFC is in compliance with
       the terms of the indentures.


<PAGE>
                                       48


                The asset  backed  notes  mature from 2000  through 2005 and are
       generally  subject  to  repurchase  on  any  payment  date  subject  to a
       prepayment penalty.

                Commercial  Paper  represents  borrowings  under a  $640,000,000
       Commercial  Paper  Program as a part of the  existing  asset  backed note
       program.  Proceeds are used for  financing of vehicle  purchases  and for
       periodic  refinancing  of  asset  backed  notes.  Concurrently  with  the
       establishment of the Commercial  Paper Program,  the Company also entered
       into a 364-day, $575,000,000 Liquidity Facility to support the Commercial
       Paper  Program.  The Liquidity  Facility  provides the  Commercial  Paper
       Program with an alternative source of funding if the Company is unable to
       refinance  maturing  commercial  paper by issuing new  commercial  paper.
       Commercial  paper bears  interest at rates  ranging  from 6.1% to 6.3% at
       December  31,  1999 and 5.2% to 5.9% at  December  31,  1998 and  matures
       within 31 days of December 31, 1999.

                Other Vehicle Debt at December 31, 1999  includes  borrowings of
       $67,938,000 under  $102,000,000  revolving lines of credit with a vehicle
       manufacturer's  finance  subsidiary which bear interest at rates based on
       commercial  paper rates (7.23% at December 31,  1999).  Also  included in
       other  vehicle  debt  in  1999  are  borrowings  of  $10,140,000  under a
       $12,000,000  revolving line of credit which bears interest at rates based
       on LIBOR (8.4% at December 31, 1999).  These revolving credit  facilities
       have one-year terms and the $102,000,000 line is renewable for successive
       one-year terms by mutual agreement.  The lines are  collateralized by the
       vehicles  financed  under the  facilities.  Borrowings of $5,951,000  and
       $3,884,000 at December 31, 1999 and 1998,  respectively,  with a weighted
       average  interest  rate at December  31, 1999 and 1998 of 8.35% and 8.5%,
       respectively,  which  are  collateralized  by  shuttle  buses  and  other
       vehicles financed, are also included in other vehicle debt.

                Limited  Partner  Interest in Limited  Partnership - In February
       1999,  TCL  entered  into  a  partnership   agreement  (the  "Partnership
       Agreement")  with an unrelated  bank's  conduit (the "Limited  Partner").
       This  transaction  included  the creation of a limited  partnership  (TCL
       Funding Limited Partnership,  "Partnership").  TCL is the General Partner
       in the  Partnership.  The  Limited  Partner's  interest is  reflected  as
       Limited Partner Interest in Limited Partnership.

                The  Partnership  Agreement  has a  five-year  term,  subject to
       extension,  with the purpose to purchase,  own,  lease and rent  vehicles
       throughout   Canada.   The  Limited  Partner  has  committed  to  funding
       approximately  CDN$150 million  (approximately US$104 million at December
       31, 1999) to the Partnership which they fund through issuance and sale of
       notes in the Canadian commercial paper market.

                TCL, as General  Partner,  is  allocated  the  remainder  of the
       partnership  net income  after  distribution  of the income  share of the
       Limited  Partner,  which is based on the weighted average capital balance
       of the Limited Partner multiplied by a rate which is based on the average
       commercial  paper rate.  At December  31, 1999,  this rate was 5.4%.  The
       Limited  Partner's  income share  amounted to $1,854,000 in 1999 which is
       included  in  interest  expense.  Due to the  nature of the  relationship
       between TCL and the Partnership, the accompanying consolidated statements
       include the accounts of the Partnership.

                Any  amounts  due to  TCL  which  are  directly  related  to the
       vehicles,  including vehicle rental revenues, payments from licensees and
       proceeds   from  vehicle   disposition   programs,   are  vested  in  the
       Partnership.  Upon  disposition  of vehicles,  proceeds in excess of that
       required  to  fund  further  vehicle  purchases  are  distributed  to the
       Partners in proportion to their capital accounts.

                TCL entered into a CDN$15 million (approximately US$10.3 million
       at December 31, 1999)  revolving line of credit to support its investment
       in the Partnership.  At December 31, 1999, CDN$3.5 million (approximately
       US$2.4  million)  was  outstanding  under this line of  credit,  which is
       included in other vehicle debt. The weighted average interest rate on the
       line at December 31, 1999 was 6.7%.


<PAGE>
                                       49


                The  Partnership  Agreement  requires the maintenance of certain
       letters of credit and contains various restrictive covenants, including a
       limitation  on the  percentage  of  vehicles  which  are not  covered  by
       manufacturer  repurchase  programs  and  the  maintenance  by  TCL  of  a
       specified  minimum  tangible net worth. The line of credit agreement also
       requires the  maintenance  of letters of credit and the  maintenance of a
       specified minimum tangible net worth by TCL.

                Deferred Vehicle Rent - Prior to February 1999, TCL financed its
       revenue-earning  vehicles under a Master  Concurrent Lease Agreement (the
       "Lease  Agreement")  with  an  unrelated  auto  leasing  trust  ("Leasing
       Trust").  Under the Lease  Agreement,  Leasing  Trust  prepaid 91% of the
       total lease rent due to TCL at the inception of the leases.  In September
       1999,  the Lease  Agreement was  terminated  and the  remaining  CDN$13.3
       million  (approximately US$9.1 million) of financed vehicles were sold to
       the Partnership at net book value.  The weighted average interest rate on
       deferred vehicle rent at December 31, 1998 was 5.9%.

                Expected  repayments of vehicle debt and obligations outstanding
       at December 31, 1999 are as follows:

<TABLE>
<CAPTION>

                                     2000          2001         2002          2003          2004      Thereafter
                                                                  (In Thousands)
        <S>                        <C>          <C>          <C>             <C>           <C>           <C>
        Asset backed notes         $ 264,181    $ 229,819    $ 170,386     $ 273,364     $ 269,036     $ 137,214
        Commercial paper              81,593            -            -             -             -             -
        Other vehicle debt            83,827        1,026        1,343           148           108             -
        Limited partner
           interest                   45,361            -            -             -             -             -
                                   ---------    ---------    ---------     ---------     ---------     ---------

        Total                      $ 474,962    $ 230,845    $ 171,729     $ 273,512     $ 269,144     $ 137,214
                                   =========    =========    =========     =========     =========     =========
</TABLE>


                During   1997,   while  the   Company   was  a   subsidiary   of
       DaimlerChrysler,  total interest expense on all  DaimlerChrysler  vehicle
       and other debt, net of interest subvention, was $55,425,000.

       Other Notes Payable

                In  December   1997,   the  Company   established  a  five-year,
       $215,000,000  Senior Secured  Revolving Credit Facility (the "Revolver").
       The Revolver provides sub-limits up to $190,000,000 for letters of credit
       and up to  $70,000,000  for working  capital  borrowings.  As of December
       31,1999,  the Company is required  to pay a 0.30%  commitment  fee on the
       unused  available  line,  a 1.75%  letter of credit fee on the  aggregate
       amount of  outstanding  letters of credit  and a 0.125%  letter of credit
       issuance  fee.  Interest  rates on loans under the  Revolver  are, at the
       option of the Company,  based on the prime,  Federal  funds or Eurodollar
       rates and are payable  quarterly.  The  Revolver is  collateralized  by a
       first priority lien on substantially all material  non-vehicle  assets of
       the  Company.  The  Revolver  contains  various  restrictive   covenants,
       including  maintenance of certain  financial ratios consisting of minimum
       net worth, adjusted EBITDA, fixed charge,  leverage and interest coverage
       ratios and the restriction of cash dividends.  The Company had letters of
       credit of $37,845,000 and  $20,059,000 and no working capital  borrowings
       outstanding   under  the   Revolver  at  December   31,  1999  and  1998,
       respectively.

                Maturities of  other notes payable at  December 31,  1999 are as
       follows:  $43,000 (2000), $48,000 (2001) and $18,000 (2002).


<PAGE>
                                       50


 9.    STOCKHOLDERS' EQUITY

                The Company  completed an initial public  offering of its common
       stock on December 23, 1997. The Company issued and sold 3,625,000  shares
       of its common  stock  (2,500,000  "primary  shares" and  1,125,000  "over
       allotment  shares")  and  DaimlerChrysler  sold  all  of  the  20,000,000
       outstanding   shares  of  the  Company's   common  stock  that  it  owned
       ("secondary  shares").  On January  15,  1998,  498,105  additional  over
       allotment shares were issued by the Company. The common stock was sold at
       an initial price of $20.50 per share.  The Company  received net proceeds
       of $66,836,000  and  $9,648,000,  respectively,  from the issuance of the
       shares.  The  proceeds  received by the Company  from the  offering  were
       initially  used to provide  collateral  for financing of  revenue-earning
       vehicles and for other general corporate purposes.

                On July 23, 1998,  the Company  adopted a  stockholders'  rights
       plan. The rights were issued on August 3, 1998, to stockholders of record
       on that date, and will expire on August 3, 2008, unless earlier redeemed,
       exchanged or amended by the Board of Directors.

                The  plan  provides  for the  issuance  of one  right  for  each
       outstanding  share of the Company's common stock. Upon the acquisition by
       a  person  or group of 15% or more of the  Company's  outstanding  common
       stock,  the  rights  generally  will  become  exercisable  and  allow the
       stockholder,  other than the acquiring person or group, to acquire common
       stock at a discounted price.

                The plan also  includes  an  exchange  option  after the  rights
       become exercisable. The Board of Directors may effect an exchange of part
       or all of the rights, other than rights that have become void, for shares
       of the Company's  common stock for each right. The Board of Directors may
       redeem all rights for $.01 per right,  generally at any time prior to the
       rights becoming exercisable.

                The issuance of the rights had no dilutive  effect on the number
       of common shares outstanding and did not affect earnings per share.


<PAGE>
                                       51


10.    EARNINGS PER SHARE

                The computation of weighted average common and common equivalent
       shares used in the calculation of basic and diluted EPS is shown below:

<TABLE>
<CAPTION>

                                                       1999            1998            1997
                                                  (In Thousands, Except Share and Per Share Data)
        <S>                                          <C>              <C>             <C>
        Net Income                                 $   59,586       $   37,665      $   18,041
                                                   ==========       ==========      ==========

        Basic EPS:
          Weighted average common shares           24,136,050       24,105,837      20,089,384
                                                   ==========       ==========      ==========

        Basic EPS                                  $     2.47       $     1.56      $     0.90
                                                   ==========       ==========      ==========

        Diluted EPS:
          Weighted average common shares           24,136,050       24,105,837      20,089,384

        Shares contingently issuable:
          Stock options                               205,576           43,569               -
          Performance awards                          131,467           37,350               -
          Director compensation shares deferred        12,008            3,197               -
                                                   ----------       ----------      ----------

        Shares applicable to diluted               24,485,101       24,189,953      20,089,384
                                                   ==========       ==========      ==========

        Diluted EPS                                $     2.43       $     1.56      $     0.90
                                                   ==========       ==========      ==========

</TABLE>

                Options to purchase  1,584,000  and  1,155,000  shares of common
       stock were outstanding at December 31, 1999 and 1998,  respectively,  but
       were not  included  in the  computation  of  diluted  earnings  per share
       because the exercise  price was greater than the average  market price of
       the common shares.

11.    EMPLOYEE BENEFIT PLANS

       Employee Benefit Plans

                The Company sponsors a retirement savings plan that incorporates
       the salary reduction provisions of Section 401(k) of the Internal Revenue
       Code and  covers  substantially  all  employees  of the  Company  meeting
       specific age and length of service requirements.  The Company contributes
       50%  up to 5% of  the  employee's  contribution  for a  maximum  matching
       contribution  by the  Company of 2-1/2% of the  employee's  base  salary.
       Contributions  by the Company  amounted  to  $1,598,000,  $1,090,000  and
       $983,000 in 1999, 1998 and 1997, respectively.

                During 1999,  certain  enhancements to  the Company contribution
       provision of the retirement savings plan were adopted.  Effective January
       1, 2000,  the  Company's  50% match was increased and applies up to 6% of
       the employee's  contribution for a maximum matching contribution of 3% of
       the employee's base salary.

                Included in  accrued  liabilities at December 31,  1999 and 1998
       is $2,301,000 and $1,753,000,  respectively,  for employee health claims,
       which are  self-insured by the Company.  The accrual includes amounts for
       incurred and incurred but not reported claims.


<PAGE>
                                       52


                The  Company  has  bonus  and  profit  sharing   plans  for  all
       employees  based on company  performance.  Expense related to these plans
       was  $17,096,000,  $8,109,000  and  $7,313,000  in 1999,  1998 and  1997,
       respectively.

       Deferred Compensation and Retirement Plans

                The Company  has  deferred  compensation  and  retirement  plans
       providing key  executives  with the  opportunity  to defer  compensation,
       including  related  investment  income.  Under the deferred  compensation
       plan, the Company  contributes up to 7% of participant cash compensation.
       Participants become fully vested under both the deferred compensation and
       retirement  plans after five years of service.  The total of  participant
       deferrals in the deferred  compensation and retirement  plans,  which are
       reflected in accrued  liabilities,  was  $10,791,000 and $4,992,000 as of
       December 31, 1999 and 1998, respectively.  Expense related to these plans
       totaled  $4,525,000,  $2,086,000  and  $273,000  in 1999,  1998 and 1997,
       respectively.

       Long-Term Incentive Plan

                The  Company   has a  long-term  incentive   plan  ("LTIP")  for
       employees and  non-employee  directors  which  provides for grants in the
       form of  nonqualified  stock  options,  incentive  stock  options,  stock
       appreciation rights, restricted stock, performance share awards and other
       stock-based  incentive awards.  Ten percent of the Company's common stock
       outstanding  was  authorized  for  issuance  under  the  LTIP  (2,415,843
       shares),  with a share  addition  provision that allows for the number of
       shares reserved to increase by 10% of any newly issued shares.

                The Board of Directors,  upon the  recommendation of  the  Human
       Resources  and  Compensation  Committee,  is  authorized  to award  stock
       options.  The exercise prices for nonqualified stock options are equal to
       the fair market value of the Company's common stock at the date of grant,
       except  for the  initial  grant  which  was  made at the  initial  public
       offering  price.  The  options  vest in three equal  annual  installments
       commencing on the first anniversary of the grant date and have a term not
       exceeding ten years from the date of grant.

                Performance  share  awards are granted  to Company  officers and
       certain key employees.  Such awards established a target number of shares
       that may be earned in three equal annual  installments  commencing on the
       first  anniversary of the grant date.  The number of  performance  shares
       ultimately  earned is  expected  to range from zero to 200% of the target
       award,  depending on the level of corporate performance each year against
       annual  profit  targets  and  stock  price  appreciation   targets.   Any
       performance share  installments not earned as of a given anniversary date
       are  forfeited.  Performance  shares  earned are  delivered  on the third
       anniversary of the initial  grant,  provided the grantee is then employed
       by  the  Company.  Values  of  the  performance  shares  earned  will  be
       recognized as compensation expense over the vesting period of the grants.
       At December 31, 1999,  performance shares earned in 1998 and 1999, net of
       forfeitures,  and the target award for 2000 totaled approximately 180,000
       shares.  All shares  earned will vest on January 31,  2001.  These shares
       would become immediately vested under certain circumstances,  including a
       change of control.  The Company  recognized  $2,242,000  and  $481,000 of
       compensation cost in 1999 and 1998,  respectively,  for performance share
       awards.


<PAGE>
                                       53


       The status of the Company's stock option plan is summarized below:

                                                                        Weighted
                                                       Number of        Average
                                                        Shares          Exercise
                                                     (In Thousands)      Price

        Outstanding at December 31, 1997                     -           $     -

        Granted                                          1,677             17.60
        Exercised                                            -                 -
        Canceled                                           (34)            19.68
                                                        ------           -------

        Outstanding at December 31, 1998                 1,643             17.56

        Granted                                            505             19.07
        Exercised                                          (30)            15.04
        Canceled                                           (81)            16.31
                                                        ------           -------

        Outstanding at December 31, 1999                 2,037           $ 18.02
                                                        ======           =======

        Options exercisable at:
           December 31, 1999                               868           $ 18.91
           December 31, 1998                               396           $ 20.31


       Accounting for Stock-Based Compensation

                As  stated in Note 2, the  Company  has  elected  to  follow the
       intrinsic  value approach  prescribed in APB Opinion No. 25 in accounting
       for its employee stock plans. The Company has adopted the disclosure-only
       provisions  of SFAS No. 123.  If the  Company  had  elected to  recognize
       compensation  cost based on the fair value of the options  granted at the
       grant date as  prescribed by SFAS No. 123, net income for 1999 would have
       been reduced from the amount as reported of  $59,586,000 to the pro forma
       amount of  $57,259,000  and net income  for 1998 would have been  reduced
       from the amount as reported  of  $37,665,000  to the pro forma  amount of
       $34,377,000. Earnings per share as reported of $2.43 and $1.56 would have
       been reduced to the pro forma amount of $2.34 and $1.42, respectively.

                The  pro  forma   amounts  noted  reflect  the  portion  of  the
       estimated  fair  value of  awards  earned  in 1999 and 1998  based on the
       vesting  period of the options.  No awards were granted prior to December
       31, 1997.

                The Black-Scholes  option  valuation  model was used to estimate
       the fair value of the  options at the date of grant for  purposes  of the
       pro forma amounts  noted.  The following  assumptions  were used for both
       1999 and  1998:  weighted-average  expected  life of the  awards  of five
       years,  volatility factor of 37.5%,  risk-free interest rate of 5.75% and
       4.74%,  respectively,  and no payment of dividends.  Based on this model,
       the  weighted-average  fair value of options granted during 1999 and 1998
       was $8.03 and $7.10 per share, respectively.

                The Black-Scholes  option valuation model  was developed for use
       in  estimating  the fair value of traded  options,  which have no vesting
       restrictions and are fully  transferable.  In addition,  option valuation
       models require the input of highly subjective assumptions,  including the
       expected stock volatility.  Because the Company's  employee stock options
       have characteristics  significantly  different from those traded options,
       and because  changes in the subjective  input  assumptions can materially
       affect the fair value  estimate,  in management's  opinion,  the existing
       models do not  necessarily  provide a reliable single measure of the fair
       value of the employee stock options.


<PAGE>
                                       54


                The following   table  summarizes   information  regarding fixed
       stock options that were outstanding at December 31, 1999:

<TABLE>
<CAPTION>

                                              Options Outstanding                         Options Exercisable
                               -------------------------------------------------   --------------------------------
                                                  Weighted-Average    Weighted-                         Weighted-
            Range of               Number            Remaining         Average            Number         Average
            Exercise             Outstanding      Contractual Life    Exercise          Exercisable      Exercise
             Prices            (In Thousands)        (In Years)         Price         (In Thousands)      Price
        <S>                        <C>                 <C>             <C>                  <C>          <C>
        $10.50 - $19.1875            909               9.24            $ 14.93              138          $ 10.50

        $20.50 - $21.1875          1,128               8.03              20.52              730            20.50
                                  ------              -----            -------            -----          -------

        $10.50 - $21.1875          2,037               8.57            $ 18.02              868          $ 18.91
                                  ======              =====            =======            =====          =======

</TABLE>

                Under  certain circumstances, including  a change of  control of
       the Company, the options outstanding would be exercisable immediately.

12.    INCOME TAXES

       Income tax expense consists of the following:

                                                Year Ended December 31,
                                    -------------------------------------------
                                          1999          1998          1997
                                                   (In Thousands)

        Current:
           Federal                      $28,245       $28,879       $13,259
           State and local                4,035         4,126           504
           Foreign                          480           350           413
                                        -------       -------       -------
                                         32,760        33,355        14,176

        Deferred:
           Federal                       12,437        (1,860)        8,653
           State and local                1,777          (266)          598
                                        -------       -------       -------
                                         14,214        (2,126)        9,251
                                        -------       -------       -------

                                        $46,974       $31,229       $23,427
                                        =======       =======       =======


                Foreign   losses   before   income  taxes   were   approximately
       $549,000, $1,727,000 and $2,368,000 in 1999, 1998 and 1997, respectively.

                Intercompany tax settlements for tax periods  prior to December
       23,  1997  resulted  in payments to  DaimlerChrysler  of  $6,320,000  and
       $676,000  in  1998  and  1997,  respectively.


<PAGE>
                                       55


       Deferred  tax  assets  and liabilities consist of the following:

<TABLE>
<CAPTION>

                                                                             December 31,
                                                                        ----------------------
                                                                          1999          1998
                                                                            (In Thousands)
        <S>                                                             <C>           <C>
        Deferred tax assets

              Public liability and property damage                      $ 22,086      $ 30,152
              Allowance for doubtful accounts and notes receivable         5,426         5,617
              Other accrued liabilities                                   17,073        12,940
              Federal and state NOL credits and carryforwards              4,059         5,328
              Canadian NOL carryforwards                                   1,607         5,255
              Canadian depreciation                                        2,145           246
              Other Canadian temporary differences                         4,018         1,587
              Other                                                            -         4,041
                                                                        --------      --------

                                                                          56,414        65,166
              Valuation allowance                                         (7,770)       (7,088)
                                                                        --------      --------

                 Total                                                  $ 48,644      $ 58,078
                                                                        ========      ========



        Deferred tax liabilities

              Depreciation                                              $ 53,717      $ 49,524
              Other                                                          587             -
                                                                        --------      --------

                 Total                                                  $ 54,304      $ 49,524
                                                                        ========      ========
</TABLE>


                The Company has net operating  loss  carryforwards  available in
       certain  states to offset  future state taxable  income.  At December 31,
       1999,  TCL  has  net  operating  loss   carryforwards   of  approximately
       $3,625,000  available to offset future  taxable  income in Canada,  which
       expire through 2002.  Valuation  allowances have been established for the
       total  estimated  future tax effect of the Canadian net operating  losses
       and other deferred tax assets.

                The tax provision in 1997 includes a $4,314,000  one-time charge
       related to the separation of the Company from DaimlerChrysler.

                In connection with the Company's separation from DaimlerChrysler
       in  December  1997,  the Company  realized  certain  pre-acquisition  net
       operating  loss   carryforwards   for  which  valuation   allowances  had
       previously been established.  The realization of these net operating loss
       carryforwards  resulted  in a  reduction  of cost in excess of net assets
       acquired and income tax valuation allowances of $22,400,000.


<PAGE>
                                       56


                The  Company's  effective tax rate differs from the maximum U.S.
       statutory income tax rate. The following  summary reconciles taxes at the
       maximum U.S. statutory rate with recorded taxes:

<TABLE>
<CAPTION>

                                                                            Year Ended December 31,
                                              ------------------------------------------------------------------------
                                                       1999                     1998                      1997
                                              ----------------------   -----------------------   ---------------------
                                                Amount      Percent       Amount     Percent       Amount     Percent
                                                                       (Amounts in Thousands)
        <S>                                    <C>           <C>         <C>           <C>         <C>           <C>
        Tax expense
          computed at the maximum
          U.S. statutory rate                  $ 37,296      35.0 %      $ 24,113      35.0 %      $ 14,514      35.0 %
        Difference resulting from:
          Amortization of cost in excess
            of net assets acquired                1,871       1.8           1,774       2.6           2,103       5.1
          State and local taxes, net of
            Federal income tax benefit            5,732       5.4           3,860       5.6             979       2.3
          Valuation allowance for
            foreign losses                          682       0.6             604       0.9             828       2.0
          Foreign taxes                             480       0.4             350       0.5             413       1.0
          DaimlerChrysler separation
            adjustments                               -         -               -         -           4,314      10.4
          Other                                     913       0.9             528       0.7             276       0.7
                                               --------     -----        --------     -----        --------     -----

                                               $ 46,974      44.1 %      $ 31,229      45.3 %      $ 23,427      56.5 %
                                               ========     =====        ========     =====        ========     =====

</TABLE>


13.    CONCENTRATION OF CREDIT RISK AND FAIR VALUE INFORMATION

                Financial instruments  which potentially  subject the Company to
       concentrations of credit risk consist  principally of restricted cash and
       investments  and trade  receivables.  The Company  limits its exposure on
       restricted  cash and  investments  by  investing  in highly  rated funds.
       Concentrations  of credit  risk with  respect  to trade  receivables  are
       limited due to the large number of  customers  comprising  the  Company's
       customer  base,  and their  dispersion  across  different  businesses and
       geographic areas.

                The following  estimated  fair values of  financial  instruments
       have been  determined by the Company using available  market  information
       and valuation methodologies.

                Cash and Cash  Equivalents,  Restricted  Cash  and  Investments,
       Receivables,  Accounts Payable,  Accrued Liabilities and Public Liability
       and  Property  Damage  -  The  carrying  amounts  of  these  items  are a
       reasonable estimate of their fair value.

                Debt and  Other  Obligations - The fair  value of  floating-rate
       debt  approximates the carrying value as these instruments are at current
       market  interest rates. At December 31, 1999, the fair value of the asset
       backed  notes  was  less  than  the  carrying   value  by   approximately
       $35,636,000.

                Letter of  Credit and  Guaranteed  Obligations  - The  estimated
       fair value of these  items was  $196,000  at both  December  31, 1999 and
       1998.


<PAGE>
                                       57


14.    COMMITMENTS AND CONTINGENCIES

       Concessions and Operating Leases

                The Company has certain concession  agreements with airports and
       hotels  throughout  the  United  States  and  Canada.  Typically,   these
       agreements  provide airport terminal counter or hotel space in return for
       a minimum  rent.  In many  cases,  the  Company's  subsidiaries  are also
       obligated to pay insurance and  maintenance  costs and  additional  rents
       generally  based on  revenues  earned  at the  location.  Certain  of the
       airport  locations are operated by franchisees  who are obligated to make
       the required rent and  concession  fee payments  under the terms of their
       franchise arrangements with the Company's subsidiaries.

                The Company's  subsidiaries operate from various leased premises
       under  operating  leases  with  terms up to 25 years.  Some of the leases
       contain renewal options.

                Expenses incurred under operating leases and concessions were as
       follows:

                                                 Year Ended December 31,
                                         ---------------------------------------
                                             1999         1998          1997
                                                     (In Thousands)

        Rent                               $20,833      $17,530       $17,507
        Concession expenses:
           Minimum fees                     29,627       20,832        22,447
           Contingent fees                  25,628       27,784        23,754
                                           -------      -------       -------

                                            76,088       66,146        63,708

        Less sublease rental income         (2,408)      (2,836)       (2,333)
                                           -------      -------       -------

                   Total                   $73,680      $63,310       $61,375
                                           =======      =======       =======


                Future minimum  rentals and fees under  noncancelable  operating
       leases, and the Company's  obligation for minimum airport concession fees
       at December 31, 1999 are  presented in the  following  table.  Concession
       fees-franchisee   locations   presented   are  required  to  be  paid  by
       franchisees under terms of sublease agreements.

<TABLE>
<CAPTION>
                                               Concession Fees
                                        ---------------------------
                                           Company-
                                             Owned       Franchisee    Operating
                                            Stores       Locations       Leases       Total
                                                             (In Thousands)
        <S>                               <C>            <C>          <C>          <C>
        2000                              $  25,434      $  2,216     $  18,206    $  45,856
        2001                                 21,930         2,375        14,617       38,922
        2002                                 19,701         1,954        12,243       33,898
        2003                                 13,029         1,825         9,969       24,823
        2004                                  9,755         1,827         7,296       18,878
        Thereafter                           50,363        28,025        44,844      123,232
                                          ---------      --------     ---------    ---------
                                            140,212        38,222       107,175      285,609
        Less sublease rental income               -             -        (5,683)      (5,683)
                                          ---------      --------     ---------    ---------

                                          $ 140,212      $ 38,222     $ 101,492    $ 279,926
                                          =========      ========     =========    =========

</TABLE>


<PAGE>
                                       58


       Public Liability and Property Damage

                During 1999,  Dollar and Thrifty  obtained first dollar coverage
       for their auto liability programs from insurance carriers.  Prior to that
       time, the Company was  self-insured or had policy  deductibles to certain
       limits  with  respect to  liabilities  for claims  arising as a result of
       personal injury and property damage. The accrual for public liability and
       property  damage  includes  amounts for  incurred  and  incurred  but not
       reported losses.  Such  liabilities are necessarily  based on actuarially
       determined estimates and management believes that the amounts accrued are
       adequate.  At  December  31,  1999 and  1998,  these  amounts  have  been
       discounted  at 6.3% and 4.6%,  respectively,  (assumed  risk free  rate),
       based upon the actuarially  determined estimated timing of payments to be
       made in future  years.  Discounting  resulted in reducing the accrual for
       public  liability  and property  damage by $6,434,000  and  $6,862,000 at
       December 31, 1999 and 1998,  respectively.  Estimated  payments of public
       liability and property  damage as of December 31, 1999 are as follows (in
       thousands):

        2000                                                            $31,404
        2001                                                             12,249
        2002                                                              7,983
        2003                                                              4,761
        2004                                                              3,245
        Thereafter                                                        5,575
                                                                       --------
        Aggregate undiscounted public liability and property damage      65,217
        Effect of discounting                                            (6,434)
                                                                       --------

                                                                        $58,783
                                                                       ========


       Contingencies

                Various  claims and  legal  proceedings  have  been  asserted or
       instituted  against the Company,  including  some  purporting to be class
       actions,  and some which  demand large  monetary  damages or other relief
       which could result in significant expenditures.  Litigation is subject to
       many  uncertainties,  and  the  outcome  of  individual  matters  is  not
       predictable  with  assurance.  The Company is also  subject to  potential
       liability  related to  environmental  matters.  The  Company  establishes
       reserves  for  litigation  and  environmental  matters  when  the loss is
       probable and  reasonably  estimable.  It is reasonably  possible that the
       final resolution of some of these matters may require the Company to make
       expenditures,  in excess of established reserves, over an extended period
       of time and in a range of amounts  that cannot be  reasonably  estimated.
       The term "reasonably  possible" is used herein to mean that the chance of
       a future transaction or event occurring is more than remote but less than
       likely.  Although the final  resolution  of any such matters could have a
       material effect on the Company's  consolidated  operating results for the
       particular  reporting  period  in which an  adjustment  of the  estimated
       liability is recorded,  the Company believes that any resulting liability
       should not materially affect its consolidated financial position.

       Other

                The  Company is party to a data  processing  services  agreement
       which requires monthly payments totaling  $4,308,000  (2000),  $4,420,000
       (2001), $4,535,000 (2002) and $564,000 (2003). Additionally,  the Company
       has a  telecommunications  contract  which  requires  annual  payments of
       $5,100,000 through 2004.


<PAGE>
                                       59


                In  addition to  the  letters of credit  described  in Note 8 to
       the consolidated  financial statements,  the Company had letter of credit
       and guarantee obligations totaling $1,964,000 and $1,958,000, at December
       31, 1999 and 1998, respectively.

                At December  31,  1999,  the  Company  had  outstanding  vehicle
       purchase commitments of approximately $729,634,000.

15.    BUSINESS SEGMENTS

                The Company has two  reportable  segments:  Dollar and  Thrifty.
       These  reportable  segments  are  strategic  business  units  that  offer
       different products and services. They are managed separately based on the
       fundamental   differences   in   their   operations.    Dollar   operates
       company-owned  stores  located at major airports and derives the majority
       of its revenues by  providing  rental  vehicles and services  directly to
       rental customers.  Thrifty operates primarily through franchisees serving
       both the airport and local  markets,  and it derives the  majority of its
       revenues from franchising fees and services including vehicle leasing.

                The  accounting  policies of the  segments are the same as those
       described in the summary of significant  accounting policies. The Company
       evaluates  segment  performance  based on profit and loss from operations
       before income taxes.

                Included  in  the  consolidated  financial  statements  are  the
       following amounts relating to geographic locations:

                                                 Years Ended December 31,
                                         ---------------------------------------
                                            1999          1998          1997
                                                     (In Thousands)
        Revenues:
           United States                  $953,509      $857,330      $801,088
           Other foreign countries          45,243        41,636        42,700
                                          --------      --------      --------

                                          $998,752      $898,966      $843,788
                                          ========      ========      ========

        Long-lived assets:
           United States                  $244,673      $243,854      $237,237
           Other foreign countries           2,895         1,457         1,173
                                          --------      --------      --------

                                          $247,568      $245,311      $238,410
                                          ========      ========      ========


                Revenues  are  attributed to  geographic  regions based  on  the
       location of the transaction.   Long-lived  assets  include  property  and
       equipment and intangible assets.

       Information by industry segment is set forth below:

<TABLE>
<CAPTION>

         Year Ended
         December 31, 1999                        Dollar           Thrifty          Other         Consolidated
         ------------------------------------------------------------------------------------------------------
                                                                    (In Thousands)
         <S>                                     <C>               <C>              <C>              <C>
         Revenues from external customers        $  735,011        $262,978         $    763         $  998,752
         Interest expense, net (a)                   59,166          35,325              623             95,114
         Depreciation and amortization, net         206,048         114,844            1,489            322,381
         Income before income taxes                  79,020          27,540                -            106,560

         Segment assets                          $1,270,620        $667,161         $233,872         $2,171,653
         Expenditures for segment assets         $1,541,803        $886,500         $    702         $2,429,005

</TABLE>


<PAGE>
                                       60


<TABLE>
<CAPTION>

         Year Ended
         December 31, 1998                        Dollar           Thrifty          Other         Consolidated
         ------------------------------------------------------------------------------------------------------
                                                                    (In Thousands)
         <S>                                     <C>               <C>              <C>              <C>
         Revenues from external customers        $  660,122        $237,919         $    925         $  898,966
         Interest expense, net (a)                   54,767          33,195              764             88,726
         Depreciation and amortization, net         193,366         111,171            1,521            306,058
         Income before income taxes                  50,055          18,839                -             68,894

         Segment assets                          $1,137,405        $628,409         $ 99,486         $1,865,300
         Expenditures for segment assets         $1,294,845        $812,236         $  2,285         $2,109,366


         Year Ended
         December 31, 1997                        Dollar           Thrifty          Other         Consolidated
         ------------------------------------------------------------------------------------------------------
                                                                    (In Thousands)

         Revenues from external customers        $  616,282        $226,343         $  1,163         $  843,788
         Interest expense, net (a)                   56,902          29,619            1,331             87,852
         Depreciation and amortization, net         182,004         110,948            1,359            294,311
         Income before income taxes                  34,721           5,246            1,501             41,468

         Segment assets                          $1,107,583        $600,864         $233,763         $1,942,210
         Expenditures for segment assets         $1,090,546        $767,995         $    648         $1,859,189

</TABLE>

         (a)  Management  primarily  uses net interest,  not the gross interest
              revenue and expense amounts, in assessing segment performance.

16.   SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

      A summary of the quarterly operating results during 1999 and 1998 follows:

<TABLE>
<CAPTION>
                                                                     Income                             Basic         Diluted
                                                Operating            Before                            Earnings       Earnings
                               Revenues           Income          Income Taxes      Net Income        Per Share      Per Share
                                                         (In Thousands Except Per Share Amounts)
        <S>                    <C>              <C>                <C>                <C>              <C>            <C>
        1999
          First quarter        $ 211,551        $  32,000          $  10,609          $  5,397         $ 0.22         $ 0.22
          Second quarter         259,350           56,568             30,494            16,988           0.70           0.69
          Third quarter          299,356           80,967             52,036            30,210           1.25           1.23
          Fourth quarter         228,495           37,981             13,421             6,991           0.29           0.28
                               ---------        ---------          ---------          --------         ------         ------

              Total year       $ 998,752        $ 207,516          $ 106,560          $ 59,586         $ 2.47         $ 2.43
                               =========        =========          =========          ========         ======         ======

        1998
          First quarter        $ 191,332        $  22,913          $   2,917          $    822         $ 0.03         $ 0.03
          Second quarter         227,177           41,132             17,114             9,213           0.38           0.38
          Third quarter          274,701           69,305             42,020            24,151           1.00           1.00
          Fourth quarter         205,756           29,687              6,843             3,479           0.14           0.14
                               ---------        ---------          ---------          --------         ------         ------

              Total year       $ 898,966        $ 163,037          $  68,894          $ 37,665         $ 1.56         $ 1.56
                               =========        =========          =========          ========         ======         ======

</TABLE>

                Operating  income in the table above  represents  pre-tax income
       before  interest and  amortization  of  costs  in  excess  of net  assets
       acquired.


<PAGE>
                                       61


17.    SUBSEQUENT EVENTS

                On March 2, 2000, the Commercial Paper Program was renewed for a
       364-day  period at a maximum size of $780 million  backed by a renewal of
       the Liquidity Facility totaling $700 million.

                                     ******


<PAGE>
                                       62


<TABLE>
<CAPTION>

SCHEDULE II

DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
- --------------------------------------------------------------------------------------------------------------

                                             Balance at    Additions                  Balance at
                                             Beginning    Charged to                   End of
                                              of Year       Income      Deductions      Year
                                                               (In Thousands)
<S>                                           <C>          <C>          <C>           <C>
1999

Allowance for doubtful accounts               $ 14,910     $  9,682     $  (6,824)    $ 17,768
                                              ========     ========     =========     ========

Public liability and property damage          $ 77,619     $  4,710     $ (23,546)    $ 58,783
                                              ========     ========     =========     ========

1998

Allowance for doubtful accounts               $ 12,745     $  6,891     $  (4,726)    $ 14,910
                                              ========     ========     =========     ========

Public liability and property damage          $ 75,687     $ 44,528     $ (42,596)    $ 77,619
                                              ========     ========     =========     ========

1997

Allowance for doubtful accounts               $ 16,622      $ 2,942     $  (6,819)    $ 12,745
                                              ========     ========     =========     ========

Public liability and property damage          $ 63,235     $ 51,708     $ (39,256)    $ 75,687
                                              ========     ========     =========     ========

</TABLE>






<PAGE>
                                       63


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

         There  were no  changes  in  accountants  or  disagreements  on matters
related to  accounting  or  financial  disclosure  during the fiscal years ended
December 31, 1999 and 1998.

                                    PART III
                                    --------

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         Reference  is made to the  information  appearing  under  the  captions
"Biographical  Information  Regarding  Director  Nominees  and  Named  Executive
Officers" and "Section 16(a) Beneficial  Ownership Reporting  Compliance" in the
Company's  definitive Proxy Statement which will be filed pursuant to Regulation
14A  promulgated  by the  SEC not  later  than  120  days  after  the end of the
Company's  fiscal year ended  December 31, 1999, and is  incorporated  herein by
reference.

ITEM 11. EXECUTIVE COMPENSATION

         Reference  is made to the  information  appearing  under  the  captions
"Meetings,   Committees   and   Compensation   of  the  Board  of   Directors  -
Compensation," "Meetings,  Committees and Compensation of the Board of Directors
- -  Certain  Understandings,"  and  "Executive  Compensation"  in  the  Company's
definitive  Proxy  Statement  which will be filed  pursuant  to  Regulation  14A
promulgated  by the SEC not later than 120 days  after the end of the  Company's
fiscal year ended December 31, 1999, and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         Reference  is made  to the  information  appearing  under  the  caption
"Security Ownership of Certain Beneficial Owners,  Directors,  Director Nominees
and Executive  Officers" in the Company's  definitive Proxy Statement which will
be filed  pursuant to Regulation  14A  promulgated by the SEC not later than 120
days after the end of the Company's  fiscal year ended December 31, 1999, and is
incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Reference  is  made  to  the   information   appearing  under  "Certain
Relationships  and  Related  Transactions"  in the  Company's  definitive  Proxy
Statement  which will be filed pursuant to Regulation 14A promulgated by the SEC
not  later  than 120 days  after  the end of the  Company's  fiscal  year  ended
December 31, 1999, and is incorporated herein by reference.


<PAGE>
                                       64


                                     PART IV
                                     -------

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)      Documents filed as a part of this report

         (1)  All Financial Statements.  The response to this portion of Item 14
              is  submitted  as a separate  section  herein  under Part II, Item
              8 - Financial Statements and Supplementary Data.

         (2)  Financial  Statement  Schedules.   Schedule  II  -  Valuation  and
              Qualifying Accounts - Years Ended December 31, 1999, 1998 and 1997
              is set forth  under Part II - Item 8 -  Financial  Statements  and
              Supplementary  Data. All other  schedules are omitted because they
              are not  applicable or the  information  is shown in the financial
              statements or notes thereto.

         (3)  Index of Exhibits


  Exhibit No.                              Description
  -----------                              -----------

      1.1         Form of  U.S.  Underwriting   Agreement,  filed  as  the  same
                  numbered  exhibit  with the Company's  Registration  Statement
                  on Form S-1, as  amended,  Registration  No. 333-39661,  which
                  became effective December 16, 1997***

      1.2         Form of Subscription  Agreement,  filed as the  same  numbered
                  exhibit with  the  Company's  Registration  Statement  on Form
                  S-1, as amended,  Registration  No.  333-39661,  which  became
                  effective December 16, 1997***

      3.1         Certificate of  Incorporation  of  the  Company,  filed as the
                  same   numbered  exhibit  with  the   Company's   Registration
                  Statement  on   Form  S-1,  as   amended,   Registration   No.
                  333-39661, which became effective December 16, 1997*

      3.2         By-Laws of the Company,  as amended,  which  became  effective
                  July  22,1999,  filed as the same  numbered  exhibit  with the
                  Company's  Form 10-Q for the  quarterly  period ended June 30,
                  1999, filed August 12, 1999*

      4.1         Form of  Certificate  of  Common   Stock,  filed  as  the same
                  numbered exhibit  with  the Company's  Registration  Statement
                  on Form S-1, as  amended,  Registration  No. 333-39661,  which
                  became effective December 16, 1997*

      4.2         Base Indenture  dated as of December 13, 1995 between  Thrifty
                  Car Rental  Finance  Corporation  and Bankers  Trust  Company,
                  filed  as  the  same  numbered   exhibit  with  the  Company's
                  Registration  Statement on Form S-1, as amended,  Registration
                  No. 333-39661, which became effective December 16, 1997*

      4.3         Series  1995-1  Supplement  to  Base  Indenture  dated  as  of
                  December   13,  1995  between   Thrifty  Car  Rental   Finance
                  Corporation  and  Bankers  Trust  Company,  filed  as the same
                  numbered exhibit with the Company's  Registration Statement on
                  Form S-1, as amended, Registration No. 333-39661, which became
                  effective December 16, 1997*


<PAGE>
                                       65


      4.4         Master Motor Vehicle Lease and Servicing Agreement dated as of
                  December   13,  1995  between   Thrifty  Car  Rental   Finance
                  Corporation  and Thrifty,  filed as the same numbered  exhibit
                  with the  Company's  Registration  Statement  on Form S-1,  as
                  amended,  Registration No.  333-39661,  which became effective
                  December 16, 1997*

      4.5         Master  Collateral  Agency  Agreement dated as of December 13,
                  1995  between  Thrifty  Car  Rental  Finance  Corporation  and
                  Bankers Trust Company, filed as the same numbered exhibit with
                  the Company's  Registration Statement on Form S-1, as amended,
                  Registration No.  333-39661,  which became effective  December
                  16, 1997*

      4.6         Form of Revolving Credit Agreement among the Company,  Dollar,
                  Thrifty and the Institutions named therein,  filed as the same
                  numbered exhibit with the Company's  Registration Statement on
                  Form S-1, as amended, Registration No. 333-39661, which became
                  effective December 16, 1997*

      4.7         Form of Series 1997-1  Supplement  to  Base Indenture  between
                  Rental Car Finance Corp. and Bankers  Trust Company, filed  as
                  the same  numbered  exhibit  with the  Company's  Registration
                  Statement  on   Form  S-1,  as   amended,   Registration   No.
                  333-39661, which became effective December 16, 1997*

      4.8         Form of Master  Motor Vehicle  Lease and  Servicing  Agreement
                  among the  Company,  Dollar,  Thrifty  and  Rental Car Finance
                  Corp., filed as the same numbered exhibit  with  the Company's
                  Registration  Statement on Form S-1, as  amended, Registration
                  No. 333-39661, which became effective December 16, 1997*

      4.9         Commitment Letter dated November 19, 1997, among Credit Suisse
                  First Boston, The Chase Manhattan Bank, Chase Securities Inc.,
                  Dollar,  Thrifty  and the  Company  regarding  a  $230,000,000
                  Revolving Credit Facility and a $545,000,000  Commercial Paper
                  Liquidity  Facility and related Term Sheet,  filed as the same
                  numbered exhibit with the Company's  Registration Statement on
                  Form S-1, as amended, Registration No. 333-39661, which became
                  effective December 16, 1997*

      4.10        Amended and Restated Master  Collateral Agency Agreement dated
                  as of December 23, 1997 among the Company,  Rental Car Finance
                  Corp., Thrifty, Dollar and Bankers Trust Company, filed as the
                  same numbered exhibit with the Company's Form 8-K, filed March
                  16, 1998*

      4.11        Chrysler Support Letter of Credit and Reimbursement  Agreement
                  dated as of  December  23, 1997 among DaimlerChrysler, Dollar,
                  Thrifty, the Company, TRAC Team, Inc. and DTAG Services, Inc.,
                  filed as the same numbered  exhibit  with  the  Company's Form
                  8-K, filed March 16, 1998*

      4.12        Series 1998-1  Supplement to Base Indenture  dated as of March
                  4, 1998 between  Rental Car Finance  Corp.  and Bankers  Trust
                  Company, filed as the same numbered exhibit with the Company's
                  Form 8-K, filed March 16, 1998*


<PAGE>
                                       66


      4.13        Master Motor Vehicle  Lease and  Servicing  Agreement dated as
                  of  March 4, 1998  among   he  Company,  Dollar,  Thrifty  and
                  Rental Car Finance Corp., filed as  the  same numbered exhibit
                  with the Company's Form 8-K, filed March 16, 1998*

      4.14        Note  Purchase  Agreement  dated as  of  March 4,  1998  among
                  Rental Car  Finance Corp.,  Dollar  Thrifty  Funding Corp. and
                  Credit  Suisse  First  Boston,  filed  as  the  same  numbered
                  exhibit with the Company's Form 8-K, filed March 16, 1998*

      4.15        Liquidity  Agreement  dated as of March 4, 1998  among  Dollar
                  Thrifty  Funding Corp.,  Certain  Financial  Institutions  and
                  Credit Suisse First Boston, filed as the same numbered exhibit
                  with the Company's Form 8-K, filed March 16, 1998*

      4.16        Depositary  Agreement dated as of March 4, 1998 between Dollar
                  Thrifty Funding Corp. and Bankers Trust Company,  filed as the
                  same numbered exhibit with the Company's Form 8-K, filed March
                  16, 1998*

      4.17        Collateral  Agreement  dated as of March 4, 1998 among  Dollar
                  Thrifty Funding Corp.,  Credit Suisse First Boston Corporation
                  and Bankers Trust Company,  filed as the same numbered exhibit
                  with the Company's Form 8-K, filed March 16, 1998*

      4.18        Dealer  Agreement  dated as  of March 4,  1998  among   Dollar
                  Thrifty  Funding  Corp.,   the Company,  Credit  Suisse  First
                  Boston  Corporation and  Chase  Securities Inc., filed  as the
                  same  numbered  exhibit with  the  Company's  Form 8-K,  filed
                  March 16, 1998*

      4.19        Rights   Agreement   (including  a  Form  of   Certificate  of
                  Designation of Series A Junior  Participating  Preferred Stock
                  as Exhibit A thereto, a Form of Right Certificate as Exhibit B
                  thereto and a Summary of Rights to Purchase Preferred Stock as
                  Exhibit  C  thereto)  dated as of July 23,  1998  between  the
                  Company and Harris Trust and Savings  Bank,  as Rights  Agent,
                  filed as the same  numbered  exhibit with the  Company's  Form
                  8-K, filed July 24, 1998*

      4.20        Supplement  No.  2  to   Series  1998-1   Supplement  to  Base
                  Indenture  dated  March  4, 1999,  among  Rental  Car  Finance
                  Corp., Dollar,  Thrifty, the Company,  Bankers  Trust  Company
                  and Credit Suisse First  Boston,  filed as  the same  numbered
                  exhibit with the Company's Form 8-K, filed May 18, 1999*

      4.21        Extension of Scheduled Liquidity  Commitment  Termination Date
                  dated  March 4, 1999,  among  Dollar  Thrifty  Funding  Corp.,
                  various  Liquidity  Lenders and Credit  Suisse  First  Boston,
                  filed as the same  numbered  exhibit with the  Company's  Form
                  8-K, filed May 18, 1999*

      4.22        Series 1999-1  Supplement to Base  Indenture dated as of April
                  29, 1999 between  Rental Car  Finance Corp.  and Bankers Trust
                  Company,   filed  as   the  same  numbered  exhibit  with  the
                  Company's Form 8-K, filed May 18, 1999*


<PAGE>
                                       67


      4.23        Note  Purchase  Agreement  dated  as of April 29,  1999 among
                  Rental Car  Finance  Corp.,  the Company,  Credit Suisse First
                  Boston  Corporation  and Chase  Securities Inc., filed  as the
                  same numbered  exhibit with the Company's Form 8-K, filed  May
                  18, 1999*

      4.24        Enhancement  Letter of  Credit Application and Agreement dated
                  April 29, 1999, among  Dollar,  Thrifty,  the Company,  Rental
                  Car Finance Corp.  and  Credit  Suisse First Boston,  filed as
                  the same numbered  exhibit with  the Company's Form 8-K, filed
                  May 18, 1999*

      5           Opinion of  Debevoise &  Plimpton  regarding  legality of  the
                  Common Stock,  filed  as  the same  numbered  exhibit with the
                  Company's  Registration  Statement  on  Form S-1, as  amended,
                  Registration  No. 333-39661,  which  became effective December
                  16, 1997***

      5.1         Opinion  of Hall,  Estill,  Hardwick,  Gable, Golden & Nelson,
                  P.C.  regarding  the  legality  of  the  Common  Stock   being
                  registered,  filed as  the  same  numbered  exhibit  with  the
                  Company's Form S-8,  Registration  No.  333-79603,  filed  May
                  28, 1999***

      10.1        Vehicle Supply Agreement between  DaimlerChrysler  and Dollar,
                  filed  as  the  same  numbered   exhibit  with  the  Company's
                  Registration  Statement on Form S-1, as amended,  Registration
                  No. 333-39661, which became effective December 16, 1997*

      10.2        Amended  and  Restated   Vehicle  Supply   Agreement   between
                  DaimlerChrysler  and  Thrifty,  filed  as  the  same  numbered
                  exhibit with the Company's Registration Statement on Form S-1,
                  as amended, Registration No. 333-39661, which became effective
                  December 16, 1997*

      10.3        Employment  Continuation  Agreement  between  the  Company and
                  Joseph E. Cappy dated  September  29, 1998,  filed as the same
                  numbered   exhibit  with  the  Company's  Form  10-Q  for  the
                  quarterly  period ended September 30, 1998, filed November 16,
                  1998*

      10.4        Employment  Continuation  Plan  for Key  Employees  of  Dollar
                  Thrifty   Automotive  Group,   Inc.,  which  became  effective
                  September 29, 1998,  filed as the same  numbered  exhibit with
                  the  Company's  Form  10-Q  for  the  quarterly  period  ended
                  September 30, 1998, filed November 16, 1998*

      10.5        Dollar Thrifty  Automotive  Group, Inc. Retirement Plan, dated
                  as of December 5, 1998,  by and  among  the Company,  Thrifty,
                  Dollar  and   Bank  of  Oklahoma,  N.A.,  filed  as  the  same
                  numbered exhibit with the Company's  Form 10-K for  the fiscal
                  year ended December 31, 1998, filed March 19, 1999*

      10.6        Dollar Thrifty Automotive Group, Inc. Retirement Savings Plan,
                  as adopted by the Company  pursuant to the Adoption  Agreement
                  (Exhibit  10.7),  filed as the same numbered  exhibit with the
                  Company's Form S-8, Registration  No. 333-89189, filed October
                  15, 1999*

      10.7        Adoption Agreement #005  Nonstandardized  Code  Section 401(k)
                  Profit Sharing Plan  of Dollar  Thrifty  Automotive  Group, as
                  amended,  filed   as  the  same   numbered  exhibit  with  the
                  Company's  Form   S-8,  Registration   No.  333-89189,   filed
                  October 15, 1999*


<PAGE>
                                       68


      10.8        Pentastar  Transportation  Group, Inc.  Deferred  Compensation
                  Plan,  filed as the same numbered exhibit with  the  Company's
                  Registration Statement  on Form S-1, as  amended, Registration
                  No. 333-39661, which became effective December 16, 1997*

      10.9        Pentastar  Transportation  Group,  Inc.  Executive  Retention
                  Plan,  filed as  the  same numbered exhibit with the Company's
                  Registration Statement  on Form S-1, as  amended, Registration
                  No. 333-39661, which became effective December 16, 1997*

      10.10       Dollar Thrifty   Automotive  Group, Inc.  Long-Term  Incentive
                  Plan,  filed as the same numbered  exhibit  with the Company's
                  Registration Statement  on Form S-1, as  amended, Registration
                  No. 333-39661, which became effective December 16, 1997*

      10.11       Tax    Sharing   and    Disaffiliation    Agreement    between
                  DaimlerChrysler  and Dollar  Thrifty  Automotive  Group, Inc.,
                  filed  as  the  same  numbered   exhibit  with  the  Company's
                  Registration Statement on  Form S-1, as  amended, Registration
                  No. 333-39661, which became effective December 16, 1997*

      10.12       Form of  Indemnification  Agreement  between  the  Company and
                  DaimlerChrysler,  filed as the same numbered  exhibit with the
                  Company's  Registration  Statement  on Form S-1,  as  amended,
                  Registration No.  333-39661,  which became effective  December
                  16, 1997*

      10.13       Amendment to Long-Term  Incentive  Plan  dated as of September
                  29,  1998,  filed  as the  same   numbered  exhibit  with  the
                  Company's Form S-8, Registration No. 333-79603, filed  May 28,
                  1999*

      15.1        Letter  from  Deloitte  &  Touche   LLP   regarding    interim
                  financial  information,  filed as  the  same numbered  exhibit
                  with the Company's  Form S-8,   Registration   No.  333-79603,
                  filed May 28, 1999***

      15.2        Letter  from  Deloitte  &  Touche   LLP    regarding   interim
                  financial  information,  filed  as  the same numbered  exhibit
                  with  the  Company's  Form S-8,  Registration  No.  333-89189,
                  filed October 15, 1999***

      21          Subsidiaries of the Company**

      23.2        Consent of Debevoise & Plimpton (included in Exhibit 5), filed
                  as the same numbered  exhibit with the Company's  Registration
                  Statement on Form S-1, as amended, Registration No. 333-39661,
                  which became effective December 16, 1997*

      23.3        Consent of Donovan  Leisure  Newton & Irvine LLP, filed as the
                  same  numbered   exhibit  with  the   Company's   Registration
                  Statement on Form S-1, as amended, Registration No. 333-39661,
                  which became effective December 16, 1997*


<PAGE>
                                       69


      23.4        Consent of Deloitte & Touche LLP, filed as  the  same numbered
                  exhibit  with  the  Company's  Form  S-8,   Registration   No.
                  333-79603, filed May 28, 1999***

      23.5        Consent of Hall, Estill,  Hardwick,  Gable,  Golden  & Nelson,
                  P.C.  (included in Exhibit 5.1),  filed as the  same  numbered
                  exhibit  with   the  Company's  Form  S-8,  Registration   No.
                  333-79603, filed May 28, 1999***

      23.6        Consent of  Deloitte & Touche LLP, filed  as the same numbered
                  exhibit  with   the  Company's  Form  S-8,  Registration   No.
                  333-89189, filed October 15, 1999***

      23.7        Consent  of  Deloitte  &  Touche   LLP,  regarding  Forms S-8,
                  Registration No. 333-79603 and Registration No. 333-89189**

      27.1        Financial Data Schedule (EDGAR version only)**

- ----------

*        Incorporated by reference
**       Filed herewith
***      Not incorporated by reference in this report



(b) No report on Form 8-K was filed by the Company  during or  applicable to the
    quarter ended December 31, 1999.

(c) Filed Exhibits
    --------------
    The response to this item is submitted as a separate section of this report.


<PAGE>
                                       70


                                   SIGNATURES
                                   ----------

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

Date:    March 22, 2000          DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.

                                 By:   /s/ JOSEPH E. CAPPY
                                      ----------------------
                                 Name: Joseph E. Cappy
                                 Title:President and Principal Executive Officer

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

<TABLE>
<CAPTION>

   Name                          Title                                          Date
   ----                          -----                                          ----
   <S>                           <C>                                            <C>
   /s/ JOSEPH E. CAPPY           Chairman of the Board                          March 22, 2000
   ------------------------      Chief Executive Officer
   Joseph E. Cappy               President and Director


   /s/ STEVEN B. HILDEBRAND      Vice President                                 March 22, 2000
   ------------------------      Principal Financial Officer
   Steven B. Hildebrand          Principal Accounting Officer


   /s/ DONALD M. HIMELFARB       Executive Vice President and Director          March 22, 2000
   ------------------------      President of Thrifty, Inc.
   Donald M. Himelfarb


   /s/ GARY L. PAXTON            Executive Vice President and Director          March 22, 2000
   ------------------------      President of Dollar Rent A Car Systems, Inc.
   Gary L. Paxton


   /s/ THOMAS P. CAPO            Director                                       March 22, 2000
   ------------------------
   Thomas P. Capo


   /s/ EDWARD J. HOGAN           Director                                       March 22, 2000
   ------------------------
   Edward J. Hogan


   /s/ EDWARD C. LUMLEY          Director                                       March 22, 2000
   ------------------------
   Edward C. Lumley


   /s/ JOHN C. POPE              Director                                       March 22, 2000
   ------------------------
   John C. Pope


   /s/ JOHN P. TIERNEY           Director                                       March 22, 2000
   ------------------------
   John P. Tierney


   /s/ EDWARD L. WAX             Director                                       March 22, 2000
   ------------------------
   Edward L. Wax


</TABLE>


<PAGE>
                                       71


                                INDEX TO EXHIBITS
                                -----------------

Exhibit Number                      Description
- --------------                      -----------

21            Subsidiaries of the Company

23.7          Consent of Deloitte & Touche LLP regarding Forms S-8,
              Registration No. 333-79603 and Registration No. 333-89189

27.1          Financial Data Schedule (EDGAR version only)



<PAGE>


                                                                      EXHIBIT 21
                                                                      ----------


                           SUBSIDIARIES OF THE COMPANY
                           ---------------------------

         The following are  significant  subsidiaries of the Company at December
31, 1999.

         Name                       Jurisdiction      Also "doing business as"
         ----                       ------------      ------------------------

Dollar Rent A Car Systems, Inc.     Oklahoma          Dollar Rent A Car

Thrifty Rent-A-Car System, Inc.     Oklahoma          Thrifty Car Rental

Thrifty, Inc.                       Oklahoma                  N/A

Rental Car Finance Corp.            Oklahoma                  N/A




<PAGE>

                                                                    EXHIBIT 23.7
                                                                    ------------

                          INDEPENDENT AUDITORS' CONSENT
                          -----------------------------

We consent to the  incorporation  by reference in  Registration  Statements  No.
333-79603 and No. 333-89189 of Dollar Thrifty  Automotive  Group,  Inc. on Forms
S-8 of our report  dated  February  2, 2000,  except for Note 17 as to which the
date is March 2, 2000,  appearing  in this Annual  Report on Form 10-K of Dollar
Thrifty Automotive Group, Inc. for the year ended December 31, 1999.



DELOITTE & TOUCHE LLP

Tulsa, Oklahoma
March 22, 2000



<TABLE> <S> <C>



<ARTICLE>                     5
<LEGEND>
This  schedule  contains  summary  financial  information  extracted  from  the
Consolidated  Balance  Sheet  as  of  December 31, 1999  and  the  Consolidated
Statement of Income and Cash Flows for the Years Ended December 31, 1999, 1998,
and 1997 and is qualified in its entirety by reference to such Form 10-K.
</LEGEND>
<CIK>                                       0001049108
<NAME>           DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
<MULTIPLIER>                                     1,000

<S>                             <C>
<PERIOD-TYPE>                   Year
<FISCAL-YEAR-END>                          DEC-31-1999
<PERIOD-START>                             JAN-01-1999
<PERIOD-END>                               DEC-31-1999
<CASH>                                         222,171
<SECURITIES>                                         0
<RECEIVABLES>                                  157,924
<ALLOWANCES>                                    17,768
<INVENTORY>                                  1,507,692<F1>
<CURRENT-ASSETS>                                     0<F2>
<PP&E>                                         124,436
<DEPRECIATION>                                  54,495
<TOTAL-ASSETS>                               2,171,653
<CURRENT-LIABILITIES>                                0<F2>
<BONDS>                                      1,555,609
                                0
                                          0
<COMMON>                                           242
<OTHER-SE>                                     378,885
<TOTAL-LIABILITY-AND-EQUITY>                 2,171,653
<SALES>                                              0
<TOTAL-REVENUES>                               998,752
<CGS>                                                0
<TOTAL-COSTS>                                  600,242
<OTHER-EXPENSES>                                 5,842
<LOSS-PROVISION>                                 9,682
<INTEREST-EXPENSE>                              95,114
<INCOME-PRETAX>                                106,560
<INCOME-TAX>                                    46,974
<INCOME-CONTINUING>                                  0
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    59,586
<EPS-BASIC>                                       2.47
<EPS-DILUTED>                                     2.43
<FN>
<F1> ITEM REFERS TO REVENUE-EARNING VEHICLES, NET.
<F2> REGISTRANT'S FINANCIAL STATEMENTS INCLUDE AN UNCLASSIFIED BALANCE SHEET.
</FN>



</TABLE>


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