UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 12 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 33-80271
ALAMO RENT-A-CAR, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 59-1465528
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification
no.)
110 Tower, 110 S.E. 6th Street
Fort Lauderdale, Florida 33301
(Address of principal executive (Zip code)
offices)
(954) 522-0000
(Registrant's telephone number, including area code)
See Table of Co-Registrants Below.
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
---- ----
As of August 1, 1996, each corporate registrant had outstanding 980 shares of
common stock, par value $1.00 per share, except for Green Corn, Inc. which had
326.67 shares of common stock, par value $0.10 per share.
Table of Co-Registrants(1)
State or Other
Jurisdication of IRS Employer
Incorporation or Identification
Name Organization Number
---- ------------ ------
Alamo Rent-A-Car (Belgium), Inc. Florida 65-0489368
Alamo Rent-A-Car (Canada), Inc. Florida 65-0568278
DKBERT Assoc. Florida 59-1946177
(General Partnership)
Green Corn, Inc. Florida 59-1694750
Guy Salmon USA, Inc. Florida 65-0200221
Guy Salmon USA, Ltd. Florida 65-0200220
(Limited Partnership)
Territory Blue, Inc. Florida 65-0579364
Tower Advertising Group, Inc. Florida 65-0163142
(1) Address, including zip code, and 110 Tower
telephone number, including area code, 110 S.E. 6th Street
of principal executive offices of Fort Lauderdale, Florida 33301
Co-Registrants (954) 522-0000
ALAMO RENT-A-CAR, INC.
Table of Contents
Form 10-Q for the Quarterly Period
Ended June 30, 1996
PART I FINANCIAL INFORMATION PAGE
- ------ --------------------- ----
Item 1. Financial Statements
Combined Condensed Financial Statements:
Balance Sheets - June 30, 1996 and December 31, 1995 1
Statements of Operations - Three and Six Months
Ended June 30, 1996 and 1995 2
Statements of Cash Flows - Six Months ended June
30, 1996 and 1995 3
Combining Condensed Financial Statements:
Balance Sheets - June 30, 1996 and December 31, 1995 4
Statements of Operations - Three Months ended June
30, 1996 and 1995 6
Statements of Operations - Six Months ended June
30, 1996 and 1995 8
Statements of Cash Flows - Six Months Ended June
30, 1996 and 1995 10
Notes to Combined and Combining Condensed Financial
Statements 12
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 24
PART II OTHER INFORMATION
Item 1. Legal Proceedings 27
Item 2. Changes in Securities 27
Item 3. Defaults upon Senior Securities 27
Item 4. Submission of Matters to a Vote of Security Holders 27
Item 5. Other Information 27
Item 6. Exhibits and Reports on Form 8-K 27
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Combined Condensed Balance Sheets
(In thousands)
June 30, December 31,
Assets 1996 1995
------ ----------- ----------
(Unaudited) (Audited)
Cash and cash equivalents $ 18,436 $ 11,953
Investments 90,575 62,626
Receivables:
Trade, less allowance for
doubtful accounts of $4,177
and $5,214 in 1996 and 1995,
respectively 89,071 67,418
Vehicle 52,520 94,408
Notes, mortgages and other due
from affiliates 4,705 2,409
Other 12,634 7,775
----------- ----------
158,930 172,010
----------- ----------
Revenue earning vehicles, net 2,260,248 1,478,409
Property and equipment, net 212,758 213,985
Other assets 69,038 61,762
----------- ----------
$ 2,809,985 $2,000,745
=========== ==========
Liabilities and Equity
----------------------
Notes payable and lines of credit
secured by revenue earning vehicles $ 2,228,279 $1,546,122
Estimated auto liability claims 122,282 112,448
Accounts payable to affiliates 4,448 1,677
Accounts payable 138,450 116,374
Other debt 236,649 137,266
Accrued expenses 23,071 11,050
Customer deposits 16,573 9,843
----------- ----------
Total liabilities 2,769,752 1,934,780
----------- ----------
Minority interest (deficiency in assets) (260) --
Equity:
Common stock 5 5
Additional paid-in capital 9,529 9,494
Retained earnings and partners' capital 28,704 53,881
Translation adjustment 2,255 2,585
----------- ----------
Total equity 40,493 65,965
----------- ----------
$ 2,809,985 $2,000,745
=========== ==========
The accompanying notes are an integral part of these financial statements.
-1-
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Combined Condensed Statements of Operations
(Unaudited)
(In thousands)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
--------- --------- --------- ---------
Revenue:
Vehicle rentals $ 377,345 $ 337,922 $ 701,130 $ 637,649
Interest 1,022 1,245 1,974 2,847
Revenue from affiliates 17 -- 694 --
Other 135 1,528 833 2,487
--------- --------- --------- ---------
378,519 340,695 704,631 642,983
--------- --------- --------- ---------
Costs and expenses:
Vehicle depreciation 106,540 95,688 195,858 181,904
Vehicle interest 28,925 31,190 55,564 61,227
Vehicle leases 5,230 19,156 9,654 31,070
Selling, general and administrative 232,543 206,378 446,729 407,862
Other interest 7,453 2,733 11,786 5,465
Minority interest in net loss of consolidated subsidiaries (194) (398) (653) (1,161)
--------- --------- --------- ---------
380,497 354,747 718,938 686,367
--------- --------- --------- ---------
Net loss $ (1,978) $ (14,052) $ (14,307) $ (43,384)
========= ========= ========= =========
The accompanying notes are an integral part of these financial statements.
-2-
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Combined Condensed Statements of Cash Flows
(Unaudited)
(In thousands)
Six Months Ended
June 30,
--------------------------
1996 1995
----------- -----------
Cash flows from operating activities $ 205,106 $ 149,385
----------- -----------
Cash flows from investing activities:
Cash received from sale of revenue earning vehicles 850,177 1,267,890
Cash paid to suppliers of revenue earning vehicles (1,784,350) (1,639,431)
(Purchase) sale of investments (27,949) 23,944
Capital expenditures (10,524) (18,979)
Proceeds from sale of property and equipment 1,398 753
----------- -----------
Net cash used in investing activities (971,248) (365,823)
----------- -----------
Cash flows from financing activities:
Proceeds from revenue earning vehicle financing 1,739,139 1,639,919
Principal payments on revenue earning vehicle financing (1,054,748) (1,447,191)
Proceeds from other debt 106,313 56,270
Principal payments on other debt (6,907) (29,675)
Dividends and distributions (10,870) (8,925)
Contributions -- 1,113
----------- -----------
Net cash provided by financing activities 772,927 211,511
----------- -----------
Effect of exchange rate changes on cash (302) 272
----------- -----------
Net increase (decrease) in cash and cash equivalents 6,483 (4,655)
Cash and cash equivalents at beginning of period 11,953 15,698
----------- -----------
Cash and cash equivalents at end of period $ 18,436 $ 11,043
=========== ===========
Supplemental disclosures:
Interest paid $ 63,263 $ 66,571
=========== ===========
Income tax payments $ -- $ 256
=========== ===========
The accompanying notes are an integral part of these financial statements.
-3-
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Combining Condensed Balance Sheets
(Unaudited)
(In thousands)
June 30, 1996
Alamo
GUSA Affiliated
Assets Alamo DKBERT Ltd. Companies Eliminations Combined
---------- --------- --------- ---------- ------------ -----------
Cash and cash equivalents $ 5,113 $ 1,156 $ 11,100 $ 1,067 $ -- $ 18,436
Investments 90,575 -- -- -- -- 90,575
Receivables:
Trade, less allowance for doubtful
accounts of $1,522, $-0-, $2,514
and $141 for Alamo, DKBERT,
GUSA, Ltd., and Alamo
Affiliated Companies,
respectively 63,137 -- 24,171 1,763 -- 89,071
Vehicle 34,079 -- 18,253 188 -- 52,520
Notes, mortgages and other due from
affiliates 75,515 780 5,457 7,527 (84,574) 4,705
Other 11,430 321 408 535 (60) 12,634
---------- --------- --------- -------- ----------- -----------
184,161 1,101 48,289 10,013 (84,634) 158,930
---------- --------- --------- -------- ----------- -----------
Revenue earning vehicles, net 2,056,780 -- 188,792 14,676 -- 2,260,248
Property and equipment, net 73,224 134,754 3,503 1,277 -- 212,758
Other assets 46,945 2,066 19,366 1,414 (753) 69,038
---------- --------- --------- -------- ----------- -----------
$2,456,798 $ 139,077 $ 271,050 $ 28,447 $ (85,387) $ 2,809,985
========== ========= ========= ======== =========== ===========
Liabilities and Equity
Notes payable and lines of credit secured
by revenue earning vehicles $2,015,446 $ -- $ 198,102 $ 14,731 $ -- $ 2,228,279
Mortgages and notes payable to affiliates -- 2,918 5,732 -- (8,650) --
Estimated auto liability claims 120,320 -- 1,859 103 -- 122,282
Accounts payable to affiliates 3,681 944 62,322 14,523 (77,022) 4,448
Accounts payable 115,976 2,105 17,525 2,844 -- 138,450
Other debt 98,100 119,668 18,881 -- -- 236,649
Accrued expenses 21,175 1,669 -- 247 (20) 23,071
Customer deposits 15,951 -- 1,455 259 (1,092) 16,573
---------- --------- --------- -------- ----------- -----------
Total liabilities 2,390,649 127,304 305,876 32,707 (86,784) 2,769,752
---------- --------- --------- -------- ----------- -----------
Minority interest (deficiency in assets) -- -- (140) 155 (275) (260)
Equity:
Common stock 1 -- -- 4 -- 5
Additional paid-in capital 9,568 -- -- 2,137 (2,176) 9,529
Retained earnings and partners' capital 56,580 11,773 (36,922) (6,575) 3,848 28,704
Translation adjustment -- -- 2,236 19 -- 2,255
---------- --------- --------- -------- ----------- -----------
Total equity 66,149 11,773 (34,686) (4,415) 1,672 40,493
---------- --------- --------- -------- ----------- -----------
$2,456,798 $ 139,077 $ 271,050 $ 28,447 $ (85,387) $ 2,809,985
========== ========= ========= ======== =========== ===========
The accompanying notes are an integral part of these financial statements.
-4-
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Combining Condensed Balance Sheets
(Audited)
(In thousands)
December 31, 1995
Alamo
GUSA Affiliated
Assets Alamo DKBERT Ltd. Companies Eliminations Combined
---------- --------- --------- ---------- ------------ ----------
Cash and cash equivalents $ 5,987 $ 586 $ 3,777 $ 1,603 $ -- $ 11,953
Investments 62,626 -- -- -- -- 62,626
Receivables:
Trade, less allowance for doubtful
accounts of $1,423, $-0-, $3,692
and $99 for Alamo, DKBERT,
GUSA Ltd., and Alamo
Affiliated Companies,
respectively 42,004 -- 24,770 644 -- 67,418
Vehicle 78,619 -- 15,494 295 -- 94,408
Notes, mortgages and other due from
affiliates 21,960 680 7,128 1,772 (29,131) 2,409
Other 6,586 211 480 498 -- 7,775
---------- --------- --------- -------- ----------- ----------
149,169 891 47,872 3,209 (29,131) 172,010
---------- --------- --------- -------- ----------- ----------
Revenue earning vehicles, net 1,327,572 -- 145,541 5,296 -- 1,478,409
Property and equipment, net 73,504 134,789 4,487 1,205 -- 213,985
Other assets 40,155 2,683 19,458 948 (1,482) 61,762
---------- --------- --------- -------- ----------- ----------
$1,659,013 $ 138,949 $ 221,135 $ 12,261 $ (30,613) $2,000,745
========== ========= ========= ======== =========== ==========
Liabilities and Equity
Notes payable and lines of credit secured
by revenue earning vehicles $1,346,651 $ -- $ 193,936 $ 5,535 $ -- $1,546,122
Mortgages and notes payable to affiliates -- 8,815 4,827 16 (13,658) --
Estimated auto liability claims 110,334 -- 2,079 35 -- 112,448
Accounts payable to affiliates 5,354 3,938 1,931 6,977 (16,523) 1,677
Accounts payable 88,302 2,435 23,467 2,203 (33) 116,374
Other debt 8,700 109,128 19,438 -- -- 137,266
Accrued expenses 8,543 836 1,183 488 -- 11,050
Customer deposits 8,446 1,928 808 142 (1,481) 9,843
---------- --------- --------- -------- ----------- ----------
Total liabilities 1,576,330 127,080 247,669 15,396 (31,695) 1,934,780
---------- --------- --------- -------- ----------- ----------
Minority interest (deficiency in assets) -- -- 119 156 (275) --
Equity:
Common stock 1 -- -- 4 -- 5
Additional paid-in capital 9,568 -- -- 2,102 (2,176) 9,494
Retained earnings and partners' capital 73,114 11,869 (29,326) (5,309) 3,533 53,881
Translation adjustment -- -- 2,673 (88) -- 2,585
---------- --------- --------- -------- ----------- ----------
Total equity 82,683 11,869 (26,653) (3,291) 1,357 65,965
---------- --------- --------- -------- ----------- ----------
$1,659,013 $ 138,949 $ 221,135 $ 12,261 $ (30,613) $2,000,745
========== ========= ========= ======== =========== ==========
The accompanying notes are an integral part of these financial statements.
-5-
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Combining Condensed Statements of Operations
(Unaudited)
(In thousands)
Three Months Ended June 30, 1996
--------------------------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo DKBERT Ltd. Companies Eliminations Combined
--------- ------- -------- ---------- ------------ ---------
Revenue:
Vehicle rentals $ 339,172 $ -- $ 35,235 $ 2,496 $ 442 $ 377,345
Interest 2,492 -- 171 1 (1,642) 1,022
Revenue from affiliates -- 4,529 645 7,840 (12,997) 17
Other -- 135 (194) (50) 244 135
--------- ------- -------- -------- --------- ---------
341,664 4,664 35,857 10,287 (13,953) 378,519
--------- ------- -------- -------- --------- ---------
Costs and expenses:
Vehicle depreciation 101,045 -- 5,023 472 -- 106,540
Vehicle interest 26,441 -- 2,398 86 -- 28,925
Vehicle leases 3,904 -- 982 344 -- 5,230
Selling, general and administrative 206,575 1,515 27,980 8,981 (12,508) 232,543
Other interest 4,352 3,049 1,694 86 (1,728) 7,453
Minority interest in net loss of
consolidated subsidiaries -- -- (194) -- -- (194)
--------- ------- -------- -------- --------- ---------
342,317 4,564 37,883 9,969 (14,236) 380,497
--------- ------- -------- -------- --------- ---------
Net income (loss) $ (653) $ 100 $ (2,026) $ 318 $ 283 $ (1,978)
========= ======= ======== ======== ========= =========
The accompanying notes are an integral part of these financial statements.
-6-
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Combining Condensed Statements of Operations
(Unaudited)
(In thousands)
Three Months Ended June 30, 1995
-----------------------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo DKBERT Ltd. Companies Eliminations Combined
----- ------ ---- --------- ------------ ---------
Revenue:
Vehicle rentals $ 304,344 $ -- $ 31,895 $ 1,683 $ -- $ 337,922
Interest 1,934 67 31 (6) (781) 1,245
Revenue from affiliates -- 4,057 -- 464 (4,521) --
Other -- 157 2,901 247 (1,777) 1,528
--------- ------- -------- ------- --------- ---------
306,278 4,281 34,827 2,388 (7,079) 340,695
--------- ------- -------- ------- --------- ---------
Costs and expenses:
Vehicle depreciation 89,741 -- 5,744 203 -- 95,688
Vehicle interest 29,492 -- 1,687 11 -- 31,190
Vehicle leases 17,022 -- 1,808 326 -- 19,156
Selling, general and administrative 183,520 1,521 26,780 1,857 (7,300) 206,378
Other interest 901 2,419 167 27 (781) 2,733
Minority interest in net loss of
consolidated subsidiaries -- -- (398) -- -- (398)
--------- ------- -------- ------- --------- ---------
320,676 3,940 35,788 2,424 (8,081) 354,747
--------- ------- -------- ------- --------- ---------
Net income (loss) $ (14,398) $ 341 $ (961) $ (36) $ 1,002 $ (14,052)
========= ======= ======== ======= ========= =========
The accompanying notes are an integral part of these financial statements.
-7-
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Combining Condensed Statements of Operations
(Unaudited)
(In thousands)
Six Months Ended June 30, 1996
--------------------------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo DKBERT Ltd. Companies Eliminations Combined
--------- ------- -------- -------- ------------ ---------
Revenue:
Vehicle rentals $ 633,089 $ -- $ 64,060 $ 4,142 $ (161) $ 701,130
Interest 4,797 -- 229 4 (3,056) 1,974
Revenue from affiliates -- 8,938 1,631 14,465 (24,340) 694
Other -- 322 246 21 244 833
--------- ------- -------- -------- --------- ---------
637,886 9,260 66,166 18,632 (27,313) 704,631
--------- ------- -------- -------- --------- ---------
Costs and expenses:
Vehicle depreciation 186,380 -- 8,656 822 -- 195,858
Vehicle interest 50,711 -- 4,696 157 -- 55,564
Vehicle leases 7,115 -- 2,001 538 -- 9,654
Selling, general and administrative 394,122 3,253 56,226 17,700 (24,572) 446,729
Other interest 5,876 5,970 2,836 160 (3,056) 11,786
Minority interest in net loss of
consolidated subsidiaries -- -- (653) -- -- (653)
--------- ------- -------- -------- --------- ---------
644,204 9,223 73,762 19,377 (27,628) 718,938
--------- ------- -------- -------- --------- ---------
Net income (loss) $ (6,318) $ 37 $ (7,596) $ (745) $ 315 $ (14,307)
========= ======= ======== ======== ========= =========
The accompanying notes are an integral part of these financial statements.
-8-
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Combining Condensed Statements of Operations
(Unaudited)
(In thousands)
Six Months Ended June 30, 1995
-------------------------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo DKBERT Ltd. Companies Eliminations Combined
--------- ------- -------- -------- ------------ ---------
Revenue:
Vehicle rentals $ 578,049 $ -- $ 57,227 $ 2,373 $ -- $ 637,649
Interest 4,271 166 59 14 (1,663) 2,847
Revenue from affiliates -- 8,178 -- 668 (8,846) --
Other -- 319 4,659 433 (2,924) 2,487
--------- ------- -------- -------- --------- ---------
582,320 8,663 61,945 3,488 (13,433) 642,983
--------- ------- -------- -------- --------- ---------
Costs and expenses:
Vehicle depreciation 171,829 -- 9,812 263 -- 181,904
Vehicle interest 58,522 -- 2,681 24 -- 61,227
Vehicle leases 27,295 -- 3,266 509 -- 31,070
Selling, general and administrative 362,590 3,170 51,231 2,927 (12,056) 407,862
Other interest 1,749 4,937 415 27 (1,663) 5,465
Minority interest in net loss of
consolidated subsidiaries -- -- (1,161) -- -- (1,161)
--------- ------- -------- -------- --------- ---------
621,985 8,107 66,244 3,750 (13,719) 686,367
--------- ------- -------- -------- --------- ---------
Net income (loss) $ (39,665) $ 556 $ (4,299) $ (262) $ 286 $ (43,384)
========= ======= ======== ======== ========= =========
The accompanying notes are an integral part of these financial statements.
-9-
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Combining Condensed Statements of Cash Flows
(Unaudited)
(In thousands)
Six Months Ended June 30, 1996
-----------------------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo DKBERT Ltd. Companies Eliminations Combined
----------- -------- --------- -------- ------------ -----------
Cash flows from operating activities $ 207,320 $ (1,914) $ 7,494 $ (5,204) $ (2,590) $ 205,106
----------- -------- --------- -------- --------- -----------
Cash flows from investing activities:
Cash received from sale of revenue
earning vehicles 701,901 -- 143,367 4,909 -- 850,177
Cash paid to suppliers of revenue earning
vehicles (1,572,949) -- (196,146) (15,255) -- (1,784,350)
(Purchase) sale of investments (27,949) -- -- -- -- (27,949)
Capital expenditures (7,614) (2,247) (461) (202) -- (10,524)
Proceeds from sale of property and
equipment 1,077 321 -- -- -- 1,398
----------- -------- --------- -------- --------- -----------
Net cash used in investing activities (905,534) (1,926) (53,240) (10,548) -- (971,248)
----------- -------- --------- -------- --------- -----------
Cash flows from financing activities:
Proceeds from revenue earning vehicle
financing 1,548,298 -- 177,162 13,679 -- 1,739,139
Principal payments on revenue earning
vehicle financing (879,503) -- (170,985) (4,260) -- (1,054,748)
Proceeds from issuance of other debt 90,000 12,500 3,813 -- -- 106,313
Principal payments on other debt (600) (1,960) (4,347) -- -- (6,907)
Collections from affiliate 2,975 -- 54,514 6,368 (63,857) --
Payments to affiliate (53,614) (5,997) (6,836) -- 66,447 --
Dividends and distributions (10,216) (133) -- (521) -- (10,870)
----------- -------- --------- -------- --------- -----------
Net cash provided by financing activities 697,340 4,410 53,321 15,266 2,590 772,927
----------- -------- --------- -------- --------- -----------
Effect of exchange rate changes on cash -- -- (252) (50) -- (302)
----------- -------- --------- -------- --------- -----------
Net increase (decrease) in cash and cash
equivalents (874) 570 7,323 (536) -- 6,483
Cash and cash equivalents at beginning of
period 5,987 586 3,777 1,603 -- 11,953
----------- -------- --------- -------- --------- -----------
Cash and cash equivalents at end of period $ 5,113 $ 1,156 $ 11,100 $ 1,067 $ -- $ 18,436
=========== ======== ========= ======== ========= ===========
Supplemental disclosures:
Interest paid $ 52,200 $ 9,893 $ 6,433 $ 211 $ (5,474) $ 63,263
=========== ======== ========= ======== ========= ===========
Income tax payments $ -- $ -- $ -- $ -- $ -- $ --
=========== ======== ========= ======== ========= ===========
The accompanying notes are an integral part of these financial statements.
-10-
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Combining Condensed Statements of Cash Flows
(Unaudited)
(In thousands)
Six Months Ended June 30, 1995
----------------------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo DKBERT Ltd. Companies Eliminations Combined
----------- -------- --------- ---------- ------------ -----------
Cash flows from operating activities $ 136,493 $ 2,027 $ 17,824 $ (342) $ (6,617) $ 149,385
----------- -------- --------- ------- --------- -----------
Cash flows from investing activities:
Cash received from sale of revenue
earning vehicles 1,168,780 -- 97,587 1,523 -- 1,267,890
Cash paid to suppliers of revenue earning
vehicles (1,490,870) -- (141,969) (6,592) -- (1,639,431)
Sale of investments 21,788 2,156 -- -- -- 23,944
Capital expenditures (13,596) (4,878) (305) (200) -- (18,979)
Proceeds from sale of property and
equipment 335 418 -- -- -- 753
----------- -------- --------- ------- --------- -----------
Net cash used in investing activities (313,563) (2,304) (44,687) (5,269) -- (365,823)
----------- -------- --------- ------- --------- -----------
Cash flows from financing activities:
Proceeds from revenue earning vehicle
financing 1,493,850 -- 139,077 6,992 -- 1,639,919
Principal payments on revenue earning
vehicle financing (1,339,499) -- (106,078) (1,614) -- (1,447,191)
Proceeds from other debt -- 52,811 3,459 -- -- 56,270
Principal payments on other debt (1,501) (23,913) (4,257) (4) -- (29,675)
Collections from affiliate 25,812 4,119 8,677 36 (38,644) --
Payments to affiliate (1,746) (31,547) (11,968) -- 45,261 --
Dividends and distributions (6,344) (1,351) -- (1,230) -- (8,925)
Contributions 900 -- 5 208 -- 1,113
----------- -------- --------- ------- --------- -----------
Net cash provided by financing activities 171,472 119 28,915 4,388 6,617 211,511
----------- -------- --------- ------- --------- -----------
Effect of exchange rate changes on cash -- -- 251 21 -- 272
----------- -------- --------- ------- --------- -----------
Net increase (decrease) in cash and cash
equivalents (5,598) (158) 2,303 (1,202) -- (4,655)
Cash and cash equivalents at beginning of
period 6,598 466 6,400 2,234 -- 15,698
----------- -------- --------- ------- --------- -----------
Cash and cash equivalents at end of period $ 1,000 $ 308 $ 8,703 $ 1,032 $ -- $ 11,043
=========== ======== ========= ======= ========= ===========
Supplemental disclosures:
Interest paid $ 61,765 $ 4,937 $ 1,481 $ 51 $ (1,663) $ 66,571
=========== ======== ========= ======= ========= ===========
Income tax payments $ 256 $ -- $ -- $ -- $ -- $ 256
=========== ======== ========= ======= ========= ===========
The accompanying notes are an integral part of these financial statements.
-11-
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Notes to Combined and Combining Condensed Financial Statements
Unaudited
(1) Summary of Significant Accounting Policies
(a) Interim Financial Statements and Basis of Presentation
The accompanying condensed financial statements include the
accounts of the following entities, each entity affiliated with
each other as a result of common ownership and common management:
(i) Alamo Rent-A-Car, Inc. and Affiliate (Alamo), (ii) DKBERT,
Assoc., (DKBERT), (iii) Guy Salmon USA, Ltd. and Subsidiaries
(GUSA Ltd.), and (iv) Alamo Rent-A-Car (Belgium), Inc. (Alamo
Belgium), Alamo Rent-A-Car (Canada), Inc. (Alamo Canada), Green
Corn, Inc. (Green Corn), Guy Salmon (USA), Inc. (GUSA Inc.),
Territory Blue, Inc. (Territory Blue), and Tower Advertising
Group, Inc. (Tower) (collectively, the Alamo Affiliated
Companies). The combined and combining financial statements of
each of the above entities (collectively referred to as the
"Companies") include the accounts of the Companies and their
respective majority-owned subsidiaries. All significant
intercompany accounts and transactions are eliminated in
combination. The following is a description of the financial
statements included in the accompanying combined and combining
financial statements:
(i) The consolidated financial statements of Alamo and Alamo
Funding, L.P. (AFL). Alamo has a 99 percent limited
partnership interest in AFL and AFL's 1 percent general
partner is a corporation owned by the shareholders of Alamo.
All significant intercompany balances and transactions have
been eliminated in consolidation. Alamo is engaged in the
car rental business throughout the United States, primarily
on a daily or weekly basis. AFL provides financing to Alamo
for the financing or refinancing of revenue earning
vehicles. AFL and Alamo have separate corporate existences
and separate financial conditions and records. The assets of
AFL will be available only to satisfy the claims of its
creditors and will not be available to any creditors of
Alamo or its other affiliates.
(ii) The financial statements of DKBERT, a Florida partnership,
which owns and leases real property. DKBERT is economically
dependent on Alamo for rental income sufficient to service
its indebtedness.
(iii) The consolidated financial statements of GUSA Ltd., a
Florida limited partnership and the holding company for
certain European car rental affiliates of Alamo. The
subsidiaries of GUSA Ltd. are (i) Alamo Rent-A-Car (UK)
Limited, which conducts operations in the United Kingdom;
(ii) Alamo Rent-A-Car, AG, Zurich which conducts Swiss
operations; (iii) Alamo Autovermietung GmbH, which conducts
German operations; and (iv) Alamo Rent-A-Car (Vienna) GmbH,
organized April 1995 and closed April 1996. All significant
intercompany balances and transactions have been eliminated
in consolidation. GUSA Ltd. and its subsidiaries are
economically dependent on Alamo for administrative support
and working capital required to supplement its cash flow
needs and to provide interim funding for capital
expenditures.
(iv) The combined financial statements of the Alamo Affiliated
Companies, as follows: (i) Alamo Belgium which conducts car
rental operations in Belgium; (ii) Alamo Canada which
conducts car rental operations in Canada; (iii) Green Corn,
an entity with limited assets; (iv) GUSA Inc., which owns
79% of Alamo Rent-
-12-
A-Car B.V. which conducts car rental operations in The
Netherlands and also owns a minority interest in GUSA Ltd.;
(v) Territory Blue, a management company which contracts
with certain employees of Alamo and offers management
services to certain other entities; and (vi) Tower, which
provides advertising services to Alamo. The combined
financial statements include the accounts of the Alamo
Affiliated Companies and their majority-owned subsidiaries.
Minority interest represents GUSA Ltd.'s 21% ownership in
Alamo Rent-A-Car B.V. All significant intercompany accounts
and transactions are eliminated in combination. The Alamo
Affiliated Companies are economically dependent on Alamo for
administrative support and working capital required to
supplement their cash flow needs and to provide interim
funding for capital expenditures.
The accompanying unaudited combined and combining condensed
financial statements have been prepared by the Companies in
accordance with the accounting policies described in the 1995
Annual Report and should be read in conjunction with the
combined financial statements and notes which appear in that
report. These statements do not include all of the information
and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all normal recurring adjustments considered
necessary for a fair presentation have been included.
(b) Reclassifications
Certain reclassifications have been made to the 1995 financial
statements to conform to the presentation used in 1996.
(2) Revenue Earning Vehicles
Revenue earning vehicles consist of the following (in thousands):
June 30, 1996
----------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo Ltd. Companies Combined
----- ---- --------- --------
Revenue earning vehicles $2,290,033 $205,923 $15,468 $2,511,424
Less accumulated depreciation (233,253) (17,131) (792) (251,176)
---------- -------- ------- ----------
$2,056,780 $188,792 $14,676 $2,260,248
========== ======== ======= ==========
December 31, 1995
----------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo Ltd. Companies Combined
----- ---- --------- --------
Revenue earning vehicles $1,539,814 $156,113 $ 6,018 $1,701,945
Less accumulated depreciation (212,242) (10,572) (722) (223,536)
---------- -------- ------- ----------
$1,327,572 $145,541 $ 5,296 $ 1,478,409
========== ======== ======= ==========
-13-
(3) Notes Payable and Lines of Credit Secured By Revenue Earning Vehicles
Notes payable and lines of credit secured by revenue earning vehicles
consist of the following (in thousands):
June 30, December 31,
Alamo 1996 1995
----- ---- ----
Amounts under $750 million revolving credit agreement and
predecessor agreements with termination date of June 30, 1999;
secured by eligible vehicle collateral and vehicle receivable
balances; interest at formulas based on prime, Federal funds
or LIBOR at Alamo's discretion $ 494,441 $ 19,393
Amounts under $580 million loan agreement with termination date
of June 10, 1997; secured by eligible vehicle collateral and
vehicle receivable balances; interest based on market dictated
commercial paper rates 578,483 579,001
Senior secured notes payable with interest at fixed rates ranging
from 5.58% to 7.08% with various maturity dates and amounts as
follows: December 15, 1996 - $133 million; December 15, 1997 -
$25 million; December 15, 1998 - $113 million; December 15,
2000 - $94 million; and, December 15, 2003 - $80.5 million;
secured by eligible vehicle collateral and vehicle receivable
balances 445,500 445,500
Amounts under $250 million loan agreement with termination date
of October 2, 1996; secured by eligible vehicle collateral and
vehicle receivable balances; interest based on market dictated
commercial paper rates 246,955 236,357
Amounts under $175 million revolving credit agreement with
termination date of June 5, 1997; secured by eligible vehicle
collateral and vehicle receivable balances; interest at
formulas based on prime or LIBOR at Alamo's discretion 113,000 -
Amounts to be financed after period end under various revolving
credit agreements 137,067 66,400
--------- ---------
Alamo subtotal 2,015,446 1,346,651
--------- ---------
-14-
June 30, December 31,
1996 1995
GUSA Ltd. -------- ------------
---------
Amounts under various uncommitted revolving lease facilities with
financing institutions in Great Britain; secured by eligible
vehicle collateral; interest based on an as quoted
basis dictated by market competition $ 156,575 $ 157,088
Amounts under deutsche mark (DM) 27,500 credit agreement;
secured by eligible vehicle collateral and vehicle receivable
balances; interest based on LIBOR; termination date, February
1997 14,669 -
Amounts under DM 23,000 revolving credit agreement with various
maturity dates; secured by eligible vehicle collateral and
certain real property; interest ranging from 3.8% - 9.0% 15,880 11,368
Amounts under DM term loan and predecessor agreements; secured by
eligible vehicle collateral and vehicle receivable balances;
interest based on FIBOR plus 125 basis points or ICM rate plus
150 basis points
- 14,139
Other, including amounts to be financed after period end, under
various revolving lease facilities 10,978 11,341
---------- ----------
GUSA Ltd. subtotal 198,102 193,936
---------- ----------
Alamo Affiliated Companies
--------------------------
Amounts under Belgium franc (BEF) 155,520 credit facility;
secured by eligible vehicle collateral; interest at Brussels
Interbank offered rate plus 110 basis points; termination
date, June 1997; guaranteed by Alamo
2,877 1,946
Amounts under Canadian dollar C$20,000 credit agreement;
secured by eligible vehicle collateral; interest at Agent's
Bankers Acceptances plus 62.5 basis points; termination date,
June 1998; guaranteed by Alamo
6,879 3,539
Other, including amounts to be financed after period end, under
various revolving credit agreements 4,975 50
---------- ----------
Alamo Affiliated Companies subtotal 14,731 5,535
---------- ----------
Combined $2,228,279 $1,546,122
========== ==========
-15-
(4) Other Debt
Other debt consists of the following (in thousands):
June 30, December 31,
Alamo 1996 1995
----- ---- ----
11 3/4% Senior Notes due 2006, interest payable semi-annually on
January 31 and July 31 of each year, commencing July 31,
1996; unsecured $ 90,000 $ -
Note payable to bank with interest at a formula based on LIBOR or
prime paid quarterly; secured by a building; principal
payable in quarterly installments beginning March 1996 and
based on the balance outstanding at that date, due December
2003 8,100 8,700
--------- ---------
Alamo subtotal 98,100 8,700
-------- ---------
DKBERT
------
Mortgages payable to GMAC and predecessor agreements with
interest at 9.193%; payable in monthly installments, due
July 2005; secured by real property; guaranteed by Alamo 108,843 107,840
11 3/4% Senior Notes due 2006, interest payable semi-annually
on January 31 and July 31 of each year, commencing July 31,
1996; unsecured 10,000 -
Mortgages payable to bank with interest at 0.75% over prime;
variable principal payments due December 2000; secured by
real property; guaranteed by Alamo 825 934
Other mortgages payable - 354
------- -------
DKBERT subtotal 119,668 109,128
------- -------
-16-
June 30, December 31,
1996 1995
---- ----
GUSA LTD.
--------
Term loan agreement with bank, interest at LIBOR plus 125 basis
points, payable monthly; principal payable in quarterly
installments of $331, due January 1999; secured by
non-vehicle equipment, trade receivables and leasehold
improvements $ 3,625 $ 4,285
Amounts under Great Britain pound (GBP) 10,000 revolving
credit commitment to expire December 21, 1996; interest
based on Sterling LIBOR plus 125 basis points or base rate
plus 125 basis points; secured by non-vehicle equipment and
leaseholds 15,256 11,431
Note payable to minority shareholder of combined affiliate, paid
April 1996 - 3,722
-------- --------
GUSA Ltd. subtotal 18,881 19,438
-------- --------
Combined $236,649 $137,266
======== ========
The 11 3/4% Senior Notes due 2006 (the "Senior Notes") were issued by
the entities described in Note 1 (the "Issuers") in connection with a
registration statement on Form S-1 with the Securities and Exchange
Commission. The Senior Notes are unsecured, joint and several
obligations of each of the Issuers and rank pari passu in right of
payment with all existing and future debt (as defined) of the Issuers.
The Senior Notes are effectively subordinated to all existing and
future secured indebtedness of each of the Issuers.
-17-
(5) Condensed Financial Information of Alamo Affiliated Companies
The following table summarizes condensed financial statements of the
Alamo Affiliated Companies (in thousands):
Balance Sheets:
As of June 30, 1996
--------------------------------------------------------------------
Alamo Alamo Green GUSA Territory
Belgium Canada Corn Inc. Blue Tower Combined
------- ------ ---- ---- ---- ----- --------
Assets:
Cash and cash equivalents $ 470 $ 215 $ 40 $ 279 $ - $ 63 $ 1,067
Receivables, net 688 1,431 82 1,658 3,835 2,319 10,013
Revenue earning vehicles, net 2,833 9,492 - 2,351 - - 14,676
Property and equipment, net 38 1,054 - 102 - 83 1,277
Other assets 373 435 - 480 110 16 1,414
------ ------ ------- ------ ------ ----- -- -------
$4,402 $12,627 $ 122 $4,870 $3,945 $ 2,481 $28,447
====== ======= ======= ====== ====== ======== =======
Liabilities and Equity:
Notes payable and lines of credit
secured by revenue earning
vehicles $ 2,877 $10,400 $ - $ 1,454 $ - $ - $ 14,731
Due to affiliates 1,218 3,079 - 5,314 3,128 1,784 14,523
Accounts payable 322 719 - 764 281 758 2,844
Accrued expenses and customer
deposits 96 292 159 60 - 2 609
------- -------- ------- ------- ------- -------- --------
4,513 14,490 159 7,592 3,409 2,544 32,707
------- -------- ------- ------- ------- -------- --------
Minority interest - - - 155 - - 155
Equity (deficit) (111) (1,863) (37) (2,877) 536 (63) (4,415)
------- -------- ------- ------- ------- -------- --------
$ 4,402 $ 12,627 $ 122 $ 4,870 $ 3,945 $ 2,481 $ 28,447
======= ======== ======= ======= ======= ======= ========
-18-
As of December 31, 1995
--------------------------------------------------------------------
Alamo Alamo Green GUSA Territory
Belgium Canada Corn Inc. Blue Tower Combined
------- ------ ---- ---- ---- ----- --------
Assets:
Cash and cash equivalents $ 597 $ 283 $451 $ 289 $ - $ (17) $ 1,603
Receivables, net 874 118 381 783 - 1,053 3,209
Revenue earning vehicles, net 2,044 3,211 - 41 - - 5,296
Property and equipment, net 37 1,018 - 113 - 37 1,205
Other assets 131 206 - 611 - - 948
------ ------- ---- ------ ---- ------ -------
$3,683 $4,836 $832 $1,837 $ - $1,073 $12,261
====== ====== ==== ====== ==== ====== =======
Liabilities and Equity:
Notes payable and lines of credit
secured by revenue earning
vehicles $1,946 $3,589 $ - $ - $ - $ - $ 5,535
Due to affiliates 1,187 1,887 - 3,319 - 600 6,993
Accounts payable 420 214 - 598 - 971 2,203
Accrued expenses and customer
deposits 166 107 287 105 - - 665
------ ------- ---- ------ ---- ------ -------
3,719 5,797 287 4,022 - 1,571 15,396
------ ------- ---- ------ ---- ------ -------
Minority interest - - - 156 - - 156
Equity (deficit) (36) (961) 545 (2,341) - (498) (3,291)
------ ------- ---- ------ ---- ------ -------
$3,683 $4,836 $832 $1,837 $ - $1,073 $12,261
====== ====== ==== ====== ==== ====== =======
Statements of Operations:
Three months ended June 30, 1996
----------------------------------------------------------------------
Alamo Alamo Green GUSA Territory
Belgium Canada Corn Inc. Blue Tower Combined
------- ------ ---- ---- ---- ----- --------
Revenue:
Vehicle rentals $ 463 $ 974 $ - $ 1,059 $ - $ - $ 2,496
Revenue from affiliates 22 244 1 153 4,313 3,107 7,840
Interest and other revenue - - 4 - - (53) (49)
------ ------ ---- ------ ---- ------ -------
485 1,218 5 1,212 4,313 3,054 10,287
------ ------ ---- ------ ---- ------ -------
Costs and expenses:
Vehicle depreciation 102 319 - 51 - - 472
Vehicle interest 11 75 - - - - 86
Vehicle leases 6 - - 338 - - 344
Selling, general and
administrative and other
interest 364 1,168 16 1,093 3,611 2,815 9,067
------ ------ ---- ------ ---- ------ -------
483 1,562 16 1,482 3,611 2,815 9,969
------ ------ ---- ------ ---- ------ -------
Net income (loss) $ 2 $ (344) $(11) $ (270) $702 $ 239 $ 318
====== ====== ==== ====== ==== ====== =======
-19-
Three months ended June 30, 1995
----------------------------------------------------------------------
Alamo Alamo Green GUSA Territory
Belgium Canada Corn Inc. Blue Tower Combined
------- ------ ---- ---- ---- ----- --------
Revenue:
Vehicle rentals $ 502 $ 190 $ - $ 991 $ - $ - $ 1,683
Revenue from affiliates - - 31 171 - 262 464
Interest and other revenue 36 - (12) 184 - 33 241
---- --- -- ------ -- ---- ------
538 190 19 1,346 - 295 2,388
--- --- -- ----- -- --- -----
Costs and expenses:
Vehicle depreciation 80 78 - 45 - - 203
Vehicle interest (13) 24 - - - - 11
Vehicle leases - - - 326 - - 326
Selling, general and
administrative and other
interest 427 460 17 945 - 35 1,884
--- --- -- ------ -- ---- -----
494 562 17 1,316 - 35 2,424
--- --- -- ----- -- ---- -----
Net income (loss) $ 44 $ (372) $ 2 $ 30 $ - $ 260 $ (36)
===== === === ======= == === ======
Six months ended June 30, 1996
-----------------------------------------------------------------------
Alamo Alamo Green GUSA Territory
Belgium Canada Corn Inc. Blue Tower Combined
------- ------ ---- ---- ---- ----- --------
Revenue:
Vehicle rentals $ 822 $ 1,582 $ - $ 1,738 $ - $ - $ 4,142
Revenue from affiliates 86 558 (150) 519 8,064 5,388 14,465
Interest and other revenue - - 4 - - 21 25
--- ---- ----- ---- ---- ------- -------
908 2,140 (146) 2,257 8,064 5,409 18,632
--- ----- --- ----- ----- ----- ------
Costs and expenses:
Vehicle depreciation 163 577 - 82 - - 822
Vehicle interest 28 129 - - - - 157
Vehicle leases 6 3 - 529 - - 538
Selling, general and
administrative and other
interest 790 2,346 28 2,307 7,529 4,860 17,860
--- ----- ---- ----- ----- ----- ------
987 3,055 28 2,918 7,529 4,860 19,377
--- ----- ---- ----- ----- ----- ------
Net income (loss) $ (79) $ (915) $ (174) $ (661) $ 535 $ 549 $ (745)
==== ======= ==== ====== ====== ====== ========
-20-
Six months ended June 30, 1995
----------------------------------------------------------------------
Alamo Alamo Green GUSA Territory
Belgium Canada Corn Inc. Blue Tower Combined
-------- ------ ---- ---- ---- ----- --------
Revenue:
Vehicle rentals $ 753 $ 190 $ - $ 1,430 $ - $ - $ 2,373
Revenue from affiliates - - 31 171 - 466 668
Interest and other revenue 36 - 14 364 - 33 447
---- --- -- ------ -- ---- ------
789 190 45 1,965 - 499 3,488
--- --- -- ----- -- --- -----
Costs and expenses:
Vehicle depreciation 140 78 - 45 - - 263
Vehicle interest - 24 - - - - 24
Vehicle leases - - - 509 - - 509
Selling, general and
administrative and other
interest 681 460 47 1,696 - 70 2,954
--- --- -- ----- -- ---- -----
821 562 47 2,250 - 70 3,750
--- --- -- ----- -- ---- -----
Net income (loss) $ (32) $ (372) $ (2) $ (285) $ - $ 429 $ (262)
=== === == ====== == === ======
Statements of Cash Flows:
Six months ended June 30, 1996
----------------------------------------------------------------------
Alamo Alamo Green GUSA Territory
Belgium Canada Corn Inc. Blue Tower Combined
------- ------ ---- ---- ---- ----- --------
Cash flows from operating activities $ (339) $ (969) $ (4) $(1,028) $(3,128) $ 264 $ (5,204)
------ ------ ---- ----- ----- --- ------
Cash flows from investing activities:
Cash received from sale of
revenue earning vehicles 2,162 2,701 - 46 - - 4,909
Cash paid to suppliers of
revenue earning vehicles (2,984) (9,755) - (2,516) - - (15,255)
Capital expenditures (10) (111) - (11) - (70) (202)
------- ------ --- ------ ----- --- --------
Net cash used
in investing activities (832) (7,165) - (2,481) - (70) (10,548)
------ ----- --- ----- ----- --- ------
Cash flows from financing activities:
Proceeds from revenue earning
vehicle financing 2,348 9,835 - 1,496 - - 13,679
Principal payments on revenue
earning vehicle financing (1,277) (2,983) - - - - (4,260)
Collections from affiliate - 1,219 - 2,021 3,128 - 6,368
Dividends and distributions - - (407) - - (114) (521)
----- ----- --- ----- ----- --- --------
Net cash provided by
(used in) financing
activities 1,071 8,071 (407) 3,517 3,128 (114) 15,266
----- ----- --- ----- ----- --- ------
Effect of exchange rate changes on
cash (27) (5) - (18) - - (50)
------ -------- --- ------- ----- --- --------
Net increase (decrease) in cash and
cash equivalents (127) (68) (411) (10) - 80 (536)
Cash and cash equivalents at
beginning of period 597 283 451 289 - (17) 1,603
------ ------ --- ------ ----- --- -------
Cash and cash equivalents at end of
period $ 470 $ 215 $ 40 $ 279 $ - $ 63 $ 1,067
====== ====== ==== ====== ===== ==== =======
-21-
Six months ended June 30, 1995
-----------------------------------------------------------------------
Alamo Alamo Green GUSA Territory
Belgium Canada Corn Inc. Blue Tower Combined
------- ------ ---- ---- ---- ----- --------
Cash flows from operating activities $ (298) $ (131) $ 5 $ 265 $ - $ (183) $ (342)
------ ------ ----- --- ---- ----- ------
Cash flows from investing activities:
Cash received from sale of
revenue earning vehicles 1,479 - - 44 - - 1,523
Cash paid to suppliers of
revenue earning vehicles (3,046) (3,432) - (114) - - (6,592)
Capital expenditures (7) (181) - (12) - - (200)
------- ------ ---- --- ---- ---- ------
Net cash used
in investing activities (1,574) (3,613) - (82) - - (5,269)
----- ----- ---- --- ---- ---- -----
Cash flows from financing activities:
Proceeds from revenue earning
vehicle financing 3,420 3,572 - - - - 6,992
Principal payments on revenue
earning vehicle financing (1,588) (26) - - - - (1,614)
Payments on other debt - - - (4) - - (4)
Collections from affiliate - - - 36 - - 36
Dividends and distributions - - - - - (1,230) (1,230)
Contributions - 198 - 10 - - 208
---- ------ ---- ---- ---- ---- ------
Net cash provided by
(used in) financing 1,832 3,744 - 42 - (1,230) 4,388
activities ----- ----- ---- ---- ---- ----- -----
Effect of exchange rate changes on
cash 5 - - 16 - - 21
-------- ----- ---- ---- ---- ----- -------
Net increase (decrease) in cash and
cash equivalents (35) - 5 241 - (1,413) (1,202)
Cash and cash equivalents at
beginning of period 50 - 429 87 - 1,668 2,234
------- ---- --- ---- ---- ----- -----
Cash and cash equivalents at end of
period $ 15 $ - $ 434 $ 328 $ - $ 255 $1,032
====== ==== === === ==== ====== =====
-22-
(6) Supplemental Financial Data (in thousands)
Balance Sheet:
European
Operating Combined
June 30, 1996 Issuers (1) Subsidiaries(2) Eliminations Issuers
------------- ----------- --------------- ------------ -------
Assets $2,583,550 $275,379 $(48,944) $2,809,985
========== ======== ======== ==========
Liabilities $2,533,229 $295,281 $(58,758) $2,769,752
Minority interest - (260) - (260)
Equity 50,321 (19,642) 9,814 40,493
---------- -------- -------- ----------
$2,583,550 $275,379 $(48,944) $2,809,985
========== ======== ======== ==========
European
Operating Combined
December 31, 1995 Issuers (1) Subsidiaries(2) Eliminations Issuers
----------------- ----------- --------------- ------------ -------
Assets $1,805,783 $250,334 $(55,372) $2,000,745
========== ======== ======== ==========
Liabilities $1,732,611 $264,096 $(61,927) $1,934,780
Equity 73,172 (13,762) 6,555 65,965
---------- -------- -------- ----------
$1,805,783 $250,334 $(55,372) $2,000,745
========== ======== ======== ==========
Income Statement and Cash Flows:
European
Operating Combined
Six months ended June 30, 1996 Issuers (1) Subsidiaries(2) Eliminations Issuers
------------------------------ ----------- --------------- ------------ -------
Revenue $ 641,261 $ 68,204 $ (4,834) $ 704,631
Net income (loss) (14,624) (6,179) 6,496 (14,307)
Cash flows from operating activities 203,005 (4,416) 6,517 205,106
European
Operating Combined
Six months ended June 30, 1995 Issuers (1) Subsidiaries(2) Eliminations Issuers
------------------------------ ----------- --------------- ------------ -------
Revenue $ 582,442 $ 63,778 $ (3,237) $ 642,983
Net income (loss) (41,861) (3,375) 1,852 (43,384)
Cash flows from operating activities 139,133 16,924 (6,672) 149,385
(1) Represents the entities which are the issuers of the Senior Notes -
referred to in note 4.
(2) Represents the European operating subsidiaries of certain of the
issuers.
-23-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Combined Results of Operations
Revenue. Total revenue for the three months ended June 30, 1996 increased 11% to
$379 million from $341 million in the same quarter of 1995. On a year to date
basis, total revenue increased $62 million, or 10%, to $705 million versus $643
million for the same period in 1995. Over 90% of the revenue increase in both
the second quarter and year to date comparisons was generated by the Companies'
United States rental operations. Rental volume and average daily rental rates
improved over the comparable 1995 periods, driven by increases in air passenger
deplanements in the traditional tourist destinations of Florida, Hawaii and
California.
Costs and Expenses. Total costs and expenses for the three months ended June 30,
1996 increased 7% to $380 million from the $355 million incurred in the second
quarter of 1995. As a percentage of total revenues, total costs and expenses
decreased to 101% from 104% in the prior year. Six month results followed a
similar pattern, with 1996 total costs and expenses up $33 million, or 5%, over
1995 but down as a percentage of revenues from 107% to 102%.
Vehicle related costs and expenses (depreciation, leasing and interest) were
each individually impacted by a decision to operate a greater percentage of
owned versus leased vehicles in 1996. In the aggregate, these expenses declined
$5 million for the second quarter or 4% from 1995 levels; for the six month
period, these expenses decreased $13 million or 5% from the prior year. As a
percentage of revenues, this category decreased from 43% in 1995 to 37% in 1996
for both periods. These improvements were due to various elements of the
Companies' cost reduction plan, including a less expensive fleet mix, improved
worldwide utilization, and slightly lower interest rates.
Selling, general and administrative costs increased $26 million, or 13%, for the
second quarter and $39 million, or 10%, for the six months over the comparable
periods in 1995. These increases were due primarily to revenue and/or volume
related expenses such as commissions, airport fees and auto maintenance; as a
percentage of revenues this category remained static at 61% for the quarter and
63% year to date for both 1996 and 1995.
Other interest increased by $4.7 million and $6.3 million for the three and six
month periods, respectively, due primarily to the Senior Notes issued during the
first quarter of 1996.
The minority interest in the net loss of the Companies' German operation, shown
as a credit to total costs and expenses, declined from $398,000 in 1995 to
$194,000 in 1996 for the second quarter and from $1,161,000 in 1995 to $653,000
in 1996 for the six months. This reduction came as a result of the finalization
of the German acquisition, whereby the former owner's share in the acquired
entity was reduced from 25%, as reported in 1995, to 16% in 1996. Under the
Minority Interest Shareholder Agreement, loss contributions in 1996 have been
capped at approximately DM 960,000 ($630,000).
Net Loss. As a result of the factors discussed above, the Company had a net loss
of $2 million in the second quarter of 1996, a $12 million improvement over the
$14 million loss incurred in 1995. For the six month period, the 1996 loss was
$14 million, a $29 million improvement over the same period of 1995.
-24-
Capital Resources and Liquidity
Net cash provided by operating activities for the six months ended June 30, 1996
increased $55.7 million, or 37.3%, to $205.1 million from $149.4 million in the
comparable period of 1995. The excess of cash received from rentals over cash
paid to vendors was the primary factor in the overall increase consistent with
the net earnings improvement noted above.
Net cash used in investing activities increased to $971.2 million in the first
six months of 1996, up $605.4 million from the $365.8 million used in the same
period of 1995. The increase was due primarily to fewer sales of revenue earning
vehicles during the first half of 1996 as the Companies decreased their seasonal
outfleeting activity to match anticipated demand. Additionally, the Companies
had a higher percentage of owned versus leased vehicles in 1996 versus 1995.
Net cash provided by financing activities for the first six months of 1996
increased $561.4 million to $772.9 million as compared to the first half of the
prior year due primarily to borrowings associated with the infleeting of
vehicles in advance of the traditional summer tourist season. In addition,
principal payments on debt secured by revenue earning vehicles decreased from
the first six months of 1995 as a result of the reduced sales of vehicles as
mentioned above, partially offset by the temporary pay down of vehicle debt from
proceeds of the issuance of the Senior Notes.
The Companies use interest rate swaps in the management of their interest rate
risk. At June 30, 1996, the Companies had approximately $1,810.6 million of
floating rate indebtedness, of which $175 million had interest rate protection
agreements maturing in 1997. A substantial increase in interest rates could
materially adversely affect the Companies' ability to service their debt
obligations.
The aggregate amount of the Companies' indebtedness fluctuates as a result of
the seasonal aspects of its business, with levels of indebtedness generally
higher during the second and third quarters and lower in the first and fourth.
In June 1996, Alamo's $90 million term loan and $75 million revolving credit
facility were combined into a new $175 million revolving credit agreement.
At June 30, 1996, the Companies had $2,464.9 million in total indebtedness, of
which $2,228.3 million represented secured indebtedness for the purchase of
vehicles, versus $1,683.4 million and $1,546.1 million, respectively, at
December 31, 1995.
The Companies had $355.5 million of capacity available under their vehicle
financing facilities at June 30, 1996. The Companies believe that their cash on
hand, cash provided by operations, and available borrowings under their
revolving credit facilities will adequately provide for their working capital,
debt service and capital expenditure requirements for at least the next twelve
months.
Seasonality
The industry in which the Companies operate, particularly the leisure
travel segment, is highly seasonal. The Companies' third quarter, which includes
the peak summer travel months, has historically been the strongest quarter of
the year. During the peak season the Companies increase their fleet and
workforce to accommodate increased rental activity. As a result, any occurrence
that disrupts travel patterns during the summer period could have a material
adverse effect on the Companies' annual performance. The Companies' first
quarter is generally its weakest, when there is limited leisure family travel
and a greater potential for adverse weather conditions. Many of the Companies'
operating expenses such as rent, general insurance and administrative personnel
are fixed and cannot be reduced during periods of decreased rental demand.
-25-
Forward-Looking Statements
This report contains forward-looking statments within the meaning of
Section 21E of the Securities Exchange Act of 1934. These forward-looking
statements are based largely on the Companies' expectations and are subject
to a number of risks and uncertainties, certain of which are beyond the
Companies' control. Actual results could differ materially from these
forward-looking statements as a result of, among other factors, changes in
manufacturers' repurchase programs, the Companies' leverage and restrictive
covenants, competitive pressures in the rental industry, dependence on the air
travel industry, seasonality, regulation and risks relating to the European
operations. In light of these risks and uncertainties, there can be no
assurance that the forward-looking information contained in this report will
in fact transpire.
-26-
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security
Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Number Exhibit
4.1 Second Amendment to Loan Agreement between Alamo and
AFL (with attached Consent of Majority Banks).
4.2 Amendment to Liquidity Loan
Agreement among AFL, the General
Partner and the Liquidity Agent
(with attached Consent of each
Liquidity Lender).
4.3 Consent of Liquidity Lenders to Extension of Scheduled
Liquidity Commitment Termination Date.
10.1 Consulting Agreement by and between Alamo Rent-A-Car,
Inc. and Philip S. Shailer ("Consultant").
10.2* Agreement between Alamo Rent A Car, Inc.,
ALASYS, Ltd., MOI operations, Inc.
and Edward J. Morse.
27.1. Financial Data Schedule
* Portions of this document have been omitted pursuant
to an application for confidential treatment pursant
to Rule 24b-2 under the Securities Exchange Act of
1934, as amended.
(b) Reports on Form 8-K
Not applicable.
-27-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ALAMO RENT-A-CAR, INC.
Dated: August 13, 1996 By: /s/ D. Keith Cobb
---------------------
D. Keith Cobb
Chief Executive Officer
(Duly Authorized Officer and
Principal Financial Officer)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ALAMO RENT-A-CAR (BELGIUM), INC.
Dated: August 13, 1996 By: /s/ Frank A. Armstrong
-------------------------
Frank A. Armstrong
President
Dated: August 13, 1996 By: /s/ D. Keith Cobb
-------------------------
D. Keith Cobb
(Principal Financial Officer)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ALAMO RENT-A-CAR (CANADA), INC.
Dated: August 13, 1996 By: /s/ W. Macdonald Clark
---------------------------
W. Macdonald Clark
President
Dated: August 13, 1996 By: /s/ D. Keith Cobb
----------------------------
D. Keith Cobb
Vice Chairman of the Board
(Principal Financial Officer)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DKBERT ASSOC.
Dated: August 13, 1996 By: /s/ Michael S. Egan
-------------------
Michael S. Egan,
a general Partner
Dated: August 13, 1996 By: /s/ D. Keith Cobb
-----------------
D. Keith Cobb
(Principal Financial Officer)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GREEN CORN, INC.
Dated: August 13, 1996 By: /s/ Michael S. Egan
-------------------
Michael S. Egan,
Chairman of the Board
and President
Dated: August 13, 1996 By: /s/ D. Keith Cobb
-----------------
D. Keith Cobb
(Principal Financial Officer)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GUY SALMON USA, INC.
Dated: August 13, 1996 By: /s/ D. Keith Cobb
-----------------
D. Keith Cobb
President
(Duly Authorized Officer and
Principal Financial Officer)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GUY SALMON USA, LTD.
By: GUY SALMON USA, INC.
Dated: August 13, 1996 By: /s/ D. Keith Cobb
-----------------
D. Keith Cobb
President
(Duly Authorized Officer and
Principal Financial Officer)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TERRITORY BLUE, INC.
Dated: August 13, 1996 By: /s/ D. Keith Cobb
-----------------
D. Keith Cobb
Chief Executive Officer
(Duly Authorized Officer and
Principal Financial Officer)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TOWER ADVERTISING GROUP, INC.
Dated: August 13, 1996 By: /s/ Roger H. Ballou
-------------------
Roger H. Ballou
President
(Duly Authorized Officer)
Dated: August 13, 1996 By: /s/ D. Keith Cobb
-----------------
D. Keith Cobb
(Principal Financial Officer)
Exhibit Index
Exhibit
Number Exhibit
4.1 Second Amendment to Loan Agreement between Alamo and AFL
(with attached Consent of Majority Banks).
4.2 Amendment to Liquidity Loan Agreement among AFL, the General
Partner and the Liquidity Agent (with attached Consent of each
Liquidity Lender).
4.3 Consent of Liquidity Lenders to Extension of Scheduled
Liquidity Commitment Termination Date.
10.1 Consulting Agreement by and between Alamo Rent-A-Car, Inc. and
Philip S. Shailer ("Consultant").
10.2* Agreement between Alamo Rent A Car, Inc., ALASYS, Ltd.,
MOI Operations, Inc. and Edward J. Morse.
27.1. Financial Data Schedule
* Portions of this document have been omitted pursuant to
an application for confidential treatment pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.