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 September 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 offices) (Zip code)
(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 November 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.
<PAGE>
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
<PAGE>
ALAMO RENT-A-CAR, INC.
Table of Contents
Form 10-Q for the Quarterly Period
Ended September 30, 1996
PART I FINANCIAL INFORMATION PAGE
----
Item 1. Financial Statements
Combined Condensed Financial Statements:
Balance Sheets - September 30, 1996 and December 31, 1995 1
Statements of Operations - Three and Nine Months Ended
September 30, 1996 and 1995 2
Statements of Cash Flows - Nine Months ended September 30,
1996 and 1995 3
Combining Condensed Financial Statements:
Balance Sheets - September 30, 1996 and December 31, 1995 4
Statements of Operations - Three Months ended September
30, 1996 and 1995 6
Statements of Operations - Nine Months ended September 30,
1996 and 1995 8
Statements of Cash Flows - Nine Months Ended September 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 26
PART II OTHER INFORMATION
Item 1. Legal Proceedings 29
Item 2. Changes in Securities 29
Item 3. Defaults upon Senior Securities 29
Item 4. Submission of Matters to a Vote of Security Holders 29
Item 5. Other Information 29
Item 6. Exhibits and Reports on Form 8-K 29
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Combined Condensed Balance Sheets
(In thousands)
September 30, December 31,
Assets 1996 1995
---- ----
(Unaudited) (Audited)
Cash and cash equivalents $ 35,289 $ 11,953
Investments 59,160 62,626
Receivables:
Trade, less allowance for doubtful
accounts of $3,897 and $5,214 in
1996 and 1995, respectively 100,666 67,418
Vehicle 141,605 94,408
Notes, mortgages and other due
from affiliates 5,468 2,409
Other 12,631 7,775
----------- ----------
260,370 172,010
----------- ----------
Revenue earning vehicles, net 2,201,583 1,478,409
Property and equipment, net 215,800 213,985
Other assets 103,007 61,762
----------- ----------
$ 2,875,209 $2,000,745
=========== ==========
Liabilities and Equity
Notes payable and lines of credit
secured by revenue earning vehicles $ 2,254,703 $1,546,122
Estimated auto liability claims 125,761 112,448
Accounts payable to affiliates 3,892 1,677
Accounts payable 136,793 116,374
Other debt 233,606 137,266
Accrued expenses 50,552 11,050
Customer deposits 9,462 9,843
----------- ----------
Total liabilities 2,814,769 1,934,780
----------- ----------
Minority interest (deficiency in assets) (259) --
Equity:
Common stock 5 5
Additional paid-in capital 9,494 9,494
Retained earnings and partners' capital 48,885 53,881
Cumulative translation adjustment 2,315 2,585
----------- ----------
Total equity 60,699 65,965
----------- ----------
$ 2,875,209 $2,000,745
=========== ==========
The accompanying notes are an integral part of these financial statements.
-1-
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Combined Condensed Statements of Operations
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ---------- --------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue:
Vehicle rentals $ 469,680 $ 426,429 $ 1,170,360 $ 1,065,501
Interest 1,577 690 3,551 3,537
Revenue from affiliates 428 -- 1,053 --
Other 1,432 804 2,784 1,868
--------- --------- ----------- -----------
473,117 427,923 1,177,748 1,070,906
--------- --------- ----------- -----------
Costs and expenses:
Vehicle depreciation 129,286 118,532 325,144 300,436
Vehicle interest 37,589 35,846 93,153 97,073
Vehicle leases 9,554 21,814 19,208 52,884
Selling, general and administrative 265,681 227,412 712,410 635,274
Other interest 6,493 3,335 18,279 8,800
Minority interest in net loss of
consolidated subsidiaries -- (827) (653) (1,988)
--------- --------- ----------- -----------
448,603 406,112 1,167,541 1,092,479
--------- --------- ----------- -----------
Net income (loss) $ 24,514 $ 21,811 $ 10,207 $ (21,573)
========= ========= =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Combined Condensed Statements of Cash Flows
(Unaudited)
(In thousands)
Nine Months Ended
September 30,
--------------------------
1996 1995
---- ----
Cash flows from operating activities $ 341,499 $ 301,834
----------- -----------
Cash flows from investing activities:
Cash received from sale of revenue
earning vehicles 1,281,044 1,580,650
Cash paid to suppliers of revenue
earning vehicles (2,376,575) (1,961,988)
Sale of investments 3,466 22,252
Capital expenditures (19,629) (27,185)
Proceeds from sale of property and equipment 3,112 855
----------- -----------
Net cash used in investing activities (1,108,582) (385,416)
----------- -----------
Cash flows from financing activities:
Proceeds from revenue earning vehicle financing 2,427,356 2,002,832
Principal payments on revenue earning
vehicle financing (1,717,883) (1,933,683)
Proceeds from other debt 104,529 52,812
Principal payments on other debt (8,240) (28,732)
Dividends and distributions (15,203) (11,258)
Contributions -- 1,108
----------- -----------
Net cash provided by financing activities 790,559 83,079
----------- -----------
Effect of exchange rate changes on cash (140) 1,887
----------- -----------
Net increase in cash and cash equivalents 23,336 1,384
Cash and cash equivalents at beginning of period 11,953 15,698
----------- -----------
Cash and cash equivalents at end of period $ 35,289 $ 17,082
=========== ===========
Supplemental disclosures:
Interest paid $ 99,405 $ 95,657
=========== ===========
Income tax payments $ 399 $ 930
=========== ===========
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Combining Condensed Balance Sheets
(Unaudited)
(In thousands)
September 30, 1996
<TABLE>
<CAPTION>
Alamo
GUSA Affiliated
Assets Alamo DKBERT Ltd. Companies Eliminations Combined
----- ------ ---- ---------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents $ 28,406 $ 45 $ 4,866 $ 1,972 $ -- $ 35,289
Investments 59,160 -- -- -- -- 59,160
Receivables:
Trade, less allowance for
doubtful accounts of
$2,127, $-0-, $1,656 and
$114 for Alamo, DKBERT,
GUSA, Ltd., and Alamo
Affiliated Companies,
respectively 72,728 -- 26,610 1,328 -- 100,666
Vehicle 117,427 -- 23,200 978 -- 141,605
Notes, mortgages and other due from
affiliates 74,649 1,858 4,745 7,586 (83,370) 5,468
Other 7,454 273 2,332 2,604 (32) 12,631
---------- --------- --------- -------- ----------- -----------
272,258 2,131 56,887 12,496 (83,402) 260,370
---------- --------- --------- -------- ----------- -----------
Revenue earning vehicles, net 1,992,653 -- 191,741 17,189 -- 2,201,583
Property and equipment, net 78,799 132,221 3,464 1,316 -- 215,800
Other assets 81,798 2,019 18,992 851 (653) 103,007
---------- --------- --------- -------- ----------- -----------
$2,513,074 $ 136,416 $ 275,950 $ 33,824 $ (84,055) $ 2,875,209
========== ========= ========= ======== =========== ===========
Liabilities and Equity
Notes payable and lines of credit secured
by revenue earning vehicles $2,025,747 $ -- $ 208,381 $ 20,575 $ -- $ 2,254,703
Mortgages and notes payable to affiliates -- 1,666 4,283 2,232 (8,181) --
Estimated auto liability claims 122,743 -- 2,817 201 -- 125,761
Accounts payable to affiliates 4,289 -- 60,911 11,807 (73,115) 3,892
Accounts payable 119,140 1,140 16,782 2,791 (3,060) 136,793
Other debt 97,800 118,948 16,858 -- -- 233,606
Accrued expenses 45,765 2,710 2,014 1,155 (1,092) 50,552
Customer deposits 8,534 -- 736 192 -- 9,462
---------- --------- --------- -------- ----------- -----------
Total liabilities 2,424,018 124,464 312,782 38,953 (85,448) 2,814,769
---------- --------- --------- -------- ----------- -----------
Minority interest (deficiency in assets) -- -- (140) 156 (275) (259)
Equity:
Common stock 1 -- -- 4 -- 5
Additional paid-in capital 9,568 -- -- 2,102 (2,176) 9,494
Retained earnings and partners' capital 79,487 11,952 (39,007) (7,455) 3,908 48,885
Cumulative translation adjustment -- -- 2,315 64 (64) 2,315
---------- --------- --------- -------- ----------- -----------
Total equity 89,056 11,952 (36,692) (5,285) 1,668 60,699
---------- --------- --------- -------- ----------- -----------
$2,513,074 $ 136,416 $ 275,950 $ 33,824 $ (84,055) $ 2,875,209
========== ========= ========= ======== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Combining Condensed Balance Sheets
(Audited)
(In thousands)
December 31, 1995
<TABLE>
<CAPTION>
Alamo
GUSA Affiliated
Assets Alamo DKBERT Ltd. Companies Eliminations Combined
----- ------ ---- --------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
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
Cumulative 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
========== ========= ========= ======== =========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Combining Condensed Statements of Operations
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended September 30, 1996
-------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo DKBERT Ltd. Companies Eliminations Combined
----- ------ ---- --------- ------------ -------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Vehicle rentals $421,689 $ -- $ 44,279 $ 3,827 $ (115) $469,680
Interest 1,358 -- 58 3 158 1,577
Revenue from affiliates -- 4,478 23 6,225 (10,298) 428
Other -- 471 1,006 199 (244) 1,432
-------- ------- -------- -------- --------- --------
423,047 4,949 45,366 10,254 (10,499) 473,117
-------- ------- -------- -------- --------- --------
Costs and expenses:
Vehicle depreciation 118,645 -- 9,769 872 -- 129,286
Vehicle interest 34,628 -- 2,783 178 -- 37,589
Vehicle leases 7,213 -- 1,971 370 -- 9,554
Selling, general and administrative 231,626 1,861 33,299 9,600 (10,705) 265,681
Other interest 3,695 2,909 (371) 114 146 6,493
-------- ------- -------- -------- --------- --------
395,807 4,770 47,451 11,134 (10,559) 448,603
-------- ------- -------- -------- --------- --------
Net income (loss) $ 27,240 $ 179 $ (2,085) $ (880) $ 60 $ 24,514
======== ======= ======== ======== ========= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-6-
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Combining Condensed Statements of Operations
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended September 30, 1995
----------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo DKBERT Ltd. Companies Eliminations Combined
----- ------ ---- --------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Vehicle rentals $388,766 $ -- $ 37,662 $ 2,974 $ (2,973) $ 426,429
Interest 2,125 (8) 32 8 (1,467) 690
Revenue from affiliates -- 3,622 (146) 156 (3,632) --
Other -- 149 1,236 1,006 (1,587) 804
-------- -------- -------- ------- --------- ---------
390,891 3,763 38,784 4,144 (9,659) 427,923
-------- -------- -------- ------- --------- ---------
Costs and expenses:
Vehicle depreciation 109,553 -- 8,646 333 -- 118,532
Vehicle interest 32,326 -- 3,381 139 -- 35,846
Vehicle leases 19,658 -- 1,825 331 -- 21,814
Selling, general and administrative 203,499 1,767 27,948 3,840 (9,642) 227,412
Other interest 822 2,485 291 (27) (236) 3,335
Minority interest in net loss of
consolidated subsidiaries -- -- (827) -- -- (827)
-------- -------- -------- ------- --------- ---------
365,858 4,252 41,264 4,616 (9,878) 406,112
-------- -------- -------- ------- --------- ---------
Net income (loss) $ 25,033 $ (489) $ (2,480) $ (472) $ 219 $ 21,811
======== ======== ======== ======= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-7-
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Combining Condensed Statements of Operations
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1996
----------------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo DKBERT Ltd. Companies Eliminations Combined
----- ------ ---- --------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Vehicle rentals $1,054,778 $ -- $ 107,889 $ 7,969 $ (276) $ 1,170,360
Interest 6,155 -- 287 7 (2,898) 3,551
Revenue from affiliates -- 13,416 2,104 20,171 (34,638) 1,053
Other -- 793 1,252 739 -- 2,784
---------- -------- --------- -------- ----------- -----------
1,060,933 14,209 111,532 28,886 (37,812) 1,177,748
---------- -------- --------- -------- ----------- -----------
Costs and expenses:
Vehicle depreciation 305,025 -- 18,425 1,694 -- 325,144
Vehicle interest 85,339 -- 7,479 335 -- 93,153
Vehicle leases 14,328 -- 3,972 908 -- 19,208
Selling, general and administrative 625,748 5,114 89,525 27,300 (35,277) 712,410
Other interest 9,571 8,879 2,465 274 (2,910) 18,279
Minority interest in net loss of
consolidated subsidiaries -- -- (653) -- -- (653)
---------- -------- --------- -------- ----------- -----------
1,040,011 13,993 121,213 30,511 (38,187) 1,167,541
---------- -------- --------- -------- ----------- -----------
Net income (loss) $ 20,922 $ 216 $ (9,681) $ (1,625) $ 375 $ 10,207
========== ======== ========= ======== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-8-
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Combining Condensed Statements of Operations
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1995
----------------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo DKBERT Ltd. Companies Eliminations Combined
----- ------ ---- --------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Vehicle rentals $ 966,815 $ -- $ 96,312 $ 5,347 $ (2,973) $ 1,065,501
Interest 6,396 `158 91 22 (3,130) 3,537
Revenue from affiliates -- 11,800 (146) 824 (12,478) --
Other -- 468 4,472 1,439 (4,511) 1,868
--------- -------- --------- -------- ----------- -----------
973,211 12,426 100,729 7,632 (23,092) 1,070,906
--------- -------- --------- -------- ----------- -----------
Costs and expenses:
Vehicle depreciation 281,382 -- 18,458 596 -- 300,436
Vehicle interest 90,848 -- 6,062 163 -- 97,073
Vehicle leases 46,953 -- 5,091 840 -- 52,884
Selling, general and administrative 566,089 4,937 79,179 6,767 (21,698) 635,274
Other interest 2,571 7,422 706 -- (1,899) 8,800
Minority interest in net loss of
consolidated subsidiaries -- -- (1,988) -- -- (1,988)
--------- -------- --------- -------- ----------- -----------
987,843 12,359 107,508 8,366 (23,597) 1,092,479
--------- -------- --------- -------- ----------- -----------
Net income (loss) $ (14,632) $ 67 $ (6,779) $ (734) $ 505 $ (21,573)
========= ======== ========= ======== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-9-
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Combining Condensed Statements of Cash Flows
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1996
-----------------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo DKBERT Ltd. Companies Eliminations Combined
----- ------ ---- --------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
Cash flows from operating activities $ 351,115 $ (2,790) $ 2,124 $ (1,801) $ (7,149) $ 341,499
----------- -------- --------- -------- -------- -----------
Cash flows from investing activities:
Cash received from sale of revenue
earning vehicles 1,065,035 -- 208,837 7,172 -- 1,281,044
Cash paid to suppliers of revenue
earning vehicles (2,073,949) -- (280,862) (21,764) -- (2,376,575)
Sale of investments 3,466 -- -- -- -- 3,466
Capital expenditures (16,463) (2,248) (625) (293) -- (19,629)
Proceeds from sale of property and
equipment 1,123 1,959 30 -- -- 3,112
----------- -------- --------- -------- -------- -----------
Net cash used in investing
activities (1,020,788) (289) (72,620) (14,885) -- (1,108,582)
----------- -------- --------- -------- -------- -----------
Cash flows from financing activities:
Proceeds from revenue earning vehicle
financing 2,070,753 -- 333,924 22,679 -- 2,427,356
Principal payments on revenue earning
vehicle financing (1,391,657) -- (318,894) (7,332) -- (1,717,883)
Proceeds from other debt 90,000 12,500 2,029 -- -- 104,529
Principal payments on other debt (900) (2,680) (4,660) -- -- (8,240)
Advances from affiliates 848 -- 62,403 2,292 (65,543) --
Payments to affiliates (62,403) (7,149) (3,140) -- 72,692 --
Dividends and distributions (14,549) (133) -- (521) -- (15,203)
----------- -------- --------- -------- -------- -----------
Net cash provided by financing
activities 692,092 2,538 71,662 17,118 7,149 790,559
----------- -------- --------- -------- -------- -----------
Effect of exchange rate changes on cash -- -- (77) (63) -- (140)
----------- -------- --------- -------- -------- -----------
Net increase (decrease) in cash and cash
equivalents 22,419 (541) 1,089 369 -- 23,336
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 $ 28,406 $ 45 $ 4,866 $ 1,972 $ -- $ 35,289
=========== ======== ========= ======== ======== ===========
Supplemental disclosures:
Interest paid $ 82,532 $ 12,626 $ 8,231 $ 335 $ (4,319) $ 99,405
=========== ======== ========= ======== ======== ===========
Income tax payments $ 399 $ -- $ -- $ -- $ -- $ 399
=========== ======== ========= ======== ======== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
-10-
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Combining Condensed Statements of Cash Flows
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1995
--------------------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo DKBERT Ltd. Companies Eliminations Combined
----- ------ ---- --------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
Cash flows from operating activities $ 291,619 $ 3,970 $ 2,855 $ (656) $ 4,046 $ 301,834
----------- -------- --------- ------- -------- -----------
Cash flows from investing activities:
Cash received from sale of revenue
earning vehicles 1,450,104 -- 127,917 2,629 -- 1,580,650
Cash paid to suppliers of revenue
earning vehicles (1,736,356) -- (219,531) (8,678) 2,577 (1,961,988)
Sale of investments 19,496 2,756 -- -- -- 22,252
Capital expenditures (19,398) (6,171) (862) (877) 123 (27,185)
Proceeds from sale of property and
equipment 437 418 -- -- -- 855
----------- -------- --------- ------- -------- -----------
Net cash used in investing
activities (285,717) (2,997) (92,476) (6,926) 2,700 (385,416)
----------- -------- --------- ------- -------- -----------
Cash flows from financing activities:
Proceeds from revenue earning vehicle
financing 1,764,370 -- 229,609 8,853 -- 2,002,832
Principal payments on revenue earning
vehicle financing (1,765,183) -- (164,128) (4,372) -- (1,933,683)
Proceeds from other debt -- 52,812 -- 16 (16) 52,812
Principal payments on other debt (1,880) (24,181) (2,550) (6) (115) (28,732)
Advances from affiliates 25,214 4,118 32,305 3,879 (65,516) --
Payments to affiliates (25,489) (31,591) (1,423) -- 58,503 --
Dividends and distributions (8,007) (1,897) -- (1,353) (1) (11,258)
Contributions 900 -- -- 208 -- 1,108
----------- -------- --------- ------- -------- -----------
Net cash provided by (used in)
financing activities (10,075) (739) 93,813 7,225 (7,145) 83,079
----------- -------- --------- ------- -------- -----------
Effect of exchange rate changes on cash -- -- 1,463 25 399 1,887
----------- -------- --------- ------- -------- -----------
Net increase (decrease) in cash and cash
equivalents (4,173) 234 5,655 (332) -- 1,384
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 $ 2,425 $ 700 $ 12,055 $ 1,902 $ -- $ 17,082
=========== ======== ========= ======= ======== ===========
Supplemental disclosures:
Interest paid $ 83,203 $ 6,966 $ 7,270 $ 124 $ (1,906) $ 95,657
=========== ======== ========= ======= ======== ===========
Income tax payments $ 930 $ -- $ -- $ -- $ -- $ 930
=========== ======== ========= ======= ======== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-11-
<PAGE>
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-A-Car B.V. which conducts car
rental operations in The Netherlands and also
-12-
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Notes to Combined and Combining Condensed Financial Statements
Unaudited
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):
Alamo
GUSA Affiliated
Alamo Ltd. Companies Combined
----- ---- --------- --------
As of September 30, 1996
Revenue earning vehicles $ 2,228,650 $ 212,207 $ 18,383 $ 2,459,240
Less accumulated
depreciation (235,997) (20,466) (1,194) (257,657)
----------- --------- ----------- -----------
$ 1,992,653 $ 191,741 $ 17,189 $ 2,201,583
=========== ========= =========== ===========
As of December 31, 1995
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-
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Notes to Combined and Combining Condensed Financial Statements
Unaudited
(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):
September 30, December 31,
1996 1995
Alamo ---- ----
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 $ 576,995 $ 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 576,232 579,001
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
September 19, 1997; secured by eligible
vehicle collateral and vehicle
receivable balances; interest based on
market dictated commercial paper rates 246,982 236,357
Amounts under $175 million revolving
credit agreement and predecessor
agreements with termination date of
December 1, 1997; secured by eligible
vehicle collateral and vehicle
receivable balances; interest at
formulas based on prime or LIBOR at
Alamo's discretion 134,000 -
Amounts to be financed after period end
under various revolving credit
agreements 46,038 66,400
----------- -----------
Alamo subtotal 2,025,747 1,346,651
----------- -----------
-14-
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Notes to Combined and Combining Condensed Financial Statements
Unaudited
September 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; no stated expiration
dates, reviewed annually $ 167,998 $ 157,088
Amounts under deutsche mark (DM) 27.5
million credit agreement; secured by
eligible vehicle collateral and vehicle
receivable balances; interest based on
LIBOR; termination date, February 1997 17,351 -
Amounts under DM 23.0 million revolving
credit agreement with various maturity
dates; secured by eligible vehicle
collateral and certain real property;
interest ranging from 3.8% - 9.0% 13,100 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 9,932 11,341
----------- -----------
GUSA Ltd. subtotal 208,381 193,936
----------- -----------
Alamo Affiliated Companies
Amounts under Belgium franc (BEF)
155.52 million credit facility; secured
by eligible vehicle collateral; interest
at Brussels Interbank offered rate plus
110 basis points; termination date,
June 1997; guaranteed by Alamo 4,326 1,946
Amounts under Canadian dollar C$20.0 million
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 11,791 3,539
Other, including amounts to be financed
after period end, under various
revolving credit agreements 4,458 50
----------- -----------
Alamo Affiliated Companies subtotal 20,575 5,535
----------- -----------
Combined $ 2,254,703 $ 1,546,122
=========== ===========
-15-
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Notes to Combined and Combining Condensed Financial Statements
Unaudited
(4) Other Debt
Other debt consists of the following (in thousands):
September 30, December 31,
1996 1995
Alamo ---- ----
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 7,800 8,700
--------- ---------
Alamo subtotal 97,800 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 108,169 107,840
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 779 934
Other mortgages payable - 354
--------- ---------
DKBERT subtotal 118,948 109,128
--------- ---------
-16-
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Notes to Combined and Combining Condensed Financial Statements
Unaudited
September 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 $331,000, due January
1999; secured by non-vehicle equipment,
trade receivables and leasehold
improvements 3,295 $ 4,285
Amounts under Great Britain pound (GBP)
10 million 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 13,563 11,431
Note payable to minority shareholder of
combined affiliate, paid April 1996 - 3,722
--------- ---------
GUSA Ltd. subtotal 16,858 19,438
--------- ---------
Combined $ 233,606 $ 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-
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Notes to Combined and Combining Condensed Financial Statements
Unaudited
(5) Condensed Financial Information of Alamo Affiliated Companies
The following table summarizes condensed financial statements of the
Alamo Affiliated Companies (in thousands):
Balance Sheets:
<TABLE>
<CAPTION>
As of September 30, 1996
-------------------------------------------------------------------
Alamo Alamo Green GUSA Territory
Belgium Canada Corn Inc. Blue Tower Combined
------- ------ ---- ---- ---- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Cash and cash equivalents $ 955 $ 701 $ 45 $ 264 $ -- $ 7 $ 1,972
Receivables, net 722 3,235 79 1,087 4,248 3,125 12,496
Revenue earning vehicles, net 3,451 8,926 -- 4,812 -- -- 17,189
Property and equipment, net 34 1,108 -- 101 -- 73 1,316
Other assets 166 199 -- 362 107 17 851
-------- -------- ------- ------- ------ ------- --------
$ 5,328 $ 14,169 $ 124 $ 6,626 $4,355 $ 3,222 $ 33,824
======== ======== ======= ======= ====== ======= ========
Liabilities and Equity:
Notes payable and lines of credit
secured by revenue earning
vehicles $ 4,326 $ 11,791 $ -- $ 4,458 $ -- $ -- $ 20,575
Accounts payable to affiliates 845 3,253 -- 4,263 3,308 2,370 14,039
Accounts payable 462 716 -- 850 -- 763 2,791
Accrued expenses and customer
deposits 84 346 161 8 922 27 1,548
-------- -------- ------- ------- ------ ------- --------
5,717 16,106 161 9,579 4,230 3,160 38,953
-------- -------- ------- ------- ------ ------- --------
Minority interest -- -- -- 156 -- -- 156
Equity (deficit) (389) (1,937) (37) (3,109) 125 62 (5,285)
-------- -------- ------- ------- ------ ------- --------
$ 5,328 $ 14,169 $ 124 $ 6,626 $4,355 $ 3,222 $ 33,824
======== ======== ======= ======= ====== ======= ========
</TABLE>
-18-
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Notes to Combined and Combining Condensed Financial Statements
Unaudited
<TABLE>
<CAPTION>
As of December 31, 1995
------------------------------------------------------------------
Alamo Alamo Green GUSA Territory
Belgium Canada Corn Inc. Blue Tower Combined
------- ------ ---- ---- ---- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C>
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
Accounts payable 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
======= ======= ====== ======= ====== ======== ========
</TABLE>
-19-
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Notes to Combined and Combining Condensed Financial Statements
Unaudited
Statements of Operations:
<TABLE>
<CAPTION>
Three months ended September 30, 1996
-----------------------------------------------------------------
Alamo Alamo Green GUSA Territory
Belgium Canada Corn Inc. Blue Tower Combined
------- ------ ---- ---- ---- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue:
Vehicle rentals $ 508 $ 2,147 $ -- $ 1,172 $ -- $ -- $ 3,827
Revenue from affiliates 25 206 -- -- 3,610 2,384 6,225
Interest and other revenue -- -- 3 199 -- -- 202
------- ------- ------ ------- ------- ------- --------
533 2,353 3 1,371 3,610 2,384 10,254
------- ------- ------ ------- ------- ------- --------
Costs and expenses:
Vehicle depreciation 160 675 -- 37 -- -- 872
Vehicle interest 17 161 -- -- -- -- 178
Vehicle leases (6) -- -- 376 -- -- 370
Selling, general and administrative
and other interest 646 1,588 3 1,197 4,021 2,259 9,714
------- ------- ------ ------- ------- ------- --------
817 2,424 3 1,610 4,021 2,259 11,134
------- ------- ------ ------- ------- ------- --------
Net income (loss) $ (284) $ (71) $ -- $ (239) $ (411) $ 125 $ (880)
======= ======= ====== ======= ======= ======= ========
</TABLE>
<TABLE>
<CAPTION>
Three months ended September 30, 1995
-----------------------------------------------------------------
Alamo Alamo Green GUSA Territory
Belgium Canada Corn Inc. Blue Tower Combined
------- ------ ---- ---- ---- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue:
Vehicle rentals $ 560 $ 1,189 $ -- $ 1,225 $ -- $ -- $ 2,974
Revenue from affiliates -- -- (31) (171) -- 358 156
Interest and other revenue (36) -- 99 (66) -- 1,017 1,014
------- ------- ------ ------- ------- ------- --------
524 1,189 68 988 -- 1,375 4,144
------- ------- ------ ------- ------- ------- --------
Costs and expenses:
Vehicle depreciation 81 234 -- 18 -- -- 333
Vehicle interest 57 82 -- -- -- -- 139
Vehicle leases -- -- -- 331 -- -- 331
Selling, general and administrative
and other interest
419 987 -- 1,202 -- 1,205 3,813
------- ------- ------ ------- ------- ------- --------
557 1,303 -- 1,551 -- 1,205 4,616
------- ------- ------ ------- ------- ------- --------
Net income (loss) $ (33) $ (114) $ 68 $ (563) $ -- $ 170 $ (472)
======= ======= ====== ======= ======= ======= ========
</TABLE>
-20-
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Notes to Combined and Combining Condensed Financial Statements
Unaudited
<TABLE>
<CAPTION>
Nine months ended September 30, 1996
-----------------------------------------------------------------
Alamo Alamo Green GUSA Territory
Belgium Canada Corn Inc. Blue Tower Combined
------- ------ ---- ---- ---- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue:
Vehicle rentals $ 1,330 $ 3,729 $ -- $ 2,910 $ -- $ -- $ 7,969
Revenue from affiliates 111 764 (150) -- 11,674 7,772 20,171
Interest and other revenue -- -- 7 718 -- 21 746
------- ------- ------ ------- ------- ------- --------
1,441 4,493 (143) 3,628 11,674 7,793 28,886
------- ------- ------ ------- ------- ------- --------
Costs and expenses:
Vehicle depreciation 323 1,252 -- 119 -- -- 1,694
Vehicle interest 45 290 -- -- -- -- 335
Vehicle leases -- 3 -- 905 -- -- 908
Selling, general and administrative
and other interest 1,436 3,934 31 3,504 11,550 7,119 27,574
------- ------- ------ ------- ------- ------- --------
1,804 5,479 31 4,528 11,550 7,119 30,511
------- ------- ------ ------- ------- ------- --------
Net income (loss) $ (363) $ (986) $ (174) $ (900) $ 124 $ 674 $ (1,625)
======= ======= ====== ======= ======= ======= ========
</TABLE>
<TABLE>
<CAPTION>
Nine months ended September 30, 1995
-----------------------------------------------------------------
Alamo Alamo Green GUSA Territory
Belgium Canada Corn Inc. Blue Tower Combined
------- ------ ---- ---- ---- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue:
Vehicle rentals $ 1,313 $ 1,379 $ -- $ 2,655 $ -- $ -- $ 5,347
Revenue from affiliates -- -- -- -- -- 824 824
Interest and other revenue -- -- 113 298 -- 1,050 1,461
------- ------- ------ ------- ------- ------- --------
1,313 1,379 113 2,953 -- 1,874 7,632
------- ------- ------ ------- ------- ------- --------
Costs and expenses:
Vehicle depreciation 221 312 -- 63 -- -- 596
Vehicle interest 57 106 -- -- -- -- 163
Vehicle leases -- -- -- 840 -- -- 840
Selling, general and administrative
and other interest 1,100 1,447 47 2,898 -- 1,275 6,767
------- ------- ------ ------- ------- ------- --------
1,378 1,865 47 3,801 -- 1,275 8,366
------- ------- ------ ------- ------- ------- --------
Net income (loss) $ (65) $ (486) $ 66 $ (848) $ -- $ 599 $ (734)
======= ======= ====== ======= ======= ======= ========
</TABLE>
-21-
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Notes to Combined and Combining Condensed Financial Statements
Unaudited
Statements of Cash Flows:
<TABLE>
<CAPTION>
Nine months ended September 30, 1996
---------------------------------------------------------------------
Alamo Alamo Green GUSA Territory
Belgium Canada Corn Inc. Blue Tower Combined
------- ------ ---- ---- ---- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Cash flows from operating activities $ (152) $ (29) $ 1 $(1,829) $ -- $ 208 $(1,801)
------- -------- ----- ------- -------- ------- --------
Cash flows from investing activities:
Cash received from sale of revenue
earning vehicles 3,504 3,654 -- 14 -- -- 7,172
Cash paid to suppliers of revenue
earning vehicles (5,490) (11,231) -- (5,043) -- -- (21,764)
Capital expenditures (7) (198) -- (18) -- (70) (293)
------- -------- ----- ------- -------- ------- --------
Net cash used in investing
activities (1,993) (7,775) -- (5,047) -- (70) (14,885)
------- -------- ----- ------- -------- ------- --------
Cash flows from financing activities:
Proceeds from revenue earning vehicle
financing 5,319 12,782 -- 4,578 -- -- 22,679
Principal payments on revenue earning
vehicle financing (2,774) (4,558) -- -- -- -- (7,332)
Advances from affiliate -- -- -- 2,292 -- -- 2,292
Dividends and distributions -- -- (407) -- -- (114) (521)
------- -------- ----- ------- -------- ------- --------
Net cash provided by (used in)
financing activities 2,545 8,224 (407) 6,870 -- (114) 17,118
------- -------- ----- ------- -------- ------- --------
Effect of exchange rate changes on cash (42) (2) -- (19) -- -- (63)
------- -------- ----- ------- -------- ------- --------
Net increase (decrease) in cash and
cash equivalents 358 418 (406) (25) -- 24 369
Cash and cash equivalents at beginning
of period 597 283 451 289 -- (17) 1,603
------- -------- ----- ------- -------- ------- --------
Cash and cash equivalents at end of
period $ 955 $ 701 $ 45 $ 264 $ -- $ 7 $ 1,972
======= ======== ===== ======= ======== ======= ========
</TABLE>
-22-
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Notes to Combined and Combining Condensed Financial Statements
Unaudited
<TABLE>
<CAPTION>
Nine months ended September 30, 1995
--------------------------------------------------------------------
Alamo Alamo Green GUSA Territory
Belgium Canada Corn Inc. Blue Tower Combined
------- ------ ---- ---- ---- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Cash flows from operating activities $ 381 $ (572) $ 69 $ (547) $ -- $ 13 $ (656)
------- ------- ------- ------- --------- ------- -------
Cash flows from investing activities:
Cash received from sale of revenue
earning vehicles 2,545 -- -- 84 -- -- 2,629
Cash paid to suppliers of revenue
earning vehicles (3,890) (4,537) -- (251) -- -- (8,678)
Capital expenditures (18) (817) -- (42) -- -- (877)
------- ------- ------- ------- --------- ------- -------
Net cash used in investing
activities (1,363) (5,354) -- (209) -- -- (6,926)
------- ------- ------- ------- --------- ------- -------
Cash flows from financing activities:
Proceeds from revenue earning
vehicle financing 4,335 4,518 -- -- -- -- 8,853
Principal payments on revenue
earning vehicle financing (4,027) (345) -- -- -- -- (4,372)
Proceeds from other debt, net of
payments -- -- -- 10 -- -- 10
Advances from affiliates 1,311 1,604 -- 873 -- 91 3,879
Dividends and distributions -- -- (16) -- -- (1,337) (1,353)
Contributions -- 200 8 -- -- -- 208
------- ------- ------- ------- --------- ------- -------
Net cash provided by (used
in) financing activities 1,619 5,977 (8) 883 -- (1,246) 7,225
------- ------- ------- ------- --------- ------- -------
Effect of exchange rate changes on
cash 16 7 -- 2 -- -- 25
------- ------- ------- ------- --------- ------- -------
Net increase (decrease) in cash and
cash equivalents 653 58 61 129 -- (1,233) (332)
Cash and cash equivalents at
beginning of period 50 -- 429 87 -- 1,668 2,234
------- ------- ------- ------- --------- ------- -------
Cash and cash equivalents at end of
period $ 703 $ 58 $ 490 $ 216 $ -- $ 435 $ 1,902
======= ======= ======= ======= ========= ======= =======
</TABLE>
-23-
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Notes to Combined and Combining Condensed Financial Statements
Unaudited
(6) Supplemental Financial Data (in thousands):
<TABLE>
<CAPTION>
European
Operating Combined
Issuers (1) Subsidiaries(2) Eliminations Issuers
----------- --------------- ------------ -------
<S> <C> <C> <C> <C>
Balance Sheet:
September 30, 1996
Assets $ 2,626,061 $ 276,661 $ (27,513) $ 2,875,209
=========== ========= =========== ===========
Liabilities $ 2,565,330 $ 299,888 $ (50,449) $ 2,814,769
Minority interest -- (259) -- (259)
Equity 60,731 (22,968) 22,936 60,699
----------- --------- ----------- -----------
$ 2,626,061 $ 276,661 $ (27,513) $ 2,875,209
=========== ========= =========== ===========
December 31, 1995
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:
Nine months ended
September 30, 1996
Revenue $ 1,066,674 $ 114,423 $ (3,349) $ 1,177,748
Net income (loss) 23,840 (9,394) (4,239) 10,207
Cash flows from operating activities 304,736 44,157 (7,394) 341,499
September 30, 1995
Revenue $ 969,155 $ 104,033 $ (2,282) $ 1,070,906
Net income (loss) (22,837) (4,695) 5,959 (21,573)
Cash flows from operating activities 295,480 2,308 4,046 301,834
</TABLE>
(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.
-24-
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Notes to Combined and Combining Condensed Financial Statements
Unaudited
(7) Subsequent Event
On November 6, 1996, the Companies entered into a definitive agreement for
the merger or acquisition of the Companies and certain affiliated entities
by Republic Industries, Inc. The completion of the transaction, which is
valued at $625 million, is subject to customary conditions, including the
receipt of all required regulatory approvals and the obtaining of certain
consents or waivers with respect to certain outstanding indebtedness. The
transaction is expected to be accounted for under the pooling of interests
method of accounting. There is no assurance that the transaction will be
completed.
-25-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Combined Results of Operations
Revenue. Total revenue for the three months ended September 30, 1996 increased
11% to $473 million from $428 million in the same quarter of 1995. On a year to
date basis, total revenue increased $107 million, or 10%, to $1,178 million
versus $1,071 million for the same period in 1995. Revenue increases generated
by the Companies' United States rental operations accounted for approximately
71% and 82% of the increase in the third quarter and year to date periods,
respectively, as compared to 1995. 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. However, the rate of increase in rental volume experienced during
the 1996 third quarter as compared to the same quarter of 1995 was below the
rate experienced during the second quarter of 1996 versus the second quarter of
the prior year.
Costs and Expenses. Total costs and expenses for the three months ended
September 30, 1996 increased 10% to $449 million from the $406 million incurred
in the third quarter of 1995. As a percentage of total revenues, total costs and
expenses remained constant at 95% for both the third quarters of 1996 and 1995.
Total costs and expenses for the nine month period increased $75 million, or 7%,
over 1995 but declined as a percentage of revenues from 102% to 99%.
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 totaled
$176 million for both the third quarters of 1996 and 1995. On a year to date
basis, these expenses decreased $13 million or 3% compared to the first nine
months of the prior year. As a percentage of revenues, this category decreased
from over 41% in both the three and nine month periods of 1995 to 37% in 1996.
These improvements were due to various elements of the Companies' cost reduction
plan, including a less expensive fleet mix and slightly lower interest rates.
Selling, general and administrative costs increased $38 million, or 17%, for the
third quarter and $77 million, or 12%, for the nine 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 expense category increased from 53% for the third
quarter of 1995 to 56% for the same quarter of 1996. On a year-to-date basis,
selling, general and administrative expenses as a percentage of total revenues
rose from 59% in 1995 to 60% in 1996.
Other interest increased by $3.2 million and $9.5 million for the three and nine
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 $2.0 million for the
first nine months of 1995 to $653,000 for the same period in 1996. This
reduction was the 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. In addition, the limit of 1996 loss contributions of DM
960,000 per the Minority Interest Shareholder Agreement was met by the end of
the second quarter.
Net Results. As a result of the factors discussed above, the Company reported
combined net income of $24.5 million in the third quarter of 1996, a $2.7
million increase over the $21.8 million of net income reported for the 1995
third quarter, primarily attributable to Alamo. For the nine month period, 1996
net income totalled $10.2 million, a $31.8 million improvement over the same
period of 1995. The improvement in the nine-month period ended September 30,
1996 was primarily due to increased net income from Alamo of $35.6 million, over
the same period in 1995, partially offset by an increase in the net loss of
GUSA, Ltd. of $2.9 million over the same period in 1995.
-26-
<PAGE>
Capital Resources and Liquidity
Net cash provided by operating activities for the nine months ended September
30, 1996 increased $39.7 million, or 13%, to $341.5 million from $301.8 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 $1,108.6 million in the first
nine months of 1996, up $723.2 million from the $385.4 million used in the same
period of 1995. The increase was due primarily to the growth in vehicle
inventories required as a result of anticipated demand. In addition, an increase
in the average holding period of vehicle inventories contributed to the decline
in cash received from the sale of vehicles as compared to the first nine months
of 1995.
Net cash provided by financing activities for the first nine months of 1996
increased $707.5 million to $790.6 million as compared to the first nine months
of the prior year due primarily to borrowings associated with the increase in
vehicle inventories consistent with the above mentioned revenue increases. In
addition, principal payments on debt secured by revenue earning vehicles
decreased from the first nine months of 1995 as a result of the increase in the
average holding period 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 September 30, 1996, the Companies had approximately $1,809.2 million of
floating rate indebtedness, of which $325 million had interest rate protection
agreements maturing through the year 2000. 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.
At September 30, 1996, the Companies had $2,488.3 million in total indebtedness,
of which $2,254.7 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 $181.2 million of capacity available under their vehicle
financing facilities at September 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.
Recent Developments
On November 6, 1996, the Companies entered into a definitive agreement for the
merger or acquisition of the Companies and certain affiliated entities by
Republic Industries, Inc. The completion of the transaction, which is valued at
$625 million, is subject to customary conditions, including the receipt of all
required regulatory approvals and the obtaining of certain consents or waivers
with respect to certain outstanding indebtedness. The transaction is expected to
be accounted for under the pooling of interests method of accounting. There is
no assurance that the transaction will be completed.
-27-
<PAGE>
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.
Forward-Looking Statements
This report contains forward-looking statements 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.
-28-
<PAGE>
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. Assignment, Assumption and Modification Agreement, dated as
of September 20, 1996, by and among Gotham Funding
Corporation, Banner Receivables Corporation, Alamo
Rent-A-Car, Inc., The Bank of Tokyo-Mitsubishi, Ltd., New
York Branch, and Bank of Tokyo-Mitsubishi Trust Company.
27.1. Financial Data Schedule
(b) Reports on Form 8-K
Not applicable.
-29-
<PAGE>
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: November 12, 1996 By: /s/ D. Keith Cobb
----------------------------
D. Keith Cobb
Chief Executive Officer
(Duly Authorized Officer and
Principal Financial Officer)
<PAGE>
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: November 12, 1996 By: /s/ Frank A. Armstrong
----------------------------
Frank A. Armstrong
President
Dated: November 12, 1996 By: /s/ D. Keith Cobb
----------------------------
D. Keith Cobb
(Principal Financial Officer)
<PAGE>
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: November 12, 1996 By: /s/ Roger H. Ballou
----------------------------
Roger H. Ballou
Vice Chairman of the Board
(Principal Executive Officer)
Dated: November 12, 1996 By: /s/ D. Keith Cobb
----------------------------
D. Keith Cobb
Vice Chairman of the Board
(Principal Financial Officer)
<PAGE>
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: November 12, 1996 By: /s/ Michael S. Egan
----------------------------
Michael S. Egan,
a general Partner
Dated: November 12, 1996 By: /s/ D. Keith Cobb
----------------------------
D. Keith Cobb
(Principal Financial Officer)
<PAGE>
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: November 12, 1996 By: /s/ Michael S. Egan
----------------------------
Michael S. Egan,
Chairman of the Board
and President
Dated: November 12, 1996 By: /s/ D. Keith Cobb
----------------------------
D. Keith Cobb
(Principal Financial Officer)
<PAGE>
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: November 12, 1996 By: /s/ D. Keith Cobb
----------------------------
D. Keith Cobb
President
(Duly Authorized Officer and
Principal Financial Officer)
<PAGE>
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: November 12, 1996 By: /s/ D. Keith Cobb
----------------------------
D. Keith Cobb
President
(Duly Authorized Officer and
Principal Financial Officer)
<PAGE>
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: November 12, 1996 By: /s/ D. Keith Cobb
----------------------------
D. Keith Cobb
Chief Executive Officer
(Duly Authorized Officer and
Principal Financial Officer)
<PAGE>
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: November 12, 1996 By: /s/ Roger H. Ballou
----------------------------
Roger H. Ballou
President
(Duly Authorized Officer)
Dated: November 12, 1996 By: /s/ D. Keith Cobb
----------------------------
D. Keith Cobb
(Principal Financial Officer)
<PAGE>
Exhibit Index
Exhibit
Number Exhibit
------ -------
4.1. Assignment, Assumption and Modification Agreement, dated as of
September 20, 1996, by and among Gotham Funding Corporation,
Banner Receivables Corporation, Alamo Rent-A-Car, Inc., The Bank
of Tokyo-Mitsubishi, Ltd., New York Branch, and Bank of
Tokyo-Mitsubishi Trust Company.
27.1. Financial Data Schedule
EXHIBIT 4.1
EXECUTION COPY
ASSIGNMENT, ASSUMPTION AND MODIFICATION AGREEMENT
THIS ASSIGNMENT, ASSUMPTION AND MODIFICATION AGREEMENT (this "Agreement")
is made and entered into as of September 20, 1996, by and among GOTHAM FUNDING
CORPORATION (formerly known as Stellar Capital Corporation) (the "Assignor"),
BANNER RECEIVABLES CORPORATION (the "Assignee"), ALAMO RENT-A-CAR, INC., a
Florida corporation (the "Borrower"), THE BANK OF TOKYO-MITSUBISHI, LTD., NEW
YORK BRANCH ("BOTM"), as Fronting Bank, and BANK OF TOKYO-MITSUBISHI TRUST
COMPANY (BOTM Trust Company"), as Manager.
RECITALS
A. A Loan Agreement dated as of October 26, 1994 (as amended, modified
restated and supplemented from time to time, the "Loan Agreement") has been
entered into between the Borrower and the Assignor, as Lender (the "Lender").
All capitalized terms not otherwise defined herein are used herein as defined in
the Loan Agreement. Pursuant to the Loan Agreement, the Lender has agreed to
extend credit to the Borrower in an aggregate principal amount not to exceed at
any time $250,000,000 (the "Commitment"). The aggregate principal amount of
outstanding Loans under the Commitment made by the Assignor to the Borrower
pursuant to the Commitment is specified in Item 2 on Schedule 1 hereto (the
"Assignor Loans").
B. The Assignor wishes to be relieved on the Assignment Date of its
obligation to make further Loans under the Loan Agreement (with the effect that
on and after October 2, 1996 (the final Payment Date in respect of all Assignor
Loans now outstanding), all obligations to Assignor under the Loan Agreement be
repaid and Assignor have no further participation in the Loan Agreement). The
Borrower wishes to terminate its borrower relationship under the Loan Agreement
with the Assignor as soon as possible and to commence obtaining loans from the
Assignee on substantially the same terms as currently apply to Assignor Loans
under the Loan Agreement. The Assignee wishes to make loans to the Borrower on
substantially the same terms as currently apply to Assignor Loans under the Loan
Agreement.
C. The above could be accomplished by the Borrower terminating the Loan
Agreement and entering into a new loan agreement (with substantially the same
terms as the Loan Agreement) with the Assignee. For convenience and efficiency
only, the parties have determined to accomplish the substantive result described
in the preceding sentence by entering into this Agreement.
On the basis of valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties agree as follows:
Section 1. Assignment. Subject to the terms and conditions set forth
herein, the Assignor hereby sells and assigns without recourse to the Assignee,
and the Assignee purchases and assumes from the Assignor, on the date first set
forth above (the "Assignment Date"), all rights and obligations of the Assignor
under the Loan Agreement with respect to the Commitment. Assignor's rights and
obligations with respect to the Assignor Loans are not being assigned to the
Assignee.
<PAGE>
Section 2. Consent and Undertaking. The Borrower hereby consents to the
assignment made herein, and without limiting any other obligation of the
Borrower hereunder, undertakes to provide a new Loan Note to the Assignee,
reflecting the amount of the Commitment.
Section 3. Representations and Warranties.
(a) Each of the Assignor and the Assignee represents and warrants to
the other that (i) it has full power and legal right to execute and deliver
this Agreement and to perform the provisions of this Agreement; (ii) the
execution, delivery and performance of this Agreement have been duly
authorized by all action, corporate or otherwise, and do not violate any
provisions of its charter or by-laws or any contractual obligations or
requirement of law binding on it; and (iii) this Agreement constitutes its
legal, valid and binding obligation, enforceable against it in accordance
with its terms subject, as to enforcement of remedies, to the following
qualifications: (1) an order of specific performance and an injunction are
discretionary remedies and, in particular, may not be available where
damages are considered an adequate remedy at law, and (2) enforcement may
be limited by bankruptcy, insolvency, liquidation, reorganization,
reconstruction and other similar laws affecting enforcement of creditors'
rights generally (insofar as any such law relates to the bankruptcy,
insolvency or similar event of the party against whom enforcement is
sought).
(b) The Borrower hereby confirms that each of its representations and
warranties made in the Loan Agreement are true and correct, on and as of
the Assignment Date, as if made on and as of such date.
(c) The Assignor and the Borrower each hereby represent and warrant
that the principal amounts and Payment Dates of each of the Assignor Loans
are as specified in Item 2 of Schedule 1 hereto.
Section 4. Condition Precedent. The obligations of the Assignor and the
Assignee hereunder shall be subject to (i) the execution and delivery by the
Manager of an Adoption Agreement with respect to Assignee's participation in the
Loan Agreement; (ii) the execution and delivery by the Collateral Agent of an
Approval of Loan Agreement under the Security Agreement with respect to
Assignee's participation in the Loan Agreement; (iii) receipt by the Assignee of
its Loan Note, appropriately completed and duly executed by the Borrower; (iv)
receipt by the Assignee of an opinion of Tripp, Scott, Conklin & Smith
acceptable to the Assignee; and (v) receipt by the Assignee of a litigation
certificate from the Borrower acceptable to the Assignee.
Section 5. Notice of Assignment. The Assignor and the Assignee hereby
instruct the Borrower to make payments (i) with respect to the Assignor Loans to
the Assignor in accordance with the Loan Agreement and (ii) with respect to the
Loans made by the Assignee pursuant to the Commitment to the Assignee in
accordance with the Loan Agreement. The Assignee's address for notices pursuant
to Section 11.1 of the Loan Agreement is specified in Item 3 on Schedule 1
hereto. From and after the Assignment Date, the Assignee shall be deemed to be a
party to the Loan Agreement and, to the extent that rights and obligations
thereunder shall have been assigned to Assignee as provided herein, shall have
the rights and obligations of the Lender under the Loan Agreement. From and
after the Assignment Date, (a) all interest, principal, fees and other amounts
that would otherwise be payable to the Assignor in respect of the Commitment
(other than in respect of the Assignor Loans) shall be paid to the Assignee, and
(b) if the Assignor receives any payment on account of the Commitment (other
than in respect of the Assignor Loans), the Assignor shall promptly deliver such
payment to the Assignee. Likewise, in the
2
<PAGE>
event the Assignee receives any payment on account of interest, principal, fees
or other amounts relating to the Assignor Loans, the Assignee shall promptly
deliver such payment to the Assignor. The Assignee agrees to deliver to the
Borrower such Internal Revenue Service forms as may be required to establish
that the Assignee is entitled to receive payments under the Loan Agreement
without deduction or withholding of tax.
Section 6. Independent Investigation. The Assignee acknowledges that it is
purchasing the Commitment from the Assignor totally without recourse and, except
as provided in Section 3 hereof, without representation or warranty. The
Assignee further acknowledges that it has made its own independent investigation
and credit evaluation of the Borrower in connection with its purchase of the
Commitment. Except for the representations or warranties set forth in Section 3,
the Assignee acknowledges that it is not relying on any representation or
warranty of the Assignor, expressed or implied, including without limitation,
any representation or warranty relating to the legality, validity, genuineness,
enforceability, collectability, interest rate, repayment schedule or accrual
status of the Commitment, the legality, validity, genuineness or enforceability
of the Loan Agreement, the Loan Note, or any other Loan Document referred to in
or delivered pursuant to the Loan Agreement, or financial condition or
creditworthiness of the Borrower. The Assignor has not and will not be acting as
either the representative, agent or trustee of the Assignee with respect to
matters arising out of or relating to the Loan Agreement or this Agreement. From
and after the Assignment Date, the Assignor shall have no rights or obligations
with respect to the Commitment.
Section 7. Other Collateral and Other Transactions. The Assignee shall have
no interest in any property in the Assignor's possession or control, or in any
deposit held or other indebtedness owing by the Assignor, which may be or become
collateral for or otherwise available for payment of the Assignor Loans by
reason of the general description of secured obligations contained in any
security agreement or other agreement or instrument held by the Assignor or by
reason of the right of setoff, counterclaim or otherwise. The Assignor and its
affiliates may accept deposits from, lend money to, act as trustee under
indentures for and generally engage in any kind of business with the Borrower,
and any person who may do business with or own securities of the Borrower, or
any Affiliate of the Borrower. The Assignee shall have no interest in any
property taken as security for any other loans or any other credits extended to
the Borrower by the Assignor.
Section 8. Amendments to Section 1.1 of the Loan Agreement. Section 1.1 of
the Loan Agreement is hereby amended as follows:
(a) On the Assignment Date, references to Collateral Agreement,
Commercial Paper, Issuing Agent, Issuing Agreement, Lender, Letter
Agreement, Liquidity Agreement, Loan Note, Management Agreement, Manager
and Participation Agreement shall be deemed to include the following
defined terms. On the date of repayment of the Assignor Loans, references
to Collateral Agreement, Commercial Paper, Issuing Agent, Issuing
Agreement, Lender, Letter Agreement, Liquidity Agreement, Loan Note,
Management Agreement, Manager and Participation Agreement shall be deemed
deleted in their entirety and replaced by the following defined terms.
During the period that Loans are outstanding from both the Assignor and the
Assignee, the claims of the Assignor and the Assignee against the Borrower
(and against the collateral under the Security Agreement) shall, except as
provided in Section 12 hereof, be pari passu.
----------
3
<PAGE>
"Collateral Agreement" shall mean the Security Agreement dated as
of April 23, 1993 by and between the Lender and the Manager, as such
agreement has been and may be further amended, supplemented or
otherwise modified from time to time.
"Commercial Paper" shall have the meaning ascribed to "Commercial
Paper Notes" in the Issuing Agreement.
"Issuing Agent" shall mean the person serving as issuing and
paying agent and depositary under the Issuing Agreement.
"Issuing Agreement" shall mean the Depositary Agreement dated as
of April 23, 1993 between the Lender and the Manager, as Issuing
Agent, as such agreement has been and may be further amended,
supplemented or otherwise modified from time to time.
"Lender" shall mean Banner Receivables Corporation and its
successors and assigns.
"Letter Agreement" shall mean the Letter Agreement dated as of
September 20, 1996 between the Lender and the Borrower specifying
certain fees payable by the Borrower to the Lender and the applicable
margin.
"Liquidity Agreement" shall mean the Liquidity Agreement dated as
of September 20, 1996 between the Lender, as borrower, The Bank of
Tokyo-Mitsubishi, Ltd., New York Branch, as agent, Bank of
Tokyo-Mitsubishi Trust Company, as liquidity agent, Bank of
Tokyo-Mitsubishi Trust Company, as program administrator, and the
banks panty thereto, as such agreement may be amended, supplemented or
otherwise modified from time to time.
"Loan Note" shall mean the Loan Note delivered to Banner
Receivables Corporation ("Banner") pursuant hereto and to the
Assignment, Assumption and Modification Agreement, dated as of
September 20, 1996, among the Borrower, Banner, Gotham Funding
Corporation (formerly known as Stellar Capital Corporation), The Bank
of Tokyo-Mitsubishi, Ltd., New York Branch and Bank of
Tokyo-Mitsubishi Trust Company.
"Management Agreement" shall mean the Program Administration
Agreement dated as of September 20, 1996, between the Manager and the
Lender as such agreement has been and may be further amended,
supplemented or otherwise modified from time to time.
"Manager" shall mean Bank of Tokyo-Mitsubishi Trust Company, in
its capacity as Program Administrator under the Management Agreement
and its successors in such capacity.
"Participation Agreement" shall mean the Master Participation
Agreement dated September 20, 1996 between The Bank of
Tokyo-Mitsubishi, Ltd., New York Branch and the other Liquidity
Lenders, as such agreement shall be amended, supplemented or otherwise
modified from time to time.
4
<PAGE>
(b) References in the Loan Agreement and the Loan Documents to "The
Bank of Tokyo, Ltd." shall refer to "The Bank of Tokyo-Mitsubishi, Ltd.,";
and references therein to "The Bank of Tokyo Trust Company" shall refer to
"Bank of Tokyo-Mitsubishi Trust Company."
(C) The definition of "Notice of Increase" and all references thereto
are hereby deleted in their entirety on the date of repayment of the
Assignor Loans.
Section 9. Amendment to Section 2.19 of the Loan Agreement. Section 2.19 of
the Loan Agreement is hereby amended by deleting the reference to "ninety (90)
days" in the first line thereof and replacing it with "sixty (60) days".
Section 10. Amendment to Section 11.4 of the Loan Agreement. Section
11.4(b) of the Loan Agreement is hereby amended to read in its entirety as
follows:
The Lender may not assign any of its rights or obligations hereunder or
under the Loan Note or under the other Loan Documents without the consent
of the Borrower; provided, that, the Lender shall assign such rights to the
--------
Manager (in its capacity as collateral agent thereunder) pursuant to the
Collateral Agreement and, pursuant to the provisions of the Collateral
Agreement, the Manager (in its capacity as collateral agent thereunder) may
further assign the same; and provided, further, that, upon the request of
-----------------
the Required Lenders under the Liquidity Agreement at any time following
the occurrence and during the continuance of an Event of Default, the
Lender shall assign all of its rights and interests under the Loan
Agreement, the Loan Documents and the Loan Note to The Bank of
Tokyo-Mitsubishi, Ltd., New York Branch.
Section 11. Extension of Termination Date. In accordance with the terms and
provisions of Section 2.19 of the Loan Agreement, the Borrower and the Lender
agree that the Termination Date is hereby extended to September 19, 1997.
Section 12. Repayment of Assignor Loans. So long as no Default or Event of
Default shall occur and be continuing under the Loan Agreement, all payments of
principal and interest required to be made or made under the Loan Agreement
shall be applied first to the Assignor Loans. If a Default or Event of Default
shall occur and be continuing under the Loan Agreement, the Assignor and
Assignee shall be entitled to exercise all rights against the Borrower afforded
in the Loan Agreement or any other Loan Document or otherwise provided by law as
if their interests in the Loan Agreement were separate Credit Agreements for
purposes of the Security Agreement. Upon the payment in full of the Assignor
Loans, all rights of the Assignor (except for rights to indemnification or costs
under Article X or Section 11.12 of the Loan Agreement) under the Loan Agreement
shall be automatically transferred to, and become exercisable solely by, the
Assignee. Following repayment of the Assignor Loans, (i) the Manager shall
cancel and terminate the Collateral Agreement dated as of October 26, 1994 with
respect to Assignor's interest under the Loan Agreement, and all UCC financing
statements filed in respect thereof, (ii) Assignor shall cancel and return to
the Borrower Assignor's Loan Note, (iii) the Assignor shall terminate the
portion of its Liquidity Agreement currently allocated to the Loan Agreement,
(iv) The Bank of Tokyo-Mitsubishi, Ltd. shall cancel the Master Participation
Agreement dated as of October 26, 1994 and (v) the Manager, the Assignor, the
Borrower and the Assignee shall take such other action as is appropriate to
evidence the aforesaid repayment and the termination of the Assignor's
participation in the Loan Agreement.
5
<PAGE>
Section 13. Effect on Related Agreements on the Assignment Date and
Thereafter Until Payment of Assignor Loans.
(a) On the Assignment Date, the undrawn portion of the Alamo Related
Commitment under the Gotham Liquidity Agreement (the "Gotham Liquidity
Commitment") shall automatically be reduced to equal the Face Value (as
defined therein) of all then outstanding Alamo Related Commercial Paper.
(b) During the period from the Assignment Date until the payment of
the Assignor Loans (the "Interim Period") simultaneously with each
repayment of an Assignor Loan, the Gotham Liquidity Commitment shall
automatically be reduced by an amount equal to the Face Value of the Alamo
Related Commercial Paper formerly funding such Loan.
Section 14. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of the Assignor and
the Assignee.
Section 15. Method of Payment. All payments to be made by either panty
hereunder shall be in funds available at the place of payment on the same day
and shall be made by wire transfer to the account designated by the party to
receive payment.
Section 16. Integration. This Agreement shall supersede any prior agreement
or understanding between the parties (other than the Loan Agreement or the other
Loan Documents) as to the subject matter hereof. This Agreement shall be deemed
to be a Loan Document for all purposes under the Loan Agreement and the other
Loan Documents. The Assignee hereby makes each of the consents and agreements
required of it pursuant to Section 9.5 of the Loan Agreement.
Section 17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and shall be
binding upon both parties, their successors and assigns.
Section 18. Effect on Loan Agreement and Loan Documents. Any references or
provisions in the Loan Agreement or the Loan Documents which are inconsistent
with the provisions of this Agreement are hereby amended to be consistent with
the provisions of this Agreement. Except as amended or supplemented hereby, the
Loan Agreement and the Loan Documents each remain in full force and effect and
are each hereby ratified and approved in all respects.
Section 19. Lender Representative. The Assignee hereby irrevocably appoints
and authorizes, and hereby agrees that it will require any transferee of any of
its interest in its Loans and in its Loan Note irrevocably to appoint and
authorize, the Manager as its Lender Representative under the Security Agreement
to take such actions as its representative on its behalf and to exercise such
powers under the Loan Agreement as are delegated by the terms of the Loan
Agreement and the Security Agreement, together with such powers as are
reasonably incidental thereto, which shall include, but need not be limited to,
the voting of each Lender's Voting Obligations (as defined in the Security
Agreement) in accordance with the instructions of the Assignee in connection
with any matter requiring a vote of the Assignee, the execution of any Adoption
Agreement on behalf of such Lender and the execution of any Collateral Pool
Description Addendum; provided that the Lender Representative shall not instruct
the Collateral Agent to act except in compliance with the instructions of the
Borrower and the Lenders or under the terms and conditions of the Loan
Agreement.
6
<PAGE>
Section 20. References. From and after the Assignment Date, all references
to the Loan Agreement shall be deemed to be references to the Loan Agreement as
amended by this Agreement.
Section 21. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO ITS CONFLICTS OF LAW PRINCIPLES.
Section 22. Nonpetition Covenants.
(a) Notwithstanding any prior termination of this Agreement, neither
the Assignee, nor the Borrower, nor the Fronting Bank nor the Manager shall
themselves (or join with others to), prior to the date which is one year
and one day after the maturity of the last maturing Commercial Paper note
issued by the Assignor, acquiesce, petition or otherwise, directly or
indirectly, invoke or cause the Assignor to invoke the process of any
governmental authority for the purpose of commencing or sustaining a case
against the Assignor under any Federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Assignor or any
substantial part of its property or ordering the winding up or liquidation
of the affairs of the Assignor.
(b) Notwithstanding any prior termination of this Agreement, neither
the Assignor, nor the Borrower, nor the Fronting Bank nor the Manager shall
themselves (or join with others to), prior to the date which is one year
and one day after the maturity of the last maturing Commercial Paper note
issued by the Assignee, acquiesce, petition or otherwise, directly or
indirectly, invoke or cause the Assignee to invoke the process of any
governmental authority for the purpose of commencing or sustaining a case
against the Assignee under any Federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Assignee or any
substantial part of its property or ordering the winding up or liquidation
of the affairs of the Assignee.
[Remainder of page intentionally left blank]
7
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused it to be executed, all as of the day and year first above written.
GOTHAM FUNDING CORPORATION
(formerly known as Stellar
Capital Corporation)
By /S/ Tiffany Percival
------------------------------
Name TIFFANY PERCIVAL
Title Vice President
BANNER RECEIVABLES CORPORATION
By [ILLEGIBLE]
------------------------------
Name ________________________
Title ________________________
"BORROWER"
ALAMO RENT-A-CAR, INC.,
a Florida corporation
By /S/ N. Maria Menendez
------------------------------
N. Maria Menendez
Treasurer
8
<PAGE>
The Fronting Bank under the Liquidity Agreement with Stellar Capital
Corporation dated April 1, 1994 and the Liquidity Agreement with Banner
Receivables Corporation dated September 20, 1996 hereby agrees, accepts and
consents to the foregoing Assignment, Assumption and Modification Agreement.
"FRONTING BANK"
THE BANK OF TOKYO-MITSUBISHI, LTD.,
NEW YORK BRANCH
By [ILLEGIBLE]
------------------------------
Name ________________________
Title ________________________
Bank of Tokyo-Mitsubishi Trust Company, as Manager under the Management
Agreement and pledgor under a Collateral Agreement dated as of October 26, 1994
hereby agrees, accepts and consents to the foregoing Assignment, Assumption and
Modification Agreement.
"MANAGER"
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY
By [ILLEGIBLE]
--------------------------------
Name ________________________
Title ________________________
NationsBank, N.A. (South), as Collateral Agent, hereby consents to the
foregoing Assignment, Assumption and Modification Agreement.
NATIONSBANK, N.A. (SOUTH),
as Collateral Agent
By _________________________________
Richard M. Starke
Vice President
9
<PAGE>
The Fronting Bank under the Liquidity Agreement with Stellar Capital
Corporation dated April 1, 1994 and the Liquidity Agreement with Banner
Receivables Corporation dated September 20, 1996 hereby agrees, accepts and
consents to the foregoing Assignment, Assumption and Modification Agreement.
"FRONTING BANK"
THE BANK OF TOKYO-MITSUBISHI, LTD.,
NEW YORK BRANCH
By ________________________________
Name ________________________
Title ________________________
Bank of Tokyo-Mitsubishi Trust Company, as Manager under the Management
Agreement and pledgor under a Collateral Agreement dated as of October 26, 1994
hereby agrees, accepts and consents to the foregoing Assignment, Assumption and
Modification Agreement.
"MANAGER"
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY
By ________________________________
Name ________________________
Title ________________________
NationsBank, N.A. (South), as Collateral Agent, hereby consents to the
foregoing Assignment, Assumption and Modification Agreement.
NATIONSBANK, N.A. (SOUTH),
as Collateral Agent
By /S/Richard M. Starke
------------------------------
Richard M. Starke
Vice President
9
<PAGE>
SCHEDULE 1
TO
ASSIGNMENT, ASSUMPTION AND MODIFICATION AGREEMENT
Loan Agreement
Between Alamo Rent-A-Car, Inc., as borrower
and Banner Receivables Corporation,
as Lender
dated as of October 26, 1994
Item 1. Commitment $250,000,000
Item 2. Assignor Loans Outstanding $250,000,000
consisting of:
Maturity Date CP Face Amount
------------- --------------
10/01/96 $45,000,000.00
09/26/96 $60,000,000.00
09/25/96 $35,000,000.00
10/02/96 $50,000,000.00
10/01/96 $20,000,000.00
09/23/96 $40,000,000.00
Item 3. See Exhibit A to
Schedule I for Assignee
notice information
under Loan Agreement
10
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001004941
<NAME> ALAMO RENT-A-CAR, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-Mos
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-END> Sep-30-1996
<CASH> 35,289
<SECURITIES> 59,160
<RECEIVABLES> 264,267
<ALLOWANCES> (3,897)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 334,961
<DEPRECIATION> (119,161)
<TOTAL-ASSETS> 2,875,209
<CURRENT-LIABILITIES> 0
<BONDS> 2,488,309
0
0
<COMMON> 5
<OTHER-SE> 60,694
<TOTAL-LIABILITY-AND-EQUITY> 2,875,209
<SALES> 0
<TOTAL-REVENUES> 1,177,748
<CGS> 0
<TOTAL-COSTS> 344,352
<OTHER-EXPENSES> 709,295
<LOSS-PROVISION> 2,462
<INTEREST-EXPENSE> 111,432
<INCOME-PRETAX> 12,107
<INCOME-TAX> 1,900
<INCOME-CONTINUING> 10,207
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,207
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
