UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 12 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 33-80271
ALAMO RENT-A-CAR, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 59-1465528
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification
no.)
110 Tower, 110 S.E. 6th Street
Fort Lauderdale, Florida 33301
(Address of principal executive (Zip code)
offices)
(954) 522-0000
(Registrant's telephone number, including area code)
See Table of Co-Registrants Below.
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
---- ----
As of August 1, 1996, each corporate registrant had outstanding 980 shares of
common stock, par value $1.00 per share, except for Green Corn, Inc. which had
326.67 shares of common stock, par value $0.10 per share.
<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 June 30, 1996
PART I FINANCIAL INFORMATION PAGE
- ------ --------------------- ----
Item 1. Financial Statements
Combined Condensed Financial Statements:
Balance Sheets - June 30, 1996 and December 31, 1995 1
Statements of Operations - Three and Six Months
Ended June 30, 1996 and 1995 2
Statements of Cash Flows - Six Months ended June
30, 1996 and 1995 3
Combining Condensed Financial Statements:
Balance Sheets - June 30, 1996 and December 31, 1995 4
Statements of Operations - Three Months ended June
30, 1996 and 1995 6
Statements of Operations - Six Months ended June
30, 1996 and 1995 8
Statements of Cash Flows - Six Months Ended June
30, 1996 and 1995 10
Notes to Combined and Combining Condensed Financial
Statements 12
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 24
PART II OTHER INFORMATION
Item 1. Legal Proceedings 27
Item 2. Changes in Securities 27
Item 3. Defaults upon Senior Securities 27
Item 4. Submission of Matters to a Vote of Security Holders 27
Item 5. Other Information 27
Item 6. Exhibits and Reports on Form 8-K 27
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Combined Condensed Balance Sheets
(In thousands)
June 30, December 31,
Assets 1996 1995
------ ----------- ----------
(Unaudited) (Audited)
Cash and cash equivalents $ 18,436 $ 11,953
Investments 90,575 62,626
Receivables:
Trade, less allowance for
doubtful accounts of $4,177
and $5,214 in 1996 and 1995,
respectively 89,071 67,418
Vehicle 52,520 94,408
Notes, mortgages and other due
from affiliates 4,705 2,409
Other 12,634 7,775
----------- ----------
158,930 172,010
----------- ----------
Revenue earning vehicles, net 2,260,248 1,478,409
Property and equipment, net 212,758 213,985
Other assets 69,038 61,762
----------- ----------
$ 2,809,985 $2,000,745
=========== ==========
Liabilities and Equity
----------------------
Notes payable and lines of credit
secured by revenue earning vehicles $ 2,228,279 $1,546,122
Estimated auto liability claims 122,282 112,448
Accounts payable to affiliates 4,448 1,677
Accounts payable 138,450 116,374
Other debt 236,649 137,266
Accrued expenses 23,071 11,050
Customer deposits 16,573 9,843
----------- ----------
Total liabilities 2,769,752 1,934,780
----------- ----------
Minority interest (deficiency in assets) (260) --
Equity:
Common stock 5 5
Additional paid-in capital 9,529 9,494
Retained earnings and partners' capital 28,704 53,881
Translation adjustment 2,255 2,585
----------- ----------
Total equity 40,493 65,965
----------- ----------
$ 2,809,985 $2,000,745
=========== ==========
The accompanying notes are an integral part of these financial statements.
-1-
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Combined Condensed Statements of Operations
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenue:
Vehicle rentals $ 377,345 $ 337,922 $ 701,130 $ 637,649
Interest 1,022 1,245 1,974 2,847
Revenue from affiliates 17 -- 694 --
Other 135 1,528 833 2,487
--------- --------- --------- ---------
378,519 340,695 704,631 642,983
--------- --------- --------- ---------
Costs and expenses:
Vehicle depreciation 106,540 95,688 195,858 181,904
Vehicle interest 28,925 31,190 55,564 61,227
Vehicle leases 5,230 19,156 9,654 31,070
Selling, general and administrative 232,543 206,378 446,729 407,862
Other interest 7,453 2,733 11,786 5,465
Minority interest in net loss of consolidated subsidiaries (194) (398) (653) (1,161)
--------- --------- --------- ---------
380,497 354,747 718,938 686,367
--------- --------- --------- ---------
Net loss $ (1,978) $ (14,052) $ (14,307) $ (43,384)
========= ========= ========= =========
</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)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------------------------
1996 1995
----------- -----------
<S> <C> <C>
Cash flows from operating activities $ 205,106 $ 149,385
----------- -----------
Cash flows from investing activities:
Cash received from sale of revenue earning vehicles 850,177 1,267,890
Cash paid to suppliers of revenue earning vehicles (1,784,350) (1,639,431)
(Purchase) sale of investments (27,949) 23,944
Capital expenditures (10,524) (18,979)
Proceeds from sale of property and equipment 1,398 753
----------- -----------
Net cash used in investing activities (971,248) (365,823)
----------- -----------
Cash flows from financing activities:
Proceeds from revenue earning vehicle financing 1,739,139 1,639,919
Principal payments on revenue earning vehicle financing (1,054,748) (1,447,191)
Proceeds from other debt 106,313 56,270
Principal payments on other debt (6,907) (29,675)
Dividends and distributions (10,870) (8,925)
Contributions -- 1,113
----------- -----------
Net cash provided by financing activities 772,927 211,511
----------- -----------
Effect of exchange rate changes on cash (302) 272
----------- -----------
Net increase (decrease) in cash and cash equivalents 6,483 (4,655)
Cash and cash equivalents at beginning of period 11,953 15,698
----------- -----------
Cash and cash equivalents at end of period $ 18,436 $ 11,043
=========== ===========
Supplemental disclosures:
Interest paid $ 63,263 $ 66,571
=========== ===========
Income tax payments $ -- $ 256
=========== ===========
</TABLE>
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)
June 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 $ 5,113 $ 1,156 $ 11,100 $ 1,067 $ -- $ 18,436
Investments 90,575 -- -- -- -- 90,575
Receivables:
Trade, less allowance for doubtful
accounts of $1,522, $-0-, $2,514
and $141 for Alamo, DKBERT,
GUSA, Ltd., and Alamo
Affiliated Companies,
respectively 63,137 -- 24,171 1,763 -- 89,071
Vehicle 34,079 -- 18,253 188 -- 52,520
Notes, mortgages and other due from
affiliates 75,515 780 5,457 7,527 (84,574) 4,705
Other 11,430 321 408 535 (60) 12,634
---------- --------- --------- -------- ----------- -----------
184,161 1,101 48,289 10,013 (84,634) 158,930
---------- --------- --------- -------- ----------- -----------
Revenue earning vehicles, net 2,056,780 -- 188,792 14,676 -- 2,260,248
Property and equipment, net 73,224 134,754 3,503 1,277 -- 212,758
Other assets 46,945 2,066 19,366 1,414 (753) 69,038
---------- --------- --------- -------- ----------- -----------
$2,456,798 $ 139,077 $ 271,050 $ 28,447 $ (85,387) $ 2,809,985
========== ========= ========= ======== =========== ===========
Liabilities and Equity
Notes payable and lines of credit secured
by revenue earning vehicles $2,015,446 $ -- $ 198,102 $ 14,731 $ -- $ 2,228,279
Mortgages and notes payable to affiliates -- 2,918 5,732 -- (8,650) --
Estimated auto liability claims 120,320 -- 1,859 103 -- 122,282
Accounts payable to affiliates 3,681 944 62,322 14,523 (77,022) 4,448
Accounts payable 115,976 2,105 17,525 2,844 -- 138,450
Other debt 98,100 119,668 18,881 -- -- 236,649
Accrued expenses 21,175 1,669 -- 247 (20) 23,071
Customer deposits 15,951 -- 1,455 259 (1,092) 16,573
---------- --------- --------- -------- ----------- -----------
Total liabilities 2,390,649 127,304 305,876 32,707 (86,784) 2,769,752
---------- --------- --------- -------- ----------- -----------
Minority interest (deficiency in assets) -- -- (140) 155 (275) (260)
Equity:
Common stock 1 -- -- 4 -- 5
Additional paid-in capital 9,568 -- -- 2,137 (2,176) 9,529
Retained earnings and partners' capital 56,580 11,773 (36,922) (6,575) 3,848 28,704
Translation adjustment -- -- 2,236 19 -- 2,255
---------- --------- --------- -------- ----------- -----------
Total equity 66,149 11,773 (34,686) (4,415) 1,672 40,493
---------- --------- --------- -------- ----------- -----------
$2,456,798 $ 139,077 $ 271,050 $ 28,447 $ (85,387) $ 2,809,985
========== ========= ========= ======== =========== ===========
</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
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 June 30, 1996
--------------------------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo DKBERT Ltd. Companies Eliminations Combined
--------- ------- -------- ---------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Vehicle rentals $ 339,172 $ -- $ 35,235 $ 2,496 $ 442 $ 377,345
Interest 2,492 -- 171 1 (1,642) 1,022
Revenue from affiliates -- 4,529 645 7,840 (12,997) 17
Other -- 135 (194) (50) 244 135
--------- ------- -------- -------- --------- ---------
341,664 4,664 35,857 10,287 (13,953) 378,519
--------- ------- -------- -------- --------- ---------
Costs and expenses:
Vehicle depreciation 101,045 -- 5,023 472 -- 106,540
Vehicle interest 26,441 -- 2,398 86 -- 28,925
Vehicle leases 3,904 -- 982 344 -- 5,230
Selling, general and administrative 206,575 1,515 27,980 8,981 (12,508) 232,543
Other interest 4,352 3,049 1,694 86 (1,728) 7,453
Minority interest in net loss of
consolidated subsidiaries -- -- (194) -- -- (194)
--------- ------- -------- -------- --------- ---------
342,317 4,564 37,883 9,969 (14,236) 380,497
--------- ------- -------- -------- --------- ---------
Net income (loss) $ (653) $ 100 $ (2,026) $ 318 $ 283 $ (1,978)
========= ======= ======== ======== ========= =========
</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 June 30, 1995
-----------------------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo DKBERT Ltd. Companies Eliminations Combined
----- ------ ---- --------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Vehicle rentals $ 304,344 $ -- $ 31,895 $ 1,683 $ -- $ 337,922
Interest 1,934 67 31 (6) (781) 1,245
Revenue from affiliates -- 4,057 -- 464 (4,521) --
Other -- 157 2,901 247 (1,777) 1,528
--------- ------- -------- ------- --------- ---------
306,278 4,281 34,827 2,388 (7,079) 340,695
--------- ------- -------- ------- --------- ---------
Costs and expenses:
Vehicle depreciation 89,741 -- 5,744 203 -- 95,688
Vehicle interest 29,492 -- 1,687 11 -- 31,190
Vehicle leases 17,022 -- 1,808 326 -- 19,156
Selling, general and administrative 183,520 1,521 26,780 1,857 (7,300) 206,378
Other interest 901 2,419 167 27 (781) 2,733
Minority interest in net loss of
consolidated subsidiaries -- -- (398) -- -- (398)
--------- ------- -------- ------- --------- ---------
320,676 3,940 35,788 2,424 (8,081) 354,747
--------- ------- -------- ------- --------- ---------
Net income (loss) $ (14,398) $ 341 $ (961) $ (36) $ 1,002 $ (14,052)
========= ======= ======== ======= ========= =========
</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>
Six Months Ended June 30, 1996
--------------------------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo DKBERT Ltd. Companies Eliminations Combined
--------- ------- -------- -------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Vehicle rentals $ 633,089 $ -- $ 64,060 $ 4,142 $ (161) $ 701,130
Interest 4,797 -- 229 4 (3,056) 1,974
Revenue from affiliates -- 8,938 1,631 14,465 (24,340) 694
Other -- 322 246 21 244 833
--------- ------- -------- -------- --------- ---------
637,886 9,260 66,166 18,632 (27,313) 704,631
--------- ------- -------- -------- --------- ---------
Costs and expenses:
Vehicle depreciation 186,380 -- 8,656 822 -- 195,858
Vehicle interest 50,711 -- 4,696 157 -- 55,564
Vehicle leases 7,115 -- 2,001 538 -- 9,654
Selling, general and administrative 394,122 3,253 56,226 17,700 (24,572) 446,729
Other interest 5,876 5,970 2,836 160 (3,056) 11,786
Minority interest in net loss of
consolidated subsidiaries -- -- (653) -- -- (653)
--------- ------- -------- -------- --------- ---------
644,204 9,223 73,762 19,377 (27,628) 718,938
--------- ------- -------- -------- --------- ---------
Net income (loss) $ (6,318) $ 37 $ (7,596) $ (745) $ 315 $ (14,307)
========= ======= ======== ======== ========= =========
</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>
Six Months Ended June 30, 1995
-------------------------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo DKBERT Ltd. Companies Eliminations Combined
--------- ------- -------- -------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Vehicle rentals $ 578,049 $ -- $ 57,227 $ 2,373 $ -- $ 637,649
Interest 4,271 166 59 14 (1,663) 2,847
Revenue from affiliates -- 8,178 -- 668 (8,846) --
Other -- 319 4,659 433 (2,924) 2,487
--------- ------- -------- -------- --------- ---------
582,320 8,663 61,945 3,488 (13,433) 642,983
--------- ------- -------- -------- --------- ---------
Costs and expenses:
Vehicle depreciation 171,829 -- 9,812 263 -- 181,904
Vehicle interest 58,522 -- 2,681 24 -- 61,227
Vehicle leases 27,295 -- 3,266 509 -- 31,070
Selling, general and administrative 362,590 3,170 51,231 2,927 (12,056) 407,862
Other interest 1,749 4,937 415 27 (1,663) 5,465
Minority interest in net loss of
consolidated subsidiaries -- -- (1,161) -- -- (1,161)
--------- ------- -------- -------- --------- ---------
621,985 8,107 66,244 3,750 (13,719) 686,367
--------- ------- -------- -------- --------- ---------
Net income (loss) $ (39,665) $ 556 $ (4,299) $ (262) $ 286 $ (43,384)
========= ======= ======== ======== ========= =========
</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>
Six Months Ended June 30, 1996
-----------------------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo DKBERT Ltd. Companies Eliminations Combined
----------- -------- --------- -------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Cash flows from operating activities $ 207,320 $ (1,914) $ 7,494 $ (5,204) $ (2,590) $ 205,106
----------- -------- --------- -------- --------- -----------
Cash flows from investing activities:
Cash received from sale of revenue
earning vehicles 701,901 -- 143,367 4,909 -- 850,177
Cash paid to suppliers of revenue earning
vehicles (1,572,949) -- (196,146) (15,255) -- (1,784,350)
(Purchase) sale of investments (27,949) -- -- -- -- (27,949)
Capital expenditures (7,614) (2,247) (461) (202) -- (10,524)
Proceeds from sale of property and
equipment 1,077 321 -- -- -- 1,398
----------- -------- --------- -------- --------- -----------
Net cash used in investing activities (905,534) (1,926) (53,240) (10,548) -- (971,248)
----------- -------- --------- -------- --------- -----------
Cash flows from financing activities:
Proceeds from revenue earning vehicle
financing 1,548,298 -- 177,162 13,679 -- 1,739,139
Principal payments on revenue earning
vehicle financing (879,503) -- (170,985) (4,260) -- (1,054,748)
Proceeds from issuance of other debt 90,000 12,500 3,813 -- -- 106,313
Principal payments on other debt (600) (1,960) (4,347) -- -- (6,907)
Collections from affiliate 2,975 -- 54,514 6,368 (63,857) --
Payments to affiliate (53,614) (5,997) (6,836) -- 66,447 --
Dividends and distributions (10,216) (133) -- (521) -- (10,870)
----------- -------- --------- -------- --------- -----------
Net cash provided by financing activities 697,340 4,410 53,321 15,266 2,590 772,927
----------- -------- --------- -------- --------- -----------
Effect of exchange rate changes on cash -- -- (252) (50) -- (302)
----------- -------- --------- -------- --------- -----------
Net increase (decrease) in cash and cash
equivalents (874) 570 7,323 (536) -- 6,483
Cash and cash equivalents at beginning of
period 5,987 586 3,777 1,603 -- 11,953
----------- -------- --------- -------- --------- -----------
Cash and cash equivalents at end of period $ 5,113 $ 1,156 $ 11,100 $ 1,067 $ -- $ 18,436
=========== ======== ========= ======== ========= ===========
Supplemental disclosures:
Interest paid $ 52,200 $ 9,893 $ 6,433 $ 211 $ (5,474) $ 63,263
=========== ======== ========= ======== ========= ===========
Income tax payments $ -- $ -- $ -- $ -- $ -- $ --
=========== ======== ========= ======== ========= ===========
</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>
Six Months Ended June 30, 1995
----------------------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo DKBERT Ltd. Companies Eliminations Combined
----------- -------- --------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Cash flows from operating activities $ 136,493 $ 2,027 $ 17,824 $ (342) $ (6,617) $ 149,385
----------- -------- --------- ------- --------- -----------
Cash flows from investing activities:
Cash received from sale of revenue
earning vehicles 1,168,780 -- 97,587 1,523 -- 1,267,890
Cash paid to suppliers of revenue earning
vehicles (1,490,870) -- (141,969) (6,592) -- (1,639,431)
Sale of investments 21,788 2,156 -- -- -- 23,944
Capital expenditures (13,596) (4,878) (305) (200) -- (18,979)
Proceeds from sale of property and
equipment 335 418 -- -- -- 753
----------- -------- --------- ------- --------- -----------
Net cash used in investing activities (313,563) (2,304) (44,687) (5,269) -- (365,823)
----------- -------- --------- ------- --------- -----------
Cash flows from financing activities:
Proceeds from revenue earning vehicle
financing 1,493,850 -- 139,077 6,992 -- 1,639,919
Principal payments on revenue earning
vehicle financing (1,339,499) -- (106,078) (1,614) -- (1,447,191)
Proceeds from other debt -- 52,811 3,459 -- -- 56,270
Principal payments on other debt (1,501) (23,913) (4,257) (4) -- (29,675)
Collections from affiliate 25,812 4,119 8,677 36 (38,644) --
Payments to affiliate (1,746) (31,547) (11,968) -- 45,261 --
Dividends and distributions (6,344) (1,351) -- (1,230) -- (8,925)
Contributions 900 -- 5 208 -- 1,113
----------- -------- --------- ------- --------- -----------
Net cash provided by financing activities 171,472 119 28,915 4,388 6,617 211,511
----------- -------- --------- ------- --------- -----------
Effect of exchange rate changes on cash -- -- 251 21 -- 272
----------- -------- --------- ------- --------- -----------
Net increase (decrease) in cash and cash
equivalents (5,598) (158) 2,303 (1,202) -- (4,655)
Cash and cash equivalents at beginning of
period 6,598 466 6,400 2,234 -- 15,698
----------- -------- --------- ------- --------- -----------
Cash and cash equivalents at end of period $ 1,000 $ 308 $ 8,703 $ 1,032 $ -- $ 11,043
=========== ======== ========= ======= ========= ===========
Supplemental disclosures:
Interest paid $ 61,765 $ 4,937 $ 1,481 $ 51 $ (1,663) $ 66,571
=========== ======== ========= ======= ========= ===========
Income tax payments $ 256 $ -- $ -- $ -- $ -- $ 256
=========== ======== ========= ======= ========= ===========
</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-
-12-
<PAGE>
A-Car B.V. which conducts car rental operations in The
Netherlands and also owns a minority interest in GUSA Ltd.;
(v) Territory Blue, a management company which contracts
with certain employees of Alamo and offers management
services to certain other entities; and (vi) Tower, which
provides advertising services to Alamo. The combined
financial statements include the accounts of the Alamo
Affiliated Companies and their majority-owned subsidiaries.
Minority interest represents GUSA Ltd.'s 21% ownership in
Alamo Rent-A-Car B.V. All significant intercompany accounts
and transactions are eliminated in combination. The Alamo
Affiliated Companies are economically dependent on Alamo for
administrative support and working capital required to
supplement their cash flow needs and to provide interim
funding for capital expenditures.
The accompanying unaudited combined and combining condensed
financial statements have been prepared by the Companies in
accordance with the accounting policies described in the 1995
Annual Report and should be read in conjunction with the
combined financial statements and notes which appear in that
report. These statements do not include all of the information
and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all normal recurring adjustments considered
necessary for a fair presentation have been included.
(b) Reclassifications
Certain reclassifications have been made to the 1995 financial
statements to conform to the presentation used in 1996.
(2) Revenue Earning Vehicles
Revenue earning vehicles consist of the following (in thousands):
<TABLE>
<CAPTION>
June 30, 1996
----------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo Ltd. Companies Combined
----- ---- --------- --------
<S> <C> <C> <C> <C>
Revenue earning vehicles $2,290,033 $205,923 $15,468 $2,511,424
Less accumulated depreciation (233,253) (17,131) (792) (251,176)
---------- -------- ------- ----------
$2,056,780 $188,792 $14,676 $2,260,248
========== ======== ======= ==========
December 31, 1995
----------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo Ltd. Companies Combined
----- ---- --------- --------
Revenue earning vehicles $1,539,814 $156,113 $ 6,018 $1,701,945
Less accumulated depreciation (212,242) (10,572) (722) (223,536)
---------- -------- ------- ----------
$1,327,572 $145,541 $ 5,296 $ 1,478,409
========== ======== ======= ==========
</TABLE>
-13-
<PAGE>
(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):
<TABLE>
<CAPTION>
June 30, December 31,
Alamo 1996 1995
----- ---- ----
<S> <C> <C>
Amounts under $750 million revolving credit agreement and
predecessor agreements with termination date of June 30, 1999;
secured by eligible vehicle collateral and vehicle receivable
balances; interest at formulas based on prime, Federal funds
or LIBOR at Alamo's discretion $ 494,441 $ 19,393
Amounts under $580 million loan agreement with termination date
of June 10, 1997; secured by eligible vehicle collateral and
vehicle receivable balances; interest based on market dictated
commercial paper rates 578,483 579,001
Senior secured notes payable with interest at fixed rates ranging
from 5.58% to 7.08% with various maturity dates and amounts as
follows: December 15, 1996 - $133 million; December 15, 1997 -
$25 million; December 15, 1998 - $113 million; December 15,
2000 - $94 million; and, December 15, 2003 - $80.5 million;
secured by eligible vehicle collateral and vehicle receivable
balances 445,500 445,500
Amounts under $250 million loan agreement with termination date
of October 2, 1996; secured by eligible vehicle collateral and
vehicle receivable balances; interest based on market dictated
commercial paper rates 246,955 236,357
Amounts under $175 million revolving credit agreement with
termination date of June 5, 1997; secured by eligible vehicle
collateral and vehicle receivable balances; interest at
formulas based on prime or LIBOR at Alamo's discretion 113,000 -
Amounts to be financed after period end under various revolving
credit agreements 137,067 66,400
--------- ---------
Alamo subtotal 2,015,446 1,346,651
--------- ---------
</TABLE>
-14-
<PAGE>
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
GUSA Ltd. -------- ------------
---------
<S> <C> <C>
Amounts under various uncommitted revolving lease facilities with
financing institutions in Great Britain; secured by eligible
vehicle collateral; interest based on an as quoted
basis dictated by market competition $ 156,575 $ 157,088
Amounts under deutsche mark (DM) 27,500 credit agreement;
secured by eligible vehicle collateral and vehicle receivable
balances; interest based on LIBOR; termination date, February
1997 14,669 -
Amounts under DM 23,000 revolving credit agreement with various
maturity dates; secured by eligible vehicle collateral and
certain real property; interest ranging from 3.8% - 9.0% 15,880 11,368
Amounts under DM term loan and predecessor agreements; secured by
eligible vehicle collateral and vehicle receivable balances;
interest based on FIBOR plus 125 basis points or ICM rate plus
150 basis points
- 14,139
Other, including amounts to be financed after period end, under
various revolving lease facilities 10,978 11,341
---------- ----------
GUSA Ltd. subtotal 198,102 193,936
---------- ----------
Alamo Affiliated Companies
--------------------------
Amounts under Belgium franc (BEF) 155,520 credit facility;
secured by eligible vehicle collateral; interest at Brussels
Interbank offered rate plus 110 basis points; termination
date, June 1997; guaranteed by Alamo
2,877 1,946
Amounts under Canadian dollar C$20,000 credit agreement;
secured by eligible vehicle collateral; interest at Agent's
Bankers Acceptances plus 62.5 basis points; termination date,
June 1998; guaranteed by Alamo
6,879 3,539
Other, including amounts to be financed after period end, under
various revolving credit agreements 4,975 50
---------- ----------
Alamo Affiliated Companies subtotal 14,731 5,535
---------- ----------
Combined $2,228,279 $1,546,122
========== ==========
</TABLE>
-15-
<PAGE>
(4) Other Debt
Other debt consists of the following (in thousands):
<TABLE>
<CAPTION>
June 30, December 31,
Alamo 1996 1995
----- ---- ----
<S> <C> <C>
11 3/4% Senior Notes due 2006, interest payable semi-annually on
January 31 and July 31 of each year, commencing July 31,
1996; unsecured $ 90,000 $ -
Note payable to bank with interest at a formula based on LIBOR or
prime paid quarterly; secured by a building; principal
payable in quarterly installments beginning March 1996 and
based on the balance outstanding at that date, due December
2003 8,100 8,700
--------- ---------
Alamo subtotal 98,100 8,700
-------- ---------
DKBERT
------
Mortgages payable to GMAC and predecessor agreements with
interest at 9.193%; payable in monthly installments, due
July 2005; secured by real property; guaranteed by Alamo 108,843 107,840
11 3/4% Senior Notes due 2006, interest payable semi-annually
on January 31 and July 31 of each year, commencing July 31,
1996; unsecured 10,000 -
Mortgages payable to bank with interest at 0.75% over prime;
variable principal payments due December 2000; secured by
real property; guaranteed by Alamo 825 934
Other mortgages payable - 354
------- -------
DKBERT subtotal 119,668 109,128
------- -------
</TABLE>
-16-
<PAGE>
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
---- ----
GUSA LTD.
--------
<S> <C> <C>
Term loan agreement with bank, interest at LIBOR plus 125 basis
points, payable monthly; principal payable in quarterly
installments of $331, due January 1999; secured by
non-vehicle equipment, trade receivables and leasehold
improvements $ 3,625 $ 4,285
Amounts under Great Britain pound (GBP) 10,000 revolving
credit commitment to expire December 21, 1996; interest
based on Sterling LIBOR plus 125 basis points or base rate
plus 125 basis points; secured by non-vehicle equipment and
leaseholds 15,256 11,431
Note payable to minority shareholder of combined affiliate, paid
April 1996 - 3,722
-------- --------
GUSA Ltd. subtotal 18,881 19,438
-------- --------
Combined $236,649 $137,266
======== ========
</TABLE>
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>
(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 June 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 $ 470 $ 215 $ 40 $ 279 $ - $ 63 $ 1,067
Receivables, net 688 1,431 82 1,658 3,835 2,319 10,013
Revenue earning vehicles, net 2,833 9,492 - 2,351 - - 14,676
Property and equipment, net 38 1,054 - 102 - 83 1,277
Other assets 373 435 - 480 110 16 1,414
------ ------ ------- ------ ------ ----- -- -------
$4,402 $12,627 $ 122 $4,870 $3,945 $ 2,481 $28,447
====== ======= ======= ====== ====== ======== =======
Liabilities and Equity:
Notes payable and lines of credit
secured by revenue earning
vehicles $ 2,877 $10,400 $ - $ 1,454 $ - $ - $ 14,731
Due to affiliates 1,218 3,079 - 5,314 3,128 1,784 14,523
Accounts payable 322 719 - 764 281 758 2,844
Accrued expenses and customer
deposits 96 292 159 60 - 2 609
------- -------- ------- ------- ------- -------- --------
4,513 14,490 159 7,592 3,409 2,544 32,707
------- -------- ------- ------- ------- -------- --------
Minority interest - - - 155 - - 155
Equity (deficit) (111) (1,863) (37) (2,877) 536 (63) (4,415)
------- -------- ------- ------- ------- -------- --------
$ 4,402 $ 12,627 $ 122 $ 4,870 $ 3,945 $ 2,481 $ 28,447
======= ======== ======= ======= ======= ======= ========
</TABLE>
-18-
<PAGE>
<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
Due to affiliates 1,187 1,887 - 3,319 - 600 6,993
Accounts payable 420 214 - 598 - 971 2,203
Accrued expenses and customer
deposits 166 107 287 105 - - 665
------ ------- ---- ------ ---- ------ -------
3,719 5,797 287 4,022 - 1,571 15,396
------ ------- ---- ------ ---- ------ -------
Minority interest - - - 156 - - 156
Equity (deficit) (36) (961) 545 (2,341) - (498) (3,291)
------ ------- ---- ------ ---- ------ -------
$3,683 $4,836 $832 $1,837 $ - $1,073 $12,261
====== ====== ==== ====== ==== ====== =======
<CAPTION>
Statements of Operations:
Three months ended June 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 $ 463 $ 974 $ - $ 1,059 $ - $ - $ 2,496
Revenue from affiliates 22 244 1 153 4,313 3,107 7,840
Interest and other revenue - - 4 - - (53) (49)
------ ------ ---- ------ ---- ------ -------
485 1,218 5 1,212 4,313 3,054 10,287
------ ------ ---- ------ ---- ------ -------
Costs and expenses:
Vehicle depreciation 102 319 - 51 - - 472
Vehicle interest 11 75 - - - - 86
Vehicle leases 6 - - 338 - - 344
Selling, general and
administrative and other
interest 364 1,168 16 1,093 3,611 2,815 9,067
------ ------ ---- ------ ---- ------ -------
483 1,562 16 1,482 3,611 2,815 9,969
------ ------ ---- ------ ---- ------ -------
Net income (loss) $ 2 $ (344) $(11) $ (270) $702 $ 239 $ 318
====== ====== ==== ====== ==== ====== =======
</TABLE>
-19-
<PAGE>
<TABLE>
<CAPTION>
Three months ended June 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 $ 502 $ 190 $ - $ 991 $ - $ - $ 1,683
Revenue from affiliates - - 31 171 - 262 464
Interest and other revenue 36 - (12) 184 - 33 241
---- --- -- ------ -- ---- ------
538 190 19 1,346 - 295 2,388
--- --- -- ----- -- --- -----
Costs and expenses:
Vehicle depreciation 80 78 - 45 - - 203
Vehicle interest (13) 24 - - - - 11
Vehicle leases - - - 326 - - 326
Selling, general and
administrative and other
interest 427 460 17 945 - 35 1,884
--- --- -- ------ -- ---- -----
494 562 17 1,316 - 35 2,424
--- --- -- ----- -- ---- -----
Net income (loss) $ 44 $ (372) $ 2 $ 30 $ - $ 260 $ (36)
===== === === ======= == === ======
<CAPTION>
Six months ended June 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 $ 822 $ 1,582 $ - $ 1,738 $ - $ - $ 4,142
Revenue from affiliates 86 558 (150) 519 8,064 5,388 14,465
Interest and other revenue - - 4 - - 21 25
--- ---- ----- ---- ---- ------- -------
908 2,140 (146) 2,257 8,064 5,409 18,632
--- ----- --- ----- ----- ----- ------
Costs and expenses:
Vehicle depreciation 163 577 - 82 - - 822
Vehicle interest 28 129 - - - - 157
Vehicle leases 6 3 - 529 - - 538
Selling, general and
administrative and other
interest 790 2,346 28 2,307 7,529 4,860 17,860
--- ----- ---- ----- ----- ----- ------
987 3,055 28 2,918 7,529 4,860 19,377
--- ----- ---- ----- ----- ----- ------
Net income (loss) $ (79) $ (915) $ (174) $ (661) $ 535 $ 549 $ (745)
==== ======= ==== ====== ====== ====== ========
</TABLE>
-20-
<PAGE>
<TABLE>
<CAPTION>
Six months ended June 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 $ 753 $ 190 $ - $ 1,430 $ - $ - $ 2,373
Revenue from affiliates - - 31 171 - 466 668
Interest and other revenue 36 - 14 364 - 33 447
---- --- -- ------ -- ---- ------
789 190 45 1,965 - 499 3,488
--- --- -- ----- -- --- -----
Costs and expenses:
Vehicle depreciation 140 78 - 45 - - 263
Vehicle interest - 24 - - - - 24
Vehicle leases - - - 509 - - 509
Selling, general and
administrative and other
interest 681 460 47 1,696 - 70 2,954
--- --- -- ----- -- ---- -----
821 562 47 2,250 - 70 3,750
--- --- -- ----- -- ---- -----
Net income (loss) $ (32) $ (372) $ (2) $ (285) $ - $ 429 $ (262)
=== === == ====== == === ======
<CAPTION>
Statements of Cash Flows:
Six months ended June 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 $ (339) $ (969) $ (4) $(1,028) $(3,128) $ 264 $ (5,204)
------ ------ ---- ----- ----- --- ------
Cash flows from investing activities:
Cash received from sale of
revenue earning vehicles 2,162 2,701 - 46 - - 4,909
Cash paid to suppliers of
revenue earning vehicles (2,984) (9,755) - (2,516) - - (15,255)
Capital expenditures (10) (111) - (11) - (70) (202)
------- ------ --- ------ ----- --- --------
Net cash used
in investing activities (832) (7,165) - (2,481) - (70) (10,548)
------ ----- --- ----- ----- --- ------
Cash flows from financing activities:
Proceeds from revenue earning
vehicle financing 2,348 9,835 - 1,496 - - 13,679
Principal payments on revenue
earning vehicle financing (1,277) (2,983) - - - - (4,260)
Collections from affiliate - 1,219 - 2,021 3,128 - 6,368
Dividends and distributions - - (407) - - (114) (521)
----- ----- --- ----- ----- --- --------
Net cash provided by
(used in) financing
activities 1,071 8,071 (407) 3,517 3,128 (114) 15,266
----- ----- --- ----- ----- --- ------
Effect of exchange rate changes on
cash (27) (5) - (18) - - (50)
------ -------- --- ------- ----- --- --------
Net increase (decrease) in cash and
cash equivalents (127) (68) (411) (10) - 80 (536)
Cash and cash equivalents at
beginning of period 597 283 451 289 - (17) 1,603
------ ------ --- ------ ----- --- -------
Cash and cash equivalents at end of
period $ 470 $ 215 $ 40 $ 279 $ - $ 63 $ 1,067
====== ====== ==== ====== ===== ==== =======
</TABLE>
-21-
<PAGE>
<TABLE>
<CAPTION>
Six months ended June 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 $ (298) $ (131) $ 5 $ 265 $ - $ (183) $ (342)
------ ------ ----- --- ---- ----- ------
Cash flows from investing activities:
Cash received from sale of
revenue earning vehicles 1,479 - - 44 - - 1,523
Cash paid to suppliers of
revenue earning vehicles (3,046) (3,432) - (114) - - (6,592)
Capital expenditures (7) (181) - (12) - - (200)
------- ------ ---- --- ---- ---- ------
Net cash used
in investing activities (1,574) (3,613) - (82) - - (5,269)
----- ----- ---- --- ---- ---- -----
Cash flows from financing activities:
Proceeds from revenue earning
vehicle financing 3,420 3,572 - - - - 6,992
Principal payments on revenue
earning vehicle financing (1,588) (26) - - - - (1,614)
Payments on other debt - - - (4) - - (4)
Collections from affiliate - - - 36 - - 36
Dividends and distributions - - - - - (1,230) (1,230)
Contributions - 198 - 10 - - 208
---- ------ ---- ---- ---- ---- ------
Net cash provided by
(used in) financing 1,832 3,744 - 42 - (1,230) 4,388
activities ----- ----- ---- ---- ---- ----- -----
Effect of exchange rate changes on
cash 5 - - 16 - - 21
-------- ----- ---- ---- ---- ----- -------
Net increase (decrease) in cash and
cash equivalents (35) - 5 241 - (1,413) (1,202)
Cash and cash equivalents at
beginning of period 50 - 429 87 - 1,668 2,234
------- ---- --- ---- ---- ----- -----
Cash and cash equivalents at end of
period $ 15 $ - $ 434 $ 328 $ - $ 255 $1,032
====== ==== === === ==== ====== =====
</TABLE>
-22-
<PAGE>
(6) Supplemental Financial Data (in thousands)
Balance Sheet:
<TABLE>
<CAPTION>
European
Operating Combined
June 30, 1996 Issuers (1) Subsidiaries(2) Eliminations Issuers
------------- ----------- --------------- ------------ -------
<S> <C> <C> <C> <C>
Assets $2,583,550 $275,379 $(48,944) $2,809,985
========== ======== ======== ==========
Liabilities $2,533,229 $295,281 $(58,758) $2,769,752
Minority interest - (260) - (260)
Equity 50,321 (19,642) 9,814 40,493
---------- -------- -------- ----------
$2,583,550 $275,379 $(48,944) $2,809,985
========== ======== ======== ==========
European
Operating Combined
December 31, 1995 Issuers (1) Subsidiaries(2) Eliminations Issuers
----------------- ----------- --------------- ------------ -------
Assets $1,805,783 $250,334 $(55,372) $2,000,745
========== ======== ======== ==========
Liabilities $1,732,611 $264,096 $(61,927) $1,934,780
Equity 73,172 (13,762) 6,555 65,965
---------- -------- -------- ----------
$1,805,783 $250,334 $(55,372) $2,000,745
========== ======== ======== ==========
Income Statement and Cash Flows:
European
Operating Combined
Six months ended June 30, 1996 Issuers (1) Subsidiaries(2) Eliminations Issuers
------------------------------ ----------- --------------- ------------ -------
Revenue $ 641,261 $ 68,204 $ (4,834) $ 704,631
Net income (loss) (14,624) (6,179) 6,496 (14,307)
Cash flows from operating activities 203,005 (4,416) 6,517 205,106
European
Operating Combined
Six months ended June 30, 1995 Issuers (1) Subsidiaries(2) Eliminations Issuers
------------------------------ ----------- --------------- ------------ -------
Revenue $ 582,442 $ 63,778 $ (3,237) $ 642,983
Net income (loss) (41,861) (3,375) 1,852 (43,384)
Cash flows from operating activities 139,133 16,924 (6,672) 149,385
</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.
-23-
<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 June 30, 1996 increased 11% to
$379 million from $341 million in the same quarter of 1995. On a year to date
basis, total revenue increased $62 million, or 10%, to $705 million versus $643
million for the same period in 1995. Over 90% of the revenue increase in both
the second quarter and year to date comparisons was generated by the Companies'
United States rental operations. Rental volume and average daily rental rates
improved over the comparable 1995 periods, driven by increases in air passenger
deplanements in the traditional tourist destinations of Florida, Hawaii and
California.
Costs and Expenses. Total costs and expenses for the three months ended June 30,
1996 increased 7% to $380 million from the $355 million incurred in the second
quarter of 1995. As a percentage of total revenues, total costs and expenses
decreased to 101% from 104% in the prior year. Six month results followed a
similar pattern, with 1996 total costs and expenses up $33 million, or 5%, over
1995 but down as a percentage of revenues from 107% to 102%.
Vehicle related costs and expenses (depreciation, leasing and interest) were
each individually impacted by a decision to operate a greater percentage of
owned versus leased vehicles in 1996. In the aggregate, these expenses declined
$5 million for the second quarter or 4% from 1995 levels; for the six month
period, these expenses decreased $13 million or 5% from the prior year. As a
percentage of revenues, this category decreased from 43% in 1995 to 37% in 1996
for both periods. These improvements were due to various elements of the
Companies' cost reduction plan, including a less expensive fleet mix, improved
worldwide utilization, and slightly lower interest rates.
Selling, general and administrative costs increased $26 million, or 13%, for the
second quarter and $39 million, or 10%, for the six months over the comparable
periods in 1995. These increases were due primarily to revenue and/or volume
related expenses such as commissions, airport fees and auto maintenance; as a
percentage of revenues this category remained static at 61% for the quarter and
63% year to date for both 1996 and 1995.
Other interest increased by $4.7 million and $6.3 million for the three and six
month periods, respectively, due primarily to the Senior Notes issued during the
first quarter of 1996.
The minority interest in the net loss of the Companies' German operation, shown
as a credit to total costs and expenses, declined from $398,000 in 1995 to
$194,000 in 1996 for the second quarter and from $1,161,000 in 1995 to $653,000
in 1996 for the six months. This reduction came as a result of the finalization
of the German acquisition, whereby the former owner's share in the acquired
entity was reduced from 25%, as reported in 1995, to 16% in 1996. Under the
Minority Interest Shareholder Agreement, loss contributions in 1996 have been
capped at approximately DM 960,000 ($630,000).
Net Loss. As a result of the factors discussed above, the Company had a net loss
of $2 million in the second quarter of 1996, a $12 million improvement over the
$14 million loss incurred in 1995. For the six month period, the 1996 loss was
$14 million, a $29 million improvement over the same period of 1995.
-24-
<PAGE>
Capital Resources and Liquidity
Net cash provided by operating activities for the six months ended June 30, 1996
increased $55.7 million, or 37.3%, to $205.1 million from $149.4 million in the
comparable period of 1995. The excess of cash received from rentals over cash
paid to vendors was the primary factor in the overall increase consistent with
the net earnings improvement noted above.
Net cash used in investing activities increased to $971.2 million in the first
six months of 1996, up $605.4 million from the $365.8 million used in the same
period of 1995. The increase was due primarily to fewer sales of revenue earning
vehicles during the first half of 1996 as the Companies decreased their seasonal
outfleeting activity to match anticipated demand. Additionally, the Companies
had a higher percentage of owned versus leased vehicles in 1996 versus 1995.
Net cash provided by financing activities for the first six months of 1996
increased $561.4 million to $772.9 million as compared to the first half of the
prior year due primarily to borrowings associated with the infleeting of
vehicles in advance of the traditional summer tourist season. In addition,
principal payments on debt secured by revenue earning vehicles decreased from
the first six months of 1995 as a result of the reduced sales of vehicles as
mentioned above, partially offset by the temporary pay down of vehicle debt from
proceeds of the issuance of the Senior Notes.
The Companies use interest rate swaps in the management of their interest rate
risk. At June 30, 1996, the Companies had approximately $1,810.6 million of
floating rate indebtedness, of which $175 million had interest rate protection
agreements maturing in 1997. A substantial increase in interest rates could
materially adversely affect the Companies' ability to service their debt
obligations.
The aggregate amount of the Companies' indebtedness fluctuates as a result of
the seasonal aspects of its business, with levels of indebtedness generally
higher during the second and third quarters and lower in the first and fourth.
In June 1996, Alamo's $90 million term loan and $75 million revolving credit
facility were combined into a new $175 million revolving credit agreement.
At June 30, 1996, the Companies had $2,464.9 million in total indebtedness, of
which $2,228.3 million represented secured indebtedness for the purchase of
vehicles, versus $1,683.4 million and $1,546.1 million, respectively, at
December 31, 1995.
The Companies had $355.5 million of capacity available under their vehicle
financing facilities at June 30, 1996. The Companies believe that their cash on
hand, cash provided by operations, and available borrowings under their
revolving credit facilities will adequately provide for their working capital,
debt service and capital expenditure requirements for at least the next twelve
months.
Seasonality
The industry in which the Companies operate, particularly the leisure
travel segment, is highly seasonal. The Companies' third quarter, which includes
the peak summer travel months, has historically been the strongest quarter of
the year. During the peak season the Companies increase their fleet and
workforce to accommodate increased rental activity. As a result, any occurrence
that disrupts travel patterns during the summer period could have a material
adverse effect on the Companies' annual performance. The Companies' first
quarter is generally its weakest, when there is limited leisure family travel
and a greater potential for adverse weather conditions. Many of the Companies'
operating expenses such as rent, general insurance and administrative personnel
are fixed and cannot be reduced during periods of decreased rental demand.
-25-
<PAGE>
Forward-Looking Statements
This report contains forward-looking statments within the meaning of
Section 21E of the Securities Exchange Act of 1934. These forward-looking
statements are based largely on the Companies' expectations and are subject
to a number of risks and uncertainties, certain of which are beyond the
Companies' control. Actual results could differ materially from these
forward-looking statements as a result of, among other factors, changes in
manufacturers' repurchase programs, the Companies' leverage and restrictive
covenants, competitive pressures in the rental industry, dependence on the air
travel industry, seasonality, regulation and risks relating to the European
operations. In light of these risks and uncertainties, there can be no
assurance that the forward-looking information contained in this report will
in fact transpire.
-26-
<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 Second Amendment to Loan Agreement between Alamo and
AFL (with attached Consent of Majority Banks).
4.2 Amendment to Liquidity Loan
Agreement among AFL, the General
Partner and the Liquidity Agent
(with attached Consent of each
Liquidity Lender).
4.3 Consent of Liquidity Lenders to Extension of Scheduled
Liquidity Commitment Termination Date.
10.1 Consulting Agreement by and between Alamo Rent-A-Car,
Inc. and Philip S. Shailer ("Consultant").
10.2* Agreement between Alamo Rent A Car, Inc.,
ALASYS, Ltd., MOI operations, Inc.
and Edward J. Morse.
27.1. Financial Data Schedule
* Portions of this document have been omitted pursuant
to an application for confidential treatment pursant
to Rule 24b-2 under the Securities Exchange Act of
1934, as amended.
(b) Reports on Form 8-K
Not applicable.
-27-
<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: August 13, 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: August 13, 1996 By: /s/ Frank A. Armstrong
-------------------------
Frank A. Armstrong
President
Dated: August 13, 1996 By: /s/ D. Keith Cobb
-------------------------
D. Keith Cobb
(Principal Financial Officer)
<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: August 13, 1996 By: /s/ W. Macdonald Clark
---------------------------
W. Macdonald Clark
President
Dated: August 13, 1996 By: /s/ D. Keith Cobb
----------------------------
D. Keith Cobb
Vice Chairman of the Board
(Principal Financial Officer)
<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: August 13, 1996 By: /s/ Michael S. Egan
-------------------
Michael S. Egan,
a general Partner
Dated: August 13, 1996 By: /s/ D. Keith Cobb
-----------------
D. Keith Cobb
(Principal Financial Officer)
<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: August 13, 1996 By: /s/ Michael S. Egan
-------------------
Michael S. Egan,
Chairman of the Board
and President
Dated: August 13, 1996 By: /s/ D. Keith Cobb
-----------------
D. Keith Cobb
(Principal Financial Officer)
<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: August 13, 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: August 13, 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: August 13, 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: August 13, 1996 By: /s/ Roger H. Ballou
-------------------
Roger H. Ballou
President
(Duly Authorized Officer)
Dated: August 13, 1996 By: /s/ D. Keith Cobb
-----------------
D. Keith Cobb
(Principal Financial Officer)
<PAGE>
Exhibit Index
Exhibit
Number Exhibit
4.1 Second Amendment to Loan Agreement between Alamo and AFL
(with attached Consent of Majority Banks).
4.2 Amendment to Liquidity Loan Agreement among AFL, the General
Partner and the Liquidity Agent (with attached Consent of each
Liquidity Lender).
4.3 Consent of Liquidity Lenders to Extension of Scheduled
Liquidity Commitment Termination Date.
10.1 Consulting Agreement by and between Alamo Rent-A-Car, Inc. and
Philip S. Shailer ("Consultant").
10.2* Agreement between Alamo Rent A Car, Inc., ALASYS, Ltd.,
MOI Operations, Inc. and Edward J. Morse.
27.1. Financial Data Schedule
* Portions of this document have been omitted pursuant to
an application for confidential treatment pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.
EXHIBIT 4.1
SECOND AMENDMENT TO
LOAN AGREEMENT
THIS SECOND AMENDMENT TO LOAN AGREEMENT (this "Amendment") is dated as of
June 11, 1996 among ALAMO RENT-A-CAR, INC., a Florida corporation ("Alamo"), and
ALAMO FUNDING, L.P., a limited partnership organized under the laws of the State
of New York (the "Lender").
W I T N E S S E T H:
WHEREAS, Alamo and AFL are parties to that certain Loan Agreement dated as
of June 20, 1994 (as amended, restated or modified from time to time, the "Loan
Agreement");
WHEREAS, Alamo and AFL are parties to that certain Amendment to Loan
Agreement, dated as of December 29, 1994;
WHEREAS, Alamo and AFL desire to amend certain provisions of the Loan
Agreement;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereby agree, upon the
terms and subject to the conditions set forth below, as follows:
Section 1. Defined Terms. All capitalized terms used herein (including in
the preamble and in the recitals) and not otherwise defined herein shall have
the meanings set forth for such terms in the Loan Agreement.
Section 2. Amendments to the Loan Agreement.
(a) Amendment to Section 1.1. The following term is hereby added to
Section 1.1:
"Borrowing Base Deficiency" has the meaning assigned thereto in
the Definitions List annexed to the Liquidity Loan Agreement.
(b) Amendment to Section 5.1. Section 5.1(v) of the Loan Agreement is
hereby amended to read in its entirety as follows: "(v) any amounts
received by the Lender or the Agent, or deposited into the Collateral
Account, during the Related Month from Manufacturers as Repurchase Prices
or by
<PAGE>
auction dealers or any other Person for repurchases or sales outside of the
applicable Repurchase Program, as applicable, of Vehicles owned by such
Borrower."
(c) Amendment to Section 6.1. Section 6.1 of the Loan Agreement is
hereby amended by deleting the third sentence thereof and replacing same in
its entirety with the following sentence: "The Lender hereby specifies that
all payments made by the Manufacturers under Repurchase Programs or by
auction dealers or any other Person in connection with sales outside of the
applicable Repurchase Program shall be paid to the Master Collateral
Account".
(d) Amendment to Section 9.6. Section 9.6 of the Loan Agreement is
hereby amended by changing clause (b)(iii) to (b)(iv) and inserting
immediately following clause (b)(ii) the following new clause (b)(iii):
"(iii) verify compliance by such Borrower with Section 9.13,".
(e) Amendment to Article IX. Article IX of the Loan Agreement is
hereby amended by adding the following new Section 9.13 immediately
following Section 9.12:
"SECTION 9.13. Repurchase Prices; Auction Sales Proceeds. Each
Borrower shall direct (i) each Manufacturer to pay any and all amounts
due under its respective Repurchase Program and (ii) any auction
dealer or any other Person to pay any and all sales proceeds with
respect to any Vehicle directly to the Master Collateral Account."
(f) Amendment to Article X. Article X of the Loan Agreement is hereby
amended by adding the following new Section 10.7 immediately following
Section 10.6:
"SECTION 10.7. Action Under Master Security Agreement. Alamo
shall not take any action under Section 3.09 or 3.10 of the Master
Security Agreement if, after giving effect to such action, a Borrowing
Base Deficiency would result."
Section 3. Conditions of Effectiveness. The following constitute conditions
precedent to the effectiveness of this Amendment:
(a) The Lender shall have received as of the date hereof a copy of the
written confirmation delivered to the Lender by each of S&P and Moody's to
the effect that this
-2-
<PAGE>
Amendment will not result in the downgrading or withdrawal of the then
current ratings of the Commercial Paper Notes;
(b) The Majority Banks and the Credit Enhancer shall have delivered
written consent to this Amendment;
(c) AFL shall have delivered prior written notice of this Amendment to
each Rating Agency, the Depositary, the Agent, the Liquidity Agent and each
Dealer;
(d) AFL shall have delivered a fully executed copy of this Amendment
to each Rating Agency, the Depositary, the Agent, the Liquidity Agent and
each Dealer;
(e) The Lender shall have received from Alamo (i) a copy of the
resolutions of its Board of Directors, certified as of the date hereof by
the Secretary thereof, authorizing the execution, delivery and performance
of this Amendment and (ii) an incumbency certificate from the Secretary
thereof with respect to its officers, agents or other representatives
authorized to execute this Amendment; and
(f) The Lender shall have received an Opinion of Counsel to Alamo to
the effect that this Amendment has been duly authorized, executed and
delivered and is the legal, valid and binding obligation of Alamo,
enforceable against it in accordance with its terms, subject to the
exceptions set forth therein.
Section 4. Reference to and Effect on the Related Documents; Ratification.
(a) Upon the effectiveness hereof, on and after the date hereof each reference
in the Related Documents and any other document to the "Loan Agreement" or words
of like import referring to the Loan Agreement shall mean and be a reference to
the Loan Agreement as amended hereby and each reference to any of the defined
terms referred to in this Amendment shall mean and refer to such defined terms
as amended hereby.
(b) Except as specifically amended above, the Loan Agreement is and shall
continue to be in full force and effect and is hereby ratified and confirmed in
all respects.
Section 5. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Amendment by facsimile transmission shall be as
-3-
<PAGE>
effective as delivery of a manually executed counterpart of this Amendment.
Section 6. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
ALAMO RENT-A-CAR, INC.
By: /s/ N. MARIA MENENDEZ
-------------------------------
Name: N. MARIA MENENDEZ
Title: TREASURER
ALAMO FUNDING, L.P.
By: AFL FLEET FUNDING, INC.,
its General Partner
By: /s/ RICHARD L. TAIANO
-------------------------------
Name: RICHARD L. TAIANO
Title: VICE PRESIDENT
Consented to by:
CREDIT SUISSE
NEW YORK BRANCH,
as Credit Enhancer
By: /s/ GEOFFREY M. GRAIG
-------------------------------
Name: GEOFFREY M. GRAIG
Title: MEMBER OF SENIOR MANAGEMENT
By: /s/ KRISTINN R. KRISTINSSON
-------------------------------
Name: KRISTINN R. KRISTINSSON
Title: ASSOCIATE
-5-
<PAGE>
CONSENT OF LIQUIDITY LENDERS
TO SECOND
AMENDMENT TO LOAN AGREEMENT
The undersigned, as Liquidity Lenders under the Liquidity Loan Agreement
dated as of June 20, 1994 among Alamo Funding, L.P., AFL Fleet Funding, Inc.,
certain financial institutions party thereto and Citibank, N.A., as Liquidity
Agent, hereby consent to the foregoing Second Amendment to Loan Agreement.
IN WITNESS WHEREOF, the undersigned have caused this Consent to be executed
and delivered as of June 11, 1996 by their respective officers thereunto duly
authorized.
LIQUIDITY LOAN COMMITMENT LIQUIDITY LENDER
$15,000,000 BANK BRUSSELS LAMBERT,
NEW YORK BRANCH
By: /s/ Mallika Kambhampati
-------------------------------
Name: Mallika Kambhampati
Title: Vice President
By: /s/ Jean-Louis Recoussine
-------------------------------
Name: Jean-Louis Recoussine
Title: General Manager
$50,000,000 BANK OF MONTREAL
By: /s/ Robert K. Strong, Jr.
-------------------------------
Name: Robert K. Strong, Jr.
Title: Managing Director
$50,000,000 THE BANK OF NEW YORK
By: /s/ H. Stephen Griffith
-------------------------------
Name: H. Stephen Griffith
Title: Senior Vice President
<PAGE>
$10,000,000 THE BANK OF TOKYO-MITSUBISHI,
LTD., NEW YORK BRANCH
By: /s/ Joseph P. Devoe
-------------------------------
Name: Joseph P. Devoe
Title: Attorney-in-fact
$30,000,000 BAYERISCHE HYPOTHEKEN-UND
WECHSEL-BANK
AKTIENGESELLSCHAFT,
NEW YORK BRANCH
By: /s/ R. Vogel
-------------------------------
Name: R. Vogel
Title: Banking Office
By: /s/ R.G. Pankuch
-------------------------------
Name: R.G. Pankuch
Title: FVP
$25,000,000 BOATMEN'S NATIONAL BANK
OF ST. LOUIS
By: /s/ Michael S. Harvey
-------------------------------
Name:
Title:
$40,000,000 CITIBANK, N.A.
By: /s/ Kenneth M. Wormser
-------------------------------
Name: Kenneth M. Wozmser
Title: Authorized Signatory
$50,000,000 COMMERZBANK AG, ATLANTA AGENCY
By: /s/ Andreas Bremer
-------------------------------
Name: Andreas Bremer
Title: SVP & Manager
By: /s/ Harry Yergey
-------------------------------
Name: Harry Yergey
Title: VP
<PAGE>
$30,000,000 COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK
B.A., "RABOBANK NEDERLAND",
NEW YORK BRANCH
By: /s/ M. Christina Debler
-------------------------------
Name: M. Christina Debler
Title: Vice President
By: /s/ W. Jeffrey Vollack
-------------------------------
Name: W. Jeffrey Vollack
Title: Vice President, Manager
$50,000,000 DRESDNER BANK AG NEW YORK BRANCH
AND GRAND CAYMAN BRANCH
By: /s/ William E. Lambert
-------------------------------
Name: William E. Lambert
Title: Assistant Vice-President
By: /s/ Brian Haughney
-------------------------------
Name: Brian Haughney
Title: Assistant Treasurer
<PAGE>
CONSENT OF LIQUIDITY LENDERS
TO SECOND
AMENDMENT TO LOAN AGREEMENT
The undersigned, as Liquidity Lenders under the Liquidity Loan Agreement
dated as of June 20, 1994 among Alamo Funding, L.P., AFL Fleet Funding, Inc.,
certain financial institutions party thereto and Citibank, N.A., as Liquidity
Agent, hereby consent to the foregoing Second Amendment to Loan Agreement.
IN WITNESS WHEREOF, the undersigned have caused this Consent to be executed
and delivered as of June 11, 1996 by their respective officers thereunto duly
authorized.
LIQUIDITY LOAN COMMITMENT LIQUIDITY LENDER
- ------------------------- ----------------
$50,000,000.00 FIRST UNION NATIONAL BANK OF FLORIDA
By: /s/ Bruce Roland
-------------------------------
Bruce Roland
Vice President
<PAGE>
$10,000,000 KREDIETBANK N.V.
By: /s/ Robert Snauffer
-------------------------------
Name: Robert Snauffer
Title: Vice President
By: /s/ Raymond F. Murray
-------------------------------
Name: Raymond F. Murray
Title: Vice President
<PAGE>
$50,000,000 INTERNATIONALE NEDERLANDEN
(U.S.) CAPITAL CORPORATION
By: /s/ Michael Plunkett
-------------------------------
Name: Michael Plunkett
Title: Vice President
$50,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ Jeffrey Hwang
-------------------------------
Name: Jeffrey Hwang
Title: Vice President
$15,000,000 SOCIETE GENERALE
By: /s/ Ralph Saheb
-------------------------------
Name: Ralph Saheb
Title: Vice President, Manager
EXHIBIT 4.2
AMENDMENT TO
LIQUIDITY LOAN AGREEMENT
THIS AMENDMENT TO LIQUIDITY LOAN AGREEMENT (this "Amendment") is dated as
of June 11, 1996 among ALAMO FUNDING, L.P., a limited partnership organized
under the laws of the State of New York ("AFL"), AFL FLEET FUNDING, INC., a New
York corporation (the "General Partner"), and CITIBANK, N.A., as the Liquidity
Agent for the Liquidity Lenders (the "Liquidity Agent").
W I T N E S S E T H :
WHEREAS, AFL, the General Partner, the Liquidity Agent and the Liquidity
Lenders are parties to that certain Liquidity Loan Agreement dated as of June
20, 1994 (the "Liquidity Loan Agreement");
WHEREAS, AFL and the Liquidity Agent desire to amend certain provisions of
the Liquidity Loan Agreement (including certain defined terms set forth in the
Definitions List attached as Annex A to the Liquidity Loan Agreement);
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereby agree, upon the
terms and subject to the conditions set forth below, as follows:
Section 1. Defined Terms. All capitalized terms used herein (including in
the preamble and in the recitals) and not otherwise defined herein shall have
the meanings set forth for such terms in the Definitions List dated as of June
20, 1994 and annexed to the Liquidity Loan Agreement as Annex A, as such
Definitions List may be further amended, supplemented, restated or otherwise
modified from time to time (the "Definitions List").
Section 2. Amendments to the Liquidity Loan Agreement.
(a) Amendment to Section 2.1. Section 2.1 of the Liquidity Loan Agreement
is hereby amended by deleting subsection (e) thereof in its entirety and
substituting therefor the following:
"(e) after giving effect to such issuance and the use of proceeds
thereof, the weighted average interest rate of
<PAGE>
the Outstanding Commercial Paper Notes, Liquidity Advances and LOC
Liquidity Disbursements would be in excess of 12% per annum, unless (i) AFL
shall have given its written consent to a weighted average interest rate in
excess of 12% per annum, (ii) if required by the Rating Agencies in
connection therewith, the Letter of Credit Amount shall be increased and/or
a letter of credit on terms substantially similar to the Letter of Credit
shall be provided and/or an additional cash collateral account shall be
funded, and (iii) the Rating Agencies shall have confirmed that such
weighted average interest rate will not result in the downgrading or
withdrawal of the then current ratings of the Commercial Paper Notes.
Notwithstanding anything to the contrary contained in this Agreement (other
than in the proviso to this sentence) AFL shall not be required to obtain
the consent of any Liquidity Lender or the Liquidity Agent to any such (1)
increase in the Letter of Credit Amount pursuant to this Section 2.1(e),
(2) provision of a letter of credit pursuant to this Section 2.1(e) or (3)
funding of an additional cash collateral account pursuant to this Section
2.1(e); provided, however, that if the ratings of the Commercial Paper
Notes by S&P or Moody's will be less than A-1 or P-1, respectively, after
giving effect to such weighted average interest rate in excess of 12% per
annum and such increase in the Letter of Credit Amount, provision of a
letter of credit and/or funding of an additional cash collateral account,
such Commercial Paper Notes will not be issued unless the Majority Banks
shall have given their written consent thereto. AFL shall notify the
Liquidity Agent and the Collateral Agent in writing no later than 11:00
a.m. (New York City time) on any Business Day on which the weighted average
interest rate of the Outstanding Commercial Paper Notes, Liquidity Advances
and LOC Liquidity Disbursements exceeds 12% per annum,".
(b) Amendment to Section 3.5.2.
(1) Section 3.5.2 of the Liquidity Loan Agreement is hereby amended by
redesignating the body of current Section 3.5.2 as subsection (a) thereof
and deleting the last two sentences thereof.
(2) Section 3.5.2 of the Liquidity Loan Agreement is hereby further
amended by adding the following new subsection (b) immediately following
subsection (a):
"(b) If on any Business Day in a Related Month the weighted
average interest rate of the Outstanding Commercial Paper Notes,
Outstanding Liquidity Advances and Outstanding LOC Liquidity
Disbursements exceeds 12% per annum, then, unless the requirements for
the
-2-
<PAGE>
continued issuance of Commercial Paper Notes set forth in Section
2.1(e) shall have been complied with not later than 11:00 a.m. (New
York City time) on the last Business Day before the Payment Date with
respect to such Related Month, the Collateral Agent (provided AFL
shall have delivered the notice required pursuant to the last sentence
of Section 2.1(e)) shall, by delivering a Borrowing Request to the
Liquidity Agent (who will notify the other Liquidity Lenders of such
Borrowing Request not later than 12:00 noon, New York City time) for a
Borrowing consisting of Refunding Advances, irrevocably request, not
later than 11:30 a.m., New York City time, on such last Business Day
before such Payment Date, that such Borrowing be made in an aggregate
principal amount equal to the lesser of (i) the Aggregate Liquidity
Loan Commitment on such date minus the aggregate principal amount of
all Liquidity Advances (including any Swing Line Advances) Outstanding
on such date as determined immediately prior to such Borrowing Request
and (ii) the Outstanding Commercial Paper Notes on such date."
(3) Section 3.5.2. of the Liquidity Loan Agreement is hereby further
amended by inserting the following new subsection (c) immediately following
subsection (b) thereof:
"(c) On the terms and subject to the conditions of this Liquidity
Loan Agreement, each Borrowing under this Section shall be initially
comprised of Base Rate Advances (subject to conversion in accordance
with the provisions of Section 3.7) and shall be made on the Business
Day specified in such Borrowing Request. For the purposes of this
Section, Commercial Paper Notes maturing on any day which have been
paid from an advance made by the Depositary shall nonetheless be
deemed to be unpaid."
(c) Amendment to Section 3.9. Section 3.9 of the Liquidity Loan Agreement
is hereby amended by inserting the following at the end of the first sentence of
such Section:
"(any Refunding Note(s) and any Revolving Note(s) may each be referred
to herein as a "Liquidity Advance Note" and collectively as "Liquidity
Advance Notes")".
(d) Amendment to Section 5.10. Section 5.10 of the Liquidity Loan Agreement
is hereby amended by (i) deleting the heading of such Section and substituting
therefor "Order and Priority" and (ii) adding the following to the end of the
penultimate sentence of such section:
-3-
<PAGE>
"; provided, however, nothing contained in this Section 5.10 shall be
construed to limit the rights of the Liquidity Lenders or the
Collateral Agent on behalf of the Liquidity Lenders to pursue any
remedy provided for herein or in any other Related Document".
(e) Amendment to Section 11.1. Section 11.1 of the Liquidity Loan Agreement
is hereby amended by deleting the reference to "Required Liquidity Lenders" in
clause (ii) thereof and substituting therefor "Required Liquidity Providers".
Section 3. Amendments to the Definitions List.
(a) The definition of "AFL Agreements" is hereby amended by adding "the
Loan Note," immediately following the phrase "the Loan Agreement,".
(b) The definition of "Liquidity Advance Note" is hereby amended to read in
its entirety as follows:
"Liquidity Advance Note" is defined in Section 3.9 of the Liquidity
Loan Agreement.
(c) The definition of "Program Size" is hereby amended by deleting the
reference to "Required Enhancement Amount" in clause (c) thereof and
substituting therefor "Letter of Credit Commitment".
(d) The following terms are hereby added to the Definitions List:
"Refunding Note" means, with respect to any Liquidity Lender, a
promissory note issued to such Liquidity Lender by AFL, substantially
in the form of Exhibit B to the Liquidity Loan Agreement, evidencing
the Refunding Advances (including a Commitment Termination Date
Liquidity Advance and, in the case of the Swing Line Lender, any Swing
Line Advances) by such Liquidity Lender to AFL, and all other
promissory notes accepted from time to time in substitution therefor
or renewal thereof.
"Revolving Note" means, with respect to any Liquidity Lender, a
promissory note issued to such Liquidity Lender by AFL, substantially
in the form of Exhibit A to the Liquidity Loan Agreement, evidencing
the Revolving Advances by such Liquidity Lender to AFL, and all other
promissory notes accepted from time to time in substitution therefor
or renewal thereof.
-4-
<PAGE>
Section 4. Conditions of Effectiveness. The following constitute conditions
precedent to the effectiveness of this Amendment:
(a) The Liquidity Agent and AFL shall have received as of the date
hereof a copy of the written confirmation delivered to AFL by each of S&P
and Moody's to the effect that this Amendment will not result in the
downgrading or withdrawal of the then current ratings of the Commercial
Paper Notes;
(b) The Liquidity Agent shall have received (i) from AFL evidence that
all necessary partnership action has been taken to authorize the execution,
delivery and performance of this Amendment and (ii) from the General
Partner (x) a copy of the resolutions of its Board of Directors, certified
as of the date hereof by the Secretary thereof, authorizing the execution,
delivery and performance of this Amendment and (y) an incumbency
certificate thereof with respect to its officers, agents or other
representatives authorized to execute this Amendment;
(c) Each Liquidity Lender and the Credit Enhancer shall each have
delivered written consent to this Amendment;
(d) AFL shall have delivered prior written notice of this Amendment to
each Rating Agency, the Depositary, the Agent, the Liquidity Agent and each
Dealer; and
(e) The Liquidity Agent shall have received an Opinion of Counsel to
AFL to the effect that (i) this Amendment has been duly authorized,
executed and delivered and is the legal, valid and binding obligation of
AFL, enforceable against it in accordance with its terms, subject to the
exceptions set forth therein and (ii) the Collateral Agent has a perfected
security interest in the Loan Agreement and the Loan Note.
Section 5. Reference to and Effect on the Related Documents; Ratification.
(a) Upon the effectiveness hereof, on and after the date hereof each reference
in the Related Documents and any other document to the "Liquidity Loan
Agreement" or the "Definitions List" or words of like import referring to the
Liquidity Loan Agreement or the Definitions List shall mean and be a reference
to the Liquidity Loan Agreement or the Definitions List, as applicable, as
amended hereby and each reference to any of the defined terms referred to in
this Amendment shall mean and refer to such defined terms as amended hereby.
(b) Except as specifically amended above, each of the Liquidity Loan
Agreement and the Definitions List is and shall
-5-
<PAGE>
continue to be in full force and effect and is hereby ratified and confirmed in
all respects.
Section 6. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Amendment by facsimile transmission shall be as effective as delivery of a
manually executed counterpart of this Amendment.
Section 7. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES.
-6-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
ALAMO FUNDING, L.P.
By: AFL FLEET FUNDING, INC.,
-------------------------------
its General Partner
By: /s/ Richard L. Taiano
-------------------------------
Name: Richard L. Taiano
Title: Vice President
AFL FLEET FUNDING, INC.
By: /s/ Richard L. Taiano
-------------------------------
Name: Richard L. Taiano
Title: Vice President
CITIBANK, N.A., as Liquidity Agent
By: /s/ Annette Marsula
-------------------------------
Name: Annette Marsula
Title: Senior Trust Officer
Consented to by:
CREDIT SUISSE
NEW YORK BRANCH,
as Credit Enhancer
By: /s/ Geoffrey M. Craig
-------------------------------
Name: Geoffrey M. Craig
Title: Member of Senior Management
By: /s/ Kristinn R. Kristinsson
-------------------------------
Name: Kristinn R. Kristinsson
Title: Associate
<PAGE>
CONSENT OF LIQUIDITY LENDERS
TO
AMENDMENT TO LIQUIDITY LOAN AGREEMENT
The undersigned, as Liquidity Lenders under the Loan Liquidity Agreement
dated as of June 20, 1994 among Alamo Funding, L.P., AFL Fleet Funding, Inc.,
certain financial institutions party thereto and Citibank, N.A., as Liquidity
Agent, hereby consent to the foregoing Amendment to Liquidity Loan Agreement.
IN WITNESS WHEREOF, the undersigned have caused this Consent to be executed
and delivered as of June 11, 1996 by their respective officers thereunto duly
authorized.
LIQUIDITY LOAN COMMITMENT LIQUIDITY LENDER
- ------------------------- ----------------
$15,000,000 BANK BRUSSELS LAMBERT,
NEW YORK BRANCH
By: /s/ Mallika Kambhampati
-------------------------------
Name: Mallika Kambhampati
Title: Vice President
By: /s/ Jean-Louis Recoussine
-------------------------------
Name: Jean-Louis Recoussine
Title: General Manager
$50,000,000 BANK OF MONTREAL
By: /s/ Robert K. Strong, Jr.
-------------------------------
Name: Robert K. Strong, Jr.
Title: Managing Director
$50,000,000 THE BANK OF NEW YORK
By: /s/ H. Stephen Griffith
-------------------------------
Name: H. Stephen Griffith
Title: Senior Vice President
<PAGE>
$10,000,000 THE BANK OF TOKYO-MITSUBISHI,
LTD., NEW YORK BRANCH
By: /s/ Joseph P. Devoe
-------------------------------
Name: Joseph P. Devoe
Title: Attorney-in-fact
$30,000,000 BAYERISCHE HYPOTHEKEN-UND
WECHSEL-BANK
AKTIENGESELLSCHAFT,
NEW YORK BRANCH
By: /s/ R. Vogel
-------------------------------
Name: R. Vogel
Title: Banking Officer
By: /s/ R.G. Pankuch
-------------------------------
Name: R.G. Pankuch
Title: FVP
$25,000,000 BOATMEN'S NATIONAL BANK
OF ST. LOUIS
By: /s/ Michael S. Harvey
-------------------------------
Name:
Title:
$40,000,000 CITIBANK, N.A.
By: /s/ Kenneth M. Wozmser
-------------------------------
Name: Kenneth M. Wozmser
Title: Authorized Signatory
$50,000,000 COMMERZBANK AG, ATLANTA AGENCY
By: /s/ Andreas Bremer
-------------------------------
Name: Andreas Bremer
Title: SVP & Manager
By: /s/ Harry Yergey
-------------------------------
Name: Harry Yergey
Title: VP
<PAGE>
$30,000,000 COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK
B.A., "RABOBANK NEDERLAND",
NEW YORK BRANCH
By: /s/ M. Christina Debler
-------------------------------
Name: M. Christina Debler
Title: Vice President
By: /s/ W. Jeffrey Vollack
-------------------------------
Name: W. Jeffrey Vollack
Title: Vice President, Manager
$50,000,000 DRESDNER BANK AG NEW YORK BRANCH
AND GRAND CAYMAN BRANCH
By: /s/ William E. Lambert
-------------------------------
Name: William E. Lambert
Title: Assistant Vice-President
By: /s/ Brian Haughney
-------------------------------
Name: Brian Haughney
Title: Assistant Treasurer
<PAGE>
CONSENT OF LIQUIDITY LENDERS
TO
AMENDMENT TO LIQUIDITY LOAN AGREEMENT
The undersigned, as Liquidity Lenders under the Loan Liquidity Agreement
dated as of June 20, 1994 among Alamo Funding, L.P., AFL Fleet Funding, Inc.,
certain financial institutions party thereto and Citibank, N.A., as Liquidity
Agent, hereby consent to the foregoing Amendment to Liquidity Loan Agreement.
IN WITNESS WHEREOF, the undersigned have caused this Consent to be executed
and delivered as of June 11, 1996 by their respective officers thereunto duly
authorized.
LIQUIDITY LOAN COMMITMENT LIQUIDITY LENDER
- ------------------------- ----------------
$50,000,000 FIRST UNION NATIONAL BANK OF FLORIDA
By: /s/ Bruce Roland
-------------------------------
Bruce Roland
Vice President
<PAGE>
$10,000,000 KREDIETBANK N.V.
By: /s/ Robert Snauffer
-------------------------------
Name: Robert Snauffer
Title: Vice President
By: /s/ Raymond F. Murray
-------------------------------
Name: Raymond F. Murray
Title: Vice President
<PAGE>
$50,000,000 INTERNATIONALE NEDERLANDEN
(U.S.) CAPITAL CORPORATION
By: /s/ Michael Plunkett
-------------------------------
Name: Michael Plunkett
Title: Vice President
$50,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ Jeffrey Hwang
-------------------------------
Name: Jeffrey Hwang
Title: Vice President
$15,000,000 SOCIETE GENERALE
By: /s/ Ralph Saheb
-------------------------------
Name: Ralph Saheb
Title: Vice President, Manager
Exhibit 4.3
EXTENSION OF
SCHEDULED LIQUIDITY COMMITMENT
TERMINATION DATE
THIS AGREEMENT, dated as of June 11, 1996 is entered into among Alamo
Funding, L.P. ("AFL"), AFL Fleet Funding, Inc. ("Fleet Funding"), the
undersigned financial institutions (the "Liquidity Lenders"), and Citibank,
N.A., as Liquidity Agent.
W I T N E S S E T H:
WHEREAS, the undersigned are parties to that certain Liquidity Loan
Agreement dated as of June 20, 1994 (as may be amended, modified or supplemented
from time to time, the "Liquidity Agreement") among AFL, Fleet Funding, the
Liquidity Lenders and Citibank, N.A., as Liquidity Agent;
WHEREAS, the undersigned desire to extend the Scheduled Liquidity
Termination Date from June 17, 1996 to June 10, 1997;
NOW, THEREFORE, the parties hereto hereby agree as follows:
Section 1. Definitions. Capitalized terms used but not defined herein shall
have the meanings assigned to such terms in the Definitions List dated as of
June 20, 1994 and annexed to the Liquidity Agreement as Annex A, as such
Definitions List may be amended or modified from time to time in accordance with
the provisions of the Liquidity Agreement.
Section 2. Extension. Pursuant to Section 3.5 of the Liquidity Agreement,
the Scheduled Liquidity Commitment Termination Date is hereby extended until
June 10, 1997.
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized.
ALAMO FUNDING, L.P.
By: AFL FLEET FUNDING, INC.,
its General Partner
By: /s/ RICHARD L. TAIANO
-------------------------------
Name: RICHARD L. TAIANO
Title: VICE PRESIDENT
AFL FLEET FUNDING, INC.
By: /s/ RICHARD L. TAIANO
-------------------------------
Name: RICHARD L. TAIANO
Title: VICE PRESIDENT
CITIBANK, N.A.
as Liquidity Agent
By: /s/ Annette Marsula
-------------------------------
Name: Annette Marsula
Title: Senior Trust Officer
<PAGE>
LIQUIDITY LOAN COMMITMENT LIQUIDITY LENDER
- ------------------------- ----------------
$15,000,000 BANK BRUSSELS LAMBERT,
NEW YORK BRANCH
By: /s/ Mallika Kambhampati
-------------------------------
Name: Mallika Kambhampati
Title: Vice President
By: /s/ Jean-Louis Recoussine
-------------------------------
Name: Jean-Louis Recoussine
Title: General Manager
$50,000,000 BANK OF MONTREAL
By: /s/ Robert K. Strong, Jr.
-------------------------------
Name: Robert K. Strong, Jr.
Title: Managing Director
$50,000,000 THE BANK OF NEW YORK
By: /s/ H. Stephen Griffith
-------------------------------
Name: H. Stephen Griffith
Title: Senior Vice President
$10,000,000 THE BANK OF TOKYO-MITSUBISHI,
LTD., NEW YORK BRANCH
By: /s/ Joseph P. Devoe
-------------------------------
Name: Joseph P. Devoe
Title: Attorney-in-Fact
<PAGE>
$30,000,000 BAYERISCHE HYPOTHEKEN-UND
WECHSEL-BANK
AKTIENGESELLSCHAFT,
NEW YORK BRANCH
By: /s/ R. Vogel
-------------------------------
Name: R. Vogel
Title: Banking Officer
By: /s/ R.G. Pankuch
-------------------------------
Name: R.G. Pankuch
Title: FVP
$25,000,000 BOATMEN'S NATIONAL BANK
OF ST. LOUIS
By: /s/ Micheal S. Harvey
-------------------------------
Name:
Title:
$40,000,000 CITIBANK, N.A.
By: /s/ Kenneth M. Wormser
-------------------------------
Name: Kenneth M. Wormser
Title: Authorized Signatory
$50,000,000 COMMERZBANK AG, ATLANTA AGENCY
By: /s/ Andreas Bremer
-------------------------------
Name: Andreas Bremer
Title: SVP & Manager
By: /s/ Harry Yergey
-------------------------------
Name: Harry Yergey
Title: VP
<PAGE>
$30,000,000 COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK
B.A., "RABOBANK NEDERLAND",
NEW YORK BRANCH
By: /s/ M. Christina Debler
-------------------------------
Name: M. Christina Debler
Title: Vice President
By: /s/ W. Jeffrey Vollack
-------------------------------
Name: W. Jeffrey Vollack
Title: Vice President, Manager
$50,000,000 DRESDNER BANK AG NEW YORK BRANCH
AND GRAND CAYMAN BRANCH
By: /s/ William E. Lambert
-------------------------------
Name: William E. Lambert
Title: Assistant Vice-President
By: /s/ Brian Haughney
-------------------------------
Name: Brian Haughney
Title: Assistant Treasurer
$50,000,000 FIRST UNION NATIONAL BANK
OF FLORIDA
By: /s/ Bruce Richard
-------------------------------
Name: Bruce Richard
Title: Vice President
$10,000,000 KREDIETBANK N.V.
By: /s/ Robert Snauffer
-------------------------------
Name: Robert Snauffer
Title: Vice President
By: /s/ Raymond F. Murray
-------------------------------
Name: Raymond F. Murray
Title: Vice President
<PAGE>
$50,000,000 INTERNATIONALE NEDERLANDEN
(U.S.) CAPITAL CORPORATION
By: /s/ Michael Plunkett
-------------------------------
Name: Michael Plunkett
Title: Vice President
$50,000,000 MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By: /s/ Jeffrey Hwang
-------------------------------
Name: Jeffrey Hwang
Title: Vice President
$15,000,000 SOCIETE GENERALE
By: /s/ Ralph Saheb
-------------------------------
Name: Ralph Saheb
Title: Vice President
Exhibit 10.1
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT is made and entered into this 14 day of June,
1996, by and between ALAMO RENT-A-CAR,INC., a Florida corporation, ("Alamo"),
and PHILIP S. SHAILER, ("Consultant").
Witnesseth:
WHEREAS, Consultant has resigned his employment with Alamo effective August
1, 1996.
WHEREAS, Consultant is hereby retained to provide detailed assistance in
the legal and legislative areas; and
WHEREAS, Consultant may come in contact with highly confidential
reports, financial information, full and complete lists of customers and
clients, and all the marketing strategies of Alamo;
NOW, THEREFORE, in consideration of the foregoing, the parties agree as
follows:
1. Retention. Alamo hereby retains Consultant and Consultant accepts such
retention, all in accordance with the duties prescribed by the provisions of
this Agreement, for the payments described by this Agreement and generally
pursuant to the terms and conditions otherwise set forth in this Agreement.
2. Duties. Consultant shall, in concert with the officers of Alamo, be
consulted concerning and shall advise Alamo, relating to, general legal and
legislative issues, including, but not limited to airport issues, California VLF
pass-through legislation, ACRA and CATRALA of California, all as it relates to
Alamo, and such other duties as may reasonably be requested to be rendered by
Consultant to Alamo.
3. Other Consultant Commitments. Alamo understands that Consultant intends
to be actively involved in the legal and consulting business. Alamo agrees that
this Agreement shall not be construed to prevent Consultant from devoting his
efforts and time to the development of his legal and consulting business; except
that, Consultant agrees that he will not provide legal or consulting services to
any person or entity that competes with any portion of Alamo's business, without
the prior written consent of Alamo.
4. Fees and Term. Alamo shall pay to Consultant as fees for his services
the amount of $10,400 per month, payable on the first of each month commencing
on August 1, 1996. The term of this Agreement shall be from August 1, 1996 to
December 31, 1996.
5. Reimbursement of Expenses; Car; Health Benefits. Consultant shall be
reimbursed for all his reasonable expenses of travel, entertainment and other
business activities on behalf of Alamo, subject to reasonable documentation.
Alamo agrees to provide Consultant with the use of a vehicle, a car phone, and a
valet parking space. Consultant and anyone driving the vehicle with Consultant's
consent shall receive the same liability protection which Alamo accords to its
officers and directors who use company vehicles. In addition, Alamo agrees to
provide Consultant with health benefits for him and his family equal to those
provided to its employees, or in the alternative to reimburse him for the cost
of such health benefits.
<PAGE>
6. Time Required. Consultant shall devote up to eighty (80) hours per
month to the projects assigned to him by Alamo each month. If the projects would
require more than eighty (80) hours, then the parties shall agree what the fee
for the extra services shall be.
7. Arbitration and Applicable Law. Any controversy arising under or
relating to the interpretation or implementation of this Agreement, or the
breach thereof, shall be construed under the laws of the State of Florida and
shall be settled by arbitration in the City of Fort Lauderdale, Florida under
the rules then obtaining of the American Arbitration Association. The prevailing
party shall be entitled to payment for all costs and attorneys' fees (both trial
and appellate) incurred by it in regard to the proceedings.
8. Exclusive Agreement. Consultant and Alamo hereby agree that this
Agreement and all rights set forth herein are in lieu of any and all rights
which either may have from the date the Agreement is executed.
9. Independent Contractor. Consultant is retained by Alamo only for the
purposes and to the extent set forth in this Agreement and its relationship to
Consultant shall be that of independent contractor. Consultant shall be free to
dispose of such portion of his entire time, energy and skill during regular
business hours as Consultant is not obligated to devote hereunder to Alamo in
such manner as Consultant sees fit, and to such persons, firms or other entities
as Consultant deems advisable, except as that may be limited by other provisions
in this Agreement relating to those persons, firms or entities that may be
competitive to Alamo.
10. Assignment. Except as otherwise provided, neither party may assign or
delegate any duties under this Agreement without the express prior written
consent of the other party.
11. Notices. All notices pertaining to this Agreement shall be in writing
and shall be transmitted either by personal hand delivery or through the United
States Post Office by certified mail.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals to
this Agreement on the day and year first above written.
ALAMO RENT-A-CAR, INC.
By: /s/ D. Keith Cobb
-----------------------------
D. Keith Cobb
Chief Executive Officer
CONSULTANT:
/s/ Philip S. Shailer
-----------------------------
Philip S. Shailer
AGREEMENT
---------
EXHIBIT 10.2
THIS AGREEMENT is entered into as of the 13th day of March, 1996 by and
between ALAMO RENT A CAR, INC. a Florida corporation ("ALAMO"), ALASYS, LTD, A
Florida limited partnership ("ALASYS"), MOI OPERATIONS, INC., a Florida
corporation ("MOI") and EDWARD J. MORSE, an individual residing in Palm Beach
County, Florida ("MORSE").
WHEREAS, MOI owns several automobile dealerships (26 at the time of the
Agreement) and is experienced in the means and methods of purchasing automobiles
and repairing automobiles;
WHEREAS, ALAMO is in need of obtaining a continuing, dependable source of
supply of passenger automobiles for use in its daily rental fleet, which MOI is
willing to provide in accordance with the terms of this Agreement, and
WHEREAS, ALAMO is in need of obtaining dependable body repair services at
competitive rates; and
WHEREAS, ALASYS is in need of business referrals for the operation of its
business.
NOW THEREFORE, in consideration of the mutual promises contained herein,
the parties hereto agree as follows:
1. ALAMO agrees to purchase from MOI or an entity or entities designated
by MOI an aggregate of * new vehicles as are selected by ALAMO each year, for
each of three (3) calendar years commencing with the 1996 calendar year. The
vehicles shall be selected by ALAMO so long as the vehicles can be reasonably
supplied by dealerships in which MOI has an interest. *
* Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
<PAGE>
*MOI agrees it must have enough different types of dealerships to reasonably
supply the * vehicles based upon ALAMO's fleet plan. The price shall be at *
($*) over net dealer (true) cost per vehicle. If ALAMO purchases less than *
vehicles from MOI in any year, then ALAMO shall pay MOI * ($*) per vehicle for
each vehicle under * not purchased as liquidated damages, the payment to be
made within thirty (30) days of the end of the calendar year. ALAMO agrees to
pay for the cost of the vehicles purchased prior to MOI incurring interest on
MOI's floor plan for such vehicle. If ALAMO does not pay prior to the interest
being charged to MOI for such vehicle, then ALAMO agrees to reimburse MOI for
the interest MOI incurs on such vehicle.
2. MOI may effect the sales contemplated hereby through such franchised
automobile dealers as it may, from time to time, choose, so long as MOI has
sufficient different types of dealerships to reasonably supply the vehicles
ALAMO needs.
3. The term of this Agreement shall commence effective January 1, 1996 and
shall continue until December 31, 1998.
4. ALAMO agrees to make its best reasonable efforts to use body shops
located at MOI dealerships so long as the rates, service standards and payment
schedules are competitive with other body shops in the area in which the body
shop is located and the promptness for the completeness of the work is on a
priority basis
* Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
<PAGE>
to return the vehicle to rental status as soon as possible. If the rates,
service standards or payment schedules of a particular MOI body shop are not
competitive with other body shops in the area, then ALAMO need not use such
MOI body shop.
5. MOI agrees that each of its dealerships and body shops shall refer all
car rental business to ALASYS, except as that might be restricted for the 1996
model year at MORSE's four (4) Cadillac dealerships based on an existing
agreement between General Motors and Enterprise Rent A Car. MOI further agrees
to provide at no cost to ALASYS, subject only to space availability, parking
for ALASYS vehicles at each MOI location, access to the car washing and car
cleaning facilities at each location, and office space for an ALASYS
representative, initially in locations listed on Exhibit "A". If MOI fails to
make all such referrals or provide appropriate parking or facilities at each MOI
location, then ALAMO need not make the car purchases required in Paragraph 1.
If ALAMO elects not to make the purchases, then MOI need not provide space at
any of its dealerships nor refer its customers to ALASYS.
6. ALASYS agrees its price for vehicles it rents at the MOI locations
will be competitively priced with other car rental operations in the area.
7. MORSE agrees to serve as a member of the Board of Directors of
ALAMO, ALASYS and any other entity affiliated with ALAMO, and actively
participate on each Board to which MORSE is elected by such entities'
shareholders. MORSE agrees that he shall receive One Hundred Thousand
Dollars ($100,000) annually in total
<PAGE>
as a fee to serve as a member of all the Boards of Directors to which he is
elected. MORSE agrees that the fee may be paid to him in whatever amount each
entity may choose, so long as the annual total equals $100,000. MORSE also
agrees to serve on any Board committees to which he is appointed or elected,
such committees to include, but not be limited to, the Audit Committee,
Compensation Committee and Fleet Strategy Committee.
8. MOI and MORSE agree that if MOI or MORSE add one or more dealerships
and/or body shops, all commitments contained in this Agreement shall apply to
all such dealerships and/or body shops.
9. Exhibit "A" contains some additional specific terms to which the
parties have also agreed.
10. This Agreement shall be governed by and interpreted under the laws of
the State of Florida.
11. This Agreement may not be assigned without the written consent of all
the parties.
[signature page to follow]
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
MORSE OPERATIONS, INC. ALAMO RENT A CAR, INC.
By: /s/ Edward J. Morse By: /s/ Roger Ballou
------------------- -----------------
Edward J. Morse Roger Ballou,
Chief Operating Officer
/s/ Edward J. Morse ALASYS, LTD
--------------------
By: /s/ William H. Bondurant
------------------------
William H. Bondurant,
President ALASYS, INC.,
the general partner of
ALASYS, LTD.
<PAGE>
EXHIBIT "A"
MOI shall initially do the following specific items:
- ---------------------------------------------------
I. Provide physical space at the following dealerships:
- Buick in Davie -- upon expiration of lease w/Enterprise (90 days)
- Dodge in Coconut Creek - upon expiration of lease w/Enterprise (30
days)
- Chevrolet/Geo in Lauderhill - upon expiration of lease w/Enterprise
(60 days)
- Toyota in Sebring -- approximately 90 days with the depletion of
loaners
- Toyota in Delray -- approximately 90 days with the depletion of
loaners
- Northlake Bodyshop -- (upon completion of construction with
temporary location at Northlake Chevrolet)
II. Advise all other MOI locations to utilize ALAMO or ALASYS as their
rental car company and to promote the same through the General
Managers of each location.
III. Pick up damaged vehicles, estimate vehicles thru the CCC estimating
system, charge $* per flat rate hour with a * percent (*%)
discount off list price for GM parts and repair them to ALAMO
standards that apply to all manufacturer buyback parameters.
IV. Process and pay all rental bills in the appropriate amount of time,
within 30 days of receipt of statement.
ALAMO agrees to provide the following:
- -------------------------------------
I. Charge what the manufacturer will reimburse each franchise for
warranty vehicles, replacement or alternate transportation, inclusive
of taxes and surcharges.
II. Direct billing to all insurance companies.
III. Post any necessary signage at MOI locations.
IV. Develop a competitive internal rate for the dealerships when rentals
are paid for and absorbed by the dealership in either service or
bodyshop.
V. Utilize the MOI bodyshops wherever possible to repair damaged vehicles
located at non-airport locations.
VI. Estimates by MOI bodyshops will be reviewed by ALAMO using the CCC
computer estimating system.
* Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
<PAGE>
VII. Payment for all work done by MOI will be made within 30 days after
receipt of invoice.
VIII. ALAMO will provide, as accurate as possible, a timetable for other MOI
locations to begin using ALAMO's or ALASYS' rental services.
IX. ALAMO promises to treat your customers as you would treat them and add
to your overall customer satisfaction. Our service will adapt to your
operations and improve as per your suggestions.
X. ALAMO will provide its own phone line and computer terminal where we
will be on site.
XI. Provide a certificate evidencing that ALAMO carries workmens
compensation insurance for its employees as well as a certificate of
liability insurance (insuring risks including, but not limited to,
those arising out of the operation of ALAMO's motor vehicles as well
as those which arise out of the use by ALAMO of the office space in
the MOI dealerships) in the amount of $1,000,000 naming MOI as an
additional insured and certificate holder (which certificate shall
state that MOI will be provided with notice of cancellation or change
of coverage). Such insurance shall be with an authorized insurance
carrier, authorized to do business in the state of Florida and shall
have a current rating, at all times pertinent hereto of B+ or better
according to the A.M. Best Guide.
<TABLE> <S> <C>
<ARTICLE>5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0001004941
<NAME> ALAMO RENT-A-CAR, INC.
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 6-Mos
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-END> Jun-30-1996
<EXCHANGE-RATE> 1
<CASH> 18,436
<SECURITIES> 90,575
<RECEIVABLES> 163,107
<ALLOWANCES> 4,177
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 329,021
<DEPRECIATION> (116,263)
<TOTAL-ASSETS> 2,809,985
<CURRENT-LIABILITIES> 0
<BONDS> 2,228,279
0
0
<COMMON> 5
<OTHER-SE> 40,488
<TOTAL-LIABILITY-AND-EQUITY> 2,809,985
<SALES> 0
<TOTAL-REVENUES> 704,631
<CGS> 0
<TOTAL-COSTS> 205,512
<OTHER-EXPENSES> 446,076
<LOSS-PROVISION> 714
<INTEREST-EXPENSE> 67,350
<INCOME-PRETAX> (13,108)
<INCOME-TAX> 1,199
<INCOME-CONTINUING> (14,307)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (14,307)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
