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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission file number 1-13647
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DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 73-1356520
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5330 East 31st Street, Tulsa, Oklahoma 74135
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (918) 660-7700
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____
The number of shares outstanding of the registrant's Common Stock as of
April 30, 2000 was 24,162,365.
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1
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DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
FORM 10-Q
CONTENTS
Page
----
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.....................................3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS...........11
ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK...........................16
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.......................................17
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K........................17
SIGNATURES..................................................................18
FACTORS AFFECTING FORWARD LOOKING STATEMENTS
Some of the statements contained herein under "Management's Discussion
and Analysis of Financial Condition and Results of Operations" may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Although Dollar Thrifty Automotive Group, Inc.
believes such forward-looking statements are based on reasonable assumptions,
such statements are not guarantees of future performance and certain factors
could cause results to differ materially from current expectations. These
factors include: economic and competitive conditions in markets and countries
where our customers reside and where our companies and their franchisees
operate; changes in capital availability or cost; costs and other terms related
to the acquisition and disposition of automobiles, and certain regulatory and
environmental matters. Should one or more of these risks or uncertainties, among
others, materialize, actual results could vary materially from those estimated,
anticipated or projected. Dollar Thrifty Automotive Group, Inc. undertakes no
obligation to update or revise forward-looking statements to reflect changed
assumptions, the occurrence of unanticipated events or changes to future
operating results over time.
2
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors and Stockholders of
Dollar Thrifty Automotive Group, Inc.:
We have reviewed the accompanying consolidated balance sheet of Dollar Thrifty
Automotive Group, Inc. and subsidiaries as of March 31, 2000, and the related
consolidated statement of income, and the condensed consolidated statement of
cash flows for the three-month periods ended March 31, 2000 and 1999. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States of America, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to such consolidated financial statements for them to be in conformity
with accounting principles generally accepted in the United States of America.
We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet of
Dollar Thrifty Automotive Group, Inc. and subsidiaries as of December 31, 1999,
and the related consolidated statements of income, stockholders' equity, and
cash flows for the year then ended (not presented herein); and in our report
dated February 2, 2000, except for Note 17, as to which the date is March 2,
2000, we expressed an unqualified opinion on those consolidated financial
statements.
DELOITTE & TOUCHE LLP
Tulsa, Oklahoma
April 19, 2000
3
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DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
- --------------------------------------------------------------------------------
(In Thousands Except Per Share Data)
Three Months
Ended March 31,
--------------------------
(Unaudited)
2000 1999
----------- -----------
REVENUES:
Vehicle rentals $174,863 $150,315
Vehicle leasing 43,286 47,502
Fees and services 14,151 11,687
Other 2,123 2,047
----------- -----------
Total revenues 234,423 211,551
----------- -----------
COSTS AND EXPENSES:
Direct vehicle and operating 71,799 65,995
Vehicle depreciation and lease charges, net 73,726 69,636
Selling, general and administrative 46,197 43,920
Interest expense, net of interest income 20,619 19,851
Amortization of cost in excess of net
assets acquired 1,446 1,540
----------- -----------
Total costs and expenses 213,787 200,942
----------- -----------
INCOME BEFORE INCOME TAXES 20,636 10,609
INCOME TAX EXPENSE 9,324 5,212
----------- -----------
NET INCOME $ 11,312 $ 5,397
=========== ===========
EARNINGS PER SHARE:
Basic $ 0.47 $ 0.22
=========== ===========
Diluted $ 0.46 $ 0.22
=========== ===========
See notes to consolidated financial statements.
4
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DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
MARCH 31, 2000 AND DECEMBER 31, 1999
- --------------------------------------------------------------------------------
(In Thousands Except Share and Per Share Data)
March 31, December 31,
2000 1999
----------- -----------
(Unaudited)
ASSETS:
Cash and cash equivalents $ 89,460 $ 77,500
Restricted cash and investments 28,488 144,671
Receivables, net 131,966 140,156
Prepaid expenses and other assets 48,090 43,493
Revenue-earning vehicles, net 1,711,065 1,507,692
Property and equipment, net 72,455 69,941
Income taxes receivable - 10,573
Intangible assets, net 177,475 177,627
----------- -----------
$2,258,999 $2,171,653
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable $ 68,540 $ 57,242
Accrued liabilities 105,936 115,232
Income taxes payable 12,505 -
Deferred income tax liability 4,678 5,660
Public liability and property damage 53,177 58,783
Debt and other obligations 1,623,118 1,555,609
----------- -----------
Total liabilities 1,867,954 1,792,526
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value:
Authorized 10,000,000 shares;
none outstanding - -
Common stock, $.01 par value:
Authorized 50,000,000 shares;
issued and outstanding
24,162,365 and 24,158,429,
respectively 242 242
Additional capital 709,670 709,040
Accumulated deficit (318,152) (329,464)
Foreign currency translation adjustment (715) (691)
----------- -----------
391,045 379,127
----------- -----------
$2,258,999 $2,171,653
=========== ===========
See notes to consolidated financial statements.
5
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DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
- --------------------------------------------------------------------------------
(In Thousands)
Three Months
Ended March 31,
--------------------
(Unaudited)
2000 1999
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES $118,918 $ 72,929
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Revenue-earning vehicles:
Purchases (820,464) (816,989)
Proceeds from sales 536,760 449,352
Restricted cash and investments, net 116,183 26,069
Property and equipment
Purchases (4,494) (4,037)
Proceeds from sale 232 900
Acquisition of businesses, net of cash acquired (2,681) -
--------- ---------
Net cash used in investing activities (174,464) (344,705)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt and other obligations:
Proceeds 394,422 747,604
Payments (326,973) (480,119)
Issuance of common shares 57 -
Vehicle financing issue costs - (882)
--------- ---------
Net cash provided by financing activities 67,506 266,603
--------- ---------
CHANGE IN CASH AND CASH EQUIVALENTS 11,960 (5,173)
CASH AND CASH EQUIVALENTS:
Beginning of period 77,500 49,505
--------- ---------
End of period $ 89,460 $ 44,332
========= =========
SUPPLEMENTAL DISCLOSURE OF NONCASH
OPERATING AND INVESTING ACTIVITIES:
Direct financing leases of vehicles to franchisees $ 10,748 $ -
========= =========
See notes to consolidated financial statements.
6
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DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
- --------------------------------------------------------------------------------
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of
Dollar Thrifty Automotive Group, Inc. and its subsidiaries (the "Company").
The Company's significant wholly owned subsidiaries include Dollar Rent A
Car Systems, Inc. ("Dollar") and Thrifty, Inc. Thrifty, Inc. is the parent
company to Thrifty Rent-A-Car System, Inc. which is the parent company to
Thrifty Canada Ltd. ("TCL") (individually and collectively referred to as
"Thrifty").
The accounting policies set forth in Note 2 to the consolidated financial
statements contained in the Form 10-K filed with the Securities Exchange
Commission on March 22, 2000 have been followed in preparing the
accompanying consolidated financial statements.
The consolidated financial statements and notes thereto for interim periods
included herein have not been audited by independent public accountants. In
the Company's opinion, all adjustments (which include only normal recurring
adjustments) necessary for a fair presentation of the results of operations
for the interim periods have been made. Results for interim periods are not
necessarily indicative of results for a full year.
2. VEHICLE DEPRECIATION AND LEASE CHARGES, NET
Vehicle depreciation and lease charges includes the following (in
thousands):
Three Months
Ended March 31,
--------------------
2000 1999
-------- --------
Depreciation of revenue-earning vehicles, net $69,669 $67,895
Rents paid for vehicles leased 4,057 1,741
-------- --------
$73,726 $69,636
======== ========
7
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3. EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income by the weighted
average number of common shares outstanding during the period. Diluted
earnings per share is based on the combined weighted average number of
common shares and dilutive potential common shares outstanding which
include, where appropriate, the assumed exercise of options. In computing
diluted earnings per share, the Company has utilized the treasury stock
method.
The computation of weighted average common and common equivalent shares
used in the calculation of basic and diluted earnings per share ("EPS") is
shown below (in thousands except share and per share data):
Three Months
Ended March 31,
-------------------------
2000 1999
----------- -----------
Net income $ 11,312 $ 5,397
=========== ===========
Basic EPS:
Weighted average common shares 24,160,574 24,125,705
=========== ===========
Basic EPS $ 0.47 $ 0.22
=========== ===========
Diluted EPS:
Weighted average common shares 24,160,574 24,125,705
Shares contingently issuable:
Stock options 174,614 93,117
Performance awards 202,230 133,212
Director compensation shares deferred 14,955 9,109
----------- -----------
Shares applicable to diluted 24,552,373 24,361,143
=========== ===========
Diluted EPS $ 0.46 $ 0.22
=========== ===========
At March 31, 2000, options to purchase 2,107,984 shares of common stock
were outstanding but were not included in the computation of diluted
earnings per share because the exercise price was greater than the average
market price of the common shares.
8
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4. DEBT AND OTHER OBLIGATIONS
Debt and other obligations as of March 31, 2000 and December 31, 1999
consist of the following (in thousands):
March 31, December 31,
2000 1999
------------ -------------
Vehicle Debt and Obligations:
Asset backed notes, net of discount $ 1,343,371 $ 1,343,311
Commercial paper, net of discount 116,985 80,376
Other vehicle debt 113,178 86,452
Limited partner interest in limited
partnership 49,485 45,361
------------ -------------
1,623,019 1,555,500
Other Notes Payable 99 109
------------ -------------
Total debt and other obligations $ 1,623,118 $ 1,555,609
============ =============
On March 2, 2000, the Commercial Paper Program was renewed for a 364-day
period at a maximum size of $780 million, backed by a renewal of the
Liquidity Facility totaling $700 million.
5. BUSINESS SEGMENTS
The Company has two reportable segments: Dollar and Thrifty. These
reportable segments are strategic business units that offer different
products and services. They are managed separately based on the fundamental
differences in their operations. The contributions of these segments to
revenues and income before income taxes are summarized below (in
thousands):
For the Three Months
Ended March 31, 2000 Dollar Thrifty Other Total
----------------------------- ----------- --------- ------- -----------
Revenues $ 179,354 $ 54,969 $ 100 $ 234,423
Income before income taxes $ 15,647 $ 4,989 $ - $ 20,636
For the Three Months
Ended March 31, 1999 Dollar Thrifty Other Total
---------------------------- ----------- --------- ------- -----------
Revenues $ 154,555 $ 56,831 $ 165 $ 211,551
Income before income taxes $ 5,795 $ 4,814 $ - $ 10,609
9
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6. COMPREHENSIVE INCOME
Comprehensive income is comprised of the following (in thousands):
Three Months
Ended March 31,
---------------------
2000 1999
--------- ---------
Net income $ 11,312 $ 5,397
Foreign currency translation adjustment (24) 97
--------- ---------
Comprehensive income $ 11,288 $ 5,494
========= =========
7. CONTINGENCIES
Various claims and legal proceedings have been asserted or instituted
against the Company, including some purporting to be class actions, and
some which demand large monetary damages or other relief which could result
in significant expenditures. Litigation is subject to many uncertainties,
and the outcome of individual matters is not predictable with assurance.
The Company is also subject to potential liability related to environmental
matters. The Company establishes reserves for litigation and environmental
matters when the loss is probable and reasonably estimable. It is
reasonably possible that the final resolution of some of these matters may
require the Company to make expenditures, in excess of established
reserves, over an extended period of time and in a range of amounts that
cannot be reasonably estimated. The term "reasonably possible" is used
herein to mean that the chance of a future transaction or event occurring
is more than remote but less than likely. Although the final resolution of
any such matters could have a material effect on the Company's consolidated
operating results for the particular reporting period in which an
adjustment of the estimated liability is recorded, the Company believes
that any resulting liability should not materially affect its consolidated
financial position.
*******
10
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company, Dollar, Thrifty and their respective subsidiaries are
sometimes referred to in this report collectively as the "Group". The majority
of Dollar's revenue is derived from renting vehicles to customers from
company-owned stores, while the majority of Thrifty's revenue is generated from
leasing vehicles and providing services to franchisees.
Results of Operations
The following table sets forth the percentage of total revenues in the
Group's consolidated statement of income:
Three Months
Ended March 31
-----------------------
(Percentage of Revenue)
2000 1999
---------- ---------
Revenues:
Vehicle rentals 74.6% 71.1%
Vehicle leasing 18.5% 22.5%
Fees and services 6.0% 5.5%
Other 0.9% 0.9%
---------- ---------
Total revenues 100.0% 100.0%
---------- ---------
Costs and expenses:
Direct vehicle and operating 30.6% 31.2%
Vehicle depreciation and lease charges, net 31.4% 32.9%
Selling, general and administrative 19.7% 20.8%
Interest expense, net of interest income 8.8% 9.4%
Amortization of cost in excess of net
assets acquired 0.7% 0.7%
---------- ---------
Total costs and expenses 91.2% 95.0%
---------- ---------
Income before income taxes 8.8% 5.0%
Income tax expense 4.0% 2.5%
---------- ---------
Net income 4.8% 2.5%
========== =========
11
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The Group's two major sources of revenue are as follows:
Three Months
Ended March 31,
-------------------------
(In Thousands)
2000 1999
----------- ----------
Vehicle rental revenue:
Dollar $ 168,251 $ 144,310
Thrifty 6,612 6,005
----------- -----------
$ 174,863 $ 150,315
=========== ===========
Vehicle leasing revenue:
Dollar $ 5,144 $ 5,569
Thrifty 38,142 41,933
----------- -----------
$ 43,286 $ 47,502
=========== ===========
The following table sets forth certain selected operating data of the Group:
Three Months
Ended March 31,
--------------------------
2000 1999
------------ -----------
U.S. and Canada
Company-Owned Stores
Vehicle Rental Data:
Average number of vehicles operated 56,720 51,592
Number of rental days 4,366,460 3,990,482
Average revenue per day $ 40.05 $ 37.64
Monthly average revenue per vehicle $ 1,028 $ 971
Vehicle Leasing Data:
Average number of vehicles leased 31,370 34,146
Monthly average revenue per vehicle $ 460 $ 464
12
<PAGE>
Three Months Ended March 31, 2000 Compared with
Three Months Ended March 31, 1999
Revenues
Total revenues for the quarter ended March 31, 2000 increased $22.9
million, or 10.8%, to $234.4 million compared to the first quarter of 1999. The
growth in total revenue was due to a 16.3% increase in vehicle rental revenue
and a 21.1% increase in fees and services revenue partially offset by a decline
in vehicle leasing revenue of 8.9%.
The Group's vehicle rental revenue for the first quarter of 2000 was
$174.9 million, a $24.5 million increase (a $23.9 million increase for Dollar
and a $0.6 million increase at Thrifty) from the first quarter of 1999. The
growth in vehicle rental revenue at Dollar was the result of an increase of 9.7%
in rental days combined with a 6.3% increase in rate per day. The vehicle rental
revenue growth at Dollar that related to the acquisition of franchise operations
was $0.5 million in the first quarter of 2000.
Vehicle leasing revenue for the first quarter of 2000 was $43.3
million, a $4.2 million, or 8.9% decline from the first quarter of 1999. This
decline is due primarily to a modification of the lease program at Thrifty that
eliminated certain incentives previously made available to franchisees with a
corresponding reduction in the lease rate. In addition, Thrifty made some
vehicles available under direct financing leases as opposed to operating leases.
While the changes made by Thrifty resulted in a reduction of vehicle leasing
revenue, they had no impact on operating income. Thrifty also experienced a
decline in the number of vehicles leased during the first quarter.
Fees and services revenue increased 21.1% to $14.2 million as compared
to the first quarter of 1999 due to growth in franchisee rental revenue.
Expenses
Total expenses increased 6.4% from $200.9 million in the first quarter
of 1999 to $213.8 million in the first quarter of 2000. This increase was due
primarily to a $14.9 million, or 10.0% increase at Dollar offset by a $2.0
million, or 3.9% decline at Thrifty. Total expenses as a percentage of revenue
declined to 91.2% in the first quarter of 2000 from 95.0% in the first quarter
of 1999.
Direct and vehicle operating expenses for the first quarter of 2000
increased $5.8 million, or 8.8%, over the 1999 first quarter, comprised of a
$6.2 million increase at Dollar and a $0.4 million decrease at Thrifty. The
overall increase at Dollar was due to higher airport concession rents, personnel
and vehicle operating costs partially offset by lower insurance costs. The
decrease at Thrifty was due primarily to the change in the lease program
structure discussed above.
Net vehicle depreciation expense and lease charges increased $4.1
million, or 5.9%, in the first quarter of 2000 as compared to the first quarter
of 1999, consisting of a $5.7 million increase at Dollar offset by a $1.6
million decrease at Thrifty. Vehicle depreciation expense increased $3.2
million, or 4.5%, due to a 1.7% increase in depreciable fleet (7.0% increase at
Dollar and a 6.7% decrease at Thrifty) and a 2.8% increase in the average
depreciation rate (3.1% increase at Dollar and a 1.6% increase at Thrifty). Net
vehicle gains on the disposal of non-program vehicles were $4.2 million for the
first quarter of 2000 and $2.8 million for the first quarter of 1999. Lease
charges, for vehicles leased from third parties, increased $2.3 million due to
an increase in the number of vehicles leased in the first quarter of 2000.
Selling, general and administrative expenses of $46.2 million for the
first quarter of 2000 increased 5.2% from $43.9 million in the first quarter of
1999, comprised of a $2.3 million increase at Dollar and a $0.1 million decrease
at Thrifty. The increase was due primarily to higher personnel costs.
13
<PAGE>
Net interest expense increased $0.8 million, or 3.9% to $20.6 million
primarily due to higher average vehicle debt and interest rates in the first
quarter of 2000 as compared to the first quarter of 1999 partially offset by an
increase in the interest earned on invested restricted cash.
The effective tax rate for the first quarter of 2000 was 45.2%. This
tax rate differs from the U.S. statutory rate due primarily to non-deductible
amortization of costs in excess of net assets acquired, state and local taxes
and losses relating to TCL for which no benefit was recorded. The improvement in
the effective rate as compared to the first quarter of 1999 was due to higher
U.S. pre-tax income and improved results in Canada in the first quarter of 2000.
Interim reporting requirements for applying separate, annual effective
income tax rates to U.S. and Canadian operations, combined with the seasonal
impact of Canadian operations, will cause significant variations in the
Company's quarterly consolidated effective income tax rates.
Operating Results
Income before income taxes increased $10.0 million, or 94.5% to $20.6
million for the first quarter of 2000. This growth was due to a $9.8 million
increase at Dollar and a $0.2 million increase at Thrifty.
Seasonality
The Group's business is subject to seasonal variations in customer
demand, with the summer vacation period representing the peak season for vehicle
rental. During the peak season, the Group increases its rental 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 annual performance of the Group. The first and fourth
quarters for the Group's rental operations are generally the weakest, when there
is limited leisure travel and a greater potential for adverse weather
conditions. Many of the operating expenses such as rent, general insurance and
administrative personnel are fixed and cannot be reduced during periods of
decreased rental demand.
Liquidity and Capital Resources
The Group's primary cash requirements are for the acquisition of
revenue-earning vehicles and to fund its U.S. and Canadian operations. For the
three months ended March 31, 2000, cash provided by operating activities was
$118.9 million.
Cash used in investing activities was $174.5 million. The principal use
of cash in investing activities was the purchase of revenue-earning vehicles,
which totaled $820.5 million ($518.5 million at Dollar and $302.0 million at
Thrifty) which was partially offset by $536.8 million ($308.2 million at Dollar
and $228.6 million at Thrifty) in proceeds from the sale of used revenue-earning
vehicles. The Group's need for cash to finance vehicles is highly seasonal and
typically peaks in the second and third quarters of the year when fleet levels
build to meet seasonal rental demand. The Group expects to continue to fund its
revenue-earning vehicles with cash provided from operations and increased
secured vehicle financing. Restricted cash and investments decreased $116.2
million for the three months ended March 31, 2000. Restricted cash and
investments are restricted for the acquisition of revenue-earning vehicles and
other specified uses under the asset backed notes discussed below. The Group
also used cash for the purchase of non-vehicle capital expenditures of $4.7
million. These expenditures consist primarily of airport facility improvements
for the Group's rental locations and investments in information technology
equipment and systems. Dollar also acquired the franchised operations of its
largest Texas licensee on March 13, 2000, which used $2.7 million of cash, net
of assets acquired and liabilities assumed. These expenditures are financed with
cash provided from operations.
14
<PAGE>
The Group has significant requirements for bonds and letters of credit
to support its insurance programs and airport concession commitments. At March
31, 2000, the insurance companies had issued approximately $76.4 million in
bonds to secure these obligations.
Asset Backed Notes
The asset backed note program at March 31, 2000 was comprised of $1.34
billion in asset backed notes with maturities ranging from 2000 to 2005.
Borrowings under the asset backed notes are secured by eligible vehicle
collateral and bear interest at fixed rates on $1.3 billion ranging from 5.90%
to 7.10% and floating rates on $37.4 million ranging from LIBOR plus .95% to
LIBOR plus 1.25%. Proceeds from the asset backed notes that are temporarily
unutilized for financing vehicles and certain related receivables are maintained
in restricted cash and investment accounts, which were approximately $24.6
million at March 31, 2000.
Commercial Paper Program and Liquidity Facility
Effective March 2, 2000, the Commercial Paper Program was renewed for
another 364-day period at a maximum size of $780 million, backed by a renewal of
the Liquidity Facility, which was increased to $700 million. The Commercial
Paper Program and the Liquidity Facility are renewable annually. Borrowings
under the Commercial Paper Program are secured by eligible vehicle collateral
and bear interest based on market-dictated commercial paper rates. At March 31,
2000, the Group had $117.0 million in commercial paper outstanding.
Other Vehicle Debt
At March 31, 2000, other vehicle debt included borrowings of $102.5
million under revolving lines of credit with a vehicle manufacturers finance
subsidiary which bears interest at rates based on commercial paper rates. Also
included in other vehicle debt are borrowings of $5.1 million under a $12
million revolving line of credit from a bank which bears interest at rates based
on LIBOR. These lines are collateralized by the vehicles financed under the
facilities.
Limited Partner Interest in Limited Partnership
In February 1999, the TCL Funding Limited Partnership ("Partnership")
was created with TCL as the General Partner and an unrelated bank's conduit as
the Limited Partner. The Limited Partner's interest is reflected in Note 4 of
the Notes to Consolidated Financial Statements as Limited Partner Interest in
Limited Partnership.
The Partnership agreement has a five-year term with the purpose to
purchase, own, lease and rent vehicles throughout Canada. The Limited Partner
has committed to funding approximately CDN$150 million to the Partnership which
they fund through the issuance and sale of notes in the Canadian commercial
paper market.
Due to the nature of the relationship between TCL and the Partnership,
the consolidated statements include the accounts of the Partnership. The Limited
Partner's income share was $652,000 for the three months ended March 31, 2000,
which is included in the Consolidated Statement of Income as interest expense.
At March 31, 2000, TCL had $1.7 million outstanding under a revolving
line of credit, which is reflected in Note 4 of the Notes to Consolidated
Financial Statements as other vehicle debt. The line of credit supports TCL's
investment in the Partnership.
15
<PAGE>
Revolving Credit Facility
The Company has a $215 million five-year, senior secured, revolving
credit facility (the "Revolving Credit Facility") that expires in December 2002.
The Revolving Credit Facility is used to provide letters of credit with a
sublimit of $190 million and cash for operating activities with a sublimit of
$70 million. The Group had letters of credit outstanding under the Revolving
Credit Facility of approximately $31.5 million and no working capital borrowings
at March 31, 2000.
DaimlerChrysler Credit Support
DaimlerChrysler Corporation ("DaimlerChrysler") provides credit support
for the Group's vehicle fleet financing in the form of a letter of credit
facility. The letter of credit amount declines annually over five years, which
began September 30, 1999, by the greater of $5.7 million or 50% of the Group's
excess cash flow, as defined. The credit support amount was approximately $22.8
million at March 31, 2000. The Company may need to replace reductions in the
letter of credit amount with cash from operations or with borrowings or letters
of credit under the Revolving Credit Facility. To secure reimbursement
obligations under the DaimlerChrysler credit support agreement, DaimlerChrysler
has liens and security interests on certain assets of the Group.
New Accounting Standards
SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," establishes accounting and reporting standards for derivative
instruments and for hedging activities. It requires that all derivatives be
recognized as either assets or liabilities in the statement of financial
position and be measured at fair value. During 1999, the Financial Accounting
Standards Board delayed the effective date of SFAS No. 133 for one year to
fiscal years beginning after June 15, 2000. SFAS No. 133 is effective for the
Company beginning January 1, 2001. The Company plans to adopt the standard when
required.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The following information about the Group's market sensitive financial
instruments constitutes a "forward-looking" statement. The Group's primary
market risk exposure is changing interest rates, primarily in the United States.
The Group's policy is to manage interest rates through use of a combination of
fixed and floating rate debt. A portion of the Group's borrowings are
denominated in Canadian dollars which exposes the Group to market risk
associated with exchange rate fluctuations. The Group has entered into no
hedging or derivative transactions. All items described are non-trading and are
stated in U.S. Dollars.
At March 31, 2000, there were no significant changes in the Group's
quantitative disclosures about market risk compared to December 31, 1999, which
is included under Item 7A of the Company's most recent Form 10-K.
16
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In addition to the foregoing, various legal actions, claims and
governmental inquiries and proceedings are pending or may be instituted or
asserted in the future against the Company and its subsidiaries. Litigation is
subject to many uncertainties, and the outcome of the individual litigated
matters is not predictable with assurance. It is possible that certain of the
actions, claims, inquiries or proceedings, including those discussed above,
could be decided unfavorably to the Company or the subsidiaries involved.
Although the amount of liability with respect to these matters cannot be
ascertained, potential liability is not expected to materially affect the
consolidated financial position or results of operations of the Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
[a] Index of Exhibits
Exhibit 4.25 Supplement No. 4 to Series 1998-1 Supplement dated as
of February 18, 2000, among Rental Car Finance Corp.,
Dollar, Thrifty, the Company, Bankers Trust Company,
Credit Suisse First Boston and Dollar Thrifty Funding
Corp.
Exhibit 4.26 Extension Agreement dated as of February 18, 2000,
among Dollar Thrifty Funding Corp., certain financial
institutions, as the Liquidity Lenders, and Credit
Suisse First Boston.
Exhibit 4.27 Amendment No. 3 to Liquidity Agreement dated as of
February 18, 2000, among Dollar Thrifty Funding Corp.
certain financial institutions, as the Liquidity
Lenders, and Credit Suisse First Boston.
Exhibit 27.1 Financial Data Schedule (EDGAR version only)
[b] Reports on Form 8-K
No report on Form 8-K was filed by the Company during or
applicable to the quarter ended March 31, 2000.
17
<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, in the City of Tulsa, Oklahoma, on
May 9, 2000.
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
By: /s/ JOSEPH E. CAPPY
--------------------------------------------
Name: Joseph E. Cappy
Title: President and Principal Executive Officer
By: /s/ STEVEN B. HILDEBRAND
--------------------------------------------
Name: Steven B. Hildebrand
Title: Vice President, Principal Financial Officer
and Principal Accounting Officer
18
<PAGE>
SUPPLEMENT NO. 4
TO
SERIES 1998-1 SUPPLEMENT
dated as of February 18, 2000
among
RENTAL CAR FINANCE CORP.,
DOLLAR RENT A CAR SYSTEMS, INC.,
THRIFTY RENT-A-CAR SYSTEM, INC.,
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.,
BANKERS TRUST COMPANY,
as Trustee and Enhancement Agent
CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH,
as the Series 1998-1 Letter of
Credit Provider
and
DOLLAR THRIFTY FUNDING CORP.,
as the sole Series 1998-1 Noteholder
-1-
<PAGE>
SUPPLEMENT NO. 4
TO SERIES 1998-1 SUPPLEMENT
This Supplement No. 4 to Series 1998-1 Supplement dated as of February 18,
2000 ("Supplement No. 4"), among Rental Car Finance Corp., an Oklahoma
corporation ("RCFC"), Dollar Rent A Car Systems, Inc., an Oklahoma corporation
("Dollar"), Thrifty Rent-A-Car System, Inc., an Oklahoma corporation
("Thrifty"), Dollar Thrifty Automotive Group, Inc., a Delaware corporation
("DTAG"), Bankers Trust Company, a New York banking corporation, as Trustee and
Enhancement Agent (the "Trustee"), Credit Suisse First Boston, New York Branch,
as the Series 1998-1 Letter of Credit Provider ("CSFB"), and Dollar Thrifty
Funding Corp., an Oklahoma corporation, as the sole Series 1998-1 Noteholder
("DTFC")(RCFC, Dollar, Thrifty, DTAG, the Trustee, CSFB and DTFC are
collectively referred to herein as the "Parties").
RECITALS:
A. RCFC, as Issuer, and the Trustee entered into that certain Base
Indenture dated as of December 13, 1995, as amended by the Amendment to Base
Indenture dated as of December 23, 1997 (the "Base Indenture"); and
B. RCFC and the Trustee entered into that certain Series 1998-1
Supplement dated as of March 4, 1998, as subsequently (i) amended by Amendment
No. 1 to Series 1998-1 Supplement dated as of March 4, 1999, (ii) supplemented
by Supplement No. 1 to Series 1998-1 Supplement dated as of March 4, 1999, (iii)
supplemented by Supplement No. 2 to Series 1998-1 Supplement dated as of March
4, 1999, and (iv) supplemented by Supplement No. 3 to Series 1998-1 Supplement
dated as of October 20, 1999 (as amended to the date hereof, the "Series 1998-1
Supplement"; the Base Indenture and any Supplement thereto, including the Series
1998-1 Supplement are collectively referred to herein as the "Indenture"); and
C. The Parties wish to amend the Series 1998-1 Supplement as provided
herein.
NOW THEREFORE, the Parties hereto agree as follows:
1. Definitions. Capitalized terms used in this Supplement No. 4 not herein
defined shall have the meaning contained in the Series 1998-1 Supplement and if
not defined therein shall have the meaning set forth in the Definitions List
attached as Schedule 1 to the Base Indenture.
2. Amendments. Section 4A.1 of the Series 1998-1 Supplement is hereby
amended by deleting the reference to "$640,000,000" and replacing it with
"$780,000,000".
3. Effect of Supplement. Except as expressly set forth herein, this
Supplement No. 4 shall not by implication or otherwise limit, impair, constitute
a waiver of, or otherwise affect the rights and remedies of any of the Parties
hereto under the Series 1998-1 Supplement, nor alter, modify, amend or in any
way affect any of the terms, conditions, obligations, covenants or
-2-
<PAGE>
agreements contained in the Series 1998-1 Supplement, all of which are hereby
ratified and affirmed in all respected by each of the Parties hereto and shall
continue in full force and effect. This Supplement No. 4 shall apply and be
effective only with respect to the provisions of the Series 1998- 1 Supplement
specifically referred to herein and any references in the Series 1998-1
Supplement to the provisions of the Series 1998-1 Supplement specifically
referred to herein shall be to such provisions as amended by this Supplement No.
4.
4. Applicable Provisions. Pursuant to Section 11.2 of the Base Indenture
and Section 8.6 of the Series 1998-1 Supplement, the Trustee, RCFC, the
Servicers, the Required Noteholders with respect to the Series 1998-1 Notes and
the Series 1998-1 Letter of Credit Provider may enter into a supplement to the
Indenture for the purpose of amending any provisions of the Series 1998-1
Supplement provided that the Rating Agencies shall confirm that such supplement
will not result in the reduction or withdrawal of their ratings applicable to
the Commercial Paper Notes and, as evidenced by an Opinion of Counsel, such
supplement affects only the Series 1998-1 Noteholders.
5. Waiver of Notice. Each of the Parties hereto waives any prior notice and
any notice period that may be required by any other agreement or document in
connection with the execution of this Supplement No. 4.
6. Binding Effect. This Supplement No. 4 shall be binding upon and inure to
the benefit of the Parties and their respective successors and assigns.
7. GOVERNING LAW. THIS SUPPLEMENT NO. 4 SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PROVISIONS
THEREOF REGARDING CONFLICTS OF LAWS), AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HERETO SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
8. Counterparts. This Supplement No. 4 may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when executed and delivered shall be deemed to be an original and all of
which taken together shall constitute but one and the same agreement.
[SIGNATURES ON FOLLOWING PAGES]
-2-
<PAGE>
IN WITNESS WHEREOF, the Parties have caused this Supplement No. 4 to be
duly executed and delivered as of the day and year first above written.
RCFC:
RENTAL CAR FINANCE CORP.,
an Oklahoma corporation
By: ___________________________________________
Pamela S. Peck
Vice President
TRUSTEE:
BANKERS TRUST COMPANY, a New York banking
corporation, as Trustee and Enhancement Agent
By: ___________________________________________
Name: _________________________________________
Title: ________________________________________
SERVICERS:
DOLLAR RENT A CAR SYSTEMS, INC.,
an Oklahoma corporation
By: __________________________________________
Michael H. McMahon
Treasurer
THRIFTY RENT-A-CAR SYSTEM, INC.,
an Oklahoma corporation
By: __________________________________________
Pamela S. Peck
Treasurer
-3-
<PAGE>
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.,
a Delaware corporation
By: ______________________________________
Pamela S. Peck
Treasurer
SERIES 1998-1 LETTER OF CREDIT PROVIDER:
CREDIT SUISSE FIRST BOSTON, NEW YORK
BRANCH, a Swiss banking corporation
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
SOLE SERIES 1998-1 NOTEHOLDER:
DOLLAR THRIFTY FUNDING CORP.,
an Oklahoma corporation
By: ______________________________________
Pamela S. Peck
Vice President
-4-
EXTENSION AGREEMENT
dated as of February 18, 2000
among
DOLLAR THRIFTY FUNDING CORP.,
CERTAIN FINANCIAL INSTITUTIONS,
as the Liquidity Lenders
and
CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH,
as Liquidity Agent
<PAGE>
EXTENSION AGREEMENT
THIS EXTENSION AGREEMENT (this "Agreement") dated as of February 18,
2000, is entered into among Dollar Thrifty Funding Corp., an Oklahoma
corporation ("DTFC"), the undersigned financial institutions (the "Liquidity
Lenders"), Credit Suisse First Boston, New York Branch, a Swiss banking
corporation ("Liquidity Agent"), The Chase Manhattan Bank, not as a party but as
Syndication Agent, and The Bank of Nova Scotia, not as a party but as Document
Agent.
RECITALS:
A. The undersigned are parties to that certain Liquidity Agreement
dated as of March 4, 1998, among DTFC, the Liquidity Lenders, the Liquidity
Agent and The Chase Manhattan Bank, not as a party but as Syndication Agent, as
subsequently amended by (i) Amendment No. 1 to Liquidity Agreement dated as of
March 4, 1999, and (ii) Amendment No. 2 to Liquidity Agreement dated as of
October 20, 1999 (as amended to the date hereof, the "Liquidity Agreement"); and
B. The undersigned desire to extend the Scheduled Liquidity Commitment
Termination Date from March 2, 2000 to February 28, 2001.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions. Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Definitions List annexed to the
Liquidity Agreement as Annex A, as such Definitions List has heretofore been or
may hereafter be amended or modified from time to time in accordance with the
provisions of the Liquidity Agreement.
2. Extension. Pursuant to Section 3.5 of the Liquidity Agreement, the
Scheduled Liquidity Commitment Termination Date is hereby extended until
February 28, 2001.
3. Condition to Effectiveness. The effectiveness of this Agreement shall be
conditioned upon the effectiveness of that certain Amendment No. 3 to Liquidity
Agreement dated as of the date hereof among DTFC, the financial institutions
parties thereto, and the Liquidity Agent.
4. Continuing Accuracy of Representations and Warranties. The
representations and warranties of DTFC in each of the CP Program Documents to
which DTFC is a party are true and correct (in all material respects to the
extent such representations and warranties do not incorporate a materiality
limitation on their terms) on the date of this Agreement as though made on and
as of the date of this Agreement.
5. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns.
-1-
<PAGE>
6. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PROVISIONS THEREOF
REGARDING CONFLICTS OF LAWS), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HERETO SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
7. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when executed and delivered shall be deemed to be an original and all of
which taken together shall constitute but one and the same agreement.
[SIGNATURES ON FOLLOWING PAGES]
-2-
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed and delivered as of the day and year first above written.
DTFC:
DOLLAR THRIFTY FUNDING CORP.,
an Oklahoma corporation
By: _____________________________________
Pamela S. Peck
Vice President
LIQUIDITY AGENT:
CREDIT SUISSE FIRST BOSTON, NEW YORK
BRANCH, a Swiss banking corporation
By: _____________________________________
Name: __________________________
Title: _________________________
By: _____________________________________
Name: __________________________
Title: _________________________
-3-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$75,000,000 CREDIT SUISSE FIRST BOSTON, NEW YORK
BRANCH, a Swiss banking corporation
By: ________________________________________
Name: _____________________________
Title: ____________________________
By: ________________________________________
Name: _____________________________
Title: ____________________________
-4-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$65,000,000 THE CHASE MANHATTAN BANK
By: ________________________________________
Name: _____________________________
Title: ____________________________
-5-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$50,000,000 ING (U.S.) CAPITAL, LLC
By: ________________________________________
Name: _____________________________
Title: ____________________________
-6-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$70,000,000 THE BANK OF NOVA SCOTIA
By: ________________________________________
Name: _____________________________
Title: ____________________________
-7-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$50,000,000 ABN AMRO BANK N.V.
By: ________________________________________
Name: _____________________________
Title: ____________________________
By: ________________________________________
Name: _____________________________
Title: ____________________________
-8-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$40,000,000 CREDIT INDUSTRIEL ET COMMERCIAL
By: ________________________________________
Name: _____________________________
Title: ____________________________
By: ________________________________________
Name: _____________________________
Title: ____________________________
-9-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$40,000,000 DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By: ________________________________________
Name: _____________________________
Title: ____________________________
By: ________________________________________
Name: _____________________________
Title: ____________________________
-10-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$25,000,000 FLEET NATIONAL BANK
By: ________________________________________
Name: _____________________________
Title: ____________________________
-11-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$25,000,000 BBL INTERNATIONAL (U.K.) LTD
By: ________________________________________
Name: _____________________________
Title: ____________________________
By: ________________________________________
Name: _____________________________
Title: ____________________________
-12-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$30,000,000 BANK OF MONTREAL
By: ________________________________________
Name: _____________________________
Title: ____________________________
-13-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$50,000,000 BANK ONE, TEXAS N.A.
By: ________________________________________
Name: _____________________________
Title: ____________________________
By: ________________________________________
Name: _____________________________
Title: ____________________________
-14-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$30,000,000 BAYERISCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH
By: ________________________________________
Name: _____________________________
Title: ____________________________
By: ________________________________________
Name: _____________________________
Title: ____________________________
-15-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$25,000,000 COMERICA BANK
By: ________________________________________
Name: _____________________________
Title: ____________________________
-16-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$25,000,000 MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By: ________________________________________
Name: _____________________________
Title: ____________________________
-17-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$50,000,000 DEUTSCHE BANK AG, NEW YORK A/O
CAYMAN ISLANDS BRANCHES
By: ________________________________________
Name: _____________________________
Title: ____________________________
-18-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$25,000,000 KBC BANK
By: ________________________________________
Name: _____________________________
Title: ____________________________
-19-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$25,000,000 WELLS FARGO BANK
By: ________________________________________
Name: _____________________________
Title: ____________________________
-20-
AMENDMENT NO. 3
TO
LIQUIDITY AGREEMENT
dated as of February 18, 2000
among
DOLLAR THRIFTY FUNDING CORP.,
CERTAIN FINANCIAL INSTITUTIONS,
as the Liquidity Lenders
and
CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH,
as Liquidity Agent and
as Series 1998-1 Letter of Credit Provider
<PAGE>
AMENDMENT NO. 3
TO LIQUIDITY AGREEMENT
This Amendment No. 3 to Liquidity Agreement dated as of February 18,
2000 ("Amendment"), among Dollar Thrifty Funding Corp., an Oklahoma corporation
("DTFC"), the undersigned financial institutions (the "Liquidity Lenders"),
Credit Suisse First Boston, New York Branch, a Swiss banking corporation, as
Liquidity Agent and as Series 1998-1 Letter of Credit Provider ("CSFB") (DTFC,
the Liquidity Lenders and CSFB are collectively referred to herein as the
"Parties"), The Chase Manhattan Bank, not as a party but as Syndication Agent,
and The Bank of Nova Scotia, not as a party but as Document Agent.
RECITALS:
A. The Parties are parties to that certain Liquidity Agreement dated as of
March 4, 1998, among DTFC, the Liquidity Lenders, the Liquidity Agent and The
Chase Manhattan Bank, not as a party but as Syndication Agent, as subsequently
amended by (i) Amendment No. 1 to Liquidity Agreement dated as of March 4, 1999,
and (ii) Amendment No. 2 to Liquidity Agreement dated as of October 20, 1999 (as
amended to the date hereof, the "Liquidity Agreement"); and
B. Contemporaneously herewith, the Parties are entering into that certain
Extension Agreement whereby the Scheduled Liquidity Commitment Termination Date
is being extended until February 28, 2001; and
C. As a result of such extension, the Parties wish to amend the Liquidity
Agreement as provided herein.
NOW THEREFORE, the Parties hereto agree as follows:
1. Definitions. Capitalized terms used in this Amendment not herein defined
shall have the meaning contained in the Liquidity Agreement.
2. Amendments. The Liquidity Agreement is hereby amended as follows:
(a) By deleting Section 4.5(a) thereof in its entirety and replacing
it with the following:
"SECTION 4.5 Fees. (a) Commitment Fee. DTFC agrees to
pay to the Liquidity Agent for the account of each
Liquidity Lender an ongoing commitment fee (the
"Commitment Fee") equal to 0.25% per annum of the
average daily unused portion of each such Liquidity
Lender's Liquidity Commitment, such fee to accrue
from March 2, 2000 (the "Closing Date")
-1-
<PAGE>
until the Liquidity Commitment Termination Date. The
Commitment Fee shall be computed based on the actual
number of days elapsed and a 360 day year. The
Commitment Fee shall be payable in arrears on the
last Business Day of each calendar quarter occurring
after the Closing Date and on the Liquidity
Commitment Termination Date."
(b) By deleting the definition of "Fee Letter" appearing in Annex A to
the Liquidity Agreement in its entirety and replacing it with the
following:
"Fee Letter" means that certain fee letter dated
February 18, 2000 among DTFC, Credit Suisse First
Boston, New York Branch, and The Chase Manhattan
Bank, as the same may be amended, restated, replaced
or otherwise modified from time to time."
3. Effect of Amendment. Except as expressly set forth herein, this
Amendment shall not by implication or otherwise limit, impair, constitute a
waiver of, or otherwise affect the rights and remedies of any of the
Parties hereto under the Liquidity Agreement, nor alter, modify, amend or
in any way affect any of the terms, conditions, obligations, covenants or
agreements contained in the Liquidity Agreement, all of which are hereby
ratified and affirmed in all respects by each of the Parties hereto and
shall continue in full force and effect. This Amendment shall apply and be
effective only with respect to the provisions of the Liquidity Agreement
specifically referred to herein and any references in the Liquidity
Agreement to the provisions of the Liquidity Agreement specifically
referred to herein shall be to such provisions as amended by this
Amendment.
4. Applicable Provision. Pursuant to Section 11.1 of the Liquidity
Agreement, the Liquidity Agreement may be amended by DTFC, CSFB, as the
Series 1998-1 Letter of Credit Provider, and the Majority Banks.
5. Condition to Effectiveness. The effectiveness of this Amendment
shall be conditioned upon the effectiveness of that certain Extension
Agreement dated as of the date hereof among DTFC, the financial
institutions parties thereto, and CSFB.
6. Continuing Accuracy of Representations and Warranties. The
representations and warranties of DTFC in each of the CP Program Documents
to which DTFC is a party are true and correct (in all material respects to
the extent such representations and warranties do not incorporate a
materiality limitation on their terms) on the date of this Amendment as
though made on and as of the date of this Amendment.
-2-
<PAGE>
7. Waiver of Notice. Each of the Parties hereto waives any prior
notice and any notice period that may be required by any other agreement or
document in connection with the execution of this Amendment.
8. Binding Effect. This Amendment shall be binding upon and inure to
the benefit of the Parties and their respective successors and assigns.
9. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PROVISIONS
THEREOF REGARDING CONFLICTS OF LAWS), AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
10. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each
of which when executed and delivered shall be deemed to be an original and
all of which taken together shall constitute but one and the same
agreement.
[SIGNATURES ON FOLLOWING PAGES]
-3-
<PAGE>
IN WITNESS WHEREOF, the Parties have caused this Amendment to be duly
executed and delivered as of the day and year first above written.
DTFC:
DOLLAR THRIFTY FUNDING CORP.,
an Oklahoma corporation
By: _______________________________________
Pamela S. Peck
Vice President
LIQUIDITY AGENT:
CREDIT SUISSE FIRST BOSTON, NEW YORK
BRANCH, a Swiss banking corporation
By: ________________________________________
Name: _____________________________
Title: ____________________________
By: ________________________________________
Name: _____________________________
Title: ____________________________
SERIES 1998-1 LETTER OF CREDIT
PROVIDER:
CREDIT SUISSE FIRST BOSTON, NEW YORK
BRANCH, a Swiss banking corporation
By: ________________________________________
Name: _____________________________
Title: ____________________________
By: ________________________________________
Name: _____________________________
Title: ____________________________
-4-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$75,000,000 CREDIT SUISSE FIRST BOSTON, NEW YORK
BRANCH, a Swiss banking corporation
By: ________________________________________
Name: _____________________________
Title: ____________________________
By: ________________________________________
Name: _____________________________
Title: ____________________________
-5-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$65,000,000 THE CHASE MANHATTAN BANK
By: ________________________________________
Name: _____________________________
Title: ____________________________
-6-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$50,000,000 ING (U.S.) CAPITAL, LLC
By: ________________________________________
Name: _____________________________
Title: ____________________________
-7-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$70,000,000 THE BANK OF NOVA SCOTIA
By: ________________________________________
Name: _____________________________
Title: ____________________________
-8-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$50,000,000 ABN AMRO BANK N.V.
By: ________________________________________
Name: _____________________________
Title: ____________________________
By: ________________________________________
Name: _____________________________
Title: ____________________________
-9-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$40,000,000 CREDIT INDUSTRIEL ET COMMERCIAL
By: ________________________________________
Name: _____________________________
Title: ____________________________
By: ________________________________________
Name: _____________________________
Title: ____________________________
-10-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$40,000,000 DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By: ________________________________________
Name: _____________________________
Title: ____________________________
By: ________________________________________
Name: _____________________________
Title: ____________________________
-11-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$25,000,000 FLEET NATIONAL BANK
By: ________________________________________
Name: _____________________________
Title: ____________________________
-12-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$25,000,000 BBL INTERNATIONAL (U.K.) LTD
By: ________________________________________
Name: _____________________________
Title: ____________________________
By: ________________________________________
Name: _____________________________
Title: ____________________________
-13-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$30,000,000 BANK OF MONTREAL
By: ________________________________________
Name: _____________________________
Title: ____________________________
-14-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$50,000,000 BANK ONE, TEXAS N.A.
By: ________________________________________
Name: _____________________________
Title: ____________________________
By: ________________________________________
Name: _____________________________
Title: ____________________________
-15-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$30,000,000 BAYERISCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH
By: ________________________________________
Name: _____________________________
Title: ____________________________
By: ________________________________________
Name: _____________________________
Title: ____________________________
-16-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$25,000,000 COMERICA BANK
By: ________________________________________
Name: _____________________________
Title: ____________________________
-17-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$25,000,000 MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By: ________________________________________
Name: _____________________________
Title: ____________________________
-18-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$50,000,000 DEUTSCHE BANK AG, NEW YORK A/O
CAYMAN ISLANDS BRANCHES
By: ________________________________________
Name: _____________________________
Title: ____________________________
-19-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$25,000,000 KBC BANK
By: ________________________________________
Name: _____________________________
Title: ____________________________
-20-
<PAGE>
LIQUIDITY COMMITMENT: LIQUIDITY LENDER:
$25,000,000 WELLS FARGO BANK
By: ________________________________________
Name: _____________________________
Title: ____________________________
-21-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheet as of March 31, 2000 and the Consolidated Statement
of Income for the three months ended March 31, 2000 and 1999 and Condensed
Consolidated Statement of Cash Flows for the three months ended March 31, 2000
and 1999 and is qualified in its entirety by reference to such Form 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-Mos
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 117,948
<SECURITIES> 0
<RECEIVABLES> 151,981
<ALLOWANCES> 20,015
<INVENTORY> 1,711,065 <F1>
<CURRENT-ASSETS> 0 <F2>
<PP&E> 126,865
<DEPRECIATION> 54,410
<TOTAL-ASSETS> 2,258,999
<CURRENT-LIABILITIES> 0 <F2>
<BONDS> 1,623,118
0
0
<COMMON> 242
<OTHER-SE> 390,803
<TOTAL-LIABILITY-AND-EQUITY> 2,258,999
<SALES> 0
<TOTAL-REVENUES> 234,423
<CGS> 0
<TOTAL-COSTS> 145,525
<OTHER-EXPENSES> 1,446
<LOSS-PROVISION> 1,892
<INTEREST-EXPENSE> 20,619
<INCOME-PRETAX> 20,636
<INCOME-TAX> 9,324
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,312
<EPS-BASIC> 0.47
<EPS-DILUTED> 0.46
<FN>
<F1> Item refers to revenue-earning vehicles, net.
<F2> Registrant's financial statements include an unclassified balance sheet.
</FN>
</TABLE>
