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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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 JUNE 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________ TO ________
COMMISSION FILE NO.: 0-23962
BUDGET GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 59-3227576
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
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125 BASIN STREET,
SUITE 210,
DAYTONA BEACH, FL 32114
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (904) 238-7035
------------------------
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 and 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 [ ]
37,250,059 shares of common stock were outstanding as of August 7, 2000,
comprised of 35,313,459 shares of the registrant's Class A common stock, par
value $0.01, and 1,936,600 shares of the registrant's Class B common stock, par
value $0.01.
The Exhibit Index, filed as a part of this report, appears on page 19.
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INDEX
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PAGE
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PART I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 2000 (unaudited)
and December 31, 1999..................................... 3
Consolidated Statements of Operations for the Six-Month
Periods Ended June 30, 2000 and 1999 (unaudited).......... 4
Consolidated Statement of Changes in Stockholders' Equity
for the Six-Month Period Ended June 30, 2000
(unaudited)............................................... 5
Consolidated Statements of Cash Flows for the Six-Month
Periods Ended June 30, 2000 and 1999 (unaudited).......... 6
Notes to Unaudited Consolidated Financial Statements........ 7
Item 2. Management's Discussion and Analysis of Financial Condition 10
and Results of Operations.................................
Item 3. Quantitative and Qualitative Disclosures about Market 17
Risk......................................................
PART II. Other Information
Item 1. Legal Proceedings........................................... 18
Item 2. Changes in Securities and Use of Proceeds................... 18
Item 3. Default Upon Senior Securities.............................. 18
Item 4. Submission of Matters to a Vote of Security Holders......... 18
Item 5. Other Information........................................... 18
Item 6. Exhibits and Reports on Form 8-K............................ 19
Signature Page.......................................................... 20
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PART I -- FINANCIAL STATEMENTS
BUDGET GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLAR AMOUNTS IN THOUSANDS)
ITEM 1. CONSOLIDATED BALANCE SHEETS
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JUNE 30, DECEMBER 31,
2000 1999
----------- ------------
(UNAUDITED)
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ASSETS
Cash and cash equivalents................................... $ 38,253 $ 56,886
Restricted cash............................................. 7,058 1,074
Trade and vehicle receivables, net.......................... 396,963 416,218
Revenue earning vehicles, net............................... 3,645,693 3,179,603
Property and equipment, net................................. 199,732 215,530
Prepaid expenses and other assets........................... 282,043 226,190
Intangibles, including goodwill, net........................ 851,747 852,789
Net assets of discontinued operations....................... 111,085 134,228
---------- ----------
Total assets.............................................. $5,532,574 $5,082,518
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Notes payable............................................... $4,043,270 $3,637,710
Accounts payable, accrued and other liabilities............. 707,069 585,068
Deferred income taxes....................................... 757 757
---------- ----------
Total liabilities......................................... 4,751,096 4,223,535
COMPANY OBLIGATED MANDATORILY REDEEMABLE SECURITIES OF
SUBSIDIARY................................................ 291,610 291,460
---------- ----------
STOCKHOLDERS' EQUITY
Common stock................................................ 374 373
Additional paid-in capital.................................. 598,309 646,641
Foreign currency translation adjustment..................... (9,818) (446)
Accumulated deficit......................................... (97,226) (77,217)
Treasury stock.............................................. (1,771) (1,828)
---------- ----------
Total stockholders' equity................................ 489,868 567,523
---------- ----------
Total liabilities and stockholders' equity................ $5,532,574 $5,082,518
========== ==========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
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BUDGET GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS EXCEPT FOR PER SHARE DATA)
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FOR THE THREE-MONTH FOR THE SIX-MONTH
PERIODS ENDED PERIODS ENDED
JUNE 30, JUNE 30,
------------------- -----------------------
2000 1999 2000 1999
-------- -------- ---------- ----------
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OPERATING REVENUE
Vehicle rental revenue........................... $619,185 $557,336 $1,160,542 $1,026,803
Royalty fees and other........................... 27,616 29,906 50,978 54,274
-------- -------- ---------- ----------
Total operating revenue....................... 646,801 587,242 1,211,520 1,081,077
-------- -------- ---------- ----------
OPERATING EXPENSES
Direct vehicle and operating..................... 239,299 215,193 482,979 419,231
Depreciation -- vehicle.......................... 145,526 134,563 288,408 263,390
Selling, general and administrative.............. 150,235 140,249 304,547 272,046
Amortization and non-vehicle depreciation........ 20,722 17,834 41,041 34,327
-------- -------- ---------- ----------
Total operating expense....................... 555,782 507,839 1,116,975 988,994
-------- -------- ---------- ----------
Operating income................................... 91,019 79,403 94,545 92,083
-------- -------- ---------- ----------
Other expense:
Vehicle interest, net............................ 58,444 41,405 107,232 83,704
Other interest, net.............................. 8,017 6,725 17,956 7,196
-------- -------- ---------- ----------
Total other expense, net...................... 66,461 48,130 125,188 90,900
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES..................................... 24,558 31,273 (30,643) 1,183
Provision (benefit) for income taxes............... 9,935 10,388 (20,009) (4,607)
Distributions on trust preferred securities........ 4,687 4,804 9,375 9,427
-------- -------- ---------- ----------
INCOME (LOSS) FROM CONTINUING OPERATIONS........... 9,936 16,081 (20,009) (3,637)
INCOME (LOSS) FROM DISCONTINUED OPERATIONS
(Net of provision (benefit) for income taxes).... -- 131 -- (3,201)
-------- -------- ---------- ----------
NET INCOME (LOSS).................................. $ 9,936 $ 16,212 $ (20,009) $ (6,838)
======== ======== ========== ==========
EARNINGS PER SHARE
BASIC:
Income (loss) from continuing operations...... $ 0.27 $ 0.45 $ (0.54) $ (0.10)
Loss from discontinued operations (Net of
benefit for income taxes)................... -- -- -- (0.09)
-------- -------- ---------- ----------
Net income (loss)............................. $ 0.27 $ 0.45 $ (0.54) $ (0.19)
======== ======== ========== ==========
DILUTED:
Income (loss) from continuing operations...... $ 0.27 $ 0.42 $ (0.54) $ (0.10)
Loss from discontinued operations (Net of
benefit for income taxes)................... -- -- -- (0.09)
-------- -------- ---------- ----------
Net income (loss)............................. $ 0.27 $ 0.42 $ (0.54) $ (0.19)
======== ======== ========== ==========
Weighted average number of shares outstanding
Basic............................................ 37,250 35,902 37,249 35,879
Diluted.......................................... 37,250 46,818 37,249 35,879
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
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BUDGET GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2000
(UNAUDITED)
(DOLLAR AMOUNTS IN THOUSANDS)
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FOREIGN
ADDITIONAL CURRENCY TOTAL
COMMON PAID-IN TRANSLATION ACCUMULATED TREASURY STOCKHOLDERS'
STOCK CAPITAL ADJUSTMENT DEFICIT STOCK EQUITY
------ ---------- ----------- ----------- -------- -------------
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Balance at December 31, 1999..... $373 $646,641 $ (446) $(77,217) $(1,828) $567,523
Comprehensive income:
Net loss....................... -- -- -- (20,009) --
Foreign currency translation... -- -- (9,372) -- --
Total comprehensive loss......... (29,381)
Warrant repurchase............... -- (17,809) -- -- -- (17,809)
Make-whole payments.............. 1 (30,523) -- -- 57 (30,465)
---- -------- ------- -------- ------- --------
Balance at June 30, 2000......... $374 $598,309 $(9,818) $(97,226) $(1,771) $489,868
==== ======== ======= ======== ======= ========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
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BUDGET GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(DOLLAR AMOUNTS IN THOUSANDS)
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FOR THE SIX-MONTH PERIODS
ENDED JUNE 30,
-------------------------
2000 1999
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CASH FLOWS FROM CONTINUING OPERATING ACTIVITIES:
Net loss.................................................... $ (20,009) $ (6,838)
Loss from discontinued operations........................... -- 3,201
----------- -----------
Loss from continuing operations............................. (20,009) (3,637)
Adjustments to reconcile loss from continuing operations to
net cash provided by continuing operating activities
Depreciation and amortization............................... 329,449 297,717
Changes in operating assets and liabilities, net of effects
from acquisitions
Stock compensation........................................ -- 150
Trade and vehicle receivables............................. 19,036 46,711
Prepaid expenses and other assets......................... 20,007 (27,853)
Accounts payable, accrued and other liabilities........... 29,337 (9,426)
----------- -----------
Total adjustments...................................... 397,829 307,299
----------- -----------
Net cash provided by continuing operating activities...... 377,820 303,662
----------- -----------
CASH FLOWS FROM CONTINUING INVESTING ACTIVITIES:
Change in restricted cash balance........................... (5,984) 188,157
Proceeds from sale of revenue earning vehicles.............. 1,482,459 1,479,329
Purchases of revenue earning vehicles....................... (2,259,937) (2,511,471)
Proceeds from the sale of property and equipment............ 14,053 5,556
Purchases of property and equipment......................... (19,433) (33,501)
Payment for acquisitions, net of cash acquired.............. (5,714) (1,017)
----------- -----------
Net cash used in continuing investing activities.......... (794,556) (872,947)
----------- -----------
CASH FLOWS FROM CONTINUING FINANCING ACTIVITIES:
Net increase in vehicle obligations......................... 172,198 732,554
Net increase (decrease) in commercial paper................. 233,477 (530,604)
Proceeds from other notes payable........................... 935 411,801
Principal payments on other notes payable................... (1,050) (70,975)
Warrant repurchase.......................................... (17,809) --
Make-whole payment.......................................... (12,051) (2,294)
Proceeds from other equity transactions, net................ -- 1,018
----------- -----------
Net cash provided by continuing financing activities...... 375,700 541,500
----------- -----------
Net cash provided (used) by discontinued operations......... 23,143 (37,796)
----------- -----------
Effect of exchange rate changes on cash..................... (740) (374)
----------- -----------
Net decrease in cash and cash equivalents................... (18,633) (65,955)
Cash and cash equivalents, beginning of period.............. 56,886 124,011
----------- -----------
Cash and cash equivalents, end of period.................... $ 38,253 $ 58,056
=========== ===========
</TABLE>
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BUDGET GROUP, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Budget
Group, Inc. (the "Company") have been prepared by the Company pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and note disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. The Company
believes that the accompanying consolidated financial statements contain all
adjustments (consisting of normal, recurring adjustments) that, in the opinion
of management, are necessary to present fairly the Company's consolidated
financial condition, results of operations and cash flows for the periods
presented.
It is suggested that these consolidated financial statements be read in
conjunction with the financial statements and the notes thereto contained in the
Company's Annual Report on Form 10-K for the year ended December 31, 1999.
Operating results for the interim periods are not necessarily indicative of the
results that may be expected for the full year ending December 31, 2000.
In December 1999, the Company implemented formal plans to dispose of its
retail car sales segment and VPSI, Inc. ("VPSI") and Cruise America, Inc.
("Cruise"), respectively. The Company has provided for results of operations
during the phase out period and gains or losses on the disposal of the
operations and has segregated net assets from these operations in the
accompanying consolidated financial statements.
Certain amounts in the 1999 consolidated financial statements have been
reclassified to conform with the current year presentation.
2. ACQUISITIONS
The Company completed acquisitions of a Budget Rent a Car franchise and a
local market car rental company through June 30, 2000. These acquisitions are
not material either individually or in the aggregate and the Company does not
expect them to have a significant impact on its consolidated financial position
or results of operations. The acquired properties are located in Kentucky and
England.
3. DISPOSITIONS
On March 17, 2000, the Company completed the sale of its Licensee Lease
Program for approximately $37.7 million. The sales price approximated the
Company's net investment.
On April 20, 2000, the Company sold the Warren Wooten Ford, Inc. ("Wooten
Ford") dealership for approximately $15.0 million and on April 27, 2000, the
Company completed the sale of the Paul West Ford, Inc. dealership for
approximately $17.7 million. The sales prices of these dealerships approximated
the estimates used to recognize the expected loss from disposal of business
segments recorded in 1999.
The Seattle and Hawaii retail car sales locations were converted to fleet
disposal operations within the car rental segment. The Company has franchised
all of its remaining corporate owned Budget Car Sales retail facilities and has
sold its ownership interest in its car sales joint venture.
The Company has reached an agreement in principle to sell both Cruise and
VPSI. The purchase price for Cruise is approximately $27.6 million and Budget
will retain a 19.9% ownership interest. The vehicles operated by Cruise but
currently administered by the Company will be subject to lease terms under which
the purchaser is responsible for principal and interest payments and will assume
the risk of loss on the vehicles. The purchase price for VPSI is approximately
$26.7 million. These sales are expected to close by September 30, 2000, subject
to satisfaction of customary closing conditions.
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The aggregate sales prices and interim operating results of the
discontinued segments (retail car sales, Cruise and VPSI) approximate the
estimates used to recognize the expected loss from disposal of business segments
recorded in 1999. However, certain assets and liabilities retained by the
Company may not be ultimately realized or settled for several periods.
The sale of the previously mentioned non-core businesses reflects the
Company's plans to focus on the car and truck rental businesses.
4. NOTES PAYABLE
On February 24, 2000, the Company entered into a $270.0 million seasonal
funding facility ("Seasonal Facility") that expired on June 30, 2000. In June
2000, the Seasonal Facility was amended to $170.0 million and extended to
September 30, 2000. On June 30, 2000, there was a total of $140.0 million
outstanding under the Seasonal Facility with an interest rate of 6.75%.
In June 2000, the Company entered into an additional $90.0 million seasonal
funding facility ("Seasonal Facility-2") that expires on September 30, 2000. On
June 30, 2000, there was a total of $25.0 million outstanding under the Seasonal
Facility-2 with an interest rate of 7.05%.
Both Seasonal Facilities are utilized to finance the acquisitions of
vehicles during the peak buying season. Repayment of the Seasonal Facilities
will be funded through the disposal of vehicles.
5. MAKE-WHOLE PAYMENTS/WARRANT PAYMENTS
The Company was obligated to deliver a make-whole payment in connection
with certain acquisitions, if the price of the stock issued in a purchase falls
below a specified price during the measurement periods.
In January 2000, the Company issued 56,740 new shares of Class A common
stock and 5,007 treasury shares with a value of $0.5 million in make whole
payments related to the Wooten Ford dealership acquisition consummated in June
1998.
In March and June 2000, the Company paid approximately $17.6 million and
$0.2 million, respectively, to repurchase warrants to purchase common stock from
the former shareholders of Ryder TRS.
In April 2000, the Company entered into a series of agreements to pay the
final payment of the Ryder TRS make-whole obligation for $30.4 million in cash.
Payments of approximately $12.0 million were made in April and May 2000 and the
final payment of $18.4 million was paid on July 3, 2000. These payments were
recorded as a charge to additional paid-in-capital as of June 30, 2000.
6. EARNINGS PER SHARE
Basic earnings per share was calculated by dividing net income (loss) by
the weighted average number of common shares outstanding during the period.
Diluted earnings per share was calculated by dividing net income (loss)
available to common stockholders after assumed conversion of dilutive securities
by the sum of the weighted average number of common shares outstanding plus all
additional common shares that would have been outstanding if potentially
dilutive common shares had been issued. The following table reconciles
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the net income (loss) from continuing operations and number of shares utilized
in the earnings per share calculation.
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THREE-MONTH SIX-MONTH
PERIODS ENDED PERIODS ENDED
JUNE 30, JUNE 30,
----------------- -------------------
2000 1999 2000 1999
------- ------- -------- --------
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Net income (loss) from continuing operations............ $ 9,936 $16,081 $(20,009) $ (3,637)
Effect of interest, distributions, and loan fee
amortization on convertible securities -- net of
income taxes.......................................... -- 3,509 -- --
------- ------- -------- --------
Net income (loss) available to common stockholders
after assumed conversion of dilutive
securities....................................... $ 9,936 $19,590 $(20,009) $ (3,637)
======= ======= ======== ========
Weighted average number of common shares used in basic
EPS................................................... 37,250 35,902 37,249 35,879
Effect of dilutive securities:
Stock options...................................... -- 199 -- --
Convertible securities............................. -- 10,717 -- --
------- ------- -------- --------
Weighted average number of common shares and dilutive
potential common stock used in diluted EPS............ 37,250 46,818 37,249 35,879
======= ======= ======== ========
</TABLE>
7. RESTRUCTURING
The Company recorded a restructuring charge of approximately $14.9 million
in December 1998. This amount related primarily to closing of vehicle rental and
car sales locations and centralization of certain finance and administration
functions of the Company (the "Restructuring"). At June 30, 2000, all of the
employees affected have been terminated and the Company has accruals remaining
related to the Restructuring of $3.4 million which are largely related to
leases. During the six-month period ended June 30, 2000 approximately $1.5
million has been paid or utilized and accrued reductions of approximately $0.3
million have been recorded.
8. FINANCIAL INSTRUMENTS
SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities"
establishes accounting and reporting standards for derivative instruments
embedded in other contracts (collectively referred to as derivatives) and for
hedging activities. SFAS No. 137 "Accounting for Derivative Instruments and
Hedging Activities -- Deferral of the Effective Date of Financial Accounting
Standards Board ("FASB") Statement No. 133 -- an Amendment of FASB Statement No.
133" defers the effective date of SFAS No. 133 until January 2001 for the
Company. It requires that an entity recognize all derivatives as either assets
or liabilities in the statement of financial position and measure those
instruments at fair value. Based on its current limited use of derivatives, the
Company expects no material impact on its financial condition or results of
operations upon adoption of SFAS No. 133.
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9. BUSINESS SEGMENTS
The Company is engaged in the business of the daily rental of vehicles,
principally cars, trucks and passenger vans. Segments are determined by product
line and business activity.
Segment information for the periods ended June 30, 2000 and 1999,
respectively, are:
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THREE-MONTH PERIODS SIX-MONTH PERIODS ENDED
ENDED JUNE 30, JUNE 30,
------------------- -----------------------
2000 1999 2000 1999
-------- -------- ---------- ----------
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Revenue
Car Rental -- North America...................... $406,972 $362,969 $ 780,360 $ 689,791
-- International..................... 72,543 58,048 140,920 107,747
Truck Rental..................................... 197,501 187,829 347,507 325,617
Eliminations..................................... (30,215) (21,604) (57,267) (42,078)
-------- -------- ---------- ----------
Total revenue................................. $646,801 $587,242 $1,211,520 $1,081,077
======== ======== ========== ==========
Operating income (loss)
Car Rental -- North America...................... $ 81,544 $ 53,162 $ 119,121 $ 75,671
-- International..................... (9,556) 2,550 (29,246) 2,387
Truck Rental..................................... 29,693 29,996 21,348 25,025
Corporate Overhead............................... (10,662) (6,305) (16,678) (11,000)
-------- -------- ---------- ----------
Total operating income........................ $ 91,019 $ 79,403 $ 94,545 $ 92,083
======== ======== ========== ==========
</TABLE>
10. SIGNIFICANT NON-CASH TRANSACTIONS
On March 6, 2000 the Company entered into a ten year marketing agreement
with Homestore.com whereby the Company received stock with a market value of
approximately $70.0 million and provides for various services including
marketing, exclusive branding and online reservations. The investment is
included in prepaid expenses and other assets. In addition, approximately $70.0
million of deferred income has been recorded and included in accounts payable
and accrued and other liabilities. The deferred income will be recognized on a
straight-line basis over the 10 year life of the agreement. During the first 30
months of the agreement, the Homestore.com stock is subject to certain put
provisions that essentially guarantees the minimum value of the stock to be no
less than approximately $70.0 million. In addition, the maximum value is subject
to certain limitations during the first 24 months. No temporary market value
declines related to the stock will be recognized by the Company until after the
put period has lapsed.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
All amounts relate to continuing operations unless otherwise noted.
In 1999, we adopted plans to dispose of our non-core assets, primarily the
car sales segment, Cruise America and VPSI, in order to focus on car and truck
rental. The net income (loss) and net assets to be disposed of for these
non-core assets are included in the accompanying consolidated financial
statements under the headings discontinued operations in the consolidated
statements of operations and net assets of discontinued operations in the
consolidated balance sheets. The interim consolidated financial statements from
1999 have been restated to conform with the 2000 presentation. For further
discussion of these plans, see notes 1 and 3 to the Company's unaudited
consolidated financial statements herein.
We are also evaluating various alternatives to improve our operating
results in Europe including a model that will reduce our capital investment and
increase our royalty base. Although no formal plan has been developed, any
dispositions that may result from such a plan may have a material impact on our
financial position and results of operations. Any resulting charges and disposal
gains or losses resulting from such dispositions will be reflected in operating
income in the period in which the plan is adopted.
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The Company is engaged in the business of the daily rental of vehicles,
including cars, trucks and passenger vans (through both owned and franchised
operations).
REVENUES PRIMARILY CONSIST OF:
Vehicle rental -- revenue generated from renting vehicles to customers
including revenue from loss or collision damage waivers, insurance sales and
other products provided at rental locations. Royalty fees and other -- fees
generated from the Company's licensees and other non-vehicle rental or sales
items.
EXPENSES PRIMARILY CONSIST OF:
Direct vehicle and operating -- includes wages and related benefits, rent
and concessions paid to airport authorities and costs relating to the operation
and rental of revenue earning vehicles including insurance. Depreciation,
vehicle -- depreciation expenses relating to revenue earning vehicles including
net gains or losses on the disposal of such equipment. Selling, general and
administrative -- includes reservation, advertising, marketing and other related
expenses, net of third party reimbursements, and commissions to dealers, travel
agents and other third parties. Amortization and non-vehicle
depreciation -- includes amortization of goodwill and other intangibles as well
as depreciation of capitalized assets. Total other expense, net -- interest
expense, net of interest earned on restricted cash, relating primarily to
revenue earning vehicle financing.
RESULTS OF OPERATIONS
General Operating Results. Income from continuing operations for the
second quarter of 2000 decreased $6.1 million to $9.9 million compared with
income of $16.1 million in the second quarter of 1999. Loss from continuing
operations increased $16.4 million to a loss of $20.0 million for the first six
months of 2000 from a loss of $3.6 million for the same period in 1999. Income
per share from continuing operations for the second quarter of 2000 was $0.27
per diluted share compared to income of $0.42 per diluted share in 1999. These
decreases were primarily due to an $8.0 million and $19.1 million increase, in
the quarter and year to date periods, respectively, in bad debt expense due to
continued system conversion issues. In addition, improvements in margins in
North America car rental were generally offset by declines in margins in
international car rental due to expansion efforts, and to lesser extent,
declines in margins in Truck Rental. See the discussion related to selling,
general and administrative expenses following.
Operating Revenues. Vehicle rental revenue increased $61.8 million, or
11.1% in the second quarter of 2000 to $619.2 million from $557.3 million in the
second quarter of 1999. This increase was due primarily to volume growth of 9.7%
and 72.7% in North America and international car rental, respectively, with a
total volume increase of 15.0%. International same market volume grew
approximately 50% with the remainder due to acquisitions. Vehicle rental revenue
increased $133.7 million or 13.0% to $1,160.5 million for the first six months
of 2000 from $1,026.8 million for the same period in 1999. The increase was due
primarily to volume growth of 9.2% and 77.9% in North America and international
car rental, respectively, with a total volume increase of 15.1%. International
same market grew approximately 50% with the remainder due to acquisitions.
Vehicle rental revenue increased at a lower rate than volume due to lower
revenue per day in International car rental reflecting a shift in business mix,
primarily to the tour market, partially offset by slightly higher revenue per
day in North America car rental reflecting the general pricing environment.
Royalty fees and other revenues decreased $2.3 million, or 7.7%, in the
second quarter of 2000 to $27.6 million from $29.9 million in the second quarter
of 1999 and decreased $3.3 million for the six months ended June 30, 2000 to
$51.0 million from $54.3 million for the first six months of 1999 reflecting
lower royalty and other fees from franchisees primarily resulting from
international franchise acquisitions. These revenues largely represent royalty
and other fees from the Company's franchisees and revenue from Ryder TRS's move
management service.
Operating Expenses. Total operating expenses increased $47.9 million, or
9.4%, in the second quarter of 2000 to $555.8 million from $507.8 million in the
second quarter of 1999 and increased $128.0 million or
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12.9% to $1,117.0 million from $989.0 million for the first six months ended
2000 and 1999, respectively. These increases were generally due to the volume
increases previously mentioned.
Direct vehicle and operating expenses increased $24.1 million, or 11.2%, in
the second quarter of 2000 to $239.3 million from $215.2 million in 1999. These
expenses increased at lower rate than volume, primarily in North America,
largely due to improved productivity for direct personnel and a $2.5 million
increase in the pass-through of fees and surcharges to customers. Direct vehicle
and operating expenses for the first six months of 2000 increased $63.7 million,
or 15.2%, to $483.0 million from $419.2 million in 1999. This increase is
generally reflective of the previously mentioned volume increase. The positive
impact of the previously mentioned items in the second quarter of 2000 offset
the impact of increasing the mix of leased vehicles and increased net repairs,
maintenance and reconditioning expenses, largely in international car rental.
Vehicle depreciation expense for the second quarter increased $11.0
million, or 8.2%, to $145.5 million from $134.6 million in 1999. Vehicle
depreciation increased $25.0 million, or 9.5%, for the first six months of 2000
to $288.4 million from $263.4 million for the same period in 1999. This expense
for the quarter and year to date period increased at a rate lower than volume
primarily due to a shift in mix to lower cost vehicles, primarily in the first
quarter, as compared to 1999.
Selling, general and administrative expenses increased by $10.0 million, or
7.1%, in the second quarter of 2000 to $150.2 million from $140.2 million in the
second quarter of 1999. This increase reflects higher selling costs associated
with the increased rental revenue and the previously mentioned increase in bad
debt expense somewhat offset by lower net advertising expenses of $4.1 million
and a lower truck administrative personnel expense, compared to the second
quarter of 1999, of approximately $1.5 million. Selling, general and
administrative expenses increased $32.5 million or 12.0% for the first six
months of 2000 to $304.5 million from $272.0 million in 1999. This increase
reflected higher selling costs associated with the increased rental revenue and
the previously mentioned increase in bad debt expense somewhat offset by lower
net advertising expenses of $3.2 million and lower truck administrative
personnel expense, compared to the first six months of 1999, of $3.9 million.
Included in both the quarter and year to date periods in 2000 is a $4.0 million
increase in separation cost fully offset by a $4.0 million decrease in incentive
expense resulting from lower expected payouts. We have continued to increase our
allowance for doubtful accounts to reflect the aging of customer receivables.
System caused delays in applying cash received to invoices billed has continued
to impair our ability to collect amounts due. These difficulties are largely
concentrated in Europe and at Ryder TRS and we have undertaken manual and
technology based actions to correct this situation. Although progress has been
made, bad debt expense may continue to have a detrimental effect on operating
results going forward.
Amortization and non-vehicle depreciation expense increased $2.9 million,
or 16.2%, in the second quarter of 2000 to $20.7 million from $17.8 million in
the second quarter of 1999. For the first six months of 2000 these expenses
increased $6.7 million or 19.6% to $41.0 million from $34.3 million for the same
period in 1999. These increases reflect the impact of software and other capital
expenditures made primarily in 1999.
Other expense, net. Other expense, net of interest income, increased $18.3
million in the second quarter of 2000 to $66.5 million from $48.1 million in the
second quarter of 1999 and increased $34.3 million, or 37.7%, to $125.2 million
from $90.9 million for the first six months of 2000 and 1999, respectively.
These increases were largely due to higher borrowing levels reflecting the
volume increases and resulting larger average fleet size and an increase in
average interest rates. The rate increase resulted from the issuance of the
senior notes in April 1999 and MTN's in June 1999, both of which replaced
maturing debt that had lower interest rates, and a general rise in interest
rates over the prior year.
Benefit for income taxes. The overall year to date tax benefit reflects
the expected full year effective rate, which is higher than the statutory rate
due to the effects of non-deductible intangible amortization and the impact of
state and local income taxes net of the federal benefit. Also impacting the rate
is the effect of the distributions on trust preferred securities shown below the
provision at its gross amount while the tax benefit is included in the
provision.
Distributions on trust preferred securities. The distributions on trust
preferred securities of $4.7 million and $9.4 million for the three and
six-month periods ended June 30, 2000, respectively, approximated the
12
<PAGE> 13
amounts in 1999. These distributions represent dividend payments to holders of
these Company obligated mandatorily redeemable securities issued by a subsidiary
of Budget Group, Inc.
LIQUIDITY AND CAPITAL RESOURCES
Historically, the Company's operations have been funded by cash provided
from operating activities and by financing provided by asset backed notes,
banks, and automobile manufacturers' captive finance companies. Our primary use
of cash is for the acquisition of new vehicles for the rental fleet. The
indebtedness at June 30, 2000 has interest rates ranging from 4.35% to 11.20%
and the material terms of the financing facilities are described below. We
intend to fund our fleet financing requirements and debt maturities through
asset-backed notes and revolving credit facilities with financial institutions
for fleet financing and working capital, as well as through other similar
facilities.
ANALYSIS OF CASH FLOWS
Net cash provided by continuing operating activities increased 24.4% to
$377.8 million during the six months ended June 30, 2000, from $303.7 million
during the six-month period ended June 30, 1999. This increase is primarily due
to a decrease in trade and vehicle receivables and other assets as well as an
increase in accounts payable and accrued liabilities. See note 10 to the
Company's unaudited consolidated financial statements herein.
Net cash used in investing activities is primarily attributable to cash
paid to suppliers of revenue earning vehicles and, to a lesser extent, capital
expenditures. This cash use is mainly offset by cash received from the sale of
vehicles (most of which sales were pursuant to manufacturers' vehicle repurchase
programs). Cash received from the sale of vehicles was $1,482.5 million and
$1,479.3 million during the first six months of 2000 and 1999, respectively.
Cash paid to suppliers of revenue earning vehicles was $2,259.9 million and
$2,511.5 million during the first six months of 2000 and 1999, respectively.
Payment for acquisitions, net of cash acquired, amounted to $5.7 million and
$1.0 million during the first six months of 2000 and 1999, respectively. Capital
expenditures, largely for new rental locations, improvement in service levels
and to upgrade computer hardware and software were $19.4 million and $33.5
million for the first six months of 2000 and 1999, respectively.
Net cash provided by financing activities for the six-month period ended
June 30, 2000, decreased by $165.8 million over the six-month period ended June
30, 1999 to net cash provided of $375.7 million. This decrease over the prior
year was due primarily to the issuance of a new financing facility in June,
1999.
In the first six months of 2000, the Company paid $17.8 million to the
former owners of Ryder TRS to repurchase warrants to purchase Class A common
stock. See note 5 to the Company's unaudited consolidated financial statements
herein.
In April 2000, the Company entered into a series of agreements to pay the
final payment of the Ryder TRS make-whole obligation for $30.4 million in cash.
These payments were recorded as charges to additional paid-in-capital. Payments
of approximately $12.0 million were made in April and May, 2000 and the final
payment of $18.4 was paid on July 3, 2000.
DEBT FACILITIES -- GENERAL
The Company borrows money directly and through its special purpose fleet
financing subsidiaries, Team Fleet Financing Corporation ("TFFC") and Budget
Funding Corporation. Subsidiaries also have various working capital facilities
in place to finance operating activities. At June 30, 2000, the Company had
$4,043.3 million of indebtedness outstanding, $3,582.5 million of which
represented secured fleet financing and $460.7 million of which represented
non-vehicle indebtedness. At June 30, 2000, the Company had $264.8 million of
availability under various fleet financing facilities.
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<PAGE> 14
RECENT DEBT PLACEMENTS AND RETIREMENTS
On February 24, 2000, the Company entered into a $270.0 million seasonal
funding facility ("Seasonal Facility") that expired on June 30, 2000. In June
2000, the Seasonal Facility was amended to $170.0 million and extended to
September 30, 2000. On June 30, 2000, there was a total of $140.0 million
outstanding under the Seasonal Facility with an interest rate of 6.75%.
In June 2000, the Company entered into an additional $90.0 million seasonal
funding facility ("Seasonal Facility-2") that expires on September 30, 2000. On
June 30, 2000, there was a total of $25.0 million outstanding under the Seasonal
Facility-2 with an interest rate of 7.05%.
SENIOR NOTES
In April 1999, the Company issued unsecured senior notes with an aggregate
principal amount of $400.0 million bearing interest at 9.125% due in 2006 (the
"Senior Notes"). The net proceeds from this transaction were primarily used to
repay the outstanding indebtedness under maturing medium-term notes used to
finance revenue earning vehicles and certain other secured indebtedness. The
indenture governing the Senior Notes contains certain covenants which, among
other things, restrict the Company from incurring certain additional
indebtedness, paying dividends or redeeming or repurchasing its capital stock,
consolidating, merging or transferring assets and engaging in sale/leaseback
transactions. In June 1999, the Company exchanged all of the unregistered
initial Senior Notes for registered Senior Notes with identical terms.
FLEET FINANCING FACILITIES
At June 30, 2000, the Company had borrowed $2,726.0 million under
asset-backed MTN's and $507.3 million under a commercial paper ("CP") facility
(collectively "Fleet notes"). The MTN's are comprised of notes issued in
December 1996 ("TFFC-96"), notes issued in April 1997 ("TFFC-97"), notes issued
in June 1998 ("TFFC-98") and notes issued in June 1999 ("TFFC-99"). The Fleet
notes are utilized largely to finance vehicles eligible for certain
manufacturers' vehicle repurchase programs and other allowable cars and trucks.
Proceeds from the Fleet notes that are temporarily unutilized for vehicle
financing are maintained in restricted cash accounts with the trustees. The
Fleet notes are collateralized by the secured vehicles, restricted cash and
accounts receivable due from the sale of vehicles. Interest rates on the Fleet
notes at June 30, 2000, ranged from 6.07% to 7.85%.
Our other vehicle obligations consist primarily of international
outstanding lines of credit to purchase rental vehicles. Borrowings under
collateralized available lines of credit at June 2000 consist of $184.2 million
for rental vehicles with maturity dates through 2003. Vehicle obligations are
collateralized by revenue earning vehicles financed under these credit
facilities and proceeds from the sale, lease or rental of rental vehicles.
Interest payments for rental fleet facilities are due monthly at annual interest
rates that range from 4.35% to 11.20% at June 30, 2000. Management expects that
vehicle obligations will generally be repaid within one year from the balance
sheet date with proceeds received from either the repurchase of the vehicles by
the manufacturers in accordance with the terms of the manufacturers' vehicle
repurchase programs or from the sales of the vehicles.
COMMERCIAL PAPER
The commercial paper facility (the "CP") that was established in April
1997, was renewed in April 2000 for $670.0 million, had an outstanding principal
balance of $309.9 million and $507.3 million at June 30, 1999 and 2000,
respectively, bears interest ranging from 6.70% to 7.10% at June 30, 2000, and
is secured by the applicable vehicles and vehicle program receivables. Under
limited circumstances, the CP may be repaid by draws under a related, bank
liquidity facility ($581.0 million) or a related letter of credit ($90.0
million). The CP is issued periodically with maturities of up to 58 days. It is
the Company's intention to renew the liquidity facility or to obtain financing
under similar terms when the present agreement expires in October 2002. No
amounts were drawn under the bank provided liquidity facility or related letter
of credit at June 30, 2000.
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<PAGE> 15
MEDIUM TERM NOTES (MTN'S)
The TFFC-96 notes consist of senior notes and subordinated notes. The
senior notes, with an aggregate principal balance of $166.0 million at June 30,
1999 and 2000, bear interest at 6.65% per annum. Monthly principal payments of
$13.8 million commence in May 2001, with the last payment due in April 2002. The
subordinated notes, with an aggregate principal balance of $10.0 million at June
30, 1999 and 2000, bear interest at 7.10% per annum and are payable in full in
2002. Interest on the TFFC-96 notes is payable monthly.
The TFFC-97 notes consist of senior notes and subordinated notes. The
senior notes, with an aggregate principal balance of $472.5 million at June 30,
1999 and 2000, bear interest at 7.35% per annum. Monthly principal payments of
$39.4 million commence in October 2001, with the last payment due in September
2002. The subordinated notes, with an aggregate principal balance of $27.5
million at June 30, 1999 and 2000, bear interest at 7.80% per annum and are
payable in full in 2002. Interest on the TFFC-97 notes is payable monthly.
The TFFC-98 notes consist of an aggregate principal balance of $1,100.0
million at June 30, 1999 and 2000, respectively. The TFFC-98 notes bear interest
at fixed rates ranging from 6.07% and 6.84% and have maturity dates from 2001 to
2005. Interest on the TFFC-98 notes is payable monthly.
The TFFC-99 notes issued in June 1999, consist of $950.0 million with rates
ranging from LIBOR plus 0.24% (or 6.89%) to 7.85% and have maturity dates from
2001 to 2004. These notes were issued in three different series. TFFC 99-2 has a
principal amount of $400.0 million bearing a floating interest rate ranging from
LIBOR plus 0.24% to LIBOR plus 1.15% and has a maturity date of June 2001. TFFC
99-3 has a principal amount of $350.0 million bearing fixed interest rates from
6.70% to 7.60% with a maturity date of June 2002. TFFC 99-4 has a principal
amount of $200.0 million with fixed interest rates of 6.90% to 7.85% and has a
maturity date of June 2004.
CONVERTIBLE SUBORDINATED NOTES
In April 1997, the Company issued convertible subordinated notes with an
aggregate principal amount of $45.0 million bearing interest at 6.85% per annum
due 2007. At a conversion price of $27.96 per share, the convertible
subordinated notes are convertible into 1,609,436 shares of Class A common
stock.
TRUST PREFERRED SECURITIES
In June 1998, a subsidiary of the Company issued $300.0 million of 6.25%
trust preferred securities and received approximately $291.0 million in net
proceeds. These funds were used to redeem guaranteed senior notes and to
partially fund the redemption of Ryder TRS's 10% senior subordinated notes,
which occurred in July 1998. The trust preferred securities are subject to
mandatory redemption upon the redemption of the underlying debentures due on
June 15, 2028. The Company has the right to defer interest payments due on the
subordinated debentures for up to 20 consecutive quarters, which will also cause
a deferral of distributions under the trust preferred securities.
WORKING CAPITAL FACILITY
Concurrent with the acquisition of Ryder TRS, the Company entered into an
amended and restated secured credit facility to increase its size from $300.0
million to $550.0 million. This facility requires monthly interest payments on
the outstanding balance at a rate based on LIBOR plus 2.50% or prime plus 1.25%
(9.14% at June 30, 2000) and expires in 2003. There is no outstanding balance on
this facility at June 30, 2000. The facility is secured primarily by cash,
accounts receivable and vehicles and is subject to certain covenants, the most
restrictive of which require the Company to maintain certain financial ratios
and minimum tangible net worth and restrict the payment of cash dividends. At
June 30, 2000, the Company had $465.3 million in letters of credit outstanding
resulting in availability under this facility of $84.7 million.
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<PAGE> 16
The credit facility was amended in the second quarter of 1999 to, among
other things, modify certain financial covenants and permit the issuance of
additional unsecured term notes to fund the maturities of MTN's.
CHANGE IN FINANCIAL CONDITION
Total assets increased $450.1 million from $5,082.5 million at December 31,
1999 to $5,532.6 million at June 30, 2000. This increase was due primarily to an
increase in revenue earning vehicles, net, of $466.1 million.
Total liabilities increased by $527.6 million from $4,223.5 million at
December 31, 1999 to $4,751.1 million at June 30, 2000. This increase, largely
in notes payable of $405.6 million and accounts payable, accrued and other
liabilities of $122.0 million resulted primarily from financing the increase in
revenue earning vehicles and the deferred income recognized in relation to the
Homestore.com agreement. See note 10 to the Company's unaudited consolidated
financial statements herein.
INFLATION
The increased acquisition cost of vehicles is the primary inflationary
factor affecting our operations. Many of our other operating expenses are
inflation sensitive, with increases in inflation generally resulting in
increased costs of operations. The effect of inflation-driven cost increases on
our overall operating costs is not expected to be greater for us than for our
competitors.
SEASONALITY
Generally, in the vehicle rental industry, revenue increases in the spring
and summer months due to the overall increase in business and leisure travel
during this season. We increase the size of our fleet and workforce in the
spring and summer to accommodate increased rental activity during these periods
and decrease our fleet and work force in the fall and winter. However, many of
our operating expenses (such as rent, insurance and administrative personnel)
are fixed and cannot be reduced during the fall and winter. As a result of these
patterns, for vehicle rental, the first quarter of each year is typically the
weakest and the third quarter is typically the strongest.
Due to recent expansion of corporate owned rental operations in Europe, we
expect that seasonal fluctuations in operating results will become more
pronounced.
ENVIRONMENTAL MATTERS
We have assessed and continue to assess the impact of environmental
remediation efforts on our operations. Our exposure largely relates to the clean
up and replacement of underground gasoline storage tanks.
During 1999, we recognized approximately $0.7 million in expenses related
to remediation efforts and estimate that an aggregate of approximately $1.9
million will be expended in 2000 and 2001. Approximately $0.4 million was spent
in 2000 through June 30. Based on past experience, we expect these estimates
will be sufficient to satisfy anticipated costs of known remediation
requirements. However, due to factors such as continuing changes in the
environmental laws and regulatory requirements, the availability and application
of technology, the identification of presently unknown remediation sites and
changes in the extent of expected remediation efforts, estimated costs for
future environmental compliance and remediation are subject to uncertainty and
it is difficult to predict the amount or timing of future remediation
requirements.
FORWARD LOOKING STATEMENTS
This Form 10-Q and other statements issued or made from time to time by
Budget Group, Inc. or its representatives contain statements which may
constitute "forward looking statements" under the Private Securities Litigation
Act of 1995. Those statements include statements regarding the intent, belief or
current expectations of Budget Group, Inc. and members of its management team,
as well as the assumptions on
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<PAGE> 17
which such statements are based. Prospective investors are cautioned that any
such forward-looking statements are not guarantees of future performance and
involve risks and uncertainties and that actual results may differ materially
from those contemplated by such forward-looking statements. Important factors
currently known to management that could cause actual results to differ
materially from those in forward-looking statements are set forth in Item 7 of
the Company's Annual Report on Form 10-K for the year ended December 31, 1999,
and that information is hereby incorporated by reference in this Form 10-Q. The
Company 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.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our exposure to market risk is primarily due to floating rate interest
associated with fleet debt. We manage interest rates through use of a
combination of fixed and floating rate debt and interest hedging instruments. No
significant changes have occurred in our capital structure or market risk
profile during the period ended June 30, 2000. See the Company's disclosures
regarding market risk as of December 31, 1999 included under Item 7A of the
Company's Form 10-K.
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<PAGE> 18
PART II -- OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
Not applicable.
ITEM 2 CHANGES IN SECURITIES AND USE OF PROCEEDS
Not applicable.
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The 2000 Annual Meeting of Stockholders was held on May 18, 2000 in Orlando
Florida for the following purposes:
1. The election of three directors to the Company's Board of Directors
to serve three year terms expiring in 2003.
2. To vote for the adoption of the Budget Group, Inc. 2000 Stock Plan.
3. Ratification of the appointment of Arthur Andersen LLP as the
Company's independent accountants for fiscal 2000.
Proxies for the meeting were solicited pursuant to Section 14(a) of the
Securities Exchange Act of 1934 and there was no solicitation in opposition to
management solicitation.
All of the management's nominees for directors as listed in the proxy
statement were elected with the following votes:
<TABLE>
<CAPTION>
DIRECTOR NOMINEE VOTES FOR VOTES WITHHELD
---------------- ---------- --------------
<S> <C> <C>
Jeffrey D. Congdon.......................................... 43,089,173 3,844,246
Stephen L. Weber............................................ 43,089,373 3,844,046
F. Perkins Hixon............................................ 43,964,326 2,969,093
</TABLE>
Additional directors continuing in office following the meeting include:
Sanford Miller, James F. Calvano, Martin B. Gregor, Ronald D. Agronin and John
P. Kennedy.
The vote to approve the adoption of the Budget Group, Inc. 2000 Stock plan
was as follows:
<TABLE>
<S> <C>
Votes For................................................... 31,695,256
Votes Against............................................... 4,615,153
Votes Abstained............................................. 95,861
</TABLE>
The vote of the appointment of Arthur Andersen LLP as the Company's
independent accountants for fiscal 2000 was as follows:
<TABLE>
<S> <C>
Votes For................................................... 46,196,491
Votes Against............................................... 572,652
Votes Abstained............................................. 164,276
</TABLE>
ITEM 5 OTHER INFORMATION
Not applicable.
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<PAGE> 19
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NO.
-------
<C> <C> <S>
4.1 -- Series 2000-2 Supplement dated as of June 29, 2000 to the
Amended and Restated Base Indenture dated as of December 1,
1996 among Team Fleet Financing Corporation, as Issuer,
Budget Group, Inc., as the Servicer and the Budget Interest
Holder, and Bankers Trust Company, as Trustee.
4.2 -- Master Motor Vehicle Lease Agreement Group III dated as of
June 29, 2000 among Team Fleet Financing Corporation, as
Lessor; Budget Rent a Car Systems Inc., and those
subsidiaries, affiliates and non-affiliates of Budget Group,
Inc., named on Schedule I thereto, as Lessees.
10.1 -- Bridge Loan Agreement dated June 29, 2000 among Deutsche
Bank, as Lender; Team Fleet Financing Corporation, as
Borrower; and Budget Group, Inc., as Servicer.
10.2 -- Amendment to Bridge Loan Agreement dated June 30, 2000 among
Credit Suisse First Boston, as Lender; Team Fleet Financing
Corporation, as Borrower; and Budget Group, Inc., as
Servicer.
27 -- Financial Data Schedule (for SEC use only).
</TABLE>
(b) Reports on Form 8-K.
None.
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<PAGE> 20
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.
BUDGET GROUP, INC.
(Registrant)
By: ROBERT L. APRATI
------------------------------------
Robert L. Aprati
Executive Vice President
General Counsel and Secretary
Dated: August 14, 2000
By: THOMAS L. KRAM
------------------------------------
Thomas L. Kram
Vice President, Controller
(Principal Accounting Officer)
Dated: August 14, 2000
20
