<PAGE> 1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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 SEPTEMBER 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)
<TABLE>
<S> <C>
DELAWARE 59-3227576
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
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 November 14, 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 18.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets as of September 30, 2000
(unaudited) and December 31, 1999......................... 3
Consolidated Statements of Operations for the Nine-Month
Periods Ended September 30, 2000 and 1999 (unaudited)..... 4
Consolidated Statement of Changes in Stockholders' Equity
for the Nine-Month Period Ended September 30, 2000
(unaudited)............................................... 5
Consolidated Statements of Cash Flows for the Nine-Month
Periods Ended September 30, 2000 and 1999 (unaudited)..... 6
Notes to Unaudited Consolidated Financial Statements........ 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 10
Item 3. Quantitative and Qualitative Disclosures about Market
Risk...................................................... 17
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............................ 18
Signature Page.......................................................... 19
</TABLE>
2
<PAGE> 3
PART I -- FINANCIAL STATEMENTS
BUDGET GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLAR AMOUNTS IN THOUSANDS)
ITEM 1. CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Cash and cash equivalents................................... $ 49,368 $ 56,886
Restricted cash............................................. 10,517 1,074
Trade and vehicle receivables, net.......................... 454,355 416,218
Revenue earning vehicles, net............................... 3,174,305 3,179,603
Property and equipment, net................................. 191,275 215,530
Prepaid expenses and other assets........................... 272,815 226,190
Intangibles, including goodwill, net........................ 842,690 852,789
Net assets of discontinued operations....................... 95,524 134,228
---------- ----------
Total assets.............................................. $5,090,849 $5,082,518
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Notes payable............................................... $3,642,194 $3,637,710
Accounts payable, accrued and other liabilities............. 657,964 585,068
Deferred income taxes....................................... 757 757
---------- ----------
Total liabilities......................................... 4,300,915 4,223,535
COMPANY OBLIGATED MANDATORILY REDEEMABLE
SECURITIES OF SUBSIDIARY.................................. 291,685 291,460
---------- ----------
STOCKHOLDERS' EQUITY
Common stock................................................ 374 373
Additional paid-in capital.................................. 598,323 646,641
Foreign currency translation adjustment..................... (12,702) (446)
Accumulated deficit......................................... (85,975) (77,217)
Treasury stock.............................................. (1,771) (1,828)
---------- ----------
Total stockholders' equity................................ 498,249 567,523
---------- ----------
Total liabilities and stockholders' equity................ $5,090,849 $5,082,518
========== ==========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
3
<PAGE> 4
BUDGET GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS EXCEPT FOR PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE THREE-MONTH FOR THE NINE-MONTH
PERIODS ENDED PERIODS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------- -----------------------
2000 1999 2000 1999
-------- -------- ---------- ----------
<S> <C> <C> <C> <C>
OPERATING REVENUE
Vehicle rental revenue........................... $678,798 $663,027 $1,839,340 $1,689,830
Royalty fees and other........................... 29,092 32,161 80,070 86,435
-------- -------- ---------- ----------
Total operating revenue....................... 707,890 695,188 1,919,410 1,776,265
-------- -------- ---------- ----------
OPERATING EXPENSES
Direct vehicle and operating..................... 273,510 266,337 766,245 706,474
Depreciation -- vehicle.......................... 160,283 146,538 448,691 409,930
Selling, general and administrative.............. 155,321 138,018 450,112 389,156
Amortization and non-vehicle depreciation........ 21,536 16,592 62,577 50,919
-------- -------- ---------- ----------
Total operating expense....................... 610,650 567,485 1,727,625 1,556,479
-------- -------- ---------- ----------
Operating income................................... 97,240 127,703 191,785 219,786
-------- -------- ---------- ----------
Other expense:
Vehicle interest, net............................ 61,007 50,960 168,239 134,664
Other interest, net.............................. 9,707 8,940 27,663 16,136
-------- -------- ---------- ----------
Total other expense, net...................... 70,714 59,900 195,902 150,800
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES..................................... 26,526 67,803 (4,117) 68,986
Provision (benefit) for income taxes............... 10,588 33,181 (9,421) 28,574
Distributions on trust preferred securities........ 4,687 4,792 14,062 14,219
-------- -------- ---------- ----------
INCOME (LOSS) FROM CONTINUING OPERATIONS........... 11,251 29,830 (8,758) 26,193
INCOME FROM DISCONTINUED OPERATIONS
(Net of provision for income taxes).............. -- 7,444 -- 4,243
-------- -------- ---------- ----------
NET INCOME (LOSS).................................. $ 11,251 $ 37,274 $ (8,758) $ 30,436
======== ======== ========== ==========
EARNINGS PER SHARE
BASIC:
Income (loss) from continuing operations...... $ 0.30 $ 0.81 $ (0.24) $ 0.72
Income from discontinued operations (Net of
provision for income taxes)................. -- 0.20 -- 0.12
-------- -------- ---------- ----------
Net income (loss)............................. $ 0.30 $ 1.01 $ (0.24) $ 0.84
======== ======== ========== ==========
DILUTED:
Income (loss) from continuing operations...... $ 0.30 $ 0.70 $ (0.24) $ 0.72
Income from discontinued operations (Net of
provision for income taxes)................. -- 0.16 -- 0.12
-------- -------- ---------- ----------
Net income (loss)............................. $ 0.30 $ 0.86 $ (0.24) $ 0.84
======== ======== ========== ==========
Weighted average number of shares outstanding
Basic:........................................... 37,250 36,768 37,249 36,179
Diluted:......................................... 37,250 47,485 37,249 36,259
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
4
<PAGE> 5
BUDGET GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000
(UNAUDITED)
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
FOREIGN
ADDITIONAL CURRENCY TOTAL
COMMON PAID-IN TRANSLATION ACCUMULATED TREASURY STOCKHOLDERS'
STOCK CAPITAL ADJUSTMENT DEFICIT STOCK EQUITY
------ ---------- ----------- ----------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1999..... $373 $646,641 $ (446) $(77,217) $(1,828) $567,523
Comprehensive income:
Net loss....................... -- -- -- (8,758) --
Foreign currency translation... -- -- (12,256) -- --
Total comprehensive loss......... (21,014)
Warrant repurchase............... -- (17,809) -- -- -- (17,809)
Make-whole payments.............. 1 (30,509) -- -- 57 (30,451)
---- -------- -------- -------- ------- --------
Balance at September 30, 2000.... $374 $598,323 $(12,702) $(85,975) $(1,771) $498,249
==== ======== ======== ======== ======= ========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
5
<PAGE> 6
BUDGET GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE NINE-MONTH PERIODS
ENDED SEPTEMBER 30,
---------------------------
2000 1999
------------ ------------
<S> <C> <C>
CASH FLOWS FROM CONTINUING OPERATING ACTIVITIES:
Net income (loss)........................................... $ (8,758) $ 30,436
Income from discontinued operations......................... -- (4,243)
----------- -----------
Income (loss) from continuing operations.................... (8,758) 26,193
Adjustments to reconcile income (loss) from continuing
operations to net cash provided by continuing operating
activities
Depreciation and amortization............................... 511,268 460,849
Changes in operating assets and liabilities, net of effects
from acquisitions Stock compensation...................... -- 218
Trade and vehicle receivables............................. (38,356) 23,752
Prepaid expenses and other assets......................... 29,235 (33,297)
Accounts payable, accrued and other liabilities........... (1,354) 62,361
----------- -----------
Total adjustments...................................... 500,793 513,883
----------- -----------
Net cash provided by continuing operating activities...... 492,035 540,076
----------- -----------
CASH FLOWS FROM CONTINUING INVESTING ACTIVITIES:
Change in restricted cash balance........................... (9,443) 405,471
Proceeds from sale of revenue earning vehicles.............. 2,247,814 1,901,313
Purchases of revenue earning vehicles....................... (2,728,732) (2,902,152)
Proceeds from the sale of property and equipment............ 29,354 10,440
Purchases of property and equipment......................... (26,764) (55,234)
Payment for acquisitions, net of cash acquired.............. (5,714) (1,018)
----------- -----------
Net cash used in continuing investing activities.......... (493,485) (641,180)
----------- -----------
CASH FLOWS FROM CONTINUING FINANCING ACTIVITIES:
Net increase (decrease) in vehicle obligations.............. (14,629) 406,839
Net increase (decrease) in commercial paper................. 20,059 (645,397)
Proceeds from other notes payable........................... 935 402,473
Principal payments on other notes payable................... (1,881) (73,949)
Warrant repurchase.......................................... (17,809) --
Make-whole payment.......................................... (30,451) (23,943)
Proceeds from other equity transactions, net................ -- 7
----------- -----------
Net cash provided (used) by continuing financing
activities............................................. (43,776) 66,030
----------- -----------
Net cash provided (used) by discontinued operations......... 38,704 (55,169)
----------- -----------
Effect of exchange rate changes on cash..................... (996) (345)
----------- -----------
Net decrease in cash and cash equivalents................... (7,518) (90,588)
Cash and cash equivalents, beginning of period.............. 56,886 124,011
----------- -----------
Cash and cash equivalents, end of period.................... $ 49,368 $ 33,423
=========== ===========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
6
<PAGE> 7
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. See note 3 to the Company's
unaudited consolidated financial statements herein.
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 during the nine-month period ended September 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 Company has sold both VPSI and Cruise effective September 30, 2000 and
October 1, 2000, respectively. The sale of VPSI was recorded at September 29,
2000, its closing date and Cruise will be recorded in the fourth quarter of
2000. The purchase price for Cruise was approximately $27.5 million and Budget
will retain a 19.9% ownership interest. The vehicles operated by Cruise but
currently administered by the Company are subject to lease terms under which the
purchaser is responsible for principal and interest payments and assumes the
risk of loss on the vehicles. The purchase price for VPSI was approximately
$26.2 million.
7
<PAGE> 8
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, largely extended warranty and finance reserves, may not be ultimately
realized or settled for several periods.
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 continues to operate the Carson Chrysler dealership
and expects to complete the sale of this dealership by December 31, 2000.
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. The Seasonal Facility was paid off in full by September 30,
2000.
In June 2000, the Company entered into an additional $90.0 million seasonal
funding facility ("Seasonal Facility-2") that expired on September 30, 2000. The
Seasonal Facility-2 was paid off in full by September 30, 2000.
Both Seasonal Facilities were utilized to finance the acquisitions of
vehicles during the peak buying season. Repayments of the Seasonal Facilities
were funded through the disposal of vehicles.
In November 2000, the Company reached agreement with its lenders on a
waiver and amendment to the working capital facility. The waiver period extends
through January 31, 2001; the amendment requires the Company to provide
additional collateral in the form of liens on certain real estate and furniture
and equipment, provides for limited future cash investments in international
operations, limits the Company's usage of the working capital facility to
letters of credit in an amount not to exceed $465.3 million and, modifies
certain financial covenants.
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
8
<PAGE> 9
the net income (loss) from continuing operations and number of shares utilized
in the earnings per share calculation.
<TABLE>
<CAPTION>
THREE-MONTH NINE-MONTH
PERIODS ENDED PERIODS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------- -----------------
2000 1999 2000 1999
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net income (loss) from continuing operations.............. $11,251 $29,830 $(8,758) $26,193
Effect of interest, distributions, and loan fee
amortization on convertible securities -- net of income
taxes................................................... -- 3,586 -- --
------- ------- ------- -------
Net income (loss) available to common Stockholders
after assumed conversion of dilutive securities.... $11,251 $33,416 $(8,758) $26,193
======= ======= ======= =======
Weighted average number of common shares used in basic
EPS..................................................... 37,250 36,768 37,249 36,179
Effect of dilutive securities:
Stock options........................................ -- -- -- 80
Convertible securities............................... -- 10,717 -- --
------- ------- ------- -------
Weighted average number of common shares and dilutive
potential common stock used in diluted EPS.............. 37,250 47,485 37,249 36,259
======= ======= ======= =======
</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 September 30, 2000, all of
the employees affected have been terminated and the Company has accruals
remaining related to the Restructuring of $3.1 million, which are largely
related to leases. During the nine-month period ended September 30, 2000
approximately $1.8 million has been paid or utilized and accrual 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.
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.
9
<PAGE> 10
Segment information for the periods ended September 30, 2000 and 1999,
respectively, are:
<TABLE>
<CAPTION>
THREE-MONTH PERIODS NINE-MONTH PERIODS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
------------------- -----------------------
2000 1999 2000 1999
-------- -------- ---------- ----------
<S> <C> <C> <C> <C>
Revenue
Car Rental -- North America...................... $431,126 $409,092 $1,211,486 $1,098,883
-- International...................... 89,507 83,966 230,427 191,713
Truck Rental..................................... 218,322 228,594 565,829 554,211
Eliminations..................................... (31,065) (26,464) (88,332) (68,542)
-------- -------- ---------- ----------
Total revenue................................. $707,890 $695,188 $1,919,410 $1,776,265
======== ======== ========== ==========
Operating income (loss)
Car Rental -- North America...................... $ 83,916 $ 83,752 $ 203,037 $ 159,423
-- International...................... (17,311) 7,029 (46,557) 9,416
Truck Rental..................................... 37,356 39,391 58,704 64,416
Corporate Overhead............................... (6,721) (2,469) (23,399) (13,469)
-------- -------- ---------- ----------
Total operating income........................ $ 97,240 $127,703 $ 191,785 $ 219,786
======== ======== ========== ==========
</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. The marketing agreement 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 received by the Company 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
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). 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 experiencing operating losses in Europe, and are evaluating various
alternatives to improve our operating results 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 consolidated 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 or the disposition occurs.
10
<PAGE> 11
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 third
quarter of 2000 decreased $18.6 million to $11.3 million compared with income of
$29.8 million in the third quarter of 1999. Income (loss) from continuing
operations decreased $35.0 million to a loss of $8.8 million for the first nine
months of 2000 from income of $26.2 million for the same period in 1999. Income
per share from continuing operations for the third quarter of 2000 was $0.30 per
diluted share compared to income of $0.70 per diluted share in 1999. These
decreases were primarily due to lower earnings from international operations and
increases of $9.0 million and $27.8 million ($5.0 million and $12.2 million in
international operations), in the quarter and year to date periods,
respectively, in bad debt expense largely due to continued system conversion
issues. In addition, margins in the North America car rental and Truck rental
segments were down slightly compared with the third quarter 1999 due to a more
competitive pricing environment.
Operating Revenues. Vehicle rental revenue increased $15.8 million, or
2.4%, in the third quarter of 2000 to $678.8 million from $663.0 million in the
third quarter of 1999. This increase was due primarily to volume growth of 5.8%
and 23.9% in North America and international car rental, respectively, with a
total volume increase of 7.1%. International same market volume grew
approximately 20% with the remainder due to acquisitions. Vehicle rental revenue
increased $149.5 million or 8.9% to $1,839.3 million for the first nine months
of 2000 from $1,689.8 million for the same period in 1999. The increase was due
primarily to volume growth of 7.9% and 51.7% in North America and international
car rental, respectively, with a total volume increase of 12.1%. International
same market volume grew approximately 36% with the remainder due to
acquisitions. Vehicle rental revenue increased at a lower rate than volume in
the quarter and year to date periods primarily due to lower revenue per day in
international car rental reflecting a shift in business mix, mainly to the tour
market. In addition, due to a competitive pricing environment in North America
car rental in the third quarter 2000 compared to 1999, revenue per day was down
slightly, however, due to the strength in the first half of 2000, the year to
date revenue per day was up slightly.
Royalty fees and other revenues decreased $3.1 million, or 9.5%, in the
third quarter of 2000 to $29.1 million from $32.2 million in the third quarter
of 1999 and decreased $6.4 million, or 7.4%, for the nine months ended September
30, 2000 to $80.1 million from $86.4 million for the first nine months of 1999
due to a decrease of $2.4 million and $3.2 million in revenue from move
management operations in the three and
11
<PAGE> 12
nine-month periods, respectively and 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 $43.2 million, or
7.6%, in the third quarter of 2000 to $610.7 million from $567.5 million in the
third quarter of 1999 and increased $171.1 million or 11.0% to $1,727.6 million
from $1,556.5 million for the first nine months ended 2000 and 1999,
respectively. These increases were generally reflective of the volume increases
previously mentioned.
Direct vehicle and operating expenses increased $7.2 million, or 2.7%, in
the third quarter of 2000 to $273.5 million from $266.3 million in 1999. These
expenses increased at lower rate than volume, primarily in North America,
largely due to improved productivity for direct personnel, a $2.7 million
increase in the pass-through of fees and surcharges to customers and shifting
from leased vehicles to owned vehicles in international operations. Direct
vehicle and operating expenses for the first nine months of 2000 increased $59.8
million, or 8.5%, to $766.2 million from $706.5 million in 1999. This increase
is generally reflective of the previously mentioned volume increase of 12.1%.
The year to date positive impact of the previously mentioned productivity,
pass-through of fees and shift from leased vehicles in international operations,
more than offset the impact of increased net repairs, maintenance and vehicle
reconditioning expenses, which primarily impacted the first quarter of 2000 as
compared to 1999.
Vehicle depreciation expense for the third quarter increased $13.7 million,
or 9.4%, to $160.3 million from $146.5 million in 1999. Vehicle depreciation
increased $38.8 million or 9.5% for the first nine months of 2000 to $448.7
million from $409.9 million for the same period in 1999. This expense for the
third quarter increased at a rate higher than volume primarily due to a shift in
the mix of leased to owned vehicles in international operations resulting in
higher depreciation and lower leasing costs compared to the same period in 1999
and partially offset by the impact on depreciation of extending the expected
holding periods of certain trucks. This expense for the nine-month 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 and the
impact of the previously mentioned extension in expected truck holding period.
Selling, general and administrative expenses increased by $17.3 million, or
12.5%, in the third quarter of 2000 to $155.3 million from $138.0 million in the
third quarter of 1999. This increase reflects higher selling costs associated
with the increased rental revenue, the previously mentioned $9.0 million
increase in bad debt expense, and an increase in incentive compensation costs of
$3.8 million due to a difference in the timing of the recognition and reversal
of this expense compared to 1999, somewhat offset by a gain on sale of property
of $5.0 million and lower truck administrative personnel expense of
approximately $1.1 million. Selling, general and administrative expenses
increased $61.0 million or 15.7% for the first nine months of 2000 to $450.1
million from $389.2 million in 1999. This increase reflected higher selling
costs associated with the increased rental revenue, the previously mentioned
$27.8 million increase in bad debt expense and an increase of $4.2 million
related to separation costs, offset somewhat by lower truck administrative
personnel expense of $8.0 million and gain on sale of property of $5.0 million.
We have continued to increase our allowance for doubtful accounts to reflect the
aging of customer receivables. System caused billing inaccuracies and delays in
applying cash received to invoices billed has continued to impair our ability to
collect amounts due 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 $4.9 million,
or 29.8%, in the third quarter of 2000 to $21.5 million from $16.6 million in
the third quarter of 1999. For the first nine months of 2000 these expenses
increased $11.7 million or 22.9% to $62.6 million from $50.9 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 $10.8
million, or 18.1% in the third quarter of 2000 to $70.7 million from $59.9
million in the third quarter of 1999 and increased $45.1 million, or 29.9%, to
$195.9 million from $150.8 million for the first nine 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
12
<PAGE> 13
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 $14.1 million for the three and
nine-month periods ended September 30, 2000, respectively, approximated the
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 September 30, 2000 has interest rates ranging from 4.35% to
12.00% and the material terms of the financing facilities are described below.
Approximately $1.1 billion of fleet-related indebtedness will mature during
2001. We intend to fund our additional 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 decreased 8.9% to
$492.0 million during the nine months ended September 30, 2000, from $540.1
million during the nine-month period ended September 30, 1999. This decrease is
primarily due to an increase in trade and vehicle receivables of $62.1 million
offset by $15.5 million in net income adjusted for depreciation and
amortization. Changes in prepaid and other assets and accounts payable and
accrued liabilities offset each other largely due to the Homestore.com
transaction. 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 $2,247.8 million and
$1,901.3 million during the first nine months of 2000 and 1999, respectively.
Cash paid to suppliers of revenue earning vehicles was $2,728.7 million and
$2,902.2 million during the first nine 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 nine 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 $26.8 million and
$55.2 million for the first nine months of 2000 and 1999, respectively.
Net cash provided by financing activities for the nine-month period ended
September 30, 2000, decreased by $109.8 million over the nine-month period ended
September 30, 1999 to net cash used of $43.8 million. This decrease over the
prior year was due primarily to the issuance of a new financing facility in
September 1999.
In the first nine 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
13
<PAGE> 14
paid-in-capital. 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.
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 September 30, 2000, the Company had
$3,642.2 million of indebtedness outstanding, $3,182.3 million of which
represented secured fleet financing and $459.9 million of which represented
non-vehicle indebtedness. At September 30, 2000, the Company had $387.6 million
of availability under various fleet financing facilities.
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. The Seasonal Facility was paid off in full by September 30,
2000.
In June 2000, the Company entered into an additional $90.0 million seasonal
funding facility ("Seasonal Facility-2") that expired on September 30, 2000. The
Seasonal Facility-2 was paid off in full by September 30, 2000.
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 September 30, 2000, the Company had borrowed $2,726.0 million under
asset-backed MTN's and $293.9 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 September 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 September 2000 consist of $162.4
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 12.00% at September 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.
14
<PAGE> 15
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 $195.1 million and $293.9 million at September 30, 1999 and 2000,
respectively, bears interest ranging from 6.57% to 6.80% at September 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 September 30, 2000.
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 September
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
September 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 September
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 September 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 September 30, 1999 and 2000, respectively. The TFFC-98 notes bear
interest at fixed rates ranging from 6.07% to 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 6.86%) 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.
15
<PAGE> 16
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%
(9.12% at September 30, 2000) and expires in 2003. There is no outstanding
balance on this facility at September 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 September 30, 2000, the Company had $465.3 million in letters of
credit outstanding.
In November 2000, the Company reached agreement with its lenders on a
waiver and amendment to the working capital facility. The waiver period extends
through January 31, 2001; the amendment requires the Company to provide
additional collateral in the form of liens on certain real estate and furniture
and equipment, provides for limited future cash investments in international
operations, limits the Company's usage of the working capital facility to
letters of credit in an amount not to exceed $465.3 million and, modifies
certain financial covenants. The inability of the Company to agree with lenders
on acceptable terms going forward could have a material adverse effect on the
Company's consolidated financial position and results of operations.
CHANGE IN FINANCIAL CONDITION
Total assets increased $8.3 million from $5,082.5 million at December 31,
1999 to $5,090.8 million at September 30, 2000.
Total liabilities increased by $77.4 million from $4,223.5 million at
December 31, 1999 to $4,300.9 million at September 30, 2000. This increase,
largely in accounts payable, accrued and other liabilities of $72.9 million
resulted primarily from 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.
16
<PAGE> 17
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 $0.6 million was spent
in 2000 through September 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 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 include additional risk of losses from international operations and
general economic conditions as well as the risks set forth in Item 7 of the
Company's Annual Report on Form 10-K for the year ended December 31, 1999, which
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 September 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.
17
<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
Not applicable.
ITEM 5 OTHER INFORMATION
Not applicable.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K.
Exhibit 27 -- Financial Data Schedule (for SEC use only).
(b) Reports on Form 8-K
None.
18
<PAGE> 19
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: WILLIAM S. JOHNSON
------------------------------------
William S. Johnson
Executive Vice President
Chief Financial Officer
Dated: November 14, 2000
By: THOMAS L. KRAM
------------------------------------
Thomas L. Kram
Vice President, Controller
(Principal Accounting Officer)
Dated: November 14, 2000
19
