1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended December 31, 2000
Commission file number 001-13950
CENTRAL PARKING CORPORATION
--------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Tennessee 62-1052916
--------------------------------------------- ------------------------------------
(State or Other Jurisdiction of Incorporation (I.R.S. Employer Identification No.)
or Organization)
2401 21st Avenue South,
Suite 200, Nashville, Tennessee 37212
--------------------------------------------- ------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (615) 297-4255
------------------------------------
Former name, address and fiscal year, if changed since last report: Not Applicable
------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]
Indicate the number of shares outstanding of each of the registrant's classes of
common stock as of the latest practicable date.
Class Outstanding at February 12, 2001
--------------------------------------------- ------------------------------------
Common Stock, $0.01 par value 35,972,725
2
INDEX
CENTRAL PARKING CORPORATION
PAGE
-----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated balance sheets
---December 31, 2000 and September 30, 2000........................ 3
Consolidated statements of earnings
--- three months ended December 31, 2000 and 1999.................. 4
Consolidated statements of cash flows
--- three months ended December 31, 2000 and 1999.................. 5
Notes to consolidated financial statements......................... 6-11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................................ 12-16
Item 3. Quantitative and Qualitative Disclosure about Market Risk ......... 17
PART 2. OTHER INFORMATION
Item 1. Legal Proceedings ................................................. 18
Item 4. Submission of Matters to a Vote of Security Holders................ 18
Item 6. Exhibits and Reports on Form 8-K................................... 18-23
SIGNATURES ........................................................ 23
3
CENTRAL PARKING CORPORATION
Consolidated Balance Sheets
Unaudited
Amounts in thousands, except share data
December 31, September 30,
2000 2000
------------ -------------
ASSETS
Current assets:
Cash and cash equivalents $ 39,141 $ 43,214
Management accounts receivable 32,991 32,052
Accounts receivable - other 16,566 14,995
Current portion of notes receivable (including amounts due from related parties
of $669 at December 31, and $763 at September 30, 2000) 3,513 4,090
Prepaid rent 6,993 8,307
Prepaid expenses 7,488 4,953
Deferred income taxes 612 612
------------ ------------
Total current assets 107,304 108,223
Investments, at amortized cost (fair value $5,905 at December 31, and $5,775 at
September 30, 2000) 5,866 5,778
Notes receivable, less current portion 45,593 46,153
Property, equipment, and leasehold improvements, net 424,893 432,833
Contract and lease rights, net 94,444 96,607
Goodwill, net 261,925 264,756
Investment in and advances to partnerships and joint ventures 29,827 30,306
Other assets 36,899 37,649
------------ ------------
Total assets $ 1,006,751 $ 1,022,305
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and capital lease obligations $ 53,636 $ 55,760
Accounts payable 70,438 73,461
Accrued payroll and related costs 12,539 14,287
Accrued expenses 12,415 12,236
Management accounts payable 30,582 33,452
Income taxes payable 13,124 8,279
------------ ------------
Total current liabilities 192,734 197,475
Long-term debt and capital lease obligations, less current portion 240,557 253,535
Deferred rent 19,346 18,794
Deferred compensation 11,941 11,732
Deferred income taxes 23,935 24,801
Minority interest 28,596 31,108
Other liabilities 5,601 4,603
------------ ------------
Total liabilities 522,710 542,048
Company-obligated mandatorily redeemable convertible securities of subsidiary
holding solely parent debentures 110,000 110,000
Shareholders' equity:
Common stock, $.01 par value; 50,000,000 shares authorized,
36,011,575 and 36,330,275 shares issued and outstanding, respectively 360 363
Additional paid-in capital 242,507 248,817
Accumulated other comprehensive loss, net (1,026) (144)
Retained earnings 132,577 121,612
Deferred compensation on restricted stock (377) (391)
------------ ------------
Total shareholders' equity 374,041 370,257
------------ ------------
Total liabilities and shareholders' equity $ 1,006,751 $ 1,022,305
============ ============
See accompanying notes to consolidated financial statements
Page 3 of 23
4
CENTRAL PARKING CORPORATION
Consolidated Statements of Earnings
Unaudited
Amounts in thousands, except per share data
Three Months Ended December 31,
2000 1999
------------ ------------
Revenues:
Parking $ 151,677 $ 159,496
Management contract 25,595 25,837
------------ ------------
Total revenues 177,272 185,333
------------ ------------
Costs and expenses:
Cost of parking 123,965 133,107
Cost of management contracts 10,222 8,440
General and administrative 17,653 19,927
Goodwill and non-compete amortization 3,001 3,062
Merger costs -- 2,385
------------ ------------
Total costs and expenses 154,841 166,921
------------ ------------
Property-related gains, net 2,777 1,758
------------ ------------
Operating earnings 25,208 20,170
Other income (expenses):
Interest income 1,554 1,866
Interest expense (6,202) (6,528)
Dividends on Company-obligated mandatorily redeemable
convertible securities of a subsidiary trust (1,472) (1,510)
Minority interest (602) (814)
Equity in partnership and joint venture earnings 1,114 1,486
------------ ------------
Earnings before income taxes and extraordinary item 19,600 14,670
Income tax expense 8,095 6,224
------------ ------------
Earnings before extraordinary item 11,505 8,446
Extraordinary item, net of tax -- (195)
------------ ------------
Net earnings $ 11,505 $ 8,251
============ ============
Basic earnings per share:
Earnings before extraordinary item $ 0.32 $ 0.23
Extraordinary item, net of tax $ -- $ --
Net earnings $ 0.32 $ 0.23
Diluted earnings per share:
Earnings before extraordinary item $ 0.32 $ 0.23
Extraordinary item, net of tax $ -- $ 0.01
Net earnings $ 0.32 $ 0.22
See accompanying notes to consolidated financial statements.
Page 4 of 23
5
CENTRAL PARKING CORPORATION
Consolidated Statements of Cash Flows
Unaudited
Dollar amounts in thousands
Three Months Ended December 31,
2000 1999
--------- ---------
Cash flows from operating activities:
Earnings before extraordinary item $ 11,505 $ 8,446
Extraordinary item, net of tax -- (195)
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization of property 5,221 6,855
Amortization of goodwill and non-compete 3,001 3,062
Amortization of contract and lease rights, straight-line rent, deferred financing
fees and other 3,142 4,373
Equity in partnership and joint venture earnings (1,114) (1,486)
Distributions from partnerships and joint ventures 1,914 1,254
Net gains on property-related activities (2,777) (1,758)
Deferred income tax (benefit) expense (284) 1,675
Minority interest 602 814
Tax benefit of nonqualifying stock options 32 295
Changes in operating assets and liabilities:
Management accounts receivable (939) (4,403)
Accounts receivable - other (1,571) 1,931
Prepaid rent 1,314 5,877
Prepaid expenses (2,535) (242)
Other assets (1,349) (1,267)
Accounts payable, accrued expenses and deferred compensation (4,945) (17,111)
Management accounts payable (2,870) 4,454
Income taxes payable 4,845 3,307
--------- ---------
Net cash provided by operating activities 13,192 15,881
--------- ---------
Cash flows from investing activities:
Proceeds from disposition of property and equipment 15,029 5,516
Investment in notes receivable, net 1,137 199
Purchase of property, equipment, and leasehold improvements (7,515) (15,952)
Purchase of contract and lease rights (530) (980)
Investments in and advances to partnerships and joint ventures (321) (915)
Proceeds from maturities and calls of investments 55 80
Purchase of investments (143) (163)
--------- ---------
Net cash provided (used) by investing activities 7,712 (12,215)
--------- ---------
Cash flows from financing activities:
Dividends paid (545) (551)
Net borrowings (repayments) under revolving credit agreement, net of issuance costs 550 (9,800)
Payment to minority interest partners (3,114) (3,112)
Principal repayments on notes payable and capital lease obligations (15,652) (263)
Repurchase of common stock (6,291) --
Proceeds from issuance of common stock and exercise of stock options, net 84 1,071
--------- ---------
Net cash used by financing activities (24,968) (12,655)
--------- ---------
Foreign currency translation (9) 145
--------- ---------
Net decrease in cash and cash equivalents (4,073) (8,844)
Cash and cash equivalents at beginning of period 43,214 53,669
--------- ---------
Cash and cash equivalents at end of period $ 39,141 $ 44,825
========= =========
Supplemental cash flow information:
Cash paid for interest $ 5,682 $ 7,127
Cash paid for income taxes $ 3,336 $ 1,282
See accompanying notes to consolidated financial statements.
Page 5 of 23
6
CENTRAL PARKING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Central
Parking Corporation ("Central Parking" or the "Company") have been prepared in
accordance with accounting principles generally accepted in the United States of
America and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by accounting principles generally accepted in the United States of America for
complete financial statements. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included. All significant
inter-company transactions have been eliminated in consolidation. Operating
results for the three months ended December 31, 2000 are not necessarily
indicative of the results that may be expected for the fiscal year ending
September 30, 2001. For further information, refer to the consolidated financial
statements and footnotes thereto for the year ended September 30, 2000 (included
in the Company's Annual Report on Form 10-K). Certain items have been
reclassified to conform to current year presentation.
BUSINESS COMBINATIONS
Contract and Lease Rights
The Company entered into an agreement effective June 1, 2000 to acquire
certain lease and contract rights for approximately $14.3 million. The
transaction was financed by the seller with a two-year obligation due in 2002.
The lease rights are being amortized over 17 years, the remaining term of the
lease, and the contract rights are being amortized over 3.5 years.
Black Angus Garage
On March 15, 2000, a limited liability company of which the Company is
the sole shareholder purchased the Black Angus Garage, a multi-level structure
with 300 parking stalls, located in New York City for $19.6 million. $13.3
million of the purchase was financed with a five-year note. The remainder was
financed from borrowings under the Credit Facility.
Arizona Stadium LLC
In October 1999, the Company purchased the remaining 50% interest in
Arizona Stadium LLC, a limited liability company that manages the parking
activities for the Arizona stadium, for approximately $1.6 million in cash. The
Company previously owned 50% of the limited liability company. In accordance
with the partnership agreement, the Company was required to repay the
outstanding note payable and incurred approximately $195 thousand of expenses,
net of tax, related to early extinguishment of debt. This expense has been
accounted for as an extraordinary loss in the three months ended December 31,
1999.
Allright Holdings, Inc.
On March 19, 1999, the Company completed a merger with Allright
Holdings, Inc. ("Allright"), pursuant to which approximately 7.0 million shares
of Central Parking common stock and approximately 0.5 million options and
warrants to purchase common stock of Central Parking, were exchanged for all of
the outstanding shares of common stock and options and warrants to purchase
common stock of Allright. The transaction constituted a tax-free reorganization
and has been accounted for as a pooling-of-interests under Accounting Principles
Board ("APB") Opinion No. 16, "Business Combinations". There were no material
transactions between Central Parking and Allright prior to the merger.
The Company incurred $2.4 million of merger related expenses on a
pretax basis during the quarter ended December 31, 1999 that were reported as
operating expenses. Included in these costs were approximately $0.6 million in
professional fees; comprised of legal, accounting, and consulting fees; $1.1
million related to employment agreements and severance; and the balance of $0.7
million in travel, supplies, printing and other out of pocket expenses. The
costs, which are directly attributable to the merger and are incremental to the
combined companies, are recognized when incurred.
Page 6 of 23
7
Edison Restructuring Agreement
In conjunction with the Company's merger with Allright, Allright
entered into a restructuring agreement whereby Allright loaned an additional
$9.9 million to the minority interest partner and amended certain other related
agreements. In addition, the parties agreed that the limited partner's capital
account would be increased to $29.4 million as of the effective date of the
restructuring, which coincided with the consummation date of the merger with
Allright.
EARNINGS PER SHARE
Basic earnings per share excludes dilution and is computed by dividing
income available to common shareholders by the weighted-average number of common
shares outstanding for the period. Diluted earnings per share reflects the
potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock or resulted in the
issuance of common stock, or if restricted shares of common stock were to become
fully vested, that then shared in the earnings of the entity.
The following table sets forth the computation of basic and diluted earnings per
share:
Three Months Ended December 31,
------------------------------------------------------------------------------
2000 1999
-------- --------
Income Common Income Common
Available Shares Per Share Available Shares Per Share
($000's) (000's) Amount ($000's) (000's) Amount
--------- -------- --------- --------- -------- ---------
Basic earnings per share:
Earnings before extraordinary item $ 11,505 36,012 $ 0.32 $ 8,446 36,516 $ 0.23
Effect of dilutive stock and options:
Stock option plan and warrants -- 112 -- -- 308 --
Restricted stock plan -- 185 -- -- 180 --
Deferred stock unit plan -- 48 -- -- 36 --
Employee stock purchase plan -- 60 -- -- 72 --
-------- -------- -------- -------- -------- --------
Diluted earnings per share:
Earnings before extraordinary item $ 11,505 36,417 $ 0.32 $ 8,446 37,113 $ 0.23
======== ======== ======== ======== ======== ========
Weighted average common shares used for the computation of basic
earnings per share excludes certain common shares issued pursuant to the
Company's restricted stock plan and deferred compensation agreement, because
under the related agreements the holder of such restricted stock may forfeit the
shares if certain employment or service requirements are not met.
The effect of the conversion of the company-obligated mandatorily
redeemable securities of the subsidiary trust has not been included in the
diluted earnings per share calculation since such securities are anti-dilutive.
At December 31, 2000 and 1999, such securities were convertible into 2,000,000
shares of common stock. For the three months ended December 31, 2000, options to
purchase 1,884,797 shares are excluded from the diluted common shares since they
are anti-dilutive.
PROPERTY-RELATED GAINS, NET
The Company routinely disposes of owned properties due to various factors,
including economic considerations, unsolicited offers from third parties and
condemnation proceedings initiated by local government authorities. Leased
properties are also periodically evaluated and determinations may be made to
sell or exit a lease obligation. A summary of property-related gains and losses
for the three months ended December 31, 2000 and 1999 is as follows:
Page 7 of 23
8
Three months ended
December 31,
2000 1999
----------- -----------
Net gains on sale of property $ 5,515 $ 2,253
Impairment charges for property, equipment and leasehold improvements (715) --
Impairment charges for contract rights, lease rights and other intangible assets (492) (495)
Lease termination costs (1,531) --
----------- -----------
Total property-related gains, net $ 2,777 $ 1,758
=========== ===========
The Company recorded impairment charges totaling $1.2 million during the quarter
ended December 31, 2000, of which $0.7 million was attributable to a property
where the operating lease agreement was amended such that the carrying value of
the leasehold improvements was no longer supported by projected future cash
flows. The remaining $0.5 million of the charge reflects a reduction in certain
Allright-related intangible assets which are no longer of any value to the
Company. The Company recorded an impairment charge of $0.5 million during the
quarter ended December 31, 1999.
LONG-TERM DEBT
On March 19, 1999, the Company established a new credit facility (the
"Credit Facility") providing for an aggregate availability of up to $400 million
consisting of a five-year $200 million revolving credit facility including a
sub-limit of $25 million for standby letters of credit, and a $200 million
five-year term loan. The principal amount of the term loan shall be repaid in
quarterly payments of $12.5 million commencing June 30, 2000 and continuing
until the loan is repaid. The Credit Facility bears interest at LIBOR plus a
grid based margin dependent upon Central Parking achieving certain financial
ratios. The rate as of December 31, 2000 was LIBOR plus 0.875%. The amount
outstanding under the Company's Credit Facility as of December 31, 2000 was
$253.5 million with a weighted average interest rate of 7.5%. The Credit
Facility contains covenants including those that require the Company to maintain
certain financial ratios, restrict further indebtedness and limit the amount of
dividends paid.
On February 14, 2000, the Company entered into an amendment and
restatement to the Credit Facility agreement primarily to allow for the Company
to repurchase up to $50 million in outstanding shares of its common stock. This
amendment and restatement contains provisions for up front fees of $681
thousand. Interest rates are not affected by the amendment and will continue to
be based upon the existing grid and determined based on certain financial
ratios.
The Company is required under the Credit Facility to enter into certain
interest rate protection agreements designed to fix interest rates on variable
rate debt and reduce exposure to fluctuations in interest rates. On October 27,
1999 the Company entered into a $25 million interest rate swap for a term of
four years, cancelable after two years at the option of the counterparty, under
which the Company will pay to the counterparty a fixed rate of 6.16%, and the
counterparty will pay to the Company a variable rate equal to LIBOR. The
transaction involved an exchange of fixed rate payments for variable rate
payments and does not involve the exchange of the underlying notional value. On
March 31, 2000, June 29, 2000, and again on September 29, 2000, the Company
entered into $25 million interest rate cap agreements. The rate is 8.0% for the
first two cap agreements and 8.5% for the last cap agreement and each has a term
consistent with the Credit Facility's. The Company paid a total of $646 thousand
for the three $25 million cap agreements.
On March 15, 2000, a limited liability company ("LLC") of which the
Company is the sole shareholder purchased the Black Angus Garage, a multi-level
structure with 300 parking stalls, located in New York City, for $19.6 million.
$13.3 million of the purchase was financed through a five-year note bearing
interest at one month floating LIBOR plus 162.5 basis points. To fix the
interest rate, the Company entered into a five-year LIBOR swap, yielding an
effective interest cost of 8.91% for the five-year period. The parent company
has guaranteed $1 million of the debt, which otherwise would have no recourse
except to the LLC. The remainder was financed from borrowings under the Credit
Facility.
Page 8 of 23
9
The Company entered into an agreement effective June 1, 2000, to
acquire certain contract and lease rights for approximately $14.3 million. The
transaction was financed by the seller with a two-year obligation due June 2002
at an interest rate of 7.32% and is backed by a letter of credit in the amount
of $15.0 million.
On March 18, 1998, the Company created Central Parking Finance Trust
("Trust") which completed a private placement of 4,400,000 shares at $25.00 per
share of 5.25% convertible trust issued preferred securities ("Preferred
Securities") pursuant to an exemption from registration under the Securities Act
of 1933, as amended. The Trust exists for the sole purpose of issuing the
Preferred Securities and investing the proceeds thereof in an equivalent amount
of 5.25% Convertible Subordinated Debentures ("Convertible Debentures") of the
Company due in 2008. The Preferred Securities do not have a stated maturity date
but are subject to mandatory redemption upon the repayment of the Convertible
Debentures at their stated maturity (April 1, 2008) or upon the acceleration or
earlier repayment of the Convertible Debentures. The Company's consolidated
balance sheets reflect the Preferred Securities of the Trust as
company-obligated mandatorily redeemable convertible securities of subsidiary
whose sole assets are convertible subordinated debentures of the Company. The
consolidated results of operations reflect dividends on the Preferred
Securities.
RECENT ACCOUNTING PRONOUNCEMENTS
Derivative financial instruments
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No.
133 established reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts. Under SFAS No. 133,
the Company would recognize all derivatives as either assets or liabilities,
measured at fair value, in the statement of financial position. In June 2000,
SFAS No. 138 "Accounting for Certain Derivative Instruments and Certain Hedging
Activities, an Amendment of FASB Statement No. 133" was issued clarifying the
accounting for derivatives under the new standard.
On October 1, 2000, the Company's prospective adoption of the
provisions of SFAS No. 133 and SFAS No. 138, resulted in the recording of a net
transition loss of $380 thousand, net of related income tax of $253 thousand, in
accumulated other comprehensive income. Further, the adoption of SFAS No. 133
and SFAS 138 resulted in the Company reducing derivative instrument assets by
$281 thousand and recording $353 thousand of derivative instrument liabilities.
At December 31, 2000, the Company adjusted the value of its derivative
financial instruments to their fair values. This resulted in the recognition of
an unrealized loss of $515 thousand, net of related income tax of $343 thousand
in accumulated other comprehensive loss, along with a decrease in derivative
instrument assets of $136 thousand and an increase in derivative instrument
liabilities of $722 thousand. Additionally, $22 thousand of accumulated other
comprehensive loss, net of related income tax benefit of $14 thousand, was
amortized to interest expense during the quarter.
Revenue recognition
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" (SAB
101). The company must adopt the provisions of SAB 101 no later than the fourth
quarter of the current year. Such adoption will be retroactive to October 1,
2000. SAB 101 will require the Company to change the timing of recognition of
performance-based revenues on approximately 90 of its current management
contracts. Such contracts earned approximately $2.0 million of performance-based
revenues in fiscal 2000. The Company is in the process of determining the impact
this change will have on its financial statements.
COMPREHENSIVE INCOME
Comprehensive income, which is comprised of net earnings, changes in
unrealized losses on derivative financial instruments and changes in foreign
currency translation adjustments, was $10.6 million and $8.4 million for the
three months ended December 31, 2000 and 1999, respectively.
BUSINESS SEGMENTS
The Company is managed based on segments administered by senior vice
presidents. These segments are generally organized geographically, with
exceptions depending on the needs of specific regions. The following are
summaries of revenues, costs, and other expenses by segment for the three months
ended December 31, 2000 and 1999. During fiscal year 2001, the Company realigned
certain locations among segments. All prior year segment data has been
reclassified to conform to the new segment alignment.
Page 9 of 23
10
THREE MONTHS ENDED DECEMBER 31, 2000
-----------------------------------------------------------------------------------------
ONE TWO THREE FOUR FIVE SIX
--------- --------- --------- --------- --------- ---------
Revenues:
Parking $ 11,219 $ 68,247 $ 8,046 $ 23,145 $ 9,005 $ 6,906
Management contract 2,452 6,212 2,459 4,150 2,809 1,495
--------- --------- --------- --------- --------- ---------
Total revenues 13,671 74,459 10,505 27,295 11,814 8,401
Costs and expenses:
Cost of parking 9,508 55,639 7,589 21,051 7,721 5,996
Cost of management contracts 1,042 2,396 955 1,636 1,148 699
General and administrative 1,192 5,049 705 1,381 917 625
Goodwill and non-compete
amortization 56 2,072 112 259 96 123
Merger costs -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Total costs and expenses 11,798 65,156 9,361 24,327 9,882 7,443
Property-related gains (losses), net -- (2,295) (7) 693 8 1
--------- --------- --------- --------- --------- ---------
Operating earnings 1,873 7,008 1,137 3,661 1,940 959
Other income (expense):
Interest income (39) (4,592) (73) (512) (13) (13)
Interest expense (65) (309) (43) (45) (62) (23)
Dividends - convertible -- -- -- -- -- --
Minority interest -- 117 (3) -- --
Equity in partnership and joint
ventures -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Earnings before income tax
and extraordinary item $ 1,769 $ 2,224 $ 1,018 $ 3,104 $ 1,865 $ 923
========= ========= ========= ========= ========= =========
Income tax expense
Earnings before
extraordinary item
Extraordinary item, net of tax
Net earnings
Identifiable assets $ 24,811 $ 355,311 $ 26,640 $ 57,261 $ 26,413 $ 20,667
========= ========= ========= ========= ========= =========
THREE MONTHS ENDED DECEMBER 31, 2000
-----------------------------------------------------------
ALL OTHERS
SEVEN INT'L & GEN'L CORP TOTAL
--------- --------- ------------ -----------
Revenues:
Parking $ 15,169 $ 6,465 $ 3,475 $ 151,677
Management contract 1,931 1,431 2,656 25,595
--------- --------- --------- -----------
Total revenues 17,100 7,896 6,131 177,272
Costs and expenses:
Cost of parking 13,485 5,581 (2,605) 123,965
Cost of management contracts 700 31 1,615 10,222
General and administrative 1,194 1,075 5,515 17,653
Goodwill and non-compete
amortization 3 -- 280 3,001
Merger costs -- -- -- --
--------- --------- --------- -----------
Total costs and expenses 15,382 6,687 4,805 154,841
Property-related gains (losses), net (1) 1 4,377 2,777
--------- --------- --------- -----------
Operating earnings 1,717 1,210 5,703 25,208
Other income (expense):
Interest income (24) 97 6,723 1,554
Interest expense (3) (52) (5,600) (6,202)
Dividends - convertible -- -- (1,472) (1,472)
Minority interest -- -- (716) (602)
Equity in partnership and joint
ventures -- 391 723 1,114
--------- --------- --------- -----------
Earnings before income tax
and extraordinary item $ 1,690 $ 1,646 $ 5,361 19,600
========= ========= =========
Income tax expense 8,095
-----------
Earnings before
extraordinary item 11,505
Extraordinary item, net of tax --
-----------
Net earnings $ 11,505
===========
Identifiable assets $ 29,747 $ 26,220 $ 439,681 $ 1,006,751
========= ========= ========= ===========
THREE MONTHS ENDED DECEMBER 31, 1999
-----------------------------------------------------------------------------------------
ONE TWO THREE FOUR FIVE SIX
--------- --------- --------- --------- --------- ---------
Revenues:
Parking $ 11,823 $ 69,993 $ 9,520 $ 26,696 $ 9,923 $ 6,739
Management contract 2,914 6,362 2,504 4,147 2,988 1,544
--------- --------- --------- --------- --------- ---------
Total revenues 14,737 76,355 12,024 30,843 12,911 8,283
Costs and expenses:
Cost of parking 10,508 56,835 9,273 24,889 8,473 5,824
Cost of management contracts 898 1,881 965 1,665 1,184 628
General and administrative 2,194 6,583 1,417 2,856 2,126 1,096
Goodwill and non-compete
amortization 47 2,271 112 265 102 123
Merger costs -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Total costs and expenses 13,647 67,570 11,767 29,675 11,885 7,671
Property-related gains (losses), net 20 (969) -- 12 -- (5)
--------- --------- --------- --------- --------- ---------
Operating earnings 1,110 7,816 257 1,180 1,026 607
Other income (expense):
Interest income (44) (4,605) (86) (510) (23) (14)
Interest expense (18) (398) (37) (47) (50) (2)
Dividends - convertible -- -- -- -- -- --
Minority interest -- -- -- -- -- --
Equity in partnership and joint
ventures -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Earnings before income tax
and extraordinary item $ 1,048 $ 2,813 $ 134 $ 623 $ 953 $ 591
========= ========= ========= ========= ========= =========
Income tax expense
Earnings before
extraordinary item
Extraordinary item, net of tax
Net earnings
Identifiable assets $ 31,590 $ 372,641 $ 42,638 $ 80,361 $ 35,821 $ 31,393
========= ========= ========= ========= ========= =========
THREE MONTHS ENDED DECEMBER 31, 1999
-----------------------------------------------------------
ALL OTHERS
SEVEN INT'L & GEN'L CORP TOTAL
--------- --------- ------------ -----------
Revenues:
Parking $ 15,331 $ 6,757 $ 2,714 $ 159,496
Management contract 2,124 1,339 1,915 25,837
--------- --------- --------- -----------
Total revenues 17,455 8,096 4,629 185,333
Costs and expenses:
Cost of parking 13,469 6,001 (2,165) 133,107
Cost of management contracts 707 (206) 718 8,440
General and administrative 1,986 1,097 572 19,927
Goodwill and non-compete
amortization 3 -- 139 3,062
Merger costs -- -- 2,385 2,385
--------- --------- --------- -----------
Total costs and expenses 16,165 6,892 1,649 166,921
Property-related gains (losses), net (33) 2 2,731 1,758
--------- --------- --------- -----------
Operating earnings 1,257 1,206 5,711 20,170
Other income (expense):
Interest income (22) 46 7,124 1,866
Interest expense (1) (68) (5,907) (6,528)
Dividends - convertible -- -- (1,510) (1,510)
Minority interest -- -- (814) (814)
Equity in partnership and joint
ventures -- 294 1,192 1,486
--------- --------- --------- -----------
Earnings before income tax
and extraordinary item $ 1,234 $ 1,478 $ 5,796 14,670
========= ========= =========
Income tax expense 6,224
-----------
Earnings before
extraordinary item 8,446
Extraordinary item, net of tax (195)
-----------
Net earnings $ 8,251
===========
Identifiable assets $ 27,284 $ 22,247 $ 412,561 $ 1,056,536
========= ========= ========= ===========
Page 10 of 23
11
Segment One encompasses the western region of the United States.
Segment Two encompasses the northeastern region of the United States, including
New York City, New Jersey, Eastern Pennsylvania, and New England.
Segment Three encompasses the southeastern region of the United States.
Segment Four encompasses parts of the mid-western region of the United States,
and also includes Southern Texas and Washington, D.C.
Segment Five encompasses the inter-mountain region of the United States,
including Northern Texas and parts of the Midwest.
Segment Six encompasses the southern region of the United States, including
parts of Kentucky, Tennessee and Louisiana, as well as Puerto Rico.
Segment Seven encompasses the central region of the United States.
International encompasses all non-U.S. locations.
All others and general corporate encompasses home office, eliminations, certain
owned real estate, and certain partnerships.
Page 11 of 23
12
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE
This report includes various forward-looking statements regarding the
Company that are subject to risks and uncertainties, including, without
limitation, the factors set forth below and under the caption "Risk Factors" in
the Management's Discussion and Analysis of Financial Condition and Results of
Operations section of the Company's Report on Form 10-K for the year ended
September 30, 2000. Forward-looking statements include, but are not limited to,
discussions regarding the Company's operating strategy, growth strategy,
acquisition strategy, cost savings initiatives, industry, economic conditions,
financial condition, liquidity and capital resources and results of operations.
Such statements include, but are not limited to, statements preceded by,
followed by or that otherwise include the words "believes," "expects,"
"anticipates," "intends," "estimates" or similar expressions. For those
statements, the Company claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995.
The following important factors, in addition to those discussed
elsewhere in this report, and the Company's report on Form 10-K for the year
ended September 30, 2000 could affect the future financial results of the
Company and could cause actual results to differ materially from those expressed
in forward-looking statements contained or incorporated by reference in this
document:
- successful completion of the integration of Allright, as well as past
and future acquisitions in light of challenges in retaining key
employees, synchronizing business processes and efficiently integrating
facilities, marketing, and operations;
- successful implementation of the Company's operating and growth
strategy, including possible strategic acquisitions;
- fluctuations in quarterly operating results caused by a variety of
factors including the timing of gains on sales of owned facilities,
preopening costs, changes in the Company's cost of borrowing, effect of
weather on travel and transportation patterns, player strikes or other
events affecting major league sports and local, national and
international economic conditions;
- the ability of the Company to form and maintain its strategic
relationships with certain large real estate owners and operators;
- global and/or regional economic factors;
- compliance with laws and regulations, including, without limitation,
environmental, antitrust and consumer protection laws and regulations
at the federal, state, local and international levels.
OVERVIEW
On March 19, 1999, Central Parking completed a merger (the "Merger")
with Allright Holdings, Inc. ("Allright"). The transaction constituted a
tax-free reorganization and has been accounted for as a pooling-of-interests
under APB Opinion No. 16. Refer to the accompanying notes to the consolidated
financial statements.
The Company operates parking facilities under three types of
arrangements: leases, fee ownership, and management contracts. Parking revenues
from owned properties amounted to $17.4 million and $16.4 million for the three
months ended December 31, 2000 and 1999, respectively, representing 11.5% and
10.3% of total parking revenues for the respective periods. Ownership of parking
facilities, either independently or through joint ventures, typically requires a
larger capital investment than managed or leased facilities but provides maximum
control over the operation of the parking facility and the greatest profit
potential of the three types of operating arrangements. As the owner, all
changes in owned facility revenue and expense flow directly to the Company.
Additionally, the Company has the potential to realize benefits of appreciation
in the value of the underlying real estate if the property is sold. Central
Parking assumes complete responsibility for all aspects of the property,
including all structural, mechanical, or electrical maintenance or repairs and
property taxes.
Page 12 of 23
13
Parking revenues from leased facilities amounted to $134.3 million and
$143.1 million for the three months ending December 31, 2000 and 1999
respectively, which accounted for 88.5% and 89.7% of total parking revenues in
the respective periods. Leases generally provide for a contractually established
payment to the facility owner, which is a fixed annual amount, a percentage of
gross revenues, or a combination. As a result, Central Parking's revenues and
profits in its lease arrangements are dependent upon the performance of the
facility. Leased facilities require a longer commitment and a larger capital
investment by Central Parking than managed facilities but generally provide a
more stable source of revenue and a greater opportunity for long-term revenue
growth. Under its leases, the Company is typically responsible for all facets of
the parking operations, except for structural, mechanical, or electrical
maintenance or repairs. Lease arrangements are typically for terms of three to
ten years, with renewal options.
Management contract revenues amounted to $25.6 million and $25.8
million for the three months ended December 31, 2000 and 1999, respectively.
Management contract revenues consist of management fees (both fixed and
percentage of revenues) and fees for ancillary services such as insurance,
accounting, equipment leasing and consulting. The cost of management contracts
includes insurance premiums and claims and other indirect overhead. The
Company's responsibilities under a management contract as a facility manager
include hiring, training and staffing parking personnel, and providing
collections, accounting, record keeping, insurance and facility marketing
services. Generally, Central Parking is not responsible under its management
contracts for structural, mechanical, or electrical maintenance or repairs, or
for providing security or guard services or for paying property taxes. The
typical management contract is for a term of one to three years and generally is
renewable for successive one-year terms, but is cancelable by the property owner
on short notice.
The Company's clients have the option of obtaining insurance on their
own or having Central Parking provide insurance as part of the services provided
under the management contract. Because of its size and claims experience, the
Company can purchase such insurance at discounts to comparable market rates and,
management believes, at lower rates than the Company's clients can generally
obtain on their own. Accordingly, Central Parking generates profits on the
insurance provided under its management contracts.
As of December 31, 2000, Central Parking operated 1,989 parking
facilities through management contracts, leased 2,185 parking facilities, and
owned 235 parking facilities, either independently or in joint venture with
third parties.
THREE MONTHS ENDED DECEMBER 31, 2000 COMPARED TO THREE MONTHS ENDED DECEMBER 31,
1999
Parking revenues for the first quarter of fiscal 2001 decreased to
$151.7 million from $159.5 million in the first quarter of fiscal 2000, a
decrease of $7.8 million, or 4.9%. The decrease is primarily a result of two
factors. First, adverse weather conditions in the Midwest and Northeast during
the first quarter negatively impacted parking revenues. Second, the Company
experienced a net decline of 255 leased and owned locations since December 31,
1999 (237 locations added, offset by 492 locations lost). The decline in
locations is due to a variety of factors including divestitures related to the
Allright transaction, the sale or closure of underperforming locations, and the
loss of locations in the ordinary course of business. Of the 255 net locations
lost, 246 were lost between December 31, 1999 and September 30, 2000 and 9 were
lost during the quarter ended December 31, 2000. Revenues from foreign
operations amounted to approximately $7.9 million and $8.1 million for the
quarters ended December 31, 2000 and 1999, respectively.
Management contract revenues for the first quarter of fiscal 2001
decreased to $25.6 million from $25.8 million in the same period of fiscal 2000,
a decrease of $0.2 million or 0.9%. The slight decrease is due to the fact that
the Company operated 99 fewer management contract locations as of December 31,
2000 as compared against December 31, 1999.
Cost of parking in the first quarter of 2001 decreased to $124.0
million from $133.1 million in the first quarter of 2000, a decrease of $9.1
million or 6.9%. This decrease was due primarily to a reduction in rent and
property taxes of $7.8 million, and a reduction in payroll and benefits of $2.8
million as compared against the prior year period. The reduction in rent and
payroll can both be attributed to the reduction in the number of leased and
owned locations operated by the Company as described above. Rent expense as a
percentage of parking revenues declined to 47.1% during the quarter ended
December 31, 2000, from 49.1% in the quarter ended December 31, 1999. Payroll
and
Page 13 of 23
14
benefit expenses were 18.2% of parking revenues during the first quarter of
fiscal 2001 as compared to 19.1% in the comparable prior year period. The
reduction in both rent and payroll expenses as a percentage of parking revenues
is a result of the closure of unprofitable locations as well as an increased
focus on expense control throughout the Company. Cost of parking as a percentage
of parking revenues decreased to 81.7% in the first quarter of fiscal 2001 from
83.5% in the first quarter of fiscal 2000.
Cost of management contracts in the first quarter of fiscal 2001
increased to $10.2 million from $8.4 million in the comparable period in 2000,
an increase of $1.8 million or 21.1%. The increase in cost reflects higher
workers compensation and medical claims by employees. Cost of management
contracts as a percentage of management contract revenue increased to 39.9% for
the first fiscal quarter of 2001 from 32.7% for the same period in 2000, due to
the increase in the aforementioned items.
General and administrative expenses decreased to $17.7 million for the
first quarter of fiscal 2001 from $19.9 million in the first quarter of fiscal
2000, a decrease of $2.2 million or 11.4%. This decrease is due to $2.2 million
of additional depreciation in the prior year resulting from the adoption of a
shorter life on certain Allright related computer assets. General and
administrative expenses as a percentage of total revenues decreased to 10.0% for
the first quarter of fiscal 2001 compared to 10.8% for the first quarter of
fiscal 2000.
Goodwill and non-compete amortization for the first quarter of fiscal
2001 decreased to $3.0 million from $3.1 million in the first quarter of fiscal
2000, a decrease of $0.1 million.
The Company incurred $2.4 million of merger related expenses on a
pretax basis during the quarter ended December 31, 1999 that were reported as
operating expenses. Included in these costs are approximately $0.6 million in
professional fees; comprised of legal, accounting, and consulting fees; $1.1
million related to employment agreements and severance; and the balance of $0.7
million in travel, supplies, printing and other out of pocket expenses.
Interest income decreased to $1.6 million for the first quarter of
fiscal 2001 from $1.9 million in the first quarter of fiscal 2000, a decrease of
$0.3 million, or 16.7%. The decrease in interest income is a result of the
retirement of a $10.3 million note during the fourth quarter of fiscal 2000.
Interest expense and dividends on Company-obligated mandatorily
redeemable convertible securities of a subsidiary trust decreased to $7.7
million for the first quarter of fiscal 2001 from $8.0 million in the first
quarter of fiscal 2000, a decrease of $0.3 million or 4.5%. This decrease in
interest expense was primarily attributable to the lower amount of overall debt
outstanding during the current quarter. The weighted average balance outstanding
under such credit facilities and convertible securities was $401.9 million
during the quarter ended December 31, 2000, at a weighted average interest rate
of 7.1% compared to $474.0 million during the quarter ended December 31, 1999 at
an average interest rate of 6.4%.
Net property-related gains for the three months ended December 31, 2000
increased to $2.8 million from $1.8 million in the comparable period in 1999.
Net gains on sales of property of $5.5 million were offset by impairment charges
of $1.2 million and lease termination costs of $1.5 million in the current
quarter. Net gains on sales of property for the three months ended December 31,
1999 were $2.3 million. These gains were offset by $0.5 million of impairment
charges.
Income taxes increased to $8.1 million for the first quarter of fiscal
2001 from $6.2 million in the first quarter of fiscal 2000, an increase of $1.9
million or 30.1%. The effective tax rate for the first quarter of fiscal 2001
was 41.3% compared to 42.4% for the first quarter of fiscal 2000. The decrease
in the effective tax rate is attributable to certain non-deductible merger
expenses included in operating expenses during the prior year.
LIQUIDITY AND CAPITAL RESOURCES
Operating activities for the three months ended December 31, 2000
provided net cash of $13.2 million, compared to $15.9 million of cash provided
by operating activities for the three months ended December 31, 1999. Net
earnings of $11.5 million and depreciation and amortization of $11.4 million,
offset by increases in operating assets and
Page 14 of 23
15
decreases in operating liabilities totaling $8.0 million account for the
majority of the cash provided by operating activities during the first three
months of fiscal 2000.
Investing activities for the three months ended December 31, 2000
provided net cash of $7.7 million, compared to $12.2 million of net cash used
for investing activities for the same period in 1999. Proceeds of $15.0 million
from the disposition of property and equipment, offset by the purchase of
property, equipment, leasehold improvements, and contract rights of $8.0 million
account for the majority of the cash provided by investing activities in the
first three months of fiscal 2001. Purchase of property, equipment, leasehold
improvements and contract rights of $16.9 million, partially offset by proceeds
from sales of property of $5.5 million account for the majority of cash used by
investing activities during the first three months of fiscal 2000.
Financing activities for the three months ended December 31, 2000 used
net cash of $25.0 million, compared to $12.7 million in the same period in 1999.
Principal repayments on notes payable of $15.7 million and the repurchase of
$6.3 million of common stock account for the majority of the cash used by
financing activities during the three months ended December 31, 2000. Net
payments under the revolving credit agreement of $9.8 million and payments to
minority interest partners of $3.1 million, partially offset by proceeds from
the issuance of common stock and the exercise of warrants of $1.1 million
account for the majority of the cash used by financing activities during the
three months ended December 31, 1999.
Depending on the timing and magnitude of the Company's future
investments (either in the form of leased or purchased properties, joint
ventures, or acquisitions), the working capital necessary to satisfy current
obligations is anticipated to be generated from operations and from Central
Parking's credit facility over the next twelve months. In the ordinary course of
business, Central Parking is required to maintain and, in some cases, make
capital improvements to the parking facilities it operates.
If Central Parking identifies investment opportunities requiring cash
in excess of Central Parking's cash flows and the existing credit facility,
Central Parking may seek additional sources of capital, including seeking to
further amend the existing credit facility to obtain additional indebtedness.
The Allright Registration Rights Agreement, as noted under the caption "Risk
Factors" in the Management's Discussion and Analysis of Financial Condition and
Results of Operations section of the Company's Report on Form 10-K for the year
ended September 30, 2000, provides certain limitations and restrictions upon
Central Parking's ability to issue new shares of Central Parking common stock.
Until certain shareholders of Central Parking have received at least $350
million from the sale of Central Parking common stock in either registered
offerings or otherwise, Central Parking cannot sell any shares of its common
stock on its own behalf, subject to certain exceptions. While Central Parking
does not expect this limitation to affect its working capital needs, it could
have an impact on Central Parking's ability to complete significant
acquisitions. The decreased market value of Central Parking's common stock also
could have an impact on Central Parking's ability to complete significant
acquisitions or raise additional capital.
Future Cash Commitments
On January 18, 2000, the Company's board of directors authorized the
repurchase of up to $50 million in outstanding shares of the Company's common
stock. The Company's bank lenders subsequently approved the repurchase on
February 14, 2000. Subject to availability, the repurchases may be made from
time to time in open market transactions or in privately negotiated off-market
transactions at prevailing market prices that the Company deems appropriate. As
of December 31, 2000 the Company had repurchased 1.2 million shares at a total
cost of $21.1 million.
The Company routinely makes strategic capital expenditures to enhance
customer service at parking facilities under its control. The Company's capital
expenditure budget for fiscal 2001 is approximately $20.0 million.
Credit Facility
On March 19, 1999, Central Parking established a new credit facility
(the "Credit Facility") providing for an aggregate availability of up to $400
million consisting of a five-year $200 million revolving credit facility
including a sub-limit of $25 million for standby letters of credit, and a $200
million five-year term loan. The principal amount of the term loan shall be
repaid in quarterly payments of $12.5 million, commencing June 30, 2000 and
continuing until the loan is repaid. The Credit Facility bears interest at LIBOR
plus a grid based margin dependant upon the Company achieving certain financial
ratios. The rate as of December 31, 2000 was LIBOR plus 0.875%. The Credit
Facility
Page 15 of 23
16
contains certain covenants including those that require Central Parking to
maintain certain financial ratios, restrict further indebtedness and limit the
amount of dividends paid. The amount outstanding under the Company's Credit
Facility as of December 31, 2000 is $253.5 million, with a weighted average
interest rate of 7.5%.
On February 14, 2000, the Company entered into an amendment and
restatement to the Credit Facility agreement primarily to allow for the Company
to repurchase up to $50 million in outstanding shares of its common stock. This
amendment and restatement contains provisions for up front fees of $681
thousand. Interest rates are not affected by the amendment and will continue to
be based upon the existing grid and determined based on certain financial
ratios.
Convertible Trust Issued Preferred Securities and Equity Offerings
On March 18, 1998, the Company completed an offering of 2,137,500
shares of common stock. The Company received net proceeds from the offering of
$89.1 million. Concurrent with the common stock offering, the Company created
the Trust which completed a private placement of 4,400,000 shares at $25.00 per
share of 5.25% convertible trust issued preferred securities pursuant to an
exemption from registration under the Securities Act of 1933, as amended. The
Preferred Securities represent preferred undivided beneficial interests in the
assets of Central Parking Finance Trust, a statutory business trust formed under
the laws of the State of Delaware. The Company owns all of the common securities
of the Trust. The Trust exists for the sole purpose of issuing the Preferred
Securities and investing the proceeds thereof in an equivalent amount of 5.25%
Convertible Subordinated Debentures ("Convertible Debentures") of the Company
due 2028. The net proceeds to the Company from the Preferred Securities private
placement were $106.0 million. Each Preferred Security is entitled to receive
cumulative cash distributions at an annual rate of 5.25% (or $1.312 per share)
and will be convertible at the option of the holder thereof into shares of
Company common stock at a conversion rate of 0.4545 shares of Company common
stock for each Preferred Security (equivalent to $55.00 per share of Company
common stock), subject to adjustment in certain circumstances. The Preferred
Securities do not have a stated maturity date but are subject to mandatory
redemption upon the repayment of the Convertible Debentures at their stated
maturity (April 1, 2028) or upon acceleration or earlier repayment of the
Convertible Debentures. The proceeds of the equity and preferred security
offerings were used to repay indebtedness.
The Company's consolidated balance sheets reflect the Preferred
Securities of the Trust as company-obligated mandatorily redeemable convertible
securities of subsidiary whose sole assets are convertible subordinated
debentures of the Parent.
Page 16 of 23
17
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Interest Rates
The Company's primary exposure to market risk consists of changes in
interest rates on variable rate borrowings. As of December 31, 2000, the Company
had $253.5 million of variable rate debt outstanding under the Credit Facility
priced at LIBOR plus 87.5 basis points. The Company is required under the Credit
Facility to enter into interest rate protection agreements designed to limit the
Company's exposure to increases in interest rates. As of December 31, 2000,
interest rate protection agreements had been purchased to hedge $100 million of
the Company's variable rate debt. Please refer to the paragraph entitled
Long-Term Debt in the Notes to the Financial Statements for a description of the
individual interest rate protection agreements. $162.5 million of the Credit
Facility is payable in quarterly installments of $12.5 million and $91.0 million
in revolving credit loans are due in March 2004. The Company anticipates paying
the scheduled quarterly payments out of operating cash flow and, if necessary,
will attempt to renew the revolving credit facility.
Page 17 of 23
18
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The ownership of property and provision of services to the public entails an
inherent risk of liability. Although the Company is engaged in routine
litigation incidental to its business, there is no legal proceeding to which the
Company is a party, which, in the opinion of management, will have a material
adverse effect upon the Company's financial condition, results of operations, or
liquidity. The Company carries liability insurance against certain types of
claims that management believes meets industry standards; however, there can be
no assurance that any future legal proceedings (including any judgments,
settlements or costs) will not have a material adverse effect on the Company's
financial condition, liquidity or results of operations.
In connection with the merger of Allright Holdings, Inc. with a subsidiary of
the Company, the Antitrust Division of the United States Department of Justice
(the "Antitrust Division") filed a complaint in U.S. District Court for the
District of Columbia seeking to enjoin the merger on antitrust grounds. In
addition, the Company received notices from several states, including Tennessee,
Ohio, Texas, Illinois, and Maryland, that the attorneys general of those states
were reviewing the merger from an antitrust perspective. Several of these states
also requested certain information relating to the merger and the operations of
Central and Allright in the form of civil investigative demands.
Central and Allright entered into a settlement agreement with the Antitrust
Division on March 16, 1999, under which the two companies agreed to divest a
total of 74 parking facilities in 18 cities, representing approximately 18,000
parking spaces. None of the states that reviewed the transaction from an
antitrust perspective became a party to the settlement agreement with the
antitrust Division, and the Company is aware that at least one of these states,
Tennessee, is still conducting a review of the operations of Central and
Allright. The Company has completed the divestiture of all of the facilities
required to be divested by the settlement agreement. The settlement agreement
provides that Central and Allright may not operate any of the divested
facilities for a period of two years following the divestiture of such facility.
Item 4. Submission of Matters to a Vote of Security-Holders
There were no matters submitted to a vote of security holders during the quarter
ended December 31, 2000.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
2 Plan of Recapitalization, effective October 9, 1997 (Incorporated
by reference to Exhibit 2 to the Company's Registration Statement
No. 33-95640 on Form S-1).
2.1 Agreement and Plan of Merger dated September 21, 1998, by and
among the Registrant, Central Merger Sub, Inc., Allright
Holdings, Inc., Apollo Real Estate Investment Fund II, L.P. and
AEW Partners, L.P. (Incorporated by reference to Exhibit 2.1 to
the Company's Registration Statement No. 333-66081 on Form S-4
filed on October 21, 1998).
2.2 Amendment dated as of January 5, 1999, to the Agreement and Plan
of Merger dated September 21, 1998 by and among the Registrant,
Central Merger Sub, Inc., Allright Holdings, Inc., Apollo Real
Estate Investment Fund II, L.P. and AEW Partners, L.P.
(Incorporated by reference to Exhibit 2.1 to the Company's
Registration Statement No. 333-66081 on Form S-4 filed on October
21, 1998, as amended).
2.3 Acquisition Agreement and Plan of Merger dated as of November 7,
1997, by and between the Registrant and Kinney System Holding
Corp and a subsidiary of the Registrant (Incorporated by
reference to the Company's Current Report on Form 8-K filed on
February 17, 1998).
Page 18 of 23
19
3.1 (a) Amended and Restated Charter of the Registrant
(Incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement No. 333-23869 on
Form S-3).
(b) Articles of Amendment to the Charter of Central
Parking Corporation increasing the authorized number
of shares of common stock, par value $0.01 per share,
to one hundred million (Incorporated by reference to
Exhibit 2 to the Company's 10-Q for the quarter ended
March 31, 1999).
3.2 Amended and Restated Bylaws of the Registrant
(Incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement No. 333-23869 on
Form S-3).
4.1 Form of Common Stock Certificate (Incorporated by
reference to Exhibit 4.1 to the Company's
Registration Statement No. 33-95640 on Form S-1).
4.4 (a) Registration Rights Agreement (the "Allright
Registration Rights Agreement") dated as of September
21, 1998 by and between the Registrant, Apollo Real
Estate Investment Fund II, L.P., AEW Partners, L.P.
and Monroe J. Carell, Jr., The Monroe Carell Jr.
Foundation, Monroe Carell Jr. 1995 Grantor Retained
Annuity Trust, Monroe Carell Jr. 1994 Grantor
Retained Annuity Trust, The Carell Children's Trust,
The 1996 Carell Grandchildren's Trust, The Carell
Family Grandchildren 1990 Trust, The Kathryn Carell
Brown Foundation, The Edith Carell Johnson
Foundation, The Julie Carell Stadler Foundation, 1997
Carell Elizabeth Brown Trust, 1997 Ann Scott Johnson
Trust, 1997 Julia Claire Stadler Trust, 1997 William
Carell Johnson Trust, 1997 David Nicholas Brown Trust
and 1997 George Monroe Stadler Trust (Incorporated by
reference to Exhibit 4.4 to the Company's
Registration Statement No. 333-66081 filed on October
21, 1998).
4.4 (b) Amendment dated January 5, 1999 to the Allright
Registration Rights Agreement (Incorporated by
reference to Exhibit 4.4.1 to the Company's
Registration Statement No. 333-66081 filed on October
21, 1998, as amended).
4.4 (c) Second Amendment dated February 1, 2001 to the
Allright Registration Rights Agreement.
(Incorporated by reference to Exhibit 4.6 to the
Company's Registration Statement No. 333-54914 on
Form S-3 filed on February 2, 2001.)
4.5 Indenture dated March 18, 1998 between the registrant
and Chase Bank of Texas, National Association, as
Trustee regarding up to $113,402,050 of 5-1/4 %
Convertible Subordinated Debentures due 2028.
(Incorporated by reference to Exhibit 4.5 to the
Registrant's Registration Statement No. 333-52497 on
Form S-3).
4.6 Amended and Restated Declaration of Trust of Central
Parking Finance Trust dated as of March 18, 1998.
(Incorporated by reference to Exhibit 4.5 to the
Registrant's Registration Statement No. 333-52497 on
Form S-3).
4.7 Preferred Securities Guarantee Agreement dated as of
March 18, 1998 by and between the Registrant and
Chase Bank of Texas, national Association as Trustee
(Incorporated by reference to Exhibit 4.7 to the
Registrant's Registration Statement No. 333-52497 on
Form S-3).
4.8 Common Securities Guarantee Agreement dated March 18,
1998 by the Registrant. (Incorporated by reference to
Exhibit 4.9 to 333-52497 on Form S-3).
10.1 Executive Compensation Plans and Arrangements
Page 19 of 23
20
(a) 1995 Incentive and Nonqualified Stock Option Plan
for Key Personnel (Incorporated by reference to
Exhibit 10.1 to the Company's Registration Statement
No. 33-95640 on Form S-1).
(b) Amendment to the 1995 Incentive and Nonqualified
Stock Option Plan for Key Personnel increasing the
number of shares licensed for issuance under the plan
to 3,817,500 (Incorporated by reference to Exhibit
10.1 to the Company's Annual Report on Form 10-K for
the period ended September 30, 2000).
(c) Form of Option Agreement under Key Personnel Plan
(Incorporated by reference to Exhibit 10.2 to the
Company's Registration Statement No. 33-95640 on Form
S-1).
(d) 1995 Restricted Stock Plan (Incorporated by reference
to Exhibit 10.5.1 to the Company's Registration
Statement No. 33-95640 on Form S-1.)
(e) Form of Restricted Stock Agreement (Incorporated
by reference to Exhibit 10.5.2 to the Company's
Registration Statement No.33-95640 on Form S-1.)
(f) Form of Employment Agreements with Executive
Officers (Incorporated by reference to Exhibit 10.7
to the Company's Registration Statement No. 33-95640
on Form S-1.)
(g) Monroe J. Carell, Jr. Employment Agreement
(Incorporated by reference to Exhibit 10.8 to the
Company's Registration Statement No. 33-95640 on Form
S-1.)
(h) Monroe J. Carell, Jr. Revised Deferred
Compensation Agreement, as amended (Incorporated by
reference to Exhibit 10.9 to the Company's
Registration Statement No.33-95640 on Form S-1.)
(i) James H. Bond Employment Agreement (Incorporated
by reference to Exhibit 10.10 to the Company's
Registration Statement No. 33-95640 on Form S-1.)
(j) Performance Unit Agreement between Central Parking
Corporation and James H. Bond (Incorporated by
reference to Exhibit 10.11.1 to the Company's
Registration Statement No. 33-95640 on Form S-1.)
(k) Modification of Performance Unit Agreement of
James H. Bond (Incorporated by reference to Exhibit
10.1 (j) to the Company's Annual Report on Form 10-K
filed on December 27, 1997).
(l) James H. Bond Severance Agreement (Incorporated by
reference to Exhibit 10.17 to the Company's
Registration Statement No.33-95640 on Form S-1.)
(m) James J. Hagan Employment Agreement, dated June
12, 2000. (Incorporated by reference to Exhibit 10.1
to the Company's Annual Report on Form 10-K for the
period ended September 30, 2000).
(n) Deferred Stock Unit Plan (Incorporated by reference
to Exhibit 10.1 to the Company's Annual Report on
Form 10-K for the period ended September 30, 1998).
(o) EPS Compensation Program for Senior Executives.
(Incorporated by reference to Exhibit 10.1 (m) of the
Company's Report on Form 10-K for the period ended
September 30, 1999).
10.2 (a) 1995 Nonqualified Stock Option Plan for Directors
(Incorporated by reference to Exhibit 10.3 to the
Company's Registration Statement No. 33-95640 on Form
S-1.)
Page 20 of 23
21
(b) Amendment to the 1995 Nonqualified Stock Option Plan
for Directors increasing the number of shares
reserved for issuance under the plan to 475,000
(Incorporated by reference to Exhibit 10.2 to the
Company's Annual Report on Form 10-K for the period
ended September 30, 2000).
10.3 Form of Option Agreement under Directors plan
(Incorporated by reference to Exhibit 10.4 to the
Company's Registration Statement No. 33-95640 on Form
S-1.)
10.4 Form of Indemnification Agreement for Directors
(Incorporated by reference to Exhibit 10.12 to the
Company's Registration Statement No. 33-95640 on Form
S-1.)
10.5 Indemnification Agreement for Monroe J. Carell, Jr.
(Incorporated by reference to Exhibit 10.13 to the
Company's Registration Statement No. 33-95640 on Form
S-1.)
10.6 Form of Management Contract (Incorporated by
reference to Exhibit 10.14 to the Company's
Registration Statement No. 3-95640 on Form S-1.)
10.7 Form of Lease (Incorporated by reference to Exhibit
10.15 to the Company's Registration Statement No.
33-95640 on Form S-1.)
10.8 1998 Employee Stock Purchase Plan (Incorporated by
reference to Exhibit 10.16 to the Company's
Registration Statement No. 33-95640 on Form S-1.)
10.9 Exchange Agreement between the Company and Monroe J.
Carell, Jr. (Incorporated by reference to Exhibit
10.18 to the Company's Registration Statement No.
33-95640 on Form S-1.)
10.10 $400 Million Credit Agreement dated as of March 19,
1999 by and among various banks with Bank of America,
N.A., as Agent, and Central Parking Corporation and
certain affiliates. (Incorporated by reference to
Exhibit 10.11 of the Company's Report on Form 10-K
for the period ended September 30, 1999.)
10.11 Letter Amendment dated as of June 25, 1999 to Credit
Agreement dated as of March 19, 1999, by and among
various banks with Bank of America, N.A., as Agent,
and Central Parking Corporation and certain
affiliates. (Incorporated by reference to Exhibit
10.11 of the Company's Report on Form 10-K for the
period ended September 30, 1999.)
10.12 Letter Amendment dated as of October 27, 1999 to
Credit Agreement dated as of March 19, 1999, by and
among various banks with Bank of America, N.A., as
Agent, and Central Parking Corporation and certain
affiliates. (Incorporated by reference to Exhibit
10.11 of the Company's Report on Form 10-K for the
period ended September 30, 1999.)
10.13 Form of Amendment dated as of December 28, 1999 to
$400 million Credit Agreement dated as of March 19,
1999, by and among various banks with Bank of
America, N.A., as Agent, and Central Parking
Corporation and certain affiliates. (Incorporated by
reference to Exhibit 10.11 of the Company's Report on
Form 10-K for the period ended September 30, 1999.)
10.14 Amended and Restricted Credit Agreement dated as of
February 14, 2000, by and among various banks, with
Bank of America, N.A., as Agent and Central Parking
Corporation and certain affiliates. (Incorporated by
reference to the Company's Report of Form 10-Q for
the quarter ended March 31, 2000.)
Page 21 of 23
22
10.15 Amended and Restated Credit Agreement dated as of
June 16, 2000, by and among various banks, with Bank
F America, N.A. as Agent and Central Parking
Corporation and certain affiliates (Incorporated by
reference to Exhibit 10.15 to the Company's Annual
Report on Form 10-K for the period ended September
30, 2000).
10.16 Consultancy Agreement dated as of January 21, 1997
between Central Parking System, Inc. and Lowell
Harwood (Incorporated by reference to Exhibit (c)(4)
to the Company's Tender Offer Statement on Schedule
14D-1 filed December 13, 1996).
10.17 Consulting Agreement dated as of February 12, 1998,
by and between Central Parking Corporation and Lewis
Katz. (Incorporated by reference to Exhibit 10.20 of
the Company's Report on Form 10-K for the period
ended September 30, 1999.)
10.18 Limited Partnership Agreement dated as of August 11,
1999, by and between CPS of the Northeast, Inc. and
Arizin Ventures, L.L.C. (Incorporated by reference to
Exhibit 10.21 of the Company's Report on Form 10-K
for the period ended September 30, 1999.)
10.19 Registration Rights Agreement dated as of February
12, 1998, by and among Central Parking Corporation,
Lewis Katz and Saul Schwartz. (Incorporated by
reference to Exhibit 10.22 of the Company's Report on
Form 10-K for the period ended September 30, 1999.)
10.20 Shareholders' Agreement and Agreement Not to Compete
by and among Central Parking Corporation, Monroe J.
Carell, Jr., Lewis Katz and Saul Schwartz dated as of
February 12, 1998. (Incorporated by reference to
Exhibit 10.23 of the Company's Report on Form 10-K
for the period ended September 30, 1999.)
10.21 Lease Agreement dated as of October 6, 1995, by and
between The Carell Family LLC and Central Parking
System of Tennessee, Inc. (Alloway Parking Lot).
(Incorporated by reference to Exhibit 10.24 of the
Company's Report on Form 10-K for the period ended
September 30, 1999.)
10.22 First Amendment to Lease Agreement dated as of July
29, 1997, by and between The Carell Family LLC and
Central Parking System of Tennessee, Inc. (Alloway
Parking Lot). (Incorporated by reference to Exhibit
10.25 of the Company's Report on Form 10-K for the
period ended September 30, 1999.)
10.23 Lease Agreement dated as of October 6, 1995 by and
between The Carell Family LLC and Central Parking
System of Tennessee, Inc. (Second and Church Parking
Lot). (Incorporated by reference to Exhibit 10.26 of
the Company's Report on Form 10-K for the period
ended September 30, 1999.)
10.24 First Amendment to Lease Agreement dated as of
October 6, 1995, by and between The Carell Family LLC
and Central Parking System of Tennessee, Inc. (Second
and Church Parking Lot). (Incorporated by reference
to Exhibit 10.27 of the Company's Report on Form 10-K
for the period ended September 30, 1999.)
10.25 Prospectus and offering document for 2,625,000 shares
of Common Stock dated February 17, 1998.
(Incorporated by reference to the Company's
Registration Statement No. 233-23869 on Form S-3).
10.26 Transaction Support Agreement by Monroe J. Carell,
Jr., the Registrant, Kathryn Carell Brown, Julia
Carell Stadler and Edith Carell Johnson to Allright
Holdings, Inc., Apollo Real Estate Investment Fund
II, L.P. and AEW Partners, L.P. dated
Page 22 of 23
23
September 21, 1998. (Incorporated by reference to Exhibit 2.1 to the Company's Registration Statement
No. 333-66081 filed on October 23, 1998).
10.30 Form of Transaction Support Agreement by certain shareholders of the Registrant to Allright Holdings,
Inc., Apollo Real Estate Investment Fund II, L.P., and AEW Partners, L.P., dated September 21, 1998.
(Incorporated by reference to Exhibit 2.1 to the Company's Registration Statement No. 333-66081 filed
on October 23, 1998).
10.31 Form of Transaction Support Agreement by certain shareholders of Allright Holdings, Inc. to the
Registrant and Central Merger Sub, Inc. dated September 21, 1998. (Incorporated by reference to
Exhibit 2.1 to the Company's Registration Statement No. 333-66081 filed on October 23, 1998).
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
CENTRAL PARKING CORPORATION
Date: February 14, 2001 By: /s/ James J. Hagan
-------------------------------
James J. Hagan
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the dates indicated.
Signature Title Date
------------------------ ---------------------------------- -----------------
Chief Financial Officer (Principal
/s/ James J. Hagan Financial and Accounting Officer) February 14, 2001
------------------------
James J. Hagan
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned party duly authorized.
Page 23 of 23