1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 2001
Commission file number 001-13950
CENTRAL PARKING CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
Tennessee 62-1052916
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(State or Other Jurisdiction of Incorporation (I.R.S. Employer
or Organization) Identification No.)
2401 21st Avenue South,
Suite 200, Nashville, Tennessee 37212
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (615) 297-4255
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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 May 10, 2001
----------------------------------- ---------------------------------
Common Stock, $0.01 par value 35,894,287
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INDEX
CENTRAL PARKING CORPORATION
and SUBSIDIARIES
PART I. FINANCIAL INFORMATION PAGE
----
Item 1. Financial Statements (Unaudited)
Consolidated balance sheets
---March 31, 2001 and September 30, 2000..................... 3
Consolidated statements of earnings
--- three and six months ended March 31, 2001 and 2000....... 4
Consolidated statements of cash flows
--- six months ended March 31, 2001 and 2000................. 5
Notes to consolidated financial statements................... 6-13
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................... 14-19
Item 3. Quantitative and Qualitative Disclosure about Market Risk ... 19
PART 2. OTHER INFORMATION
Item 1. Legal Proceedings ........................................... 20
Item 4. Submission of Matters to a Vote of Security Holders.......... 20
Item 6. Exhibits and Reports on Form 8-K............................. 20-25
SIGNATURES .................................................. 26
3
CENTRAL PARKING CORPORATION
and SUBSIDIARIES
Consolidated Balance Sheets
Unaudited
Amounts in thousands, except share data
March 31, September 30,
2001 2000
---- ----
ASSETS
Current assets:
Cash and cash equivalents $ 42,320 $ 43,214
Management accounts receivable 30,585 32,052
Accounts receivable - other 15,630 14,995
Current portion of notes receivable (including amounts due from related parties
of $689 at March 31, 2001 and $763 at September 30, 2000) 3,734 4,090
Prepaid rent 5,404 8,307
Prepaid expenses 7,210 4,953
Deferred income taxes 612 612
----------- -----------
Total current assets 105,495 108,223
Investments, at amortized cost (fair value $6,024 at March 31, 2001 and $5,775 at
September 30, 2000) 5,927 5,778
Notes receivable, less current portion 43,719 46,153
Property, equipment, and leasehold improvements, net 426,076 432,833
Contract and lease rights, net 92,204 96,607
Goodwill, net 259,126 264,756
Investment in and advances to partnerships and joint ventures 29,630 30,306
Other assets 35,298 37,649
----------- -----------
Total assets $ 997,475 $ 1,022,305
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and capital lease obligations $ 53,495 $ 55,760
Accounts payable 67,248 73,461
Accrued payroll and related costs 12,231 14,287
Accrued expenses 12,176 12,236
Management accounts payable 33,085 33,452
Income taxes payable 2,536 8,279
----------- -----------
Total current liabilities 180,771 197,475
Long-term debt and capital lease obligations, less current portion 239,174 253,535
Deferred rent 20,182 18,794
Deferred compensation 11,914 11,732
Deferred income taxes 23,896 24,801
Minority interest 29,386 31,108
Other liabilities 6,131 4,603
----------- -----------
Total liabilities 511,454 542,048
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,
35,811,042 and 36,330,275 shares issued and outstanding, respectively 358 363
Additional paid - in capital 238,691 248,817
Accumulated other comprehensive loss, net (1,355) (144)
Retained earnings 138,690 121,612
Deferred compensation on restricted stock (363) (391)
----------- -----------
Total shareholders' equity 376,021 370,257
----------- -----------
Total liabilities and shareholders' equity $ 997,475 $ 1,022,305
=========== ===========
See accompanying notes to consolidated financial statements
Page 3 of 26
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CENTRAL PARKING CORPORATION
and SUBSIDIARIES
Consolidated Statements of Earnings
Unaudited
Amounts in thousands, except per share data
Three Months Ended March 31, Six Months Ended March 31,
2001 2000 2001 2000
---- ---- ---- ----
Revenues:
Parking $ 148,848 $ 157,716 $ 300,525 $ 317,212
Management contract 25,186 24,935 51,074 50,772
--------- --------- --------- ---------
Total revenues 174,034 182,651 351,599 367,984
--------- --------- --------- ---------
Costs and expenses:
Cost of parking 126,730 133,592 250,695 266,699
Cost of management contracts 9,777 8,201 19,999 16,641
General and administrative 16,034 19,655 33,687 39,582
Goodwill and non-compete amortization 3,001 2,989 6,002 6,051
Merger costs -- 1,362 -- 3,747
--------- --------- --------- ---------
Total costs and expenses 155,542 165,799 310,383 332,720
--------- --------- --------- ---------
Property-related gains (losses), net (2,296) 1,331 481 3,089
--------- --------- --------- ---------
Operating earnings 16,196 18,183 41,697 38,353
Other income (expenses):
Interest income 1,425 1,538 2,979 3,404
Interest expense (5,589) (6,640) (11,791) (13,168)
Dividends on Company-obligated mandatorily redeemable
convertible securities of a subsidiary trust (1,471) (1,500) (2,943) (3,010)
Minority interest (862) (1,046) (1,464) (1,860)
Equity in partnership and joint venture earnings 1,528 1,179 2,642 2,665
--------- --------- --------- ---------
Earnings before income taxes, extraordinary
item and cumulative effect of accounting
change 11,227 11,714 31,120 26,384
Income tax expense 4,492 4,334 12,704 10,558
--------- --------- --------- ---------
Earnings before extraordinary item and
cumulative effect of accounting change 6,735 7,380 18,416 15,826
Extraordinary item, net of tax -- -- -- (195)
Cumulative effect of accounting change -- -- (258) --
--------- --------- --------- ---------
Net earnings $ 6,735 $ 7,380 $ 18,158 $ 15,631
========= ========= ========= =========
Basic earnings per share:
Earnings before extraordinary item and
cumulative effect of accounting change $ 0.19 $ 0.20 $ 0.51 $ 0.43
Extraordinary item, net of tax $ -- $ -- $ -- $ --
Cumulative effect of accounting change, net of tax $ -- $ -- $ -- $ --
Net earnings $ 0.19 $ 0.20 $ 0.51 $ 0.43
Diluted earnings per share:
Earnings before extraordinary item and
cumulative effect of accounting change $ 0.19 $ 0.20 $ 0.51 $ 0.43
Extraordinary item, net of tax $ -- $ -- -- $ (0.01)
Cumulative effect of accounting change, net of tax $ -- $ -- $ (0.01) $ --
Net earnings $ 0.19 $ 0.20 $ 0.50 $ 0.42
See accompanying notes to consolidated financial statements.
Page 4 of 26
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CENTRAL PARKING CORPORATION
and SUBSIDIARIES
Consolidated Statements of Cash Flows
Unaudited
Amounts in thousands
Six Months Ended March 31,
2001 2000
---- ----
Cash flows from operating activities:
Net earnings $ 18,158 $ 15,631
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization of property 10,557 13,100
Amortization of goodwill and non-compete 6,002 6,051
Amortization of contract and lease rights, straight-line rent, deferred
financing fees and other 6,208 6,772
Equity in partnership and joint venture earnings (2,642) (2,665)
Distributions from partnerships and joint ventures 2,295 1,885
Property-related gains, net (481) (3,089)
Deferred income tax expense 19 973
Minority interest 1,464 1,860
Changes in operating assets and liabilities:
Management accounts receivable 1,467 (2,918)
Accounts receivable - other (741) 4,204
Prepaid rent 2,903 1,699
Prepaid expenses (2,257) 203
Other assets (306) (1,118)
Accounts payable, accrued expenses and deferred compensation (12,059) (12,038)
Management accounts payable (367) 2,289
Income taxes payable (5,572) 7,225
-------- --------
Net cash provided by operating activities 24,648 40,064
-------- --------
Cash flows from investing activities:
Proceeds from disposition of property and equipment 17,011 14,164
Repayments of notes receivable, net 2,790 592
Purchase of property, equipment, and leasehold improvements (15,637) (41,982)
Purchase of contract and lease rights (530) (980)
Repayments of advances to partnerships and joint ventures, net 1,023 692
Proceeds from maturities and calls of investments 256 80
Purchase of investments (405) (228)
-------- --------
Net cash provided (used) by investing activities 4,508 (27,662)
-------- --------
Cash flows from financing activities:
Dividends paid (1,085) (1,098)
Net borrowings (repayments) under revolving credit agreement, net of issuance costs 12,550 (21,831)
Proceeds from issuance of notes payable, net of issuance costs -- 13,300
Payment to minority interest partners (3,114) (3,337)
Principal repayments on notes payable and capital lease obligations (29,176) (2,164)
Repurchase of common stock (9,960) (10,310)
Proceeds from issuance of common stock and exercise of stock options, net 560 3,429
-------- --------
Net cash used by financing activities (30,225) (22,011)
-------- --------
Foreign currency translation 175 145
-------- --------
Net decrease in cash and cash equivalents (894) (9,464)
Cash and cash equivalents at beginning of period 43,214 53,669
-------- --------
Cash and cash equivalents at end of period $ 42,320 $ 44,205
======== ========
Supplemental cash flow information:
Cash paid for interest $ 9,818 $ 12,887
Cash paid for income taxes $ 17,785 $ 2,649
See accompanying notes to consolidated financial statements.
Page 5 of 26
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CENTRAL PARKING CORPORATION
and SUBSIDIARIES
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 and six months ended March 31, 2001 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 paid $1.6 million in cash to purchase the
remaining 50% interest in Arizona Stadium LLC, a limited liability company that
manages the parking activities for a garage adjacent to a baseball stadium in
Phoenix. 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 six months ended March 31, 2000.
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 Company incurred $1.4 million of merger related expenses on a pretax
basis during the three months ended March 31, 2000 that were reported as
operating expenses. Included in these costs were approximately $0.7 million of
legal, accounting, and consulting fees, and $0.7 million in travel, supplies,
printing and other out of pocket expenses. The Company incurred $3.7 million of
merger related expenses on a pretax basis during the six months ended March 31,
2000 that were reported as operating expenses. These costs included $1.3 million
of legal, accounting, and consulting fees; $1.1 million related to employment
agreements and severance; and $1.3 million in travel, supplies, printing and
other out of pocket expenses. Those costs which were directly attributable to
the merger and were incremental to the combined companies were recognized when
incurred. No such costs have been incurred in fiscal 2001.
Page 6 of 26
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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 March 31,
----------------------------
2001 2000
---- ----
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 and
cumulative effect of accounting change $ 6,735 35,702 $0.19 $ 7,380 36,480 $0.20
Effect of dilutive stock and options:
Stock option plan and warrants -- 114 -- -- 246 --
Restricted stock plan -- 149 -- -- 181 --
Deferred stock unit plan -- -- -- -- 72 --
Employee stock purchase plan -- -- -- -- 48 --
------- ------- ----- ------- ------- -----
Diluted earnings per share:
Earnings before extraordinary item and
cumulative effect of accounting change $ 6,735 35,965 $0.19 $ 7,380 37,027 $0.20
======= ======= ===== ======= ======= =====
Six Months Ended March 31,
--------------------------
2001 2000
---- ----
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 and
cumulative effect of accounting change $18,416 35,857 $0.51 $15,826 36,498 $0.43
Effect of dilutive stock and options:
Stock option plan and warrants -- 114 -- -- 277 --
Restricted stock plan -- 148 -- -- 181 --
Deferred stock unit plan -- -- -- -- 72 --
Employee stock purchase plan -- -- -- -- 42 --
------- ------- ----- ------- ------- -----
Diluted earnings per share:
Earnings before extraordinary item and
cumulative effect of accounting change $18,416 36,119 $0.51 $15,826 37,070 $0.43
======= ======= ===== ======= ======= =====
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.
Page 7 of 26
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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 March 31, 2001
and 2000, such securities were convertible into 2,000,000 shares of common
stock. For the three and six months ended March 31, 2001, options to purchase
1,762,869 and 1,851,571 shares are excluded from the diluted common shares since
they are anti-dilutive.
PROPERTY-RELATED GAINS (LOSSES), 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 and six months ended March 31, 2001 and 2000 is as follows (in
thousands):
Three months ended Six months ended
March 31, March 31,
2001 2000 2001 2000
------- ------- ------- -------
Net gains on sale of property $ 4 $ 1,331 $ 5,519 $ 3,584
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 (2,300) -- (3,831) --
------- ------- ------- -------
Total property-related gains (losses), net $(2,296) $ 1,331 $ 481 $ 3,089
======= ======= ======= =======
Included in net gains on sale of property for the three and six months ended
March 31, 2001 is a $250 thousand loss for environmental liability costs
relating to a property previously owned by the Company. The Company recorded
impairment charges totaling $1.2 million during the six months ended March 31,
2001, of which $0.7 million was attributable to properties where the operating
lease agreement was amended such that the carrying value of the leasehold
improvements was no longer supportable 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 impairment charges of $0.5 million during the six
months ended March 31, 2000. Lease termination costs for the three and six
months ended March 31, 2001 represent charges incurred to terminate existing
lease agreements related to unfavorable locations.
LONG-TERM DEBT
On March 19, 1999, the Company established a 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 Credit Facility bears interest at LIBOR plus a grid
based margin dependent upon Central Parking achieving certain financial ratios.
The amount outstanding under the Company's Credit Facility as of March 31, 2001
was $253.0 million with a weighted average interest rate of 6.2%, including the
principal amount of the term loan of $150 million which is being repaid in
quarterly payments of $12.5 million through March 2004. 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. The aggregate availability under the Credit Facility was $71.7
million at March 31, 2001.
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
Page 8 of 26
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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.
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.
NEW 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 recognizes 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.
At March 31, 2001, the Company's derivative financial instruments consist of
interest rate caps with a combined notional amount of $75 million and interest
rate swaps with a combined notional amount of $38 million that effectively
convert an equal portion of its debt from a floating rate to a fixed rate. The
Company's purpose for holding such instruments is to hedge its exposure to cash
flow fluctuations due to changes in market interest rates.
On October 1, 2000, the Company prospectively adopted the provisions of SFAS
No. 133 and SFAS No. 138, which resulted in the recording of a net transition
loss of $380 thousand, net of related income taxes of $253 thousand, in
accumulated other comprehensive loss. 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 March 31, 2001, the Company adjusted the value of its derivative
financial instruments to their fair values. These instruments comprised
derivative instrument assets of $93 thousand and derivative instrument
liabilities of $1.9 million, which are included as other assets and other
liabilities, respectively, on the face of the balance sheet. This adjustment
resulted in the recognition of unrealized losses of $539 thousand and $1.1
million, net of related
Page 9 of 26
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income taxes of $360 and $703 thousand in accumulated other comprehensive loss,
respectively. Additionally, the Company decreased derivative instrument assets
by $101 and $237 thousand and increased derivative instrument liabilities by
$798 thousand and $1.5 million for the three and six months ended March 31,
2001, respectively.
Derivative gains and losses included in accumulated other comprehensive loss
are reclassified into earnings to reflect the decrease in the time value of the
underlying derivative instruments. This reclassification is derived from the
amounts initially paid for the derivative instruments and is expected to occur
ratably over their terms. For the three and six months ended March 31, 2001, $27
and $48 thousand of accumulated other comprehensive loss, net of related income
tax benefit of $18 and $32 thousand, respectively, were reclassified to interest
expense.
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 adopted SAB 101 during the quarter ended March 31, 2001 as a
change in accounting principle retroactive to October 1, 2000. Adoption of SAB
101 required the Company to change the timing of recognition of
performance-based revenues on certain management contracts. The cumulative
effect of this accounting change was a loss of $429 thousand ($258 thousand, net
of tax) as of October 1, 2000. Adoption of SAB 101 resulted in a decrease in
management contract revenues of $237 thousand for the three months ended March
31, 2001 and an increase in management contract revenues of $56 thousand for the
six months ended March 31, 2001. The Company has restated its results for the
first quarter of fiscal 2001 to reflect the effects of this change.
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 $6.4 million and $16.9 million for the
three and six months ended March 31, 2001, respectively. Comprehensive income
was $7.4 million and $15.8 million for the three and six months ended March 31,
2000, 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 and
six months ended March 31, 2001 and 2000, respectively. 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 10 of 26
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Three Months Ended March 31, 2001
---------------------------------
ONE TWO THREE FOUR FIVE SIX SEVEN INT'L
--- --- ----- ---- ---- --- ----- -----
Revenues:
Parking $ 9,952 $ 65,623 $ 8,369 $ 18,699 $ 9,347 $ 13,765 $ 13,148 $ 6,658
Management contract 2,719 6,245 2,290 3,719 2,680 1,807 1,838 1,662
-------- -------- -------- -------- -------- -------- -------- --------
Total revenues 12,671 71,868 10,659 22,418 12,027 15,572 14,986 8,320
Costs and expenses:
Cost of parking 9,640 57,466 7,515 16,808 7,708 12,510 12,517 5,627
Cost of management contracts 1,512 2,341 1,087 1,651 1,121 943 709 11
General and administrative 1,233 5,463 701 1,267 1,010 1,454 838 1,028
Goodwill and non-compet
amortization 56 2,072 112 123 96 259 3 --
-------- -------- -------- -------- -------- -------- -------- --------
Total costs and expenses 12,441 67,342 9,415 19,849 9,935 15,166 14,067 6,666
Property-related gains (losses), net 4 (2,305) 1 14 180 -- -- 1
-------- -------- -------- -------- -------- -------- -------- --------
Operating earnings 234 2,221 1,245 2,583 2,272 406 919 1,655
Other income (expense):
Interest income (39) (4,604) (72) (1) (13) (569) 26 86
Interest expense (11) (279) (34) (111) (54) (41) (28) (52)
Dividends - convertible securities -- -- -- -- -- -- -- --
Minority interest -- (191) (3) -- -- -- -- --
Equity in partnership and
joint venture earnings -- -- -- -- -- (1) -- 497
-------- -------- -------- -------- -------- -------- -------- --------
Earnings (loss) before
income tax $ 184 $ (2,853) $ 1,136 $ 2,471 $ 2,205 $ (205) $ 917 $ 2,186
======== ======== ======== ======== ======== ======== ======== ========
Income tax expense
Net earnings
Identifiable assets $ 24,854 $377,882 $ 31,545 $ 52,987 $ 32,960 $ 42,692 $ 32,423 $ 29,256
======== ======== ======== ======== ======== ======== ======== ========
Three Months Ended March 31, 2001
---------------------------------
ALL OTHERS
& GEN'L CORP TOTAL
------------ -----
Revenues:
Parking $ 3,287 $148,848
Management contract 2,226 25,186
-------- --------
Total revenues 5,513 174,034
Costs and expenses:
Cost of parking (3,061) 126,730
Cost of management contracts 402 9,777
General and administrative 3,040 16,034
Goodwill and non-compet
amortization 280 3,001
-------- --------
Total costs and expenses 661 155,542
Property-related gains (losses), net (191) (2,296)
-------- --------
Operating earnings 4,661 16,196
Other income (expense):
Interest income 6,611 1,425
Interest expense (4,979) (5,589)
Dividends - convertible securities (1,471) (1,471)
Minority interest (668) (862)
Equity in partnership and
joint venture earnings 1,032 1,528
-------- --------
Earnings (loss) before
income tax $ 5,186 11,227
========
Income tax expense 4,492
--------
Net earnings $ 6,735
========
Identifiable assets $372,876 $997,475
======== ========
Three Months Ended March 31, 2000
---------------------------------
ONE TWO THREE FOUR FIVE SIX SEVEN INT'L
--- --- ----- ---- ---- --- ----- -----
Revenues:
Parking $ 11,126 $ 67,998 $ 9,999 $ 21,597 $ 9,292 $ 14,085 $ 14,270 $ 6,376
Management contract 2,847 6,137 1,966 3,735 3,035 2,087 1,860 1,408
-------- -------- -------- -------- -------- -------- -------- --------
Total revenues 13,973 74,135 11,965 25,332 12,327 16,172 16,130 7,784
Costs and expenses:
Cost of parking 10,470 58,423 8,999 19,502 7,908 12,784 13,487 5,477
Cost of management contracts 981 2,011 632 1,409 1,000 796 612 (97)
General and administrative 1,273 5,077 759 1,203 1,487 1,164 1,090 1,172
Goodwill and non-compet
amortization 40 2,074 112 123 96 259 3 --
Merger costs -- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- --------
Total costs and expenses 12,764 67,585 10,502 22,237 10,491 15,003 15,192 6,552
Property-related gains (losses), net 132 992 (3) 66 2 -- (4) 12
-------- -------- -------- -------- -------- -------- -------- --------
Operating earnings 1,341 7,542 1,460 3,161 1,838 1,169 934 1,244
Other income (expense):
Interest income (25) (4,602) (81) -- (23) (570) 25 75
Interest expense (21) (402) (40) (44) (68) (46) -- (17)
Dividends - convertible securities -- -- -- -- -- -- -- --
Minority interest -- (330) (8) -- -- -- -- --
Equity in partnership and
joint venture earnings -- -- -- -- -- -- -- 54
-------- -------- -------- -------- -------- -------- -------- --------
Earnings (loss) before
income tax $ 1,295 $ 2,208 $ 1,331 $ 3,117 $ 1,747 $ 553 $ 959 $ 1,356
======== ======== ======== ======== ======== ======== ======== ========
Income tax expense
Net earnings
Identifiable assets $ 36,527 $394,592 $ 48,209 $ 60,571 $ 38,910 $ 59,727 $ 29,014 $ 24,999
======== ======== ======== ======== ======== ======== ======== ========
Three Months Ended March 31, 2000
---------------------------------
ALL OTHERS
& GEN'L CORP TOTAL
------------ -----
Revenues:
Parking $ 2,973 $ 157,716
Management contract 1,860 24,935
-------- ----------
Total revenues 4,833 182,651
Costs and expenses:
Cost of parking (3,458) 133,592
Cost of management contracts 857 8,201
General and administrative 6,430 19,655
Goodwill and non-compet
amortization 282 2,989
Merger costs 1,362 1,362
-------- ----------
Total costs and expenses 5,473 165,799
Property-related gains (losses), net 134 1,331
-------- ----------
Operating earnings (506) 18,183
Other income (expense):
Interest income 6,739 1,538
Interest expense (6,002) (6,640)
Dividends - convertible securities (1,500) (1,500)
Minority interest (708) (1,046)
Equity in partnership and
joint venture earnings 1,125 1,179
-------- ----------
Earnings (loss) before
income tax $ (852) 11,714
========
Income tax expense 4,334
----------
Net earnings $ 7,380
==========
Identifiable assets $364,425 $1,056,974
======== ==========
Page 11 of 26
12
Six Months Ended March 31, 2001
-------------------------------
ONE TWO THREE FOUR FIVE SIX SEVEN INT'L
--- --- ----- ---- ---- --- ----- -----
Revenues:
Parking $ 21,171 $133,871 $ 16,416 $ 35,975 $ 18,352 $ 28,112 $ 26,745 $ 13,123
Management contract 5,172 12,456 4,749 7,376 5,489 3,870 3,693 3,093
-------- -------- -------- -------- -------- -------- -------- --------
Total revenues 26,343 146,327 21,165 43,351 23,841 31,982 30,438 16,216
Costs and expenses:
Cost of parking 19,149 113,105 15,103 32,785 15,428 24,742 24,840 11,208
Cost of management contracts 2,553 4,738 2,041 3,169 2,269 1,785 1,383 42
General and administrative 2,520 11,040 1,494 2,457 2,066 2,783 1,956 2,198
Goodwill and non-compete
amortization 112 4,144 225 247 192 518 6 --
-------- -------- -------- -------- -------- -------- -------- --------
Total costs and expenses 24,334 133,027 18,863 38,658 19,955 29,828 28,185 13,448
Property-related gains (losses), net 3 (4,600) (7) 709 188 -- (2) --
-------- -------- -------- -------- -------- -------- -------- --------
Operating earnings 2,012 8,700 2,295 5,402 4,074 2,154 2,251 2,768
Other income (expense):
Interest income (78) (9,197) (145) (2) (26) (1,138) 47 184
Interest expense (76) (588) (77) (136) (116) (84) (29) (105)
Dividends - convertible securities -- -- -- -- -- -- -- --
Minority interest -- (74) (6) -- -- -- -- --
Equity in partnership and
joint venture earnings -- -- -- -- -- (1) -- 818
-------- -------- -------- -------- -------- -------- -------- --------
Earnings (loss) before income
tax and cumulative effect of
accounting change $ 1,858 $ (1,159) $ 2,067 $ 5,264 $ 3,932 $ 931 $ 2,269 $ 3,665
======== ======== ======== ======== ======== ======== ======== ========
Income tax expense
Earnings before cumulative
effect of accounting change
Cumulative effect of accounting
change, net of tax
Net earnings
Identifiable assets $ 24,854 $459,745 $ 31,545 $ 52,987 $ 32,960 $ 42,692 $ 32,423 $ 29,256
======== ======== ======== ======== ======== ======== ======== ========
Six Months Ended March 31, 2001
-------------------------------
ALL OTHERS
& GEN'L CORP TOTAL
------------ -----
Revenues:
Parking $ 6,760 $300,525
Management contract 5,176 51,074
-------- --------
Total revenues 11,936 351,599
Costs and expenses:
Cost of parking (5,665) 250,695
Cost of management contracts 2,019 19,999
General and administrative 7,173 33,687
Goodwill and non-compete
amortization 558 6,002
-------- --------
Total costs and expenses 4,085 310,383
Property-related gains (losses), net 4,190 481
-------- --------
Operating earnings 12,041 41,697
Other income (expense):
Interest income 13,334 2,979
Interest expense (10,580) (11,791)
Dividends - convertible securities (2,943) (2,943)
Minority interest (1,384) (1,464)
Equity in partnership and
joint venture earnings 1,825 2,642
-------- --------
Earnings (loss) before income
tax and cumulative effect of
accounting change $ 12,293 31,120
========
Income tax expense 12,704
--------
Earnings before cumulative
effect of accounting change 18,416
Cumulative effect of accounting
change, net of tax (258)
--------
Net earnings $ 18,158
========
Identifiable assets $291,013 $997,475
======== ========
Six Months Ended March 31, 2000
-------------------------------
ONE TWO THREE FOUR FIVE SIX SEVEN INT'L
--- --- ----- ---- ---- --- ----- -----
Revenues:
Parking $ 22,949 $137,992 $ 19,519 $ 43,167 $ 19,214 $ 27,372 $ 28,180 $ 13,132
Management contract 5,760 12,499 4,470 7,475 6,024 4,102 3,865 2,748
-------- -------- -------- -------- -------- -------- -------- --------
Total revenues 28,709 150,491 23,989 50,642 25,238 31,474 32,045 15,880
Costs and expenses:
Cost of parking 20,978 115,258 18,272 38,810 16,381 25,335 25,811 11,478
Cost of management contracts 1,879 3,892 1,597 2,963 2,184 1,577 1,276 (303)
General and administrative 2,711 10,304 1,378 2,680 2,815 2,347 2,039 2,268
Goodwill and non-compete
amortization 87 4,345 225 247 198 524 6 --
Merger costs -- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- --------
Total costs and expenses 25,655 133,799 21,472 44,700 21,578 29,783 29,132 13,443
Property-related gains (losses), net 152 23 (3) 71 2 -- (38) 14
-------- -------- -------- -------- -------- -------- -------- --------
Operating earnings 3,206 16,715 2,514 6,013 3,662 1,691 2,875 2,451
Other income (expense):
Interest income (68) (9,207) (167) -- (47) (1,141) 49 121
Interest expense (39) (800) (76) (47) (117) (93) (1) (85)
Dividends - convertible securities -- -- -- -- -- -- -- --
Minority interest -- (330) (8) -- -- -- -- --
Equity in partnership and
joint venture earnings -- -- -- -- -- -- -- 150
-------- -------- -------- -------- -------- -------- -------- --------
Earnings (loss) before income
tax and extraordinary item $ 3,099 $ 6,378 $ 2,263 $ 5,966 $ 3,498 $ 457 $ 2,923 $ 2,637
======== ======== ======== ======== ======== ======== ======== ========
Income tax expense
Earnings before
extraordinary item
Extraordinary item, net of tax
Net earnings
Identifiable assets $ 36,527 $394,592 $ 48,209 $ 80,388 $ 38,910 $ 37,070 $ 31,854 $ 24,999
======== ======== ======== ======== ======== ======== ======== ========
Six Months Ended March 31, 2000
-------------------------------
ALL OTHERS
& GEN'L CORP TOTAL
------------ -----
Revenues:
Parking $ 5,687 $ 317,212
Management contract 3,829 50,772
-------- ----------
Total revenues 9,516 367,984
Costs and expenses:
Cost of parking (5,624) 266,699
Cost of management contracts 1,576 16,641
General and administrative 13,040 39,582
Goodwill and non-compete
amortization 419 6,051
Merger costs 3,747 3,747
-------- ----------
Total costs and expenses 13,158 332,720
Property-related gains (losses), net 2,868 3,089
-------- ----------
Operating earnings (774) 38,353
Other income (expense):
Interest income 13,864 3,404
Interest expense (11,910) (13,168)
Dividends - convertible securities (3,010) (3,010)
Minority interest (1,522) (1,860)
Equity in partnership and
joint venture earnings 2,515 2,665
-------- ----------
Earnings (loss) before income
tax and extraordinary item $ (837) 26,384
========
Income tax expense 10,558
----------
Earnings before
extraordinary item 15,826
Extraordinary item, net of tax (195)
----------
Net earnings $ 15,631
==========
Identifiable assets $364,425 $1,056,974
======== ==========
Page 12 of 26
13
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 midwestern and southern region of the
United States, including parts of Kentucky, Tennessee, Louisiana, and Southern
Texas.
Segment Five encompasses the inter-mountain region of the United States,
including Northern Texas and parts of the Mid-west.
Segment Six encompasses the southern region of the United, as well as
Washington, D.C. and 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 13 of 26
14
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 $18.7 million and $19.2 million for the three months
ended March 31, 2001 and 2000, respectively, representing 12.5% and 12.2% of
total parking revenues for the respective periods. For the six months ended
March 31, 2001 and 2000, parking revenues from owned properties were $36.5 and
$37.5 million, respectively, representing 12.1% and 11.8% 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.
Page 14 of 26
15
Central Parking assumes complete responsibility for all aspects of the property,
including all structural, mechanical, or electrical maintenance or repairs and
property taxes.
Parking revenues from leased facilities amounted to $130.2 million and
$138.5 million for the three months ended March 31, 2001 and 2000 respectively,
and $264.0 million and $279.7 million for the six months ended March 31, 2001
and 2000, respectively. Parking revenues from leased facilities accounted for
87.5% and 87.8% of total parking revenues in the three months ended March 31,
2001 and 2000, respectively, and 87.9% and 88.2% of total parking revenues for
the six months ended March 31, 2001 and 2000, respectively. 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 $25.2 million and $24.9 million
for the three months ended March 31, 2001 and 2000, respectively and $51.1
million and $50.8 million for the six months ended March 31, 2001 and 2000,
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 March 31, 2001, Central Parking operated 1,894 parking facilities
through management contracts, leased 2,003 parking facilities, and owned 223
parking facilities, either independently or in joint ventures with third
parties.
THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THREE MONTHS ENDED MARCH 31, 2000
Parking revenues for the second quarter of fiscal 2001 decreased to $148.8
million from $157.7 million in the second quarter of fiscal 2000, a decrease of
$8.9 million, or 5.6%. The decrease is primarily a result of two factors. First,
adverse weather conditions in the Midwest and Northeast during the second
quarter negatively impacted parking revenues by approximately $2.0 million.
Second, the Company experienced a net decline of 396 leased and owned locations
since March 31, 2000 (246 locations added, offset by 642 locations lost). The
decline in locations is due to a variety of factors including the sale or
closure of underperforming locations and the loss of locations in the ordinary
course of business. Revenues from foreign operations amounted to approximately
$8.3 million and $7.8 million for the quarters ended March 31, 2001 and 2000,
respectively.
Management contract revenues for the second quarter of fiscal 2001
increased to $25.2 million from $24.9 million in the same period of fiscal 2000,
an increase of $0.3 million or 1.0%. The slight increase resulted from an
increase in contract rates, offset by a decline in the number of management
contract locations, as compared against March 31, 2000.
Cost of parking in the second quarter of 2001 decreased to $126.7 million
from $133.6 million in the second quarter of 2000, a decrease of $6.9 million or
5.1%. This decrease was due primarily to a reduction in rent and property taxes
of $6.6 million compared to the prior year period. The reduction in rent and
property taxes is a
Page 15 of 26
16
result of fewer locations as well as an increased focus on expense control
throughout the Company. Rent expense as a percentage of parking revenues
declined to 48.1% for the three months ended March 31, 2001 from 48.9% in the
comparable prior year period. Cost of parking as a percentage of parking
revenues increased to 85.1% in the second quarter of fiscal 2001 from 84.7% in
the second quarter of fiscal 2000.
Cost of management contracts in the second quarter of fiscal 2001 increased
to $9.8 million from $8.2 million in the comparable period in 2000, an increase
of $1.6 million or 19.2%. The increase in cost reflects higher medical claims by
employees. Cost of management contracts as a percentage of management contract
revenue increased to 38.8% for the second quarter of 2001 from 32.9% for the
same period in 2000, due to the increase in the aforementioned items.
General and administrative expenses decreased to $16.0 million for the
second quarter of fiscal 2001 from $19.7 million in the second quarter of fiscal
2000, a decrease of $3.7 million or 18.4%. This decrease is due to $1.4 million
of additional depreciation in the prior year resulting from the adoption of a
shorter life on certain Allright related computer assets and $2.1 million of
other net personnel related expenses. General and administrative expenses as a
percentage of total revenues decreased to 9.2% for the second quarter of fiscal
2001 compared to 10.8% for the second quarter of fiscal 2000.
Goodwill and non-compete amortization remained constant at $3.0 million for
the second quarter of fiscal 2001 and the second quarter of fiscal 2000.
The Company incurred $1.4 million of merger related expenses on a pretax
basis during the quarter ended March 31, 2000 that were reported as operating
expenses. Included in these costs are approximately $0.7 million in legal,
accounting, and consulting fees. The balance of $0.7 million comprised travel,
supplies, printing and other out of pocket expenses. No such costs were incurred
in the current quarter.
Net property-related losses for the three months ended March 31, 2001 were
$2.3 million, including a $2.3 million charge for early termination of an
unfavorable lease and a $0.3 million charge for environmental clean-up costs
related to a property previously owned by the Company. Net property-related
gains for the three months ended March 31, 2000 were $1.3 million and comprised
routine gains on disposals of property and equipment.
Interest income decreased to $1.4 million for the second quarter of fiscal
2001 from $1.5 million in the second quarter of fiscal 2000, a decrease of $0.1
million, or 7.3%. 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 $7.1 million for the
second quarter of fiscal 2001 from $8.1 million in the second quarter of fiscal
2000, a decrease of $1.0 million or 13.3%. 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 $403.3 million during the quarter
ended March 31, 2001, at a weighted average interest rate of 6.6% compared to
$460.7 million during the quarter ended March 31, 2000 at an average interest
rate of 6.9%.
Income taxes increased to $4.5 million for the second quarter of fiscal
2001 from $4.3 million in the second quarter of fiscal 2000, an increase of $0.2
million or 3.6%. The effective tax rate for the second quarter of fiscal 2001
was 40.0% compared to 37.0% for the second quarter of fiscal 2000. The increase
in the effective tax rate is attributable to the utilization of net operating
loss carryforwards from Allright during the prior year.
SIX MONTHS ENDED MARCH 31, 2001 COMPARED TO SIX MONTHS ENDED MARCH 31, 2000
Parking revenues for the first half of fiscal 2001 decreased to $300.5
million from $317.2 million in the first half of fiscal 2000, a decrease of
$16.7 million, or 5.3%. The decrease primarily results from a decline in the
number of leased locations, including certain facilities that are now operated
as management locations. Revenues from foreign operations amounted to
approximately $16.2 million and $15.9 million for the six-month periods ended
March 31, 2001 and 2000, respectively.
Page 16 of 26
17
Management contract revenues for the first half of fiscal 2001 increased to
$51.1 million from $50.8 million in the same period of fiscal 2000, an increase
of $0.3 million or 0.6%. The increase resulted primarily from increased
management fees on existing locations. This increase is also partially
attributable to certain locations that were previously operated as leases and
are now operated as management contracts as described above.
Cost of parking in the first half of 2001 decreased to $250.7 million from
$266.7 million in the first half of 2000, a decrease of $16.0 million or 6.0%.
This decrease was due primarily to decreases in rent and payroll expense
resulting from fewer locations. Rent expense decreased $12.5 million to $143.0
million in the first half of 2001 compared to $155.5 million in the first half
of 2000. Rent as a percentage of parking revenues decreased to 47.6% in the
first six months of 2001 from 49.0% in the same period of 2000. Payroll
decreased $5.4 million in the six-month period ended March 31, 2001 over the
same period in 2000. Cost of parking as a percentage of parking revenues
decreased to 83.4% in the first half of fiscal 2001 from 84.1% in the first half
of fiscal 2000.
Cost of management contracts in fiscal first half 2001 increased to $20.0
million from $16.6 million in the comparable period in 2000, an increase of $3.4
million or 20.2%. The increase in cost reflects higher medical and workers
compensation claims by employees, both in total and as a percentage of
management contract revenue. Cost of management contracts as a percentage of
management contract revenue increased to 39.2% for the first half of fiscal 2001
from 32.8% for the same period in 2000, primarily due to the costs of medical
claims by employees.
General and administrative expenses, excluding amortization of goodwill and
non-compete agreements, decreased to $33.7 million for the first six months of
fiscal 2001 from $39.6 million in the first half of 2000, a decrease of $5.9
million or 14.9%. This decrease is due primarily to $3.8 million of additional
depreciation in the prior year resulting from the adoption of a shorter life on
certain Allright related computer assets and $1.4 million of other net personnel
related expenses. General and administrative expenses, as a percentage of total
revenues decreased to 9.6% for the first half of fiscal 2001 compared to 10.8%
for the first half of fiscal 2000.
Goodwill and non-compete amortization for the six-month period ended March
31, 2001 decreased to $6.0 million from $6.1 million in the same period in 2000,
a decrease of $0.1 million or 0.8%.
The Company incurred $3.7 million of merger related expenses on a pretax
basis during the six months ended March 31, 2000 that were reported as operating
expenses. Included in these costs are approximately $1.3 million of legal,
accounting, and consulting fees; $1.1 million related to employment agreements
and severance; and the balance of $1.3 million in travel, supplies, printing and
other out of pocket expenses. The costs which were directly attributable to the
merger and are incremental to the combined companies were recognized when
incurred. No such expenses have been incurred in the current fiscal year.
Net property-related gains for the six months ended March 31, 2001 amounted
to $0.5 million compared to $3.1 million for the comparable period in fiscal
2000. These gains included gains on sale of property of $5.5 million, offset by
impairment charges for leasehold improvements and intangible assets totaling
$1.2 million and lease termination charges of $3.8 million during the six months
ended March 31, 2001. For the same period in fiscal 2000, gains on sale of
property of $3.6 million were offset by impairment charges for contract rights
of $0.5 million.
Interest income decreased to $3.0 million for the first half of fiscal 2001
from $3.4 million in the first half of fiscal 2000, a decrease of $0.4 million,
or 12.5%. 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 $14.7 million for the
first half of fiscal 2001 from $16.2 million in the first half of fiscal 2000, a
decrease of $1.5 million or 8.9%. This decrease in interest expense was
primarily attributable to lower overall outstanding debt balances during the
period. The weighted average balance outstanding under such credit facilities
and convertible securities was $403.5 million during the six-month period ended
March 31, 2001, at a weighted average interest rate of 6.8% compared to $467.4
million during the same period ended March 31, 2000 at an average interest rate
of 6.6%.
Income taxes excluding the extraordinary item and cumulative effect of
accounting change, increased to $12.7 million for the first half of fiscal 2001
from $10.6 million in the first six months of 2000, an increase of $2.1 million
Page 17 of 26
18
or 20.3%. The effective tax rate for the first half of fiscal 2001 was 40.8%
compared to 40.0% for the first half of fiscal 2000.
LIQUIDITY AND CAPITAL RESOURCES
Operating activities for the six months ended March 31, 2001 provided net
cash of $24.6 million, compared to $40.1 million of cash provided by operating
activities for the six months ended March 31, 2000. Net earnings of $18.2
million and depreciation and amortization of $22.8 million, offset by decreases
in accounts payable and accrued expenses of $12.1 million and income taxes
payable of $5.6 million, account for the majority of the cash provided by
operating activities during the first six months of fiscal 2001.
Investing activities for the six months ended March 31, 2001 provided net
cash of $4.5 million, compared to $27.7 million of net cash used for investing
activities for the same period in 2000. Proceeds of $17.0 million from the
disposition of property and equipment and net collections on notes receivable of
$2.8 million, offset by the purchase of property, equipment, leasehold
improvements, and contract rights of $16.2 million account for the majority of
the cash provided by investing activities in the first six months of fiscal
2001. Purchase of property, equipment, leasehold improvements and contract
rights of $43.0 million, partially offset by proceeds from sales of property of
$14.2 million accounted for the majority of cash used by investing activities
during the first six months of fiscal 2000.
Financing activities for the six months ended March 31, 2001 used net cash
of $30.2 million, compared to $22.0 million in the same period in 2000.
Principal repayments on notes payable and capital lease obligations of $29.2
million and the repurchase of $10.0 million of common stock, offset by net
borrowings under the revolving credit facility of $12.6 million account for the
majority of the cash used by financing activities during the six months ended
March 31, 2001. Net payments under the revolving credit agreement of $21.8
million and repurchase of common stock $10.3 million, partially offset by
proceeds from the issuance of notes payable of $13.3 million account for the
majority of the cash used by financing activities during the six months ended
March 31, 2000.
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.
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 March 31, 2001 the Company had repurchased 1.4 million shares at a total cost
of $25.5 million.
The Company routinely makes capital expenditures to maintain and 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
Page 18 of 26
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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 Credit Facility bears interest at LIBOR plus a grid
based margin dependent upon Central Parking achieving certain financial ratios.
The amount outstanding under the Company's Credit Facility as of March 31, 2001
was $253.0 million with a weighted average interest rate of 6.2%, including the
principal amount of the term loan of $150 million which is being repaid in
quarterly payments of $12.5 million through March 2004. 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. The aggregate availability under the Credit facility was $71.7
million at March 31, 2001.
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.
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 March 31, 2001, the Company
had $253.0 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 increase in interest rates. As of March 31, 2001, 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. $150 million of the Credit
Facility is payable in quarterly installments of $12.5 million and $103.0
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 renew the revolving credit facility.
Page 19 of 26
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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 believes 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
1. The Company's Annual Meeting of Shareholders was held at the Company's
headquarters, 2401 21st Avenue South, Third Floor, Nashville,
Tennessee, on Thursday, February 15, 2001. Nine directors were elected
for the term ending at the Annual Meeting of Shareholders to be held
in 2002. Each nominee received the following number of total votes:
FOR AGAINST ABSTAIN
--- ------- -------
Monroe J. Carell, Jr. 33,584,197 -- 738,376
James H. Bond 34,209,894 -- 112,679
William S. Benjamin 34,229,474 -- 93,099
Cecil Conlee 34,232,727 -- 89,846
Lewis Katz 34,069,193 -- 253,380
Edward G. Nelson 34,229,502 -- 93,071
William C. O'Neil, Jr. 34,230,050 -- 92,523
Richard H. Sinkfield 34,232,353 -- 90,220
Julia Carell Stadler 34,085,340 -- 237,233
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
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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).
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).
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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
(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 of 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.)
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(m) James J. Hagan Employment Agreement, dated June 12, 2000.
(Incorporated by reference to Exhibit 10.1 to the Company's
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.)
(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.
33-95640 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.)
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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.)
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.)
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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
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).
(b) Reports on Form 8-K
On February 14, 2001, the Company filed a current report on form 8-K announcing
results for the first quarter of fiscal 2001, incorporating the text of a press
release on that date.
On February 22, 2001, the Company filed a current report on form 8-K announcing
the resignation of its Chief Financial Officer, incorporating the text of a
press release on that date.
On March 2, 2001, the Company filed a current report on form 8-K announcing the
hiring of Mr. William J. Vareschi, Jr. as Chief Executive Officer, incorporating
the text of a press release on that date.
On March 14, 2001, the Company filed a current report on form 8-K announcing the
results for the second quarter of fiscal 2001, incorporating the text of a press
release dated May 9, 2001.
Page 25 of 26
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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: May 15, 2001 By: /s/ Theresa R. Chester
---------------- -------------------------------
Theresa R. Chester
Vice President - Controller
and acting 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
--------- ----- ----
/s/ Theresa R. Chester Vice President - Controller and acting
--------------------------- Chief Financial Officer (Principal Financial and May 15, 2001
Theresa R. Chester Accounting Officer)
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 26 of 26