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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the fiscal year ended September 30, 1998.
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from __________________________
to__________________________
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 (I.R.S. Employer Identification No.)
Incorporation or Organization)
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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Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act:
Title of Each Class Name of each Exchange on which registered
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Common Stock $0.01 par Value New York Stock Exchange
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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
The aggregate market value of the Common Stock held by non-affiliates of the
registrant, based on the closing price of the Common Stock on the New York
Stock Exchange on December 24, 1998 was $979,825,178. For purposes of this
response, the registrant has assumed that its directors, executive officers,
and beneficial owners of 5% or more of its Common Stock are the affiliates of
the registrant.
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 December 24, 1998
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Common Stock, $0.01 par value 29,579,628
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Proxy Statement for the Annual Meeting of
Shareholders to be held on March 5, 1999 are incorporated by reference into Part
III of this Form 10-K. Portions of the Registrant's Annual Report to
Shareholders for the fiscal year ended September 30, 1998 are incorporated by
reference into Part II of this Form 10-K.
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PART I
ITEM 1. BUSINESS
GENERAL
Central Parking Corporation ("Central Parking" or the "Company") is a leading
provider of parking services operating, as of September 30, 1998, 2,440 parking
facilities containing approximately 1,023,000 spaces in 35 states, the District
of Columbia, Canada, Chile, Puerto Rico, the United Kingdom, the Republic of
Ireland, Spain, Germany, Mexico, and Malaysia. Central Parking has a business
development office in Amsterdam.
Central Parking provides parking management services at multi-level parking
facilities and surface lots. It also provides parking consulting, shuttle,
valet, parking meter enforcement, and billing and collection services. Central
Parking operates parking facilities under three general types of arrangements:
management contracts, leases, and fee ownership. As of September 30, 1998,
Central Parking operated 1,302 parking facilities under management contracts
and 1,071 parking facilities under leases, and owned, either independently or
through joint ventures, 67 parking facilities.
INDUSTRY
The International Parking Institute, a non-profit parking industry
organization, estimates that there are 35,000 parking facilities in the United
States operated by commercial and governmental entities. The commercial parking
services business is very fragmented, consisting of a few national companies
and approximately 1,000 small privately held local and regional operators.
Central Parking believes that it has the opportunity to consolidate portions of
this fragmented, localized industry by using its competitive advantage with
regard to scale, financial strength, technology, controls, and professionalism,
all of which are becoming increasingly important in the parking services
business. For the same reasons, Central Parking believes that it is well
positioned to be selected by municipal and other governmental entities to
operate their parking facilities and provide parking-related services as such
entities move toward outsourcing and privatization.
During the 1980's, the high level of construction activity in the United States
resulted in a significant increase in the number of parking facilities. Since
that time, as construction activity has slowed, growth of certain parking
service companies, including Central Parking, has been as a result of
take-aways from other parking companies. New construction and acquisition of
additional facilities are essential to growth for parking service companies
because of the limitations on growth in revenues of existing operations.
Although some growth in revenues from existing operations is possible through
redesign, increased operational efficiency, or increased facility use and
prices, such growth is ultimately limited by the size of a facility and market
conditions.
Management believes that most commercial real estate developers and property
owners view services such as parking as potential profit centers rather than
cost centers. These parties outsource parking operations to parking management
companies in an effort to maximize profits or leverage the original rental
value to a third-party lender. Parking management companies can increase
profits by using managerial skills and experience, operating systems, and
operating controls unique to the parking industry.
Privatization of government operations and facilities could provide new
opportunities for the parking industry. The International Parking Institute has
estimated that more than 50% of the revenues generated by the United States
parking industry is generated by facilities operated by municipalities and
other governmental entities. Cities and municipal authorities may consider
retaining private firms to operate facilities and parking-related services in
an effort to reduce operating budgets and increase efficiency. Privatization in
the United Kingdom already has provided significant expansion opportunities for
private parking companies. In the United States, several cities have awarded or
are considering awarding on-street parking enforcement and parking meter
service contracts to for-profit parking companies such as Central Parking. For
example, Central Parking has been awarded contracts for collection of parking
meter revenues in Miami Beach, Florida, and parking meter enforcement in
Charlotte, North Carolina and Richmond, Virginia.
GROWTH STRATEGY
Central Parking plans to continue to add facilities to its operations by
focusing its marketing efforts on adding facilities at the local level,
targeting real estate managers and developers with a national presence,
pursuing strategic acquisitions of other parking service operators, and
expanding its international operations. Set forth below are the key elements of
Central Parking's growth strategy.
Increase Market Presence. Central Parking continually seeks to
establish and increase its operations in new and existing markets through
take-aways of competitors' contracts, obtaining new management and lease
contracts,
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entering into joint venture arrangements, and purchases of parking
facilities. Through emphasizing marketing at the local level and
establishing relationships with large-scale national asset managers and
developers, Central Parking expects to continue to expand its base of
operations. Management believes that Central Parking's relative size,
financial strength and systems, and automation capabilities give it a
competitive advantage in winning new business and make it an attractive
partner for joint venture and other opportunities. In addition, Central
Parking believes that its unique performance-based compensation system,
which is designed to reward managers for increasing the profitability of
their respective area of responsibility, has been a key contributor to
Central Parking's growth.
Pursue Strategic Acquisitions. Central Parking intends to continue to
pursue acquisition opportunities. Central Parking believes that many of its
smaller competitors have limited access to capital or do not have the
systems or economies of scale to compete effectively. Central Parking's
acquisition strategy is to focus on opportunities that enable Central
Parking to (i) become a stronger, more efficient provider in selected
markets, (ii) generate significant economies of scale and cost savings, and
(iii) increase cash flow. Cost savings typically result from the
elimination of duplicative management functions as well as from
efficiencies resulting from implementing Central Parking's systems and
professional management techniques and development. Central Parking has a
senior vice president dedicated exclusively to acquisitions and
development. During calendar year 1997, Central Parking acquired Square
Industries, Inc. ("Square") (January 1997) in New York, Car Park
Corporation ("Car Park") (May 1997) in San Francisco, and Diplomat Parking
Corporation ("Diplomat") (October 1997) in Washington, D.C. During calendar
year 1998, Central Parking acquired Kinney System Holding Corp ("Kinney")
(February 1998), which operated 403 parking facilities primarily in New
York, Boston, Philadelphia, and Washington, D.C.; Turner Parking System,
Inc ("Turner") (April 1998), which operated 34 parking facilities in Texas,
Florida, California, Georgia and Washington, D.C.; and Sterling Parking,
Inc ("Sterling") (July 1998), which operates parking facilities in Georgia,
Florida, Virginia, California and Kentucky. In addition, Central Parking
purchased the remaining 50% interest in Central Parking System of
Louisiana, Inc ("CPS-Louisiana") (March 1998), which operates parking
facilities in Louisiana.
Expand International Operations. Management believes that there are
significant international growth opportunities, particularly for
well-capitalized companies that are interested in making significant
investments in equipment and construction, either independently or with
foreign partners. Central Parking typically enters foreign markets either
through consulting projects or by forming joint ventures with established
local entities, both of which allow Central Parking to enter foreign
markets with reduced operating and investment risk. Since 1991, Central
Parking has established operations in the United Kingdom, Germany, Mexico,
Malaysia, Canada, Spain, and the Republic of Ireland. Central Parking
believes there are significant expansion opportunities in these countries
as well as other countries.
OPERATING STRATEGY
Central Parking's primary objective is to increase the revenues and
profitability of its parking facilities through a variety of operating
strategies, including the following:
Maintain Strict Cost Management and Cash Control. In order to provide
competitively priced services, the Company must contain costs. Managers
are trained to analyze staffing and cost control issues, and each facility
is carefully tracked on a monthly basis to determine whether financial
results are within budgeted ranges. Because of the substantial
performance-based components of their compensation, managers are
continuously motivated to contain the costs of their operations. Strict
cash control also is critical to Central Parking and its clients. Central
Parking's cash control procedures are based on a ticketing system
supervised by high level managers and include on-site spot checks,
multiple daily cash deposits, local audit functions, managerial oversight
and review, and internal audit procedures. It is Central Parking policy
that all tickets and gate counts are reconciled daily against cash
collected. Management believes its cash control procedures are effective
in minimizing the loss of revenues at parking facilities.
Emphasize Sales and Marketing Efforts. Central Parking's management is
actively involved in developing and maintaining business relationships and
in exploring opportunities for growth. A cornerstone of Central Parking's
culture is its incentive compensation system, which rewards managers who
are able to develop new business. Central Parking's marketing efforts are
designed to expand its operations by developing lasting relationships with
major real estate developers and asset managers, business and government
leaders, and other clients. Central Parking encourages its managers to
pursue new opportunities at the local level while simultaneously
selectively targeting key clients and projects at a national level.
Leverage Established Market Presence and Corporate Infrastructure.
Central Parking has an established presence in multiple markets,
representing platforms from which it can build. Because of the relatively
fixed nature of corporate overhead and the resources that can be shared in
specific markets, Central Parking has the opportunity to expand its profit
margins as it grows its presence in established markets. Central Parking
has consistently reduced general and administrative expenses, excluding
goodwill amortization, as a percentage of total revenues. General and
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administrative expenses, excluding goodwill amortization, as a percentage
of total revenues were 12.3%, 10.2%, and 8.8% in fiscal 1996, 1997, and
1998, respectively.
Empower Local Managers; Provide Corporate Support. Central Parking has
achieved what management believes is a successful balance between
centralized and decentralized management. Because its business is
dependent, to some extent, on personal relationships, Central Parking
provides its managers with a significant degree of autonomy in order to
encourage prompt and effective responses to local market demands. In
conjunction with this local operational authority, the Company provides,
through its corporate office, services that typically are not readily
available to independent operators such as management support, marketing
and business expertise, training, and financial and information systems.
Central Parking retains centralized control over those functions necessary
to monitor service quality and cash control integrity and to maximize
operational efficiency. Services performed at the corporate level include
billing, quality improvement oversight, financial and accounting
functions, legal services, policy and procedure development, systems
design, and corporate acquisitions and development.
Utilize Performance-Based Compensation. Central Parking's
performance-based compensation system rewards managers at the general
manager level and above for the profitability of their respective areas of
responsibility. Each person participating in the incentive program
generally receives a substantial portion of his or her compensation from
this performance-based compensation system. Incentive compensation
payments typically range from 20% to 80% of total compensation.
Maintain Well-Defined Professional Management Organization. In order
to ensure professionalism and consistency in Central Parking's operations,
to provide a career path opportunity for its managers, and to achieve a
balance between autonomy and accountability, Central Parking has
established a highly structured management organization. Organized into
six levels, Central Parking has a total of 400 managers and hires
approximately 50 per year.
Central Parking recruits primarily college graduates or people with
previous parking services or hospitality industry experience, and requires
that they complete a formal training program. Management believes that
Central Parking's training program is a significant factor in Central
Parking's success. New managers are assigned to a particular facility
where they are supervised as they manage one to five employees. The
management trainee program lasts approximately one year and teaches a wide
variety of skills, including organizational skills, basic management
techniques, and basic accounting. Upon successful completion of this stage
of the program, management trainees are promoted to facility manager in
charge of a particular parking facility. As facility managers, they report
up through the hierarchical structure of managers. As managers develop and
gain experience, they have the opportunity to assume expanded
responsibility, to be promoted to higher management levels and to increase
the performance-based component of their compensation. This well-defined
structure provides a career path that is designed to be an attractive
opportunity for prospective new hires. In addition, management believes
the well-planned training and advancement program has enabled Central
Parking to instill a high level of professionalism in its employees. A
final important benefit of Central Parking's organizational structure is
that it has allowed Central Parking to balance localized autonomy with
accountability and centralized support and control.
Automate Facilities. Management believes that the Company's
application of sophisticated technology to its operations represents a
competitive advantage over smaller operators with more limited resources.
Central Parking has implemented computerized card tracking and accounting
systems in certain of its facilities and is experimenting with a variety
of automated settlement systems. Central Parking expects that these
technology initiatives will enhance revenue by increasing the efficiency
and accuracy of payment collections, reduce labor costs, and minimize lost
revenue at parking facilities.
Strategically Expand Service Offerings. Central Parking provides
services that are complementary to parking facility management, with a
particular emphasis on consulting services. Other ancillary services
include parking meter enforcement services, on-street parking services,
car pooling coordination, shuttle van services, and transportation
management. These ancillary services do not constitute a significant
portion of Central Parking's revenues, but management believes that the
provision of ancillary services can be important in obtaining new business
and preparing the Company for future changes in the parking industry.
Focus on Retention of Patrons. In order for the Company to succeed,
its parking patrons must have a positive experience at Company facilities.
Accordingly, the Company stresses the importance of having well lighted,
clean facilities and cordial employees. Each facility manager has primary
responsibility for the environment at the facility, and is evaluated on
his or her ability to retain parking patrons. The Company also monitors
customer satisfaction through customer surveys and "mystery parker"
programs.
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Maintain Disciplined Facility Site Selection Analysis. In existing
markets, the facility site selection process begins with identification of
a possible facility site and the analysis of projected revenues and costs
at the site by general managers and regional managers. The managers then
conduct an examination of a location's potential demand based on traffic
patterns and counts, area demographics, and potential competitors. Pro
forma financial statements are then developed and a Company representative
will meet with the property owner to discuss the terms and structure of
the agreement.
The Company seeks to distinguish itself from its competitors by
combining a reputation for professional integrity and quality management
with operating strategies designed to increase the revenues of parking
operations for its clients. The Company's clients include some of the
nation's largest owners and developers of mixed-use projects, major office
building complexes, sports stadiums, hotels, and toll roads. Parking
facilities operated by the Company include, among others, certain
terminals operated by BAA Heathrow International Airport (London), the
Prudential Center (Boston), Cinergy Field (Cincinnati), Coors Field
(Denver), and various parking facilities owned by the Hyatt and Westin
hotel chains, the Rouse Company, Faison Associates, May Department Stores,
Equity Office Properties, and Crescent Real Estate. None of these clients
account for more than 5% of the Company's total revenues.
ACQUISITIONS
The Company's acquisition strategy focuses primarily on acquisitions that will
enable Central Parking to become a more efficient and cost-effective provider
in selected markets. Central Parking believes it can recognize economies of
scale by making acquisitions in markets where the Company already has a
presence, which allows Central Parking to reduce the overhead cost of the
acquired company by consolidating its management with that of Central Parking.
In addition, Central Parking seeks acquisitions in attractive new markets.
Management believes acquisitions are an effective means of entering new
markets, thereby quickly obtaining both operating presence and management
personnel. Central Parking also believes it generally can improve acquired
operations by applying its operating strategies and professional management
techniques. The Company's acquisitions over the last two years, all of which
were accounted for under the purchase method of accounting, are as follows:
Civic Parking LLC. On December 31, 1996, Central Parking purchased for
cash, Civic, which owns four parking garages in St. Louis: Kiener East,
Kiener West, Stadium East and Stadium West. The four garages, which had
previously been operated by Central Parking under management agreements,
have a total of 7,464 parking spaces. The purchase price was approximately
$91.0 million, which was financed through working capital and $67.2 million
of borrowings under the Company's then existing credit facility. Of the
$91.0 million, $46.0 million was held for resale to a joint venture partner
and $45.0 million was recorded as an investment in joint ventures. On April
16, 1997, Central Parking consummated the sale of 50% of Civic to its joint
venture partner, an affiliate of Equity Capital Holdings, LLC, for $46.0
million in cash. Central Parking continues to operate these garages
pursuant to a lease and operating agreement with Civic.
Square Industries, Inc. On January 18, 1997, Central Parking completed
a cash tender to acquire all of the outstanding shares of Square for $54.8
million, including transaction fees and other related expenses. In
addition, Central Parking assumed $23.2 million of existing Square debt.
The purchase price was financed through borrowings under Central Parking's
then existing credit facility. At the time of the acquisition, Square
operated 116 parking facilities containing over 61,000 parking spaces,
located primarily in the Northeastern United States.
Car Park Corporation. On May 29, 1997, Central Parking acquired the
assets and related leases of Car Park for $3.5 million; consisting of 18
parking facilities with approximately 2,600 parking spaces located in the
San Francisco metropolitan region. The purchase price was financed through
$1.7 million of borrowings under the Company's then-existing credit
facility, and $1.8 million payable to the seller, which has been repaid in
full.
Diplomat Parking Corporation. On October 1, 1997, Central Parking
acquired the stock and certain assets of Diplomat for approximately $22.2
million in cash and notes payable, including transaction fees and other
related costs. The acquisition was financed through borrowings under the
Company's then existing credit facility. At the time of the acquisition,
Diplomat operated 164 parking facilities containing over 37,000 parking
spaces, located primarily in Washington, D.C. and Baltimore, Maryland.
Kinney System Holding Corp. On February 12, 1998, Central Parking
acquired Kinney, a privately held company headquartered in New York City.
Kinney has been in the parking business for over 60 years. In addition to
enhancing the Company's presence in New York City, Kinney increased
Central Parking's presence in a number of other major metropolitan areas
such as Boston, Philadelphia and Washington, D.C. and broadened its
geographic coverage in the following nine states: Connecticut, Florida,
Kentucky, Maryland, Massachusetts, New Hampshire, New York,
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Pennsylvania, and Virginia. Kinney provides both self-parking and valet
parking services, and provides parking related services such as facility
design and development and consulting services.
Kinney operated 403 parking facilities containing approximately
168,800 spaces, including approximately 76,700 in the New York City
metropolitan area, 42,800 in Boston, 31,100 in Philadelphia and 10,300 in
Washington, D.C. At the time of the acquisition, Kinney's facility mix was
comprised of 225 leased sites, 170 managed sites and 8 owned sites. The
parking facilities operated by Kinney include Yankee Stadium, the
Waldorf-Astoria, Port Authority Bus Terminal, World Financial Center, and
the General Motors Building in New York City, The Ritz-Carlton-Boston,
Government Center in Boston, Spectrum-Philadelphia, and the Four Seasons
Hotel of Washington, D.C.
Consideration for the Kinney acquisition was approximately $208.8
million, including $171.8 million in cash, including transaction fees and
other related costs, and $37.0 million (882,422 shares) in Central Parking
common stock. In connection with this transaction, Central Parking assumed
$10.3 million in capital leases, refinanced $24.2 million in existing
Kinney debt and assumed $4.6 million of Kinney debt. Central Parking
financed the Kinney acquisition through borrowings under the Company's
credit facility, and ultimately from the issuance of Central Parking common
stock and Central Parking obligations pursuant to the Trust Issued
Preferred Securities.
Central Parking System of Louisiana, Inc. Central Parking has
historically owned 50% of CPS-Louisiana and on March 30, 1998, purchased
the remaining 50% from Property Service Corporation for $2.5 million in
Central Parking common stock (52,631 shares). CPS-Louisiana manages and
operates leased parking facilities, manages and operates parking
facilities owned or leased by other parties, and provides financial and
other advisory services.
Turner Parking System, Inc. On April 1, 1998, Central Parking
purchased substantially all of the assets of Turner, a privately-held
parking company headquartered in Dallas, Texas, for $3.8 million,
including $3.0 million in cash and $800,000 (16,842 shares) in Central
Parking common stock. Central Parking financed the cash portion of the
Turner purchase with borrowings under the Company's credit facility.
Sterling Parking, Inc. On July 1, 1998, Central Parking purchased
substantially all of the assets of Sterling Parking, Inc. ("Sterling"), a
privately-held parking company headquartered in Atlanta, Georgia for $4.3
million, including $2.1 million in cash, including transaction fees and
other related costs, and $2.2 million (54,358 shares) in Central Parking
common stock. Central Parking financed the cash portion of the Sterling
purchase with borrowings under the Company's credit facility. At the time
of the acquisition, Sterling operated 31 parking facilities in Georgia,
Florida, Virginia, California, and Kentucky.
PENDING MERGER
On September 21, 1998, the Company entered into a definitive agreement pursuant
to which the Company has agreed to merge with Allright Holdings, Inc.
("Allright"). Allright (d/b/a Allright Parking) is headquartered in Houston and
is one of the largest parking services companies in the United States with
revenues of $217.4 million for the fiscal year ended June 30, 1998. The
transaction, which is expected to be accounted for as a pooling-of-interests, is
based on a base purchase price of $564.4 million. The base purchase price of
Allright will be adjusted for certain items such as assumed long-term
indebtedness, certain expenses, asset acquisitions or dispositions, and material
variations of amounts estimated or represented by Allright Management prior to
the closing date. The equity purchase price of Allright is calculated in
equivalent shares of Central Parking common stock, based on a fixed share price
of $46.00 per share. Under terms of the agreement, Central Parking expects to
issue shares of common stock (approximately 7.6 million shares) to the
shareholders of Allright.
The merger remains subject to certain closing conditions, including the
expiration of the waiting period under the Hart-Scott-Rodino Act. The
transaction is subject to approval by the shareholders of both Central Parking
and Allright at separate meetings to be scheduled.
SALES AND MARKETING
Central Parking's sales and marketing efforts are designed to expand its
operations by developing and maintaining relationships with major real estate
developers and asset managers, business and government leaders, and other
clients. Central Parking encourages its managers to pursue new opportunities at
the local level while simultaneously selectively targeting key clients and
projects at a national level.
Local. At the local level, Central Parking's sales and marketing efforts are
decentralized and directed towards identifying new expansion opportunities
within a particular city or region. Managers are trained to develop the
business contacts necessary to generate new opportunities and to monitor their
local markets for take-away and outsourcing opportunities. Central Parking
provides its managers with a significant degree of autonomy in order to
encourage prompt and effective responses to local market demands, which is
complemented by management support and marketing training through Central
Parking's corporate offices. In addition, a manager's compensation is
dependent, in part, upon his or her success in developing new business. By
developing business contacts locally, Central Parking's managers often get the
opportunity to bid on projects when asset managers and property owners are
dissatisfied with current operations and also learn in advance of possible new
projects.
National. At the national level, Central Parking's marketing efforts are
undertaken primarily by upper-level management, which targets developers,
governmental entities, the hospitality industry, mixed-use projects, and
medical facilities. These efforts are directed at operations that generally
have national name recognition, substantial demand for parking related
services, and the potential for nationwide growth. For example, Central
Parking's current clients include, among other national real estate companies
and hotel chains, the Rouse Company, Faison Associates, Equity Office
Properties, May Department Stores, Crescent Real Estate, Westin Hotels, and
Hyatt Hotels. Management believes that providing high-quality, efficient
services to such companies will lead to additional opportunities as those
clients continue to expand their operations. Management believes outsourcing by
parking facility owners will continue to be a source for additional facilities,
and management believes the Company's experience and reputation with large real
estate asset managers give it a competitive advantage in this area.
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INTERNATIONAL EXPANSION
Central Parking's international operations began in the early 1990's with the
formation of an international division, which is now one of the fastest growing
areas of Central Parking. The Company typically enters foreign markets either
through consulting projects or by forming joint ventures with established local
entities. Consulting projects allow Central Parking to establish a presence and
evaluate the prospects for growth of a given market without investing a
significant amount of capital. Likewise, forming joint ventures with local
partners allows Central Parking to enter new foreign markets with reduced
operating and investment risks.
Operations in London began in 1991 with a single consulting agreement and since
then have grown to 159 facilities in the United Kingdom including two terminals
at Heathrow International Airport and parking meter enforcement and ticketing
services for three local governments that have privatized these services.
Central Parking began expansion into Mexico in July 1994 by forming a joint
venture with Fondo Opcion, an established Mexican developer, and now operates
61 facilities in Mexico. Central Parking also operates 4 facilities in Canada,
one facility in Spain and has entered into a management contract in Kuala
Lumpur, Malaysia related to the operation of a 5,400 space parking facility
servicing one of the largest development projects in the world. The Company
also operates on-street parking services in the United Kingdom, Germany and the
Republic of Ireland. Central Parking established a business development office
in the Netherlands in 1995 to pursue expansion into other European countries.
In 1996, Central Parking acquired a 50% equity interest in a joint venture,
which operates five facilities in Germany. In order to manage its international
expansion, the Company has allocated responsibilities for international
operations to an executive vice president.
OPERATING ARRANGEMENTS
Central Parking operates parking facilities under three general types of
arrangements: management contracts, leases, and fee ownership. As of September
30, 1998, Central Parking operated 1,302 parking facilities through management
contracts, leased 1,071 parking facilities, and owned 67 parking facilities,
either independently or in joint venture with third parties. The following
table sets forth certain information regarding the number of managed, leased,
or owned facilities as of the specified dates:
AT SEPTEMBER 30,
----------------
1996 1997 1998
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Managed Facilities................................................. 770 877 1,302
Leased Facilities.................................................. 552 709 1,071
Owned Facilities................................................... 37 58 67
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Total...................................................... 1,359 1,644 2,440
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The general terms and benefits of these types of arrangements are discussed as
follows:
Management Contracts. 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. In
general, 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. In
general management contracts are for terms of one to three years and are
renewable for successive one-year terms, but are cancelable by the
property owner on short notice. Although management contracts typically
are for relatively short terms, the Company's renewal rates for each of
the past five fiscal years were in excess of 91%. With respect to
insurance, 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. See "--Insurance"
Leases. The Company's rent under leases is generally a fixed annual
amount, a percentage of gross revenues, or a combination thereof. Leased
facilities generally 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
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opportunity for long-term revenue growth. The cost of parking includes
rent, payroll and related benefits, depreciation, maintenance, insurance,
and general operating expenses. Under its leases, the Company is typically
responsible for all facets of the parking operations, including pricing,
utilities, and ordinary and routine maintenance, but is generally not
responsible for structural, mechanical, or electrical maintenance or
repairs, or property taxes. Lease arrangements are typically for terms of
three to ten years, with a renewal term, and provide for a contractually
established payment to the facility owner regardless of the operating
earnings of the parking facility.
Fee Ownership. 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. All changes in owned facility
revenue flow directly to the Company, and the Company has the potential to
realize benefits of appreciation in the value of the underlying real
estate if the property is sold. The ownership of a parking facility brings
the Company complete responsibility for all aspects of the property,
including all structural, mechanical, or electrical maintenance or
repairs.
Joint Ventures. The Company seeks joint venture partners who are
established local or regional developers pursuing financing alternatives
for development projects. Joint ventures typically involve a development
where the parking facility is a part of a larger multi-use project,
allowing the Company's joint venture partners to benefit from a capital
infusion to the project. Joint ventures offer the revenue growth potential
of ownership with a partial reduction in capital requirements. The Company
has interests in joint ventures that own or operate parking facilities
located in Nashville, Denver, Tulsa, St. Louis, Mexico City, Berlin,
Dresden, and Frankfort.
MBE Partnerships. Central Parking is currently a party to eleven
separate minority business enterprise partnerships. These are generally
partnerships formed by Central Parking and a minority businessperson to
manage a facility. Central Parking generally owns 60% to 70% of the
partnership interests in each partnership and typically receives
management fees before partnership distributions are made to the partners.
COMPETITION
The parking industry is fragmented and highly competitive. The Company faces
direct competition for additional facilities to manage, lease, or own and the
facilities currently operated by the Company face competition for employees and
customers. The Company competes with a variety of other companies to add new
operations. Although there are relatively few large, national parking companies
that compete with the Company, developers, hotel companies, and national
financial services companies have the potential to compete with parking
companies. Municipalities and other governmental entities also operate parking
facilities which compete with Central Parking. The Company also faces
competition from regional and local parking companies and from owner-operators
of facilities who are potential clients for the Company's management services.
Construction of new parking facilities near the Company's existing leased or
managed facilities could adversely affect the Company's business.
Management believes that it competes for clients based on rates charged for
services; ability to generate revenues and control expenses for clients;
ability to anticipate and respond to industry changes; range and quality of
services; and ability to expand operations. The Company believes it has a
reputation as a leader in the industry and as a provider of high quality
services. The Company also is one of the largest companies in the parking
industry and is not limited to a single geographic region. The Company has the
financial strength to make capital investments as an owner or joint venture
partner that smaller or more leveraged companies cannot make. The Company's
size also has allowed it to centralize administrative functions that give the
decentralized managerial operations cost-efficient support. Moreover, the
Company has obtained broad experience in managing and operating a wide variety
of facilities over the past 30 years. Additionally, the Company is able to
attract and retain quality managers through its incentive compensation system
that directly rewards successful sales and marketing efforts and places a
premium on profitable growth.
INSURANCE
The Company purchases comprehensive liability insurance covering parking
facilities it owns, leases or manages. The primary amount of such coverage is
$1 million per occurrence and $1 million in the aggregate per facility. In
addition, the Company purchases group insurance with respect to all full-time
Company employees, whether such persons are employed at owned, leased, or
managed facilities. Because of the size of the operations covered, the Company
purchases these policies at prices that, management believes, represent a
discount to the prices that would be charged to parking facility owners on a
stand-alone basis. Pursuant to its management contracts, the Company charges
its customers for insurance at rates it believes approximate market rates based
upon its review of the applicable market. In each case, the Company's clients
have the option of purchasing their own policies, provided the Company is named
as an additional insured; however, because the Company's fees for insurance are
generally competitive with market rates, many of the Company's
8
9
clients have chosen historically to purchase such insurance through the
Company. A reduction in the number of clients that purchase insurance through
the Company, however, could have a material adverse effect on the operating
earnings of the Company. In addition, although the Company's cost of insurance
has not fluctuated significantly in recent years, a material increase in
insurance costs due to increased claims experienced by the Company could
adversely affect the profit associated with insurance charges pursuant to
management contracts and could have a material adverse effect on the operating
earnings of the Company.
REGULATION
The Company's business is not substantially affected by direct governmental
regulation, although both municipal and state authorities sometimes directly
regulate parking facilities. The facilities in New York City are, for example,
subject to certain governmental restrictions concerning numbers of cars,
pricing, and certain prohibited practices. The Company is also affected by laws
and regulations (such as zoning ordinances) that are common to any business
that owns real estate and by regulations (such as labor and tax laws) that
affect companies with a large number of employees. In addition, several state
and local laws have been passed in recent years that encourage car-pooling and
the use of mass transit, including, for example, a Los Angeles, California law
prohibiting employers from reimbursing employee-parking expenses. Laws and
regulations that reduce the number of cars and vehicles being driven could
adversely impact the Company's business.
Under various federal, state and local environmental laws, ordinances and
regulations, a current or previous owner or operator of real property may be
liable for the costs of removal or remediation of hazardous or toxic substances
on, under or in such property. Such laws typically impose liability without
regard to whether the owner or operator knew of, or was responsible for, the
presence of such hazardous or toxic substances. In connection with the
ownership or operation of parking facilities, the Company may be potentially
liable for any such costs. Although Central Parking is currently not aware of
any material environmental claims pending or threatened against it or any of
its owned or operated parking facilities, there can be no assurance that a
material environmental claim will not be asserted against the Company or
against its owned or operated parking facilities. The cost of defending against
claims of liability, or of remediating a contaminated property, could have a
material adverse effect on the Company's financial condition or results of
operations.
Various other governmental regulations affect the Company's operation of
parking facilities, both directly and indirectly, including the Americans with
Disabilities Act ("ADA"). Under the ADA, all public accommodations, including
parking facilities, are required to meet certain federal requirements related
to access and use by disabled persons. For example, the ADA requires parking
facilities to include handicapped spaces, headroom for wheelchair vans,
attendants' booths that accommodate wheelchairs, and elevators that are
operable by disabled persons. Management believes that the parking facilities
the Company owns and operates are in substantial compliance with these
requirements.
EMPLOYEES
As of September 30, 1998, the Company employed approximately 12,000
individuals, including 6,300 full-time and 5,700 part-time employees.
Approximately 3,900 U.S. employees are represented by labor unions. Various
union locals, including Teamsters Local No. 272, represent parking attendants
and cashiers at the New York City facilities. Other cities in which some of the
Company's employees are represented by labor unions are Washington, D.C.;
Miami; Philadelphia; San Francisco; Des Moines, Iowa; Jersey City, Newark, and
Atlantic City, New Jersey; Pittsburgh; White Plains, N.Y.; San Juan, Puerto
Rico; and Chicago. The Company frequently is engaged in collective bargaining
negotiations with various union locals but has not experienced any labor
strikes. Management believes that the Company's employee relations are good.
SERVICE MARKS AND TRADEMARKS
The Company has registered its logo with the United States Patent Office. The
Company has applied for registration of the name "Central Parking System,"
which application was initially opposed by two parties. Both parties have
withdrawn their opposition but continue to use the name "Central Parking"
exclusively in the Chicago and Atlantic City areas. The Company also owns
registered trademarks for Square Industries and Kinney System and operates
various parking locations under those names. The Company has applied for
registration for the names, "CPC" and "Central Parking Corporation." The
Company uses the name "Chicago Parking System" in Chicago and "CPS Parking" in
Seattle and Milwaukee. The Company has registered the name "Control Plus" and
its symbol in London and intends to use and register that name and symbol in
association with its on street parking activities in Richmond, Virginia . The
Company has registered, or intends to register, its name and logo in various
international locations where it does business.
9
10
FOREIGN AND DOMESTIC OPERATIONS
Information about the Company's foreign and domestic operations is incorporated
by reference to Note 17 to the Company's 1998 Consolidated Financial Statements.
FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE
This document, and documents that have been incorporated herein by reference,
include various forward-looking statements regarding the Company that are
subject to risks and uncertainties, including, without limitation, the factors
set forth under the caption "Risk Factors" in the Company's Registration
Statement on Form S-4 filed on October 23, 1998, as amended (the "Allright
Registration Statement"). 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 document, the Allright Registration Statement and the documents which are
incorporated herein by reference, could affect the future financial results of
the Company and the combined company and could cause actual results to differ
materially from those expressed in forward-looking statements contained or
incorporated by reference in this document:
- successfully integrating Allright and Kinney Systems, 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;
- the National Basketball Association strike;
- fluctuations in quarterly operating results caused by a variety of
factors including the timing of gains on sales of owned facilities,
preopening costs, the effect of weather on travel and transportation
patterns, 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 and potential changes in laws and
regulations, including, without limitation, changes in federal, state and
international laws regulating the environment; and
- a significant delay in the expected closing of the proposed merger with
Allright.
10
11
ITEM 2. PARKING FACILITY PROPERTIES
The Company's facilities are currently organized into 12 regions, 11 in North
America (10 in the United States, one in Mexico) and one which is comprised of
the United Kingdom and Continental Europe. Each region is supervised by a
regional manager who reports directly to one of the senior vice presidents.
Regional managers oversee four to six general managers who each supervise the
Company's operations in a particular city. The following table summarizes
certain information regarding the Company's facilities as of September 30,
1998.
NUMBER OF TOTAL PERCENTAGE OF
REGIONS CITIES LOCATIONS MANAGED LEASED OWNED SPACES TOTAL SPACES
- ---------------------------------------------------------------------------------------------------------------------
Atlanta.......... Atlanta, Birmingham, Charleston 146 90 56 -- 82,659 8.1%
(SC),Charlotte, Columbia (SC),
Jackson (MS), Mobile
Denver........... Denver/Colorado Springs 160 92 58 10 72,291 7.1
Des Moines, Kansas City
Minneapolis, Oklahoma City,
St. Louis
International.... United Kingdom - Birmingham 165 80 85 -- 62,805 6.1
London, Oxford, Newcastle
Germany--Berlin, Dresden,
Frankfurt, Spain and Malaysia
Florida.......... Jacksonville, Miami/Ft. Lauderdale, 222 125 97 -- 89,946 8.8
Orlando, Puerto Rico, Tampa/St.
Petersburg
Los Angeles...... Los Angeles, Orange County (CA), 94 72 22 -- 51,340 5.0
Phoenix
Mid-Atlantic..... Baltimore, Norfolk 352 201 142 9 142,798 14.0
Philadelphia, Pittsburgh,
Richmond, Washington, D.C.
Mexico........... Cuernavaca, Mexico City, Monterrey 61 34 27 -- 31,796 3.1
Midwestern....... Charleston, (WV) 120 79 40 1 72,914 7.1
Cincinnati, Cleveland
Columbus, Indianapolis
Milwaukee, Ottawa, Toronto
Nashville........ Chattanooga, Knoxville, 263 112 129 22 56,141 5.5
Lexington/Frankfort, Louisville,
Memphis, Nashville(1)
New York......... Hartford, Jersey City, 379 139 225 15 142,655 14.0
New York, Providence, Stamford
San Francisco.... Oakland, Salt Lake City, 63 37 26 -- 20,674 2.0
San Francisco, Seattle
Texas............ Albuquerque, Austin 279 180 89 10 134,402 13.1
Corpus Christi, Dallas
El Paso, Houston, New
Orleans, San Antonio, Tulsa
Other............ Boston, Chicago, Nashua 136 61 75 -- 62,141 6.1
------------------------------------------------------
Total 2,440 1,302 1,071 67 1,022,562 100.0%
======================================================
The Company's facilities include both surface lots and structured parking
facilities (garages). Approximately 74% of the Company's owned parking
properties are in structured parking facilities, with the remainder in surface
lots. Management believes the Company's owned facilities generally are in good
condition and adequate for its present needs.
- ---------------------------------
(1) Includes Central Parking Corporate headquarters in owned facilities.
11
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ITEM 3. 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 takes steps to attempt to disclaim its
liability for personal injury and property damage claims by printing
disclaimers on its ticket stubs and by placing warning signs in the facilities
it owns or operates. The Company also carries liability insurance that
management believes meets industry standards; however, there can be no
assurance that any future legal proceedings (including any related judgments,
settlements or costs) will not have a material adverse effect on the Company's
financial condition, liquidity, or results of operations.
12
13
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
No matter was submitted to a vote of the Company's security-holders
during the fourth quarter of the fiscal year ended September 30, 1998.
13
14
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(a) The Registrant's Common Stock is listed on the NYSE under the symbol "CPC."
The following table sets forth, for the periods indicated, the high and low
sales prices for the Company Common Stock as reported by the NYSE.
Such amounts reflect the three-for-two stock split in December 1997.
High Low
---- ---
FISCAL 1997
First Quarter......................................................... $ 24.58 $ 21.08
Second Quarter........................................................ 22.75 16.33
Third Quarter......................................................... 23.25 15.92
Fourth Quarter........................................................ 32.92 22.17
Twelve months......................................................... 32.92 15.92
FISCAL 1998
First Quarter......................................................... $ 46.81 $ 31.42
Second Quarter........................................................ 49.38 38.44
Third Quarter......................................................... 48.44 40.31
Fourth Quarter........................................................ 52.63 41.31
Twelve months......................................................... 52.63 31.42
(b) There were, as of September 30, 1998, approximately 8,100 holders of the
Registrant's Common Stock, as evidenced by security position listings.
(c) Since April 1997, Central Parking has distributed a quarterly cash dividend
of $0.015 per share of Central Parking common stock. The Company had previously
declared a dividend of $0.0125 per share of Central Parking common stock
following the end of each quarter since its initial public offering in October
1995. The Company Board currently intends to declare a cash dividend each
quarter depending on Central Parking's profitability and capital necessary to
finance operations and expansion. Central Parking reserves the right, however,
to retain all or a substantial portion of its earnings to finance the operation
and expansion of Central Parking's business. As a result, the future payment of
dividends will depend upon, among other things, the Company's profitability,
capital requirements, financial condition, growth, business opportunities, and
other factors that the Central Parking Board may deem relevant, including
restrictions in any then-existing credit agreement. The Company's existing
credit facility contains certain covenants including those that require the
Company to maintain certain financial ratios, restrict further indebtedness,
and limit the amount of dividends payable; however, the Company does not
believe these restrictions limit its ability to pay currently anticipated cash
dividends. In addition, Central Parking Finance Trust (the "Trust"), a Delaware
statutory business trust, of which all of the common stock is owned by the
Company, issued preferred securities (the "Trust Issued Preferred Securities")
which prohibit the payment of dividends on the Central Parking common stock if
the quarterly distributions on the Trust Issued Preferred Securities are not
made for any reason.
14
15
During fiscal 1998, the Company sold unregistered securities as indicated below:
- -----------------------------------------------------------------------------------------------------------------------------
Description Names or Number/Title Date of Consideration/ Exemption from
of Class of of Shares Transaction Terms of Registration Claimed
Transaction Recipients of Transferred Conversion
Unregistered
Securities
- -----------------------------------------------------------------------------------------------------------------------------
Acquisition Eddie W. 8,589 April 1, 1998 Substantially all of the Shares were issued under
of Turner 8,253 assets of Turner Parking, Section 4(2) of the
Turner Greg Martin Common System Inc. Securities Act to the
Stock Purchase price: $ 3.8 million owner(s) of the business
purchased by the Company.
- -----------------------------------------------------------------------------------------------------------------------------
Acquisition Continental 52,631 March 30, The remaining 50% of the Shares were issued under
of Group, Inc. Common 1998 common stock of CPS of Section 4(2) of the
CPS of Stock Louisiana. This company was Securities Act to the
Louisiana previously operated as a joint owner(s) of the business
venture, of which Central purchased by the Company.
Parking owned 50%. Purchase
price: $2.5 million.
- -----------------------------------------------------------------------------------------------------------------------------
Acquisition M. John 54,358 July 1, 1998 Substantially all of the Shares were issued under
of Knippel Common assets of Sterling Parking, Section 4(2) of the
Sterling Stock Inc. Purchase price: $4.3 Securities Act to the
Parking million. owner(s) of the business
purchased by the Company.
- -----------------------------------------------------------------------------------------------------------------------------
Convertible Institutional 4,400,000 March 18, 5 1/4% Convertible Trust Issued Shares were issued under
Trust Issued Investors Convertible 1998 Preferred Securities ("TIPS") Section 4(2)/144 A
Preferred Trust Issued convertible into shares of of the Securities Act
Securities Preferred Company Common stock at the to the following
Securities rate of 0.4545 shares of Underwriters:
Company Common Stock per share Bear, Sterns & Co, Inc.
of TIPS J.C. Bradford & Co.
Aggregate offering paid: William Blair & Company
$110 million Nationsbanc Montgomery
Aggregate underwriting Securities LLC
discounts and expenses: Sun Trust Equitable
$3.5 million Securities
- -----------------------------------------------------------------------------------------------------------------------------
15
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ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
The information set forth under the caption "Five Year Selected Consolidated
Financial Data " in the Company's Annual Report to Shareholders for the fiscal
year ended September 30, 1998 is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information set forth under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in the Company's
Annual Report to Shareholders for the fiscal year ended September 30, 1998 is
incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information set forth under the captions "Independent Auditors' Report",
"Consolidated Balance Sheets", "Consolidated Statements of Earnings",
"Consolidated Statements of Shareholders' Equity", "Consolidated Statements of
Cash Flows", and "Notes to Consolidated Financial Statements" in the Company's
Annual Report to Shareholders for the fiscal year ended September 30, 1998 is
incorporated herein by reference.
The Company's unaudited operating results for each fiscal quarter within the two
most recent fiscal years, as set forth under the caption "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in the
Company's Annual Report to Shareholders for the fiscal year ended September 30,
1998, is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
16
17
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
Information concerning this Item is incorporated by reference to the Company's
definitive proxy materials for the Company's 1999 Annual Meeting of
Shareholders.
ITEM 11. EXECUTIVE COMPENSATION
Information concerning this Item is incorporated by reference to the Company's
definitive proxy materials for the Company's 1999 Annual Meeting of
Shareholders.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information concerning this Item is incorporated by reference to the Company's
definitive proxy materials for the Company's 1999 Annual Meeting of
Shareholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information concerning this Item is incorporated by reference to the Company's
definitive proxy materials for the Company's 1999 Annual Meeting of
Shareholders.
17
18
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K
(a)(1) Financial Statements
The following financial statements and related notes of the Company contained in the Company's
Annual Report to Shareholders for the fiscal year ended September 30, 1998 are incorporated
herein by reference and are included in Exhibit 13.
Independent Auditors' Report......................................................................
Consolidated Balance Sheets -- September 30, 1997 and 1998.........................................
Consolidated Statements of Earnings -- Fiscal Years Ended September 30, 1996,
1997, and 1998....................................................................................
Consolidated Statement of Shareholders' Equity -- Fiscal Years Ended September 30, 1996, 1997,
and 1998..........................................................................................
Consolidated Statements of Cash Flows -- Fiscal Years Ended September 30, 1996, 1997, and 1998....
Notes to Consolidated Financial Statements........................................................
(a)(2) Financial Statement Schedules
None
Financial statement schedules have been omitted because they are not applicable or because the
required information is otherwise furnished.
(a)(3) Exhibits
Financial Data Schedule (EDGAR Filing Only)
27. Financial Data Schedule (EDGAR Filing Only)
The exhibits listed in the Index to Exhibits, which appears on pages E-__ through E-___ of this
Form 10-K, are incorporated herein by reference or filed as part of this Form 10-K.
(b) Reports on Form 8-K
- In relation to the announcement of the Allright Merger, the Company filed a current report
on form 8-K, dated September 21, 1998, incorporating the text of the press release.
18
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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: December 23, 1998 By: /s/ Stephen A. Tisdell
--------------------- ----------------------
Stephen A. Tisdell
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/ Monroe J. Carell, Jr. December 23, 1998
- --------------------------------- Chairman of the Board, -------------------------------
Monroe J. Carell, Jr. Chief Executive Officer
and Director
/s/ James H. Bond December 23, 1998
- --------------------------------- President & Chief -------------------------------
James H. Bond Operating Officer
and Director
/s/ Stephen A. Tisdell December 23, 1998
- --------------------------------- Chief Financial Officer -------------------------------
Stephen A. Tisdell (Principal Financial and
Accounting Officer)
/s/ John W. Eakin December 23, 1998
- --------------------------------- Director -------------------------------
John W. Eakin
/s/ Edward G. Nelson December 23, 1998
- --------------------------------- Director -------------------------------
Edward G. Nelson
/s/ William C. O'Neil, Jr. December 23, 1998
- --------------------------------- Director -------------------------------
William C. O'Neil, Jr.
/s/ Cecil Conlee December 23, 1998
- --------------------------------- Director -------------------------------
Cecil Conlee
/s/ Lowell Harwood December 23, 1998
- --------------------------------- Director -------------------------------
Lowell Harwood
/s/ Lewis Katz December 23, 1998
- --------------------------------- Director -------------------------------
Lewis Katz
/s/ P.E. Sadler December 23, 1998
- --------------------------------- Director -------------------------------
P.E. Sadler
19
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EXHIBIT INDEX
EXHIBIT PAGE
NUMBER DOCUMENT NUMBER
- ------- -------- ------
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 (a) 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 filed on
October 21, 1998).
(b) 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 Amended and Restated Charter of the Registrant (Incorporated by
reference to Exhibit 3.1 to the Company's Registration Statement
No. 33-95640 on Form S-1.)
3.2 Amended and Restated Bylaws of the Registrant (Incorporated by
reference to Exhibit 3.2 to the Company's Registration Statement
No. 33-95640 on Form S-1.)
4 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 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 2.1 to the
Company's Registration Statement No. 333-66081 filed on October
21, 1998).
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 Trsutee (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 as of March 18, 1998
by the Registrant (incorporated by reference to Exhibit 4.9 to
the Registrant's Registration Statement No.
333-52497 on Form S-3).
10.1 Executive Compensation Plans and Arrangements
(a) 1997 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.)
20
21
Page
----
(b) 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.)
(c) 1997 Restricted Stock Plan (Incorporated by reference to
Exhibit 10.5.1 to the Company's Registration Statement No.
33-95640 on Form S-1.)
(d) 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.)
(e) 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.)
(f) 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.)
(g) 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.)
(h) 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.)
(i) 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.)
(j) 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)
(k) 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.)
(l) Deferred Stock Unit Plan. E-1
10.2 1997 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.)
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 Central Parking System, Inc. Profit Sharing Plan, as amended
(Incorporated by reference to Exhibit 10.6 to the Company's
Registration Statement No. 33-95640 on Form S-1.)
10.5 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.)
10.6 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.)
10.7 Form of Management Contract (Incorporated by reference to Exhibit
10.14 to the Company's Registration Statement No. 33-95640 on
Form S-1.)
10.8 Form of Lease (Incorporated by reference to Exhibit 10.15 to the
Company's Registration Statement No. 33-95640 on Form S-1.)
21
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10.9 1998 Employment Stock Purchase Plan (Incorporated by reference to
Exhibit 10.16 to the Company's Registration Statement No.
33-95640 on Form S-1.)
10.10 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.)
10.11 Form of $300 million Senior Credit Facility dated February 11,
1998 by and among various banks with Nationsbank Montgomery
Securities, Inc., Charlotte, as Agent, and Central Parking
Corporation and affiliates (Incorporated by reference to Exhibit
2.1 to the Company's Quarterly Report on Form 10-Q for the
quarter ended on December 31, 1997)
10.13 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. 333-23869 on Form S-3)
10.14 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).
10.15 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).
10.16 Form of Transaction Support Agreement by certain stockholders 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).
10.17 Best efforts commitment letter dated September 9, 1998 from
NationsBank Montgomery Securities LLC for a credit facility of
up to $400 million (Incorporated by reference to Exhibit 10.4 to
the Company's Registration Statement No. 333-66081 filed on
October 23, 1998).
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EXHIBIT PAGE
NUMBER DOCUMENT NUMBER
- ------- -------- ------
13 Portions of the Annual Report to Shareholders E-10
21 Subsidiaries of the Registrant E-44
23 Consent of KPMG Peat Marwick LLP E-54
27.1 Financial Data Schedule
27.2 Financial Data Schedule (Restated)
23