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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 1-13647
--------------------
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 73-1356520
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5330 East 31st Street, Tulsa, Oklahoma 74135
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (918) 660-7700
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_____
The number of shares outstanding of the registrant's Common Stock as of
July 31, 2002 was 24,492,670.
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DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
FORM 10-Q
CONTENTS
Page
----
PART I - FINANCIAL INFORMATION.................................................3
ITEM 1. FINANCIAL STATEMENTS.......................................3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.............14
ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK.............................21
PART II - OTHER INFORMATION...................................................21
ITEM 1. LEGAL PROCEEDINGS.........................................21
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.......22
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K..........................23
SIGNATURES....................................................................25
FACTORS AFFECTING FORWARD-LOOKING STATEMENTS
Some of the statements contained herein under "Management's Discussion and
Analysis of Financial Condition and Results of Operations" may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Although Dollar Thrifty Automotive Group, Inc.
believes such forward-looking statements are based on reasonable assumptions,
such statements are not guarantees of future performance and certain factors
could cause results to differ materially from current expectations. These
factors include: price and product competition; economic and competitive
conditions in markets and countries where our customers reside and where our
companies and their franchisees operate; airline travel patterns; changes in
capital availability or cost; costs and other terms related to the acquisition
and disposition of automobiles and conducting business; and certain regulatory
and environmental matters. Should one or more of these risks or uncertainties,
among others, materialize, actual results could vary materially from those
estimated, anticipated or projected. Dollar Thrifty Automotive Group, Inc.
undertakes no obligation to update or revise forward-looking statements to
reflect changed assumptions, the occurrence of unanticipated events or changes
to future operating results over time.
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors and Stockholders of
Dollar Thrifty Automotive Group, Inc.:
We have reviewed the accompanying consolidated balance sheet of Dollar Thrifty
Automotive Group, Inc. and subsidiaries as of June 30, 2002, and the related
consolidated statements of income for the three-month and six-month periods
ended June 30, 2002 and 2001, and the condensed consolidated statements of cash
flows for the six-month periods ended June 30, 2002 and 2001. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States of America, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to such condensed consolidated financial statements for them to be in
conformity with accounting principles generally accepted in the United States of
America.
We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet of
Dollar Thrifty Automotive Group, Inc. and subsidiaries as of December 31, 2001,
and the related consolidated statements of income, stockholders' equity, and
cash flows for the year then ended (not presented herein); and in our report
dated February 8, 2002, except for Note 18, as to which the date is February 26,
2002, we expressed an unqualified opinion on those consolidated financial
statements.
DELOITTE & TOUCHE LLP
Tulsa, Oklahoma
July 24, 2002
3
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001
- -----------------------------------------------------------------------------------------------------------
(In Thousands Except Per Share Data)
Three Months Six Months
Ended June 30, Ended June 30,
-------------------------- --------------------------
(Unaudited)
2002 2001 2002 2001
------------ ------------ ------------ ------------
REVENUES:
Vehicle rentals $ 239,946 $ 226,774 $ 435,479 $ 424,844
Vehicle leasing 43,509 44,855 75,307 81,432
Fees and services 15,391 15,094 28,484 27,967
Other 3,622 3,603 5,955 7,237
------------ ------------ ------------ ------------
Total revenues 302,468 290,326 545,225 541,480
------------ ------------ ------------ ------------
COSTS AND EXPENSES:
Direct vehicle and operating 109,063 103,683 196,697 195,157
Vehicle depreciation and lease charges, net 92,583 96,166 164,792 172,195
Selling, general and administrative 48,623 43,541 90,635 89,007
Interest expense, net of interest income 23,432 23,544 43,278 43,170
Amortization of goodwill - 1,545 - 3,089
------------ ------------ ------------ ------------
Total costs and expenses 273,701 268,479 495,402 502,618
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAXES 28,767 21,847 49,823 38,862
INCOME TAX EXPENSE 11,227 9,430 20,150 17,236
------------ ------------ ------------ ------------
NET INCOME $ 17,540 $ 12,417 $ 29,673 $ 21,626
============ ============ ============ ============
EARNINGS PER SHARE:
Basic $ 0.72 $ 0.52 $ 1.23 $ 0.90
============ ============ ============ ============
Diluted $ 0.70 $ 0.50 $ 1.19 $ 0.88
============ ============ ============ ============
See notes to consolidated financial statements.
4
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2002 AND DECEMBER 31, 2001
- --------------------------------------------------------------------------------------------
(In Thousands Except Share and Per Share Data)
June 30, December 31,
2002 2001
-------------- --------------
(Unaudited)
ASSETS:
Cash and cash equivalents $ 87,042 $ 37,532
Restricted cash and investments 61,770 48,090
Receivables, net 233,746 197,224
Prepaid expenses and other assets 69,188 64,946
Revenue-earning vehicles, net 2,480,449 1,524,909
Property and equipment, net 93,596 101,231
Income taxes receivable 34,460 8,149
Software, net 16,663 16,552
Goodwill, net 165,158 165,059
-------------- --------------
$ 3,242,072 $ 2,163,692
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable $ 25,635 $ 25,741
Accrued liabilities 173,358 112,626
Deferred income tax liability 80,919 22,132
Public liability and property damage 31,898 23,139
Debt and other obligations 2,439,491 1,516,733
-------------- --------------
Total liabilities 2,751,301 1,700,371
-------------- --------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value:
Authorized 10,000,000 shares; none outstanding - -
Common stock, $.01 par value:
Authorized 50,000,000 shares; issued and outstanding
24,482,007 and 24,310,816, respectively 245 243
Additional capital 711,918 708,962
Accumulated deficit (207,945) (237,618)
Accumulated other comprehensive loss (13,447) (8,266)
-------------- --------------
Total stockholders' equity 490,771 463,321
-------------- --------------
$ 3,242,072 $ 2,163,692
============== ==============
See notes to consolidated financial statements.
5
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2002 AND 2001
- --------------------------------------------------------------------------------------------
(In Thousands)
Six Months
Ended June 30,
---------------------------------
(Unaudited)
2002 2001
-------------- --------------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 327,636 $ 271,115
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Revenue-earning vehicles:
Purchases (2,289,260) (2,044,069)
Proceeds from sales 1,107,071 1,098,851
Net change in restricted cash and investments (13,680) (9,460)
Property, equipment and software:
Purchases (2,683) (17,031)
Proceeds from sales 27 483
Acquisition of business, net of cash acquired (38) -
-------------- --------------
Net cash used in investing activities (1,198,563) (971,226)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt and other obligations:
Proceeds 4,003,496 5,251,584
Payments (3,080,803) (4,484,265)
Issuance of common shares 2,832 1,382
Financing issue costs (5,088) (4,701)
-------------- --------------
Net cash provided by financing activities 920,437 764,000
-------------- --------------
CHANGE IN CASH AND CASH EQUIVALENTS 49,510 63,889
CASH AND CASH EQUIVALENTS:
Beginning of period 37,532 38,493
-------------- --------------
End of period $ 87,042 $ 102,382
============== ==============
SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES:
Direct financing and sales-type lease receivables $ 66,128 $ 28,149
============== ==============
Deferred income on sales-type lease receivables $ 171 $ 198
============== ==============
Acquisition of franchises $ - $ 422
============== ==============
See notes to consolidated financial statements.
6
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2002 and 2001
- --------------------------------------------------------------------------------
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of
Dollar Thrifty Automotive Group, Inc. ("DTG") and its subsidiaries. DTG's
significant wholly owned subsidiaries include Dollar Rent A Car Systems,
Inc. ("Dollar") and Thrifty, Inc. Thrifty, Inc. is the parent company to
Thrifty Rent-A-Car System, Inc. which is the parent company to Thrifty
Canada Ltd. ("TCL") (individually and collectively referred to as
"Thrifty"). The term the "Company" is used to refer to DTG and
subsidiaries, individually or collectively, as the context may require.
The accounting policies set forth in Note 2 to the consolidated financial
statements contained in the Form 10-K filed with the Securities Exchange
Commission on March 20, 2002 have been followed in preparing the
accompanying consolidated financial statements.
The consolidated financial statements and notes thereto for the interim
periods included herein have not been audited by independent public
accountants. In the Company's opinion, all adjustments (which include only
normal recurring adjustments) necessary for a fair presentation of the
results of operations for the interim periods have been made. Results for
interim periods are not necessarily indicative of results for a full year.
Certain reclassifications have been made in the three-month and six-month
periods ended June 30, 2001 consolidated financial statements to conform to
the classifications used in the three-month and six-month periods ended
June 30, 2002 financial statements.
2. VEHICLE DEPRECIATION AND LEASE CHARGES, NET
Vehicle depreciation and lease charges include the following (in
thousands):
Three Months Six Months
Ended June 30, Ended June 30,
---------------------- ----------------------
2002 2001 2002 2001
---------- ---------- ---------- ----------
Depreciation of revenue-earning vehicles, net $ 91,108 $ 88,598 $ 161,336 $ 157,702
Rents paid for vehicles leased 1,475 7,568 3,456 14,493
---------- ---------- ---------- ----------
$ 92,583 $ 96,166 $ 164,792 $ 172,195
========== ========== ========== ==========
7
3. EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income by the weighted
average number of common shares outstanding during the period. Diluted
earnings per share is based on the combined weighted average number of
common shares and dilutive potential common shares outstanding which
include, where appropriate, the assumed exercise of options. In computing
diluted earnings per share, the Company has utilized the treasury stock
method.
The computation of weighted average common and common equivalent shares
used in the calculation of basic and diluted earnings per share ("EPS") is
shown below (in thousands except share and per share data):
Three Months Six Months
Ended June 30, Ended June 30,
-------------------------- --------------------------
2002 2001 2002 2001
------------ ------------ ------------ ------------
Net income $ 17,540 $ 12,417 $ 29,673 $ 21,626
============ ============ ============ ============
Basic EPS:
Weighted average common shares 24,257,511 24,079,634 24,205,672 24,080,306
============ ============ ============ ============
Basic EPS $ 0.72 $ 0.52 $ 1.23 $ 0.90
============ ============ ============ ============
Diluted EPS:
Weighted average common shares 24,257,511 24,079,634 24,205,672 24,080,306
Shares contingently issuable:
Stock options 499,117 515,406 302,571 391,789
Performance awards 120,300 37,533 120,300 37,533
Shares held for compensation plans 165,922 168,311 165,960 145,132
Director compensation shares deferred 45,665 29,128 43,833 26,639
------------ ------------ ------------ ------------
Shares applicable to diluted 25,088,515 24,830,012 24,838,336 24,681,399
============ ============ ============ ============
Diluted EPS $ 0.70 $ 0.50 $ 1.19 $ 0.88
============ ============ ============ ============
At June 30, 2002 and 2001, options to purchase 1,051,416 and 42,900 shares
of common stock, respectively, were outstanding but were not included in
the computation of diluted earnings per share because the exercise price
was greater than the average market price of the common shares.
8
4. GOODWILL
In June 2001, the Financial Accounting Standards Board ("FASB") approved
the issuance of Statement of Financial Accounting Standard ("SFAS") No.
141, "Business Combinations", and SFAS No. 142, "Goodwill and Other
Intangible Assets". SFAS No. 141 requires that the purchase method of
accounting be used for all business combinations initiated after June 30,
2001. SFAS No. 141 also specifies the types of acquired intangible assets
that are required to be recognized and reported separately from goodwill
and those acquired intangible assets that are required to be included in
goodwill. Effective January 1, 2002, SFAS No. 142 requires that goodwill no
longer be amortized, but instead tested for impairment at least annually.
SFAS No. 142 also requires recognized intangible assets to be amortized
over their respective estimated useful lives and reviewed for impairment.
Any recognized intangible asset determined to have an indefinite useful
life will not be amortized, but instead tested for impairment in accordance
with the standard until its life is determined to no longer be indefinite.
The Company adopted the provisions of SFAS No. 141 and SFAS No. 142 as
required on January 1, 2002, with the exception of the earlier adoption of
the requirement to use the purchase method of accounting for all business
combinations initiated after June 30, 2001. On January 1, 2002, the Company
ceased amortization of goodwill. During the first quarter of 2002, the
Company completed its transitional goodwill impairment test in accordance
with SFAS No. 142 for each reporting unit as of January 1, 2002, and
determined that the fair values of the reporting units exceeded their
respective carrying amounts. Accordingly, the initial implementation of
this standard did not result in an impairment of goodwill. Additionally,
during the second quarter of 2002, the Company completed the annual
impairment test of goodwill for 2002 and determined that the fair values of
the reporting units exceeded their respective carrying amounts and goodwill
continues not to be impaired. The Company will continue to perform annual
impairment testing during the second quarter of each year, and interim
testing will be performed should an event occur or circumstances indicate
that the carrying amount of goodwill may be impaired.
The changes in the carrying amount of goodwill for the three months and six
months ended June 30, 2002, are as follows (in thousands):
Reporting Units
-------------------------------------------------------
Dollar Thrifty Other Total
------------ ------------ ------------ ------------
Balance as of January 1, 2002 $ 132,365 $ 32,694 $ - $ 165,059
Goodwill through acquisitions during year 50 - - 50
Effect of change in rates used for
foreign currency translation - 49 - 49
------------ ------------ ------------ ------------
Balance as of June 30, 2002 $ 132,415 $ 32,743 $ - $ 165,158
============ ============ ============ ============
9
The following table provides the comparable effects of adoption of SFAS No.
142 (in thousands except per share data):
Three Months Six Months
Ended June 30, Ended June 30,
-------------------------- --------------------------
2002 2001 2002 2001
------------ ------------ ------------ ------------
Reported net income $ 17,540 $ 12,417 $ 29,673 $ 21,626
Add back: goodwill amortization,
net of income tax expense - 1,407 - 2,806
------------ ------------ ------------ ------------
Adjusted net income $ 17,540 $ 13,824 $ 29,673 $ 24,432
============ ============ ============ ============
Basic earnings per share:
Reported net income $ 0.72 $ 0.52 $ 1.23 $ 0.90
Goodwill amortization, net of
income tax expense - 0.06 - 0.12
------------ ------------ ------------ ------------
Adjusted net income $ 0.72 $ 0.58 $ 1.23 $ 1.02
============ ============ ============ ============
Diluted earnings per share:
Reported net income $ 0.70 $ 0.50 $ 1.19 $ 0.88
Goodwill amortization, net of
income tax expense - 0.06 - 0.11
------------ ------------ ------------ ------------
Adjusted net income $ 0.70 $ 0.56 $ 1.19 $ 0.99
============ ============ ============ ============
5. DEBT AND OTHER OBLIGATIONS
Debt and other obligations as of June 30, 2002 and December 31, 2001
consist of the following (in thousands):
June 30, December 31,
2002 2001
------------- -------------
Vehicle Debt and Obligations:
Asset backed notes, net of discount $ 1,549,786 $ 1,199,721
Conduit 325,000 -
Commercial paper, net of discount 271,725 128,271
Vehicle manufacturer line of credit 128,124 113,086
Limited partner interest in limited partnership 75,707 51,442
Other vehicle debt 89,149 24,213
------------- -------------
Total debt and other obligations $ 2,439,491 $ 1,516,733
============= =============
Prior to December 31, 2001, the Company received a waiver from compliance
with certain of its financial covenants through January 31, 2002 under the
Revolving Credit Facility (the "Revolver"). In early January 2002, the
Company completed an amendment and waiver affecting certain of its
financial covenants through January 2003, which included limiting
expenditures for non-vehicle capital assets and for franchise acquisitions
and the usage of the Revolver to a maximum of $190 million during the
amendment and waiver period. The Company had letters of credit outstanding
under the Revolver of approximately $144.2 million and no working capital
borrowings at June 30, 2002.
10
On January 31, 2002, the Variable Funding Note Purchase Facility (the
"Conduit") was renewed to December 12, 2002 at a maximum capacity of $275
million. On April 16, 2002, an additional bank entered into the Conduit,
increasing the available financing from $275 million to $325 million.
On February 26, 2002, the Commercial Paper Program was renewed for another
364-day period at a maximum size of $589 million backed by a renewal of the
Liquidity Facility, in the amount of $522 million.
On April 15, 2002, the Company's $25 million bank vehicle lines of credit
were increased to $75 million, which bear interest at rates based on LIBOR
and are renewable annually.
On June 4, 2002, Rental Car Finance Corp. (a consolidated special purpose
financing subsidiary) issued $350 million of asset backed notes (the "2002
Series Notes") to replace maturing asset backed notes and provide for
growth in the Company's fleet. The 2002 Series Notes are floating rate
notes that have a term of three years. In conjunction with the issuance of
the 2002 Series Notes, the Company also entered into an interest rate swap
agreement to convert one-half of this floating rate debt to fixed rate debt
(Note 6).
On June 7, 2002, the Company entered into a $150 million vehicle line of
credit with a finance subsidiary of a vehicle manufacturer, which bears
interest at rates based on the Prime interest rate. At June 30, 2002, there
were no borrowings outstanding under this line of credit.
On June 27, 2002, the Company's vehicle line of credit up to $15 million
was extended and will expire in November 2002.
6. DERIVATIVE FINANCIAL INSTRUMENTS
The Company is exposed to market risks, such as changes in interest rates.
Consequently, the Company manages the financial exposure as part of its
risk management program, by striving to reduce the potentially adverse
effects that the volatility of the financial markets may have on the
Company's operating results. During March 2001, the Company entered into an
interest rate swap agreement ("2001 Swap") to convert the variable interest
rate on $350 million of asset backed notes to a fixed interest rate. The
2001 Swap, which terminates in April 2006, constitutes a cash flow hedge
and satisfies the criteria for hedge accounting. During June 2002, the
Company entered into an interest rate swap agreement ("2002 Swap") to
convert the variable interest rate on $175 million of asset backed notes to
a fixed interest rate. The 2002 Swap, which terminates in August 2005,
constitutes a cash flow hedge and satisfies the criteria for hedge
accounting. The Company reflects these swaps in its statement of financial
position as liabilities at fair market value, which was approximately $20.2
million at June 30, 2002 (Note 8). Deferred gains and losses are recognized
in earnings as an adjustment to interest expense over the same period in
which the related interest payments being hedged are recognized to
earnings. The Company is unable to reasonably estimate the net amount of
the existing deferred income or loss at June 30, 2002 that is expected to
be reclassified into earnings within the next twelve months.
11
7. BUSINESS SEGMENTS
The Company has two reportable segments, Dollar and Thrifty. These
reportable segments are strategic business units that offer different
products and services. They are managed separately based on the fundamental
differences in their operations. The contributions of these segments to
revenues and income before income taxes are summarized below (in
thousands):
For the Three Months
Ended June 30, 2002 Dollar Thrifty Other Total
----------------------------------------- ------------ ------------ ------------ ------------
Revenues $ 215,976 $ 86,134 $ 358 $ 302,468
Income before income taxes $ 23,869 $ 4,898 $ - $ 28,767
For the Three Months
Ended June 30, 2001 Dollar Thrifty Other Total
----------------------------------------- ------------ ------------ ------------ ------------
Revenues $ 221,251 $ 68,795 $ 280 $ 290,326
Income before income taxes $ 17,893 $ 3,970 $ (16) $ 21,847
For the Six Months
Ended June 30, 2002 Dollar Thrifty Other Total
----------------------------------------- ------------ ------------ ------------ ------------
Revenues $ 400,228 $ 144,461 $ 536 $ 545,225
Income before income taxes $ 43,023 $ 6,800 $ - $ 49,823
For the Six Months
Ended June 30, 2001 Dollar Thrifty Other Total
----------------------------------------- ------------ ------------ ------------ ------------
Revenues $ 415,676 $ 125,430 $ 374 $ 541,480
Income before income taxes $ 32,126 $ 6,752 $ (16) $ 38,862
8. COMPREHENSIVE INCOME
Comprehensive income is comprised of the following (in thousands):
Three Months Six Months
Ended June 30, Ended June 30,
-------------------------- --------------------------
2002 2001 2002 2001
------------ ------------ ------------ ------------
Net income $ 17,540 $ 12,417 $ 29,673 $ 21,626
Interest rate swap gain/(loss) (7,774) 4,644 (5,582) 621
Foreign currency translation adjustment 440 289 401 (119)
------------ ------------ ------------ ------------
Comprehensive income $ 10,206 $ 17,350 $ 24,492 $ 22,128
============ ============ ============ ============
12
9. CONTINGENCIES
Various claims and legal proceedings have been asserted or instituted
against the Company, including some purporting to be class actions, and
some which demand large monetary damages or other relief which could result
in significant expenditures. Litigation is subject to many uncertainties,
and the outcome of individual matters is not predictable with assurance.
The Company is also subject to potential liability related to environmental
matters. The Company establishes reserves for litigation and environmental
matters when the loss is probable and reasonably estimable. It is
reasonably possible that the final resolution of some of these matters may
require the Company to make expenditures, in excess of established
reserves, over an extended period of time and in a range of amounts that
cannot be reasonably estimated. The term "reasonably possible" is used
herein to mean that the chance of a future transaction or event occurring
is more than remote but less than likely. Although the final resolution of
any such matters could have a material effect on the Company's consolidated
operating results for the particular reporting period in which an
adjustment of the estimated liability is recorded, the Company believes
that any resulting liability should not materially affect its consolidated
financial position.
*******
13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
DTG owns two separate vehicle rental companies, Dollar and Thrifty. DTG,
Dollar, Thrifty and each of their subsidiaries are individually or collectively
referred to herein as the "Company", as the context may require. The majority of
Dollar's revenue is derived from renting vehicles to customers from
company-owned stores, while the majority of Thrifty's revenue is generated from
leasing vehicles and providing services to franchisees.
Results of Operations
The following table sets forth the percentage of total revenues in the
Company's consolidated statements of income:
Three Months Six Months
Ended June 30, Ended June 30,
------------------------- -------------------------
(Percentage of Revenue)
2002 2001 2002 2001
----------- ----------- ----------- -----------
Revenues:
Vehicle rentals 79.3% 78.1% 79.9% 78.5%
Vehicle leasing 14.4 15.5 13.8 15.0
Fees and services 5.1 5.2 5.2 5.2
Other 1.2 1.2 1.1 1.3
----------- ----------- ----------- -----------
Total revenues 100.0 100.0 100.0 100.0
----------- ----------- ----------- -----------
Costs and expenses:
Direct vehicle and operating 36.1 35.7 36.1 36.0
Vehicle depreciation and lease charges, net 30.6 33.1 30.2 31.8
Selling, general and administrative 16.1 15.0 16.6 16.4
Interest expense, net of interest income 7.7 8.1 8.0 8.0
Amortization of goodwill 0.0 0.6 0.0 0.6
----------- ----------- ----------- -----------
Total costs and expenses 90.5 92.5 90.9 92.8
----------- ----------- ----------- -----------
Income before income taxes 9.5 7.5 9.1 7.2
Income tax expense 3.7 3.2 3.7 3.2
----------- ----------- ----------- -----------
Net income 5.8% 4.3% 5.4% 4.0%
=========== =========== =========== ===========
14
The Company's major sources of revenue are as follows:
Three Months Six Months
Ended June 30, Ended June 30,
-------------------------- --------------------------
(In Thousands)
2002 2001 2002 2001
------------ ------------ ------------ ------------
Vehicle rental revenue:
Dollar $ 207,095 $ 210,270 $ 385,178 $ 395,906
Thrifty 32,851 16,504 50,301 28,938
------------ ------------ ------------ ------------
Total $ 239,946 $ 226,774 $ 435,479 $ 424,844
============ ============ ============ ============
Vehicle leasing revenue:
Dollar $ 3,110 $ 5,053 $ 5,068 $ 9,199
Thrifty 40,399 39,802 70,239 72,233
------------ ------------ ------------ ------------
Total $ 43,509 $ 44,855 $ 75,307 $ 81,432
============ ============ ============ ============
The following table sets forth certain selected operating data of the Company:
Three Months Six Months
Ended June 30, Ended June 30,
-------------------------- --------------------------
U.S. and Canada 2002 2001 2002 2001
------------ ------------ ------------ ------------
Vehicle Rental Data:
(Company-Owned Stores)
Average number of vehicles operated 73,855 76,657 66,467 70,677
Number of rental days 5,554,120 5,661,652 10,068,055 10,587,453
Average revenue per day $ 43.20 $ 40.05 $ 43.25 $ 40.13
Monthly average revenue per vehicle $ 1,083 $ 986 $ 1,092 $ 1,002
Vehicle Leasing Data:
Average number of vehicles leased 31,590 32,393 27,957 29,594
Monthly average revenue per vehicle $ 459 $ 462 $ 449 $ 459
15
Three Months Ended June 30, 2002 Compared with Three Months Ended June 30, 2001
During the second quarter, demand for rental cars was below prior year
levels, with airline traffic about 11% below last year. The rental car industry
has reduced its fleet size in response to lower rental demand, which has allowed
the industry to increase rental rates.
Revenues
Total revenues for the quarter ended June 30, 2002 increased $12.1 million,
or 4.2%, to $302.5 million compared to the second quarter of 2001. The increase
in total revenue was primarily due to a 5.8% increase in vehicle rental revenue
and a 2.0% increase in fees and services revenue partially offset by a 3.0%
decrease in vehicle leasing revenue.
The Company's vehicle rental revenue for the second quarter of 2002 was
$240.0 million, a $13.2 million increase ($16.4 million increase at Thrifty
offset by a $3.2 million decrease at Dollar) from the second quarter of 2001.
The increase in vehicle rental revenue at Thrifty was due to the shift of
several locations from franchised operations to corporate operations. The
decline in vehicle rental revenue at Dollar was the result of a 9.0% reduction
in rental days, partially offset by an 8.2% increase in revenue per day.
Vehicle leasing revenue for the second quarter of 2002 was $43.5 million, a
$1.3 million decrease ($1.9 million decrease at Dollar and a $0.6 million
increase at Thrifty) from the second quarter of 2001. This decline was due to a
2.5% decline in the average lease fleet primarily related to the shift of
several locations from franchised operations to corporate operations, partially
offset by an increase in fleet units leased to existing franchisees.
Fees and services revenue increased 2.0% to $15.4 million as compared to
the second quarter of 2001. This growth was due to a $0.6 million increase at
Thrifty partially offset by a $0.3 million decrease at Dollar.
Expenses
Total expenses increased 1.9% from $268.5 million in the second quarter of
2001 to $273.7 million in the second quarter of 2002. This increase was due
primarily to a $16.4 million, or 25.3% increase at Thrifty offset by an $11.3
million, or 5.5% decrease at Dollar. Total expenses as a percentage of revenue
decreased to 90.5% in 2002 from 92.5% in 2001.
Direct vehicle and operating expenses for the second quarter of 2002
increased $5.4 million, or 5.2%, over the 2001 second quarter, comprised of a
$2.0 million increase at Dollar and a $3.4 million increase at Thrifty. The
increase was primarily due to higher costs related to the operation of
additional corporate stores that were previously operated by franchisees at both
Dollar and Thrifty and to higher insurance costs, partially offset by reduced
bad debt expenses related to franchisee receivables at Thrifty.
Net vehicle depreciation expense and lease charges decreased $3.6 million,
or 3.7%, in the second quarter of 2002 as compared to the second quarter of
2001, consisting of a $10.9 million decrease at Dollar offset by a $7.3 million
increase at Thrifty. Lease charges, for vehicles leased from third parties,
decreased $6.1 million to $1.5 million for the second quarter of 2002 due to a
decrease in the number of vehicles leased. Vehicle depreciation expense
increased $3.8 million, or 4.0%, due to a 2.6% increase in depreciable fleet and
a 1.3% increase in the average depreciation rate. Net vehicle gains on the
disposal of non-program vehicles were $7.3 million for the second quarter of
2002 and $6.0 million for the second quarter of 2001.
Selling, general and administrative expenses of $48.6 million for the
second quarter of 2002 increased 11.7% from $43.5 million in the second quarter
of 2001 comprised primarily of a $4.8 million increase at Thrifty and a $0.1
million increase at Dollar. This increase was due primarily to higher accruals
for incentive compensation plans, partially offset by savings from staff
reductions and other general and administrative expenses.
16
Net interest expense decreased $0.1 million primarily due to lower interest
rates, partially offset by higher letter of credit fees and higher average
vehicle debt in the second quarter of 2002 as compared to the second quarter of
2001.
Amortization of goodwill was discontinued effective January 1, 2002, due to
the implementation of SFAS No. 142, resulting in no goodwill amortization
expense being recorded for the three months ended June 30, 2002 compared to $1.5
million for the three months ended June 30, 2001.
The effective tax rate for the second quarter of 2002 was 39.0% compared to
43.2% for the second quarter of 2001. This decrease was due to a change in the
relationship between permanent differences, including goodwill amortization, and
Canadian operations to income before income taxes. The effective tax rate
differs from the U.S. statutory rate for 2002 due primarily to state and local
taxes and losses relating to TCL for which no benefit was recorded.
Interim reporting requirements for applying separate, annual effective
income tax rates to U.S. and Canadian operations, combined with the seasonal
impact of Canadian operations, will cause significant variations in the
Company's quarterly consolidated effective income tax rates.
Operating Results
Income before income taxes increased $6.9 million, or 31.7% to $28.8
million for the second quarter of 2002. This increase consisted of a $6.0
million increase at Dollar and a $0.9 million increase at Thrifty.
Six Months Ended June 30, 2002 Compared with Six Months Ended June 30, 2001
Revenues
Total revenues for the six months ended June 30, 2002 increased $3.7
million, or 0.7%, to $545.2 million compared to the six months ended June 30,
2001. The growth in total revenue was due to an increase in vehicle rental
revenue of 2.5% and an increase in fees and services revenue of 1.8%,
substantially offset by a decrease in vehicle leasing revenue of 7.5%.
The Company's vehicle rental revenue for the first half of 2002 was $435.5
million, a $10.6 million increase (a $21.3 million increase at Thrifty offset by
a $10.7 million decrease at Dollar) from the first half of 2001. The growth in
vehicle rental revenue at Thrifty was the result of the shift of several
locations from franchised operations to corporate operations. The decline in
vehicle rental revenue at Dollar was the result of a 10.0% decrease in rental
days, partially offset by an 8.1% increase in revenue per day.
Vehicle leasing revenue for the first half of 2002 was $75.3 million, a
$6.1 million decrease ($4.1 million at Dollar and $2.0 million at Thrifty) from
the first half of 2001. This decline in vehicle leasing revenue was due to a
5.5% decline in the average lease fleet primarily related to the shift of
several locations from franchised operations to corporate operations, combined
with a 2.2% decline in the average lease rate.
Fees and services revenue increased 1.8% to $28.5 million as compared to
the first half of 2001. This growth was due to a $1.2 million increase at
Thrifty offset by $0.7 million decrease at Dollar.
Expenses
Total expenses decreased 1.4% from $502.6 million in the first half of 2001
to $495.4 million in the first half of 2002. This decrease was due primarily to
a $26.3 million, or 6.9% decrease at Dollar and a $19.0 million, or 16.0%
increase at Thrifty. Total expenses as a percentage of revenue declined to 90.9%
in 2002 from 92.8% in 2001.
17
Direct vehicle and operating expenses for the first half of 2002 increased
$1.5 million, or 0.8%, compared to the first half of 2001, comprised of a $5.0
million increase at Thrifty offset by a $3.5 million decrease at Dollar. The
increase was primarily due to higher costs related to the operation of
additional corporate stores that were previously operated by franchisees and to
higher insurance costs, partially offset by lower vehicle related costs at
Dollar and reduced bad debt expenses related to franchisee receivables at
Thrifty.
Net vehicle depreciation expense and lease charges decreased $7.4 million,
or 4.3%, in the first half of 2002 as compared to the first half of 2001,
consisting of a $17.1 million decrease at Dollar offset by a $9.7 million
increase at Thrifty. Lease charges, for vehicles leased from third parties,
decreased $11.0 million due to a decrease in the number of vehicles leased in
the first half of 2002. Vehicle depreciation expense increased $5.2 million, or
3.1%, due to a 3.3% increase in the average depreciation rate. Net vehicle gains
on the disposal of non-program vehicles were $11.4 million for the first half of
2002 and $9.8 million for the first half of 2001.
Selling, general and administrative expenses of $90.6 million for 2002
increased 1.8% from $89.0 million in 2001, comprised of a $3.9 million increase
at Thrifty offset by a $2.4 million decrease at Dollar. This increase was due
primarily to higher accruals for incentive compensation plans, partially offset
by savings from staff reductions, lower sales and marketing costs, and other
general and administrative expenses.
Net interest expense increased $0.1 million, or 0.3%, to $43.3 million in
the first half of 2002 primarily due to higher letter of credit fees and higher
average vehicle debt, substantially offset by lower interest rates.
For the first half of 2002, no goodwill amortization expense was recorded
compared to $3.1 million for the first half of 2001, due to the implementation
of SFAS No. 142 effective January 1, 2002.
The effective tax rate for the first half of 2002 was 40.4% compared to
44.4% for the first half of 2001. This decrease was due to a change in the
relationship between permanent differences, including goodwill amortization, and
Canadian operations to income before income taxes. For the first half of 2002,
the effective rate differs from the U.S. statutory rate due primarily to state
and local taxes and losses relating to TCL for which no benefit was recorded.
Operating Results
The Company had income before income taxes of $49.8 million for the first
half of 2002 as compared to $38.9 million for the first half of 2001, a 28.2%
increase. This increase consisted of a $10.9 million increase at Dollar and no
change at Thrifty.
Seasonality
The Company's business is subject to seasonal variations in customer
demand, with the summer vacation period representing the peak season for vehicle
rental. During the peak season, the Company increases its rental fleet and
workforce to accommodate increased rental activity. As a result, any occurrence
that disrupts travel patterns during the summer period could have a material
adverse effect on the annual performance of the Company. The first and fourth
quarters for the Company's rental operations are generally the weakest, when
there is limited leisure travel and a greater potential for adverse weather
conditions. Many of the operating expenses such as rent, general insurance and
administrative personnel are fixed and cannot be reduced during periods of
decreased rental demand.
18
Liquidity and Capital Resources
The Company's primary cash requirements are for the acquisition of
revenue-earning vehicles and to fund its U.S. and Canadian operations. For the
six months ended June 30, 2002, cash provided by operating activities was $327.6
million.
Cash used in investing activities was $1.2 billion. The principal use of
cash in investing activities was the purchase of revenue-earning vehicles, which
totaled $2.3 billion ($1.4 billion at Dollar and $900 million at Thrifty) which
was partially offset by $1.1 billion ($700 million at Dollar and $400 million at
Thrifty) in proceeds from the sale of used revenue-earning vehicles. The
Company's need for cash to finance vehicles is highly seasonal and typically
peaks in the second and third quarters of the year when fleet levels build to
meet seasonal rental demand. The Company expects to continue to fund its
revenue-earning vehicles with cash provided from operations and increased
secured vehicle financing. Restricted cash and investments increased $13.7
million for the six months ended June 30, 2002. Restricted cash and investments
are restricted for the acquisition of revenue-earning vehicles and other
specified uses described under the section discussing asset backed notes. The
Company also used cash for non-vehicle capital expenditures of $2.7 million.
These expenditures consist primarily of airport facility improvements for the
Company's rental locations and investments in information technology equipment
and systems.
The Company has significant requirements for surety bonds and letters of
credit to support its insurance programs and airport concession commitments. At
June 30, 2002, the insurance companies had issued approximately $46.4 million in
surety bonds to secure these obligations.
Asset Backed Notes and Conduit
The asset backed note program at June 30, 2002 was comprised of $1.55
billion in asset backed notes with maturities ranging from 2002 to 2006.
Borrowings under the asset backed notes are secured by eligible vehicle
collateral. Asset backed notes totaling $1.342 billion bear interest at fixed
rates ranging from 4.77% to 7.10%, including the 2001 Series Notes of $350
million and one-half of the 2002 Series Notes of $350 million, which are
floating rate notes swapped to fixed rates. Asset backed notes totaling $208.4
million bear interest at floating rates ranging from LIBOR plus 0.64% to LIBOR
plus 1.05%. At June 30, 2002, the Company had $325 million available under its
asset backed Variable Funding Note Purchase Facility.
Commercial Paper Program and Liquidity Facility
Effective February 26, 2002, the Commercial Paper Program was renewed for
another 364-day period at a maximum size of $589 million, backed by a renewal of
the Liquidity Facility in the amount of $522 million. The Commercial Paper
Program and the Liquidity Facility are renewable annually. Borrowings under the
Commercial Paper Program are secured by eligible vehicle collateral and bear
interest based on market-dictated commercial paper rates. At June 30, 2002, the
Company had $271.7 million in commercial paper outstanding.
Other Obligations and Vehicle Debt
At June 30, 2002, a vehicle manufacturer line of credit included borrowings
of $128.1 million, which is collateralized by the related vehicles. This line of
credit was renewed in July 2002 and bears interest at rates based on LIBOR.
Thrifty has financed its Canadian vehicle fleet through a five-year fleet
securitization partnership program, which began in February 1999. The accounts
of this partnership are appropriately consolidated with the company. Under this
program, Thrifty can obtain vehicle financing up to CND$150 million funded
through an unrelated bank commercial paper conduit. At June 30, 2002, Thrifty
had approximately CND$114.8 million (US$75.7 million) funded under this program.
19
At June 30, 2002, the Company had borrowings of $70.7 million under $75
million of bank vehicle lines of credit, which are collateralized by the
vehicles financed under the facilities. These lines of credit bear interest at
rates based on LIBOR and are renewable annually. In addition, the Company had
borrowings of $14.2 million at June 30, 2002, under a $15 million revolving line
of credit from a bank that bears interest at rates based on LIBOR and is
collateralized by the related vehicles. During the second quarter, this line of
credit was extended to November 2002. Also included in other vehicle debt are
borrowings of $3.3 million outstanding under a line of credit used to support
Thrifty's investment in the fleet securitization partnership and $1.0 million,
which is collateralized by shuttle buses.
Revolving Credit Facility
The Company has a $215 million five-year, senior secured, revolving credit
facility (the "Revolving Credit Facility") that expires in August 2005. The
Revolving Credit Facility is used to provide letters of credit with a sublimit
of $190 million and cash for operating activities with a sublimit of $70
million. Prior to December 31, 2001, the Company received a waiver from
compliance with certain of its financial covenants through January 31, 2002. In
early January 2002, the Company completed an amendment and waiver affecting
certain of its financial covenants through January 2003, which included limiting
expenditures for non-vehicle capital assets and for franchise acquisitions and
the usage of the Revolving Credit Facility to a maximum of $190 million during
the amendment and waiver period. The Company had letters of credit outstanding
under the Revolving Credit Facility of approximately $144.2 million and no
working capital borrowings at June 30, 2002.
DaimlerChrysler Credit Support
DaimlerChrysler Corporation ("DaimlerChrysler") currently provides $11.4
million of credit support for the Company's vehicle fleet financing in the form
of a letter of credit facility, related to DaimlerChrysler's sale of the Company
in December 1997. The letter of credit expires December 23, 2002. The Company
may need to replace reductions in the letter of credit amount with cash from
operations or with borrowings or letters of credit under the Revolving Credit
Facility. To secure reimbursement obligations under the DaimlerChrysler credit
support agreement, DaimlerChrysler has liens and security interests on certain
assets of the Company.
New Accounting Standards
In June 2001, the Financial Accounting Standards Board ("FASB") approved
the issuance of Statement of Financial Accounting Standard ("SFAS") No. 141,
"Business Combinations", and SFAS No. 142, "Goodwill and Other Intangible
Assets". SFAS No. 141 requires that the purchase method of accounting be used
for all business combinations initiated after June 30, 2001. SFAS No. 141 also
specifies the types of acquired intangible assets that are required to be
recognized and reported separately from goodwill and those acquired intangible
assets that are required to be included in goodwill. Effective January 1, 2002,
SFAS No. 142 requires that goodwill no longer be amortized, but instead tested
for impairment at least annually. SFAS No. 142 also requires recognized
intangible assets to be amortized over their respective estimated useful lives
and reviewed for impairment. Any recognized intangible asset determined to have
an indefinite useful life will not be amortized, but instead tested for
impairment in accordance with the standard until its life is determined to no
longer be indefinite.
The Company adopted the provisions of SFAS No. 141 and SFAS No. 142 as
required on January 1, 2002, with the exception of the earlier adoption of the
requirement to use the purchase method of accounting for all business
combinations initiated after June 30, 2001. On January 1, 2002, the Company
ceased amortization of goodwill. During the first quarter of 2002, the Company
completed its transitional goodwill impairment test in accordance with SFAS No.
142 for each reporting unit and determined that goodwill was not impaired.
Additionally, during the second quarter, the Company completed the annual
impairment test on goodwill for 2002 and concluded goodwill was not impaired.
The Company will complete the annual impairment test during the second quarter
of each year unless circumstances arise that require more frequent testing (See
Note 4 to the consolidated financial statements).
20
In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets", which is effective for fiscal
years beginning after December 15, 2001. The Company adopted the provisions of
SFAS No. 144 as required on January 1, 2002. This standard had no effect on the
Company's consolidated financial statements upon adoption.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The following information about the Company's market sensitive financial
instruments constitutes a "forward-looking" statement. The Company's primary
market risk exposure is changing interest rates, primarily in the United States.
The Company's policy is to manage interest rates through use of a combination of
fixed and floating rate debt and interest rate swap agreements. All items
described are non-trading and are stated in U.S. Dollars. Because a portion of
the Company's debt is denominated in Canadian Dollars, its carrying value is
impacted by exchange rate fluctuations.
At June 30, 2002, there were no significant changes in the Company's
quantitative disclosures about market risk compared to December 31, 2001, which
is included under Item 7A of the Company's most recent Form 10-K, except for the
addition of the derivative financial instrument noted in Note 6 to the
consolidated financial statements.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Various legal actions, claims and governmental inquiries and proceedings
are pending or may be instituted or asserted in the future against the Company
and its subsidiaries. Litigation is subject to many uncertainties, and the
outcome of the individual litigated matters is not predictable with assurance.
It is possible that certain of the actions, claims, inquiries or proceedings
could be decided unfavorably to the Company or the subsidiaries involved.
Although the amount of liability with respect to these matters cannot be
ascertained, potential liability is not expected to materially affect the
consolidated financial position or results of operations of the Company.
21
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
[a] On May 22, 2002, the 2002 Annual Meeting of Stockholders of the Company was
held. Proxies for the meeting were solicited pursuant to Section 14(a) of
the Securities Exchange Act of 1934 and there was no solicitation in
opposition to management's director nominees.
[b] The Company's stockholders elected Molly Shi Boren, Thomas P. Capo, Joseph
E. Cappy, Edward L. Hogan, Maryann N. Keller, The Hon. Edward C. Lumley,
John C. Pope, John P. Tierney and Edward L. Wax to serve as directors of
the Company until the next Annual Meeting of Stockholders or until their
successors have been duly elected.
[c] The votes cast by the Company's stockholders for the election of directors
listed in paragraph (b), as determined by the final report of the
inspectors, are set forth below:
NUMBER OF VOTES
---------------------------
NOMINEE FOR WITHHELD
---------------------------- ----------- -------------
Molly Shi Boren 22,587,665 48,985
Thomas P. Capo 22,277,551 359,099
Joseph E. Cappy 22,589,251 47,399
Edward J. Hogan 22,272,450 364,200
Maryann N. Keller 22,275,666 360,984
The Hon. Edward C. Lumley 22,207,470 429,180
John C. Pope 22,586,566 50,084
John P. Tierney 22,272,376 364,274
Edward L. Wax 22,587,951 48,699
The Company's stockholders voted on the following proposals:
Proposal 1 - Election of Directors. See paragraphs (b) and (c) above.
Proposal 2 - Appointment of Deloitte & Touche LLP as Auditors for the 2002 year.
A proposal to appoint Deloitte & Touche LLP as independent public accountants to
audit the books of account and other corporate records of the Company for 2002
was adopted, with 22,241,418 votes cast for, 394,932 votes cast against and 300
votes abstained.
22
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
[a] Index of Exhibits
Exhibit 4.63 Amendment No.3 to Series 2000-1 Supplement dated as of
April 16, 2002 between Rental Car Finance Corp. and
Deutsche Bank Trust Company Americas, formerly known
as Bankers Trust Company
Exhibit 4.64 Amendment No.3 to Note Purchase Agreement dated as of
April 16, 2002 among Rental Car Finance Corp., DTG, the
Conduit Purchasers parties thereto, the Committed
Purchasers parties thereto, the Managing Agents parties
thereto, and Bank One, NA
Exhibit 4.65 Amended and Restated Addendum No. 2 to the Amended and
Restated Master Collateral Agency Agreement dated as of
April 16, 2002 by and among DTG, Rental Car Finance
Corp., Thrifty, Dollar and Deutsche Bank Trust Company
Americas, formerly known as Bankers Trust Company
Exhibit 4.66 Amended and Restated Collateral Assignment of Exchange
Agreement dated as of April 16, 2002 by and among Rental
Car Finance Corp., Dollar, Thrifty, and Deutsche Bank
Trust Company Americas, formerly known as Bankers Trust
Company
Exhibit 4.67 Series 2002-1 Supplement dated as of June 4, 2002
between Rental Car Finance Corp. and Deutsche Bank Trust
Company Americas
Exhibit 4.68 Note Purchase Agreement dated as of May 22, 2002 among
Rental Car Finance Corp., Deutsche Bank Securities Inc.,
Credit Suisse First Boston Corporation, J.P. Morgan
Securities, Inc., Dresdner Kleinwort Wasserstein-
Grantchester, Inc., ING Financial Markets LLC and Scotia
Capital (USA) Inc.
Exhibit 4.69 Amended and Restated Addendum to the Amended and
Restated Master Collateral Agency Agreement dated as of
June 4, 2002 by and among DTG, Rental Car Finance Corp.,
Thrifty, Dollar and Deutsche Bank Trust Company
Americas, formerly known as Bankers Trust Company
Exhibit 4.70 Amended and Restated Collateral Assignment of Exchange
Agreement dated as of June 4, 2002 by and among Rental
Car Finance Corp., Dollar, Thrifty and Deutsche Bank
Trust Company Americas, formerly known as Bankers Trust
Company
Exhibit 4.71 Enhancement Letter of Credit Application and Agreement
dated as of June 4, 2002 among Dollar, Thrifty, Rental
Car Finance Corp., DTG and Credit Suisse First Boston
Exhibit 10.29 Dollar Thrifty Automotive Group, Inc. Executive Option
Plan effective June 1, 2002
Exhibit 15.7 Letter from Deloitte & Touche LLP regarding interim
financial information
23
Exhibit 99.1 Certification by the Chief Executive Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 99.2 Certification by the Chief Financial Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
[b] Reports on Form 8-K
No report on Form 8-K was filed by the Company during or applicable to the
quarter ended June 30, 2002.
24
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned; thereunto duly authorized, in the City of Tulsa, Oklahoma, on
August 13, 2002.
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
By: /s/ JOSEPH E. CAPPY
---------------------------------
Name: Joseph E. Cappy
Title: Chairman of the Board, President,
Chief Executive Officer and
Principal Executive Officer
By: /s/ STEVEN B. HILDEBRAND
---------------------------------
Name: Steven B. Hildebrand
Title: Executive Vice President, Chief
Financial Officer, Principal
Accounting Officer and Principal
Financial Officer
25