UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 2002
Commission file number 001-13950
CENTRAL PARKING CORPORATION
---------------------------
(Exact Name of Registrant as Specified in Its Charter)
Tennessee 62-1052916
--------- ----------
(State or Other Jurisdiction of (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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Former name, address and fiscal year, if changed since last report:
Not Applicable
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO ___
--- ---
Indicate the number of shares outstanding of each of the registrant's classes of
common stock as of the latest practicable date.
Class Outstanding at May 9, 2002
----------------------------- --------------------------
Common Stock, $0.01 par value 35,926,271
INDEX
CENTRAL PARKING CORPORATION
PART I. FINANCIAL INFORMATION PAGE
------- ---------------------- ----
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets
---March 31, 2002 and September 30, 2001 3
Condensed consolidated statements of earnings
--- three and six months ended March 31, 2002 and 2001 4
Condensed consolidated statements of cash flows
--- six months ended March 31, 2002 and 2001 5
Notes to condensed consolidated financial statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 15
Item 3. Quantitative and Qualitative Disclosure about Market Risk 22
PART 2. OTHER INFORMATION
------- -------------------
Item 1. Legal Proceedings 22
Item 4. Submission of Matters to a Vote of Security Holders 23
Item 6. Exhibits and Reports on Form 8-K 23
SIGNATURES 23
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PART I. FINANCIAL INFORMATION
--------------------------------
Item 1. Financial Statements
-------------------------------
CENTRAL PARKING CORPORATION
Condensed Consolidated Balance Sheets
Unaudited
Amounts in thousands, except share data
March 31, September 30,
2002 2001
ASSETS
Current assets:
Cash and cash equivalents $ 41,153 $ 41,849
Management accounts receivable 38,440 32,613
Accounts receivable - other 12,702 16,149
Current portion of notes receivable (including amounts due from partnerships,
joint ventures and unconsolidated subsidiaries of $5,842 at March 31, 2002
and $4,304 at September 30, 2001) 8,311 6,836
Prepaid expenses 12,103 6,939
Deferred income taxes 259 259
----------- ---------------
Total current assets 112,968 104,645
Notes receivable, less current portion 42,556 42,931
Property, equipment, and leasehold improvements, net 410,333 415,405
Contract and lease rights, net 115,192 88,094
Goodwill, net 251,506 250,630
Investment in and advances to partnerships, joint ventures
and unconsolidated subsidiaries 14,799 30,704
Other assets 55,984 54,472
----------- ---------------
Total Assets $1,003,338 $ 986,881
=========== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and capital lease obligations $ 53,401 $ 53,337
Accounts payable 80,726 77,887
Accrued expenses 25,650 24,997
Management accounts payable 22,904 20,541
Income taxes payable 11,618 7,134
----------- ---------------
Total current liabilities 194,299 183,896
Long-term debt and capital lease obligations, less current portion 206,210 208,885
Deferred rent 30,584 22,310
Deferred income taxes 16,470 15,757
Minority interest 29,984 31,121
Other liabilities 33,258 33,466
----------- ---------------
Total liabilities 510,805 495,435
----------- ---------------
Company-obligated mandatorily redeemable convertible securities of
subsidiary holding solely parent debentures 81,555 110,000
Shareholders' equity:
Common stock, $0.01 par value; 50,000,000 shares authorized, 35,886,847
and 35,791,550 shares issued and outstanding at March 31, 2002 and
September 30, 2001, respectively 359 358
Additional paid-in capital 240,140 238,464
Accumulated other comprehensive loss, net (1,625) (1,979)
Retained earnings 172,809 145,308
Shares held in trust (705) (705)
----------- ---------------
Total shareholders' equity 410,978 381,446
----------- ---------------
Total Liabilities and Shareholders' Equity $1,003,338 $ 986,881
=========== ===============
See accompanying notes to condensed consolidated financial statements.
CENTRAL PARKING CORPORATION
Condensed Consolidated Statements of Earnings
Unaudited
Amounts in thousands, except per share data
Three months ended Six months ended
March 31, March 31,
2002 2001 2002 2001
Revenues:
Parking $149,768 $148,848 $297,140 $300,525
Management contract and other 29,366 25,186 58,945 51,074
--------- --------- --------- ---------
Total revenues 179,134 174,034 356,085 351,599
--------- --------- --------- ---------
Costs and expenses:
Cost of parking 130,510 126,730 258,480 250,695
Cost of management contracts 13,331 9,777 25,340 19,999
General and administrative 17,356 16,109 35,347 33,837
Goodwill and non-compete amortization 98 3,001 216 6,002
--------- --------- --------- ---------
Total costs and expenses 161,295 155,617 319,383 310,533
--------- --------- --------- ---------
Property-related gains (losses), net 3,025 (2,296) 7,033 481
--------- --------- --------- ---------
Operating earnings 20,864 16,121 43,735 41,547
Other income (expenses):
Interest income 1,458 1,425 2,810 2,979
Interest expense (3,061) (5,328) (6,319) (11,269)
Dividends on Company-obligated mandatorily redeemable
convertible securities of a subsidiary trust (1,259) (1,471) (2,730) (2,943)
Equity in partnership and joint venture earnings 593 1,528 1,981 2,642
--------- --------- --------- ---------
Earnings before income taxes, minority interest, extraordinary item
and cumulative effect of accounting change 18,595 12,275 39,477 32,956
Income tax expense (6,404) (4,492) (13,643) (12,704)
Minority interest, net of tax (1,007) (1,048) (2,278) (1,836)
--------- --------- --------- ---------
Earnings before extraordinary item and cumulative effect
of accounting change 11,184 6,735 23,556 18,416
Extraordinary item, net of tax 1,707 -- 5,019 --
Cumulative effect of accounting change, net of tax -- -- -- (258)
--------- --------- --------- ---------
Net earnings $ 12,891 $ 6,735 $ 28,575 $ 18,158
========= ========= ========= =========
Basic earnings per share:
Earnings before extraordinary item and cumulative effect of
accounting change $ 0.31 $ 0.19 $ 0.66 $ 0.51
Extraordinary item, net of tax 0.05 -- 0.14 --
Cumulative effect of accounting change, net of tax -- -- -- --
--------- --------- --------- ---------
Net earnings $ 0.36 $ 0.19 $ 0.80 $ 0.51
========= ========= ========= =========
Diluted earnings per share:
Earnings before extraordinary item and cumulative effect of
accounting change $ 0.31 $ 0.19 $ 0.65 $ 0.51
Extraordinary item, net of tax 0.05 -- 0.14 --
Cumulative effect of accounting change, net of tax -- -- -- (0.01)
--------- --------- --------- ---------
Net earnings $ 0.36 $ 0.19 $ 0.79 $ 0.50
========= ========= ========= =========
See accompanying notes to condensed consolidated financial statements.
CENTRAL PARKING CORPORATION
Condensed Consolidated Statements of Cash Flows
Unaudited
Amounts in thousands
Six months ended
March 31,
2002 2001
Cash flows from operating activities:
Net earnings $ 28,575 $ 18,158
Adjustments to reconcile net earnings to net cash provided by operating activities:
Extraordinary item, net of tax (5,019) --
Depreciation and amortization 17,082 21,421
Equity in partnership and joint venture earnings (1,981) (2,642)
Distributions from partnerships and joint ventures 2,697 2,295
Net gains on property-related activities (7,033) (481)
Deferred income tax expense 379 19
Minority interest 2,278 1,836
Changes in operating assets and liabilities (net of acquisitions):
Management accounts receivable (3,743) 1,467
Accounts receivable - other 4,013 (741)
Prepaid expenses (5,164) 646
Other assets (2,937) (306)
Accounts payable, accrued expenses and other liabilities 2,726 (12,431)
Management accounts payable 1,925 (367)
Deferred rent 8,274 1,346
Income taxes payable 1,112 (5,572)
--------- ---------
Net cash provided by operating activities 43,184 24,648
--------- ---------
Cash flows from investing activities:
Proceeds from disposition of property and equipment 13,942 17,011
Proceeds from sale of investment in partnership 18,399 --
Purchase of property, equipment and leasehold improvements (12,922) (15,637)
Purchase of contract and lease rights (18,872) (530)
Acquisitions, net of cash acquired (17,628) --
Other investing activities 32 3,664
--------- ---------
Net cash (used) provided by investing activities (17,049) 4,508
--------- ---------
Cash flows from financing activities:
Dividends paid (1,075) (1,085)
Net borrowings under revolving credit agreement 23,500 12,550
Principal repayments on notes payable and capital lease obligations (27,899) (29,176)
Payment to minority interest partners (3,563) (3,114)
Repurchase of common stock (488) (9,960)
Repurchase of mandatorily redeemable securities (19,325) --
Proceeds from issuance of common stock and exercise of stock options 2,165 560
--------- ---------
Net cash used by financing activities (26,685) (30,225)
--------- ---------
Foreign currency translation (146) 175
--------- ---------
Net decrease in cash and cash equivalents (696) (894)
Cash and cash equivalents at beginning of period 41,849 43,214
--------- ---------
Cash and cash equivalents at end of period $ 41,153 $ 42,320
========= =========
See accompanying notes to condensed consolidated financial statements.
CENTRAL PARKING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(1) BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of
Central Parking Corporation ("Central Parking" or the "Company") have been
prepared in accordance with accounting principles generally accepted in the
United States of America and pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, these financial statements do
not include all of the information and footnotes required by accounting
principles generally accepted in the United States of America for complete
financial statements. In the opinion of management, the unaudited condensed
consolidated financial statements reflect all adjustments considered necessary
for a fair presentation, consisting only of normal and recurring adjustments.
All significant inter-company transactions have been eliminated in
consolidation. Operating results for the three and six months ended March 31,
2002 are not necessarily indicative of the results that may be expected for the
fiscal year ending September 30, 2002. These condensed consolidated financial
statements should be read in conjunction with the consolidated financial
statements and footnotes thereto for the year ended September 30, 2001 (included
in the Company's Annual Report on Form 10-K). Certain prior year amounts have
been reclassified to conform to current year presentation.
(2) ACQUISITIONS
BUSINESS COMBINATIONS
The Company completed the business combinations described below during the
six months ended March 31, 2002. Each acquisition was financed through the
Company's existing credit facility and was accounted for as a purchase. The
operating results of the acquisitions have been included from their respective
dates of acquisition. Pro forma results for prior periods are not presented as
the impact of acquisitions to reported results are not significant. The net
assets acquired and liabilities assumed are summarized as follows (in
thousands):
Estimated fair value of tangible assets acquired $ 5,542
Estimated fair value of intangible assets acquired 14,339
Purchase price in excess of net assets acquired (goodwill) 876
Estimated fair value of liabilities assumed (2,943)
--------
Net purchase price 17,814
Cash acquired (186)
--------
Net cash paid for acquisitions $17,628
========
Park One of Louisiana, LLC
On January 1, 2002, the Company purchased certain assets and liabilities of
Park One of Louisiana, LLC, for $5.6 million in cash. The purchase included 24
management and 17 lease contracts located in New Orleans, Louisiana. The fair
value of the assets acquired as of the acquisition date was as follows (in
thousands):
Tangible assets $ 491
Contract rights 5,864
Liabilities assumed (805)
-------
Net assets acquired $5,550
=======
The tangible assets purchased and liabilities assumed consist primarily of
management accounts receivable and management accounts payable, respectively.
The contract rights will be amortized over 15 years, which is the estimated life
of the contracts including future renewals.
USA Parking Systems
On October 1, 2001, the Company purchased substantially all of the assets
of USA Parking Systems, Inc, for $11.5 million in cash. The purchase included 61
management and lease contracts located primarily in south Florida and Puerto
Rico. The fair value of the assets acquired as of the acquisition date was as
follows (in thousands):
Tangible assets $ 2,779
Noncompete agreement 175
Trade name 100
Contract rights 8,475
-------
Net assets acquired $11,529
=======
The tangible assets primarily consisted of accounts receivable and parking
equipment. The noncompete agreement is with the seller, who is now employed by
the Company. The duration of the agreement extends five years beyond the
seller's termination of such employment and will begin to be amortized when such
termination occurs. The trade name is included as goodwill and is not subject to
amortization. The contract rights will be amortized over 15 years, which is the
average estimated life of the contracts including future renewals. The purchase
agreement also contained an incentive provision whereby the seller may receive
an additional payment of up to $2.3 million based on the earnings of USA Parking
for the twelve months ended March 31, 2004. The incentive provision is not
conditional upon employment. Any amounts owed under this incentive provision
will be recorded as goodwill in the period incurred.
Universal Park Holdings
On October 1, 2001, the Company purchased 100% of the common stock of
Universal Park Holdings ("Universal") for $535 thousand. Universal provides fee
collection and related services for state, local and national parks and had
contracts to provide these services to six parks in the western United States as
of the acquisition date. The purchase price included $385 thousand paid in cash
at closing and a $150 thousand commitment to be paid after one year, contingent
upon retention of acquired contracts. The purchase resulted in goodwill of $619
thousand, which is not deductible for tax purposes. This acquisition expanded
the Company's presence in the municipal, state and national parks market.
Lexis Systems, Inc.
On October 1, 2001, the Company purchased a 70% interest in Lexis Systems,
Inc. ("Lexis") for $350 thousand in cash. Lexis manufactures and sells automated
pay stations used primarily for parking facilities. The purchase resulted in
goodwill of $157 thousand, which is not deductible for tax purposes. The Company
intends to use the automated pay stations in its existing parking operations as
well as for sale to other parking operators.
LEASE RIGHTS
During the six months ended March 31, 2002, the Company purchased the lease
rights for three locations in New York City from an unrelated third party for
$16.4 million in cash. The lease rights will be amortized over the remaining
terms of the individual lease agreements which range from 10 to 30 years.
The Company had previously operated each of these locations under an
agreement entered into in September 1992. This agreement, which terminates in
August 2004, initially covered approximately 80 locations; however, all but
seven of these locations had been extended or terminated as of March 31, 2002.
The remaining locations had revenues and operating income of approximately $14
million and $3 million, respectively, in fiscal 2001. The Company intends to
enter into negotiations to extend the terms of these remaining locations prior
to the termination of the existing agreement. There can be no assurance that
these locations will be renewed or, if renewed, that the new agreements will not
have substantially different terms.
The Company is entitled to receive a termination fee, as defined in the
agreement, as the third party disposes of certain properties or renegotiates the
lease agreements. The termination fee is based on the earnings of the location
and the remaining duration of the agreement. During the six months ended March
31, 2002, the Company received $8.4 million in termination fees related to the
three locations described above and two additional locations which were disposed
of during the period. These amounts have been recorded as deferred rent and will
be amortized through August 2004 to offset the guaranteed rent payments due
under the original agreement.
(3) EARNINGS PER SHARE
Basic earnings per share excludes dilution and is computed by dividing
income available to common shareholders by the weighted-average number of common
shares outstanding for the period. Diluted earnings per share reflects the
potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock, or if restricted
shares of common stock were to become fully vested. The following table sets
forth the computation of basic and diluted earnings per share:
Three months ended Three months ended
March 31, 2002 March 31, 2001
--------------------------------- ---------------------------------
Income Common Income Common
Available Shares Per Share Available Shares Per Share
($000's) (000's) Amount ($000's) (000's) Amount
----------- ------- ---------- ----------- ------- ----------
Basic earnings per share before
extraordinary item $ 11,184 35,775 $ 0.31 $ 6,735 35,702 $ 0.19
Effect of dilutive stock and options:
Stock option plan -- 363 -- -- 114 --
Restricted stock plan -- -- -- -- 149 --
----------- ------- ---------- ----------- ------- ----------
Diluted earnings per share before
extraordinary item. $ 11,184 36,138 $ 0.31 $ 6,735 35,965 $ 0.19
=========== ======= ========== =========== ======= ==========
Six months ended Six months ended
March 31, 2002 March 31, 2001
--------------------------------- ---------------------------------
Income Common Income Common
Available Shares Per Share Available Shares Per Share
($000's) (000's) Amount ($000's) (000's) Amount
----------- ------- ----------- ----------- ------- ----------
Basic earnings per share before
extraordinary item and cumulative
effect of accounting change $ 23,556 35,765 $ 0.66 $ 18,416 35,857 $ 0.51
Effect of dilutive stock and options:
Stock option plan -- 240 (0.01) -- 114 --
Restricted stock plan -- -- -- -- 148 --
----------- ------- ----------- ----------- ------- ----------
Diluted earnings per share before
extraordinary item and cumulative
effect of accounting change $ 23,556 36,005 $ 0.65 $ 18,416 36,119 $ 0.51
=========== ======= =========== =========== ======= ==========
The company-obligated mandatorily redeemable securities of the subsidiary
trust have not been included in the diluted earnings per share calculation since
such securities are anti-dilutive. At March 31, 2002 and 2001, such securities
were convertible into 1,482,820 and 2,000,000 shares of common stock,
respectively. For the three months ended March 31, 2002 and 2001, options to
purchase 529,246 and 1,762,869 shares, respectively, are excluded from the
diluted common shares since they are anti-dilutive. Also, for the six months
ended March 31, 2002 and 2001, options to purchase 1,170,506, and 1,823,833
shares, respectively, are excluded since they are anti-dilutive.
(4) PROPERTY-RELATED GAINS (LOSSES), NET
The Company routinely disposes of or impairs owned properties and leasehold
improvements due to various factors, including economic considerations,
unsolicited offers from third parties, loss of contracts and condemnation
proceedings initiated by local government authorities. Leased properties are
also periodically evaluated and determinations may be made to sell or exit a
lease obligation. A summary of property-related gains and losses for the three
and six months ended March 31, 2002 and 2001 is as follows:
Three months ended Six months ended
March 31, March 31,
2002 2001 2002 2001
------- -------- -------- --------
Net (losses) gains on sale of property $ (100) $ 4 $ 4,860 $ 5,519
Impairment charges for property, equipment
and leasehold improvements (5) -- (61) (715)
Impairment charges for contract rights, lease
rights and other intangible assets (723) -- (1,619) (492)
Net gains on sale of partnership interests 3,853 -- 3,853 --
Lease termination costs -- (2,300) -- (3,831)
------- -------- -------- --------
Total property-related gains (losses), net $3,025 $(2,296) $ 7,033 $ 481
======= ======== ======== ========
On January 28, 2002, the Company sold its 50% interest in Civic Parking,
LLC ("Civic") for $18.4 million. The transaction resulted in a gain of $3.9
million which is included as a property-related gain for the three and six
months ended March 31, 2002. Additionally, the Company recognized $5.0 million
of gains on sales of property during the three months ended December 31, 2001,
primarily from the condemnation of a property in Houston. The Company wrote off
prepaid rent of $0.7 million during the three months ended March 31, 2002
related to a condemned location in New York City. This was in addition to
write-offs of $0.9 million of contract rights in the first quarter of fiscal
2002 for locations in Houston, Fort Worth and San Diego that are no longer
operated by the Company.
The Company recognized $5.5 million of gains from property sales during the
six months ended March 31, 2001. These gains primarily related to the sale of
properties in Chicago, Birmingham and Toledo. Lease termination costs for the
six months ended March 31, 2001, include $2.3 million which the Company accrued
to exit an unfavorable lease in New York City during the second quarter of
fiscal 2001 and $1.5 million which the Company paid to exit an unfavorable lease
in Philadelphia during the first quarter of fiscal 2001. Impairment charges
during the six months ended March 31, 2001 comprised $0.7 million attributable
to a property where the operating lease agreement was amended such that the
carrying value of the leasehold improvements was no longer supportable by
projected future cash flows. The remaining $0.5 million of impairment charges
reflects a reduction in certain Allright-related intangible assets which are no
longer of value to the Company.
Impaired assets in all periods were held for use at the time of impairment.
The Company determines impairment by comparing the carrying value of the assets
to the projected undiscounted future cash flows from the property or properties
to which they relate. If projected future cash flows are less than the carrying
value of the asset, the asset is considered to be impaired and the carrying
value is written down to its fair value.
(5) GOODWILL AND INTANGIBLE ASSETS
In July 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("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
criteria which intangible assets acquired in a purchase method business
combination must meet to be recognized and reported apart from goodwill. SFAS
No. 142 requires that goodwill and intangible assets with indefinite useful
lives no longer be amortized, but instead be tested for impairment at least
annually. Any impairment loss would be measured as of the date of adoption,
and recognized as the cumulative effect of a change in accounting principle.
SFAS No. 142 also requires that intangible assets with definite useful lives be
amortized over their respective estimated useful lives to their estimated
residual values, and reviewed for impairment in accordance with SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of.
The Company was required to adopt the provisions of SFAS No. 141
immediately. SFAS No. 142 must be adopted by October 1, 2002, but may be
adopted earlier. The Company has elected this early adoption as of October 1,
2001. SFAS No. 142 requires that the Company evaluate its existing intangible
assets and goodwill that were acquired in a prior purchase business combination,
and to make any necessary reclassifications in order to conform with the new
criteria in SFAS No. 141 for recognition apart from goodwill. With the adoption
of SFAS No. 142, the Company has reassessed the useful lives and residual values
of all intangible assets acquired in purchase business combinations, and has
determined that no amortization period adjustments are required. As of March
31, 2002, the Company has not identified any intangible assets with indefinite
useful lives, other than goodwill.
The transitional provisions of SFAS No. 142 require the Company to perform
an assessment of whether there is an indication that goodwill is impaired as of
the date of adoption. To accomplish this, the Company must identify its
reporting units and determine the carrying value of each reporting unit by
assigning the assets and liabilities, including the existing goodwill and
intangible assets, to those reporting units as of the date of adoption. The
Company is structured into geographical segments. Each segment consists of
several cities which report to a single senior vice president. For purposes of
allocating and evaluating goodwill and intangible assets, the Company considers
each city to be a separate reporting unit. The Company has up to six months from
the date of adoption to determine the fair value of each reporting unit and
compare it to the reporting unit's carrying amount. To the extent a reporting
unit's carrying amount exceeds its fair value, an indication exists that the
reporting unit's goodwill may be impaired and the Company must perform the
second step of the transitional impairment test. In the second step, the Company
must compare the implied fair value of the reporting unit's goodwill, determined
by allocating the reporting unit's fair value to all of its assets (recognized
and unrecognized) and liabilities in a manner similar to a purchase price
allocation in accordance with SFAS No. 141, to its carrying amount, both of
which would be measured as of the date of adoption. This second step is required
to be completed as soon as possible, but no later than the end of the year of
adoption. Any transitional impairment loss will be recognized as the cumulative
effect of a change in accounting principle in the Company's statement of
earnings. The Company has completed step one and has identified from $3 to $20
million of goodwill related to business units in Chicago and New Jersey that is
potentially impaired. The Company plans to complete the second step of the
goodwill impairment transition testing and recognize any impairment charges
prior to the end of the current fiscal year.
As of September 30, 2001, the Company's unamortized goodwill amounted to
$250.6 million and unamortized identifiable intangible assets amounted to $88.1
million, all of which were subject to the transition provisions of SFAS No. 142.
The effects of adoption of SFAS No. 142 on results of operations for the three
and six months ended March 31, 2002 and 2001, are as follows (in thousands,
except per share data):
Three months Six months
ended ended
March 31, March 31,
2002 2001 2002 2001
------- ------ ------- -------
Reported net earnings $12,891 $6,735 $28,575 $18,158
Add back: Goodwill amortization, net of tax -- 2,699 -- 5,405
------- ------ ------- -------
Pro forma net earnings $12,891 $9,434 $28,575 $23,563
======= ====== ======= =======
Basic earnings per share:
Reported net earnings $ 0.36 $ 0.19 $ 0.80 $ 0.51
Goodwill amortization -- 0.07 -- 0.15
------- ------ ------- -------
Pro forma net earnings $ 0.36 $ 0.26 $ 0.80 $ 0.66
======= ====== ======= =======
Diluted earnings per share:
Reported net earnings $ 0.36 $ 0.19 $ 0.79 $ 0.50
Goodwill amortization -- 0.07 -- 0.15
------- ------ ------- -------
Pro forma net earnings $ 0.36 $ 0.26 $ 0.79 $ 0.65
======= ====== ======= =======
As of March 31, 2002, the Company had the following amortizable intangible
assets (in thousands):
Gross
Carrying Accumulated
Amount Amortization Net
--------- ------------- --------
Amortizable intangible assets
Contract and lease rights $ 150,041 $ 34,849 $115,192
Noncompete agreements 2,575 1,997 578
--------- ------------- --------
Total $ 152,616 $ 36,846 $115,770
========= ============= ========
Amortization expense related to the contract rights and noncompete
agreements was $2,662,000 and $98,000, respectively, for the three months ended
March 31, 2002, and $5,036,000 and $216,000, respectively, for the six months
ended March 31, 2002.
In accordance with SFAS No. 142, the Company assigned its goodwill to its
various reporting units during the second quarter of fiscal 2002. The following
table reflects this assignment by reported segment as of October 1, 2001, and
the changes in the carrying amounts for the six months ended March 31, 2002 (in
thousands):
One Two Three Four Five Six Other Total
------ -------- ------- ----- ------ ------- ------ --------
Balance as of October 1, 2001 $5,829 $194,784 $13,227 $ 831 $5,660 $30,299 $ -- $250,630
Acquired during the period 619 -- -- -- -- -- 257 876
------ -------- ------- ----- ------ ------- ------ --------
Balance as of March 31, 2002 $6,448 $194,784 $13,227 $ 831 $5,660 $30,299 $ 257 $251,506
====== ======== ======= ===== ====== ======= ====== ========
(6) LONG-TERM DEBT
In March 1999, the Company entered into a credit facility (the "Credit
Facility") initially providing for an aggregate availability of up to $400
million consisting of a five-year $200 million revolving credit facility
including a sub-limit of $40 million for standby letters of credit, and a $200
million five-year term loan. The Credit Facility bears interest at LIBOR plus a
grid-based margin dependent upon the Company achieving certain financial ratios.
The amount outstanding under the Company's Credit Facility was $236.5 million
with a weighted average interest rate of 3.3% as of March 31, 2002, including
the principal amount of the term loan of $100.0 million. The term loan is
required to be repaid in quarterly payments of $12.5 million through March 2004.
The aggregate availability under the Credit Facility was $40.0 million at March
31, 2002, which is net of $23.5 million of stand-by letters of credit. The
Credit Facility contains covenants including those that require the Company to
maintain certain financial ratios, restrict further indebtedness and limit the
amount of dividends paid. The two primary ratios are a leverage ratio and a
fixed charge coverage ratio. Quarterly compliance is calculated using a four
quarter rolling methodology and measured against certain targets.
The Company is required to maintain the aforementioned financial covenants
under the Credit Facility as of the end of each fiscal quarter. The Company was
in compliance with these financial covenants as of March 31, 2002; however,
there can be no assurance that the Company will be in compliance with one or
more of these covenants in future quarters. The Company continues to evaluate
various financing alternatives, including sale/leaseback opportunities, mortgage
financing and repurchases of its mandatory redeemable convertible securities, as
it seeks to optimize the rate, duration and mix of its debt.
(7) CONVERTIBLE TRUST ISSUED PREFERRED SECURITIES
In 1998, the Company completed a private placement of 4,400,000 shares at
$25.00 per share of 5.25% convertible trust issued preferred securities (the
"Preferred Securities"). The Preferred Securities prohibit the payment of
dividends on the Company's common stock if quarterly distributions on the
Preferred Securities are not made.
On March 30, 2002 the Company repurchased 500,000 shares of its Preferred
Securities for $9.3 million. On December 28, 2001, the Company repurchased
637,795 shares of the Preferred Securities for $10.0 million. For the three and
six months ended March 31, 2002, these transactions resulted in an extraordinary
gain of $1.7 and $5.0 million, net of a writedown of a proportionate share of
the related deferred finance costs of $0.3 and $0.8 million and income taxes of
$1.1 and $3.3 million, respectively.
(8) SUPPLEMENTAL CASH FLOW INFORMATION
Non-cash transactions and cash paid for interest and taxes for the six
months ended March 31, 2002 and 2001, were as follows (in thousands):
Six months ended
March 31,
2002 2001
-------- -------
Non-cash transactions:
Issuance of restricted stock $ 12 $ 23
Purchase of equipment with capital lease $ 646 $ --
Unrealized (gain) loss on fair value of derivatives $ (500) $ 1,386
Cash paid for interest $ 6,061 $ 9,818
Cash paid for income taxes $11,933 $17,785
(9) DERIVATIVE FINANCIAL INSTRUMENTS
The Company uses variable rate debt to finance its operations. These debt
obligations expose the Company to variability in interest payments due to
changes in interest rates. If interest rates increase, interest expense
increases. Conversely, if interest rates decrease, interest expense also
decreases. Management believes it is prudent to limit the variability of its
interest payments.
To meet this objective, the Company enters into various types of derivative
instruments to manage fluctuations in cash flows resulting from interest rate
risk. These instruments include interest rate swaps and caps. Under the
interest rate swaps, the Company receives variable interest rate payments and
makes fixed interest rate payments, thereby creating fixed-rate debt. The
purchased interest rate cap agreements also protect the Company from increases
in interest rates that would result in increased cash interest payments made
under its Credit Facility. Under the agreements, the Company has the right to
receive cash if interest rates increase above a specified level.
The Company does not enter into derivative instruments for any purpose
other than cash flow hedging purposes. That is, the Company does not speculate
using derivative instruments. The Company assesses interest rate cash flow risk
by continually identifying and monitoring changes in interest rate exposures
that may adversely impact expected future cash flows and by evaluating hedging
opportunities. The Company maintains risk management control systems to monitor
interest rate cash flow risk attributable to both the Company's outstanding or
forecasted debt obligations as well as the Company's offsetting hedge positions.
The risk management control systems involve the use of analytical techniques,
including cash flow sensitivity analysis, to estimate the expected impact of
changes in interest rates on the Company's future cash flows.
In June 1998, FASB issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities. SFAS No. 133 established reporting standards
for derivative instruments, including certain derivative instruments embedded in
other contracts. In June 2000, SFAS No. 138 Accounting for Certain Derivative
Instruments and Certain Hedging Activities, an Amendment of FASB Statement No.
133, was issued clarifying the accounting for derivatives under the new
standard.
On October 1, 2000, the Company prospectively adopted the provisions of
SFAS No. 133 and SFAS No. 138, which resulted in the recording of a net
transition loss of $380 thousand, net of related income taxes of $253 thousand,
in accumulated other comprehensive loss. Under SFAS No. 133, the Company
recognizes all derivatives as either assets or liabilities, measured at fair
value, in the statement of financial position. Prior to adoption of SFAS No.
133 and SFAS No. 138, the Company recorded interest rate cap instruments at cost
and amortized these costs into interest expense over the terms of the cap
agreements. Amounts received under the cap agreements were recorded against
interest expense. Amounts paid or received under the swap agreements were
recorded as increases or decreases to interest expense. The adoption of SFAS
No. 133 and SFAS No. 138 resulted in the Company reducing derivative instrument
assets by $280 thousand and recording $353 thousand of derivative instrument
liabilities.
At March 31, 2002, the Company's derivative financial instruments consist
of three interest rate cap agreements with a combined notional amount of $75
million and two interest rate swaps with a combined notional amount of $38
million that effectively convert an equal portion of its debt from a variable
rate to a fixed rate. The derivative financial instruments are reported at their
fair values, and are included as other assets and other liabilities,
respectively, on the face of the balance sheet. The following table lists the
amortized cost and carrying value (fair value) of each type of derivative
financial instrument (amounts in thousands):
March 31, 2002 September 30, 2001
Amortized Fair Amortized Fair
Cost Value Cost Value
---------- ------ ---------- ------
Derivative instrument assets:
Interest rate caps $ 351 $ 42 $ 440 $ 63
Derivative instrument liabilities:
Interest rate swaps $ -- $2,209 $ -- $2,975
The underlying terms of the interest rate swaps and caps, including the
notional amount, interest rate index, duration, and reset dates, are identical
to those of the associated debt instruments and therefore the hedging
relationship results in no ineffectiveness. Accordingly, such derivative
instruments are classified as cash flow hedges. As such, any changes in the fair
market value of the derivative instruments are included in accumulated other
comprehensive loss on the face of the balance sheet. Approximately $107
thousand, net of income tax benefit of $72 thousand, is expected to be amortized
to earnings in the next twelve months.
During the three and six months ended March 31, 2002, the Company
recognized unrealized gains of $272 and $500 thousand, respectively, net of
related income tax expense of $182 and $334 thousand, respectively, in
accumulated other comprehensive loss. During the three and six months ended
March 31, 2001, the Company recognized unrealized losses of $513 thousand and
$1.4 million, respectively, net of related income tax benefits of $342 and $671
thousand, respectively, in accumulated other comprehensive loss. The Company
decreased derivative instrument assets by $91 and $21 thousand and decreased
derivative instrument liabilities by $501 and $766 thousand for the three and
six months ended March 31, 2002, respectively. The Company decreased derivative
instrument assets by $101 and $237 thousand and increased derivative instrument
liabilities by $798 thousand and $1.5 million for the three and six months ended
March 31, 2001, respectively.
(10) REVENUE RECOGNITION
The Company adopted Staff Accounting Bulletin No. 101, Revenue Recognition
in Financial Statements ("SAB 101") during the quarter ended March 31, 2001 as a
change in accounting principle retroactive to October 1, 2000. Adoption of SAB
101 required the Company to change the timing of recognition of
performance-based revenues on certain management contracts. The cumulative
effect of this accounting change was a loss of $258 thousand, net of tax of
$171 thousand, as of October 1, 2000.
(11) RECENT ACCOUNTING PRONOUNCEMENTS
In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets, which supersedes both SFAS No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of and the accounting and reporting provisions of APB Opinion No. 30, Reporting
the Results of Operations-Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions, for the disposal of a segment of a business (as previously defined
in that Opinion). SFAS No. 144 retains the fundamental provisions in SFAS No.
121 for recognizing and measuring impairment losses on long-lived assets held
for use and long-lived assets to be disposed of by sale. SFAS No. 144 also
resolves certain implementation issues associated with SFAS No. 121 by providing
guidance on how a long-lived asset that is used as part of a group should be
evaluated for impairment, establishing criteria for when a long-lived asset is
held for sale, and prescribing the accounting for a long-lived asset that will
be disposed of other than by sale. SFAS No. 144 retains the basic provisions of
Opinion 30 on how to present discontinued operations in the income statement but
broadens that presentation to include a component of an entity (rather than a
segment of a business). SFAS No. 144 does not apply to goodwill. Rather,
goodwill is evaluated for impairment under SFAS No. 142. The Company will adopt
SFAS No. 144 for the quarter ending December 31, 2002. Management does not
expect such adoption to have a material impact on the Company's financial
statements because the impairment assessment under SFAS No. 144 is largely
unchanged from SFAS No.121.
In April 2002, the FASB issued SFAS No. 145, Recission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections. Among other provisions, the Statement rescinds SFAS No. 4,
Reporting Gains and Losses from Extinguishment of Debt, which requires that all
gains and losses on extinguishment of debt be classified as an extraordinary
item, net of tax, on the face of the income statement. Under SFAS No. 145, such
gains and losses will be included in interest expense for all periods presented.
The Statement is effective for all fiscal years beginning after May 15, 2002,
but may be adopted earlier. The Company has recognized gains from
extinguishment of debt of $8.3 million (excluding income tax expense of $3.3
million) during the six months ended March 31, 2002, which will be reclassified
as a reduction of interest expense (and an increase in income tax expense) once
the statement is adopted. The other provisions of SFAS No. 145 are not expected
to have a material effect on the Company's financial statements.
(12) COMMITMENTS AND CONTINGENCIES
The Company entered into a partnership agreement effective June 1, 2000, to
operate certain locations in Puerto Rico. The Company is the general partner
and majority owner. The partners entered into an option agreement on that date
whereby the minority partner has the option to sell its partnership interest to
the Company during the period from May 1, 2003 to November 30, 2003. If the
minority partner does not exercise its option, then the Company has an option to
purchase the minority partner's interest during the period from May 1, 2004 to
October 31, 2004. The agreed upon purchase price under both of these options is
approximately $14.3 million, backed by a letter of credit provided by the
Company's chairman. The Company believes that it is probable that one of these
options will be exercised and, accordingly, has included this commitment on its
balance sheet in other liabilities.
(13) COMPREHENSIVE INCOME
Comprehensive income for the three and six months ended March 31, 2002 and
2001, was as follows (in thousands):
Three months Six months
ended March 31, ended March 31,
2002 2001 2002 2001
-------- ------- -------- --------
Net earnings $12,891 $6,735 $28,575 $18,158
Gain (loss) on fair value of derivatives 272 (513) 500 (1,386)
Foreign currency cumulative translation adjustment (146) 184 (146) 175
-------- ------- -------- --------
Comprehensive income $13,017 $6,406 $28,929 $16,947
======== ======= ======== ========
(14) BUSINESS SEGMENTS
The Company is managed based on segments administered by senior vice
presidents. These segments are generally organized geographically, with
exceptions depending on the needs of specific regions. The following are
summaries of revenues and operating earnings of each segment for the three and
six months ended March 31, 2002 and 2001, as well as identifiable assets for
each segment as of March 31, 2002 and 2001. During fiscal year 2002, the Company
realigned certain locations among segments. All prior year segment data has been
reclassified to conform to the new segment alignment.
Three months Six months
ended March 31, ended March 31,
2002 2001 2002 2001
Revenues:
Segment One $ 17,870 $ 15,446 $ 36,315 $ 31,813
Segment Two 74,666 76,060 148,643 155,112
Segment Three 25,474 25,901 50,490 50,101
Segment Four 13,715 14,466 27,387 28,174
Segment Five 21,502 21,638 43,222 43,850
Segment Six 19,830 18,858 38,704 38,828
Other 6,077 1,665 11,324 3,721
-------- -------- -------- --------
Total revenues $179,134 $174,034 $356,085 $351,599
======== ======== ======== ========
Operating earnings:
Segment One $ 579 $ 521 $ 1,297 $ 2,534
Segment Two 5,836 3,107 13,269 10,880
Segment Three 3,148 2,903 6,565 6,050
Segment Four 1,915 2,554 3,841 4,042
Segment Five 2,306 2,616 5,060 5,302
Segment Six 1,987 737 4,335 3,110
Other 5,093 3,683 9,368 9,629
-------- -------- -------- --------
Total operating earnings $ 20,864 $ 16,121 $ 43,735 $ 41,547
======== ======== ======== ========
As of March 31,
2002 2001
Identifiable assets:
Segment One $ 18,498 $ 20,371
Segment Two 379,464 354,779
Segment Three 37,720 34,091
Segment Four 35,407 27,876
Segment Five 24,306 23,579
Segment Six 44,484 46,777
Other 463,459 490,002
---------- --------
Total assets $1,003,338 $997,475
========== ========
Segment One encompasses the western region of the United States, and Vancouver,
BC.
Segment Two encompasses the northeastern United States, including New York City,
New Jersey, Boston and Philadelphia.
Segment Three encompasses Texas, Louisiana, Ohio and parts of Tennessee and
Alabama.
Segment Four encompasses Florida, Puerto Rico, Europe, Central and South
America, and Asia
Segment Five encompasses the midwestern region of the United States, as well as
western Pennsylvania and western New York. It also includes Canada (except
Vancouver)
Segment Six encompasses the southeastern region of the United States, including
North and South Carolina, Virginia, West Virginia and Washington, D.C.
Other encompasses home office, eliminations, owned real estate, USA Parking and
certain partnerships.
(15) SUBSEQUENT EVENTS
In April 2002, the Company purchased four properties in Atlanta for $16.5
million, including acquisition costs. The purchase was funded through two notes
payable. The notes require the Company to make monthly interest payments at a
weighted average rate of one-month LIBOR plus 157.5 basis points, with the
principal balance due in April 2007.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
--------------------------------------------------------------------------------
of Operations
--------------
FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE
This report includes various forward-looking statements regarding the
Company that are subject to risks and uncertainties, including, without
limitation, the factors set forth below and under the caption "Risk Factors" in
the Management's Discussion and Analysis of Financial Condition and Results of
Operations section of the Company's Report on Form 10-K for the year ended
September 30, 2001. Forward-looking statements include, but are not limited to,
discussions regarding the Company's operating strategy, growth strategy,
acquisition strategy, cost savings initiatives, industry, economic conditions,
financial condition, liquidity and capital resources and results of operations.
Such statements include, but are not limited to, statements preceded by,
followed by or that otherwise include the words "believes," "expects,"
"anticipates," "intends," "estimates" or similar expressions. For those
statements, the Company claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995.
The following important factors, in addition to those discussed elsewhere
in this report, and the Company's report on Form 10-K for the year ended
September 30, 2001 could affect the future financial results of the Company and
could cause actual results to differ materially from those expressed in
forward-looking statements contained or incorporated by reference in this
document:
- ongoing integration of past and future acquisitions, in light of challenges
in retaining key employees, implementing technology systems, synchronizing
business processes and efficiently integrating facilities, marketing, and
operations;
- successful implementation of the Company's operating and growth strategy,
including possible strategic acquisitions;
- successful renegotiation and retention of leases and management agreements
on terms favorable to the Company;
- fluctuations in quarterly operating results caused by a variety of factors
including the timing of property-related gains and losses, preopening costs, the
effect of weather on travel and transportation patterns, player strikes or other
events affecting major league sports, terrorist attacks, restrictions imposed on
travel and local, national and international economic conditions;
- the ability of the Company to form and maintain its strategic relationships
with certain large real estate owners and operators;
- global and/or regional economic factors
- compliance with laws and regulations, including, without limitation
environmental, anti-trust and consumer protection laws and regulations at the
federal, state and international levels.
OVERVIEW
The Company operates parking facilities under three types of arrangements:
leases, fee ownership, and management contracts. As of March 31, 2002, the
Company operated 1,792 parking facilities through management contracts, leased
1,896 parking facilities, and owned 210 parking facilities, either independently
or in joint ventures with third parties. Parking revenues consist of revenues
from leased and owned facilities. Cost of parking relates to both leased and
owned facilities and includes rent, payroll and related benefits, depreciation
(if applicable), maintenance, insurance, and general operating expenses.
Management contract and other revenues consist of management fees (both fixed
and performance based) 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.
Parking revenues from owned properties amounted to $16.8 and $18.6 million
for the three months ended March 31, 2002 and 2001, respectively, representing
11.2% and 12.5% of total parking revenues for the respective periods. For the
six months ended March 31, 2002 and 2001, parking revenues from owned properties
were $33.6 and $36.5 million, respectively, representing 11.3% and 12.1% of
total parking revenues for the respective periods. Ownership of parking
facilities, either independently or through joint ventures, typically requires a
larger capital investment and greater risk 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
owned facility revenues 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.
Parking revenues from leased facilities amounted to $133.0 and $130.2
million for the three months ended March 31, 2002 and 2001, respectively, and
$263.5 and $264.0 million for the six months ended March 31, 2002 and 2001,
respectively. Parking revenues from leased facilities accounted for 88.8% and
87.5% of total parking revenues for the three months ended March 31, 2002 and
2001, respectively, and 88.7% and 87.9% of total parking revenues for the six
months ended March 31, 2002 and 2001, respectively. The Company's leases
generally require the payment of a fixed amount of rent, regardless of the
profitability of the parking facility. In addition, many leases also require the
payment of a percentage of gross revenues above specified threshold levels.
Generally speaking, leased facilities require a longer commitment and a larger
capital investment to the Company and represent a greater risk than managed
facilities but provide a greater opportunity for long-term growth in revenues
and profits. 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. Lease arrangements are typically for terms of three to
ten years, with a renewal term, and generally provide for increases in base rent
based on indices, such as the Consumer Price Index, or on pre-determined
amounts.
Management contract and other revenues amounted to $29.4 and $25.2 million
for the three months ended March 31, 2002 and 2001, respectively, and $58.9 and
$51.1 million for the six months ended March 31, 2002 and 2001, respectively.
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, the Company 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. With respect to insurance, the Company's clients have the
option of obtaining liability insurance on their own or having the Company
provide insurance as part of the services provided under the management
contract. Because of the Company's size and claims experience, management
believes it can purchase such insurance at lower rates than the Company's
clients can generally obtain on their own. Accordingly, the Company historically
has generated profits on the insurance provided under its management contracts.
CRITICAL ACCOUNTING POLICIES
Management's Discussion and Analysis of Financial Condition and Results of
Operations discusses the Company's condensed consolidated financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States of America. Accounting estimates are an integral
part of the preparation of the financial statements and the financial reporting
process and are based upon current judgments. The preparation of financial
statements in conformity with accounting principles generally accepted in the
United States requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reported period. Certain accounting
estimates are particularly sensitive because of their complexity and the
possibility that future events affecting them may differ materially from the
Company's current judgments and estimates.
This listing of critical accounting policies is not intended to be a
comprehensive list of all of the Company's accounting policies. In many cases,
the accounting treatment of a particular transaction is specifically dictated by
accounting principles generally accepted in the United States of America, with
no need for management's judgment regarding accounting policy. The Company
believes that of its significant accounting policies, as discussed in Note 1 of
the consolidated financial statements included in the Company's Annual Report on
Form 10-K for the year ended September 30, 2001, the following may involve a
higher degree of judgment and complexity:
Impairment Of Long-Lived Assets And Goodwill
In accounting for the Company's long-lived assets, other than goodwill and
other intangible assets, the Company applies the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 121, Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed of. Beginning
October 1, 2001, the Company accounts for goodwill and other intangible assets
under the provisions of SFAS No. 142, Goodwill and Other Intangible Assets. The
determination and measurement of an impairment loss under these accounting
standards require the significant use of judgment and estimates. The
determination of fair value of these assets and the timing of an impairment
charge are two critical components of recognizing an asset impairment charge
that are subject to the significant use of judgment and estimation. Future
events may indicate differences from these judgments and estimates.
Contract and Lease Rights
The Company capitalizes payments made to third parties which provide the
Company the right to manage or lease facilities. Lease rights and management
contract rights which are purchased individually are amortized on a
straight-line basis over the terms of the related agreements which range from 5
to 30 years. Management contract rights acquired through acquisition of an
entity are amortized as a group over the estimated term of the contracts,
including anticipated renewals and terminations based on the Company's
historical experience (typically 15 years). If the renewal rate of contracts
within an acquired group is less than initially estimated, accelerated
amortization or impairment may be necessary.
Lease Termination Costs
The Company has recognized lease termination costs in accordance with
Emerging Issues Task Force Issue No. 94-3, Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring), in its financial statements. Lease
termination costs are based upon certain estimates of liabilities related to
costs to exit an activity. Liability estimates may change as a result of future
events.
Income Taxes
The Company uses the asset and liability method of SFAS No. 109, Accounting
for Income Taxes, to account for income taxes. Under this method, deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The Company has certain net operating loss carry
forwards which expire between 2002 and 2016. The ability of the Company to fully
utilize these net operating losses to offset taxable income is limited due to
changes in ownership of the companies which generated these losses. These
limitations have been considered in the determination of the Company's deferred
tax asset valuation allowance. The valuation allowance has been provided for net
operating loss carry forwards for which recoverability is deemed to be
uncertain. The carrying value of the Company's net deferred tax assets assumes
that the Company will be able to generate sufficient future taxable income in
certain tax jurisdictions, based on estimates and assumptions. If these
estimates and related assumptions change in the future, the Company will be
required to adjust its deferred tax valuation allowances resulting in changes to
income tax expense in the Company's financial statements.
RESULTS OF OPERATIONS
Three Months Ended March 31, 2002 Compared to Three Months Ended March 31, 2001
Parking revenues for the second quarter of fiscal 2002 increased to $149.8
million from $148.8 million in the second quarter of fiscal 2001, an increase of
$1.0 million, or 0.6%. The increase primarily resulted from the USA Parking and
Park One of Louisiana acquisitions, which added $2.2 million of parking revenues
during the quarter. This was offset by a decrease of $1.1 million in parking
revenues in the New York area. Revenues from foreign operations amounted to
approximately $9.2 million for each of the quarters ended March 31, 2002 and
2001.
Management contract and other revenues for the second quarter of fiscal
2002 increased to $29.4 million from $25.2 million in the same period of fiscal
2001, an increase of $4.2 million, or 16.6%. The aforementioned acquisitions
added $1.5 million of management contract and other revenues during the quarter,
with the remainder of the increase resulting from new business growth.
Cost of parking in the second quarter of 2002 increased to $130.5 million
from $126.7 million in the second quarter of 2001, an increase of $3.8 million,
or 3.0%. This increase was due primarily to a $2.6 million, or 3.6% increase in
rent expense due to contractual increases, and a $1.4 million increase in
depreciation and amortization due to the addition of $33.2 million of contract
rights since the start of the fiscal year. Rent expense as a percentage of
parking revenues increased to 49.5% during the quarter ended March 31, 2002,
from 48.1% in the quarter ended March 31, 2001. Payroll and benefit expenses
were 18.5% of parking revenues during the second quarter of fiscal 2002 as
compared to 17.7% in the comparable prior year period. Cost of parking as a
percentage of parking revenues increased to 87.1% in the second quarter of
fiscal 2002 from 85.1% in the second quarter of fiscal 2001. The increase is due
to the inability of the Company to reduce the fixed expense component of its
cost structure to match the lower parking revenues resulting from the slowing
economy and the September 11, 2001, terrorist attacks.
Cost of management contracts in the second quarter of fiscal 2002 increased
to $13.3 million from $9.8 million in the comparable period in 2001, an increase
of $3.5 million, or 36.4%. The increase in cost was primarily caused by an
increase in workers compensation and health insurance costs. Cost of management
contracts as a percentage of management contract and other revenues increased to
45.4% for the second fiscal quarter of 2002 from 38.8% for the same period in
2001, due to the increase in the aforementioned items.
General and administrative expenses increased to $17.4 million for the
second quarter of fiscal 2002 from $16.1 million in the second quarter of fiscal
2001, an increase of $1.3 million, or 7.7%. This increase is primarily due to
the acquisitions of USA Parking System, Universal Parking System, Lexis Systems,
and Park One of Louisiana during the current fiscal year. General and
administrative expenses as a percentage of total revenues increased to 9.7% for
the second quarter of fiscal 2002 compared to 9.3% for the second quarter of
fiscal 2001.
Goodwill and non-compete amortization for the second quarter of fiscal 2002
decreased to $0.1 million from $3.0 million in the second quarter of fiscal
2001, a decrease of $2.9 million. With the adoption of SFAS No. 142 on October
1, 2001, the Company no longer amortizes goodwill.
Net property-related gains for the three months ended March 31, 2002
increased to $3.0 million from net property-related losses of $2.3 million in
the comparable period in the prior year. The Company sold its interest in the
Civic partnership during January 2002, which resulted in a gain of $3.9 million.
This gain was offset by $0.7 million of prepaid rent related to a location in
New York City which was written off due to condemnation of the lot. The
Company's property-related losses for the three months ended March 31, 2001 were
primarily comprised of a $2.3 million charge for early termination of an
unfavorable lease.
Interest income increased to $1.5 million for the second quarter of fiscal
2002 from $1.4 million in the second quarter of fiscal 2001, an increase of $0.1
million, or 2.3%.
Interest expense and dividends on Company-obligated mandatorily redeemable
convertible securities of a subsidiary trust decreased to $4.3 million for the
second quarter of fiscal 2002 from $6.8 million in the second quarter of fiscal
2001, a decrease of $2.5 million, or 36.5%. This decrease was primarily
attributable to the lower amount of overall debt outstanding during the current
quarter, coupled with lower interest rates. The weighted average balance
outstanding for the Company's debt obligations and convertible securities was
$377.9 million during the quarter ended March 31, 2002, at a weighted average
interest rate of 4.5% compared to $403.3 million during the quarter ended March
31, 2001 at an average interest rate of 6.6%.
Income taxes increased to $6.4 million for the second quarter of fiscal
2002 from $4.5 million in the second quarter of fiscal 2001, an increase of $1.9
million, or 42.6%. The effective tax rate for the second quarter of fiscal 2002
was 34.4% compared to 36.6% for the second quarter of fiscal 2001. Goodwill
amortization recognized in previous periods was primarily nondeductible for tax
purposes. With the adoption of SFAS No. 142 in October 2001, the Company no
longer amortizes goodwill, resulting in a reduction of its effective tax rate.
The Company recognized an extraordinary gain of $1.7 million, net of taxes
of $1.1 million, during the three months ended March 31, 2002 due to the
repurchase of 500,000 shares of its mandatorily redeemable preferred securities
(the "Preferred Securities") for $9.3 million.
Six Months Ended March 31, 2002 Compared to Six Months Ended March 31, 2001
Parking revenues for the first half of fiscal 2002 decreased to $297.1
million from $300.5 million in the first half of fiscal 2001, a decrease of $3.4
million, or 1.1%. The decrease primarily resulted from the effects of the
September 11, 2001, terrorist attacks, which resulted in a $6.5 million decrease
in New York region revenues. This was partially offset by $3.4 million of new
parking revenues from the USA Parking System and Park One of Louisiana
acquisitions. Revenues from foreign operations amounted to approximately $19.1
and $17.9 million for the six-month periods ended March 31, 2002 and 2001,
respectively.
Management contract and other revenues for the first half of fiscal 2002
increased to $58.9 million from $51.1 million in the same period of fiscal 2001,
an increase of $7.8 million, or 15.4%. The increase resulted primarily from the
addition of USA Parking System and Park One of Louisiana. This increase is also
partially attributable to certain locations that were previously operated as
leases and are now operated as management contracts.
Cost of parking in the first half of 2002 increased to $258.5 million from
$250.7 million in the first half of 2001, an increase of $7.8 million, or 3.1%.
This increase was due primarily to a $5.0 million, or 3.5%, increase in rent
expense due to contractual increases and new agreements, and a $2.4 million
increase in depreciation and amortization due to the addition of $33.2 million
of contract rights since the start of the fiscal year. Rent as a percentage of
parking revenues increased to 49.8% in the first six months of 2002 from 47.6%
in the same period of 2001. Payroll and benefit expenses were 18.7% of parking
revenues during the first half of fiscal 2002 compared to 17.9% in the
comparable prior year period. Cost of parking as a percentage of parking
revenues increased to 87.0% in the first half of fiscal 2002 from 83.4% in the
first half of fiscal 2001 due to the inability of the Company to reduce the
fixed expense component of its cost structure to match its lower parking
revenues resulting from the slowing economy and the September 11, 2001,
terrorist attacks.
Cost of management contracts in fiscal first half 2002 increased to $25.3
million from $20.0 million in the comparable period in 2001, an increase of $5.3
million, or 26.7%. The increase in cost reflects higher medical and workers
compensation claims by employees, both in total and as a percentage of
management contract revenue. Cost of management contracts as a percentage of
management contract and other revenues increased to 43.0% for the first half of
fiscal 2002 from 39.2% for the same period in 2001, primarily due to rising
insurance costs.
General and administrative expenses increased to $35.3 million for the
first six months of fiscal 2002 from $33.8 million in the first half of 2001, an
increase of $1.5 million, or 4.5%. This increase is due primarily to the
business acquisitions completed in the first half of fiscal 2002. General and
administrative expenses as a percentage of total revenues increased to 9.9% for
the first half of fiscal 2002 compared to 9.6% for the first half of fiscal
2001.
Goodwill and non-compete amortization for the six-month period ended March
31, 2002 decreased to $0.2 million from $6.0 million in the same period in 2001
due to the adoption of SFAS No. 142, effective October 1, 2001.
Net property-related gains for the six months ended March 31, 2002 amounted
to $7.0 million compared to $0.5 million for the comparable period in fiscal
2001. Current year gains include $4.6 million from the sale of a property in
Houston and $3.9 million from the sale of the Company's Civic partnership
interest, offset by $1.6 million of impairment charges for condemned locations.
For the same period in fiscal 2001, gains on sale of property of $5.5 million
were offset by impairment charges for leasehold improvements and intangible
assets totaling $1.2 million and lease termination charges of $3.8 million.
Interest income decreased to $2.8 million for the first half of fiscal 2002
from $3.0 million in the first half of fiscal 2001, a decrease of $0.2 million,
or 5.7%.
Interest expense and dividends on Company-obligated mandatorily redeemable
convertible securities of a subsidiary trust decreased to $9.0 million for the
first half of fiscal 2002 from $14.2 million in the first half of fiscal 2001, a
decrease of $5.2 million, or 36.3%. This decrease in interest expense was
primarily attributable to lower overall outstanding debt balances coupled with
lower interest rates during the period. The weighted average balance
outstanding under such credit facilities and convertible securities was $382.7
million during the six-month period ended March 31, 2002, at a weighted average
interest rate of 4.6% compared to $403.5 million during the same period ended
March 31, 2001 at an average interest rate of 6.8%.
Income taxes, excluding the extraordinary item and cumulative effect of
accounting change, increased to $13.6 million for the first half of fiscal 2002
from $12.7 million in the first six months of 2001, an increase of $0.9 million,
or 7.4%. The effective tax rate for the first half of fiscal 2002 was 34.6%,
compared to 38.5% for the first half of fiscal 2001. Goodwill amortization
recognized in previous periods was nondeductible for tax purposes. With the
adoption of SFAS No. 142 in October 2001, the Company no longer amortizes
goodwill, resulting in a reduction of its effective tax rate.
The Company recognized an extraordinary gain of $5.0 million, net of taxes
of $3.3 million, during the six months ended March 31, 2002, due to the
repurchase of 1,137,795 shares of its Preferred Securities for $19.3 million.
The Company recognized a loss from the cumulative effect of an accounting
change of $258 thousand, net of tax, during the six months ended March 31, 2001.
This loss resulted from the adoption of Staff Accounting Bulletin No. 101,
Revenue Recognition in Financial Statements, as of October 1, 2000.
LIQUIDITY AND CAPITAL RESOURCES
Operating activities for the six months ended March 31, 2002 provided net
cash of $43.2 million, compared to $24.6 million of cash provided by operating
activities for the six months ended March 31, 2001. Net earnings of $28.6
million and depreciation and amortization of $17.1 million, along with net
decreases in operating assets and net increases in operating liabilities
totaling $6.2 million were offset by $12.1 million of non-operating gains to
account for the majority of the cash provided by operating activities during the
first six months of fiscal 2002.
Investing activities for the six months ended March 31, 2002 used net cash
of $17.0 million, compared to net cash provided by investing activities of $4.5
million for the same period in the prior year. Acquisitions of $17.6 million,
purchases of contract and lease rights of $18.9 million and capital expenditures
of $12.9 million, offset by proceeds of $32.3 million from the disposition of
property and equipment, accounted for the majority of the cash used by investing
activities in the first six months of fiscal 2002. Proceeds of $17.0 million
from the disposition of property and equipment and $2.8 million of net
collections on notes receivable, offset by the purchase of property, equipment,
leasehold improvements, and contract rights of $16.2 million account for the
majority of the cash provided by investing activities in the first six months of
fiscal 2001.
Financing activities for the six months ended March 31, 2002 used net cash
of $26.7 million, compared to $30.2 million in the same period in the prior
year. Principal repayments on notes payable of $27.9 million and repurchase of
mandatorily redeemable preferred securities of $19.3 million, offset by net
borrowings under the revolving credit agreement of $23.5 million comprised a
majority of the cash used by financing activities for the six months ended March
31, 2002. Principal repayments on notes payable and capital lease obligations of
$29.2 million and the repurchase of $10.0 million of common stock, offset by net
borrowings under the revolving credit facility of $12.6 million account for the
majority of the cash used by financing activities during the six months ended
March 31, 2001.
In March 1999, the Company entered into a credit facility (the "Credit
Facility") initially providing for an aggregate availability of up to $400
million consisting of a five-year $200 million revolving credit facility
including a sub-limit of $40 million for standby letters of credit, and a $200
million five-year term loan. The Credit Facility bears interest at LIBOR plus a
grid-based margin dependent upon the Company achieving certain financial ratios.
The amount outstanding under the Company's Credit Facility was $236.5 million
with a weighted average interest rate of 3.3% as of March 31, 2002, including
the principal amount of the term loan of $100.0 million. The term loan is
required to be repaid in quarterly payments of $12.5 million through March 2004.
The aggregate availability under the Credit Facility was $40.0 million at March
31, 2002, which is net of $23.5 million of stand-by letters of credit. The
Credit Facility contains covenants including those that require the Company to
maintain certain financial ratios, restrict further indebtedness and limit the
amount of dividends paid.
The Company is required to maintain the aforementioned financial covenants
under the Credit Facility as of the end of each fiscal quarter. The Company was
in compliance with these financial covenants as of March 31, 2002; however,
there can be no assurance that the Company will be in compliance with one or
more of these covenants in future quarters. The Company continues to evaluate
various financing alternatives, including sale/leaseback opportunities, mortgage
financing and repurchases of its mandatory redeemable convertible securities, as
it seeks to optimize the rate, duration and mix of its debt.
If the Company identifies investment opportunities requiring cash in excess
of the Company's cash flows and the Credit Facility, the Company may seek
additional sources of capital, including seeking to further amend the existing
credit facility to obtain additional indebtedness. The Allright Registration
Rights Agreement, as noted under the caption "Risk Factors" in the Management's
Discussion and Analysis of Financial Condition and Results of Operations section
of the Company's Annual Report on Form 10-K for the year ended September 30,
2001, provided certain limitations and restrictions upon the Company's ability
to issue new shares of the Company's common stock. While a large number of
shares of common stock issued in the Allright Merger are still subject to the
Registration Rights Agreement, the restrictions on the Company's ability to
issue new shares of the Company's common stock expired in February 2002.
Depending on the timing and magnitude of the Company's future investments
(either in the form of leased or purchased properties, joint ventures, or
acquisitions), the working capital necessary to satisfy current obligations is
anticipated to be generated from operations and from the Company's Credit
Facility over the next twelve months. In the ordinary course of business, the
Company is required to maintain and, in some cases, make capital improvements to
the parking facilities it operates.
Future Cash Commitments
On January 18, 2000, the Company's board of directors authorized the
repurchase of up to $50 million in outstanding shares of the Company's capital
stock. The Company's bank lenders subsequently approved the repurchase program
on February 14, 2000. Subject to availability, the repurchases may be made from
time to time in open market transactions or in privately negotiated off-market
transactions at prevailing market prices that the Company deems appropriate. As
of March 31, 2002, the Company had repurchased 1.6 million shares of common
stock at a total cost of $28.0 million (average cost of $17.74 per share). As
of March 31, 2002, the Company had repurchased 1.1 million shares of the
Preferred Securities at a total cost of $19.3 million, thereby reducing debt
with a carrying value of $28.4 million.
The Company routinely makes capital expenditures to maintain or enhance
parking facilities under its control. The Company's capital expenditure budget
for fiscal 2002 is approximately $26 million.
The following tables summarize the Company's total contractual obligations
and commercial commitments as of March 31, 2002 (amounts in thousands):
Payments due by period
Less than 1-3 4-5 After 5
Total 1 year Years Years Years
Long-term debt $ 254,024 $ 50,732 $200,774 $ 1,853 $ 665
Capital lease obligations 6,139 3,112 2,654 268 105
Operating leases 1,309,114 222,808 337,414 248,101 500,791
Other long-term obligations 14,250 -- 14,250 -- --
---------- ---------- -------- -------- --------
Total contractual cash obligations $1,583,527 $ 276,652 $555,092 $250,222 $501,561
========== ========== ======== ======== ========
Amount of commitment expiration per period
Less than 1-3 4-5 After 5
Total 1 year Years Years Years
Unused lines of credit $39,994 $ -- $39,994 $ -- $ --
Standby letters of credit 28,848 26,816 1,330 702 --
Guarantees -- -- -- -- --
Other commercial commitments 6,023 3,383 2,640 -- --
------- ------- ------- ------ ------
Total commercial commitments $74,865 $30,199 $43,964 $ 702 $ --
======= ======= ======= ====== ======
Capital lease obligations include principal and interest payments. Other
commercial commitments include guaranteed minimum payments to minority partners
of certain partnerships.
Recent Events
In April 2002, the Company purchased four properties in Atlanta for $16.5
million, including acquisition costs. The purchase was funded through two notes
payable. The notes require the Company to make monthly interest payments at a
weighted average rate of one-month LIBOR plus 157.5 basis points, with the
principal balance due in April 2007.
Item 3. Quantitative and Qualitative Disclosure about Market Risk
-------------------------------------------------------------------------
Interest Rate Risk
The Company's primary exposure to market risk consists of changes in
interest rates on variable rate borrowings. As of March 31, 2002, the Company
had $236.5 million of variable rate debt outstanding under the Credit Facility
priced at LIBOR plus 87.5 basis points. Of this amount, $100.0 million is
payable in quarterly installments of $12.5 million and $136.5 million in
revolving credit loans are due in March 2004. The Company anticipates paying the
scheduled quarterly payments out of operating cash flow and, if necessary, will
renew the revolving credit facility.
The Company is required under the Credit Facility to enter into interest
rate protection agreements designed to limit the Company's exposure to increases
in interest rates. As of March 31, 2002, interest rate protection agreements had
been purchased to hedge $100 million of the Company's variable rate debt related
to its Credit Facility. These instruments were comprised of an interest rate
swap agreement under which the Company pays to the counterparty a fixed rate of
6.16% and receives a variable rate equal to LIBOR, and three separate $25
million interest rate cap agreements with rates of 8.0%, 8.0% and 8.5%. All of
these derivative instruments have terms consistent with the terms of the Credit
Facility and are accounted for as cash flow hedges.
The weighted average interest rate on the Company's Credit Facility at
March 31, 2002 was 3.31%. An increase (decrease) in LIBOR of 1% would result in
an increase (decrease) of annual interest expense of $2.1 million based on the
Company's outstanding Credit Facility balance of $236.5 million at March 31,
2002, less $25.0 million which is effectively fixed by the interest rate swap
agreement. Additional increases (decreases) in LIBOR would result in
proportionate increases (decreases) in interest expense until LIBOR exceeded
8.0% and 8.5%, at which point an additional $50.0 million and $25.0 million of
the balance, respectively, would be fixed by the interest rate cap agreements.
In March 2000, a limited liability company of which the Company is the sole
shareholder, purchased a parking structure for $19.6 million and financed $13.3
million with a five-year note bearing interest at one-month floating LIBOR plus
162.5 basis points. To fix the interest rate, the Company entered into a
five-year LIBOR swap, yielding an effective interest cost of 8.91% for the
five-year period. The notional amount of the swap is reduced in conjunction
with the principal payments on the related variable rate debt.
Foreign Currency Risk
The Company's exposure to foreign exchange risk is minimal. All foreign
investments are denominated in U.S. dollars, with the exception of Canada. As of
March 31, 2002, the Company has approximately CAD$ 1.8 million (US$ 1.2 million)
of cash denominated in Canadian dollars and US$ 2.6 million of cash denominated
in various other foreign currencies. The company has no foreign-denominated debt
instruments at March 31, 2002. The Company does not hold any hedging instruments
related to foreign currency transactions. The Company monitors foreign currency
positions and may enter into certain hedging instruments in the future should it
determine that exposure to foreign exchange risk has increased.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
-------- ------------------
The ownership of property and provision of services to the public entails
an inherent risk of liability. Although the Company is engaged in routine
litigation incidental to its business, there is no legal proceeding to which the
Company is a party, which, in the opinion of management, will have a material
adverse effect upon the Company's financial condition, results of operations, or
liquidity. The Company carries liability insurance against certain types of
claims that management believes meets industry standards; however, there can be
no assurance that any future legal proceedings (including any judgments,
settlements or costs) will not have a material adverse effect on the Company's
financial condition, liquidity or results of operations.
In connection with the merger of Allright Holdings, Inc. with a subsidiary
of the Company, the Antitrust Division of the United States Department of
Justice (the "Antitrust Division") filed a complaint in U.S. District Court for
the District of Columbia seeking to enjoin the merger on antitrust grounds. In
addition, the Company received notices from several states, including Tennessee,
Texas, Illinois, and Maryland, that the attorneys general of those states were
reviewing the merger from an antitrust perspective. Several of these states
also requested certain information relating to the merger and the operations of
Central Parking and Allright in the form of civil investigative demands.
Central Parking and Allright entered into a settlement agreement with the
Antitrust Division on March 16, 1999, under which the two companies divested a
total of 74 parking facilities in 18 cities, representing approximately 18,000
parking spaces. None of the states that reviewed the transaction from an
antitrust perspective became a party to the settlement agreement with the
Antitrust Division. The settlement agreement provides that Central Parking and
Allright may not operate any of the divested facilities for a period of two
years following the divestiture of such facility.
Item 4. Submission of Matters to a Vote of Security-Holders
------- ----------------------------------------------------------
The following proposals were approved at the Company's Annual Meeting of
Shareholders which was held at the Company's headquarters, 2401 21st Avenue
South, Third Floor, Nashville, Tennessee, on Tuesday, February 19, 2002:
1. The election of ten directors for the term ending at the Annual Meeting of
Shareholders to be held in 2003; each director receiving the following number of
total votes:
FOR AGAINST ABSTAIN
---------- ------- ---------
Monroe Carell 27,426,831 - 882,562
William J. Vareschi, Jr. 27,472,797 - 836,596
James H. Bond 27,461,129 - 848,264
William S. Benjamin 27,503,057 - 806,336
Cecil Conlee 27,506,827 - 802,566
Lewis Katz 25,179,815 - 3,129,578
Edward G. Nelson 27,506,142 - 803,251
William C. O'Neil, Jr. 27,504,874 - 804,519
Richard H. Sinkfield 27,502,770 - 806,623
Julia Carell Stadler 27,501,705 - 807,688
2. The approval of an amendment to the Company's 1995 Incentive and Nonqualified
Stock Option Plan for Key Personnel to increase the number of shares reserved
for issuance under the plan by 3,500,000 shares of common stock;
BROKER
FOR AGAINST NON-VOTE ABSTAIN
---------- --------- --------- -------
20,731,957 3,864,764 3,592,949 119,723
Item 6. Exhibits and Reports on Form 8-K
------- -------------------------------------
(a) Exhibits
None.
(b) Reports on Form 8-K
On January 14, 2002, the Company filed a current report on form 8-K
announcing its acquisition of Park One of Louisiana, LLC., incorporating the
text of a press release on that date.
On February 12, 2002, the Company filed a current report on form 8-K
announcing its results for the quarter ended December 31, 2001, incorporating
the text of a press release on that date.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned party duly authorized.
CENTRAL PARKING CORPORATION
Date: May 15, 2002 By: /s/ Hiram A. Cox
---------------------
Hiram A. Cox
Senior Vice President
and Chief Financial Officer