================================================================= ANC RENTAL BANKRUPTCY NEWS Issue Number 1 ----------------------------------------------------------------- Copyright 2001 (ISSN XXXX-XXXX) November 14, 2001 ----------------------------------------------------------------- Bankruptcy Creditors' Service, Inc. 609-392-0900 FAX 609-392-0040 ----------------------------------------------------------------- ANC RENTAL BANKRUPTCY NEWS is published by Bankruptcy Creditors' Service, Inc., 24 Perdicaris Place, Trenton, New Jersey 08618, on an ad hoc basis (generally every 10 to 20 days) as significant activity occurs in the Debtors' cases. Each issue is prepared by Peter A. Chapman, Editor. Subscription rate is US$45 per issue. Any re-mailing of ANC RENTAL BANKRUPTCY NEWS is prohibited. ================================================================= IN THIS ISSUE ------------- [00000] HOW TO SUBSCRIBE TO ANC RENTAL BANKRUPTCY NEWS [00001] BACKGROUND & DESCRIPTION OF ANC RENTAL CORPORATION [00002] ANC RENTAL'S JUNE 30, 2001 CONSOLIDATED BALANCE SHEET [00003] COMPANY'S PRESS RELEASE CONCERNING CHAPTER 11 PROCEEDINGS [00004] ANC RENTAL CHAPTER 11 DATABASE [00005] LIST OF ANC RENTAL'S 30 LARGEST UNSECURED CREDITORS [00006] DEBTORS' NOVEMBER CASH BUDGET & SECURED DEBT ANALYSIS KEY DATE CALENDAR ----------------- 11/13/01 Voluntary Petition Date 11/28/01 Deadline to provide Utilities with adequate assurance 11/28/01 Deadline for filing Schedules of Assets and Liabilities 11/28/01 Deadline for filing Statement of Financial Affairs 11/28/01 Deadline for filing Lists of Leases and Contracts 01/02/02 Deadline to make decisions about lease dispositions 02/11/02 Deadline to remove actions pursuant to F.R.B.P. 9027 03/13/02 Expiration of Debtors' Exclusive Plan Proposal Period 05/12/02 Expiration of Debtors' Exclusive Solicitation Period 11/12/03 Deadline for Debtors' Commencement of Avoidance Actions Organizational Meeting with UST to form Committees Bar Date for filing Proofs of Claim First Meeting of Creditors pursuant to 11 USC Sec. 341 ----------------------------------------------------------------- [00000] HOW TO SUBSCRIBE TO ANC RENTAL BANKRUPTCY NEWS ----------------------------------------------------------------- ANC RENTAL BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtors' cases. The subscription rate is $45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. To continue receiving ANC RENTAL BANKRUPTCY NEWS, please complete the form below and return it by fax or e-mail to: Bankruptcy Creditors' Service, Inc. 24 Perdicaris Place Trenton, NJ 08618 Telephone (609) 392-0900 Fax (609) 392-0040 E-mail: peter@bankrupt.com We have published similar newsletters tracking billion-dollar insolvency proceedings since 1990. Currently, we provide similar coverage about the chapter 11 cases involving Polaroid Corporation, Pacific Gas and Electric Company, Reliance Group Holdings & Reliance Financial, The FINOVA Group, Inc., Comdisco, Laidlaw, Safety-Kleen, Bridge Information Services, Imperial Sugar, The Loewen Group International, Inc., Vlasic Foods, AMF Bowling, Bethlehem Steel, LTV, Wheeling-Pittsburgh, Federal- Mogul, W.R. Grace & Co., Owens Corning, Armstrong World Industries, USG Corporation, Harnischfeger Industries, Inc., Exodus Communications, Winstar, Covad Communications, 360networks, ICG Communications, PSINet, Lernout & Hauspie & Dictaphone, Ames Department Stores, Service Merchandise, Fruit of the Loom, Pillowtex, Warnaco, Vencor, Inc., Sun Healthcare Group, Inc., Mariner Post-Acute & Mariner Health, Genesis Health & Multicare, and Integrated Health Services. ================================================================= [ ] YES! Please enter my personal subscription to ANC RENTAL BANKRUPTCY NEWS. Name: ---------------------------------------------- Firm: ---------------------------------------------- Address: ---------------------------------------------- ---------------------------------------------- Phone: ---------------------------------------------- Fax: ---------------------------------------------- E-Mail: ---------------------------------------------- ANC RENTAL BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtors' cases. The subscription rate is $45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. ----------------------------------------------------------------- [00001] BACKGROUND & DESCRIPTION OF ANC RENTAL CORPORATION ----------------------------------------------------------------- ANC RENTAL CORPORATION 200 S. Andrews Ave. Fort Lauderdale, Florida 33301 Telephone (954) 320-4000 Fax (954) 320-4077 http://www.ancrental.com Behind Hertz and Avis, ANC Rental is the world's third-largest publicly traded car rental company. ANC's operations include: * National Car Rental System, serving business travelers; and * Alamo Rent A Car, catering to leisure travelers. ANC operates, licenses, or franchises more than 3,400 locations worldwide, and maintains a fleet of more than 300,000 cars. Car rental outlets are generally located at on-airport and near- airport locations. Car rental facilities bearing ANC brand names are located in all 50 states of the United States, Canada, Mexico, and 64 other countries scattered across Europe, the Caribbean, Latin America, Asia, the Pacific Rim, Africa and the Middle East. National focuses on three types of customers: (a) Corporate Accounts -- National has had a strong presence in the corporate market for over 50 years and primarily serves its corporate renters via its sales force who contract and maintain relationships with corporate accounts. Emerald Club membership offers corporate renters a quick and easy paperless rental, their choice of vehicle at the Emerald Aisle and self-service fuel pricing which is designed to save the renter time in the rental return process by having National employees refuel the vehicle for the customer at local self-serve prices. (b) Emerald Club -- National Emerald Club members are served through a dedicated communication area at reservation centers and through special booking paths at the Nationalcar.com web site. In addition, National uses telesales and direct marketing efforts to reach and service small and mid-size accounts which are an important component of its mix of corporate business. (c) Other Frequent Renters -- National markets its products to frequent renters through television, newspapers, trade publications and direct marketing and partnership efforts. National's current campaign features the timesaving benefits of Emerald Club membership including: counter by-pass, vehicle choice, self-serve pricing for fuel and One Click Reservation(SM) internet reservations. Frequent renters are offered the unique features and benefits of the Emerald Club through enrollment as unaffiliated corporate members. Alamo targets three customer segments: (x) Domestic and International Tour Operators -- Tour operators create package tours by assembling various components of travel such as airfare, hotel, car rental and destination features. Alamo's sales force contracts with tour operators, typically for one year, to be a primary or secondary provider of car rental services for these tour operators' packaged vacations. In order to better serve the special needs of the tour operators, Alamo has a dedicated website just for tour operators called Tour.alamo.com. (y) Travel Agencies -- Alamo enjoys preferred relationships with large consortia groups such as American Express, Vacation.com and Carlson Wagonlit who offer Alamo car rental services through their extensive travel agency networks. Alamo markets to front-line travel agents through global distribution systems and its proprietary Alamo CASH-IN Club program whereby travel agents can become members and earn CASH-IN club points redeemable for merchandise at numerous retailers such as Home Depot, Sharper Image, Sam's Club and Wal-Mart. There are over 27,000 travel agents enrolled in this program. Alamo also markets its car rental services in trade publications and through industry trade shows such as ASTA and POW WOW. Telesales and direct marketing efforts are used to reach small and independent agencies. All travel agents can obtain Alamo information and products at the Company's TA.Alamo.com web site. (z) Direct Consumers -- Alamo markets to consumers using television, newspapers, specialized seasonal product offerings (such as ski products), targeted direct mail and e-mail and partnership efforts. Alamo's Drive Happy campaign, for example, included a product-based marketing proposition offering leisure travelers value and a hassle free rental experience at Alamo with Alamo's new QuickRent(SM) service. Management says a large portion of the success of Alamo's direct marketing is based on strong customer relationship management with customized product offerings enhanced by the use of customized segmentation tools. The direct consumer is served through Alamo's customer reservation centers and its Alamo.com web site. Both Alamo and National contract with and participate in association and affinity programs, including travel clubs, trade and professional associations and conventions, in order to reach members with special benefits and promotions. In addition, several of the programs provide renters with discounts and rewards at retail outlets, restaurants and travel clubs. Alamo and National participate in many airline frequent flyer and loyalty programs whereby renters can be rewarded with points, credits and rewards from travel partners such as American Airlines, Delta Air Lines, United Air Lines, and Hyatt Hotels. These relationships also provide Alamo and National with cooperative marketing opportunities. Additionally, both brands participate in certain credit card membership programs that provide special benefits to card members and joint marketing opportunities for the credit card issuer and ANC's car rental brand names. General Motors is ANC's principal supplier. At December 31, 2000, ANC employed approximately 20,000 associates worldwide, approximately 2,450 of whom were covered by 47 collective bargaining agreements. The Company also employs a substantial number of temporary and seasonal workers, and it engages outside services, as is customary in the industry, principally for the non-revenue movement of the rental fleet between locations. ANC's business, and particularly the leisure travel market, is highly seasonal. ANC's third quarter, which includes the peak summer travel months, has historically been its strongest quarter of the year. 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 has a material effect. The first and fourth quarters are generally the weakest because of limited leisure travel and a greater potential for weather conditions, either adverse or unseasonable, to impact the business. Many of the operating expenses such as rent, general insurance and administrative personnel remain fixed throughout the year and cannot be reduced during periods of decreased rental demand. ANC is a spin-off from AutoNation, Inc. On June 30, 2000, AutoNation distributed all of ANC's outstanding common stock to its stockholders and ANC became an independent public company. Shares in ANC trade on the NASDAQ under the ANCX ticker symbol. Events Leading to Chapter 11 Filings (1) Financing Difficulties Following the Spin-Off Transaction, ANC explored various alternatives in order to refinance its Senior Loan Agreement, because that facility's terms became increasingly onerous if not refinanced on or before June 2001. In October 2000, ANC received a commitment letter under which Lehman Brothers, Inc., committed to provide ANC with $400 million of senior secured credit facilities, consisting of a (i) revolving credit facility and (ii) term loan. ANC anticipated that the new $400 million facility would replace both the Senior Loan Agreement, the Borrowing Base Facility, and the Term Loan. In November and early December 2000, however, it became increasingly clear that Lehman would be unable to syndicate the $400 million committed credit facility. Based on discussions with Lehman, ANC concluded that the terms of any facility actually entered into would have been worse than the terms of the original agreement. As a result, in early December 2000, ANC decided that it would not pursue this $400 million facility and instead would continue to evaluate a variety of other re-financing alternatives. ANC's performance continued to worsen during the latter part of 2000. ANC's net loss for the quarter ended December 31, 2000 was approximately $44 million. Prior projections for the fourth quarter anticipated a net loss of up to $15 million. These results were due principally to a weaker than expected price environment in the North American airport market and a greater than anticipated average North American fleet during the fourth quarter. The combination of higher average fleet cost and lower than expected utilization for the fourth quarter caused the Company to be significantly below projected operating income levels. In March and April of 2001, in order to generate additional liquidity ANC completed a series of sale-leaseback transactions in which it sold substantially all of its real estate and then leased the property back. These transactions generated net proceeds of approximately $110.3 million, a portion of which was used to pay down the Borrowing Base Facility in order to release the real estate collateral which was sold. Under the terms of the Senior Loan Agreement, ANC would have been required to use $70 million of the proceeds of the sale leaseback transaction to repay amounts outstanding under the Senior Loan Agreement. However, ANC required these funds in the business and payment was deferred until September 30, 2001 when the Debtors projected that cash flow from operations would permit this payment. At the same time, Liberty Mutual demanded additional collateral as a precondition to maintaining or renewing existing surety bonds or issuing new bonds. As a result, ANC, Lehman and Liberty agreed that Lehman and Liberty would share a third- priority security interest in a package of Corporate Collateral (in all non-fleet assets of ANC and the Guarantors and 65% of the stock of certain foreign subsidiaries of ANC and Guarantors), as well as the pledge of the limited partnership interests of certain fleet-related special purpose entities and the equity of these entities' general partners (but not the general partnership interests in these entities). After lengthy negotiations among all of the parties involved (including parties required to consent), the grant of collateral to Lehman and Liberty closed on August 30, 2001. "Certain of these security interests may be subject to avoidance pursuant to section 547 of the Bankruptcy Code," the Company says in its first-day papers filed with the Bankruptcy Court. In addition, in June 2001, ANC determined that it would be unable to satisfy certain financial covenants contained in the Borrowing Base Facility as well as its other debt facilities. As a result, on June 29, 2001, ANC obtained amendments from its lenders under these facilities which provided additional flexibility under the covenants for the quarters ended June 30, 2001 and September 30, 2001, as well as similar amendments from other lenders and credit supporters, some of which only provided amendments for the quarter ended June 30. By mid August 2001, ANC informed Lehman that it might not be able to make the $70 million payment and on August 29, 2001 forwarded Lehman updated projections showing that ANC would in fact be unable to make such payment. (b) Pre-Petition Restructuring Efforts As a result of ANC's increasing liquidity problems and other operating difficulties, beginning in February 2001 ANC began to consider the sale of all or part of ANC or a significant investment by a third party. ANC retained Lehman to lead this effort. ANC received non-binding letters of intent and offer letters from a variety of third parties, including private equity firms and other companies involved in the car rental industry. These included preliminary non-binding offers to purchase the Alamo brand, the National brand, the international business, and the entire company, as well as preliminary non-binding offers to make equity investments. A number of these parties conducted substantial due diligence, including extensive meetings with ANC's management. On the morning of September 11, 2001, ANC received from one of those parties the first draft of their proposed definitive purchase and sale agreement. (c) Effect of September 11th on the Debtors' Operating Performance and Restructuring Efforts The terrorist attacks in New York City and Washington, D.C. on September 11, 2001 had a significant impact on ANC's operations. The terrorist attacks caused major U.S. airlines to dramatically reduce their airline capacity and prompted passengers worldwide to postpone or cancel their U.S. airline travel plans. Because approximately 90% of ANC's car rental transactions are linked to deplaning airline passengers, the negative impact on car rental transactions was direct and immediate. On September 12, 2001, the day following the terrorist attacks, the third-party withdrew its due diligence team and put the negotiations with ANC on indefinite hold. On September 17 when the stock market reopened, ANC's stock price dropped from $3.52 to $1.75. As a result of the events of September 11, ANC began to institute initiatives, including the reduction of its fleet by 25 to 35%, the preparation of a revised strategic and operating plan, and the execution of other cost reduction initiatives. On September 24, 2001, the day it was announced that the Debtors were undertaking the foregoing initiatives, ANC's common stock fell over 45% and closed at $0.56. On September 28, 2001, ANC obtained amendments from its senior lenders under the Borrowing Base Facility and the Supplemental Facility which waived compliance with the previously amended September 30, 2001 covenants for an additional 45 days. ANC also obtained similar amendments from its other lenders and credit supporters, all of whom included or incorporated by reference the financial covenants in the senior facilities. As part of the amendments, the aggregate commitments under the $175 million Borrowing Base Facility were reduced to $70 million and the amount outstanding was frozen at $64 million. The due date for the Lehman $70 million payment was extended until November 30, 2001. Management Changes In January 2001, Michael Karsner stepped down as president and CEO of ANC. Michael S. Egan, then ANC's chairman, was named ANC's new chief executive officer. Mr. Egan also continued to serve as chairman of ANC's board of directors. On September 24, 2001, ANC's board of directors appointed William N. Plamondon, III as "Chief Restructuring Officer" of the company. At the time, Mr. Plamondon was a director of ANC, the chairman of ANC's audit committee, and a consultant to Ernst & Young Capital Advisors, and was a former president of Budget Rent-A-Car Corporation. (Mr. Plamondon is no longer a consultant to Ernst & Young Capital Advisors or a member of ANC's Audit Committee). The Board authorized Mr. Plamondon to develop a turnaround restructuring plan for the company. In addition, in late September 2001, ANC retained Lawrence J. Ramaekers, a former principal of Jay Alix & Co., as a consultant to work closely with Mr. Plamondon in the preparation of the company's new turnaround strategy. Mr. Ramaekers has served as President and Chief Operating Officer of National Car Rental System, Inc., CEO of United Companies Financial Corporation, CEO of Family Restaurants, Inc., CEO of Umbro International, Inc., CEO of Centennial Technologies, Inc. and CEO of Medical Resources, Inc. and as an advisor to numerous public and non- public companies. In October 2000, Mr. Ramaekers was honored as the first recipient of the Lifetime Achievement award from the Turnaround Management Association, the trade organization representing turnaround professionals worldwide. On October 24, 2001, Mr. Ramaekers was appointed ANC's President and Chief Operating Officer. Messrs. Plamondon and Ramaekers, together with the support of the ANC Board, management and outside professionals, have been working diligently to formulate a restructuring plan that will resolve the Debtors' liquidity problems and enable the Debtors to continue as a going concern. Management and the board of directors view these chapter 11 filings as a proactive and positive step for ANC. The restructuring program currently being implemented is designed to make ANC more efficient and competitive in today's vastly changed economic and travel landscape. "We anticipate emerging a stronger company, better positioned to serve leisure and business customers for years to come," ANC says. ----------------------------------------------------------------- [00002] ANC RENTAL'S JUNE 30, 2001 CONSOLIDATED BALANCE SHEET ----------------------------------------------------------------- ANC RENTAL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS At June 30, 2001 ASSETS Cash and cash equivalents.................... $ 96,600,000 Restricted cash and cash equivalents......... 334,500,000 Receivables, net............................. 398,200,000 Prepaid expenses............................. 61,900,000 Vehicles, net................................ 5,262,100,000 Property and equipment, net.................. 475,400,000 Intangible assets, net....................... 342,000,000 Other assets................................. 101,700,000 -------------- Total assets....................... $7,072,400,000 ============== LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable............................. 273,800,000 Accrued liabilities.......................... 208,500,000 Insurance reserves........................... 283,600,000 Vehicle debt................................. 4,728,900,000 Other debt................................... 289,300,000 Deferred income taxes........................ 103,600,000 Other liabilities............................ 364,700,000 -------------- Total liabilities.................. 6,252,400,000 -------------- Commitments and contingencies Shareholders' equity: Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; none issued.............................. -- Common stock, par value $.01 per share; 250,000,000 shares authorized; 45,203,565 issued and outstanding........ 500,000 Additional paid-in capital................. 906,700,000 Retained earnings (deficit)................ (49,600,000) Accumulated other comprehensive loss....... (37,600,000) -------------- 820,000,000 -------------- Total liabilities and equity....... $7,072,400,000 ============== ----------------------------------------------------------------- [00003] COMPANY'S PRESS RELEASE CONCERNING CHAPTER 11 PROCEEDINGS ----------------------------------------------------------------- ANC Rental Corporation Announces Plan to Reorganize Under Chapter 11; Filing Will be Transparent to Alamo and National Customers FORT LAUDERDALE, Florida -- November 13, 2001 -- ANC Rental Corporation (Nasdaq:ANCX), the parent company of Alamo Rent A Car and National Car Rental, filed voluntary petitions today for reorganization under Chapter 11 of the U.S. Bankruptcy Code with the U. S. Bankruptcy Court in Wilmington, Delaware. The protection of Chapter 11 allows ANC to reorganize its business operations and finances. The company plans to use existing cash, revenue generated from normal business activities, and the benefits of relief opportunities provided by Chapter 11 to finance operations through this period. ANC's filing includes its U.S. operating subsidiaries, Alamo, National and Alamo Local Market, and several other domestic entities. It does not include its International or Canadian operations, or its independent National franchisees. The Chapter 11 filing will be seamless to customers, who will continue to receive superior service without interruption. All existing and future reservations will be honored as usual. Post-petition obligations to vendors will be paid promptly in the normal course of business. Employees will continue to receive full salary, health and welfare benefits. ANC Rental Corporation's Chairman and CEO Michael Egan explained, "The drastic decline in travel after September 11 has taken a tremendous toll on our business, and our current capital and expense structure cannot absorb the shortfall. As a result, we are seeking the protection and relief provided by Chapter 11 to allow us to continue serving customers while we stabilize the business. This filing is a positive and proactive step for ANC. It allows us to restructure our balance sheet, improve our operations and position ourselves for future profitability while continuing to serve customers with our traditional high level of service and quality." Mr. Egan also expressed his complete confidence in Mr. Larry Ramaekers who was elected president of the company and has had a wealth of experience in leading turn-around situations. Mr. Ramaekers said, "The company has two excellent brands, each serving a unique market. With the continued support of our talented workforce and loyal customers, we fully expect to regroup financially and strategically, and to emerge from these proceedings a stronger and more financially sound company." In recent weeks, ANC has streamlined its employee workforce in both the field and home office, restructured its senior management and merged the Alamo and National sales force. The opportunities afforded ANC through Chapter 11 give the company the tools to accelerate other components of its current restructuring plan, to decrease its capital costs and to greatly reduce its other costs of operations. ANC Rental Corporation, headquartered in Fort Lauderdale, is one of the world's largest car rental companies with annual revenue of approximately $3.5 billion in 2000. ANC Rental Corporation, the parent company of Alamo and National, has more than 3,000 locations in 69 countries and employs approximately 19,000 associates worldwide. ----------------------------------------------------------------- [00004] ANC RENTAL CHAPTER 11 DATABASE ----------------------------------------------------------------- Debtor entities filing separate chapter 11 petitions: Case No. Debtor Entity -------- ------------- 01-11196 ARG Reservation Services, LLC 01-11197 Alamo Rent-A-Car, LLC 01-11199 Rental Liability Management Holdings, LLC 01-11200 ANC Rental Corporation 01-11201 ANC Financial Properties, LLC 01-11202 ANC Payroll Administration, LLC 01-11203 ARC-TM Properties, LLC 01-11204 NCR Affiliate Servicer Properties, LLC 01-11205 Alamo Rent-A-Car Management, LP 01-11206 ANC Financial, LP 01-11207 ANC Information Technology, LP 01-11208 ANC Management Services, LP 01-11209 ANC-TM Management, LP 01-11210 NCRAS Management, LP 01-11211 SRAC Management, LP 01-11212 Alamo International Sales, Inc. 01-11213 ANC Aviation, Inc. 01-11214 ANC Collector Corporation 01-11215 ANC Financial Corporation 01-11216 ANC Financial GP Corporation 01-11217 ANC-GP, Inc. 01-11218 ANC Information Technology, Inc. 01-11219 ANC Information Technology Holding, Inc. 01-11220 ANC IT Collector Corporation 01-11221 ANC Management Services Corporation 01-11222 ARC-GP, Inc. 01-11223 ARC-TM, Inc. 01-11224 ARI Fleet Services, Inc. 01-11225 Auto Rental, Inc. 01-11226 Car Rental Claims, Inc. 01-11227 Claims Management Center, Inc. 01-11228 National Car Rental Licensing, Inc. 01-11229 National Car Rental System, Inc. 01-11230 Spirit Leasing, Inc. 01-11233 Liability Management Companies Holding, Inc. 01-11234 NCR Affiliate Servicer, Inc. 01-11235 NCRAS-GP, Inc. 01-11236 NCRS Insurance Agency, Inc. 01-11237 Post Retirement Liability Management, Inc. 01-11238 Rental Liability Management, Inc. 01-11239 Republic Fiduciary, Inc. 01-11240 Republic Guy Salmon Partner, Inc. 01-11241 SRAC-GP, Inc. 01-11242 SRAC-TM, Inc. Petition Date: November 13, 2001 U.S. Bankruptcy Court: United States Bankruptcy Court District of Delaware 824 Market Street, Fifth Floor Wilmington, Delaware 19801 Telephone (302) 252-2900 Bankruptcy Judge: The Honorable Mary F. Walrath Debtors' Lead Counsel: Brad Eric Scheler, Esq. Matthew Gluck, Esq. Alan N. Resnick, Esq. Gerald C. Bender, Esq. Brian D. Pfeiffer, Esq. Craig M. Price, Esq. FRIED, FRANK, HARRIS, SHRIVER & JACOBSON One New York Plaza New York, NY 10004 Telephone (212) 859-8000 Fax (212) 859-4000 Debtors' Local Counsel: Bonnie Glantz Fatell, Esq. Mark J. Packel, Esq. BLANK ROME COMISKY & MCCAULEY LLP 1201 Market Street, Suite 2100 Wilmington, DE 19801 Telephone (302) 425-6423 Fax (302) 425-6464 Debtors' Special Counsel: Thomas R. Mounteer, Esq. Judith Farrand, Esq. Roberta Barkman, Esq. Donna Taylor, Esq. PAUL HASTINGS JANOFSKY & WALKER LLP 1299 Pennsylvania Ave., NW, 10th Floor Washington, DC 20004-2400 Telephone (202) 508-9554 Fax (202) 508-9700 U.S. Trustee: United States Trustee for Region III 844 King Street, Suite 2313 Lockbox 35 Wilmington, Delaware 19801-3519 Telephone (302) 573-6491 Fax (302) 573-6497 ----------------------------------------------------------------- [00005] LIST OF ANC RENTAL'S 30 LARGEST UNSECURED CREDITORS ----------------------------------------------------------------- Entity Nature Of Claim Claim Amount ------ --------------- ------------ Lehman Brothers Debt $203,544,444 Robert Swindell Sheraton Manhattan 790 7th Avenue New York, New York Tel: 212-521-3300 Fax: 212-492-2438 General Motors Corporation Debt $35,676,507 300 Renaissance Center Detroit, MI 48265 Tel: 313-556-5000 Fax: 313-556-5158 Perot Systems (Reston VA) Trade $6,263,570 1801 Robert Fulton Drive Reston, VA 20191 Tel: 927-577-0000 Fax: 927-340-6791 Gerrit Dieperink Insurance Claim $5,201,610 Robert Glazier, Esq. Settlement The Ingram bldg. 25 SE 2nd Avenue, Suite 1020 Miami, FL 33131 Tel: 305-372-5900 Fax: 305-372-5904 Walt Disney World Co Trade $4,400,000 PO Box 911001 Lake Buena Vista, FL 32891 Tel: 407-824-2528 Fax: 407-828-4788 West LB Interest rate floor $2,718,548 Alan Bookspan 1211 Avenue of the Americas New York, NY 10036 Tel: 212-852-6027 Fax: 212-852-6307 American Broadcasting Trade $1,539,763 Company PO Box 10481 Newark, NJ 07913 Tel: 212-456-7777 Fax: 212-916-7709 Sabre Group Inc. Trade $1,153,421 7285 Collection Center Drive Chicago, IL 60693 Tel: 817-963-2596 Fax: 817-264-6582 Media Edge Trade $1,128,720 PO Box 751731 Charlotte, NC 28275 Tel: 949-754-2000 Fax: 949-754-2006 Delta Airlines Inc. Trade $838,296 PO Box 105531 Atlanta, GA 30392 Tel: 404-715-2600 Fax: 888-286-3163 American Airlines Inc. Trade $823,332 PO Box 70588 Chicago, IL 60673 Tel: 918-254-3549 Yellow Pages Media 18201 Trade $764,732 Von Karman Avenue, #200 Irvine, CA 92612 Tel: 949-854-7744 Fax: 949-851-3046 Clark McDonald Employment agreement $679,561 PO Box 2474 Ft. Lauderdale, FL 33303 Tel: 954-763-2954 US Airways Trade $599,500 PO Box 640266 Pittsburgh, PA 15264 Tel: 703-872-7000 Fax: 703-294-5097 Worldspan Trade $596,904 Drawer CS 198537 Atlanta, GA 30084 Tel: 770-563-7522 Fax: 770-563-7020 Gauleo International Trade $568,683 PO Box 95319 Chicago, IL 60694 Tel: 847-518-4605 Fax: 847-518-4085 Continental Airlines Inc. Trade $471,197 O/S Sales & Service PO Box 0201970 Houston, TX 77216 Tel: 713-324-5000 Fax: 713-324-5924 Amadeus Global Travel Trade $451,979 Distribution SA Salvador De Madariaga 1 Madrid 28027 Tel: 34-915-820-100 Fax: 34-915-821-237 Japs Olson Company Trade $437,953 7500 Excelsior Blvd. St. Louis Park, MN 55426 Tel: 612-522-4461 Fax: 952-912-1900 Hewlett Packard Trade $417,740 PO Box 75629 Charlotte, NC 28275 Tel: 800-325-5372 Fax: 404-648-8201 Electronic Date Systems Trade $414,141 Tom Bennett c/o National Car Rental 7700 France Ave. S Edina MN 55435 Tel: 927-605-3363 Fax: 972-605-3329 Southwest Airlines Inc. Trade $403,190 Headquarters PO Box 97749 Dallas, TX 7397 Tel: 214-792-4917 Fax: 214-792-7495 United Airlines Trade $378,483 PO Box 74688 Chicago, IL 60675 Tel: 847-700-4000 Fax: 847-700-7495 IBM Corp. Trade $376,184 91222 Collections Dr Chicago, IL 60693 Tel: 877-426-6006 Fax: 914-765-4245 Northwest Airlines, Inc. Trade $357,951 NW 8550 PO Box 1450 Minneapolis, MN 55435 Tel: 612-830-2550 Fax: 612-830-2548 Karsner, Michaels S. Severance Agreement $351,425 41 South Compass Drive Fort Lauderdale, FL 33308 Tel: 954-493-7365 Marketing Innovators Trade $340,494 International, Inc. 9701 West Higgins Road Suite 400 Rosemont, IL 60018 Tel: 800-543-7373 Fax: 847-696-3194 MLT Inc. Trade $323,825 5130 Highway 101 Minnetonka, MN 55345 Tel: 952-474-2540 Fax: 701-420-6270 Travelocity Com Trade $318,575 4200 Buckingham Blvd. MD 1400 Fort Worth, TX 76155 Tel: 817-785-8000 Accenture Trade $313,000 PO Box 70629 Chicago, IL 60673 Tel: 312-693-0161 Fax: 312-737-1434 Primenet Marketing Trade $312,083 Services MB CB 0010 PO Box D-1164 Minneapolis, MN 55480 Tel: 651-405-4000 Fax: 651-405-4053 City & County of Denver Trade $304,795 Denver International Airport PO Box 792065 Denver, CO 80249 Tel: 303-342-2200 Bank One Trade $287,946 235 West Schrock Road Westerville, OH 43081 Tel: 800-310-1111 GATX Capital Trade $262,656 PO Box 862058 Orlando, FL Tel: 813-289-7000 Fax: 813-281-1919 Consolidated Fleet Trade $237,798 Operations 100 Renaissance Center Detroit, MI 48265 Tel: 313-667-9467 ----------------------------------------------------------------- [00006] DEBTORS' NOVEMBER CASH BUDGET & SECURED DEBT ANALYSIS ----------------------------------------------------------------- ANC and certain of its affiliates are party to three credit facilities that fund their non-vehicle domestic working capital needs: (A) The Borrowing Base Facility -- The Amended and Restated Credit Agreement, dated as of June 30, 2000, among ANC and Congress Financial Corporation, as administrative agent and collateral agent, is a revolving facility in an aggregate principal amount not to exceed $70 million (originally $175 million). The Borrowing Base Facility is guaranteed by most of ANC's domestic subsidiaries, as Guarantors. The Borrowing Base Facility is secured by a first-priority security interest in all non-fleet assets of ANC and the Guarantors and 65% of the stock of certain foreign subsidiaries of ANC and/or the Guarantors. On September 28, 2001, the Borrowing Base Facility was amended to prohibit ANC from borrowing additional amounts or issuing additional letters of credit under the Borrowing Base Facility without the consent of the majority of the lenders thereunder. As of the Petition Date, no additional advances have been made under the Borrowing Base Facility to ANC, and the entire amount outstanding ($64 million) consists of contingent letters of credit. On or about October 15, 2001 these agreements were amended to include a Deposit and Control Agreement covering each deposit account of the Debtors. (B) The Supplemental Facility -- a revolving facility, which converted into a two-year term loan maturing on May 31, 2003, provided by a syndicate of lenders led by Lehman Brothers, Inc., as administrative agent. Pursuant to that certain Collateral and Guarantee Agreement, dated June 30, 2000, the Term Loan is guaranteed by the Guarantors and is secured by a second-priority security interest in the Corporate Collateral. As of the Petition Date, the Debtors had approximately $40 million outstanding under the Term Loan. (C) The Senior Loan Agreement -- The Amended and Restated Senior Loan Agreement, dated as of June 30, 2000, as amended, among ANC and Lehman is presently in an aggregate principal amount of $200 million (originally, $225 million). The loan is convertible, at Lehman's option, into exchange notes issued under an indenture, which notes ANC has agreed to register with the SEC at the request of Lehman. On August 30, 2001, ANC and the Guarantors granted a third-priority security interest in the Corporate Collateral to the lenders under the Senior Loan Agreement. Also, the lenders under the Senior Loan Agreement received a pledge of the limited partnership interests in certain fleet finance special purpose entities and the equity of the general partners of these special purpose entities (but not the general partnership interests in these entities). As of the Petition Date, the Debtors had approximately $203.5 million outstanding under the Senior Loan Agreement. The Debtors tell Judge Walrath that they will present the bankruptcy court with a request for authority to dip into their secured Lenders' Cash Collateral. Through the end of the month, the Company's cash position is okay, demonstrated by this November Cash Budget: ANC RENTAL CORPORATION Cash Projection November 13, 2001 to November 30, 2001 Beginning Cash Available $100,000,000 ------------ US Receipts Rental Revenue 101,155,000 Alamo Local 15,000,000 Accounts Receivable 10,925,000 ------------ TOTAL US RECEIPTS $127,080,000 ------------ US Disbursements Fleet Operating Expenses $14,841,000 Personnel & Payroll 19,871,000 Travel, Meals and Entertainment 297,000 Transaction / Variable Expenses Fuel 6,033,000 Airport/Agency Concession 0 Auto Liability 4,578,000 Other (4,135,000) Facility Fixed 10,711,000 Other Operating Expense 6,607,000 TA/TO Commissions 5,276,000 Advertising 1,150,000 IT Consulting 2,089,000 IT Other 3,232,000 Car Rental/Sales Tax 20,304,000 Professional Fees (Normal) 1,250,000 Professional Fees (Bankruptcy) 0 Other Non-Operating 3,232,000 Liability Insurance Program 10,000,000 ------------ Total Operating Expense $105,336,000 ------------ US Capital Expenditures 750,000 ------------ TOTAL US CASH DISBURSEMENTS $106,086,000 ------------ Funding for Europe & Canada 6,000,000 ------------ TOTAL DISBURSEMETS $112,086,000 ------------ NET RECEIPTS $14,994,000 ------------ Ending Cash Balance $114,994,000 ============ The Debtors indicate that they will argue their Secured Lenders' interests in the Cash Collateral are adequately protected, and supply the Court with their computations to support their contention that the Lenders' are oversecured with an ample equity cushion: ANC RENTAL CORPORATION Secured Asset Analysis As of October 31, 2001 Secured Assets Cash $100,000,000 (A) Net Receivables 155,669,000 Net Inventory 4,541,000 Net Property and Equipment 247,278,000 Net Capitalized Software 153,000,000 ------------ Total 660,488,000 Net Goodwill 84,855,000 Pledge of Foreign Stock 253,023,000 (B) ------------ Total Secured Assets $998,366,000 Secured Creditors Borrowing Base Facility $64,000,000 Supplemental Facility 40,000,000 August 30 Pledged Security Interests 350,000,000 (C) ------------ Total Secured Obligations $454,000,000 ------------ Excess of Secured Assets over Secured Obligations $544,366,000 ============ Notes: (A) As of November 9, 2001. (B) Equity book value at October 31, 2001 of foreign subsidiaries, including goodwill. (C) Certain of these security interests may be subject to avoidance pursuant to section 547 of the Bankruptcy Code. The Company reserves the right to contest such security interests. *** End of Issue No. 1 ***