Coach USA, Inc.

views updated Jun 11 2018

Coach USA, Inc.

One Riverway, Suite 500
Houston, Texas 77057
U.S.A.
Telephone: (713) 888-0104
Fax: (713) 888-0218
Web site: http://www.coachusa.com

Wholly-Owned Subsidiary of Stagecoach Group plc
Incorporated: 1995
Employees: 12,450
Sales: £682.3 million ($995.5 million)
NAIC: 485111 Mixed Mode Transit Systems

Although it has cornered a meager 2 percent share of the North American motorcoach business, Coach USA, Inc., can claim leadership of this highly fragmented, $40 billion industry. The company also ranks as one of the five largest private sector providers of commuter and transit motorcoach services in Canada and the United States. Headquartered in Houston, Texas, Coach USA also provides airport ground transportation, paratransit, taxi, and other related passenger ground transportation services. Altogether, its fleet encompassed about 7,600 motorcoaches, minibuses, and vans as well as 6,700 limousines and taxicabs. The company was acquired by Stagecoach Group plc, a Scottish transportation concern, in 1999. By 2003, Coach USA comprised about one-third of Stagecoach’s business.

Origins As a Roll-Up: 1995

Founded in September 1995, Coach USA was the creation of a merchant banking firm, Notre Capital Ventures II, L.P. (Notre) a Houston, Texas-based organization recognized for its successful “roll-ups,” in which several choice smaller companies within a growth industry are identified and then combined to form one large company. Major funding is then established through the sale of stock. For a decade or more, principals at Notre had worked at various accounting and acquisition functions related to the waste industry, which had undergone extensive consolidation. That successful model was applied to roll-up ventures in other industries. The Notre group was responsible for the public offerings of U.S. Delivery Systems, Physicians Resource Group, Allwaste, Sanifill, and American Medical Response. They focused on industries that were very large, very fragmented, with businesses that were stable from a non-cyclical and profit margin standpoint. The criteria utilized by Notre for selecting individual companies within various industries has included profitability, sizable operations, a long track record, and demonstrated leadership and entrepreneurial management.

By the mid-1990s, the Notre management team identified the motorcoach industry as “ripe for consolidation,” according to Larry Plachno of the National Bus Trader. Within the United States the motorcoach industry primarily offered three types of services: recreation and excursion (charter, tour and sightseeing), commuter and transit, and regularly scheduled intercity service. In 1996, the highly fragmented industry accounted for approximately 5,000 motorcoach operators, which collectively generated roughly $20 billion in annual revenues. With the U.S. travel and tourism industry growing substantially, large organizations such as AAA and the American Association of Retired Persons, as well as convention organizers, were targeted by chartering companies as potential customers. Furthermore, due to the growing numbers of tourists from Europe and Asia, in particular, the motorcoach industry was viewed by the investors as a potentially lucrative market.

Notre management first opted to concentrate on motorcoach businesses that specialized in the charter and tour market, along with privatized transit and commuter service, rather than companies in the scheduled intercity bus service market. Also, they anticipated future expansion due to declining transit funding of capital intensive operations by state and local governments, which would eventually steer transit agencies to the more competitive privatized companies. Management forecast a scenario where sizable federal funding available for subsidizing commuter, transit, and ancillary services, such as paratransit services required under the Americans with Disabilities Act, would diminish. By merging a number of companies they could benefit by the large scale of their operations, qualifying them for lower equipment and insurance costs, financing costs, and other cost advantages.

Going Public: 1996

Coach USA went public in May 1996, with an initial offering of 3,600,000 shares priced at $14 per share. Coach USA was formed with six initial “founding companies” which were well established in the motorcoach industry: Suburban Transit Corp. of New Brunswick, New Jersey; Gray Line of San Francisco, California; Leisure Time Tours in Mahway, New Jersey; Community Bus Lines in Passaic, New Jersey; Adventure Trails in Atlantic City, New Jersey; and Arrow Stage Line in Phoenix, Arizona. The acquisitions were valued at $88.4 million. Forty million passengers were accommodated annually by these companies equipped with a combined force of 760 coaches. Owners of the merging companies exchanged their corporate stock for stock in Coach USA, which gave the company ownership of equipment as well as the individual businesses. Coach USA espoused a decentralized management philosophy. Their arrangement allowed previous owners to continue as presidents of the acquired companies so that the new consolidated company gained from experienced management in localized operations. Almost half of the stock holdings were held by the founding companies following the consolidation. The individual companies, including most of the later acquisitions, were restructured as subsidiaries of Coach USA, retaining their original identities and operating practices.

Using Notre Capital’s effective management model, the team was split into an operational management team and an acquisition management team. Heading the operations team, John Mercandante—industry veteran and prior owner of Adventure Trails—became the first Coach USA president and chief operating officer. Local operators continued to identify candidates for corporate management, who focused on the acquisition program and coordinated equipment sharing among the various companies, set safety standards, and conducted financing procedures and vendor contacts. This arrangement allowed entrepreneurs at the acquired companies to continue to deal with day-to-day operations, including customer relationships, equipment utilization, and local pricing. Former Arthur Anderson partner Richard H. Kristinik was named chairman and chief executive officer of the company, responsible for leading strategic initiatives and coordinating acquisition activities and negotiations. The company’s executive management team consisted of eight professionals, including CFO Larry King, Senior Vice-President and Corporate Development Officer Frank Gallagher, and Senior Vice-President and General Counsel Doug Cerney.

As Kristinik told John O’Hanlon of the Wall Street Corporate Reporter, “We think our decentralized management philosophy is one of the keys to our success. It is a key for Coach USA being able to attract new companies to become part of Coach USA.... [An owner-operator] can sell his company, enjoy the benefit of selling his company at capital gains rates, and continue to be president of his company.” Kristinik also stated that the decentralized management philosophy was also important in remaining close to the customer by keeping the “former owner-operator entrepreneur in his own backyard, serving the customer and growing the business.”

In an effort to begin strengthening Coach USA’s geographical position a second stock offering was made in November 1996, followed by the addition of six companies that were merged into Coach USA, including American Bus Lines Inc. of Miami, Gray Line and Texas Bus Lines of Houston, KT Contract Services of Las Vegas, and California Charter Inc. of Los Angeles and San Diego. The Yellow Cab Service companies of Houston and Austin, Texas, and Colorado Springs, Colorado, were also acquired during this time period.

Acquisitions Continue

Two months after the 3.1 million shares of common stock were sold at $25 a share, another round of acquisitions followed. Four new companies were added in December 1996. Their aggregate annualized revenues totaled $52 million, bringing Coach USA within the range of their projected $73 million of acquired revenue for 1997. By this time the company, with a fleet of approximately 1,700 coaches, was rivaling the Greyhound lines. The addition of Gray Line of Anaheim, California, which operated mainly in per capita sightseeing and tour and charter services in and around Disneyland, had given Coach USA a strong presence in California. The acquisition of Powder River Transportation opened up an entirely new area for the company, with substantial contract operations, including use of transit buses to accommodate the attractive employee shuttle business, as well as tour and charter business to major national parks in and around Wyoming and the Rocky Mountains, including Mt. Rushmore and Yellowstone. Another transit contract company, Progressive Transportation of New York, was added, offering commuter and transit services for small and medium-sized municipalities. The company acquired the Gray Line of Montreal and Quebec City, its first expansion outside the continental United States. As the premiere motorcoach and tour and charter company in the Montreal area, the Gray Line focused on per capita sightseeing and airport shuttle services, in addition to offering equipment repair and maintenance services to companies that offer tours and charters into Montreal and Quebec.

Company Perspectives:

Coach USA is your one-stop-shop for all your ground transportation needs. Coach USA offers charter bus, airport shuttle, sightseeing, group tour, and taxi service in over 120 locations in the United States and Canada. Whether you need transportation for one person or 10,000 people, Coach USA can help you find a solution to any ground transportation challenge.

The company used a network of hotel lobby ticket counters, hotel concierges, and travel agents to sell sightseeing tours. Charter and tour services were provided on a fixed daily rate, based on mileage and hours of operation. Coach USA’s charter and tour fleet vehicles were designed for comfort, featuring plush interiors with televisions and VCRs. Customers traveling in the San Francisco area could comfortably enjoy the sites while touring the Napa Valley wine country, the Monterey Peninsula tour, or the San Francisco city tour. Businesses, schools, and social organizations chartered Coach USA motorcoaches to visit sporting venues, ski resorts, and historical sites. International groups book trips from Niagara Falls to the Rocky Mountains among the various other attractions. Large events serviced by the company have included the Super Bowl, Rose Bowl, the massive COMDEX trade show in Las Vegas, the Home Builders Association, Houston Livestock and Rodeo, Phoenix Open Golf Tournament, and the Arizona State Fair. In 1997, Coach’s tour and charter businesses comprised 47 percent of company revenues. The company also provided special services to regions not served by airports or ground transportation, as in service between Colorado Springs to Denver, or other ski destinations, where customers travel from airline to coach without having to claim their bags. Additionally, the company provided service from airports in Atlantic City, Houston, Las Vegas, Los Angeles, Miami, and Philadelphia, transporting customers to casinos, hotels, cruise ships, and convention sites.

Due to the company’s diverse operations, Coach USA was able to rotate its equipment according to specific need requirements. For example, a motorcoach used for the tour and charter business, where a customer may spend a week or more, should be a newer, more luxurious vehicle. When that same motorcoach was four or five years old it might be used in a commuter and transit operation, where its customers were simply going back and forth to work. When that same motorcoach was eight or nine years old, it might be effectively used in an airport shuttle operation, according to industry analyst Anthony Gallo, interviewed in the Wall Street Corporate Reporter. Coaches on commuter routes could be used on mid-day routes nearby at times when commuter bussing was not needed. Coach USA increased profits by closely considering the logistics of optimizing its equipment.

By 1997, the company claimed approximately 52 percent of the U.S. industry’s commuter and transit business. They boasted operations in Seattle, Houston, Los Angeles, New York, and San Francisco. For the most part, the company had fixed routes serviced on a daily basis. Some of Coach USA’s commuter service motorcoaches were owned by a state or municipal transit authority and provided to the company at a nominal rent; sometimes they were even given to the company.

Contracts to provide these services were generally won through a bidding process which challenged companies to demonstrate significant guaranteed cost savings. Typically, a contract was structured so that the municipality carried the risk of delivering ridership levels, while the service provider was responsible for its own costs. In the highly competitive municipal transit market, average savings from these privatized operations ran in the 30 percent range.

Two of Coach’s key transit contract competitors in the late 1990s were Laidlaw and Ryder. The three companies also competed for contracts that provide accessible transportation to the disabled (paratransit services), in addition to competing for potential acquisitions. Within the United States, Laidlaw’s annual revenues from non-school bus operations averaged $300 million. Their tour and charter business generated about $40 million annually, compared to Coach USA’s revenues of approximately $200 million in that sector. Ryder had neither tour nor charter services but accounted for approximately $150 million of transit dollars annually. Ryder had not been as aggressive in its acquisitions as the other two major competing companies. Neither competitor was considered a substantial threat to Coach USA’s dominance.

By late 1998, Coach USA had completed more than 70 acquisitions since its IPO in May 1996. It had also surpassed $900 million in assets and now led the motorcoach industry in the United States. CEO Richard Kristinik announced his retirement in 1998 and was succeeded by CFO Larry King.

By 1999, Coach USA had about 9,000 buses operating in 35 states, Canada, and Mexico. Coach USA’s success attracted the attention of a Scottish company that had begun to consolidate the global motorcoach business. The Stagecoach Group plc had itself been founded in 1980 by Brian Souter and Ann Gloag. Starting with two buses, the brother and sister had amassed one of the biggest rail and bus groups in the world, with 20,000 vehicles and almost 45,000 employees by 2001. Stagecoach’s reach extended to New Zealand, Scandinavia, Portugal, Hong Kong, and China, as well as the United Kingdom and Canada. That July, Stagecoach acquired Coach USA for over $1.8 billion, or $42 per share. Stagecoach also took on some $630 million in debt held by Coach USA. Frank Gallagher, director of Stagecoach, assumed the role of CEO at Coach USA.

Notwithstanding all of the acquisitions Coach USA had made over its short history, the U.S. motorcoach industry remained highly fragmented, with an estimated 5,000 players, and Coach commanded just a 2 percent market share. With its balance sheet cleared of debt, Coach USA was free to continue its growth via acquisition, albeit at a somewhat slower pace. At least 11 acquisitions were made in 1999, five more in 2000, and another seven in 2001.

Key Dates:

1995:: Coach USA is created out of several smaller companies by merchant banking firm Notre Capital Ventures II, L.P.
1996:: Coach USA makes an initial public offering (IPO) in May and a second offering in November.
1997:: Through acquisition and internal growth, Coach USA has built a fleet of 1,700 coaches.
1998:: Coach USA holds the leadership position in the U.S. motorcoach industry.
1999:: The company is acquired by Scotland-based Stagecoach Group plc.
2001:: Cost-cutting measures are enacted to weather the downturn in tourist travel after the September 11 terrorist attacks.
2003:: The company begins to focus on scheduled, transit, and sightseeing services, while scaling back its tour and charter services.

Under its new ownership, Coach USA also worked to grow its existing operations. In 2000, the company announced a partnership with Six Flags Theme Parks whereby Coach would offer special rates to the amusement park’s customers. Coach USA also set up a network of routes to service hotels and resorts near the Disneyland theme park in California. The UK influence soon began to be evidenced by Coach USA’s introduction of double-decker buses to key tourist markets like San Diego, New York, and Chicago. According to the 2002 Stagecoach annual report, the parent company was “encouraged by the way Coach USA was moving forward prior to September 11.”

September 11: Tragedy Brings Challenges

The terrorist attacks of September 11, 2001, made a lasting impact on both the business and leisure travel industries, the very basis of Coach USA’s business. The downturn in ridership in the immediate aftermath of the incident forced the company to reduce its Houston headquarters staff by 40 percent, eliminate 10 percent of all non-driver employees, and take 330 busses off the road. By the end of 2001, Coach USA had cut costs by $25 million.

Although the company was at that time Stagecoach’s largest division, contributing one-third of revenues, its sales fell 5 percent during fiscal 2002 (ended April 30, 2002). Net income declined by more than one-third during the period, proving a serious drag on the parent company’s earnings. As a result, in 2002 Stagecoach Group—in the person of CEO Brain Souter—started a “full business review” of its newest and biggest subsidiary, with a primary goal of cutting costs. By 2003, the company had already begun to focus on scheduled (“line run”), transit, and sightseeing services, while scaling back its reliance on tour and charter services. Coach USA’s roadmap to the future would depend on Brian Souter’s appraisal of the business.

Principal Competitors

Carey International Inc.; BostonCoach; Laidlaw Inc.; The Hertz Corporation.

Coach USA, Inc.

views updated May 21 2018

Coach USA, Inc.

One Riverway, Suite 600
Houston, Texas 77056-1903
U.S.A.
(713) 888-0104
Fax: 713-888-0218

Public Company
Incorporated: 1995
Employees: 4,100
Sales: $542.8 million (1997)
Stock Exchanges: New York
Ticker Symbol: GUI
SICs: 4141 Local Bus Charter Service

Coach USA, Inc. is the largest provider of motorcoach charter, tour, and sightseeing services in the United States. The company ranks as one of the five largest private sector providers of commuter and transit motorcoach services in Canada and the United States. Additionally, Coach USA provides airport ground transportation, paratransit, taxi, and other related passenger ground transportation services.

Founded As a Rollup, 1995

By the mid-1990s, the Notre management team identified the motorcoach industry as “ripe for consolidation,” according to Larry Plachno of the National Bus Trader. Within the United States the motorcoach industry primarily offered three types of services: recreation and excursion (charter, tour and sightseeing); commuter and transit; and regularly scheduled intercity service. In 1996 the highly fragmented industry accounted for approximately 5,000 motorcoach operators, which collectively generated roughly $20 billion in annual revenues. With the U.S. travel and tourism industry growing substantially, the targeting of large organizations such as AAA, AARP, and convention organizers by chartering companies—and growing numbers of tourists from Europe and Asia, in particular, the motorcoach industry was viewed by the investors as a potentially lucrative market.

Notre management first opted to concentrate on motorcoach businesses that specialized in the charter and tour market, and privatized transit and commuter service, rather than companies in the scheduled intercity bus service market. Also, they anticipated future expansion due to declining transit funding of capital intensive operations by state and local governments, which would eventually steer transit agencies to the more competitive privatized companies. Management forecast a scenario where sizable federal funding available for subsidizing commuter, transit, and ancillary services, such as paratransit services required under the Americans with Disabilities Act, would diminish. By merging a number of companies they could benefit by the large scale of their operations, qualifying them for lower equipment and insurance costs, financing costs, and other cost advantages.

Going Public, 1996

Coach USA went public in May 1996, with an initial offering of 3,600,000 shares priced at $ 14 per share. Coach USA was formed with six initial “founding companies” which were well established in the motorcoach industry: Suburban Transit Corp. of New Brunswick, New Jersey; Gray Line of San Francisco, California; Leisure Time Tours in Mahway, New Jersey; Community Bus Lines in Passaic, New Jersey; Adventure Trails in Atlantic City, New Jersey; and Arrow Stage Line in Phoenix, Arizona. The acquisitions were valued at $88.4 million. Forty million passengers were accommodated annually by these companies equipped with a combined force of 760 coaches. Owners of the merging companies exchanged their corporate stock for stock in Coach USA, which gave the company ownership of equipment as well as the individual businesses. Coach USA espoused a decentralized management philosophy. Their arrangement allowed previous owners to continue as presidents of the acquired companies so that the new consolidated company gained from experienced management in localized operations. Almost half of the stock holdings were held by the founding companies following the consolidation. The individual companies, including most of the later acquisitions, were restructured as subsidiaries of Coach USA, retaining their original identities and operating practices.

Using Notre Capital’s effective management model the team was split into an operational management team and an acquisition management team. Heading the operations team, John Mercandante—industry veteran and prior owner of Adventure Trails—became the first Coach USA president and chief operating officer. Local operators continued to identify candidates for corporate management, who focused on the acquisition program and coordinated equipment sharing among the various companies, set safety standards, and conducted financing procedures and vendor contacts. This arrangement allowed entrepreneurs at the acquired companies to continue to deal with day-today operations, including customer relationships, equipment utilization, and local pricing. Former Arthur Anderson partner Richard H. Kristinik was named chairman and chief executive officer of the company, responsible for leading strategic initiatives and coordinating acquisition activities and negotiations. The company’s executive management team consisted of eight professionals, including CFO Larry King, Senior Vice-President and Corporate Development Officer Frank Gallagher, and Senior Vice-President and General Counsel Doug Cerney.

Kristinik told John O’Hanlon of the Wall Street Corporate Reporter that “We think our decentralized management philosophy is one of the keys to our success. It is a key for Coach USA being able to attract new companies to become part of Coach USA... he (the owner-operator) can sell his company, enjoy the benefit of selling his company at capital gains rates, and continue to be president of his company.” Kristinik also stated that the decentralized management philosophy was also important in remaining close to the customer by keeping the “former owner-operator entrepreneur in his own backyard, serving the customer and growing the business.”

In an effort to begin strengthening Coach USA’s geographical position a second stock offering was made in November 1996, followed by the addition of six companies which were merged into Coach USA, including American Bus Lines Inc. of Miami; Gray Line and Texas Bus Lines of Houston; KT Contract Services of Las Vegas; and California Charter Inc. of Los Angeles and San Diego. The Yellow Cab Service companies of Houston and Austin, Texas, and Colorado Springs, Colorado, were also acquired during this time period.

Acquisitions Ensue

Two months after the 3.1 million shares of common stock were sold at $25 a share, another round of acquisitions followed. Four new companies were added in December 1996. Their aggregate annualized revenues totaled $52 million, bringing Coach USA within the range of their projected $73 million of acquired revenue for 1997. By this time the company, with a fleet of approximately 1,700 coaches, was rivaling the Greyhound lines. The addition of Gray Line of Anaheim, California, which operated mainly in per capita sightseeing and tour and charter services in and around Disneyland, had given Coach USA a strong presence in California. The acquisition of Powder River Transportation opened up an entirely new area for the company, with substantial contract operations including use of transit buses to accommodate the attractive employee shuttle business, as well as tour and charter business to major national parks in and around Wyoming and the Rocky Mountains, including Mt. Rushmore and Yellowstone. Another transit contract company, Progressive Transportation of New York, was added, offering commuter and transit services for small and medium-sized municipalities. The company acquired the Gray Line of Montreal and Quebec City, its first expansion outside the continental United States. As the premiere motorcoach and tour and charter company in the Montreal area, the Gray Line focused on per capita sightseeing and airport shuttle services, in addition to offering equipment repair and maintenance services to companies that offer tours and charters into Montreal and Quebec.

Company Perspectives

Our Corporate Strategy is straightforward: to create a national company that meets passengers’ diverse ground transportation needs, particularly focusing on services for domestic and international tourists and conventioneers. To this end, Coach USA builds by acquiring motorcoach tour and charter companies headquartered in gateway cities and convention centers. Operations in these key locations provide the infrastructure from which we can expand our other services, including transit, privatization and outsourcing contracts, regular route operations, airport shuttles and other ground transportation services.

The company used a network of hotel lobby ticket counters, hotel concierges, and travel agents to sell sightseeing tours. Charter and tour services were provided on a fixed daily rate, based on mileage and hours of operation. Coach USA’s charter and tour fleet vehicles were designed for comfort, featuring plush interiors with televisions and VCRs. Customers traveling in the San Francisco area could comfortably enjoy the sites while touring the Napa Valley wine country, the Monterey Peninsula tour, or the San Francisco city tour. Businesses, schools, and social organizations chartered Coach USA motorcoaches to visit sporting venues, ski resorts, and historical sites. International groups book trips from Niagara Falls to the Rocky Mountains among the various other attractions. Large events serviced by the company have included the Super Bowl, Rose Bowl, the massive COMDEX trade show in Las Vegas, the Home Builders Association, Houston Livestock and Rodeo, Phoenix Open Golf Tournament, and the Arizona State Fair. In 1997, Coach’s tour and charter businesses comprised 47 percent of company revenues. The company also provided special services to regions not served by airports or ground transportation, as in service from Colorado Springs to Denver, or other ski destinations, where customers travel from airline to coach without having to claim their bags. Additionally, the company provided service from airports in Atlantic City, Houston, Las Vegas, Los Angeles, Miami, and Philadelphia, transporting customers to casinos, hotels, cruise ships, and convention sites.

Due to the company’s diverse operations, Coach USA can rotate its equipment according to specific need requirements. For example, a motorcoach used for the tour and charter business, where a customer may spend a week or more, should be a newer, more luxurious vehicle. When that same motorcoach was four or five years old it might be used in a commuter and transit operation where its customers were simply going back and forth to work. When that same motorcoach was eight or nine years old, it might be effectively used in an airport shuttle operation, according to industry analyst Anthony Gallo, interviewed in the Wall Street Corporate Reporter. Coaches on commuter routes could be used on mid-day routes nearby, at times when commuter bussing was not needed. Coach USA has increased profits by closely considering the logistics of optimizing its equipment.

By 1997 the company claimed approximately 52 percent of the U.S. industry’s commuter and transit business. They boasted operations in Seattle, Houston, Los Angeles, New York, and San Francisco. For the most part the company had fixed routes serviced on a daily basis. Some of Coach USA’s commuter service motorcoaches were owned by a state or municipal transit authority and provided to the company at a nominal rent, or sometimes even given to the company. Contracts to provide these services were generally won through a bidding process which challenged companies to demonstrate significant guaranteed cost savings. Typically, a contract was structured so that the municipality carried the risk of delivering ridership levels, while the service provider was responsible for its own costs. In the highly competitive municipal transit market, average savings from these privatized operations ran in the 30 percent range.

Two of Coach’s major transit contract competitors are Laidlaw and Ryder. The three companies also compete for contracts that provide accessible transportation to the disabled (paratransit services), in addition to competing for potential acquisitions. Within the United States Laidlaw’s annual revenues from non-school bus operations average $300 million. Their tour and charter business generates about $40 million annually, compared to Coach USA’s revenues of approximately $200 million in that sector. Ryder has neither tour nor charter services but accounts for approximately $150 million of transit dollars annually. Ryder has not been as aggressive in its acquisitions as the other two major competing companies. Estimates indicate that Coach’s acquisition program could result in 20 to 30 properties being added annually, with aggregate annual revenues of $200 to $250 million, according to a 1997 financial report by investment banking firm Donaldson, Lufkin & Jenrette.

A Look Back and a Look Forward

By early 1998 Coach USA had completed 53 acquisitions since its IPO in May 1996, and the company continued to show strong internal growth. Management reported progress in infrastructure development, and indicated that further expansion efforts would occur through the implementation of strategies to acquire platform operations in key convention and gateway entertainment cities. A long list of possible merger partners were being considered, and no real competition loomed on the horizon.

Principal Subsidiaries

Greater Austin Transportation Company; Yellow Cab Service Corporation; Colorado Springs Airport & Transportation Company; Gulf Coast Transportation; American Bus Lines, Inc.; Kerrville Bus Company, Inc.; Bayou City Coaches, Inc.; Arrow Stage Lines, Inc.; K-T Contract Services, Inc.; California Charter; Texas Bus Lines; PCSTC, Inc.; Antelope Valley Bus, Inc.; Grosvenor Bus Lines, Inc.; Powder River Transportation Services, Inc.; International Express Corporation; Progressive Services, Inc.; Red & Tan Enterprises, Inc.; Leisure Line, Inc.; Suburban Trails, Inc.; Community Coach; Cape Transit Corporation.