<PAGE>
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 33-80775-01
CASE CREDIT CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)
233 LAKE AVE., RACINE, WISCONSIN 53403
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES INCLUDING ZIP CODE)
76-0394710
(I.R.S. EMPLOYER IDENTIFICATION NO.)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (414) 636-6011
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO
SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES [X] NO [_]
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM
405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO
THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION
STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY
AMENDMENT TO THIS FORM 10-K. NOT APPLICABLE.
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S
CLASSES OF COMMON STOCK AS OF THE LATEST PRACTICABLE DATE.
COMMON STOCK, PAR VALUE $5.00 PER SHARE: 200 SHARES OUTSTANDING AS OF
DECEMBER 31, 1996, ALL OF WHICH ARE OWNED BY CASE CORPORATION.
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION I(1)(A)
AND (B) OF FORM 10-K AND IS THEREFORE FILING THIS FORM WITH THE REDUCED
DISCLOSURE FORMAT PERMITTED BY GENERAL INSTRUCTION I OF FORM 10-K.
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<PAGE>
TABLE OF CONTENTS
<TABLE>
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PART I
ITEM 1. BUSINESS..................................................... 1
ITEM 2. PROPERTIES................................................... 3
ITEM 3. LEGAL PROCEEDINGS............................................ 3
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.......... 3*
PART II
MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
ITEM 5. STOCKHOLDER MATTERS.......................................... 4
ITEM 6. SELECTED FINANCIAL DATA...................................... 4*
ITEM 7. MANAGEMENT'S ANALYSIS OF RESULTS OF OPERATIONS............... 4
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.................. 5
Index to Financial Statements of Case Credit Corporation and
Consolidated Subsidiaries.................................... 5
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE..................................... 23
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT........... 23*
ITEM 11. EXECUTIVE COMPENSATION....................................... 23*
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
ITEM 12. MANAGEMENT................................................... 23*
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............... 23*
PART IV
EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
ITEM 14. 8-K.......................................................... 23
Financial Statements Included in Item 8...................... 23
Index to Financial Statements and Schedule Included in Item
14........................................................... 23
Schedules Omitted as Not Required or Inapplicable............ 23
Exhibits..................................................... 24
Reports on Form 8-K.......................................... 24
</TABLE>
* No response to this item is included herein for the reason that it is
inapplicable, is not required pursuant to General Instruction I of Form 10-
K, or the answer to such item is negative.
i
<PAGE>
PART I.
ITEM 1. BUSINESS.
GENERAL
Case Credit Corporation is a wholly owned finance subsidiary of Case
Corporation ("Case"). Case Credit Corporation and its wholly owned operating
subsidiaries, Case Credit Ltd. (Canada) and Case Credit Australia Pty Ltd,
(collectively "Case Credit" or the "Company") provide and administer financing
for the retail purchase or lease of new and used Case agricultural and
construction equipment and other new and used agricultural and construction
equipment. Case Credit offers various types of retail financing to end-use
customers to facilitate the sale or lease of Case products in the United
States, Canada and Australia. The Company's business principally involves
purchasing retail installment sales contracts from Case dealers. In addition,
the Company facilitates and finances the sale of insurance products to retail
customers, provides financing for Case dealers and Case rental equipment
yards, and also provides other retail financing programs for end-use customers
in the United States and Canada. Case Credit also provides various financing
options to dealers for a variety of purposes, including real estate
acquisitions, construction and remodeling, business acquisitions, dealer
systems, service and maintenance equipment, and working capital.
The Company's business is highly dependent on the ability of Case and its
dealers to generate sales and leasing activity, the willingness of customers
to enter into financing transactions with the Company and the availability of
funds to the Company to finance such transactions. The ability of Case and its
dealers to sell agricultural and construction equipment and thereby generate
retail receivables is affected by numerous factors, including the general
level of activity in the agricultural and construction industries, the rate of
U.S. agricultural production and demand, weather conditions, commodity prices,
consumer confidence, government subsidies for the agricultural sector,
prevailing levels of construction (especially housing starts), and levels of
total industry capacity and equipment inventory. In addition, the Company's
business is affected by changes in market interest rates, which in turn are
related to general economic conditions, demand for credit, inflation,
governmental policies and other factors.
The Company presently obtains funding for operations primarily from banks,
the issuance of public debt, advances and equity capital from Case, earnings
retained in the business, and the issuance of securities in asset-backed
securitization ("ABS") transactions. The Company sells substantial amounts of
retail receivables in ABS transactions that typically involve the sale of a
pool of retail installment sales contracts to limited-purpose business trusts
or similar securitization entities ("Trusts"). The Company remains as servicer
to such receivables, for which it is typically paid a servicing fee.
The businesses in which the Company is engaged are highly competitive.
Competitors of Case Credit principally include banks and other finance and
leasing companies. The Company competes for customers based upon its customer
service and finance rates charged. A significant amount of Case equipment
retail sales and leases is financed by the Company. The Company emphasizes
convenient service to retail customers and offers flexible terms as desired in
its specialized markets, such as seasonal schedules of repayment and rentals.
The Company's finance rates and lease rental rates are believed to be in the
range of those of other financing and leasing companies generally, although
not as low as those of some banks and other lenders and lessors. Case Credit
offers various financing plans designed to meet customer requirements and
increase the potential for sales of Case products while generating financing
income for the Company.
The Company's strategy is to increase the size of its portfolio of managed
receivables, which includes receivables owned and receivables serviced for
Trusts and other entities in ABS transactions and to increase its
profitability by focusing on the size and quality of its portfolio and on
financing, marketing and technology. The Company's portfolio of managed
receivables, which includes receivables owned and receivables serviced for
others, has grown from $3.0 billion at the time of the Company's
reorganization on June 23, 1994, to $4.3 billion at December 31, 1996. For
information on the Company's reorganization, see Note 3 to the Consolidated
and Combined Case Credit Financial Statements included in Item 8 hereof. The
Company is also exploring expanding
1
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its financing business by providing retail and dealer financing in new
geographic regions and for a broader range of equipment and by offering new
financing products to Case dealers, end-use customers and to others. In the
third quarter of 1996, for example, Case Credit established a joint venture
with The Association of Banks of Uzbekistan. The new company,
UzCaseagroleasing, will provide financing for the retail acquisition of new
and used Case agricultural equipment in Uzbekistan.
Case Credit Corporation was incorporated in Delaware on January 26, 1993.
The principal offices of the Company are located at 233 Lake Avenue, Racine,
Wisconsin, 53403.
BUSINESS OF CASE CORPORATION
Case Corporation is a leading worldwide designer, manufacturer, marketer and
distributor of farm equipment and light- and medium-sized construction
equipment. Case's market position is particularly significant in several
product categories, including loader/backhoes, skid steer loaders, large,
high-horsepower farm tractors and self-propelled combines.
In 1996, Case's sales of farm and construction equipment represented 78% of
total revenues, while sales of replacement parts represented 18% and financing
operations accounted for 4% of total revenues. In 1996, Case's sales of farm
equipment represented 63% of revenues from equipment sales, and sales of
construction equipment represented 37% of revenues from equipment sales.
RELATIONSHIP WITH CASE CORPORATION
Case provides the Company with certain operational and financial support
which is integral to the conduct of the Company's business. The following
description summarizes these arrangements.
Employee Benefits, Intercompany Services and Tax Sharing
The Company and Case either have or intend to enter into one or more
agreements relating to, among other things, various employee benefit plans
covering Company staff that are administered by Case, the Company's
reimbursement of Case for its staff and certain corporate services and tax
sharing arrangements between the Company and Case.
Special Marketing Programs
The Company, in conjunction with Case and Case dealers, periodically offers,
as part of its marketing strategy, below-market interest rate and waived
interest rate financing to customers. When the Company acquires retail
installment sales contracts and finance leases subject to below-market
interest rate and waived interest rate financing, Case compensates the Company
for the difference between market rates and the amounts received by the
Company. The cost of this below-market interest rate and waived interest rate
financing is borne completely by Case (and not by the Company) and is settled
monthly. The interest differential is recognized as income by Case Credit over
the term of the contracts. If such contract is subsequently sold, the interest
differential is recognized as part of the gain on retail notes sold.
Dividends
Case Credit paid dividends to Case of $40 million, $93 million and $24
million, for the years ended December 31, 1996, 1995 and 1994, respectively.
Support Agreement
The Company and Case have entered into a support agreement (the "Support
Agreement") which provides, among other things, that Case will remain,
directly or indirectly, the sole owner of all of the voting stock of the
Company, and will make quarterly payments to the Company to the extent
necessary to ensure that the
2
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Company's consolidated pre-tax earnings (as defined) available for fixed
charges equal at least 1.10 times its fixed charges (as defined) in all
periods composed of four consecutive fiscal quarters. The Support Agreement
provides that Case is not directly or indirectly guaranteeing any
indebtedness, liability or obligation of the Company. The Support Agreement
may be modified or amended by the parties thereto or terminated by either
party upon thirty days' prior written notice to the other party, with copies
of such amendment or notice being sent to Moody's Investors Service, Inc.
("Moody's"), Standard & Poor's Ratings Group ("S&P") and any other nationally
recognized statistical rating organizations then rating Case Credit debt, if
(i) Moody's and S&P confirm in writing that their ratings on Case Credit debt
then rated or capable of being rated by them would not be downgraded or
withdrawn as a result of such modification, amendment or termination, or (ii)
the modification, amendment or notice of termination provides that the Support
Agreement will continue in effect with respect to debt of Case Credit
outstanding on the effective date of the modification, amendment or
termination, or (iii) the holders of at least a majority of the aggregate
unpaid principal amount of all outstanding debt of Case Credit with an
original maturity in excess of 270 days consent in writing, so long as the
holders of debt of Case Credit having an original maturity of 270 days or less
shall continue to have the benefit of the Support Agreement until the maturity
of such debt. For purposes of the Support Agreement, no portion of any debt is
considered to be "outstanding" if such debt is deemed to be discharged and not
outstanding in accordance with the indenture or other governing instrument
defining the rights of the holders of such debt.
The calculation of pre-tax earnings available for fixed charges under the
Support Agreement differs from the calculation of the ratio of earnings to
fixed charges in accordance with the rules and regulations of the Securities
and Exchange Commission. Under the Support Agreement all cash extraordinary
non-recurring items of income or expense (other than cash debt defeasance
costs) are included whereas under the Securities and Exchange Commission's
rules and regulations such items are excluded.
ITEM 2. PROPERTIES.
Case Credit Corporation does not own any real estate. Its principal
executive offices are located at 233 Lake Avenue, Racine, WI 53403.
As of December 31, 1996, the Company had additional offices in or near
Memphis, Tennessee; Dallas, Texas; Minneapolis, Minnesota; Columbus, Ohio;
Toronto, Canada, and St. Mary's, Australia.
ITEM 3. LEGAL PROCEEDINGS.
The Company is party to various litigation matters and claims arising from
its operations. Management believes that the outcome of these proceedings,
individually and in the aggregate, will not have a material adverse effect on
Case Credit's financial position or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Information for this Item 4 is not required pursuant to General Instruction
I(2) of Form 10-K.
3
<PAGE>
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The Company's common stock is owned entirely by Case Corporation and is not
publicly traded.
The Company paid dividends to Case Corporation in the amount of $40 million,
$93 million and $24 million in 1996, 1995 and 1994, respectively.
ITEM 6. SELECTED FINANCIAL DATA.
Information for this Item 6 is not required pursuant to General Instruction
I(2) of Form 10-K.
ITEM 7. MANAGEMENT'S ANALYSIS OF RESULTS OF OPERATIONS.
1996 Compared to 1995
Net Income
Net income for 1996 was $85 million as compared to $94 million for 1995. The
$9 million decrease is primarily due to increased interest expense as a result
of maintaining higher average debt levels necessary to fund the growth in both
the finance lease and operating lease equipment programs. In addition, Case
Credit's 1996 net income was lower as a result of lower interest rate margins
on the sale of retail notes under asset-backed securitization ("ABS")
transactions. Net income also included a $3 million extraordinary, after-tax
charge to write-off unamortized bank fees in conjunction with the refinancing
of the Company's credit facilities in the third quarter of 1996.
Revenues
Case Credit reported total revenues of $244 million for 1996, a 12% increase
over the $217 million of revenues reported for 1995. Finance income earned on
retail notes and finance leases increased 90% to $59 million in 1996 as
compared to the same period in 1995 due to higher average receivable levels,
including a growing finance lease portfolio. The increase was also a result of
Case Credit originating a greater percentage of full-rate contracts, which
decreased the interest income from Case Corporation. Lease income increased
$12 million to a total of $16 million for 1996, reflecting the growth in Case
Credit's equipment leasing program. Net gain on the sale of retail notes in
ABS transactions decreased as a result of lower interest rate margins.
Expenses
Operating expenses increased $11 million to a total of $39 million in 1996
as compared to 1995. This increase primarily resulted from a $7 million
increase in depreciation expense for equipment on operating leases as well as
an increase in administrative and operating expenses.
Interest expense for 1996 was $72 million, up $30 million from the $42
million reported in 1995. The increased interest expense resulted from higher
average debt levels during 1996 as compared to 1995 due to the timing of ABS
transactions, growth in the finance lease portfolio and increased equipment on
operating leases.
Serviced Portfolio
As of December 31, 1996, Case Credit's serviced portfolio of receivables
increased 14% over the same time last year to a record $4.3 billion. Gross
receivables acquired in 1996 increased 11% for a total of $2.6 billion versus
the same period in 1995. The growth in acquisitions reflects the strong demand
for both new and used equipment, as well as the increased marketing efforts of
Case Credit. Portfolio losses were $3 million in both 1996 and 1995, resulting
in a loss to liquidation ratio of 0.15% in 1996 and 0.21% in 1995. Case Credit
sold $1,638 million and $1,469 million of retail notes in ABS transactions
during 1996 and 1995, respectively. At December 31, 1996, Case Credit retained
approximately $400 million of additional retail notes and leases as compared
to December 31, 1995.
4
<PAGE>
Other Matters
In February 1997, Case Credit Ltd. sold C$250 million of asset-backed
securities. Case Credit Ltd. also intends to enter into a C$500 million
commercial paper program in the first quarter of 1997. Under the terms of the
program, the principal amount of the commercial paper outstanding, combined
with the amounts outstanding under the Case Credit Ltd. five-year, C$500
million revolving credit facility, cannot exceed a total of C$500 million. In
March 1997, Case Credit Corporation commenced an offering of $650 million of
asset-backed securities of Case Equipment Loan Trust 1997-A pursuant to its
approximate $3 billion shelf registration statement filed with the Securities
and Exchange Commission. The proceeds from these programs will initially be
used to reduce short-term debt.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
INDEX TO FINANCIAL STATEMENTS OF CASE CREDIT CORPORATION
AND CONSOLIDATED SUBSIDIARIES
<TABLE>
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Report of independent public accountants.................................. 6
Statements of income for each of the three years in the period ended
December 31, 1996........................................................ 7
Balance sheets as of December 31, 1996 and 1995........................... 8
Statements of cash flows for each of the three years in the period ended
December 31, 1996........................................................ 9
Statements of changes in stockholder's equity for each of the three years
in the period ended
December 31, 1996........................................................ 10
Notes to financial statements............................................. 11
</TABLE>
5
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholder of Case Credit Corporation:
We have audited the accompanying consolidated balance sheets of Case Credit
Corporation (a Delaware corporation) and subsidiaries, as of December 31, 1996
and 1995, and the related consolidated and combined statements of income,
shareholder's equity and cash flows of Case Credit Corporation and
subsidiaries, formerly the Credit Operations of the Farm and Construction
Equipment Business of Tenneco Inc., for each of the three years in the period
ended December 31, 1996. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Case Credit Corporation
and subsidiaries as of December 31, 1996 and 1995, and the consolidated and
combined results of their operations and their cash flows for each of the
three years in the period ended December 31, 1996, in conformity with
generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin
February 14, 1997
(except with respect to the matters discussed in Note 12, as to which the date
isMarch 14, 1997)
6
<PAGE>
CASE CREDIT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
AND
THE CREDIT OPERATIONS OF
THE FARM AND CONSTRUCTION EQUIPMENT BUSINESS OF TENNECO INC.
COMBINED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(IN MILLIONS)
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Revenues:
Finance income earned on retail notes and finance leases.... $ 59 $ 31 $ 42
Interest income on wholesale notes.......................... -- -- 8
Interest income from Case Corporation....................... 17 29 100
Net gain on retail notes sold............................... 85 92 47
Securitization and servicing fee income..................... 60 59 29
Lease income on operating leases............................ 16 4 --
Other income................................................ 7 2 7
---- ---- ----
Total revenues.......................................... 244 217 233
Expenses:
Interest expense:
On obligations to others.................................. 71 39 87
On payables to affiliates................................. 1 3 1
---- ---- ----
Total interest expense.................................. 72 42 88
Operating expenses:
Fees charged by Case Corporation.......................... 20 19 10
Administrative and operating expenses..................... 11 7 5
Provision (credit) for credit losses...................... (3) (3) (10)
Depreciation of equipment on operating leases............. 10 3 --
Other..................................................... 1 2 --
---- ---- ----
Total operating expenses................................ 39 28 5
---- ---- ----
Total expenses.......................................... 111 70 93
---- ---- ----
Income before taxes and extraordinary loss.................. 133 147 140
Income tax provision........................................ 45 53 55
---- ---- ----
Income before extraordinary loss............................ 88 94 85
Extraordinary loss.......................................... (3) -- (4)
---- ---- ----
Net income.................................................... $ 85 $ 94 $ 81
==== ==== ====
</TABLE>
The accompanying notes to financial statements are an integral part of these
Statements of Income.
7
<PAGE>
CASE CREDIT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1996 AND 1995
(IN MILLIONS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
ASSETS 1996 1995
------ ------ ------
<S> <C> <C>
Cash and cash equivalents...................................... $ 17 $ 15
Retail notes and finance leases................................ 1,163 829
Due from Trusts................................................ 275 262
------ ------
Total receivables.......................................... 1,438 1,091
Allowance for credit losses.................................... (30) (32)
------ ------
Total receivables--net..................................... 1,408 1,059
Other receivables.............................................. -- 1
Affiliated receivables......................................... 13 16
Equipment on operating leases.................................. 97 36
Other assets................................................... 20 26
Property and equipment, at cost................................ 3 --
Accumulated depreciation....................................... (1) --
------ ------
Net property and equipment................................. 2 --
------ ------
Total...................................................... $1,557 $1,153
====== ======
<CAPTION>
LIABILITIES AND SHAREHOLDER'S EQUITY
------------------------------------
<S> <C> <C>
Short-term debt................................................ $ 829 $ 908
Accounts payable and other accrued liabilities................. 54 33
Deposits withheld from dealers................................. 19 19
Long-term debt................................................. 415 --
------ ------
Total liabilities.......................................... 1,317 960
------ ------
Shareholder's equity:
Common Stock, $5 par value, 200 shares authorized, issued and
outstanding................................................. -- --
Paid-in capital.............................................. 199 199
Cumulative translation adjustment............................ (6) (8)
Retained earnings............................................ 47 2
------ ------
Total shareholder's equity................................. 240 193
------ ------
Total...................................................... $1,557 $1,153
====== ======
</TABLE>
The accompanying notes to financial statements are an integral part of these
Balance Sheets.
8
<PAGE>
CASE CREDIT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS AND
THE CREDIT OPERATIONS OF
THE FARM AND CONSTRUCTION EQUIPMENT BUSINESS OF TENNECO, INC.
COMBINED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(IN MILLIONS)
<TABLE>
<CAPTION>
1996 1995 1994
------- ------- -------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income......................................... $ 85 $ 94 $ 81
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation and amortization..................... 12 3 --
Deferred income tax expense....................... 1 (9) (2)
Extraordinary loss, after tax..................... 3 -- 4
Net gain on retail notes sold..................... (85) (92) (47)
Changes in components of working capital:
(Increase) decrease in other assets.............. 5 (23) 1
Increase (decrease) in accounts payables and
other accrued liabilities....................... 21 8 (30)
Other, net........................................ -- 1 (15)
------- ------- -------
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES..................................... 42 (18) (8)
------- ------- -------
INVESTING ACTIVITIES:
Cost of receivables acquired....................... (2,143) (1,949) (2,829)
Collections of receivables......................... 296 157 1,382
Proceeds from sales of receivables................. 1,584 1,374 1,244
Purchase of equipment on operating leases.......... (71) (36) (3)
Expenditures for property and equipment............ (2) -- --
Acquire net assets of Tenneco Credit Canada Corp.,
Case Receivables Inc. and Case Canada Receivables
Inc............................................... -- -- (89)
------- ------- -------
NET CASH PROVIDED (USED) BY INVESTING
ACTIVITIES..................................... (336) (454) (295)
------- ------- -------
FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt........... 200 -- 12
Payment of long-term debt.......................... -- (5) (955)
Increase in short-term debt and revolving credit
facilities........................................ 136 576 997
Dividends paid to Case Corporation................. (40) (93) (24)
Capital contributions from Case Corporation........ -- 5 194
Cash transfers from Tenneco Inc.................... -- -- 90
Other, net......................................... -- -- (16)
------- ------- -------
NET CASH PROVIDED (USED) BY FINANCING
ACTIVITIES..................................... 296 483 298
------- ------- -------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.... 2 11 (5)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD...... 15 4 9
------- ------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD............ $ 17 $ 15 $ 4
======= ======= =======
CASH PAID DURING THE PERIOD FOR INTEREST............ $ 71 $ 40 $ 28
======= ======= =======
CASH PAID DURING THE PERIOD FOR TAXES............... $ 47 $ 56 $ 50
======= ======= =======
</TABLE>
The accompanying notes to financial statements are an integral part of these
Statements of Cash Flows.
9
<PAGE>
CASE CREDIT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
AND
THE CREDIT OPERATIONS OF THE FARM AND CONSTRUCTION
EQUIPMENT BUSINESS OF TENNECO INC.
STATEMENTS OF CHANGES IN COMBINED EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(IN MILLIONS)
<TABLE>
<CAPTION>
CUMULATIVE
INVESTMENT BY COMMON PAID IN TRANSLATION RETAINED
TENNECO INC. STOCK CAPITAL ADJUSTMENT EARNINGS TOTAL
------------- ------ ------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31,
1993................... $ 837 $ -- $ -- $ (4) $ -- $ 833
Net income............. 56 -- -- -- 25 81
Dividends declared..... -- -- -- -- (24) (24)
Translation adjustment. -- -- -- (4) -- (4)
Capital contributions
from Tenneco Inc...... 284 -- -- -- -- 284
Transfer of assets to
affiliates pursuant to
the reorganization.... (1,088) -- -- -- -- (1,088)
Acquire net assets of
Tenneco Credit Canada
Corp., Case Receivable
Inc. and Case Canada
Receivable Inc........ (89) -- -- -- -- (89)
Capital contribution on
stock issuance........ -- -- 194 -- -- 194
------- ----- ----- ---- ----- --------
Balance, December 31,
1994................... -- -- 194 (8) 1 187
Net income............. -- -- -- -- 94 94
Dividends declared..... -- -- -- -- (93) (93)
Capital contributions
from Case Corporation. -- -- 5 -- -- 5
------- ----- ----- ---- ----- --------
Balance, December 31,
1995................... -- -- 199 (8) 2 193
Net income............. -- -- -- -- 85 85
Dividends declared..... -- -- -- -- (40) (40)
Translation adjustment. -- -- -- 2 -- 2
------- ----- ----- ---- ----- --------
Balance, December 31,
1996................... $ -- $ -- $ 199 $ (6) $ 47 $ 240
======= ===== ===== ==== ===== ========
</TABLE>
The accompanying notes to financial statements are an integral part of these
Statements of Changes in Shareholder's Equity and Combined Equity.
10
<PAGE>
CASE CREDIT CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
NOTE 1: NATURE OF OPERATIONS
Case Credit Corporation is a wholly owned finance subsidiary of Case
Corporation ("Case"). Case Credit Corporation and its wholly owned operating
subsidiaries, Case Credit Ltd. (Canada) and Case Credit Australia Pty Ltd,
(collectively "Case Credit" or the "Company") provide and administer financing
for the retail purchase or lease of new and used Case agricultural and
construction equipment and other new and used agricultural and construction
equipment. Case Credit offers various types of retail financing to end-use
customers to facilitate the sale or lease of Case products in the United
States, Canada and Australia. The Company's business principally involves
purchasing retail installment sales contracts from Case dealers. In addition,
the Company facilitates and finances the sale of insurance products to retail
customers, provides financing for Case dealers and Case rental equipment
yards, and also provides other retail financing programs for end-use customers
in the United States and Canada. Case Credit also provides various financing
options to dealers for a variety of purposes, including real estate
acquisitions, construction and remodeling, business acquisitions, dealer
systems, service and maintenance equipment, and working capital.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Presentation
The accompanying financial statements reflect the consolidated results of
Case Credit and its subsidiaries for all periods subsequent to June 23, 1994.
For all prior periods, the financial information reflects the combination of
the wholesale and retail credit operations of the farm and construction
equipment business (the "Case Credit Business") of Tenneco Inc. ("Tenneco").
In connection with the Reorganization described in Note 3, the wholesale
credit operations, including all receivables and other assets and liabilities
related to the wholesale credit operations, were transferred to Case. As a
result, Case originated wholesale receivables subsequent to June 23, 1994, and
accordingly, wholesale receivables are not included in the Case Credit
financial statements subsequent to that date.
All significant intercompany transactions have been eliminated in
consolidation.
Certain reclassifications have been made to conform prior years financial
statements to the 1996 presentation.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles 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
reporting period. Actual results could differ from those estimates.
Foreign Currency Translation
The assets and liabilities of foreign subsidiaries are translated into U.S.
dollars using year-end exchange rates. Revenue and expenses are translated at
average rates during the year. Adjustments resulting from this translation are
deferred and reflected as a separate component of Shareholder's Equity.
Foreign exchange transaction gains/losses for the years ended December 31,
1996, 1995 and 1994, were not material.
Recognition of Finance and Interest Income
Retail Notes and Finance Leases--The Company records finance income earned
on retail notes and finance leases using the effective interest method. A
portion of the earned finance income arises from sales programs offered by
Case on which finance charges are waived or low-rate financing programs are
offered. Case Credit receives compensation from Case in an amount equal to the
difference between the competitive interest rate and
11
<PAGE>
CASE CREDIT CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
the amount paid by the customer. This amount is initially recognized as
unearned finance charges and is recognized as interest income from Case over
the term of the retail notes. The amounts, included in "Interest income from
Case Corporation" in the Statements of Income were $17 million, $29 million and
$36 million in 1996, 1995 and 1994, respectively. When the receivables are
sold, the unrecognized portion of the unearned finance charges is included in
the calculation of the net gain on retail notes sold. The Company included in
its gain calculations, income from Case amounting to $67 million, $98 million
and $70 million in 1996, 1995 and 1994, respectively, as part of the sale of
retail notes. These amounts are included in "Net gain on retail notes sold" in
the Statements of Income. Recognition of income on loans is generally suspended
when an account becomes 120 days delinquent or when management determines that
collection of future income is not probable. Accrual is resumed if the
receivable becomes contractually current and collection doubts are removed;
previously suspended income is recognized at that time. The amount of loans and
related finance charges for which income recognition has been suspended is not
material.
The Company offers retail notes with interest rates that float with the prime
rate, plus an applicable margin. At December 31, 1996 and 1995, these notes
amount to $190 million and $73 million, respectively.
Wholesale Notes--Under terms of most dealer arrangements, wholesale notes
receivables are generally interest free for periods ranging from three to nine
months, after which interest charged is based on market rates. During such
interest-free periods, finance charges were assessed by Case Credit to Case at
mutually agreed-upon amounts approximating current rates of interest. Such
charges amounted to $64 million for the year ended December 31, 1994, and are
included in "Interest income from Case Corporation" in the Statements of
Income. As previously stated, as of June 23, 1994, Case Credit no longer
purchases wholesale notes from Case. Accordingly, there was no interest income
from Case Corporation for wholesale notes in 1995 and 1996.
Receivables Sold and Serviced
Certain retail notes receivable have been securitized and sold to limited-
purpose business trusts ("Trusts") with recourse up to certain specified
amounts. Case Credit continues to service these receivables. Upon sale, the
receivables are removed from the balance sheet, and a gain or loss on sale is
recognized for the difference between the carrying value of the receivables and
the adjusted sales proceeds. The adjusted sales proceeds are based on the
proceeds received from investors adjusted for normal servicing fees, the
estimated obligation pursuant to recourse provisions, and other factors, as
appropriate. Case Credit recognizes servicing fee income as servicing
activities are performed based on the outstanding balance of the portfolio
sold. Case Credit also recognizes excess servicing fees that represent the
excess of the yield on the portfolio sold over the yield paid to investors in
the Trusts. For receivables sold prior to the Reorganization described in Note
3, the fees are recognized as the amounts are received from the Trusts rather
than at the time of sale, due to the uncertainty of the amount of fees that
would ultimately be collected. During 1996, 1995 and 1994, Case Credit received
excess servicing fees amounting to $28 million, $28 million and $17 million,
respectively, which is included in "Securitization and servicing fee income" in
the Statements of Income. For receivables sold in 1995 and 1996, the fair value
of excess servicing fees expected over the life of the receivables was
recognized at the sale date, and is included in "Net gain on retail notes sold"
in the Statements of Income, as the Company was able to estimate the amount of
excess servicing fees that will be collected. Included in "Due from Trusts" in
the Balance Sheets is approximately $104 million of excess servicing fees
recognized prior to December 31, 1996, but not yet received. At December 31,
1995, approximately $43 million of excess servicing fees was recognized prior
to December 31, 1995, but not yet received.
Additionally, Case Credit is required to remit the cash collected on the
serviced portfolio to the Trusts within two business days. At December 31, 1996
and 1995, $27 million and $10 million, respectively, of unremitted cash payable
to the Trusts is included in "Accounts payable and other accrued liabilities"
in the Balance Sheets.
12
<PAGE>
CASE CREDIT CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
Equipment on Operating Leases
Case Credit purchases equipment that is leased to retail customers under
operating leases from Case dealers. Income from operating leases is recognized
over the term of the lease. The equipment is generally depreciated over
periods of up to five years. Accumulated depreciation amounted to $13 million
and $3 million at December 31, 1996 and 1995, respectively.
Deposits Withheld from Dealers
These deposits represent amounts withheld from dealers relating to retail
sales financed using retail notes. Any subsequent losses on retail notes that
were acquired with limited recourse are charged against the amounts withheld
from the dealer. To the extent that a loss on a retail note exceeds the
dealers' reserves, the amount is charged against the Company's allowance for
credit losses. Annually, the balance of each dealer's withholding account, in
excess of certain minimum levels, is remitted to the dealer.
Cash and Cash Equivalents
Cash equivalents are comprised of all highly liquid investments with an
original maturity of three months or less.
Hedging Instruments
Hedging instruments are principally used by the Company to manage interest
rate exposures. Amounts to be received or paid under these instruments are
recognized in the results of operations as interest expense or are recorded as
part of the gain on sale of receivables, as appropriate, in the periods to
which they relate.
Extraordinary Loss
In the third quarter of 1996, the Company recorded a $3 million
extraordinary, after-tax charge to write-off unamortized bank fees in
conjunction with the refinancing of the Company's credit facilities. In the
second quarter of 1994, as part of the Reorganization, the Case Credit
business prepaid certain high interest-bearing debt. The Company recorded a $4
million extraordinary, after-tax charge for the redemption premium resulting
from this transaction.
NOTE 3: REORGANIZATION OF CASE CORPORATION AND FORMATION OF THE COMPANY
On June 23, 1994, in connection with an initial public offering, Case
Corporation and Tenneco entered into an agreement to reorganize (the
"Reorganization") the Farm and Construction Equipment Business of Tenneco. In
connection with the Reorganization, Case Credit Corporation, a wholly owned
subsidiary of Case, purchased assets, assumed liabilities and purchased common
stock of certain entities from Tenneco affiliates for $89 million. These
purchases were funded by demand notes, which were ultimately repaid with
borrowings under certain credit facilities. All of the assets sold by Tenneco
affiliates to Case Credit are recorded at the carrying value of such assets
and liabilities to the Tenneco affiliates. For tax purposes, the assets
acquired and liabilities assumed are recorded at their fair value.
Also as part of the Reorganization, Case Credit agreed to service
approximately $1.1 billion of retail notes retained by Tenneco Credit
Corporation ("TCC"), a subsidiary of Tenneco. In December 1996, the remaining
pool of receivables held by TCC was sold to an unaffiliated third party. See
Note 4 for the remaining notes that are serviced by Case Credit as of December
31, 1996.
13
<PAGE>
CASE CREDIT CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
NOTE 4: NOTES RECEIVABLE
A summary of receivables is as follows (in millions):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------
1996 1995
------ ------
<S> <C> <C>
Retail notes.............................................. $ 930 $ 746
Finance leases............................................ 385 251
Due from Trusts........................................... 275 262
------ ------
Gross receivables..................................... 1,590 1,259
Less--Unearned finance charges............................ (152) (168)
Less--Allowance for credit losses......................... (30) (32)
------ ------
Total receivables, net................................ $1,408 $1,059
====== ======
</TABLE>
Retail Receivables and Finance Leases
The terms of retail notes and finance leases generally range from two to six
years. The average effective yield on retail notes and finance leases held by
the Company was approximately 9.5% and 10.3% at December 31, 1996 and 1995,
respectively.
Maturities of retail notes and finance leases as of December 31, 1996, are
as follows (in millions):
<TABLE>
<CAPTION>
Years ending December 31,
-------------------------
<S> <C>
1997............................................................ $ 451
1998............................................................ 343
1999............................................................ 259
2000............................................................ 174
2001............................................................ 77
2002 and thereafter............................................. 11
------
Total retail notes and finance leases--gross.................. 1,315
Less--Unearned finance charges.................................... (152)
------
Total retail notes and finance leases, net of unearned finance
charges...................................................... $1,163
======
</TABLE>
The terms of the retail notes and finance leases allow for prepayment at any
time without penalty. The tabulation, therefore, is not to be regarded as a
forecast of future cash collections.
Changes in the allowance for credit losses for retail receivables, finance
leases and recourse obligations are as follows (in millions):
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Balance, beginning of year.............................. $32 $33 $52
Provision (credit) for credit losses.................... (3) (3) (10)
Write-offs, net of recoveries........................... 1 2 --
Transfer to affiliates.................................. -- -- (9)
--- --- ---
Balance, end of year.................................... $30 $32 $33
=== === ===
</TABLE>
The allowance for credit losses is established to cover potential losses for
receivables owned by the Company as well as losses on the receivables sold to
Trusts.
14
<PAGE>
CASE CREDIT CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
The preceding table reflects losses incurred by the Company and does not
include losses charged to dealers or those absorbed by the Trusts. The total
losses incurred on the Company's serviced portfolio were $3 million, $3
million and $6 million, in 1996, 1995 and 1994, respectively.
Effective January 1, 1995, Case Credit adopted Statement of Financial
Accounting Standards ("SFAS") No. 114, "Accounting by Creditors for Impairment
of a Loan," that requires companies to value impaired loans based on the
present value of expected future cash flows or other practical measures as
outlined in the statement. The impact of adopting this statement was not
material to Case Credit's financial position or results of operations.
The Company reversed $3 million, $3 million and $10 million of allowance for
credit losses during 1996, 1995 and 1994, respectively, as the allowance was
deemed to be excessive. The "Transfer to affiliates" line in the above table
represents the allowance for credit losses retained by TCC in connection with
the Reorganization.
Case Credit sold $1,638 million, $1,469 million and $1,348 million of retail
notes (net of unearned finance charges) in 1996, 1995 and 1994, respectively,
to Trusts in the United States and Canada. The Trusts were formed for the
purpose of purchasing Case Credit receivables and the receivables were used as
collateral for the issuance of asset-backed securities (asset-backed
securitizations) to outside investors. The cash proceeds received from the
sales of notes were reduced by $73 million, $90 million and $99 million, in
1996, 1995 and 1994, respectively, as security for the recourse provisions in
the sales agreements. These reductions in cash proceeds are held in escrow by
the Trusts to provide security in the event of uncollectible notes and are
released to the Company when the notes are collected. Amounts held by Trusts
are recorded in "Due from Trusts" on the Balance Sheets. Case Credit has
established reserves for the estimated losses on amounts held in escrow. These
reserves are included in "Allowance for credit losses" on the Balance Sheets.
These Trusts are controlled by third parties and meet minimum equity
capitalization standards, and, accordingly, are not included in the
consolidated financial statements of the Company.
At December 31, 1996, Case Credit serviced a portfolio of $3,844 million of
retail notes (net of unearned finance charges) that includes notes amounting
to $2,260 million (net of unearned finance charges) owned by Trusts in the
United States and Canada and $235 million of retail notes (net of unearned
finance charges) owned by an unaffiliated third party. At December 31, 1995,
Case Credit serviced a portfolio of $3,340 million of retail notes (net of
unearned finance charges) that included notes amounting to $1,997 million (net
of unearned finance charges) owned by Trusts in the United States and Canada
and $468 million of retail notes (net of unearned finance charges) owned by
TCC. Case Credit is subject to recourse with respect to receivables serviced
for the Trusts up to $171 million and $219 million as of December 31, 1996 and
1995, respectively. The Company has reserved for expected losses as part of
the allowance for credit losses. A security interest in the equipment financed
by the retail notes is maintained such that in the event of non-performance,
the related equipment can be repossessed to minimize losses.
At December 31, 1996 and 1995, approximately $115 million and $197 million,
respectively, of retail notes receivable (net of unearned finance charges)
have been pledged as collateral under the Company's three-year, $750 million
U.S. asset-backed commercial paper liquidity facility.
Retail notes receivable and serviced receivables sold with limited recourse
have significant concentrations of credit risk in the farm and construction
business sectors. On a geographic basis, there is not a disproportionate
concentration of credit in any area of the United States, Canada or Australia.
Case Credit plans to adopt SFAS No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities," on January
1, 1997. The adoption of this statement will not have a material impact on
Case Credit's financial position or results of operations.
15
<PAGE>
CASE CREDIT CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
NOTE 5: SHORT-TERM DEBT
In August 1996, Case Credit established new credit facilities that consist
of: (i) a five-year, $1.2 billion revolving credit facility; (ii) a three-
year, $750 million U.S. asset-backed commercial paper liquidity facility (the
"Liquidity Facility"); and (iii) a five-year, C$500 million revolving credit
facility. The new credit facilities were negotiated at more favorable rates
and terms for Case Credit than previous credit facilities. Case Credit also
has a three-year, A$150 million revolving credit facility and a A$100 million
stand-by revolving credit facility that expires on December 31, 1997, that is
renewable at the lender's discretion, both of which are available to finance
Australian retail receivables. Case Credit also has other lines of credit
available for working capital expenditures and other general purposes.
As a result of establishing the new credit facilities in August 1996, Case
Credit recorded a $3 million extraordinary, after-tax charge in the third
quarter of 1996 to write-off unamortized bank fees related to the original
bank agreements established at the time of Case Corporation's initial public
offering in June 1994.
In November 1996, Case Credit Corporation established a $1.2 billion
commercial paper program. Under the terms of the program, the principal amount
of the commercial paper outstanding, combined with the amounts outstanding on
the $1.2 billion revolving credit facility, cannot exceed a total of $1.2
billion.
A summary of short-term debt is set forth in the following table (in
millions):
<TABLE>
<CAPTION>
DECEMBER
31,
---------
1996 1995
---- ----
<S> <C> <C>
Credit agreements (a).......................................... $438 $711
Commercial paper............................................... 299 --
Commercial paper liquidity facility............................ 92 197
---- ----
Total short-term debt...................................... $829 $908
==== ====
</TABLE>
- --------
(a) The credit agreements include borrowings under both committed credit
facilities and uncommitted lines of credit and similar arrangements.
The weighted-average interest rates on total short-term debt outstanding at
December 31, 1996 and 1995, were 5.4% and 6.5%, respectively. At December 31,
1996, the unused portion of the combined committed credit facilities and the
commercial paper program was $882 million, and the unused portion of the
asset-backed commercial paper liquidity facility was $658 million. At December
31, 1995, the unused portion of committed credit facilities was $444 million
and the unused portion of the asset-backed commercial paper liquidity facility
was $392 million.
The Company has classified $100 million, $79 million and $36 million of
borrowings under the revolving credit facilities of Case Credit Corporation,
Case Credit Australia Pty Ltd, and Case Credit Ltd., respectively, as long-
term, as the applicable lenders do not require final payment within twelve
months, nor does the Company intend to reduce the long-term portions of these
revolvers within twelve months.
At the option of the Company, borrowings under the revolving credit
facilities bear interest at: (i) prime rate; (ii) LIBOR, plus an applicable
margin; or (iii) banker's bills of acceptance rates, plus an applicable
margin. Borrowings may be obtained in U.S. dollars and certain other foreign
currencies. Borrowings under the Liquidity Facility bear interest at
prevailing commercial paper rates at the date of the borrowing. Case Credit's
revolving credit facilities (other than the commercial paper liquidity
facility) contain restrictive covenants that require that Case Credit maintain
certain financial conditions including a maximum ratio of debt to net worth
and a minimum fixed-charge coverage ratio. The revolving credit facilities
(other than the commercial paper liquidity facility)
16
<PAGE>
CASE CREDIT CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
also impose certain restrictions on certain indebtedness, liens on Company
assets and ownership of certain subsidiaries. Pursuant to a support agreement,
Case Corporation has agreed to maintain its ownership in, and provide
financial backing for, Case Credit. At December 31, 1996, the Company was in
compliance with all debt covenants.
The credit facilities generally provide for facility fees on the total
commitment, whether used or unused, and also provide for annual agency fees to
the administrative agents for the facilities.
NOTE 6: LONG-TERM DEBT
A summary of long-term debt is set forth in the following table (in
millions):
<TABLE>
<CAPTION>
DECEMBER 31,
-------------
1996 1995
------ ------
<S> <C> <C>
Case Credit Corporation
Notes, payable in 2003, interest rate of 6.125%.......... $ 200 $ --
Long-term portion of borrowings under revolving credit
facilities, average interest rate of 6.1%............... 100 --
Case Credit Australia Pty Ltd
Long-term portion of borrowings under revolving credit
facilities, average interest rate of 6.3%............... 79 --
Case Credit Ltd. (Canada)
Long-term portion of borrowings under revolving credit
facilities, average interest rate of 6.2%............... 36 --
------ ------
Total long-term debt................................... $ 415 $ --
====== ======
</TABLE>
In the first quarter of 1996, the Company sold $200 million aggregate
principal amount of its 6 1/8% unsecured and unsubordinated notes due 2003
pursuant to a $300 million shelf registration statement filed with the
Securities and Exchange Commission in December 1995. The net proceeds from the
offering were used to repay indebtedness and finance Case Credit's growing
portfolio of receivables. Case Corporation had guaranteed the obligations of
the Company under these notes. As a result of the new credit facilities
established in the third quarter of 1996, Case Corporation was released from
its obligations under this guarantee. Pursuant to a support agreement, Case
Corporation has agreed, however, to maintain its ownership in, and provide
financial backing for, Case Credit.
The Company has classified $100 million, $79 million and $36 million of
borrowings under the revolving credit facilities of Case Credit Corporation,
Case Credit Australia Pty Ltd and Case Credit Ltd., respectively, as long-
term, as the applicable lenders do not require final payment within twelve
months, nor does the Company intend to reduce the long-term portions of these
revolvers within twelve months.
A summary of the minimum annual repayments of long-term debt as of December
31, 1996, is as follows (in millions:)
<TABLE>
<S> <C>
1998................................................................. $ 79
1999................................................................. --
2000................................................................. --
2001................................................................. 136
2002 and thereafter.................................................. 200
----
Total............................................................ $415
====
</TABLE>
17
<PAGE>
CASE CREDIT CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
NOTE 7: INCOME TAXES
Until June 23, 1994, the income and expenses of the Case Credit Business'
domestic subsidiaries and certain foreign subsidiaries were included in the
tax returns of other Tenneco entities. Subsequent to June 23, 1994, the income
and expenses of Case Credit and its domestic subsidiaries are included in the
consolidated income tax return of Case Corporation. The Company's Canadian
subsidiaries file separate income tax returns. In addition, Case Credit's
Australian subsidiary is permitted income tax relief with Case Corporation's
Australian subsidiaries. Provisions for income taxes for all periods are made
as if Case Credit and the Case Credit Business filed a separate income tax
return. Any liability incurred by Case or Tenneco resulting from the inclusion
of Case Credit in its income tax returns was reimbursed to or paid by Case
Credit or the appropriate subsidiary.
Effective June 23, 1994, the tax basis of the assets and liabilities
transferred to Case Credit were adjusted to reflect fair market value.
Accrued taxes amounted to $10 million at December 31, 1996 and 1995, and are
included in "Accounts payable and other accrued liabilities" in the Balance
Sheets.
The sources of income before taxes and extraordinary loss were as follows
(in millions):
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
U.S. sources................................... $ 105 $ 126 $ 114
Foreign sources................................ 28 21 26
-------- -------- --------
Income before taxes and extraordinary loss..... $ 133 $ 147 $ 140
======== ======== ========
</TABLE>
The provision (benefit) for income taxes is as follows (in millions):
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Current:
United States............................ $ 30 $ 47 $ 35
Foreign.................................. 10 7 14
State.................................... 4 8 8
-------- -------- --------
Total current.......................... 44 62 57
-------- -------- --------
Deferred:
United States............................ 2 (7) 2
Foreign.................................. (2) (1) (4)
State.................................... 1 (1) --
-------- -------- --------
Total deferred......................... 1 (9) (2)
-------- -------- --------
Total tax provision.................... $ 45 $ 53 $ 55
======== ======== ========
</TABLE>
18
<PAGE>
CASE CREDIT CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
Following is a reconciliation of income taxes computed at the U.S. Federal
income tax rate to the tax provision reflected in the Statements of Income (in
millions):
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Tax provision at U.S. Federal income tax
rate...................................... $ 47 $ 51 $ 49
State taxes net of Federal benefit......... 3 6 5
U.S. tax on foreign subsidiaries earnings.. 1 3 --
Reduction in valuation allowance........... (2) (9) --
Other...................................... (4) 2 1
------- ------- --------
Total tax provision.................... $ 45 $ 53 $ 55
======= ======= ========
</TABLE>
As part of the Reorganization, Case Credit established valuation allowances
for deferred tax assets for which realization was uncertain. Case Credit has
not recorded valuation allowances against deferred tax assets in tax
jurisdictions where Case and Case Credit have been profitable as management
believes it is more likely than not that such assets will be realizable. The
Company continues to have valuation allowances in certain tax jurisdictions
where future profitability continues to be uncertain. Accordingly, if the
Company achieves profitability in these jurisdictions, it is reasonably
possible that the deferred tax assets could increase in the near term.
Deferred tax assets are included in "Other assets" on the Balance Sheets.
During 1996 and 1995, Case Credit reversed a portion of the valuation
allowance as Case Credit affiliates generated income to support such a
reduction.
The components of the net deferred tax assets are as follows (in millions):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
--------------
1996 1995
------ ------
<S> <C> <C>
Deferred tax assets:
Allowance for credit losses............................. $ 12 $ 13
Accrued expenses........................................ 3 2
Valuation allowance..................................... (3) (5)
Leasing adjustments..................................... 5 5
Depreciation............................................ (4) --
Other................................................... 2 1
----- ------
Net deferred tax assets............................... $ 15 $ 16
===== ======
</TABLE>
NOTE 8: FINANCIAL INSTRUMENTS
Fair Market Value of Financial Instruments
The estimated fair market values of financial instruments which do not
approximate the carrying values in the financial statements are as follows (in
millions):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------
1996 1995
--------------- ---------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------- ------ -------- ------
<S> <C> <C> <C> <C>
Notes receivable........................ $1,408 $1,440 $1,059 $1,099
Long-term debt.......................... 415 408 -- --
Interest rate swaps
In a net payable position............. -- (5) -- (1)
</TABLE>
19
<PAGE>
CASE CREDIT CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
The fair value of notes receivable was based on discounting the estimated
future payments at prevailing market rates. The fair value of fixed-rate,
long-term debt was based on the market value of debt with similar maturities
and interest rates; the carrying amount of floating-rate, long-term debt was
assumed to approximate its fair value. The fair value of interest rate swaps
was based on the cost that would have been incurred to buy out those swaps in
a loss position and the consideration that would have been received to
terminate those swaps in a gain position.
Hedging Instruments
The Company uses hedging instruments to manage its interest rate exposures.
Case Credit does not hold or issue such instruments for trading purposes. The
notional amounts of these contracts do not represent amounts exchanged by the
parties and, thus, are not a measure of the Company's risk. The net amounts
exchanged are calculated on the basis of the notional amounts and other terms
of the contracts, such as interest rates, and only represent a small portion
of the notional amounts. The credit and market risk under these agreements is
minimized through diversification among counterparties with high credit
ratings.
Treasury Rate Lock Agreements
A Treasury rate lock is a commitment to either purchase or sell the
designated financial instrument at a future date (the determination date) for
a specified price (the reference yield). The purpose of this instrument is to
protect fixed-rate debt from fluctuations in the yield of the Treasury Note
that forms the basis of pricing the debt. As of December 31, 1996, Case Credit
did not have any Treasury rate locks outstanding. As of December 31, 1995,
Case Credit had entered into $50 million of Treasury rate locks based on a
seven-year Treasury Note at a yield of 5.6% at the time. These rate locks were
settled in February, 1996.
Back-to-Back Interest Rate Caps
The Liquidity Facility requires a subsidiary of Case Credit to have interest
rate cap agreements in place. Due to the relatively high expense of obtaining
such an instrument, Case Credit sells an identical cap, concurrent with the
cap purchase, to the same counterparty. This effectively minimizes the overall
expense to Case Credit, meets the requirements of the Liquidity Facility and
eliminates any risk of financial loss on the purchased cap. The defined term
of the cap is approximately 48 months. At December 31, 1996, Case Credit had a
back-to-back cap at a rate of 7.00%, at a notional amount of approximately $98
million. At December 31, 1995, Case Credit had back-to-back caps at rates of
7.25% and 7.50%, at notional amounts of approximately $190 million and $60
million, respectively.
Interest Rate Swaps
The Company enters into interest rate swaps to stabilize funding costs by
minimizing the effect of potential increases in floating-rate debt in a rising
interest rate environment. Under these agreements, the Company contracts with
a counterparty to exchange the difference between a fixed-rate and a floating-
rate applied to a notional amount with the swap. At December 31, 1996 and
1995, Case Credit was party to interest rate swaps with a notional value of
$306 million and $323 million, respectively. Case Credit pays fixed rates on
the swaps and receives variable rates. The variable rates may change
significantly in the future due to market factors. The swap contracts have a
duration of two years. The weighted-average pay and receive rates for the
swaps outstanding at December 31, 1996, were 6.22% and 4.49%, respectively.
The weighted-average pay and receive rates for the swaps outstanding at
December 31, 1995, were 5.61% and 5.88%, respectively.
20
<PAGE>
CASE CREDIT CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
NOTE 9: RELATED PARTY TRANSACTIONS
Included in "Accounts payable and other accrued liabilities" on the Balance
Sheets as of December 31, 1995, is $7 million due to TCC for unremitted cash
collected by Case Credit from servicing TCC's retail portfolio in accordance
with the Reorganization as described in Note 3. In December 1996, TCC sold the
remaining retail portfolio to an unaffiliated third-party.
Case Credit receives compensation from Case for retail contracts that were
created under certain low-rate financing programs and interest waiver programs
offered by Case. The amount of such compensation not yet paid by Case as of
December 31, 1996 and 1995, was $9 million and $11 million, respectively, and
is included in "Affiliated receivables" on the Balance Sheets. Prior to June
23, 1994, Case Credit also received compensation for interest-free periods on
wholesale notes. See Note 2 for further discussion.
Operating expenses include charges from Case for administrative expenses
related to employees who perform specific functions for Case Credit. Such
charges amounted to $20 million, $19 million, and $10 million for the years
ended December 31, 1996, 1995 and 1994, respectively. Management believes that
these charges reasonably reflect the actual costs of services provided.
The total servicing fees received from TCC amounted to $7 million, $12
million and $9 million during 1996, 1995 and 1994, respectively.
NOTE 10: COMMITMENTS AND CONTINGENCIES
Legal Matters
The Company is party to various litigation matters and claims arising from
its operations. Management believes that the outcome of these proceedings,
individually and in the aggregate, will not have a material adverse effect on
Case Credit's financial position or results of operations.
Commitments
Commitments under capital and operating leases are not significant to the
financial statements. Total rental expense for operating leases was minimal
for the years ended December 31, 1996, 1995 and 1994.
21
<PAGE>
CASE CREDIT CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONCLUDED)
NOTE 11: GEOGRAPHICAL INFORMATION
Although the majority of its business is done in the United States, the
Company also conducts its operations through foreign subsidiaries in Canada
and Australia. Total assets, revenues, and net income before extraordinary
items applicable to operations by geographic segments were as follows (in
millions):
<TABLE>
<CAPTION>
1996 1995 1994
------ ------ ----
<S> <C> <C> <C>
ASSETS:
United States....................................... $1,064 $ 857 $410
Canada.............................................. 308 180 154
Europe.............................................. -- -- --
Australia........................................... 185 116 --
------ ------ ----
Total............................................. $1,557 $1,153 $564
====== ====== ====
REVENUES:
United States....................................... $ 196 $ 185 $186
Canada.............................................. 36 31 33
Europe.............................................. -- -- 11
Australia........................................... 12 1 3
------ ------ ----
Total............................................. $ 244 $ 217 $233
====== ====== ====
NET INCOME BEFORE EXTRAORDINARY ITEMS:
United States....................................... $ 69 $ 79 $ 73
Canada.............................................. 17 15 12
Europe.............................................. -- -- (2)
Australia........................................... 2 -- 2
------ ------ ----
Total............................................. $ 88 $ 94 $ 85
====== ====== ====
</TABLE>
NOTE 12: SUBSEQUENT EVENTS
In February 1997, Case Credit Ltd. sold C$250 million of asset-backed
securities. Case Credit Ltd. also intends to enter into a C$500 million
commercial paper program in the first quarter of 1997. Under the terms of the
program, the principal amount of the commercial paper outstanding, combined
with the amounts outstanding under the Case Credit Ltd. five-year, C$500
million revolving credit facility, cannot exceed a total of C$500 million. In
March 1997, Case Credit Corporation commenced an offering of $650 million of
asset-backed securities of Case Equipment Loan Trust 1997-A pursuant to its
approximate $3 billion shelf registration filed with the Securities and
Exchange Commission. The proceeds from these programs will initially be used
to reduce short-term debt.
22
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
Item 10, "Directors and Executive Officers of the Registrant," Item 11,
"Executive Compensation," Item 12, "Security Ownership of Certain Beneficial
Owners and Management," and Item 13, "Certain Relationships and Related
Transactions," are not required pursuant to General Instruction I(2) of Form
10-K.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
FINANCIAL STATEMENTS INCLUDED IN ITEM 8
See "Index to Financial Statements of Case Credit Corporation and
Consolidated Subsidiaries" set forth in Item 8, "Financial Statements and
Supplementary Data."
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE INCLUDED IN ITEM 14
SCHEDULES OMITTED AS NOT REQUIRED OR INAPPLICABLE
<TABLE>
<C> <S>
Schedule I --Condensed financial information of registrant
Schedule II --Valuation and qualifying accounts
Schedule III --Real estate and accumulated depreciation
Schedule IV --Mortgage loans on real estate
Schedule V --Supplemental Information Concerning Property
--Casualty Insurance Operations
</TABLE>
23
<PAGE>
EXHIBITS
A list of the exhibits included as part of this Form 10-K is set forth in
the Index to Exhibits that immediately precedes such exhibits, which is
incorporated herein by reference.
REPORTS ON FORM 8-K
Case Credit Corporation did not file any current reports on Form 8-K during
its fiscal quarter ended December 31, 1996.
24
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
Case Credit Corporation
/s/ Kenneth R. Gangl
By___________________________________
Kenneth R. Gangl President and
Chief Executive Officer
Date: March 14, 1997
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Kenneth R. Gangl
- -------------------------------------------
Kenneth R. Gangl President, Chief Executive Officer and
Director (Principal Executive Officer)
/s/ Robert A. Wegner
- -------------------------------------------
Robert A. Wegner Vice President and Chief Financial Officer
(Principal Financial and Accounting
Officer)
/s/ Theodore R. French
- -------------------------------------------
Theodore R. French Chairman of the Board and Director
/s/ Jean-Pierre Rosso
- -------------------------------------------
Jean-Pierre Rosso Director
</TABLE>
Date: March 14, 1997
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION 15(D) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES
PURSUANT TO SECTION 12 OF THE ACT.
No annual report to security holders covering the registrant's fiscal year
ended December 31, 1996, or any proxy material has been sent to the
registrant's security holders.
25
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
XHIBITE PAGE
NUMBER DESCRIPTION OF EXHIBIT NUMBERS
- ------- ---------------------- ----------
<S> <C> <C>
3(a) Certificate of Incorporation of Case Credit Corporation, dated January
26, 1993. (Filed as Exhibit 3(a) to the Company's Registration Statement
No. 33-80775, and incorporated herein by reference.)
3(b) By-Laws of Case Credit Corporation, adopted January 26, 1993. (Filed as
Exhibit 3(b) to the Company's Registration Statement No. 33-80775, and
incorporated herein by reference.)
4(a) Indenture between Case Credit Corporation, Case Corporation and The Bank
of New York, dated as of February 1, 1996. (Filed as Exhibit 4.1 to the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1996, and incorporated herein by reference.)
4(b) 6 1/8% Note due 2003 of Case Credit Corporation issued pursuant to the
Indenture, dated as of February 1, 1996, between Case Credit Corpora-
tion, Case Corporation and The Bank of New York. (Filed as Exhibit 4.2
to the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996, and incorporated herein by reference.)
4(c) Resolutions of the Board of Directors of Case Credit Corporation autho-
rizing the public offering of debt securities of Case Credit Corporation
in an aggregate principal amount of up to $300,000,000. (Filed as Ex-
hibit 4(c) to the Company's Registration Statement No. 33-80775, and in-
corporated herein by reference.)
4(d) Resolutions of the Board of Directors of Case Corporation authorizing
the Support Agreement and/or $300,000,000 Guarantee for Case Credit Cor-
poration Debt Offering. (Filed as Exhibit 4(d) to the Company's Regis-
tration Statement No. 33-80775, and incorporated herein by reference.)
4(e) Actions of the Authorized Officers of Case Credit Corporation authoriz-
ing the issuance of $200,000,000 aggregate principal amount of 6 1/8%
Notes Due 2003. (Filed as Exhibit 4.5 to the Company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1996, and incorporated
herein by reference.)
4(f) Officers' Certificate and Company Order of Case Credit Corporation for
the issuance of $200,000,000 aggregate principal amount of 6 1/8% Notes
Due 2003. (Filed as Exhibit 4.6 to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1996, and incorporated herein
by reference.)
4(g) Actions of Authorized Officers of Case Corporation authorizing the Guar-
antee of $200,000,000 of 6 1/8% Notes Due 2003 of Case Credit Corpora-
tion. (Filed as Exhibit 4.7 to the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 1996, and incorporated herein by
reference.)
10(a) Support Agreement, dated January 10, 1996, between Case Corporation and
Case Credit Corporation. (Filed as Exhibit 10(a) to the Company's Regis-
tration Statement No. 33-80775, and incorporated herein by reference.)
10(b) Revolving Credit and Guarantee Agreement, dated as of August 23, 1996,
among Case Credit Corporation, certain Foreign Subsidiary Borrowers from
time to time parties thereto, the Lenders parties thereto, the Co-Agents
and Lead Managers named therein, and The Chase Manhattan Bank, as Admin-
istrative Agent. (Filed as Exhibit 10(a) to the Company's Quarterly Re-
port on Form 10-Q for the quarter ended September 30, 1996, and incorpo-
rated herein by reference.)
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIAL
XHIBITE PAGE
NUMBER DESCRIPTION OF EXHIBIT NUMBERS
- ------- ---------------------- ----------
<S> <C> <C>
10(c) First Amendment, dated as of November 21, 1996, to the Revolving Credit
and Guarantee Agreement dated as of August 23, 1996, among Case Credit
Corporation, certain Foreign Subsidiary Borrowers from time to time par-
ties thereto, the Lenders parties thereto, the Co-Agents and Lead Manag-
ers named therein, and The Chase Manhattan Bank, as Administrative
Agent.
10(d) Revolving Credit Agreement, dated as of August 23, 1996, among Case
Credit Ltd., the Lenders parties thereto, the Canadian Imperial Bank of
Commerce, as Co-Agent, and The Bank of Nova Scotia, as Agent. (Filed as
Exhibit 10(b) to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996, and incorporated herein by reference.)
10(e) First Amendment, dated as of November 21, 1992, to the Revolving Credit
Agreement, dated as of August 23, 1996, among Case Credit Ltd., the
Lenders parties thereto, the Canadian Imperial Bank of Commerce, as Co-
Agent, and The Bank of Nova Scotia, as Administrative Agent.
10(f) Banking Facilities extended to Case Credit Australia Pty Limited by the
National Australia Bank, dated as of September 28, 1995. (Filed as Ex-
hibit 10(c)(2) to Case Corporation's Form 10-Q for the quarter ended
September 30, 1995 (file no. 1-13098), and incorporated herein by refer-
ence.)
10(g) Deed of Amendment and Acknowledgment, dated December 31, 1996, to the
Banking Facilities extended to Case Credit Australia Pty Ltd by the Na-
tional Australia Bank, dated as of September 28, 1995.
10(h) Liquidity Agreement dated as of June 23, 1994, among Case Equipment Loan
Trust 1994-B, the Lenders named therein, the Co-Agents named therein,
and Chemical Bank, as U.S. Administrative Agent. (Filed as Exhibit
10(a)(3) to Case Corporation's Registration Statement No. 33-82158, and
incorporated herein by reference.)
10(i) Second Amendment and Consent, dated as of August 28, 1996, among Case
Equipment Loan Trust 1994-B, the Lenders parties thereto, the Co-Agents
named therein and The Chase Manhattan Bank, as Administrative Agent,
amending the Liquidity Agreement, dated as of June 23, 1994, as previ-
ously amended, among Case Equipment Loan Trust 1994-B, the Lenders par-
ties thereto, and The Chase Manhattan Bank (f/k/a Chemical Bank), as Ad-
ministrative Agent. (Filed as Exhibit 10(c) to the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1996, and incor-
porated herein by reference.)
12 Computation of Ratio of Earnings to Fixed Charges.
23 The consent of Arthur Andersen LLP, Independent Public Accountants for
Case Credit Corporation (Milwaukee, Wisconsin).
27 Financial Data Schedule.
</TABLE>
27
<PAGE>
EXHIBIT 10(c)
FIRST AMENDMENT
FIRST AMENDMENT, dated as of November 21, 1996 (this "Amendment"), to
the Credit Agreement, dated as of August 23, 1996 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among CASE CREDIT
CORPORATION, a Delaware corporation (the "U.S. Borrower"), each FOREIGN
SUBSIDIARY BORROWER (as therein defined) (together with the U.S. Borrower, the
"Borrowers"), the Co-Agents named on the signature pages thereof (the "Co-
Agents"), the Lead Managers named on the signature pages thereof (the "Lead
Managers"), the several banks and other financial institutions from time to
time parties thereto (the "Lenders") and THE CHASE MANHATTAN BANK, a New York
banking corporation (as therein defined, the "Administrative Agent"), as
administrative agent for the Lenders hereunder.
WITNESSETH:
-----------
WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to
make, and have made, certain loans and other extensions of credit to the
Borrowers; and
WHEREAS, the Borrowers have requested, and, upon this Amendment
becoming effective, the Majority Lenders have agreed, that certain provisions of
the Credit Agreement be amended in the manner provided for in this Amendment;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Defined Terms. Terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.
2. Amendments to Credit Agreement. Subsection 2.3 of the Credit
Agreement is hereby amended by (a) deleting the words "at least (a)" contained
in the proviso of the first sentence of such subsection and inserting in lieu
thereof the words "(a) at least" and (b) deleting the words "(b) one Business
Day prior to" contained in the proviso of the first sentence of such subsection
and inserting in lieu thereof the words "(b) on".
3. Conditions to Effectiveness. This Amendment shall become
effective on the date (the "Amendment Effective Date") on which the Borrowers,
the Administrative Agent and the Majority Lenders shall have executed and
delivered to the Administrative Agent this Amendment.
4. Representations and Warranties. The representations and
warranties made by the Borrowers in the Credit Agreement are true and correct in
all material respects
<PAGE>
2
on and as of the Amendment Effective Date, after giving effect to the
effectiveness of this Amendment, as if made on and as of the Amendment Effective
Date.
5. No Other Amendments; Confirmation. Except as expressly amended,
modified and supplemented hereby, the provisions of the Credit Agreement are and
shall remain in full force and effect.
6. Governing Law. This Amendment and the rights and obligations of
the parties hereto shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.
7. Counterparts. This Amendment may be executed by one or more of the
parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Amendment signed by all the parties
shall be lodged with the U.S. Borrower and the Administrative Agent. This
Amendment may be delivered by facsimile transmission of the relevant signature
pages hereof.
<PAGE>
3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
CASE CREDIT CORPORATION
By: /S/ ROBERT A. WEGNER
----------------------------------------
Title: Vice President, CFO & Treasurer
THE CHASE MANHATTAN BANK, as
Administrative Agent and a Lender
By: /S/ TIMOTHY J. STORMS
----------------------------------------
Title: Credit Executive
THE ASAHI BANK, LTD., CHICAGO BRANCH
By: /S/ NOBUO SUZUKI
----------------------------------------
Title: General Manager
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
By: /S/ ROBERT SLOAN
----------------------------------------
Title: First Vice President
BANK OF AMERICA ILLINOIS
By: /S/ W. THOMAS BARNETT
----------------------------------------
Title: Vice President
<PAGE>
4
BANK OF HAWAII
By: /S/ DONNA PARKER
----------------------------------------
Title: Assistant Vice President
BANK OF MONTREAL
By: /S/ MICHAEL D. PINCUS
----------------------------------------
Title: Managing Director
THE BANK OF NEW YORK
By: /S/ MARK T. FAMILO
----------------------------------------
Title: Assistant Vice President
THE BANK OF NOVA SCOTIA
By: /S/ F.C.H. ASHBY
----------------------------------------
Title: Senior Manager Loan Operations
THE BANK OF TOKYO-MITSUBISHI LTD.,
CHICAGO BRANCH
By: /S/ NOBORU KOBAYASHI
----------------------------------------
Title: Duty General Manager
BANQUE NATIONALE DE PARIS
By: /S/ FREDERICK H. MORYL, JR.
----------------------------------------
Title: Senior Vice President
<PAGE>
5
CAISSE NATIONALE DE CREDIT AGRICOLE
By: /S/ W. LEROY STARTZ
----------------------------------------
Title: First Vice President
CANADIAN IMPERIAL BANK OF COMMERCE
By: /S/ ROBIN W. ELLIOTT
----------------------------------------
Title: Authorized Signatory
CANADIAN IMPERIAL BANK OF COMMERCE
By: /S/ ALEKSANDRA K. DYMANUS
----------------------------------------
Title: Authorized Signatory
CITIBANK, N.A.
By: /S/ DAVID L. HARRIS
----------------------------------------
Title: Vice President
COMMERZBANK AKTIENGESELLSCHAFT,
CHICAGO BRANCH
By: /S/ PAUL KARLIN
----------------------------------------
Title: Assistant Treasurer
By: /S/ MARK MONSON
----------------------------------------
Title: Vice President
<PAGE>
6
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH
By: /S/ MICHEL DE KONKOLY THEGE
----------------------------------------
Title: Deputy General Manager
By: /S/ CHRIS G. KORTLANDT
----------------------------------------
Title: Vice President
CREDIT LYONNAIS CHICAGO BRANCH
By: /S/ MARY ANN KLEMM
----------------------------------------
Title: Vice President & Group Head
CREDIT SUISSE
By: /S/ GEOFFREY M. CRAIG
----------------------------------------
Title: Member of Senior Management
By: /S/ KRISTINN R. KRISTINSSON
----------------------------------------
Title: Associate
THE FIRST NATIONAL BANK OF CHICAGO
By: /S/ TODD E. RITZ
----------------------------------------
Title: As authorized agent
<PAGE>
7
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA
By: /S/ THOMAS M. CAMBERN
----------------------------------------
Title: Vice President
THE FUJI BANK, LIMITED
By: /S/ PETER L. CHINNICI
----------------------------------------
Title: Joint General Manager
THE INDUSTRIAL BANK OF JAPAN, LTD.
By: /S/ HIROKI YAMADA
----------------------------------------
Title: General Manager
THE LTCB TRUST COMPANY, NEW YORK
By: /S/ JOHN SULLIVAN
----------------------------------------
Title: Executive Vice President
MELLON BANK, N.A.
By: /S/ J.M. ANDERSON
----------------------------------------
Title: Vice President
THE MITUSI TRUST & BANKING COMPANY,
LTD. - NEW YORK BRANCH
By: /S/ MARGARET HOLLOWAY
----------------------------------------
Title: Vice President & Manager
<PAGE>
8
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By: /S/ CHARLES H. KING
----------------------------------------
Title: Vice President
NATIONAL AUSTRALIA BANK LIMITED
By: /S/ SHAUN DOOLEY
----------------------------------------
Title: Vice President
NATIONSBANK, N.A.
By: /S/ MARY CAROL DALY
----------------------------------------
Title: Vice President
NORDDEUTSCHE LANDESBANK
GIROZENTRALE NEW YORK BRANCH AND/OR
CAYMAN ISLANDS BRANCH
By: /S/ PETRA FRANK-WITT
----------------------------------------
Title: Vice President
By: /S/ STEPHEN K. HUNTER
----------------------------------------
Title: Senior Vice President
THE NORTHERN TRUST COMPANY
By: /S/ LISA M. TAYLOR
----------------------------------------
Title: Commerce Banking Officer
<PAGE>
9
ROYAL BANK OF CANADA
By: /S/ PRESTON D. JONES
------------------------------------
Title: Senior Manager, Corporate Banking
THE SAKURA BANK, LIMITED
By: /S/ SHUNJI SAKURAI
------------------------------------
Title: Joint General Manager
THE SANWA BANK, LIMITED, CHICAGO BRANCH
By: /S/ JOSEPH P. HOWARD
------------------------------------
Title: Vice President
SOCIETE GENERALE
By: /S/ ERIC SIEBERT, JR.
------------------------------------
Title: Corporate Banking Member
THE SUMITOMO BANK, LTD. CHICAGO BRANCH
By: /S/ A. IWAN
------------------------------------
Title: Joint General Manager
<PAGE>
10
THE SUMITOMO TRUST & BANKING CO., LTD.
NEW YORK BRANCH
By: /S/ SURAJ P. BHATIA
------------------------------------
Title: Senior Vice President & Manager,
Corporate Finance Department
THE TOKAI BANK, LIMITED CHICAGO BRANCH
By: /S/ TATSUO ITO
--------------------------------------
Title: Joint General Manager
TORONTO DOMINION (TEXAS), INC.
By: /S/ DARLENE RIEDEL
--------------------------------------
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /S/ NANCY BRUSANTI-DIAS
-------------------------------------
Title: Vice President & Division Manager
UNION BANK OF SWITZERLAND, NEW YORK BRANCH
By: /S/ ALFRED IMHOLZ
------------------------------------
Title: Managing Director
By: /S/ JAN BUETTGEN
------------------------------------
Title: Vice President, Corporate Banking
<PAGE>
11
WACHOVIA BANK OF GEORGIA, N.A.
By: /S/ ELIZABETH CORT
------------------------------------
Title: Vice President
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK BRANCH
By: /S/ SALVATORE BATTINELLI
--------------------------------------
Title: Vice President
By: /S/ C.D. ROCKEY
--------------------------------------
Title: Associate
THE YASUDA TRUST & BANKING COMPANY
By: /S/ JOSEPH C. MEEK
-------------------------------------
Title: Deputy General Manager
<PAGE>
EXHIBIT 10(e)
FIRST AMENDMENT
FIRST AMENDMENT, dated as of November 21, 1996 (the "AMENDMENT") to
the Credit Agreement, dated as of August 23, 1996 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement") among Case Credit
Ltd., a company organized under the laws of the Province of Alberta (the
"Borrower"), the several banks and other financial institutions from time to
time parties thereto (the "Lenders"), the co-agent named on the signature pages
thereof (the "Co-Agent"), and The Bank of Nova Scotia, a Canadian chartered bank
(the "Administrative Agent"), as Administrative Agent for the Lenders hereunder.
WITNESSETH:
-----------
WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to
make, and have made, certain loans and other extensions of credit to the
Borrower; and
WHEREAS, the Borrower has requested, and, upon this Amendment becoming
effective, the Majority Lenders have agreed, that certain provisions of the
Credit Agreement be amended in the manner provided for in this Amendment;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Defined Terms. Terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.
2. Amendments to Credit Agreement.
(a) Section 2.3 of the Credit Agreement is hereby amended by deleting
the words "at least one day prior to" contained in the proviso of the first
sentence of such section and inserting in lieu thereof the word "on".
(b) Section 3.2 of the Credit Agreement is hereby amended by (i)
deleting the words "one business day prior to" in the third line of subsection
(a) of such section and inserting in lieu thereof the word "on"; and (ii) by
deleting the words "11:00 a.m." in the third line of subsection (a) of such
section and inserting in lieu thereof the words "9:30 a.m."
3. Conditions to Effectiveness. This Amendment shall become
effective on the date (the "Amendment Effective Date") on which the Borrower,
the Administrative Agent and the Majority Lenders shall have executed and
delivered to the Administrative Agent this Amendment.
<PAGE>
-2-
4. Representations and Warranties. The representations and
warranties made by the Borrower in the Credit Agreement are true and correct in
all material respects on and as of the Amendment Effective Date, after giving
effect to the effectiveness of this Amendment, as if made on and as of the
Amendment Effective Date.
5. No Other Amendments; Confirmation. Except as expressly amended,
modified and supplemented hereby, the provisions of the Credit Agreement are and
shall remain in full force and effect.
6. Governing Law. This Amendment and the rights and obligations of
the parties hereto shall be governed by, and construed and interpreted in
accordance with, the laws of the Province of Ontario.
7. Counterparts. This Amendment may be executed by one or more of
the parties to this Amendment on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Amendment signed by all of the parties
shall be lodged with the Borrower and the Administrative Agent. This Amendment
may be delivered by facsimile transmission of the relevant signature pages
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
CASE CREDIT LTD.
By: "Robert A. Wegner"
------------------------------------
Title: Vice President, CFO and Treasurer
THE BANK OF NOVA SCOTIA,
as Administrative Agent and a Lender
By: "Judy McKay"
------------------------------------
Title: Relationship Manager
By: "David Tyreman"
------------------------------------
Title: Account Officer
<PAGE>
-3-
BANK OF AMERICA CANADA
as a Lender
By: "D.B. Linkletter"
---------------------------------
Title: Vice President
By:
---------------------------------
Title:
BANK OF MONTREAL
as a Lender
By: "Michael D. Pincus"
---------------------------------
Title: Managing Director
By:
---------------------------------
Title:
CANADIAN IMPERIAL BANK OF
COMMERCE, as a Co-Agent and a Lender
By: "R.M. Callander"
---------------------------------
Title: Director
By: "Doug Zinkiewich"
---------------------------------
Title: Director
THE CHASE MANHATTAN BANK OF
CANADA,
as a Lender
By: "Owen G. Roberts"
---------------------------------
Title: Vice President
By: "Arun Bery"
---------------------------------
Title: Vice President
CITIBANK CANADA,
as a Lender
By: "Margaret E. Lambert"
---------------------------------
Title: Vice President
By:
---------------------------------
Title:
<PAGE>
-4-
FIRST CHICAGO NBD BANK, CANADA,
as a Lender
By: "Colleen Delaney"
-------------------------------
Title: Assistant Vice President
By: "Jeremiah A. Hynes III"
-------------------------------
Title: First Vice President
J.P. MORGAN CANADA,
as a Lender
By: "John Maynard"
-------------------------------
Title: Vice President and Controller
By:
-------------------------------
Title:
ROYAL BANK OF CANADA,
as a Lender
By: "Preston D. Jones"
-------------------------------
Title: Senior Manager, Corporate Banking
By:
--------------------------------
Title:
SAKURA BANK (CANADA),
as a Lender
By: "E.R. Langley"
-------------------------------
Title: Vice President
By:
-------------------------------
Title:
SANWA BANK CANADA,
as a Lender
By: "Shigeki Iwashita"
-------------------------------
Title: Vice President
By:
-------------------------------
Title:
<PAGE>
-5-
SOCIETE GENERALE (CANADA),
as a Lender
By: "Duncan Irvine"
--------------------------------
Title: Senior Manager
By: "T.C. Leung"
--------------------------------
Title: Senior Manager
THE SUMITOMO BANK OF CANADA,
as a Lender
By: "Koichi Sasa"
--------------------------------
Title: Senior Vice President
By: "Alfred Lee"
--------------------------------
Title: Vice President
THE TORONTO-DOMINION BANK,
as a Lender
By: "David Pankhurst"
--------------------------------
Title: Manager
By: "John Coombs"
--------------------------------
Title: Vice President
<PAGE>
EXHIBIT 10(g)
DEED OF AMENDMENT AND ACKNOWLEDGMENT
DATED: 31ST DECEMBER 1996
BETWEEN
CASE CREDIT AUSTRALIA PTY LIMITED
A.C.N. 069 132 396
AND
CASE CREDIT CORPORATION
AND
NATIONAL AUSTRALIA BANK LIMITED
A.C.N. 004 044 927
DIBBS CROWTHER & OSBORNE
Solicitors
50 Carrington Street
SYDNEY NSW 2000
OX 101 Sydney
Tel: 290-8200
Fax: 290-2964
Ref: RG/PRE
<PAGE>
(I)
CONTENTS
1. DEFINITIONS AND INTERPRETATION....................................... -1-
2. CONSIDERATION........................................................ -2-
3. RELEVANT AGREEMENT................................................... -2-
4. CONSENT, CONFIRMATION AND ACKNOWLEDGEMENT............................ -2-
5. AMENDMENT............................................................ -3-
5.1 Letter of Offer dated 28 September, 1996 from the Bank to
Case Credit Australia.......................................... -3-
5.2 Negative Pledge Agreement dated 29 September, 1996
between Case Credit Australia and the Bank..................... -4-
5.3 Guarantee and Indemnity........................................ -5-
6. CONDITIONS PRECEDENT................................................. -5-
7. REPRESENTATIONS AND WARRANTIES....................................... -5-
8. MISCELLANEOUS........................................................ -6-
SCHEDULE TO LETTER OF OFFER..................... -7-
<PAGE>
DEED OF AMENDMENT AND ACKNOWLEDGMENT
THIS DEED is made on 31st December 1996,
BETWEEN: CASE CREDIT AUSTRALIA PTY LIMITED A.C.N. 069 132 396 of 31-87
Kurrajong Avenue, St Marys, New South Wales, 2760 ("Case Credit
Australia")
AND: CASE CREDIT CORPORATION of 621 State Street, Racine, Wisconsin, 53404,
United States of America ("Case Credit")
AND: NATIONAL AUSTRALIA BANK LIMITED A.C.N. 004 044 937 of Level 25,
National Australia Bank House, 255 George Street, Sydney, New South
Wales, 2000 ("Bank")
RECITALS:
A. Under the Bank's Letter of Offer, the Bank agreed to make available
financial recommodation to the Customer on the terms and conditions set out
in the Letter of Offer.
B. The Customer and the Bank entered into a Negative Pledge Agreement which,
in addition to the Letter of Offer, set out the Customer's obligations to
the Bank.
C. In support of the Customer's obligations under the Letter of Offer and the
Negative Pledge Agreement, Case Credit provided to the Bank the Guarantee
and Indemnity.
D. The Customer and Case Credit have requested the Bank to vary the terms of
the Facility provided under the terms of the Letter of Offer, the Negative
Pledge Agreement and the Guarantee and Indemnity.
E. The Bank has agreed to that request on the basis that the Customer and Case
Credit deliver to the Bank a deed in the form of this deed.
F. This deed is collateral to and secures the same moneys and obligations
under the Facilities as provided for in the Letter of Offer and in the
Negative Pledge Agreement.
OPERATIVE PROVISIONS:
1. DEFINITIONS AND INTERPRETATION
1.1 Words defined in the Negative Pledge Agreement that are not defined in
this deed have the same meaning given to them in the Negative Pledge
Agreement unless contrary to or inconsistent with the intention or as
the context otherwise requires.
1.2 The provisions of clauses 1.1 (definitions), 1.2 (interpretation),
__(miscellaneous), __ (notices) and 10 (governing law and
jurisdiction) of the Negative Pledge Agreement apply to this deed,
mutatis mutandis, as if they are set out in full in this deed.
1.3 In this deed (including the Recitals), the following expressions have
the following meanings unless inconsistent or contrary to the context.
"Customer" means Case Credit Australia.
"Guarantee and Indemnity" means a Deed of Guarantee and Indemnity
dated September 26, 1996 (unconditional) granted by Case Credit in
favour of the Bank in respect of the obligations of Case Credit
Australia.
"Guarantor" means Case Credit.
<PAGE>
-2-
"Letter of Offer" means a Letter of Offer dated 28 September, 1996
from the Bank to Case Credit Australia.
"Negative Pledge Agreement" means a Negative Pledge Agreement dated 29
September, 1996 between Case Credit Australia and the Bank (as varied
by a letter of amendment dated 19 March, 1996).
2. CONSIDERATION
The parties to this deed acknowledge entering into this deed and incurring
obligations and granting rights under this deed for valuable consideration.
3. RELEVANT AGREEMENT
Each of the parties to this deed acknowledges and agrees with the Bank
that:
(a) this deed;
(b) any other document dated on or before the date of this deed which
varies or evidences a facility, or any other financial accommodation
by the Bank to or in favour of the Customer's end
(c) all Security interests granted or to be granted from time to time by
the Customer to or in favour of the Bank,
constitute a "Relevant Agreement" unless otherwise agreed to by the Bank.
4. CONSENT, CONFIRMATION AND ACKNOWLEDGEMENT
4.1 The Customer and the Guarantor unconditionally and irrevocably consent
to their entry into, execution of and performance of the terms of
this deed and the observance by each of them of their respective
obligations under this deed and the Relevant Agreements.
4.2 For the removal of doubt, nothing in this deed affects any rights,
powers or remedies of the Bank which may have accrued to the Bank as a
result of any set, emission, matter or thing occurring before the date
of this deed.
4.3 The Customer and the Guarantor both jointly and severally confirm and
acknowledge:
(a) that the Customer's obligations under the Letter of Offer and
under the Negative Pledge Agreement (as varied by this deed),
and the obligations of each person that is a party to a Relevant
Agreement will continue in full force and affect in accordance
with their terms notwithstanding the execution and performance of
this deed;
(b) their continuing obligations under the Letter of Offer, the
Negative Pledge Agreement and the Guarantee and Indemnity and
acknowledge and agree that, except as varied or supplemented by
this deed, the Customer's obligations and the Guarantor's
obligations under the Relevant Agreements to which they are a
party remain and will continue in full force and effect in
accordance with their terms; and
(c) that the financial accommodation contemplated in the Letter of
Offer (as amended, varied or supplemented from time to time) is
or will be (as the case may be) for the benefit of the Customer
and for the benefit of each person entering into a Relevant
Agreement.
<PAGE>
-3-
4.4 The Guarantor acknowledges that all of the terms of the Guarantee and
Indemnity (except as varied by clause 5.3 of this deed) continue in
full force and effect to secure the obligations of the Customer to the
Bank.
5. AMENDMENT
Subject to clause 6 of this deed, from the date of this deed the following
amendments are made in the following manner:
5.1 Letter of Offer dated 28 September, 1995 from the Bank to Case Credit
Australia
(a) the Acceptance and/or Discount Facility
(i) The following words are inserted at the end of the paragraph
entitled "Purpose":
"Otherwise to make funds available to any Group Member on an
intercompany loan account basis in order to maximize the
Group's cash management flexibility."
(ii) The paragraph entitled "Line Fee" and the "Activation Fee"
are deleted and replaced with the following provision:
"While the Bank continues to have the benefit of the
Guarantee and Indemnity given to it by Case Credit
Corporation, the Bank will charge to the Company Line Fees
and Activation Fees as a direct consequence of Case
Corporation's Senior Unsecured Long Term Rating determined
by two nationally recognized rating agencies selected by the
Company (at least one of which shall be Standard & Poor's or
Moody's), in accordance with the pricing grid set out in
the schedule to this letter of offer.
If the ratings of such nationally recognized rating agencies
do not coincide, the Line Fee and Activation Fee set out
opposite the higher of such ratings will apply. If at any
time an event occurs which results in there being no rating
or only one rating in effect, a new Line Fee and Activation
Fee will be determined in a manner to be agreed upon by the
Bank and the Company and until such new Line Fee and
Activation Fee shall be so agreed upon, the relevant fees
will be deemed to be the Line Fee and Activation Fee in
effect immediately prior to the date on which such event
occurs.
As at 15 December, 1996, the Line Fees and the Activation
Fees for this facility are:
Rating Line Fee Activation Fee
BBB/Baa2 0.125% p.a. 0.250% p.a.
Line Fees are payable quarterly in advance on each 18 March,
June, September and December.
Activation Fees are calculated on the face value and
tenor of bills drawn and charged upon activation."
(b) Stand-by Bill Acceptance and/or Discount Facility
(i) The following words are inserted at the end of the paragraph
entitled "Purpose":
<PAGE>
- 4 -
"Otherwise to make funds available to any Group Member on an
Intercompany loan account basis in order to maximise the
Group's cash management flexibility.
(ii) In the paragraph entitled "Drawdown Conditions" the words,
"at least 2 other Banking Days before the day it requires
funds" are deleted and replaced with the following words:
"at least by 6:00 p.m. on the day before it requires
funds".
(iii)Following the Bank's annual review of this facility at the
end of 1996, this facility is extended to 30 November 1997.
(iv) The paragraph entitled "Line Fee" is deleted and replaced
with the following:
"Line Fee: 0.10% per annum on the Limit, payable quarterly
in advance on each 15 March, June, September
and December".
5.2 Negative Pledge Agreement dated 29 September, 1995 between Case Credit
Australia and the Bank
(a) The definition of "Third Party Receivables" on page 5 of the
Negative Pledge Agreement is deleted and replaced with the
following:
""Third Party Receivables" means receivables owing to the
Customer by any person other than a Related Body Corporate
excluding any component of such receivable that comprises
unearned finance charges and any provision for bad or
doubtful debts".
(b) In paragraph (?) of the definition of "Permitted Security
Interest" the words, "$100,000 in aggregate" are deleted and
replaced with the following words," "$10,000,000 in
aggregate".
(c) In clause 4.2 "General Undertakings" on page 8 and 9 of
the Negative Pledge Agreement, clause 4.2(d) is deleted and
replaced with the following new clause 4.2(d):-
"(d) net, without first obtaining the Bank's prior written
consent (such consent not to be unreasonably withheld),
to apply any funds available to it under the Facility
for the acquisition of Third Party Receivables where
the debtor and/or the equipment to which the Third
Party Receivables relate are outside Australia except
where the total of the non-Australian Third Party
Receivables does not exceed 10% of the aggregate total
of Third Party Receivables at any time."
(d) In clause 5.1 "financial undertakings" on page 9 of the
Negative Pledge Agreement, clause 5.1(a) is deleted and
replaced with the following new clause 6.1(a):-
"(?) The ratio of Total Liabilities to Shareholders' Funds
shall not exceed ?.1 at any time;"
(e) The reference to the ratio "1.10:1" in paragraph (b) of
clause 6.1 of the Negative Pledge Agreement is deleted and
replaced with the ratio "1.05:1".
(f) Paragraphs (c) and (d) of clause 5.1 of the Negative Pledge
Agreement are deleted.
<PAGE>
-5-
(g) Clause 7.1 (g) of the Negative Pledge Agreement is deleted.
(h) Clause 7.4 of the Negative Pledge Agreement is deleted.
5.3 Guarantee and Indemnity
(a) The definition of or reference to the "Revolving Credit
Agreement" in the Guarantee and Indemnity is deleted and replaced
with the following new definition or description:-
""Case Credit Corporation Revolving Credit and Guarantee
Agreement" means a document entitled "US $1,200,000,000 Revolving
Credit and Guarantee Agreement" dated as of August 23, 1996
between Case Credit Corporation, the foreign subsidiary
borrowers, the Co-Agents and the Lead Managers named in that
document and the Chase Manhattan Bank."
(b) All references to sections 7.5 and 10 of the Revolving Credit
Agreement referred to in clause 9 of the Guarantee and Indemnity
are deleted and replaced with references to sections 8, 10 and 11
in the Case Credit Corporation Revolving Credit and Guarantee
Agreement.
6. CONDITIONS PRECEDENT
6.1 The variation of the Letter of Offer, the Negative Pledge Agreement
and the Guarantee and Indemnity contemplated by clause 5 of this deed
is subject to the condition precedent that the Bank has received the
following in form and substance reasonably satisfactory to it:
(a) the execution and delivery of this deed;
(b) a certified copy of each authority under which each party to this
deed (other than the Bank) signs and delivers this deed (or any
other document contemplated by this deed) and if the authority is
a power of attorney, evidence of its stamping (where required by
law) and its registration;
(c) certified extracts evidencing the resolutions of each party to
this deed (where relevant) (other than the Bank) approving the
entry into this deed and authorising execution, delivery and
observance of obligations under this deed; and
(d) such ancillary documents or any other information or document
(whether originals or copies) which the Bank, in its discretion,
may request or reasonably considers necessary or desirable to
examine or hold.
6.2 It is a further condition precedent to the Bank agreeing to amend the
Letter of Offer, the Negative Pledge Agreement and the Guarantee and
Indemnity, as contemplated by clause 6 of this deed, that no Event of
Default or event which with the giving of notice, lapse of time or any
determination would be an Event of Default, has occurred or would be
likely to occur.
7. REPRESENTATIONS AND WARRANTIES
7.1 The Customer repeats the representations and warranties in clause 6 of
the Negative Pledge Agreement for the benefit of the Bank.
7.2 The Guarantor repeats the representations and warranties in the
Guarantee and Indemnity for the benefit of the Bank.
7.3 The Customer acknowledges that the Bank will be entering into this
deed in reliance, inter alia, on all of these representations and
warranties.
<PAGE>
-6-
8. MISCELLANEOUS
8.1 Nothing contained in this deed abrogates, prejudices, diminishes or
otherwise adversity affects any rights, powers, remedies, obligations
or liabilities (in any case whether present, future or contingent) in
relation to any act, matter or thing done or effected or otherwise
arising in relation to a Relevant Agreement or any documents to which
the Customer and the Bank are parties before the execution of this
deed.
8.2 This deed binds each of the signatories to it even if one or more
of these persons named in this deed never executes it or that the
execution by any one or more of those persons (other than the persons
sought to be made liable under it) is or may become void or voidable.
8.3 If there is any inconsistency between the terms of this deed and any
prior communications between the Customer and the Bank, the terms of
this deed will prevail and the parties acknowledge that this deed
supersedes in all respects the terms of those prior communications.
8.4 The Customer agrees to pay to the Bank, and to indemnify and keep
indemnified the Bank against all and any costs, charges, fees,
expenses and taxes (including any lost fees or penalties) in relation
to the preparation, negotiation, settlement, attempting, enforcement
or attempted enforcement of this deed now and in the future.
8.5 Each of the covenants of this deed are severable and distinct from one
another and if at any time any one or more of the provisions of this
deed is or becomes invalid, illegal or unenforceable in any respect
under any law, the validity, legality and enforceability of the
remaining provisions will not in any way be affected or impaired.
8.6 This deed is governed by the laws in force in New South Wales and each
party irrevocably and unconditionally submits to the non-exclusive
jurisdiction of the courts of New South Wales and courts of appeal
from them.
8.7 This deed may consist of a number of counterparts and the counterparts
taken together constitute one and the same instrument.
<PAGE>
-7-
SCHEDULE TO LETTER OF OFFER
<TABLE>
<CAPTION>
Pricing Grid: Sr. Unsec. L T Rating Line Fee Activation Fee
Standard & Poors/Moody's
<S> <C> <C> <C>
A/A2 and above 0.07% p.a. 0.155% p.a.
A-/A3 0.08% p.a. 0.17% p.a.
BBB+/Baa1 0.10% p.a. 0.20% p.a.
BBB/Baa2 0.125% p.a. 0.25% p.a.
BBB-/Baa3 0.175% p.a. 0.275% p.a.
BB+/Ba1 0.25% p.a. 0.425% p.a.
Under BB+/Ba1 0.30% p.a. 0.575% p.a.
</TABLE>
<PAGE>
- 8 -
EXECUTED as a deed.
The common seal of CASE CREDIT AUSTRALIA PTY LIMITED was affixed in accordance)
with Its articles of association in the presence of: )
)
)
/s/ Andrew Mour )
- ------------------------------------------- )
Signature of authorised person )
)
DIRECTOR )
- ------------------------------------------- )
Office held )
)
/s/ ANDREW MOUR )
- ------------------------------------------- )
Name of authorised person )
(block letters) )
Signed, sealed and delivered for and on behalf of CASE CREDIT CORPORATION by a)
person duly authorized in that regard in the presence of: )
)
)
/s/ Frank A. Anglin )
- ------------------------------------------- )
Signature of Witness )
)
/s/ FRANK A. ANGLIN )
- ------------------------------------------- )
Name of Witness (block letters) )
Signed, sealed and delivered by )
)
for and on behalf of NATIONAL AUSTRALIA BANK LIMITED under power of attorney )
registered book 5834 number 549 in the presence of: )
)
)
/s/ D. Muter )
- ------------------------------------------- )
Signature of witness )
)
/s/ DARREN MUTER )
- ------------------------------------------- )
Name of witness (block letters) )
[CORPORATE SEAL APPEARS HERE]
/s/ Robert A. Wegner
- -------------------------------------------
Signature of authorised person
DIRECTOR
- -------------------------------------------
Office held
/s/ ROBERT A. WEGNER
- -------------------------------------------
Name of authorised person
(block letters)
/s/ Robert A. Wegner
- -------------------------------------------
Signature of authorised person
VICE PRESIDENT
- -------------------------------------------
Office held
/s/ ROBERT A. WEGNER
- -------------------------------------------
Name of authorised person (block letters)
/s/ Warren James Shaw
- -------------------------------------------
By executing this deed the attorney states that the attorney has received no
notice of revocation of the power of attorney
<PAGE>
EXHIBIT 12
CASE CREDIT CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Net Income....................................... $ 85 $ 94 $ 81
Add:
Interest expense............................... 72 42 88
Amortization of capitalized debt expense....... 2 2 1
Portion of rentals representative of interest
factor........................................ -- -- --
Income tax expense and other taxes on income... 45 53 55
Fixed charges of unconsolidated subsidiaries... -- -- --
Extraordinary loss............................. 3 -- 4
-------- -------- --------
Earnings as defined.......................... $ 207 $ 191 $ 229
======== ======== ========
Interest expense................................. $ 72 $ 42 $ 88
Amortization of capitalized debt expense......... 2 2 1
Portion of rentals representative of interest
factor.......................................... -- -- --
Fixed charges of unconsolidated subsidiaries..... -- -- --
-------- -------- --------
Fixed charges as defined..................... $ 74 $ 44 $ 89
======== ======== ========
Ratio of earnings to fixed charges............... 2.80x 4.34x 2.57x
======== ======== ========
</TABLE>
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report included in this Form 10-K, into the Company's previously filed
Registration Statement File No. 33-80775.
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin
March 12, 1997
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE COMPANY'S FORM 10K AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 17
<SECURITIES> 0
<RECEIVABLES> 1,438<F1>
<ALLOWANCES> 30<F1>
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 3
<DEPRECIATION> 1
<TOTAL-ASSETS> 1,557
<CURRENT-LIABILITIES> 0
<BONDS> 415
<COMMON> 0
0
0
<OTHER-SE> 240
<TOTAL-LIABILITY-AND-EQUITY> 1,557
<SALES> 0
<TOTAL-REVENUES> 244
<CGS> 0
<TOTAL-COSTS> 41
<OTHER-EXPENSES> 1
<LOSS-PROVISION> (3)
<INTEREST-EXPENSE> 72
<INCOME-PRETAX> 133
<INCOME-TAX> 45
<INCOME-CONTINUING> 88
<DISCONTINUED> 0
<EXTRAORDINARY> 3
<CHANGES> 0
<NET-INCOME> 85
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1> THE BALANCE SHEET PRESENTED BY CASE CREDIT CORPORATION IS UNCLASSIFIED.
</FN>
</TABLE>
