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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
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 of Incorporation)
76-0394710
(I.R.S. Employer Identification No.)
233 Lake Ave., Racine, WI 53403
(Address of principal executive offices including Zip Code)
Registrant's telephone number, including area code: (414) 636-6011
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Name of Exchange
Title of Each Class on which registered
------------------- -------------------
<S> <C>
6 1/8% Notes due October 15, 2001 New York
Floating-Rate Notes due January 21, 2000 New York
</TABLE>
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 the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date.
Common Stock, par value $5.00 per share: 200 shares outstanding as of June
30, 1999, all of which are owned by Case Capital Corporation.
The registrant meets the conditions set forth in General Instruction
H(1)(a) and (b) of Form 10-Q and is therefore filing this form with the
reduced disclosure format permitted by General Instruction H of Form 10-Q.
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TABLE OF CONTENTS
<TABLE>
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Page
----
<S> <C>
Part I--Financial Information
Case Credit Corporation and Consolidated Subsidiaries
Statements of Income..................................................... 3
Balance Sheets........................................................... 4
Statements of Cash Flows................................................. 5
Statements of Changes in Stockholder's Equity............................ 6
Notes to Financial Statements............................................ 7
Management's Analysis of Results of Operations........................... 9
Part II--Other Information
Item 1. Legal Proceedings................................................ *
Item 2. Changes in Securities............................................ *
Item 3. Defaults Upon Senior Securities.................................. *
Item 4. Submission of Matters to a Vote of Security Holders.............. *
Item 5. Other Information................................................ *
Item 6. Exhibits and Reports on Form 8-K................................. 12
</TABLE>
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* No response to this item is included herein for the reason that it is
inapplicable, is not required pursuant to General Instruction H of Form 10-
Q, or the answer to such item is negative.
2
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PART I--FINANCIAL INFORMATION
CASE CREDIT CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(In millions)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
-------------- --------------
1999 1998 1999 1998
------- ------- ------- -------
<S> <C> <C> <C> <C>
Revenues:
Finance income earned on retail and other
notes and finance leases.................... $ 47 $ 32 $ 87 $ 62
Lease income on operating leases............. 25 15 48 26
Net gain on retail notes sold................ 15 13 32 33
Securitization and servicing fee income...... 12 13 24 22
Interest income from Case Corporation........ 11 5 22 10
Other income................................. 7 2 13 3
------- ------ ------- -------
Total revenues........................... 117 80 226 156
Expenses:
Interest expense............................. 47 31 92 60
Operating expenses:
Depreciation of equipment on operating
leases.................................... 17 9 33 16
Fees charged by Case Corporation........... 9 6 17 12
Administrative and operating expenses...... 5 5 9 8
Provision for credit losses................ 5 -- 9 1
Other...................................... -- 2 1 2
------- ------ ------- -------
Total operating expenses................. 36 22 69 39
------- ------ ------- -------
Total expenses........................... 83 53 161 99
------- ------ ------- -------
Income before taxes............................ 34 27 65 57
Income tax provision........................... 13 9 24 20
------- ------ ------- -------
Net income..................................... $ 21 $ 18 $ 41 $ 37
======= ====== ======= =======
</TABLE>
The accompanying notes to financial statements are an integral part of these
Statements of Income.
3
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CASE CREDIT CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 1999 AND DECEMBER 31, 1998
(In millions, except share data)
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
-------- ------------
<S> <C> <C>
ASSETS
Cash and cash equivalents................................ $ 34 $ 35
Retail and other notes and finance leases................ 2,842 2,216
Due from Trusts.......................................... 236 289
------ ------
Total receivables.................................... 3,078 2,505
Allowance for credit losses.............................. (32) (29)
------ ------
Total receivables--net............................... 3,046 2,476
Affiliated receivables................................... 7 51
Equipment on operating leases, at cost................... 597 531
Accumulated depreciation................................. (86) (63)
------ ------
Net equipment on operating leases.................... 511 468
Property and equipment, at cost.......................... 6 5
Accumulated depreciation................................. (2) (2)
------ ------
Net property and equipment........................... 4 3
Other assets............................................. 334 227
------ ------
Total................................................ $3,936 $3,260
====== ======
LIABILITIES AND STOCKHOLDER'S EQUITY
Short-term debt.......................................... $ 748 $ 550
Accounts payable and other accrued liabilities........... 158 124
Deposits withheld from dealers........................... 16 17
Long-term debt........................................... 2,507 2,108
------ ------
Total liabilities.................................... 3,429 2,799
------ ------
Minority interest........................................ 1 2
Stockholder's equity:
Common Stock, $5 par value, 200 shares authorized,
issued and outstanding................................ -- --
Paid-in capital........................................ 269 269
Accumulated other comprehensive income................. (18) (24)
Retained earnings...................................... 255 214
------ ------
Total stockholder's equity........................... 506 459
------ ------
Total................................................ $3,936 $3,260
====== ======
</TABLE>
The accompanying notes to financial statements are an integral part of these
Balance Sheets.
4
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CASE CREDIT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(In millions)
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended June
30,
----------
1999 1998
------ ------
<S> <C> <C>
Operating activities:
Net income................................................... $ 41 $ 37
Adjustments to reconcile net income to net cash provided
(used) by operating activities:
Depreciation and amortization.............................. 34 17
Net gain on retail notes sold.............................. (32) (33)
Changes in components of working capital:
(Increase) decrease in other assets...................... (7) (30)
Increase (decrease) in accounts payables and other
accrued liabilities..................................... 33 (36)
Other, net............................................... 34 (10)
------ ------
Net cash provided (used) by operating activities....... 103 (55)
------ ------
Investing activities:
Cost of receivables acquired................................. (1,676) (1,486)
Proceeds from sales of receivables........................... 868 727
Collections of receivables................................... 314 513
Purchase of equipment on operating leases.................... (74) (189)
Increase in investments in other assets...................... (101) (46)
Investments in joint ventures................................ -- 1
Expenditures for property and equipment...................... (1) --
------ ------
Net cash provided (used) by investing activities....... (670) (480)
------ ------
Financing activities:
Proceeds from issuance of short-term debt.................... 125 --
Proceeds from issuance of long-term debt..................... 493 279
Net increase (decrease) in short-term revolving credit
facilities.................................................. (52) 210
------ ------
Net cash provided (used) by financing activities....... 566 489
------ ------
Increase (decrease) in cash and cash equivalents............... (1) (46)
Cash and cash equivalents, beginning of period................. 35 67
------ ------
Cash and cash equivalents, end of period....................... $ 34 $ 21
====== ======
Cash paid during the period for interest....................... $ 81 $ 52
====== ======
Cash paid during the period for taxes.......................... $ 11 $ 26
====== ======
</TABLE>
The accompanying notes to financial statements are an integral part of
these Statements of Cash Flows.
5
<PAGE>
CASE CREDIT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
(In millions)
(Unaudited)
<TABLE>
<CAPTION>
Accumulated
Other
Common Paid-in Retained Comprehensive Comprehensive
Stock Capital Earnings Income Total Income
------ ------- -------- ------------- ----- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1997....................................... $-- $244 $129 $(16) $357
Comprehensive income:
Net income..................................................... -- -- 85 -- 85 $85
Translation adjustment......................................... -- -- -- (8) (8) (8)
---
Total........................................................ $77
===
Capital contribution from Case Capital........................... -- 25 -- -- 25
---- ---- ---- ---- ----
Balance, December 31, 1998....................................... -- 269 214 (24) 459
Comprehensive income:
Net income..................................................... -- -- 41 -- 41 $41
Translation adjustment......................................... -- -- -- 6 6 6
---- ---- ---- ---- ---- ---
Total........................................................ $47
===
Balance, June 30, 1999........................................... $-- $269 $255 $(18) $506
- --------------------------------------------------
==== ==== ==== ==== ====
</TABLE>
The accompanying notes to financial statements are an integral part of these
Statements of Changes in Stockholder's Equity.
6
<PAGE>
CASE CREDIT CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(1) Basis of Presentation
The accompanying financial statements reflect the consolidated results of
Case Credit Corporation and its subsidiaries ("Case Credit" or the "Company").
All significant intercompany transactions have been eliminated in
consolidation.
In the opinion of management, the accompanying unaudited financial
statements of Case Credit contain all adjustments which are of a normal
recurring nature necessary to present fairly the financial position as of June
30, 1999, and the results of operations, changes in shareholder's equity and
cash flows for the periods indicated. It is suggested that these interim
financial statements be read in conjunction with the financial statements and
the notes thereto included in the Company's 1998 Annual Report on Form 10-K
for the year ended December 31, 1998. Interim financial results are not
necessarily indicative of operating results for an entire year.
Certain reclassifications have been made to conform the prior years'
financial statements to the 1999 presentation.
(2) Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. This
statement must be adopted no later than January 1, 2001, although earlier
application is permitted. The Company is evaluating the impact of adopting
SFAS No. 133.
Effective January 1, 1999, the Company adopted Statement of Position
("SOP") No. 98-5, "Reporting on the Costs of Start-Up Activities." The
Company's accounting for the costs of start-up activities is consistent with
the guidelines established in the SOP and, as a result, the adoption of this
statement had no effect on the Company's financial position or results of
operations.
(3) Asset-Backed Securitizations
During the first six months of 1999, limited-purpose business trusts
organized by Case Credit issued $912 million of asset-backed securities to
outside investors. As of June 30, 1999, Case Credit had sold $887 million of
retail notes to the trusts in connection with these issuances. During the
first six months of 1998, limited-purpose business trusts organized by Case
Credit issued $766 million of asset-backed securities to outside investors. As
of June 30, 1998, Case Credit had sold $753 million of retail notes to the
trusts in connection with these issuances. The proceeds from the sale of
retail notes during the first six months of 1999 and 1998 were used to repay
outstanding debt and to finance additional receivables.
(4) Debt
During the second quarter of 1999, Case Credit issued $125 million of its
medium-term notes pursuant to its $800 million shelf registration statement
filed with the Securities and Exchange Commission in January 1999. These
floating-rate notes mature in May 2000 and bear interest based on three-month
LIBOR (with an initial interest rate of 5.21%). During the first quarter of
1999, Case Credit issued an aggregate of $250 million of its medium-term notes
pursuant to its $1 billion shelf registration statement filed with the
Securities and Exchange Commission in May 1998. These fixed-rate notes have
maturities that range between two and three years and bear interest between
5.85% and 6.15%. The net proceeds from these issuances were used to fund Case
Credit's growth initiatives and for other corporate purposes, including the
repayment of short-term indebtedness.
7
<PAGE>
During the first quarter of 1999, Case Credit's Canadian subsidiary, Case
Credit Ltd., issued C$200 million of its medium-term notes pursuant to a
short-form prospectus and prospectus supplement filed with the Canadian
Securities Administrators. These notes mature in June 2001 and bear interest
at 6.30%. The net proceeds from this issuance were used to fund Case Credit
Ltd.'s growth initiatives and for other corporate purposes, including the
repayment of short-term indebtedness.
Also during the first quarter, Case Credit Australia Pty Ltd issued A$175
million of its medium-term notes pursuant to its medium-term note program.
These notes have maturities that range from twenty-four to thirty months and
bear interest based on BBSW for the floating-rate notes, and 5.75% for the
fixed-rate notes. The net proceeds from this issuance were used to fund Case
Credit Australia Pty Ltd's growth initiatives and for other corporate
purposes, including the repayment of short-term indebtedness.
(5) Income Taxes
Case Credit's effective income tax rate of 37% for the first six months of
1999 was slightly higher than the U.S. statutory tax rate of 35%, primarily
due to foreign income taxed at different rates and state income taxes. For the
first six months of 1998, Case Capital's effective tax rate of 35% was equal
to the U.S. statutory rate.
(6) Comprehensive Income
Accumulated other comprehensive income of $(18) million and $(24) million
as of June 30, 1999 and December 31, 1998, respectively, consists solely of
cumulative translation adjustments.
(7) Agreement and Plan of Merger
As used in this "Agreement and Plan of Merger" disclosure, "Case
Corporation," or "Case" refers to Case Corporation and its subsidiaries,
including Case Credit Corporation and its subsidiaries.
On May 15, 1999, Case Corporation, a Delaware corporation ("Case"), Fiat
S.p.A., a company organized under the laws of Italy, New Holland N.V., a
company organized under the laws of the Netherlands, and Fiat Acquisition
Corporation, a Delaware corporation and a wholly owned subsidiary of Fiat
("Merger Sub"), entered into an Agreement and Plan of Merger whereby Merger
Sub will merge (the "Merger") with and into Case, with Case as the surviving
corporation in the Merger (the "Merger Agreement"). At the effective time of
the Merger, each share of Case Common Stock, par value $0.01 per share,
outstanding immediately prior to the effective time of the Merger will be
converted into the right to receive $55 in cash. Consummation of the Merger is
subject to a number of conditions, including (i) the approval and adoption of
the Merger Agreement by the stockholders of Case entitled to vote thereon,
(ii) the expiration of all required regulatory waiting periods applicable to
the Merger, and (iii) certain other customary conditions.
A special meeting of Case Corporation's stockholders will be held on August
17, 1999, for the purpose of considering and voting on a proposal to approve
and adopt the Merger Agreement.
(8) Subsequent Event
On July 27, 1999, Case Credit issued $200 million of its commercial paper
that was subsequently purchased by a subsidiary of Fiat S.p.A. The commercial
paper matures on August 26, 1999 and bears interest at market rates. Also see
Note 7, "Agreement and Plan of Merger."
8
<PAGE>
CASE CREDIT CORPORATION AND SUBSIDIARIES
MANAGEMENT'S ANALYSIS OF RESULTS OF OPERATIONS
Six Months Ended June 30, 1999 vs. Six Months Ended June 30, 1998
Net Income
Net income for the first six months of 1999 was $41 million as compared to
$37 million for the comparable period of 1998, primarily due to higher finance
income earned on retail and other notes and finance leases and increased
operating lease income. These increases were partially offset by an increase
in the Company's credit loss provision as a result of the significant growth
in Case Credit's serviced portfolio. In addition, operating results for the
first six months of 1999 reflect increased interest expense due to higher
average on-balance-sheet receivables and increased equipment on operating
leases, as well as higher operating expenses in support of Case Capital's
growth initiatives, including increased depreciation expense for equipment on
operating leases.
Revenues
Case Credit reported total revenues of $226 million for the first six
months of 1999, up $70 million from prior year levels. Finance income earned
on retail and other notes and finance leases increased to $87 million in the
first six months of 1999 as compared to $62 million for the same period in
1998, primarily due to increased levels of on-balance-sheet receivables. In
addition, operating lease income increased $22 million to a total of $48
million for the first six months of 1999, reflecting the growth in Case
Credit's operating lease portfolio.
Expenses
Interest expense for the first six months of 1999 was $92 million, up $32
million from the $60 million reported in the first six months of 1998. The
increase in interest expense resulted from higher average debt levels during
the first six months of 1999 as compared to the first six months of 1998,
primarily due to the growth in Case Credit's on-balance-sheet receivables and
increased equipment on operating leases.
Operating expenses increased $30 million to a total of $69 million in the
first six months of 1999 versus the comparable period of 1998. This increase
primarily resulted from a $17 million increase in depreciation expense for
equipment on operating leases relating to the Company's larger operating lease
portfolio, and an $8 million increase in Case Credit's loss provision as a
result of a higher loss-to-liquidation ratio during the first six months of
1999, combined with the significant growth in Case Credit's serviced
portfolio.
Serviced Portfolio
During the first six months of 1999, Case Credit's serviced portfolio of
receivables increased 28% over the same time last year to a record $7.4
billion. Diversified originations, generated primarily through Soris
Financial, and sustained geographic growth in Europe and Australia contributed
to the year-over-year growth in the Company's serviced portfolio, offsetting
the impact of weak retail demand in the agricultural equipment market. Gross
receivables originated in the first six months of 1999 increased 7% for a
total of $2.2 billion versus the same period in 1998.
During the first six months of 1999, limited-purpose business trusts
organized by Case Credit issued $912 million of asset-backed securities to
outside investors. As of June 30, 1999, Case Credit had sold $887 million of
retail notes to the trusts in connection with these issuances. During the
first six months of 1998, limited-purpose business trusts organized by Case
Credit issued $766 million of asset-backed securities to outside investors. As
of June 30, 1998, Case Credit had sold $753 million of retail notes to the
trusts in connection with these issuances. The proceeds from the sale of
retail notes were used to repay outstanding debt and finance additional
receivables.
9
<PAGE>
Year 2000
As used in this "Year 2000" disclosure, the "Company," or "Case" refers to
Case Corporation and its subsidiaries, including Case Credit Corporation and
its subsidiaries ("Case Credit"). In addition, all references to Case
Industrial reflect the consolidation of all majority-owned subsidiaries,
excluding Case Credit.
Case understands that it is important to our customers and stakeholders
that Case's products, services and internal systems are not adversely affected
by the Year 2000. Case has implemented procedures that it deems necessary to
safeguard the Company from computer-related issues associated with adverse
effects as a result of improperly recognizing the millennial date change.
These procedures include, where necessary, the inventorying/assessing,
planning, constructing/testing, and implementing/certifying of critical
internal-use hardware and software systems, as well as other embedded systems
in the Company's manufacturing plants, other buildings, equipment and other
infrastructure. The Company believes that these procedures will adequately
address both the information technology and non-information technology aspects
of our business. Based upon its review and efforts to date, the Company
believes that future external and internal costs to be incurred for the
modification of internal-use software to address Year 2000 issues will not
have a material adverse effect on Case's financial position, cash flows or
results of operations.
The Company believes, based upon its review and efforts to date, that
external and internal remediation costs to be incurred for the modification of
internal-use software to address Year 2000 issues will, in the aggregate,
approximate $40 million to $45 million. As Case Industrial and Case Credit
share many technology resources and internal-use systems, all the remediation
costs to address Year 2000 issues will be borne by Case Industrial. As of June
30, 1999, Case Industrial has incurred approximately $31 million of costs for
Year 2000 remediation, and the Company currently anticipates that remaining
Year 2000 remediation costs will approximate $9 million for the balance of
1999 and $3 million in 2000. These cost estimates include the costs of
external contractors, non-capitalizable purchases of software and hardware,
and the direct cost of internal employees working on Year 2000 projects. Case
maintains a process that tracks the cost and time of external contractors,
however, the Company does not separately track its own internal costs incurred
for the Year 2000 project. Internal costs are compiled principally from the
related payroll records for those personnel directly working on the Year 2000
effort. The Company's cost estimate does not include the cost of implementing
contingency plans, which are in the process of being developed, and also does
not include any potential litigation or warranty costs related to Year 2000
issues if the Company's remediation efforts are not successful.
Case has also undertaken a program to alert its suppliers and dealers of
Year 2000 issues. Based on its contacts with suppliers and dealers, the
Company believes that a majority of our most important suppliers are Year 2000
compliant, and the Company anticipates that most of its dealers will be Year
2000 compliant by September 30, 1999. Case will continue to work with its
remaining suppliers and its dealers throughout 1999 to secure Year 2000
compliance by December 31, 1999. Based on third-party representations and
internal testing, and subject to the Company's ongoing compliance efforts, the
costs and uncertainties relating to timely resolution of Year 2000 issues
applicable to the Company's business and operations are not reasonably
expected by the Company to have a material adverse effect on Case's financial
position, cash flows or results of operations. For those suppliers and dealers
that have not adequately responded to our Year 2000 concerns, we are following
up to ultimately achieve an acceptable level of compliance within our supply
chain. As there can be no assurance that an acceptable level of Year 2000
compliance will be achieved, Case is in the process of developing contingency
plans to address potential issues.
Case has completed all steps with regards to Year 2000 compliance that it
considers necessary regarding its agricultural and construction equipment and,
as a result, the Company has no information to suggest that its agricultural
and construction equipment is not Year 2000 compliant. The Company believes,
based on its review and testing, that products purchased from Case will
accurately determine chronological dates and accurately perform all
calculations and data manipulations based upon such dates.
Based upon Case's review and efforts to date, the Company currently
anticipates completion of critical Year 2000 compliance issues by September
30, 1999, and the Company plans to continue integration testing
10
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throughout the balance of 1999. If Case's Year 2000 compliance efforts, as
well as the efforts of the Company's suppliers and dealers, individually and
in the aggregate, are not successful, it could have a material adverse effect
on the Company's financial position, cash flows and results of operations.
Factors that could cause actual results to differ include unanticipated
supplier or dealer failures, disruption of utilities, transportation or
telecommunications breakdowns, foreign or domestic governmental failures, as
well as unanticipated failures on our part to address Year 2000 related
issues. The Company's most reasonably likely worst case scenario in light of
these risks would involve a potential loss in sales resulting from order,
production and shipping delays throughout the Company's supply chain caused by
Year 2000 related disruptions. The degree of sales loss impact would depend on
the severity of the disruption, the time required to correct it, whether the
sales loss was temporary or permanent, and the degree to which our primary
competitors were also impacted by the disruption. The Company is in the
process of developing Year 2000 contingency plans that will be designed to
mitigate the impact on the Company if its Year 2000 compliance efforts are not
successful. The Company's contingency plans are targeted for a September 30,
1999 completion, with plan audits and testing to continue throughout the
balance of 1999. Case's contingency plans may include the use of alternative
systems and non-computerized approaches to our business including manual
procedures for machine operation, collecting and reporting of its business
information, as well as alternative sources of supply. At this time, the
Company has not determined whether it will be necessary to stockpile inventory
or supplies as part of its contingency plans.
The information included in this "Year 2000" section represents forward-
looking statements and involves risks and uncertainties that could cause
actual results to differ materially from those in the forward-looking
statements.
Interest Rate Risk Management
The Company uses derivative financial instruments to manage its interest
rate exposures. Case Credit does not hold or issue financial instruments for
trading purposes. For information regarding Case Credit's interest rate risk
management, reference is made to Item 7 and Note 8 to the Case Credit
Financial Statements in the Company's 1998 Annual Report on Form 10-K. There
has been no material change in the Company's market risk exposures that affect
the quantitative and qualitative disclosures as presented as of December 31,
1998.
Agreement and Plan of Merger
As used in this "Agreement and Plan of Merger" disclosure, "Case
Corporation," or "Case" refers to Case Corporation and its subsidiaries,
including Case Credit Corporation and its subsidiaries.
On May 15, 1999, Case Corporation, a Delaware corporation ("Case"), Fiat
S.p.A., a company organized under the laws of Italy, New Holland N.V., a
company organized under the laws of the Netherlands, and Fiat Acquisition
Corporation, a Delaware corporation and a wholly owned subsidiary of Fiat
("Merger Sub"), entered into an Agreement and Plan of Merger whereby Merger
Sub will merge (the "Merger") with and into Case, with Case as the surviving
corporation in the Merger (the "Merger Agreement"). At the effective time of
the Merger, each share of Case Common Stock, par value $0.01 per share,
outstanding immediately prior to the effective time of the Merger will be
converted into the right to receive $55 in cash. Consummation of the Merger is
subject to a number of conditions, including (i) the approval and adoption of
the Merger Agreement by the stockholders of Case entitled to vote thereon,
(ii) the expiration of all required regulatory waiting periods applicable to
the Merger, and (iii) certain other customary conditions.
A special meeting of Case Corporation's stockholders will be held on August
17, 1999, for the purpose of considering and voting on a proposal to approve
and adopt the Merger Agreement.
Subsequent Event
On July 27, 1999, Case Credit issued $200 million of its commercial paper
that was subsequently purchased by a subsidiary of Fiat S.p.A. The commercial
paper matures on August 26, 1999 and bears interest at market rates. Also see
Note 7, "Agreement and Plan of Merger."
11
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PART II--OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
A list of the exhibits included as part of this Form 10-Q is set forth in
the Index to Exhibits that immediately precedes such exhibits, which is
incorporated herein by reference.
(b) Reports on Form 8-K.
In a Current Report on Form 8-K dated April 19, 1999, the Company reported
the issuance of a press release disclosing, among other things, financial
results for the quarter ended March 31, 1999.
In a Current Report on Form 8-K dated May 15, 1999, the Company reported
(i) the Agreement and Plan of Merger, dated as of May 15, 1999, by and among
Case Corporation, Fiat S.p.A., New Holland N.V. and Fiat Acquisition
Corporation and Amendment No. 2 to the Rights Agreement, dated as of December
8, 1995, between Case Corporation and First Chicago Trust Company of New York,
as Rights Agent and (ii) the issuance of a press release on May 17, 1999
disclosing the existence of said Agreement and Plan of Merger.
12
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SIGNATURE
Pursuant to the requirements of the Securities 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
By /s/ Robert A. Wegner
_____________________________________
Robert A. Wegner
Senior Vice President and Chief
Financial Officer (Principal
Financial Officer andAuthorized
Signatory for Case Credit
Corporation).
Date: August 2, 1999
13
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequential
Exhibit Page
Number Description of Exhibit Numbers
------- ---------------------- ----------
<C> <S> <C>
12 Computation of Ratio of Earnings to Fixed Charges
27 Financial Data Schedule
</TABLE>
14
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EXHIBIT 12
CASE CREDIT CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions)
<TABLE>
<CAPTION>
Six Months
Ended
June 30,
-------------
1999 1998
------ ------
<S> <C> <C>
Net income....................................................... $ 41 $ 37
Add:
Interest expense............................................... 92 60
Amortization of capitalized debt expense....................... 1 --
Income tax expense and other taxes on income................... 24 20
------ ------
Earnings as defined.......................................... $ 158 $ 117
====== ======
Interest expense................................................. $ 92 $ 60
Amortization of capitalized debt expense......................... 1 --
------ ------
Fixed charges as defined..................................... $ 93 $ 60
====== ======
Ratio of earnings to fixed charges............................... 1.70x 1.95x
====== ======
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from
the Company's 10-Q and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 34
<SECURITIES> 0
<RECEIVABLES> 3,078
<ALLOWANCES> 32
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 6
<DEPRECIATION> 2
<TOTAL-ASSETS> 3,936
<CURRENT-LIABILITIES> 0
<BONDS> 2,507
0
0
<COMMON> 0
<OTHER-SE> 506
<TOTAL-LIABILITY-AND-EQUITY> 3,936
<SALES> 0
<TOTAL-REVENUES> 226
<CGS> 0
<TOTAL-COSTS> 50
<OTHER-EXPENSES> 10
<LOSS-PROVISION> 9
<INTEREST-EXPENSE> 92
<INCOME-PRETAX> 65
<INCOME-TAX> 0
<INCOME-CONTINUING> 41
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 41
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
