<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: July 1, 1996
(Date of earliest event reported)
USL CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State of other jurisdiction of incorporation)
1-4976 94-1360891
(Commission File Number) (IRS Employer Identification No.)
733 Front Street
San Francisco, California 94111
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone number, including area code: (415) 627-9000
<PAGE> 2
Item 2. Disposition of Assets.
On July 1, 1996, the sale of the Registrant's Fleet Services
business unit to Associates Commercial Corporation, a subsidiary of Associates
First Capital Corporation, was completed. The sale price was $869 million in
cash. The sale was the result of a competitive bidding process. The Registrant's
Fleet Services business unit has more than 100,000 owned or managed cars, vans
and trucks and 1,850 commercial customers. Fleet Services represented 11% of the
Registrant's total earning assets at March 31, 1996. Ford Motor Company ("Ford")
indirectly owns all of the outstanding stock of the Registrant and over 80% of
the outstanding stock of Associates First Capital Corporation.
Item 5. Other Events.
Ford has stated that it intends to sell the Registrant's
businesses separately to achieve the highest value for the Registrant's assets.
The Registrant's business units consist of Business Equipment Financing, Fleet
Services, Rail Services, Transportation and Industrial Financing, Municipal and
Corporate Financing and Real Estate Financing. Ford has also stated that it
expects to complete the sale of assets representing a majority of Registrant's
current lines of business by the end of the third quarter.
As described above, on July 1, 1996, the Registrant completed
the sale of the Fleet Services business unit.
Previously, Ford and the Registrant announced the agreement to
sell the assets of its Rail Services business unit to First Union Rail Corp.,
the freight car leasing subsidiary of First Union Corp. The sale price is
expected to be approximately $900 million, subject to adjustments at closing.
The Rail Services unit, which includes over 26,000 rail cars, represented 12% of
Registrant's earning assets at March 31, 1996.
The Registrant is in the process of selling off portions of
the Municipal and Corporate Financing business unit. The Registrant has
discontinued doing new business in this business unit. As of July 12, 1996, the
Registrant had agreed to sell $723 million of assets in the Corporate Financing
division and expects to complete the sale of substantially all of the assets of
the Corporate Financing division by the end of August. The Municipal and
Corporate Financing business unit represented 20% of the Registrant's earning
assets at March 31, 1996.
The Registrant commenced a consent solicitation seeking
the consent of the Registrant's bondholders to changes to certain provisions of
the debt agreements covering $3.2 billion of the Registrant's long-term debt.
The changes to the debt agreements are being sought to allow the Registrant to
sell its assets without the purchasers of such assets having to assume the debt
and to facilitate Ford Motor Credit Company, an indirect wholly-owned
subsidiary of Ford, becoming a co-obligor with the Registrant on the debt.
<PAGE> 3
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
Not Applicable
(b) ProForma Financial Information.
The following unaudited ProForma Condensed Consolidated
Financial Statements are filed with this report:
<TABLE>
<S> <C>
ProForma Condensed Consolidated Balance Sheet as of March 31, 1996.......................Page F-1
ProForma Condensed Consolidated Statements of Income:
Year-ended December 31, 1995....................................................Page F-2
Three months ended March 31, 1996...............................................Page F-3
</TABLE>
The ProForma Condensed Consolidated Balance Sheet of
Registrant as at March 31, 1996 reflects the financial position of Registrant
after giving effect to the disposition of the assets of the Fleet Services
business unit discussed in Item 2 and the Rail Services business unit and the
Corporate Financing division described in Item 5 and assumes the dispositions
took place on March 31, 1996. The ProForma Condensed Consolidated Statements of
Income for the year-ended December 31, 1995 and three months ended March 31,
1996 assumed that the dispositions occurred on January 1, 1995, and are based on
the operations of the Registrant for the year-ended December 31, 1995 and three
months ended March 31, 1996. Such ProForma Financial Statements also reflect the
use of the proceeds to repay commercial paper and invest in short-term debt.
The unaudited ProForma Condensed Consolidated Financial
Statements have been prepared by Registrant based upon assumptions deemed proper
by it. The unaudited ProForma Condensed Consolidated Financial Statements
presented here are shown for illustrative proposes only and are not necessarily
indicative of the future financial position or future results of operations of
Registrant that would have actually occurred had the transaction been in effect
as of the date or for the periods presented. In addition, it should be noted
that the Registrant's financial statements will reflect the dispositions only
from the actual closing dates.
The unaudited ProForma Condensed Consolidated Financial
Statements should be read in conjunction with the historical financial
statements and related notes of Registrant.
(c) Exhibits
Not Applicable
2
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SIGNATURE
Pursuant to the requirements 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 on the date indicated.
USL CAPITAL CORPORATION
(Registrant)
Date: July 16, 1996 By: /s/ Henry Lerner
____________________
Henry Lerner
Secretary
3
<PAGE> 5
PRO FORMA FINANCIAL INFORMATION
USL Capital Corporation and Subsidiaries
Pro Forma Condensed Consolidated Balance Sheet at March 31, 1996
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
PRO-FORMA ADJUSTMENTS
---------------- ------------------------------------- --------------
HISTORICAL SOLD PRO-FORMA
BALANCES DIVISIONS (a) OTHER RESULTS
---------------- ------------------ ------------------ --------------
<S> <C> <C> <C> <C>
ASSETS
Cash and equivalents $ 9,800 $ 893,333 (b) $ 903,133
Investment in finance leases 2,558,358 $ (583,587) 1,974,771
Notes receivable 1,107,138 (352,788) 754,350
Investment in operating leases 906,014 (638,977) 267,037
Investment in leveraged leases 435,057 (150,778) 284,279
Investment in securities 1,143,842 (801,496) 342,346
Other assets 180,666 (81,087) 99,579
Goodwill 176,123 (53,500)(c) 122,623
----------- ------------ ----------- ----------
Total assets $ 6,516,998 $(2,608,713) $ 839,833 $4,748,118
=========== ============ =========== ==========
LIABILITIES AND
SHAREHOLDER'S EQUITY
Short-term notes payable $ 1,698,504 $(1,698,504)(d)
Accounts payable, accrued
liabilties, lease deposits and
payable to Ford & affiliates 237,607 $ (26,691) $ 210,916
Deferred taxes on income 550,060 (133,175) 416,885
Long-term debt 3,153,546 (10,714) 3,142,832
----------- ------------ ----------- ----------
Total liabilties 5,639,717 (170,580) (1,698,504) 3,770,633
Shareholder's equity 877,281 100,204 977,485
----------- ------------ ----------- ----------
Total liabilties and
shareholder's equity $ 6,516,998 $ (170,580) $(1,598,300) $4,748,118
=========== ============ =========== ==========
</TABLE>
(a) To eliminate the assets and liabilities included in the balance sheet of
the Company's Fleet Services business unit, Rail Services business unit,
and Corporate Financing division as of March 31, 1996.
(b) To reflect the $893 million net proceeds remaining after paying down
commercial paper being invested in short-term instruments.
(c) To reflect the write off of goodwill associated with the sold assets.
(d) To reflect the repayment of commercial paper.
F-1
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PRO FORMA FINANCIAL INFORMATION
USL Capital Corporation and Subsidiaries
Pro Forma Condensed Consolidated Statement of Income
For the Year Ended December 31, 1995
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
PRO-FORMA ADJUSTMENTS
------------------- ------------------------------ -----------
HISTORICAL SOLD PRO-FORMA
BALANCES DIVISIONS (a) OTHER (b) RESULTS
------------------- --------------- -------------- -----------
<S> <C> <C> <C> <C>
REVENUES $678,926 $(287,405) $60,669 $452,190
-------- ----------- ------- ---------
EXPENSES
Sales, administrative and general 65,300 (37,962) 27,338
Interest 276,915 (119,206) 20,867 178,576
Depreciation - operating lease 116,752 (38,897) 77,855
Other 24,220 (23,438) 782
-------- ----------- ------- ---------
Total expenses 483,187 (219,503) 20,867 284,551
-------- ----------- ------- ---------
Income before taxes on income 195,739 (67,902) 39,802 167,639
Taxes on income 60,744 (15,293) 15,534 60,985
-------- ----------- ------- ---------
NET INCOME $134,995 $ (52,609) $24,268 $106,654
======== =========== ======= =========
</TABLE>
(a) To eliminate the profit and loss of Fleet Services, Rail Services, and
Corporate Financing for the entire period.
(b) To reflect interest income from invested net proceeds, the interest expense
on the underlying debt after paying off commercial paper, and the related
tax effect thereon.
F-2
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PRO FORMA FINANCIAL INFORMATION
USL Capital Corporation and Subsidiaries
Pro Forma Condensed Consolidated Statement of Income
For the Three Months Ended March 31, 1996
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
PRO-FORMA ADJUSTMENTS
----------------- ------------------------------ ----------------
HISTORICAL SOLD PRO-FORMA
BALANCES DIVISIONS (a) OTHER (b) RESULTS
----------------- --------------- ------------- ----------------
<S> <C> <C> <C> <C>
REVENUES $187,396 $(84,542) $14,617 $117,471
-------- --------- -------- --------
EXPENSES
Sales, administrative and general 18,137 (10,119) 8,018
Interest 75,763 (34,228) 12,526 54,061
Depreciation - operating lease 32,214 (10,661) 21,553
Other 6,011 (4,613) 1,398
-------- --------- -------- --------
Total expenses 132,125 (59,621) 12,526 85,030
-------- --------- -------- --------
Income before taxes on income 55,271 (24,921) 2,091 32,441
Taxes on income 15,748 (7,159) 816 9,405
-------- --------- -------- --------
NET INCOME $ 39,523 $(17,762) $ 1,275 $ 23,036
======== ========= ======== ========
</TABLE>
(a) To eliminate the profit and loss of Fleet Services, Rail Services, and
Corporate Financing for the entire period.
(b) To reflect interest income from invested net proceeds, the interest expense
on the underlying debt after paying off commercial paper, and the related
tax effect thereon.
F-3
