<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: September 20, 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
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Item 2. Disposition of Assets.
On September 20, 1996 and September 30, 1996, the sale of
approximately 98% of the Registrant's Transportation and Industrial Financing
portfolio business unit to BA Leasing and Capital Corporation and Security
Pacific Leasing Corporation, affiliates of BankAmerica Corporation, was
completed. The sale price was $1.6 billion in cash. The sale was the result of
a competitive bidding process. It is anticipated that the sale of the remainder
of the portfolio will be sold by December 31, 1996, subject to receiving
required consents. The portfolio consists primarily of leases on aircraft, rail,
marine and other industrial equipment and machinery. The Registrant's
Transportation and Industrial Financing business unit represented 25% of the
Registrant's earning assets as of June 30, 1996.
On September 30, 1996, the sale of the Registrant's Business
Equipment Financing unit to Mellon Bank, N.A. was completed. The sale price was
$1.7 billion in cash. The sale was the result of a competitive bidding process.
The Business Equipment Financing business unit is a middle-market equipment
leasing and financing provider with transactions ranging from $250,000 to $10
million. The Registrant's Business Equipment Financing unit represented 22% of
the Registrant's earning assets as of June 30, 1996.
In addition to the above sales, as of September 30, 1996, the
Registrant had completed the sale of (i) the Real Estate Financing business
unit's mortgages to Bankers Trust Company for $496 million and two of its
foreclosed real estate assets; (ii) $1.3 billion of the assets of the
Municipal and Corporate Financing business unit; and (iii) as previously
described, the Registrant's Fleet Services and Rail Services business units.
Proceeds of the sales have been used to pay existing debt and make loans to Ford
Credit in an amount equal to the remaining outstanding debt (which debt has been
guaranteed by Ford Credit). Any remaining proceeds have been loaned to other
affiliated companies. As of September 30, 1996, the Company had $4.4 billion of
assets, $4.2 billion of which consisted of loans to affiliates.
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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 June 30, 1996 Page F-1
ProForma Condensed Consolidated Statements of Income:
Year-ended December 31, 1995........................ Page F-2
Six months ended June 30, 1996...................... Page F-3
</TABLE>
The ProForma Condensed Consolidated Balance Sheet of Registrant as
at June 30, 1996 reflects the financial position of Registrant after giving
effect to the disposition of the assets of the Fleet Services business unit, the
Rail Services business unit, the Transportation and Industrial business unit,
the Business Equipment Financing business unit, the Municipal and Corporate
business unit and a portion of the Real Estate Financing business unit and
assumes the dispositions took place on June 30, 1996. The ProForma Condensed
Consolidated Statements of Income for the year-ended December 31, 1995 and six
months ended June 30, 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 six months ended June 30, 1996. Such ProForma Financial
Statements also reflect the use of the proceeds to repay commercial paper, make
advances to affiliates, pay taxes 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: October 7, 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 June 30, 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 $ 12,087 $ (4,196) $ 7,891
Investment in finance
leases 2,571,770 (2,571,770) 0
Notes receivable 1,388,480 (1,388,480) 0
Investment in operating
leases 975,453 (975,453) 0
Investment in leveraged
leases 443,394 (443,394) 0
Investment in securities 998,309 (995,339) 2,970
Notes receivable from affiliates 0 0 $ 4,432,269(b) 4,432,269
Other assets 190,821 (126,409) (4,564)(c) 59,848
Goodwill 174,712 (14) (174,698)(d) 0
----------- ----------- ----------- -----------
Total assets $ 6,755,026 $(6,505,055) $ 4,253,007 $ 4,502,978
=========== =========== =========== ===========
LIABILITIES AND
SHAREHOLDER'S EQUITY
Short-term notes payable $ 1,775,234 $(1,775,234)(e)
Accounts payable, accrued
liabilities, lease deposits and
payable to Ford & affiliates 230,355 $ (107,796) (1,942)(f) $ 120,617
Deferred taxes on income 580,820 (577,979) 2,841
Long-term debt 3,254,334 (9,817) 3,244,517
----------- ----------- ----------- -----------
Total liabilities 5,840,743 (695,592) (1,777,176) 3,367,975
Shareholder's equity 914,283 220,720 1,135,003
----------- ----------- ----------- -----------
Total liabilities and
shareholder's equity $ 6,755,026 $ (695,592) $(1,556,456) $ 4,502,978
=========== =========== =========== ===========
</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,
Municipal and Corporate Financing business unit, Business Equipment
Financing business unit, Transportation and Industrial Financing business
unit, and a portion of the Real Estate Financing business unit as of June
30, 1996.
(b) To reflect the lending to Ford Credit and other affiliates of net proceeds
remaining after paying down commercial paper and paying taxes.
(c) To reflect fixed assets sold.
(d) To reflect the write off of goodwill associated with the sold assets.
(e) To reflect the repayment of commercial paper.
(f) To reflect payment of current taxes related to the asset sales.
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 $(682,890) $ 227,440 $ 223,476
--------- --------- --------- ---------
EXPENSES
Sales, administrative and general 65,300 (66,620) (1,320)
Interest 276,915 (291,519) 181,383 166,779
Depreciation - operating lease 116,752 (116,752) 0
Other 24,220 (27,934) (3,714)
--------- --------- --------- ---------
Total expenses 483,187 (502,825) 181,383 161,745
--------- --------- --------- ---------
Income before taxes on income 195,739 (180,065) 46,057 61,731
Taxes on income 60,744 (52,064) 17,976 26,656
--------- --------- --------- ---------
NET INCOME $ 134,995 $(128,001) $ 28,081 $ 35,075
========= ========= ========= =========
</TABLE>
(a) To eliminate the profit and loss of Fleet Services, Rail Services, Municipal
and Corporate Financing, Business Equipment Financing, Transportation and
Industrial Financing, and a portion of Real Estate Financing for the entire
period.
(b) To reflect interest income from notes to affiliates, the reversal of
interest expense on the commercial paper effective January 1, 1995, 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 Six Months Ended June 30, 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 $ 379,709 $(381,524) $ 126,426 $ 124,611
--------- --------- --------- ---------
EXPENSES
Sales, administrative and general 35,912 (37,126) (1,214)
Interest 153,772 (164,513) 106,926 96,185
Depreciation - operating lease 65,545 (65,545) 0
Other 13,979 (14,250) (271)
--------- --------- --------- ---------
Total expenses 269,208 (281,434) 106,926 94,700
--------- --------- --------- ---------
Income before taxes on income 110,501 (100,090) 19,500 29,911
Taxes on income 30,053 (24,756) 7,611 12,908
--------- --------- --------- ---------
NET INCOME $ 80,448 $ (75,334) $ 11,889 $ 17,003
========= ========= ========= =========
</TABLE>
(a) To eliminate the profit and loss of Fleet Services, Rail Services, Municipal
and Corporate Financing, Business Equipment Financing, Transportation and
Industrial Financing, and a portion of Real Estate Financing for the entire
period.
(b) To reflect interest income from notes to affiliates, the reversal of
interest expense on the commercial paper effective January 1, 1995, and the
related tax effect thereon.
F-3
