FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of a Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month(s) of: January 1, 1998 to December 31, 1998
NEWCOURT CREDIT GROUP INC.
BCE Place, 181 Bay Street
Suite 3500, P.O. Box 827
Toronto, Ontario
Canada, M5J 2T3
[Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.]
Form 20-F / / Form 40-F /X/
[Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.]
Yes / / No /X/
[If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b)]
82-
SIGNATURES
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.
Date: February 8, 1999
NEWCOURT CREDIT GROUP INC.
By: John P. Stevenson
Corporate Secretary
<PAGE>
News Release
For immediate release
Trading Symbol: NCT Contact: Robyn Matsumoto
Corporate Affairs
Exchange Listings: Toronto (416) 594-5308
Montreal
New York
Newcourt reports solid earnings and strong
organic origination growth in 1998
Quality earnings and diversified funding sources
also highlighted in results
Toronto, February 8, 1999 - Newcourt Credit
Group today reported net income of $294.4
million (US$198.2 million) for the year
ended December 31, 1998. These results
represent a 55% increase over the $190.1
million (US$135.1 million) reported for the
same period last year for the pro forma
combined operations of Newcourt and AT&T
Capital prior to a one-time restructuring
charge of $177.3 million (US$128.1 million).
Earnings per share on a fully diluted basis
increased to $2.06 (US$1.33) for the year
compared to $1.33 (US$0.96) prior to the
restructuring charge for 1997.
Fourth quarter earnings increased 27% to
$103.7 million (US$67.2 million) from
$81.8 million (US$58.1 million) in 1997 pro
forma. Earnings per share for the fourth
quarter were $0.71 (US$0.41) in line with
the consensus estimates of the 11 analysts
who follow the Company.
"As these results indicate, 1998 was a year
of strong fundamental performance for
Newcourt. During the year, we witnessed
unsettled capital markets and weak economic
conditions in some regions of the world. The
strength and quality of our core loan
origination businesses and the depth and
diversity of our funding sources contributed
significantly to the Company's success in
meeting these challenges," said Steven K.
Hudson, Chief Executive Officer.
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<PAGE>
Loan originations during 1998 amounted to $24.3
billion (US$15.6 billion) versus $17.0 billion
(US$11.9 billion) in 1997 pro forma.
In line with the distribution of origination
volumes in the prior year, Newcourt Financial,
the Company's commercial finance business,
generated $18.4 billion (US$11.8 billion) or 76%
of the total loan origination volume in 1998.
Newcourt Capital, the Company's corporate finance
business, originated the remaining $5.9 billion
(US$3.8 billion). Geographically, the North
American market accounted for approximately 89%
of the Company's new loan volume while the UK and
Europe accounted for approximately 8%.
"Newcourt has built its business model on
developing strong core origination platforms with
some of the world's leading manufacturers," noted
Hudson. "This past year was an opportunity to
'prove up' the organic power, the scalability and
the sustainability of these platforms as they
gained traction as the driving force in the
Company's origination growth."
During the year, Newcourt funded 35% of this loan
origination volume from on-balance sheet sources
with 21% coming from loan syndications and 44%
derived from securitization activities. The
quality of the Company's balance sheet has been
maintained with tangible leverage of 5.9:1 as at
December 31, 1998 comparable to the 5.7:1
reported as at December 31, 1997 on a pro forma
basis.
Total asset finance income for the year ended
December 31, 1998 rose 27% to $1,498.6 million
(US$1,008.9 million) from $1,178.5 million
(US$851.6 million) during 1997 on a pro forma
basis. Newcourt's continued focus on quality
earnings is reflected in the distribution of
revenue sources. Net finance & rental income of
$815.8 million (US$549.2 million) accounted for
54.4% of the Company's revenue mix while gain on
sale of finance assets of $452.1 million
(US$304.4 million) accounted for approximately
30.2%. The remaining 15.4% of revenue was
derived from management and other fees.
Newcourt's success at realizing better than
expected cost savings from the AT&T Capital
integration is reflected in the continued
reduction in the operating expense ratio.
Expressed as a percentage of owned and managed
loans, operating expenses on an annualized basis,
excluding amortization and depreciation, declined
from 3% as at December 31, 1997 pro forma to 2.7%
as at December 31, 1998.
<PAGE>
At a meeting of the Board of Directors held on
February 8, 1999, a quarterly dividend of $0.06
was approved for payment on February 26,1999, to
shareholders of record as of February 19, 1999.
Newcourt Credit Group is one of the world's
leading sources of commercial and corporate
asset-based financing with owned and managed
assets of $36.2 billion (US$23.3 billion) and a
global capability in 26 countries.
<PAGE>
<TABLE>
<CAPTION>
Newcourt Credit Group Inc.
Summary of Quarterly Financial Statistics
for the period ended December 31, 1998 <fn1>
I. Basic Earnings per Share (common and special)
Average Shares Outstanding during the Period
Number of Common and Special Shares as at January 1, 1998 83,070,958
Shares issued during the year: December 31, 1998
Weighted
Date # shares # days o/s Average
<S> <C> <C> <C> <C>
Issue to Nomura 1/12/98 17,633,857 354 / 365 17,102,426
Exchange for sub rights 1/12/98 38,500,000 354 / 365 37,339,726
Private placement 6/4/98 8,668,446 211 / 365 5,011,074
Other 439,373 303 / 365 364,724
65,241,676 59,832,411 59,817,950
Weighted average shares outstanding, December 31, 1998 142,888,908
Net income for the year to date $294,367
Basic earnings per share $2.06
II. Comparative Fully Diluted Earnings Per Share Summary
Three Months Ended YTD
Mar. 31 June 30 Sept. 30 Dec. 31 Dec. 31
<S> <C> <C> <C> <C> <C>
1997 0.23 0.31 0.36 0.43 1.33 <fn2>
1998 0.32 0.49 0.54 0.71 2.06
II. Balance Sheet Highlights ($ millions)
Three Months Ended YTD
Mar. 31 June 30 Sept. 30 Dec. 31 Dec. 31
1998 1998 1998 1998 1998
<S> <C> <C> <C> <C> <C>
Owned and managed assets 31,876 33,952 34,360 36,220 36,220
Tangible equity 1,973 2,635 2,652 2,788 2,788
Tangible leverage 7.1:1 5.2:1 5.9:1 5.9:1 5.9:1
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
IV. Income Statement Highlights ($000)
Net income Three Months Ended YTD
Mar. 31 June 30 Sept. 30 Dec. 31 Dec. 31
<S> <C> <C> <C> <C> <C>
1997 23,506 40,921 43,812<fn2> 81,841<fn2> 190,080<fn2>
1998 42,389 69,755 78,510 103,713 294,367
New originations
<S> <C> <C> <C> <C> <C>
1997 3,021,714 3,771,886 4,640,500 5,597,600 17,031,700
1998 4,535,989 5,911,759 6,339,545 7,499,738 24,287,031
1998 Originations
<S> <C>
U.S. & Canada 88.7%
U.K. / Europe 7.7%
Asia Pacific 2.5%
Latin America 1.1%
100.0%
V. Margin Analysis Summary ($000)
(i) Securitization Three Months Ended YTD
Mar. 31 June 30 Sept. 30 Dec. 31 Dec. 31
1998 1998 1998 1998 1998
<S> <C> <C> <C> <C> <C>
Securitization fees 76,028 97,274 79,690 130,766 383,758
Assets securitized 1,639,197 3,300,804 1,833,801 3,883,504 10,657,306
Securitization margin 4.64% 2.95% 4.35% 3.37% 3.60%
(ii) Syndication
Syndication fees 10,126 14,847 18,130 25,258 68,361
Assets syndicated 859,007 1,182,206 1,602,710 1,567,800 5,211,723
Syndication margin 1.18% 1.26% 1.13% 1.61% 1.31%
(iii) Net Finance Income
Finance assets
held for investment 11,516,392 11,704,883 12,778,941 13,365,986 13,365,986
Operating leases
held for investment
and sale 2,874,492 3,103,490 3,322,238 3,373,451 3,373,451
Finance assets
held for sale 1,597,878 1,634,739 2,316,715 2,394,488 2,394,488
Total owned assets 15,988,762 16,443,112 18,417,894 19,133,925 19,133,925
Net finance and
rental income 190,119 184,785 220,319 220,564 815,787
Net finance income
Margin 4.83% 4.56% 5.06% 4.70% 4.79%
Interest expense 218,741 236,057 254,935 267,453 977,186
OPEX / Owned and
managed assets 2.8% 2.7% 2.7% 2.7% 2.7%
<fn1> All $ expressed in C$ unless otherwise specified
</fn1>
<fm2>Prior to a one time restructuring charge
</fn2>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Newcourt Credit Group Inc.
CONSOLIDATED BALANCE SHEETS
[in thousands of Canadian dollars]
As at December 31
1998 1997
$ $
<S> <C> <C>
ASSETS
Cash and cash held in escrow 1,550,221 1,778,413
Finance assets held for investment 13,365,986 2,185,568
Operating leases held for investment 3,373,451 275,833
Finance assets held for sale 2,394,488 1,091,398
Investment in affiliated companies 302,437 173,918
Accounts receivable, prepaids and other 482,613 181,736
Property and equipment 145,699 87,396
Goodwill 1,896,657 408,754
Future income tax assets 227,292 0
Total Assets 23,738,844 6,183,016
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Accounts payable and accrued liabilities 1,039,032 303,968
Debt 18,015,185 2,789,816
Future income tax liability 0 27,739
Total Liabilities 19,054,217 3,121,523
Shareholders' Equity
Share capital 4,334,723 2,935,402
Retained earnings 349,904 126,091
Total Shareholders' Equity 4,684,627 3,061,493
Total Liabilities and Shareholders' Equity 23,738,844 6,183,016
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Newcourt Credit Group Inc.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
[in thousands of Canadian dollars, except for per share amounts]
Years ended December 31
1998 1997
$ $
<S> <C> <C>
Asset finance income
Net finance and rental income 815,787 84,349
Gain on sale of finance assets 452,119 188,837
Management and other fees 230,685 45,249
Total asset finance income 1,498,591 318,435
Operating and administrative 465,747 84,774
Salaries and wages 443,447 94,160
Goodwill amortization and depreciation expense 117,304 20,427
Operating income before restructuring
charges and taxes 472,093 119,074
Restructuring charges 0 103,000
Operating income before income taxes 472,093 16,074
Provision for (recovery of) income taxes 177,726 (20,347)
Net income for the year 294,367 36,421
Retained earnings, beginning of year 126,091 100,774
Dividends paid on common shares (26,001) (10,004)
Premium on redemption of preferred securities
and other (44,553) (1,100)
Retained earnings, end of year 349,904 126,091
Earnings per common share:
Basic $2.06 $0.52
Fully diluted $2.06 $0.52
</TABLE>
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