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: December 31, 1997
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 10, 1999
NEWCOURT CREDIT GROUP INC.
By: John P. Stevenson
Corporate Secretary
<PAGE>
AT&T CAPITAL CORPORATION AND SUBSIDIARIES
AND NEWCOURT CREDIT GROUP INC.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma consolidated statement of income of AT&T
Capital Corporation and Subsidiaries ('AT&T Capital' or the 'company') and
Newcourt Credit Group Inc. ('Newcourt') is based on the historical Consolidated
Financial Statements of AT&T Capital and Newcourt for the year ended December
31, 1997. The unaudited pro forma consolidated income statement has been
prepared assuming the Newcourt Acquisition had occurred on January 1, 1997. An
unaudited pro forma consolidated balance sheet at any point in time and an
unaudited pro forma statement of income for any period subsequent to December
31, 1997 have not been presented since Newcourt's unaudited consolidated balance
sheet and statement of income as of and for the year ended December 31, 1998,
which are included and incorporated by reference in the Registration Statement
of which this prospectus is a part, reflect the Newcourt Acquisition at that
time and during that period, respectively. On January 12, 1998, Newcourt, an
Ontario corporation, consummated the purchase (the 'Newcourt Acquisition') of
all of the outstanding shares of common stock of AT&T Capital, pursuant to a
Stock Purchase Agreement dated as of November 17, 1997 (the 'Stock Purchase
Agreement') among the company, Newcourt, Hercules Holdings (Cayman) Ltd.
('Hercules'), the former direct owner of 97.4% of the company's common stock,
and by 21 members and one former member of the senior management of the company.
In connection with the Newcourt Acquisition, all of the outstanding shares of
common stock of the company were transferred to Newcourt Holdings USA, Inc., a
newly-formed Delaware corporation which is a wholly-owned subsidiary of
Newcourt. As a result of the Newcourt Acquisition, all of the outstanding shares
of common stock of the company are owned indirectly by Newcourt.
The aggregate purchase price pursuant to such Stock Purchase Agreement paid
by Newcourt to the stockholders of AT&T Capital was approximately $1.7 billion
comprised of approximately $1.1 billion in cash and the remainder comprising
approximately 17.6 million of Newcourt common shares. Such shares were issued
entirely to Hercules and generally may not be transferred for periods ranging
from 6 to 18 months following the date of the Newcourt Acquisition. The cash
portion of the purchase price paid by Newcourt was raised through the issuance
by Newcourt of 38.5 million shares of Newcourt common stock at approximately
$32.50 per share to employees of Newcourt and the public in Canada and the
United States. See the company's Current Report on Form 8-K dated February 9,
1998, as amended by the company's Current Report on Form 8-K/A dated February
18, 1998, both incorporated by reference in this Registration Statement, for the
prospectus filed by Newcourt in connection with its registration of fully paid
subscription rights to receive one common share of Newcourt.
The following pro forma financial information is unaudited and should be
read in conjunction with the accompanying notes thereto and with the company's
1997 audited consolidated financial statements, incorporated by reference in
this Registration Statement, and with the consolidated financial statements
included in Newcourt's Form 6-K for the years ended December 31, 1997 and 1996,
incorporated by reference in this Registration Statement. The pro forma
financial information is not necessarily indicative of the results of operations
that would have been achieved had the Newcourt Acquisition and the related
transactions actually occurred on the date referred to above, nor is it
necessarily indicative of the results of future operations, because such
unaudited pro forma financial information is based on estimates of financial
effects that may prove to be inaccurate over time.
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<PAGE>
AT&T CAPITAL CORPORATION AND SUBSIDIARIES
AND NEWCOURT CREDIT GROUP INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
U.S.
GAAP/$ AT&T PRO FORMA PRO FORMA
NEWCOURT CAPITAL ADJUSTMENTS NOTE CONSOLIDATED
--------- --------- ------------ ----- ------------
NOTE 2 NOTE 1
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
FEE AND AFFILIATE INCOME:
Securitization and syndication fees............. $143,570 $ 82,663 $226,233
Net income from affiliated companies............ 6,902 6,902
Management fees................................. 25,794 261,701 287,495
-------- -------- ------------
TOTAL FEE BASED INCOME..................... 176,266 344,364 520,630
Net rental revenue from operating leases........ 279,968 279,968
Net finance income.............................. 51,027 25,208 76,235
-------- -------- ------------
TOTAL ASSET FINANCE INCOME................. 227,293 649,540 876,833
Selling, general and other operating expenses... 130,092 525,383 655,475
Depreciation and amortization................... 14,760 20,345 $ 30,200 4b 65,305
Distributions on Preferred Securities........... 18,120 18,120
-------- -------- ----------- ------------
Income before loss on sale of businesses, net,
restructuring charges and taxes.................... 82,441 85,692 $ (30,200) 137,933
Loss on sales of businesses, net................ 18,563 18,563
Restructuring charges........................... 49,377 35,093 84,470
-------- -------- ----------- ------------
Income before taxes.................................. 33,064 32,036 $ (30,200) 34,900
Provision for (benefit of) income taxes......... (4,742) 11,029 6,287
-------- -------- ----------- ------------
NET INCOME................................. $ 37,806 $ 21,007 $ (30,200) $ 28,613
-------- -------- ----------- ------------
-------- -------- ----------- ------------
Basic and diluted earnings per common share.......... $.23
----
----
</TABLE>
See accompanying explanatory notes to the unaudited Pro Forma Consolidated
Statement of Income.
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<PAGE>
AT&T CAPITAL CORPORATION AND SUBSIDIARIES
AND NEWCOURT CREDIT GROUP INC.
EXPLANATORY NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED
STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1997
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
1. BASIS OF PRESENTATION
The unaudited pro forma consolidated statement of income has been prepared
using the following information:
(a) Audited consolidated financial statements of Newcourt Credit Group
Inc. ('Newcourt') as of and for the year ended December 31, 1997, which are
incorporated by reference in this Registration Statement (See Note 2);
(b) Audited consolidated financial statements of AT&T Capital
Corporation ('AT&T Capital' or the 'company') as of and for the year ended
December 31, 1997, which are incorporated by reference in this Registration
Statement. Certain financial statement items have been reclassified from
the audited consolidated financial statements of AT&T Capital in order to
conform to the presentation used by Newcourt. These reclassifications are
as follows:
<TABLE>
<CAPTION>
PER AT&T CAPITAL PRO FORMA NEWCOURT
PRESENTATION RECLASSIFICATION NOTE PRESENTATION
---------------- ---------------- ----------- ------------
<S> <C> <C> <C> <C>
INCOME STATEMENT CATEGORY*
Finance revenue.............................. 229,855 (229,855) (1) --
Capital lease revenue........................ 361,124 (361,124) (1) --
Rental revenue on operating leases........... 834,027 (834,027) (2) --
Equipment sales.............................. 49,349 (49,349) (3) --
Other revenue, net........................... 257,121 (257,121) (3) --
Interest expense............................. 451,470 (451,470) (1) --
Operating and administrative................. 545,728 (20,345) (4) 525,383
Depreciation on operating leases............. 554,059 (554,059) (2) --
Cost of equipment sales...................... 44,769 (44,769) (3) --
Provision for credit losses.................. 114,301 (114,301) (1) --
Net finance income........................... -- 25,208 sum of (1) 25,208
Net rental revenue from operating leases..... -- 279,968 sum of (2) 279,968
Management fees.............................. -- 261,701 sum of (3) 261,701
Depreciation and amortization................ -- 20,345 (4) 20,345
</TABLE>
- ------------
(1) Finance revenue, Capital lease revenue, Interest expense and Provision for
credit losses have been reclassified to the caption Net finance income.
(2) Rental revenue on operating leases and Depreciation on operating leases have
been reclassified to the caption Net rental revenue from operating leases.
(3) Other revenue, net, Equipment sales and Cost of equipment sales have been
reclassified to the caption Management fees.
(4) Depreciation on property, plant and equipment and goodwill amortization have
been reclassified from Operating and administrative to the caption
Depreciation and amortization.
* Descriptions may differ slightly in the Newcourt presentation. See AT&T
Capital Corporation and Subsidiaries and Newcourt Credit Group
Inc. -- Unaudited Pro Forma Consolidated Income Statement.
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<PAGE>
(c) Such other supplementary information as was considered necessary
to reflect the acquisition of the company by Newcourt (the 'Newcourt
Acquisition') in these unaudited pro forma consolidated financial
statements.
2. NEWCOURT CREDIT GROUP INC.
The financial statements of Newcourt as of and for the year ended December
31, 1997, incorporated by reference in this Registration Statement, were
prepared in accordance with accounting principles generally accepted in Canada
and are expressed in Canadian dollars. For the purposes of this unaudited pro
forma consolidated financial information, the following adjustments have been
made to the income statement of Newcourt to conform them to U.S. generally
accepted accounting principles in U.S. dollars.
(a) Differences between Generally Accepted Accounting Principles ('GAAP')
in Canada and the United States.
(i) For Canadian GAAP purposes, unrealized translation gains and
losses on long term monetary items are deferred and amortized over the
remaining terms of those items. For U.S. GAAP purposes, such gains and
losses are recorded in income immediately.
(ii) For Canadian GAAP purposes, amounts paid to employees to retire
issued stock options without issuing common stock are recorded as capital
transactions. For U.S. GAAP purposes, such amounts paid are recorded as
compensation expense.
(iii) For Canadian GAAP purposes, finance assets sold to
securitization vehicles are not consolidated. Under U.S. GAAP, certain of
these securitization vehicles are required to be accounted for under the
equity method of accounting while others are required to be consolidated.
Accordingly, for U.S. GAAP purposes, gains relating to these asset sales
have been deferred, and, in the case of consolidated vehicles, the assets
and liabilities have been recorded on the balance sheet. The deferred gains
will be recognized in income as the related finance assets are collected.
(iv) The restructuring charge was reduced for costs that would have
been accrued as an adjustment to the liabilities assumed relating to a
recent acquisition and the rationalization of certain Newcourt businesses
in Canada and the United States under U.S. GAAP, rather than expensed as
permitted by Canadian GAAP.
The following tables summarizes the differences between what was reported
by Newcourt in its financial statements under Canadian GAAP and what has been
reflected herein for U.S. GAAP purposes for the year ended December 31, 1997:
Income Statement:
<TABLE>
<S> <C>
Net income for the year ended December 31, 1997 as reported under Canadian GAAP.... $26,318
Difference in accounting for foreign exchange gains (losses) (net of income tax
recovery of $4,466).............................................................. (5,458)
Difference in accounting for options retired....................................... (796)
Difference in accounting for securitization transactions (net of income taxes of
$3,153).......................................................................... 3,964
Difference in accounting for restructuring charge (net of income taxes of
$11,272)......................................................................... 13,778
-------
Net income for the year ended December 31, 1997 reported under U.S. GAAP........... $37,806
-------
-------
</TABLE>
(b) Currency
The audited consolidated financial statements of Newcourt are expressed in
Canadian dollars. For the purposes of this unaudited pro forma consolidated
financial information, the consolidated statement of income of Newcourt has been
translated into U.S. dollars using the weighted average exchange rate for the
year ended December 31, 1997 of 1.3839.
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<PAGE>
3. PRO FORMA ASSUMPTIONS
(a) The acquisition, pursuant to an agreement dated November 17, 1997,
whereby Newcourt agreed to purchase all of the issued and outstanding common
shares of AT&T Capital, subject to satisfaction of certain closing conditions,
for approximately $1.7 billion payable as follows:
(i) approximately $1.1 billion by means of cash payment at closing;
and
(ii) the remainder by the issuance of approximately 17.6 million of
Newcourt common shares at closing.
(b) The acquisition of AT&T Capital has been accounted for using the
purchase method. The difference between the purchase price and estimated fair
value of the net assets acquired has been allocated to goodwill. The amount
assigned to goodwill will be amortized as a reduction to income over a 35 year
period.
(c) The issuance of 38.5 million Newcourt common shares, pursuant to a
prospectus filed with the Securities and Exchange Commission on November 24,
1997, which resulted in Newcourt receiving net proceeds (after the underwriters'
fees and the expenses of issue) of approximately $1.2 billion.
4. PRO FORMA ADJUSTMENTS
The pro forma adjustments contained in this pro forma consolidated
financial information include all adjustments which management believes is
necessary to present AT&T Capital's assets and liabilities at their respective
fair values at January 12, 1998. The following adjustments have been made to
reflect the Newcourt Acquisition:
(a) The unaudited pro forma statement of income does not reflect any
nonrecurring items directly attributable to the acquisition such as
restructuring charges (to cover the termination of certain employees, closure of
duplicate facilities and related items) and any future reduction in expenses
that are expected to be realized.
(b) Amortization of goodwill over a 35 year period.
5. EARNINGS PER SHARE
Earnings per share reflects the issuance by Newcourt of approximately 56.1
million common shares arising from the acquisition of the company combined with
the average number of Newcourt common shares outstanding (subsequent to the
subdivision of the common shares) during the period.
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