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 September 30, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to _______
Commission file number 1-6594
COMMERCIAL CREDIT COMPANY
(Exact name of registrant as specified in its charter)
Delaware 52-0883351
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
300 St. Paul Place, Baltimore, Maryland 21202
(Address of principal executive offices) (Zip Code)
(410) 332-3000
(Registrant's telephone number, including area code)
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
----- -----
The registrant is an indirect wholly owned subsidiary of The
Travelers Inc. As of the date hereof, one share of the
registrant's Common Stock, $.01 par value, was outstanding.
REDUCED DISCLOSURE FORMAT
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 10-Q WITH THE REDUCED DISCLOSURE FORMAT.
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Commercial Credit Company and Subsidiaries
TABLE OF CONTENTS
-----------------
Part I - Financial Information
<S> <C>
Item 1. Financial Statements: Page No.
--------
Condensed Consolidated Statement of Income (Unaudited) -
Three and Nine Months Ended September 30, 1994 and 1993 3
Condensed Consolidated Statement of Financial Position -
September 30, 1994 (Unaudited) and December 31, 1993 4
Condensed Consolidated Statement of Cash Flows (Unaudited) -
Nine Months Ended September 30, 1994 and 1993 5
Notes to Condensed Consolidated Financial Statements - (Unaudited) 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K 12
Exhibit Index 13
Signatures 14
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2
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<CAPTION>
Commercial Credit Company and Subsidiaries
Condensed Consolidated Statement of Income (Unaudited)
(In millions of dollars)
Three months ended Nine months ended
September 30, September 30,
------------------------- -----------------------
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues
Finance related interest and other charges $262.4 $239.4 $760.6 $706.7
Insurance premiums 98.8 85.3 284.0 254.4
Net investment income 18.9 16.6 55.4 52.9
Equity in income of old Travelers - 12.0 - 29.6
Other income 25.0 70.5 81.9 148.7
----------------------------------------------------------------------------------------------------------------
Total revenues 405.1 423.8 1,181.9 1,192.3
----------------------------------------------------------------------------------------------------------------
Expenses
Interest 103.1 92.6 293.4 270.0
Policyholder benefits and claims 59.8 54.6 174.3 160.1
Insurance underwriting, acquisition and operating 28.4 21.2 76.7 66.1
Non-insurance compensation and benefits 45.9 40.2 137.1 123.2
Provision for credit losses 35.3 27.8 112.3 94.9
Other operating 37.8 35.9 114.3 112.0
----------------------------------------------------------------------------------------------------------------
Total expenses 310.3 272.3 908.1 826.3
----------------------------------------------------------------------------------------------------------------
Income before income taxes, minority interest and
cumulative effect of changes
in accounting principles 94.8 151.5 273.8 366.0
Provision for income taxes 33.1 53.6 95.8 126.1
----------------------------------------------------------------------------------------------------------------
Income before minority interest and cumulative
effect of changes in accounting principles 61.7 97.9 178.0 239.9
Minority interest, net of income taxes (3.9) (6.7) (11.4) (18.9)
Cumulative effect of changes
in accounting principles,
net of income taxes -. -. - (5.8)
----------------------------------------------------------------------------------------------------------------
Net income $ 57.8 $ 91.2 $166.6 $215.2
================================================================================================================
See Notes to Condensed Consolidated Financial Statements.
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3
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<TABLE>
<CAPTION>
Commercial Credit Company and Subsidiaries
Condensed Consolidated Statement of Financial Position
(In millions of dollars, except per share amounts)
September 30, 1994 December 31,1993
-----------------------------------------------------------------------------------------------------------------------
Assets (Unaudited)
<S> <C> <C>
Cash and cash equivalents $ 11.3 $25.6
Investments:
Fixed maturities:
Available for sale (1994, cost - $924.8; 1993, market - $784.1) 870.4 752.5
Held to maturity (market $12.8 and $35.0) 12.2 33.7
Equity securities (1994, cost - $290.8; 1993, market - $368.5) 292.1 300.0
Mortgage loans 219.8 205.1
Short-term and other 118.3 246.7
---------------------------------------------------------------------------------------------------------------------
Total investments 1,512.8 1,538.0
---------------------------------------------------------------------------------------------------------------------
Consumer finance receivables 6,792.8 6,383.1
Allowance for losses (178.1) (167.5)
---------------------------------------------------------------------------------------------------------------------
Net consumer finance receivables 6,614.7 6,215.6
Other receivables 556.8 560.9
Deferred policy acquisition costs 44.2 26.7
Cost of acquired businesses in excess of net assets 103.1 105.8
Other assets 318.6 421.1
---------------------------------------------------------------------------------------------------------------------
Total assets $9,161.5 $8,893.7
=====================================================================================================================
Liabilities
Certificates of deposit $ 74.0 $ 56.7
Short-term borrowings 2,491.3 2,206.1
Long-term debt 3,926.1 3,969.8
---------------------------------------------------------------------------------------------------------------------
Total debt 6,491.4 6,232.6
Insurance policy and claims reserves 993.3 894.7
Accounts payable and other liabilities 568.7 655.7
---------------------------------------------------------------------------------------------------------------------
Total liabilities 8,053.4 7,783.0
---------------------------------------------------------------------------------------------------------------------
Stockholder's equity
Common stock ($.01 par value; authorized shares: 1,000; share issued: 1) - -
Additional paid-in-capital 153.2 94.7
Retained earnings 979.2 1,002.6
Unrealized gain (loss) on investments (24.2) 14.0
Cumulative translation adjustments (.1) (.6)
---------------------------------------------------------------------------------------------------------------------
Total stockholder's equity 1,108.1 1,110.7
---------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholder's equity $9,161.5 $8,893.7
=====================================================================================================================
See Notes to Condensed Consolidated Financial Statements
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4
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<TABLE>
<CAPTION>
Commercial Credit Company and Subsidiaries
Condensed Consolidated Statement of Cash Flows (Unaudited)
(In millions of dollars)
Nine months ended September 30, 1994 1993
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash Flows From Operating Activities
Income before income taxes, minority interest and cumulative effect of
changes in accounting principle $ 273.8 $ 366.0
Adjustments to reconcile income before income taxes, minority interest and cumulative
effect of changes in accounting principle to net cash provided by (used in) operating
activities:
Amortization of deferred policy acquisition costs and value of insurance in force 41.6 40.7
Additions to deferred policy acquisition costs (59.1) (41.2)
Provision for credit losses 112.3 94.9
Undistributed equity earnings of affiliates (1.6) (19.9)
Changes in:
Insurance policy and claims reserves 98.6 62.8
Other, net (20.8) 33.2
-----------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operations 444.8 536.5
Income taxes paid (112.0) (93.6)
-----------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities 332.8 442.9
-----------------------------------------------------------------------------------------------------------------------
Cash Flows From Investing Activities
Net change in credit card receivables - (61.5)
Loans originated or purchased (2,137.1) (1,936.4)
Loans repaid or sold 1,588.1 1,598.1
Purchases of investments (565.0) (988.4)
Proceeds from sales/maturities of investments 548.3 854.7
Redemption of Parent Company Series Z preferred stock 100.0 100.0
Other, net (5.2) (41.8)
-----------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities (470.9) (475.3)
-----------------------------------------------------------------------------------------------------------------------
Cash Flows From Financing Activities
Dividends paid (135.0) (120.0)
Issuance of long-term debt 200.0 950.0
Payments of long-term debt (243.7) (122.0)
Net change in short-term borrowings 285.2 (702.8)
Net change in certificates of deposit 17.3 22.9
-----------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 123.8 28.1
Change in cash and cash equivalents (14.3) (4.3)
Cash and cash equivalents at beginning of period 25.6 22.0
-----------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 11.3 $ 17.7
=======================================================================================================================
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 285.3 $ 240.7
=======================================================================================================================
See Notes to Condensed Consolidated Financial Statements
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5
<PAGE>
Commercial Credit Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions of dollars)
1. Basis of Presentation
---------------------
Commercial Credit Company (the Company) is a wholly owned
subsidiary of CCC Holdings, Inc. which is a wholly owned
subsidiary of The Travelers Inc. (the Parent). The condensed
consolidated financial statements include the accounts of the
Company and its subsidiaries.
The accompanying condensed consolidated financial statements
as of September 30, 1994 and for the three and nine month
periods ended September 30, 1994 and 1993 are unaudited. In
the opinion of management, all adjustments, consisting of
normal recurring adjustments, necessary for a fair
presentation have been reflected. The accompanying condensed
consolidated financial statements should be read in
conjunction with the consolidated financial statements and
related notes included in the Company's Annual Report on Form
10-K for the year ended December 31, 1993.
Certain financial information that is normally included in
annual financial statements prepared in accordance with
generally accepted accounting principles but is not required
for interim reporting purposes has been condensed or omitted.
FAS 115. Effective January 1, 1994, the Company adopted
Statement of Financial Accounting Standards No. 115 (FAS
115), "Accounting for Certain Investments in Debt and Equity
Securities," which addresses accounting and reporting for
investments in equity securities that have a readily
determinable fair value and for all debt securities. Debt
securities that the Company has the positive intent and
ability to hold to maturity have been classified as "held to
maturity" and have been reported at amortized cost.
Investment securities that are not classified as "held to
maturity" have been classified as "available for sale" and
are reported at fair value, with unrealized gains and losses,
net of income taxes, charged or credited directly to
stockholder's equity. Initial adoption of this standard
resulted in a net increase of $80.8 (net of taxes) to net
unrealized gains on investment securities in stockholder's
equity.
2. Consumer Finance Receivables
----------------------------
Consumer finance receivables, net of unearned finance charges
of $653.6 and $613.0 at September 30, 1994 and December 31,
1993, respectively, consisted of the following:
September 30, 1994 December 31, 1993
------------------ -----------------
Real estate-secured loans $2,841.0 $2,705.8
Personal loans 2,795.4 2,495.2
Credit cards 686.6 697.1
Sales finance and other 432.6 443.7
-------- --------
Consumer finance receivables 6,755.6 6,341.8
Accrued interest receivable 37.2 41.3
Allowance for credit losses (178.1) (167.5)
------ ------
Net consumer finance
receivables $6,614.7 $6,215.6
======= =======
6
<PAGE>
Notes to Condensed Consolidated Financial Statements (continued)
3. Debt
----
The Company issues commercial paper directly to investors
and maintains unused credit availability under its bank
lines of credit at least equal to the amount of its
outstanding commercial paper. At September 30, 1994 and
December 31, 1993, short-term borrowings consisted of
commercial paper totaling $2,491.3 and $2,206.1,
respectively. The Company may borrow under its revolving
credit facility at various interest rate options and
compensates the banks for the facilities through commitment
fees. During the third quarter of 1994 the Parent, the
Company and The Travelers Insurance Company (TIC) entered
into an agreement with a syndicate of banks to provide
$1,500 of revolving credit, to be allocated to any of the
Parent, the Company or TIC. The participation of TIC in
this agreement is limited to $300. The revolving credit
facility consists of a 364-day revolving credit facility in
the amount of $300 and a 5-year revolving credit facility in
the amount of $1,200. At September 30, 1994, $650 was
allocated to the Company and $200 was allocated to TIC.
At September 30, 1994, the Company had committed and
available revolving credit facilities of $3,010, of which
$990 expires in 1995, $1,500 expires in 1997 and $520
expires in 1999.
4. Related Party Transactions
--------------------------
On December 31, 1993, the Parent acquired the approximately
73% it did not already own of The Travelers Corporation (old
Travelers), by means of a merger of old Travelers into the
Parent. As a result of the merger, the Company's investment
in the common stock of old Travelers, which through that
date had been carried on the equity basis of accounting, was
exchanged for 7.2 million shares of common stock of the
Parent at a ratio of 0.80423 of a share of the Parent common
stock for each share of old Travelers common stock. At
December 31, 1993, the investment was reflected at a
carrying amount of $211.3. During 1994, all of the
Company's shares of the Parent's common stock were exchanged
for 2,655 shares of Convertible Adjustable Rate Series Y
Preferred Stock of the Parent, with a liquidation value of
$100,000 per share, which is redeemable at the option of the
holder at certain times and callable by the Parent at
certain times. The preferred stock had a value equal to the
market value of the common shares at the time the exchange
was agreed upon. Subsequently 550 shares of preferred stock
were distributed to the Parent as a dividend. At September
30, 1994, this investment is reflected at a carrying amount
of $210.5.
To facilitate cash management the Company has entered into
an agreement with the Parent under which the Company or the
Parent may borrow from the other party at any time an amount
up to the greater of $50.0 or 1% of the Company's
consolidated assets. The agreement may be terminated by
either party at any time. The interest rate to be charged
on borrowings outstanding will be equivalent to an
appropriate market rate.
7
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION and ANALYSIS of FINANCIAL CONDITION
and RESULTS of OPERATIONS
Consolidated Results of Operations
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<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------------------------------
(in millions, except per share amounts) 1994 1993 1994 1993
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $405.1 $423.8 $1,181.9 $1,192.3
===== ===== ======= =======
Income before cumulative effect of
changes in accounting principles $57.8 $91.2 $166.6 $221.0
==== ==== ===== =====
Net income $57.8 $91.2 $166.6 $215.2
==== ==== ===== =====
</TABLE>
Results of Operations
Commercial Credit Company's (the Company) earnings for the nine
months ended September 30, 1994 include approximately $5.2 million
of dividend income from the equity securities of The Travelers Inc.
(Parent) that were exchanged for the Company's investment in The
Travelers Corporation (old Travelers). Earnings for the nine months
ended September 30, 1993 include $21.8 million of equity in the income
of old Travelers and reported after-tax net investment portfolio
gains of $7.6 million at Gulf Insurance Company (Gulf) and $22.7
million in the Consumer Finance Segment. Also included in
earnings for the nine months ended September 30, 1993, is an
after-tax charge of $3.4 million resulting from the adoption of
Statement of Financial Accounting Standards No. 112 (FAS 112),
"Employers' Accounting for Postemployment Benefits," and an
after-tax charge of $2.4 million resulting from the adoption of
Statement of Financial Accounting Standards No. 106 (FAS 106),
"Employers' Accounting for Postretirement Benefits Other Than
Pensions." Excluding these items, earnings for the nine months
ended September 30, 1994 decreased by $7.5 million from the 1993
period, reflecting primarily higher net interest costs in the
Corporate segment, offset in part by higher earnings in the
Consumer Finance and Insurance segments.
The following discussion presents in more detail each segment's
performance.
Segment Results for the Three Months Ended September 30, 1994 and
-----------------------------------------------------------------
1993
----
Consumer Finance Services
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<CAPTION>
Three Months Ended September 30,
------------------------------------------------------
($ in millions) 1994 1993
-------------------------------------------------------------------------------------------------
Revenues Net income Revenues Net income
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Consumer Finance Services* $312.5 $59.1 $321.2 $76.7
=================================================================================================
</TABLE>
* Net income for 1993 includes $22.7 of reported investment
portfolio gains.
The increase in Consumer Finance net income in the third quarter
of 1994 over the same period last year (excluding investment
portfolio gains) reflects continued growth in receivables
outstanding to $6.756 billion (before allowance for losses and
accrued interest receivable) at the end of the period. This
represents a 12% increase over September 30, 1993 and was
marked particularly by growth in personal loans.
8
<PAGE>
Charge-offs remained at low levels for the 1994 period -- 1.91%
versus 2.25% in the prior year quarter -- while the 60+ day
delinquencies remained at historically low levels of 1.90% versus
2.21%. The average yield on the portfolio declined to 15.49%
from 15.91%, although net margins rose to 8.86%. The former
primarily reflects a shift in product mix toward more variable
rate loans, which have lower yields, with higher margins
reflecting lower funding costs.
<TABLE>
<CAPTION>
As of, and for, the
Three Months Ended September 30,
-----------------------------------
1994 1993
-----------------------------------
<S> <C> <C>
1994 1993
Allowance for losses as % of
consumer finance receivables 2.64% 2.64%
Charge-off rate 1.91% 2.25%
60 + days past due on a contractual
basis as % of gross consumer
finance receivables at quarter end 1.90% 2.21%
</TABLE>
Insurance Services
<TABLE>
<CAPTION>
Three Months Ended September 30,
---------------------------------------------------------
(In millions) 1994 1993
-----------------------------------------------------------------------------------------------------
Revenues Net income Revenues Net income
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gulf property and casualty* $79.5 $ 7.7 $81.6 $13.3
Minority interest - Gulf - (3.9) - (6.7)
Other .6 .6 1.4 (0.2)
-----------------------------------------------------------------------------------------------------
Total Insurance Services $80.1 $ 4.4 $83.0 $ 6.4
=====================================================================================================
</TABLE>
* Net income for 1993 includes $6.2 million of reported
investment portfolio gains.
Operating earnings for the 1994 period for Gulf increased 8% over
the prior year period, and continue to reflect emphasis on the
higher margin specialty businesses, particularly financial
services. Gulf's combined ratio was 98.4% for the quarter ended
September 30, 1994 versus 94.9% in the third quarter of last
year.
Corporate and Other
<TABLE>
<CAPTION>
Three Months Ended September 30,
---------------------------------------------------------
(In millions) 1994 1993
-----------------------------------------------------------------------------------------------------
Revenues Net income Revenues Net income
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Corporate and other $(5.7) $(0.4)
Equity in income of Travelers - 8.5
-----------------------------------------------------------------------------------------------------
Total Corporate and Other $12.5 $(5.7) $19.6 $8.1
=====================================================================================================
</TABLE>
9
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The decline in Corporate and Other net income for 1994 is
primarily attributable to increases in other interest costs to
the extent borne at the corporate level.
Segment Results for the Nine Months Ended September 30, 1994 and 1993
---------------------------------------------------------------------
The overall operating trends for the nine months ended September
30, 1994 and 1993 were substantially the same as those of the
third quarter periods except as noted below.
Consumer Finance Services
<TABLE>
<CAPTION>
Nine Months Ended September 30,
---------------------------------------------------------
($ In millions) 1994 1993
-----------------------------------------------------------------------------------------------------
Revenues Net income Revenues Net income
-----------------------------------------------------------------------------------------------------
<S> <C> <C> C> <C>
Consumer Finance Services* $914.3 $164.9 $893.4 $175.7
=====================================================================================================
</TABLE>
* Net income for 1993 includes $22.7 of reported investment
portfolio gains.
Charge-offs remained at low levels for the first nine months of
1994 period -- 2.08% versus 2.40% in the prior year period. The
average yield on the portfolio declined to 15.33% from 15.91%,
although net margins rose to 8.67%. This reflects a shift in
product mix toward more variable rate loans and lower funding
costs.
Insurance Services
<TABLE>
<CAPTION>
Nine Months Ended September 30,
---------------------------------------------------------
(In millions) 1994 1993
-----------------------------------------------------------------------------------------------------
Revenues Net income Revenues Net income
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gulf property and casualty* $231.9 $ 22.8 $239.8 $37.7
Minority interest - Gulf - (11.4) - (18.9)
Other 1.7 1.7 4.2 (0.6)
-----------------------------------------------------------------------------------------------------
Total Insurance Services $233.6 $ 13.1 $244.0 $ 18.2
=====================================================================================================
</TABLE>
* Net income for 1993 includes $15.2 of reported investment
portfolio gains.
Operating earnings for the 1994 period for Gulf remained about
even with the prior year period, and continue to reflect emphasis
on the higher margin specialty businesses, particularly financial
services. Gulf's combined ratio was 98.3% for the nine months
ended September 30, 1994 versus 95.2% in the comparable period
last year.
10
<PAGE>
Corporate and Other
<TABLE>
<CAPTION>
Nine Months Ended September 30,
------------------------------------------------------
(In millions) 1994 1993
-------------------------------------------------------------------------------------------------
Revenues Net income Revenues Net income
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Corporate and other $(11.4) $ 5.3
Equity in income of Travelers - 21.8
-----------------------------------------------------------------------------------------------------
Total Corporate and Other $34.0 $(11.4) $54.9 $27.1
=====================================================================================================
</TABLE>
The decline in Corporate and Other net income for 1994 is
primarily attributable to increases in other interest costs to
the extent borne at the corporate level.
Liquidity and Capital Resources
The Company issues commercial paper directly to investors and
maintains unused credit availability under committed revolving
credit agreements at least equal to the amount of commercial
paper outstanding. As of September 30, 1994, the Company had
unused credit availability of $3.01 billion. The Company may
borrow under its revolving credit facilities at various interest
rate options and compensates the banks for the facilities through
commitment fees.
During the third quarter of 1994 the Parent, the Company and The
Travelers Insurance Company (TIC) entered into an agreement with
a syndicate of banks to provide $1.5 billion of revolving credit,
to be allocated to any of the Parent, the Company or TIC. The
participation of TIC in this agreement is limited to $300
million. The revolving credit facility consists of a 364-day
revolving credit facility in the amount of $300 million and a
5-year revolving credit facility in the amount of $1.2 billion.
At September 30, 1994, $650 million was allocated to the Company
and $200 million was allocated to TIC.
During 1994, the Company completed the following debt offerings
and, as of November 11, 1994, had $350 million available for debt
offerings under its shelf registration statement:
- 7 7/8% Notes due July 15, 2004 $200 million
- 8 1/4% Notes due November 1, 2001 $300 million
The Company is limited by covenants in its revolving credit
agreements as to the amount of dividends and advances that may be
made to the Parent or its affiliated companies. At September 30,
1994, the Company would have been able to remit $150 million to
the Parent under its most restrictive covenants or regulatory
requirements.
Accounting Standards Not Yet Adopted
FAS 114 and FAS 118
Statement of Financial Accounting Standards No. 114, "Accounting
by Creditors for Impairment of a Loan," and Statement of
Financial Accounting Standards No. 118, "Accounting by Creditors
for Impairment of a Loan - Income Recognition and Disclosures,"
describe how impaired loans should be measured when determining
the amount of a loan loss accrual. These Statements also amend
existing guidance on the measurement of restructured loans in a
troubled debt restructuring involving a modification of terms.
The ultimate impact, if any, of implementing these Statements
will depend on market conditions and the composition of the
Company's loan portfolio at the date of implementation and thus
the Company has not yet determined the impact, if any, these
Statements will have on its financial statements. The Statements
have an effective date of January 1, 1995.
11
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
See Exhibit Index.
(b) Reports on Form 8-K:
On July 19, 1994, the Company filed a Current Report on Form
8-K, dated July 13, 1994, reporting under Item 5 thereof the
results of its operations for the three months and six months
ended June 30, 1994, and certain other selected financial data
and updated information with respect to certain legal
proceedings, and filing certain exhibits under Item 7 thereof
relating to the offer and sale of the Company's 7 7/8% Notes due
July 15, 2004.
No other Current Reports on Form 8-K were filed during the
quarter ended September 30, 1994; however, on October 31, 1994,
the Company filed a Current Report on Form 8-K, dated October 31,
1994, reporting under Item 5 thereof the results of its
operations for the three months and nine months ended September
30, 1994, and certain other selected financial data, and on
November 8, 1994, the Company filed a Current Report on Form 8-K
dated November 3, 1994, filing certain exhibits under Item 7
thereof relating to the offer and sale of the Company's 8 1/4% Notes
due November 1, 2001.
12
<PAGE>
EXHIBIT INDEX
Exhibit Filing
Number Description of Exhibit Method
------ ---------------------- ------
4.01.1 Indenture, dated as of December 1, 1986 (the
"Indenture"), between the Company and
Citibank, N.A., relating to the Company's debt
securities, incorporated by reference to
Exhibit 4.01 to the Company's Annual Report on
Form 10-K for the fiscal year ended December
31, 1988 (File No. 1-6594).
4.01.2 First Supplemental Indenture, dated as of June
13, 1990, to the Indenture, incorporated by
reference to Exhibit 1 to the Company's
Current Report on Form 8-K dated June 13, 1990
(File No. 1-6594).
The total amount of securities authorized
pursuant to any other instrument defining
rights of holders of long-term debt of the
Company does not exceed 10% of the total
assets of the Company and its consolidated
subsidiaries. The Company will furnish
copies of any such instrument to the
Securities and Exchange Commission upon
request.
10.01 $1,500,000,000 Three Year Credit Agreement
dated as of February 24, 1994 among the
Company, the Banks party thereto and Morgan
Guaranty Trust Company of New York, as Agent,
incorporated by reference to Exhibit 10.01 to
the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 (File
No. 1-6594)
12.01 Computation of Ratio of Earnings to Fixed Electronic
Charges.
27.01 Financial Data Schedule Electronic
13
<PAGE>
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.
Commercial Credit Company
Date: November 14, 1994 By /s/ William R. Hofmann
-----------------------------
William R. Hofmann
Vice President
(Principal Financial Officer)
Date: November 14, 1994 By /s/ Irwin Ettinger
-----------------------------
Irwin Ettinger
Senior Vice President
(Chief Accounting Officer)
14
<PAGE>
EXHIBIT INDEX
Exhibit Filing
Number Description of Exhibit Method
------ ---------------------- ------
4.01.1 Indenture, dated as of December 1, 1986 (the
"Indenture"), between the Company and
Citibank, N.A., relating to the Company's debt
securities, incorporated by reference to
Exhibit 4.01 to the Company's Annual Report on
Form 10-K for the fiscal year ended December
31, 1988 (File No. 1-6594).
4.01.2 First Supplemental Indenture, dated as of June
13, 1990, to the Indenture, incorporated by
reference to Exhibit 1 to the Company's
Current Report on Form 8-K dated June 13, 1990
(File No. 1-6594).
The total amount of securities authorized
pursuant to any other instrument defining
rights of holders of long-term debt of the
Company does not exceed 10% of the total
assets of the Company and its consolidated
subsidiaries. The Company will furnish
copies of any such instrument to the
Securities and Exchange Commission upon
request.
10.01 $1,500,000,000 Three Year Credit Agreement
dated as of February 24, 1994 among the
Company, the Banks party thereto and Morgan
Guaranty Trust Company of New York, as Agent,
incorporated by reference to Exhibit 10.01 to
the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 (File
No. 1-6594)
12.01 Computation of Ratio of Earnings to Fixed Electronic
Charges.
27.01 Financial Data Schedule Electronic
Exhibit 12.01
Commercial Credit Company and Subsidiaries
Computation of Ratio of Earnings to Fixed Charges
(In millions of dollars, except for ratio)
Nine months ended September 30,
-----------------------------------
1994 1993
---- ----
Income before income taxes, minority interest
and cumulative of changes in accounting
principle $273.8 $366.0
Elimination of undistributed equity earnings (1.6) (19.9)
Pre-tax minority interest (15.5) (27.3)
Interest 293.4 270.0
Portion of rentals deemed to be interest 8.2 8.6
----- -----
Earnings available for fixed charges $558.3 $597.4
===== =====
Fixed charges
-------------
Interest $293.4 $270.0
Portion of rentals deemed to be interest 8.2 8.6
----- -----
Fixed charges $301.6 $278.6
===== =====
Ratio of earnings to fixed charges 1.85x 2.14x
==== ====
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE SEPTEMBER 30,
1994 FINANCIAL STATEMENTS OF COMMERCIAL CREDIT COMPANY AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> $ 11,300
<SECURITIES> 1,512,800 <F1>
<RECEIVABLES> 7,349,600 <F2>
<ALLOWANCES> (178,100)
<INVENTORY> 0 <F3>
<CURRENT-ASSETS> 0 <F3>
<PP&E> 0 <F3>
<DEPRECIATION> 0 <F3>
<TOTAL-ASSETS> 9,161,500
<CURRENT-LIABILITIES> 0 <F3>
<BONDS> 6,491,400 <F4>
0 <F3>
0
<COMMON> 0
<OTHER-SE> 1,108,100 <F5>
<TOTAL-LIABILITY-AND-EQUITY> 9,161,500
<SALES> 0 <F3>
<TOTAL-REVENUES> 1,181,900
<CGS> 0 <F3>
<TOTAL-COSTS> 908,100
<OTHER-EXPENSES> 0 <F3>
<LOSS-PROVISION> 112,300 <F6>
<INTEREST-EXPENSE> 293,400 <F6>
<INCOME-PRETAX> 273,800
<INCOME-TAX> 95,800
<INCOME-CONTINUING> 166,600
<DISCONTINUED> 0 <F3>
<EXTRAORDINARY> 0 <F3>
<CHANGES> 0 <F3>
<NET-INCOME> 166,600
<EPS-PRIMARY> 0 <F3>
<EPS-DILUTED> 0 <F3>
<FN>
<F1> Includes the following items from the financial statements: total investments $1,512,800.
<F2> Includes the following items from the financial statements: consumer finance
receivables $6,792,800 and other receivables $556,800.
<F3> Items which are inapplicable relative to the underlying financial statements are
indicated with a zero as required.
<F4> Includes the following items from the financial statements: certificates of deposit
$74,000; short-term borrowings $2,491,300 and long-term debt $3,926,100.
<F5> Includes the following items from the financial statements: additional paid-in capital
$153,200; retained earnings $979,200; unrealized gain (loss) on investments $(24,200);
and cumulative translation adjustment $(100).
<F6> Included in total costs and expenses applicable to sales and revenues.
</TABLE>
