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 (Date of earliest event reported) October 31, 1994
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Commercial Credit Company
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(Exact name of registrant as specified in its charter)
Delaware 1-6594 52-0883351
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
300 Saint Paul Place, Baltimore, Maryland 21202
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(Address of principal executive offices) (Zip Code)
(410) 332-3000
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(Registrant's telephone number, including area code)
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COMMERCIAL CREDIT COMPANY
Current Report on Form 8-K
Item 5. Other Events
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Results of Operations
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The net income of Commercial Credit Company (the "Company") for the three
months and nine months ended September 30, 1994 was $57.8 million and $166.6
million, respectively, compared to $91.2 million and $215.2 million,
respectively, in the corresponding 1993 periods. The Company's income before
income taxes, minority interest and cumulative effect of changes in
accounting principles for the three months and nine months ended September
30, 1994 was $94.8 million and $273.8 million, respectively, compared to
$151.5 million and $366.0 million, respectively, in the corresponding 1993
periods. The Company's revenues for the three months and nine months ended
September 30, 1994 were $405.1 million and $1,181.9 million, respectively,
compared to $423.8 million and $1,192.3 million, respectively, in the
corresponding 1993 periods.
Net income for the nine months ended September 30, 1994 includes
approximately $5.2 million of dividend income from the equity securities of
The Travelers Inc., the Company's parent, that were exchanged for the
Company's investment in The Travelers Corporation ("old Travelers"). Net
income for the nine months ended September 30, 1993 includes $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, a
subsidiary of the Company, and $22.7 million in the Consumer Finance Segment.
Also included in net income for the nine months ended September 30, 1993 is
an after-tax charge of $2.4 million related to a change in accounting for
postretirement benefits (FAS No. 106) and an after-tax charge of $3.4 million
related to a change in accounting for postemployment benefits (FAS No. 112)
both of which were adopted during the fourth quarter of 1993 with
retroactive application to January 1, 1993. Excluding these items, net
income 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 Services segments.
At September 30, 1994 the Company had total debt consisting of certificates
of deposit of $74.0 million, short-term borrowings of $2,491.3 million and
long-term debt of $3,926.1 million. In addition the Company's total
stockholder's equity at September 30, 1994 was $1,108.1 million.
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Ratio of Earnings to Fixed Charges
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The Company's ratio of earnings to fixed charges for the nine months ended
September 30, 1994 was 1.85. This ratio has been computed by dividing
earnings available for fixed charges by fixed charges. For the purpose of
this ratio earnings available for fixed charges consist of pre-tax income
from continuing operations adjusted for undistributed equity earnings and
minority interest and fixed charges; and fixed charges consist of interest
expense and that portion of rentals deemed representative of the appropriate
interest factor.
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<TABLE><CAPTION>
COMMERCIAL CREDIT COMPANY
SELECTED FINANCIAL DATA
(In millions of dollars)
Business Segment Data
--------------------- Three months ended Nine months ended
September 30, September 30,
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1994 1993 1994 1993
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<S> <C> <C> <C> <C>
Revenues:
Consumer Finance $ 312.5 $ 321.2 $ 914.3 $ 893.4
Insurance Services 80.1 83.0 233.6 244.0
Corporate and Other 12.5 19.6 34.0 54.9
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$ 405.1 $ 423.8 $ 1,181.9 $ 1,192.3
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Income before cumulative effect
of changes in accounting principles:
Consumer Finance $ 59.1 $ 76.7 $ 164.9 $ 175.7
Insurance Services
(after minority interest of
$3.9; $6.7; $11.4; $18.9) 4.4 6.4 13.1 18.2
Corporate and Other (5.7) (.4) (11.4) 5.3
Equity in income of The
Travelers Corporation -. 8.5 -. 21.8
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57.8 91.2 166.6 221.0
Cumulative effect of changes in
accounting principles -. -. -. (5.8)
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Net income $ 57.8 $ 91.2 $ 166.6 $ 215.2
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Consumer Finance Operations
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As of, and for, the As of, and for, the
Three months ended Nine months ended
September 30, September 30,
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1994 1993 1994 1993
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Net receivables
Real estate-secured loans $2,841.0 $2,706.0 $2,841.0 $2,706.0
Personal loans 2,795.4 2,465.9 2,795.4 2,465.9
Credit cards 686.6 588.0 686.6 588.0
Sales finance and other 432.6 287.8 432.6 287.8
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Consumer finance receivables,
net of unearned finance charges 6,755.6 6,047.7 6,755.6 6,047.7
Accrued interest receivable 37.2 38.5 37.2 38.5
Allowance for credit losses (178.1) (159.9) (178.1) (159.9)
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Consumer finance receivables, net $6,614.7 $5,926.3 $6,614.7 $5,926.3
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60+ days past due as % of
receivables 1.90% 2.21% 1.90% 2.21%
Charge-off rate 1.91% 2.25% 2.08% 2.40%
Average yield 15.49% 15.91% 15.33% 15.91%
Average net interest margin 8.86% 8.49% 8.67% 8.41%
Reserves as % of net receivables 2.64% 2.64% 2.64% 2.64%
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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 hereunto duly authorized.
Dated: October 31, 1994 COMMERCIAL CREDIT COMPANY
By /s/ William T. Bozarth
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William T. Bozarth
Vice President
