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) January 17, 1995
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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 year ended December 31, 1994 was $55.3 million and $221.9 million,
respectively, compared to $70.8 million and $286.0 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 year ended December 31, 1994 was $90.1 million and $363.9 million,
respectively, compared to $101.9 million and $467.9 million, respectively, in
the corresponding 1993 periods. The Company's revenues for the three months and
year ended December 31, 1994 were $416.1 million and $1,598.0 million,
respectively, compared to $388.0 million and $1,580.3 million, respectively, in
the corresponding 1993 periods.
Net income for the year ended December 31, 1994 includes approximately $7.3
million of dividend income from the equity securities of The Travelers Inc., the
Company's parent, which were received in exchange for the Company's investment
in The Travelers Corporation ("old Travelers"). Net income for the year ended
December 31, 1993 includes $34.9 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, then a subsidiary of the Company, and $22.7 million
in the Consumer Finance Segment. Also included in net income for the year ended
December 31, 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). Excluding these items, net income for the year ended December 31,
1994 decreased by $12.0 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 December 31, 1994 the Company had total debt consisting of certificates of
deposit of $73.5 million, short-term borrowings of $2,304.6 million and long-
term debt of $4,010.0 million. In addition the Company's total stockholder's
equity at December 31, 1994 was $1,112.4 million.
On December 30, 1994 the Company sold its 50% interest in Commercial Insurance
Resources, Inc., the parent of Gulf Insurance Company, to an affiliate, The
Travelers Indemnity Company for $150 million. This amount exceeded the
Company's investment by approximately $10 million, and such excess was treated
as a capital contribution.
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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 year ended December 31,
1994 was 1.83. 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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COMMERCIAL CREDIT COMPANY
SELECTED FINANCIAL DATA
(In millions of dollars)
Business Segment Data
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<TABLE><CAPTION>
Three months ended Year ended
December 31, December 31,
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1994 1993 1994 1993
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<S> <C> <C> <C> <C>
Revenues:
Consumer Finance $ 321.9 $ 297.2 $ 1,236.2 $ 1,190.6
Insurance Services 83.4 76.1 317.0 320.1
Corporate and Other 10.8 14.7 44.8 69.6
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$ 416.1 $ 388.0 $1,598.0 $ 1,580.3
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Income before cumulative effect
of changes in accounting principles:
Consumer Finance $ 60.7 $ 55.1 $ 225.6 $ 230.8
Insurance Services
(after minority interest of
$3.4; $3.6; $14.8; $22.5) 4.0 4.0 17.1 22.2
Corporate and Other (9.4) (1.4) (20.8) 3.9
Equity in income of The
Travelers Corporation -. 13.1 -. 34.9
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55.3 70.8 221.9 291.8
Cumulative effect of changes in
accounting principles -. -. -. (5.8)
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Net income $ 55.3 $ 70.8 $ 221.9 $ 286.0
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Consumer Finance Operations
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<CAPTION>
As of, and for, the As of, and for, the
three months ended year ended
December 31, December 31,
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1994 1993 1994 1993
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<S> <C> <C> <C> <C>
Net receivables
Real estate-secured loans $2,844.7 $2,705.8 $2,844.7 $2,705.8
Personal loans 2,874.7 2,495.2 2,874.7 2,495.2
Credit cards 712.5 697.1 712.5 697.1
Sales finance and other 453.5 443.7 453.5 443.7
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Consumer finance receivables,
net of unearned finance charges 6,885.4 6,341.8 6,885.4 6,341.8
Accrued interest receivable 42.3 41.3 42.3 41.3
Allowance for credit losses (181.9) (167.5) (181.9) (167.5)
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Consumer finance receivables, net $6,745.8 $6,215.6 $6,745.8 $6,215.6
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60+ days past due as % of
receivables 1.88% 2.21% 1.88% 2.21%
Charge-off rate 2.08% 2.25% 2.08% 2.36%
Average yield 15.62% 15.59% 15.41% 15.83%
Average net interest margin 9.01% 8.51% 8.76% 8.44%
Reserves as % of net receivables 2.64% 2.64% 2.64% 2.64%
</TABLE>
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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: January 18, 1995 COMMERCIAL CREDIT COMPANY
By /s/William T. Bozarth
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William T. Bozarth
Vice President
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