<PAGE>
UNITED STATES
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 March 31, 1997
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)
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<S> <C>
Delaware 52-0883351
(State or other jurisdiction of incorporation (I.R.S. Employer Identification No.)
or organization)
</TABLE>
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 Travelers Group 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.
<PAGE>
Commercial Credit Company and Subsidiaries
TABLE OF CONTENTS
-----------------
Part I - Financial Information
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<CAPTION>
Item 1. Financial Statements: PAGE NO.
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Condensed Consolidated Statement of Income (Unaudited) --
Three Months Ended March 31, 1997 and 1996 3
Condensed Consolidated Statement of Financial Position --
March 31, 1997 (Unaudited) and December 31, 1996 4
Condensed Consolidated Statement of Cash Flows (Unaudited) --
Three Months Ended March 31, 1997 and 1996 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 1. Legal Proceedings 11
Item 6. Exhibits and Reports on Form 8-K 11
Exhibit Index 12
Signatures 14
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2
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Commercial Credit Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(In millions of dollars)
Three Months Ended
March 31,
------------------------
1997 1996
- ----------------------------------------------------------------------------
REVENUES
Finance related interest and other charges $306.0 $283.5
Insurance premiums 41.8 36.9
Net investment income 16.8 12.8
Other income 9.1 22.4
- ----------------------------------------------------------------------------
Total revenues 373.7 355.6
- ----------------------------------------------------------------------------
EXPENSES
Interest 125.3 116.1
Non-insurance compensation and benefits 50.9 45.7
Provision for consumer finance credit losses 71.6 67.8
Policyholder benefits and claims 14.3 8.4
Insurance underwriting, acquisition and operating 6.8 6.7
Other operating 40.2 36.7
- ----------------------------------------------------------------------------
Total expenses 309.1 281.4
- ----------------------------------------------------------------------------
Income before income taxes 64.6 74.2
Provision for income taxes (22.2) (25.8)
- ----------------------------------------------------------------------------
Net income $ 42.4 $ 48.4
============================================================================
See Notes to Condensed Consolidated Financial Statements.
3
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Commercial Credit Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(In millions of dollars, except per share amounts)
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<CAPTION>
March 31, 1997 December 31, 1996
- ----------------------------------------------------------------------------------------------------------------
ASSETS (Unaudited)
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Cash and cash equivalents $ 6.0 $ 11.4
Investments and real estate held for sale:
Fixed maturities, primarily available for sale, at market value
(amortized cost -- $825.7 and $816.8) 801.3 809.1
Equity securities, at market value (cost - $55.8 and $45.6) 55.9 46.4
Mortgage loans and real estate held for sale 141.6 139.8
Short-term and other 56.0 76.9
- -----------------------------------------------------------------------------------------------------------
Total investments and real estate held for sale 1,054.8 1,072.2
- -----------------------------------------------------------------------------------------------------------
Consumer finance receivables 8,498.3 8,123.8
Allowance for losses (250.9) (239.3)
- -----------------------------------------------------------------------------------------------------------
Net consumer finance receivables 8,247.4 7,884.5
Other receivables 118.2 123.0
Deferred policy acquisition costs 9.3 9.3
Cost of acquired businesses in excess of net assets 105.7 106.6
Other assets 177.1 152.6
- -----------------------------------------------------------------------------------------------------------
Total assets $9,718.5 $9,359.6
===========================================================================================================
LIABILITIES
Certificates of deposit $ 131.6 $ 102.3
Short-term borrowings 2,112.2 1,481.6
Long-term debt 5,400.0 5,750.0
- -----------------------------------------------------------------------------------------------------------
Total debt 7,643.8 7,333.9
Insurance policy and claims reserves 401.7 402.9
Accounts payable and other liabilities 392.3 348.3
- -----------------------------------------------------------------------------------------------------------
Total liabilities 8,437.8 8,085.1
- -----------------------------------------------------------------------------------------------------------
STOCKHOLDER'S EQUITY
Common stock ($.01 par value; authorized: 1,000 shares; issued: 1 share) -- --
Additional paid-in capital 164.2 164.1
Retained earnings 1,132.6 1,115.2
Unrealized gain (loss) on investments (15.8) (4.5)
Cumulative translation adjustments (.3) (.3)
- -----------------------------------------------------------------------------------------------------------
Total stockholder's equity 1,280.7 1,274.5
- -----------------------------------------------------------------------------------------------------------
Total liabilities and stockholder's equity $9,718.5 $9,359.6
===========================================================================================================
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
4
<PAGE>
Commercial Credit Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(In millions of dollars)
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<CAPTION>
THREE MONTHS ENDED MARCH 31, 1997 1996
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income taxes $ 64.6 $ 74.2
Adjustments to reconcile income before income taxes to
net cash provided by (used in) operating activities:
Amortization of deferred policy acquisition costs and value of insurance in force 0.1 2.3
Additions to deferred policy acquisition costs (0.1) (0.9)
Provision for consumer finance credit losses 71.6 67.8
Changes in:
Insurance policy and claims reserves (1.2) (13.6)
Other, net 16.3 70.1
- ------------------------------------------------------------------------------------------------------------------
Net cash provided by operations 151.3 199.9
Income taxes (paid) (2.5) (9.8)
- ------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 148.8 190.1
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CASH FLOWS FROM INVESTING ACTIVITIES
Net change in credit card receivables (73.8) (51.0)
Loans originated or purchased (1,044.0) (608.9)
Loans repaid or sold 665.8 599.0
Purchases of investments (84.6) (220.6)
Proceeds from sales of investments 66.7 1.5
Proceeds from maturities of investments 23.2 151.1
Business acquisition -- (11.7)
Other, net 7.6 18.7
- ------------------------------------------------------------------------------------------------------------------
Net cash (used in) investing activities (439.1) (121.9)
- ------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid (25.0) --
Issuance of long-term debt -- 400.0
Payments of long-term debt (350.0) (200.0)
Net change in short-term borrowings 630.6 (294.9)
Net change in certificates of deposit 29.3 9.6
- ------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 284.9 (85.3)
- ------------------------------------------------------------------------------------------------------------------
Change in cash and cash equivalents (5.4) (17.1)
Cash and cash equivalents at beginning of period 11.4 30.1
- ------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 6.0 $ 13.0
- ------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 113.1 $106.0
==================================================================================================================
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
5
<PAGE>
Commercial Credit Company and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
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 Travelers Group Inc.
(TRV). The condensed consolidated financial statements include the accounts
of the Company and its subsidiaries.
The accompanying condensed consolidated financial statements as of March
31, 1997 and for the three-month periods ended March 31, 1997 and 1996 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, 1996.
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.
2. CHANGES IN ACCOUNTING PRINCIPLES AND ACCOUNTING STANDARDS NOT YET ADOPTED
-------------------------------------------------------------------------
Effective January 1, 1997 the Company adopted Statement of Financial
Accounting Standards No. 125, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities" (FAS No. 125). This
Statement establishes accounting and reporting standards for transfers and
servicing of financial assets and extinguishments of liabilities. These
standards are based on an approach that focuses on control. Under this
approach, after a transfer of financial assets, an entity recognizes the
financial and servicing assets it controls and the liabilities it has
incurred, derecognizes financial assets when control has been surrendered,
and derecognizes liabilities when extinguished. FAS No. 125 provides
standards for distinguishing transfers of financial assets that are sales
from transfers that are secured borrowings. The requirements of FAS No. 125
are effective for transfers and servicing of financial assets and
extinguishments of liabilities occurring after December 31, 1996, and are
to be applied prospectively. However, in December 1996 the Financial
Accounting Standards Board (FASB) issued Statement of Financial Accounting
Standards No. 127, "Deferral of the Effective Date of Certain Provisions of
FASB Statement No. 125," which delays until January 1, 1998 the effective
date for certain provisions. Earlier or retroactive application is not
permitted. The adoption of the provisions of this statement effective
January 1, 1997 did not have a material impact on results of operations,
financial condition or liquidity and the Company is currently evaluating
the impact of the provisions whose effective date has been delayed until
January 1, 1998.
6
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Notes to Condensed Consolidated Financial Statements (continued)
3. CONSUMER FINANCE RECEIVABLES
----------------------------
Consumer finance receivables, net of unearned finance charges of $632.2
million and $635.3 million at March 31, 1997 and December 31, 1996,
respectively, consisted of the following:
(millions) March 31, 1997 December 31, 1996
---------------- -------------------
Real estate-secured loans $3,698.2 $3,456.7
Personal loans 3,257.2 3,199.6
Credit cards 972.2 907.1
Sales finance and other 519.0 507.7
---------- ----------
Consumer finance receivables,
net of unearned finance charges 8,446.6 8,071.1
Accrued interest receivable 51.7 52.7
Allowance for credit losses (250.9) (239.3)
---------- ----------
Net consumer finance receivables $8,247.4 $7,884.5
========== ==========
4. 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 March 31, 1997 and
December 31, 1996, short-term borrowings consisted of commercial paper
totaling $2,112.2 million and $1,481.6 million, respectively. The Company
may borrow under its revolving credit facilities at various interest rate
options and compensates the banks for the facilities through commitment
fees. TRV, the Company and The Travelers Insurance Company (TIC) have an
agreement with a syndicate of banks to provide $1.0 billion of revolving
credit, to be allocated to any of TRV, the Company or TIC. The revolving
credit facility consists of a five-year facility which expires in June
2001. Currently, $850 million is allocated to the Company. At March 31,
1997 there were no borrowings outstanding under this facility.
As of May 6, 1997 the Company also has a committed and available revolving
credit facility on a stand-alone basis of $2.4 billion which expires in May
2002.
The Company is limited by covenants in its revolving credit agreements as
to the amount of dividends and advances that may be made to its parent or
its affiliated companies. At March 31, 1997, the Company would have been
able to remit $314.6 million to its parent under its most restrictive
covenants.
5. RELATED PARTY TRANSACTIONS
--------------------------
To facilitate cash management the Company has entered into an agreement
with TRV under which the Company or TRV may borrow from the other party at
any time an amount up to the greater of $50.0 million or 1% of the
Company's consolidated assets up to a maximum of $100.0 million. 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
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Item 2. MANAGEMENT'S DISCUSSION and ANALYSIS of FINANCIAL CONDITION
and RESULTS of OPERATIONS
CONSOLIDATED RESULTS OF OPERATIONS
Three Months Ended
March 31,
----------------------
(In millions) 1997 1996
--------------------------------------------------------
Revenues $373.7 $355.6
========================================================
Net Income $ 42.4 $ 48.4
========================================================
RESULTS OF OPERATIONS
The consolidated net income of Commercial Credit Company and subsidiaries (the
Company) for the quarter ended March 31, 1997 was $42.4 million compared to
$48.4 million in the corresponding 1996 period. Revenues for the quarter ended
March 31, 1997 were $373.7 million compared to $355.6 million in the
corresponding 1996 period.
The following discussion presents in more detail each segment's performance.
SEGMENT RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
------------------------------------------------------------------
CONSUMER FINANCE SERVICES
Three Months Ended March 31,
----------------------------------------------------
(In millions) 1997 1996
- ------------------------------------------------------------------------------
Revenues Net income Revenues Net income
- ------------------------------------------------------------------------------
Consumer Finance Services $366.3 $47.0 $347.5 $55.5
==============================================================================
Earnings in the first quarter of 1997 were lower than the comparable period in
1996, as expected -- reflecting a higher provision for loan losses in the 1997
quarter and favorable insurance experience in the 1996 quarter.
Consumer finance receivables, net of unearned finance charges grew $375.5
million during the first quarter of 1997, which represents an annualized growth
rate of 19%. This growth occurred primarily in real estate loans generated
through the Company's 857 branch office network and through Primerica Financial
Services (PFS).
Total net receivables were a record $8.447 billion at March 31, 1997, a 16%
increase from the prior year. The average yield, at 14.65%, was lower than the
1996 quarter's yield of 15.43%, mainly because of a shift in the portfolio mix
toward lower-risk / lower margin real estate loans. Sales of real estate-secured
($.M.A.R.T.--SM) loans sold exclusively through PFS continued at record levels
during the quarter. Travelers Bank credit card outstandings were $972 million,
up from $907 million at year-end 1996, as a result of strong credit card
originations.
8
<PAGE>
Delinquencies in excess of 60 days were 2.25% as of March 31, 1997 -- lower
than the 2.38% at the end of 1996 and slightly higher than the 2.21% at the
end of the first quarter of 1996. The charge-off rate remained relatively flat
at 2.95%, compared to the 1996 fourth quarter, but was higher than the
comparable 1996 period's rate of 2.87%. This continues to reflect a high
level of personal bankruptcies throughout the credit industry. Reserves as a
percentage of net receivables remained at 2.97%, unchanged from year-end 1996
but up from 2.88% in the 1996 first quarter.
As of, or for, the
Three Months Ended March 31,
--------------------------------
1997 1996
--------------------------------
Allowance for credit losses as a %
of net outstandings 2.97% 2.88%
Charge-off rate 2.95% 2.87%
60 + days past due on a contractual
basis as a % of gross consumer
finance receivables at quarter end 2.25% 2.21%
CORPORATE AND OTHER
Three Months Ended March 31,
-------------------------------------------------------
(In millions) 1997 1996
- -------------------------------------------------------------------------------
Revenues Net income Revenues Net income
(expense) (expense)
- -------------------------------------------------------------------------------
Corporate and Other $7.4 $(4.6) $8.1 $(7.1)
===============================================================================
The favorable variance in Corporate and Other net expense for the first quarter
of 1997 compared to the first quarter of 1996 is primarily attributable to
increased earnings on a corporate investment and lower interest cost borne at
the corporate level.
9
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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. The Company may borrow under its
revolving credit facilities at various interest rate options and compensates the
banks for the facilities through commitment fees.
Travelers Group Inc. (TRV), the Company and The Travelers Insurance Company
(TIC) have an agreement with a syndicate of banks to provide $1.0 billion of
revolving credit, to be allocated to any of TRV, the Company or TIC. The
revolving credit facility consists of a five-year facility which expires in June
2001. Currently, $850 million is allocated to the Company. In addition, as of
May 6, 1997 the Company has a committed and available revolving credit facility
on a stand-alone basis of $2.4 billion that expires in May 2002.
As of May 6, 1997 the Company has unused credit availability of $3.250 billion
under the revolving credit facilities referred to above.
The Company is limited by covenants in its revolving credit agreements as to the
amount of dividends and advances that may be made to its parent or its
affiliated companies. At March 31, 1997, the Company would have been able to
remit $314.6 million to its parent under its most restrictive covenants.
The Company as of May 7, 1997, had $550 million available for debt offerings
and $400 million available for trust preferred security offerings under its
shelf registration statements.
FUTURE APPLICATION OF ACCOUNTING STANDARDS
Effective January 1, 1997 the Company adopted Statement of Financial Accounting
Standards No. 125, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities" (FAS No. 125). This Statement establishes
accounting and reporting standards for transfers and servicing of financial
assets and extinguishments of liabilities. These standards are based on an
approach that focuses on control. Under this approach, after a transfer of
financial assets, an entity recognizes the financial and servicing assets it
controls and the liabilities it has incurred, derecognizes financial assets when
control has been surrendered, and derecognizes liabilities when extinguished.
FAS No. 125 provides standards for distinguishing transfers of financial
assets that mare sales from transfers that are secured borrowings. The
requirements of FAS No. 125 are effective for transfers and servicing of
financial assets and extinguishments of liabilities occurring after
December 31, 1996, and are to be applied prospectively. However, in December
1996 the Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards No. 127, "Deferral of the Effective Date of
Certain Provisions of FASB Statement No. 125," which delays until January 1,
1998 the effective date for certain provisions. Earlier or retroactive
application is not permitted. The adoption of the provisions of this statement
effective January 1, 1997 did not have a material impact on results of
operations, financial condition or liquidity and the Company is currently
evaluating the impact of the provisions whose effective date has been delayed
until January 1, 1998.
10
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
For information concerning purported class action lawsuits filed
against the Company and certain subsidiaries alleging, inter alia, that such
subsidiaries charged excessive premiums on certain lines of insurance, see the
descriptions that appear in the second paragraph on page 2 of the Company's
Current Report on Form 8-K dated July 13, 1994, the first paragraph on page 14
of the Company's Quarterly Report on Form 10-Q for the quarter ended September
30, 1995, the fourth paragraph on page 9 of the Company's Annual Report on Form
10-K for the year ended December 31, 1995, the first paragraph on page 13 of the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996, the
first paragraph on page 12 of the Company's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1996 and the fourth paragraph on page 9 of the
Company's Annual Report on Form 10-K for the year ended December 31, 1996, which
descriptions are incorporated by reference herein. A copy of the pertinent
paragraphs of such filings is included as an exhibit to this Form 10-Q. In March
1997, a class was preliminarily certified in an action filed in the Circuit
Court of Calhoun County, Alabama entitled Hughes v. Commercial Credit
---------------------------
Corporation. Plaintiffs have made allegations, and are seeking damages, similar
- -----------
to those in Lawrence and McMahon.
-------- -------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
See Exhibit Index.
(b) Reports on Form 8-K:
On January 21, 1997, the Company filed a Current Report
on Form 8-K, dated January 21, 1997, reporting under Item 5 thereof the results
of its operations for the three months and twelve months ended December 31,
1996.
No other reports on Form 8-K have been filed by the
Company during the quarter ended March 31, 1997; however, on April 14, 1997, the
Company filed a Current Report on Form 8-K, dated April 14, 1997, reporting
under Item 5 thereof the results of its operations for the three months ended
March 31, 1997, and certain other selected financial data.
11
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EXHIBIT INDEX
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EXHIBIT FILING
NUMBER DESCRIPTION OF EXHIBIT METHOD
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3.01 Restated Certificate of Incorporation of Commercial Credit Company (the
"Company"), included in Certificate of Merger of CCC Merger Company
into the Company; Certificate of Ownership and Merger merging CCCH
Acquisition Corporation into the Company; and Certificate of Ownership and
Merger merging RDI Service Corporation into the Company, incorporated by
reference to Exhibit 3.01 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1992 (File No. 1-6594).
3.02 By-Laws of the Company, as amended May 14, 1990, incorporated by
reference to Exhibit 3.02.2 to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1990 (File No. 1-6594).
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).
10.01.1 Five-Year Credit Agreement dated as of December 16, 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, 1994 (File No. 1-6594).
10.01.2 Amended and Restated Credit Agreement dated as of June 28, 1996
among the Company, the Banks party thereto and Morgan Guaranty
Trust Company of New York, as Agent, incorporated by reference
to Exhibit 10.02 to the Company's Quarterly Report on Form 10-Q
for the fiscal quarter ended June 30, 1996 (File No. 1-6594).
10.01.3 Amended and Restated Credit Agreement dated as of May 6, 1997 Electronic
among the Company, the Banks party thereto and
Morgan Guaranty Trust Company of New York, as Agent.
12.01 Computation of Ratio of Earnings to Fixed Charges. Electronic
</TABLE>
12
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<TABLE>
<S> <C> <C>
27.01 Financial Data Schedule. Electronic
99.01 The second paragraph on page 2 of the Company's Current Report on Form Electronic
8-K dated July 13, 1994, the first paragraph on page 14 of the
Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1995, the fourth paragraph on page 9 of the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, the first paragraph on page 13 of the
Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 1996, the first paragraph on page 12 of the
Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1996 and the fourth paragraph on page 9 of
the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996.
</TABLE>
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.
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: May 13, 1997 By /s/ William R. Hofmann
------------------------
William R. Hofmann
Vice President
(Principal Financial Officer)
Date: May 13, 1997 By /s/ Irwin Ettinger
--------------------------
Irwin Ettinger
Executive Vice President
(Chief Accounting Officer)
14
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
EXHIBIT FILING
NUMBER DESCRIPTION OF EXHIBIT METHOD
- ------- ---------------------- ------
<S> <C> <C>
3.01 Restated Certificate of Incorporation of Commercial Credit Company (the
"Company"), included in Certificate of Merger of CCC Merger Company
into the Company; Certificate of Ownership and Merger merging CCCH
Acquisition Corporation into the Company; and Certificate of Ownership and
Merger merging RDI Service Corporation into the Company, incorporated by
reference to Exhibit 3.01 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1992 (File No. 1-6594).
3.02 By-Laws of the Company, as amended May 14, 1990, incorporated by
reference to Exhibit 3.02.2 to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1990 (File No. 1-6594).
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).
10.01.1 Five-Year Credit Agreement dated as of December 16, 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, 1994 (File No. 1-6594).
10.01.2 Amended and Restated Credit Agreement dated as of June 28, 1996
among the Company, the Banks party thereto and Morgan Guaranty
Trust Company of New York, as Agent, incorporated by reference
to Exhibit 10.02 to the Company's Quarterly Report on Form 10-Q
for the fiscal quarter ended June 30, 1996 (File No. 1-6594).
10.01.3 Amended and Restated Credit Agreement dated as of May 6, 1997 Electronic
among the Company, the Banks party thereto and
Morgan Guaranty Trust Company of New York, as Agent.
12.01 Computation of Ratio of Earnings to Fixed Charges. Electronic
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
27.01 Financial Data Schedule. Electronic
99.01 The second paragraph on page 2 of the Company's Current Report on Form Electronic
8-K dated July 13, 1994, the first paragraph on page 14 of the
Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1995, the fourth paragraph on page 9 of the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, the first paragraph on page 13 of the
Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 1996, the first paragraph on page 12 of the
Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1996 and the fourth paragraph on page 9 of
the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996.
</TABLE>
<PAGE>
Exhibit 10.01.3
EXECUTION COPY
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 6, 1997 among
COMMERCIAL CREDIT COMPANY (the "Borrower"), the BANKS listed on the signature
pages hereof (the "Banks") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
Agent (the "Agent").
W I T N E S S E T H :
WHEREAS, certain of the parties hereto have heretofore entered into
that certain Five-Year Credit Agreement dated as of December 16, 1994, as
amended and restated as of June 28, 1996 (the "Agreement"); and
WHEREAS, the parties hereto desire to amend such Agreement as set
forth herein and to restate the Agreement in its entirety to read as set forth
in the Agreement with the amendments specified below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically
-----------------------
defined herein, each term used herein which is defined in the Agreement shall
have the meaning assigned to such term in the Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Agreement shall from and after the date hereof refer to the
Agreement as amended and restated hereby. The term "Notes" defined in the
Agreement shall include from and after the date hereof the New Notes (as defined
below).
SECTION 2. Amendment of Termination Date. The definition of
------------------------------
"Termination Date" in Section 1.01 of the Agreement is amended to read in its
entirety as follows:
<PAGE>
"Termination Date" means May 6, 2002, or, if such day is not a
Euro-Dollar Business Day, the next succeeding Euro-Dollar Business Day unless
such Euro-Dollar Business Day falls in another calendar month, in which case the
Termination Date shall be the next preceding Euro-Dollar Business Day.
SECTION 3. Increase in Commitments. The aggregate amount of the
------------------------
Commitments is increased to $2,400,000,000. With effect from and including the
date this Amendment and Restatement becomes effective in accordance with Section
7 hereof, (i) each Person listed on the signature pages hereof which is not a
party to the Agreement (a "New Bank") shall become a Bank party to the Agreement
and (ii) the Commitment of each Bank shall be the amount set forth opposite the
name of such Bank on the signature pages hereof. Any Bank whose Commitment is
changed to zero shall upon such effectiveness cease to be a Bank party to the
Agreement, and all accrued fees and other amounts payable under the Agreement
for the account of such Bank shall be due and payable on such date; provided
--------
that the provisions of Sections 8.03 and 9.03 of the Agreement shall continue to
inure to the benefit of each such Bank.
SECTION 4. Representations and Warranties. The Borrower hereby
-------------------------------
represents and warrants that as of the date hereof and after giving effect
hereto:
(a) no Default has occurred and is continuing;
(b) each representation and warranty of the Borrower set forth in the
Agreement is true and correct as though made on and as of this date; and
(c) since December 31, 1996 there has been no material adverse change
in the business, financial position or result of operations of the Borrower and
its Consolidated Subsidiaries, considered as a whole.
SECTION 5. Amendment of Pricing Schedule. The Pricing Schedule is
------------------------------
amended to read in its entirety as set forth in Exhibit I to this Amendment and
Restatement.
SECTION 6. Governing Law. This Amendment and Restatement shall be
--------------
governed by and construed in accordance with the laws of the State of New York.
2
<PAGE>
SECTION 7. Counterparts; Effectiveness. This Amendment and
----------------------------
Restatement may be signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Amendment and Restatement shall become effective
as of the date when (i) the Agent shall have received duly executed counterparts
hereof signed by each of the parties hereto (or, in the case of any party as to
which an executed counterpart shall not have been received, the Agent shall have
received telegraphic, telex or other written confirmation from such party of
execution of a counterpart hereof by such party); (ii) the Agent shall have
received a duly executed Note for each of the New Banks (a "New Note"), dated on
or before the date of effectiveness hereof and otherwise in compliance with
Section 2.05 of the Agreement; (iii) the Agent shall have received an opinion of
the General Counsel of the Borrower, substantially in the form of Exhibit E to
the Agreement with reference to the New Notes, this Amendment and Restatement
and the Agreement as amended and restated hereby; and (iv) the Agent shall have
received all documents it may reasonably request relating to the existence of
the Borrower, the corporate authority for and the validity of the Agreement as
amended and restated hereby, the New Notes and any other matters relevant
hereto, all in form and substance satisfactory to the Agent.
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Agreement to be duly executed by their respective authorized officers
as of the day and year first above written.
COMMERCIAL CREDIT COMPANY
By: /s/ Robert Natza
------------------------------
Title: Treasurer
By: /s/ Daniel E. Rubenstein
------------------------------
Title: Assistant Vice President
3
<PAGE>
Commitments
$100,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ Jerry J. Fall
-----------------------------
Title: Vice President
$70,000,000 BANK OF AMERICA ILLINOIS
By: /s/ Elizabeth W.F. Bishop
-----------------------------
Title: Vice President
$70,000,000 BANK OF MONTREAL
By: /s/ Jack Darrow
-----------------------------
Title: Director
$70,000,000 THE BANK OF NEW YORK
By: /s/ Michael E. Murray
-----------------------------
Title: Assistant Vice President
$70,000,000 THE BANK OF NOVA SCOTIA
By: /s/ Todd Meller
-----------------------------
Title: Senior Relationship
Manager
4
<PAGE>
$70,000,000 BANK OF TOKYO-MITSUBISHI TRUST
COMPANY
By: /s/ J. Beckwith
-----------------------------
Title: Vice President
$70,000,000 BANKBOSTON N.A.
By: /s/ Paul G. Black, Jr.
-----------------------------
Title: Vice President
$70,000,000 THE CHASE MANHATTAN BANK
By: /s/ Christine M. Herrick
-----------------------------
Title: Vice President
$70,000,000 CIBC, INC.
By: /s/ Glenn Pittson
-----------------------------
Title: Managing Director
$70,000,000 CITIBANK, N.A.
By: /s/ David A. Dodge
-----------------------------
Title: Managing Director
Attorney-in-Fact
5
<PAGE>
$70,000,000 CORESTATES BANK, N.A.
By: /s/ Kathleen M. Petrelli
-----------------------------
Title: Vice President
$70,000,000 DEUTSCHE BANK AG
NEW YORK AND/OR CAYMAN
ISLANDS BRANCHES
By: /s/ Dale F. Oberst
-----------------------------
Title: Associate
By: /s/ Eckhard Osenberg
-----------------------------
Title: Vice President
$70,000,000 THE FIRST NATIONAL BANK OF
CHICAGO
By: /s/ Samuel W. Bridges
-----------------------------
Title: First Vice President
$70,000,000 FLEET NATIONAL BANK
By: /s/ Kenneth G. Ahrens
-----------------------------
Title: Vice President
$70,000,000 MELLON BANK, N.A.
By: /s/ Henry J. Voorhees
-----------------------------
Title: First Vice President
6
<PAGE>
$70,000,000 NATIONSBANK OF TEXAS,N.A.
By: /s/ Betty E. Reed
-----------------------------
Title: Senior Vice President
$70,000,000 ROYAL BANK OF CANADA
By: /s/ Michelle F. Rutigliano
-----------------------------
Title: Manager
$70,000,000 THE SAKURA BANK, LIMITED
By: /s/ Yasumasa Kikuchi
-----------------------------
Title: Senior Vice President
$70,000,000 UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By: /s/ Jenni M. Capellen
-----------------------------
Title: Assistant Treasurer
By: /s/ Virginia M. Loebel
-----------------------------
Title: Managing Director
$70,000,000 WELLS FARGO BANK, N.A.
By: /s/ David B. Hollingsworth
-----------------------------
Title: Vice President
By: /s/ Kathleen Barnes
-----------------------------
Title: Vice President
7
<PAGE>
$50,000,000 BANQUE NATIONALE DE PARIS
By: /s/ Phil Truesdale
-----------------------------
Title: Vice President
By: /s/ Veronique Marcus
-----------------------------
Title: Assistant Vice President
$50,000,000 THE FIRST NATIONAL BANK OF
MARYLAND
By: /s/ Carol A. Dalton
-----------------------------
Title: Vice President
$50,000,000 FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By: /s/ Gail M. Golightly
-----------------------------
Title: Senior Vice President
$50,000,000 NATIONAL AUSTRALIA BANK, NEW
YORK BRANCH
By: /s/ Tom Kilfoyle
-----------------------------
Title: Vice President
$40,000,000 BANK OF HAWAII
By: /s/ Joseph T. Donalson
-----------------------------
Title: Vice President
8
<PAGE>
$40,000,000 CREDIT SUISSE FIRST BOSTON
By: /s/ Jay Chall
-----------------------------
Title: Director
By: /s/ Andrea Shkane
-----------------------------
Title: Vice President
$40,000,000 FIRST HAWAIIAN BANK
By: /s/ Scott R. Nahme
-----------------------------
Title: Assistant Vice President
$40,000,000 KEYBANK, NATIONAL ASSOCIATION
By: /s/ Karen A. Lee
-----------------------------
Title: Vice President
$40,000,000 THE NORTHERN TRUST COMPANY
By: /s/ Thomas E. Bernhardt
-----------------------------
Title: Vice President
$40,000,000 PNC BANK, NATIONAL ASSOCIATION
By: /s/ Philip C. Jackson
-----------------------------
Title: Senior Vice President
9
<PAGE>
$40,000,000 TORONTO DOMINION (NEW YORK), INC.
By: /s/ Jorge Garcia
-----------------------------
Title: Vice President
$40,000,000 UNITED STATES NATIONAL BANK OF
OREGON
By: /s/ Fiza Noordin
-----------------------------
Title: Assistant Vice
President
$35,000,000 ABN AMRO BANK N.V., NEW YORK
BRANCH
By: /s/ Bruce D. Ballentine
-----------------------------
Title: Vice President
By: /s/ David W. Eastep
-----------------------------
Title: Assistant Vice
President
$35,000,000 BANCA MONTE DEI PASCHI DI
SIENA S.P.A.
By: /s/ Serge M. Sondak
-----------------------------
Title: First Vice President
& Deputy General
Manager
By: /s/ Brian R. Landy
-----------------------------
Title: Vice President
$35,000,000 CREDIT LYONNAIS NEW YORK
BRANCH
By: /s/ Sebastian Rocco
-----------------------------
Title: First Vice
President
10
<PAGE>
$35,000,000 THE DAI-ICHI KANGYO BANK,
LTD., NEW YORK BRANCH
By: /s/ Masayoshi Komaki
-----------------------------
Title: Assistant Vice
President
$35,000,000 THE SUMITOMO BANK, LIMITED
By: /s/ John C. Kissinger
-----------------------------
Title: Joint General Manager
$25,000,000 AMSOUTH BANK OF ALABAMA
By: /s/ John J. Hooker IV
-----------------------------
Title: Commercial Banking
Officer
$25,000,000 BANCA POPOLARE DI MILANO
By: /s/ Fulvio Montanari
-----------------------------
Title: First Vice
President
By: /s/ Esperanza Quintero
-----------------------------
Title: Vice President
$25,000,000 BARNETT BANK, N.A.
By: /s/ Diane L. McLaughlin
-----------------------------
Title: Senior Vice
President
11
<PAGE>
$25,000,000 THE HUNTINGTON NATIONAL BANK
By: /s/ Leigh S. Connors
-----------------------------
Title: Vice President
$25,000,000 THE INDUSTRIAL BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By: /s/ Masahiro Ito
-----------------------------
Title: Senior Vice President
$25,000,000 ISTITUTO BANCARIO SAN PAOLO DI
TORINA S.P.A.
By: /s/ Wendell H. Jones
-----------------------------
Title: Vice President
By: /s/ Robert S. Wurster
-----------------------------
Title: First Vice President
$25,000,000 MERCANTILE SAFE DEPOSIT &
TRUST COMPANY
By: /s/ Nicholas C. Richardson
-----------------------------
Title: Assistant Vice
President
$25,000,000 NATIONAL CITY BANK OF COLUMBUS
By: /s/ Teresa M. Halsell
-----------------------------
Title: Assistant Vice
President
12
<PAGE>
$25,000,000 THE SANWA BANK, LIMITED
NEW YORK BRANCH
By: /s/ Jean-Michel Fatovic
-----------------------------
Title: Vice President
$25,000,000 WACHOVIA BANK OF GEORGIA, N.A.
By: /s/ Fitzhugh L. Wickham, III
-----------------------------
Title: Vice President
$25,000,000 WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK
BRANCH
By: /s/ Cynthia M. Niesen
-----------------------------
Title: Managing Director
By: /s/ Patricia Griffin
-----------------------------
Title: Associate
$0 THE FUJI BANK, LIMITED, NEW
YORK BRANCH
By: /s/ Toshiaki Yakura
-----------------------------
Title: Senior Vice President
$0 NATIONSBANK OF NORTH CAROLINA,
N.A.
By: /s/ Betty E. Reid
-----------------------------
Title: Senior Vice President
13
<PAGE>
$0 SOCIETE GENERALE
By: /s/ Charles D. Fischer, Jr.
-----------------------------
Title: Vice President
$0 THE TOKAI BANK, LIMITED
By: /s/ Stuart M. Schulman
-----------------------------
Title: Deputy General Manager
$0 THE YASUDA TRUST & BANKING
CO., LTD.
By: /s/ Rohn M. Laudenschlager
-----------------------------
Title: Senior VicePresident
14
<PAGE>
- ---------------------
Total Commitments
$2,400,000,000
- ---------------------
- ---------------------
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By: /s/ Jerry J. Fall
-----------------------------
Title: Vice President
15
<PAGE>
Exhibit 12.01
Commercial Credit Company and Subsidiaries
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In millions of dollars, except for ratio)
Three months ended March 31,
----------------------------
1997 1996
------------ ------------
Income before income taxes $ 64.6 $ 74.2
Elimination of undistributed equity earnings (0.2) -
Interest 125.3 116.1
Portion of rentals deemed to be interest 2.3 2.3
------------ ------------
Earnings available for fixed charges $192.0 $192.6
============ ============
Fixed charges
- -------------
Interest $125.3 $116.1
Portion of rentals deemed to be interest 2.3 2.3
------------ ------------
Fixed charges $127.6 $118.4
============ ============
Ratio of earnings to fixed charges 1.50x 1.63x
============ ============
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCH
31, 1997 CONDENSED CONSOLIDATED 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 6,000
<SECURITIES> 1,054,800 <F1>
<RECEIVABLES> 8,616,500 <F2>
<ALLOWANCES> (250,900)
<INVENTORY> 0 <F3>
<CURRENT-ASSETS> 0 <F3>
<PP&E> 0 <F3>
<DEPRECIATION> 0 <F3>
<TOTAL-ASSETS> 9,718,500
<CURRENT-LIABILITIES> 0 <F3>
<BONDS> 7,643,800 <F4>
0 <F3>
0
<COMMON> 0
<OTHER-SE> 1,280,700 <F5>
<TOTAL-LIABILITY-AND-EQUITY> 9,718,500
<SALES> 0 <F3>
<TOTAL-REVENUES> 373,700
<CGS> 0 <F3>
<TOTAL-COSTS> 309,100
<OTHER-EXPENSES> 0 <F3>
<LOSS-PROVISION> 71,600 <F6>
<INTEREST-EXPENSE> 125,300 <F6>
<INCOME-PRETAX> 64,600
<INCOME-TAX> 22,200
<INCOME-CONTINUING> 42,400
<DISCONTINUED> 0 <F3>
<EXTRAORDINARY> 0 <F3>
<CHANGES> 0 <F3>
<NET-INCOME> 42,400
<EPS-PRIMARY> 0 <F3>
<EPS-DILUTED> 0 <F3>
<FN>
<F1> Includes the following items from the financial statements: total
investments $1,054,800.
<F2> Includes the following items from the financial statements: consumer
finance receivables $8,498,300 and other receivables $118,200.
<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 $131,600; short-term borrowings $2,112,200 and long-term debt
$5,400,000.
<F5> Includes the following items from the financial statements: additional
paid-in capital $164,200; retained earnings $1,132,600; unrealized gain
(loss) on investments $(15,800); and cumulative translation adjustment
$(300).
<F6> Included in total costs and expenses applicable to sales and revenues.
</FN>
</TABLE>
<PAGE>
Exhibit 99.01
Company's Form 8-K
July 13, 1994
Page 2
Item 5. Other Events
------------
In May and June 1994, three purported class action lawsuits were filed against
the Company and its subsidiaries Commercial Credit Corporation, Voyager Guaranty
Insurance Company and American Health and Life Insurance Company. Two of such
actions, Erkins v. First Franklin Financial Corp., et al. and Lawrence v.
------------------------------------------------ -----------
Commercial Credit Corp., et al., were filed in the Circuit Court, Jefferson
- -------------------------------
County, Alabama. The third action, Princess Nobels v. Associates Corporation of
--------------------------------------------
North America, was filed in the U.S. District Court for the Middle District of
- -------------
Alabama. The suits allege, among other things, that the Company's subsidiaries
charged excessive premiums on credit life insurance, credit property insurance
and nonfiling insurance, and that as a result, the Company and its subsidiaries
violated various federal and state laws and regulations. The plaintiffs seek,
among other things, compensatory and punitive damages in an unspecified amount.
The Company believes it has meritorious defenses to these actions and intends to
contest the allegations.
<PAGE>
Company's Form 10-Q
September 30, 1995
Page 14
Item 1. Legal Proceedings.
For information concerning certain purported class action lawsuits filed
against the Company and certain of its subsidiaries in May and June 1994, see
the description that appears in the second paragraph of page 2 of the Company's
filing on Form 8-K dated July 13, 1994, which description is incorporated by
reference herein. A copy of the pertinent paragraph of such filing is included
as an exhibit to this Form 10-Q. The Lawrence case was stayed pending a decision
--------
by the Supreme Court of Alabama in a case raising similar issues regarding
credit life insurance. In October, 1995 the Supreme Court of Alabama reversed
the dismissal of that case and, as such, the Company anticipates that the stay
will be lifted. The Erkins case was dismissed without prejudice in March 1995,
------
and claims relating only to nonfiling insurance have been restated in an amended
complaint filed in March 1995 in the Nobels action. On September 22, 1995, an
------
additional purported class action lawsuit was filed against subsidiaries of the
Company in Alabama. The case, entitled Royster v. Commercial Credit Corporation
----------------------------------------
and American Health and Life Insurance Company, was filed in the Circuit Court
- ----------------------------------------------
for Walker County on behalf of borrowers who purchased credit life insurance in
connection with installment purchase contracts and other personal loans.
Plaintiffs, who seek unspecified compensatory and punitive damages, declaratory
relief, voiding excess premium charges, and injuctive relief, assert claims for
breach of contract, fraud, outrage and unconscionability. The Company believes
it has meritorious defenses and intends to contest the allegations.
<PAGE>
Company's Form 10-K
December 31, 1995
Page 9
Item 3. LEGAL PROCEEDINGS
For information concerning certain purported class action lawsuits filed
against the Company and certain of its subsidiaries in May and June 1994 and in
September 1995, see the descriptions that appear in the second paragraph of page
2 of the Company's filing on Form 8-K dated July 13, 1994, and the first
paragraph of page 14 of the Company's filing on Form 10-Q for the third quarter
ended September 30, 1995, which descriptions are incorporated by reference
herein. A copy of the pertinent paragraphs of such filings is included as an
exhibit to this Form 10-K. In October 1995 and February 1996, two additional
purported class actions, entitled McCurdy v. American General Finance and
-----------------------------------
McMahon v. Commercial Credit Corporation, were filed in the U.S. District Court
- ----------------------------------------
for the Middle District of Alabama and the Circuit Court for Shelby County,
Alabama, respectively, on behalf of borrowers who purchased credit life and/or
credit property insurance from subsidiaries of the Company, among others, with
allegations similar to those in the earlier cases referred to above. Plaintiffs
seek unspecified compensatory and punitive damages, among other things. The
Company believes it has meritorious defenses to these actions and intends to
contest the allegations.
<PAGE>
Company's Form 10-Q
June 30, 1996
Page 13
ITEM 1. Legal Proceedings.
For information concerning purported class action lawsuits filed against
the Company and certain of its subsidiaries alleging, inter alia, that such
subsidiaries charged excessive premiums on nonfiling insurance, see the
descriptions that appear in the second paragraph of page 2 of the Company's
filing on Form 8-K dated July 13, 1994, and the first paragraph of page 14 of
the Company's filing on Form 10-Q for the third quarter ended September 30,
1995, which descriptions are incorporated by reference herein. A copy of the
pertinent paragraphs of such filings is included as an exhibit to this Form
10-Q. In the Nobels case, a class of plaintiffs residing in Alabama was
------
certified in April 1996 for certain of the claims and class certification was
denied for certain other claims. In May 1996, an additional purported class
action, entitled Keckler v. Commercial Credit Corporation, was filed in the U.S.
----------------------------------------
District Court for the Northern District of Florida with allegations similar to
those in the Nobels case. The plaintiffs seek, among other things, compensatory
------
and punitive damages in an unspecified amount. The Company believes it has
meritorious defenses to this action and intends to contest the allegations.
<PAGE>
Company's Form 10-Q
September 30, 1996
Page 12
Item 1. Legal Proceedings.
For information concerning purported class action lawsuits filed
against the Company and certain of its subsidiaries alleging, inter alia, that
such subsidiaries charged excessive premiums on nonfiling insurance, see the
descriptions that appear in the second paragraph on page 2 of the Company's
Current Report on Form 8-K, dated July 13, 1994, the first paragraph on page 14
of the Company's Quarterly Report on Form 10-Q for the quarter ended September
30, 1995, the fourth paragraph on page 9 of the Company's Annual Report on Form
10-K for the year ended December 31, 1995 and the first paragraph on page 13 of
the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996,
which descriptions are incorporated by reference herein. A copy of the pertinent
paragraphs of such filings is included as an exhibit to this Form 10-Q. In
Keckler v. Commercial Credit Corporation, defendant's motion to dismiss was
- ----------------------------------------
granted in part and denied in part. In October 1996, an additional purported
class action was filed in the Circuit Court of Perry County, Alabama, entitled
Washington v. Commercial Credit Corporation, et al., with allegations, and
- ---------------------------------------------------
seeking damages, similar to those in the earlier cases referred to above. The
Company believes it has meritorious defenses to this action and intends to
contest the allegations.
<PAGE>
Company's Form 10-K
December 31, 1996
Page 9
ITEM 3. LEGAL PROCEEDINGS.
For information concerning purported class action lawsuits filed against
the Company and certain of its subsidiaries alleging, inter alia, that such
subsidiaries charged excessive premiums on certain lines of insurance, see the
descriptions that appear in the second paragraph on page 2 of the Company's
Current Report on Form 8-K dated July 13, 1994, the first paragraph on page 14
of the Company's Quarterly Report on Form 10-Q for the quarter ended September
30, 1995, the fourth paragraph on page 9 of the Company's Annual Report on Form
10-K for the year ended December 31, 1995, the first paragraph on page 13 of the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996 and
the first paragraph on page 12 of the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1996, which descriptions are incorporated by
reference herein. A copy of the pertinent paragraphs of such filings is included
as an exhibit to this Form 10-K. In December 1996, an additional purported class
action was filed in the Circuit Court of Walker County, Alabama, entitled Smith
-----
v. Commercial Credit Corporation et al., with allegations, and seeking damages,
- ---------------------------------------
similar to those in Lawrence and McMahon.
--------- -------
