<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, 1998
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 incorporation (I.R.S. Employer
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 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
<TABLE>
<CAPTION>
Item 1. Financial Statements: Page No.
--------
<S> <C>
Condensed Consolidated Statement of Income (Unaudited) -
Three Months Ended March 31, 1998 and 1997 3
Condensed Consolidated Statement of Financial Position -
March 31, 1998 (Unaudited) and December 31, 1997 4
Condensed Consolidated Statement of Cash Flows (Unaudited) -
Three Months Ended March 31, 1998 and 1997 5
Notes to Condensed Consolidated Financial Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
</TABLE>
Part II - Other Information
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Item 6. Exhibits and Reports on Form 8-K 12
Exhibit Index 13
Signatures 14
</TABLE>
2
<PAGE>
Commercial Credit Company and Subsidiaries
Condensed Consolidated Statement of Income (Unaudited)
(In millions of dollars)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------
1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C>
Revenues
Finance related interest and other charges $406.8 $306.0
Insurance premiums 47.8 41.8
Net investment income 15.0 16.8
Other income 17.4 9.1
- --------------------------------------------------------------------------------
Total revenues 487.0 373.7
- --------------------------------------------------------------------------------
Expenses
Interest 166.8 125.3
Non-insurance compensation and benefits 47.2 37.7
Provision for consumer finance credit losses 87.1 71.6
Policyholder benefits and claims 16.4 14.3
Insurance underwriting, acquisition and operating 6.4 6.8
Other operating 78.6 53.4
- --------------------------------------------------------------------------------
Total expenses 402.5 309.1
- --------------------------------------------------------------------------------
Income before income taxes 84.5 64.6
Provision for income taxes 30.2 22.2
- --------------------------------------------------------------------------------
Net income $ 54.3 $ 42.4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
3
<PAGE>
Commercial Credit Company and Subsidiaries
Condensed Consolidated Statement of Financial Position
(In millions of dollars, except per share amounts)
<TABLE>
<CAPTION>
March 31, 1998 December 31, 1997
- --------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Assets
Cash and cash equivalents $ 18.3 $ 18.4
Investments:
Fixed maturities, primarily available for sale, at market value
(amortized cost - $948.5 and $910.7) 964.5 926.8
Equity securities, at market value (cost - $74.7 and $71.8) 77.2 74.4
Short-term and other 127.9 92.7
- --------------------------------------------------------------------------------------------------------------
Total investments 1,169.6 1,093.9
- --------------------------------------------------------------------------------------------------------------
Consumer finance receivables 11,475.4 11,137.0
Allowance for losses (331.4) (321.4)
- --------------------------------------------------------------------------------------------------------------
Net consumer finance receivables 11,144.0 10,815.6
Other receivables 194.9 384.5
Deferred policy acquisition costs 3.9 4.2
Cost of acquired businesses in excess of net assets 472.1 476.8
Other assets 297.8 265.3
- --------------------------------------------------------------------------------------------------------------
Total assets $13,300.6 $13,058.7
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Liabilities
Certificates of deposit $ 159.3 $ 57.3
Short-term borrowings 3,776.2 3,871.6
Long-term debt 6,400.0 6,300.0
- --------------------------------------------------------------------------------------------------------------
Total debt 10,335.5 10,228.9
Insurance policy and claims reserves 467.6 452.3
Accounts payable and other liabilities 588.7 523.1
- --------------------------------------------------------------------------------------------------------------
Total liabilities 11,391.8 11,204.3
- --------------------------------------------------------------------------------------------------------------
Stockholder's equity
Common stock ($.01 par value; authorized: 1,000 shares; issued: - -
1 share)
Additional paid-in capital 685.4 685.1
Retained earnings 1,211.8 1,157.5
Accumulated other changes in equity from nonowner sources 11.6 11.8
- --------------------------------------------------------------------------------------------------------------
Total stockholder's equity 1,908.8 1,854.4
- --------------------------------------------------------------------------------------------------------------
Total liabilities and stockholder's equity $ 13,300.6 $13,058.7
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
</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)
<TABLE>
<CAPTION>
Three months ended March 31, 1998 1997
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Net cash provided by (used in) operating activities $ 320.7 $ 148.8
- ----------------------------------------------------------------------------------------------
Cash Flows From Investing Activities
Net change in credit card receivables 4.8 (73.8)
Loans originated or purchased (1,386.5) (1,044.0)
Loans repaid or sold 1,018.3 665.8
Purchases of investments (103.3) (84.6)
Proceeds from sales of investments 28.0 66.7
Proceeds from maturities of investments 0.7 23.2
Other, net 10.4 7.6
- ----------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities (427.6) (439.1)
- ----------------------------------------------------------------------------------------------
Cash Flows From Financing Activities
Dividends paid - (25.0)
Issuance of long-term debt 300.0 -
Payments of long-term debt (200.0) (350.0)
Net change in short-term borrowings (95.3) 630.6
Net change in certificates of deposit 102.1 29.3
- ----------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 106.8 284.9
- ----------------------------------------------------------------------------------------------
Change in cash and cash equivalents (0.1) (5.4)
Cash and cash equivalents at beginning of period 18.4 11.4
- ----------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 18.3 $ 6.0
- ----------------------------------------------------------------------------------------------
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 154.8 $ 113.1
Cash (received) paid during the period for income taxes $ (17.0) $ 2.5
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
</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,
1998 and for the three-month period ended March 31, 1998 and 1997 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, 1997.
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.
Certain reclassifications have been made to the prior year's financial
statements to conform to the current year's presentation.
2. Changes in Accounting Principles and Accounting Standards not yet Adopted
-------------------------------------------------------------------------
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards (FAS) No. 130, "Reporting Comprehensive Income" (FAS No.
130). FAS No. 130 establishes standards for the reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements. All items that are required to be recognized under
accounting standards as components of comprehensive income are to be reported
in an annual financial statement that is displayed with the same prominence
as other financial statements. This statement stipulates that comprehensive
income reflect the change in equity of an enterprise during a period from
transactions and other events and circumstances from nonowner sources.
Comprehensive income will thus represent the sum of net income and other
changes in stockholder's equity from nonowner sources. The accumulated
balance of changes in equity from nonowner sources is required to be
displayed separately from retained earnings and additional paid-in capital
in the statement of financial position. The adoption of FAS No. 130 resulted
primarily in the Company reporting unrealized gains and losses on investments
in debt and equity securities held by the insurance subsidiaries in changes
in equity from nonowner sources. The Company's total changes in equity from
nonowner sources is as follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
(millions) 1998 1997
-------- --------
<S> <C> <C>
Net income $54.3 $42.4
Other changes in equity from nonowner sources (.2) (11.3)
-------- --------
Total changes in equity from nonowner sources $54.1 $31.1
-------- --------
-------- --------
</TABLE>
6
<PAGE>
Notes to Condensed Consolidated Financial Statements (continued)
In March 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants issued Statement of Position 98-1,
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use" (SOP 98-1). SOP 98-1 provides guidance on accounting for the
costs of computer software developed or obtained for internal use and for
determining when specific costs should be capitalized and when they should be
expensed. This SOP is effective for financial statements for fiscal years
beginning after December 15, 1998. Restatement of previously issued financial
statements is not allowed. The Company has not yet determined the impact that
SOP 98-1 will have on its consolidated financial statements or when it will
be implemented.
3. Consumer Finance Receivables
----------------------------
Consumer finance receivables, net of unearned finance charges of $723.0
million and $728.3 million at March 31, 1998 and December 31, 1997,
respectively, consisted of the following:
<TABLE>
<CAPTION>
(millions) March 31, 1998 December 31, 1997
---------------- -----------------
<S> <C> <C>
Real estate-secured loans $ 5,325.8 $ 5,107.6
Personal loans 3,960.5 3,922.2
Credit cards 1,225.4 1,164.6
Sales finance and other 874.8 857.0
---------------- -----------------
Consumer finance receivables,
net of unearned finance charges 11,386.5 11,051.4
Accrued interest receivable 88.9 85.6
Allowance for credit losses (331.4) (321.4)
---------------- -----------------
Net consumer finance receivables $11,144.0 $10,815.6
---------------- -----------------
---------------- -----------------
</TABLE>
In March 1998, Travelers Bank & Trust, fsb (formerly The Travelers Bank), a
subsidiary of the Company, and The Travelers Bank USA, also a subsidiary of
the Company, entered into a securitized transaction pursuant to which they
transferred approximately $356.5 million of their credit card receivables to
an affiliated special purpose corporation which transferred such receivables
to a trust. The trust sold to the public $227.5 million of securities
securitized by such receivables.
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, 1998 and
December 31, 1997, short-term borrowings consisted of commercial paper
totaling $3,776.2 million and $3,871.6 million, respectively. The Company may
borrow under its revolving credit facilities at various interest rate options
(LIBOR, CD, base rate or money market) 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 that expires in June
7
<PAGE>
Notes to Condensed Consolidated Financial Statements (continued)
2001. Currently, $450 million is allocated to the Company. At March 31,
1998, there were no borrowings outstanding under this facility.
The Company also has committed and available revolving credit facilities on
a stand-alone basis of $4.4 billion, of which $3.4 billion expires in 2002
and $1.0 billion expires in 1998.
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, 1998, the Company would have been
able to remit $621.8 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.
In July 1997 the Company issued, at a premium, $50 million of 15% coupon
debt securities yielding 5.62% due July 10, 1998. Concurrently, the Company
entered into a $50 million notional amount swap transaction with Smith Barney
Capital Services Inc., an affiliated company, to receive fixed and to pay
variable interest. The swap is accounted for as a hedge of the related
liability and the periodic receipts or payments are accrued as adjustments to
interest expense. This swap contract terminates on July 10, 1998.
8
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION and ANALYSIS of FINANCIAL CONDITION
and RESULTS of OPERATIONS
Consolidated Results of Operations
<TABLE>
<CAPTION>
Three Months Ended
(In millions) March 31,
- --------------------------------------------------------------------
1998 1997
- --------------------------------------------------------------------
<S> <C> <C>
Revenues $ 487.0 $ 373.7
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Net Income $ 54.3 $ 42.4
- --------------------------------------------------------------------
- --------------------------------------------------------------------
</TABLE>
Results of Operations
The consolidated net income of Commercial Credit Company and subsidiaries (the
Company) for the three months ended March 31, 1998 was $54.3 million compared to
$42.4 million in the corresponding 1997 period. Revenues for the quarter ended
March 31, 1998 were $487.0 million compared to $373.7 million in the
corresponding 1997 period.
On July 31, 1997, the Company acquired Security Pacific Financial Services
(Security Pacific) from BankAmerica Corporation for a purchase price of
approximately $1.6 billion. The purchase included approximately $1.2 billion
of net consumer finance receivables and approximately $70 million of other
net assets. The excess of the purchase price over the estimated fair value of
net assets was $380.2 million and is being amortized over 25 years. The
purchase price for the transaction was financed primarily by the Company, and
by an equity contribution by Travelers Group Inc. (TRV) of $520 million to
the Company.
The following discussion presents in more detail each segment's performance.
Segment Results for the Three Months Ended March 31, 1998 and 1997
------------------------------------------------------------------
Consumer Finance Services
<TABLE>
<CAPTION>
Three Months Ended March 31,
--------------------------------
(In millions) 1998 1997
- ------------------------------------------------------------------------------------
Revenues Net income Revenues Net income
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Consumer Finance Services $484.2 $59.2 $366.3 $47.0
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
</TABLE>
Earnings in the first quarter of 1998 were $59.2 million compared to $47.0
million in the first quarter of 1997. This segment's performance, in a
traditionally slow quarter, reflects the integration of Security Pacific into
the Commercial Credit branch system since July 1997, continued internal
receivables growth and an improved charge-off rate.
Net receivables owned reached a record $11.4 billion, up 35% from the prior year
period and up $335 million or 3% since year-end 1997. This excludes $255.1
million in credit card receivables securitized on March 6, 1998. Most of the
receivables growth was in real estate-secured loans, which reflects the strength
of this product among Primerica Financial Services (PFS) representatives. On a
managed
9
<PAGE>
basis, including securitized assets, receivables totaled $11.6 billion, an
increase of $404 million since year-end 1997.
During the first quarter of 1998 the average yield on owned receivables was
14.18%, down from 14.65% in the first quarter of 1997, reflecting the shift in
the portfolio mix toward lower-risk real estate loans which have lower margins.
At March 31, 1998, the owned portfolio consisted of 47% real estate-secured
loans, 35% personal loans, 11% credit cards and 7% sales finance and other.
Delinquencies in excess of 60 days on owned receivables were 2.33% at March 31,
1998, down slightly from 2.35% at year-end 1997, but up from 2.25% at March 31,
1997. The charge-off rate on owned receivables of 2.75% in the first quarter of
1998 was improved from the 2.95% rate in the first quarter of 1997. As expected,
it was up from the 2.42% rate in the fourth quarter of 1997, which contained a
short-term benefit from the transition of Security Pacific's portfolio to the
Company's charge-off policies. The charge-off rate is expected to return to
lower levels during the second half of 1998.
<TABLE>
<CAPTION>
As of, or for, the
Three Months Ended March 31,
-------------------------------------------
1998 1997
-------------------------------------------
<S> <C> <C>
Allowance for credit losses as % of
net outstandings 2.91% 2.97%
Charge-off rate for the period 2.75% 2.95%
60 + days past due on a contractual
basis as a % of gross consumer
finance receivables at quarter end 2.33% 2.25%
</TABLE>
Corporate and Other
<TABLE>
<CAPTION>
Three Months Ended March 31,
---------------------------------
(In millions) 1998 1997
- -----------------------------------------------------------------------------------------------
Net income Net income
Revenues (expense) Revenues (expense)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Corporate and Other $2.8 $(4.9) $7.4 $(4.6)
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
</TABLE>
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 (LIBOR, CD, base
rate or money market) 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.
10
<PAGE>
Currently, $450 million is allocated to the Company. In addition, the Company
has committed and available revolving credit facilities on a stand-alone basis
of $4.4 billion, of which $3.4 billion expires in 2002 and $1.0 billion expires
in 1998.
The Company has unused credit availability of $4.850 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, 1998, the Company would have been able to
remit $621.8 million to its parent under its most restrictive covenants.
Future Application of Accounting Standards
See Note 2 of Notes to Condensed Consolidated Financial Statements for a
discussion of recently issued accounting pronouncements.
Forward Looking Statements
Certain of the statements contained herein that are not historical facts are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act. The Company's actual results may differ materially from
those included in the forward-looking statements. Forward-looking statements are
typically identified by the words "believe," "expect," "anticipate," "intend,"
"estimate," and similar expressions. These forward-looking statements involve
risks and uncertainties including, but not limited to, the following: changes in
general economic conditions, including changes in the interest rate environment
and the level of personal bankruptcies.
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 January 7, 1998, the Company filed a Current Report on Form 8-K,
dated January 5, 1998, filing certain exhibits under Item 7 thereof
relating to the offer and sale of the Company's 6 1/4% Notes due
January 1, 2008.
On January 27, 1998, the Company filed a Current Report on Form 8-K,
dated January 26, 1998, reporting under Item 5 thereof the results of
its operations for the three months and year ended December 31, 1997.
No other reports on Form 8-K were filed during the first quarter of
1998; however, on April 17, 1998, the Company filed a Current Report on
Form 8-K, dated April 16, 1998, reporting under Item 5 thereof that
Travelers Group Inc. had entered into a definitive merger agreement
with Citicorp.
12
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
Number Description of Exhibit
- ------- -----------------------
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).
12.01+ Computation of Ratio of Earnings to Fixed Charges.
27.01+ Financial Data Schedule.
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.
- ---------------------------
+ Filed herewith.
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, 1998 By /s/ Barbara A. Yastine
----------------------------
Barbara A. Yastine
Executive Vice President
(Principal Financial Officer)
Date: May 13, 1998 By /s/ Irwin Ettinger
---------------------------
Irwin Ettinger
Executive Vice President
(Chief Accounting Officer)
14
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
Number Description of Exhibit
- ------- -----------------------
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).
12.01+ Computation of Ratio of Earnings to Fixed Charges.
27.01+ Financial Data Schedule.
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.
- ---------------------------
+ Filed herewith.
<PAGE>
Exhibit 12.01
Commercial Credit Company and Subsidiaries
Computation of Ratio of Earnings to Fixed Charges
(In millions of dollars, except for ratio)
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------
1998 1997
-------- -------
<S> <C> <C>
Income before income taxes $ 84.5 $ 64.6
Elimination of undistributed equity earnings (0.1) (0.2)
Interest 166.8 125.3
Portion of rentals deemed to be interest 2.8 2.3
-------- -------
Earnings available for fixed charges $ 254.0 $ 192.0
-------- -------
-------- -------
Fixed charges
Interest $ 166.8 $ 125.3
Portion of rentals deemed to be interest 2.8 2.3
-------- -------
Fixed charges $169.6 $ 127.6
-------- -------
-------- -------
Ratio of earnings to fixed charges 1.50x 1.50x
-------- -------
-------- -------
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCH
31, 1998 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-31-1998
<PERIOD-END> MAR-31-1998
<CASH> $18,300
<SECURITIES> 1,169,600<F1>
<RECEIVABLES> 11,670,300<F2>
<ALLOWANCES> (331,400)
<INVENTORY> 0<F3>
<CURRENT-ASSETS> 0<F3>
<PP&E> 0<F3>
<DEPRECIATION> 0<F3>
<TOTAL-ASSETS> 13,300,600
<CURRENT-LIABILITIES> 0<F3>
<BONDS> 10,335,500<F4>
0<F3>
0
<COMMON> 0
<OTHER-SE> 1,908,800<F5>
<TOTAL-LIABILITY-AND-EQUITY> 13,300,600
<SALES> 0<F3>
<TOTAL-REVENUES> 487,000
<CGS> 0<F3>
<TOTAL-COSTS> 402,500
<OTHER-EXPENSES> 0<F3>
<LOSS-PROVISION> 87,100<F6>
<INTEREST-EXPENSE> 166,800<F6>
<INCOME-PRETAX> 84,500
<INCOME-TAX> 30,200
<INCOME-CONTINUING> 54,300
<DISCONTINUED> 0<F3>
<EXTRAORDINARY> 0<F3>
<CHANGES> 0<F3>
<NET-INCOME> 54,300
<EPS-PRIMARY> 0<F3>
<EPS-DILUTED> 0<F3>
<FN>
<F1>(A)INCLUDES THE FOLLOWING ITEMS FROM THE FINANCIAL STATEMENTS: TOTAL
INVESTMENTS $1,169,600.
<F2>(B)INCLUDES THE FOLLOWING ITEMS FROM THE FINANCIAL STATEMENTS: CONSUMER FINANCE
RECEIVABLES $11,475,400 AND OTHER RECEIVABLES $194,900.
<F3>(C) ITEMS WHICH ARE INAPPLICABLE RELATIVE TO THE UNDERLYING FINANCIAL
STATEMENTS ARE INDICATED WITH ZERO AS REQUIRED.
<F4>(D) INCLUDES THE FOLLOWING ITEMS FROM THE FINANCIAL STATEMENTS: CERTIFICATES OF
DEPOSIT $159,300; SHORT-TERM BORROWINGS $3,776,200 AND LONG TERM DEBT
$6,400,000.
<F5>(E) INCLUDES THE FOLLOWING ITEMS FROM THE FINANCIAL STATEMENTS: ADDITIONAL
PAID-IN CAPITAL $685,400; RETAINED EARNINGS $1,211,800; ACCUMULATED OTHER
CHANGES IN EQUITY FROM NONOWNER SOURCES $11,600.
<F6>(F) INCLUDED IN TOTAL COSTS AND EXPENSES APPLICABLE TO SALES AND REVENUES
</FN>
</TABLE>
