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 June 30, 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 (I.R.S. Employer
incorporation or organization) Identification No.)
300 St. Paul Place, Baltimore, Maryland 21202
(Address of principal executive offices) (Zip Code)
(410) 332-3000
(Registrant's telephone number, including area code)
----------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |x| No |_|
The registrant is an indirect wholly owned subsidiary of 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.
1
<PAGE>
Commercial Credit Company and Subsidiaries
TABLE OF CONTENTS
Part I - Financial Information
Item 1. Financial Statements: Page No.
--------
Condensed Consolidated Statement of Income (Unaudited) -
Three and Six Months Ended June 30, 1998 and 1997 3
Condensed Consolidated Statement of Financial Position -
June 30, 1998 (Unaudited) and December 31, 1997 4
Condensed Consolidated Statement of Cash Flows (Unaudited) -
Six Months Ended June 30, 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
Part II - Other Information
Item 1. Legal Proceedings 12
Item 6. Exhibits and Reports on Form 8-K 12
Exhibit Index 13
Signatures 14
2
<PAGE>
Commercial Credit Company and Subsidiaries
Condensed Consolidated Statement of Income (Unaudited)
(In millions of dollars)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
- -------------------------------------------------------------------------------------------
1998 1997 1998 1997
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues
Finance related interest and other charges $421.6 $320.7 $ 828.4 $626.7
Insurance premiums 50.3 41.8 98.1 83.6
Net investment income 16.0 19.7 31.0 36.5
Other income 28.4 16.4 45.8 25.5
- -------------------------------------------------------------------------------------------
Total revenues 516.3 398.6 1,003.3 772.3
- -------------------------------------------------------------------------------------------
Expenses
Interest 173.9 133.3 340.7 258.6
Non-insurance compensation and benefits 44.9 34.2 92.1 71.9
Provision for consumer finance credit losses 91.2 73.0 178.3 144.6
Policyholder benefits and claims 16.3 14.8 32.7 29.1
Insurance underwriting, acquisition and operating 7.1 6.2 13.5 13.0
Other operating 79.8 59.2 158.4 112.6
- -------------------------------------------------------------------------------------------
Total expenses 413.2 320.7 815.7 629.8
- -------------------------------------------------------------------------------------------
Income before income taxes 103.1 77.9 187.6 142.5
Provision for income taxes 37.2 26.8 67.4 49.0
- -------------------------------------------------------------------------------------------
Net income $ 65.9 $ 51.1 $ 120.2 $ 93.5
===========================================================================================
</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>
June 30, 1998 December 31, 1997
- -------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Assets
Cash and cash equivalents $ 57.4 $ 18.4
Investments:
Fixed maturities, primarily available for sale, at market value
(amortized cost - $975.4 and $910.7) 998.7 926.8
Equity securities, at market value (cost - $75.5 and $71.8) 78.8 74.4
Short-term and other 159.5 92.7
- -------------------------------------------------------------------------------------------------
Total investments 1,237.0 1,093.9
- -------------------------------------------------------------------------------------------------
Consumer finance receivables 12,170.7 11,137.0
Allowance for losses (347.1) (321.4)
- -------------------------------------------------------------------------------------------------
Net consumer finance receivables 11,823.6 10,815.6
Other receivables 202.6 384.5
Deferred policy acquisition costs 4.4 4.2
Cost of acquired businesses in excess of net assets 480.3 476.8
Other assets 267.2 265.3
- -------------------------------------------------------------------------------------------------
Total assets $14,072.5 $13,058.7
=================================================================================================
Liabilities
Certificates of deposit $ 246.9 $ 57.3
Short-term borrowings 4,392.3 3,871.6
Long-term debt 6,300.0 6,300.0
- -------------------------------------------------------------------------------------------------
Total debt 10,939.2 10,228.9
Insurance policy and claims reserves 493.7 452.3
Accounts payable and other liabilities 675.3 523.1
- -------------------------------------------------------------------------------------------------
Total liabilities 12,108.2 11,204.3
- -------------------------------------------------------------------------------------------------
Stockholder's equity
Common stock ($.01 par value; authorized: 1,000 shares; issued: -- --
1 share)
Additional paid-in capital 685.8 685.1
Retained earnings 1,261.7 1,157.5
Accumulated other changes in equity from nonowner sources 16.8 11.8
- -------------------------------------------------------------------------------------------------
Total stockholder's equity 1,964.3 1,854.4
- -------------------------------------------------------------------------------------------------
Total liabilities and stockholder's equity $14,072.5 $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>
Six months ended June 30 1998 1997
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Net cash provided by (used in) operating activities $ 604.2 $ 256.3
- -------------------------------------------------------------------------------------------
Cash Flows From Investing Activities
Net change in credit card receivables (187.7) (277.1)
Loans originated or purchased (3,054.9) (2,236.3)
Loans repaid or sold 2,077.8 1,391.3
Purchases of investments (246.8) (179.7)
Proceeds from sales of investments 111.6 103.6
Proceeds from maturities of investments 2.5 5.4
Other, net 37.9 8.8
- -------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities (1,259.6) (1,184.0)
- -------------------------------------------------------------------------------------------
Cash Flows From Financing Activities
Dividends paid (16.0) (65.0)
Issuance of long-term debt 300.0 --
Payments of long-term debt (300.0) (350.0)
Net change in short-term borrowings 520.7 1,330.1
Net change in certificates of deposit 189.7 19.9
- -------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 694.4 935.0
- -------------------------------------------------------------------------------------------
Change in cash and cash equivalents 39.0 7.3
Cash and cash equivalents at beginning of period 18.4 11.4
- -------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 57.4 $ 18.7
===========================================================================================
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 330.2 $ 264.3
Cash (received) paid during the period for income taxes $ 18.7 $ 54.6
===========================================================================================
</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 (CCC) 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 CCC and its subsidiaries (collectively, the Company).
The accompanying condensed consolidated financial statements as of June 30,
1998 and for the three-month periods ended June 30, 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 CCC'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 Six Months Ended
June 30 June 30
--------------------- ---------------------
(millions) 1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net income $65.9 $51.1 $120.2 $93.5
Other changes in equity from
nonowner sources 5.2 10.8 5.0 (.5)
--------- --------- --------- ---------
Total changes in equity from
nonowner sources $71.1 $61.9 $125.2 $93.0
========= ========= ========= =========
</TABLE>
6
<PAGE>
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.
In June 1998, the Financial Accounting Standards Board (FASB) issued FAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities"
(FAS No. 133), which becomes effective on January 1, 2000 for calendar year
companies such as the Company. The new standard will significantly change
the accounting treatment of end-user derivative and foreign exchange
contracts by the Company and its customers. Depending on the underlying
risk management strategy, these accounting changes could affect reported
earnings, assets, liabilities, and stockholders' equity. As a result, the
Company and the customers to which it provides derivatives and foreign
exchange products will have to reconsider their risk management strategies,
since the new standard will not reflect the results of many of those
strategies in the same manner as current accounting practice. The Company
is in the process of evaluating the potential impact of the new accounting
standard.
3. Consumer Finance Receivables
Consumer finance receivables, net of unearned finance charges of $734.0
million and $728.3 million at June 30, 1998 and December 31, 1997,
respectively, consisted of the following:
<TABLE>
<CAPTION>
(millions) June 30, 1998 December 31, 1997
------------------- --------------------
<S> <C> <C>
Real estate-secured loans $5,674.5 $5,107.6
Personal loans 4,099.1 3,922.2
Credit cards 1,407.6 1,164.6
Sales finance and other 902.3 857.0
------------- ------------
Consumer finance receivables,
net of unearned finance charges 12,083.5 11,051.4
Accrued interest receivable 87.2 85.6
Allowance for credit losses (347.1) (321.4)
------------- ------------
Net consumer finance receivables $11,823.6 $10,815.6
============= ============
</TABLE>
In March 1998, Travelers Bank & Trust, fsb, 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.
7
<PAGE>
Notes to Condensed Consolidated Financial Statements (continued)
4. Debt
CCC 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 June 30, 1998 and December
31, 1997, short-term borrowings consisted of commercial paper totaling
$4,392.3 million and $3,871.6 million, respectively. CCC 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, CCC 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, CCC or TIC.
The revolving credit facility consists of a five-year facility that
expires in June 2001. As of August 6, 1998, $300 million is allocated to
CCC. At June 30, 1998, there were no borrowings outstanding under this
facility.
Currently, CCC also has committed and available revolving credit facilities
on a stand-alone basis of $4.750 billion, consisting of $3.4 billion in
five year facilities expiring in 2002 and $1.350 billion in a 364-day
facility expiring in July 1999.
CCC 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 June 30, 1998, CCC would have been able to remit
$672.0 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 CCC issued, at a premium, $50 million of 15% coupon debt
securities yielding 5.62% due July 10, 1998. Concurrently, CCC 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 terminated on July 10, 1998.
8
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION and ANALYSIS of FINANCIAL CONDITION
and RESULTS of OPERATIONS
Consolidated Results of Operations
Three Months Ended Six Months Ended
June 30, June 30
- --------------------------------------------------------------------------------
(In millions) 1998 1997 1998 1997
- --------------------------------------------------------------------------------
Revenues $516.3 $398.6 $1,003.3 $772.3
================================================================================
Net Income $ 65.9 $ 51.1 $ 120.2 $ 93.5
================================================================================
Results of Operations
The consolidated net income of Commercial Credit Company (CCC) and subsidiaries
(collectively, the Company) for the three months ended June 30, 1998 was $65.9
million compared to $51.1 million in the corresponding 1997 period. Revenues for
the quarter ended June 30, 1998 were $516.3 million compared to $398.6 million
in the corresponding 1997 period.
The net income of the Company for the six months ended June 30, 1998 was $120.2
million compared to $93.5 million in the corresponding 1997 period. Revenues for
the six months ended June 30, 1998 were $1,003.3 million compared to $772.3
million in the corresponding 1997 period.
On July 31, 1997, CCC 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
$393.2 million and is being amortized over 25 years. The purchase price for the
transaction was financed primarily by CCC, and by an equity contribution
by Travelers Group Inc. (TRV) of $520 million.
The following discussion presents in more detail each segment's performance.
Segment Results for the Three Months Ended June 30, 1998 and 1997
Consumer Finance Services
Three Months Ended June 30,
-----------------------------------------------
(In millions) 1998 1997
- --------------------------------------------------------------------------------
Revenues Net income Revenues Net income
- --------------------------------------------------------------------------------
Consumer Finance Services $513.4 $69.2 $388.9 $53.8
================================================================================
Earnings in the second quarter of 1998 were $69.2 million compared to $53.8
million in the second quarter of 1997. This segment's performance reflects
continued internal receivables growth in all major products, an improved
charge-off rate and the integration of Security Pacific into the Commercial
Credit branch system since July 1997.
9
<PAGE>
Net receivables owned reached a record $12.1 billion, up 34% from the prior year
period and up $1.032 billion or 9% 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 as well
as strong sales in the branch network. PFS is an affiliate of the Company. On a
managed basis, including securitized assets, receivables totaled $12.3 billion,
an increase of $1.1 billion from year-end 1997.
During the second quarter of 1998, the average yield on owned receivables was
14.15%, down from 14.42% in the second quarter of 1997, reflecting the shift in
the portfolio mix toward lower-risk real estate loans which have lower margins.
At June 30, 1998, the owned portfolio consisted of 47% real estate-secured
loans, 34% personal loans, 12% credit cards and 7% sales finance and other.
The charge-off rate on owned receivables of 2.66% in the second quarter of 1998
continued to improve from 2.82% in the second quarter of 1997 and from 2.75% in
the first quarter of 1998. Delinquencies over 60 days on owned receivables were
2.23% at June 30, 1998, up from 2.14% at June 30 1997, which did not include
Security Pacific, and down from 2.33% at March 31, 1998.
As of, or for the
Three Months Ended June 30,
----------------------------------
1998 1997
----------------------------------
Allowance for credit losses as % of
net outstandings 2.87% 2.91%
Charge-off rate for the period 2.66% 2.82%
60 + days past due on a contractual
basis as a % of gross consumer
finance receivables at quarter end 2.23% 2.14%
Corporate and Other
Three Months Ended June 30,
----------------------------------------------------
(In millions) 1998 1997
- --------------------------------------------------------------------------------
Net income Net income
Revenues (expense) Revenues (expense)
- --------------------------------------------------------------------------------
Corporate and Other $2.9 $(3.3) $9.7 $(2.7)
================================================================================
Segment Results for the Six Months Ended June 30, 1998 and 1997.
The overall operating trends for the six months ended June 30, 1998 and 1997
were substantially the same as those of the second quarter periods except as
noted below:
10
<PAGE>
Consumer Finance Services
Six Months Ended June 30,
----------------------------------------------------
(millions) 1998 1997
- --------------------------------------------------------------------------------
Revenues Net income Revenues Net income
- --------------------------------------------------------------------------------
Consumer Finance Services $997.6 $128.4 $755.2 $100.8
================================================================================
During the first six months of 1998, the average yield on owned receivables was
14.17%, down from 14.53% in the first six months of 1997. The charge-off rate on
owned receivables of 2.71% in the first six months of 1998 was improved from the
2.88% rate in the first six months of 1997.
Corporate and Other
Six Months Ended June 30,
----------------------------------------------
(millions) 1998 1997
- --------------------------------------------------------------------------------
Net income Net income
Revenues (expense) Revenues (expense)
- --------------------------------------------------------------------------------
Total Corporate and Other $5.7 $(8.2) $17.1 $(7.3)
================================================================================
Liquidity and Capital Resources
CCC 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. CCC 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, CCC 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, CCC or TIC. The revolving credit facility consists of a five-year
facility which expires in June 2001. As of August 6, 1998, $300 million is
allocated to CCC. In addition, CCC has committed an available revolving credit
facilities on a stand-alone basis of $4.750 billion, consisting of $3.4 billion
in five year facilities expiring in 2002 and $1.350 billion in a 364-day
facility expiring in July 1999.
CCC has unused credit availability of $5.050 billion under the revolving
credit facilities referred to above.
CCC 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 June 30, 1998, CCC would have been able to
remit $672.0 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.
11
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
On June 30, 1998, CC Finance System Inc. (formerly Security Pacific Finance
System Inc., "Security Pacific"), a subsidiary of Commercial Credit Company
("CCC"), was served by Norwest Financial, Inc. ("Norwest") with a demand for
arbitration pursuant to a contract for data processing services between Security
Pacific and Norwest. The demand asserts a claim for approximately $42 million of
damages as a result of Security Pacific's alleged breach of the contract
following the acquisition of Security Pacific by CCC in July 1997. The
arbitration will be conducted in accordance with the rules and procedures of the
American Arbitration Association. CCC intends to vigorously defend against the
claim, including the amount of damages, asserted by Norwest.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
See Exhibit Index.
(b) Reports on Form 8-K:
On April 17, 1998, CCC 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.
No other reports on Form 8-K were filed during the second quarter of
1998; however, on July 27, 1998, CCC filed a Current Report on
Form 8-K, dated July 20, 1998, reporting under Item 5 thereof the
results of its operations for the quarter ended June 30, 1998, and
certain other selected financial data.
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: August 13, 1998 By /s/ Barbara A. Yastine
-----------------------------
Barbara A. Yastine
Executive Vice President
(Principal Financial Officer)
Date: August 13, 1998 By /s/ Irwin Ettinger
-----------------------------
Irwin Ettinger
Executive Vice President
(Chief Accounting Officer)
14
Exhibit 12.01
Commercial Credit Company and Subsidiaries
Computation of Ratio of Earnings to Fixed Charges
(In millions of dollars, except for ratio)
Six months ended June 30,
-------------------------
1998 1997
------ ------
Income before income taxes $187.6 $142.5
Elimination of undistributed equity earnings (0.2) (0.5)
Interest 340.7 258.6
Portion of rentals deemed to be interest 5.5 4.5
------ ------
Earnings available for fixed charges $533.6 $405.1
====== ======
Fixed charges
Interest $340.7 $258.6
Portion of rentals deemed to be interest 5.5 4.5
------ ------
Fixed charges $346.2 $263.1
====== ======
Ratio of earnings to fixed charges 1.54x 1.54x
====== ======
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE JUNE 30,
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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 57,400
<SECURITIES> 1,237,000 <F1>
<RECEIVABLES> 12,373,300 <F2>
<ALLOWANCES> (347,100)
<INVENTORY> 0 <F3>
<CURRENT-ASSETS> 0 <F3>
<PP&E> 0 <F3>
<DEPRECIATION> 0 <F3>
<TOTAL-ASSETS> 14,072,500
<CURRENT-LIABILITIES> 0 <F3>
<BONDS> 10,939,200 <F4>
0 <F3>
0
<COMMON> 0
<OTHER-SE> 1,964,300 <F5>
<TOTAL-LIABILITY-AND-EQUITY> 14,072,500
<SALES> 0 <F3>
<TOTAL-REVENUES> 1,003,300
<CGS> 0 <F3>
<TOTAL-COSTS> 815,700
<OTHER-EXPENSES> 0 <F3>
<LOSS-PROVISION> 178,300 <F6>
<INTEREST-EXPENSE> 340,700 <F6>
<INCOME-PRETAX> 187,600
<INCOME-TAX> 67,400
<INCOME-CONTINUING> 120,200
<DISCONTINUED> 0 <F3>
<EXTRAORDINARY> 0 <F3>
<CHANGES> 0 <F3>
<NET-INCOME> 120,200
<EPS-PRIMARY> 0 <F3>
<EPS-DILUTED> 0 <F3>
<FN>
<F1>
Includes the following items from the financial statements: total investments
$1,237,000.
<F2>
Includes the following items from the financial statements: consumer finance
receivables $12,170,700 and other receivables $202,600.
<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 $246,900; short-term borrowings $4,392,300 and long-term debt
$6,300,000.
<F5>
Includes the following items from the financial statements: additional paid-in
capital $685,800; retained earnings $1,261,700; accumulated other changes in
equity from nonowner sources $16,800.
<F6>
Included in total costs and expenses applicable to sales and revenues.
</FN>
</TABLE>
