SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 10, 2000
Citicorp
(Exact name of registrant as specified in charter)
Delaware 1-5738 06-1515595
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number)
399 Park Avenue, New York, New York 10043
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: (212) 559-1000
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Page
----
Unaudited Pro Forma Condensed Combined Financial Statements 3
Notes to Unaudited Pro Forma Condensed Combined Financial
Statements 7
Exhibit 99.1 Excerpts from Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 2000 of Associates First Capital
Corporation
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<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
On October 10, 2000, Citigroup Inc. (Citigroup) filed a Form S-4
registration statement disclosing that it had agreed to acquire Associates First
Capital Corp. (Associates) through a merger of Associates with a wholly owned
subsidiary of Citigroup (the Merger). The Merger, which is expected to be
completed in the fourth quarter of 2000, is expected to be accounted for under
the pooling of interests method. In connection with the proposed transaction,
Associates will be merged with Citicorp, a wholly owned subsidiary of Citigroup.
The assets and liabilities of both companies will be combined at historical
cost. Historical consolidated financial statements presented in future reports
will be restated to include the accounts and results of Associates. The Merger
is subject to customary closing conditions, including regulatory and Associates
stockholder approval.
On a Current Report on Form 8-K dated October 10, 2000, Citicorp filed an
unaudited pro forma condensed combined statement of financial condition
combining the historical consolidated statement of financial condition of
Citicorp and the historical consolidated statement of financial condition of
Associates giving effect to the merger as though the transaction had been
consummated on June 30, 2000. The unaudited pro forma condensed combined
statements of operations combined the historical statements of operations of
Citicorp and Associates giving effect to the merger as if it had occurred on
January 1, 1997.
The following unaudited pro forma condensed combined statement of
financial condition combining the historical consolidated statement of financial
condition of Citicorp and the historical consolidated statement of financial
condition of Associates give effect to the merger as though the transaction had
been consummated on September 30, 2000. This information should be read in
conjunction with the accompanying notes; the pro forma financial information
contained in the October 10, 2000 Form 8-K and the accompanying notes thereto;
the separate historical financial statements of Citicorp as of September 30,
2000 and for the nine months ended September 30, 2000 and 1999, and for each of
the three years ended December 31, 1999 which are contained in Citicorp's
Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2000
and its Annual Report on Form 10-K for the fiscal year ended December 31, 1999,
respectively; and the separate historical financial statements of Associates as
of September 30, 2000 and for the nine months ended September 30, 2000 and 1999,
and for each of the three years ended December 31, 1999 which are contained in
Associates' Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2000 and its Annual Report on Form 10-K for the fiscal year ended
December 31, 1999, respectively.
The pro forma financial data is not necessarily indicative of the results of
operations that would have occurred had the merger been consummated or of future
operations of the combined company.
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<PAGE>
Citicorp and Associates First Captial Corporation
Unaudited Pro Forma Condensed Combined Statement of Financial Position
As of September 30, 2000
(in millions)
<TABLE>
<CAPTION>
Citicorp Associates Pro Forma Pro Forma
Historical Historical Adjustment Combined
---------- ---------- ---------- --------
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks $ 9,060 $ 3,203 $ 12,263
Deposits at interest with banks 13,808 -- 13,808
Securities, at fair value
Available for sale and short-term and other 43,263 9,483 52,746
Venture capital 5,114 -- 5,114
Trading account assets 36,884 -- 36,884
Loans held for sale 8,040 2,376 10,416
Federal funds sold and securities purchased under resale
agreements 5,407 -- 5,407
Loans, net
Consumer 170,058 47,046 217,104
Commercial 117,251 23,782 141,033
--------- --------- ----- ---------
Loans, net of unearned income 287,309 70,828 -- 358,137
Allowance for credit losses (6,679) (2,221) (8,900)
--------- --------- ----- ---------
Total loans, net 280,630 68,607 -- 349,237
Customers' acceptance liability 1,363 -- 1,363
Premises and equipment, net 4,921 -- 4,921
Interest and fees receivable 4,525 -- 4,525
Other assets 26,634 10,401 37,035
--------- --------- ----- ---------
Total assets $ 439,649 $ 94,070 $ -- $ 533,719
========= ========= ===== =========
LIABILITIES
Non-interest-bearing deposits in U.S. offices $ 18,533 $ -- $ 18,533
Interest-bearing deposits in U.S. offices 54,657 -- 54,657
Non-interest-bearing deposits in offices outside the U.S. 13,589 -- 13,589
Interest-bearing deposits in offices outside the U.S. 204,817 -- 204,817
--------- --------- ----- ---------
Total deposits 291,596 -- -- 291,596
Trading account liabilities 25,585 -- 25,585
Purchased funds and other borrowings 33,421 33,304 66,725
Acceptances outstanding 1,404 -- 1,404
Accrued taxes and other expenses 9,312 5,080 14,392
Other liabilities 13,779 1,129 14,908
Long-term debt 32,432 43,932 76,364
STOCKHOLDERS' EQUITY
Common stock -- 7 7
Additional paid-in capital 7,649 5,288 (19) 12,918
Retained earnings 25,079 5,511 30,590
Treasury stock -- (19) 19 --
Accumulated other changes in equity from nonowner --
sources (608) (162) (770)
--------- --------- ----- ---------
Total stockholders' equity 32,120 10,625 -- 42,745
--------- --------- ----- ---------
Total liabilities and stockholders' equity $ 439,649 $ 94,070 $ -- $ 533,719
========= ========= ===== =========
</TABLE>
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS.
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<PAGE>
Citicorp and Associates First Captial Corporation
Unaudited Pro Forma Condensed Combined Statement of Income
For the Nine Months Ended September 30, 1999
(in millions)
<TABLE>
<CAPTION>
Citicorp Associates Pro Forma
Historical Historical Combined
---------- ---------- --------
<S> <C> <C> <C>
INTEREST REVENUE
Loans, including fees $17,099 $ 6,788 $23,887
Deposits with banks 762 -- 762
Federal fund sold and securities
purchased under resale agreements 317 -- 317
Securities, including dividends 2,872 510 3,382
Trading account assets 517 -- 517
Loans held for sale 434 -- 434
------- ------- -------
22,001 7,298 29,299
INTEREST EXPENSE
Deposits 8,121 -- 8,121
Trading account liabilities 65 -- 65
Purchased funds and other borrowings 1,568 1,005 2,573
Long-term debt 1,401 1,913 3,314
------- ------- -------
11,155 2,918 14,073
NET INTEREST REVENUE 10,846 4,380 15,226
PROVISION FOR CREDIT LOSSES 2,151 1,096 3,247
------- ------- -------
NET INTEREST REVENUE AFTER PROVISION FOR CREDIT LOSSES 8,695 3,284 11,979
FEES, COMMISSIONS, AND OTHER REVENUE
Fees and commissions 5,426 1,678 7,104
Foreign exchange 1,214 -- 1,214
Trading account liabilities 694 -- 694
Securities transactions 202 -- 202
Other revenue 2,585 -- 2,585
------- ------- -------
10,121 1,678 11,799
OPERATING EXPENSE
Salaries 4,687 1,039 5,726
Employee benefits 952 247 1,199
------- ------- -------
Total employee 5,639 1,286 6,925
Net premises and equipment 1,856 198 2,054
Restructuring - related items 179 -- 179
Other expense 4,949 1,747 6,696
------- ------- -------
12,623 3,231 15,854
------- ------- -------
INCOME BEFORE INCOME TAXES 6,193 1,731 7,924
INCOME TAXES 2,325 649 2,974
------- ------- -------
NET INCOME $ 3,868 $ 1,082 $ 4,950
======= ======= =======
</TABLE>
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS.
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<PAGE>
Citicorp and Associates First Captial Corporation
Unaudited Pro Forma Condensed Combined Statement of Income
For the Nine Months Ended September 30, 2000
(in millions)
<TABLE>
<CAPTION>
Citicorp Associates Pro Forma
Historical Historical Combined
---------- ---------- --------
<S> <C> <C> <C>
INTEREST REVENUE
Loans, including fees $19,507 $ 7,115 $26,622
Deposits with banks 844 -- 844
Federal fund sold and securities
purchased under resale agreements 273 -- 273
Securities, including dividends 2,319 502 2,821
Trading account assets 720 -- 720
Loans held for sale 527 -- 527
------- ------- -------
24,190 7,617 31,807
INTEREST EXPENSE
Deposits 9,609 -- 9,609
Trading account liabilities 44 -- 44
Purchased funds and other borrowings 1,777 1,156 2,933
Long-term debt 1,424 1,905 3,329
------- ------- -------
12,854 3,061 15,915
NET INTEREST REVENUE 11,336 4,556 15,892
PROVISION FOR CREDIT LOSSES 2,095 1,391 3,486
------- ------- -------
NET INTEREST REVENUE AFTER PROVISION FOR CREDIT LOSSES 9,241 3,165 12,406
FEES, COMMISSIONS, AND OTHER REVENUE
Fees and commissions 6,826 2,299 9,125
Foreign exchange 1,104 -- 1,104
Trading account liabilities 1,149 -- 1,149
Securities transactions 749 -- 749
Other revenue 3,394 -- 3,394
------- ------- -------
13,222 2,299 15,521
OPERATING EXPENSE
Salaries 5,181 1,138 6,319
Employee benefits 956 315 1,271
------- ------- -------
Total employee 6,137 1,453 7,590
Net premises and equipment 1,913 220 2,133
Restructuring - related items 60 -- 60
Other expense 5,515 1,993 7,508
------- ------- -------
13,625 3,666 17,291
------- ------- -------
INCOME BEFORE INCOME TAXES 8,838 1,798 10,636
INCOME TAXES 3,257 647 3,904
------- ------- -------
NET INCOME $ 5,581 $ 1,151 $ 6,732
======= ======= =======
</TABLE>
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS.
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<PAGE>
CITICORP AND ASSOCIATES FIRST CAPITAL CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS
1. Description of Transaction and Basis of Presentation
On October 10, 2000, Citigroup Inc. (Citigroup) filed a Form S-4
registration statement disclosing that it had agreed to acquire Associates First
Capital Corporation (Associates) through a Merger of a wholly owned subsidiary
of Citigroup with and into Associates, making Associates a subsidiary of
Citigroup (the Merger). The Boards of Directors of both Citigroup and Associates
have approved the Merger. The Merger, which is expected to be completed in the
fourth quarter of 2000, is expected to be a tax-free exchange and to be
accounted for on a "pooling of interests" basis. In connection with the proposed
transaction, Associates will be merged with Citicorp, an indirect wholly owned
subsidiary of Citigroup. Additionally, Citigroup has indicated that upon
completion of the Merger, Citicorp intends to guarantee all of the outstanding
indebtedness of Associates and its subsidiaries. The assets and liabilities of
both companies will be combined at historical cost. Historical consolidated
financial statements presented in future reports will be restated to include the
accounts and results of Associates. The Merger is subject to customary closing
conditions, including regulatory and Associates stockholder approval.
2. Accounting Policies and Financial Statement Classifications
Citicorp and Associates are in the process of reviewing their accounting
policies and financial statement classifications and, as a result of this
review, it may be necessary to restate either Citicorp's or Associates'
financial statements to conform to those accounting policies and classifications
that are determined to be most appropriate.
3. Intercompany Transactions
Transactions between Citicorp and Associates are not material in relation
to the pro forma combined financial statements and therefore intercompany
balances have not been eliminated from the pro forma combined accounts.
4. Pro Forma Adjustments
The pro forma adjustments at September 30, 2000 reflect the cancellation
and retirement of all Associates common stock held in treasury pursuant to the
Merger Agreement.
5. Restructuring Charges and Future Cost Savings
The pro forma financial statements do not reflect any restructuring costs
related to the Merger. Management has not yet determined the amount of such
costs; however, a restructuring charge may be recorded after the consummation of
the Merger. Management does not anticipate that any such charge will be material
to the financial position of the combined company.
The pro forma financial statements do not reflect cost savings that may
result from the reduction of overhead expenses, changes in corporate
infrastructure and the elimination of redundant expenses. Although management
expects that cost savings will result from the merger, there can be no assurance
that cost savings will be achieved.
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<PAGE>
CITICORP INC. AND ASSOCIATES FIRST CAPITAL CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS - (Continued)
The statements contained in note 5 above may be deemed to be
forward-looking statements within the meaning of Section 27A of the Securities
Act. Forward-looking statements are typically identified by the words "believe,"
"expect," "anticipate," "intend," "estimate" and similar expressions. These
forward-looking statements are based largely on management's expectations and
are subject to a number of uncertainties. Actual results could differ materially
from these forward-looking statements. Citicorp undertakes no obligation to
update publicly or revise any forward-looking statements.
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<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.
CITICORP
(Registrant)
By: /s/ Roger W. Trupin
------------------------
Name: Roger W. Trupin
Title: Controller
Dated: November 15, 2000
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