----------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1997
Commission file no: 1-6458
-------------------------
JOHN DEERE CAPITAL CORPORATION
Delaware 36-2386361
(State of incorporation) (IRS employer identification no.)
1 East First Street, Suite 600
Reno, Nevada 89501
(Address of principal executive offices)
Telephone Number: (702) 786-5527
----------------------------------
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
At January 31, 1997, 2,500 shares of common stock, without par
value, of the registrant were outstanding, all of which were owned
by John Deere Credit Company, a wholly-owned subsidiary of Deere &
Company.
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 with certain reduced disclosures as permitted by those
instructions.
- - -----------------------------------------------------------------
Page 1 of 15 Pages
Index to Exhibits: Page 13
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
John Deere Capital Corporation and Subsidiaries
Statements of Consolidated Income and Retained Earnings
(Unaudited)
(in millions)
Three Months Ended
January 31
1997 1996
Revenues
Finance income earned on retail notes $ 92.2 $ 92.1
Revolving charge account income 22.0 21.5
Lease revenues 22.7 12.7
Finance income earned on wholesale notes 11.8 7.6
Net gain on retail notes sold .7 .3
Interest income from short-term investments 2.6 2.8
Securitization and servicing fee income 10.4 11.4
Other income 1.1 2.3
Total revenues 163.5 150.7
Expenses
Interest expense:
On obligations to others 70.8 64.9
On notes payable to Deere & Company .7 1.4
Total interest expense 71.5 66.3
Operating expenses:
Administrative and operating expenses 22.7 20.3
Provision for credit losses 6.5 5.9
Fees paid to Deere & Company 2.2 1.9
Depreciation of equipment on operating leases 14.3 6.6
Total operating expenses 45.7 34.7
Total expenses 117.2 101.0
Income of consolidated group before income taxes 46.3 49.7
Provision for income taxes 16.1 17.4
Income of consolidated group 30.2 32.3
Equity in loss of unconsolidated affiliate (.5) ---
Net income 29.7 32.3
Cash dividends declared (20.0) (20.0)
Retained earnings at beginning of the period 644.4 580.3
Retained earnings at end of the period $ 654.1 $ 592.6
See Notes to Interim Financial Statements.
John Deere Capital Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
(dollars in millions)
Jan 31 Oct 31 Jan 31
1997 1996 1996
Assets
Cash and cash equivalents $ 173.9 $ 171.0 $ 128.4
Receivables and leases:
Retail notes 4,347.9 4,075.9 4,023.5
Revolving charge accounts 472.7 564.8 443.8
Financing leases 192.4 181.5 149.3
Wholesale notes 538.4 524.5 321.5
Total receivables 5,551.4 5,346.7 4,938.1
Equipment on operating leases-net 325.1 276.8 151.3
Total receivables and leases 5,876.5 5,623.5 5,089.4
Allowance for credit losses (88.5) (87.4)
(84.3)
Total receivables and
leases-net 5,788.0 5,536.1 5,005.1
Other receivables 185.2 189.9 180.3
Investment in unconsolidated
affiliate 5.7 6.3 ---
Other assets 68.1 67.8 66.9
Total Assets $6,220.9 $5,971.1 $5,380.7
Liabilities and Stockholder's Equity
Short-term borrowings:
Commercial paper $2,125.1 $1,689.9 $2,423.3
Deere & Company 168.5 544.8 118.9
Current maturities of
long-term borrowings 955.3 863.7 296.0
Total short-term borrowings 3,248.9 3,098.4 2,838.2
Accounts payable and accrued
liabilities:
Accrued interest on senior debt 49.2 35.9 35.7
Other payables 174.9 144.8 156.1
Total accounts payable and
accrued liabilities 224.1 180.7 191.8
Deposits withheld from dealers
and merchants 128.1 135.4 122.3
Long-term borrowings:
Senior debt 1,703.0 1,649.5 1,223.0
Subordinated debt 150.0 150.0 300.0
Total long-term borrowings 1,853.0 1,799.5 1,523.0
Total liabilities 5,454.1 5,214.0 4,675.3
Stockholder's equity
Common stock, without par value
(issued and outstanding - 2,500
shares owned by John Deere
Credit Company) 112.8 112.8 112.8
Retained earnings 654.1 644.4 592.6
Cumulative translation adjustment (0.1) (0.1) ---
Total stockholder's equity 766.8 757.1 705.4
Total Liabilities and
Stockholder's Equity $6,220.9 $5,971.1 $5,380.7
See Notes to Interim Financial Statements.
John Deere Capital Corporation and Subsidiaries
Statements of Consolidated Cash Flows
(Unaudited)
(in millions)
Three Months Ended
January 31
1997 1996
Cash Flows from Operating Activities:
Net income $ 29.7 $ 32.3
Adjustments to reconcile net income
to net cash provided by operating
activities:
Provision for credit losses 6.5 5.9
Provision for depreciation 14.2 7.0
Equity in loss of unconsolidated affiliate .5 ---
Other (2.6) (15.0)
Net cash provided by operating
activities 48.3 30.2
Cash Flows from Investing Activities:
Cost of receivables and leases acquired (1,604.4) (1,241.7)
Collections of receivables 1,323.3 1,047.9
Proceeds from sales of receivables 2.3 2.9
Other 49.5 47.5
Net cash used for investing activities (229.3) (143.4)
Cash Flows from Financing Activities:
Increase in commercial paper 435.2 436.6
Change in receivable/payable
with Deere & Company (376.3) (341.3)
Proceeds from issuance of
long-term borrowings 145.0 50.0
Principal payments on long-term borrowings --- (48.0)
Dividends paid (20.0) (20.0)
Net cash provided by financing activities 183.9 77.3
Net increase (decrease) in cash
and cash equivalents 2.9 (35.9)
Cash and cash equivalents at the
beginning of period 171.0 164.3
Cash and cash equivalents at the
end of period $ 173.9 $ 128.4
See Notes to Interim Financial Statements.
John Deere Capital Corporation and Subsidiaries
Notes to Interim Financial Statements
(1) The consolidated financial statements of John Deere Capital
Corporation (Capital Corporation) and its subsidiaries, Deere
Credit, Inc., Deere Credit Services, Inc., Farm Plan Corporation,
John Deere Receivables, Inc., John Deere Funding Corporation and
Arrendadora John Deere, S.A. de C.V. (collectively referred to as
the Company) have been prepared by the Company, without audit,
pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures
normally included in annual financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted as permitted by such rules and regulations.
All adjustments, consisting of normal recurring adjustments, have
been included. Management believes that the disclosures are
adequate to present fairly the financial position, results of
operations and cash flows at the dates and for the periods
presented. It is suggested that these interim financial
statements be read in conjunction with the financial statements
and the notes thereto included in the Company's latest annual
report on Form 10-K. Results for interim periods are not
necessarily indicative of those to be expected for the fiscal
year.
(2) The principal business of the Company is providing and
administering financing for retail purchases of new and used
equipment manufactured by Deere & Company's agricultural,
industrial and commercial and consumer equipment divisions. The
Company purchases retail installment sales and loan contracts
(retail notes) from Deere & Company and its wholly-owned
subsidiaries (collectively called John Deere). These retail notes
are acquired by John Deere through independent John Deere retail
dealers. The Company also purchases and finances certain
agricultural, industrial and lawn and grounds care retail notes
unrelated to John Deere, primarily used equipment accepted by
dealers in trade. In addition, the Company purchases and finances
recreational product retail notes acquired from independent
dealers and marine product mortgage service companies
(recreational product retail notes). The Company also leases
equipment to retail customers, finances and services revolving
charge accounts acquired from and offered through merchants in the
agricultural, lawn and grounds care and recreational product
retail markets (revolving charge accounts), and provides wholesale
financing for inventories of recreational vehicles, manufactured
housing units, yachts, John Deere engines, John Deere industrial
equipment and the Sabre line of equipment owned by dealers of
those products (wholesale notes). Retail notes, revolving charge
accounts, direct financing leases and wholesale notes receivable
are collectively called "Receivables." Receivables and operating
leases are collectively called "Receivables and Leases."
(3) The consolidated ratio of earnings to fixed charges was 1.64
to 1 for the first quarter of 1997 compared with 1.74 to 1 for the
first quarter of 1996. "Earnings" consist of income before income
taxes, the cumulative effect of changes in accounting and fixed
charges. "Fixed charges" consist of interest on indebtedness,
amortization of debt discount and expense, an estimated amount of
rental expense under capitalized leases which is deemed to be
representative of the interest factor and rental expense under
operating leases.
(4) The Company is subject to various unresolved legal actions
which arise in the normal course of its business, the most
prevalent of which relate to state and federal regulations
concerning retail credit. Although it is not possible to predict
with certainty the outcome of these unresolved legal actions or
the range of possible loss, the Company believes these unresolved
legal actions will not have a material effect on its financial
position or results of operations.
(5) In the first quarter of 1997, the Company adopted the
Financial Accounting Standards Board (FASB) Statement No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to Be Disposed Of. This Statement requires that long-
lived assets be reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of the asset
may not be recoverable. If the expected future cash flows from
the use of the asset are less than the carrying amount, the asset
must be written down to fair value. The adoption of this
Statement had no effect on the Company's financial position or
results of operations.
In the first quarter of 1997, the Company also adopted FASB
Statement No. 125, Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities. This
Statement provides the conditions for distinguishing sales of
financial assets from secured borrowings and gives the criteria
for recognizing extinguishments of liabilities. The adoption of
this Statement had no effect on the Company's financial position
or results of operations.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Results of Operations
Net income was $29.7 million in the first quarter of 1997 compared
with $32.3 million for the same period last year. Higher income
from a 15 percent increase in the average balance of Receivables
and Leases financed was more than offset by lower financing
spreads and higher expenditures associated with several growth
initiatives.
Revenues totaled $163.5 million for the first quarter ended
January 31, 1997, compared to $150.7 million for the same period a
year ago. Revenues increased due to a larger average portfolio
financed, particularly in the wholesale note and operating lease
areas. Finance income earned on wholesale notes increased $4.2
million to $11.8 million for the first quarter of 1997 from $7.6
million earned in the first quarter of 1996. The higher finance
income earned on wholesale notes were primarily a result of the
continued growth in the manufactured housing, industrial and yacht
markets. In addition, operating lease revenues increased $10
million, to $22.7 million from $12.7 million in the first quarter
of 1996, largely due to a number of low-rate leasing initiatives
related to John Deere agricultural and industrial equipment.
Total interest expense for the first quarter increased from $66.3
million in 1996 to $71.5 million in 1997. The increase in
interest expense was the result of increased borrowings required
to finance the higher average portfolio of Receivables and Leases,
partially offset by lower average borrowing costs. Total average
borrowings during the first quarter of 1997 were $5.015 billion,
compared to $4.359 billion in the first quarter of 1996.
Administrative and operating expenses increased to $22.7 million
in the first quarter of 1997, compared to $20.3 million for the
same period in 1996. This increase was the result of higher
employment costs associated with administering a larger Receivable
and Lease portfolio and certain expenses relating to several
growth initiatives. These growth initiatives include an emphasis
on international expansion, golf and turf financing, and continued
efforts related to business finance opportunities, such as
production input loans. In addition, depreciation of equipment on
operating leases increased to $14.3 million in the first quarter
of 1997, compared to $6.6 million for the same period in 1996, a
direct reflection of the Company's increased operating lease
volume.
During the first quarter of 1997, the provision for credit losses
totaled $6.5 million compared with $5.9 million in the same period
last year, an increase of 10 percent. The increase in the
Company's loss provision was due primarily to the growth in the
portfolio of Receivables and Leases. The provision for credit
losses, as a percentage of the total average portfolio outstanding
was .48 percent for the first quarter of both 1997 and 1996.
In October 1996, the Capital Corporation entered into an
unconsolidated joint venture, John Deere Credit Limited (JDCL), to
offer equipment financing products in the United Kingdom. Through
January 31, 1997, the Capital Corporation's equity loss in JDCL
was $.5 million, representing primarily fixed administrative and
operating expenses associated with this new affiliate.
Receivables and Leases
Receivable and Lease acquisition volumes during the first quarter
ended January 31, 1997 and 1996 were as follows (dollars in
millions):
Three Months
Ended January 31
$ %
1997 1996 Change Change
Retail notes volumes:
Agricultural equipment $ 840 $ 640 $ 200 31%
Industrial equipment 100 121 (21) (17)
Lawn and grounds care equipment 23 15 8 53
Recreational products 64 58 6 10
Total retail note volumes 1,027 834 193 23
Revolving charge accounts 231 197 34 17
Wholesale notes 252 162 90 56
Leases 95 49 46 94
Total Receivable and
Lease volumes $ 1,605 $ 1,242 $ 363 29
Total Receivables and Leases held at January 31, 1997, October 31,
1996 and January 31, 1996 were as follows (in millions):
Jan 31 Oct 31 Jan 31
1997 1996 1996
Retail notes held:
Agricultural equipment $ 2,675 $ 2,424 $ 2,446
Industrial equipment 644 629 560
Lawn and grounds care equipment 180 183 155
Recreational products 849 840 863
Total retail notes held 4,348 4,076 4,024
Revolving charge accounts 473 565 444
Wholesale notes 538 524 321
Leases 518 459 300
Total Receivables and
Leases held $ 5,877 $ 5,624 $ 5,089
For the quarter ended January 31, 1997, total retail note volumes
increased 23 percent over the same period in 1996. Agricultural
equipment note volumes increased $200 million, or 31 percent, due
primarily to a low-rate incentive program offered on certain new
and used John Deere agricultural equipment. Industrial equipment
retail note volumes declined $21 million, or 17 percent, when
compared to volumes in the first quarter of last year. Wholesale
note volumes, driven by increases in manufactured housing and
industrial equipment business, increased $90 million, or 56
percent. Lease volumes increased from $49 million in the first
quarter of 1996 to $95 million in the first quarter of 1997, the
result of agricultural and industrial equipment low-rate and
guaranteed value leasing programs sponsored by John Deere and the
Company. Total revolving charge account also increased during the
first quarter of 1997, when compared to 1996 volumes, due to
continued strong demand.
The amount of retail notes administered by the Company, which
includes retail notes previously sold, totaled $5.317 billion at
January 31, 1997, $5.253 billion at October 31, 1996, and $4.970
billion at January 31, 1996. At January 31, 1997, the balance of
retail notes previously sold was $969 million compared with $1.177
billion at October 31, 1996 and $947 million at January 31, 1996.
The Company's maximum exposure under all retail note recourse
provisions at January 31, 1997 was $183 million.
Total Receivables and Leases 60 days or more past due, by product
and as a percentage of total balances held at January 31, 1997,
October 31, 1996 and January 31, 1996, were as follows (dollars in
millions):
January 31, October 31, January 31,
1997 1996 1996
Dol- Per- Dol- Per- Dol- Per-
lars cent lars cent lars cent
Retail notes:
Agricultural equipment $6.4 .24% $4.4 .18% $5.3 .22%
Industrial equipment 3.0 .47 2.5 .39 1.9 .34
Lawn and grounds care
equipment .9 .49 .7 .38 .7 .49
Recreational products .4 .05 .3 .03 .3 .03
Total retail notes 10.7 .25 7.9 .19 8.2 .21
Revolving charge
accounts 12.0 2.57 8.9 1.58 11.0 2.48
Wholesale notes 1.8 .34 1.0 .17 .2 .06
Leases 3.0 .57 1.7 .38 1.4 .47
Total Receivables
and Leases $27.5 .47 $19.5 .35 $20.8 .41
The balance of retail notes held (principal plus accrued interest)
with any installment 60 days or more past due was $60.6 million,
$47.2 million and $48.9 million at January 31, 1997, October 31,
1996 and January 31, 1996, respectively. Balance of retail notes
held on which any installment is 60 days or more past due as a
percentage of ending retail notes receivable was 1.39%, 1.16% and
1.21% at January 31, 1997, October 31, 1996 and January 31, 1996,
respectively.
Deposits withheld from dealers and merchants, representing mainly
the aggregate dealer retail note and lease withholding accounts
from individual John Deere dealers to which losses from retail
notes and leases originating from the respective dealers can be
charged, amounted to $128.1 million at January 31, 1997, compared
with $135.4 million at October 31, 1996 and $122.3 million at
January 31, 1996. The Company's allowance for credit losses on
all Receivables and Leases financed totaled $88.5 million at
January 31, 1997, $87.4 million at October 31, 1996 and $84.3
million at January 31, 1996. Allowance for credit losses
represented 1.51 percent of the unpaid balance of Receivables and
Leases financed at January 31, 1997, 1.55 percent at October 31,
1996, and 1.66 percent at January 31, 1996. The Company's
allowance for credit losses, as a percentage of total Receivables
and Leases, has declined during the last twelve months due to an
ongoing reevaluation of loss experience and related adjustments to
insure that the allowance for credit losses is maintained at an
adequate level. Management believes the allowance for credit
losses at January 31, 1997, is sufficient to provide adequate
protection against losses in all areas of its portfolio.
Capital Resources and Liquidity
The Company relies on its ability to raise substantial amounts of
funds to finance its Receivable and Lease portfolios. The
Company's primary sources of funds for this purpose are a
combination of borrowings and equity capital. Additionally, the
Company periodically sells substantial amounts of retail notes in
the public market. The Company's ability to obtain funds is
affected by its debt ratings, which are closely related to the
outlook for and the financial condition of Deere & Company, and
the nature and availability of support facilities, such as its
lines of credit. For information regarding Deere & Company and
its business, see Exhibit 99.
The Company's ability to meet its debt obligations is supported in
a number of ways as described below. All commercial paper issued
is backed by bank credit lines. The assets of the Company are
self-liquidating in nature. A strong equity position is available
to absorb unusual losses on these assets. Liquidity is also
provided by the Company's ability to sell and securitize these
assets. Asset-liability risk is also actively managed to minimize
exposure to interest rate fluctuations.
Total interest-bearing indebtedness amounted to $5.102 billion at
January 31, 1997, compared with $4.898 billion at October 31, 1996
and $4.361 billion at January 31, 1996, generally corresponding
with the level of Receivables and Leases financed. Total short-
term indebtedness amounted to $3.249 billion at January 31, 1997,
compared with $3.098 billion at October 31, 1996 and $2.838
billion at January 31, 1996. Total long-term indebtedness
amounted to $1.853 billion, $1.800 billion and $1.523 billion at
January 31 1997, October 31, 1996 and January 31, 1996,
respectively. The ratio of total interest-bearing debt to
stockholder's equity was 6.7 to 1, 6.5 to 1 and 6.2 to 1 at
January 31, 1997, October 31, 1996 and January 31, 1996,
respectively. During the first quarter of 1997, the Capital
Corporation also issued $145 million of medium-term notes.
At January 31, 1997, the Capital Corporation, Deere & Company and
John Deere Credit, Inc. (Canada), jointly, maintained $4.208
billion of unsecured lines of credit with various banks in North
America and overseas, $1.428 billion of which was unused. For the
purpose of computing unused credit lines, the total short-term
borrowings, excluding the current portion of long-term borrowings,
of the Capital Corporation, Deere & Company and John Deere Credit,
Inc. (Canada), were considered to constitute utilization.
Included in the total credit lines is a long-term credit agreement
expiring on February 27, 2001, for $3.675 billion. An annual
facility fee on the credit agreement is charged to the Capital
Corporation based on utilization.
The Company's business is somewhat seasonal, with overall
acquisitions of Receivables and Leases traditionally higher in the
second half of the fiscal year than in the first half, and overall
collections of Receivables and Leases traditionally somewhat
higher in the first half of the fiscal year.
During the first quarter of 1997, the aggregate net cash provided
by operating and financing activities was primarily used to
increase Receivables and Leases. Net cash provided by operating
activities was $48 million in the first quarter of 1997.
Financing activities provided $184 million during the same period,
resulting from a $204 million increase in total borrowings, which
was offset by a $20 million dividend payment to John Deere Credit
Company. Net cash used for investing activities totaled $229
million in 1997, primarily due to Receivable and Lease
acquisitions exceeding collections by $281 million. Cash and cash
equivalents increased $3 million during the first quarter of 1997.
During the first quarter of 1996, the aggregate cash provided by
operating and financing activities was used to increase
Receivables and Leases. Cash provided from operating activities
was $30 million during the first quarter of 1996. Financing
activities provided $77 million during the first quarter of 1996,
resulting from a $97 million increase in total borrowings, which
was offset by a $20 million dividend payment. Cash used for
investing activities totaled $143 million in the first quarter of
1996, primarily because the cost of Receivables and Leases
acquired exceeded the collections. Cash and cash equivalents
decreased $36 million during the first quarter of 1996.
The Capital Corporation paid a cash dividend to John Deere Credit
Company of $20 million in the first quarter of 1997. John Deere
Credit Company paid a comparable dividend to Deere & Company. On
February 28, 1997, the Capital Corporation declared a dividend of
$20 million to John Deere Credit Company, which in turn, declared
a dividend of $20 million to Deere & Company, each payable on
March 11, 1997.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
See Note (4) to the Interim Financial Statements.
Item 2. Changes in Securities.
Omitted pursuant to instruction H(2).
Item 3. Defaults Upon Senior Securities.
Omitted pursuant to instruction H(2).
Item 4. Submission of Matters to a Vote of Security Holders.
Omitted pursuant to instruction H(2).
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
See the index to exhibits immediately preceding
the exhibits filed with this report.
Certain instruments relating to long-term
debt, constituting less than 10% of the
registrant's total assets, are not filed as
exhibits herewith pursuant to Item
601(b)(4)(iii)(A) of Regulation S-K. The
registrant will file copies of such instruments
upon request of the Commission.
(b) Reports on Form 8-K.
Current report on Form 8-K dated
November 26, 1996 (items 5 and 7).
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.
JOHN DEERE CAPITAL CORPORATION
Date: 7 March 1997 By: /s/ R. W. Lane
R. W. Lane
Vice President
(Principal Financial Officer)
INDEX TO EXHIBITS
Exhibit Page No.
(12) Computation of ratio of earnings to fixed charges 13
(27) Financial data schedule 14
(99) Part I of Deere & Company Form 10-Q for the quarter
ended January 31, 1997 (Securities and Exchange
Commission file number 1-4121*).
__________________________
* Incorporated by reference. Copies of these exhibits are
available from the Company upon request.
Exhibit 12
John Deere Capital Corporation and Subsidiaries
Computation of Ratio of Earnings to Fixed Charges
(dollars in thousands)
Three Months For the Years
Ended Ended
31 January 31 October
1997 1996 1996 1995
Earnings:
Income before income taxes
and changes in accounting $ 46,326 $ 49,690 $206,588 $175,360
Fixed charges 72,342 66,976 276,726 240,913
Total earnings $118,668 $116,666 $483,314 $416,273
Fixed charges:
Interest expense $ 71,485 $ 66,321 $273,748 $238,445
Rent expense 857 655 2,978 2,468
Total fixed charges $ 72,342 $ 66,976 $276,726 $240,913
Ratio of earnings to
fixed charges * 1.64 1.74 1.75 1.73
- - -----------------------------------------------------------------
For the Years
Ended
31 October
1994 1993 1992
Earnings:
Income before income taxes
and changes in accounting $161,809 $169,339 $142,920
Fixed charges 168,507 170,226 191,930
Total earnings $330,316 $339,565 $334,850
Fixed charges:
Interest expense $166,591 $167,787 $189,288
Rent expense 1,916 2,439 2,642
Total fixed charges $168,507 $170,226 $191,930
Ratio of earnings to 1.96 1.99 1.74
fixed charges *
__________
"Earnings" consist of income before income taxes, the cumulative
effect of changes in accounting and fixed charges. "Fixed
charges" consist of interest on indebtedness, amortization of
debt discount and expense, an estimated amount of rental expense
under capitalized leases which is deemed to be representative of
the interest factor and rental expense under operating leases.
* The Company has not issued preferred stock. Therefore, the
ratios of earnings to combined fixed charges and preferred stock
dividends are the same as the ratios presented above.
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This schedule contains summary financial information
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