<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C., 20549
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1995
--------------------------------------------------------------------------------
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 1-7543
--------------------------------------------------------------------------------
FINOVA CAPITAL CORPORATION
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 94-1278569
--------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1850 North Central Ave., P. O. Box 2209, Phoenix, AZ 85002-2209
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 602/207-6900
--------------------------------------------------------------------------------
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 such shorter period that the registrant was
required to file such report), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
--- ---
The registrant meets the conditions set forth in General Instructions H (1)(a)
and (b) of Form 10-Q and is therefore filing this form in the reduced
disclosure format.
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of August 1, 1995, 25,000 shares of Common Stock ($1.00 par value) were
outstanding and were held by an affiliate.
<PAGE> 2
FINOVA CAPITAL CORPORATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Page No.
--------
PART I FINANCIAL INFORMATION.
Item 1. Financial Statements.
Condensed Consolidated Financial Information:
Condensed Consolidated Balance Sheet - June 30, 1995 and
December 31, 1994 1
Condensed Consolidated Income Statement - Quarter and Six Months
Ended June 30, 1995 and 1994 2
Condensed Consolidated Statement of Cash Flows - Six Month Ended
June 30, 1995 and 1994 3
Notes to Interim Condensed Consolidated Financial Information 4 - 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7 - 10
PART II OTHER INFORMATION.
Item 4. Submission of Matters to Vote of Security Holders 10
Item 6. Exhibits and Reports on Form 8-K 10
SIGNATURES 11
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FINOVA CAPITAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in Thousands)
<TABLE>
<CAPTION>
June 30, December
ASSETS: 1995 31,
1994
---------- ----------
<S> <C> <C>
CASH AND CASH EQUIVALENTS $ 25,007 $ 52,753
INVESTMENT IN FINANCING TRANSACTIONS:
Loans and other financing contracts, less unearned income of
$291,409 and $249,550, respectively 4,412,794 4,034,648
Direct financing leases 841,130 774,834
Operating leases 410,562 412,782
Leveraged leases 304,945 287,518
Factored receivables 189,963 157,862
---------- ----------
6,159,394 5,667,644
Less reserve for possible credit losses (115,431) (109,245)
----------- ----------
Investment in financing transactions - net 6,043,963 5,558,399
OTHER ASSETS AND DEFERRED CHARGES 288,477 236,397
---------- ----------
$6,357,447 $5,847,549
========== ==========
LIABILITIES:
Accounts payable and accrued expenses $ 283,795 $ 282,910
Senior debt 5,044,834 4,573,354
Deferred income taxes 210,937 209,299
---------- ----------
5,539,566 5,065,563
---------- ----------
STOCKHOLDER'S EQUITY:
Common stock, $1.00 par value, 100,000 shares
authorized, 25,000 shares issued and outstanding 25 25
Additional capital 677,960 677,947
Retained income 143,701 108,740
Cumulative translation adjustments (3,805) (4,726)
---------- ----------
817,881 781,986
---------- ----------
$6,357,447 $5,847,549
========== ==========
</TABLE>
See notes to interim consolidated financial information.
1
<PAGE> 4
FINOVA CAPITAL CORPORATION
CONDENSED CONSOLIDATED INCOME STATEMENT
(Dollars in Thousands)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 30, June 30,
------------------------ -----------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Interest and income earned from
financing transactions $184,693 $121,891 $359,450 $195,852
Interest and income expense 90,197 53,648 174,721 87,510
Depreciation 13,168 8,324 25,911 10,281
-------- -------- -------- --------
Interest margins earned 81,328 59,919 158,818 98,061
Provision for possible losses 11,600 4,888 18,000 8,138
-------- -------- -------- --------
Net interest margins earned 69,728 55,031 140,818 89,923
Gains on sale of assets 4,073 4,500 7,053 4,503
-------- -------- -------- --------
73,801 59,531 147,871 94,426
Selling, administrative and other
operating expenses 36,420 28,964 72,995 45,205
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 37,381 30,567 74,876 49,221
Income taxes 13,752 13,050 28,879 20,108
-------- -------- -------- --------
NET INCOME $ 23,629 $ 17,517 $ 45,997 $ 29,113
======== ======== ======== ========
</TABLE>
See notes to interim consolidated financial information.
2
<PAGE> 5
FINOVA CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in Thousands)
<TABLE>
<CAPTION>
Six Months Ended June 30,
--------------------------
OPERATING ACTIVITIES: 1995 1994
--------- ---------
<S> <C> <C>
Net income $ 45,997 $ 29,113
Adjustments to reconcile net income to net cash provided (used)
by operating activities:
Provision for possible credit losses 18,000 8,138
Depreciation and amortization 33,332 13,455
Gains on securitizations and sale of assets (7,053) (4,503)
Deferred income taxes 1,638 12,549
Change in assets and liabilities, net of effects from subsidiaries
purchased (29,132) (67,074)
--------- ---------
Net cash provided (used) by operating activities 62,782 (8,322)
--------- ---------
INVESTING ACTIVITIES:
Proceeds from sale of assets 20,574 118,607
Principal collections on financing transactions 576,738 426,449
Expenditures for financing transactions (869,130) (611,146)
Net change in short-term financing transactions (135,486) (87,512)
Purchase of Ambassador Factors (246,285)
Acquisition of portfolios (127,045)
Investment in TriCon (344,212)
Other 1,290 672
--------- ---------
Net cash used by investing activities (533,059) (743,427)
--------- ---------
FINANCING ACTIVITIES:
Net borrowings under commercial paper 219,072 456,184
Long-term borrowings 650,000 827,550
Repayment of long-term borrowings (397,592) (743,443)
Net repayment of advances from Parent (19,855) 228,980
Dividends (11,037) (9,212)
Other 1,943 15,277
--------- ---------
Net cash provided by financing activities 442,531 775,336
--------- ---------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (27,746) 23,587
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 52,753 2,859
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 25,007 $ 26,446
========= =========
</TABLE>
See notes to interim consolidated financial information.
3
<PAGE> 6
FINOVA CAPITAL CORPORATION
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
NOTE A BASIS OF PREPARATION
The consolidated financial statements present the financial position,
results of operations and cash flows of FINOVA Capital Corporation (formerly
known as Greyhound Financial Corporation) and its subsidiaries (collectively,
"FINOVA" or the "Company"), including Ambassador Factors ("Ambassador")
acquired on February 14, 1994 and TriCon Capital ("TriCon") acquired on April
30, 1994. Both Ambassador and TriCon were merged into FINOVA in 1994.
Recognizing the substantial increase in the Company's size and scope of
operations and its use of several names in its operations, Greyhound Financial
Corporation changed its name to FINOVA Capital Corporation, a wholly owned
subsidiary of The FINOVA Group Inc. ("FINOVA Group") (formerly known as GFC
Financial Corporation), both name changes effective February 1, 1995.
The interim consolidated financial information is unaudited. In the
opinion of management all adjustments, consisting only of normal recurring
accruals, necessary to present fairly the financial position as of June 30,
1995, the results of operations for the quarter and six months ended June 30,
1995 and 1994 and cash flows for the six months ended June 30, 1995 and 1994,
have been included. Interim results of operations are not necessarily
indicative of the results of operations for the full year.
NOTE B SIGNIFICANT ACCOUNTING POLICIES
The Company adopted the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 114 "Accounting by Creditors for Impairment
of a Loan" ("SFAS 114"), as amended by SFAS No. 118 "Accounting by Creditors
for Impairment of a Loan - Income Recognition and Disclosures" ("SFAS 118"), as
of January 1, 1995. These statements require that impaired loans be measured
based on the present value of the expected cash flows discounted at the loan's
effective interest rate or the fair value of the collateral, if the loan is
collateral dependent. Under SFAS 114, a loan is considered impaired when,
based on current information and events, it is probable that a creditor will be
unable to collect all amounts due according to the contractual terms of the
loan agreement. These standards do not apply to leasing transactions or to
large groups of smaller balance homogeneous loans, such as the Company's former
European Consumer Finance Second Mortgage portfolio. Evaluation for loan
impairment is performed as a part of the portfolio management review process.
When a loan is determined to be impaired, a write-down is taken or an
impairment reserve is established based on the difference between the recorded
balance of the loan ("carrying amount") and the relevant measured value. The
total carrying amount of impaired loans was $81.4 million at June 30, 1995,
$10.3 million of which were performing and $71.1 million of which were
nonaccruing. Income is recognized in the same manner as it is on normal
accruing loans. For the six months ended June 30, 1995, $0.4 million of income
was recognized on the accruing impaired loans. Cash collected on nonaccruing
impaired loans is applied to the carrying amount of the loans.
Under SFAS 114, in-substance foreclosed assets are accounted for as
loans. Accordingly, effective January 1, 1995, $12.6 million of performing and
$25.3 million of nonaccruing in-substance foreclosed assets were reclassified
from repossessed assets to loans. The Company has elected to account for
troubled debt restructurings, as defined under SFAS No. 15, "Accounting by
Debtors and Creditors for Troubled Debt Restructurings" under SFAS 114.
Accounts are either written-down or written-off when the loss is
considered probable and determinable, after giving consideration to the
customer's financial condition and the value of the underlying collateral,
including any guarantees. Impaired loans were written-down by $7.7 million
during
4
<PAGE> 7
the period ended June 30, 1995. Reserve levels (including $12 million of
accrued liabilities applicable to securitizations) and total non-earnings were
not impacted by the adoption of SFAS 114 on January 1, 1995 and approximated
2.0% and 2.6%, respectively of ending funds employed and securitizations at June
30, 1995. Impairment reserves of $17.6 million were required for $43.9 million
of impaired loans, with no impairment reserve being required for the remaining
$37.5 million of impaired loans. The total reserve for possible credit losses
represents management's estimate of the amount necessary to cover potential
losses in the portfolio considering delinquencies, loss experience and
collateral.
NOTE C PORTFOLIO QUALITY
The following table presents a breakdown (by line of business) of the
Company's investment in financing transactions before the reserve for possible
credit losses at the dates indicated.
5
<PAGE> 8
INVESTMENT IN FINANCING TRANSACTIONS
BY LINE OF BUSINESS
JUNE 30, 1995
(Dollars in Thousands)
<TABLE>
<CAPTION>
Revenue Accruing Nonaccruing
-------------------------------- ------------------------------
Repos-
sessed Repos- Leases Total
Original Impaired Assets Impaired sessed & Carrying
Rate (1) (2) (1) Assets Other Amount
-------------------------------- ------------------------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Corporate Finance $ 869,907 $ 4,383 $ $11,118 $ 335 $ $ 885,743
Commercial Real Estate Finance 646,002 2,268 42,993 6,628 20,958 990 719,839
Transportation Finance (3) 775,776 775,776
Resort Finance 708,012 10,842 6,346 24,523 749,723
Communications Finance 557,024 2,557 18,135 5,863 583,579
Medical Finance 451,571 1,266 452,837
Manufacturer and Dealer Services (4) 374,571 107 22,714 397,392
Commercial Equipment Finance 316,648 1,978 6,313 324,939
Franchise Finance 297,676 3,544 7,029 2,824 311,073
Rediscount Finance 252,353 252,353
Commercial Finance 196,946 11,592 208,538
Factoring Services 189,244 719 189,963
Government Finance 105,201 10 105,211
Inventory Finance 89,552 336 89,888
European Finance 66,799 6,994 7,367 81,160
Other 31,147 233 31,380
---------- ------- ------- ------- ------- ------- ----------
TOTAL (4) $5,928,429 $10,302 $56,392 $71,108 $51,679 $41,484 $6,159,394
========== ======= ======= ======= ======= ======= ==========
</TABLE>
--------------------
(1) Total recorded carrying amount of impaired loans was $81.4 million at
June 30, 1995. Of the total impaired loans, $10.3 million were
performing and $71.1 million were nonaccruing. For the period ended June
30, 1995, $0.4 million of income was recognized on these loans. Under
SFAS 114, in-substance foreclosed assets should be accounted for as
loans. Accordingly, effective January 1, 1995, $12.6 million of
performing and $25.3 million of nonaccruing in-substance foreclosed
assets were reclassified from repossessed assets to loans.
(2) The Company earned income totaling $1.8 million on repossessed assets
during 1995, including $1.5 million in Commercial Real Estate Finance,
$0.1 million in Communications Finance and $0.2 million in Resort
Finance.
(3) Transportation Finance includes $83 million of new aircraft financing
business booked through the London office.
(4) Excludes $168 million of assets securitized which the Company manages.
----------------------
<PAGE> 9
RESERVE AND ACCRUED LIABILITIES FOR POSSIBLE CREDIT LOSSES:
The reserve and accrued liabilities for possible credit losses of
$127.7 million at June 30, 1995 represents 2.02% of the aggregate carrying
amount of the investment in financing transactions and securitized assets
("managed assets") before deducting such reserve. Accrued liabilities of $12.3
million represent an allowance for estimated losses under certain recourse
provisions on $168.1 million of assets securitized. Changes in the reserve for
possible credit losses were as follows:
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------------
1995 1994
---------- ----------
(Dollars in Thousands)
<S> <C> <C>
Balance, beginning of period $109,245 $ 64,280
Provision for possible credit losses 18,000 8,138
Write-offs (15,867) (12,021)
Recoveries 1,289 668
Other 2,764 54,404
-------- --------
Balance, end of period $115,431 $115,469
======== ========
</TABLE>
The Company believes that collateral values significantly reduce its
loss exposure and that the reserve for possible credit losses is adequate.
The specific impairment reserve of $17.6 million at June 30, 1995
applies to $43.9 million of the $81.4 million of impaired loans. The remaining
$97.8 million of the reserve for possible credit losses is designated for
general purposes and represents management's estimate of the amount to cover
potential losses in the portfolio considering delinquencies, loss experience
and collateral. Additions to general and specific reserves are reflected in
current operations. Management may transfer reserves between the general and
specific reserves as considered necessary.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 1995
TO THE SIX MONTHS ENDED JUNE 30, 1994
The following discussion relates to FINOVA Capital Corporation
(formerly known as Greyhound Financial Corporation) and its subsidiaries
(collectively, "FINOVA" or the "Company"), including Ambassador Factors
("Ambassador") acquired on February 14, 1994 and TriCon Capital ("TriCon")
acquired on April 30, 1994. Both Ambassador and TriCon were merged into FINOVA
in 1994. Recognizing the substantial increase in the Company's size and scope
of operations and its use of several names in its operations, Greyhound
Financial Corporation changed its name to FINOVA Capital Corporation, a wholly
owned subsidiary of The FINOVA Group Inc. ("FINOVA Group") (formerly known as
GFC Financial Corporation), both name changes effective February 1, 1995.
RESULTS OF OPERATIONS
Net income increased to $46.0 million during the six months of 1995
from $29.1 million in the comparable period of 1994, an increase of 58% in net
income.
INTEREST MARGINS EARNED. Interest margins earned, which is interest and
income earned from financing transactions less interest expense and
depreciation, increased to $158.8 million for 1995 from
7
<PAGE> 10
$98.1 million for 1994. This increase was driven by portfolio growth, together
with the addition of TriCon and Ambassador in 1994. The primary source of the
portfolio growth was new business, which totaled $1,005 million for 1995
compared to $699 million for 1994 (an increase of 44%). Portfolio growth was
also helped by the acquisition of $117 million of consumer rediscount assets
from Transamerica Financial Corporation during the first quarter of 1995.
Factoring volume also increased in 1995 to $810 million for the first six
months, almost double the 1994 volume.
Interest margins earned, measured as a percent of average earning
assets, were 5.8% for the first six months of 1995 compared to 5.9% for the
1994 period. This reduction in interest margins was expected in 1995 due to
the cost of the hedges that the Company entered into to lock in the spread
between its lending and borrowing rates on approximately 50% of its
floating-rate debt ($1.5 billion) and to the diminishing ratio of the higher
yielding businesses relative to the total portfolio. Growth in interest
margins more than offset the higher provisions for possible credit losses and
the higher selling, administrative and other operating expenses in the 1995
period.
NON-INTEREST EXPENSE. Loss provisions, which increase the reserve for
possible credit losses ("reserve"), were greater by $9.9 million during 1995
compared to 1994. The greater loss provisions were consistent with the
requirements of a larger portfolio and the loss experience of the businesses
acquired. Management believes that reserve coverage (reserve and accrued
liabilities/nonaccruing assets) remains adequate at 77.8% of nonaccruing assets
and at 2.02% of funds employed and securitizations.
Selling, administrative and other operating expenses were higher in the
1995 period by $27.8 million but remained constant as a percent of interest
margins earned at 46.%. The higher operating expenses are primarily
attributable to the additions of TriCon and Ambassador, as well as to higher
marketing expenses incurred in connection with the higher volume of new
business added during the year, partially offset by lower problem account
costs.
GAINS ON SALE OF ASSETS. Gains on sale of assets were $2.6 million
higher during the period ended June 30, 1995 compared to June 30, 1994 due to
the amount and type of assets sold. The 1994 period included a $4.0 million
gain from the securitization of assets.
INCOME TAXES. Income taxes for 1995 increased to $28.9 million from
$20.1 million in 1994. Income taxes were higher in 1995 due to an increase in
income before income taxes, which more than offset a lower effective income tax
rate resulting from state income tax adjustments. Excluding the state income
tax adjustments, the incremental income tax rate for the Company is
approximately 40%.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Funds employed increased by $0.5 billion to $6.2 billion at June 30,
1995 from $5.7 billion at December 31, 1994. This increase is attributable to
new business generated ($1 billion) and the acquisition of approximately $117
million of rediscount loans, less principal collections of $597 million.
The reserve and accrued liabilities for possible credit losses at June
30, 1995 increased by $5.5 million when compared to December 31, 1994. The
increase in the reserve and accrued liabilities consisted of increases due to
loss provisions of $18 million which were applicable to portfolio growth and
$2.4 million of reserves acquired with the rediscount portfolio, offset by
write-offs of $15.9 million.
Nonaccruing contracts and repossessed assets decreased to $164.3
million at June 30, 1995 from $168.8 million at December 31, 1994. When
measured as a percent of funds employed and securitizations, nonearning assets
declined to 2.6% at June 30, 1995 from 2.9% at December 31, 1994.
8
<PAGE> 11
The Company had total debt of approximately $5.0 billion or 6.17 times
its equity base of $818 million at June 30, 1995. The Company also had deferred
income taxes of $211 million, generally used to reduce debt and, therefore, help
finance lending activities.
Growth in funds employed is generally financed by internally generated
cash flow and additional borrowings. During the first six months of 1995,
FINOVA issued $650 million in new senior debt, which together with general
corporate funds and net commercial paper borrowings were used to finance new
business, redeem or retire $398 million of debt and acquire the rediscount
portfolio.
RECENT DEVELOPMENTS AND BUSINESS OUTLOOK
Following the Spin-Off in 1992, the Company focused its resources and
capital on its domestic commercial finance activities. The Company embarked on
a program of selling or winding down those businesses included in the Spin-Off
that were not associated with the Company's charter domestic commercial finance
activities. The Company concentrated on redeploying the capital previously
invested in such businesses and raised additional capital to support internal
portfolio growth and to make selected acquisitions to complement the Company's
charter operations. This strategy has resulted in (i) the managed liquidation
and sale of the GEFG and Latin American loan portfolios, (ii) an increase
(excluding acquisitions) in FINOVA's domestic loan portfolio each year, (iii)
the acquisition of the asset based lending activity of U.S. Bancorp, (iv) the
acquisition of Ambassador and (v) the acquisition of TriCon. More recently, on
February 27, 1995, FINOVA acquired substantially all of the rediscount
portfolio of the Lender Finance Division of Transamerica Business Credit
Corporation, a wholly owned subsidiary of Transamerica Corporation. The
rediscount portfolio is comprised of secured revolving credit facilities to
independent consumer finance companies. The principal amount of the loans
purchased amounted to approximately $117 million. The European Consumer
Finance Second Mortgage portfolio was sold in April 1995 to Beneficial Bank
PLC. The sales price included approximately $14 million cash at closing plus
contingent payments of $8 million predicated on cash collections, the total of
which ($22 million) approximated the Company's book value of those assets.
These activities and the Company's performance were implicitly recognized in
FINOVA's recent increases in credit ratings of its senior debt by Standard &
Poor's Rating Group to BBB+ from BBB and Moody's Investors Service to Baa1 from
Baa2.
NEW ACCOUNTING STANDARDS
The Company adopted the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 114 "Accounting by Creditors for Impairment of a Loan"
("SFAS 114"), as amended by SFAS No. 118 "Accounting by Creditors for
Impairment of a Loan - Income Recognition and Disclosures" ("SFAS 118"), as of
January 1, 1995. These statements require that impaired loans be measured
based on the present value of the expected cash flows discounted at the loan's
effective interest rate or the fair value of the collateral, if the loan is
collateral dependent. Under SFAS 114, a loan is considered impaired when,
based on current information and events, it is probable that a creditor will be
unable to collect all amounts due according to the contractual terms of the
loan agreement. For the impact and disclosures of these new standards, see
Notes B and C to Interim Condensed Consolidated Financial Information.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
OMITTED.
9
<PAGE> 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) The following exhibits are filed herewith:
<TABLE>
<CAPTION>
Exhibit No. Document
----------- --------
<S> <C>
12 Computation of Ratio of Income to Combined Fixed
Charges and Preferred Stock Dividends (interim period).
27 Financial Data Schedule.
</TABLE>
(b) Reports on Form 8-K:
A Report on Form 8-K dated June 5, 1995 was filed by Registrant
which reported under Item 7 the Underwriting and Pricing Agreement,
each dated June 5, 1995, between the Registrant and Morgan Stanley &
Co., Inc., the Officers' Certificate, dated June 9, 1995, without
exhibits, pursuant to Section 2.02 of the Indenture and The Chase
Manhattan Bank, N.A., establishing the terms of the Registrant's
6.45% Notes due June 1, 2000 and a Specimen certificate evidencing
the Notes.
A Report on Form 8-K dated July 19, 1995 was filed by Registrant
which reported under Items 5 and 7 the revenues, net income and
selected financial data and ratios for the second quarter ended June
30, 1995 (unaudited).
10
<PAGE> 13
FINOVA CAPITAL CORPORATION
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.
FINOVA CAPITAL CORPORATION
(Registrant)
Dated: August 4, 1995 By: /s/ Bruno A. Marszowski
-----------------------------------------------
Bruno A. Marszowski, Senior Vice President -
Chief Financial Officer and Controller
Principal Accounting Officer/Authorized Officer
11
<PAGE> 14
FINOVA CAPITAL CORPORATION
COMMISSION FILE NUMBER 1-7543
EXHIBIT INDEX
JUNE 30, 1995 FORM 10-Q
<TABLE>
<CAPTION>
No. Title
---- -------------------------------------------------------------
<S> <C>
(12) Computation of Income to Combined Fixed Charges and Preferred
Stock Dividends
(27) Financial Data Schedule
</TABLE>
12
<PAGE> 1
EXHIBIT 12
FINOVA CAPITAL CORPORATION
Computation of Ratio of Income to Combined Fixed Charges
and Preferred Stock Dividends
(Dollars in Thousands)
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, December 31,
------------------- ------------------------------
1995 1994 1994 1993 1992
------------------- ------------------------------
<S> <C> <C> <C> <C> <C>
Net income before income
taxes $ 74,876 $ 49,221 $123,755 $ 64,123 $ 50,593
Add fixed charges:
Interest expense 174,721 87,509 222,929 126,152 136,107
One-third rentals 1,147 933 2,041 1,387 1,498
-------- -------- -------- -------- --------
Total fixed charges 175,868 88,442 224,970 127,539 137,605
-------- -------- -------- -------- --------
Net income as adjusted $250,744 $137,663 $348,725 $191,662 $188,198
-------- -------- -------- -------- --------
Ratio of income to fixed
charges 1.43 1.56 1.55 1.50 1.37
======== ======== ======== ======== ========
Preferred stock dividends
on a pre-tax basis $ 0 $ 930 $ 930 $ 3,682 $ 2,826
Total combined fixed
charges and preferred
stock dividends $175,868 $ 89,372 $225,900 $131,221 $140,431
-------- -------- -------- -------- --------
Ratio of income to combined
fixed charges and preferred
stock dividends 1.43 1.54 1.54 1.46 1.34
======== ======== ======== ======== ========
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-END> JUN-30-1995
<CASH> 25,007
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 6,159,394
<ALLOWANCE> 115,431
<TOTAL-ASSETS> 6,357,447
<DEPOSITS> 0
<SHORT-TERM> 0
<LIABILITIES-OTHER> 494,732
<LONG-TERM> 5,044,834
<COMMON> 25
0
0
<OTHER-SE> 817,856
<TOTAL-LIABILITIES-AND-EQUITY> 6,357,447
<INTEREST-LOAN> 359,450
<INTEREST-INVEST> 0
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 174,721
<INTEREST-DEPOSIT> 0
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<INTEREST-INCOME-NET> 158,818
<LOAN-LOSSES> 18,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 72,995
<INCOME-PRETAX> 74,876
<INCOME-PRE-EXTRAORDINARY> 0
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<NET-INCOME> 45,997
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 5.8
<LOANS-NON> 164,271
<LOANS-PAST> 0
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<ALLOWANCE-OPEN> 122,233
<CHARGE-OFFS> (15,867)
<RECOVERIES> 1,289
<ALLOWANCE-CLOSE> 127,737
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
