FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: February 16, 1994
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HOUSEHOLD FINANCE CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-75 36-1239445
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(State or other (Commission (IRS Employer
jurisdiction of File Identification
incorporation) Number) Number)
2700 Sanders Road, Prospect Heights, Illinois 60070
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (708) 564-5000
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<PAGE>
Item 5. Other Events
Set forth in the Exhibit hereto is selected unaudited
financial information which presents the results of
operations for Household Finance Corporation (the
"company") as of and for the years ended December 31,
1993 and 1992.
Item 7. Financial Statements and Exhibits
(a) Financial statements of businesses acquired.
Not Applicable
(b) Pro forma financial information.
Not Applicable
(c) Exhibits.
No. Exhibit
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99 Selected unaudited financial statements
with respect to operations of Household
Finance Corporation as of and for the
years ended December 31, 1993 and 1992.
<PAGE>
Signature
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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 hereunto duly authorized.
HOUSEHOLD FINANCE CORPORATION
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(Registrant)
By: /s/ David A. Schoenholz
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David A. Schoenholz
Vice President-
Chief Financial Officer
(a Prinicpal Financial Officer)
and on behalf of Household
Finance Corporation
Dated: February 16, 1994
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U:\WP\HFSC98\EDGAR\F8K21694.WP <PAGE>
Exhibit Index
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Exhibit
No. Exhibit
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99 Selected unaudited financial statements with
respect to operations of Household Finance
Corporation as of and for the years ended
December 31, 1993 and 1992.
<PAGE> 1
EXHIBIT 99
HOUSEHOLD FINANCE CORPORATION AND SUBSIDIARIES
STATEMENTS OF INCOME
<TABLE>
In millions.
<CAPTION>
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Year ended December 31 1993 1992
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<S> <C> <C>
Finance income $1,318.1 $1,334.6
Interest income from noninsurance
investment securities 40.9 34.9
Interest expense 510.2 633.2
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Net interest margin 848.8 736.3
Provision for credit losses on owned
receivables 494.5 368.3
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Net interest margin after provision
for credit losses 354.3 368.0
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Securitization and servicing fee income 383.4 369.2
Insurance premiums and contract revenues 242.6 220.5
Investment income 552.1 492.2
Fee income 60.7 50.5
Other income 77.5 63.5
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Total other revenues 1,316.3 1,195.9
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Net interest margin after provision for
credit losses and other revenues 1,670.6 1,563.9
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Salaries and fringe benefits 221.9 234.7
Other operating expenses 603.7 513.3
Policyholders' benefits 517.2 484.1
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Total costs and expenses 1,342.8 1,232.1
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Income before income taxes 327.8 331.8
Income taxes 107.4 92.3
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Net income $ 220.4 $ 239.5
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/TABLE
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<PAGE> 2
HOUSEHOLD FINANCE CORPORATION AND SUBSIDIARIES
BALANCE SHEETS
<TABLE>
<CAPTION>
In millions. December 31
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ASSETS 1993 1992
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<S> <C> <C>
Cash $ 27.8 $ 48.7
Investment securities (fair value of
$7,317.8 and $6,124.7) 7,082.0 5,902.5
Finance and Banking receivables 9,338.4 8,459.7
Liquidating commercial assets 1,555.7 1,851.2
Advances to parent company and affiliates 361.7 393.3
Deferred insurance policy acquisition costs 381.6 453.4
Acquired intangibles 246.7 293.8
Properties and equipment 202.2 177.8
Assets acquired through foreclosure 171.9 191.3
Other assets 482.2 374.7
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Total assets $19,850.2 $18,146.4
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LIABILITIES AND SHAREHOLDER'S EQUITY
Debt:
Commercial paper, bank and other
borrowings $ 4,321.8 $ 4,217.9
Senior and senior subordinated debt (with
original maturities over one year) 6,813.7 6,601.5
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Total debt 11,135.5 10,819.4
Insurance policy and claim reserves 5,981.5 5,243.3
Other liabilities 942.7 556.4
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Total liabilities 18,059.7 16,619.1
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Preferred stock 100.0 150.0
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Common shareholder's equity 1,690.5 1,377.3
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Total liabilities and shareholder's equity $19,850.2 $18,146.4
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/TABLE
<PAGE>
<PAGE> 3
Investment Securities
Investment securities at December 31 were as follows
(in millions):
<TABLE>
<CAPTION>
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1993 1992
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Carrying Fair Carrying Fair
Value Value Value Value
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<S> <C> <C> <C> <C>
Trading investments:
Government securities and other $ 11.9 $ 11.9 $ 26.9 $ 26.9
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Available-for-sale investments:
Marketable equity securities:
Common stocks 18.5 18.5 10.7 10.7
Preferred stocks 57.7 57.7 67.7 67.7
Corporate securities 2,047.1 2,047.1 323.3 323.3
Government securities 326.1 326.1 82.3 82.3
Mortgage-backed securities 1,075.5 1,075.5 165.8 165.8
Other 296.7 296.7 - -
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Subtotal 3,821.6 3,821.6 649.8 649.8
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Held-to-maturity investments:
Corporate securities 1,739.0 1,930.7 2,838.4 2,980.8
Government securities 23.2 25.4 74.9 80.1
Mortgage-backed securities 772.3 809.0 1,558.4 1,618.5
Mortgage loans on real estate 222.4 226.0 351.0 365.7
Policy loans 81.6 81.6 75.2 75.2
Commercial paper 10.7 10.7 40.1 40.1
Other 299.7 301.3 194.0 193.8
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Subtotal 3,148.9 3,384.7 5,132.0 5,354.2
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Accrued investment income 99.6 99.6 93.8 93.8
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Total investment securities $7,082.0 $7,317.8 $5,902.5 $6,124.7
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</TABLE>
Effective December 31, 1993 the company adopted Statement of
Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" ("FAS No. 115"). In
accordance with FAS No. 115, investment securities in both the
noninsurance and insurance operations are classified in three
separate categories: trading, available-for-sale or held-to-
maturity. Trading investments are bought and held principally
for the purpose of selling them in the near term and are carried
at fair value. Adjustments to the carrying value of trading
investments are included in current earnings. Investments which
the company has the positive intent and ability to hold to
maturity are classified as held-to-maturity and carried at
amortized cost. Investments not classified as trading or held-
to-maturity are classified as available-for-sale. They are
intended to be invested for an indefinite period but may be sold
in response to events reasonably expected in the foreseeable
future. These investments are carried at fair value. Unrealized
holding gains and losses on available-for-sale investments are
recorded as adjustments to common shareholder's equity, net of
income taxes and, for certain investments of the insurance
operation, related unrealized deferred insurance policy
acquisition cost adjustments. Prior to the adoption of FAS No.
115, available-for-sale investments were carried at the lower of
aggregate amortized cost or market value, and any adjustments to
carrying value for the noninsurance operations were included in
earnings, while any adjustments to carrying value for the
insurance operations were included in shareholder's equity. Any
decline in the carrying values of available-for-sale or held-to-
maturity investments which are deemed to be other than temporary
are charged against current earnings.
<PAGE>
<PAGE> 4
Finance and Banking Receivables
Finance and Banking receivables at December 31 consisted of
the following (in millions):
<TABLE>
<CAPTION>
1993 1992
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<S> <C> <C>
Home equity $ 1,557.1 $ 1,569.6
Other secured 347.1 366.2
Bankcard 2,103.8 1,622.5
Merchant participation 2,054.4 1,548.3
Other unsecured 2,236.1 2,029.5
Equipment finance and other 661.4 720.7
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Receivables owned 8,959.9 7,856.8
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Accrued finance charges 167.4 155.7
Credit loss reserve for receivables owned (279.8) (220.0)
Unearned credit insurance premiums and
claims reserves (49.8) (45.7)
Amounts due and deferred from
receivables sales 675.2 873.8
Reserve for receivables serviced
with limited recourse (134.5) (160.9)
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Total receivables owned, net 9,338.4 8,459.7
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Receivables serviced with
limited recourse 7,131.1 7,946.9
Receivables serviced with no recourse 1,649.5 370.9
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Total receivables owned or serviced $18,119.0 $16,777.5
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</TABLE>
Liquidating Commercial Assets
Liquidating commercial assets at December 31 consisted of the
following (in millions):
<TABLE>
<CAPTION>
1993 1992
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<S> <C> <C>
Receivables:
Commercial real estate $ 297.1 $ 349.4
Acquisition finance and other 892.8 1,269.6
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Receivables owned 1,189.9 1,619.0
Accrued finance charges 9.2 12.1
Reserve for credit losses (172.9) (203.3)
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Total receivables owned, net 1,026.2 1,427.8
Real estate owned 256.6 249.6
Other assets 272.9 173.8
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Total liquidating commercial assets $1,555.7 $1,851.2
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</TABLE>
