<PAGE> 1
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 14, 1996
-----------------
HOUSEHOLD FINANCE CORPORATION
-----------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-75 36-1239445
- --------------------------------------------------------------
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation Number)
2700 Sanders Road, Prospect Heights, Illinois 60070
- ---------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 847/564-5000
------------<PAGE>
<PAGE> 2
Item 5. Other Events
Effective October 1, 1995, Household Group, Inc. ("HGI"),
a wholly-owned subsidiary of Household Finance Corporation
("HFC"), sold for cash and stock all the capital stock of
its wholly-owned subsidiary, Alexander Hamilton Life
Insurance Company of America ("AHLIC") to Jefferson-Pilot
Corporation ("JP"). Prior to the closing of this
transaction, HGI removed from AHLIC and retained all
business, related assets and liabilities pertaining to
AHLIC's credit life, accident and health, periodic payment
and corporate-owned life insurance products so that
effectively only the individual life and annuity product
lines ("Transferred Business") were transferred to JP
pursuant to this transaction. At sale date, assets related
to the Transferred Business totaled approximately $6.1
billion and consisted primarily of investment securities.
The purchase price for the Transferred Business was $575
million.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
(a) Financial statements of business acquired.
Not applicable.
(b) Pro forma financial information.
Unaudited pro forma consolidated statement of income
of Household Finance Corporation and Subsidiaries for
the year ended December 31, 1995 giving effect to the
pro forma adjustments related to the sale of Alexander
Hamilton Life Insurance Company of America as
described in Item 5 hereof. The unaudited pro forma
consolidated statement of income of Household Finance
Corporation and Subsidiaries for the year ended
December 31, 1994 was included in the Current Report
on Form 8-K dated August 9, 1995.
<PAGE>
<PAGE> 3
The following table presents the historical unaudited consolidated
statement of income for Household Finance Corporation and
Subsidiaries ("HFC") for the year ended December 31, 1995 and the
unaudited pro forma consolidated statement of income for the year
ended December 31, 1995 for HFC giving effect to the pro forma
adjustments related to the sale of the individual life and annuity
product lines of Alexander Hamilton Life Insurance Company of
America ("AHLIC") as described herein. The pro forma consolidated
statement of income for the year ended December 31, 1995 was
prepared assuming the sale of the selected product lines of AHLIC
took place on January 1, 1995. HFC does not expect to incur
material charges or credits as a result of the sale of the product
lines of AHLIC on an ongoing basis and has not reflected such in
the pro forma consolidated financial statements below.
For purposes of preparing the pro forma financial statements, HFC
has assumed the cash proceeds from the sale of the product lines of
AHLIC have been used to decrease outstanding debt. The pro forma
consolidated financial statements presented below do not purport to
represent what the results of operations would have been had the
pro forma adjustments occurred on the dates referred to above or to
be indicative of the future results of operations of HFC. The pro
forma adjustments are based on available information and certain
assumptions that HFC believes are reasonable.<PAGE>
<PAGE> 4
Household Finance Corporation and Subsidiaries
Pro Forma Unaudited Consolidated Statements of Income
Year Ended December 31, 1995
In millions.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Historical Household
Household Finance
Finance Pro Forma Other Corporation
Corporation Adjustments Adjustments Pro Forma
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Finance income $1,724.6 $1,724.6
Interest income from noninsurance
investment securities 33.9 $ 2.8 (1) 36.7
Interest expense 824.6 (24.8)(2) 799.8
- ------------------------------------------------------------------------------------------
Net interest margin 933.9 27.6 961.5
Provision for credit losses on
owned receivables 511.0 511.0
- ------------------------------------------------------------------------------------------
Net interest margin after provision
for credit losses 422.9 27.6 450.5
- ------------------------------------------------------------------------------------------
Securitization income 407.8 407.8
Insurance premiums and contract
revenues 251.7 $ (93.0)(3) 158.7
Investment income 453.8 (299.5)(3) 154.3
Fee income 125.2 125.2
Other income 192.6 (50.2)(3) 142.4
- ------------------------------------------------------------------------------------------
Total other revenues 1,431.1 (442.7) 988.4
- ------------------------------------------------------------------------------------------
Salaries and fringe benefits 324.6 (16.6)(3) 308.0
Other operating expenses 639.9 (67.0)(3) 572.9
Policyholders' benefits 452.3 (263.1)(3) 189.2
- ------------------------------------------------------------------------------------------
Total costs and expenses 1,416.8 (346.7) 1,070.1
- ------------------------------------------------------------------------------------------
Income before income taxes 437.2 (96.0) 27.6 368.8
Income taxes 175.4 (61.2)(4) 9.7 (4) 123.9
- ------------------------------------------------------------------------------------------
Net income $ 261.8 $ (34.8) $ 17.9 $ 244.9
==========================================================================================
</TABLE>
Explanation of pro forma adjustments:
(1) Represents investment income from January 1, 1995 through October 1,
1995 on proceeds received in the form of preferred stock from the sale
of certain product lines of AHLIC.
(2) Represents reduction of interest expense from January 1, 1995 through
October 1, 1995 from use of cash proceeds from the sale of certain
product lines of AHLIC to reduce outstanding debt.
(3) Represents the reduction of income and expenses related to the sale of
certain product lines of AHLIC from January 1, 1995 through October 1,
1995 had the sales of assets and liabilities taken place on January 1,
1995.
(4) Represents the net effect of the pro forma adjustments at statutory
income tax rates, adjusted for the additional tax impact of the sale
of certain product lines of AHLIC.
<PAGE>
<PAGE> 5
SIGNATURE
---------
Pursuant to the requirement 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
-----------------------------
(Registrant)
By: /s/ David A. Schoenholz
-----------------------
David A. Schoenholz
Vice President -
Chief Accounting Officer and
Chief Financial Officer,
Director and on behalf of
Household Finance Corporation
Dated: February 14, 1996
-----------------
