<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
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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
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 847/564-5000
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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, 1995
and 1994.
Item 7. Financial Statements and Exhibits
(a) Financial statements of business acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
No. Exhibit
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27 Financial Data Schedule.
99 Selected unaudited financial statements with
respect to operations of Household Finance
Corporation as of and for the years ended
December 31, 1995 and 1994.
<PAGE>
<PAGE> 3
SIGNATURE
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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
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(Registrant)
By: /s/ David A. Schoenholz
-----------------------
David A. Schoenholz
Vice President,
Chief Accounting Officer and
Chief Financial Officer,
(a Principal Financial Officer),
Director and on behalf of
Household Finance Corporation
Dated: February 14, 1996
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EXHIBIT INDEX
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Exhibit
No. Exhibit
- ------- -------
27 Financial Data Schedule.
99 Selected unaudited financial statements with respect to
operations of Household Finance Corporation as of and for
the years ended December 31, 1995 and 1994.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FOLLOWING SUMMARY FINANCIAL INFORMATION OF THE COMPANY AND ITS
SUBSIDIARIES IS QUALIFIED IN ITS ENTIRETY BY THE DETAILED INFORMATION
AND FINANCIAL STATEMENTS PREVIOUSLY FILED WITH THE SECURITIES &
EXCHANGE COMMISSION.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 154,700
<SECURITIES> 3,233,000
<RECEIVABLES> 12,435,500
<ALLOWANCES> 866,000
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 639,800
<DEPRECIATION> 353,600
<TOTAL-ASSETS> 17,793,400
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 8,257,500
<COMMON> 1
0
100,000
<OTHER-SE> 2,137,099
<TOTAL-LIABILITY-AND-EQUITY> 17,793,400
<SALES> 0
<TOTAL-REVENUES> 3,189,600
<CGS> 0
<TOTAL-COSTS> 1,416,800
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 511,000
<INTEREST-EXPENSE> 824,600
<INCOME-PRETAX> 437,200
<INCOME-TAX> 175,400
<INCOME-CONTINUING> 261,800
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 261,800
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>FINANCIAL STATEMENTS OF THE COMPANY WERE PREPARED IN ACCORDANCE WITH
FINANCIAL INSTITUTION INDUSTRY STANDARDS. ACCORDINGLY, THE COMPANY'S
BALANCE SHEETS WERE NON-CLASSIFIED.
</FN>
</TABLE>
<PAGE> 1
EXHIBIT 99
HOUSEHOLD FINANCE CORPORATION AND SUBSIDIARIES
STATEMENTS OF INCOME
In millions.
Year ended December 31 1995 1994
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Finance income $1,724.6 $1,496.8
Interest income from noninsurance
investment securities 33.9 38.7
Interest expense 824.6 618.2
- -----------------------------------------------------------------
Net interest margin 933.9 917.3
Provision for credit losses on
owned receivables 511.0 435.9
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Net interest margin after provision
for credit losses 422.9 481.4
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Securitization income 407.8 301.9
Insurance premiums and contract
revenues 251.7 228.3
Investment income 453.8 505.8
Fee income 125.2 83.1
Other income 192.6 74.3
- -----------------------------------------------------------------
Total other revenues 1,431.1 1,193.4
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Salaries and fringe benefits 324.6 236.7
Other operating expenses 639.9 633.4
Policyholders' benefits 452.3 444.7
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Total costs and expenses 1,416.8 1,314.8
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Income before income taxes 437.2 360.0
Income taxes 175.4 103.6
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Net income $ 261.8 $ 256.4
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HOUSEHOLD FINANCE CORPORATION AND SUBSIDIARIES
BALANCE SHEETS
In millions.
At December 31 1995 1994
- -----------------------------------------------------------------
ASSETS
Cash $ 154.7 $ 97.3
Investment securities (fair value
of $3,233.0 and $7,205.7) 3,233.0 7,249.6
Receivables, net 12,665.0 10,476.3
Assets pending sale - 398.3
Advances to parent company
and affiliates 119.6 482.3
Deferred insurance policy
acquisition costs 5.6 621.4
Acquired intangibles 418.7 357.2
Properties and equipment 286.2 211.5
Real estate owned 105.6 124.6
Other assets 805.0 992.9
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Total assets $17,793.4 $21,011.4
=================================================================
LIABILITIES AND SHAREHOLDER'S EQUITY
Debt:
Commercial paper, bank and other
borrowings $ 4,154.2 $ 3,800.6
Senior and senior subordinated
debt (with original
maturities over one year) 8,257.5 7,728.3
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Total debt 12,411.7 11,528.9
Insurance policy and claim reserves 2,212.9 6,643.4
Other liabilities 931.7 880.0
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Total liabilities 15,556.3 19,052.3
Preferred stock 100.0 100.0
Common shareholder's equity 2,137.1 1,859.1
- -----------------------------------------------------------------
Total liabilities and
shareholder's equity $17,793.4 $21,011.4
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SALE OF PRODUCT LINES
In October 1995, the Company sold the individual life and annuity
product lines of the Individual Life Insurance segment for $525
million in cash and $50 million of preferred stock of the
purchaser. Assets sold related to these product lines totaled
approximately $6.1 billion and consisted primarily of investment
securities. For the first nine months of 1995, these sold product
lines generated approximately $400 million of revenues and earned
approximately $35 million of net income. The Company estimates
that net interest margin would have increased by approximately $18
million after tax had the company reinvested the proceeds from the
sale to repay debt assuming the sale had occurred as of the
beginning of the year.
INVESTMENT SECURITIES
1995 1994
- ----------------------------------------------------------------------
In millions. Carrying Fair Carrying Fair
At December 31 Value Value Value Value
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TRADING INVESTMENTS
Government securities and other - - $ 2.9 $ 2.9
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AVAILABLE-FOR-SALE INVESTMENTS
Marketable equity securities $ 323.8 $ 323.8 53.9 53.9
Corporate debt securities 1,533.6 1,533.6 2,545.9 2,545.9
Government debt securities 99.2 99.2 211.3 211.3
Mortgage-backed securities 195.8 195.8 817.9 817.9
Policy loans 821.4 821.4 - -
Other 222.9 222.9 62.5 62.5
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Subtotal 3,196.7 3,196.7 3,691.5 3,691.5
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HELD-TO-MATURITY INVESTMENTS
Corporate debt securities - - 1,827.4 1,818.3
Government debt securities - - 23.1 20.6
Mortgage-backed securities - - 1,063.1 1,041.9
Mortgage loans on real estate - - 161.9 158.5
Policy loans - - 72.7 72.7
Other - - 298.1 290.4
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Subtotal - - 3,446.3 3,402.4
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Accrued investment income 36.3 36.3 108.9 108.9
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Total investment securities $3,233.0 $3,233.0 $7,249.6 $7,205.7
======================================================================
Because of the disposition of the individual life and annuity
product lines and the Company's decision to discontinue its
remaining life insurance product lines, the Company reassessed the
classification of the remaining held-to-maturity portfolio and
reclassified the entire held-to-maturity investment portfolio to
available-for-sale in the fourth quarter of 1995.<PAGE>
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RECEIVABLES
In millions.
At December 31 1995 1994
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Home equity $ 2,072.1 $ 1,570.4
Visa*/MasterCard* 3,596.7 2,663.0
Merchant participation 2,753.7 1,843.4
Other unsecured 2,786.3 2,865.9
Commercial 1,226.7 1,208.5
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Total owned receivables 12,435.5 10,151.2
Accrued finance charges 241.0 176.5
Credit loss reserve for
owned receivables (531.8) (413.7)
Unearned credit insurance premiums
and claims reserves (78.4) (45.9)
Amounts due and deferred from
receivables sales 932.9 789.9
Reserve for receivables serviced
with limited recourse (334.2) (181.7)
- ----------------------------------------------------------------
Total owned receivables, net 12,665.0 10,476.3
Receivables serviced with
limited recourse 9,212.1 7,808.8
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Total managed receivables, net $21,877.1 $18,285.1
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*Visa and MasterCard are registered trademarks of VISA USA, Inc.
and MasterCard International, Incorporated, respectively.
