February 15, 1995
OFIS Filer Support
Mail Stop 0-7
SEC Operations Center
6432 General Green Way
Alexandria, VA 22312-2413
RE: Form 10-K
Dollar Finance, Inc.
Gentlemen:
In compliance with filing requirements, Dollar Finance, Inc. is electronically
submitting Form 10-K for the fiscal year ending November 30, 1994.
I can be reached at (412) 261-8166 if there is a problem receiving this
transmission.
Very truly yours,
Thomas A. Kobus
Treasurer
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended: Commission File No:
November 30, 1994 2-96733
DOLLAR FINANCE, INC.
(Exact name of Registrant as specified in its charter)
Delaware 51-0284188
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
1105 North Market Street
Box 8985
Wilmington, Delaware 19899
(Address of principal executive offices with zip code)
Registrant's telephone number, including area code: (302) 427-7650
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 [ ]
All shares of the voting stock are held by an affiliate of the registrant.
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at February 15, 1994
------------------------------ ----------------------------
Common Stock, $1.00 par value 60 shares
<PAGE>
DOLLAR FINANCE, INC.
Form 10-K Index
Page No.
Part I
- - - - - ------
Item l - Business . . . . . . . . . . . . . . . . . . . . . . . 3
Item 2 - Properties . . . . . . . . . . . . . . . . . . . . . . 5
Item 3 - Legal Proceedings . . . . . . . . . . . . . . . . . . . 5
Item 4 - Submission of Matters to a Vote
of Security Holders . . . . . . . . . . . . . . . . . 5
Part II
- - - - - -------
Item 5 - Market for Registrant's Common Equity
and Related Security Holder Matters . . . . . . . . . 6
Item 6 - Selected Financial Data . . . . . . . . . . . . . . . . 7
Item 7 - Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . . . . . 8
Item 8 - Financial Statements and Supplementary Data . . . . . . 10
Item 9 - Changes In and Disagreements with
Accountants on Accounting and Financial
Disclosure . . . . . . . . . . . . . . . . . . . . . . 23
Part III
- - - - - --------
Item 10 - Directors and Executive Officers of
the Registrant . . . . . . . . . . . . . . . . . . . . 24
Item 11 - Executive Compensation . . . . . . . . . . . . . . . . 25
Item 12 - Security Ownership of Certain Beneficial
Owners and Management . . . . . . . . . . . . . . . . 25
Item 13 - Certain Relationships and Related
Transactions . . . . . . . . . . . . . . . . . . . . . 25
Part IV
- - - - - -------
Item 14 - Exhibits, Financial Statement Schedules
and Reports on Form 8-K . . . . . . . . . . . . . . . 26
<PAGE>
PART I
Item l - Business
--------
Description of Business
- - - - - -----------------------
Dollar Finance, Inc. (the "Registrant") is a Delaware Corporation
incorporated on March 22, 1985 for the limited purpose of issuing shares of
Market Auction Preferred Stock ("MAPS") and managing certain required
assets. The business of Registrant is to purchase, acquire, own, hold,
invest in, sell, trade and exchange required assets and to use the income
generated by such required assets to pay dividends on its shares of MAPS and
on its common stock and to acquire additional required assets. Such assets
may include cash, Federal National Mortgage Association ("FNMA") mortgage
pass-through certificates, Federal Home Loan Mortgage Corporation ("FHLMC")
mortgage participation certificates, Government National Mortgage
Association ("GNMA") modified pass-through mortgage-backed certificates,
certain short-term money market instruments, U.S. Treasury Securities and
certain other securities not adversely affecting the current rating on the
shares of MAPS by Moody's and Standard & Poors.
All of the 60 outstanding shares of common stock of Registrant are
owned by Dollar Bank, a federal mutual savings bank located in Pittsburgh,
Pennsylvania. Registrant was organized pursuant to a regulation of the
Federal Home Loan Bank Board which authorized a federal savings bank to
establish a finance subsidiary subject to certain conditions and limitations
set forth in the regulation. Registrant is subject to examination by the
Office of Thrift Supervision. The shares of MAPS are not guaranteed by
Dollar Bank or any affiliate of Registrant or insured by the Federal Deposit
Insurance Corporation ("FDIC") or any other government agency or
instrumentality.
The initial capitalization of Registrant occurred on March 28, 1985
when Dollar Bank purchased 100 shares of common stock for $10,000 in cash
and subsequently contributed an additional $75,000 in cash to Registrant on
May 13, 1985. Dollar Bank contributed approximately $59,300,000 of required
assets to Registrant at market value on May 23, 1985, consisting of FNMA
certificates and GNMA certificates. On February 26, 1987, Registrant
purchased 40 shares of its outstanding common stock from Dollar Bank for
$30,000,000 in cash. Dollar Bank may, but has no obligation to, make
additional capital contributions to the Registrant, even if the required
asset coverage or the dividend coverage is not met. Any additional capital
contribution would be subject to Office of Thrift Supervision regulations
which limit the amount of assets that a federal savings bank may transfer or
make available to a finance subsidiary.
On May 28, 1985, Registrant issued 750 shares of Market Auction
Preferred Stock at a purchase price of $100,000 per share. From the
proceeds of the MAPS issue, net of underwriting costs, Registrant purchased
an additional $72,100,000 of required assets from Dollar Bank at market
value, consisting of FNMA, GNMA and FHLMC certificates, U.S. Treasury
securities and short-term instruments.
<PAGE>
The composition of the required assets may vary from time to time as a
result of economic factors and the Registrant's then-current investment
policies. Registrant's Certificate of Incorporation also authorizes it to
incur, under certain limited circumstances, secured and unsecured
indebtedness for borrowed money of an aggregate amount not exceeding
$5,000,000 and to incur additional indebtedness in the form of reverse
repurchase agreements.
Holders of the shares of MAPS are entitled to receive cumulative cash
dividends out of Registrant's retained earnings at the conclusion of each
dividend period, generally consisting of 49 days. The applicable dividend
rate for each dividend period subsequent to the initial period ended July
18, 1985 is determined by the result of auction procedures in which persons
determine to hold or offer to purchase or sell shares of MAPS based on the
dividend rates bid by them. An auction is held on the business day
preceding the first day of a dividend period. The maximum applicable
dividend rate that results from an auction will not be greater than 110%, or
under certain circumstances 125%, of the 60-day "AA" Composite Commercial
Paper Rate in effect on the date of the auction.
In order to protect the rights of the holders of MAPS, Registrant must
have required asset coverage and dividend coverage on each Evaluation date.
Evaluation dates occur on the date of original issue, each dividend payment
date and each date which is 25 days preceding the next dividend payment
date. Required asset coverage is that condition in which Registrant has
required assets (defined above) with a value equal to or greater than the
product of (a) $100,000 and (b) the number of shares of MAPS then
outstanding. The shares of MAPS are subject to mandatory redemption if the
required asset coverage is not met or restored as required or if any portion
of the dividends paid on MAPS constitute a return of capital for federal
income tax purposes. As of each Evaluation date, Registrant will calculate
the value of its U.S. Treasury securities and short-term money market
instruments maturing before the next dividend payment date and cash to
assure that their aggregate adjusted value is at least equal to the dividend
coverage amount for the dividend period (normally 49 days) at the applicable
dividend rate then in effect. Calculations used in determining the value of
required assets and adjusted value of dividend coverage assets are set forth
in the Registration Statement on Form S-11. Except as provided in
Registrant's Certificate of Incorporation and as required by law, the
holders of shares of MAPS will have no voting rights.
Registrant has the option of redeeming the shares of MAPS, in whole or
in part, on any dividend payment date, provided that the dividend payable on
such payment date has been declared by the Board of Directors before any
action is taken to redeem shares of MAPS. Registrant may not purchase or
sell shares of MAPS in an auction, but can purchase or sell any shares of
MAPS outside of an auction at any price, provided that Registrant is current
in the payment of dividends on the MAPS and the required asset coverage and
dividend coverage is met after giving effect to such purchase. Any shares
of MAPS redeemed, purchased or otherwise acquired by Registrant shall not be
reissued and shall be retired.
<PAGE>
Item 2 - Properties
----------
Registrant's principal executive office is located at 1105 North
Market Street, Wilmington, Delaware. Registrant rents office space at this
location and currently owns no property.
Item 3 - Legal Proceedings
-----------------
Registrant is not currently involved, nor has it been involved in any
legal proceedings since its inception.
Item 4 - Submission of Matters to a Vote of Security Holders
---------------------------------------------------
No matters were submitted to a vote of security holders of Registrant
during the of Registrant's fiscal year.
<PAGE>
PART II
Item 5 - Market for Registrant's Common Equity and Related
Security Holder Matters
-------------------------------------------------
All 60 shares of Registrant's $1.00 par value common stock currently
outstanding are owned by Dollar Bank, a federal savings bank, an affiliate
of Registrant. None of the common shares are traded on any stock exchange
or in the over-the-counter market.
As long as any shares of MAPS are outstanding, Registrant may not pay
any dividends on its common shares or engage in any other transaction
relating to its common stock, except if:
a. such transaction is on an Evaluation date;
b. the required asset coverage and dividend coverage
would be met immediately after the transaction as of
this Evaluation Date;
c. full cumulative dividends on MAPS for all past
dividend periods ended on or prior to this
Evaluation date have been declared and paid or set
aside for payment;
d. immediately after such transaction, Registrant would
have retained earnings of a least $7,500,000; and
e. Registrant has complied with any mandatory
redemption provision.
Registrant paid $15,000,000, $8,000,000, $10,000,000, $2,400,000 and
$7,200,000 in cash dividends on its common stock during fiscal 1992, 1990,
1989, 1987 and 1986 respectively, and has maintained the necessary retained
earnings level. No common stock dividends were paid in fiscal 1994, 1993,
1991 and 1988.
On February 26, 1987, Registrant purchased 40 of its 100 outstanding
shares of common stock from Dollar Bank for $30,000,000 in cash.
Copies of this 10-K filing are available to shareholders without
charge upon request. Contact: Treasurer of Dollar Finance, Inc., 1105
North Market Street, P.O. Box 8985, Wilmington, Delaware 19899.
<PAGE>
<PAGE>
<TABLE>
Item 6 - Selected Financial Data
-----------------------
($-In Thousands)
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended
11/30/94 11/30/93 11/30/92 11/30/91 11/30/90
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Interest Income $ 6,120 $ 6,178 $ 8,887 $ 11,345 $ 11,285
Non-Interest Income/(Loss) (566) 903 73 7,379 186
-------- -------- -------- -------- --------
5,554 7,081 8,960 18,724 11,471
Less: Expenses 2,114 2,336 3,213 4,091 4,068
-------- -------- -------- -------- --------
NET INCOME $ 3,440 $ 4,745 $ 5,747 $ 14,633 $ 7,403
======== ======== ======== ======== ========
Net Income Per Common Share $ 16 $ 45 $ 55 $ 176 $ 36
======== ======== ======== ======== ========
Net Income Per Common Share (based
on Net Income Less Preferred Stock
Dividends Paid and Accrued) $ 16 $ 45 $ 55 $ 176 $ 36
======== ======== ======== ======== ========
Preferred Stock Dividends Paid $ 2,168 $ 1,929 $ 2,174 $ 3,865 $ 5,219
Preferred Stock Dividends Accrued
but not Paid 334 142 253 205 33
-------- -------- -------- -------- --------
Total Preferred Stock Dividends $ 2,502 $ 2,071 $ 2,427 $ 4,070 $ 5,252
Common Stock Dividends Paid $ 0 $ 0 $ 15,000 $ 0 $ 8,000
Cash Dividends Per Common Share $ 0 $ 0 $ 250 $ 0 $ 133
<CAPTION>
At At At At At
11/30/94 11/30/93 11/30/92 11/30/91 11/30/90
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Total Assets $136,566 $135,676 $129,519 $138,190 $123,711
Total Equity Capital $122,416 $122,752 $118,837 $130,517 $119,954
Preferred Stock $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000
<FN>
Financial Statements for years through 1991 restated for the Adoption of FAS Statement No. 109 with the
cumulative effect of $3,723,000 determined as of 12/1/90. The Company also adopted FAS Statement No. 115
at November 30, 1993. Prior years were not restated. See Note 2 to the Financial Statements.
</TABLE>
<PAGE>
<PAGE>
Item 7 - Management's Discussion and Analysis of Financial
Condition and Results of Operations
-------------------------------------------------
Results of Operations:
- - - - - ---------------------
For the year ended November 30, 1994, Dollar Finance, Inc. ("Registrant")
reported net income of $3,440,000 or $16,000 per share after deducting
dividends on the shares of Market Auction Preferred Stock ("MAPS"). Net income
for fiscal 1993 was $4,745,000, or $45,000 per share after deducting MAPS
dividends and for fiscal year 1992, $5,747,000, or $55,000 per share after
deducting MAPS dividends. Operating income has consisted of interest earned
on required assets, including mortgage-backed securities, U.S. Treasury
securities and short-term money market instruments, consisting of commercial
paper, certificates of deposit, treasury bills and other time deposits.
Additional income/(loss) was recognized during 1994, 1993, and 1992 from
security transactions in which Registrant sold mortgage-backed securities back
to Dollar Bank at market value, resulting in gains/(losses) of $(565,962),
$902,975 and $72,557, respectively. These gains/(losses) are the result of
security sales undertaken by the Registrant in actively managing its investment
portfolio in light of changes in market interest rates.
Professional fee expense incurred during each year consisted largely of
broker commission charges of approximately $25,500 incurred on each MAPS
dividend payment date.
Retained earnings of Registrant have been reduced by the amount of MAPS
dividends paid and accrued during the three fiscal years. These dividends
amounted to $2,502,000 in 1994, $2,071,000 in 1993 and $2,427,000 in 1992. The
applicable dividend rates on MAPS dividends at November 30, 1994, 1993 and 1992
were 3.814%, 3.09% and 2.58%, respectively. Registrant's retained earnings
were also reduced during 1992 by a common stock dividend payment to Dollar Bank
of $15,000,000 on its shares of common stock. No common stock dividends were
paid during 1994 or 1993.
During 1993, Registrant changed its method of accounting for income taxes
from the deferred method to the liability method required by FASB Statement No.
109, "Accounting for Income Taxes". As permitted under the new rules, prior
years through 1990 were restated.
Retained earnings was restated to reflect the cumulative effect of the
change in accounting for income taxes as a result of retroactively applying
FASB Statement No. 109 to 1990.
The Company also adopted FASB Statement No. 115 during 1993. Retained
earnings for 1994 and 1993 is increased/(decreased) by approximately $(35,000)
and $1,241,000, respectively for the impact of applying FASB Statement No. 115,
which requires that the unrealized gains (losses) on investment securities
available for sale be recognized as a separate component of capital. The net
unrealized gain/(loss) for 1994 and 1993 of $(57,000) and $2,068,000 is shown
net of deferred federal income tax/(benefit) of $(22,000) and $827,000,
respectively.
<PAGE>
The deferred tax (benefit)/liability of $(22,000) and $827,000 represents
the taxes to be (refunded)/paid in future years on the temporary difference
between the financial statement and tax return values of investment securities
available for sale as of November 30, 1994 and 1993, respectively. For
financial statement purposes, these investment securities have been recorded
at market value in accordance with FASB Statement No. 115. For tax purposes
they are carried at net book value. The deferred tax (benefit)/liability
reflected in fiscal 1994 and 1993 is not included in the total tax provision
for the year since, in accordance with Statement 115 it is properly reflected
as a component of equity capital, and consequently has no impact on net income
for the year.
Management expects the yield recognized on the required assets of
Registrant to continue to exceed the applicable dividend rate on MAPS
dividends, which averaged 3.34% on the liquidation value of each share during
fiscal 1994.
Liquidity:
- - - - - ---------
The principal sources of short-term liquidity are principal and interest
generated from the investment in Registrant's short-term assets and mortgage-
backed securities. The Registrant also manages its liquidity position by
maintaining adequate levels of liquid assets, such as time deposits and
securities available for sale. Additional liquidity is available through the
Registrant's ability to incur, under certain limited circumstances, secured and
unsecured indebtedness for borrowed money of an aggregate amount not exceeding
$5,000,000 and to incur additional indebtedness in the form of reverse
repurchase agreements.
Registrant possesses dividend coverage assets consisting of short-term
money market instruments with remaining maturities not in excess of the number
of days until the next MAPS dividend payment, and cash. As of each Evaluation
date, Registrant will calculate the aggregate adjusted value of its dividend
coverage assets to assure that this value is at least equal to the required
dividend coverage amount. Registrant is required to maintain required assets
with a market value in excess of the product of the current liquidation value
per share and the number of MAPS shares outstanding. This requirement provides
long-term liquidity necessary for any future redemption of MAPS shares.
The Registrant does not anticipate that changes in tax legislation in
1993 will have any material impact on its liquidity position.
<PAGE>
Item 8 - Financial Statements and Supplementary Data
-------------------------------------------
Index to Financial Statements
-----------------------------
Page No.
-----
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . 11
Financial Statements:
Statements of Condition, November 30, 1994 and
November 30, 1993 . . . . . . . . . . . . . . . . . . . . . . 12
Statements of Earnings, For the Years Ended
November 30, 1994, November 30, 1993, and
November 30, 1992 . . . . . . . . . . . . . . . . . . . . . . 13
Statements of Changes in Equity Capital, For the
Years Ended November 30, 1994, November 30, 1993,
and November 30, 1992 . . . . . . . . . . . . . . . . . . . . 14
Statements of Cash Flows, For the Years Ended
November 30, 1994, November 30, 1993, and
November 30, 1992 . . . . . . . . . . . . . . . . . . . . . . 15
Notes to Financial Statements . . . . . . . . . . . . . . . . 16
<PAGE>
Ernst & Young
One Oxford Centre
Pittsburgh, PA 15219
Phone: (412) 644-7800
Independent Auditor's Report
Board of Directors
Dollar Bank, Inc.
We have audited the financial statements of Dollar Finance, Inc., a wholly-
owned subsidiary of Dollar Bank, a federal savings bank, listed in the
accompanying index to financial statements on page 10. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements listed in the accompanying index to
financial statements on page 10 present fairly, in all material respects, the
financial position of Dollar Finance, Inc. at November 30, 1994 and 1993, and
the results of its operations and its cash flows for each of the three years
in the period ended November 30, 1994 in conformity with generally accepted
accounting principles.
As discussed in Note 2 to the financial statements, in 1993 the Company changed
its method of accounting for investment securities.
Ernst & Young
</PAGE>
<PAGE>
<PAGE>
<TABLE>
Dollar Finance, Inc.
Statements of Condition
($-In Thousands)
<CAPTION>
Nov. 30, 1994 Nov. 30, 1993
------------ -------------
<S> <C> <C>
ASSETS:
- - - - - -------------------------
Cash $ 17 $ 65
Time Deposits 16,496 6,237
Commercial Paper 18,120 0
U.S. Government Agency Securities 54,824 0
------------ -------------
Total Cash and Cash Equivalents 89,457 6,302
Mortgage-Related Securities Available for
Sale (Carried at Market Value) 22,166 126,423
Mortgage-Related Securities Held to
Maturity (Market Value of $22,256
in 1994) 22,904 0
---------- ------------
Total Mortgage-Related Securities 45,070 126,423
Accrued Interest Receivable 785 875
Security Receivable 1,232 2,076
Deferred Tax Asset 22 0
------------ -----------
Total Assets $ 136,566 $ 135,676
============ ============
LIABILITIES:
- - - - - ---------------------------
Accrued Preferred Stock Dividends $ 334 $ 142
Income Taxes Payable - Dollar Bank 13,816 11,955
Deferred Income Taxes 0 827
------------ -----------
Total Liabilities 14,150 12,924
EQUITY CAPITAL:
- - - - - ----------------------------
Preferred Stock (No par value, 750 shares
authorized, 750 shares issued and
outstanding, liquidation value per share,
$100,000) 750 750
Common Stock ($1.00 par value, 100 shares
authorized and 100 shares issued) 0 0
Additional Paid-In Capital/
Preferred Stock 74,250 74,250
Additional Paid-In Capital/Common Stock 59,386 59,386
Unrealized Gain(Loss) on Available for
Sale Securities, Net of Tax (33) 1,241
Retained Earnings 18,063 17,125
---------- ----------
152,416 152,752
Treasury Stock at Cost (40 shares at
November 30, 1994 and at November 30,
1993 (30,000) (30,000)
------------ ------------
Total Equity Capital 122,416 122,752
------------ ------------
Total Liability & Equity Capital $ 136,566 $ 135,676
============ ============
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
Dollar Finance, Inc.
Statements of Earnings
($-In Thousands)
<CAPTION> Year Ended Year Ended Year Ended
11/30/94 11/30/93 11/30/92
-------- ------- ----------
<S> <C> <C> <C>
INCOME:
- - - - - ----------------------
Short Term Investments:
Interest on U.S Government
Agency Securities $ 143 $ 0 $ 0
Interest on Commercial Paper 28 7 45
Interest on Time Deposits 414 396 385
Interest on U.S. Treasury Securities 186 0 0
------- ------ ------
Total Short Term Investments 771 403 430
Investment Securities:
- - - - - ----------------------
Interest on Mortgage-Backed Securities 5,349 5,775 8,457
------ ------ ------
Total Investment Securities 5,349 5,775 8,457
Other Income:
- - - - - -------------
Gains/(Losses) on Securities Transactions (566) 903 73
----- ----- -----
Total Income 5,554 7,081 8,960
EXPENSES:
- - - - - ---------------------
Occupancy 7 1 1
Professional Fees 252 263 241
Other Expenses 3 11 11
----- ----- -----
Total Expenses 262 275 253
----- ----- -----
INCOME BEFORE INCOME TAXES 5,292 6,806 8,707
Income Tax Expense - Federal 1,852 2,061 2,960
----- ----- -----
NET INCOME $3,440 $4,745 $5,747
====== ====== ======
Net Income Per Common Share (based on
Net Income Less Preferred Stock Dividends
Paid and Accrued) $ 16 $ 45 $ 55
====== ====== ======
Weighted Average Common Share
Outstanding 60 60 60
====== ===== ======
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<PAGE>
Dollar Finance, Inc.
Statement of Changes in Equity Capital
($-In Thousands - except dividends per share amounts)
<TABLE>
<CAPTION>
PREFERRED STOCK COMMON STOCK TREASURY STOCK
================================ ======================== ==================== ===================
Unrealized
Gain(Loss) on
Additional Additional Available for
Paid-In Paid-In Sale Secur. Retained
Shares Amount Capital Shares Amount Capital Net of Tax Earnings Shares Amount Total
------ ------ ---------- ------ ------ --------- ----------- -------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
11/30/91 750 $750 $74,250 100 0 $59,386 0 $26,131 (40) $(30,000) $130,517
1992 Activity
- - - - - -------------
Net Income 5,747 5,747
Preferred Stock
Dividends ($3,236.00)
per Share) (2,427) (2,427)
Common Stock Dividend
($250 per Share) (15,000) (15,000)
___ ____ ________ ___ ____ ________ ___________ ________ _____ _________ ________
Balance at
11/30/92 750 $750 $74,250 100 0 $59,386 0 $ 14,451 (40) $(30,000) $118,837
1993 Activity
- - - - - -------------
Net Income $ 4,745 $ 4,745
Preferred Stock
Dividends ($2,761.33
per Share) (2,071) (2,071)
Unrealized Gain on Securities
Available for Sale ($2,068)
Net of Federal Income Tax ($827) 1,241 0 1,241
--- ---- -------- ---- ---- -------- ---------- --------- ----- ---------- ---------
Balance at
11/30/93 750 $750 $74,250 100 0 $59,386 1,241 17,125 (40) $(30,000) $122,752
1994 Activity
- - - - - -------------
Net Income 3,440 3,440
Preferred Stock
Dividend ($3,336.00
per Share) (2,502) (2,502)
Unrealized Loss on
Securities Available for
Sale ($2,123) Net of
Federal Income Tax
Benefit ($849) (1,274) 0 (1,274)
___ ____ ________ ____ ____ _________ _______ _______ _____ __________ _______
Balance at
11/30/94 750 $750 $74,250 100 0 $59,386 $(33) $18,063 (40) $(30,000) $122,416
<FN>
Fiscal year 11/30/92 restated for the adoption of FAS Statement 109.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
Dollar Finance, Inc.
Statements of Cash Flows
($-In Thousands)
<CAPTION> Year Ended Year Ended Year Ended
11/30/94 11/30/93 11/30/92
---------- ---------- ----------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net Income $ 3,440 $ 4,745 $ 5,747
Adjustments to Reconcile Net Income
to Net Cash Provided by Operating
Activities:
Accrued Preferred Stock Dividends (142) (253) (205)
Amortization of Discounts &
Premiums on Investment Securities 1,242 1,028 594
Decrease in Interest Receivable 90 143 245
Increase in Income Taxes Payable 1,861 1,526 2,961
Investment Securities (Gains)/
Losses 566 (903) (73)
----- ----- -----
NET CASH PROVIDED BY OPERATING
ACTIVITIES $ 7,057 $ 6,286 $ 9,269
INVESTING ACTIVITIES
Proceeds from Sales of Securities
Available for Sale 72,290 35,886 9,147
Principal Payments on Securities 29,046 38,350 26,958
Purchase of Investment Securities
Held to Maturity (23,914) 0 (64,731)
Purchase of Investment Securities
Available for Sale 0 (87,960) 0
(Increase)/Decrease in
Security Receivable 844 (579) 38,608
-------- ------- ------
NET CASH PROVIDED/(USED) BY
INVESTING ACTIVITIES 78,266 (14,303) 9,982
FINANCING ACTIVITIES
Cash Dividends Paid on
Preferred Stock (2,168) (1,929) (2,174)
Cash Dividends Paid on Common
Stock 0 0 (15,000)
------- ------ -------
NET CASH USED BY FINANCING
ACTIVITIES (2,168) (1,929) (17,174)
------- ----- -------
INCREASE/(DECREASE) IN CASH
AND CASH EQUIVALENTS 83,155 (9,946) 2,077
Cash and Cash Equivalents at
Beginning of Year 6,302 16,248 14,171
------- ------ ------
CASH AND CASH EQUIVALENTS
AT END OF YEAR $ 89,457 $ 6,302 $ 16,248
======== ======= =======
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<PAGE>
Dollar Finance, Inc.
Notes to Financial Statements
1. Summary of Significant Accounting Policies
------------------------------------------
The accounting and reporting policies and practices of Dollar
Finance, Inc., a wholly owned subsidiary of Dollar Bank, a
federal savings bank (Dollar Bank), follow generally accepted
accounting principles. The major reporting policies and
practices are summarized below.
Cash and Cash Equivalents
-------------------------
Cash and cash equivalents presented within the Statement of Cash
Flows include cash and short-term investments with original
maturities of less than 90 days.
Required Assets
---------------
Required assets may include cash, FNMA certificates, FHLMC
certificates, GNMA certificates, certain short-term money market
instruments, U.S. Treasury securities and other securities not
adversely affecting the current rating on the shares of Market
Auction Preferred Stock ("MAPS") by Moody's and Standard & Poors.
Money Market Investments
------------------------
Commercial paper is valued at cost, which is calculated as par
value less interest receivable at maturity. Cost closely
approximates market value due to the short-term nature of these
instruments. Certificates of deposit and other time deposits are
recorded at their purchase price.
Investment Securities
---------------------
Investment securities consist of mortgage-backed securities which
include FNMA pass-through certificates, FHLMC participation
certificates and GNMA modified pass-through certificates. As
outlined in Note 2, in 1994 and 1993 these instruments are stated
at market value if classified as available for sale, or cost,
adjusted for amortization of premiums and accretion of discounts
if held to maturity. Fair values are based on quoted market
prices, where available. If quoted market prices are not
available, fair values are based on quoted market prices of
comparable instruments.
Payments on mortgage-backed securities are received monthly and
are applied accordingly to interest income and principal
reduction. Transactions involving mortgage-backed securities are
accounted for on the identified certificate basis.
<PAGE>
Accrued Interest Receivable
---------------------------
Income to be received from interest payments on money market
investments and investment securities is accrued on a monthly
basis.
Accrued Preferred Stock Dividends
---------------------------------
Cash dividends on the shares of MAPS outstanding are accrued on
a monthly basis and charged against retained earnings at the
current applicable annual dividend rate determined through
auction procedures.
Net Income Per Common Share
---------------------------
Net income per common share is calculated by dividing (a) net
income less preferred stock dividends paid and accrued by (b) the
weighted average number of common shares outstanding during the
period.
2. Accounting Changes
------------------
In February 1992, the Financial Accounting Standards Board issued
Statement No. 109 "Accounting for Income Taxes." Dollar Finance
adopted the provisions of the standard in its 1993 financial
statements and restated its 1992 and 1991 financial statements.
In May 1993, the Financial Accounting Standards Board issued
Statement No. 115, "Accounting for Certain Investments in Debt
and Equity Securities." As permitted under the Statement, Dollar
Finance elected to adopt the provisions of the standard as of the
end of its fiscal year ending November 30, 1993. In accordance
with the Statement, prior period financial statements were not
restated to reflect the change in accounting principle. The
effect of adopting FAS No. 115 as of November 30, 1993, resulted
in a transfer of $124,355,000 of investment securities having a
fair value of $126,423,000, from held to maturity to available
for sale and an increase in retained earnings of $1,241,000, net
of Federal tax of $827,000. During fiscal 1994, the securities
available for sale declined $2,123,000 in market value resulting
in an unrealized loss of $55,000 and reduction in retained
earnings of $33,000 at November 30, 1994 net of Federal tax of
$22,000.<PAGE>
<PAGE>
Dollar Finance, Inc.
3. Investments
-----------
<TABLE>
The following is a comparison of book value to market value of short-term investments and investment securities at Nov. 30, 1994:
($-In Thousands)
<CAPTION>
Amount at
Which Issue
No. Principal Gross Gross is Carried
Title of Each Issue and of Amount of Cost of Unrealized Unrealized Market Value at on the Statement
Name of Issuer: Units Each Issue Each Issue Gains Losses Nov. 30, 1994 of Condition
- - - - - ----------------------- ----- ---------- ----------- ---------- ---------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS
Time Deposits:
- - - - - --------------
Harris Trust Euro 2 16,496 16,496 0 0 16,496 16,496
--- -------- -------- ------ ------- -------- --------
Total Time Deposits 2 $ 16,496 $ 16,496 $ 0 $ 0 $ 16,496 $ 16,496
========
Commercial Paper:
- - - - - ----------------
GECC Commercial Paper 2 18,120 18,120 0 0 18,120 18,120
--- ------- ------- ----- ------ -------- --------
Total Commercial Paper 2 $ 18,120 $ 18,120 $ 0 $ 0 $ 18,120 $ 18,120
========
U.S. Government Agency Securities:
- - - - - ---------------------------------
Federal Home Loan Disc. Notes 2 20,000 19,925 0 (15) 19,910 19,925
FHLMC Disc. Notes 1 15,000 14,945 0 (8) 14,937 14,945
FNMA Disc. Notes 2 20,000 19,954 0 (5) 19,949 19,954
--- ------- ------- ---- ---- -------- -------
2 $ 55,000 $ 54,824 $ 0 $(28) $ 54,796 $ 54,824
========
Securities Available for Sale:
- - - - - ------------------------------
FNMA Certificates 2 4,128 4,128 0 (8) 4,120 4,120
FHLMC Certificates 6 18,093 18,093 6 (53) 18,046 18,046
--- ------- ------- --- ------ ------- -------
8 $ 22,221 $ 22,221 $ 6 $ (61) $ 22,166 $ 22,166
========
Securities Held to Maturity:
- - - - - ---------------------------
FNMA Certificates 9 3,919 3,968 6 (144) 3,831 3,968
FHLMC Certificates 32 19,287 18,936 10 (520) 18,425 18,936
--- ------- ------ -- ----- ------ ------
41 $ 23,206 $ 22,904 16 $(664) $ 22,256 $ 22,904
========
</TABLE>
<PAGE>
<PAGE>
<TABLE>
The following is a comparison of book value to market value of short-term investments and investment securities at Nov. 30, 1993:
<CAPTION>
Which Issue
No. Principal Gross Gross is Carried
Title of Each Issue and of Amount of Cost of Unrealized Unrealized Market Value at on the Statement
Name of Issuer: Units Each Issue Each Issue Gains Losses Nov. 30, 1994 of Condition
- - - - - ----------------------- ----- ---------- ----------- ---------- ---------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS
Time Deposits:
- - - - - --------------
Harris Trust Euro 3 6,237 6,237 0 0 6,237 6,237
--- -------- -------- ------ ------- -------- --------
3 $ 6,237 $ 6,237 $ 0 $ 0 $ 6,237 $ 6,237
========
Securities Available for Sale:
- - - - - -----------------------------
FNMA Certificates 11 10,918 11,020 188 0 11,208 11,208
FHLMC Certificates 33 111,986 113,385 1,880 0 115,215 115,215
--- ------- ------- ------ ---- -------- -------
44 $122,904 $124,335 $2,068 $ 0 $126,423 $126,423
========
/TABLE
<PAGE>
<PAGE>
4. Capitalization
--------------
On March 28, 1985, Dollar Bank purchased all of the 100
authorized shares of Registrant's $l.00 par value common stock
for $10,000 in cash. Additional capital contributions from
Dollar Bank consisted of a $75,000 cash contribution on May 13,
1985 and a required asset contribution of approximately
$59,300,000 on May 23, 1985. The proceeds from these
contributions above the total par value were credited to
Additional Paid-in Capital from Common Stock. On May 28, 1985,
Registrant issued 750 shares of MAPS at a purchase price of
$100,000 per share. One thousand dollars per share of the MAPS
proceeds were credited to Registrant's Preferred Stock account
with the balance, net of underwriting costs, being credited to
Additional Paid-In Capital from Preferred Stock.
5. Common Stock and Dividend Restriction
-------------------------------------
Dollar Bank owns all 60 shares of Registrant's outstanding common
stock. No dividends may be paid on the common shares unless
Registrant would have retained earnings of at least $7,500,000
immediately after the payment of such dividends. The common
stock ranks junior to the MAPS with respect to payment of
dividends on liquidation or dissolution.
In October 1992, the Board of Directors of Registrant declared
and paid a cash dividend of $15,000,000 or $250,000 per share on
its common stock.
No cash dividends were paid on common stock during fiscal 1994 or
1993.
6. Market Auction Preferred Stock ("MAPS")
---------------------------------------
Description of MAPS
-------------------
The shares of MAPS have a liquidation preference of $100,000 per
share plus accrued and unpaid dividends. The MAPS shares are not
convertible into shares of common stock and have no pre-emptive
rights. The holders of MAPS are entitled to receive cumulative
cash dividends on the business day following the conclusion of
each dividend period, generally consisting of 49 days. The
applicable dividend rate per share for each dividend period is
determined through auction procedures. The applicable dividend
rate for each dividend period during fiscal 1994 (the dividend
payable on December 6, 1994 was accrued through November 30,
1994) was as follows:
November 9, 1993 - December 29, 1993 3.090%
December 30, 1993 - February 16, 1994 2.950%
February 17, 1994 - April 6, 1994 2.850%
April 7, 1994 - May 25, 1994 2.960%
May 26, 1994 - July 13, 1994 3.500%
July 14, 1994 - August 31, 1994 3.520%
September 1, 1994 - October 19, 1994 3.630%
October 20, 1994 - December 6, 1994 3.814%
<PAGE>
The maximum applicable rate that results from an auction will not
be greater than 110%, or under certain circumstances, 125% of the
60-day "AA" Composite Commercial Paper Rate in effect on the
auction date.
The MAPS shares are subject to mandatory redemption if (l) the
required asset coverage is not met or restored as required or (2)
any portion of the dividend payments on MAPS during a calendar
year constitutes a return of capital for federal income tax
purposes.
Registrant has the option of redeeming the MAPS shares on any
dividend payment date, in whole or in part, at the applicable per
share amounts previously noted, plus an amount equal to accrued
and unpaid dividends to the redemption date.
The holders of shares of MAPS have no voting rights except during
a period that (l) the required asset coverage is not maintained
or restored as required, (2) the aggregate amount of dividends in
arrears on a dividend payment date is equal to or greater than
the amount of dividends accrued during the dividend period
preceding such payment date, or if (3) Registrant has not
redeemed MAPS shares when required. Holders of shares of MAPS
have had no voting rights during the reporting period or during
any prior period.
Required Asset Coverage
-----------------------
As of each Evaluation date (approximately every 25 days),
Registrant must have required assets with a market value in
excess of the product of (a) $100,000; and (b) the number of MAPS
shares then outstanding. Registrant is obligated to maintain or
restore the number of MAPS shares necessary to maintain required
asset coverage as of each Evaluation date. Registrant has
maintained required asset coverage throughout fiscal 1994 and for
all prior periods.
Dividend Coverage
-----------------
As of each Evaluation date, the aggregate adjusted value of
Registrant's U.S. Treasury securities and short-term money market
instruments maturing before the next dividend payment date and
cash must at least equal the dividend coverage amount for 49 days
of dividends at the applicable dividend rate then in effect.
Registrant has maintained adequate dividend coverage throughout
fiscal 1994 and for all prior periods.
7. Security Transactions
---------------------
During fiscal 1994, Registrant purchased from Dollar Bank twenty-
two FHLMC fixed rate and three FHLMC adjustable rate certificates
with an aggregate book value of $23,913,908. Registrant also
purchased from Dollar Bank six U.S. government agency discount
notes with an aggregate book value of $69,670,433.
<PAGE>
Registrant sold to Dollar Bank twenty FHLMC adjustable rate
certificates with a net book value and market value of
$72,279,794 and $72,047,829, respectively. Proceeds from the
sale amounted to $72,209,117 and resulted in a net loss of
$565,962.
During fiscal 1993, Registrant purchased from Dollar Bank
thirteen FHLMC fixed rate and seven FHLMC adjustable rate
certificates with an aggregate book value of $87,686,000.
Registrant sold twenty-three FNMA fixed rate certificates and
eleven FHLMC fixed rate certificates with a net book value and
market value of $35,886,000 and $36,789,000, respectively.
Proceeds from the sales amounted to $36,927,000, and resulted in
a net gain of $903,000.
During fiscal 1992, Registrant purchased from Dollar Bank fifteen
FNMA adjustable rate certificates and twelve FHLMC adjustable
rate certificates with an aggregate book value of $64,731,000 and
sold nine FHLMC adjustable rate certificates with a net book
value and market value of $9,147,000 and $9,220,000,
respectively. Proceeds from the sales amounted to $9,370,000,
and resulted in a net gain of $73,000.
8. Income Taxes
------------
In February 1992, the Financial Accounting Standards Board issued
Statement No. 109, "Accounting for Income Taxes." As explained
in Note 2, the Registrant adopted the provisions of the standard
in its November 30, 1993 fiscal year and restated its 1992 and
1991 financial statements.
Under Statement No 109, the liability method is used in
accounting for income taxes. Under this method, deferred tax
assets and liabilities are determined based on differences
between financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws
that will be in effect when the differences are expected to
reverse.
The Registrant is included in the consolidated federal income tax
return of Dollar Bank. Statement 109 specifies that the amount
of current and deferred tax expense for a group that files a
consolidated tax return should be allocated among the members of
the group. The policy of the consolidated group is to allocate
its current and deferred taxes as if each member of the group
were a separate taxpayer not included in a consolidated tax
return.
The provision for income taxes for 1994, 1993, and 1992 consists
of the Registrant's net income before taxes and intercompany
securities gains at the statutory federal income tax rates. The
resulting tax expense is recorded on the Registrant's Statement
of Condition as intercompany payables to the Registrant's parent
corporation, Dollar Bank, net of amounts previously paid to the
parent.
<PAGE>
The deferred tax asset/(liability) for fiscal year ending
November 30, 1994 and 1993 of $22,000 and ($827,000),
respectively, represents the taxes to be refunded/(paid) in
future years on the temporary difference between the financial
statement and tax return values of investment securities
available for sale. For financial statement purposes these
investment securities have been recorded at market value per FASB
Statement No. 115 while for tax purposes they are carried at net
book value. The deferred tax asset/(liability) reflected in
fiscal 1994 and 1993, respectively, are not included in the total
tax provision for the year since, in accordance with Statement
115 it is properly reflected as a component of equity capital,
and consequently has no impact on net income for the year.
Reconciliation of the effective income tax rate with the
statutory Federal income tax rate is as follows:
Percent of Income
Before Income Taxes
-------------------
Year Ended November 30
1994 1993 1992
----------------------
Federal Income Tax Statutory Rate 35% 35% 34%
Intercompany Gain/(Loss) on Sale of
Securities; Eliminated for Federal
Tax Purposes 0 (5) 0
Other, Net 0 (1) 0
------------------------
Effective Rate 35% 29% 34%
======================
Item 9 - Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure
-------------------------------------------------
There have been no disagreements with accountants on accounting
and financial disclosure.
<PAGE>
PART III
Item 10 - Directors and Executive Officers of the Registrant
--------------------------------------------------
The following table identifies the Registrant's directors and executive
officers, their ages and their positions for the previous five years:
============================================================================
Positions with Principal Occupations
Name: Age: Registrant: since 12/01/85:
---- ---- -------------- ---------------------
Hay Walker 62 Chairman of the Retired since 1993;
Board; Director previously Executive Vice
President of Dollar Bank.
Robert P. Oeler 45 President; Executive Vice President
Director of Dollar Bank since 1992;
previously Senior Vice
President.
Thomas A. Kobus 42 Treasurer; Senior Vice President and
Director Treasurer of Dollar Bank
since 1992; previously
Vice President and
Treasurer.
Robert L. German 70 Vice President Vice President, Security-
and Assistant Columbian, Division, U.S.
Secretary; Banknote Company.
Director
Robert T. Messner 56 Secretary; Vice President, General
Director Counsel and Secretary for
Dollar Bank since 1986.
All directors were elected at the annual meeting of the holders
of Registrant's common stock to serve for a term of one year or
until their respective successors are elected and qualified.
The Registrant's Certificate of Incorporation requires that at
least one director and one executive officer (or one individual
serving in both capacities) of Registrant must not be a
director, officer or employee of any entity owning beneficially
more than 50% of the outstanding shares of common stock of
Registrant (currently Dollar Bank) or a director, officer or
employee of any such beneficial owner's subsidiaries or
affiliates other than Registrant. All investment and
management decisions are made for Registrant by its officers
under the direction of its Board of Directors.
<PAGE>
Item 11 - Executive Compensation
----------------------
Each director of Registrant is to receive an annual
compensation of $1,000, plus $100 for each meeting of the Board
of Directors attended. Officers will not be compensated by
Registrant for their services. Directors and officers are to
be reimbursed for expenses reasonably incurred in connection
with their services on behalf of Registrant. The Registrant's
By-Laws provide that directors and officers of Registrant may
be indemnified against liabilities incurred in connection with
their services on behalf of Registrant.
Item 12 - Security Ownership of Certain Beneficial
Owners and Management
-----------------------------------------
The following table lists any beneficial owner of more than 5% of the
outstanding common stock as of November 30, 1994:
Amount of Nature Percent
Name and Address of Beneficial of
Title of Class of Beneficial Owner Ownership Class
- - - - - -------------- ------------------- ---------------- --------
Common Stock Dollar Bank, a 60 Shares 100%
federal savings bank
Three Gateway Center
Pittsburgh, PA 15222
Item 13 - Certain Relationships and Related Transactions
----------------------------------------------
During fiscal 1994, Registrant sold 20 adjustable rate mortgage-
backed securities to Dollar Bank, a Federal Savings Bank, an
affiliate of the Registrant. The sale was recorded at market
value and a loss of $565,962 was recognized. Several securities
were purchased from Dollar Bank with an aggregate book and market
value of $93,584,341.
During fiscal 1993, Registrant sold 34 adjustable rate mortgage-
backed securities to Dollar Bank, a Federal Savings Bank, an
affiliate of the Registrant. The sale was recorded at market
value and a gain of $902,975 was recognized. Several securities
were purchased from Dollar Bank with an aggregate book value of
$87,686,000.
During fiscal 1992, the Registrant sold nine adjustable rate
mortgage-backed securities to Dollar Bank, a federal savings
bank, an affiliate of the Registrant. The sale was recorded at
market value and a gain of $72,556 was recognized. Several
securities were also purchased from Dollar Bank with an aggregate
book value of approximately $64,731,000.
<PAGE>
PART IV
Item 14 - Exhibits, Financial Statement Schedules
and Reports on Form 8-K
---------------------------------------
Page No.
--------
(a) (l) The following financial statements are included
in Part II, Item 8:
Financial Statements:
--------------------
Statements of Condition - November 30, 1994
and November 30, 1993 . . . . . . . . . . . . . 12
Statements of Earnings - For the Years Ended
November 30, 1994, November 30, 1993, and
November 30, 1992 . . . . . . . . . . . . . . . 13
Statements of Changes in Equity Capital - For
the Years Ended November 30, 1994, November 30,
1993, and November 30, 1992 . . . . . . . . . . 14
Statements of Cash Flows - For the Years Ended
November 30, 1994, November 30, 1993, and
November 30, 1992 . . . . . . . . . . . . . . . 15
Notes to Financial Statements . . . . . . . . . 16
(2) The information required to be filed on Schedule I - Marketable
Securities - Other Investments is included in the Notes to
Financial Statements on Pages 18 and 19. No other schedules
are applicable to the Registrant.
(3) Exhibits
3.l Certificate of Incorporation and By-Laws of the
Registrant, previously filed as Exhibits 3.l and
3.2 to the Registration Statement on Form S-11 are
hereby incorporated by reference.
4.l Form of Certificate of Designation for the
Registrant's Market Auction Preferred Stock
("MAPS"), previously filed as Exhibit 4 to the
Registration Statement on Form S-11 is hereby
incorporated by reference.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed by the Registrant
during the last quarter of the period covered by this
report.
PAGE
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
DOLLAR FINANCE, INC.
- - - - - ----------------------------- ---------------------------
By: Robert P. Oeler By: Thomas A. Kobus
President Treasurer
(Principal Executive (Principal Financial &
Officer) Accounting Officer)
Date: February 22, 1995 Date: February 22, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
- - - - - ----------------------- Chairman of the Board; Date: February 22, 1995
Hay Walker Director
- - - - - ----------------------- President; Director Date: February 22, 1995
Robert P. Oeler
- - - - - ----------------------- Treasurer; Date: February 22, 1995
Thomas A. Kobus Director
- - - - - ----------------------- Vice President and Date: February 22, 1995
Robert L. German Assistant Secretary;
Director
- - - - - ----------------------- Secretary; Director Date: February 22, 1995
Robert T. Messner
<PAGE>
Supplemental Information to be Furnished with Reports filed Pursuant to
- - - - - ------------------------------------------------------------------------
Section 15(d) of the Act by Registrants Which Have Not Registered
- - - - - -----------------------------------------------------------------
Securities Pursuant to Section 12 of the Act
- - - - - --------------------------------------------
The Registrant has not sent an annual report or
proxy material to its security holders, and does
not anticipate sending any such materials
subsequent to the filing of the Annual Report on
Form 10-K.
<PAGE>
Index to Exhibits
3.1 Certificate of Incorporation and By-Laws of the Registrant,
previously filed as Exhibits 3.l and 3.2 to the Registration
Statement on Form S-11 are hereby incorporated by reference.
4.1 Form of Certificate of Designation for the Registrant's Market
Auction Preferred Stock ("MAPS"), previously filed as Exhibit 4
to the Registration Statement on Form S-11 is hereby incorporated
by reference.<PAGE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<MULTIPLIER> 1,000
<CURRENCY> 0
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1994
<PERIOD-START> DEC-1-1993
<PERIOD-END> NOV-30-1994
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 135,574
<INVESTMENTS-AT-VALUE> 134,482
<RECEIVABLES> 0
<ASSETS-OTHER> 2,039
<OTHER-ITEMS-ASSETS> 17
<TOTAL-ASSETS> 136,565
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 14,150
<TOTAL-LIABILITIES> 14,150
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 59,385
<SHARES-COMMON-STOCK> 100
<SHARES-COMMON-PRIOR> 100
<ACCUMULATED-NII-CURRENT> 3,440
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (566)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 122,415
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 6,120
<OTHER-INCOME> 0
<EXPENSES-NET> 2,114
<NET-INVESTMENT-INCOME> 4,006
<REALIZED-GAINS-CURRENT> (566)
<APPREC-INCREASE-CURRENT>(1,276)
<NET-CHANGE-FROM-OPS> 889
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,168
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 100
<NUMBER-OF-SHARES-REDEEMED> 40
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 889
<ACCUMULATED-NII-PRIOR> 18,367
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 250
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,114
<AVERAGE-NET-ASSETS> 121,857
<PER-SHARE-NAV-BEGIN> 2,046,000
<PER-SHARE-NII> 66,766
<PER-SHARE-GAIN-APPREC> (9,433)
<PER-SHARE-DIVIDEND> 41,700
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 2,040,000
<EXPENSE-RATIO> 1.73
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
