SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
------------------
FORM 10-Q
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x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Commission file number 0-13497
PITNEY BOWES CREDIT CORPORATION
Incorporated pursuant to the Laws of the State of Delaware
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Internal Revenue Service -- Employer Identification No. 06-0946476
27 Waterview Drive, Shelton, CT 06484-4361
(203) 922-4000
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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 o
As of May 8, 1998, 460 shares of common stock, no par value, with a stated value
of $100,000 per share, were outstanding, all of which were owned by Pitney Bowes
Inc., the parent of the Registrant.
REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b)
OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE
FORMAT.
<PAGE>
PITNEY BOWES CREDIT CORPORATION
<TABLE>
PART I -- FINANCIAL INFORMATION
ITEM 1. -- FINANCIAL STATEMENTS
Consolidated Statement of Income:
<S> <C>
Three Months Ended March 31, 1998 and 1997.......................................... 3
Consolidated Balance Sheet:
March 31, 1998 and December 31, 1997................................................ 4
Consolidated Statement of Cash Flows:
Three Months Ended March 31, 1998 and 1997.......................................... 5
Notes to Consolidated Financial Statements............................................ 6
ITEM 2. -- MANAGEMENT'S NARRATIVE ANALYSIS OF
THE RESULTS OF OPERATIONS AND FINANCIAL
CONDITION........................................................................... 8
PART II -- OTHER INFORMATION
ITEM 1.-- LEGAL PROCEEDINGS............................................................... 11
ITEM 6.-- EXHIBITS AND REPORTS ON FORM 8-K................................................ 11
SIGNATURES................................................................................ 12
Exhibit (i) -- Computation of Ratio of Earnings
to Fixed Charges...................................................................... 13
Exhibit (ii)-- Financial Data Schedule................................................... 14
</TABLE>
<PAGE>
Page 3 of 14
PART I -- FINANCIAL INFORMATION
ITEM 1. -- FINANCIAL STATEMENTS
PITNEY BOWES CREDIT CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(unaudited)
(in thousands of dollars)
<TABLE>
Three Months Ended March 31,
----------------------------
1998 1997
---- ----
REVENUE
<S> <C> <C>
Finance income....................................... $ 154,006 $ 168,649
Mortgage servicing revenue........................... 23,312 14,745
------- -------
Total revenue....................................... 177,318 183,394
------- -------
EXPENSES
Selling, general and administrative.................. 43,523 41,601
Interest............................................. 40,399 49,895
Provision for credit losses.......................... 14,778 15,055
Depreciation and amortization........................ 12,262 10,504
------- -------
Total expenses...................................... 110,962 117,055
------- -------
Income before income taxes............................. 66,356 66,339
Provision for income taxes............................. 19,507 21,101
------- -------
Net income............................................. $ 46,849 $ 45,238
======= =======
Ratio of earnings to fixed charges..................... 2.63X 2.32X
======= =======
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
Page 4 of 14
PITNEY BOWES CREDIT CORPORATION
CONSOLIDATED BALANCE SHEET
(unaudited)
(in thousands of dollars)
<TABLE>
March 31, December 31,
1998 1997
--------- -----------
ASSETS
<S> <C> <C>
Cash................................................................. $ 40,568 $ 36,320
--------- ---------
Investments:
Finance assets..................................................... 3,440,439 3,475,538
Investment in leveraged leases..................................... 697,730 667,779
Investment in operating leases, net of accumulated depreciation.... 29,654 32,112
Allowance for credit losses........................................ (114,833) (116,588)
--------- ---------
Net investments.................................................. 4,052,990 4,058,841
--------- ---------
Mortgage servicing rights, net of accumulated amortization........... 373,255 220,912
Assets held for sale................................................. 418,020 305,228
Investment in partnership............................................ 203,473 158,327
Loans and advances to affiliates..................................... 38,394 290,488
Other assets......................................................... 354,985 258,224
--------- ---------
Total assets................................................... $ 5,481,685 $ 5,328,340
========= =========
LIABILITIES
Senior notes payable within one year................................. $ 1,713,050 $ 1,970,110
Short-term notes payable to affiliates............................... 61,979 -
Accounts payable to affiliates....................................... 197,247 232,917
Accounts payable and accrued liabilities............................. 279,837 199,905
Deferred taxes....................................................... 538,875 510,060
Senior notes payable after one year.................................. 1,300,000 1,050,000
Subordinated notes payable........................................... 270,487 270,487
--------- ---------
Total liabilities............................................... 4,361,475 4,233,479
--------- ---------
STOCKHOLDER'S EQUITY
Common stock......................................................... 46,000 46,000
Capital surplus...................................................... 41,725 41,725
Retained earnings.................................................... 1,032,485 1,007,136
--------- ---------
Total stockholder's equity...................................... 1,120,210 1,094,861
--------- ---------
Total liabilities and stockholder's equity.................... $ 5,481,685 $ 5,328,340
========= =========
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
Page 5 of 14
PITNEY BOWES CREDIT CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
(in thousands of dollars)
<TABLE>
Three Months Ended March 31,
----------------------------
1998 1997
---- ----
OPERATING ACTIVITIES
<S> <C> <C>
Net income................................................................. $ 46,849 $ 45,238
Adjustments to reconcile net income to cash provided by
operating activities:
Provision for credit losses.............................................. 14,778 15,055
Depreciation and amortization............................................ 12,262 10,504
(Decrease) in accounts payable to affiliates............................. (35,670) (7,863)
Increase in deferred taxes............................................... 28,815 22,876
(Increase) in other current assets....................................... (35,685) (6,362)
(Increase) in deferred charges and other non-current assets.............. (61,720) (796)
Increase in accounts payable and accrued liabilities..................... 79,932 25,063
Other, net............................................................... 2,171 4,410
--------- ---------
Net cash provided by operating activities.................................. 51,732 108,125
--------- ---------
INVESTING ACTIVITIES
Investment in net finance assets......................................... (367,773) (536,986)
Investment in operating leases........................................... (47) (2,634)
Investment in leveraged leases........................................... (21,792) -
Investment in assets held for sale....................................... (118,444) (167,507)
Investment in partnership................................................ (22,473) -
Cash receipts collected under lease contracts, net of finance
income recognized..................................................... 361,474 682,950
Investment in mortgage service rights.................................... (161,434) (39,850)
Loans and advances to affiliates, net.................................... 252,000 (8,502)
Additions to equipment and leasehold improvements........................ (2,414) (2,623)
--------- ---------
Net cash used in investing activities...................................... (80,903) (75,152)
--------- ---------
FINANCING ACTIVITIES
(Decrease) increase in short-term debt, net.............................. (195,081) 274,342
Settlement of long-term debt............................................. - (200,000)
Proceeds from senior notes............................................... 250,000 -
Settlement of short-term loans from affiliates........................... - (74,538)
Dividends paid to Pitney Bowes Inc....................................... (21,500) (19,500)
--------- ---------
Net cash provided by (used in) financing activities........................ 33,419 (19,696)
--------- ---------
Increase in cash........................................................... 4,248 13,277
Cash at beginning of period................................................ 36,320 20,937
--------- ---------
Cash at end of period...................................................... $ 40,568 $ 34,214
========= =========
Interest paid.............................................................. $ 33,505 $ 48,968
========= =========
Income taxes refunded, net................................................. $ (2,006) $ (7,756)
========= =========
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
Page 6 of 14
PITNEY BOWES CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 -- General
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and do not include all
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of Pitney Bowes
Credit Corporation ("the Company" or "PBCC"), all adjustments (consisting of
only normal recurring accruals) necessary to present fairly the financial
position as of March 31, 1998 and the results of operations and cash flows for
the three months ended March 31, 1998 and 1997 have been included. Certain
amounts from prior periods have been reclassified to conform to current year
presentation. Operating results for the three months ended March 31, 1998 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 1998.
These statements should be read in conjunction with the financial statements
and notes thereto included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1997.
Note 2 --Finance Assets
The composition of the Company's finance assets is as follows:
<TABLE>
March 31, December 31,
(in thousands of dollars) 1998 1997
--------- ------------
<S> <C> <C>
Gross finance receivables...................................... $ 3,868,835 $ 3,923,767
Unguaranteed residual valuation................................ 445,839 461,051
Initial direct costs deferred.................................. 88,048 85,497
Unearned income................................................ (962,283) (994,777)
--------- ---------
Total finance assets......................................... $ 3,440,439 $ 3,475,538
========= =========
</TABLE>
Note 3 -- Mortgage Servicing Rights
Mortgage servicing rights ("MSR") are recorded at the lower of amortized cost
or the present value of estimated net servicing income, which does not exceed
fair market value and are amortized in proportion to, and over the period of,
estimated net servicing income. Fair value is estimated using a discounted cash
flow model which incorporates market discount and prepayment rates as well as
other assumptions that market participants would use in their estimates of
future servicing income and expense. The Company's policy for evaluating MSRs
for impairment is to stratify the mortgage servicing rights based on the
predominant risk characteristics of the underlying loans. Upon evaluation,
adjustments to current period operations and the valuation allowance are made if
any individual portfolio stratum is deemed impaired. Based on an evaluation
performed as of March 31, 1998, no impairment was recognized in the Company's
MSR portfolio.
<PAGE>
Page 7 of 14
PITNEY BOWES CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 4 -- Notes Payable
The composition of the Company's notes payable is as follows:
<TABLE>
March 31, December 31,
(in thousands of dollars) 1998 1997
--------- ---------
<S> <C> <C>
Senior Notes Payable:
Commercial paper at the weighted average
interest rate of 5.59% (5.66% in 1997)........................ $ 1,077,050 $ 1,361,110
Notes payable against bank lines of credit and others at a
weighted average interest rate of 1.57% (1.68% in 1997)....... 411,000 384,000
Current installment of long-term debt due within one year at
interest rates of 5.84% to 6.31% (5.84% to 6.31% in 1997).... 225,000 225,000
--------- ---------
Total senior notes payable due within one year................. 1,713,050 1,970,110
Senior notes payable due after one year at interest rates of
5.65% to 9.25% (6.06% to 9.25% in 1997)...................... 1,300,000 1,050,000
--------- ---------
Total senior notes payable..................................... 3,013,050 3,020,110
--------- ---------
Short-term Notes Payable to Affiliates:
Notes payable to Pitney Bowes Inc. at a weighted
average interest rate of 5.56%............................... 61,700 -
Notes payable to Pitney Bowes Deutschland at a
weighted average interest rate of 3.50%...................... 279 -
--------- ---------
Total short-term notes payable to affiliates................... 61,979 -
--------- ---------
Subordinated Notes Payable:
Non-interest bearing notes due Pitney Bowes Inc................ 270,487 270,487
--------- ---------
Total notes payable............................................... $ 3,345,516 $ 3,290,597
========= =========
</TABLE>
<PAGE>
Page 8 of 14
PITNEY BOWES CREDIT CORPORATION
ITEM 2. -- MANAGEMENT'S NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
Results of Operations
First Quarter of 1998 Compared to First Quarter of 1997
Finance income in the first quarter of 1998 decreased 3.3 percent to $177.3
million compared to $183.4 million in 1997. Finance income for internal
small-ticket financing programs increased 4.5 percent to $86.4 million from
$82.6 million primarily due to higher income from fee- and service-based
programs and a higher earning asset base. Finance income for external
large-ticket financing programs decreased to $30.8 million from $47.9 million
primarily due to lower external large-ticket investment levels in accordance
with the Company's strategy to shift the foundation of the external financing
business from asset-based to fee- and service- based revenues. Finance income
related to external small-ticket financing programs decreased to $36.8 million
from $38.1 million compared to the first quarter of 1997, primarily due to lower
yields on new business underwritten with tighter credit standards at Colonial
Pacific Leasing Corporation ("CPLC") and from lower earning asset levels in the
Dictaphone and Monarch portfolios.
Revenue generated from mortgage servicing increased 58.1 percent to $23.3
million in the first quarter of 1998 compared with $14.8 million in the first
quarter of 1997, due to a larger mortgage servicing portfolio and mortgage
refinancing fees, which is in keeping with the Company's fee-based income growth
strategy.
Selling, general and administrative ("SG&A") expenses increased 4.6 percent
to $43.5 million in the first quarter of 1998 compared to $41.6 million in 1997.
SG&A for internal small-ticket financing programs increased to $16.1 million
from $15.5 million principally due to higher professional fees and outsourcing
expenses related to new business initiatives as well as consulting services in
support of strategic initiatives such as improvements to information technology
and customer service. SG&A for external large-ticket financing programs
increased to $6.0 million in 1998 from $5.7 million in 1997 due to higher
personnel related expenses. SG&A for external small-ticket financing programs
decreased to $14.1 million from $15.3 million principally due to lower sales
assistance fees paid by CPLC. SG&A expenses related to mortgage servicing
increased 41.9 percent to $7.3 million in 1998 from $5.1 million in 1997
primarily due to the administration of a larger mortgage servicing portfolio.
Depreciation on operating leases was $1.9 million in the first quarter of
1998 compared to $4.1 million in 1997 reflecting a lower operating lease
investment balance at March 31, 1998 compared to March 31, 1997. Amortization of
mortgage servicing rights was $9.3 million in the first quarter of 1998 compared
to $5.7 million in 1997 due to a larger mortgage servicing portfolio. Costs
associated with the Company's participation in partnership transactions were
$1.1 million for the first quarter of 1998 compared to $0.7 million for the
first quarter of 1997. This increase reflects a partnership created in
connection with an asset transfer made during the fourth quarter of 1997.
The provision for credit losses was $14.8 million for the first quarter of
1998 compared with $15.1 million in 1997. The provision for internal
small-ticket financing programs decreased to $8.0 million from $8.2 million
primarily due to lower reserve requirements partly offset by increased
provisions for new business initiatives. The provision for external small-ticket
financing programs was $6.3 million for the first quarter of 1998 compared to
$6.4 million in 1997, reflecting a lower Dictaphone and Monarch portfolio. The
provision for external large-ticket financing programs was $0.5 million in the
first quarter of both 1998 and 1997.
The Company's allowance for credit losses as a percentage of net lease
receivables (net investments before allowance for credit losses plus the
uncollected principal balance of receivables sold) decreased slightly from 2.55
percent at December 31, 1997 to 2.54 percent at March 31, 1998. PBCC charged
$16.5 million and $11.4 million against the allowance for credit losses through
the first quarter of 1998 and 1997, respectively.
Interest expense was $40.4 million in the first quarter of 1998 compared
with $49.9 million in 1997. The decrease reflects lower average borrowings in
1998 combined with lower interest rates. The lower borrowing levels were due to
decreased external large-ticket asset levels offset by higher internal and
external small-ticket asset levels as well as an increased mortgage servicing
portfolio. The effective interest rate on average borrowings was 5.98 percent
for the first quarter of 1998 compared to 6.16 percent for the same period of
1997. The Company does not match fund its financing investments and does not
apply different interest rates to its various financing portfolios.
The effective tax rate for the first quarter of 1998 was 29.4 percent
compared with 31.8 percent for the same period of 1997. The decrease is
primarily due to lower tax provision requirements relating to certain leveraged
lease transactions.
The Company's ratio of earnings to fixed charges was 2.63 times for the
first quarter of 1998 compared with 2.32 times for the same period of 1997. The
increase reflects the disposition of external large-ticket assets, proceeds from
which were used for debt reduction.
<PAGE>
Page 9 of 14
PITNEY BOWES CREDIT CORPORATION
ITEM 2. -- MANAGEMENT'S NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS
AND FINANCIAL CONDITION (CONTINUED)
Financial Condition
Liquidity and Capital Resources
The Company's principal sources of funds are from operations and
borrowings. It has been PBCC's practice to use a balanced mix of debt
maturities, variable- and fixed-rate debt and interest rate swap agreements to
control sensitivity to interest rate volatility. PBCC's debt mix was 53 percent
short-term and 47 percent long-term at March 31, 1998 and 60 percent short-term
and 40 percent long-term at December 31, 1997. PBCC's swap-adjusted
variable-rate versus fixed-rate debt mix was 37 percent variable-rate and 63
percent fixed-rate at March 31, 1998 and 47 percent variable-rate and 53 percent
fixed-rate at December 31, 1997. The Company may borrow through the sale of
commercial paper, under its confirmed bank lines of credit, and by private and
public offerings of intermediate- or long-term debt securities.
During January 1998, PBCC issued $250 million of debt securities available
under the shelf registration. Proceeds from the debt issuance will be used to
help meet the Company's financing needs for the current year. The Company
intends to file a new shelf registration statement during 1998. The Company also
entered into an interest rate swap agreement for $125 million to better control
its sensitivity to interest rate volatility. The Company had unused lines of
credit and revolving credit facilities totaling $1.5 billion at March 31, 1998,
largely supporting its commercial paper borrowings.
The Company's utilization of derivative instruments is normally limited to
interest rate swap agreements ("interest rate swaps") and foreign currency
exchange forward contracts ("foreign currency contracts"). The Company
periodically enters into interest rate swaps as a means of managing interest
rate exposure. The interest rate differential paid or received is recognized as
an adjustment to interest expense. The interest differential on the swap will be
offset against changes in valuation of the assets resulting from interest rate
movements. The Company is exposed to credit loss in the event of non-performance
by the counterparties to the interest rate swaps to the extent of the
differential between fixed- and variable-rates; such exposure is considered
minimal. The Company has entered into foreign currency contracts for the purpose
of minimizing its risk of loss from fluctuations in exchange rates in connection
with certain intercompany loans and certain transfers to the Company by foreign
affiliates of foreign currency denominated lease receivables. The Company is
exposed to credit loss in the event of non-performance by the counterparties to
the foreign currency contracts to the extent of the difference between the spot
rate at the date of the contract delivery and the contracted rate; such exposure
is also considered minimal.
Since the Company normally enters into derivative transactions only with
members of its banking group, the credit risk of these transactions is monitored
as part of the normal credit review of the banking group. The Company monitors
the market risk of derivative instruments through periodic review of fair market
values.
Gross finance assets at the end of the first quarter of 1998 decreased 1.6
percent from December 31, 1997. The decrease is principally due to the shift in
emphasis from asset-based investments in the external large-ticket segment to
fee-based transactions. Overall levels of lease receivables are in line with
management's expectations.
The Company continues to actively pursue a strategy of external
large-ticket asset sales, thereby allowing the Company to focus on fee- and
service-based revenue rather than asset-based income.
The Company's liquidity ratio (finance contracts receivable, including
residuals, expected to be realized in cash over the next 12 months to current
maturities of debt over the same period) was .87 times at March 31, 1998 and .89
times at December 31, 1997.
The Company will continue to use cash to invest in finance assets with
emphasis on internal and external small-ticket leasing transactions and
controlled investment in external large-ticket financing programs. The Company
believes that cash generated from operations and collections on existing lease
contracts will provide the majority of cash needed for such investment
activities. Borrowing requirements will be primarily dependent upon the level of
equipment purchases from Pitney Bowes Inc., the level of external financing
activity, capital requirements for new business initiatives, and the refinancing
of maturing debt. Additional cash, to the extent needed, is expected to be
provided from commercial paper and intermediate- or long-term debt securities.
While the Company expects that market acceptance of its short- and long-term
debt will continue to be strong, additional liquidity is available under
revolving credit facilities and credit lines.
<PAGE>
Page 10 of 14
PITNEY BOWES CREDIT CORPORATION
ITEM 2. -- MANAGEMENT'S NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS
AND FINANCIAL CONDITION (CONTINUED)
The Company wants to caution readers that any forward-looking statements (those
which talk about the Company's or management's current expectations as to the
future) in this Form 10-Q or those made by the Company's management, involve
risks and uncertainties and may change based on various important factors.
Factors which could cause future financial performance to differ materially from
the expectations as expressed in any forward-looking statement made by or on
behalf of the Company include: the level of business and financial performance
of Pitney Bowes Inc; the impact of governmental financing regulations; the
success of the Company in developing strategies to manage debt levels, including
the ability of the Company to access the capital markets; the strength of
worldwide economies; the effects of and changes in trade, monetary and fiscal
policies and laws, and inflation and monetary fluctuations, including changes in
interest rates; the willingness of customers to substitute financing sources;
and the level of the Company's success at managing customer credit risk.
<PAGE>
Page 11 of 14
PART II - OTHER INFORMATION
ITEM 1 -- LEGAL PROCEEDINGS
From time to time, the Company is a party to lawsuits that arise in the
ordinary course of its business. These lawsuits may involve litigation by or
against the Company to enforce contractual rights under vendor, insurance or
other contracts; lawsuits by or against the Company relating to equipment,
service or payment disputes with customers; disputes with employees; or other
matters. The Company is currently a defendant in a number of lawsuits, none of
which should have, in the opinion of management and legal counsel, a material
adverse effect on the Company's financial position or results of operations.
ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K
a. Financial Statements - see index on page 2
Exhibits (numbered in accordance with Item 601 of Regulation S-K)
<TABLE>
Reg S-K Incorporation
<S> <C> <C> <C>
Exhibits Description by Reference
--------- ------------------------------------------------- ---------------
(12) Computation of Ratio of Earnings to Fixed Charges See Exhibit (i)
on page 13
(27) Financial Data Schedule See Exhibit (ii)
on page 14
There are no unregistered debt instruments in which the total
amount of securities authorized thereunder exceeds 10 percent of
the total assets of the Company. Copies of all instruments
defining the rights of securities holders are available on
request.
b. A report on Form 8-K was filed on February 4, 1998. Such report, dated
January 13, 1998, pertained to the issuance of the Company's 5.65%
Notes due January 15, 2003.
</TABLE>
<PAGE>
Page 12 of 14
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.
PITNEY BOWES CREDIT CORPORATION
By /s/ G. Kirk Hudson
----------------------
G. Kirk Hudson
Vice President - Finance
(Principal Financial and
Accounting Officer)
Dated: May 14, 1998
<PAGE>
Page 13 of 14
Exhibit (i)
Computation of Ratio of Earnings to Fixed Charges
(in thousands of dollars)
<TABLE>
Three Months Ended
March 31,
-----------------------
1998 1997
---- ----
<S> <C> <C>
Income before income taxes................................. $ 66,356 $ 66,339
------- -------
Fixed charges:
Interest on debt......................................... 40,399 49,895
One-third of rent expense................................ 324 340
------- -------
Total fixed charges........................................ 40,723 50,235
------- -------
Earnings before fixed charges.............................. $ 107,079 $ 116,574
======= =======
Ratio of earnings to fixed charges (1)..................... 2.63X 2.32X
======= =======
</TABLE>
(1) The ratio of earnings to fixed charges is computed by dividing earnings
before fixed charges by fixed charges. Fixed charges consist of interest on
debt and one-third of rent expense as representative of the interest
portion.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Page 14 of 14
Exhibit (ii)
Financial Data Schedule
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 3/31/98
INCOME STATEMENT AND BALANCE SHEET AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 40,568
<SECURITIES> 0
<RECEIVABLES> 4,167,823
<ALLOWANCES> 114,833
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,481,685
<CURRENT-LIABILITIES> 2,252,113
<BONDS> 0
<COMMON> 46,000
0
0
<OTHER-SE> 1,074,210
<TOTAL-LIABILITY-AND-EQUITY> 5,481,685
<SALES> 0
<TOTAL-REVENUES> 177,318
<CGS> 0
<TOTAL-COSTS> 55,785
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 14,778
<INTEREST-EXPENSE> 40,399
<INCOME-PRETAX> 66,356
<INCOME-TAX> 19,507
<INCOME-CONTINUING> 46,849
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 46,849
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
