<PAGE> 1
PROSPECTUS SUPPLEMENT
(To Prospectus dated December 4, 1995)
$300,000,000
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<S> <C>
LOGO LOGO
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6 5/8% SENIOR NOTES DUE MAY 15, 2001
Interest on the Notes is payable semiannually on May 15 and November 15 of each
year, beginning November 15, 1996. The Notes are not redeemable prior to
maturity.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
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PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT COMPANY(1)(2)
<S> <C> <C> <C>
Per Note............................... 99.898% .259% 99.639%
Total.................................. $299,694,000 $777,000 $298,917,000
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- --------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from May 23, 1996 to date of delivery.
(2) Before deducting expenses payable by the Company estimated to be $290,000.
The Notes are offered subject to receipt and acceptance by the Underwriters, to
prior sale and to the Underwriters' right to reject any order in whole or in
part and to withdraw, cancel or modify the offer without notice. It is expected
that delivery of the Notes will be made at the office of Salomon Brothers Inc,
Seven World Trade Center, New York, New York, or through the facilities of The
Depository Trust Company, on or about May 23, 1996, against payment in
immediately available funds.
SALOMON BROTHERS INC
BA SECURITIES, INC.
CITICORP SECURITIES, INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES
CORPORATION
FIRST UNION CAPITAL MARKETS CORP.
The date of this Prospectus Supplement is May 20, 1996.
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
SUMMARY FINANCIAL INFORMATION
The following summary of certain financial information of the Company and
its consolidated subsidiaries has been derived principally from information
contained in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995 and its Quarterly Report on Form 10-Q for the three months
ended March 31, 1996, available as described under "Documents Incorporated by
Reference", and is qualified in its entirety by the detailed information and
financial statements set forth therein.
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FOR THE THREE MONTHS
FOR THE YEAR ENDED DECEMBER 31 ENDED MARCH 31
-------------------------------------------------------- --------------------
1991 1992 1993 1994 1995 1995 1996
-------- -------- -------- -------- -------- -------- --------
(DOLLAR AMOUNTS IN MILLIONS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUE AND EARNINGS
Revenue --
Finance charges............ $2,753.2 $2,931.9 $3,250.7 $3,866.7 $4,805.3 $1,121.2 $1,308.3
Insurance premiums......... 202.5 209.9 242.2 293.5 325.1 81.9 81.6
Investment and other
income................. 163.3 182.8 196.7 227.7 254.0 60.1 64.3
-------- -------- -------- -------- -------- -------- --------
3,119.0 3,324.6 3,689.6 4,387.9 5,384.4 1,263.2 1,454.2
Expenses --
Interest expense........... 1,278.5 1,222.8 1,291.8 1,509.7 1,979.8 462.5 514.7
Operating expenses......... 705.4 807.4 979.6 1,191.6 1,417.8 333.5 366.7
Provision for losses on
finance receivables..... 423.7 504.0 468.9 569.9 729.7 171.3 231.0
Insurance benefits paid or
provided................ 91.1 100.0 114.9 144.1 135.7 36.3 33.0
-------- -------- -------- -------- -------- -------- --------
2,498.7 2,634.2 2,855.2 3,415.3 4,263.0 1,003.6 1,145.4
-------- -------- -------- -------- -------- -------- --------
Earnings Before Provision for
Income Taxes and Cumulative
Effect of Changes in
Accounting Principles...... 620.3 690.4 834.4 972.6 1,121.4 259.6 308.8
Provision for Income Taxes... 219.6 240.7 310.7 369.1 413.3 93.6 115.0
-------- -------- -------- -------- -------- -------- --------
Earnings Before Cumulative
Effect of Changes in
Accounting Principles...... 400.7 449.7 523.7 603.5 708.1 166.0 193.8
Cumulative Effect of Changes
in Accounting
Principles(a).............. -- (10.0) -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Net Earnings................. $ 400.7 $ 439.7 $ 523.7 $ 603.5 $ 708.1 $ 166.0 $ 193.8
======== ======== ======== ======== ======== ======== ========
Ratio of Earnings to Fixed
Charges(b)................. 1.48 1.56 1.64 1.64 1.56 1.56 1.60
======== ======== ======== ======== ======== ======== ========
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(a) The Company recorded a one-time cumulative effect of changes in accounting
principles related to the adoption, effective January 1, 1992, of SFAS No.
106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions", and SFAS No. 109, "Accounting for Income Taxes".
(b) For purposes of computing the Ratio of Earnings to Fixed Charges,
"earnings" represent earnings before provision for income taxes and
cumulative effect of changes in accounting principles, plus fixed charges
"Fixed charges" represent interest expense and a portion of rentals
representative of an implicit interest factor for such rentals.
S-2
<PAGE> 3
SUMMARY FINANCIAL INFORMATION -- (CONTINUED)
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DECEMBER 31 MARCH 31
1995 1996
----------- ------------
(UNAUDITED)
(IN MILLIONS)
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BALANCE SHEET DATA
Assets:
Cash and Cash Equivalents......................................... $ 309.2 $ 200.4
Investments in Debt and Equity Securities
Bonds and Notes................................................ 872.1 922.2
Stocks......................................................... 12.6 12.6
--------- ----------
Total Investments in Debt and Equity Securities........... 884.7 934.8
Finance Receivables, net of unearned finance income
Consumer Finance............................................... 24,609.2 25,578.0
Commercial Finance............................................. 11,759.1 11,998.8
--------- ----------
Total Net Finance Receivables............................. 36,368.3 37,576.8
Allowance for Losses on Finance Receivables....................... (1,109.2) (1,205.9)
Insurance Policy and Claims Reserves.............................. (602.8) (613.7)
Other Assets...................................................... 1,173.5 1,273.5
--------- ----------
Total Assets.............................................. $37,023.7 $ 38,165.9
========= ==========
Liabilities and Stockholders' Equity:
Notes Payable, unsecured short-term
Commercial paper............................................... $12,732.7 $ 14,467.1
Bank loans..................................................... 702.0 --
Long-Term Debt, unsecured due within one year
Senior......................................................... 2,611.3 2,128.0
Subordinated................................................... -- 16.2
Capital........................................................ 0.1 0.1
Accounts Payable and Accruals..................................... 833.5 975.7
Long-Term Debt, unsecured
Senior......................................................... 15,558.4 15,829.2
Subordinated................................................... 141.2 125.0
Capital........................................................ 0.5 0.5
--------- ----------
Total Long-Term Debt...................................... 15,700.1 15,954.7
Stockholders' Equity.............................................. 4,444.0 4,624.1
--------- ----------
Total Liabilities and Stockholders' Equity................ $37,023.7 $ 38,165.9
========= ==========
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S-3
<PAGE> 4
DESCRIPTION OF THE NOTES
The following description of the particular terms of the Notes offered
hereby supplements the description of the general terms and provisions of the
Debt Securities set forth in the Prospectus, to which description reference is
hereby made.
GENERAL
The Notes will constitute senior debt of the Company, will be issued under
an indenture dated as of November 1, 1995 (the "Indenture") between the Company
and The Chase Manhattan Bank (National Association), as Trustee ("Chase"), will
be limited to $300,000,000 aggregate principal amount and will mature on May 15,
2001. The Notes will bear interest at the rate per annum shown on the cover page
of this Prospectus Supplement from May 23, 1996 or from the most recent Interest
Payment Date to which interest has been paid or provided for, payable
semiannually on May 15 and November 15 of each year, commencing on November 15,
1996, to the persons in whose names the Notes are registered at the close of
business on the April 30 and October 31, as the case may be, next preceding such
Interest Payment Date. Payment of interest will be made by check mailed to the
persons entitled thereto; provided, however, that such payment of interest will
be made by wire transfer of immediately available funds if appropriate wire
transfer instructions have been received in writing by Chase not later than five
business days prior to the record date for the applicable Interest Payment Date.
Payment of principal at maturity will be made in immediately available funds
upon surrender of a Note.
The Notes may be presented for payment or for transfer or exchange at the
Corporate Trust Office of Chase, presently located at 4 Chase MetroTech Center
(3rd Floor), Brooklyn, New York 11245 or, at the option of the holder, at
Chase's corporate trust facility in the Borough of Manhattan, The City of New
York, presently located at Chase Institutional Trust Window, 1 Chase Manhattan
Plaza, 1B, New York, New York 10081 or at any other office or agency maintained
by the Company for such purpose. The Company may from time to time vary the
location of any such offices but will at all times maintain an office or agency
in the Borough of Manhattan for presentation for payment or for transfer or
exchange. Wire transfer instructions shall be provided to Chase at either of the
aforementioned offices.
The Notes are to be issued only in registered form without coupons in
denominations of $1,000 and any multiple of $1,000.
REDEMPTION
The Notes are not redeemable prior to maturity.
CONCERNING THE TRUSTEE
Chase serves as trustee with respect to two series of debt securities
issued under an indenture dated as of December 1, 1985 and four other series of
Debt Securities previously issued or to be issued under the Indenture.
S-4
<PAGE> 5
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, the Company has agreed to sell to each of the Underwriters named
below, and each of the Underwriters has severally agreed to purchase, the
principal amount of the Notes set forth opposite its name.
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PRINCIPAL
AMOUNT OF
UNDERWRITER NOTES
-----------
<S> <C>
Salomon Brothers Inc........................................... $200,000,000
BA Securities, Inc. ........................................... 25,000,000
Citicorp Securities, Inc. ..................................... 25,000,000
Donaldson, Lufkin & Jenrette Securities Corporation............ 25,000,000
First Union Capital Markets Corp. ............................. 25,000,000
------------
Total................................................ $300,000,000
============
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The Underwriting Agreement provides that the obligations of the several
Underwriters are subject to certain conditions precedent. The Underwriters will
be obligated to purchase all of the Notes if any of the Notes are purchased.
The Company has been advised that the several Underwriters propose
initially to offer the Notes directly to the public at the public offering price
set forth on the cover page hereof and to certain dealers at a price which
represents a concession not in excess of .200% of the principal amount. The
Underwriters may allow and such dealers may reallow a concession, not in excess
of .125% of the principal amount, to certain other dealers. After the initial
public offering, the public offering price and such concessions may be changed.
The Company will indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended,
or contribute to payments required to be made in respect thereof.
The Company has been advised by the Underwriters that they currently intend
to make a market in the Notes, but may discontinue such market making at any
time without notice. The Company cannot predict the liquidity of any trading
market for the Notes.
In the ordinary course of their businesses, affiliates of BA Securities,
Inc., Citicorp Securities, Inc. and First Union Capital Markets Corp. have
engaged, and may in the future engage, in commercial banking transactions with
the Company.
LEGAL OPINIONS
The legality of the Notes will be passed upon for the Company by its
Assistant General Counsel, Timothy M. Hayes, 250 Carpenter Freeway, Irving, TX
75062-2729, and for the Underwriters by LeBoeuf, Lamb, Greene & MacRae, L.L.P.,
a limited liability partnership including professional corporations, 125 West
55th Street, New York, New York 10019.
S-5
<PAGE> 6
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS IN CONNECTION WITH THE
OFFER CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY THE UNDERWRITERS. THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN
OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
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PAGE
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PROSPECTUS SUPPLEMENT
Summary Financial Information........ S-2
Description of the Notes............. S-4
Underwriting......................... S-5
Legal Opinions....................... S-5
PROSPECTUS
Available Information................ 2
Documents Incorporated by
Reference.......................... 2
The Company.......................... 3
Application of Proceeds.............. 3
Description of Debt Securities....... 4
Description of Warrants.............. 8
Plan of Distribution................. 9
Legal Opinions....................... 10
Experts.............................. 10
</TABLE>
$300,000,000
[LOGO]
6 5/8% SENIOR NOTES
DUE MAY 15, 2001
SALOMON BROTHERS INC
BA SECURITIES, INC.
CITICORP SECURITIES, INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
FIRST UNION CAPITAL MARKETS CORP.
PROSPECTUS SUPPLEMENT
DATED MAY 20, 1996
