<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-Q
[X]QUARTERLY]REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
OR
[_]TRANSITION]REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 0-15095
----------------
TENNECO CREDIT CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 76-0010368
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
1275 KING STREET, GREENWICH, CONNECTICUT 06831
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES INCLUDING ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (203) 863-1000
----------------
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
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK AS OF THE LATEST PRACTICABLE DATE.
Common Stock, par value $5 per share: 200 shares as of September 30, 1996
TENNECO CREDIT CORPORATION MEETS THE CONDITIONS OF GENERAL INSTRUCTION
H(1)(A) AND (B) OF FORM 10-Q AND IS THEREFORE FILING THIS REPORT WITH A
REDUCED DISCLOSURE FORMAT AS PERMITTED BY SUCH INSTRUCTION.
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<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Part I--Financial Information
Tenneco Credit Corporation and Consolidated Subsidiaries--
Statements of Income.................................................. 2
Statements of Cash Flows.............................................. 3
Balance Sheets........................................................ 4
Statements of Changes in Stockholder's Equity......................... 6
Notes to Financial Statements......................................... 7
Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................ 8
Part II--Other Information
Item 1. Legal Proceedings............................................... *
Item 2. Changes in Securities........................................... *
Item 3. Defaults Upon Senior Securities................................. *
Item 4. Submission of Matters to a Vote of Security Holders............. *
Item 5. Other Information............................................... *
Item 6. Exhibits and Reports on Form 8-K................................ 11
</TABLE>
- --------
* No such response to this item is included herein for the reason that it is
inapplicable or the answer to such item is negative.
1
<PAGE>
PART I--FINANCIAL INFORMATION
TENNECO CREDIT CORPORATION
AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
(THOUSANDS) (THOUSANDS)
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER ENDED SEPTEMBER
30, 30,
---------------- ---------------
1996 1995 1996 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
REVENUES:
Earned finance charges and interest......... $22,088 $30,207 $69,873 $97,542
Rental income from affiliated company....... 1,432 1,432 4,296 4,296
------- ------- ------- -------
Total revenues............................ 23,520 31,639 74,169 101,838
------- ------- ------- -------
EXPENSES:
Interest--
Commercial paper........................... -- 727 -- 727
Senior notes............................... 15,036 16,459 45,125 56,195
Subordinated notes......................... 2,280 2,298 6,841 6,865
Commitment fees and other.................. 222 224 648 1,002
Affiliated companies....................... -- 2,170 864 2,170
------- ------- ------- -------
17,538 21,878 53,478 66,959
Depreciation and amortization............... 497 497 1,491 1,491
Operating and administrative................ 1,622 2,832 5,981 9,777
------- ------- ------- -------
Total expenses............................ 19,657 25,207 60,950 78,227
------- ------- ------- -------
OTHER INCOME--Gain (loss) on sale of
receivables.................................. (261) 943 2,496 943
------- ------- ------- -------
INCOME BEFORE INCOME TAXES.................... 3,602 7,375 15,715 24,554
INCOME TAXES.................................. 1,518 2,930 6,294 9,646
------- ------- ------- -------
NET INCOME.................................... $ 2,084 $ 4,445 $ 9,421 $14,908
======= ======= ======= =======
</TABLE>
(The accompanying notes to financial statements are an
integral part of these statements of income.)
2
<PAGE>
TENNECO CREDIT CORPORATION
AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
(THOUSANDS)
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------
1996 1995
-------- ---------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income.............................................. $ 9,421 $ 14,908
Adjustments to reconcile to net cash provided from
operating activities:
Depreciation and amortization......................... 1,491 1,491
Deferred income taxes................................. (460) (202)
(Increase) decrease in notes and accounts receivable
purchased from affiliates, net....................... 163,139 534,544
Change in accounts payable to and receivable from
affiliates........................................... (12,941) 24,464
Increase (decrease) in accrued interest............... (1,389) (9,638)
Change in other assets and other, net................. 5,986 4,696
-------- ---------
NET CASH PROVIDED FROM OPERATING ACTIVITIES............... 165,247 570,263
-------- ---------
INVESTING ACTIVITIES:
(Increase) decrease in notes receivable from affiliated
companies.............................................. (375,510) (25,000)
Collections on long-term notes receivable............... -- 43,989
Purchase of long-term notes receivable.................. -- (310,800)
-------- ---------
NET CASH USED IN INVESTING ACTIVITIES..................... (375,510) (291,811)
-------- ---------
FINANCING ACTIVITIES:
Increase (decrease) in commercial paper................. -- 156,883
Increase (decrease) in short-term bank debt............. -- 100,000
Retirement of senior notes.............................. (1,230) (235,600)
Dividends paid.......................................... -- (300,000)
-------- ---------
NET CASH USED IN FINANCING ACTIVITIES..................... (1,230) (278,717)
-------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS...... (211,493) (265)
BEGINNING CASH AND CASH EQUIVALENTS BALANCE............... 211,610 332
-------- ---------
ENDING CASH AND CASH EQUIVALENTS BALANCE.................. $ 117 $ 67
======== =========
CASH PAID DURING THE PERIOD FOR:
Interest................................................ $ 54,003 $ 74,427
Income taxes............................................ $ 7,406 $ 9,492
</TABLE>
(The accompanying notes to financial statements are an
integral part of these statements of cash flows.)
3
<PAGE>
TENNECO CREDIT CORPORATION
AND CONSOLIDATED SUBSIDIARIES
BALANCE SHEETS
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
(THOUSANDS)
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
1996 1995 1995
------------- ------------ -------------
<S> <C> <C> <C>
Notes and accounts receivable pur-
chased from affiliates............... $ 574,332 $ 775,199 $ 933,726
Less--Unearned finance charges........ 27,191 64,405 80,008
Allowance for doubtful receivables. 7,477 7,991 8,713
---------- ---------- ----------
539,664 702,803 845,005
---------- ---------- ----------
Notes receivable:
Non-affiliated companies, including
$0, $0 and $4,917 due within one
year at the respective dates........ 1,267 1,267 23,167
Notes receivable--Case Corporation... -- -- 284,760
Affiliated companies................. 25,000 25,000 25,000
---------- ---------- ----------
26,267 26,267 332,927
Less--Allowance for doubtful note
receivable.......................... 1,267 1,267 --
---------- ---------- ----------
25,000 25,000 332,927
---------- ---------- ----------
Equipment under operating leases (at
cost), less accumulated depreciation
of $21,725, $20,234 and $19,737 at
the respective dates................. 47,881 49,372 49,869
---------- ---------- ----------
Other assets:
Cash and cash equivalents ........... 117 211,610 67
Notes and accounts receivable from
affiliates.......................... 387,014 2,716 5,543
Interest receivable and other........ 2,367 8,840 9,634
---------- ---------- ----------
389,498 223,166 15,244
---------- ---------- ----------
$1,002,043 $1,000,341 $1,243,045
========== ========== ==========
</TABLE>
(The accompanying notes to financial statements are an
integral part of these balance sheets.)
4
<PAGE>
TENNECO CREDIT CORPORATION
AND CONSOLIDATED SUBSIDIARIES
BALANCE SHEETS
(UNAUDITED)
LIABILITIES AND STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
(THOUSANDS EXCEPT SHARE AMOUNTS)
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
1996 1995 1995
------------- ------------ -------------
<S> <C> <C> <C>
Commercial paper...................... $ -- $ -- $ 156,883
Short-term bank note payable.......... -- -- 100,000
Senior notes, including $180,360,
$157,626 and $4,205 due within one
year at the respective dates......... 615,275 615,156 617,701
Subordinated notes.................... 92,100 92,100 92,100
Notes and accounts payable to affili-
ates................................. 1,098 5,251 35,665
Accrued interest...................... 15,323 16,712 15,592
Deferred income taxes................. 14,383 14,843 14,102
Other current liabilities............. 4,873 6,709 2,034
---------- ---------- ----------
743,052 750,771 1,034,077
---------- ---------- ----------
Stockholder's equity:
Common stock, par value $5 per share,
authorized, issued and outstanding
200 shares.......................... 1 1 1
Capital surplus...................... 188,128 188,128 154,091
Retained earnings.................... 70,862 61,441 54,876
---------- ---------- ----------
258,991 249,570 208,968
---------- ---------- ----------
$1,002,043 $1,000,341 $1,243,045
========== ========== ==========
</TABLE>
(The accompanying notes to financial statements are an
integral part of these balance sheets.)
5
<PAGE>
TENNECO CREDIT CORPORATION
AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
(THOUSANDS)
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------
1996 1995
-------- --------
<S> <C> <C>
COMMON STOCK:
Balance beginning and end of period........................ $ 1 $ 1
-------- --------
CAPITAL SURPLUS:
Balance beginning of period................................ 188,128 185,228
Capital distribution to affiliate......................... -- (31,137)
-------- --------
Balance end of period...................................... 188,128 154,091
-------- --------
RETAINED EARNINGS:
Balance beginning of period................................ 61,441 339,968
Net income................................................ 9,421 14,908
Dividends................................................. -- (300,000)
-------- --------
Balance end of period...................................... 70,862 54,876
-------- --------
Total..................................................... $258,991 $208,968
======== ========
</TABLE>
(The accompanying notes to financial statements are an
integral part of these statements of changes in stockholder's equity.)
6
<PAGE>
TENNECO CREDIT CORPORATION
AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(1) In the opinion of Tenneco Credit Corporation, the accompanying unaudited
financial statements of Tenneco Credit Corporation and its consolidated
subsidiaries (the "Company") contain all adjustments (consisting of only
normal recurring accruals) necessary to present fairly the financial
position as of September 30, 1996, and the results of operations; changes
in stockholder's equity; and cash flows for the periods indicated.
(2) Certain reclassifications have been made to prior period amounts, where
appropriate, to conform with the current period presentation.
(3) As part of the ongoing strategic realignment of its businesses, Tenneco
Inc. has announced a plan to spin off its Newport News Shipbuilding
business and the combined businesses of its Automotive and Packaging
segments to its shareowners as separate, publicly traded companies in tax-
free transactions (the "Distributions"). Prior to the Distributions,
Tenneco Inc. and its subsidiaries will undertake various intercompany
transfers and distributions (collectively, the "Corporate Restructuring
Transactions") designed to restructure, divide and separate the various
businesses owned directly or indirectly by Tenneco, including certain
assets, liabilities and operations of the Company. At the completion of
the Corporate Restructuring Transactions and Distributions, Tenneco Inc.
will principally consist of its current Energy segment, the Company and
certain assets and liabilities related to operations previously disposed
of by Tenneco. Pursuant to an Amended and Restated Agreement and Plan of
Merger dated as of June 19, 1996 between Tenneco and El Paso Natural Gas
Company ("El Paso"), the remaining Tenneco businesses subsequent to the
spin off will be merged with and into a subsidiary of El Paso through an
exchange of Tenneco common and preferred shares for El Paso equity
consideration valued at $750 million (subject to the effects of a collar
on the market price of El Paso stock).
As a result of these planned transactions, the Company expects that its
business activity will be substantially reduced. Certain receivables
currently owned by the Company will be sold and the Automotive and
Packaging businesses will cease selling receivables to the Company. Cash
from sales and collection of receivables combined with proceeds from
several new lines of credit at Tenneco Inc. and certain subsidiaries will
be used to finance the retirement of the Company's existing debt through
tender offers and defeasances.
(4) In June 1996, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities," which
establishes new accounting standards for transfers and servicing of
financial assets and extinguishments of liabilities. The statement is
effective for transactions occurring after December 31, 1996. The impact
of the adoption of the new standard has not been quantified.
(The above notes are an integral part of the foregoing financial statements.)
7
<PAGE>
TENNECO CREDIT CORPORATION
AND CONSOLIDATED SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
THIRD QUARTER RESULTS
REVENUES
The Company and its consolidated subsidiaries reported total revenues of
$23.5 million for the third quarter of 1996, down $8.1 million or 26% from the
third quarter of 1995. The decrease is primarily attributable to the declining
retail receivables related to Case Corporation ("Case"). Presented below are
the percentages of revenues from the various sources:
<TABLE>
<CAPTION>
REVENUES
---------------
THREE MONTHS
ENDED
SEPTEMBER 30,
---------------
1996 1995
------ ------
<S> <C> <C>
Case.................................................... 31% 43%
Energy.................................................. 13 15
Packaging............................................... 14 9
Automotive.............................................. 13 10
------ ------
Total from accounts receivable........................ 71 77
Rental.................................................. 6 4
Affiliated notes receivable............................. 20 --
Other notes receivable.................................. 3 19
------ ------
100% 100%
====== ======
</TABLE>
The average yield on Case retail receivables was 10.1% and 10.4% for the
third quarter of 1996 and 1995, respectively. The discount rate charged on
short-term receivables purchased from subsidiaries of Tenneco Inc. was 8.50%
during the third quarter of 1996 compared to a range of 9.0% to 9.25% for the
same period in 1995.
The Company's only leasing activity is the multifuel boiler facility leased
to Tenneco Packaging, Inc., an affiliate of the Company. Leasing activities
provided $1.4 million of revenues in the three months ended September 30, 1996
and 1995.
Interest income on notes receivable from affiliates increased $5 million in
the third quarter of 1996 compared to the same period in 1995 primarily due to
higher balances in notes receivable from affiliates. Interest income from
other notes receivable decreased $5.4 million in the third quarter of 1996
compared to the same period in 1995 primarily due to the sale of the Case
Corporation note (see below) which was held by the Company from July 1995 to
December 1995.
Under an Investment Agreement dated June 15, 1988, between the Company and
Tenneco Inc. (the "Investment Agreement"), the Company is to receive a service
charge from Tenneco Inc. for each month equal to the amount, if any, by which
the cumulative earnings of the Company for the period from the beginning of
the calendar year to the end of such month, before deduction of fixed charges
and federal income taxes, are less than 125% of the Company's fixed charges. A
service charge of $92,100 was paid by Tenneco Inc. for the month of August
1996. No service charge was required for the three months ended September 30,
1995.
Subsequent to the Case reorganization in June 1994, the Case retail
financing activities have been conducted by Case's United States finance
subsidiary. As the Company no longer purchases Case retail receivables, future
revenues and income will continue to decline as the remaining retail
receivables balance is collected. See also "Outlook" below.
8
<PAGE>
EXPENSES
Interest expense of $17.5 million for the third quarter of 1996 represented
a decrease of 20%, or $4.4 million, over the third quarter of 1995. This
decrease resulted from lower levels of long-term debt. The average interest
rate for the third quarter of 1996 and 1995 was 9.8% and 9.0%, respectively.
Operating and administrative expenses decreased $1.2 million primarily due to
lower fees paid to Case to service Case U.S. retail notes receivable retained
by the Company. These fees will continue to decrease as the remaining retail
notes receivables are collected.
OTHER INCOME
The Company recognized a $.3 million loss on the sale of trade receivables
to Asset Securitization Cooperative Corporation in the third quarter of 1995.
These trade receivables originated from certain of Tenneco's packaging,
automotive and energy subsidiaries.
NET INCOME
Net income for the third quarter of 1996 was $2.1 million, a decrease of
$2.3 million or 53% compared with the third quarter of 1995. The decrease is
primarily attributable to lower revenues offset by decreased interest expense,
operating and administrative expense and income taxes.
ASSETS
The Company held total assets of $1,002.0 million at September 30, 1996, as
compared to $1,000.3 million and $1,243.0 million at December 31, 1995 and
September 30, 1995, respectively. Total assets at September 30, 1996 versus
December 31, 1995 was substantially unchanged. The continuing liquidation of
the Case receivables was offset by an increase in affiliated company notes
receivable.
As of September 30, 1996, the Company held net trade notes and accounts
receivable totaling $539.7 million, which accounted for 54% of the Company's
total assets. This compares to $702.8 million and $845.0 million or 70% and
68% of the total assets at December 31, 1995 and September 30, 1995,
respectively. Details of these receivables are shown as follows:
<TABLE>
<CAPTION>
NET TRADE NOTES AND
ACCOUNTS RECEIVABLE
----------------------------------------
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
1996 1995 1995
------------- ------------ -------------
<S> <C> <C> <C>
Case............................. 50% 62% 60%
Energy........................... 20 17 18
Packaging........................ 16 10 9
Automotive....................... 14 11 13
--- --- ---
100% 100% 100%
=== === ===
</TABLE>
Case net trade notes and accounts receivable are $169.6 million and $235.0
million lower at September 30, 1996, compared to December 31, 1995 and
September 30, 1995, respectively, due to the continuing liquidation of the
Case retail receivables.
The Company purchased the Case Corporation 10 1/2% Subordinated Note from
its parent, Tenneco Inc., in July 1995. The note receivable was recorded at
historical cost. Interest on the note was accreted into the principal balance.
At September 30, 1995, the note receivable balance, including accreted
interest, totaled $284.8 million or 23% of the Company's total assets.
The Company held zero notes receivable from non-affiliated companies, on a
net basis, at September 30, 1996, unchanged from December 31, 1995 and down
$23.2 million from September 30, 1995. The decrease from September 30, 1995
was primarily due to the sale of a third-party note in the fourth quarter of
1995.
As of September 30, 1996, the Company had a net recorded investment of $47.9
million in a multifuel boiler leased to Tenneco Packaging, Inc., an indirect,
wholly-owned subsidiary of Tenneco Inc. The leased facility represented 5% of
the Company's total assets at September 30, 1996.
9
<PAGE>
CAPITALIZATION AND CAPITAL RESOURCES
Pursuant to the Investment Agreement, Tenneco Inc. is required to maintain
an investment in the Company as necessary to assure that at all times the sum
of the Company's subordinated debt plus stockholder's equity will be at least
equal to 20% of the Company's total debt plus stockholder's equity.
The Company's capital requirements have been financed through the issuance
of commercial paper, short-term bank notes, senior and subordinated debt,
advances and equity capital from Tenneco Inc. plus earnings retained in the
business.
The Company's total capitalization was $966.4 million at September 30, 1996,
and $956.8 million and $1,175.7 million at December 31, 1995 and September 30,
1995, respectively. The components of capitalization at such dates are set
forth in the following table:
<TABLE>
<CAPTION>
CAPITALIZATION
----------------------------------------
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
1996 1995 1995
------------- ------------ -------------
<S> <C> <C> <C>
Commercial paper................. --% --% 13%
Short-term bank notes............ -- -- 9
Medium-term senior debt.......... 4 4 3
Long-term senior debt............ 60 60 49
Subordinated debt................ 9 10 8
Stockholder's equity............. 27 26 18
--- --- ---
100% 100% 100%
=== === ===
</TABLE>
OUTLOOK
As part of the ongoing strategic realignment of its businesses, Tenneco Inc.
has announced a plan to spin off its Newport News Shipbuilding business and
the combined businesses of its Automotive and Packaging segments to its
shareowners as separate, publicly traded companies in tax-free transactions
(the "Distributions"). Prior to the Distributions, Tenneco Inc. and its
subsidiaries will undertake various intercompany transfers and distributions
(collectively, the "Corporate Restructuring Transactions") designed to
restructure, divide and separate the various businesses owned directly or
indirectly by Tenneco, including certain assets, liabilities and operations of
the Company. At the completion of the Corporate Restructuring Transactions and
Distributions, Tenneco Inc. will principally consist of its current Energy
segment, the Company and certain assets and liabilities related to operations
previously disposed of by Tenneco. Pursuant to an Amended and Restated
Agreement and Plan of Merger dated as of June 19, 1996 between Tenneco and El
Paso Natural Gas Company ("El Paso"), the remaining Tenneco businesses
subsequent to the spin off will be merged with and into a subsidiary of El
Paso through an exchange of Tenneco common and preferred shares for El Paso
equity consideration valued at $750 million (subject to the effects of a
collar on the market price of El Paso stock).
As a result of these planned transactions, the Company expects that its
business activity will be substantially reduced. Certain receivables currently
owned by the Company will be sold and the Automotive and Packaging businesses
will cease selling receivables to the Company. Cash from sales and collection
of receivables combined with proceeds from several new lines of credit at
Tenneco Inc. and certain subsidiaries will be used to finance the retirement
of the Company's existing debt through tender offers and defeasances.
NINE MONTH RESULTS
REVENUES
For the nine months of 1996, revenues totaled $74.2 million, down 27% from
the $101.8 million reported for the same period in 1995. This reduction is
primarily attributable to lower average Case receivable balances.
10
<PAGE>
On a percentage basis, revenues for the indicated nine-month periods were
generated from the following:
<TABLE>
<CAPTION>
REVENUES
----------
NINE
MONTHS
ENDED
SEPTEMBER
30,
----------
1996 1995
---- ----
<S> <C> <C>
Case........................................................ 39% 46%
Energy...................................................... 14 14
Packaging................................................... 15 12
Automotive.................................................. 13 11
--- ---
Total from accounts receivable............................ 81 83
Rental...................................................... 6 4
Affiliated notes receivable................................. 11 5
Other notes receivable...................................... 2 8
--- ---
100% 100%
=== ===
</TABLE>
Discount rates on short-term accounts receivable purchased from subsidiaries
of Tenneco Inc. during the first nine months of 1996 ranged from 8.50% to
9.00% as compared to a range of 8.75% to 9.25% for the first nine months of
1995. The average yield on Case retail receivables for the nine-month period
decreased to 10.3% in 1996 from 10.4% in 1995.
EXPENSES
Interest expense for the nine months ended September 30, 1996, was $53.5
million versus $67.0 million for the same period in 1995. The $13.5 million
decrease was due to lower levels of long-term debt for the first nine months
of 1996. Operating and administrative expense decreased $3.8 million for the
same reasons discussed in "Third Quarter Results--Expenses."
OTHER INCOME
The Company recognized a $2.5 million net gain on the sale of trade
receivables to Asset Securitization Cooperative Corporation in the first nine
months of 1996. These trade receivables originated from certain of Tenneco's
packaging, automotive and energy subsidiaries.
NET INCOME
Net income for the first nine months of 1996 was $9.4 million, a decrease of
$5.5 million from net income of $14.9 million for the 1995 period. See
discussion in "Net Income" under Third Quarter Results.
PART II--OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
12--Computation of Ratio of Earnings to Fixed Charges.
27--Financial Data Schedule.
(b) Reports on Form 8-K. Tenneco Credit Corporation did not file any reports
on Form 8-K during the quarter ended September 30, 1996.
11
<PAGE>
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.
TENNECO CREDIT CORPORATION
Robert T. Blakely
Date: November 14, 1996 By __________________________________
Robert T. Blakely
President
Mark A. McCollum
Date: November 14, 1996 By __________________________________
Mark A. McCollum
Vice President and Controller
<PAGE>
EXHIBIT 12
TENNECO CREDIT CORPORATION
AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS
TO FIXED CHARGES
(UNAUDITED)
<TABLE>
<CAPTION>
(THOUSANDS)
NINE MONTHS
ENDED
SEPTEMBER 30,
---------------
1996 1995
------- -------
<S> <C> <C>
Net income..................................................... $ 9,421 $14,908
Add:
Interest expense.............................................. 53,478 66,959
Income taxes.................................................. 6,294 9,646
------- -------
Earnings as defined......................................... $69,193 $91,513
======= =======
Fixed charges--interest expense................................ $53,478 $66,959
======= =======
Ratio of earnings to fixed charges............................. 1.29 1.37
======= =======
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TENNECO
CREDIT CORPORATION AND CONSOLIDATED SUBSIDIARIES FINANCIAL STATEMENTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 117
<SECURITIES> 0
<RECEIVABLES> 547,141
<ALLOWANCES> (7,477)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 69,606
<DEPRECIATION> (21,725)
<TOTAL-ASSETS> 1,002,043
<CURRENT-LIABILITIES> 0
<BONDS> 707,375
0
0
<COMMON> 1
<OTHER-SE> 258,990
<TOTAL-LIABILITY-AND-EQUITY> 1,002,043
<SALES> 0
<TOTAL-REVENUES> 74,169
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,472
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 53,478
<INCOME-PRETAX> 15,715
<INCOME-TAX> 6,294
<INCOME-CONTINUING> 9,421
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,421
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
