UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)1
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
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 1-1177
BENEFICIAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 51-0003820
(State of incorporation) (I.R.S. Employer Identification
No.)
301 North Walnut Street
Wilmington, Delaware 19801
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: (302) 425-2500
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 twelve 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
At October 27, 1995, the number of shares outstanding of the registrant's common
stock was 53,024,243.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
BENEFICIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions)
<S> <C> <C>
September 30, December 31,
1995 1994
ASSETS
Cash and Equivalents . . . . . . . . . . . . $ 196.5 $ 189.5
Finance Receivables (Note 2). . . . . . . . . . 12,403.0 12,322.6
Allowance for Credit Losses (Note 3) . . . . . . (359.1) (331.6)
Net Finance Receivables. . . . . . . . . . 12,043.9 11,991.0
Investment Securities (Note 4) . . . . . . . . . 1,481.4 1,306.3
Property and Equipment. . . . . . . . . . . . 181.4 185.9
Other Assets . . . . . . . . . . . . . . . 703.4 703.9
TOTAL ASSETS . . . . . . . . . . . . . $14,606.6 $14,376.6
LIABILITIES AND SHAREHOLDERS' EQUITY
Short-Term Debt (Note 5) . . . . . . . . . . . $ 3,653.1 $ 3,473.9
Deposits Payable (includes employee thrift deposits). . 755.7 654.4
Long-Term Debt (Note 6) . . . . . . . . . . . 6,963.9 7,324.8
Total Interest-Bearing Debt . . . . . . . . . 11,372.7 11,453.1
Accounts Payable and Accrued Liabilities. . . . . . 500.3 438.5
Insurance Policy and Claim Reserves . . . . . . . 1,230.3 1,084.7
Total Liabilities. . . . . . . . . . . . . 13,103.3 12,976.3
Shareholders' Equity:
Preferred Stock . . . . . . . . . . . . . 114.9 114.9
Common Stock . . . . . . . . . . . . . . 53.0 52.5
Additional Capital . . . . . . . . . . . . 262.9 246.5
Net Unrealized Gain (Loss) on Investment Securities . 6.6 (8.8)
Accumulated Foreign Currency Translation Adjustments . (45.7) (47.0)
Retained Earnings. . . . . . . . . . . . . 1,111.6 1,042.2
Total Shareholders' Equity . . . . . . . . . 1,503.3 1,400.3
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY . . . $14,606.6 $14,376.6
See Notes to Financial Statements.
BENEFICIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
REVENUE
Finance Charges and Fees . . . . .$509.4 $448.6 $1,488.2 $1,277.5
Interest Expense. . . . . . . . 199.8 169.5 610.3 486.7
Lending Spread. . . . . . . . 309.6 279.1 877.9 790.8
Insurance Premiums . . . . . . . 28.9 35.0 109.1 105.2
Other . . . . . . . . . . . 68.1 44.4 163.5 193.6
Total . . . . . . . . . . 406.6 358.5 1,150.5 1,089.6
OPERATING EXPENSES
Salaries and Employee Benefits . . . 94.7 90.5 288.9 267.2
Insurance Benefits . . . . . . . 10.8 20.2 59.7 64.0
Provision for Credit Losses . . . . 66.4 45.8 163.4 130.4
Other . . . . . . . . . . . 132.8 114.9 395.1 339.0
Total . . . . . . . . . . 304.7 271.4 907.1 800.6
Income Before Income Taxes . . . . . 101.9 87.1 243.4 289.0
Provision for Income Taxes . . . . . 41.8 35.7 99.8 120.5
NET INCOME . . . . . . . . . .$ 60.1 $ 51.4 $ 143.6 $ 168.5
EARNINGS PER COMMON SHARE . . . . .$ 1.10 $ .95 $ 2.62 $ 3.13
DIVIDENDS PER COMMON SHARE . . . . .$ .47 $ .43 $ 1.33 $ 1.19
See Notes to Financial Statements.
BENEFICIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
Nine Months Ended
September 30,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income . . . . . . . . . . . . . . . $ 143.6 $168.5
Reconciliation of Net Income to Net Cash
Provided by Operating Activities:
Provision for Credit Losses . . . . . . . . . . . 163.4 130.4
Provision for Deferred Income Taxes . . . . . . . . (12.7) (18.9)
Depreciation and Amortization . . . . . . . . . . 35.3 36.9
Insurance Policy & Claim Reserves . . . . . . . . . 145.6 129.1
Accounts Payable & Accrued Liabilities . . . . . . . 61.8 111.3
Net Cash Provided by Operating Activities. . . . . . 537.0 557.3
CASH FLOWS FROM INVESTING ACTIVITIES
Receivables Originated or Acquired . . . . . . . . .(6,732.2) (5,683.0)
Receivables Collected. . . . . . . . . . . . . .5,480.0 4,464.1
Receivables Securitized . . . . . . . . . . . . .1,103.8 757.0
Other Receivables, Net Change . . . . . . . . . . . 15.6 21.3
Investment Securities Purchased . . . . . . . . . . (263.9) (368.8)
Investment Securities Sold . . . . . . . . . . . . 26.2 48.1
Investment Securities Matured . . . . . . . . . . . 97.3 154.4
Other . . . . . . . . . . . . . . . . . . . (39.1) 22.6
Net Cash Provided (Used) by Investing Activities . . . (312.3) (584.3)
CASH FLOWS FROM FINANCING ACTIVITIES
Short-Term Debt, Net Change. . . . . . . . . . . . 170.1 96.3
Deposits Payable, Net Change . . . . . . . . . . . 80.9 (5.5)
Long-Term Debt Issued. . . . . . . . . . . . . . 2,041.8 1,674.7
Long-Term Debt Repaid. . . . . . . . . . . . . .(2,436.3)(1,602.2)
Dividends Paid . . . . . . . . . . . . . . . . (74.2) (66.1)
Net Cash Provided (Used) in Financing Activities. . . . (217.7) 97.2
NET INCREASE IN CASH AND EQUIVALENTS . . . . . . . . . 7.0 70.2
Cash and Equivalents at Beginning of Period. . . . . . . 189.5 181.9
CASH AND EQUIVALENTS AT END OF PERIOD. . . . . . . . .$ 196.5 $252.1
SUPPLEMENTAL CASH FLOW INFORMATION
Interest Paid . . . . . . . . . . . . . . . .$ 523.2 $430.6
Income Taxes Paid . . . . . . . . . . . . . . . 140.5 107.9
See Notes to Financial Statements.
BENEFICIAL CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting policies used in the preparation of the unaudited quarterly
financial statements are consistent with accounting policies described in the
notes to financial statements contained in the Company's 1994 Form 10-K to
Shareholders. In the opinion of management, all adjustments, consisting of
normal recurring adjustments, necessary for a fair presentation have been
reflected. Certain prior period amounts have been reclassified to conform with
the 1995 presentation. Interim results are not necessarily indicative of
results for a full year.
2. FINANCE RECEIVABLES
Finance receivables consisted of the following (in millions):
September 30, December 31,
1995 1994
Receivables Owned:
Real Estate Secured. . . . . . . . $ 6,479.8 $ 6,859.5
Personal Unsecured . . . . . . . . 2,648.3 2,485.9
Credit Cards . . . . . . . . . . 2,340.4 2,061.7
Sales Finance Contracts . . . . . . 830.1 810.4
Commercial. . . . . . . . . . . 104.4 105.1
Total Owned 12,403.0 12,322.6
Receivables Sold with Servicing Retained
(all real estate secured) . . . . . 1,264.9 630.4
Total Owned and Serviced . . . . . . . $13,667.9 $12,953.0
3. ALLOWANCE FOR CREDIT LOSSES
An analysis of the allowance for credit losses follows (in millions):
1995
Balance at January 1 . . . . . . . . . . . . . $331.6
Accounts Charged Off . . . . . . . . . . . . . (167.3)
Recoveries on Accounts Previously Charged Off . . . . . 27.5
Provision for Credit Losses . . . . . . . . . . . 163.4
Other . . . . . . . . . . . . . . . . . . 3.9
Balance at September 30 . . . . . . . . . . . . $359.1
BENEFICIAL CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
4. INVESTMENT SECURITIES
Investment securities were as follows (in millions):
September 30, 1995 December 31, 1994
Carrying Market Carrying Market
Value Value Value Value
AVAILABLE-FOR-SALE
Debt Securities:
Corporate $ 347.5 $ 347.5 $ 267.1 $ 267.1
Mortgage-backed 116.0 116.0 121.6 121.6
Municipal 4.1 4.1 3.8 3.8
U.S. Government 116.7 116.7 62.7 62.7
Foreign Government 37.1 37.1 34.9 34.9
621.4 621.4 490.1 490.1
Equity Securities 6.8 6.8 7.4 7.4
Total $ 628.2 $ 628.2 $ 497.5 $ 497.5
HELD-TO-MATURITY
Debt Securities:
Corporate $ 484.5 $ 485.7 $ 448.0 $ 402.7
Mortgage-backed 230.7 233.1 236.1 222.1
Municipal 22.4 22.5 22.4 20.5
U.S. Government 64.8 66.2 55.1 53.0
Foreign Government 34.7 34.7 31.4 28.2
Other 16.1 16.1 15.8 15.8
Total $ 853.2 $ 858.3 $ 808.8 $ 742.3
TOTAL INVESTMENT SECURITIES $1,481.4 $1,486.5 $1,306.3 $1,239.8
5. SHORT-TERM DEBT
Short-term debt outstanding consisted of the following (in millions):
September 30, December 31,
1995 1994
Commercial Paper. . . . . . . . . . $3,159.3 $3,209.5
Bank Borrowings . . . . . . . . . . 493.8 264.4
Total . . . . . . . . . . . $3,653.1 $3,473.9
The weighted average interest rates (including the costs of maintaining
lines of credit) on short-term borrowings during the nine months ended September
30 were as follows:
1995 1994
U.S. Dollar Borrowings. . . . . . . . 6.17% 4.05%
Other Currency Borrowings. . . . . . . 7.40 5.67
Overall. . . . . . . . . . . . . 6.44 4.25
BENEFICIAL CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
6. LONG-TERM DEBT
Long-term debt is shown below in the earliest year it could become payable
(in millions):
Weighted Average
Interest Rates at September 30, December31,
Maturity September 30, 1995 1995 1994
1995 7.93% $ 270.9 $2,499.8
1996 6.82 1,741.1 1,070.8
1997 7.24 1,516.7 976.3
1998 8.03 1,061.0 877.3
1999 7.70 894.1 867.6
2000-2004 7.89 1,184.8 812.1
2005-2023 7.45 295.6 221.3
Unamortized Discount (.3) (.4)
Total $6,963.9 $7,324.8
The weighted average interest rates (including issuance costs) on the
Company's long-term debt during the nine months ended September 30 were as
follows:
1995 1994
U.S. Dollar Borrowings. . . . . . . . 7.63% 7.42%
Other Currency Borrowings. . . . . . . 7.42 6.71
Overall. . . . . . . . . . . . . 7.62 7.35
Long-term debt outstanding at September 30, 1995, and December 31, 1994,
includes $1,917.1 million and $2,191.5 million, respectively, of variable-rate
debt that reprices based on various indices. Such variable-rate debt generally
has an original maturity of one-to-two years.
BENEFICIAL CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
7. DERIVATIVE FINANCIAL INSTRUMENTS
The Company enters into foreign exchange forward agreements and options to
hedge its net investment in foreign subsidiaries. At September 30, 1995, and
December 31, 1994, the Company had purchased options to deliver British pounds
and Canadian dollars in exchange for US$403.7 million and US$372.1 million,
respectively. Concurrently, the Company had sold options to buy British pounds
and Canadian dollars in exchange for US$406.8 million and US$372.7 million in
1995 and 1994, respectively. Additionally, at September 30, 1995, and December
31, 1994, the Company had forward sales of German marks obligating the Company
to deliver DM111.0 million and DM140.0 million, respectively, for US$75.5
million and US$90.2 million. The Company also had one forward sale of British
pounds as of September 30, 1995, obligating the Company to deliver GBP2.5 million
in exchange for US$3.8 million. In 1995, options entered into in 1994 to buy
German marks for US$8.4 million and deliver German marks for US$8.4 million
expired.
The Company accrued pretax losses of $7.0 million at September 30, 1995,
and pretax gains of $6.2 million at December 31, 1994, on open hedges. All
hedge gains and losses, including the mark to spot on open options and forwards,
are recognized in a separate component of equity. There were no gains or losses
recognized in net income attributable to the above hedging activities.
The Company utilizes interest-rate swaps to allow it to match fund its
variable- and fixed-rate receivables and to manage basis risk. The amounts to
be paid or received under the agreements are accrued in interest expense
consistent with the terms of the agreements. At September 30, 1995, accrued
interest payable related to these interest-rate swaps totaled $32.0 million,
which is largely offset by $28.0 million of accrued interest receivable. The
swap activities resulted in a $4.1 million increase in interest expense during
the nine months ended September 30, 1995. On an annualized basis, this increased
the Company's weighted average borrowing rate by .05%.
The following table summarizes the interest-rate swaps outstanding at
September 30, 1995:
Weighted Average Weighted
Notional Interest Rates Average
Amount Pay Receive Maturity*
(millions)
Pay fixed-rate - receive floating-rate $ 784.4 7.31% 6.58% 2.0
Pay floating-rate - receive fixed-rate 335.0 6.63 7.35 5.5
Pay floating-rate - receive floating-rate 1,546.0 5.90 6.11 1.2
Total $2,665.4 6.40% 6.40% 2.0
* Remaining Term in years.
BENEFICIAL CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
8. EARNINGS PER COMMON SHARE
Computations of primary and fully diluted earnings per common share are as
follows:
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
(in millions, except per share amounts)
PRIMARY EARNINGS
Net Income. . . . . . . . . . . $60.1 $51.4 $143.6 $168.5
Dividends on Preferred Stock. . . . . (1.3) (1.3) (3.9) (3.9)
Net Income Applicable to Common Stock. . $58.8 $50.1 $139.7 $164.6
Weighted Average Shares Outstanding:
Common . . . . . . . . . . . 52.6 51.9 52.4 51.8
Common Stock Equivalents . . . . . 1.0 .8 1.0 .8
Total . . . . . . . . . . . 53.6 52.7 53.4 52.6
Primary Earnings per Common Share. . . . $1.10 $ .95 $ 2.62 $3.13
FULLY DILUTED EARNINGS
Net Income. . . . . . . . . . . $60.1 $51.4 $143.6 $168.5
Dividends on Non-Convertible
Preferred Stock . . . . . . . . (1.3) (1.3) (3.8) (3.8)
Net Income Applicable to Common Stock. . $58.8 $50.1 $139.8 $164.7
Weighted Average Shares Outstanding:
Common . . . . . . . . . . . 52.6 51.9 52.4 51.8
Common Stock Equivalents . . . . . 1.6 1.2 1.6 1.2
Total . . . . . . . . . . . 54.2 53.1 54.0 53.0
Fully Diluted Earnings per Common Share. . $1.08 $ .94 $ 2.59 $3.11
BENEFICIAL CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
9. RATIO OF EARNINGS TO FIXED CHARGES
Nine Months Ended
(dollar amounts in millions) September 30,
1995 1994
Net Income. . . . . . . . . . . . . $143.6 $168.5
Add Provision for Income Taxes . . . . . . 99.8 120.5
Earnings Before Income Taxes . . . . . 243.4 289.0
Fixed Charges:
Interest and Debt Expense . . . . . . . 610.3 486.7
Interest Factor Portion of Rentals . . . . 16.7 12.1
Total Fixed Charges . . . . . . . . 627.0 498.8
Earnings Before Income Taxes and Fixed Charges $870.4 $787.8
Ratio of Earnings to Fixed Charges . . . . 1.39 1.58
In computing the ratio of earnings to fixed charges, earnings consist of
net income to which has been added income taxes and fixed charges. Fixed
charges consist principally of interest on all indebtedness and that portion of
rentals considered to represent an appropriate interest factor.
BENEFICIAL CORPORATION AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Financial Condition
Reflecting the sale of $1.1 billion of variable-rate home equity loans
through a securitization in the capital markets during the first quarter this
year, the Company's leverage (the ratio of interest-bearing debt to equity)
improved to 7.57 to 1 at September 30, 1995, from 8.18 to 1 at year-end 1994.
As a result of the securitization, finance receivables owned increased only
$80 million during the first nine months of 1995, compared to an increase of
$409 million during the same period in 1994, which reflected a $757 million
securitization. Foreign exchange translation adjustments added $71 million to
reported growth this year, compared to $86 million in the prior year. During
the third quarter, finance receivables increased $408 million compared to an
exceptional $542 million gain during the third quarter of 1994. Removing the
impact of foreign exchange translation, owned receivables gained $415 million in
this year's third quarter compared to a $504 million gain in the prior year
quarter.
Total managed receivables (both owned and serviced) increased $644 million
(before foreign exchange translation impact) during the first nine months of
1995, compared to a gain of $856 million in the comparable 1994 period. Slower
growth this year in real estate secured products, which grew $143 million in
1995 compared to $364 million in 1994, accounted for the unfavorable comparison.
At September 30, 1995, the allowance for credit losses as a percentage of
finance receivables owned was 2.90%, compared to 2.69% at December 31, 1994. At
the September 30 level, the reserve covered annualized nine month net chargeoffs
1.9 times, compared to 2.2 times (excluding the German charge) at year-end 1994.
As a percentage of average finance receivables, annualized net chargeoffs
represented 1.48% of the portfolio in the first nine months of 1995, compared to
1.26% in the same period of 1994. All loan and sales finance balances
delinquent two months and greater on a contractual basis represented 3.19% of
finance receivables at September 30, 1995, compared to 2.56% a year earlier and
2.46% at year-end 1994. The increases in the chargeoff and delinquency ratios
largely reflect the anticipated maturing of the large private-label credit card
portfolio, as well as overall mix changes in the portfolio towards a greater
proportion of unsecured loans. The chargeoff ratio on the unsecured loan
portfolio has increased this year, but profits remain strong because of the high
yields on these loans.
Results of Operations
Reflecting wider lending margins and increased other revenue, third quarter
1995 earnings were up 17% over the 1994 third quarter. For the first nine
months of 1995, however, earnings fell 15% to $143.6 million from $168.5 million
in the same period in 1994, as this year's earnings suffered from a large refund
anticipation loan (RAL) loss provision in the first quarter. For the nine
months, the prior year included pretax earnings of $42 million from the RAL
business, while this year reflected a pretax loss of $64 million.
As previously announced, the RAL business was severely impacted this year
when the Internal Revenue Service released payment of the earned income tax
credit portion of thousands of refunds directly to taxpayers who had already
received these refunds through the RAL program, rather than to the Company's
banking subsidiary to repay the loan as directed by the taxpayer. Due to the
IRS action, the Company recorded a $65 million pretax loss ($39 million net
aftertax) for the RAL business during the first quarter of 1995. Collections to
date indicate that this provision is adequate.
Lending spread revenue increased 11% in both the third quarter and the
first nine months of 1995 over comparable periods in 1994. As a percentage of
average receivables, the lending spread in the third quarter of 1995 increased
to 10.16% from 10.03% in the prior year third quarter and for the nine months
improved to 9.64% from 9.62% in 1994. For the third quarter, the gross yield as
a percentage of average receivables increased to 16.72% this year from 16.12% a
year earlier, reflecting a larger proportion of unsecured loans in the
portfolio. On the same basis, the cost of funds also increased, reaching 6.56%
in 1995 compared to 6.09% last year. For the nine months, the gross yield on
average receivables increased to 16.35% from 15.54% in 1994, reflecting growth
in higher-yielding private-label credit card and personal loan portfolios. This
improvement was largely offset by an increase in the cost of funds, which
increased to 6.71% from 5.92% during the year earlier period.
Other revenues increased 53% during the third quarter, but declined 16%
during the first nine months of 1995, in comparison to the comparable periods in
1994. Other revenues in the third quarter of this year benefited from
significantly increased loan servicing revenues, while the first half of the
year suffered from the previously mentioned RAL loss provision.
Pretax earnings from insurance operations for the third quarter were up 5%
to $20.0 million from $19.0 million in the third quarter of 1994. For the nine
months, pretax insurance earnings increased 8% to $56.7 million from $52.6
million during the same period in 1994. Insurance profits continue to benefit
from much stronger credit insurance premium production and improved loss ratios.
The provision for credit losses was up 45% and 25% for the third quarter
and first nine months, respectively, in 1995 compared to the same periods in
1994, reflecting sharply higher net chargeoffs in 1995. The increase in
chargeoffs largely reflects the maturing of a large private-label credit card
portfolio and overall mix changes in the portfolio towards a somewhat greater
proportion of unsecured loans.
Other operating expenses were up 16% and 17%, respectively, in the third
quarter and first nine months of this year compared to the 1994 periods,
generally reflecting normal year-to-year increases attributable to growth. The
Company is making concerted efforts to improving operating efficiencies of all
operations. Towards that end, the Company is implementing expense reduction
efforts in U.S. operations, particularly at headquarters, which will result in a
small charge in the fourth quarter.
Beneficial has received strong indications of interest in its German
consumer banking operation, BFK Bank AG ("BFK"), which is in the process of
being sold. Due diligence is now taking place. In addition, negotiations and
other liquidation efforts related to the previously disclosed Germany Fundus
loan portfolio are under way. While the ultimate outcome of the planned sale of
BFK and the liquidation of the Fundus portfolio are uncertain, the Company's
financial statements include reserves for such matters based on management's
estimate of the outcome. There continues to be, nevertheless, the possibility
of additional charges relating to BFK at year-end because of the planned sale of
BFK and ultimate liquidation of the Fundus loan portfolio.
Liquidity
The principal sources of cash are collections of finance receivables,
proceeds from the issuance of short- and long-term debt, and cash provided
through operations. Also, the Company derives a constant source of liquidity
from maturities and repayments of its receivables. The monthly collections of
cash principal as a percentage of average receivables averaged 5.02% in the
first nine months of 1995, up from 4.53% in the first nine months of 1994. The
increase year-to-year in the percentage collected is due to a higher proportion
of credit cards in the portfolio during the current year.
Substantial additional liquidity is available through committed bank lines
that the Company maintains in support of its commercial paper borrowings and
through long-term borrowings through both private and public debt offerings.
The Company is currently negotiating a syndicated bank credit agreement for a
five-year term, which is expected to be finalized by mid-November 1995. The new
agreement will replace $2.9 billion in lines of credit with lines totaling $3.0
billion and will reduce commitment fees by approximately $1.2 million annually.
Also, subsidiaries of the Company sell, from time-to-time, home equity loans
through securitizations in the capital markets.
New Accounting Standards
In March 1995, the Financial Accounting Standards Board issued SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be disposed of," effective for fiscal years beginning after December
15, 1995. This statement requires that long-lived assets and certain
identifiable intangibles to be held and used by an entity be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. In addition, FAS 121
requires that certain long-lived assets and intangibles to be disposed of be
reported at the lower of carrying or fair value less cost to sell. The Company
will adopt this accounting standard on or before January 1, 1996, as required.
The effect is expected to be immaterial.
BENEFICIAL CORPORATION AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits
Exhibit
Number Exhibit
3.1 Copy of the Company's Restated Certificate of
Incorporation, as amended, is incorporated by reference to
Exhibit 3.1 of the Annual Report on Form 10-K for the year
ended December 31, 1994.
3.2 Copy of the Company's By-Laws, as amended, is incorporated
by reference to Exhibit 3.2 of the Annual Report on Form 10-
K for the year ended December 31, 1990.
27 Financial Data Schedule (in EDGAR filing only).
b) The Company filed the following report on Form 8-K during the
period covered by this Form 10-Q:
1) A report on Form 8-K, dated August 17, 1995, relating to an
increase in the quarterly cash dividend on the Company's common
stock by 9.3% to $.47 per share.
BENEFICIAL CORPORATION AND SUBSIDIARIES
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.
Date November 10, 1995 /s/ Ronald E. Bombolis
Ronald E. Bombolis
Sr. Vice President
and Controller
(Chief Accounting
Officer)
Date November 10, 1995 /s/ Andrew C. Halvorsen
Andrew C. Halvorsen
Member of the Office
of the President and
Director (Chief
Financial Officer)
EXHIBIT INDEX
Exhibit
Number Exhibit
3.1 Copy of the Company's Restated Certificate of
Incorporation, as amended, is incorporated by reference to
Exhibit 3.1 of the Annual Report on Form 10-K for the year
ended December 31, 1994.
3.2 Copy of the Company's By-Laws, as amended, is incorporated
by reference to Exhibit 3.2 of the Annual Report on Form 10-
K for the year ended December 31, 1990.
27 Financial Data Schedule (in EDGAR filing only).
_______________________________
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AND STATEMENT OF INCOME (BOTH DATED 9/30/95) AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 197
<SECURITIES> 0<F1>
<RECEIVABLES> 12403
<ALLOWANCES> 359
<INVENTORY> 0
<CURRENT-ASSETS> 0<F2>
<PP&E> 446<F3>
<DEPRECIATION> 265<F3>
<TOTAL-ASSETS> 14607
<CURRENT-LIABILITIES> 0<F2>
<BONDS> 6964<F4>
<COMMON> 53
0
115
<OTHER-SE> 1335<F5>
<TOTAL-LIABILITY-AND-EQUITY> 14607
<SALES> 0
<TOTAL-REVENUES> 1761<F6>
<CGS> 0
<TOTAL-COSTS> 610<F7>
<OTHER-EXPENSES> 744<F8>
<LOSS-PROVISION> 163
<INTEREST-EXPENSE> 0<F9>
<INCOME-PRETAX> 243
<INCOME-TAX> 100
<INCOME-CONTINUING> 143
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 143
<EPS-PRIMARY> 2.62
<EPS-DILUTED> 2.59
<FN>
<F1>CURRENT MARKETABLE EQUITY SECURITIES ARE NOT SEPARATELY STATED
<F2>DO NOT PREPARE CLASSIFIED BALANCE SHEET
<F3>PP&E PER BALANCE SHEET (181.4) IS SHOWN NET OF DEPRECIATION
<F4>LONG TERM DEBT PER BALANCE SHEET
<F5>INCLUDES ADDITIONAL CAPITAL (262.9), NET UNREALIZED GAIN ON INVESTMENT
(6.6), FOREIGN CURRENCY TRANSLATION ADJ (-45.7), & RETAINED EARNINGS (1111.6)
PER BALANCE SHEET = 1335.4
<F7>INTEREST EXPENSE PER INCOME STATEMENT
<F6>INCLUDES FINANCE CHARGES AND FEES (1488.2), INSURANCE PREMIUMS (109.1) AND
OTHER REVENUE (163.5) PER INCOME STATEMENT = 1760.8
<F8>INCLUDES SALARIES AND BENEFITS (288.9), INSURANCE BENEFITS (59.7) AND OTHER
(395.1) PER INCOME STATEMENT = 743.7
<F9>COMPANY'S PRIMARY COST OF GENERATING REVENUE IS INTEREST EXPENSE WHICH IS
INCLUDED IN TOTAL COSTS (ABOVE)
</FN>
</TABLE>
