PAGE 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended June 30, 1995
Commission File Number 1-6798
_____________________________________
TRANSAMERICA FINANCE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 95-1077235
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1150 South Olive Street
Los Angeles, California 90015
(Address of principal executive offices)
(Zip Code)
(213) 742-4321
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 5(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______
Number of shares of common stock, $10 par value, outstanding as of close of
business on August 11, 1995: 1,464,285 shares.
The registrant meets the conditions set forth in General Instructions
H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with the reduced
disclosure format.
<PAGE>
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PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements.
The following unaudited consolidated financial statements of Transamerica
Finance Corporation and Subsidiaries, for the periods ended June 30, 1995 and
1994, do not include complete financial information and should be read in
conjunction with the Consolidated Financial Statements filed with the
Commission in the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1994. The financial information presented in the financial
statements included in this report reflects all adjustments, consisting only of
normal recurring accruals, which are, in the opinion of management, necessary
for a fair statement of results for the interim periods presented.
On March 31, 1995, the Company acquired a portfolio of approximately 40,000
home equity loans from ITT Consumer Financial Corporation (ITT) for $1,029.3
million in cash which was funded primarily with long-term debt with the
remainder funded by short-term bank financing and a $131 million capital
contribution from its parent. For a discussion of this transaction see page 6
of this document.
On March 15, 1994, the Company acquired substantially all the operating
assets of the Container Operations of Tiphook plc ("Tiphook"), a London-based
transportation equipment rental company, including certain dry cargo
containers, tank containers, tank chassis, operating leases and other assets
(collectively the "Container Operations") for $1,061.4 million in cash. The
Company assumed certain specified liabilities of the Container Operations
including trade accounts payable. The Company did not assume any borrowings,
tax liabilities or contingent liabilities of Tiphook. The acquired fleet of
standard containers and tank containers totaled 363,000 units. The acquisition
has been accounted for as a purchase and, accordingly, the operations of
Tiphook have been included in the Consolidated Statement of Income from the
date of acquisition.
Had the acquisition of the Container Operations been accomplished as of
January 1, 1994, revenues for the Company would have been approximately $830
million for the six months ended June 30, 1994. The pro forma effect on net
income would have been immaterial. This information is for illustrative
purposes only and is not necessarily indicative of the future results of the
operations of the combined company, or of the results of the operations of
the combined company that would have actually occurred had the transaction
been in effect for the periods presented.
****
The consolidated ratios of earnings to fixed charges were computed by
dividing earnings before fixed charges and income taxes by the fixed charges.
Fixed charges consist of interest and debt expense, and one-third of rent
expense, which approximates the interest factor.
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<TABLE>
<CAPTION>
TRANSAMERICA FINANCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions, except for share data)
June 30, December 31,
1995 1994
<S> <C> <C>
ASSETS
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . $ 48.9 $ 7.7
Investments - available for sale . . . . . . . . . . . . . . . . . . . . 132.1 113.2
Finance receivables, net of unearned finance charges and insurance
premiums:
Consumer lending. . . . . . . . . . . . . . . . . . . . . . . . . 5,088.3 4,142.0
Commercial lending. . . . . . . . . . . . . . . . . . . . . . . . 2,794.0 2,772.6
---------- ---------
Net finance receivables. . . . . . . . . . . . . . . . . . . . 7,882.3 6,914.6
Less allowance for losses . . . . . . . . . . . . . . . . . . . . 244.5 203.8
---------- ---------
7,637.8 6,710.8
Property and equipment - less accumulated depreciation:
Land, buildings and equipment. . . . . . . . . . . . . . . . . . . . 48.4 47.4
Equipment held for lease . . . . . . . . . . . . . . . . . . . . . . 2,776.5 2,606.6
Investments in and advances to affiliates. . . . . . . . . . . . . . . . 152.2 259.6
Goodwill, less accumulated amortization. . . . . . . . . . . . . . . . . 345.7 351.6
Assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . 228.7 225.0
Less valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . 47.5 67.4
---------- ---------
181.2 157.6
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 807.1 700.3
---------- ---------
$ 12,129.9 $ 10,954.8
========== =========
LIABILITIES AND SHAREHOLDER'S EQUITY
Debt:
Unsubordinated . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,585.4 $ 7,730.7
Subordinated . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,092.6 993.6
---------- ---------
Total debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,678.0 8,724.3
Accounts payable and other liabilities . . . . . . . . . . . . . . . . . 598.1 541.2
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . 133.6 107.0
Shareholder's equity:
Preferred stock - authorized, 250,000 shares without par value;
none issued
Common stock - authorized, 2,500,000 shares of $10 par value;
issued and outstanding, 1,464,285 shares. . . . . . . . . . . . . 14.6 14.6
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . 1,596.1 1,455.7
Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . 109.7 124.3
Net unrealized loss from investments marked to fair value. . . . . . 3.8 (3.2)
Foreign currency translation adjustments . . . . . . . . . . . . . . (4.0) (9.1)
---------- ---------
Total shareholder's equity. . . . . . . . . . . . . . . . . . . . 1,720.2 1,582.3
---------- ---------
$ 12,129.9 $ 10,954.8
========== =========
<PAGE>
PAGE 4
</TABLE>
<TABLE>
<CAPTION>
TRANSAMERICA FINANCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(dollar amounts in millions)
Six Months Ended June 30, Three Months Ended June 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
REVENUES
Finance charges. . . . . . . . . . . . . . . . . $ 551.4 $ 478.7 $ 291.6 $ 247.5
Leasing revenues . . . . . . . . . . . . . . . . 343.0 278.2 174.0 164.6
Servicing fees . . . . . . . . . . . . . . . . . - 0.2 - 0.1
Income from affiliates . . . . . . . . . . . . . 4.8 8.6 2.2 4.3
Other. . . . . . . . . . . . . . . . . . . . . . 39.4 23.9 18.3 13.1
--------- --------- --------- --------
Total revenues . . . . . . . . . . . . . . . . . 938.6 789.6 486.1 429.6
--------- --------- --------- --------
EXPENSES
Interest and debt expense. . . . . . . . . . . 308.7 220.8 162.0 118.9
Depreciation on equipment held for lease . . . 116.2 85.4 59.3 52.8
Salaries and other operating expenses. . . . . 296.3 284.9 152.0 151.7
Provision for losses on receivables. . . . . . 50.3 46.7 24.8 23.5
--------- --------- --------- --------
Total expenses . . . . . . . . . . . . . . 771.5 637.8 398.1 346.9
--------- --------- --------- --------
Income before income taxes . . . . . . . . . . 167.1 151.8 88.0 82.7
Income taxes . . . . . . . . . . . . . . . . . 67.5 62.1 35.3 33.8
--------- --------- --------- --------
Net income . . . . . . . . . . . . . . . . . . $ 99.6 $ 89.7 $ 52.7 $ 48.9
========= ========= ========= =========
Ratio of earnings to fixed charges . . . . . . 1.53 1.66
<CAPTION>
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
(in millions)
<S> <C> <C>
Balance at beginning of year . . . . . . . . . $ 124.3 $ 87.1
Net income . . . . . . . . . . . . . . . . . . 99.6 89.7
Dividends declared . . . . . . . . . . . . . . (114.2) (75.0)
---------- ----------
Balance at end of period . . . . . . . . . . . $ 109.7 $ 101.8
========== ==========
<PAGE>
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</TABLE>
<TABLE>
<CAPTION>
TRANSAMERICA FINANCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
Six Months Ended June 30,
1995 1994
<S> <C> <C>
OPERATING ACTIVITIES
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 99.6 $ 89.7
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization of goodwill. . . . . . . . . . . . . 129.0 97.3
Provision for losses on receivables. . . . . . . . . . . . . . . . 50.3 46.7
Amortization of discount on long-term debt . . . . . . . . . . . . 4.1 12.5
Change in accounts payable and other liabilities . . . . . . . . . 44.9 103.3
Change in income taxes payable . . . . . . . . . . . . . . . . . . 22.8 28.4
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.8 9.1
-------- --------
Net cash provided by operating activities . . . . . . . . . . . 410.5 387.0
-------- --------
INVESTING ACTIVITIES
Finance receivables originated or purchased. . . . . . . . . . . . . . (8,391.2) (7,580.9)
Finance receivables collected or sold. . . . . . . . . . . . . . . . . 8,284.8 7,362.9
Purchase of property and equipment . . . . . . . . . . . . . . . . . . (310.0) (242.2)
Sales of property and equipment. . . . . . . . . . . . . . . . . . . . 41.5 13.6
Purchase of investments. . . . . . . . . . . . . . . . . . . . . . . . (8.7) (5.5)
Sales or maturities of investments . . . . . . . . . . . . . . . . . . .6 2.4
Decrease in investments in and advances to affiliates. . . . . . . . . 107.4 70.7
Purchase of finance receivables and other assets
from ITT Consumer Financial Corporation. . . . . . . . . . . . . . (1,029.3)
Purchase of the container division assets of Tiphook plc . . . . . . . (1,061.4)
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19.8) (21.8)
-------- --------
Net cash used by investing activities . . . . . . . . . . . . . (1,324.7) (1,462.2)
-------- --------
FINANCING ACTIVITIES
Proceeds from debt financing . . . . . . . . . . . . . . . . . . . . . 5,172.2 4,829.2
Payments of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,234.7) (3,762.2)
Capital contribution from parent company . . . . . . . . . . . . . . . 131.0 82.1
Cash dividends paid. . . . . . . . . . . . . . . . . . . . . . . . . . (113.1) (75.0)
-------- --------
Net cash provided by financing activities . . . . . . . . . . . 955.4 1,074.1
Increase (decrease) in cash and cash equivalents . . . . . . . . . . . 41.2 (1.1)
Cash and cash equivalents at beginning of year . . . . . . . . . . . . 7.7 29.3
-------- --------
Cash and cash equivalents at end of period . . . . . . . . . . . . . . $ 48.9 $ 28.2
========= ========
<PAGE>
PAGE 6
</TABLE>
<TABLE>
<CAPTION>
TRANSAMERICA FINANCE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS
OF OPERATIONS
The following table sets forth revenues and net income by line of business for the periods indicated (in
millions):
Six Months Ended June 30,
Revenues Net Income
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Consumer lending. . . . . . . . . . . . . . . . . . . $ 375.7 $ 337.1 $ 40.6 $ 45.2
Commercial lending. . . . . . . . . . . . . . . . . . 202.8 167.2 30.5 21.1
Leasing. . . . . . . . . . . . . . . . . . . . . . . 357.8 285.2 35.1 28.7
Unallocated items. . . . . . . . . . . . . . . . . . 2.3 0.1 (.8) 0.5
Amortization of goodwill. . . . . . . . . . . . . . . (5.8) (5.8)
--------- --------- ---------- ----------
Total revenues and net income. . . . . . . . . . $ 938.6 $ 789.6 $ 99.6 $ 89.7
========= ========= ========== ==========
Consumer Lending
On March 31, 1995, the consumer lending operation purchased from ITT net consumer finance
receivables of $1,011 million with an estimated fair value of $955 million and repossessed assets with an
estimated fair value of $28.7 million for $1,029.3 million in cash. The purchased receivables were all real
estate secured, of which 14% were located in California. The $109.1 million excess of the cash purchase
price over the estimated fair value of the acquired tangible assets (net of assumed liabilities of $11 million
associated with the portfolio) was included in other assets as customer renewal rights. The consumer
lending operation did not assume any borrowings, tax liabilities or contingent liabilities of ITT. The
purchase price has been allocated to the assets acquired based on the best information currently available as
to the fair value of those assets. Pending completion of review the purchase price allocation may be
revised.
Consumer lending net income for the first half and second quarter of 1995 was $40.5 million and $22.9
million compared to $45.2 million and $24.0 million for the comparable periods of 1994.
Consumer lending income, before the amortization of goodwill, for the first half and second quarter of
1995 decreased $4.6 million (10%) and $1.1 million (5%) from the first half and second quarter of 1994.
Results include the effects of the acquisition from ITT. The declines were mainly due to reduced fee
income and an increased provision for losses on receivables, partially offset by earnings from the additional
receivables acquired from ITT. In 1994, increased competition (principally in California) produced a high
level of refinancing activity. Consequently, prepayment fee income was greater in the second quarter and
first half of 1994 in comparison to the second quarter and first half of 1995. In response to the
competition, the company introduced lower rates in 1994 which produced a higher level of customer
renewals and related fee income in 1994 but a lower level of interest income in 1995.
Revenues increased $38.6 million (11%) and $29.6 million (17%) in the first half and second quarter of
1995 compared to 1994's first half and second quarter mainly due to the effects of the ITT acquisition.
Higher interest income resulting from higher average finance receivables outstanding, which more than
offset the effects of lower rates and fee income, also contributed to the 1995 revenue increases.
<PAGE>
PAGE 7
Interest expense increased $33.8 million (28%) and $24.1 million (40%) in
the first half and second quarter of 1995 over the comparable 1994 periods as
a result of the higher levels of finance receivables outstanding and an
increase in short-term interest rates. The provision for losses on
receivables increased $6.4 million (18%) and $2.3 million (12%) in the first
half and second quarter of 1995 over the comparable 1994 periods due to
increases in credit losses that more than offset the effects of declines in
receivable growth excluding the ITT acquisition. Credit losses, net of
recoveries, on an annualized basis as a percentage of average consumer finance
receivables outstanding, net of unearned finance charges, were 1.76% and
1.71% (1.95% and 2.08% excluding the effects of the ITT acquisition on the
average receivables outstanding) for the first half and second quarter of
1995 compared to 1.81% and 1.72% for the comparable periods of 1994.
Consumer lending receivables grew 23% in the first half of 1995 due
principally to the portfolio purchased from ITT. Excluding the loans acquired
from ITT, receivable growth was 1%. Net consumer finance receivables
outstanding at June 30, 1995, including the receivables purchased from ITT,
included $4.3 billion of real estate secured loans, principally first and
second mortgages secured by residential properties, of which 38% are located
in California. Real estate loans originated in the second quarter of 1995
were $236.7 million compared to $526.1 million in the second quarter of 1994,
due to a decline in renewal volume (which was caused in part by a return to
higher rates in 1995) and increased competition.
Delinquent finance receivables, which are defined as receivables
contractually past due 60 days or more, were $197.4 million (3.71% of finance
receivables outstanding) at June 30, 1995 compared to $201.1 million (3.73% of
finance receivables outstanding) at March 31, 1995 and $90.2 million (2.08% of
finance receivables outstanding) at December 31, 1994. The $107.2 million
increase from December 31, 1994 to June 30, 1995 includes $94.2 million
relating to the ITT portfolio. Excluding the effects of the ITT acquisition,
delinquency at June 30, 1995 would have been approximately 2.35%. Management
has established an allowance for losses equal to 3.37% of net consumer finance
receivables outstanding at June 30, 1995 compared to 2.83% at
December 31, 1994; the increase in the percentage is due to the acquisition
of the ITT portfolio. The higher delinquency in the ITT portfolio reflects
the seller's previous emphasis on managing cash collections on a recency of
payments basis rather than emphasizing improvements in collections on a
contractual basis.
When foreclosure proceedings begin on an account secured with real estate,
the account is moved from finance receivables to other assets and is written
down to the estimated realizable value of the collateral if less than the
account balance. After foreclosure, repossessed assets are carried at the
lower of cost or fair value less estimated selling costs. Accounts in
foreclosure and repossessed assets held for sale totaled $248.1 million at
June 30, 1995, of which 71% pertains to California, compared to $226.1 million
at December 31, 1994, of which 80% pertained to California. The $22 million
increase includes $21.6 million relating to the ITT portfolio, of which 38%
pertains to California. Because future improvements may be impacted by factors
such as economic conditions and the state of the real estate market,
particularly in California, the extent and timing of any change in the trend
of foreclosures and repossessed assets remains uncertain.
Commercial Lending
Commercial lending net income for the first half of 1995 was $25.8 million
compared to $16.3 million for the first half of 1994. Income, before the
amortization of goodwill, for the first half of 1995 increased
$9.5 million (45%) over 1994's first half. The increase, which resulted
mainly from increased margins, included a $2.8 million after tax gain from the
sale of a portfolio of consumer rediscount loans in the first quarter 1995.
Margins improved as a result of the greater spread between the indices at
which the commercial lending operation loaned to customers and the indices at
which funds were borrowed and higher average net receivables in the inventory
finance group. Lower operating expenses and a lower provision for losses also
contributed to the increase.
<PAGE>
PAGE 8
Revenues in the first half of 1995 increased $35.7 million (21%) from the
corresponding period of 1994 mainly due to a higher average portfolio yield
attributable to higher interest rates.
Interest expense increased $24.3 million (46%) in the first half of 1995
over the comparable 1994 period due to a higher average interest rate on
borrowings. Operating expenses declined $400 thousand (1%) from prior year.
The provision for losses on receivables declined $2.9 million (27%) in the
first half principally due to the sale of the consumer rediscount loan
portfolio in the first quarter 1995. Credit losses, net of recoveries, on a
annualized basis as a percentage of average commercial finance receivables
outstanding, net of unearned finance charges, were .33% for the first half of
1995 compared to .31% for the comparable period of 1994.
Net commercial finance receivables outstanding increased $21.4 million (1%)
from December 31, 1994. Receivable growth in inventory finance due to
increased volume more than offset decreases in net receivables due to the
sale of the consumer rediscount portfolio in February 1995 with a net
receivable outstanding balance of $118 million, and the reclassification of
$47.5 million in net receivables outstanding to assets held for sale, which
is included in other assets on the consolidated balance sheet, resulting from
the commercial lending operation's decision in March 1995 to exit its
operations in Puerto Rico. Management has established an allowance for
losses equal to 2.61% of net commercial finance receivables outstanding as
of June 30, 1995 compared to 3.12% at December 31, 1994. This decrease is
primarily the result of reclassifying the Puerto Rico receivables, which had
a larger reserve requirement, to assets held for sale.
Delinquent receivables, which are defined as the instalment balance for
inventory finance and business credit receivables and the receivable balance
for all other receivables over 60 days past due, were $8.0 million (0.28% of
receivables outstanding) at June 30, 1995 compared to $17.7 million (0.63% of
receivables outstanding) at December 31, 1994. Delinquent receivables
declined primarily due to the reclassification of the Puerto Rico receivables
portfolio to assets held for sale.
Nonearning receivables, which are defined as balances from borrowers that
are over 90 days delinquent or at such earlier time as full collectibility
becomes doubtful, were $17.0 million (0.60% of receivables outstanding) at
June 30, 1995 compared to $21.9 million (0.78% of receivables outstanding) at
December 31, 1994. Nonearning receivables declined primarily due to the
reclassification of the Puerto Rico receivables portfolio to assets held for
sale.
Assets held for sale as of June 30, 1995 totaled $24.8 million, net of a
$45.3 million valuation allowance, and consisted of Puerto Rico assets of
$53.2 million, other assets of $11.1 million, and rent-to-own receivables of
$5.8 million. Assets held for sale at December 31, 1994 totaled $10.9
million, net of a $65.1 million valuation allowance, and consisted of
rent-to-own finance receivables of $72.4 million and other assets of $3.6
million. Of the finance receivables held for sale at June 30, 1995, $6.2
million were classified as delinquent and $4.6 million were classified as
nonearning compared to $24.5 million classified as both delinquent and
nonearning at December 31, 1994.
Leasing
Leasing net income for the first half and second quarter of 1995 was
$34.1 million and $18.3 million compared to $27.7 million and $15.2 million
for the first half and second quarter of 1994.
Leasing income, before the amortization of goodwill, for the first half
and second quarter of 1995, increased $6.4 million (22%) and
$3.1 million (19%) over the first half and second quarter of 1994 mainly
due to more on hire standard, tank and refrigerated containers and
European trailers. In addition, higher gains were experienced on the sale of
equipment and increased earnings in the finance lease business due to a
larger lease portfolio. Partially offsetting these increases were lower
earnings in the rail trailer business which experienced a downturn in
utilization. Earnings also benefitted from a $1.8 million after tax
settlement of an outstanding state tax issue.
<PAGE>
PAGE 9
Revenues for the first half and second quarter of 1995 increased
$72.6 million (26%) and $13.6 million (8%) over the corresponding 1994 periods.
The increases were primarily due to a larger standard and tank
container fleet, principally as a result of the acquisition of the container
division assets of Tiphook plc in March 1994 and more on hire standard, tank
and refrigerated containers and European trailers. Partially offsetting these
increases were lower revenues in the rail trailer business.
Expenses increased $62.1 million (26%) in the first half of 1995 over 1994's
first half mainly due to higher ownership and operating costs resulting from
the acquisition in March 1994 of the Tiphook plc container and tank fleet.
Expenses increased $8.9 million (6%) in the second quarter of 1995 over 1994's
second quarter mainly due to ownership costs associated with a larger fleet
than in the second quarter of 1994 and a higher effective interest rate,
offset in part by lower operating and administrative expenses.
The combined utilization of standard containers, refrigerated containers,
domestic containers, tank containers and chassis averaged 85% for the first
half and 86% for the second quarter of 1995 compared to 81% for the first
half and 80% for the second quarter of 1994. Rail trailer utilization was
75% and 72% for the first half and second quarter of 1995 compared to 92% and
94% for the first half and second quarter of 1994. European trailer
utilization was 96% for the first half and 95% for the second quarter of 1995
compared to 96% for both the first half and second quarter of 1994.
Derivatives
The operations of the Company are subject to risk of interest rate
fluctuations to the extent that there is a difference between the cash flows
from the Company's interest-earning assets and the cash flows related to
its liabilities that mature or are repriced in specified periods. In the
normal course of its operations, the Company hedges some of its interest rate
risk with derivative financial instruments. These derivatives comprise
primarily interest rate swap agreements. Derivative financial instruments
with a notional amount of $648.3 million at June 30, 1995 and $744.1 million
at December 31, 1994 and designated as hedges of the Company's liabilities
were outstanding.
While the Company is exposed to credit risk in the event of nonperformance
by the other party, nonperformance is not anticipated due to the credit rating
of the counterparties. At June 30, 1995, the interest rate swap agreements
are with financial institutions rated A or better by one or more of the major
credit rating agencies. At June 30, 1995, the fair value of the Company's
derivative financial instruments was a net obligation of $10.7 million
comprising agreements with aggregate gross obligations of $12.4 million and
agreements with aggregate gross benefits of $1.7 million.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Omitted in accordance with General Instructions H. See "Management's
Discussion and Analysis of the Results of Operations" following the financial
statements of the Registrant (Item I).
<PAGE>
PAGE 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits.
EX-12 Computation of Ratio of Earnings to Fixed Charges.
EX-27 Financial Data Schedule.
b) Reports on Form 8-K. None.
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.
TRANSAMERICA FINANCE CORPORATION
(Registrant)
By JOHN LORENTZ
Assistant Secretary and
Acting Chief Accounting Officer
Date: August 14, 1995
</TABLE>
EXHIBIT 12
TRANSAMERICA FINANCE CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Six Months Ended June 30,
1995 1994
(dollar amounts in millions)
Fixed charges:
Interest and debt expense. . . . . . . . . $ 308.7 $ 220.8
One-third of rent expense. . . . . . . . . 7.5 10.0
Total . . . . . . . . . . . . . . . . . $ 316.2 $ 230.8
Earnings:
Income before income taxes . . . . . . . . $ 167.1 $ 151.8
Fixed charges. . . . . . . . . . . . . . . 316.2 230.8
Total . . . . . . . . . . . . . . . . . $ 483.3 $ 382.6
Ratio of earnings to fixed charges . . . . . . 1.53 1.66
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<ARTICLE> 5
<MULTIPLIER> 1,000,000
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 49
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 2,825
<DEPRECIATION> 0
<TOTAL-ASSETS> 12,130
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 15
0
0
<OTHER-SE> 1,706
<TOTAL-LIABILITY-AND-EQUITY> 12,130
<SALES> 0
<TOTAL-REVENUES> 939
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 413
<LOSS-PROVISION> 50
<INTEREST-EXPENSE> 309
<INCOME-PRETAX> 167
<INCOME-TAX> 68
<INCOME-CONTINUING> 100
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 100
<EPS-PRIMARY> 0
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</TABLE>
