-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Duu3Ea6f3egWmXycTt641SfkmDRBm4TatVx8kzGu3VGAKZuBWmP8SQP1MjsjH9+O Kw7zbf6ijfNk51TF8KgPNQ== 0000950147-99-000040.txt : 19990120 0000950147-99-000040.hdr.sgml : 19990120 ACCESSION NUMBER: 0000950147-99-000040 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990115 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990119 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FINOVA CAPITAL CORP CENTRAL INDEX KEY: 0000043960 STANDARD INDUSTRIAL CLASSIFICATION: SHORT-TERM BUSINESS CREDIT INSTITUTIONS [6153] IRS NUMBER: 941278569 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-07543 FILM NUMBER: 99507587 BUSINESS ADDRESS: STREET 1: 1850 N CENTRAL AVE STREET 2: PO BOX 2209 CITY: PHOENIX STATE: AZ ZIP: 85004-2209 BUSINESS PHONE: 6022076900 MAIL ADDRESS: STREET 1: 1850 N. CENTRAL AVENUE STREET 2: P.O. BOX 2209 CITY: PHOENIX STATE: AZ ZIP: 85002-2209 FORMER COMPANY: FORMER CONFORMED NAME: GREYHOUND FINANCIAL CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: GREYHOUND LEASING & FINANCIAL CORP DATE OF NAME CHANGE: 19870330 8-K 1 CURRENT REPORT DATED JANUARY 15, 1999 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C, 20549 -------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): January 15, 1999 ---------------- FINOVA CAPITAL CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) DELAWARE 1-11011 94-1278569 - ---------------------------- ----------- ------------------ (State or Other Jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) Identification No.) 1850 NORTH CENTRAL AVENUE, P. O. BOX 2209, PHOENIX, ARIZONA 85004-2209 - ----------------------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 602/207-6900 ------------ ITEM 5. OTHER EVENTS. FINOVA Capital Corporation announced revenues, net income and selected financial data and ratios for the fourth quarter ended December 31, 1998 (unaudited). ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits: Exhibits Title -------- ----- 28 Press Release of FINOVA Capital Corporation dated January 15, 1999 1 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. FINOVA CAPITAL CORPORATION (Registrant) Dated: January 19, 1999 By /s/ Bruno A. Marszowski ----------------------------------------------- Bruno A. Marszowski, Senior Vice President, Chief Financial Officer and Controller Principal Financial Officer/Authorized Officer 2 EX-28 2 PRESS RELEASE DATED JANUARY 15, 1999 EXHIBIT 28 Meilee Smythe Embargo until Senior Vice President - Treasurer 8:00 a.m. (E.S.T.) 602/ 207-2664 THESE ARE THE EARNINGS FOR FINOVA CAPITAL CORPORATION, THE PRINCIPAL SUBSIDIARY OF THE FINOVA GROUP INC., WHOSE EARNINGS WERE RELEASED JANUARY 14, 1999 FINOVA CAPITAL CORPORATION Announces 21% Increase in Net Income for 1998 PHOENIX, ARIZ., JAN. 15, 1999 - FINOVA Capital Corporation today announced record net income of $173.5 million for the year ended Dec. 31, 1998, a 21% increase over the $143.1 million reported in 1997. For the fourth quarter of 1998, net income was $47.4 million compared to $39.7 million in the fourth quarter of 1997, an increase of 19%. FINOVA Chairman and CEO Sam Eichenfield commented, "I'm extremely pleased with the performance of the company in 1998, which included improved performances by substantially all of the FINOVA businesses. The year's results further reinforce the value of having a number of diversified businesses as well as the acquisitions made in the latter part of 1997. An example of this acquired value was demonstrated by FINOVA Realty Capital which overcame difficult market conditions to originate and sell approximately $500 million of commercial mortgage backed securities (CBMS) in the fourth quarter of 1998, resulting in net CMBS gains of $23.1 million for the quarter." New business for the fourth quarter of 1998 was $3.1 billion, consisting of $1.2 billion of new leases and loans and $1.9 billion of fee-based volume, compared to total new business of $2.9 billion for the fourth quarter of 1997. For the year, new business totaled $11.2 billion compared to $7.8 billion in 1997, with the backlog of new business at $1.9 billion, a level 21% higher than Dec. 31, 1997. Operating margins grew by 15% to $148.8 million in the fourth quarter of 1998 compared to the same period in 1997, and by 21% to $550.3 million for all of 1998. Operating margins as a percentage of average earning assets remained consistent at 6.4% for both the fourth quarter and full year 1998 which compares to 6.6% and 6.2% for the respective 1997 periods. "Our portfolio grew by more than 19% for the year to $10.5 billion, culminating with an outstanding fourth quarter that grew by an annualized rate of 26%," Eichenfield said. "This substantial growth was achieved without compromising our underwriting standards thus preserving the high quality of the portfolio." Nonaccruing assets were at 2.0% of managed assets, while net write-offs for the quarter and twelve-month periods of 1998 were $19.8 million and $56.8 million, respectively, compared to $14.0 million and $43.2 million for the equivalent periods in 1997. The reserve for credit losses remained at 2.0% of managed assets and increased to 101.2% of nonaccruing assets at Dec. 31, 1998 from 94.5% at Dec. 31, 1997. Loss provisions to cover write-offs and the portfolio growth were $37.7 million in the fourth quarter of 1998 compared to $20.9 million for the comparable 1997 period. Net gains on sale of assets for the fourth quarter of 1998 totaled $30.8 million versus $7.9 million for the same period in 1997. The amount included traditional gains from the sale of residuals and other assets plus substantial gains recorded from the sale of loans via the CMBS market. As noted earlier, net gains realized from the CMBS market totaled $23.1 million during the quarter, which were net of recognized hedge losses of $7.9 million. Operating expenses for the fourth quarter and full year 1998 were $65.2 million and $241.1 million, respectively, compared to $53.3 million and $190.5 million for the same periods in 1997. The 1998 periods included expenses related to FRC, acquired in the fourth quarter of 1997, which typically run higher than FINOVA's traditional commercial finance businesses. Operating expenses as a percentage of operating margins were 43.9% and 43.8% for the fourth quarter and full year 1998, respectively, compared to 41.2% and 41.8% for the comparable 1997 periods. Excluding the FRC expenses, FINOVA's operating expense ratio would have been 41.4% and 41.1% for the fourth quarter and year ended Dec. 31, 1998, respectively. Income taxes were higher in the 1998 periods due to the increase in pre-tax income as well as to the realization of certain tax credits in the 1997 periods. FINOVA Capital Corporation is one of the nation's leading financial services companies focused on providing a broad range of capital solutions primarily to midsize business. FINOVA is headquartered in Phoenix with business development offices throughout the U.S. and in London, U.K., and Toronto, Canada. FINOVA was recently named one of FORTUNE's "Best 100 Companies To Work For In America." For more information, visit the company's website at www.finova.com. ### FINOVA Capital Corporation and Consolidated Subsidiaries Summary of Consolidated Income (Unaudited) (Dollars in Thousands) Quarter Ended Twelve Months Ended December 31, December 31, --------------------- --------------------- 1998 1997 1998 1997 ---- ---- ---- ---- Interest earned from financing transactions $ 251,005 $ 208,274 $ 905,775 $ 781,076 Operating lease income 28,095 31,756 116,202 116,920 Interest expense (131,566) (111,446) (479,360) (416,093) Operating lease depreciation (18,541) (21,203) (70,081) (72,989) --------- --------- --------- --------- Interest margins earned 128,993 107,381 472,536 408,914 Volume-based fee income 19,777 21,774 77,723 46,728 --------- --------- --------- --------- Operating margin 148,770 129,155 550,259 455,642 Provision for credit losses (37,700) (20,900) (82,200) (69,200) Gains on disposal of assets 30,781 7,854 55,024 30,261 Selling, administrative and other operating expenses (65,241) (53,262) (241,074) (190,525) --------- --------- --------- --------- Income before income taxes 76,610 62,847 282,009 226,178 Income taxes (29,173) (23,134) (108,490) (83,088) --------- --------- --------- --------- Net income $ 47,437 $ 39,713 $ 173,519 $ 143,090 ========= ========= ========= ========= FINOVA Capital Corporation Selected Consolidated Financial Data and Ratios (Unaudited) (1) (Dollars in Thousands) As of December 31, ------------------------------------- FINANCIAL POSITION: 1998 1997 1996 ---- ---- ---- Ending funds employed $10,011,536 $8,399,456 $7,298,759 Securitizations and participations sold (2) 537,596 457,967 364,546 ----------- ---------- ---------- Total managed assets 10,549,132 8,857,423 7,663,305 Reserve for credit losses 207,618 177,088 148,693 Nonaccruing assets 205,233 187,356 155,505 Nonaccruing assets as % of managed assets (3) 2.0% 2.1% 2.0% Reserve for credit losses as a % of: Ending managed assets (3) (4) 2.0% 2.0% 2.0% Nonaccruing assets 101.2% 94.5% 95.6% Total debt $ 8,394,578 $6,764,581 $5,850,223 Shareowner's equity 1,341,757 1,260,068 1,069,043 Backlog 1,935,106 1,601,218 1,477,239 Total Debt to equity 6.3x 5.4x 5.5x For the Quarter Ended For the Year Ended December 31, December 31, ------------------------ ----------------------- PERFORMANCE HIGHLIGHTS: 1998 1997 1998 1997 ---- ---- ---- ---- Average managed assets $10,305,265 $8,636,826 $9,500,539 $8,153,076 Average earning assets(5) 9,277,961 7,806,934 8,544,431 7,356,845 New business 1,238,803 1,000,383 3,979,265 3,311,105 Fee-based volume 1,856,692 1,860,586 7,257,003 4,532,494 Net write-offs 19,828 14,035 56,758 43,200 Net write-offs (annualized) as a % of average managed assets(3) 0.78% 0.66% 0.60% 0.54% Operating margin (annualized) as a % of average earning assets 6.4% 6.6% 6.4% 6.2% Interest margins earned (annualized) as a % of average earning assets 5.6% 5.5% 5.5% 5.6% Selling, administrative and other operating expenses as a % of operating margin 43.9% 41.2% 43.8% 41.8% Selling, administrative and other operating expenses as a % of operating margins plus gains 36.3% 38.9% 39.8% 39.2% - ---------- (1) Averages for the periods presented are based on month-end balances. (2) Securitizations are assets sold under securitization agreements and managed by the Company. (3) Excludes participations sold in which the Company has transferred credit risk. (4) Excludes financing contracts held for sale. (5) Average earning assets equal average funds employed less average deferred taxes on leveraged leases and average nonaccruing assets. -----END PRIVACY-ENHANCED MESSAGE-----