-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, b8VHKN15XjnlX1VE5uAp+8lQJScXUgpfdeA0uSTLvSzMQdb1OZKKy3QH1YmXAcVl frqXXdiR2asuWsBFj6SUGQ== 0000020405-94-000009.txt : 19940425 0000020405-94-000009.hdr.sgml : 19940425 ACCESSION NUMBER: 0000020405-94-000009 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19940331 ITEM INFORMATION: Bankruptcy or receivership FILED AS OF DATE: 19940422 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CITICORP CENTRAL INDEX KEY: 0000020405 STANDARD INDUSTRIAL CLASSIFICATION: 6021 IRS NUMBER: 132614988 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05738 FILM NUMBER: 94523953 BUSINESS ADDRESS: STREET 1: 909 THIRD AVENUE STREET 2: 30TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10043- BUSINESS PHONE: 212-559-6754 MAIL ADDRESS: STREET 1: 425 PARK AVE- 2ND F STREET 2: ATTN: LEGAL AFFAIRS OFFICE CITY: NEW YORK STATE: NY ZIP: 10043 FORMER COMPANY: FORMER CONFORMED NAME: FIRST NATIONAL CITY CORP DATE OF NAME CHANGE: 19740414 FORMER COMPANY: FORMER CONFORMED NAME: CITY BANK OF NEW YORK NATIONAL ASSOCIATI DATE OF NAME CHANGE: 19680903 8-K 1 1994 1ST QUARTER 8-K 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): April 19, 1994 CITICORP (Exact name of registrant as specified in charter) Delaware 1-5738 13-2614988 (State or other (Commission File Number) (IRS Employer jurisdiction of Identification incorporation) Number) 399 Park Avenue, New York, New York 10043 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (212)559-1000 Not Applicable (Former name or former address, if changed since last report) Item 5. Other Events On April 19, 1994 Citicorp reported operating earnings of $609 million, or $1.12 per common share fully diluted, in the first quarter of 1994. These results were up from $370 million, or $0.67 per share, in the same year-earlier quarter. Including the cumulative effect of adopting the new accounting standard for postemployment benefits, net income was $553 million, or $1.01 per common share fully diluted. In the year-earlier quarter, including the cumulative effect of a new accounting method for income taxes, net income was $670 million, or $1.24 per common share fully diluted. John S. Reed, Chairman, said: "We had a good quarter. Our strong emerging markets businesses, continued good operating expense management, and significant improvement in credit costs more than offset weak trading results." Revenues, adjusted for credit-related costs, the effect of credit card securitization and nonrecurring asset sales, declined by approximately $100 million to $4.1 billion from the 1993 first quarter; trading declined by $386 million to $71 million while all other revenues increased by $269 million or 7%, chiefly in businesses in emerging markets. Adjusted operating expenses at $2.4 billion were approximately even with the 1993 first quarter - -- despite increased spending for continued business expansion in emerging countries -- and an improvement of $180 million from the 1993 fourth quarter. Both commercial and consumer credit costs declined. Commercial credit costs decreased for the ninth straight quarter, to $60 million from $126 million in the 1993 fourth quarter and from $380 million in the 1993 first quarter. Commercial cash- basis loans and Other Real Estate Owned together dropped by $319 million in the quarter to $5.0 billion. Consumer credit costs declined to $614 million in the quarter from $651 million in the 1993 fourth quarter and from $716 million in the 1993 first quarter. First quarter earnings included a net pretax gain from asset sales of $23 million ($14 million after tax). Net gains on asset sales for the same 1993 quarter were $75 million pretax ($41 million after tax). The company further strengthened its balance sheet during the quarter by building commercial and consumer loan loss reserves by $100 million to $4.2 billion, compared with $3.7 billion a year ago. The reserve for the cross-border refinancing portfolio was unchanged from the 1993 year-end total of $238 million after a pretax release to earnings of $34 million. Total regulatory capital was increased to $23.5 billion, up $2.5 billion from $21.0 billion a year ago. Citicorp estimated that its Tier 1 capital ratio increased to 6.8% at quarter-end from 6.6% at December 31, 1993, and its combined Tier 1 and Tier 2 capital ratio remained unchanged from 11.5% at year-end 1993. A year ago the Tier 1 ratio was 5.2% and the combined ratio was 10%. In adopting Statement of Financial Accounting Standards (SFAS) No. 112 (accounting for postemployment benefits) as of January 1, 1994, Citicorp took an after-tax charge of $56 million as the cumulative effect of the new standard. Also in the quarter, Citicorp adopted SFAS No. 115 (accounting for certain investments in securities), which increased stockholders' equity by $227 million after tax at March 31, 1994, and Interpretation No. 39 (covering reporting of off- balance sheet contracts), which increased assets and liabilities by approximately $15 billion at March 31. (Neither of these two accounting changes affected the company's earnings or its Tier 1 and Tier 2 capital ratios, but they have the effect of reducing return ratios.) RESULTS OF BUSINESS OPERATIONS Global Consumer Net income in the Global Consumer businesses increased 44% to a record $427 million in the quarter, compared with $296 million in the 1993 first quarter. The improvement was due to strong revenues in the emerging economies and private banking activities as well as to lower credit losses in the U.S. businesses. Net income from the consumer businesses in North America, Europe and Japan was $256 million, compared with $154 million in the year-earlier quarter. Net income from consumer businesses in the emerging economies was $171 million, compared with $142 million in the same 1993 quarter. Adjusted revenues of $2.8 billion were 6% higher than in the 1993 first quarter, with revenues from the emerging economies up 19% and those from North America, Europe and Japan up slightly, chiefly from strong private banking activity. Consumer expenses in the quarter were $1.5 billion, a 5% rise from a year ago, primarily in emerging markets. Credit costs of $614 million, adjusted for the effect of credit card securitization, fell by $102 million from the 1993 first quarter and $37 million from last year's fourth quarter -- their lowest level since 1990. Net credit losses continued to decline from the 1993 fourth quarter in the U.S. credit card portfolio, with improvement also noted in U.S. branches. Consumer loans on the balance sheet that are delinquent 90 days or more were $3.5 billion at the quarter-end, down from $3.9 billion a year earlier and virtually unchanged from the 1993 year-end. Global Finance Global Finance businesses earnings were $264 million for the first quarter, compared with $380 million for the same 1993 quarter. The businesses in North America, Europe and Japan earned $86 million for the quarter, while businesses in the emerging economies earned $178 million. These results compared with $233 million and $147 million, respectively, in the year-ago quarter. Global Finance adjusted revenues were $1.2 billion, an 18% decline from the same 1993 quarter and 23% lower than the fourth quarter of 1993. Revenues from trading-related activities for the quarter were substantially lower compared with both periods of the prior year. Interest rate and currency environments in Europe and North America were volatile, and market prices declined in Latin American securities. Global Finance revenues excluding trading, however, remained strong, with good gains from emerging countries. Operating expenses were lower by 4% and 7% compared with the first and fourth quarters of 1993, respectively. Expenses for the 1993 fourth quarter reflected higher incentive compensation related to trading activity and for the year-ago quarter included a pretax charge of $64 million ($35 million after tax) for withdrawal from the portfolio management business for customers in India. In the quarter, Global Finance recoveries, chiefly in North America and Europe, exceeded write-offs by $46 million. In addition, other positive credit-related items in the quarter totaled $12 million. These contrasted with credit costs in the 1993 first quarter of $69 million. Cash-basis loans of $699 million compared with $1.3 billion a year ago and $755 million at the end of 1993. North America Commercial Real Estate North America Commercial Real Estate reported continued improvement in its portfolio. Cash-basis loans and OREO declined to $3.8 billion at the end of the quarter, an improvement of $1.8 billion and $267 million, respectively, from the first and fourth quarters of 1993. The reduction was due to multiple initiatives, including restructurings, sales, paydowns, writeoffs and writedowns. Cash-basis loans of $1.7 billion were down from $2.6 billion at the end of the 1993 first quarter and even with $1.7 billion at year-end 1993. OREO property decreased to $2.1 billion from $3.0 billion a year ago and from $2.3 billion at year-end 1993. Consistent with the reduction of problem credits in the North America Commercial Real Estate portfolio, its total exposure was reduced $900 million during the quarter to $12.7 billion -- down from $16.5 billion at the end of the 1993 first quarter. North America Commercial Real Estate reported a net loss of $76 million, a sharp reduction from a $204 million loss in the 1993 first quarter, due to lower credit costs. Net write-offs and writedowns declined to $104 million, compared with $260 million in the same 1993 quarter. Cross-Border Refinancing Portfolio The cross-border refinancing portfolio reported net income of $49 million, reflecting the release of $34 million of reserves; net income in the same 1993 quarter amounted to $37 million, when there was no release of reserves. The first- quarter results included the recognition of $22 million of interest from Brazil, compared with $42 million in the year-ago quarter. On April 15, 1994 the Government of Brazil completed its external-debt financing package covering essentially all of its medium- and long-term commercial-bank debt. Citicorp exchanged approximately $2.7 billion in face value of Brazilian debt for $1.3 billion of Debt Conversion Bonds, $1.2 billion of Front Loaded Interest Reduction Bonds, $122 million of New Money Bonds and $60 million of Investment Feature Cruzeiro Bonds. In addition, Citicorp purchased $221 million of New Money Bonds and has received $274 million of an expected total of approximately $325 million in bonds covering past due interest. In March the Government of Poland and its Bank Advisory Committee reached a preliminary agreement on a financing package, and negotiations are underway between the Governments of Panama and Ecuador and their bank committees. TAXES The effective tax rate in the quarter was 39%, down from 45% in the 1993 first quarter. Following are tables of financial highlights, an analysis of operating margin pretax earnings, business results and credit indicators are available on request, along with financial statements. Further details concerning the financial results will be available in May in Citicorp's Form 10-Q. KEY RATIOS & OTHER CONSOLIDATED FINANCIAL DATA
First Quarter 1994 1993 ----- ----- NET INCOME ($M): Before Cumulative Effect of Accounting Changes.................. $ 609 $ 370 After Cumulative Effect of Accounting Changes(A)............... $ 553 $ 670 NET INCOME PER COMMON SHARE: On Common & Common Equivalent Shares Before Cumulative Effect of Accounting Changes.................. $ 1.24 $ 0.71 After Cumulative Effect of Accounting Changes(A)............... $ 1.11 $ 1.38 Assuming Full Dilution Before Cumulative Effect of Accounting Changes.................. $ 1.12 $ 0.67 After Cumulative Effect of Accounting Changes(A)............... $ 1.01 $ 1.24 COMMON STOCKHOLDERS' EQUITY PER SHARE(B). $27.90 $23.21 CLOSING STOCK PRICE AT QUARTER END.......................... $37.50 $29.50 PROFITABILITY RATIOS (Annualized): Return on Total Assets(C): Before Accounting Changes............... 0.98% 0.67% After Accounting Changes(A)............. 0.95% 0.80% Return on Common Stockholders' Equity(B): Before Accounting Changes............... 20.1% 14.3% After Accounting Changes(A)............. 19.5% 17.9% Return on Total Stockholders' Equity(B):. Before Accounting Changes............... 17.1% 12.9% After Accounting Changes(A)............. 16.7% 15.5% CAPITAL: Tier 1 ($B)............................. $ 13.9 $ 10.9 Tier 1 & 2 ($B)(D)...................... $ 23.5 $ 21.0 Tier 1 Ratio (D)........................ 6.8% 5.2% Tier 1 & 2 Ratio(D)..................... 11.5% 10.0% Common Equity as a % of Total Assets(B)(C)............... 4.5% 4.0% Total Equity as a % of Total Assets(B)(C)............... 6.1% 5.5% DIVIDENDS DECLARED ($M): Preferred............................. $ 87 $ 73 (A) First quarter 1994 includes the cumulative effect of adopting Statement of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits", as of January 1, 1994. The 1993 results include the cumulative effect of adopting Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes", as of January 1, 1993. (B) First quarter 1994 reflects the effect of adopting Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities", as of January 1, 1994 (C) First quarter 1994 reflects the effect of adopting FASB Interpretation No. 39, "Offsetting of Amounts Related to Certain Contracts", as of January 1, 1994. (D) Estimated.
OPERATING MARGIN ($ Millions)
First Quarter 1994 1993 ---- ---- Total Revenue ................... $3,861 $3,885 Effect of Credit Card Securitization.................. 268 359 Net Cost to Carry(A)............. 29 83 Capital Building Transactions.................... (23) (75) ----- ----- Adjusted Revenue................. $4,135 $4,252 ----- ----- Total Operating Expense.......... $2,447 $2,526 Net OREO Costs (B)............... (28) (115) ----- ----- Adjusted Operating Expense......................... $2,419 $2,411 ----- ----- Operating Margin................. $1,716 $1,841 Consumer Credit Costs (C)....................... 614 716 Commercial Credit Costs (D)....................... 60 380 ----- ----- Operating Margin Less Credit Costs............... $1,042 $ 745 Additional Provision(E): - -Consumer........................ 50 75 - -Commercial...................... 50 75 - -Refinancing Portfolio........... (34) - Capital Building Transactions ................... 23 75 ----- ----- Income Before Taxes and Cumulative Effect of Accounting Changes............. $ 999 $ 670 ===== ===== (A) Principally the net cost to carry commercial cash-basis loans and Other Real Estate Owned (OREO). (B) Principally net write-downs and direct revenues and expenses related to OREO. (C) Principally consumer net credit write-offs adjusted for the effect of securitization of credit card receivables. (D) Includes commercial net credit write-offs, net cost to carry, net OREO write-downs and direct revenues and expenses related to OREO. (E) Represents provision for credit losses above(below) net write-offs.
BUSINESS FOCUS Net Income (Loss) ($ Millions)
First Quarter 1994 1993(A) ------ ------ Global Consumer: North America, Europe and Japan...................... $ 256 $ 154 Emerging Economies............... 171 142 ----- ----- Total Global Consumer............. $ 427 $ 296 ----- ----- Global Finance: North America, Europe and Japan...................... $ 86 $ 233 Emerging Economies............... 178 147 ----- ----- Total Global Finance.............. $ 264 $ 380 ----- ----- North America Commercial Real Estate..................... $ (76) $ (204) Cross-Border Refinancing Portfolio....................... 49 37 Corporate Items(B)................ (55) (139) ----- ----- $ 609 $ 370 Cumulative Effect of Accounting Changes(C)........... (56) 300 ----- ----- Citicorp.......................... $ 553 $ 670 ===== ===== (A) Reclassified to conform to current quarter's presentation. (B) Corporate Items includes the effects of capital building transactions and the offset created by attributing income taxes to business activities on a local tax basis. (C) First quarter 1994 includes the cumulative effect of adopting Statement of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits", as of January 1, 1994. The 1993 results include the cumulative effect of adopting Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes", as of January 1, 1993.
GLOBAL CONSUMER ($ Millions)
First Quarter % 1994 1993(A) Chg ------ ------ ---- Total Revenue................ $2,490 $2,238 11 ----- ----- Total Operating Expense...... $1,493 $1,427 5 ----- ----- Provision For Credit Losses .............. $ 378 $ 411 (8) ----- ----- Income Before Taxes.......... $ 619 $ 400 55 Income Taxes................. 192 104 85 ----- ----- Net Income................... $ 427 $ 296 44 ===== ===== OTHER DATA: Average Assets ($B).......... 102 99 3 Return on Assets............. 1.70% 1.21% - Adjusted for Credit- Related Items: Total Revenue(B) North America, Europe and Japan............... $2,147 $2,086 3 Emerging Economies....... 613 515 19 ----- ----- Total Global Consumer.... $2,760 $2,601 6 ----- ----- Other Operating Expense(C) North America, Europe and Japan............... $1,146 $1,130 1 Emerging Economies....... 331 280 18 ----- ----- Total Global Consumer.... $1,477 $1,410 5 ----- ----- Credit Costs (D) North America, Europe and Japan............... $ 575 $ 681 (16) Emerging Economies....... 39 35 11 ----- ----- Total Global Consumer.... $ 614 $ 716 (14) ----- ----- (A) Reclassified to conform to current quarter's presentation. (B) Adjusted principally for the effect of credit card securitization. (C) Excludes net write-downs and net direct expenses related to OREO for certain real estate lending activities. (D) Principally net credit write-offs adjusted for the effect of credit card securitization. Includes U.S. credit card net credit losses for both held and securitized receivables of $381 million for 1994 first quarter and $471 million for the comparable period of 1993.
GLOBAL FINANCE ($ Millions)
First Quarter % 1994 1993(A) Chg ------ ------ ---- Total Revenue................ $1,204 $1,445 (17) ----- ----- Total Operating Expense...... $ 786 $ 838 (6) ----- ----- Provision For Credit Losses .............. $ (34) $ 111 N/M ----- ----- Income Before Taxes.......... $ 452 $ 496 (9) Income Taxes................. 188 116 62 ----- ----- Net Income................... $ 264 $ 380 (31) ===== ===== OTHER DATA: Average Assets ($B)(B)....... 134 104 29 Return on Assets............. 0.80% 1.48% - Adjusted for Credit- Related Items: Total Revenue(C) North America, Europe and Japan............... $ 677 $ 950 (29) Emerging Economies....... 528 518 2 ----- ----- Total Global Finance..... $1,205 $1,468 (18) ----- ----- Other Operating Expense(D) North America, Europe and Japan............... $ 535 $ 518 3 Emerging Economies....... 264 310 (15) ----- ----- Total Global Finance..... $ 799 $ 828 (4) ----- ----- Credit Costs (E) North America, Europe and Japan............... $ (47) $ 54 N/M Emerging Economies....... (11) 15 N/M ----- ----- Total Global Finance..... $ (58) $ 69 N/M ----- ----- (A) Reclassified to conform to current quarter's presentation. (B) First quarter 1994 reflects the effect of adopting FASB Interpretation No. 39 "Offsetting of Amounts Related to Certain Contracts" as of January 1, 1994. (C) After adding back the net cost to carry cash-basis loans and OREO. (D) Excludes net write-downs (recoveries) and direct revenues and expenses related to OREO. (E) Includes net write-offs, the net cost to carry cash-basis loans and OREO, as well as net write-downs (recoveries) and direct revenues and expenses related to OREO. N/M Not meaningful as percentage exceeds 100%.
NORTH AMERICA COMMERCIAL REAL ESTATE ($ Millions)
First Quarter % 1994 1993(A) Chg ------ ------ ---- Total Revenue................ $ 19 $ (20) N/M ----- ----- Total Operating Expense...... $ 60 $ 127 (53) ----- ----- Provision For Credit Losses............... $ 106 $ 168 (37) ----- ----- (Loss) Before Taxes.......... $ (147) $ (315) 53 Income Taxes................. (71) (111) 36 ----- ----- Net (Loss)................... $ (76) $ (204) 63 ===== ===== OTHER DATA: Average Assets ($B).......... 10 13 (23) Adjusted for Credit- Related Items: Total Revenue (B).......... 45 36 25 Total Operating Expense (C)............... 35 39 (10) Credit Costs (D)........... 119 312 (62) (A) Reclassified to conform to current quarter's presentation. (B) After adding back the net cost to carry cash-basis loans and OREO. (C) Excludes net write-downs and direct revenues and expenses related to OREO. (D) Includes net write-offs, the net cost to carry cash-basis loans and OREO, as well as net write-downs and direct revenues and expenses related to OREO. N/M Not meaningful as percentage exceeds 100%.
CROSS-BORDER REFINANCING PORTFOLIO ($ Millions)
First Quarter % 1994 1993(A) Chg ------ ------ ---- Total Revenue ............... $ 28 $ 47 (40) ----- ----- Operating Expense............ $ 6 $ 6 - ----- ----- Provision For Credit Losses............... $ (35) $ (1) N/M ----- ----- Income Before Taxes $ 57 $ 42 36 Income Taxes................. 8 5 60 ----- ----- Net Income................... $ 49 $ 37 32 ===== ===== OTHER DATA: Average Assets($B)........... 2 3 CORPORATE ITEMS ($ Millions) First Quarter % 1994 1993(A) Chg ------ ------ ---- Total Revenue ............... $ 120 $ 175 (31) ----- ----- Total Operating Expense...... $ 102 $ 128 (20) ----- ----- Income Before Taxes.......... $ 18 $ 47 (62) Income Taxes................. 73 186 (61) ----- ----- Net (Loss)(B)................ $ (55) $ (139) 60 ===== ===== (A) Reclassified to conform to current quarter's presentation. (B) Corporate Items includes net after-tax gains from capital building transactions of $14 million and $41 million in the first quarter of 1994 and 1993, respectively. Additionally, Corporate Items includes the offset created by attributing income taxes to business activities on a local tax basis. N/M Not meaningful as percentage exceeds 100%.
ASSET QUALITY COMMERCIAL CASH-BASIS LOANS AND OREO ($ Millions)
1st Q 4th Q 3rd Q 2nd Q 1st Q 1994 1993 1993 1993 1993 ----- ----- ----- ----- ----- North America Commercial Real Estate........... $1,654 $1,719 $2,138 $2,474 $2,593 Global Finance......... 699 755 1,063 1,346 1,267 ----- ----- ----- ----- ----- Total Commercial Cash-Basis Loans...... $2,353 $2,474 $3,201 $3,820 $3,860 Commercial OREO........ 2,598 2,796 3,122 3,479 3,721 ----- ----- ----- ----- ----- Total Commercial Cash- Basis Loans & OREO.... $4,951 $5,270 $6,323 $7,299 $7,581 ----- ----- ----- ----- ----- Cross-Border Refinancing Cash-Basis Loans...... $ 991 $1,041 $1,068 $1,082 $1,242 ALLOWANCE FOR CREDIT LOSSES ($ Millions) 1st Q 4th Q 3rd Q 2nd Q 1st Q 1994 1993 1993 1993 1993 ----- ----- ----- ----- ----- Global Consumer........ $1,639 $1,596 $1,550 $1,491 $1,412 Commercial............. 2,595 2,545 2,482 2,394 2,296 Cross-Border Refinancing 238 238 228 205 325 ----- ----- ----- ----- ----- Total.................. $4,472 $4,379 $4,260 $4,090 $4,033 ===== ===== ===== ===== ===== Reserve for Global Consumer Sold Portfolios $ 538 $ 527 $ 559 $ 557 $ 557 ALLOWANCE AS A PERCENTAGE OF TOTAL LOANS 1st Q 4th Q 3rd Q 2nd Q 1st Q 1994 1993 1993 1993 1993 ----- ----- ----- ----- ----- Global Consumer........ 1.98% 1.89% 1.89% 1.83% 1.75% Commercial............. 4.88% 4.88% 4.49% 4.35% 4.25% Total(A)............... 3.26% 3.15% 3.05% 2.94% 2.92% ADDITIONAL DATA 1st Q 4th Q 3rd Q 2nd Q 1st Q 1994 1993 1993 1993 1993 ----- ----- ----- ----- ----- Commercial Allowance as % of Commercial Cash-Basis Loans................. 110.3% 102.9% 77.5% 62.7% 59.5% Commercial Renegotiated Loans(B).............. $ 346 $ 669 $ 337 $ 107 $ 96 Consumer OREO.......... $1,247 $1,212 $1,283 $1,312 $1,314 (A) Includes the Cross-Border Refinancing Portfolio allowance and related portfolio. (B) Excludes renegotiated cross-border outstandings.
DETAILS OF CREDIT LOSS EXPERIENCE ($ Millions)
1st Q 4th Q 3rd Q 2nd Q 1st Q 1994 1993 1993 1993 1993 ----- ----- ----- ----- ----- NET WRITE-OFFS: Global Consumer......... $ 328 $ 351 $ 356 $ 367 $ 336 North America Commercial Real Estate............ 68 78 49 136 168 Global Finance.......... (46) 16 69 36 36 ---- ---- ---- ---- ---- Total Non-Refinancing Commercial............ $ 22 $ 94 $ 118 $ 172 $ 204 ---- ---- ---- ---- ---- Cross-Border Refinancing (A)........ (35) (10) (23) 120 (26) ---- ---- ---- ---- ---- Total................... $ 315 $ 435 $ 451 $ 659 $ 514 ==== ==== ==== ==== ==== 1st Q 4th Q 3rd Q 2nd Q 1st Q 1994 1993 1993 1993 1993 ----- ----- ----- ----- ----- PROVISION FOR CREDIT LOSSES: Global Consumer......... $ 378 $ 414 $ 419 $ 442 $ 411 North America Commercial Real Estate............ 106 141 115 186 168 Global Finance.......... (34) 16 91 87 111 ---- ---- ---- ---- ---- Total Non-Refinancing Commercial............ $ 72 $ 157 $ 206 $ 273 $ 279 ---- ---- ---- ---- ---- Cross-Border Refinancing............ (35) - - - (1) ---- ---- ---- ---- ---- Total................... $ 415 $ 571 $ 625 $ 715 $ 689 ==== ==== ==== ==== ==== NET OREO WRITE-DOWNS (RECOVERIES): North America Commercial Real Estate............ $ 36 $ 27 $ 73 $ 65 $ 92 Global Finance.......... (6) (30) 13 (1) 4 ---- ---- ---- ---- ---- Total................... $ 30 $ (3) $ 86 $ 64 $ 96 ==== ==== ==== ==== ==== (A) Includes gross write-offs of $152 million in the second quarter of 1993 related to Citicorp's medium- and long-term outstandings to Brazil.
STATEMENT OF OPERATIONS CITICORP and Subsidiaries (In Millions of Dollars, Except Per Share Amounts)
First Quarter % 1994 1993 Chg ----- ----- --- Interest Revenue.............. $6,458 $5,869 10 Interest Expense.............. 4,373 4,022 9 ----- ----- Net Interest Revenue.......... $2,085 $1,847 13 ----- ----- Fees & Commissions........... $1,259 $1,213 4 Trading Account.............. 5 217 (98) Foreign Exchange............. 66 240 (73) Inv Securities Transactions.. 50 16 N/M Other Revenue................ 396 352 13 ----- ----- Total Fees, Commissions and Other Revenue............ $1,776 $2,038 (13) ----- ----- TOTAL REVENUE................. $3,861 $3,885 (1) ----- ----- PROVISION FOR CREDIT LOSSES... $ 415 $ 689 (40) ----- ----- Operating Expense: Salaries.................... $ 954 $ 913 4 Staff Benefits.............. 283 265 7 Net Premises & Equipment Expense........... 390 396 (2) Other Expense............... 820 952 (14) ----- ----- TOTAL OPERATING EXPENSE $2,447 $2,526 (3) ----- ----- INCOME BEFORE TAXES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGES........ $ 999 $ 670 49 Income Taxes................. 390 300 30 ----- ----- INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGES...................... $ 609 $ 370 65 Cumulative Effect of Accounting Changes(A)......... (56) 300 N/M ----- ----- NET INCOME.................... $ 553 $ 670 (17) ===== ===== INCOME APPLICABLE TO COMMON STOCK.............. $ 466 $ 595 (22) ===== ===== EARNINGS PER SHARE : On Common & Common Equiv. Shs Income Before Cumulative Effect of Acctg Changes..... $ 1.24 $ 0.71 75 Cumulative Effect of Accounting Changes(A)....... $(0.13) $ 0.67 N/M Net Income................... $ 1.11 $ 1.38 (20) Assuming Full Dilution Income Before Cumulative Effect of Acctg Changes..... $ 1.12 $ 0.67 67 Cumulative Effect of Accounting Changes(A)....... $(0.11) $ 0.57 N/M Net Income................... $ 1.01 $ 1.24 (19) (A) First quarter 1994 includes the cumulative effect of adopting Statement of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits", as of January 1, 1994. The 1993 results include the effect of adopting Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes", as of January 1, 1993. N/M Not meaningful as percentage exceeds 100%.
CONSOLIDATED BALANCE SHEET CITICORP and Subsidiaries (In Millions of Dollars)
Mar. 31 Dec. 31 % 1994 1993(A) Chg -------- -------- --- ASSETS Cash and Due from Banks......... $ 5,705 $ 4,836 18 Deposits at Interest with Banks. 7,221 6,749 7 Securities(B): Held to Maturity............... 7,292 5,637 29 Available for Sale............. 9,876 8,705 13 Venture Capital................ 1,522 1,489 2 Trading Account Assets.......... 42,688 (C) 23,783 79 Federal Funds Sold & Securities Purchased Under Resale Agreements........ 10,108 7,339 38 Loans, Net Consumer....................... $ 82,654 $ 84,354 (2) Commercial(B).................. 54,619 54,613 - ------- ------- Total Loans................. $137,273 $138,967 (1) Allowance for Credit Losses..... (4,472) (4,379) (2) ------- ------- Total Loans, Net............ $132,801 $134,588 (1) Customers' Acceptance Liability $ 1,368 $ 1,512 (10) Premises & Equipment, Net....... 3,811 3,842 (1) Interest & Fees Receivable...... 2,603 2,552 2 Other Assets.................... 16,101 15,542 4 ------- ------- Total........................... $241,096 $216,574 11 ======= ======= LIABILITIES Non-Int. Deposits (in the U.S.). $ 13,925 $ 13,442 4 Int. Deposits (in the U.S.)..... 37,905 38,347 (1) Non-Int. Deposits (Outside the U.S.).......................... 7,191 6,644 8 Int. Deposits(Outside the U.S.). 93,977 86,656 8 ------- ------- Total Deposits.............. $152,998 $145,089 5 Trading Account Liabilities..... 21,767 (C) 5,478 N/M Purchased Funds & Other Borrowings............... 17,527 16,777 4 Acceptances Outstanding......... 1,386 1,531 (9) Accrued Taxes & Other Expenses.. 6,290 6,452 (3) Other Liabilities............... 9,364 9,134 3 Long-Term Debt.................. 15,265 16,010 (5) Subordinated Capital Notes...... 1,750 2,150 (19) STOCKHOLDERS' EQUITY Preferred Stock (Without Par Value)............ $ 3,887 $ 3,887 - Common Stock (Par value $1.00).. 415 412 1 Surplus......................... 3,973 3,898 2 Retained Earnings .............. 7,195 6,729 7 Net Unrealized Gains-Securities Available for Sale(B).......... 227 - N/M Foreign Currency Translation.... (557) (580) 4 Common Stock in Treasury, at Cost........................ (391) (393) 1 ------- ------- Total Stockholders' Equity.. $ 14,749 $ 13,953 6 ------- ------- Total........................... $241,096 $216,574 11 ======= ======= (A) Reclassified to conform to current quarter's presentation. (B) Balances at March 31, 1994 reflect the effect of adopting Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities", including the reclassification of approximately $1.7 billion of "Brady Bonds" from Commercial Loans to Held to Maturity and Available for Sale Securities. Statement No. 115, which requires that securities designated as "available for sale" be carried at fair value, with unrealized gains and losses reported in stockholders' equity net of applicable taxes) was adopted effective January 1, 1994. (C) Trading Account Assets and Trading Account Liabilities as of March 31, 1994 include approximately $14.7 billion relating to the adoption of Financial Accounting Standards Board Interpretation No. 39, "Offsetting of Amounts Related to Certain Contracts", effective January 1, 1994. Interpretation No. 39 requires that unrealized trading gains and losses be reported gross on the balance sheet except where there is a qualifying netting agreement in place. On a pro-forma basis, Trading Account Assets and Trading Account Liabilities as of December 31, 1993 would have been $36.8 billion and $18.5 billion, respectively, had the new rule been in effect on that date. Amounts presented for Trading Account Assets and Trading Account Liabilities as of December 31, 1993 include the reclass- ification of $5.7 billion and $3.1 billion, respectively, to provide for consistent presentation of amounts previously recorded in Other Assets and Other Liabilities representing revaluation gains and losses and other balances related to these contracts. N/M Not meaningful as percentage exceeds 100%.
ADDITIONAL FINANCIAL INFORMATION
First Quarter 1994 1993 ------ ------ NET INTEREST REVENUE(A) ($ Millions) Net Interest Revenue......... $ 2,087 $ 1,851 Net Interest Margin.......... 4.01% 3.82% ADJUSTED TO EXCLUDE THE EFFECT OF CREDIT CARD SECURITIZATION: Net Interest Revenue........ $ 2,616 $ 2,472 Net Interest Margin......... 4.52% 4.52% First Quarter 1994 1993(B) ------ ------ OTHER REVENUE ($ Millions) Affiliate Earnings........... $ 65 $ 41 Securitized Credit Card Receivables............ 208 244 Net (Losses) from Mortgage Pass-Through Securitization Activity(C) (38) (66) Venture Capital Gains........ 79 54 Net Gains on the Sale/ Disposition of Assets....... 30 79 Foreign Currency Translation (Losses)........ - (28) Other Items.................. 52 28 ------ ------ Total...................... $ 396 $ 352 ====== ====== (A) Taxable Equivalent Basis. (B) Reclassified to conform to current quarter's presentation. (C) Represents impairment related to excess servicing fees receivable and credit costs in connection with recourse obligations partially offset by gains on sale of mortgage pass-throughs.
CONSOLIDATED AVERAGE BALANCES
First Quarter % 1994 1993 Chg -------- ------- ----- Loans ($B): Consumer................. $ 84 $ 82 2 Commercial............... 54 58 (7) ------- ------- Total Loans............... $ 138 $ 140 (1) ======= ======= Total Assets ($B)(A)...... $ 253 $ 225 12 Interest Earning Assets($B).............. $ 211 $ 196 8 Common Stockholders' Equity ($M) (B).......... $ 10,562 $ 8,364 26 Preferred Equity ($M)..... 3,887 3,212 21 ------- ------- Total Stockholders' Equity ($M) (B).......... $ 14,449 $ 11,576 25 ======= ======= COMMON SHARES OUTSTANDING (In Thousands) End-Of-Period............. 389,280 372,715 4 Weighted Average for Purposes of Earnings Per Share: Common & Common Equivalent Shares (C).... 441,894 449,859 (2) Assuming Full Dilution (D)............. 517,717 525,999 (2) (A) The effect of implementing Financial Accounting Standards Board Interpretation No. 39, "Offsetting of Amounts Related to Certain Contracts", in the first quarter 1994 is reflected in non-interest earning assets. (B) Reflects the effect of adopting Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities", in the first quarter 1994. (C) Includes shares related to the assumed conversion of Conversion Preferred Stock, Series 15 (Conversion Preferred Stock). For purposes of computing earnings per share, the dividends related to the Conversion Preferred Stock are added back to income applicable to common stock. (D) Includes shares related to the assumed conversion of the Conversion Preferred Stock, Series 15 and Convertible Preferred Stock, Series 12 and 13. For purposes of computing earnings per share, the dividends related to the Conversion Preferred Stock and Convertible Preferred Stock are added back to income applicable to common stock.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits - Exhibit No. 12(a) Calculation of Ratio of Income to Fixed Charges - Exhibit No. 12(b) Calculation of Ratio of Income to Fixed Charges Including Preferred Stock Dividends 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. CITICORP (Registrant) By: /s/ Thomas E. Jones ------------------------------- Thomas E. Jones Executive Vice President A Principal Financial Officer Dated: April 21, 1994 EX-12 2 EXHIBIT 12.A
CITICORP AND SUBSIDIARIES CALCULATION OF RATIO OF INCOME TO FIXED CHARGES (In Millions) EXCLUDING INTEREST ON DEPOSITS THREE MONTHS ENDED MAR 31 1993 1992 1991 1990 1989 1994 1993 ------ ------- ------- ------- ------- ------- ----- FIXED CHARGES: INTEREST EXPENSE (OTHER THAN INTEREST ON DEPOSITS) (A) 6,324 5,826 5,973 9,414 11,482 1,903 1,573 INTEREST FACTOR IN RENT EXPENSE 147 162 171 173 161 37 37 ------- ------- ------- ------- ------- ------- ------ TOTAL FIXED CHARGES 6,471 5,988 6,144 9,587 11,643 1,940 1,610 INCOME: ADJUSTED NET INCOME(LOSS) 1,919(B) 722 (914)(C) 318(D) 498 609(E) 370(B) INCOME TAXES 941 696 677 508 1,035 390 300 FIXED CHARGES (A) 6,471 5,988 6,144 9,587 11,643 1,940 1,610 ------- ------- ------- ------- ------- ------- ------- TOTAL INCOME 9,331 7,406 5,907 10,413 13,176 2,939 2,280 ======= ======= ======= ======= ======= ======= ======= RATIO OF INCOME TO FIXED CHARGES EXCLUDING INTEREST ON DEPOSITS 1.44 1.24 0.96(F) 1.09 1.13 1.51 1.42 ======= ======= ======= ======= ======= ======= ======= INCLUDING INTEREST ON DEPOSITS: FIXED CHARGES: INTEREST EXPENSE 16,121 16,327 17,089 23,798 24,218 4,373 4,022 INTEREST FACTOR IN RENT EXPENSE 147 162 171 173 161 37 37 ------- ------- ------- ------- ------- ------- ------- TOTAL FIXED CHARGES 16,268 16,489 17,260 23,971 24,379 4,410 4,059 INCOME: NET INCOME(LOSS) 1,919(B) 722 (914)(C) 318(D) 498 609(E) 370(B) INCOME TAXES 941 696 677 508 1,035 390 300 FIXED CHARGES 16,268 16,489 17,260 23,971 24,379 4,410 4,059 ------- ------- ------- ------- ------- ------- ------- TOTAL INCOME 19,128 17,907 17,023 24,797 25,912 5,409 4,729 ======= ======= ======= ======= ======= ======= ======= RATIO OF INCOME TO FIXED CHARGES INCLUDING INTEREST ON DEPOSITS 1.18 1.09 0.99(F) 1.03 1.06 1.23 1.17 ======= ======= ======= ======= ======= ======= ====== (A) PRIOR YEARS HAVE BEEN RECLASSIFIED TO CONFORM TO CURRENT YEAR'S PRESENTATION. (B) NET INCOME FOR THE THREE MONTHS ENDED MARCH 31, 1993 AND THE FULL YEAR 1993 EXCLUDE THE CUMULATIVE EFFECT OF ADOPTING STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO.109, "ACCOUNTING FOR INCOME TAXES", OF $300 MILLION. (C) NET INCOME FOR THE YEAR ENDED DECEMBER 31, 1991 EXCLUDES THE CUMULATIVE EFFECT OF ACCOUNTING CHANGE FOR VENTURE CAPITAL INVESTMENTS OF $457 MILLION. (D) NET INCOME FOR THE YEAR ENDED DECEMBER 31, 1990 EXCLUDES THE CUMULATIVE EFFECT OF ACCOUNTING CHANGE FOR CERTAIN DERIVATIVE PRODUCTS OF $140 MILLION. (E) NET INCOME FOR THE THREE MONTHS ENDED MARCH 31,1994 EXCLUDES THE CUMULATIVE EFFECT OF ADOPTING STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 112, "EMPLOYERS' ACCOUNTING FOR POSTEMPLOYMENT BENEFITS", OF $(56) MILLION. (F) EARNINGS FOR THE YEAR ENDED DECEMBER 31, 1991 WERE INADEQUATE TO COVER FIXED CHARGES BY THE AMOUNT OF $237 MILLION.
EX-12 3 EXHIBIT 12.B
CITICORP AND SUBSIDIARIES CALCULATION OF RATIO OF INCOME TO FIXED CHARGES INCLUDING PREFERRED STOCK DIVIDENDS (In Millions) THREE MONTHS EXCLUDING INTEREST ON DEPOSITS ENDED MAR 31 1993 1992 1991 1990 1989 1994 1993 ------- ------- ------- ------- ------- ------- ------- FIXED CHARGES: INTEREST EXPENSE (OTHER THAN INTEREST ON DEPOSITS)(A) 6,324 5,826 5,973 9,414 11,482 1,903 1,573 INTEREST FACTOR IN RENT EXPENSE 147 162 171 173 161 37 37 DIVIDENDS - PREFERRED STOCK 465 416 271(B) 361 385 143 132 ------- ------- ------- ------- ------- ------- ------- TOTAL FIXED CHARGES 6,936 6,404 6,415 9,948 12,028 2,083 1,742 INCOME: NET INCOME(LOSS) 1,919(C) 722 (914)(D) 318(E) 498 609(F) 370(C) INCOME TAXES 941 696 677 508 1,035 390 300 FIXED CHARGES (EXCLUDING PREFERRED STOCK DIVIDENDS)(A) 6,471 5,988 6,144 9,587 11,643 1,940 1,610 ------- ------- ------- ------- ------- ------- ------- TOTAL INCOME 9,331 7,406 5,907 10,413 13,176 2,939 2,280 ======= ======= ======= ======= ======= ======= ======= RATIO OF INCOME TO FIXED CHARGES EXCLUDING INTEREST ON DEPOSITS 1.35 1.16 0.92(G) 1.05 1.10 1.41 1.31 ======= ======= ======= ======= ======= ======= ======= INCLUDING INTEREST ON DEPOSITS: FIXED CHARGES: INTEREST EXPENSE 16,121 16,327 17,089 23,798 24,218 4,373 4,022 INTEREST FACTOR IN RENT EXPENSE 147 162 171 173 161 37 37 DIVIDENDS - PREFERRED STOCK 465 416 271(B) 361 385 143 132 ------- ------- ------- ------- ------- ------ ------ TOTAL FIXED CHARGES 16,733 16,905 17,531 24,332 24,764 4,553 4,191 INCOME: NET INCOME(LOSS) 1,919(C) 722 (914)(D) 318(E) 498 609(F) 370(C) INCOME TAXES 941 696 677 508 1,035 390 300 FIXED CHARGES (EXCLUDING PREFERRED STOCK DIVIDENDS) 16,268 16,489 17,260 23,971 24,379 4,410 4,059 ------- ------- ------- ------- ------- ------- ------ TOTAL INCOME 19,128 17,907 17,023 24,797 25,912 5,409 4,729 ======= ======= ======= ======= ======= ======= ====== RATIO OF INCOME TO FIXED CHARGES INCLUDING INTEREST ON DEPOSITS 1.14 1.06 0.97(G) 1.02 1.05 1.19 1.13 ======= ======= ======= ======= ====== ======= ====== (A) PRIOR YEARS HAVE BEEN RECLASSIFIED TO CONFORM TO CURRENT YEAR'S PRESENTATION. (B) CALCULATED ON A BASIS OF AN ASSUMED TAX RATE OF OF 34%. (C) NET INCOME FOR THE THREE MONTHS ENDED MARCH 31, 1993 AND THE FULL YEAR 1993 EXCLUDE THE CUMULATIVE EFFECT OF ADOPTING STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 109, "ACCOUNTING FOR INCOME TAXES", OF $300 MILLION. (D) NET INCOME FOR THE YEAR ENDED DECEMBER 31, 1991 EXCLUDES THE CUMULATIVE EFFECT OF ACCOUNTING CHANGE FOR VENTURE CAPITAL INVESTMENTS OF $457 MILLION. (E) NET INCOME FOR THE YEAR ENDED DECEMBER 31, 1990 EXCLUDES THE CUMULATIVE EFFECT OF ACCOUNTING CHANGE FOR CERTAIN DERIVATIVE PRODUCTS OF $140 MILLION. (F) NET INCOME FOR THE THREE MONTHS ENDED MARCH 31, 1994 EXCLUDES THE CUMULATIVE EFFECT OF ADOPTING STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 112, "EMPLOYERS' ACCOUNTING FOR POSTEMPLOYMENT BENEFITS", OF $(56) MILLION. (G) EARNINGS FOR THE YEAR ENDED DECEMBER 31, 1991 WERE INADEQUATE TO COVER FIXED CHARGES BY THE AMOUNT OF $508 MILLION.
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