8-K 1 0001.txt FORM 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): October 10, 2000 Citicorp (Exact name of registrant as specified in charter) Delaware 1-5738 06-1515595 (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification 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 ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. Page ---- Unaudited Pro Forma Condensed Combined Financial Statements 3 Notes to Unaudited Pro Forma Condensed Combined Financial Statements 7 Exhibit 99.1 Excerpts from Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2000 of Associates First Capital Corporation - 2 - UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS On October 10, 2000, Citigroup Inc. (Citigroup) filed a Form S-4 registration statement disclosing that it had agreed to acquire Associates First Capital Corp. (Associates) through a merger of Associates with a wholly owned subsidiary of Citigroup (the Merger). The Merger, which is expected to be completed in the fourth quarter of 2000, is expected to be accounted for under the pooling of interests method. In connection with the proposed transaction, Associates will be merged with Citicorp, a wholly owned subsidiary of Citigroup. The assets and liabilities of both companies will be combined at historical cost. Historical consolidated financial statements presented in future reports will be restated to include the accounts and results of Associates. The Merger is subject to customary closing conditions, including regulatory and Associates stockholder approval. On a Current Report on Form 8-K dated October 10, 2000, Citicorp filed an unaudited pro forma condensed combined statement of financial condition combining the historical consolidated statement of financial condition of Citicorp and the historical consolidated statement of financial condition of Associates giving effect to the merger as though the transaction had been consummated on June 30, 2000. The unaudited pro forma condensed combined statements of operations combined the historical statements of operations of Citicorp and Associates giving effect to the merger as if it had occurred on January 1, 1997. The following unaudited pro forma condensed combined statement of financial condition combining the historical consolidated statement of financial condition of Citicorp and the historical consolidated statement of financial condition of Associates give effect to the merger as though the transaction had been consummated on September 30, 2000. This information should be read in conjunction with the accompanying notes; the pro forma financial information contained in the October 10, 2000 Form 8-K and the accompanying notes thereto; the separate historical financial statements of Citicorp as of September 30, 2000 and for the nine months ended September 30, 2000 and 1999, and for each of the three years ended December 31, 1999 which are contained in Citicorp's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2000 and its Annual Report on Form 10-K for the fiscal year ended December 31, 1999, respectively; and the separate historical financial statements of Associates as of September 30, 2000 and for the nine months ended September 30, 2000 and 1999, and for each of the three years ended December 31, 1999 which are contained in Associates' Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2000 and its Annual Report on Form 10-K for the fiscal year ended December 31, 1999, respectively. The pro forma financial data is not necessarily indicative of the results of operations that would have occurred had the merger been consummated or of future operations of the combined company. - 3 - Citicorp and Associates First Captial Corporation Unaudited Pro Forma Condensed Combined Statement of Financial Position As of September 30, 2000 (in millions)
Citicorp Associates Pro Forma Pro Forma Historical Historical Adjustment Combined ---------- ---------- ---------- -------- ASSETS Cash and due from banks $ 9,060 $ 3,203 $ 12,263 Deposits at interest with banks 13,808 -- 13,808 Securities, at fair value Available for sale and short-term and other 43,263 9,483 52,746 Venture capital 5,114 -- 5,114 Trading account assets 36,884 -- 36,884 Loans held for sale 8,040 2,376 10,416 Federal funds sold and securities purchased under resale agreements 5,407 -- 5,407 Loans, net Consumer 170,058 47,046 217,104 Commercial 117,251 23,782 141,033 --------- --------- ----- --------- Loans, net of unearned income 287,309 70,828 -- 358,137 Allowance for credit losses (6,679) (2,221) (8,900) --------- --------- ----- --------- Total loans, net 280,630 68,607 -- 349,237 Customers' acceptance liability 1,363 -- 1,363 Premises and equipment, net 4,921 -- 4,921 Interest and fees receivable 4,525 -- 4,525 Other assets 26,634 10,401 37,035 --------- --------- ----- --------- Total assets $ 439,649 $ 94,070 $ -- $ 533,719 ========= ========= ===== ========= LIABILITIES Non-interest-bearing deposits in U.S. offices $ 18,533 $ -- $ 18,533 Interest-bearing deposits in U.S. offices 54,657 -- 54,657 Non-interest-bearing deposits in offices outside the U.S. 13,589 -- 13,589 Interest-bearing deposits in offices outside the U.S. 204,817 -- 204,817 --------- --------- ----- --------- Total deposits 291,596 -- -- 291,596 Trading account liabilities 25,585 -- 25,585 Purchased funds and other borrowings 33,421 33,304 66,725 Acceptances outstanding 1,404 -- 1,404 Accrued taxes and other expenses 9,312 5,080 14,392 Other liabilities 13,779 1,129 14,908 Long-term debt 32,432 43,932 76,364 STOCKHOLDERS' EQUITY Common stock -- 7 7 Additional paid-in capital 7,649 5,288 (19) 12,918 Retained earnings 25,079 5,511 30,590 Treasury stock -- (19) 19 -- Accumulated other changes in equity from nonowner -- sources (608) (162) (770) --------- --------- ----- --------- Total stockholders' equity 32,120 10,625 -- 42,745 --------- --------- ----- --------- Total liabilities and stockholders' equity $ 439,649 $ 94,070 $ -- $ 533,719 ========= ========= ===== =========
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS. - 4 - Citicorp and Associates First Captial Corporation Unaudited Pro Forma Condensed Combined Statement of Income For the Nine Months Ended September 30, 1999 (in millions)
Citicorp Associates Pro Forma Historical Historical Combined ---------- ---------- -------- INTEREST REVENUE Loans, including fees $17,099 $ 6,788 $23,887 Deposits with banks 762 -- 762 Federal fund sold and securities purchased under resale agreements 317 -- 317 Securities, including dividends 2,872 510 3,382 Trading account assets 517 -- 517 Loans held for sale 434 -- 434 ------- ------- ------- 22,001 7,298 29,299 INTEREST EXPENSE Deposits 8,121 -- 8,121 Trading account liabilities 65 -- 65 Purchased funds and other borrowings 1,568 1,005 2,573 Long-term debt 1,401 1,913 3,314 ------- ------- ------- 11,155 2,918 14,073 NET INTEREST REVENUE 10,846 4,380 15,226 PROVISION FOR CREDIT LOSSES 2,151 1,096 3,247 ------- ------- ------- NET INTEREST REVENUE AFTER PROVISION FOR CREDIT LOSSES 8,695 3,284 11,979 FEES, COMMISSIONS, AND OTHER REVENUE Fees and commissions 5,426 1,678 7,104 Foreign exchange 1,214 -- 1,214 Trading account liabilities 694 -- 694 Securities transactions 202 -- 202 Other revenue 2,585 -- 2,585 ------- ------- ------- 10,121 1,678 11,799 OPERATING EXPENSE Salaries 4,687 1,039 5,726 Employee benefits 952 247 1,199 ------- ------- ------- Total employee 5,639 1,286 6,925 Net premises and equipment 1,856 198 2,054 Restructuring - related items 179 -- 179 Other expense 4,949 1,747 6,696 ------- ------- ------- 12,623 3,231 15,854 ------- ------- ------- INCOME BEFORE INCOME TAXES 6,193 1,731 7,924 INCOME TAXES 2,325 649 2,974 ------- ------- ------- NET INCOME $ 3,868 $ 1,082 $ 4,950 ======= ======= =======
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS. - 5 - Citicorp and Associates First Captial Corporation Unaudited Pro Forma Condensed Combined Statement of Income For the Nine Months Ended September 30, 2000 (in millions)
Citicorp Associates Pro Forma Historical Historical Combined ---------- ---------- -------- INTEREST REVENUE Loans, including fees $19,507 $ 7,115 $26,622 Deposits with banks 844 -- 844 Federal fund sold and securities purchased under resale agreements 273 -- 273 Securities, including dividends 2,319 502 2,821 Trading account assets 720 -- 720 Loans held for sale 527 -- 527 ------- ------- ------- 24,190 7,617 31,807 INTEREST EXPENSE Deposits 9,609 -- 9,609 Trading account liabilities 44 -- 44 Purchased funds and other borrowings 1,777 1,156 2,933 Long-term debt 1,424 1,905 3,329 ------- ------- ------- 12,854 3,061 15,915 NET INTEREST REVENUE 11,336 4,556 15,892 PROVISION FOR CREDIT LOSSES 2,095 1,391 3,486 ------- ------- ------- NET INTEREST REVENUE AFTER PROVISION FOR CREDIT LOSSES 9,241 3,165 12,406 FEES, COMMISSIONS, AND OTHER REVENUE Fees and commissions 6,826 2,299 9,125 Foreign exchange 1,104 -- 1,104 Trading account liabilities 1,149 -- 1,149 Securities transactions 749 -- 749 Other revenue 3,394 -- 3,394 ------- ------- ------- 13,222 2,299 15,521 OPERATING EXPENSE Salaries 5,181 1,138 6,319 Employee benefits 956 315 1,271 ------- ------- ------- Total employee 6,137 1,453 7,590 Net premises and equipment 1,913 220 2,133 Restructuring - related items 60 -- 60 Other expense 5,515 1,993 7,508 ------- ------- ------- 13,625 3,666 17,291 ------- ------- ------- INCOME BEFORE INCOME TAXES 8,838 1,798 10,636 INCOME TAXES 3,257 647 3,904 ------- ------- ------- NET INCOME $ 5,581 $ 1,151 $ 6,732 ======= ======= =======
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS. - 6 - CITICORP AND ASSOCIATES FIRST CAPITAL CORPORATION NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS 1. Description of Transaction and Basis of Presentation On October 10, 2000, Citigroup Inc. (Citigroup) filed a Form S-4 registration statement disclosing that it had agreed to acquire Associates First Capital Corporation (Associates) through a Merger of a wholly owned subsidiary of Citigroup with and into Associates, making Associates a subsidiary of Citigroup (the Merger). The Boards of Directors of both Citigroup and Associates have approved the Merger. The Merger, which is expected to be completed in the fourth quarter of 2000, is expected to be a tax-free exchange and to be accounted for on a "pooling of interests" basis. In connection with the proposed transaction, Associates will be merged with Citicorp, an indirect wholly owned subsidiary of Citigroup. Additionally, Citigroup has indicated that upon completion of the Merger, Citicorp intends to guarantee all of the outstanding indebtedness of Associates and its subsidiaries. The assets and liabilities of both companies will be combined at historical cost. Historical consolidated financial statements presented in future reports will be restated to include the accounts and results of Associates. The Merger is subject to customary closing conditions, including regulatory and Associates stockholder approval. 2. Accounting Policies and Financial Statement Classifications Citicorp and Associates are in the process of reviewing their accounting policies and financial statement classifications and, as a result of this review, it may be necessary to restate either Citicorp's or Associates' financial statements to conform to those accounting policies and classifications that are determined to be most appropriate. 3. Intercompany Transactions Transactions between Citicorp and Associates are not material in relation to the pro forma combined financial statements and therefore intercompany balances have not been eliminated from the pro forma combined accounts. 4. Pro Forma Adjustments The pro forma adjustments at September 30, 2000 reflect the cancellation and retirement of all Associates common stock held in treasury pursuant to the Merger Agreement. 5. Restructuring Charges and Future Cost Savings The pro forma financial statements do not reflect any restructuring costs related to the Merger. Management has not yet determined the amount of such costs; however, a restructuring charge may be recorded after the consummation of the Merger. Management does not anticipate that any such charge will be material to the financial position of the combined company. The pro forma financial statements do not reflect cost savings that may result from the reduction of overhead expenses, changes in corporate infrastructure and the elimination of redundant expenses. Although management expects that cost savings will result from the merger, there can be no assurance that cost savings will be achieved. - 7 - CITICORP INC. AND ASSOCIATES FIRST CAPITAL CORPORATION NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS - (Continued) The statements contained in note 5 above may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act. Forward-looking statements are typically identified by the words "believe," "expect," "anticipate," "intend," "estimate" and similar expressions. These forward-looking statements are based largely on management's expectations and are subject to a number of uncertainties. Actual results could differ materially from these forward-looking statements. Citicorp undertakes no obligation to update publicly or revise any forward-looking statements. - 8 - 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/ Roger W. Trupin ------------------------ Name: Roger W. Trupin Title: Controller Dated: November 15, 2000 - 9 -