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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-8198
Household International, Inc.
(Exact name of registrant as specified in its charter)
Delaware 36-3121988
(State of incorporation) (I.R.S. Employer Identification No.)
2700 Sanders Road 60070
Prospect Heights, Illinois (Zip Code)
(Address of principal executive
offices)
Registrant's telephone number, including area code: (847) 564-5000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- ---------------------
Common Stock, $1 par value New York Stock Exchange and Chicago Stock Exchange
Series A Junior Participating Preferred Stock
Purchase Rights (attached to and transferable only
with the Common Stock) New York Stock Exchange
Depositary Shares (each representing one-fortieth
share of 8 1/4% Cumulative Preferred Stock, Series
1992-A, no par, $1,000 stated value) New York Stock Exchange
5% Cumulative Preferred Stock New York Stock Exchange
$4.50 Cumulative Preferred Stock New York Stock Exchange
$4.30 Cumulative Preferred Stock New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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 [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [_]
The aggregate market value of the voting common stock held by nonaffiliates
of the registrant at March 15, 2001 was approximately $28.1 billion. The
number of shares of the registrant's common stock outstanding at March 15,
2001 was 464,934,337.
DOCUMENTS INCORPORATED BY REFERENCE
Certain portions of the registrant's 2000 Annual Report to Shareholders for
the fiscal year ended December 31, 2000: Parts I, II and IV.
Certain portions of the registrant's definitive Proxy Statement for its
2001 Annual Meeting scheduled to be held May 8, 2001: Part III.
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TABLE OF CONTENTS
PART/Item No. Page
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PART I.
Item 1. Business..................................................... 3
General...................................................... 3
Operations................................................... 4
Funding...................................................... 6
Regulation and Competition................................... 6
Cautionary Statement on Forward-Looking Statements........... 7
Item 2. Properties................................................... 8
Item 3. Legal Proceedings............................................ 8
Item 4. Submission of Matters to a Vote of Security Holders.......... 8
PART II.
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters...................................................... 9
Item 6. Selected Financial Data...................................... 9
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................... 9
Item 7A. Quantitative and Qualitative Disclosures About Market Risk... 9
Item 8. Financial Statements and Supplementary Data.................. 9
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure..................................... 9
PART III.
Item 10. Directors and Executive Officers of the Registrant........... 9
Executive Officers of the Registrant......................... 9
Item 11. Executive Compensation....................................... 10
Security Ownership of Certain Beneficial Owners and
Item 12. Management................................................... 10
Item 13. Certain Relationships and Related Transactions............... 10
PART IV.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K.......................................................... 11
Financial Statements......................................... 11
Reports on Form 8-K.......................................... 11
Exhibits..................................................... 11
Schedules.................................................... 13
Signatures.............................................................. 14
Report of Independent Public Accountants................................ F-1
Schedule I.............................................................. F-2
2
PART I.
Item 1. Business.
General
Household International, Inc. ("Household") is principally a non-operating
holding company. Household's subsidiaries primarily provide middle-market
consumers with several types of loan products in the United States, the United
Kingdom and Canada. Household and its subsidiaries (including the operations
of Beneficial Corporation ("Beneficial") which we acquired in 1998) may also
be referred to in this Form 10-K as "we," "us" or "our." We offer real estate
secured loans, auto finance loans, MasterCard and Visa* credit cards, private
label credit cards, tax refund anticipation loans, retail installment sales
finance loans and other types of unsecured loans, as well as credit and
specialty insurance. At December 31, 2000, we had approximately 28,000
employees and served over 48 million customers with $87.6 billion in managed
receivables and $67.4 billion in owned receivables. Information that is
reported on a managed basis relates to receivables that have been sold and
which we service with limited recourse ("securitize"), together with
receivables that appear on our balance sheet. Information that is reported on
an owned basis relates to the assets and liabilities we have on our balance
sheet. Owned assets may vary from period to period depending on the timing and
size of securitizations.
Household was created as a holding company in 1981 as a result of a
shareholder approved restructuring of Household Finance Corporation ("HFC"),
which was established in 1878. Our operational focus is on those areas of
consumer lending that we believe offer us the best opportunity to achieve the
highest returns on our capital. From late 1994 through 1997 we exited several
businesses that were providing insufficient returns on our investment, such as
our first mortgage origination and servicing business in the United States and
Canada, our individual life and annuity business, our consumer branch banking
business and our student loan business. Since 1997, we have:
. strengthened our consumer lending operation with the acquisition of
Transamerica Financial Services Holding Company;
. expanded our auto lending operation with the acquisition of ACC Consumer
Finance Corporation;
. merged with Beneficial, a consumer finance holding company;
. took steps to reposition our United States MasterCard and Visa credit
card business to de-emphasize undifferentiated credit card programs and;
. purchased all of the outstanding capital stock of Decision One Holding
Company LLC, a privately-held originator of non-conforming first and
second mortgage loans that packages such loans for sale to investors.
2000 Developments and Results. Continuing our operational focus, the
following developments and results occurred during 2000:
. In February 2000, we purchased all of the outstanding capital stock of
Renaissance Holdings, Inc., a privately held issuer of secured and
unsecured credit cards to non-prime customers, for approximately $300
million in common stock and cash.
. We took advantage of consolidation in the home equity lending industry by
acquiring real estate secured portfolios of $2.2 billion in March and
$1.5 billion in June.
. Our managed assets increased to $97.0 billion at year-end 2000 from $80.2
billion at year-end 1999 and $72.6 billion at year-end 1998. Our owned
assets increased to $76.7 billion at year-end 2000 from $60.7 billion at
year-end 1999 and $52.9 billion at year-end 1998.
. In connection with our $2 billion share repurchase program, we
repurchased 5.4 million shares of Household common stock for $209.3
million in 2000. Since announcing our share repurchase program in
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* MasterCard is a registered trademark of MasterCard International,
Incorporated and VISA is a registered trademark of VISA USA, Inc.
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March of 1999, we have repurchased 22.2 million shares for a total of
$922.2 million.
. Our net income was $1.7 billion in 2000, compared to $1.5 billion in 1999
and $.5 billion in 1998. Excluding merger and integration related costs
of $751.0 million after-tax and the $118.5 million after-tax gain on sale
of Beneficial's Canadian operations, operating net income in 1998 was
$1.2 billion.
. Diluted earnings per share was $3.55 in 2000, compared to $3.07 in 1999
and $1.03 in 1998. Excluding merger and integration related costs of
$751.0 million after-tax and the $118.5 million after-tax gain on sale of
Beneficial's Canadian operations, diluted operating earnings per share
was $2.30 in 1998.
Consumers residing in the state of California account for 16 percent of our
managed consumer portfolio in the United States. No other state has more than
seven percent concentration of this portfolio.
Financial information with respect to Household and its segments is set
forth in our Annual Report to Shareholders (the "2000 Annual Report"),
portions of which are incorporated herein by reference. See pages 26 through
85 of our 2000 Annual Report. Our products, operating markets and marketing
methods are described under OPERATIONS in this Form 10-K.
Operations
Our operations are divided into three reportable segments: Consumer, Credit
Card Services, and International. Our Consumer segment includes our consumer
lending, retail services and auto finance businesses. Our Credit Card Services
segment includes our domestic MasterCard and Visa credit card business. Our
International segment includes our foreign operations in the United Kingdom
and Canada. Information about operating segments that are not individually
reportable includes our insurance, tax services and commercial operations, as
well as our corporate and treasury activities which are included in the "All
Other" caption within our segment disclosure.
General
Across all reportable segments, we generally target non-conforming or non-
prime consumers. Such customers are individuals who have limited credit
histories, modest income, high debt-to-income ratios or have experienced
credit problems caused by occasional delinquencies, prior chargeoffs or other
credit related actions. These customers generally have higher delinquency and
credit loss probabilities and are charged a higher interest rate to compensate
us for the additional risk.
We have taken substantial measures to enhance our ability to maximize the
profitability of our segments. We use our centralized underwriting, collection
and processing functions to adapt our credit standards and collection efforts
to market conditions. Our underwriting, loan administration and collection
functions are supported by highly automated systems and processing facilities.
Our centralized collection system is augmented by personalized early
collection efforts. Maximizing our technology and otherwise streamlining our
operations and reducing our costs has enabled us to improve our efficiency
through specialization and economies of scale and allows us to operate more
efficiently than most of our competitors.
We also service each customer with a focus to expand that customer's
relationship with Household. Cross-selling of products, aggressive credit
management, "hands-on" customer care and targeted product marketing are means
we use to retain customers and grow our business.
Consumer
Our consumer lending business has been ranked by Inside B & C Lending as
the second largest subprime home equity originator in the United States based
upon their estimates and 2000 receivables volume as reported to them by such
lenders. Collectively, this business has over 1,400 branches located in 46
states and 3.4 million open customer accounts. It is marketed under both the
HFC and Beneficial brand names, each of which caters to a slightly different
type of customer in the middle-market population. Both brands offer secured
and unsecured
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products. These products are marketed through our retail branch network,
direct mail, telemarketing and Internet applications. In addition, we
originate loans through a network of over 200 correspondents under the
Household brand.
According to the latest publication of The Nilson Report, we are the second
largest provider of third party private label credit cards in the United
States based on managed receivables outstanding. The private label business of
our consumer segment has over 60 active merchant relationships with
approximately $9.9 billion in managed receivables and 8.5 million active
customer accounts. Approximately 32 percent of our private label receivables
are in the electronics industry, 35 percent are in the furniture industry, 11
percent are in the home products industry and 12 percent are in the
powersports vehicle industry. These products are generated through merchant
promotions, application displays, direct mail, telemarketing and Internet
applications.
Our auto finance business provides retail installment financing for the
purchase of new and used vehicles for consumers who do not have access to
traditional, prime-based lending sources. We also refinance existing auto
loans. Based on volume, we are one of the largest non-captive non-prime
automobile lenders in the United States. Our auto finance business generates
loan volume primarily through dealer relationships from which installment
contracts are purchased. Loans are also directly originated through alliance
partner referrals, direct mail and Internet applications.
Credit Card Services
Our Credit Card Services business includes our MasterCard and Visa
receivables in the United States, including the GM Card(R), the Union
Privilege ("UP") credit card, a Household Bank branded card, and the Orchard
Bank card. The GM Card(R), a co-branded credit card issued as part of our
alliance with General Motors Corporation ("GM"), enables customers to earn
discounts on the purchase or lease of a new GM vehicle. The UP card program
with the AFL-CIO provides benefits and services to members of 67 national and
international labor unions. Both the Household Bank and Orchard Bank branded
credit cards offer specialized credit card products to consumers underserved
by traditional providers. The GM Card(R) and UP card programs represent 46
percent and 29 percent, respectively, of the managed receivables in this
segment.
Our MasterCard and Visa business is generated primarily through direct
mail, telemarketing, Internet applications, application displays and
promotional activity associated with our affinity and co-branding
relationships. We also market our credit cards to our existing real estate
secured, private label and tax refund anticipation loan customers.
International
Our United Kingdom operations offer secured and unsecured lines of credit,
secured and unsecured closed-end loans, insurance products and credit cards
(including the GM Card(R) from Vauxhall and marbles(TM), an Internet enabled
credit card developed in connection with Freeserve, the United Kingdom's
largest Internet service provider). Such operations are conducted in England,
Scotland, Wales, Northern Ireland, and the Republic of Ireland. Loans are
marketed under the "HFC", "Beneficial" and "Hamilton Direct" brand names
through 181 branches, various merchants, direct mail and the Internet. Our
Canadian business offers consumer loans, mortgages, revolving credit and
retail finance and accepts deposits. Their products include real estate
secured and unsecured lines of credit, secured and unsecured closed-end loans
and private label credit cards. These products are marketed through 99 branch
offices in 10 provinces, direct mail, telemarketing and the Internet.
All Other
We also offer credit life, credit accident, health and disability, term and
specialty insurance products to our customers. Such products currently are
offered throughout the United States and Canada. Insurance is directly written
by or reinsured with one or more of our subsidiaries. Our tax refund
anticipation loan ("RAL") business is a cooperative program with H&R Block Tax
Services, Inc. and certain of its franchises, along with other
5
independent tax preparers, to provide loans to customers who are entitled to
federal tax refunds and who electronically file their federal income tax
returns with the United States Internal Revenue Service. Our remaining
commercial operations have continued to decline in size.
Funding
As a financial services organization, we must have access to funds at
competitive rates, terms and conditions to be successful. We fund our
operations in the global capital markets, primarily through the use of
securitizations, commercial paper, Federal funds borrowings, certificates of
deposit, bank lines, thrift notes, medium-term notes and long-term debt. We
also use derivative financial instruments to hedge our currency and interest
rate exposure. A description of our use of derivative financial instruments,
including interest rate swaps, foreign exchange contracts, and other
quantitative and qualitative information about our market risk is set forth on
pages 39 through 43, and 69 through 73 of our 2000 Annual Report. We also
maintain an investment portfolio which at year-end 2000 was approximately $3.3
billion. Approximately $1.7 billion of such investment securities were held by
our insurance subsidiaries. At year-end 2000, Household's long-term debt,
together with that of HFC, Beneficial, Household Bank, f.s.b. (the "Bank") and
our Canadian and U.K. subsidiaries, as well as the preferred stock of
Household, have been assigned investment grade ratings by all nationally
recognized statistical rating organizations that rate such instruments. These
organizations have also rated the commercial paper of HFC in their highest
rating category. For a detailed listing of the ratings that have been assigned
to Household and our significant subsidiaries, see Exhibit 99(b) to this Form
10-K.
Securitizations of consumer receivables have been, and will continue to be,
a source of our liquidity. During 2000 we securitized approximately $7.0
billion of receivables compared to $5.2 billion in 1999 and $3.6 billion in
1998. Additional information on our sources and availability of funding are
incorporated by reference to pages 39 through 42 of our 2000 Annual Report.
Regulation and Competition
Regulation. Our consumer lending businesses operate in a highly regulated
environment. Those businesses are subject to laws relating to discrimination
in extending credit, use of credit reports, privacy matters, disclosure of
credit terms and correction of billing errors. Our consumer branch lending
offices are also subject to certain regulations and legislation that limit
their operations in certain jurisdictions. For example, limitations may be
placed on the amount of interest or fees that a loan may bear, the amount that
may be borrowed, the types of actions that may be taken to collect or
foreclose upon delinquent loans or the information about a customer that may
be shared. Our consumer branch lending offices are generally licensed in those
jurisdictions in which they operate. Such licenses have limited terms but are
renewable, and are revocable for cause. Our private label operations are
conducted through state-licensed companies and our credit card banks.
The Bank is chartered by the Office of Thrift Supervision ("OTS") and is a
member of the Federal Home Loan Bank System. It is subject to examination and
supervision by the OTS and the Federal Deposit Insurance Corporation ("FDIC").
It is also subject to federal regulations concerning its general investment
authority as well as its ability to acquire financial institutions, enter into
transactions with affiliates and pay dividends. Such regulations also govern
the permissible activities and investments of its subsidiaries. It is also
subject to regulatory requirements setting forth minimum capital and liquidity
levels. Because of our ownership of the Bank, Household is a savings and loan
holding company subject to reporting and other regulations of the OTS.
Household and HFC have agreed with the OTS to maintain the regulatory capital
of the Bank at certain specified levels. Our national credit card banks are
chartered by the Office of the Comptroller of the Currency and are members of
the Federal Reserve System. National banks are generally subject to the same
type of regulatory supervision and restrictions as the Bank, but our national
banks only engage in credit card operations. The deposit accounts of the Bank
and our credit card banks are insured up to $100,000 by the FDIC.
The Bank and our credit card banks are also subject to the Federal Deposit
Insurance Corporation Improvement Act of 1991 ("FDICIA") and the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"). Among
other things, FDICIA created a five-tiered system of capital measurement for
regulatory purposes, placed limits on the ability of depository institutions
to acquire brokered deposits, and gave
6
broad powers to federal banking regulators, in particular the FDIC, to require
undercapitalized institutions to adopt and implement a capital restoration
plan and to restrict or prohibit a number of activities, including the payment
of cash dividends, which may impair or threaten the capital adequacy of the
insured depository institution. Federal banking regulators may apply
corrective measures to an insured depository institution, even if it is
adequately capitalized, if such institution is determined to be operating in
an unsafe or unsound condition or engaging in an unsafe or unsound activity.
In addition, federal banking regulatory agencies have adopted safety and
soundness standards governing operational and managerial activities of insured
depository institutions and their holding companies regarding internal
controls, loan documentation, credit underwriting, interest rate exposure,
asset growth and compensation. Under FIRREA, the FDIC may assess an affiliated
insured depository institution for the estimated losses incurred by the FDIC
upon the default of any affiliated insured institution.
On February 10, 1999, the four federal bank regulatory agencies revised
their joint "retail credit classification policy" which establishes guidelines
for classification of credit based on delinquency status and mandates
specified timeframes for recognizing losses in consumer loan portfolios. This
policy applies to any consumer loan held in our credit card banks or the Bank
and became effective in stages that began April 1, 1999. Substantially all of
the policy changes impacting our credit card banks or the Bank became
effective on October 1, 2000. The application of the new rules did not have a
material adverse impact on our financial statements or the way we manage our
business.
Our credit insurance business is subject to regulatory supervision under
the laws of the states in which it operates. Regulations vary from state to
state but generally cover licensing of insurance companies, premium and loss
rates, dividend restrictions, types of insurance that may be sold, permissible
investments, policy reserve requirements, and insurance marketing practices.
Competition. The consumer financial services industry in which we operate
is highly fragmented and intensely competitive. We compete with banks, thrifts
and other financial institutions in the United States, Canada and the United
Kingdom. We also compete with other finance companies, credit unions and
retailers. Generally, competition is in the form of "teaser" rates (below
market rates to entice customers to a product), expanded credit opportunities
(relaxed underwriting standards) or value added services. We compete by
developing a variety of consumer products to target specific market segments,
maintaining a strong service orientation and developing innovative marketing
alliances.
Cautionary Statement on Forward-Looking Statements
Certain matters discussed throughout this Form 10-K or in the information
incorporated herein by reference may constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995 and
as such may involve known and unknown risks, uncertainties and other factors
that may cause our actual results, performance or achievements to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Forward-looking
statements are based on our current views and assumptions, and involve risks
and uncertainties that could cause our results to be materially different than
those anticipated. The following important factors could affect our actual
results and could cause such results to vary materially from those expressed
herein or in any other document filed with the Securities and Exchange
Commission:
. changes in laws and regulations, including changes in accounting
standards;
. changes in overall economic conditions, including the interest rate
environment in which we operate, the capital markets in which we fund our
operations, recession, employment and currency fluctuations;
. consumer perception of the availability of credit, including price
competition in the market segments we target and the ramifications or
ease of filing for personal bankruptcy;
. the effectiveness of models or programs to predict loan delinquency or
loss and initiatives to improve collections in all business areas;
. continued consumer acceptance of our distribution systems and demand for
our loan or insurance products;
7
. changes associated with, as well as the difficulty in integrating
systems, operational functions and cultures of any organization acquired
by Household;
. the continued repositioning of our MasterCard/Visa business to further
penetrate selected consumer segments; and
. the ability to attract and retain qualified personnel to expand all of
our businesses.
Item 2. Properties.
Our operations are located throughout the United States, in 10 provinces in
Canada and in the United Kingdom with principal facilities located in Anaheim,
California; New Castle, Delaware; Brandon, Florida; Jacksonville, Florida;
Tampa, Florida; Chesapeake, Virginia; Virginia Beach, Virginia; Elmhurst,
Illinois; Hanover, Maryland; Bridgewater, New Jersey; Las Vegas, Nevada;
Charlotte, North Carolina; Portland, Oregon; Pomona, California; Prospect
Heights, Illinois; Salinas, California; San Diego, California; Wood Dale,
Illinois; London, Kentucky; Sioux Falls, South Dakota; North York, Ontario,
Canada; Birmingham, United Kingdom and Windsor, Berkshire, United Kingdom.
Substantially all branch offices, divisional offices, corporate offices,
regional processing and regional servicing center space are operated under
lease with the exception of the headquarters building for our United Kingdom
operations and processing facilities in Tampa, Florida, Las Vegas, Nevada and
London, Kentucky. We believe that such properties are in good condition and
meet our current and reasonably anticipated needs.
Item 3. Legal Proceedings.
We have developed and implemented compliance functions to monitor our
operations to ensure that we comply with all applicable laws. However, we are
parties to various legal proceedings resulting from ordinary business
activities relating to our current and/or former operations. Certain of these
actions are or purport to be class actions seeking damages in very large
amounts. Due to the uncertainties in litigation and other factors, we cannot
assure you that we will ultimately prevail in each instance. We believe that
we have meritorious defenses to these actions and any adverse decision should
not materially affect our consolidated financial condition.
During the past several years, the press has widely reported certain
industry related concerns which may impact us. Some of these involve the
amount of litigation instituted against finance and insurance companies
operating in the states of Alabama and Mississippi and the large punitive
awards obtained from juries in those states. Like other companies in this
industry, some of our subsidiaries are involved in a number of lawsuits
pending against them in Alabama and Mississippi, many of which relate to the
financing of satellite television broadcast receivers. We discontinued
financing such receivers in 1995. The Alabama and Mississippi cases generally
allege inadequate disclosure or misrepresentation of financing terms. In many
suits, other parties are also named as defendants. Unspecified compensatory
and punitive damages are sought. Several of these suits purport to be class
actions. The judicial climate in Alabama and Mississippi is such that the
outcome of all of these cases is unpredictable. Although our subsidiaries
believe they have substantive legal defenses to these claims and are prepared
to defend each case vigorously, a number of such cases have been settled or
otherwise resolved for amounts that in the aggregate are not material to our
operations. Appropriate insurance carriers have been notified of each claim,
and a number of reservations of rights letters have been received. Certain of
these claims have been partially covered by insurance.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
8
PART II.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
As of March 15, 2001 there were 19,468 record shareholders of Household's
common stock.
Additional information required by this Item is incorporated by reference
to pages 51 and 85 of our 2000 Annual Report.
Item 6. Selected Financial Data.
Information required by this Item is incorporated by reference to pages 26
and 27 of our 2000 Annual Report.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Information required by this Item is incorporated by reference to pages 28
through 50 of our 2000 Annual Report.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Information required by this Item is incorporated by reference to pages 39
through 43 of our 2000 Annual Report.
Item 8. Financial Statements and Supplementary Data.
Our Financial Statements meet the requirements of Regulation S-X. Such
Financial Statements and supplementary financial information specified by Item
302 of Regulation S-K, are incorporated by reference to pages 51 through 84 of
our 2000 Annual Report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable.
PART III.
Item 10. Directors and Executive Officers of the Registrant.
Executive Officers of the Registrant.
The following information on our executive officers is included pursuant to
Item 401(b) of Regulation S-K.
William F. Aldinger, age 53, joined Household in September 1994 as
President and Chief Executive Officer. In May 1996 he was appointed our
Chairman and Chief Executive Officer. Mr. Aldinger served as Vice Chairman of
Wells Fargo Bank and a Director of several Wells Fargo subsidiaries from 1986
until joining us. Mr. Aldinger is also a director of Household Finance
Corporation (one of our subsidiaries), Illinois Tool Works Inc. and MasterCard
International, Incorporated.
Lawrence N. Bangs, age 64, was appointed Vice Chairman effective January
2000, having previously served as Group Executive--Private Label, United
Kingdom, Canada, Insurance, Auto Finance and U.S. Consumer Banking since 1995.
Since joining Household Finance Corporation in 1959, Mr. Bangs has served in
various capacities in our U.S. consumer lending and United Kingdom operations,
most recently as Managing Director and Chief Executive Officer of our United
Kingdom operations.
Rocco J. Fabiano, age 44, was appointed Group Executive--Auto Finance,
Retail Services and Tax Services in January 2000, having joined us in 1997 as
a result of our acquisition of ACC Consumer Finance Corporation where he
served as Chairman and Chief Executive Officer since 1993.
9
Gary D. Gilmer, age 51, was appointed Group Executive--Consumer Lending in
1998. Since joining Household Finance Corporation in 1972, Mr. Gilmer has
served in various capacities in our consumer banking, private label and life
insurance businesses, most recently as Managing Director and Chief Executive
Officer of our United Kingdom operations.
Siddharth N. Mehta, age 42, joined Household in June 1998 as Group
Executive--Credit Card Services. Prior to joining Household, Mr. Mehta was
Senior Vice President of Boston Consulting Group in Los Angeles and co-leader
of Boston Consulting Group Financial Services Practice in the United States.
David A. Schoenholz, age 49, was appointed Group Executive--Chief Financial
Officer, effective January 2000, having previously served as Executive Vice
President--Chief Financial Officer since 1996, Senior Vice President--Chief
Financial Officer since 1994, Vice President--Chief Accounting Officer since
1993, Vice President since 1989 and Controller since 1987. He joined Household
in 1985 as Director--Internal Audit.
Colin P. Kelly, age 58, was appointed Senior Vice President--Administration
effective January 2000, having previously served as Senior Vice President--
Human Resources since 1996, and Vice President--Human Resources since 1988.
Mr. Kelly joined Household Finance Corporation in 1965 and has served in
various management positions.
Kenneth H. Robin, age 54, was appointed Corporate Secretary in 1998 and
Senior Vice President--General Counsel in 1996, having previously served as
Vice President--General Counsel since 1993. He joined Household in 1989 as
Assistant General Counsel--Financial Services. Prior to joining Household, Mr.
Robin held various positions in the legal departments of Citicorp and
Citibank, N.A. from 1977 to 1989.
There are no family relationships among our executive officers. The term of
office of each executive officer is at the discretion of the Board of
Directors.
Additional information required by this Item is incorporated by reference
to "Nominees For Director" and "Shares of Household Stock Beneficially Owned
by Directors and Executive Officers" in our definitive Proxy Statement for our
2001 Annual Meeting of Stockholders scheduled to be held May 9, 2001 (the
"2001 Proxy Statement").
Item 11. Executive Compensation.
Information required by this Item is incorporated by reference to
"Executive Compensation", "Report of the Compensation Committee on Executive
Compensation", "Performance of Household", "Employment Agreements", "Savings--
Stock Ownership and Pension Plans", "Incentive and Stock Option Plans", and
"Director Compensation" in our 2001 Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Information required by this Item is incorporated by reference to "Shares
of Household Stock Beneficially Owned by Directors and Executive Officers" and
"Security Ownership of Certain Beneficial Owners" in our 2001 Proxy Statement.
Item 13. Certain Relationships and Related Transactions.
Information required by this Item is incorporated by reference to
"Incentive and Stock Option Plans" and "Agreement with Mr. James H. Gilliam
Jr." in our 2001 Proxy Statement.
10
PART IV.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) Financial Statements.
The consolidated financial statements listed below, together with an
opinion of Arthur Andersen LLP dated January 15, 2001 with respect thereto,
are incorporated by reference herein pursuant to Item 8. Financial Statements
and Supplementary Data of this Form 10-K. An opinion of Arthur Andersen LLP is
also included in this Annual Report on Form 10-K.
Household International, Inc. and Subsidiaries:
Consolidated Statements of Income for the Three Years Ended December 31,
2000.
Consolidated Balance Sheets, December 31, 2000 and 1999.
Consolidated Statements of Cash Flows for the Three Years Ended December
31, 2000.
Consolidated Statements of Changes in Preferred Stock and Common
Shareholders' Equity for the Three Years Ended December 31, 2000.
Notes to Consolidated Financial Statements.
Report of Independent Public Accountants.
Selected Quarterly Financial Data (Unaudited).
(b) Reports on Form 8-K.
Current Reports on Form 8-K were filed on October 18, 2000 and November 8,
2000 by Household during the three months ended December 31, 2000.
(c) Exhibits.
3(i) Restated Certificate of Incorporation of Household
International, Inc. as amended (incorporated by reference to
Exhibit 3(i) of our Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998).
3(ii) Bylaws of Household International, Inc. as amended January 30,
2001.
4(a) Rights Agreement dated as of July 9, 1996, between Household
International, Inc. and Harris Trust and Savings Bank, as
Rights Agent (incorporated by reference to Exhibit 99.1 of our
Current Report on Form 8-K dated July 9, 1996).
4(b) Standard Multiple-Series Indenture Provisions for Senior Debt
Securities of Household Finance Corporation dated as of June
1, 1992 (incorporated by reference to Exhibit 4(b) to the
Registration Statement on Form S-3 of Household Finance
Corporation, No. 33-48854).
4(c) Indenture dated as of December 1, 1993 for Senior Debt
Securities between Household Finance Corporation and The Chase
Manhattan Bank (National Association), as Trustee
(incorporated by reference to Exhibit 4(b) to the Registration
Statement on Form S-3 of Household Finance Corporation, No.
33-55561 filed on September 20, 1994).
4(d) The principal amount of debt outstanding under each other
instrument defining the rights of Holders of our long-term
senior and senior subordinated debt does not exceed 10 percent
of our total assets. Household agrees to furnish to the
Securities and Exchange Commission, upon request, a copy of
each instrument defining the rights of holders of our long-
term senior and senior subordinated debt.
11
10.1 Household International, Inc. 1998 Key Executive Bonus Plan
(incorporated by reference to Exhibit 10.1 of our Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998).
10.2 Household International, Inc. Corporate Executive Bonus Plan.
10.3 Household International, Inc. Long-Term Executive Incentive
Compensation Plan, as Amended (incorporated by reference to
Exhibit 10.3 of our Annual Report on Form 10-K for the fiscal
year ended December 31, 1995).
10.4 Forms of stock option and restricted stock rights agreements
under the Household International, Inc. Long-Term Executive
Incentive Compensation Plan (incorporated by Reference to
Exhibit 10.4 of our Annual Report on Form 10-K for the fiscal
year ended December 31, 1995).
10.5 Household International, Inc. 1996 Long-Term Executive
Incentive Compensation Plan, as Amended.
10.6 Forms of stock option and restricted stock rights agreements
under the Household International, Inc. 1996 Long-Term
Executive Incentive Compensation Plan.
10.7 Household International, Inc. Deferred Fee Plan for Directors
(incorporated by reference to Exhibit 10.7 of our Annual
Report Form 10-K for the fiscal year ended December 31, 1999).
10.8 Household International, Inc. Deferred Phantom Stock Plan for
Directors. (incorporated by reference to Exhibit 10.8 of our
Annual Report Form 10-K for the fiscal year ended December 31,
1999).
10.9 Household International, Inc. Non-Qualified Deferred
Compensation Plan for Executives, as Amended (incorporated by
reference to Exhibit 10.9 of our Annual Report on Form 10-K
for the fiscal year ended December 31, 1998).
10.10 Executive Employment Agreement between Household International, Inc.
and W.F. Aldinger (incorporated by reference to Exhibit 10.10 of our
Annual Report on Form 10-K for the fiscal year ended December 31,
1998).
10.11 Executive Employment Agreement between Household
International, Inc. and L.N. Bangs (incorporated by reference
to Exhibit 10.11 of our Annual Report on Form 10-K for the
fiscal year ended December 31, 1998).
10.12 Executive Employment Agreement between Household
International, Inc. and G.D. Gilmer (incorporated by reference
to Exhibit 10.12 of our Annual Report on Form 10-K for the
fiscal year ended December 31, 1998).
10.13 Executive Employment Agreement between Household
International, Inc. and D.A. Schoenholz (incorporated by
reference to Exhibit 10.13 of our Annual Report on Form 10-K
for the fiscal year ended December 31, 1998).
10.14 Executive Employment Agreement between Household
International, Inc. and S.N. Mehta (incorporated by reference
to Exhibit 10.14 of our Annual Report on Form 10-K for the
fiscal year ended December 31, 1998).
10.15 Executive Employment Agreement between Household
International, Inc. and R.J. Fabiano.
10.16 Amended and Restated Supplemental Executive Retirement Plan
for W.F. Aldinger.
10.17 Beneficial Corporation 1990 Non-qualified Stock Option Plan
(incorporated by reference to Exhibit 4.4 of Beneficial
Corporation's Form S-8 filed on April 23, 1996, File No. 333-
02737).
12
10.18 Amendment to Beneficial Corporation 1990 Non-qualified Stock
Option Plan (incorporated By reference to Exhibit 4.2 of
Beneficial Corporation's Form S-8 filed July 1, 1998, File No.
333-58291).
11 Statement of Computation of Earnings per Share.
12 Statement of Computation of Ratio of Earnings to Fixed Charges
and to Combined Fixed Charges and Preferred Stock Dividends.
13 Material incorporated by reference to Household International,
Inc.'s 2000 Annual Report to Shareholders.
21 List of our subsidiaries.
23 Consent of Arthur Andersen LLP, Certified Public Accountants.
24 Power of Attorney, included on page 14 hereof.
99(a) Annual Report on Form 11-K for the Household International,
Inc. Tax Reduction Investment Plan (to be filed by amendment).
99(b) Ratings of Household International, Inc. and its significant
subsidiaries.
We will furnish copies of the exhibits referred to above to our stockholders
upon receiving a written request therefor. We charge fifteen cents per page for
providing these copies. Requests should be made to Household International,
Inc., 2700 Sanders Road, Prospect Heights, Illinois 60070, Attention: Corporate
Secretary.
(d) Schedules.
Report of Independent Public Accountants.
I--Condensed Financial Information of Registrant.
13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Household International, Inc. has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Household International, Inc.
Dated: March 28, 2001
/s/ W.F. Aldinger
By: _________________________________
W.F. Aldinger, Chairman
and Chief Executive Officer
Each person whose signature appears below constitutes and appoints J.W.
Blenke, L.S. Mattenson and J.S. VanderLinde and each or any of them (with full
power to act alone), as his/her true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him/her in his/her
name, place and stead, in any and all capacities, to sign this Form 10-K and
any and all amendments to this Form 10-K and to file the same, with all
exhibits thereto, and all other documents in connection therewith, with the
Securities and Exchange Commission, granting unto each such attorneys-in-fact
and agent full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents and purposes
as he/she might or could do in person, hereby ratifying and confirming all
that such attorneys-in-fact and agents or their substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of Household
International, Inc. and in the capacities and on the date indicated.
Signature Title Date
--------- ----- ----
/s/ W.F. Aldinger Chairman and Chief Executive
____________________________________ Officer and Director (as
(W.F. Aldinger) principal executive
officer)
/s/ R.J. Darnall Director
____________________________________
(R.J. Darnall)
/s/ G.G. Dillon Director
____________________________________
(G.G. Dillon)
/s/ J.A. Edwardson Director March 28, 2001
____________________________________
(J.A. Edwardson)
/s/ M.J. Evans Director
____________________________________
(M.J. Evans)
/s/ J.D. Fishburn Director
____________________________________
(J.D. Fishburn)
/s/ C.F. Freidheim, Jr. Director
____________________________________
(C.F. Freidheim, Jr.)
14
/s/ J.H. Gilliam, Jr. Director
____________________________________
(J.H. Gilliam, Jr.)
/s/ L.E. Levy Director
____________________________________
(L.E. Levy)
/s/ G.A. Lorch Director
____________________________________
(G.A. Lorch)
/s/ J.D. Nichols Director
____________________________________
(J.D. Nichols)
/s/ J.B. Pitblado Director March 28, 2001
____________________________________
(J.B. Pitblado)
/s/ S.J. Stewart Director
____________________________________
(S.J. Stewart)
/s/ L.W. Sullivan, M.D. Director
____________________________________
(L.W. Sullivan, M.D.)
/s/ D.A. Schoenholz Group Executive--Chief
____________________________________ Financial Officer (also the
(D.A. Schoenholz) principal financial and
accounting officer)
15
EXHIBIT INDEX
Exhibit
No Document Description
------- --------------------
3(i) Restated Certificate of Incorporation of Household
International, Inc. as amended (incorporated by reference to
Exhibit 3(i) of our Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998).
3(ii) Bylaws of Household International, Inc. as amended January 30,
2001.
4(a) Rights Agreement dated as of July 9, 1996, between Household
International, Inc. and Harris Trust and Savings Bank, as Rights
Agent (incorporated by reference to Exhibit 99.1 of our Current
Report on Form 8-K dated July 9, 1996).
4(b) Standard Multiple-Series Indenture Provisions for Senior Debt
Securities of Household Finance Corporation dated as of June 1,
1992 (incorporated by reference to Exhibit 4(b) to the
Registration Statement on Form S-3 of Household Finance
Corporation, No. 33-48854).
4(c) Indenture dated as of December 1, 1993 for Senior Debt
Securities between Household Finance Corporation and The Chase
Manhattan Bank (National Association), as Trustee (incorporated
by reference to Exhibit 4(b) to the Registration Statement on
Form S-3 of Household Finance Corporation, No. 33-55561 filed on
September 20, 1994).
4(d) The principal amount of debt outstanding under each other
instrument defining the rights of holders of our long-term
senior and senior subordinated debt does not exceed 10 percent
of our total assets. Household agrees to furnish to the
Securities and Exchange Commission, upon request, a copy of each
instrument defining the rights of holders of our long-term
senior and senior subordinated debt.
10.1 Household International, Inc. 1998 Key Executive Bonus Plan
(incorporated by reference to Exhibit 10.1 of our Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998).
10.2 Household International, Inc. Corporate Executive Bonus Plan.
10.3 Household International, Inc. Long-Term Executive Incentive
Compensation Plan, as amended (incorporated by reference to
Exhibit 10.3 of our Annual Report on Form 10-K for the fiscal
year ended December 31, 1995).
10.4 Forms of stock option and restricted stock rights agreements
under the Household International, Inc. Long-Term Executive
Incentive Compensation Plan (incorporated by reference to
Exhibit 10.4 of our Annual Report on Form 10-K for the fiscal
year ended December 31, 1995).
10.5 Household International, Inc. 1996 Long-Term Executive Incentive
Compensation Plan, as amended.
10.6 Forms of stock option and restricted stock rights agreements
under the Household International, Inc. 1996 Long-Term Executive
Incentive Compensation Plan.
10.7 Household International, Inc. Deferred Fee Plan for Directors
(incorporated by reference to Exhibit 10.7 of our Annual Report
on Form 10-K for the fiscal year ended December 31, 1999).
10.8 Household International, Inc. Deferred Phantom Stock Plan for
Directors (incorporated by reference to Exhibit 10.8 of our
Annual Report on Form 10-K for the fiscal year ended December
31, 1999).
16
Exhibit
No Document Description
------- --------------------
10.9 Household International, Inc. Non-Qualified Deferred
Compensation Plan for Executives, as amended (incorporated by
reference to Exhibit 10.9 of our Annual Report on Form 10-K for
the fiscal year ended December 31, 1998).
10.10 Executive Employment Agreement between Household International,
Inc. and W. F. Aldinger (incorporated by reference to Exhibit
10.10 of our Annual Report on Form 10-K for the fiscal year
ended December 31, 1998).
10.11 Executive Employment Agreement between Household International,
Inc. and L. N. Bangs (incorporated by reference to Exhibit 10.11
of our Annual Report on Form 10-K for the fiscal year ended
December 31, 1998).
10.12 Executive Employment Agreement between Household International,
Inc. and G. D. Gilmer (incorporated by reference to Exhibit
10.12 of our Annual Report on Form 10-K for the fiscal year
ended December 31, 1998).
10.13 Executive Employment Agreement between Household International,
Inc. and D. A. Schoenholz (incorporated by reference to Exhibit
10.13 of our Annual Report on Form 10-K for the fiscal year
ended December 31, 1998).
10.14 Executive Employment Agreement between Household International,
Inc. and S. N. Mehta (incorporated by reference to Exhibit 10.14
of our Annual Report on Form 10-K for the fiscal year ended
December 31, 1998).
10.15 Executive Employment Agreement between Household International,
Inc. and R. J. Fabiano.
10.16 Amended and Restated Supplemental Executive Retirement Plan for
W. F. Aldinger.
10.17 Beneficial Corporation 1990 Non-qualified Stock Option Plan
(incorporated by reference to Exhibit 4.4 of Beneficial
Corporation's Form S-8 filed on April 23, 1996, File No.
333-02737).
10.18 Amendment to Beneficial Corporation 1990 Non-qualified Stock
Option Plan (incorporated by reference to Exhibit 4.2 of
Beneficial Corporation's Form S-8 filed July 1, 1998, File No.
333-58291).
11 Statement of Computation of Earnings per Share.
12 Statement of Computation of Ratio of Earnings to Fixed Charges
and to Combined Fixed Charges and Preferred Stock Dividends.
13 Material incorporated by reference to Household International,
Inc.'s 2000 Annual Report to Shareholders.
21 List of our subsidiaries.
23 Consent of Arthur Andersen LLP, Certified Public Accountants.
24 Power of Attorney, included on page 14 hereof.
99(a) Annual Report on Form 11-K for the Household International, Inc.
Tax Reduction Investment Plan (to be filed by amendment).
99(b) Ratings of Household International, Inc. and its significant
subsidiaries.
17
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
Household International, Inc.:
We have audited in accordance with auditing standards generally accepted in
the United States, the financial statements included in Household
International, Inc.'s 2000 annual report to shareholders incorporated by
reference in this Form 10-K, and have issued our report thereon dated January
15, 2001. Our audits were made for the purpose of forming an opinion on those
statements taken as a whole. The schedule listed in Item 14(d) is the
responsibility of the company's management and is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part
of the basic financial statements. This schedule has been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.
Arthur Andersen LLP
Chicago, Illinois
January 15, 2001
F-1
SCHEDULE I
HOUSEHOLD INTERNATIONAL, INC.
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF INCOME
(In millions)
Year ended December 31
------------------------
2000 1999 1998
-------- -------- ------
Equity in earnings of subsidiaries.................... $1,747.9 $1,521.4 $546.3
Other income.......................................... 34.6 32.5 24.6
-------- -------- ------
Total income...................................... 1,782.5 1,553.9 570.9
-------- -------- ------
Expenses:
Administrative...................................... 72.7 62.8 49.2
Interest............................................ 61.3 50.6 45.2
-------- -------- ------
Total expenses.................................... 134.0 113.4 94.4
-------- -------- ------
Income before income tax benefit...................... 1,648.5 1,440.5 476.5
Income tax benefit.................................... 52.2 45.9 47.6
-------- -------- ------
Net income........................................ $1,700.7 $1,486.4 $524.1
======== ======== ======
Total comprehensive income........................ $1,742.9 $1,374.6 $546.7
======== ======== ======
See accompanying note to condensed financial statements.
F-2
SCHEDULE I (continued)
HOUSEHOLD INTERNATIONAL, INC.
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED BALANCE SHEETS
(In millions)
December 31
-----------------
2000 1999
-------- --------
Assets
Cash....................................................... -- $ 2.2
Investments in and advances to (from) subsidiaries......... $9,034.7 7,400.7
Other assets............................................... 604.9 533.7
-------- --------
Total assets............................................... $9,639.6 $7,936.6
======== ========
Liabilities and Shareholders' Equity
Commercial paper........................................... $ 292.3 $ 397.7
Senior debt (with original maturities over one year)....... 185.0 185.6
-------- --------
Total debt................................................. 477.3 583.3
Other liabilities.......................................... 371.7 363.0
-------- --------
Total liabilities.......................................... 849.0 946.3
Company obligated mandatorily redeemable preferred
securities of subsidiary trusts*.......................... 675.0 375.0
Preferred stock............................................ 164.4 164.4
Common shareholders' equity................................ 7,951.2 6,450.9
-------- --------
Total liabilities and shareholders' equity................. $9,639.6 $7,936.6
======== ========
- --------
* The sole assets of the four trusts are Junior Subordinated Deferrable
Interest Notes issued by Household International, Inc. in June 2000, March
1998, June 1996 and June 1995, bearing interest at 10.00, 7.25, 8.70 and
8.25 percent, respectively, with principal balances of $309.3, $206.2,
$103.1 and $77.3 million, respectively, and due June 30, 2030, December 31,
2037, June 30, 2036 and June 30, 2025, respectively.
See accompanying note to condensed financial statements.
F-3
SCHEDULE I (continued)
HOUSEHOLD INTERNATIONAL, INC.
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF CASH FLOWS
(In millions)
Year ended December 31
------------------------------
2000 1999 1998
--------- --------- --------
Cash provided by (used in) operations
Net income................................... $ 1,700.7 $ 1,486.4 $ 524.1
Adjustments to reconcile net income to net
cash provided by (used in) operations:
Equity in earnings of subsidiaries......... (1,747.9) (1,521.4) (546.3)
Other operating activities................. (10.5) (11.6) 193.8
--------- --------- --------
Cash provided by (used in) operations.......... (57.7) (46.6) 171.6
--------- --------- --------
Investment in Operations
Dividends from subsidiaries.................. 648.0 1,160.5 1,067.3
Dividends from pooled affiliate.............. -- -- 75.4
Investment in and advances to (from)
subsidiaries, net........................... (282.5) 8.7 (709.3)
Other investing activities................... (.8) 2.5 1.9
--------- --------- --------
Cash increase from investment in operations.... 364.7 1,171.7 435.3
--------- --------- --------
Financing and Capital Transactions
Net change in commercial paper and bank
borrowings.................................. (105.4) 82.1 34.1
Retirement of senior debt.................... -- (89.7) --
Issuance of senior debt...................... -- 85.6 --
Shareholders' dividends...................... (358.9) (332.1) (256.5)
Shareholders' dividends--pooled affiliate.... -- -- (61.8)
Issuance of company obligated mandatorily
redeemable preferred securities of
subsidiary trusts........................... 300.0 -- 200.0
Purchase of treasury stock................... (209.3) (915.9) (412.0)
Treasury stock activity--pooled affiliate.... -- -- (11.4)
Issuance of common stock..................... 64.4 45.0 .8
Redemption of preferred stock................ -- -- (100.1)
--------- --------- --------
Cash decrease from financing and capital
transactions.................................. (309.2) (1,125.0) (606.9)
--------- --------- --------
Increase (decrease) in cash.................... (2.2) .1 --
Cash at January 1.............................. 2.2 2.1 2.1
--------- --------- --------
Cash at December 31............................ $ -- $ 2.2 $ 2.1
========= ========= ========
See accompanying note to condensed financial statements.
F-4
SCHEDULE I (continued)
HOUSEHOLD INTERNATIONAL, INC.
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
NOTE TO CONDENSED FINANCIAL STATEMENTS OF REGISTRANT
The condensed financial statements of Household International, Inc. have
been prepared on a parent company unconsolidated basis.
Under an agreement with the Office of Thrift Supervision, Household will
maintain the capital of the Bank, at a level consistent with certain minimum
capital requirements.
Household received cash dividends from the Bank of $275 and $75 million in
1999 and 1998, respectively. No dividends were received from the Bank in 2000.
Household has guaranteed payment of certain long-term debt obligations of
Household Financial Corporation Limited ("HFCL"), a Canadian subsidiary. The
amount of guaranteed debt outstanding at HFCL on December 31, 2000 and 1999
was $.3 and $.4 billion, respectively.
Household has also guaranteed payment of certain debt obligations
(excluding certain deposits) of Household International (U.K.) Limited
("HIUK"). The amount of guaranteed debt outstanding at HIUK on December 31,
2000 and 1999 was approximately $2.2 and $2.7 billion, respectively.
F-5