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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, 1998
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)
36-3121988
Delaware (I.R.S. Employer Identification No.)
(State of incorporation)
60070
2700 Sanders Road (Zip Code)
Prospect Heights, Illinois
(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
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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 17, 1999 was approximately $44.9375
billion. The number of shares of the registrant's common stock outstanding at
March 17, 1999 was 485,203,774.
DOCUMENTS INCORPORATED BY REFERENCE
Certain portions of the registrant's 1998 Annual Report to Shareholders
for the fiscal year ended December 31, 1998: Parts I, II and IV.
Certain portions of the registrant's definitive Proxy Statement for its
1999 Annual Meeting scheduled to be held May 12, 1999: 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....................................................... 5
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....................................................... 8
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 Disclosure 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
Item 12. Security Ownership of Certain Beneficial Owners and
Management.................................................... 11
Item 13. Certain Relationships and Related Transactions................ 11
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"), through its subsidiaries
primarily provides 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 which we acquired in 1998)
may also be referred to in this Form 10-K as "we," "us" or "our." We offer
home equity loans, auto finance loans, MasterCard* and Visa* credit cards,
private label credit cards, tax refund anticipation loans and other types of
unsecured loans. We also offer credit and specialty insurance in the United
States, the United Kingdom and Canada. At December 31, 1998, we had
approximately 23,500 employees and served approximately 30 million customer
accounts with $63.9 billion in managed receivables and $44.2 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. In the last five years, we have been
restructuring our operations to focus on the financial services business,
specifically on those areas of the consumer finance business that we believe
offer us the best opportunity to achieve the highest returns on our capital.
From late 1994 through 1996 we exited from 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 and our consumer branch banking business,
including the sale of our consumer deposits. In June 1997 we purchased
Transamerica Financial Services Holding Company ("TFS"), the branch-based
consumer finance subsidiary of Transamerica Corporation for $1.1 billion and
repaid $2.8 billion of TFS debt. In connection with this acquisition, we
completed a $1.0 billion public offering of Household common stock. In October
1997, we purchased all of the outstanding capital stock of ACC Consumer
Finance Corporation ("ACC"), an automobile finance company for 4.2 million
shares of Household common stock and cash. In December 1997, we decided to
exit from the business of originating and acquiring student loans.
1998 Developments and Results. The following results and developments
occurred during 1998:
. In June 1998, Household merged with Beneficial Corporation
("Beneficial"), a consumer finance holding company. Each outstanding
share of Beneficial common stock was converted into 3.0666 shares of
Household's common stock, resulting in the issuance of approximately
168.4 million shares of common stock. Because this merger was accounted
for as a pooling of interests, our consolidated financial statements have
been restated to include the results of operations, financial position
and changes in cash flows of Beneficial for all periods presented.
. In 1998, we effected a three-for-one split of Household's common stock in
the form of a dividend, issued on June 1, 1998 to shareholders of record
as of May 14, 1998. Accordingly, all common share and per common share
data reported in this Form 10-K include the effect of our stock split.
. In 1998 prior to our merger with Beneficial, Beneficial sold its Canadian
and German operations representing combined assets of approximately $1.0
billion.
. During 1998 we began to refocus our United States MasterCard and Visa
operations to de-emphasize undifferentiated credit card programs. As part
of this process we sold approximately $1.9 billion of credit card
receivables.
. Our managed assets increased to $72.6 billion at year-end 1998 from $71.3
billion at year-end 1997 and $66.2 billion at year-end 1996. Our owned
assets increased to $52.9 billion at year-end 1998 from $46.8 billion at
year-end 1997 and $45.3 billion at year-end 1996.
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* MasterCard is a registered trademark of MasterCard International,
Incorporated and VISA is a registered trademark of VISA USA, Inc.
3
. Operating net income (net income excluding merger and integration related
costs and the gain on the sale of Beneficial's Canadian operations) was
$1,156.6 million in 1998, an increase of 23 percent over 1997 and 41
percent over 1996. Net income in 1997 was $940.3 million, 15 percent
higher than 1996 earnings of $819.6 million. Diluted operating earnings
per share was $2.30 in 1998, up 19 percent from $1.93 in 1997, which was
up 12 percent from $1.73 in 1996. Net income was $524.1 million and
diluted earnings per share was $1.03 in 1998.
. In March 1998 one of our subsidiary trusts issued $200 million of company
obligated mandatorily redeemable preferred securities.
. In October 1998 we redeemed, at par, all outstanding shares of our 7.35%
Preferred Stock, Series 1993-A for $25 per depositary share plus accrued
and unpaid dividends.
The state of California accounts for 19 percent of our managed consumer
portfolio in the United States. California is the only state with more than
ten percent of this portfolio.
Our summary financial information is set forth in our Annual Report to
Shareholders (the "1998 Annual Report"), portions of which are incorporated
herein by reference. See pages 18 through 73 and 75 through 77 of our 1998
Annual Report. The segment information contained for the years ended December
31, 1997 and December 31, 1996 has been restated following the change in the
composition or our reported segments. The products we offer, our operating
markets and our marketing methods are described under OPERATIONS in this Form
10-K.
Operations
Our operations are divided into three reportable segments: Consumer, which
includes our branch-based consumer finance, private label and auto finance
businesses in the United States; Credit Card, which includes our MasterCard
and Visa business in the United States; and International, which comprises our
foreign operations which include the United Kingdom and Canada. Information
about operating segments that are not individually reportable includes our
insurance, refund anticipation loans and commercial operations, as well as our
corporate and treasury activities which are included in the "All Other"
caption within our segment disclosure.
Consumer
Our branch-based consumer finance business constitutes the second largest
consumer finance company in the United States. Collectively, this business has
1,400 branches located in 46 states and 3 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 products. These products
are marketed through our retail branch network, direct mail, telemarketing,
correspondents and brokers.
We are the second largest provider of third party private label credit
cards in the United States. The private label business of our consumer segment
has over 100 merchant relationships with approximately $8.3 billion in managed
receivables and 6.8 million active customer accounts. Approximately 33 percent
of our private label receivables are in the electronics industry while
approximately 32 percent are in the furniture industry. Over 10 percent of our
private label receivables are in the home products industry and approximately
7 percent are in the recreational vehicle industry. These products are
generated through merchant promotions, application displays, direct mail,
telemarketing and the Internet.
We are the second largest non-captive sub-prime automobile lender in the
United States. We have over 5,400 dealer relationships nationwide with
approximately $1.8 billion in managed receivables. While the sub-prime auto
finance market generally continues to grow, it also has recently experienced
some consolidation thereby increasing the competitiveness in this industry.
Our auto finance business generates loan volume primarily through dealer
relationships from which installment contracts are purchased. Loans are also
generated from alliance partners, direct mail and the Internet.
4
Credit Cards
Our Mastercard and Visa operations in the United States reported lower
earnings in 1998 primarily due to lower average receivables and higher credit
losses. Last year we hired new senior operating management for this segment,
actively repriced portions of our Mastercard and Visa portfolios and reduced
credit lines which led to increased account attrition. We also decided to de-
emphasize the undifferentiated Mastercard and Visa portfolios in the United
States and to refocus such product to target customers and prospects of our
other businesses. Our MasterCard and Visa business is generated primarily
through direct mail, telemarketing, application displays and promotional
activity associated with our affinity and co-branding relationships, including
our alliance with General Motors Corporation ("GM") to issue the GM Card, a
co-branded credit card, and our alliance with Union Privilege to issue the
Union Privilege affinity card ("Union Privilege"). Our largest account base
for MasterCard and VISA credit cards is in California. Approximately 52
percent of managed receivables for this segment were originated under the GM
Card program while approximately 26 percent were originated under the Union
Privilege program.
International
We are the second largest consumer finance company, the third largest
provider of retail finance and the fifth largest credit card issuer in the
United Kingdom. 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 from Vauxhall and the Goldfish Card
issued under an alliance with the Centrica Group--the United Kingdom's major
natural gas supplier). Such operations are conducted in England, Scotland,
Wales, Ireland and Northern Ireland. Loans are marketed through a branch
network consisting of 179 branches, merchants and direct mail. Our Canadian
consumer finance business offers consumer loans, mortgages, revolving credit,
retail finance and accepts deposits. Their products include home equity and
unsecured lines of credit, secured and unsecured closed-end loans and private
label credit cards. These products are marketed through 75 branch offices in
10 provinces, direct mail and telemarketing. Information concerning foreign
owned receivables, and comparative revenues, income before income taxes, and
identifiable assets and long-lived assets for the years ended December 31,
1998, 1997 and 1996 are incorporated by reference to pages 54 and 73 of our
1998 Annual Report.
All Other
Where applicable laws permit, we 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. ("H&R Block") and
certain of its franchises, along with other independent tax preparers, to
provide loans to customers who are entitled to tax refunds and who
electronically file their income tax returns with the 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 borrowing, 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 29-31, 33, 34 and 58 through 65 of
our 1998 Annual Report. We also maintain an investment portfolio which at
year-end 1998 was approximately $3.2 billion. Approximately $2.6 billion of
such investment securities were held by our insurance subsidiaries. At year-
end 1998, Household's long-term debt, together with that of HFC, Beneficial
and Household Bank, f.s.b. (the "Bank") and the preferred stock of Household,
have been assigned investment
5
grade ratings by four nationally recognized statistical rating organizations.
These organizations have also rated the commercial paper of HFC in their
highest rating category. Three of these organizations have rated Household's
commercial paper 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 are an important source of our
liquidity. During 1998 we securitized approximately $3.6 billion of
receivables compared to $8.3 billion in 1997 and $8.6 billion in 1996.
Additional information on our sources and availability of funding are
incorporated by reference to pages 29 through 32 of our 1998 Annual Report.
Regulation and Competition
Regulation. Our consumer finance businesses operate in a highly regulated
environment. Those businesses are subject to laws relating to discrimination
in extending credit, use of credit reports, 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 or the
types of actions that may be taken to collect or foreclose upon delinquent
loans. 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 Comptroller of the
Currency and are members of the Federal Reserve System. The deposit accounts
of these national banks are insured up to $100,000 by the FDIC. 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 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 creates a five-tiered system of capital measurement for
regulatory purposes, places limits on the ability of depository institutions
to acquire brokered deposits, and gives 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 recently 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, four
federal bank regulatory agencies revised its joint "retail credit
classification policy" which establishes guidelines for classification of
credit based on delinquency status and
6
mandates specified timeframes for recognizing losses in consumer loan
portfolios. This policy will apply to any consumer loan held in our credit
card banks or the Bank and will become effective in stages beginning April 1,
1999. Substantially all of the policy changes impacting our credit card banks
or the Bank will become effective October 1, 2000. We expect to adopt the
changes to the policy on October 1, 2000 and have not yet quantified its
impact on our financial statements.
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 generally compete with
banks, thrifts and other financial institutions in the United States, Canada
and the United Kingdom. One of the industry challenges and opportunities we
face is the recent consolidation in the financial services industry. We can
use our centralized underwriting, collection and processing functions to adapt
our credit standards and collection efforts to market conditions. This
capability was leveraged to the Beneficial branch network as the Beneficial
branches were integrated with HFC's in 1998. Our use of highly automated
systems and processing facilities to support our underwriting, loan
administration and collection functions across all of our consumer businesses
assists us in this regard. A centralized collection system for past due
accounts is augmented by early collection efforts in the consumer finance
branch network for products other than credit cards. Maximizing our technology
and otherwise streamlining our operations and reducing our costs has allowed
us to improve our efficiency through specialization and economies of scale and
allows us to operate more efficiently than some of our competitors. We also
compete with other finance companies, banks, savings and loan companies,
credit unions and retailers, by offering a variety of consumer products,
maintaining a strong service orientation and developing innovative marketing
programs.
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 and currency fluctuations;
. our ability and the ability of our key service providers, vendors or
suppliers to replace, modify or upgrade our business systems to
adequately address Year 2000 issues;
. consumer perception of the availability of credit, including price
competition in the market segments we target and the ramifications 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;
. consumer acceptance and demand for our loan products;
. inability to continue to integrate systems, operational functions and
cultures of Beneficial with those of Household; and
. the repositioning of our MasterCard/Visa business to successfully market
to selected consumer segments.
7
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; Wilmington, Delaware; Jacksonville, Florida; Tampa, Florida;
Chesapeake, Virginia; Virginia Beach, Virginia; Elmhurst, Illinois; Hanover,
Maryland; Bridgewater, New Jersey; Las Vegas, Nevada; Pomona, California;
Prospect Heights, Illinois; Salinas, California; San Diego, California; Wood
Dale, Illinois; 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 is operated under
lease with the exception of the headquarters building for our United Kingdom
operations, our processing facility in Tampa, Florida and a credit card
processing facility in Las Vegas, Nevada. 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, including product liability related
claims, 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 state of Alabama and the large punitive awards obtained from
juries in that state. Like other companies in this industry, some of our
subsidiaries are involved in a number of lawsuits pending against them in
Alabama, many of which relate to the financing of satellite television
broadcast receivers. We discontinued financing such receivers in 1995. The
Alabama 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 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.
Prior to our merger with Beneficial, Beneficial was involved in litigation
with the Internal Revenue Service ("IRS") over matters relating to a former
insurance subsidiary that occurred in the mid- to late 1980's. In early 1999,
a basis for settlement with the IRS was reached and filed with the U.S. Tax
Court. It is expected that this settlement will be finalized in 1999 and will
not result in any loss or charge to us in excess of the amounts accrued for
this matter by Beneficial.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
PART II.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
As of March 17, 1999 there were 20,492 record shareholders of Household's
common stock.
8
Additional information required by this Item is incorporated by reference
to pages 41 and 77 of our 1998 Annual Report.
Item 6. Selected Financial Data.
Information required by this Item is incorporated by reference to page 18
of our 1998 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 20
through 40 of our 1998 Annual Report.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Information required by this Item is incorporated by reference to pages 30,
31, 33 and 34 of our 1998 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 41 through 73
and page 75 of our 1998 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 51, 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 62, was appointed Group Executive--Private Label,
United Kingdom, Canada, Insurance, Auto Finance and U.S. Consumer Banking in
1995. Since joining Household Finance Corporation in 1959, Mr. Bangs has
served in various capacities in our U.S. consumer finance and United Kingdom
operations, most recently as Managing Director and Chief Executive Officer of
our United Kingdom operations.
Gary D. Gilmer, age 49, was appointed Group Executive--U.S. Consumer
Finance 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.
Siddarth N. Mehta, age 40, joined Household in June 1998, as Group
Executive--U.S. BankCard. 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.
9
David A. Schoenholz, age 47, was appointed Executive Vice President--Chief
Financial Officer in 1996, having previously served as 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 56, was appointed Senior Vice President--Human
Resources in 1996, having previously served as 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 52, 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.
Edgar D. Ancona, age 46, was appointed Managing Director--Treasurer in
1996, having previously served as Vice President--Treasurer since joining
Household in 1994. For the previous 17 years he held a variety of treasury and
operational positions with Citicorp.
John W. Blenke, age 43, was appointed Vice President--Corporate Law and
Assistant Secretary in 1996, having previously served as Assistant General
Counsel and Secretary since 1993, and Assistant General Counsel--Securities
and Corporate Law and Assistant Secretary since 1991. Mr. Blenke joined
Household in 1989 as Corporate Finance Counsel.
Michael A. DeLuca, age 50, was appointed Managing Director--Taxes in 1996,
having previously served as Vice President--Taxes from 1988 to 1996. Mr.
DeLuca joined Household in 1985 as Director of Tax Planning and Tax Counsel.
Kenneth H. Harvey, age 38, was appointed Managing Director--Chief
Information Officer in 1999, having previously served in various systems and
technology areas since joining us in 1989.
Steven L. McDonald, age 38, was appointed Managing Director and Corporate
Controller in 1999 having previously served as Vice President--Controller
since 1996. From 1991 until joining Household in 1996, he was Senior Vice
President--Accounting and Finance of First USA, Inc.
Craig A. Streem, age 49, joined Household in 1996 as Vice President--
Investor Relations. Prior to joining Household, he was Corporate Vice
President and Director of Investor Relations of PaineWebber Group, Inc., from
1995 to 1996, Vice President of Investor Relations and Corporate Secretary of
National Media Corporation from 1992 to 1994, and held various positions in
the investor relations, corporate treasury and corporate accounting and
reporting areas of American Express Company from 1979 to 1992.
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
1999 Annual Meeting of Stockholders scheduled to be held May 12, 1999 (the
"1999 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 1999 Proxy Statement.
10
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 1999 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 "Consulting Agreements with Messrs.
Farris and Gilliam" in our 1999 Proxy Statement.
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 20, 1999, 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, 1998.
Consolidated Balance Sheets, December 31, 1998 and 1997.
Consolidated Statements of Cash Flows for the Three Years Ended
December 31, 1998.
Consolidated Statements of Changes in Preferred Stock and Common
Shareholders' Equity for the Three Years Ended December 31, 1998.
Notes to Consolidated Financial Statements.
Report of Independent Public Accountants.
Selected Quarterly Financial Data (Unaudited).
(b) Reports on Form 8-K.
Household did not file any Current Report on Form 8-K during the three
months ended December 31, 1998.
(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 June 4, 1998
(incorporated by reference to Exhibit 3(ii) of our Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998).
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).
11
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).
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. Key 1998 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, 1997).
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, 1997).
10.9 Household International, Inc. Non-Qualified Deferred
Compensation Plan for Executives, as amended.
10.10 Executive Employment Agreement between Household International,
Inc. and W.F. Aldinger.
10.11 Executive Employment Agreement between Household International,
Inc. and L.N. Bangs.
10.12 Executive Employment Agreement between Household International,
Inc. and G.D. Gilmer.
10.13 Executive Employment Agreement between Household International,
Inc. and D.A. Schoenholz.
10.14 Executive Employment Agreement between Household International,
Inc. and S.N. Mehta.
10.15 Amended and Restated Supplemental Executive Retirement Plan for
W.F. Aldinger.
10.16 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).
10.17 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
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 1998 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.
27 Financial Data Schedule.
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 30, 1999
/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 P.D. Schwartz 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.C. Clark Director
____________________________________
(R.C. Clark)
/s/ R.J. Darnall Director
____________________________________
(R.J. Darnall)
/s/ G.G. Dillon Director March 30, 1999
____________________________________
(G.G. Dillon)
/s/ J.A. Edwardson Director
____________________________________
(J.A. Edwardson)
/s/ M.J. Evans Director
____________________________________
(M.J. Evans)
/s/ D.J. Farris Director
____________________________________
(D.J. Farris)
14
Signature Title Date
--------- ----- ----
/s/ J.D. Fishburn Director
____________________________________
(J.D. Fishburn)
/s/ C.F. Freidheim, Jr. Director
____________________________________
(C.F. Freidheim, Jr.)
/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 March 30, 1999
____________________________________
(J.D. Nichols)
/s/ J.B. Pitblado Director
____________________________________
(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 Executive Vice President--
____________________________________ Chief Financial Officer
(D.A. Schoenholz) (also the principal
financial and accounting
officer)
15
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
Household International, Inc.:
We have audited in accordance with generally accepted auditing standards,
the financial statements included in Household International, Inc.'s 1998
annual report to shareholders incorporated by reference in this Form 10-K, and
have issued our report thereon dated January 20, 1999. 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
/s/ Arthur Andersen LLP
Chicago, Illinois
January 20, 1999
F-1
SCHEDULE I
HOUSEHOLD INTERNATIONAL, INC.
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF INCOME
(In millions)
Year ended December
31
--------------------
1998 1997 1996
------ ------ ------
Equity in earnings of subsidiaries........................ $546.3 $970.9 $877.1
Other income.............................................. 24.6 26.3 24.4
------ ------ ------
Total income.......................................... 570.9 997.2 901.5
------ ------ ------
Expenses:
Administrative.......................................... 49.2 59.0 99.1
Interest................................................ 45.2 37.9 28.9
------ ------ ------
Total expenses........................................ 94.4 96.9 128.0
------ ------ ------
Income before income tax benefit.......................... 476.5 900.3 773.5
Income tax benefit........................................ 47.6 40.0 46.1
------ ------ ------
Net income............................................ $524.1 $940.3 $819.6
====== ====== ======
Total comprehensive income............................ $546.7 $955.0 $698.0
====== ====== ======
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
-----------------
1998 1997
-------- --------
Assets
Cash....................................................... $ 2.1 $ 2.1
Investments in and advances to (from) subsidiaries......... 7,142.2 7,015.7
Other assets............................................... 473.7 412.9
-------- --------
Total assets............................................... $7,618.0 $7,430.7
======== ========
Liabilities and shareholders' equity
Commercial paper........................................... $ 315.6 $ 281.5
Senior debt (with original maturities over one year)....... 189.7 189.7
-------- --------
Total debt................................................. 505.3 471.2
Other liabilities.......................................... 351.9 346.0
-------- --------
Total liabilities.......................................... 857.2 817.2
Company obligated mandatorily redeemable preferred
securities of subsidiary trusts*.......................... 375.0 175.0
Preferred stock............................................ 164.4 264.5
Common shareholders' equity................................ 6,221.4 6,174.0
-------- --------
Total liabilities and shareholders' equity................. $7,618.0 $7,430.7
======== ========
- --------
*The sole assets of the three trusts are Junior Subordinated Deferrable
Interest Notes issued by Household International, Inc. in March 1998, June
1996 and June 1995, bearing interest at 7.25, 8.70 and 8.25 percent,
respectively, with principal balances of $206.2, $103.1 and $77.3 million,
respectively, and due 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
----------------------------
1998 1997 1996
-------- --------- -------
Cash provided by (used in) operations
Net income..................................... $ 524.1 $ 940.3 $ 819.6
Adjustments to reconcile net income to net cash
provided by (used in) operations:
Equity in earnings of subsidiaries........... (546.3) (970.9) (877.1)
Other operating activities................... 193.8 53.5 367.1
-------- --------- -------
Cash provided by operations...................... 171.6 22.9 309.6
-------- --------- -------
Investment in Operations
Dividends from subsidiaries.................... 1,067.3 313.1 265.0
Dividends from pooled affiliate................ 75.4 200.7 110.5
Investment in and advances to (from)
subsidiaries, net............................. (709.3) (1,047.7) (322.0)
Other investing activities..................... 1.9 2.1 (9.4)
-------- --------- -------
Cash increase (decrease) from investment in
operations...................................... 435.3 (531.8) 44.1
-------- --------- -------
Financing and Capital Transactions
Net increase (decrease) in commercial paper and
bank borrowings............................... 34.1 78.2 (83.2)
Retirement of senior debt...................... -- (100.0) (150.0)
Issuance of senior debt........................ -- 100.0 89.9
Shareholders' dividends........................ (256.5) (186.5) (163.6)
Shareholders' dividends--pooled affiliate...... (61.8) (115.5) (105.3)
Issuance of company obligated mandatorily
redeemable preferred securities of subsidiary
trusts........................................ 200.0 -- 100.0
Purchase of treasury stock..................... (412.0) (155.7) (56.7)
Treasury stock activity--pooled affiliate...... (11.4) (80.0) --
Issuance of common stock....................... 0.8 1,023.8 16.6
Redemption of preferred stock.................. (100.1) (55.0) --
-------- --------- -------
Cash increase (decrease) from financing and
capital transactions............................ (606.9) 509.3 (352.3)
-------- --------- -------
Increase in cash................................. -- 0.4 1.4
Cash at January 1................................ 2.1 1.7 0.3
-------- --------- -------
Cash at December 31.............................. $ 2.1 $ 2.1 $ 1.7
======== ========= =======
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 $75, $50 and $265
million in 1998, 1997 and 1996, respectively.
Household has guaranteed payment of all long-term debt obligations of
Household Financial Corporation Limited ("HFCL"), a Canadian subsidiary. The
amount of guaranteed debt outstanding at HFCL on December 31, 1998 and 1997
was $575 and $749 million, respectively.
Household has also guaranteed payment of all debt obligations (excluding
certain deposits) of Household International (U.K.) Limited ("HIUK"). The
amount of guaranteed debt outstanding at HIUK on December 31, 1998 and 1997
was approximately $3.1 and $1.6 billion, respectively.
F-5
EXHIBIT INDEX
Exhibit
No. 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 June 4,
1998 (incorporated by reference to Exhibit 3(ii) of our
Quarterly Report on Form 10-Q for the quarter year ended June
30, 1998.).
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).
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,
1997).
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, 1997).
10.9 Household International, Inc. Non-Qualified Deferred
Compensation Plan for Executives, as amended.
10.10 Executive Employment Agreement between Household
International, Inc. and W. F. Aldinger.
10.11 Executive Employment Agreement between Household
International, Inc. and L. N. Bangs.
10.12 Executive Employment Agreement between Household
International, Inc. and G. D. Gilmer.
Exhibit
No. Description
------- -----------
10.13 Executive Employment Agreement between Household
International, Inc. and D. A. Schoenholz.
10.14 Executive Employment Agreement between Household
International, Inc. and S. N. Mehta.
10.15 Amended and Restated Supplemental Executive Retirement Plan
for W. F. Aldinger.
10.16 Beneficial Corporation 1990 Non-qualified Stock Option Plan
(incorporated by reference to Exhibit 4.4 of Beneficial
Corporations Form S-8 filed on April 23, 1996, File No. 333-
02737).
10.17 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 1998 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.
27 Financial Data Schedule.
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.