UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
Quarterly Report pursuant to Section 13 or 15 (d) of
the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 2003
Commission file number 1-11011
THE FINOVA GROUP INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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86-0695381 |
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. employer identification no.) |
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4800
North Scottsdale Road |
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85251-7623 |
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(Address of principal executive offices) |
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(Zip code) |
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Registrant’s telephone number, including area code: 480-636-4800 |
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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 ý No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes o No ý
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by the court.
Yes ý No o
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of August 6, 2003, approximately 122,041,000 shares of Common Stock ($0.01 par value) were outstanding.
THE FINOVA GROUP INC.
TABLE OF CONTENTS
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Page No. |
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Notes to Interim Condensed Consolidated Financial Statements |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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PART I FINANCIAL INFORMATION
Item 1. Financial Statements
THE FINOVA GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
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June 30, 2003 |
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December 31, 2002 |
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(Unaudited) |
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(Audited) |
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ASSETS |
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Cash and cash equivalents |
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$ |
578,602 |
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$ |
575,215 |
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Financing Assets: |
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Loans and other financing contracts, net |
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1,999,406 |
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2,655,724 |
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Direct financing leases |
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209,709 |
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263,826 |
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Leveraged leases |
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178,050 |
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182,410 |
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Total financing assets |
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2,387,165 |
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3,101,960 |
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Reserve for credit losses |
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(359,222 |
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(540,268 |
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Net financing assets |
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2,027,943 |
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2,561,692 |
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Other Financial Assets: |
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Operating leases |
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100,499 |
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111,826 |
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Assets held for sale |
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84,946 |
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393,125 |
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Assets held for the production of income |
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33,689 |
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67,867 |
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Investments |
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16,119 |
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21,641 |
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Total other financial assets |
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235,253 |
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594,459 |
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Total Financial Assets |
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2,263,196 |
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3,156,151 |
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Other assets |
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21,895 |
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27,642 |
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$ |
2,863,693 |
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$ |
3,759,008 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Liabilities: |
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Berkadia Loan |
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$ |
1,200,000 |
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$ |
2,175,000 |
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Senior Notes - (principal amount due of $3.07 billion) |
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2,399,117 |
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2,381,643 |
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Total debt |
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3,599,117 |
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4,556,643 |
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Accounts payable and accrued expenses |
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123,671 |
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156,338 |
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Deferred income taxes, net |
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2,797 |
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16,776 |
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Total Liabilities |
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3,725,585 |
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4,729,757 |
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Stockholders’ Equity: |
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Common stock, $0.01 par value, 400,000,000 shares authorized and 125,873,000 shares issued |
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1,259 |
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1,259 |
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Additional capital |
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75,779 |
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53,233 |
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Accumulated deficit |
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(935,860 |
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(1,020,828 |
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Accumulated other comprehensive loss |
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(2,534 |
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(3,877 |
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Common stock in treasury, 3,832,000 shares |
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(536 |
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(536 |
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Total Stockholders’ Equity |
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(861,892 |
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(970,749 |
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$ |
2,863,693 |
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$ |
3,759,008 |
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See notes to interim condensed consolidated financial statements.
1
THE FINOVA GROUP INC.
CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS
(Dollars in thousands, except per share data)
(Unaudited)
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Three Months |
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Three Months |
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Six Months |
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Six Months |
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Revenues: |
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Interest income |
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$ |
49,949 |
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$ |
62,586 |
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$ |
99,390 |
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$ |
143,423 |
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Rental income |
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8,331 |
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11,037 |
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16,324 |
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21,173 |
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Operating lease income |
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12,398 |
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10,957 |
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24,501 |
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23,159 |
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Fees and other income |
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8,667 |
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10,942 |
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19,841 |
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25,284 |
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Total Revenues |
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79,345 |
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95,522 |
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160,056 |
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213,039 |
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Interest expense |
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(80,389 |
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(103,782 |
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(164,083 |
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(216,072 |
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Operating lease and other depreciation |
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(7,664 |
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(10,704 |
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(15,838 |
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(20,769 |
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Interest Margin |
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(8,708 |
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(18,964 |
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(19,865 |
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(23,802 |
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Other Revenues and (Expenses): |
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Provision for credit losses |
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69,574 |
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128,834 |
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123,573 |
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154,018 |
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Net gain (loss) on financial assets |
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35,514 |
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