FINOVA Capital Corporation Announces Net Loss for 2000 (Subject to Final Audit)

Apr 02, 2001, 01:00 ET from FINOVA Capital Corporation

    SCOTTSDALE, Ariz., April 2 /PRNewswire/ -- FINOVA Capital Corporation
 ("FINOVA Capital"), the principal operating subsidiary of The FINOVA Group
 Inc. ("FINOVA") today announced a net loss of $936.0 million for the year
 ended Dec. 31, 2000, compared to net income of $219.0 million in 1999.  The
 results included a net loss from continuing operations of $542.9 million in
 2000 compared to net income of $222.0 million in 1999, and a net loss from
 discontinued operations in 2000 of $393.1 million compared to a net loss of
 $3.0 million in 1999.
     For the quarter ended Dec. 31, 2000, FINOVA Capital announced a net loss
 of $718.2 million compared to net income of $57.6 million in the fourth
 quarter of 1999.  The net loss for the fourth quarter of 2000 from continuing
 operations was $578.0 million compared to net income of $59.6 million in the
 fourth quarter of 1999, and the net loss from discontinued operations for the
 fourth quarter of 2000 was $140.1 million compared to a net loss of
 $2.1 million in the fourth quarter of 1999.
     In 2000, FINOVA Capital experienced a significant deterioration in the
 credit quality of its portfolio caused in part by a softening U.S. economy and
 certain industry specific economic weaknesses affecting many of its customers
 in those industries.  Additionally, with the loss of its investment grade
 credit ratings and limited access to capital, FINOVA Capital's cost of funds
 increased significantly during the course of the year.  The impact of these
 events and current economic conditions resulted in increased levels of problem
 accounts and higher cost of funds (resulting in lower interest margins),
 higher reserve requirements, higher write-offs, losses on investments and
 disposal of assets, impairment of intangible assets, reduced tax benefits and
 the decision to exit certain businesses.
 
     Other Matters
     On Feb. 26, 2001, FINOVA and FINOVA Capital entered into a commitment with
 Berkshire Hathaway Inc., Leucadia National Corporation and Berkadia, LLC, an
 entity jointly owned by Berkshire Hathaway and Leucadia pursuant to which
 Berkadia would lend $6 billion on a senior secured basis to FINOVA Capital, to
 facilitate a Chapter 11 restructuring of its outstanding debt.  On Mar. 7,
 2001, FINOVA, FINOVA Capital and seven of their subsidiaries filed for
 protection under Chapter 11 of the United States Bankruptcy Code.  On the
 first day of these proceedings, the bankruptcy court granted various orders
 authorizing FINOVA Capital to continue operating in the ordinary course of
 business, including funding commitments to its customers.  As of the filing
 date, FINOVA Capital had over $1 billion of cash on hand.
     Due to delays caused by the bankruptcy process and other events, FINOVA
 Capital has filed for an automatic 15-day extension to file its annual report
 on Form 10-K with the Securities and Exchange Commission. FINOVA Capital
 expects to file the 10-K on or before Apr. 16, 2001.
 
     FINOVA Capital Corporation is a financial services company focused on
 providing a broad range of capital solutions primarily to midsize business.
 FINOVA Capital is headquartered in Scottsdale, Ariz. with business offices
 throughout the U.S. and in London, U.K., and Toronto, Canada.  For more
 information, visit the company's website at www.finova.com.
 
     This news release contains forward-looking statements such as estimates of
 gains or losses, as well as other predictions or forecasts.  FINOVA assumes no
 obligation to update those statements to reflect actual results, changes in
 assumptions or other factors.  The forward-looking statements are subject to
 known and unknown risks, uncertainties and other factors that could cause
 actual results to differ materially from those projected. Those factors
 include FINOVA's ability to address its financing requirements in light of its
 existing debt obligations and market conditions; pending and potential
 litigation related to charges to earnings; the results of efforts to implement
 business strategy, including the ability to successfully conclude its
 reorganization proceedings and the pending transaction with Berkadia, LLC; the
 ability to attract and retain key personnel and customers; conditions that
 adversely impact FINOVA's borrowers and their ability to meet their
 obligations to FINOVA; actual results in connection with continuing or
 discontinued operations and the disposition of assets; the adequacy of
 FINOVA's loan loss reserves and other risks detailed in FINOVA Capital's SEC
 reports, including page 15 of FINOVA Capital's 10-K for 1999.
 
 
                           FINOVA Capital Corporation
                         And Consolidated Subsidiaries
                            Selected Financial Data
                            (Subject to Final Audit)
                             (Dollars in Thousands)
 
 
                                 Quarter Ended         Twelve Months Ended
                                    Dec. 31,                 Dec. 31,
                               2000         1999         2000         1999
 
     OPERATIONS:
 
     Interest margins earned   $81,936    $130,154     $453,565     $473,187
     Provision for credit
      losses                  (501,653)    (10,207)    (643,000)     (22,390)
     (Losses) gains on
      investments and
      disposal of assets      (113,040)     22,009     (168,589)      67,886
     Operating expenses       (277,184)    (47,474)    (399,412)    (168,697)
     (Loss) income from
      continuing operations   (578,011)     59,621     (542,927)     222,023
     Net (loss) income        (718,156)     57,564     (936,035)     219,096
 
 
                                                           As of Dec. 31,
                                                         2000        1999
     FINANCIAL POSITION:
 
     Managed assets                                 $10,537,875  $10,443,136
     Nonaccruing assets                                 921,351      174,993
     Reserve for credit losses                          578,750      178,266
     Net assets of discontinued operations            1,162,223    2,702,236
     Total assets                                    12,023,884   13,879,109
     Total debt                                      10,997,687   11,407,767
     Shareowner's equity                                743,763    1,748,201
 
 
 

SOURCE FINOVA Capital Corporation
    SCOTTSDALE, Ariz., April 2 /PRNewswire/ -- FINOVA Capital Corporation
 ("FINOVA Capital"), the principal operating subsidiary of The FINOVA Group
 Inc. ("FINOVA") today announced a net loss of $936.0 million for the year
 ended Dec. 31, 2000, compared to net income of $219.0 million in 1999.  The
 results included a net loss from continuing operations of $542.9 million in
 2000 compared to net income of $222.0 million in 1999, and a net loss from
 discontinued operations in 2000 of $393.1 million compared to a net loss of
 $3.0 million in 1999.
     For the quarter ended Dec. 31, 2000, FINOVA Capital announced a net loss
 of $718.2 million compared to net income of $57.6 million in the fourth
 quarter of 1999.  The net loss for the fourth quarter of 2000 from continuing
 operations was $578.0 million compared to net income of $59.6 million in the
 fourth quarter of 1999, and the net loss from discontinued operations for the
 fourth quarter of 2000 was $140.1 million compared to a net loss of
 $2.1 million in the fourth quarter of 1999.
     In 2000, FINOVA Capital experienced a significant deterioration in the
 credit quality of its portfolio caused in part by a softening U.S. economy and
 certain industry specific economic weaknesses affecting many of its customers
 in those industries.  Additionally, with the loss of its investment grade
 credit ratings and limited access to capital, FINOVA Capital's cost of funds
 increased significantly during the course of the year.  The impact of these
 events and current economic conditions resulted in increased levels of problem
 accounts and higher cost of funds (resulting in lower interest margins),
 higher reserve requirements, higher write-offs, losses on investments and
 disposal of assets, impairment of intangible assets, reduced tax benefits and
 the decision to exit certain businesses.
 
     Other Matters
     On Feb. 26, 2001, FINOVA and FINOVA Capital entered into a commitment with
 Berkshire Hathaway Inc., Leucadia National Corporation and Berkadia, LLC, an
 entity jointly owned by Berkshire Hathaway and Leucadia pursuant to which
 Berkadia would lend $6 billion on a senior secured basis to FINOVA Capital, to
 facilitate a Chapter 11 restructuring of its outstanding debt.  On Mar. 7,
 2001, FINOVA, FINOVA Capital and seven of their subsidiaries filed for
 protection under Chapter 11 of the United States Bankruptcy Code.  On the
 first day of these proceedings, the bankruptcy court granted various orders
 authorizing FINOVA Capital to continue operating in the ordinary course of
 business, including funding commitments to its customers.  As of the filing
 date, FINOVA Capital had over $1 billion of cash on hand.
     Due to delays caused by the bankruptcy process and other events, FINOVA
 Capital has filed for an automatic 15-day extension to file its annual report
 on Form 10-K with the Securities and Exchange Commission. FINOVA Capital
 expects to file the 10-K on or before Apr. 16, 2001.
 
     FINOVA Capital Corporation is a financial services company focused on
 providing a broad range of capital solutions primarily to midsize business.
 FINOVA Capital is headquartered in Scottsdale, Ariz. with business offices
 throughout the U.S. and in London, U.K., and Toronto, Canada.  For more
 information, visit the company's website at www.finova.com.
 
     This news release contains forward-looking statements such as estimates of
 gains or losses, as well as other predictions or forecasts.  FINOVA assumes no
 obligation to update those statements to reflect actual results, changes in
 assumptions or other factors.  The forward-looking statements are subject to
 known and unknown risks, uncertainties and other factors that could cause
 actual results to differ materially from those projected. Those factors
 include FINOVA's ability to address its financing requirements in light of its
 existing debt obligations and market conditions; pending and potential
 litigation related to charges to earnings; the results of efforts to implement
 business strategy, including the ability to successfully conclude its
 reorganization proceedings and the pending transaction with Berkadia, LLC; the
 ability to attract and retain key personnel and customers; conditions that
 adversely impact FINOVA's borrowers and their ability to meet their
 obligations to FINOVA; actual results in connection with continuing or
 discontinued operations and the disposition of assets; the adequacy of
 FINOVA's loan loss reserves and other risks detailed in FINOVA Capital's SEC
 reports, including page 15 of FINOVA Capital's 10-K for 1999.
 
 
                           FINOVA Capital Corporation
                         And Consolidated Subsidiaries
                            Selected Financial Data
                            (Subject to Final Audit)
                             (Dollars in Thousands)
 
 
                                 Quarter Ended         Twelve Months Ended
                                    Dec. 31,                 Dec. 31,
                               2000         1999         2000         1999
 
     OPERATIONS:
 
     Interest margins earned   $81,936    $130,154     $453,565     $473,187
     Provision for credit
      losses                  (501,653)    (10,207)    (643,000)     (22,390)
     (Losses) gains on
      investments and
      disposal of assets      (113,040)     22,009     (168,589)      67,886
     Operating expenses       (277,184)    (47,474)    (399,412)    (168,697)
     (Loss) income from
      continuing operations   (578,011)     59,621     (542,927)     222,023
     Net (loss) income        (718,156)     57,564     (936,035)     219,096
 
 
                                                           As of Dec. 31,
                                                         2000        1999
     FINANCIAL POSITION:
 
     Managed assets                                 $10,537,875  $10,443,136
     Nonaccruing assets                                 921,351      174,993
     Reserve for credit losses                          578,750      178,266
     Net assets of discontinued operations            1,162,223    2,702,236
     Total assets                                    12,023,884   13,879,109
     Total debt                                      10,997,687   11,407,767
     Shareowner's equity                                743,763    1,748,201
 
 
 SOURCE  FINOVA Capital Corporation