UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
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[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
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 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM _____ TO _____
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COMMISSION FILE NUMBER 0-19564
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FGIC SECURITIES PURCHASE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 13-3633082
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
115 BROADWAY, NEW YORK, NEW YORK 10006 (212) 312-3000
(Address of principal executive offices) (Zip Code) (Registrant's telephone
number, including area code)
------------------
SECURITIES REGISTERED PURSUANT
TO SECTION 12(b) OF THE ACT:
None.
SECURITIES REGISTERED PURSUANT
TO SECTION 12(g) OF THE ACT:
TITLE OF EACH CLASS
-------------------
COMMON STOCK, PAR VALUE $10.00 PER SHARE
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 ____
AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NONAFFILIATES OF THE
REGISTRANT AT _________, 2001. NONE.
AT MARCH 23, 2001, 10 SHARES OF COMMON STOCK WITH A PAR VALUE OF $10.00 PER
SHARE WERE OUTSTANDING.
DOCUMENTS INCORPORATED BY REFERENCE
NONE.
REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION J(1)(a) AND (b)
OF FORM 10-K AND IS THEREFORE FILING THIS FORM 10-K WITH THE REDUCED DISCLOSURE
FORMAT.
TABLE OF CONTENTS
Page
PART I
Item 1. Business 1
Item 2 Properties 1
Item 3. Legal Proceedings 1
Item 4. Submission of Matters to a Vote of Security Holders 1
PART II
Item 5. Market for the Registrant's Common Equity and
Related Stockholder Matters 2
Item 6. Selected Financial Data 2
Item 7. Management's Discussion and Analysis of Results
of Operations 2
Item 8. Financial Statements and Supplementary Data 5
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 14
PART III
Item 10. Directors and Executive Officers of the Registrant 14
Item 11. Executive Compensation 14
Item 12. Security Ownership of Certain Beneficial Owners and
Management 14
Item 13. Certain Relationships and Related Transactions 14
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K 14
Signatures 15
PART I
ITEM 1. Business.
FGIC Securities Purchase, Inc. ("FGIC-SPI" or "the Company") was
incorporated in 1990 in the State of Delaware. As of December 31,
2000, all outstanding capital stock of FGIC-SPI was owned by FGIC
Holdings, Inc., a Delaware corporation, a wholly-owned subsidiary
of General Electric Capital Corporation ("GE Capital"), a New
York corporation, the ultimate parent of which is General
Electric Company.
The business of FGIC-SPI consists of providing liquidity for
certain floating rate municipal securities through a "liquidity
facility". These floating rate municipal securities are typically
remarketed by registered broker-dealers at par on a periodic
basis to establish the applicable interest rate for the next
interest period and to provide a secondary market liquidity
mechanism for security holders desiring to sell their securities.
In the event that such securities cannot be remarketed, FGIC-SPI,
pursuant to a standby purchase agreement with the issuer of the
securities, will be obligated to purchase unremarketed
securities, at par, from the holders thereof who desire to
remarket their securities. In order to obtain funds to purchase
the securities, FGIC-SPI has entered into standby loan
agreements, with GE Capital, under which GE Capital will be
irrevocably obligated to lend funds as needed for FGIC-SPI to
purchase the securities.
ITEM 2. Properties.
FGIC-SPI conducts its business from the facilities of Financial
Guaranty Insurance Company, a wholly-owned subsidiary of FGIC
Corporation. FGIC Holdings, Inc. is the majority owner of FGIC
Corporation.
ITEM 3. Legal Proceedings.
FGIC-SPI is not involved in any pending legal proceedings.
ITEM 4. Submission of Matters to a Vote of Security Holders.
Omitted.
Page 1
PART II
ITEM 5. Market for the Registrant's Common Equity and Related Stockholder
Matters.
As of December 31, 1992, all of FGIC-SPI's common stock, its sole
class of common equity, was owned by FGIC Corporation. In January
1993, the common stock of FGIC-SPI was dividended to GE Capital.
GE Capital, in turn, made a capital contribution of the common
stock of FGIC-SPI to FGIC Holdings, Inc., which now owns 100% of
the common stock of FGIC-SPI. FGIC Holdings is the majority owner
of FGIC Corporation. Accordingly, there is no public trading
market for FGIC-SPI's common stock.
ITEM 6. Selected Financial Data.
Omitted.
ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
RESULTS OF OPERATIONS
FGIC-SPI commenced operations in March 1992. Fees are paid
up-front and in installments. Up-front fees are earned on a
straight-line basis over the life of the liquidity commitment,
and installment fees are earned straight-line over the
installment period.
For the years ended December 31, 2000 and 1999, fees earned
totaled $6,481,313 and $6,343,961, respectively. The increase in
earnings is due to the increase in the number of outstanding
contracts to 54 as of December 31, 2000, from 46 as of December
31, 1999. FGIC-SPI also incurred $565,739 and $715,656 in
expenses for the years ended December 31, 2000 and 1999,
respectively. Included in expenses were commitment fees owed to
GE Capital of $177,048 in 2000 and $159,489 in 1999. The increase
is due to the increase in the number of outstanding contracts.
The remainder of expenses represents general and administrative
expenses which declined because of a decrease in intercompany
overhead expense allocations. The effective Federal tax rate
during 2000 and 1999 was equal to the Federal Corporate tax rate
of 35% giving consideration to the benefit for the deduction of
state taxes at 7%. Overall net income increased as a result of
the fluctuations noted above.
Page 2
For the years end December 31, 1999 and 1998, fees earned totaled
$6,343,961 and $7,165,522, respectively. The decrease in earnings
is primarily due to a reduction in the liquidity facility
utilized during 1999 and due to the renewal of existing deals at
lower basis points. FGIC-SPI also incurred $715,656 and $602,052
in expenses for the years ended December 31, 1999 and 1998,
respectively. Included in expenses were commitment fees owed to
GE Capital of $159,489 in 1999 and $161,342 in 1998. The decrease
is due to the decrease in the number of outstanding contracts.
The remainder of expenses represents general and administrative
expenses which increased because of an increase in intercompany
overhead expense allocations. The effective Federal tax rate
during 1999 and 1998 was equal to the Federal Corporate tax rate
of 35% giving consideration to the benefit for the deduction of
state taxes at 7%. Overall net income increased as a result of
the fluctuations noted above.
During 2000, eight deals closed totaling $592.7 million of
liquidity facility. During 1999, one deal closed totaling $38.6
million of liquidity facility. During 1998, three deals closed
totaling $298.6 million of liquidity facility.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity is a measure of the ability to generate sufficient cash
to meet cash obligations as they come due. FGIC-SPI's primary
source of cash is from liquidity fees and investment income. Cash
outflows primarily relate to general and administrative expenses,
GE Capital commitment fees, and income taxes. To date FGIC-SPI
has not been required to purchase securities (fund a cash
outflow) under the liquidity facilities issued. Should FGIC-SPI
be required to fund such an outflow, the Company can readily
access the cash balances held by GE Capital ($32.8 million at
December 31,2000) and draw upon the standby loan agreement ($6
billion at December 31, 2000) in the amount of the purchase price
of the tendered bonds.
Net cash provided by (used in) operating activities was
($132,383), $6,098, and $8,895 for the years ended December 31,
2000, 1999 and 1998, respectively. There were no cash flows
related to investing and financing activities for the years ended
December 31, 2000, 1999 and 1998.
ITEM 8. Financial Statements and Supplementary Data.
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholder
FGIC Securities Purchase, Inc.
We have audited the accompanying balance sheets of FGIC Securities Purchase,
Inc. as of December 31, 2000 and 1999, and the related statements of income,
changes in stockholder's equity and cash flows for each of the years in the
three-year period ended December 31, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly in all
material respects, the financial position of FGIC Securities Purchase, Inc. as
of December 31, 2000 and 1999, and the results of its operations and its cash
flows for each of the years in the three-year period ended December 31, 2000, in
conformity with accounting principles generally accepted in the United States of
America.
KPMG LLP
/s/ [KPMG LLP]
- ---------------
[KPMG LLP]
January 21, 2001
New York, New York
Page 3
FGIC SECURITIES PURCHASE, INC.
BALANCE SHEETS
ASSETS DECEMBER 31, DECEMBER 31,
2000 1999
----------------- ----------------
Short-term investments $ - $ 132,383
Liquidity fees receivable 889,680 728,904
Due from GE Capital 32,837,628 25,253,791
Other assets 399,609 339,990
------------- --------------
Total assets $34,126,917 $26,455,068
=========== ===========
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Deferred liquidity fee income $ 544,656 $ 251,324
Due to affiliates 7,786,456 40,000
Commitment fees payable to GE Capital 497,879 320,831
Accounts payable and accrued expenses 319,407 326,759
Deferred tax liability - 1,111
Taxes payable 541,859 4,655,157
------------ -----------
Total liabilities 9,690,257 5,595,182
----------- -----------
Stockholder's Equity:
Common stock, par value $10.00 per share;
10 shares authorized, issued and outstanding 100 100
Additional paid-in capital 822,145 822,145
Retained earnings 23,614,415 20,037,641
------------ ------------
Total stockholder's equity 24,436,660 20,859,886
------------ ------------
Total liabilities and stockholder's equity $34,126,917 $26,455,068
=========== ===========
See accompanying notes to financial statements.
Page 4
FGIC SECURITIES PURCHASE, INC.
STATEMENTS OF INCOME
FOR THE YEAR ENDED
DECEMBER 31,
2000 1999 1998
---- ---- ----
Liquidity fee income $6,481,313 $6,343,961 $7,165,522
Investment income 1,339 6,098 8,895
------------- ------------ ------------
Total revenues 6,482,652 6,350,059 7,174,417
General and administrative expenses 388,691 556,167 440,710
GE Capital commitment fees 177,048 159,489 161,342
---------- ---------- ----------
Total expenses 565,739 715,656 602,052
---------- ---------- ----------
Income before provision for
income taxes 5,916,913 5,634,403 6,572,365
Income tax expense (benefit):
Federal
Current 1,927,066 1,623,266 2,127,803
Deferred (1,111) 210,732 -
State and local 414,184 394,408 492,927
----------- ----------- -----------
Total income tax expense 2,340,139 2,228,406 2,620,730
---------- ---------- ----------
Net income $3,576,774 $3,405,997 $3,951,635
========== ========== ==========
See accompanying notes to financial statements.
Page 5
FGIC SECURITIES PURCHASE, INC.
STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
ADDITIONAL
COMMON PAID-IN RETAINED
STOCK CAPITAL EARNINGS TOTAL
------ ---------- -------- -----
Balance, January 1, 1998 $100 $ - $12,680,009 $12,680,109
Net Income - - 3,951,635 3,951,635
Capital contribution - 822,145 - 822,145
-------- ---------- ------------ -------------
Balance December 31, 1998 100 822,145 16,631,644 17,453,889
Net Income - - 3,405,997 3,405,997
-------- ---------- ------------ -------------
Balance, December 31, 1999 100 822,145 20,037,641 20,859,886
Net Income - - 3,576,774 3,576,774
-------- ---------- ------------ -------------
Balance, December 31, 2000 $100 $822,145 $23,614,415 $24,436,660
======== ========== ============ =============
See accompanying notes to financial statements.
Page 6
FGIC SECURITIES PURCHASE, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED
DECEMBER 31,
2000 1999 1998
---- ---- ----
OPERATING ACTIVITIES:
Net income $3,576,774 $3,405,997 $ 3,951,635
Adjustments to reconcile net
income to net cash
provided by operating activities:
Change in deferred tax payable (1,111) - -
Change in taxes payable (4,113,298) 521,460 (2,026,506)
Change in due from GE Capital (7,583,837) (4,658,038) (2,186,824)
Change in due to affiliates 7,746,456 40,000 (140,980)
Change in liquidity fees
receivable (160,776) 388,316 161,166
Change in deferred tax asset - 210,732 (172,524)
Change in deferred liquidity
fee income 293,332 (54,976) 95,122
Change in other assets (59,619) 13,119 102,965
Change in accounts payable and
accrued expenses (7,352) (20,001) 63,501
Change in commitment fees
payable to GE Capital 177,048 159,489 161,340
------- ------- -------
Cash provided by (used in)
operating activities (132,383) 6,098 8,895
--------- -------- --------
Net change in cash and cash
equivalents (132,383) 6,098 8,895
Cash and cash equivalents at
beginning of period 132,383 126,285 117,390
--------- --------- ---------
Cash and cash equivalents at
end of period $ - $132,383 $126,285
========== ======== ========
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Waived commitment fees payable to
GE Capital $ - $ - $822,145
========== ======== ========
See accompanying notes to financial statements.
Page 7
FGIC SECURITIES PURCHASE, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
(1) BUSINESS
--------
FGIC Securities Purchase, Inc. ("FGIC-SPI") is a wholly-owned
subsidiary of FGIC Holdings, Inc. (the "Parent") which, in turn, is
wholly-owned by General Electric Capital Corporation ("GE Capital").
FGIC-SPI was capitalized on September 24, 1991. FGIC-SPI was formed to
provide liquidity for certain floating rate municipal securities
whereby FGIC-SPI will, under certain circumstances, purchase such
securities at par in the event they are tendered by the holders thereof
as permitted under the terms of the respective bond indentures. As of
December 31, 2000, FGIC-SPI had approximately $2.9 billion par and
interest of potential obligations under such arrangements. In order to
obtain funds, in the event such purchases are necessary, FGIC-SPI has
entered into standby loan agreements, with GE Capital, under which GE
Capital will be irrevocably obligated to lend funds as needed for
FGIC-SPI to purchase the securities.
(2) SIGNIFICANT ACCOUNTING POLICIES
-------------------------------
The accompanying financial statements have been prepared on the basis
of accounting principles generally accepted in the United States of
America. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Significant accounting policies are as follows:
REVENUE RECOGNITION
Fees are paid up-front and in installments. Up-front fees are earned on
a straight-line basis over the life of the liquidity commitment,
usually five years, and installment fees are earned straight-line over
the installment period.
CASH AND CASH EQUIVALENTS
Cash equivalents are carried at cost, which approximates fair value.
For purposes of the statement of cash flows, FGIC-SPI considers all
highly liquid investments with original maturities of three months or
less to be cash equivalents.
FAIR VALUES OF FINANCIAL INSTRUMENTS
The carrying amounts of FGIC-SPI's financial instruments, relating
primarily to short-term investments, liquidity fees receivable, due
from GE Capital, other assets, deferred liquidity fee income, due to
affiliates, commitment fees payable to GE Capital, accounts payable and
accrued expenses and taxes payable, approximate their fair values.
SEC REGISTRATION FEES
SEC registrations fees are reimbursable to FGIC-SPI, as a separate item
at the closing, by issuers as transactions are consummated. Such fees
are deferred and included in other assets when paid and netted against
the related reimbursement as transactions are consummated. Management
evaluates the recoverability of such deferred fees at each reporting
date.
Page 8
EXPENSES
Direct expenses incurred by the Parent are fully allocated to FGIC-SPI
on a specific identification basis. Employee related expenses are
allocated by affiliates to FGIC-SPI based on the percentage of time
such employees devote to the activities of FGIC-SPI. For the years
ended December 31, 2000, 1999, and 1998 expenses of $420,044, $556,167,
and $437,210, respectively, were allocated to FGIC-SPI. Management
believes that such allocation method is reasonable. Management believes
that such expenses, as reported in the statement of income, would not
differ materially from what expenses would have been on a stand-alone
basis.
RESERVE FOR LOSSES
It is management's policy to establish a reserve for losses based upon
its estimate of the ultimate aggregate losses relative to its
obligations under the liquidity facility arrangements written. At
December 31, 2000, management does not anticipate any losses relative
to such arrangements.
INCOME TAXES
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases, on a stand alone basis. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets
and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
OTHER COMPREHENSIVE INCOME
There are no elements of other comprehensive income.
NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities."
The requirements for SFAS No. 133 were delayed by SFAS No. 137,
"Deferral of the Effective Date of FASB Statement No. 133," and are now
effective for financial statements for periods beginning after June 15,
2000. SFAS No. 133 establishes standards for accounting and reporting
for derivative instruments and for hedging activities. It requires that
an entity recognize all derivatives as either assets or liabilities in
the balance sheet and measure those instruments at fair value. The
Company has evaluated the impact of SFAS No. 133 but does not expect it
to result in an impact on the Company's financial results.
Page 9
(3) INCOME TAXES
------------
Under an intercompany tax-sharing agreement with its parent, FGIC-SPI
is included in the consolidated Federal income tax returns filed by GE
Capital. FGIC-SPI provides for taxes as if it filed a separate tax
return.
FGIC-SPI's effective Federal tax rate differs from the corporate tax
rate on ordinary income of 35 percent in 2000, 1999 and 1998. The
differences between the statutory Federal tax rate and expense computed
by applying the statutory tax rate to earnings before income taxes are
as follows:
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
2000 1999 1998
------------- -------------- -------------
Computed Statutory
tax provision $2,070,920 $1,972,041 $2,300,328
Benefit of deduction
for state and local
income taxes (144,965) (138,043) (172,525)
------------- -------------- -------------
Federal income taxes 1,925,955 1,833,998 2,127,803
State and local
income taxes, net
of Federal income
tax benefit 414,184 394,408 492,927
------------- ------------ ------------
Income tax expense $2,340,139 $2,228,406 $2,620,730
============= ============== =============
The tax effects of temporary differences that give rise to significant
portions of deferred tax assets and deferred tax liabilities at
December 31, 2000 and 1999 are as follows:
2000 1999
---- ----
Deferred tax liabilities - other $ - $ 1,111
========== ========
For the years ended December 31, 2000, 1999, and 1998, Federal and
state income taxes paid or settled through intercompany accounts
totaled $6,454,548, $1,496,215 and $4,819,761, respectively.
(4) RELATED PARTY TRANSACTIONS
--------------------------
All municipal securities for which FGIC-SPI provides liquidity are
insured by Financial Guaranty Insurance Company, a subsidiary of the
Parent.
As part of a standby loan agreement with GE Capital (see Note 6),
FGIC-SPI has incurred commitment fees for the years ended December 31,
2000, 1999 and 1998 of $177,048, $159,489, and $161,342, respectively.
Page 10
At December 31, 2000 and 1999, $32,837,628 and $25,253,791,
respectively, of the amount classified as due from GE Capital relates
to cash balances held by GE Capital. FGIC-SPI has access to these funds
on an as needed basis.
All amounts due from affiliates and due to affiliates are non-interest
bearing.
See Note 2 for description of expenses allocated by the Parent.
(5) OFF-BALANCE-SHEET RISK
----------------------
FGIC-SPI provides liquidity for certain floating rate municipal
securities whereby FGIC-SPI will, under certain circumstances, purchase
such securities at par in the event they are tendered by the holders
thereof as permitted under the terms of the respective bond indentures.
The geographical distribution of the underlying par value supported by
the thirty five liquidity facilities outstanding at December 31, 2000
was as follows (dollars in millions):
New York $1,235.2
Pennsylvania 356.1
California 379.8
Connecticut 178.4
Massachusetts 488.6
Florida 130.7
Ohio 114.2
Texas 19.9
Louisiana 27.4
Michigan 8.0
--------
Total $2,938.3
========
The maturity distribution of the underlying par value supported by the
thirty five liquidity facilities outstanding at December 31, 2000 was
as follows (dollars in millions):
Less than one year $ 309.1
One to two years 1,119.0
Two to three years 690.4
Three to four years 227.1
Four to five years 592.7
Over five years -
-------
Total $2,938.3
========
The liquidity agreements are for a term of approximately five years
(subject to renewal) or earlier if the bonds are no longer outstanding.
As of December 31, 2000, the fair value of the uncollected balances on
outstanding facilities was $14.0 million. The fair value was calculated
based upon current expected cash inflows, assuming current outstanding
facilities at current fee rates, discounted at the risk free rate of
5.32%.
FGIC-SPI is exposed to credit risk that the issuer defaults on the
underlying municipal security at a time that FGIC-SPI is holding
securities purchased pursuant to a liquidity facility and the financial
guarantor (Financial Guaranty Insurance Company) fails to perform on
its insurance contract. It is the accounting policy of FGIC-SPI to
evaluate the likelihood of any credit loss at each reporting period and
to establish reserves for credit losses when deemed appropriate.
Management believes that no such reserves were required at December 31,
2000 and 1999.
Page 11
FGIC-SPI is exposed to market risk in the event that FGIC-SPI is
required to purchase municipal securities at their par amount at a time
when such par value is in excess of the securities' fair value. It is
the accounting policy of FGIC-SPI to evaluate the likelihood of it
being called upon to purchase securities under its liquidity
arrangements at amounts greater than their fair value at each reporting
period and to establish valuation reserves when deemed appropriate.
Management believes that no such valuation reserves were required at
December 31, 2000 and 1999.
(6) STANDBY LOAN AGREEMENTS
-----------------------
FGIC-SPI secured the right to obtain funds for the purchase of tendered
bonds by entering into standby loan agreements with GE Capital who will
lend funds to FGIC-SPI in amounts not exceeding the purchase price of
the tendered bonds. Such agreements totaled $6.0 billion at December
31, 2000.
In consideration of the commitment of GE Capital to make loans to
FGIC-SPI, FGIC-SPI agrees to pay GE Capital a fee equal to 0.625 basis
points on the outstanding facility. The fee is payable on dates
mutually agreed to by FGIC-SPI and GE Capital.
(7) QUARTERLY DATA (UNAUDITED)
--------------------------
Selected quarterly financial data was as follows:
2000
-----------------------------------------------------------------------
4th 3rd 2nd 1st
-----------------------------------------------------------------------
Total revenues $ 1,612,111 $ 1,609,498 $ 1,648,396 $ 1,612,647
Total expenses 241,292 138,287 2,370 183,790
-----------------------------------------------------------------------
Income before provision
for income taxes 1,370,819 1,471,211 1,646,026 1,428,857
Income tax expense 542,159 581,864 651,003 565,113
-----------------------------------------------------------------------
Net income $ 828,660 $ 889,347 $ 995,023 $ 863,744
=======================================================================
1999
----------------------------------------------------------------------
4th 3rd 2nd 1st
----------------------------------------------------------------------
Total revenues $ 1,534,540 $ 1,551,960 $ 1,626,687 $1,636,872
Total expenses 175,036 174,702 177,964 187,954
----------------------------------------------------------------------
Income before provision
for income taxes 1,359,504 1,377,258 1,448,723
1,448,918
----------------------------------------------------------------------
Income tax expense 537,682 544,706 572,971 573,047
----------------------------------------------------------------------
Net income $ 821,822 $ 832,552 $ 875,752 $ 875,871
======================================================================
Page 12
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
NONE
PART III
ITEM 10. Directors and Executive Officers of the Registrant.
Omitted.
ITEM 11. Executive Compensation.
Omitted.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management.
Omitted.
ITEM 13. Certain Relationships and Related Transactions.
Omitted.
PART IV
ITEM 14. Exhibits and Financial Statement Schedules.
(a) Financial Statements
Included in Part II of this report:
Report of Independent Auditors
Balance Sheets as of December 31, 2000 and 1999
Statements of Income for the years ended
December 31, 2000, 1999 and 1998.
Statements of Changes in Stockholder's Equity for the years
ended December 31, 2000, 1999 and 1998
Statements of Cash Flows for the years ended December 31,
2000, 1999 and 1998.
Notes to Financial Statements
All Schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission
are not required under the related instructions or are
inapplicable and, therefore, have been omitted.
(b) Exhibit Index
Exhibit
- -------
1.1 --Certificate of Incorporation of FGIC-SPI
(Incorporated by reference to Exhibit 1.1 of
FGIC-SPI's December 31, 1991 Form 10K)
1.2 -- By-Laws of FGIC-SPI
(Incorporated by reference to Exhibit 1.2 of
FGIC-SPI's December 31, 1991 Form 10K)
1.3 -- Consents of Independent Auditors
Page 13
Pursuant to the requirements of the Securities Act of 1934, this report has been
signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/Deborah M. Reif President (principal March 23, 2001
- ---------------------------------- --------------
Deborah M.Reif executive officer),
Director
/s/Rick J. Filippell Treasurer, Director March 23, 2001
- ---------------------------------- --------------
Rick J. Filippelli
/s/Amedeo Edward Turi, III Director March 23, 2001
- ---------------------------------- --------------
Amedeo Edward Turi, III
Page 14
Pursuant to the requirements of the Securities Act of 1934, this report has been
signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
President (principal
- ---------------------------------- --------------
Deborah M.Reif executive officer),
Director
Treasurer, Director
- ---------------------------------- --------------
Rick J. Filippelli
Director
- ---------------------------------- --------------
Amedeo Edward Turi, III
Page 15
Consent of Independent Auditors
The Board of Directors and Stockholder
FGIC Securities Purchase, Inc.
We consent to incorporation by reference in the registration statements (No.
333-43729 and No. 333-47446) on Form S-3 of FGIC Securities Purchase, Inc. of
our report dated January 21, 2001, relating to the balance sheets of FGIC
Securities Purchase, Inc. as of December 31, 2000 and 1999, and the related
statements of income, changes in stockholder's equity, and cash flows for each
of the years in the three-year period ended December 31, 2000, which report
appears in the December 31, 2000 annual report on Form 10-K of FGIC Securities
Purchase, Inc.
KPMG LLP
/s/ [KPMG LLP]
- -------------------------------
[KPMG LLP]
New York, New York
March 27, 2001
Exhibit 1.3