|SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


FORM 10-Q


[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
EXCHANGE ACT OF 1934


For the Quarterly Period Ended June 30, 2002


Commission File Number 1-6798


TRANSAMERICA FINANCE CORPORATION(Exact name of registrant
as specified in its charter)
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Delaware                        | 95-1077235         
|------------------------------- | -------------------
|(State or other jurisdiction of | (I.R.S. Employer   
|incorporation or organization)  | Identification No.)

|9399 West Higgins RoadRosemont, Illinois 60018
(Address of principal executive offices)
(Zip Code)


(847) 685-1100(Registrants telephone number, including area code)



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 3 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 [  ]


Number of shares of
Common Stock, $10 par value, outstanding as of close of business on August 7, 2002:
1,464,285.


The registrant
meets the conditions set forth in General Instruction H(1)(a)(b) and (c) of Form
10-Q and is therefore filing this form with the reduced disclosure format.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|TABLE OF CONTENTS
|-----------------

| |  |  | Page
| |  |  | ----

PART I  FINANCIAL INFORMATION

|Item 1 | Condensed Consolidated Balance Sheets
June 30, 2002 and December 31, 2001 | 1
|------ | ------------------------------------------------------------------------- | -

| |  | Condensed Consolidated Statements of Income
Six and Three Months Ended June 30, 2002 and 2001 | 2
| |  | --------------------------------------------------------------------------------------------- | -

| |  | Condensed Consolidated Statements of Cash Flows
Six and Three Months Ended June 30, 2002 and 2001 | 3
| |  | ------------------------------------------------------------------------------------------------- | -

| |  | Notes to Condensed Consolidated Financial
Statements | 4
| |  | ---------------------------------------------------- | -

|Item 2 | Managements
Narrative Analysis of Results of Operations | 7
|------ | -------------------------------------------------------- | -

PART II  OTHER INFORMATION

|Item 6 | Exhibits
and Reports on Form 8-K | 12
|------ | -------------------------------- | --

| |  | Signatures | 13
| |  | ---------- | --

|PART I - FINANCIAL INFORMATION Item 1. Financial
Statements


TRANSAMERICA FINANCE CORPORATION CONDENSED CONSOLIDATED BALANCE
SHEETS (Dollar amounts in millions)
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                              
|--------------------------------------------------------------
|                                                              
|ASSETS                                                        
|Cash and cash equivalents                                     
|                                                              
|Finance receivables                                           
|Less unearned finance charges                                 
|                                                              
|Net finance receivables                                       
|Less allowance for losses                                     
|                                                              
|                                                              
|Property and equipment (net of accumulated depreciation of    
|$1,356.8 in 2002 and $1,305.7 in 2001):                       
|Land, buildings and equipment                                 
|Equipment held for lease                                      
|Investments (cost of $77.3 in 2002 and $68.3 in 2001)         
|Goodwill                                                      
|Intangible assets (net of accumulated amortization of $48.0 in
|2002 and $44.2 in 2001)                                       
|Assets held for sale                                          
|Other assets                                                  
|                                                              
|                                                              
|                                                              
|LIABILITIES AND STOCKHOLDERS EQUITY                          
|Debt:                                                         
|Unsubordinated                                                
|Subordinated                                                  
|Due to AEGON affiliates                                       
|                                                              
|Total debt                                                    
|Deferred real estate service revenues                         
|Accounts payable and other liabilities                        
|Income taxes payable                                          
|Stockholders equity:                                         
|Preferred stockauthorized, 250,000 shares without par value; 
|none issued                                                   
|Common stockauthorized, 2,500,000 shares of $10 par value;   
|issued and outstanding, 1,464,285 shares                      
|Additional paid-in capital                                    
|Retained earnings                                             
|Accumulated other comprehensive loss                          
|                                                              
|Total stockholders equity                                    
|                                                              
|                                                              
|                                                              

|See notes to condensed consolidated financial statements


1
|------------------------------------------------------------

|TRANSAMERICA FINANCE CORPORATION CONDENSED CONSOLIDATED STATEMENTS
OF INCOME (Dollar amounts in millions)
|---------------------------------------------------------------------------------------------------------

|                                                               
|---------------------------------------------------------------
|2002                                                           
|                                                               
|REVENUES                                                       
|Finance charges                                                
|Leasing revenues                                               
|Real estate service revenues                                   
|Other revenues                                                 
|                                                               
|Total revenues                                                 
|                                                               
|EXPENSES                                                       
|Interest and debt expense                                      
|Depreciation on equipment held for lease                       
|Salaries and other operating expenses                          
|Provision for losses on receivables                            
|                                                               
|Total expenses                                                 
|Income from continuing operations before income taxes          
|Income tax expense (benefit)                                   
|                                                               
|Income from continuing operations                              
|Loss from discontinued operations (net of income tax benefit of
|$3.3 and $1.2 in 2002, and $0.8 and $0.3 in 2001)              
|                                                               
|Income before cumulative effects of accounting changes         
|Cumulative effects of accounting changes (net of income tax    
|expense (benefit) of ($2.6) in 2002 and $4.1 in 2001)          
|                                                               
|Net income                                                     
|                                                               

|See notes to condensed consolidated financial statements



2
|-------------------------------------------------------------

|TRANSAMERICA FINANCE CORPORATION CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS (Dollar amounts in millions)
|-------------------------------------------------------------------------------------------------------------

|                                                           
|-----------------------------------------------------------
|2002                                                       
|                                                           
|OPERATING ACTIVITIES                                       
|Net income                                                 
|Adjustments to reconcile net income to net cash provided by
|operating activities:                                      
|Cumulative effects of accounting changes                   
|Depreciation and amortization                              
|Provision for losses on receivables                        
|Change in accounts payable and other liabilities           
|Change in income taxes payable                             
|Other                                                      
|                                                           
|Net cash provided by operating activities                  
|                                                           
|INVESTING ACTIVITIES                                       
|Finance receivables originated and purchased               
|Finance receivables collected and sold                     
|Purchases of property and equipment                        
|Sales of property and equipment                            
|Proceeds from sale of certain assets held for sale         
|Other                                                      
|                                                           
|Net cash provided by investing activities                  
|                                                           
|FINANCING ACTIVITIES                                       
|Proceeds from debt financing                               
|Repayments of debt                                         
|Proceeds from debt financing with AEGON affiliates         
|Capital contributions from parent company                  
|Dividends to parent                                        
|Return of capital                                          
|                                                           
|Net cash used in financing activities                      
|                                                           
|Increase (decrease) in cash and cash equivalents           
|Cash and cash equivalents at beginning of year             
|                                                           
|Cash and cash equivalents at end of period                 
|                                                           

|See notes to condensed consolidated financial statements



3
|-------------------------------------------------------------

|TRANSAMERICA FINANCE CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS


Note A  Basis of Presentation

The
accompanying unaudited condensed consolidated financial statements of Transamerica
Finance Corporation and its subsidiaries (the Company) have been prepared in
accordance with accounting principles generally accepted in the United States of America
for interim financial information and with the instructions to Form 10-Q and Article 10
of Regulation S-X. Accordingly, they do not include all of the information and footnotes
required by these accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the six and
three month periods ended June 30, 2002 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2002. For further information,
refer to the consolidated financial statements and footnotes set forth in the Companys
Form 10-K for the year ended December 31, 2001. Certain reclassifications have been made
to the 2001 condensed consolidated financial statements to conform to the 2002
classifications.


Note B  Impact of Recently Issued
Accounting Standards

In
June of 2001, the Financial Accounting Standards Board (FASB) issued Statement No. 142,
Goodwill and Other Intangible Assets (FAS No. 142). This statement significantly
changed the accounting for goodwill and intangible assets. Under FAS No. 142, goodwill
and intangible assets deemed to have indefinite lives are no longer amortized but are
subject to annual fair value impairment tests in accordance with the statement. Other
intangible assets will continue to be amortized over their useful lives.

The
Company adopted FAS No. 142 as of January 1, 2002. Pursuant to FAS No. 142, the Company
completed its assessment of its previously recognized intangible assets and goodwill in
the first quarter of 2002. Based on the results of this assessment, $1.4 million of
intangible assets were reclassified as goodwill. The Company also performed the goodwill
impairment test required under FAS No. 142 by comparing the unamortized balance of its
goodwill to the implied fair value of its goodwill determined through the use of a
discounted cash flow model. As a result of this test, the Company recognized after tax
impairment losses of $35.4 million and $8.0 million on the goodwill of the intermodal
leasing operation and a reporting unit in the commercial lending operation, respectively.
These losses were recorded as the cumulative effect of a change in accounting principle
in the first quarter of 2002. The Company previously evaluated goodwill for impairment by
comparing the unamortized balance of its goodwill to projected undiscounted cash flows.
Under this methodology the Company did not have any goodwill impairment.

The
Companys net income adjusted to exclude goodwill amortization was as follows:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                               
|-------------------------------
|                               
|Reported net income            
|Add back: Goodwill amortization
|                               
|Adjusted net income            
|                               

|4
|-

|In
September 2001, the FASB issued Statement No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets (FAS No. 144), that is applicable to financial
statements issued for fiscal years beginning after December 15, 2001. This statement
superseded FASB Statement No. 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of, and significantly changed the criteria that have
to be met in order to classify an asset as held for sale. The new rules also superseded
the provisions of Accounting Principles Board Opinion 30, Reporting the Results of
Operations  Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions (APB
30), with regard to reporting the effects of a disposal of a segment or a component of a
business, requiring expected future operating losses from discontinued operations to be
reported in discontinued operations in the period(s) in which the losses are incurred,
rather than as of the measurement date as required by APB 30. The Company adopted FAS No.
144 as of January 1, 2002 without any impact on the Companys financial position or
the results of its operations. With respect to the Companys assets held for sale in
its commercial lending operation, the Company will continue to account for these assets
under the provisions of APB 30 as prescribed under FAS No. 144.


Note C  Discontinued Operations


During
the first quarter of 2002, the Company determined that its ninety-five percent owned
investment in TerraPoint, LLC (TerraPoint) did not fit its long term
strategy. As a result of this determination, the Company reclassified the net assets of
TerraPoint, consisting of $11.5 million of accounts receivable and fixed assets, as
assets held for sale. In the second quarter of 2002, the Company completed the sale of
its investment in TerraPoint, which resulted in a loss of $8.1 million ($5.3 million
after tax). The condensed consolidated statements of income have been restated to reflect
the results of operations of TerraPoint as a discontinued operation. TerraPoint was part
of the Companys Real Estate Information Services segment. Net revenues for
TerraPoint for the first half and second quarter of 2002 were $3.0 million and $0.7
million, respectively, and $1.3 million and $0.7 million for the comparable periods of
2001.


Note D  Consolidated Statements of Retained Earnings
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                            
|----------------------------
|2002                        
|                            
|Balance at beginning of year
|Net income                  
|Dividends to parent         
|                            
|Balance at end of period    
|                            

|5
|-

|Note E  Comprehensive Income


The
components of comprehensive income were as follows:
|---------------------------------------------------------------------------------------

|                                                   
|---------------------------------------------------
|2002                                               
|                                                   
|Net income                                         
|Other comprehensive income (loss):                 
|Change in net unrealized gains from investments    
|marked to fair value (net of tax)                  
|Foreign currency translation adjustments           
|Change in unrealized gains from derivatives        
|marked to fair value (net of tax)                  
|Cumulative effect of accounting change (net of tax)
|                                                   
|Comprehensive income                               
|                                                   

|6
|-

|Item 2. Managements Narrative Analysis of Results of Operations.

The following
tables set forth revenues and income (loss) by line of business for the periods
indicated:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                     
|-----------------------------------------------------
|Revenues                                             
|2002                                                 
|                                                     
|                                                     
|Commercial lending                                   
|Intermodal leasing                                   
|Real estate information services                     
|Other(1)                                             
|                                                     
|                                                     
|                                                     
|Amortization of goodwill (net of tax)                
|                                                     
|Income from continuing operations                    
|Loss from discontinued operations (net of tax)       
|                                                     
|Income before cumulative effects of                  
|accounting changes                                   
|Cumulative effects of accounting changes (net of tax)
|                                                     
|Net income                                           
|                                                     
|                                                     

|                                              
|----------------------------------------------
|Revenues                                      
|2002                                          
|                                              
|                                              
|Commercial lending                            
|Intermodal leasing                            
|Real estate information services              
|Other(1)                                      
|                                              
|                                              
|                                              
|Amortization of goodwill (net of tax)         
|                                              
|Income from continuing operations             
|Loss from discontinued operations (net of tax)
|                                              
|Net income                                    
|                                              

|(1) Unallocated items including intercompany eliminations.
7
|------------------------------------------------------------

|Commercial Lending

Income
from operations for the first half and second quarter of 2002 was $65.5 million
and $30.1 million, respectively, compared with income of $44.4 million and $20.7
million for the corresponding periods of 2001. Operating results for the first
half and second quarter of 2002 included after tax charges of $1.3 million and
$0.2 million, respectively, resulting from the reduction in the fair value of
the operations stock warrants, which are accounted for as derivative
instruments under FASB Statement No. 133, Accounting for Derivative Instruments
and Hedging Activities (FAS No. 133). This compares with an after
tax charge of $0.2 million and an after tax gain of $1.6 million for the
corresponding periods of 2001. During the first half of 2002, the commercial
lending operation sold $23.6 million of small business administration loan net
finance receivables and $193.5 million of retail finance net finance receivables
at their net carrying values. During the first half and second quarter of 2001,
the operation sold $450.0 million and $238.9 million, respectively, of retail
finance net finance receivables, which resulted in after tax gains of $7.0
million and $1.0 million, respectively. Also, during the first half and second
quarter of 2001, the operation recorded an after tax gain of $1.2 million and an
after tax loss of $0.3 million, respectively, from the sale of certain assets of
the insurance premium finance business. In connection with the insurance premium
finance asset sale in the first quarter of 2001, a decision was made to
liquidate the remaining insurance premium finance net finance receivables and to
reclassify the net carrying value of those receivables from assets held for sale
to net finance receivables. Operating results for the first half of 2001
included $3.2 million in after tax gains resulting from the sale of a portion of
stock received from the exercise of stock warrants. Excluding the above items,
income from operations for the first half and second quarter of 2002 increased
$33.6 million (101%) and $11.9 million (65%), respectively, from the comparable
prior year periods. The increases were primarily due to lower operating expenses
and provisions for losses on finance receivables partially offset by reduced
margins from lower average net finance receivables outstanding in the
liquidating and assets held for sale portfolios.

Revenues
for the first half and second quarter of 2002 decreased $176.6 million (31%) and
$80.5 million (29%), respectively, from the corresponding 2001 periods. The
decreases were principally a result of a decline in average net finance
receivables outstanding and the sale and liquidation of net finance receivables
in assets held for sale.

Interest
expense decreased $111.2 million (51%) and $45.5 million (46%), respectively,
for the first half and second quarter of 2002 from the comparable 2001 periods.
The declines were primarily due to lower borrowing rates. Operating expenses for
the first half and second quarter of 2002 decreased $77.9 million (36%) and
$38.2 million (35%), respectively, relative to the corresponding periods in
2001. The declines were primarily due to lower costs associated with the
liquidating receivables and assets held for sale related to the declines in
those assets. The provision for losses on finance receivables for the first half
and second quarter of 2002 decreased $23.4 million (31%) and $15.9 million
(35%), respectively, from the first half and second quarter of 2001, principally
as a result of lower credit losses. Credit losses, net of recoveries, on an
annualized basis as a percentage of average net finance receivables outstanding,
were 1.22% for the first half and 1.14% for the second quarter of 2002 compared
with 1.80% and 2.24% for the corresponding periods of 2001.

Net
finance receivables outstanding at June 30, 2002 decreased $558.7 million (8%)
from December 31, 2001. Management has established an allowance for losses on
net finance receivables of $142.9 million (2.20% of net finance receivables
outstanding) at June 30, 2002 compared with $136.8 million (1.94% of net finance
receivables outstanding) at December 31, 2001.

Delinquent
finance receivables are defined as the installment balance for inventory finance
and asset-based lending finance receivables more than 60 days past due and the
entire receivable balance for all other receivables more than 60 days past due.
At June 30, 2002, delinquent receivables were $131.3 million (1.84% of finance
receivables outstanding) compared with $132.1 million (1.70% of finance
receivables outstanding) at December 31, 2001.
8
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Non-earning
finance receivables are defined as balances from borrowers that are more than 90
days delinquent for non-credit card finance receivables or at such time as full
collectibility becomes doubtful. Non-earning finance receivables on revolving
credit card accounts included in retail finance are defined as balances from
borrowers in bankruptcy and accounts for which full collectibility is doubtful.
Non-earning finance receivables were $216.3 million (3.03% of finance
receivables outstanding) at June 30, 2002 compared with $238.2 million (3.06% of
finance receivables outstanding) at December 31, 2001.

Assets
held for sale at June 30, 2002 totaled $71.7 million, net of a $44.3 million
valuation allowance, and consisted of retail finance, consumer mortgage and
small business administration net finance receivables and other repossessed
assets. Assets held for sale at December 31, 2001 totaled $278.6 million, net of
a $113.1 million valuation allowance. At June 30, 2002, delinquent and
non-earning net finance receivables of these businesses were $27.3 million and
$44.1 million, respectively, compared with $51.5 million and $54.5 million,
respectively, at December 31, 2001.


Intermodal Leasing

Losses
from operations for the first half and second quarter of 2002 were $0.9 million
and $2.1 million, respectively, compared with losses of $11.3 million and $3.6
million for the first half and second quarter of 2001. Operating results for the
first half of 2002 included a $6.6 million net tax benefit associated with a
structured financing of certain European trailer equipment. Operating results
for the first half and second quarter of 2001 were favorably impacted by a $2.4
million after tax gain resulting from the termination of certain forward
exchange contracts. Excluding these items, operating losses for the first half
and second quarter of 2002 decreased by $6.2 million and $3.9 million,
respectively, primarily due to the factors discussed below.

Revenues
for the first half and second quarter of 2002 decreased $24.7 million (11%) and
$13.4 million (11%), respectively, from the first half and second quarter of
2001. The decreases were primarily due to a decline in effective per diem rates
for maritime containers and lower per diem rates for European trailers.

Expenses
for the first half and second quarter of 2002 decreased $27.5 million (11%) and
$14.3 million (12%), respectively, from the corresponding 2001 periods. The
decreases were primarily attributable to lower operating expenses due to cost
saving initiatives and lower ownership costs resulting principally from lower
borrowing rates for the first half of 2002 and lower average debt levels for the
second quarter of 2002.

Maritime
container utilization averaged 76% and 78% for the first half and second quarter
of 2002, respectively, and 75% and 74% for the first half and second quarter of
2001. European trailer utilization was 88% for both the first half and second
quarter of 2002 and 88% and 90% for the first half and second quarter of 2001,
respectively.


Real Estate Information Services

Real
estate information services income from operations for the first half and second
quarter of 2002 was $16.4 million and $9.3 million, respectively, compared with
$24.3 million and $20.7 million for the first half and second quarter of 2001.
The first half and second quarter of 2001 results of operations included a
$13.0 million after tax gain from the reversal of a current state tax liability
accrued, but never incurred, while operating as a division of Transamerica
Corporation. Excluding this item, income from operations for the first half and
second quarter of 2002 increased $5.1 million and $1.6 million, respectively,
from the comparable periods of 2001, primarily due to the factors discussed
below.

Revenues
increased $5.0 million (4%) for the first half of 2002 over the first half of
2001 primarily due to higher levels of mortgage lending activity, which
led to higher property tax monitoring and flood certification service fees.
Mortgage lending activity was lower in the second quarter of 2002 when compared
with the second quarter of 2001. As a result of this lower activity, revenues
for the second quarter of 2002 declined $2.3 million (4%) from the comparable prior
year period.
9
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Operating
expenses for the first half and second quarter of 2002 decreased $3.3 million
(4%) and $4.8 million (10%), respectively, from the corresponding periods of
2001, principally due to cost and quality control initiatives.

In
the first quarter of 2002, as discussed in Note C of Notes to Condensed
Consolidated Financial Statements, the Company determined that its ninety-five
percent owned investment in TerraPoint no longer fit its long term strategy and
reclassified the net assets of TerraPoint as assets held for sale. In accordance
with FAS No. 144, the results of operations of TerraPoint were reclassified as
discontinued operations and excluded from the previously discussed operating
results. In the second quarter of 2002 the Company completed the sale of its
investment in TerraPoint, which resulted in a loss of $8.1 million ($5.3 million
after tax).


Other

Results
for the first half and second quarter of 2002 were losses of $2.9 million and
$2.0 million, respectively, compared with income of $4.8 million and $1.4
million, respectively, for the corresponding periods of 2001. The decreases were
primarily related to a $9.8 million after tax reversal in the second quarter of
2001 of a deferred state income tax liability that was no longer required. The
reversal was the result of a revaluation of the current consolidated state
income tax position of the Company as a result of AEGONs acquisition of
Transamerica Corporation and the relocation and reorganization of the Company.
Results for the first half and second quarter of 2002 also included an after tax
gain of $0.5 million and an after tax charge of $1.0 million, respectively,
relating to the fair value of debt derivatives that did not qualify as hedges
under FAS No. 133. This compares with charges of $0.2 million and $5.7 million,
respectively, for the corresponding periods of 2001.


Derivatives

The
Company uses derivative financial instruments to hedge some of its interest rate
and foreign currency exchange rate risk. The Company uses interest rate exchange
agreements to hedge the interest rate risk of its outstanding indebtedness. The
interest rate exchange agreements are intended to help the Company more closely
match the cash flow received from its assets to the payments on its liabilities,
and generally provide that one party pays interest at a floating rate in
relation to movements in an underlying index while the other party pays interest
at a fixed rate. The Company uses foreign currency forward exchange agreements
primarily to hedge the risks associated with the funding of certain of its
foreign operations. Under these agreements, the Company agrees to sell to other
contracting parties a specified amount of foreign currency for a specified
amount of dollars at a future date. Derivatives are used only for the purpose of
hedging such risks, not for speculation.

The
notional amounts of the Companys debt derivative financial instruments
were $1.3 billion at June 30, 2002 and $1.7 billion at December 31, 2001. Of
these derivatives, $0.8 billion at June 30, 2002 and $1.3 billion at December
31, 2001 qualified under FAS No. 133 for hedge accounting treatment. The hedging
relationships of the Companys fair value and cash flow hedges qualified
under FAS No. 133 for the short cut method and therefore no
ineffective cash flow gains or losses were recognized.

The
fair values of the Companys debt derivatives at June 30, 2002 and December
31, 2001 were net obligations of $0.9 million and net benefits of $5.4 million,
respectively. At June 30, 2002 and December 31, 2001, these debt derivatives
contained aggregate gross obligations of $6.9 million and $11.9 million,
respectively, and aggregate gross benefits of $6.0 million and $17.3 million.
10
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Impact of Adopting New Accounting Standard


In June of 2001, the FASB
issued Statement No. 142, Goodwill and Other Intangible Assets (FAS No. 142).
This statement significantly changed the accounting for goodwill and intangible assets.
Under FAS No. 142, goodwill and intangible assets deemed to have indefinite lives are no
longer amortized but are subject to an annual fair value impairment test. Other
intangible assets continue to be amortized over their useful lives. The Company adopted
FAS No. 142 as of January 1, 2002. Application of the amortization provisions of the
statement relating to existing goodwill will result in a reduction in expenses of
approximately $15 million for 2002.

In
the first quarter of 2002, pursuant to FAS No. 142, the Company completed its
assessment of its previously recognized intangible assets and goodwill. Based on
the results of this assessment, the Company reclassified $1.4 million of
intangible assets as goodwill. In accordance with the transition provisions of
FAS No. 142, the Company assigned all of its goodwill and intangible assets to
its applicable reporting units, and completed the required transitional goodwill
impairment test. The Company completed step one of the impairment test by using
a discounted cash flow model to estimate the current fair values of its
reporting units. These estimated fair values were then compared with their
carrying values, revealing potential goodwill impairments in the Companys
intermodal leasing operation and in a reporting unit in the commercial lending
operation. As a result of the identification of these potential impairments the
Company was required to perform step two of the impairment test. Step two
required the Company to compare the carrying value of the goodwill in these
reporting units with the value of the goodwill implied by the fair value
estimations. In both instances the implied fair values of the goodwill of these
reporting units were found to be less than their carrying values and impairment
losses were recognized for the differences. The Company recognized after tax
impairment losses of $35.4 million and $8.0 million on the goodwill of the
intermodal leasing operation and a reporting unit in the commercial lending
operation, respectively. These losses were recorded as the cumulative effect of
a change in accounting principle in the first quarter of 2002. The Company
previously evaluated goodwill for impairment by comparing the unamortized
balance of its goodwill to projected undiscounted cash flows. Under this
methodology the Company did not have any goodwill impairment.


Safe Harbor Statement Under the Private Securities Litigation Reform Act
of 1995

The
statements contained in this report, which are not historical facts, are
forward-looking statements. When included in this report, the words
expects, intends, anticipates,
estimates, and analogous expressions are intended to identify
forward-looking statements. Such statements inherently are subject to a variety
of risks and uncertainties that could cause actual results to differ materially
from those projected. Such risks and uncertainties include, among others,
general economic and business conditions, competition, changes in financial
markets (credit, currency, commodities and stocks), changes in foreign,
political, social and economic conditions, regulatory initiatives and compliance
with governmental regulations, judicial decisions and rulings, and various other
matters, many of which are beyond the Companys control. These
forward-looking statements speak only as of the date of this report. The Company
expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statement contained herein to
reflect any change in the Companys expectations with regard thereto or any
change in events, conditions or circumstances on which any statement is based.
11
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|PART II  OTHER INFORMATION


Item 6. Exhibits and Reports on Form 8-K.


(a) Exhibits:
|---------------------------------------------------------------------------------------

| | 10.1 | GUARANTEE,
by AEGON N. V., a Netherlands based corporation, dated as of August 1, 2000, of all
United States Commercial Paper Notes issued by Transamerica Finance Corporation from
August 1, 2000 until December 31, 2000, incorporated by reference herein from Exhibit
99.1 of Report on Form 8-K dated August 1, 2000.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.8 | Amendment
No. 4, dated as of June 14, 2002, to GUARANTEE, dated as of August 1, 2000, of all United
States Commercial Paper Notes issued by Transamerica Finance Corporation.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.9 | GUARANTEE,
by AEGON N. V., a Netherlands based corporation, dated as of June 14, 2002, of all
Canadian Commercial Paper Notes issued by Transamerica Finance Corporation from August 1,
2000 until December 31, 2002.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 12 | Computation
of Ratio of Earnings to Fixed Charges
| | -- | -------------------------------------------------

| | 99.2 | Certification
of Principal Executive Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
| | ---- | -------------------------------------------------------------------------------------------------------

| | 99.3 | Certification
of Principal Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
| | ---- | -------------------------------------------------------------------------------------------------------

(b) Reports on Form 8-K:

| | None.
| | -----

|12
|--

|SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | TRANSAMERICA FINANCE CORPORATION |  | 
| |  |  | -------------------------------- |  | 
| |  |  | (Registrant)                     |  | 

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below on August 8, 2002 by the following persons on behalf of the
Registrant and in the capacities indicated.

|Signature                     | Title
|----------------------------- | -----
|                              |      
|Principal Financial Officer:  |      
|                              |      
|/s/ ROSARIO A. PERRELLI       |      
|                              |      
|(Rosario A. Perrelli)         |      
|                              |      
|Principal Accounting Officer: |      
|                              |      
|/s/ THOMAS G. BASTIAN         |      
|                              |      
|(Thomas G. Bastian)           |      

|Date:   August 8, 2002



13
|----------------------------