UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                -----------------

                                    FORM 10-K

|X|   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

                   For the fiscal year ended December 31, 1998
                                       OR

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

                 For the transition period from ______ to ______

                                ----------------

                          Commission file number 1-6594

                                ----------------

                            COMMERCIAL CREDIT COMPANY
             (Exact name of registrant as specified in its charter)

            Delaware                                     52-0883351
 (State or other jurisdiction of            (I.R.S. Employer Identification No.)
  incorporation or organization)                  

                  300 St. Paul Place, Baltimore, Maryland 21202
               (Address of principal executive offices) (Zip Code)
                                 (410) 332-3000
              (Registrant's telephone number, including area code)

                                ----------------

Securities registered pursuant to Section 12(b) of the Act:

   Title of each class                Name of each exchange on which registered
   -------------------                -----------------------------------------
10% Notes due May 1, 1999                      New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:  None

                            REDUCED DISCLOSURE FORMAT

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |X|

Because the registrant is an indirect wholly owned subsidiary of Citigroup Inc.,
none of the registrant's outstanding voting stock is held by nonaffiliates of
the registrant. As of the date hereof, one share of the registrant's Common
Stock, $.01 par value, was issued and outstanding.

                    Documents Incorporated by Reference: None
<PAGE>

                            COMMERCIAL CREDIT COMPANY

                           Annual Report on Form 10-K

                     For Fiscal Year Ended December 31, 1998

                         ------------------------------

                               TABLE OF CONTENTS
Form 10-K
Item Number
-----------
                                                                            Page
                                                                            ----
       Part I                                                                   
       ------                                                                   
                                                                                
1.     Business...............................................................1 
2      Properties.............................................................9 
3.     Legal Proceedings.....................................................10 
4.     Omitted Pursuant to General Instruction I                                
                                                                                
       Part II                                                                  
       -------                                                                  
                                                                                
5.     Market for Registrant's Common Equity and                                
          Related Stockholder Matters........................................11 
6.     Selected Financial Data...............................................12 
7.     Management's Discussion and Analysis of Financial                        
          Condition and Results of Operations................................13 
7A.    Qualitative and Quantitative Market Risk Disclosures..................21 
8.     Financial Statements and Supplementary Data...........................21 
9.     Changes in and Disagreements with Accountants on                         
          Accounting and Financial Disclosure................................21 
                                                                                
       Part III                                                                 
       --------                                                                 
                                                                                
10-13. Omitted Pursuant to General Instruction I                                
                                                                                
       Part IV                                                                  
       -------                                                                  
                                                                                
14.    Exhibits, Financial Statement Schedules, and Reports                     
          on Form 8-K........................................................22 
       Exhibit Index.........................................................23 
       Signatures............................................................25 
       Index to Consolidated Financial Statements and Schedules.............F-1 
<PAGE>

                                     PART I
                                     ------

Item 1. BUSINESS.

                                   THE COMPANY

            Commercial Credit Company (the "Company") is a financial services
holding company engaged, through its subsidiaries, principally in consumer
finance services. The Company's predecessor was founded in 1912. The Company is
a wholly owned subsidiary of Citigroup Inc. ("Citigroup"), a diversified holding
company whose businesses provide a broad range of financial services to consumer
and corporate customers around the world. Citigroup's activities are conducted
through Global Consumer (through several of Citigroup's subsidiaries, including
the Company and its subsidiaries), Global Corporate and Investment Bank, Asset
Management, and Investment Activities. The periodic reports of Citigroup provide
additional business and financial information concerning that company and its
consolidated subsidiaries.(1)

            The principal executive offices of the Company are located at 300
St. Paul Place, Baltimore, Maryland 21202; telephone number 410-332-3000.

                            CONSUMER FINANCE SERVICES

            The Company's Consumer Finance Services segment includes consumer
lending services conducted primarily under the name "Commercial Credit," as well
as credit-related insurance and credit card services.

            As of December 31, 1998, the Company maintained 980 loan offices in
45 states, including 19 servicing centers for loans sold through the independent
agents (the "Primerica sales force") of Primerica Financial Services
("Primerica"), an affiliate of the Company. The Company owns one state-chartered
bank and one federally chartered savings bank, each headquartered in Newark,
Delaware. Total consumer finance receivables of this segment at December 31,
1998, 1997 and 1996 were approximately $13.4 billion, $11.0 billion and $8.0
billion, respectively. For an analysis of consumer finance receivables, net of
unearned finance charges ("Consumer Finance Receivables"), see Note 6 of Notes
to Consolidated Financial Statements.

            Loans to consumers include both fixed and variable rate real
estate-secured loans, both fixed and variable rate unsecured and partially
secured personal loans and fixed rate loans

----------
(1) Certain items in this Form 10-K, including certain matters discussed under
Item 7, "Management's Discussion and Analysis of Financial Condition and Results
of Operations" (the "MD&A"), are forward-looking statements. The matters
referred to in such statements could be affected by the risks and uncertainties
involved in the Company's business, including the effect of economic and market
conditions, the level and volatility of interest rates, the impact of current or
pending legislation and regulation and the other risks and uncertainties
detailed herein, including in the Results of Operations section under the
heading "Outlook" and in the Forward-Looking Statements section of the MD&A.
<PAGE>

to finance consumer goods purchases. The Travelers Bank USA, a state-chartered
bank located in Newark, Delaware, and a subsidiary of the Company, provides
credit card loans as discussed below. The Company's loan offices are generally
located in small to medium-sized communities in suburban or rural areas, and are
managed by individuals who generally have considerable consumer lending
experience. The primary market for consumer loan customers consists of
households with an annual income of $20,000 to $50,000. The number of active
loan customers (excluding credit card customers) was approximately 1,885,000 at
December 31, 1998, as compared to approximately 1,893,000 at December 31, 1997
and approximately 1,307,000 at December 31, 1996. The Company also operates an
agency that performs appraisals, sells title insurance and provides other
closing-related services for the Company's real estate loans.

            The $.M.A.R.T. loan(R) and $.A.F.E.(R) loan programs involve the
solicitation of applications for mortgage and personal loans exclusively through
the Primerica sales force. At December 31, 1998, the total loans outstanding
generated from this program were $2.950 billion, or approximately 22% of total
loans outstanding, as compared to $2.257 billion, or approximately 21%, at
December 31, 1997 and $1.516 billion, or approximately 19%, at December 31,
1996. In February 1998, Travelers Bank & Trust, fsb became the official lender
for the $.M.A.R.T. loan(R) program.

            The average amount of cash advanced per real estate-secured loan
made was approximately $48,400 in 1998, $44,700 in 1997 and $35,800 in 1996. The
average amount of cash advanced per personal loan made was approximately $4,600
in 1998, $4,400 in 1997 and $4,250 in 1996. The average real estate-secured loan
size increased in 1998 and 1997 due to marketing initiatives that attracted
customers for higher balance loans, particularly in first mortgage programs. The
average annual yield for loans in 1998 was 14.25%, as compared to 14.74% in 1997
and 15.42% in 1996. The average annual yield for real estate-secured loans in
1998 was 11.80%, as compared to 11.73% in 1997 and 12.13% in 1996, and for
personal loans it was 20.21% in 1998, as compared to 20.14% in 1997 and 20.45%
in 1996. The average yield for real estate-secured loans has been affected by
the normal run-off of older, higher yielding loans and growth in lower yielding,
higher quality loans, while the average yield for personal loans has been
affected by a shift in the portfolio to loans partially secured by real estate
(classified as personal loans). Consumer Finance Services' average net interest
margin for loans was 7.95% in 1998, 8.21% in 1997 and 8.74% in 1996.

      Delinquent Receivables and Loss Experience

            Due to the nature of the finance business, some customer delinquency
and loss is unavoidable. The management of the consumer finance business
attempts to control customer delinquencies through careful evaluation of each
borrower's application and credit history at the time the loan is made or
acquired, and appropriate collection activity. An account is considered
delinquent for financial reporting purposes when a payment is more than 60 days
past due, based on the original or extended terms of the contract. The
delinquency and loss experience on real estate-secured loans is generally more
favorable than on personal loans.


                                       2
<PAGE>

            The following table sets forth the ratio of receivables delinquent
for 60 days or more on a contractual basis (i.e., more than 60 days past due) to
gross receivables outstanding:

     Ratio of Receivables Delinquent 60 Days or More to Gross Receivables
                               Outstanding (1)

                                     Real
                                     Estate-
                          Personal   Secured   Credit    Sales     Total
As of December 31,        Loans      Loans     Cards     Finance   Consumer
------------------        -----      -----     -----     -------   --------
   1998                    1.99%     1.80%      0.66%     1.98%     1.77%
   1997                    2.12%     1.61%      1.11%     1.89%     1.78%
   1996                    2.08%     1.50%      1.04%     1.54%     1.72%

----------
(1) The receivable balance used for these ratios is before the deduction of
unearned finance charges and excludes accrued interest receivable. Receivables
delinquent 60 days or more include, for all periods presented, accounts in the
process of foreclosure.

            The following table sets forth the ratio of net charge-offs to
average Consumer Finance Receivables. For all periods presented, the ratios
shown give effect to all deferred origination costs.

       Ratio of Net Charge-Offs to Average Consumer Finance Receivables

                                     Real
                                     Estate-
Year Ended                Personal   Secured   Credit    Sales     Total
December 31,              Loans      Loans     Cards     Finance   Consumer
------------              -----      -----     -----     -------   --------
   1998                   6.04%      0.37%      2.20%     3.39%     2.68%
   1997                   5.82%      0.41%      2.67%     3.27%     2.80%
   1996                   5.95%      0.50%      2.94%     3.53%     3.12%

            The following table sets forth information regarding the ratio of
allowance for losses to Consumer Finance Receivables:

        Ratio of Allowance For Losses to Consumer Finance Receivables

                              As of December 31,
                              ------------------
                                 1998   2.96%
                                 1997   2.94%
                                 1996   3.00%

Credit-Related Insurance

            American Health and Life Insurance Company ("AHL"), a subsidiary of
the Company, underwrites or arranges for credit-related insurance, which is
offered to customers of the consumer finance business. AHL has an A+ (superior)
rating from A.M. Best 


                                       3
<PAGE>

Company ("A.M. Best"), whose ratings may be revised or withdrawn at any time. At
a minimum, credit life insurance covers the declining balance of unpaid
indebtedness. Credit disability insurance provides monthly benefits during
periods of covered disability. Credit property insurance covers the loss of
property given as security for loans. Other insurance products offered or
arranged for by AHL primarily include auto single interest and involuntary
unemployment insurance. Most of AHL's products are single premium, which
premiums are earned over the related contract period.

            The following table sets forth gross written insurance premiums, net
of refunds, for consumer finance customers:


                  Consumer Finance Insurance Premiums Written
                                 (In millions)

                                                         Year Ended December 31,
                                                         -----------------------
                                                          1998     1997    1996
                                                          ----     ----    ----
Premiums written by AHL and its affiliates(1) 
Writings for consumer finance:
        Credit life                                    $  83.8  $  65.4   $ 42.7
        Credit disability and other                       93.6     91.0     63.1
        Credit property and other                         97.6     51.5     18.0
                                                       -------  -------   ------
            Total                                      $ 275.0  $ 207.9   $123.8
                                                       =======  =======   ======
Premiums written by other insurance companies(2)
        Credit property and other                      $  14.6  $  26.9   $ 42.9
                                                       =======  =======   ======

----------
(1) Premiums are written by AHL and other subsidiaries of Citigroup.
(2) Premiums are written by nonaffiliated insurers for consumer finance
    customers.

            The increase in premiums year-over-year is the result of growth in
receivables and expanded availability of certain products in additional states.

            See Note 8 of Notes to Consolidated Financial Statements for
information regarding reinsurance activities.

Credit Card and Other Services

            The Travelers Bank USA is a state-chartered bank located in Newark,
Delaware, which provides credit card services, including upper market gold and
platinum credit card services, to individuals and to affinity groups (such as
nationwide professional associations and fraternal organizations) and loans to
finance consumer goods purchases. Travelers Bank & Trust, fsb (together with The
Travelers Bank USA, the "Banks") is a federally chartered savings bank located
in Newark, Delaware, which, until January 1, 1999, also provided credit card
services. Although the Banks have historically limited their activities to
credit card


                                       4
<PAGE>

operations, in February 1998, Travelers Bank & Trust, fsb became the official
lender for the $.M.A.R.T. loan(R) program.

            The following table sets forth aggregate information regarding
credit cards issued by the Banks.

                  Credit Cardholders and Total Outstandings
                             (Dollars in millions)

                                      As of, or for the year ended, December 31,
                                      ------------------------------------------
                                            1998        1997          1996
                                            ----        ----          ----
Approximate total credit cardholders     1,284,000      984,000     791,000
Approximate gold/platinum credit
cardholders(1)                           1,033,000      792,000     642,000
Total outstandings                        $1,398.5     $1,158.1      $900.6
Average annual yield                         9.39%       10.88%      11.89%

----------
(1) Platinum credit cards were offered beginning in 1998.

            The decrease in the average annual yield in 1998 and 1997 primarily
resulted from the offering of promotional rates in both years to encourage the
transfer of credit card balances to the Banks. The primary market for The
Travelers Bank USA's credit cards consists of households with annual incomes of
$40,000 and above.

            The Banks offer deposit-taking services (which as to The Travelers
Bank USA are limited to deposits of at least $100,000 per account). At December
31, 1998, deposits of unaffiliated entities were $322.2 million, as compared to
$45.0 million at December 31, 1997 and $81.9 million at December 31, 1996.

            In March 1998, the Banks entered into a securitized transaction
pursuant to which they transferred approximately $356.5 million of their credit
card receivables to an affiliated special purpose corporation which transferred
such receivables to a trust. The trust sold to the public $227.5 million of
securities securitized by such receivables.

Competition

            The consumer finance business competes with banks, savings and loan
associations, credit unions, credit card issuers and other consumer finance
companies. Additionally, substantial national financial services networks have
been formed by major brokerage firms, insurance companies, retailers and bank
holding companies. Some competitors have substantial local market positions;
others are part of large, diversified organizations. Deregulation of banking
institutions has greatly expanded the consumer lending products permitted to be
offered by these institutions, and because of their long-standing insured
deposit base, many of them are able to offer financial services on very
competitive terms. The Company believes that it is able to compete effectively
with such institutions. In particular, the Company believes that the diversity
and features of the products it offers, personal service, and


                                       5
<PAGE>

cultivation of repeat and referral business support and strengthen its
competitive position in its consumer finance businesses.

Regulation

            Most consumer finance activities are subject to extensive federal
and state regulation, including examination and review by state authorities of
consumer finance offices. Personal loan, real estate-secured loan and sales
finance laws generally require licensing of the lender, limitations on the
amount, duration and charges for various categories of loans, adequate
disclosure of certain contract terms and limitations on certain collection
practices and creditor remedies. Federal consumer credit statutes primarily
require disclosure of credit terms in consumer finance transactions.

            The Company's two insured depository institution subsidiaries are
also subject to extensive federal and state regulation. The Travelers Bank USA
must undergo periodic examination by the Delaware State Bank Commissioner and
the Federal Deposit Insurance Corporation. Travelers Bank & Trust, fsb is
subject to regulation and examination by the Office of Thrift Supervision.

            The Company is an indirect subsidiary of Citigroup, a bank holding
company within the meaning of the U.S. Bank Holding Company Act of 1956,
registered with, and subject to examination by, the Federal Reserve Board
("FRB"). The activities of U.S. bank holding companies (such as Citigroup) and
their subsidiaries (such as the Company and its subsidiaries) are generally
limited to the business of banking, managing or controlling banks and other
activities that the FRB determines to be so closely related to banking or
managing or controlling banks as to be a proper incident thereto.

            U.S. insured depository institution subsidiaries are subject to
risk-based capital and leverage guidelines issued by U.S. regulators for banks,
savings associations, and bank holding companies. The regulatory agencies are
required by law to take specific prompt actions with respect to institutions
that do not meet minimum capital standards and in this regard have defined five
capital tiers, the highest of which is "well-capitalized." As of December 31,
1998, the Banks were each "well capitalized."

            The Banks are subject to additional regulations relating to
reporting, dividends and permitted asset and liability products. The Banks are
also subject to the Community Reinvestment Act, which assesses the records of
the Banks in helping to meet the credit needs in the delineated community of the
Banks, including low and moderate income neighborhoods, consistent with a safe
and sound banking operation. In addition, a number of federal and state consumer
protection laws and regulations are applicable to the Banks including the Truth
in Lending Act, which requires disclosure to the consumer of the cost of credit
and governs billing dispute resolution, the Equal Credit Opportunity Act, which
prohibits discrimination in any aspect of a credit transaction based on race,
color, national origin, gender, marital status, age, income from public
assistance programs or exercise of rights under the Consumer Protection Act, and
the Fair Credit Reporting Act, which is aimed at ensuring the accuracy and


                                       6
<PAGE>

fairness of the mechanism by which consumer credit and other information about
consumers is assembled and evaluated. Travelers Bank & Trust, fsb is also
covered by the Home Mortgage Disclosure Act, which requires disclosure of
customer demographics, including race, gender and age.

            There are various legal restrictions on the extent to which a bank
holding company and certain of its nonbank subsidiaries can borrow or otherwise
obtain credit from banking subsidiaries or engage in certain other transactions
with or involving those banking subsidiaries. In general, these restrictions
require that any such transactions must be on terms that would ordinarily be
offered to unaffiliated entities and secured by designated amounts of specified
collateral. Transactions between a banking subsidiary and the holding company or
any nonbank subsidiary are limited to 10 percent of the banking subsidiary's
capital stock and surplus, and as to the holding company and all such nonbank
subsidiaries in the aggregate, to 20 percent of the bank's capital stock and
surplus.

            The Company's right to participate in the distribution of assets of
any subsidiary upon the subsidiary's liquidation or reorganization will be
subject to the prior claims of the subsidiary's creditors. In the event of a
liquidation or other resolution of an insured depository institution, the claims
of depositors and other general or subordinated creditors are entitled to a
priority of payment over the claims of holders of any obligation of the
institution to its shareholders, including any shareholder (such as the Company)
or creditor thereof.

            In the liquidation or other resolution of a failed U.S. insured
depository institution, deposits and certain claims for administrative expenses
and employee compensation are afforded a priority over other general unsecured
claims, including non-deposit claims and claims of a parent such as the Company.
Such priority creditors would include the FDIC, which succeeds to the position
of insured depositors.

            A depository institution insured by the FDIC that is under common
control with a failed or failing FDIC-insured institution can be required to
indemnify the FDIC for losses resulting from the insolvency of the failed
institution, even if this causes the affiliated institution also to become
insolvent. Any obligations or liability owed by a subsidiary depository
institution to its parent company is subordinate to the subsidiary's
cross-guarantee liability with respect to commonly controlled insured depository
institutions and to the rights of depositors.

            The Company's insurance subsidiaries are subject to considerable
regulation and supervision by insurance departments or other authorities in each
state or other jurisdiction in which they transact business. The extent of
regulation varies but generally has its source in statutes that delegate
regulatory, supervisory and administrative authority to a department of
insurance. The purpose of such regulation and supervision is primarily to
provide safeguards for policyholders, rather than to protect the interests of
the insurers' stockholders. State laws also regulate transactions and dividends
between an insurance company and its parent or affiliates, and require prior
approval or notification of any change in control of an insurance subsidiary. In
addition, under insurance holding company legislation, most states regulate
affiliated groups with respect to intercompany transfers of assets, service
arrangements and 


                                       7
<PAGE>

dividend payments from insurance subsidiaries. State insurance departments also
conduct periodic examinations of the affairs of insurance companies and require
the filing of annual and other reports relating to the financial condition of
companies and other matters.

            In addition to state insurance laws, the Company's insurance
subsidiaries are also subject to general business and corporation laws, state
securities laws, consumer protection laws, fair credit reporting acts and other
laws. The insurance industry generally is exempt from federal antitrust laws
because of the application of the McCarran-Ferguson Act.

            Various legislation including proposals that would modify certain
laws and regulations affecting the financial services industry, including the
provisions regarding affiliations among insurance companies, investment banks
and commercial banks is from time to time introduced in Congress. Such
legislation may change the governing statutes and the operating environment of
the Company and its subsidiaries in substantial and unpredictable ways. The
Company cannot determine whether such potential legislation will ultimately be
enacted, and if enacted, the ultimate effect that any such potential legislation
or implementing regulations would have upon the financial condition or results
of operations of the Company or its subsidiaries.

                         CORPORATE AND OTHER OPERATIONS

            The Corporate and Other segment consists of corporate staff and
treasury operations, corporate investments and certain corporate income and
expenses that have not been allocated to the operating subsidiaries.

            The Company holds (directly and through a subsidiary) 2,105 shares
of Cumulative Adjustable Rate Preferred Stock, Series Y, of Citigroup, with a
liquidation value of $100,000 per share, which is redeemable at the option of
the holder at certain times and callable by Citigroup at certain times.

                            GENERAL BUSINESS FACTORS

            In the judgment of the Company, no material part of the business of
the Company and its subsidiaries is dependent upon a single customer or group of
customers, the loss of any one of which would have a materially adverse effect
on the Company, and no one customer or group of affiliated customers accounts
for as much as 10% of the Company's consolidated revenues.

            At December 31, 1998, the Company had approximately 6,400 full-time
employees. The Company also employs part-time employees.


                                       8
<PAGE>

                                OTHER INFORMATION

Source of Funds

            For a discussion of the Company's sources of funds and maturities of
the long-term debt of the Company, see Item 7, "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources," and Note 7 of Notes to Consolidated Financial Statements.

            The following table sets forth information concerning annual
weighted average interest rates on the Company's borrowed funds:

                    Annual Weighted Average Interest Rates

                                           Years ended December 31,
                                           ------------------------
                                           1998     1997      1996
                                           ----     ----      ----
      Savings accounts, certificates and
       deposits                           5.1%       5.1%     5.9%
      Short-term borrowings(1)            5.6%       5.6%     5.4%
      Long-term borrowings(2)             7.1%       7.1%     7.3%
      Total borrowings                    6.4%       6.6%     6.9%

----------
(1) Includes all commercial paper and short-term bank loans; does not include
    cost of maintaining bank credit lines.
(2) Includes current maturities of long-term debt and amortization of long-term
    debt expenses.

Taxation

            For a discussion of tax matters affecting the Company and its
operations, see Notes 1 and 10 of Notes to Consolidated Financial Statements.

Financial Information about Industry Segments

            For financial information regarding industry segments of the
Company, see Note 4 of Notes to Consolidated Financial Statements.

Item 2. PROPERTIES.

            The Company is engaged in the business of providing services that
are generally not dependent upon their physical plant. Offices and other
properties used by the Company and its subsidiaries are located throughout the
United States. Most office locations and other properties are leased on terms
and for durations that are reflective of commercial standards in the communities
where such offices and other properties are located. No office owned by the
Company is material to the Company's financial condition or operations.


                                       9
<PAGE>

            The Company believes its properties are adequate and suitable for
its business as presently conducted and are adequately maintained. For further
information concerning leases, see Note 15 of Notes to Consolidated Financial
Statements.

Item 3. LEGAL PROCEEDINGS.

            This section describes the major pending legal proceedings, other
than ordinary routine litigation incidental to the business, to which the
Company or its subsidiaries is a party or to which any of their property is
subject. Certain other pending matters previously reported by the Company are no
longer required to be disclosed herein.

            A number of cases have been filed against several consumer finance
companies relating to charges for various forms of insurance or for refinancing
of loans. The Company and some of its subsidiaries have been named as defendants
in these cases and have vigorously defended against the claims asserted by
plaintiffs and intend to continue to do so.

            In June 1994, a putative class action lawsuit, entitled Princess
Nobels, et al., v. Associates Corporation of North America, was filed against
the Alabama subsidiary of the Company in the U.S. District Court for the Middle
District of Alabama claiming that charges for non-filing insurance violate the
Truth in Lending Act and the Racketeer Influenced and Corrupt Organization Act.
In May 1996, an additional putative class action entitled Keckler v. Commercial
Credit Corporation was filed in the U.S. District Court for the Northern
District of Florida with similar allegations to the Nobels case. In February
1997, Keckler was transferred to the Middle District of Alabama pursuant to a
multi-district litigation plan and was consolidated for pre-trial purposes with
Nobels. Keckler seeks a nationwide class action with regard to the charges for
non-filing insurance by all of the Company's subsidiaries other than those in
Alabama. In November 1997, the plaintiffs in Nobels were granted leave to amend
the complaint to embrace a nationwide class, which is essentially duplicative of
the class described in Keckler. In September 1998, the court ordered the parties
to submit to mediation with a court-appointed mediator and has stayed all
proceedings in the action pending the outcome of the mediation process.

            Beginning in June 1994, a number of putative class actions have been
filed against the Alabama subsidiary of the Company alleging that premiums
charged on credit life insurance were excessive. These cases, which essentially
duplicate each other, are: Lawrence v. Commercial Credit Corporation, et al.,
filed in the Circuit Court of Jefferson County, Alabama in June 1994; Royster v.
Commercial Credit Corporation, et al., filed in the Circuit Court of Walker
County, Alabama in September 1995; Hughes v. Commercial Credit Corporation,
filed in the Circuit Court of Calhoun County, Alabama in July 1996; and Smith v.
Commercial Credit Corporation, filed in the Circuit Court of Walker County,
Alabama in December 1996. In December 1996, a settlement class was conditionally
certified in the Hughes case. But several decisions of the Alabama Supreme Court
cast doubt on whether that Court has jurisdiction to entertain the settlement in
Hughes. In the event that it is determined that the Court in Hughes does not
have jurisdiction, the Lawrence case will proceed.


                                       10
<PAGE>

            In October 1995, a putative class action entitled McCurdy v.
American General Finance was filed in the U.S. District Court for the Middle
District of Alabama on behalf of borrowers who purchased credit property
insurance from the Alabama subsidiary of the Company. The allegations in McCurdy
are similar to those in the above-referenced credit life cases. In May 1997, a
class of Alabama purchasers of credit property insurance between 1993 and 1996
was certified. As with the Hughes case discussed above, subsequent decisions of
the Alabama Supreme Court cast doubt on the viability of the claims in this
action.

            In September 1997, the Alabama subsidiary of the Company was named
as a defendant in a purported class action filed in the Circuit Court of Marengo
County, Alabama entitled Daniel, et al. v. Commercial Credit Corporation.
Plaintiffs assert claims for fraud and suppression of facts which defendant had
a duty to disclose in connection with the refinancing of loans or the supposed
practice of "flipping" loans. In January 1998, the Alabama Court of Civil
Appeals issued a decision which casts doubt on the viability of the plaintiff's
theory of liability in this case.

            On June 30, 1998, CC Finance System Inc. (formerly Security Pacific
Finance System Incorporated, "Security Pacific"), a subsidiary of the Company,
was served by Norwest Financial, Inc. ("Norwest") with a demand for arbitration
pursuant to a contract for data processing services between Security Pacific and
Norwest. The demand asserts a claim for approximately $42 million of damages as
a result of Security Pacific's alleged breach of the contract following the
acquisition of Security Pacific by the Company in July 1997. The arbitration
will be conducted in accordance with the rules and procedures of the American
Arbitration Association. The Company has vigorously defended against the claim
asserted by Norwest and intends to continue doing so.

            Because the nature of the business of the Company and its
subsidiaries involves the collection of numerous accounts, the validity of
liens, accident and other damage or loss claims under many types of insurance,
and the construction and interpretation of contracts, the Company and its
subsidiaries are plaintiffs and defendants in numerous legal proceedings. In the
opinion of the Company's management, none of these actions is expected to have a
material adverse effect on the consolidated financial condition of the Company
and its subsidiaries.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

            Pursuant to General Instruction I of Form 10-K, the information
required by Item 4 is omitted.

                                   PART II
                                   -------

Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

            All of the outstanding common stock of the Company is owned by CCC
Holdings, Inc., which is a wholly owned subsidiary of Citigroup.


                                       11
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

                   COMMERCIAL CREDIT COMPANY and SUBSIDIARIES
                  FIVE-YEAR SUMMARY OF SELECTED FINANCIAL DATA
                             In Millions of Dollars

<TABLE>
<CAPTION>
Year Ended December 31,(1)      1998        1997         1996        1995         1994
---------------------------  -----------  ----------  -----------  ----------   ----------
<S>                           <C>          <C>         <C>         <C>           <C>     
Total revenues (2)            $2,136.1     $1,741.1    $1,441.1    $1,392.4      $1,598.0

Net income (3)                  $285.7       $232.3      $187.5      $211.5        $221.4

December 31,
------------

Total assets                 $15,817.8    $12,953.2    $9,266.9    $8,555.3      $8,161.4
Total debt                   $12,463.6    $10,228.9    $7,333.9    $6,692.5      $6,388.1
</TABLE>

----------
(1)   The results of Security Pacific Financial Services are included only from
      July 31, 1997, the date of acquisition (see Note 3 of Notes to
      Consolidated Financial Statements).

(2)   On December 30, 1994 the Company sold its remaining 50% interest in
      Commercial Insurance Resources, Inc., the parent of Gulf Insurance Company
      (Gulf), and accordingly results of operations subsequent to 1994 do not
      include Gulf's results.

(3)   The year ended December 31, 1998 includes a restructuring charge of $1.0
      million after-tax.


                                       12
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION and ANALYSIS of FINANCIAL CONDITION 
                       and RESULTS of OPERATIONS

Consolidated Results of Operations

                                                  Year Ended December 31,
                                           ------------------------------------
In Millions of Dollars                        1998        1997        1996
-------------------------------------------------------------------------------
Total revenues, net of interest expense    $1,427.8    $1,167.0    $  965.6
                                           ====================================
Business income (1)                        $  286.7    $  232.3    $  187.5
                                           ====================================
Net income                                 $  285.7    $  232.3    $  187.5
                                           ====================================

(1) Excludes restructuring charge.

Results of Operations

The business income of Commercial Credit Company (the Company) for the year
ended December 31, 1998 was $286.7 million compared to $232.3 million in 1997
and $187.5 million in 1996. Total revenues, net of interest expense for the year
ended December 31, 1998 were $1,427.8 million compared to $1,167.0 million in
1997 and $965.6 million in 1996. Net income for 1998 includes a restructuring
charge of $1.0 million.

On July 31, 1997, the Company acquired Security Pacific Financial Services
(Security Pacific) from BankAmerica Corporation for a purchase price of
approximately $1.6 billion. The purchase included approximately $1.2 billion of
net consumer finance receivables and approximately $70 million of other net
assets. The excess of the purchase price over the estimated fair value of net
assets was $393.2 million and is being amortized over 25 years. The purchase
price for the transaction was financed primarily by the Company and by an equity
contribution by Citigroup of $520 million to the Company. This acquisition has
been accounted for as a purchase and accordingly the results of operations for
Security Pacific are included with those of the Company since its date of
acquisition.

The Company's main business segments include Consumer Finance Services and
Corporate and Other operations. Consumer Finance Services consists of Consumer
Finance and Credit Cards. Consumer Finance includes the consumer lending
operation (including secured and unsecured personal loans, real estate-secured
loans and consumer goods financing) of the Company. Also included are related
credit insurance services provided through subsidiaries. The credit card
operations of the Company are included in Credit Cards, and accordingly, all
data has been restated to reflect this. The following discussion presents in
more detail each segment's performance.


                                       13
<PAGE>

Consumer Finance

In Millions of Dollars                          1998         1997     1996
------------------------------------------------------------------------------
Total revenue, net of interest expense (1)   $ 1,337.5    $1,066.9   $ 917.1
Adjusted operating expense (2)                   504.0       422.0     316.0
                                             ---------------------------------
Operating margin                                 833.5       644.9     601.1
Credit costs (3)                                 418.6       315.9     296.0
                                             ---------------------------------
Business income before taxes                     414.9       329.0     305.1
Income taxes                                     151.4       116.0     105.9
                                             ---------------------------------
Business income                                  263.5       213.0     199.2
Restructuring charge, after-tax                    1.0          --        --
                                             =================================
Net income                                    $  262.5    $  213.0   $ 199.2
                                             =================================

(1)   Revenues and net income in 1996 includes a portion of the gain ($1.2
      million and $.7 million, respectively) from the disposition of RCM Capital
      Management, a California Limited Partnership (RCM).

(2)   Excludes restructuring charge.

(3)   Represents provision for credit losses and insurance claims expense.

Business income was $263.5 million in 1998 compared to $213.0 million in 1997
and $199.2 million in 1996. The 24% increase in 1998 reflects continued internal
receivables growth in all major products, an improved charge-off rate and the
integration of Security Pacific into the branch system since July 1997. The 7%
increase in 1997 reflects strong receivables growth in all major products,
largely as a result of investments made over the year in marketing, training and
systems enhancements. Net receivables at December 31, 1998 reached a record
$11.9 billion compared to $9.8 billion at year-end 1997 and $7.1 billion at
year-end 1996. Much of the growth in 1998 in real estate-secured loans resulted
from the continued strong performance of the $.M.A.R.T. loan(R) program, as well
as solid sales in the branch network. The receivables increase in 1997 reflects
strong internal growth as well as the July 31, 1997 acquisition of Security
Pacific, which contributed approximately $1.2 billion in receivables growth.
Internal sources grew receivables 22% over year-end 1996 levels. The growth
during 1998 and 1997 was led by the Primerica Financial Services generated
portfolio, which grew 31% to $2.95 billion in 1998 and 49% to $2.26 billion in
1997.

While total interest margin increased in 1998 from the 1997 and 1996 periods due
to the increase in the portfolio, average net interest margin declined 10 basis
points in 1998 to 8.46% and declined 46 basis points in 1997 to 8.56%,
reflecting a decline in the average yield to 14.88% in 1998 and 15.24% in 1997.
These declines were partially offset by a decrease in cost of funds over the
period. The decline in the average yield has resulted from a shift in the
portfolio mix towards lower yielding, higher quality real estate loans,
particularly first mortgage loans.

Consumer Finance borrows from the corporate treasury operations of the Company,
which raises funds externally. For fixed rate loan products, Consumer Finance is
charged agreed-upon rates that generally have been set within a narrow range.
For variable rate loan products, Consumer Finance is charged rates based on
prevailing short-term rates. The Company's actual cost of funds may be higher or
lower than rates 


                                       14
<PAGE>

charged to Consumer Finance, with the difference reflected in the Corporate and
Other segment. Overall rates charged to Consumer Finance approximated 6.42% in
1998, 6.68% in 1997 and 6.84% in 1996. Beginning in the 1998 fourth quarter,
Consumer Finance began to access Citibank's deposit funding through its thrift
subsidiary, Travelers Bank and Trust, fsb.

The net credit loss ratio of 2.74% in 1998 was down from 2.82% in 1997 and 3.14%
in 1996. As a result of the Security Pacific acquisition, net credit losses in
the second half of 1997 reflect a short-term benefit largely from the transition
of that portfolio to the Company's charge-off policies.

Restructuring charges associated with the merger of Citicorp with and into a
newly formed, wholly owned subsidiary of Travelers Group Inc. of $1.5 million
($1.0 million after tax) were recorded in the fourth quarter of 1998.

As of December 31, 1998, the Company had 980 branches, making it one of the
largest domestic branch networks in the consumer finance industry.

<TABLE>
<CAPTION>
                                                                As of, or for the
                                                              Year Ended, December 31,
                                                         --------------------------------
                                                            1998       1997       1996
                                                         --------------------------------
<S>                                                         <C>        <C>        <C>  
Allowance for credit losses as a % of net outstandings      3.10%      2.94%      3.01%
Charge-off rate for the year                                2.74%      2.82%      3.14%
60 + days past due on a contractual basis as a % of gross                         
  consumer finance receivables at year end                  1.90%      1.86%      1.80%
</TABLE>                                                                       

Insurance subsidiaries of the Company provide credit life, health and property
insurance to Consumer Finance customers. Premiums earned were $205.4 million in
1998, $173.6 million in 1997 and $152.4 million in 1995. The increase in
premiums year-over-year is the result of growth in underlying receivables and
expanded availability of certain products in additional states.

Credit Cards
In Millions of Dollars                         1998          1997     1996
----------------------------------------------------------------------------
Total revenue, net of interest expense        $117.5       $106.6   $ 84.6
Operating expense                               52.9         48.3     35.7
                                          ----------------------------------
Operating margin                                64.6         58.3     48.9
Provision for credit losses                     19.4         34.4     26.2
                                          ----------------------------------
Business income before taxes                    45.2         23.9     22.7
Income taxes                                    16.8          9.0      8.4
                                          ==================================
Net income                                    $ 28.4       $ 14.9   $ 14.3
                                          ==================================

Net income was $28.4 million in 1998 compared to $14.9 million in 1997 and $14.3
million in 1996. The 90% increase in net income in 1998 reflects continued
receivables growth and a reduction in the provision for credit losses in
relation to receivable levels resulting from improving charge-off and
delinquency rates. Net 


                                       15
<PAGE>

income for 1997 was unchanged from 1996. Net receivables at December 31, 1998
reached a record $1,399 million compared to $1,158 million at year-end 1997.
Much of the growth resulted from marketing initiatives, including introductory
rates.

The net interest margin for 1998 decreased to 3.96% from 5.45% in 1997 due
primarily to the use of introductory rates.

Like the Consumer Finance segment, Credit Cards borrows primarily from the
corporate treasury operations of Commercial Credit Company. Beginning in the
1998 fourth quarter, The Travelers Bank USA (the Company's state-chartered bank
subsidiary) began to access Citibank's deposit funding.

<TABLE>
<CAPTION>
                                                                  As of, or for the
                                                              Year Ended, December 31,
                                                         --------------------------------
                                                              1998      1997      1996
                                                         --------------------------------
<S>                                                            <C>       <C>       <C>  
Allowance for credit losses as a % of net outstandings         1.65%     2.88%     2.96%
Charge-off rate for the year                                   2.20%     2.66%     2.92%
60 + days past due on a contractual basis as a % of gross                        
  consumer finance receivables at year end                     0.66%     1.11%     1.04%
</TABLE>                                                                       

Asset Quality -- Consumer Finance Services assets totaled approximately $15.3
billion at December 31, 1998, of which $13.0 billion, or 85%, represented the
net consumer finance receivables (after accrued interest and the allowance for
credit losses). These receivables were predominantly residential real
estate-secured loans and personal loans. Receivable quality depends on the
likelihood of repayment and the value of underlying collateral, where
applicable. The Company seeks to reduce its risks by focusing on individual
lending, making a greater number of smaller loans than would be practical in
commercial markets, and maintaining disciplined control over the underwriting
process. In response to the high level of personal bankruptcies in the unsecured
market, the Company has shifted its portfolio mix toward higher quality real
estate loans, particularly first mortgage loans. The Company has a
geographically diverse portfolio as described in Note 6 of Notes to Consolidated
Financial Statements. The Company believes that its loss reserves on the
consumer finance receivables are appropriate given current circumstances.

Of the remaining Consumer Finance Services assets, approximately $1.1 billion
were investments of insurance subsidiaries, including $906 million of fixed
income securities and $99 million of short-term investments with a weighted
average quality rating of A1.

Outlook -- The Consumer Finance Services results over the last several years
have been influenced by a higher level of loan losses, as a result of a higher
level of personal bankruptcies. Consumer Finance Services is also affected by
the interest rate environment and general economic conditions. The lower
interest rate environment has resulted in modest downward pressure on interest
rates charged on new receivables secured by real estate and credit cards. For
the Company overall, however, these trends would be offset by the lower costs of
funds. From time to time low interest rates combined with aggressive competitor
pricing may increase the likelihood of prepayments of mortgage loans. This
impact has been mitigated by a number of programs instituted by the Company
including those designed to attract first mortgage business.


                                       16
<PAGE>

Corporate and Other
In Millions of Dollars                           1998       1997        1996
--------------------------------------------------------------------------------
Total revenue, net of interest expense (1)       $(27.2)    $( 6.5)  $   (36.1)
Operating expense                                 (15.4)     (11.4)        7.4
                                             -----------------------------------
Business income before income taxes               (11.8)       4.9       (43.5)
Income taxes                                      ( 6.6)        .5       (17.5)
                                             -----------------------------------
Net income (1)                                   $( 5.2)    $  4.4   $   (26.0)
                                             ===================================

(1)   Revenues and net income in 1997 include reported portfolio gains of $27.0
      million and $16.5 million, respectively. Revenues and net income in 1996
      include a portion of the gain ($1.6 million and $1.2 million,
      respectively) from the disposition of RCM.

The variance in Corporate and Other net expense (excluding reported portfolio
gains in 1997) in 1998 compared to 1997 is primarily attributable to the
resolution in 1998 of certain contingencies (including environmental
investigations) on terms more favorable than had been originally estimated.

The favorable variance in Corporate and Other net expense (excluding reported
portfolio gains in 1997 and the RCM gain in 1996) in 1997 compared to 1996 is
primarily attributable to increased earnings on a corporate investment and lower
interest cost borne at the corporate level.

Market Risk

The table below reflects the estimated change in the fair value of financial
instruments as a result of a 100 basis point increase in interest rates.

In Millions of Dollars                                                   1998
                                                                         ----
Assets
------
Investments                                                            $ (51.7)
Net consumer finance receivables                                         256.1

Liabilities
-----------
Long-term debt                                                         $(102.3)

Liquidity and Capital Resources

The Company issues commercial paper directly to investors and maintains unused
credit availability under committed revolving credit agreements at least equal
to the amount of commercial paper outstanding. The Company may borrow under its
revolving credit facilities at various interest rate options (LIBOR, CD, base
rate or money market) and compensates the banks for the facilities through
commitment fees.

Citigroup, the Company and The Travelers Insurance Company (TIC) have an
agreement with a syndicate of banks to provide $1.0 billion of revolving credit,
to be allocated to any of Citigroup, the Company or TIC. The revolving credit
facility consists of a five-year facility which expires in June 2001. Currently,
all 

                                       17
<PAGE>

of the facility is allocated to Citigroup. Citigroup and the Company also have
$450 million in 364-day facilities, $200 million which expires in August 1999
and $250 million which expired in March 1999 and may be allocated to either of
Citigroup or the Company. Currently, all of this facility is allocated to
Citigroup. In addition, the Company has committed and available revolving credit
facilities on a stand-alone basis of $4.75 billion consisting of $3.4 billion
that expires in 2002 and $1.35 billion that expires in July 1999.

The Company has unused credit availability of $4.75 billion under the revolving
credit facilities referred to above.

Two wholly owned subsidiaries of the Company have one year renewable funding
agreements totaling $8.0 billion with Citibank, N.A., a wholly owned subsidiary
of Citigroup. Approximately $5.0 billion is available under these agreements.

The Company is limited by covenants in its revolving credit agreements as to the
amount of dividends and advances that may be made to its parent or its
affiliated companies. At December 31, 1998, the Company would have been able to
remit $819.3 million to its parent under its most restrictive covenants.

During 1998 the Company completed the following long-term debt offering, leaving
$2.35 billion available for debt offerings and $400 million available for trust
security offerings under its shelf registration statements:

       o   6.25% Notes due January 1, 2008...........$300 million

In March 1998, Travelers Bank & Trust, fsb (formerly The Travelers Bank), a
subsidiary of the Company, and The Travelers Bank USA, also a subsidiary of the
Company, entered into a securitized transaction pursuant to which they
transferred approximately $356.5 million of their credit card receivables to an
affiliated special purpose corporation which transferred such receivables to a
trust. The trust sold to the public $227.5 million of securities securitized by
such receivables.

Year 2000

The arrival of the year 2000 poses a unique worldwide challenge to the ability
of time sensitive computer systems to recognize the date change from December
31, 1999 to January 1, 2000. The Company has assessed and is modifying its
computer systems and business processes to provide for their continued
functionality and is also assessing the readiness of third parties with which it
interfaces.

The Company is highly dependent on computer systems and system applications for
conducting its ongoing business functions. The inability of systems to recognize
properly the year 2000 could result in major systems failure or miscalculations
that would disrupt the Company's ability to meet its customer and other
obligations on a timely basis, and the Company has engaged in a process of
identifying, assessing, and modifying its computer programs to address this
issue. As part of and following achievement of year 2000 compliance, systems are
subjected to a process that validates the modified programs before they can be
used in production.


                                       18
<PAGE>

The pre-tax cost associated with the required modifications and conversions is
expected to total approximately $10 million through 1999, funded from a
combination of a reprioritization of technology development initiatives and
incremental costs. This is being expensed as incurred. Of the total,
approximately $6.4 million has been incurred to date, including approximately
$4.5 million in 1998.

Substantially all of the required modification and internal testing work has
been completed at year-end 1998, with the remainder scheduled for completion
early in 1999, leaving the rest of the year 1999 primarily for external testing,
full integration testing and production assurance. The Company is addressing
other technology-related matters including business applications to be sunset
(that is, removed from use in favor of replacement applications), end-user
computing applications, networks, data center systems, and the desktop
environment, and these are similarly progressing towards timely resolution.

The Company is also addressing year 2000 issues that may exist outside its own
technology activities, including its facilities and business processes, external
service providers, and other third parties with which it interfaces.
Substantially all of the Company's facilities and related systems have been
investigated, and modification is under way. Other business processes are
likewise being addressed across the Company.

Significant third parties with which the Company interfaces with regard to the
year 2000 problem include customers and counterparties, external service
providers, technology vendors, the global financial market infrastructure
including payment and clearing systems, and the utility infrastructure on which
all corporations rely. Unreadiness by these third parties would expose the
Company to the potential for loss, impairment of business processes and
activities, and disruption of financial markets. The Company is addressing these
risks through bilateral and multiparty efforts and participation in industry,
country, and global initiatives. While it is likely that efforts by third
parties to address and resolve their year 2000 issues on a timely basis will be
successful, it is possible that a series of failures by third parties could have
a material adverse effect on the Company's results of operations in future
periods.

The Company is creating contingency plans intended to address perceived risks
associated with its year 2000 effort. These activities include planning to
mitigate any risks associated with a failure to complete remediation of critical
systems, business resumption planning to address the possibility of systems
failure, and market resumption planning to address the possibility of failure of
systems or processes outside the Company's control. Contingency planning and
preparations for the management of the date change will continue through 1999.
Notwithstanding these activities, the failure of efforts to address in a timely
manner, the year 2000 problem, could have a material adverse effect on the
Company's results of operations in future years.

Forward-Looking Statements

Certain of the statements contained herein that are not historical facts are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act. The Company's actual results may differ materially from
those included in the forward-looking statements. In particular, the information
appearing in the Results of Operations section under the heading "Outlook" for
the Company's consumer finance services business segment is forward-looking.
These forward-looking statements involve risks and


                                       19
<PAGE>

uncertainties including, but not limited to, the following: changes in general
economic conditions, interest rates, and the level of personal bankruptcies;
customer responsiveness to both new products and distribution channels;
competitive, regulatory, or tax changes that affect the cost of or demand for
the Company's products; and adverse litigation results. Readers also are
directed to other risks and uncertainties discussed in documents filed by the
Company with the Securities and Exchange Commission.


                                       20
<PAGE>

Item 7A. QUALITATIVE AND QUANTITATIVE MARKET RISK DISCLOSURES.

            See Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Market Risk."

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

            See Index to Consolidated Financial Statements and Schedules on page
F-1 hereof. There is also incorporated by reference herein in response to this
Item the Company's Consolidated Financial Statements and the notes thereto and
the material under the caption "Quarterly Financial Data (Unaudited)" set forth
in the Consolidated Financial Statements.

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.

            Pursuant to General Instruction I of Form 10-K, the information
required by Item 10 is omitted.

Item 11. EXECUTIVE COMPENSATION.

            Pursuant to General Instruction I of Form 10-K, the information
required by Item 11 is omitted.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

            Pursuant to General Instruction I of Form 10-K, the information
required by Item 12 is omitted.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

            Pursuant to General Instruction I of Form 10-K, the information
required by Item 13 is omitted.


                                       21
<PAGE>

                                    PART IV
                                    -------

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

      (a)   Documents filed as a part of the report:

            (1)   Financial Statements. See Index to Consolidated Financial
                  Statements and Schedules on page F-1 hereof.

            (2)   Financial Statement Schedules. See Index to Consolidated
                  Financial Statements and Schedules on page F-1 hereof.

            (3)   Exhibits:

                  See Exhibit Index.

      (b)   Reports on Form 8-K:

      No reports on Form 8-K were filed by the Company during the fourth quarter
      of 1998.


                                       22
<PAGE>

                                 EXHIBIT INDEX
                                 -------------

Exhibit
Number      Description of Exhibit
------      ----------------------

3.01        Restated Certificate of Incorporation of Commercial Credit Company
            (the "Company"), included in Certificate of Merger of CCC Merger
            Company into the Company; Certificate of Ownership and Merger
            merging CCCH Acquisition Corporation into the Company; and
            Certificate of Ownership and Merger merging RDI Service Corporation
            into the Company, incorporated by reference to Exhibit 3.01 to the
            Company's Annual Report on Form 10-K for the fiscal year ended
            December 31, 1992 (File No. 1-6594).

3.02        By-laws of the Company, as amended May 14, 1990, incorporated by
            reference to Exhibit 3.02.2 to the Company's Annual Report on Form
            10-K for the fiscal year ended December 31, 1990 (File No. 1-6594).

4.01.1      Indenture, dated as of December 1, 1986 (the "Indenture"), between
            the Company and Citibank, N.A., relating to the Company's debt
            securities, incorporated by reference to Exhibit 4.01 to the
            Company's Annual Report on Form 10-K for the fiscal year ended
            December 31, 1988 (File No. 1-6594).

4.01.2      First Supplemental Indenture, dated as of June 13, 1990, to the
            Indenture, incorporated by reference to Exhibit 1 to the Company's
            Current Report on Form 8-K dated June 13, 1990 (File No. 1-6594).

4.01.3+     Agreement of Resignation, Appointment and Acceptance, dated as of
            December 16, 1998, by and among the Company, Citibank, N.A. and The
            First National Bank of Chicago.

10.01.1     Amended and Restated Credit Agreement dated as of June 28, 1996
            among the Company, the Banks party thereto and Morgan Guaranty Trust
            Company of New York, as Agent, incorporated by reference to Exhibit
            10.02 to the Company's Quarterly Report on Form 10-Q for the fiscal
            quarter ended June 30, 1996 (File No. 1-6594).

10.01.2     Amended and Restated Credit Agreement dated as of May 6, 1997 among
            the Company, the Banks party thereto and Morgan Guaranty Trust
            Company of New York, as Agent, incorporated by reference to Exhibit
            10.01.3 to the Company's Quarterly Report on Form 10-Q for the
            fiscal quarter ended March 31, 1997 (File No. 1-6594).

10.01.3     Amendment dated as of September 19, 1997 to the Amended and Restated
            Credit Agreement dated as of May 6, 1997 among the Company, the
            Banks party thereto and Morgan Guaranty Trust Company of New York,
            as Agent, incorporated by reference to Exhibit 10.01.3 to the
            Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
            September 30, 1997 (File No. 1-6594).


                                       23
<PAGE>

Exhibit
Number      Description of Exhibit
------      ----------------------

10.02.1     Five-Year Credit Agreement dated as of July 18, 1997 among the
            Company, the Banks party thereto and Morgan Guaranty Trust Company
            of New York, as Agent, incorporated by reference to Exhibit 10.01.3
            to the Company's Quarterly Report on Form 10-Q for the fiscal
            quarter ended June 30, 1997 (File No. 1-6594).

10.02.2+    Amended and Restated Credit Agreement dated as of July 10, 1998
            among the Company, the Banks party thereto and Morgan Guaranty Trust
            Company of New York, as Agent.

12.01+      Computation of Ratio of Earnings to Fixed Charges.

21.01       Pursuant to General Instruction I of Form 10-K, the list of
            subsidiaries of the Company is omitted.

23.01+      Consent of KPMG LLP, Independent Certified Public Accountants.

27.01+      Financial Data Schedule.

            The total amount of securities authorized pursuant to any other
instrument defining rights of holders of long-term debt of the Company does not
exceed 10% of the total assets of the Company and its consolidated subsidiaries.
The Company will furnish copies of any such instrument to the Securities and
Exchange Commission upon request.

            Copies of any of the exhibits referred to above will be furnished at
a cost of $.25 per page to security holders who make written request therefor to
Patricia A. Rouzer, Corporate Communications and Investor Relations, Commercial
Credit Company, 300 St. Paul Place, Baltimore, Maryland 21202.

----------
+ Filed herewith.


                                       24
<PAGE>

                                   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, on the
17th day of March, 1999.


                                           COMMERCIAL CREDIT COMPANY
                                           (Registrant)

                                           By: /s/ Marjorie Magner
                                               ---------------------------------
                                               Marjorie Magner, Chief Executive
                                               Officer and President

            Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the registrant
and in the capacities indicated on the 17th day of March, 1999.


             Signature                     Title

        /s/ Marjorie Magner                Chief Executive Officer (Principal
-----------------------------------        Executive Officer), President and
            Marjorie Magner                Director


        /s/ Irwin Ettinger                 Executive Vice President, Chief
-----------------------------------        Accounting Officer (Principal
            Irwin Ettinger                 Accounting Officer) and Director

     /s/ Raymond L. Fischer, Jr.           Executive Vice President and Chief
-----------------------------------        Financial Officer (Principal 
         Raymond L. Fischer, Jr.           Financial Officer)

     /s/ Robert B. Willumstad
-----------------------------------
         Robert B. Willumstad              Chairman of the Board and Director

        /s/ Robert I. Lipp
-----------------------------------
            Robert I. Lipp                 Director


                                       25
<PAGE>

                   COMMERCIAL CREDIT COMPANY and SUBSIDIARIES

            INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES*
--------------------------------------------------------------------------------

                                                                       Page
                                                                      Herein
                                                                      ------
Independent Auditors' Report                                            F-2

Consolidated Statement of Income for the years ended
December 31, 1998, 1997 and 1996                                        F-3

Consolidated Statement of Financial Position at
December 31, 1998 and 1997                                              F-4

Consolidated Statement of Changes in Stockholder's
Equity for the years ended December 31, 1998, 1997 and 1996             F-5

Consolidated Statement of Cash Flows for the years ended
December 31, 1998, 1997 and 1996                                        F-6

Notes to Consolidated Financial Statements                          F-7 - F-29

*Schedules  not listed are omitted as not  applicable  or not required by
Regulation S-X.


                                      F-1
<PAGE>

                          Independent Auditors' Report
                          ----------------------------

The Board of Directors and Stockholder
Commercial Credit Company:

We have audited the consolidated financial statements of Commercial Credit
Company and subsidiaries as listed in the accompanying index. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Commercial Credit
Company and subsidiaries as of December 31, 1998 and 1997, and the results of
their operations and their cash flows for each of the years in the three-year
period ended December 31, 1998 in conformity with generally accepted accounting
principles.


/s/ KPMG LLP

Baltimore, Maryland
January 25, 1999


                                      F-2
<PAGE>

                   COMMERCIAL CREDIT COMPANY and SUBSIDIARIES
                        Consolidated Statement of Income
                             In Millions of Dollars

Year Ended December 31,                         1998        1997        1996
--------------------------------------------------------------------------------
Revenues
Finance related interest and other charges     $1,744.1    $1,404.1    $1,163.2
Insurance premiums                                205.4       173.6       152.4
Interest and dividends                             64.5        71.7        54.7
Other income                                      122.1        91.7        70.8
--------------------------------------------------------------------------------
  Total revenues                                2,136.1     1,741.1     1,441.1
--------------------------------------------------------------------------------
Expenses
Interest                                          708.3       574.1       475.5
Policyholder benefits and claims                   68.2        61.2        49.5
Insurance underwriting, acquisition and
  operating                                        27.5        26.6        27.9
Non-insurance compensation and benefits           182.8       164.7       133.5
Provision for consumer finance credit losses      369.8       289.1       272.7
Restructuring charges                               1.5          --          --
Other operating                                   331.2       267.6       197.7
--------------------------------------------------------------------------------
   Total expenses                               1,689.3     1,383.3     1,156.8
--------------------------------------------------------------------------------
Income before income taxes                        446.8       357.8       284.3
Provision for income taxes                        161.1       125.5        96.8
--------------------------------------------------------------------------------
Net income                                     $  285.7    $  232.3    $  187.5
================================================================================

See Notes to Consolidated Financial Statements.


                                      F-3
<PAGE>

                   COMMERCIAL CREDIT COMPANY and SUBSIDIARIES
                  Consolidated Statement of Financial Position
                             In Millions of Dollars

<TABLE>
<CAPTION>
                                                                          1998         1997
----------------------------------------------------------------------------------------------
<S>                                                                    <C>          <C>      
Assets
Cash and cash equivalents                                              $    62.3    $    18.4
Investments:
   Fixed maturities                                                      1,089.6        926.8
   Equity securities                                                        77.2         74.4
   Short-term and other                                                     99.8         92.7
----------------------------------------------------------------------------------------------
  Total investments                                                      1,266.6      1,093.9
----------------------------------------------------------------------------------------------
Consumer finance receivables                                            13,394.2     11,031.5
Allowance for losses                                                      (392.7)      (321.4)
----------------------------------------------------------------------------------------------
Net consumer finance receivables                                        13,001.5     10,710.1
Other receivables                                                          158.1        198.5
Deferred policy acquisition costs                                            3.5          4.2
Cost of acquired businesses in excess of net assets                        470.7        476.8
Other assets                                                               855.1        451.3
----------------------------------------------------------------------------------------------
Total assets                                                           $15,817.8    $12,953.2
==============================================================================================
Liabilities
Certificates of deposit                                                $   322.2    $    57.3
Short-term borrowings                                                    5,891.4      3,871.6
Long-term debt                                                           6,250.0      6,300.0
----------------------------------------------------------------------------------------------
  Total debt                                                            12,463.6     10,228.9
Insurance policy and claims reserves                                       553.2        452.3
Accounts payable and other liabilities                                     684.2        486.0
----------------------------------------------------------------------------------------------
  Total liabilities                                                     13,701.0     11,167.2
----------------------------------------------------------------------------------------------
Stockholder's equity
Common stock ($.01 par value; authorized shares: 1,000; share issued
  and outstanding: 1)                                                         --           --
Additional paid-in capital                                                 736.1        685.1
Retained earnings                                                        1,358.8      1,089.1
Accumulated other changes in equity from nonowner sources                   21.9         11.8
----------------------------------------------------------------------------------------------
  Total stockholder's equity                                             2,116.8      1,786.0
----------------------------------------------------------------------------------------------
Total liabilities and stockholder's equity                             $15,817.8    $12,953.2
==============================================================================================
</TABLE>

See Notes to Consolidated Financial Statements.


                                      F-4
<PAGE>

                   COMMERCIAL CREDIT COMPANY and SUBSIDIARIES
            Consolidated Statement of Changes in Stockholder's Equity
                             In Millions of Dollars

<TABLE>
<CAPTION>
Year ended December 31,                                     1998       1997       1996
----------------------------------------------------------------------------------------
<S>                                                      <C>         <C>           <C>  
Common stock
----------------------------------------------------------------------------------------
Balance, beginning and end of year                      $     --    $     --    $     --
----------------------------------------------------------------------------------------
Additional paid-in capital
Balance, beginning of year                                 685.1       164.1       163.5
Capital contribution                                        51.0       521.0          .6
----------------------------------------------------------------------------------------
Balance, end of year                                       736.1       685.1       164.1
----------------------------------------------------------------------------------------
Retained earnings
Balance, beginning of year                               1,089.1     1,054.6       984.4
Adjustment for conforming  accounting methodologies           --          --       (52.3)
Net income                                                 285.7       232.3       187.5
Cash dividends                                             (16.0)     (197.8)      (65.0)
----------------------------------------------------------------------------------------
Balance, end of year                                     1,358.8     1,089.1     1,054.6
----------------------------------------------------------------------------------------
Accumulated other changes in equity from nonowner
  sources
Balance, beginning of year                                  11.8        (4.8)       15.0
Net change in unrealized gains and (losses)
  on investment securities, net of tax                      10.1        16.6       (19.8)
----------------------------------------------------------------------------------------
Balance, end of year                                        21.9        11.8        (4.8)
----------------------------------------------------------------------------------------
Total stockholder's equity                              $2,116.8    $1,786.0    $1,213.5
========================================================================================

Summary of Changes in Equity from Nonowner Sources:

Net income                                              $  285.7    $  232.3    $  187.5
Other changes in equity from nonowner sources, net of
  tax                                                       10.1        16.6       (19.8)
                                                        --------------------------------
Total changes in equity from nonowner sources           $  295.8    $  248.9    $  167.7
                                                        ================================
</TABLE>

See Notes to Consolidated Financial Statements.


                                      F-5
<PAGE>

                    COMMERCIAL CREDIT COMPANY and SUBSIDIARIES
                       Consolidated Statement of Cash Flows
                              In Millions of Dollars

<TABLE>
<CAPTION>
Year ended December 31,                                          1998        1997        1996
-----------------------------------------------------------------------------------------------
<S>                                                            <C>         <C>         <C>     
Cash flows from operating activities
Net income                                                     $  285.7    $  232.3    $  187.5
Adjustments to reconcile net income to net cash
  provided by (used in) operating activities:
     Amortization of deferred policy acquisition
       costs and value of insurance in force                        1.9         5.1         6.9
     Additions to deferred policy acquisition costs                (1.2)         --        (0.1)
     Depreciation and amortization                                 45.5        41.3        27.9
     Deferred tax provision                                         2.2       (14.7)      (14.5)
     Provision for consumer finance credit losses                 369.8       289.1       272.7
     Undistributed equity earnings                                  0.7        (0.8)       (0.8)
     Origination of loans held for sale                          (401.6)     (186.0)         --
     Sales of loans held for sale                                 227.5          --          --
     Changes in insurance policy and claims reserves              100.9        49.4        10.1
     Changes in other assets and liabilities, net                 (76.8)       (5.8)      102.5
     Other, net                                                    56.8       (88.2)      (34.2)
-----------------------------------------------------------------------------------------------
  Net cash provided by operating activities                       611.4       321.7       558.0
-----------------------------------------------------------------------------------------------
Cash flows from investing activities
Net change in credit card receivables                            (274.4)     (298.8)     (172.1)
Loans originated or purchased                                  (6,811.3)   (4,981.4)   (3,410.0)
Loans repaid or sold                                            4,332.0     3,208.0     2,534.4
Purchases of investments                                         (419.5)     (298.4)     (533.1)
Proceeds from sales of investments                                265.5       167.0       441.7
Proceeds from maturities of investments                             3.1         1.3         8.7
Business acquisitions                                                --    (1,617.6)      (11.7)
Business divestments                                                 --          --        23.0
Other, net                                                         83.6       237.6        36.1
-----------------------------------------------------------------------------------------------
  Net cash (used in) investing activities                      (2,821.0)   (3,582.3)   (1,083.0)
-----------------------------------------------------------------------------------------------
Cash flows from financing activities
Dividends paid                                                    (16.0)     (197.8)      (65.0)
Capital contribution                                               51.0       520.0          --
Issuance of long-term debt                                        300.0       900.0     1,000.0
Payments and redemptions of long-term debt                       (350.0)     (350.0)     (450.0)
Net change in short-term borrowings                             2,019.8     2,390.0        87.4
Net change in securities sold under agreements to repurchase      (16.2)       50.4         2.5
Net change in certificates of deposit                             264.9       (45.0)      (68.6)
-----------------------------------------------------------------------------------------------
  Net cash provided by financing activities                     2,253.5     3,267.6       506.3
-----------------------------------------------------------------------------------------------
Change in cash and cash equivalents                                43.9         7.0       (18.7)
Cash and cash equivalents at beginning of period                   18.4        11.4        30.1
-----------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                     $   62.3    $   18.4    $   11.4
===============================================================================================

Supplemental disclosure of cash flow information:
Cash paid during the period for interest                       $  666.9    $  556.1    $  467.7
Cash paid during the period for income taxes                   $  124.2    $  153.3    $  121.3
===============================================================================================
</TABLE>

See Notes to Consolidated Financial Statements.


                                      F-6
<PAGE>

                   COMMERCIAL CREDIT COMPANY and SUBSIDIARIES
                   Notes to Consolidated Financial Statements

1. Summary of Significant Accounting Policies

      Basis of Presentation

      Principles of Consolidation - Commercial Credit Company (the Company) is a
      wholly owned subsidiary of CCC Holdings, Inc., which is a wholly owned
      subsidiary of Citigroup Inc. (formerly Travelers Group Inc. and
      hereinafter referred to as Citigroup). The consolidated financial
      statements include the accounts of the Company and its subsidiaries.

      Unconsolidated entities in which the Company has at least a 20% interest
      are accounted for on the equity method. Significant intercompany
      transactions and balances have been eliminated.

      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.

      Certain reclassifications have been made to prior years' financial
      statements to conform to the current year's presentation. The financial
      statements include certain retroactive adjustments to conform accounting
      methodologies as a result of the merger of Citicorp with and into a newly
      formed, wholly owned subsidiary of Travelers Group Inc.

      Accounting Policies

      Cash and cash equivalents include cash on hand and short-term highly
      liquid investments with original maturities of three months or less, other
      than those held for sale in the ordinary course of business. These
      short-term investments are carried at cost plus accrued interest, which
      approximates market value.

      Investments are owned principally by the insurance subsidiaries. Fixed
      maturities include bonds, notes and redeemable preferred stocks. Equity
      securities include common and non-redeemable preferred stocks. Equity
      securities and fixed maturity securities are classified as "available for
      sale" and are carried at fair values that are based primarily on quoted
      market prices or if quoted market prices are not available, discounted
      expected cash flows using market rates commensurate with the credit
      quality and maturity of the investment. The difference between amortized
      cost and fair values of such securities net of applicable income taxes is
      included in "Accumulated other changes in equity from nonowner sources."
      Provisions are made to write down the value of fixed maturity securities
      for declines in value that are other than temporary. Short-term
      investments are carried at cost, which approximates fair value. 


                                      F-7
<PAGE>

      Realized gains and losses on sales of investments and unrealized losses
      considered to be other than temporary, determined on a specific
      identification basis, are included in other income.

      The cost of acquired businesses in excess of net assets (goodwill) is
      being amortized on a straight-line basis principally over a 25-year
      period. The carrying amount is regularly reviewed for indicators of
      impairment in value. Impairments would be recognized in operating results
      if a decline in value is deemed to have occurred.

      Income taxes. The Company and its domestic non-life insurance subsidiaries
      file a consolidated federal income tax return with Citigroup. A life
      insurance subsidiary files a separate federal income tax return. Deferred
      income taxes result from temporary differences between the tax basis of
      assets and liabilities and their recorded amounts for financial reporting
      purposes.

      Income taxes are not provided for on the Company's life insurance
      subsidiary's "policyholders' surplus" account because such taxes will
      become payable only to the extent amounts are distributed as a dividend or
      exceed limits prescribed by federal law. Distributions are not
      contemplated from this account, which aggregated $39.5 million (subject to
      a tax effect of $13.8 million) at December 31, 1998.

      Stock-based compensation. The Company along with affiliated companies
      participates in stock option and other stock-based incentive plans
      sponsored by Citigroup. The Company has elected to continue to account for
      its stock-based compensation plans using the accounting method prescribed
      by Accounting Principles Board Opinion No. 25, "Accounting for Stock
      Issued to Employees" (Opinion 25), and has included in the Notes to
      Consolidated Financial Statements the pro forma disclosures required by
      FAS No. 123, "Accounting for Stock-Based Compensation." (See Note 13).

      Finance receivables are reported at their outstanding unpaid principal
      balances reduced by any chargeoff or specific valuation accounts and net
      of any deferred fees or costs on originated loans, or unamortized premiums
      or discounts on purchased loans.

      Allowances for losses are established by direct charges to income in
      amounts sufficient to maintain the allowance at a level management
      determines to be adequate to cover losses in the portfolio. The allowance
      fluctuates based upon continual review of the loan portfolio and current
      economic conditions. For financial reporting purposes, finance receivables
      are considered delinquent when they are 60 days or more contractually past
      due. Income stops accruing on finance receivables when they are 90 days
      contractually past due. If payments are made on a finance receivable that
      is not accruing income, and the receivable is no longer 90 days
      contractually past due, the accrual of income resumes. Finance receivables
      are charged against the allowance for losses when considered
      uncollectible. Personal loans are considered uncollectible when payments
      are six months contractually past due and six months past due on a recency
      of payment basis. Loans that are twelve months contractually past due
      regardless of recency of payment are charged off. Recoveries on losses
      previously charged to the allowance are credited to the allowance at the
      time of recovery. Consideration of whether to proceed with


                                      F-8
<PAGE>

      foreclosure on loans secured by real estate begins when a loan is 60 days
      past due on a contractual basis. Real estate credit losses are recognized
      when the title to the property is obtained.

      Finance related interest and other charges are recognized as income using
      the level yield method. Fees received and direct costs incurred for the
      origination of loans are deferred and amortized over the contractual lives
      of the loans as part of interest income. The remaining unamortized
      balances are reflected in interest income at the time that the loans are
      paid in full, renewed or charged off.

      Premiums from short-duration insurance contracts are earned over the
      related contract period. Short-duration contracts include primarily
      property and casualty, credit life and accident and health credit
      policies. Benefits and expenses are associated with premiums by means of
      the provision for future policy benefits, unearned premiums and the
      deferral and amortization of policy acquisition costs.

      Deferred policy acquisition costs represent the costs of acquiring new
      business, principally commissions, certain underwriting and agency
      expenses and the cost of issuing policies. Acquisition costs of the life
      insurance subsidiary are amortized over the premium-paying periods of the
      related policies, in proportion to the ratio of the annual premium revenue
      to the total anticipated premium revenue. For certain property and
      casualty lines, acquisition costs (commissions and premium taxes) have
      been deferred to the extent recoverable from future earned premiums and
      anticipated investment income and are amortized ratably over the terms of
      the related policies. Deferred policy acquisition costs are reviewed to
      determine if they are recoverable from future income, including investment
      income, and if not recoverable are charged to expense. All other
      acquisition expenses are charged to operations as incurred.

      Insurance policy and claims reserves represent liabilities for future
      insurance policy benefits. Reserves for losses of the life insurance
      company are based on claims experience, actual claims reported and
      estimates of claims incurred but not reported. Assumptions are based on
      historical company experience, adjusted to provide for possible adverse
      deviation. These estimates are periodically reviewed and compared with
      actual experience and industry standards, and may be revised if it is
      determined that future experience will differ substantially from that
      previously assumed. Policy and contract claims include provisions for
      reported and unreported losses. Reserves for property and casualty
      insurance losses represent the estimated ultimate unpaid cost of all
      incurred property and casualty claims. Since the reserves are based on
      estimates, the ultimate liability may be more or less than such reserves.
      The effects of changes in such estimated reserves are included in the
      results of operations in the period in which the estimates are changed.

      Financial Instruments - Disclosures About Fair Value - Included in the
      Notes to Consolidated Financial Statements are various disclosures
      relating to the methods and assumptions used to estimate fair value of
      each material type of financial instrument. The carrying value of
      short-term financial instruments approximates fair value because of the
      relatively short period of time between the origination of the instruments
      and their expected realization. The carrying value of receivables and
      payables arising in the ordinary course of business approximates fair
      market 


                                      F-9
<PAGE>

      value. The fair value assumptions were based upon subjective estimates of
      market conditions and perceived risks of the financial instruments at a
      certain point in time. Disclosed fair values for financial instruments do
      not reflect any premium or discount that could result from offering for
      sale at one time the Company's entire holdings of a particular financial
      instrument. Potential taxes and other expenses that would be incurred in
      an actual sale or settlement are not reflected in amounts disclosed.

2. Change in Accounting Methodology

      On October 8, 1998, Citicorp merged with and into a newly formed, wholly
      owned subsidiary of Travelers Group Inc. The merger has been accounted for
      as a pooling of interests. As a result of conforming the accounting
      policies of Travelers Group Inc. and Citicorp, the Company has recorded an
      after-tax charge of $52.3 million to retained earnings as if the merger
      had occurred as of the beginning of the earliest period presented.

3. Business Acquisition

      On July 31, 1997, the Company acquired Security Pacific Financial Services
      (Security Pacific) from BankAmerica Corporation for a purchase price of
      approximately $1.6 billion. The purchase included approximately $1.2
      billion of net consumer finance receivables and approximately $70 million
      of other net assets. The excess of the purchase price over the estimated
      fair value of net assets was $393.2 million and is being amortized over 25
      years. The purchase price for the transaction was financed entirely by the
      Company, except for an equity contribution by Citigroup of $520 million to
      the Company. This acquisition has been accounted for as a purchase and
      accordingly the results of operations for Security Pacific are included
      with those of the Company since its date of acquisition.

4. Business Segment Information

      The Company, through its subsidiaries, is primarily engaged in the
      following businesses: Consumer Finance, Credit Cards, and Corporate and
      Other:

      The Consumer Finance segment includes consumer lending (including secured
      and unsecured personal loans, real estate-secured loans and consumer goods
      financing). Also included in this segment are credit-related insurance
      services provided through American Health and Life Insurance Company (AHL)
      and its affiliates.

      Credit Cards includes the credit card operations of the Company's one
      state bank chartered and one federally chartered savings bank.

      Corporate and Other consists of corporate staff and treasury operations, a
      hotel investment through its date of sale, the Company's investment in
      Citigroup's securities and certain corporate income and expenses that have
      not been allocated to the operating subsidiaries. Also included in the
      segment is the non-affiliated insurance business of AHL.


                                      F-10
<PAGE>

      The following tables presents certain information regarding these
      segments:

<TABLE>
<CAPTION>
                                      Total Revenues, Net
In Millions of Dollars                Of Interest Expense           Provision for Income Taxes
-----------------------------------------------------------------------------------------------
                              1998        1997         1996        1998        1997       1996
                            -------------------------------------------------------------------
<S>                         <C>         <C>         <C>         <C>         <C>        <C>     
Consumer Finance            $1,337.5    $1,066.9    $  917.1    $  151.4    $  116.0   $  105.9
Credit Cards                   117.5       106.6        84.6        16.8         9.0        8.4
Corporate and Other            (27.2)       (6.5)      (36.1)       (6.6)         .5      (17.5)
                            -------------------------------------------------------------------
Total                       $1,427.8    $1,167.0    $  965.6    $  161.6    $  125.5   $   96.8
                            ===================================================================

<CAPTION>
                                                                            Identifiable
In  Millions of Dollars                 Net Income (1)                   Assets at Year End 
--------------------------------------------------------------------------------------------------
                               1998          1997      1996        1998        1997         1996
                           -----------------------------------------------------------------------
<S>                        <C>          <C>         <C>          <C>         <C>         <C>      
Consumer Finance           $   262.5    $   213.0   $   199.2    $13,409.0   $11,146.5   $ 7,928.3
Credit Cards                    28.4         14.9        14.3      1,896.7     1,419.3       930.8
Corporate and Other             (5.2)         4.4       (26.0)       512.1       387.4       407.8
                           -----------------------------------------------------------------------
Total                      $   285.7    $   232.3   $   187.5    $15,817.8   $12,953.2   $ 9,266.9
                           =======================================================================
</TABLE>

(1)   Reflects after-tax restructuring charge of $1.0 million for the 1998
      period.

5. Investments

      Fair values of investments in fixed maturity securities are based on
      quoted market prices or dealer quotes or, if quoted market prices are not
      available, discounted expected cash flows using market rates commensurate
      with the credit quality and maturity of the investment.


                                      F-11
<PAGE>

The amortized cost and estimated market values of investments classified as
available for sale were as follows:

<TABLE>
<CAPTION>
                                           ------------------------------------------
                                                         Gross Unrealized    
                                             Amortized   ------------------     Fair
   December 31, 1998                          Cost       Gains      Losses     Value
   -----------------                       ------------------------------------------
<S>                                        <C>        <C>        <C>         <C>     
In Millions of Dollars

Fixed maturity securities
  Mortgage-backed securities principally
    obligations of U.S. Federal agencies   $  327.4   $    5.9   $   (0.6)   $  332.7
  U.S. Treasury and Federal Agency            159.4       15.7         --       175.1
  State and municipal                          72.4        3.3       (0.4)       75.3
  Foreign government                           14.8        0.7         --        15.5
  Corporate securities                        482.8        8.8       (0.6)      491.0
                                           ------------------------------------------
     Total fixed maturities                $1,056.8   $   34.4   $   (1.6)   $1,089.6
                                           ==========================================
Equity securities                          $   75.4   $    2.7   $    (.9)   $   77.2
                                           ==========================================
<CAPTION>

                                           ------------------------------------------
                                                         Gross Unrealized    
                                             Amortized   ------------------     Fair
   December 31, 1997                          Cost       Gains      Losses     Value
   -----------------                       ------------------------------------------
<S>                                        <C>        <C>        <C>         <C>     
In Millions of Dollars

Fixed maturity securities
 Mortgage-backed securities principally
  obligations of U.S. Federal agencies     $  236.9   $    3.1   $   (0.7)   $  239.3
 U.S. Treasury and Federal Agency             153.1        6.8       (0.2)      159.7
 State and municipal                           58.5        2.8         --        61.3
 Foreign governments                           14.8        0.2         --        15.0
 Corporate securities                         447.4        4.2       (0.1)      451.5
                                           ------------------------------------------
   Total fixed maturities                  $  910.7   $   17.1   $   (1.0)   $  926.8
                                           ==========================================
Equity securities                          $   71.8   $    3.7   $   (1.1)   $   74.4
                                           ==========================================
</TABLE>


                                      F-12
<PAGE>

      The amortized cost and estimated market value at December 31, 1998 by
      contractual maturity are shown below. Actual maturities will differ from
      contractual maturities because borrowers may have the right to call or
      prepay obligations with or without call or prepayment penalties.

                                                                   Estimated
                                                   Amortized        Market
   In Millions of Dollars                             Cost          Value
                                                   ---------      ---------
   U.S. Treasury and Federal Agency (1)
   Due within 1 year                               $    0.3         $  0.3
   After 1 but within 5 years                          37.5           38.7
   After 5 but within 10 years                         90.0           93.9
   After 10 years                                     232.3          246.4
                                                   ---------      ---------
      Total                                           360.1          379.3
                                                   ---------      ---------
   State and Municipal                                            
   Due within 1 year                                     --             --
   After 1 year but within 5 years                       --             --
   After 5 but within 10 years                          7.8            8.3
   After 10 years                                      64.6           67.0
                                                   ---------      ---------
         Total                                         72.4           75.3
                                                   ---------      ---------
   All Other                                                      
   Due within 1 year                                    7.9            7.9
   After 1 but within 5 years                          98.1           99.8
   After 5 but within 10 years                        175.1          181.1
   After 10 years                                     132.7          135.7
                                                   ---------      ---------
         Total                                        413.8          424.5
                                                   ---------      ---------
   Series Y Preferred Stock                           210.5          210.5
                                                   ---------      ---------
         Total                                     $1,056.8       $1,089.6
                                                   =========      =========

   (1) Includes mortgage-backed securities of federal agencies.

   Realized gains and losses on investment securities for the year ended
   December 31, were as follows:

   In Millions of Dollars         1998        1997        1996
                                --------    --------    --------
   Gross gains                     $4.6       $34.4       $13.2
   Gross losses                    (2.6)       (2.3)       (1.0)
                                --------    --------    --------
      Net                          $2.0       $32.1       $12.2
                                ========    ========    ========


                                      F-13
<PAGE>

6. Consumer Finance Receivables

   Consumer finance receivables, net of unearned finance charges of $769.5
   million and $716.1 million at December 31, 1998 and 1997, respectively,
   consisted of the following:

   In Millions of Dollars                           1998          1997
                                                 -----------    ----------
   Real estate-secured loans                     $ 6,625.5      $ 5,107.6
   Personal loans                                  4,270.6        3,831.5
   Credit cards                                    1,398.5        1,158.1
   Sales finance and other                           990.8          848.7
                                                 -----------    ----------
   Consumer finance receivables                   13,285.4       10,945.9
   Accrued interest receivable                       108.8           85.6
   Allowance for credit losses                      (392.7)        (321.4)
                                                 -----------    ----------
   Net consumer finance receivables              $13,001.5      $10,710.1
                                                 -----------    ----------

   An analysis of the allowance for credit losses on consumer finance
   receivables at December 31, was as follows:

<TABLE>
<CAPTION>
   In Millions of Dollars                           1998              1997            1996
                                                  ----------       -----------     ---------
  <S>                                             <C>              <C>             <C>     
   Balance, January 1                             $   321.4        $   239.3       $  192.5
   Provision for credit losses                        369.8            289.1          272.7
   Amounts written off                               (361.4)          (293.7)        (259.1)
   Recovery of amounts previously written off          39.3             31.1           27.1
   Allowance on receivables purchased                  23.6             55.6            6.1
                                                  ----------       -----------     ---------
   Balance, December 31                           $   392.7        $   321.4       $  239.3
                                                  ----------       -----------     ---------
   Consumer finance receivables                   $13,285.4        $10,945.9       $7,978.4
                                                  ==========       ===========     =========
   Ratio of allowance for credit losses to net                                    
   outstandings                                        2.96%            2.94%          3.00%
                                                  ==========       ===========     =========
</TABLE>                                                                       

   Contractual maturities of receivables before deducting unearned finance
   charges and excluding accrued interest were as follows:

<TABLE>
<CAPTION>
                           Receivables
                           Outstanding
                             December                                                                        Due
                               31,          Due          Due           Due          Due           Due       After
   In Millions of Dollars     1998          1999         2000          2001        2002          2003        2003
                          -----------------------------------------------------------------------------------------
<S>                         <C>          <C>          <C>          <C>          <C>          <C>          <C>      
Real estate-secured loans   $ 6,699.3    $   309.9    $   280.0    $   316.8    $   309.7    $   340.0    $ 5,142.9
Personal loans                4,912.6      1,323.9      1,187.9        924.4        579.2        297.9        599.3
Credit cards                  1,395.7        128.7        116.9        106.1         95.9         87.1        861.0
Sales finance and other       1,047.3        313.7         72.8         30.6         11.6          2.7        615.9
                          -----------------------------------------------------------------------------------------
    Total                   $14,054.9    $ 2,076.2    $ 1,657.6    $ 1,377.9    $   996.4    $   727.7    $ 7,219.1
                          =========================================================================================
Percentage                       100%          15%          12%          10%           7%           5%          51%
                          =========================================================================================
</TABLE>


                                      F-14
<PAGE>

      Contractual terms average 19 years on real estate-secured loans (excluding
      call provisions) and 5 years on personal loans. Experience has shown that
      a substantial amount of the receivables will be renewed or repaid prior to
      contractual maturity dates. Accordingly, the foregoing tabulation should
      not be regarded as a forecast of future cash collections.

      The Company has a geographically diverse consumer finance loan portfolio.
      At December 31, the distribution by state was as follows:

                                    1998             1997
                                   ------          -------
      
       Ohio                           9%             10%
       North Carolina                 7%              8%
       Pennsylvania                   7%              7%
       California                     6%              5%
       Texas                          5%              4%
       New York                       5%              4%
       South Carolina                 4%              5%
       All other states*             57%             57%
                                   =====           =====    
        Total                       100%            100%
                                   =====           =====    

      *     None of the remaining states individually accounts for more than 5%
            of total consumer finance receivables.

      The estimated fair value of the consumer finance receivables portfolio
      depends on the methodology selected to value such portfolio (i.e., exit
      value versus entry value). Exit value represents a valuation of the
      portfolio based upon sales of comparable portfolios and takes into account
      the value of customer relationships and the current level of funding
      costs. Under the exit value methodology, the estimated fair value of the
      receivables portfolio at December 31, 1998 is approximately $701 million
      above the recorded carrying value. Entry value is determined by comparing
      the portfolio yields to the yield at which new loans are being originated.
      Under the entry value methodology, the estimated fair value of the
      receivables portfolio at December 31, 1998 is approximately equal to the
      aggregate carrying value due to the increase in variable rate receivables
      whose rates are periodically reset and the fact that the average yield on
      fixed rate receivables is approximately equal to that on new fixed rate
      loans made at year-end 1998. Fair values included in Note 14 are based on
      the exit value methodology.


                                      F-15
<PAGE>

7. Debt

      Short-term borrowings

      At December 31, short-term borrowings and weighted average interest rates
      consisted of:

<TABLE>
<CAPTION>
                                        1998                            1997
                             --------------------------      ---------------------------
    In Millions of Dollars   Outstanding  Interest Rate      Outstanding   Interest Rate
                             -----------  -------------      -----------   -------------
    <S>                        <C>            <C>             <C>              <C>  
    Commercial paper           $2,907.6       5.35%           $3,871.6         5.83%
    Other borrowings           $2,983.8       4.99%           $     --           --%
                             =============                   ------------
                               $5,891.4                       $3,871.6
                             =============                   ============
</TABLE>

      The Company issues commercial paper directly to investors and maintains
      unused credit availability under its bank lines of credit at least equal
      to the amount of its outstanding commercial paper. The Company may borrow
      under its revolving credit facilities at various interest rate options
      (LIBOR, CD, base rate or money market) and compensates the banks for the
      facilities through commitment fees.

      Two wholly owned subsidiaries of the Company have entered into funding
      agreements with Citibank, N.A., a wholly owned subsidiary of Citigroup.
      Borrowings under these agreements may be at a fixed or variable rate and
      the rate is determined at the time of each borrowing. The agreements are
      renewable in one year increments and the aggregate amount outstanding
      cannot exceed $8.0 billion. At December 31, 1998, $2,983.8 billion was
      outstanding under these agreements.

      Citigroup, the Company and The Travelers Insurance Company (TIC) have a
      five-year revolving credit facility which expires in June 2001 with a
      syndicate of banks to provide $1.0 billion of revolving credit to be
      allocated to any of Citigroup, the Company or TIC. The participation of
      TIC in this agreement is limited to $250 million. At December 31, 1998,
      all of the facility was allocated to Citigroup. Citigroup and the Company
      also have $450 million in 364-day facilities, $200 million which expires
      in August 1999 and $250 million which expired in March 1999 and may be
      allocated to either Citigroup or the Company. At December 31, 1998, all
      $450 million was allocated to Citigroup.

      At December 31, 1998, the Company also had a committed and available
      revolving credit facility on a stand-alone basis of $4.75 billion,
      consisting of $3.4 billion in five year facilities which expire in 2002
      and $1.35 billion in a 364-day facility which expires in July 1999. The
      agreement contains covenants which provide for the maintenance of
      specified debt service ratios and minimum levels of net worth and other
      requirements consistent with bank lines of credit.

      The carrying value of short-term borrowings approximates fair value.

      Long-term debt

      Long-term debt, including its current portion, and final maturity dates
      were as follows at December 31:


                                      F-16
<PAGE>

    In Millions of Dollars                                 1998           1997
                                                           ----           ----

    5.70% Notes due 1998                                     --          100.0
    5.50% Notes due 1998                                     --          100.0
    8.50% Notes due 1998                                     --          100.0
    Floating Rate Note due 1998                              --           50.0
    6.70% Notes due 1999                                  150.0          150.0
    10% Notes due 1999                                    100.0          100.0
    9.6% Notes due 1999                                   100.0          100.0
    6% Notes due 2000                                     100.0          100.0
    5 3/4% Notes due 2000                                 200.0          200.0
    6 1/8% Notes due 2000                                 100.0          100.0
    6% Notes due 2000                                     150.0          150.0
    6 3/4% Notes due 2000                                 200.0          200.0
    5.55% Notes due 2001                                  200.0          200.0
    6.20% Notes due 2001                                  200.0          200.0
    8 1/4% Notes due 2001                                 300.0          300.0
    6 3/8% Notes due 2002                                 200.0          200.0
    6.45% Notes due 2002                                  300.0          300.0
    6 7/8% Notes due 2002                                 200.0          200.0
    7 3/8% Notes due 2002                                 200.0          200.0
    5 7/8% Notes due 2003                                 200.0          200.0
    5.9% Notes due 2003                                   200.0          200.0
    6.50% Notes due 2004                                  250.0          250.0
    7 7/8% Notes due 2004                                 200.0          200.0
    6 1/8% Notes due 2005                                 200.0          200.0
    6 1/2% Notes due 2005                                 200.0          200.0
    7 3/8% Notes due 2005                                 200.0          200.0
    7 3/4% Notes due 2005                                 200.0          200.0
    6.45% Notes due 2006 (a)                              200.0          200.0
    6 5/8% Notes due 2006                                 200.0          200.0
    6.75% Notes due 2007                                  300.0          300.0
    6.25 % Notes due 2008                                 300.0             --
    10% Notes due 2008                                    150.0          150.0
    10% Debentures due 2009                               100.0          100.0
    8.7% Debentures due 2009 (b)                          150.0          150.0
    8.7% Debentures due 2010 (c)                          100.0          100.0
    6 5/8% Notes due 2015 (d)                             200.0          200.0
    7 7/8% Notes due 2025 (e)                             200.0          200.0
                                                       --------       --------
                                                       $6,250.0       $6,300.0
                                                                
(a)   Redeemable at option of holder on October 18, 1999 at face amount.
(b)   Redeemable at option of holder on June 15, 1999 at face amount
(c)   Redeemable at option of holder on June 15 of each of 1999, 2002 or 2005 at
      face amount.
(d)   Redeemable at option of holder on June 1, 2002 at face amount. 
(e)   Redeemable at option of holder on February 1, 2005 at face amount.


                                      F-17
<PAGE>

      Aggregate annual maturities for the next five years on long-term debt
      obligations (based on final maturity dates) are as follows:

                              In Millions of Dollars
                                  1999                    $350.0  
                                  2000                     750.0  
                                  2001                     700.0  
                                  2002                     900.0  
                                  2003                     400.0  
                                  
      The fair value of the Company's long-term debt is estimated based on the
      quoted market price for the same or similar issues or on current rates
      offered to the Company for debt of the same remaining maturities. At
      December 31, 1998, the aggregate fair value of the Company's long-term
      debt was approximately $6.6 billion.

8. Reinsurance

      The Company's insurance subsidiaries participate in reinsurance in order
      to limit losses, to reduce exposure on large risks and to provide
      additional capacity for future growth. This is accomplished through
      various plans of reinsurance, primarily coinsurance, modified coinsurance
      and yearly renewable term. Reinsurance ceded arrangements do not discharge
      the insurance subsidiaries or the Company as the primary insurer.
      Reinsurance amounts included in the Consolidated Statement of Income were
      as follows:

                                                       Ceded to
                                           Gross         Other          Net
   In Millions of Dollars                  Amount      Companies       Amount
   Year ended December 31, 1998           -----------  ------------  -----------
   ----------------------------
   Premiums
      Credit life insurance                 $ 46.7     $    --        $   46.7
      Credit accident and health
        insurance                             75.0          --            75.0
      Credit property and other               87.3        (3.6)           83.7
                                         -----------  ------------  -----------
                                            $209.0     $  (3.6)       $  205.4
                                         ===========  ============  ===========
   Claims incurred                          $ 68.4     $   (.2)       $   68.2
                                         ===========  ============  ===========


                                      F-18
<PAGE>

                                                       Ceded to
                                           Gross         Other
   In Millions of Dollars                  Amount      Companies    Net Amount
                                         -----------  ------------  -----------
   Year ended December 31, 1997
   ----------------------------
   Premiums
      Credit life insurance                $  40.2      $    --       $  40.2
      Credit accident and health
        insurance                             64.8           --          64.8
      Credit property and other               77.1         (8.5)         68.6
                                         -----------  ------------  -----------
                                           $ 182.1      $  (8.5)      $ 173.6
                                         ===========  ============  ===========
   Claims incurred                         $  61.9      $  (0.7)      $  61.2
                                         ===========  ============  ===========

   Year ended December 31, 1996
   ----------------------------
   Premiums
      Credit life insurance                $  38.5      $    --       $  38.5
      Credit accident and health
        insurance                             57.4           --          57.4
      Credit property and other               84.0        (27.5)         56.5
                                         -----------  ------------  -----------
                                           $ 179.9      $ (27.5)      $ 152.4
                                         ===========  ============  ===========
   Claims incurred                         $  52.3      $  (2.8)      $  49.5
                                         ===========  ============  ===========

9. Restructuring Charges

      In December 1998 the Company recorded a restructuring charge of $1.5
      million resulting from the destruction of inventory due to the name change
      of the parent company from Travelers Group Inc. to Citigroup as part of
      the merger of Citicorp with and into a newly formed, wholly owned
      subsidiary of Travelers Group Inc.


                                      F-19
<PAGE>

10. Income Taxes

      The provision for income taxes for the year ended December 31, was as
      follows:

   In Millions of Dollars             1998       1997       1996
                                     --------  ---------  ---------
   Current:
     Federal                          $145.4    $129.4     $103.4
     State                              13.5      10.8        7.9
                                     --------  ---------  ---------
                                       158.9     140.2      111.3
                                     --------  ---------  ---------

   Deferred:
     Federal                             4.2     (13.6)     (13.6)
     State                              (2.0)     (1.1)      (0.9)
                                     --------  ---------  ---------
                                         2.2     (14.7)     (14.5)
                                     --------  ---------  ---------
     Total                            $161.1    $125.5      $96.8
                                     ========  =========  =========

      The reconciliation of the federal statutory income tax rate to the
      Company's effective income tax rate for the year ended December 31, was as
      follows:

                                      1998       1997       1996
                                     --------  ---------  ---------
   Federal statutory rate              35.0%     35.0%      35.0%
   Other, net                           1.1       0.1       (1.0)
                                     --------  ---------  ---------
   Effective income tax rate           36.1%     35.1%      34.0%
                                     ========  =========  =========


                                      F-20
<PAGE>

   Deferred income taxes at December 31, related to the following:

   In Millions of Dollars                    1998          1997
                                           ----------    ---------
   Deferred tax assets:                                 
     Credit loss deduction                   $171.0        $151.9
     Differences in computing                           
       policy reserves                         16.0          14.1
     Employee benefits                         11.0          11.6
     Other reserves                            22.4          15.5
     Other deferred tax assets                 31.6          45.4
                                           ----------    ---------
                                              252.0         238.5
                                           ----------    ---------
   Deferred tax liabilities:                            
     Lease obligations and fixed assets       (17.0)        (15.1)
     Investments                              (22.5)        (16.5)
     Interest related items                    (5.0)         (3.2)
     Other deferred tax liabilities           (19.2)        (20.6)
                                           ----------    ---------
                                              (63.7)        (55.4)
                                           ==========    =========
   Total                                     $188.3        $183.1
                                           ==========    =========
                                                      

      The Company and its wholly owned domestic non-life insurance subsidiaries
      join with Citigroup in filing a consolidated federal income tax return.
      Under a tax sharing agreement with Citigroup, the Company is entitled to a
      current tax benefit if it incurs losses which are utilized in Citigroup's
      consolidated return. Citigroup's consolidated tax return has reported
      large amounts of taxable income in recent years and can, more likely than
      not, expect to have significant taxable income in the future thereby
      enabling utilization of the Company's deferred tax assets.

11. Stockholder's Equity

      Certain long-term credit agreements restrict the payment of dividends with
      such restrictions based on cumulative net earnings, as defined.
      Additionally, a minimum net worth restriction, as defined, contained in
      such agreements imposes an additional constraint on dividends. At December
      31, 1998, the Company would be able to remit $819.3 million in dividends
      to its parent under the most restrictive covenants.

      The combined insurance subsidiaries' statutory stockholder's equity at
      December 31, 1998 and 1997 was $256.3 million and $199.3 million,
      respectively, and is subject to certain restrictions imposed by state
      insurance departments as to the transfer of funds and payment of
      dividends. 


                                      F-21
<PAGE>

      The combined insurance subsidiaries' net income determined in accordance
      with statutory accounting practices for the years ended December 31, 1998,
      1997 and 1996 was $67.3 million, $68.3 million and $66.6 million,
      respectively.

12. Changes in Equity from Nonowner Sources

      Effective January 1, 1998, the Company adopted SFAS No. 130, "Reporting
      Comprehensive Income" (SFAS No. 130), which established standards for the
      reporting and display of equity from nonowner sources and its components
      in a full set of general purpose financial statements. Equity from
      nonowner sources and its components have been reported, net of tax in the
      Consolidated Statement of Changes in Stockholder's Equity with all earlier
      periods restated to reflect the adoption of SFAS No. 130.

      Accumulated Other Changes in Equity from Nonowner Sources for the
      three-year period ended December 31, 1998 are as follows:

<TABLE>
<CAPTION>
                                                    Net Unrealized     Accumulated
                                                       Gains on       Other Changes
                                                      Investment      in Equity from
   In Millions of Dollars                             Securities     Nonowner Sources
-------------------------------------------------------------------------------------
<S>                                                     <C>               <C>  
Balance, January 1, 1996                                $15.0             $15.0
  Unrealized losses on investment  securities arising                     
      during the year, net of tax of $(6.3)             (11.9)            (11.9)
  Less: Reclassification adjustment for gains                             
      included in net  income,  net of tax of $4.3       (7.9)             (7.9)
                                                        -----             -----
  Current-period change                                 (19.8)            (19.8)
                                                        -----             -----
Balance, December 31, 1996                               (4.8)             (4.8)
  Unrealized  gains on investment securities arising                      
      during the year, net of tax of $20.1               37.5              37.5
  Less: Reclassification adjustment for gains                             
      included in net  income,  net of tax of $11.2     (20.9)            (20.9)
                                                        -----             -----
  Current-period change                                  16.6              16.6
                                                        -----             -----
Balance, December 31, 1997                               11.8              11.8
  Unrealized gains on investment securities arising                       
      during the year, net of tax of $6.2                11.4              11.4
  Less: Reclassification adjustment for gains                             
      included in net  income,  net of tax of $.7        (1.3)             (1.3)
                                                        -----             -----
  Current-period change                                  10.1              10.1
                                                        -----             -----
Balance, December 31, 1998                              $21.9             $21.9
                                                        =====             =====
</TABLE>


                                      F-22
<PAGE>

13. Employee Benefit Plans

      Pension plans

      The Company, along with affiliated companies, participates in a
      noncontributory defined benefit pension plan sponsored by Citigroup (the
      Plan) covering the majority of U.S. employees. Benefits are based on an
      account balance formula. Under this formula, each employee's accrued
      benefit can be expressed as an account that is credited with amounts based
      upon the employee's pay, length of service and a specified interest rate,
      all subject to a minimum benefit level. The Plan is funded in accordance
      with the Employee Retirement Income Security Act of 1974 and the Internal
      Revenue Code. Pension costs allocated to the Company related to the Plan
      were $1.3 million, $1.6 million and $1.3 million in 1998, 1997 and 1996,
      respectively.

      The Company also has an unfunded noncontributory supplemental retirement
      plan that covers certain executives and key employees. Pension costs
      related to this plan were $0.8 million, $0.8 million and $0.6 million in
      1998, 1997 and 1996, respectively.

      Stock option plan

      The Company participates in a stock option plan sponsored by Citigroup
      that provides for the granting of stock options in Citigroup common stock
      to officers and key employees. The Company applies Accounting Principles
      Board Opinion 25 and related interpretations in accounting for stock
      options. Since stock options are issued at fair market value on the date
      of award, no compensation cost has been recognized for these awards. FAS
      No. 123, "Accounting for Stock-Based Compensation" provides an alternative
      to Opinion 25 whereby fair values may be ascribed to options using a
      valuation model and amortized to compensation cost over the vesting period
      of the options. Had the Company applied FAS No. 123 in accounting for
      stock options, net income would have been reduced by $7.2 million, $4.8
      million and $2.1 million in 1998, 1997 and 1996, respectively.

      The assumptions used in calculating the pro forma expense amounts are
      presented below:

<TABLE>
<CAPTION>
                                                       1998         1997          1996
                                                    -----------  -----------   -----------
      <S>                                              <C>         <C>         <C>  
      Expected volatility of Citigroup stock              35.5%       32.1%       28.3%
      Risk-free interest rate                             4.85%       5.77%       5.78%
      Expected  annual Citigroup  dividends per share   $ 0.65      $ 0.47      $ 0.37
      Expected annual forfeiture rate                        5%          5%          5%
</TABLE>                                                                      

14. Fair Value of Financial Instruments

      The following table summarizes the fair value and carrying amount of the
      Company's financial instruments at December 31, 1998 and 1997. The fair
      value assumptions were based upon subjective estimates of market
      conditions and perceived risks of the financial instruments at 


                                      F-23
<PAGE>

      a certain point in time as disclosed further in various notes to the
      consolidated financial statements. Disclosed fair values for financial
      instruments do not reflect any premium or discount that could result from
      offering for sale at one time the Company's entire holdings of a
      particular financial instrument. Potential taxes and other expenses that
      would be incurred in an actual sale or settlement are not reflected in
      amounts disclosed.

<TABLE>
<CAPTION>
                                                   1998                    1997
                                       ---------------------------  ------------------------
                                         Carrying                    Carrying
    In Millions of Dollars                Amount       Fair Value     Amount     Fair Value
                                          ------       ----------    ------      ----------
<S>                                      <C>           <C>          <C>         <C>       
    Assets:
      Investments
      Net consumer finance receivables   $ 1,266.6     $ 1,266.6    $  1,093.9  $  1,093.9
                                         $13,001.5     $13,702.3     $10,710.1   $11,322.1
    Liabilities:
      Long-term debt                     $ 6,250.0     $ 6,607.2     $ 6,300.0  $  6,515.0
</TABLE>

15.   Lease Commitments and Other Financial Instruments

      Rentals

      Rental expense (principally for offices and computer equipment) was $33.8
      million, $31.3 million and $28.1 million for the years ended December 31,
      1998, 1997 and 1996, respectively.

      At December 31, 1998, future minimum annual rentals under noncancellable
      operating leases were as follows:

            In Millions of Dollars        
            1999                                       $25.7
            2000                                        20.0
            2001                                        14.6
            2002                                         7.0
            2003                                         2.8
            Thereafter                                   0.4
                                                      =======
                                                       $70.5
                                                      =======
 
      Credit Cards

      The Company provides bank and private label credit card services through
      its subsidiaries. These services are provided to individuals and to
      affinity groups nationwide. At December 31, 1998 and 1997, total credit
      lines available to credit cardholders were $13.3 billion and $10.1
      billion, respectively.


                                      F-24
<PAGE>

16. Related Party Transactions

      To facilitate cash management the Company has entered into an agreement
      with Citigroup under which the Company or Citigroup may borrow from the
      other party at any time an amount up to the greater of $50.0 million or 1%
      of the Company's consolidated assets up to a maximum of $100.0 million.
      The agreement may be terminated by either party at any time. The interest
      rate to be charged on borrowings outstanding will be equivalent to an
      appropriate market rate.

      Two wholly owned subsidiaries of the Company have entered into funding
      agreements with Citibank, N.A., a wholly owned subsidiary of Citigroup.
      Borrowings under these agreements are renewable in one year increments and
      the aggregate amount outstanding cannot exceed $8.0 billion. At December
      31, 1998, approximately $3.0 billion was outstanding under these
      agreements.

      The Company owns (directly and through a subsidiary) 2,105 shares of
      Citigroup Cumulative Adjustable Rate Preferred Stock, Series Y, with a
      liquidation value of $100,000 per share, which is redeemable at the option
      of the Company at certain times and callable by Citigroup at certain
      times. At December 31, 1998 and 1997, this investment is included in
      "fixed maturities - available for sale" and is reflected at a carrying
      amount of $210.5 million. During 1998, 1997 and 1996, the Company recorded
      $8.7 million, $10.3 million and $10.2 million, respectively, of dividend
      income from this investment.

17. Contingencies

      In the ordinary course of business the Company and/or its subsidiaries are
      defendants or co-defendants in various litigation matters. Although there
      can be no assurances, the Company believes, based on information currently
      available, that the ultimate resolution of these legal proceedings would
      not be likely to have a material adverse effect on its results of
      operations, financial condition or liquidity.

18. Subsequent Event

      A subsidiary of the Company has entered into an agreement to purchase 128
      consumer finance branches from Associates First Capital Corporation. The
      transaction is expected to be finalized in late March 1999.


                                      F-25
<PAGE>

19. Commercial Credit Company (Parent Company Only)

Condensed Statement of Income

<TABLE>
<CAPTION>
                                                         Year Ended December 31,
In Millions of Dollars                                1998        1997        1996
---------------------------------------------------------------------------------------
<S>                                                  <C>         <C>         <C>   
Revenues                                             $626.1      $533.2      $439.0
---------------------------------------------------------------------------------------
Expenses
Interest                                              670.7       570.5       471.5
Other                                                 (13.4)       (7.0)        9.9
---------------------------------------------------------------------------------------
   Total                                              657.3       563.5       481.4
---------------------------------------------------------------------------------------
Pre-tax loss                                          (31.2)      (30.3)      (42.4)
Income tax benefit                                     13.9        13.3        17.6
---------------------------------------------------------------------------------------
Loss before equity in net income of subsidiaries      (17.3)      (17.0)      (24.8)
Equity in net income of subsidiaries                  303.0       249.3       212.3
---------------------------------------------------------------------------------------
Net income                                           $285.7      $232.3      $187.5
=======================================================================================
</TABLE>


                                      F-26
<PAGE>

Condensed Statement of Financial Position

<TABLE>
<CAPTION>
                                                                      December 31.
In Millions of Dollars                                              1998        1997
-----------------------------------------------------------------------------------------
<S>                                                              <C>         <C>      
Assets
Investment in securities of Citigroup                            $   179.2   $   179.2
Notes and accounts receivable from subsidiaries-eliminated
  in consolidation                                                 9,770.3    10,800.7
Investment in subsidiaries at cost plus equity in net
  earnings-eliminated in consolidation                             1,477.3     1,110.4
Other                                                                 75.3        67.7
-----------------------------------------------------------------------------------------
  Total assets                                                   $11,502.1   $12,158.0
=========================================================================================
Liabilities
Short-term borrowings                                            $ 2,907.6   $ 3,871.6
Long-term debt                                                     6,250.0     6,300.0
Accrued expenses and other liabilities                               227.7       200.4
-----------------------------------------------------------------------------------------
  Total liabilities                                                9,385.3    10,372.0
-----------------------------------------------------------------------------------------
Stockholder's equity
Common stock ($.01 par value; authorized shares: 1,000; share
  issued and outstanding: 1)                                            --          --
Additional paid-in capital                                           736.1       685.1
Retained earnings                                                  1,358.8     1,089.1
Accumulated other changes in equity from nonowner sources             21.9        11.8
-----------------------------------------------------------------------------------------
  Total stockholder's equity                                       2,116.8     1,786.0
-----------------------------------------------------------------------------------------
Total liabilities and stockholder's equity                       $11,502.1   $12,158.0
=========================================================================================
</TABLE>


                                      F-27
<PAGE>

Condensed Statement of Cash Flows

<TABLE>
<CAPTION>
                                                                             Year ended December 31,
In Millions of Dollars                                                    1998       1997         1996
--------------------------------------------------------------------------------------------------------
<S>                                                                    <C>      <C>       <C>           
Cash Flows From Operating Activities
Loss from operations before equity in net income of subsidiaries       $ (17.3)    $  (17.0)   $  (24.8)
Adjustment to reconcile loss from operations before equity in net
  income of subsidiaries to net cash provided by (used in) operating
  activities
     Undistributed equity earnings                                           --        (0.1)       (0.8)
     Dividends received from subsidiaries                                  55.7        64.9        72.2
     Net (advances to)/repayments from subsidiaries                       951.6    (1,827.4)     (576.9)
     Other, net                                                            (1.7)      (91.0)      (53.7)
--------------------------------------------------------------------------------------------------------
Net cash used in operating activities                                     988.3    (1,870.6)     (584.0)
--------------------------------------------------------------------------------------------------------
Cash Flows From Investing Activities
Business acquisitions                                                        --    (1,617.6)      (18.1)
Sale of investments                                                          --       218.5          --
Business divestment                                                          --          --        16.6
Other, net                                                                   --         7.9        12.9
--------------------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities                          --    (1,391.2)       11.4
--------------------------------------------------------------------------------------------------------
Cash Flows From Financing Activities
Net change in short-term borrowings                                      (964.0)    2,390.0        87.3
Issuance of long-term debt                                                300.0       900.0     1,000.0
Payments and redemptions of long-term debt                               (350.0)     (350.0)     (450.0)
Capital contribution                                                       51.0       520.0          --
Dividends paid                                                            (16.0)     (197.8)      (65.0)
--------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities                      (979.0)    3,262.2       572.3
--------------------------------------------------------------------------------------------------------
Change in cash and cash equivalents                                         9.3         0.4        (0.3)
Cash and cash equivalents at beginning of period                            3.9         3.5         3.8
--------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                             $   13.2    $    3.9    $    3.5
========================================================================================================
Supplemental disclosure of cash flow information:
Cash paid during the period for interest                               $  659.9    $  544.8    $  460.9
Cash paid during the period for income taxes                           $   28.8    $   43.6    $   43.5
========================================================================================================
</TABLE>


                                      F-28
<PAGE>

20.   Selected Quarterly Financial Data (unaudited)


                                                        1998
                                  ----------------------------------------------
In Millions of Dollars                First  Second   Third   Fourth    Total
                                  ----------------------------------------------
Total revenues                    $  487.0  $ 516.3  $ 544.4  $ 588.4  $2,136.1
Total revenues, net of interest
  expense                            320.2    342.4    362.9    402.3   1,427.8
Total expenses(1)                    236.6    240.3    244.8    259.3     981.0
Income before income taxes(1)         83.6    102.1    118.1    143.0     446.8
Provision for income taxes            29.9     36.8     42.9     51.5     161.1
                                  ----------------------------------------------
Net income(1)                     $   53.7  $  65.3  $  75.2  $  91.5  $  285.7
                                  ==============================================

                                                        1997
                                  ----------------------------------------------
In Millions of Dollars                First  Second   Third   Fourth    Total
                                  ----------------------------------------------
Total revenues                    $  373.7  $ 398.6  $ 483.9  $ 484.9  $1,741.1
Total revenues, net of interest
  expense                            248.4    265.3    331.7    321.6   1,167.0
Total expenses                       182.1    189.7    213.0    224.4     809.2
Income before income taxes            66.3     75.6    118.7     97.2     357.8
Provision for income taxes            22.8     26.0     42.7     34.0     125.5
                                  ----------------------------------------------
Net income                        $   43.5  $  49.6  $  76.0  $  63.2  $  232.3
                                  ==============================================

(1)   The fourth quarter of 1998 includes a restructuring charge of $1.5 million
      ($1.0 million after tax).


                                      F-29
<PAGE>

                                 EXHIBIT INDEX
                                 -------------

Exhibit
Number      Description of Exhibit
------      ----------------------

3.01        Restated Certificate of Incorporation of Commercial Credit Company
            (the "Company"), included in Certificate of Merger of CCC Merger
            Company into the Company; Certificate of Ownership and Merger
            merging CCCH Acquisition Corporation into the Company; and
            Certificate of Ownership and Merger merging RDI Service Corporation
            into the Company, incorporated by reference to Exhibit 3.01 to the
            Company's Annual Report on Form 10-K for the fiscal year ended
            December 31, 1992 (File No. 1-6594).

3.02        By-laws of the Company, as amended May 14, 1990, incorporated by
            reference to Exhibit 3.02.2 to the Company's Annual Report on Form
            10-K for the fiscal year ended December 31, 1990 (File No. 1-6594).

4.01.1      Indenture, dated as of December 1, 1986 (the "Indenture"), between
            the Company and Citibank, N.A., relating to the Company's debt
            securities, incorporated by reference to Exhibit 4.01 to the
            Company's Annual Report on Form 10-K for the fiscal year ended
            December 31, 1988 (File No. 1-6594).

4.01.2      First Supplemental Indenture, dated as of June 13, 1990, to the
            Indenture, incorporated by reference to Exhibit 1 to the Company's
            Current Report on Form 8-K dated June 13, 1990 (File No. 1-6594).

4.01.3+     Agreement of Resignation, Appointment and Acceptance, dated as of
            December 16, 1998, by and among the Company, Citibank, N.A. and The
            First National Bank of Chicago.

10.01.1     Amended and Restated Credit Agreement dated as of June 28, 1996
            among the Company, the Banks party thereto and Morgan Guaranty Trust
            Company of New York, as Agent, incorporated by reference to Exhibit
            10.02 to the Company's Quarterly Report on Form 10-Q for the fiscal
            quarter ended June 30, 1996 (File No. 1-6594).

10.01.2     Amended and Restated Credit Agreement dated as of May 6, 1997 among
            the Company, the Banks party thereto and Morgan Guaranty Trust
            Company of New York, as Agent, incorporated by reference to Exhibit
            10.01.3 to the Company's Quarterly Report on Form 10-Q for the
            fiscal quarter ended March 31, 1997 (File No. 1-6594).

10.01.3     Amendment dated as of September 19, 1997 to the Amended and Restated
            Credit Agreement dated as of May 6, 1997 among the Company, the
            Banks party thereto and Morgan Guaranty Trust Company of New York,
            as Agent, incorporated by reference to Exhibit 10.01.3 to the
            Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
            September 30, 1997 (File No. 1-6594).
<PAGE>

Exhibit
Number      Description of Exhibit
------      ----------------------

10.02.1     Five-Year Credit Agreement dated as of July 18, 1997 among the
            Company, the Banks party thereto and Morgan Guaranty Trust Company
            of New York, as Agent, incorporated by reference to Exhibit 10.01.3
            to the Company's Quarterly Report on Form 10-Q for the fiscal
            quarter ended June 30, 1997 (File No. 1-6594).

10.02.2+    Amended and Restated Credit Agreement dated as of July 10, 1998
            among the Company, the Banks party thereto and Morgan Guaranty Trust
            Company of New York, as Agent.

12.01+      Computation of Ratio of Earnings to Fixed Charges.

21.01       Pursuant to General Instruction I of Form 10-K, the list of
            subsidiaries of the Company is omitted.

23.01+      Consent of KPMG LLP, Independent Certified Public Accountants.

27.01+      Financial Data Schedule.

            The total amount of securities authorized pursuant to any other
instrument defining rights of holders of long-term debt of the Company does not
exceed 10% of the total assets of the Company and its consolidated subsidiaries.
The Company will furnish copies of any such instrument to the Securities and
Exchange Commission upon request.

            Copies of any of the exhibits referred to above will be furnished at
a cost of $.25 per page to security holders who make written request therefor to
Patricia A. Rouzer, Corporate Communications and Investor Relations, Commercial
Credit Company, 300 St. Paul Place, Baltimore, Maryland 21202.

----------
+ Filed herewith.