<PAGE> 1
FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: January 23, 1997
----------------
HOUSEHOLD INTERNATIONAL, INC.
-----------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-8198 36-3121988
- --------------------------------------------------------------
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation Number)
2700 Sanders Road, Prospect Heights, Illinois 60070
- ---------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 847/564-5000
------------
<PAGE>
<PAGE> 2
Item 5. Other Events
Press release pertaining to the financial results of
Household International, Inc., for the quarter and year
ended December 31, 1996. Said release is filed as an
exhibit hereto.
Item 7. Financial Statements and Exhibits
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
No. Exhibit
--- -------
27 Financial Data Schedule.
99 Press release titled "Household Reports 5th
Consecutive Year of 20% or More EPS Growth"
dated January 23, 1997
<PAGE>
<PAGE> 3
SIGNATURE
Pursuant to the requirement of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
HOUSEHOLD INTERNATIONAL, INC.
----------------------------
(Registrant)
By: /s/ Susan E. Casey
-------------------
Susan E. Casey
Assistant Secretary
Dated: January 23, 1997
----------------
U:\LAW\EDGAR\I8K197.WP
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FOLLOWING SUMMARY FINANCIAL INFORMATION OF THE COMPANY AND ITS
SUBSIDIARIES IS QUALIFIED IN ITS ENTIRETY BY THE DETAILED INFORMATION
AND FINANCIAL STATEMENTS PREVIOUSLY FILED WITH THE SECURITIES &
EXCHANGE COMMISSION.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 239,200
<SECURITIES> 2,282,000
<RECEIVABLES> 24,067,000
<ALLOWANCES> 1,596,200
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 785,800
<DEPRECIATION> 432,600
<TOTAL-ASSETS> 29,594,500
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 14,802,000
<COMMON> 115,200
0
205,000
<OTHER-SE> 3,001,000
<TOTAL-LIABILITY-AND-EQUITY> 29,594,500
<SALES> 0
<TOTAL-REVENUES> 5,058,800
<CGS> 0
<TOTAL-COSTS> 1,956,300
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 759,600
<INTEREST-EXPENSE> 1,520,600
<INCOME-PRETAX> 822,300
<INCOME-TAX> 283,700
<INCOME-CONTINUING> 538,600
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 538,600
<EPS-PRIMARY> 5.31
<EPS-DILUTED> 5.30
<FN>
<F1>FINANCIAL STATEMENTS OF THE COMPANY WERE PREPARED IN ACCORDANCE WITH
FINANCIAL INSTITUTION INDUSTRY STANDARDS. ACCORDINGLY, THE COMPANY'S
BALANCE SHEETS WERE NON-CLASSIFIED.
</FN>
</TABLE>
<PAGE> 1
For Release:Immediately
Contact: Craig A. Streem
Vice President - Investor Relations
847.564.6053
Celeste M. Murphy
Director - Investor Relations
847.564.7568
HOUSEHOLD REPORTS 5TH CONSECUTIVE YEAR OF 20% OR MORE EPS GROWTH
FOURTH QUARTER 1996 HIGHLIGHTS:
- -- All time record EPS of $1.62, up 26%.
- -- Return on shareholders' equity reaches 22%.
- -- Core receivables hit $41 billion, up 21%, annualized.
Prospect Heights, IL, January 23, 1997 -- Household International (NYSE: HI)
today reported all-time record net income and earnings per share for the
fourth quarter and year ended December 31, 1996. Quarterly earnings per
share of $1.62 was a 26 percent increase from $1.29 for the fourth quarter
of 1995. Net income rose 24 percent to an all-time quarterly record of
$163.6 million, compared with $132.3 million a year earlier.
Full-year net income and earnings per share also reached all-time record
levels. Earnings per share of $5.30 rose 23 percent and net income
increased 19 percent to $538.6 million.
William F. Aldinger, Household's chairman and chief executive officer,
said, "1996 was a very good year. It was our fifth consecutive year of
earnings per share growth in excess of 20 percent, characterized by core
receivable growth of 23 percent, wider margins and improving efficiency.
Our efficiency ratio improved to 41 percent, ahead of our target for 1996.
Return on assets improved sharply to 1.82 percent from 1.34 percent in
1995, and return on equity climbed to 18.9 percent as we focused on our
core businesses."
Mr. Aldinger added, "We feel very good about the momentum in our core
businesses as we look to 1997. At HFC, our retail branch sales force
turned in the best sales numbers we've seen in six years. Led by the
signing of the Union Privilege and Barnett Banks partnerships in the
U.S., and our joint venture relationships with British Gas and the
Automobile Association in the U.K., our credit card receivables were
up over 40 percent from a year ago."
Household's managed portfolio of core consumer lending products
increased 23 percent from a year ago, driven by increases in the
credit card and other unsecured portfolios. Core consumer receivables
were up 21 percent, annualized, in the quarter.
The company's managed net interest margin in the fourth quarter was
7.31 percent, up from 6.69 percent a year ago and 7.03 percent in the
third quarter. The wider margin from a year ago primarily reflects the
continuing shift in portfolio mix toward unsecured loans and improved
pricing.
Operating expenses totaled $419 million in the fourth quarter, 14
percent over $368 million in the year ago quarter. The majority of
the increase was due to higher marketing expenses for the credit card
portfolio. For the year, the company's normalized managed efficiency ratio
improved to 41 percent from the 1995 level of 46 percent.
At December 31, two-months-and-over consumer delinquency was 4.15 percent
of managed consumer receivables, compared with 3.83 percent at the end of
the prior quarter and 3.46 percent a year ago. Annualized net chargeoffs
were 3.59 percent of average managed consumer receivables for the quarter,
compared to 3.52 percent in the prior quarter and up from 3.28 percent in
the year ago quarter. Bankruptcies continued to be a significant factor in
the current level of chargeoffs. The full-year consumer chargeoff ratio
increased from 2.95 percent in 1995 to 3.35 percent in 1996. The increases
were within expectations and consistent with the company's outlook given
overall industry conditions.
<PAGE>
<PAGE> 2
The company increased credit loss reserves by $68 million during the
quarter and $419 million during the full year 1996. The ratio of
reserves to managed receivables reached 3.75 percent at year end compared
to 3.22 percent a year ago. Total reserves to total nonperforming loans
were 119 percent, compared to 111 percent a year ago. The increase in
reserves reflected continuing uncertainty about consumer credit performance
and the changing mix in the portfolio to more unsecured loans.
Household International, through its subsidiaries, is a leading provider
of consumer financial services, primarily consumer lending and credit card
products, in the United States, Canada and the United Kingdom. HFC, one of
Household's core businesses, is the oldest consumer finance company in the
United States. Additionally, Household is also one of the largest issuers
of private-label and general purpose credit cards in the U.S. Its principal
card products include the GM Card and the AFL-CIO's Union Privilege card.
# # #
<PAGE>
<PAGE> 3
December 31, 1996
<TABLE>
<CAPTION>
Quarterly Financial Highlights
- -------------------------------------------------------------------------------------------------------------------
Summary Managed Income Statement Three Months Ended: % Change from Prior:
($ millions) 12/31/96 9/30/96 12/31/95 Qtr. Year
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Managed-basis interest margin and other revenues <F1> $1,108.4 $1,044.8 $1,023.8 6.1% 8.3% <F4>
Managed-basis provision for credit losses <F1> <F2> 440.5 414.5 404.2 6.3 9.0
Operating expenses 419.1 416.7 367.9 0.6 13.9
Income taxes 85.2 73.7 119.4 15.6 (28.6)
- -------------------------------------------------------------------------------------------------------------------
Net Income $ 163.6 $ 139.9 $ 132.3 16.9% 23.7%
===================================================================================================================
Common Stock Data
- -------------------------------------------------------------------------------------------------------------------
Earnings per common share $ 1.62 $ 1.38 $ 1.29 17.4% 25.6%
Average common and equivalent shares (millions) 98.4 98.2 99.5 0.2 (1.1)
Common stock price
High $ 98.13 $ 83.88 $ 68.38 17.0 43.5
Low 82.50 68.50 54.25 20.4 52.1
Period end 92.25 82.25 59.50 12.2 55.0
Common shares outstanding at period end (millions) 97.1 96.9 97.2 0.2 (0.1)
Dividends declared per common share $ 0.39 $ 0.39 $ 0.34 0.0 14.7
Book value per common share 30.30 28.73 27.70 5.5 9.4
===================================================================================================================
Key Ratios
- -------------------------------------------------------------------------------------------------------------------
Return on average common shareholders' equity 22.2% 19.8% 19.6% 12.1% 13.3%
Return on average owned assets 2.13 1.87 1.78 13.9 19.7
Return on average managed assets 1.36 1.19 1.24 14.3 9.7
Managed efficiency ratio, normalized 38.8 39.9 38.8 (2.8) 0.0
Managed net interest margin 7.3 7.0 6.7 4.3 9.0
Total shareholders' equity as a percent of managed assets 6.90 6.69 6.74 3.1 2.4
===================================================================================================================
Full Year Financial Highlights
- -------------------------------------------------------------------------------------------------------------------
Summary Managed Income Statement Twelve Months Ended: % Change from
($ millions) 12/31/96 12/31/95 Prior Year
- -------------------------------------------------------------------------------------------------------------------
Managed-basis interest margin and other revenues <F1> $4,190.5 $3,622.6 15.7%
Managed-basis provision for credit losses <F1><F3> 1,641.0 1,271.1 29.1
Operating expenses 1,727.2 1,597.8 8.1
Income taxes 283.7 300.5 (5.6)
- -------------------------------------------------------------------------------------------------------------------
Net Income $ 538.6 $ 453.2 18.8%
===================================================================================================================
Common Stock Data
- -------------------------------------------------------------------------------------------------------------------
Earnings per common share $ 5.30 $ 4.30 23.3%
Average common and equivalent shares (millions) 98.5 99.3 (0.8)
Common stock price
High 98.13 68.38 43.5
Low 52.00 35.88 44.9
Dividends declared per common share 1.46 1.31 11.5
===================================================================================================================
Key Ratios
- -------------------------------------------------------------------------------------------------------------------
Return on average common shareholders' equity 18.9% 17.4% 8.6%
Return on average owned assets 1.82 1.34 35.8
Return on average managed assets 1.17 0.98 19.4
Managed efficiency ratio, normalized 40.8 46.0 (11.3)
Managed net interest margin 7.0 6.4 9.4
===================================================================================================================
<FN>
<F1> To aid analysis, interest margin and other revenues and provision for credit losses are
presented on a pro forma managed basis as if receivables securitized and sold with limited
recourse were held in portfolio. Policyholders' benefits have been netted against other
revenues.
<F2> Includes managed-basis net chargeoffs of $377.1 million in the fourth quarter of 1996,
$348.4 million in the third quarter of 1996 and $298.2 million in the fourth quarter of 1995.
<F3> Includes managed-basis net chargeoffs of $1,299.8 million in 1996 and $1,052.9 million in 1995.
<F4> Excluding nonrecurring gains, net managed revenues increased 14 percent over last year's fourth quarter.
</FN>
</TABLE>
<PAGE>
<PAGE> 4
<TABLE>
<CAPTION>
Consolidated Statements of Income - Owned Basis
- -----------------------------------------------------------------------------------------------------------------
Three Months Ended: % Change from Prior:
($ millions) 12/31/96 9/30/96 12/31/95 Qtr. Year
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Finance income $813.5 $755.6 $731.3 7.7% 11.2%
Interest income from noninsurance investment securities 9.2 12.1 18.5 (24.0) (50.3)
Interest expense 398.8 384.7 375.5 3.7 6.2
- -----------------------------------------------------------------------------------------------------------------
Net interest margin 423.9 383.0 374.3 10.7 13.3
Provision for credit losses on owned receivables 222.3 169.5 191.6 31.2 16.0
- -----------------------------------------------------------------------------------------------------------------
Net interest margin after provision for credit losses 201.6 213.5 182.7 (5.6) 10.3
- -----------------------------------------------------------------------------------------------------------------
Securitization income 307.1 282.0 240.2 8.9 27.9
Insurance premiums and contract revenues 67.5 63.6 59.9 6.1 12.7
Investment income 25.2 34.8 46.9 (27.6) (46.3)
Fee income 75.0 62.1 57.3 20.8 30.9
Other income 37.0 31.5 90.5 17.5 (59.1)
- -----------------------------------------------------------------------------------------------------------------
Total other revenues 511.8 474.0 494.8 8.0 3.4
- -----------------------------------------------------------------------------------------------------------------
Salaries and fringe benefits 142.2 131.4 124.7 8.2 14.0
Occupancy and equipment expense 46.2 48.3 52.0 (4.3) (11.2)
Other marketing expenses 123.6 132.3 91.4 (6.6) 35.2
Other servicing and administrative expenses 107.1 104.7 99.8 2.3 7.3
Policyholders' benefits 45.5 57.2 57.9 (20.5) (21.4)
- -----------------------------------------------------------------------------------------------------------------
Total costs and expenses 464.6 473.9 425.8 (2.0) 9.1
- -----------------------------------------------------------------------------------------------------------------
Income before income taxes <F1> 248.8 213.6 251.7 16.5 (1.2)
Income taxes 85.2 73.7 119.4 15.6 (28.6)
- -----------------------------------------------------------------------------------------------------------------
Net Income 163.6 139.9 132.3 16.9 23.7
- -----------------------------------------------------------------------------------------------------------------
Preferred dividends (4.2) (4.2) (4.2) 0.0 0.0
- -----------------------------------------------------------------------------------------------------------------
Earnings available to common shareholders $159.4 $135.7 $128.1 17.5% 24.4%
=================================================================================================================
Effective tax rate 34.2% 34.5% 47.4% (0.9)% (27.8)%
- -----------------------------------------------------------------------------------------------------------------
<FN>
<F1> Income before income taxes for the quarter ended December 31, 1995 includes the gain on the sale of the
company's individual life insurance business. The gain was substantially offset by income taxes.
Excluding the effect of the gain, income before income taxes increased 23 percent from 1995 to 1996.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Balance Sheet Data
- -----------------------------------------------------------------
($ millions) 12/31/96 12/31/95
- -----------------------------------------------------------------
<S> <C> <C>
Owned assets $29,594.5 $29,218.8
Managed assets 48,120.9 44,103.4
Managed receivables 42,593.4 36,616.7
Debt 23,595.2 22,596.1
Trust originated preferred securities 175.0 75.0
Preferred stock 205.0 205.0
Common shareholders' equity 2,941.2 2,690.9
=================================================================
</TABLE>
<PAGE>
<PAGE> 5
Consolidated Statements of Income - Managed Basis
- -------------------------------------------------
Securitizations and sales of consumer receivables are an important source
of liquidity and capital management for the company. The company continues
to service the securitized receivables after such receivables are sold, and
retains a limited recourse obligation. Securitizations impact the
classification of revenues and expenses in the income statement. Net
interest margin, non-interest income such as interchange fee income and
provision for credit losses related to receivables sold are reported net in
securitization income.
Pro Forma Managed Adjustments
- -----------------------------
To aid in analysis, the following table shows the pro forma impact on income
statement classifications assuming the receivables securitized and sold were
instead held in portfolio. This pro forma analysis does not adjust the
results to reflect the differences between the company's accounting policies
for receivables held in portfolio and receivables sold and serviced with
limited recourse. Accordingly, net income on a pro forma managed basis
equals net income on a historical owned basis.
<TABLE>
<CAPTION>
Quarter Ended 12/31/96 ($ millions) As Reported Adjustments Managed
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net interest margin $ 423.9 $ 370.7 $ 794.6
Provision for credit losses 222.3 218.2 440.5
- ---------------------------------------------------------------------------------------------
Net interest margin after provision for credit losses 201.6 152.5 354.1
- ---------------------------------------------------------------------------------------------
Securitization income 307.1 (307.1) 0.0
Insurance premiums and contract revenues 67.5 0.0 67.5
Investment income 25.2 0.0 25.2
Fee income 75.0 154.6 229.6
Other income 37.0 0.0 37.0
- ---------------------------------------------------------------------------------------------
Total other revenues 511.8 (152.5) 359.3
- ---------------------------------------------------------------------------------------------
Total costs and expenses 464.6 0.0 464.6
- ---------------------------------------------------------------------------------------------
Income before income taxes 248.8 (0.0) 248.8
Income taxes 85.2 0.0 85.2
- ---------------------------------------------------------------------------------------------
Net income $163.6 $ (0.0) $ 163.6
=============================================================================================
</TABLE>
<PAGE>
<PAGE> 6
<TABLE>
<CAPTION>
Managed Basis
- -----------------------------------------------------------------------------------------------------------------------
Three months ended: % Change from Prior:
($ millions) 12/31/96 <F1> 9/30/96 <F1> 12/31/95 <F1> Qtr. Year
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Finance income $ 1,444.1 13.5% $ 1,360.1 13.3% $ 1,177.7 13.4% 6.2% 22.6%
Interest income from noninsurance
investment securities 9.2 5.6 12.1 5.8 18.5 5.2 (24.0) (50.3)
Interest expense 658.7 6.1 639.2 6.1 582.5 6.4 3.1 13.1
- -----------------------------------------------------------------------------------------------------------------------
Net interest margin 794.6 7.3% 733.0 7.0% 613.7 6.7% 8.4 29.5
Provision for credit losses 440.5 414.5 404.2 6.3 9.0
- -----------------------------------------------------------------------------------------------------------------------
Net interest margin after provision
for credit losses 354.1 318.5 209.5 11.2 69.0
- -----------------------------------------------------------------------------------------------------------------------
Insurance premiums and contract revenues 67.5 63.6 59.9 6.1 12.7
Investment income 25.2 34.8 46.9 (27.6) (46.3)
Fee income 229.6 239.1 270.7 (4.0) (15.2)
Other income 37.0 31.5 90.5 17.5 (59.1)
- -----------------------------------------------------------------------------------------------------------------------
Total other revenues 359.3 369.0 468.0 (2.6) (23.2)
- -----------------------------------------------------------------------------------------------------------------------
Total costs and expenses 464.6 473.9 425.8 (2.0) 9.1
- -----------------------------------------------------------------------------------------------------------------------
Income before income taxes 248.8 213.6 251.7 16.5 (1.2)
Income taxes 85.2 73.7 119.4 15.6 (28.6)
- -----------------------------------------------------------------------------------------------------------------------
Net income $ 163.6 $ 139.9 $ 132.3 16.9% 23.7%
=======================================================================================================================
Average managed receivables
Home equity $ 8,453.9 $ 8,534.5 $ 8,743.1 (0.9)% (3.3)%
Visa/MasterCard <F2> 18,044.1 16,958.2 12,234.4 6.4 47.5
Private label 5,292.8 4,904.0 4,328.2 7.9 22.3
Other unsecured 8,658.8 7,718.9 6,465.6 12.2 33.9
- -----------------------------------------------------------------------------------------------------------------------
Core products 40,449.6 38,115.6 31,771.3 6.1 27.3
- -----------------------------------------------------------------------------------------------------------------------
First mortgage 1,375.6 1,695.4 2,117.4 (18.9) (35.0)
Commercial 1,001.3 1,085.6 1,369.2 (7.8) (26.9)
- -----------------------------------------------------------------------------------------------------------------------
Total 42,826.5 40,896.6 35,257.9 4.7 21.5
Average noninsurance investments 659.0 829.3 1,420.3 (20.5) (53.6)
- -----------------------------------------------------------------------------------------------------------------------
Average managed interest-earning assets $43,485.5 $41,725.9 $36,678.2 4.2% 18.6%
=======================================================================================================================
<FN>
<F1> % Columns: comparison to appropriate earning assets, annualized.
<F2> Visa and MasterCard are registered trademarks of VISA USA Inc. and MasterCard International, Incorporated,
respectively.
</FN>
</TABLE>
<PAGE>
<PAGE> 7
<TABLE>
<CAPTION>
Receivables Analysis
- -----------------------------------------------------------------------------------------------------------------------
% Change from Prior:
Managed Portfolio ($ millions) 12/31/96 9/30/96 12/31/95 Qtr. Year
- -----------------------------------------------------------------------------------------------------------------------
The combination of receivables owned and receivables which have been sold to public and private investors with limited
recourse.
<S> <C> <C> <C> <C> <C>
Home equity $ 7,985.4 $ 8,623.6 $ 8,810.1 (7.4)% (9.4)%
Visa/MasterCard 18,737.4 16,947.5 13,343.1 10.6 40.4
Private label 5,587.0 5,048.1 4,446.2 10.7 25.7
Other unsecured 8,620.2 8,258.8 6,660.8 4.4 29.4
- -----------------------------------------------------------------------------------------------------------------------
Core products 40,930.0 38,878.0 33,260.2 5.3 23.1
- -----------------------------------------------------------------------------------------------------------------------
First mortgage 725.6 1,652.9 2,066.9 (56.1) (64.9)
Commercial 937.8 1,045.3 1,289.6 (10.3) (27.3)
- -----------------------------------------------------------------------------------------------------------------------
Managed portfolio $42,593.4 $41,576.2 $36,616.7 2.4% 16.3%
=======================================================================================================================
Receivables (% of Managed Portfolio)
- -----------------------------------------------------------------------------------------------------------------------
Home equity 18.7% 20.7% 24.1%
Visa/MasterCard 44.0 40.8 36.4
Private label 13.1 12.1 12.1
Other unsecured 20.3 19.9 18.2
- -----------------------------------------------------------------------------------------------------------------------
Core products 96.1 93.5 90.8
- -----------------------------------------------------------------------------------------------------------------------
First mortgage 1.7 4.0 5.7
Commercial 2.2 2.5 3.5
- -----------------------------------------------------------------------------------------------------------------------
Total 100.0% 100.0% 100.0%
=======================================================================================================================
Receivables ($ millions)
- -----------------------------------------------------------------------------------------------------------------------
First mortgage $ 725.6 $ 1,652.9 $ 2,066.9 (56.1)% (64.9)%
Home equity 3,647.9 4,662.0 4,148.2 (21.8) (12.1)
Visa/MasterCard 8,587.7 7,702.2 5,512.0 11.5 55.8
Private label 5,070.0 4,443.7 3,696.2 14.1 37.2
Other unsecured 5,098.0 4,631.3 5,019.2 10.1 1.6
Commercial 937.8 1,045.3 1,289.6 (10.3) (27.3)
- -----------------------------------------------------------------------------------------------------------------------
Total owned receivables 24,067.0 24,137.4 21,732.1 (0.3) 10.7
- -----------------------------------------------------------------------------------------------------------------------
Accrued finance charges 397.6 392.6 381.6 1.3 4.2
Credit loss reserve for owned receivables (900.2) (862.5) (720.4) 4.4 25.0
Unearned credit insurance premiums and claims reserves (184.6) (169.6) (159.9) 8.8 15.4
Amounts due and deferred from consumer receivable sales 1,561.0 1,529.4 1,067.7 2.1 46.2
Reserve for receivables serviced with limited recourse (696.0) (665.4) (457.0) 4.6 52.3
- -----------------------------------------------------------------------------------------------------------------------
Total owned receivables, net 24,244.8 24,361.9 21,844.1 (0.5) 11.0
- -----------------------------------------------------------------------------------------------------------------------
Receivables serviced with limited recourse:
Home equity 4,337.5 3,961.6 4,661.9 9.5 (7.0)
Visa/MasterCard 10,149.7 9,245.3 7,831.1 9.8 29.6
Private label 517.0 604.4 750.0 (14.5) (31.1)
Other unsecured 3,522.2 3,627.5 1,641.6 (2.9) +100.0
- -----------------------------------------------------------------------------------------------------------------------
Total receivables serviced with limited recourse 18,526.4 17,438.8 14,884.6 6.2 24.5
- -----------------------------------------------------------------------------------------------------------------------
Total managed receivables, net $42,771.2 $41,800.7 $36,728.7 2.3% 16.5%
=======================================================================================================================
<PAGE>
<PAGE> 8
</TABLE>
<TABLE>
<CAPTION>
Credit Quality/Credit Loss Reserves
- -----------------------------------------------------------------------------------------------------------------
($ millions) 12/31/96 9/30/96 12/31/95
- -----------------------------------------------------------------------------------------------------------------
Two-Months-and-Over Contractual Delinquency
As a percent of managed consumer receivables, excludes commercial.
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
First mortgage 9.49% 3.82% 3.29%
Home equity 3.96 3.55 3.24
Visa/MasterCard 2.71 2.54 2.22
Private label 5.50 5.43 4.51
Other unsecured 6.13 5.79 5.60
- -----------------------------------------------------------------------------------------------------------------
Total 4.15% 3.83% 3.46%
=================================================================================================================
Quarter-to-Date Chargeoffs, Net of Recoveries
As a percent of average managed consumer receivables, annualized, excludes commercial.
- -----------------------------------------------------------------------------------------------------------------
First mortgage 0.30% 0.50% 0.47%
Home equity 1.18 0.98 0.95
Visa/MasterCard 4.66 4.71 4.67
Private label 3.70 3.54 5.14
Other unsecured 4.18 4.35 3.46
- -----------------------------------------------------------------------------------------------------------------
Total 3.59% 3.52% 3.28%
=================================================================================================================
Nonperforming Assets
- -----------------------------------------------------------------------------------------------------------------
Nonaccrual managed receivables $ 772.5 $ 741.1 $ 768.5
Accruing managed receivables 90 or more days delinquent 555.0 446.1 267.2
Renegotiated commercial loans 12.9 19.9 21.2
- -----------------------------------------------------------------------------------------------------------------
Total nonperforming managed receivables 1,340.4 1,207.1 1,056.9
Real estate owned 136.6 137.6 136.5
- -----------------------------------------------------------------------------------------------------------------
Total nonperforming assets $1,477.0 $1,344.7 $1,193.4
=================================================================================================================
Managed credit loss reserves as a percent
of nonperforming managed receivables 119.1% 126.6% 111.4%
- -----------------------------------------------------------------------------------------------------------------
Credit Loss Reserves
- -----------------------------------------------------------------------------------------------------------------
Reserves for owned receivables at beginning of quarter $ 862.5 $ 858.3 $ 667.8
Provision for credit losses - owned 222.3 169.5 191.6
Owned receivables - chargeoffs, net of recoveries (188.1) (176.6) (193.6)
Purchased reserves, net 3.5 11.3 54.6
- -----------------------------------------------------------------------------------------------------------------
Reserves for owned receivables at end of quarter 900.2 862.5 720.4
- -----------------------------------------------------------------------------------------------------------------
Credit loss reserves for receivables serviced
with limited recourse at beginning of quarter 665.4 592.8 349.2
Provision for credit losses 218.2 245.0 212.6
Chargeoffs, net of recoveries (189.0) (171.8) (104.6)
Other, net 1.4 (0.6) (0.2)
- -----------------------------------------------------------------------------------------------------------------
Credit loss reserves for receivables serviced
with limited recourse at end of quarter 696.0 665.4 457.0
- -----------------------------------------------------------------------------------------------------------------
Total credit loss reserves at end of quarter $1,596.2 $1,527.9 $1,177.4
=================================================================================================================
Credit loss reserves
Owned $ 900.2 3.74%<F1> $ 862.5 3.57%<F1> $ 720.4 3.31%<F1>
Serviced with limited recourse 696.0 3.76 665.4 3.82 457.0 3.07
- -----------------------------------------------------------------------------------------------------------------
Total managed credit loss reserves $1,596.2 3.75 % $1,527.9 3.67% $1,177.4 3.22%
=================================================================================================================
<FN>
<F1> % Columns: comparisons to appropriate receivables.
</FN>
</TABLE>
