<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: April 20, 2000
--------------
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 first quarter ended
March 31, 2000. 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
International Reports Record First
Quarter Results" dated April 19, 2000.
<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/ John W. Blenke
-------------------
John W. Blenke
Assistant Secretary
Dated: April 20, 2000
--------------
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FOLLOWING SUMMARY FINNCIAL INFORMATION OF THE COMANY 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 290,400
<SECURITIES> 3,203,300
<RECEIVABLES> 56,190,000
<ALLOWANCES> 2,861,100
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 1,280,500
<DEPRECIATION> 790,100
<TOTAL-ASSETS> 65,991,400
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 37,226,300
0
164,400
<COMMON> 550,500
<OTHER-SE> 6,813,800
<TOTAL-LIABILITY-AND-EQUITY> 64,991,400
<SALES> 0
<TOTAL-REVENUES> 2,759,700
<CGS> 0
<TOTAL-COSTS> 850,400
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 522,100
<INTEREST-EXPENSE> 821,700
<INCOME-PRETAX> 565,500
<INCOME-TAX> 192,600
<INCOME-CONTINUING> 372,900
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 372,900
<EPS-BASIC> .79
<EPS-DILUTED> .78
<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
Household International
Reports Record First Quarter Results
- - Earnings Per Share Up 20%, to $.78
- - Net Income Up 16%, to $373 Million
- - Receivables Up 17% Over First Quarter of `99
- - Revenues Up 21% Over First Quarter of `99
Prospect Heights, IL, April 19, 2000 -- Household International (NYSE: HI)
today reported that earnings per share rose 20 percent to a first quarter
record of $.78, from $.65 a year ago. Net income increased to $372.9
million, up 16 percent from $320.8 million in the first quarter of 1999.
Cash earnings for the quarter totaled $415 million.
William F. Aldinger, Household's chairman and chief executive officer,
said, "This was the strongest first quarter in our company's history,
with all of our businesses performing well. Revenue and receivable
growth were strong, and credit quality continued to improve. To build
upon the momentum that is evident in these results, we increased our
investment in marketing programs and e-commerce initiatives."
During the quarter, the company took a number of important steps to
further strengthen its franchise. In February, Household completed the
acquisition of Renaissance Holdings, Inc., its partner in developing
and implementing its non-prime bankcard strategy. And in March, the
company acquired over $2 billion in home equity receivables, 97 branch
offices and 900 employees from the consumer finance subsidiary of Bank
One Corporation. This acquisition expands the company's consumer
finance branch distribution and adds many talented and experienced
sales personnel. Both acquisitions complement Household's core strengths
and will enhance organic growth.
Household and General Motors announced in late March the launch of the
New GM Card, which provides many valuable new features to cardholders.
The company is excited about the prospect of renewed credit card growth
from this program.
"The year is off to a great start," Aldinger concluded. "We are seeing
a continuation of the very positive business trends that emerged in the
second half of 1999. We remain comfortable with our receivable, revenue
and earnings per share growth targets for 2000."
(more)
<PAGE>
<PAGE> 2
Specific highlights of the quarter include:
- - Receivables increased 17 percent, or over $11 billion, compared
to a year ago.
- - Revenues grew 21 percent compared to the year-ago quarter, driven by
significant receivables growth, an expanded net interest margin and
higher fee income.
- - Marketing expenses increased 50 percent from the first quarter of 1999,
which positions the company for improved growth over future quarters.
The higher level of spending on marketing as well as e-commerce
initiatives contributed to the overall increase of 23 percent in
operating expenses.
- - The company's tax refund anticipation loan business enjoyed a successful
tax season, contributing $.12 to first quarter 2000 earnings compared to
$.10 in the year-ago quarter.
- - The chargeoff ratio improved compared to a year ago and was stable with
the fourth quarter of 1999. Delinquency ratios were down dramatically
from both the prior year and prior quarter. Dollars of delinquency
remained flat in the quarter.
- - The company's return on managed assets expanded to 1.82 percent from
1.75 percent a year ago and return on equity improved to 22.0 percent.
Receivable Growth
Led by strong home equity loan growth, the company's managed portfolio grew
17 percent, with all core products contributing to the year-over-year
increase. Average receivables grew 13 percent over the prior-year level.
Revenues
Revenues increased over $373 million, or 21 percent, from a year ago.
Household's managed net interest margin equaled 8.31 percent, compared to
8.29 percent in the fourth quarter of 1999 and up from 7.96 percent a year
ago. The year-over-year increase reflected stronger pricing in the company's
consumer finance and credit card portfolios, partially offset by higher cost
of funds.
Managed fee income increased 24 percent compared to the first quarter of
1999, principally reflecting higher levels of credit card interchange and
other fees. Higher net revenues from the company's income tax refund
anticipation loan business drove a 22 percent increase in other income
from the first quarter of 1999.
Credit Quality and Loss Reserves
At March 31, the managed delinquency ratio (60+days) declined to 4.43
percent, from 4.66 percent at December 31 and 4.81 percent a year ago.
Dollars of delinquency were flat with year-end 1999. The annualized
managed net chargeoff ratio for the first quarter was 4.00 percent compared
to 3.96 percent in the prior quarter and improved 37 basis points from the
year-ago quarter.
Credit loss reserves totaled $2.9 billion at March 31. The ratio of
reserves-to-managed receivables was 3.79 percent at March 31, compared
to 3.72 percent at the end of 1999 and 3.96 percent a year ago. Reserves-
to-nonperforming loans were 105.9 percent at March 31.
The company's risk adjusted revenue ratio expanded to 7.82 percent from
7.57 percent in the prior quarter and 7.15 percent a year ago.
(more)
<PAGE>
<PAGE> 3
Operating Expenses
Operating expenses increased 23 percent from a year ago, as the company
increased its marketing and e-commerce initiatives. Compensation costs
rose as a result of the company expanding its sales force in the HFC
and Beneficial branch network and higher levels of sales incentives.
Costs related to Renaissance also contributed to the increase in
operating expenses. The efficiency ratio was 36.2 percent for the
first quarter of 2000.
Share Repurchase Program
In connection with its $2 billion share repurchase program, announced on
March 9, 1999, the company bought back 700 thousand shares in the first
quarter, totaling $24.3 million. During the first quarter the company
entered into agreements with third parties to purchase, on a forward basis,
approximately 4.3 million shares of our common stock at a weighted average
price of $33.60 per share.
In early April, Household filed a registration statement with the SEC to
issue $300 million of trust preferred stock, which the company intends
to issue in the second quarter.
Household International, through its subsidiaries, is a leading provider
of consumer finance, credit card, auto finance and credit insurance
products in the United States, United Kingdom and Canada. In the United
States, Household operates under the two oldest and most recognized names
in consumer finance - HFC and Beneficial. Household is also one of the
nation's largest issuers of private-label and general purpose credit
cards, including the GM Card and the AFL-CIO's Union Privilege card.
For more information, visit the company's web site at
http://www.household.com.
This press release contains certain estimates and projections that may
be forward-looking in nature, as defined by the Private Securities
Litigation Reform Act of 1995. A variety of factors may cause actual
results to differ materially from the results discussed in these
forward-looking statements. Factors that might cause such a difference
are discussed in Household International's Annual Report on Form 10-K,
filed with the SEC.
# # #
CONTACT:
Craig A. Streem, Vice President -- Investor Relations, 847-564-6053,
or Celeste M. Murphy, Director -- Investor Relations, 847-564-7568,
both of Household International
<PAGE>
<PAGE> 4
Quarterly Financial Supplement
<TABLE>
<CAPTION>
March 31, 2000 - Quarterly Highlights
- -------------------------------------------------------------------------------------------------------------------
Summary Managed Income Statement Three Months Ended % Change from Prior
------------------------------ -------------------
($ millions) 03/31/00 12/31/99 03/31/99 Qtr. Year
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Managed-basis net interest margin <F1> $1,525.5 $1,470.0 $1,295.1 3.8% 17.8%
Managed-basis other revenues <F1> 639.7 560.6 496.8 14.1 28.8
Managed-basis provision for credit losses <F1> 816.2 738.1 671.5 10.6 21.5
Operating expenses 783.5 634.7 638.3 23.4 22.7
- -------------------------------------------------------------------------------------------------------------------
Income before income taxes 565.5 657.8 482.1 (14.0) 17.3
Income taxes 192.6 219.0 161.3 (12.1) 19.4
- -------------------------------------------------------------------------------------------------------------------
Net Income $ 372.9 $ 438.8 $ 320.8 (15.0) 16.2
===================================================================================================================
Common Stock Data
- -------------------------------------------------------------------------------------------------------------------
Basic earnings per common share $ .79 $ .93 $ .66 (15.1)% 19.7%
Diluted earnings per common share .78 .92 .65 (15.2) 20.0
- -------------------------------------------------------------------------------------------------------------------
Average common shares (millions) 470.5 468.7 484.7 .4 (2.9)
Average common and equivalent shares (millions) 474.0 472.7 490.1 .3 (3.3)
- -------------------------------------------------------------------------------------------------------------------
Common stock price
High $ 39.19 $ 48.00 $ 46.69 (18.4) (16.1)
Low 29.50 35.81 38.69 (17.6) (23.8)
Period end 37.31 37.25 45.63 .2 (18.2)
- -------------------------------------------------------------------------------------------------------------------
Dividends declared per common share $ .17 $ .17 $ .17 - -
Book value per common share 14.78 13.79 12.92 7.2 14.4
===================================================================================================================
Key Ratios
- -------------------------------------------------------------------------------------------------------------------
Return on average common shareholders' equity 22.0% 27.5% 20.3% (20.0)% 8.4%
Return on average owned assets 2.37 2.96 2.38 (19.9) (.4)
Return on average managed assets 1.82 2.25 1.75 (19.1) 4.0
Managed efficiency ratio, normalized 36.2 31.3 35.6 15.7 1.7
Managed net interest margin 8.31 8.29 7.96 .2 4.4
Total shareholders' equity as a percent of managed assets 8.94 8.72 9.30 2.5 (3.9)
Tangible equity to tangible managed assets 6.94 6.96 7.17 (.3) (3.2)
===================================================================================================================
<FN>
<F1> To aid analysis, net interest margin, other revenues, and provision for credit losses
are presented on a pro forma basis as if receivables securitized and sold with limited
recourse were held in the portfolio. Policyholders' benefits have been netted against
other revenues.
</FN>
</TABLE>
<PAGE>
<PAGE> 5
Consolidated Statements of Income - Owned Basis
<TABLE>
<CAPTION>
Three Months
- -----------------------------------------------------------------------------------
% Change
Three Months Ended from Prior
---------------------------- --------------
($ millions) 03/31/00 12/31/99 03/31/99 Qtr. Year
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Finance income $1,916.0 $1,773.2 $1,498.6 8.1% 27.9%
Other interest income 8.9 8.1 9.9 9.9 (10.1)
Interest expense 821.7 762.8 648.9 7.7 26.6
- -----------------------------------------------------------------------------------
Net interest margin 1,103.2 1,018.5 859.6 8.3 28.3
Provision for credit losses
on owned receivables 522.1 453.2 417.8 15.2 25.0
- -----------------------------------------------------------------------------------
Net interest margin after
provision for credit losses 581.1 565.3 441.8 2.8 31.5
- -----------------------------------------------------------------------------------
Securitization income 346.4 398.2 324.9 (13.0) 6.6
Insurance revenues 135.0 129.2 142.2 4.5 (5.1)
Investment income 40.8 40.8 41.2 - (1.0)
Fee income 179.3 174.3 129.7 2.9 38.2
Other income 133.3 43.8 109.2 100+ 22.1
- -----------------------------------------------------------------------------------
Total other revenues 834.8 786.3 747.2 6.2 11.7
- -----------------------------------------------------------------------------------
Salaries and fringe benefits 344.9 307.2 284.1 12.3 21.4
Occupancy and equipment expense 75.5 70.9 66.8 6.5 13.0
Other marketing expenses 133.1 106.0 88.5 25.6 50.4
Other servicing and
administrative expenses 186.8 114.5 162.6 63.1 14.9
Amortization of acquired
intangibles and goodwill 43.2 36.1 36.3 19.7 19.0
Policyholders' benefits 66.9 59.1 68.6 13.2 (2.5)
- -----------------------------------------------------------------------------------
Total costs and expenses 850.4 693.8 706.9 22.6 20.3
- -----------------------------------------------------------------------------------
Income before income taxes 565.5 657.8 482.1 (14.0) 17.3
Income taxes 192.6 219.0 161.3 (12.1) 19.4
- -----------------------------------------------------------------------------------
Net income 372.9 438.8 320.8 (15.0) 16.2
- -----------------------------------------------------------------------------------
Preferred dividends (2.3) (2.3) (2.3) - -
- -----------------------------------------------------------------------------------
Earnings available to common
shareholders $ 370.6 $ 436.5 $ 318.5 (15.1)% 16.4%
===================================================================================
Effective tax rate 34.1% 33.3% 33.5% 2.4% 1.8%
- -----------------------------------------------------------------------------------
</TABLE>
<PAGE>
<PAGE> 6
Consolidated Statements of Income - Owned Basis (continued)
<TABLE>
<CAPTION>
Balance Sheet Data
- ------------------------------------------------------------------------------------
($ millions) 03/31/00 12/31/99 03/31/99
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Owned assets $64,991.4 $60,749.4 $53,875.7
Managed assets 84,248.7 80,188.3 72,796.8
Managed receivables 74,447.3 71,728.3 64,324.2
Debt 54,040.5 50,645.1 43,488.1
Trust originated preferred securities 375.0 375.0 375.0
Preferred stock 164.4 164.4 164.4
Common shareholders' equity 6,989.3 6,450.9 6,227.6
Total shareholders' equity as a percent
of managed assets 8.94% 8.72% 9.30%
====================================================================================
</TABLE>
<PAGE>
<PAGE> 7
Consolidated Statements of Income - Managed Basis
Securitizations and sales of consumer receivables are a source of
liquidity for us. We continue to service the securitized receivables
after such receivables are sold and we retain a limited recourse
obligation. Securitizations impact the classification of revenues and
expenses in the statement of operations. When reporting on a managed
basis, net interest margin, provision for credit losses, fee income,
and securitization related income related to receivables sold are
reclassified from securitization income into the appropriate caption.
<TABLE>
<CAPTION>
Three Months
- -----------------------------------------------------------------------------------------------------------------------
% Change
Three months ended from Prior
----------------------------------------------------------------- ------------
($ millions) 03/31/00 <F1> 12/31/99 <F1> 03/31/99 <F1> Qtr. Year
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Finance and other interest income $ 2,645.7 14.41% $ 2,525.1 14.23% $ 2,209.3 13.58% 4.8% 19.8%
Interest expense 1,120.2 6.10 1,055.1 5.94 914.2 5.62 6.2 22.5
- -----------------------------------------------------------------------------------------------------------------------
Net interest margin 1,525.5 8.31% 1,470.0 8.29% 1,295.1 7.96% 3.8 17.8
Provision for credit losses 816.2 738.1 671.5 10.6 21.5
- -----------------------------------------------------------------------------------------------------------------------
Net interest margin after
provision for credit losses 709.3 731.9 623.6 (3.1) 13.7
- -----------------------------------------------------------------------------------------------------------------------
Insurance revenues 135.0 129.2 142.2 4.5 (5.1)
Investment income 40.8 40.8 41.2 - (1.0)
Fee income 332.8 344.4 268.4 (3.4) 24.0
Securitization related income 64.7 61.5 4.4 5.2 100+
Other income 133.3 43.8 109.2 100+ 22.1
- -----------------------------------------------------------------------------------------------------------------------
Total other revenues 706.6 619.7 565.4 14.0 25.0
Operating expenses and policyholders'
benefits 850.4 693.8 706.9 22.6 20.3
- -----------------------------------------------------------------------------------------------------------------------
Income before income taxes 565.5 657.8 482.1 (14.0) 17.3
Income taxes 192.6 219.0 161.3 (12.1) 19.4
- -----------------------------------------------------------------------------------------------------------------------
Net income $ 372.9 $ 438.8 $ 320.8 (15.0) 16.2
=======================================================================================================================
Average managed receivables:
Real estate secured $27,657.1 $26,436.8 $23,165.0 4.6% 19.4%
Auto finance 3,194.4 2,866.4 1,890.3 11.4 69.0
MasterCard/Visa <F2> 15,669.8 15,198.3 15,858.4 3.1 (1.2)
Private label 11,171.5 10,800.6 10,184.5 3.4 9.7
Other unsecured 13,885.0 13,732.7 12,178.6 1.1 14.0
Commercial and other 770.0 820.9 821.9 (6.2) (6.3)
- -----------------------------------------------------------------------------------------------------------------------
Total 72,347.8 69,855.7 64,098.7 3.6 12.9
Average noninsurance investments 657.9 692.5 557.6 (5.0) 18.0
Other interest-earning assets 426.0 421.6 405.5 1.0 5.1
- -----------------------------------------------------------------------------------------------------------------------
Average managed interest-
earning assets $73,431.7 $70,969.8 $65,061.8 3.5% 12.9%
=======================================================================================================================
<FN>
<F1> % Columns: comparison to average managed interest-earning assets, annualized.
<F2> MasterCard and Visa are registered trademarks of MasterCard International, Incorporated
and VISA USA Inc., respectively.
</FN>
</TABLE>
<PAGE>
<PAGE> 8
Consolidated Statements of Income - Managed Basis (continued)
Reconciliation of Securitization Related Income
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
Three Months Ended
------------------------------------
($ millions) 03/31/00 12/31/99 03/31/99
- ------------------------------------------------------------------------------------
<S> <S> <S> <S>
Gross gains $ 164.4 $ 182.6 $ 91.8
Amortization (99.7) (121.1) (87.4)
- ------------------------------------------------------------------------------------
Securitization related income 64.7 61.5 4.4
Over the life provision on new transactions 122.0 142.5 69.7
- ------------------------------------------------------------------------------------
Net effect of securitization activity (57.3) (81.0) (65.3)
====================================================================================
Receivables securitized 1,472.0 $2,069.0 $794.0
====================================================================================
</TABLE>
<PAGE>
<PAGE> 9
Receivables Analysis
<TABLE>
<CAPTION>
End of Period Managed Receivables
- -----------------------------------------------------------------------------------------------------------------------
% Change from Prior
-------------------
($ millions) 03/31/00 12/31/99 03/31/99 Qtr. Year
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Real estate secured $30,844.5 $26,935.5 $23,718.2 14.5% 30.0%
Auto finance 3,403.2 3,039.8 2,046.1 12.0 66.3
MasterCard/Visa 15,512.3 15,793.1 15,133.0 (1.8) 2.5
Private label 11,007.6 11,269.7 10,134.2 (2.3) 8.6
Other unsecured 13,934.1 13,881.9 12,492.6 .4 11.5
Commercial and other 745.6 808.3 800.1 (7.8) (6.8)
- -----------------------------------------------------------------------------------------------------------------------
Managed portfolio $75,447.3 $71,728.3 $64,324.2 5.2% 17.3%
=======================================================================================================================
Receivables (% of Managed Portfolio)
- -----------------------------------------------------------------------------------------------------------------------
Real estate secured 40.9% 37.6% 36.9%
Auto finance 4.5 4.2 3.2
MasterCard/Visa 20.5 22.0 23.5
Private label 14.6 15.7 15.8
Other unsecured 18.5 19.4 19.4
Commercial and other 1.0 1.1 1.2
- -----------------------------------------------------------------------------------------------------------------------
Total 100.0% 100.0% 100.0%
=======================================================================================================================
End of Period Receivables ($ millions)
- -----------------------------------------------------------------------------------------------------------------------
Owned receivables:
Real estate secured $28,816.0 $24,661.9 $20,419.4 16.8% 41.1%
Auto finance 1,439.7 1,233.5 944.8 16.7 52.4
MasterCard/Visa 6,505.4 6,314.4 6,150.3 3.0 5.8
Private label 9,857.6 10,119.7 9,381.0 (2.6) 5.1
Other unsecured 8,825.7 9,151.6 7,707.5 (3.6) 14.5
Commercial and other 745.6 808.3 800.1 (7.8) (6.8)
- -----------------------------------------------------------------------------------------------------------------------
Total owned receivables 56,190.0 52,289.4 45,403.1 7.5 23.8
- -----------------------------------------------------------------------------------------------------------------------
Accrued finance charges 957.5 879.3 718.8 8.9 33.2
Credit loss reserve for owned receivables (1,909.7) (1,757.0) (1,729.7) 8.7 10.4
Unearned credit insurance premiums and claims reserves (558.1) (569.3) (492.3) (2.0) 13.4
Amounts due and deferred from receivables sales 2,367.7 2,225.6 2,151.2 6.4 10.1
Reserve for receivables serviced with limited recourse (951.4) (909.6) (814.8) 4.6 16.8
- -----------------------------------------------------------------------------------------------------------------------
Total owned receivables, net 56,096.0 52,158.4 45,236.3 7.5 24.0
- -----------------------------------------------------------------------------------------------------------------------
Receivables serviced with limited recourse:
Real estate secured 2,028.5 2,273.6 3,298.8 (10.8) (38.5)
Auto finance 1,963.5 1,806.3 1,101.3 8.7 78.3
MasterCard/Visa 9,006.9 9,478.7 8,982.7 (5.0) .3
Private label 1,150.0 1,150.0 753.2 - 52.7
Other unsecured 5,108.4 4,730.3 4,785.1 8.0 6.8
- -----------------------------------------------------------------------------------------------------------------------
Total receivables serviced with limited recourse 19,257.3 19,438.9 18,921.1 (.9) 1.8
- -----------------------------------------------------------------------------------------------------------------------
Total managed receivables, net $75,353.3 $71,597.3 $64,157.4 5.2% 17.5%
=======================================================================================================================
</TABLE>
<PAGE>
<PAGE> 10
Credit Quality/Credit Loss Reserves
<TABLE>
<CAPTION>
Two-Months-and-Over Contractual Delinquency
- -----------------------------------------------------------------------------------------------------------
As a percent of managed consumer receivables,
excludes commercial. 03/31/00 12/31/99 03/31/99
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Real estate secured 2.99% 3.27% 3.54%
Auto finance 1.52 2.43 1.74
MasterCard/Visa 3.06 2.78 3.61
Private label 5.94 5.97 6.37
Other unsecured 8.56 8.81 7.84
- -----------------------------------------------------------------------------------------------------------
Total 4.43% 4.66% 4.81%
===========================================================================================================
Quarter-to-Date Chargeoffs, Net of Recoveries
- -----------------------------------------------------------------------------------------------------------
As a percent of average managed consumer receivables,
annualized, excludes commercial.
Real estate secured .52% .54% .55%
Auto finance 5.25 5.43 5.45
MasterCard/Visa 5.69 5.57 7.59
Private label 5.65 5.88 5.53
Other unsecured 7.41 6.98 6.36
- -----------------------------------------------------------------------------------------------------------
Total 4.00% 3.96% 4.37%
===========================================================================================================
Nonperforming Assets
- -----------------------------------------------------------------------------------------------------------
($ millions)
- -----------------------------------------------------------------------------------------------------------
Nonaccrual managed receivables $1,934.2 $1,912.6 $1,597.5
Accruing managed receivables 90 or more days delinquent 755.0 739.9 819.8
Renegotiated commercial loans 12.3 12.3 12.3
- -----------------------------------------------------------------------------------------------------------
Total nonperforming managed receivables 2,701.5 2,664.8 2,429.6
Real estate owned 301.0 271.5 244.7
- -----------------------------------------------------------------------------------------------------------
Total nonperforming assets $3,002.5 $2,936.3 $2,674.3
===========================================================================================================
Managed credit loss reserves as a percent
of nonperforming managed receivables 105.9% 100.1% 104.7%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<PAGE> 11
Credit Quality/Credit Loss Reserves (continued)
<TABLE>
<CAPTION>
Credit Loss Reserves
- -----------------------------------------------------------------------------------------------------------------
($ millions) 03/31/00 12/31/99 03/31/99
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Reserves for owned receivables at beginning of quarter $1,757.0 $1,750.3 $1,734.2
Provision for credit losses 522.1 453.2 417.8
Chargeoffs, net of recoveries (482.2) (455.9) (432.1)
Portfolio acquisitions, net 112.8 9.4 9.8
- -----------------------------------------------------------------------------------------------------------------
Reserves for owned receivables at end of quarter 1,909.7 1,757.0 1,729.7
- -----------------------------------------------------------------------------------------------------------------
Credit loss reserves for receivables serviced
with limited recourse at beginning of quarter 909.6 855.5 813.9
Provision for credit losses 294.1 284.9 253.7
Chargeoffs, net of recoveries (249.8) (229.2) (261.4)
Other, net (2.5) (1.6) 8.6
- -----------------------------------------------------------------------------------------------------------------
Credit loss reserves for receivables serviced
with limited recourse at end of quarter 951.4 909.6 814.8
- -----------------------------------------------------------------------------------------------------------------
Total credit loss reserves at end of quarter $2,861.1 $2,666.6 $2,544.5
=================================================================================================================
Credit loss reserves
Owned $1,909.7 3.40%<F1> $1,757.0 3.36%<F1> 1,729.7 3.81%<F1>
Serviced with limited recourse 951.4 4.94 909.6 4.68 814.8 4.31
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Total managed credit loss reserves $2,861.1 3.79% $2,666.6 3.72% $2,544.5 3.96%
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<FN>
<F1> % Columns: comparisons to appropriate receivables.
</FN>
</TABLE>