SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event)April 18, 1996
ASSOCIATES CORPORATION OF NORTH AMERICA
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
(Commission File Number) 1-6154
(I.R.S. Employer
Identification Number) 74-1494554
250 E. Carpenter Freeway, Irving, Texas 75062-2729
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (214) 541-4000<PAGE>
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Item 5. Other Events.
Associates Corporation of North America (the "Company") recorded net earnings
for the three months ended March 31, 1996 of $193.8 million, compared with
$166.0 million a year earlier, a 17% increase. Earnings before provision for
income taxes increased 19% to $308.8 million for the period compared with
$259.6 million for the prior year.
Total assets at March 31, 1996, were $38.2 billion, an increase of 16% from
$33.0 billion a year ago. Foreign assets, managed by the Company on behalf of
its ultimate parent corporation, Ford Motor Company, were $4.2 billion. The
results and assets of these foreign operations are not included in those of
the Company.
Revenue for the period increased 15% to $1.5 billion, compared with $1.3
billion in the prior-year period. Net finance receivables outstanding at
March 31, 1996 were $37.6 billion, compared with $32.2 billion for the
prior-year period, a 17% increase.
Consumer finance net receivables outstanding were $25.6 billion at March 31,
1996, up 16% from the $22.1 billion reported for the prior-year period.
Consumer finance net volume for the period was $5.8 billion. Consumer finance
receivables consist of home equity receivables, personal loans, sales
financing of manufactured housing and consumer durable goods, and credit card
participations in receivables.
Commercial finance net receivables outstanding totaled $12.0 billion at March
31, 1996, up 18% from the $10.1 billion reported a year ago. Commercial
finance net volume for the period was $3.1 billion. Commercial finance
receivables result from the sales financing and leasing of transportation,
construction, communications and other industrial equipment. The Company is
also a provider of automobile club and relocation services.
The Company's ratio of net losses to average net receivables increased across
most of its portfolios during the first three months of 1996 compared to the
same period in the prior year, principally as a result of less favorable
trends in economic conditions. Sixty plus days contractual delinquency was
higher at March 31,1996 compared to December 31, 1995, but has declined each
month since January 1996. While contractual delinquency has moderated since
January, the increase in net credit losses and the uncertainty in economic
conditions led the Company to increase its allowance for losses to 3.21% of
net receivables at March 31, 1996.
Revenue from insurance premiums for the period was $81.6 million. The
insurance operation is principally engaged in underwriting credit life, credit
accident and health, and property and casualty insurance for customers of the
finance operations.
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Certain unaudited financial information is as follows (dollar mounts in
millions):
<TABLE>
<CAPTION>
Three Months Ended or at
March 31
------------------------ %
1996 1995 Increase
---- ---- --------
<S> <C> <C> <C>
EARNINGS BEFORE PROVISION
FOR INCOME TAXES $ 308.8 $ 259.6 19%
NET EARNINGS 193.8 166.0 17
STOCKHOLDERS' EQUITY 4,622.4 3,961.0 17
NET FINANCE RECEIVABLES
Consumer Finance $25,578.0 $22,072.2 16
Commercial Finance 11,998.8 10,174.1 18
-------- --------
Total Net Finance Receivables $37,576.8 $33,246.3 17
======== ========
TOTAL ASSETS $38,165.9 $33,013.7 16
60+ days contractual deliquency 1.79% 1.40%
NET CREDIT LOSSES TO AVERAGE NET
RECEIVABLES 1.74 1.64
ALLOWANCE FOR LOSSES ON FINANCE
RECEIVABLES 3.21 3.02 24
NET FINANCE VOLUME
Consumer Finance $ 5,799.5 $ 4,858.1 19
Commercial Finance 3,107.2 2,918.7 6
-------- -------
Total Net Finance Volume $ 8,906.7 $ 7,776.8 15
======= =======
NUMBER OF BRANCHES 1,575 1,495 5
NUMBER OF EMPLOYEES 14,885 13,744 8
</TABLE>
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SIGNATURE
Pursuant to the requirements 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.
ASSOCIATES CORPORATION OF NORTH AMERICA
By: /s/ C. D. LONGENECKER
Executive Vice President
and General Counsel
Date: April 18, 1996
