<PAGE>
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)October 15, 1996
ASSOCIATES CORPORATION OF NORTH AMERICA
(Exact name of registrant as specified in its charter)
DELAWARE 74-1494554
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation)
1-6154
(Commission File Number)
250 E. Carpenter Freeway, Irving, Texas 75062-2729
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (972) 541-4000
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Item 5. Other Events.
Associates Corporation of North America (the "Company") recorded net earnings
for the three months ended September 30, 1996 of $207.1 million, compared with
$188.2 million a year earlier, a 10% increase. Earnings before provision for
income taxes increased 9% to $326.4 million for the period compared with
$298.7 million for the prior year.
Total assets at September 30, 1996, were $42.5 billion, an increase of 19%
from $35.8 billion a year ago.
Revenue for the period increased 16% to $1.6 billion, compared with $1.4
billion in the prior-year period. Net finance receivables outstanding at
September 30, 1996 were $41.7 billion, compared with $35.1 billion for the
prior-year period, a 19% increase.
Consumer finance net receivables outstanding were $28.2 billion at September
30, 1996, up 18% from the $24.0 billion reported for the prior-year period.
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 $13.5 billion at
September 30, 1996, up 21% from the $11.1 billion reported a year ago.
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.
Loans delinquent 60-days-or-more increased to 2.10% at September 30 compared
to 1.83% for the second quarter of 1996 and 1.61% a year ago. The increase in
delinquency is reflective of the generally less favorable trends in economic
conditions that have affected most lenders. Losses were 2.16% of average net
receivables for the third quarter compared to 1.94% in the second quarter and
1.74% a year ago. The Company's allowance for losses was 3.25% of net
receivables at September 30, 1996, compared to 3.29% at June 30, 1996 and
3.04% a year ago.
Revenue from insurance premiums for the period was $90.8 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 amounts in
millions):
<TABLE>
<CAPTION>
Nine Months Ended or at Three Months Ended or at
September 30 September 30
------------------------ % ------------------------- %
1996 1995 Increase 1996 1995 Increase
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
TOTAL REVENUE $ 4,575.2 $ 3,973.3 15 $ 1,608.7 $ 1,381.5 16%
EARNINGS BEFORE PROVISION
FOR INCOME TAXES 959.5 833.2 15 326.4 298.7 9
NET EARNINGS 606.4 526.9 15 207.1 188.2 10
</TABLE>
<TABLE>
<CAPTION>
BALANCE SHEET September 30 December 31 September 30
1996 1995 1995
------------ ----------- ----- -------
<S> <C> <C> <C>
NET FINANCE RECEIVABLES
Consumer Finance $ 28,219.7 $ 24,609.2 $ 24,004.6
Commercial Finance 13,440.2 11,759.1 11,065.6
-------- -------- --------
Total Net Finance Receivables $ 41,659.9 $ 36,368.3 $ 35,070.3
========= ========= ==========
TOTAL ASSETS $ 42,457.6 $ 37,023.7 $ 35,797.2
TOTAL DEBT 36,530.3 31,746.2 30,553.4
STOCKHOLDERS' EQUITY 5,082.4 4,444.0 4,334.3
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO QUALITY September 30 JUNE 30 DECEMBER 31 September 30
1996 1996 1995 1995
------------ -------- ------------ ------------
<S> <C> <C> <C> <C>
60+ DAYS CONTRACTUAL DELINQUENCY 2.10% 1.83% 1.72% 1.61%
CREDIT LOSSES (% ANR) 2.16 1.94 1.73 1.74
ALLOWANCE FOR LOSSES ON FINANCE
RECEIVABLES 3.25 3.29 3.05 3.04
/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: October 15, 1996
