<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) July 16, 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 (214) 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 June 30, 1996 of $205.5 million, compared with
$172.7 million a year earlier, a 19% increase. Earnings before provision for
income taxes increased 18% to $324.3 million for the period compared with
$274.9 million for the prior year.
Total assets at June 30, 1996, were $40.2 billion, an increase of 17% from
$34.4 billion a year ago.
Revenue for the period increased 14% to $1.5 billion, compared with $1.3
billion in the prior-year period. Net finance receivables outstanding at
June 30, 1996 were $39.5 billion, compared with $33.8 billion for the
prior-year period, a 17% increase.
Consumer finance net receivables outstanding were $27.0 billion at June 30,
1996, up 18% from the $23.0 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 $12.5 billion at
June 30, 1996, up 15% from the $10.8 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 1.83% at June 30 compared to
1.79% for the first quarter of 1996 and 1.39% 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 1.94% of average net
receivables for the second quarter compared to 1.74% in the first quarter and
1.50% a year ago. The Company increased its allowance for losses to 3.29% of
net receivables, compared to 3.21% in the first quarter and 3.04% a year ago.
Revenue from insurance premiums for the period was $88.2 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>
Six Months Ended or at Three Months Ended or at
June 30 June 30
------------------------ % ------------------------- %
1996 1995 Increase 1996 1995 Increase
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
TOTAL REVENUE $ 2,966.6 $2,591.8 14% $ 1,512.4 $ 1,328.6 14%
EARNINGS BEFORE PROVISION
FOR INCOME TAXES 633.1 534.5 18 324.3 274.9 18
NET EARNINGS 399.3 338.7 18 205.5 172.7 19
</TABLE>
<TABLE>
<CAPTION>
BALANCE SHEET June 30 December 31 June 30
1996 1995 1995
------- ----------- -------
<S> <C> <C> <C>
NET FINANCE RECEIVABLES
Consumer Finance $ 26,997.4 $ 24,609.2 $ 22,976.0
Commercial Finance 12,454.3 11,759.1 10,785.4
-------- -------- --------
Total Net Finance Receivables $ 39,451.7 $36,368.3 $ 33,761.4
========= ========= ==========
TOTAL ASSETS $ 40,186.1 $ 37,023.7 $ 34,393.5
TOTAL DEBT 34,630.6 31,746.2 29,461.3
STOCKHOLDERS' EQUITY 4,824.6 4,444.0 4,146.4
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO QUALITY JUNE 30 MARCH 31 DECEMBER 31 JUNE 30
1996 1996 1995 1995
------- -------- ------------ --------
<S> <C> <C> <C> <C>
60+ DAYS CONTRACTUAL DELINQUENCY 1.83% 1.79% 1.72% 1.39%
CREDIT LOSSES (% ANR) 1.94 1.74 1.73 1.50
ALLOWANCE FOR LOSSES ON FINANCE 3.29 3.21 3.05 3.04
RECEIVABLES
/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: July 16, 1996
