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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)January 28, 1997
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) 652-4000
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Item 5. Other Events.
Associates Corporation of North America (the "Company") recorded net earnings
for the year ended December 31, 1996 of $823.1 million, compared with $708.1
million a year earlier, a 16% increase. Earnings before provision for income
taxes increased 16% to $1.3 billion for the period, compared with $1.1 billion
for the prior year.
Revenue for the year increased 16% to $6.2 billion, compared with $5.4
billion in the prior year. Net finance receivables outstanding at
December 31, 1996 were $41.8 billion, compared with $36.4 billion at
December 31, 1995, a 15% increase.
Consumer finance net receivables outstanding were $28.0 billion at December 31,
1996, up 14% from the $24.6 billion reported for the prior year. Consumer
finance receivables consist of residential real estate-secured receivables,
personal loans, sales financing of consumer durable goods, manufactured
housing receivables and credit card participations in receivables.
Commercial finance net receivables outstanding totaled $13.8 billion at December
31, 1996, up 17% from the $11.8 billion reported a year ago. Commercial finance
receivables result from the financing and leasing of transportation,
construction, communications, material handling and industrial equipment.
The Company is also a
significant provider of automobile fleet leasing services and other products and
services, including recreational vehicle financing, municipal leasing, small
business lending, employee relocation services and emergency roadside assistance
and auto club services.
The Company's ratios of net credit losses to average net receivables and 60+days
contractual delinquency increased across most of its portfolios during 1996 from
1995. Management attributes these increases to the generally less favorable
trends in economic conditions, including rising consumer debt levels and
decreased manufacturing capacity utilization in areas of the commercial
market served by the Company. The allowance for losses as a percent of net
finance receivables also increased to 3.28% at December 31, 1996 from 3.05%,
at December 31, 1995. The increase reflects management's opinion that
delinquency and net credit losses may
continue to increase in 1997. Management believes the allowance for losses at
December 31, 1996 is sufficient to provide adequate protection against losses in
its portfolios.
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Certain financial information is as follows (dollar amounts im millions):
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<CAPTION>
Year Ended or at
December 31
------------------------ %
1996 1995 Increase
---- ---- --------
<S> <C> <C> <C>
TOTAL REVENUE $ 6,221.4 $ 5,384.4 16
EARNINGS BEFORE PROVISION
FOR INCOME TAXES 1,305.1 1,121.4 16
NET EARNINGS 823.1 708.1 16
NET FINANCE RECEIVABLES
Consumer Finance $27,997.1 $24,609.2 14
Commercial Finance 13,781.8 11,759.1 17
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Total Net Finance Receivables $41,778.9 $36,368.3 15
========= =========
TOTAL ASSETS $42,598.1 $37,023.7 15
TOTAL DEBT 36,531.3 31,746.2 15
STOCKHOLDERS' EQUITY 5,086.2 4,444.0 14
60+DAYS CONTRACTUAL DELINQUENCY 2.29 % 1.72 %
NET CREDIT LOSSES (as a % of ANR) 2.02 1.66
ALLOWANCE FOR LOSSES ON
FINANCE RECEIVABLES
Amount $ 1,371.4 $ 1,109.2 24
Percent of net finance receivables 3.28 % 3.05 %
NUMBER OF BRANCHES 1,625 1,543 5
NUMBER OF EMPLOYEES 16,238 14,568 11
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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/ KEVIN P. HEGARTY
Senior Vice President and Comptroller
Date: January 28, 1997
