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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) April 15, 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 three-month period ended March 31, 1997 of $215.4 million, compared
with $193.8 million a year earlier, an 11% increase. Earnings before provision
for income taxes increased 9% to $337.8 million for the period, compared with
$308.8 million the prior year.
Total revenue for the period increased 15% to $1.7 billion, compared with $1.5
billion in the prior-year period. Total net finance receivables at March 31,
1997 were $42.8 billion compared to $41.8 billion at December 31, 1996 and
$37.6 billion at March 31, 1996.
Consumer finance net receivables were $28.9 billion at March 31, 1997, up from
$28.0 billion reported at December 31, 1996 and $25.6 billion at March 31,
1996. 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 were $14.0 billion at March 31, 1997, up
from $13.8 billion reported at December 31, 1996 and $12.0 billion at March 31,
1996. 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.
The Company's ratios of net credit loss to average net receivables increased
across most of its portfolios during the first quarter of 1997. Management
attributes the increase in losses 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
increased to 3.43% at March 31, 1997 from 3.28% at December 31, 1996 and 3.21%
at March 31, 1996. The increases reflect management's opinion that net credit
losses may continue to increase in 1997. Management believes the allowance for
losses at March 31, 1997 is sufficient to provide adequate protection against
losses in its portfolios.
<TABLE>
<CAPTION>
ASSOCIATES CORPORATION OF NORTH AMERICA
Three Months Ended
March 31
1997 1996
<S> <C> <C>
TOTAL REVENUE $ 1,679.5 $ 1,454.2
EARNINGS BEFORE PROVISION
FOR INCOME TAXES 337.8 308.8
NET EARNINGS 215.4 193.8
BALANCE SHEET
</TABLE>
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<TABLE>
<CAPTION
March 31 December 31 March 31
1997 1996 1996
<S> <C> <C> <C>
NET FINANCE RECEIVABLES
Consumer Finance $28,876.2 $27,997.1 $25,578.0
Commercial Finance 13,970.4 13,781.8 11,998.8
Total Net Finance
Receivables $42,846.6 $41,778.9 $37,576.8
TOTAL ASSETS $43,728.2 $42,598.1 $38,165.9
TOTAL DEBT 37,398.8 36,531.3 32,566.1
STOCKHOLDERS' EQUITY 5,291.2 5,086.2 4,624.1
PORTFOLIO QUALITY
60+DAYS CONTRACTUAL
DELINQUENCY 2.33% 2.29% 1.79%
NET CREDIT LOSSES (as
a % of ANR) 2.34 2.02 1.74
ALLOWANCE FOR LOSSES ON
FINANCE RECEIVABLES
Amount $ 1,468.4 $ 1,371.4 $ 1,205.9
Percent of net finance
receivables 3.43% 3.28% 3.21%
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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: April 15, 1997
