<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-6154
ASSOCIATES CORPORATION OF NORTH AMERICA
(Exact name of registrant as specified in its charter)
Delaware 74-1494554
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
250 East Carpenter Freeway, Irving, Texas 75062-2729
(Address of principal executive offices)
(Zip Code)
972-652-4000
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes..X..
No.....
As of March 31, 1998, the registrant had 260 shares of Common Stock and
1,000,000 shares of Class B Common Stock issued and outstanding, all of
which were owned directly or indirectly by Associates First Capital
Corporation. The registrant meets the conditions set forth in General
Instruction H.(1)(a) and (b) to Form 10-Q and is therefore filing this
Form 10-Q with the reduced disclosure format.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
ASSOCIATES CORPORATION OF NORTH AMERICA
CONSOLIDATED STATEMENT OF EARNINGS
(In Millions)
Three Months Ended
March 31
1998 1997
---- ----
REVENUE
Finance charges $1,672.2 $1,517.2
Insurance premiums 98.2 87.6
Investment and other income 117.2 74.7
-------- --------
1,887.6 1,679.5
EXPENSES
Interest expense 692.2 584.1
Operating expenses 460.6 426.6
Provision for losses on finance
receivables - NOTE 6 326.1 295.6
Insurance benefits paid or provided 41.8 35.4
-------- --------
1,520.7 1,341.7
-------- --------
EARNINGS BEFORE PROVISION FOR INCOME TAXES 366.9 337.8
PROVISION FOR INCOME TAXES 131.4 122.4
-------- --------
NET EARNINGS $ 235.5 $ 215.4
======== ========
See notes to consolidated financial statements.
<PAGE>
ASSOCIATES CORPORATION OF NORTH AMERICA
CONSOLIDATED BALANCE SHEET
(Dollars In Millions)
March 31 December 31
1998 1997
-------- -----------
ASSETS
CASH AND CASH EQUIVALENTS $ 472.7 $ 294.8
INVESTMENTS IN DEBT AND EQUITY SECURITIES
- NOTE 4 1,328.4 1,153.5
FINANCE RECEIVABLES, net of unearned finance
income, allowance for credit losses and
insurance policy and claims reserves
- NOTE 5 45,364.2 45,430.2
OTHER ASSETS - NOTE 7 4,968.2 3,652.6
--------- ---------
Total assets $52,133.5 $50,531.1
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
NOTES PAYABLE, unsecured short-term
Commercial Paper $19,529.2 $17,184.5
Bank Loans 50.0 1,202.1
ACCOUNTS PAYABLE AND ACCRUALS 1,095.9 960.4
LONG-TERM DEBT, unsecured
Senior Notes 24,751.7 24,710.0
Subordinated and Capital Notes 425.4 425.4
--------- ---------
25,177.1 25,135.4
STOCKHOLDERS' EQUITY
Class B Common Stock, $100 par value,
2,000,000 shares authorized, 1,000,000
shares issued and outstanding 100.0 100.0
Common Stock, no par value, 5,000 shares
authorized, 260 shares issued and
outstanding, at stated value 47.0 47.0
Paid-in Capital 1,667.8 1,667.8
Retained Earnings 4,465.0 4,229.5
Accumulated Other Comprehensive Income
- NOTE 3 1.5 4.4
--------- ---------
Total stockholders' equity 6,281.3 6,048.7
--------- ---------
Total liabilities and stockholders'equity $52,133.5 $50,531.1
========= =========
See notes to consolidated financial statements.<PAGE>
ASSOCIATES CORPORATION OF NORTH AMERICA
CONSOLIDATED STATEMENT OF CASH FLOWS
(In Millions)
Three Months Ended
March 31
1998 1997
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 235.5 $ 215.4
Adjustments to reconcile net earnings to
net cash provided from operating activities:
Provision for losses on finance receivables 326.1 295.6
Increase in accounts payable and accruals 120.6 66.9
Depreciation and amortization 78.9 57.0
Unrealized gain on trading securities (7.0)
Purchases of trading securities (253.6)
Sales and maturities of trading securities 31.1
Deferred income taxes 16.4 (3.7)
Increase in insurance policy and claims
reserves 6.4 12.3
--------- --------
Net cash provided from operating
activities 554.4 643.5
--------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Finance receivables originated or purchased (10,398.5) (9,359.0)
Finance receivables liquidated 9,847.7 8,058.5
Finance receivables sold 234.9
Purchases of available-for-sale securities (227.8) (131.7)
Sales and maturities of available-for-sale
securities 277.7 25.5
Increase in other assets (1,344.8) (131.3)
--------- --------
Net cash used for investing
activities (1,610.8) (1,538.0)
--------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of long-term debt 1,551.9 501.7
Retirement of long-term debt (1,510.2) (640.5)
Increase in notes payable 1,192.6 1,006.3
--------- --------
Net cash provided from financing
activities 1,234.3 867.5
--------- --------
INCREASE (DECREASE)IN CASH AND CASH EQUIVALENTS 177.9 (27.0)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 294.8 278.4
--------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 472.7 $ 251.4
========= =========
CASH PAID FOR:
Interest $ 625.8 $ 541.5
========= =========
Income taxes $ 3.7 $ 2.4
========= =========
See notes to consolidated financial statements.<PAGE>
ASSOCIATES CORPORATION OF NORTH AMERICA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - THE COMPANY
Associates Corporation of North America ("Associates" or the
"Company"), a Delaware corporation, is a wholly-owned subsidiary and the
principal operating unit of Associates First Capital Corporation ("First
Capital"). Prior to April 7, 1998, First Capital was a majority
indirect-owned subsidiary of Ford Motor Company ("Ford"). On April 7,
1998, Ford completed a spin-off of its interest in First Capital in the
form of a tax-free distribution of its First Capital shares to Ford
common and Ford class B stockholders. All the outstanding Common Stock
of Associates is owned by First Capital. All shares of the Company's
Class B Common stock are owned by Associates World Capital Corporation,
a wholly-owned subsidiary of First Capital. Class B Common Stock is
redeemable only at the option of the issuer.
NOTE 2 - BASIS OF PRESENTATION
The accompanying consolidated financial statements consolidate
Associates and its subsidiaries. All significant intercompany balances
and transactions have been eliminated in consolidation. Certain prior
period financial statement amounts have been reclassified to conform to
the current period presentation.
In the opinion of the management of Associates, all adjustments
necessary to present fairly the results of operations and financial
position have been made and are of a normal recurring nature. The
results of operations for any interim period are not necessarily
indicative of the results of operations for a full year.
NOTE 3 - COMPREHENSIVE INCOME
The Company adopted Statement of Financial Accounting Standards No. 130
("SFAS 130"), "Reporting Comprehensive Income", on January 1, 1998.
Pursuant to SFAS 130, accumulated other comprehensive income was
reported on the consolidated balance sheet and consisted of net
unrealized losses on available-for-sale securities of $1.5 million and
$4.4 million at March 31, 1998 and December 31, 1997, respectively.
Comprehensive income for the three-month period ended March 31, 1998 and
1997 consisted of the following components (in millions):
Three Months Ended
March 31
1998 1997
Net earnings $235.5 $215.4
Unrealized loss on available-for-sale
securities (2.9) (10.4)
Comprehensive income $232.6 $205.0
NOTE 4 - INVESTMENTS IN DEBT AND EQUITY SECURITIES
AVAILABLE-FOR-SALE SECURITIES
The Company invests in debt and asset-backed securities,
principally bonds and notes held by the Company's insurance
subsidiaries, with the intention of holding them to maturity. However,
if market conditions change, the Company may sell these securities prior
to maturity. Accordingly, the Company classifies its investments in
these securities as available-for-sale securities and adjusts its
recorded value to market. The estimated market value at March 31, 1998
and December 31, 1997 was $1.0 billion for both periods. Amortized cost
at March 31, 1998 and December 31, 1997 was also $1.0 billion for both
periods. Realized gains or losses on sales are included in investment
and other income. Unrealized gains or losses are reported as a
component of stockholders' equity, net of tax.
TRADING SECURITIES
Trading securities, principally preferred stock, are recorded at
market value. Unrealized gains or losses on trading securities are
included in earnings. The estimated market value at March 31, 1998 and
December 31, 1997 was $360.6 million and $131.0 million, respectively.
Historical cost at March 31, 1998 and December 31, 1997 was $353.0
million and $126.7 million, respectively.
NOTE 5 - FINANCE RECEIVABLES
At March 31, 1998 and December 31, 1997, finance receivables
consisted of the following (in millions):
March 31 December 31
1998 1997
Consumer Finance
Home equity lending(1) $17,988.0 $17,437.3
Personal lending and retail sales finance 6,823.8 6,920.6
Credit card 6,908.7 7,333.6
Manufactured housing 24.5 24.1
31,745.0 31,715.6
Commercial Finance
Truck and truck trailer 9,314.1 9,011.1
Equipment(2) 4,400.6 4,899.8
Fleet leasing 1,442.8 1,418.9
Warehouse lending and other 924.7 809.1
16,082.2 16,138.9
Finance receivables, net of unearned
finance income ("net finance
receivables") 47,827.2 47,854.5
Allowance for losses on finance receivables (1,694.1) (1,661.9)
Insurance policy and claims reserves (768.9) (762.4)
Finance receivables, net of unearned
finance income, allowance for credit
losses and insurance policy and claims
reserves $45,364.2 $45,430.2
(1) In March 1998, the Company securitized and sold approximately $235
million of home equity lending receivables. No significant gain
or loss was recorded on this transaction. The Company retained
the servicing responsibilities for these receivables.
(2) In March 1998, approximately $650 million of equipment finance
receivables were sold at book value to First Capital. No gain or
loss was recorded on the sale.
NOTE 6 - ALLOWANCE FOR LOSSES ON FINANCE RECEIVABLES
Changes in the allowance for losses on finance receivables during
the periods indicated were as follows (in millions):
Three Months Ended Year Ended
March 31 December 31
1998 1997 1997
---- ---- ----
Balance at beginning of period $1,661.9 $1,371.4 $1,371.4
Provision for losses 326.1 295.6 1,195.6
Recoveries on receivables
charged off 51.9 40.6 190.5
Losses sustained (347.9) (290.6) (1,298.3)
Reserves of acquired businesses
and other 2.1 51.4 202.7
-------- -------- --------
Balance at end of period $1,694.1 $1,468.4 $1,661.9
======== ======== ========
NOTE 7 - OTHER ASSETS
The components of other assets at March 31, 1998 and December 31,
1997 were as follows (in millions):
March 31 December 31
1998 1997
-------- -----------
Balances with related parties $3,639.6 $2,331.0
Goodwill 338.7 343.1
Collateral held for resale 220.1 205.6
Property and equipment 176.9 164.2
Other 592.9 608.7
-------- --------
Total other assets $4,968.2 $3,652.6
======== ========
NOTE 8 - DEBT RESTRICTIONS
Associates is subject to various limitations under the provisions
of its outstanding debt and credit facilities. The most significant of
these limitations are summarized as follows:
LIMITATION ON PAYMENT OF DIVIDENDS
A restriction contained in one issue of debt securities which
matures on March 15, 1999, generally limits payments of cash dividends
on the Company's Common Stock in any year to not more than 50% of
consolidated net earnings for such year, subject to certain exceptions,
plus increases in contributed capital and extraordinary gains. Any such
amounts available for the payment of dividends in such fiscal year and
not so paid, may be paid in any one or more of the five subsequent
fiscal years. In accordance with this provision, $899 million was
available for dividends at March 31, 1998.
LIMITATION ON MINIMUM TANGIBLE NET WORTH
A restriction contained in certain revolving credit agreements
requires Associates to maintain a minimum tangible net worth, as
defined, of $2.0 billion. At March 31, 1998, Associates tangible net
worth was approximately $5.9 billion.
NOTE 9 - DERIVATIVE FINANCIAL INSTRUMENTS
The Company uses derivative financial instruments for the purpose
of hedging specific exposures as part of its risk management program.
Such instruments to date have been limited to currency swap, interest
rate swap, treasury lock agreements and treasury futures and option
contracts.
Foreign currency swap agreements are held for purposes other than
trading and have been designated for accounting purposes as hedges of
specific debt obligations. Under these agreements, the Company is
obligated to deliver or receive a specific foreign currency in exchange
for United States dollars at varying times over the next 3 years. The
aggregate notional amount of these agreements at both March 31, 1998 and
December 31, 1997 was $272.7 million. The fair value of such agreements
at March 31, 1998 and December 31, 1997 was $(10.2) million and $1.2
million, respectively.
Interest rate swap and treasury lock agreements are held for
purposes other than trading and are used by the Company to hedge the
effect of interest rate movements on existing debt and anticipated debt
and asset securitization transactions. The aggregate notional amount of
interest rate swap and treasury lock agreements at both March 31, 1998
and December 31, 1997 was $2.0 billion. The fair value of such
agreements at March 31, 1998 and December 31, 1997 was $(6.3) million
and $(6.8) million, respectively. Interest rate swap and treasury lock
agreements mature on varying dates over the next 2 years and 6 months,
respectively.
Treasury futures and option contracts are used to minimize income
fluctuations on preferred stock investments and are held for purposes
other than trading. The aggregate notional amount and fair value of
futures and options contracts at March 31, 1998 was $124.0 million and
$0.9 million, respectively. Such contracts mature in June 1998.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis has been prepared in
accordance with General Instruction H.(2)(a) to Form 10-Q, and should be
read in conjunction with the consolidated financial statements of the
Company and the related notes thereto.
Results of Operations
Net earnings for the three-month period ended March 31, 1998 were
$235.5 million, a 9% increase over the same period in the previous year.
The increase in earnings was principally due to revenue from the growth
in net finance receivables, partially offset by an increase in the
provision for losses on finance receivables.
Finance charge revenue increased for the three months ended March
31, 1998, compared to the same period in the prior year, principally as
a result of growth in average net finance receivables outstanding.
Finance charge revenue as a percentage of average net finance
receivables (the "Finance Charge Ratio") was 13.98% for the first
quarter of 1998 compared to 14.19% for the same period in 1997. The
decrease in the Finance Charge Ratio was principally due to a shift
toward a higher percentage of secured receivables as a percentage of
total receivables. Secured receivables generally have lower finance
charge rates than unsecured receivables.
Interest expense increased for the first quarter of 1998 compared
to the same period in 1997, primarily due to an increase in average debt
outstanding related to the aforementioned growth in average net finance
receivables. Debt is the primary source of funding to support the
Company's growth in net finance receivables. Also contributing to the
increase in interest expense was a slight increase in the Company's
total average borrowing rate to 6.28% for the first quarter of 1998
compared to 6.24% for the same period in the prior year.
As a result of the above fluctuations, the Company's net interest
margin increased to $979.9 million for the first quarter of 1998
compared to $933.1 million for the prior-year period. The Company's net
interest margin expressed as a ratio to average net finance receivables
declined to 8.19% from 8.73% for the same period in the prior year.
First quarter operating expenses were higher on a dollar basis in
1998 than in 1997, reflecting the growth in the size of the Company.
The Company's provision for losses increased from $295.6 million
during the first quarter of 1997 to $326.1 million for the same period
in 1998. Total net credit losses as a percentage of average net
receivables (the "Loss Ratio") were 2.47% for the first quarter of 1998
compared to 2.34% for the same period in 1997, primarily due to
increased losses in the Company's unsecured portfolios. Unsecured
portfolio loss increases were primarily driven by high consumer debt
levels and increased bankruptcies.
The provision for income taxes increased for the three-month
period ended March 31, 1998 compared to the first quarter of 1997,
principally as a result of an increase in pretax earnings.
Financial Condition
The growth in net finance receivables during the first quarter of
1998 was offset by the securitization of approximately $235 million of
home equity receivables and the sale of approximately $650 million of
equipment finance receivables at book value to First Capital. Both
transactions were recorded in March 1998 and no significant gain or loss
was recorded on either transaction. As a result of these transactions,
net finance receivables experienced a net decrease of $27.3 million for
the first quarter of 1998, compared to an increase of $1.1 billion for
the same period in 1997.
Composite 60+days contractual delinquency was 2.41% of gross
finance receivables at March 31, 1998, which was higher than the 2.35%
at December 31, 1997 and the 2.33% at March 31, 1997. Accordingly, the
allowance for losses to net finance receivables increased to 3.54% at
March 31, 1998 from 3.47% at December 31, 1997. The allowance for
losses divided by net credit losses (trailing four quarters) was 1.49 at
March 31, 1998 compared to 1.50 and 1.66 at December 31, 1997 and March
31, 1997, respectively. Company management believes the allowance for
losses at March 31, 1998 is sufficient to provide adequate coverage
against losses in its portfolios.
During the three months ended March 31, 1998, stockholders' equity
increased to $6.3 billion, principally as a result of net earnings.
As a result of the aforementioned, the Company's return on average
assets, average equity and average tangible equity for the three-month
period ended March 31, 1998 was 1.84%, 15.30%, and 16.19%, respectively.
This compares to a return on average assets, average equity and average
tangible equity for the three months ended March 31, 1997 of 1.97%,
16.61% and 17.82%, respectively.
LIQUIDITY/CAPITAL RESOURCES
Through its asset and liability management function, the Company
maintains a disciplined approach to the management of liquidity, capital
and interest rate risk. The Company has a formal process for managing
its liquidity to ensure that funds are available at all times to meet
the Company's commitments.
The principal sources of cash for the Company are proceeds from
the issuance of short- and long-term debt and cash provided from the
Company's operations. While First Capital has made periodic capital
contributions to the Company in the past, no assurance can be made with
respect to future capital contributions by First Capital to the Company.
Nevertheless, management believes that the Company has available
sufficient liquidity, from a combination of cash provided from
operations and external borrowings, to support its operations.
A principal strength of the Company is its ability to access the
global debt markets in a cost-efficient manner. Continued access to the
public and private debt markets is critical to the Company's ability to
continue to fund its operations. The Company seeks to maintain a
conservative liquidity position and actively manage its liability and
capital levels, debt maturities, diversification of funding sources and
asset liquidity to ensure that it is able to meet its obligations as
they mature. The Company's operations are principally funded through
commercial paper borrowings made domestically and long-term debt
borrowings made both domestically and internationally.
At March 31, 1998, the Company had short- and long-term debt
outstanding of $19.6 billion and $25.2 billion, respectively. Short-term
debt principally consists of commercial paper issued by the Company
and represents the Company's primary source of short-term liquidity.
Long-term debt principally consists of senior unsecured long-term debt
issued publicly and privately by the Company in the United States and
abroad. During the three months ended March 31, 1998 and 1997, the
Company raised debt aggregating $1.6 billion and $501.7 million,
respectively, through public and private offerings.
Substantial additional liquidity is available to the Company's
operations through established credit facilities in support of its net
short-term borrowings. Such credit facilities provide a means of
refinancing its maturing short-term obligations as needed. At March 31,
1998, these bank lines, revolving credit facilities and receivable
purchase facilities totaled $15.9 billion, of which $1.4 billion was
allocated for use by First Capital. The remaining $14.5 billion
represents 75% of net short-term indebtedness outstanding at March 31,
1998.
Associates has entered into various support agreements on behalf
of its foreign affiliates. Under these support agreements, Associates
has either guaranteed specific issues of such affiliates' debt
denominated in foreign currency or agreed to provide additional support
on a lender's reasonable request. As of March 31, 1998, the amount
guaranteed by the Company including principal and accrued interest
totaled $2.2 billion.
Additionally, the Company believes it has access to other sources
of liquidity, which to date it has either accessed only on a limited
basis, such as securitization of assets, or has not accessed, such as
the issuance of alternative forms of capital, including preferred stock.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to a variety of market risks, including the
effects of movements in interest rates. Interest rate exposures are
monitored and managed by the Company as an integral part of its overall
risk management program. The principal goal of the Company's risk
management program is to reduce the potential impact of interest rate
exposures on the Company's financial position and operating performance.
The Company utilizes derivative financial instruments as part of its
overall risk management program. See NOTE 9 of the consolidated
financial statements for a further discussion of the Company's use of
derivative financial instruments.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None to report.
In accordance with General Instruction H.(2)(b), the following items
have been omitted: Item 2, Changes in Securities; Item 3, Defaults Upon
Senior Securities; and Item 4, Submission of Matters to a Vote of
Security Holders.
ITEM 5. OTHER INFORMATION.
The Company desires to take advantage of the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995 (the
"1995 Act"). The 1995 Act provides a "safe harbor" for forward-looking
statements to encourage companies to provide information without fear of
litigation so long as those statements are identified as forward-looking
and are accompanied by meaningful cautionary statements identifying
important factors that could cause actual results to differ materially
from those projected. Although the Company does not anticipate that it
will make forward-looking statements as a general policy, the Company
will make forward-looking statements as required by law or regulation,
and from time to time may make such statements with respect to
management's estimation of the future operating results and business of
the Company.
The Company hereby incorporates into this report by reference to
its form 10-K for the year ended December 31, 1997 the cautionary
statements found on page 23-24 of such form 10-K.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
(12) Computation of Ratio of Earnings to Fixed Charges.
(27) Financial Data Schedule.
(b) Reports on Form 8-K
During the first quarter ended March 31, 1998, Associates filed
Current Reports on Form 8-K dated January 20, 1998 (announcing
financial results for the year ended December 31, 1997);
January 7, 1998 and March 25, 1998 (each related to an issuance
of debt securities pursuant to Rule 415); and March 3, 1998
(announcing final approval of Ford's spin-off of First
Capital).
<PAGE>
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 thereunto duly authorized.
May 13, 1998
ASSOCIATES CORPORATION OF NORTH AMERICA
(registrant)
By /s/ John F. Stillo
----------------------------------
Senior Vice President, Comptroller and
Principal Accounting Officer
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
NUMBER EXHIBIT PAGE
-----------------------------------------------------------------------------
<S> <C> <C>
12 -- Computation of Ratio of Earnings to Fixed Charges
27 -- Financial Data Schedule
</TABLE>
------------
<PAGE>
EXHIBIT 12
ASSOCIATES CORPORATION OF NORTH AMERICA
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in Millions)
Three Months Ended
March 31
1998 1997
---- ----
Fixed Charges (a)
Interest expense $692.2 $584.1
Implicit interest in rent 4.7 4.1
Total fixed charges $696.9 $588.2
Earnings (b)
Earnings before provision for income
taxes $366.9 $337.8
Fixed charges 696.9 588.2
Earnings, as defined $1,063.8 $926.0
Ratio of Earnings to Fixed Charges 1.53 1.57
(a For purposes of such computation, the term "fixed charges"
represents interest expense and a portion of rentals representative
of an implicit interest factor for such rentals.
(b For purposes of such computation, the term "earnings" represents
earnings before provision for income taxes, plus fixed charges.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
0 MEANS NOT APPLICABLE OR NOT SEPARATELY DISCLOSED. This schedule
contains summary financial information extracted from the Company's
unaudited consolidated financial statements as of March 31, 1998 and the
three months then ended and is qualified in its entirety by reference to
such consolidated financial statements.
</LEGEND>
<CIK> 0000007973
<NAME> ASSOCIATES CORPORATION OF NORTH AMERICA
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1998
<CASH> 473
<SECURITIES> 1,328
<RECEIVABLES> 47,827
<ALLOWANCES> 1,694
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 52,133
<CURRENT-LIABILITIES> 0
<BONDS> 44,756
<COMMON> 147
0
0
<OTHER-SE> 6,134
<TOTAL-LIABILITY-AND-EQUITY> 52,133
<SALES> 1,888
<TOTAL-REVENUES> 1,888
<CGS> 0
<TOTAL-COSTS> 1,521
<OTHER-EXPENSES> 503
<LOSS-PROVISION> 326
<INTEREST-EXPENSE> 692
<INCOME-PRETAX> 367
<INCOME-TAX> 132
<INCOME-CONTINUING> 235
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 235
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
