<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 September 30, 1996
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 2-44197
ASSOCIATES FIRST CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 06-0876639
(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)
972-541-4000
(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 September 30, 1996, the registrant had 1,550,000,000 shares of Common
Stock authorized, 90,773,299 shares of Class A Common Stock issued and
outstanding and 255,881,180 shares of Class B Common Stock issued and
outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
ASSOCIATES FIRST CAPITAL CORPORATION
CONSOLIDATED STATEMENT OF EARNINGS
(In Millions)
Nine Months Ended Three Months Ended
September 30 September 30
1996 1995 1996 1995
REVENUE
Finance charges $4,753.3 $4,093.4 $1,680.7 $1,426.6
Insurance premiums 297.6 279.3 104.0 91.9
Investment and other
income 154.7 132.6 58.9 47.1
5,205.6 4,505.3 1,843.6 1,565.6
EXPENSES
Interest expense 1,811.7 1,607.0 637.7 557.5
Operating expenses 1,462.9 1,307.3 518.5 433.6
Provision for losses on
finance receivables 795.4 612.6 267.4 210.8
Insurance benefits paid
or provided 109.9 104.9 38.7 36.1
4,179.9 3,631.8 1,462.3 1,238.0
EARNINGS BEFORE PROVISION
FOR INCOME TAXES 1,025.7 873.5 381.3 327.6
PROVISION FOR INCOME TAXES 403.0 345.2 151.1 130.0
NET EARNINGS $ 622.7 $ 528.3 $ 230.2 $ 197.6
EARNINGS PER SHARE $ 1.79 $ 1.52 $ 0.66 $ 0.57
See notes to consolidated financial statements.
<PAGE>
ASSOCIATES FIRST CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEET
(In Millions)
September 30 December 31
1996 1995
ASSETS
CASH AND CASH EQUIVALENTS $ 421.7 $ 532.2
INVESTMENTS IN DEBT AND EQUITY SECURITIES
- NOTE 3 996.1 881.1
FINANCE RECEIVABLES, net of unearned finance
income - NOTE 4
Consumer Finance 31,534.7 27,575.3
Commercial Finance 14,490.4 12,127.2
Total net finance receivables 46,025.1 39,702.5
ALLOWANCE FOR LOSSES ON FINANCE RECEIVABLES
- NOTE 5 (1,535.1) (1,268.6)
INSURANCE POLICY AND CLAIMS RESERVES (687.5) (625.4)
OTHER ASSETS - NOTE 6 2,330.3 2,082.1
Total assets $47,550.6 $41,303.9
LIABILITIES AND STOCKHOLDERS' EQUITY
NOTES PAYABLE, unsecured short-term
Commercial Paper $16,581.2 $12,902.9
Bank Loans 278.3 844.4
ACCOUNTS PAYABLE AND ACCRUALS 1,505.9 1,382.9
LONG-TERM DEBT
Senior Notes 23,805.0 21,230.8
Subordinated and Capital Notes 125.5 141.8
23,930.5 21,372.6
STOCKHOLDERS' EQUITY
Common Stock, no par value, 250 shares
authorized, issued and outstanding, at
stated value 47.0
Class A Common Stock, $0.01 par value,
1,150,000,000 shares authorized,
90,773,299 shares issued and outstanding 0.9
Class B Common Stock, $0.01 par value,
400,000,000 shares authorized,
255,881,180 shares issued and outstanding 2.6
Paid-in Capital 4,007.3 2,066.0
Retained Earnings 1,003.3 2,345.3
Foreign Currency Translation Adjustments 245.8 330.6
Unrealized (Loss) Gain on Available-for-Sale
Securities - NOTE 3 (5.2) 12.2
Total stockholders' equity 5,254.7 4,801.1
Total liabilities and stockholders' equity $47,550.6 $41,303.9
See notes to consolidated financial statements.
<PAGE>
ASSOCIATES FIRST CAPITAL CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(In Millions)
Nine Months Ended
September 30
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 622.7 $ 528.3
Adjustments to net earnings for noncash items:
Provision for losses on finance receivables 795.4 612.6
Depreciation and amortization 159.1 119.9
Increase in accounts payable and accruals 125.4 286.0
Increase in insurance policy and claims
reserves 62.1 50.3
Deferred income taxes (54.2) 42.6
Unrealized gain on trading securities (0.3) (4.3)
Purchases of trading securities (5.8)
Sales and maturities of trading securities 3.3 39.3
Net cash provided from operating activities 1,713.5 1,668.9
CASH FLOWS FROM INVESTING ACTIVITIES
Finance receivables originated or purchased (32,882.8) (27,510.0)
Finance receivables liquidated 25,283.0 22,492.3
Finance receivables securitized 1,125.6
Acquisitions of other finance businesses, net (165.6) (116.1)
Excess of purchase price over historical value
of assets acquired from Ford affiliate (32.7)
Purchases of available-for-sale securities (372.7) (626.6)
Sales and maturities of available-for-sale
securities 227.8 358.3
Increase in real estate loans held for sale (21.1) (6.7)
Increase in other assets (204.7) (128.6)
Net cash used for investing activities (7,043.2) (5,537.4)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of long-term debt 4,828.4 4,820.6
Retirement of long-term debt (2,401.1) (1,476.3)
Increase in notes payable 2,911.4 939.9
Cash dividends to Ford (1,897.3) (230.0)
Cash dividends paid on common stock (34.7)
Sale of Class A Common Stock 1,850.0
Capital contribution (distribution) from/to
Ford 47.3 (228.9)
Net cash provided from financing activities 5,304.0 3,825.3
Effect of foreign currency translation
adjustments on cash (84.8) (38.1)
DECREASE IN CASH AND CASH EQUIVALENTS (110.5) (81.3)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 532.2 606.0
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 421.7 $ 524.7
CASH PAID FOR:
Interest $ 1,751.7 $ 1,545.3
Income taxes $ 315.8 $ 301.7
See notes to consolidated financial statements.
<PAGE>
ASSOCIATES FIRST CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - THE COMPANY
Associates First Capital Corporation ("First Capital" or the "Company"), a
Delaware corporation, is a majority indirect-owned subsidiary of Ford Motor
Company ("Ford"). Associates Corporation of North America ("Associates") is
the principal domestic operating subsidiary of First Capital.
NOTE 2 - BASIS OF PRESENTATION
On May 8, 1996, prior to an initial public offering of the common stock of
First Capital, Ford contributed to First Capital, for stock, certain foreign
finance operations that were managed by First Capital although owned by other
Ford subsidiaries (the "Associates International Group"). The entities
comprising Associates International Group had operations in Japan, United
Kingdom, Canada, Puerto Rico, Bermuda, Netherlands and Mexico. The effect of
this contribution was retroactively included, on a fully consolidated basis,
in the supplemental combined financial statements of First Capital in a
registration statement filed on Form S-1 (No. 333-817) as part of its initial
public offering. Subsequent to the consummation of the contribution, these
supplemental combined financial statements became the historical consolidated
financial statements of First Capital. The contribution was accounted for in
a manner similar to the pooling of interests method of accounting in
accordance with generally accepted accounting principles. On May 23, 1996,
First Capital filed a Current Report on Form 8-K reflecting the acquisition of
the Associates International Group.
In the opinion of the management of First Capital, 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. Certain prior period financial statement amounts have been
reclassified to conform to the current period presentation.
NOTE 3 - INVESTMENTS IN DEBT AND EQUITY SECURITIES
DEBT SECURITIES
The Company invests in debt 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 debt securities as available-for-sale securities and adjusts
its recorded value to market. The estimated market value at September 30,
1996 and December 31, 1995 was $986.5 million and $868.5 million,
respectively. Amortized cost at September 30, 1996 and December 31, 1995 was
$994.5 million and $849.8 million, respectively. 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.
EQUITY SECURITIES
Equity security investments are recorded at market value. The Company
classifies its investments in equity securities as trading securities and
includes in earnings unrealized gains or losses on such securities. The
estimated market value at September 30, 1996 and December 31, 1995 was $9.6
million and $12.6 million, respectively. Historical cost at September 30,
1996 and December 31, 1995 was $7.8 million and $8.5 million, respectively.
NOTE 4 - NET FINANCE RECEIVABLES
At September 30, 1996 and December 31, 1995, net finance receivables consisted
of the following (in millions):
September 30 December 31
1996 1995
Consumer Finance
Home equity lending $16,743.2 $14,316.3
Personal lending and retail sales finance 7,324.7 6,225.1
Credit card 5,970.6 4,984.6
Manufactured housing 1,496.2 2,049.3
31,534.7 27,575.3
Commercial Finance
Truck and truck trailer 8,449.2 7,724.0
Equipment 4,434.6 4,012.0
Other 1,606.6 391.2
14,490.4 12,127.2
Net finance receivables $46,025.1 $39,702.5
In September 1996, First Capital acquired Teletech Financial Corporation. The
assets of Teletech Financial principally consist of equipment
telecommunications receivables. The fair market value of total assets
acquired and liabilities assumed was $116.8 million and $82.6 million,
respectively. The transaction was accounted for as a purchase.
In August 1996, Associates acquired $1.2 billion of net finance receivables,
principally home equity and personal lending receivables and other assets and
liabilities, from Fleet Financial Group. The fair market value of total
assets acquired and liabilities assumed was $1.3 billion and $1.0 million,
respectively.
In July 1996, Associates acquired $837.6 million of certain assets of USL
Capital, an affiliate and Ford subsidiary. Such assets acquired consisted
principally of vehicle fleet leasing receivables. The excess of purchase
price over the historical value of assets acquired was $32.7 million which was
recorded as an adjustment to stockholders' equity.
In May 1996, First Capital acquired the assets and assumed the liabilities of
Fleetwood Credit Corp., principally consisting of recreational vehicles. The
fair market value of total assets acquired and liabilities assumed was $473.5
million and $342.1 million, respectively.
In January 1995, Associates acquired $116 million of net home equity
receivables and certain other assets from Ford Motor Credit Company, an
affiliate. The transaction was recorded at historical cost, which
approximated market.
<PAGE>
NOTE 5 - ALLOWANCE FOR LOSSES ON FINANCE RECEIVABLES
Changes in the allowance for losses on finance receivables during the periods
indicated were as follows (in millions):
Nine Months Ended Year Ended
September 30 December 31
1996 1995 1995
Balance at beginning of
period $1,268.6 $1,061.6 $1,061.6
Provision for losses 795.4 612.6 834.0
Recoveries on receivables
charged off 110.8 101.7 132.9
Losses sustained (735.2) (554.7) (757.1)
Reserves of acquired
businesses and other 95.5 (1.1) (2.8)
Balance at end of period $1,535.1 $1,220.1 $1,268.6
NOTE 6 - OTHER ASSETS
The components of Other Assets at September 30, 1996 and December 31, 1995
were as follows (in millions):
September 30 December 31
1996 1995
Goodwill $1,263.5 $1,278.9
Other 1,066.8 803.2
Total other assets $2,330.3 $2,082.1
NOTE 7 - DEBT RESTRICTIONS
Associates, the Company's principal operating subsidiary, is subject to
various limitations under the provisions of its outstanding debt and revolving
credit agreements. The most significant of these limitations are summarized
as follows:
LIMITATION ON PAYMENT OF DIVIDENDS
A restriction contained in one issue of Associates debt securities which
matures on March 15, 1999, generally limits payments of cash dividends on
Associates Common Stock in any year to not more than 50% of Associates
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, $303.2 million was available for dividends at
September 30, 1996.
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 $1.5
billion. At September 30, 1996, Associates tangible net worth was
approximately $4.7 billion.
NOTE 8 - RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges of First Capital for the nine months
ended September 30, 1996 and 1995 was 1.56 and 1.54, respectively. For
purposes of such computation, the term "earnings" represents Earnings Before
Provision for Income Taxes, plus fixed charges. The term "fixed charges"
represents interest expense and a portion of rentals representative of an
implicit interest factor for such rentals.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
Nine- and Three-Month Periods Ended September 30, 1996 Compared to the Nine-
and Three-Month Periods Ended September 30, 1995.
Net earnings for the nine-month period ended September 30, 1996 were
$622.7 million, an 18% increase over the same period in the previous year.
Net earnings for the three months ended September 30, 1996 were $230.2
million, an increase of 17% over the same period in the previous year. The
increase in earnings in both comparative periods was principally due to growth
in net finance receivables, an increase in the net interest margin and an
increase in operating expense efficiency, all of which more than offset an
increase in net credit losses.
Finance charge revenue, on a dollar basis, increased for the nine and
three months ended September 30, 1996, 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 14.79% and 15.00% for
the nine months and three months ended September 30, 1996, respectively. This
compares to 15.16% and 15.13% for the comparable periods in 1995,
respectively. The period over period decline in the finance charge ratio is
principally due to declines in finance charge rates on outstanding loans which
vary with market rates, and to a lesser extent, product mix.
Interest expense increased for the nine- and three-month periods ended
September 30, 1996 compared to the same periods in 1995, primarily due to an
increase in average debt outstanding for each of the comparative periods,
principally resulting from 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. The increase, due to growth in both
comparative periods, was partially offset by declines in the Company's average
short- and long-term borrowing rates, principally due to changes in market
conditions. The Company's total average borrowing rates for the nine- and
three-month periods ended September 30, 1996 were 6.36% and 6.43%,
respectively, compared to 6.72% and 6.67% for the same periods in the prior
year.
As a result of the aforementioned changes in finance charge revenue and
interest expense, the Company's net interest margin increased to $2.9 billion
and $1.0 billion for the nine- and three-month periods ended September 30,
1996, respectively, compared to $2.5 billion and $869.1 million for the
comparable periods in the prior year. The Company's net interest margin
expressed as a ratio to average net finance receivables also increased to
9.22% and 9.31% for the nine- and three-month periods ended September 30,
1996, respectively, compared to 9.21% and 9.22% for the same periods in the
prior year. The nine-month ratio for 1996 excludes one-time charges related
to the Company's initial public offering. The principal cause of the increase
in each of the comparable periods was due to the aforementioned decrease in
average borrowing rates.
Nine- and three-month operating expenses as of September 30, 1996 were
greater than in the corresponding periods in 1995, reflecting growth in the
size of the Company. However, operating expense efficiency, measured as the
ratio of total operating expenses to total revenue net of interest expense and
insurance benefits paid or provided, improved to 44.5% and 44.4% for the nine-
and three-month periods ended September 30, 1996, respectively, compared to
46.8% and 44.6% for the same periods in the prior year. The improvement in
both comparable periods principally reflects the benefit from initiatives
undertaken by the Company, which are designed to improve operating efficiency.
The Company's provision for losses increased from $612.6 million for the
first nine months of 1995 to $795.4 million for the same period in 1996. The
provision for losses for the three-month period ended September 30, 1996
increased from $210.8 million in the prior year period to $267.4 million for
the current period. In both cases, the provision increased principally as a
result of increased net credit losses. Total net credit losses as a
percentage of average net finance receivables (the "Loss Ratio") were 1.94%
and 2.16% for the nine- and three-month periods ended September 30, 1996,
respectively, compared to 1.68% and 1.78% for the same periods in 1995. The
Loss Ratio increased in most of the Company's portfolios, the most significant
increases of which were in the Company's credit card and personal loan
portfolios, primarily driven by increased losses resulting from customer
bankruptcies.
The provision for income taxes increased for both the nine-
and three-month periods ended September 30, 1996 principally as a result
of an increase in pretax earnings. The effective tax rates for the
nine- and three-month periods ended September 30, 1996 were 39.29% and
39.63%, respectively, compared to 39.52% and 39.71% for the comparable
periods in 1995. The decrease in the effective tax rates for 1996 was
principally related to shifts in the mix of pretax profits, principally
between international and U.S. taxing jurisdictions.
Financial Condition
Net finance receivables grew $6.3 billion and $2.4 billion during the
nine- and three-month periods ended September 30, 1996, respectively, compared
to $4.6 billion and $1.2 billion for the same period in 1995. Net finance
receivables at September 30, 1996 exclude approximately $1.8 billion of
securitized manufactured housing and recreational vehicle receivables.
Growth, including securitized receivables, for the nine months ended September
30, 1996 was $8.1 billion. The Company had growth in substantially all of its
portfolios in both periods. Of the total growth for the nine months ended
September 30, 1996, including securitized receivables, approximately 45.6%
resulted from major acquisitions, principally of credit card, home equity and
other commercial portfolios and businesses.
Total 60+days contractual delinquency was 2.05% at September 30, 1996,
which was higher than the 1.80% reported at June 30, 1996 and 1.71% at
December 31, 1995. Consumer delinquency was 2.58% at September 30, 1996,
which was higher than the 2.25% and 2.19% reported at June 30, 1996 and
December 31, 1995, respectively. Commercial delinquency was 0.93% at
September 30, 1996 compared to 0.80% and 0.64% at June 30, 1996 and December
31, 1995, respectively, also reflecting an increase. Although the Company
experienced increased delinquency in all of its portfolios, the highest
increase was in the credit card and personal lending portfolios. The Company
attributes the increased delinquency to generally less favorable trends in
economic conditions, including among other factors, the increased leverage of
consumer borrowers.
The Company's allowance for losses was 3.34% of net finance receivables at
September 30, 1996, compared to 3.37% at June 30, 1996 and 3.20% at December
31, 1995. The allowance for losses to annualized net credit losses was 1.84
times net credit losses (22 months of coverage) at September 30, 1996,
compared to 1.92 times net credit losses (23 months of coverage) and 2.03
times net credit losses (24 months of coverage) at June 30, 1996 and December
31, 1995, respectively. Management believes the allowance for losses at
September 30, 1996, is sufficient to provide adequate protection against
losses in its portfolios.
During the nine and three months ended September 30, 1996, stockholders'
equity increased principally as a result of the aforementioned increase in net
earnings. This increase was partially offset by unrealized foreign currency
translation losses of $84.8 million and $16.6 million, respectively,
principally related to the Company's yen and sterling-denominated net
investments in its Japan and United Kingdom operations. Stockholders' equity
was also adjusted during the nine- and three-month periods for unrealized
(losses)/gains on its insurance subsidiaries' investments in marketable debt
securities of ($17.4) million and $1.3 million, respectively. During the
third quarter of 1996, the Company paid a cash dividend on its outstanding
common stock of $.10 per share or $34.7 million, of which $27.9 million was
paid to Ford. As referenced in NOTE 4 to these consolidated financial
statements, the Company recorded an adjustment to equity in the amount of
$32.7 million related to its acquisition of certain assets from a Ford
affiliate. The adjustment represents the difference between the purchase
price and the historical value of the net assets acquired.
As a result of the aforementioned, the Company's return on average assets,
average equity and average tangible equity for the nine-month period ended
September 30, 1996 was 1.87%, 16.51% and 22.10%, respectively. This compares
to a return on average assets, average equity and average tangible equity for
the nine months ended September 30, 1995 of 1.87%, 15.78% and 22.50%,
respectively.
LIQUIDITY
The principal sources of cash for the Company are proceeds from the
issuance of short- or senior and subordinated long-term debt and cash from the
Company's operations. Through its subsidiary (Associates), the Company has
historically issued debt principally in the United States and, on a limited
basis, in the foreign countries in which it operates. However, as part of a
strategy to further diversify its sources of funds, Associates recently
established a Euro medium-term note program, a Euro commercial paper program
and a securitization program. During the third quarter, the Company and
Associates in the aggregate securitized approximately $1.1 billion in
manufactured housing and recreational vehicle finance receivables. Subsequent
to September 30, 1996, Associates issued $600 million of senior debt under the
Euro medium-term note program in the Euro capital markets and $300 million of
subordinated debt in the United States. Management believes that the Company
has sufficient liquidity through its access to external borrowings and from
cash provided by operations to support its liquidity needs.
At September 30, 1996, the Company had short- and long-term debt
outstanding of $16.9 billion and $23.9 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 unsecured long-term debt issued publicly and privately
by subsidiaries of the Company in the United States and foreign countries in
which the Company operates. During the nine- and three-month periods ended
September 30, 1996 and 1995, the Company raised, through public and private
offerings, debt aggregating $4.8 billion and $2.6 billion, and $4.8 billion
and $1.6 billion, respectively.
Substantial additional liquidity is available to the Company's operations
through established credit facilities in support of its net short-term
borrowings. At September 30, 1996, short-term bank lines, revolving credit
facilities and receivable purchase facilities totaled $12.5 billion, $102.3
million of which was in use in the United Kingdom at that date. These
facilities represented 76% of net short-term indebtedness outstanding at
September 30, 1996.
Management believes that the Company has limited exposure to foreign
currency exchange risks resulting from transactions with its foreign
affiliates. It is the practice of the Company to hedge foreign currency
transaction risks. Management also believes it has limited exposure to
foreign currency translation risks resulting from the translation of the net
assets and net earnings of its foreign operations from the foreign currencies
in which they are denominated to the reporting currency, the U.S. dollar. At
September 30, 1996, approximately 10% of the Company's consolidated net assets
and 14% of its consolidated net earnings were denominated in foreign
currencies, principally the Japanese yen and to a lesser extent the pound
sterling.<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None to report
ITEM 2. CHANGES IN SECURITIES.
None to report
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None to report
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None to report
ITEM 5. OTHER INFORMATION
None to report
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
3.2 By-laws of the Company
12 Computation of Ratio of Earnings to Fixed Charges
27 Financial Data Schedule
(b) Reports on Form 8-K
During the third quarter ended September 30, 1996, First Capital filed a
Current Report on Form 8-K dated July 3, 1996, related to the financial
statements of its foreign subsidiaries, and July 16, 1996 related to the
release of second quarter earnings.
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.
November 11, 1996
ASSOCIATES FIRST CAPITAL CORPORATION
(registrant)
By/s/ Kevin P. Hegarty
Senior Vice President, Comptroller, and
Principal Accounting Officer
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
-----------------------------------------------------------------------------
<S> <C> <C>
3.2 -- By-laws of the Company
12 -- Computation of Ratio of Earnings to Fixed Charges
27 -- Financial Data Schedule
</TABLE>
------------
<PAGE>
BY-LAWS
OF
ASSOCIATES FIRST CAPITAL CORPORATION
(THE "COMPANY")
ADOPTED APRIL 30, 1996
AS AMENDED SEPTEMBER 25, 1996
ARTICLE I.
OFFICES
The registered office of the Company shall be in the City of Wilmington,
County of New Castle, State of Delaware. The Company may also have one or more
offices at such other places, either inside or outside of the State of Delaware,
as the Board of Directors may from time to time determine or as the business of
the Company may require. The books and records of the Company may be kept
(subject to the provisions of the laws of the State of Delaware) at any place,
either inside or outside of the State of Delaware, as from time to time may be
determined by the Board of Directors.
ARTICLE II.
STOCKHOLDERS
SECTION 1. PLACE OF MEETING.
Meetings of stockholders (whether annual or special) shall be held at such
place, either inside or outside of the State of Delaware, as the Board of
Directors shall from time to time determine.
SECTION 2. ANNUAL MEETING.
The annual meeting of stockholders shall be held on the last Thursday of May
of each year or at such other time as shall be determined by the Board of
Directors. Should said day be a legal holiday, such annual meeting shall be
held on the preceding regular business day. If, for any reason, the annual
meeting be not held at the time aforesaid, the directors shall fix another
date for such meeting.
SECTION 3. SPECIAL MEETINGS.
Unless otherwise prescribed by law or by the Company's Restated Certificate
of Incorporation, as amended from time to time (the "Charter"), special meetings
of stockholders may be held at any time on call of the Chairman of the Board of
Directors, a Vice Chairman of the Board of Directors, the President, or, at the
request in writing of a majority of the Board of Directors, any officer. Such
request shall state the purpose or purposes of the proposed meeting.
SECTION 4. NOTICE OF MEETINGS.
Except as otherwise provided by law, at least twenty (20) days' notice of
stockholders' meetings stating the time and place and the objects thereof shall
be given by the Chairman of the Board of Directors, a Vice Chairman of the Board
of Directors, the President, the Secretary or an Assistant Secretary to each
stockholder of record having voting power in respect of the business to be
transacted thereat. Subject to Section 5 of this Article II, no business other
than that stated in the notice shall be transacted at any meeting.
SECTION 5. NOTICE OF STOCKHOLDER BUSINESS AND NOMINATIONS.
(A) Annual Meetings of Stockholders.
(1) Nominations of persons for election to the Board of Directors and
the proposal of business to be considered by the stockholders may be
made at an annual meeting of stockholders (a) pursuant to the Company's
notice of meeting delivered pursuant to Section 4 of this Article II,
(b) by or at the direction of the Board of Directors or (c) by any
stockholder of the Company who is entitled to vote at the meeting, who
complied with the notice procedures set forth in paragraphs (A)(2) and
(A)(3) of this Section 5 and who was a stockholder of record at the
time such notice is delivered to the Secretary of the Company.
(2) For nominations or other business to be properly brought before
an annual meeting by a stockholder pursuant to clause (c) of paragraph
(A)(1) of this Section 5, the stockholder must have given timely notice
thereof in writing to the Secretary of the Company and such business
must be a proper subject for stockholder action under the General
Corporation Law of the State of Delaware. To be timely, a
stockholder's notice shall be delivered to the Secretary at the
principal executive offices of the Company not less than sixty (60)
days nor more than ninety (90) days prior to the first anniversary of
the preceding year's annual meeting; provided, however, that in the
event that the date of the annual meeting is advanced by more than
thirty (30) days or delayed by more than sixty (60) days from such
anniversary date, notice by the stockholder to be timely must be so
delivered not earlier than the ninetieth day prior to such annual
meeting and not later than the close of business on the later of the
sixtieth day prior to such annual meeting or the tenth day following
the day on which public announcement of the date of such meeting is
first made. Such stockholder's notice shall set forth (a) as to each
person whom the stockholder proposes to nominate for election or
reelection as a director all information relating to such person that
is required to be disclosed in solicitations of proxies for election
of directors, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), (including such person's written consent to being
named in the proxy statement as a nominee and to serving as a director
if elected); (b) as to any other business that the stockholder proposes
to bring before the meeting, a brief description of the business
desired to be brought before the meeting, the reasons for conducting
such business at the meeting and any material interest in such business
of such stockholder and the beneficial owner, if any, on whose behalf
the proposal is made; and (c) as to the stockholder giving the notice
and the beneficial owner, if any, on whose behalf the nomination or
proposal is made (i) the name and address of such stockholder, as they
appear on the Company's books, and of such beneficial owner and (ii)
the class and number of shares of the Company which are owned
beneficially and of record by such stockholder and such beneficial
owner.
(3) Notwithstanding anything in the second sentence of paragraph
(A)(2) of this Section 5 to the contrary, in the event that the number
of directors to be elected to the Board of Directors is increased and
there is no public announcement naming all of the nominees for director
or specifying the size of the increased Board of Directors made by the
Company at least seventy (70) days prior to the first anniversary of
the preceding year's annual meeting, a stockholders's notice required
by this Section 5 shall also be considered timely, but only with
respect to nominees for any new positions created by such increase, if
it shall be delivered to the Secretary at the principal executive
offices of the Company not later than the close of business on the
tenth day following the day on which such public announcement is first
made by the Company.
(B) Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought before
the meeting pursuant to the Company's notice of meeting pursuant to Section 4 of
this Article II. Nominations of persons for election to the Board of Directors
may be made at a special meeting of stockholders at which directors are to be
elected pursuant to the Company's notice of meeting (a) by or at the direction
of the Board of Directors or (b) by any stockholder of the Company who is
entitled to vote at the meeting, who complies with the notice procedures set
forth in this Section 5 and who is a stockholder of record at the time such
notice is delivered to the Secretary of the Company. Nominations by
stockholders of persons for election to the Board of Directors may be made at
such a special meeting of stockholders if the stockholder's notice required
by paragraph (A)(2) of this Section 5 shall be delivered to the Secretary at
the principal executive offices of the Company not earlier than the ninetieth
day prior to such special meeting and not later than the close of business
on the later of the sixtieth day prior to such special meeting or the tenth
day following the day on which public announcement is first made of the date
of the special meeting and of the nominees proposed by the Board of
Directors to be elected at such meeting.
(C) General.
(1) Only persons who are nominated in accordance with the procedures
set forth in this Section 5 shall be eligible to serve as directors and
only such business shall be conducted at a meeting of stockholders as
shall have been brought before the meeting in accordance with the
procedures set forth in this Section 5. Except as otherwise provided
by law, the Charter or these By-laws, the chairman of the meeting shall
have the power and duty to determine whether a nomination or any
business proposed to be brought before the meeting was made in
accordance with this Section 5 and, if any proposed nomination or
business is not in compliance with this Section 5, to declare that such
defective proposal or nomination shall be disregarded.
(2) For purposes of this Section 5, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document
publicly filed by the Company with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Section 5, a
stockholder shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations thereunder with respect to
the matters set forth in this Section 5. Nothing in this Section 5
shall be deemed to affect any rights of stockholders to request
inclusion of proposals in the Company's proxy statement pursuant to
Rule 14a-8 under the Exchange Act.
SECTION 6. QUORUM.
At any meeting of stockholders, the number of shares the holders of which
shall be present or represented by proxy in order to constitute a quorum for,and
the votes that shall be necessary for, the transaction of any business shall be
as expressly provided in Article 4 of the Charter. At any meeting of
stockholders at which a quorum is not present, the person serving as chairman of
the meeting or the holders of shares entitled to cast a majority of all of the
votes which could be cast at such meeting by the holders of outstanding shares
of stock of the Company who are present in person or by proxy and who are
entitled to vote on every matter that is to be voted on without regard to class
at such meeting may adjourn the meeting from time to time.
SECTION 7. ORGANIZATION AND CONDUCT OF BUSINESS.
The Chairman of the Board of Directors shall act as chairman of meetings of
the stockholders. The Board of Directors may designate any other officer or
director of the Company to act as chairman of any meeting in the absence of the
Chairman of the Board of Directors, and the Board of Directors may further
provide for determining who shall act as chairman of any stockholders' meeting
in the absence of the Chairman of the Board of Directors and such designee. The
person serving as chairman of any meeting of stockholders shall determine the
order of business and the procedure at the meeting, including such regulation of
the manner of voting and the conduct of discussion as seem to him or her in
order.
The Secretary of the Company shall act as secretary of all meetings of the
stockholders, but in the absence of the Secretary the presiding officer may
appoint any other person to act as secretary of any meeting.
SECTION 8. PROXIES AND VOTING.
At any meeting of stockholders, every stockholder entitled to vote may vote
in person or by proxy authorized by an instrument in writing or by a
transmission permitted by law filed in accordance with the procedure
established for the meeting. Any copy, facsimile telecommunication or other
reliable reproduction of the writing or transmission created pursuant to this
paragraph may be substituted or used in lieu of the original writing or
transmission for any and all purposes for which the original writing or
transmission could be used, provided that such copy, facsimile
telecommunication or other reproduction shall be a complete reproduction of
the entire original writing or transmission.
All voting, including on the election of directors but excepting where
otherwise required by law, may be a voice vote; provided, however, that upon
demand therefor by a stockholder entitled to vote or by his or her proxy, a
stock vote shall be taken. Every stock vote shall be taken by ballots, each
of which shall state the name of the stockholder or proxy voting and such
other information as may be required under the procedure established for the
meeting.
SECTION 9. STOCK LISTS.
A complete list of stockholders entitled to vote at any meeting of
stockholders, arranged in alphabetical order for each class of stock and showing
the address of each such stockholder and the number of shares registered in his
or her name, shall be open to the examination of any such stockholder, for any
purpose germane to the meeting, during ordinary business hours for a period of
at least ten (10) days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified in the notice of
the meeting, or if not so specified, at the place where the meeting is to be
held.
The stock list shall also be kept at the place of the meeting during the
whole time thereof and shall be open to the examination of any such stockholder
who is present. This list shall presumptively determine the identity of the
stockholders entitled to vote at the meeting and the number of shares held by
each of them.
SECTION 10. RATIFICATION.
Any transaction questioned in any stockholders' derivative suit, or any
other suit to enforce alleged rights of the Company or any of its stockholders,
on the ground of lack of authority, defective or irregular execution, adverse
interest of any director, officer or stockholder, nondisclosure, miscomputation
or the application of improper principles or practices of accounting may be
approved, ratified and confirmed before or after judgment by the Board of
Directors or by the holders of the Company's Class A Common Stock, par value
$.01 per share ("Class A Common Stock") and the holders of the Company's Class B
Common Stock, par value $.01 per share ("Class B Common Stock") voting as
provided in paragraph (g) of Article 4 of the Charter, and, if so approved,
ratified or confirmed, shall have the same force and effect as if the questioned
transaction had been originally duly authorized, and said approval, ratification
or confirmation shall be binding upon the Company and all of its stockholders
and shall constitute a bar to any claim or execution of any judgment in
respect of such questioned transaction.
SECTION 11. INSPECTORS OF ELECTION.
The Board of Directors may, and to the extent required by law, shall, in
advance of any meeting of stockholders, appoint one or more inspectors to act at
the meeting, decide upon the qualification of voters, count the votes, decide
the results and make a written report thereof in accordance with the General
Corporation Law of the State of Delaware. The Board of Directors may designate
one or more persons as alternate inspectors to replace any inspector who fails
to act. If no inspector or alternate is able to act at a meeting of
stockholders, the person presiding at the meeting may, and to the extent
required by law, shall, appoint one or more inspectors to act at the meeting.
Each inspector, before entering upon the discharge of his or her duties, shall
take and sign an oath faithfully to execute the duties of inspector with strict
impartiality and according to the best of his or her ability. Every vote taken
by ballots hall be counted by an inspector or inspectors appointed by the
chairman of the meeting.
ARTICLE III.
BOARD OF DIRECTORS
SECTION 1. NUMBER, TERM OF OFFICE AND ELIGIBILITY.
Subject to any rights of holders of Preferred Stock to elect additional
directors under specified circumstances, as provided in Article 5 of the
Charter, the number of directors of the Company shall be fixed from time to time
exclusively by resolution of the Board of Directors adopted by the affirmative
vote of directors constituting not less than a majority of the total number of
directors that the Company would have it there were no vacancies on the
Company's Board of Directors, but shall consist of not more than twelve (12)
nor less than three (3) directors. Each director shall be elected annually
by ballot by the holders of Class A Common Stock and the holders of Class B
Common Stock voting as provided in paragraph (g) of Article 4 of the Charter
at the annual meeting of stockholders, to serve until his or her successor
shall have been elected and shall have qualified, except as provided in this
Section 1. No person may be elected or re-elected a director of the Company
if at the time of his or her election or re-election he or she shall have
attained the age of seventy years, and the term of any director who shall
have attained such age while serving as a director shall terminate as of the
time of the first annual meeting of stockholders following his or her
seventieth birthday; provided, however, that
the Board of Directors by resolution may waive such age limitation in any year
and from year to year with respect to any director or directors. Subject to any
rights of holders of Preferred Stock, and unless the Board of Directors
otherwise determines, any vacancy occurring in the Board of Directors caused
by death, resignation, increase in number of directors or otherwise may be
filled by the affirmative vote of a majority of the remaining members of the
Board of Directors, though less than a quorum, or by a sole remaining
director, and except as otherwise provided by law, any such vacancy may not
be filled by the stockholders of the Company, and any director so elected
shall hold office until the next election of directors and until his or her
successor is duly elected and qualified, or until his or her earlier death,
resignation or removal.
SECTION 2. MEETINGS.
Meetings of the Board of Directors may be held at such place, either inside
or outside of the State of Delaware, as may from time to time be designated by
the Chairman of the Board of Directors, a Vice Chairman of the Board of
Directors, the President or resolution of the Board of Directors or as may be
specified in the call of any meeting. In the absence of any such designation,
the meetings shall be held at the principal office of the Company in Irving,
Texas.
An annual meeting of the Board of Directors shall be held on the same day
as, and as soon as practicable following the annual meeting of stockholders or
at such other time or place as shall be determined by the Board of Directors at
its regular meeting next preceding said annual meeting of stockholders. Regular
meetings of the Board of Directors shall be held on the last Thursday of
February, May, August and November of each year or at such other time as shall
be determined by the Board of Directors. Should said day be a legal holiday,
such regular meeting shall be held on the next Thursday that is not a legal
holiday.
Special meetings of the Board of Directors may be held at any time on the
call of the Chairman of the Board of Directors, a Vice Chairman of the Board of
Directors, the President or the Board of Directors. Meetings may be held at any
time or place without notice if all the directors are present or if those not
present waive notice of the meeting in writing.
SECTION 3. NOTICE OF MEETINGS.
The Secretary or an Assistant Secretary shall give notice of the time and
place of meetings of the Board of Directors (excepting the annual meeting of
directors) by (i) mailing or sending via courier such notice not later than
during the second day preceding the day on which such meeting is to be held, or
(ii) by (a) sending a facsimile transmission or other form of electronic
communication containing such notice or (b) delivering such notice personally or
by telephone, in each case, not later than during the first day preceding the
day on which such meeting is to be held to each director. Unless otherwise
stated in the notice thereof any and all business may be transacted at any
meeting.
SECTION 4. QUORUM AND ORGANIZATION OF MEETINGS.
One-third of the total number of members of the Board of Directors as
constituted from time to time, but in no event less than three, shall constitute
a quorum for the transaction of business; but if at any meeting of the Board of
Directors there shall be less than a quorum present, a majority of those present
may adjourn the meeting from time to time, and the meeting may be held as
adjourned without further notice or waiver. Except as otherwise provided by law
or by the Charter or these By-laws, a majority of the directors present at any
duly constituted meeting may decide any question brought before such meeting.
Meetings shall be presided over by the Chairman of the Board of Directors
or, in his or her absence, by such other person as the Board of Directors may
designate or the members present may select.
SECTION 5. POWERS.
In addition to the powers and authorities by these By-laws expressly
conferred upon them, the Board of Directors shall have and may exercise all such
powers of the Company and do all such lawful acts and things that are not by
statute, the Charter or these By-laws directed or required to be exercised or
done by the stockholders. Without prejudice to or limitation of such general
powers and any other powers conferred by statute, the Charter or these By- laws,
the Board of Directors shall have the following powers:
(1) To determine, subject to the requirements of law and of
paragraph (c)(2) of Article 4 of the Charter, what, if any, dividends shall
be declared and paid to the stockholders out of net profits, current or
accumulated, or out of surplus or other assets of the Company available for
dividends.
(2) To fix, and from time to time to vary, the amount of working
capital of the Company, and to set aside from time to time out of net
profits, current or accumulated, or surplus of the Company such amount or
amounts as they in their discretion may deem necessary and proper as, or as
a safeguard to the maintenance of working capital, as a reserve for
contingencies, as a reserve for repairs, maintenance, or rehabilitation, as
a reserve for revaluation of profits of the Company or for such other proper
purpose as may in the opinion of the directors be in the best interests of
the Company, and in their sole discretion to abolish or modify any such
provision for working capital or any such reserve, and to credit the amount
thereof to net profits, current or accumulated, or to the surplus of the
Company.
(3) To purchase, or otherwise acquire for the Company, any
business, property, rights or privileges which the Company may at the time
be authorized to acquire, at such price or consideration and generally on
such terms and conditions as they think fit; and at their discretion to pay
therefor either wholly or partly in money, stock, bonds, debentures or other
securities of the Company.
(4) To create, make and issue mortgages, bonds, deeds of trust,
trust agreements or negotiable or transferable instruments or securities,
secured by mortgage or otherwise, and to do every other act and thing
necessary to effect the same.
(5) To appoint any person or corporation to accept and hold in
trust for the Company any property belonging to the Company, or in which it
is interested, or for any other purpose, and to execute such deeds and do all
things requisite in relation to any such trust.
(6) To remove any officer of the Company with or without cause, and
from time to time to devolve the powers and duties of any officer upon any other
person for the time being.
(7) To confer upon any officer of the Company the power to appoint,
remove and suspend subordinate officers, agents and employees.
(8) To determine who shall be authorized on the Company's behalf,
either generally or specifically, to make and sign bills, notes, acceptances,
endorsements, checks, releases, receipts, contracts, conveyances, and all other
written instruments executed on behalf of the Company.
(9) To make and change regulations, not inconsistent with these
By-laws, for the management of the Company's business and affairs.
(10) To adopt and, unless otherwise provided therein, to amend and
repeal, from time to time, bonus and supplemental compensation plans for
employees (including employees who are officers or directors) of the Company
or any subsidiary. Power to construe, interpret, administer, modify or
suspend any such plan shall be vested in the Board of directors or a
committee thereof.
(11) To adopt a retirement plan, or plans, for the purpose of making
retirement payments to employees (including employees who are officers or
directors) of the Company or of any subsidiary thereof; and to adopt a group
insurance plan, or plans, for the purpose of enabling employees (including
employees who are officers or directors) of the Company or of any subsidiary
thereof to acquire insurance protection; any such retirement plan or insurance
plan, unless otherwise provided therein, shall be subject to amendment or
revocation by the Board of Directors.
(12) To delegate any of the powers of the Board of Directors in the
course of the business of the Company to any officer, employee or agent, and to
appoint any person the agent of the Company, with such powers (including the
power to subdelegate) and upon such terms as the Board of Directors may think
fit.
SECTION 6. RELIANCE UPON BOOKS, REPORTS AND RECORDS.
Each director, each member of any committee designated by the Board of
Directors and each officer, in the performance of his or her duties, shall be
fully protected in relying in good faith upon such information, opinions,
reports or statements presented to the Company by any of its officers or
employees, or by committees of the Board of Directors, or by any other
person, as to matters such director, member or officer, as the case may be,
reasonably believes are within such person's professional or expert
competence and who has been selected with reasonable care by the Board of
Directors or by any such committee, or in relying in good faith upon other
records of the Company.
SECTION 7. COMPENSATION OF DIRECTORS.
Directors, as such, may receive, pursuant to resolution of the Board of
Directors, fixed fees and other compensation for their services as directors,
including, without limitation, services as members of committees of the Board of
Directors; provided, however, that nothing herein contained shall be construed
to preclude any director from serving the Company in any other capacity and
receiving compensation therefor.
SECTION 8. MEETINGS BY MEANS OF CONFERENCE TELEPHONE.
Unless otherwise provided by the Charter or these By-laws, members of the
Board of Directors, or any committee designated by the Board of Directors, may
participate in a meeting of the Board of Directors or such committee by means of
a conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in
a meeting pursuant to this Section 8 shall constitute presence in person at such
meeting.
ARTICLE IV.
COMMITTEES
SECTION 1. COMMITTEES OF THE BOARD OF DIRECTORS.
There are hereby established as committees of the Board of Directors an
Audit Committee, a Compensation Committee and a Nominating Committee, each of
which shall have the powers and functions set forth in Sections 2, 3 and 4
hereof, respectively, and such additional powers as may be delegated to it by
the Board of Directors. The Board of Directors may from time to time establish
additional standing committees or special committees of the Board of Directors,
each of which shall have such powers and functions as may be delegated to it by
the Board of Directors. The Board of Directors may abolish any committee
established by or pursuant to this Section 1 as it may deem advisable. Each
such committee shall consist of two or more directors, the exact number being
determined from time to time by the Board of Directors. Designations of the
chairman and members of each such committee, and, if desired, a vice chairman
and alternates for members, shall be made by the Board of Directors. In the
absence or disqualification of any member of any committee and any alternate
member in his or her place, the member or members of the committee present at
the meeting and not disqualified from voting whether or not he or she or they
constitute a quorum, may by unanimous vote appoint another member of the
Board of Directors to act at the meeting in the place of the absent or
disqualified member. Each committee shall have a secretary who shall be
designated by its chairman. A vice chairman of a committee shall act as the
chairman of the committee in the absence or disability of the chairman.
SECTION 2. AUDIT COMMITTEE.
The Audit Committee shall select and engage, on behalf of the Company,
independent public accountants to (1) audit the books of account and other
corporate records of the Company and (2) perform such other duties as the Audit
Committee may from time to time prescribe. The Audit Committee shall transmit
financial statements certified by such independent public accountants to the
Board of Directors after the close of each fiscal year. The selection of
independent public accountants for each fiscal year shall be made in advance of
the annual meeting of stockholders in such fiscal year and shall be submitted
for ratification or rejection at such meeting. The Audit Committee shall
confer with such accountants and review and approve the scope of the audit of
the books of account and other corporate records of the Company. The Audit
Committee shall have the power to confer with and direct the officers of the
Company to the extent necessary to review the internal controls, accounting
practices, financial structure and financial reporting of the Company. From
time to time the Audit Committee shall report to and advise the Board of
Directors concerning the results of its consultation and review and such
other matters relating to the internal controls, accounting practices,
financial structure and financial reporting of the Company as the Audit
Committee believes merit review by the Board of Directors. The Audit
Committee also shall perform such other functions and exercise such other
powers as may be delegated to it from time to time by the
Board of Directors.
SECTION 3. COMPENSATION COMMITTEE.
The Compensation Committee shall fix from time to time the compensation of
members of the Board of Directors who are officers or employees of the Company
and of all members of the Management Committee of the Company who are officers
or employees of the Company. The Compensation Committee shall also perform such
functions as may be delegated to it under the provisions of any bonus,
supplemental compensation, special compensation or stock option plan of the
Company.
SECTION 4. NOMINATING COMMITTEE.
The Nominating Committee from time to time shall consider and make
recommendations to the Board of Directors with respect to nominations or
elections of directors and officers of the Company and the appointments of such
other employees of the Company as shall be referred to the Nominating Committee.
The Nominating Committee from time to time shall consider the size and
composition of the Board of Directors and make recommendations to the Board of
Directors with respect to such matters. Prior to the annual meeting of
stockholders each year, and prior to any special meeting of stockholders at
which a director is to be elected, the Nominating Committee shall recommend
to the Board of Directors persons proposed to constitute the nominees whose
election at such meeting will be recommended by the Board of Directors.
The authority vested in the Nominating Committee by this Section 4 shall
not derogate from the power of individual members of the Board of Directors to
recommend or place in nomination persons other than those recommended by the
Nominating Committee.
The Nominating Committee also shall perform such other functions and
exercise such other powers as may be delegated to it from time to time by the
Board of Directors.
SECTION 5. OTHER COMMITTEES.
The Board of Directors, or any committee, officer or employee of the
Company may establish additional standing committees or special committees to
serve in an advisory capacity or in such other capacities as may be permitted by
law, the Charter and these By-laws. The members of any such committee need not
be members of the Board of Directors. Any committee established pursuant to
this Section 5 may be abolished by the Board of Directors or by the person or
body by whom it was established as he, she or it may deem advisable. Each
such committee shall consist of two or more members, the exact number being
determined from time to time by such person or body. Designations of
members of each such committee and, if desired, alternates for members,
shall be made by such person or body,
at whose will all such members and alternates shall serve. The chairman of each
such committee shall be designated by such person or body. Each such committee
shall have a secretary who shall be designated by the chairman.
SECTION 6. RULES AND PROCEDURES.
Each committee may fix its own rules and procedures and shall meet at such
times and places as may be provided by such rules, by resolution of the
committee or by call of the chairman or vice chairman. Notice of meeting of
each committee, other than of regular meetings provided for by its rules or
resolutions, shall be given to committee members. The presence of one-third of
its members, but not less than two, shall constitute a quorum of any committee,
and all questions shall be decided by a majority vote of the members present at
the meeting. All action taken at each committee meeting shall be recorded in
minutes of the meeting.
SECTION 7. APPLICATION OF ARTICLE.
Whenever any provision of any other document relating to any committee of
the Company named therein shall be in conflict with any provision of this
Article IV, the provisions of this Article IV shall govern, except that if
such other document shall have been approved by the stockholders, voting as
provided in the Charter, or by the Board of Directors, the provisions of
such other document shall govern.
ARTICLE V.
OFFICERS
SECTION 1. OFFICERS.
The Officers of the Company shall include a Chairman of the Board of
Directors and may include one or more Vice Chairmen of the Board of Directors,
each of whom shall be chosen from among the directors, a President and a
Secretary, each of whom shall be elected by the Board of Directors to hold
office until his or her successor shall have been chosen and shall have
qualified. The Chairman of the Board of Directors or the President may elect
or appoint one or more Senior Executive Vice Presidents, one or more
Executive Vice Presidents, one or more Senior Vice Presidents, one or more
Vice Presidents, a Treasurer, a Comptroller, a General Counsel, one or more
Assistant Vice Presidents, one or more Assistant Treasurers, one or more
Assistant Comptrollers, one or more Assistant General Counsels, one or more
Assistant Secretaries, and the Chairman of the Board of Directors or
President may elect or appoint such other officers
as such officer may deem necessary, or desirable, each of whom shall have such
authority, shall perform such duties and shall hold office for such term as may
be prescribed by the Board of Directors from time to time. Any person may hold
at one time more than one office, excepting that the duties of the President and
Secretary shall not be performed by one person.
SECTION 2. CHAIRMAN OF THE BOARD OF DIRECTORS.
The Chairman of the Board of Directors shall be the Chief Executive Officer
of the Company. Subject to the provisions of these By-laws and to the direction
of the Board of Directors, he or she shall have ultimate authority for decisions
relating to the general management and control of the affairs and business of
the Company and shall perform all other duties and exercise all other powers
commonly incident to the position of Chief Executive Officer or which are or
from time to time may be delegated to him or her by the Board of Directors,
or which are or
may at any time be authorized or required by law. He or she shall preside at all
meetings of the Board of Directors. He or she may redelegate from time to time
and to the full extent permitted by law, in writing, to officers or employees of
the Company any or all of such duties and powers, and any such redelegation may
be either general or specific. Whenever he or she so shall delegate any of his
or her authority, he or she shall file a copy of the redelegation with the
Secretary of the Company.
SECTION 3. VICE CHAIRMEN OF THE BOARD OF DIRECTORS.
Subject to the provisions of these By-laws and to the direction of the
Board of Directors and of the Chief Executive Officer, the Vice Chairmen of the
Board of Directors shall have such powers and shall perform such duties as from
time to time may be delegated to them by the Board of Directors or by the Chief
Executive Officer, or which are or may at any time be authorized or required by
law.
SECTION 4. PRESIDENT.
Subject to the provisions of these By-laws and to the direction of the
Board of Directors and of the Chief Executive Officer, the President shall have
such powers and shall perform such duties as from time to time may be delegated
to him or her by the Board of Directors or by the Chief Executive Officer, or
which are or may at any time be authorized or required by law.
SECTION 5. SENIOR EXECUTIVE VICE PRESIDENTS, EXECUTIVE
VICE PRESIDENTS, SENIOR VICE PRESIDENTS AND VICE PRESIDENTS.
Each of the Senior Executive Vice Presidents, each of the Executive Vice
Presidents, each of the Senior Vice Presidents and each of the other Vice
Presidents shall have such powers and shall perform such duties as may be
delegated to him or her by the Board of Directors, the Chairman of the Board of
Directors, the President or such other officer or officers to whom he or she is
directly responsible.
SECTION 6. TREASURER AND ASSISTANT TREASURER.
The Treasurer, subject to the direction of the Board of Directors, shall
have the care and custody of all funds and securities of the Company which may
come into his or her hands. When necessary or proper he or she shall endorse on
behalf of the Company, for collection, checks, notes and other obligations, and
shall deposit all funds of the Company in such banks or other depositaries as
may be designated by the Board of Directors or by such officers or employees
as may be authorized by the Board of Directors so to designate. He or she
shall perform all acts incident to the office of Treasurer, subject to the
control of the Board of Directors and such other officer or officers to whom
he or she is directly responsible. He or she may be required to give a bond
for the faithful discharge of his or her duties, in such sum and upon such
conditions as the Board of Directors may require.
At the request and direction of the Treasurer or, in the case of his or her
absence or inability to act, any Assistant Treasurer may act in his or her
place.
In the case of the death of the Treasurer, or in the case of his or her absence
or inability to act without having designated an Assistant Treasurer to act
temporarily in his or her place, the Assistant Treasurer so to perform the
duties of the Treasurer shall be designated by the Chairman of the Board of
Directors, a Vice Chairman of the Board of Directors, the President or an
Executive Vice President.
SECTION 7. SECRETARY AND ASSISTANT SECRETARY.
The Secretary shall keep full and accurate minutes of the meetings of the
stockholders and of the Board of Directors in the proper record book of the
Company provided therefor, and, when required, the minutes of meetings of the
committees, and shall be responsible for the custody of all such minutes.
Subject to the direction of the Board of Directors, the Secretary shall have
custody of the stock ledgers and documents of the Company. He or she shall
have custody of the corporate seal of the Company and shall affix and attest
such seal to any instrument whose execution under seal shall have been duly
authorized. He or she shall give due notice of meetings and, subject to the
direction of the Board of Directors, shall perform all other duties commonly
incident to his or her office or as properly required of him or her by the
Chairman of the Board of Directors and such other officer or officers to
whom he or she is directly responsible and shall enjoy all other powers
commonly incident to his or her office.
At the request and direction of the Secretary or, in the case of his or her
absence or inability to act, any Assistant Secretary may act in his or her
place.
In the case of the death of the Secretary, or in the case of his or her absence
or inability to act without having designated an Assistant Secretary to act
temporarily in his or her place, the Assistant Secretary or other person so to
perform the duties of the Secretary shall be designated by the Chairman of the
Board of Directors, a Vice Chairman of the Board of Directors, the President or
an Executive Vice President.
SECTION 8. ASSISTANT VICE PRESIDENTS AND OTHER OFFICERS.
Each assistant vice president and other officers shall perform such duties
commonly incident to his or her office or as properly required of him or her by
the Chairman of the Board of Directors and such other officer or officers to
whom he or she is directly responsible.
SECTION 9. GENERAL COUNSEL.
The General Counsel shall have general supervision of all matters of a
legal nature concerning the Company. He or she shall perform all such duties
commonly incident to his or her office or as properly required of him or her by
the Chairman of the Board of Directors and such other officer or officers to
whom he or she is directly responsible.
SECTION 10. COMPTROLLER.
The Comptroller shall keep and maintain the books of account of the Company
in such manner that they fairly present the financial condition of the Company
and its subsidiaries. The Comptroller shall have such powers and shall perform
such duties as may be delegated to him or her by the Board of Directors, the
Chairman of the Board of Directors, the President or the appropriate Executive
Vice President, Senior Vice President or Vice President or such other officer or
officers to whom he or she is directly responsible.
SECTION 11. SALARIES.
Salaries of officers, agents or employees shall be fixed from time to time
by the Board of Directors or by such committee or committees, or person or
persons, if any, to whom such power shall have been delegated by the Board of
Directors. An employment contract, whether with an officer, agent or employee,
if expressly approved or specifically authorized by the Board of Directors, may
fix a term of employment thereunder; and such contract, if so approved or
authorized, shall be valid and binding upon the Company in accordance with the
terms thereof, provided that this provision shall not limit or restrict in any
way the right of the Company at any time to remove from office, discharge or
terminate the employment of any such officer, agent or employee prior to the
expiration of the term of employment under any such contract.
SECTION 12. VACANCIES.
A vacancy in any office filled by election of the Board of Directors may
be filled by the Board of Directors by the election of a new officer who shall
hold office, subject to the provisions of this Article V, until the regular
meeting of the directors following the next annual meeting of the stockholders
and until his or her successor is elected.
SECTION 13. REMOVAL OR DISCHARGE.
Any officer may be removed or discharged by the Chairman of the Board of
Directors at any time excepting an officer who is also a director. Any officer
who also is a director may be discharged at any time by the Board of Directors.
ARTICLE VI.
RESIGNATIONS
Any director, officer or agent of the Company, or any member of any
committee, may resign at any time by giving written notice to the Board of
Directors, the Chairman of the Board of Directors, a Vice Chairman of the Board
of Directors, the President or the Secretary of the Company. Any such
resignation shall take effect at the time specified therein, or if the time be
not specified therein, then upon receipt thereof. The acceptance of such
resignation shall not be necessary to make it effective.
ARTICLE VII.
CAPITAL STOCK - DIVIDENDS - SEAL
SECTION 1. CERTIFICATES OF SHARES.
The certificates for shares of the capital stock of the Company shall be
in such form, not inconsistent with the Charter, as shall be approved by the
Board of Directors. The certificates shall be numbered and signed by the
Chairman of the Board of Directors, a Vice Chairman of the Board of Directors,
the President, an Executive Vice President, a Senior Vice President or a Vice
President, and also by the Treasurer or an Assistant Treasurer, or the Secretary
or an Assistant Secretary. Any and all signatures may be facsimiles.
All certificates shall bear the name of the persons owning the shares
represented thereby, shall state the number of shares represented by such
certificate and the date of issue; and such information shall be entered in the
Company's original stock ledger.
SECTION 2. ADDRESSES OF STOCKHOLDERS.
It shall be the duty of every stockholder to notify the Company of his or
her post office address and of any change therein. The latest address furnished
by each stockholder shall be entered on the original stock ledger of the Company
and the latest address appearing on such original stock ledger shall be deemed
conclusively to be the post office address and the last-known post office
address of such stockholder. If any stockholder shall fail to notify the
Company of his
or her post office address, it shall be sufficient to send corporate notices to
such stockholder at the address, if any, understood by the Secretary to be his
or her post office address, or in the absence of such address, to such
stockholder, at the General Post Office in the City of Wilmington, State of
Delaware.
SECTION 3. LOST, DESTROYED OR STOLEN CERTIFICATE.
Any person claiming a stock certificate in lieu of one lost, destroyed or
stolen, shall give the Company an affidavit as to his, her or its ownership of
the certificate and of the facts which go to prove that it has been lost,
destroyed or stolen. If required by the Board of Directors, he, she or it also
shall give the Company a bond, in such form as may be approved by the Board of
Directors, sufficient to indemnify the Company against any claim that may be
made against it on account of the alleged loss of the certificate or the
issuance of a new certificate. A new certificate shall be issued upon
receipt of such an affidavit and, if required, upon the giving of such a bond.
SECTION 4. RECORD OF HOLDER OF SHARES.
The Company shall be entitled to treat the holder of record of any share
or shares as the holder in fact thereof, and accordingly shall not be bound to
recognize any equitable or other claims to or interest in such shares on the
part of any other person, whether or not it shall have express or other notice
thereof, save as expressly provided by the General Corporation Law of the State
of Delaware. The Company shall be entitled to recognize the exclusive right of
a person registered on its books as the owner of shares to receive dividends and
to vote as such owner.
SECTION 5. RECORD DATE.
In order that the Company may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders, or to receive payment of any
dividend or other distribution or allotment of any rights or to exercise any
rights in respect of any change, conversion or exchange of stock (other than
conversions or exchanges pursuant to Article 4 of the Charter) or for the
purpose of any other lawful action, the Board of Directors may fix a record
date, which record date shall not precede the date on which the resolution
fixing the record date is adopted and which record date shall not be more
than sixty (60) nor less than ten (10) days before the date of any meeting
of stockholders, nor more than
sixty (60) days prior to the time for such other action as hereinbefore
described; provided, however, that if no record date is fixed by the Board of
Directors, the record date for determining stockholders entitled to notice of or
to vote at a meeting of stockholders shall be at the close of business on the
day next preceding the day on which notice is given or, if notice is waived, at
the close of business on the day next preceding the day on which the meeting
is held, and, for determining stockholders entitled to receive payment of any
dividend or other distribution or allotment of rights or to exercise any
rights of change,
conversion or exchange of stock (other than conversions or exchanges pursuant to
Article 4 of the Charter) or for any other purpose, the record date shall be at
the close of business on the day on which the Board of Directors adopts a
resolution relating thereto.
A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
If stockholders are entitled to consent to corporate action in writing
without a meeting in accordance with the General Corporation Law of the State of
Delaware and the Charter, in order that the Company may determine the
stockholders entitled to so consent, the Board of Directors may fix a record
date, which shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Directors, and which record date shall be
not more than ten (10) days after the date upon which the resolution fixing the
record date is adopted and no record date has been fixed by the Board of
Directors and if no prior action by the Board of Directors is required by the
General Corporation Law of the State of Delaware, the record date shall be the
first date on which a signed written consent setting forth the action taken or
proposed to be taken is delivered to the Company in the manner prescribed by
Article 12 of the Charter. If stockholders are entitled to consent to corporate
action in writing without a meeting in accordance with the General Corporation
Law of the State of Delaware and the Charter, and no record date has been fixed
by the Board of Directors and prior action by the Board of Directors is required
by the General Corporation Law of the State of Delaware with respect to the
proposed action by written consent of the stockholders, the record date for
determining stockholders entitled to consent to corporate action in writing
shall be at the close of business on the day on which the Board of Directors
adopts the resolution taking such prior action.
SECTION 6. REGULATIONS.
The Board of Directors shall have power and authority to make all such
rules and regulations not inconsistent with any of the provisions of Article 4
of the Charter, as it may deem expedient, concerning the issue, transfer and
registration of certificates for shares of the stock of the Company.
SECTION 7. CORPORATE SEAL.
The corporate seal shall be in such form as shall from time to time be
approved by the Board of Directors. If and when so authorized by the Board of
Directors, a duplicate of the seal may be kept and used by the Secretary or
Treasurer or by any Assistant Secretary or Assistant Treasurer.
ARTICLE VIII.
EXECUTIVE OF CONTRACTS AND OTHER DOCUMENTS
SECTION 1. CONTRACTS, ETC.
Except as otherwise prescribed in these By-laws, such officers, employees
or agents of the Company as shall be specified by the Board of Directors shall
sign, in the name and on behalf of the Company, all deeds, bonds, contracts,
mortgages and other instruments or documents, the execution of which shall be
authorized by the Board of Directors; and such authority may be general or
confined to specific instances. Except as so authorized by the Board of
Directors, no officer, agent or employee of the Company shall have power or
authority to bind the Company by any contract or engagement or to pledge,
mortgage, sell or otherwise dispose of its credit or any of its property or to
render it pecuniarily liable for any purpose or in any amount.
SECTION 2. CHECKS, DRAFTS, ETC.
Except as otherwise provided in these By-laws, all checks, drafts, notes,
bonds, bills of exchange or other orders, instruments or obligations for the
payment of money shall be signed by such officer or officers, employee or
employees, or agent or agents, as the Board of Directors shall by resolution
direct. The Board of Directors may, in its discretion, also provide by
resolution for the countersignature or registration of any or all such orders,
instruments or obligations for the payment of money.
ARTICLE IX.
FISCAL YEAR
The fiscal year of the Company shall begin the first day of January in each
year.
ARTICLE X.
MISCELLANEOUS
SECTION 1. ORIGINAL STOCK LEDGER.
As used in these By-laws and in the Charter, the words "original stock
ledger" shall mean the record maintained by the Secretary of the Company of the
name and address of each of the holders of shares of any class of stock of the
Company, and the number of shares and the numbers of the certificates for such
shares held by each of them, taking into account transfers at the time made by
and recorded on the transfer sheets of each of the Transfer Agents of the
Company although such transfers may not have been posted in the record
maintained by the Secretary.
SECTION 2. NOTICES AND WAIVERS THEREOF.
Whenever any notice whatever is required by these By-laws, the Charter or
any of the laws of the State of Delaware to be given to any stockholder,
director or officer, such notice, except as otherwise provided by the laws of
the State of Delaware, may be given personally or by telephone or be given by
facsimile transmission or other form of electronic communication, addressed
to such stockholder at the address set forth as provided in Section 2 of
Article VII of these By-laws, or to such director or officer at his or
her Company location, if any, or at such address as appears on the books
of the Company, or the notice may be given in writing by depositing the same
in a post office, or in a regularly maintained letter box, or by sending it
via courier in a postpaid, sealed wrapper
addressed to such stockholder at the address set forth in Section 2 of Article
VII of these By-laws, or to such director or officer at his or her Company
location, if any, or such address as appears on the books of the Company.
Any notice given by facsimile transmission or other form of electronic
communication shall be deemed to have been given when it shall have been
transmitted. Any notice given by mail or courier shall be deemed to have been
given when it shall have been mailed or delivered to the courier.
A waiver of any such notice in writing, including by facsimile
transmission, signed or dispatched by the person entitled to such notice or by
his or her duly authorized attorney, whether before or after the time stated
therein, shall be deemed equivalent to the notice required to be given, and the
presence at any meeting of any person entitled to notice thereof shall be deemed
a waiver of such notice as to such person.
SECTION 3. VOTING UPON STOCKS.
The Board of Directors (whose authorization in this connection shall be
necessary in all cases) may from time to time appoint an attorney or attorneys
or agent or agents of the Company, or may at any time or from time to time
authorize the Chairman of the Board of Directors, any Vice Chairman of the Board
of Directors, the President, any Senior Executive Vice President, any Executive
Vice President, any Senior Vice President, any Vice President, the Treasurer or
the Secretary to appoint an attorney or attorneys or agent or agents of the
Company, in the name and on behalf of the Company, to cast the votes which the
Company may be entitled to cast as a stockholder or otherwise in any other
corporation or association, any of the stock or securities of which may be held
by the Company, at meetings of the holders of the stock or other securities of
such other corporation or association, or to consent in writing to any action by
any such other corporation or association and the Board of Directors or any
aforesaid officer so authorized may instruct the person or persons so appointed
as to the manner of casting such votes or giving such consent, and the Board of
Directors or any aforesaid officer so authorized may from time to time authorize
the execution and delivery, on behalf of the Company and under its corporate
seal, or otherwise, of such written proxies, consents, waivers or other
instruments as may be deemed necessary or proper in the premises.
ARTICLE XI.
AMENDMENTS
These By-laws may be altered, amended or repealed at any meeting of the
Board of Directors or of the stockholders, provided that notice of such
alteration, amendment or repeal be contained in the notice of such meeting of
the Board of Directors or stockholders (subject, in the case of meetings of
stockholders, to the provisions of Article II of these By-laws), as the case may
be. All such amendments must be approved by the affirmative vote of the holders
of at least 75% of the total voting power of all classes of outstanding capital
stock, voting together as a single class (if effected by action of the
stockholders), or by the affirmative vote of directors constituting not less
than a majority of the total number of directors that the Company would have
if there were no vacancies on the Company's Board of Directors (if effected
by action of the Board of Directors).
<PAGE>
EXHIBIT 12
ASSOCIATES FIRST CAPITAL CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollar Amounts in Millions)
Nine Months Ended
September 30
1996 1995
Fixed Charges (a)
Interest expense $1,811.7 $1,607.0
Implicit interest in rent 15.0 14.1
Total fixed charges $1,826.7 $1,621.1
Earnings (b)
Earnings before provision for income
taxes $1,025.7 $ 873.5
Fixed charges 1,826.7 1,621.1
Earnings, as defined $2,852.4 $2,494.6
Ratio of Earnings to Fixed Charges 1.56 1.54
(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.
<PAGE>
<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 September 30, 1996 and the nine months then ended and is qualified
in its entirety by reference to such consolidated financial statements.
</LEGEND>
<CIK> 0000007974
<NAME> ASSOCIATES FIRST CAPITAL CORPORATION
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 422
<SECURITIES> 996
<RECEIVABLES> 46,025
<ALLOWANCES> 1,535
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 47,551
<CURRENT-LIABILITIES> 0
<BONDS> 40,790
<COMMON> 4
0
0
<OTHER-SE> 5,251
<TOTAL-LIABILITY-AND-EQUITY> 47,551
<SALES> 5,206
<TOTAL-REVENUES> 5,206
<CGS> 0
<TOTAL-COSTS> 4,180
<OTHER-EXPENSES> 1,573
<LOSS-PROVISION> 795
<INTEREST-EXPENSE> 1,812
<INCOME-PRETAX> 1,026
<INCOME-TAX> 403
<INCOME-CONTINUING> 623
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 623
<EPS-PRIMARY> 1.79
<EPS-DILUTED> 0
</TABLE>
