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 June 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)
214-541-4000
(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 June 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)
Six Months Ended Three Months Ended
June 30 June 30
1996 1995 1996 1995
REVENUE
Finance charges $3,072.6 $2,666.8 $1,567.6 $1,377.9
Insurance premiums 193.6 187.4 100.5 94.9
Investment and other
income 95.8 85.5 48.9 41.9
3,362.0 2,939.7 1,717.0 1,514.7
EXPENSES
Interest expense 1,174.0 1,049.5 593.5 540.3
Operating expenses 944.4 873.7 483.2 469.8
Provision for losses on
finance receivables 528.0 401.8 275.7 201.7
Insurance benefits paid
or provided 71.2 68.8 37.0 30.8
2,717.6 2,393.8 1,389.4 1,242.6
EARNINGS BEFORE PROVISION
FOR INCOME TAXES 644.4 545.9 327.6 272.1
PROVISION FOR INCOME TAXES 251.9 215.2 127.4 109.7
NET EARNINGS $ 392.5 $ 330.7 $ 200.2 $ 162.4
EARNINGS PER SHARE* $ 1.13 $ 0.95 $ 0.58 $ 0.47
* Based on 346.7 million shares of Class A and Class B Common Stock
outstanding and in whole dollars.
See notes to consolidated financial statements.
<PAGE>
ASSOCIATES FIRST CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEET
(In Millions)
June 30 December 31
1996 1995
ASSETS
CASH AND CASH EQUIVALENTS $ 484.2 $ 532.2
INVESTMENTS IN DEBT AND EQUITY SECURITIES
- NOTE 3 966.5 881.1
FINANCE RECEIVABLES, net of unearned finance
income - NOTE 4
Consumer Finance 30,165.8 27,575.3
Commercial Finance 13,423.7 12,127.2
Total net finance receivables 43,589.5 39,702.5
ALLOWANCE FOR LOSSES ON FINANCE RECEIVABLES
- NOTE 5 (1,469.0) (1,268.6)
INSURANCE POLICY AND CLAIMS RESERVES (659.3) (625.4)
OTHER ASSETS - NOTE 6 2,204.5 2,082.1
Total assets $45,116.4 $41,303.9
LIABILITIES AND STOCKHOLDERS' EQUITY
NOTES PAYABLE, unsecured short-term
Commercial Paper $16,170.7 $12,902.9
Bank Loans 519.2 844.4
ACCOUNTS PAYABLE AND ACCRUALS 1,393.7 1,382.9
LONG-TERM DEBT
Senior Notes 21,800.4 21,230.8
Subordinated and Capital Notes 125.5 141.8
21,925.9 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 4,007.0 2,066.0
Retained Earnings 840.5 2,345.3
Foreign Currency Translation Adjustments 262.4 330.6
Unrealized (Loss) Gain on Available-for-Sale
Securities - NOTE 3 (6.5) 12.2
Total stockholders' equity 5,106.9 4,801.1
Total liabilities and stockholders' equity $45,116.4 $41,303.9
See notes to consolidated financial statements.
<PAGE>
ASSOCIATES FIRST CAPITAL CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(In Millions)
Six Months Ended
June 30
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 392.5 $ 330.7
Adjustments to net earnings for noncash items:
Provision for losses on finance receivables 528.0 401.8
Depreciation and amortization 100.5 80.5
Increase in accounts payable and accruals 34.2 129.2
Increase in insurance policy and claims
reserves 33.9 30.7
Deferred income taxes (40.3) 32.6
Unrealized gain on trading securities (0.1) (3.0)
Purchases of trading securities (5.8)
Sales and maturities of trading securities 0.7 36.5
Net cash provided from operating activities 1,049.4 1,033.2
CASH FLOWS FROM INVESTING ACTIVITIES
Finance receivables originated or purchased (21,036.1) (17,996.4)
Finance receivables liquidated 17,134.3 14,347.7
Acquisitions of other finance businesses, net (71.7) (116.1)
Purchases of available-for-sale securities (190.3) (482.9)
Sales and maturities of available-for-sale
securities 75.3 212.7
Decrease in real estate loans held for sale 7.4 1.5
Increase in other assets (133.4) (136.6)
Net cash used for investing activities (4,214.5) (4,170.1)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of long-term debt 2,197.0 3,218.5
Retirement of long-term debt (1,753.5) (769.8)
Increase in notes payable 2,741.8 619.0
Cash dividends to Ford (1,897.3) (145.0)
Sale of Class A Common Stock 1,850.0
Capital contributions 47.3
Net cash provided from financing activities 3,185.3 2,922.7
Effect of foreign currency translation
adjustments on cash (68.2) 185.8
DECREASE IN CASH AND CASH EQUIVALENTS (48.0) (28.4)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 532.2 606.0
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 484.2 $ 577.6
CASH PAID FOR:
Interest $ 1,212.0 $ 1,058.4
Income taxes $ 244.6 $ 200.9
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 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 June 30, 1996 and
December 31, 1995 was $954.5 million and $868.5 million, respectively.
Amortized cost at June 30, 1996 and December 31, 1995 was $964.7 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 June 30, 1996 and December 31, 1995 was $12.0
million and $12.6 million, respectively. Historical cost at June 30, 1996 and
December 31, 1995 was $7.8 million and $8.5 million, respectively.
NOTE 4 - NET FINANCE RECEIVABLES
At June 30, 1996 and December 31, 1995, net finance receivables consisted of
the following (in millions):
June 30 December 31
1996 1995
Consumer Finance
Home equity lending $15,145.5 $14,316.3
Personal lending and retail sales finance 6,765.1 6,225.1
Credit card 5,979.5 4,984.6
Manufactured housing 2,275.7 2,049.3
30,165.8 27,575.3
Commercial Finance
Truck and truck trailer 8,241.4 7,724.0
Equipment 4,207.9 4,012.0
Other 974.4 391.2
13,423.7 12,127.2
Net finance receivables $43,589.5 $39,702.5
On May 24, 1996, Associates acquired the assets of Fleetwood Credit Corp.,
principally consisting of recreational vehicles. The fair market value of
total assets acquired and liabilities assumed was $473.8 million and $338.1
million, respectively.
On January 1, 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.
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):
Six Months Ended Year Ended
June 30 June 30 December 31
1996 1995 1995
Balance at beginning of
period $1,268.6 $1,061.6 $1,061.6
Provision for losses 528.0 401.8 834.0
Recoveries on receivables
charged off 73.9 70.3 132.9
Losses sustained (456.0) (355.6) (757.1)
Reserves of acquired
businesses and other 54.5 14.2 (2.8)
Balance at end of period $1,469.0 $1,192.3 $1,268.6
<PAGE>
NOTE 6 - OTHER ASSETS
The components of Other Assets at June 30, 1996 and December 31, 1995 were as
follows (in millions):
June 30 December 31
1996 1995
Goodwill $1,205.6 $1,278.9
Other 998.9 803.2
Total other assets $2,204.5 $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 certain issues of Associates debt securities, the
latest of 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, $199.6 million was available for
dividends at June 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 June 30, 1996, Associates tangible net worth was approximately
$4.5 billion.
NOTE 8 - RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges of First Capital for the six months
ended June 30, 1996 and 1995 was 1.54 and 1.52, 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
Six- and Three-Month Periods Ended June 30, 1996 Compared to the Six- and
Three-Month Periods Ended June 30, 1995.
Net earnings for the six-month period ended June 30, 1996 were $392.5
million, an 18.7% increase over the same period in the previous year. Net
earnings for the three months ended June 30, 1996 were $200.2 million, an
increase of 23.3% 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 improvement in the ratio of net interest margin to
average net receivables and an increase in operating expense efficiency, all
of which more than offset increases in the provision for losses.
Finance charge revenue, on a dollar basis, increased for the six and three
months ended June 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 14.76% and 14.81% for the six
months and three months ended June 30, 1996, respectively. This compares to
15.06% and 15.21% for the comparable periods in 1995, respectively. The
decreases in the composite portfolio finance charge ratios for both
comparative periods were principally due to changes in the mix of finance
receivables during the period.
Interest expense increased for the six- and three-month periods ended June
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 rate for the six- and three-month periods
ended June 30, 1996 were 6.37% and 6.20%, respectively, compared to 6.71% and
6.77% 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 $1.9 billion
and $974.1 million for the six- and three-month periods ended June 30, 1996,
respectively, compared to $1.6 billion and $837.6 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 improved to 9.23% and 9.28% for
the six- and three-month periods ended June 30, 1996, respectively, compared
to 9.13% and 9.25% for the same periods in the prior year. The six-month and
three-month ratios for 1996 exclude the one-time charges related to the
Company's initial public offering of 11 and 8 basis points, respectively. The
principal cause of the increase in each of the comparable periods was the
Company's ability to maintain its lending rates on new loans in a period
during which its average borrowing rates decreased.
Six- and three-month operating expenses as of June 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 44.6% and 44.5% for the six-
and three-month periods ended June 30, 1996, respectively, compared to 48.0%
and 49.8% for the same periods in the prior year. The improvement in both
comparable periods principally reflects the benefit from certain initiatives
designed to improve operating efficiency.
The Company's provision for losses increased from $401.8 million for the
first six months of 1995 to $528.0 million for the same period in 1996. The
provision for losses for the three-month period ended June 30, 1996 increased
from $201.7 million in the prior year period to $275.7 million for the current
period. In both cases, the provision increased principally as a result of
increased losses. Total net losses as a percentage of average net finance
receivables (the "Loss Ratio") were 1.84% and 1.95% for the six- and three-
month periods ended June 30, 1996, respectively, compared to 1.61% and 1.54%
for the same periods in 1995. The Loss Ratio increased in substantially all
of the Company's portfolios, the most significant 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 six- and three-month
periods ended June 30, 1996 as a result of the aforementioned favorable
changes over 1995. The effective tax rates for the six- and three-month
periods ended June 30, 1996 were 39.1% and 38.9%, respectively, compared to
39.4% and 40.3% for the comparable periods in 1995. The decrease in the
three-month effective tax rate for the second quarter of 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 $3.9 billion and $2.5 billion during the six-
and three-month periods ended June 30, 1996, respectively, compared to $3.4
billion and $1.8 billion for the same period in 1995. The Company had growth
in substantially all of its portfolios in both periods. However, of the total
growth, 40.8% in the six-month period and 39.9% in the three-month period,
resulted from major acquisitions, principally of credit card and other
commercial portfolios and businesses.
Total 60+days contractual delinquency was 1.80% at June 30, 1996, which
was higher than the 1.78% reported at March 31, 1996 and 1.71% at December 31,
1995. Consumer delinquency was 2.25% at June 30, 1996, which was higher than
the 2.24% and 2.19% reported at March 31, 1996 and December 31, 1995,
respectively. Commercial delinquency was 0.80% at June 30, 1996 compared to
0.73% and 0.64% at March 31, 1996 and December 31, 1995, respectively, also
reflecting an increase. Although the Company experienced increased
delinquency in substantially all of its portfolios, the highest increase was
in the credit card portfolio. 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 aforementioned increase in delinquency, net losses and the generally
less favorable economic conditions, led the Company to increase its allowance
for losses to 3.37% of net finance receivables at June 30, 1996, compared to
3.33% at March 31, 1996 and 3.20% at December 31, 1995. The allowance for
losses to annualized net credit losses was 1.92 times net losses at June 30,
1996, compared to 1.95 and 2.03 times losses at March 31, 1996 and December
31, 1995, respectively. Management believes the allowance for losses at June
30, 1996, is sufficient to provide adequate protection against losses in its
portfolios.
During the six and three months ended June 30, 1996, stockholders' equity
increased principally as a result of the aforementioned increase in net
earnings, partially offset as a result of recording unrealized foreign
currency translation losses principally related to its yen and sterling-
denominated net investments in its Japan and United Kingdom operations, and
unrealized losses on its insurance subsidiaries' investments in marketable
debt securities of $86.9 million and $32.5 million, respectively.
As a result of the aforementioned, the Company's return on average assets,
average equity and average tangible equity for the six-month period ended June
30, 1996 was 1.82%, 15.85% and 21.15%, respectively. This compares to a
return on average assets, average equity and average tangible equity for the
six months ended June 30, 1995 of 1.78%, 14.28% and 20.59%, respectively.
LIQUIDITY
The principal sources of cash for the Company are proceeds from the
issuance of short- and long-term debt in both the United States and foreign
countries in which it operates and cash provided from the Company's
operations. Management believes that the Company has sufficient liquidity,
from a combination of cash provided from operations and external borrowing,
to support its operations.
At June 30, 1996, the Company had short- and long-term debt outstanding
of $16.7 billion and $21.9 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 the
Company in the United States and foreign countries in which the Company
operates. During the six- and three-month periods ended June 30, 1996 and
1995, the Company raised debt aggregating $2.2 billion and $1.1 billion, and
$3.2 billion and $1.6 billion, 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. At June 30, 1996, short-term bank lines, revolving credit
facilities and receivable purchase facilities totaled $12.2 billion, $68.2
million of which was in use in the United Kingdom at that date. These
facilities represent 75% of net short-term indebtedness outstanding at June
30, 1996.
Management believes that the Company has limited exposure to foreign
currency exchange risks resulting from transactions with its foreign
affiliates. It has been the historical 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 June 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. As a result of the general decline in the value of such currencies
in relationship to the U.S. dollar at and for the period ended June 30, 1996
versus December 31, 1995, the Company recorded an unrealized translation loss
of approximately $68.2 million as an adjustment to stockholders' equity.
<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.
On May 1, 1996, prior to an initial public offering of Class A
Common Stock, the then sole stockholder of the Company took the
following action by written consent without a meeting, and in lieu
of an annual stockholder meeting for 1996: (i) approval of the
restatement of the Company's Certificate of Incorporation; (ii)
approval of two plans relating to employee compensation; and (iii)
election of the following four persons to the Company's Board of
Directors: Roy A. Guthrie, Keith W. Hughes, Harold D. Marshall and
Joseph M. McQuillan.
ITEM 5. OTHER INFORMATION
On July 31, 1996, the Board of Directors increased the size of the
Board from four to seven persons. As part of the increase in board
size and the change in its composition as contemplated by the
Company in its initial public offering of Class A Common Stock in
May, 1996, Roy A. Guthrie resigned as a member of the Board, but
remains Executive Vice President, Comptroller, Chief Accounting
Officer and Chief Financial Officer. The Board elected four new
members, effective August 1, 1996, as follows: J. Carter Bacot, John
Devine, H. James Toffey, Jr., and Kenneth Whipple. Messrs. Devine
and Whipple are officers of Ford Motor Company, the indirect
majority stockholder of the Company.
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 second quarter ended June 30, 1996, First Capital
filed a Current Report on Form 8-K dated May 23, 1996, related
to the acquisition of the Associates International Group.
<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.
August 12, 1996
ASSOCIATES FIRST CAPITAL CORPORATION
(registrant)
By/s/ Roy A. Guthrie
Executive Vice President, Comptroller,
Principal Accounting Officer and
Chief Financial Officer
<PAGE>
EXHIBIT 12
ASSOCIATES FIRST CAPITAL CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollar Amounts in Millions)
Six Months Ended
June 30
1996 1995
Fixed Charges (a)
Interest expense $1,174.0 $1,049.5
Implicit interest in rent 9.8 9.2
Total fixed charges $1,183.8 $1,058.7
Earnings (b)
Earnings before provision for income
taxes $ 644.4 $ 545.9
Fixed charges 1,183.8 1,058.7
Earnings, as defined $1,828.2 $1,604.6
Ratio of Earnings to Fixed Charges 1.54 1.52
(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 June 30, 1996 and the six months then
ended and is qualified in its entirety by reference to such consolidated
financial statements.
</LEGEND>
<CIK> 0000007974
<NAME> ASSOCIATES FIRST CAPITAL CORPORATION
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