<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event) January 28, 1997
ASSOCIATES FIRST CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 06-0876639
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification Number)
2-44197
(Commission File Number)
250 E. Carpenter Freeway, Irving, Texas 75062-2729
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (972) 652-4000
<PAGE>
Item 5. Other Events.
Associates First Capital Corporation announced its fourth quarter and year end
earnings in a news release dated January 28, 1997. A copy of the news
release is attached as an Exhibit hereto and incorporated by
reference herein.
Item 7. Financial Statements and Exhibits
(C) Exhibits
20 - News release by Associates First Capital Corporation
dated January 28, 1997 with supporting financial schedules.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ASSOCIATES FIRST CAPITAL CORPORATION
By: /s/Kevin P. Hegarty
Senior Vice President and Comptroller
Date: January 28, 1997<PAGE>
<PAGE>
Contact: Fred Stern FOR IMMEDIATE RELEASE
(972) 652-4522
[email protected]
ASSOCIATES FIRST CAPITAL CORPORATION REPORTS
22ND CONSECUTIVE YEAR OF INCREASED EARNINGS
AND RECORD FOURTH QUARTER
DALLAS, January 28, 1997 -- Associates First Capital Corporation
(NYSE: AFS) reported record net earnings for the fourth quarter and for the
year ended December 31, 1996. It was the 22nd consecutive year of increased
earnings, Keith W. Hughes, chairman and chief executive officer, announced
today.
Net earnings for the three-month period ended December 31 increased
20% to $234.3 million ($0.68 per share), compared with $194.8 million ($0.56
per share) in 1995. Earnings before provision for income taxes for the
three-month period increased 17% to $378.9 million, compared with
$324.6 million a year ago.
Net earnings for the year were $857.0 million ($2.47 per share), a
19% increase over the $723.1 million ($2.09 per share) for the prior year.
Earnings before provision for income taxes were $1.4 billion, a gain of 17%
over the $1.2 billion from a year ago.
"In addition to our successful initial public offering, 1996 was a
historic year by every measure. We successfully entered new domestic and
international markets and expanded existing business relationships," Mr.
Hughes said. "We had strong and balanced net receivables growth as assets
under management grew $9.1 billion to exceed $50 billion. This increased
level of earning assets, combined with stable margins and improved efficiency,
resulted in our 22nd consecutive year of increased earnings."
The company said that net finance receivables grew 17% over the
same time a year ago, excluding securitized finance receivables. Net finance
receivables outstanding at December 31, 1996, were $46.5 billion, compared
with $39.7 billion at year-end 1995. In addition, the company also services
$2.1 billion in securitized finance receivables.
"Our growth was balanced among our business areas -- consumer
finance, credit card, commercial finance, and international -- with almost
half the growth as the result of major strategic acquisitions," Mr. Hughes
said.
During the year, The Associates acquired several major credit card
portfolios, and a consumer finance branch network in the Southeast U.S. In
addition, it acquired companies engaged in the financing or leasing of motor
vehicle fleets, telecommunications equipment and recreational vehicles.
Consumer finance net receivables outstanding were $31.4 billion at
December 31, 1996, a 14% increase over the $27.6 billion reported in 1995.
Consumer finance receivables consist of residential real estate-secured
receivables, personal loans, sales financing of consumer durable goods,
manufactured housing and credit cards in the U.S. and internationally.
Commercial finance net receivables outstanding were $15.1 billion
at December 31, 1996, up 25% from the $12.1 billion reported a year ago.
Commercial finance receivables result from the financing and leasing of
transportation, construction, communications, material handling and
industrial equipment in the U.S. and internationally. The company is also a
significant provider of automobile fleet leasing services and other products
and services, including recreational vehicle financing, municipal leasing,
small business lending, employee relocation services and emergency roadside
assistance and auto club services.
Associates First Capital Corporation is a leading diversified
finance company providing consumer and commercial finance, leasing and related
services through 2,133 offices in the U.S. and internationally. Based in
Dallas, it is an indirect, majority-owned subsidiary of Ford Motor Company.
(TABLE FOLLOWS)
<PAGE>
ASSOCIATES FIRST CAPITAL CORPORATION
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
==========================================================================================================
Three Months Ended or at Year Ended or at
($ millions - except
earnings per share) 12/31/96 12/31/95 % Change 12/31/96 12/31/95 % Change
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Earnings before provision
for income taxes $ 378.9 $ 324.6 17 $ 1,404.6 $ 1,198.1 17
Net earnings
Amount 234.3 194.8 20 857.0 723.1 19
Return on average equity 17.54 % 16.78 % 18.31 % 15.66 %
Return on average
adjusted equity <F1> 20.86 21.58 22.86 20.26
Return on average assets 1.96 1.92 1.89 1.89
Net earnings per share $ 0.68 $ 0.56 20 $ 2.47 $ 2.09 19
Stockholders' equity $ 5,437.5 $ 4,801.1 13
Net finance receivables
Consumer finance $ 31,403.0 $ 27,575.3 14
Commercial finance 15,109.9 12,127.2 25
----------- ----------- --------
Total net finance receivables $ 46,512.9 $ 39,702.5 17
=========== =========== ========
Total assets: $ 48,268.4 $ 41,303.9 17
Managed assets $ 50,378.3 $ 41,303.9 22
Total revenue $ 1,892.6 $ 1,601.9 18 $ 7,098.2 $ 6,107.2 16
Net interest margin (as a % of
ANR)<F2> 9.37 % 9.19 % 9.29 % 9.22 %
Efficiency ratio 44.6 45.0 44.6 46.3
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended or at Year Ended or at
12/31/96 09/30/96 12/31/96 12/31/95
-------------------------------------------------------------
Credit Quality:
<S> <C> <C> <C> <C>
60+Days contractual delinquency 2.20 % 2.05 % 2.20 % 1.71 %
Credit losses (as a % of ANR) 2.26 % 2.14 % 2.03 % 1.70 %
Allowance for losses on finance
receivables
Amount $ 1,563.1 $ 1,535.1 $ 1,563.1 $ 1,268.6
Percent of net finance
receivables 3.36 % 3.34 % 3.36 % 3.20 %
<FN>
<F1> Excludes push-down goodwill created by Ford acquisition of foreign affiliates in 1989.
<F2> Adjusted to exclude IPO - related charges in year-to-date.
</FN>
/TABLE
<PAGE>
ASSOCIATES FIRST CAPITAL CORPORATION
QUARTERLY FINANCIAL SUPPLEMENT
<TABLE>
<CAPTION>
Statement of Earnings Page 1
=========================================================================================
Three Months Ended or at Change from Prior Year
Consolidated ($ millions) 12/31/96 09/30/96 12/31/95 Amount Percent
<S> <C> <C> <C> <C> <C>
Revenue
Finance charges $ 1,727.7 $ 1,680.7 $ 1,467.4 $ 260.3 17.7 %
Insurance premiums 104.5 104.0 91.3 13.2 14.5
Investment and other income 60.4 58.9 43.2 17.2 39.7
- ----------------------------------------------------------------------------
1,892.6 1,843.6 1,601.9 290.7 18.2
Expenses
Interest expense 644.3 637.7 570.9 73.4 12.9
Operating expenses 540.0 518.5 447.4 92.6 20.7
Provision for losses on
finance receivables 291.1 267.4 221.4 69.7 31.5
Insurance benefits paid or
provided 38.3 38.7 37.6 0.7 2.0
- ----------------------------------------------------------------------------
1,513.7 1,462.3 1,277.3 236.4 18.5
- ----------------------------------------------------------------------------
Earnings before provision
for income taxes 378.9 381.3 324.6 54.3 16.7
Provision for income taxes 144.6 151.1 129.8 14.8 11.5
- ----------------------------------------------------------------------------
Net earnings $ 234.3 $ 230.2 $ 194.8 $ 39.5 20.2 %
============================================================================
Average Net Finance
Receivables $46,269.3 $45,280.7 $39,002.3 $ 7,267.0 18.6 %
Balance Sheet Items ($ millions)
============================================================================
Total assets:
End of period $48,268.4 $47,550.6 $41,303.9 $ 6,964.5 16.9 %
Average 47,932.8 47,263.7 40,630.1 7,302.7 18.0
Managed assets 50,378.3 49,337.3 41,303.9 9,074.4 22.0
Debt 41,104.7 40,790.0 35,119.9 5,984.8 17.0
Stockholders' equity:
End of period 5,437.5 5,254.7 4,801.1 636.4 13.3
Per share (whole $) 15.69 15.16 13.85 1.84 13.3
Average 5,341.5 5,176.3 4,645.2 696.3 15.0
Debt-to-equity 7.55 x 7.75 x 7.29 x
Debt-to-adjusted equity <F1> 8.89 9.27 9.00
Key Ratios
=========================================================================================
Net interest margin 9.37 % 9.21 % 9.19 %
Efficiency ratio 44.6 44.4 45.0
Net earnings per
share (whole $) $ 0.68 $ 0.66 $ 0.56 $ 0.12 21.4 %
Equivalent shares for
EPS calculation 346,654 346,654 346,654
<FN>
<F1> Excludes push-down goodwill created by Ford acquisition of foreign affiliates in 1989.
</FN>
/TABLE
<PAGE>
ASSOCIATES FIRST CAPITAL CORPORATION
QUARTERLY FINANCIAL SUPPLEMENT
<TABLE>
<CAPTION>
Receivables/Servicing Portfolios Page 2
=========================================================================================
Change from Prior Year
Receivables ($ millions) 12/31/96 09/30/96 12/31/95 Amount Percent
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Consumer
Home equity lending $ 16,691.4 $ 16,743.2 $ 14,316.3 $ 2,375.1 16.6 %
Personal lending and retail
sales finance 7,425.1 7,324.7 6,225.1 1,200.0 19.3
Credit card 6,023.8 5,970.6 4,984.6 1,039.2 20.8
Manufactured housing 1,262.7 1,496.2 2,049.3 (786.6) (38.4)
- ------------------------------------------------------------------------------
31,403.0 31,534.7 27,575.3 3,827.7 13.9
Commercial
Truck and truck trailer 8,598.3 8,449.2 7,724.0 874.3 11.3
Equipment 4,571.8 4,434.6 4,012.0 559.8 14.0
Other 1,939.8 1,606.6 391.2 1,548.6 N/M
- ------------------------------------------------------------------------------
15,109.9 14,490.4 12,127.2 2,982.7 24.6
- ------------------------------------------------------------------------------
Net finance receivables $ 46,512.9 $ 46,025.1 $ 39,702.5 $ 6,810.4 17.2 %
==============================================================================
</TABLE>
<TABLE>
<CAPTION>
Servicing Portfolios Three Months Ended or at
($ millions) 12/31/96 09/30/96 12/31/95
- -----------------------------------------------------------------------------------------
Manufactured Housing
<S> <C> <C> <C>
Outstanding net
receivables:
End of period $ 1,284.8 $ 913.4 $ -
Average 1,201.2 228.3 -
Finance charge yield 11.25 % 11.11 % - %
60+days contractual
delinquency 0.71 0.28 -
Credit losses (as a % of ANR) 0.34 0.21 -
Recreational Vehicles
Outstanding net receivables:
End of period $ 825.1 $ 873.3 $ -
Average 848.5 795.6 -
Finance charge yield 9.49 % 9.50 % - %
60+day contractual delinquency 0.05 0.05 -
Credit losses (as a % of ANR) 0.31 0.31 -
/TABLE
<PAGE>
ASSOCIATES FIRST CAPITAL CORPORATION
QUARTERLY FINANCIAL SUPPLEMENT
<TABLE>
<CAPTION>
Credit Quality/Credit Loss Reserves Page 3
=========================================================================================
Three Months Ended or at
60+ Days Contractual Delinquency 12/31/96 09/30/96 12/31/95
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Consumer
Home equity lending 2.12 % 1.95 % 1.90 %
Personal lending and retail sales finance 3.32 3.05 2.58
Credit card 4.22 4.18 3.41
Manufactured housing 1.34 1.24 0.73
Total Consumer 2.77 2.58 2.19
Commercial
Truck and truck trailer 1.45 1.17 0.74
Equipment 0.67 0.76 0.56
Total Commercial 1.05 0.93 0.64
Total 2.20 % 2.05 % 1.71 %
Net Credit Losses to ANR
- -----------------------------------------------------------------------------------------
Consumer
Home equity lending 0.72 % 0.89% 1.08 %
Personal lending and retail sales finance 5.44 5.14 4.16
Credit card 7.41 6.62 4.44
Manufactured housing 1.56 0.97 1.12
Total Consumer 3.13 2.97 2.38
Commercial
Truck and truck trailer 0.38 0.35 0.30
Equipment 0.49 0.42 0.36
Total Commercial 0.40 0.33 0.31
Total 2.26 % 2.14 % 1.76 %
Credit Loss Reserves
- -----------------------------------------------------------------------------------------
Allowance for losses:
Balance at end of period $ 1,563.1 $ 1,535.1 $ 1,268.6
To net finance receivables 3.36 % 3.34 % 3.20 %
Multiple to net credit losses (Trailing 4 Qtrs) 1.77 x 1.93 x 2.03 x
</TABLE>
