<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) April 15, 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 first quarter
earnings in a news release dated April 15, 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 April 15, 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: April 15, 1997<PAGE>
<PAGE>
Contact: Fred Stern FOR IMMEDIATE RELEASE
(972) 652-4522
[email protected]
ASSOCIATES FIRST CAPITAL CORPORATION
REPORTS RECORD EARNINGS
DALLAS, April 15, 1997 -- Associates First Capital
Corporation (NYSE: AFS) achieved record earnings for the first
quarter of 1997, Keith W. Hughes, chairman and chief executive
officer, announced today.
Net earnings for the three-month period ended March 31, 1997,
increased 24% to $237.8 million, or $0.69 per share. This
compares with $192.3 million and $0.55 per share a year ago.
Earnings before provision for income taxes increased 19% to
$377.5 million for the period, compared with $316.8 million for
the prior year.
"The first quarter represented a continuation of our
successful year in 1996. Our higher level of earning assets,
coupled with improved efficiency and margins, helped us achieve
our 89th consecutive quarterly record," said Mr. Hughes. "While
credit losses and bankruptcies are rising throughout the credit
industry, we continue to emphasize quality underwriting and
strong customer relationships."
Total assets managed by the company at March 31, 1997, were
$51.8 billion, a record high. Net finance receivables
outstanding at March 31, 1997, were $47.7 billion, compared with
$41.1 billion for the same period last year, a 16% increase. In
addition, the company services $2.6 billion in securitized
finance receivables comprised of manufactured housing and
recreational vehicle loans.
Consumer finance net receivables outstanding were $32.4
billion at March 31, 1997, up 13% from the $28.6 billion reported
last year. Commercial finance net receivables outstanding were
$15.3 billion at March 31, 1997, up 23% from the $12.5 billion
reported a year ago.
The U.S. consumer branch operations reported growth in home
equity and personal loan portfolios. The branch network also
expanded through the acquisition of 29 offices from another
consumer finance company.
Credit card operations completed the previously announced
acquisition of an $800 million credit card portfolio from The
Bank of New York. The company also announced two other
significant credit card acquisitions during the quarter: JC
Penney's bank card portfolio of approximately $740 million in
receivables and Texaco's private label credit card unit,
including approximately $700 million in receivables and a
state-of-the-art credit card operations center. Both acquisitions are
expected to be finalized in the second quarter.
Commercial operations were led by the financing of heavy-duty trucks and
trailers, construction equipment and manufactured housing.
International operations were paced by continued strength in
consumer lending in Japan and the continued development of new
markets. The company recently opened offices in Taiwan and Costa
Rica.
Associates First Capital Corporation is a leading
diversified finance company providing consumer and commercial
finance, leasing and related services through 2,186 offices in
the U.S. and internationally. Based in Dallas, it is an
indirect, majority-owned subsidiary of Ford Motor Company.
# # #
(TABLE FOLLOWS)
<PAGE>
ASSOCIATES FIRST CAPITAL CORPORATION
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
==========================================================================================
<S> <C> <C>
($ millions - except Three Months Ended or at Change from Prior Year
earnings per share) 3/31/97 3/31/96 Amount Percent
Earnings before provision
for income taxes $ 377.5 $ 316.8 $ 60.7 19%
Net earnings
Amount 237.8 192.3 45.5 24
Return on equity (1) 17.36% 16.56%
Return on adjusted
equity (1)(2) 20.95 20.13
Return on assets (1) 1.94 1.92
Net earnings per share $ 0.69 $ 0.55 $ 0.14 24
Stockholders' equity $ 5,558.7 $ 3,088.9
Net finance receivables
Consumer finance $32,400.8 $28,595.8 $3,805.0 13
Commercial finance 15,300.3 12,475.3 2,825.0 23
Total net owned finance
receivables $47,701.1 $41,071.1 $6,630.0 16
Total assets $49,210.8 $42,525.1 $6,685.7 16
Total managed assets $51,809.0 $42,525.1 $9,283.9 22
Total revenue $ 1,926.7 $ 1,645.0 $ 281.7 17
Net interest margin (as a % of
ANR) (3) 9.46% 9.30% 0.16 pts.
Efficiency ratio 42.4% 44.8% (2.4) pts.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended or at Change from Prior
3/31/97 12/31/96 Quarter Year
<S> <C> <C> <C> <C>
Credit Quality:
60+Days contractual
delinquency 2.25% 2.20% 0.05 pts. 0.47 pts.
Credit losses (as a % of avg.
net finance receivables) 2.31% 2.26% 0.05 pts. 0.57 pts.
Allowance for losses on finance
receivables
Amount $1,675.9 $1,563.1 $112.8 $307.1
Percent of net finance
receivables 3.51% 3.36% 0.15 pts. 0.18 pts.
<FN>
<F1> Return on equity, return on adjusted equity and return on assets have been restated to
exclude a $1,850 million dividend related to the IPO. If included, these returns
would have been 19.42%, 25.70% and 1.84%, respectively.
<F2> Excludes push-down goodwill created by Ford acquisition of foreign affiliates in 1989.
<F3> Excludes IPO related charges in first quarter 1996.
</FN>
</TABLE>
<PAGE>
ASSOCIATES FIRST CAPITAL CORPORATION
<TABLE>
<CAPTION>
QUARTERLY FINANCIAL SUPPLEMENT
Statement of Earnings Page 1
=========================================================================================
Three Months Ended or at Change from Prior Year
--------------------------------- -----------------------
<S> <C> <C> <C> <C> <C>
Consolidated ($ millions) 3/31/97 12/31/96 3/31/96 Amount Percent
Revenue
Finance charges $ 1,761.7 $ 1,727.7 $ 1,505.0 $ 256.7 17.1 %
Insurance premiums 99.1 104.5 93.1 6.0 6.5
Investment and other income 65.9 60.4 46.9 19.0 40.7
- ----------------------------------------------------------------------------
1,926.7 1,892.6 1,645.0 281.7 17.1
Expenses
Interest expense 637.4 644.3 580.5 56.9 9.8
Operating expenses 531.2 540.0 461.2 70.0 15.2
Provision for losses on
finance receivables 344.5 291.1 252.3 92.2 36.6
Insurance benefits paid or
provided 36.1 38.3 34.2 1.9 5.6
- ----------------------------------------------------------------------------
1,549.2 1,513.7 1,328.2 221.0 16.6
- ----------------------------------------------------------------------------
Earnings before provision
for income taxes 377.5 378.9 316.8 60.7 19.2
Provision for income taxes 139.7 144.6 124.5 15.2 12.2
- ----------------------------------------------------------------------------
Net earnings $ 237.8 $ 234.3 $ 192.3 $ 45.5 23.7 %
============================================================================
Average Net Finance
Receivables $47,555.6 $46,269.3 $40,382.1 $ 7,173.5 17.8 %
Balance Sheet Items ($ millions)
============================================================================
Total assets:
End of period $49,210.8 $48,268.4 $42,525.1 $ 6,685.7 15.7 %
Average 49,153.6 47,932.8 41,801.5 7,352.1 17.6
Managed assets 51,809.0 50,378.3 42,525.1 9,283.9 21.8
Debt 41,916.7 41,104.7 37,919.5 3,997.2 10.5
Stockholders' equity:
End of period 5,558.7 5,437.5 3,088.9
Per share (whole $) 16.04 15.69 8.91
Average 5,479.4 5,341.5 3,959.6
Debt-to-equity (2) 7.54 x 7.55 x 7.65 x
Debt-to-adjusted equity (1)(2) 8.73 8.89 9.36
Key Ratios
=========================================================================================
Net interest margin (3) 9.46 % 9.37 % 9.30 %
Efficiency ratio 42.4 44.6 44.8
Net earnings per
share (whole $) $ 0.69 $ 0.68 $ 0.55 $ 0.14 25.5 %
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.
<F2> Debt to equity and debt to adjusted equity have been restated to exclude a $1,850 million
dividend related to the IPO. If included, these ratios would have been 12.24x and 17.09x,
respectively.
<F3> Excludes IPO related charges in first quarter 1996.
</FN>
/TABLE
<PAGE>
ASSOCIATES FIRST CAPITAL CORPORATION
<TABLE>
<CAPTION>
QUARTERLY FINANCIAL SUPPLEMENT
Receivables/Servicing Portfolios Page 2
=========================================================================================
Change from Prior Year
-----------------------
Receivables ($ millions) 3/31/97 12/31/96 3/31/96 Amount Percent
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Consumer
Home equity lending $ 16,965.5 $ 16,691.4 $ 14,591.9 $ 2,373.6 16.3 %
Personal lending and
retail sales finance 7,677.1 7,425.1 6,455.6 1,221.5 18.9
Credit card 6,691.3 6,023.8 5,399.7 1,291.6 23.9
Manufactured housing 1,066.9 1,262.7 2,148.6 (1,081.7) (50.3)
- ------------------------------------------------------------------------------
32,400.8 31,403.0 28,595.8 3,805.0 13.3
Commercial
Truck and truck trailer 8,687.3 8,598.3 7,910.2 777.1 9.8
Equipment 4,679.7 4,571.8 4,174.2 505.5 12.1
Other 1,933.3 1,939.8 390.9 1,542.4 N/M
- ------------------------------------------------------------------------------
15,300.3 15,109.9 12,475.3 2,825.0 22.6
- ------------------------------------------------------------------------------
Net finance receivables $ 47,701.1 $ 46,512.9 $ 41,071.1 $ 6,630.0 16.1 %
==============================================================================
</TABLE>
<TABLE>
<CAPTION>
Servicing Portfolios Three Months Ended or at
($ millions) 3/31/97 12/31/96 3/31/96
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Manufactured Housing
Outstanding net
receivables:
End of period $ 1,645.4 $ 1,284.8 $ -
Average 1,466.6 1,201.2 -
Finance charge yield 11.26 % 11.25 % - %
60+days contractual
delinquency 0.71 0.71 -
Credit losses (as a % of ANR) 0.68 0.34 -
Recreational Vehicles
Outstanding net receivables:
End of period $ 952.8 $ 825.1 $ -
Average 891.1 848.5 -
Finance charge yield 9.49 % 9.49 % - %
60+day contractual delinquency 0.07 0.05 -
Credit losses (as a % of ANR) 0.30 0.31 -
Total Servicing Portfolios
Outstanding net receivables:
End of period $ 2,598.2 $ 2,109.9 $ -
Average 2 357.7 2,049.7 -
Finance charge yield 10.59 % 9.49 % - %
60+days contractual delinquency 0.47 0.05 -
Credit losses (as a % of ANR) 0.54 0.31 -
/TABLE
<PAGE>
ASSOCIATES FIRST CAPITAL CORPORATION
<TABLE>
<CAPTION>
QUARTERLY FINANCIAL SUPPLEMENT
Credit Quality/Credit Loss Reserves Page 3
=========================================================================================
Three Months Ended or at
60+ Days Contractual Delinquency 3/31/97 12/31/96 3/31/96
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Consumer
Home equity lending 2.15 % 2.12 % 1.92 %
Personal lending and retail sales finance 3.32 3.32 2.81
Credit card 3.83 4.22 3.29
Manufactured housing 1.41 1.34 0.64
Total Consumer 2.75 2.77 2.24
Commercial
Truck and truck trailer 1.58 1.45 0.74
Equipment 0.92 0.67 0.75
Total Commercial 1.23 1.05 0.73
Total 2.25 % 2.20 % 1.78 %
Net Credit Losses to ANR
- -----------------------------------------------------------------------------------------
Consumer
Home equity lending 1.08 % 0.72 % 0.89 %
Personal lending and retail sales finance 4.60 5.44 3.66
Credit card 7.73 7.41 5.63
Manufactured housing 0.71 1.56 0.78
Total Consumer 3.29 3.13 2.39
Commercial
Truck and truck trailer 0.31 0.38 0.28
Equipment 0.23 0.49 0.24
Total Commercial 0.24 0.40 0.25
Total 2.31 % 2.26 % 1.74 %
Credit Loss Reserves
- -----------------------------------------------------------------------------------------
Allowance for losses:
Balance at end of period $ 1,675.9 $ 1,563.1 $ 1,368.8
To net finance receivables 3.51 % 3.36 % 3.33 %
Multiple to net credit losses
(Trailing 4 Qtrs) 1.70 x 1.77 x 2.09 x
</TABLE>
