<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) October 14, 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 second quarter
earnings in a news release dated October 14, 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 October 14, 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/John F. Stillo
---------------------
Senior Vice President
And Comptroller
Date: October 14, 1997<PAGE>
<PAGE>
Media: Joe Stroop Investors: Dianne Douglas
(972) 652-4743 (972) 652-7294
[email protected] [email protected]
THE ASSOCIATES EARNINGS: BEST THIRD QUARTER EVER
DALLAS, October 14, 1997 -- Associates First Capital
Corporation (The Associates) today announced that its net
earnings for the third quarter of 1997 reached $0.78 per share, a
record for the company. Net earnings for the three months ended
September 30, 1997, were $270.9 million, an 18% increase over the
same period a year ago.
For the first nine months of 1997, net earnings were $753.7
million, or $2.18 per share, which is a 21% improvement over the
same period of 1996.
"We are pleased to report continued earnings growth for the
first nine months of 1997," said Keith W. Hughes, chairman and
chief executive officer of The Associates. "We achieved strong
and balanced growth during the third quarter and continued to
devote a great deal of energy to managing the fundamentals
margins, efficiency and credit quality. These results establish
a solid foundation for the balance of 1997 and beyond."
Mr. Hughes attributed the improvement in earnings to growth in
earning assets combined with stable profitability.
"The earnings we report for this quarter are based upon the
quality growth that we have added in the past year," Mr. Hughes
added. "Similarly, the growth we report for this quarter will
help drive earnings going forward."
Net finance receivables at September 30, 1997 reached a record
level of $52.7 billion, a 14% increase over the same period a
year ago. The components were $36.2 billion in consumer net
finance receivables, which was a 15% increase over the prior
year, and $16.5 billion in commercial net finance receivables, up
14%. In addition, The Associates services $3.1 billion in
securitized finance receivables, comprised of manufactured
housing and recreational vehicle loans. Total managed assets at
September 30, 1997 were a record $57.5 billion, an increase of
17% over the same period a year ago.
(more)
<PAGE>
Page 2
Operating Unit Highlights
* U.S. consumer branch operations showed continued internal
growth in its real estate and personal loan portfolios. The
company continued to increase its emphasis on centralized lending
services and to prepare for the opening of the Texas home equity
market should Texans vote on November 4 to remove a century-old
prohibition against home equity lending.
* Commercial operations grew to $20 billion in managed net
finance receivables, principally through internal growth. The
manufactured housing business showed strong growth during each
month of the third quarter. Truck and equipment growth also
remained strong.
* Credit card operations showed a significantly higher level of
earning assets compared to the prior year as earlier acquisitions
continued to contribute. In addition, the company has signed an
exclusive agreement to make its Voyager fleet services credit
card available to all Visa member banks nationwide. Voyager,
recognized as the premier fleet management card system in the
United States, was part of the Texaco operation acquired earlier
this year. In addition, the Credit Card business opened three
state-of-the-art operations and processing centers in Dallas and
Wilmington, Del. and Manchester, England.
* International operations acquired Superior Acceptance
Corporation, Canada's largest independent finance company, with
91 offices. Other growth activity during the quarter included
adding 33 new consumer branches in other international markets
including Japan, Mexico and Puerto Rico.
Company Description
Associates First Capital Corporation (NYSE: AFS) is a leading
diversified finance company providing consumer and commercial
finance, leasing and related services through 2,343 offices in
the U.S. and worldwide. Based in Dallas, it is an indirect,
majority-owned subsidiary of Ford Motor Company. On October 8,
1997, Ford announced a plan to spin off its remaining shares in
The Associates to current Ford shareholders.
# # #
(TABLE FOLLOWS)<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Three Months Ended or at Nine Months Ended or at
($ millions - except earnings per share) 9/30/97 9/30/96 % Change 9/30/97 9/30/96 % Change
<S> <C> <C> <C> <C> <C> <C>
Net earnings
Amount $ 270.9 $ 230.2 18 $ 753.7 $ 622.7 21
Return on average equity <F1> 18.34 % 17.79 % 17.65 % 16.94 %
Return on average adjusted equity <F1> <F2> 21.74 21.69 21.08 20.97
Return on average assets <F1> <F3> 2.01 1.95 1.94 1.91
Net earnings per share $ 0.78 $ 0.66 18 $ 2.18 $ 1.79 21
Stockholders' equity $ 6,016.6 $ 5,254.7 14
Net finance receivables
Consumer finance $ 36,178.2 $ 31,534.7 15
Commercial finance 16,499.6 14,490.4 14
Total net finance receivables $ 52,677.8 $ 46,025.1 14
Total assets $ 54,354.6 $ 47,550.6 14
Total managed assets $ 57,507.7 $ 49,337.3 17
Total revenue $ 2,118.1 $ 1,843.6 15 $ 6,094.3 $ 5,205.6 17
Net interest margin (as a % of ANR) <F3> 9.30 % 9.21 % 9.39 % 9.25 %
Efficiency ratio 44.2 44.4 43.2 44.5
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended or at Nine Months Ended or at
9/30/97 6/30/97 9/30/97 9/30/96
<S> <C> <C> <C> <C>
Credit Quality:
60+days contractual delinquency 2.38 % 2.25 % 2.38 % 2.05 %
Credit losses (as a % of ANR) 2.45 2.45 2.40 1.95
Allowance for losses on finance receivables
Amount $ 1,891.4 $ 1,849.5 $ 1,891.4 $ 1,535.1
Percent of net finance receivables 3.59 % 3.58 % 3.59 % 3.34 %
Loss Coverage (Trailing 4 Qtrs) 1.62 1.70 1.62 1.93
<FN>
<F1> The 1996 return on equity, return on adjusted equity and return on assets have been restated to exclude a $1,850 million
dividend related to the IPO. If included, these returns for the nine months ended September 30, 1996 would have been
18.57%, 23.62%, and 1.87%, respectively.
<F2> Excludes push-down goodwill created by Ford acquisition of foreign affiliates in 1989.
<F3> Adjusted to exclude IPO related charges in nine months ended September 30, 1996.
ANR = Average Net Receivables
</FN>
/TABLE
<PAGE>
QUARTERLY FINANCIAL SUPPLEMENT
<TABLE>
<CAPTION>
Statement of Earnings
Three Months Ended or at Change from Prior Year
Consolidated ($ millions) 9/30/97 6/30/97 9/30/96 Amount Percent
<S> <C> <C> <C> <C> <C>
Revenue
Finance charges $ 1,935.3 $ 1,872.4 $ 1,680.7 $ 254.6 15.1 %
Insurance premiums 105.5 105.3 104.0 1.5 1.4
Investment and other income 77.3 71.8 58.9 18.4 31.2
2,118.1 2,049.5 1,843.6 274.5 14.9
Expenses
Interest expense 718.8 679.6 637.7 81.1 12.7
Operating expenses 603.0 571.6 518.5 84.5 16.3
Provision for losses on finance receivables 328.5 372.6 267.4 61.1 22.8
Insurance benefits paid or provided 34.7 36.7 38.7 (4.0) (10.3)
1,685.0 1,660.5 1,462.3 222.7 15.2
Earnings before provision for income taxes 433.1 389.0 381.3 51.8 13.6
Provision for income taxes 162.2 144.0 151.1 11.1 7.3
Net earnings $ 270.9 $ 245.0 $ 230.2 $ 40.7 17.7 %
Average Net Finance Receivables $ 52,334.4 $ 50,416.7 $ 45,280.7 $ 7,053.7 15.6 %
Balance Sheet Items ($ millions)
Total assets:
End of period $ 54,354.6 $ 53,041.2 $ 47,550.6 $ 6,804.0 14.3 %
Average 53,914.5 51,963.6 47,263.7 6,650.8 14.1
Managed Assets 57,507.7 55,507.9 49,337.3 8,170.4 16.6
Debt 46,584.3 45,579.4 40,790.0 5,794.3 14.2
Stockholders' equity:
End of period 6,016.6 5,821.0 5,254.7
Per share (whole $) 17.37 16.80 15.16
Average 5,906.4 5,690.0 5,176.3
Debt-to-equity 7.74 x 7.82 x 7.75 x
Debt-to-adjusted equity <F1> 8.85 9.10 9.27
Key Ratios
Net interest margin 9.30 % 9.47 % 9.21 %
Efficiency ratio 44.2 42.9 44.4
Net earnings per share (whole $) $ 0.78 $ 0.71 $ 0.66 $ 0.12 17.7 %
Equivalent shares for EPS calculation 346,423 346,411 346,654 (231) (0.1)
<FN>
<F1> Excludes push-down goodwill created by Ford acquisition of foreign affiliates in 1989.
</FN>
</TABLE>
<PAGE>
QUARTERLY FINANCIAL SUPPLEMENT
<TABLE>
<CAPTION>
Receivables/Servicing Portfolios
Change from Prior Year
Receivables ($ millions) 9/30/97 6/30/97 9/30/96 Amount Percent
<S> <C> <C> <C> <C> <C>
Consumer
Home equity lending $ 18,255.4 $ 17,547.2 $ 16,743.2 $ 1,512.2 9.0 %
Personal lending and retail sales finance 8,581.2 8,385.4 7,324.7 1,256.5 17.2
Credit card 8,094.7 8,240.4 5,970.6 2,124.1 35.6
Manufactured housing 1,246.9 1,373.8 1,496.2 (249.3) (16.7)
36,178.2 35,546.8 31,534.7 4,643.5 14.7
Commercial
Truck and truck trailer 9,200.5 8,970.6 8,449.2 751.3 8.9
Equipment 5,027.9 4,887.4 4,434.6 593.3 13.4
Other 2,271.2 2,212.4 1,606.6 664.6 41.4
16,499.6 16,070.4 14,490.4 2,009.2 13.9
Net finance receivables $ 52,677.8 $ 51,617.2 $ 46,025.1 $ 6,652.7 14.5 %
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended or at Change From Prior Year
Servicing Portfolios ($ millions) 9/30/97 6/30/97 9/30/96 Amount Percent
<S> <C> <C> <C> <C> <C>
Manufactured Housing
Outstanding net receivables:
End of period $ 1,927.3 $ 1,587.1 $ 913.4 $ 1,013.9 111.0 %
Average 1,757.2 1,616.3 916.8 840.4 91.7
Finance charge yield 11.20 % 11.27 % 11.11 % 0.09 pts.
60+days contractual delinquency 1.12 1.05 0.28 0.84
Credit losses (as a % of ANR) 1.29 0.76 0.05 1.24
Recreational Vehicles
Outstanding net receivables:
End of period $ 1,145.6 $ 879.6 $ 873.3 $ 272.3 31.2
Average 964.3 928.1 769.7 194.6 25.3
Finance charge yield 9.49 % 9.48 % 9.50 % (0.01)pts.
60+days contractual delinquency 0.05 0.07 0.05 -
Credit losses (as a % of ANR) 0.46 0.34 0.32 0.14
Total Servicing Portfolios
Outstanding net receivables:
End of period $ 3,072.9 $ 2,466.7 $ 1,786.7 $ 1,286.2 72.0
Average 2,721.5 2,544.4 1,686.5 1,035.0 61.4
Finance charge yield 10.59 % 10.62 % 10.37 % 0.22pts.
60+days contractual delinquency 0.71 0.70 0.17 0.54
Credit losses (as a % of ANR) 1.00 0.63 0.18 0.82
</TABLE>
<PAGE>
QUARTERLY FINANCIAL SUPPLEMENT
<TABLE>
<CAPTION>
Credit Quality/Credit Loss Reserves
Three Months Ended or at
60+Days Contractual Delinquency 9/30/97 6/30/97 9/30/96
<S> <C> <C> <C>
Consumer
Home equity lending 2.28 % 2.12 % 1.95 %
Personal lending and retail sales finance 3.40 3.34 3.05
Credit card 3.99 3.81 4.18
Manufactured housing 1.34 1.00 1.24
Total Consumer 2.90 2.75 2.58
Commercial
Truck and truck trailer 1.50 1.53 1.17
Equipment 1.30 0.94 0.76
Total Commercial 1.31 1.20 0.93
Total 2.38 % 2.25 % 2.05 %
Net Credit Losses to ANR
Consumer
Home equity lending 1.02 % 1.05 % 0.89 %
Personal lending and retail sales finance 5.47 5.29 5.14
Credit card 7.07 7.27 6.62
Manufactured housing 0.68 0.46 0.97
Total Consumer 3.43 3.50 2.97
Commercial
Truck and truck trailer 0.33 0.30 0.35
Equipment 0.36 0.36 0.42
Total Commercial 0.30 0.30 0.33
Total 2.45 % 2.45 % 2.14 %
Credit Loss Reserves
Allowance for losses:
Balance at end of period $ 1,891.4 $ 1,849.5 $ 1,535.1
To net finance receivables 3.59 % 3.58 % 3.34 %
Multiple to net credit losses (Trailing 4 Qtrs) 1.62 x 1.70 x 1.93 x
</TABLE>
