<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 14, 1998
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 14, 1998. 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 14, 1998 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: April 14, 1998
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[LOGO] THE ASSOCIATES
NEWS
Media:Joe Stroop Securities Analysts: (972) 652-7294
972-652-4743 [email protected]
[email protected] Shareholders: 1-888-NYSE-AFS
THE ASSOCIATES SETS EARNINGS RECORD
$3 Billion in Acquisitions Announced in First Quarter
DALLAS, April 14, 1998 Associates First Capital Corporation (NYSE:
AFS)today announced that net earnings for the first quarter of 1998 reached
$281.0 million, or $0.81 per share (diluted), an 18% increase over the same
period a year ago. This was the 93rd consecutive quarter of improved earnings
and the company's best quarter ever.
Also in the quarter, The Associates announced acquisitions that totaled
$3 billion in assets, principally in its rapidly growing international
operations. "We continue to build a balanced base of assets around the world
that will provide continued earnings growth," said Keith W. Hughes, chairman
and chief executive officer. "The ability to grow profitably, both internally
and through acquisitions, is a core strength of our company."
At March 31, 1998, total managed assets reached $63.6 billion, 23%
higher than the same period a year ago. "Our first quarter performance was
marked by quality growth combined with stable profitability," Mr. Hughes said.
"The strength and continued expansion of our operations outside the United
States led the way, particularly in Japan where we announced a major
acquisition."
During the first-quarter, the company announced an agreement to acquire
DIC Finance in Japan, bringing its total Japanese presence to over 3,000
employees, more than 600 locations and approximately $4 billion in net finance
receivables. "Japan is the largest of our international operations and is
likely to be an important source of growth for us in the foreseeable future,"
Mr. Hughes stated.
In the first quarter, the company completed the acquisitions of
Beneficial Corporation's Canadian consumer loan subsidiary, with 105 offices
and approximately $800 million in net receivables, and CEF Limited, a major
construction equipment finance company in the United Kingdom with more than
6,300 contracts and approximately $160 million in receivables.
As a result of these acquisitions, The Associates became the largest
foreign-owned finance company in Canada. The corporation also reinforced its
position as the largest foreign-owned finance company in Japan, and continued
its profitable growth in the United Kingdom.
"We will continue to pursue acquisitions as they add value for our future,"
added Mr. Hughes. "The three international acquisitions we announced during
the quarter met that test."
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Page 2
The company's other operating units also made important contributions to
the quarter's growth.
<TABLE>
<C> <C>
* Consumer operations, the company's 1,500-office consumer finance
network in the U.S., had good results highlighted by the opening of
the Texas home equity market where the company made more than 6,500
real-estate secured loans.
* Commercial operations, a leading source of specialized business
financial services, showed receivables growth of over $1.1 billion
during the quarter, led by significant expansion of its financing
to the manufactured housing industry.
* Credit card operations, a major issuer of bank and private-label
cards, booked 240,000 new bank card customers during the quarter
and became the first bank card issuer to offer Visa's premier
product, the Signature Card.
</TABLE>
Associates First Capital Corporation is a leading diversified finance
company providing consumer and commercial finance, leasing and related
services through 2,404 offices in the U.S. and worldwide. Headquartered in
Dallas, it is one of the nation's 100 largest companies, based on total market
capitalization.
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THE ASSOCIATES
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Three Months Ended or at
($ millions - except earnings per share) 3/31/98 3/31/97 %Change
------- ------- -------
<S> <C> <C> <C>
Net earnings
Amount $ 281.0 $ 237.8 18
Return on average equity 17.61 % 17.36 %
Return on average adjusted equity 20.17 20.95
Return on average assets 1.91 1.94
Return on average managed assets 1.82 1.85
Net earnings per diluted share $ 0.81 $ 0.68 18
Stockholders' equity $ 6,503.4 $ 5,558.7 17
Net finance receivables
Consumer finance $ 38,952.2 $ 32,400.8 20
Commercial finance 18,679.1 15,300.3 22
Total net finance receivables $ 57,631.3 $ 47,701.1 21
Managed receivables $ 61,048.8 $ 50,299.3 21
Total assets $ 60,568.0 $ 49,210.8 23
Total managed assets $ 63,564.0 $ 51,809.0 23
Total revenue $ 2,231.1 $ 1,926.7 16
Net interest margin (as a % of ANR) 9.15 % 9.46 %
Efficiency ratio 43.3 42.4
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended or at
3/31/98 3/31/97
------- -------
<S> <C> <C>
Credit Quality:
60+days contractual delinquency 2.26 % 2.25 %
Credit losses (as a % of ANR) 2.38 2.31
Allowance for losses on finance receivables
Amount $ 2,014.9 $ 1,675.9
Percent of net finance receivables 3.50 % 3.51 %
</TABLE>
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THE ASSOCIATES
QUARTERLY FINANCIAL SUPPLEMENT
<TABLE>
<CAPTION>
Page 1
Three Months Ended or at Change from Prior Year
Statement of Earnings ($ millions) 3/31/98 12/31/97 3/31/97 Amount Percent
------- -------- ------- ------ -------
<S> <C> <C> <C> <C> <C>
Revenue
Finance charges $ 2,045.0 $ 1,990.8 $ 1,761.7 $ 283.3 16.1 %
Insurance premiums 112.4 110.8 99.1 13.3 13.4
Investment and other income 73.7 82.7 65.9 7.8 11.8
2,231.1 2,184.3 1,926.7 304.4 15.8
Expenses
Interest expense 757.3 739.4 637.4 119.9 18.8
Operating expenses 620.0 633.8 531.2 88.8 16.7
Provision for losses on finance
receivables 365.0 332.5 344.5 20.5 6.0
Insurance benefits paid or provided 42.8 38.2 36.1 6.7 18.6
1,785.1 1,743.9 1,549.2 235.9 15.2
Earnings before provision for
income taxes 446.0 440.4 377.5 68.5 18.1
Provision for income taxes 165.0 162.4 139.7 25.3 18.1
Net earnings $ 281.0 $ 278.0 $ 237.8 $ 43.2 18.2 %
Net earnings per diluted share
(whole $) $ 0.81 $ 0.80 $ 0.68 $ 0.13 17.8 %
Equivalent shares for diluted
EPS calculation (000's) 348,765 348,301 347,758 1,007 0.3
Balance Sheet Items ($ millions)
Net Receivables
End of period $ 57,631.3 $ 55,215.6 $ 47,701.1 $ 9,930.2 20.8 %
Average 56,307.3 53,784.6 47,555.6 8,751.7 18.4
Managed Receivables
End of period 61,048.8 58,406.5 50,299.3 10,749.5 21.4
Average 59,614.0 56,927.7 50,483.5 9,130.5 18.1
Total Assets
End of period 60,568.0 57,232.7 49,210.8 11,357.2 23.1
Average 58,835.4 55,718.4 49,153.6 9,681.8 19.7
Managed Assets
End of period 63,564.0 60,154.8 51,809.0 11,755.0 22.7
Average 61,801.4 58,722.0 51,489.2 10,312.2 20.0
Debt 51,994.8 49,198.6 41,916.7 10,078.1 24.0
Stockholders' Equity
End of period 6,503.4 6,268.6 5,558.7
Per share (whole $) 18.77 18.09 16.04
Average 6,381.6 6,127.2 5,479.4
Key Ratios
Net interest margin 9.15 % 9.31 % 9.46 %
Efficiency ratio 43.3 45.1 42.4
Net credit losses (as a % of ANR) 2.38 2.41 2.31
Allowance for losses $ 2,014.9 $ 1,949.9 $ 1,675.9
% of net finance receivables 3.50 % 3.53 % 3.51 %
Multiple to net credit losses
(Trailing 4 Qtrs) 1.56 x 1.59 x 1.70 x
Debt-to-equity 7.99 7.84 7.54
Debt-to-adjusted equity 8.95 8.83 8.73
/TABLE
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THE ASSOCIATES
QUARTERLY FINANCIAL SUPPLEMENT
<TABLE>
<CAPTION> Page 2
Receivables Outstanding ($ millions)
Change from Prior Year
Net Finance Receivables End of
Period Outstanding 3/31/98 12/31/97 3/31/97 Amount Percent
<S> <C> <C> <C> <C> <C>
Consumer
Home equity lending $ 19,755.0 $ 18,796.0 $ 16,965.5 $ 2,789.5 16.4 %
Personal lending and retail
sales finance 9,224.5 8,731.6 7,677.1 1,547.4 20.2
Credit card 7,787.7 8,211.7 6,691.3 1,096.4 16.4
Manufactured housing 2,185.0 1,669.4 1,066.9 1,118.1 104.8
38,952.2 37,408.7 32,400.8 6,551.4 20.2
Commercial
Truck and truck trailer 10,043.5 9,688.9 8,687.3 1,356.2 15.6
Equipment 5,632.7 5,300.5 4,679.7 953.0 20.4
Fleet leasing 1,577.0 1,551.1 1,116.3 460.7 41.3
Recreational vehicles 483.8 444.0 461.3 22.5 4.9
Warehouse and other 942.1 822.4 355.7 586.4 164.9
18,679.1 17,806.9 15,300.3 3,378.8 22.1
Total $ 57,631.3 $ 55,215.6 $ 47,701.1 $ 9,930.2 20.8 %
</TABLE>
<TABLE>
<CAPTION>
Change from Prior Year
Managed Receivables
End of Period Outstanding <F1> 3/31/98 12/31/97 3/31/97 Amount Percent
<S> <C> <C> <C> <C> <C>
Consumer
Home equity lending $ 19,976.3 $ 18,796.0 $ 16,965.5 $ 3,010.8 17.7 %
Personal lending and retail
sales finance 9,224.5 8,731.6 7,677.1 1,547.4 20.2
Credit card 7,890.3 8,323.7 6,691.3 1,199.0 17.9
Manufactured housing 3,972.4 3,526.9 2,712.3 1,260.1 46.5
41,063.5 39,378.2 34,046.2 7,017.3 20.6
Commercial
Truck and truck trailer 10,043.5 9,688.9 8,687.3 1,356.2 15.6
Equipment 5,632.7 5,300.5 4,679.7 953.0 20.4
Fleet leasing 1,577.0 1,551.1 1,116.3 460.7 41.3
Recreational vehicles 1,790.0 1,665.4 1,414.1 375.9 26.6
Warehouse and other 942.1 822.4 355.7 586.4 164.9
19,985.3 19,028.3 16,253.1 3,732.2 23.0
Total $ 61,048.8 $ 58,406.5 $ 50,299.3 $ 10,749.5 21.4 %
<FN>
<F1> Includes servicing portfolio and receivables held for sale.
</FN>
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THE ASSOCIATES
QUARTERLY FINANCIAL SUPPLEMENT
</TABLE>
<TABLE>
<CAPTION>
Servicing Portfolio ($ millions) Page 3
Three Months Ended or at Change from Prior Year
3/31/98 12/31/97 3/31/97 Amount Percent
<S> <C> <C> <C> <C> <C>
Manufactured Housing
Outstanding net receivables:
End of period $ 1,787.4 $ 1,857.5 $ 1,645.4 $ 142.0 8.6 %
Average 1,822.5 1,892.4 1,465.1 357.4 24.4
Finance charge yield 11.11 % 11.13 % 11.27 % (0.16)pts.
60+days contractual delinquency 1.51 1.42 0.71 0.80
Credit losses (as a % of avg. svcg.
portfolio) 1.54 1.30 0.68 0.86
Recreational Vehicles
Outstanding net receivables:
End of period $ 987.3 $ 1,064.6 $ 952.8 $ 34.5 3.6
Average 1,058.6 1,111.2 870.5 188.1 21.6
Finance charge yield 9.49 % 9.49 % 9.49 % - pts.
60+days contractual delinquency 0.03 0.09 0.07 (0.04)
Credit losses (as a % of avg. svcg.
portfolio) 0.43 0.28 0.31 0.12
Home Equity
Outstanding net receivables:
End of period $ 221.3 $ - $ - $ 221.3
Average 114.9 - - 114.9
Finance charge yield 10.05 % - % - % 10.05 pts.
60+days contractual delinquency 0.19 - - 0.19
Credit losses (as a % of avg. svcg.
portfolio) N/A - - -
Total Servicing Portfolio
Outstanding net receivables:
End of period $ 2,996.0 $ 2,922.1 $ 2,598.2 $ 397.8 15.3
Average 2,996.0 3,003.6 2,335.6 660.4 28.3
Finance charge yield 10.50 % 10.52 % 10.60 % (0.10)pts.
60+Days contractual delinquency 0.92 0.94 0.48 0.44
Credit losses (as a % of avg. svcg.
portfolio) 1.09 0.92 0.54 0.55
Excess Yield 2.63 2.63 3.03 (0.40)
</TABLE>
THE ASSOCIATES
QUARTERLY FINANCIAL SUPPLEMENT
<TABLE>
<CAPTION>
Credit Quality Page 4
60+Days Contractual Delinquency Three Months Ended or at
(as a % of Gross Receivables) 3/31/98 12/31/97 3/31/97
<S> <C> <C> <C>
Home equity lending <F1> 2.23 % 2.22 % 2.15 %
Personal lending and retail sales
finance 3.53 3.44 3.32
Credit card <F1> 3.96 3.92 3.83
Manufactured housing <F1> 1.26 1.29 0.94
Truck and truck trailer 1.34 1.22 1.58
Equipment 1.12 0.91 0.92
Fleet leasing 0.43 0.61 0.50
Recreational vehicles <F1> 0.05 0.08 0.08
Total 2.26 % 2.23 % 2.25 %
Net Credit Losses (as a % of Avg. Receivables)
Home equity lending <F1> 1.03 % 1.00 % 1.08 %
Personal lending and retail sales
finance 5.71 5.57 4.60
Credit card <F1> 7.07 6.96 7.13
Manufactured housing <F1> 0.94 1.07 0.65
Truck and truck trailer 0.52 0.32 0.31
Equipment 0.11 0.22 0.23
Fleet leasing 0.08 0.18 0.07
Recreational vehicles <F1> 0.27 0.43 0.19
Total 2.38 % 2.41 % 2.31 %
<FN>
<F1> Includes servicing portfolio and/or receivables held for sale.
</FN>
</TABLE>
