<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 19, 1999
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
earnings in a news release dated January 19, 1999. A copy of the news
release, financial highlights and financial supplement is attached as
an Exhibit hereto and incorporated by reference herein.
From time to time the Company sells finance receivables through
securitization transactions and retains servicing responsibilities.
Finance charges, interest expense and credit losses on the servicing
portfolio and on receivables held for sale are included in investment
and other income on the statement of earnings. The pro forma managed
basis financial information included in the attached financial
highlights and financial supplement reclassifies these items from
investment and other income into line items on the financial
statements on the same basis as if the receivables had not been sold
or are not held for sale. Management believes this presentation is
useful for evaluating the trends in financial information and key
data.
Item 7. Financial Statements and Exhibits
( c ) Exhibits
20 - News release by Associates First Capital Corporation
dated January 19, 1999 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: January 19, 1999
<PAGE>
THE ASSOCIATES.
NEWS
FOR IMMEDIATE RELEASE
THE ASSOCIATES ACHIEVES RECORD 1998 RESULTS
DALLAS (January 19, 1999) - Associates First Capital Corporation
(NYSE:AFS) achieved record earnings for the fourth quarter and full
year 1998, driven by record growth in earning assets, Chairman and
Chief Executive Officer Keith W. Hughes reported today.
"The quarter's double-digit earnings increase completes the finest
year in our history," Hughes said. "With balanced growth across
all major business segments, we closed 1998 with our strongest
balance sheet, largest receivables base and greatest number of
customers ever. We enter 1999 in the best position we have ever
enjoyed."
Key financial highlights include:
* Fourth-quarter net earnings reached $332 million, a 19% increase
over the same period a year earlier, while full-year net earnings
were $1.22 billion, up 19% from $1.03 billion in 1997.
* Earnings per share (diluted) for the quarter were $0.47, compared
to $0.40 in the year-earlier period, and reached $1.75 for the
year, an 18% increase from last year's $1.48.
* Managed receivables at year end were $71.4 billion, a 22%
increase over the prior year. Total managed assets reached $80.9
billion.
"In addition to achieving record results for the quarter and the
year, we continued to establish a solid base for growth in 1999,"
Hughes added. "Strong internal growth complemented by disciplined,
strategic acquisitions put each of our operating units in excellent
position for the future."
Just six days into 1999, The Associates closed its purchase of Avco
Financial Services, the largest acquisition in company history.
Avco will extend the company's market presence and geographic reach
while adding over 8,000 employees, 1,200 locations, operations in
eight international markets and 2.5 million customers.
U.S. Consumer Operations total domestic branch business and broker
home equity operations reported excellent internal growth during
the quarter and the year. The operation is also poised to reap
significant benefits from the Avco acquisition. Integrating Avco
will solidify and extend the company's leadership positions in its
consumer branch and home equity lending networks. While 1998 was a
challenging year due to competitive pressures, the company's branch
model continues to be refined to maintain local presence while
achieving greater efficiencies and economies of scale. The
highlight of the year was the new Texas home equity market, where
The Associates emerged as one of the market leaders in performance
and customer service.
(More)<PAGE>
The Associates
Page 2
Credit Card Operations focused on building its relationship-driven
bank card and private-label card businesses. Its industry-leading
petroleum industry private-label operation was augmented by last
week's announced agreement to acquire Shell's proprietary card
program. During 1998, the company entered the retail private label
card market, through its acquisition of SPS Payment Systems, and
was chosen by Washington Mutual Bank F.A. to manage its customer
bank card program, the nation's largest agent bank relationship.
Commercial Operations reported record growth during the year. This
achievement was based on developing new customer relationships
while maintaining and growing its long-established relationships,
and deep knowledge of customer markets. The year's performance was
led by continued growth in the three largest segments,
transportation, equipment and manufactured housing. All commercial
businesses anticipate solid growth in 1999.
International Operations was the fastest-growing business segment
during the year, with strong growth in Japan, Canada and the United
Kingdom. Despite weakened economic conditions in Japan, The
Associates anticipates continued internal growth from that market
during 1999. Adding the new Avco markets and integrating the
operations in overlapping markets will provide additional growth
opportunities for the coming year.
Overall, the chairman said, while 1998 presented its share of
challenges to The Associates, the results for the year were
gratifying.
"Our ability to achieve record growth during the volatility we saw
in the world's financial markets once again demonstrates the
strength of the balance in our mix of businesses. These results
give us strong momentum for 1999, and make us confident that we can
deliver on our commitment to shareholders," Hughes said.
Associates First Capital Corporation, established in 1918, is a
leading diversified finance company providing consumer and
commercial finance, leasing, insurance and related services to more
than 22 million customers worldwide. Headquartered in Dallas, it
is one of the nation's 100 largest companies, based on total market
capitalization.
This news release contains certain forward-looking statements. The
factors which may cause future results to differ materially from
expectations are discussed in the Form 10-K for the year ended
December 31, 1997, filed with the Securities and Exchange
Commission.
# # #
Contact information
News media: (972) 652-4522
Security Analysts: (972) 652-7294
[email protected]
Shareholders: 1-888-NYSE-AFS
Internet web site: www.theassociates.com
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Three Months Ended or at
($ millions - except earnings per share) 12/31/98 12/31/97 %Change
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Net earnings
Amount $ 332.0 $ 278.0 19
Return on average equity 17.64 % 18.15 %
Return on average adjusted equity 19.85 21.16
Return on average assets 1.83 2.00
Return on average managed assets 1.71 1.89
Net earnings per diluted share <F1> $ 0.47 $ 0.40 18
Managed receivables
Total managed assets
Key Data (Managed)
Total revenue $ 2,784.6 $ 2,240.9 24
Net interest margin (% avg. mgd. recs.) 9.06 % 8.99 %
Efficiency ratio 44.3 44.8
Credit quality
60+days contractual delinquency 2.57 % 2.15 %
Credit loss ratio (% avg. mgd. recs.) 2.65 2.33
Balance Sheet Information
Stockholders' equity
Allowance for losses $ 1,978.7 $ 1,949.9
% of net receivables 3.25 % 3.53 %
Multiple to net losses <F2> 1.74 x 1.59 x
<FN>
<F1> Adjusted to give a retroactive recognition to a two-for-one
stock split on December 23, 1998.
<F2> The current year quarter reflects a multiple of annualized
second, third and fourth quarter losses. The prior year quarter
reflects a multiple of trailing 4 quarter losses.
</FN>
</TABLE>
(MORE)<PAGE>
<TABLE>
<CAPTION>
Year Ended or at
($ millions - except earnings per share) 12/31/98 12/31/97 %Change
-------- -------- -------
<S> <C> <C> <C>
Net earnings
Amount $ 1,223.5 $ 1,031.7 19
Return on average equity 17.94 % 17.78 %
Return on average adjusted equity 20.30 21.10
Return on average assets 1.90 1.95
Return on average managed assets 1.78 1.86
Net earnings per diluted share <F1> $ 1.75 $ 1.48 18
Managed receivables $ 71,364.3 $ 58,406.5 22
Total managed assets $ 80,878.3 $ 60,154.8 34
Key Data (Managed)
Total revenue $ 10,029.5 $ 8,470.5 18
Net interest margin (% avg. mgd. recs.) 8.91 % 9.06 %
Efficiency ratio 43.7 43.5
Credit quality
60+days contractual delinquency 2.57 % 2.15 %
Credit loss ratio (% avg. mgd. recs.) 2.43 2.32
Balance Sheet Information
Stockholders' equity $ 8,526.5 $ 6,268.6 36
Allowance for losses $ 1,978.7 $ 1,949.9
% of net receivables 3.25 % 3.53 %
<FN>
<F1> Adjusted to give a retroactive recognition to a two-for-one
stock split on December 23, 1998.
</FN>
/TABLE
<PAGE>
THE ASSOCIATES
QUARTERLY FINANCIAL SUPPLEMENT
Pro Forma Managed Basis Income Statement and Key Data
<TABLE>
<CAPTION>
Three Months Ended or at Change from Prior Year
($ millions) 12/31/98 9/30/98 12/31/97 Amount Percent
-------- ------- -------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Revenue
Finance charges $ 2,503.5 $ 2,330.8 $ 2,067.9 $ 435.6 21.1 %
Insurance premiums 145.0 110.0 110.8 34.2 30.9
Investment and other
income 136.1 83.6 62.2 73.9 118.8
---------- ----------- ------------ ----------
2,784.6 2,524.4 2,240.9 543.7 24.3
Expenses
Interest expense 925.6 882.6 789.0 136.6 17.3
Operating expenses 801.4 705.2 633.8 167.6 26.4
Provision for losses 481.9 397.9 339.5 142.4 41.9
Insurance benefits
paid or provided 50.6 34.2 38.2 12.4 32.5
---------- ----------- ------------ ----------
2,259.5 2,019.9 1,800.5 459.0 25.5
---------- ----------- ------------ ----------
Earnings before provision
for income taxes 525.1 504.5 440.4 84.7 19.2
Provision for income taxes 193.1 186.9 162.4 30.7 18.9
---------- ----------- ------------ ----------
Net earnings $ 332.0 $ 317.6 $ 278.0 $ 54.0 19.4 %
========== =========== ============ ===========
Net earnings per diluted
share (whole $)<F1> $ 0.47 $ 0.46 $ 0.40 $ 0.07 17.5 %
Equivalent shares for
diluted EPS calculation
(000's) <F1> 708,240 696,453 696,602 11,638
Key Data ($ millions)
Net interest margin
(% avg. mgd. recs.) 9.06 % 8.90 % 8.99 %
Efficiency ratio (managed) 44.3 43.9 44.8
Net credit losses
(as a % of avg. mgd. recs.) 2.65 2.38 2.33
Delinquency ratio
(% of mgd. gross recs.) 2.57 2.39 2.15
Managed Receivables
End of period $ 71,364.3 $ 66,153.4 $ 58,406.5 $ 12,957.8 22.2 %
Average 69,687.6 65,108.9 56,927.7 12,759.9 22.4
Managed Assets
End of period 80,878.3 70,649.8 60,154.8 20,723.5 34.5
Average 77,613.4 69,149.0 58,722.0 18,891.4 32.2
<FN>
<F1> Adjusted to give a retroactive recognition to a two-for-one
stock split on December 23, 1998.
</FN>
/TABLE
<PAGE>
THE ASSOCIATES
QUARTERLY FINANCIAL SUPPLEMENT
<TABLE>
<CAPTION>
Managed Receivables ($ millions)
Outstanding at End of Period Change from Prior Year
12/31/98 9/30/98 12/31/97 Amount Percent
-------- ------- -------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Home equity $ 22,622.3 $ 21,924.5 $ 18,796.0 $ 3,826.3 20.4 %
Personal loans /
retail sales finance 11,459.2 10,499.4 8,731.6 2,727.6 31.2
Credit card 10,296.8 7,969.7 8,323.7 1,973.1 23.7
Manufactured housing 5,193.5 4,822.0 3,526.9 1,666.6 47.3
Truck and truck
trailer 10,783.6 10,470.5 9,688.9 1,094.7 11.3
Equipment 6,114.0 5,813.8 5,300.5 813.5 15.3
Recreational vehicles 2,036.9 1,988.6 1,665.4 371.5 22.3
Fleet leasing 1,589.7 1,584.0 1,551.1 38.6 2.5
Warehouse and other 1,268.3 1,080.9 822.4 445.9 54.2
---------- ----------- ---------- ----------
Total $ 71,364.3 $ 66,153.4 $ 58,406.5 $ 12,957.8 22.2 %
========== =========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Change from Prior Year
Average Outstanding <F1> 12/31/98 9/30/98 12/31/97 Amount Percent
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Home equity $ 22,397.3 $ 21,442.0 $ 18,541.6 $ 3,855.7 20.8 %
Personal loans /
retail sales finance 11,172.0 10,373.3 8,673.8 2,498.2 28.8
Credit card 9,832.7 7,931.2 8,235.5 1,597.2 19.4
Manufactured housing 5,016.4 4,632.2 3,347.8 1,668.6 49.8
Truck and truck
trailer 10,617.8 10,386.1 9,423.1 1,194.7 12.7
Equipment 5,895.8 5,787.9 5,129.7 766.1 14.9
Recreational vehicles 2,020.5 1,933.5 1,585.1 435.4 27.5
Fleet leasing 1,588.8 1,597.0 1,264.6 324.2 25.6
Warehouse and other 1,146.3 1,025.7 726.5 419.8 57.8
---------- ----------- ---------- ----------
Total $ 69,687.6 $ 65,108.9 $ 56,927.7 $ 12,759.9 22.4 %
========== =========== ========== ==========
<FN>
<F1> Includes servicing portfolio and receivables held for sale.
</FN>
/TABLE
<PAGE>
THE ASSOCIATES
QUARTERLY FINANCIAL SUPPLEMENT
Credit Quality
<TABLE>
<CAPTION>
60+Days Contractual Delinquency Three Months Ended or at
(as a % of Mgd. Gross Receivables) 12/31/98 9/30/98 12/31/97
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Home equity 2.74 % 2.63 % 2.22 %
Personal loans /
retail sales finance 3.74 3.90 3.44
Credit card 4.73 4.29 3.92
Manufactured housing 2.31 1.34 1.29
Truck and truck trailer 1.22 1.34 1.22
Equipment 0.84 0.91 0.91
Recreational vehicles 0.07 0.06 0.08
Fleet leasing 1.09 0.53 0.61
Total (managed) 2.57 % 2.39 % 2.15 %
Net Credit Losses (as a % of Avg. Mgd. Receivables)
Home equity 1.19 % 1.11 % 1.00 %
Personal loans /
retail sales finance 6.05 5.43 5.57
Credit card 7.52 7.62 6.96
Manufactured housing 1.56 1.39 1.07
Truck and truck trailer 0.59 0.37 0.32
Equipment 0.12 0.33 0.22
Recreational vehicles 0.21 0.19 0.43
Fleet leasing 0.05 0.05 0.18
Total (managed) 2.65 % 2.38 % 2.33 %
Loss Coverage (on-balance sheet)
Allowance for losses $ 1,978.7 $1,865.0 $1,949.9
% of net finance receivables 3.25 % 3.24 % 3.53 %
Multiple to net losses <F1> 1.74 x 1.70 x 1.59 x
<FN>
<F1> The current quarter reflects a multiple of annualized second,
third and fourth quarter losses. The prior quarter reflects
a multiple of annualized second and third quarter losses and the
prior year quarter reflects a multiple of trailing 4 quarter losses.
</FN>
/TABLE
<PAGE>
THE ASSOCIATES
QUARTERLY FINANCIAL SUPPLEMENT
Income Statement and Balance Sheet Items
<TABLE>
<CAPTION>
Three Months Ended or at Change from Prior Year
Income Statement ($ millions) 12/31/98 9/30/98 12/31/97 Amount Percent
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue
Finance charges $ 2,053.0 $ 1,930.6 $ 1,990.8 $ 62.2 3.1%
Insurance premiums 145.0 110.0 110.8 34.2 30.9
Investment and other income 347.9 264.1 82.7 265.2 N/M
------------ ---------- ---------- ----------
2,545.9 2,304.7 2,184.3 361.6 16.6
Expenses
Interest expense 846.6 807.3 739.4 107.2 14.5
Operating expenses 801.4 705.2 633.8 167.6 26.4
Provision for losses 322.2 253.5 332.5 (10.3) (3.1)
Insurance benefits paid
or provided 50.6 34.2 38.2 12.4 32.5
------------ ---------- ---------- ----------
2,020.8 1,800.2 1,743.9 276.9 15.9
------------ ---------- ---------- ----------
Earnings before taxes 525.1 504.5 440.4 84.7 19.2
Provision for income taxes 193.1 186.9 162.4 30.7 18.9
------------ ---------- ---------- ----------
Net earnings $ 332.0 $ 317.6 $ 278.0 $ 54.0 19.4 %
============ ========== ========== ==========
Net earnings per diluted share
(whole $) <F1> $ 0.47 $ 0.46 $ 0.40 $ 0.07 17.5 %
Equivalent shares for diluted
EPS calculation (000's) <F1> 708,240 696,453 696,602 11,638
Balance Sheet Items ($ millions)
Net Receivables
End of period
Home equity $ 22,458.2 $ 21,745.3 $ 18,796.0 $ 3,662.2 19.5 %
Personal loans / retail
sales finance 11,459.2 10,499.4 8,731.6 2,727.6 31.2
Credit card 3,138.1 2,749.7 8,211.7 (5,073.6) (61.8)
Manufactured housing 3,648.2 3,194.9 1,669.4 1,978.8 118.5
Truck and truck trailer 10,783.6 10,470.5 9,688.9 1,094.7 11.3
Equipment 6,114.0 5,813.8 5,300.5 813.5 15.3
Recreational vehicles 479.7 411.9 444.0 35.7 8.0
Fleet leasing 1,589.7 1,584.0 1,551.1 38.6 2.5
Warehouse and other 1,268.3 1,080.9 822.4 445.9 54.2
------------ ---------- ---------- ----------
Total $ 60,939.0 $ 57,550.4 $ 55,215.6 $ 5,723.4 10.4 %
============ ========== ========== ==========
Average $ 60,191.3 $ 56,502.2 $ 53,784.6 $ 6,406.7 11.9 %
Total Assets
End of period $ 75,175.4 $ 66,105.3 $ 57,232.7 $ 17,942.7 31.4
Average 72,490.2 64,515.5 55,718.4 16,771.8 30.1
Debt 63,306.5 56,844.2 49,198.6 14,107.9 28.7
Stockholders' Equity
End of period $ 8,526.5 $ 6,967.1 $ 6,268.6
Per share (whole $) <F1> 11.72 10.06 9.05
Average 7,525.2 6,802.9 6,127.2
Debt-to-equity 7.40 x 8.15 x 7.84 x
Debt-to-adjusted equity 8.12 9.01 8.83
<FN>
<F1> Adjusted to give a retroactive recognition to a two-for-one
stock split on December 23, 1998.
</FN>
/TABLE
<PAGE>
THE ASSOCIATES
1997 - 1998 QUARTERLY FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
1997
Three Months Ended or at Full
($ millions - except earnings per share0 3/31 6/30 9/30 12/31 Year
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net earnings
Amount $ 237.8 $ 245.0 $ 270.9 $ 278.0 $ 1,031.7
Return on average equity 17.36 % 17.22 % 18.34 % 18.15 % 17.78 %
Return on average adjusted equity 20.95 20.53 21.74 21.16 21.10
Return on average assets 1.94 1.89 2.01 2.00 1.95
Return on average managed assets 1.85 1.80 1.91 1.89 1.86
Net earnings per diluted share <F1> $ 0.34 $ 0.35 $ 0.39 $ 0.40 $ 1.48
Managed receivables $ 50,299.3 $ 54,083.9 $ 55,862.7 $ 58,406.5 $ 58,406.5
Total managed assets $ 51,809.0 $ 55,507.9 $ 57,427.5 $ 60,154.8 $ 60,154.8
Key Data (Managed)
Total revenue $ 1,966.2 $ 2,095.8 $ 2,167.6 $ 2,240.9 $ 8,470.5
Net interest margin (% avg. mgd. recs.) 9.09 % 9.19 % 9.02 % 8.99 % 9.06 %
Efficiency ratio 42.3 42.7 44.0 44.8 43.5
Credit quality
60+days contractual delinquency 2.14 % 2.17 % 2.28 % 2.15 % 2.15 %
Credit loss ratio (% avg. mgd. recs.) 2.20 2.37 2.37 2.33 2.32
Balance Sheet Information
Stockholders' equity $ 5,558.7 $ 5,821.0 $ 6,016.6 $ 6,268.6 $ 6,268.6
Allowance for losses 1,675.9 1,849.5 1,891.4 1,949.9 1,949.9
% of net receivables 3.51 % 3.58 % 3.59 % 3.53 % 3.53 %
Multiple to net losses <F2> 1.70 x 1.70 x 1.62 x 1.59 x 1.59 x
<FN>
<F1> Adjusted to give a retroactive recognition to a two-for-one
stock split on December 23, 1998.
<F2> The year and quarter ended December 31, 1998 reflects a
multiple of annualized second, third and fourth quarter losses.
The quarter ended September 30, 1998 reflects a multiple of
annualized second and third quarter losses. The quarter
ended June 30, 1998 reflects a multiple of annualized second
quarter losses and all other periods reflect a multiple of
trailing 4 quarter losses.
</FN>
</TABLE>
(MORE)<PAGE>
<TABLE>
<CAPTION>
1998
Three Months Ended or at Full
($ millions - except earnings per share) 3/31 6/30 9/30 12/31 Year
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net earnings
Amount $ 281.0 $ 292.9 $ 317.6 $ 332.0 $ 1,223.5
Return on average equity 17.61 % 17.82 % 18.68 % 17.64 % 17.94 %
Return on average adjusted equity 20.17 20.16 20.94 19.85 20.30
Return on average assets 1.91 1.94 1.97 1.83 1.90
Return on average managed assets 1.82 1.77 1.84 1.71 1.78
Net earnings per diluted share <F1> $ 0.40 $ 0.42 $ 0.46 $ 0.47 $ 1.75
Managed receivables $ 61,048.8 $ 64,311.8 $ 66,153.4 $ 71,364.3 $ 71,364.3
Total managed assets $ 63,564.0 $ 68,132.1 $ 70,649.8 $ 80,878.3 $ 80,878.3
Key Data (Managed)
Total revenue $ 2,288.3 $ 2,432.2 $ 2,524.4 $ 2,784.6 $ 10,029.5
Net interest margin (% avg. mgd. recs.) 8.83 % 8.92 % 8.90 % 9.06 % 8.91 %
Efficiency ratio 43.1 43.4 43.9 44.3 43.7
Credit quality
60+days contractual delinquency 2.18 % 2.29 % 2.39 % 2.57 % 2.57 %
Credit loss ratio (% avg. mgd. recs.) 2.31 2.37 2.38 2.65 2.43
Balance Sheet Information
Stockholders' equity $ 6,503.4 $ 6,680.0 $ 6,967.1 $ 8,526.5 $ 8,526.5
Allowance for losses 2,014.9 1,848.7 1,865.0 1,978.7 1,978.7
% of net receivables 3.50 % 3.32 % 3.24 % 3.25 % 3.25 %
Multiple to net losses <F2> 1.56 x 1.51 x 1.70 x 1.74 x 1.74 x
<FN>
<F1> Adjusted to give a retroactive recognition to a two-for-one
stock split on December 23, 1998.
<F2> The year and quarter ended December 31, 1998 reflects a
multiple of annualized second, third and fourth quarter losses.
The quarter ended September 30, 1998 reflects a multiple of
annualized second and third quarter losses. The quarter
ended June 30, 1998 reflects a multiple of annualized second
quarter losses and all other periods reflect a multiple of
trailing 4 quarter losses.
</FN>
/TABLE
<PAGE>
THE ASSOCIATES
Pro Forma Managed Basis Income Statement and Key Data
<TABLE>
<CAPTION>
1997
Three Months Ended or at Full
($ millions) 3/31 6/30 9/30 12/31 Year
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue
Finance charges $ 1,821.5 $ 1,938.3 $ 2,004.5 $ 2,067.9 $ 7,832.2
Insurance premiums 99.1 105.3 105.5 110.8 420.7
Investment and other income 45.6 52.2 57.6 62.2 217.6
1,966.2 2,095.8 2,167.6 2,240.9 8,470.5
Expenses
Interest expense 674.0 721.5 761.7 789.0 2,946.2
Operating expenses 531.2 571.6 603.0 633.8 2,339.6
Provision for losses 347.4 377.0 335.1 339.5 1,399.0
Insurance benefits paid
or provided 36.1 36.7 34.7 38.2 145.7
1,588.7 1,706.8 1,734.5 1,800.5 6,830.5
Earnings before provision for
income taxes 377.5 389.0 433.1 440.4 1,640.0
Provision for income taxes 139.7 144.0 162.2 162.4 608.3
Net earnings $ 237.8 $ 245.0 $ 270.9 $ 278.0 $ 1,031.7
Net earnings per diluted share
(whole $) (1) $ 0.34 $ 0.35 $ 0.39 $ 0.40 $ 1.48
Equivalent shares for diluted
EPS calculation (000's) <F1> 695,516 695,073 696,339 696,602 695,887
Key Data ($ millions)
Net interest margin (% avg. mgd. recs.) 9.09 % 9.19 % 9.02 % 8.99 % 9.06 %
Efficiency ratio (managed) 42.3 42.7 44.0 44.8 43.5
Net credit losses (as a % of
avg. mgd. recs.) 2.20 2.37 2.37 2.33 2.32
Delinquency ratio (% of mgd.
gross recs.) 2.14 2.17 2.28 2.15 2.15
Managed Receivables
End of period $ 50,299.3 $ 54,083.9 $ 55,862.7 $ 58,406.5 $ 58,406.5
Average 50,483.5 52,948.8 55,128.9 56,927.7 53,899.7
Managed Assets
End of period 51,809.0 55,507.9 57,427.5 60,154.8 60,154.8
Average 51,489.2 54,507.6 56,636.0 58,722.0 55,364.3
<FN>
<F1> Adjusted to give a retroactive recognition to a two-for-one
stock split on December 23, 1998.
</FN>
</TABLE>
(MORE)<PAGE>
<TABLE>
<CAPTION>
1998
Three Months Ended or Full
($ millions) 3/31 6/30 9/30 12/31 Year
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue
Finance charges $ 2,123.0 $ 2,257.7 $ 2,330.8 $ 2,503.5 $ 9,215.0
Insurance premiums 112.4 104.1 110.0 145.0 471.5
Investment and other income 52.9 70.4 83.6 136.1 343.0
2,288.3 2,432.2 2,524.4 2,784.6 10,029.5
Expenses
Interest expense 806.6 855.4 882.6 925.6 3,470.2
Operating expenses 620.0 671.4 705.2 801.4 2,798.0
Provision for losses 372.9 410.0 397.9 481.9 1,662.7
Insurance benefits paid
or provided 42.8 30.5 34.2 50.6 158.1
1,842.3 1,967.3 2,019.9 2,259.5 8,089.0
Earnings before provision
for income taxes 446.0 464.9 504.5 525.1 1,940.5
Provision for income taxes 165.0 172.0 186.9 193.1 717.0
Net earnings $ 281.0 $ 292.9 $ 317.6 $ 332.0 $ 1,223.5
Net earnings per diluted share
(Whole $) <F1> $ 0.40 $ 0.42 $ 0.46 $ 0.47 $ 1.75
Equivalent shares for
diluted EPS calculation <F1> 697,529 697,180 696,453 708,240 699,871
Key Data ($ millions)
Net interest margin
(% avg. mgd. recs.) 8.83 % 8.92 % 8.90 % 9.06 % 8.91 %
Efficiency ratio (managed) 43.1 43.4 43.9 44.3 43.7
Net credit losses (as a % of
avg. mgd. recs.) 2.31 2.37 2.38 2.65 2.43
Delinquency ratio (% of mgd. gross
recs.) 2.18 2.29 2.39 2.57 2.57
Managed Receivables
End of period $ 61,048.8 $ 64,311.8 $ 66,153.4 $ 71,364.3 $ 71,364.3
Average 59,614.0 62,890.0 65,108.9 69,687.6 64,505.8
Managed Assets
End of period 63,564.0 68,132.1 70,649.8 80,878.3 80,878.3
Average 61,801.4 66,245.3 69,149.0 77,613.4 68,836.8
<FN>
<F1> Adjusted to give a retroactive recognition to a two-for-one
stock split on December 23, 1998.
</FN>
/TABLE
<PAGE>
THE ASSOCIATES
Managed Receivables ($ millions)
<TABLE>
<CAPTION>
1997
Three Months Ended or at Full
Outstanding at End of Period <F1> 3/31 6/30 9/30 12/31 Year
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Home equity $ 16,965.5 $ 17,547.2 $ 18,255.4 $ 18,796.0 $ 18,796.0
Personal loans / retail
sales finance 7,677.1 8,385.4 8,581.2 8,731.6 8,731.6
Credit card 6,691.3 8,240.4 8,206.7 8,323.7 8,323.7
Manufactured housing 2,712.3 2,960.9 3,174.2 3,526.9 3,526.9
Truck and truck trailer 8,687.3 8,970.6 9,200.5 9,688.9 9,688.9
Equipment 4,679.7 4,887.4 5,027.9 5,300.5 5,300.5
Recreational vehicles 1,414.1 1,488.3 1,592.7 1,665.4 1,665.4
Fleet leasing 1,116.3 1,160.2 1,158.4 1,551.1 1,551.1
Warehouse and other 355.7 443.5 665.7 822.4 822.4
Total $ 50,299.3 $ 54,083.9 $ 55,862.7 $ 58,406.5 $ 58,406.5
<FN>
<F1> Includes servicing portfolio and receivables held for sale.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Full
Average Outstanding <F1> 3/31 6/30 9/30 12/31 Year
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Home equity $ 16,776.0 $ 17,198.0 $ 17,890.6 $ 18,541.6 $ 17,604.3
Personal loans / retail
sales finance 7,538.7 7,943.7 8,448.4 8,673.8 8,136.5
Credit card 7,383.1 8,383.5 8,224.7 8,235.5 8,058.1
Manufactured housing 2,720.1 2,833.6 3,158.7 3,347.8 3,030.3
Truck and truck trailer 8,617.8 8,821.0 9,120.2 9,423.1 9,005.4
Equipment 4,592.7 4,770.8 4,972.2 5,129.7 4,866.7
Recreational vehicles 1,410.7 1,456.7 1,615.4 1,585.1 1,521.3
Fleet leasing 1,102.5 1,139.6 1,165.4 1,264.6 1,173.3
Warehouse and other 341.9 401.9 533.3 726.5 503.8
Total $ 50,483.5 $ 52,948.8 $ 55,128.9 $ 56,927.7 $ 53,899.7
</TABLE>
[FN]
<F1> Includes servicing portfolio and receivables held for sale.
</FN>
(MORE)<PAGE>
<TABLE>
<CAPTION>
1998
Three Months Ended or at Full
Outstanding at End of Period <F1> 3/31 6/30 9/30 12/31 Year
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Home equity $ 19,976.3 $ 21,050.8 $ 21,924.5 $ 22,622.3 $ 22,622.3
Personal loans / retail
sales finance 9,224.5 10,365.2 10,499.4 11,459.2 11,459.2
Credit card 7,890.3 7,887.8 7,969.7 10,296.8 10,296.8
Manufactured housing 3,972.4 4,423.9 4,822.0 5,193.5 5,193.5
Truck and truck trailer 10,043.5 10,312.3 10,470.5 10,783.6 10,783.6
Equipment 5,632.7 5,790.9 5,813.8 6,114.0 6,114.0
Recreational vehicles 1,790.0 1,881.8 1,988.6 2,036.9 2,036.9
Fleet leasing 1,577.0 1,602.8 1,584.0 1,589.7 1,589.7
Warehouse and other 942.1 996.3 1,080.9 1,268.3 1,268.3
Total $ 61,048.8 $ 64,311.8 $ 66,153.4 $ 71,364.3 $ 71,364.3
<FN>
<F1> Includes servicing portfolio and receivables held for sale.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Full
Average Outstanding <F1> 3/31 6/30 9/30 12/31 Year
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Home equity $ 19,412.3 $ 20,480.9 $ 21,442.0 $ 22,397.3 $ 20,921.4
Personal loans / retail
sales finance 8,883.9 10,067.5 10,373.3 11,172.0 10,214.3
Credit card 8,083.4 7,882.9 7,931.2 9,832.7 8,551.7
Manufactured housing 3,736.2 4,197.9 4,632.2 5,016.4 4,393.3
Truck and truck trailer 9,843.2 10,160.3 10,386.1 10,617.8 10,246.4
Equipment 5,504.9 5,701.8 5,787.9 5,895.8 5,717.2
Recreational vehicles 1,729.7 1,841.7 1,933.5 2,020.5 1,880.1
Fleet leasing 1,560.6 1,593.4 1,597.0 1,588.8 1,584.3
Warehouse and other 859.8 963.6 1,025.7 1,146.3 997.1
Total $ 59,614.0 $ 62,890.0 $ 65,108.9 $ 69,687.6 $ 64,505.8
<FN>
<F1> Includes servicing portfolio and receivables held for sale.
</FN>
/TABLE
<PAGE>
THE ASSOCIATES
Credit Quality
<TABLE>
<CAPTION>
1997
60+Days Contractual Delinquency Three Months Ended or at Full
(as a % of Mgd. Gross Receivables) 3/31 6/30 9/30 12/31 Year
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Home equity 2.15 % 2.12 % 2.28 % 2.22 % 2.22 %
Personal loans / retail
sales finance 3.32 3.34 3.40 3.44 3.44
Credit card 3.83 3.81 3.99 3.92 3.92
Manufactured housing 0.94 1.01 1.21 1.29 1.29
Truck and truck trailer 1.58 1.53 1.50 1.22 1.22
Equipment 0.92 0.94 1.30 0.91 0.91
Recreational vehicles 0.08 0.07 0.06 0.08 0.08
Fleet leasing 0.50 0.64 0.70 0.61 0.61
Total (managed) 2.14 % 2.17 % 2.28 % 2.15 % 2.15 %
Net Credit Losses (as a % of Avg. Mgd. Receivables)
- -------------------------------------------------------------------------------------------
Home equity 1.08 % 1.05 % 1.02 % 1.00 % 1.04 %
Personal loans / retail
sales finance 4.60 5.29 5.47 5.57 5.26
Credit card 7.13 7.27 7.04 6.96 7.10
Manufactured housing 0.65 0.71 1.00 1.07 0.87
Truck and truck trailer 0.31 0.30 0.33 0.32 0.32
Equipment 0.23 0.36 0.36 0.22 0.29
Recreational vehicles 0.19 0.22 0.34 0.43 0.30
Fleet leasing 0.07 0.18 0.22 0.18 0.16
Total (managed) 2.20 % 2.37 % 2.37 % 2.33 % 2.32 %
Loss Coverage (on-balance sheet)
Allowance for losses $ 1,675.9 $ 1,849.5 $ 1,891.4 $ 1,949.9 $ 1,949.9
% of net finance receivable 3.51 % 3.58 % 3.59 % 3.53 % 3.53 %
Multiple to net losses <F1> 1.70 x 1.70 x 1.62 x 1.59 x 1.59 x
</TABLE>
(MORE)<PAGE>
<TABLE>
<CAPTION>
1998
60+Days Contractual Delinquency Three Months Ended or at Full
(as a % of Mgd. Gross Receivables) 3/31 6/30 9/30 12/31 Year
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Home equity 2.23 % 2.40 % 2.63 % 2.74 % 2.74 %
Personal loans / retail sales 3.53 3.62 3.90 3.74 3.74
Credit card 3.96 4.09 4.29 4.73 4.73
Manufactured housing 1.26 1.36 1.34 2.31 2.31
Truck and truck trailer 1.34 1.44 1.34 1.22 1.22
Equipment 1.12 0.97 0.91 0.84 0.84
Recreational vehicles 0.05 0.07 0.06 0.07 0.07
Fleet leasing 0.43 0.74 0.53 1.09 1.09
Total (managed) 2.18 % 2.29 % 2.39 % 2.57 % 2.57 %
Net Credit Losses (as a % of Avg. Mgd. Receivables)
- --------------------------------------------------------------------------------------------
Home equity 1.03 % 1.07 % 1.11 % 1.19 % 1.10 %
Personal loans / retail sales f 5.71 5.65 5.43 6.05 5.67
Credit card 7.07 7.63 7.62 7.52 7.38
Manufactured housing 0.94 0.84 1.39 1.56 1.21
Truck and truck trailer 0.52 0.45 0.37 0.59 0.48
Equipment 0.11 0.25 0.33 0.12 0.20
Recreational vehicles 0.27 0.28 0.19 0.21 0.24
Fleet leasing 0.08 0.08 0.05 0.05 0.07
Total (managed) 2.31 % 2.37 % 2.38 % 2.65 % 2.43 %
Loss Coverage (on-balance sheet)
Allowance for losses $ 2,014.9 $ 1,848.7 $ 1,865.0 $ 1,978.7 $ 1,978.7
% of net finance receivables 3.50 % 3.32 % 3.24 % 3.25 % 3.25 %
Multiple to net losses <F1> 1.56 x 1.51 x 1.70 x 1.74 x 1.74 x
<FN>
<F1> The year and quarter ended December 31, 1998 reflects a
multiple of annualized second, third and fourth quarter losses.
The quarter ended September 30, 1998 reflects a multiple of
annualized second and third quarter losses. The quarter
ended June 30, 1998 reflects a multiple of annualized second
quarter losses and all other periods reflect a multiple of
trailing 4 quarter losses.
</FN>
</TABLE>
<PAGE>
THE ASSOCIATES
QUARTERLY FINANCIAL SUPPLEMENT
Income Statement and Balance Sheet Items
<TABLE>
<CAPTION>
1997
Three Months Ended or at Full
Income Statement ($ millions) 3/31 6/30 9/30 12/31 Year
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue
Finance charges $ 1,761.7 $ 1,872.4 $ 1,935.3 $ 1,990.8 $ 7,560.2
Insurance premiums 99.1 105.3 105.5 110.8 420.7
Investment and other income 65.9 71.8 77.3 82.7 297.7
1,926.7 2,049.5 2,118.1 2,184.3 8,278.6
Expenses
Interest expense 637.4 679.6 718.8 739.4 2,775.2
Operating expenses 531.2 571.6 603.0 633.8 2,339.6
Provision for losses 344.5 372.6 328.5 332.5 1,378.1
Insurance benefits paid or provided 36.1 36.7 34.7 38.2 145.7
1,549.2 1,660.5 1,685.0 1,743.9 6,638.6
Earnings before taxes 377.5 389.0 433.1 440.4 1,640.0
Provision for income taxes 139.7 144.0 162.2 162.4 608.3
Net earnings $ 237.8 $ 245.0 $ 270.9 $ 278.0 $ 1,031.7
Net earnings per diluted share
(whole $) <F1> $ 0.34 $ 0.35 $ 0.39 $ 0.40 $ 1.48
Equivalent shares for diluted
EPS calculation (000's) <F1> 695,516 695,073 696,339 696,602 695,887
Balance Sheet Items ($ millions)
Net Receivables
End of period
Home equity $ 16,965.5 $ 17,547.2 $ 18,255.4 $ 18,796.0 $ 18,796.0
Personal loans / retail
sales finance 7,677.1 8,385.4 8,581.2 8,731.6 8,731.6
Credit card 6,691.3 8,240.4 8,094.7 8,211.7 8,211.7
Manufactured housing 1,066.9 1,373.8 1,246.9 1,669.4 1,669.4
Truck and truck trailer 8,687.3 8,970.6 9,200.5 9,688.9 9,688.9
Equipment 4,679.7 4,887.4 5,027.9 5,300.5 5,300.5
Recreational vehicles 461.3 608.7 447.1 444.0 444.0
Fleet leasing 1,116.3 1,160.2 1,158.4 1,551.1 1,551.1
Warehouse and other 355.7 443.5 665.7 822.4 822.4
Total $ 47,701.1 $ 51,617.2 $ 52,677.8 $ 55,215.6 $ 55,215.6
Average $ 47,555.6 $ 50,416.7 $ 52,334.4 $ 53,784.6 $ 51,110.5
Total Assets
End of period $ 49,210.8 $ 53,041.2 $ 54,354.6 $ 57,232.7 $ 57,232.7
Average 49,153.6 51,963.6 53,914.5 55,718.4 52,804.6
Debt 41,916.7 45,579.4 46,584.3 49,198.6 49,198.6
Stockholders' Equity
End of period $ 5,558.7 $ 5,821.0 $ 6,016.6 $ 6,268.6 $ 6,268.6
Per share (whole $) <F1> 8.02 8.40 8.68 9.05 9.05
Average 5,479.4 5,690.0 5,906.4 6,127.2 5,801.2
Debt-to-equity 7.54 x 7.82 x 7.74 x 7.84 x 7.84x
Debt-to-adjusted equity 8.73 9.10 8.85 8.83 8.83
<FN>
<F1> Adjusted to give a retroactive recognition to a two-for-one
stock split on December 23, 1998.
</FN>
</TABLE>
(MORE)
<TABLE>
<CAPTION>
1998
Three Months Ended or at Full
Income Statement ($ millions) 3/31 6/30 9/30 12/31 Year
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue
Finance charges $ 2,045.0 $ 1,881.8 $ 1,930.6 $ 2,053.0 $ 7,910.4
Insurance premiums 112.4 104.1 110.0 145.0 471.5
Investment and other income 73.7 309.2 264.1 347.9 994.9
2,231.1 2,295.1 2,304.7 2,545.9 9,376.8
Expenses
Interest expense 757.3 785.5 807.3 846.6 3,196.7
Operating expenses 620.0 671.4 705.2 801.4 2,798.0
Provision for losses 365.0 342.8 253.5 322.2 1,283.5
Insurance benefits paid or provided 42.8 30.5 34.2 50.6 158.1
1,785.1 1,830.2 1,800.2 2,020.8 7,436.3
Earnings before taxes 446.0 464.9 504.5 525.1 1,940.5
Provision for income taxes 165.0 172.0 186.9 193.1 717.0
Net earnings $ 281.0 $ 292.9 $ 317.6 $ 332.0 $ 1,223.5
Net earnings per diluted
share (whole $) <F1> $ 0.40 $ 0.42 $ 0.46 $ 0.47 $ 1.75
Equivalent shares for
diluted EPS calculation (000's)<F1> 697,529 697,180 696,453 708,240 699,871
Balance Sheet Items ($ millions)
Net Receivables
End of period
Home equity $ 19,755.0 $ 20,850.3 $ 21,745.3 $ 22,458.2 $ 22,458.2
Personal loans / retail
sales finance 9,224.5 10,365.2 10,499.4 11,459.2 11,459.2
Credit card 7,787.7 2,632.5 2,749.7 3,138.1 3,138.1
Manufactured housing 2,185.0 2,714.8 3,194.9 3,648.2 3,648.2
Truck and truck trailer 10,043.5 10,312.3 10,470.5 10,783.6 10,783.6
Equipment 5,632.7 5,790.9 5,813.8 6,114.0 6,114.0
Recreational vehicles 483.8 430.7 411.9 479.7 479.7
Fleet leasing 1,577.0 1,602.8 1,584.0 1,589.7 1,589.7
Warehouse and other 942.1 996.3 1,080.9 1,268.3 1,268.3
Total $ 57,631.3 $ 55,695.8 $ 57,550.4 $ 60,939.0 $ 60,939.0
Average $ 56,307.3 $ 54,177.1 $ 56,502.2 $ 60,191.3 $ 57,253.1
Total Assets
End of period $ 60,568.0 $ 63,410.1 $ 66,105.3 $ 75,175.4 $ 75,175.4
Average 58,835.4 60,531.3 64,515.5 72,490.2 64,529.6
Debt 51,994.8 54,605.3 56,844.2 63,306.5 63,306.5
Stockholders' Equity
End of period $ 6,503.4 $ 6,680.0 $ 6,967.1 $ 8,526.5 $ 8,526.5
Per share (whole $) <F1> 9.38 9.65 10.06 11.72 11.72
Average 6,381.6 6,576.9 6,802.9 7,525.2 6,821.5
Debt-to-equity 7.99 x 8.17 x 8.15 x 7.40 x 7.40x
Debt-to-adjusted equity 8.95 9.06 9.01 8.12 8.12
<FN>
<F1> Adjusted to give a retroactive recognition to a two-for-one
stock split on December 23, 1998.
</FN>
</TABLE>
