<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 13, 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 first quarter earnings in a
news release dated April 13, 1999. A copy of the news release, financial
highlights and financial supplement 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 13, 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: April 13, 1999<PAGE>
<PAGE>
THE ASSOCIATES.
NEWS
FOR IMMEDIATE RELEASE
THE ASSOCIATES REPORTS RECORD FIRST QUARTER
Integration Plans On Target, Acquisitions Contributing
DALLAS (April 13, 1999) - Associates First Capital Corporation
(NYSE:AFS) achieved record first quarter earnings, as a result of
the solid foundation laid by the company's record year in 1998
and successful integration of recent acquisitions, Chairman and
Chief Executive Officer Keith W. Hughes announced today.
"These earnings are due to the strength of our core businesses
and contributions from the earning assets we acquired throughout
1998 and early 1999," Hughes said. "We are already realizing the
benefits of most of those acquisitions, largely because they were
spread across our business units, making rapid assimilation
possible. We are confident that 1999 will see another year of
reliable, consistent results at The Associates."
Key financial highlights of the quarter include:
* Net earnings reached $336.8 million, a 20% increase over the
same period a year earlier.
* Net earnings per share (diluted) for the quarter were $0.46,
14% greater than the prior year.
* Managed receivables were $76.6 billion, 25% greater than a year
ago, and total managed assets reached $86.8 billion.
The highlight of the quarter came on Jan. 6, when The Associates
closed its purchase of Avco Financial Services, the largest
acquisition in company history which added significant market
reach, product enhancements and management depth to its domestic
and international consumer operations. Recognizing the
importance of this major addition, the company has focused
significant resources on its integration, which is proceeding
according to plan. Integration expenses incurred during the
quarter were approximately $20 million. Integration expenses to
be incurred during the remainder of the year are not expected to
be material to the company's operating results.
U.S. Consumer Operations, by the end of the quarter, had added a
net 400 offices and 2,100 employees from the Avco acquisition.
The company moved quickly to take advantage of the opportunities
presented by the acquisition, especially in home equity lending.
As a result, the new Avco branches reported real estate volume
for the quarter that was the best in their history. Also during
the quarter, Consumer Operations announced the formation of a
subsidiary, EnTerra Settlement Services, to provide real estate
title and appraisal services.
Credit Card Operations gained 2.3 million active customers with
the acquisition of the Shell Proprietary Credit Card program on
Feb. 1. Combining the Shell program with existing Texaco and
Amoco private label portfolios solidified The Associates as the
number-one issuer of oil private label cards in the United
States. In addition, SPS Payment Systems continued to
demonstrate its strength in the retail private-label business by
adding new relationships with Gateway, one of the largest U.S.
direct marketers of personal computers, and one of the nation's
largest automobile tire and battery retailers - NTB National Tire
& Battery, a division of Sears, Roebuck & Co.
Commercial Operations solidified its leadership positions in its
major lines of business and maintained its rank as one of the
nation's largest and most profitable commercial finance
operations. Growth in Commercial was led by the Transportation
Division, which continued to benefit from strong domestic truck
and trailer sales. Also during the quarter, the company sold its
recreational vehicle financing business, earning a solid return
on its investment and furthering its capital management plan.
International Operations added eight new international markets as
a result of the Avco acquisition, gaining strategic footholds in
western Europe and strengthening its Asian presence. As part of
the Avco integration, the company completed headquarters
consolidations in Canada and the United Kingdom. Overall,
International Operations reported continued strong financial
performance, well ahead of 1998, led by outstanding growth in
Japan and the U.K.
Insurance Operations realized the first full quarter of benefits
from its 1998 acquisition of The Northland Company, including
increased synergies with existing commercial finance operations.
Northland's A+ rating was reaffirmed during the quarter by A.M.
Best, the nation's premier rating agency for insurance companies.
Associates First Capital Corporation, established in 1918, is a
leading diversified finance company providing consumer and
commercial finance, leasing, insurance and related services. The
Associates has operations in the United States and 15
international markets. Headquartered in Dallas, it is one of the
nation's 100 largest companies, based on total market
capitalization. For more information, visit the company's
Internet web site at www.theassociates.com.
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 Dec. 31, 1998, 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
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<TABLE>
THE ASSOCIATES
FINANCIAL HIGHLIGHTS
<CAPTION>
Three Months Ended or at
($ millions - except earnings per share) 3/31/99 3/31/98 %Change
------- ------- -------
<S> <C> <C> <C>
Net earnings
Amount $ 336.8 $ 281.0 20
Return on average equity 15.47 % 17.61 %
Return on average adjusted equity 17.20 20.17
Return on average assets 1.65 1.91
Return on average managed assets 1.56 1.82
Net earnings per diluted share (1) $ 0.46 $ 0.40 14
Managed receivables 76,612.5 61,048.8 25
Total managed assets 86,805.4 63,564.0 37
Key Data (Managed)
Total revenue $ 3,185.5 $ 2,288.3 39
Net interest margin (% avg. mgd. recs.) 9.02 % 8.83 %
Efficiency ratio 47.8 43.1
Credit quality
60+days contractual delinquency 2.70 % 2.18 %
Credit loss ratio (% avg. mgd. recs.) 2.72 2.31
Balance Sheet Information
Stockholders' equity $ 8,860.1 $ 6,503.4 36
Allowance for losses 2,267.3 2,014.9
% of net receivables 3.32 % 3.50 %
Multiple to net losses (Trailing 4 Qtrs)(2) 1.65 x 1.56 x
(1) Adjusted to give a retroactive recognition to a two-for-one
stock split on December 23, 1998.
(2) The current year multiple includes Avco's trailing 4 quarter losses.
</TABLE>
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<TABLE>
THE ASSOCIATES
QUARTERLY FINANCIAL SUPPLEMENT
<CAPTION>
Pro Forma Managed Basis Income Statement and Key Data Page 1
Three Months Ended or at Change from Prior Year
($ millions) 3/31/99 12/31/98 3/31/98 Amount Percent
<S> <C> <C> <C> <C> <C>
Revenue
Finance charges $ 2,747.7 $ 2,503.5 $ 2,123.0 $ 624.7 29.4 %
Insurance premiums 256.3 145.0 112.4 143.9 128.0
Investment and other income 181.5 136.1 52.9 128.6 N/M
------- ------- ------- -----
3,185.5 2,784.6 2,288.3 897.2 39.2
Expenses
Interest expense 1,031.6 925.6 806.6 225.0 27.9
Operating expenses 979.6 801.4 620.0 359.6 58.0
Provision for losses 531.7 481.9 372.9 158.8 42.6
Insurance benefits paid or provided 103.7 50.6 42.8 60.9 142.3
------- ------- ------- -----
2,646.6 2,259.5 1,842.3 804.3 43.7
------- ------- ------- -----
Earnings before provision for income taxes 538.9 525.1 446.0 92.9 20.8
Provision for income taxes 202.1 193.1 165.0 37.1 22.5
------- ------- ------- -----
Net earnings $ 336.8 $ 332.0 $ 281.0 $ 55.8 19.9 %
======= ======= ======= =====
Net earnings per diluted share (whole $) (1) $ 0.46 $ 0.47 $ 0.40 $ 0.06 14.2 %
Equivalent shares for
diluted EPS calculation (000's) (1) 732,137 708,240 697,529 34,608
Key Data ($ millions)
Net interest margin (% avg. mgd. recs.) 9.02 % 9.06 % 8.83 %
Efficiency ratio (managed) 47.8 44.3 43.1
Net credit losses (as a % of avg. mgd. recs.) 2.72 2.65 2.31
Delinquency ratio (% of mgd. gross recs.) 2.70 2.57 2.18
Managed Receivables
End of period $ 76,612.5 $ 71,364.3 $ 61,048.8 $ 15,563.7 25.5 %
Average 76,113.2 69,687.6 59,614.0 16,499.2 27.7
<PAGE>
Managed Assets
End of period 86,805.4 80,878.3 63,564.0 23,241.4 36.6
Average 86,475.0 77,613.4 61,801.4 24,673.6 39.9
(1) Adjusted to give a retroactive recognition to a two-for-one stock split on December 23, 1998.
/TABLE
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<TABLE>
THE ASSOCIATES
QUARTERLY FINANCIAL SUPPLEMENT
<CAPTION>
Managed Receivables ($ millions) Page 2
Change from Prior Year
Outstanding at End of Period (1) 3/31/99 12/31/98 3/31/98 Amount Percent
-------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Home equity $ 24,765.9 $ 22,622.3 $ 19,976.3 $ 4,789.6 24.0 %
Personal loans / retail
sales finance 15,264.1 11,459.2 9,224.5 6,039.6 65.5
Truck and truck trailer 11,397.3 10,783.6 10,043.5 1,353.8 13.5
Credit card 10,519.7 10,296.8 7,890.3 2,629.4 33.3
Equipment 6,180.6 6,114.0 5,632.7 547.9 9.7
Manufactured housing 5,424.7 5,193.5 3,972.4 1,452.3 36.6
Fleet leasing 1,580.2 1,589.7 1,577.0 3.2 0.2
Recreational vehicles - 2,036.9 1,790.0 (1,790.0) N/M
Warehouse and other 1,480.0 1,268.3 942.1 537.9 57.1
-------- --------- -------- --------
Total $ 76,612.5 $ 71,364.3 $ 61,048.8 $ 15,563.7 25.5 %
======== ========= ======== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Average Outstanding (1)
Change from Prior Year
3/31/99 12/31/98 3/31/98 Amount Percent
-------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Home equity $ 24,578.5 $ 22,397.3 $ 19,412.3 $ 5,166.2 26.6 %
Personal loans / retail
sales finance 15,616.1 11,172.0 8,883.9 6,732.2 75.8
Truck and truck trailer 11,109.4 10,617.8 9,843.2 1,266.2 12.9
Credit card 10,456.9 9,832.7 8,083.4 2,373.5 29.4
Equipment 6,120.1 5,895.8 5,504.9 615.2 11.2
Manufactured housing 5,311.1 5,016.4 3,736.2 1,574.9 42.2
Fleet leasing 1,586.8 1,588.8 1,560.6 26.2 1.7
Recreational vehicles - 2,020.5 1,729.7 (1,729.7) N/M
Warehouse and other 1,334.3 1,146.3 859.8 474.5 55.2
-------- --------- -------- --------
Total $ 76,113.2 $ 69,687.6 $ 59,614.0 $ 16,499.2 27.7 %
======== ========= ======== ========
(1) Includes servicing portfolio and receivables held for securitization.
/TABLE
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<TABLE>
THE ASSOCIATES
QUARTERLY FINANCIAL SUPPLEMENT
<CAPTION>
Credit Quality Page 3
60+Days Contractual Three Months Ended or at
Delinquency (as a % of Mgd. Gross Receivables) 3/31/99 12/31/98 3/31/98
------- --------- -------
<S> <C> <C> <C>
Home equity 2.98 % 2.74 % 2.23 %
Personal loans / retail sales finance 3.49 3.74 3.53
Truck and truck trailer 1.39 1.22 1.34
Credit card 4.49 4.73 3.96
Equipment 1.15 0.84 1.12
Manufactured housing 1.88 2.31 1.26
Fleet leasing 1.13 1.09 0.43
Recreational vehicles - 0.07 0.05
Total (managed) 2.70 % 2.57 % 2.18 %
Net Credit Losses (as a % of Avg. Mgd. Receivables)
Home equity 1.04 % 1.19 % 1.03 %
Personal loans / retail sales finance 5.57 6.05 5.71
Truck and truck trailer 0.50 0.59 0.52
Credit card 7.31 7.52 7.15
Equipment 0.25 0.12 0.11
Manufactured housing 1.96 1.56 0.94
Fleet leasing 0.03 0.05 0.08
Recreational vehicles - 0.21 0.27
Total (managed) 2.72 % 2.65 % 2.31 %
Loss Coverage (on-balance sheet)
Allowance for losses $ 2,267.3 $ 1,978.7 $ 2,014.9
% of net finance receivables 3.32 % 3.25 % 3.50 %
Multiple to net losses (1) (2) 1.65 x 1.74 x 1.56 x
(1) First quarter 1999 multiple includes Avco's trailing 4 quarter losses.
(2) Fourth quarter 1998 multiple reflects annualized second, third and fourth quarter losses. First quarter 1998 multiple reflects
trailing 4 quarter losses.
/TABLE
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<TABLE>
THE ASSOCIATES
QUARTERLY FINANCIAL SUPPLEMENT
<CAPTION>
Income Statement and Balance Sheet Items Page 4
Three Months Ended or at Change from Prior Year
Income Statement ($ millions) 3/31/99 12/31/98 3/31/98 Amount Percent
-------- --------- ------- ------- ---------
<S> <C> <C> <C> <C> <C>
Revenue
Finance charges $ 2,283.9 $ 2,053.0 $ 2,045.0 $ 238.9 11.7%
Insurance premiums 256.3 145.0 112.4 143.9 128.0
Investment and other income 404.8 347.9 73.7 331.1 N/M
-------- --------- ------- -------
2,945.0 2,545.9 2,231.1 713.9 32.0
Expenses
Interest expense 960.0 846.6 757.3 202.7 26.8
Operating expenses 979.6 801.4 620.0 359.6 58.0
Provision for losses 362.8 322.2 365.0 (2.2) (0.6)
Insurance benefits paid or provided 103.7 50.6 42.8 60.9 142.3
-------- --------- ------- -------
2,406.1 2,020.8 1,785.1 621.0 34.8
-------- --------- ------- -------
Earnings before taxes 538.9 525.1 446.0 92.9 20.8
Provision for income taxes 202.1 193.1 165.0 37.1 22.5
-------- --------- ------- -------
Net earnings $ 336.8 $ 332.0 $ 281.0 $ 55.8 19.9 %
======== ========= ======= =======
Net earnings per diluted share (whole $) (1) $ 0.46 $ 0.47 $ 0.40 $ 0.06 14.2 %
Equivalent shares for diluted EPS
calculation (000's) (1) 732,137 708,240 697,529 34,608
Balance Sheet Items ($ millions)
Net Receivables
End of period
Home equity $ 24,614.2 $ 22,458.2 $ 19,755.0 $ 4,859.2 24.6 %
Personal loans / retail sales finance 15,264.1 11,459.2 9,224.5 6,039.6 65.5
Truck and truck trailer 11,397.3 10,783.6 10,043.5 1,353.8 13.5
Equipment 6,180.6 6,114.0 5,632.7 547.9 9.7
Manufactured housing 3,955.4 3,648.2 2,185.0 1,770.4 81.0
Credit card 3,728.0 3,138.1 7,787.7 (4,059.7) (52.1)
Fleet leasing 1,580.2 1,589.7 1,577.0 3.2 0.2
Recreational vehicles - 479.7 483.8 (483.8) N/M
Warehouse and other 1,480.0 1,268.3 942.1 537.9 57.1
-------- --------- ------- -------
Total $ 68,199.8 $ 60,939.0 $ 57,631.3 $ 10,568.5 18.3 %
======== ========= ======= =======
Average $ 67,475.6 $ 60,191.3 $ 56,307.3 $ 11,168.3 19.8 %
Total Assets
End of period $ 81,935.9 $ 75,175.4 $ 60,568.0 $ 21,367.9 35.3
Average 81,560.4 72,490.2 58,835.4 22,725.0 38.6
Debt 69,137.5 63,306.5 51,994.8 17,142.7 33.0
Stockholders' Equity
End of period $ 8,860.1 $ 8,526.5 $ 6,503.4
Per share (whole $) (1) 12.17 11.72 9.38
Average 8,705.3 7,525.2 6,381.6
Debt-to-equity 7.79 x 7.40 x 7.99 x
Debt-to-adjusted equity 8.50 8.12 8.95
(1) Adjusted to give a retroactive recognition to a two-for-one stock split on December 23, 1998.
</TABLE>
