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 11, 2000
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 earningsin a
news release dated April 11, 2000. 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 11, 2000 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
----------------------------------
Executive Vice President
and Comptroller
Date: April 11, 2000
THE ASSOCIATES
NEWS
FOR IMMEDIATE RELEASE
ASSOCIATES REPORTS STRONG QUARTER, IMPROVED CREDIT
QUALITY
Company Achieves Continued Growth, Strong Margins
DALLAS, April 11, 2000 - Associates First Capital Corporation
(NYSE: AFS) today reported first quarter earnings of $370.5
million, or $0.51 per share (diluted), an 11 percent increase per
share over the same period a year earlier, as adjusted to exclude
the previously announced charge of $0.10 per share reflecting the
company's decision to discontinue the manufactured housing loan
origination business.
"Our first quarter performance demonstrates that our business
fundamentals are on track to deliver solid results throughout the
year. We had strong growth and significantly improved credit
quality during the quarter. We remain confident in our ability
to meet our commitments to shareholders," said Keith W. Hughes,
chairman and chief executive officer.
During the quarter, credit card operations added 1.8 million
customers through its new KeyCorp and CITGO partnerships.
International operations, highlighted by results in Japan,
continued its strong contribution to the company's performance.
Domestic consumer operations significantly improved the credit
quality of its home equity portfolio. In order to maximize its
commercial distribution channels, the company reorganized its
commercial operations to enhance the sales focus of its branch
network and capture the efficiency of centralized services.
- more -
<PAGE>
Associates Reports First Quarter Results
April 11, 2000
Page 2
Bolstering its Web-based services and product offerings, The
Associates and Entrade launched TruckCenter.com, a new online
marketplace for the sale of trucks, parts, and related
finance and insurance services. In addition, the company added
the convenience of online bill presentment and payment for its
more than 6 million Texaco credit card customers, bringing to
9.5 million the total number of Associates oil credit card
customers who have this capability. Internet activities
continue to accelerate throughout the company in new business
development and customer service. "We expect to acquire more
than one million customers through this channel this year and
provide Web-based services to 15 million retail and commercial
customers by year end," said Hughes.
Commenting on its capital planning for 2000, Roy A. Guthrie,
chief financial officer, said, "The Associates board of directors
has authorized the repurchase of up to 50 million shares of the
company's stock. The share repurchase would be implemented over
time and funded through excess capital formation. This is one of
many tools we will use to enhance shareholder value as we
continue to evaluate the profit and growth potential of
individual businesses."
Associates First Capital Corporation, established in 1918,
is a leading diversified finance company providing consumer and
commercial finance, leasing, insurance and related services
worldwide. The Associates, headquartered in Dallas, has
operations in the United States and 14 international markets.
The Associates is a Fortune 150 corporation and is listed among
that magazine's Most Admired Companies. For more information,
visit The Associates 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, 1999, filed with the Securities and Exchange
Commission.
- more -
The Associates Reports First Quarter Results
April 11, 2000
Page 3
# # #
Contact information
News media: (972) 652-4522
[email protected]
Security Analysts: (972) 652-7294
[email protected]
Shareholders: 1-888-NYSE-AFS
THE ASSOCIATES
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
As Reported As Adjusted
Three Months Ended or at Three Months Ended or at
($ millions - except earnings per share) 3/31/00 12/31/99 3/31/99 3/31/00(1) 3/31/99(2) %Change
<S> <C> <C> <C> <C> <C> <C>
Net earnings
Amount $ 299.7 $ 408.7 $ 336.8 $ 370.5 $ 336.8 10
Return on average equity 12.08 % 16.97 % 15.47 % 14.94 % 15.47 %
Return on average adjusted equity 13.39 18.83 17.20 16.50 17.20
Return on average assets 1.43 1.93 1.65 1.76 1.65
Return on average managed assets 1.24 1.76 1.56 1.53 1.56
Net earnings per diluted share $ 0.41 $ 0.56 $ 0.46 $ 0.51 $ 0.46 11
Managed receivables $ 81,338.6 $ 84,414.7 $ 76,612.5 $ 81,338.6 $ 71,187.8 14
Total managed assets $ 98,247.3 $ 95,088.0 $ 86,805.4 $ 98,247.3 $ 86,805.4 13
Key Data (Managed)
Total revenue $ 3,380.3 $ 3,508.0 $ 3,185.5 $ 3,427.5 $ 3,185.5 8
Net interest margin (% avg. mgd. recs.) 9.50 % 9.26 % 9.02 % 9.50 % 9.02 %
Efficiency ratio 48.5 43.7 47.8 46.3 47.8
Credit quality
60+days contractual delinquency 2.64 % 2.77 % 2.70 % 2.64 % 2.73 %
Credit loss ratio (% avg. mgd. recs.) 2.86 2.97 2.72 2.86 2.78
Balance Sheet Information
Stockholders' equity $ 10,014.9 $ 9,800.5 $ 8,860.1 $ 10,014.9 $ 8,860.1 13
Allowance for losses (3) 2,055.6 2,174.4 2,267.3 2,055.6 2,267.3
% of net receivables 3.12 % 3.16 % 3.32 % 3.12 % 3.32 %
Multiple to net losses (4) 1.40 x 1.50 x 1.65 x 1.40 x 1.65 x
(1) Excludes a $112 million special pre-tax charge to earnings recorded during the first quarter of 2000 related to
the discontinuation of the manufactured housing loan origination business. This charge covers exit costs,
including severance, noncancellable contractual obligations and related costs, as well as a provision for
increased losses on the disposition of repossessions and fair-value adjustments of related assets.
(2) As adjusted March 31, 1999 managed receivables and credit quality information has been restated for
comparability purposes to exclude manufactured housing and recreational vehicles. 60+days contractual
delinquency excludes repossessions. The adjusted March 31, 1999 ratio previously included truck and truck
trailer repossessions with recourse to the dealer or manufacturer and has been restated for comparability.
A total March 31, 1999 ratio of 2.76% was previously reported.
(3) The March 31, 2000 allowance for losses reflects the reclassification of approximately $175 million of allowance
for losses to a specific reserve for manufactured housing owned assets.
(4) Calculated as a ratio of the allowance for losses to related trailing net credit losses on receivables owned at
the end of the period as adjusted to reflect the impact of significant acquisitions and to exclude net credit
losses related to receivables held for securitization or sale and certain securitized receivables.
</TABLE>
<PAGE>
THE ASSOCIATES
QUARTERLY FINANCIAL SUPPLEMENT
<TABLE>
<CAPTION>
Pro Forma Managed Basis Income Statement and Key Data
As adjusted (1) (2)
Three Months Ended or at Change from Prior Year
($ millions) 3/31/00(1) 12/31/99(2) 3/31/99(2) Amount Percent
<S> <C> <C> <C> <C> <C>
Revenue
Finance charges $ 3,004.2 $ 3,035.2 $ 2,747.7 $ 256.5 9.3 %
Insurance premiums 275.3 270.2 256.3 19.0 7.4
Investment and other income 148.0 202.6 181.5 (33.5) (18.5)
-------- ------- -------- -------
3,427.5 3,508.0 3,185.5 242.0 7.6
Expenses
Interest expense 1,101.4 1,116.1 1,031.6 69.8 6.8
Operating expenses 1,019.2 994.4 979.6 39.6 4.0
Provision for losses 593.4 634.3 531.7 61.7 11.6
Insurance benefits paid or provided 125.4 116.8 103.7 21.7 20.9
------- ------- ------- -----
2,839.4 2,861.6 2,646.6 192.8 7.3
------- ------- ------- -----
Earnings before provision for income taxes 588.1 646.4 538.9 49.2 9.1
Provision for income taxes 217.6 237.7 202.1 15.5 7.7
------- ------- ------- -----
Net earnings $ 370.5 $ 408.7 $ 336.8 $ 33.7 10.0 %
======= ======= ======= =====
Net earnings per diluted share (whole $) $ 0.51 $ 0.56 $ 0.46 $ 0.05 10.5 %
Equivalent shares for diluted EPS (000's) 728,847 729,711 732,137 (3,290)
<PAGE>
(1) Excludes a $112 million special pre-tax charge to earnings recorded during the first quarter of 2000 related to
the discontinuation of the manufactured housing loan origination business. This charge covers exit costs,
including severance, noncancellable contractual obligations and related costs, as well as a provision for
increased losses on disposition of repossessions and fair-value adjustments of related assets. This special
charge reduced investment and other income by $47 million and increased operating expenses and provision for
losses by $25 million and $40 million, respectively. This special charge reduced first quarter 2000 net
earnings per diluted share by $0.10.
(2) Managed receivables and credit quality information excludes manufactured housing and recreational vehicles for
all periods presented. 60+day contractual delinquency excludes repossessions. This ratio previously included
truck and truck trailer repossessions with recourse to the dealer or manufacturer and has been restated for
comparability. Total ratios of 2.85% and 2.76% at December 31, 1999 and March 31, 1999, respectively, were
previously reported.
</TABLE>
<PAGE>
QUARTERLY FINANCIAL SUPPLEMENT
Pro Forma Managed Basis Income Statement and Key Data
As adjusted (1) (2)
<TABLE>
<CAPTION>
Three Months Ended or at Change from Prior Year
($ millions) 3/31/00(1) 12/31/99(2) 3/31/99(2) Amount Percent
<S> <C> <C> <C>
Key Data ($ millions)
Net interest margin (% avg. mgd. recs.) 9.50 % 9.26 % 9.02 %
Efficiency ratio (managed) 46.3 43.7 47.8
Net credit losses (as a % of avg. mgd. recs.) 2.86 2.93 2.78
Delinquency ratio (% of mgd. gross recs.) 2.64 2.81 2.73
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C>
Managed Receivables
End of period $ 81,338.6 $ 78,919.9 $ 71,187.8 $ 10,150.8 14.3 %
Average 80,114.2 77,356.8 70,802.1 9,312.1 13.2
Managed Assets
End of period 98,247.3 95,088.0 86,805.4 11,441.9 13.2
Average 96,625.3 93,055.7 86,475.0 10,150.3 11.7
(1) Excludes a $112 million special pre-tax charge to earnings recorded during the first quarter of 2000 related to
the discontinuation of the manufactured housing loan origination business. This charge covers exit costs,
including severance, noncancellable contractual obligations and related costs, as well as a provision for
increased losses on disposition of repossessions and fair-value adjustments of related assets. This special
charge reduced investment and other income by $47 million and increased operating expenses and provision for
losses by $25 million and $40 million, respectively. This special charge reduced first quarter 2000 net
earnings per diluted share by $0.10.
(2) Managed receivables and credit quality information excludes manufactured housing and recreational vehicles for
all periods presented. 60+day contractual delinquency excludes repossessions. This ratio previously included
truck and truck trailer repossessions with recourse to the dealer or manufacturer and has been restated for
comparability. Total ratios of 2.85% and 2.76% at December 31, 1999 and March 31, 1999, respectively, were
previously reported.
</TABLE>
THE ASSOCIATES
QUARTERLY FINANCIAL SUPPLEMENT
Managed Receivables ($ millions)
<TABLE>
<CAPTION> Change from Prior Year
Outstanding at End of Period 3/31/00 12/31/99 3/31/99 Amount Percent
<S> <C> <C> <C> <C> <C>
Home equity $ 28,206.7 $ 27,480.3 $ 24,765.9 $ 3,440.8 13.9 %
Personal loans /
retail sales finance 16,222.0 16,012.4 15,264.1 957.9 6.3
Truck and truck trailer 13,017.4 13,130.3 11,397.3 1,620.1 14.2
Credit card 13,194.1 11,733.6 10,519.7 2,674.4 25.4
Equipment 7,016.2 6,977.3 6,180.6 835.6 13.5
Fleet leasing 2,117.2 2,070.1 1,580.2 537.0 34.0
Warehouse and other 1,565.0 1,515.9 1,480.0 85.0 5.7
-------- ------- -------- -------
Total ongoing operations(1) $ 81,338.6 $ 78,919.9 $ 71,187.8 $ 10,150.8 14.3 %
======== ======== ======= ========
Change from Prior Year
Average Outstanding 3/31/00 12/31/99 3/31/99 Amount Percent
Home equity $ 27,815.2 $ 26,990.7 $ 24,578.5 $ 3,236.7 13.2 %
Personal loans /
retail sales finance 15,984.4 15,649.3 15,616.1 368.3 2.4
Truck and truck trailer 13,047.0 13,026.9 11,109.4 1,937.6 17.4
Credit card 12,654.3 11,336.2 10,456.9 2,197.4 21.0
Equipment 6,981.6 6,870.2 6,120.1 861.5 14.1
Fleet leasing 2,094.4 2,057.9 1,586.8 507.6 32.0
Warehouse and other 1,537.3 1,425.6 1,334.3 203.0 15.2
--------- -------- -------- --------
Total ongoing operations(1) $ 80,114.2 $ 77,356.8 $ 70,802.1 $ 9,312.1 13.2 %
========= ======== ======== ========
(1) Excludes manufactured housing and recreational vehicles for all periods presented.
</TABLE>
THE ASSOCIATES
QUARTERLY FINANCIAL SUPPLEMENT
Credit Quality
<TABLE>
<CAPTION>
60+Days Contractual Three Months Ended or at
Delinquency (as a % of Mgd. Gross Receivables) 3/31/00 12/31/99 3/31/99
<S> <C> <C> <C>
Home equity 2.97 % 3.29 % 2.98 %
Personal loans / retail sales finance 3.35 3.84 3.49
Truck and truck trailer (1) 1.36 1.28 1.19
Credit card 3.88 4.17 4.49
Equipment 1.31 0.89 1.15
Fleet leasing 0.47 0.39 1.13
Total ongoing operations (2) 2.64 % 2.81 % 2.73 %
Net Credit Losses (as a % of Avg. Mgd. Receivables)
Home equity 1.35 % 1.49 % 1.04 %
Personal loans / retail sales finance 6.52 6.06 5.57
Truck and truck trailer 0.85 0.81 0.50
Credit card 5.81 6.66 7.31
Equipment 0.30 0.75 0.25
Fleet leasing 0.04 0.06 0.03
Total ongoing operations (2) 2.86 % 2.93 % 2.78 %
Loss Coverage (on-balance sheet)
Allowance for losses (3) $ 2,055.6 $ 2,174.4 $ 2,267.3
% of net finance receivables 3.12 % 3.16 % 3.32 %
Multiple to net losses (4) 1.40 x 1.50 x 1.65 x
(1) 60+days contractual delinquencies excludes repossessions. This ratio previously
included repossessions with recourse to the dealer or manufacturer and has been
restated for comparability. Truck and truck trailer ratios of 1.48% and 1.39%
at December 31, 1999 and March 31, 1999, respectively, were previously reported.
(2) Excludes manufactured housing and recreational vehicles for all periods
presented. 60+day contractual delinquency excludes repossessions. This ratio
previously included truck and truck trailer repossessions with recourse to the
dealer or manufacturer and has been restated for comparability. Total ratios
of 2.85% and 2.76% at December 31, 1999 and March 31, 1999, respectively, were
previously reported.
(3) The March 31, 2000 allowance for losses reflects the reclassification of
approximately $175 million of allowance for loss to a specific reserve for
manufactured housing owned assets.
(4) Calculated as a ratio of the allowance for losses to related trailing net
credit losses on receivables owned at the end of the period as adjusted to
reflect the impact of significant acquisitions and to exclude net credit
losses related to receivables held for securitization or sale and certain
securitized receivables.
</TABLE>
THE ASSOCIATES
QUARTERLY FINANCIAL SUPPLEMENT
Income Statement and Balance Sheet Items
<TABLE>
<CAPTION>
As Reported
Three Months Ended or at
Income Statement ($ millions) 3/31/00 12/31/99 3/31/99
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenue
Finance charges $ 2,278.2 $ 2,318.8 $ 2,283.9
Servicing related income 403.6 364.6 223.3
Insurance premiums 275.3 270.2 256.3
Investment and other income 100.8 202.6 181.5
------- ------- -------
3,057.9 3,156.2 2,945.0
Expenses
Interest expense 961.1 988.7 960.0
Operating expenses 1,044.2 994.4 979.6
Provision for losses 451.5 409.9 362.8
Insurance benefits paid or provided 125.4 116.8 103.7
------- ------- -------
2,582.2 2,509.8 2,406.1
------- ------- -------
Earnings before taxes 475.7 646.4 538.9
Provision for income taxes 176.0 237.7 202.1
------- ------- -------
Net earnings $ 299.7 $ 408.7 $ 336.8
======= ======= =======
Net earnings per diluted share (whole $) $ 0.41 $ 0.56 $ 0.46
Equivalent shares for diluted EPS (000's) 728,847 729,711 732,137
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
As Reported
Three Months Ended or at
Balance Sheet Items ($ millions) 3/31/00 12/31/99 3/31/99
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Receivables
End of period
Home equity $ 24,490.6 $ 25,015.0 $ 24,614.2
Personal loans / retail sales finance 15,391.6 16,012.4 15,264.1
Truck and truck trailer 13,017.4 13,130.3 11,397.3
Credit card 2,284.4 2,247.1 3,728.0
Equipment 7,016.2 6,977.3 6,180.6
Manufactured housing (2) - 1,849.0 3,955.4
Fleet leasing 2,117.2 2,070.1 1,580.2
Warehouse and other 1,565.0 1,515.9 1,480.0
-------- -------- --------
Total $ 65,882.4 $ 68,817.1 $ 68,199.8
======== ======== ========
Average $ 66,340.6 $ 69,131.3 $ 67,475.6
Total Assets
End of period $ 84,700.1 $ 82,956.8 $ 81,935.9
Average 84,070.7 84,515.9 81,560.4
Debt 70,045.7 68,657.4 69,137.5
Stockholders' Equity
End of period $ 10,014.9 $ 9,800.5 $ 8,860.1
Per share (whole $) 13.75 13.46 12.17
Average 9,921.4 9,632.7 8,705.3
(1) Excludes a $112 million special pre-tax charge to earnings recorded during the
first quarter of 2000 related to the discontinuation of the manufactured
housing loan origination business. This charge covers exit costs, including
severance, noncancellable contractual obligations and related costs, as well
as a provision for increased losses on disposition of repossessions and
fair-value adjustments of related assets. This special charge reduced
investment and other income by $47 million and increased operating expenses
and provision for losses by $25 million and $40 million, respectively. This
special charge reduced first quarter 2000 net earnings per diluted share by
$0.10.
(2) Adjusted March 31, 1999 net receivables exclude manufactured housing.
</TABLE>
<TABLE>
<CAPTION>
As Adjusted
Three Months Ended or at
Income Statement ($ millions) 3/31/00 (1) 3/31/99 %Change
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenue
Finance charges $ 2,278.2 $ 2,283.9 (0.2)%
Servicing related income 403.6 223.3 80.7
Insurance premiums 275.3 256.3 7.4
Investment and other income 148.0 181.5 (18.5)
------- -------
3,105.1 2,945.0 5.4
Expenses
Interest expense 961.1 960.0 0.1
Operating expenses 1,019.2 979.6 4.0
Provision for losses 411.3 362.8 13.4
Insurance benefits paid or provided 125.4 103.7 20.9
------- -------
2,517.0 2,406.1 4.6
------- -------
Earnings before taxes 588.1 538.9 9.1
Provision for income taxes 217.6 202.1 7.7
------- -------
Net earnings $ 370.5 $ 336.8 10.0 %
======= =======
Net earnings per diluted share (whole $) $ 0.51 $ 0.46 10.5 %
Equivalent shares for diluted EPS (000's) 728,847 732,137
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
As Adjusted
Three Months Ended or at
Balance Sheet Items ($ millions) 3/31/00 (1) 3/31/99 %Change
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Receivables
End of period
Home equity $ 24,490.6 $ 24,614.2 (0.5)%
Personal loans / retail sales finance 15,391.6 15,264.1 0.8
Truck and truck trailer 13,017.4 11,397.3 14.2
Credit card 2,284.4 3,728.0 (38.7)
Equipment 7,016.2 6,180.6 13.5
Manufactured housing (2) - - -
Fleet leasing 2,117.2 1,580.2 34.0
Warehouse and other 1,565.0 1,480.0 5.7
-------- --------
Total $ 65,882.4 $ 64,244.4 2.5 %
======== ========
Average $ 66,340.6 $ 63,673.3
Total Assets
End of period $ 84,700.1 $ 81,935.9 3.4 %
Average 84,070.7 81,560.4 3.1
Debt 70,045.7 69,137.5 1.3
Stockholders' Equity
End of period $ 10,014.9 $ 8,860.1
Per share (whole $) 13.75 12.17
Average 9,921.4 8,705.3
<PAGE>
(1) Excludes a $112 million special pre-tax charge to earnings recorded during the
first quarter of 2000 related to the discontinuation of the manufactured
housing loan origination business. This charge covers exit costs, including
severance, noncancellable contractual obligations and related costs, as well
as a provision for increased losses on disposition of repossessions and
fair-value adjustments of related assets. This special charge reduced
investment and other income by $47 million and increased operating expenses
and provision for losses by $25 million and $40 million, respectively. This
special charge reduced first quarter 2000 net earnings per diluted share by
$0.10.
(2) Adjusted March 31, 1999 net receivables exclude manufactured housing.
</TABLE>