<PAGE> 1
THE ASSOCIATES
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NEWS FOR IMMEDIATE RELEASE
ASSOCIATES REPORTS RECORD QUARTERLY EARNINGS
22 PERCENT GROWTH IN GLOBAL CONSUMER RECEIVABLES
DALLAS, October 17, 2000 - Associates First Capital Corporation
(NYSE:AFS) today reported record third quarter earnings of $442 million, or
$0.61 per share (diluted), a 15 percent increase per share over the same period
a year earlier.
In the quarter, the company surpassed $88 billion in managed
receivables, fueled by year-over-year internal growth of 11% and strategic
acquisitions in the company's domestic credit card and international consumer
finance businesses.
"Our global consumer businesses continue to produce excellent financial
results driven by strong margins and stable credit quality. As we look forward
to combining with Citigroup, I take special pride in this quarter, and in our
employees who helped turn in yet another record performance," said Keith W.
Hughes, chairman and chief executive officer.
GLOBAL CONSUMER OPERATIONS
Receivables in The Associates global consumer businesses grew by 22
percent year-over-year with strong, mid-teens internal growth. During the third
quarter, the company completed several key acquisitions. The Associates formally
launched its private label credit card partnership with Zale Corporation by
acquiring $620 million in receivables and 840,000 active accounts. This brings
to 23 million the total number of active Associates credit card accounts.
-more-
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ASSOCIATES REPORTS RECORD EARNINGS
OCTOBER 17, 2000
PAGE 2
In addition, the company continued to execute its acquisition strategy
in the Japanese consumer finance market by purchasing a majority interest in
Unimat Life and successfully integrating Chiyoda Trust. The Associates now ranks
as the fourth-largest consumer finance company in Japan, with more than 1
trillion yen (US$10 billion) in receivables and 1.9 million customers.
GLOBAL COMMERCIAL OPERATIONS
Based on its size, scope and long-standing leadership in the
transportation finance sector, the company remains well positioned to manage
through the current industry-wide challenges facing the trucking industry.
Commercial volume in the transportation and equipment lines during the third
quarter reflected the company's priority of controlling growth through tightened
underwriting and increased pricing. As a result of these actions, the company
experienced marginal liquidation in its commercial portfolio.
SPECIAL MATTERS
The estimated effective tax rate for the company was revised to 36
percent for this year, down from 37 percent that was incorporated in the
company's results for the first half. This revision reflects improved estimates
of the company's tax provisions based on a recent review of its domestic and
international tax positions. Offsetting this tax benefit is an after-tax charge
of $21 million associated with employee benefit charges related to the change in
control.
-more-
<PAGE> 3
ASSOCIATES REPORTS RECORD EARNINGS
OCTOBER 17, 2000
PAGE 3
Associates First Capital Corporation, established in 1918, is a leading
diversified finance company providing consumer and commercial finance, leasing,
insurance and related services worldwide. The Associates, headquartered in
Dallas, has operations in the United States and 14 international markets. The
Associates is a Fortune 150 corporation and is listed among that magazine's Most
Admired Companies. On Sept. 6, 2000, The Associates and Citigroup Inc. announced
they have entered into a merger agreement. The transaction is anticipated to
close before year-end. For more information, visit The Associates Web site at
www.theassociates.com.
This news release contains certain forward-looking statements. The factors which
may cause future results to differ materially from expectations are discussed in
the Form 10-K for the year ended Dec. 31, 1999, filed with the Securities and
Exchange Commission.
# # #
Contact information
News Media: (972) 652-4522
Securities Analysts: (972) 652-7294
[email protected]
Shareholders: 1-888-NYSE-AFS
<PAGE> 4
[THE ASSOCIATES LOGO] THE ASSOCIATES
FINANCIAL HIGHLIGHTS
AS ADJUSTED (AS DISCUSSED IN NOTE 1)
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<TABLE>
<CAPTION>
THREE MONTHS ENDED OR AT NINE MONTHS ENDED OR AT
----------------------------------------- --------------------------------------
($ MILLIONS - EXCEPT EARNINGS PER SHARE) 9/30/00 9/30/99 % CHANGE 9/30/00 9/30/99 % CHANGE
---------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
NET EARNINGS
Amount $ 442.4 $ 386.8 14 $ 1,222.1 $ 1,081.7 13
Return on average equity 16.92% 16.67% 15.97% 16.03%
Return on average adjusted equity 18.49 18.44 17.54 17.75
Return on average assets 1.95 1.83 1.86 1.73
Return on average managed assets 1.70 1.71 1.63 1.63
NET EARNINGS PER DILUTED SHARE $ 0.61 $ 0.53 15 $ 1.68 $ 1.48 13
MANAGED RECEIVABLES $ 88,407.6 $ 76,206.1 16
TOTAL MANAGED ASSETS $ 107,494.5 $ 92,342.4 16
KEY DATA (MANAGED)
------------------
TOTAL REVENUE $ 3,884.2 $ 3,310.2 17 $ 10,957.5 $ 9,743.1 12
NET INTEREST MARGIN (% AVG. MGD. RECS.) 9.97% 9.13% 9.69% 9.09%
EFFICIENCY RATIO (2) 44.3 44.7 45.3 46.3
CREDIT QUALITY
60+days contractual delinquency 2.58% 2.84% 2.58% 2.84%
Credit loss ratio (% avg. mgd. recs.) 2.84 2.73 2.81 2.74
BALANCE SHEET INFORMATION
-------------------------
STOCKHOLDERS' EQUITY $ 10,624.5 $ 9,471.9 12
ALLOWANCE FOR LOSSES 2,221.2 2,170.9
% of net receivables 3.14% 3.20%
Multiple to net losses (3) 1.39x 1.63x
</TABLE>
(1) Nine months ended September 30, 2000 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 obligation and related costs, as
well as a provision for increased losses on the disposition of
repossessions and fair-value adjustments of related assets. September
30, 1999 managed receivables and credit quality information have been
restated for comparability purposes. Managed receivables and credit
quality information exclude manufactured housing and Arcadia's
previously securitized receivables for all periods presented. In
addition, the September 30, 1999 60+days contractual delinquency ratio
previously included truck and truck trailer repossessions with recourse
to the dealer or manufacturer. The previously reported 60+days
contractual delinquency ratio at September 30, 1999 for total ongoing
operations was 2.88%.
(2) Three months and nine months ended September 30, 2000 excludes a $34
million special pre-tax charge to earnings recorded during the third
quarter of 2000 for employee benefit charges related to the change in
control.
(3) Calculated as a ratio of the allowance for losses to related trailing
net credit losses on receivables owned at the end of the period as
adjusted to reflect the impact of significant acquisitions and to
exclude net credit losses related to receivables held for
securitization or sale and certain securitized receivables.
<PAGE> 5
[THE ASSOCIATES LOGO] THE ASSOCIATES
QUARTERLY FINANCIAL SUPPLEMENT
PRO FORMA MANAGED BASIS INCOME STATEMENT AND KEY DATA
AS ADJUSTED (AS DISCUSSED IN NOTE 1) Page 1
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<TABLE>
<CAPTION>
THREE MONTHS ENDED OR AT CHANGE FROM PRIOR YEAR
------------------------------------------- -------------------------------
($ MILLIONS) 9/30/00 6/30/00 9/30/99 AMOUNT PERCENT
------------ ------------ ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
REVENUE
Finance charges $ 3,367.2 $ 3,180.4 $ 2,897.3 $ 469.9 16.2%
Insurance premiums 302.5 279.3 268.7 33.8 12.6
Investment and other income 214.5 186.1 144.2 70.3 48.8
------------ ------------ ------------ ------------
3,884.2 3,645.8 3,310.2 574.0 17.3
EXPENSES
Interest expense 1,226.4 1,192.4 1,074.8 151.6 14.1
Operating expenses 1,137.7 1,046.5 948.9 188.8 19.9
Provision for losses 680.2 613.4 556.6 123.6 22.2
Insurance benefits paid or provided 166.3 144.0 111.3 55.6 49.4
------------ ------------ ------------ ------------
3,210.6 2,996.3 2,691.6 519.6 19.3
------------ ------------ ------------ ------------
EARNINGS BEFORE PROVISION FOR INCOME TAXES 673.6 649.5 618.6 55.0 8.9
PROVISION FOR INCOME TAXES 231.2 240.3 231.8 (0.6) (0.3)
------------ ------------ ------------ ------------
NET EARNINGS $ 442.4 $ 409.2 $ 386.8 $ 55.6 14.4%
============ ============ ============ ============
Net earnings per diluted share (whole $) $ 0.61 $ 0.56 $ 0.53 $ 0.08 14.6%
Equivalent shares for diluted EPS (000's) 729,960 729,131 731,586 (1,626)
KEY DATA ($ MILLIONS)
---------------------
Net interest margin (% avg. mgd. rec) 9.97% 9.60% 9.13%
Efficiency ratio (managed) (2) 44.3 45.3 44.7
Net credit losses (as a % of avg. mgd. recs.) 2.84 2.73 2.73
Delinquency ratio (% of mgd. gross recs.) 2.58 2.59 2.84
Managed Receivables
End of period $ 88,407.6 $ 84,798.5 $ 76,206.1 $ 12,201.5 16.0%
Average 85,882.9 82,841.0 79,868.2 6,014.7 7.5
Managed Assets
End of period 107,494.5 100,943.9 92,342.4 15,152.1 16.4
Average 103,803.4 99,782.4 90,393.6 13,409.8 14.8
</TABLE>
(1) Managed receivables and credit quality information exclude manufactured
housing and Arcadia's previously securitized receivables for all
periods presented. In addition, the September 30, 1999 60+days
contractual delinquency ratio previously included truck and truck
trailer repossessions with recourse to the dealer or manufacturer. The
previously reported 60+days contractual delinquency ratio at September
30, 1999 for total ongoing operations was 2.88%.
(2) Three months and nine months ended September 30, 2000 excludes a $34
million special pre-tax charge to earnings recorded during the third
quarter of 2000 for employee benefit charges related to the change in
control.
<PAGE> 6
[THE ASSOCIATES LOGO] THE ASSOCIATES
QUARTERLY FINANCIAL SUPPLEMENT
MANAGED RECEIVABLES ($ MILLIONS) Page 2
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<TABLE>
<CAPTION>
CHANGE FROM PRIOR YEAR
----------------------
OUTSTANDING AT END OF PERIOD 9/30/00 6/30/00 9/30/99 AMOUNT PERCENT
---------------------------- ----------- ----------- ----------- ----------- -------
<S> <C> <C> <C> <C> <C>
Home equity $ 30,557.0 $ 29,715.5 $ 26,457.9 $ 4,099.1 15.5%
Personal loans / retail sales finance 19,244.2 17,710.7 15,498.6 3,745.6 24.2
Credit card 14,824.3 13,563.7 11,112.0 3,712.3 33.4
Truck and truck trailer 12,404.7 12,722.4 12,870.9 (466.2) (3.6)
Equipment 7,134.6 7,109.2 6,863.6 271.0 3.9
Fleet leasing 2,196.5 2,192.6 2,050.9 145.6 7.1
Warehouse and other 2,046.3 1,784.4 1,352.2 694.1 51.3
----------- ----------- ----------- -----------
Total ongoing operations (1) $ 88,407.6 $ 84,798.5 $ 76,206.1 $ 12,201.5 16.0%
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
CHANGE FROM PRIOR YEAR
----------------------
AVERAGE OUTSTANDING 9/30/00 6/30/00 9/30/99 AMOUNT PERCENT
------------------- ----------- ----------- ----------- ----------- -------
<S> <C> <C> <C> <C> <C>
Home equity $ 30,112.8 $ 28,930.6 $ 25,681.8 $ 4,431.0 17.3%
Personal loans / retail sales finance 17,735.2 16,813.5 15,102.5 2,632.7 17.4
Credit card 14,316.4 13,349.2 10,882.5 3,433.9 31.6
Truck and truck trailer 12,563.0 12,892.6 12,519.8 43.2 0.3
Equipment 7,138.8 7,057.1 6,751.5 387.3 5.7
Fleet leasing 2,129.9 2,148.0 2,011.5 118.4 5.9
Warehouse and other 1,886.8 1,650.0 1,357.7 529.1 39.0
----------- ----------- ----------- -----------
Total ongoing operations (1) $ 85,882.9 $ 82,841.0 $ 74,307.3 $ 11,575.6 15.6%
=========== =========== =========== ===========
</TABLE>
(1) Excludes manufactured housing and Arcadia's previously securitized
receivables for all periods presented.
<PAGE> 7
[THE ASSOCIATES LOGO] THE ASSOCIATES
QUARTERLY FINANCIAL SUPPLEMENT
CREDIT QUALITY (AS DISCUSSED IN NOTE 1) Page 3
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<TABLE>
<CAPTION>
60+DAYS CONTRACTUAL THREE MONTHS ENDED OR AT
---------------------------------------
DELINQUENCY (AS A % OF MGD. GROSS RECEIVABLES) 9/30/00 6/30/00 9/30/99
---------------------------------------------- ------- ------- -------
<S> <C> <C> <C>
Home equity 2.92% 2.91% 3.10%
Personal loans / retail sales finance 2.70 3.07 3.91
Credit card 4.09 3.77 4.45
Truck and truck trailer 1.72 1.64 1.28
Equipment 1.07 1.12 1.24
Fleet leasing 0.69 0.46 0.75
Total ongoing operations 2.58% 2.59% 2.84%
NET CREDIT LOSSES (AS A % OF AVG. MGD. RECEIVABLES)
---------------------------------------------------
Home equity 1.07% 1.10% 1.44%
Personal loans / retail sales finance 5.47 5.87 5.35
Credit card 6.13 5.77 6.83
Truck and truck trailer 1.82 1.30 0.64
Equipment 0.42 0.29 0.37
Fleet leasing 0.22 0.04 0.03
Total ongoing operations 2.84% 2.73% 2.73%
LOSS COVERAGE (ON-BALANCE SHEET)
--------------------------------
Allowance for losses $ 2,221.2 $2,115.7 $ 2,170.9
% of net finance receivables 3.14% 3.07% 3.20%
Multiple to net losses (2) 1.39x 1.40x 1.63x
</TABLE>
(1) Managed receivables and credit quality information exclude manufactured
housing and Arcadia's previously securitized receivables for all periods
presented. In addition, the 60+days contractual delinquency ratio
previously included truck and truck trailer repossessions with recourse to
the dealer or manufacturer. The previously reported 60+days contractual
delinquency ratios at September 30, 1999 for truck and truck trailer and
total ongoing operations were 1.50% and 2.88%, respectively.
(2) 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.
<PAGE> 8
[THE ASSOCIATES LOGO] THE ASSOCIATES
QUARTERLY FINANCIAL SUPPLEMENT
INCOME STATEMENT AND BALANCE SHEET ITEMS Page 4
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THREE MONTHS ENDED OR AT
----------------------------------------------------------------
INCOME STATEMENT ($ MILLIONS) 9/30/00 9/30/99 $ CHANGE % CHANGE
----------------------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUE
Finance charges $ 2,500.0 $ 2,241.6 $ 258.4 11.5%
Servicing related income 502.6 386.1 116.5 30.2
Insurance premiums 302.5 268.7 33.8 12.6
Investment and other income 214.5 144.2 70.3 48.8
------------ ------------ ------------
3,519.6 3,040.6 479.0 15.8
EXPENSES
Interest expense 1,052.2 992.5 59.7 6.0
Operating expenses 1,137.7 948.9 188.8 19.9
Provision for losses 489.8 369.3 120.5 32.6
Insurance benefits paid or provided 166.3 111.3 55.0 49.4
------------ ------------ ------------
2,846.0 2,422.0 424.0 17.5
------------ ------------ ------------
EARNINGS BEFORE TAXES 673.6 618.6 55.0 8.9
PROVISION FOR INCOME TAXES 231.2 231.8 (0.6) (0.3)
------------ ------------ ------------
NET EARNINGS $ 442.4 $ 386.8 $ 55.6 14.4%
============ ============ ============
Net earnings per diluted share (whole $) $ 0.61 $ 0.53 $ 0.08 14.6%
Equivalent shares for diluted EPS (000's) 729,960 731,586 (1,626)
BALANCE SHEET ITEMS ($ MILLIONS)
--------------------------------
NET RECEIVABLES (1)
End of period
Home equity $ 27,344.0 $ 26,334.0 $ 1,010.0 3.8%
Personal loans / retail sales finance 17,552.1 15,498.6 2,053.5 13.2
Credit card 2,149.8 2,263.2 (113.4) (5.0)
Truck and truck trailer 12,404.7 12,870.9 (466.2) (3.6)
Equipment 7,134.6 6,863.6 271.0 3.9
Fleet leasing 2,196.5 2,050.9 145.6 7.1
Warehouse and other 2,046.3 1,352.2 694.1 51.3
------------ ------------ ------------
Total $ 70,828.0 $ 67,233.4 $ 3,594.6 5.3%
============ ============ ============
Average $ 69,103.3 $ 66,133.2 $ 2,970.1
TOTAL ASSETS
End of period $ 93,017.6 $ 84,958.8 $ 8,058.8 9.5%
Average 90,589.8 84,658.8 5,931.0 7.0
DEBT 77,236.7 70,434.7 6,802.0 9.7
STOCKHOLDERS' EQUITY
End of period $ 10,624.5 $ 9,471.9 $ 1,152.6
Per share (whole $) 14.58 13.01 1.57
Average 10,459.8 9,280.3 1,179.5
</TABLE>
(1) September 30, 1999 net receivables have been restated for comparability to
exclude manufactured housing receivables.
