EX-99 2 q28k.txt HI 2ND QUARTER 2001 PRESS RELEASE Household Reports Record Second Quarter Results; 12th Consecutive Record Quarter o Earnings Per Share Increase 16%, to $.93 o Net Income Rises 14%, to $439 Million o Receivables Up 15%, to $91.5 Billion o Revenues Grow 19% Prospect Heights, IL, July 18, 2001 -- Household International (NYSE: HI) today reported record earnings per share of $.93, up 16 percent from a year ago. Net income rose 14 percent, to $439.0 million, from $383.9 million for the second quarter of 2000. William F. Aldinger, Household's chairman and chief executive officer, said, "We had a terrific quarter - our 12th consecutive quarter of record results. Given the softening economic environment, I am particularly pleased with our ability to consistently deliver strong, quality earnings. "Results for the quarter were excellent" Aldinger added. "We enjoyed strong receivable and revenue growth compared to a year ago, with all of our businesses performing well. In addition, delinquency was stable in the quarter, while chargeoffs rose modestly, consistent with our expectations. We further strengthened our balance sheet and passed the halfway point in our share repurchase goal for the year. "Our strong performance to date has positioned us well to achieve another record year in 2001," Aldinger concluded. Receivable Growth The company's managed portfolio grew 15 percent above the prior year, to $91.5 billion. All consumer products contributed to the increase, with the strongest growth in the real estate secured portfolio. This portfolio was up 17 percent over the year-ago period and comprises 43.5 percent of the total managed portfolio. On a sequential basis, managed receivables grew $3.2 billion, or an annualized 14 percent, led by strong growth in the HFC and Beneficial branch network. Revenues Led by higher receivable volume and a wider net interest margin, managed net revenues grew $395 million, or 19 percent, from a year ago. Household's managed net interest margin of $1.9 billion increased 19 percent from the prior year. The managed net interest margin percent widened to 8.34 percent from 8.17 percent a year ago and 8.22 percent in the first quarter. The increase was driven by lower funding costs. Managed fee income increased $43 million, or 12 percent, compared to the second quarter of 2000, principally reflecting higher levels of credit card fees. Other income increased over the prior year but declined from the first quarter level, which benefited from seasonal tax refund lending revenues. The company's risk adjusted revenue (managed net revenues less securitization revenues and chargeoffs) expanded to 7.53 percent from 7.37 percent a year ago. Operating Expenses Operating expenses rose 16 percent from a year ago, driven by higher sales incentives as well as increases in compensation and other costs to support the company's growing portfolio. Higher technology spending also contributed to the increase. Household's efficiency ratio was 35.5 percent in the second quarter, essentially flat with the first quarter and improved from 36.5 percent a year ago. Credit Quality and Loss Reserves At June 30th, the managed delinquency ratio (60+days) was 4.27 percent, stable with 4.25 percent in the first quarter. The managed delinquency ratio a year ago was 4.16 percent . The annualized managed net chargeoff ratio for the second quarter was 3.71 percent, essentially unchanged from the year-ago quarter and up modestly from 3.56 percent in the first quarter. Virtually all of the increase in the quarter was due to higher bankruptcy filings in the MasterCard/Visa and other unsecured portfolios. The company increased its credit loss reserves by $116 million during the quarter. Managed credit loss reserves exceeded $3.4 billion at June 30th, up $508 million from a year ago. The ratio of reserves-to-managed receivables was 3.78 percent at June 30th, unchanged from the first quarter level and up from 3.69 percent a year ago. Reserves-to-nonperforming loans were 109.9 percent at June 30th compared to 107.6 percent at March 31st and 113.0 percent a year ago. Capital The ratio of tangible equity to tangible managed assets improved to 7.61 percent at June 30th, compared to 7.54 percent at March 31st and 7.23 percent a year earlier. In connection with its $2 billion share repurchase program, announced on March 9, 1999, Household bought back 2.3 million shares in the second quarter, totaling $141 million. During the second quarter Household entered into agreements with third parties to purchase, on a forward basis, approximately 2.3 million shares of common stock at a weighted average price of $64.86 per share. For the first six months of the year, the company has repurchased 11.1 million shares under the program. Household also announced during the second quarter a new $2 billion stock repurchase program, which will go into effect the earlier of the completion of the current program or December 31, 2001. Notice of Live Webcast Household will broadcast its second quarter earnings teleconference call over the Internet on its website at www.household.com. The call will begin at 9:00 am Central Daylight Time on July 18, 2001. A replay will also be available shortly after the end of the call. Household's businesses are leading providers of consumer loans, credit cards, auto finance and credit insurance products in the United States, United Kingdom and Canada. In the United States, Household's largest business, founded in 1878, operates under the two oldest and most recognized names in consumer finance - HFC and Beneficial. Household is also one of the nation's largest issuers of private label and general purpose credit cards, including the GM Card and the AFL-CIO's Union Plus card. For more information, visit the company's web site at www.household.com. This press release contains certain estimates and projections that may be forward-looking in nature, as defined by the Private Securities Litigation Reform Act of 1995. A variety of factors may cause actual results to differ materially from the results discussed in these forward-looking statements. Factors that might cause such a difference are discussed in Household International's Annual Report on Form 10-K, filed with the SEC. CONTACTS: Craig A. Streem, Vice President -- Corporate Relations and Communications (847 564-6053), or Celeste M. Murphy, Director -- Investor Relations (847 564-7568), both of Household International Quarterly Financial Supplement June 30, 2001 - Quarterly Highlights ------------------------------------------------------------------------------- Summary Managed Income Statement % Change Three Months Ended from Prior -------------------------------------------- ($ millions) 6/30/01 3/31/01 6/30/00 Qtr. Year ------------------------------------------------------------------------------- Managed-basis net interest margin and other revenues (1) $2,487.2 $ 2,481.5 $ 2,092.5 0.2 % 18.9 % Managed-basis provision for credit losses (1) 934.8 932.8 744.3 0.2 25.6 Operating expenses 882.7 883.1 762.8 - 15.7 -------------------------------------------------------------------------------- Income before income taxes 669.7 665.6 585.4 0.6 14.4 Income taxes 230.7 233.8 201.5 (1.3) 14.5 -------------------------------------------------------------------------------- Net income $ 439.0 $ 431.8 $ 383.9 1.7 14.4 -------------------------------------------------------------------------------- Common Stock Data -------------------------------------------------------------------------------- Basic earnings per common share $ .94 $ .92 $ .80 2.2 % 17.5 % Diluted earnings per common share .93 .91 .80 2.2 16.3 -------------------------------------------------------------------------------- Average common shares (millions) 463.0 466.0 473.3 (0.6) (2.2) Average common and equivalent shares (millions) 469.6 472.0 477.0 (0.5) (1.6) ------------------------------------------------------------------------------ Common stock price: High $ 69.98 $ 62.00 $ 48.19 12.9 45.2 Low 57.45 52.00 36.00 10.5 59.6 Period end 66.70 59.24 41.56 12.6 60.5 ------------------------------------------------------------------------------- Dividends declared per common share$ .22 $ .19 $ .19 15.8 15.8 Book value per common share 17.94 17.23 15.28 4.1 17.4 ------------------------------------------------------------------------------- Key Ratios ------------------------------------------------------------------------------- Return on average common shareholders' equity 21.4% 21.6% 21.5% (0.9) (0.5)% Return on average owned assets 2.21 2.21 2.27 - (2.6) Return on average managed assets 1.78 1.77 1.78 0.6 - Managed efficiency ratio 35.5 35.6 36.5 (0.3) (2.7) Managed net interest margin 8.34 8.22 8.17 1.5 2.1 Total shareholders' equity as a percent of managed assets 9.28 9.24 9.06 0.4 2.4 Tangible equity to tangible managed assets 7.61 7.54 7.23 0.9 5.3 -------------------------------------------------------------------------------- (1) To aid analysis, net interest margin, other revenues, and provision for credit losses are presented on a pro forma managed basis as if receivables securitized and sold with limited recourse were held in the portfolio. Policyholders' benefits have been netted against other revenues. Year to Date Highlights ----------------------------------------------------------------------------- Summary Managed Income Statement Six Months Ended -------------------------------- ($ millions) 6/30/01 6/30/00 % Change ----------------------------------------------------------------------------- Managed-basis net interest margin and other revenues (1) $ 4,968.7 $ 4,257.7 16.7 % Managed-basis provision for credit losses (1) 1,867.6 1,560.5 19.7 Operating expenses 1,765.8 1,546.3 14.2 ----------------------------------------------------------------------------- Income before income taxes 1,335.3 1,150.9 16.0 Income taxes 464.5 394.1 17.9 ----------------------------------------------------------------------------- Net income 870.8 $ 756.8 15.1 ----------------------------------------------------------------------------- Common Stock Data ------------------------------------------------------------------------------- Basic earnings per common share $ 1.86 $ 1.59 17.0 % Diluted earnings per common share 1.84 1.58 16.5 ------------------------------------------------------------------------------- Average common shares (millions) 464.5 471.9 (1.6) Average common and equivalent shares (millions) 470.8 475.5 (1.0) ------------------------------------------------------------------------------- Common stock price: High 69.98 $ 48.19 45.2 Low 52.00 29.50 76.3 Period end 66.70 41.56 60.5 ------------------------------------------------------------------------------- Dividends declared per common share $ .41 $ .36 $ 13.9 ------------------------------------------------------------------------------- Key Ratios ------------------------------------------------------------------------------- Return on average common shareholders' equity 21.5 % 21.8 % (1.4)% Return on average owned assets 2.21 2.32 (4.7) Return on average managed assets 1.77 1.80 (1.7) Managed efficiency ratio 35.5 36.3 (2.2) Managed net interest margin 8.28 8.24 0.5 ---------------------------------------------------------------------------- Consolidated Statements of Income - Owned Basis Three Months ---------------------------------------------------------------------------- % Change Three Months Ended from Prior ---------------------------------------------------------------------------- ($ millions) 6/30/01 3/31/01 6/30/00 Qtr. Year ---------------------------------------------------------------------------- Finance and other interest income $ 2,451.2 $2,430.3 $2,083.4 0.9 % 17.7 Interest expense 1,048.4 1,106.8 933.0 (5.3) 12.4 ---------------------------------------------------------------------------- Net interest margin 1,402.8 1,323.5 1,150.4 6.0 21.9 Provision for credit losses on owned receivables 657.1 703.6 495.6 (6.6) 32.6 ----------------------------------------------------------------------------- Net interest margin after provision for credit losses 745.7 619.9 654.8 20.3 13.9 ----------------------------------------------------------------------------- Securitization revenue 400.6 406.3 355.6 (1.4) 12.7 Insurance revenue 159.3 158.6 131.8 0.4 20.9 Investment income 37.8 41.8 42.5 (9.6) (11.1) Fee income 232.7 237.9 195.9 (2.2) 18.8 Other income 49.4 161.7 31.9 (69.4) 54.9 ----------------------------------------------------------------------------- Total other revenues 879.8 1,006.3 757.7 (12.6) 16.1 ----------------------------------------------------------------------------- Salaries and fringe benefits 387.2 377.6 321.5 2.5 20.4 Sales incentives 73.6 54.5 57.4 35.0 28.2 Occupancy and equipment expense 83.7 83.5 75.6 0.2 10.7 Other marketing expenses 129.0 135.2 125.3 (4.6) 3.0 Other servicing and administrative expenses 171.7 193.4 144.1 (11.2) 19.2 Amortization of acquired intangibles and goodwill 37.5 38.9 38.9 (3.6) (3.6) Policyholders' benefits 73.1 77.5 64.3 (5.7) 13.7 ------------------------------------------------------------------------------- Total costs and expenses 955.8 960.6 827.1 (0.5) 15.6 ------------------------------------------------------------------------------- Income before income taxes 669.7 665.6 585.4 0.6 14.4 Income taxes 230.7 233.8 201.5 (1.3) 14.5 ------------------------------------------------------------------------------- Net income 439.0 431.8 383.9 1.7 14.4 Preferred dividends (2.3) (2.3) (2.3) - - ------------------------------------------------------------------------------- Earnings available to common shareholders $ 436.7 $ 429.5 $ 381.6 1.7 % 14.4 % ------------------------------------------------------------------------------- Effective tax rate 34.4 % 35.1 % 34.4 % (2.0) % - % ------------------------------------------------------------------------------- Balance Sheet Data ------------------------------------------------------------------------------- ($ millions) 6/30/01 3/31/01 6/30/00 ------------------------------------------------------------------------------- Owned assets $ 80,977.6 $ 78,253.3 $ 70,469.7 Managed assets 100,761.3 97,820.3 89,035.9 Managed receivables 91,538.5 88,372.6 79,945.0 Debt 67,792.1 65,164.0 59,076.4 Trust originated preferred securities 875.0 875.0 675.0 Preferred stock 164.4 164.4 164.4 Common shareholders' equity 7,896.4 7,616.7 7,224.7 Total shareholders' equity as a percent of managed assets 9.28 % 9.24 % 9.06% Tangible equity to tangible managed assets 7.61 7.54 7.23 ------------------------------------------------------------------------------- Six Months ------------------------------------------------------------------------------ Six Months Ended ------------------------------------------------------------------------------ ($ millions) 6/30/01 6/30/00 % Change ------------------------------------------------------------------------------ Finance and other interest income $ 4,881.5 $ 4,008.3 21.8 % Interest expense 2,155.2 1,754.7 22.8 ------------------------------------------------------------------------------ Net interest margin 2,726.3 2,253.6 21.0 Provision for credit losses on owned receivables 1,360.7 1,017.7 33.7 ------------------------------------------------------------------------------ Net interest margin after provision for credit losses 1,365.6 1,235.9 10.5 ------------------------------------------------------------------------------ Securitization revenue 806.9 702.0 14.9 Insurance revenue 317.9 266.8 19.2 Investment income 79.6 83.3 (4.4) Fee income 470.6 375.2 25.4 Other income 211.1 165.2 27.8 ------------------------------------------------------------------------------ Total other revenues 1,886.1 1,592.5 18.4 ------------------------------------------------------------------------------ Salaries and fringe benefits 764.8 623.6 22.6 Sales incentives 128.1 100.2 27.8 Occupancy and equipment expense 167.2 151.1 10.7 Other marketing expenses 264.2 258.4 2.2 Other servicing and administrative expenses 365.1 330.9 10.3 Amortization of acquired intangibles and goodwill 76.4 82.1 (6.9) Policyholders' benefits 150.6 131.2 14.8 ------------------------------------------------------------------------------ Total costs and expenses 1,916.4 1,677.5 14.2 ------------------------------------------------------------------------------ Income before income taxes 1,335.3 1,150.9 16.0 Income taxes 464.5 394.1 17.9 ------------------------------------------------------------------------------ Net income 870.8 756.8 15.1 Preferred dividends (4.6) (4.6) - ------------------------------------------------------------------------------ Earnings available to common shareholders $ 866.2 $ 752.2 15.2 % ------------------------------------------------------------------------------ Effective tax rate 34.8 % 34.2 % 1.8 % ------------------------------------------------------------------------------ Consolidated Statements of Income - Managed Basis ------------------------------------------------------------------------------- Securitizations and sales of consumer receivables are a source of liquidity for us. We continue to service the securitized receivables after such receivables are sold and we retain a limited recourse obligation. Securitizations impact the classification of revenues and expenses in the statement of operations. When reporting on a managed basis, net interest margin, provision for credit losses, fee income, and securitization related revenue related to receivables sold are reclassified from securitization revenue into the appropriate caption.
% Change Three Months from Prior ---------------------------------------------------------------------------------------------------------- ($ millions) 6/30/01 (1) 3/31/01 (1) 6/30/00 (1) Qtr. Year ---------------------------------------------------------------------------------------------------------- Finance and other interest income $ 3,216.8 14.17 % $3,246.8 14.58% $2,839.6 14.54% (0.9)% 13.3 % Interest expense 1,322.5 5.83 1,417.0 6.36 1,244.8 6.37 (6.7) 6.2 ---------------------------------------------------------------------------------------------------------- Net interest margin 1,894.3 8.34 % 1,829.8 8.22% 1,594.8 8.17% 3.5 18.8 Provision for credit losses 934.8 932.8 744.3 0.2 25.6 ---------------------------------------------------------------------------------------------------------- Net interest margin after provision for credit losses 959.5 897.0 850.5 7.0 12.8 ---------------------------------------------------------------------------------------------------------- Insurance revenue 159.3 158.6 131.8 0.4 20.9 Investment income 37.8 41.8 42.5 (9.6) (11.1) Fee income 396.3 393.2 353.3 0.8 12.2 Securitization related revenue 23.2 (26.1) 2.5 100+ 100+ Other income 49.4 161.7 31.9 (69.4) 54.9 ---------------------------------------------------------------------------------------------------------- Total other revenues 666.0 729.2 562.0 (8.7) 18.5 Operating expenses and policyholders' benefits 955.8 960.6 827.1 (0.5) 15.6 --------------------------------------------------------------------------------------------------------- Income before income taxes 669.7 665.6 585.4 0.6 14.4 Income taxes 230.7 233.8 201.5 (1.3) 14.5 --------------------------------------------------------------------------------------------------------- Net income $ 439.0 $ 431.8 $ 383.9 1.7 14.4 ---------------------------------------------------------------------------------------------------------- Average managed receivables: Real estate secured $ 38,779.6 $ 37,338.5 $ 31,912.0 3.9 % 21.5 % Auto finance 4,947.9 4,682.9 3,602.6 5.7 37.3 MasterCard/Visa (2) 16,969.9 17,119.7 15,748.2 (0.9) 7.8 Private label 11,971.1 12,013.2 10,964.8 (0.4) 9.2 Other unsecured 16,691.5 16,366.9 14,154.5 2.0 17.9 Commercial and other 566.9 581.5 719.5 (2.5) (21.2) ---------------------------------------------------------------------------------------------------------- Total 89,926.9 88,102.7 77,101.6 2.1 16.6 Average noninsurance investments 420.9 525.0 563.0 (19.8) (25.2) Other interest-earning assets 454.6 448.5 431.2 1.4 5.4 ---------------------------------------------------------------------------------------------------------- Average managed interest- earning assets $ 90,802.4 $ 89,076.2 $ 78,095.8 1.9 % 16.3 % ----------------------------------------------------------------------------------------------------------
(1) % Columns: comparison to average managed interest-earning assets, annualized. (2) MasterCard and Visa are registered trademarks of MasterCard International, Incorporated and VISA USA Inc., respectively. Summary of Securitization Related Revenue ------------------------------------------------------------------------------ Three Months Ended ------------------------------------------------------------------------------ ($ millions) 6/30/01 3/31/01 6/30/00 ------------------------------------------------------------------------------ Gross gains $ 160.4 $ 105.9 $ 96.8 Amortization (137.2) (132.0) (94.3) ------------------------------------------------------------------------------ Securitization related revenue 23.2 (26.1) 2.5 Over-the-life provision on new transactions 120.4 79.7 72.3 ------------------------------------------------------------------------------ Net effect of securitization activity $ (97.2) $(105.8) $ (69.8) ------------------------------------------------------------------------------ Receivables securitized $1,371.6 $ 902.0 $1,004.0 ------------------------------------------------------------------------------ Six Months ------------------------------------------------------------------------------- Six Months Ended ------------------------------------------------------------------------------- ($ millions) 6/30/01 (1) 6/30/00 (1) % Change ------------------------------------------------------------------------------- Finance and other interest income $ 6,463.6 14.37% $ 5,485.3 14.48% 17.8% Interest expense 2,739.5 6.09 2,365.0 6.24 15.8 -------------------------------------------------------------------------------- Net interest margin 3,724.1 8.28 % 3,120.3 8.24% 19.4 Provision for credit losses 1,867.6 1,560.5 19.7 -------------------------------------------------------------------------------- Net interest margin after provision for credit losses 1,856.5 1,559.8 19.0 -------------------------------------------------------------------------------- Insurance revenue 317.9 266.8 19.2 Investment income 79.6 83.3 (4.4) Fee income 789.5 686.1 15.1 Securitization related revenue (2.9) 67.2 (100+) Other income 211.1 165.2 27.8 ------------------------------------------------------------------------------- Total other revenues 1,395.2 1,268.6 10.0 Operating expenses and policyholders' benefits 1,916.4 1,677.5 14.2 ------------------------------------------------------------------------------- Income before income taxes 1,335.3 1,150.9 16.0 Income taxes 464.5 394.1 17.9 ------------------------------------------------------------------------------- Net income $ 870.8 $ 756.8 15.1 ------------------------------------------------------------------------------- Average managed receivables: Real estate secured $ 38,059.1 $ 29,784.5 27.8 Auto finance 4,815.4 3,398.5 41.7 MasterCard/Visa (2) 17,044.8 15,709.0 8.5 Private label 11,992.1 11,068.1 8.3 Other unsecured 16,529.2 14,019.8 17.9 Commercial and other 574.2 744.8 (22.9) ------------------------------------------------------------------------------- Total 89,014.8 74,724.7 19.1 Average noninsurance investment 474.4 610.5 (22.3) Other interest-earning assets 451.5 428.6 5.3 ------------------------------------------------------------------------------- Average managed interest- earning assets $ 89,940.7 $ 75,763.8 18.7 % ------------------------------------------------------------------------------- Summery of Securitization Related Revenue Six Months Ended --------------------------------------------------------------------------- ($ millions) 6/30/01 6/30/00 -------------------------------------------------------------------------- Gross gains $ 266.3 $ 261.2 Amortization (269.2) (194.0) -------------------------------------------------------------------------- Securitization related revenue (2.9) 67.2 Over-the-life provision on new transactions 200.1 194.3 -------------------------------------------------------------------------- Net effect of securitization activity $ (203.0) $ (127.1) -------------------------------------------------------------------------- Receivables securitized $ 2,273.6 $ 2,476.0 -------------------------------------------------------------------------- Receivables Analysis
End of Period Managed Receivables ------------------------------------------------------------------------------------------------------------------------------ % Change from Prior ------------------ ($ millions) 6/30/01 3/31/01 6/30/00 Qtr. Year ------------------------------------------------------------------------------------------------------------------------------ Real estate secured $ 39,806.5 $ 38,004.8 $ 33,964.7 4.7 % 17.2 % Auto finance 5,159.6 4,800.8 3,850.8 7.5 34.0 MasterCard/Visa 17,043.4 16,570.2 15,887.3 2.9 7.3 Private label 11,980.0 11,875.4 10,951.3 0.9 9.4 Other unsecured 16,991.5 16,548.7 14,597.2 2.7 16.4 Commercial and other 557.5 572.7 693.7 (2.7) (19.6) -------------------------------------------------------------------------------------------------------------------------------- Managed portfolio $ 91,538.5 $ 88,372.6 $ 79,945.0 3.6 % 14.5 % -------------------------------------------------------------------------------------------------------------------------------- Receivables (% of Managed Portfolio) ------------------------------------------------------------------------------------------------------------------------------ Real estate secured 43.5 % 43.0 % 42.5 % Auto finance 5.6 5.4 4.8 MasterCard/Visa 18.6 18.8 19.8 Private label 13.1 13.4 13.7 Other unsecured (1) 18.6 18.7 18.3 Commercial and other .6 .7 .9 ------------------------------------------------------------------------------------------------------------------------------ Total 100.0 % 100.0 % 100.0 % ------------------------------------------------------------------------------------------------------------------------------ End of Period Receivables ($ millions) ------------------------------------------------------------------------------------------------------------------------------ Owned receivables: Real estate secured $ 38,600.7 $ 36,686.8 $ 32,168.5 5.2 % 20.0 % Auto finance 2,039.0 1,988.0 1,753.7 2.6 16.3 MasterCard/Visa 7,915.7 7,448.5 7,013.7 6.3 12.9 Private label 10,330.0 10,225.4 9,801.3 1.0 5.4 Other unsecured 12,311.9 11,884.2 9,947.9 3.6 23.8 Commercial and other 557.5 572.7 693.7 (2.7) (19.6) ------------------------------------------------------------------------------------------------------------------------------ Total owned receivables 71,754.8 68,805.6 61,378.8 4.3 16.9 ------------------------------------------------------------------------------------------------------------------------------ Accrued finance charges 1,418.6 1,322.5 1,093.1 7.3 29.8 Credit loss reserve for owned receivables (2,376.5) (2,282.4) (1,986.5) 4.1 19.6 Unearned credit insurance premiums and claims reserves (832.4) (767.8) (593.7) 8.4 40.2 Amounts due and deferred from receivables sales 2,325.3 2,342.5 2,192.8 (0.7) 6.0 Reserve for receivables serviced with limited recourse (1,080.0) (1,057.8) (961.7) 2.1 12.3 ------------------------------------------------------------------------------------------------------------------------------ Total owned receivables, net 71,209.8 68,362.6 61,122.8 4.2 16.5 ------------------------------------------------------------------------------------------------------------------------------ Receivables serviced with limited recourse: Real estate secured 1,205.8 1,318.0 1,796.2 (8.5) (32.9) Auto finance 3,120.6 2,812.8 2,097.1 10.9 48.8 MasterCard/Visa 9,127.7 9,121.7 8,873.6 0.1 2.9 Private label 1,650.0 1,650.0 1,150.0 - 43.5 Other unsecured 4,679.6 4,664.5 4,649.3 0.3 0.7 ------------------------------------------------------------------------------------------------------------------------------ Total receivables serviced with limited recourse 19,783.7 19,567.0 18,566.2 1.1 6.6 ------------------------------------------------------------------------------------------------------------------------------ Total managed receivables, net $ 90,993.5 $ 87,929.6 $ 79,689.0 3.5 % 14.2 % --------------------------------------------------------------------------------------------------------------------------------
(1) Personal homeowner loans are real estate secured loans that have been underwritten and priced as unsecured loans. Personal homeowner loans are included in the other unsecured line, and comprise 4.9% of Household's total managed portfolio at 06/30/01, 4.7% at 03/31/01, and 3.8% at 06/30/00. Credit Quality / Credit Loss Reserves Two-Months-and-Over Contractual Delinquency ---------------------------------------------------------------------------- As a percent of managed consumer receivables, excludes commercial. 6/30/01 3/31/01 6/30/00 ---------------------------------------------------------------------------- Real estate secured 2.63 % 2.61 % 2.72 % Auto finance 2.09 1.79 1.99 MasterCard/Visa 3.60 3.68 3.14 Private label 5.66 5.50 5.77 Other unsecured 8.43 8.37 7.92 ---------------------------------------------------------------------------- Total 4.27 % 4.25 % 4.16 % ---------------------------------------------------------------------------- Quarter-to-Date Chargeoffs, Net of Recoveries ---------------------------------------------------------------------------- As a percent of average managed consumer receivables, annualized, excludes commercial. ---------------------------------------------------------------------------- Real estate secured .48 % .44 % .47 % Auto finance 4.47 5.15 4.28 MasterCard/Visa 6.82 6.27 5.57 Private label 5.09 5.08 5.43 Other unsecured 6.82 6.27 7.68 ---------------------------------------------------------------------------- Total 3.71 % 3.56 % 3.74 % ---------------------------------------------------------------------------- Nonperforming Assets ---------------------------------------------------------------------------- ($ millions) ---------------------------------------------------------------------------- Nonaccrual managed receivables $ 2,232.5 $ 2,200.6 $ 1,841.8 Accruing managed receivables 90 or more days delinquent 899.9 891.5 753.9 Renegotiated commercial loans 12.3 12.3 12.3 ---------------------------------------------------------------------------- Total nonperforming managed receivables 3,144.7 $ 3,104.4 $ 2,608.0 Real estate owned 365.2 350.2 323.6 ---------------------------------------------------------------------------- Total nonperforming assets $ 3,509.9 $ 3,454.6 $ 2,931.6 ---------------------------------------------------------------------------- Managed credit loss reserves as a percent of nonperforming managed receivables 109.9 % 107.6 % 113.0 % ----------------------------------------------------------------------------
Credit Loss Reserves ------------------------------------------------------------------------------------------------------------------------ ($ millions) 6/30/01 3/31/01 6/30/00 ------------------------------------------------------------------------------------------------------------------------ Reserves for owned receivables at beginning of quarter $ 2,282.4 $ 2,111.9 1,909.7 Provision for credit losses 657.1 703.6 495.6 Chargeoffs, net of recoveries (573.2) (531.5) (474.0) Other, net 10.2 (1.6) 55.2 ----------------------------------------------------------------------------------------------------------------------- Reserves for owned receivables at end of quarter 2,376.5 3.31 %(1) 2,282.4 3.32%(1) 1,986.5 3.24%(1) ------------------------------------------------------------------------------------------------------------------------ Credit loss reserves for receivables serviced with limited recourse at beginning of quarter 1,057.8 1,082.3 951.4 Provision for credit losses 277.7 229.2 248.7 Chargeoffs, net of recoveries (255.9) (248.1) (241.9) Other, net 0.4 (5.6) 3.5 ------------------------------------------------------------------------------------------------------------------------ Credit loss reserves for receivables serviced with limited recourse at end of quarter 1,080.0 5.46 %(1) 1,057.8 5.41%(1) 961.7 5.18%(1) ------------------------------------------------------------------------------------------------------------------------ Total managed credit loss reserves at end of quarter $ 3,456.5 3.78 %(1) $ 3,340.2 3.78%(1) 2,948.2 3.69%(1) ------------------------------------------------------------------------------------------------------------------------
(1) % Columns: comparisons to appropriate receivables.