-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VKfOz3/vv7ZAWTDutBS4bFciW8fqFHoU77gD+N10u8Tf5z46FUe31RrGVXfkZmz4 HNe99cMVcghiW0VvYyTfWA== 0000354964-97-000002.txt : 19970124 0000354964-97-000002.hdr.sgml : 19970124 ACCESSION NUMBER: 0000354964-97-000002 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970123 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970123 SROS: CSX SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOUSEHOLD INTERNATIONAL INC CENTRAL INDEX KEY: 0000354964 STANDARD INDUSTRIAL CLASSIFICATION: PERSONAL CREDIT INSTITUTIONS [6141] IRS NUMBER: 363121988 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08198 FILM NUMBER: 97509672 BUSINESS ADDRESS: STREET 1: 2700 SANDERS RD CITY: PROSPECT HEIGHTS STATE: IL ZIP: 60070 BUSINESS PHONE: 8475645000 MAIL ADDRESS: STREET 1: 2700 SANDERS ROAD CITY: PROSPECT HEIGHTS STATE: IL ZIP: 60070 8-K 1 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report: January 23, 1997 ---------------- HOUSEHOLD INTERNATIONAL, INC. ----------------------------- (Exact name of registrant as specified in its charter) Delaware 1-8198 36-3121988 - -------------------------------------------------------------- (State or other (Commission File (IRS Employer jurisdiction of Number) Identification incorporation Number) 2700 Sanders Road, Prospect Heights, Illinois 60070 - --------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 847/564-5000 ------------ 2 Item 5. Other Events Press release pertaining to the financial results of Household International, Inc., for the quarter and year ended December 31, 1996. Said release is filed as an exhibit hereto. Item 7. Financial Statements and Exhibits (a) Financial statements of businesses acquired. Not applicable. (b) Pro forma financial information. Not applicable. (c) Exhibits. No. Exhibit --- ------- 27 Financial Data Schedule. 99 Press release titled "Household Reports 5th Consecutive Year of 20% or More EPS Growth" dated January 23, 1997 3 SIGNATURE Pursuant to the requirement 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. HOUSEHOLD INTERNATIONAL, INC. ---------------------------- (Registrant) By: /s/ Susan E. Casey ------------------- Susan E. Casey Assistant Secretary Dated: January 23, 1997 ---------------- U:\LAW\EDGAR\I8K197.WP EX-27 2
5 THE FOLLOWING SUMMARY FINANCIAL INFORMATION OF THE COMPANY AND ITS SUBSIDIARIES IS QUALIFIED IN ITS ENTIRETY BY THE DETAILED INFORMATION AND FINANCIAL STATEMENTS PREVIOUSLY FILED WITH THE SECURITIES & EXCHANGE COMMISSION. 1,000 12-MOS DEC-31-1996 DEC-31-1996 239,200 2,282,000 24,067,000 1,596,200 0 0 785,800 432,600 29,594,500 0 14,802,000 115,200 0 205,000 3,001,000 29,594,500 0 5,058,800 0 1,956,300 0 759,600 1,520,600 822,300 283,700 538,600 0 0 0 538,600 5.31 5.30 FINANCIAL STATEMENTS OF THE COMPANY WERE PREPARED IN ACCORDANCE WITH FINANCIAL INSTITUTION INDUSTRY STANDARDS. ACCORDINGLY, THE COMPANY'S BALANCE SHEETS WERE NON-CLASSIFIED.
EX-99 3 1 For Release:Immediately Contact: Craig A. Streem Vice President - Investor Relations 847.564.6053 Celeste M. Murphy Director - Investor Relations 847.564.7568 HOUSEHOLD REPORTS 5TH CONSECUTIVE YEAR OF 20% OR MORE EPS GROWTH FOURTH QUARTER 1996 HIGHLIGHTS: - -- All time record EPS of $1.62, up 26%. - -- Return on shareholders' equity reaches 22%. - -- Core receivables hit $41 billion, up 21%, annualized. Prospect Heights, IL, January 23, 1997 -- Household International (NYSE: HI) today reported all-time record net income and earnings per share for the fourth quarter and year ended December 31, 1996. Quarterly earnings per share of $1.62 was a 26 percent increase from $1.29 for the fourth quarter of 1995. Net income rose 24 percent to an all-time quarterly record of $163.6 million, compared with $132.3 million a year earlier. Full-year net income and earnings per share also reached all-time record levels. Earnings per share of $5.30 rose 23 percent and net income increased 19 percent to $538.6 million. William F. Aldinger, Household's chairman and chief executive officer, said, "1996 was a very good year. It was our fifth consecutive year of earnings per share growth in excess of 20 percent, characterized by core receivable growth of 23 percent, wider margins and improving efficiency. Our efficiency ratio improved to 41 percent, ahead of our target for 1996. Return on assets improved sharply to 1.82 percent from 1.34 percent in 1995, and return on equity climbed to 18.9 percent as we focused on our core businesses." Mr. Aldinger added, "We feel very good about the momentum in our core businesses as we look to 1997. At HFC, our retail branch sales force turned in the best sales numbers we've seen in six years. Led by the signing of the Union Privilege and Barnett Banks partnerships in the U.S., and our joint venture relationships with British Gas and the Automobile Association in the U.K., our credit card receivables were up over 40 percent from a year ago." Household's managed portfolio of core consumer lending products increased 23 percent from a year ago, driven by increases in the credit card and other unsecured portfolios. Core consumer receivables were up 21 percent, annualized, in the quarter. The company's managed net interest margin in the fourth quarter was 7.31 percent, up from 6.69 percent a year ago and 7.03 percent in the third quarter. The wider margin from a year ago primarily reflects the continuing shift in portfolio mix toward unsecured loans and improved pricing. Operating expenses totaled $419 million in the fourth quarter, 14 percent over $368 million in the year ago quarter. The majority of the increase was due to higher marketing expenses for the credit card portfolio. For the year, the company's normalized managed efficiency ratio improved to 41 percent from the 1995 level of 46 percent. At December 31, two-months-and-over consumer delinquency was 4.15 percent of managed consumer receivables, compared with 3.83 percent at the end of the prior quarter and 3.46 percent a year ago. Annualized net chargeoffs were 3.59 percent of average managed consumer receivables for the quarter, compared to 3.52 percent in the prior quarter and up from 3.28 percent in the year ago quarter. Bankruptcies continued to be a significant factor in the current level of chargeoffs. The full-year consumer chargeoff ratio increased from 2.95 percent in 1995 to 3.35 percent in 1996. The increases were within expectations and consistent with the company's outlook given overall industry conditions. 2 The company increased credit loss reserves by $68 million during the quarter and $419 million during the full year 1996. The ratio of reserves to managed receivables reached 3.75 percent at year end compared to 3.22 percent a year ago. Total reserves to total nonperforming loans were 119 percent, compared to 111 percent a year ago. The increase in reserves reflected continuing uncertainty about consumer credit performance and the changing mix in the portfolio to more unsecured loans. Household International, through its subsidiaries, is a leading provider of consumer financial services, primarily consumer lending and credit card products, in the United States, Canada and the United Kingdom. HFC, one of Household's core businesses, is the oldest consumer finance company in the United States. Additionally, Household is also one of the largest issuers of private-label and general purpose credit cards in the U.S. Its principal card products include the GM Card and the AFL-CIO's Union Privilege card. # # # 3 December 31, 1996
Quarterly Financial Highlights - ------------------------------------------------------------------------------------------------------------------- Summary Managed Income Statement Three Months Ended: % Change from Prior: ($ millions) 12/31/96 9/30/96 12/31/95 Qtr. Year - ------------------------------------------------------------------------------------------------------------------- Managed-basis interest margin and other revenues $1,108.4 $1,044.8 $1,023.8 6.1% 8.3% Managed-basis provision for credit losses 440.5 414.5 404.2 6.3 9.0 Operating expenses 419.1 416.7 367.9 0.6 13.9 Income taxes 85.2 73.7 119.4 15.6 (28.6) - ------------------------------------------------------------------------------------------------------------------- Net Income $ 163.6 $ 139.9 $ 132.3 16.9% 23.7% =================================================================================================================== Common Stock Data - ------------------------------------------------------------------------------------------------------------------- Earnings per common share $ 1.62 $ 1.38 $ 1.29 17.4% 25.6% Average common and equivalent shares (millions) 98.4 98.2 99.5 0.2 (1.1) Common stock price High $ 98.13 $ 83.88 $ 68.38 17.0 43.5 Low 82.50 68.50 54.25 20.4 52.1 Period end 92.25 82.25 59.50 12.2 55.0 Common shares outstanding at period end (millions) 97.1 96.9 97.2 0.2 (0.1) Dividends declared per common share $ 0.39 $ 0.39 $ 0.34 0.0 14.7 Book value per common share 30.30 28.73 27.70 5.5 9.4 =================================================================================================================== Key Ratios - ------------------------------------------------------------------------------------------------------------------- Return on average common shareholders' equity 22.2% 19.8% 19.6% 12.1% 13.3% Return on average owned assets 2.13 1.87 1.78 13.9 19.7 Return on average managed assets 1.36 1.19 1.24 14.3 9.7 Managed efficiency ratio, normalized 38.8 39.9 38.8 (2.8) 0.0 Managed net interest margin 7.3 7.0 6.7 4.3 9.0 Total shareholders' equity as a percent of managed assets 6.90 6.69 6.74 3.1 2.4 =================================================================================================================== Full Year Financial Highlights - ------------------------------------------------------------------------------------------------------------------- Summary Managed Income Statement Twelve Months Ended: % Change from ($ millions) 12/31/96 12/31/95 Prior Year - ------------------------------------------------------------------------------------------------------------------- Managed-basis interest margin and other revenues $4,190.5 $3,622.6 15.7% Managed-basis provision for credit losses 1,641.0 1,271.1 29.1 Operating expenses 1,727.2 1,597.8 8.1 Income taxes 283.7 300.5 (5.6) - ------------------------------------------------------------------------------------------------------------------- Net Income $ 538.6 $ 453.2 18.8% =================================================================================================================== Common Stock Data - ------------------------------------------------------------------------------------------------------------------- Earnings per common share $ 5.30 $ 4.30 23.3% Average common and equivalent shares (millions) 98.5 99.3 (0.8) Common stock price High 98.13 68.38 43.5 Low 52.00 35.88 44.9 Dividends declared per common share 1.46 1.31 11.5 =================================================================================================================== Key Ratios - ------------------------------------------------------------------------------------------------------------------- Return on average common shareholders' equity 18.9% 17.4% 8.6% Return on average owned assets 1.82 1.34 35.8 Return on average managed assets 1.17 0.98 19.4 Managed efficiency ratio, normalized 40.8 46.0 (11.3) Managed net interest margin 7.0 6.4 9.4 =================================================================================================================== To aid analysis, interest margin and 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 portfolio. Policyholders' benefits have been netted against other revenues. Includes managed-basis net chargeoffs of $377.1 million in the fourth quarter of 1996, $348.4 million in the third quarter of 1996 and $298.2 million in the fourth quarter of 1995. Includes managed-basis net chargeoffs of $1,299.8 million in 1996 and $1,052.9 million in 1995. Excluding nonrecurring gains, net managed revenues increased 14 percent over last year's fourth quarter.
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Consolidated Statements of Income - Owned Basis - ----------------------------------------------------------------------------------------------------------------- Three Months Ended: % Change from Prior: ($ millions) 12/31/96 9/30/96 12/31/95 Qtr. Year - ----------------------------------------------------------------------------------------------------------------- Finance income $813.5 $755.6 $731.3 7.7% 11.2% Interest income from noninsurance investment securities 9.2 12.1 18.5 (24.0) (50.3) Interest expense 398.8 384.7 375.5 3.7 6.2 - ----------------------------------------------------------------------------------------------------------------- Net interest margin 423.9 383.0 374.3 10.7 13.3 Provision for credit losses on owned receivables 222.3 169.5 191.6 31.2 16.0 - ----------------------------------------------------------------------------------------------------------------- Net interest margin after provision for credit losses 201.6 213.5 182.7 (5.6) 10.3 - ----------------------------------------------------------------------------------------------------------------- Securitization income 307.1 282.0 240.2 8.9 27.9 Insurance premiums and contract revenues 67.5 63.6 59.9 6.1 12.7 Investment income 25.2 34.8 46.9 (27.6) (46.3) Fee income 75.0 62.1 57.3 20.8 30.9 Other income 37.0 31.5 90.5 17.5 (59.1) - ----------------------------------------------------------------------------------------------------------------- Total other revenues 511.8 474.0 494.8 8.0 3.4 - ----------------------------------------------------------------------------------------------------------------- Salaries and fringe benefits 142.2 131.4 124.7 8.2 14.0 Occupancy and equipment expense 46.2 48.3 52.0 (4.3) (11.2) Other marketing expenses 123.6 132.3 91.4 (6.6) 35.2 Other servicing and administrative expenses 107.1 104.7 99.8 2.3 7.3 Policyholders' benefits 45.5 57.2 57.9 (20.5) (21.4) - ----------------------------------------------------------------------------------------------------------------- Total costs and expenses 464.6 473.9 425.8 (2.0) 9.1 - ----------------------------------------------------------------------------------------------------------------- Income before income taxes 248.8 213.6 251.7 16.5 (1.2) Income taxes 85.2 73.7 119.4 15.6 (28.6) - ----------------------------------------------------------------------------------------------------------------- Net Income 163.6 139.9 132.3 16.9 23.7 - ----------------------------------------------------------------------------------------------------------------- Preferred dividends (4.2) (4.2) (4.2) 0.0 0.0 - ----------------------------------------------------------------------------------------------------------------- Earnings available to common shareholders $159.4 $135.7 $128.1 17.5% 24.4% ================================================================================================================= Effective tax rate 34.2% 34.5% 47.4% (0.9)% (27.8)% - ----------------------------------------------------------------------------------------------------------------- Income before income taxes for the quarter ended December 31, 1995 includes the gain on the sale of the company's individual life insurance business. The gain was substantially offset by income taxes. Excluding the effect of the gain, income before income taxes increased 23 percent from 1995 to 1996.
Balance Sheet Data - ----------------------------------------------------------------- ($ millions) 12/31/96 12/31/95 - ----------------------------------------------------------------- Owned assets $29,594.5 $29,218.8 Managed assets 48,120.9 44,103.4 Managed receivables 42,593.4 36,616.7 Debt 23,595.2 22,596.1 Trust originated preferred securities 175.0 75.0 Preferred stock 205.0 205.0 Common shareholders' equity 2,941.2 2,690.9 =================================================================
5 Consolidated Statements of Income - Managed Basis - ------------------------------------------------- Securitizations and sales of consumer receivables are an important source of liquidity and capital management for the company. The company continues to service the securitized receivables after such receivables are sold, and retains a limited recourse obligation. Securitizations impact the classification of revenues and expenses in the income statement. Net interest margin, non-interest income such as interchange fee income and provision for credit losses related to receivables sold are reported net in securitization income. Pro Forma Managed Adjustments - ----------------------------- To aid in analysis, the following table shows the pro forma impact on income statement classifications assuming the receivables securitized and sold were instead held in portfolio. This pro forma analysis does not adjust the results to reflect the differences between the company's accounting policies for receivables held in portfolio and receivables sold and serviced with limited recourse. Accordingly, net income on a pro forma managed basis equals net income on a historical owned basis.
Quarter Ended 12/31/96 ($ millions) As Reported Adjustments Managed - --------------------------------------------------------------------------------------------- Net interest margin $ 423.9 $ 370.7 $ 794.6 Provision for credit losses 222.3 218.2 440.5 - --------------------------------------------------------------------------------------------- Net interest margin after provision for credit losses 201.6 152.5 354.1 - --------------------------------------------------------------------------------------------- Securitization income 307.1 (307.1) 0.0 Insurance premiums and contract revenues 67.5 0.0 67.5 Investment income 25.2 0.0 25.2 Fee income 75.0 154.6 229.6 Other income 37.0 0.0 37.0 - --------------------------------------------------------------------------------------------- Total other revenues 511.8 (152.5) 359.3 - --------------------------------------------------------------------------------------------- Total costs and expenses 464.6 0.0 464.6 - --------------------------------------------------------------------------------------------- Income before income taxes 248.8 (0.0) 248.8 Income taxes 85.2 0.0 85.2 - --------------------------------------------------------------------------------------------- Net income $163.6 $ (0.0) $ 163.6 =============================================================================================
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Managed Basis - ----------------------------------------------------------------------------------------------------------------------- Three months ended: % Change from Prior: ($ millions) 12/31/96 9/30/96 12/31/95 Qtr. Year - ----------------------------------------------------------------------------------------------------------------------- Finance income $ 1,444.1 13.5% $ 1,360.1 13.3% $ 1,177.7 13.4% 6.2% 22.6% Interest income from noninsurance investment securities 9.2 5.6 12.1 5.8 18.5 5.2 (24.0) (50.3) Interest expense 658.7 6.1 639.2 6.1 582.5 6.4 3.1 13.1 - ----------------------------------------------------------------------------------------------------------------------- Net interest margin 794.6 7.3% 733.0 7.0% 613.7 6.7% 8.4 29.5 Provision for credit losses 440.5 414.5 404.2 6.3 9.0 - ----------------------------------------------------------------------------------------------------------------------- Net interest margin after provision for credit losses 354.1 318.5 209.5 11.2 69.0 - ----------------------------------------------------------------------------------------------------------------------- Insurance premiums and contract revenues 67.5 63.6 59.9 6.1 12.7 Investment income 25.2 34.8 46.9 (27.6) (46.3) Fee income 229.6 239.1 270.7 (4.0) (15.2) Other income 37.0 31.5 90.5 17.5 (59.1) - ----------------------------------------------------------------------------------------------------------------------- Total other revenues 359.3 369.0 468.0 (2.6) (23.2) - ----------------------------------------------------------------------------------------------------------------------- Total costs and expenses 464.6 473.9 425.8 (2.0) 9.1 - ----------------------------------------------------------------------------------------------------------------------- Income before income taxes 248.8 213.6 251.7 16.5 (1.2) Income taxes 85.2 73.7 119.4 15.6 (28.6) - ----------------------------------------------------------------------------------------------------------------------- Net income $ 163.6 $ 139.9 $ 132.3 16.9% 23.7% ======================================================================================================================= Average managed receivables Home equity $ 8,453.9 $ 8,534.5 $ 8,743.1 (0.9)% (3.3)% Visa/MasterCard 18,044.1 16,958.2 12,234.4 6.4 47.5 Private label 5,292.8 4,904.0 4,328.2 7.9 22.3 Other unsecured 8,658.8 7,718.9 6,465.6 12.2 33.9 - ----------------------------------------------------------------------------------------------------------------------- Core products 40,449.6 38,115.6 31,771.3 6.1 27.3 - ----------------------------------------------------------------------------------------------------------------------- First mortgage 1,375.6 1,695.4 2,117.4 (18.9) (35.0) Commercial 1,001.3 1,085.6 1,369.2 (7.8) (26.9) - ----------------------------------------------------------------------------------------------------------------------- Total 42,826.5 40,896.6 35,257.9 4.7 21.5 Average noninsurance investments 659.0 829.3 1,420.3 (20.5) (53.6) - ----------------------------------------------------------------------------------------------------------------------- Average managed interest-earning assets $43,485.5 $41,725.9 $36,678.2 4.2% 18.6% ======================================================================================================================= % Columns: comparison to appropriate earning assets, annualized. Visa and MasterCard are registered trademarks of VISA USA Inc. and MasterCard International, Incorporated, respectively.
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Receivables Analysis - ----------------------------------------------------------------------------------------------------------------------- % Change from Prior: Managed Portfolio ($ millions) 12/31/96 9/30/96 12/31/95 Qtr. Year - ----------------------------------------------------------------------------------------------------------------------- The combination of receivables owned and receivables which have been sold to public and private investors with limited recourse. Home equity $ 7,985.4 $ 8,623.6 $ 8,810.1 (7.4)% (9.4)% Visa/MasterCard 18,737.4 16,947.5 13,343.1 10.6 40.4 Private label 5,587.0 5,048.1 4,446.2 10.7 25.7 Other unsecured 8,620.2 8,258.8 6,660.8 4.4 29.4 - ----------------------------------------------------------------------------------------------------------------------- Core products 40,930.0 38,878.0 33,260.2 5.3 23.1 - ----------------------------------------------------------------------------------------------------------------------- First mortgage 725.6 1,652.9 2,066.9 (56.1) (64.9) Commercial 937.8 1,045.3 1,289.6 (10.3) (27.3) - ----------------------------------------------------------------------------------------------------------------------- Managed portfolio $42,593.4 $41,576.2 $36,616.7 2.4% 16.3% ======================================================================================================================= Receivables (% of Managed Portfolio) - ----------------------------------------------------------------------------------------------------------------------- Home equity 18.7% 20.7% 24.1% Visa/MasterCard 44.0 40.8 36.4 Private label 13.1 12.1 12.1 Other unsecured 20.3 19.9 18.2 - ----------------------------------------------------------------------------------------------------------------------- Core products 96.1 93.5 90.8 - ----------------------------------------------------------------------------------------------------------------------- First mortgage 1.7 4.0 5.7 Commercial 2.2 2.5 3.5 - ----------------------------------------------------------------------------------------------------------------------- Total 100.0% 100.0% 100.0% ======================================================================================================================= Receivables ($ millions) - ----------------------------------------------------------------------------------------------------------------------- First mortgage $ 725.6 $ 1,652.9 $ 2,066.9 (56.1)% (64.9)% Home equity 3,647.9 4,662.0 4,148.2 (21.8) (12.1) Visa/MasterCard 8,587.7 7,702.2 5,512.0 11.5 55.8 Private label 5,070.0 4,443.7 3,696.2 14.1 37.2 Other unsecured 5,098.0 4,631.3 5,019.2 10.1 1.6 Commercial 937.8 1,045.3 1,289.6 (10.3) (27.3) - ----------------------------------------------------------------------------------------------------------------------- Total owned receivables 24,067.0 24,137.4 21,732.1 (0.3) 10.7 - ----------------------------------------------------------------------------------------------------------------------- Accrued finance charges 397.6 392.6 381.6 1.3 4.2 Credit loss reserve for owned receivables (900.2) (862.5) (720.4) 4.4 25.0 Unearned credit insurance premiums and claims reserves (184.6) (169.6) (159.9) 8.8 15.4 Amounts due and deferred from consumer receivable sales 1,561.0 1,529.4 1,067.7 2.1 46.2 Reserve for receivables serviced with limited recourse (696.0) (665.4) (457.0) 4.6 52.3 - ----------------------------------------------------------------------------------------------------------------------- Total owned receivables, net 24,244.8 24,361.9 21,844.1 (0.5) 11.0 - ----------------------------------------------------------------------------------------------------------------------- Receivables serviced with limited recourse: Home equity 4,337.5 3,961.6 4,661.9 9.5 (7.0) Visa/MasterCard 10,149.7 9,245.3 7,831.1 9.8 29.6 Private label 517.0 604.4 750.0 (14.5) (31.1) Other unsecured 3,522.2 3,627.5 1,641.6 (2.9) +100.0 - ----------------------------------------------------------------------------------------------------------------------- Total receivables serviced with limited recourse 18,526.4 17,438.8 14,884.6 6.2 24.5 - ----------------------------------------------------------------------------------------------------------------------- Total managed receivables, net $42,771.2 $41,800.7 $36,728.7 2.3% 16.5% ======================================================================================================================= 8
Credit Quality/Credit Loss Reserves - ----------------------------------------------------------------------------------------------------------------- ($ millions) 12/31/96 9/30/96 12/31/95 - ----------------------------------------------------------------------------------------------------------------- Two-Months-and-Over Contractual Delinquency As a percent of managed consumer receivables, excludes commercial. - ----------------------------------------------------------------------------------------------------------------- First mortgage 9.49% 3.82% 3.29% Home equity 3.96 3.55 3.24 Visa/MasterCard 2.71 2.54 2.22 Private label 5.50 5.43 4.51 Other unsecured 6.13 5.79 5.60 - ----------------------------------------------------------------------------------------------------------------- Total 4.15% 3.83% 3.46% ================================================================================================================= Quarter-to-Date Chargeoffs, Net of Recoveries As a percent of average managed consumer receivables, annualized, excludes commercial. - ----------------------------------------------------------------------------------------------------------------- First mortgage 0.30% 0.50% 0.47% Home equity 1.18 0.98 0.95 Visa/MasterCard 4.66 4.71 4.67 Private label 3.70 3.54 5.14 Other unsecured 4.18 4.35 3.46 - ----------------------------------------------------------------------------------------------------------------- Total 3.59% 3.52% 3.28% ================================================================================================================= Nonperforming Assets - ----------------------------------------------------------------------------------------------------------------- Nonaccrual managed receivables $ 772.5 $ 741.1 $ 768.5 Accruing managed receivables 90 or more days delinquent 555.0 446.1 267.2 Renegotiated commercial loans 12.9 19.9 21.2 - ----------------------------------------------------------------------------------------------------------------- Total nonperforming managed receivables 1,340.4 1,207.1 1,056.9 Real estate owned 136.6 137.6 136.5 - ----------------------------------------------------------------------------------------------------------------- Total nonperforming assets $1,477.0 $1,344.7 $1,193.4 ================================================================================================================= Managed credit loss reserves as a percent of nonperforming managed receivables 119.1% 126.6% 111.4% - ----------------------------------------------------------------------------------------------------------------- Credit Loss Reserves - ----------------------------------------------------------------------------------------------------------------- Reserves for owned receivables at beginning of quarter $ 862.5 $ 858.3 $ 667.8 Provision for credit losses - owned 222.3 169.5 191.6 Owned receivables - chargeoffs, net of recoveries (188.1) (176.6) (193.6) Purchased reserves, net 3.5 11.3 54.6 - ----------------------------------------------------------------------------------------------------------------- Reserves for owned receivables at end of quarter 900.2 862.5 720.4 - ----------------------------------------------------------------------------------------------------------------- Credit loss reserves for receivables serviced with limited recourse at beginning of quarter 665.4 592.8 349.2 Provision for credit losses 218.2 245.0 212.6 Chargeoffs, net of recoveries (189.0) (171.8) (104.6) Other, net 1.4 (0.6) (0.2) - ----------------------------------------------------------------------------------------------------------------- Credit loss reserves for receivables serviced with limited recourse at end of quarter 696.0 665.4 457.0 - ----------------------------------------------------------------------------------------------------------------- Total credit loss reserves at end of quarter $1,596.2 $1,527.9 $1,177.4 ================================================================================================================= Credit loss reserves Owned $ 900.2 3.74% $ 862.5 3.57% $ 720.4 3.31% Serviced with limited recourse 696.0 3.76 665.4 3.82 457.0 3.07 - ----------------------------------------------------------------------------------------------------------------- Total managed credit loss reserves $1,596.2 3.75 % $1,527.9 3.67% $1,177.4 3.22% ================================================================================================================= % Columns: comparisons to appropriate receivables.
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