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
April 19, 1994
Date of Report ........................................................
(Date of earliest event reported)
CHRYSLER FINANCIAL CORPORATION
.......................................................................
(Exact name of registrant as specified in its charter)
State of Michigan 1-5966 38-0961430
......................................................................
(State or other jurisdiction (Commission) (IRS Employer
of incorporation) File No.) Identification No.)
27777 Franklin Rd., Southfield, Michigan 48034
..............................................
(Address of principal executive offices)
(810) 948-3060
Registrant's telephone number, including area code....................
<PAGE>
Item 5. Other Events.
On April 19, 1994, the registrant released its financial
statements for three months ended March 31, 1994. A copy of such
financial statements and review report by independent public
accountants is annexed as Exhibit 99 to this Report and by this
reference incorporated herein and made a part hereof.
Deloitte & Touche, the Company's independent public accountants,
performed a review of the financial statements for the three months
ended March 31, 1994 in accordance with the standards for such review
established by the American Institute of Certified Public Accountants.
The review did not constitute an audit, and accordingly, Deloitte &
Touche did not express an opinion on the aforementioned data. Based
on their review, Deloitte & Touche was not aware of any material
modifications that should have been made to the consolidated financial
statements for them to be in conformity with generally accepted
accounting principles.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
Listed below are the financial statements, pro forma financial
information and exhibits, if any, filed as a part of this Report:
(a) Financial statements of businesses acquired;
None
(b) Pro forma financial information:
None
(c) Exhibits:
15 Letter re unaudited interim financial information.
99 Copy of financial statements of Chrysler Financial
Corporation for the quarter ended March 31, 1994.
<PAGE>
SIGNATURES
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.
CHRYSLER FINANCIAL CORPORATION
Date: April 19, 1994 By:/s/Robert A. Link
------------------
Robert A. Link
Secretary
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
No. Description of Exhibit
- ------- ----------------------
Exhibit
15 Letter re unaudited interim financial information.
99 Copy of financial statements of Chrysler Financial
Corporation for the three months ended March 31, 1994.
EXHIBIT 15
April 19, 1994
Chrysler Financial Corporation
27777 Franklin Road
Southfield, Michigan
We have made a review, in accordance with standards established by the
American Institute of Certified Public Accountants, of the unaudited
interim financial information of Chrysler Financial Corporation and
consolidated subsidiaries for the periods ended March 31, 1994 and
1993, as indicated in our report dated April 19, 1994; because we did
not perform an audit, we expressed no opinion on that information.
We are aware that our report referred to above, which is included in
your Form 8-K for the quarter ended March 31, 1994, is incorporated by
reference in Registration Statement No. 33-50285 on Form S-3 and
Registration Statement No. 33-52421 on Form S-3.
We also are aware that the aforementioned report, pursuant to Rule
436(c) under the Securities Act of 1933, is not considered a part of
the Registration Statement prepared or certified by an accountant or a
report prepared or certified by an accountant within the meaning of
Sections 7 and 11 of that Act.
/s/ Deloitte & Touche
Detroit, Michigan
EXHIBIT 99
CONTACT: J.R. Ferry
FOR IMMEDIATE RELEASE
---------------------
SOUTHFIELD, Mich., April 19 -- Chrysler Financial Corporation (CFC)
today reported 1994 first quarter net earnings of $47 million, compared to
earnings of $37 million, before the effect of accounting changes, in
the first quarter of 1993.
John P. Tierney, Chairman of CFC, said the 1994 first quarter net
earnings increase was due to a larger automotive financing portfolio.
At March 31, 1994, CFC was managing $29.8 billion in receivables, up
$2.5 billion from a year ago. The increase in receivables managed was
caused by a higher volume of automotive financing. The company's total
assets at March 31, 1994, were $15.4 billion, down $1.0 billion from a year
ago.
Chrysler Credit, CFC's automotive finance subsidiary, had receivables
managed of $26.7 billion at March 31, 1994, compared to $23.6 billion a
year ago.
During the first quarter of 1994, Chrysler Credit's automotive
financing volume was 137,000 new passenger cars, trucks and minivans
representing 24 percent of Chrysler's U.S. retail deliveries, compared to
111,000 vehicles, or 23 percent in the first quarter of 1993.
In the first quarter of 1994, Chrysler Credit also financed at
wholesale 423,000 vehicles representing 71 percent of Chrysler's U.S.
factory shipments, compared to 377,000 vehicles or 71 percent in the first
quarter of 1993.
(more)
(594)
<PAGE>
- 2 -
CFC's nonautomotive operations, consisting of Chrysler Capital, a
commercial leasing and lending unit, and Chrysler First Business Credit, a
small business loan operation, were managing $3.1 billion in receivables at
March 31, 1994. A year ago, the company's nonautomotive operations were
managing $3.7 billion in receivables.
Chrysler Insurance, the company's property, casualty and inventory
insurance subsidiary, had direct insurance premiums written of $37 million
during the first quarter of 1994, compared to $34 million for the same
period a year ago.
In 1994 first quarter capital markets activity, CFC received
net proceeds of $1.7 billion from the sale of U.S. and Canadian
automotive receivables, issued $250 million of 5 5/8% notes due
in 1999, and sold $370 million of medium term notes.
During the first quarter, Duff & Phelps raised the company's
senior debt to BBB+ from BBB; the Canadian rating agency DBRS
raised Chrysler Credit Canada's commercial paper to R1 (low) from
R2 (mid), and raised senior debt to A (low) from BBB; and
Standard & Poors placed CFC's debt securities on rating watch
with positive implications. At the end of the first quarter, CFC
had commercial paper outstanding of $3.1 billion compared to $1.5
billion a year ago.
Shortly after the close of the quarter, CFC began the
process of negotiating the replacement of its major credit line
facilities with U.S. and foreign banks.
- 0 -
<PAGE>
<TABLE>
<CAPTION>
Highlights Chrysler Financial Corporation and Subsidiaries
(in millions of dollars)
Three Months Ended
March 31,
1994 1993
(unaudited)
<S> <C> <C>
After-Tax Earnings:
Earnings before changes in accounting principles $ 47 $ 37
Cumulative effect of accounting changes - (30)
Net earnings $ 47 $ 7
Automotive Financing Volume:
Retail $ 3,971 $ 2,890
Wholesale and other 13,092 11,208
Total automotive financing volume $17,063 $14,098
<CAPTION>
_____________________________________________________________________________
March 31,
1994 1993
(unaudited)
<S> <C> <C>
Finance Receivables Managed:
(Including Receivables Serviced for Others)
Automotive financing:
Retail $16,914 $14,148
Wholesale and other 9,751 9,417
Total automotive financing 26,665 23,565
Nonautomotive financing 3,113 3,747
Total finance receivables managed $29,778 $27,312
Debt Payable Within One Year $ 4,222 $ 2,979
Senior Debt Payable After One Year $ 5,081 $ 6,662
Capital Funds:
Subordinated term debt payable after one year $ 27 $ 482
Shareholder's investment 3,176 3,005
Total capital funds $ 3,203 $ 3,487
<FN>
Prior period reclassified to conform to current classifications.
See Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Chrysler Financial Corporation and Subsidiaries
Consolidated Statement of Net Earnings
(in millions of dollars)
Three Months Ended
March 31,
1994 1993
(unaudited)
<S> <C> <C>
Interest income:
Automotive financing:
Retail $ 137 $ 131
Wholesale and other 118 122
Nonautomotive financing 76 115
Total interest income 331 368
Interest expense 185 219
Interest margin 146 149
Other revenues:
Servicing fee income 61 51
Insurance premiums earned 34 33
Investment and other income 58 59
Interest margin and other revenues 299 292
Costs and expenses:
Operating expenses 118 115
Provision for credit losses 47 46
Insurance losses and adjustment expenses 26 27
Depreciation and other expenses 33 54
Total costs and expenses 224 242
Earnings before income taxes and cumulative
effect of changes in accounting principles 75 50
Provision for income taxes 28 13
Earnings before cumulative effect of
changes in accounting principles 47 37
Cumulative effect of changes in
accounting principles (Note 4) - (30)
Net Earnings $ 47 $ 7
<CAPTION>
Consolidated Statement of Three Months Ended
Shareholder's Investment March 31,
(in millions of dollars) 1994 1993
(unaudited)
<S> <C> <C>
Balance at beginning of period (Note 4) $3,131 $2,998
Net earnings 47 7
Net unrealized holding losses on securities (Note 4) (2) -
Balance at end of period $3,176 $3,005
<FN>
Prior period reclassified to conform to current classifications.
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION> Chrysler Financial Corporation and Subsidiaries
Consolidated Balance Sheet
(in millions of dollars)
March 31, December 31, March 31,
Assets: 1994 1993 1993
(unaudited) (unaudited)
<S> <C> <C> <C>
Finance receivables - net (Note 1) $ 8,976 $ 8,659 $10,002
Retained interest in sold receivables
and other related amounts (Note 1) 4,541 3,738 3,952
Total finance receivables and
retained interests - net 13,517 12,397 13,954
Cash and cash equivalents 200 265 433
Marketable securities (Note 4) 354 348 341
Dealership properties leased - net 415 423 447
Equipment leased to others - net 135 176 360
Repossessed collateral 265 269 245
Other assets 496 524 547
Total Assets $15,382 $14,402 $16,327
Liabilities:
Debt (Note 3) $ 9,330 $ 8,435 $10,123
Accounts payable, accrued
expenses and other 1,315 1,298 1,346
Amounts due to affiliated companies 38 24 366
Deferred income taxes 1,523 1,514 1,487
Total Liabilities 12,206 11,271 13,322
Shareholder's Investment 3,176 3,131 3,005
Total Liabilities and
Shareholder's Investment $15,382 $14,402 $16,327
<FN>
Prior periods reclassified to conform to current classifications.
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Chrysler Financial Corporation and Subsidiaries
Consolidated Statement of Cash Flows
(in millions of dollars)
Three Months Ended
March 31,
1994 1993
(unaudited)
<S> <C> <C>
Cash Flows From Operating Activities:
Net earnings $ 47 $ 7
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Cumulative effect of changes in accounting principles - 30
Net gains from receivable sales (28) (22)
Provision for credit losses 47 46
Depreciation and amortization of intangibles 20 34
Change in deferred income taxes and income
taxes payable 9 10
Change in accounts payable, accrued
expenses and other 26 (67)
Net cash provided by operating activities 121 38
Cash Flows From Investing Activities:
Acquisitions of finance receivables (16,088) (14,035)
Collections of finance receivables 3,960 4,663
Proceeds from sales of receivables 10,959 8,159
Proceeds from sales of nonautomotive assets - 2,267
Other 87 179
Net cash (used in) provided by investing activities (1,082) 1,233
Cash Flows From Financing Activities:
Change in short-term notes and affiliated borrowings 307 1,467
Borrowings under revolving credit facilities:
Proceeds - 1,918
Payments - (4,342)
Proceeds from issuance of term debt 769 -
Repayment of term debt (249) (273)
Other 69 (41)
Net cash provided by (used in) financing activities 896 (1,271)
Change in cash and cash equivalents (65) -
Cash and cash equivalents at beginning of period 265 433
Cash and Cash Equivalents at End of Period $ 200 $ 433
<FN>
Prior period reclassified to conform to current classifications.
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1 - Finance Receivables and Retained Interests
Outstanding balances of "Finance receivables - net" were as follows:
<TABLE>
<CAPTION>
March 31, December 31, March 31,
1994 1993 1993
(unaudited) (unaudited)
(in millions of dollars)
<S> <C> <C> <C>
Automotive:
Retail $ 3,806 $ 3,536 $ 3,933
Wholesale and other 2,665 2,520 3,101
Total automotive 6,471 6,056 7,034
Nonautomotive 2,716 2,803 3,183
Total finance receivables 9,187 8,859 10,217
Less allowance for credit losses (211) (200) (215)
Total finance receivables - net $ 8,976 $ 8,659 $10,002
</TABLE>
The Company's retained interests in sold receivables and other related
amounts are generally restricted and subject to limited recourse provisions.
The following is a summary of amounts included in "Retained interests in
sold receivables and other related amounts - net":
<TABLE>
<CAPTION>
March 31, December 31, March 31,
1994 1993 1993
(unaudited) (unaudited)
(in millions of dollars)
<S> <C> <C> <C>
Cash and investments $ 531 $ 586 $ 512
Senior interests in wholesale
receivables 1,673 967 1,175
Subordinated interests in
receivables 1,932 1,783 1,798
Excess servicing 195 200 181
Other restricted and securitized
assets 510 496 526
Less allowance for credit losses (300) (294) (240)
Total retained interests in sold
receivables and other related
amounts - net $ 4,541 $ 3,738 $ 3,952
</TABLE>
<PAGE>
Chrysler Financial Corporation and Subsidiaries
The Company's total allowance for credit losses including receivables sold
subject to limited recourse is as follows:
<TABLE>
<CAPTION>
March 31, December 31, March 31,
1994 1993 1993
(unaudited) (unaudited)
(in millions of dollars)
<S> <C> <C> <C>
Allowance for losses deducted from:
Finance receivables $ 211 $ 200 $ 215
Retained interests in sold
receivables and other
related amounts 300 294 240
Total $ 511 $ 494 $ 455
</TABLE>
Note 2 - Sales of Receivables
The Company sells receivables subject to limited recourse provisions.
Outstanding balances of sold finance receivables are as follows:
<TABLE>
<CAPTION>
March 31, December 31, March 31,
1994 1993 1993
(unaudited) (unaudited)
(in millions of dollars)
<S> <C> <C> <C>
Automotive:
Retail $12,205 $12,027 $10,034
Wholesale and other 7,052 6,356 6,291
Nonautomotive 398 449 565
Total $19,655 $18,832 $16,890
</TABLE>
Gains or losses from the sale of retail receivables are recognized in
the period in which such sales occur. Provisions for expected credit
losses are generally provided during the period in which such
receivables are acquired. Since the allowance for credit losses is
separately provided prior to the receivable sales, gains from
receivable sales are not reduced for expected credit losses.
Included in "Investment and other income" are gains before expected
credit losses totaling $28 million and $22 million for the three
months ended March 31, 1994 and 1993, respectively. The provision
for credit losses related to such sales amounted to $31 million, and
$29 million for the three months ended March 31, 1994 and 1993,
respectively.
<PAGE>
Chrysler Financial Corporation and Subsidiaries
Note 3 - Debt
<TABLE>
<CAPTION>
Weighted Average
Interest Rates at March 31, December 31, March 31,
Maturity March 31, 1994 1994 1993 1993
- -------- ----------------- --------- ------------ ---------
(unaudited) (unaudited)
(in millions of dollars)
<S> <C> <C> <C> <C>
Short-term notes placed primarily
in the open market:
United States $ 2,598 $ 2,513 $ 1,452
Canada 481 259 9
Total short-term notes
(primarily commercial paper) 3,079 2,772 1,461
Revolving bank borrowings under
credit facilities:
United States - - 3,125
Canada - - 375
Total bank borrowings - - 3,500
Senior term debt:
United States, due
1993 - - 576
1994 8.7% 615 813 1,012
1995 5.4% 574 574 142
1996 5.3% 1,092 1,053 343
1997 4.9% 485 197 98
1998 6.0% 735 696 -
Thereafter 8.4% 2,169 1,766 1,898
Total United States 5,670 5,099 4,069
Canada, due 1993-1996 12.3% 41 42 149
Less unamortized discount 3 2 -
Total senior term debt 5,708 5,139 4,218
Subordinated term debt - United States
Senior due 1995 8.3% 27 77 367
Junior subordinated - - 165
Total subordinated 27 77 532
Mexico borrowings and other 516 447 412
Total debt $ 9,330 $ 8,435 $10,123
</TABLE>
Credit Facilities
At March 31, 1994, the Company had credit facilities aggregating $5.2
billion, consisting of contractually committed U.S. credit lines of $4.7
billion expiring in August 1995, and $.5 billion of Canadian credit
lines expiring in December 1995. At March 31, 1994 the Company had no
borrowings outstanding under either of these credit facilities.
At March 31, 1994, the Company had automotive receivable sale agreements
totaling $2.9 billion, consisting of a $2.5 billion U.S. automotive
receivable sale agreement (of which $1.25 billion expires in September
1994 and $1.25 billion expires in September 1996), and a $.4 billion
Canadian receivable sale agreement which expires in December 1995. At
March 31, 1994, none of the Company's receivable sale agreements were
utilized.
<PAGE>
Chrysler Financial Corporation and Subsidiaries
Note 3 - Debt (Continued)
In addition, up to $750 million of the total commitment under Chrysler's
revolving credit agreement dated June 30, 1993 can be made available to
the Company. As of March 31, 1994, no borrowings were outstanding under
this agreement.
The Company has contractual debt maturities of $4.2 billion during the
remainder of 1994 (including $3.1 billion of short-term notes), and $.6
billion in 1995.
Note 4 - Accounting Changes
Investments in Debt and Equity Securities
Effective January 1, 1994, the Company adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities." This new accounting standard specifies the
accounting and reporting requirements for changes in the fair values of
investments with readily determinable fair values.
Under SFAS No. 115, debt and equity securities are categorized into one
of three categories: trading, available-for-sale and held-to-maturity.
Trading securities and available-for-sale securities are recorded at
fair value. Changes in the fair value of trading securities are
included in earnings currently. Changes in the fair value of available-
for-sale securities are recorded as a separate component of
Shareholder's Investment until realized. Held-to-maturity securities
are carried at cost adjusted for amortized premium or discount.
At March 31, 1994, the Company had investments in securities with an
aggregate carrying value of $383 million, consisting primarily of
commercial paper, governmental securities and corporate debt. At March
31, 1994, $348 million of these securities were categorized as
available-for-sale, while $35 million were categorized as held-to-
maturity. The adjustment of available-for-sale securities to market
value at January 1, 1994 resulted in a $6 million increase to
Shareholder's Investment.
At March 31, 1994, the outstanding debt securities held as investments
have contractual maturities as follows: $118 million due within one
year, $80 million due after one year through five years, $41 million due
after five years through ten years, and $97 million due after ten years.
Other Postretirement Benefits
The Company provides health and life insurance benefits to substantially
all of its U.S. and Canadian employees. Upon retirement from the
Company, employees may become eligible for continuation of these
benefits. However, benefits and eligibility rules may be modified
periodically. Prior to 1993, the expense recognized for these benefits
was based primarily on cash expenditures for the period. Effective
January 1, 1993, the Company adopted SFAS No. 106, "Employers' Accounting
for Postretirement Benefits Other Than Pensions," ("OPEB") which requires
the accrual of such benefits during the years the employees provide
services.
<PAGE>
Chrysler Financial Corporation and Subsidiaries
Note 4 - Accounting Changes (Continued)
The adoption of SFAS No. 106 resulted in an after-tax charge of $29
million in 1993, which represented the immediate recognition of the OPEB
transition obligation of $45 million, partially offset by $16 million of
estimated tax benefits.
The OPEB transition obligation is the aggregate amount that would have
been accrued in the years prior to the adoption of SFAS No. 106 had this
standard been in effect for those years. Implementation of SFAS No. 106
did not increase the Company's cash expenditures for postretirement
benefits. Recognition of on-going expenses under OPEB will not
materially affect the Company's results of operations.
Postemployment Benefits
During the fourth quarter of 1993, the Company adopted SFAS No. 112,
"Employers' Accounting for Postemployment Benefits" effective January 1,
1993. This statement requires the accrual of benefits provided to
former or inactive employees after employment but prior to retirement.
Prior to 1993, the Company accrued for certain of these benefits at the
time an employee's active service ended or expensed the benefit on the
basis of cash expenditures. Adoption of this accounting standard
resulted in the recognition of an after-tax charge of $1 million for the
cumulative effect of this change in accounting principle for the quarter
ended March 31, 1993. Results for the quarter ended March 31, 1993 have
been restated accordingly. Adoption of SFAS No. 112 has not materially
increased the annual expense recognized for these benefits, and there is
no cash impact.
Impairment of a Loan
In May 1993, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 114, "Accounting by Creditors for Impairment of a Loan," which
amends SFAS No. 5, "Accounting for Contingencies", by requiring
creditors to evaluate the collectibility of both contractual interest
and principal of receivables when evaluating the need for a loss
accrual. The Company plans to adopt SFAS No. 114 on or before January
1, 1995. The Company has not yet determined the effect of this new
pronouncement on its results of operations and financial position.
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
Shareholder and Board of Directors
Chrysler Financial Corporation
Southfield, Michigan
We have reviewed the accompanying consolidated balance sheet of Chrysler
Financial Corporation (a subsidiary of Chrysler Corporation) and consolidated
subsidiaries as of March 31, 1994, and the related consolidated statements of
net earnings and cash flows for the three-month periods ended March 31, 1994
and 1993. These financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the consolidated financial statements referred to above for
them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Chrysler Financial Corporation
and its consolidated subsidiaries as of December 31, 1993, and the related
consolidated statements of net earnings and cash flows for the year then
ended (not presented herein); and in our report dated January 18, 1994, we
expressed an unqualified opinion on those consolidated financial statements.
In our opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of December 31, 1993 is fairly presented,
in all material respects, in relation to the consolidated balance sheet
from which it has been derived.
April 19, 1994
/s/ Deloitte & Touche
Detroit, Michigan
