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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE YEAR ENDED DECEMBER 31, 1996, OR
TRANSITION REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE TRANSITION PERIOD FROM TO
Commission file number 1-3754
GENERAL MOTORS ACCEPTANCE CORPORATION
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(Exact name of registrant as specified in its charter)
NEW YORK 38-0572512
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
767 Fifth Avenue, New York, New York 10153
3044 WEST GRAND BOULEVARD, DETROIT, MICHIGAN 48202
- -------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 313-556-5000
The registrant meets the conditions set forth in General Instruction J(1) (a)
and (b) of Form 10-K and is therefore filing this Form with the reduced
disclosure format.
Securities registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS
- -------------------
7 3/4% Notes due April 15, 1997 5 1/2% Debentures due December 15, 2001
7.00 % Notes due August 15, 1997 6 3/4% Notes due February 7, 2002
8 3/8% Notes due May 1, 1997 7.00 % Notes due September 15, 2002
Floating Rate Notes due February 2, 1998 6 5/8% Notes due October 1, 2002
7 3/4% Notes due January 15, 1999 8 1/2% Notes due January 1, 2003
5 5/8% Notes due February 1, 1999 6 3/4% Notes due March 15, 2003
7 1/8% Notes due June 1, 1999 7 1/8% Notes due May 1, 2003
8 5/8% Notes due June 15, 1999 8 3/4% Notes due July 15, 2005
8.40 % Notes due October 15, 1999 6 5/8% Notes due October 15, 2005
7.00 % Notes due March 1, 2000 8 7/8% Notes due June 1, 2010
9 3/8% Notes due April 1, 2000 6.00 % Debentures due April 1, 2011
9 5/8% Notes due May 15, 2000 10.00 % Deferred Interest Debentures
5 5/8% Notes due February 15, 2001 due December 1, 2012
6 7/8% Notes due July 15, 2001 10.30 % Deferred Interest Debentures
9 5/8% Notes due December 15, 2001 due June 15, 2015
All of the securities listed above are registered on the New York Stock
Exchange.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 of the Securities Exchange Act of 1934 during the
preceding 12 months, and (2) has been subject to such filing requirements for
the past 90 days. Yes X . No ___.
As of December 31, 1996, there were outstanding 22,000,000 shares of the
issuer's common stock.
DOCUMENTS INCORPORATED BY REFERENCE
None
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<PAGE>
CONTENTS
PAGE NO.
PART I
Item 1. Business .................................... 3
Item 2. Properties .................................. 7
Item 3. Legal Proceedings ........................... 7
PART II
Item 5. Market for Registrant's Common Equity
and Related Stockholder Matters ............. 7
Item 6. Selected Financial Data ..................... 8
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Item 8. Financial Statements and Supplementary Data . 22
Management's Responsibilities for
Consolidated Financial Statements ...... 22
Independent Auditors' Report ........... 23
Consolidated Balance Sheet ............. 24
Consolidated Statement of Income and Net
Income Retained for Use in the Business 25
Consolidated Statement of Cash Flows ... 26
Notes to Consolidated Financial
Statements ............................. 27
Supplementary Financial Data ........... 64
PART IV
Item 14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K ..................... 65
Signatures .................................. 66
Exhibit Index ............................... 68
Ratio of Earnings To Fixed Charges .......... 69
Independent Auditors' Consent ............... 70
<PAGE>
PART I
ITEM 1. BUSINESS
General Motors Acceptance Corporation (the "Company" or "GMAC"), a wholly-owned
subsidiary of General Motors Corporation ("General Motors" or "GM"), was
incorporated in 1919 under the New York Banking Law relating to investment
companies.
In conducting its primary form of business, GMAC and its affiliated companies
offer a wide variety of automotive financial services to and through franchised
General Motors dealers in many countries throughout the world. GMAC also offers
financial services to other automobile dealerships and to the customers of those
dealerships. Additionally, GMAC provides commercial financing for real estate,
equipment and working capital loans to automobile dealerships, GM suppliers and
customers of GM affiliates. GMAC's other financial services include insurance
and mortgage banking. The Company had 17,758 and 17,252 employees worldwide, as
of December 31, 1996 and 1995, respectively.
The Company operates directly and through its subsidiaries and affiliates
(including joint ventures outside the U.S.) in which the Company or GM has
equity investments. In its principal markets, GMAC offers automotive financing
and other services as described below. The Company operates its automotive
financing services outside of the U.S. in a similar manner, subject to local
laws or other circumstances that may cause it to modify its procedures
accordingly. The Company's policies and internal accounting controls are
designed to ensure compliance with applicable laws and regulations.
The automotive financing industry is highly competitive. The Company's principal
competitors for retail financing and leasing are affiliated finance subsidiaries
of other major manufacturers as well as a large number of banks, commercial
finance companies, savings and loan associations and credit unions. Wholesale
and lease financing competitors are primarily comprised of other manufacturers'
affiliated finance companies, independent commercial finance companies and
banks. Neither the Company nor any of its competitors is considered to be a
dominant force in the industry when analyzed individually. The Company's ability
to offer competitive financing rates, the primary basis of competition, is
directly affected by its access to capital markets. The Company applies a
strategy of constantly reviewing funding alternatives to foster continued
success. The quality of service provided to automotive dealerships and their
customers contributes to the Company's competitive advantages.
<PAGE>
ITEM 1. BUSINESS (CONTINUED)
In the North American automotive business, seasonal retail sales fluctuations
cause production levels to vary from month to month. In addition, the changeover
period related to the annual new model introduction traditionally occurs in the
third quarter of each year, causing an unfavorable impact on the operating
results of automobile manufacturers. These factors produce minor fluctuations in
financing volume, with the second and third quarters of each year generally
experiencing the strongest activity. However, seasonal variations in vehicle
deliveries do not have a material impact on the Company's interim results;
quarterly financing revenue remains relatively consistent throughout the year,
primarily attributable to the use of the straight-line method for recognition of
operating lease revenue and the interest method for recognition of income from
retail and lease financing transactions as well as consistent dealer inventory
levels. As the financing of GM manufactured vehicles comprises a substantial
portion of the Company's business, any protracted reduction or suspension of
GM's production or sales resulting from a decline in demand, work stoppage,
governmental action, adverse publicity, or other event, could have a substantial
unfavorable effect on the Company's results of operations. Information about
GM's production and sales can be located in GM's Annual Report on Form 10-K for
the year ended December 31, 1996, filed separately with the Securities and
Exchange Commission.
RETAIL FINANCING
GMAC conducts its U.S. and Canadian retail automotive financing business under
the trade name GMAC Financial Services. The Company provides financing services
to customers through dealers who have established relationships with GMAC.
Retail installment obligations for new and used products that meet GMAC's credit
standards are purchased directly from dealers.
Outside the U.S. and Canada, GMAC conducts its retail automotive financing
business under various trade names primarily depending upon General Motors
activity in the country while also considering local customs and requirements.
Retail automotive financing is provided in a similar manner as in the U.S., but
in some cases GMAC enters into an installment obligation directly with the
customer.
Retail obligations are generally secured by lien notation on vehicle titles
and/or other forms of security interest in the vehicles financed. After
satisfying local requirements, GMAC can generally repossess the vehicle if the
installment buyer fails to meet the obligations of the contract. The interests
of both GMAC and the retail buyer are usually protected by automobile physical
damage insurance.
WHOLESALE FINANCING
Using GMAC's wholesale financing, qualifying dealers can finance new and used
vehicles held in inventory pending sale or lease to retail or fleet buyers. When
a dealer uses GMAC's Wholesale Finance Plan to acquire vehicles from a
manufacturer or other vehicle sources, GMAC is ordinarily granted a security
interest in those vehicles. GMAC can generally repossess the vehicle if the
dealer does not pay the amount advanced or fails to comply with other conditions
specified in the security agreement. ITEM 1. BUSINESS (CONTINUED)
GMAC also makes term loans to dealers and their affiliates for business
acquisitions, facilities refurbishing, real estate purchases and working
capital. The Company generally secures the loans with liens on real estate,
other dealership assets and/or the personal guarantee of the dealer.
LEASING
GMAC offers leasing plans to retail customers as well as dealers or other
companies that rent or lease vehicles to others.
OPERATING LEASES:
GMAC's most successful leasing program, called SmartLease in the U.S. and
Canada, is a plan in which dealers originate the leases and offer them for
purchase by GMAC. As GMAC assumes ownership of the vehicles from the dealers,
these leases are accounted for as operating leases with the capitalized cost of
the vehicles recorded as depreciable assets (net investment in operating
leases). Dealers are not responsible for the customer's performance during the
lease period nor for the value of the vehicle at the time of lease maturity. The
SmartLease program encourages shorter customer trading cycles. Similar operating
lease programs are offered in eleven other countries. On occasion, General
Motors Corporation may elect to sponsor retail leasing programs by supporting
special lease rates and/or guaranteeing residual values in excess of
independently published residual value guide books used by GMAC. Credit
standards for these programs are similar to those applied to retail financing
contracts.
FINANCE LEASES:
GMAC also offers other leasing plans directly to individual customers and other
entities. Under these plans, the leases are accounted for as finance leases and
the receivables from the customers are recorded as finance receivables. GMAC
does not assume ownership of the vehicle. These leasing receivables essentially
represent installment sales of vehicles, with the vehicles usually being
acquired by the customers at the end of the lease contracts.
LEASE FINANCING:
Dealers, their affiliates and other companies may obtain GMAC financing to buy
vehicles, which they lease or rent to others. These leases, sometimes referred
to as fleet leases, are categorized as finance receivables. GMAC generally has a
security interest in these products and in the rental payments. However,
competitive factors occasionally result in a limited security interest in this
collateral. More than half of GMAC's fleet financing receivables are covered by
General Motors programs which provide a limited payment guarantee to
participating financing institutions as consideration for extending credit to a
fleet customer. Under these programs, General Motors will reimburse the
financing institution, subject to certain limitations, for losses on the sales
of vehicles which are repossessed and returned to the selling dealers.
<PAGE>
ITEM 1. BUSINESS (CONCLUDED)
MORTGAGE BANKING
GMAC Mortgage Group, Inc. ("GMACMG"), conducts mortgage banking operations in
the United States. GMACMG originates and markets single-family and commercial
mortgage loans to investors and services these loans on behalf of investors.
GMACMG also offers other consumer products including home equity loans,
insurance services and trustee services.
GMACMG, through its wholly-owned subsidiary, Residential Funding Corporation
("RFC"), is engaged in the residential wholesale mortgage conduit business. RFC
purchases non-conforming, single-family residential mortgages from mortgage
lenders throughout the United States, securitizes such mortgages into mortgage
pass-through certificates, sells the certificates to investors and performs
master servicing of these securities on behalf of investors. GMACMG also
packages securities backed by home equity loans and sub-prime mortgages. In
addition, RFC provides warehouse lending facilities to certain mortgage banking
customers secured by mortgage collateral as well as long-term secured lines of
credit to construction lending project managers.
INSURANCE
Motors Insurance Corporation and its subsidiaries ("MIC") conduct insurance
operations in the United States, Canada, Europe, Latin America and Asia-Pacific.
MIC insures and reinsures selected personal, mechanical and commercial insurance
coverages.
Personal lines coverages, which include automobile, homeowners and umbrella
liability insurance, are offered primarily on a direct response basis. MIC
insures mechanical coverage for new and used vehicles sold by GM dealers and
others. Commercial lines include insurance for dealer vehicle inventories as
well as other dealer property and casualty coverages. MIC also provides
collateral protection coverage to GMAC on certain vehicles securing GMAC retail
installment contracts. Additionally, MIC is a reinsurer of diverse property and
casualty risks, primarily in the U.S. market. As a result of continued
unfavorable industry trends for credit life and disability products, MIC ceased
underwriting such coverages effective November 1, 1995.
SERVICING
GMAC services the retail installment and wholesale obligations which have been
sold to third parties through its vehicle-related asset-backed securities
program.
FINANCIAL INFORMATION
Financial information regarding industry segments and operations by geographic
area is set forth in Note 17 of the Notes to Consolidated Financial Statements.
<PAGE>
ITEM 2. PROPERTIES
The Company and its subsidiaries have 388 financial service offices, 21
insurance offices and 175 mortgage offices. Of the number of financial service
offices, 304 are in the United States and the Commonwealth of Puerto Rico, 28 in
Canada and 56 in other countries. There are 13 insurance offices in the United
States, 2 in Canada and 6 in Europe. Mortgage offices are all located in the
United States. All premises are generally occupied under lease. Automobiles,
office equipment and real estate properties owned and in use by the Company are
not significant in relation to the total assets of the Company.
ITEM 3. LEGAL PROCEEDINGS
There are various claims and actions pending against the Company and its
subsidiaries with respect to commercial and consumer financing activities,
taxes, insurance and other matters arising out of the conduct of the business.
Certain of these actions are or purport to be class actions, seeking damages in
very large amounts. The probability of adverse verdicts from individual claims
and actions is determined by a periodic review conducted by management and the
Company's General Counsel which involves soliciting input from staff attorneys
as well as outside counsel. Based on these reviews and examinations, the amounts
of liability on these claims and actions at December 31, 1996, were not
determinable but, in the opinion of management, the ultimate liability resulting
therefrom should not have a material adverse effect on the Company's
consolidated financial position or results of operations.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company is a wholly-owned subsidiary of General Motors Corporation and,
accordingly, all shares of the Company's common stock are owned by General
Motors Corporation. There is no market for the Company's common stock.
The Company paid cash dividends to General Motors Corporation of $1,200 million
in 1996, $950 million in 1995 and $875 million in 1994.
<PAGE>
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA
FIVE-YEAR SUMMARY OF CONSOLIDATED OPERATIONS
<CAPTION>
1996 1995 1994 1993 1992
--------- ---------- ---------- ---------- -------
INCOME AND NET INCOME (in millions of dollars)
RETAINED FOR USE
IN THE BUSINESS
Gross revenue and
<S> <C> <C> <C> <C> <C>
other income ............ $ 15,973.7 $ 14,863.2 $ 12,145.0 $ 12,483.5 $ 13,739.3
---------- ---------- ---------- ---------- ----------
Interest and discount .... 4,937.5 4,936.3 4,230.9 4,721.2 5,828.6
Depreciation on
operating leases ........ 4,627.0 4,304.8 3,233.8 2,702.0 2,429.6
Operating expenses ....... 2,690.3 2,391.8 2,032.3 2,090.1 2,021.2
Insurance losses and loss
adjustment expenses ..... 972.2 998.3 1,030.9 1,096.6 987.9
Provision for
financing losses ........ 669.0 448.8 177.3 300.8 371.0
---------- ---------- ---------- ---------- ----------
Total expenses ........ 13,896.0 13,080.0 10,705.2 10,910.7 11,638.3
---------- ---------- ---------- ---------- ----------
Income before income taxes 2,077.7 1,783.2 1,439.8 1,572.8 2,101.0
United States, foreign
and other income taxes .. 837.2 752.2 512.7 591.7 882.3
---------- ---------- ---------- ---------- ----------
Income before cumulative
effect of accounting change 1,240.5 1,031.0 927.1 981.1 1,218.7
Cumulative effect of
accounting change ...... -- -- (7.4) -- (282.6)
---------- ---------- ---------- ---------- ----------
Net income ............... 1,240.5 1,031.0 919.7 981.1 936.1
Cash dividends ........... 1,200.0 950.0 875.0 1,250.0 1,100.0
---------- ---------- ---------- ---------- ----------
Net income retained
in the year ............. $ 40.5 $ 81.0 $ 44.7 $ (268.9) $ (163.9)
========== ========== ========== ========== ==========
ASSETS
Cash and cash equivalents $ 742.3 $ 1,448.6 $ 1,339.5 $ 4,028.1 $ 3,871.1
Earning assets ........... 95,346.8 92,014.1 83,271.0 75,709.4 88,137.9
Other assets ............. 2,488.9 2,184.8 1,906.8 1,747.8 1,405.4
---------- ---------- ---------- ---------- ----------
Total ................. $ 98,578.0 $ 95,647.5 $ 86,517.3 $ 81,485.3 $ 93,414.4
========== ========== ========== ========== ==========
NOTES, LOANS AND DEBENTURES
Payable within one year .. $ 45,809.9 $ 43,871.8 $ 35,114.8 $ 35,084.4 $ 41,364.4
Payable after one year ... 32,878.9 31,050.6 31,539.6 27,688.8 33,174.2
---------- ---------- ---------- ---------- ----------
Total debt............. $ 78,688.8 $ 74,922.4 $ 66,654.4 $ 62,773.2 $ 74,538.6
========== ========== ========== ========== ==========
Certain amounts for the 1992 through 1995 periods have been reclassified to
conform with 1996 classifications.
</TABLE>
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis provides information that management
believes to be relevant to an understanding of the Company's consolidated
results of operations and financial condition. The discussion should be read in
conjunction with the consolidated financial statements and the notes thereto.
RESULTS OF OPERATIONS
For the tenth time in the Company's history, consolidated net income surpassed
$1.0 billion dollars. All business sectors contributed to the 1996 earnings
gain. The following table summarizes the most recent earnings of GMAC's
financing and insurance businesses on a year-to-year basis:
Income Cumulative
Before Effect of
Accounting Accounting Net
CHANGES CHANGES* INCOME
------- -------- ------
(in millions of dollars, after tax)
1996
----
Financing Operations** $ 1,048.1 $ -- $ 1,048.1
Insurance Operations*** 192.4 -- 192.4
---------- ---------- ----------
Total $ 1,240.5 $ -- $ 1,240.5
========== ========== ==========
1995
----
Financing Operations** $ 868.4 $ -- $ 868.4
Insurance Operations*** 162.6 -- 162.6
---------- ---------- ----------
Total $ 1,031.0 $ -- $ 1,031.0
========== ========== ==========
1994
----
Financing Operations** $ 809.0 $ (6.8) $ 802.2
Insurance Operations*** 118.1 (0.6) 117.5
---------- ---------- ----------
Total $ 927.1 $ (7.4) $ 919.7
========== ========== ==========
* Statement of Financial Accounting Standard (SFAS) No. 112 was adopted in
1994
** Includes GMACMG
*** Motors Insurance Corporation (MIC)
On a consolidated basis, GMAC's return on average equity capital was 14.8% in
1996, compared to 12.5% in 1995, and 11.6% in 1994. Total cash dividends paid to
General Motors Corporation in 1996 were $1,200 million, compared with $950
million in 1995 and $875 million in 1994.
In 1996, net income from financing operations was $179.7 million and $245.9
million above 1995 and 1994, respectively. The increase is primarily
attributable to higher net financing revenues resulting from continued
improvement in North American net interest margins, principally in the retail
finance receivables and operating lease portfolios, and higher earnings from
GMACMG.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
The 1996 net income from insurance operations was 18% above 1995 performance and
64% above 1994 earnings principally due to continued improvements in
underwriting results and higher realized capital gains.
UNITED STATES NEW PASSENGER CAR AND TRUCK DELIVERIES
U.S. deliveries of new GM vehicles were slightly below 1995 and 1994 levels.
GMAC's restructured U.S. field operations, combined with special rate financing
and lease incentive programs sponsored by GM, contributed to the achievement of
higher financing penetration of new GM vehicle retail deliveries amid continued
competitive pressures from other providers of vehicle financing. Participation
in U.S. fleet deliveries has declined since 1994, primarily as a result of
National Car Rental System's election to use other vehicle financing sources
after it was sold by GM in June 1995.
YEAR ENDED DECEMBER 31,
-----------------------
1996 1995 1994
---- ---- ----
(in millions of units)
Industry....................................... 15.5 15.1 15.4
General Motors................................. 4.8 4.9 5.0
U.S. New GM Vehicle Deliveries Financed by GMAC
Retail (Installment Sale Contracts and
Operating Leases).......................... 28.4% 26.4% 26.2%
Fleet Transactions (Lease Financing)........ 5.2% 11.5% 17.7%
Total......................................... 24.0% 23.6% 24.5%
FINANCING VOLUME
The number of new vehicle deliveries financed during the three years ended
December 31, 1996 are summarized below:
1996 1995 1994
---- ---- ----
(in thousands of units)
UNITED STATES
Retail Installment Sale Contracts........... 634 672 679
Operating Leases............................ 506 445 448
Leasing..................................... 63 133 196
----- ----- -----
New Deliveries Financed....................... 1,203 1,250 1,323
===== ===== =====
OTHER COUNTRIES
Retail Installment Sale Contracts........... 327 361 366
Operating Leases............................ 225 199 179
Leasing..................................... 78 68 68
----- ----- -----
New Deliveries Financed....................... 630 628 613
===== ===== =====
WORLDWIDE
Retail Installment Sale Contracts........... 961 1,033 1,045
Operating Leases............................ 731 644 627
Leasing..................................... 141 201 264
----- ----- -----
New Deliveries Financed....................... 1,833 1,878 1,936
===== ===== =====
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
The average new vehicle retail finance contract purchased by GMAC in the United
States during 1996 was $21,500, compared to $21,300 in 1995 and $19,200 in 1994.
The average term for new vehicle retail finance contracts purchased was 54
months in 1996, compared to 56 months in 1995 and 55 months in 1994, while the
monthly payment on such contracts purchased in 1996 and 1995 averaged $380,
compared to $352 in 1994.
During 1996, the average capitalized cost for new vehicle retail lease contracts
entered into in the United States was $24,400, compared to $23,500 in 1995 and
$23,000 in 1994. The average term of such new vehicle retail leases was 31
months in both 1996 and 1995, and 30 months in 1994. Similarly, the average
monthly retail lease payments on such contracts were $374 in 1996, $388 in 1995
and $372 in 1994.
GMAC also provides wholesale financing for GM and other dealers' new and used
vehicle inventories. In the United States, inventory financing was provided for
3.3 million, 3.7 million and 3.8 million new GM vehicles, representing 70.3%,
72.0% and 75.6% of all GM sales to dealers during 1996, 1995 and 1994,
respectively. This decline in U.S. market share is principally the result of
continued competitive pressures in this market segment.
ASSETS
At the end of 1996, the Company owned assets and serviced automotive receivables
for others totaling $108.0 billion, an increase of $1.4 billion over year-end
1995. Total consolidated assets of the Company at December 31, 1996 were $98.6
billion, $2.9 billion above the previous year. Consolidated earning assets,
which comprised $95.3 billion of the total consolidated assets, increased $3.3
billion from 1995 year-end levels. The year-to-year increase is primarily
attributable to continued growth of operating leases and real estate mortgage
outstandings, partially offset by a decline in the total finance receivables
portfolio.
Cash and cash equivalents totaled $742.3 million at December 31, 1996, 49% less
than the amount held at December 31, 1995. The lower holdings reflects a reduced
need to accumulate cash as the Company's access to capital markets has continued
to improve.
At December 31, 1996, the value of the Company's consolidated investment
securities portfolio was $4,556.8 million, an increase of $228.6 million over
1995 year-end, primarily due to higher holdings of mortgage-related securities.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Consolidated finance receivables, net of unearned income, amounted to $59.3
billion and $61.2 billion at December 31, 1996 and 1995, respectively. The
decrease in outstandings is predominantly attributable to a $2.4 billion decline
in wholesale receivables in the U.S., resulting from a combination of lower unit
outstandings and additional sales of such receivables on a revolving basis
through the Company's asset securitization program. As described in Note 3 in
the Notes to Consolidated Financial Statements, the Company's asset
securitization program is utilized as an alternative funding source through
which retail and wholesale receivables are sold. The Company continues to
service sold receivables for a fee and earns other related ongoing income.
Principal balances of active trusts of sold wholesale receivables (including
retained subordinated interests) totaled $5.4 billion and $4.7 billion at
December 31, 1996 and 1995, respectively. The first of three revolving wholesale
receivables trusts was formed in 1994 and matured during the first quarter of
1997.
At year-end 1996, outstanding principal balances (including retained
subordinated interests) of sold retail receivables amounted to $4.3 billion,
down 35% from $6.6 billion at year-end 1995. The decline in this portfolio
primarily reflects the amortization of pools sold in prior years, partially
offset by sales completed during 1996 which totaled $2.2 billion. This decline
also contributed to the reduced amount in the due and deferred from receivable
sales (net) which totaled $1.2 billion and $1.4 billion at December 31, 1996 and
1995, respectively.
Consolidated operating lease assets, net of depreciation, acquired principally
under the GMAC SmartLease program, totaled $24.9 billion at year-end 1996, an
increase of $2.8 billion over year-end 1995. Reflecting the continued growth of
the operating lease portfolio, 1996 worldwide operating lease volume exceeded
1995 by 87,000 units.
The real estate mortgage inventory held for sale amounted to $2.8 billion at
December 31, 1996, $1.3 billion above the prior year-end level. Similarly, the
mortgage lending receivables portfolio, consisting primarily of short-term
warehouse lines of credit to finance the origination of loans by other mortgage
lenders, increased 98% during the year and totaled $1.4 billion at December 31,
1996. The higher year-end balances reflect growth of commercial operations and
diminished competition for the non-conforming conduit operations.
Other earning assets totaled $1.3 billion at December 31, 1996, $0.4 billion
above the prior year-end, with the increase resulting from higher mortgage
servicing rights and a larger inventory of vehicles acquired from fleet and
rental customers of General Motors.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
LIQUIDITY
The Company's liquidity, as well as its ability to profit from ongoing
acquisition activity, is in large part dependent upon its timely access to
capital and the costs associated with raising funds in different segments of the
capital markets. In this regard, GMAC regularly accesses the short-term,
medium-term, and long-term debt markets, principally through commercial paper,
notes and underwritten transactions.
As of December 31, 1996, GMAC's total borrowings were $78.7 billion compared
with $74.9 billion at December 31, 1995. Approximately 77% of this debt
represented funding for operations in the United States, with the remaining 23%
of borrowings for operations in Canada (6%), Germany (6%) and other countries
(11%). The 1996 year-end ratio of total borrowings to equity capital was 9.5:1
compared to 9.1:1 for year-end 1995. The higher year-to-year debt levels were
principally used to fund increased asset levels and reduce accounts payable.
Total short-term notes outstanding at December 31, 1996, amounted to $27.0
billion compared with $26.3 billion at year-end 1995.
Intermediate and long-term funding is provided through the issuance of
underwritten debt and medium-term notes, which are offered by prospectus
worldwide on a continuous basis. GMAC sells medium-term notes worldwide through
dealer agents in book-entry form for any maturity ranging from nine months to
thirty years. Sales of medium-term notes for U.S. operations totaled $7.4
billion in 1996 compared to $7.0 billion in 1995. Outstanding medium-term notes
for U.S. operations totaled $23.0 billion at December 31, 1996, an increase of
$0.4 billion from the prior-year period. In the U.S., underwritten debt issues
totaling $1.7 billion were completed during 1996, compared with $1.4 billion in
1995. Underwritten debt issues outstanding in the U.S. at December 31, 1996
totaled $12.4 billion, an increase of $0.5 billion from year-end 1995. As of
December 31, 1996, the Company had unissued debt securities available under
effective shelf registrations with the U.S. Securities and Exchange Commission
totaling $15.3 billion.
At December 31, 1996, GMAC maintained or had access to $30.6 billion of unused
credit lines with banks worldwide, an increase of $0.2 billion from year-end
1995. Included in the unused credit lines are a committed U.S. revolving credit
facility of $10.0 billion, which serves primarily as back-up for GMAC's
unsecured U.S. commercial paper program, and a $12.2 billion U.S. asset-backed
commercial paper liquidity and receivables credit facility for New Center Asset
Trust (NCAT), a non-consolidated limited purpose business trust established to
issue asset-backed commercial paper.
Outside the United States, funding needs are met primarily by a combination of
short-term and medium-term loans from banks and other financial institutions.
Where it is cost-effective, the Company also issues commercial paper, as well as
medium-term and long-term debt, in both the Euro and local markets to fund
certain non-U.S. operations.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Credit facilities supporting operations of the Company's international
subsidiaries totaled $17.1 billion at December 31, 1996 of which $8.1 billion
was unused. As of December 31, 1996, the committed and uncommitted portion of
such credit facilities totaled $5.0 billion and $12.1 billion, respectively.
As discussed in Note 3 in the Notes to Consolidated Statements, the Company
occasionally sells finance receivables through special purpose bankruptcy-remote
subsidiaries which it continues to service for a fee.
The scope of GMAC's ability to tap the capital markets for unsecured debt is
linked to both its term debt and commercial paper ratings. This is particularly
true with respect to the Company's commercial paper ratings. These ratings are
intended to provide guidance to investors in determining the credit risk
associated with particular securities based on current information obtained by
the rating organizations from the Company or other sources that such
organizations consider to be reliable. Lower ratings generally result in higher
borrowing costs as well as reduced access to capital markets. A security rating
is not a recommendation to buy, sell, or hold securities and is subject to
revision or withdrawal at any time by the assigning rating organization. Each
rating should be evaluated independently of any other rating.
Substantially all of the Company's short-term, medium-term, and long-term debt
has been rated by four nationally recognized statistical rating organizations.
As of March 14, 1997, all of the latest ratings assigned were within the
investment grade category.
Senior Commercial
RATING AGENCY DEBT PAPER
- ------------- ---- -----
Duff & Phelps Credit Rating Co. A- D-1
Fitch Investors Service, Inc. A- F-1
Moody's Investors Service, Inc. A3 Prime-1
Standard & Poor's Ratings Services A- A-2
Duff & Phelps Credit Rating Co. (D&P), has assigned a rating of A- to the senior
debt of the Company, the seventh highest among ten investment grade ratings
available, indicating adequate likelihood of timely payment of principal and
interest. The Company's commercial paper has received a rating of D-1 from D&P,
the second highest of five investment grade ratings available, signifying a very
high certainty of timely payment based on excellent liquidity factors and good
fundamental protection factors. D&P reaffirmed these ratings in January 1997.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Fitch Investors Service, Inc. (Fitch), has assigned ratings of A- and F-1 to the
Company's senior debt and commercial paper, the seventh and second highest among
ten and four investment grade ratings available, respectively. The A- rating is
assigned by Fitch to bonds considered to be of high credit quality with the
obligor's ability to pay interest and repay principal considered to be strong.
The F-1 rating is assigned to short-term issues which possess a very strong
credit quality based primarily on the existence of liquidity necessary to meet
the obligations in a timely manner. Fitch reaffirmed these ratings in January
1997.
Moody's Investors Service, Inc. (Moody's), has assigned a rating of A3 to the
Company's senior debt, the seventh highest among ten investment grade ratings
available, indicating many favorable investment attributes with security factors
for principal to be adequate. The Company's commercial paper has received a
rating of Prime-1 from Moody's, the highest of three such ratings, reflecting
superior ability for repayment of senior short-term debt obligations and assured
ability to access alternative sources of liquidity. Additional repayment
characteristics of commercial paper issues receiving this premium rating include
leading market position in a well established industry, high rates of return on
funds employed, and broad margins in earnings coverage of fixed financial
charges. Each of these ratings were assigned by Moody's in May 1995.
Standard & Poor's Ratings Services, a division of McGraw-Hill Companies, Inc.
(S&P), has assigned a rating of A- to the Company's senior debt, seventh highest
among ten investment grade ratings available. The A- rating is assigned to bonds
considered to have a strong capacity to pay interest and repay principal. The
Company's commercial paper has received a rating of A-2, third highest of the
four investment grade ratings available, indicating strong capacity for timely
payment determined by significant safety characteristics. S&P affirmed these
ratings in January 1997.
At this date, GMAC is not under review by any of the above rating agencies.
In managing the interest rate and foreign exchange exposures of a multinational
finance entity, the Company and its subsidiaries utilize a variety of interest
rate and currency derivative financial instruments. As an end-user of such
instruments, GMAC is in a better position to expand its investor base and to
minimize its funding costs, enhancing its ability to offer attractive,
competitive financing rates to its customers. The derivative instruments
utilized by the Company are relatively straightforward and involve little
complexity. The portfolio consists of interest rate swaps, caps, forward
starting interest rate swaps and options; currency swaps which are matched to
offset a companion asset or funding obligation; and hedges related to GMACMG
activities.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
These instruments involve, to varying degrees, elements of credit risk in the
event a counterparty should default and market risk as the instruments are
subject to rate and price fluctuations. Credit risk is managed through the
periodic monitoring and approval of financially sound counterparties and
limiting the potential exposure to individual counterparties to predetermined
notional and exposure limits. Market risk is inherently limited by the fact that
the Company holds offsetting asset or liability positions. Market risk is also
managed on an ongoing basis by determining and monitoring the fair value of each
transaction in the portfolio. GMAC employs a variety of internal swap and option
models, using mid-market rates, to calculate mark-to-market values of its
derivative positions and obtains valuations from its counterparties for
reporting purposes.
The aggregate fair value of the Company's derivatives portfolio represents a
small percentage of its $8.3 billion equity base at December 31, 1996. The total
notional amount of off-balance sheet instruments was $48.3 billion and $18.8
billion at December 31, 1996 and 1995, respectively. The increase in 1996
year-end notional outstandings is partially due to the purchase of interest rate
caps, forward starting interest rate swaps, and options on futures, all of which
are intended to protect against possible interest rate increases in 1997. Also
contributing to the higher 1996 notional positions were increased hedges related
to growth in GMACMG business activities. Summary schedules of outstanding
contracts by type and term as well as a reconciliation of the Company's interest
rate and currency swap activities for the years ended December 31, 1996 and
1995, are included in Note 16 in the Notes to Consolidated Financial Statements.
CASH FLOWS
Cash provided by 1996 operating and financing activities totaled $4.2 billion
and $2.6 billion, respectively. In comparison, cash provided by 1995 operating
and financing activities totaled $5.9 billion and $6.7 billion, respectively.
Similarly, 1994 operating and financing activities generated cash flows of $4.4
and $2.5 billion, respectively. These cash flows were used in investing
activities which totaled $7.5 billion in 1996, $12.5 billion in 1995 and $9.6
billion in 1994. In addition to investing primarily in the expansion of
operating lease assets throughout the last three years, the 1995 cash usage
reflects growth of the retail finance receivables portfolio. In 1994, the
resultant $2.7 billion decrease in cash and cash equivalents was the outcome of
a planned reduction in liquidity reserve requirements due to the Company's
improved access to capital markets.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
COLLECTION RESULTS
The following statistics, which include serviced assets, summarize the Company's
delinquency, repossession and loss experience during the three year period ended
December 31, 1996:
1996 1995 1994
-------- -------- ------
RETAIL AND LEASE FINANCING
Accounts past due over 30 days (average) ......... 3.2% 2.7% 2.5%
Repossessions of new vehicles .................... 2.0% 1.9% 1.7%
Repossessions of used vehicles ................... 4.4% 3.7% 2.6%
Number of repossessed vehicles ................... 130,000 124,000 110,000
Net retail losses as a percent of
total average serviced receivables.............. 1.37% 0.84% 0.54%
RETAIL LOSSES AS PERCENT OF LIQUIDATIONS:
Total serviced - Worldwide ....................... 2.20% 1.35% 0.85%
New serviced - United States ..................... 1.75% 1.08% 0.78%
Retail sold - United States ...................... 0.64% 0.45% 0.46%
CHARGE-OFFS (IN MILLIONS OF DOLLARS):
Serviced receivables, net of recoveries .......... $567.7 $352.8 $276.5
Owned receivables, net ........................... 535.3 317.9 245.0
Allowance for financing losses as a percent of
net serviced receivables ....................... 1.38% 1.18% 1.10%
OPERATING LEASE PORTFOLIO - UNITED STATES:
Percentage of contracts in payment delinquency ... 1.60% 1.32% 0.98%
Number of early terminations by default .......... 19,600 12,300 6,800
Consistent with recent trends in the consumer finance industry, the Company's
delinquencies and losses have increased during the past two years, particularly
in the U.S. used vehicle financing portfolio. The 1994 collection and loss
results were extraordinarily low compared to historical trends. Additions to the
reserve as well as tightened credit standards and intensified collection efforts
are expected to mitigate the Company's exposure to further adverse trends in
consumer payment experience.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
BORROWING COSTS
During 1996, the Company returned to a more traditional funding mix in the U.S.
by emphasizing more floating rate short-term debt at a time during which the
general level of short-term rates declined (e.g., the 1996 U.S. prime lending
rate averaged 56 basis points below 1995). As a result, GMAC's cost of
short-term debt in the United States decreased to an average of 5.44%, 61 basis
points below 1995, but 89 basis points above 1994. United States medium-term and
long-term debt costs decreased to an average of 7.20% for 1996, 15 and 29 basis
points below 1995 and 1994, respectively. These improvements led to a reduced
composite cost of debt for United States operations which averaged 6.51% in
1996, compared to 6.86% in 1995 and 6.48% in 1994. The Company's worldwide cost
of debt averaged 6.57% in 1996, down 45 and 12 basis points from 1995 and 1994,
respectively. The benefits of these lower borrowing cost factors almost entirely
offset the effect of higher average borrowings to result in the interest and
discount expense being only $1.2 million above the 1995 expense.
FINANCING REVENUES AND OTHER INCOME
Consolidated financing revenue totaled $12.6 billion in 1996 compared with $11.7
billion and $9.4 billion in 1995 and 1994, respectively. The 1996 increase
primarily resulted from higher revenues from the portfolios of U.S. retail
finance receivables and North American operating leases. All areas of the
business contributed to the 1995 increase.
Retail and lease financing revenue, at $3,822.2 million for 1996, was $530.6
million and $867.2 million higher than 1995 and 1994, respectively. The
predominant factor in the 1996 increase was higher average owned retail finance
outstandings in the U.S., a result of expanding the portfolio between mid-1995
and mid-1996. Operating lease revenue, net of depreciation, reached $2,587.6
million in 1996, compared to $1,980.2 million in 1995 and $1,621.9 million in
1994, as leasing remained a popular choice of consumers. Also contributing to
the leasing margin increase was continued positive performance in the
liquidation of off-lease vehicles, including consideration of residual support
received from GM.
Wholesale and term loan financing revenue amounted to $1,607.0 million, compared
with $2,087.4 million in 1995 and $1,608.1 million in 1994. The 1996 decrease is
primarily attributable to a combination of lower average outstandings caused by
establishing additional trusts for revolving sales of wholesale receivables
during August 1995 and April 1996 and lower short-term interest rate indices
upon which floor plan inventory rates are based.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Other income, including gains and fees related to sold finance receivables as
well as GMACMG revenues, totaled $2,171.9 million for 1996, compared to $2,116.8
million and $1,598.6 million in 1995 and 1994, respectively. The slight increase
in 1996 is primarily attributable to continued growth in fee and investment
revenue at GMACMG, which was partially offset by lower income from sales of
retail finance receivables transactions. Significantly higher fee and investment
income at GMACMG produced the majority of the 32% increase in 1995 as compared
with 1994.
Pre-tax gains on sold retail receivables, excluding the related limited recourse
loss provision, totaled $35.2 million during 1996 compared with $38.2 million in
1995 and $30.8 million in 1994. Retail receivables sales generally accelerate
the recognition of income on retail contracts, net of servicing fees and other
related deferrals, into the period the receivables are sold. The amount of such
gains is affected by a number of factors and may create variability in quarterly
earnings depending on the type and amount of receivables sold, the structure
used to effect the sale, as well as the prevailing financial market conditions.
This acceleration results in the pre-tax gains reflected above, and can create
variability in annual earnings depending on the amount, timing and the net
margin between the average yield and all-in-cost of the sold receivables. The
acceleration also reduces profit potential in future periods. Although this
acceleration can significantly impact quarterly or year-to-year comparisons, it
should be noted that the Company generally recognizes approximately 70% of
interest and discount revenue in the first two years of a retail contract
(reflecting the term of the underlying contracts, revenue recognition methods
and historical prepayment experience). As such, depending on the timing of
receivables sales in a given year, the net impact on annual earnings may be
substantially less than the gains indicated.
EXPENSES
Salaries and benefits increased in 1996 to $974.3 million from $892.8 million
and $813.7 million in 1995 and 1994, respectively. The higher salary costs in
1996 primarily reflect higher employment levels at GMACMG incidental to expanded
financing and servicing business activities as well as wage increases to a
relatively stable financing operations workforce.
Other operating expenses totaled $1,716.0 million for 1996, $217.0 million and
$497.4 million higher than the respective 1995 and 1994 periods. The 1996
increase over 1995 reflects higher general operating costs incidental to
expanded financing business activities, principally at GMACMG, as well as higher
data processing costs, increased credit losses on operating leases, and higher
collection and repossession costs. The 1995 increase over 1994 is partially
attributable to higher valuation adjustments related to repossessed vehicles,
and higher renovation and relocation costs related to the restructuring of North
American field operations.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
As noted earlier, net retail losses (as a percentage of total average serviced
receivables) increased to 1.37% in 1996 from 0.84% in 1995 and 0.54% in 1994;
primarily a result of a continued rise in vehicle charge-off experience in the
U.S., particularly in the used vehicle financing portfolio. This increase in
repossessions and losses as well as additions to the loss reserves resulted in
the $669.0 million provision for financing losses for 1996, which is $220.2
million and $491.7 million above the respective 1995 and 1994 periods. The 1994
provision for financing losses was extraordinarily low in a historical context.
United States, foreign and other income taxes amounted to $837.2 million for
1996, $85.0 million and $324.5 million more than 1995 and 1994, respectively.
The 1996 increase over 1995 primarily reflects a 17% increase in pre-tax income
partially offset by a decline in the effective income tax rate on a consolidated
basis. Similarly, the increase in the 1995 income tax expense over 1994 was
attributable to a 24% increase in pre-tax income as well as a higher effective
income tax rate. The effective income tax rate for 1996 was 40.3%, compared to
42.2% in 1995 and 35.6% in 1994. The favorable change in 1996 was attributable
to lower effective income tax rates for international operations. The 1995
increase over 1994 reflected higher U.S. and foreign taxes assessed on foreign
source income.
MORTGAGE OPERATIONS
GMACMG continued to maintain its position as a leading mortgage banker in the
United States. Increased volume for all segments, combined with lower average
short-term interest rates, led to earnings growth for GMACMG. For 1996, loan
origination, mortgage servicing acquisitions and correspondent loan volume
(including a $2.8 billion transfer of servicing on GMAC term loans to dealers)
totaled $52.4 billion, an increase of $16.5 billion and $35.3 billion over 1995
and 1994, respectively. The continued growth represents expanded commercial
operations, continued participation in the market for residential servicing
rights and diminished competition for the non-conforming conduit operations.
Reflecting the higher lending activities, the GMACMG servicing portfolio at
December 31, 1996, including $2.7 billion of GMAC term loans, was $110.0
billion, 35% above the $81.2 billion at December 31, 1995.
INSURANCE OPERATIONS
Gross premiums written by MIC and its subsidiaries totaled $1,349.7 million,
$1,324.8 million and $1,360.9 million in 1996, 1995 and 1994, respectively. Net
premiums written totaled $1,150.2 million in 1996, a decrease of $5.8 million
from 1995, and $60.9 million below 1994.
Capital gains at MIC totaled $100.2 million for 1996, $13.8 million and $35.5
million above 1995 and 1994, respectively.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONCLUDED)
ACCOUNTING STANDARDS
In June 1996, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standard (SFAS) No. 125, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities. SFAS No. 125
is effective for certain transfers and servicing of financial assets and
extinguishments of liabilities occurring after December 31, 1996. SFAS No. 125
supercedes SFAS No. 77, Reporting by Transferors for Transfers of Receivables
with Recourse. SFAS No. 125 also supercedes SFAS No. 122, Accounting for
Mortgage Servicing Rights, which was adopted by the Company in 1995 without a
material impact on the consolidated financial statements. The Company has
determined that the required January 1, 1997 adoption of this statement will not
have a material impact on its consolidated financial position or results of
operations.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
MANAGEMENT'S RESPONSIBILITIES FOR CONSOLIDATED FINANCIAL STATEMENTS
The following consolidated financial statements of General Motors Acceptance
Corporation and subsidiaries were prepared by management, which is responsible
for their integrity and objectivity. The statements have been prepared in
conformity with generally accepted accounting principles and, as such, include
amounts based on judgments of management. Financial information elsewhere in
Part II is consistent with that in the consolidated financial statements.
Management is further responsible for maintaining a system of internal
accounting controls, designed to provide reasonable assurance that the books and
records reflect the transactions of the companies and that its established
policies and procedures are carefully followed. Perhaps the most important
feature in the system of control is that it is continually reviewed for its
effectiveness and is augmented by written policies and guidelines, the careful
selection and training of qualified personnel and a strong program of internal
audit.
Deloitte & Touche LLP, an independent auditing firm, is engaged to audit the
consolidated financial statements of General Motors Acceptance Corporation and
its subsidiaries and issue reports thereon. The audit is conducted in accordance
with generally accepted auditing standards which comprehend the consideration of
internal accounting controls and tests of transactions to the extent necessary
to form an independent opinion on the financial statements prepared by
management. The Independent Auditors' Report appears on the next page.
The Board of Directors, through its Audit Committee (the "Committee"), is
responsible for: (1) assuring that management fulfills its responsibilities in
the preparation of the consolidated financial statements; and (2) engaging the
independent auditors. The Committee reviews the scope of the audits and the
accounting principles being applied in financial reporting. The independent
auditors, representatives of management and the internal auditors meet regularly
(separately and jointly) with the Committee to review the activities of each, to
ensure that each is properly discharging its responsibilities and to assess the
effectiveness of the system of internal accounting controls. It is management's
conclusion that the system of internal accounting controls at December 31, 1996,
provides reasonable assurance that the books and records reflect the
transactions of the companies and that its established policies and procedures
are complied with. To ensure complete independence, Deloitte & Touche LLP has
full and free access to meet with the Committee, without management
representatives present, to discuss the results of the audit, the adequacy of
internal accounting controls and the quality of the financial reporting.
S/ J. R. RINES S/ E. A. FELDSTEIN
- -------------- ------------------
John R. Rines, President and Eric A. Feldstein, Executive Vice
Chief Executive Officer President and Chief Financial Officer
<PAGE>
INDEPENDENT AUDITORS' REPORT
General Motors Acceptance Corporation:
We have audited the Consolidated Balance Sheet of General Motors Acceptance
Corporation and subsidiaries as of December 31, 1996 and 1995 and the related
Consolidated Statement of Income and Net Income Retained for Use in the Business
and Consolidated Statement of Cash Flows for each of the three years in the
period ended December 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of General Motors Acceptance Corporation and
subsidiaries at December 31, 1996 and 1995 and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 1996, in conformity with generally accepted accounting principles.
S\ DELOITTE & TOUCHE LLP
- ------------------------
DELOITTE & TOUCHE LLP
600 Renaissance Center
Detroit, Michigan 48243-1704
January 28, 1997
<PAGE>
<TABLE>
GENERAL MOTORS ACCEPTANCE CORPORATION
CONSOLIDATED BALANCE SHEET
<CAPTION>
DECEMBER 31,
-----------
1996 1995
----------- -----------
(in millions of dollars)
<S> <C> <C> <C>
Cash and cash equivalents (Note 1) ............................................. $ 742.3 $ 1,448.6
----------- -----------
EARNING ASSETS
Investments in securities (Note 5) ............................................. 4,556.8 4,328.2
Finance receivables, net (Notes 2 and 3) ....................................... 58,380.0 60,404.9
Investment in operating leases, net (Note 4) ................................... 24,909.5 22,134.9
Notes receivable from General Motors Corporation (Note 13) ..................... 190.5 --
Real estate mortgages - held for sale .......................................... 2,785.0 1,486.8
- held for investment .................................... 611.2 706.8
- lending receivables .................................... 1,404.6 710.1
Due and deferred from receivable sales, net (Note 3) ........................... 1,214.5 1,371.4
Other (Note 13) ................................................................ 1,294.7 871.0
----------- -----------
Total earning assets ........................................................ 95,346.8 92,014.1
----------- -----------
NONEARNING ASSETS (Note 6) ..................................................... 2,488.9 2,184.8
----------- -----------
TOTAL ASSETS ................................................................... $ 98,578.0 $ 95,647.5
=========== ===========
Notes, loans and debentures payable within
one year (Notes 7 and 8) ...................................................... $ 45,809.9 $ 43,871.8
----------- -----------
ACCOUNTS PAYABLE AND OTHER LIABILITIES
General Motors Corporation and affiliated companies (Note 13) .................. 646.6 1,787.6
Interest ....................................................................... 1,065.2 1,048.0
Unpaid insurance losses and loss adjustment expense ............................ 1,581.9 1,499.7
Unearned insurance premiums .................................................... 1,437.5 1,421.9
Deferred income taxes (Note 10) ................................................ 2,215.8 2,175.6
United States and foreign income and
other taxes payable (Note 10) ................................................. 35.6 294.5
Other postretirement benefits (Note 12) ........................................ 627.0 600.4
Other .......................................................................... 4,012.0 3,628.1
----------- -----------
Total accounts payable and other liabilities ................................ 11,621.6 12,455.8
----------- -----------
Notes, loans and debentures payable after one year (Note 9) .................... 32,878.9 31,050.6
----------- -----------
Commitments and contingencies (Notes 4, 16 and 18)
Common stock, $100 par value (authorized 25,000,000 shares,
outstanding 22,000,000 shares) ................................................ 2,200.0 2,200.0
Net income retained for use in the business .................................... 5,775.2 5,734.7
Net unrealized gains on securities (Note 5) .................................... 276.7 284.7
Unrealized accumulated foreign currency translation adjustment ................. 15.7 49.9
----------- -----------
Total stockholder's equity .................................................. 8,267.6 8,269.3
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY ..................................... $ 98,578.0 $ 95,647.5
=========== ===========
Reference should be made to the Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
GENERAL MOTORS ACCEPTANCE CORPORATION
CONSOLIDATED STATEMENT OF INCOME AND
NET INCOME RETAINED FOR USE IN THE BUSINESS
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------
1996 1995 1994
---- ---- ----
(in millions of dollars)
FINANCING REVENUE (Note 1)
<S> <C> <C> <C>
Retail and lease financing (Note 2) ...... $ 3,822.2 $ 3,291.6 $ 2,955.0
Operating leases (Note 4) ................ 7,214.6 6,285.0 4,855.7
Wholesale and term loans (Note 2) ........ 1,607.0 2,087.4 1,608.1
---------- ---------- ----------
Total financing revenue ............... 12,643.8 11,664.0 9,418.8
Interest and discount (Notes 8 & 9) ...... (4,937.5) (4,936.3) (4,230.9)
Depreciation on operating leases (Note 4). (4,627.0) (4,304.8) (3,233.8)
----------- ---------- ----------
Net financing revenue ................. 3,079.3 2,422.9 1,954.1
Insurance premiums earned ................ 1,158.0 1,082.4 1,127.6
Other income (Notes 3 and 13) ............ 2,171.9 2,116.8 1,598.6
---------- ---------- ----------
NET FINANCING REVENUE AND OTHER ....... 6,409.2 5,622.1 4,680.3
---------- ---------- ----------
EXPENSES
Salaries and benefits .................... 974.3 892.8 813.7
Other operating expenses ................. 1,716.0 1,499.0 1,218.6
Insurance losses and loss adjustment
expenses ................................ 972.2 998.3 1,030.9
Provision for financing losses (Note 2) .. 669.0 448.8 177.3
---------- ---------- ----------
Total expenses ........................ 4,331.5 3,838.9 3,240.5
---------- ---------- ----------
Income before income taxes ............... 2,077.7 1,783.2 1,439.8
United States, foreign and other income
taxes (Note 10) ......................... 837.2 752.2 512.7
---------- ---------- ----------
Income before cumulative effect of
accounting change ....................... 1,240.5 1,031.0 927.1
Cumulative effect of accounting change
(Note 12)................................ -- -- (7.4)
---------- ---------- ----------
NET INCOME ............................ 1,240.5 1,031.0 919.7
Net income retained for use in the
business at beginning of the year ....... 5,734.7 5,653.7 5,609.0
---------- ---------- ----------
Total .................................... 6,975.2 6,684.7 6,528.7
Cash dividends ........................... 1,200.0 950.0 875.0
---------- ---------- ----------
NET INCOME RETAINED FOR USE IN THE
BUSINESS AT END OF THE YEAR .......... $ 5,775.2 $ 5,734.7 $ 5,653.7
========== ========== ==========
Reference should be made to the Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
GENERAL MOTORS ACCEPTANCE CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------
1996 1995 1994
---- ---- ----
(in millions of dollars)
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C>
Income before cumulative effect of accounting
changes ................................................. $ 1,240.5 $ 1,031.0 $ 927.1
Depreciation ............................................. 4,667.5 4,342.7 3,267.2
Provision for financing losses ........................... 669.0 448.8 177.3
Gains on sales of finance receivables..................... (35.2) (38.2) (30.8)
Mortgage loans-originations/purchases .................... (19,455.3) (12,085.6) (10,135.7)
-proceeds on sale .......................... 18,157.1 11,613.1 10,386.2
Mortgage-related securities held for trading-acquisitions (970.2) (515.4) (275.8)
-liquidations 757.6 532.6 --
Changes in the following items:
Due to General Motors Corporation and
affiliated companies .................................. (1,103.0) (133.6) (618.1)
Taxes payable and deferred ............................. (204.5) 855.8 542.8
Interest payable ....................................... 17.0 86.6 (50.2)
Other assets ........................................... (199.9) (212.2) (598.4)
Other liabilities ...................................... 369.0 (61.7) 713.2
Other .................................................... 279.3 45.3 129.4
---------- ---------- ---------
Net cash provided by operating activities ............. 4,188.9 5,909.2 4,434.2
---------- ---------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Finance receivables-acquisitions ......................... (155,477.3) (163,033.3) (156,579.8)
-liquidations ......................... 120,252.6 132,741.7 135,905.2
Notes receivable from General Motors Corporation ......... (190.5) 1,080.5 275.0
Operating leases-acquisitions ............................ (14,381.8) (14,034.6) (13,086.8)
-liquidations ............................ 6,795.9 5,642.5 3,569.5
Investments in securities-acquisitions ................... (13,088.6) (12,207.6) (11,439.5)
-liquidations ................... 13,063.2 11,864.7 11,495.2
Proceeds from sales of receivables-wholesale ............. 34,620.0 22,010.8 16,786.7
-retail ................ 2,037.2 3,378.1 3,461.0
Due and deferred from receivable sales ................... 192.0 231.9 322.9
Other .................................................... (1,288.8) (219.4) (341.2)
---------- ---------- ---------
Net cash used in investing activities ................. (7,466.1) (12,544.7) (9,631.8)
---------- ---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Debt with original maturities 90 days and over
-proceeds ........................................... 54,377.4 47,807.0 46,348.0
-liquidations ....................................... (48,875.0) (44,138.7) (46,541.3)
Debt with original maturities less than 90 days-net change (1,731.9) 4,026.5 3,540.8
Dividends paid ........................................... (1,200.0) (950.0) (875.0)
Proceeds from issuance of stock to General Motors ........ -- -- 35.0
---------- ---------- ---------
Net cash provided by financing activities ............. 2,570.5 6,744.8 2,507.5
---------- ---------- ---------
Effect of exchange rate changes on cash and cash
equivalents ............................................. 0.4 (0.2) 1.5
---------- ---------- ---------
Net (decrease)/increase in cash and cash equivalents .. (706.3) 109.1 (2,688.6)
Cash and cash equivalents at the beginning of the year ... 1,448.6 1,339.5 4,028.1
---------- ---------- ---------
Cash and cash equivalents at the end of the year ......... $ 742.3 $ 1,448.6 $ 1,339.5
========== ========== ==========
SUPPLEMENTARY CASH FLOWS INFORMATION
Interest paid ........................................... $ 4,851.7 $ 4,783.3 $ 4,223.7
Income taxes paid/(recovered) ........................... $ 1,003.9 $ 210.9 $ (16.0)
Reference should be made to the Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
General Motors Acceptance Corporation (the "Company"), a wholly-owned subsidiary
of General Motors Corporation ("General Motors" or "GM"), was incorporated in
1919 under the New York Banking Law relating to investment companies.
The Company is a financial services organization that principally provides
consumer and dealer vehicle financing. The principal markets for the Company's
vehicle financial products and services are North America, Europe, Latin America
and Asia-Pacific. The Company's mortgage banking subsidiaries operate in the
U.S. In addition, the Company owns subsidiaries which offer insurance products
and services in North America, Canada, Europe, Latin America and Asia-Pacific.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
its domestic and foreign subsidiaries. All significant intercompany balances and
transactions are eliminated in consolidation.
Certain prior period amounts have been reclassified to conform with the 1996
presentation.
CASH EQUIVALENTS
Cash equivalents are defined as short-term, highly liquid investments with
original maturities of 90 days or less.
REVENUE RECOGNITION
Financing revenue is recorded over the terms of the receivables using the
interest method. Certain loan origination costs are deferred and amortized to
financing revenue over the life of the related loans using the interest method.
Income from operating lease assets is on a straight-line basis over the
scheduled lease term. Certain operating lease origination costs are deferred and
amortized to financing revenue over the life of the related operating leases
using the straight-line method.
ALLOWANCE FOR FINANCING LOSSES
An allowance for financing losses is generally established during the period in
which receivables are acquired and is maintained in amounts considered by
management to be appropriate in relation to receivables outstanding. Losses
arising from the sale of repossessed collateral are charged to the allowance for
financing losses. Where repossession has not been effected, losses are charged
off as soon as it is determined that the collateral cannot be repossessed,
generally not more than 150 days after default.
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
REPOSSESSED PROPERTY AND IMPAIRED LOANS
Losses arising from the repossession of collateral supporting doubtful accounts
and property supporting defaulted operating leases are recognized upon
repossession. Repossessed assets are recorded at the lower of historical cost or
estimated realizable value and are included in nonearning assets with the
related adjustments to the valuation allowance included in other operating
expenses.
Non-retail finance receivables are reduced to the estimated fair value of
collateral when determined to be impaired or uncollectible.
SALES OF RECEIVABLES
The Company sells retail and wholesale receivables through consolidated special
purpose subsidiaries which absorb all losses related to sold receivables to the
extent of their subordinated investments and certain segregated restricted cash
reserves. Appropriate limited recourse loss allowances associated with sold
receivables are transferred from the allowance for financing losses and are
included in "Due and deferred from receivable sales, net". Normal servicing fees
on sold receivables are earned over time based on the amount of serviced loans
outstanding.
Pre-tax gains on sold receivables are recorded in other income. In determining
the gain or loss for each qualifying sale of retail receivables, the investment
in the sold receivable pool is allocated between the portion sold and the
portion retained based on their relative fair values on the date of sale. The
receivables sold are removed from the balance sheet caption "Finance receivable,
net", and the Company's retained interests in such receivables are included in
"Due and deferred from receivable sales, net".
In June 1996, the FASB issued SFAS No. 125, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities. SFAS No. 125
requires securitization transactions to be accounted for as sales when legal and
effective control over transferred receivables is surrendered. SFAS No. 125 is
effective for certain transfers and servicing of financial assets and
extinguishments of liabilities occurring after December 31, 1996 and is to be
applied prospectively.
DEPRECIATION
The Company and its subsidiaries provide for depreciation of vehicles and other
equipment on operating leases or in company use generally on a straight-line
basis. The provision for depreciation is adjusted for the difference between the
net book value and the proceeds of sale or salvage on disposal of the assets.
The Company evaluates its depreciation policy for leased vehicles on a regular
basis.
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FOREIGN CURRENCY TRANSLATION
All assets and liabilities of foreign subsidiaries are translated into U.S.
dollars at year-end exchange rates. Income and expense items are translated at
average exchange rates prevailing during the year. The resulting translation
adjustments are recorded as a component of stockholder's equity.
FINANCIAL INSTRUMENTS
The Company is party to a variety of interest rate and foreign exchange swap
agreements and options.
The Company accounts for interest rate swap agreements using settlement
accounting as they alter the characteristics of assets or liabilities to which
they are matched. The cash flows from interest rate swaps are accounted for as
adjustments to interest income or expense depending on the underlying exposure.
Gains and losses from terminated contracts are deferred and amortized over the
remaining period of the original swap or the remaining term of the underlying
exposure whichever is shorter. Open swap positions are reviewed regularly to
ensure that they remain effective in managing interest rate risk. Purchased
eurodollar options and written options (including related premiums), and
interest rate basis swaps are marked-to-market on a current basis with the
related income or expense included in other income. Portfolio swaps are
identified with specific portfolios of assets or liabilities with any amounts
due or payable, and amounts paid or received, offset against the related
interest income or expense.
Foreign exchange swap agreements are entered into in connection with the
Company's management of its foreign currency exposures and are accounted for
using settlement accounting as it relates to periodic interest payments. The
foreign currency gains and losses associated with these contracts offset the
correlating foreign currency gains and losses related to the designated
liabilities.
INSURANCE OPERATIONS
Insurance premiums are earned on a basis related to coverage provided over the
terms of the policies. Commission costs and premium taxes incurred in acquiring
new business are deferred and amortized over the terms of the related policies
on the same basis as premiums are earned. The liability for unpaid losses and
loss adjustment expenses includes amounts relating to coinsurance and assumed
reinsurance agreements and represents the estimated amount of reported losses,
with an experience factor added to provide for losses incurred but not reported.
Estimated salvage and subrogation recoverable is recognized at the time losses
are incurred. Insurance liabilities are necessarily based on estimates and the
ultimate liability may vary from such estimates. Revisions in estimates are
reported in the period in which they arise.
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONCLUDED)
Reinsurance premiums, commissions and reserves related to reinsured business are
accounted for on a basis consistent with those used in accounting for the
original policies issued and the terms of the reinsurance contracts. Estimated
amounts recoverable from reinsurers on unpaid losses, including incurred but not
reported losses, and loss adjustment expenses pursuant to reinsurance contracts
have been reported as an asset. Amounts paid to reinsurers relating to the
unexpired portion of reinsurance contracts are also reported as an asset.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect amounts reported therein. Due to the inherent uncertainty involved in
making estimates, actual results reported in future periods may be based upon
amounts which differ from those estimates.
<PAGE>
<TABLE>
<CAPTION>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2. FINANCE RECEIVABLES
The composition of finance receivables outstanding at December 31, 1996 and 1995
is summarized as follows:
DECEMBER 31,
------------
1996 1995
---- ----
(in millions of dollars)
<S> <C> <C>
United States
Retail ........................................... $ 26,867.4 $ 26,979.9
Wholesale ........................................ 13,825.8 16,189.6
Leasing and lease financing ...................... 1,188.3 1,327.3
Term loans to dealers and others ................. 3,386.7 3,729.6
---------- ----------
Total United States ............................... 45,268.2 48,226.4
---------- ----------
Canada
Retail ........................................... 657.8 786.8
Wholesale ........................................ 1,615.8 1,512.2
Leasing and lease financing ...................... 834.1 714.8
Term loans to dealers and others ................. 178.2 142.0
---------- ----------
Total Canada ...................................... 3,285.9 3,155.8
---------- ----------
Europe
Retail ........................................... 5,803.5 5,955.9
Wholesale ........................................ 3,951.3 3,863.0
Leasing and lease financing ...................... 561.9 567.0
Term loans to dealers and others ................. 241.9 230.5
---------- ----------
Total Europe ...................................... 10,558.6 10,616.4
---------- ----------
Other Countries
Retail ........................................... 2,124.5 1,908.6
Wholesale ........................................ 868.2 656.1
Leasing and lease financing ...................... 611.1 451.2
Term loans to dealers and others ................. 134.6 120.8
---------- ----------
Total Other Countries ............................. 3,738.4 3,136.7
---------- ----------
Total finance receivables ......................... 62,851.1 65,135.3
---------- ----------
Deductions
Unearned income .................................. 3,549.3 3,922.5
Allowance for financing losses ................... 921.8 807.9
---------- ----------
Total deductions .................................. 4,471.1 4,730.4
---------- ----------
Finance receivables, net .......................... $ 58,380.0 $ 60,404.9
========== ==========
The aggregate amount of total finance receivables maturing in each of the five
years following December 31, 1996, is as follows: 1997 - $36,298.3 million; 1998
- - $11,223.2 million; 1999 - $8,912.9 million; 2000 - $4,342.8 million; 2001 -
$1,561.6 million; 2002 and thereafter - $512.3 million.
</TABLE>
<PAGE>
<TABLE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2. FINANCE RECEIVABLES (CONCLUDED)
The following table presents an analysis of the allowance for financing losses:
<CAPTION>
DECEMBER 31,
------------
1996 1995 1994
---- ---- ----
(in millions of dollars)
<S> <C> <C> <C>
Allowance for financing losses at
beginning of the year ................. $ 807.9 $ 693.3 $ 748.0
------- ------- -------
Charge-offs
United States ......................... (601.3) (372.2) (310.7)
Other Countries ....................... (69.9) (50.2) (50.3)
------- ------- -------
Total charge-offs ...................... (671.2) (422.4) (361.0)
------- ------- -------
Recoveries and other
United States ......................... 125.3 102.0 111.8
Other Countries ....................... 10.6 2.5 4.2
------- ------- -------
Total recoveries and other ............. 135.9 104.5 116.0
Transfers from/(to) sold receivables
allowance ............................. (19.8) (16.3) 13.0
Provisions charged to income ........... 669.0 448.8 177.3
------- ------- -------
Allowance for financing losses
at end of the year .................... $ 921.8 $ 807.9 $ 693.3
======= ======= =======
</TABLE>
<TABLE>
Impaired loans of the Company are carried at the lower of book value or the fair
value of the collateral. The following table presents a summary of the allowance
for financing losses on impaired loans for the years ended December 31, 1996 and
1995:
<CAPTION>
1996 1995
---- ----
(in millions of dollars)
<S> <C> <C>
Allowance for financing losses at
beginning of the year ....................... $ 118.4 $ 134.8
(Subtractions)/Additions ................ (17.1) 6.2
Net charge-offs ....................... (22.4) (22.6)
---------- ----------
Allowance for financing losses at
end of the year ............................. $ 78.9 $ 118.4
========== ==========
The total investments in these loans were $163.3 million and $248.6 million at
December 31, 1996 and 1995, respectively. The average recorded investments
during 1996 and 1995 were $207.9 million and $283.2 million, respectively. The
Company's policy is to recognize interest income related to impaired loans on a
cash basis.
</TABLE>
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3. SALE OF FINANCE RECEIVABLES
The Company participates in various sales of receivables programs and has sold
retail finance receivables through special purpose subsidiaries with principal
aggregating $2.2 billion in 1996, $3.6 billion in 1995 and $3.7 billion in 1994.
These subsidiaries generally retain a subordinated investment of no greater than
7.5% of the total receivables pool and market the remaining portion. These
subordinated investments absorb losses related to sold receivables to the extent
that such losses are greater than the excess cash flows from those receivables
and cash reserves related to the sale transaction. Pre-tax gains relating to
such sales recorded in "Other income" (excluding limited recourse loss
provisions which generally have been provided at the time the contracts were
originally acquired) amounted to $35.2 million in 1996, $38.2 million in 1995
and $30.8 million in 1994. The Company continues to service these receivables
for a fee and earns other related ongoing income. The Company's sold retail
finance receivable servicing portfolio amounted to $4.3 billion and $6.6 billion
at December 31, 1996 and 1995, respectively.
The Company has sold wholesale receivables on a revolving basis resulting in
decreases in wholesale outstandings of $5.4 billion and $4.7 billion at December
31, 1996 and 1995, respectively. The Company continues to service these
receivables for a fee and is committed to sell eligible wholesale receivables
arising in certain dealer accounts.
The Company's interest in excess servicing cash flows, subordinated interest in
trusts, cash deposits and other related amounts are generally restricted assets
and subject to limited recourse provisions. The following is a summary of
amounts included in "Due and deferred from receivable sales, net."
<TABLE>
DECEMBER 31,
------------
<CAPTION>
1996 1995
---- ----
(in millions of dollars)
<S> <C> <C>
Excess servicing ............................ $ 122.8 $ 214.3
Other restricted amounts:
Subordinated interest in trusts ............ 288.5 393.3
Cash deposits held by trusts ............... 770.8 786.2
Other ...................................... 64.0 21.8
Allowance for estimated credit losses on sold
receivables ................................ (31.6) (44.2)
---------- ----------
Total ....................................... $ 1,214.5 $ 1,371.4
========== ==========
</TABLE>
<PAGE>
<TABLE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3. SALE OF FINANCE RECEIVABLES (CONCLUDED)
The following table presents a summary of the allowance for estimated credit
losses on sold receivables:
DECEMBER 31,
------------
<CAPTION>
1996 1995 1994
---- ---- ----
(in millions of dollars)
<S> <C> <C> <C>
Allowance for estimated credit
losses at beginning of the year ..... $ 44.2 $ 62.8 $ 107.3
Transfers from/(to) allowance for
financing losses .................... 19.8 16.3 (13.0)
Charge-offs .......................... (32.4) (34.9) (31.5)
-------- -------- --------
Allowance for estimated credit
losses at end of the year ........... $ 31.6 $ 44.2 $ 62.8
======== ======== ========
</TABLE>
<TABLE>
NOTE 4. INVESTMENT IN OPERATING LEASES
Operating leases at year-end were as follows:
<CAPTION>
DECEMBER 31,
------------
1996 1995
---- ----
(in millions of dollars)
Investment in operating leases
<S> <C> <C>
Vehicles and other equipment, at cost ... $ 31,838.9 $ 28,747.9
Less: Accumulated depreciation ........ 6,929.4 6,613.0
---------- ----------
Net investment in operating leases ......... $ 24,909.5 $ 22,134.9
========== ==========
</TABLE>
The Company's investment in operating leases is based on estimated residual
values of the leased equipment, which are calculated at the lease inception
date. Realization of the residual values is dependent on the Company's future
ability to market the vehicles under then prevailing market conditions. Although
realization is not assured, management believes it is more likely than not that
the estimated residual values will be realized.
The lease payments applicable to equipment on operating leases maturing in each
of the five years following December 31, 1996, are as follows: 1997 - $5,600.2
million; 1998 - $3,395.8 million; 1999 - $1,314.2 million; 2000 - $137.2 million
and 2001 - $8.5 million.
Each of these assets is depreciated on a straight-line basis over a period of
time which is consistent with the term of the underlying operating lease
agreement.
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5. INVESTMENTS IN SECURITIES
Bonds, equity securities, notes, certificates of deposit and other investments
are carried at fair value. For available for sale investments, the aggregate
excess of market value over cost, net of related income taxes, is included as a
separate component of stockholder's equity. For mortgage-related trading
securities, the excess of market value over cost is included in income. The
Company determines cost on the specific identification basis. The fair value of
the investments, except for the mortgage-related trading securities portfolio,
is based on quoted market prices. The fair value of the mortgage-related trading
securities is based on estimated market value.
<TABLE>
<CAPTION>
DECEMBER 31, 1996
-----------------
Fair Unrealized Unrealized
TYPE OF SECURITY COST VALUE GAINS LOSSES
- ---------------- ---- ----- ----- ------
(in millions of dollars)
<S> <C> <C> <C> <C>
Bonds, notes and
other securities
United States government
and governmental agencies
and authorities ........... $ 324.9 $ 328.4 $ 3.9 $ (0.4)
States, municipalities and
political subdivisions .... 1,573.4 1,647.9 84.7 (10.2)
Mortgage-related securities 61.9 63.9 2.1 (0.1)
Other ...................... 1,145.8 1,176.1 35.6 (5.3)
---------- ---------- ---------- -----------
Total debt securities
available for sale ........ 3,106.0 3,216.3 126.3 (16.0)
Mortgage-related securities
held for trading purposes . 697.3 697.3 -- --
---------- ---------- ---------- -----------
Total debt securities ....... $ 3,803.3 $ 3,913.6 $ 126.3 $ (16.0)
---------- ---------- ---------- -----------
Equity securities ........... $ 327.8 $ 643.2 $ 325.9 $ (10.5)
---------- ---------- ---------- -----------
Total investment in securities $ 4,131.1 $ 4,556.8 $ 452.2 $ (26.5)
========== ========== ========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5. INVESTMENTS IN SECURITIES (CONTINUED)
DECEMBER 31, 1995
-----------------
Fair Unrealized Unrealized
TYPE OF SECURITY COST VALUE GAINS LOSSES
- ---------------- ---- ----- ----- ------
(in millions of dollars
<S> <C> <C> <C> <C>
Bonds, notes and
other securities
United States government
and governmental agencies
and authorities ........... $ 268.0 $ 279.4 $ 11.5 $ (0.1)
States, municipalities and
political subdivisions .... 1,720.8 1,825.0 112.7 (8.5)
Mortgage-related securities 76.7 78.7 2.6 (0.6)
Other ...................... 1,059.8 1,110.6 51.9 (1.1)
---------- ---------- ---------- ----------
Total debt securities
available for sale ........ 3,125.3 3,293.7 178.7 (10.3)
Mortgage-related securities
held for trading purposes . 484.8 484.8 -- --
---------- ---------- ---------- ----------
Total debt securities ....... $ 3,610.1 $ 3,778.5 $ 178.7 $ (10.3)
---------- ---------- ---------- ----------
Equity securities ........... $ 280.0 $ 549.7 $ 284.6 $ (14.9)
---------- ---------- ---------- ----------
Total investment in securities $ 3,890.1 $ 4,328.2 $ 463.3 $ (25.2)
========== ========== ========== ==========
The distribution of maturities of debt securities outstanding at December 31,
1996 is summarized as follows:
<CAPTION>
DECEMBER 31, 1996
-----------------
Fair
MATURITY COST VALUE
- -------- ---- -----
(in millions of dollars)
<S> <C> <C>
Due in one year or less ................. $ 241.8 $ 243.3
Due after one year through five years ... 1,004.6 1,037.6
Due after five years through ten years .. 1,029.6 1,062.2
Due after ten years ..................... 768.1 809.3
Mortgage-related securities ............. 759.2 761.2
---------- ----------
Total debt securities ................... $ 3,803.3 $ 3,913.6
========== ==========
</TABLE>
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5. INVESTMENTS IN SECURITIES (CONCLUDED)
The following table summarizes proceeds, gains and losses realized from the sale
of investment securities during the three year period ended December 31, 1996:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
(in millions of dollars)
DEBT SECURITIES:
<S> <C> <C> <C>
Sale Proceeds ............$2,101.8 $1,370.9 $1,036.4
Gross Realized Gains ..... 44.6 21.4 15.0
Gross Realized Losses .... 18.7 15.5 18.9
EQUITY SECURITIES:
Sale Proceeds ............$ 234.4 $ 202.7 $ 185.1
Gross Realized Gains ..... 84.4 87.4 80.5
Gross Realized Losses .... 10.1 6.9 11.9
NOTE 6. NONEARNING ASSETS
Nonearning assets consisted of:
<CAPTION>
DECEMBER 31,
------------
1996 1995
(in millions of dollars)
------------------------
<S> <C> <C>
Property and equipment at cost ............. $ 276.1 $ 258.7
Accumulated depreciation ................... (115.3) (123.6)
----------- ----------
Net property and equipment ................. $ 160.8 $ 135.1
Nonperforming assets (net of valuation
reserves) ................................. 764.6 694.6
Insurance premiums receivable .............. 151.0 180.1
Residential servicing advances and excess
servicing fees ............................ 367.1 151.2
Deferred policy acquisition cost ........... 237.7 228.8
Intangibles, net of accumulated amortization 168.7 166.8
Other assets ............................... 639.0 628.2
---------- ----------
Total ...................................... $ 2,488.9 $ 2,184.8
========== ==========
</TABLE>
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7. LINES OF CREDIT WITH BANKS
The Company maintains four syndicated bank credit facilities in the U.S. and
Europe.
As of December 31, 1996, syndicated bank credit facilities in the U.S. included
a five year, $10.0 billion revolving credit facility, which expires in May 2001,
and a $12.2 billion 364-day asset-backed commercial paper liquidity and
receivables credit facility for New Center Asset Trust (NCAT), a
non-consolidated limited purpose business trust established to issue
asset-backed commercial paper.
In Europe, the syndicated facilities are used as needed to fund GMAC's financing
operations in line with the Company's historical reliance on bank debt outside
the U.S. and Canada. In this regard, these five-year syndicated facilities
expire in May 2001 and are comprised of a $500 million revolving credit facility
to GMAC International Finance, B.V. in the Netherlands and a 400 million United
Kingdom Pound Sterling revolving credit facility to General Motors Acceptance
Corporation (U.K.) plc.
With respect to the $10.0 billion U.S. revolving credit facility, the Company
has agreed to a covenant such that, so long as the commitments remain in effect
or any amount is owing to any lender under such commitments, the ratio of
consolidated debt to total stockholder's equity at the last day of any fiscal
quarter shall not exceed 11.0:1. At December 31, 1996 and 1995, this ratio
amounted to 9.5:1 and 9.1:1, respectively.
Inclusive of these syndicated agreements, credit facilities maintained worldwide
totaled $40.7 billion at December 31, 1996, compared to $40.0 billion at
December 31, 1995. Facilities available for use as commercial paper back-up in
the United States amounted to $22.2 billion at December 31, 1996 and 1995, all
of which were unused. GMAC Mortgage Corporation had $1.4 billion of bank lines
of credit at December 31, 1996, compared with $1.3 billion at December 31, 1995,
which are utilized in the normal course of business. Of these lines, $0.3
billion were unused at December 31, 1996 and 1995.
Credit facilities supporting operations in Canada, Europe, Latin America and
Asia-Pacific totaled $17.1 billion at December 31, 1996 and $16.5 billion at
December 31, 1995 of which $8.1 billion and $8.0 billion were unused at December
31, 1996 and 1995, respectively. As of December 31, 1996, the committed and
uncommitted portion of such credit facilities totaled $5.0 billion and $12.1
billion, respectively. As of December 31, 1995, the committed and uncommitted
portion of such credit facilities totaled $5.0 billion and $11.5 billion,
respectively.
<PAGE>
<TABLE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8. NOTES, LOANS AND DEBENTURES PAYABLE WITHIN ONE YEAR
<CAPTION>
DECEMBER 31,
------------
1996 1995
---- ----
(in millions of dollars)
Short-term notes
<S> <C> <C>
Commercial paper .......................... $ 22,650.8 $ 21,926.0
Master notes .............................. 289.3 253.5
Demand notes .............................. 3,396.4 3,037.4
Other ..................................... 894.9 1,433.9
---------- ----------
Total principal amount ..................... 27,231.4 26,650.8
Unamortized discount ....................... (189.4) (343.8)
---------- ----------
Total ...................................... 27,042.0 26,307.0
---------- ----------
Bank loans and overdrafts
United States ............................. 1,068.0 1,014.0
Other Countries ........................... 7,756.4 7,031.7
---------- ----------
Total ...................................... 8,824.4 8,045.7
---------- ----------
Other notes, loans and debentures
payable within one year
United States ............................ 9,180.7 8,697.0
Other countries .......................... 762.8 822.1
---------- ----------
Total ...................................... 9,943.5 9,519.1
---------- ----------
Total payable within one year .............. $ 45,809.9 $ 43,871.8
========== ==========
</TABLE>
The weighted average interest rates on short-term borrowings outstanding
(original term of one year or less) at December 31, 1996 and 1995 were 5.65% and
6.04%, respectively.
After consideration of foreign currency swaps, the above maturities denominated
in currencies other than the U.S. Dollar primarily consist of the German Mark
($3,239.5 million), Canadian Dollar ($2,892.2 million), United Kingdom Pound
Sterling ($1,765.1 million) and Australian Dollar ($996.7 million). The Company
and its subsidiaries have entered into foreign currency swap agreements to hedge
exposures related to notes and loans payable in currencies other than the local
currency of the debt issuing entity.
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8. NOTES, LOANS AND DEBENTURES PAYABLE WITHIN ONE YEAR (CONCLUDED)
To achieve its desired balance between fixed and variable rate debt, the Company
has entered into interest rate swap, interest rate cap, and forward starting
interest rate swap agreements. The breakdown between the fixed and variable
interest rate amounts based on contractual terms (predominately based on London
Interbank Offering Rate(LIBOR)) and after the effect of interest rate
derivatives is as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1996 1995
---- ----
(in millions of dollars)
DEBT BALANCES BASED ON CONTRACTUAL TERMS:
<S> <C> <C>
Fixed amount ............................. $39,472.1 $37,337.3
Variable amount .......................... 6,538.8 6,878.3
DEBT BALANCES AFTER EFFECT OF DERIVATIVES:
Fixed amount ............................. $39,756.2 $37,711.0
Variable amount .......................... 6,254.7 6,504.6
</TABLE>
<PAGE>
<TABLE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9. NOTES, LOANS AND DEBENTURES PAYABLE AFTER ONE YEAR
<CAPTION>
Weighted average
interest rates at DECEMBER 31,
MATURITY DECEMBER 31, 1996 1996 1995
- -------- ----------------- ---- ----
<S> <C> <C> <C> <C>
Notes, Loans And Debentures (in millions of dollars)
United States currency
1997 ...................... -- $ -- $ 8,522.5
1998 ...................... 6.3% 7,922.2 4,975.3
1999 ...................... 6.9% 5,599.7 3,680.0
2000 ...................... 7.4% 3,478.7 2,453.2
2001 ...................... 7.0% 3,083.8 1,323.9
2002 ...................... 6.6% 2,110.2 1,746.1
2003 - 2007 ............... 7.1% 3,602.5 2,031.5
2008 - 2012 ............... 10.2% 1,213.5 1,203.4
2013 - 2017 ............... 10.3% 373.8 673.8
2018 - 2049 ............... 5.2% 75.0 75.0
---------- ----------
Total United States currency 27,459.4 26,684.7
Other currencies
1998 - 2006 ............... 6.6% 6,157.9 5,130.0
---------- ----------
Total notes, loans and
debentures ................ 33,617.3 31,814.7
Unamortized discount ....... (738.4) (764.1)
---------- ----------
Total notes, loans and
debentures payable after
one year .................. $ 32,878.9 $ 31,050.6
========== ==========
</TABLE>
The aggregate principal amounts of notes, loans and debentures with terms of
more than one year from dates of issue, maturing in the years following December
31, 1997, are as follows: 1998 - $10,172.6 million; 1999 - $7,708.1 million;
2000 - $4,256.9 million; 2001 - $3,901.6 million; and 2002 and thereafter -
$7,578.1 million.
After consideration of foreign currency swaps, the above maturities which are
denominated in currencies other than the U.S. Dollar, primarily consist of the
Canadian Dollar ($2,090.0 million), German Mark ($1,492.4 million), United
Kingdom Pound Sterling ($1,062.1 million) and Australian Dollar ($1,025.0
million). The Company and its subsidiaries have entered into foreign currency
swap agreements to hedge exposures related to notes and loans payable in
currencies other than the local currency of the debt issuing entity.
The Company has issued warrants to subscribe for up to $75 million aggregate
principal amount of 7.00% notes due August 15, 2001. The warrants are
exercisable up to and including August 15, 2000.
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9. NOTES, LOANS AND DEBENTURES PAYABLE AFTER ONE YEAR (CONCLUDED)
The Company has issued warrants to subscribe for up to $300 million aggregate
principal amount of 6.50% Notes due October 15, 2009. The warrants are
exercisable up to and including October 15, 2007.
Debt issues totaling $1,752.2 million are redeemable, at par or slightly above,
at the Company's option. The debt issues are redeemable anytime until prior to
their maturity dates with the latest maturity date in November 2049.
The Company's debt includes $1,300.0 million in notes with fixed rates and
$2,070.0 million in notes with variable rates which provide investors with the
option to cause GMAC to repurchase them at specific dates through November 2049.
Generally, the probability of exercising an option would increase in the event
of a reduction in one or more of the Company's security ratings or, where the
notes are subject to fixed interest rates, an increase in market interest rates.
For purposes of the above maturities, it is assumed that no repurchase will
occur.
To achieve its desired balance between fixed and variable rate debt, the Company
has entered into interest rate swap, interest rate cap, and forward starting
interest rate swap agreements. The breakdown between the fixed and variable
interest rate amounts based on contractual terms (predominately based on LIBOR)
and after the effect of interest rate instruments is as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1996 1995
---- ----
(in millions of dollars)
DEBT BALANCES BASED ON CONTRACTUAL TERMS:
<S> <C> <C>
Fixed amount ............................. $27,146.0 $26,919.0
Variable amount .......................... 6,471.3 4,895.7
DEBT BALANCES AFTER EFFECT OF DERIVATIVES:
Fixed amount ............................. 27,097.6 27,003.9
Variable amount .......................... $ 6,519.7 $ 4,810.8
</TABLE>
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10. UNITED STATES, FOREIGN AND OTHER INCOME TAXES
The Company and its domestic subsidiaries join with General Motors Corporation
in filing a consolidated United States federal income tax return. The portion of
the consolidated tax recorded by the Company and its subsidiaries included in
the consolidated tax return generally is equivalent to the liability that would
have been incurred on a separate return basis. Provisions are made for estimated
United States and foreign income taxes, less available tax credits and
deductions, which may be incurred on remittance of the Company's share of its
subsidiaries' undistributed earnings not deemed to be indefinitely reinvested.
Taxes have not been provided on foreign subsidiaries' earnings which are deemed
indefinitely reinvested of approximately $836.0 million at December 31, 1996 and
$719.1 million at December 31, 1995. Quantification of the deferred tax
liability, if any, associated with permanently reinvested earnings is not
practicable.
Deferred income taxes reflect the impact of "temporary differences" between
values recorded for assets and liabilities for financial reporting purposes and
values utilized for measurement in accordance with tax laws.
The tax effects of the primary temporary differences giving rise to the
Company's deferred tax assets and liabilities for 1996 and 1995 are as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1996
-----------------
ASSET LIABILITY
----- ---------
(in millions of dollars)
<S> <C> <C>
Lease transactions ......................... $ -- $ 2,220.9
Provision for financing losses ............. 316.8 --
Debt transactions .......................... -- 322.5
Unrealized gain on securities .............. -- 211.0
State and local taxes ...................... -- 172.6
Insurance loss reserve discount ............ 93.7 --
Unearned insurance premiums ................ 92.9 --
Other postretirement benefits .............. 213.7 --
Other ...................................... 281.7 287.6
---------- ----------
Total deferred income taxes ................ $ 998.8 $ 3,214.6
========== ==========
</TABLE>
<PAGE>
<TABLE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10. UNITED STATES, FOREIGN AND OTHER INCOME TAXES (CONTINUED)
<CAPTION>
DECEMBER 31, 1995
-----------------
ASSET LIABILITY
----- ---------
(in millions of dollars)
<S> <C> <C>
Lease transactions ......................... $ -- $ 1,980.5
Provision for financing losses ............. 299.2 --
Debt transactions .......................... -- 311.9
Unrealized gain on securities .............. -- 158.9
State and local taxes ...................... -- 186.3
Insurance loss reserve discount ............ 90.3 --
Unearned insurance premiums ................ 88.1 --
Other postretirement benefits .............. 213.3 --
Alternative minimum tax .................... 54.7 --
Other ...................................... 160.4 444.0
---------- ----------
Total deferred income taxes ................ $ 906.0 $ 3,081.6
========== ==========
The significant components of income tax expense are as follows:
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------
1996 1995 1994
---- ---- ----
(in millions of dollars)
Income taxes estimated to be currently payable/(refundable):
<S> <C> <C> <C>
United States federal ......... $ 422.9 $ 150.7 $ (129.5)
Foreign ....................... 224.9 103.3 147.3
United States state and local . 103.2 27.1 (31.3)
---------- ---------- ----------
Total income taxes payable/
(recoverable) currently ....... 751.0 281.1 (13.5)
---------- ---------- ----------
Deferred income taxes:
United States federal ......... 51.4 248.8 352.9
Foreign ....................... 49.3 185.6 104.1
United States state and local . (14.5) 36.7 69.2
---------- ---------- ----------
Total deferred income taxes .... 86.2 471.1 526.2
---------- ---------- ----------
Income tax expense ............. $ 837.2 $ 752.2 $ 512.7*
========== ========== ==========
* Excludes cumulative effect of change in accounting principle.
</TABLE>
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10. UNITED STATES, FOREIGN AND OTHER INCOME TAXES (CONCLUDED)
Income tax provisions recorded by the Company differ from the computed amounts
developed by applying the statutory United States federal income tax rate to
income before income taxes. The following schedule reconciles the U.S. statutory
income tax rate to the actual income tax rate recorded by the Company:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------
1996 1995 1994
---- ---- ----
United States federal statutory
<S> <C> <C> <C>
income tax rate.................. 35.0% 35.0% 35.0%
Effect of (in percentage points)
State and local income taxes .... 2.9 2.4 1.7
Tax exempt interest and
dividends received which are not
fully taxable .................. (1.5) (1.7) (2.5)
Adjustment to U.S. taxes on
foreign income ................. 2.5 3.3 0.9
Foreign income tax rate
differential .................. 2.3 4.4 2.3
Other ........................... (0.9) (1.2) (1.8)
---------- ---------- --------
Effective tax rate ............... 40.3% 42.2% 35.6%*
========== ========== =========
- ----------
* Excludes cumulative effect of change in accounting principle.
</TABLE>
NOTE 11. PENSION PROGRAM
The Company and certain of its subsidiaries participate in various pension plans
of General Motors Corporation and its domestic and foreign subsidiaries, which
cover substantially all of their employees. Benefits under the plans are
generally related to an employee's length of service, salary, and where
applicable, contributions. GMACMG and NAVCO Corp., two wholly-owned
subsidiaries, have separate retirement plans which provide for pension payments
to their eligible employees upon retirement. Pension expense of the Company and
its subsidiaries amounted to $28.9 million, $27.9 million and $17.6 million in
1996, 1995 and 1994, respectively.
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12. OTHER POSTRETIREMENT BENEFITS
The Company and certain of its subsidiaries participate in various
postretirement medical, dental, vision and life insurance plans of General
Motors Corporation. These benefits are funded as incurred from the general
assets of the Company.
The Company accrues postretirement benefit costs over the active service period
of employees to the date of full eligibility for such benefits. The Company has
provided for certain amounts associated with estimated future postretirement
benefits other than pensions and characterized such amounts as "other
postretirement benefits." Notwithstanding the recording of such amounts and the
use of these terms, the Company does not admit or otherwise acknowledge that
such amounts or existing postretirement benefit plans of the Company (other than
pensions) represent legally enforceable liabilities of the Company.
In November 1992, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standard (SFAS) No. 112, Employers' Accounting
for Postemployment Benefits, which established a new accounting principle for
the cost of benefits provided to former or inactive employees after employment
but before retirement. The Statement was effective for fiscal years beginning
after December 15, 1993. The Company adopted this standard effective January 1,
1994; the after-tax unfavorable cumulative effect of this change was $7.4
million. The ongoing effect in subsequent periods is not material.
The total non-pension postretirement benefits expense of the Company amounted to
$55.3 million, $57.0 million and $70.7 million in 1996, 1995 and 1994
respectively, and was comprised of the components set forth below:
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1996 1995 1994
---- ---- ----
(in millions of dollars)
Benefits attributed to
<S> <C> <C> <C>
the current year .............. $ 11.9 $ 12.7 $ 19.9
Interest accrued on benefits
attributed to prior years ..... 43.4 44.3 50.8
------ ------ ------
Total non-pension postretirement
benefits expense .............. $ 55.3 $ 57.0 $ 70.7
====== ====== ======
</TABLE>
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13. TRANSACTIONS WITH AFFILIATES
The Company is wholly-owned by GM and as such, may receive support from GM if
necessary to maintain competitive leverage levels and its fixed charges coverage
ratio. No such payments were received during 1996, 1995 or 1994.
Under special rate programs sponsored by GM, an interest rate differential is
provided as reimbursement for amounts advanced to dealers on behalf of GM. The
earned portion of such amounts constituted $1,069.4 million of gross revenue in
1996, compared with $902.5 million in 1995 and $846.1 million in 1994.
Agreements with GM provide for payment to the Company for residual value support
on certain retail leasing transactions. Amounts included in the Consolidated
Statement of Income for these transactions totaled $441.9 million, $121.0
million and $35.0 million in 1996, 1995 and 1994, respectively.
On occasion, the Company may also extend loans to GM, its subsidiaries and
affiliates. Outstanding loans to GM and affiliates totaled $190.5 at December
31, 1996. At December 31, 1995, there were no such loans outstanding. Total
interest income from these loans amounted to $22.2 million, $73.4 million and
$92.6 million in 1996, 1995 and 1994, respectively.
The Company purchases certain vehicles which GM acquired from its fleet and
rental customers. The cost of these vehicles held for resale, which is included
in other earning assets, was $600.2 million at December 31, 1996, compared with
$400.7 million at December 31, 1995. Total service fee income received from GM
on these vehicles amounted to $23.9 million, $41.2 million and $24.7 million in
1996, 1995 and 1994, respectively.
The amounts due GM and its affiliated companies at the balance sheet dates
relate principally to current wholesale financing of sales of GM products and
nonrecourse transfers for consideration of a portion of future lease revenues.
During the first quarter of 1996, the settlement terms related to the wholesale
financing of certain GM products were accelerated to shipment date. To the
extent that wholesale settlements with GM are made prior to the expiration of
transit, interest is received from GM. Interest payments received on this
arrangement totaled $55.0 million.
The Company receives technical and administrative advice and services from GM
and also occupies office space furnished by GM. Costs of such services, which
are included in other operating expenses, amounted to $26.4 million, $26.1
million and $13.1 million in 1996, 1995 and 1994, respectively.
The Company purchases data processing and communications services from
Electronic Data Systems Corporation, a subsidiary of GM until June 7, 1996.
Insurance premiums earned by MIC on certain coverages provided to GM totaled
$288.7 million, $253.0 million and $278.3 million in 1996, 1995 and 1994,
respectively.
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14. MORTGAGE BANKING
GMAC Mortgage Group, Inc. and its subsidiaries (collectively GMACMG) perform a
wide array of mortgage banking activities including the origination, purchase
and servicing of residential, commercial and multifamily mortgage loans and the
issuance of private mortgage-backed securities. In addition, GMACMG actively
pursues the acquisition of mortgage servicing rights from other mortgage bankers
and financial institutions. Effective January 1, 1995, GMACMG adopted SFAS No.
122, Accounting for Mortgage Servicing Rights. The impact of adoption was not
material to the Company's consolidated financial position or results of
operations. SFAS No. 125, Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities, was issued in June 1996, superceding
SFAS No. 77, Reporting by Transferors for Transfers of Receivables with
Recourse, and SFAS No. 122. SFAS No. 125 is effective for certain transfers and
servicing of financial assets and extinguishments of liabilities occurring after
December 31, 1996. The adoption of SFAS No. 125 on January 1, 1997, will not
have a material impact on the Company's consolidated financial position or
results of operations.
The following summarizes GMACMG's origination and purchase of mortgage loans and
the principal balances of acquisitions of mortgage servicing rights for the
years ended December 31, 1996 and 1995, respectively.
<TABLE>
<CAPTION>
1996 1995
---- ----
(in millions of dollars)
Loans originated/brokered:
<S> <C> <C>
Residential ............................... $ 5,347.5 $ 3,451.2
Commercial ................................ 3,698.0 2,139.6
Loan purchases ............................. 13,111.5 8,472.3
Bulk servicing acquisitions:
Residential ............................... 22,900.8 11,801.9
Commercial (1) ............................ 7,330.0 10,084.3
(1) Includes $2,795.0 million of term loans serviced on behalf of GMAC beginning
in 1996.
</TABLE>
GMACMG sells a majority of its originated loans into various governmental agency
(FHLMC, FNMA and GNMA) mortgage-backed securities and whole loans to private
investors while maintaining the right to service such mortgage loans. GMACMG
generally packages its purchased mortgage loans into private mortgage-backed
securities for sale to investment bankers and private mortgage investors.
As part of its conduit mortgage banking activities, GMACMG retains subordinated
and stripped mortgage-backed securities which are classified as trading
securities and held at estimated market value. On certain transactions, GMACMG
will retain full or limited recourse for credit or other losses incurred by the
purchaser of the loans sold. GMACMG establishes allowances for estimated future
losses related to the outstanding recourse obligations which management
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14. MORTGAGE BANKING (CONTINUED)
considers adequate. In addition, GMACMG provides appropriate loss allowances on
warehouse lines and other loans held as investments.
The right to service loans is contracted under primary or master servicing
agreements. Under primary servicing agreements, GMACMG collects monthly
principal, interest and escrow payments from individual mortgagors and performs
certain accounting and reporting functions on behalf of the mortgage investors.
As master servicer, GMACMG collects monthly payments from various sub-servicers
and performs certain accounting and reporting functions on behalf of the
mortgage investors. As compensation for such servicing activities, the Company
earns a servicing fee. With the exception of serviced mortgages owned by GMACMG,
the servicing portfolio principal amount is not reflected in the Company's
financial statements.
Following are selected financial and statistical information of GMACMG as of
December 31, 1996 and 1995:
<TABLE>
<CAPTION>
1996 1995
---- ----
(in millions of dollars)
Servicing portfolio
<S> <C> <C>
Residential ............................... $ 55,607.5 $ 46,776.7
Commercial ................................ 24,853.1 15,013.0
Master Servicing (1)....................... 29,583.0 19,399.4
---------- ----------
Total ...................................... $110,043.6 $ 81,189.1
========== ==========
Number of serviced loans ................... 819,511 619,076
========== ==========
(1) Includes $2,708.5 million of term loans serviced on behalf of GMAC beginning
in 1996.
Financial Information
<CAPTION>
FOR THE YEARS ENDED
-------------------
1996 1995
---- ----
(in millions of dollars)
Mortgage servicing rights
<S> <C> <C>
and excess servicing fees* ................ $ 1,017.4 $ 585.2
---------- ----------
Loans sold with recourse ................... $ 12,307.6 $ 14,142.6
---------- ----------
Maximum exposure on loans sold
Full recourse ............................. $ 350.0 $ 390.4
Limited recourse .......................... 601.2 553.8
---------- ----------
Total ...................................... $ 951.2 $ 944.2
========== ==========
Allowance for losses on loans sold
with recourse ............................. $ 63.0 $ 25.8
---------- ----------
* Amortized over the period of projected net servicing income.
</TABLE>
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14. MORTGAGE BANKING (CONCLUDED)
The maximum recourse exposure shown above is net of amounts reinsured with third
parties which totaled $241.3 million and $327.7 million at December 31, 1996 and
1995, respectively.
NOTE 15. FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company has developed the following fair value estimates by utilization of
available market information or other appropriate valuation methodologies.
However, considerable judgment is required in interpreting market data to
develop estimates of fair value, so the estimates are not necessarily indicative
of the amounts that could be realized or would be paid in a current market
exchange. The effect of using different market assumptions and/or estimation
methodologies may be material to the estimated fair value amounts.
Fair value information presented herein is based on information available at
December 31, 1996 and 1995. Although management is not aware of any factors that
would significantly affect the estimated fair value amounts, such amounts have
not been updated since those dates and, therefore, the current estimates of fair
value at dates subsequent to December 31, 1996 and 1995 may differ significantly
from these amounts. The estimated fair value of financial instruments held by
the Company, for which it is practicable to estimate that value, were as
follows:
Balance sheet financial instruments:
<TABLE>
<CAPTION>
DECEMBER 31, 1996 DECEMBER 31, 1995
----------------- -----------------
Estimated Estimated
Book Fair Book Fair
VALUE VALUE VALUE VALUE
----- ----- ----- -----
(in millions of dollars)
Assets
Cash and cash
<S> <C> <C> <C> <C>
equivalents ....... $ 742.3 $ 742.3 $ 1,448.6 $ 1,448.6
Investments in
securities ........ 4,556.8 4,556.8 4,328.2 4,328.2
Finance receivables,
net ................ 58,380.0 58,419.3 60,404.9 60,786.0
Notes receivable
from GM ............ 190.5 189.4 -- --
Real estate mortgages
held for sale ..... 2,785.0 2,818.4 1,486.8 1,502.6
held for investment 611.2 596.6 706.8 693.3
lending receivables 1,404.6 1,404.6 710.1 710.1
excess servicing .. 322.9 341.1 114.9 115.0
Due and deferred from
receivable sales,
net ............... 1,214.5 1,295.2 1,371.4 1,452.6
Liabilities
Debt ................ $ 78,688.8 $ 81,248.2 $ 74,922.4 $ 78,461.9
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
Off-balance sheet financial instruments:
<CAPTION>
DECEMBER 31, 1996 DECEMBER 31, 1995
----------------- -----------------
Contract/ Contract/
Notional Unrealized Notional Unrealized
AMOUNT GAIN/(LOSS) AMOUNT GAIN/(LOSS)
------ ----------- ------ -----------
(in millions of dollars)
Commitments to
originate/purchase
<S> <C> <C> <C> <C>
mortgages/securities.....$ 2,626.8 $ (2.1) $ 2,895.9 $ 10.0
Commitments to sell
mortgages/securities..... 1,531.3 0.4 2,153.7 (9.6)
Mortgage-related
futures ................. 1,453.0 (3.2) 201.0 --
Unused mortgage
lending
commitments ............. 2,769.3 -- 1,817.9 3.4
Unused revolving
credit lines
to dealers .............. 385.1 -- 239.7 --
Interest rate
instruments (1) ......... 42,484.3 3.6 16,135.4 47.9
Foreign currency
instruments (2) .........$ 4,386.6 $ (242.5) $ 2,484.7 $ 4.1
(1) The 1996 and 1995 notional balances include $23,725.4 million and $10,950.8
million, respectively, in financial instruments that are recorded at their fair
value on the balance sheet. The related net assets recorded on the balance sheet
for these financial instruments totaled $9.8 million and $10.9 million at
December 31, 1996 and 1995, respectively.
(2) Includes $2,348.1 million and $1,219.4 million in cross currency interest
rate swaps with unrealized gains/(losses) of $(122.3) million and $30.9 million
at December 31, 1996 and 1995, respectively. The unrealized loss in the fair
value of the foreign currency instruments in 1996 was largely offset by the
unrealized gain in the fair value of the related underlying debt instruments.
</TABLE>
CASH AND CASH EQUIVALENTS
The book value approximates fair value because of the short maturity of these
instruments.
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
INVESTMENTS IN SECURITIES
Bonds, equity securities, notes, certificates of deposit and other investments
are carried at fair value which is based on quoted market prices. The fair value
of mortgage-related trading securities is based on estimated market value.
FINANCE RECEIVABLES, NET
The fair value is estimated by discounting the future cash flows using
applicable spreads to approximate current rates applicable to each category of
finance receivables. The carrying value of wholesale receivables and other
receivables whose interest rates adjust on a short-term basis with applicable
market indices (generally the prime rate) are assumed to approximate fair value
either due to their short maturities or due to the interest rate adjustment
feature.
NOTES RECEIVABLE FROM GM
The fair value is estimated by discounting the future cash flows using
applicable spreads to approximate current rates applicable to certain categories
of other earning assets.
REAL ESTATE MORTGAGES AND EXCESS SERVICING FEES
The fair values of real estate mortgages held for sale (including warehouse
lines) and loans held for investment and lending receivables was determined
through a review of published market information associated with similar
instruments. The fair value of excess servicing fees was determined by
discounting net future cash flows at a risk adjusted discount rate.
DUE AND DEFERRED FROM RECEIVABLE SALES, NET
The fair value of retained subordinated interests in trusts and excess servicing
assets (net of deferred costs) was derived by discounting expected cash flows
using current market rates.
DEBT
The fair value of the debt payable within one year is determined by using quoted
market prices, if available, or calculating the estimated value of each bank
loan, note or debenture in the portfolio at the applicable rate in effect.
Commercial paper, master notes, and demand notes have an original term of less
than 270 days and, therefore, the carrying amount of these liabilities is
considered fair value. Debt payable beyond one year has an estimated fair value
based on quoted market prices for the same or similar issues or based on the
current rates offered to the Company for debt with similar remaining maturities.
COMMITMENTS TO ORIGINATE/PURCHASE MORTGAGES/SECURITIES
The fair value of commitments is estimated using quoted market prices associated
with commitments to sell similar mortgages in estimated future periods.
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONCLUDED)
COMMITMENTS TO SELL MORTGAGES/SECURITIES
The fair value of commitments is estimated using quoted market prices associated
with similar commitments.
MORTGAGE-RELATED FUTURES
The fair value of futures contracts is determined based upon quoted market
prices.
UNUSED MORTGAGE LENDING COMMITMENTS
The fair value determination of unused mortgage lending commitments is
considered in the overall valuation of the underlying assets with which they are
associated.
UNUSED REVOLVING CREDIT LINES TO DEALERS
The unused portion of revolving lines of credit extended to dealers will
approximate market value since they reprice at prevailing market rates.
INTEREST RATE INSTRUMENTS
The fair value of the existing interest rate swaps and forward starting interest
rate swaps is estimated by discounting expected cash flows using quoted market
interest rates. The fair value of written and purchased options is estimated
using quoted market prices.
FOREIGN CURRENCY INSTRUMENTS
The estimated fair value of the foreign currency swaps is derived by discounting
expected cash flows using market exchange rates over the remaining term of the
agreement.
NOTE 16. DERIVATIVE FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Company is a party to derivative financial instruments with
off-balance-sheet risk which it uses in the normal course of business to reduce
its exposure to fluctuations in interest and foreign exchange rates. The
objectives of the derivative financial instruments portfolio are to manage
interest rate and currency risks by offsetting a companion asset or funding
obligation; adjusting fixed and floating rate funding levels; and facilitation
of securitization transactions. The primary classes of derivatives used by the
Company are interest rate and foreign exchange swaps and interest rate caps.
Those instruments involve, to varying degrees, elements of credit risk in the
event a counterparty should default and market risk as the instruments are
subject to rate and price fluctuations. Credit risk is managed through the
periodic monitoring and approval of financially sound counterparties. Market
risk is mitigated because the derivatives are generally used to hedge underlying
transactions. The financial instrument transactions include some embedded
options and structured interest rate swaps that are either marked-to-market or
specifically matched, respectively. Cash receipts or payments on these
agreements normally occur at periodic contractually defined intervals.
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16. DERIVATIVE FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED)
INTEREST RATE INSTRUMENTS
The Company's financing and cash management activities subject it to market risk
from exposure to changes in interest rates. To manage these exposures, the
Company has entered into various financial instrument transactions. The
Company's objective for entering into these transactions is to minimize interest
expense while maintaining the desired level of exposure to the risk of interest
rate fluctuations. Interest rate swaps are contractual agreements between the
Company and another party to exchange the net difference between a fixed and
floating interest rate, or different floating interest rates, periodically over
the life of the contract without the exchange of the underlying principal
amount. The Company also uses written and purchased options (including interest
rate caps). Interest rate cap agreements provide the holder protection against
interest rate movements above the established rate. In exchange for assuming
this risk, the writer receives a premium at the outset of the agreement.
The Company uses swaps to alter its fixed and floating interest rate exposures.
As such, the majority of swaps are executed as an integral element of a specific
financing transaction. In a limited number of cases, swaps, matched to specific
portfolios of wholesale assets or debt, are executed on a portfolio basis to
achieve specific interest rate management objectives. The differential paid or
received on such swaps is recorded as an adjustment to interest expense or
income over the term of the underlying debt agreement or matched portfolio.
Purchased options, written interest rate caps, and basis swaps are
marked-to-market with related gains and losses recognized in other income on a
current basis.
In the normal course of managing its interest rate liabilities, the Company
occasionally enters into forward starting interest rate swaps in anticipation of
future debt issuance. At December 31, 1996, the Company had entered into forward
starting interest rate swaps with notional amounts totaling $2.9 billion to
hedge anticipated 1997 debt issuance. At the time at which the Company issues
debt, these swaps will be terminated and any realized profit or loss related to
such swaps will be amortized over the life of the debt or the original term of
the swap, whichever is shorter, as either a reduction or increase of interest
expense.
Derivative activities resulted in interest expense decreases of $7.3 million,
$1.4 million and $5.2 million for the years ended December 31, 1996, 1995 and
1994, respectively. The effect of these transactions on the Company's weighted
average borrowing rates were basis point decreases of one, less than one and one
in 1996, 1995 and 1994, respectively.
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16. DERIVATIVE FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED)
Summaries of the Company's interest rate swaps and written and purchased options
by maturity and weighted average interest rate (predominately based on LIBOR) at
December 31, 1996 and 1995, are as follows:
<TABLE>
<CAPTION>
INTEREST RATE SWAPS DECEMBER 31, 1996
-------------------------------------
Year Notional Amount GMAC Receives GMAC Pays
DUE (IN MILLIONS) FLOATING FIXED
--- ------------- -------- -----
<S> <C> <C> <C> <C>
1997 $ 242.7 5.94% 7.91%
1998 604.8 5.95% 7.41%
1999 922.4 5.87% 7.02%
2000 290.3 5.87% 7.27%
2001 1,006.3 5.88% 6.77%
2002-2006 1,600.0 5.93% 6.72%
-------------
Subtotal $ 4,666.5
-------------
GMAC Pays GMAC Receives
FLOATING FIXED
-------- -----
1997 $ 1,448.9 5.33% 7.20%
1998 1,563.2 5.66% 6.82%
1999 924.9 5.47% 7.12%
2000 105.2 6.05% 7.05%
2001 231.9 5.35% 7.78%
-------------
Subtotal $ 4,274.1(1)
-------------
GMAC Pays GMAC Receives
FLOATING FLOATING
-------- --------
1997 $ 2,241.6 7.28% 8.25%
1998 3,536.2 8.37% 8.24%
1999 583.5 7.83% 7.96%
2001 79.0 8.15% 8.25%
-------------
Subtotal $ 6,440.3
-------------
Total $ 15,380.9(2)
=============
(1) Includes notional amounts for swaps with amortizing balances. The swap
balances amortize in relation to expected prepayments on the principal balances
of the matched assets.
(2) Excludes GMACMG derivatives that are discussed under Mortgage Contracts.
</TABLE>
<PAGE>
<TABLE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16. DERIVATIVE FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED)
<CAPTION>
INTEREST RATE SWAPS DECEMBER 31, 1995
-------------------------------------
Year Notional Amount GMAC Receives GMAC Pays
DUE (IN MILLIONS) FLOATING FIXED
--- ------------- -------- -----
<S> <C> <C> <C> <C>
1996 $ 158.4 5.61% 4.61%
1997 163.1 7.05% 7.87%
1998 137.8 6.94% 7.98%
1999 233.0 5.37% 6.37%
2000 104.3 5.47% 6.02%
2001 500.0 5.49% 6.21%
2002-2006 600.0 5.62% 6.34%
-------------
Subtotal $ 1,896.6
-------------
GMAC Pays GMAC Receives
FLOATING FIXED
-------- -----
1996 $ 1,300.9 5.54% 7.43%
1997 806.0 5.41% 7.37%
1998 690.7 5.39% 7.16%
1999 353.9 5.75% 8.45%
2000 3.5 5.57% 7.15%
-------------
Subtotal $ 3,155.0(1)
-------------
GMAC Pays GMAC Receives
FLOATING FLOATING
-------- --------
1999 $ 2,632.0 7.27% 8.17%
2000 2,072.7 8.40% 8.21%
-------------
Subtotal $ 4,704.7
-------------
Total $ 9,756.3(2)
=============
(1) Includes notional amounts for swaps with amortizing balances. The swap
balances amortize in relation to expected prepayments on the principal balances
of the matched assets.
(2) Excludes GMACMG derivatives that are discussed under Mortgage Contracts.
</TABLE>
<PAGE>
<TABLE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16. DERIVATIVE FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED)
WRITTEN AND PURCHASED OPTIONS
-----------------------------
DECEMBER 31,
------------
<CAPTION>
YEAR DUE 1996 1995
-------- ---------- -------
Notional Amounts
(in millions of dollars)
Written Interest Rate Caps (1):
<S> <C> <C> <C>
1996 $ -- $ 809.8
1997 398.3 382.5
1998 70.2 66.8
---------- ----------
468.5 1,259.1
---------- ----------
Purchased Interest Rate Caps:
1997 3,000.0 --
1998 600.0 --
---------- ----------
3,600.0 --
Purchased Options:
1997 6,000.0 --
---------- ----------
Total Options $ 10,068.5 $ 1,259.1
========== ==========
(1) Includes notional amounts for options with amortizing balances. The notional
balances amortize in relation to expected prepayments on the principal balances
of the matched assets.
</TABLE>
FOREIGN CURRENCY INSTRUMENTS
The Company's financing activities subject it to market risk from exposure to
changes in foreign exchange rates. Currency swaps are used to hedge foreign
exchange exposure on foreign currency denominated debt by converting the funding
currency to the currency of the assets being financed. Foreign exchange swaps
are legal agreements between two parties to purchase and sell a foreign
currency, for a price specified at the contract date, with delivery and
settlement in the future.
The notional maturities of currency swaps as of December 31, 1996 and 1995
are as follows:
<TABLE>
<CAPTION>
CURRENCY SWAPS
--------------
DECEMBER 31,
------------
1996 1995
---- ----
(in millions of dollars)
Year Due:
<S> <C> <C> <C>
1996 $ -- $ 796.1
1997 1,327.1 732.4
1998 797.0 337.8
1999 1,205.8 529.8
2000 94.0 2.0
2001 538.4 86.6
2002 367.2 --
---------- ----------
Total $ 4,329.5 $ 2,484.7
========== ==========
</TABLE>
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16. DERIVATIVE FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED)
Reconciliations of the Company and its subsidiaries' interest rate and currency
swaps activities for the years ended December 31, 1996 and 1995, are as follows:
<TABLE>
<CAPTION>
INTEREST RATE SWAPS CURRENCY SWAPS
------------------- --------------
DECEMBER 31, DECEMBER 31,
------------ ------------
1996 1995 1996 1995
---- ---- ---- ----
(in millions of dollars)
<S> <C> <C> <C> <C>
Beginning notional amount $ 9,756.3 $ 6,620.0 $ 2,484.7 $ 1,757.1
Add:
New contracts 9,063.3 5,636.0 3,940.2 2,624.2
Less:
Terminated contracts 1,700.0 1,000.0 -- --
Expired contracts 1,738.7 1,499.7 2,095.4 1,896.6
--------- --------- --------- ---------
Ending notional amount $15,380.9 $ 9,756.3 $ 4,329.5 $ 2,484.7
========= ========= ========= =========
The following table summarizes the notional amounts of the Company and its
subsidiaries' currency and interest rate swaps by major currency:
<CAPTION>
DECEMBER 31,
------------
1996 1995
---- ----
(in millions of dollars)
Currency Swaps (by currency paid):
<S> <C> <C>
Australian dollars $ 873.6 $ 810.9
Canadian dollars 788.9 728.0
United Kingdom pounds sterling 1,228.5 559.0
United States dollars 492.8 97.8
Other 945.7 289.0
---------- ----------
Total currency swaps $ 4,329.5 $ 2,484.7
---------- ----------
Interest Rate Swaps:
United States $ 13,766.9 $ 9,230.1
Australia 1,047.6 191.5
Canada 357.5 212.7
Other 208.9 122.0
---------- ----------
Total interest rate swaps $ 15,380.9 $ 9,756.3
---------- ----------
Total currency and interest rate swaps $ 19,710.4 $ 12,241.0
========== ==========
</TABLE>
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16. DERIVATIVE FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED)
MORTGAGE CONTRACTS
GMACMG uses various off-balance sheet financial instruments in the normal course
of business to manage inherent risk. The derivative financial instruments are
held for purposes other than trading and consist primarily of interest rate
floors and caps, written and purchased option contracts, futures contracts, and
individually tailored swap products.
GMACMG uses derivative financial instruments to hedge price risk associated with
its mortgage loans held for sale. At December 31, 1996 and 1995, the notional
amount of such instruments totaled $2,433.3 million and $100.0 million,
respectively. Realized and unrealized gains and losses associated with these
instruments are considered in the lower of cost or market valuation of the
mortgage loans. At December 31, 1996, GMACMG had options contracts outstanding
on U.S. Treasury instruments and mortgage-related securities.
GMACMG uses derivative financial instruments to hedge price and interest rate
risk associated with its mortgage-related securities. At December 31, 1996 and
1995, the notional amount of such instruments totaled $4,785.5 million and $66.0
million, respectively. Realized and unrealized gains and losses associated with
these instruments are recognized in the current period on a mark-to-market
basis. At December 31, 1996, GMACMG had options and futures contracts
outstanding on U.S. Treasury instruments and eurodollars, and had entered into
interest rate swap agreements.
GMACMG enters into interest rate swap contracts in an effort to stabilize
short-term borrowing costs and maintain a minimum return on certain loans held
for investment. At December 31, 1996 and 1995, the notional amount of these
instruments totaled $326.6 million and $133.0 million, respectively. The
contracts involve the delivery of fixed payments to a counterparty in return for
variable payments based upon a published index. The contracts' values fluctuate
inversely to the values of the related loan portfolio. The contracts have
maturities ranging from two to seven years. Amounts paid or received under such
contracts are recorded as an adjustment to interest expense.
GMACMG uses interest rate caps and floors, futures, and options on futures
contracts to manage potential prepayment activity associated with mortgage
servicing rights. At December 31, 1996 and 1995, the notional amount of such
instruments totaled $10,960.0 million and $5,022.0 million, respectively. The
maturities of these instruments range between four months and five years. These
instruments are carried at fair value, with adjustments recorded to the basis of
mortgage servicing rights.
GMACMG enters into various commitments to purchase or originate mortgage loans
in the normal course of business. Commitments to purchase or originate mortgage
loans totaled $2,626.8 million and $2,895.9 million at December 31, 1996 and
1995, respectively. These commitment obligations are considered in conjunction
with the lower of cost or market valuation of mortgage inventory held for sale.
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16. DERIVATIVE FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED)
Warehouse lending involves the extension of short-term secured lines of credit
to mortgage originators to finance mortgage loans until such loans are purchased
by a permanent investor. Advances under the lines of credit are fully secured by
the underlying mortgages and bear interest at a rate which is tied to a
short-term index. At December 31, 1996 and 1995, unused warehouse lending
commitments totaled $1,793.7 million and $1,234.3 million, respectively. GMACMG
enters into foreign exchange contracts to hedge foreign exchange risks
associated with overseas lending. At December 31, 1996, the notional amounts of
such instrument totaled $57.1 million. There were no contracts outstanding at
December 31, 1995. Construction lending involves the extension of long-term
secured lines of credit to construction project managers. At December 31, 1996
and 1995, unused construction lending commitments totaled $427.0 million and
$239.9 million, respectively. In addition, GMACMG also has outstanding
commitments to lend on available credit lines, primarily home equity lines of
credit. At December 31, 1996 and 1995, unused lending commitments on these lines
totaled $548.5 million and $343.7 million, respectively.
GMACMG sells a majority of its originated loans into various governmental agency
(FHLMC, FNMA and GNMA) mortgage-backed securities and whole loans to private
investors. GMACMG generally packages its purchased mortgage loans into private
mortgage-backed securities for sale to investment bankers and private mortgage
investors. Commitments to sell mortgage loans totaled $417.7 million and $435.9
million at December 31, 1996 and 1995, respectively. Commitments to sell
securities totaled $1,113.6 million and $1,717.8 million at December 31, 1996
and 1995, respectively.
CREDIT RISK
These aforementioned instruments contain an element of risk in the event the
counterparties are unable to meet the terms of the agreements. However, the
Company minimizes the risk exposure by limiting the counterparties to those
major banks and financial institutions who meet established credit guidelines.
Management also reduces its credit risk for unused lines of credit it extends by
applying the same credit policies in making commitments as it does for extending
loans. Management does not expect any counterparty to default on its obligations
and, therefore, does not expect to incur any cost due to counterparty default.
The Company does not require or place collateral for these financial
instruments, except for the lines of credit it extends.
CONCENTRATIONS OF CREDIT RISK
The Company's primary business is to provide vehicle financing for GM products
and GM dealers. Wholesale and dealer loan financing relates primarily to GM
dealers, with collateral primarily GM vehicles (for wholesale) and GM dealership
property (for loans). In wholesale financing, GMAC is also provided further
protection by GM factory repurchase programs. Retail contracts and operating
lease assets relate primarily to the secured sale and lease, respectively, of
vehicles (primarily GM).
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16. DERIVATIVE FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONCLUDED)
In terms of geographic concentrations as of December 31, 1996, 75.2% of GMAC's
consolidated financing assets were U.S. based; 14.1% were in Europe (of which
47.6% reside in Germany); 6.7% were in Canada; 2.9% were in Asia Pacific (of
which Australia represents 84.6%); and 1.1% were in Latin America. Reflecting
general U.S. population patterns and GM sales activities, GMAC's five largest
U.S. state concentrations, which in aggregate total 38.3% of U.S. automotive
financing assets, were as follows: 9.2% in Texas; 8.7% in California; 8.2% in
Michigan; 7.3% in Florida; and 4.9% in Illinois.
NOTE 17. SEGMENT INFORMATION
INDUSTRY SEGMENTS
The business of the Company and its subsidiaries is comprised primarily of
financing and insurance operations.
Gross revenue, income before income taxes and assets applicable to financing and
insurance operations are as follows:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
(in millions of dollars)
Gross revenue
<S> <C> <C> <C>
Financing operations .......... $ 14,359.3 $ 13,359.6 $ 10,638.5
Insurance operations .......... 1,616.8 1,604.0 1,536.2
Eliminations (a) .............. (2.4) (100.4) (29.7)
---------- ---------- ----------
Total .......................... $ 15,973.7 $ 14,863.2 $ 12,145.0
========== ========== ==========
Income before income taxes and
cumulative effect of accounting
changes
Financing operations .......... $ 1,837.0 $ 1,574.8 $ 1,298.6
Insurance operations .......... 240.7 208.4 141.2
---------- ---------- ----------
Total .......................... $ 2,077.7 $ 1,783.2 $ 1,439.8
========== ========== ==========
Assets at end of the year
Financing operations .......... $ 93,620.7 $ 90,827.2 $ 82,188.3
Insurance operations .......... 5,020.3 4,871.4 4,390.7
Eliminations (b) .............. (63.0) (51.1) (61.7)
---------- ---------- ----------
Total .......................... $ 98,578.0 $ 95,647.5 $ 86,517.3
========== ========== ==========
(a) Primarily intersegment insurance premiums earned.
(b) Intersegment insurance receivables.
</TABLE>
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 17. SEGMENT INFORMATION (CONCLUDED)
GEOGRAPHIC SEGMENTS
Although the majority of its business is done in the United States, the Company
also operates directly or through subsidiaries in many other countries around
the world.
Gross revenue, income before income taxes and assets applicable to the Company's
geographic areas of operations are as follows:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
(in millions of dollars)
Gross revenue
<S> <C> <C> <C>
United States ................. $ 12,043.3 $ 11,130.2 $ 9,069.6
Canada ........................ 1,107.2 1,027.2 835.3
Europe ........................ 2,310.1 2,318.0 1,973.1
Other countries ............... 513.3 402.1 278.6
Eliminations (a) .............. (0.2) (14.3) (11.6)
---------- ---------- ----------
Total .......................... $ 15,973.7 $ 14,863.2 $ 12,145.0
========== ========== ==========
Income before income taxes and
cumulative effect of accounting
changes
United States ................. $ 1,503.6 $ 1,234.3 $ 878.2
Canada ........................ 148.5 64.0 45.1
Europe ........................ 358.6 430.5 480.2
Other countries ............... 67.0 54.4 36.3
---------- ---------- ----------
Total .......................... $ 2,077.7 $ 1,783.2 $ 1,439.8
========== ========== ==========
Assets at end of the year
United States ................. $ 76,033.8 $ 74,550.6 $ 67,924.7
Canada ........................ 6,187.6 5,573.9 5,066.0
Europe ........................ 12,638.2 12,424.7 11,118.8
Other countries ............... 3,718.4 3,432.8 2,742.3
Eliminations (b) .............. -- (334.5) (334.5)
---------- ---------- ----------
Total .......................... $ 98,578.0 $ 95,647.5 $ 86,517.3
========== ========== ==========
(a) Intersegment interest income.
(b) Intersegment finance receivables.
</TABLE>
<PAGE>
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 18. COMMITMENTS AND CONTINGENT LIABILITIES
Minimum future commitments under operating leases having noncallable lease terms
in excess of one year, primarily for real property, aggregating $193.2 million,
are payable $55.9 million in 1997, $44.5 million in 1998, $34.8 million in 1999,
$23.1 million in 2000, $12.7 million in 2001, and $22.2 million in 2002 and
thereafter. Certain of the leases contain escalation clauses and renewal or
purchase options. Rental expenses under operating leases were $109.9 million,
$70.8 million and $57.6 million in 1996, 1995 and 1994, respectively.
The Company and MIC have entered into an agreement under which Electronic Data
Systems Corporation (EDS), a former subsidiary of GM, will continue to be the
principal provider of information technology services through 1999. GMACMG,
excluding RFC, has entered into a similar agreement through 2000. An additional
agreement has been signed for EDS to provide support for the Company's European
information technology related activities through 2001.
There are various claims and pending actions against the Company and its
subsidiaries with respect to commercial and consumer financing matters, taxes,
insurance and other matters arising out of the conduct of the business. Certain
of these actions are or purport to be class actions, seeking damages in very
large amounts. The amounts of liability on these claims and actions at December
31, 1996 were not determinable but, in the opinion of management, the ultimate
liability resulting therefrom should not have a material adverse effect on the
Company's consolidated financial position or results of operations.
----------
<PAGE>
<TABLE>
SUPPLEMENTARY FINANCIAL DATA
SUMMARY OF CONSOLIDATED QUARTERLY EARNINGS
<CAPTION>
1996 QUARTERS
-------------
FIRST SECOND THIRD FOURTH
----- ------ ----- ------
(in millions of dollars)
<S> <C> <C> <C> <C>
Total financing revenue .... $ 3,179.2 $ 3,124.3 $ 3,163.8 $ 3,176.5
Interest and discount
expense ................... 1,239.7 1,224.6 1,220.3 1,252.9
Net financing revenue and
other income .............. 1,533.4 1,605.5 1,616.8 1,653.5
Provision for financing
losses .................... 155.2 134.6 143.5 235.7
Net income ................. $ 309.1 $ 350.0 $ 307.3 $ 274.1
- ------------------------------------------------------------------------------
<CAPTION>
1995 QUARTERS
-------------
FIRST SECOND THIRD FOURTH
----- ------ ----- ------
(in millions of dollars)
<S> <C> <C> <C> <C>
Total financing revenue .... $ 2,717.4 $ 2,917.6 $ 2,959.6 $ 3,069.4
Interest and discount
expense ................... 1,219.8 1,275.3 1,222.9 1,218.3
Net financing revenue and
other income .............. 1,278.2 1,426.9 1,361.3 1,555.7
Provision for financing
losses .................... 55.0 133.3 118.9 141.6
Net income ................. $ 254.9 $ 259.2 $ 253.7 $ 263.2
- ------------------------------------------------------------------------------
<CAPTION>
1994 QUARTERS
-------------
FIRST SECOND THIRD FOURTH
----- ------ ----- ------
(in millions of dollars)
<S> <C> <C> <C> <C>
Total financing revenue .... $ 2,163.0 $ 2,304.7 $ 2,351.5 $ 2,599.6
Interest and discount
expense ................... 1,010.0 1,045.3 1,041.6 1,134.0
Net financing revenue and
other income .............. 1,155.2 1,158.2 1,157.3 1,209.6
Provision for financing
losses .................... 64.1 54.8 (8.5) 66.9
Income before cumulative
effect of accounting
change .................... 224.9 216.1 244.6 241.5
Cumulative effect of accounting
change .................... (7.4)* -- -- --
Net Income ................. $ 217.5 $ 216.1 $ 244.6 $ 241.5
- ------------------------------------------------------------------------------
* Effective January 1, 1994, the Company adopted SFAS No. 112 - Employer's
Accounting for Postemployment Benefits.
</TABLE>
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K.
(a) (1) FINANCIAL STATEMENTS.
Included in Part II, Item 8 of Form 10-K.
(a) (2) FINANCIAL STATEMENT SCHEDULES.
All schedules have been omitted because they are inapplicable or
because the information called for is shown in the financial
statements or notes thereto.
(a) (3) EXHIBITS (Included in Part IV of this report). PAGE
12 -- Statement of Ratio of Earnings to Fixed 69
Charges for the years 1996, 1995, 1994,
1993 and 1992.
23.1 -- Consent of Independent Auditors. 70
27 -- Financial Data Schedule (for SEC electronic --
filing information only).
(b) REPORTS ON FORM 8-K.
No current reports on Form 8-K have been filed by the Company during the fourth
quarter of 1996.
ITEMS 4, 9, 10, 11, 12 and 13 are inapplicable and have been omitted.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
GENERAL MOTORS ACCEPTANCE CORPORATION
-------------------------------------
(Registrant)
By
S/ J. M. LOSH
---------------------------------------
DATE: MARCH 14, 1997 (J. Michael Losh, Chairman of the Board)
Pursuant to the Requirements of the Securities Exchange Act of 1934, this report
has been signed below on the 14th day of March, 1997, by the following persons
on behalf of the Registrant and in the capacities indicated.
SIGNATURE TITLE
--------- -----
S/ J. M. LOSH
- ------------------------
(J. Michael Losh) Chairman of the
Board of Directors
S/ J. R. RINES
- ------------------------
(John R. Rines) President and (Signing as
Director Chief
Executive
Officer)
S/ E. A. FELDSTEIN
- ------------------------
(Eric A. Feldstein) Executive Vice (Chief
President and Director Financial
Officer)
S/ G. E. GROSS
- ------------------------
(Gerald E. Gross) Comptroller (Signing as
Chief
Accounting
Officer)
S/ R. J. S. CLOUT
- ------------------------
(Richard J. S. Clout) Executive Vice
President and Director
S/ J. E. GIBSON
- ------------------------
(John E. Gibson) Executive Vice
President and Director
<PAGE>
SIGNATURES (CONCLUDED)
S/ J. D. FINNEGAN
- ------------------------
(John D. Finnegan) Director
S/ L. J. KRAIN
- ------------------------
(Leon J. Krain) Director
S/ H. J. PEARCE
- ------------------------
(Harry J. Pearce) Director
S/ W. A. REED
- ------------------------
(W. Allen Reed) Director
S/ J. F. SMITH, JR.
- ------------------------
(John F. Smith, Jr.) Director
S/ R. L. ZARRELLA
- ------------------------
(Ronald L. Zarrella) Director
<PAGE>
EXHIBIT INDEX
Exhibit
NUMBER EXHIBIT NAME
- ------ ------------
12 Ratio of Earnings to Fixed Charges
23.1 Consent of Independent Auditors,
Deloitte & Touche LLP
27 Financial Data Schedule (for SEC
electronic filing information only)
<PAGE>
<TABLE>
EXHIBIT 12
GENERAL MOTORS ACCEPTANCE CORPORATION
RATIO OF EARNINGS TO FIXED CHARGES
<CAPTION>
For the Years ended December 31,
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
(in millions of dollars)
Consolidated net
<S> <C> <C> <C> <C> <C>
income* ......... $ 1,240.5 $ 1,031.0 $ 927.1 $ 981.1 $ 1,218.7
Provision for
income taxes .... 837.2 752.2 512.7 591.7 882.3
---------- ---------- ---------- ---------- ----------
Consolidated income
before income
taxes ........... 2,077.7 1,783.2 1,439.8 1,572.8 2,101.0
---------- ---------- ---------- ---------- ----------
Fixed charges
Interest, debt
discount and
expense ........ 4,937.5 4,936.3 4,230.9 4,721.2 5,828.6
Portion of rentals
representative of
the interest
factor ......... 77.8 54.5 51.2 43.6 31.7
---------- ---------- ---------- ---------- ----------
Total fixed charges 5,015.3 4,990.8 4,282.1 4,764.8 5,860.3
---------- ---------- ---------- ---------- ----------
Earnings available
for fixed charges $ 7,093.0 $ 6,774.0 $ 5,721.9 $ 6,337.6 $ 7,961.3
========== ========== ========== ========== ==========
Ratio of earnings
to fixed charges 1.41 1.36 1.33 1.33 1.35
==== ==== ==== ==== ====
* Before cumulative effect of accounting change of ($7.4) million in 1994 and
($282.6) million in 1992.
</TABLE>
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
GENERAL MOTORS ACCEPTANCE CORPORATION:
We consent to the incorporation by reference of our report dated January 28,
1997, appearing in this Annual Report on Form 10-K of General Motors Acceptance
Corporation for the year ended December 31, 1996, in the following Registration
Statements:
Registration
FORM STATEMENT NO DESCRIPTION
---- ------------ -----------
S-3 33-31596 $5,000,000,000 General Motors
Acceptance Corporation GMAC
Variable Denomination
Adjustable Rate Demand Notes
S-3 33-64235 $5,000,000,000 General Motors
Acceptance Corporation Debt
Securities
S-3 333-17943 $10,000,000,000 General Motors
Acceptance Corporation
Medium-Term Notes
S-3 333-12023 $500,000,000 General Motors
Acceptance Corporation
SmartNotes
s/ DELOITTE & TOUCHE LLP
- ------------------------
DELOITTE & TOUCHE LLP
600 Renaissance Center
Detroit, Michigan 48243-1704
March 14, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the General
Motors Acceptance Corporation Form 10-K for the period ending December 31, 1996
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000040729
<NAME> GMAC
<MULTIPLIER> 1000000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 742
<SECURITIES> 4557
<RECEIVABLES> 62851
<ALLOWANCES> 922
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 32115
<DEPRECIATION> 7045
<TOTAL-ASSETS> 98578
<CURRENT-LIABILITIES> 50577
<BONDS> 32879
0
0
<COMMON> 2200
<OTHER-SE> 6068
<TOTAL-LIABILITY-AND-EQUITY> 98578
<SALES> 0
<TOTAL-REVENUES> 15974
<CGS> 0
<TOTAL-COSTS> 5599
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 669
<INTEREST-EXPENSE> 4938
<INCOME-PRETAX> 2078
<INCOME-TAX> 837
<INCOME-CONTINUING> 1241
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1241
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the General
Motors Acceptance Corporation Form 10-K for the period ending December 31, 1996
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<RESTATED>
<CIK> 0000040729
<NAME> GMAC
<MULTIPLIER> 1000000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 1340
<SECURITIES> 3892
<RECEIVABLES> 59608
<ALLOWANCES> 693
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 23134
<DEPRECIATION> 5195
<TOTAL-ASSETS> 86517
<CURRENT-LIABILITIES> 40945
<BONDS> 31540
0
0
<COMMON> 2200
<OTHER-SE> 5694
<TOTAL-LIABILITY-AND-EQUITY> 86517
<SALES> 0
<TOTAL-REVENUES> 12145
<CGS> 0
<TOTAL-COSTS> 4265
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 177
<INTEREST-EXPENSE> 4231
<INCOME-PRETAX> 1440
<INCOME-TAX> 513
<INCOME-CONTINUING> 927
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (7)
<NET-INCOME> 920
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
