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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF
- --- 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999, 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
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GENERAL MOTORS ACCEPTANCE CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 38-0572512
- -------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3044 WEST GRAND BOULEVARD, DETROIT, MICHIGAN 48202
- -------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 313-556-5000
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The registrant meets the conditions set forth in General Instruction H(1) (a)
and (b) of Form 10-Q and is therefore filing this Form with the reduced
disclosure format.
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 March 31, 1999, there were outstanding 10 shares of the issuer's common
stock.
Documents incorporated by reference. NONE.
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<PAGE>
This quarterly report, filed pursuant to Rule 13a-13 of the General Rules and
Regulations under the Securities Exchange Act of 1934, consists of the following
information as specified in Form 10-Q:
PART 1. FINANCIAL INFORMATION
The required information is given as to the registrant, General Motors
Acceptance Corporation and subsidiaries (the Company or GMAC).
ITEM 1. FINANCIAL STATEMENTS.
In the opinion of management, the interim consolidated financial
statements reflect all adjustments, consisting of only normal
recurring items which are necessary for a fair presentation of the
results for the interim periods presented. The results for interim
periods are unaudited and are not necessarily indicative of
results which may be expected for any other interim period or for
the full year. These financial statements should be read in
conjunction with the consolidated financial statements, the
significant accounting policies, and the other notes to the
consolidated financial statements included in the Company's 1998
Annual Report filed with the Securities and Exchange Commission on
Form 10-K.
The Financial Statements described below are submitted herein as
Exhibit 20.
1. Consolidated Balance Sheet, March 31, 1999, December 31,
1998 and March 31, 1998.
2. Consolidated Statement of Income, Net Income Retained for
Use in the Business and Comprehensive Income for the Three
Months Ended March 31, 1999 and 1998.
3. Consolidated Statement of Cash Flows for the Three Months
Ended March 31, 1999 and 1998.
4. Notes to Consolidated Financial Statements.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
EARNINGS
Consolidated net income for the quarter increased 12% when compared to the same
period during 1998.
Three Months Ended March 31,
-------------------------------------
1999 1998
--------------- ----------------
(in millions of dollars)
Automotive financing operations $229.6 $246.6
Insurance operations* 64.9 79.7
Mortgage operations** 97.8 23.0
================ ================
Consolidated net income $392.3 $349.3
================ ================
* GMAC Insurance Holdings, Inc. (GMACI)
** GMAC Mortgage Group, Inc. (GMACMG)
Net income from automotive financing operations declined 7% in the first quarter
of 1999, compared to the same period in 1998. The reduction in earnings was
primarily a result of a significantly lower effective tax rate in the first
quarter of 1998.
Earnings from insurance operations decreased by 19% during the first quarter of
1999, compared to the same period during 1998. Earnings were lower principally
from reduced investment income and underwriting results. Investment income was
reduced as a result of declining interest rates and a shift in asset mix toward
equity securities.
Net income from mortgage operations during the first quarter of 1999 increased
to a record level, posting a $74.8 million increase over results from the
comparable period in 1998. Earnings increased as a result of improved liquidity
and tighter credit spreads in the capital markets and the benefits of certain
asset positions carried over from the fourth quarter of 1998. The strong
period-over-period comparison also reflects unusually low earnings in the first
quarter of 1998, which were negatively impacted by accelerated prepayment
experience on mortgage assets.
UNITED STATES NEW PASSENGER CAR AND TRUCK DELIVERIES
U.S. deliveries of new General Motors (GM) vehicles during the three months
ended March 31, 1999 were slightly higher than comparable 1998 levels. The
decline in financing penetration was primarily the result of competitive market
conditions.
Three Months Ended March 31,
-----------------------------
1999 1998
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(in millions of units)
Industry 4.0 3.6
General Motors 1.2 1.1
U.S. new GM vehicle deliveries financed by GMAC
Retail (installment sale contracts and
operating leases) 40.2% 43.4%
Fleet transactions (lease financing) 2.1% 1.9%
Total 31.7% 34.5%
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
FINANCING VOLUME
The number of new vehicle deliveries financed during the three months ended
March 31, 1999 and 1998 are summarized below:
Three Months Ended March 31,
-------------------------------
1999 1998
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(in thousands of units)
UNITED STATES
Retail installment sale contracts 225 233
Operating leases 155 142
Leasing 8 6
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New deliveries financed 388 381
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OTHER COUNTRIES
Retail installment sale contracts 100 108
Operating leases 61 56
Leasing 14 20
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New deliveries financed 175 184
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WORLDWIDE
Retail installment sale contracts 325 341
Operating leases 216 198
Leasing 22 26
============ ============
New deliveries financed 563 565
============ ============
The number of new vehicles financed in the U.S. during the first quarter of 1999
was slightly higher than the first quarter of 1998, primarily as a result of
continued operating lease incentive programs sponsored by GM and increased
deliveries of units to dealers. Outside the U.S., the decline in deliveries
financed was mainly attributable to lower leasing volume in Europe.
GMAC also provides wholesale financing for GM and other dealers' new and used
vehicle inventories. In the United States, inventory financing was provided for
868,000 and 725,000 new GM vehicles, representing 66.9% and 62.8% of all GM
sales to dealers during the first quarter of 1999 and 1998, respectively. The
increase in wholesale penetration levels was a result of competitive pricing
strategies by the Company.
INCOME AND EXPENSES
Automotive financing revenue totaled $3,277.1 million in the first quarter of
1999, an increase of $170.3 million compared with the first quarter of 1998. The
increase was mainly due to higher average retail and wholesale receivable
balances which resulted from aggressive retail financing incentives sponsored by
GM and competitive wholesale pricing by the Company.
The Company's worldwide cost of borrowing, including the effects of derivatives,
for the first quarter of 1999 averaged 5.52% compared to 6.11% for the same
period in 1998. Total borrowing costs for U.S. operations averaged 5.44% for the
first quarter of 1999, compared to 6.11% for the same period in 1998. The
decrease in average borrowing costs was largely the result of lower U.S.
interest rates and a greater proportion of floating rate debt compared to fixed
rate debt.
Insurance premiums earned, mortgage revenue and other income totaled $1,548.9
million for the three months ended March 31, 1999, a $329.7 million increase
over the comparable 1998 period. GMACMG recorded higher revenues primarily as a
result of significant acquisitions of mortgage servicing portfolios during 1998
that generated additional servicing fee income in 1999, and increased
securitization volume during the first quarter of 1999. Insurance revenues were
lower principally as a result of a decline in personal lines coverages due to
competitive market conditions.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
INCOME AND EXPENSES (CONCLUDED)
Consolidated salaries and other operating expenses totaled $1,016.9 million and
$788.2 million for the respective quarters ended March 31, 1999 and 1998. The
increase was mainly attributable to continued growth at GMACMG.
Annualized net retail losses were 0.71% of total average serviced automotive
receivables during the first quarter of 1999 compared to 0.98% for the same
period last year. The provision for credit losses totaled $119.3 million and
$107.2 million for the three months ended March 31, 1999 and 1998, respectively.
Although comparable period loss rates declined, the higher loss provision
reflects an increase in retail receivables in the first quarter of 1999 and
favorable wholesale loss provision adjustments during the first quarter of 1998.
The effective income tax rate was 38.8% and 32.1% for the three months ended
March 31, 1999 and 1998, respectively. The comparative increase in the effective
tax rate can be attributed to a significantly lower effective tax rate for the
first quarter of 1998 due to a decrease in U.S. and foreign taxes assessed on
foreign source income.
INSURANCE OPERATIONS
Net premiums earned by GMACI and its subsidiaries totaled $446.6 million and
$471.0 million for the three months ended March 31, 1999 and 1998, respectively.
Pre-tax capital gains and investment and other income at GMACI totaled $140.3
million for the quarter ended March 31, 1999, compared to $147.7 million for the
quarter ended March 31, 1998. Insurance losses and loss adjustment expenses
totaled $347.2 million and $353.0 million during the same comparable periods.
The decrease in net premiums earned was primarily a result of a decline in
personal lines coverages.
Net income for the first quarter of 1999 was $64.9 million, compared to $79.7
million earned during the same period in 1998. Earnings were lower principally
from reduced investment income and underwriting results. Investment income was
reduced as a result of declining interest rates and a shift in asset mix toward
equity securities.
MORTGAGE OPERATIONS
During the first quarter of 1999, GMACMG loan originations, mortgage servicing
acquisitions and correspondent loan volume totaled $17.8 billion, compared to
$16.8 billion for the same period in 1998. As a result of significant mortgage
servicing portfolio acquisitions and continued growth, the combined GMACMG
servicing portfolio, excluding GMAC term loans to dealers, totaled $245.9
billion at March 31, 1999, compared with $245.0 billion and $147.7 billion
serviced at December 31 and March 31, 1998, respectively.
In April 1999, GMACMG completed the acquisition of DiTech Funding Corporation, a
mortgage provider specializing in direct marketing programs.
For the first three months of 1999, net income was $97.8 million, compared to
$23.0 million for the same period in 1998. The significant increase in income
was primarily attributable to improved liquidity and tighter credit spreads in
the capital markets and the benefits of certain asset positions carried over
from the fourth quarter of 1998. The strong period-over-period comparison also
reflects unusually low earnings in the first quarter of 1998, which were
negatively impacted by accelerated prepayment experience on mortgage assets.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
FINANCIAL CONDITION AND LIQUIDITY
At March 31, 1999, the Company owned assets and serviced automotive receivables
totaling $140.7 billion, $2.0 billion above year-end 1998, and $15.1 billion
above March 31, 1998. The higher balance compared to the first quarter of last
year primarily reflects increases in on-balance sheet finance receivables as
well as higher operating lease assets, partially offset by a decline in sold
wholesale receivables.
Earning assets totaled $124.7 billion at March 31, 1999, compared to $125.1
billion and $109.1 billion at December 31 and March 31, 1998, respectively.
Finance receivables serviced by the Company, including sold receivables, totaled
$85.1 billion at March 31, 1999, $5.2 billion above December 31, 1998 levels and
$9.6 billion above March 31, 1998 levels. The change since December 31, 1998 can
be attributed to a $3.4 billion increase in on-balance sheet wholesale
receivables and a $1.8 billion increase in serviced retail receivables. The
year-to-year change primarily resulted from increases of $4.7 billion, $4.3
billion and $2.4 billion in the on-balance sheet retail, wholesale and term
loans receivable portfolios, respectively. Also contributing to the year-to-year
increase, sold retail receivables (including the retained subordinated interest
portion) increased by $0.8 billion. Offsetting these increases, sold wholesale
receivables decreased $2.6 billion, primarily attributable to the scheduled wind
down of a revolving wholesale trust.
Consolidated operating lease assets, net of depreciation, totaled $27.7 billion
at March 31, 1999, reflecting a decrease of $0.2 billion from December 31, 1998
and an increase of $1.4 billion over March 31, 1998, respectively. The
year-to-year increase was primarily attributable to strong GM sponsored lease
incentive programs in the U.S. and Canada.
Investments in securities at March 31, 1999 totaled $8.5 billion, compared with
$8.7 billion and $7.7 billion at December 31 and March 31, 1998, respectively.
The year-to-year increase was principally the result of continued growth at
GMACMG, partially offset by a decline in the investment portfolio at GMACI.
The Company's due and deferred from receivable sales (net) was $(12.2 million)
at March 31, 1999, compared with $111.5 million and $258.6 million at December
31 and March 31, 1998, respectively. The year-to-year decline was primarily due
to the effects of a scheduled wind down of a revolving wholesale trust. Also
contributing to the decline was an increase in the payable to the trusts due to
an additional sale of retail receivables in the first quarter of 1999.
As of March 31, 1999, GMAC's total borrowings were $105.3 billion, compared with
$106.2 billion and $90.1 billion at December 31, 1998 and March 31, 1998,
respectively. The higher borrowings, as compared to March 31, 1998, were
principally used to fund increased earning asset levels. GMAC's ratio of debt to
total stockholder's equity at March 31, 1999 was 10.5:1, compared to 10.8:1 at
December 31, 1998 and 9.9:1 at March 31, 1998.
The Company and its subsidiaries maintain substantial bank lines of credit which
totaled $42.0 billion at March 31, 1999, compared to $42.9 billion at year-end
1998 and $40.0 billion at March 31, 1998. The unused portion of these credit
lines totaled $32.4 billion at March 31, 1999, $0.8 billion lower and $1.3
billion higher than December 31 and March 31, 1998, respectively. 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 commercial paper
program and a $12.0 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.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
FINANCIAL CONDITION AND LIQUIDITY (CONCLUDED)
As discussed in the Company's 1998 Annual Report on Form 10-K, the Company
utilizes a variety of interest rate and currency derivative instruments in
managing its interest rate and foreign exchange exposures. The total notional
amount of the derivatives portfolio decreased from $107.7 billion at December
31, 1998 to $82.5 billion at March 31, 1999. The change was primarily
attributable to a decrease in financial instruments associated with mortgage
servicing.
YEAR 2000
Many computerized systems and microprocessors that are used by GMAC have the
potential for operational problems if they lack the ability to handle the
transition to the Year 2000. This issue has the potential to cause disruption to
the business of GMAC and its customers. In its capacity as a wholly owned
subsidiary of GM, GMAC is part of GM's comprehensive worldwide Year 2000
program. As part of that program, GMAC has been identifying and remediating
potential Year 2000 problems in its business information systems and other
equipment in its operations. GMAC has also initiated communications with its
service and technology providers, landlords, dealers and other third parties
in order to assess and reduce the risk that GMAC's operations could be adversely
affected by the failure of these third parties to adequately address the Year
2000 issue.
GMAC's Year 2000 program teams are responsible for remediating all of GMAC's
information technology. Information technology principally consists of business
information systems (such as mainframe and other shared computers and associated
business application software) and infrastructure (such as personal computers,
operating systems, networks and devices like switches and routers). GMAC's Year
2000 program includes assessment and remediation services provided by Electronic
Data Systems Corporation (EDS) pursuant to a Master Service Agreement with GM.
The Year 2000 program is being implemented in seven phases, some of which are
being conducted concurrently:
INVENTORY - identification and validation of an inventory of all systems
and infrastructure components that could be affected by the Year 2000
issue. The inventory phase commenced in earnest in 1996 and is
substantially complete. It has identified approximately 2,000 business
information systems/applications.
ASSESSMENT - initial testing, code scanning, and technology provider
contacts to determine whether remediation is needed and to develop a
remediation plan, if applicable. The assessment of business information
systems is substantially complete and included a determination that
approximately one half of such systems should be regarded as critical based
on criteria such as the potential for business disruption. The assessment
of infrastructure is also substantially complete.
REMEDIATION - design and execution of a remediation plan, followed by
testing for adherence to the design. GMAC has substantially completed the
remediation of its critical systems. Unimportant systems have been, and
will continue to be, removed from our Year 2000 inventory and will not be
remediated. This phase is also substantially complete. In the normal course
of its business plans, GMAC is also incrementally implementing enterprise
software and other common applications that will replace and thereby
eliminate the need to remediate certain existing systems. Implementation of
this software continued throughout 1998 and the first quarter of 1999, with
a few sites not scheduled to be complete until the second quarter of 1999.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
YEAR 2000 (CONTINUED)
SYSTEM TESTING - testing of remediated items to ensure that they function
normally after being placed back in their original operating environment.
This phase is closely related to the remediation phase and follows
essentially the same schedule.
IMPLEMENTATION - return of items to normal operation after satisfactory
performance in system testing. This phase follows essentially the same
schedule as remediation and system testing.
READINESS TESTING - planning for and testing of integrated systems in a
Year 2000 ready environment, including ongoing auditing and follow-up.
Readiness testing is largely completed, with a few exceptions.
CONTINGENCY PLANNING - development and execution of plans that focus on
specific areas of significant concern and concentrate resources to address
them. GMAC currently believes that the most reasonably likely worst case
scenario is that there will be some localized disruptions of systems that
will affect individual business processes, facilities or service and
technology providers for a short time rather than systematic or long-term
problems affecting our business operations as a whole. GMAC contingency
planning continues to identify systems or other aspects of its business
that it believes would be most likely to experience Year 2000 problems.
GMAC contingency planning is also addressing those business operations in
which a localized disruption could have the potential for causing a wider
problem by interrupting the flow of data or services to other operations.
Because there is an uncertainty as to which activities may be affected, and
the exact nature of the problems which may arise, contingency planning
focuses on minimizing the scope and duration of any disruption by having
sufficient personnel and other resources in place to permit a flexible,
real-time response to specific problems as they may arise at individual
locations around the world. Some of the actions that are being planned
include the establishment of Year 2000 Command Centers and development of
detailed manual procedures. GMAC is leveraging off its existing Disaster
Recovery and Business Resumption Plans and Processes, while expanding its
scope to encompass Year 2000 concerns. The target for completion of these
plans is the first half of 1999, with subsequent testing and refinement.
GMAC's communication with its service and technology providers is a focused
element of the assessment phase described above. GMAC is a leading participant
in the Financial Services Sub-Group of the Automotive Industry Action Group
(AIAG), an automotive industry trade association, which has distributed Year
2000 compliance questionnaires to many critical financial service providers that
supply GMAC with services throughout the world. Responses to these
questionnaires have been received from approximately ninety percent of the North
American providers and approximately three-quarters of the international
providers to which they were sent. In addition, GMAC has initiated its own
contact and review of these providers and other non-financial service providers
considered to be critical to GMAC's operations, including follow-up to the AIAG
questionnaire. GMAC has also initiated contact with the landlords or property
managers of its facilities throughout the world, to assess the ongoing
functionality of the space it rents from others. Responses have been received
from more than 90% of the contacts.
GMAC also has a program to work with some of its largest customers, primarily
automotive dealers and lease/rental companies, on their Year 2000 readiness.
This program, developed in conjunction with GM, includes distributing materials
that assist them in designing and executing their own assessment and remediation
efforts.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
YEAR 2000 (CONCLUDED)
The cost of GMAC's Year 2000 program is being expensed as incurred with the
exception of capitalizable replacement hardware. Total incremental spending by
GMAC is not expected to be material to the Company's operations, liquidity or
capital resources. GMAC incurred approximately $35 million of Year 2000 expense
through 1998 and an additional $5 million during the first quarter of 1999. GMAC
expects its total Year 2000 expense to be approximately $75 million, with peak
spending occurring in late 1998 and the first half of 1999. This total spending
also includes an additional payment to EDS of approximately $12 million (part of
GM's overall additional payment to EDS of approximately $75 million) at the end
of the first quarter of 2000 if systems remediated by EDS under its Master
Service Agreement with GM are capable of continued operation before, on and
after January 1, 2000 without causing a significant business disruption that
results in a material financial loss to GM due to the millennium change.
The estimated value of the services EDS is required to provide to GMAC under the
Master Service Agreement with GM that are included in normal fixed price
services and other ongoing payments to EDS that are attributable to work being
performed in connection with GMAC's Year 2000 program is approximately $13
million, (net of the aforementioned potential $12 million payment at the end of
the first quarter of 2000). This $13 million does not represent incremental
spending to GMAC. GMAC's Year 2000 program costs do not include information
technology projects that have been delayed due to Year 2000, which are estimated
to be $15-20 million, or information technology projects that have been
accelerated due to Year 2000, which are estimated to be less than $5 million.
In view of the foregoing, GMAC does not currently anticipate that it will
experience a significant disruption of its business as a result of the Year 2000
issue. However, there is still uncertainty about the broader scope of the Year
2000 issue as it may affect GMAC and third parties that are critical to GMAC's
operations. For example, lack of readiness by electrical and water utilities,
financial institutions, governmental agencies or other providers of general
infrastructure could, in some geographic areas, pose significant impediments to
GMAC's ability to carry on its normal operations in the area or areas so
affected. In the event that GMAC is unable to complete its remedial actions as
described above and is unable to implement adequate contingency plans in the
event that problems are encountered, there could be a material adverse effect on
GMAC's business, results of operations or financial condition.
Statements made herein regarding the implementation of various phases of GMAC's
Year 2000 program, the costs expected to be associated with that program and the
results that GMAC expects to achieve constitute forward-looking information. As
noted above, there are many uncertainties involved in the Year 2000 issue,
including the extent to which GMAC will be able to successfully remediate
systems and adequately provide for contingencies that may arise as well as the
broader scope of the Year 2000 issue as it may affect third parties that are not
controlled by GMAC. Accordingly, the costs and results of GMAC's Year 2000
program and the extent of any impact on GMAC's operations could vary materially
from those stated herein.
EURO CONVERSION
On January 1, 1999, eleven of fifteen member countries of the European Monetary
Union established fixed conversion rates between their existing currencies and
adopted the euro as their new common currency. The euro trades on currency
exchanges and the legacy currencies remain legal tender in the participating
countries for a transition period until January 1, 2002. Beginning on January 1,
2002, euro denominated bills and coins will be issued and legacy currencies will
be withdrawn from circulation.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONCLUDED)
EURO CONVERSION (CONCLUDED)
The Company has established plans to assess and address the potential impact to
GMAC that may result from the euro conversion. These issues include, but are
not limited to: 1) the technical challenges to adapt information systems to
accommodate euro transactions; 2) the competitive impact of cross-border price
transparency; 3) the impact on currency exchange rate risks; 4) the impact on
existing contracts; and 5) tax and accounting implications. The Company
expects that the euro conversion will not have a material adverse impact on its
financial condition or results of operations.
In those countries that have adopted the euro currency and in which GMAC has a
presence, the Company offers financial services to dealers and consumers in both
the local currency and the euro.
ACCOUNTING STANDARDS
In October 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 134, Accounting for
Mortgage-Backed Securities Retained after the Securitization of Mortgage Loans
Held for Sale by a Mortgage Banking Enterprise, effective for the first fiscal
quarter beginning after December 15, 1998. The new standard requires that after
the securitization of mortgage loans held for sale, an entity engaged in
mortgage banking activities classify the resulting mortgage-backed security or
other retained interests based on its ability and intent to sell or hold those
investments. The Company adopted this accounting standard in the first quarter
of 1999, as required. The effect of adopting this new accounting standard did
not have a material impact on the Company's consolidated financial statements.
In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities, effective for fiscal years beginning after
June 15, 1999. The new standard requires that all companies record derivatives
on the balance sheet as assets or liabilities, measured at fair value. Gains or
losses resulting from changes in the values of those derivatives would be
accounted for depending on the use of the derivative and whether it qualifies
for hedge accounting. Management is currently assessing the impact of SFAS No.
133 on the consolidated financial statements of the Company. The Company will
adopt this accounting standard on January 1, 2000, as required.
In the first quarter of 1998, the American Institute of Certified Public
Accountants' Accounting Standards Executive Committee issued Statement of
Position (SOP) 98-1, Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use. SOP 98-1 provides guidance on the capitalization of
software for internal use. GMAC adopted SOP 98-1 on January 1, 1999, as
required. The effect of adopting this SOP was not material to the Company's
consolidated financial statements.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company did not become a party to any material pending legal proceedings
during the first quarter ended March 31, 1999, or prior to the filing of this
report.
<PAGE>
ITEM 5. OTHER INFORMATION
RATIO OF EARNINGS TO FIXED CHARGES
Three Months Ended
March 31,
----------------------------
1999 1998
---- ----
1.42 1.37
The ratio of earnings to fixed charges has been computed by dividing earnings
before income taxes and fixed charges by the fixed charges. This ratio includes
the earnings and fixed charges of the Company and its consolidated subsidiaries.
Fixed charges consist of interest, debt discount and expense and the portion of
rentals for real and personal properties in an amount deemed to be
representative of the interest factor.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS
20 General Motors Acceptance Corporation and Subsidiaries
Consolidated Financial Statements for the Three Months
Ended March 31, 1999.
(b) REPORTS ON FORM 8-K.
The Company filed two reports on Form 8-K, dated January 21, 1999 and
April 22, 1999, reporting matters under Item 5, Other Events.
The Company also filed a report on Form 8-K dated April 15, 1999
reporting the following information:
GMAC announced on April 12, 1999 that John D. Finnegan was elected
chairman of GMAC while continuing as its president. He reports to
John F. Smith, Jr., GM chairman and chief executive officer. J.
Michael Losh remains a director of GMAC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GENERAL MOTORS ACCEPTANCE CORPORATION
-------------------------------------
(Registrant)
S/ WILLIAM F. MUIR
Dated: MAY 6, 1999 William F. Muir, Executive Vice
-----------
President and Principal Financial
Officer
S/ GERALD E. GROSS
Dated: MAY 6, 1999 Gerald E. Gross, Comptroller and
-----------
Principal Accounting Officer
<PAGE>
<TABLE>
<CAPTION>
Exhibit 20
Page 1 of 7
GENERAL MOTORS ACCEPTANCE CORPORATION
CONSOLIDATED BALANCE SHEET
March 31, Dec. 31, March 31,
1999 1998 1998
-------------- -------------- --------------
(in millions of dollars)
ASSETS
<S> <C> <C> <C>
Cash and cash equivalents $ 850.2 $ 618.1 $ 845.8
-------------- -------------- --------------
EARNING ASSETS
Investments in securities 8,520.3 8,681.9 7,701.9
Finance receivables, net (Note 1) 74,518.4 71,101.2 63,170.4
Investment in operating leases, net 27,716.4 27,925.8 26,307.9
Notes receivable from General Motors Corporation 2,589.9 2,270.5 2,077.1
Real estate mortgages - held for sale 4,996.0 7,969.7 4,903.2
- held for investment 1,399.9 1,296.7 675.6
- lending receivables 1,423.1 2,063.6 2,196.1
Due and deferred from receivable sales, net (12.2) 111.5 258.6
Other 3,546.6 3,683.7 1,803.3
-------------- -------------- --------------
Total earning assets 124,698.4 125,104.6 109,094.1
-------------- -------------- --------------
Nonearning assets 6,099.3 5,694.8 4,760.2
============== ============== ==============
TOTAL ASSETS $131,647.9 $131,417.5 $114,700.1
============== ============== ==============
LIABILITIES AND STOCKHOLDER'S EQUITY
Notes, loans and debentures payable within one year (Note 2) $ 56,986.4 $ 60,816.7 $ 52,092.7
-------------- -------------- --------------
ACCOUNTS PAYABLE AND OTHER LIABILITIES
General Motors Corporation and affiliated companies 1,243.7 929.6 2,017.9
Interest 1,497.2 1,264.2 1,358.4
Insurance losses and loss expenses 2,037.1 2,062.7 2,085.2
Unearned insurance premiums 1,903.1 1,855.6 1,836.3
Deferred income taxes 3,019.4 2,842.9 2,597.7
United States and foreign income and other taxes payable 480.8 570.7 377.8
Other postretirement benefits 693.1 685.3 669.3
Other 5,433.8 5,241.7 4,620.7
-------------- -------------- --------------
Total accounts payable and other liabilities 16,308.2 15,452.7 15,563.3
-------------- -------------- --------------
Notes, loans and debentures payable after one year (Note 3) 48,339.4 45,356.5 37,981.2
-------------- -------------- --------------
Common stock, $.10 par value (authorized 10,000 shares,
outstanding 10 shares) and paid-in capital 2,200.0 2,200.0 2,200.0
Net income retained for use in the business 7,668.9 7,351.6 6,600.6
Net unrealized gains on securities 328.6 381.5 421.9
Unrealized accumulated foreign currency translation adjustment (183.6) (141.5) (159.6)
-------------- -------------- --------------
Accumulated other comprehensive income 145.0 240.0 262.3
-------------- -------------- --------------
Total stockholder's equity 10,013.9 9,791.6 9,062.9
-------------- -------------- --------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $131,647.9 $131,417.5 $114,700.1
============== ============== ==============
</TABLE>
Certain amounts for 1998 have been reclassified to conform with 1999
classifications.
Reference should be made to the Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
Exhibit 20
Page 2 of 7
GENERAL MOTORS ACCEPTANCE CORPORATION
CONSOLIDATED STATEMENT OF INCOME,
NET INCOME RETAINED FOR USE IN THE BUSINESS AND
COMPREHENSIVE INCOME
Three Months Ended
March 31,
-----------------------------------
1999 1998
---------------- ----------------
(in millions of dollars)
FINANCING REVENUE
<S> <C> <C>
Retail and lease financing $ 1,005.9 $ 902.0
Operating leases 1,795.5 1,784.7
Wholesale and term loans 475.7 420.1
---------------- ----------------
Total automotive financing revenue 3,277.1 3,106.8
Interest and discount 1,512.9 1,384.5
Depreciation on operating leases 1,188.5 1,178.3
---------------- ----------------
Net automotive financing revenue 575.7 544.0
Insurance premiums earned 446.6 471.0
Mortgage revenue 728.2 417.4
Other income 374.1 330.8
---------------- ----------------
Net financing revenue and other 2,124.6 1,763.2
---------------- ----------------
EXPENSES
Salaries and benefits 395.7 289.9
Other operating expenses 621.2 498.3
Insurance losses and loss adjustment expenses 347.2 353.0
Provision for credit losses 119.3 107.2
---------------- ----------------
Total expenses 1,483.4 1,248.4
---------------- ----------------
Income before income taxes 641.2 514.8
United States, foreign and other income taxes 248.9 165.5
---------------- ----------------
NET INCOME 392.3 349.3
Net income retained for use in the business
at beginning of the period 7,351.6 6,326.3
---------------- ----------------
Total 7,743.9 6,675.6
Cash dividends 75.0 75.0
---------------- ----------------
NET INCOME RETAINED FOR USE IN THE BUSINESS
AT END OF THE PERIOD $ 7,668.9 $ 6,600.6
================ ================
TOTAL COMPREHENSIVE INCOME $ 297.3 $ 381.8
================ ================
</TABLE>
Certain amounts for 1998 have been reclassified to conform with 1999
classifications.
Reference should be made to the Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
Exhibit 20
Page 3 of 7
GENERAL MOTORS ACCEPTANCE CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
Three Months Ended
March 31,
--------------------------------
1999 1998
--------------- ---------------
(in millions of dollars)
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 392.3 $ 349.3
Depreciation 1,215.3 1,195.7
Provision for credit losses 119.3 107.2
Gains on sales of finance receivables (54.9) -
Gains on sales of available for sale investment securities (49.9) (49.9)
Mortgage loans - originations/purchases (13,718.3) (11,542.2)
- proceeds on sale 16,692.0 11,758.5
Mortgage related securities held for trading
- acquisitions (448.5) (529.9)
- liquidations 808.8 342.0
Changes in the following items:
Due to General Motors Corporation and affiliated companies 345.1 798.4
Taxes payable and deferred 123.9 107.6
Interest payable 234.2 256.3
Other assets (224.7) (233.6)
Other liabilities 27.3 171.8
Other 132.7 55.0
--------------- ---------------
Net cash provided by operating activities 5,594.6 2,786.2
--------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES
Finance receivables - acquisitions $ (42,869.5) $ (41,799.5)
- liquidations 31,818.6 32,555.6
Notes receivable from General Motors Corporation (305.7) (1,525.4)
Operating leases - acquisitions (3,433.0) (3,713.0)
- liquidations 2,279.2 2,096.6
Investments in available for sale securities:
- acquisitions (5,317.4) (3,200.2)
- maturities 4,431.0 3,138.4
- proceeds from sales 769.8 517.7
Investments in held to maturity securities:
- acquisitions (93.8) -
- maturities - -
Mortgage servicing rights - acquisitions (326.8) (153.4)
- liquidations - 28.5
Proceeds from sales of receivables - wholesale 4,887.3 5,143.4
- retail 2,487.7 -
Due and deferred from receivable sales 111.4 431.9
Other 591.9 131.1
--------------- ---------------
Net cash used in investing activities (4,969.3) (6,348.3)
--------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt 7,559.0 5,515.2
Principal payments on long-term debt (3,659.7) (3,507.9)
Change in short-term debt, net (4,217.9) 1,188.9
Notes payable to General Motors Corporation - 525.0
Dividends paid (75.0) (75.0)
--------------- ---------------
Net cash (used)/provided by financing activities (393.6) 3,646.2
--------------- ---------------
Effect of exchange rate changes on cash and cash equivalents 0.4 2.5
--------------- ---------------
Net increase in cash and cash equivalents 232.1 86.6
Cash and cash equivalents at the beginning of the period 618.1 759.2
=============== ===============
Cash and cash equivalents at the end of the period $ 850.2 $ 845.8
=============== ===============
SUPPLEMENTARY CASH FLOWS INFORMATION
Interest paid $ 1,241.6 $ 1,106.4
Income taxes paid 38.7 105.4
</TABLE>
Certain amounts for 1998 have been reclassified to conform with 1999
classifications.
Reference should be made to the Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
Exhibit 20
Page 4 of 7
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. FINANCE RECEIVABLES
The composition of finance receivables outstanding is summarized as follows:
March 31, Dec. 31, March 31,
1999 1998 1998
------------------ ------------------ ------------------
(in millions of dollars)
United States
<S> <C> <C> <C>
Retail $ 32,563.5 $ 33,320.9 $ 28,440.7
Wholesale 20,561.6 17,721.7 17,054.5
Leasing and lease financing 646.8 631.8 658.4
Other 5,841.2 4,990.4 3,451.6
------------------ ------------------ ------------------
Total United States 59,613.1 56,664.8 49,605.2
------------------ ------------------ ------------------
Europe
Retail 5,073.2 5,282.0 4,967.9
Wholesale 4,253.5 4,422.5 3,130.4
Leasing and lease financing 448.9 483.3 456.9
Other 443.8 473.6 318.3
------------------ ------------------ ------------------
Total Europe 10,219.4 10,661.4 8,873.5
------------------ ------------------ ------------------
Canada
Retail 1,862.5 1,747.2 1,462.8
Wholesale 2,725.4 1,935.7 2,965.1
Leasing and lease financing 795.9 806.0 944.8
Other 100.0 119.1 65.1
------------------ ------------------ ------------------
Total Canada 5,483.8 4,608.0 5,437.8
------------------ ------------------ ------------------
Other Countries
Retail 2,409.1 2,308.2 2,138.5
Wholesale 927.9 1,017.7 1,063.9
Leasing and lease financing 629.3 583.3 535.6
Other 205.6 258.2 129.6
------------------ ------------------ ------------------
Total Other Countries 4,171.9 4,167.4 3,867.6
------------------ ------------------ ------------------
Total finance receivables 79,488.2 76,101.6 67,784.1
Deductions
Unearned income 3,940.3 3,979.8 3,689.2
Allowance for credit losses 1,029.5 1,020.6 924.5
------------------ ------------------ ------------------
Total deductions 4,969.8 5,000.4 4,613.7
------------------ ------------------ ------------------
Finance receivables, net $ 74,518.4 $ 71,101.2 $ 63,170.4
================== ================== ==================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit 20
Page 5 of 7
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2. NOTES, LOANS AND DEBENTURES PAYABLE WITHIN ONE YEAR
March 31, Dec. 31, March 31,
1999 1998 1998
------------------ ------------------ -----------------
(in millions of dollars)
Short-term notes
<S> <C> <C> <C>
Commercial paper $ 27,300.4 $ 32,138.8 $ 28,703.5
Master notes 557.3 652.2 256.6
Demand notes 6,688.5 6,445.5 4,854.2
Other 1,266.6 1,437.2 780.3
------------------ ------------------ -----------------
Total principal amount 35,812.8 40,673.7 34,594.6
Unamortized discount (117.1) (127.5) (167.3)
------------------ ------------------ -----------------
Total 35,695.7 40,546.2 34,427.3
------------------ ------------------ -----------------
Bank loans and overdrafts
United States 2,070.1 1,669.9 1,747.7
Other countries 6,448.4 6,543.1 6,010.7
------------------ ------------------ -----------------
Total 8,518.5 8,213.0 7,758.4
------------------ ------------------ -----------------
Other notes, loans and debentures
payable within one year
United States 11,216.4 10,518.6 8,626.9
Other countries 1,555.8 1,538.9 1,280.1
------------------ ------------------ -----------------
Total 12,772.2 12,057.5 9,907.0
------------------ ------------------ -----------------
Total payable within one year $ 56,986.4 $ 60,816.7 $ 52,092.7
================== ================== =================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit 20
Page 6 of 7
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3. NOTES, LOANS AND DEBENTURES PAYABLE AFTER ONE YEAR
Weighted average
interest rates at March 31, Dec. 31, March 31,
March 31, 1999 1999 1998 1998
------------------------- ---------------- ---------------- ----------------
(in millions of dollars)
United States
<S> <C> <C> <C>
1999 $ - $ - $ 5,656.3
2000 6.1% 7,000.7 10,195.4 5,630.4
2001 6.0% 9,297.3 7,795.8 5,262.4
2002 5.9% 8,491.7 7,039.2 6,620.9
2003 5.6% 7,281.3 6,929.3 3,884.6
2004 5.6% 1,023.6 997.2 413.8
2005 - 2009 5.8% 4,784.0 2,673.9 2,497.3
2010 - 2014 8.9% 1,945.0 1,600.0 1,203.5
2015 - 2019 10.3% 373.8 373.8 373.8
2020 - 2049 4.6% 75.0 75.0 75.0
---------------- ---------------- ----------------
Total United States 40,272.4 37,679.6 31,618.0
Other countries
1999 - 2008 5.7% 8,726.6 8,347.6 7,058.3
---------------- ---------------- ----------------
Total notes, loans and debentures 48,999.0 46,027.2 38,676.3
Unamortized discount (659.6) (670.7) (695.1)
---------------- ---------------- ----------------
Total notes, loans and debentures
payable after one year $ 48,339.4 $ 45,356.5 $ 37,981.2
================ ================ ================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit 20
Page 7 of 7
GENERAL MOTORS ACCEPTANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4. SEGMENT INFORMATION
GMAC's reportable operating segments include GMAC North American Financing
Operations (GMAC-NAO), GMAC International Financing Operations (GMAC-IO),
Insurance Operations (GMACI) and Mortgage Operations (GMACMG). GMAC-NAO consists
of the United States and Canada, and GMAC-IO consists of all other countries and
Puerto Rico.
Financial results for GMAC's operating segments for the three months ended March
31, 1999 and 1998 are summarized below:
(in millions of dollars)
Eliminations/
GMAC-NAO GMAC-IO GMACI GMACMG Reclassifications Total
-------------- -------------- ------------ ------------- ------------------ ---------------
MARCH 31, 1999
Net automotive
<S> <C> <C> <C> <C> <C> <C>
financing revenue $ 336.4 $ 220.6 $ 0.0 $ 0.0 $ 18.7 $ 575.7
Other revenue 419.5 11.2 583.2 558.0 (23.0) 1,548.9
Net income 180.4 49.2 64.9 97.8 0.0 392.3
MARCH 31, 1998
Net automotive
financing revenue $ 359.8 $ 203.0 $ 0.0 $ 0.0 $ (18.8) $ 544.0
Other revenue 329.5 6.9 613.7 253.1 16.0 1,219.2
Net income 190.2 56.4 79.7 23.0 0.0 349.3
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the General
Motors Acceptance Corporation Form 10-Q for the period ending March 31, 1999 and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000040729
<NAME> GMAC
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 850
<SECURITIES> 8520
<RECEIVABLES> 79488
<ALLOWANCES> (1030)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 35039
<DEPRECIATION> (6944)
<TOTAL-ASSETS> 131648
<CURRENT-LIABILITIES> 68750
<BONDS> 48339
0
0
<COMMON> 2200
<OTHER-SE> 7814
<TOTAL-LIABILITY-AND-EQUITY> 131648
<SALES> 0
<TOTAL-REVENUES> 4826
<CGS> 0
<TOTAL-COSTS> 1536
<OTHER-EXPENSES> 1017
<LOSS-PROVISION> 119
<INTEREST-EXPENSE> 1513
<INCOME-PRETAX> 641
<INCOME-TAX> 249
<INCOME-CONTINUING> 392
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 392
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
