SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark one)
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File Number 333-74817
MAIN PLACE FUNDING, LLC
(Exact name of registrant as specified in its charter)
Delaware 57-0236115
- -------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
100 North Tryon Street, Charlotte, NC 28255
-------------------------------------------
(Address of principal executive offices) (Zip Code)
(704) 388-7436
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes x No___
On May 15, 2000, there were no shares of common stock outstanding. As of May 15,
2000, members' interests consisted of ownership percentages of 99 percent and 1
percent for Bank of America, N.A. and Main Place Trust, respectively.
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.
<PAGE>
Main Place Funding, LLC
March 31, 2000 Form 10-Q
Index
Page
----
Part I. Financial Information
Item 1. Financial Statements
Statement of Income for the Three Months Ended
March 31, 2000 and 1999 3
Balance Sheet at March 31, 2000 and December 31, 1999 4
Statement of Cash Flows for the Three Months Ended
March 31, 2000 and 1999 5
Statement of Changes in Members' Equity for the
Three Months Ended March 31, 2000 and 1999 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition 11
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 12
Signature 13
Index to Exhibits 14
2
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
Main Place Funding, LLC
Statement of Income
(Dollars in Thousands)
Three Months
Ended March 31
----------------------------------
2000 1999
- -----------------------------------------------------------------------------------------------------------------
<C> <S> <S>
Income
Interest and fees on loans $217,831 $ 233,069
Interest on securities 48,795 141,756
Interest on time deposits placed 75,562 154,608
Gains on sales of available for sale securities - 2,498
----------------------------------
Total income 342,188 531,931
----------------------------------
Expenses
Interest on securities sold under agreements to repurchase 35,734 89,939
Interest on long-term debt 63,144 33,268
Provision for credit losses - -
Other operating expenses 7,065 6,320
----------------------------------
Total expenses 105,943 129,527
----------------------------------
Income before income taxes and cumulative effect of accounting change 236,245 402,404
Income tax expense 85,910 -
----------------------------------
Income before cumulative effect of accounting change 150,335 402,404
Cumulative effect of change in accounting for income taxes-benefit 6,926 -
----------------------------------
Net income $157,261 $ 402,404
==================================
See accompanying notes to financial statements.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Main Place Funding, LLC
Balance Sheet
(Dollars in Thousands)
March 31 December 31
2000 1999
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Cash and cash equivalents $ 976,064 $ 901,145
Time deposits placed with affiliates 4,000,000 5,000,000
Securities:
Available-for-sale 2,707,098 2,858,278
Held-for-investment, at cost (market value $36,440 and $45,406) 36,497 45,364
----------------------------------------
Total securities 2,743,595 2,903,642
----------------------------------------
Loans, net of unearned income 11,902,905 12,328,216
Allowance for credit losses (35,865) (35,988)
----------------------------------------
Loans, net of unearned income and allowance for credit losses 11,867,040 12,292,228
Interest receivable 81,995 80,083
Accounts receivable from affiliates 18,907 19,249
Other assets 47,542 14,514
----------------------------------------
Total assets $ 19,735,143 $ 21,210,861
========================================
Liabilities
Accrued expenses $ 3,069 $ 3,818
Accrued expenses due to affiliate 95,013 578,249
Securities sold under agreements to repurchase from affiliates 2,404,284 2,557,522
Current portion of long-term debt 1,499,962 2,499,945
Long-term debt 1,500,000 1,500,000
----------------------------------------
Total liabilities 5,502,328 7,139,534
----------------------------------------
Members' Equity
Contributed equity 13,395,436 13,395,436
Undistributed income 879,478 722,217
Accumulated other comprehensive income (loss) (42,099) (46,326)
----------------------------------------
Total members' equity 14,232,815 14,071,327
----------------------------------------
Total liabilities and members' equity $ 19,735,143 $ 21,210,861
========================================
See accompanying notes to financial statements.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Main Place Funding, LLC
Statement of Cash Flows
(Dollars in Thousands)
Three Months Ended
March 31
------------------------------
2000 1999
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operating Activities
Income before cumulative effect of accounting change $ 150,335 $ 402,404
Reconciliation of income before cumulative effect to net cash provided by operating activities
Gains on sales of securities - (2,498)
Deferred income tax benefit (2,684) -
Net (increase) decrease in interest receivable (1,912) 4,533
Net decrease in accounts receivable from affiliates 342 117,217
Net (decrease) increase in accrued expenses (749) 629
Net decrease in accrued expenses due to affiliates (483,236) (11,975)
Other operating activities, net 489 18,206
------------------------------
Net cash provided by operating activities (337,415) 528,516
------------------------------
Investing Activities
Proceeds from maturities of securities held for investment 8,867 73,792
Proceeds from sales and maturities of securities available for sale 131,349 1,312,767
Net decrease (increase) in time deposits placed with affiliates 1,000,000 (1,600,000)
Purchases of loans - (1,002,208)
Collections of loans outstanding 425,356 1,291,087
----------------------------
Net cash provided by investing activities 1,565,572 75,438
----------------------------
Financing Activities
Net decrease in securities sold under agreements
to repurchase (153,238) (1,458,226)
Retirement of long-term debt (1,000,000) -
----------------------------
Net cash used in financing activities (1,153,238) (1,458,226)
----------------------------
Net increase (decrease) in cash and cash equivalents 74,919 (854,272)
Cash and cash equivalents at beginning of period 901,145 2,219,988
------------------------------
Cash and cash equivalents at end of period $ 976,064 $ 1,365,716
==============================
See accompanying notes to financial statements.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Main Place Funding, LLC
Statement of Changes in Members' Equity
(Dollars in Thousands)
Accumulated
Other Total Compre-
Contributed Undistributed Comprehensive Members' hensive
Equity Income Income (1) Equity Income
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance on December 31, 1998 $24,980,572 $ - $ 220,081 $ 25,200,653
Net income 402,404 402,404 $ 402,404
Other comprehensive income (59,898) (59,898) (59,898)
----------
Comprehensive income $ 342,506
---------------------------------------------------- ==========
Balance on March 31, 1999 $24,980,572 $402,404 $ 160,183 $ 25,543,159
====================================================
Balance on December 31, 1999 $13,395,436 $722,217 $ (46,326) $ 14,071,327
Income before cumulative effect of accounting change 150,335 150,335 150,335
Other comprehensive income before cumulative effect of
accounting change (11,987) (11,987) (11,987)
Cumulative effect of change in accounting for income taxes 6,926 16,214 23,140 23,140
----------
Comprehensive income $ 161,488
---------------------------------------------------- =========
Balance on March 31, 2000 $13,395,436 $879,478 $ (42,099) $ 14,232,815
====================================================
(1) Changes in Accumulated Other Comprehensive Income includes after-tax net unrealized gains (losses) on securities available for
sale.
See accompanying notes to financial statements.
</TABLE>
6
<PAGE>
Main Place Funding, LLC
Notes to Financial Statements
Note 1 - Description of Business
Main Place Funding, LLC (Main Place), a Delaware limited liability company, is a
subsidiary of Bank of America, N.A., which is a wholly owned indirect subsidiary
of Bank of America Corporation (the Corporation). On April 28, 1999, BankAmerica
Corporation changed its name to Bank of America Corporation. On July 5, 1999,
NationsBank, N.A. changed its name to Bank of America, N.A. On July 23, 1999,
Bank of America, N.A. merged into Bank of America NT&SA, and the surviving
entity of that merger changed its name to Bank of America, N.A. (the "Parent").
Main Place is the successor by merger of Main Place Real Estate Investment Trust
(MPREIT) with and into Main Place. MPREIT was established on October 29, 1996 as
a Maryland real estate investment trust to consolidate the acquisition, holding
and management of certain closed-end residential mortgage loans owned by certain
affiliates of the Corporation. MPREIT was the successor by merger of Main Place
Funding Corporation (MPFC) with and into MPREIT on November 1, 1996. On October
15, 1998, Main Place Holdings Corporation, the former parent of MPREIT, merged
with and into Main Place, and on December 23, 1998, MPREIT merged with and into
Main Place, its parent company. These mergers were each accounted for in a
manner similar to a pooling of interests and, accordingly, the accompanying
financial statements include the results of operations and financial condition
of the combined entities since the beginning of the earliest period presented.
As a result of the December 23, 1998 merger, Bank of America, N.A. holds a 99
percent membership interest in Main Place. The other 1 percent membership
interest is held by Main Place Trust, a Delaware business trust, also a wholly
owned subsidiary of Bank of America, N.A. In connection with the merger of
MPREIT with and into Main Place, all outstanding MPREIT Class A Trust Shares
were cancelled. All outstanding MPREIT Class B Trust Shares were converted into
rights to receive cash. As a result of the December 23, 1998 merger, Main
Place's ownership interests are presented in the accompanying financial
statements to reflect the equity structure of a single-member limited liability
company ("LLC"). Main Place is also considered a single-member LLC under current
tax law. As the surviving entity, Main Place issues and sells mortgage-backed
bonds and acquires, owns, holds and pledges the related mortgage notes and other
assets serving as collateral in connection therewith. In connection with the
merger with MPREIT, Main Place assumed MPREIT's obligations under the Series
1995-2 and Series 1997-1 mortgage-backed bonds.
Note 2 - Accounting Policies
The information contained in the financial statements is unaudited. In the
opinion of management, all normal recurring adjustments necessary for a fair
presentation of the interim period results have been made. Certain prior period
amounts have been reclassified to conform to current period classifications.
Accounting policies followed in the presentation of interim financial results
are presented in Note 2 on pages 12 to 14 of the Annual Report on Form 10-K for
the year ended December 31, 1999. Discussion of changes in such accounting
policies is below.
Accounting for Income Taxes
After October 14, 1998, Main Place is classified as a single-member LLC and, as
such, is disregarded as an entity separate from its owners for income tax
purposes. Main Place has become aware that the predominant practice for
single-member LLCs is to provide for income taxes in their separate financial
statements, and has concluded that is a more informative presentation than
pro-forma disclosures. Accordingly, effective January 1, 2000, Main Place
recognized through cumulative effect adjustment deferred tax assets and
liabilities determined in accordance with Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes", and the accompanying financial
statements include an income tax provision for the quarter ended March 31, 2000.
On a proforma basis, income tax expense for the quarter ended March 31, 1999 was
$146,334. For the quarter ended March 31, 2000 and 1999, income tax expense
differs from the amount of income tax determined by applying the federal
statutory rate of 35 percent to pre-tax income, primarily as a result of state
taxes.
7
<PAGE>
There are two components of income tax expense: current and deferred. Current
income tax expense approximates taxes to be paid or refunded for the applicable
period. Balance sheet amounts of deferred taxes are recognized on the temporary
differences between the basis of assets and liabilities as measured by tax laws
and their basis as reported in the financial statements. Deferred tax expense or
benefit is then recognized for the change in deferred tax liabilities or assets
between periods.
Recognition of deferred tax assets is based on management's belief that it is
more likely than not that the tax benefit associated with certain temporary
differences will be recognized. A valuation allowance is recorded for those
deferred tax items for which it is more likely than not that realization will
not occur.
The operating results of Main Place are included in the consolidated federal
income tax return of the Corporation. The method of allocating federal income
tax expense was determined under a tax allocation agreement with the
Corporation. This agreement specified that income tax expense be computed for
all subsidiaries on a separate company method, taking into account tax planning
strategies and tax position of the consolidated group.
Note 3 - Loans
The following table presents the composition of loans (dollars in thousands):
<TABLE>
<CAPTION>
March 31 December 31
2000 1999
- -------------------------------------------------------------------------------------
<S> <C> <C>
Residential mortgage $11,881,159 $ 12,304,562
Other consumer 12,498 13,706
Commercial real estate 9,248 9,948
----------------------------------------
Total loans, net of unearned income $11,902,905 $ 12,328,216
----------------------------------------
</TABLE>
Mortgage loans collateralizing mortgage-backed bonds were comprised of the
following (dollars in thousands):
<TABLE>
<CAPTION>
March 31 December 31
2000 1999
- -------------------------------------------------------------------------------------
<S> <C> <C>
Adjustable-rate $ 3,421,443 $ 5,086,850
Fixed-rate 1,464,703 1,551,596
----------------------------------------
Total mortgage loans $ 4,886,146 $ 6,638,446
----------------------------------------
</TABLE>
8
<PAGE>
Transactions in the allowance for credit losses were as follows (dollars in
thousands):
<TABLE>
<CAPTION>
Three Months
Ended March 31
------------------------
2000 1999
- ---------------------------------------------------------------------------------
<S> <C> <C>
Balance on January 1 $35,988 $ 37,599
Loans charged off (123) (866)
Recoveries of loans previously charged off - 140
Provision for credit losses - -
------------------------
Balance on March 31 $35,865 $ 36,873
------------------------
</TABLE>
Main Place had $76.5 million of nonperforming loans on March 31, 2000 compared
to $83.1 million on December 31, 1999. Foreclosed properties totaled $6.1
million on March 31, 2000 and December 31, 1999, respectively.
Note 4 - Affiliate Transactions
Main Place maintains its cash and cash equivalent accounts with the Parent. As
of March 31, 2000 and 1999, Main Place had $4.0 billion and $13.6 billion,
respectively, of time deposits placed with the Parent. Interest income on time
deposits for the three months ended March 31, 2000 and 1999 was $75.6 million
and $154.6 million, respectively.
At March 31, 2000 and 1999, Main Place had $18.9 million and $141.9 million,
respectively, of accounts receivable from affiliates of the Corporation. These
receivables are related to mortgage payments and securities principal and
interest payments in process, which generally clear within 30 days.
On March 31, 2000 and 1999, Main Place had a total of $2.4 billion and $7.2
billion, respectively, of U.S. government securities sold under agreements to
repurchase from the Parent and Banc of America Securities LLC, wholly owned
subsidiaries of the Corporation which mature on demand. Interest expense on
these securities for the three months ended March 31, 2000 and 1999 was $35.7
million and $89.9 million, respectively.
Main Place has entered into agreements with the Parent for the servicing and
administration of its mortgage portfolio. Servicing fees paid to the Parent
approximated $6.4 million and $5.7 million for the three months ended March 31,
2000 and 1999, respectively, and are included in "Other operating expenses" on
the accompanying statement of income.
From time to time, Main Place purchases certain mortgage loans originated by the
Parent. Main Place did not purchase any loans during the first three months of
2000 and purchased $1.0 billion of loans from the Parent during the first three
months of 1999.
Accrued expenses due to affiliates as of March 31, 2000 and December 31, 1999,
were $95.0 million and $578.2 million, respectively composed of income tax
payable to the Parent of $85.9 million and $571.9 million, respectively.
At March 31, 2000, Main Place had a revolving line of credit agreement with the
Parent for the benefit of the trustee under the Series 1995-2 Mortgage-Backed
Bonds. The maximum borrowing allowed under this agreement, which expires in
2000, is $82.5 million. The borrowings bear interest at prime and are subject to
a .25 percent per annum commitment fee on the unused portion of the facility.
There have been no borrowings under this agreement.
Bank of America Technology & Operations, Inc., a subsidiary of the Parent,
provides data processing and other support services to Main Place and certain
other subsidiaries of the Corporation. These services included the completion of
substantially all of Main Place's Year 2000 software conversion projects as of
December 31, 1999. The related costs, which are expensed when billed, are
included in "Other operating expenses" in the accompanying statement of income.
Bank of America Technology & Operations, Inc. is reimbursed through affiliate
allocations to the other subsidiaries.
9
<PAGE>
Note 5 - Long-Term Debt
The following table displays the primary terms of Main Place's 1995-2 and 1999-1
mortgage-backed bonds as of March 31, 2000 (dollars in thousands):
<TABLE>
<CAPTION>
Series Series
1995-2 1999-1
(Issued (Issued
October 1995) May 1999)
-------------------------------------
<S> <C> <C>
Amount issued $1,500,000 $1,500,000
Reference rate 3-mo. LIBOR 3-mo. LIBOR
+17 bps +12 bps
Period-end interest rate 6.210% 6.230%
Maturity 2000 2002
Mortgage loans and cash collateralizing mortgage-backed bonds:
Collateral - book value $2,494,698 $2,503,060
Collateral - discounted value $1,807,968 $1,900,182
Collateral - approximate amount exceeding
minimum indenture requirements $225,468 $317,682
</TABLE>
Interest expense on the Series 1995-2, 1997-1 and 1999-1 mortgage-backed bonds
for the three months ended March 31, 2000 was $63.1 million compared to interest
expense on the Series 1995-2 and 1997-1 mortgage-backed bonds of $33.3 million
for the same period in 1999. Main Place repaid its obligations on the Series
1997-1 mortgage-backed bonds of $1.0 billion on March 25, 2000.
In April 1999, the Securities and Exchange Commission declared effective Main
Place's shelf registration statement (Registration Statement) providing an
additional $5 billion of capacity for issuance of mortgage-backed bonds (Bonds).
Bonds have been issued under this as well as previously effective registration
statements. The Bonds, which were issued in series pursuant to separate
indentures, are generally subject to the following terms. The Bonds,
collateralized primarily by mortgage loans on 1-to-4 family dwellings, are
obligations solely of Main Place. The Bonds are not prepayable at the option of
Main Place, but are subject to redemption in whole or in part under certain
circumstances. Under the terms of an indenture relating to each series of Bonds,
Main Place must maintain a minimum amount of eligible collateral, which is
determined on a discounted basis and may consist of mortgage loans, certain U.S.
agency mortgage pass-through certificates, U.S. government securities and cash
held by a trustee (the Trustee). The types, characteristics and permitted
amounts of eligible collateral are subject to change from time to time without
the consent of the bondholders if such changes would not adversely affect the
ratings assigned to the Bonds. In the event such collateral requirements are not
met with respect to any series, Main Place must provide additional or substitute
mortgage loans or other acceptable collateral with respect to such series to
meet the required amounts of eligible collateral and/or repurchase Bonds in an
amount sufficient to meet collateral requirements. If sufficient eligible
collateral is not supplied and/or sufficient Bonds are not repurchased, Main
Place must redeem a portion of the outstanding Bonds of such series such that
the existing amount of the eligible collateral meets the collateral requirements
of the indenture relating to the Bonds of such series that remain outstanding
after the redemption. As of March 31, 2000, Main Place had the authority to
issue approximately $3.5 billion of securities under its existing shelf
registration statement.
10
<PAGE>
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
Net income was $157.3 million and $402.4 million for the periods ended March 31,
2000 and 1999, respectively. After October 14, 1998, Main Place is classified as
a single-member limited liability company ("LLC") and, as such, is disregarded
as an entity separate from its owners for income tax purposes. Main Place has
become aware that the predominant practice for single-member LLCs is to provide
for income taxes in their separate financial statements, and has concluded that
is a more informative presentation than pro-forma disclosures. Accordingly,
effective January 1, 2000, Main Place recognized through cumulative effect
adjustment deferred tax assets and liabilities determined in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes", and the accompanying financial statements include an income tax
provision for the quarter ended March 31, 2000 and pro-forma income tax
information for the quarter ended March 31, 1999 (see Note 2). Total pre-tax net
income was $236.2 million and $402.4 million for the periods ended March 31,
2000 and 1999, respectively. The decrease primarily resulted from decreases in
interest income and no gains on sales of securities, partially offset by a
decline in interest expense.
Total income for the first quarter of 2000 was $342.2 million, representing a
decrease of $189.7 million compared to 1999. The decrease included a decline in
interest income from the securities portfolio of $93.0 million resulting from a
reduction of $5.2 billion in the average balance of the securities portfolio.
The decrease also included a decline in interest on time deposits placed of
$79.0 million, resulting from a reduction of $7.9 billion in the respective
average balances, slightly offset by a 116 basis point increase in average
yields to 5.99 percent. Interest and fees on loans declined $15.2 million due to
a consistent reduction in the loan portfolio. The remaining decrease in total
income for the first quarter of 2000 was the result of a $2.5 million decrease
in gains on sales of available-for-sale securities from the same period in 1999.
Total expenses (excluding income taxes) for the first quarter of 2000 were
$105.9 million, representing a decrease of $23.6 million compared to the same
period in 1999. The decrease included a decline in interest expense on
securities sold under agreements to repurchase of $54.2 million, resulting from
a reduction of $5.3 billion in average borrowings, and slightly offset by a 112
basis point increase in average rates to 5.78 percent. Long-term debt interest
expense increased by $29.9 million to $63.1 million compared to the same period
in 1999, due to the issuance of $1.5 billion in new debt, series 1999-1 in May
1999 and a 115 basis point increase in average rates to 6.47 percent.
Main Place made no provision for credit losses in the first quarter of 2000 due
to the decline in the average balance of the loan portfolio throughout 1999 and
the $6.6 million decrease in nonperforming loans to $76.5 million on March 31,
2000 from $83.1 million on December 31, 1999. Future economic conditions and
changes in the loan portfolio may increase nonperforming loans and, accordingly,
the level of the allowance for credit losses. The nature of the process by which
Main Place determines the appropriate allowance for credit losses requires the
exercise of considerable judgment. After review of all relevant matters
affecting loan collectibility, management believes that the allowance for credit
losses is appropriate given its analysis of incurred credit losses at March 31,
2000.
Bank of America Technology & Operations, Inc. (formerly NationsBanc Services,
Inc.), a subsidiary of Bank of America, N.A., provides data processing and other
support services to Main Place and certain other subsidiaries of the
Corporation. These services included the completion of substantially all of Main
Place's Year 2000 software conversion projects as of March 31, 2000. Bank of
America Technology & Operations, Inc. is reimbursed through affiliate
allocations to the other subsidiaries. For further information related to the
Corporation's Year 2000 efforts, refer to the section entitled "Year 2000
Project" in the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1999.
11
<PAGE>
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
12 Ratio of Earnings to Fixed Charges.
18 Letter re change in accounting principle
from PricewaterhouseCoopers LLP.
27 Financial Data Schedule.
(b) Reports on Form 8-K:
None.
12
<PAGE>
SIGNATURE
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.
Main Place Funding, LLC
Date: May 15, 2000 /s/ Susan R. Faulkner
-----------------------------
Susan R. Faulkner
Treasurer and Senior Vice President/
Principal Financial and Accounting Officer
(Principal Financial and
Duly Authorized Officer)
13
<PAGE>
Main Place Funding, LLC
Form 10-Q
Index to Exhibits
Exhibit Description
12 Ratio of Earnings to Fixed Charges.
18 Letter re change in accounting principle from Pricewaterhouse
Coopers LLP.
27 Financial Data Schedule.
14
<TABLE>
<CAPTION>
Exhibit 12
Main Place Funding, LLC
Ratio of Earnings to Fixed Charges
- ------------------------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands)
Three Months Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
March 31 December 31, December 31 December 31 December 31 December 31
2000 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income before taxes $ 236,245 $ 1,257,141 $2,341,426 $1,294,152 $ 216,709 $ 48,070
Fixed charges:
Interest expense 97,950 477,810 1,056,419 595,818 255,318 145,822
Amortization of debt discount and
appropriate issuance costs 928 3,306 3,128 3,713 2,856 983
------------------------------------------------------------------------------------
Total fixed charges 98,878 481,116 1,059,547 599,531 258,174 146,805
Earnings before fixed charges $ 335,123 $ 1,738,257 $3,400,973 $1,893,683 $ 474,883 $ 194,875
====================================================================================
Fixed charges $ 98,878 $ 481,116 $1,059,547 $ 599,531 $ 258,174 $ 146,805
====================================================================================
Ratio of Earnings to Fixed Charges 3.39 3.61 3.21 3.16 1.84 1.33
</TABLE>
Exhibit 18
May 12, 2000
Members
Main Place Funding, LLC
100 North Tryon Street
Charlotte, North Carolina 28255
Dear Members:
We are providing this letter to you for inclusion as an exhibit to your Form
10-Q filing pursuant to Item 601 of Regulation S-K.
We have been provided a copy of the Company's Quarterly Report on Form 10-Q for
the period ended March 31, 2000. Note 2 therein describes a change in accounting
principle from proforma disclosure of income taxes attributable to activities of
the Company to providing income taxes attributable to such activities. It should
be understood that the preferability of one acceptable method of accounting over
another for income taxes attributable to the operating activities of
single-member limited liability companies has not been addressed in any
authoritative accounting literature, and in expressing our concurrence below we
have relied on management's determination that this change in accounting
principle is preferable. Based on our reading of management's stated reasons and
justification for this change in accounting principle in the Form 10-Q, and our
discussions with management as to their judgment about the relevant business
planning factors relating to the change, we concur with management that such
change represents, in the Company's circumstances, the adoption of a preferable
accounting principle in conformity with Accounting Principles Board Opinion No.
20.
We have not audited any financial statements of the Company as of any date or
for any period subsequent to December 31, 1999. Accordingly, our comments are
subject to change upon completion of an audit of the financial statements
covering the period of the accounting change.
Very truly yours,
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary information extracted from the March 31,
2000 10-Q for Main Place Funding, LLC and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-31-2000
<PERIOD-END> Mar-31-2000
<CASH> 976,064
<INT-BEARING-DEPOSITS> 4,000,000
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 2,707,098
<INVESTMENTS-CARRYING> 36,497
<INVESTMENTS-MARKET> 36,440
<LOANS> 11,902,905
<ALLOWANCE> (35,865)
<TOTAL-ASSETS> 19,735,143
<DEPOSITS> 0
<SHORT-TERM> 2,404,284
<LIABILITIES-OTHER> 98,082
<LONG-TERM> 2,999,962
0
0
<COMMON> 0
<OTHER-SE> 14,232,815
<TOTAL-LIABILITIES-AND-EQUITY> 19,735,143
<INTEREST-LOAN> 217,831
<INTEREST-INVEST> 48,795
<INTEREST-OTHER> 75,562
<INTEREST-TOTAL> 342,188
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 98,878
<INTEREST-INCOME-NET> 243,310
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 7,065
<INCOME-PRETAX> 236,245
<INCOME-PRE-EXTRAORDINARY> 236,245
<EXTRAORDINARY> 0
<CHANGES> 6,926
<NET-INCOME> 157,261
<EPS-BASIC> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0
<LOANS-NON> 76,496
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 35,988
<CHARGE-OFFS> (123)
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 35,865
<ALLOWANCE-DOMESTIC> 35,865
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
