Item 1. BUSINESS CHRYSLER CORPORATION
GENERAL
Chrysler Corporation was incorporated under the laws of the State of Delaware on March 4, 1986, and is the surviving corporation following mergers with a number of its operating subsidiaries, including Chrysler Motors Corporation which was originally incorporated in 1925.
Chrysler Corporation and its consolidated subsidiaries ("Chrysler") operate in two principal industry segments: automotive operations and financial services. Automotive operations include the research, design, manufacture, assembly and sale of cars, trucks and related parts and accessories. Financial services include the operations of Chrysler Financial Corporation and its consolidated subsidiaries ("CFC"), which are engaged principally in wholesale and retail vehicle financing, servicing nonautomotive leases and loans, automotive dealership facility development and management, and property, casualty and other insurance. Chrysler also participates in short-term vehicle rental activities through certain of its subsidiaries (the "Car Rental Operations") and manufactures electronics products and systems through its Chrysler Technologies Corporation subsidiary. Chrysler's principal executive offices are located at Chrysler Center, 12000 Chrysler Drive, Highland Park, Michigan 48288-0001. The telephone number of those offices is (313) 956-5741.
AUTOMOTIVE OPERATIONS
Chrysler manufactures, assembles and sells cars and trucks under the brand names Chrysler, Dodge, Plymouth, Eagle and Jeep(R), and related automotive parts and accessories, primarily in the United States, Canada and Mexico ("North America"). Passenger cars are offered in various size classes and models. Chrysler produces trucks in light-duty, sport-utility and van/wagon models, which constitute the largest segments of the truck market. Chrysler also purchases and distributes certain passenger cars manufactured in Japan by Mitsubishi Motors Corporation ("MMC"), as well as cars manufactured in the United States by MMC's subsidiary, Diamond-Star Motors Corporation ("Diamond-Star").
Although Chrysler currently sells most of its vehicles in the United States, Canada and Mexico, Chrysler also participates in other international markets through its wholly owned subsidiary, Chrysler Motors de Venezuela, S.A., and indirectly through its minority investments in Beijing Jeep Corporation, Ltd., and Arab American Vehicles Company. Chrysler sells to independent distributors in Europe and other world markets vehicles which are produced in North America and by Eurostar Automobilwerk Ges.mb.H & Co. KG ("Eurostar"), a joint venture between Chrysler and Steyr-Daimler-Puch Fahrzeugtechnik of Graz, Austria.
The automotive industry in North America is highly competitive with respect to a number of factors, including product quality, price, appearance, size, special options, distribution organization, warranties, reliability, fuel economy, dealer service and financing terms. As a result, Chrysler's ability to increase vehicle prices and to use retail sales incentives effectively are significantly affected by the pricing actions and sales programs of its principal competitors. Moreover, the introduction of new products by other manufacturers may adversely affect the market shares of competing products made by Chrysler. Also, many of Chrysler's competitors have larger worldwide sales volumes and greater financial resources, which may place Chrysler at a competitive disadvantage in responding to substantial changes in consumer preferences, governmental regulations, or adverse economic conditions in North America.
Chrysler's long-term profitability depends upon its ability to introduce and market its new products effectively. The success of Chrysler's new products will depend on a number of factors, including the economy, competition, consumer acceptance, new product development, the effect of governmental regulation and the strength of Chrysler's marketing and dealer networks. As both Chrysler and its competitors plan to introduce new products, Chrysler cannot predict the market shares its new products will achieve. Moreover, Chrysler is substantially committed to its product plans and would be adversely affected by events requiring a major shift in product development.
Chrysler's plan is to focus on its core automotive business. As part of this plan, Chrysler has sold certain assets and businesses which are not related to its core automotive business, and may sell other such assets in the future.
The Automotive Industry in the United States
Chrysler's automotive operations, including product design and development activities, manufacturing operations and sales, are conducted mainly in North America. Chrysler's principal domestic competitors in the United States are General Motors Corporation and Ford Motor Company. In addition, a number of foreign automotive companies own and operate manufacturing and/or assembly facilities in the United States ("transplants"), and there are a number of other foreign manufacturers that distribute automobiles and light-duty trucks in the United States.
Item 1. BUSINESS - CONTINUED Part I - Continued
Automotive Operations - Continued
The Automotive Industry in the United States- Continued
The tables below set forth comparative market share data for domestic retail sales of cars and trucks for the major domestic manufacturers (including cars and trucks imported by them) and for foreign-based manufacturers, and unit sales of passenger cars and trucks (including imports to the United States) by Chrysler.
- ------------------------- (1) All U.S. retail sales data are based on publicly available information on manufacturers from the American Automobile Manufacturers Association and data on foreign company imports from Ward's Automotive Reports, a trade publication. (2) "Foreign-Based Manufacturers" include imports and vehicles assembled and sold in the United States by foreign companies. (3) U.S. truck retail market share includes minivans.
Competition from foreign car and truck manufacturers, in the form of both exports to the United States and sales by transplants, has been substantial in recent years. The market share for foreign passenger cars sold in the United States (including transplants) was 35.4 percent in 1994, compared to 34.0 percent in 1993. The market share for foreign trucks sold in the United Stated (including transplants) was 15.3 percent in 1994, compared to 14.8 percent in 1993. Vehicles assembled in the United States by Japanese manufacturers have significantly contributed to the market share obtained by foreign-based manufacturers. Japanese transplant sales accounted for approximately 16.1 percent of the U.S. passenger car market and 5.6 percent of the U.S. truck market in 1994, compared to 14.8 percent and 5.4 percent, respectively, in 1993.
Item 1. BUSINESS - CONTINUED Part I - Continued
Automotive Operations - Continued
The Automotive Industry in the United States - Continued
During the first three months of 1994, Japanese exports to the United States were subject to voluntary restraints limiting the number of new passenger cars (excluding station wagons) that could be exported. These restraints were put in place in 1981 and ended on March 31, 1994. For the 12 months ended March 31, 1994, the Japanese export limit was 1.65 million cars, while actual shipments during that period were 1.39 million cars. Although the voluntary restraint agreement has expired, it is unlikely that exports of passenger cars to the United States from Japan would surpass the 1.65 million level in the near future given the high assembly capacity put in place in the U. S. by Japanese manufacturers and the relatively high cost of vehicles imported from Japan due to the recent appreciation of the Japanese yen in relation to the U.S. dollar.
Chrysler Canada Ltd.
Chrysler's consolidated subsidiary, Chrysler Canada Ltd. ("Chrysler Canada"), operates manufacturing and assembly facilities and sales and distribution networks in Canada. Chrysler Canada, whose operations are substantially integrated with Chrysler's U.S. operations, manufactures components and assembles front-wheel-drive minivans, front-wheel-drive mid-size and large sedans, and rear-wheel-drive vans.
In 1994 and 1993, Chrysler Canada produced 695,606 and 643,356 vehicles, respectively, the majority of which were sold outside of Canada. Chrysler Canada's retail sales totaled 247,752 vehicles in 1994 and 226,819 vehicles in 1993, the majority of which were manufactured outside of Canada. Chrysler Canada's retail unit sales of cars accounted for 15.7 percent and 14.6 percent of the Canadian car market in 1994 and 1993, respectively. In 1994, retail unit sales of trucks accounted for 25.7 percent of the Canadian truck market compared with 26.3 percent in 1993. In 1994, Chrysler Canada ranked third in the Canadian industry in retail unit sales of both cars and trucks.
Chrysler de Mexico
Chrysler's consolidated subsidiary, Chrysler de Mexico S.A. ("Chrysler Mexico"), operates assembly and manufacturing facilities in Mexico, producing vehicles and components for both Mexican and export markets. Chrysler Mexico also distributes in the Mexican market finished vehicles imported from Chrysler's U.S. and Canadian operations.
Chrysler Mexico's vehicle sales accounted for 13.1 percent of the Mexican wholesale car market and 19.4 percent of the Mexican wholesale truck market in 1994, compared with 13.3 percent and 23.6 percent, respectively, in 1993. Within the Mexican industry, Chrysler Mexico's wholesale unit sales ranked fourth in cars and third in trucks in 1994. In 1994, overall wholesale industry sales in Mexico are estimated to have been approximately 620,000 units, compared with 604,400 units in 1993, an increase of 2.6 percent.
In 1994, Chrysler Mexico exported 117,489 cars, compared with 104,712 cars in 1993. In 1994, Chrysler Mexico also exported 43,910 trucks, compared with 36,660 trucks in 1993. In addition, Chrysler Mexico provides certain major automobile components to Chrysler, including engines and air conditioner condensers.
The economic uncertainty in Mexico following the devaluation of the Peso may result in reduced vehicle sales in Mexico in 1995. As a result, exports to Mexico of Chrysler vehicles manufactured in the U.S. and Canada may decrease, and sales of vehicles in Mexico may be less profitable in 1995, as compared to 1994. If U.S. and Canada vehicle industry sales continue at present or higher levels, imports to the U.S. and Canada of Chrysler vehicles manufactured in Mexico may increase, and such sales may be more profitable in 1995, as compared to 1994. The devaluation of the Peso did not significantly impact Chrysler's 1994 operating results. Chrysler cannot predict the impact that the devaluation of the Peso, and the resulting uncertainty surrounding the Mexican economic and political environments, will have on its operating results in 1995.
North American Free Trade Agreement
The North American Free Trade Agreement ("NAFTA") unites Mexico, Canada and the United States into the world's largest trading region, a market with more than 360 million consumers. NAFTA provides for the phase-out of trade regulations which restricted vehicle imports and exports between Mexico and the U.S. and Canada. During 1994, trade benefits of NAFTA resulted in commercial growth between Mexico and the United States as both economies benefitted from reduced trading restrictions. In December of 1994, however, the value of the Peso declined significantly in relation to the U.S. Dollar. In addition, the Canadian Dollar experienced a decline in relation to the U.S. Dollar in January of 1995. While it is uncertain how these economic events will affect Chrysler in the short-term, Chrysler's management believes that the fundamentals of NAFTA will benefit the North American automobile industry in the long-term.
Item 1. BUSINESS - CONTINUED Part I - Continued
Automotive Operations - Continued
International Operations
Chrysler's automotive operations outside North America consist primarily of Eurostar's manufacturing operations in Austria and the export of finished vehicles and component kits produced in North America to independent foreign distributors and local manufacturers. Chrysler owns an assembly facility in Venezuela, has equity interests in companies with manufacturing and assembly facilities in China and Egypt, and has established joint ventures with certain other foreign manufacturers. Chrysler will continue to focus on growth opportunities in major markets such as Europe, Japan and China and will explore developing markets in South America, Eastern Europe and the Asia-Pacific region. New manufacturing and joint venture operations could be established if market conditions, sales levels and profitability opportunities are consistent with Chrysler's corporate objectives.
Chrysler shipped 136,462 vehicles to international markets in 1994, an increase of 28 percent from 1993. Chrysler sold 70,294 units in European markets and 66,168 units in other world markets, primarily Japan, Taiwan and the Middle East. During 1994, Chrysler exported 24,272 kits to worldwide affiliates for assembly. The majority of the kits were Jeep products shipped to China, Indonesia and Venezuela. In addition, Chrysler began exporting the Neon and Cirrus passenger cars in 1994.
Eurostar began production and distribution of Chrysler minivans in March 1992 for the European market. Eurostar sold 38,830 minivans in 1994, compared to 33,738 in 1993. In 1993, Chrysler entered into an agreement with Steyr-Daimler-Puch Fahrzeugtechnik to assemble Jeep Grand Cherokees in Austria for the European and other world markets. Production under the agreement was launched in the fourth quarter of 1994.
Chrysler presently does not have significant risks related to changes in currency exchange rates as Chrysler is primarily a North American automotive company. Chrysler does, however, have growing international sales and continuing international component sourcing. When Chrysler sells vehicles outside the United States or purchases components from suppliers outside the United States, transactions are frequently denominated in currencies other than U.S. dollars. The primary foreign currencies in which Chrysler has activities are the German Mark, French Franc, Japanese Yen, Canadian Dollar and Mexican Peso. To the extent possible, receipts and disbursements in a specific currency are offset against each other. In addition, Chrysler periodically initiates hedging activities by entering into currency exchange agreements, consisting primarily of currency forward contracts and purchased currency options, to minimize revenue and cost variations which could result from fluctuations in currency exchange rates. At December 31, 1994, Chrysler had currency exchange agreements for the German Mark, French Franc and Japanese Yen. Chrysler's operating results may be affected by changes in currency exchange rates during the period in which transactions are executed, to the extent that hedge coverage does not exist. However, the impact of any changes in currency exchange rates on unhedged transactions is not expected to be material to Chrysler's operating results or financial position.
Chrysler does not use derivative financial instruments for trading purposes. Chrysler's hedging activities are based upon purchases and sales which are expected to be transacted in foreign currencies. Generally, these purchases and sales are committed for the current and forthcoming calendar year. The currency exchange agreements which provide hedge coverage typically mature within two years of origination. These hedging instruments are periodically modified as existing commitments are fulfilled and new commitments are made. Chrysler's management believes that its hedging activities have been effective in reducing Chrysler's limited risks related to currency exchange fluctuations.
Mitsubishi Motors Corporation
Chrysler imports and distributes in the United States and Canada selected models of passenger cars manufactured by MMC in Japan. In 1994, Chrysler sold 28,849 MMC-manufactured vehicles in the United States, representing 1.3 percent of Chrysler's U.S. retail vehicle sales. In 1993, Chrysler sold 69,646 MMC-manufactured vehicles in the United States, representing 3.4 percent of Chrysler's U.S. retail vehicle sales. In addition to passenger cars, Chrysler purchases 2.5-liter and 3.0-liter V-6 engines for use in the production of certain minivans and other vehicles, and intends to buy approximately 415,000 of these engines from MMC during the 1995 model year.
Diamond-Star produces small sporty cars in the United States for Chrysler and Mitsubishi Motor Sales of America ("MMSA"). Chrysler sold its 50 percent interest in Diamond-Star to MMC, its partner in the joint venture, in October 1991. Chrysler subsequently sold its equity interest in MMC, selling 93.9 million shares of MMC stock in 1992 and 1993 for approximately $544 million in cash, net of related expenses. Pursuant to a distribution agreement that terminates in July 1999, Chrysler retains the right to purchase a portion of Diamond-Star's production capacity. In addition, Chrysler will provide engines and transmissions for use in certain Diamond-Star vehicles. Chrysler's sales of Diamond-Star cars in 1994 and 1993 represented 1.7 and 2.1 percent, respectively, of Chrysler's U.S. retail vehicle sales in each period.
Item 1. BUSINESS - CONTINUED Part I - Continued
Automotive Operations - Continued
Mitsubishi Motors Corporation - Continued
Under the terms of the United States Distribution Agreement ("USDA") in effect between Chrysler and MMC, which terminates in March 1998, Chrysler and MMSA share co-exclusive rights to distribute various MMC passenger car and light-duty truck models which are available for sale in the United States. In practice, Chrysler and MMSA share the distribution of certain models and exclusively distribute other models.
Agreements similar to the USDA are in effect covering the Canadian market. In practice, Chrysler Canada acts as sole distributor of MMC products.
Segment Information
Industry segment and geographic area data for 1994, 1993 and 1992 are summarized in Part II, Item 8, Notes to Consolidated Financial Statements, Note 17.
Seasonal Nature of Business
Reflecting retail sales fluctuations of a seasonal nature, production varies from month to month in the automotive business. In addition, the changeover period related to new model introductions has traditionally occurred in the third quarter of each year. Accordingly, third quarter operating results are generally less favorable than those in the other quarters of the year.
Automotive Product Plans
In 1989, Chrysler changed the organizational structure of its automotive design and development activities by establishing cross-functional product development groups called "platform teams." The platform team system is designed to improve communications, reduce the design and development time of new vehicles, improve product quality, and reduce the cost of developing new vehicle lines. The utilization of platform teams has enabled Chrysler to focus corporate resources on the continuous improvement of its car and truck offerings.
In the fall of 1992, Chrysler introduced the first of its all-new passenger car platforms resulting from the new platform team concept. The Chrysler Concorde, Dodge Intrepid and Eagle Vision compete in the upper-middle segment and employ a "cab-forward" design, creating more interior passenger space without significantly increasing vehicle size or weight. Chrysler's share of the U.S. basic middle segment was 9.9 percent for 1994, compared to 9.7 percent for 1993. In early 1993, a new Chrysler New Yorker and a touring derivative called the LHS, which were also based on this platform, were introduced in the basic large segment.
In 1993, Dodge introduced the first truck designed under the platform team system, a new full-size Ram pickup. This new pickup also marks the first full-scale production use of a new "big gas" V-10 engine which was also used as a basis for the design of the Dodge Viper V-10 engine. In the fall of 1994, Dodge introduced a Club Cab version of the Ram pickup to pursue another segment of the growing truck market. Dodge's share of the U.S. full-size pickup truck market grew to 14.5 percent in 1994 from 7.1 percent in 1993.
In January of 1994, Chrysler introduced the subcompact Dodge and Plymouth Neon, which provide both driver and passenger airbags and apply Chrysler's "cab-forward" design used by the upper-middle segment vehicles. A two-door coupe was added to the lineup in the third quarter of 1994. Chrysler's share of the U.S. subcompact segment rose to 11.9 percent in 1994 from 11.4 percent in 1993.
Chrysler introduced an all-new compact car marketed as the Chrysler Cirrus in the third quarter of 1994. The Cirrus offers newly designed engines, includes driver and passenger airbags, and also applies the "cab-forward" design. The Cirrus was awarded the Motor Trend Car of the Year Award for its contemporary styling, roominess, overall quality, and value. A Dodge version of the vehicle, the Dodge Stratus, will be introduced in the first quarter of 1995. In addition, a Plymouth version of the vehicle, the Plymouth Breeze, will be added in the 1996 model year.
Chrysler added the Dodge Avenger in the third quarter of 1994 and will introduce the Chrysler Sebring in the first quarter of 1995. These two-door coupes compete in the high profile mid-specialty segment and are built exclusively for Chrysler by Diamond-Star.
Item 1. BUSINESS - CONTINUED Part I - Continued
Automotive Operations - Continued
Automotive Product Plans - Continued
Chrysler will introduce an all-new minivan in the first half of 1995. The new Chrysler Town & Country, Dodge Caravan, and Plymouth Voyager will provide many unique product features, including a driver's side sliding door. Chrysler held 43.4 percent and 46.7 percent of the U.S. minivan segment in 1994 and 1993, respectively. In spite of increased competition in this segment, Chrysler sold 513,163 minivans in the United States in 1994, compared to 502,053 in 1993. Worldwide shipments of minivans in 1994 and 1993 were 617,318 and 567,801 units, respectively.
Automotive Marketing
New passenger cars and trucks are sold at retail by dealers who have sales and service agreements with the manufacturer. The dealers purchase cars, trucks, parts and accessories from the manufacturer for sale to retail customers. In the United States, Chrysler had 4,687 dealers at December 31, 1994 compared with 4,726 at December 31, 1993. Chrysler Canada had 607 dealers at December 31, 1994 compared with 601 dealers at December 31, 1993.
Chrysler's ability to maintain, expand and improve the quality of its dealer organization will have an important impact on future sales. Chrysler maintains programs to provide dealership operating capital through equity investments where sufficient private capital is not available. The programs anticipate that the dealer receiving such assistance will eventually purchase Chrysler's equity investment from the dealer's share of the dealership profits. Chrysler's equity interest in U.S. and Canadian dealerships totaled $28 million in 64 dealerships as of December 31, 1994, compared with $37 million in 91 dealerships as of December 31, 1993.
Chrysler continues to focus on quality customer service. The new Chrysler Customer Center is designed to promote customer satisfaction and communicate customer concerns to dealers and internally to vehicle platform teams.
Manufactured and Purchased Components and Materials
Chrysler continues to focus on its core automotive business. Chrysler manufactures most of its requirements for engines, transmissions and transaxles, certain body stampings and electronic components, and processes approximately 80 percent of its requirements for fabricated glass parts.
Chrysler used approximately 1,250 suppliers of productive materials in 1994, compared to approximately 1,380 used in 1993. Chrysler purchases a larger portion of its materials, parts and other components from unaffiliated suppliers than do its principal domestic competitors. Chrysler expects to continue purchasing its requirements for these items rather than manufacturing them.
Government Regulation
Vehicle Regulation Fuel economy, safety and emissions regulations and standards applicable to motor vehicles have been issued from time to time under a number of federal statutes, including the National Traffic and Motor Vehicle Safety Act of 1966 (the "Safety Act"), the Clean Air Act, Titles I and V of the Motor Vehicle Information and Cost Savings Act and the Noise Control Act of 1972. In addition, the State of California has promulgated exhaust emission standards, some of which are more stringent than the federal standards. Other states may, under the Clean Air Act, adopt vehicle emission standards identical to those adopted by the State of California. The States of New York, Massachusetts, and Connecticut have adopted such standards and several other states are considering similar action. Federal courts have generally upheld New York and Massachusetts' adoption of the California standards.
Vehicle Emissions Standards Under the Clean Air Act, auto manufacturers are required, among other things, to significantly reduce tailpipe emissions of polluting gases from automobiles and light trucks and to increase the length of time vehicles are subject to recall for failure to meet emission standards to ten years or 100,000 miles, whichever occurs first. This Act imposes standards for model years through 2003 that require further significant reductions in motor vehicle emissions. This Act also may require production of certain vehicles capable of operating on fuels other than gasoline or diesel fuel (alternative fuels) under a pilot test program to be conducted principally in California beginning in the 1996 model year. Chrysler is actively pursuing the development of flexible fuel vehicles capable of operating on both gasoline and M-85 methanol blend fuels as well as the development of vehicles capable of operating on compressed natural gas.
Item 1. BUSINESS - CONTINUED Part I - Continued
Automotive Operations - Continued
Government Regulation - Continued
Vehicle Regulation - Continued
The California Air Resources Board has received federal approval, pursuant to the Clean Air Act, for a series of passenger car and light truck emission standards, effective through the 2003 model year, that are more stringent than those prescribed by the Clean Air Act for the corresponding periods of time. These California standards are intended to promote the development of various classes of low emission vehicles. California also requires that a specified percentage of each manufacturer's California sales volume, beginning at two percent in 1998 and increasing to ten percent in 2003, must be zero-emission vehicles ("ZEVs") that produce no emissions of regulated pollutants. Chrysler has entered into a consortium of vehicle manufacturers, electric utilities and the U.S. Department of Energy to develop new battery technology for use in electric vehicles which would qualify as ZEVs and has built a limited number of experimental prototype electric vehicles using existing advanced battery technology.
On December 19, 1994, the Administrator of the United States Environmental Protection Agency ("EPA") responded to a petition filed by the Ozone Transport Commission ("OTC"), a group of 12 Northeast states and the District of Columbia. The response held that the states comprising the OTC must either adopt the California vehicle emissions standards or a 49 state program advocated by the American Automobile Manufacturers Association (of which Chrysler is a member) and the Association of International Automobile Manufacturers. The Administrator's decision does not require the states that adopt California's general vehicle emission standards to adopt California's ZEV requirement, but permits the states to adopt the ZEV requirement if they elect to do so. Both New York and Massachusetts have adopted the California general standards as well as the California ZEV requirement. Connecticut has adopted the general standards but not the ZEV requirement.
CAFE The Motor Vehicle Information and Cost Savings Act, as amended by the Energy Policy and Conservation Act, requires vehicle manufacturers to provide vehicles that comply with federally mandated fuel economy standards. Under this Act, a manufacturer earns credits for exceeding the applicable fuel economy standards; however, fuel economy credits earned on cars may not be used for trucks. Failure to meet the average fleet fuel economy standards can result in the imposition of penalties unless a manufacturer has sufficient fuel economy credits from the preceding three years or projects that will generate sufficient credits over the succeeding three years. Chrysler is in substantial compliance with existing CAFE requirements and anticipates continued compliance with such requirements. In addition, the Energy Tax Act of 1978 imposes a graduated "Gas Guzzler" tax on automobiles with a fuel economy rating below specified levels.
From time to time there have been federal legislative and administrative initiatives that would increase corporate average fuel economy standards from their current levels. In addition, the National Highway Traffic Safety Administration ("NHTSA") has initiated rulemaking to set light truck CAFE standards for the 1998 - 2006 model years. A significant increase in those requirements could be costly to Chrysler and could result in significant restrictions on the products Chrysler offers.
Vehicle Safety Under the Safety Act, NHTSA is required to establish federal motor vehicle safety standards that are practicable, meet the need for motor vehicle safety and are stated in objective terms. NHTSA has announced its intention to upgrade certain existing standards and to establish additional standards in the future. Chrysler expects to be able to comply with those standards.
Vehicle Recalls Under the Clean Air Act the EPA may require manufacturers to recall and repair customer-owned vehicles that fail to meet emission standards established under that Act. Similarly, the Act authorizes the State of California to require recalls for vehicles that fail to meet its emissions standards.
The Safety Act authorizes NHTSA to investigate reported vehicle problems and to order a recall if it determines that a safety-related defect exists. NHTSA is conducting an engineering analysis of the rear liftgate latches in Chrysler's 1984-1994 model year minivans (approximately 4 million latches) as a result of allegations that some latches opened during collisions. Chrysler has provided NHTSA with extensive information in support of Chrysler's position that no safety-related defect exists with respect to the latches. If, however, NHTSA concludes that the information gathered may warrant a formal investigation, it may issue a Recall Request Letter asking that Chrysler voluntarily repair or replace the latches. If NHTSA issues such a letter and Chrysler declines to conduct a recall, NHTSA may proceed with a formal investigation or close the matter. If NHTSA proceeds with a formal investigation and determines that a defect exists, it may seek to compel a recall. Chrysler continues to discuss this matter with NHTSA.
Item 1. BUSINESS - CONTINUED Part I - Continued
Automotive Operations - Continued
Government Regulation - Continued
Vehicle Regulation - Continued
Chrysler's emissions and safety-related recall costs vary widely from year to year, and could be significant in future years depending on the corrective action required to remedy a particular condition and the number of vehicles involved.
Stationary Source Regulation Chrysler's assembly, manufacturing and other operations are subject to substantial environmental regulation under the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the Pollution Prevention Act of 1990 and the Toxic Substances Control Act, as well as a substantial volume of state legislation paralleling and, in some cases, imposing more stringent obligations than the federal requirements. These regulations impose severe restrictions on air and water-born discharges of pollution from Chrysler facilities, the handling of hazardous materials at Chrysler facilities and the disposal of wastes from Chrysler operations. Chrysler is faced with many similar requirements in its operations in Canada and is facing increased governmental regulation and environmental enforcement in Mexico.
While Chrysler is unable to predict the exact level of expenditures that will be required to develop and implement new technology in its North American facilities, since federal and state requirements are not fully defined, Chrysler expects its capital requirements for the period 1995 through 1999 will be approximately $700 million. Of this total, Chrysler estimates that $136 million will be spent in 1995 and $138 million will be spent in 1996. Substantially all of these expenditures are included in Chrysler's planned disbursements for new product development and the acquisition of productive assets over the 1995 to 1999 period. In addition, the extensive federal-state permit program established by the Clean Air Act may reduce operational flexibility and cause delays in upgrading of Chrysler's production facilities in the United States.
Clean Air Act Pursuant to the Clean Air Act, the states are required to amend their implementation plans to require more stringent limitations and other controls on the quantity of pollutants which may be emitted into the atmosphere to achieve national ambient air quality standards established by the EPA. In addition, the Clean Air Act requires reduced emissions of substances that are classified as hazardous, toxic or that contribute to acid deposition, imposes comprehensive permit requirements for manufacturing facilities in addition to those required by various states, and expands federal authority to impose severe penalties and criminal sanctions. The Clean Air Act also allows states to adopt standards more stringent than those required by the Clean Air Act. Most recent reports filed with the EPA pursuant to the Superfund Amendments and Reauthorization Act of 1986 indicate that for calendar year 1992 releases and emissions of chemicals and toxics by Chrysler were reduced by more than 70 percent from comparable 1987 levels.
Environmental Liabilities The EPA and various state agencies have notified Chrysler that it may be a potentially responsible party ("PRP") for the cost of cleaning up hazardous waste storage or disposal facilities pursuant to the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") and other federal and state environmental laws. A number of lawsuits allege that Chrysler violated CERCLA or other environmental laws and seek to recover costs associated with remedial action. In most instances, Chrysler is only one of a number of PRPs who may be found to be jointly and severally liable for remediation costs at the 97 sites involved in the foregoing matters at December 31, 1994. Chrysler may also incur remediation costs at an additional 40 of its active or deactivated facilities.
Estimates of future costs of pending environmental matters are necessarily imprecise due to numerous uncertainties, including the enactment of new laws and regulations, the development and application of new technologies, and the apportionment and collectibility of remediation costs among responsible parties. Chrysler may ultimately incur significant expenditures over an extended period of time in connection with the foregoing environmental matters, and therefore has established reserves totalling $310 million for the estimated costs associated with all of its environmental remediation efforts. Chrysler believes that these reserves will be sufficient to resolve these matters. After giving effect to these reserves, management believes, based on currently known facts and circumstances and existing laws and regulations, that the disposition of these matters will not have a material adverse effect on Chrysler's consolidated financial position. Future developments could cause Chrysler to change its estimate of the total costs associated with these matters, and those changes could be material to Chrysler's consolidated results of operations for the period in which the developments occur. Chrysler is unable to estimate such changes in costs, if any, that may be incurred in connection with these matters.
Item 1. BUSINESS - CONTINUED Part I - Continued
FINANCIAL SERVICES
Chrysler's principal subsidiary, CFC, is a financial services organization engaged in wholesale and retail vehicle financing, servicing nonautomotive leases and loans, property, casualty and other insurance, and automotive dealership facility development and management. All of CFC's stock is owned by Chrysler. CFC, a Michigan corporation, is the continuing corporation resulting from a merger on June 1, 1967 of a financial services subsidiary of Chrysler into a newly acquired, previously unaffiliated finance company incorporated in 1926.
CFC's primary objective is to provide financing for automotive dealers and retail purchasers of Chrysler's products. CFC sells significant amounts of automotive receivables acquired in transactions subject to limited recourse provisions. CFC remains as servicer for which it is paid a servicing fee. At the end of 1994, CFC had nearly 3,100 employees and its portfolio of receivables managed, which includes receivables owned and serviced for others, totaled $32.9 billion.
CFC has sold various nonautomotive assets over the last several years, thereby making CFC more dependant on Chrysler. Thus, lower levels of sales of Chrysler automotive products could result in a reduction in the level of finance operations of CFC.
CFC's portfolio of finance receivables managed includes receivables owned and receivables serviced for others. Receivables serviced for others primarily represent sold receivables which CFC services for a fee. At December 31, 1994, receivables serviced for others accounted for 61 percent of CFC's portfolio of receivables managed. Total finance receivables managed at the end of each of the five most recent years were as follows:
Automotive Financing CFC conducts its automotive finance business principally through its subsidiaries Chrysler Credit Corporation, Chrysler Credit Canada Ltd., and, in Mexico, Chrysler Comercial S.A. de C.V., (together "Chrysler Credit"). Chrysler Credit is the major source of automobile and light-duty truck wholesale (also referred to as dealer "floor plan") and retail financing for Chrysler dealers and their customers throughout North America. Chrysler Credit also offers its floor plan dealers working capital loans, real estate and equipment financing and financing plans for fleet buyers, including daily rental car companies independent of, and affiliated with, Chrysler. The automotive financing operations of Chrysler Credit are conducted through 94 branches in the United States, Canada and Mexico.
CFC's Mexican subsidiary, Chrysler Comercial S.A. de C.V. ("Chrysler Comercial"), contributed $11 million, $18 million and $15 million in 1994, 1993 and 1992, respectively, to CFC's earnings before income taxes. Chrysler Comercial's total assets were $433 million and $477 million at December 31, 1994 and 1993, respectively. The economic uncertainty in Mexico following the devaluation of the Peso may have an unfavorable impact on Chrysler Comercial's retail and wholesale volume and credit losses.
During 1994 CFC financed or leased approximately 830,000 vehicles at retail in the United States, including approximately 525,000 new Chrysler passenger cars and light-duty trucks, representing 24 percent of Chrysler's U.S. retail and fleet deliveries. In 1994, the average monthly payment for new vehicle retail installment sale contracts acquired in the United States was $375. The average percentage of dealer cost financed was 94 percent and the average original term was 55 months. CFC also financed at wholesale approximately 1,647,000 new Chrysler passenger cars and light-duty trucks representing 73 percent of Chrysler's U.S. factory shipments in 1994. Wholesale vehicle financing accounted for 74 percent of the total automotive financing volume of CFC in 1994 and represented 31 percent of automotive finance receivables outstanding at December 31, 1994.
Item 1. BUSINESS - CONTINUED Part I - Continued
Financial Services - Continued
Nonautomotive Financing CFC has downsized its nonautomotive operations through sales and liquidations over the last several years. Chrysler Capital Corporation ("Chrysler Capital") manages nonautomotive leases and loans to clients in over 15 industries throughout the United States. At December 31, 1994, Chrysler Capital managed $2.3 billion of nonautomotive finance receivables compared to $2.7 billion at December 31, 1993. In addition, CFC managed a portfolio of secured small business loans totaling $0.5 billion at December 31, 1994, compared to $0.6 billion at December 31, 1993.
Insurance Chrysler Insurance Company and its subsidiaries ("Chrysler Insurance") provide specialized insurance coverages for automotive dealers and their customers in the United States and Canada. Chrysler Insurance provides physical damage, garage liability, workers' compensation and property and contents coverage directly to automotive dealers. Chrysler Insurance also provides collateral protection and single interest insurance to retail automobile customers and their financing sources.
Real Estate Management Chrysler Realty Corporation ("Chrysler Realty"), which is engaged in the ownership, development and management of Chrysler automotive dealership properties in the United States, typically purchases, leases or options dealership facilities and then leases or subleases these facilities to Chrysler dealers. At December 31, 1994, Chrysler Realty controlled 876 sites (of which 289 were owned by Chrysler Realty).
Funding During 1994, CFC issued $1.8 billion of term debt and increased the level of short-term notes outstanding (primarily commercial paper) to $4.3 billion. Receivable sales continued to be a significant source of funding during 1994, as CFC realized $6.4 billion of net proceeds from the sale of automotive retail receivables compared to $7.8 billion of net proceeds from the sale of automotive retail receivables in 1993. In addition, revolving wholesale receivable sale arrangements provided funding which aggregated $3.8 billion and $4.6 billion at December 31, 1994 and 1993, respectively.
CFC uses derivative financial instruments to manage its exposure arising from changes in interest rates and currency exchange rates as part of its asset and liability management program. These derivative financial instruments include interest rate swaps, interest rate caps, forward interest rate contracts, and currency exchange agreements. CFC does not use derivative financial instruments for trading purposes.
Due to changing interest rates, interest rate derivatives are used to stabilize interest margins. The Company hedges against borrowings denominated in currencies other than the borrowers' local currency. Such borrowings are translated in the financial statements at the rates of exchange established under the related currency exchange agreements. Forward interest rate contracts are used to manage exposure to fluctuations in funding costs for anticipated securitizations of retail receivables.
CFC's outstanding debt at December 31, for each of the five most recent years was as follows:
Item 1. BUSINESS - CONTINUED Part I - Continued
CAR RENTAL OPERATIONS
Through its Pentastar Transportation Group, Inc. ("Pentastar") subsidiary, Chrysler owns Thrifty Rent-A-Car System, Inc. ("Thrifty"), and Dollar Systems, Inc. ("Dollar", formerly Dollar Rent A Car Systems, Inc.). Both Thrifty and Dollar are engaged in leasing vehicles to independent businesses they have licensed to use their trade names, systems and technologies in the daily rental of cars for business, personal and leisure use. They also maintain and operate a number of their own locations. In September 1992, Chrysler announced a realignment of a part of the Car Rental Operations under Pentastar and the consolidation and phase out of certain of those operations. As part of that realignment, Chrysler subsequently transferred to Dollar ownership of General Rent-A-Car ("General"), which also rents cars for business, leisure and personal use, exclusively through corporate owned locations. Consolidation of General's operations into those of Dollar's was completed in 1994. Additionally, Snappy Car Rental, Inc., which engages in renting automobiles on a short-term basis, was sold in September 1994.
RESEARCH AND DEVELOPMENT
For the years ended December 31, 1994, 1993 and 1992, Chrysler spent $1.3 billion, $1.2 billion, and $1.1 billion, respectively, for company-sponsored research and development activities. These activities relate to the development of new products and services and the improvement of existing products and services, as well as compliance with standards that have been and are being promulgated by the government.
EMPLOYEES
At December 31, 1994, Chrysler had a total of approximately 121,000, employees worldwide, approximately 97,000 of which were employed in the United States. In the United States and Canada, approximately 95 percent of Chrysler's hourly employees and 22 percent of its salaried employees are represented by unions. Of these represented employees, 98 percent of hourly and 91 percent of salaried employees are represented by the United Automotive, Aerospace, and Agricultural Implement Workers of America ("UAW") or the National Automobile, Aerospace and Agricultural Implement Workers of Canada ("CAW").
In 1993, Chrysler negotiated three-year national agreements with the UAW and CAW in the United States and Canada, respectively, without an interruption of production. The UAW contract provides for essentially the same levels of wages and benefits as negotiated by Chrysler's major domestic competitors. The UAW contract retains the job and income security protection program and health care coverage. The job and income security benefit caps were negotiated at the previous contract amount of $612 million with new Supplemental Unemployment Benefits Contingency Accounts of $106 million. The contract also adopted provisions expected to abate future increases in labor costs including Cost of Living Allowance diversions, lower new hire rates, and a broadened approach to managed health care.
Chrysler's pension plans, group life, and health care benefits for active, inactive, and retired employees generally follow the structure of benefits common to the automotive industry. See Part II, Item 8, Notes to Consolidated Financial Statements, Notes 1, 11 and 12 for further information on postemployment benefits, pension plans, and nonpension postretirement benefits.
INTELLECTUAL PROPERTY
Chrysler has intellectual property rights, including patents, proprietary technology, trademarks, trade dress, service marks, copyrights, and licenses under such rights of others, relating to its businesses, products, and manufacturing equipment and processes. Chrysler grants licenses to others under its intellectual property rights and receives fees and royalties under some of these licenses. While Chrysler does not consider any particular intellectual property right to be essential, it does consider the aggregate of such rights very important to the overall conduct of its businesses.
Item 2.
Item 2. PROPERTIES
AUTOMOTIVE OPERATIONS
The statements concerning ownership of Chrysler's properties are made without regard to taxes or assessment liens, rights of way, contracts, easements or like encumbrances or questions of survey and are based on the records of Chrysler. Chrysler knows of no material defects in title to, or adverse claims against, any of such properties, nor any existing material liens or encumbrances against Chrysler or its properties, except the mortgage loan on Chrysler's Sterling Heights Assembly Plant (Sterling Heights, Michigan).
Item 2. PROPERTIES - CONTINUED Part I - Continued
Chrysler's manufacturing plants include a foundry, machining plants, metal stamping plants, engine plants, transmission plants, electronic parts plants, an air conditioning equipment plant, glass fabricating plants and other component parts plants. In addition to Michigan, manufacturing plants in the United States are located in Alabama, Indiana, New York, Ohio, Texas and Wisconsin.
Chrysler's U.S. passenger car assembly plants are located in Sterling Heights and Detroit, Michigan; Belvidere, Illinois and Newark, Delaware. The U.S. truck assembly plants are located in Warren and Detroit, Michigan; Fenton, Missouri; and Toledo, Ohio. An assembly plant located in Fenton, Missouri, which was previously idled in 1991, is being equipped with new machinery and tooling and will begin producing minivans in 1995. Parts depots, warehouses and sales offices are situated in various sections of the United States, while Chrysler's principal engineering and research facilities and its general offices are located in Michigan.
Automotive properties outside the U.S. are owned or leased principally by Chrysler Canada and Chrysler Mexico. Other manufacturing and assembly plants of subsidiaries outside the U.S. are located in Venezuela and Austria.
In 1991, Chrysler dedicated its new technology center in Auburn Hills, Michigan. The initial project, which consisted of 3.3 million square feet of floor space and included design, vehicle engineering, manufacturing engineering and pilot build facilities associated with the development of new Chrysler cars and trucks, was completed and fully occupied in the first half of 1994. In the third quarter of 1992, the Board of Directors approved a subsequent project to build an administrative building which is currently under construction. The administrative building, which will add approximately 1.0 million square feet of floor space to the facility, is scheduled for completion in the first half of 1996.
In the opinion of management, Chrysler's properties include facilities which are suitable and adequate for the conduct of its present assembly and component plant requirements.
FINANCIAL SERVICES
At December 31, 1994, the following facilities were utilized by CFC in conducting its business:
(a) executive offices of CFC, Chrysler Credit Corporation, Chrysler Insurance and certain other domestic subsidiaries of CFC in Southfield, Michigan;
(b) a total of 82 branches of Chrysler Credit located throughout the United States;
(c) headquarters of remaining Chrysler First Inc. operations in Allentown, Pennsylvania, and a total of 3 offices of such corporation in the United States;
(d) headquarters of Chrysler Capital in Stamford, Connecticut and a total of 12 offices of such corporation located throughout the United States;
(e) headquarters of Chrysler Realty in Troy, Michigan; and
(f) a total of 12 offices used as headquarters and branch offices in Canada and Mexico.
All of the facilities described above were leased by CFC.
At December 31, 1994, a total of 289 automobile dealership properties generally consisting of land and improvements were owned by Chrysler Realty leased primarily to Chrysler franchised dealers.
Item 3.
Item 3. LEGAL PROCEEDINGS Part I - Continued
Chrysler and its subsidiaries are parties to various legal proceedings, including some purporting to be class actions, and some which demand large monetary damages or other relief that would require significant expenditures. Chrysler believes that each of the product and environmental proceedings described below constitutes ordinary routine litigation incidental to the business conducted by Chrysler. See also Note 8 of Notes To Consolidated Financial Statements.
Product Matters
Many of the legal proceedings seek damages for personal injuries claimed to have resulted from alleged defects in the design or manufacture of products distributed by Chrysler. The complaints filed in those matters specify approximately $1.1 billion in compensatory and $1.9 billion in punitive damages in the aggregate as of December 31, 1994. These amounts represent damages sought by plaintiffs and, therefore, do not necessarily constitute an accurate measure of Chrysler's ultimate cost to resolve those matters. Further, many complaints do not specify a dollar amount of damages or specify only the jurisdictional minimum. These amounts may vary significantly from one period to the next depending on the number of new complaints filed or pending cases resolved in a given period.
Numerous complaints seek damages for personal injuries sustained in accidents involving alleged rollovers of Jeep CJ vehicles. These complaints represent approximately $312 million of the compensatory and $785 million of the punitive damages specified above. Pursuant to an indemnification agreement with Chrysler, Renault has agreed to indemnify Chrysler against a portion of certain costs arising from accidents involving alleged Jeep CJ vehicle rollovers that occurred between April 1, 1985 and March 31, 1994.
Many of the remaining complaints seek compensatory and punitive damages for personal injuries sustained in accidents involving alleged defects in occupant restraint systems, seats, heater cores, or various other components in several different vehicle models. Some complaints seek repair of the vehicles or compensation for the alleged reduction in vehicle value.
Chrysler may ultimately incur significant expenditures over an extended period of time in connection with the foregoing matters, and therefore has established reserves which it believes will be sufficient to resolve these matters. After giving effect to these reserves, management believes, based on currently known facts and circumstances, that the disposition of these matters will not have a material adverse effect on Chrysler's consolidated financial condition. Future developments could cause Chrysler to change its estimate of the ultimate cost of resolving these matters, and these changes could be material to Chrysler's consolidated results of operations for the period in which the developments occur. Chrysler is unable to estimate such changes in costs, if any, that may be incurred in connection with these matters.
Environmental Matters
The EPA and various state agencies have notified Chrysler that it may be a PRP for the cost of cleaning up hazardous waste storage or disposal facilities pursuant to the CERCLA and other federal and state environmental laws. A number of lawsuits allege that Chrysler violated CERCLA or other environmental laws and seek to recover costs associated with remedial action. In most instances, Chrysler is only one of a number of PRPs who may be found to be jointly and severally liable for remediation costs at the 97 sites involved in the foregoing matters at December 31, 1994. Chrysler may also incur remediation costs at an additional 40 of its active or deactivated facilities.
In particular, the Indiana Department of Environmental Management initiated an administrative proceeding in August 1985 alleging improper disposal of waste at a Chrysler facility in Indianapolis. This proceeding, which seeks to require Chrysler to conduct a site assessment and undertake remedial action, may result in the imposition of civil penalties in excess of $100,000.
Estimates of future costs of pending environmental matters are necessarily imprecise due to numerous uncertainties, including the enactment of new laws and regulations, the development and application of new technologies, and the apportionment and collectibility of remediation costs among responsible parties. Chrysler may ultimately incur significant expenditures over an extended period of time in connection with the foregoing environmental matters, and therefore has established reserves totalling $310 million for the estimated costs associated with all of its environmental remediation efforts. Chrysler believes that these reserves will be sufficient to resolve these matters. After giving effect to these reserves, management believes, based on currently known facts and circumstances and existing laws and regulations, that the disposition of these matters will not have a material adverse effect on Chrysler's consolidated financial position. Future developments could cause Chrysler to change its estimate of the total costs associated with these matters, and these changes could be material to Chrysler's consolidated results of operations for the period in which the developments occur. Chrysler is unable to estimate such changes in costs, if any, that may be incurred in connection with these matters.
Item 3. LEGAL PROCEEDINGS - Continued Part I - Continued
Other Matters
In December 1990 and January 1991, eight class action lawsuits were commenced by separate plaintiffs against Chrysler and certain of its directors in the Court of Chancery of the State of Delaware for New Castle County, Delaware. The Complaints in these suits are very similar and allege that the directors breached their fiduciary duties to stockholders by amending Chrysler's Share Purchase Rights Plan in a manner designed to entrench themselves in office and to impair the right of stockholders to avail themselves of offers to purchase their shares by an acquiror not favored by management. The Complaints ask for (a) certification of the class, (b) rescission of and an injunction against implementation of the Rights Plan amendments, (c) an order that Chrysler cooperate with Kirk Kerkorian, the holder of 9.8% of Chrysler's common stock at the time the complaints were filed, and take steps to enhance its attractiveness as a merger/acquisition candidate, and (d) damages and costs. On January 9, 1991, the eight suits were consolidated into one. On January 28, 1991, Chrysler filed an Answer and Affirmative Defenses in the consolidated case. On March 7, 1991, the parties agreed to allow an Amended Complaint to be filed which purports to assert a derivative claim brought on behalf of Chrysler, in addition to class action claims as originally filed. In this regard, the Amended Complaint alleges injury to Chrysler as a direct result of violations of fiduciary duties by the individual defendants. On July 25, 1991, Chrysler filed a motion to dismiss the consolidated lawsuit. On July 27, 1992, the Court entered a memorandum opinion dismissing the complaint as to all claims for relief other than rescission. Chrysler later filed a Motion for Reargument which was denied on August 11, 1992. The Corporation and the named directors are continuing with the defense of this matter.
Item 4.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None during the fourth quarter ended December 31, 1994.
EXECUTIVE OFFICERS OF THE REGISTRANT (AS OF FEBRUARY 2, 1995)
- ---------------------------- (1) The "Officer Since" date shown is the date from which the named individual has served continuously as an officer of either Chrysler Corporation or the former Chrysler Motors Corporation which, effective December 31, 1989, was merged with and into Chrysler Corporation.
(2) Also a member of the Board of Directors.
There are no family relationships, as defined for reporting purposes, between any of the executive officers named above and there is no arrangement or understanding between any of the executive officers named above and any other person pursuant to which he was selected as an officer. All of the executive officers named above, except Messrs. Eaton and Henson have been in the employ of Chrysler Corporation or its subsidiaries for more than five years. During the last five years, and immediately preceding employment by Chrysler Corporation, Messrs. Eaton and Henson were high level executives at General Motors Corporation.
PART II
Item 5.
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Chrysler's common stock is listed on the stock exchanges specified on pages 1 and 2 of this Form 10-K under the trading symbol (C). There were approximately 143,000 shareholders of record of Chrysler's common stock at December 31, 1994. The following table sets forth the high and low sale prices of Chrysler's common stock as reported on the composite tape and the quarterly dividends declared for the last two years.
Dividends on the common stock are payable at the discretion of the Chrysler's Board of Directors out of funds legally available therefor. Chrysler's ability to pay dividends in the future will depend upon its financial results, liquidity and financial condition and its ability to meet its new product development and facility modernization spending programs. Chrysler's ability to pay dividends is also affected by the provision in its credit agreement that it must maintain a ratio of indebtedness to total capitalization (each as defined) at the end of each quarter at certain specified levels.
Item 6.
Item 6. SELECTED FINANCIAL DATA Part II - Continued
The table below summarizes recent financial information for Chrysler. For further information, refer to Chrysler's consolidated financial statements and notes thereto presented under Item 8 of this Form 10-K.
- ---------------------------- (1) Earnings for the year ended December 31, 1994 include favorable adjustments to the provision for income taxes aggregating $132 million. These adjustments related to: (1) the recognition of tax credits related to expenditures in prior years for qualifying research and development activities, in accordance with an Internal Revenue Service settlement which was based on recently issued U.S. Department of Treasury income tax regulations, and (2) the reversal of valuation allowances related to tax benefits associated with net operating loss carryforwards.
(2) Results for the year ended December 31, 1993 include a pretax gain of $205 million ($128 million after applicable income taxes) on the sale of Chrysler's remaining 50.3 million shares of MMC stock, a pretax gain of $60 million ($39 million after applicable income taxes) on the sale of Chrysler's plastics operations, a $4.68 billion after-tax charge for the adoption of Statement of Financial Accounting Standards ("SFAS") No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," and a $283 million after-tax charge for the adoption of SFAS No. 112, "Employers' Accounting for Postemployment Benefits."
(3) Earnings for the year ended December 31, 1992 include a pretax gain of $142 million ($88 million after applicable income taxes) on the sale of 43.6 million shares of MMC stock, a $218 million favorable effect of a change in accounting principle relating to the adoption of SFAS No. 109, "Accounting for Income Taxes," a $101 million pretax charge ($79 million after applicable income taxes) relating to the restructuring of Chrysler's short-term vehicle rental subsidiaries, and a $110 million pretax charge ($69 million after applicable income taxes) relating to investment losses experienced by Chrysler Canada.
(4) Results for the year ended December 31, 1991 include a pretax gain of $205 million ($127 million after applicable income taxes) on the sale of Chrysler's 50 percent equity interest in Diamond-Star, the favorable effect of a $391 million ($242 million after applicable income taxes) noncash, nonrecurring credit provision relating to a plant capacity adjustment and a $257 million after-tax charge for the cumulative effect of a change in accounting principle related to the timing of the recognition of the costs of sales incentive programs.
(5) Earnings for the year ended December 31, 1990 include a pretax return to income of $101 million ($63 million after applicable income taxes) resulting from a reduction in the estimated costs recognized in 1989 in connection with the restructuring of Chrysler's automotive operations.
Item 7.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF Part II - Continued FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the consolidated financial statements and notes thereto.
FINANCIAL REVIEW
Chrysler reported earnings before income taxes and the cumulative effect of changes in accounting principles of $5.8 billion in 1994, compared with $3.8 billion in 1993. The earnings in 1993 included a gain on sales of automotive assets and investments totaling $265 million. Excluding the effects of these items, Chrysler's pretax earnings for 1993 were $3.6 billion.
Chrysler reported net earnings for 1994 of $3.7 billion, or $10.11 per common share, compared to a net loss for 1993 of $2.6 billion, or $7.62 per common share. Net earnings for 1994 included favorable tax adjustments aggregating $132 million. The net loss for 1993 resulted from a charge of $4.68 billion, or $13.57 per common share, for the cumulative effect of a change in accounting principle related to the adoption of SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." Also included in the 1993 results was a charge of $283 million, or $0.82 per common share, for the cumulative effect of a change in accounting principle relating to the adoption of SFAS No. 112, "Employers' Accounting for Postemployment Benefits" and a $72 million favorable adjustment of Chrysler's deferred tax assets and liabilities as a result of the increased U.S. federal income tax rate.
The improvement in earnings in 1994 over 1993 was primarily the result of an increase in sales volume, a reduction in lower-margin fleet sales in proportion to total retail sales and reduced sales incentives, partially offset by increased profit-based employee costs. During 1994, Chrysler's worldwide factory sales of cars increased 2 percent to 1,051,750 units, while worldwide factory sales of trucks increased 18 percent to 1,710,353 units. Combined U.S. and Canadian dealers' days supply of vehicles increased to 69 days at December 31, 1994 from 63 days at December 31, 1993.
During 1994, U.S. and Canada vehicle industry retail sales were 16.7 million cars and trucks, an increase of 8 percent from the 15.4 million units sold in 1993. Despite an increase in its combined car and truck sales, Chrysler's U.S. and Canada retail market share in 1994 decreased slightly in comparison to 1993. Decreases in car market share were partially offset by increases in truck market share, as shown below:
---------------------- (1) All retail sale and market share data include fleet sales.
The decline in Chrysler's U.S. car market share during 1994 resulted from reduced sales to fleet customers and reduced sales in certain segments resulting from changeovers to all-new 1995 models. The increase in U.S. truck market share in 1994 was the result of increased sales of full-size Dodge Ram pickup trucks introduced in late 1993. Despite increased retail unit sales in 1994, market shares in the minivan and small sport-utility segments decreased slightly from 1993, principally as a result of market demand in excess of Chrysler's 1994 production capacity for minivans and Jeep(R) vehicles.
CFC's earnings before income taxes and the cumulative effect of changes in accounting principles were $315 million in 1994, compared to $267 million in 1993. The increase in 1994 was primarily due to higher volumes of automotive financing, reduced credit loss provisions and lower costs of bank facilities. CFC reported net earnings of $195 million and $129 million for 1994 and 1993, respectively. CFC's net earnings for 1993 included charges totaling $30 million for the adoptions of SFAS No. 106 and SFAS No. 112.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF Part II - Continued FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
FINANCIAL REVIEW - Continued
During 1994 and 1993, Chrysler continued to take various actions to strengthen its financial condition, improve liquidity and add to its equity base in order to ensure its ability to carry out its capital spending plans. During 1994 and 1993, Chrysler contributed a total of $6.1 billion to its pension fund. At December 31, 1994, Chrysler had plan assets in excess of its projected pension benefit obligation ("PBO") of $244 million, compared to a PBO in excess of plan assets of $3.9 billion at December 31, 1992. During 1993, Chrysler issued 52 million shares of common stock for net proceeds of $1.95 billion. During 1994 and 1993, Chrysler sold assets and investments for proceeds totaling approximately $786 million.
Chrysler's revenues and results of operations are principally derived from the U.S. and Canada automotive marketplace. During 1994, combined U.S. and Canada automobile industry sales increased 8 percent from the 1993 levels, as the economic recoveries in the U.S. and Canada continued. Overall, Chrysler experienced sales growth consistent with the U.S. and Canada automobile industry. In response to the economic recovery, Chrysler is increasing its worldwide production capacity by approximately 500,000 units per year by 1996.
Chrysler vehicles manufactured in Mexico represented approximately 9 percent of Chrysler's 1994 worldwide factory car and truck sales. Approximately two-thirds of these vehicles were exported to the U.S., Canada and other markets. Sales in Mexico of vehicles manufactured in the U.S. and Canada were not significant in 1994. The economic uncertainty in Mexico following the devaluation of the Peso may result in reduced vehicle sales in Mexico in 1995. As a result, exports to Mexico of Chrysler vehicles manufactured in the U.S. and Canada may decrease, and sales of vehicles in Mexico may be less profitable in 1995, as compared to 1994. If U.S. and Canada vehicle industry sales continue at present or higher levels, imports to the U.S. and Canada of Chrysler vehicles manufactured in Mexico may increase, and such sales may be more profitable in 1995, as compared to 1994. The devaluation of the Peso did not significantly impact Chrysler's 1994 operating results. Chrysler cannot predict the impact that the devaluation of the Peso and the resulting uncertainty surrounding the Mexican economic and political environments will have on its operating results in 1995.
During the first half of 1995, Chrysler will begin production of its all-new minivans, and will cease production of its existing minivan models. Chrysler expects this changeover will result in a decline in minivan production in 1995 which Chrysler currently estimates at approximately 65,000 units.
Chrysler has benefitted from several factors, including: (1) continuing economic recoveries (including low interest rates) and strong automobile sales in the U.S. and Canada, where Chrysler's sales are concentrated, (2) a cost advantage in comparison to vehicles manufactured in Japan (or vehicles containing significant material components manufactured in Japan) as a result of favorable exchange rates between the Japanese Yen and the U.S. Dollar, and (3) a shift in U.S. and Canada consumer preferences toward trucks, as Chrysler manufactures a higher proportion of trucks to total vehicles than its principal competitors in the U.S. and Canada. A significant deterioration of any of these factors could adversely affect Chrysler's operating results.
COMPARISON OF SELECTED ELEMENTS OF REVENUES AND EXPENSES
Chrysler's total revenues were as follows:
The increase in sales of manufactured products in 1994 primarily reflects the 12 percent increase in factory unit sales to 2,762,103 units in 1994. The 1993 increase was largely due to a 14 percent increase in factory unit sales from the 2,175,447 units in 1992. Average revenue per unit, net of sales incentives, was $17,663, $16,461 and $15,086 in 1994, 1993 and 1992, respectively. The increases in average revenue per unit in 1994 and 1993 were principally due to reduced sales incentives and sales of an increased proportion of trucks to total vehicles.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF Part II - Continued FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
COMPARISON OF SELECTED ELEMENTS OF REVENUES AND EXPENSES - Continued
The decreases in finance and insurance income in 1994 and 1993 were primarily attributable to reduced nonautomotive financing revenue, resulting from sales and liquidations of CFC's nonautomotive receivables, partially offset by increased levels of automotive finance receivables. Total automotive financing volume in 1994, 1993 and 1992 was $70.4 billion, $59.8 billion and $46.6 billion, respectively. The increases in automotive financing volume over the last two years was largely due to higher volumes of wholesale financing provided to automotive dealers. Financing support provided in the United States by CFC for new Chrysler vehicle retail deliveries (including fleet) and wholesale vehicle sales to dealers and the number of vehicles financed during the last three years were as follows:
Other income increased during 1994, as compared to 1993 and 1992, as a result of increased interest income, reflecting Chrysler's increased cash, cash equivalents and marketable securities balances in 1994.
Total expenses were as follows:
Costs, other than items below increased over the three years primarily due to the increases in factory unit sales volume. Included in costs, other than items below in 1992 is a $110 million investment loss for reducing investments of Chrysler Canada and certain of its employee benefit plans in a real estate concern to their estimated net realizable value. Excluding the 1992 investment loss, costs, other than items below as a percent of net sales of manufactured products were 77 percent, 79 percent and 84 percent in 1994, 1993 and 1992, respectively. These improvements were primarily due to lower per unit sales incentives and increased capacity utilization.
Depreciation of property and equipment remained comparable in 1994, 1993 and 1992. Increases resulting from Chrysler's capital spending program were offset by reductions at CFC resulting from the sales and downsizing of its nonautomotive financing operations. Special tooling amortization increased in 1994 over the 1993 and 1992 levels, primarily as a result of the shortening of the remaining service lives of certain special tools in 1994.
Selling and administrative expenses increased in 1994 from the 1993 and 1992 levels, as a result of increased advertising costs and increased profit-based employee costs. During 1993, increased profit-based employee costs were offset by reduced costs at CFC due to the downsizing of its nonautomotive financing operations.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF Part II - Continued FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
COMPARISON OF SELECTED ELEMENTS OF REVENUES AND EXPENSES - Continued
Pension expense decreased in 1994 due to improved funding of the plans, partially offset by increases resulting from the reduction in the discount rate used to measure pension expense in 1994 and benefit increases from Chrysler's 1993 national contracts with its principal bargaining units. Pension expense decreased in 1993 due to improved funding of the plans. Contributions during 1994, 1993 and 1992 were $2.6 billion, $3.5 billion and $816 million, respectively.
Nonpension postretirement benefit expense increased slightly in 1994, as increases resulting from the reduction in the discount rate used to measure nonpension postretirement benefit expense in 1994 were partially offset by cost savings associated with the implementation of new managed care initiatives. Nonpension postretirement benefit expense increased significantly in 1993 due to the adoption of SFAS No. 106, which requires that the costs of health and life insurance benefits for retirees be accrued as expense in the period in which employees provide services.
The decline in interest expense in 1994 was primarily due to reductions in CFC's effective cost of borrowings, resulting from CFC's higher levels of commercial paper, which has lower costs than borrowings under CFC's bank facilities. The decline in interest expense in 1993 was primarily the result of CFC's lower average borrowings, reflecting CFC's 1993 sales of its nonautomotive financing operations, the proceeds from which were used to reduce outstanding indebtedness. CFC's average effective cost of borrowings was 8.0 percent, 8.6 percent and 7.8 percent in 1994, 1993 and 1992, respectively. The decrease in CFC's 1994 average effective cost of borrowings reflects lower bank facility costs and higher levels of commercial paper. The increase in CFC's average effective cost of borrowings in 1993 as compared to 1992 was primarily due to the amortization of up-front fees and costs associated with CFC's former bank facilities, which were replaced in 1994.
The results of operations for 1992 included a restructuring charge of $101 million relating to the realignment of Chrysler's short-term vehicle rental subsidiaries under Pentastar Transportation Group and the consolidation and phase-out of certain of these operations. This restructuring charge included the write-down of goodwill, lease termination costs, losses associated with the disposal of tangible assets, and other related charges.
Operating results for 1993 and 1992 included gains on sales of automotive assets and investments of $265 million and $142 million, respectively. The 1993 pretax gain was composed of a $205 million gain on the sales of an aggregate of 50.3 million shares of MMC stock and a $60 million gain on the sale of Chrysler's plastics operations. The 1992 pretax gain resulted from the sale of 43.6 million shares of MMC stock.
Chrysler's effective tax rates in 1994, 1993 and 1992 were 36.3 percent, 37.1 percent and 45.9 percent, respectively. The provision for income taxes in 1994 included adjustments aggregating $132 million for: (1) the recognition of tax credits related to expenditures in prior years for qualifying research and development activities, in accordance with an Internal Revenue Service settlement which was based on recently issued U.S. Department of Treasury income tax regulations, and (2) the reversal of valuation allowances related to tax benefits associated with net operating loss carryforwards. The 1993 provision for income taxes included a favorable adjustment of Chrysler's deferred tax assets and liabilities to the increased U.S. federal tax rate. The 1992 effective tax rate was higher than the effective tax rates in 1994 and 1993 as a result of higher nondeductible expenses, primarily goodwill amortization.
LIQUIDITY AND CAPITAL RESOURCES
Chrysler's combined cash, cash equivalents and marketable securities totaled $8.4 billion at December 31, 1994 (including $757 million held by CFC), compared to $5.1 billion and $3.6 billion at December 31, 1993 and 1992, respectively. The increase in 1994 was the result of cash generated by operating activities, partially offset by capital expenditures and pension contributions. The increase in 1993 was the result of cash generated by operating activities, the issuance of 52 million shares of new common stock and the sale of assets and investments, partially offset by debt repayments, pension contributions and capital expenditures.
Chrysler's long-term profitability will depend on its ability to develop and market its products successfully. Chrysler's expenditures for new product development and the acquisition of productive assets were $13.7 billion for the three-year period ended December 31, 1994. Expenditures for these items during the succeeding three-year period are expected to be at similar or higher levels. At December 31, 1994, Chrysler had commitments for capital expenditures, including commitments for assets currently under construction, totaling approximately $1.0 billion.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF Part II - Continued FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
LIQUIDITY AND CAPITAL RESOURCES - CONTINUED
Chrysler's pension assets exceeded its PBO by $244 million at December 31, 1994, compared to a PBO in excess of plan assets of $2.2 billion and $3.9 billion at December 31, 1993 and 1992, respectively. These reductions in the unfunded pension obligation resulted from Chrysler's contributions of $2.6 billion and $3.5 billion to the pension fund in 1994 and 1993, respectively. In addition to the contributions in 1994, the projected pension benefit obligation was reduced by an increase in the discount rate used to measure the obligation. The favorable impact of the 1993 contributions was partially offset by increases in the PBO caused by the reduction in the discount rate used to measure the obligation and pension benefit increases which were included in Chrysler's new national labor agreements with its principal collective bargaining units.
During 1994, Chrysler replaced its $1.5 billion revolving credit agreement, which was to expire in June 1996, with a new $1.7 billion agreement, expiring in July 1999. The new agreement provides for reduced interest rates and commitment fees, less restrictive financial covenants and the removal of the lenders' ability to obtain security interests in Chrysler's assets. None of the commitment was drawn upon at December 31, 1994.
At December 31, 1994, Chrysler (excluding CFC) had debt maturities totaling $695 million in 1995, 1996 and 1997. In December 1994, Chrysler's Board of Directors approved a $1 billion common stock repurchase program commencing in the first quarter of 1995, subject to market conditions. Chrysler believes that cash from operations and its cash position will provide sufficient liquidity to meet its capital expenditure, debt maturity and other funding requirements.
Chrysler's ability to market its products successfully depends significantly on the availability of vehicle financing for its dealers and, to a lesser extent, the availability of financing for retail and fleet customers, both of which CFC provides.
Term debt borrowings, commercial paper borrowings and receivable sales are CFC's primary funding sources. During 1994, CFC raised $1.8 billion from term debt placements and increased the amount of its commercial paper outstanding by $1.5 billion.
Receivable sales continued to be a significant source of funding for CFC, which realized $6.4 billion and $7.8 billion of net proceeds from the sale of automotive retail receivables during 1994 and 1993, respectively. In addition, CFC's wholesale receivable sale arrangements provided funding which aggregated $3.8 billion and $4.6 billion at December 31, 1994 and 1993, respectively.
During 1993 and 1992, $3.3 billion in aggregate cash proceeds were received from the sale of substantially all of the net assets of the consumer and inventory financing businesses of Chrysler First Inc. and the sale of certain assets of Chrysler Capital. Proceeds from these sales were used to reduce outstanding indebtedness.
At December 31, 1994, CFC had U.S. and Canadian bank facilities aggregating $5.2 billion and receivable sale agreements totaling $1.7 billion. At December 31, 1994, no amounts were outstanding under CFC's U.S. and Canadian bank facilities or receivable sale agreements.
At December 31, 1994, CFC had debt maturities of $5.1 billion in 1995 (including $4.3 billion of commercial paper), $1.7 billion in 1996, and $692 million in 1997. CFC believes that cash provided by operations, receivable sales and the issuance of term debt and commercial paper will be sufficient to enable it to meet its funding requirements.
NEW ACCOUNTING STANDARDS
In May 1993, the Financial Accounting Standards Board ("FASB") issued SFAS No. 114, "Accounting by Creditors for Impairment of a Loan," effective for fiscal years beginning after December 15, 1994. In October 1994, the FASB issued SFAS No. 118, "Accounting by Creditors for Impairment of a Loan--Income Recognition and Disclosures," as an amendment to SFAS No. 114. These new accounting standards require creditors to evaluate the collectibility of both contractual interest and principal of receivables when evaluating the need for a loss accrual. Chrysler believes that the implementation of these new accounting standards will not have a material impact on its consolidated operating results or financial position. Chrysler will adopt these standards effective January 1, 1995, as required.
Item 8.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Part II - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED STATEMENT OF EARNINGS
- -------------------------- See notes to consolidated financial statements.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED BALANCE SHEET
- -------------------------- See notes to consolidated financial statements.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS
- -------------------------- See notes to consolidated financial statements.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CONSOLIDATION AND FINANCIAL STATEMENT PRESENTATION
The consolidated financial statements of Chrysler Corporation and its consolidated subsidiaries ("Chrysler") include the accounts of all significant majority-owned subsidiaries and entities. Intercompany accounts and transactions have been eliminated in consolidation. Amounts for 1993 and 1992 have been reclassified to conform with current period classifications.
REVENUE RECOGNITION
Vehicle and parts sales are generally recorded when such products are shipped to dealers. Provisions for sales allowances and incentives are made at the time of sale and treated as sales reductions.
Interest income from finance receivables of Chrysler Financial Corporation ("CFC"), a wholly owned subsidiary, is recognized using the interest method. Lending fees and certain direct loan origination costs are deferred and amortized to interest income using the interest method over the contractual terms of the finance receivables. Recognition of interest income is generally suspended when a loan becomes contractually delinquent for periods ranging from 60 to 90 days. Income recognition is resumed when the loan becomes contractually current, at which time all past due interest income is recognized.
CFC sells significant amounts of automotive receivables in transactions subject to limited recourse provisions. CFC generally sells its receivables to a trust and remains as servicer, for which it is paid a servicing fee. CFC retains excess servicing cash flows, a limited interest in the principal balances of the sold receivables and certain cash deposits provided as credit enhancements for investors.
Gains or losses from the sale of receivables are recognized in the period that such sales occur. In determining the gain or loss for each qualifying sale, 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.
DEPRECIATION AND TOOL AMORTIZATION
Property and equipment are stated at cost less accumulated depreciation. Depreciation is generally provided on a straight-line basis. At December 31, 1994, the weighted average service lives of assets were 34 years for buildings (including improvements and building equipment), 14 years for machinery and equipment and 11 years for furniture and fixtures. Special tooling costs are amortized over the years that a model using that tooling is expected to be produced, and within each year based on the units produced. Amortization is deducted directly from the asset account. During any given model year, special tools will contain tooling with varying useful lives.
Effective April 1, 1994, Chrysler revised the estimated service lives of certain special tools and property and equipment. These revisions were based on updated assessments of the service lives of the related assets and resulted in the recognition of additional amortization of special tools of $246 million in 1994 and lower depreciation of property and equipment of $45 million in 1994.
PRODUCT-RELATED COSTS
Expenditures for advertising, sales promotion and other product-related costs are expensed as incurred, and the estimated costs of product warranty are accrued at the time of sale. Advertising expense was $1.1 billion, $858 million and $873 million in 1994, 1993 and 1992, respectively. Research and development costs were $1.3 billion, $1.2 billion and $1.1 billion in 1994, 1993 and 1992, respectively.
CASH AND CASH EQUIVALENTS
Highly liquid investments with a maturity of three months or less at the date of purchase are classified as cash equivalents.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
MARKETABLE SECURITIES
Effective January 1, 1994, Chrysler adopted Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and Equity Securities." This new accounting standard specifies the accounting and reporting requirements for changes in the fair values of investments in debt and equity securities which have readily determinable fair values. Prior to 1994, marketable equity securities were carried at cost, which approximated market, while debt securities were carried at cost adjusted for amortized premium or discount. Adoption of this accounting standard did not have a material effect on Chrysler's financial statements.
Under SFAS No. 115, these debt and equity securities are segregated into one of the following categories--trading, available-for-sale and held-to-maturity. Trading securities and available-for-sale securities are carried at their fair values. Changes in the fair values of trading securities are recorded in the statement of earnings. Changes in the fair values of available-for-sale securities are recorded as a component of shareholders' equity until such securities are sold. Held-to-maturity securities are carried at cost adjusted for amortized premium or discount.
At December 31, 1994, Chrysler had investments in securities (including cash equivalents) with an aggregate carrying value of $7.9 billion accounted for in accordance with SFAS No. 115. These securities consisted primarily of commercial paper, federal government agency securities and corporate debt. At December 31, 1994, securities categorized as available-for-sale and held-to- maturity totaled $5.5 billion and $2.4 billion, respectively. Substantially all such securities have maturities within one year.
ALLOWANCE FOR CREDIT LOSSES
An allowance for credit losses is generally established during the period in which finance receivables are acquired. The allowance for credit losses is maintained at a level deemed appropriate based on loss experience and other factors. Retail automotive receivables not supported by a dealer guaranty are charged to the allowance for credit losses net of the estimated value of repossessed collateral at the time of repossession. Nonautomotive finance receivables are reduced to the estimated fair value of the collateral when such receivables are determined to be impaired.
In May 1993, the Financial Accounting Standards Board ("FASB") issued SFAS No. 114, "Accounting by Creditors for Impairment of a Loan," effective for fiscal years beginning after December 15, 1994. In October 1994, the FASB issued SFAS No. 118, "Accounting by Creditors for Impairment of a Loan--Income Recognition and Disclosures," as an amendment to SFAS No. 114. These new accounting standards require creditors to evaluate the collectibility of both contractual interest and principal of receivables when evaluating the need for a loss accrual. Chrysler believes that the implementation of these new accounting standards will not have a material impact on its consolidated operating results or financial position. Chrysler will adopt these standards effective January 1, 1995, as required.
INVENTORIES
Inventories are valued at the lower of cost or market. The cost of approximately 51 percent and 44 percent of inventories at December 31, 1994 and 1993, respectively, was determined on a Last-In, First-Out ("LIFO") basis. The balance of inventory cost was determined on a First-In, First-Out ("FIFO") basis.
INTANGIBLE ASSETS
The purchase price of companies in excess of the value of net identifiable assets acquired ("goodwill") is amortized on a straight-line basis over periods of up to 40 years. The amount is reported net of accumulated amortization of $723 million and $643 million at December 31, 1994 and 1993, respectively. Intangible assets also included intangible pension assets of $44 million and $2.1 billion at December 31, 1994 and 1993, respectively.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
POSTEMPLOYMENT BENEFITS
Effective January 1, 1993, Chrysler adopted SFAS No. 112, "Employers' Accounting for Postemployment Benefits," which required the accrual of benefits provided to former or inactive employees after employment but prior to retirement. Prior to 1993, Chrysler accrued for certain of these benefits at the time an employee's active service ended and expensed certain other benefits on the basis of cash expenditures. Adoption of this accounting standard resulted in the recognition of an after-tax charge of $283 million, or $0.82 per common share, for the cumulative effect of this change in accounting principle.
DERIVATIVE FINANCIAL INSTRUMENTS
Chrysler manages risk arising from fluctuations in interest rates and currency exchange rates by utilizing derivative financial instruments. Chrysler does not use derivative financial instruments for trading purposes. For the year ended December 31, 1994, Chrysler adopted SFAS No. 119, "Disclosure about Derivative Financial Instruments and Fair Value of Financial Instruments."
When Chrysler sells vehicles outside the United States or purchases components from suppliers outside the United States, transactions are frequently denominated in currencies other than U.S. dollars. Periodically, Chrysler initiates hedging activities by entering into currency exchange agreements, consisting principally of currency forward contracts and purchased currency options, to minimize revenue and cost variations which could result from fluctuations in currency exchange rates. These hedge instruments typically mature within two years of origination. The currency exchange agreements are treated as off-balance sheet financial instruments, with related gains and losses recorded in the settlement of the underlying transactions. In the event of an early termination of a currency exchange agreement designated as a hedge, the gain or loss continues to be deferred and is included in the settlement of the underlying transaction.
CFC utilizes interest rate swaps, interest rate caps, forward interest rate contracts and currency exchange agreements as part of its asset and liability management program. Due to changing interest rates, interest rate exchange agreements, which are treated as off-balance sheet financial instruments, are utilized to stabilize interest margins. Interest differentials resulting from interest rate swap and cap agreements are recorded on an accrual basis as an adjustment to interest expense. In the event of an early termination of an interest rate exchange agreement designated as a hedge, gains or losses are deferred and recorded as an adjustment to interest expense over the remaining term of the underlying debt. Forward interest rate contracts are periodically used to manage exposure to fluctuations in funding costs for anticipated securitizations of retail receivables. Unrealized gains or losses on forward interest rate contracts that qualify for hedge accounting treatment are deferred. Unrealized gains or losses on forward interest rate contracts that do not qualify for hedge accounting treatment are included in the statement of earnings. Realized gains or losses for hedge instruments are included in the determination of the gain or loss from the related sale of retail receivables. CFC and its subsidiaries hedge borrowings denominated in currencies other than the borrowers' local currency with currency exchange agreements, which are reflected in the consolidated balance sheet. As a result, such borrowings are translated in the financial statements at the rates of exchange established under the related currency exchange agreements.
NOTE 2. INVENTORIES AND COST OF SALES
Inventories, summarized by major classification, were as follows:
Inventories valued on the LIFO basis would have been $328 million and $259 million higher than reported had they been valued on the FIFO basis at December 31, 1994 and 1993, respectively.
Total manufacturing cost of sales aggregated $39.0 billion, $33.1 billion and $28.7 billion for 1994, 1993 and 1992, respectively.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3. FINANCE RECEIVABLES, RETAINED INTERESTS IN SOLD RECEIVABLES AND OTHER RELATED AMOUNTS
Finance receivables, retained interests in sold receivables and other related amounts were as follows:
Retained interests in sold receivables and other related amounts are generally restricted and subject to limited recourse provisions. At December 31, 1994, CFC was a party to an interest rate cap agreement related to $134 million of its retained interests. This agreement, which is designated as a hedge instrument, resulted in no impact on interest income at CFC. At December 31, 1994, CFC was also a party to a forward interest rate contract (notional amount $500 million) to manage its exposure to fluctuations in funding costs for an anticipated securitization of retail receivables during the first quarter of 1995.
Contractual maturities of total finance receivables as of December 31, 1994, were (in millions of dollars): 1995 - $5,219; 1996 - $1,371; 1997 - $1,108; 1998 - $862; 1999 - $549; and 2000 and thereafter - $1,430. Actual cash flows will vary from contractual cash flows due to future sales of finance receivables and prepayments.
Changes in the allowance for credit losses were as follows:
Nonearning finance receivables, including receivables sold subject to limited recourse, totaled $282 million and $333 million at December 31, 1994 and 1993, respectively, which represented 0.9 percent and 1.2 percent of such receivables outstanding, respectively.
NOTE 4. PROPERTY AND EQUIPMENT
Property and equipment, summarized by major classification, were as follows:
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5. ACCRUED LIABILITIES AND EXPENSES
Accrued liabilities and expenses consisted of the following:
NOTE 6. DEBT
Long-term debt consisted of the following:
- -------------------------
(1) The weighted average interest rates include the effects of interest rate exchange agreements.
At December 31, 1994, aggregate annual maturities of consolidated debt, including principal payments on capital leases, were as follows (in millions of dollars): 1995 - $5,456; 1996 - $1,705; 1997 - $1,009; 1998 - $999; and 1999 - $1,577.
CFC enters into currency exchange agreements to manage its exposure to fluctuations in currency exchange rates related to specific funding transactions. Certain borrowings in U.S. Dollars, German Marks and Swiss Francs are hedged with currency exchange agreements in the local currency of the borrowing entity. As a result, such borrowings are translated in the financial statements at the rates of exchange established under the related currency exchange agreement. The amount of such borrowings was $734 million. If CFC had not entered into currency exchange agreements, the amount would have been $220 million higher at December 31, 1994.
To mitigate risks associated with changing interest rates on certain of its debt, CFC has entered into interest rate exchange agreements. CFC manages exposure to counterparty credit risk by entering into such agreements only with major financial institutions that are expected to fully perform under the terms of such agreements. The notional amounts are used to measure the volume of these agreements. The impact on interest expense of interest rate exchange agreements was immaterial in 1994, 1993 and 1992. Chrysler cannot predict the impact that such agreements may have on interest expense in the future.
Interest rate swaps related to term debt are matched with specific obligations, altering the interest rate characteristics of the associated debt. Interest rate swaps are also utilized to reduce exposure to interest rate fluctuations on the anticipated issuances of commercial paper. Interest rate swaps associated with commercial paper are matched with groups of such obligations on a layered basis. An aggregate of $4.3 billion of commercial paper was outstanding at December 31, 1994.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6. DEBT - CONTINUED
The following table summarizes CFC's interest rate derivatives related to its debt obligations as of December 31, 1994 and 1993:
During 1994, CFC replaced its revolving credit and receivable sale agreements, which were to expire in 1995, with new agreements providing for credit lines totaling $5.2 billion and receivable sale agreements totaling $1.7 billion, expiring in 1998. These agreements contain restrictive covenants, which, among other things, require CFC to maintain a minimum net worth. None of the commitments were drawn upon at December 31, 1994.
During 1994, Chrysler replaced its $1.5 billion revolving credit agreement, which was to expire in June 1996, with a new $1.7 billion revolving credit agreement expiring in July 1999. The new agreement provides for reduced interest rates and commitment fees, less restrictive financial covenants and the removal of the lenders' ability to obtain security interests in Chrysler's assets. None of the commitment was drawn upon at December 31, 1994.
NOTE 7. INCOME TAXES
Effective January 1, 1992, Chrysler adopted SFAS No. 109, "Accounting for Income Taxes," which resulted in a favorable cumulative effect of the change in accounting principle of $218 million, or $0.74 per common share.
Earnings before income taxes and the cumulative effect of changes in accounting principles were attributable to the following sources:
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7. INCOME TAXES - CONTINUED
The provision for income taxes on earnings before income taxes and the cumulative effect of changes in accounting principles included the following:
Chrysler does not provide for U.S. income tax or foreign withholding taxes on the undistributed earnings of foreign subsidiaries, as such cumulative earnings of $1.9 billion are intended to be permanently reinvested in those operations. It is not practicable to estimate the amount of unrecognized deferred tax liability for the undistributed foreign earnings.
A reconciliation of income taxes determined using the statutory U.S. rate (35 percent for 1994 and 1993; 34 percent for 1992) to actual income taxes provided was as follows:
The adjustment to the provision for income taxes for the recognition of prior years research and development tax credits in 1994 represents the tax benefits related to expenditures in prior years for qualifying research and development activities, in accordance with an Internal Revenue Service settlement which was based on recently issued U.S. Department of Treasury income tax regulations.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA-Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7. INCOME TAXES - CONTINUED
The tax-effected temporary differences and carryforwards which comprised deferred tax assets and liabilities were as follows:
Chrysler's tax credit carryforwards expire at various dates through the year 2009; alternative minimum tax credit carryforwards have no expiration dates. NOL carryforwards totaled $313 million at December 31, 1994, and may be used through the year 2008. The valuation allowance was principally related to certain subsidiaries' NOL carryforwards. Changes in the valuation allowance were as follows:
NOTE 8. COMMITMENTS AND CONTINGENT LIABILITIES
LITIGATION
Various claims and legal proceedings have been asserted or instituted against Chrysler, including some purporting to be class actions, and some which demand large monetary damages or other relief which would require significant expenditures. Although the ultimate cost of resolving these matters cannot be precisely determined, Chrysler maintains reserves which it believes will be sufficient to resolve these matters. After giving effect to these reserves, management believes, based on currently known facts and circumstances, that the disposition of these matters will not have a material adverse effect on Chrysler's consolidated financial position. Future developments could cause Chrysler to change its estimate of the ultimate cost of resolving these matters, and such changes could be material to Chrysler's consolidated results of operations for the period in which such developments occur. Chrysler is unable to estimate such changes in costs, if any, which may be required in connection with these matters.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8. COMMITMENTS AND CONTINGENT LIABILITIES - CONTINUED
ENVIRONMENTAL MATTERS
The United States Environmental Protection Agency and various state agencies have notified Chrysler that it may be a potentially responsible party ("PRP") for the cost of cleaning up hazardous waste storage or disposal facilities pursuant to the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") and other federal and state environmental laws. Chrysler is also a party to a number of lawsuits filed in various jurisdictions alleging CERCLA or other environmental claims. In virtually all cases, Chrysler is only one of a number of PRPs who may be found to be jointly and severally liable. In addition, Chrysler has identified additional active or deactivated facilities at which it may be responsible for closure activities or cleaning up hazardous waste. Estimates of future costs of such environmental matters are necessarily imprecise due to numerous uncertainties, including the enactment of new laws and regulations, the development and application of new technologies, the identification of new sites for which Chrysler may have remediation responsibility and the apportionment and collectibility of remediation costs among responsible parties. Chrysler may ultimately incur significant expenditures over an extended period of time in connection with the foregoing environmental matters, and therefore maintains reserves for the estimated costs associated with all of its environmental remediation efforts, including CERCLA and related matters, expected closure activities and voluntary environmental cleanup efforts. Chrysler believes that these reserves will be sufficient to resolve these matters. After giving effect to these reserves, management believes, based on currently known facts and circumstances and existing laws and regulations, that the disposition of these matters will not have a material adverse effect on Chrysler's consolidated financial position. Future developments could cause Chrysler to change its estimate of the total costs associated with these matters, and such changes could be material to Chrysler's consolidated results of operations for the period in which such developments occur. Chrysler is unable to estimate such changes in costs, if any, which may be required in connection with these matters.
OTHER MATTERS
The majority of Chrysler's lease payments are for operating leases. At December 31, 1994, Chrysler had the following minimum rental commitments under noncancelable operating leases: 1995 - $325 million; 1996 - $263 million; 1997 - - $134 million; 1998 - $61 million; 1999 - $48 million; and 2000 and thereafter - - $143 million. Future minimum lease commitments have not been reduced by minimum sublease rentals of $252 million due in the future under noncancelable subleases.
Rental expense for operating leases, with original expiration dates beyond one year, was $407 million, $410 million and $383 million in 1994, 1993 and 1992, respectively. Sublease rentals of $60 million, $61 million, and $60 million were received in 1994, 1993, and 1992, respectively.
Chrysler had commitments for capital expenditures, including commitments for facilities currently under construction, approximating $1.0 billion at December 31, 1994.
At December 31, 1994, Chrysler had guaranteed obligations of others in the amount of $224 million, none of which were secured by collateral.
NOTE 9. STOCK OPTIONS AND PERFORMANCE-BASED COMPENSATION
The Chrysler Corporation 1991 Stock Compensation Plan (the "1991 Plan") provides that Chrysler may grant stock options to officers, key employees and nonemployee directors and also may grant reload stock options (which are options granted when outstanding options are exercised by payment in stock), stock appreciation rights (payable in cash or stock, at the sole discretion of the Stock Option Committee) and limited stock appreciation rights (payable in cash in the event of a change in control). The 1991 Plan also provides for awarding restricted stock units and performance stock units, which reward service for specified periods or attainment of performance objectives. The Chrysler Corporation Stock Option Plan (the "Plan"), initially adopted in 1972 and readopted in 1982, was amended to incorporate certain features of the 1991 Plan.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9. STOCK OPTIONS AND PERFORMANCE-BASED COMPENSATION - CONTINUED
Under the Plan and the 1991 Plan, outstanding options, consisting of ten-year nonqualified stock options, have exercise prices of not less than the market value of Chrysler common stock at date of grant. Options generally become exercisable on up to 40 percent of the shares after one year from the date of grant, 70 percent after two years and 100 percent after three years. Information with respect to options granted under the Plan and the 1991 Plan, including the conversion of AMC options outstanding at the date of the AMC acquisition, was as follows:
Shares available for granting options at the end of 1994, 1993 and 1992 were 15.1 million, 1.5 million, and 4.4 million, respectively. At December 31, 1994, 5.6 million options with prices ranging from $16.07 to $54.32 were not yet exercisable under the terms of the Plan and the 1991 Plan.
In addition to the Plan and the 1991 Plan, Chrysler has programs under which additional compensation is paid to hourly and salaried employees based upon various measures of Chrysler's performance. Such performance-based compensation programs include incentive compensation and profit sharing paid to certain hourly and salaried employees.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10. SHAREHOLDERS' EQUITY
Information with respect to shareholders' equity was as follows (shares in millions):
The annual dividend on the Series A Convertible Preferred Stock (the "Preferred Stock") is $46.25 per share. The Preferred Stock is convertible, unless previously redeemed, at a rate (subject to adjustment in certain events) of 27.78 shares of common stock for each share of Preferred Stock. The Preferred Stock is not redeemable prior to January 22, 1997. Thereafter, Chrysler may redeem the Preferred Stock, in whole or in part, at $523.13 per share of Preferred Stock for the period ending December 31, 1997 and thereafter declining ratably annually to $500.00 per share after December 31, 2001, plus accrued and unpaid dividends.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10. SHAREHOLDERS' EQUITY - CONTINUED
In February 1988, the Board of Directors declared and distributed a dividend of one Preferred Share Purchase Right (a "Right") for each then outstanding share of Chrysler's common stock and authorized the distribution of one Right with respect to each subsequently issued share of common stock. Each Right, as most recently amended, entitles a shareholder to purchase one one-hundredth of a share of Junior Participating Cumulative Preferred Stock of Chrysler at a price of $120. The Rights are attached to the common stock and are not represented by separate certificates or exercisable until the earliest to occur of (i) 10 days following the time (the "Stock Acquisition Time") of a public announcement or communication to Chrysler that a person or group of persons has acquired or obtained the right to acquire 15 percent or more of Chrysler's outstanding common stock, and (ii) 10 business days after a person or group announces or commences a tender offer that would result, if successful, in the bidder owning 15 percent or more of Chrysler's outstanding common stock. If the acquiring person or group acquires 15 percent or more of the common stock (except pursuant to a tender offer made for all of Chrysler's common stock, and determined by Chrysler's independent directors to be fair and in the best interests of Chrysler and its shareholders) each Right (other than those held by the acquiror) will entitle its holder to buy, for $120, a number of shares of Chrysler's common stock having a market value of $240. Similarly, if after the Stock Acquisition Time, Chrysler is acquired in a merger or other business combination and is not the surviving corporation, or 50 percent or more of its assets, cash flow or earning power is sold, each Right (other than those held by the surviving or acquiring company) will entitle its holder to purchase, for $120, shares of the surviving or acquiring company having a market value of $240. Chrysler's directors may redeem the Rights at $0.05 per Right, and may amend the Rights or extend the time during which the Rights may be redeemed, only prior to the Stock Acquisition Time. Additionally, at any time after a person acquires 15 percent or more, but less than 50 percent, of Chrysler's common stock, Chrysler's directors may exchange the Rights (other than those held by the acquiror), in whole or in part, at an exchange ratio of one share of common stock (or a fractional share of preferred stock with equivalent voting rights) per Right. The Rights will expire on February 22, 1998.
Of the 1.0 billion shares of authorized common stock at December 31, 1994, 97 million shares were reserved for issuance under Chrysler's various employee benefit plans and the conversion of the Preferred Stock.
Primary earnings (loss) per common share amounts were computed by dividing earnings (loss) after deduction of preferred stock dividends by the average number of common and dilutive equivalent shares outstanding. Fully diluted per-common-share amounts assume conversion of the Preferred Stock, the elimination of the related preferred stock dividend requirement, and the issuance of common stock for all other potentially dilutive equivalents outstanding. Fully diluted per-common-share amounts are not applicable for loss periods.
NOTE 11. PENSION PLANS
Chrysler's pension plans provide noncontributory and contributory benefits. The noncontributory pension plans cover substantially all of the hourly and salaried employees of Chrysler and certain of its consolidated subsidiaries. Benefits are based on a fixed rate for each year of service. Additionally, contributory benefits and supplemental noncontributory benefits are provided to substantially all salaried employees of Chrysler and certain of its consolidated subsidiaries under the Salaried Employees' Retirement Plan. This plan provides contributory benefits based on the employee's cumulative contributions and a supplemental noncontributory benefit based on years of service during which employee contributions were made, and the employee's average salary during the consecutive five years in which salary was highest in the 15 years preceding retirement.
Contributions to the pension trust fund for U.S. plans are in compliance with the Employee Retirement Income Security Act of 1974, as amended. All pension trust fund assets and income accruing thereon are used solely to pay pension benefits and administer the plans. Chrysler made pension fund contributions totaling $2.6 billion in 1994, $3.5 billion in 1993 and $816 million in 1992.
At December 31, 1994, plan assets were invested in a diversified portfolio that consisted primarily of debt and equity securities, including 17.9 million shares of Chrysler common stock with a market value of $879 million. During 1994, $17 million of dividends were received on Chrysler common stock.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11. PENSION PLANS - CONTINUED
The components of pension expense were as follows:
During 1994, 1993 and 1992, the cost of voluntary early retirement programs, which are periodically offered to certain salaried and hourly employees, was $68 million, $40 million and $48 million, respectively.
Pension expense is determined using assumptions at the beginning of the year. The projected benefit obligation ("PBO") is determined using the assumptions at the end of the year. Assumptions used to determine pension expense and the PBO were:
The increase in the discount rate for U.S. Plans from 7.38 percent as of December 31, 1993 to 8.63 percent as of December 31, 1994 resulted in a $1.3 billion decrease in the PBO at December 31, 1994 and is expected to result in a $99 million decrease in the 1995 expense.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11. PENSION PLANS - CONTINUED
The following table presents a reconciliation of the funded status of the plans with amounts recognized in the consolidated balance sheet:
Included in other assets on the consolidated balance sheet as of December 31, 1994 and 1993 was noncurrent prepaid pension expense of $4.1 billion and $1.6 billion, respectively.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12. NONPENSION POSTRETIREMENT BENEFITS
Chrysler provides health and life insurance benefits to substantially all of its hourly and salaried employees and those of certain of its consolidated subsidiaries. Upon retirement from Chrysler, employees may become eligible for continuation of these benefits. However, benefits and eligibility rules may be modified periodically. Prior to 1993, the expense recognized for these benefits was based primarily on cash expenditures for the period. Effective January 1, 1993, Chrysler adopted SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," which requires the accrual of such benefits during the years employees provide services.
The adoption of this accounting standard resulted in an after-tax charge of $4.68 billion, or $13.57 per common share, in 1993. This charge represented the immediate recognition of the transition obligation of $7.44 billion, partially offset by $2.76 billion of estimated tax benefits. The transition obligation is the aggregate amount that would have been accrued in the years prior to the adoption of SFAS No. 106, had this standard been in effect for those years. Implementation of SFAS No. 106 did not increase Chrysler's cash expenditures for postretirement benefits.
Components of nonpension postretirement benefit expense were as follows:
The following table summarizes the components of the nonpension postretirement benefit obligation recognized in the consolidated balance sheet at December 31, 1994 and 1993:
Nonpension postretirement benefit expense is determined using assumptions at the beginning of the year. The ANPBO is determined using the assumptions at the end of the year. Assumptions at December 31, 1994 and 1993 were:
The increase in the discount rate to 8.6 percent as of December 31, 1994 resulted in a $1.1 billion decrease in the ANPBO in 1994, and is expected to result in a $68 million decrease in nonpension postretirement benefit expense in 1995. During 1994, Chrysler implemented new managed care initiatives which reduced the expected health care inflation rate for 1995.
A one percentage point increase in the assumed health care inflation rate in each year would have increased the ANPBO at December 31, 1994 by $1.0 billion and would have increased the aggregate of the service and interest cost components of nonpension postretirement benefit expense in 1994 by $116 million.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13. SALES OF AUTOMOTIVE ASSETS AND INVESTMENTS
During 1994, Chrysler sold its wire harness operations and certain of its soft trim operations, and entered into five-year supply agreements with each of the purchasers. Aggregate net proceeds from the sales and the supply agreements were approximately $325 million. The related pretax gains of approximately $250 million were deferred and are being recognized over the periods of the respective supply agreements.
In 1993, Chrysler sold its plastics operations for net proceeds of $132 million. The sale resulted in a pretax gain of $60 million ($39 million after applicable income taxes). Also during 1993, Chrysler sold its remaining 50.3 million shares of Mitsubishi Motors Corporation ("MMC") stock for net proceeds of $329 million, resulting in a pretax gain of $205 million ($128 million after applicable income taxes).
In 1992, Chrysler sold 43.6 million shares of MMC stock for net proceeds of $215 million, resulting in a pretax gain of $142 million ($88 million after applicable income taxes).
NOTE 14. INVESTMENT ADJUSTMENT AND RESTRUCTURING CHARGE
Included in costs, other than items below for the year ended December 31, 1992 was a pretax charge of $110 million ($69 million after applicable income taxes) to reduce investments of Chrysler Canada Ltd. and certain of its employee benefit plans in a real estate investment concern to their estimated net realizable value.
Earnings for the year ended December 31, 1992 also included a $101 million pretax restructuring charge ($79 million after applicable income taxes) relating to the realignment of a part of Chrysler's short-term vehicle rental subsidiaries (the "Car Rental Operations") under Pentastar Transportation Group, Inc. and to provide for the consolidation and phase out of certain of those operations. This restructuring charge included the write-down of goodwill, lease termination costs, losses associated with the disposal of tangible assets and other related charges.
NOTE 15. SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental disclosures to the consolidated statement of cash flows were as follows:
During 1994, CFC acquired $300 million of marketable securities in a non-cash transaction relating to the securitization of retail receivables.
NOTE 16. FINANCIAL INSTRUMENTS
The estimated fair values of financial instruments have been determined by Chrysler using available market information and the valuation methodologies described below. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein may not be indicative of the amounts that Chrysler could realize in a current market exchange. The use of different assumptions or valuation methodologies may have a material effect on the estimated fair value amounts.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16. FINANCIAL INSTRUMENTS - CONTINUED
Amounts related to Chrysler's financial instruments were as follows:
- ---------------------- (1) The carrying value of finance receivables excludes $2.0 billion of direct finance and leveraged leases classified as finance receivables in the consolidated balance sheet at December 31, 1994 and 1993. The carrying value of retained interests excludes $41 million and $57 million of retail lease securities at December 31, 1994 and 1993, respectively. (2) The carrying value of debt excludes $17 million and $22 million of obligations under capital leases classified as debt in the consolidated balance sheet at December 31, 1994 and 1993, respectively. (3) Currency exchange agreements are recorded on the consolidated balance sheet as a reduction to the carrying value of debt.
The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximated fair values due to the short-term maturities of these instruments.
The methods and assumptions used to estimate the fair values of other financial instruments are summarized as follows:
Marketable securities
The fair values of marketable securities were estimated using quoted market prices.
Finance receivables, retained interests in sold receivables and other related amounts - net
The carrying value of variable-rate finance receivables was assumed to approximate fair value since they are priced at current market rates. The fair value of fixed-rate finance receivables was estimated by discounting expected cash flows using rates at which loans of similar maturity would be made as of the date of the consolidated balance sheet. The fair values of excess servicing cash flows and other amounts due CFC arising from receivable sale transactions were estimated by discounting expected cash flows.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16. FINANCIAL INSTRUMENTS - CONTINUED
Debt
The fair value of public debt was estimated using quoted market prices. The fair value of other long-term debt was estimated by discounting future cash flows using rates currently available for debt with similar terms and remaining maturities.
Currency exchange agreements
The fair values of currency exchange agreements were estimated by discounting the expected cash flows using market exchange rates and relative market interest rates over the remaining terms of the agreements. Currency exchange agreements are more fully described in NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES and NOTE 6. DEBT.
Interest rate exchange agreements
The fair values of interest rate swaps, interest rate caps and forward interest rate contracts were estimated by discounting expected cash flows using quoted market interest rates. Interest rate exchange agreements are more fully described in NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, NOTE 3. FINANCE RECEIVABLES, RETAINED INTERESTS IN SOLD RECEIVABLES AND OTHER RELATED AMOUNTS and NOTE 6. DEBT.
Currency forward contracts and purchased currency options
The fair values of currency forward contracts and purchased currency options were estimated based on quoted market prices for contracts of similar terms. Currency forward contracts and purchased currency options are more fully described in NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
Although not a counterparty to certain derivative financial instruments entered into between securitization trusts and third parties, CFC receives an indirect beneficial interest from such instruments. Such indirect beneficial interests are subject to reduction in the event of a counterparty's nonperformance. If a counterparty had failed to perform at December 31, 1994, CFC would have been exposed to a $27 million loss.
The fair value estimates presented herein were based on information available as of the date of the consolidated balance sheet. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been revalued since the date of the consolidated balance sheet and, therefore, current estimates of fair value may differ from the amounts presented herein.
NOTE 17. INDUSTRY SEGMENT AND GEOGRAPHIC AREA DATA
INDUSTRY SEGMENT DATA
Chrysler operates in two principal industry segments, Car and Truck and Financial Services. The Car and Truck segment is composed of the automotive operations of Chrysler, which includes the research, design, manufacture, assembly and sale of cars, trucks and related parts and accessories. The Car Rental Operations and Chrysler's defense electronics business, Chrysler Technologies Corporation, each represent less than 10 percent of revenues, operating profits and identifiable assets, and have been included in the Car and Truck segment. The Financial Services segment is composed of CFC, which is engaged in wholesale and retail vehicle financing, property and casualty insurance, and servicing nonautomotive loans and leases. Information concerning operations by industry segment was as follows:
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 17. INDUSTRY SEGMENT AND GEOGRAPHIC AREA DATA - CONTINUED
INDUSTRY SEGMENT DATA - CONTINUED
Interest expense of the Financial Services segment has been netted against operating earnings, which is consistent with industry practice. The individual segments do not add to the consolidated amounts due to the elimination of intersegment transactions.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 17. INDUSTRY SEGMENT AND GEOGRAPHIC AREA DATA - CONTINUED
GEOGRAPHIC AREA DATA
Information concerning operations by principal geographic area was as follows:
Transfers between geographic areas are based on prices negotiated between the buying and selling locations.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
CONFORMED
INDEPENDENT AUDITORS' REPORT
Shareholders and Board of Directors Chrysler Corporation Highland Park, Michigan
We have audited the accompanying consolidated balance sheet of Chrysler Corporation and consolidated subsidiaries as of December 31, 1994 and 1993, and the related consolidated statements of earnings and cash flows for each of the three years in the period ended December 31, 1994. 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 consolidated financial statements present fairly, in all material respects, the financial position of Chrysler Corporation and consolidated subsidiaries at December 31, 1994 and 1993, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1994, in conformity with generally accepted accounting principles.
As discussed in the notes to the financial statements, the Company adopted new Statements of Financial Accounting Standards and, accordingly, changed its method of accounting for certain investments in debt and equity securities in 1994, its method of accounting for postretirement benefits other than pensions and postemployment benefits in 1993, and its method of accounting for income taxes in 1992.
Deloitte & Touche LLP Detroit, Michigan January 16, 1995
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
CONFORMED
MANAGEMENT REPORT ON RESPONSIBILITY FOR FINANCIAL REPORTING
Chrysler's management is responsible for preparing the financial statements and other financial information in this Annual Report. This responsibility includes maintaining the integrity and objectivity of financial data and the presentation of Chrysler's results of operations and financial position in accordance with generally accepted accounting principles. The financial statements include amounts that are based on management's best estimates and judgments.
Chrysler's financial statements have been audited by Deloitte & Touche LLP, independent auditors. Their audits were conducted in accordance with generally accepted auditing standards and included consideration of the internal control system and tests of transactions as part of planning and performing their audits.
Chrysler maintains a system of internal controls that provides reasonable assurance that its records reflect its transactions in all material respects and that significant misuse or loss of assets will be prevented. Management believes the system of internal controls is adequate to accomplish these objectives on a continuous basis. Chrysler maintains a strong internal auditing program that independently assesses the effectiveness of the internal controls and recommends possible improvements. Management considers the recommendations of the General Auditor and Deloitte & Touche LLP concerning the system of internal controls and takes appropriate actions to respond to these recommendations.
The Board of Directors, acting through its Audit Committee composed solely of nonemployee directors, is responsible for determining that management fulfills its responsibilities in the preparation of financial statements and the maintenance of internal controls. In fulfilling its responsibility, the Audit Committee recommends independent auditors to the Board of Directors for appointment by the shareholders. The Committee also reviews the consolidated financial statements and adequacy of internal controls. The Audit Committee meets regularly with management, the General Auditor and the independent auditors. Both the independent auditors and the General Auditor have full and free access to the Audit Committee, without management representatives present, to discuss the scope and results of their audits and their views on the adequacy of internal controls and the quality of financial reporting.
It is the business philosophy of Chrysler Corporation and its subsidiaries to obey the law and to require that its employees conduct their activities according to the highest standards of business ethics. Management reinforces this philosophy by numerous actions, including issuing a Code of Ethical Behavior and maintaining a Business Practices Committee and a Business Practices Office to support compliance with the Corporation's policies.
R. J. Eaton G. C. Valade - ------------ ------------- R. J. EATON G. C. VALADE Chairman of the Board and Executive Vice President and Chief Executive Officer Chief Financial Officer
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
SUPPLEMENTAL INFORMATION
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES SELECTED QUARTERLY FINANCIAL DATA (unaudited)
- ------------------------- (1) Results for the first quarter of 1993 included the unfavorable effects of changes in accounting principles of $4.68 billion related to the adoption of SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," and $283 million related to the adoption of SFAS No. 112, "Employers' Accounting for Postemployment Benefits."
(2) Earnings for the second quarter of 1993 included a gain of $60 million ($39 million after applicable income taxes) related to the sale of Chrysler's plastics operations and a gain of $111 million ($70 million after applicable income taxes) related to the sale of 27 million shares of Mitsubishi Motors Corporation ("MMC") stock.
(3) Earnings for the third quarter of 1993 included a gain of $94 million ($58 million after applicable income taxes) related to the sale of Chrysler's remaining 23.3 million shares of MMC stock.
(4) Earnings for the fourth quarter of 1994 included favorable adjustments to the provision for income taxes aggregating $132 million. These adjustments related to: (1) the recognition of tax credits related to expenditures in prior years for qualifying research and development activities, in accordance with an Internal Revenue Service settlement which was based on recently issued U.S. Department of Treasury income tax regulations, and (2) the reversal of valuation allowances related to tax benefits associated with net operating loss carryforwards.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
SUPPLEMENTAL INFORMATION
CHRYSLER (WITH CFC AND CAR RENTAL OPERATIONS ON AN EQUITY BASIS) STATEMENT OF EARNINGS (unaudited)
This Supplemental Information, "Chrysler (with CFC and Car Rental Operations on an Equity Basis)," reflects the results of operations of Chrysler with its investments in Chrysler Financial Corporation ("CFC") and its investments in short-term vehicle rental subsidiaries (the "Car Rental Operations") accounted for on an equity basis rather than as consolidated subsidiaries. This Sup- plemental Information does not purport to present results of operations in accordance with generally accepted accounting principles because it does not comply with Statement of Financial Accounting Standards ("SFAS") No. 94, "Consolidation of All Majority-Owned Subsidiaries." The financial covenant contained in Chrysler's revolving credit facility is based on this Supplemental Information. In addition, because the operations of CFC and the Car Rental Operations are different in nature than Chrysler's manufacturing operations, management believes that this disaggregated financial data enhances an understanding of the consolidated financial statements.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
SUPPLEMENTAL INFORMATION
CHRYSLER (WITH CFC AND CAR RENTAL OPERATIONS ON AN EQUITY BASIS) BALANCE SHEET (unaudited)
This Supplemental Information, "Chrysler (with CFC and Car Rental Operations on an Equity Basis)," reflects the financial position of Chrysler with its investments in CFC and the Car Rental Operations accounted for on an equity basis rather than as consolidated subsidiaries. This Supplemental Information does not purport to present financial position in accordance with generally accepted accounting principles because it does not comply with SFAS No. 94, "Consolidation of All Majority-Owned Subsidiaries." The financial covenant contained in Chrysler's revolving credit facility is based on this Supplemental Information. In addition, because the operations of CFC and the Car Rental Operations are different in nature than Chrysler's manufacturing operations, management believes that this disaggregated financial data enhances an understanding of the consolidated financial statements.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued DATA - Continued
SUPPLEMENTAL INFORMATION
CHRYSLER (WITH CFC AND CAR RENTAL OPERATIONS ON AN EQUITY BASIS) STATEMENT OF CASH FLOWS (unaudited)
This Supplemental Information, "Chrysler (with CFC and Car Rental Operations on an Equity Basis)," reflects the cash flows of Chrysler with its investments in CFC and the Car Rental Operations accounted for on an equity basis rather than as consolidated subsidiaries. This Supplemental Information does not purport to present cash flows in accordance with generally accepted accounting principles because it does not comply with SFAS No. 94, "Consolidation of All Majority-Owned Subsidiaries." The financial covenant contained in Chrysler's revolving credit facility is based on this Supplemental Information. In addition, because the operations of CFC and the Car Rental Operations are different in nature than Chrysler's manufacturing operations, management believes that this disaggregated financial data enhances an understanding of the consolidated financial statements.
Item 9.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS Part II - Continued ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
Items 10, 11, 12, and 13
Information required by Part III (Items 10, 11, 12, and 13) of this Form 10-K is incorporated by reference from Chrysler Corporation's definitive Proxy Statement for its 1995 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission, pursuant to Regulation 14A, not later than 120 days after the end of the fiscal year, all of which information is hereby incorporated by reference in, and made part of, this Form 10-K, except that the information required by Item 10
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
1. Financial Statements
Financial statements filed as part of this Form 10-K are listed under Part II, Item 8.
2. Financial Statement Schedules
No schedules are included because they are not required under the instructions contained in Regulation S-X or because the information called for is shown in the financial statements and notes thereto.
3. Exhibits:
*3-A-1 Copy of Certificate of Incorporation of Chrysler Corporation, as amended and restated and in effect on May 21, 1987.
*3-A-2 Copy of Certificate of Amendment of Certificate of Incorporation of Chrysler Corporation dated May 19, 1994, as in effect on May 20, 1994.
3-B Copy of By-Laws of Chrysler Corporation, as amended as of June 10, 1993. Filed as Exhibit 3-B to Chrysler Corporation Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1993, and incorporated herein by reference.
*3-C Copy of Certificate of Designation for Chrysler Corporation Junior Participating Cumulative Preferred Stock.
*3-D Copy of Certificate of Designation, Preferences and Rights of Series A Convertible Preferred Stock.
4-A Certificate of Incorporation and By-Laws of Chrysler Corporation. See Exhibits 3-A through 3-D above.
4-B-1 Copy of Certificate of Ownership and Merger merging Chrysler Motors Corporation into Chrysler Corporation, effective on December 31, 1989. Filed as Exhibit 4-B-1 to Chrysler Corporation Annual Report on Form 10-K for the year ended December 31, 1989, and incorporated herein by reference.
- ----------------------- *Filed herewith.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued AND REPORTS ON FORM 8-K - CONTINUED
4-B-2 Copy of Agreement of Merger and Plan of Reorganization, dated as of March 6, 1986, among Chrysler Corporation, Chrysler Corporation (now Chrysler Corporation) and New Chrysler, Inc., annexed as Exhibit A to Registration Statement No. 33-4537 on Form S-4 of Chrysler Holding Corporation (now Chrysler Corporation), and incorporated herein by reference.
4-C-1 Copy of Rights Agreement, dated as of February 4, 1988, and amended and restated as of December 14, 1990, between Chrysler Corporation and First Chicago Trust Company of New York (formerly Morgan Shareholder Services Trust Company), as rights Agent, relating to Rights to purchase Chrysler Corporation Junior Participating Cumulative Preferred Stock. Filed as Exhibit 1 to Chrysler Corporation Current Report on Form 8-K, dated December 14, 1990, and incorporated herein by reference.
4-C-2 Amendment No. 1, dated as of December 1, 1994, to the Rights Agreement, dated as of February 4, 1988, and amended and restated as of December 14, 1990, between Chrysler Corporation and First Chicago Trust Company of New York (formerly known as Morgan Shareholder Services Trust Company), as Rights Agent. Filed as Exhibit 1 to Chrysler Corporation Current Report on Form 8-K, dated December 1, 1994, and incorporated herein by reference.
4-D-1 Conformed copy of Indenture, dated as of July 15, 1987, between Chrysler Corporation and State Street Bank and Trust Company (successor to Manufacturers Hanover Trust Company), as Trustee, relating to Debt Securities, Appendix B thereto relating to 10.95% Debentures Due 2017 and Appendix C thereto relating to 10.40% Notes Due 1999. Filed as Exhibit 4-D-1 to Chrysler Corporation Annual Report on Form 10-K for the year ended December 31, 1987, and incorporated herein by reference.
4-D-2 Conformed copy of Indenture, dated as of March 1, 1985, between Chrysler Corporation and State Street Bank and Trust Company (successor to Manufacturers Hanover Trust Company), as Trustee, relating to Debt Securities and Appendix B thereto relating to 13% Debentures Due 1997. Filed as Exhibit 4-B to Chrysler Corporation Annual Report on Form 10-K for the year ended December 31, 1985, and incorporated herein by reference.
4-D-3 Form of Supplemental Indenture, dated as of May 30, 1986, between Chrysler Holding Corporation (now Chrysler Corporation), Chrysler Corporation and Manufacturers Hanover Trust Company, as Trustee, relating to Debt Securities. Filed as Exhibit 4-E-2 to the Post-Effective Amendment No. 1 to Registration Statement No. 33-4537 on Form S-4 of Chrysler Holding Corporation (now Chrysler Corporation), and incorporated herein by reference.
4-D-4 Copy of Supplemental Indenture, dated as of December 31, 1989, between Chrysler Corporation and Manufacturers Hanover Trust Company, as Trustee, relating to Debt Securities. Filed as Exhibit 4-D-4 to Chrysler Corporation Annual Report on Form 10-K for the year ended December 31, 1989, and incorporated herein by reference.
4-D-5 Conformed copy of Third Supplemental Indenture, dated as of May 1, 1990, between Chrysler Corporation and Manufacturers Hanover Trust Company, as Trustee, relating to Debt Securities and Appendix D to Indenture dated as of March 1, 1985 between Chrysler Corporation and Manufacturers Hanover Trust Company relating to Debentures Due 2020. Filed as Exhibit 4-D-5 to Chrysler Corporation Annual Report on Form 10-K for the year ended December 31, 1990, and incorporated herein by reference.
4-D-6 Conformed copy of Trust Agreement, dated as of May 1, 1990, between Chrysler Corporation and Manufacturers Hanover Bank (Delaware), Trustee, relating to the Auburn Hills Trust. Filed as Exhibit 4-D-6 to Chrysler Corporation Annual Report on Form 10-K for the year ended December 31, 1990, and incorporated herein by reference.
4-E Copy of $1,675,000,000 Revolving Credit Agreement, dated as of July 29, 1994, among Chrysler Corporation, the several Banks party to the Agreement and Chemical Bank, as Agent for the Banks. Filed as Exhibit 4E to the Chrysler Corporation Quarterly Report on Form 10-Q for the quarter ended September 30, 1994 and incorporated herein by reference.
4-F-1 Copy of Indenture, dated as of June 15, 1984, between Chrysler Financial Corporation and Manufacturers Hanover Trust Company, as Trustee, United States Trust Company of New York, as successor Trustee, related to Senior Debt Securities of Chrysler Financial Corporation. Filed as Exhibit (1) to the Current Report of Chrysler Financial Corporation on Form 8-K, dated June 26, 1984, and incorporated herein by reference.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued AND REPORTS ON FORM 8-K - CONTINUED
4-F-2 Copy of Indenture, dated as of September 15, 1986, between Chrysler Financial Corporation and Manufacturers Hanover Trust Company, Trustee, United States Trust Company of New York, as Successor Trustee, related to Chrysler Financial Corporation Senior Debt Securities. Filed as Exhibit 4-E to the Quarterly Report of Chrysler Financial Corporation on Form 10-Q for the quarter ended September 30, 1986, and incorporated herein by reference.
4-F-3 Copy of Amended and Restated Indenture, dated as of September 15, 1986, between Chrysler Financial Corporation and Manufacturers Hanover Trust Company, Trustee, United States Trust Company of New York, as Successor Trustee, related to Chrysler Financial Corporation Senior Debt Securities. Filed as Exhibit 4-H to the Quarterly Report of Chrysler Financial Corporation on Form 10-Q for the quarter ended June 30, 1987, and incorporated herein by reference.
4-F-4 Copy of Indenture, dated as of February 15, 1988, between Chrysler Financial Corporation and Manufacturers Hanover Trust Company, Trustee, United States Trust Company of New York, as Successor Trustee, related to Chrysler Financial Corporation Senior Debt Securities. Filed as Exhibit 4-A to Registration No. 33-23479 of Chrysler Financial Corporation, and incorporated herein by reference.
4-F-5 Copy of First Supplemental Indenture, dated as of March 1, 1988, between Chrysler Financial Corporation and Manufacturers Hanover Trust Company, Trustee, United States Trust Company of New York, as successor Trustee, to the Indenture, dated as of February 15, 1988, between such parties, related to Chrysler Financial Corporation Senior Debt Securities. Filed as Exhibit 4-L to the Annual Report of Chrysler Financial Corporation on Form 10-K for the year ended December 31, 1987, and incorporated herein by reference.
4-F-6 Copy of the Second Supplemental Indenture, dated as of September 7, 1990, between Chrysler Financial Corporation and Manufacturers Hanover Trust Company, Trustee, United States Trust Company of New York, as Successor Trustee, to the Indenture, dated as of February 15, 1988, between such parties, related to Chrysler Financial Corporation Senior Debt Securities. Filed as Exhibit 4-M to the Quarterly Report of Chrysler Financial Corporation on Form 10-Q for the quarter ended September 30, 1990, and incorporated herein by reference.
4-F-7 Copy of Third Supplemental Indenture, dated as of May 4, 1992, between Chrysler Financial Corporation and United States Trust Company of New York, as Successor Trustee, to the Indenture, dated as of February 15, 1988 between such parties, relating to Chrysler Financial Corporation Senior Debt Securities. Filed as Exhibit 4-N to the Quarterly Report of Chrysler Financial Corporation on Form 10-Q for the quarter ended June 30, 1992, and incorporated herein by reference.
4-G-1 Copy of Indenture, dated as of February 15, 1988, between Chrysler Financial Corporation and IBJ Schroder Bank & Trust Company, Trustee, related to Chrysler Financial Corporation Subordinated Debt Securities. Filed as Exhibit 4-B to Registration No. 33-23479 of Chrysler Financial Corporation, and incorporated herein by reference.
4-G-2 Copy of First Supplemental Indenture, dated as of September 1, 1989, between Chrysler Financial Corporation and IBJ Schroder Bank & Trust Company, Trustee, to the Indenture, dated as of February 15, 1988, between such parties, related to Chrysler Financial Corporation Subordinated Debt Securities. Filed as Exhibit 4-N to the Current Report of Chrysler Financial Corporation on Form 8-K dated September 1, 1989 and filed September 13, 1989, and incorporated herein by reference.
4-H-1 Copy of Indenture, dated as of February 15, 1988, between Chrysler Financial Corporation and Irving Trust Company, Trustee, related to Chrysler Financial Corporation Junioi Subordinated Debt Securities. Filed as Exhibit 4-C to Registration No. 33-23479 of Chrysler Financial Corporation, and incorporated herein by reference.
4-H-2 Copy of First Supplemental Indenture dated as of September 1, 1989, between Chrysler Financial Corporation and Irving Trust Company, Trustee, to the Indenture, dated as of February 15, 1988, between such parties, related to Chrysler Financial Corporation Junior Subordinated Debt Securities. Filed as Exhibit 4-O to the Current Report of Chrysler Financial Corporation on Form 8-K dated September 1, 1989 and filed on September 13, 1989, and incorporated herein by reference.
10-A-1 Copy of Chrysler Corporation Stock Option Plan, as amended and in effect on and after December 8, 1983 and before May 14, 1986, assumed by Chrysler Corporation (formerly Chrysler Holding Corporation). Filed as Exhibit 10-D-8 to Chrysler Corporation Annual Report on Form 10-K for the year ended December 31, 1983, and incorporated herein by reference.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued AND REPORTS ON FORM 8-K - CONTINUED
10-A-2 Copy of Chrysler Corporation Stock Option Plan, as amended and in effect on and after May 14, 1986 and before November 5, 1987, assumed by Chrysler Corporation (formerly Chrysler Holding Corporation). Filed as Exhibit 10-A-8 to Chrysler Corporation Annual Report on Form 10-K for the year ended December 31, 1986, and incorporated herein by reference.
10-A-3 Copy of Chrysler Corporation Stock Option Plan, as amended and in effect on and after November 5, 1987 and before February 4, 1988. Filed as Exhibit 10-A-8 to Chrysler Corporation Annual Report on Form 10-K for the year ended December 31, 1987, and incorporated herein by reference.
10-A-4 Copy of Chrysler Corporation Stock Option Plan, as amended and in effect on and after February 4, 1988 and before June 7, 1990. Filed as Exhibit 10-A-9 to Chrysler Corporation Annual Report on Form 10-K for the year ended December 31, 1987, and incorporated herein by reference.
10-A-5 Copy of Chrysler Corporation Stock Option Plan, as amended and in effect on and after June 7, 1990. Filed as Exhibit 10-A-10 to Chrysler Corporation Annual Report on Form 10-K for the year ended December 31, 1990 and incorporated herein by reference.
10-A-6 Copy of Chrysler Corporation Stock Option Plan, as amended through December 2, 1993. Filed as Exhibit 10-A-6 to the Chrysler Corporation Annual Report on Form 10-K for the year ended December 31, 1993 and incorporated herein by reference.
10-A-7 Copy of American Motors Corporation 1980 Stock Option Plan as in effect on August 5, 1987. Filed as Exhibit 28-B to Post-Effective Amendment No. 1 on Form S-8 to Registration Statement No. 33-15544 on Form S-4 of Chrysler Corporation, and incorporated herein by reference.
10-A-8 Copy of Chrysler Corporation 1991 Stock Compensation Plan, as in effect on and after May 16, 1991 and before December 2, 1993. Filed as Exhibit 10-A-32 to the Chrysler Corporation Annual Report on Form 10-K for the year ended December 31, 1991, and incorporated herein by reference.
10-A-9 Copy of Chrysler Corporation 1991 Stock Compensation Plan, as amended and in effect on and after December 2, 1993 and before May 19, 1994. Filed as Exhibit 10-A-9 to the Chrysler Corporation Annual Report on Form 10-K for the year ended December 31, 1993 and incorporated herein by reference.
*10-A-10 Copy of Chrysler Corporation 1991 Stock Compensation Plan, as amended and in effect on and after May 19, 1994.
*10-B-1 Copy of Chrysler Corporation Incentive Compensation Plan, as amended and in effect on and after May 19, 1994.
*10-B-2 Copy of Chrysler Corporation Long-Term Performance Plan, as amended and in effect on and after May 19, 1994.
10-B-3 Copy of Chrysler Supplemental Executive Retirement Plan, as amended through December 20, 1993. Filed as Exhibit 10-B-3 to Chrysler Corporation Annual Report on Form 10- K for the year ended December 31, 1993 and incorporated herein by reference.
*10-B-4 Copy of Chrysler Corporation Discretionary Incentive Compensation Plan as in effect on and after December 1, 1994.
10-C-1 Copy of agreement, dated July 12, 1990, between Chrysler Corporation and Lee A. Iacocca. Filed as Exhibit 10-C-5 to Chrysler Corporation Annual Report on Form 10-K for the year ended December 31, 1990 and incorporated herein by reference.
10-C-2 Copy of agreement, dated June 22, 1992 between Chrysler Corporation and Lee A. Iacocca, amending agreement dated July 12, 1990, between Chrysler Corporation and Lee A. Iacocca. Filed as Exhibit 10-C-6 to the Chrysler Corporation Annual Report on Form 10-K for the year ended December 31, 1992 and incorporated herein by reference.
- -------------------- *Filed herewith.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued AND REPORTS ON FORM 8-K - CONTINUED
10-C-3 Copy of agreement, dated June 11, 1992, between Chrysler Corporation and Lee A. Iacocca. Filed as Exhibit 10-C-7 to the Chrysler Corporation Annual Report on Form 10-K for the year ended December 31, 1992 and incorporated herein by reference.
10-C-4 Copy of agreement, dated March 14, 1992, between Chrysler Corporation and Robert J. Eaton. Filed as Exhibit 10-C-8 to the Chrysler Corporation Annual Report on Form 10-K for the year ended December 31, 1992 and incorporated herein by reference.
10-D Conformed copy of Participation Agreement for Sale and Leaseback Financing of Chrysler Technology Center Facilities among Chrysler Corporation, Manufacturers Hanover Bank (Delaware), as Trustee, and AH Service Corporation, dated as of May 1, 1990. Filed as Exhibit 10-E-11 to Chrysler Corporation Annual Report on Form 10-K for the year ended December 31, 1990 and incorporated herein by reference.
10-E-1 Copy of Income Maintenance Agreement made December 20, 1968 among Chrysler Financial Corporation, Chrysler Corporation and Chrysler Motors Corporation (now dissolved). Filed as Exhibit 13-D to Registration Statement No. 2-32037 of Chrysler Financial Corporation, and incorporated herein by reference.
10-E-2 Copy of Agreement made April 19, 1971 among Chrysler Financial Corporation, Chrysler Corporation and Chrysler Motors Corporation (now dissolved), amending the Income Maintenance Agreement among such parties. Filed as Exhibit 13-B to Registration Statement No. 2-40110 of Chrysler Financial Corporation and Chrysler Corporation, and incorporated herein by reference.
10-E-3 Copy of Agreement made May 29, 1973 among Chrysler Financial Corporation, Chrysler Corporation and Chrysler Motors Corporation (now dissolved), further amending the Income Maintenance Agreement among such parties. Filed as Exhibit 5-C to Registration Statement No. 2-49615 of Chrysler Financial Corporation, and incorporated herein by reference.
10-E-4 Copy of Agreement made as of July 1, 1975 among Chrysler Financial Corporation, Chrysler Corporation and Chrysler Motors Corporation (now dissolved), further amending the Income Maintenance Agreement among such parties. Filed as Exhibit D to the Annual Report of Chrysler Financial Corporation on Form 10-K for the year ended December 31, 1975, and incorporated herein by reference.
10-E-5 Copy of Agreement made June 4, 1976 between Chrysler Financial Corporation and Chrysler Corporation further amending the Income Maintenance Agreement between such parties. Filed as Exhibit 5-H to Registration Statement No. 2-56398 of Chrysler Financial Corporation, and incorporated herein by reference.
10-E-6 Copy of Agreement made March 27, 1986 between Chrysler Financial Corporation, Chrysler Holding Corporation (now Chrysler Corporation) and Chrysler Corporation further amending the Income Maintenance Agreement among such parties. Filed as Exhibit 10-F to the Annual Report of Chrysler Financial Corporation on Form 10-K for the year ended December 31, 1986, and incorporated herein by reference.
10-G-1 Copy of Revolving Credit Agreement, dated as of May 23, 1994, among Chrysler Financial Corporation, Chemical Bank, as Agent, the several commercial banks party thereto as Co-Agents, and Chemical Securities Inc., as Arranger. Filed as Exhibit 10-A to the Current Report on Form 8-K of Chrysler Financial Corporation dated May 23, 1994, and incorporated herein by reference.
10-G-2 Copy of Fourth Amended and Restated Commitment Transfer Agreement, dated as of May 23, 1994, among Chrysler Financial Corporation, the several financial institutions parties thereto and Chemical Bank, as agent. Filed as Exhibit 10-B to the Current Report on Form 8-K of Chrysler Financial Corporation dated May 23, 1994, and incorporated herein by reference.
10-G-3 Copy of Guarantee Agreement, dated as of May 23, 1994, made by Chrysler Financial Corporation to and in favor of Guaranteed Parties as defined therein. Filed as Exhibit 10-C to the Current Report on Form 8-K of Chrysler Financial Corporation dated May 23, 1994, and incorporated herein by reference.
10-G-4 Copy of Revolving Credit Agreement, dated as of May 23, 1994, among Chrysler Credit Canada Ltd., Royal Bank of Canada, as agent, Canadian Imperial Bank of Commerce and Bank of Nova Scotia, as co-agents, and the Lenders partes thereto. Filed as Exhibit 10-D to the Current Report on Form 8-K of Chrysler Financial Corporation dated May 23, 1994, and incorporated herein by reference.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued AND REPORTS ON FORM 8-K - CONTINUED
10-G-5 Copy of Short Term Receivables Purchase Agreement, dated as of May 23, 1994, among Chrysler Financial Corporation, Chrysler Credit Corporation, U.S. Auto Receivables Company, American Auto Receivables Company, Chemical Bank, as agent, the several commercial banks parties thereto, and Chemical Bank Agency Services Corporation, as Administrative Agent. Filed as Exhibit 10-E to the Current Report on Form 8-K of Chrysler Financial Corporation dated May 23, 1994, and incorporated herein by reference.
10-G-6 Copy of Short Term Participation and Servicing Agreement, dated as of May 23, 1994, among American Auto Receivables Company, Chrysler Credit Corporation, the banks and other financial institutions named as purchasers therein, Chemical Bank, as Agent, and Chemical Bank Agency Services Corporation, as Administrative Agent. Filed as Exhibit 10-F to the Current Report on Form 8-K of Chrysler Financial Corporation dated May 23, 19984, and incorporated herein by reference.
10-G-7 Copy of Short Term Bank Supplement, dated as of May 23, 1994, among U.S. Auto Receivables Company, Chrysler Credit Corporation and Manufacturers and Traders Trust Company, as Trustee, to the Pooling and Servicing Agreement dated as of May 31, 1991 with respect to CARCO Auto Loan Master Trust Short Term Bank Series. Filed as Exhibit 10-G to the Current Report on Form 8-K of Chrysler Financial Corporation dated May 23, 1994, and incorporated herein by reference.
10-G-8 Copy of Long Term Receivables Purchase Agreement, dated as of May 23, 1994, among Chrysler Financial Corporation, Chrysler Credit Corporation, U.S. Auto Receivables Company, American Auto Receivables Company, the several commercial banks parties thereto, Chemical Bank, as Agent, and Chemical Bank Agency Services Corporation, as Administrative Agent. Filed as Exhibit 10-H to the Current Report on Form 8-K of Chrysler Financial Corporation dated May 23, 1994, and incorporated herein by reference.
10-G-9 Copy of Long Term Participation and Servicing Agreement, dated as of May 23, 1994, among American Auto Receivables Company, Chrysler Credit Corporation, the banks and other financial institutions named as purchasers therein, Chemical Bank, as Agent, and Chemical Bank Agency Services Corporation, as Administrative Agent. Filed as Exhibit 10-I to the Current Report on Form 8-K of Chrysler Financial Corporation dated May 23, 1994, and incorporated herein by reference.
10-G-10 Copy of Long Term Bank Supplement, dated as of May 23, 1994, among U.S. Auto Receivables Company, Chrysler Credit Corporation and Manufacturers and Traders Trust Company, as Trustee, to the Pooling and Servicing Agreement dated as of May 31, 1991 with respect to CARCO Auto Loan Master Trust Bank Series. Filed as Exhibit 10-J to the Current Report on Form 8-K of Chrysler Financial Corporation dated May 23, 1994, and incorporated herein by reference.
10-G-11 Copy of Short Term Receivables Purchase Agreement, dated May 23, 1994, among Chrysler Financial Corporation, Chrysler Credit Canada Ltd., the chartered banks named therein as purchasers, and Royal Bank of Canada, as Agent. Filed as Exhibit 10-K to the Current Report on Form 8-K of Chrysler Financial Corporation dated May 23, 1994, and incorporated herein by reference.
10-G-12 Copy of Short Term Retail Purchase and Servicing Agreement, dated May 23, 1994, among Chrysler Credit Canada Ltd., the chartered banks named therein as parties thereto, and Royal Bank of Canada, as Agent. Filed as Exhibit 10-L to the Current Report on Form 8-K of Chrysler Financial Corporation dated May 23, 1994, and incorporated herein by reference.
10-G-13 Copy of Long Term Receivables Purchase Agreement, dated May 23, 1994, among Chrysler Financial Corporation, Chrysler Credit Canada Ltd., the chartered banks named therein as purchasers, and Royal Bank of Canada, as Agent. Filed as Exhibit 10-M to the Current Report on Form 8-K of Chrysler Financial Corporation dated May 23, 1994, and incorporated herein by reference.
10-G-14 Copy of Long Term Retail Purchase and Servicing Agreement, dated May 23, 1994, among Chrysler Credit Canada Ltd., the chartered banks named therein as parties thereto, and Royal Bank of Canada, as Agent. Filed as Exhibit 10-N to the Current Report on Form 8-K of Chrysler Financial Corporation dated May 23, 1994, and incorporated herein by reference.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued AND REPORTS ON FORM 8-K - CONTINUED
10-G-15 Copy of Bank Series 1994-1 Supplement, dated as of May 23, 1994, among Chrysler Credit Canada Ltd., Royal Bank of Canada, as Agent, the several banks parties thereto, and The Royal Trust Company, as Custodian, to the Master Custodial and Servicing Agreement, dated as of September 1, 1992. Filed as Exhibit 10-O to the Current Report on Form 8-K of Chrysler Financial Corporation dated May 23, 1994, and incorporated herein by reference.
10-G-16 Copy of Bank Series 1994-2 Supplement, dated as of May 23, 1994, among Chrysler Credit Canada Ltd., Royal Bank of Canada, as Agent, the several banks parties thereto, and The Royal Trust Company, as Custodian, to the Master Custodial and Servicing Agreement, dated as of September 1, 1992. Filed as Exhibit 10-P to the Current Report on Form 8-K of Chrysler Financial Corporation dated May 23, 1994, and incorporated herein by reference.
10-H-1 Copy of Securitization Closing Agreement, dated as of February 1, 1993, among Chrysler Financial Corporation, certain Sellers, certain Purchasers, and certain Purchaser Parties. Filed as Exhibit 2-E to the Current Report of Chrysler Financial Corporation on Form 8-K dated February 1, 1993, and incorporated herein by reference.
10-H-2 Copy of First Amendment to Business Asset Purchase Agreement dated as of January 29, 1993, among NationsBank Financial Services Corporation, the other Purchasers parties thereto and the Sellers parties thereto and Chrysler Financial Corporation. Filed as Exhibit 2-D to the Current Report of Chrysler Financial Corporation on Form 8-K dated February 1, 1993, and incorporated herein by reference.
10-I Copy of Asset Purchase Agreement, dated as of February 1, 1993, among Chrysler Rail Transportation Corporation, Chrysler Capital Transportation Services, Inc. and United States Rail Services, a division of United States Leasing International, Inc. Filed as Exhibit 10-IIIIII to the Annual Report of Chrysler Financial Corporation on Form 10-K for the year ended December 31, 1992, and incorporated herein by reference.
10-J-1 Copy of Amended and Restated Trust Agreement, dated as of April 1, 1993, among Premier Auto Receivables Company, Chrysler Financial Corporation and Chemical Bank Delaware, as Owner Trustee, with respect to Premier Auto Trust 1993-2. Filed as Exhibit 4.1 to the Quarterly Report of Premier Auto Trust 1993-2 on Form 10-Q for the quarter ended June 30, 1993, and incorporated herein by reference.
10-J-2 Copy of Indenture, dated as of April 1, 1993, between Premier Auto Trust 1993-2 and Bankers Trust Company, as Indenture Trustee, with respect to Premier Auto Trust 1993-2. Filed as Exhibit 4.2 of the Quarterly Report of Premier Auto Trust 1993-2 on Form 10-Q for the quarter ended June 30, 1993, and incorporated herein by reference.
10-K-1 Copy of Amended and Restated Trust Agreement, dated as of June 1, 1993, among Premier Auto Receivables Company, Chrysler Financial Corporation and Chemical Bank Delaware, as Owner Trustee, with respect to Premier Auto Trust 1993-3. Filed as Exhibit 4.1 to the Quarterly Report of Premier Auto Trust 1993-3 on Form 10-Q for the quarter ended June 30, 1993, and incorporated herein by reference.
10-K-2 Copy of Indenture, dated as of June 1, 1993, between Premier Auto Trust 1993-3 and Bankers Trust Company, as Indenture Trustee. Filed as Exhibit 4.2 to the Quarterly Report of Premier Auto Trust 1993-3 on Form 10-Q for the quarter ended June 30, 1993, and incorporated herein by reference.
10-L Copy of Series 1993-1 Supplement, dated as of February 1, 1993, among U.S. Auto Receivables Company, as Seller, Chrysler Credit Corporation, as Servicer, and Manufacturers and Traders Trust Company, as Trustee, with respect to CARCO Auto Loan Master Trust. Filed as Exhibit 3 to the Trust's Registration Statement on Form 8-A dated March 15, 1993, and incorporated herein by reference.
10-M Copy of Receivables Purchase Agreement, made as of April 7, 1993, among Chrysler Credit Canada Ltd., Chrysler Financial Corporation and Association Assets Acquisition Inc., with respect to CARS 1993-1. Filed as Exhibit 10- OOOO to the Quarterly Report on Form 10-Q of Chrysler Financial Corporation for the quarter ended September 30, 1993, and incorporated herein by reference.
10-N Copy of Receivables Purchase Agreement, made as of June 29, 1993, among Chrysler Credit Canada Ltd., Chrysler Financial Corporation and Associated Assets Acquisition Inc., with respect to CARS 1993-2. Filed as Exhibit 10- PPPP to the Quarterly Report on Form 10-Q of Chrysler Financial Corporation for the quarter ended September 30, 1993, and incorporated herein by reference.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued AND REPORTS ON FORM 8-K - CONTINUED
10-O-1 Copy of Pooling and Servicing Agreement, dated as of August 1, 1993, among Auto Receivables Corporation, Chrysler Credit Canada Ltd., Montreal Trust Company of Canada and Chrysler Financial Corporation, with respect to CARCO 1993-1. Filed as Exhibit 10-QQQQ to the Quarterly Report on Form 10-Q of Chrysler Financial Corporation for the quarter ended September 30, 1993, and incorporated herein by reference.
10-O-2 Copy of Standard Terms and Conditions of Agreement, dated as of August 1, 1993, among Auto Receivables Corporation, Chrysler Credit Canada Ltd. and Chrysler Financial Corporation, with respect to CARCO 1993-1. Filed as Exhibit 10-RRRR to the Quarterly Report on Form 10-Q of Chrysler Financial Corporation for the quarter ended September 30, 1993, and incorporated herein by reference.
10-O-3 Copy of Purchase Agreement, dated as of August 1, 1993, between Chrysler Credit Canada Ltd., and Auto Receivables Corporation, with respect to CARCO 1993-1. Filed as Exhibit 10-SSSS to the Quarterly Report on Form 10-Q of Chrysler Financial Corporation for the quarter ended September 30, 1993, and incorporated herein by reference.
10-P Copy of Lease Receivables Purchase Agreement, dated September 3, 1993, among CXC Incorporated, Chrysler Systems Inc., and Chrysler Financial Corporation. Filed as Exhibit 10-UUUU to the Quarterly Report on Form 10-Q of Chrysler Financial Corporation for the quarter ended September 30, 1993, and incorporated herein by reference.
10-Q Copy of Lease Receivables Purchase Agreement, dated September 22, 1993, among the CIT Group/Equipment Financing, Inc., Chrysler Systems Inc., and Chrysler Financial Corporation. Filed as Exhibit 10-VVVV to the Quarterly Report on Form 10-Q of Chrysler Financial Corporation for the quarter ended September 30, 1993, and incorporated herein by reference.
10-R Copy of Asset Purchase Agreement, dated as of July 31, 1993, between Chrysler Rail Transportation Corporation and General Electric Railcar Leasing Services Corporation. Filed as Exhibit 10-WWWW to the Quarterly Report on Form 10-Q of Chrysler Financial Corporation for the quarter ended September 30, 1993, and incorporated herein by reference.
10-S Copy of Amended and Restated Loan Agreement, dated as of June 1, 1993, between Chrysler Realty Corporation and Chrysler Credit Corporation. Filed as Exhibit 10-XXXX to the Quarterly Report on Form 10-Q of Chrysler Financial Corporation for the quarter ended September 30, 1993, and incorporated herein by reference.
10-T Copy of Loan Agreement, dated as of March 31, 1993, between Manatee Leasing, Inc. and Chrysler Credit Corporation. Filed as Exhibit 10-YYYY to the Quarterly Report on Form 10-Q of Chrysler Financial Corporation for the quarter ended September 30, 1993, and incorporated herein by reference.
10-U Copy of Origination and Servicing Agreement, dated as of June 4, 1993, among Chrysler Leaserve, Inc., General Electric Capital Auto Lease, Inc., Chrysler Credit Corporation and Chrysler Financial Corporation. Filed as Exhibit 10-ZZZZ to the Quarterly Report on Form 10-Q of Chrysler Financial Corporation for the quarter ended September 30, 1993, and incorporated herein by reference.
10-V-1 Copy of Amended and Restated Trust Agreement, dated as of September 1, 1993, among Premier Auto Receivables Company, Chrysler Financial Corporation and Chemical Bank Delaware, as Trustee, with respect to Premier Auto Trust 1993-5. Filed as Exhibit 4.1 to the Quarterly Report of Premier Auto Trust 1993-5 on Form 10-Q for the quarter ended September 30, 1993, and incorporated herein by reference.
10-V-2 Copy of Indenture, dated as of September 1, 1993, between Premier Auto Trust 1993-5 and Bankers Trust Company, as Indenture Trustee, with respect to Premier Auto Trust 1993-5. Filed as Exhibit 4.2 to the Quarterly Report of Premier Auto Trust 1993-5 on Form 10-Q for the quarter ended September 30, 1993, and incorporated herein by reference.
10-W Copy of Asset Purchase Agreement, dated as of October 29, 1993, between Marine Asset Management Corporation and Trico Marine Assets, Inc. Filed as Exhibit 10-CCCCC to the Quarterly Report on Form 10-Q of Chrysler Financial Corporation for the quarter ended September 30, 1993, and incorporated herein by reference.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued AND REPORTS ON FORM 8-K - CONTINUED
10-X Copy of Asset Purchase Agreement, dated as of December 3, 1993, between Chrysler Rail Transportation Corporation and Allied Railcar Company. Filed as Exhibit 10-OOOO to the Annual Report on Form 10-K of Chrysler Financial Corporation for the year ended December 31, 1993, and incorporated herein by reference.
10-Y Copy of Secured Loan Purchase Agreement, dated as of December 15, 1993, among Chrysler Credit Canada Ltd., Leaf Trust and Chrysler Financial Corporation. Filed as Exhibit 10-PPPP to the Annual Report on Form 10-K of Chrysler Financial Corporation for the year ended December 31, 1993, and incorporated herein by reference.
10-Z Copy of Series 1993-2 Supplement, dated as of November 1, 1993, among U.S. Auto Receivables Company, as Seller, Chrysler Credit Corporation, as Servicer, and Manufacturers and Traders Trust Company, as Trustee, with respect to CARCO Auto Loan Master Trust. Filed as Exhibit 3 to the Registration Statement on Form 8-A of CARCO Auto Loan Master Trust dated December 6, 1993, and incorporated herein by reference.
10-AA-1 Copy of Amended and Restated Trust Agreement, dated as of November 1, 1993, among Premier Auto Receivables Company, Chrysler Financial Corporation and Chemical Bank Delaware, as Owner Trustee, with respect to Premier Auto Trust 1993-6. Filed as Exhibit 4-A to the Annual Report on Form 10-K of Premier Auto Trust 1993-6 for the year ended December 31, 1993, and incorporated herein by reference.
10-AA-2 Copy of Indenture, dated as of November 1, 1993, between Premier Auto Trust 1993-6 and The Fuji Bank and Trust Company, as Indenture Trustee, with respect to Premier Auto Trust 1993- 6. Filed as Exhibit 4-B to the Annual Report on Form 10-K of Premier Auto Trust 1993-6 for the year ended December 31, 1993, and incorporated herein by reference.
10-BB Copy of Secured Loan Purchase Agreement, dated as of March 29, 1994, among Chrysler Credit Canada Ltd., Leaf Trust and Chrysler Financial Corporation. Filed as Exhibit 10-ZZZ to the Quarterly Report of Chrysler Financial Corporation on Form 10-Q for the quarter ended March 31, 1994, and incorporated herein by reference.
10-CC-1 Copy of Amended and Restated Trust Agreement, dated as of February 1, 1994, among Premier Auto Receivables Company, Chrysler Financial Corporation and Chemical Bank Delaware, as Owner Trustee, with respect to Premier Auto Trust 1994-1. Filed as Exhibit 4.1 to the Quarterly Report on Form 10-Q of Premier Auto Trust 1994-1 for the quarter ended March 31, 1994, and incorporated herein by reference.
10-CC-2 Copy of Indenture, dated as of February 1, 1994, between Premier Auto Trust 1994-1 and The Fuji Bank and Trust Company, as Indenture Trustee, with respect to Premier Auto Trust 1994-1. Filed as Exhibit 4.2 to the Quarterly Report on Form 10-Q of Premier Auto Trust 1994-1 for the quarter ended March 31, 1994, and incorporated herein by reference.
10-DD Copy of Secured Loan Purchase Agreement, dated as of July 6, 1994, among Chrysler Credit Canada Ltd., Leaf Trust and Chrysler Financial Corporation. Filed as Exhibit 10-BBBB to the Quarterly Report on Form 10-Q of Chrysler Financial Corporation for the quarter ended June 30, 1994, and incorporated herein by reference.
10-EE-1 Copy of Amended and Restated Trust Agreement, dated as of May 1, 1994, among Premier Auto Receivables Company, Chrysler Financial Corporation and Chemical Bank, Delaware, as Owner Trustee, with respect to Premier Auto Trust 1994-2. Filed as Exhibit 4.1 to the Quarterly Report on Form 10-Q of Premier Auto Trust 1994-2 for the Quarter ended June 30, 1994, and incorporated herein by reference.
10-EE-2 Copy of Indenture, dated as of May 1, 1994, between Premier Auto Trust 1994-2 and The Fuji Bank and Trust Company, as Indenture Trustee, with respect to Premier Auto Trust 1994-2. Filed as Exhibit 4.2 to the Quarterly Report on Form 10-Q of Premier Auto Trust 1994-2 for the quarter ended June 30, 1994, and incorporated herein by reference.
10-FF-1 Copy of Amended and Restated Trust Agreement, dated as of June 1, 1994, among Premier Auto Receivables Company, Chrysler Financial Corporation and Chemical Bank, Delaware, with respect to Premier Auto Trust 1994-3. Filed as Exhibit 4.1 to the Quarterly Report on Form 10-Q of Premier Auto Trust 1994-3 for the quarter ended June 30, 1994, and incorporated herein by reference.
10-FF-2 Copy of Indenture, dated as of June 1, 1994, between Premier Auto Trust 1994-3 and The Fuji Bank and Trust Company, as Indenture Trustee, with respect to Premier Auto Trust 1994-3. Filed as Exhibit 4.2 to the Quarterly Report on Form 10-Q of Premier Auto Trust 1994-3 for the quarter ended June 30, 1994, and incorporated herein by reference.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued AND REPORTS ON FORM 8-K - CONTINUED
10-GG-1 Copy of Master Receivables Purchase Agreement among Chrysler Credit Canada Ltd., CORE Trust and Chrysler Financial Corporation, dated as of November 29, 1994. Filed as Exhibit 10-FFF to the Annual Report of Chrysler Financial Corporation on Form 10-K for the year ended December 31, 1994, and incorporated herein by reference.
10-GG-2 Copy of Terms Schedule among Chrysler Credit Canada Ltd., CORE Trust and Chrysler Financial Corporation dated as of December 2, 1994, with respect to the sale of retail automotive receivables to CORE Trust. Filed as Exhibit 10-GGG to the Annual Report of Chrysler Financial Corporation on Form 10-K for the year ended December 31, 1994, and incorporated herein by reference.
10-HH Copy of Terms Schedule among Chrysler Credit Canada Ltd., CORE Trust and Chrysler Financial Corporation dated as of December 22, 1994, with respect to the sale of retail automotive receivables to CORE Trust. Filed as Exhibit 10-HHH to the Annual Report of Chrysler Financial Corporation on Form 10-K for the year ended December 31, 1994, and incorporated herein by reference.
10-II Copy of Asset Purchase Agreement dated as of December 14, 1994, between Chrysler Capital Income Partners, L.P. and First Union Commercial Corporation. Filed as Exhibit 10-III to the Annual Report of Chrysler Financial Corporation on Form 10-K for the year ended December 31, 1994, and incorporated herein by reference.
10-JJ Copy of Receivables Purchase Agreement, dated as of December 15, 1994, among Chrysler Financial Corporation, Premier Auto Receivables Company and ABN AMRO Bank, N.V., as Agent with respect to the sale of retail automotive receivables to Windmill Funding Corporation. Filed as Exhibit 10-JJJ to the Annual Report of Chrysler Financial Corporation on Form 10-K for the year ended December 31, 1994, and incorporated herein by reference.
10-KK Copy of Pooling and Servicing Agreement, dated as of August 1, 1990, among Chrysler Auto Receivables Company, as Seller, Chrysler Credit Corporation, as Servicer, and The Fuji Bank and Trust Company, as Trustee, with respect to CARCO DEALRs Wholesale Trust 1990-A. Filed as Exhibit 10-HHH to the Annual Report of Chrysler Financial Corporation on Form 10-K for the year ended December 31, 1990, and incorporated herein by reference.
10-LL Copy of Amendment, dated as of September 23, 1991, to the Pooling and Servicing Agreement, dated August 1, 1990, among Chrysler Auto Receivables Company, as Seller, Chrysler Credit Corporation, as Servicer, and The Fuji Bank and Trust Company, as Trustee, with respect to CARCO DEALRs Wholesale Trust 1990-A. Filed as Exhibit 10-NN to the Annual Report of Chrysler Financial Corporation on Form 10-K for the year ended December 31, 1991, and incorporated herein by reference.
10-MM Copy of Receivables Purchase Agreement, dated as of August 16, 1990, between Chrysler Auto Receivables Company, as Buyer, and Chrysler Credit Corporation, as Seller, with respect to CARCO DEALRs Wholesale Trust 1990-A. Filed as Exhibit 10-III to the Annual Report of Chrysler Financial Corporation on Form 10-K for the year ended December 31, 1990, and incorporated herein by reference.
10-NN Copy of Receivables Sales Agreement, dated as of August 16, 1990, between Chrysler Financial Corporation and Chrysler Credit Corporation, with respect to CARCO DEALRs Wholesale Trust 1990-A. Filed as Exhibit 10-JJJ to the Annual Report of Chrysler Financial Corporation on Form 10-K for the year ended December 31, 1990, and incorporated herein by reference.
10-OO Copy of Pooling and Servicing Agreement, dated as of October 1, 1990, among Chrysler Auto Receivables Company, as Seller, Chrysler Credit Corporation, as Servicer, and The Fuji Bank and Trust Company, as Trustee, related to Money Market Auto Loan Trust 1990-1. Filed as Exhibit 4-A to the Registration of Certain Classes of Securities Report of Money Market Auto Loan Trust 1990-1 on Form 8-A, and incorporated herein by reference.
10-PP Copy of Amendment No. 1 to the Pooling and Servicing Agreement, dated as of June 29, 1992, among Chrysler Auto Receivables Company, as Seller, Chrysler Credit Corporation, as Servicer, and The Fuji Bank and Trust Company, as Trustee, with respect to Money Market Auto Loan Trust 1990-1. Filed as Exhibit 4-B to the Quarterly Report of Money Market Auto Loan Trust 1990-1 on Form 10-Q for the quarter ended June 30, 1992, and incorporated herein by reference.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued AND REPORTS ON FORM 8-K - CONTINUED
10-QQ Copy of Pooling and Servicing Agreement, dated as of May 1, 1991, among Chrysler Auto Receivables Company, as Seller, Chrysler Credit Corporation, as Servicer, and The Fuji Bank and Trust Company, as Trustee, with respect to Select Auto Receivables Trust 1991-1. Filed as Exhibit 4-A to the Quarterly Report on Form 10-Q of Select Auto Receivables Trust 1991-1 for the quarter ended September 30, 1991, and incorporated herein by reference.
10-RR Copy of Standard Terms and Conditions of Agreement, dated as of May 1, 1991, between Chrysler Auto Receivables Company, as Seller, and Chrysler Credit Corporation, as Servicer, with respect to Select Auto Receivables Trust 1991-1. Filed as Exhibit 4-B to the Quarterly Report on Form 10-Q of Select Auto Receivables Trust 1991-1 for the quarter ended September 30, 1991, and incorporated herein by reference.
10-SS Copy of Purchase Agreement, dated as of May 1, 1991, between Chrysler Financial Corporation and Chrysler Auto Receivables Company with respect to Select Auto Receivables Trust 1991-1. Filed as Exhibit 4-C to the Quarterly Report on Form 10-Q of Select Auto Receivables Trust 1991-1 for the quarter ended September 30, 1991, and incorporated herein by reference.
10-TT Copy of Pooling and Servicing Agreement, dated as of May 31, 1991, among Chrysler Auto Receivables Company, as Seller, Chrysler Credit Corporation, as Servicer, and Manufacturers and Traders Trust Company, as Trustee, with respect to CARCO Auto Loan Master Trust. Filed as Exhibit 2 to the CARCO Auto Loan Master Trust Registration Statement on Form 8-A, and incorporated herein by reference.
10-UU Copy of Pooling and Servicing Agreement, dated as of July 1, 1991, among Chrysler Auto Receivables Company, as Seller, Chrysler Credit Corporation, as Servicer, and The Fuji Bank and Trust Company, as Trustee, with respect to Select Auto Receivables Trust 1991-2. Filed as Exhibit 4-A to the Quarterly Report on Form 10-Q of Select Auto Receivables Trust 1991-2 for the quarter ended September 30, 1991, and incorporated herein by reference.
10-VV Copy of Standard Terms and Conditions of Agreement, dated as of July 1, 1991, between Chrysler Auto Receivables Company, as Seller, and Chrysler Credit Corporation, as Servicer, with respect to Select Auto Receivables Trust 1991-2. Filed as Exhibit 4-B to the Quarterly Report on Form 10-Q of Select Auto Receivables Trust 1991-2 for the quarter ended September 30, 1991 and incorporated herein by reference.
10-WW Copy of Purchase Agreement, dated as of July 1, 1991, between Chrysler Financial Corporation and Chrysler Auto Receivables Company with respect to Select Auto Receivables Trust 1991-2. Filed as Exhibit 4-C to the Quarterly Report on Form 10-Q of Select Auto Receivables Trust 1991-2 for the quarter ended September 30, 1991, and incorporated herein by reference.
10-XX Copy of Pooling and Servicing Agreement, dated as of September 1, 1991, among Chrysler Auto Receivables Company, as Seller, Chrysler Credit Corporation, as Servicer, and The Fuji Bank and Trust Company, as Trustee, with respect to Select Auto Receivables Trust 1991-3. Filed as Exhibit 4-A to the Quarterly Report on Form 10-Q of Select Auto Receivables Trust 1991-2 for the quarter ended September 30, 1991, and incorporated herein by reference.
10-YY Copy of Standard Terms and Conditions of Agreement, dated as of September 1, 1991, between Chrysler Auto Receivables Company, as Seller, and Chrysler Credit Corporation, as Servicer, with respect to Select Auto Receivables Trust 1991-3. Filed as Exhibit 4-B to the Quarterly Report on Form 10-Q of Select Auto Receivables Trust 1991-3 for the quarter ended September 30, 1991, and incorporated herein by reference.
10-ZZ Copy of Purchase Agreement, dated as of September 1, 1991, between Chrysler Financial Corporation and Chrysler Auto Receivables Company with respect to Select Auto Receivables Trust 1991-3. Filed as Exhibit 4-C to the Quarterly Report on Form 10-Q of Select Auto Receivables Trust 1991-3 for the quarter ended September 30, 1991, and incorporated herein by reference.
10-AAA Copy of Pooling and Servicing Agreement, dated as of November 1, 1991, among Chrysler Auto Receivables Company, as Seller, Chrysler Credit Corporation, as Servicer, and The Fuji Bank and Trust Company, as Trustee, with respect to Select Auto Receivables Trust 1991-5. Filed as Exhibit 4-A to the Annual Report on Form 10-K of Select Auto Receivables Trust 1991-5 for the year ended December 31, 1991, and incorporated herein by reference.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued AND REPORTS ON FORM 8-K - CONTINUED
10-BBB Copy of Standard Terms and Conditions of Agreement, dated as of November 1, 1991, between Chrysler Auto Receivables Company, as Seller, and Chrysler Credit Corporation, as Servicer, with respect to Select Auto Receivables Trust 1991-5. Filed as Exhibit 4-B to the Annual Report on Form 10-K of Select Auto Receivables Trust 1991-5 for the year ended December 31, 1991, and incorporated herein by reference.
10-CCC Copy of Purchase Agreement, dated as of November 1, 1991, between Chrysler Financial Corporation and Chrysler Auto Receivables Company with respect to Select Auto Receivables Trust 1991-5. Filed as Exhibit 4-C to the Annual Report on Form 10-K of Select Auto Receivables Trust 1991-5 for the year ended December 31, 1991, and incorporated herein by reference.
10-DDD Copy of Pooling and Servicing Agreement, dated as of December 1, 1991, among U.S. Auto Receivables Company, as Seller, Chrysler Credit Corporation, as Servicer, and LaSalle National Bank, as Trustee, with respect to CFC-15 Grantor Trust. Filed as Exhibit 10-PPPP to the Annual Report of Chrysler Financial Corporation on Form 10-K for the year ended December 31, 1991, and incorporated herein by reference.
10-EEE Copy of Pooling and Servicing Agreement, dated as of January 1, 1992, among Chrysler Auto Receivables Company, as Seller, Chrysler Credit Corporation, as Servicer, and LaSalle National Bank, as Trustee, with respect to CFC-16 Grantor Trust. Filed as Exhibit 10-QQQQ to the Annual Report of Chrysler Financial Corporation on Form 10-K for the year ended December 31, 1991, and incorporated herein by reference.
10-FFF Copy of Standard Terms and Conditions of Agreement, dated as of January 1, 1992, between Chrysler Auto Receivables Company, as Seller, and Chrysler Credit Corporation, as Servicer, with respect to CFC-16 Grantor Trust. Filed as Exhibit 10-RRRR to the Annual Report of Chrysler Financial Corporation on Form 10-K for the year ended December 31, 1991, and incorporated herein by reference.
10-GGG Copy of Purchase Agreement, dated as of January 1, 1992 between Chrysler Financial Corporation and Chrysler Auto Receivables Company with respect to CFC-16 Grantor Trust. Filed as Exhibit 10-SSSS to the Annual Report of Chrysler Financial Corporation on Form 10-K for the year ended December 31, 1991, and incorporated herein by reference.
10-HHH Copy of Sale and Servicing Agreement, dated as of January 1, 1992, among Premier Auto Trust 1992-1, as Issuer, U.S. Auto Receivables Company, as Seller, and Chrysler Credit Corporation, as Servicer, with respect to Premier Auto Trust 1992-1. Filed as Exhibit 10-QQQQ to the Registration Statement of Chrysler Financial Corporation, on Form S-2 (Registration Statement No. 33-51302) on November 24, 1992, and incorporated herein by reference.
10-III Copy of Trust Agreement, dated as of January 1, 1992, between U.S. Auto Receivables Company and Chemical Bank Delaware, as Owner Trustee, with respect to Premier Auto Trust 1992-1. Filed as Exhibit 10-RRRR to the Registration Statement of Chrysler Financial Corporation on Form S-2 (Registration Statement No. 33-51302) on November 24, 1992, and incorporated herein by reference.
10-JJJ Copy of Purchase Agreement, dated as of January 1, 1992, between Chrysler Financial Corporation, as Seller, and U.S. Auto Receivables Company, as Purchaser, with respect to Premier Auto Trust 1992-1. Filed as Exhibit 10-SSSS to the Registration Statement of Chrysler Financial Corporation on Form S-2 (Registration Statement No. 33-51302) on November 24, 1992, and incorporated herein by reference.
10-KKK Copy of Pooling and Servicing Agreement, dated as of January 1, 1992, among Chrysler Financial Corporation, as Master Servicer, Chrysler First Business Credit Corporation, as Seller, and Security Pacific National Bank, as Trustee, with respect to U.S. Business Equity Loan Trust 1992-1. Filed as Exhibit 4-A to the Quarterly Report on Form 10-Q of U.S. Business Equity Loan Trust 1992-1 for the quarter ended March 31, 1992, and incorporated herein by reference.
10-LLL Copy of First Amendment, dated as of November 8, 1991, to the Series 1991-3 Supplement, dated as of June 30, 1991, among Chrysler Credit Corporation, as Servicer, U.S. Auto Receivables Company, as Seller, and Manufacturers and Traders Trust Company, as Trustee, with respect to CARCO Auto Loan Master Trust. Filed as Exhibit 4-H to the Quarterly Report on Form 10-Q of CARCO Auto Loan Master Trust for the quarter ended March 31, 1992, and incorporated herein by reference.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued AND REPORTS ON FORM 8-K - CONTINUED
10-MMM Copy of Indenture, dated as of March 1, 1992, between Premier Auto Trust 1992-2 and Bankers Trust Company, with respect to Premier Auto Trust 1992-2 Asset Backed Notes. Filed as Exhibit 4-A to the Quarterly Report on Form 10-Q of Premier Auto Trust 1992-2 for the quarter ended March 31, 1992, and incorporated herein by reference.
10-NNN Copy of a 6-3/8% Asset Backed Note with respect to Premier Auto Trust 1992-2 Asset Backed Notes. Filed as Exhibit 4-B to the Quarterly Report on Form 10-Q of Premier Auto Trust 1992-2 for the quarter ended March 31, 1992, and incorporated herein by reference.
10-OOO Copy of Trust Agreement, dated as of March 1, 1992, between U.S. Auto Receivables Company and Manufacturers Hanover Bank (Delaware) with respect to Premier Auto Trust 1992-2 Asset Backed Certificates. Filed as Exhibit 4-C to the Quarterly Report on Form 10-Q of Premier Auto Trust 1992-2 for the quarter ended March 31, 1992, and incorporated herein by reference.
10-PPP Copy of Indenture, dated as of May 1, 1992, between Premier Auto Trust 1992-3 and Bankers Trust Company with respect to Premier Auto Trust 1992-3. Filed as Exhibit 4-A to the Quarterly Report on Form 10-Q of Premier Auto Trust 1992-3 for the quarter ended June 30, 1992, and incorporated herein by reference.
10-QQQ Copy of a 5.90% Asset Backed Note with respect to Premier Auto Trust 1992-3. Filed as Exhibit 4-B to the Quarterly Report on Form 10-Q of Premier Auto Trust 1992-3 for the quarter ended June 30, 1992, and incorporated herein by reference.
10-RRR Copy of Trust Agreement, dated as of April 1, 1992, as amended and restated as of May 1, 1992, between Premier Auto Receivables Company and Manufacturers Hanover Bank (Delaware) with respect to Premier Auto Trust 1992-3. Filed as Exhibit 4-C to the Quarterly Report on Form 10-Q of Premier Auto Trust 1992-3 for the quarter ended June 30, 1992, and incorporated herein by reference.
10-SSS Copy of Receivables Purchase Agreement, dated as of April 15, 1992, between Chrysler Credit Canada Ltd., Chrysler Financial Corporation and Associated Assets Acquisition Inc. with respect to Canadian Auto Receivables Securitization 1992-1. Filed as Exhibit 10-IIIII to the Registration Statement on Form S-2 of Chrysler Financial Corporation (Registration Statement No. 33- 51302) on November 24, 1992, and incorporated herein by reference.
10-TTT Copy of Indenture, dated as of July 1, 1992, between Premier Auto Trust 1992-4 and Bankers Trust Company with respect to Premier Auto Trust 1992-4. Filed as Exhibit 4-A to the Quarterly Report on Form 10-Q of Premier Auto Trust 1992-4 for the quarter ended September 30, 1992, and incorporated herein by reference.
10-UUU Copy of 5.05% Asset Backed Note with respect to Premier Auto Trust 1992-4. Filed as Exhibit 4-B to the Quarterly Report on Form 10-Q of Premier Auto Trust 1992-4 for the quarter ended September 30, 1992, and incorporated herein by reference.
10-VVV Copy of Trust Agreement, dated as of July 1, 1992, between Premier Auto Receivables Company and Chemical Bank Delaware, with respect to Premier Auto Trust 1992-4. Filed as Exhibit 4- C to the Quarterly Report on Form 10-Q of Premier Auto Trust 1992-4 for the quarter ended September 30, 1992, and incorporated herein by reference.
10-WWW Copy of Receivables Purchase Agreement, dated as of August 18, 1992, between Chrysler Credit Ltd., Chrysler Financial Corporation and Associated Assets Acquisition Inc. with respect to Canadian Auto Receivables Securitization 1992-2. Filed as Exhibit 10-OOOOO to the Registration Statement on Form S-2 of Chrysler Financial Corporation (Registration Statement No. 33- 51302) on November 24, 1992, and incorporated herein by reference.
10-XXX Copy of Indenture, dated as of September 1, 1992, between Premier Auto Trust 1992-5 and Bankers Trust Company with respect to Premier Auto Trust 1992-5. Filed as Exhibit 4-A to the Quarterly Report on Form 10-Q of Premier Auto Trust 1992-5 for the quarter ended September 30, 1992, and incorporated herein by reference.
10-YYY Copy of a 4.55% Asset Backed Note with respect to Premier Auto Trust 1992-5. Filed as Exhibit 4-B to the Quarterly Report on Form 10-Q of Premier Auto Trust 1992-5 for the quarter ended September 30, 1992, and incorporated herein by reference.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued AND REPORTS ON FORM 8-K - CONTINUED
10-ZZZ Copy of Trust Agreement, dated as of September 1, 1992, between Premier Auto Receivables Company and Manufacturers Hanover Bank (Delaware) with respect to Premier Auto Trust 1992-5. Filed as Exhibit 4-C to the Quarterly Report on Form 10-Q of Premier Auto Trust 1992-5 for the quarter ended September 30, 1992, and incorporated herein by reference.
10-AAAA Copy of Series 1992-2 Supplement to the Pooling and Servicing Agreement, dated as of October 1, 1992, among U.S. Auto Receivables Company, as Seller, Chrysler Credit Corporation, as Servicer, and Manufacturers and Traders Trust Company, as Trustee, with respect to CARCO Auto Loan Master Trust, Series 1992-2. Filed as Exhibit 3 to Form 8-A of CARCO Auto Loan Master Trust on October 30, 1992, and incorporated herein by reference.
10-BBBB Copy of Master Custodial and Servicing Agreement, dated as of September 1, 1992 between Chrysler Credit Canada Ltd. and The Royal Trust Company, as Custodian. Filed as Exhibit 10-TTTTT to the Registration Statement on Form S-2 of Chrysler Financial Corporation (Registration Statement No. 33-51302) on November 24, 1992, and incorporated herein by reference.
10-CCCC Copy of Trust Indenture, dated as of September 1, 1992, among Canadian Dealer Receivables Corporation and Montreal Trust Company of Canada, as Trustee. Filed as Exhibit 10-UUUUU to the Registration Statement on Form S-2 of Chrysler Financial Corporation (Registration Statement No. 33-51302) on November 24, 1992, and incorporated herein by reference.
10-DDDD Copy of Servicing Agreement, dated as of October 20, 1992, between Chrysler Leaserve, Inc. (a subsidiary of General Electric Capital Auto Lease, Inc.) and Chrysler Credit Corporation, with respect to the sale of Gold Key Leases. Filed as Exhibit 10-YYYYY to the Registration Statement on Form S-2 of Chrysler Financial Corporation (Registration Statement No. 33-51302) on November 24, 1992, and incorporated herein by reference.
10-EEEE Copy of First Amendment dated as of August 24, 1992 to the Series 1991-1 Supplement dated as of May 31, 1991, among U.S. Auto Receivables Company ("USA"), as seller (the "Seller"), Chrysler Credit Corporation, as servicer (the "Servicer") and Manufacturers and Traders Trust Company, as trustee (the "Trustee"), to the Pooling and Servicing Agreement dated as of May 31, 1991, as assigned by Chrysler Auto Receivables Company to USA on August 8, 1991, as amended by the First Amendment dated as of August 6, 1992, among the Seller, the Servicer and the Trustee, with respect to CARCO Auto Loan Master Trust. Filed as Exhibit 4-M to the Quarterly Report on Form 10-Q of CARCO Auto Loan Master Trust for the quarter ended September 30, 1992, and incorporated herein by reference.
10-FFFF Copy of Second Amendment dated as of August 24, 1992 to the Series 1991-3 Supplement dated as of June 30, 1991, among U.S. Auto Receivables Company ("USA"), as seller (the "Seller"), Chrysler Credit Corporation, as servicer (the "Servicer") and Manufacturers and Traders Trust Company, as trustee (the "Trustee"), to the Pooling and Servicing Agreement dated as of May 31, 1991, as assigned by Chrysler Auto Receivables Company to USA on August 8, 1991, as amended by the First Amendment dated as of August 6, 1992, among the Seller, the Servicer and the Trustee, with respect to CARCO Auto Loan Master Trust. Filed as Exhibit 4-O to the Quarterly Report on Form 10-Q of CARCO Auto Loan Master Trust for the quarter ended September 30, 1992, and incorporated herein by reference.
10-GGGG Copy of Sale and Servicing Agreement, dated as of November 1, 1992, among Premier Auto Receivables Company, as Seller, Chrysler Credit Corporation, as Servicer, and Premier Auto Trust 1992-6, as Purchaser, with respect to Premier Auto Trust 1992-6. Filed as Exhibit 10-PPPPPP to the Annual Report of Chrysler Financial Corporation on Form 10-K for the year ended December 31, 1992, and incorporated herein by reference.
10-HHHH Copy of Trust Agreement, dated as of November 1, 1992, among ML Asset Backed Corporation, Premier Auto Receivables Company and Chemical Bank Delaware as Owner Trustee, with respect to Premier Auto Trust 1992-6. Filed as Exhibit 10-QQQQQQ to the Annual Report of Chrysler Financial Corporation on Form 10-K for the year ended December 31, 1992, and incorporated herein by reference.
10-IIII Copy of Sale and Servicing Agreement, dated as of January 1, 1993, among Premier Auto Receivables Company, as Seller, Chrysler Credit Corporation, as Servicer, and Premier Auto Trust 1993-1, as Purchaser, with respect to Premier Auto Trust 1993-1. Filed as Exhibit 10-RRRRRR to the Annual Report of Chrysler Financial Corporation on Form 10-K for the year ended December 31, 1992, and incorporated herein by reference.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued AND REPORTS ON FORM 8-K - CONTINUED
10-JJJJ Copy of Trust Agreement, dated as of January 1, 1993, among ML Asset Backed Corporation, Premier Auto Receivables Company and Chemical Bank Delaware, as Owner Trustee, with respect to Premier Auto Trust 1993-1. Filed as Exhibit 10-SSSSSS to the Annual Report of Chrysler Financial Corporation on Form 10-K for the year ended December 31, 1992, and incorporated herein by reference.
10-KKKK Copy of Receivables Purchase Agreement, dated as of November 25, 1992, between Chrysler Credit Canada Ltd., Chrysler Financial Corporation and Associated Assets Acquisitions Inc. with respect to Canadian Auto Receivables Securitization 1992- 3. Filed as Exhibit 10-TTTTTT to the Annual Report of Chrysler Financial Corporation on Form 10-K for the year ended December 31, 1992, and incorporated herein by reference.
10-LLLL Copy of Purchase Agreement, dated as of January 25, 1993, among Chrysler Credit Canada Ltd., Auto 1 Limited Partnership and Chrysler Financial Corporation, with respect to Auto 1 Trust. Filed as Exhibit 10-UUUUUU to the Annual Report of Chrysler Financial Corporation on Form 10-K for the year ended December 31, 1992, and incorporated herein by reference.
10-MMMM Copy of Master Lease Agreement, dated as of January 25, 1993, among Chrysler Credit Canada Ltd., Chrysler Canada Ltd. and Auto 1 Limited Partnership, with respect to Auto 1 Trust. Filed as Exhibit 10-VVVVVV to the Annual Report of Chrysler Financial Corporation on Form 10-K for the year ended December 31, 1992, and incorporated herein by reference.
10-NNNN Copy of Amended and Restated Trust Agreement, dated as of August 1, 1993, among Premier Auto Receivables Company, Chrysler Financial Corporation and Chemical Bank Delaware, as Owner Trustee, with respect to Premier Auto Trust 1993-4. Filed as Exhibit 4.1 to the Quarterly Report on Form 10-Q of Premier Auto Trust 1993-4 for the quarter ended September 30, 1993, and incorporated herein by reference.
10-OOOO Copy of Indenture, dated as of August 1, 1993, between Premier Auto Trust 1993-4 and Bankers Trust Company, as Indenture Trustee, with respect to Premier Auto Trust 1993-4. Filed as Exhibit 4.2 to the Quarterly Report on Form 10-Q of Premier Auto Trust 1993-4 for the quarter ended September 30, 1993, and incorporated herein by reference.
10-PPPP Copy of Lease Receivables Purchase Agreement, dated as of December 23, 1992, among Chrysler Systems Leasing Inc., Chrysler Financial Corporation and Sanwa Business Credit Corporation. Filed as Exhibit 10-TTTT to the Quarterly Report on Form 10-Q of Chrysler Financial Corporation for the quarter ended September 30, 1993, and incorporated herein by reference.
10-QQQQ Copy of Amended and Restated Trust Agreement, dated as of August 1, 1994, among Premier Auto Receivables Company, Chrysler Financial Corporation and Chemical Bank Delaware, as Owner Trustee, with respect to Premier Auto Trust 1994-4. Filed as Exhibit 4.1 to the Quarterly Report on Form 10-Q of Premier Auto Trust 1994-4 for the quarter ended September 30, 1994, and incorporated herein by reference.
10-RRRR Copy of Indenture, dated as of August 1, 1994, between Premier Auto Trust 1994-4 and Bankers Trust Company, as Indenture Trustee. Filed as Exhibit 4.2 to the Quarterly Report on Form 10-Q of Premier Auto Trust 1994-4 for the quarter ended September 30, 1994, and incorporated herein by reference.
*11 Statement regarding computation of earnings per common share.
*12 Statement regarding computation of ratios of earnings to fixed charges and preferred stock dividends.
*21 Subsidiaries of the Registrant. *23 Consent of Deloitte & Touche LLP, independent auditors for Chrysler Corporation.
*24 Powers of Attorney executed by officers and directors who signed this Annual Report on Form 10-K by an attorney-in-fact.
*27 Financial Data Schedule for year ended December 31, 1994.
- -------------------- *Filed herewith
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued AND REPORTS ON FORM 8-K - CONTINUED
In lieu of filing certain instruments with respect to the long-term debt of the type described in Item 601 (b)(4) of Regulation S-K with respect to the long-term debt of Chrysler Corporation and its consolidated subsidiaries, Chrysler Corporation agrees to furnish a copy of such instruments to the Securities and Exchange Commission on request.
(b) Reports on Form 8-K:
A report on Form 8-K, dated December 1, 1994, was filed during the quarter ended December 31, 1994, reporting the amendment of the Amended and Restated Rights Agreement, dated as of December 14, 1990 under Item 5 of such Form 8-K.
CONFORMED
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.
CHRYSLER CORPORATION
By R. J. Eaton ---------------------------- R. J. EATON Chairman of the Board and Chief Executive Officer February 2, 1995
Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Principal executive officers:
CONFORMED
SIGNATURES
* By R. D. Houtman ------------------------------- R. D. HOUTMAN Attorney-in-Fact February 2, 1995