UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE
- ---
ACT OF 1934 FOR THE YEAR ENDED DECEMBER 31, 1999, OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________ TO __________.
CAPITAL AUTO RECEIVABLES ASSET TRUST 1999-1 333-06039
CAPITAL AUTO RECEIVABLES ASSET TRUST 1999-2 333-06039
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(Exact name of registrant as Commission file
specified in its charter) number
A Delaware Business Trust 38-3082892
- -------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o Bankers Trust (Delaware)
1011 Centre Road, Suite 200
Wilmington, Delaware 19805
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 250-6864
--------------
Securities registered pursuant to Section 12(b) of the Act: (None)
Section 12(g) of the Act: (None).
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 of the Securities Exchange Act of 1934 during the
preceding 12 months, and (2) has been subject to such filing requirements for
the past 90 days. Yes X. No .
PART I
ITEM 1. BUSINESS
Each Capital Auto Receivables Asset Trust, (the "Trust") was formed pursuant to
a Trust Agreement, between Capital Auto Receivables, Inc. (the "Seller") and
Bankers Trust (Delaware), as Owner Trustee of the related Trust. The Trusts have
issued Asset-Backed Notes (the "Notes"). The Notes are issued and secured
pursuant to Indentures, between the related Trust and Bank One as Indenture
Trustee. Each Trust has also issued Asset-Backed Certificates.
CAPITAL AUTO RECEIVABLES ASSET TRUST
-------------------------------------
CAPITAL AUTO RECEIVABLES ASSET TRUST 1999-1
CAPITAL AUTO RECEIVABLES ASSET TRUST 1999-2
PART II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Each of the Trusts were formed pursuant to a trust agreement between Capital
Auto Receivables, Inc. (the "Seller") and Bankers Trust (Delaware), as Owner
Trustee, and issued the following Asset-Backed Notes and Certificates. Each
Trust acquired retail finance receivables from the Seller in the aggregate
amount as shown below in exchange for Asset-Backed Notes and Asset-Backed
Certificates representing undivided ownership interests in the Trust. Each
Trust's property includes a pool of retail instalment sale contracts secured by
new and used automobiles and light trucks, certain monies due thereunder,
security interests in the vehicles financed thereby and certain other property.
Retail
Finance
Date of Sale Receivables
and Servicing Aggregate Asset-Backed Asset-Backed
Trust Agreement Amount Notes Certificates
- ---------- ---------------- --------- ---------------- ------------
(millions) (millions) (millions)
Capital March 11, 1999 $2,809.8 Class A-1 $ 1,352.2 $ 138.0
Auto (Private Placement)
Receivables Class A-2 735.0
Asset Trust Class A-3 403.0
1999-1
Capital September 9,1999 $2,125.0 Class A-1 $ 427.0 $ 63.7
Auto (Private Placement)
Receivables Class A-2 $ 370.0
Asset Trust Class A-3 $ 306.5
1999-2 Class A-4 $ 400.0
Class A-5 $ 76.8
Variable Pay Term
$ 481.0
(Private Placement)
General Motors Acceptance Corporation, the originator of the retail receivables,
continues to service the receivables for the aforementioned Trusts and receives
compensation and fees for such services. Investors receive periodic payments of
principal and interest for each class of Notes and Certificates as the
receivables are liquidated.
--------------------
II-1
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
CROSS REFERENCE SHEET
Exhibit No. Caption Page
- ----------- ---------------------------------------------------- ------
-- Capital Auto Receivables Asset Trust 1999-1,
Independent Auditors' Report, Financial Statements II-3
and Selected Quarterly Data for the Year Ended
December 31, 1999.
-- Capital Auto Receivables Asset Trust 1999-2,
Independent Auditors' Report, Financial Statements II-9
and Selected Quarterly Data for the Year Ended
December 31, 1999.
27.1 Financial Data Schedule for Capital Auto Receivables
Asset Trust 1999-1 and 1999-2 (for SEC electronic --
Filing purposes only).
---------------------
II-2
INDEPENDENT AUDITORS' REPORT
March 10, 2000
The Capital Auto Receivables Asset Trust 1999-1, its Certificateholders, Capital
Auto Receivables, Inc., and Bankers Trust (Delaware), Owner Trustee:
We have audited the accompanying Statement of Assets, Liabilities and Equity of
the Capital Auto Receivables Asset Trust 1999-1 as of December 31, 1999 and the
related Statement of Distributable Income for the period March 11, 1999 (date of
inception) to December 31, 1999. These financial statements are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit 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 audit provides a reasonable basis for our opinion.
As described in Note 1 to the financial statements, these financial statements
are prepared on the basis of cash receipts and disbursements, which is a
comprehensive basis of accounting other than generally accepted accounting
principles.
In our opinion, such financial statements present fairly, in all material
respects, the assets, liabilities and equity arising from cash transactions of
the Capital Auto Receivables Asset Trust 1999-1 at December 31, 1999 and its
distributable income for the period March 11, 1999 (date of inception) to
December 31, 1999, on the basis of accounting described in Note 1.
s\ Deloitte & Touche LLP
- ------------------------
Deloitte & Touche LLP
600 Renaissance Center
Detroit, Michigan 48243
II-3
CAPITAL AUTO RECEIVABLES ASSET TRUST 1999-1
STATEMENT OF ASSETS, LIABILITIES AND EQUITY
December 31, 1999
------------------------
(in millions of dollars)
ASSETS
Receivables-(Discounted)(Note 2)........... $1,819.6
--------
TOTAL ASSETS .............................. $1,819.6
========
LIABILITIES AND EQUITY (NOTES 2 and 3)
Asset-Backed Notes ........................ $1,681.6
Asset-Backed Certificates (Equity) ........ 138.0
--------
TOTAL LIABILITIES AND EQUITY .............. $1,819.6
========
Reference should be made to the Notes to Financial Statements.
II-4
CAPITAL AUTO RECEIVABLES ASSET TRUST 1999-1
STATEMENT OF DISTRIBUTABLE INCOME
Year Ended December 31, 1999*
------------------------------
(in millions of dollars)
Distributable Income
Allocable to Principal
Asset-Backed Notes ........................ $ 808.6
-------
Total Principal $ 808.6
-------
Allocable to Interest
Asset-Backed Notes ........................ $ 87.7
Asset-Backed Certificates (Equity) ........ 6.4
-------
Total Interest $ 94.1
-------
Distributable Income ............................. $ 902.7
========
Income Distributed ............................... $ 902.7
========
*Represents the period March 11, 1999 (inception) through December 31, 1999.
Reference should be made to the Notes to Financial Statements.
II-5
CAPITAL AUTO RECEIVABLES ASSET TRUST 1999-1
NOTES TO FINANCIAL STATEMENTS
NOTE 1. BASIS OF ACCOUNTING
The financial statements of Capital Auto Receivables Asset Trust 1999-1 (the
"Trust") are prepared on the basis of cash receipts and cash disbursements. Such
financial statements differ from financial statements prepared in accordance
with generally accepted accounting principles in that interest income and the
related assets are recognized when received rather than when earned and
distributions to Noteholders and Certificateholders are recognized when paid
rather than when the respective obligation is incurred. Certain expenses of the
Trust are paid by Capital Auto Receivables, Inc. (the "Seller"). Capitalized
terms are defined in the prospectus dated February 24, 1999.
NOTE 2. SALE OF NOTES AND CERTIFICATES
On March 11, 1999, Capital Auto Receivables Asset Trust 1999-1 acquired retail
finance receivables aggregating approximately $2,628.2 million at a discount of
$181.6 million from the Seller in exchange for three classes of Asset-Backed
Notes representing indebtedness of the Trust of $1,352.2 million Class A-1;
$735.0 million Class A-2; $403.0 million Class A-3; and $138.0 million of
Asset-Backed Certificates representing equity interests in the Trust. The Trust
property includes a pool of retail instalment sale contracts for new automobiles
and light trucks, monies due or received thereunder, security interests in the
vehicles financed thereby and certain other property. The Servicer has the
option to repurchase the remaining receivables as of the last day of any month
on or after which the principal balance declines to 10% or less of the aggregate
amount financed.
NOTE 3. PRINCIPAL AND INTEREST PAYMENTS
Payments of interest on the Notes will be made on the fifteenth day of each
month or, if any such day is not a Business Day, on the next succeeding Business
Day, commencing on April 15, 1999 (each a "Distribution Date"). Principal of the
Notes will be payable by class in the priorities and in the amounts as set forth
in the Indenture (previously filed by Form 8-K), equal to the sum of the
Aggregate Noteholders' Principal Distributable Amounts to the extent of funds
available therefor. The unpaid principal of the Class A-1, Class A-2 and Class
A-3 Notes will be payable on the each of the following Distribution Dates,
respectively: in May 2001, June 2002 and August 2004.
No principal distributions will be made with respect to the Certificates until
the Notes have been paid in full. Thereafter, on each Distribution Date,
Certificateholders will receive, in respect of the Certificate Balance, an
amount equal to the Certificateholders' Principal Distributable Amount to the
extent of funds available therefor. The final scheduled Distribution Date for
the Certificates will occur on the Distribution Date in August 2004.
Interest on the outstanding principal amount of the Notes accrues from March 11,
1999 or, from the most recent Distribution Date on which interest has been paid
to but excluding the following Distribution Date. The Class A-1 Notes receive
interest at the rate of 5.364% per annum. The Class A-2 Notes receive interest
at the rate of 5.580% per annum. The Class A-3 Notes receive interest at the
rate of 5.680% per annum. Interest on each class of Notes is calculated on the
basis of a 360-day year consisting of twelve 30-day months. On each Distribution
Date, the Owner Trustee distributes pro rata to Certificateholders accrued
interest at the pass-through rate of 6.090% per annum on the outstanding
Certificate Balance.
II-6
CAPITAL AUTO RECEIVABLES ASSET TRUST 1999-1
NOTES TO FINANCIAL STATEMENTS
NOTE 4. FEDERAL INCOME TAX
The Trust is classified as a division of the Seller, and therefore is not
taxable as a corporation for federal income tax purposes. Each Noteholder by the
acceptance of a Note agrees to treat the Notes as indebtedness in the Trust for
federal, state and local income and franchise tax purposes. All the Certificates
were issued to the Seller on the closing date. If the Seller sells less than all
of the Certificates or if the Trust issues additional Certificates, this
characterization may change.
II-7
CAPITAL AUTO RECEIVABLES ASSET TRUST 1999-1
SUPPLEMENTARY FINANCIAL DATA (unaudited)
SUMMARY OF QUARTERLY DISTRIBUTABLE INCOME
1999 Quarters Principal Interest Total
- ------------------------------------ --------- -------- -----
(in millions of dollars)
First quarter ...................... $ 0.0 $ 0.0 $ 0.0
Second quarter*..................... 323.7 36.0 359.7
Third quarter ...................... 251.0 30.7 281.7
Fourth quarter ..................... 233.9 27.4 261.3
--------- -------- ---------
Total ......................... $ 808.6 $ 94.1 $ 902.7
========= ======== =========
*Represents the period March 11, 1999 (inception) through June 30, 1999.
II-8
INDEPENDENT AUDITORS' REPORT
March 10, 2000
The Capital Auto Receivables Asset Trust 1999-2, its Certificateholders, Capital
Auto Receivables, Inc., and Bankers Trust (Delaware), Owner Trustee:
We have audited the accompanying Statement of Assets, Liabilities and Equity of
the Capital Auto Receivables Asset Trust 1999-2 as of December 31, 1999 and the
related Statement of Distributable Income for the period September 9, 1999 (date
of inception) to December 31, 1999. These financial statements are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit 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 audit provides a reasonable basis for our opinion.
As described in Note 1 to the financial statements, these financial statements
are prepared on the basis of cash receipts and disbursements, which is a
comprehensive basis of accounting other than generally accepted accounting
principles.
In our opinion, such financial statements present fairly, in all material
respects, the assets and liabilities and equity arising from cash transactions
of the Capital Auto Receivables Trust Asset 1999-2 at December 31, 1999 and its
distributable income for the period September 9, 1999 (date of inception) to
December 31, 1999, on the basis of accounting described in Note 1.
s\ Deloitte & Touche LLP
- ------------------------
Deloitte & Touche LLP
600 Renaissance Center
Detroit, Michigan 48243
II-9
CAPITAL AUTO RECEIVABLES ASSET TRUST 1999-2
STATEMENT OF ASSETS, LIABILITIES AND EQUITY
December 31, 1999
------------------------
(in millions of dollars)
ASSETS
Receivables-(Note 2) ...................... $1,848.6
--------
TOTAL ASSETS .............................. $1,848.6
========
LIABILITIES AND EQUITY (NOTES 2 and 3)
Asset-Backed Notes ........................ $1,793.1
Asset-Backed Certificates (Equity) ........ 55.5
--------
TOTAL LIABILITIES AND EQUITY .............. $1,848.6
========
Reference should be made to the Notes to Financial Statements.
II-10
CAPITAL AUTO RECEIVABLES ASSET TRUST 1999-2
STATEMENT OF DISTRIBUTABLE INCOME
Year Ended December 31, 1999*
------------------------------
(in millions of dollars)
Distributable Income
Allocable to Principal
Asset-Backed Notes ........................ $ 268.1
Asset-Backed Certificates (Equity) ........ 8.3
--------
Total Principal $ 276.4
--------
Allocable to Interest
Asset-Backed Notes ........................ $ 31.6
Asset-Backed Certificates (Equity) ........ 1.1
--------
Total Interest $ 32.7
--------
Distributable Income ............................. $ 309.1
========
Income Distributed ............................... $ 309.1
========
*Represents the period September 9, 1999 (inception) through December 31 1999.
Reference should be made to the Notes to Financial Statements.
II-11
CAPITAL AUTO RECEIVABLES ASSET TRUST 1999-2
NOTES TO FINANCIAL STATEMENTS
NOTE 1. BASIS OF ACCOUNTING
The financial statements of Capital Auto Receivables Asset Trust 1999-2 (the
"Trust") are prepared on the basis of cash receipts and cash disbursements. Such
financial statements differ from financial statements prepared in accordance
with generally accepted accounting principles in that interest income and the
related assets are recognized when received rather than when earned and
distributions to Noteholders and Certificateholders are recognized when paid
rather than when the respective obligation is incurred. Certain expenses of the
Trust are paid by Capital Auto Receivables, Inc. (the "Seller"). Capitalized
terms defined in the prospectus dated August 26, 1999.
NOTE 2. SALE OF NOTES AND CERTIFICATES
On September 9, 1999, Capital Auto Receivables Asset Trust 1999-2 acquired
retail finance receivables aggregating approximately $2,125.0 million from the
Seller in exchange for six classes of Asset-Backed Notes representing
indebtedness of the Trust of $427.0 million Class A-1; $370.0 million Class A-2;
$306.5 million Class A-3; $400.0 million Class A-4; $76.8 million Class A-5;
$481.0 million Initial Variable Pay Term Note; and $63.7 million of Asset-Backed
Certificates representing equity interests in the Trust. The Trust property
includes a pool of retail instalment sale contracts for new and used automobiles
and light trucks, monies due or received thereunder, security interests in the
vehicles financed thereby and certain other property. The Servicer has the
option to repurchase the remaining receivables as of the last day of any month
on or after which the principal balance declines to 10% or less of the aggregate
amount financed.
Note 3: PRINCIPAL AND INTEREST PAYMENTS
Payments of interest on the Class A Notes, the Initial Variable Pay Term Note
and the Certificates will be made on the fifteenth day of each month, or, if any
such day is not a Business Day, on the next succeeding Business Day, commencing
October 15, 1999 (each a "Distribution Date"). In general, no principal payments
will be made on any class of the Class A Notes until its Targeted Final
Distribution Date. On the Targeted Final Distribution Date for each class of
Class A Notes, the Trust will pay the entire principal balance of that class of
Class A Notes, to the extent of funds available therefor. The Trust may issue
additional Variable Pay Term Notes on the Targeted Final Distribution Date for
each class of Class A Notes, subject to certain conditions. If issued, the
proceeds will be available to make payments of principal on the Targeted Final
Distribution Date for each of the Class A Notes. The Targeted Final Distribution
Dates for the Class A-1, Class A-2, Class A-3, Class A-4 and Class A-5 Notes are
as follows, respectively: March 2000, September 2000, March 2001, September 2001
and September 2002.
Amounts available to pay principal on the Class A Notes on each Distribution
Date that is not a Targeted Final Distribution Date for a class of Class A Notes
will be applied to make principal payments on the Variable Pay Term Notes and
distribution of Certificate Balance, pro rata based on the outstanding amount of
the Notes and Certificates, to the extent of funds available therefor. Payments
of principal on the Variable Pay Term Notes on the Targeted Final Distribution
Dates for each class of Class A Notes will also be applied to the extent of
funds available therefor. The Final Scheduled Distribution Date for the Variable
Pay Term Notes will occur on the Distribution Date in January 2005.
On each Distribution Date, Certificateholders will receive, in respect of the
Certificate Balance, an amount equal to the Certificateholders' Principal
Distributable Amount, a pro rata portion based on the outstanding amount of the
Notes and Certificates, to the extent of funds available therefor. The Final
Scheduled Distribution Date for the Certificates will occur on the Distribution
Date in January 2005.
II-12
CAPITAL AUTO RECEIVABLES ASSET TRUST 1999-2
NOTES TO FINANCIAL STATEMENTS
NOTE 3. PRINCIPAL AND INTEREST PAYMENTS (continued)
Interest on the outstanding principal amount of the Notes accrues from September
9, 1999 or from the most recent Distribution Date on which interest has been
paid to but excluding the following Distribution Date. The Class A-1 Notes
receive interest at the rate of 5.992% per annum. The Class A-2 Notes receive
interest at the rate of 6.060% per annum. The Class A-3 Notes receive interest
at the rate of 6.250% per annum. The Class A-4 Notes receive interest at the
rate of 6.300% per annum. The Class A-5 Notes receive interest at the rate of
6.450% per annum. The Initial Variable Pay Term Note receives interest at the
rate of one Month LIBOR plus 0.120%. For the period September 9, 1999 through
September 30, 1999, the Initial Variable Pay Term Note interest rate was
5.478750% per annum. Interest on Class A-1 Note and the Initial Variable Pay
Term Note is calculated on the basis of actual days elapsed during the period
for which interest is payable and a 360-day year. Interest on Class A-2, Class
A-3, Class A-4 and Class A-5 Notes is calculated on the basis of a 360-day year
consisting of twelve 30-day months. On each Distribution Date, the Owner Trustee
distributes pro rata to Certificateholders accrued interest at the pass-through
rate of 6.700% per annum on the outstanding Certificate Balance.
NOTE 4. DERIVATIVE FINANCIAL INSTRUMENT
The Trust was a party to an interest rate swap with off-balance sheet risk which
it uses in the normal course of business to reduce its exposure to fluctuations
in interest rates. The Trust entered into the interest rate swap directly with
the counterparty.
The interest rate swap is a contractual agreement between the Trust and the
counterparty to exchange the net difference between a fixed and floating
interest rate periodically over the life of the contract without exchange of the
underlying principal amount. At December 31, 1999, the notional amount of such
agreement was $212.9 million.
Fair value information presented herein is based on information available at
December 31, 1999. Although management is not aware of any factors that would
significantly affect the estimated fair value amount, such amount has not been
updated since those dates and therefore, the current estimates of fair value at
dates subsequent to December 31, 1999 may differ significantly from this amount.
The interest rate swap had a positive fair value of $5.7 million at December 31,
1999.
NOTE 5. FEDERAL INCOME TAX
The Trust is classified as a Grantor Trust for federal income tax purposes. Each
Noteholder by the acceptance of a Note agrees to treat the Notes as indebtedness
in the Trust for federal, state and local income and franchise tax purposes.
Each Certificateholder by the acceptance of a Certificate agrees to treat the
Certificates as equity interests in a grantor trust for federal, state and local
income and franchise tax purposes. A portion of the Certificates were issued to
the Seller on the closing date.
II-13
CAPITAL AUTO RECEIVABLES ASSET TRUST 1999-2
SUPPLEMENTARY FINANCIAL DATA (unaudited)
SUMMARY OF QUARTERLY DISTRIBUTABLE INCOME
1999 Quarters Principal Interest Total
- ------------------------------------ --------- -------- -----
(in millions of dollars)
First quarter ...................... $ 0.0 $ 0.0 $ 0.0
Second quarter ..................... 0.0 0.0 0.0
Third quarter ...................... 0.0 0.0 0.0
Fourth quarter*..................... 276.4 32.7 309.1
--------- -------- ---------
Total ......................... $ 276.4 $ 32.7 $ 309.1
========= ======== =========
*Represents the period September 9, 1999 (inception) through December 31 1999.
II-14
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8K
(a) (1) FINANCIAL STATEMENTS.
Included in Part II, Item 8, of Form 10-K.
(a) (2) FINANCIAL STATEMENT SCHEDULES.
All schedules have been omitted because they are not applicable or
because the information called for is shown in the financial statements
or notes thereto.
(a) (3) EXHIBITS (Included in Part II of this report).
-- Capital Auto Receivables Asset Trust 1999-1, Financial
Statements for the period March 11, 1999
(inception) through December 31, 1999.
-- Capital Auto Receivables Asset Trust 1999-2 Financial
Statements for the September 9, 1999
(inception) through December 31, 1999.
(b) REPORTS ON FORM 8-K.
No current reports on Form 8-K have been filed by any of
the above-mentioned Owner Trusts during the fourth quarter
ended December 31, 1999.
ITEMS 2, 3, 4, 5, 6, 9, 10, 11, 12 and 13 are not applicable and have been
omitted.
II-15
SIGNATURE
Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, the Owner Trustee has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
CAPITAL AUTO RECEIVABLES ASSET TRUST 1999-1
CAPITAL AUTO RECEIVABLES ASSET TRUST 1999-2
By: Bankers Trust (Delaware)
------------------------------------------------
(Owner Trustee, not in its individual
capacity but solely as Owner Trustee on
behalf of the Issuer.)
s\ PATRICIA RUSSO
------------------------------------------------
(Patricia Russo, Vice President)
Date: March 29, 2000
-----------------
II-16