1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1997
-----------------------------
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
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Commission file number 1-9161
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CHRYSLER CORPORATION
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(Exact name of registrant as specified in its charter)
STATE OF DELAWARE 38-2673623
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1000 Chrysler Drive, Auburn Hills, Michigan 48326-2766
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(Address of principal executive offices) (Zip Code)
(248) 576-5741
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
The registrant had 674,471,107 shares of common stock outstanding as of June
30, 1997.
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CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
INDEX
PAGE NO.
--------
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements 1-5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6-11
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 12-13
Item 5. Other Information 14-16
Item 6. Exhibits and Reports on Form 8-K 17
Signature Page 18
Exhibit Index 19
3
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS (unaudited)
For the Three and Six Months Ended June 30, 1997 and 1996
(In millions of dollars)
Three Months Ended Six Months Ended
-------------------- ---------------------
1997 1996 1997 1996
------- ------- ------- -------
Sales of manufactured products $13,393 $14,858 $28,549 $28,902
Finance and insurance revenues 400 431 810 880
Other revenues 595 550 1,145 1,013
------- ------- ------- -------
TOTAL REVENUES 14,388 15,839 30,504 30,795
------- ------- ------- -------
Costs, other than items below 11,092 11,740 23,060 22,745
Depreciation and special tools amortization 706 591 1,384 1,202
Selling and administrative expenses 1,214 1,220 2,421 2,307
Employee retirement benefits 311 306 636 617
Interest expense 254 262 488 534
------- ------- ------- -------
TOTAL EXPENSES 13,577 14,119 27,989 27,405
------- ------- ------- -------
EARNINGS BEFORE INCOME TAXES 811 1,720 2,515 3,390
Provision for income taxes 328 683 1,003 1,348
------- ------- ------- -------
NET EARNINGS $ 483 $ 1,037 $ 1,512 $ 2,042
Preferred stock dividends 1 1 1 2
------- ------- ------- -------
NET EARNINGS ON COMMON STOCK $ 482 $ 1,036 $ 1,511 $ 2,040
======= ======= ======= =======
(In dollars or millions of shares)
PRIMARY EARNINGS PER COMMON SHARE $ 0.70 $ 1.39 $ 2.17 $ 2.70
======= ======= ======= =======
Average common and dilutive equivalent
shares outstanding 685.7 747.7 695.8 754.4
FULLY DILUTED EARNINGS PER COMMON SHARE $ 0.70 $ 1.38 $ 2.16 $ 2.68
======= ======= ======= =======
Average common and dilutive equivalent
shares outstanding 689.0 753.0 698.8 761.6
DIVIDENDS DECLARED PER COMMON SHARE $ 0.40 $ 0.35 $ 0.80 $ 0.65
See notes to consolidated financial statements.
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Item 1. FINANCIAL STATEMENTS - CONTINUED
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In millions of dollars)
1997 1996
---------- -------------------------
June 30 Dec. 31 June 30
---------- -------------------------
(unaudited) (unaudited)
ASSETS:
Cash and cash equivalents $ 5,623 $ 5,158 $5,635
Marketable securities 2,412 2,594 3,127
------- ------- ------
Total cash, cash equivalents and marketable securities 8,035 7,752 8,762
Accounts receivable - trade and other 2,021 2,126 2,610
Inventories 6,079 5,195 5,535
Prepaid employee benefits, taxes and other expenses 1,661 1,929 707
Finance receivables and retained interests in
sold receivables 14,421 12,339 12,914
Property and equipment 16,060 14,905 13,283
Special tools 4,144 3,924 3,492
Intangible assets 1,949 1,995 1,889
Other noncurrent assets 6,658 6,019 6,602
------- ------- -------
TOTAL ASSETS $61,028 $56,184 $55,794
======= ======= =======
LIABILITIES:
Accounts payable $ 9,564 $ 8,981 $ 9,155
Accrued liabilities and expenses 9,410 8,864 8,567
Short-term debt 3,903 3,214 1,667
Payments due within one year on long-term debt 3,538 2,998 2,388
Long-term debt 9,367 7,184 9,166
Accrued noncurrent employee benefits 9,729 9,431 9,390
Other noncurrent liabilities 3,957 3,941 4,039
------- ------- -------
TOTAL LIABILITIES 49,468 44,613 44,372
------- ------- -------
SHAREHOLDERS' EQUITY: (shares in millions)
Preferred stock - $1 per share par value; authorized
20.0 shares; Series A Convertible Preferred Stock;
issued and outstanding: 1997 - 0.02; 1996 - 0.04 and 0.06 shares,
respectively (aggregate liquidation preference 1997 - $8 million;
1996 - $21 million and $32 million, respectively) * * *
Common stock - $1 per share par value; authorized
1,000.0 shares; issued: 1997 - 823.1; 1996 - 821.6 shares
and 820.4 shares, respectively 823 822 820
Additional paid-in capital 5,169 5,129 5,117
Retained earnings 9,793 8,829 7,816
Treasury stock - at cost: 1997 - 148.6 shares;
1996 - 119.1 and 91.8 shares, respectively (4,225) (3,209) (2,331)
------- ------- -------
TOTAL SHAREHOLDERS' EQUITY 11,560 11,571 11,422
------- ------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $61,028 $56,184 $55,794
======= ======= =======
* Less than $1 million
See notes to consolidated financial statements.
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Item 1. FINANCIAL STATEMENTS - CONTINUED
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
For the Six Months Ended June 30, 1997 and 1996
(In millions of dollars)
1997 1996
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 3,376 $ 4,083
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities (1,559) (1,946)
Sales and maturities of marketable securities 1,741 2,101
Finance receivables acquired (14,006) (12,454)
Finance receivables collected 4,276 3,843
Proceeds from sales of finance receivables 7,608 8,691
Expenditures for property and equipment (1,404) (1,273)
Expenditures for special tools (808) (473)
Purchases of vehicle operating leases (891) (340)
Proceeds from the sale of nonautomotive assets -- 476
Other 248 --
------- -------
NET CASH USED IN INVESTING ACTIVITIES (4,795) (1,375)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in short-term debt 689 (1,137)
Proceeds from long-term borrowings 4,336 1,122
Payments on long-term borrowings (1,607) (1,075)
Repurchases of common stock (1,007) (1,110)
Dividends paid (560) (455)
Other 33 39
------- -------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 1,884 (2,616)
------- -------
Change in cash and cash equivalents 465 92
Cash and cash equivalents at beginning of period 5,158 5,543
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 5,623 $ 5,635
======= =======
During the first six months of 1996, Chrysler Financial Corporation acquired
$750 million of marketable securities in non-cash transactions related to the
securitization of retail receivables.
See notes to consolidated financial statements.
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Item 1. FINANCIAL STATEMENTS - CONTINUED
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. CONSOLIDATION AND FINANCIAL STATEMENT PRESENTATION
The unaudited consolidated financial statements of Chrysler Corporation and its
consolidated subsidiaries ("Chrysler") include the accounts of all significant
majority-owned subsidiaries and entities. Affiliates that are 20 percent to 50
percent owned and subsidiaries where control is expected to be temporary,
primarily investments in certain dealerships, are generally accounted for on an
equity basis. Intercompany accounts and transactions have been eliminated in
consolidation. The consolidated financial statements of Chrysler for the three
and six months ended June 30, 1997 and 1996 reflect all adjustments, consisting
of only normal and recurring items, which are, in the opinion of management,
necessary to present a fair statement of the results for the interim periods.
The operating results for the three and six months ended June 30, 1997 are not
necessarily indicative of the results of operations for the entire year.
Reference should be made to the consolidated financial statements included in
the Annual Report on Form 10-K for the year ended December 31, 1996. Certain
amounts for 1996 have been reclassified to conform with current period
classifications.
NOTE 2. INVENTORIES
Inventories, summarized by major classification, were as follows:
1997 1996
------- ---------------------
June 30 Dec. 31 June 30
-------- ------- -------
(In millions of dollars)
Finished products, including service parts $1,770 $1,569 $1,561
Raw materials, finished production parts and supplies 1,423 1,540 1,374
Vehicles held for short-term lease 2,886 2,086 2,600
------- ------- -------
TOTAL $6,079 $5,195 $5,535
======= ======= =======
NOTE 3. CHANGES IN ACCOUNTING PRINCIPLES
Effective January 1, 1997, Chrysler adopted Statement of Financial Accounting
Standards ("SFAS") No. 125, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities." The adoption of this
accounting standard did not have a material impact on Chrysler's consolidated
financial statements.
Effective January 1, 1996, Chrysler adopted SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
The initial adoption of this new accounting standard did not have a material
impact on Chrysler's consolidated financial statements. Also, see Note 6.
NOTE 4. COMMON STOCK REPURCHASES
During 1996, Chrysler's Board of Directors approved an increase in Chrysler's
planned 1997 common stock repurchases from $1 billion to $2 billion. These
common stock repurchases are subject to market and general economic conditions.
During the second quarter and first six months of 1997, Chrysler repurchased
13.5 million and 31.3 million shares, respectively, of its common stock at a
cost of $410 million and $997 million, respectively.
NOTE 5. SALE OF DEFENSE ELECTRONICS AND AIRBORNE SYSTEMS UNITS
During the second quarter of 1996, Chrysler completed the sale of Electrospace
Systems, Inc. ("ESI") and Chrysler Technologies Airborne Systems, Inc.
("CTAS "), for net proceeds of $476 million. The sale resulted in a pretax
gain of $101 million ($87 million after taxes) which is included in Costs,
other than items below in the consolidated statement of earnings.
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Item 1. FINANCIAL STATEMENTS - CONTINUED
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOTE 6. LOSS ON ASSETS TO BE SOLD
During the second quarter of 1996, Chrysler committed to a plan of disposal for
Thrifty Rent-A-Car System, Inc. ("Thrifty"). Accordingly, a pretax loss of $65
million ($100 million after taxes) was recognized in the second quarter of 1996
to write down Thrifty's carrying value to estimated fair value less cost to
sell. Chrysler's estimate of the fair value of Thrifty is based principally
on an analysis of non-binding bids. The pretax loss is included in Costs,
other than items below in the consolidated statement of earnings. The
after-tax loss includes the effect of not being able to claim a tax deduction
for the capital loss on Chrysler's investment in Thrifty. Thrifty's assets and
liabilities at June 30, 1997, and its results of operations for the three and
six months ended June 30, 1997 were immaterial to Chrysler's consolidated
assets and liabilities and results of operations, respectively. Chrysler is
continuing with its efforts to sell Thrifty and is uncertain when the sale of
Thrifty may occur.
NOTE 7. NEW ACCOUNTING STANDARDS
In March 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 128, "Earnings per Share." This Statement establishes standards for
computing and presenting earnings per share ("EPS") and applies to all entities
with publicly held common stock or potential common stock. This Statement
replaces the presentation of primary EPS and fully diluted EPS with a
presentation of basic EPS and diluted EPS, respectively. Basic EPS excludes
dilution and is computed by dividing earnings available to common stockholders
by the weighted-average number of common shares outstanding for the period.
Similar to fully diluted EPS, diluted EPS reflects the potential dilution of
securities that could share in the earnings. This Statement is not expected to
have a material effect on Chrysler's reported EPS amounts. Restatement of all
prior period EPS data presented is required. This Statement is effective for
Chrysler's consolidated financial statements for the year ended December 31,
1997.
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income,"
effective for fiscal years beginning after December 15, 1997. This Statement
requires that all items that are required to be recognized under accounting
standards as components of comprehensive income be reported in a financial
statement that is displayed with the same prominence as other financial
statements. This statement does not require a specific format for that
financial statement but requires that an entity display an amount representing
total comprehensive income for the period in that financial statement. This
statement requires that an entity classify items of other comprehensive income
by their nature in a financial statement. For example, other comprehensive
income may include foreign currency items, minimum pension liability
adjustments, and unrealized gains and losses on certain investments in debt and
equity securities. In addition, the accumulated balance of other comprehensive
income must be displayed separately from retained earnings and additional
paid-in capital in the equity section of a statement of financial position.
Reclassification of financial statements for earlier periods, provided for
comparative purposes, is required. Chrysler has not determined the impact that
the adoption of this new accounting standard will have on its consolidated
financial statements. Chrysler will adopt this accounting standard on January
1, 1998, as required.
NOTE 8. SUBSEQUENT EVENT
On July 3, 1997, Chrysler announced its intent to extinguish its $267 million
10.95% Debentures Due 2017 ("Debentures") and $245 million 10.40% Notes Due
1999 ("Notes"). The early extinguishment of the Debentures and Notes is
expected to occur in August 1997 and result in an immaterial loss. Chrysler
plans on refinancing the Debentures and Notes in the third quarter of 1997,
subject to market and general economic conditions.
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 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 of $811 million for the
second quarter of 1997, compared with $1,720 million for the second quarter of
1996. For the first six months of 1997, Chrysler reported earnings before
income taxes of $2,515 million, compared with $3,390 million for the first six
months of 1996. Net earnings for the second quarter of 1997 were $483
million, or $0.70 per common share, compared with $1,037 million, or $1.39 per
common share, for the second quarter of 1996. Net earnings for the first six
months of 1997 were $1,512 million, or $2.17 per common share, compared with
$2,042 million, or $2.70 per common share, for the first six months of 1996.
Earnings for the second quarter and first six months of 1997 included an
estimated unfavorable impact of approximately $730 million ($438 million after
taxes) related to a 29-day strike at an engine plant in Detroit, Michigan that
temporarily shut down seven of Chrysler's assembly plants and certain
automotive component operations. The strike resulted in an estimated loss of
vehicle production and shipments of approximately 89,000 units, net of
second-quarter recoveries. The strike estimate does not take into account the
effect of possible recoveries, if any, that may occur during the remainder of
1997. The estimate of the strike impact was based on Chrysler's second-quarter
production as planned at the time of the strike.
Earnings for the second quarter and first six months of 1996 included a
gain of $101 million ($87 million after taxes) from the sale of Electrospace
Systems, Inc. ("ESI") and Chrysler Technologies Airborne Systems, Inc.
("CTAS"), and a charge of $65 million ($100 million after taxes) related to a
write-down of Thrifty Rent-A-Car System, Inc. ("Thrifty").
Chrysler's worldwide vehicle shipments in the second quarter and first
six months of 1997 were 738,453 units and 1,519,692 units, respectively,
compared with 801,769 units and 1,554,945 units, respectively, in the second
quarter and first six months of 1996. Chrysler's vehicle shipments outside of
the U.S., Canada and Mexico in the second quarter and first six months of 1997
were 72,308 units and 125,160 units, respectively, compared with 55,909 units
and 103,254 units, respectively, in the second quarter and first six months of
1996. The decreases in worldwide shipments primarily reflect the unfavorable
impact of the strike.
In addition to the effect of the strike, pretax earnings in the second
quarter and first six months of 1997 as compared with the second quarter and
first six months of 1996 reflect an increase in average sales incentives per
vehicle and increased warranty costs, partially offset by vehicle pricing
actions and lower profit-based employee compensation costs. The increase in
average sales incentives per vehicle was attributable to an increasingly
competitive market environment. The increase in warranty costs was primarily
related to several voluntary customer service actions and recalls initiated in
the second quarter of 1997, partially offset by the effect of lower average
warranty conditions on current model year vehicles.
Chrysler's revenues and results of operations are principally derived from
the U.S. and Canada automotive marketplaces. In the second quarter of 1997,
retail industry sales (including fleet) of new cars and trucks in the U.S. and
Canada, on a Seasonally Adjusted Annual Rate basis, were 16.2 million units,
compared with 16.7 million units for the second quarter of 1996, a decrease of
3 percent.
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - CONTINUED
FINANCIAL REVIEW - CONTINUED
Chrysler's U.S. and combined U.S. and Canada retail sales and market share
data for the second quarter and first six months of 1997 and 1996 were as
follows:
Second Quarter Six Months
----------------------------- ---------------------------------
Increase/ Increase/
1997 1996 (Decrease) 1997 1996 (Decrease)
-------- -------- --------- ---------- --------- ----------
U.S. Retail Market (1):
Car sales 215,338 256,119 (40,781) 418,315 471,266 (52,951)
Car market share 9.7% 10.6% (0.9)% 9.9% 10.5% (0.6)%
Truck sales (including minivans) 413,152 448,467 (35,315) 782,830 824,626 (41,796)
Truck market share 21.8% 24.1% (2.3)% 21.8% 23.5% (1.7)%
Combined car and truck sales 628,490 704,586 (76,096) 1,201,145 1,295,892 (94,747)
Combined car and truck
market share 15.3% 16.4% (1.1)% 15.4% 16.2% (0.8)%
U.S. and Canada Retail Market (1):
Combined car and truck sales 702,210 773,017 (70,807) 1,329,054 1,417,695 (88,641)
Combined car and truck
market share 15.5% 16.7% (1.2)% 15.6% 16.5% (0.9)%
(1) All retail sale and market share data include fleet sales.
Chrysler's U.S. car market share for the second quarter and first six
months of 1997 decreased compared with the second quarter and first six months
of 1996 primarily as a result of decreased sales of its Neon vehicles and Dodge
Intrepid, Chrysler Concorde, and Eagle Vision sedans. Chrysler's U.S. truck
market share for the second quarter and first six months of 1997 decreased
compared with the second quarter and first six months of 1996 primarily as a
result of decreased sales of its Dodge Ram pickup trucks and Jeep(R) Grand
Cherokees, which primarily reflects the effect of the strike. In addition to
the effect of the strike, these decreases reflect an increasingly competitive
environment resulting primarily from new product offerings from competitors.
Japanese manufacturers have also benefited from currency exchange rate changes
between the Japanese yen and U.S. dollar which have given them greater
flexibility in vehicle pricing. This increased competitive environment
resulted in Chrysler increasing average sales incentives per vehicle in the
first half of 1997 and lowering total-year 1997 planned production.
Chrysler Financial Corporation ("CFC") reported earnings before income
taxes of $156 million for the second quarter of 1997 compared with $155 million
for the second quarter of 1996. For the first six months of 1997, CFC reported
earnings before income taxes of $297 million compared with $309 million for the
first six months of 1996. CFC's net earnings for the second quarter and first
six months of 1997 were $103 million and $196 million, respectively, compared
with $101 million and $199 million for the second quarter and first six months
of 1996.
COMPARISON OF SELECTED ELEMENTS OF REVENUES AND EXPENSES
Chrysler's total revenues for the second quarter and first six months of
1997 and 1996 were as follows:
Second Quarter Six Months
-------------------------------- ------------------------------
Increase/ Increase/
(In millions of dollars) 1997 1996 (Decrease) 1997 1996 (Decrease)
-------- -------- ---------- -------- -------- ----------
Sales of manufactured products $ 13,393 $ 14,858 (10)% $ 28,549 $ 28,902 (1)%
Finance and insurance revenues 400 431 (7)% 810 880 (8)%
Other revenues 595 550 8 % 1,145 1,013 13 %
-------- -------- -------- --------
Total revenues $ 14,388 $ 15,839 (9)% $ 30,504 $ 30,795 (1)%
======== ======== ======== ========
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - CONTINUED
COMPARISON OF SELECTED ELEMENTS OF REVENUES AND EXPENSES - CONTINUED
The decrease in sales of manufactured products in the second quarter of
1997 compared with the second quarter of 1996 primarily reflects an 8 percent
decrease in vehicle shipments and a decrease in average revenue per unit, net
of sales incentives, from $18,649 in the second quarter of 1996 to $18,465 in
the second quarter of 1997. The decrease in sales of manufactured products in
the first six months of 1997 compared with the first six months of 1996
primarily reflects a 2 percent decrease in vehicle shipments, partially offset
by an increase in average revenue per unit, net of sales incentives, from
$18,604 in the first six months of 1996 to $18,963 in the first six months of
1997. The decrease in average revenue per unit in the second quarter primarily
reflects higher average sales incentives per vehicle, and lower shipments of
Jeep Grand Cherokees and Dodge Ram pickup trucks resulting primarily from the
strike, partially offset by vehicle pricing actions. The increase in average
revenue per unit in the first six months of 1997 was principally due to vehicle
pricing actions partially offset by higher average sales incentives per
vehicle.
The decrease in finance and insurance revenues in the second quarter and
first six months of 1997 compared with the corresponding 1996 periods was
primarily attributable to the adoption of Statement of Financial Accounting
Standards ("SFAS") No. 125, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities." Prior to 1997, income
from sold wholesale receivables was included in Finance and insurance revenues.
Effective January 1, 1997, gains from sales of wholesale receivables are
reported in Other revenues.
The increase in other revenues for the second quarter and first six months
of 1997 compared with the corresponding 1996 periods was primarily attributable
to higher gains from sales of receivables at CFC and higher revenues by Car
Rental Operations.
Chrysler's total expenses for the second quarter and first six months of
1997 and 1996 were as follows:
Second Quarter Six Months
---------------------------- ------------------------------
Increase/ Increase/
1997 1996 (Decrease) 1997 1996 (Decrease)
-------- -------- --------- --------- --------- ---------
(In millions of dollars)
Costs, other than items below $ 11,092 $ 11,740 (6)% $ 23,060 $ 22,745 1 %
Depreciation and special tools
amortization 706 591 19 % 1,384 1,202 15 %
Selling and administrative expenses 1,214 1,220 -- % 2,421 2,307 5 %
Employee retirement benefits 311 306 2 % 636 617 3 %
Interest expense 254 262 (3)% 488 534 (9)%
-------- -------- -------- --------
Total expenses $ 13,577 $ 14,119 (4)% $ 27,989 $ 27,405 2 %
======== ======== ======== ========
Costs, other than items below decreased in the second quarter of 1997
compared with the second quarter of 1996, primarily as a result of an 8 percent
decrease in vehicle shipments, partially offset by increased vehicle content.
Costs, other than items below were 83 percent and 81 percent of sales of
manufactured products for the second quarter and first six months of 1997,
respectively, compared with 79 percent for both the second quarter and first
six months of 1996.
Depreciation and special tools amortization for the second quarter and
first six months of 1997 increased compared with the corresponding 1996 periods
primarily as a result of higher levels of property and equipment and tooling in
use, including increased depreciation related to vehicles under purchased
operating leases.
Selling and administrative expenses for the first six months of 1997
increased compared with the corresponding 1996 period primarily as a result of
increased advertising expenses and increased expenses associated with
Chrysler's expanding international operations, partially offset by lower
profit-based employee compensation costs.
Interest expense for the second quarter and first six months of 1997
decreased compared with the corresponding 1996 periods primarily as a result of
lower average effective cost of borrowings at CFC. The decline in CFC's
average effective cost of borrowings primarily reflects lower market interest
rates in the U.S. and Canada.
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - CONTINUED
COMPARISON OF SELECTED ELEMENTS OF REVENUES AND EXPENSES - CONTINUED
During the second quarter of 1996, Chrysler completed the sale of ESI and
CTAS for net proceeds of $476 million. The sale resulted in a pretax gain of
$101 million ($87 million after taxes) which is included in Costs, other than
items below in the consolidated statement of earnings.
During the second quarter of 1996, Chrysler committed to a plan of
disposal for Thrifty. Accordingly, a pretax loss of $65 million ($100 million
after taxes) was recognized in the second quarter of 1996 to write down
Thrifty's carrying value to estimated fair value less cost to sell. Chrysler's
estimate of the fair value of Thrifty is based principally on an analysis of
non-binding bids. The pretax loss is included in Costs, other than items below
in the consolidated statement of earnings. The after-tax loss includes the
effect of not being able to claim a tax deduction for the capital loss on
Chrysler's investment in Thrifty. Thrifty's assets and liabilities at June 30,
1997, and its results of operations for the three and six months ended June 30,
1997 were immaterial to Chrysler's consolidated assets and liabilities and
results of operations, respectively. Chrysler is continuing with its efforts
to sell Thrifty and is uncertain when the sale of Thrifty may occur.
LIQUIDITY AND CAPITAL RESOURCES
Chrysler's consolidated combined cash, cash equivalents and marketable
securities totaled $8,035 million at June 30, 1997 (including $994 million held
by CFC and Car Rental Operations), compared with $7,752 million at December
31, 1996 (including $797 million held by CFC and Car Rental Operations). The
increase in Chrysler's combined cash, cash equivalents and marketable
securities in the first six months of 1997 was primarily the result of cash
generated by operating activities and cash provided by a net increase in total
debt, partially offset by capital expenditures, net finance receivables
acquired, common stock repurchases and dividend payments.
During 1996, Chrysler's Board of Directors approved an increase in
Chrysler's planned 1997 common stock repurchases from $1 billion to $2 billion.
These common stock repurchases are subject to market and general economic
conditions. During the second quarter and the first six months of 1997,
Chrysler repurchased 13.5 million and 31.3 million shares, respectively, of its
common stock at a cost of $410 million and $997 million, respectively.
In February 1997, Chrysler sold $500 million of 7.45% Debentures due 2097
and $600 million of 7.45% Debentures due 2027 for net proceeds of $485 million
and $592 million, respectively.
On July 3, 1997, Chrysler announced its intent to extinguish its $267
million 10.95% Debentures Due 2017 ("Debentures") and $245 million 10.40% Notes
Due 1999 ("Notes"). The early extinguishment of the Debentures and Notes is
expected to occur in August 1997 and result in an immaterial loss. Chrysler
plans on refinancing the Debentures and Notes in the third quarter of 1997,
subject to market and general economic conditions.
At June 30, 1997, Chrysler (excluding CFC) had debt maturities totaling
$1.0 billion through 1999. During the second quarter of 1997, Chrysler
replaced its existing $2.4 billion revolving credit agreement, which was to
expire in April 2001, with a new $2.6 billion revolving credit agreement
expiring in April 2002. There were no amounts outstanding under either
revolving credit agreement during the second quarter of 1997. Chrysler
believes that cash from operations and its cash position will be sufficient to
meet its capital expenditure, debt maturity, common stock repurchase, dividend
payment and other funding requirements.
Receivable sales continued to be a significant source of funding for CFC,
which realized $3.2 billion of net proceeds from the sale of automotive retail
receivables in the first six months of 1997 compared with $4.7 billion of net
proceeds in the first six months of 1996. In addition, securitization of
revolving wholesale account balances provided funding for CFC which aggregated
$6.8 billion and $6.6 billion at June 30, 1997 and 1996, respectively.
9
12
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - CONTINUED
LIQUIDITY AND CAPITAL RESOURCES - CONTINUED
At June 30, 1997, CFC had contractual debt maturities of $5.0 billion for
the remainder of 1997 (including $3.2 billion of short-term notes), $2.6
billion in 1998 and $3.0 billion in 1999. During the second quarter of 1997,
CFC entered into new revolving credit facilities which replaced its existing
U.S. and Canadian revolving credit facilities. The new facilities, which total
$8 billion, consist of a $2 billion facility expiring in April 1998 and a $6
billion facility expiring in April 2002. There were no amounts outstanding
under any of the revolving credit facilities during the second quarter of
1997. CFC believes that cash provided by operations, receivable sales,
securitizations, and the issuance of term debt and commercial paper will
provide sufficient liquidity to meet its debt maturity and other funding
requirements.
OUTLOOK
The statements contained in this Outlook section are based on management's
current expectations. With the exception of the historical information
contained herein, the statements presented in this Outlook section are
forward-looking statements that involve numerous risks and uncertainties.
Actual results may differ materially.
During the second quarter of 1997, Chrysler faced an increasingly
competitive environment resulting primarily from new product offerings from
competitors. Japanese manufacturers have also benefited from currency exchange
rate changes between the Japanese yen and U.S. dollar which have given them
greater flexibility in vehicle pricing. This increased competitive environment
resulted in Chrysler increasing average sales incentives per vehicle in the
first half of 1997 and lowering total-year 1997 planned production. This
increasingly competitive environment could result in additional similar actions
during the second half of 1997.
Chrysler's worldwide vehicle production in the second quarter of 1997
was 704,938 units, a decrease of 113,062 units or 14 percent, compared with our
planned second quarter 1997 production of 818,000 (as estimated at the end of
the first quarter of 1997). The decrease was primarily attributable to the
strike. Worldwide vehicle production for the third quarter of 1997 is expected
to be approximately 586,000 units, a decrease of 45,000 units compared with the
third quarter of 1996. This expected production level is heavily dependent on
Chrysler's ability to maintain its competitive position, continued favorable
economic conditions in the U.S. and Canada, where Chrysler's sales are
concentrated, and the avoidance of work stoppages by represented employees.
Chrysler projects that full-year 1997 retail (including fleet) industry
sales for the U.S. will range from 15.0 million to 15.5 million units and that
full-year 1997 retail (including fleet) industry sales for Canada will range
from 1.2 million to 1.4 million units. Full-year 1996 retail (including fleet)
industry sales were 15.4 million units and 1.2 million units in the U.S. and
Canada, respectively. Actual levels of industry retail (including fleet) sales
will depend on, among other things, economic conditions in the U.S. and Canada.
Accordingly, there can be no assurance that Chrysler's estimates will be
accurate.
In addition, Chrysler wishes to caution readers that several factors, as
well as those factors described elsewhere in this discussion or in other
Securities and Exchange Commission filings, in some cases have affected, and in
the future could affect, Chrysler's actual results, and could cause Chrysler's
actual results to differ materially from those expressed in any forward-looking
statement made by, or on behalf of, Chrysler. Those factors include: business
conditions and growth in the automotive industry and general economy; changes
in gasoline and oil prices; changes in consumer debt levels and interest rates;
changes in consumer preferences away from pickup trucks, sport-utility vehicles
and minivans; competitive factors, such as domestic and foreign rival car and
truck offerings, sales incentives, acceptance of new products and price
pressures; excess or shortage of manufacturing capacity; risks and
uncertainties associated with Chrysler's expansion into international markets;
and changes in foreign currency exchange rates and the resulting impact on
pricing strategies of major foreign competitors. Additionally, several of
Chrysler's competitors have larger worldwide sales volumes and greater
financial resources, which may, over time, place Chrysler at a competitive
disadvantage in responding to its competitors' offerings, substantial changes
in consumer preferences, government regulations, or adverse economic conditions
in the U.S. and Canada. Finally, the automotive industry historically has been
highly cyclical and the duration of these cycles has been difficult to predict.
10
13
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - CONTINUED
NEW ACCOUNTING STANDARDS
In March 1997, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 128, "Earnings per Share." This Statement establishes standards for
computing and presenting earnings per share ("EPS") and applies to all
entities with publicly held common stock or potential common stock. This
Statement replaces the presentation of primary EPS and fully diluted EPS with a
presentation of basic EPS and diluted EPS, respectively. Basic EPS excludes
dilution and is computed by dividing earnings available to common stockholders
by the weighted-average number of common shares outstanding for the period.
Similar to fully diluted EPS, diluted EPS reflects the potential dilution of
securities that could share in the earnings. This Statement is not expected to
have a material effect on Chrysler's reported EPS amounts. Restatement of all
prior period EPS data presented is required. This Statement is effective for
Chrysler's financial statements for the year ended December 31, 1997.
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income," effective for fiscal years beginning after December 15, 1997. This
Statement requires that all items that are required to be recognized under
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements. This statement does not require a specific format for
that financial statement but requires that an entity display an amount
representing total comprehensive income for the period in that financial
statement. This statement requires that an entity classify items of other
comprehensive income by their nature in a financial statement. For example,
other comprehensive income may include foreign currency items, minimum pension
liability adjustments, and unrealized gains and losses on certain investments
in debt and equity securities. In addition, the accumulated balance of other
comprehensive income must be displayed separately from retained earnings and
additional paid-in capital in the equity section of a statement of financial
position. Reclassification of financial statements for earlier periods,
provided for comparative purposes, is required. Chrysler has not determined
the impact that the adoption of this new accounting standard will have on its
consolidated financial statements. Chrysler will adopt this accounting
standard on January 1, 1998, as required.
In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information," effective for fiscal years beginning
after December 15, 1997. This Statement establishes standards for reporting
information about operating segments in annual financial statements and
requires selected information about operating segments in interim financial
reports issued to shareholders. It also establishes standards for related
disclosures about products and services, geographic areas and major customers.
Operating segments are defined as components of an enterprise about which
separate financial information is available that is evaluated regularly by the
chief operating decision maker in deciding how to allocate resources and in
assessing performance. This Statement requires reporting segment profit or
loss, certain specific revenue and expense items and segment assets. It also
requires reconciliations of total segment revenues, total segment profit or
loss, total segment assets, and other amounts disclosed for segments to
corresponding amounts reported in the consolidated financial statements.
Restatement of comparative information for earlier periods presented is
required in the initial year of application. Interim information is not
required until the second year of application, at which time comparative
information is required. Chrysler has not determined the impact that the
adoption of this new accounting standard will have on its consolidated
financial statement disclosures. Chrysler will adopt this accounting standard
on January 1, 1998, as required.
REVIEW BY INDEPENDENT ACCOUNTANTS
Deloitte & Touche LLP, Chrysler's independent public accountants,
performed a review of the financial statements for the three and six months
ended June 30, 1997 and 1996 in accordance with the standards for such reviews
established by the American Institute of Certified Public Accountants. The
review did not constitute an audit, and accordingly, Deloitte & Touche LLP did
not express an opinion on the aforementioned data. Refer to the Independent
Accountants' Report included at Exhibit 15A.
11
14
PART II. OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Annual Meeting of Stockholders of Chrysler Corporation was held on May
15, 1997.
(c) The following matters were submitted to a vote at the meeting:
(1) the election of the following nominees as directors of Chrysler
Corporation. The vote with respect to each nominee was as follows:
NOMINEE FOR WITHHELD
----------------------- ----------- ---------
Lilyan H. Affinito 619,769,380 4,661,247
James D. Aljian 619,746,373 4,684,254
Robert E. Allen 619,621,998 4,808,629
Joseph A. Califano, Jr. 619,653,089 4,777,538
Thomas G. Denomme 619,977,224 4,453,403
Robert J. Eaton 619,993,038 4,437,589
Earl G. Graves 619,815,625 4,615,002
Kent Kresa 620,114,232 4,316,395
Robert J. Lanigan 619,933,144 4,497,483
Robert A. Lutz 619,814,066 4,616,561
Peter A. Magowan 620,056,244 4,374,383
John B. Neff 620,064,652 4,365,975
Lynton R. Wilson 619,960,391 4,470,236
(2) a recommendation of the Board of Directors that the stockholders
appoint the firm of Deloitte & Touche LLP as independent accountants to
audit the books, records and accounts of Chrysler Corporation for the
year 1997. The vote on this matter was as follows:
BROKER
FOR AGAINST ABSTAIN NON-VOTES
----------- --------- --------- ---------
621,399,700 1,391,933 1,638,994 -0-
(3) a recommendation of the Board of Directors that the stockholders
approve amendments to the Chrysler Corporation Incentive Compensation
Plan and Long-Term Incentive Plan to make certain changes in order to
preserve Chrysler's federal income tax deduction with respect to
performance based compensation paid under the Plans in future years.
The vote on this matter was as follows:
BROKER
FOR AGAINST ABSTAIN NON-VOTES
----------- ----------- --------- ---------
601,485,771 19,142,952 3,801,904 -0-
(4) a recommendation of the Board of Directors that the stockholders
approve amendments to the Chrysler Corporation 1991 Stock Compensation
Plan and a related performance plan to increase the number of shares of
Chrysler common stock available thereunder by 30 million shares and to
make certain other changes in order to preserve Chrysler's federal
income tax deduction with respect to performance based compensation paid
under the Plan in future years. The vote on this matter was as follows:
BROKER
FOR AGAINST ABSTAIN NON-VOTES
----------- ----------- --------- ---------
539,115,208 80,837,509 4,477,910 -0-
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Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - CONTINUED
(5) a stockholder proposal related to cumulative voting in the election
of directors. The vote on this matter was as follows:
BROKER
FOR AGAINST ABSTAIN NON-VOTES
----------- ----------- ---------- ----------
113,148,660 391,036,515 32,221,050 88,024,402
(6) a stockholder proposal requesting that Chrysler Corporation endorse
the coalition for Environmentally Responsible Economies ("CERES")
Principles for corporate environmental accountability. The vote on this
matter was as follows:
BROKER
FOR AGAINST ABSTAIN NON-VOTES
----------- ----------- ---------- ----------
39,414,980 454,134,594 42,856,651 88,024,402
13
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Item 5. OTHER INFORMATION SUPPLEMENTAL INFORMATION
CHRYSLER (WITH CFC AND CAR RENTAL OPERATIONS ON AN EQUITY BASIS)
STATEMENT OF EARNINGS (unaudited)
For the Three and Six Months Ended June 30, 1997 and 1996
(In millions of dollars)
Three Months Ended Six Months Ended
-------------------- --------------------
1997 1996 1997 1996
------- ------- ------- -------
Sales of manufactured products $13,671 $15,103 $28,932 $29,277
Equity in earnings of unconsolidated
subsidiaries and affiliates 176 97 309 257
Interest income and other revenues 206 202 407 374
------- ------- ------- -------
TOTAL REVENUES 14,053 15,402 29,648 29,908
------- ------- ------- -------
Costs, other than items below 11,197 11,737 23,063 22,708
Depreciation and special tools amortization 659 558 1,300 1,141
Selling and administrative expenses 1,016 1,033 2,015 1,945
Employee retirement benefits 304 299 626 605
Interest expense 66 55 129 119
------- ------- ------- -------
TOTAL EXPENSES 13,242 13,682 27,133 26,518
------- ------- ------- -------
EARNINGS BEFORE INCOME TAXES 811 1,720 2,515 3,390
Provision for income taxes 328 683 1,003 1,348
------- ------- ------- -------
NET EARNINGS $ 483 $ 1,037 $ 1,512 $ 2,042
======= ======= ======= =======
This Supplemental Information does not present the results of operations of
Chrysler in accordance with generally accepted accounting principles. This
Supplemental Information reflects the results of operations of Chrysler with
its investments in Chrysler Financial Corporation ("CFC") and short-term
vehicle rental subsidiaries (the "Car Rental Operations") accounted for on an
equity basis rather than as consolidated subsidiaries and, therefore, does not
comply with Statement of Financial Accounting Standards ("SFAS") No. 94,
"Consolidation of All Majority-Owned Subsidiaries." Because the operations of
CFC and the Car Rental Operations are different in nature from Chrysler's
manufacturing operations, management believes that this disaggregated financial
data enhances an understanding of the consolidated financial statements.
14
17
Item 5. OTHER INFORMATION - CONTINUED
SUPPLEMENTAL INFORMATION
CHRYSLER (WITH CFC AND CAR RENTAL OPERATIONS ON AN EQUITY BASIS)
BALANCE SHEET (unaudited)
(In millions of dollars)
1997 1996
--------- ---------------------------
June 30 Dec. 31 June 30
--------- -------- --------
ASSETS:
Cash and cash equivalents $ 5,013 $ 4,825 $ 5,327
Marketable securities 2,027 2,122 2,216
-------- -------- --------
Total cash, cash equivalents and marketable securities 7,040 6,947 7,543
Accounts receivable - trade and other 1,103 630 2,156
Inventories 5,053 4,364 4,640
Prepaid employee benefits, taxes and other expenses 1,627 1,893 670
Property and equipment 14,429 13,877 12,178
Special tools 4,144 3,924 3,492
Investments in and advances from/to unconsolidated subsidiaries
and affiliated companies 2,873 2,874 3,699
Intangible assets 1,596 1,627 1,518
Deferred tax assets 1,727 1,624 1,749
Other noncurrent assets 5,930 5,448 5,658
-------- -------- --------
TOTAL ASSETS $ 45,522 $ 43,208 $ 43,303
======== ======== ========
LIABILITIES:
Accounts payable $ 8,444 $ 8,238 $ 8,133
Accrued liabilities and expenses 9,076 8,525 8,203
Short-term debt 357 346 344
Payments due within one year on long-term debt 533 22 47
Long-term debt 1,766 1,206 1,747
Accrued noncurrent employee benefits 9,666 9,365 9,327
Other noncurrent liabilities 4,120 3,935 4,080
-------- -------- --------
TOTAL LIABILITIES 33,962 31,637 31,881
-------- -------- --------
SHAREHOLDERS' EQUITY: (shares in millions)
Preferred stock - $1 per share par value; authorized
20.0 shares; Series A Convertible Preferred Stock;
issued and outstanding: 1997 - 0.02; 1996 - 0.04 and 0.06 shares,
respectively (aggregate liquidation preference 1997 - $8 million;
1996 - $21 million and $32 million, respectively) * * *
Common stock - $1 per share par value; authorized
1,000.0 shares; issued: 1997 - 823.1; 1996 - 821.6 shares
and 820.4 shares, respectively 823 822 820
Additional paid-in capital 5,169 5,129 5,117
Retained earnings 9,793 8,829 7,816
Treasury stock - at cost: 1997 - 148.6 shares;
1996 - 119.1 and 91.8 shares, respectively (4,225) (3,209) (2,331)
-------- -------- --------
TOTAL SHAREHOLDERS' EQUITY 11,560 11,571 11,422
-------- -------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 45,522 $ 43,208 43,303
======== ======== ========
* Less than $1 million
This Supplemental Information does not present the financial position of
Chrysler in accordance with generally accepted accounting principles. This
Supplemental Information 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 and, therefore, 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 from Chrysler's
manufacturing operations, management believes that this disaggregated financial
data enhances an understanding of the consolidated financial statements.
15
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Item 5. OTHER INFORMATION - CONTINUED
SUPPLEMENTAL INFORMATION
CHRYSLER (WITH CFC AND CAR RENTAL OPERATIONS ON AN EQUITY BASIS)
CONDENSED STATEMENT OF CASH FLOWS (unaudited)
For the Six Months Ended June 30, 1997 and 1996
(In millions of dollars)
1997 1996
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 2,662 $ 3,347
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities (390) (1,451)
Sales and maturities of marketable securities 481 1,112
Expenditures for property and equipment (1,354) (1,255)
Expenditures for special tools (808) (473)
Purchases of vehicle operating leases (131) (8)
Proceeds from sale of nonautomotive assets -- 476
Other 127 56
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (2,075) (1,543)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in short-term debt 11 74
Proceeds from long-term borrowings 1,088 14
Payments on long-term borrowings (11) (18)
Change in advances from CFC 47 --
Repurchases of common stock (1,007) (1,110)
Dividends paid (560) (455)
Other 33 38
-------- --------
NET CASH USED IN FINANCING ACTIVITIES (399) (1,457)
-------- --------
Change in cash and cash equivalents 188 347
Cash and cash equivalents at beginning of period 4,825 4,980
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 5,013 $ 5,327
======== ========
This Supplemental Information does not present the cash flows of Chrysler in
accordance with generally accepted accounting principles. This Supplemental
Information 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 and, therefore, does not comply with SFAS No. 94,
"Consolidation of All Majority-Owned Subsidiaries." Because the operations of
CFC and the Car Rental Operations are different in nature from Chrysler's
manufacturing operations, management believes that this disaggregated financial
data enhances an understanding of the consolidated financial statements.
16
19
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The exhibits filed with this Report are listed in the Exhibit Index
which immediately precedes such exhibits.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the three months ended
June 30, 1997.
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20
CONFORMED
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CHRYSLER CORPORATION
------------------------------
(Registrant)
Date: July 11, 1997 By J. D. Donlon, III
-------------------------
J. D. Donlon, III
Vice President and Controller
(Principal Accounting Officer)
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21
EXHIBIT INDEX
For Quarterly Report on Form 10-Q for the
Quarterly Period Ended June 30, 1997
EXHIBIT
4-E Copy of $2,550,000,000 Revolving Credit Agreement, dated as of April 24,
1997, among Chrysler Corporation, Chrysler Canada Ltd., the several
Banks party to the Agreement, Royal Bank of Canada, as Canadian
Administrative Agent, and The Chase Manhattan Bank, as Administrative
Agent for the Banks. (Filed with this report.)
10-A-12 Copy of Chrysler Corporation 1991 Stock Compensation Plan, as amended
on May 15, 1997. (Filed with this report.)
10-B-6 Copy of Chrysler Corporation Incentive Compensation Plan, as amended
on May 15, 1997. (Filed with this report.)
10-B-7 Copy of Chrysler Corporation Long-Term Incentive Plan, as amended on
May 15, 1997. (Filed with this report.)
10-B-8 Copy of Chrysler Corporation Long-Term Performance Plan, as amended on
May 15, 1997. (Filed with this report.)
11 Statement regarding computation of earnings per common share. (Filed
with this report.)
15A Letter, dated July 11, 1997, re unaudited interim information. (Filed
with this report.)
15B Letter, dated July 11, 1997, re unaudited interim information. (Filed
with this report.)
27 Financial Data Schedule for the six months ended June 30, 1997. (Filed
with this report.)
19