UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004

FORM 10-Q

Commission file number: 1-3754

GENERAL MOTORS ACCEPTANCE CORPORATION
(Exact name of registrant as specified in its charter)

200 Renaissance Center
P.O. Box 200 Detroit, Michigan
48265-2000
(Address of principal executive offices)
(Zip Code)

(313) 556-5000
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes o No x

As of March 31, 2004, there were outstanding 10 shares of the issuer’s $.10 par value common stock.

Reduced Disclosure Format

The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with the reduced disclosure format.

INDEX
General Motors Acceptance Corporation

* Item is omitted pursuant to the Reduced Disclosure Format, as set forth on the cover page of this filing.

2

Consolidated Statement of Income (unaudited)
General Motors Acceptance Corporation

The Notes to the Consolidated Financial Statements are an integral part of these statements.

3

Consolidated Balance Sheet (unaudited)
General Motors Acceptance Corporation

The Notes to the Consolidated Financial Statements are an integral part of these statements.

4

Consolidated Statement of Changes in Stockholder’s Equity (unaudited)
General Motors Acceptance Corporation

The Notes to the Consolidated Financial Statements are an integral part of these statements.

5

Consolidated Statement of Cash Flows (unaudited)
General Motors Acceptance Corporation

The Notes to the Consolidated Financial Statements are an integral part of these statements.

6

Notes to Consolidated Financial Statements (unaudited)
General Motors Acceptance Corporation

General Motors Acceptance Corporation (GMAC or the Company) is a wholly-owned subsidiary of General Motors Corporation (General Motors or GM). The consolidated financial statements include the accounts of the Company, its majority-owned subsidiaries and those variable interest entities (VIEs) where GMAC is the primary beneficiary, after eliminating intercompany balances and transactions.

The consolidated financial statements as of March 31, 2004 and for the three-month periods ended March 31, 2004 and 2003 are unaudited, but in management’s opinion include all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. Certain prior period amounts have been reclassified to conform to the current period presentation.

The interim period consolidated financial statements, including the related notes, are condensed and do not include all disclosures required by generally accepted accounting principles in the United States of America. These interim period consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements, which are included in the GMAC Annual Report on Form 10-K for the year ended December 31, 2003, filed with the United States Securities and Exchange Commission (SEC) on March 9, 2004.

Recently Issued Accounting Standards

FASB Interpretation No. 46R — In December 2003, the FASB released a revision to Interpretation No. 46, Consolidation of Variable Interest Entities (FIN 46R) to clarify some of the provisions of the original interpretation (FIN 46) and to exempt certain entities from its requirements. FIN 46R provides special effective date provisions to enterprises that fully or partially applied FIN 46 prior to the issuance of the revised interpretation. In particular, entities that had already adopted FIN 46 were not required to adopt FIN 46R until the quarterly reporting period ended March 31, 2004. Since GMAC adopted FIN 46 effective July 1, 2003, the Company adopted FIN 46R for the period ended March 31, 2004. Among other matters, FIN 46R changed the primary beneficiary analysis of variable interest entities as it relates to fees paid to decision makers. However, these changes did not impact the conclusions of the Company’s primary beneficiary analysis previously reached under FIN 46 and, as such, the adoption of FIN 46R did not impact the Company’s financial condition or results of operations.

SAB 105 — In March 2004, the SEC issued Staff Accounting Bulletin 105, Application of Accounting Principles to Loan Commitments, that summarizes the views of the staff regarding the application of generally accepted accounting principles to loan commitments accounted for as derivative instruments. SAB 105 is effective for commitments to originate or purchase mortgage loans to be held for sale and for commitments to purchase loans to be held for investment (also referred to as interest rate lock commitments or IRLCs) that are entered into after March 31, 2004. SAB 105 provides specific guidance on the measurement of loan commitments accounted for at fair value, as it requires that fair value measurement exclude any expected future cash flows related to the customer relationship or loan servicing.

Prior to April 1, 2004, upon entering into the commitment, GMAC recognized loan commitments at fair value based on expected future gain on sale, including an estimate of the future MSR. For certain products, the future gain on sale (exclusive of MSR value) was known based on transparent pricing in an active secondary market and was recognized as a component of current period earnings. Any additional value associated with the loan commitments (including the future value of the MSR) was deferred and recognized in earnings at the time of actual loan sale. As a result of SAB 105, effective April 1, 2004 GMAC will no longer recognize the value of the commitment at the time of the rate lock. However, subsequent changes in value from the time of the lock will be recognized as assets or liabilities and as a component of current period earnings, as appropriate. The subsequent changes in fair value will exclude the component of future MSR value. Upon sale of the loan, the initial estimated value associated with the rate lock, along with the MSR, will be recognized as part of the gain on sale of the mortgage loan. The impact of adopting the provisions of SAB 105 will result in a deferral in the timing of recognizing the value of certain loan commitments but is not expected to have a material impact on the Company’s financial condition or results of operations.

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Notes to Consolidated Financial Statements (unaudited)
General Motors Acceptance Corporation

The following table presents the components of mortgage banking income.

(a)		Includes additions to the valuation allowance representing impairment considered to be temporary.
(b)		Includes SFAS 133 hedge ineffectiveness, amounts excluded from the hedge effectiveness calculation and the change in value of derivative financial instruments not qualifying for hedge accounting.
(c)		Represents net gains realized upon the sale of investment securities used to manage risk associated with mortgage servicing rights. Pretax unrealized losses on investment securities hedging MSRs (recorded in other comprehensive income, a component of shareholder’s equity) were $17.8 million at March 31, 2003. There were no securities in this portfolio at March 31, 2004.

Notes to Consolidated Financial Statements (unaudited)
General Motors Acceptance Corporation

The following table presents an analysis of the activity in the allowance for credit losses on finance receivables and loans.

(a)

Includes allowances related to the acquisitions of discounted loan portfolios, net of allowances removed upon securitization of the related finance receivables and loans, and the impacts of foreign currency translation.

The following table summarizes mortgage servicing rights activity and related amortization.

The following table summarizes the change in the valuation allowance for mortgage servicing rights:

(a)

Additions to the valuation allowance, which are charged against mortgage banking income, represent impairment considered to be temporary.

For a description of mortgage servicing rights and the related hedge strategy, refer to Notes 1 and 10 to the 2003 Annual Report on Form 10-K.

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Notes to Consolidated Financial Statements (unaudited)
General Motors Acceptance Corporation

Debt is presented below and is segregated between domestic and foreign based on the location of the office recording the transaction.

(a)

To adjust designated fixed rate debt to fair value in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities.

The following summarizes assets that are restricted as collateral for the payment of certain debt obligations primarily arising from securitization transactions accounted for as secured borrowings, repurchase agreements and other collateralized arrangements.

10

Notes to Consolidated Financial Statements (unaudited)
General Motors Acceptance Corporation

Liquidity facilities

Liquidity facilities represent additional funding sources, if required. The financial institutions providing the uncommitted facilities are not legally obligated to fund those facilities. The following table summarizes the liquidity facilities maintained by the Company.

(a)		The entire $8.5 is available for use by GMAC in the U.S., $0.8 is available for use by GMAC (UK) plc in Europe and $0.8 is available for use by GMAC International Finance B.V. in Europe. This facility serves primarily as backup for the Company’s unsecured commercial paper programs.
(b)		Includes a $1.3 secured master note program with a third-party financial institution, guaranteed by GMAC. The borrowing is currently unsecured; however, upon request by the financial institution or any assignee, the Mortgage Group is required to pledge mortgage servicing rights valued at 200% of the outstanding balance as collateral.
(c)		Relates to New Center Asset Trust (NCAT) and Mortgage Interest Networking Trust (MINT), which are non-consolidated qualified special purpose entities administered by GMAC for the purposes of purchasing assets as part of GMAC’s securitization and mortgage warehouse funding programs. These entities fund the purchases of assets through the issuance of asset-backed commercial paper and represent an important source of liquidity to the Company. At March 31, 2004, NCAT and MINT commercial paper outstandings were $10.2 and $3.1, respectively.
(d)		Consists primarily of credit facilities supporting operations in Canada, Europe, Latin America and Asia-Pacific.

In June 2003, GMAC renewed its syndicated multi-currency global credit facilities, including the liquidity facility for NCAT. The syndicated multi-currency global facility includes a $4.35 billion five year facility (expires June 2008) and a $4.15 billion 364-day facility (expires June 2004). The 364-day facility includes a term loan option which, if exercised by GMAC upon expiration, carries a one-year term. Additionally, a leverage covenant restricts the ratio of consolidated unsecured debt to total stockholder’s equity to no greater than 11:1, under certain conditions. More specifically, the covenant is only applicable on the last day of any fiscal quarter (other than the fiscal quarter during which a change in rating occurs) during such times as the Company has senior unsecured long-term debt outstanding, without third-party enhancement, which is rated BBB+ or less (by Standard & Poor’s), or Baa1 or less (by Moody’s). GMAC’s leverage covenant ratio was 8.5:1 at March 31, 2004, and the Company was therefore in compliance with this covenant. The leverage covenant calculation, excludes from debt those securitization transactions that are accounted for as on-balance sheet secured financings.

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Notes to Consolidated Financial Statements (unaudited)
General Motors Acceptance Corporation

In managing the interest rate and foreign exchange exposures of a multinational finance entity, GMAC utilizes a variety of interest rate and currency derivative financial instruments. In accordance with SFAS 133, as amended, GMAC records derivative financial instruments on the balance sheet as assets or liabilities, carried at fair value. Changes in fair value are accounted for depending on the use of the derivative financial instrument and whether it qualifies for hedge accounting treatment. Refer to GMAC’s 2003 Annual Report on Form 10-K for a more detailed description of GMAC’s use of and accounting for derivative financial instruments.

The following table summarizes the pre-tax earnings impact for each type of accounting hedge classification, segregated by the asset or liability hedged.

(a)

Amount represents the difference between the changes in the fair values of the currency swap net of the foreign currency revaluation of the related debt.

In addition, net gains on fair value hedges excluded from assessment of effectiveness totaled $82 million and $65 million for the first quarter of 2004 and 2003, respectively.

Balance Sheet

A summary of the balance sheet effect of transactions with GM and affiliated companies is as follows:

(a)		GMAC provides wholesale financing to certain dealerships owned by GM. These amounts are included in finance receivables and loans.
(b)		During 2000, GM entered into a sixteen-year lease arrangement with GMAC, under which GMAC agreed to fund and capitalize improvements to GM leased properties totaling $1.2 billion over four years. The leased properties and improvements are included in other assets.
(c)		Includes wholesale advances, subvention receivables, and notes payable, which are included in accrued expenses and other liabilities and debt.

In January 2004, GMAC assumed management and financial control of GM’s Brazilian financing operation (Banco GM or BGM), while GM maintained legal ownership. In addition to the ongoing management of the operation, GMAC receives the financial benefits and risks of ownership of BGM. As a result of entering into this arrangement, effective January 2004 GMAC began consolidating BGM, which previously had been consolidated by GM. The impact of the consolidation was reflected as a $129 million increase in capital, which represents the net assets of the Brazilian operations.

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Notes to Consolidated Financial Statements (unaudited)
General Motors Acceptance Corporation

Retail and lease contracts acquired by GMAC that included rate and residual subvention from GM, payable directly or indirectly to GM dealers, as a percent of total new retail and lease contracts acquired were as follows:

Income Statement

A summary of the effect of transactions with affiliated companies on GMAC’s income statement is as follows:

(a)		GM sponsors lease pull ahead programs whereby consumers are encouraged to terminate lease contracts early in conjunction with the acquisition of a new GM vehicle. Under these programs, GM waives the customer’s remaining payment obligation and compensates GMAC for the waived payments, adjusted based on the remarketing results associated with the underlying vehicle.
(b)		The settlement terms related to the wholesale financing of certain GM products are at shipment date. To the extent that wholesale settlements with GM are made prior to the expiration of transit, interest is received from GM.
(c)		GMAC of Canada, Limited administers operating lease receivables on behalf of GM of Canada Limited (GMCL) and receives a servicing fee, which is included in other income.
(d)		GMAC receives a servicing fee from GM related to the resale of rental car repurchases.
(e)		An agreement with GM provides for the reimbursement of certain selling expense incurred by GMAC on off-lease vehicles sold by GM at auction.

13

Notes to Consolidated Financial Statements (unaudited)
General Motors Acceptance Corporation

Financial results for GMAC’s operating segments are summarized below.

Operating Segments

(a)

GMAC North American Operations consists of automotive financing in the U.S. and Canada as well as commercial financing operations. GMAC International Operations consists of automotive financing and full service leasing in all other countries and Puerto Rico.

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Management’s Discussion and Analysis
General Motors Acceptance Corporation

GMAC is a leading global financial services firm with over $296 billion of assets and operations in 41 countries. Founded in 1919 as a wholly-owned subsidiary of General Motors Corporation, GMAC was established to provide GM dealers with the automotive financing necessary for the dealers to acquire and maintain vehicle inventories and to provide retail customers means by which to finance vehicle purchases through GM dealers. GMAC products and services have expanded beyond automotive financing and GMAC currently operates in three primary business segments — Financing, Mortgage and Insurance operations. Refer to GMAC’s Annual Report on Form 10-K for the year ended December 31, 2003 for a more complete description of the Company’s business segments, along with the products and services offered and the market competition.

Net income for GMAC’s segments is summarized as follows.

(a)

Includes North America and International operations business segments, separately identified in Note 8 to the Consolidated Financial Statements.

General Motors Acceptance Corporation (GMAC) recorded its highest first quarter earnings ever in the first quarter of 2004. Consolidated net income of $786 million was up $87 million from the $699 million earned in the same quarter of 2003.

For the quarter, net income from financing operations totaled $442 million, up $140 million from the $302 million earned in the prior year. The increase reflects lower credit loss provisions and improved off-lease remarketing results, which more than offset the unfavorable impact of lower net interest margins.

GMAC Mortgage Group, Inc. generated earnings of $253 million, down $118 million from the prior year first quarter record. These decreased earnings resulted from lower mortgage origination volume, reduced mortgage refinancing activity, and decreased pricing margins.

GMAC Insurance Holdings, Inc. generated net income of $91 million in the first quarter of 2004. Earnings were up $65 million from the same period in 2003, due to improved investment portfolio performance and continued growth in underwriting income.

     GMAC’s Financing operations offer a wide range of financial services and products (directly and indirectly) to retail automotive consumers, automotive dealerships, and other commercial businesses. These products and services include the purchase of installment sales contracts and leases, extension of term loans, dealer floorplan financing and other lines of credit, and factoring of receivables. Refer to pages 10-17 of the Company’s 2003 Annual Report on Form 10-K for further discussion of the business profile of GMAC’s Financing operations.

15

Management’s Discussion and Analysis
General Motors Acceptance Corporation

The following table summarizes the operating results of the Company’s Financing operations for the periods indicated. The amounts presented are before the elimination of balances and transactions with the Company’s other operating segments.

Continued asset growth combined with lower credit loss provisions and improved remarketing performance of off-lease vehicles contributed to the 46% increase in GMAC’s Financing operations 2004 first quarter income as compared to 2003. While the Company experienced improvements in credit and remarketing performance, operating results continued to be negatively affected by lower net interest margins. In addition, 2004 results benefited from favorable foreign currency movements (primarily the Euro relative to the U.S. dollar) in the Company’s International automotive operations.

As a result of higher asset levels, total financing revenue for the first quarter increased 7% as compared to 2003. Despite a reduction in financing volume, consumer assets levels increased as GM continued to utilize special rate financing programs as a marketing incentive. Commercial asset levels also increased as dealers experienced higher inventory levels in comparison to 2003. However, the increase in commercial receivables and loans was mitigated by decreased market interest rates, resulting in a net 4% decline in commercial financing revenue. Despite declines in the operating lease portfolio, operating lease revenue increased by 27% as compared to 2003. A large portion of this increase was due to the improved remarketing performance of off-lease vehicles. The remarketing results on disposal of operating leases terminated in the United States (which is reflected as a component of operating lease depreciation expense) increased from an average loss of $63 per vehicle in 2003 to an average gain of $461 per vehicle in 2004. The improvement in the remarketing performance was due to a combination of a reduced supply of used vehicles and lower initial residual values in the underlying leases. Also contributing to the 2004 growth in operating lease revenues were increased payments from GM for leases terminated early under GM sponsored “pull-ahead” programs. Under these marketing programs, consumers are encouraged to terminate leases early in conjunction with the acquisition of a new GM vehicle. As part of the program, GM waives the customer’s remaining payment obligation and compensates GMAC for the foregone revenue from the waived payments.

Interest and discount expense increased commensurate with the higher debt levels. Debt levels increased to fund the growth in the finance receivables and loans portfolio. Higher debt levels were also attributable to larger cash balances on hand which coincided with the Company’s decision to extend maturities on new debt issues as part of the Company’s overall liquidity and funding strategy. In the first quarter of 2004, GMAC’s unsecured borrowing spreads had declined significantly as compared to the first quarter of 2003. However, the wider credit spreads experienced over the past few years are reflected in the Company’s current portfolio borrowing costs and thereby continue to negatively impact GMAC’s net interest margins. Refer to the Funding and Liquidity section of this MD&A for further discussion.

The provision for credit losses decreased by $100 million as compared to 2003. The lower level of loss provisions reflects favorable consumer losses indicative of general improvements in the U.S. economy and stabilizing loss severity trends helped by strengthening in the used car market. Refer to the Credit Quality section of this MD&A for a further discussion of the credit of the Company’s financing portfolio.

The $109 million increase in other income was impacted by a variety of factors. A portion of the increase is attributable to the activity level of off-balance sheet securitization and sales transactions, which results in the recognition of gains at the time of the transaction. Additional favorable impacts were caused by market adjustments on derivatives used to facilitate off-balance sheet securitization transactions that do not qualify for hedge accounting treatment.

Total noninterest expense for the first quarter increased 4% from the prior year. Increases in compensation expense (partially attributable to increased pension and postretirement allocations from GM) were partially offset by reductions in operating expenses (caused by a decline in vehicle remarketing expenses consistent with the decreased activity). Financing operations’ 2004 first quarter effective tax rate declined, primarily due to favorable tax adjustments in the Company’s International Automotive financing operations.

16

Management’s Discussion and Analysis
General Motors Acceptance Corporation

Financing Volume

The following table summarizes GMAC’s new vehicle consumer financing volume, the Company’s share of GM retail sales, and GMAC’s wholesale financing of new vehicles and related share of GM sales to dealers. The 2004 International amounts reflect GM’s Brazilian financing operation (Banco GM or BGM), of which GMAC assumed management and financial control in January 2004 (refer to Note 7 for further details).