UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): JANUARY 28, 2004 CREDIT ACCEPTANCE CORPORATION (Exact Name of Registrant as Specified in its Charter) Commission File Number 000-20202 MICHIGAN 38-1999511 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 25505 W. TWELVE MILE ROAD, SUITE 3000 48034-8339 SOUTHFIELD, MICHIGAN (Zip Code) (Address of Principal Executive Offices) Registrant's telephone number, including area code: (248) 353-2700
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. 99.1 Press Release dated January 28, 2004 ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On January 28, 2004, Credit Acceptance Corporation (the "Company") issued a press release announcing its financial results for the three months and year ended December 31, 2003. The press release, dated January 28, 2004, is attached as Exhibit 99.1 to this Form 8-K. The financial information included in the press release includes a presentation of net income excluding certain adjustments, in addition to the presentation of the Company's reported net income. The Company believes this information is helpful to investors in measuring the performance of the business, in that excluding the impact of items that are deemed unlikely to recur and foreign exchange losses on forward contracts more accurately reflects the financial performance of the business. The financial information included in the press release also includes a return on capital analysis, which provides an additional perspective on the financial performance of the Company. The Company believes this information provides a useful measurement of how effectively the Company is utilizing its capital. Finally, the financial information included in the press release includes a presentation of economic profit. Management uses economic profit to assess the Company's performance and the amount of value created for shareholders as well as to make capital allocation decisions. The Company believes this information is important to shareholders because it allows shareholders to compare the returns earned by the Company investing capital in its business with the return they could expect if the Company returned capital to shareholders and they invested in other securities. SIGNATURES 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 hereunto duly authorized. CREDIT ACCEPTANCE CORPORATION (Registrant) By: /s/ Douglas W. Busk ----------------------- Douglas W. Busk Chief Financial Officer and Treasurer January 30, 2004
INDEX OF EXHIBITS EXHIBIT NO. DESCRIPTION ----------- ---------------------------------------------- 99.1 Press Release dated January 28, 2004.
EXHIBIT 99.1 [CREDIT ACCEPTANCE LOGO] SILVER TRIANGLE BUILDING 25505 WEST TWELVE MILE ROAD - SUITE 3000 SOUTHFIELD, MI 48034-8339 (248) 353-2700 WWW.CREDITACCEPTANCE.COM NEWS RELEASE FOR IMMEDIATE RELEASE DATE: JANUARY 28, 2004 INVESTOR RELATIONS: DOUGLAS W. BUSK CHIEF FINANCIAL OFFICER (248) 353-2700 EXT. 432 IR@CREDITACCEPTANCE.COM NASDAQ SYMBOL: CACC CREDIT ACCEPTANCE ANNOUNCES: - 4TH QUARTER EARNINGS - 2003 EARNINGS SOUTHFIELD, MICHIGAN -- JANUARY 28, 2004 -- CREDIT ACCEPTANCE CORPORATION (NASDAQ:CACC) Credit Acceptance Corporation (the "Company") announced consolidated net income for the three months ended December 31, 2003 of $9,762,000 or $0.22 per diluted share compared to $5,090,000 or $0.12 per diluted share for the same period in 2002. For the year ended December 31, 2003, consolidated net income was $28,181,000 or $0.65 per diluted share compared to $28,365,000 or $0.65 per diluted share for the same period in 2002. Excluding the impact of one-time items and foreign exchange losses on forward contracts, consolidated net income for the three months and year ended December 31, 2003 was $10,584,000 or $0.24 per diluted share and $36,543,000 or $0.84 per diluted share, respectively, compared to $4,798,000 or $0.11 per diluted share and $26,800,000 or $0.62 per diluted share for the same periods in 2002. As a result of the decision in the second quarter of 2003 to stop loan originations in the United Kingdom and Canada and the decision to stop lease originations in early 2002, the Company's sole active business unit consists of providing "guaranteed credit approval" through a network of automobile dealer-partners located in the United States.
SEGMENT INFORMATION (Dollars in thousands, except THREE MONTHS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31, per share data) ------------------------------------ ----------------------------------- 2003 2002 % Change 2003 2002 % Change ------------ --------- -------- ---------- --------- -------- NET INCOME (LOSS) United States (1), (2) $ 8,689 $ 4,835 79.7 % $ 33,014 $ 23,790 38.8 % United Kingdom (3), (4) 781 800 (2.4) (4,646) 6,277 (174.0) Automobile Leasing 216 (531) 140.7 (323) (1,824) 82.3 Other 76 (14) 642.9 136 122 11.5 ------------ --------- ---------- ---------- Consolidated $ 9,762 $ 5,090 91.8 % $ 28,181 $ 28,365 (0.6)% ============ ========= ========== ========== NET INCOME (LOSS) PER DILUTED SHARE United States (1), (2) $ 0.20 $ 0.11 81.8 % $ 0.77 $ 0.55 40.0 % United Kingdom (3), (4) 0.02 0.02 0.0 (0.11) 0.14 (178.6) Automobile Leasing 0.00 (0.01) 100.0 (0.01) (0.04) 75.0 Other 0.00 0.00 0.0 0.00 0.00 0.0 ------------ --------- ---------- ---------- Consolidated $ 0.22 $ 0.12 83.3 % $ 0.65 $ 0.65 0.0 % ============ ========= ========== ========== (1) For the three months and year ended December 31, 2003, net income includes: a foreign currency exchange loss due to the fair value recognition of forward contracts associated with the anticipated cash flows from the United Kingdom operation, which decreased net income by $1,129,000 after-tax, or $0.03 per diluted share, for the three month period and $1,831,000 after-tax, or $0.04 per diluted share, for the year; and a reduction in Michigan single business tax expense resulting from a reduction in the amount of income apportioned to the state of Michigan, which increased net income by $307,000 after-tax, or $0.01 per diluted share. For the year ended December 31, 2003, net income also includes interest income from the Internal Revenue Service, which increased net income by $400,000 after-tax, or $0.01 per diluted share. (2) For the three months and year ended December 31, 2002, net income includes: a reduction in state tax related expense resulting from the re-characterization of income, which increased net income by $462,000 after-tax, or $0.01 per diluted share, for the three month period and $1,425,000 after-tax, or $0.03 per diluted share, for the year; an adjustment to federal tax related expense related to repatriation of earnings in the United Kingdom, which increased net income by $570,000 after-tax, or $0.02 per diluted share, for the three month period and decreased net income by $2,994,000 after-tax, or $0.07 per diluted share, for the year; and a loss on the disposal of computer hardware, which decreased net income by $740,000 after-tax, or $0.02 per diluted share. Net income for the year ended December 31, 2002 also includes interest income from the Internal Revenue Service, which increased net income by $3,127,000 after-tax, or $0.07 per diluted share. (3) For the year ended December 31, 2003, net income includes impairment and other expenses associated with the decision to liquidate the United Kingdom operation, which decreased net income by $7,238,000 after-tax, or $0.17 per diluted share. (4) For the year ended December 31, 2002, net income includes a change in ancillary product revenue recognition policy, which increased net income by $747,000 after-tax, or $0.02 per diluted share. RECONCILIATION OF REPORTED NET INCOME TO ADJUSTED NET INCOME The following table reconciles the reported net income and adjusted net income (reported net income excluding certain adjustments) for the three months and years ended December 31, 2003 and 2002: THREE MONTHS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31, ------------------------------------ -------------------------------------- (Dollars in thousands, except per share data) 2003 2002 2003 2002 --------------- ----------------- ----------------- --------------- Reported net income $ 9,762 $ 5,090 $ 28,181 $ 28,365 Foreign exchange loss due to forward contracts 1,129 - 1,831 - Reduction in Michigan single business tax (307) - (307) - United Kingdom impairment expenses - - 7,238 - Interest income from Internal Revenue Service - - (400) (3,127) 2002 tax items, net - (1,032) - 1,569 Loss on disposal of computer hardware - 740 - 740 Ancillary product revenue recognition policy change - - - (747) ------------ ------------ ----------------- --------------- Adjusted net income $ 10,584 $ 4,798 $ 36,543 $ 26,800 Diluted weighted average shares outstanding 43,958,520 42,852,646 43,409,007 43,362,741 Adjusted net income per diluted share $ 0.24 $ 0.11 $ 0.84 $ 0.62 ============ ============== ================= ===============
Results for the three months and year ended December 31, 2003 include an expense of $1,129,000 after-tax, or $0.03 per diluted share and $1,831,000 after-tax, or $0.04 per diluted share, respectively, related to foreign currency exchange losses from forward contracts entered into during the third quarter. From the date the contracts were entered into, the weakening of the United States dollar versus the British pound sterling caused a reduction in the fair value of the forward contracts and an approximately equal increase in the amount of expected future cash flows. For the quarter ended December 31, 2003, the amount of the loss recognized by the Company on these forward contracts was offset by an approximately equal increase in shareholders' equity. The Company intends to utilize proceeds from businesses being liquidated to: (i) fund dealer-partner advances on loans originated in the United States and (ii) fund share repurchases. During the three months ended December 31, 2003, the Company received $13.6 million in liquidation proceeds and made share repurchases of $477,000. Subsequent to December 31, 2003, the Company made additional share repurchases of $37.4 million through a modified Dutch auction tender offer. Detail of expected future net liquidation proceeds follows: (Dollars in thousands) AS OF DECEMBER 31, 2003 ------------------------ United Kingdom $ 30,100 Canada 4,200 Automobile Leasing 2,500 -------- $ 36,800 ======== UNITED STATES LOAN ORIGINATIONS (Dollars in thousands) THREE MONTHS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31, ----------------------------------------- --------------------------------------------- 2003 2002 % Change 2003 2002 % Change ------------- ------------- ----------- ------------- ------------- --------------- Loan originations $ 177,678 $ 130,616 36.0% $ 785,667 $ 571,690 37.4% Number of loans originated 13,847 10,759 62,334 49,650 Number of active dealer-partners (1) 763 555 916 789 Loans per active dealer-partner 18.1 19.4 68.1 62.9 Average loan size $ 12.8 $ 12.1 $ 12.6 $ 11.5 (1) Active dealer-partners are dealer-partners who submitted at least one loan during the period. The increase in loan originations in the United States in 2003 is due to: (i) an increase in the number of active dealer-partners due to increased dealer-partner enrollments and reduced levels of dealer-partner attrition, (ii) a continued increase in the number of loans per active dealer-partner and (iii) an increase in the average loan size. The Company made no material changes in credit policy or pricing in the fourth quarter, other than routine changes designed to maintain current profitability levels. Historically, the Company has experienced an adverse change in the profitability of loan originations during periods of high growth. While the growth rates experienced in the United States in 2003 are higher than the Company's expected long-term growth rate, the Company believes that the investments in infrastructure in 2002, combined with decreases in loan origination volumes in 2002, have adequately prepared the Company for this growth.
RETURN ON CAPITAL ANALYSIS Return on capital is equal to net operating profit after-tax (net income plus interest expense after-tax) divided by average capital as follows: (Dollars in thousands) THREE MONTHS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31, ------------------------------ --------------------------- 2003 2002 2003 2002 -------- -------- -------- -------- Net income $ 9,762 $ 5,090 $ 28,181 $ 28,365 Interest expense $ 2,793 $ 1,932 $ 8,057 $ 9,058 (1 - tax rate) 65.0% 65.0% 65.0% 65.4% -------- -------- -------- -------- Interest expense after-tax $ 1,815 $ 1,256 $ 5,237 $ 5,920 -------- -------- -------- -------- Net operating profit after-tax $ 11,577 $ 6,346 $ 33,418 $ 34,285 ======== ======== ======== ======== Average capital $457,516 $448,696 $443,150 $469,423 ======== ======== ======== ======== Return on capital 10.1% 5.7% 7.5% 7.3% Adjusted return on capital (1) 10.8% 5.4% 9.4% 7.0% (1) Adjusted return on capital is calculated the same as unadjusted but utilizes adjusted net income as presented in the reconciliation of reported net income to adjusted net income table. The increase in the return on capital was the result of an increase in the percentage of total capital allocated to the Company's United States business segment, the business segment which generates the highest return on capital, and an increase in the return on capital in the United States business segment. ECONOMIC PROFIT Economic profit represents net operating profit after-tax less an imputed cost of equity. Economic profit measures how efficiently the Company utilizes its total capital, both debt and equity. The following table presents the calculation of the Company's economic profit (loss) for the periods indicated (dollars in thousands, except per share data): THREE MONTHS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31, ------------------------------ ------------------------------ 2003 2002 2003 2002 ------------ ------------ ------------ ------------ ECONOMIC PROFIT (LOSS) Net income (1) $ 9,762 $ 5,090 $ 28,181 $ 28,365 Imputed cost of equity at 10% (2) (8,771) (8,035) (33,938) (30,790) ------------ ------------ ------------ ------------ Total economic profit (loss) $ 991 $ (2,945) $ (5,757) $ (2,425) Diluted weighted average shares outstanding 43,958,520 42,852,646 43,409,007 43,362,741 Economic profit (loss) per diluted share (3) $ 0.02 $ (0.07) $ (0.13) $ (0.06) Adjusted economic profit (loss) (4) $ 1,813 $ (3,237) $ 2,605 $ (3,990) Adjusted economic profit (loss) per diluted share (4) $ 0.04 $ (0.08) $ 0.06 $ (0.09) (1) Consolidated net income from the Consolidated Income Statements. (2) Cost of equity is equal to 10% (on an annual basis) of average shareholders' equity, which was $350,836,000 and $339,378,000 for the three months and year ended December 31, 2003, respectively, and $321,391,000 and $307,895,000 for the same periods in 2002, respectively. (3) Economic profit (loss) per share equals the economic profit (loss) divided by weighted average number of shares outstanding. (4) Adjusted economic profit (loss) and adjusted economic profit (loss) per diluted share are calculated the same as unadjusted but utilize adjusted net income as presented in the reconciliation of reported net income to adjusted net income table.
Cautionary Statement Regarding Forward Looking Information Certain statements in this release that are not historical facts, including those regarding the Company's future plans and objectives, are "forward-looking statements" within the meaning of the federal securities laws. These forward-looking statements represent our outlook only as of the date of this release. While the Company believes that its forward-looking statements are reasonable, actual results could differ materially since the statements are based on our current expectations, which are subject to risks and uncertainties. Factors that might cause such a difference include the following: increased competition from traditional financing sources and from non-traditional lenders, unavailability of funding at competitive rates of interest or the Company's potential inability to continue to obtain third party financing on favorable terms, the Company's potential inability to generate sufficient cash flow to service its debt and fund its future operations, adverse changes in applicable laws and regulations, adverse changes in economic conditions, adverse changes in the automobile or finance industries or in the non-prime consumer finance market, the Company's potential inability to maintain or increase the volume of automobile loans, the Company's potential inability to accurately forecast and estimate future collections and historical collection rates and the associated default risk, the Company's potential inability to accurately estimate the residual values of leased vehicles, an increase in the amount or severity of litigation against the Company, the loss of key management personnel, the effects of terrorist attacks and potential attacks, and various other factors discussed in the Company's reports filed with the Securities and Exchange Commission. Other factors not currently anticipated by management may also materially and adversely affect the Company's results of operations. The Company does not undertake, and expressly disclaims any obligation, to update or alter its forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law. Description of Credit Acceptance Corporation Credit Acceptance is a financial services company specializing in products and services for a network of automobile dealer-partners. Credit Acceptance provides its dealer-partners with financing sources for consumers with limited access to credit and delivers credit approvals instantly through the internet. Other dealer-partner services include marketing, sales training and a wholesale purchasing cooperative. Through its financing program, Credit Acceptance helps consumers change their lives by providing them an opportunity to strengthen and reestablish their credit standing by making timely monthly payments. Credit Acceptance is publicly traded on the NASDAQ National Market under the symbol CACC. For more information, visit www.creditacceptance.com.
CREDIT ACCEPTANCE CORPORATION CONSOLIDATED INCOME STATEMENTS (Dollars in thousands, except per share data) THREE MONTHS ENDED YEARS ENDED DECEMBER 31, DECEMBER 31, ------------------------------ ------------------------------ 2003 2002 2003 2002 -------------- -------------- -------------- -------------- REVENUE: Finance charges $ 26,668 $ 23,319 $ 103,125 $ 97,744 Lease revenue 1,061 2,900 6,432 16,101 Ancillary product income 5,062 3,518 19,397 16,437 Premiums earned 740 1,017 2,986 4,512 Other income 3,494 3,465 13,848 19,540 ------------- ------------- -------------- -------------- Total revenue 37,025 34,219 145,788 154,334 ------------- ------------- -------------- -------------- COSTS AND EXPENSES: General and administrative 4,673 6,662 20,034 24,551 Salaries and wages 8,572 6,906 33,655 29,042 Sales and marketing 1,948 2,079 8,494 7,623 Stock-based compensation expense 753 490 3,583 2,072 Provision for insurance and service contract claims (91) 138 546 1,861 Provision for credit losses 1,105 7,962 10,459 23,935 Depreciation of leased assets 642 1,911 4,210 9,669 United Kingdom asset impairment expense - - 10,493 - Interest 2,793 1,932 8,057 9,058 ------------- ------------- -------------- -------------- Total costs and expenses 20,395 28,080 99,531 107,811 ------------- ------------- -------------- -------------- Operating income 16,630 6,139 46,257 46,523 Foreign exchange loss (1,730) (2) (2,767) - ------------- ------------- -------------- -------------- Income before provision for income taxes 14,900 6,137 43,490 46,523 Provision for income taxes 5,138 1,047 15,309 18,158 ------------- ------------- -------------- -------------- Net income $ 9,762 $ 5,090 $ 28,181 $ 28,365 ============= ============= ============== ============== Net income per common share: Basic $ 0.23 $ 0.12 $ 0.67 $ 0.67 ============= ============= ============== ============== Diluted $ 0.22 $ 0.12 $ 0.65 $ 0.65 ============= ============= ============== ============== Weighted average shares outstanding: Basic 42,040,063 42,371,316 42,195,340 42,438,292 Diluted 43,958,520 42,852,646 43,409,007 43,362,741
CREDIT ACCEPTANCE CORPORATION CONSOLIDATED BALANCE SHEETS (Dollars in thousands) YEARS ENDED DECEMBER 31, --------------------------------------- 2003 2002 ---------------- ----------------- ASSETS: Cash and cash equivalents $ 36,044 $ 13,466 Investments -- held to maturity - 173 Loans receivable 872,970 770,069 Allowance for credit losses (17,615) (20,991) ---------------- ----------------- Loans receivable, net 855,355 749,078 ---------------- ----------------- Floorplan receivables, net 2,449 4,450 Lines of credit, net 2,023 3,655 Notes receivable, net (including $1,583 and $1,513 from affiliates as of December 31, 2003 and 2002, respectively) 2,090 3,899 Investment in operating leases, net 4,447 17,879 Property and equipment, net 18,503 19,951 Income taxes receivable 5,795 - Other assets 17,074 14,280 ---------------- ----------------- Total Assets $ 943,780 $ 826,831 ================ ================= LIABILITIES AND SHAREHOLDERS' EQUITY: LIABILITIES: Lines of credit $ - $ 43,555 Secured financing 100,000 58,153 Mortgage note 5,418 6,195 Capital lease obligations 1,049 1,938 Accounts payable and accrued liabilities 33,117 28,341 Dealer holdbacks, net 423,861 347,040 Deferred income taxes, net 22,770 10,058 Income taxes payable - 6,094 ---------------- ----------------- Total Liabilities 586,215 501,374 ---------------- ----------------- SHAREHOLDERS' EQUITY: Common stock 421 423 Paid-in capital 125,078 124,772 Retained earnings 227,039 198,858 Accumulated other comprehensive income -- cumulative translation adjustment 5,027 1,404 --------------- ---------------- Total Shareholders' Equity 357,565 325,457 ---------------- ----------------- Total Liabilities and Shareholders' Equity $ 943,780 $ 826,831 ================ =================
CREDIT ACCEPTANCE CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS) YEARS ENDED DECEMBER 31, ------------------------ 2003 2002 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 28,181 $ 28,365 Adjustments to reconcile net cash provided by operating activities: Provision for credit losses 10,459 23,935 Depreciation 4,469 4,718 Depreciation of leased assets 4,210 9,669 Loss on retirement of property and equipment 73 1,417 Foreign currency loss on forward contracts 2,817 -- Provision for deferred income taxes 12,712 1,838 Stock-based compensation 3,583 2,072 United Kingdom asset impairment 10,493 -- Change in operating assets and liabilities: Accounts payable and accrued liabilities 1,081 (11,106) Income taxes payable (6,094) 996 Income taxes receivable (5,795) -- Lease payments receivable 619 (1,031) Unearned insurance premiums, insurance reserves and fees (837) (2,850) Deferred dealer enrollment fees, net 878 140 Other assets (2,794) 282 --------- --------- Net cash provided by operating activities 64,055 58,445 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from maturities of investments - held to maturity 173 -- Principal collected on loans receivable 348,932 339,371 Advances to dealers (366,747) (285,612) Payments of dealer holdbacks (28,954) (32,890) Operating lease acquisitions -- (874) Deferred costs from lease acquisitions -- (201) Operating lease liquidations 6,900 12,081 Decrease in floorplan receivables 1,596 1,940 Decrease (increase) in lines of credit 969 (273) Increase in notes receivable -- affiliates (70) (5) Decrease in notes receivable -- non-affiliates 1,848 706 Purchases of property and equipment (3,094) (6,440) --------- --------- Net cash provided by (used in) investing activities (38,447) 27,803 --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Net repayments under lines of credit (43,555) (29,660) Proceeds from secured financings 100,000 103,551 Repayments of secured financings (58,153) (167,794) Proceeds under capital lease obligations 32 2,249 Principal payments under capital lease obligations (921) (311) Repayment of mortgage note (777) (723) Repurchase of common stock (5,316) (7,018) Proceeds from stock options exercised 2,037 3,608 --------- --------- Net cash used in financing activities (6,653) (96,098) --------- --------- Effect of exchange rate changes on cash 3,623 7,543 --------- --------- Net increase (decrease) in cash and cash equivalents 22,578 (2,307) Cash and cash equivalents, beginning of period 13,466 15,773 --------- --------- Cash and cash equivalents, end of period $ 36,044 $ 13,466 ========= =========
CREDIT ACCEPTANCE CORPORATION SUMMARY FINANCIAL DATA (DOLLARS IN THOUSANDS) LOANS RECEIVABLE The following table summarizes the composition of loans receivable: AS OF DECEMBER 31, --------------------------- 2003 2002 ----------- --------- Gross loans receivable $ 1,033,234 $ 910,417 Unearned finance charges (157,707) (136,954) Unearned insurance premiums, insurance reserves and fees (2,557) (3,394) ----------- --------- Loans receivable $ 872,970 $ 770,069 =========== ========= Non-accrual loans $ 201,151 $ 212,373 =========== ========= Non-accrual loans as a percent of gross loans receivable 19.5% 23.3% =========== ========= A summary of changes in gross loans receivable is as follows: THREE MONTHS ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, ---------------------------- ---------------------------- 2003 2002 2003 2002 ------------ ------------- ------------ ------------- Balance, beginning of period $1,032,185 $ 932,713 $ 910,417 $ 900,415 Gross amount of loans accepted 177,678 140,108 814,182 625,385 Net cash collections on loans (115,299) (106,390) (457,406) (440,851) Charge-offs * (73,920) (59,412) (261,365) (186,788) Recoveries 7,048 - 14,168 - Net change in repossessed collateral (1,780) (211) 156 (2,212) Currency translation 7,322 3,609 13,082 14,468 ------------ ------------- ------------- -------------- Balance, end of period $1,033,234 $ 910,417 $1,033,234 $ 910,417 ============ ============= ============= ============== * Charge-offs presented net of recoveries for activity prior to July 1, 2003
CREDIT ACCEPTANCE CORPORATION SUMMARY FINANCIAL DATA (DOLLARS IN THOUSANDS) LOANS RECEIVABLE -- (CONCLUDED) A summary of the change in the allowance for credit losses is as follows: THREE MONTHS ENDED YEARS ENDED DECEMBER 31, DECEMBER 31, ---------------------- ---------------------- 2003 2002 2003 2002 -------- -------- -------- -------- Balance, beginning of period $ 14,883 $ 17,568 $ 20,991 $ 13,906 Provision for loan losses 1,005 5,864 7,657 15,443 Charge-offs * (1,548) (2,537) (17,736) (8,800) Recoveries 2,927 -- 6,160 -- Currency translation 348 96 543 442 -------- -------- -------- -------- Balance, end of period $ 17,615 $ 20,991 $ 17,615 $ 20,991 ======== ======== ======== ======== * Charge-offs presented net of recoveries for periods prior to July 1, 2003 INVESTMENT IN OPERATING LEASES The following table summarizes the composition of investment in operating leases, net: AS OF DECEMBER 31, ---------------------- 2003 2002 -------- -------- Gross leased assets $ 10,274 $ 26,821 Accumulated depreciation (6,664) (12,304) Gross deferred costs 1,513 3,956 Accumulated amortization of deferred costs (1,307) (2,706) Lease payments receivable 631 2,112 -------- -------- Investment in operating leases $ 4,447 $ 17,879 ======== ========
CREDIT ACCEPTANCE CORPORATION SUMMARY FINANCIAL DATA (DOLLARS IN THOUSANDS) INVESTMENT IN OPERATING LEASES -- (CONCLUDED) A summary of changes in the investment in operating leases is as follows: THREE MONTHS ENDED YEARS ENDED DECEMBER 31, DECEMBER 31, --------------------- ---------------------- 2003 2002 2003 2002 ------- -------- -------- -------- Balance, beginning of period $ 6,364 $ 23,222 $ 17,879 $ 42,774 Gross operating leases originated -- -- -- 1,075 Depreciation of operating leases (642) (1,911) (4,210) (9,669) Lease payments receivable 1,041 2,995 6,513 16,062 Collections on operating leases (1,145) (2,883) (7,132) (15,031) Provision for lease losses -- (1,231) (1,703) (5,251) Operating lease liquidations (1,250) (2,331) (7,323) (12,100) Currency translation 79 18 423 19 ------- -------- -------- -------- Balance, end of period $ 4,447 $ 17,879 $ 4,447 $ 17,879 ======= ======== ======== ======== DEALER HOLDBACKS The following table summarizes the composition of dealer holdbacks: AS OF DECEMBER 31, ------------------------ 2003 2002 --------- --------- Dealer holdbacks $ 828,720 $ 734,625 Less: advances (404,859) (387,585) --------- --------- Dealer holdbacks, net $ 423,861 $ 347,040 ========= =========