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): DECEMBER 20, 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 (I.R.S. Employer Identification No.) incorporation or organization) 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 ----------------- Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written Communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 7.01 REGULATION FD DISCLOSURE. Credit Acceptance Corporation is furnishing materials, included as Exhibit 99.1 to this report and incorporated herein by reference, which were prepared for inclusion on its investor relations website. Credit Acceptance Corporation is not undertaking to update these materials. This report should not be deemed an admission as to the materiality of any information contained in these materials. The information furnished in this report shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. 99.1 Materials added to website on or about December 20, 2004
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 Treasurer December 20, 2004
INDEX OF EXHIBITS EXHIBIT NO. DESCRIPTION - ----------- ----------- 99.1 Materials added to website on or about December 20, 2004
EXHIBIT 99.1 1. GREAT RESULTS...CONGRATULATIONS...ANY THOUGHTS ON GIVING SAME STORE DEALER PARTNER GROWTH RATE IN ORIGINATIONS? ALSO, YOU TALK ABOUT A MODEST CHANGE IN FORECAST THAT WOULD CAUSE A LARGE CHANGE IN THE VARIANCE BETWEEN THE COMPANY'S RECORDED NET INVESTMENT AND THE PRESENT VALUE OF ESTIMATED FUTURE CASH FLOWS...WHAT IS A MODEST CHANGE? IS THE .3% AND .5% FOR 2002 AND 2003 CONSIDERED MODEST? Same dealer-partner volumes, defined as unit volume for dealer-partners active in both the current period, and the same period of the prior year ("same dealer-partner volume") declined 6.8% for the nine months ended September 30, 2004 compared to the same period in 2003. The reason for the decline is not clear. We could reverse the decline by pricing more aggressively but, since overall volumes are near optimal, we have chosen not to do so. All things equal, we would prefer average dealer-partner volumes to be higher. The larger the impact we can make on our dealer-partner's profitability, the better our long-term prospects. As a result, a number of initiatives designed to improve dealer-partner volumes are in process. The second part of your question seeks clarification on what we meant by a "modest change". What we were trying to communicate was that investors should think carefully about the relationship between a percentage change in our forecast, and the dollar change in the variance between the recorded net investment and the present value of estimated cash flows. For example, if the present value of estimated cash flows were to decrease by 1%, and the recorded net investment did not change, the resulting $5.2 million decrease would reduce the variance between the recorded net investment and the present value of estimated cash flows by 12%. 2. THE EXCESS OF THE ESTIMATED PV OF FUTURE CASH FLOWS OVER THE RECORDED NET INVESTMENT INCREASED $3.1 MILLION FROM 6/30/04 TO 9/30/04. IS IT FAIR TO SAY THAT IN THE 3RD QTR, 2004 CAC'S TRUE (BUT NON-GAAP) ECONOMIC EARNINGS WERE 5 CENTS HIGHER PER SHARE (AFTER TAX) THAN WHAT WAS REPORTED? We do not feel comfortable with your conclusion that our "true" earnings for the quarter were $.05 higher. With one important caveat, we do feel comfortable with the following: If GAAP were modified to allow the net investment in loans receivable to be recorded at the NPV of estimated future cash flows, our "modified GAAP" earnings would have been $.05 higher per share (($3.1 million x 1-tax rate)/weighted average shares outstanding). The caveat is as follows: If GAAP were modified in this way, and we have no reason to believe it will be, our earnings would be much more volatile than they are today. So while our results are more favorable this quarter under "modified GAAP", shareholders
99.1 should avoid making any conclusions about the long-term profitability of our business based on a single quarter. 3. ON THE CASH FLOW STATEMENT; WHAT IS 'ACCELERATED PAYMENTS OF DEALER HOLDBACKS' AND WHAT IS THE SIGNIFICANCE OF THE NUMBER BEING 2X'S THE SIZE IN THE FIRST 9 MTHS OF THIS YEAR VS. THE NUMBER IN THE SAME PERIOD IN 2003? See question #4 posted August 16, 2004 for an explanation of this line item. The dollar amount of accelerated dealer holdback payments is a function of loan volumes, collection rates and the number of loan pools closed.