Credit Acceptance Corporation Reports: 4th Quarter Earnings of $7,241,000 or $0.17 Per Share; 2001 Earnings of $29,203,000 or $0.68 Per Share
SOUTHFIELD, Mich.--Jan. 23, 2002--Credit Acceptance Corporation Credit Acceptance Corporation (the "Company") announced today that consolidated net income for the three months ended December 31, 2001 was $7,241,000 or $0.17 per diluted share compared to $5,667,000 or $0.13 per diluted share for the same period in 2000, representing 27.8% and 26.0% increases in net income and earnings per share, respectively. For the year ended December 31, 2001, consolidated net income was $29,203,000 or $0.68 per diluted share compared to $23,650,000 or $0.53 per diluted share for the same period in 2000 representing 23.5% and 26.5% increases in net income and earnings per share, respectively. Return on capital was 7.5% and 8.4% for the three months and year ended December 31, 2001 compared to 7.8% and 8.0% for the same period in 2000.Subsequent to year-end, the Company elected to discontinue originating automobile lease contracts. As a result of this decision, earnings for the three months and year ended December 31, 2001 include an after tax charge of $471,000 for the impairment of certain assets. The Company originally entered the automobile leasing market in order to capitalize on certain structural advantages of leasing compared to the Company's core automobile lending business. The decision to stop originating lease contracts was based on the conclusion that, in spite of these advantages, the Automobile Leasing Segment was unlikely to produce a higher return over the long-term than the Company's core business.
Excluding the operations of the Automotive Leasing business segment ("Non-leasing Operations"), the Company's consolidated net income for the three months ended December 31, 2001 was $8,012,000 or $0.18 per diluted share compared to $6,487,000 or $0.15 per diluted share for the same period in 2000, representing 23.5 % and 21.8 % increases in net income and earnings per share, respectively. For the year ended December 31, 2001, the Non-leasing Operations' consolidated net income was $31,832,000 or $0.74 per diluted share compared to $25,139,000 or $0.57 for the same period in 2000 representing increases of 26.6 % and 29.8 % in net income and earnings per share, respectively. The Company's Non-leasing Operations' return on capital was 8.5% and 9.2% for the three months and year ended December 31, 2001 compared to 8.6% and 8.4% for the same period in 2000.
Fourth quarter 2001 results reflect a reclassification of both current and prior period state taxes of $3,869,000 from selling, general and administrative expenses to provision for income taxes required as a result of a change in the characterization of income for state tax purposes.
In addition, the Company announced two promotions, Michael Knoblauch to Chief Operating Officer and Keith McCluskey to President. Brett Roberts, the Company's Chief Executive Officer stated "Both Mike and Keith have distinguished themselves as committed leaders of our business. I look forward to continuing to work with both of them to build a great business."
Analysis of Economic Profit or Loss
Economic profit or loss represents operating profit after tax less the cost of all capital used to produce those profits. The Company's goal is to maximize the amount of economic profit per share.
The Company's economic loss improved to ($1,838,000) and ($5,962,000) or ($0.04) and ($0.14) per diluted share for the three months and year ended December 31, 2001 compared to ($2,720,000) and ($10,724,000) or ($0.06) and ($0.24) per diluted share for the same period in 2000, respectively. The improvements in the economic loss were primarily due to a reduction in the weighted average cost of capital, and for the year ended December 31, 2001, due to an improvement in the return on capital.
The reduction in the weighted average cost of capital for the three months and year ended December 31, 2001 compared to the same periods in 2000 was primarily due to lower average interest rates on the Company's borrowings as a result of an overall reduction in market rates during the periods. The Company's return on capital decreased to 7.5% for the three months ended December 31, 2001 from 7.8% for the same period in 2000, primarily due to the 2001 after tax charge for the impairment of certain lease assets. The Company's return on capital increased to 8.4% for the year ended December 31, 2001 from 8.0% for the same period in 2000, primarily due to a reduction in the amount advanced to dealers as a percent of the gross loan amount, partially offset by losses incurred in the Company's leasing business.
The table below illustrates the calculation of the Company's economic loss for the periods indicated (unaudited).
(Dollars in thousands, Three Months Ended
except per share data) December 31,
---------------------------
2001 2000
------------ ------------
Reported net income(1) $ 7,241 $ 5,667
Interest expense after tax 1,961 2,596
------------ ------------
Net operating profit
after tax ("NOPAT") 9,202 8,263
Average capital(2) $ 492,840 $ 424,689
Return on capital ("ROC")(3) 7.47% 7.78%
Weighted average cost
of capital ("WACC")(4) 8.96% 10.34%
------------ ------------
Spread (1.49%) (2.56%)
Total economic loss(5) $ (1,838) $ (2,720)
Diluted weighted
average shares outstanding 43,536,237 42,950,463
Economic loss per share(6) $ (0.04) $ (0.06)
Economic loss by
business segment(7)
North America $ (320) $ (1,072)
United Kingdom (276) (621)
Automotive Leasing (1,242) (1,027)
------------ ------------
Total economic loss $ (1,838) $ (2,720)
============ ============
(Dollars in thousands, Year Ended
except per share data) December 31,
---------------------------
2001 2000
------------ ------------
Reported net income(1) $ 29,203 $ 23,650
Interest expense after tax 9,657 10,749
------------ ------------
Net operating profit
after tax ("NOPAT") 38,860 34,399
Average capital(2) $ 464,256 $ 428,761
Return on capital ("ROC")(3) 8.37% 8.02%
Weighted average cost
of capital ("WACC")(4) 9.65% 10.52%
------------ ------------
Spread (1.28%) (2.50%)
Total economic loss(5) $ (5,962) $ (10,724)
Diluted weighted
average shares outstanding 43,150,804 44,219,876
Economic loss per share(6) $ (0.14) $ (0.24)
Economic loss by
business segment(7)
North America $ (1,033) $ (6,028)
United Kingdom (862) (2,704)
Automotive Leasing (4,067) (1,992)
------------ ------------
Total economic loss $ (5,962) $ (10,724)
============ ============
(1) Consolidated net income from the income statement of this news
release.
(2) Average capital is equal to the average amount of debt during the
period plus the average amount of equity during the period.
(3) Return on capital is equal to NOPAT divided by average capital.
(4) Weighted average cost of capital is equal to the sum of: i) the
after-tax cost of debt multiplied by the ratio of average debt to
average capital, plus ii) the cost of equity multiplied by the
ratio of average equity to average capital. The cost of equity is
assumed to be equal to the 30-year Treasury bond rate plus 6% plus
two times the Company's interest bearing debt to equity.
(5) Total economic loss equals the Spread (ROC minus WACC) multiplied
by average capital.
(6) Economic loss per share equals the economic loss divided by the
diluted weighted average shares outstanding.
(7) See Summary of Operations for discussion on business reporting
segments.
Summary of Operations
=====================
Results for the Company's three business segments are discussed below.
North America Business Segment
------------------------------
North America Business Segment
Selected Financial and Operating Data
-------------------------------------
(Unaudited)
Three Months Ended
December 31,
--------------------------------
(Dollars in Thousands) 2001 2000 % Change
--------- --------- --------
Originations $ 148,781 $ 85,518 74.0%
Number of loans originated 12,507 10,238 22.2%
Collections $ 88,608 $ 73,764 17.4%
Dealer partners
Number of active dealers 756 817 (7.5%)
Loans per active dealer 16.5 12.5 32.0%
Average loan size $ 11.9 $ 8.4 42.4%
Revenue $ 25,749 $ 21,875 17.7%
Costs and expenses $ 11,948 $ 13,975 (14.5%)
Earnings before taxes $ 13,801 $ 7,900 74.7%
NOPAT $ 7,488 $ 6,646 12.7%
Average capital $ 359,925 $ 300,335 19.8%
ROC 8.3% 8.9%
Economic loss $ (320) $ (1,072) 70.1%
Year Ended
December 31,
--------------------------------
(Dollars in Thousands) 2001 2000 % Change
--------- --------- --------
Originations $ 680,184 $ 403,032 68.8%
Number of loans originated 62,675 47,620 31.6%
Collections $ 347,892 $ 319,335 8.9%
Dealer partners
Number of active dealers 1,170 1,202 (2.7%)
Loans per active dealer 53.6 39.6 35.2%
Average loan size $ 10.9 $ 8.5 28.2%
Revenue $ 99,451 $ 89,098 11.6%
Costs and expenses $ 57,333 $ 58,116 (1.3%)
Earnings before taxes $ 42,118 $ 30,982 35.9%
NOPAT $ 30,468 $ 27,714 9.9%
Average capital $ 332,574 $ 321,331 3.5%
ROC 9.2% 8.6%
Economic loss $ (1,033) $ (6,028) 82.9%
The North America Business Segment ("North America Operations") automobile loan originations were $148,781,000 and $680,184,000 for the three months and year ended December 31, 2001 compared with $85,518,000 and $403,032,000 for the same periods in 2000, representing increases of 74.0% and 68.8%, respectively. The increases reflect: (i) an increase in the average loan size to $11,896 and $10,853 for the three months and year ended December 31, 2001 compared with $8,353 and $8,464 for the same periods in 2000, reflecting a shift to newer vehicles financed over longer initial loan terms; and (ii) an increase in the average number of loans originated per active dealer to 16.5 and 53.6 for the three months and year ended December 31, 2001 compared with 12.5 and 39.6 for the same periods in 2000. The increases were partially offset by a decrease in the number of active dealers to 756 and 1,170 for the three months and year ended December 31, 2001 compared with 817 and 1,202 for the same periods in 2000.
North America Operations' return on capital decreased to 8.3% for the three months ended December 31, 2001 from 8.9% for the same period in 2000. The decline in return on capital was primarily the result of an increase in operating expenses. North America Operations' return on capital increased to 9.2% for the year ended December 31, 2001 from 8.6% for the same period in 2000, primarily due to a reduction in the amount advanced to dealers as a percent of the gross loan amount.
United Kingdom Business Segment
-------------------------------
United Kingdom Business Segment
Selected Financial and Operating Data
(Unaudited)
Three Months Ended
December 31,
------------------------------
(Dollars in Thousands) 2001 2000 % Change
-------- -------- ------
Originations $ 27,339 $ 34,246 (20.2%)
Number of loans originated 1,920 2,568 (25.2%)
Collections $ 21,939 $ 19,091 14.9%
Dealer partners
Number of active dealers 118 138 (14.5%)
Loans per active dealer 16.3 18.6 (12.6%)
Average loan size $ 14.2 $ 13.3 6.8%
Revenue $ 6,772 $ 5,479 23.6%
Costs and expenses $ 4,270 $ 3,520 21.3%
Earnings before taxes $ 2,502 $ 1,959 27.7%
NOPAT $ 2,136 $ 1,749 22.1%
Average capital $ 95,582 $ 90,074 6.1%
ROC 8.9% 7.8%
Economic loss $ (276) $ (621) 55.6%
Year Ended
December 31,
------------------------------
(Dollars in Thousands) 2001 2000 % Change
-------- -------- ------
Originations $ 125,890 $ 144,992 (13.2%)
Number of loans originated 9,121 10,664 (14.5%)
Collections $ 85,608 $ 75,726 13.0%
Dealer partners
Number of active dealers 215 205 4.9%
Loans per active dealer 42.4 52.0 (18.4%)
Average loan size $ 13.8 $ 13.6 1.5%
Revenue $ 24,613 $ 20,948 17.5%
Costs and expenses $ 14,259 $ 13,628 4.6%
Earnings before taxes $ 10,354 $ 7,320 41.4%
NOPAT $ 8,834 $ 6,095 44.9%
Average capital $ 94,906 $ 83,086 14.2%
ROC 9.3% 7.3%
Economic loss $ (862) $ (2,704) 68.1%
The Company's United Kingdom Business Segment ("United Kingdom Operations") originated $27,339,000 and $125,890,000 in automobile loans for the three months and year ended December 31, 2001 compared with $34,246,000 and $144,992,000 for the same periods in 2000, representing decreases in 2001 of 20.2% and 13.2%, respectively. The decreases were a result of the Company discontinuing its relationship with certain dealers.
The United Kingdom Operations' return on capital improved to 8.9% and 9.3% for the three months and year ended December 31, 2001 compared with 7.8% and 7.3% for the same periods in 2000. The improvement in return on capital was primarily the result of a decrease in the provision for credit losses associated with discontinuing its' relationship with certain dealers.
Automotive Leasing Business Segment
-----------------------------------
Automotive Leasing Business Segment
Selected Financial and Operating Data
-------------------------------------
(Unaudited)
Three Months Ended
December 31,
---------------------------------
(Dollars in Thousands) 2001 2000 % Change
---------------------------------
Collections $ 5,384 $ 3,503 53.7%
Average loan origination
Size $ 9.0 $ 10.4 (13.1%)
Revenue $ 5,859 $ 4,575 28.1%
Costs and expenses $ 7,088 $ 5,816 21.9%
Losses before taxes $ (1,229) $ (1,241) 1.0%
NOPAT $ (422) $ (132) (219.7%)
Average capital $ 37,333 $ 34,280 8.9%
ROC (4.5%) (1.5%)
Economic loss $ (1,242) $ (1,027) (20.9%)
Year Ended
December 31,
-------------------------------
(Dollars in Thousands) 2001 2000 % Change
-------------------------------
Collections $ 19,555 $ 10,170 92.3%
Average loan origination
Size $ 9.5 $ 10.7 (11.6%)
Revenue $ 23,192 $ 13,732 68.9%
Costs and expenses $ 27,287 $ 16,045 70.1%
Losses before taxes $ (4,095) $ (2,313) (77.0%)
NOPAT $ (442) $ 590 (174.9%)
Average capital $ 36,776 $ 24,344 51.1%
ROC (1.2%) 2.4%
Economic loss $ (4,067) $ (1,992) (104.2%)
Subsequent to year-end the Company stopped originating automotive leases.
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 we believe any forward-looking statements we have made are reasonable, actual results could differ materially since the statements are based on our current expectations and are subject to risks and uncertainties. These risks and uncertainties, include, among others, competition from traditional financing sources and from non-traditional lenders, unavailability of funding at competitive rates of interest, 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 ability 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, the Company's potential inability to accurately estimate the residual values of the lease vehicles, an adverse outcome in the ongoing Internal Revenue Service examination of the Company, an increase in the amount or severity of litigation against the Company, the loss of key management personnel, the Company's ability to continue to obtain third party financing on favorable terms and the various other factors discussed in the Company's reports filed with the Securities and Exchange Commission. Readers are cautioned to consider these factors when relying on such forward-looking information. 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 in North America and Europe. 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 NASDAQ 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 Year Ended
December 31, December 31,
------------------------- --------------------------
2001 2000 2001 2000
------------ ------------ ------------ ------------
(Unaudited)
Revenue:
Finance
charges $ 23,173 $ 19,154 $ 88,371 $ 79,659
Lease revenue 5,485 4,391 21,853 13,019
Other income 9,722 8,384 37,032 31,100
------------ ------------ ------------ ------------
Total
revenue 38,380 31,929 147,256 123,778
------------ ------------ ------------ ------------
Costs and
expenses:
Selling, general
& administrative
expenses 13,551 13,789 59,754 53,092
Provision for
credit losses 3,563 3,154 11,915 11,251
Depreciation of
leased assets 3,214 2,490 12,485 7,004
Interest 2,979 3,952 14,688 16,431
------------ ------------ ------------ ------------
Total costs
and
expenses 23,307 23,385 98,842 87,778
------------ ------------ ------------ ------------
Operating income 15,073 8,544 48,414 36,000
Foreign exchange
gain (loss) 1 74 (37) (11)
------------ ------------ ------------ ------------
Income before
provision for
income taxes 15,074 8,618 48,377 35,989
Provision for
income taxes 7,833 2,951 19,174 12,339
------------ ------------ ------------ ------------
Net income $ 7,241 $ 5,667 $ 29,203 $ 23,650
============ ============ ============ ============
Net income per
common share:
Basic $ 0.17 $ 0.13 $ 0.69 $ 0.54
============ ============ ============ ============
Diluted $ 0.17 $ 0.13 $ 0.68 $ 0.53
============ ============ ============ ============
Weighted average
shares outstanding:
Basic 42,104,971 42,587,792 42,140,961 43,879,577
============ ============ ============ ============
Diluted 43,536,237 42,950,463 43,150,804 44,219,876
============ ============ ============ ============
CREDIT ACCEPTANCE CORPORATION
Consolidated Balance Sheets
(Dollars in thousands)
As of December 31
2001 2000
--------- ---------
Assets:
Cash and cash equivalents $ 15,466 $ 20,726
Investments - held to maturity 618 751
Automobile loans receivable 762,031 568,900
Allowance for credit losses (4,745) (4,640)
--------- ---------
Automobile loans receivable, net 757,286 564,260
Floor plan receivables 6,446 8,106
Notes receivable 11,167 6,985
Investment in operating leases, net 42,774 42,921
Property and equipment, net 19,646 18,418
Other assets 8,772 3,515
Income taxes receivable -- 351
Retained interest in securitization -- 5,001
--------- ---------
Total Assets $ 862,175 $ 671,034
========= =========
Liabilities:
Senior notes $ -- $ 15,948
Lines of credit 73,215 88,096
Secured financing 122,396 45,039
Mortgage note 6,918 7,590
Accounts payable and
accrued liabilities 40,048 26,933
Dealer holdbacks, net 315,393 214,468
Deferred income taxes, net 10,668 10,734
Income taxes payable 5,098 --
--------- ---------
Total Liabilities $ 573,736 $ 408,808
--------- ---------
Shareholders' Equity
Common stock 422 425
Paid-in capital 109,000 110,226
Retained earnings 185,156 155,953
Accumulated other
comprehensive loss-cumulative
translation adjustment (6,139) (4,378)
--------- ---------
Total Shareholders' Equity 288,439 262,226
--------- ---------
Total Liabilities and
Shareholders' Equity $ 862,175 $ 671,034
========= =========
CREDIT ACCEPTANCE CORPORATION
Consolidated Statements of Cash Flows
(Dollars in thousands)
Year Ended
December 31,
2001 2000
--------- ---------
Cash Flows From Operating Activities:
Net Income $ 29,203 $ 23,650
Adjustments to reconcile cash
provided by operating activities -
Provision for credit losses 11,915 11,251
Depreciation 4,556 3,518
Depreciation of operating lease vehicles 10,109 5,492
Amortization of deferred leasing costs 2,376 1,512
Tax benefit from exercise of stock options 406 --
Credit for deferred income taxes (66) 934
Gain on securitization clean-up call (1,082) --
Change in operating assets and liabilities -
Accounts payable and accrued liabilities 12,348 2,377
Income taxes payable 5,098 --
Income taxes receivable 351 12,335
Lease payment receivable (348) (2,723)
Unearned insurance premiums, insurance
reserves and fees (1,044) (2,060)
Deferred dealer enrollment fees, net 767 874
Other assets (5,257) 2,163
--------- ---------
Net cash provided by operating activities 69,332 59,323
--------- ---------
Cash Flows From Investing Activities:
Principal collected on automobile
loans receivable 310,957 305,630
Advances to dealers and payments of
dealer holdbacks (401,387) (298,447)
Operating lease acquisitions (25,816) (39,254)
Deferred costs from lease acquisitions (3,371) (5,954)
Operating lease liquidations 11,071 4,090
Decrease in floor plan receivables 1,556 7,761
Increase in notes receivable (4,182) (3,375)
Purchases of property and equipment (5,880) (3,902)
--------- ---------
Net cash used in investing activities (117,052) (33,451)
--------- ---------
Cash Flows From Financing Activities:
Net borrowings (repayments) under
lines of credit (14,881) 51,102
Proceeds from secured financing 264,423 63,850
Repayment of secured financing (187,066) (102,008)
Repayments of senior notes and mortgage note (16,620) (15,256)
Repurchase of common stock (3,262) (18,851)
Proceeds from stock options exercised 1,627 124
--------- ---------
Net cash provided by (used in)
financing activities 44,221 (21,039)
--------- ---------
Effect of exchange rate changes on cash (1,761) (5,672)
--------- ---------
Net Decrease In Cash (5,260) (839)
Cash and cash equivalents - beginning of period 20,726 21,565
--------- ---------
Cash and cash equivalents - end of period $ 15,466 $ 20,726
========= =========
CREDIT ACCEPTANCE CORPORATION
Summary Financial Data
(Dollars in thousands)
Automobile Loans Receivable
---------------------------
The following table summarizes the composition of automobile loans
receivable:
As of December 31
---------------------
2001 2000
--------- ---------
Gross automobile loans receivable $ 906,808 $ 674,402
Unearned finance charges (138,533) (98,214)
Unearned insurance premiums, insurance
reserves and fees (6,244) (7,288)
--------- ---------
Automobile loans receivable $ 762,031 $ 568,900
========= =========
Non-accrual automobile loans as a percent
of total gross automobile loans 20.0% 21.6%
========= =========
A summary of changes in gross automobile loans receivable is as
follows:
Three Months Ended Year Ended
December 31 December 31
-------------------- --------------------
2001 2000 2001 2000
--------- --------- --------- ---------
(Unaudited)
Balance, beginning
of period $ 882,820 $ 680,972 $ 674,402 $ 679,247
Gross amount of
automobile loans
accepted 176,120 119,764 806,074 548,024
Gross automobile loans
acquired pursuant to
clean up call -- -- 2,918 --
Cash collections on
automobile loans
receivable (110,547) (92,855) (433,500) (395,061)
Charge offs (39,283) (35,756) (137,158) (144,828)
Currency translation (2,302) 2,277 (5,928) (12,980)
--------- --------- --------- ---------
Balance, end of period $ 906,808 $ 674,402 $ 906,808 $ 674,402
========= ========= ========= =========
Investment in Operating Leases
------------------------------
The following table summarizes the composition of investment in
operating leases, net:
As of December 31
2001 2000
-------- --------
Gross leased vehicles $ 50,054 $ 42,449
Accumulated depreciation (11,657) (5,283)
Gross deferred costs 6,831 6,245
Accumulated amortization of deferred costs (2,786) (1,435)
Lease payments receivable 3,308 2,968
Investment in operating leases 45,750 44,944
Less: Reserve on investment in operating
leases (2,976) (2,023)
-------- --------
Investment in operating leases, net $ 42,774 $ 42,921
======== ========
CREDIT ACCEPTANCE CORPORATION
Summary Financial Data
(Dollars in thousands)
Investment in Operating Leases - (continued)
--------------------------------------------
A summary of changes in the investment in operating leases is as
follows:
Three Months Ended Year Ended
December 31 December 31
------------------ ------------------
2001 2000 2001 2000
-------- -------- -------- --------
(Unaudited)
Balance, beginning of period $ 47,961 $ 40,038 $ 44,944 $ 9,188
Gross operating leases
originated 4,922 8,794 29,187 45,208
Depreciation and amortization
of operating leases (3,214) (2,490) (12,485) (7,004)
Lease payments due 5,737 4,505 21,862 13,441
Collections on operating leases (5,384) (3,503) (19,555) (10,170)
Charge offs (491) (253) (1,959) (563)
Operating lease liquidations (3,716) (2,156) (16,046) (5,165)
Currency translation (65) 9 (198) 9
-------- -------- -------- --------
Balance, end of period $ 45,750 $ 44,944 $ 45,750 $ 44,944
======== ======== ======== ========
Reserves
--------
A summary of changes in the allowance for credit losses, the reserve
on advances, and the reserve on investment in operating leases is as
follows:
Three Months Ended Year Ended
December 31 December 31
---------------- ----------------
2001 2000 2001 2000
------- ------- ------- -------
Allowance for Credit Losses (Unaudited)
---------------------------
Balance, beginning of period $ 4,241 $ 4,374 $ 4,640 $ 4,742
Provision for loan losses 604 651 1,142 1,647
Charge offs (89) (395) (1,015) (1,688)
Currency translation (11) 10 (22) (61)
------- ------- ------- -------
Balance, end of period $ 4,745 $ 4,640 $ 4,745 $ 4,640
======= ======= ======= =======
Three Months Ended Year Ended
December 31 December 31
---------------- ----------------
2001 2000 2001 2000
------- ------- ------- -------
Reserve on Advances (Unaudited)
-------------------
Balance, beginning of period $ 8,497 $ 6,605 $ 6,788 $ 4,329
Provision for advance losses 1,331 1,221 4,647 6,591
Charge offs (639) (1,063) (2,196) (4,104)
Currency translation (28) 25 (78) (28)
------- ------- ------- -------
Balance, end of period $ 9,161 $ 6,788 $ 9,161 $ 6,788
======= ======= ======= =======
CREDIT ACCEPTANCE CORPORATION
Summary Financial Data
(Dollars in thousands)
Reserves - (continued)
---------------------- Three Months Ended Year Ended
December 31 December 31
---------------- ----------------
2001 2000 2001 2000
------- ------- ------- -------
Reserve on Investment in
Operating Leases (Unaudited)
Balance, beginning of period $ 2,764 $ 1,277 $ 2,023 $ 91
Provision for lease vehicle losses 1,628 1,282 6,126 3,013
Charge offs (1,415) (536) (5,171) (1,081)
Currency translation (1) -- (2) --
------- ------- ------- -------
Balance, end of period $ 2,976 $ 2,023 $ 2,976 $ 2,023
======= ======= ======= =======
Dealer Holdbacks
----------------
The following table summarizes the composition of dealer holdbacks:
As of December 31
2001 2000
--------- ---------
Dealer holdbacks $ 721,365 $ 537,679
Less: Advances (net of
reserve of $9,161 and
$6,788 at December 31,
2001 and 2000, respectively)
(405,972) (323,211)
--------- ---------
Dealer holdbacks, net $ 315,393 $ 214,468
========= =========