Credit Acceptance Announces 1st Quarter Earnings
SOUTHFIELD, Mich.--April 17, 2002--Credit Acceptance Corporation Credit Acceptance Corporation (the "Company") announced consolidated net income for the quarter ended March 31, 2002 was $6,314,000 or $0.15 per diluted share compared to $6,589,000 or $0.15 per diluted share for the same period in 2001. After adjustments related to stock options (see "Stock Options") and excluding the impact of non-recurring adjustments, consolidated net income was $9,115,000 or $0.19 per adjusted share compared to $6,401,000 or $0.14 per adjusted share for the same period in 2001.The results for the quarter ended March 31, 2002 include two non-recurring adjustments. The first relates to an amount booked to record additional taxes that will be owed upon repatriation of currently undistributed earnings in the Company's United Kingdom business unit. An adjustment of $3,713,000 was recorded to the provision for income taxes during the quarter of which $149,000 relates to the current period. The remaining $3,564,000 relates to earnings generated from inception of the United Kingdom business unit through December 31, 2001. Prior to this quarter, these undistributed earnings were classified as "permanently reinvested" and as a result no accrual of future United States tax liability was required. Based upon reduced capital requirements in the United Kingdom business unit, it is likely that some amount of capital will be repatriated within fiscal 2002. While it is likely the Company will continue to have a sizable investment in the United Kingdom in the future, given current circumstances, the Company does not expect future earnings to remain in the United Kingdom indefinitely. The second adjustment, of $963,000 relates to a change in estimate for state income tax owed as a result of the re-characterization of income as a result of an Internal Revenue Service examination. The adjustment reverses a portion of the amount originally recorded in the fourth quarter of 2001 and favorably impacted the reported provision for income taxes by $634,000 and operating expenses by $329,000 in the current quarter.
The quarter also included a $200,000 after-tax expense associated with performance-based stock options granted in 1999. See "Stock Options" for a more comprehensive discussion of this topic.
Economic Profit (Loss)
Economic profit (loss) represents operating profit after tax less the cost of capital. The Company's economic loss improved to ($954,000) or ($0.02) per adjusted share for the quarter ended March 31, 2002 compared to ($2,531,000) or ($0.05) per adjusted share for the same period in 2001. In addition to adjusting for non-recurring items, the economic loss includes three adjustments relating to stock options. See the section on "Stock Options" for a complete discussion of this topic.
The following presents the calculation of the Company's economic loss for the periods indicated (Dollars in thousands, except per share data):
Three Months Ended March 31,
-------------------------------
2002 2001
------------- -------------
(Unaudited)
Reported net income(1) $ 6,314 $ 6,589
Non-recurring adjustments(2) 2,601 (188)
Recorded stock option expense(3) 200 --
------------- -------------
Adjusted net income 9,115 6,401
Interest expense after-tax 1,502 2,458
------------- -------------
Net operating profit after
tax ("NOPAT") 10,617 8,859
Average capital(4) $ 505,913 $ 448,960
Return on Capital ("ROC")(5) 8.39% 7.89%
Weighted average cost of
capital ("WACC")(6) 9.15% 10.15%
------------- -------------
Spread (0.76%) (2.26%)
Economic loss(7) $ (954) $ (2,531)
Adjusted weighted average
shares outstanding(8) 47,336,090 47,123,792
------------- -------------
Economic loss per share(9) and(10) $ (0.02) $ (0.05)
------------- -------------
------------- -------------
Adjusted net income per share(11) $ 0.19 $ 0.14
------------- -------------
------------- -------------
(1) Consolidated net income from the income statement of this
news release.
(2) 2002 adjustments reflect: (i) additional taxes recorded in
connection with future repatriation of earnings from the
United Kingdom business unit, and (ii) a reduction in state
income tax related liability. The 2001 amount reflects the
first quarter 2001 impact of the United Kingdom business unit
tax adjustment.
(3) Generally accepted accounting principles ("GAAP") require
the Company to record an expense relating to
performance-based options. See Stock Options.
(4) Average capital is equal to the average amount of debt and
equity during the period, which includes $23,623,000 and
$22,864,000 added to reported shareholder's equity to reflect
the cost of stock options in 2002 and 2001, respectively.
(5) Return on capital is equal to NOPAT divided by average
capital.
(6) 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, which includes $23,623,000
and $22,864,000 added to reported shareholders' equity to
reflect the cost of stock options in 2002 and 2001,
respectively.
(7) Total economic loss equals the Spread (ROC minus WACC)
multiplied by average capital.
(8) Includes actual shares outstanding plus total stock options
outstanding. Differs from shares used for GAAP earnings per
share which include only a portion of options outstanding.
(9) Economic loss per share equals the economic loss divided by
the adjusted weighted average shares outstanding.
(10) The Company's method of measuring options in the
calculation of economic profit (loss) is conservative in
two respects. First, the tax benefits of options have not
been included in our calculation of economic profit (loss).
Because option expense is deducted for tax purposes upon
exercise, more capital will be returned to the Company upon
exercise than is invested in repurchased shares. Second,
options may be cancelled due to turnover or the failure to
meet performance targets. Cancellations will be factored in
as they occur. One additional risk is assumed. Should options
be issued and shares repurchased above intrinsic value, and
the options subsequently expire unexercised, a loss equal to
the amount paid above intrinsic value would be incurred.
(11) Adjusted net income per share equals the adjusted net income
divided by the adjusted weighted average shares outstanding.
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 March 31,
-------------------------------------------
(Dollars in thousands,
except per share data) 2002 2001 % Change
------------- ------------- ------------
Originations $ 174,543 $ 175,669 (0.6)%
Number of loans
originated 16,102 19,183 (16.1)
Collections $ 100,011 $ 86,447 15.7
Dealer-partners:
Number of active
dealer-partners 681 886 (23.1)
Loans per active
dealer-partner 23.6 21.7 9.2
Average loan size $ 10.8 $ 9.2 18.4
Reported net income $ 9,327 $ 5,447 71.2
Non-recurring
adjustment (963) --
Recorded stock option
expense 200 --
------------- -------------
Adjusted net income 8,564 5,447 57.2
Interest expense
after-tax 889 1,518 (41.4)
------------- -------------
NOPAT 9,453 6,965 35.7
Average capital $ 383,007 $ 321,377 19.2
ROC 9.87% 8.67%
WACC 8.95% 10.14%
------------- -------------
Spread 0.92% (1.47%)
Economic profit (loss) $ 903 $ (1,205)
Adjusted weighted average
shares outstanding 47,336,090 47,123,792
------------- -------------
Economic profit (loss)
per share $ 0.02 $ (0.03)
------------- -------------
------------- -------------
Adjusted net income
per share $ 0.18 $ 0.12 50.0 %
------------- -------------
------------- -------------
The North America Business Segment's ("North America Operation") economic profit (loss) improved to $903,000 or $0.02 per adjusted share for the quarter ended March 31, 2002 compared with ($1,205,000) or ($0.03) per adjusted share for the same period in 2001 due to: (i) an increase in the return on capital to 9.87% from 8.67% for the same period in 2001 due primarily to a reduction in operating expenses as a percent of average capital; and (ii) a lower weighted average cost of capital, which was a result of lower interest rates during the period.
The North America Operation's automobile loan originations were $174,543,000 for the quarter ended March 31, 2002 compared with $175,669,000 for the same period in 2001, representing a decrease of 0.6%. The reduction in loan origination volume is a result of an increased focus on improving the return on capital. The Company's financial goal is to maximize the amount of economic profit generated per share. The Company believes that in the short-term, this objective can best be achieved by first improving the return per dollar of capital invested. Once return on capital goals have been met, the Company will then focus on increasing the amount of capital invested through increasing the number of dealer-partners and the number of loans originated per dealer-partner. The Company's efforts to improve the return on capital have focused on increasing the spread between the amount advanced to dealer-partners and the forecasted collection rate.
United Kingdom Business Segment
-------------------------------
United Kingdom Business Segment
Selected Financial and Operating Data
------------------------------------------
(Unaudited)
Three Months Ended March 31,
------------------------------------------
(Dollars in thousands,
except per share data) 2002 2001 % Change
------------- ------------- -----------
Originations $ 17,538 $ 35,357 (50.4)%
Number of loans
originated 1,304 2,704 (51.8)
Collections $ 21,399 $ 20,673 3.5
Dealer-partners:
Number of active
dealer-partners 106 148 (28.4)
Loans per active
dealer-partner 12.3 18.3 (32.7)
Average loan size $ 13.4 $ 13.1 2.9
Reported net income(loss) $ (2,462) $ 1,741
Non-recurring
adjustments 3,564 (188)
------------- -------------
Adjusted net income 1,102 1,553 (29.0)
Interest expense
after-tax 213 353 (39.7)
------------- -------------
NOPAT 1,315 1,906 (31.0)
Average capital $ 87,671 $ 90,887 (3.5)
ROC 6.00% 8.39%
WACC 9.98% 10.04%
------------- -------------
Spread (3.98%) (1.65%)
Economic loss $ (872) $ (375)
Adjusted weighted average
shares outstanding 47,336,090 47,123,792
------------- -------------
Economic loss
per share $ (0.02) $ (0.01)
------------- -------------
------------- -------------
Adjusted net income
per share $ 0.02 $ 0.03 (33.3)%
------------- -------------
------------- -------------
The United Kingdom Business Segment's ("United Kingdom Operation") economic loss increased to ($872,000) or ($0.02) per adjusted share for the quarter ended March 31, 2002 compared with ($375,000) or ($0.01) per adjusted share for the same period in 2001 primarily due to a decrease in the return on capital to 6.00% from 8.39% for the same period in 2001. The decrease in the return on capital is primarily due to a reduction in finance charge revenue as a percent of average capital as a result of an increase in the average loan term. To a lesser extent, the reduction was due to an increase in operating expenses as a percent of average capital. The decrease in the return on capital is partially offset by a lower average cost of capital, which was a result of lower interest rates during the period.
The United Kingdom Operation originated $17,538,000 in automobile loans for the quarter ended March 31, 2002 compared with $35,357,000 for the same period in 2001, representing a decrease of 50.4%. The reduction in loan origination volume in the United Kingdom is a result of the same strategy as described under the North America Business Segment.
Automobile Leasing Business Segment
-----------------------------------
Automobile Leasing Business Segment
Selected Financial and Operating Data
--------------------------------------------------
(Unaudited)
Three Months Ended March 31,
--------------------------------------------------
(Dollars in thousands,
except per
share data) 2002 2001 % Change
------------- ------------- -------------
Collections $ 4,644 $ 4,516 2.8 %
Reported net loss $ (551) $ (599) 8.0
Interest expense
after-tax 400 587 (31.9)
------------- -------------
NOPAT (151) (12) (1,158.3)
Average capital $ 35,235 $ 36,696 (4.0)
ROC (1.71%) (0.14%)
WACC 9.48% 10.23%
------------- -------------
Spread (11.19%) (10.37%)
Economic loss $ (985) $ (951)
Adjusted weighted
average shares
outstanding 47,336,090 47,123,792
------------- -------------
Economic loss
per share $ (0.02) $ (0.02)
------------- -------------
------------- -------------
Adjusted net loss
per share $ (0.01) $ (0.01) 0.0 %
------------- -------------
------------- -------------
In the first quarter of 2002, the Company stopped originating automobile leases. The assets of the Automobile Leasing Segment are reviewed for impairment on a quarterly basis. Based upon this review, no additional write-down was necessary in the first quarter of 2002.
Stock Options
In 1999, the Company began granting performance-based stock options to employees. Performance-based options are options that vest solely based on the achievement of performance targets, in our case targets based on either earnings per share or economic profit. GAAP requires companies to expense performance-based options when it is likely that performance targets will be met and a measurement date can be established. The amount of the reported expense is the price of our stock at the end of each reporting period less the exercise price of the options. The Company's non-performance options are not required to be expensed under GAAP.
Regardless of the accounting, options represent a significant cost to shareholders. The true cost is the business value transferred to the employee in stock, less the exercise proceeds, a number that is difficult to calculate since it depends on when options are exercised and the future performance of the business. GAAP provides several alternatives for accounting for this cost. In the Company's opinion, none of these alternatives provide a method that accurately captures the true cost of options in all circumstances.
Because the Company believes that accurately understanding and managing the cost of options is essential, over the last 3 years, the Company has developed the following practices regarding stock options:
| -- | When options are issued, the Company's general practice is to repurchase the same number of shares. Future options will not be granted unless shares have first been repurchased in the open market, and will have a strike price no less than the average price of the repurchased shares. For shareholders, the only impact of options therefore is the capital used to repurchase shares is no longer available to invest in income producing assets. This cost, the opportunity cost of the capital used to repurchase shares until the capital is returned upon option exercise, already reduces our reported earnings. |
| -- | Option grants are predominantly performance-based, with appropriately aggressive vesting targets. The Company believes that these options properly align the interests of management and shareholders by rewarding management only for exceptional business performance. |
| -- | Starting this quarter, the calculation of economic profit (loss) includes three adjustments to GAAP to reflect the cost of options. First, to avoid double counting, the GAAP expense recorded for performance options is added back. Second, to be conservative, all options outstanding are included in our fully diluted share base. Finally, economic profit (loss) includes a charge for the capital used to repurchase shares covering options grants. |
Since 1999, net of cancelled options, 1,401,000 options have been issued compared with 4,439,000 shares repurchased in the amount of $23,623,000. Because of options granted prior to 1999, there are currently more options outstanding than repurchased shares. These uncovered options will be covered through future repurchases and the cost included in subsequent periods.
Credit Acceptance understands that options represent a cost to shareholders. The Company believes this cost is now accurately measured and charged to economic profit per share, the number on which the Company's management incentive compensation system is based. These practices regarding options were adopted to increase the chance that future option grants will create value for shareholders.
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: 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 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. 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 participating dealer-partners with financing sources for consumers with limited access to credit by offering "guaranteed credit approval". The Company delivers credit approvals through the internet. Other services include marketing, sales training and a wholesale purchasing cooperative. Through its financing program, Credit Acceptance helps consumers change their lives by providing 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
March 31,
---------------------------
2002 2001
------------- -------------
(Unaudited)
Revenue:
Finance charges $ 24,479 $ 20,189
Lease revenue 5,159 5,067
Other income 9,134 9,483
------------- -------------
Total revenue 38,772 34,739
------------- -------------
Costs and expenses:
Operating expenses 15,922 15,017
Provision for credit losses 3,381 3,015
Depreciation of leased assets 2,941 2,929
Interest 2,305 3,805
------------- -------------
Total costs and expenses 24,549 24,766
------------- -------------
Operating income 14,223 9,973
Foreign exchange gain 17 7
------------- -------------
Income before provision
for income taxes 14,240 9,980
Provision for income taxes 7,926 3,391
------------- -------------
Net income $ 6,314 $ 6,589
------------- -------------
------------- -------------
Net income per common share:
Basic $ 0.15 $ 0.16
------------- -------------
------------- -------------
Diluted $ 0.15 $ 0.15
------------- -------------
------------- -------------
Weighted average shares outstanding:
Basic 42,437,481 42,442,064
Diluted 43,497,889 42,851,520
CREDIT ACCEPTANCE CORPORATION
Consolidated Balance Sheets
---------------------------
(Dollars in thousands)
As of March 31,
-------------------------
2002 2001
----------- -----------
(Unaudited)
ASSETS:
Cash and cash equivalents $ 19,580 $ 35,369
Investments-- held to maturity 176 673
Automobile loans receivable 787,432 622,270
Allowance for credit losses (4,908) (3,797)
----------- -----------
Automobile loans receivable, net 782,524 618,473
----------- -----------
Floor plan receivables 5,774 6,987
Notes receivable 10,987 9,536
Investment in operating leases, net 35,612 47,605
Property and equipment, net 19,649 18,300
Retained interest in securitization -- 5,202
Other assets 5,428 5,613
----------- -----------
Total Assets $ 879,730 $ 747,758
----------- -----------
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
Senior notes $ -- $ 15,948
Lines of credit 67,403 44,122
Secured financing 108,364 120,569
Mortgage note 6,740 7,425
Accounts payable and accrued liabilities 37,412 33,102
Dealer holdbacks, net 341,800 248,985
Deferred income taxes, net 13,775 10,295
Income taxes payable 7,125 3,641
----------- -----------
Total Liabilities 582,619 484,087
----------- -----------
Shareholders' Equity:
Common stock 422 421
Paid-in capital 113,000 108,515
Retained earnings 191,470 162,542
Accumulated other comprehensive
loss-cumulative translation adjustment (7,781) (7,807)
----------- -----------
Total Shareholders' Equity 297,111 263,671
----------- -----------
Total Liabilities and Shareholders' Equity $ 879,730 $ 747,758
----------- -----------
----------- -----------
CREDIT ACCEPTANCE CORPORATION
Consolidated Statements of Cash Flows
(Dollars in thousands)
Three Months Ended March 31,
----------------------------
2002 2001
------------- ------------
(Unaudited)
Cash Flows From Operating Activities:
Net income $ 6,314 $ 6,589
Adjustments to reconcile net cash
provided by operating activities:
Provision for credit losses 3,381 3,015
Depreciation 830 1,038
Depreciation of leased assets 2,941 2,929
Provision (credit) for deferred
income taxes 3,107 (496)
Tax benefit from exercise of
stock options 977 --
Change in operating assets
and liabilities:
Accounts payable and accrued
liabilities (2,114) 5,716
Income taxes payable 2,027 3,641
Income taxes receivable -- 351
Lease payment receivable 394 (46)
Unearned insurance premiums,
insurance reserves and fees (330) 413
Deferred dealer enrollment fees, net 219 453
Other assets 2,741 (2,098)
------------- ------------
Net cash provided by operating
activities 20,487 21,505
------------- ------------
Cash Flows From Investing Activities:
Principal collected on automobile
loans receivable 94,532 87,652
Advances to dealers (87,179) (103,109)
Payments of dealer holdback (7,776) (6,576)
Operating lease acquisitions (853) (10,468)
Deferred costs from lease acquisitions (200) (1,461)
Operating lease liquidations 3,422 3,127
Decreases in floor plan receivables 668 607
Decrease (increase) in notes receivable 180 (2,551)
Purchases of property and equipment (833) (920)
------------- ------------
Net cash provided by (used in)
investing activities 1,961 (33,699)
------------- ------------
Cash Flows From Financing Activities:
Repayments under lines of credit, net (5,812) (43,974)
Proceeds from secured financings 28,552 97,068
Repayments of secured financings (42,584) (21,538)
Repayment of senior notes and mortgage note (178) (165)
Repurchase of common stock -- (1,777)
Proceeds from stock options exercised 3,023 62
------------- ------------
Net cash provided by (used in)
financing activities (16,999) 29,676
------------- ------------
Effect of exchange rate changes on cash (1,642) (3,429)
------------- ------------
Net increases in cash and cash equivalents 3,807 14,053
Cash and cash equivalents,
beginning of period 15,773 21,316
------------- ------------
Cash and cash equivalents, end of period $ 19,580 $ 35,369
------------- ------------
------------- ------------
CREDIT ACCEPTANCE CORPORATION
Summary Financial Data
----------------------
(Dollars in thousands)
Automobile Loans Receivable
---------------------------
The following table summarizes the composition of automobile loans
receivable:
As of March 31,
------------------------
2002 2001
---------- ----------
(Unaudited)
Gross automobile loans receivable $ 937,632 $ 741,530
Unearned finance charges (144,286) (111,559)
Unearned insurance premiums,
insurance reserves and fees (5,914) (7,701)
---------- ----------
Automobile loans receivable $ 787,432 $ 622,270
---------- ----------
---------- ----------
Delinquent automobile loans $ 187,650 $ 141,762
---------- ----------
---------- ----------
Non-accrual automobile loans as a
percent of total gross
automobile loans 20.0% 19.1%
---------- ----------
---------- ----------
A summary of changes in gross automobile loans receivable is as
follows:
Three Months Ended March 31,
----------------------------
2002 2001
---------- ----------
(Unaudited)
Balance, beginning of period $ 906,808 $ 674,402
Gross amount of automobile
loans accepted 192,081 211,026
Legal and repossession fees 6,330 6,311
Cash collections on automobile
loans accepted (121,410) (107,120)
Charge-offs (41,835) (32,809)
Currency translation (4,342) (10,280)
---------- ----------
Balance, end of period $ 937,632 $ 741,530
---------- ----------
---------- ----------
Investment in Operating Leases
------------------------------
The following table summarizes the composition of investment in
operating leases, net:
As of March 31,
-----------------------
2002 2001
----------- ----------
(Unaudited)
Gross leased assets $ 44,011 $ 48,387
Accumulated depreciation (12,095) (6,865)
Gross deferred costs 5,996 6,982
Accumulated amortization of deferred costs (2,803) (1,798)
Lease payments receivable 2,914 3,014
----------- ----------
Investment in operating leases 38,023 49,720
Less: Allowance for lease vehicle losses (2,411) (2,115)
----------- ----------
Balance, end of period $ 35,612 $ 47,605
----------- ----------
----------- ----------
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 March 31,
----------------------------
2002 2001
----------- -----------
(Unaudited)
Balance, beginning of period $ 45,750 $ 44,944
Gross operating leases originated 1,053 11,929
Depreciation and amortization of
operating leases (2,941) (2,929)
Lease payments due 4,982 5,103
Collections on operating leases (4,644) (4,516)
Charge-offs (732) (541)
Operating lease liquidations (5,430) (4,200)
Currency translation (15) (70)
----------- -----------
Balance, end of period $ 38,023 $ 49,720
----------- -----------
----------- -----------
Reserves
A summary of changes in the allowance for credit losses, the
reserve for advance losses, and the reserve on investment in operating
leases are as follows:
Three Months Ended March 31,
----------------------------
2002 2001
---------- ----------
Allowance for Credit Losses (Unaudited)
---------------------------
Balance, beginning of period $ 4,745 $ 4,640
Provision for loan losses 460 0
Charge-offs (272) (799)
Currency translation 25 (44)
---------- ----------
Balance, end of period $ 4,958 $ 3,797
---------- ----------
---------- ----------
Three Months Ended March 31,
----------------------------
2002 2001
------------ ------------
Reserve for Advance Losses (Unaudited)
--------------------------
Balance, beginning of period $ 9,161 $ 6,788
Provision for advance losses 1,462 1,780
Charge-offs (565) (1,200)
Currency translation (49) (116)
------------ ------------
Balance, end of period $ 10,009 $ 7,252
------------ ------------
------------ ------------
CREDIT ACCEPTANCE CORPORATION
Summary Financial Data
----------------------
(Dollars in thousands)
Three Months Ended March 31,
----------------------------
2002 2001
---------- ----------
Reserve on Investment in (Unaudited)
Operating Leases
--------------------------
Balance, beginning of period $ 2,976 $ 2,023
Provision for lease vehicle losses 1,459 1,235
Charge-offs (2,024) (1,143)
---------- ----------
Balance, end of period $ 2,411 $ 2,115
---------- ----------
---------- ----------
Dealer Holdbacks
----------------
The following table summarizes the composition of dealer
holdbacks:
As of March 31,
--------------------------
2002 2001
---------- ----------
(Unaudited)
Dealer holdbacks $ 746,697 $ 589,247
Less: advances (net of
reserve of $10,009 and $7,252
at March 31, 2002 and 2001,
respectively) (404,897) (340,262)
---------- ----------
Dealer holdbacks, net $ 341,800 $ 248,985
---------- ----------
---------- ----------