-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NmM27oj6wBoVMD+t5fgHEQ7uRYxHeB8FFGhmS3KzIelv/biBfxGkjCl3MRg5Gk4M r0emxwCONpYpt9BveUAFcw== 0000930661-01-500651.txt : 20010516 0000930661-01-500651.hdr.sgml : 20010516 ACCESSION NUMBER: 0000930661-01-500651 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20010331 FILED AS OF DATE: 20010515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICREDIT CORP CENTRAL INDEX KEY: 0000804269 STANDARD INDUSTRIAL CLASSIFICATION: FINANCE SERVICES [6199] IRS NUMBER: 752291093 STATE OF INCORPORATION: TX FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-10667 FILM NUMBER: 1636677 BUSINESS ADDRESS: STREET 1: 801 CHERRY STREET STREET 2: SUITE 3900 CITY: FORT WORTH STATE: TX ZIP: 76102 BUSINESS PHONE: 8173027000 MAIL ADDRESS: STREET 1: 801 CHERRY ST STREET 2: SUITE 3900 CITY: FORT WORTH STATE: TX ZIP: 76102 FORMER COMPANY: FORMER CONFORMED NAME: URCARCO INC DATE OF NAME CHANGE: 19920703 10-Q 1 d10q.txt FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2001 -------------- OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number 1-10667 ------- AmeriCredit Corp. ----------------- (Exact name of registrant as specified in its charter) Texas 75-2291093 ------------------------------ ---------------------- (State or other jurisdiction of (I.R.S. Employer Incorporation or organization) Identification No.) 801 Cherry Street, Suite 3900, Fort Worth, Texas 76102 ------------------------------------------------------ (Address of principal executive offices, including Zip Code) (817) 302-7000 -------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [_] There were 82,760,082 shares of common stock, $0.01 par value outstanding as of April 30, 2001. AMERICREDIT CORP. INDEX TO FORM 10-Q
Part I. FINANCIAL INFORMATION Page ---- Item 1. Financial Statements (unaudited) Consolidated Balance Sheets - March 31, 2001 and June 30, 2000............................................... 3 Consolidated Statements of Income and Comprehensive Income - Three Months and Nine Months Ended March 31, 2001 and 2000......................................... 4 Consolidated Statements of Cash Flows - Nine Months Ended March 31, 2001 and 2000................................... 5 Notes to Consolidated Financial Statements...................... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations........................... 19 Item 3. Quantitative and Qualitative Disclosures About Market Risk................................................... 35 Part II. OTHER INFORMATION Item 1. Legal Proceedings............................................. 36 Item 2. Changes in Securities......................................... 36 Item 3. Defaults upon Senior Securities............................... 36 Item 4. Submission of Matters to a Vote of Security Holders........... 36 Item 5. Other Information............................................. 37 Item 6. Exhibits and Reports on Form 8-K.............................. 37 SIGNATURE............................................................................. 38
2 Part I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS AMERICREDIT CORP. Consolidated Balance Sheets (Unaudited, Dollars in Thousands)
March 31, 2001 June 30, 2000 -------------- ------------- ASSETS Cash and cash equivalents $ 101,511 $ 42,916 Receivables held for sale, net 1,483,160 871,511 Interest-only receivables from Trusts 271,817 229,059 Investments in Trust receivables 442,806 341,707 Restricted cash 298,721 253,852 Property and equipment, net 48,627 44,535 Other assets 149,712 78,689 -------------- --------------- Total assets $ 2,796,354 $ 1,862,269 ============== =============== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Warehouse credit facilities $ 1,148,345 $ 487,700 Credit enhancement facility 60,756 66,606 Senior notes 375,000 375,000 Other notes payable 18,344 19,691 Funding payable 58,282 61,664 Accrued taxes and expenses 104,401 70,627 Deferred income taxes 102,556 92,402 -------------- --------------- Total liabilities 1,867,684 1,173,690 -------------- --------------- Shareholders' equity: Preferred stock, $0.01 par value per share; 20,000,000 shares authorized, none issued Common stock, $0.01 par value per share; 120,000,000 shares authorized; 87,824,893 and 83,726,534 shares issued 878 837 Additional paid-in capital 473,855 401,979 Accumulated other comprehensive income 60,565 44,803 Retained earnings 413,256 262,111 -------------- --------------- 948,554 709,730 Treasury stock, at cost (6,589,530 and 7,008,859 shares) (19,884) (21,151) -------------- --------------- Total shareholders' equity 928,670 688,579 -------------- --------------- Total liabilities and shareholders' equity $ 2,796,354 $ 1,862,269 ============== ===============
The accompanying notes are an integral part of these consolidated financial statements 3 AMERICREDIT CORP. Consolidated Statements of Income and Comprehensive Income (Unaudited, Dollars in Thousands, Except Per Share Data)
Three Months Ended Nine Months Ended March 31, March 31, --------- --------- 2001 2000 2001 2000 ------------------------ ------------------------ Revenue Finance charge income $ 61,017 $ 30,512 $158,512 $ 85,506 Gain on sale of receivables 79,674 52,923 212,433 151,165 Servicing fee income 74,423 44,645 197,128 120,528 Other income 2,038 1,953 7,029 4,697 ------------------------ ------------------------ 217,152 130,033 575,102 361,896 ------------------------ ------------------------ Costs and expenses Operating expenses 79,342 55,488 219,837 162,031 Provision for loan losses 8,635 3,986 21,960 11,229 Interest expense 30,915 17,858 87,541 48,263 Charge for closing mortgage operations 10,500 ------------------------ ------------------------ 118,892 77,332 329,338 232,023 ------------------------ ------------------------ Income before income taxes 98,260 52,701 245,764 129,873 Income tax provision 37,830 20,291 94,619 52,530 ------------------------ ------------------------ Net income 60,430 32,410 151,145 77,343 ------------------------ ------------------------ Other comprehensive income Unrealized gain (loss) on credit enhancement assets 18,583 (2,587) 102,100 10,281 Unrealized (loss) gain on cash flow hedges (30,189) 1,315 (76,473) 10,522 Related income tax provision (benefit) 4,469 489 (9,865) (7,983) ------------------------ ------------------------ Comprehensive income $ 53,293 $ 31,627 $ 166,907 $ 90,163 ======================== ======================== Earnings per share Basic $ 0.75 $ 0.43 $ 1.92 $ 1.07 ======================== ======================== Diluted $ 0.70 $ 0.41 $ 1.78 $ 1.01 ======================== ======================== Weighted average shares outstanding 80,079,906 74,869,550 78,520,489 72,110,495 ======================== ======================== Weighted average shares and assumed incremental shares 86,709,986 79,027,907 84,817,718 76,544,943 ======================== ========================
The accompanying notes are an integral part of these consolidated financial statements 4 AMERICREDIT CORP. Consolidated Statements of Cash Flows (Unaudited, Dollars in Thousands)
Nine Months Ended March 31, --------------------------- 2001 2000 ---------------- ---------------- Cash flows from operating activities Net income $ 151,145 $ 77,343 Adjustments to reconcile net income to net cash provided by operating activities: Non-cash charge for closing mortgage operations 6,566 Depreciation and amortization 14,893 13,527 Provision for loan losses 21,960 11,229 Deferred income taxes 36,706 9,584 Non-cash servicing fee income (64,775) (31,388) Non-cash gain on sale of auto receivables (169,725) (138,753) Distributions from Trusts 158,552 79,443 Changes in assets and liabilities: Other assets (7,615) (9,972) Accrued taxes and expenses 23,847 18,294 ---------------- ---------------- Net cash provided by operating activities 164,988 35,873 ---------------- ---------------- Cash flows from investing activities Purchases of auto receivables (4,435,454) (3,166,671) Originations of mortgage receivables (109,688) Principal collections and recoveries on receivables 72,563 27,849 Net proceeds from sale of auto receivables 3,725,453 2,894,504 Net proceeds from sale of mortgage receivables 447 122,515 Initial deposits to restricted cash (82,151) (132,750) Investment in Trust receivables (5,000) Net change in credit enhancement facility (5,850) 45,000 Purchases of property and equipment (11,283) (6,891) Change in other assets (53,481) (7,361) ---------------- ---------------- Net cash used in investing activities (794,756) (333,493) ---------------- ---------------- Cash flows from financing activities Net change in warehouse credit facilities 660,645 209,988 Net payments on other notes payable (9,049) (8,263) Proceeds from issuance of common stock 36,767 125,524 ---------------- ---------------- Net cash provided by financing activities 688,363 327,249 ---------------- ---------------- Net increase in cash and cash equivalents 58,595 29,629 Cash and cash equivalents at beginning of period 42,916 21,189 ---------------- ---------------- Cash and cash equivalents at end of period $ 101,511 $ 50,818 ================ ================
The accompanying notes are an integral part of these consolidated financial statements 5 AMERICREDIT CORP. Notes to Consolidated Financial Statements (Unaudited) NOTE 1 - BASIS OF PRESENTATION The accompanying consolidated financial statements include the accounts of AmeriCredit Corp. and its wholly-owned subsidiaries ("the Company"). All significant intercompany transactions and accounts have been eliminated in consolidation. The consolidated financial statements as of March 31, 2001, and for the periods ended March 31, 2001 and 2000, are unaudited, but in management's opinion include all adjustments necessary for a fair presentation of the results for such interim periods. Certain prior year amounts have been reclassified to conform to the current period presentation. The results for interim periods are not necessarily indicative of results for a full year. The interim period financial statements, including the notes thereto, are condensed and do not include all disclosures required by generally accepted accounting principles. These interim period financial statements should be read in conjunction with the Company's consolidated financial statements which are included in the Company's Annual Report on Form 10-K for the year ended June 30, 2000. In September 2000, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, a replacement of Financial Accounting Standards Board Statement No. 125" ("SFAS 140"), which revises the standards for accounting for securitizations and other transfers of financial assets and collateral and requires certain disclosures, but, carries over most of Statement No. 125's provisions without reconsideration. SFAS 140 is effective for transfers and servicing of financial assets and extinguishments of liabilities occurring after March 31, 2001, and is effective for disclosures relating to securitization transactions and collateral and for recognition and reclassification of collateral for fiscal years ending after December 15, 2000. The Company does not believe that the adoption of this statement will have a material effect on the Company's financial position or results of operations. 6 NOTE 2 - RECEIVABLES HELD FOR SALE Receivables held for sale consist of the following (in thousands):
March 31, 2001 June 30, 2000 ----------------- ----------------- Auto receivables $ 1,524,264 $ 891,672 Less allowance for loan losses (43,383) (24,374) ------------------ ------------------ Auto receivables, net 1,480,881 867,298 Mortgage receivables 2,279 4,213 ------------------ ------------------ $ 1,483,160 $ 871,511 ================== ==================
A summary of the allowance for loan losses is as follows (in thousands):
Three Months Ended Nine Months Ended March 31, March 31, --------- --------- 2001 2000 2001 2000 -------------------------------------------------- Balance at beginning of period $ 33,350 $ 16,861 $ 24,374 $ 11,841 Provision for loan losses 8,635 3,986 21,960 11,229 Acquisition fees 37,962 26,935 102,178 69,433 Allowance related to receivables sold to Trusts (31,999) (24,827) (94,341) (66,164) Net charge-offs (4,565) (2,467) (10,788) (5,851) -------------------------------------------------- Balance at end of period $ 43,383 $ 20,488 $ 43,383 $ 20,488 ==================================================
NOTE 3 - CREDIT ENHANCEMENT ASSETS As of March 31, 2001 and June 30, 2000, the Company was servicing $7,577.0 million and $5,758.3 million, respectively, of auto receivables which have been sold to certain special purpose financing trusts (the "Trusts"). The Company has retained an interest in these receivables in the form of credit enhancement assets. Credit enhancement assets consist of the following (in thousands):
March 31, 2001 June 30, 2000 -------------- ------------- Interest-only receivables from Trusts $ 271,817 $229,059 Investments in Trust receivables 442,806 341,707 Restricted cash 298,721 253,852 ------------------ ------------------ $1,013,344 $824,618 ================== ==================
7 A summary of activity in the credit enhancement assets is as follows (in thousands):
Three Months Ended Nine Months Ended March 31, March 31, --------- --------- 2001 2000 2001 2000 -------------------------------------------------- Balance at beginning of period $ 973,094 $685,061 $ 824,618 $494,862 Non-cash gain on sale of auto receivables 66,179 46,083 169,725 138,753 Accretion of present value discount 25,243 11,223 64,775 31,388 Initial deposits to restricted cash 11,917 40,750 82,151 132,750 Investment in Trust receivables 5,000 Change in unrealized gain (11,606) (1,272) 25,627 20,803 Distributions from Trusts (51,483) (42,732) (158,552) (79,443) -------------------------------------------------- Balance at end of period $1,013,344 $739,113 $1,013,344 $739,113 ==================================================
A summary of the allowance for loan losses included as a component of the interest-only receivables is as follows (in thousands):
Three Months Ended Nine Months Ended March 31, March 31, --------- --------- 2001 2000 2001 2000 -------------------------------------------------- Balance at beginning of period $695,854 $452,221 $ 563,102 $ 354,338 Assumptions for cumulative credit losses 150,614 106,883 413,916 302,289 Net charge-offs (72,477) (51,530) (203,027) (149,053) -------------------------------------------------- Balance at end of period $773,991 $507,574 $ 773,991 $ 507,574 ==================================================
NOTE 4 - WAREHOUSE CREDIT FACILITIES Warehouse credit facilities consist of the following (in thousands): March 31, 2001 June 30, 2000 -------------- ------------- Commercial paper facilities $ 629,725 $483,039 Medium term note facility 500,000 Canadian credit agreement 18,620 4,661 ----------------- ---------------- $1,148,345 $487,700 ================= ================ The Company has five separate funding agreements with administrative agents on behalf of institutionally managed commercial paper conduits and bank groups with aggregate structured warehouse financing availability of approximately $2 billion. Two of the commercial paper facilities provide for available structured warehouse financing of $525 million and $275 million, respectively, through September 2001. Another facility provides for available structured warehouse financing of $400 million through March 2002. 8 The remaining facilities provide for available structured warehouse financing of $500 million and $300 million, respectively, through June 2001. Under these funding agreements, the Company transfers auto receivables to special purpose finance subsidiaries of the Company, and these subsidiaries in turn issue notes, collateralized by such auto receivables, to the agents. The agents provide funding under the notes to the subsidiaries pursuant to an advance formula and the subsidiaries forward the funds to the Company in consideration for the transfer of auto receivables. While these subsidiaries are included in the Company's consolidated financial statements, these subsidiaries are separate legal entities and the auto receivables and other assets held by the subsidiaries are legally owned by these subsidiaries and are not available to creditors of AmeriCredit Corp. or its other subsidiaries. Advances under the funding agreements bear interest at commercial paper, London Interbank Offered Rates ("LIBOR") or prime rates plus specified fees depending upon the source of funds provided by the agents. The funding agreements contain various covenants requiring certain minimum financial ratios and results. The funding agreements also require certain funds to be held in restricted cash accounts to provide additional collateral for borrowings under the facilities. As of March 31, 2001, and June 30, 2000, these restricted cash accounts totaled $12,910,000 and $16,262,000, respectively, and are included in other assets in the consolidated balance sheets. In December 2000, the Company entered into a funding agreement with an administrative agent on behalf of an institutionally managed medium term note conduit. Under this arrangement, the conduit sold medium term notes totaling $500 million and delivered the proceeds to a special purpose finance subsidiary of the Company. This subsidiary in turn issued a $500 million note, collateralized by auto receivables and cash, to the agent. The funding agreement allows for the substitution of auto receivables (subject to an over-collateralization formula) for cash, and vice versa, during the term of the agreement, thus allowing the Company to use the medium term note proceeds to finance auto receivables on a revolving basis through December 2003. While the special purpose finance subsidiary is included in the Company's consolidated financial statements, the subsidiary is a separate legal entity and the auto receivables and other assets held by the subsidiary are legally owned by the subsidiary and are not available to creditors of AmeriCredit Corp. or its other subsidiaries. The note issued by the subsidiary under the funding agreement bears interest at LIBOR plus specified fees. The funding agreement contains various covenants requiring certain minimum financial ratios and results. The funding agreement also requires certain funds to be held in a restricted cash account to provide additional collateral under the note. As of March 31, 2001, this restricted cash account totaled $12,884,000 and is included in other assets in the consolidated balance sheets. The Company's Canadian subsidiary has a convertible revolving term credit agreement with a bank, under which the subsidiary may borrow up to $30 million Cdn., subject to a defined borrowing base. Borrowings under the credit agreement are collateralized by certain Canadian auto receivables and bear 9 interest at the Canadian prime rate. The credit agreement, which expires in May 2001, contains various restrictive covenants requiring certain minimum financial ratios and results. NOTE 5 - CREDIT ENHANCEMENT FACILITY The Company has a credit enhancement facility with a financial institution under which the Company may borrow up to $225 million to fund a portion of the initial restricted cash deposit required in its securitization transactions. Borrowings under the credit enhancement facility are available on a revolving basis through October 2001 and are collateralized by the Company's credit enhancement assets. The facility contains covenants requiring certain asset performance ratios. The Company has alternatively utilized reinsurance arrangements to reduce the initial restricted cash deposit. These reinsurance arrangements do not represent funded debt, and therefore are not recorded as such on the Company's consolidated balance sheets. NOTE 6 - CHARGE FOR CLOSING MORTGAGE OPERATIONS As a result of declining premiums received for the sale of mortgage loans in the secondary markets, during the second quarter ended December 31, 1999, the Company ceased wholesale originations of mortgage loans and closed its mortgage loan production and processing offices. The Company recognized a pre-tax charge of $10.5 million during the three months ended December 31, 1999, related to the closing of the mortgage operations. The charge consists of a $6.6 million write-off of goodwill, $2.0 million of reserves against mortgage receivables held for sale and $1.9 million of severance, facility closing and other costs. Since the goodwill write-off is not deductible for income tax reporting purposes, the charge amounted to approximately $9.0 million after related income tax benefits. Reserves and accrued costs remaining at March 31, 2001, were $0.9 million. NOTE 7 - SUPPLEMENTAL INFORMATION Cash payments for interest costs and income taxes consist of the following (in thousands): Nine Months Ended March 31, --------- 2001 2000 ------------------------------ Interest costs (none capitalized) $84,062 $45,500 Income taxes 60,334 37,611 During the nine months ended March 31, 2001 and 2000, the Company entered into capital lease agreements for property and equipment of $7,702,000 and $11,787,000, respectively. 10 NOTE 8 - DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES The Company adopted Statement of Financial Accounting Standards No. 138, Accounting for Certain Derivative Instruments and Hedging Activities - an amendment of FASB Statement No. 133" ("SFAS 138"), on July 1, 2000. Pursuant to SFAS 138, all derivative instruments are recognized as either assets or liabilities in the balance sheet and are measured at fair value. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. Derivative instruments are utilized to manage the gross interest rate spread on the Company's securitization transactions, thereby hedging the estimated future excess cash flows to be received by the Company over the life of the securitization. The Company sells fixed rate auto receivables to Trusts that, in turn, sell either fixed rate or floating rate securities to investors. The interest rates on the floating rate securities issued by the Trusts are indexed to the one-month London Interbank Offered Rates. The Company uses interest rate swap agreements to convert the floating rate exposures on these securities to a fixed rate. The Company monitors the cash flow hedge effectiveness at interim and annual reporting dates. At March 31, 2001, the amount of ineffectiveness related to the interest rate swaps is not considered to be material. The fair value of the interest rate swaps is included in the valuation of interest-only receivables from Trusts in the Company's consolidated balance sheets. Changes in the fair value of the interest rate swaps is generally offset by a change in the fair value of the Company's credit enhancement assets. The Company also utilizes interest rate caps as part of its interest-rate risk-management strategy for securitization transactions as well as for warehouse credit facilities. The purchaser of the interest rate cap pays a premium in return for the right to receive the difference in the interest cost at any time a specified index of market interest rates rises above the stipulated "cap" rate. The interest rate cap purchaser bears no obligation or liability if interest rates fall below the "cap" rate. The Company's special purpose finance subsidiaries are contractually required to purchase interest rate cap agreements as credit enhancement in connection with securitization transactions and warehouse credit facilities. The Company simultaneously sells a corresponding interest rate cap agreement in order to offset the purchased interest rate cap agreement. The fair value of the interest rate cap agreements are included in other assets and accrued taxes and expenses on the Company's consolidated balance sheets. NOTE 9 - GUARANTOR CONSOLIDATING FINANCIAL STATEMENTS The payment of principal, premium, if any, and interest on the Company's senior notes is guaranteed by certain of the Company's subsidiaries (the "Subsidiary Guarantors"). The separate financial statements of the Subsidiary Guarantors are not included herein because the Subsidiary Guarantors are wholly-owned 11 consolidated subsidiaries of the Company and are jointly, severally and unconditionally liable for the obligations represented by the senior notes. The following consolidating financial statement schedules present consolidating financial data for (i) AmeriCredit Corp. (on a parent only basis), (ii) the combined Subsidiary Guarantors, (iii) the combined Non-Guarantor Subsidiaries, (iv) an elimination column for adjustments to arrive at the information for the Company and its subsidiaries on a consolidated basis and (v) the Company and its subsidiaries on a consolidated basis. Investments in subsidiaries are accounted for by the parent company using the equity method for purposes of this presentation. Earnings of subsidiaries are therefore reflected in the parent company's investment accounts and earnings. The principal elimination entries set forth below eliminate investments in subsidiaries and intercompany balances and transactions. 12 AmeriCredit Corp. Consolidating Balance Sheet March 31, 2001 (Unaudited, Dollars in Thousands)
AmeriCredit Non- Corp. Guarantors Guarantors Eliminations Consolidated ------------ ------------ ------------ ------------ ------------ ASSETS Cash and cash equivalents $ 73,118 $ 28,393 $ 101,511 Receivables held for sale, net 276,941 1,206,219 1,483,160 Interest-only receivables from Trusts $ 4,156 267,661 271,817 Investments in Trust receivables 442,806 442,806 Restricted cash 298,721 298,721 Property and equipment, net 349 48,278 48,627 Other assets 10,476 106,062 33,174 149,712 Due (to) from affiliates 640,539 (1,810,716) 1,170,177 Investment in affiliates 495,051 1,846,256 13,321 $(2,354,628) ------------ ------------ ------------ ------------ ------------ Total assets $ 1,150,571 $ 539,939 $ 3,460,472 $(2,354,628) $ 2,796,354 ============ ============ ============ ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Warehouse credit facilities $ 18,620 $ 1,129,725 $ 1,148,345 Credit enhancement facility 60,756 60,756 Senior notes $ 375,000 375,000 Other notes payable 18,344 18,344 Funding payable 57,979 303 58,282 Accrued taxes and expenses 14,601 82,639 7,161 104,401 Deferred income taxes (186,044) (55,712) 344,312 102,556 ------------ ------------ ------------ ------------ ------------ Total liabilities 221,901 103,526 1,542,257 1,867,684 ------------ ------------ ------------ ------------ ------------ Shareholders' equity: Common stock 878 30 $ (30) 878 Additional paid-in capital 473,855 47,397 1,346,069 (1,393,466) 473,855 Accumulated other comprehensive income 60,565 60,565 (60,565) 60,565 Retained earnings 413,256 388,986 511,581 (900,567) 413,256 ------------ ------------ ------------ ------------ ------------ 948,554 436,413 1,918,215 (2,354,628) 948,554 Treasury stock (19,884) (19,884) ------------ ------------ ------------ ------------ ------------ Total shareholders' equity 928,670 436,413 1,918,215 (2,354,628) 928,670 ------------ ------------ ------------ ------------ ------------ Total liabilities and shareholders' equity $ 1,150,571 $ 539,939 $ 3,460,472 $(2,354,628) $ 2,796,354 ============ ============ ============ ============ ============
13 AmeriCredit Corp. Consolidating Balance Sheet June 30, 2000 (Unaudited, Dollars in Thousands)
AmeriCredit Non- Corp. Guarantors Guarantors Eliminations Consolidated ------------ ------------ ------------ ------------ ------------ ASSETS Cash and cash equivalents $ 30,705 $ 12,211 $ 42,916 Receivables held for sale, net 284,851 586,660 871,511 Interest-only receivables from Trusts $ 1,019 228,040 229,059 Investments in Trust receivables 341,707 341,707 Restricted cash 253,852 253,852 Property and equipment, net 349 44,186 44,535 Other assets 11,529 40,781 26,379 78,689 Due (to) from affiliates 675,339 (701,473) 26,134 Investment in affiliates 318,749 632,534 2,641 $ (953,924) ------------ ------------ ------------ ------------ ------------ Total assets $ 1,006,985 $ 331,584 $ 1,477,624 $ (953,924) $ 1,862,269 ============ ============ ============ ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Warehouse credit facilities $ 4,661 $ 483,039 $ 487,700 Credit enhancement facility 66,606 66,606 Senior notes $ 375,000 375,000 Other notes payable 19,691 19,691 Funding payable 61,519 145 61,664 Accrued taxes and expenses 14,058 49,837 6,732 70,627 Deferred income taxes (90,343) (60,323) 243,068 92,402 ------------ ------------ ------------ ------------ ------------ Total liabilities 318,406 55,694 799,590 1,173,690 ------------ ------------ ------------ ------------ ------------ Shareholders' equity: Common stock 837 30 $ (30) 837 Additional paid-in capital 401,979 40,096 267,618 (307,714) 401,979 Accumulated other comprehensive income 44,803 44,803 (44,803) 44,803 Retained earnings 262,111 235,764 365,613 (601,377) 262,111 ------------ ------------ ------------ ------------ ------------ 709,730 275,890 678,034 (953,924) 709,730 Treasury stock (21,151) (21,151) ------------ ------------ ------------ ------------ ------------ Total shareholders' equity 688,579 275,890 678,034 (953,924) 688,579 ------------ ------------ ------------ ------------ ------------ Total liabilities and shareholders' equity $ 1,006,985 $ 331,584 $ 1,477,624 $ (953,924) $ 1,862,269 ============ ============ ============ ============ ============
14 AmeriCredit Corp. Consolidating Income Statement Nine Months Ended March 31, 2001 (Unaudited, Dollars in Thousands)
AmeriCredit Non- Corp. Guarantors Guarantors Eliminations Consolidated ------------ ------------ ------------ ------------ ------------ Revenue Finance charge income $ 63,293 $ 95,219 $ 158,512 Gain on sale of receivables $ (263) 31,977 180,719 212,433 Servicing fee income 187,148 58,957 $(48,977) 197,128 Other income 33,789 5,207 1,822 (33,789) 7,029 Equity in income of affiliates 153,222 145,968 (299,190) ------------ ------------ ------------ ------------ ------------ 186,748 433,593 336,717 (381,956) 575,102 ------------ ------------ ------------ ------------ ------------ Costs and expenses Operating expenses 245 268,444 125 (48,977) 219,837 Provision for loan losses 6,260 15,700 21,960 Interest expense 36,656 1,127 83,547 (33,789) 87,541 ------------ ------------ ------------ ------------ ------------ 36,901 275,831 99,372 (82,766) 329,338 ------------ ------------ ------------ ------------ ------------ Income before income taxes 149,847 157,762 237,345 (299,190) 245,764 Income tax (benefit) provision (1,298) 4,540 91,377 94,619 ------------ ------------ ------------ ------------ ------------ Net income $ 151,145 $ 153,222 $ 145,968 $ (299,190) $ 151,145 ============ ============ ============ ============ ============
15 AmeriCredit Corp. Consolidating Income Statement Nine Months Ended March 31, 2000 (Unaudited, Dollars in Thousands)
AmeriCredit Non- Corp. Guarantors Guarantors Eliminations Consolidated ------------ ----------- ---------- ------------ ------------ Revenue: Finance charge income $ 54,546 $ 30,960 $ 85,506 Gain on sale of receivables $ (14) 13,578 137,601 151,165 Servicing fee income 115,511 29,652 $ (24,635) 120,528 Other income 33,519 4,010 675 (33,507) 4,697 Equity in income of affiliates 75,763 91,210 (166,973) ------------ ----------- ---------- ------------ ------------ 109,268 278,855 198,888 (225,115) 361,896 ------------ ----------- ---------- ------------ ------------ Costs and expenses: Operating expenses 359 186,245 62 (24,635) 162,031 Provision for loan losses 5,967 5,262 11,229 Interest expense 30,578 5,937 45,255 (33,507) 48,263 Charge for closing mortgage operations 10,500 10,500 ------------ ----------- ---------- ------------ ------------ 30,937 208,649 50,579 (58,142) 232,023 ------------ ----------- ---------- ------------ ------------ Income (loss) before income taxes 78,331 70,206 148,309 (166,973) 129,873 Income tax provision (benefit) 988 (5,557) 57,099 52,530 ------------ ----------- ---------- ------------ ------------ Net income (loss) $ 77,343 $ 75,763 $ 91,210 $ (166,973) $ 77,343 ============ =========== ========== ============ ============
16 AmeriCredit Corp. Consolidating Statement of Cash Flows Nine Months Ended March 31, 2001 (Unaudited, Dollars in Thousands)
AmeriCredit Non- Corp. Guarantors Guarantors Eliminations Consolidated ------------ ---------- ------------ ------------ ------------ Cash flow from operating activities: Net income $ 151,145 $ 153,222 $ 145,968 $ (299,190) $ $151,145 Adjustments to reconcile net incomee to net cash provided by operating activities: Depreciation and amortization 14,893 14,893 Provision for loan losses 6,260 15,700 21,960 Deferred income taxes (59,284) 4,611 91,379 36,706 Non-cash servicing fee income (64,775) (64,775) Non-cash gain on sale of auto receivables (169,725) (169,725) Distributions from Trusts 158,552 158,552 Equity in income of affiliates (153,222) (145,968) 299,190 Changes in assets and liabilities: Other assets 1,053 (11,228) 2,560 (7,615) Accrued taxes and expenses 543 22,875 429 23,847 ------------- ------------ ----------- ------------ ------------ Net cash (used) provided by Operating activities (59,765) 44,665 180,088 164,988 ------------- ------------ ----------- ------------ ------------ Cash flows from investing activities: Purchase of auto receivables (4,435,454) (4,444,511) 4,444,511 (4,435,454) Principal collections and recoveries on receivables (11,394) 83,957 72,563 Net proceeds from sale of auto receivables 4,444,511 3,725,453 (4,444,511) 3,725,453 Net proceeds from sale of mortgage receivables 447 447 Initial deposits to restricted cash (82,151) (82,151) Investment in Trust receivables (5,000) (5,000) Net change in credit enhancement facility (5,850) (5,850) Purchases of property and equipment (11,283) (11,283) Change in other assets (44,126) (9,355) (53,481) Net change in investment in affiliates (7,318) (1,067,754) (10,680) 1,085,752 ------------- ------------ ----------- ------------ ------------ Net cash used by investing activities (7,318) (1,125,053) (748,137) 1,085,752 (794,756) ------------- ------------ ----------- ------------ ------------ Cash flows from financing activities: Net change in warehouse credit facilities 13,959 646,686 660,645 Net payments on other notes payable (9,049) (9,049) Proceeds from issuance of common stock 36,767 7,301 1,078,451 (1,085,752) 36,767 Net change in due (to) from affiliates 39,365 1,101,541 (1,140,906) ------------ ----------- ------------ ------------ ------------ Net cash provided by financing activities 67,083 1,122,801 584,231 (1,085,752) 688,363 ------------ ----------- ------------ ------------ ------------ Net increase in cash and cash equivalents 42,413 16,182 58,595 Cash and cash equivalents at beginning of period 30,705 12,211 42,916 ------------ ----------- ------------ ------------ ------------ Cash and cash equivalents at end of period $ $ 73,118 $ 28,393 $ $ 101,511 ============ =========== ============ ============ ============
17 AmeriCredit Corp. Consolidating Statement of Cash Flow Nine Months Ended March 31, 2000 (Unaudited, Dollars in Thousands)
AmeriCredit Non- Corp. Guarantors Guarantors Eliminations Consolidated ------------- ------------ ------------ ------------ ------------ Cash flow from operating activities: Net income $ 77,343 $ 75,763 $ 91,210 $ (166,973) $ 77,343 Adjustments to reconcile net income to net cash provided by operating activities: Non-cash charge for closing mortgage operations 6,566 6,566 Depreciation & amortization 13,527 13,527 Provision for loan losses 5,967 5,262 11,229 Deferred income taxes (28,882) (18,838) 57,304 9,584 Non-cash servicing fee income (31,388) (31,388) Non-cash gain on sale of auto receivables (138,753) (138,753) Distributions from Trusts 79,443 79,443 Equity in income of affiliates (75,763) (91,210) 166,973 Changes in assets and liabilities: Other assets 735 (9,358) (1,349) (9,972) Accrued taxes & expenses 7,563 9,220 1,511 18,294 ------------- ------------ ----------- ------------ ------------ Net cash (used) provided by operating activities (19,004) (8,363) 63,240 35,873 ------------- ------------ ----------- ------------ ------------ Cash flows from investing activities: Purchase of auto receivables (3,166,671) (3,084,178) 3,084,178 (3,166,671) Originations of mortgage receivables (109,688) (109,688) Principal collections and recoveries on receivables (6,514) 34,363 27,849 Net proceeds from sale of auto receivables 3,084,178 2,894,504 (3,084,178) 2,894,504 Net proceeds from sale of mortgage receivables 122,515 122,515 Initial deposits to restricted cash (132,750) (132,750) Net change in credit enhancement facility 45,000 45,000 Purchases of property and equipment (6,891) (6,891) Increase in other assets 1,915 (9,276) (7,361) Net change in investment in affiliates 20,104 (26,822) (50) 6,768 ------------- ------------ ----------- ------------ ------------ Net cash provided (used) by investing activities 20,104 (107,978) (252,387) 6,768 (333,493) ------------- ------------ ----------- ------------ ------------ Cash flows from financing activities: Net change in warehouse credit facilities (16,312) 226,300 209,988 Net payments on other notes payable (8,263) (8,263) Proceeds from issuance of common stock 125,524 1,685 5,083 (6,768) 125,524 Net change in due (to) from affiliates (118,361) 174,640 (56,279) ------------- ----------- ----------- ------------ ------------ Net cash (used) provided by financing activities (1,100) 160,013 175,104 (6,768) 327,249 ------------- ----------- ----------- ------------ ------------ Net increase (decrease) in cash and cash equivalents 43,672 (14,043) 29,629 Cash and cash equivalents at beginning of period 20,246 943 21,189 ------------- ----------- ----------- ------------ ------------ Cash and cash equivalents at end of period $ $ 63,918 $ (13,100) $ $ 50,818 ============ =========== =========== ============ ============
18 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL The Company generates earnings and cash flow primarily from the purchase, securitization and servicing of auto receivables. The Company purchases auto finance contracts from franchised and select independent automobile dealerships. To fund the acquisition of receivables prior to securitization, the Company utilizes borrowings under its warehouse credit facilities. The Company generates finance charge income on its receivables pending securitization ("receivables held for sale") and pays interest expense on borrowings under its warehouse credit facilities. The Company sells receivables to securitization trusts ("Trusts") that, in turn sell asset-backed securities to investors. By securitizing its receivables, the Company is able to lock in the gross interest rate spread between the yield on such receivables and the interest rate payable on the asset-backed securities. The Company recognizes a gain on the sale of receivables to the Trusts, which represents the difference between the sale proceeds to the Company, net of transaction costs, and the Company's net carrying value of the receivables, plus the present value of the estimated future excess cash flows to be received by the Company over the life of the securitization. Excess cash flows result from the difference between the interest received from the obligors on the receivables and the interest paid to investors in the asset-backed securities, net of credit losses and expenses. Excess cash flows from the Trusts are initially utilized to fund credit enhancement requirements to secure financial guaranty insurance policies issued by an insurance company and protect investors in the asset-backed securities from losses. Once predetermined credit enhancement requirements are reached and maintained, excess cash flows are distributed to the Company. In addition to excess cash flows, the Company earns monthly base servicing fee income of 2.25% per annum on the outstanding principal balance of receivables securitized ("serviced receivables"). In November 1996, the Company acquired AmeriCredit Mortgage Services ("AMS"), which originated and sold mortgage loans. Receivables originated in this business are referred to as mortgage receivables. Such receivables were generally packaged and sold for cash on a servicing released whole-loan basis. Deterioration in the wholesale loan markets caused premiums received by AMS for the sale of mortgage loans to decrease. As a result, during October 1999, Company management assessed various options with respect to the operations of AMS and decided to cease the operations of AMS. The AMS wholesale mortgage loan production and processing offices were closed, and the assets of AMS are being liquidated. 19 RESULTS OF OPERATIONS Three Months Ended March 31, 2001 as compared to - ------------------------------------------------ Three Months Ended March 31, 2000 --------------------------------- Revenue: The Company's average managed receivables outstanding consisted of the following (in thousands): Three Months Ended March 31, ------------------------------ 2001 2000 -------------- -------------- Auto: Held for sale $1,167,508 $ 533,259 Serviced 7,451,125 5,060,612 -------------- -------------- 8,618,633 5,593,871 Mortgage 2,619 11,849 -------------- -------------- $8,621,252 $5,605,720 ============== ============== Average managed receivables outstanding increased by 54% as a result of higher loan purchase volume. The Company purchased $1,653.2 million of auto loans during the three months ended March 31, 2001, compared to purchases of $1,155.1 million during the three months ended March 31, 2000. This growth resulted from loan production at branches open during both periods as well as expansion of the Company's branch network. Loan purchases at branch offices opened prior to March 31, 1999, were 17% higher for the twelve months ended March 31, 2001, versus the twelve months ended March 31, 2000. The Company operated 217 auto lending branch offices as of March 31, 2001, compared to 186 as of March 31, 2000. The average new loan size was $15,321 for the three months ended March 31, 2001, compared to $14,145 for the three months ended March 31, 2000. The average annual percentage rate for loans purchased during the three months ended March 31, 2001, was 19.1%, compared to 19.2% during the three months ended March 31, 2000. Finance charge income increased by 100% to $61.0 million for the three months ended March 31, 2001, from $30.5 million for the three months ended March 31, 2000. Finance charge income was higher due primarily to an increase of 119% in average auto receivables held for sale in the three months ended March 31, 2001, versus the three months ended March 31, 2000. The Company's effective yield on its auto receivables held for sale decreased to 21.2% for the three months ended March 31, 2001, from 23.0% for the three months ended March 31, 2000. The effective yield is higher than the contractual rates of the Company's auto finance contracts as a result of finance charge income earned 20 between the date the auto finance contract is originated by the automobile dealership and the date the auto finance contract is funded by the Company. The effective yield decreased for the three months ended March 31, 2001, due to lower levels of finance charges earned between the origination date and funding date. The gain on sale of receivables rose by 51% to $79.7 million for the three months ended March 31, 2001, from $52.9 million for the three months ended March 31, 2000. The increase in gain on sale of auto receivables resulted from the sale of $1,300.0 million of receivables in the three months ended March 31, 2001, as compared to $1,025.0 million of receivables sold in the three months ended March 31, 2000. The gain as a percentage of the sales proceeds increased to 6.1% for the three months ended March 31, 2001, from 5.2% for the three months ended March 31, 2000, as a result of a decrease in U.S. Treasury and other short term interest rates. Significant assumptions used in determining the gain on sale of auto receivables and fair value of credit enhancement assets were as follows: Three Months Ended March 31, ----------------------------- 2001 2000 -------------- ------------- Cumulative credit losses (including deferred gains) 11.7% 10.9% Discount rate used to estimate present value: Interest-only receivables from Trusts 14.0% 12.0% Investment in Trust receivables 9.8% 7.8% Restricted cash 9.8% 7.8% The discount rates used to estimate the present value of credit enhancement assets are based on the relative risks of each asset type. Interest-only receivables represent estimated future excess cash flows in the Trusts, which involves a greater degree of risk than investments in Trust receivables and restricted cash. Investments in Trust receivables and restricted cash represent assets currently held by the Trustee and are senior to the interest-only receivables for credit enhancement purposes. The Company increased the discount rate used in determining the gain on sale of auto receivables effective for auto receivables sold subsequent to June 1, 2000. The discount rate used to estimate the present value of interest-only receivables from Trusts increased to 14.0% from 12.0% and the discount rate used to estimate the present value of investments in Trust receivables and restricted cash increased to 9.8% from 7.8%. The increased discount rate results only in a difference in the timing of revenue recognition from securitizations and has no effect on the Company's estimate of expected excess cash flows from such transactions. While the total amount of revenue recognized over the term of a securitization transaction is the same, a higher discount rate results in (i) lower initial gains on the sale of receivables and (ii) higher subsequent servicing fee income from accretion of the additional discount. 21 Servicing fee income increased to $74.4 million, or 4.1% of average serviced auto receivables, for the three months ended March 31, 2001, compared to $44.6 million, or 3.5% of average serviced auto receivables, for the three months ended March 31, 2000. Servicing fee income represents accretion of the present value discount on estimated future excess cash flows from the Trusts, base servicing fees and other fees earned by the Company as servicer of the auto receivables sold to the Trusts. The growth in servicing fee income is attributable to the increase in average serviced auto receivables outstanding for the three months ended March 31, 2001, compared to the three months ended March 31, 2000. Costs and Expenses: Operating expenses as an annualized percentage of average managed receivables outstanding decreased to 3.7% for the three months ended March 31, 2001, compared to 4.0% for the three months ended March 31, 2000. The ratio improved as a result of economies of scale realized from a growing receivables portfolio and automation of loan origination, processing and servicing functions. The dollar amount of operating expenses increased by $23.9 million, or 43%, primarily due to the addition of auto branch offices and loan processing and servicing staff. The provision for loan losses increased to $8.6 million for the three months ended March 31, 2001, from $4.0 million for the three months ended March 31, 2000, due to higher average amounts of receivables held for sale. As a percentage of average receivables held for sale, the provision for loan losses was 3.0% for the three months ended March 31, 2001 and 2000. Interest expense increased to $30.9 million for the three months ended March 31, 2001, from $17.9 million for the three months ended March 31, 2000, due to higher debt levels. Average debt outstanding was $1,377.1 million and $709.0 million for the three months ended March 31, 2001 and 2000, respectively. The Company's effective rate of interest paid on its debt decreased to 9.1% for the three months ended March 31, 2001, from 10.1% for the three months ended March 31, 2000, due to lower short term interest rates. The Company's effective income tax rate was 38.5% for the three months ended March 31, 2001 and 2000. 22 Nine Months Ended March 31, 2001 as compared to - ----------------------------------------------- Nine Months Ended March 31, 2000 -------------------------------- Revenue: The Company's average managed receivables outstanding consisted of the following (in thousands): Nine Months Ended March 31, ------------------------------ 2001 2000 -------------- -------------- Auto: Held for sale $ 975,265 $ 496,599 Serviced 6,857,243 4,514,551 -------------- -------------- 7,832,508 5,011,150 Mortgage 3,379 27,431 -------------- -------------- $7,835,887 $5,038,581 ============== ============== Average managed receivables outstanding increased by 56% as a result of higher loan purchase volume. The Company purchased $4,440.9 million of auto loans during the nine months ended March 31, 2001, compared to purchases of $3,167.8 million during the nine months ended March 31, 2000. This growth resulted from loan production at branches open during both periods as well as expansion of the Company's branch network. Loan purchases at branch offices opened prior to March 31, 1999, were 17% higher for the twelve months ended March 31, 2001, versus the twelve months ended March 31, 2000. The Company operated 217 auto lending branch offices as of March 31, 2001, compared to 186 as of March 31, 2000. The average new loan size was $15,219 for the nine months ended March 31, 2001, compared to $14,128 for the nine months ended March 31, 2000. The average annual percentage rate for loans purchased during the nine months ended March 31, 2001, was 19.2%, compared to 18.7% during the nine months ended March 31, 2000. The increased annual percentage rate is the result of pricing increases implemented in the third quarter of fiscal 2000 in response to rising short-term interest rates. Finance charge income consisted of the following (in thousands): Nine Months Ended March 31, ------------------------------ 2001 2000 -------------- -------------- Auto $158,512 $84,449 Mortgage 1,057 -------------- -------------- $158,512 $85,506 ============== ============== 23 The increase in finance charge income is due primarily to an increase of 96% in average auto receivables held for sale in the nine months ended March 31, 2001, versus the nine months ended March 31, 2000. The Company's effective yield on its auto receivables held for sale decreased to 21.7% for the nine months ended March 31, 2001, from 22.6% for the nine months ended March 31, 2000. The effective yield is higher than the contractual rates of the Company's auto finance contracts as a result of finance charge income earned between the date the auto finance contract is originated by the automobile dealership and the date the auto finance contract is funded by the Company. The effective yield decreased for the nine months ended March 31, 2001, due to lower levels of finance charges earned between the origination date and funding date. The gain on sale of receivables consisted of the following (in thousands): Nine Months Ended March 31, ------------------------------ 2001 2000 -------------- -------------- Auto $212,433 $149,654 Mortgage 1,511 -------------- -------------- $212,433 $151,165 ============== ============== The increase in gain on sale of auto receivables resulted from the sale of $3,800.0 million of receivables in the nine months ended March 31, 2001, as compared to $2,925.0 million of receivables sold in the nine months ended March 31, 2000. The gain as a percentage of the sales proceeds increased to 5.6% for the nine months ended March 31, 2001, from 5.1% for the nine months ended March 31, 2000, as a result of a decrease in U.S. Treasury and other short term interest rates. Significant assumptions used in determining the gain on sale of auto receivables were as follows: Nine Months Ended March 31, ------------------------------ 2001 2000 -------------- -------------- Cumulative credit losses (including deferred gains) 11.2% 10.9% Discount rate used to estimate present value: Interest-only receivables from Trusts 14.0% 12.0% Investment in Trust receivables 9.8% 7.8% Restricted cash 9.8% 7.8% The discount rates used to estimate the present value of credit enhancement assets are based on the relative risks of each asset type. Interest-only receivables represent estimated future excess cash flows in the Trusts, which involves a greater degree of risk than investments in Trust receivables and restricted cash. Investments in Trust receivables and restricted cash 24 represent assets currently held by the Trustee and are senior to the interest- only receivables for credit enhancement purposes. Servicing fee income increased to $197.1 million, or 3.8% of average serviced auto receivables, for the nine months ended March 31, 2001, as compared to $120.5 million, or 3.6% of average serviced auto receivables, for the nine months ended March 31, 2000. Servicing fee income represents accretion of the present value discount on estimated future excess cash flows from the Trusts, base servicing fees and other fees earned by the Company as servicer of the auto receivables sold to the Trusts. The growth in servicing fee income is attributable to the increase in average serviced auto receivables outstanding for the nine months ended March 31, 2001, compared to the nine months ended March 31, 2000. Costs and Expenses: Operating expenses as an annualized percentage of average managed receivables outstanding decreased to 3.7% for the nine months ended March 31, 2001, compared to 4.3% (4.2% excluding operating expenses of $2.1 million related to the mortgage business) for the nine months ended March 31, 2000. The ratio improved as a result of economies of scale realized from a growing receivables portfolio and automation of loan origination, processing and servicing functions. The dollar amount of operating expenses increased by $57.8 million, or 36%, primarily due to the addition of auto lending branch offices and management and auto loan processing and servicing staff. The provision for loan losses increased to $22.0 million for the nine months ended March 31, 2001, from $11.2 million for the nine months ended March 31, 2000, due to higher average amounts of auto receivables held for sale. As a percentage of average receivables held for sale, the provision for loan losses was 3.0% for the nine months ended March 31, 2001 and 2000. Interest expense increased to $87.5 million for the nine months ended March 31, 2001, from $48.3 million for the nine months ended March 31, 2000, due to higher debt levels. Average debt outstanding was $1,191.4 million and $649.3 million for the nine months ended March 31, 2001 and 2000, respectively. The Company's effective rate of interest paid on its debt was 9.8% and 9.9% for the nine months ended March 31, 2001 and 2000, respectively. The Company's effective income tax rate was 38.5% and 40.5% for the nine months ended March 31, 2001 and 2000, respectively. The effective income tax rate was higher for the nine months ended March 31, 2000, due to the non-deductible write-off of goodwill from the closing of the mortgage operations. 25 PRO FORMA PORTFOLIO-BASED EARNINGS DATA In addition to reporting results of operations in accordance with generally accepted accounting principles ("GAAP"), the Company has elected to present pro forma results of operations which treat securitization transactions as financings rather than sales of receivables. The Company refers to this presentation as pro forma portfolio-based earnings data. In its consolidated financial statements prepared in accordance with GAAP, the Company records a gain on the sale of receivables in securitization transactions primarily representing the present value of estimated future excess cash flows related to the receivables sold. Future excess cash flows consist of finance charges and fees to be collected on the receivables less interest payable on the asset-backed securities, credit losses and expenses of the Trusts. The Company also earns servicing fees for managing the receivables sold. The pro forma portfolio-based earnings data presents the Company's operating results under the assumption that securitization transactions are financings and no gain on sale or servicing fee income is recognized. Instead, finance charges and fees are recognized over the life of the securitized receivables as accrued and interest and other costs related to the asset-backed securities are also recognized as accrued. Credit losses are recorded as incurred. While the pro forma portfolio-based earnings data does not purport to present the Company's operating results in accordance with GAAP, the Company believes such presentation provides another measure for assessing the Company's performance. The pro forma portfolio-based earnings data were as follows (in thousands):
Three Months Ended Nine Months Ended March 31, March 31, ------------------------ -------------------------- 2001 2000 2001 2000 (1) ------------------------ -------------------------- Finance charge, fee and other income $ 420,673 $ 272,093 $1,163,248 $ 737,163 Funding costs (165,019) (107,991) (461,117) (282,742) ------------------------ -------------------------- Net margin 255,654 164,102 702,131 454,421 Credit losses (77,042) (53,997) (213,815) (154,904) Operating expenses (79,342) (55,488) (219,837) (162,031) ------------------------ -------------------------- Pre-tax portfolio-based income 99,270 54,617 268,479 137,486 Income taxes (38,219) (21,028) (103,364) (52,933) ------------------------ -------------------------- Net portfolio-based income $ 61,051 $ 33,589 $ 165,115 $ 84,553 ======================== ========================== Diluted portfolio-based earnings per share $ 0.70 $ 0.43 $ 1.95 $ 1.10 ======================== ==========================
(1) The pro forma portfolio-based earnings data for the nine month period ended March 31, 2000, excludes the charge for the closing of the Company's mortgage business. 26 The pro forma return on managed assets for the Company's auto business was as follows:
Three Months Ended Nine Months Ended March 31, March 31, ------------------------- ------------------------- 2001 2000 2001 2000 ------------------------- ------------------------- Finance charge, fee and other income 19.8% 19.6% 19.8% 19.5% Funding costs (7.8) (7.8) (7.9) (7.5) ------------------------- ------------------------- Net margin 12.0 11.8 11.9 12.0 Credit losses (3.6) (3.9) (3.6) (4.1) ------------------------- ------------------------- Risk adjusted margin 8.4 7.9 8.3 7.9 Operating expenses (3.7) (4.0) (3.7) (4.2) ------------------------- ------------------------- Pre-tax return on managed assets 4.7 3.9 4.6 3.7 Income taxes (1.8) (1.5) (1.8) (1.4) ------------------------- ------------------------- Return on managed assets 2.9% 2.4% 2.8% 2.3% ========================= =========================
CREDIT QUALITY The Company provides financing in relatively high-risk markets, and, therefore, charge-offs are anticipated. The Company records a periodic provision for loan losses as a charge to operations and a related allowance for loan losses in the consolidated balance sheets as a reserve against estimated probable losses which may occur in the receivables held for sale portfolio prior to the sale of such receivables in securitization transactions. The Company typically purchases individual finance contracts and collects a non-refundable acquisition fee on a non-recourse basis. Such acquisition fees are also recorded in the consolidated balance sheets as an allowance for loan losses. When the Company sells auto receivables to the Trusts, the calculation of the gain on sale of receivables is reduced by an estimate of cumulative credit losses expected over the life of the auto receivables sold. The Company reviews static pool origination and charge-off relationships, charge-off experience factors, collection data, delinquency reports, estimates of the value of the underlying collateral, economic conditions and trends and other information in order to make the necessary judgments as to the appropriateness of the assumptions for cumulative credit losses, provisions for loan losses and allowance for loan losses. Although the Company uses many resources to assess the adequacy of loss reserves, there is no precise method for estimating the ultimate losses in the receivables portfolio. 27 The following table presents certain data related to the receivables portfolio (dollars in thousands):
March 31, 2001 ----------------------------------------------------------- Held for Sale Auto Managed Auto -------------------------------- Auto Mortgage Total Serviced Portfolio ---------- --------- ----------- ----------- ------------ Principal amount of receivables $1,524,264 $2,279 $1,526,543 $7,576,990 $9,101,254 =========== ============ Allowance for loan losses (43,383) (43,383) $(773,991)(a) $(817,374) ---------- --------- ----------- =========== ============ Receivables, net $1,480,881 $2,279 $1,483,160 ========== ========= =========== Number of outstanding contracts 104,718 18 646,067 750,785 ========== ========= =========== ============ Average principal amount of outstanding contract (in dollars) $ 14,556 $126,611 $11,728 $12,122 ========== ========= =========== ============ Allowance for loan losses as a percentage of receivables 2.8% 10.2% 9.0% ========== =========== ============
(a) The allowance for loan losses related to serviced auto receivables is factored into the valuation of interest-only receivables from Trusts in the Company's consolidated balance sheets. The following is a summary of managed auto receivables which are (i) more than 30 days delinquent, but not yet in repossession, and (ii) in repossession (dollars in thousands):
March 31, 2001 March 31, 2000 --------------------------- -------------------------- Amount Percent Amount Percent --------------- ----------- -------------- ----------- Delinquent contracts: 31 to 60 days $596,609 6.6% $360,169 6.0% Greater than 60 days 208,611 2.3 123,936 2.1 --------------- ----------- -------------- ----------- 805,220 8.9 484,105 8.1 In repossession 93,293 1.0 45,089 0.8 --------------- ----------- -------------- ----------- $898,513 9.9% $529,194 8.9% =============== =========== ============== ===========
In accordance with its policies and guidelines, the Company at times offers payment deferrals to consumers, whereby the consumer is allowed to move a delinquent payment to the end of the loan by paying a fee (approximately the interest portion of the payment deferred). Contracts receiving a payment deferral as an average quarterly percentage of average managed auto receivables outstanding were 4.6% and 4.8% for the three and nine months ended March 31, 2001, respectively, and 4.0% and 4.3% for the three and nine months ended March 31, 2000, respectively. The Company believes that payment deferrals granted according to its policies and guidelines are an effective portfolio management technique and result in higher ultimate cash collections from the portfolio. 28 The following table presents charge-off data with respect to the Company's managed auto receivables portfolio (dollars in thousands):
Three Months Ended Nine Months Ended March 31, March 31, ------------------------- ------------------------- 2001 2000 2001 2000 ------------------------- ------------------------- Net charge-offs: Held for sale $ 4,565 $ 2,467 $ 10,788 $5,851 Serviced 72,477 51,530 203,027 149,053 ------------------------- ------------------------- $77,042 $53,997 $213,815 $154,904 ========================= ========================= Net charge-offs as an annualized percentage of average managed auto receivables outstanding 3.6% 3.9% 3.6% 4.1% ========================= ========================= Net recoveries as a percentage of gross repossession charge-offs 51.3% 53.5% 51.5% 53.2% ========================= =========================
Delinquency and charge-off ratios typically fluctuate over time as a portfolio matures. Accordingly, the delinquency and charge-off data above is not necessarily indicative of delinquency and charge-off experience that could be expected for a portfolio with a different level of seasoning. LIQUIDITY AND CAPITAL RESOURCES The Company's cash flows are summarized as follows (in thousands):
Nine Months Ended March 31, ------------------------------ 2001 2000 -------------- -------------- Operating activities $164,988 $ 35,873 Investing activities (794,756) (333,493) Financing activities 688,363 327,249 -------------- -------------- Net increase in cash and cash equivalents $ 58,595 $ 29,629 ============== ==============
The Company's primary sources of cash have been cash flows from operating activities, including cash distributions from the Trusts, borrowings under its warehouse credit facilities and sales of auto receivables to Trusts in securitization transactions. The Company's primary uses of cash have been purchases of receivables and funding credit enhancement requirements for securitization transactions. The Company required cash of $4,435.5 million and $3,166.7 million for the purchase of auto finance contracts during the nine months ended March 31, 2001 and 2000, respectively. These purchases were funded initially utilizing warehouse credit facilities and subsequently through the sale of auto receivables in securitization transactions. 29 The Company has five separate commercial paper warehouse credit facilities with combined funding capacity of approximately $2.0 billion, which are used to fund domestic auto receivables pending securitization. The first funding agreement is with an administrative agent on behalf of an institutionally managed commercial paper conduit and a bank and provides for up to $500 million of available structured warehouse financing. The facility matures in June 2001. A total of $361.6 million was outstanding under this facility as of March 31, 2001. The second funding agreement is with an administrative agent on behalf of an institutionally managed commercial paper conduit and a bank and provides for up to $300 million of available structured warehouse financing. The facility matures in June 2001. A total of $139.1 million was outstanding under this facility as of March 31, 2001. The third funding agreement is with an administrative agent on behalf of an institutionally managed commercial paper conduit and a group of banks and provides for up to $525 million of available structured warehouse financing. The facility matures in September 2001. A total of $59.6 million was outstanding under this facility as of March 31, 2001. The fourth funding agreement is with an administrative agent on behalf of an institutionally managed commercial paper conduit and a group of banks and provides for up to $275 million of available structured warehouse financing. The facility matures in September 2001. A total of $69.4 million was outstanding under this facility as of March 31, 2001. In March 2001, the Company renewed its funding agreement with an administrative agent on behalf of an institutionally managed commercial paper conduit and a bank, increasing the amount that may be borrowed from $375 million to $400 million. The facility matures in March 2002. There were no outstanding balances under this agreement as of March 31, 2001. The Company also has a funding agreement with an administrative agent on behalf of an institutionally managed medium term note conduit under which $500 million of proceeds are available through the term of the agreement. This facility matures in December 2003. The funding agreement allows for the substitution of auto receivables (subject to an over-collateralization formula) for cash, and vice versa, thus allowing the Company to use the proceeds to finance auto receivables on a revolving basis. In March 2001, the Company's Canadian subsidiary extended its convertible revolving term credit agreement with a bank. The facility provides for borrowings of up to $30 million Cdn., subject to a defined borrowing base. The Company utilizes this facility to fund Canadian auto lending activities. The facility matures in May 2001. A total of $18.6 million was outstanding under the Canadian facility as of March 31, 2001. 30 As is customary in the Company's industry, the majority of the Company's warehouse credit facilities need to be renewed on an annual basis. The Company has historically been successful in renewing and expanding these facilities on an annual basis. If the Company was unable to renew these facilities on acceptable terms, there could be a material adverse effect on the Company's financial position, results of operations and liquidity. The Company has completed twenty-five auto receivable securitization transactions through March 31, 2001. The proceeds from the transactions were primarily used to repay borrowings outstanding under the Company's warehouse credit facilities. A summary of these transactions is as follows (dollars in millions):
Original Balance at Transaction Date Amount March 31, 2001 - ----------------- -------------------------- ------------------ ----------------------- 1994-A December 1994 $ 51.0 Paid in full 1995-A June 1995 99.2 Paid in full 1995-B December 1995 65.0 Paid in full 1996-A March 1996 89.4 Paid in full 1996-B May 1996 115.9 Paid in full 1996-C August 1996 175.0 Paid in full 1996-D November 1996 200.0 Paid in full 1997-A March 1997 225.0 Paid in full 1997-B May 1997 250.0 Paid in full 1997-C August 1997 325.0 $ 34.9 1997-D November 1997 400.0 56.8 1998-A February 1998 425.0 76.0 1998-B May 1998 525.0 113.4 1998-C August 1998 575.0 153.8 1998-D November 1998 625.0 196.4 1999-A February 1999 700.0 253.9 1999-B May 1999 1,000.0 438.0 1999-C August 1999 1,000.0 526.4 1999-D October 1999 900.0 514.3 2000-A February 2000 1,300.0 865.1 2000-B May 2000 1,200.0 912.5 2000-C August 2000 1,100.0 929.6 2000-1 November 2000 495.0 432.2 2000-D November 2000 600.0 560.1 2001-A February 2001 1,400.0 1,374.4 ------------------ ----------------------- $13,840.5 $7,437.8 ================== =======================
31 In connection with securitization transactions, the Company is required to fund certain credit enhancement levels in order to attain specific credit ratings for the asset-backed securities issued by the Trusts. The Company typically makes an initial deposit to a restricted cash account and subsequently uses excess cash flows generated by the Trusts to either increase the restricted cash account or repay the outstanding asset-backed securities on an accelerated basis, thus creating additional credit enhancement through overcollateralization in the Trusts. When the credit enhancement levels reach specified percentages of the Trust's pool of receivables, excess cash flows are distributed to the Company. Although the aggregate amount of excess cash flow does not change, the timing of the Company's receipt of excess cash flow distributions is dependent on the type of structure used. Since November 1997, the Company has employed structures that utilize reinsurance and other alternative credit enhancements. Under these structures, the Company expects to begin to receive excess cash flow distributions approximately 14 to 16 months after receivables are securitized. The reinsurance used to reduce the Company's initial cash deposit in a type of structure described above has typically been arranged by the insurer of the asset-backed securities. As of March 31, 2001, the Company had commitments from the insurer for an additional $350.5 million of reinsurance to reduce initial cash deposits in future securitization transactions. These commitments expire in December 2002. In addition, the Company has a credit enhancement facility with a financial institution under which the Company may borrow up to $225 million to fund a portion of the initial cash deposit in future securitization transactions, similar to the amount covered by the reinsurance described above. Borrowings under the credit enhancement facility, which matures in October 2001, are collateralized by the Company's credit enhancement assets. A total of $60.8 million was outstanding under this facility at March 31, 2001. In November 2000, the Company completed a securitization transaction (2000-1) involving the sale of subordinate asset-backed securities in order to provide credit enhancement for the senior asset-backed securities and protect investors from losses. Each of the Company's previous securitization transactions included the sale of senior asset-backed securities only and the purchase of a financial guarantee insurance policy for the benefit of investors. The subordinate asset-backed securities replace a portion of the Company's initial credit enhancement deposit otherwise required in a securitization transaction in a manner similar to the utilization of reinsurance described in the preceding paragraph. For the nine months ended March 31, 2001, initial deposits for credit enhancement purposes were $150.0 million, of which $57.0 million were funded by borrowings under the credit enhancement facility. For the nine months ended March 31, 2000, initial deposits for credit enhancement purposes were $132.8 million, of which $45.0 million were funded by borrowings under the credit enhancement facility. Excess cash flows distributed to the Company were $158.6 million and $79.4 million for the nine months ended March 31, 2001 and 2000, respectively. 32 Certain agreements with the insurer provide that if delinquency, default and net loss ratios in a Trust's pool of receivables exceed certain targets, the specified credit enhancement levels would be increased. As of March 31, 2001, none of the Company's securitizations had default or net loss ratios in excess of the targeted levels. The Company operated 217 auto lending branch offices as of March 31, 2001, and plans to open an additional 10 to 15 branches through the remainder of fiscal 2001 and expand loan production capacity at existing auto lending branch offices where appropriate. While the Company has been able to establish and grow its auto finance business thus far, there can be no assurance that future expansion will be successful due to competitive, regulatory, market, economic or other factors. As of March 31, 2001, the Company had $101.5 million in cash and cash equivalents. The Company also had available borrowing capacity of $163.4 million under its warehouse credit facilities pursuant to the borrowing base requirements of such agreements. The Company believes that its existing capital resources along with expected cash flows from operating activities will be sufficient to fund the Company's liquidity needs, exclusive of the purchase of auto finance contracts, through the remainder of fiscal 2001 and fiscal 2002. However, the Company anticipates that it will require additional external capital in the form of securitization transactions, renewal and expansion of its existing warehouse credit facilities and implementation of new warehouse credit facilities in order to fund auto loan purchases through the remainder of fiscal 2001 and fiscal 2002. There can be no assurance that funding will be available to the Company through these sources or, if available, that it will be on terms acceptable to the Company. INTEREST RATE RISK The Company's earnings are affected by changes in interest rates as a result of its dependence upon the issuance of interest-bearing securities and the incurrence of debt to fund its lending activities. Several factors can influence the Company's ability to manage interest rate risk. First, auto finance contracts are purchased at fixed interest rates, while the amounts borrowed under warehouse credit facilities bear interest at variable rates that are subject to frequent adjustment to reflect prevailing market interest rates. Second, the interest rate demanded by investors in securitizations is a function of prevailing market rates for comparable transactions and the general interest rate environment. Because the auto finance contracts purchased by the Company have fixed interest rates, the Company bears the risk of smaller gross interest rate spreads in the event interest rates increase during the period between the date receivables are purchased and the completion and pricing of securitization transactions. 33 The Company utilizes several strategies to minimize the risk of interest rate fluctuations, including the use of derivative financial instruments, the regular sale of auto receivables to the Trusts and pre-funding of securitization transactions. Pre-funding securitizations is the practice of issuing more asset-backed securities than the amount of receivables initially sold to the Trust. The proceeds from the pre-funded portion are held in an escrow account until additional receivables are sold to the Trust in amounts up to the balance of the pre-funded escrow account. In pre-funded securitizations, borrowing costs are locked in with respect to the loans subsequently delivered to the Trust. However, the Company incurs an expense in pre-funded securitizations equal to the difference between the money market yields earned on the proceeds held in escrow prior to subsequent delivery of receivables and the interest rate paid on the asset-backed securities outstanding. Derivative financial instruments are utilized to manage the gross interest rate spread on the Company's securitization transactions. The Company sells fixed rate auto receivables to Trusts that, in turn, sell either fixed rate or floating rate securities to investors. The fixed rates on securities issued by the Trusts are indexed to either rates on U.S. Treasury Notes with similar average maturities, market interest rate swap spreads for transactions of similar duration, or various London Interbank Offered Rates ("LIBOR"). The interest rates on the floating rate securities issued by the Trusts are indexed to LIBOR. The Company uses Interest Rate Swap agreements to convert the floating rate exposures on these securities to a fixed rate. The Company utilizes these derivative financial instruments to modify its net interest sensitivity to levels deemed appropriate based on the Company's risk tolerance. The Company also utilizes interest rate caps as part of its interest-rate risk-management strategy for securitization transactions as well as for warehouse credit facilities. The purchaser of the interest rate cap pays a premium in return for the right to receive the difference in the interest cost at any time a specified index of market interest rates rises above the stipulated "cap" rate. The interest rate cap purchaser bears no obligation or liability if interest rates fall below the "cap" rate. The Company's special purpose finance subsidiaries are contractually required to purchase interest rate cap agreements as credit enhancement in connection with securitization transactions and warehouse credit facilities. The Company simultaneously sells a corresponding interest rate cap agreement in order to offset the purchased interest rate cap agreement. Management monitors the Company's hedging activities to ensure that the value of hedges, their correlation to the contracts being hedged and the amounts being hedged continue to provide effective protection against interest rate risk. All transactions are entered into for purposes other than trading. 34 There can be no assurance that the Company's strategies will be effective in minimizing interest rate risk or that increases in interest rates will not have an adverse effect on the Company's profitability. CURRENT ACCOUNTING PRONOUNCEMENTS In September 2000, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, a replacement of Financial Accounting Standards Board Statement No. 125" ("SFAS 140"), which revises the standards for accounting for securitizations and other transfers of financial assets and collateral and requires certain disclosures, but, carries over most of Statement No. 125's provisions without reconsideration. SFAS 140 is effective for transfers and servicing of financial assets and extinguishments of liabilities occurring after March 31, 2001, and is effective for disclosures relating to securitization transactions and collateral and for the recognition and reclassification of collateral for fiscal years ending after December 15, 2000. The Company does not believe that the adoption of this statement will have a material effect on the Company's financial position or results of operations. FORWARD LOOKING STATEMENTS The preceding Management's Discussion and Analysis of Financial Condition and Results of Operations section contains several "forward-looking statements". Forward-looking statements are those which use words such as "believe", "expect", "anticipate", "intend", "plan", "may", "will", "should", "estimate", "continue" or other comparable expressions. These words indicate future events and trends. Forward-looking statements are the Company's current views with respect to future events and financial performance. These forward-looking statements are subject to many risks and uncertainties which could cause actual results to differ significantly from historical results or from those anticipated by the Company. The most significant risks are detailed from time to time in the Company's filings and reports with the Securities and Exchange Commission including the Company's Annual Report on Form 10-K for the year ended June 30, 2000. It is advisable not to place undue reliance on the Company's forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Because the Company's funding strategy is dependent upon the issuance of interest-bearing securities and the incurrence of debt, fluctuations in interest rates impact the Company's profitability. Therefore, the Company employs various hedging strategies to minimize the risk of interest rate fluctuations. See "Management's Discussion and Analysis - Interest Rate Risk" for additional information regarding such market risks. 35 Part II. OTHER INFORMATION Item 1. LEGAL PROCEEDINGS As a consumer finance company, the Company is subject to various consumer claims and litigation seeking damages and statutory penalties, based upon, among other things, usury, disclosure inaccuracies, wrongful repossession, fraud and discriminatory treatment of credit applicants, which could take the form of a plaintiffs' class action complaint. The Company, as the assignee of finance contracts originated by dealers, may also be named as a co-defendant in lawsuits filed by consumers principally against dealers. The damages and penalties claimed by consumers in these types of matters can be substantial. The relief requested by the plaintiffs varies but includes requests for compensatory, statutory and punitive damages. One proceeding in which the Company is a defendant has been brought in the form of a class action complaint. This lawsuit, pending in Superior Court in the State of California, claims that certain loan pricing structures used by the Company violate various California laws. This lawsuit previously included multiple other banks and finance companies as co-defendants; however, in a ruling during the quarter ended March 31, 2001, the Court severed the claims into separate cases against each defendant. In the opinion of management, this lawsuit is without merit and the Company intends to defend vigorously. Management believes that the Company has taken prudent steps to address the litigation risks associated with the Company's business activities. However, there can be no assurance that the Company will be able to successfully defend against all such claims or that the determination of any such claim in a manner adverse to the Company would not have a material adverse effect on the Company's automobile finance business. In the opinion of management, the resolution of the proceedings described in this section will not have a material adverse effect on the Company's consolidated financial position, liquidity or results of operations. Item 2. CHANGES IN SECURITIES Not Applicable Item 3. DEFAULTS UPON SENIOR SECURITIES Not Applicable Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not Applicable 36 Item 5. OTHER INFORMATION Not Applicable Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: 10.1 Fourth Amendment to Receivables Financing Agreement and Third Amendment to CSFB Joinder entered into as of March 27, 2001, among AmeriCredit Warehouse Trust, AmeriCredit Financial Services, Inc., individually and as initial Servicer and Custodian, AmeriCredit Funding Corp., AmeriCredit Corporation of California, Credit Suisse First Boston, New York Branch, as agent for the Lenders and as Proposed Lender under the CSFB Joinder, and Bank One, NA, as Backup Servicer and Collateral Agent. 11.1 Statement Re: Computation of Per Share Earnings (b) Reports on Form 8-K A report on Form 8-K was filed January 12, 2001, with the Commission to report under Item 5 the Company's earnings for its quarterly period ended December 31, 2000. A report on Form 8-K was filed January 5, 2001, with the Commission to report the adoption of a Stock Selling Plan by Clifton H. Morris, Jr., the Company's Chairman of the Board. A subsequent report on Form 8-K was filed on March 27, 2001, to report the termination of such Plan by Mr. Morris. Certain subsidiaries and affiliates of the Company filed reports on Form 8-K during the quarterly period ended March 31, 2001, reporting monthly information related to securitization trusts. 37 SIGNATURE 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 thereunto duly authorized. AmeriCredit Corp. ------------------------------------------- (Registrant) Date: May 15, 2001 By: /s/ Daniel E. Berce ------------------------------------------- (Signature) Daniel E. Berce Vice Chairman and Chief Financial Officer 38 EX-10.1 2 dex101.txt FOURTH AMENDMENT TO RECEIVABLES FINANCING AGREEMENT Exhibit 10.1 FOURTH AMENDMENT TO RECEIVABLES FINANCING AGREEMENT AND ------------------------------------------------------- THIRD AMENDMENT TO CSFB JOINDER ------------------------------- FOURTH AMENDMENT TO RECEIVABLES FINANCING AGREEMENT AND THIRD AMENDMENT TO CSFB JOINDER (the "Amendment") is made and entered into as of March 27, 2001, --------- among AMERICREDIT WAREHOUSE TRUST, a Delaware business trust (the "Borrower"), ------- AMERICREDIT FINANCIAL SERVICES, INC., a Delaware corporation, individually ("AFS") and as initial Servicer and Custodian, AMERICREDIT FUNDING CORP., a --- Delaware corporation ("AFC"), AMERICREDIT CORPORATION OF CALIFORNIA, a --- California corporation ("ACC"), CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH --- ("CSFB"), as agent (the "Agent") for the Lenders (as defined in the Agreement ---- ----- referred to below) and as Proposed Lender under the CSFB Joinder (as hereinafter defined), and BANK ONE, N.A., a national banking association, as Backup Servicer and Collateral Agent. W I T N E S S E T H : ------------------- WHEREAS, the Borrower, AFS, individually and as Servicer and Custodian, AFC, ACC, the Lenders, the Agent and Bank One, N.A., as Backup Servicer and Collateral Agent, are parties to a certain Receivables Financing Agreement dated as of March 31, 1999 (as amended by the First Amendment to Receivables Financing Agreement dated as of April 30, 1999, the Second Amendment to Receivables Financing Agreement and Amendment to CSFB Joinder (the "Second Amendment") dated ---------------- as of June 24, 1999, and the Third Amendment to Receivables Financing Agreement dated as of October 5, 2000, the "Agreement"); and --------- WHEREAS, the parties hereto desire to amend the Agreement and the Joinder Supplement dated March 31, 1999 and executed by CSFB as Proposed Lender (as amended by the Second Amendment and the Second Amendment to CSFB Joinder dated as of June 30, 1999, the "CSFB Joinder") in the manner, and on the terms ------------ and conditions herein provided. NOW, THEREFORE, in consideration of the mutual covenants herein contained, and other good and valuable consideration, the receipt and adequacy of which are hereby expressly acknowledged, the parties hereto agree as follows: 1. Definitions. Unless otherwise defined herein, all terms used herein ----------- which are defined in the Agreement shall have the meanings assigned thereto in the Agreement. 2. Amendments to Agreement. As of the Fourth Amendment Effective Date (as ----------------------- hereinafter defined), the Agreement shall be amended as follows: (a) The following definitions contained in Section 1.1 of the Agreement shall be amended as set forth below: "Borrowing Base" - Clause (iii) of such definition shall be amended in -------------- ----------- its entirety to read "(iii) (without duplication) the aggregate of the amount on deposit in the Lockbox Account and the Collection Account on such day which constitute principal payments on the Transferred Receivables and which are available for distribution on such day pursuant to Section 3 of the Security Agreement;" "Clean-Up Period" - This definition shall be amended to read in its --------------- entirety as follows: "Clean-Up Period" shall mean the period commencing on the date of --------------- the initial Advance hereunder and ending on June 30, 1999, each calendar quarter thereafter through the calendar quarter ending March 31, 2001, and each six-month period thereafter, with the first such six-month period commencing on April 1, 2001. "Defaulted Receivable" - Delete the word "Transferred" where the same -------------------- appears in the first line of such definition. "Deficiency Percentage" - the parenthetical "(rounded upward to the --------------------- nearest 1.0%)" shall be deleted; and "8.75%" contained in clause ------ (a)(i) of such definition shall be changed to "8.5%." ------ "Delinquency Ratio" - The term "Delinquent Receivables" appearing in ----------------- clause (ii) of paragraph (a) of such definition shall be changed to ----------- ------------- "Portfolio Delinquent Receivables." "Eligible Receivables" - This definition shall be amended to read in -------------------- its entirety as set forth in Annex 1 hereto. ------- "Facility Limit" - Clause (x) of such definition shall be changed to -------------- ---------- read "(x) $400,000,000". "Maximum Interest Rate Cap Strike Price" - "8.75%" contained in clause -------------------------------------- ------ (b)(i) of such definition shall be changed to "8.5%". "Minimum Reserve Account Amount" - This definition shall be amended to ------------------------------ read in its entirety as follows: "Minimum Reserve Account Amount" means, on any date, the greater ------------------------------ of (a) $500,000 and (b) the product of 1.0% and the sum of (i) the aggregate unpaid principal amount of all Advances on such date plus (ii) the Required Holdback in effect on such date. ---- "Portfolio Trigger Event" - The date "April 1, 1998" appearing in such ----------------------- definition shall be changed to "March 27, 1999". -2- "Required Holdback" - This definition shall be amended to read in its ----------------- entirety as follows: "Required Holdback" means, as of any date, the sum of (i) the ----------------- product of (1) the Required Percentage and (2) the Aggregate Outstanding Principal Balance of Eligible Receivables in the Total Receivables Pool on such date; plus (ii) the Deficiency Amount for such date. "Required Percentage" - "12%" appearing in such definition shall be ------------------- changed to "11%". "Servicer Delinquency Ratio" - The term " Delinquent Receivable" -------------------------- appearing in clause (i) of such definition shall be changed to ---------- "Portfolio Delinquent Receivable". "Stated Percentage" - "4%" appearing in clause (a) of such definition ----------------- shall be changed to "6%". (b) The following new definition shall be added to Section 1.1 of ----------- the Agreement in appropriate alphabetical order: "Portfolio Delinquent Receivable" means a Receivable with respect ------------------------------- to which more than 5% of a Scheduled Payment is more than 60 days past due. (c) Section 2.5(b) of the Agreement shall be amended by deleting -------------- "$375,000,000" where the same appears in such Section and inserting, in lieu thereof, "$400,000,000". (d) Section 11.8 of the Agreement shall be amended by adding at the ------------ end of such Section "though the calendar quarter ending March 31, 2001 and thereafter once during each successive six-month period." (e) Section 13.1(i) of the Agreement shall be amended by deleting --------------- "15.5%" where the same appears in such Section and inserting, in lieu thereof, "5.5%". (f) Section 14.1(i) of the Agreement shall be amended by deleting --------------- "2.5%" where the same appears in such Section and inserting, in lieu thereof, "3.0%". (g) Section 14.1(m) of the Agreement shall be amended by deleting --------------- "215" where the same appears in such Section and inserting, in lieu thereof, "224". (h) Section 14.1(l) of the Agreement shall be amended by deleting the --------------- ratings "B-" and "B1" each time they appear in such Section and inserting, in lieu thereof, "BB-" and "Ba3", respectively. -3- (i) Section 14.1(p) of the Agreement shall be amended by adding at --------------- the end of such Section "and such reduction or withdrawal shall remain in effect for more than 15 days". (j) Section 14.1(u) of the Agreement shall be amended by deleting --------------- "$200,000,000" where the same appears in such Section and inserting, in lieu thereof, "$700,000,000". (k) A new Schedule 1 shall be added to the Agreement to read in its ---------- entirety as set forth in Schedule 1 hereto. (l) The parties hereto acknowledge that the Intercreditor Agreement and the Wells Fargo Documents have terminated and, accordingly (i) all references to such Intercreditor Agreement, to Wells Fargo in its capacity as party thereto and to the Wells Fargo Documents in the Agreement shall be deemed to be deleted and (ii) Section 7.3(j) of the Agreement shall be amended in its -------------- entirety to read "(j) [Reserved]". -------- (3) Amendment to CSFB Joinder. As of the Fourth Amendment Effective Date, ------------------------- the CSFB Joinder shall be amended by deleting "Commitment - $375,000,000" where the same appears in Item 4 of Schedule 1 to the CSFB Joinder and inserting, in lieu thereof, "Commitment - $400,000,000". Each of the Agent, AFS and the Borrower consents to the aforesaid amendment to the CSFB Joinder pursuant to Section 2.5(b) of the Agreement. - -------------- 4. Limitations. The amendments set forth in Sections 2 and 3 above are ----------- limited precisely as written and shall not be deemed to (x) be a consent to any waiver of, or modification of, any other term or condition of the Agreement, the CSFB Joinder or any of the documents referred to therein or (y) prejudice any right or rights which the Agent, CSFB or any Lender may now have or may have in the future under or in connection with the Agreement, the CSFB Joinder or any of the documents referred to therein. Except as expressly amended hereby, the terms and provisions of the Agreement and the CSFB Joinder shall remain in full force and effect . 5. Representations and Warranties. Each of the parties hereto severally ------------------------------ represents and warrants that all acts, filings and conditions required to be done and performed and to have happened (including, without limitation, the obtaining of necessary governmental approvals) precedent to the entering into of this Amendment to constitute this Amendment and the Agreement and CSFB Joinder as amended hereby the duly authorized, legal, valid and binding obligation of such party, enforceable in accordance with its terms, have been done, performed and have happened in due and strict compliance with all applicable laws. 6. Effectiveness. This Amendment shall become effective on the date (the ------------- "Fourth Amendment Effective Date") which is the later of (a) March 27, 2001 and ------------------------------- (b) the date when (i) each of the parties hereto shall have executed a counterpart hereof and delivered the same to the Agent, and (ii) the Agent shall have received (v) an amendment fee in the amount of $75,000, (w) the consent of the related Noncommitted Lender to the amendment of the CSFB Joinder effected hereby pursuant to Section 2.5(b) of the Agreement, (x) confirmation from each -------------- of Moody's and S&P that the effectiveness of this Amendment will not adversely affect its "A" rating of the Advances, (y) a Commitment Extension Agreement in substantially the form of -4- Exhibit A hereto duly executed by each of the parties thereto, and each required - --------- consent thereto, and (z) a new Note in the principal amount of $400,000,000 duly completed and executed by the Borrower in replacement of the Note delivered to the Agent pursuant to the Second Amendment which new Note shall be the "Note" for all purposes of the Agreement and the other Transaction Documents. Complete sets of counterparts hereof shall be lodged with the Servicer and the Agent; and the Servicer shall promptly furnish written notice of this Amendment to the Rating Agencies. 7 Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ------------- ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 8 Counterparts. This Amendment may be executed in several counterparts, ------------ each of which shall be regarded as the original and all of which shall constitute one and the same agreement. [Signature Pages to Follow] -5- IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the day and year first above written. AMERICREDIT WAREHOUSE TRUST By: Bankers Trust (Delaware), not in its individual capacity but solely as Trustee By: ____________________________________ Name: Title: AMERICREDIT FINANCIAL SERVICES, INC, individually and as Servicer and Custodian By: _____________________________________ Name: Title: AMERICREDIT FUNDING CORP. By: _____________________________________ Name: Title: AMERICREDIT CORPORATION OF CALIFORNIA By: _____________________________________ Name: Title: -6- CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH, as Agent, on behalf of itself and the Lenders; and as Proposed Lender under the CSFB Joinder By: _____________________________________ Name: Title: By: ___________________________________ Name: Title: BANK ONE, N.A., as Backup Servicer and Collateral Agent By: _____________________________________ Name: Title: -7- Annex 1 ------- Definition of Eligible Receivable --------------------------------- (Changes marked) ---------------- "Eligible Receivable" means a Receivable that (i) was originated by AFS with the consumer directly (a "Consumer Direct Receivable"), or was originated - ------------------------------------------------------------------------------ by a Dealer in the ordinary course of such Dealer's business or by a third party - ---------- ------------------------------------------ lending institution listed on Schedule 1 hereto or otherwise reasonably - ----------------------------------------------------------------------- acceptable to the Agent (a "Third Party Lender" and a Receivable so originated, - ------------------------------------------------------------------------------ a "TPL Receivable") in the ordinary course of its business, in each case, for - ----------------------------------------------------------------------------- the retail sale or refinancing of a Financed Vehicle and such Seller, Dealer or - ------------------------------------------------------------------------------- Third Party Lender had all necessary licenses and permits to originate - ------------------ Receivables in the applicable state, and, if originated by a Dealer or Third ----- Party Lender, was purchased by AFS from such Dealer or Third Party Lender under - ------------ -------------------------------------------- an existing Dealer Agreement or, with respect to a Third Party Lender, an - ------------------------------------------------------------------------- existing purchase agreement with AFS (a "Third Party Purchase Agreement") and - ------------------------------------------------------------------------- was validly assigned by such Dealer or Third Party Lender to AFS, or, with ---------------------------- respect to any Receivable sold to the Borrower by AFC, was purchased by AFC from AFS , (ii) has created or shall create a valid, subsisting and enforceable first priority perfected security interest in favor of AFS in the related Financed Vehicle (which security interest has been assigned to the Borrower and shall be validly assignable by the Borrower to the Collateral Agent on behalf of the Secured Parties), except as enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the enforcement of creditors' rights generally, (iii) was fully and properly executed by the parties thereto and contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for realization against the collateral security, (iv) is a Simple Interest Receivable or Pre-Computed Receivable which provides for level monthly payments (provided that -------- the payment in the first monthly period and the final monthly period of the life of the Receivable may be minimally different from the level payment) which, if made when due, shall fully amortize the Amount Financed over the original term, (v) provides for, in the event that such contract is prepaid, a prepayment that fully pays the principal balance and includes accrued but unpaid interest through the date of prepayment in an amount at least equal to the Annual Percentage Rate, and (vi) except to the extent permitted by this Agreement, has not been amended, waived or rewritten or collections with respect thereto deferred or waived; and (a) with respect to which all requirements of applicable federal, state and local laws, and regulations thereunder (including, without limitation, usury laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade Commission Act, the Magnuson-Moss Warranty Act, the Federal Reserve Board's Regulations "B" and "Z", the Soldiers' and Sailors' Civil Relief Act of 1940, and state adaptations of the National Consumer Act and of the Uniform Consumer Credit Code and other consumer credit laws and equal credit opportunity and disclosure laws), in respect of such Receivable, the sale of the Financed Vehicle related thereto and the sale of credit life and credit accident and health insurance and any extended service contracts, if any, in connection with such Receivable, have been complied with in all material respects; (b) that is a Dollar obligation of an Obligor domiciled in the United States of America and that was originated and, if originated by a Dealer or -- Third Party Lender, was sold by the Dealer or Third Party Lender to AFS , - ----------------- without any fraud or material misrepresentation on the part of such Dealer or Third Party Lender or on the part of the related Obligor; - ----------------- ------- (c) which represents the genuine, legal, valid and binding payment obligation of the Obligor thereon, enforceable by the holder thereof in accordance with its terms, except (A) as enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the enforcement of creditors' rights generally and by equitable limitations on the availability of specific remedies, regardless of whether such enforceability is considered in a proceeding in equity or at law and (B) as such Receivable may be modified by the application of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended; and all parties to such Receivable had full legal capacity to execute and deliver such Receivable and all other documents related thereto and to grant the security interest purported to be granted thereby; (d) which is not due from the United States of America or any State or from any agency, department, subdivision or instrumentality thereof; (e) with respect to which the information set forth in the Schedule of Receivables has been produced from AFS's and, to the extent it maintains separate computer records, AFC's electronic ledger and was true and correct in all material respects, and is a complete and accurate description, on the relevant Purchase Date, of the Receivables sold to the Borrower on such date; and with respect to which, on or prior to the relevant Purchase Date, AFS and, to the extent it maintains separate computer records, AFC has appropriately marked its computer records to indicate the sale to the Borrower of the Receivables sold on such date and with respect to which the Monthly Tape delivered by the Servicer to the Backup Servicer from time to time was complete and accurate as of the date delivered and consistent with the information set forth in the Schedule of Receivables with respect to such Receivable; (f) which (i) as of the related Advance Date, (A) had an original maturity of at least 6 months but not more than 72 months, (B) had an original Amount Financed of at least $1,000 and not more than $50,000, (C) had an Annual Percentage Rate of at least 7.75% and not more than 27.0%, and (D) was not more than 30 days past due; and (ii) with respect to which no funds have been advanced with respect to such Receivable by the Borrower, a Seller, the Servicer, any Dealer, any Third Party Lender or anyone acting on behalf of any ---------------------- of them in order to cause such Receivable to qualify under subclause (i)(D) of ---------------- this clause (f); ---------- -2- (g) which has not been satisfied, subordinated or rescinded, and the Financed Vehicle securing such Receivable has not been released from the Lien of such Receivable in whole or in part; (h) with respect to which no provision has been waived (except to the extent permitted by this Agreement); (i) as to which neither any Seller nor the Borrower has done anything to convey any right to any Person that would result in such Person having a right to payments due under such Receivable or otherwise to impair the rights of the Collateral Agent on behalf of the Secured Parties in such Receivable or the proceeds thereof; (j) which has not been sold, transferred, assigned or pledged by the Borrower to any Person other than hereunder; and no Dealer or Third Party Lender --------------------- has a participation in, or other right to receive, proceeds of such Receivable and with respect to which neither any Seller nor the Borrower has taken any ---------- action to convey any right to any Person (other than hereunder) that would result in such Person having a right to payments received under the related Insurance Policy or the related Dealer Agreement , Dealer Assignment or Third -------- Party Purchase Agreement or to payments due under such Receivable; - ------------------------ (k) which is not subject to any right of rescission, setoff counterclaim or defense and no such right has been asserted or, to the knowledge of the Borrower or of any Seller, threatened with respect thereto; (l) with respect to which no liens or claims have been filed for work,labor or materials relating to a Financed Vehicle that are liens prior to or equal or coordinate with, the security interest in the Financed Vehicle granted by such Receivable; (m) with respect to which no default, breach, violation or event permitting acceleration thereof has occurred, and none of the Borrower, the Servicer or any Seller has waived any of the foregoing; (n) at the time of the origination of which the related Financed Vehicle was covered by a comprehensive and collision insurance policy (i) in an amount at least equal to the lesser of (a) its maximum insurable value and (b) the Amount Financed, (ii) naming AFS as loss payee and (iii) insuring against loss and damage due to fire, theft, transportation, collision and other risks generally covered by comprehensive and collision coverage and with respect to which the Obligor is required to maintain physical loss and damage insurance, naming AFS and its successors and assigns as an additional insured party, and such Receivable permits the holder thereof to obtain Force-Placed Insurance at the expense of the Obligor if the Obligor fails to do so unless otherwise prohibited by the law of the state in which the related contract was entered into; -3- (o) with respect to which, (i) immediately prior to the sale thereof to the Borrower, the applicable Seller had, and has conveyed to the Borrower, good and marketable title free and clear of all liens, encumbrances, security interests and rights of others, and (ii) the sale and assignment thereof to the Borrower has been perfected under the UCC; (p) with respect to each of which a Receivable File is in the possession of the Custodian and such Receivable File contains (i) the fully executed original of such Receivable, (ii) a certificate of insurance, an application form for insurance signed by the related Obligor, or a signed representation letter from the Obligor named in such Receivable pursuant to which such Obligor has agreed to obtain physical damage insurance for the related Financed Vehicle, or copies thereof, or a documented verbal confirmation by an insurance agent for such Obligor of a policy number for an insurance policy for the Financed Vehicle, (iii) the original Lien Certificate (indicating AFS as first lienholder) or application therefor or a letter from the applicable Dealer or -- Third Party Lender agreeing unconditionally to repurchase the related Receivable - ------------------ if the certificate of title is not received by the Servicer within 180 days (provided that the Lien Certificate is delivered to the Custodian within 180 -------- days), and (iv) a credit application or file of credit information regarding the Obligor, or a copy thereof; each of such documents (if any) which is required to be signed by the Obligor has been signed by the Obligor in the appropriate spaces; and all blanks on any form have been properly filled in and each form has otherwise been correctly prepared; (q) which was not originated in, or is subject to the laws of, any jurisdiction the laws of which would make unlawful, void or voidable the sale, pledge, transfer and assignment of such Receivable under this Agreement and with respect to which a Seller has not entered into any agreement with any Obligor ------ that prohibits, restricts or conditions the assignment of any portion of such Receivable; (r) as to which all filings (including, without limitation, UCC filings but subject to clause (p) above in the case of the applicable Lien Certificate) ---------- required to be made by any Person and actions required to be taken or performed by any Person in any jurisdiction to give the Collateral Agent, on behalf of the Secured Parties, a first priority perfected Lien on such Receivable and the proceeds thereof and the other Collateral related thereto have been made, taken or performed; (s) of which there is only one original executed copy; (t) which constitutes chattel paper within the meaning of the UCC; (u) as to which no selection procedures adverse to the Investors have been utilized in selecting such Receivable from all other similar Receivables owned or originated by AFS and its Affiliates; (v) with respect to which, by the related Advance Date and on each relevant date thereafter, AFS or, to the extent it maintains such records, AFC (as the case may be) will have caused the portions of its servicing and other records relating to such -4- Receivable to be clearly and unambiguously marked to show that such Receivable constitutes part of the Collateral and is subject to the Lien of the Collateral Agent on behalf of the Secured Parties; (w) which is not assumable by another Person in a manner which would release the Obligor thereof from such Obligor's obligations to the Borrower with respect to such Receivable; (x) with respect to which the related Financed Vehicle had not been repossessed; (y) with respect to which the following is true: The Lien Certificate for the related Financed Vehicle shows, or, if a new or replacement Lien Certificate is being applied for with respect to such Financed Vehicle, the Lien Certificate will be received within 180 days of the related Purchase Date and will show, AFS named as the original secured party under such Receivable and, accordingly, AFS , will be the holder of a first priority security interest in such Financed Vehicle. With respect to each Receivable for which the Lien Certificate has not yet been returned from the Registrar of Titles, AFS has received written evidence from the related Dealer, Third Party Lender or the Obligor that such - ------------------ Lien Certificate showing such Seller as first lienholder has been applied for. If the Receivable was originated in a state in which a filing or recording is required of the secured party to perfect a security interest in motor vehicles, such filings or recordings have been duly made to show AFS named as the original secured party under the related Receivable; (z) which is not a Defaulted Receivable; (aa) which is not a Delinquent Receivable; (bb) which is not secured by vehicles which are financed repossessions; (cc) which, if a Consumer Direct Receivable or a TPL Receivable, the --------------------------------------------------------------- transfer of which to the Borrower does not result in the aggregate (by unpaid - ----------------------------------------------------------------------------- principal balance) of Consumer Direct Receivables and TPL Receivables in the - ---------------------------------------------------------------------------- Total Receivable Pool exceeding 13% of the Total Receivables Pool; and - ---------------------------------------------------------------------- (dd) which was originated in the United States of America and, at -- the time of origination and, with respect to any Receivables purchased by AFS ----------------------------------------------------- from a Dealer or a Third Party Lender, at the time of said purchase by AFS, - -------------------------------------------------------------------------- materially conformed to all requirements of the Servicing Procedures and Credit Manual applicable to such Receivable. For purposes of this Agreement (including the computation from time to time of the Borrowing Base), the eligibility of Receivables will be determined from time to time, such that a Receivable that was an Eligible Receivable at one time but that subsequently fails to meet -5- all applicable eligibility requirements will no longer be an Eligible Receivable (unless and until it again meets all applicable eligibility requirements). -6- SCHEDULE 1 ---------- Receivables Financing Agreement AmeriCredit Third Party Lenders E-Loan, Inc. 5875 Arnold Road Dublin, CA 94568 PeopleFirst Finance, LLC 401 West A Street Suite 1000 San Diego, CA 92101 Exhibit A --------- COMMITMENT EXTENSION AGREEMENT ------------------------------ COMMITMENT EXTENSION AGREEMENT (the "Extension Agreement") is made and ------------------------ entered into as of March 27, 2001, among AMERICREDIT WAREHOUSE TRUST, a Delaware business trust (the "Borrower"), AMERICREDIT FINANCIAL SERVICES, INC., a -------- Delaware corporation, individually ("AFS") and as initial Servicer, and CREDIT --- SUISSE FIRST BOSTON, NEW YORK BRANCH ("CSFB"), as agent (the "Agent") for the ---- ----- Lenders (as defined in the Agreement referred to below). W I T N E S S E T H : - - - - - - - - - - WHEREAS, the Borrower, AFS, individually and as Servicer and Custodian, AmeriCredit Funding Corp., AmeriCredit Corporation of California, the Lenders, the Agent and Bank One, N.A., as Backup Servicer and Collateral Agent, are parties to a certain Receivables Financing Agreement dated as of March 31, 1999 (as amended, the "Agreement"); and --------- WHEREAS, the parties hereto desire to extend the Commitment Termination Date set forth in the Agreement in the manner, and on the terms and conditions herein provided. NOW, THEREFORE, in consideration of the mutual covenants herein contained, and other good and valuable consideration, the receipt and adequacy of which are hereby expressly acknowledged, the parties hereto agree as follows: 1. Definitions. Unless otherwise defined herein, all terms used ----------- herein which are defined in the Agreement shall have the meanings assigned thereto in the Agreement. 2. Extension. As of the Extension Effective Date (as hereinafter --------- defined), the Commitment Termination Date under the Agreement shall be extended from March 27, 2001 to March 25, 2002. 3. Notice. Promptly after the Extension Effective Date, written ------ notice of the extension of the Commitment Termination Date effected hereby shall be furnished to the Rating Agencies and Bank One, N.A. by the Servicer. The modification set forth above is limited precisely as written and shall not be deemed to (x) be a consent to any waiver of, or modification of, any other term or condition of the Agreement or any of the documents referred to therein or (y) prejudice any right or rights which the Agent or any Lender may now have or may have in the future under or in connection with the Agreement or any of the documents referred to therein. Except as expressly modified hereby, the terms and provisions of this Agreement shall remain in full force and effect. 4. Representations and Warranties. Each of the parties hereto severally ------------------------------ represents and warrants that all acts, filings and conditions required to be done and performed and to have happened (including, without limitation, the obtaining of necessary governmental approvals) precedent to the entering into of this Extension Agreement to constitute this Extension Agreement and the Agreement as modified hereby the duly authorized, legal, valid and binding obligation of such party, enforceable in accordance with its terms, have been done, performed and have happened in due and strict compliance with all applicable laws. 5. Effectiveness. This Extension Agreement shall become effective on the ------------- date (the "Extension Effective Date") which is the later of (a) March 27, 2001 ------------------------ and (b) the date when (i) each of the parties hereto shall have executed a counterpart hereof and delivered the same to the Agent and (ii) the Agent shall have received the consent to the extension of the Commitment Termination Date effected hereby from each of the Noncommitted Lender and Asset Guaranty Insurance Company; provided that the Agent on behalf of itself and the Lenders may revoke its agreement to this Extension Agreement at any time prior to March 27, 2001. Complete sets of counterparts hereof shall be lodged with the Servicer and the Agent. 6. Governing Law. THIS EXTENSION AGREEMENT SHALL BE GOVERNED BY, AND ------------- CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 7. Counterparts. This Extension Agreement may be executed in several ------------ counterparts, each of which shall be regarded as the original and all of which shall constitute one and the same agreement. [Signature Pages to Follow] -2- IN WITNESS WHEREOF, the parties have caused this Extension Agreement to be executed by their respective officers thereunto duly authorized as of the day and year first above written. AMERICREDIT WAREHOUSE TRUST By: Bankers Trust (Delaware), not in its individual capacity but solely as Trustee By: ________________________________ Name: Title: AMERICREDIT FINANCIAL SERVICES, INC, as Servicer By: ________________________________ Name: Title: CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH, as Agent, on behalf of itself and the Lenders By: ________________________________ Name: Title: By: ________________________________ Name: Title: -3- EX-11.1 3 dex111.txt COMPUTATION OF PER SHARE EARNINGS EXHIBIT 11.1 AMERICREDIT CORP. STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS (dollars in thousands, except per share amounts)
Three Months Ended Nine Months Ended March 31, March 31, ------------------------- ------------------------- 2001 2000 2001 2000 ------------------------- ------------------------- Weighted average shares outstanding 80,079,906 74,869,550 78,520,489 72,110,495 Incremental shares resulting from assumed exercise of stock options 6,630,080 4,158,357 6,297,229 4,434,448 ------------------------- ------------------------- Weighted average shares and assumed incremental shares 86,709,986 79,027,907 84,817,718 76,544,943 ========================= ========================= NET INCOME $60,430 $32,410 $151,145 $77,343 ========================= ========================= EARNINGS PER SHARE: Basic $0.75 $0.43 $1.92 $1.07 ========================= ========================= Diluted $0.70 $0.41 $1.78 $1.01 ========================= =========================
Basic earnings per share have been computed by dividing net income by weighted average shares outstanding. Diluted earnings per share have been computed by dividing net income by the weighted average shares and assumed incremental shares. Assumed incremental shares were computed using the treasury stock method. The average common stock market price for the period was used to determine the number of incremental shares. -----END PRIVACY-ENHANCED MESSAGE-----