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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Credit Acceptance Corporation | NASDAQ:CACC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.20 | -0.04% | 475.35 | 456.93 | 493.00 | 477.21 | 467.35 | 475.10 | 38,312 | 00:00:00 |
☑
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Michigan
|
|
38-1999511
|
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
25505 W. Twelve Mile Road
|
|
|
|
Southfield,
|
Michigan
|
|
48034-8339
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
Not Applicable
|
|
(Former name, former address and former fiscal year, if changed since last report)
|
Title of each class
|
|
Trading symbol(s)
|
|
Name of each exchange on which registered
|
|
Common Stock, $0.01 par value
|
|
CACC
|
|
The Nasdaq Stock Market
|
Large accelerated filer
|
þ
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
PART I. — FINANCIAL INFORMATION
|
|
|
|
ITEM 1. FINANCIAL STATEMENTS
|
|
|
|
Consolidated Balance Sheets - As of June 30, 2019 and December 31, 2018
|
|
|
|
Consolidated Statements of Income - Three and six months ended June 30, 2019 and 2018
|
|
|
|
Consolidated Statements of Comprehensive Income - Three and six months ended June 30, 2019 and 2018
|
|
|
|
Consolidated Statements of Shareholders' Equity - Three and six months ended June 30, 2019 and 2018
|
|
|
|
Consolidated Statements of Cash Flows - Six months ended June 30, 2019 and 2018
|
|
|
|
|
|
|
|
|
|
|
|
PART II. — OTHER INFORMATION
|
|
|
|
ITEM 1. LEGAL PROCEEDINGS
|
|
|
|
ITEM 6. EXHIBITS
|
|
|
|
SIGNATURES
|
(Dollars in millions, except per share data)
|
As of
|
||||||
|
June 30, 2019
|
|
December 31, 2018
|
||||
ASSETS:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
19.7
|
|
|
$
|
25.7
|
|
Restricted cash and cash equivalents
|
328.8
|
|
|
303.6
|
|
||
Restricted securities available for sale
|
61.5
|
|
|
58.6
|
|
||
|
|
|
|
||||
Loans receivable
|
6,873.6
|
|
|
6,225.2
|
|
||
Allowance for credit losses
|
(489.6
|
)
|
|
(461.9
|
)
|
||
Loans receivable, net
|
6,384.0
|
|
|
5,763.3
|
|
||
|
|
|
|
||||
Property and equipment, net
|
53.1
|
|
|
40.2
|
|
||
Income taxes receivable
|
21.8
|
|
|
7.9
|
|
||
Other assets
|
39.6
|
|
|
38.1
|
|
||
Total Assets
|
$
|
6,908.5
|
|
|
$
|
6,237.4
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY:
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
203.4
|
|
|
$
|
186.4
|
|
Revolving secured line of credit
|
38.4
|
|
|
171.9
|
|
||
Secured financing
|
3,233.0
|
|
|
3,092.7
|
|
||
Senior notes
|
939.6
|
|
|
544.4
|
|
||
Mortgage note
|
11.6
|
|
|
11.9
|
|
||
Deferred income taxes, net
|
267.0
|
|
|
236.7
|
|
||
Income taxes payable
|
0.2
|
|
|
2.5
|
|
||
Total Liabilities
|
4,693.2
|
|
|
4,246.5
|
|
||
|
|
|
|
||||
Commitments and Contingencies - See Note 15
|
|
|
|
|
|
||
Shareholders' Equity:
|
|
|
|
||||
Preferred stock, $0.01 par value, 1,000,000 shares authorized, none issued
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, 80,000,000 shares authorized, 18,796,876 and 18,972,558 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively
|
0.2
|
|
|
0.2
|
|
||
Paid-in capital
|
153.7
|
|
|
154.9
|
|
||
Retained earnings
|
2,060.6
|
|
|
1,836.1
|
|
||
Accumulated other comprehensive gain (loss)
|
0.8
|
|
|
(0.3
|
)
|
||
Total Shareholders' Equity
|
2,215.3
|
|
|
1,990.9
|
|
||
Total Liabilities and Shareholders' Equity
|
$
|
6,908.5
|
|
|
$
|
6,237.4
|
|
(Dollars in millions, except per share data)
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Finance charges
|
$
|
341.5
|
|
|
$
|
289.7
|
|
|
$
|
663.4
|
|
|
$
|
560.0
|
|
Premiums earned
|
13.1
|
|
|
11.7
|
|
|
25.3
|
|
|
22.0
|
|
||||
Other income
|
16.0
|
|
|
14.0
|
|
|
35.7
|
|
|
29.0
|
|
||||
Total revenue
|
370.6
|
|
|
315.4
|
|
|
724.4
|
|
|
611.0
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Salaries and wages
|
47.3
|
|
|
39.7
|
|
|
96.0
|
|
|
82.2
|
|
||||
General and administrative
|
16.8
|
|
|
12.7
|
|
|
30.7
|
|
|
27.2
|
|
||||
Sales and marketing
|
17.7
|
|
|
17.2
|
|
|
36.5
|
|
|
35.0
|
|
||||
Provision for credit losses
|
15.4
|
|
|
1.8
|
|
|
29.9
|
|
|
25.2
|
|
||||
Interest
|
49.8
|
|
|
38.7
|
|
|
94.8
|
|
|
73.2
|
|
||||
Provision for claims
|
8.3
|
|
|
7.3
|
|
|
14.9
|
|
|
12.5
|
|
||||
Total costs and expenses
|
155.3
|
|
|
117.4
|
|
|
302.8
|
|
|
255.3
|
|
||||
Income before provision for income taxes
|
215.3
|
|
|
198.0
|
|
|
421.6
|
|
|
355.7
|
|
||||
Provision for income taxes
|
50.9
|
|
|
47.0
|
|
|
92.8
|
|
|
84.6
|
|
||||
Net income
|
$
|
164.4
|
|
|
$
|
151.0
|
|
|
$
|
328.8
|
|
|
$
|
271.1
|
|
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
8.68
|
|
|
$
|
7.76
|
|
|
$
|
17.35
|
|
|
$
|
13.94
|
|
Diluted
|
$
|
8.68
|
|
|
$
|
7.75
|
|
|
$
|
17.33
|
|
|
$
|
13.92
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
18,944,672
|
|
|
19,465,563
|
|
|
18,949,902
|
|
|
19,451,726
|
|
||||
Diluted
|
18,949,962
|
|
|
19,472,164
|
|
|
18,976,289
|
|
|
19,471,959
|
|
(In millions)
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
164.4
|
|
|
$
|
151.0
|
|
|
$
|
328.8
|
|
|
$
|
271.1
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) on securities, net of tax
|
0.5
|
|
|
(0.1
|
)
|
|
1.1
|
|
|
(0.4
|
)
|
||||
Other comprehensive income (loss)
|
0.5
|
|
|
(0.1
|
)
|
|
1.1
|
|
|
(0.4
|
)
|
||||
Comprehensive income
|
$
|
164.9
|
|
|
$
|
150.9
|
|
|
$
|
329.9
|
|
|
$
|
270.7
|
|
|
For the Three Months Ended June 30, 2019
|
|||||||||||||||||||||
(Dollars in millions)
|
Common Stock
|
|
Paid-In Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total Shareholders' Equity
|
|||||||||||||
|
Number
|
|
Amount
|
|||||||||||||||||||
Balance, beginning of period
|
18,797,071
|
|
|
$
|
0.2
|
|
|
$
|
152.2
|
|
|
$
|
1,896.2
|
|
|
$
|
0.3
|
|
|
$
|
2,048.9
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
164.4
|
|
|
—
|
|
|
164.4
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
0.5
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
1.5
|
|
|||||
Restricted stock awards, net of forfeitures
|
(195
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance, end of period
|
18,796,876
|
|
|
$
|
0.2
|
|
|
$
|
153.7
|
|
|
$
|
2,060.6
|
|
|
$
|
0.8
|
|
|
$
|
2,215.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
For the Three Months Ended June 30, 2018
|
|||||||||||||||||||||
(Dollars in millions)
|
Common Stock
|
|
Paid-In Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total Shareholders' Equity
|
|||||||||||||
|
Number
|
|
Amount
|
|||||||||||||||||||
Balance, beginning of period
|
19,309,937
|
|
|
$
|
0.2
|
|
|
$
|
147.7
|
|
|
$
|
1,509.3
|
|
|
$
|
(0.5
|
)
|
|
$
|
1,656.7
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
151.0
|
|
|
—
|
|
|
151.0
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
2.0
|
|
|
—
|
|
|
—
|
|
|
2.0
|
|
|||||
Restricted stock awards, net of forfeitures
|
(292
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance, end of period
|
19,309,645
|
|
|
$
|
0.2
|
|
|
$
|
149.7
|
|
|
$
|
1,660.3
|
|
|
$
|
(0.6
|
)
|
|
$
|
1,809.6
|
|
|
For the Six Months Ended June 30, 2019
|
|||||||||||||||||||||
(Dollars in millions)
|
Common Stock
|
|
Paid-In Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total Shareholders' Equity
|
|||||||||||||
|
Number
|
|
Amount
|
|||||||||||||||||||
Balance, beginning of period
|
18,972,558
|
|
|
$
|
0.2
|
|
|
$
|
154.9
|
|
|
$
|
1,836.1
|
|
|
$
|
(0.3
|
)
|
|
$
|
1,990.9
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
328.8
|
|
|
—
|
|
|
328.8
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|
1.1
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
3.7
|
|
|
—
|
|
|
—
|
|
|
3.7
|
|
|||||
Restricted stock awards, net of forfeitures
|
5,087
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Repurchase of common stock
|
(268,611
|
)
|
|
—
|
|
|
(4.9
|
)
|
|
(104.3
|
)
|
|
—
|
|
|
(109.2
|
)
|
|||||
Restricted stock units converted to common stock
|
87,842
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance, end of period
|
18,796,876
|
|
|
$
|
0.2
|
|
|
$
|
153.7
|
|
|
$
|
2,060.6
|
|
|
$
|
0.8
|
|
|
$
|
2,215.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
For the Six Months Ended June 30, 2018
|
|||||||||||||||||||||
(Dollars in millions)
|
Common Stock
|
|
Paid-In Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total Shareholders' Equity
|
|||||||||||||
|
Number
|
|
Amount
|
|||||||||||||||||||
Balance, beginning of period
|
19,310,049
|
|
|
$
|
0.2
|
|
|
$
|
145.5
|
|
|
$
|
1,390.3
|
|
|
$
|
(0.2
|
)
|
|
$
|
1,535.8
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
271.1
|
|
|
—
|
|
|
271.1
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
(0.4
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
5.1
|
|
|
—
|
|
|
—
|
|
|
5.1
|
|
|||||
Restricted stock awards, net of forfeitures
|
4,342
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Repurchase of common stock
|
(6,185
|
)
|
|
—
|
|
|
(0.9
|
)
|
|
(1.1
|
)
|
|
—
|
|
|
(2.0
|
)
|
|||||
Restricted stock units converted to common stock
|
1,439
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance, end of period
|
19,309,645
|
|
|
$
|
0.2
|
|
|
$
|
149.7
|
|
|
$
|
1,660.3
|
|
|
$
|
(0.6
|
)
|
|
$
|
1,809.6
|
|
(In millions)
|
For the Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Cash Flows From Operating Activities:
|
|
|
|
||||
Net income
|
$
|
328.8
|
|
|
$
|
271.1
|
|
Adjustments to reconcile cash provided by operating activities:
|
|
|
|
||||
Provision for credit losses
|
29.9
|
|
|
25.2
|
|
||
Depreciation
|
3.4
|
|
|
2.6
|
|
||
Amortization
|
7.3
|
|
|
6.3
|
|
||
Provision for deferred income taxes
|
30.0
|
|
|
38.9
|
|
||
Stock-based compensation
|
3.7
|
|
|
5.1
|
|
||
Change in operating assets and liabilities:
|
|
|
|
||||
Increase in accounts payable and accrued liabilities
|
10.9
|
|
|
22.7
|
|
||
Increase in income taxes receivable
|
(13.9
|
)
|
|
(23.4
|
)
|
||
Decrease in income taxes payable
|
(2.3
|
)
|
|
(39.7
|
)
|
||
Decrease in other assets
|
2.8
|
|
|
1.2
|
|
||
Net cash provided by operating activities
|
400.6
|
|
|
310.0
|
|
||
Cash Flows From Investing Activities:
|
|
|
|
||||
Purchases of restricted securities available for sale
|
(24.8
|
)
|
|
(28.4
|
)
|
||
Proceeds from sale of restricted securities available for sale
|
17.1
|
|
|
13.0
|
|
||
Maturities of restricted securities available for sale
|
6.2
|
|
|
6.4
|
|
||
Principal collected on Loans receivable
|
1,508.6
|
|
|
1,301.7
|
|
||
Advances to Dealers
|
(1,327.8
|
)
|
|
(1,313.5
|
)
|
||
Purchases of Consumer Loans
|
(732.8
|
)
|
|
(642.7
|
)
|
||
Accelerated payments of Dealer Holdback
|
(28.0
|
)
|
|
(29.4
|
)
|
||
Payments of Dealer Holdback
|
(70.6
|
)
|
|
(66.1
|
)
|
||
Purchases of property and equipment
|
(16.3
|
)
|
|
(5.2
|
)
|
||
Net cash used in investing activities
|
(668.4
|
)
|
|
(764.2
|
)
|
||
Cash Flows From Financing Activities:
|
|
|
|
||||
Borrowings under revolving secured line of credit
|
2,120.6
|
|
|
1,433.2
|
|
||
Repayments under revolving secured line of credit
|
(2,254.1
|
)
|
|
(1,447.1
|
)
|
||
Proceeds from secured financing
|
1,051.4
|
|
|
1,900.0
|
|
||
Repayments of secured financing
|
(913.5
|
)
|
|
(1,288.8
|
)
|
||
Proceeds from issuance of senior notes
|
400.0
|
|
|
—
|
|
||
Payments of debt issuance costs
|
(10.7
|
)
|
|
(9.3
|
)
|
||
Repurchase of common stock
|
(109.2
|
)
|
|
(2.0
|
)
|
||
Other
|
2.5
|
|
|
(1.9
|
)
|
||
Net cash provided by financing activities
|
287.0
|
|
|
584.1
|
|
||
Net increase in cash and cash equivalents and restricted cash and cash equivalents
|
19.2
|
|
|
129.9
|
|
||
Cash and cash equivalents and restricted cash and cash equivalents beginning of period
|
329.3
|
|
|
263.8
|
|
||
Cash and cash equivalents and restricted cash and cash equivalents end of period
|
$
|
348.5
|
|
|
$
|
393.7
|
|
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
||||
Cash paid during the period for interest
|
$
|
79.1
|
|
|
$
|
65.8
|
|
Cash paid during the period for income taxes
|
$
|
76.4
|
|
|
$
|
105.7
|
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||
Consumer Loan Assignment Volume
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Percentage of total unit volume with either FICO
®
scores below 650 or no FICO
®
scores
|
|
95.7
|
%
|
|
95.3
|
%
|
|
96.2
|
%
|
|
95.9
|
%
|
|
|
Unit Volume
|
|
Dollar Volume (1)
|
||||||||
Three Months Ended
|
|
Dealer Loans
|
|
Purchased Loans
|
|
Dealer Loans
|
|
Purchased Loans
|
||||
March 31, 2018
|
|
70.1
|
%
|
|
29.9
|
%
|
|
67.4
|
%
|
|
32.6
|
%
|
June 30, 2018
|
|
69.7
|
%
|
|
30.3
|
%
|
|
66.8
|
%
|
|
33.2
|
%
|
September 30, 2018
|
|
69.5
|
%
|
|
30.5
|
%
|
|
67.0
|
%
|
|
33.0
|
%
|
December 31, 2018
|
|
69.4
|
%
|
|
30.6
|
%
|
|
67.4
|
%
|
|
32.6
|
%
|
March 31, 2019
|
|
67.4
|
%
|
|
32.6
|
%
|
|
65.0
|
%
|
|
35.0
|
%
|
June 30, 2019
|
|
66.7
|
%
|
|
33.3
|
%
|
|
63.7
|
%
|
|
36.3
|
%
|
(1)
|
Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program. Payments of Dealer Holdback (as defined below) and accelerated Dealer Holdback are not included.
|
•
|
a down payment from the consumer;
|
•
|
a non-recourse cash payment (“advance”) from us; and
|
•
|
after the advance balance (cash advance and related Dealer Loan fees and costs) has been recovered by us, the cash from payments made on the Consumer Loan, net of certain collection costs and our servicing fee (“Dealer Holdback”).
|
•
|
first, to reimburse us for certain collection costs;
|
•
|
second, to pay us our servicing fee, which generally equals
20%
of collections;
|
•
|
third, to reduce the aggregate advance balance and to pay any other amounts due from the Dealer to us; and
|
•
|
fourth, to the Dealer as payment of Dealer Holdback.
|
•
|
received first accelerated Dealer Holdback payment under the Portfolio Program;
|
•
|
franchise dealership; or
|
•
|
independent dealership that meets certain criteria upon enrollment.
|
(In millions)
|
As of
|
||||||||||||||
|
June 30, 2019
|
|
December 31, 2018
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||
Cash and cash equivalents
|
$
|
19.7
|
|
|
$
|
25.7
|
|
|
$
|
55.7
|
|
|
$
|
8.2
|
|
Restricted cash and cash equivalents
|
328.8
|
|
|
303.6
|
|
|
338.0
|
|
|
255.6
|
|
||||
Total cash and cash equivalents and restricted cash and cash equivalents
|
$
|
348.5
|
|
|
$
|
329.3
|
|
|
$
|
393.7
|
|
|
$
|
263.8
|
|
•
|
the consumer and Dealer have signed a Consumer Loan contract; and
|
•
|
we have received the executed Consumer Loan contract and supporting documentation in either physical or electronic form.
|
•
|
the Consumer Loan has been legally assigned to us; and
|
•
|
we have made a funding decision and generally have provided funding to the Dealer in the form of either an advance under the Portfolio Program or one-time purchase payment under the Purchase Program.
|
•
|
the aggregate amount of all cash advances paid;
|
•
|
finance charges;
|
•
|
Dealer Holdback payments;
|
•
|
accelerated Dealer Holdback payments; and
|
•
|
recoveries.
|
•
|
collections (net of certain collection costs);
|
•
|
write-offs; and
|
•
|
transfers.
|
•
|
the aggregate amount of all amounts paid during the month of purchase to purchase Consumer Loans from Dealers;
|
•
|
finance charges;
|
•
|
recoveries; and
|
•
|
transfers.
|
•
|
collections (net of certain collection costs); and
|
•
|
write-offs.
|
•
|
We have a variable interest in the trust.
We have a residual interest in the assets of the trust, which is variable in nature, given that it increases or decreases based upon the actual loss experience of the related service contracts. In addition, VSC Re is required to absorb any losses in excess of the trust's assets.
|
•
|
The trust is a variable interest entity.
The trust has insufficient equity at risk as no parties to the trust were required to contribute assets that provide them with any ownership interest.
|
•
|
We are the primary beneficiary of the trust.
We control the amount of premiums written and placed in the trust through Consumer Loan assignments under our Programs, which is the activity that most significantly impacts the economic performance of the trust. We have the right to receive benefits from the trust that could potentially be significant. In addition, VSC Re has the obligation to absorb losses of the trust that could potentially be significant.
|
•
|
calculate an effective interest rate based on expected future net cash flows; and
|
•
|
increase the Loans receivable and related allowance for credit losses balances by the present value of the difference between contractual future net cash flows and expected future net cash flows discounted at the effective interest rate. This “gross-up” will not impact the net carrying amount of Loans (Loans receivable less allowance for credit losses) or net income.
|
•
|
recognize finance charge revenue using the effective interest rate that was calculated on the adoption date based on expected future net cash flows; and
|
•
|
adjust the allowance for credit losses so that the net carrying amount of each Loan equals the present value of expected future net cash flows discounted at the effective interest rate. The adjustment to the allowance for credit losses will be recognized as either provision for credit losses expense or a reversal of provision for credit losses expense.
|
•
|
the assignment of the Consumer Loan occurs a moment after the Consumer Loan is originated by the Dealer, so “a more-than-insignificant deterioration in credit quality since origination” has not occurred; and
|
•
|
Consumer Loans assigned under the Portfolio Program are considered to be advances under Dealer Loans originated by us rather than Consumer Loans purchased by us.
|
•
|
calculate the effective interest rate based on contractual future net cash flows; and
|
•
|
record an allowance for credit losses equal to the difference between the initial balance of the Loan (advance or purchase amount) and the present value of expected future net cash flows discounted at the effective interest rate. The initial allowance for credit losses will be recognized as provision for credit losses expense.
|
•
|
recognize finance charge revenue using the effective interest rate that was calculated at the time of assignment based on contractual future net cash flows; and
|
•
|
adjust the allowance for credit losses so that the net carrying amount of each Loan equals the present value of expected future net cash flows discounted at the effective interest rate. The adjustment to the allowance for credit losses will be recognized as either provision for credit losses expense or a reversal of provision for credit losses expense.
|
•
|
the effective interest rate will be significantly inflated for contractual amounts that were not expected to be collected at the time of assignment; and
|
•
|
all expected credit losses, including significant credit losses that were expected at both the time of origination and the time of assignment, will be recognized as provision for credit losses expense, despite the fact that credit losses expected at the time of assignment do not represent an economic loss to us.
|
•
|
We want to minimize volatility in our reported results related to a changing interest rate environment. In addition, we believe the election of the fair value option could materially adversely affect our financial position, liquidity and results of operations in a financial crisis period due to the impact of rapidly increasing market participant discount rates on fair value.
|
•
|
We have modified our revolving secured line of credit and warehouse facilities so that the adoption of CECL will not materially impact the amount we are able to borrow under these facilities or materially impact our ability to comply with the financial covenants in these facilities. We believe that we will be able to structure our Term ABS financings issued after the adoption of CECL so that the amount that we will be able to borrow will not be materially impacted.
|
•
|
We believe we will be able to quantify and explain to shareholders how CECL diverges from economic reality.
|
(In millions)
|
|
|
|
|
|
|
|
||||||||
|
As of June 30, 2019
|
|
As of December 31, 2018
|
||||||||||||
|
Carrying
Amount
|
|
Estimated Fair
Value
|
|
Carrying
Amount
|
|
Estimated Fair
Value
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
19.7
|
|
|
$
|
19.7
|
|
|
$
|
25.7
|
|
|
$
|
25.7
|
|
Restricted cash and cash equivalents
|
328.8
|
|
|
328.8
|
|
|
303.6
|
|
|
303.6
|
|
||||
Restricted securities available for sale
|
61.5
|
|
|
61.5
|
|
|
58.6
|
|
|
58.6
|
|
||||
Loans receivable, net
|
6,384.0
|
|
|
6,466.8
|
|
|
5,763.3
|
|
|
5,855.1
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Revolving secured line of credit
|
$
|
38.4
|
|
|
$
|
38.4
|
|
|
$
|
171.9
|
|
|
$
|
171.9
|
|
Secured financing
|
3,233.0
|
|
|
3,275.6
|
|
|
3,092.7
|
|
|
3,100.9
|
|
||||
Senior notes
|
939.6
|
|
|
985.2
|
|
|
544.4
|
|
|
556.3
|
|
||||
Mortgage note
|
11.6
|
|
|
11.6
|
|
|
11.9
|
|
|
11.9
|
|
Level 1
|
Valuation is based upon quoted prices for identical instruments traded in active markets.
|
|
|
Level 2
|
Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
|
|
|
Level 3
|
Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates or assumptions that market participants would use in pricing the asset or liability.
|
(In millions)
|
|
|
|
|
|
|
|
||||||||
|
As of June 30, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Fair Value
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents (1)
|
$
|
19.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19.7
|
|
Restricted cash and cash equivalents (1)
|
328.8
|
|
|
—
|
|
|
—
|
|
|
328.8
|
|
||||
Restricted securities available for sale (2)
|
49.4
|
|
|
12.1
|
|
|
—
|
|
|
61.5
|
|
||||
Loans receivable, net (1)
|
—
|
|
|
—
|
|
|
6,466.8
|
|
|
6,466.8
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revolving secured line of credit (1)
|
$
|
—
|
|
|
$
|
38.4
|
|
|
$
|
—
|
|
|
$
|
38.4
|
|
Secured financing (1)
|
—
|
|
|
3,275.6
|
|
|
—
|
|
|
3,275.6
|
|
||||
Senior notes (1)
|
985.2
|
|
|
—
|
|
|
—
|
|
|
985.2
|
|
||||
Mortgage note (1)
|
—
|
|
|
11.6
|
|
|
—
|
|
|
11.6
|
|
(In millions)
|
|
|
|
|
|
|
|
||||||||
|
As of December 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Fair Value
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents (1)
|
$
|
25.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25.7
|
|
Restricted cash and cash equivalents (1)
|
303.6
|
|
|
—
|
|
|
—
|
|
|
303.6
|
|
||||
Restricted securities available for sale (2)
|
47.9
|
|
|
10.7
|
|
|
—
|
|
|
58.6
|
|
||||
Loans receivable, net (1)
|
—
|
|
|
—
|
|
|
5,855.1
|
|
|
5,855.1
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revolving secured line of credit (1)
|
$
|
—
|
|
|
$
|
171.9
|
|
|
$
|
—
|
|
|
$
|
171.9
|
|
Secured financing (1)
|
—
|
|
|
3,100.9
|
|
|
—
|
|
|
3,100.9
|
|
||||
Senior notes (1)
|
556.3
|
|
|
—
|
|
|
—
|
|
|
556.3
|
|
||||
Mortgage note (1)
|
—
|
|
|
11.9
|
|
|
—
|
|
|
11.9
|
|
(1)
|
Measured at amortized cost with fair value disclosed.
|
(2)
|
Measured at fair value on a recurring basis.
|
(In millions)
|
As of June 30, 2019
|
||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized
Gains
|
|
Gross Unrealized
Losses
|
|
Estimated Fair
Value
|
||||||||
Corporate bonds
|
$
|
25.0
|
|
|
$
|
0.5
|
|
|
$
|
—
|
|
|
$
|
25.5
|
|
U.S. Government and agency securities
|
23.5
|
|
|
0.4
|
|
|
—
|
|
|
23.9
|
|
||||
Asset-backed securities
|
11.1
|
|
|
0.1
|
|
|
—
|
|
|
11.2
|
|
||||
Mortgage-backed securities
|
0.9
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
||||
Total restricted securities available for sale
|
$
|
60.5
|
|
|
$
|
1.0
|
|
|
$
|
—
|
|
|
$
|
61.5
|
|
|
|
|
|
|
|
|
|
||||||||
(In millions)
|
As of December 31, 2018
|
||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized
Gains
|
|
Gross Unrealized
Losses
|
|
Estimated Fair
Value
|
||||||||
Corporate bonds
|
$
|
23.4
|
|
|
$
|
—
|
|
|
$
|
(0.2
|
)
|
|
$
|
23.2
|
|
U.S. Government and agency securities
|
24.8
|
|
|
0.1
|
|
|
(0.2
|
)
|
|
24.7
|
|
||||
Asset-backed securities
|
9.4
|
|
|
—
|
|
|
(0.1
|
)
|
|
9.3
|
|
||||
Mortgage-backed securities
|
1.4
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
||||
Total restricted securities available for sale
|
$
|
59.0
|
|
|
$
|
0.1
|
|
|
$
|
(0.5
|
)
|
|
$
|
58.6
|
|
(In millions)
|
Securities Available for Sale with Gross Unrealized Losses as of June 30, 2019
|
||||||||||||||||||||||
|
Less than 12 Months
|
|
12 Months or More
|
|
|
|
|
||||||||||||||||
|
Estimated
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Total
Estimated
Fair Value
|
|
Total
Gross
Unrealized
Losses
|
||||||||||||
Corporate bonds
|
$
|
0.9
|
|
|
$
|
—
|
|
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
1.5
|
|
|
$
|
—
|
|
U.S. Government and agency securities
|
—
|
|
|
—
|
|
|
3.0
|
|
|
—
|
|
|
3.0
|
|
|
—
|
|
||||||
Asset-backed securities
|
0.3
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
1.8
|
|
|
—
|
|
||||||
Mortgage-backed securities
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
||||||
Total restricted securities available for sale
|
$
|
1.2
|
|
|
$
|
—
|
|
|
$
|
5.4
|
|
|
$
|
—
|
|
|
$
|
6.6
|
|
|
$
|
—
|
|
(In millions)
|
Securities Available for Sale with Gross Unrealized Losses as of December 31, 2018
|
||||||||||||||||||||||
|
Less than 12 Months
|
|
12 Months or More
|
|
|
|
|
||||||||||||||||
|
Estimated
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Total
Estimated
Fair Value
|
|
Total
Gross
Unrealized
Losses
|
||||||||||||
Corporate bonds
|
$
|
12.0
|
|
|
$
|
(0.1
|
)
|
|
$
|
6.5
|
|
|
$
|
(0.1
|
)
|
|
$
|
18.5
|
|
|
$
|
(0.2
|
)
|
U.S. Government and agency securities
|
2.2
|
|
|
—
|
|
|
10.5
|
|
|
(0.2
|
)
|
|
12.7
|
|
|
(0.2
|
)
|
||||||
Asset-backed securities
|
4.7
|
|
|
—
|
|
|
3.3
|
|
|
(0.1
|
)
|
|
8.0
|
|
|
(0.1
|
)
|
||||||
Mortgage-backed securities
|
—
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
||||||
Total restricted securities available for sale
|
$
|
18.9
|
|
|
$
|
(0.1
|
)
|
|
$
|
21.7
|
|
|
$
|
(0.4
|
)
|
|
$
|
40.6
|
|
|
$
|
(0.5
|
)
|
(In millions)
|
|
As of
|
||||||||||||||
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
Contractual Maturity
|
|
Amortized Cost
|
|
Estimated Fair
Value
|
|
Amortized Cost
|
|
Estimated Fair
Value
|
||||||||
Within one year
|
|
$
|
4.8
|
|
|
$
|
4.8
|
|
|
$
|
1.7
|
|
|
$
|
1.7
|
|
Over one year to five years
|
|
53.1
|
|
|
54.1
|
|
|
55.1
|
|
|
54.7
|
|
||||
Over five years to ten years
|
|
2.1
|
|
|
2.1
|
|
|
0.8
|
|
|
0.8
|
|
||||
Over ten years
|
|
0.5
|
|
|
0.5
|
|
|
1.4
|
|
|
1.4
|
|
||||
Total restricted securities available for sale
|
|
$
|
60.5
|
|
|
$
|
61.5
|
|
|
$
|
59.0
|
|
|
$
|
58.6
|
|
(In millions)
|
As of June 30, 2019
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Loans receivable
|
$
|
4,466.0
|
|
|
$
|
2,407.6
|
|
|
$
|
6,873.6
|
|
Allowance for credit losses
|
(394.0
|
)
|
|
(95.6
|
)
|
|
(489.6
|
)
|
|||
Loans receivable, net
|
$
|
4,072.0
|
|
|
$
|
2,312.0
|
|
|
$
|
6,384.0
|
|
|
|
|
|
|
|
||||||
(In millions)
|
As of December 31, 2018
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Loans receivable
|
$
|
4,141.0
|
|
|
$
|
2,084.2
|
|
|
$
|
6,225.2
|
|
Allowance for credit losses
|
(378.1
|
)
|
|
(83.8
|
)
|
|
(461.9
|
)
|
|||
Loans receivable, net
|
$
|
3,762.9
|
|
|
$
|
2,000.4
|
|
|
$
|
5,763.3
|
|
(In millions)
|
For the Three Months Ended June 30, 2019
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
4,347.5
|
|
|
$
|
2,270.4
|
|
|
$
|
6,617.9
|
|
New Consumer Loan assignments (1)
|
608.8
|
|
|
346.4
|
|
|
955.2
|
|
|||
Principal collected on Loans receivable
|
(520.1
|
)
|
|
(231.1
|
)
|
|
(751.2
|
)
|
|||
Accelerated Dealer Holdback payments
|
15.7
|
|
|
—
|
|
|
15.7
|
|
|||
Dealer Holdback payments
|
36.0
|
|
|
—
|
|
|
36.0
|
|
|||
Transfers (2)
|
(21.6
|
)
|
|
21.6
|
|
|
—
|
|
|||
Write-offs
|
(0.6
|
)
|
|
(0.1
|
)
|
|
(0.7
|
)
|
|||
Recoveries (3)
|
0.3
|
|
|
0.4
|
|
|
0.7
|
|
|||
Balance, end of period
|
$
|
4,466.0
|
|
|
$
|
2,407.6
|
|
|
$
|
6,873.6
|
|
|
|
|
|
|
|
||||||
(In millions)
|
For the Three Months Ended June 30, 2018
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
3,773.5
|
|
|
$
|
1,724.6
|
|
|
$
|
5,498.1
|
|
New Consumer Loan assignments (1)
|
604.3
|
|
|
300.3
|
|
|
904.6
|
|
|||
Principal collected on Loans receivable
|
(480.5
|
)
|
|
(177.3
|
)
|
|
(657.8
|
)
|
|||
Accelerated Dealer Holdback payments
|
16.8
|
|
|
—
|
|
|
16.8
|
|
|||
Dealer Holdback payments
|
32.9
|
|
|
—
|
|
|
32.9
|
|
|||
Transfers (2)
|
(14.7
|
)
|
|
14.7
|
|
|
—
|
|
|||
Write-offs
|
(14.5
|
)
|
|
(0.9
|
)
|
|
(15.4
|
)
|
|||
Recoveries (3)
|
0.6
|
|
|
0.3
|
|
|
0.9
|
|
|||
Balance, end of period
|
$
|
3,918.4
|
|
|
$
|
1,861.7
|
|
|
$
|
5,780.1
|
|
(In millions)
|
For the Six Months Ended June 30, 2019
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
4,141.0
|
|
|
$
|
2,084.2
|
|
|
$
|
6,225.2
|
|
New Consumer Loan assignments (1)
|
1,327.8
|
|
|
732.8
|
|
|
2,060.6
|
|
|||
Principal collected on Loans receivable
|
(1,051.4
|
)
|
|
(457.2
|
)
|
|
(1,508.6
|
)
|
|||
Accelerated Dealer Holdback payments
|
28.0
|
|
|
—
|
|
|
28.0
|
|
|||
Dealer Holdback payments
|
70.6
|
|
|
—
|
|
|
70.6
|
|
|||
Transfers (2)
|
(47.3
|
)
|
|
47.3
|
|
|
—
|
|
|||
Write-offs
|
(3.4
|
)
|
|
(0.2
|
)
|
|
(3.6
|
)
|
|||
Recoveries (3)
|
0.7
|
|
|
0.7
|
|
|
1.4
|
|
|||
Balance, end of period
|
$
|
4,466.0
|
|
|
$
|
2,407.6
|
|
|
$
|
6,873.6
|
|
|
|
|
|
|
|
||||||
(In millions)
|
For the Six Months Ended June 30, 2018
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
3,518.1
|
|
|
$
|
1,530.9
|
|
|
$
|
5,049.0
|
|
New Consumer Loan assignments (1)
|
1,313.5
|
|
|
642.7
|
|
|
1,956.2
|
|
|||
Principal collected on Loans receivable
|
(959.2
|
)
|
|
(342.5
|
)
|
|
(1,301.7
|
)
|
|||
Accelerated Dealer Holdback payments
|
29.4
|
|
|
—
|
|
|
29.4
|
|
|||
Dealer Holdback payments
|
66.1
|
|
|
—
|
|
|
66.1
|
|
|||
Transfers (2)
|
(33.1
|
)
|
|
33.1
|
|
|
—
|
|
|||
Write-offs
|
(18.8
|
)
|
|
(3.0
|
)
|
|
(21.8
|
)
|
|||
Recoveries (3)
|
2.4
|
|
|
0.5
|
|
|
2.9
|
|
|||
Balance, end of period
|
$
|
3,918.4
|
|
|
$
|
1,861.7
|
|
|
$
|
5,780.1
|
|
(1)
|
The Dealer Loans amount represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program. The Purchased Loans amount represents one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.
|
(2)
|
Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback. We transfer the Dealer’s outstanding Dealer Loan balance and the related allowance for credit losses balance to Purchased Loans in the period this forfeiture occurs.
|
(3)
|
Represents collections received on previously written off Loans.
|
(In millions)
|
For the Three Months Ended June 30, 2019
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
1,361.2
|
|
|
$
|
865.0
|
|
|
$
|
2,226.2
|
|
New Consumer Loan assignments (1)
|
244.6
|
|
|
144.1
|
|
|
388.7
|
|
|||
Accretion (2)
|
(224.8
|
)
|
|
(118.9
|
)
|
|
(343.7
|
)
|
|||
Provision for credit losses
|
14.5
|
|
|
0.9
|
|
|
15.4
|
|
|||
Forecast changes
|
3.4
|
|
|
9.6
|
|
|
13.0
|
|
|||
Transfers (3)
|
(8.5
|
)
|
|
11.2
|
|
|
2.7
|
|
|||
Balance, end of period
|
$
|
1,390.4
|
|
|
$
|
911.9
|
|
|
$
|
2,302.3
|
|
|
|
|
|
|
|
||||||
(In millions)
|
For the Three Months Ended June 30, 2018
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
1,191.1
|
|
|
$
|
653.8
|
|
|
$
|
1,844.9
|
|
New Consumer Loan assignments (1)
|
250.9
|
|
|
119.8
|
|
|
370.7
|
|
|||
Accretion (2)
|
(202.6
|
)
|
|
(89.4
|
)
|
|
(292.0
|
)
|
|||
Provision for credit losses
|
3.2
|
|
|
(1.4
|
)
|
|
1.8
|
|
|||
Forecast changes
|
9.7
|
|
|
18.5
|
|
|
28.2
|
|
|||
Transfers (3)
|
(5.7
|
)
|
|
7.1
|
|
|
1.4
|
|
|||
Balance, end of period
|
$
|
1,246.6
|
|
|
$
|
708.4
|
|
|
$
|
1,955.0
|
|
|
|
|
|
|
|
||||||
(In millions)
|
For the Six Months Ended June 30, 2019
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
1,283.0
|
|
|
$
|
782.5
|
|
|
$
|
2,065.5
|
|
New Consumer Loan assignments (1)
|
535.9
|
|
|
304.1
|
|
|
840.0
|
|
|||
Accretion (2)
|
(440.5
|
)
|
|
(227.3
|
)
|
|
(667.8
|
)
|
|||
Provision for credit losses
|
26.1
|
|
|
3.8
|
|
|
29.9
|
|
|||
Forecast changes
|
3.9
|
|
|
25.8
|
|
|
29.7
|
|
|||
Transfers (3)
|
(18.0
|
)
|
|
23.0
|
|
|
5.0
|
|
|||
Balance, end of period
|
$
|
1,390.4
|
|
|
$
|
911.9
|
|
|
$
|
2,302.3
|
|
|
|
|
|
|
|
||||||
(In millions)
|
For the Six Months Ended June 30, 2018
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
1,088.6
|
|
|
$
|
576.9
|
|
|
$
|
1,665.5
|
|
New Consumer Loan assignments (1)
|
540.3
|
|
|
267.6
|
|
|
807.9
|
|
|||
Accretion (2)
|
(394.9
|
)
|
|
(169.5
|
)
|
|
(564.4
|
)
|
|||
Provision for credit losses
|
21.9
|
|
|
3.3
|
|
|
25.2
|
|
|||
Forecast changes
|
3.6
|
|
|
13.8
|
|
|
17.4
|
|
|||
Transfers (3)
|
(12.9
|
)
|
|
16.3
|
|
|
3.4
|
|
|||
Balance, end of period
|
$
|
1,246.6
|
|
|
$
|
708.4
|
|
|
$
|
1,955.0
|
|
(1)
|
The Dealer Loans amount represents the net cash flows expected at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related advances paid to Dealers. The Purchased Loans amount represents the net cash flows expected at the time of assignment on Consumer Loans assigned under our Purchase Program, less the related one-time payments made to Dealers.
|
(2)
|
Represents finance charges excluding the amortization of deferred direct origination costs for Dealer Loans.
|
(3)
|
Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback. We transfer the Dealer’s outstanding Dealer Loan balance, the related allowance for credit losses balance and related expected future net cash flows to Purchased Loans in the period this forfeiture occurs.
|
(In millions)
|
For the Three Months Ended June 30, 2019
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Contractual net cash flows at the time of assignment (1)
|
$
|
955.6
|
|
|
$
|
753.3
|
|
|
$
|
1,708.9
|
|
Expected net cash flows at the time of assignment (2)
|
853.4
|
|
|
490.5
|
|
|
1,343.9
|
|
|||
Fair value at the time of assignment (3)
|
608.8
|
|
|
346.4
|
|
|
955.2
|
|
|||
|
|
|
|
|
|
||||||
(In millions)
|
For the Three Months Ended June 30, 2018
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Contractual net cash flows at the time of assignment (1)
|
$
|
959.9
|
|
|
$
|
656.4
|
|
|
$
|
1,616.3
|
|
Expected net cash flows at the time of assignment (2)
|
855.2
|
|
|
420.1
|
|
|
1,275.3
|
|
|||
Fair value at the time of assignment (3)
|
604.3
|
|
|
300.3
|
|
|
904.6
|
|
|||
|
|
|
|
|
|
||||||
(In millions)
|
For the Six Months Ended June 30, 2019
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Contractual net cash flows at the time of assignment (1)
|
$
|
2,087.1
|
|
|
$
|
1,603.6
|
|
|
$
|
3,690.7
|
|
Expected net cash flows at the time of assignment (2)
|
1,863.7
|
|
|
1,036.9
|
|
|
2,900.6
|
|
|||
Fair value at the time of assignment (3)
|
1,327.8
|
|
|
732.8
|
|
|
2,060.6
|
|
|||
|
|
|
|
|
|
||||||
(In millions)
|
For the Six Months Ended June 30, 2018
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Contractual net cash flows at the time of assignment (1)
|
$
|
2,082.6
|
|
|
$
|
1,422.3
|
|
|
$
|
3,504.9
|
|
Expected net cash flows at the time of assignment (2)
|
1,853.8
|
|
|
910.3
|
|
|
2,764.1
|
|
|||
Fair value at the time of assignment (3)
|
1,313.5
|
|
|
642.7
|
|
|
1,956.2
|
|
(1)
|
The Dealer Loans amount represents the repayments that we were contractually owed at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related Dealer Holdback payments that we would be required to make if we collected all of the contractual repayments. The Purchased Loans amount represents the repayments that we were contractually owed at the time of assignment on Consumer Loans assigned under our Purchase Program.
|
(2)
|
The Dealer Loans amount represents the repayments that we expected to collect at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related Dealer Holdback payments that we expected to make. The Purchased Loans amount represents the repayments that we expected to collect at the time of assignment on Consumer Loans assigned under our Purchase Program.
|
(3)
|
The Dealer Loans amount represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program. The Purchased Loans amount represents one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.
|
|
|
Forecasted Collection Percentage as of (1)
|
|
Current Forecast Variance from
|
|||||||||||||||||
Consumer Loan
Assignment Year
|
|
June 30, 2019
|
|
March 31, 2019
|
|
December 31, 2018
|
|
Initial Forecast
|
|
March 31, 2019
|
|
December 31, 2018
|
|
Initial Forecast
|
|||||||
2010
|
|
77.7
|
%
|
|
77.7
|
%
|
|
77.7
|
%
|
|
73.6
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
4.1
|
%
|
2011
|
|
74.8
|
%
|
|
74.8
|
%
|
|
74.7
|
%
|
|
72.5
|
%
|
|
0.0
|
%
|
|
0.1
|
%
|
|
2.3
|
%
|
2012
|
|
73.9
|
%
|
|
73.8
|
%
|
|
73.8
|
%
|
|
71.4
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
|
2.5
|
%
|
2013
|
|
73.5
|
%
|
|
73.5
|
%
|
|
73.5
|
%
|
|
72.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
1.5
|
%
|
2014
|
|
71.8
|
%
|
|
71.7
|
%
|
|
71.7
|
%
|
|
71.8
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
|
0.0
|
%
|
2015
|
|
65.5
|
%
|
|
65.4
|
%
|
|
65.4
|
%
|
|
67.7
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
|
-2.2
|
%
|
2016
|
|
64.2
|
%
|
|
64.1
|
%
|
|
64.2
|
%
|
|
65.4
|
%
|
|
0.1
|
%
|
|
0.0
|
%
|
|
-1.2
|
%
|
2017
|
|
65.1
|
%
|
|
65.2
|
%
|
|
65.5
|
%
|
|
64.0
|
%
|
|
-0.1
|
%
|
|
-0.4
|
%
|
|
1.1
|
%
|
2018
|
|
65.5
|
%
|
|
65.5
|
%
|
|
65.0
|
%
|
|
63.6
|
%
|
|
0.0
|
%
|
|
0.5
|
%
|
|
1.9
|
%
|
2019 (2)
|
|
64.7
|
%
|
|
64.1
|
%
|
|
—
|
|
|
64.2
|
%
|
|
0.6
|
%
|
|
—
|
|
|
0.5
|
%
|
(1)
|
Represents the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment. Contractual repayments include both principal and interest. Forecasted collection rates are negatively impacted by canceled Consumer Loans as the contractual amount owed is not removed from the denominator for purposes of computing forecasted collection rates in the table.
|
|
|
Forecasted Collection Percentage as of
|
|
Current Forecast Variance from
|
|||||||||||
2019 Consumer Loan Assignment Period
|
|
June 30, 2019
|
|
March 31, 2019
|
|
Initial Forecast
|
|
March 31, 2019
|
|
Initial Forecast
|
|||||
January 1, 2019 through March 31, 2019
|
|
64.9
|
%
|
|
64.1
|
%
|
|
63.9
|
%
|
|
0.8
|
%
|
|
1.0
|
%
|
April 1, 2019 through June 30, 2019
|
|
64.5
|
%
|
|
—
|
|
|
64.4
|
%
|
|
—
|
|
|
0.1
|
%
|
(In millions)
|
As of June 30, 2019
|
||||||||||||||||||||||
|
Loan Pool Performance
Meets or Exceeds Initial Estimates
|
|
Loan Pool Performance
Less than Initial Estimates
|
||||||||||||||||||||
|
Dealer
Loans
|
|
Purchased
Loans
|
|
Total
|
|
Dealer
Loans
|
|
Purchased
Loans
|
|
Total
|
||||||||||||
Loans receivable
|
$
|
1,563.3
|
|
|
$
|
1,771.3
|
|
|
$
|
3,334.6
|
|
|
$
|
2,902.7
|
|
|
$
|
636.3
|
|
|
$
|
3,539.0
|
|
Allowance for credit losses
|
—
|
|
|
—
|
|
|
—
|
|
|
(394.0
|
)
|
|
(95.6
|
)
|
|
(489.6
|
)
|
||||||
Loans receivable, net
|
$
|
1,563.3
|
|
|
$
|
1,771.3
|
|
|
$
|
3,334.6
|
|
|
$
|
2,508.7
|
|
|
$
|
540.7
|
|
|
$
|
3,049.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(In millions)
|
As of December 31, 2018
|
||||||||||||||||||||||
|
Loan Pool Performance
Meets or Exceeds Initial Estimates
|
|
Loan Pool Performance
Less than Initial Estimates
|
||||||||||||||||||||
|
Dealer
Loans
|
|
Purchased
Loans
|
|
Total
|
|
Dealer
Loans
|
|
Purchased
Loans
|
|
Total
|
||||||||||||
Loans receivable
|
$
|
1,355.1
|
|
|
$
|
1,392.1
|
|
|
$
|
2,747.2
|
|
|
$
|
2,785.9
|
|
|
$
|
692.1
|
|
|
$
|
3,478.0
|
|
Allowance for credit losses
|
—
|
|
|
—
|
|
|
—
|
|
|
(378.1
|
)
|
|
(83.8
|
)
|
|
(461.9
|
)
|
||||||
Loans receivable, net
|
$
|
1,355.1
|
|
|
$
|
1,392.1
|
|
|
$
|
2,747.2
|
|
|
$
|
2,407.8
|
|
|
$
|
608.3
|
|
|
$
|
3,016.1
|
|
(In millions)
|
For the Three Months Ended June 30, 2019
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
383.1
|
|
|
$
|
91.1
|
|
|
$
|
474.2
|
|
Provision for credit losses
|
14.5
|
|
|
0.9
|
|
|
15.4
|
|
|||
Transfers (1)
|
(3.3
|
)
|
|
3.3
|
|
|
—
|
|
|||
Write-offs
|
(0.6
|
)
|
|
(0.1
|
)
|
|
(0.7
|
)
|
|||
Recoveries (2)
|
0.3
|
|
|
0.4
|
|
|
0.7
|
|
|||
Balance, end of period
|
$
|
394.0
|
|
|
$
|
95.6
|
|
|
$
|
489.6
|
|
|
|
|
|
|
|
||||||
(In millions)
|
For the Three Months Ended June 30, 2018
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
379.3
|
|
|
$
|
69.1
|
|
|
$
|
448.4
|
|
Provision for credit losses
|
3.2
|
|
|
(1.4
|
)
|
|
1.8
|
|
|||
Transfers (1)
|
(2.7
|
)
|
|
2.7
|
|
|
—
|
|
|||
Write-offs
|
(14.5
|
)
|
|
(0.9
|
)
|
|
(15.4
|
)
|
|||
Recoveries (2)
|
0.6
|
|
|
0.3
|
|
|
0.9
|
|
|||
Balance, end of period
|
$
|
365.9
|
|
|
$
|
69.8
|
|
|
$
|
435.7
|
|
|
|
|
|
|
|
||||||
(In millions)
|
For the Six Months Ended June 30, 2019
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
378.1
|
|
|
$
|
83.8
|
|
|
$
|
461.9
|
|
Provision for credit losses
|
26.1
|
|
|
3.8
|
|
|
29.9
|
|
|||
Transfers (1)
|
(7.5
|
)
|
|
7.5
|
|
|
—
|
|
|||
Write-offs
|
(3.4
|
)
|
|
(0.2
|
)
|
|
(3.6
|
)
|
|||
Recoveries (2)
|
0.7
|
|
|
0.7
|
|
|
1.4
|
|
|||
Balance, end of period
|
$
|
394.0
|
|
|
$
|
95.6
|
|
|
$
|
489.6
|
|
|
|
|
|
|
|
||||||
(In millions)
|
For the Six Months Ended June 30, 2018
|
||||||||||
|
Dealer Loans
|
|
Purchased Loans
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
366.0
|
|
|
$
|
63.4
|
|
|
$
|
429.4
|
|
Provision for credit losses
|
21.9
|
|
|
3.3
|
|
|
25.2
|
|
|||
Transfers (1)
|
(5.6
|
)
|
|
5.6
|
|
|
—
|
|
|||
Write-offs
|
(18.8
|
)
|
|
(3.0
|
)
|
|
(21.8
|
)
|
|||
Recoveries (2)
|
2.4
|
|
|
0.5
|
|
|
2.9
|
|
|||
Balance, end of period
|
$
|
365.9
|
|
|
$
|
69.8
|
|
|
$
|
435.7
|
|
(1)
|
Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback. We transfer the Dealer’s outstanding Dealer Loan balance and the related allowance for credit losses balance to Purchased Loans in the period this forfeiture occurs.
|
(2)
|
Represents collections received on previously written off Loans.
|
(In millions)
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net assumed written premiums
|
$
|
11.9
|
|
|
$
|
14.2
|
|
|
$
|
27.7
|
|
|
$
|
30.4
|
|
Net premiums earned
|
13.1
|
|
|
11.7
|
|
|
25.3
|
|
|
22.0
|
|
||||
Provision for claims
|
8.3
|
|
|
7.3
|
|
|
14.9
|
|
|
12.5
|
|
||||
Amortization of capitalized acquisition costs
|
0.4
|
|
|
0.2
|
|
|
0.7
|
|
|
0.5
|
|
(In millions)
|
|
|
As of
|
||||||
|
Balance Sheet location
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Trust assets
|
Restricted cash and cash equivalents
|
|
$
|
0.5
|
|
|
$
|
0.3
|
|
Trust assets
|
Restricted securities available for sale
|
|
61.5
|
|
|
58.6
|
|
||
Unearned premium
|
Accounts payable and accrued liabilities
|
|
45.7
|
|
|
43.3
|
|
||
Claims reserve (1)
|
Accounts payable and accrued liabilities
|
|
2.0
|
|
|
1.6
|
|
(1)
|
The claims reserve represents our liability for incurred-but-not-reported claims and is estimated based on historical claims experience.
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Ancillary product profit sharing
|
$
|
8.1
|
|
|
$
|
5.8
|
|
|
$
|
18.5
|
|
|
$
|
12.2
|
|
Remarketing fees
|
3.1
|
|
|
3.0
|
|
|
6.5
|
|
|
6.1
|
|
||||
Interest
|
2.4
|
|
|
1.4
|
|
|
4.7
|
|
|
2.1
|
|
||||
Dealer enrollment fees
|
1.1
|
|
|
1.2
|
|
|
2.1
|
|
|
2.3
|
|
||||
Dealer support products and services
|
0.7
|
|
|
1.2
|
|
|
1.4
|
|
|
2.4
|
|
||||
GPS-SID fees
|
0.5
|
|
|
1.4
|
|
|
1.9
|
|
|
3.9
|
|
||||
Other
|
0.1
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
||||
Total
|
$
|
16.0
|
|
|
$
|
14.0
|
|
|
$
|
35.7
|
|
|
$
|
29.0
|
|
(In millions)
|
For the Three Months Ended June 30, 2019
|
||||||||||||||||||||||||||||||
|
Ancillary product profit sharing
|
|
Remarketing fees
|
|
Interest
|
|
Dealer enrollment fees
|
|
Dealer support products and services
|
|
GPS-SID fees
|
|
Other
|
|
Total Other Income
|
||||||||||||||||
Source of income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Third Party Providers
|
$
|
8.1
|
|
|
$
|
—
|
|
|
$
|
2.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.5
|
|
|
$
|
0.1
|
|
|
$
|
11.1
|
|
Dealers
|
—
|
|
|
3.1
|
|
|
—
|
|
|
1.1
|
|
|
0.7
|
|
|
—
|
|
|
—
|
|
|
4.9
|
|
||||||||
Total
|
$
|
8.1
|
|
|
$
|
3.1
|
|
|
$
|
2.4
|
|
|
$
|
1.1
|
|
|
$
|
0.7
|
|
|
$
|
0.5
|
|
|
$
|
0.1
|
|
|
$
|
16.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Timing of revenue recognition
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Over time
|
$
|
8.1
|
|
|
$
|
—
|
|
|
$
|
2.4
|
|
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11.6
|
|
At a point in time
|
—
|
|
|
3.1
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|
0.5
|
|
|
0.1
|
|
|
4.4
|
|
||||||||
Total
|
$
|
8.1
|
|
|
$
|
3.1
|
|
|
$
|
2.4
|
|
|
$
|
1.1
|
|
|
$
|
0.7
|
|
|
$
|
0.5
|
|
|
$
|
0.1
|
|
|
$
|
16.0
|
|
(In millions)
|
For the Six Months Ended June 30, 2019
|
||||||||||||||||||||||||||||||
|
Ancillary product profit sharing
|
|
Remarketing fees
|
|
Interest
|
|
Dealer enrollment fees
|
|
Dealer support products and services
|
|
GPS-SID fees
|
|
Other
|
|
Total Other Income
|
||||||||||||||||
Source of income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Third Party Providers
|
$
|
18.5
|
|
|
$
|
—
|
|
|
$
|
4.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.9
|
|
|
$
|
0.6
|
|
|
$
|
25.7
|
|
Dealers
|
—
|
|
|
6.5
|
|
|
—
|
|
|
2.1
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
10.0
|
|
||||||||
Total
|
$
|
18.5
|
|
|
$
|
6.5
|
|
|
$
|
4.7
|
|
|
$
|
2.1
|
|
|
$
|
1.4
|
|
|
$
|
1.9
|
|
|
$
|
0.6
|
|
|
$
|
35.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Timing of revenue recognition
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Over time
|
$
|
18.5
|
|
|
$
|
—
|
|
|
$
|
4.7
|
|
|
$
|
2.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25.3
|
|
At a point in time
|
—
|
|
|
6.5
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
|
1.9
|
|
|
0.6
|
|
|
10.4
|
|
||||||||
Total
|
$
|
18.5
|
|
|
$
|
6.5
|
|
|
$
|
4.7
|
|
|
$
|
2.1
|
|
|
$
|
1.4
|
|
|
$
|
1.9
|
|
|
$
|
0.6
|
|
|
$
|
35.7
|
|
(In millions)
|
|
As of June 30, 2019
|
||||||||||||||
|
|
Principal Outstanding
|
|
Unamortized Debt Issuance Costs
|
|
Unamortized Discount
|
|
Carrying
Amount
|
||||||||
Revolving secured line of credit (1)
|
|
$
|
38.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
38.4
|
|
Secured financing (2)
|
|
3,246.6
|
|
|
(13.6
|
)
|
|
—
|
|
|
3,233.0
|
|
||||
Senior notes
|
|
950.0
|
|
|
(9.4
|
)
|
|
(1.0
|
)
|
|
939.6
|
|
||||
Mortgage note
|
|
11.6
|
|
|
—
|
|
|
—
|
|
|
11.6
|
|
||||
Total debt
|
|
$
|
4,246.6
|
|
|
$
|
(23.0
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
4,222.6
|
|
|
|
|
|
|
|
|
|
|
||||||||
(In millions)
|
|
As of December 31, 2018
|
||||||||||||||
|
|
Principal Outstanding
|
|
Unamortized Debt Issuance Costs
|
|
Unamortized Discount
|
|
Carrying
Amount
|
||||||||
Revolving secured line of credit (1)
|
|
$
|
171.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
171.9
|
|
Secured financing (2)
|
|
3,108.7
|
|
|
(16.0
|
)
|
|
—
|
|
|
3,092.7
|
|
||||
Senior notes
|
|
550.0
|
|
|
(4.5
|
)
|
|
(1.1
|
)
|
|
544.4
|
|
||||
Mortgage note
|
|
11.9
|
|
|
—
|
|
|
—
|
|
|
11.9
|
|
||||
Total debt
|
|
$
|
3,842.5
|
|
|
$
|
(20.5
|
)
|
|
$
|
(1.1
|
)
|
|
$
|
3,820.9
|
|
(1)
|
Excludes deferred debt issuance costs of
$3.8 million
and
$2.9 million
as of
June 30, 2019
and
December 31, 2018
, respectively, which are included in other assets.
|
(2)
|
Warehouse facilities and Term ABS.
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
||
Financings
|
|
Wholly-owned
Subsidiary
|
|
Maturity Date
|
|
Financing
Amount
|
|
Interest Rate as of
June 30, 2019 |
|||
Revolving Secured Line of Credit
|
|
n/a
|
|
06/22/2022
|
|
|
$
|
340.0
|
|
|
At our option, either LIBOR plus 187.5 basis points or the prime rate plus 87.5 basis points
|
Warehouse Facility II (1)
|
|
CAC Warehouse Funding Corp. II
|
|
12/20/2020
|
(2)
|
|
400.0
|
|
|
LIBOR plus 175 basis points (3)
|
|
Warehouse Facility IV (1)
|
|
CAC Warehouse Funding LLC IV
|
|
04/30/2020
|
(2)
|
|
250.0
|
|
|
LIBOR plus 225 basis points (3)
|
|
Warehouse Facility V (1)
|
|
CAC Warehouse Funding LLC V
|
|
08/17/2021
|
(4)
|
|
100.0
|
|
|
LIBOR plus 190 basis points (3)
|
|
Warehouse Facility VI (1)
|
|
CAC Warehouse Funding LLC VI
|
|
09/30/2020
|
(2)
|
|
75.0
|
|
|
LIBOR plus 200 basis points
|
|
Warehouse Facility VII (1)
|
|
CAC Warehouse Funding LLC VII
|
|
12/17/2020
|
(5)
|
|
150.0
|
|
|
Commercial paper rate plus 200 basis points (3)
|
|
Term ABS 2016-2 (1)
|
|
Credit Acceptance Funding LLC 2016-2
|
|
05/15/2018
|
(2)
|
|
350.2
|
|
|
Fixed rate
|
|
Term ABS 2016-3 (1)
|
|
Credit Acceptance Funding LLC 2016-3
|
|
10/15/2018
|
(2)
|
|
350.0
|
|
|
Fixed rate
|
|
Term ABS 2017-1 (1)
|
|
Credit Acceptance Funding LLC 2017-1
|
|
02/15/2019
|
(2)
|
|
350.0
|
|
|
Fixed rate
|
|
Term ABS 2017-2 (1)
|
|
Credit Acceptance Funding LLC 2017-2
|
|
06/17/2019
|
(2)
|
|
450.0
|
|
|
Fixed rate
|
|
Term ABS 2017-3 (1)
|
|
Credit Acceptance Funding LLC 2017-3
|
|
10/15/2019
|
(2)
|
|
350.0
|
|
|
Fixed rate
|
|
Term ABS 2018-1 (1)
|
|
Credit Acceptance Funding LLC 2018-1
|
|
02/17/2020
|
(2)
|
|
500.0
|
|
|
Fixed rate
|
|
Term ABS 2018-2 (1)
|
|
Credit Acceptance Funding LLC 2018-2
|
|
05/15/2020
|
(2)
|
|
450.0
|
|
|
Fixed rate
|
|
Term ABS 2018-3 (1)
|
|
Credit Acceptance Funding LLC 2018-3
|
|
08/17/2020
|
(2)
|
|
398.3
|
|
|
Fixed rate
|
|
Term ABS 2019-1 (1)
|
|
Credit Acceptance Funding LLC 2019-1
|
|
02/15/2021
|
(2)
|
|
402.5
|
|
|
Fixed rate
|
|
2021 Senior Notes
|
|
n/a
|
|
02/15/2021
|
|
|
300.0
|
|
|
Fixed rate
|
|
2023 Senior Notes
|
|
n/a
|
|
03/15/2023
|
|
|
250.0
|
|
|
Fixed rate
|
|
2026 Senior Notes
|
|
n/a
|
|
03/15/2026
|
|
|
400.0
|
|
|
Fixed rate
|
|
Mortgage Note
|
|
Chapter 4 Properties, LLC
|
|
08/06/2023
|
|
|
12.0
|
|
|
LIBOR plus 150 basis points
|
(1)
|
Financing made available only to a specified subsidiary of the Company.
|
(2)
|
Represents the revolving maturity date. The outstanding balance will amortize after the revolving maturity date based on the cash flows of the pledged assets.
|
(3)
|
Interest rate cap agreements are in place to limit the exposure to increasing interest rates.
|
(4)
|
Represents the revolving maturity date. The outstanding balance will amortize after the revolving maturity date and any amounts remaining on August 17, 2023 will be due on that date.
|
(5)
|
Represents the revolving maturity date. The outstanding balance will amortize after the revolving maturity date and any amounts remaining on December 17, 2022 will be due on that date.
|
(In millions)
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revolving Secured Line of Credit
|
|
|
|
|
|
|
|
||||||||
Maximum outstanding principal balance
|
$
|
282.9
|
|
|
$
|
265.4
|
|
|
$
|
282.9
|
|
|
$
|
265.4
|
|
Average outstanding principal balance
|
81.0
|
|
|
73.2
|
|
|
84.7
|
|
|
56.3
|
|
||||
Warehouse Facility II
|
|
|
|
|
|
|
|
||||||||
Maximum outstanding principal balance
|
201.0
|
|
|
201.0
|
|
|
201.0
|
|
|
201.0
|
|
||||
Average outstanding principal balance
|
88.4
|
|
|
4.4
|
|
|
90.7
|
|
|
4.4
|
|
||||
Warehouse Facility IV
|
|
|
|
|
|
|
|
||||||||
Maximum outstanding principal balance
|
—
|
|
|
99.0
|
|
|
100.0
|
|
|
99.0
|
|
||||
Average outstanding principal balance
|
—
|
|
|
2.2
|
|
|
2.2
|
|
|
1.1
|
|
||||
Warehouse Facility V
|
|
|
|
|
|
|
|
||||||||
Maximum outstanding principal balance
|
—
|
|
|
—
|
|
|
—
|
|
|
99.0
|
|
||||
Average outstanding principal balance
|
—
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
||||
Warehouse Facility VI
|
|
|
|
|
|
|
|
||||||||
Maximum outstanding principal balance
|
—
|
|
|
—
|
|
|
—
|
|
|
75.0
|
|
||||
Average outstanding principal balance
|
—
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
||||
Warehouse Facility VII
|
|
|
|
|
|
|
|
||||||||
Maximum outstanding principal balance
|
25.0
|
|
|
150.0
|
|
|
101.5
|
|
|
150.0
|
|
||||
Average outstanding principal balance
|
1.9
|
|
|
26.4
|
|
|
2.1
|
|
|
14.6
|
|
(Dollars in millions)
|
As of
|
||||||
|
June 30, 2019
|
|
December 31, 2018
|
||||
Revolving Secured Line of Credit
|
|
|
|
||||
Principal balance outstanding
|
$
|
38.4
|
|
|
$
|
171.9
|
|
Amount available for borrowing (1)
|
301.6
|
|
|
178.1
|
|
||
Interest rate
|
4.27
|
%
|
|
4.38
|
%
|
||
Warehouse Facility II
|
|
|
|
||||
Principal balance outstanding
|
$
|
201.0
|
|
|
$
|
—
|
|
Amount available for borrowing (1)
|
199.0
|
|
|
400.0
|
|
||
Loans pledged as collateral
|
293.0
|
|
|
—
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
4.6
|
|
|
1.0
|
|
||
Interest rate
|
4.19
|
%
|
|
—
|
%
|
||
Warehouse Facility IV
|
|
|
|
||||
Principal balance outstanding
|
$
|
—
|
|
|
$
|
—
|
|
Amount available for borrowing (1)
|
250.0
|
|
|
250.0
|
|
||
Loans pledged as collateral
|
—
|
|
|
—
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
1.0
|
|
|
1.0
|
|
||
Interest rate
|
—
|
%
|
|
—
|
%
|
||
Warehouse Facility V
|
|
|
|
||||
Principal balance outstanding
|
$
|
—
|
|
|
$
|
—
|
|
Amount available for borrowing (1)
|
100.0
|
|
|
100.0
|
|
||
Loans pledged as collateral
|
—
|
|
|
—
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
1.0
|
|
|
1.0
|
|
||
Interest rate
|
—
|
%
|
|
—
|
%
|
||
Warehouse Facility VI
|
|
|
|
||||
Principal balance outstanding
|
$
|
—
|
|
|
$
|
—
|
|
Amount available for borrowing (1)
|
75.0
|
|
|
75.0
|
|
||
Loans pledged as collateral
|
—
|
|
|
—
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
—
|
|
|
0.1
|
|
||
Interest rate
|
—
|
%
|
|
—
|
%
|
||
Warehouse Facility VII
|
|
|
|
||||
Principal balance outstanding
|
$
|
25.0
|
|
|
$
|
—
|
|
Amount available for borrowing (1)
|
125.0
|
|
|
150.0
|
|
||
Loans pledged as collateral
|
30.9
|
|
|
—
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
1.5
|
|
|
1.0
|
|
||
Interest rate
|
4.65
|
%
|
|
—
|
%
|
||
Term ABS 2016-1
|
|
|
|
||||
Principal balance outstanding
|
$
|
—
|
|
|
$
|
125.3
|
|
Loans pledged as collateral
|
—
|
|
|
320.8
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
—
|
|
|
29.6
|
|
||
Interest rate
|
—
|
%
|
|
4.41
|
%
|
||
Term ABS 2016-2
|
|
|
|
||||
Principal balance outstanding
|
$
|
61.6
|
|
|
$
|
184.5
|
|
Loans pledged as collateral
|
259.0
|
|
|
335.0
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
26.8
|
|
|
28.3
|
|
||
Interest rate
|
4.06
|
%
|
|
3.20
|
%
|
||
|
|
|
|
Term ABS 2016-3
|
|
|
|
||||
Principal balance outstanding
|
$
|
161.1
|
|
|
$
|
300.6
|
|
Loans pledged as collateral
|
294.7
|
|
|
392.7
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
28.8
|
|
|
30.7
|
|
||
Interest rate
|
2.97
|
%
|
|
2.59
|
%
|
||
Term ABS 2017-1
|
|
|
|
||||
Principal balance outstanding
|
$
|
247.1
|
|
|
$
|
350.0
|
|
Loans pledged as collateral
|
371.4
|
|
|
429.8
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
31.7
|
|
|
30.9
|
|
||
Interest rate
|
2.87
|
%
|
|
2.78
|
%
|
||
Term ABS 2017-2
|
|
|
|
||||
Principal balance outstanding
|
$
|
450.0
|
|
|
$
|
450.0
|
|
Loans pledged as collateral
|
544.8
|
|
|
548.4
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
42.9
|
|
|
39.4
|
|
||
Interest rate
|
2.72
|
%
|
|
2.72
|
%
|
||
Term ABS 2017-3
|
|
|
|
||||
Principal balance outstanding
|
$
|
350.0
|
|
|
$
|
350.0
|
|
Loans pledged as collateral
|
423.1
|
|
|
426.1
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
32.6
|
|
|
28.6
|
|
||
Interest rate
|
2.88
|
%
|
|
2.88
|
%
|
||
Term ABS 2018-1
|
|
|
|
||||
Principal balance outstanding
|
$
|
500.0
|
|
|
$
|
500.0
|
|
Loans pledged as collateral
|
609.5
|
|
|
614.5
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
45.8
|
|
|
41.8
|
|
||
Interest rate
|
3.24
|
%
|
|
3.24
|
%
|
||
Term ABS 2018-2
|
|
|
|
||||
Principal balance outstanding
|
$
|
450.0
|
|
|
$
|
450.0
|
|
Loans pledged as collateral
|
549.0
|
|
|
552.2
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
40.9
|
|
|
36.3
|
|
||
Interest rate
|
3.68
|
%
|
|
3.68
|
%
|
||
Term ABS 2018-3
|
|
|
|
||||
Principal balance outstanding
|
$
|
398.3
|
|
|
$
|
398.3
|
|
Loans pledged as collateral
|
535.9
|
|
|
578.8
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
36.4
|
|
|
33.6
|
|
||
Interest rate
|
3.72
|
%
|
|
3.72
|
%
|
||
Term ABS 2019-1
|
|
|
|
||||
Principal balance outstanding
|
$
|
402.5
|
|
|
$
|
—
|
|
Loans pledged as collateral
|
514.2
|
|
|
—
|
|
||
Restricted cash and cash equivalents pledged as collateral
|
34.1
|
|
|
—
|
|
||
Interest rate
|
3.53
|
%
|
|
—
|
%
|
||
2021 Senior Notes
|
|
|
|
||||
Principal balance outstanding
|
$
|
300.0
|
|
|
$
|
300.0
|
|
Interest rate
|
6.125
|
%
|
|
6.125
|
%
|
||
2023 Senior Notes
|
|
|
|
||||
Principal balance outstanding
|
$
|
250.0
|
|
|
$
|
250.0
|
|
Interest rate
|
7.375
|
%
|
|
7.375
|
%
|
||
2026 Senior Notes
|
|
|
|
||||
Principal balance outstanding
|
$
|
400.0
|
|
|
$
|
—
|
|
Interest rate
|
6.625
|
%
|
|
—
|
%
|
Mortgage Note
|
|
|
|
||||
Principal balance outstanding
|
$
|
11.6
|
|
|
$
|
11.9
|
|
Interest rate
|
3.94
|
%
|
|
3.85
|
%
|
(1)
|
Availability may be limited by the amount of assets pledged as collateral.
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|||||||
As of June 30, 2019
|
|||||||||||||||||
Facility Amount
|
|
Facility Name
|
|
Purpose
|
|
Start
|
|
End
|
|
Notional
|
|
Cap Interest Rate (1)
|
|||||
$
|
400.0
|
|
|
Warehouse Facility II
|
|
Cap Floating Rate
|
|
12/2017
|
|
12/2020
|
|
$
|
205.0
|
|
|
5.50
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
250.0
|
|
|
Warehouse Facility IV
|
|
Cap Floating Rate
|
|
05/2017
|
|
04/2021
|
|
100.0
|
|
|
6.50
|
%
|
||
|
|
|
|
Cap Floating Rate
|
|
05/2018
|
|
04/2021
|
|
150.0
|
|
|
6.50
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
250.0
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
100.0
|
|
|
Warehouse Facility V
|
|
Cap Floating Rate
|
|
08/2018
|
|
08/2023
|
|
75.0
|
|
|
6.50
|
%
|
||
150.0
|
|
|
Warehouse Facility VII
|
|
Cap Floating Rate
|
|
12/2017
|
|
11/2021
|
|
150.0
|
|
|
5.50
|
%
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|||||||
As of December 31, 2018
|
|||||||||||||||||
Facility Amount
|
|
Facility Name
|
|
Purpose
|
|
Start
|
|
End
|
|
Notional
|
|
Cap Interest Rate (1)
|
|||||
$
|
400.0
|
|
|
Warehouse Facility II
|
|
Cap Floating Rate
|
|
12/2017
|
|
12/2020
|
|
$
|
205.0
|
|
|
5.50
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
250.0
|
|
|
Warehouse Facility IV
|
|
Cap Floating Rate
|
|
04/2016
|
|
04/2019
|
|
25.0
|
|
|
5.50
|
%
|
||
|
|
|
|
Cap Floating Rate
|
|
05/2017
|
|
04/2021
|
|
75.0
|
|
|
6.50
|
%
|
|||
|
|
|
|
Cap Floating Rate
|
|
05/2018
|
|
04/2021
|
|
150.0
|
|
|
6.50
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
250.0
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
100.0
|
|
|
Warehouse Facility V
|
|
Cap Floating Rate
|
|
08/2018
|
|
08/2023
|
|
75.0
|
|
|
6.50
|
%
|
||
150.0
|
|
|
Warehouse Facility VII
|
|
Cap Floating Rate
|
|
12/2017
|
|
11/2021
|
|
150.0
|
|
|
5.50
|
%
|
||
125.3
|
|
|
Term ABS 2016-1
|
|
Cap Floating Rate
|
|
04/2016
|
|
02/2019
|
|
64.2
|
|
|
5.00
|
%
|
(1)
|
Rate excludes the spread over the LIBOR rate.
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
U.S. federal statutory income tax rate
|
21.0
|
%
|
|
21.0
|
%
|
|
21.0
|
%
|
|
21.0
|
%
|
State income taxes
|
2.7
|
%
|
|
2.5
|
%
|
|
2.8
|
%
|
|
2.5
|
%
|
Excess tax benefits from stock-based compensation plans
|
—
|
%
|
|
—
|
%
|
|
-1.9
|
%
|
|
-0.1
|
%
|
Other
|
-0.1
|
%
|
|
0.2
|
%
|
|
0.1
|
%
|
|
0.4
|
%
|
Effective income tax rate
|
23.6
|
%
|
|
23.7
|
%
|
|
22.0
|
%
|
|
23.8
|
%
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||
Common shares
|
18,659,113
|
|
|
19,158,654
|
|
|
18,664,387
|
|
|
19,156,165
|
|
Vested restricted stock units
|
285,559
|
|
|
306,909
|
|
|
285,515
|
|
|
295,561
|
|
Basic number of weighted average shares outstanding
|
18,944,672
|
|
|
19,465,563
|
|
|
18,949,902
|
|
|
19,451,726
|
|
Dilutive effect of restricted stock and restricted stock units
|
5,290
|
|
|
6,601
|
|
|
26,387
|
|
|
20,233
|
|
Dilutive number of weighted average shares outstanding
|
18,949,962
|
|
|
19,472,164
|
|
|
18,976,289
|
|
|
19,471,959
|
|
(Dollars in millions)
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
||||||||||
Stock Repurchases
|
|
Number of Shares Repurchased
|
|
Cost
|
|
Number of Shares Repurchased
|
|
Cost
|
||||||
Open Market (1)
|
|
225,915
|
|
|
$
|
91.0
|
|
|
—
|
|
|
$
|
—
|
|
Other (2)
|
|
42,696
|
|
|
18.2
|
|
|
6,185
|
|
|
2.0
|
|
||
Total
|
|
268,611
|
|
|
$
|
109.2
|
|
|
6,185
|
|
|
$
|
2.0
|
|
(1)
|
Represents repurchases under authorizations by the board of directors for the repurchase of shares by us from time to time in the open market or in privately negotiated transactions. On February 13, 2017, the board of directors authorized the repurchase of up to
one million
shares of our common stock in addition to the board’s prior authorizations. As of
June 30, 2019
, we had authorization to repurchase
213,550
shares of our common stock.
|
(2)
|
Represents shares of common stock released to us by team members as payment of tax withholdings upon the vesting of restricted stock and restricted stock units and the conversion of restricted stock units to common stock.
|
(In millions)
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Restricted stock
|
|
$
|
0.7
|
|
|
$
|
0.7
|
|
|
$
|
1.5
|
|
|
$
|
1.4
|
|
Restricted stock units
|
|
0.8
|
|
|
1.3
|
|
|
2.2
|
|
|
3.7
|
|
||||
Total
|
|
$
|
1.5
|
|
|
$
|
2.0
|
|
|
$
|
3.7
|
|
|
$
|
5.1
|
|
Restricted Stock
|
|
Number of Shares
|
|
Weighted Average Grant-Date Fair Value Per Share
|
|||
Non-vested as of December 31, 2018
|
|
150,647
|
|
|
$
|
117.41
|
|
Granted
|
|
5,301
|
|
|
441.54
|
|
|
Vested
|
|
(17,971
|
)
|
|
148.14
|
|
|
Forfeited
|
|
(214
|
)
|
|
371.74
|
|
|
Non-vested as of June 30, 2019
|
|
137,763
|
|
|
$
|
125.48
|
|
Restricted Stock Units
|
|
Number of Restricted
Stock Units |
|
Weighted Average Grant-Date Fair Value Per Share
|
|||
Outstanding as of December 31, 2018
|
|
516,773
|
|
|
$
|
127.07
|
|
Granted
|
|
3,000
|
|
|
453.64
|
|
|
Converted
|
|
(87,842
|
)
|
|
106.54
|
|
|
Forfeited
|
|
(3,100
|
)
|
|
206.45
|
|
|
Outstanding as of June 30, 2019
|
|
428,831
|
|
|
$
|
132.99
|
|
|
|
Forecasted Collection Percentage as of (1)
|
|
Current Forecast Variance from
|
|||||||||||||||||
Consumer Loan Assignment Year
|
|
June 30, 2019
|
|
March 31, 2019
|
|
December 31, 2018
|
|
Initial Forecast
|
|
March 31, 2019
|
|
December 31, 2018
|
|
Initial Forecast
|
|||||||
2010
|
|
77.7
|
%
|
|
77.7
|
%
|
|
77.7
|
%
|
|
73.6
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
4.1
|
%
|
2011
|
|
74.8
|
%
|
|
74.8
|
%
|
|
74.7
|
%
|
|
72.5
|
%
|
|
0.0
|
%
|
|
0.1
|
%
|
|
2.3
|
%
|
2012
|
|
73.9
|
%
|
|
73.8
|
%
|
|
73.8
|
%
|
|
71.4
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
|
2.5
|
%
|
2013
|
|
73.5
|
%
|
|
73.5
|
%
|
|
73.5
|
%
|
|
72.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
1.5
|
%
|
2014
|
|
71.8
|
%
|
|
71.7
|
%
|
|
71.7
|
%
|
|
71.8
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
|
0.0
|
%
|
2015
|
|
65.5
|
%
|
|
65.4
|
%
|
|
65.4
|
%
|
|
67.7
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
|
-2.2
|
%
|
2016
|
|
64.2
|
%
|
|
64.1
|
%
|
|
64.2
|
%
|
|
65.4
|
%
|
|
0.1
|
%
|
|
0.0
|
%
|
|
-1.2
|
%
|
2017
|
|
65.1
|
%
|
|
65.2
|
%
|
|
65.5
|
%
|
|
64.0
|
%
|
|
-0.1
|
%
|
|
-0.4
|
%
|
|
1.1
|
%
|
2018
|
|
65.5
|
%
|
|
65.5
|
%
|
|
65.0
|
%
|
|
63.6
|
%
|
|
0.0
|
%
|
|
0.5
|
%
|
|
1.9
|
%
|
2019 (2)
|
|
64.7
|
%
|
|
64.1
|
%
|
|
—
|
|
|
64.2
|
%
|
|
0.6
|
%
|
|
—
|
|
|
0.5
|
%
|
(1)
|
Represents the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment. Contractual repayments include both principal and interest. Forecasted collection rates are negatively impacted by canceled Consumer Loans as the contractual amount owed is not removed from the denominator for purposes of computing forecasted collection rates in the table.
|
(2)
|
The forecasted collection rate for 2019 Consumer Loans as of June 30, 2019 includes both Consumer Loans that were in our portfolio as of March 31, 2019 and Consumer Loans assigned during the most recent quarter. The following table provides forecasted collection rates for each of these segments:
|
|
|
Forecasted Collection Percentage as of
|
|
Current Forecast Variance from
|
|||||||||||
2019 Consumer Loan Assignment Period
|
|
June 30, 2019
|
|
March 31, 2019
|
|
Initial Forecast
|
|
March 31, 2019
|
|
Initial Forecast
|
|||||
January 1, 2019 through March 31, 2019
|
|
64.9
|
%
|
|
64.1
|
%
|
|
63.9
|
%
|
|
0.8
|
%
|
|
1.0
|
%
|
April 1, 2019 through June 30, 2019
|
|
64.5
|
%
|
|
—
|
|
|
64.4
|
%
|
|
—
|
|
|
0.1
|
%
|
(In millions)
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
Increase (Decrease) in Forecasted Net Cash Flows
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Dealer Loans
|
|
$
|
3.4
|
|
|
$
|
9.7
|
|
|
$
|
3.9
|
|
|
$
|
3.6
|
|
Purchased Loans
|
|
9.6
|
|
|
18.5
|
|
|
25.8
|
|
|
13.8
|
|
||||
Total Loans
|
|
$
|
13.0
|
|
|
$
|
28.2
|
|
|
$
|
29.7
|
|
|
$
|
17.4
|
|
|
|
Average
|
|||||||||
Consumer Loan Assignment Year
|
|
Consumer Loan (1)
|
|
Advance (2)
|
|
Initial Loan Term (in months)
|
|||||
2010
|
|
$
|
14,480
|
|
|
$
|
6,473
|
|
|
41
|
|
2011
|
|
15,686
|
|
|
7,137
|
|
|
46
|
|
||
2012
|
|
15,468
|
|
|
7,165
|
|
|
47
|
|
||
2013
|
|
15,445
|
|
|
7,344
|
|
|
47
|
|
||
2014
|
|
15,692
|
|
|
7,492
|
|
|
47
|
|
||
2015
|
|
16,354
|
|
|
7,272
|
|
|
50
|
|
||
2016
|
|
18,218
|
|
|
7,976
|
|
|
53
|
|
||
2017
|
|
20,230
|
|
|
8,746
|
|
|
55
|
|
||
2018
|
|
22,158
|
|
|
9,635
|
|
|
57
|
|
||
2019 (3)
|
|
22,740
|
|
|
10,023
|
|
|
57
|
|
(1)
|
Represents the repayments that we were contractually owed on Consumer Loans at the time of assignment, which include both principal and interest.
|
(2)
|
Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program. Payments of Dealer Holdback and accelerated Dealer Holdback are not included.
|
(3)
|
The averages for 2019 Consumer Loans include both Consumer Loans that were in our portfolio as of March 31, 2019 and Consumer Loans assigned during the most recent quarter. The following table provides averages for each of these segments:
|
|
|
Average
|
|||||||||
2019 Consumer Loan Assignment Period
|
|
Consumer Loan
|
|
Advance
|
|
Initial Loan Term (in months)
|
|||||
January 1, 2019 through March 31, 2019
|
|
$
|
22,321
|
|
|
$
|
9,795
|
|
|
57
|
|
April 1, 2019 through June 30, 2019
|
|
23,251
|
|
|
10,301
|
|
|
58
|
|
|
|
As of June 30, 2019
|
||||||||||
Consumer Loan Assignment Year
|
|
Forecasted Collection %
|
|
Advance % (1)
|
|
Spread %
|
|
% of Forecast Realized (2)
|
||||
2010
|
|
77.7
|
%
|
|
44.7
|
%
|
|
33.0
|
%
|
|
99.8
|
%
|
2011
|
|
74.8
|
%
|
|
45.5
|
%
|
|
29.3
|
%
|
|
99.4
|
%
|
2012
|
|
73.9
|
%
|
|
46.3
|
%
|
|
27.6
|
%
|
|
99.0
|
%
|
2013
|
|
73.5
|
%
|
|
47.6
|
%
|
|
25.9
|
%
|
|
98.5
|
%
|
2014
|
|
71.8
|
%
|
|
47.7
|
%
|
|
24.1
|
%
|
|
97.0
|
%
|
2015
|
|
65.5
|
%
|
|
44.5
|
%
|
|
21.0
|
%
|
|
91.6
|
%
|
2016
|
|
64.2
|
%
|
|
43.8
|
%
|
|
20.4
|
%
|
|
78.6
|
%
|
2017
|
|
65.1
|
%
|
|
43.2
|
%
|
|
21.9
|
%
|
|
58.8
|
%
|
2018
|
|
65.5
|
%
|
|
43.5
|
%
|
|
22.0
|
%
|
|
31.3
|
%
|
2019 (3)
|
|
64.7
|
%
|
|
44.1
|
%
|
|
20.6
|
%
|
|
6.9
|
%
|
(1)
|
Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program as a percentage of the initial balance of the Consumer Loans. Payments of Dealer Holdback and accelerated Dealer Holdback are not included.
|
(2)
|
Presented as a percentage of total forecasted collections.
|
(3)
|
The forecasted collection rate, advance rate and spread for 2019 Consumer Loans as of June 30, 2019 include both Consumer Loans that were in our portfolio as of March 31, 2019 and Consumer Loans assigned during the most recent quarter. The following table provides forecasted collection rates, advance rates and spreads for each of these segments:
|
|
|
As of June 30, 2019
|
|||||||
2019 Consumer Loan Assignment Period
|
|
Forecasted
Collection %
|
|
Advance %
|
|
Spread %
|
|||
January 1, 2019 through March 31, 2019
|
|
64.9
|
%
|
|
43.9
|
%
|
|
21.0
|
%
|
April 1, 2019 through June 30, 2019
|
|
64.5
|
%
|
|
44.3
|
%
|
|
20.2
|
%
|
|
|
Dealer Loans
|
|
Purchased Loans
|
||||||||||||||
|
|
Forecasted Collection Percentage as of (1)
|
|
|
|
Forecasted Collection Percentage as of (1)
|
|
|
||||||||||
Consumer Loan Assignment Year
|
|
June 30, 2019
|
|
Initial
Forecast |
|
Variance
|
|
June 30, 2019
|
|
Initial
Forecast |
|
Variance
|
||||||
2010
|
|
77.6
|
%
|
|
73.6
|
%
|
|
4.0
|
%
|
|
78.7
|
%
|
|
73.1
|
%
|
|
5.6
|
%
|
2011
|
|
74.6
|
%
|
|
72.4
|
%
|
|
2.2
|
%
|
|
76.3
|
%
|
|
72.7
|
%
|
|
3.6
|
%
|
2012
|
|
73.7
|
%
|
|
71.3
|
%
|
|
2.4
|
%
|
|
75.9
|
%
|
|
71.4
|
%
|
|
4.5
|
%
|
2013
|
|
73.5
|
%
|
|
72.1
|
%
|
|
1.4
|
%
|
|
74.4
|
%
|
|
71.6
|
%
|
|
2.8
|
%
|
2014
|
|
71.7
|
%
|
|
71.9
|
%
|
|
-0.2
|
%
|
|
72.6
|
%
|
|
70.9
|
%
|
|
1.7
|
%
|
2015
|
|
64.8
|
%
|
|
67.5
|
%
|
|
-2.7
|
%
|
|
69.4
|
%
|
|
68.5
|
%
|
|
0.9
|
%
|
2016
|
|
63.3
|
%
|
|
65.1
|
%
|
|
-1.8
|
%
|
|
66.7
|
%
|
|
66.5
|
%
|
|
0.2
|
%
|
2017
|
|
64.5
|
%
|
|
63.8
|
%
|
|
0.7
|
%
|
|
66.7
|
%
|
|
64.6
|
%
|
|
2.1
|
%
|
2018
|
|
65.0
|
%
|
|
63.6
|
%
|
|
1.4
|
%
|
|
66.4
|
%
|
|
63.5
|
%
|
|
2.9
|
%
|
2019
|
|
64.6
|
%
|
|
64.1
|
%
|
|
0.5
|
%
|
|
64.9
|
%
|
|
64.2
|
%
|
|
0.7
|
%
|
(1)
|
The forecasted collection rates presented for Dealer Loans and Purchased Loans reflect the Consumer Loan classification at the time of assignment.
|
|
|
Dealer Loans
|
|
Purchased Loans
|
||||||||||||||
Consumer Loan Assignment Year
|
|
Forecasted Collection % (1)
|
|
Advance % (1)(2)
|
|
Spread %
|
|
Forecasted Collection % (1)
|
|
Advance % (1)(2)
|
|
Spread %
|
||||||
2010
|
|
77.6
|
%
|
|
44.4
|
%
|
|
33.2
|
%
|
|
78.7
|
%
|
|
47.3
|
%
|
|
31.4
|
%
|
2011
|
|
74.6
|
%
|
|
45.1
|
%
|
|
29.5
|
%
|
|
76.3
|
%
|
|
49.3
|
%
|
|
27.0
|
%
|
2012
|
|
73.7
|
%
|
|
46.0
|
%
|
|
27.7
|
%
|
|
75.9
|
%
|
|
50.0
|
%
|
|
25.9
|
%
|
2013
|
|
73.5
|
%
|
|
47.2
|
%
|
|
26.3
|
%
|
|
74.4
|
%
|
|
51.5
|
%
|
|
22.9
|
%
|
2014
|
|
71.7
|
%
|
|
47.2
|
%
|
|
24.5
|
%
|
|
72.6
|
%
|
|
51.8
|
%
|
|
20.8
|
%
|
2015
|
|
64.8
|
%
|
|
43.4
|
%
|
|
21.4
|
%
|
|
69.4
|
%
|
|
50.2
|
%
|
|
19.2
|
%
|
2016
|
|
63.3
|
%
|
|
42.1
|
%
|
|
21.2
|
%
|
|
66.7
|
%
|
|
48.6
|
%
|
|
18.1
|
%
|
2017
|
|
64.5
|
%
|
|
42.1
|
%
|
|
22.4
|
%
|
|
66.7
|
%
|
|
45.8
|
%
|
|
20.9
|
%
|
2018
|
|
65.0
|
%
|
|
42.7
|
%
|
|
22.3
|
%
|
|
66.4
|
%
|
|
45.2
|
%
|
|
21.2
|
%
|
2019
|
|
64.6
|
%
|
|
43.2
|
%
|
|
21.4
|
%
|
|
64.9
|
%
|
|
45.7
|
%
|
|
19.2
|
%
|
(1)
|
The forecasted collection rates and advance rates presented for Dealer Loans and Purchased Loans reflect the Consumer Loan classification at the time of assignment.
|
(2)
|
Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program as a percentage of the initial balance of the Consumer Loans. Payments of Dealer Holdback and accelerated Dealer Holdback are not included.
|
|
|
Year over Year Percent Change
|
||||
Three Months Ended
|
|
Unit Volume
|
|
Dollar Volume (1)
|
||
March 31, 2018
|
|
18.5
|
%
|
|
32.9
|
%
|
June 30, 2018
|
|
19.8
|
%
|
|
34.7
|
%
|
September 30, 2018
|
|
9.4
|
%
|
|
20.3
|
%
|
December 31, 2018
|
|
5.9
|
%
|
|
12.4
|
%
|
March 31, 2019
|
|
0.4
|
%
|
|
5.1
|
%
|
June 30, 2019
|
|
0.0
|
%
|
|
5.6
|
%
|
(1)
|
Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program. Payments of Dealer Holdback and accelerated Dealer Holdback are not included.
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
|
% Change
|
|
2019
|
|
2018
|
|
% Change
|
||||||
Consumer Loan unit volume
|
92,613
|
|
|
92,626
|
|
|
0.0
|
%
|
|
205,457
|
|
|
204,971
|
|
|
0.2
|
%
|
Active Dealers (1)
|
9,562
|
|
|
8,624
|
|
|
10.9
|
%
|
|
11,303
|
|
|
10,231
|
|
|
10.5
|
%
|
Average volume per active Dealer
|
9.7
|
|
|
10.7
|
|
|
-9.3
|
%
|
|
18.2
|
|
|
20.0
|
|
|
-9.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consumer Loan unit volume from Dealers active both periods
|
70,348
|
|
|
77,848
|
|
|
-9.6
|
%
|
|
164,961
|
|
|
180,955
|
|
|
-8.8
|
%
|
Dealers active both periods
|
5,905
|
|
|
5,905
|
|
|
—
|
|
|
7,296
|
|
|
7,296
|
|
|
—
|
|
Average volume per Dealer active both periods
|
11.9
|
|
|
13.2
|
|
|
-9.6
|
%
|
|
22.6
|
|
|
24.8
|
|
|
-8.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consumer Loan unit volume from Dealers
not
active both periods
|
22,265
|
|
|
14,778
|
|
|
50.7
|
%
|
|
40,496
|
|
|
24,016
|
|
|
68.6
|
%
|
Dealers
not
active both periods
|
3,657
|
|
|
2,719
|
|
|
34.5
|
%
|
|
4,007
|
|
|
2,935
|
|
|
36.5
|
%
|
Average volume per Dealer
not
active both periods
|
6.1
|
|
|
5.4
|
|
|
13.0
|
%
|
|
10.1
|
|
|
8.2
|
|
|
23.2
|
%
|
(1)
|
Active Dealers are Dealers who have received funding for at least one Consumer Loan during the period.
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
|
% Change
|
|
2019
|
|
2018
|
|
% Change
|
||||||
Consumer Loan unit volume from new active Dealers
|
4,295
|
|
|
3,875
|
|
|
10.8
|
%
|
|
16,665
|
|
|
16,601
|
|
|
0.4
|
%
|
New active Dealers (1)
|
1,008
|
|
|
911
|
|
|
10.6
|
%
|
|
2,232
|
|
|
2,069
|
|
|
7.9
|
%
|
Average volume per new active Dealer
|
4.3
|
|
|
4.3
|
|
|
0.0
|
%
|
|
7.5
|
|
|
8.0
|
|
|
-6.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Attrition (2)
|
-16.0
|
%
|
|
-16.9
|
%
|
|
|
|
-11.7
|
%
|
|
-14.3
|
%
|
|
|
(1)
|
New active Dealers are Dealers who enrolled in our program and have received funding for their first Loan from us during the period.
|
(2)
|
Attrition is measured according to the following formula: decrease in Consumer Loan unit volume from Dealers who have received funding for at least one Loan during the comparable period of the prior year but did not receive funding for any Loans during the current period divided by prior year comparable period Consumer Loan unit volume.
|
|
|
Unit Volume
|
|
Dollar Volume (1)
|
||||||||
Three Months Ended
|
|
Dealer Loans
|
|
Purchased Loans
|
|
Dealer Loans
|
|
Purchased Loans
|
||||
March 31, 2018
|
|
70.1
|
%
|
|
29.9
|
%
|
|
67.4
|
%
|
|
32.6
|
%
|
June 30, 2018
|
|
69.7
|
%
|
|
30.3
|
%
|
|
66.8
|
%
|
|
33.2
|
%
|
September 30, 2018
|
|
69.5
|
%
|
|
30.5
|
%
|
|
67.0
|
%
|
|
33.0
|
%
|
December 31, 2018
|
|
69.4
|
%
|
|
30.6
|
%
|
|
67.4
|
%
|
|
32.6
|
%
|
March 31, 2019
|
|
67.4
|
%
|
|
32.6
|
%
|
|
65.0
|
%
|
|
35.0
|
%
|
June 30, 2019
|
|
66.7
|
%
|
|
33.3
|
%
|
|
63.7
|
%
|
|
36.3
|
%
|
(1)
|
Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program. Payments of Dealer Holdback and accelerated Dealer Holdback are not included.
|
(Dollars in millions, except per share data)
|
For the Three Months Ended
June 30, |
|||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Finance charges
|
$
|
341.5
|
|
|
$
|
289.7
|
|
|
$
|
51.8
|
|
|
17.9
|
%
|
Premiums earned
|
13.1
|
|
|
11.7
|
|
|
1.4
|
|
|
12.0
|
%
|
|||
Other income
|
16.0
|
|
|
14.0
|
|
|
2.0
|
|
|
14.3
|
%
|
|||
Total revenue
|
370.6
|
|
|
315.4
|
|
|
55.2
|
|
|
17.5
|
%
|
|||
Costs and expenses:
|
|
|
|
|
|
|
|
|
||||||
Salaries and wages (1)
|
47.3
|
|
|
39.7
|
|
|
7.6
|
|
|
19.1
|
%
|
|||
General and administrative (1)
|
16.8
|
|
|
12.7
|
|
|
4.1
|
|
|
32.3
|
%
|
|||
Sales and marketing (1)
|
17.7
|
|
|
17.2
|
|
|
0.5
|
|
|
2.9
|
%
|
|||
Provision for credit losses
|
15.4
|
|
|
1.8
|
|
|
13.6
|
|
|
755.6
|
%
|
|||
Interest
|
49.8
|
|
|
38.7
|
|
|
11.1
|
|
|
28.7
|
%
|
|||
Provision for claims
|
8.3
|
|
|
7.3
|
|
|
1.0
|
|
|
13.7
|
%
|
|||
Total costs and expenses
|
155.3
|
|
|
117.4
|
|
|
37.9
|
|
|
32.3
|
%
|
|||
Income before provision for income taxes
|
215.3
|
|
|
198.0
|
|
|
17.3
|
|
|
8.7
|
%
|
|||
Provision for income taxes
|
50.9
|
|
|
47.0
|
|
|
3.9
|
|
|
8.3
|
%
|
|||
Net income
|
$
|
164.4
|
|
|
$
|
151.0
|
|
|
$
|
13.4
|
|
|
8.9
|
%
|
Net income per share:
|
|
|
|
|
|
|
|
|
||||||
Basic
|
$
|
8.68
|
|
|
$
|
7.76
|
|
|
$
|
0.92
|
|
|
11.9
|
%
|
Diluted
|
$
|
8.68
|
|
|
$
|
7.75
|
|
|
$
|
0.93
|
|
|
12.0
|
%
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
||||||
Basic
|
18,944,672
|
|
|
19,465,563
|
|
|
(520,891
|
)
|
|
-2.7
|
%
|
|||
Diluted
|
18,949,962
|
|
|
19,472,164
|
|
|
(522,202
|
)
|
|
-2.7
|
%
|
|||
|
|
|
|
|
|
|
|
|
||||||
(1) Operating expenses
|
$
|
81.8
|
|
|
$
|
69.6
|
|
|
$
|
12.2
|
|
|
17.5
|
%
|
(Dollars in millions)
|
For the Three Months Ended June 30,
|
||||||||||
|
2019
|
|
2018
|
|
Change
|
||||||
Average net Loans receivable balance
|
$
|
6,273.9
|
|
|
$
|
5,202.8
|
|
|
$
|
1,071.1
|
|
Average yield on our Loan portfolio
|
21.8
|
%
|
|
22.3
|
%
|
|
-0.5
|
%
|
(In millions)
|
Year over Year Change
|
||
Impact on finance charges:
|
For the Three Months Ended June 30, 2019
|
||
Due to an increase in the average net Loans receivable balance
|
$
|
59.7
|
|
Due to a decrease in the average yield
|
(7.9
|
)
|
|
Total increase in finance charges
|
$
|
51.8
|
|
•
|
An increase in salaries and wages expense of 19.1% ($7.6 million) comprised of the following:
|
◦
|
An increase of $5.1 million in cash-based incentive compensation expense primarily due to an improvement in Company performance measures.
|
◦
|
Excluding the change in cash-based incentive compensation expense, salaries and wages expense increased $2.5 million, primarily related to our support function as a result of an increase in the number of team members.
|
•
|
An increase in general and administrative expense of
$4.1 million
, or
32.3%
, primarily due to increases in legal and building expenses.
|
(Dollars in millions)
|
For the Three Months Ended June 30,
|
||||||||||
|
2019
|
|
2018
|
|
Change
|
||||||
Interest expense
|
$
|
49.8
|
|
|
$
|
38.7
|
|
|
$
|
11.1
|
|
Average outstanding debt principal balance (1)
|
4,270.0
|
|
|
3,632.3
|
|
|
637.7
|
|
|||
Average cost of debt
|
4.7
|
%
|
|
4.3
|
%
|
|
0.4
|
%
|
(1)
|
Includes the unamortized debt discount and excludes deferred debt issuance costs.
|
(Dollars in millions, except per share data)
|
For the Six Months Ended
June 30, |
|||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Finance charges
|
$
|
663.4
|
|
|
$
|
560.0
|
|
|
103.4
|
|
|
18.5
|
%
|
|
Premiums earned
|
25.3
|
|
|
22.0
|
|
|
3.3
|
|
|
15.0
|
%
|
|||
Other income
|
35.7
|
|
|
29.0
|
|
|
6.7
|
|
|
23.1
|
%
|
|||
Total revenue
|
724.4
|
|
|
611.0
|
|
|
113.4
|
|
|
18.6
|
%
|
|||
Costs and expenses:
|
|
|
|
|
|
|
|
|||||||
Salaries and wages (1)
|
96.0
|
|
|
82.2
|
|
|
13.8
|
|
|
16.8
|
%
|
|||
General and administrative (1)
|
30.7
|
|
|
27.2
|
|
|
3.5
|
|
|
12.9
|
%
|
|||
Sales and marketing (1)
|
36.5
|
|
|
35.0
|
|
|
1.5
|
|
|
4.3
|
%
|
|||
Provision for credit losses
|
29.9
|
|
|
25.2
|
|
|
4.7
|
|
|
18.7
|
%
|
|||
Interest
|
94.8
|
|
|
73.2
|
|
|
21.6
|
|
|
29.5
|
%
|
|||
Provision for claims
|
14.9
|
|
|
12.5
|
|
|
2.4
|
|
|
19.2
|
%
|
|||
Total costs and expenses
|
302.8
|
|
|
255.3
|
|
|
47.5
|
|
|
18.6
|
%
|
|||
Income before provision for income taxes
|
421.6
|
|
|
355.7
|
|
|
65.9
|
|
|
18.5
|
%
|
|||
Provision for income taxes
|
92.8
|
|
|
84.6
|
|
|
8.2
|
|
|
9.7
|
%
|
|||
Net income
|
$
|
328.8
|
|
|
$
|
271.1
|
|
|
$
|
57.7
|
|
|
21.3
|
%
|
Net income per share:
|
|
|
|
|
|
|
|
|||||||
Basic
|
$
|
17.35
|
|
|
$
|
13.94
|
|
|
$
|
3.41
|
|
|
24.5
|
%
|
Diluted
|
$
|
17.33
|
|
|
$
|
13.92
|
|
|
$
|
3.41
|
|
|
24.5
|
%
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|||||||
Basic
|
18,949,902
|
|
|
19,451,726
|
|
|
(501,824
|
)
|
|
-2.6
|
%
|
|||
Diluted
|
18,976,289
|
|
|
19,471,959
|
|
|
(495,670
|
)
|
|
-2.5
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
(1) Operating expenses
|
$
|
163.2
|
|
|
$
|
144.4
|
|
|
18.8
|
|
|
13.0
|
%
|
(Dollars in millions)
|
For the Six Months Ended June 30,
|
||||||||||
|
2019
|
|
2018
|
|
Change
|
||||||
Average net Loans receivable balance
|
$
|
6,084.0
|
|
|
$
|
4,991.9
|
|
|
$
|
1,092.1
|
|
Average yield on our Loan portfolio
|
21.8
|
%
|
|
22.4
|
%
|
|
-0.6
|
%
|
(In millions)
|
Year over Year Change
|
||
Impact on finance charges:
|
For the Six Months Ended June 30, 2019
|
||
Due to an increase in the average net Loans receivable balance
|
$
|
122.5
|
|
Due to a decrease in the average yield
|
(19.1
|
)
|
|
Total increase in finance charges
|
$
|
103.4
|
|
•
|
An increase of $9.3 million in cash-based incentive compensation expense primarily due to an improvement in Company performance measures.
|
•
|
Excluding the change in cash-based incentive compensation expense, salaries and wages expense increased $4.5 million, related to an increase for our support function primarily as a result of an increase in the number of team members.
|
(Dollars in millions)
|
For the Six Months Ended June 30,
|
||||||||||
|
2019
|
|
2018
|
|
Change
|
||||||
Interest expense
|
$
|
94.8
|
|
|
$
|
73.2
|
|
|
$
|
21.6
|
|
Average outstanding debt principal balance (1)
|
4,144.7
|
|
|
3,467.7
|
|
|
677.0
|
|
|||
Average cost of debt
|
4.6
|
%
|
|
4.2
|
%
|
|
0.4
|
%
|
(1)
|
Includes the unamortized debt discount and excludes deferred debt issuance costs.
|
(In millions)
|
|
|
||
Year
|
|
Scheduled Principal Debt Maturities (1)
|
||
Remainder of 2019
|
|
$
|
563.8
|
|
2020
|
|
1,333.1
|
|
|
2021
|
|
1,471.8
|
|
|
2022
|
|
218.4
|
|
|
2023
|
|
259.5
|
|
|
Over five years
|
|
400.0
|
|
|
Total
|
|
$
|
4,246.6
|
|
(1)
|
The principal maturities of certain financings are estimated based on forecasted collections.
|
•
|
Our inability to accurately forecast and estimate the amount and timing of future collections could have a material adverse effect on results of operations.
|
•
|
We may be unable to execute our business strategy due to current economic conditions.
|
•
|
We may be unable to continue to access or renew funding sources and obtain capital needed to maintain and grow our business.
|
•
|
The terms of our debt limit how we conduct our business.
|
•
|
A violation of the terms of our Term ABS facilities or Warehouse facilities could have a material adverse impact on our operations.
|
•
|
The conditions of the U.S. and international capital markets may adversely affect lenders with which we have relationships, causing us to incur additional costs and reducing our sources of liquidity, which may adversely affect our financial position, liquidity and results of operations.
|
•
|
Our substantial debt could negatively impact our business, prevent us from satisfying our debt obligations and adversely affect our financial condition.
|
•
|
Due to competition from traditional financing sources and non-traditional lenders, we may not be able to compete successfully.
|
•
|
We may not be able to generate sufficient cash flows to service our outstanding debt and fund operations and may be forced to take other actions to satisfy our obligations under such debt.
|
•
|
Interest rate fluctuations may adversely affect our borrowing costs, profitability and liquidity.
|
•
|
Reduction in our credit rating could increase the cost of our funding from, and restrict our access to, the capital markets and adversely affect our liquidity, financial condition and results of operations.
|
•
|
We may incur substantially more debt and other liabilities. This could exacerbate further the risks associated with our current debt levels.
|
•
|
The regulation to which we are or may become subject could result in a material adverse effect on our business.
|
•
|
Adverse changes in economic conditions, the automobile or finance industries, or the non-prime consumer market could adversely affect our financial position, liquidity and results of operations, the ability of key vendors that we depend on to supply us with services, and our ability to enter into future financing transactions.
|
•
|
Litigation we are involved in from time to time may adversely affect our financial condition, results of operations and cash flows.
|
•
|
Changes in tax laws and the resolution of uncertain income tax matters could have a material adverse effect on our results of operations and cash flows from operations.
|
•
|
Our dependence on technology could have a material adverse effect on our business.
|
•
|
Our use of electronic contracts could impact our ability to perfect our ownership or security interest in Consumer Loans.
|
•
|
Reliance on third parties to administer our ancillary product offerings could adversely affect our business and financial results.
|
•
|
We are dependent on our senior management and the loss of any of these individuals or an inability to hire additional team members could adversely affect our ability to operate profitably.
|
•
|
Our reputation is a key asset to our business, and our business may be affected by how we are perceived in the marketplace.
|
•
|
The concentration of our Dealers in several states could adversely affect us.
|
•
|
Failure to properly safeguard confidential consumer and team member information could subject us to liability, decrease our profitability and damage our reputation.
|
•
|
A small number of our shareholders have the ability to significantly influence matters requiring shareholder approval and such shareholders have interests which may conflict with the interests of our other security holders.
|
•
|
Reliance on our outsourced business functions could adversely affect our business.
|
•
|
Our ability to hire and retain foreign information technology personnel could be hindered by immigration restrictions.
|
•
|
Natural disasters, acts of war, terrorist attacks and threats or the escalation of military activity in response to these attacks or otherwise may negatively affect our business, financial condition and results of operations.
|
Exhibit
No.
|
|
Description
|
|
Fifth Amendment to Sixth Amended and Restated Credit Agreement dated as of June 24, 2019 among the Company, Comerica Bank and the other banks signatory thereto and Comerica Bank, as administrative agent for the banks (incorporated by reference to Exhibit 4.101 to the Company’s Current Report on Form 8-K filed June 26, 2019).
|
|
|
Amendment No. 2 to the Sixth Amended and Restated Loan and Security Agreement dated as of July 12, 2019 among the Company, CAC Warehouse Funding Corporation II and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.102 to the Company’s Current Report on Form 8-K filed July 15, 2019).
|
|
|
Fourth Amendment to Loan Security Agreement dated as of July 16, 2019 among the Company, CAC
Warehouse Funding LLC V, Fifth Third Bank and Systems & Services Technologies, Inc.
|
|
|
Second Amendment to Loan and Security Agreement, dated as of July 18, 2019 among the Company, CAC Warehouse Funding LLC VII and Credit Suisse AG, New York Branch.
|
|
|
Second Amendment to Loan and Security Agreement dated as of July 25, 2019 among the Company, CAC Warehouse Funding Corporation VI and Flagstar Bank, FSB (incorporated by reference to Exhibit 4.105 to the Company’s Current Report on Form 8-K filed July 26, 2019).
|
|
|
Loan and Security Agreement, dated as of July 26, 2019, among the Company, CAC Warehouse Funding LLC VIII, Citizens Bank N.A. and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.106 to the Company’s Current Report on Form 8-K filed July 29, 2019).
|
|
|
Contribution Agreement, dated as of July 26, 2019, between the Company and CAC Warehouse Funding LLC VIII (incorporated by reference to Exhibit 4.107 to the Company’s Current Report on Form 8-K filed July 29, 2019).
|
|
|
Backup Servicer Agreement, dated as of July 26, 2019, among the Company, CAC Warehouse Funding LLC VIII, Citizens Bank, N.A. and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.108 to the Company’s Current Report on Form 8-K filed July 29, 2019).
|
|
|
Amended and Restated Intercreditor Agreement, dated as of July 26, 2019, among the Company, CAC Warehouse Funding Corporation II, CAC Warehouse Funding LLC IV, CAC Warehouse Funding LLC V, CAC Warehouse Funding LLC VI, CAC Warehouse Funding LLC VII, CAC Warehouse Funding LLC VIII, Credit Acceptance Funding LLC 2019-1, Credit Acceptance Funding LLC 2018-3, Credit Acceptance Funding LLC 2018-2, Credit Acceptance Funding LLC 2018-1, Credit Acceptance Funding LLC 2017-3, Credit Acceptance Funding LLC 2017-2, Credit Acceptance Funding LLC 2017-1, Credit Acceptance Funding LLC 2016-3, Credit Acceptance Funding LLC 2016-2, Credit Acceptance Auto Loan Trust 2019-1, Credit Acceptance Auto Loan Trust 2018-3, Credit Acceptance Auto Loan Trust 2018-2, Credit Acceptance Auto Loan Trust 2018-1, Credit Acceptance Auto Loan Trust 2017-3, Credit Acceptance Auto Loan Trust 2017-2, Credit Acceptance Auto Loan Trust 2017-1, Credit Acceptance Auto Loan Trust 2016-3, Credit Acceptance Auto Loan Trust 2016-2, Wells Fargo Bank, National Association, as agent, Fifth Third Bank, as agent, Bank of Montreal, as agent, Flagstar Bank, FSB, as agent, Citizens Bank, N.A., as agent and Comerica Bank, as agent (incorporated by reference to Exhibit 4.109 to the Company’s Current Report on Form 8-K filed July 29, 2019).
|
|
|
First Amendment to Amended and Restated Loan and Security Agreement dated as of July 26, 2019 among the Company, CAC Warehouse Funding LLC IV, Bank of Montreal, Citizens Bank, N.A., BMO Capital Markets Corp., and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.110 to the Company’s Current Report on Form 8-K filed July 29, 2019).
|
|
|
Amended and Restated Backup Servicing Agreement, dated as of July 26, 2019, among the Company, CAC Warehouse Funding LLC IV, Bank of Montreal, BMO Capital Markets Corp., and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.111 to the Company’s Current Report on Form 8-K filed July 29, 2019).
|
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101(SCH)
|
|
Inline XBRL Taxonomy Extension Schema Document.
|
101(CAL)
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
101(DEF)
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
|
101(LAB)
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document.
|
101(PRE)
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
|
104
|
|
Cover Page Interactive Data File.
|
|
|
|
|
CREDIT ACCEPTANCE CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
By:
|
/s/ Kenneth S. Booth
|
|
|
|
Kenneth S. Booth
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
Date:
|
July 30, 2019
|
|
1 Year Credit Acceptance Chart |
1 Month Credit Acceptance Chart |
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