AmeriCredit Reports Second Quarter 2004 EPS of $0.30 and Increases Fiscal Year Guidance.Business Editors FORT WORTH, Texas--(BUSINESS WIRE)--Jan. 22, 2004 AmeriCredit AmeriCredit Corp.(NYSE: ACF) is a Fort Worth-based company that provides car loans, both directly and through automobile dealerships, to medium- and high-risk customers in the United States and Canada. Their headquarters is located in Fort Worth, Texas. Corp. (NYSE NYSE See: New York Stock Exchange :ACF (Advanced Communications Function) An earlier official product line name for IBM SNA programs, such as VTAM (ACF/VTAM) and NCP (ACF/NCP). ACF - Advanced Communications Function )
-- Credit results improved
-- New charge-off policy implemented
-- Unrestricted cash balance grows to $524.8 million
-- Measured, deliberate growth plan launched
AMERICREDIT CORP. (NYSE:ACF) today announced net income of $47.2 million, or $0.30 per share, for its second fiscal quarter ended December December: see month. 31, 2003. AmeriCredit reported a net loss of $56.3 million, or $0.37 per share, for the same period a year earlier. For the six months ended December 31, 2003, AmeriCredit reported net income of $80.5 million, or $0.51 per share, versus earnings of $19.4 million, or $0.16 per share, for the six months ended December 31, 2002. Automobile automobile, self-propelled vehicle used for travel on land. The term is commonly applied to a four-wheeled vehicle designed to carry two to six passengers and a limited amount of cargo, as contrasted with a truck, which is designed primarily for the transportation of loan purchases were $700.0 million for the second quarter of fiscal year 2004, compared to $745.1 million in the September September: see month. quarter. This sequential One after the other in some consecutive order such as by name or number. change in new loan volume was in-line In-line Used in the context of general equities. (1) An order or market in a specific security within the inside market; 2) any announcement (earnings) that adheres closely to Wall Street analysts' expectations. with normal seasonal trends. Managed auto receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed totaled approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $13.0 billion at December 31, 2003. Managed auto receivables 31-to-60 days delinquent delinquent 1) adj. not paid in full amount or on time. 2) n. short for an underage violator of the law as in juvenile delinquent. DELINQUENT, civil law. He who has been guilty of some crime, offence or failure of duty. were 7.5% of the portfolio at December 31, 2003, compared to 9.2% at December 31, 2002, and 7.6% at September 30, 2003. Accounts more than 60 days delinquent were 2.9% of the portfolio at December 31, 2003, improved from 4.1% at December 31, 2002, and unchanged compared to September 30, 2003. Effective for the quarter ended December 31, 2003, AmeriCredit has revised its repossession The taking back of an item that has been sold on credit and delivered to the purchaser because the payments have not been made on it. For example, if an individual fails to render prompt payments on a new car, the car might be subject to repossession by the finance company, charge-off Eliminate or write off. The term charge-off is used to describe the process of removing from the records of a company something that was once regarded as an asset but has subsequently become worthless. policy. The Company will now charge off accounts when the customers' redemption The liberation of an estate in real property from a mortgage. Redemption is the process by which land that has been mortgaged or pledged is bought back or reclaimed. It is accomplished through a payment of the debt owed or a fulfillment of the other conditions. period to reclaim a repossessed auto has expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. . Previously, the Company charged off accounts at the time that repossessed inventory was liquidated DAMAGES, LIQUIDATED, contracts. When the parties to a contract stipulate for the payment of a certain sum, as a satisfaction fixed and agreed upon by them, for the not doing of certain things particularly mentioned in the agreement, the sum so fixed upon is called liquidated damages. (q.v. at auction. To implement this new policy, AmeriCredit incurred additional charge-offs of $59.4 million at December 31, 2003, related to the acceleration acceleration, change in the velocity of a body with respect to time. Since velocity is a vector quantity, involving both magnitude and direction, acceleration is also a vector. In order to produce an acceleration, a force must be applied to the body. of charge-off timing, raising managed portfolio credit losses to $308.3 million from $248.9 million. This one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. cumulative adjustment changes the annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. charge-off rate for the December 2003 quarter to 9.1%, from 7.3% of the managed portfolio under the old policy. The annualized charge-off rate was 7.6% for the September 2003 quarter. Going forward, the Company forecasts that annualized charge-offs will decline to the 6.0% to 6.9% range during calendar year 2004. AmeriCredit's unrestricted cash balance totaled $524.8 million at December 31, 2003, compared to $358.0 million at September 30, 2003. The unrestricted cash balance increased primarily from $168.0 million in net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). the Company received from its convertible senior note offering in November November: see month. . "The Company's credit results showed improvement during the December quarter. Furthermore, we strengthened our balance sheet, and our liquidity will only get stronger as we start receiving a significant amount of cash from our old-FSA portfolio beginning later this year," said Clifton Clifton, industrial city (1990 pop. 71,742), Passaic co., NE N.J., on the Passaic River; settled 1685, set off from Passaic and inc. 1917. It has steel, textile equipment, chemical, plastics, clothing, and electronics industries. Morris, chief executive officer of AmeriCredit. "So, with the economy improving and the successful execution of the Company's revised operating plan in 2003, AmeriCredit is now ready to move forward and begin to grow again." The Company is adopting a flexible growth plan that will move its loan origination The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. base to a target of $1 billion per quarter by the end of this fiscal year, with the goal of growing at a measured, deliberate Willful; purposeful; determined after thoughtful evaluation of all relevant factors; dispassionate. To act with a particular intent, which is derived from a careful consideration of factors that influence the choice to be made. pace averaging 10 to 15 percent annually thereafter. "By slowing the decline in the portfolio balance in calendar year 2004, we can set the stage for portfolio and earnings growth in 2005," said AmeriCredit president Dan Berce. "We are targeting high risk-adjusted returns Risk-Adjusted Return A measure of how much risk a fund or portfolio takes on to earn its returns, usually expressed as a number or a rating. Notes: This is often represented by the Sharpe Ratio. The more return per unit of risk, the better. and will maintain a strong balance sheet with more liquidity than we have carried in the past."
Regulation FD
-- Pursuant to Regulation FD, the Company provides its
expectations regarding future business trends to the public
via a press release or 8-K filing. The Company anticipates
some risks and uncertainties with its business. The guidance
below includes the Company's forecast for fiscal year 2004 and
calendar year 2004.
Net income and EPS forecast
12 mos. ending 12 mos. ending
6/30/04 12/31/04
-------------------- ---------------
Net income ($ millions) $145 - $165 $150 - $190
Earnings per share $0.91 - $1.03 $0.93 - $1.17
AmeriCredit will host a conference call for analysts and investors today at 5:30 P.M. Eastern Standard Time. For a live Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the broadcast of this conference call, please go to the Company's web site to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call. About AmeriCredit AmeriCredit Corp. is a leading independent middle-market The term middle-market may refer to either a type of newspaper or a type of company. A middle-market newspaper is one that attempts to cater to readers who want some entertainment value from their newspaper as well as adequate serious coverage of significant news auto finance company. Using its branch network and strategic alliances with auto groups and banks, the Company purchases retail installment contracts installment contract n. an agreement in which payments of money, delivery of goods or performance of services are to be made in a series of payments, deliveries or performances, usually on specific dates or upon certain happenings. entered into by auto dealers with consumers who are typically unable to obtain financing from traditional sources. AmeriCredit has more than one million customers and approximately $13 billion in managed auto receivables. The Company was founded in 1992 and is headquartered in Fort Worth, Texas Fort Worth is the fifth-largest city in the state of Texas, 18th-largest city in the United States[1], and voted one of "America’s Most Livable Communities. . For more information, visit www.americredit.com. Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties detailed from time to time in the Company's filings and reports with the Securities and Exchange Commission including the Company's annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the period ended June June: see month. 30, 2003. Such risks include - but are not limited to - variable economic conditions, adverse portfolio performance, volatile With regard to computer memory, it means "temporary" and not "highly changeable," which is the usual meaning of the word. See volatile memory. 1. (programming) volatile - volatile variable. 2. (storage) volatile - See non-volatile storage. wholesale values, reliance on warehouse financing and capital markets, fluctuating fluc·tu·ate v. fluc·tu·at·ed, fluc·tu·at·ing, fluc·tu·ates v.intr. 1. To vary irregularly. See Synonyms at swing. 2. To rise and fall in or as if in waves; undulate. v. interest rates, increased competition, regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. changes and exposure to litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. . These forward-looking statements are based on the beliefs of the Company's management as well as assumptions made by and information currently available to Company management. Actual events or results may differ materially.
AmeriCredit Corp.
Consolidated Income Statements
(Unaudited, Dollars in Thousands, Except Per Share Amounts)
Three Months Ended Six Months Ended
December 31, December 31,
------------------------- -------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------
Revenue:
Finance charge
income $225,014 $133,943 $436,786 $224,572
Gain on sale of
receivables - - - 132,084
Servicing income 47,959 4,910 116,951 121,844
Other income 8,511 5,613 15,992 10,633
------------ ------------ ------------ ------------
281,484 144,466 569,729 489,133
------------ ------------ ------------ ------------
Costs and
expenses:
Operating
expenses 88,340 102,343 169,324 218,169
Provision for
loan losses 61,356 86,892 125,599 152,676
Interest expense 56,287 39,884 145,031 79,903
Restructuring
charges (271) 6,899 468 6,899
------------ ------------ ------------ ------------
205,712 236,018 440,422 457,647
------------ ------------ ------------ ------------
Income (loss)
before income
taxes 75,772 (91,552) 129,307 31,486
Income tax
provision
(benefit) 28,604 (35,248) 48,814 12,122
------------ ------------ ------------ ------------
Net income
(loss) $47,168 $(56,304) $80,493 $19,364
============ ============ ============ ============
Earnings (loss)
per share:
Basic $0.30 $(0.37) $0.51 $0.16
============ ============ ============ ============
Diluted $0.30 $(0.37) $0.51 $0.16
============ ============ ============ ============
Weighted average
shares 156,600,326 153,001,207 156,533,957 119,420,462
============ ============ ============ ============
Weighted average
shares and
assumed
incremental
shares 158,735,017 153,001,207 157,789,512 120,032,197
============ ============ ============ ============
Consolidated Balance Sheets
(Unaudited, Dollars in Thousands)
December 31, September 30, June 30,
2003 2003 2003
------------ ------------- -----------
Cash and cash equivalents $524,765 $357,985 $316,921
Finance receivables, net 5,618,639 5,404,569 4,996,616
Interest-only receivables from
Trusts 168,359 214,949 213,084
Investments in Trust
receivables 644,979 684,144 760,528
Restricted cash - gain on sale
Trusts 455,468 383,557 387,006
Restricted cash -
securitization notes payable 338,982 272,468 229,917
Restricted cash - warehouse
credit facilities 65,335 327,376 764,832
Property and equipment, net 112,366 117,681 123,713
Other assets 175,957 236,742 315,412
------------ ------------- -----------
Total assets $8,104,850 $7,999,471 $8,108,029
============ ============= ===========
Warehouse credit facilities $705,235 $1,373,616 $1,272,438
Whole loan purchase facility - - 902,873
Securitization notes payable 4,556,267 3,848,446 3,281,370
Senior notes 358,611 370,634 378,432
Convertible debt 200,000 - -
Other notes payable 28,212 31,941 34,599
Funding payable 25,857 122,053 25,562
Accrued taxes and expenses 125,249 158,371 162,433
Derivative financial
instruments 40,060 58,091 66,531
Deferred income taxes 107,948 110,849 103,162
------------ ------------- -----------
Total liabilities 6,147,439 6,074,001 6,227,400
Shareholders' equity 1,957,411 1,925,470 1,880,629
------------ ------------- -----------
Total liabilities and
shareholders' equity $8,104,850 $7,999,471 $8,108,029
============ ============= ===========
Consolidated Statements of Cash Flows
(Unaudited, Dollars in Thousands)
Three Months Ended Six Months Ended
December 31, December 31,
--------------------- ----------------------
2003 2002 2003 2002
--------- ----------- ---------- -----------
Cash flows from operating
activities:
Net income (loss) $47,168 $(56,304) $80,493 $19,364
Adjustments to reconcile
net income (loss)
to net cash provided by
operating activities:
Depreciation and
amortization 11,956 11,383 54,275 22,536
Provision for loan
losses 61,356 86,892 125,599 152,676
Deferred income taxes (3,633) (88,479) (3,232) (82,918)
(Accretion)
amortization of
present value
discount (16,805) 2,391 (41,511) (49,962)
Impairment of credit
enhancement assets 18,314 70,649 31,569 88,958
Non-cash gain on sale
of receivables - - - (124,831)
Non-cash restructuring
charges and other (1,043) 79 907 6,108
Distributions from gain on
sale Trusts - net of swap
payments (4,223) 47,856 78,069 111,118
Initial deposits to credit
enhancement assets - - - (58,101)
Change in assets and
liabilities:
Other assets 77,037 8,175 98,605 (16,549)
Accrued taxes and
expenses (30,076) (65,440) (32,558) (30,563)
Purchases, principal
collections and sales of
receivables held for sale - - - 1,922,076
--------- ----------- ---------- -----------
Net cash provided by
operating activities 160,051 17,202 392,216 1,959,912
--------- ----------- ---------- -----------
Cash flows from investing
activities:
Purchases and principal
collections of
receivables (383,007) (1,838,255) (750,633) (3,660,778)
Purchases of property and
equipment (683) 508 (2,137) (2,333)
Net change in restricted
cash and other 207,087 (263,962) 638,815 (429,739)
--------- ----------- ---------- -----------
Net cash used by
investing activities (176,603) (2,101,709) (113,955) (4,092,850)
--------- ----------- ---------- -----------
Cash flows from financing
activities:
Net change in warehouse
credit facilities (668,381) (70,797) (567,203) (1,465)
Net change in whole loan
purchase facility - - (905,000) -
Net change in
securitization notes 703,647 1,792,459 1,271,569 1,792,459
Net change in senior notes
and other (27,591) (8,400) (45,435) (51,840)
Proceeds from issuance of
convertible debt 172,951 - 172,951 -
Proceeds from issuance of
common stock 2,331 480,945 2,640 481,317
--------- ----------- ---------- -----------
Net cash provided (used)
by financing activities 182,957 2,194,207 (70,478) 2,220,471
--------- ----------- ---------- -----------
Net increase in cash and
cash equivalents 166,405 109,700 207,783 87,533
Effect of Canadian
exchange rate changes on
cash and cash equivalents 375 (4) 61 (99)
Cash and cash equivalents
at beginning of period 357,985 70,087 316,921 92,349
--------- ----------- ---------- -----------
Cash and cash equivalents
at end of period $524,765 $179,783 $524,765 $179,783
========= =========== ========== ===========
Other Financial Data
(Unaudited, Dollars in Thousands)
Three Months Ended Six Months Ended
December 31, December 31,
-------------------------- -------------------------
2003 2002 2003 2002
------------ ------------- ------------ ------------
Loan originations $700,041 $1,887,003 $1,445,117 $4,306,087
Loans securitized 1,311,477 2,032,287 2,322,527 4,540,193
Average on-book
receivables $5,870,265 $3,136,066 $5,678,328 $2,547,350
Average gain on
sale receivables 7,622,491 12,930,404 8,284,781 13,134,949
------------ ------------- ------------ ------------
Average managed
receivables $13,492,756 $16,066,470 $13,963,109 $15,682,299
============ ============= ============ ============
December 31, September 30, December 31,
2003 2003 2002
------------ ------------- ------------
On-book
receivables $5,972,437 $5,763,000 $3,998,081
Gain on sale
receivables 7,015,902 8,174,857 12,210,492
------------ ------------- ------------
Managed
receivables $12,988,339 $13,937,857 $16,208,573
============ ============= ============
December 31, September 30, December 31,
2003 2003 2002
------------ ------------- ------------
On-book
receivables:
Principal $5,972,437 $5,763,000 $3,998,081
Allowance for
loan losses
and
nonaccretable
acquisition
fees (353,798) (358,431) (218,433)
------------ ------------- ------------
$5,618,639 $5,404,569 $3,779,648
============ ============= ============
5.9% 6.2% 5.5%
============ ============= ============
(% of ending
receivables) December 31, September 30, December 31,
2003 2003 2002
------------ ------------- -------------
Loan delinquency:
On-book:
31 - 60 days 5.0% 4.7% 3.7%
Greater than 60
days 1.8 1.8 1.5
------------ ------------- -------------
Total 6.8% 6.5% 5.2%
============ ============= =============
Gain on sale:
31 - 60 days 9.8% 9.5% 11.0%
Greater than 60
days 3.7 3.8 4.9
------------ ------------- -------------
Total 13.5% 13.3% 15.9%
============ ============= =============
Total portfolio:
31 - 60 days 7.5% 7.6% 9.2%
Greater than 60
days 2.9 2.9 4.1
------------ ------------- -------------
Total 10.4% 10.5% 13.3%
============ ============= =============
Change in repossession charge-off
policy reconciliation
Managed % of
Portfolio Managed
Location Description December 31, Portfolio
2003 December
31, 2003
---------------------- -------------------- -------------- ----------
Repossession inventory Accounts in
included in managed redemption period
receivables carried at
outstanding
receivable balance $68,307 0.5%
Repossession inventory Accounts after
included in other redemption period
assets carried at
estimated residual
value 13,267 0.1
Repossession inventory Accounts after
included in credit redemption period
enhancement assets carried at
estimated residual
value 29,767 0.2
Repossession inventory To comply with new
charged off repossession
charge-off policy 59,427 0.5
-------------- ----------
Gross repossession
inventory under
former charge-off
policy $170,768 1.3%
============== ==========
Three Months Ended Six Months Ended
December 31, December 31,
------------------- -------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Net charge-offs:
On-book $65,087 $18,705 $121,507 $32,301
Gain on sale 183,787 217,897 405,200 409,582
--------- --------- --------- ---------
248,874 236,602 526,707 441,883
Timing adjustment for
change in repossession
charge-off policy 59,427 - 59,427 -
--------- --------- --------- ---------
$308,301 $236,602 $586,134 $441,883
========= ========= ========= =========
Comparable net charge-offs as a
percent of average managed
receivables 7.3% 5.8% 7.5% 5.6%
========= ========= ========= =========
Net charge-offs including
change in policy as a
percent of average managed
receivables 9.1% 8.3%
========= =========
The Company evaluates the profitability of its lending activities based partly upon the net margin related to its managed auto loan portfolio, including on-book and gain on sale receivables. The Company uses this information to analyze an·a·lyze v. 1. To examine methodically by separating into parts and studying their interrelations. 2. To separate a chemical substance into its constituent elements to determine their nature or proportions. 3. trends in the components of the profitability of its managed auto portfolio. Analysis of net margin on a managed basis allows the Company to determine which origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real channels and loan products are most profitable, guides the Company in making pricing decisions for loan products and indicates if sufficient spread exists between the Company's revenues and cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. to cover operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. and achieve corporate profitability objectives. Additionally, net margin on a managed basis facilitates comparisons of results between the Company and other finance companies (i) that do not securitize Securitize The practice of a company selling accounts receivables or other debts owed to it. The third party that buys the debt assumes ownership of it and the responsibility for collecting the debts, and keeps the repayments when made. their receivables or (ii) due to the structure of their securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. transactions, are not required to account for the securitization of their receivables as a sale. The Company routinely securitizes its receivables and prior to October October: see month. 1, 2002, recorded a gain on the sale of such receivables. The net margin on a managed basis presented below assumes that all securitized securitized Of, related to, or being debt securities that are secured with assets. For example, mortgage purchase bonds are secured by mortgages that have been purchased with the bond issue's proceeds. receivables have not been sold and are still on the Company's consolidated balance sheet consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. . Accordingly, no gain on sale or servicing income would have been recognized. Instead, finance charges would be recognized over the life of the securitized receivables as earned, and interest and other costs related to the asset-backed securities Asset-backed security A security that is collateralized by loans, leases, receivables, or installment contracts on personal property, not real estate. asset-backed security A debt security collateralized by specific assets. would be recognized as incurred.
Three Months Ended Six Months Ended
December 31, December 31,
----------------------- -----------------------
2003 2002 2003 2002
------------- --------- ----------- -----------
Finance charge and
other income $578,817 $704,516 $1,188,073 $1,391,244
Interest expense (149,497) (195,011) (348,331) (397,001)
------------- --------- ----------- -----------
Net margin $429,320 $509,505 $839,742 $994,243
============= ========= =========== ===========
Three Months Ended Six Months Ended
December 31, December 31,
----------------------- -----------------------
2003 2002 2003 2002
------------- --------- ----------- -----------
Finance charge and
other income 17.0% 17.4% 16.9% 17.6%
Interest expense (4.4) (4.8) (5.0) (5.0)
------------- --------- ----------- -----------
Net margin as a
percent of average
managed
receivables 12.6% 12.6% 11.9% 12.6%
============= ========= =========== ===========
Three Months Ended Six Months Ended
December 31, December 31,
----------------------- -----------------------
2003 2002 2003 2002
------------- --------- ----------- -----------
Operating expenses $88,340 $102,343 $169,324 $218,169
Operating expenses as a
percent of average
managed receivables 2.6% 2.5% 2.4% 2.8%
Tax rate 37.75% 38.50% 37.75% 38.50%
The following is a reconciliation of finance charge and other income as reflected on the Company's consolidated income statements consolidated income statement An income statement that combines the income statements of two or more organizations. As with other consolidated statements, a consolidated income statement eliminates any funds owed to or due from firms within the same group. to the Company's managed basis finance charge and other income:
Three Months Ended Six Months Ended
December 31, December 31,
------------------- -----------------------
2003 2002 2003 2002
--------- --------- ----------- -----------
Finance charge and other
income per consolidated
income statements $233,525 $139,556 $452,778 $235,205
Adjustment to reflect
income earned on
receivables in gain on
sale Trusts 345,292 564,960 735,295 1,156,039
--------- --------- ----------- -----------
Managed basis finance
charge and other income $578,817 $704,516 $1,188,073 $1,391,244
========= ========= =========== ===========
The following is a reconciliation of interest expense as reflected on the Company's consolidated income statements to the Company's managed basis interest expense:
Three Months Ended Six Months Ended
December 31, December 31,
------------------- -------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Interest expense per
consolidated income
statements $56,287 $39,884 $145,031 $79,903
Adjustment to reflect interest
expense incurred by gain on
sale Trusts 93,210 155,127 203,300 317,098
--------- --------- --------- ---------
Managed basis interest expense $149,497 $195,011 $348,331 $397,001
========= ========= ========= =========
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